Eiffage SA (FGR) Earnings Call Transcript & Summary

[Interpreted] Good evening, all. With [ Sarah ], a good example of 9 tunnel borer and soon 10, operation on Grand Paris Express. Thanks for being present today for this presentation of this half year results of the group. Thanks to those who joined us in this audience. We decided to keep this meeting live, reducing the amount of present people so as to abide by the rules of physical distance due to the situation. Let me commend those who are with us usually, and given the circumstances, are following us remotely. But it seemed important to gather and share directly. We are experiencing a unheard of time perturbated, turning our professional and private lives topsy turvy. We adapted permanently to the change in the situation to make sure that we can go a continuous operation of our core activity, preserve health and safety of our employees, our partners and clients have all been our guide. I wish to thank our employees. The motivation remained intact during this time. And it is greatly thanks to them that we could face the situation. The faultless engagement enabled us to go on upgrading for some jobs, and other countries enabling us to do so, and it's with professionalism that they mobilize to find solutions enabling to resume our activities and satisfactory health conditions. And I do not forget those who have been impacted or who's next of kin have been impacted and I want to reassure them of our support. We are ensure during this health crisis, the operational continuity of our core activities and with the functioning of our countries where we are present. Our teams remain mobilized on the ground in the service of everybody in order to maintain the hospital maintenance, sustainability of the food chain, provision of electricity, water and gas; and operational continuity for the motorways, trucks and airports will let solidarity actions as close as possible to the ground. Besides financial aid, we provided masks to hospitals or association. We implemented specific operations on our highways, motorways for the drivers, truck drivers, health, staff and those in the service of public. I wish to commend the personal actions led by many employees of the group as well as by the Eiffage Foundation. Beyond the shadow of a doubt, the compact organization of the group has been a major asset to react with agility as close as possible to the territories where we are present. In order to cast a light on the impact of COVID-19 on our activities, it seems important to share with you the effect on our activity rate in the 4 main countries where we are present. As you notice, measures of lockdown chosen by the various governments had a very different impact for works and public works. With the exception with the activities for the essential sectors will remain totally operational in all of the countries. The positive side of this graph is to prove that we know how to integrate the barrier gestures in our lines of business. And we learned how to work by incorporating the health constraints of COVID. In France, in order to make the turnaround possible, we participated in the implementation of the guide of the public office of public works, enabling everybody to integrate the barrier gesture and the operations as to preserve the safety of everybody. The recovery has been down progressively, safely for all our employees. Beginning of April, several operations had restarted. End of June almost, all of the construction sites were working with 90% of our staff. The fight against the virus requires to be aware at every second and to care for one another. The teams in all our locations adapted the organization of work so as to integrate those [ barrier ] gestures, taking into account the specificities of each business line. The group proved that we know how to work under sanitary constraint and receiving all the protection equipments necessary to our operations. We are totally organized not to stop our activities. In case an eruption of COVID, our processes will enable to stop the dissemination so that the effect would remain local and limited in time. Following these few words about this unprecedented crisis, allow me to come back to the activity because in spite of an interruption sometimes of some weeks, our construction sites were expecting us, and our teams were happy to be back as soon as possible. The group, as you know, is very committed on the program of Grand Paris Express on all of the construction lines. We have 3,250 employees involved in all the projects on this map. On the line 16.1, 5 tunnel borers are operational and the sixth and last will start digging in fall 2020. As I said last February, 6 machines on the same process is absolutely exceptional. We have reached in 27 months of time, 400,000 hours of insertion out of the 500,000 that we committed to deliver during the whole period of the works. On Line 15 South, 2 tunnel borers are operational. [ Camile ] progressed 1.7 kilometers out of the 3 -- 4.3 tunnel borer [indiscernible] who started in December had progressed 874 meters out of the 3.2 kilometers. It's a full speed construction. On Line 14, 12 tunnel borer completed 70% of the track. It should reach the last station of Chevilly Trois-Commune end of September and finish digging beginning of December 2020. A 1.5 years of civil engineering will be necessary to finalize the works. On the Eole project, Virginia, who [ throd ] half of the path is nearing Porte Maillot. Final destination station [indiscernible] Haussmann will be reached third quarter 2021. On screen as the [indiscernible] that took place in June. Follow the [indiscernible] the bridges are ready, and they will be started in implementation fourth quarter 2021. On the track, we delivered [indiscernible] and finished the refurbishing of the trucks Magenta et Haussmann-Saint-Lazare. Teams of Eiffage Énergie Systèmes follow-up on the high and low voltage networks. We are still working on several batches on CDG Express. We refurbished all of the trucks on the operational network that required 5 weeks of work, continuous work in a very tricky environment. Besides the Grand Paris Express project, we are operating on the train tunnel Lyon-Turin who didn't start during the crisis. We have only 600 meters to dig out of the 12 kilometers, end of digging summer [ 2020 on ]. 3 batches are under tender for a total of EUR 4 billion. The decision will be taken end of 2020. Beyond tunnels, in spite of the constraint linked to the health context, the 3 buildings of Floresco were finalized on May 15. 29,000 square meters will host the teams of [ Ubisoft ] project, illustrating the strategy of the group in terms of sustainable construction as witnessed are testified with the various labels for its environmental performances. We inaugurated in February, the Reflets program in Versailles, 72 housing units over 3 buildings. The teams of Eiffage [indiscernible] started in May, the [ Earth Wood ] and access roads on [indiscernible] for Eiffage [indiscernible]. 20- hectare project for a residential purpose with 3 -- 530 new housing units. It will mobilize also the teams of Eiffage Énergie Systèmes. July 8, we erected the first [indiscernible] Equilibra, designed, made and implemented by Eiffage Énergie Systèmes and Eiffage Metal and the framework of the refurbishing of the 400,000 volts line of [indiscernible] who will feed 530 little towns in [indiscernible]. The aim is to reduce the impact on the way of life of inhabitants. In spite of a lockdown, we successfully sold 1,863 housing units compared to 2,534 in 2019. There's a strong traction on real estate, especially in Ile-de-France area. Eiffage, as you know, is never far away from the Eiffel Tower, our teams of Eiffage Metal work on the renovation of the elevator on the northern pillar. In August, we used the process low carbon Recytal-ARM on the Road 746 in Western France. It was about to regenerate 3 kilometers of the road with a biosourced -- [ digital ] biosourced emulsion I already discussed earlier, and we're doing the same on the [ D96 ] and the [indiscernible] department. Maybe you've seen those pictures on TV or maybe you read about it in the press. Our teams, this Sunday morning, demolished through an explosion of a tower of 55-meter [indiscernible] and 40,000 tons of concrete. It hadn't been done for the past 13 years. Operation implemented in the framework of development of the new neighborhood Grand Canal Plan [indiscernible] led by Eiffage Aménagement. In Belgium, we have delivered the dam lock Harelbeke 230 meters long, 12.5 meters width in the framework of the project [indiscernible] about to improve the link between the river [indiscernible] and the River [indiscernible]. In Spain, we have delivered the largest solar farm in Europe, Núñez de Balboa, a solar farm of 500 megawatts on 1,000 hectares operated by Iberdrola in April. Since 2010, its 50 solar farms built by Eiffage Énergie Systèmes International, Spain, Africa, Latin America and the Caribbeans, over 1.6 gigabytes -- gigawatts, sorry, of electric capacity being delivered. In Germany, we implement the renovation work of a piece of 10 kilometers on the track Oldenbourg Wilhelmshaven in Saxony. Out of the 6 contracts of projects, 5 have been [ related ] to a group led by far Eiffage over EUR 300 million of works. At Goyer, the traction remains very good for the activity. In Warsaw, our subsidiary delivered the 41,700 square meters of the facades of the Hub Tower, 130 meters high. Senegal, works went on, on the train, the local train of Dakar. May has been highlighted by the last fine-tuning that we're able to deliver this track of 37 kilometers in the weeks to come. The stations of the -- we are already ready to welcome the first travelers. In Africa, in the framework of the [ Millenium Program ], under American financing, we have secured 4 contracts [ for ] high-voltage positions in [ Bena ], 2 electric lines in Bena and 2 high-voltage posts in Ghana, enabling the electrification of Africa. Concession side, as you see on screen, the brutal decrease of the motorway traffic during the lockdown. The quarterly traffic came back to the level of 2007. At the same time, the airports [indiscernible] saw the traffic reduced to the tune of 95%. With the end of the lockdown, then the restriction of displacement of moves, the resumption of the motorway traffic has been significant. Traffic in July and August in APRR is very close to the one of 2019. Conversely so, the recovery of the air traffic is very slow. So in July, remain around 25% and August is expected slightly over 30% of the 2019 traffic. In the motorway concessions, Eiffage finalized the acquisition of 2% of APRR and Adelac for a net investment of EUR 150 million financed on its cash flow. In September, we'll launch on the piece of 8-kilometer of the motorway A48 directionally on [indiscernible], the first path in France devoted to car sharing and to cars with a low-carbon release. At peak hours, when the white light will flash, the left way will be devoted to car sharing. Maximum speed will then be 50 kilometers an hour, i.e., 30 miles per hour. In spite of the pandemic, we went on winning important contracts. March 3, Eiffage Construction received in general enterprise by the [ Gecina ] Group, the renovation of the former headquarters of [indiscernible] in Paris named l1ve, a refurbishing of 33,500 square meters on 9 floors and 6 floors below ground, beginning in December and delivery in 2022. March 5, Eiffage Concession won in group on the contract of public service for 20 years of the future swimming pool of Mérignac. Global amount of investment for this project is above EUR 47 million. Eiffage Construction will deal with the design construction of the project. With the start of the contract, we resumed the operation of the future motorway A79. 16 March, our specialist, Goyer, signed a contract for the facade of the tower To-Lyon designed by Dominique Perrault. April 7, Eiffage Concession, the [ grouping ] 50-50 finalized the financing and signed the PPP contract of motorway A3 for 30, 3-0, years. Works with an amount of EUR 1.5 billion implemented by Eiffage in Johann Bunte Germany. April 15, following the authorization of starting the works, Eiffage and [ groupment ] started the execution studies and the building of a section of 80 kilometers of the Phase 1 of HS2 between London and Birmingham. 15 [indiscernible] ducts, 5 kilometers of covered tranches, 52 kilometers of road, 67 flyover bridges and 30 million cubic meters of excavation for EUR 2.6 billion, 35% of it for Eiffage. May 6, signing by Eiffage Construction [indiscernible] for a contract for design, construction and maintenance for 5 years of the Paris-Saclay Hospital for an amount of EUR 141 million. It's the fourth major operations signed by the group in the health sector in 2020 for a total of EUR 210 million. June 9, Eiffage Metal won in a [ groupment ] a market for a substation for the wind farm Hollandse Kust in Northern Sea, a structure of 70 meters high, the equivalent of a tower of 25 stairs, 25 flights. July 2, Eiffage Construction was appointed [indiscernible] for the market of construction of the tertiary projects, Joya, 49,000 square meters in [ A plus 7 ], i.e., ground floor plus 7 floors in Fontenay-sous-Bois. July 6, Eiffage Énergie Systèmes won the contract for the delivery, installation and implementation operation, our system of ventilation for line 16 and 17 of Grand Paris Express. And 23rd July, study, signaling, verification of replacement of signals of over 500 kilometers of high-speed line train Paris-Lyon 58 new signaling stations, a contract for over EUR 50 million. As you have seen, the business activity remained very dense in spite of the lockdown. Yesterday, in Belgium, we won in a [ groupment ] the contract for the construction of the new headquarters of the RTBF, the public radio and TV in Belgium, a building of 6 floors, 38,000 square meters together with housing units, schools, kindergartens and shops. All the significant contracts enabled a strong growth of our book of orders. However, we remain careful about the renewal of the [ goodwill ] who were affected -- impacted by the postponement of the local actions in France and the effects of the pandemic on -- of some of our industrial customers. In addition to those highlights of our activities, works and concessions, we went on spreading our low carbon strategy, as I explained several times. We published in April our first climate report defined according to the TCFD framework, precising risks and opportunities of finance linked to the energy transition and to climate change. The group will align itself on the trajectory of 2 degrees centigrade adopted by the Agreement of Paris of 2015. I'm convinced that we cannot do it on our own. We must mobilize the collective intelligence to make ASAP, the standard of low carbon, which is still in pioneering stage. Aware of the challenges to adopt a sustainable growth. We ambition to measure, to gauge the impact of each and every line of business of ours to assess this environmental damage. We published our biodiversity plan in the framework of the process committed enterprises for nature, Act4Nature France. It's been over 10 years that Eiffage committed itself in the fight against the erosion of biodiversity. Our successive commitments enabled us to integrate the operation of the preservation of the living stock in our businesses. The recovery plans being implemented in order to get out from an economic crisis, outcome of the sanitary crisis. Our use in Europe has accelerators for climate and environmental transition. It's very good news for our line of business and we intend to put forward our assets. Our group also implemented new tools to strengthen and diversifies our means at attractive conditions. Eiffage was rated F2 short term by Fitch and implemented its first [ and ] floating of bonds, EUR 500 million for 7 years. APRR refinanced EUR 4.1 billion in its book of debt and was credited A minus at S&P. Financing were very welcomed by banks and investors in general, showing their trust in our group. Let's get to the major figures of the half year. A very strong decrease of the revenue by 18.9% totally linked to COVID, linking a decrease of operating profit to the tune of EUR 262 million. Facing this exceptional crisis, our loss remains limited to EUR 8 million. The financial net debt at EUR 10.9 billion enjoys the [ concentrator ] measures taken at the beginning of the pandemic. The order book is increasing by 15% to over EUR 15 billion. It's on EUR 1.4 billion, the activity that we could not implement due to the COVID, but it also an order intake on the half year above -- EUR 700 million above those of 2019. Regarding the short-term perspective, a certain amount of elements give us -- I mean, make us trust our capacity to have a turnover, a turnaround on the second half year. All our construction sites have resumed. With the end of the restructuring, our motorway concessions [ enjoy ] the traffic very close to the one of the past year. All the governments are very sensitized to adapt very locally, and as close as possible to the territories, the health conditions in case of the resumption of the pandemic. Even if we may have localized impacts, we hope to avoid significant lockdowns. Our teams integrated well the health constraint and the productivity is very close now to the one we had without the COVID. On this base, we anticipate a decrease of activity and of the profits on all of the year, but a significant turnaround at the second half year. Medium range, our construction works and concessions are at the heart, at the core of the environmental transition. We have a very wide portfolio of solutions on which we've been working for several years because we remain convinced that the challenges of climate and biodiversity are fantastic opportunities for our businesses. Consistency of our geographic positioning, our strategy of development of our businesses in all of the territories where we are sustainably present positions naturally as partners for those territories in the acceleration of their environmental transition. Thank you for your attention, and I invite Christian to deliver the in detail explanation of the financial elements. Thank you.

[Interpreted] Good evening, everyone. Good evening to those of you in the room and those watching us online. Let's go through the figures that we just mentioned. So there are no surprises. Revenue is down both in contracting and concession, to the tune of about [ 20%, 19%, 20% ] down. There's very little by scope effect regarding contracts, part of a few acquisitions here and there. And in concessions, we integrated Toulouse airport has a change in scope. On the right-hand side, you can see that there's lower revenue. Well, the drop of revenue is much worse in France, twice as much in France, 21% down compared to the international situation, only 11% down. If you look at the picture on the left-hand side, revenue is down more significantly in construction. Well, there's more so than international. Because we have, well, less exposure internationally, and the international sector resisted better, you can see this infrastructure. And we also have less degradation in maintenance service and vital functions. They were not interrupted, but we have less presence there. This is mostly the case for energy systems. On the right-hand side, you can see a breakdown of the countries on the 3 major countries outside France, which in a full year, generated about EUR 1 billion in revenue. Germany remained very dynamic, plus 8.7%. Spain remains stable, whereas in Belgium, the drop in revenue was due to the crisis. It was about the same as in France, minus 22%. And if you look at the difference in contracting between H2 2020 -- H1 2020 and last year, you can see that, of course, revenue is significantly down. By and large, if you look at civil engineering and public works, roadworks and building, not including energy, and this is not on the slide, but the margin is down by about 6% in France and only 2% international, talking about public works not including property development or energy. So this is a bit significant. But that targets the main difference in the drop of profitability. And so you have contracting a loss of EUR 146 million compared with a profit of EUR 115 million in H1 2019. Of course, you have the health crisis. But on top of that, you have high seasonality that in any case, tends to bring income down. Concessions, because of their cost structure, have a positive margin, 36%, but it's still down. And the income is down about 40%. All in all, operating profit remains positive, the operating margin 3.8%. And so what we can see that profitability is down compared with the 4 years of stability that came before. Now if you look at all the sectors in -- work, in contracting, France, of course, we are very much exposed, and that's the country that suffered the most. But also, you have another situation, contracts tend to be lump sum contract and they're not revisable. So you cannot really get compensations. And that means that the margins were eroded there. And so because of this combination, fixed prices and volumes, this is why you have a significant drop in income. But property development resisted rather well. We see that the number of bookings were up. And also, the profit is better because we generated about EUR 20 million in profit, so margin is up 6%. But the only concern is that because of the postponed elections in France, there was fewer building permits. So this is a concern, not just for property development, but also other urban developments. Now you may remember that as part of the pandemic, we started a number of projects here. In the [indiscernible], we decided to build a plant of FFP2 protection masks, and that will be operational as early as November. And that means France will gain more autonomy in providing its own mask. And so over and beyond the present health crisis, we are gaining some form of autonomy. In infrastructure, revenue is down by 15%. Overall, 20% down in France in civil engineering, less so in Eiffage Metal because we started the offshore wind farm in [ San Jose ]. In Civil Engineering, where Grand Paris Express accounts for about EUR 300 million on the half year compared with EUR 313 million last year. Of course, there would have been even more of a growth had it not been for the pandemic. In France, in road works, road works is what suffered the most. Income is 23% down, so both in volume but also in income. And also, this is the business where we have the highest fixed cost because this is our own works. We also bought back the balance of the [indiscernible] quarries in [indiscernible]. We anticipated that now we have 100% of that. So that's an additional expenses. And internationally, in civil engineering, we have a good momentum in Germany, especially for infrastructure. We've, for the past 3, 4.5 years, we've been enjoying this. And production didn't stop in Germany with the pandemic. And in fact, we generated almost 11% growth in civil engineering and roadwork in Germany. Let's go to Senegal. In Senegal, we had this internal support operation for our own employees. We provided them with the food baskets. So there are about 22,000 employees there. That's [ what we're ] doing during the pandemic, we supplied them with these food baskets. Energy system is the branch that did -- the sector that resisted best during the lockdown period in France. In Germany and Spain, these 2 countries were most resilient. We had 10% growth in -- over the half year in these 2 countries. So even though the profit margin is down, it remains positive at 11 -- 1.1%. So what you have is a slightly positive profit margin in France and a very limited decline internationally because we have only 1% -- we're only 1% down compared to last year, with a strong, robust performance in Germany, in the Netherlands and in Spain. And indeed, in Spain is where we were able -- mobilizing 30 people, 24 hours a day, we were able to set up a countryside hospital in [indiscernible] City, the medical school, and that was built in record time. We talked about lower traffic. APRR, of course, weekly traffic there between its normal level and minus 83% for the lowest week and came back to minus 14% on the last week in June. So this amplitude in variation accounts for the drop in revenue at about 25 -- minus 25%, [ likewise ] for profit. EBITDA margin remains high because we have less by way of fixed costs, less [ currently ] than in contracting, and we're very careful about expenses. On other financial aspects, we continued the implementation of the CapEx plan. And we refinanced our [ Eiffage ] debt, bank debt and the undrawn [indiscernible] decline of APRR. We do this every 5 or 7 years on top of the issuance of bonds. And then we have this vegetable garden city operation. And the idea is that we have urban vegetable patches where we can provide local produce to local inhabitants, which presents less risk for consumers. Now we have another slide here regarding concessions. On the left-hand side, we have something new, and we have a recap of the main operations in concessions. Revenue was down, but less so, minus 20% less so than for overall concessions and for motorways. For 2 reasons because the PPPs have no risks, and they generate stable income, such as BPO. We have 2 airports. Now to be absolutely clear, the revenue of Toulouse is a change in scope and that of [ Lille ] is organic growth because it's a new concession. There's less operating profit on the right-hand side and that's because there's less traffic on motorways. Another point, we depreciated, we wrote down, we had an impairment on the [indiscernible] stadium for its commercial activity because of the uncertain commercial income. So now we only look at the income that can come from the PPP because that's where we have a fixed guaranteed income. We took that decision on the basis of the whole year for the commercial part because there's uncertainty both on shows that can be programmed. And indeed, the reopening, we don't know when we will be able to reopen the facility for other sporting events or other shows. Another example of operations conducted during the lockdown, the boarding school at [indiscernible] was developed in PPP by Eiffage. And for a period of 2 weeks, we received young students who normally stayed in foster homes or who were ill with COVID. So we had them there, we housed them there for 2 weeks. On the consolidated income statement, apart from income and revenue, we have other income and expenses, noncurrent expenses, they are down. They now are amount to a net expense of EUR 12 million. So we will look at the details of that. That's where we have the impairment of the stadium. So outside the concessions. And we also took into account the 61 balancing payment that we received as part of the transaction on the buyback of 2% of APRR and [indiscernible], that is in line with accounting regulations. The cost of net debt, now it's stabilized, but it's still down EUR 11 million because of the new bonds that APRR issued and are less expensive than previous bonds. In other financial income and expenses we had in 2019, the dividend paid by [ Getlink ], we don't have it this year. And then the effective tax rate is 30.3% compared with 30 -- sorry, it will be -- it's almost 33%. So we'll be close to 32% this year compared with last year. At 30%. So all in all, this is why we have a net loss of EUR 8 million. Regarding the balance sheet, and if we look at the cost of net debt, so here is the transition bridge, we started off with EUR 10.2 billion. Of course, EBITDA was down for EUR 142 million, predictably. The seasonal variation in working capital requirement is less so than in 2019 as a result of the lesser business in April and May. So that means that we had fewer receivables in the pipeline as it were. And we had, at the same time, the payment of bills that we -- that were issued in Q1 where business was normal. Likewise, the bills received from third parties, which are less than the previous -- than the former. Hence, the positive effect on the WCR, not just in our company but elsewhere in the industry. So the taxes are down, especially corporate income tax. So all in all, we have an operational cash flow of EUR 104 million. So we generated cash even though this was a very challenging period. Regarding operational CapEx, we have increased in contracting related to the TBRs -- the tunnel boring machines, TBMs, for the Grand Paris Express, and the concession with the starting of the work on the A79 motorway to the tune of EUR 50 million. So normally, we -- this is normal. We have a negative cash flow in H1. And now it's very negative to the tune of EUR 373 million. It's amplified. It was less so last year. We have also the buyback of 2% of APRR, so that's external growth. And in capital operations, we have the dividends paid by APRR to its minority shareholder, increase in capital reserve to employees and the buyback of shares less than in 2019. We limited that because of the pandemic. And in the self same logic, we decided not to pay a dividend for the year 2019. So as a result of that, the net debt at 30 June, at the end of the period was EUR 10.9 billion. And you -- on the next slide, you compared with the last year 30 June 2019, it was only -- it was EUR 10.7 billion. So the difference is not so big, a limited increase in spite of this challenging half year because of the preventive measures that I just mentioned and because we kept WCR under control in H1. But you have to keep in mind to keep the analysis complete that there were external growth operations over the past 12 months, we acquired Toulouse. And that meant we also had to acquire the debt of the Toulouse airport and of course, the 2% of APRR and the small operations of external growth. And indeed, we started work on A79. That was financed on our own funds during the COVID period. So the net cash position is EUR 202 million. And the non-recourse debt stands at EUR 11.1 billion, that's for concessions. Now this is a new slide that we want to propose to share. Some of you during the pandemic, some analysts and investors want to be concerned about our cash position. So if you start with the bottom side, you can see on the bottom boxes, the numbers I gave you, 202 -- EUR 2.2 billion in net cash for the holding company and contracting, and EUR 11.1 billion on concessions. And then if you go up, you have the breakdown for the holding in terms of net and gross cash positions. Of course, we have a number of instruments. We have a program to securitize receivables. We have 2 commercial paper programs and the issue of a opening bond for EUR 500 million in June for principal. And on top of that, you have the undrawn credit line, $2 billion -- EUR 2 billion, I beg your pardon, for the holding company. And so that means we have EUR 4.6 billion in cash at 30 June. Likewise, in concessions at APRR, we have EUR 1.1 billion in short-term cash and EUR 2 billion in undrawn credit line. And so we have EUR 3.1 in billion cash. So that's a snapshot of the cash position. We don't draw sort of -- sum up the totals because we have flows where Eiffage SA is in control, but other flows and concessions where some assets are held by minority interest. And you have covenants, debt covenants without recourse. And that is why we show the debt -- net debt of the group in this way because this is in line with the contractor -- I beg your pardon, contractor and concession, contractor concession model. And finally, we have our order book that stands at EUR [ 7.1 ] billion, as Benoit said, increased for the reasons we mentioned. If you look at the various business areas, we have a 21% in infrastructure, which secured the major contracts which gives us more visibility on top of the major projects of Grand Paris Express. So much for this presentation, but now we are ready for questions. So unusually, we will take questions from analysts by phone because of the quarantine, some of the analysts had to remain in London or elsewhere. So then we'll have questions from the audience. Then we have questions in French by phone. And then questions in English by phone. We will translate questions and answers to these questions.

[Interpreted] So we will have now the first questions. And Benoit now joins me.

[Interpreted] Two questions. One, MAF2 and FRE and APRR [indiscernible] in the second about the works. Given the amount of provisional amounts and costs, will Eiffage Construction, Eiffage [indiscernible] will be positive again? And secondly, on APRR, same question on investment budgets. Given what can be expected this year and next year, there was a restructuring of the shareholding of APRR, not through FRE, but Eiffage took 4% on MAF2. Is this the forerunner of a strengthening position there?

[Interpreted] First question regarding APRR and MAF2, what happened basically is that taking the 4% from MAF2, we didn't change at all the way we control today through FRE, the initial alliance. The only thing is that being 4% of MAF2, if there were evolutions in MAF2, it would be part of those evolutions, but not very highly. The second -- the most basic element is for the time being that, as you know, the most important part of MAF2 is in the pocket of an Australian company. So no internal evolution on the shareholding of APRR. We consolidate those 52%. The governance remains the same as previously. The only thing is that being clearly the leading shareholder, we deliver a certain amount of services. This is why we did it, and we explained it then. Two 2 additional elements to the acquisition of those 4% of MAF2. One was the remnant since it's in the books, and we have a management fee of Eiffage SA for all of the services delivered to deal with the assets. But I think, honestly, that there's no evolution to be expected yet. The positioning is that, would there be an evolution. We are the co shareholders of MAF2. It's within MAF2 that things could happen. I can explain about the CapEx of APRR given the interruption of the sites. Given the figures, the amount is slightly below this year at EUR 450 million, but it will be EUR 450 million also next year in 2022, EUR 350 million that we gave you and we go on, on the next years. Regarding more, generally, the second question on the works. Basically, today, the assumptions, as we see them, and as I tried to explain in my presentation, we operate in spite of COVID, all the operations have resumed. We imagine to be close to the activity we had last year, and we still have some effects that can impact our profitability. But if you take those elements, you put them together, of course, we are on the turnaround of the second half year. That should really bring back a positive aspect on all the construction sites, our line of business.

[Interpreted] We might be positive on the whole of the year?

[Interpreted] Yes was the answer, yes.

[Interpreted] HSBC, book of order, margins, concessions. First question about the books of order. What are the rules if you're entering a new business in the book of order? What is the risk for cancellation if things go wrong? What is the security and the book of order? Second question, on margins. Beyond this year, which has been [indiscernible] can we expect in 2021 margins similar to the one of 2019? Third question, about the concession. Do you think that the current atmosphere gives some sustainability before the presidential election, a deal, for instance, of extension of the concession in exchange of tariffs?

[Interpreted] Book of orders, signed contract means signed contract. Internationally, we expect first to get the down payment. In terms of cancelation, all the contracts seem to us to be without any risk of cancelation for all the major contracts. Then a small order could be canceled, but nothing significant. Our book of order will be implemented. We do not expect any loss of order. For the time being, we had no cancelation. We had some times and some industrial lines of business postponements. But for the time being, we didn't notice any significant loss in the book of order. Your general question about the margins. Globally speaking, we integrated in a satisfactory way the health constraints, the effects on productivity, which are weaker and weaker. Most of the impact is the installations necessary on the construction side for the online restaurants and so on and so forth. We lost almost 1 hour per employee per day. But eventually, those downtime has reduced. Reasonably, there will be no intrinsic effect on the quality of the margins and the way we can home them. Today, we have important books of order, but on the goodwill, I put it forward. The calendar of the local elections really impacted them because we didn't have [ anyone ] to talk to. There were lots of tenders. Yes, the local municipalities are in financial conditions which are not bad. The other element is that we understand the will of the government to go on helping the local territories because this is the knit for the SMIs, SMEs. If it goes better at the beginning of next year, it will remain on the same volumes. Well, if we don't have the same volumes, there's going to be some impact indeed. I hope to have been clear enough in my answers. Philippe, do you want to give an answer?

[Interpreted] Generally speaking, we work to make suggestions to improve the networks and the framework of the low carbon. We worked a lot internally on all the issues of environmental transition, which will have a meaning for our motorways. Some months ago, the government's ministry of transports asked us for our ideas of investment, enabling to improve and speed up the environmental transition on the motorways to reconquer biodiversity, and this investment plan would aim at the turnaround of the economy. Without getting into the details, this plan could incorporate a massive development of charging stations, the tunnels for wildlife, more parking lots, lanes devoted to car sharing. We were foreigners in this area, with the integration of a lane in [indiscernible], buildings of parking, secured parking lots for HGVs, a certain amount of investments going into the direction of environmental transition and biodiversity. Discussions are underway, moving forward at a reasonable pace, but it's too early to speak about the content of the plan, it's volume.

[Interpreted] Eric Lemarié. Two questions on digitization. Due to the health situation, could this speed up the digital solution on your construction sites? Second question, in Eiffage, could you be interested by external growth in those businesses to acquire software companies, for instance?

[Interpreted] I'll start with the second question, if you don't mind. Quite often, when you have an idea or a solution, it's a roll-your-own solutions, to be as close as possible to the ground. But our job is our job. And I think you have to know how to open up quickly. Doing something internally enables us to find the solution, which is as close as what is expected. We have a partnership with FINALCAD. How this started, about the solution developed internally that we're using already. But then the means of the pure players of the software to be at the right speed and integrate new ideas out without comparison with what we can do, and we remain a line of business where there's a lot -- I mean, the ecosystem is very complex. We need very powerful machines to be able to integrate all this. We don't have the right science, so we feed ourselves on the others. There's no interest for us to internalize. We already have enough core businesses. We will not look into softwares. We just have to bet on the right horse, helping us to move faster on the acceleration provoked by the crisis, well, what is linked to digitization, yes, of course, we moved faster. Those who are dilly-dallying progressed like never before on their lives where there's no tools and with the limits. We like human contact. Distance is not an easy game. But yes, most -- I mean the company progressed. We talked about the ERP group. Eiffage decided to have an ERP with shared service centers. It made us very powerful to maintain the capacity of billing, cashing in. All this worked perfectly during the lock down. It helped the speeding up of this in our lines of businesses. We'll go on doing it. The true digitization is the one going to the core of our business. I see it more into the industrialization of our jobs. Both are working together, and we noticed that the locations who are bearing more on digitization turn around much faster rather than compared to a very traditional environment. Yes, it is accelerating a more industrial vision of our businesses, and I'm convinced that our experience will help us to move faster in this direction.

[Interpreted] Virginie Rousseau, ODDO. Traffic. You mentioned the fact that the summer traffic was close to the level of 2019. Can you elaborate? Is it true for the HGV and LVs? Did you notice or analyzed different dynamics? I mean the teleworking change the uses. Is there a wider diversity of traffic? What -- do you have an idea of the distance traveled by the users? We have the feeding that Friday nights and Saturdays didn't see traffic cams on the motorways. So how do you analyze that? What can you say about it, with the impact on the H2?

Indeed, if we look into July, August, traffic volumes are equivalent to the ones we had in 2019, with a increase in August, with people going on vacation. This year, we enjoyed mostly French clients, almost exclusively French, with a deficit of foreign clients very visible in our networks. To be close to 2019, we're very close in both segments, LVs and HGVs. Trends due to teleworking, so far, we didn't notice any major change on the composition of traffic. And honestly, it's difficult to say if things moved or will move in the short or medium term. I don't think there's going to be an impact on the traffic. I've seen studies concluding that teleworking will develop traffic on the motorways, so it's rather complex as an issue -- as a topic. Some surveys show that people would rather telework from the countryside rather than from the city apartment. Some segments of the network are excessively used by [ joint through ] traffic between [ NZ and Geneve ], which was most impacted by the nature of traffic because it is truly an intrinsic characteristic of this motorway. So it's easier to live there. We had also issues with the border. We don't know what is the share for teleworking and the fact that there were some problems of health issues between Switzerland and France. This is what we can say. It's one of the topics we will monitor in the second half of the year. As I said in the presentation, the effect of the restriction of travels in the 100 kilometers area, well, there was an upsurge in traffic when the restriction of the limitation of travel to 100 kilometers around your home was lifted.

[Interpreted] I want to ask a question, additional one. You said that in July, August, traffic HGV was equivalent to the one in 2019, to think that the resumption of the HGV will go faster than the 2008 crisis when it took 10 years to resume to the same level. Second question, about the tenders you mentioned for EUR 4 million on Grand Paris in the next 1.5 years. Do you have enough capacity to win 1 of the 3 tenders?

First question regarding HGVs. We never delivered information about the traffic from that point of view. We're all the same elements to imagine something. We didn't do it usually, so in this time, we cannot deliver any more information. However, what we noticed, yes, we told it clearly, the HGV traffic as well as the LV traffics are very close to the one we experienced in 2019. Tenders are linked to the Lyon-Turin railroad. It's not the same teams. We have a work in progress under Lyon-Turin with the same partners. And we'd be able to take one more batch of the Lyon-Turin because the core of the team is really already existing. Well, there are other tenders on Grand Paris, we didn't say anything in the presentation, but which are going on, and on which we will have also in due times, teams which will be more and more available.

[Interpreted] Additional question. APRR, with a margin resisting very well in the first half year. Staff costs, professional tax and various local taxes. What can you say about that?

The only thing what can be said by definition that are proportional, production taxes are variable compared to the sales, and the decrease is 24% when the sales decreased by 25%, while the taxes decreased by the same proportion. What we may add, we had a very, how should I say, warm winter, so we didn't have many expenses.

[Interpreted] On the decrease of staff expenses, how did things change during the second half year? Is the partial layoff still working or is it over?

[Interpreted] Look, the health situation is stabilized. If things do not go in the wrong way, it's over with.

[Interpreted] So staff expenses should be on the rise in the second half year. They increased by 4%, 5%?

[Interpreted] I don't have the figure. I cannot give you figures. They have decreased. Yes, they have decreased. By some percent, is it 3%, 4%, 5%, 65, I cannot say.

[Interpreted] Are we done with questions in the audience? Apparently so. Already then, so now we can take questions online in French. All right. We'll have questions in French online. Question number one comes from Elodie Rall from JPMorgan.

[Interpreted] Regarding motorway traffic, a question because, I mean, you saw some changes in traffic patterns over the past few weeks, in particular, because of the quarantine measures, not just in the U.K., but in other countries as well. Do you believe that this means that it will take a while for traffic to come back to normal over the next few months because of the resurgence of the virus? That was question number one. Question number two, on contracting. You referred to profit margins being degraded. But could you give us a guidance on 2021? I mean, we were told that some of your competitors are looking at margins coming back to normal in 2021. Is that your feeling as well? And question number three, on the capital allocation, you have some acquisitions, but you can also pay out dividends. What will be the deciding criteria on how you will spend the money and how much will go to investment and how much will be spent on the dividend? And regarding acquisitions, you started off with airports, but how -- what is your view on that, on acquisitions in general as well?

[Interpreted] Well, regarding motorway traffic, before looking at -- giving you any numbers, we looked at the numbers last night. We haven't found much, but we have only a few days ago, in August, and it's based on that, that we told you that July towards August would be very much the same as the same period last year. So no visible effect on -- as a result of the sanitary measures. The traffic remains unchanged. Regarding guidance, the profit margin has no reason to deteriorate. We know how to work under restrictions. There are some residual effects, but they are fewer and fewer of those because our teams now have taken it in their strategy. In any case, we have a reason to believe that there will be less of these restrictions than in the past. However, we're more concerned about recurring operations and -- but I mean, of course, if you go back to our previous volumes, we should be able to recoup the margins. But of course, it all depends on the volumes that -- in our restructuring -- recurring operations, especially roadworks in energy systems, of course. When there are strong volume variations, that has, of course, a big effect on profits. The other issue is recurring operations in energy systems, with some industrial clients. Some of them decide to adjust some of their operations. So adjustments on our side. So there may be some cutbacks there, but that may be compensated by other operations elsewhere. So I'm fairly confident that we should be able to redeploy our capacities. In fact, we find ourselves in overcapacity. We had trouble hiring. So if anything, we would be more or less back to normal. Now on dividends, we said so very clearly, the decision we made not to pay out a dividend was, of course, because of the political context. I mean, in the present state of affairs, we were asked, a, to ensure that we should pay out dividends only if we did not resort to any kind of state subsidy, furlough sort of benefits were applied to a limited extent, but also Spain and Germany. And we decided, even though we were in a position we could have paid out dividends, we decided not to do it because of the overall context. Having said that, the Board of Directors is well aware of the situation. So when it comes to deciding on the payout on the dividends for 2020, well, of course, the Board of Directors will take into account the fact that the 2019 dividend wasn't paid out. Regarding capital allocation, there's no change in our policies there. We are in a position to pay for our own growth to finance our own organic growth, and we will -- or external growth, and we will continue to do so in the future. In terms -- precisely in terms of external growth, there are a few acquisitions, some contracting acquisitions that may show up. And if such opportunities arise, we will we will take them, of course. If we have some targeted -- or specific targets, especially in energy systems, we will be looking at that. But we're looking at a small bolt-on acquisitions either, indeed, in France or elsewhere in Europe. Regarding airports, I believe we already explained that our policy is to look at territories. On those territories where we do have a presence, then we will be proactive and deploy all our know-how, so not just for contracting, but also for concessions. But of course, our sort of main territory is Europe, needless to say. But we will be looking at our greenfield PPP concessions. Of course, these are the most attractive because we provide most of the value-added. But of course, we have an integrated offer whenever that comes about. Well, thank you very much.

[Interpreted] The next question comes from Nabil Ahmed from Barclays.

[Interpreted] I had 3 sets of questions, if I may. Number one, could you give us a figure for the furlough benefits that were -- well, the expense in H1? So what's the effect on the cash position? Well, not just that but also the various forms of financial support, how much did that cost you? Still on costs and on Construction margins, I wasn't quite sure how you arrived at your numbers. You have additional costs because of the sanitary restrictions. And then there's some business that was taken out, some revenue that was taken out. At June 30, you had not signed with all your customers on the distribution of these additional costs. In Construction, there was some fixed -- many of lump sum fixed contracts. But did you take provisions to take onboard this degradation in productivity in H2? And then as a follow-up question, now that you have a modus operandi with your customers, can you expect an improvement, in fact, in the profit margins in H2? Second question, can you tell us about order intake over the summer? And for recurring operations, you mentioned the fact that there were a delayed municipal elections. But still regarding private clients, private customers, what do orders look like? And then final question, you have the climate measures and a number of stimulus packages that have been put out. Can that mean more opportunities in the medium term?

[Interpreted] Right. Regarding furlough, we have a -- well, it cost us about EUR 50 million in reimbursing these costs. You have EUR 40 million in France and EUR 10 million outside France. So this is where we reimburse that cost. But that does not mean because -- but the taxes, the payroll taxes are less. But if you work it out -- well, had it not been for the benefits of these furlough benefits, the results would have been different. But in any case, the profit for the period and the cash position for the period has been affected give or take a few million. Of course, we -- when we put in a request for reimbursement, we got the money more or less immediately. And of course, when that money came in, it means that the loss was less. Now the additional cost because of the pandemic and degraded productivity in consumables and additional overheads, cleaning and such like, of course, there was an increase there. And that's -- that was recognized in H1. In accounting terms, we wanted that to be only considered in H1 and that should not sort of be spread out over the year because we took it as a loss for H1. But conversely, whenever there was an agreement from the customer to cancel a charge in expense, that was written immediately. I don't believe there will be further claims in the weeks and months to come. I mean all the cases were taken care of in due time. So it's unlikely that there should be new developments that would have an impact on our numbers, on our figures after 30 June. I mean -- and especially on long-term contracts, everything was integrated in our budgets. Of course, for additional costs, all the additional costs were factored in and they are marginal debt. So the main impact was felt at 30 June both in terms of income and expense. So then when there was an expense, we booked it. We recognized it. But likewise, when money came in. Now this quarter now, we're only halfway through the quarter and we don't have the numbers in real time. We get the numbers at the end of the period. So at this point, we only have the numbers for July. Of course, there's less business in the summer anyway. So I don't think we have much to tell you. For the quarter, we did have major orders, the headquarters for RTBF in Belgium. But for recurring operations, it's early days now. We can't give you the trend or -- well, the numbers for sure. We're looking -- monitoring the situation.