Eiffage SA (FGR) Earnings Call Transcript & Summary

[Audio gap] Our geographic consistency based on Europe is a strength and works. We went under the development of our anchoring in the target European countries, we have strengthened specialty lines of business by similar growth and go on projecting our export -- our expertise in the rest of the world, in Africa and in Latin America. Concession side, we are a player, an actor of the whole of the value chain and the wish to strengthen and diversify our portfolio of concession to remain a recognized actor in this business. Our will is to maintain in time, this balanced works concession on the territories where we are sustainably rooted. From 2012 to 2016, the group focused on its organization and the improvement of its profitability. During those 5 years, the revenue stagnated around EUR 14 billion, 1-4. Since 2017, the group is in a growth traction with a revenue close to EUR 19 billion in 2021. 35% of growth in 4 years. If we neutralize 2020, are translating a good collective traction. This growth in volume did not impact the profitability of the group since the margins followed suit. I'll get back to that by -- and separating works and concession. Finally, the very strong increase of the net profit beyond the operational performance was borne by the strong decrease of financial expenses and the decrease of taxes on companies in France. In works, the dynamic of growth since 2017 didn't overshadow the continuous work since 2011 on the improvement of the profitability. Hence, the net profit increased twice faster than the activity with the works margin at 3.7% in 2021. We are convinced that we can go on progressing and overshoot 4% of margin works beyond France. The development of the group was done by prioritizing some European groups, as you can see on the slide, the growth in the key countries like Belgium, Netherlands, Luxembourg, Germany, was twice as strong as in France in the same period of time. Adding the activity in Switzerland and the very important dynamic in Spain, I remain convinced that in our businesses, performance will be reached by remaining local recognized players, Better be in few countries, but be stronger. This is the key to attract the best talents. Internationalization of the group progressed in the past years, but it focused on the European continent as we wished. As you can see on screen, the organic growth remains the main driver of development of the group. Program of Grand Paris Express was and remains a beautiful opportunity. But relays exists already when you see projects like the Euralpin Lyon Turin tunnel or Cegelog, just for an example. Outside of France it's also our capacity to deploy our global know-how that enables us in organic growth to catch nice opportunities like the lots of HS2 in the U.K., Motorway A3 in Germany or Motorway E18 in Norway. Organic growth, hence contributed to the internationalization of the group since it represents EUR 1.8 billion of growth, including EUR 1.45 billion in Europe. This development also enabled the sustainable strengthening of our goodwill in those countries. The other driver for growth is generated by the external growth with 2 additional approaches, external growth of proximity on the go, coming to strengthening our territorial meshing and the entrance in new countries or the acquisition of new lines of businesses. The external growth of proximity is present at Eiffage Energy System and to a lesser extent, in the other branches in Germany and in Belgium. The group developed in the Netherlands with the acquisition of Kropman and in Switzerland with Priora. Specialty side, the 2 major acquisitions are Meccoli in the rail and Sea Works in Saipem in civil engineering. And concessions, the growth is much more regular based on the growth of circulation and tariff revisions. Operational margin moves in line with the growth in a regular way noticeably, the EBITDA margin of the motorway concessions, and this until the COVID pandemic. End of 2021, concessions didn't have yet recovered the performance of 2019. This is the case since the first half year 2022. As you see on this slide, this period has also been accompanied by a decrease of 60% of the cost of debt. As you know, we are working to the strengthening and diversification of our concession portfolio. This represents EUR 2 billion investment since 2015. We are pulling 4 levers. 3 first levers are about organic growth. First lever, our successes for tenders of concessions, Airport of Lille 2019, Motorway A79 2020, Cegelog contract 2022. These concessions are won by mobilizing the whole of the know-how of the group and beyond a significant activity of works, enabling to secure additional assets. Second lever, plan contracts or recovery, enabling extension of duration and extent of investment the recovery plan of 2015 for APRR and AREA, the merger of the contract Tunnel Maurice-Lemaire with APRR in 2016, Prado Carénage Tunnel in 2019 and the Autoroute de l'Avenir, the motorway of the future in Senegal in 2021. Third lever, the buyback of minority stakeholders in our concessions, APRR in 2020, ADELAC 2016, 2020, A65 in 2021. Fourth, and ultimate lever, external growth, participation of 5% in Getlink in 2018, buyback of 49.9% of airport Toulouse-Blagnac in 2019, acquisition of hydroelectric power plants since 2019 and Sun'R the operation underway. And there's communicate being released this evening. I'll say a few words about that later. It's by moving all those levers that we wish to go on with our strengthening and diversify our concession portfolio, while remaining focused on the territories where we are sustainably located. Over the same period, our balance sheet strengthened. Following dividends, we generate between EUR 300 million and EUR 400 million of free cash flow per year available to the holding to develop the group. Performance of these past years and the outcomes make us confident to increase our development by external growth, especially in the new renewable energies and the businesses and energy generally speaking, but remaining focused on the European countries where we are well rooted. We wish in parallel maintain the traction that we always had in organic growth because it remains very creative of value. This year didn't lead us to miss the importance of the major challenges of digitization, but mainly environmental transition. Group worked on those challenges in the past years. Our compact organization and the proximity between the lines of businesses enable us to be reactive to deliver global solutions to our clients. The challenges Climate carbon have been restated through our annual climate reports as well as our action plans in favor of biodiversity. We decided in 2021 to set ambitious targets of reduction of the greenhouse gas releases to be compliant to the route of 1.5 degree Celsius and aim at carbon neutrality in 2050. Those elements enabled us to confirm our extra financial ratings, A- to CDP and AA at MSCI. What's also very interesting that with 95% of our activity in Europe, all of our entities in the various countries are facing the same challenges and are working in the same regulatory framework of the European Commission. It wishes to turn our continent a flagship for the world. The addition to this European road map is a very strong factor of synergy. As we have seen, the European anchoring of the group strengthens its consistency and puts it naturally have the core of the great current trends impacting our cities and our infrastructures. The crisis of COVID acted as a fantastic accelerator of digitization. And the war in the Ukraine is already a powerful accelerator of environmental transition and the research for industrial sovereignty and energy sovereignty. This will compulsorily go through efforts of sobriety and development of sustainable mobilities. The group has the capacity to meet efficiently to those major challenges. To illustrate the impact of those activities generated by those trends that will lead the development of the group and our sector for decades, I decided to put forward our highlights of the half year through those topics. Energy sovereignty. In the wind farms sector in full expansion where we're a major player with a recognized know-how, several lines of businesses of Eiffage are active, and you have seen that in the short movie at the opening of this meeting. We're also European leader of the installation of sun farms, while our French and Spanish teams are recognized for the building of wind farm/sun farms that we share the maintenance for durations of 5 to 20 years in France. We take part actively in the development of the offshore wind farms through several projects. On the wind farm off the shores of Saint-Brieuc, Smulders were responsible for the topside and the foundation of the substation. The manufacturing was performed in the Netherlands and in Belgium. The sea transport of the topside and of the foundation took place, as you have seen, end of June 2022. We implemented also the monopiles and transition pieces of the 80 windmills of the offshore park of Saint-Nazaire. The linking by cables to the delivery position and the delivery of the 80 modules of power installed within the masts. Active for the past 20 years in this sector, Smulders produced in 2021, its 2,000th piece of transition aimed -- or earmarked for the Saint-Nazaire wind farm. We built also the maintenance base of the wind farm of Fécamp, where stakeholders and the pilot of the wind farm -- floating offshore farm in the Gulf of Lion in the Mediterranean. The 3 jackets that will -- the future wind mills are being built in Fos-sur-Mer. In Germany, Smulders won, end of June, a joint venture, a contract for the manufacturing of 60 pieces of transition of the future wind farm EnBW He Dreiht. Each piece of transition will measure 30 meters high, diameter close to 8.5 meters, with a unit weight of 700 tonnes. The pieces will be manufactured in our English manufacturer in Newcastle. Sun farms. Over 70 sun farms have been built since 2007 by Eiffage in Europe, Africa, Latin America carry for over 3.5 gigawatts. For only 2021, we installed 1.4 gigawatts and end of July 2022, we already have in our orders more than 1.4 gigawatts. Some examples on screen, the solar farm of Boyer and Jugy, near the A6 motorway. The sun farm Illoulofin in Benin, that's the first major sun farm with 25 megawatts in this country and [ Ordange ] power plant in Arcachon, near Aquitaine. In our European countries, energy sovereignty will be a key to succeed in the environment transition while speeding up the research of energy sovereignty. Within the group, we have all the expertise necessary to the rehauling of the apartments and offices and the solution to industrialize the building. Beyond energy sovereignty, circular economy takes part to sovereignty, generally speaking, by reducing the pressure on the natural resources. The group is very active in the building of new apartments with refurbishment of the apartments. 135 apartments in Laval are being refurbished. Buildings dating back to 1956, that will be getting several changes in terms of energy conservation. Other operation, the eco-neighborhood lycée in Issy-les-Moulineaux, a refurbishment of former barracks according to the lines of the City Hall of Messe. In June, we won a joint venture contract for the second stage of the renovation of the National Theater for Dance Palais de Chaillot in Paris. Integrated on the recovery plan of the government, we are also committed to performance on energy as well as the environment. And in the framework of the contract, Cegelog for the Ministry of the Army -- Defense Ministry, which we'll refurbish over 8,000 departments with an aim of improving their energy performance. Tertiary on Paris, our teams renovated the former headquarters of Peugeot renamed l1ve project will enable the life of the building aimed at an energy sovereignty and the comfort of the users. Goyer signed a contract for the renovation of the Tour Ariane at La Défense 152 meters high this building. This was called the Tours Societe Generale. Our construction team started the modernization of the -- tour open at La Défense, with the restructuring of 3 levels. Last example in Brussels were 3 subsidiaries of the group, energy system are renovating the building -- office building the first to reposition it in top of the range building, innovating building. It will work with solar energy with a solar farm on the roof and on all the facade, delivery in December or January 2023. The group developed in specialty lines of business as the demolition reconstruction which is a perfect example of jobs and mutation because it is a key player of circular economy. We reached now over 90% of recycling in our demolition projects. On our projects of buildings, we favor the reemployment. The project of eco-neighborhood lycée, built on a former building was totally made with materials coming from the deconstruction of the barracks. The material not used are offered to individuals in a shop called [ Real Vie ], employing people being redeployed. The group also was a forerunner in the industrialization of production processes with integration of B3 eco design. On the left-hand side, the Novel Air program [ Foreign Language ], first operation in industrial line solution with containers -- sea containers recycled, 20 new buildings equipped with sun farms. At the center, the Grammer School of Clermont-Ferrand, wood, walls and straw. And bright, young active residents, Villaume Germon Salon Provence, delivered in March 2022, 2019 apartment units and wood associated with offsite logs HVA, reducing the consumption of energy. As I said previously, the war in Ukraine acts as a powerful accelerator for the industrial sovereignty. Our group contributes to meet this challenge, noticeably by the implementation of factories and data centers in Europe. We're building the most important manufacturer of fuel cells, hydrogen fuel cells in Europe in Lyon. This will have the headquarters of Symbio, its R&D development and the unit of manufacturing of hydrogen systems. We're also building the gigafactory ACC, regrouping Saft, it's total energy, Stellantis Opel and Mercedes devoted the production of battery modules and cells for cars in Douvrin, a building of 644 meters long, 20 side buildings, and the revamping of 17,000 square meters. First factory of this kind of France, it will have a capacity of production of 8 gigawatt hours, and we just won a new contract for the extension of a production site in Krol. All of the contract remains submitted to the execution of the final agreements and to various regulatory approvals. Finally, a new example in the Netherlands, the turnkey manufacturer of Kite Pharma for the innovative technology of cure against cancer. I was talking also about the data centers. There is an increasing demand, and we see the first project of hyperscale in Europe on which we are an active development. Movement infrastructure. Mobility contributes strongly to the consumption of energy and to the release of carbon. Eiffage committed itself through its various expertise to master the environmental impact of its activities and support its customers towards new mobilities. On the program, Grand Paris Express, the tunnel works are over on the lines 14, 15 and the Eole projects. Two tunnel bores are still in activity on the Line 16. The last bore should take place in the first half 2023, and the rails and [indiscernible] are going on. Works on the stations of La Courneuve Six-Routes and Le Blanc-Mesnil are underway. On the first half year, teams of Eiffage Energy System won several new contracts in joint venture. Two, for the refurbishing of system of ventilation and the compression of the part south of Line 15 and the extension south of Line 14, the multiservice network and system of monitoring of Line 18. And recently, the market of equipment and traction works of Line 18. Eiffage construction teams won the market structure of the stations of Aulnay, Sevran – Beaudottes -- Sevran - Livry as well as the servicing part. Eiffage Immobilier will implement an additional project in Aulnay-sous-Bois a mix program with 380 apartment units, public equipment, shops and a parking. We have currently 2,000 people working on various projects of the Grand Paris Express. Roadside, we focused our research on the emergence of a vegetal range, enabling to suggest de-carbon alternatives to the car. And answer to all the uses of cycling tracks to the motorways as bio fault as well as recycled arm and bio clear with its clear coating. We have highlighted also our advanced with 70% of the areas of the motorways APRR and AREA are now equipped with electrical charging stations, 56% of them in high power as foreseen, 100% of our rest areas will be equipped at the end of 2022. As a comparison and for your information as of July this year, the amount of recharges was 2.5x the ones of July 2021 to reach almost 50,000 recharges on our rest areas. So as to reduce the emissions of CO2, APRR generalizing the solutions to make the traffic of cars and of trucks. Lorries without tickets. So we have a first on Mantes Mureaux on the A79. Thanks to the identification of the vehicle by its subscriber batch of this license plate, the customer can go through the toll without having to stop to buy -- to take a ticket. This technology will be made available on the A41 since Chambéry to Annecy. And in 2022 will happen for the first time on the scale on the French territory, the implementation, open flow e-toll on A79. This will enable the customer to pay without having to stop. The customer with the dash will have a pass and the nonsubscriber will pay through a platform over the internet. This technology will enable the fluidity of the traffic. So a decrease of the release of CO2 especially for the heavyweight. As you see through those major trends that follow the crisis of the COVID and the war in the Ukraine are already very important sources of opportunity for the group. Recovery plans implemented produce effects and the demand remains very strong. Testimony of it, the robustness of our book of order. However, the major challenge is to attract and make loyal our talents and to remain very selective in our new businesses. As I showed at the beginning of my presentation, the organic growth represented 2/3 of our development since 2014. We will increase our development by external growth while continuing our organic growth which is creative of value and maintaining our geographic consistency. With the improvement of the performance of the works and energy system lines of business. we have much more capacity to perform external growth of proximity in all of our target countries. In Europe, on the first half year, we strengthened our presence in the Netherlands by increasing our share in Kropman and in acquiring a majority share in Harwig and last July in Eltra. Those acquisitions deliver additional business -- line of business and an intensification of the meshing of the territory for the energy system in the Netherlands. The acquisition of Ciel makes it a solid base for the development of the energy system, LOB in Switzerland. We remain attentive to the opportunity of external growth in Germany, in Belgium and in Spain. In France, always in the energy system, LOB, we acquired Hydrotec services in Haute-Loire, strengthening our capacity of maintenance exploitation of hydroelectric power in SITC in central Loire specializing in video protection and video monitoring and [indiscernible] contributing to the meshing of the territory. Beyond those external growth of proximity, we are in capacity to integrate more important companies. For instance, we signed an agreement so as to acquire 70% of Snef Telecom, national player of reference on the French market of telecommunication, mobile technology, 1,000 employees over the territory. Revenue of EUR 200 million in 2021. This acquisition enables Eiffage Énergie Systèmes to enter into the strong growth market of mobile telecommunication borne by the development of 5G technologies for the public at large, but also and mainly for our industrial clients. Implementation of this acquisition should take place at the second half of 2022 given the suspensive conditions and the usual regulation. As said previously, we just announced that we started exclusive negotiation to detain over 80%, 8-0, of the Sun'R Group, actor of the sun farm business in France. Developer and producer of renewable sun electricity since 2007, the group is also a pioneer of agrivoltaics, combining development of reculture and production of electricity sun farm electricity and offering a large list of service from storing electricity to optimization of the energy flows. You see what sun-agri can do. Sun'R develops 3 entities. Sun'R Power developer and producer of independent electricity with a portfolio of over 100 megawatts in exploitation and 300 megawatts in development. Sun Agri, leader of agrivoltaics, designing and implementation smart infrastructure for the agriculture with 310 actors that is 150 megawatts in development. Voltaia provider of electricity in short circuit transparent with 600 gigawatts delivered in 2022 on 10,000 sites and 40 powerhouses. This acquisition that should be finalized in the second half should enable us to speed up with those 120 employees our development in the renewable energies. Following this vision of what happened in the half of the year, let's get back to the major figures. Revenues, an increase of 8.6% compared to the first half of 2021. Now works and concessions are at a level of activity above the one before the crisis. Operational result and net result of over 36%, increasing over 36%. A variation of WCR contained, enabling us to have a neutral cash flow in spite of the seasonality of our businesses. And the book of order remains at a high level, thanks to the dynamic of our goodwills. This first half year confirms our perspectives for 2022 on the growth of activity in works, more sustained and concessions. We anticipate an increase of our results and works as well as in concessions. The results of works overshot those of 2019 since 2021. The outline concession are also expected above the results of 2019. Our financial means are significant. I remain confident in our capacity and our teams to carry on and speed up the development of the group in organic growth and in external growth. Thank you for your attention. And I invite Christian to give you a detailed explanation of our financial elements.

Hello, everyone. Good evening. Now we'll look back at some of the numbers mentioned by Benoit, and we'll look closely at 2022 Consolidated revenues is experiencing substantial growth at 8.6%, mainly organic to outstanding elements here as well the return of the concessions to a higher level than 2019 and quite substantial -- quite much higher than 2021 at plus 21.3% where the first half year was impacted by the shutting down of the ski resorts on our motorways. So works growth sustained and the extension of the momentum that we saw in 2021 regarding works. We'll see more detail of each trend in each brand -- the trends in each brand. But if you look at the geographic zone here on the right, you can see that the trend observed in 2021 of a strong momentum of our installations in Europe is continuing, plus 21.8% in Europe. This trend this year is also being supported by 2 operations in the export mode, HS2 in the U.K. under production -- full production and less so, but the starting up of the E18 motorway in Norway and France activity is impacted by the start of a lesser contribution of major projects. And this was anticipated though following the Grand Paris Express. And this will actually pick up its pace in the second half of the year. Operational results, recurring operating income is on an increase due to contribution of concessions in 2021. The contribution of works is more modest with a margin at 1.7%. It's not representative, though, as always at this stage of the year compared to a full year consolidated operating margin of 9.8% for -- compared to 7.8% in 2021, 9.8% was the same in 2019. So if we look at each branch, looking at construction, revenues are on the upswing. As you can see here, the figures are up here in France and Europe also outside of France. What you don't see there is real estate, and that's up by 7.5%. That's related to commercial activity and bookings of the first 2 to 3 years back, which means that the figure is off compared to the drop in reservation -- in bookings at the -- over the first half. So that's at 31%. The number seems a bit severe. When you compare the first half 2019, we had 500 lots in Poland, so the drop in France is 15%, and that's in line with the market trend. On the real estate contribution to the branch results is at EUR 33 million to the operating income. If we look at works, sorry, we're renewing our order book by compensating the drop in residents in -- by operational -- industrial operations, public works, hospital, train stations, Greater Paris Express and services areas by renovating or reconfiguring buildings. Our margins are maintained in France and Belgium, suffering more so, though in Switzerland and Poland due to inflation, which is much higher than here. Some illustrations here to show you that we won a contract to renovate 1,000 dojos . These are either by municipalities or social vendors. The French Judo Federation for 2024. There are some 300 projects that are being finalized, and they're in rural areas and also in low income neighborhoods. Looking at infrastructure, the drop in activity in France is due to the beginning of the end of the Grand Paris Express construction site so that generated some EUR 370 million -- EUR 306 million in the first half at EUR 376 million last year. And at the end of the wind park project that centers it's activity in Germany is still sustained, and that explains that the growth rate is exceptional abroad in Europe and outside of France. So it's both these 2 European construction sites that I mentioned earlier. So that's an export. So margins in the road and simple engineering have been impacted by the seasonality of these business lines as per usual, with some particularity this year that's related to inflation, a prudent approach at this stage in road in France as regards to revision indexes and amounts regarding private markets. In Germany, the public markets were flat rate based, and there was the government directive inviting customers to revise their prices. And that's not been applied unanimously, so there's some pressure on our margins. So we are confident, though, that we will get fair compensation for these despite inflation. So the projects -- big projects in France are moving forward compliant with our planning and compliant with our plan, our budget. So August 2022, this is the shifting of the footbridge over the A1 motorway connecting the Olympic water park and the Stade de France, the stadium. So it's 350 tonnes, 100 meters long and 20 meters wide. As regards to Energy Systems, this is where we're seeing the highest growth, thanks to the momentum of this market is over 6% -- nearly 6% of our growth. That's organic, reinforced by the external growth, 3.4%. And due to acquisitions here, multiple acquisitions, small size acquisitions. The most -- the highest unit contribution there is EUR 16 million in the half year in revenues. So integration of these companies is going well. So the acquisitions will continue. An increase in our activity in France is more limited than abroad with a few large projects in the design phase, mobilizing resources and generating limited revenues at this stage, but we're selective as regards to these operations. We're continuing our development in Europe outside of France with growth rates that are in double digits in Spain, Belgium, Netherlands and Germany. You can see that our margin is stable over 12 months. But following a substantial increase last year, so we're consolidating those margins this year. So the increase to -- the contribution to the results will increase in absolute value due to the volume of activity. An illustration here is a complex project here in Orléans there's a conference center with -- there's an exhibition center, an arena of 10,000 people, and now we have the energy -- the electric and CDC for the whole complex in expected concessions, APRR and traffic. We're all familiar with this. It's much higher than -- slightly higher than it's about 2019. Is much higher than 2021 where the first half was impacted by low traffic, which enables us to get back in terms to normal in terms of results higher than 2019. If you look at the margins, you have to keep in mind that consolidation in 2021. We had Eiffarie managing services for rest areas, and that's a -- they had an impact on our EBITDA, but still higher than the previous years. The outstanding point here is the acquisition of Aliae and the commissioning of partial service of the free the motorway, A79, APRR working with -- APRR has been with them from the beginning. So you're accelerating our investment in modernizing in the ecological environmental modernizing of our networks, as Benoit showed us on the screen. We talked about this in February, and it's to be validated by the Council of State for the investment plan. And here this is supportive -- in fact, these are not our -- also high power charging stations, right? But this is the type of events -- or activities that we have on our motorway rest areas. Please do think about stopping by and taking a break. Now as we look at our concessions assets, we can have a more detailed presentation here. All of the motorways are experiencing the same momentum. If you look at the airports, they're back up on par prior to the crisis, we saw a gradual recovery May, June, about 80% of traffic compared to 2019. For these other segments, the 2 outstanding facts are the reinforcing of renewables has been addressed and strong mobilization of our teams in the Cegelog project, working with Eiffage construction. A final illustration here is the most recent delivery, and this is on the screen a moment ago. This is a PPP's, and it's a water park, 5 pools in [indiscernible] with -- and this should be opening the 8 of September. So we've got concessions and long-term contracts, taking us all the way into 2044. Looking at the financial situation at the accounts, don't dwell on the first 2 lines, but if we look at the other products and operational expenditures, you have EUR 20 million. So we have an increase there because in this figure, we had 2021, we had the goodwill. We had the -- sorry, the capital gains of the divestiture of the services building in the Pierre Mauroy, so the cost of debt is increasing and moderately, you can see by EUR 6 million, which 9 in concession, mainly related to the cost of the debt for the Millau Viaduct, and that's indexed to inflation. So we have that in -- and that's on Page 52. And the effective tax rate is at 26.3%, close to corporate tax and compares to 25.8%, and we will likely have a bit higher level in the full year. So this gives us a net income -- operating income of EUR 354 million, 36% increase. You can see you have the debt and our table here with the financial flows, you're familiar with this. You can see at the bottom of 2021. The EBITDA is much higher than 2021 at plus EUR 223 million. That's quite substantial. And it's also much higher than 2019 by EUR 172 million. Seasonal variation in our working capital requirements has been mentioned already, but you see an increase over typical -- atypical, sorry, years, 2021 and 2020, but it's still lower than 2019. And if we look closely, it works, it's EUR 540 million, and that's consistent with the level of variation before the crisis, which was EUR 500 million in 2019 for less activity. So it's a good performance. when you remember that in full year 2020, 2021, our WCR had reduced in absolute values by EUR 500 million. So taxes paid is logically higher than at the previous year, which brings us to treasury flow operational EUR 600 million, equivalent to net investments, so free cash flow at 0, which means traditional -- which traditionally -- whereas traditionally, it was negative in the first half with the exception of 2021 with the variation of the WCR, which brought us close to 0. So our investment, you'll see there's consistency in works over the 2 years and concessions. And concessions, that includes EUR 171 million on A79 compared to EUR 128 million last year. So that's a growth investment and not renewal, even though it's positioned here as renewal and then external growth and energy. Benoit mentioned that in France and the Netherlands and Energy Systems. And then finally, capital operations. There are 4 components here in this last figure, dividends paid out by APRR to their minority shareholder. The dividend paid by IFRS to the shareholders, the increase in capital reserve for salaries and then the buyback of those shares to cancel -- to offset the equivalent of the shares created for that capital increase. One detail here when you compare to 2021, these titles -- these shares last year were bought in July and August mainly. So that's important to keep that in mind when you compare the group's debt between June 2021 and 2022. So all of this then to look at consolidated debt, which is a bit under EUR 10 billion in full period. So if we come back to the comparison of debt. On the increase over 6 months, of course, but then on the downturn of the 12 year -- 12 months, sorry, the EUR 245 million with net treasury available to the holding in the works branch of EUR 775 million in non-increased of -- by 2020, by EUR 220 million over the 12 months. But if you look at the divestiture by APRR of the A79 operations of external roads that we carried out, bring in EUR 250 million if you go June to June, and that's the acquisition of the minority shareholders of 65 and then the buyback of the purchase -- the shares that I just mentioned, the common shares. So beyond the figures of increase of treasury here, you can see the figures such as I say you have those on Page 47, so EUR 4.8 billion. And what's important -- that's important to kick off a period that could be unstable. Another essential consideration for the current situation is our order book. Our order books, the level and the quality of our order books is very high, EUR 18 billion. So on the upswing, as you can see on the right, you can see in each brand, including infrastructures, which consumed a lot of the order book in big projects in the Grand Paris Express, A79 and HS2, which will likely be on the downturn for the full year before and ultimately, going back up when we have the additional GPE, Grand Paris Express, that will be coming in, and those are currently under bid. So the order book is increasing in Energy Systems is quite spectacularly. So sustained growth for the semester -- the half years to come up. And so the order book has been addressed in the same conditions and using the same selective nature we have in the past. But this year, looking very specifically at contractual clauses regarding inflation. So that's it for the overview of the figures, and I'm sure we'll come back on some of those when we take your questions, first of all, in the room, and then we'll take online questions. We'll have a seat. We'll take online questions, hopefully for the last time because we'll be all meeting face to face next time. And hopefully, health conditions will allow that. Thank you for your attention.

I have 2 questions, mostly on A79 and the margins in works for Eiffage Construction and Eiffage Infrastructure of A79, do you confirm that it is consolidated in overall integration. Could we have some opening on maybe some prediction of the traffic on the medium term on the road, maybe some revenues there? And also then the travel -- sorry, the works margins, what percentage of the F&R contracts -- and what enables you to maintain your margins intact there in the first half despite a likely drop in the margins on the road in general.

Yes, A79 will be an integrated construction, there are no issues there. They can -- the works that we carried out, we did this alone, 100%, of course, using local -- other businesses, but we manage all this. We don't communicate our margins per operation, but we can say there were no -- we weren't off plan. The construction was carried out in synergy with the group's businesses compliant with what we had planned for in the study phase, so no worries, no particular worries. There are no problems. They're at the end of the construction or the commissioning, and now we are on track and then we -- they should be put into service as planned. Presently, the construction of A79 has been carried out under traffic with lots of detours to maintain the traffic. Of course, we're at the end of that phase right now. So we haven't -- we don't yet have that information. But overall, we are expecting the traffic that we had initially. There are no difficulties anticipated. As I said, A79 is essentially carried out by -- is used by tractor trailers and heavyweight trucks, yes, there were some detours of course, because there was a lot of construction, a lot of road works going on there, but we knew what the traffic was at the time when we started our work. So there's really no reason there have been no particular changes in the landscape that would justify -- or give us any reason to not recover that same traffic we had historically. So I think we'll know more though as soon as we get the annual results in a few months because it will be opening up in the second half. We've already got substantial traffic there. Right now, it's just a partial opening though. I'm sorry, can you hear that question?

Can we hope for improvement in 2022 over 2021?

Sorry, I can't hear the question.

Looking at current conditions, supplies which are more difficult, say, than last year. But the contracts that are renewable or not renewable.

Well, there's no real fundamental change, if I speak generically and then we could look at each of the branches, but my people here in the front row would be happy to answer your question there. But I think overall, the environment is extremely unstable. We can -- we're going through this with very little difficulty. You can see the results, I think, demonstrate that. If you remember what we said before, I think COVID helped us to -- or get better, to prepare better with inflation. There are a lot of difficulties to make sure that materials would arrive at the right time at the right place, a lot of logistics issues. And I think that most of the teams went back to their fundamentals. And you know in our business line, fundamentals are preparing, anticipating. You buy things earlier, you store more because that's the best way to make sure that you don't have any impact by the instability. And we have to admit that the works are continuing. We managed to maintain -- some of the mechanics are the same. If you look at France, the public side of things, we've got indices that show what our resilience has been over a really long time. If we look at energy systems, we've got contract durations that are short. So there's momentum there that with all of the framework agreements that are set up with our procurement divisions have the ability to keep our prices up to date as immediate -- immediately as possible. So we have -- we have new bids. We submit new bids, and we've adjusted the prices in real time, as they should be. If you look at construction, the private customers, private clients, sometimes flat rates, fixed rates over longer terms. But remember, these issues, the issue of inflation and the risks related to inflation before they actually materialize, we were talking about them. So I think that even in a quarterly memo, we clearly explained things. So this phase means that we are wary of them, we're ready, but we take it into account in our price studies and take it into account. So the current environment means that we're already in discussions with the private customers. There are some things we've had to redefine. It happens on an individual basis and things are going okay. In the short term, the real issue is maintaining our margins before thinking about they could naturally grow. It's the environment is such that we there is risk that's quite substantial. And so it's more about maintaining the margin. Now in other countries. We talked about it and Christian mentioned Germany, so we're hoping we have a lot riding on the government's directors coming out. So -- but that's not the case for new contracts because the decision was taken in any public German contracts are defined like the Spanish contracts as well. So the Spanish directive for -- could also maybe revamp or overhaul, even older contracts where we had -- where we had the -- felt the effects of inflation. So these are the discussions are what's taking place right now. So -- but the Germany is a bit more un-uniform and but we're hoping to get proper compensation for that. So over the half year, you're wondering why the margins are stable as the road is deteriorating. But I think it's the deterioration in road is marginal compared to 2021. We would like it to be more like 2029, which is better than '21. But in '21, it slightly deteriorated, but not that much. So there's nothing really that will significantly impact the profitability of the branch compared to what it was in 2021. One of the more complicated topics is constant revenues, we have lesser industrial volumes because in public clients, they are -- they have a watchful eye on their budget. So that's what has the intrinsic impact, meaning for the same revenues, there are fewer tonnes. So -- and because these businesses -- the business lines grow, there's a profitability, which comes from our industries where we have industry volume that's lower now, even though we have a constant revenue. So -- but we're hopeful that the public clients have needs and the volume will make its way into our order books. But okay, budgets are being reviewed and revised, but right now, we are benefiting from the indices, but we are losing volumes in terms of material and actual activities at constant revenues. I think that's the most impactful element and the short term regarding road.

I think you are crystal clear on the issue. On the markets, firm markets were fighting for past quarter with the customers to stop this non-revision clauses, a cautious appreciation of the income. We're in discussion with many private markets where we successfully overcame this clause. Public markets that were not revised, which we discussed with the customers, that are important discussions. And then on the part revenues, what Benoit says, currently, we look at the revenues were up plus 4.9%. Let's also remember that there's an inflation effect. And beneath there is a volume effect and our industries today as of end of June are decreasing, not in a disastrous way, but they're dimension compared to last year. And on the queries and on the -- on the coating and this impacts the results of the half year.

Elodie Rall from JP Morgan. Since we were about the margins. We talked about the works. Can we say a few words to start with about the margins on energy that remains stable, 4% the book of order is an increase, good, oriented activity. We have seen that some of your peers successfully increased the margins in the first half. So how will you be able to increase the margins and reach the 5% mark or beyond on energy? That's my first question. Second question about the works that you alluded to, the property. For the time being, you were not impacted at the half year, #1, but what can we expect at the second half and in 2023. Can you remind us the contribution of property and works? And on concessions, can you give us the traffic trends of this summer, and we all have in mind that there is a strong increase of the tariffs to come in 2023. What is your position on that? Do you discuss a ex cap plan with the government? What is your vision about that? Is there a possible extension of the concessions. We heard about the plan you suggested, can you say a few words or elaborate on that?

More on the first part about the energy system, 4% is compared to the same level of margin as last year. Our basic interest remains not to be impacted by the inflation, and we do not intend to be at 4% on the full year, if it's your question. Your neighbor here seated here, didn't say that. I think that it's a work that took a certain amount of years, yes, we're on the consolidation about the margins. We're aware of the fact that we'll be able to consolidate them then by external growth will increase the volumes. I always explain to you that in order to have the coverage of the territory, you have a lot of expenses, which are certain element. And when you are larger, it helps you on a better coverage of the general expenses. 5%, it's not a magic wand. It's the inflation that we endure. If we maintain this level of margin, it will prove that we have progressed because the environment is totally different compared to last year. And now are totally confident in Ludovic and his teams to progress beyond 5%. I mean above 5%, above 5%, obviously, correction.

Benoit said it all. We remain confident about the lending at the end of the year. We're at an intermediary level, for the time being, we have a level of margin which is comparable to the rest of the sector. We have structures that are above those margins, some beyond. We're working on that to reduce the gap between the better in class and the not so good in class. This is on what we try to act to comfort our margins, but the environment is as it is today, and we have to work to reach the 5%, which is the target set a few years ago already on the property market. Yes. Olivier, the works, property, 15% of our revenues it is unavoidable that the share of the property in France will decrease, decrease because when you do minus 15%, minus 20%, but that's the market. Well, in the future, it's our revenue that will decrease 15%, 20%. It's going to be 2024, 2025, not earlier. No impact on 2022 nor on 2023. And to offset that, we have nice tertiary operations underway in the pipes and nice operations of housing in the Benelux and in Poland, which we didn't have in the previous year. So globally speaking, I think our property activities should not decrease. And if it would, our model, we have very light structures, it will not impact the profitability.

Philippe, some information about traffic.

Hello. I noticed your 3 questions. First, about the traffic of the summer. Following a first summer of growth of 3% compared to 2019, which remains our reference year before the crisis. We enjoyed a nice summer with a July and August that should conclude by plus 4% above those of the first semester, August slightly less so far for the traffic. Second question about the tariffs. Indeed, the increases in contracts for 2023 are linked to the inflation. Inflation is at risk of being very high at the end of October. It's our reference index, We're at 6.2% end of July, 5.8% in August. It will be very high at the end of October. Our Transport Minister, Clément Beaune, expressed himself several times about that, hoping for a moderation of the tariffs in 2023. We started negotiation that will go on in the coming days and weeks to see how this moderation will be operated in respect of the balance of the contract -- economic balance of the contract. Regarding the investment plans, we have to start from the investment plan that Christian mentioned earlier. Investment plan of EUR 410 million on which we have been working for almost 2 years. This plan is almost finalized on the way of analyzation. It has to be validated by the Council of State, Conseil d'État, meaning a signature of the rider in October. The important point is that this plan of investment represents a show window of what could be deployed at a larger extent within a large plan of investment of ecological -- environmental transition with 3 components of this planned EUR 400 million investment for the new mobilities, carpooling, multimodal transfers, implementation of the free flow at the entrance of large a portion of the area concession, the legacy concession, suppression of the tolls and full road, we can extend this model, or this process on the whole of our motorway network with APRR and all through the territory and third part, a backing integration of concession of the A6 between Saint-Germain circle and Évry, a section of the motorway where we will refurbish the equipment. An example of what could be practiced at a larger scale within the framework of the law of decentralization of the National roadwork. We could integrate urban sections and extension of our networks with additional investments for the environmental transition. On those issues about large investment plan, we are on an extended time frame. Negotiation is very long, then the validation process, which is taking time, With the extension of the concession, you have to have the say of the government, the European Commission, ART and the Council of State. So it's very long processes. One could think that the negotiation will start next year, not before February 2033 in any case. Thank you, Philippe.

Hello, Virginie Rousseau. ABHF. I'd like to get back to the acquisition of Sun'R. Can you say a bit more, give some figures and talk about the strategy? Is it the beginning of a new line of business. I had a question also about the impact of inflation. You mentioned the impact on the volumes on the road. What about the major project of infrastructure? Will inflation have an impact on the demand. We haven't seen it. The book of order has increased for the time being. But do you anticipate that this inflation could have an impact on the demand in the coming months?

I'll leave the floor to Cecile.

Regarding our strategy in the concession E&R, we focused on 2 areas of activity, Sun farm mainly and set targets on the renewables. We have the opportunity to meet the Sun'R company, and it was an opportunity of a meeting between 2 industrialists with a lot of synergies, and we will not give figures yet because discussions are in the pipes and not finalized. We'll say more in February, but we wish to become a European player of the sun farms.

What I could add, as an addition is that we took part in 2 or 3 auctions on French and Spanish actors, players. We had the occasion wants to align ourselves because we were well considered, and we didn't think the price was worth it and the company was acquired by an oil producers. And we lost also the second bid with an oil company. But it taught us a lot about the upstream business of energy, the maturity of development, the way of developing those things. And Cecile and her teams, they did a global search of all the players in the market and Sun'R, with it's very innovative capacities with Agri sun production. There is a conflict of use between agriculture and the sun farm, it was very interesting. Cecile summarized it well. This was the history of a meeting, it all when smooth until the signing today, we have a certain amount of previous conditions. But it's very well. We had a dozen people working on this topic with our motorways, our processes and works, numerous ones all the requests of a certain amount of players who wanted to get to our property. We have people who are quite innovative and from 10, we move to 130. It's not the same scale. We are very, very happy about this meeting since as Cecile said, it's going to become the development platform for the group and the founder remains with us as a minority shareholder. We have all the elements to speed up. The second more general question is about the impact about -- of the inflation on demand if I should summarize, we don't see it. If we take the industrial clients, they are refocusing on their investments, and in fact, they are selecting them, sorting them and when they have the need, I could work it down the other way around. The legacy budget is not the border anymore since with the inflation everything has to be revised. Sometimes we fight against budgets in more classical environments. I think it's rather I revisit the needs, the investments, though some which are critical, I will do, but I'm not sure tomorrow, they're going to be cheaper. And conversely, it liberates and there was very strong activity and the willingness is to go faster. This is on the private clients. Then once they have done what is critical, it will peter out. About the public customer, there's a real will of recovery. It takes some time, of course, the French Government was one of the most active on the capacity to grab the recovery European plan. We see that in Germany, Spain, Belgium, the public side for the infrastructure -- for the critical infrastructure, we don't see a decrease of the demand today. The work which is the most impacted is the road. We talked about it because eventually, it's easy to postpone the road maintenance. It has an impact on the volumes, but no significant decrease that the job suffering the most is -- this inflation, it's the building, of course, all the effect, no strong evolution of the outgoing prices. And as a promoter, you're impacted by the inflation uncertainty of the duration of the inflation. Our integrated model of promoter builder is resilient because the teams know that the project will not start as long as we didn't find the right balance in all the lines of businesses composing it. And this is a very resilient way to protect our margins, and we will not have the same volumes, obviously. Do you wish to say something different, Guillaume?

Yes, one additional word. I think the -- we discussed with the builders. It's driven by political demands and choices. We can discuss inflation with the -- for the people. Is this consistent with the inflation indexes? Those are the questions which are asked.

That's what the contractors tell us. We'll discuss an annual budgets, but this is also the case with the roads and the civil engineering. Those are the elements of answer regarding your question. In terms of major infrastructure projects, there's no questioning of the program of the Grand Paris Express. A major allocation, we always -- we eventually delivered as part of them, but as we're going in the 1.5 years to come, but there's no will to alter the project. The Toulouse underground all the tenders were disclosed. You have a certain amount of relays of massive infrastructures if I'm talking about property, the segue of health. I can tell you that those investments are massive, which is already a problem in the capacity of answering to the demand since the amount of teams able to do, it's not Eiffage, it's the market able to come up with a EUR 20 million, EUR 40 million, EUR 60 million of technical works. I mean, there's not that many people able to do so. Those are things that were launched by the recovery plans, we don't have the feeling that the inflation is hampering this demand. Europe, which is our ground, we see those dynamics everywhere. The most important worry is mainly in Germany today. Beyond that, it's one of the countries that has most of the means to carry on.

Nabil Ahmed, Barclays. I have 3 questions, please. First, can you get back to the book of orders I haven't seen major projects on the third quarter. So it means there's a tremendous amount on the second quarter. So what is happening in the energy system LOB. Second question about the employee inflation. Can you see it now? How do you manage it in the long run on several years projects index price or index regulations are mostly on materials. And what about the subcontractors? Can you have indexation clause, taking into account this inflation into your contracts? How were you able to manage the existing contracts signed 2 or 3 years ago without those mechanisms. I'll ask question more anecdotical about the A79. Can you remind us the rationale for Eiffage to make the building and then selling it to APRR as a specific to this project, given the job, given the region. How much longer can we look into this system so as to consider the capacity of gearing of APRR.

The answer is in your question, Nabil. A79 is an extension of the network with APRR, facing the tender, the bid, we like at Eiffage and all of the LOBs use all the levers and full capacity of decision and a functioning. But besides, we wish to enjoy the capacity of operator of APRR -- so the mechanism enabling, if we win, we resell to APRR was discussed with our co-shareholders from the onset. And we remain very flexible for the bid. And in operation, we could put it up again. We have synergies of operation. We enjoyed the knowledge of the ground of the traffic and all orders around including what our ally knows. Obviously, the resell to APRR is a way to use the capacities of APRR today. If we are in the continuity of the network, we have the same mechanism to date on A412. It's not APRR, but it's AREA. We take the same and we redo when we're very far from the assets of APRR and AREA we're concessionaire, we can do it on our own. It's linked to this proximity. And there was a true synergy that we used in terms of operation and interaction between the teams, which were present locally and the contractor that worked there.