Eiffage SA (FGR) Earnings Call Transcript & Summary

[Interpreted] Thank you for being present for this presentation of the half year presentation of the outcome of the Group's 2023. I commend all the members of the management and the directors who are with us tonight. First half year 2023 is the continuity of the trends, notice of the first half of 2022 that we discussed previously. The commercial activity remains very dense in our LOBs with the exception of property as testified by the book of orders strongly on the rise. The construction is rising in all the LOBs, especially Energy Systems and Eiffage Metal. Activity in Europe outside of France is on a high growth over 20%. Concessions, we enjoy the growth of the motorway traffic and port traffics as well as the ramping up of our new assets. In Construction, activity remains resilient despite of the decrease of property. Decrease offset by strong activity in refurbishing of the buildings and new buildings of public buildings and industrial buildings. The fall of property is sustainable as testified by the marketing of housing units that slowed down 710 units compared to 1,500 as compared to the first half 2022. Refurbishing of building was always the core of our activities, but it's interesting to highlight that after several years of growth, the relative part of the renovation of the new and the housing units and offices are now more balanced. Two illustrations very different on screen. The 5-star hotel Regina, in Biarritz, a masterpiece of Belle Epoque, with the refurbishing of 72 rooms in art deco style, and the heavy restructuring of an office building occupied by the weekly [ lops ], plus the Laborde in Paris, mixing conservation of the architectural heritage and energy performance. We also closed the deal for the refurbishing on occupied site of the residence, The Lac, in Bordeaux, very complex works, renovation of a park of 8 housing units, 330 apartments. Property, some nice operations like those 98 housing units split over 5 buildings in Suresnes. We started the work during the summer for a delivery on the third quarter 2025. Another example on the right of the screen, with the [indiscernible] Lyon, 9 buildings of 357 units with a strong environmental ambition around a garden of 40,000 square feet with terrace roofs shared with a lot of vegetation. In collaboration with Crepy, 30,000 hours of professional indenting on the project to support people looking for work. Development remains a good way to secure a property on the long run. The neighborhood remains very important to put -- to implement low-carbon strategies, circular economy, mutualization of the usage and social inclusion. And the extension of the demonstrating place of Allier and Marseille, completed in March 2023, we launched the marketing of Smartseille 2, a mixed operation that will welcome 45,000 square meters of housing units, offices, shops and equipments. Goyer, our leader facade builder in France, aluminum and glass, is also developing in renovation. On screen, the deconstruction and new facades of the Ariane tower at La Defense. These works are performed on an occupied site. Roads also had a better resistance as expected with the growth of its activity to the tune of 7.2% in France. The city of [ Azay ] Eiffage Route implemented the new works of the new line of street car, 10 kilometers inaugurated this summer. Once again, Eiffage Route was awarded for one of its innovative solutions, Dromotherm, developed with Cerema and Universite Savoie Mont Blanc. Solution enabling to capture solar energy of a roadway to store it before redistributing it in a nearby building as heating or domestic hot water. You see the demonstration project that we made in Chambéry. In spite of the conclusion of the first stage of the Grand Paris Express projects, Eiffage Génie Civil has a very good visibility with the Norway -- E18 in Norway and the high-speed train HS2 in the U.K., going full speed. Germany, with this traction, contracts of the underground to lose and the Lyon -- Turin-Lyon without leaving aside the bids underway for the lots of the new stage of the Grand Paris Express and the confirmation of the restart of the nuclear French program. After 4 years, our teams completed the [ EOL ] train, enabling to power up the category of the Forézienne. This works participate in the extension of the underground and train RER to the west of Paris, a sustainable mobility solution for over 650,000 passengers daily. And on the line of the future underground of Metro Toulouse that we close in 2023, the preparatory works are finished. 1,400 people will work on this project to implement the 12.7 kilometers of tunnel, 9 station and 10 servicing facilities. And we concluded last May, the global market performance for the technical center of maintenance of Villeneuve Demain to the tune of EUR 450 million, 35,000 square meters of flooring to build without any interruption of operation. It's the implementation for 6 years of the buildings and the rail. It proves the relevance of our model of integrated offer and our capacity to offer turnkey solutions in the management of rail infrastructures. Eiffage Metal shows a very good traction with over 50% of growth in the half year. Growth always bore by the offshore wind farms and beautiful projects of infrastructure like the bridge of Leverkusen in Germany, we just closed a contract for the implementation of a second bridge on the Rhine river. Eiffage Metal has industrial capacity unparalleled in Europe. The Lauterbourg factories in France and Hanover in Germany are specialized in those buildings. Albacete in Spain is focusing on the mass for wind farms offshore. Our branches in Portugal is specialized in structures and buildings for sun farms and Newcastle in the U.K.; Balen, Arendonk and Huldenberg in Belgium; Zary, Niemodlin and Liegnitz in Poland; and Fresnes in France are focusing on the offshore wind farms. To face the evolution of the size of the wind mills, the development of the floating and the new substations in D.C., we invested in those factories so as to adapt our capacities of production, and we recently acquired a new production site in Vlissingen, in The Netherlands. As you have seen on the opening video, we have launched the first pontoon of the Provence Grand Large assembled in our factory, 1st of May. Those constructions as tripods, 45 meters high will support farms, wind farms producing 8.4 megawatts. Provence Grand Large will be the first wind farm park, floating wind farms of the new generation. In Germany, on the call for tender, we have been awarded as a JV to secure and then to conclude the building of a bridge over the Rhine in [ Hohenzollern ]. Contract was terminated -- anticipated termination by its public client. This touchy operation was perfectly mastered and is finished without any problem, as you can see on screen. Moreover, the client just trusted us again by allocating the implementation of a second bridge [indiscernible] in parallel to the first. The 2 bridges once implemented will replace the existing one, which is under dimensioned, totally in the dimension. Supported by the ecological transition, Eiffage Energy Systems enjoys a good traction on all its markets in France, the rest of Europe and internationally, and remains very active on external growth. After a year of meticulous work, our teams delivered this year, the new inside lighting of the Abbaye du Mont-Saint-Michel, and the bringing up to standards of the fire protection. A very complex project due to the excess 300 steps, helli-hoisting for equipment of over 150 kilograms, being in the heritage of the UNESCO, meant to have no visible electric wire. Recently, as a JV, we won a fire maintenance of the site of La Hague for Orano for 7 years, a contract including predictive maintenance, thanks to a 4.0 digitalization solution of intervention and data mining. Eiffage Energy Systems is proud to contribute to the restoration of the Cathédrale Notre-Dame de Paris with the contract that we won with the JV for low- and high-voltage heating, ventilation, plumbing, power generator and fire and safety, no visible cable and make no holes in any stone. Our teams, French and Spanish, remain very active on the development of sun farms in Europe, Africa and Latin America. The market is dynamic as testified by the 500 megawatts that we delivered and powered up first half year. The dynamic of external growth started by Eiffage Energy Systems for the past 5 years remains one of the growing level of the line business. On the first half year, it acquired 4 companies, small-sized entities, enabling to increase its territory coverage and strengthening its expertise over Europe, VSK, Netherlands company design construction maintenance of electric panels, safety service on the promising market of fire safety in the Netherlands. Pelzer Consulting, Belgian company specialized in the bespoke application for industrialists, and the [ La Fosse Group ] based in the [ Marsh ] region, completing our know-how in our traditional lines of business and improving, especially our territory coverage in the [ Châteauroux ] area. Before moving to the concession, I wish to put forward some iconic projects. As you know, we really like our compact organization, giving us a lot of efficiency, what it's about to succeed in very significant size projects, needing the mobilization of several of our lines of businesses. Larger, more powerful, the data centers are being developed in Europe to face the growing needs of data hosting. This market really ramping up as a source of opportunities for the group. Until 2024, the 400 employees of Eiffage Energy Systems will ensure the implementation of the largest data center in France for Cloud HQ. The implementation of the new panelist of Justice of Lille, for the Ministry of Justice for an amount of over EUR 85 million needs the mobilization of Eiffage Construction, Goyer, Eiffage Energy Systems. Last example, the Gigafactory of electric batteries built for ACC and Billy-Berclau Douvrin inaugurated end of May 2023 after a year of work. This project, which is a turning part in the reindustrialization of France, and as part and parcel of the ecological transition was implemented by Eiffage Génie Civil, Eiffage Energy Systems, Eiffage Route and Eiffage Metal. We cannot talk about the dimension of this building. 61,000 square meter, 644-meter long, 100-meter large, 20 buildings and other annex buildings. Visibility in the works is very good to the tune of our book of order and strong increase. Notwithstanding that this book doesn't include, for standard reasons, several contracts on several years signed like Nové, I'll get back to that. Lyon-Turin lines and [ CED ] is the market for public lighting and signals in the city of Paris. All of those contracts represent over EUR 2 billion of works to be made until 2032. We are very involved in studies and other contracts, very significant ones, on long-term contracts involving all of our lines of business for works. In the Concessions, first half year remained dynamic with the augmentation increase of the airport traffic and contribution of new activities to the sales. In order to maintain our balance works concession, it is absolutely paramount to create new concessions to succeed to APRR, an area who will be terminated by 2035 and 2036. I added to the global scheme I presented a year ago. You have it here on screen. It integrates now the extension of 3 years of the airport of Lille, and the EUR 1.5 billion investment made over 12 months with a strengthening to the capital of Gatling and the [indiscernible] and the acquisition of Sun'R. Marking highlights of the half year, the starting of the contractor concession of housing units for the Ministry of the Army's Defense Ministry of France, Nové, contributing to the tune of EUR 22 million. The management of the park by the teams of Nové, we have launched 6 projects of building new buildings and 4 operations of refurbishing. We'll have launched 30 projects by the end of the year over the 730 to made some total, over 200 projects simultaneously. The project, I remind you, will generate, until 2030, close to 1.5 billion works for Eiffage Construction will ramp up with about EUR 200 million expected for 2024. This contract over 35 years, 3-5, is within the program of [indiscernible] of the family plan of the Ministry of Defense for the deployment of offer of housing for the members of the ministry in a very ambitious environmental process. Air traffic shows signs of uptake. After the pandemic, the uses of travel have changed with a very important decrease of the business travels. But travels are back, especially on the international segment. Airport Toulouse-Blagnac offers, since this year, new destinations with Air Canada and Qatar Airways. Traffic of the Lille Airport is focusing on the Mediterranean area: Spain, Portugal, Greece, Morocco, Algeria, with a very strong offer with no less than 7 destinations. We proceed to the integration of Sun'R first half year, which is now the platform of development of concessions in renewable energies of the group. The half year has also experienced the participation of Eiffage to 18.8% of the capital of Getlink. In the motorway concession, as we have said a few years ago that we were ready to strengthen ourselves in the existing concession -- what we've done with the A41 and APRR in 2021. A65 in '21 and the Viaduct of Millau this year, in June, we became single shareholder of the Viaduct of Millau, with the buyback of 49% of the society of the Viaduct that were held by the bank of territories. And the motorway concession, the traffic is rising as compared to the first half year 2022, and we go on with our investment projects. Those past years were intensified installations of charging stations, electric charging stations, high power on our networks. With 100% of our rest areas that are equipped, we could answer the requests of our summer. Now with the application fully that enables to localize the charging stations in real time, their availability, we contribute to reduce the carbon footprint of our motorways and favoring development of new mobilities. We support also the development of car pooling in France, offering always more dedicated parking lots close to the cloverleaves. To welcome drivers and passengers, some like on the A43 on [indiscernible], a system of station parking -- connected parking to be informed in real time of their label parking lots. We have 5,000 parking lots for car sharing with 7,000 previewed for 2025. With the installation of sun farms on our brown motorways, we participate to the energy transition of our motorways. We have 6 solar farms, 2 will be inaugurated in a few days. 11 other solar farms are in project. One of our major challenges remains the hiring integration and the loyalty of our employees. We have to be attractive to be supporting our development in France and Europe. Our growth is depending on it. We must have a human resources policy, which would be very clear and carbon climate engagements that are really confirmed. Recently we published our second plan for biodiversity. It presents action plans for all the lines of business and identifies the sources and the level of impact on the factor of pressure on biodiversity. We published, in April, our fourth climate report. It deals with our climate strategy and publishes the figure targets of the reduction of the greenhouse gas effects of the group. We must remain innovative. As you know, we implemented, for a certain amount of years, an internal fund supporting the research and the fine-tuning of solutions for alternate, enabling us to make a difference on some projects. The high school [ Jean-Zay Lorraine ] a nice example. It was awarded the most ambitious labels, thanks to the bio-sourced elements favoring the local economy, woods for the frames and straw for isolation. This high school was awarded the golden trophy, the highest distinction of the competition Innovate for a Sustainable world of the Enterprises Generales De France. Other example [ Flare Facade ], enabling reductions of the carbon footprint of the Facade. The mixed concept line wood and aluminum shows its capacity of the construction that will enable to reach a level of 94% of recyclability. Going beyond the regulation, Goyer was selected among 2,500 files for this new concept of eco-innovating facades. The third addition of the great exhibition of Made in France, organized at the Élysée Palace to put forward the French know-how. We have to be also a driver with all the partners of the ecosystem of building, so have to have low carbon solutions. Sekoya that we have created in 2019 with Impulse Partners, contributes to that. It has been widened to an industrial club with other partners. Last July, we announced the laureates of the fifth call to solutions on the topics of the construction and the responsible use of water, you see the laureates on screen. During the fall last addition, over 250 innovative solutions were made on Sekoya by start-ups, SMEs and SMIs. Some over 20 experiments were made with the partners of the club. We also organized the second edition of the competition for students, eco skill challenge, and leading them to contribute to a more respectful construction for the environment, offering, developing 4 topics: biodiversity, low carbon, water, wet millers and circular economy. We don't like ideas to mobilize collective intelligence, participating and promoting our hallmark business mark, which is brand, which is a key for the success of our development. Well, following this 360 degrees of highlights, let's get back to the major figures of the half year. Sales increasing to the tune of 10.4% compared to the first half year 2022, testifying of the good traction of most of our lines of business. Operational result rising by 9.1% and a net result increased by 10.7%. This operational performance combined with a good mastering of our need in WCR enables to have a free cash flow, significant in spite of the strong cyclicity of our works businesses. Net gearing progressed to the tune of EUR 660 million, but it's to be put facing external growth for over EUR 1.7 billion over the same period. And the book of order is a significant increase by 10%, thanks to the traction of our goodwill. All this leads us to confirm our perspectives 2023, namely the growth of the activity in building and concession and the growth of the results. Thank you for your attention. I leave the floor to Christian Cassayre for the financial elements. Thank you for your attention.

[Interpreted] Good evening, everyone. So let's take a closer look at the figures mentioned by Benoit. Consolidated revenue is up, up 10.4%, and this is mostly organic growth, and this is a consistent homogeneous between concession and contracting. Concession, there's a change in scope. That's a Sun'R that was -- we just told you, and we started 2 operations, Nové in the A79 motorway that contract was won through a call for bids, and so this is organic growth. But all in all, with these 3 assets, we have 3-point -- that accounts with 3 points -- out of 10.4% in growth. Looking at contracting. On the left-hand side, you see differentiated growth for each business line. I'll go into the detail of that. And on the right-hand side, you can see that the trend that was found already in '21, '22, strong growth in Europe, up 22.4%. There were 23% in 2022, plus 21% in 2021. And so now we're looking at 35% of our contracting business is conducted outside France. In the annexes, you'll find the details on a country-by-country basis, and you have significant growth in Germany and Spain. Now in line with this growth momentum and, therefore, volume, profit margins are up to 2.1%. All in all, contracting contributes EUR 178 million to profit from ordinary operations up more than 30%. As we do every year, we remind you of the nonrepresentative aspect of these figures, especially for infrastructure for concessions now. Concessions are slightly down in terms of the profit margin. This is mostly due to the dilution brought about by the 3 new concessions. Profit margin would stand at 49.3% on the 2022 scope without these new operations. The residual gap compared with 2022 is due to additional depreciation at APRR amortization, rather. At APRR after the commissioning of some of our major assets that was planned was part of the business plan. On the holding company, there was additional charge due to the company savings plan that was accounted for with a new accounting method. So this is a -- it's a noncash, it's a purely accounting charge. And that explains more than the gap that you see on the table. We only have 1 capital increase per year for employees, and that usually takes place in H1. In each of the branches, in each of the business lines, in construction, revenue was slowed down in H1, plus 1.5% after -- plus 8% in the previous half year. So that's -- sorry, plus 1.5% in Q2 after plus 8% in Q1, so 6.3% for the half year. So there's a slowdown mostly to new residential property, especially in France, and that is affecting our development, property development business, but also the building of the construction of property for other players or developers. In property, this is a severe decline, minus 16% in revenue reservations divided by more than half. These figures are down compared to the average market because we're being deliberately selective because we have an agile structure due to our builder developer profile. And we have very light structures. Of course, we only have EUR 33 million in operating profit. Of course, we are confident that we can deliver a profit in the short and medium term. But of course, the profit margin may be high, but the revenue will be lower. In terms of contracting the strong segments, described by Benoit, have offset the decline in new residential property in dollar terms rather than in volume that we have, therefore, remained profitable in that business. Here, you have a picture of the Athletes' Village in Saint-Ouen. This is a JV. It's a construction operation, but also property development because these housing units will be sold after their first use. This was a rather unusual eco-design site, built on a tight timetable. 190,000 hours of work was deployed with small companies of the solidary economy. In infrastructure, there's low revenue, but they are disparities. There's less in terms of silver works. That is because of the completion of some operations of Grand Paris Express. EUR 110 million revenues this year compared to EUR 300 million in H1 2022. And the A79 has brought in EUR 100 million in H1 2022, and this is being completed now. Roads were profitable to the tune of 7% -- growth of 7%. Metal took advantage of the boom of the offshore wind turbine. International growth, 22.7% was driven by infrastructure projects in -- transportation projects in Germany, roads in Spain, our projects in the U.K. and Norway. But also Metal in Europe, Germany, Spain, Belgium and the U.K. growth upwards of 40% as in France, again for wind turbine. This is, of course, due -- beneficial to the profit margin and mostly for metal. And of course, the civil works projects are in line with our planning and operations budget. This is the Saint-Denis Pleyel railway station. This is very unusual, the largest in Grand Paris Express. The structure of concrete was built as part of the bid for Part 1 of Line 16. Our teams will be working there for railways. There will be 5 interconnections with metro lines, including 4 new metro lines and IRD. Regarding Energy Systems, that business line is enjoying steady growth of 15.4% because of a dynamic market. It's upwards of 10% in organic growth. But of course excellent growth as well. This is particularly significant in France, where we included in Q4 2022, SNEF Telecom, whose mobile network business is now grouped under our new -- our own brand, [ Synektik ]. International business is driven by our European subsidiaries, which all are enjoying double-digit growth. Profit margin has improved because, a, there's more volume, but also because we've worked hard on choosing value-added bids. And this is the same in France and around the world, we have plus 30 basis points. This is Saint-Denis and Saint-Ouen. This is a geothermal power plant being built by Eiffage Energy Systems, that will provide renewable energy to the 2 cities of Saint-Denis and Saint-Ouen. Pumping 70-meter deep water at 14 degrees Celsius, which will cool all heat facilities depending on the needs. We were again under a tight timetable, only 5 months to complete Part 1 of that project. On APRR traffic turned out to be more dynamic in H1 than expected, and that is why a good contribution was made to EBITDA. Regarding our financial performance, there are 2 items that I should mention, first, the upward trend of depreciation, plus EUR 31 million on H1. This is because of the commissioning of some of our assets, mostly the A48 in Grenoble. But the -- of course, the depreciation is although more -- is although higher when the residual duration of the concession is short. The highest interest and financial charges for [ ARAFER ] on a variable rate and APRR is gradual on the bonds that we are redeeming. In 2023, we issued EUR 700 million new debt in bonds with a coupon of 3.125%. The Millau Viaduct, that bridge will be receiving the Olympics flame in 2024. It will go over the coast hills on the 13th of May going 1 kilometer on that bridge, and then will go down to town and will go around 2 or 3 kilometers with 15 flame holders. Beyond -- and over beyond APR ARM, motorway traffic is higher in '22 than on our higher -- sorry, on our other concessions, airports also have regained momentum, not back to their pre-crisis levels, but we have become more -- we have improved operating efficiency with significant cash flow. We are continuing with our diversification road map, 3 new assets, I've mentioned, contributing EUR 52 million to revenue, and we're working on railway and leisure ports projects. After the Rugby World Cup coming up, the Pierre Mauroy Stadium in 2024 will host 36 basketball games between 26 July and 11 August, and 16 games of handball, including the 2 finals for men and women. Regarding the financial statements, what we have here the income statement. The cost of debt is up EUR 33 million, including EUR 18 million on APRR and EUR 11 million on the Viaduct Millau. Most the principal of the debt is index-linked, inflation linked. And you'll see the details of financial expenditure in the annex. The other products income and expenditure, financial income and expenditure includes additional EUR 29 million in income, this is a mark-to-market of Getlink as part of the first consolidation through the equity method on the 27th of April. This is in line with new standards. Last year, we had EUR 3 million as part of dividends received from Getlink. So we have the share of profits from the period from 27 April to 30th of June. That includes EUR 7 million from Getlink then. So we have less on this line than last year. The effective income tax -- corporate income tax rate as last year is 26.3%, close to the average of 25.8%. It should be slightly higher for the year as a whole. Net profit attributable to the group is EUR 392 million, up 10.7%. Regarding the debt net. Net debt here, we have the figures, EBITDA is up EUR 173 million the seasonal variation in WCR is stable at EUR 484 million, for the group as a whole, including EUR 466 million for contracting. That variation is less than in 2022. That was EUR 540 million for contracting in 2022, even though there's more revenue, more business, so it means that cash is well kept under control. Interest and taxes is higher than last year, of course. And so operating cash flow is EUR 724 million compared to EUR 600 million in 2022. Regarding capital expenditure, we have an additional EUR 70 million in contracting. Half of that is due to more business. But the other half is specific capital expenditure, industrial investment in the metal branch to adapt our production capacities for offshore wind mills, wind turbines. In concessions, there's lower capital expenditure. That's because of the completion of 79 and the Nové work is only just starting. All in all, capital expenditure stands at about EUR 450 million, down EUR 150 million, and free cash flow is positive at plus EUR 276 million. That is quite significant. External growth includes the EUR 236 million paid out for the purchase of the 49% stake in the Millau bridge as well as a few small acquisitions, mostly in Energy Systems. And then capital operations, dividends paid by APRR to its minority shareholders. The dividend made by Eiffage to its shareholders, EUR 350 million and buying and selling of shares. All in all, the debt at 30th of June stood at EUR 10.6 billion. If you look at the detail of the debt. On the right-hand side, you have the debt without recourse of concessions. It's down EUR 300 million since the beginning of the year. That's in black. And then the net cash available for the holding company in the contracting business in red, but that number is negative at 30th of June, minus EUR 193 million. The EUR 587 million that we had available at the end of 2022, we used to pay for the acquisitions of the first half of the year and the variation in WCR. But it is a negative figure. It should be quantified because it includes a noncash EUR 166 million debt. This is an accounting number, and that is the value of purchase options of minority interest for the construction companies that we have under control. This is not an actual debt with banks. It does not carry interest. But according to accounting standards, it is financial debt. So that's EUR 166 million of paper debt. Now beyond these figures, the cash position is listed in the annex. It is significant, EUR 3.6 billion, even though it's down because of recent capital expenditure, but also we have a deliberate policy of reducing our short-term and cash equivalent instruments so as to reduce the net interest charge. The order book finally is still high. with differentiated movements, you can see the figures on the right-hand side, the variations reflect the trends of the sectors and indeed reflect the comments made by Benoit earlier on, so that requires no further comments from me. And now the time has come for questions and answers. Thank you for your attention.

Well, in fact, maybe before leaving the floor to you for the Q&A session. I think there's one question that you all have on your mind, and I think we'll not get back to, it's the additional tax on the motorways. It was alluded to by several cabinet ministers on a regular basis. The media discussed it several times. But as of today, you have to know that we have the same information that you have. No discussion whatsoever with the government for the time being. We have no knowledge of the consultation he had with the Council of State, conversely to what he had said he would do to publicize it, to make it public. And we do not have any information about the projects of the draft finance law. So it is impossible to react or to comment at this stage about the intentions of the government. One element of -- for the background is, as you know, we are questioning all those issues of over profitability. There was an additional statement of the regulator beginning of July, who is sharing our position, you can be sure that we will remain attentive to the developments, and we have the firm intention to have everybody abide by our contracts.

Before raising the questions, just one point to the base of the amount of taxes is not publicized for the good reason that the project of budget was not presented to the parliament. We know only the mass expenses, but we have -- we've been informed by September 20 to close this discussion. I have some technical questions. First, can we have an overview of what's happening at Sun'R in terms of activity? Question two, in terms of investment, investments decreased at first half, we are at 2.68%. What can be consolidated by the end of the year? What can we foresee also in financial expenses and mass and rates of financial expenses and an overview of the CapEx at APRR and for this year and for next year also.

Cecile, regarding Sun'R?

Good evening. I'll get back to Sun'R. We ramped up the capital of Sun'R by the end of the year. Sun'R has 3 lines of business: production of renewable energy and development, agrivoltaics, [ Hutson agri ] and voltaic green energy. We are in the process of integrating them and implementing the synergies, 100 megawatts of production of energy for Sun'R and its portfolio today with the synergies of the group, we have a portfolio of 400 megawatts of development. We're talking about development. We know that all the projects will not be led to the very end. Sun'Agri is also being developed, made some inaugurations. One will take place next week in the city [ of L'Oreal ] and Voltaire goes on with its progression of energy provider. We are currently in an integration phase. It's happening very well with the teams of Sun'R.

What we can say about the 400 megawatts were not in Spain, with lots of 50, 100 megawatts were in France, it's going to be progressive on implementation of blocks of a few megawatts, 10 megawatts here and there.

Christian, can you add on the investments? APRR, maybe, Philippe?

Yes, good evening all. For the CapEx of APRR I confirm for 2023, the figures announced during the meeting end of February, i.e. EUR 350 million, 3-5-0 million euro. Regarding 2024, I confirm also the perspective of 360 -- EUR 370 million, 3-7-0. Next year, we'll have the first works linked to our investment plan, our new plan of investment, which was the object of a decree by the end of January this year.

Yes, about the traffic of APRR, there must be some works north of XXXXXXXXXXXXXX].

Yes, there's an impact linked to this new section between XXXXXXXXXXXXXXX Eiffarie to the tune of 10 points, I'd say. A dozen of points on all the network. You didn't ask the question, but I'll give you some indications on the traffic of the summer.

Since we still have a few days in August, we can give you the figures for July.

You notice all the traffic of the first half year, very dynamic with a growth of 3%, boosted a little bit by an agenda effect over this half year compared to 2022. The traffic of July plus August was less dynamic than the first quarter, but it's in growth, growth to the tune of 0.5 points. The LV was impacted by the rise of the price of the oil. And it was the first summer post-COVID and we had very good figures last year.

Thank you, Philippe. Beyond APRR, EUR 250 million, the main acceleration is S&R and the financial rate. Financial -- we'll give you the detail of all our debts and variable we have the debt of FRE and the debt of Millau, we have very little variable debt, and we renewed the XXXXXXXXXXXXXXX. I reminded you, you have the planning of the debts. It's per assets that you have to reason. You have PPP. You have the expenses per lots. It would be -- not be meaningful, if I tell you those little details. On the face of it, no main evolution, except the financing of the new assets, of the new debt either by SPVs or by the WCR. We have to account facing the CapEx financing to the rate of the market of today.

Thank you for this presentation, I'm from JPMorgan. I'd like to have a few answers about the net gearing, the net debt. It is rising, including accounting debt and cash. Can you get back to what you can foresee for the future of this year compared to last year? I think the consensus was stable. But will there be an increase or take into account the evolution of the first Q?

We are not guided by the debt rather than the result. You have all the elements. EUR 166 million, and the figure will not evolve unless new acquisitions of noncash debts. As I explained minority interest for the part remaining to be acquired. If we had to exert the options of -- acquisition options, it's an addition of debt EUR 266 million that was already in the debt of last year. I alluded to it this year because we are at minus EUR 190 million for the construction. This is why I alluded to it. But then we have the cash flows of Eiffage. We have no special points beyond the CapEx I talked about, savings on our construction buildings.

Okay. On the margins, concessions, we have seen that there is a decrease due to the dilution through the new concessions. But also a ramping up of the amortization of APRR. You said 49.3%. It would be the margin calculated on the like-for-like 2022. Excluding the dilutive impact of the new acquisitions.

Okay, the amortizing will weigh 0.6%.

And I've seen also that on the airports, there is an amortization. So at the end of the day, should we go on projecting margins decreasing on the concessions as of now?