Indra Sistemas, S.A. (IDR) Earnings Call Transcript & Summary

Thank you very much. Good morning. I'm Ezequiel Nieto, Head of Investor Relations. And as usual, let me refer you to the disclaimer on Slide #3 that shows the legal framework under which this presentation must be considered. First of all, let me introduce the participants of this call, Jose Vicente Los Mozos, CEO of Indra; Luis Abril, Managing Director of Minsait; and Miguel Forteza, our Chief Financial Officer. Jose Vicente, the floor is yours.

Thank you, Ezequiel. Good morning, everybody, and thank you for being with us this morning for our 9-month '24 results presentation. First of all, I want to welcome our new CFO, Miguel Forteza, who joined us last September. I'm pleased to report that we have delivered a set of results that prove that we are on track to meet our goals. Our revenue, EBITDA, EBIT and net income all increased at double-digit rate. In fact, EBITDA is up by 21%, EBIT by 27% and net income by 26% versus 9 months '23. Our backlog is now above EUR 7 billion, showing the strength of our pipeline and the trust our clients place in us. We have also improved our operating profitability with better EBITDA and EBIT margins. Net debt has been reduced to EUR 70 million as of September, down from EUR 233 million in September of last year. In addition, we received a dividend of EUR 59.6 million from our stake in ITP Aero. Now let's talk about our business milestone. We are currently in process to reach the goal laid out in our strategic plan Leading the Future. We have approved the creation of our Space NewCo and to reinforce its capabilities we have recently signed an agreement to acquire Deimos, a company specializing in satellite design and integration and the ground segment. We've also completed the acquisition, TESS Defence, a Spanish consortium leading the development of advanced military vehicle for the Spanish Army. Another notable milestone is that the Board has approved to explore new options for our Minsait Payment division. Among other key acquisitions to support our strategic objective, we acquired MQA, a leading company in SAP solution in Colombia and Central America. And in conclusion, all the team work every day to meet our goals, and we remain committed to delivering value for our stakeholders. Our business grow, our balance sheet is healthy, and we are making the right move to secure our future. Next, we will deep dive into some of the key development in implementation of our Leading the Future, a strategic plan over these past 3 months. First, in Defense, we have introduced new governance structure to improve the management of key European programs to ensure Indra is well prepared to face them. Additionally, we have designed a new engineering and manufacturing footprint and launched a new commercial model focused on 11 priority systems to support future growth. In Air Traffic Management, we are expanding our presence in North America and APAC, key geographies for the business with relevant contract for air traffic control in Vietnam and the expected one of NEXCOM in the USA. We expect this will strengthen our global leadership in this sector. In Spain -- sorry, in Space it has been notable as well, as I already mentioned with the creation of Spain NewCo and the agreement to acquire Deimos. In Minsait, we have been very focused on implementing efficiency initiative using tools like GenAI to improve margin and drive profitability. We have also launched a priority offer initiative designed to promote our focus for own salesforce on high-value offering. In addition, our Board has given approval to explore options for Minsait Payments, which will open new growth avenue. Shifting toward our cross-group strategic line, we are actively working to strengthen our presence in all new home market. We appointed regional director to drive our international plan and have already launched this plan in key regions such as Middle East, North America and Latin America. We'll continue to expand our ecosystem with key acquisition. TESS majority acquisition is important to take the leaf of the Spanish land program as we will see later on. Additionally, we have acquired MQA, which expand Minsait digital capability in Colombia and Central America. We continue to focus on our people. We have made a good progress in retaining our talent, reducing undesired turnover across all geographies and business units and increasing headcount in Defense by 13% with 65% of new hire being experienced professional. As you can see, we are on track to meet our Leading the future objective, making the right move to secure Indra leadership across all our core business areas. If we zoom in Space, as previously mentioned, the constitution of Indra's Space NewCo is a key step toward becoming an European Tier 1 space business with end-to-end capabilities. As part of our strategy to expand these capabilities, we have recently agreed to acquire Deimos. With the Deimos acquisition, we are enhancing our presence in the upstream segment of the space value chain, encompassing satellite design, flight system, mission-critical technology and ground segment capabilities. This integration across the entire space value chain will optimize our synergy, ensure competitiveness and secure access to prime role in major national and European space program. Another important milestone for us this year has been the takeover of TESS Defence, which represents a transformational opportunity for Indra. This acquisition accelerates our position as the national prime contractor for land and system defense and solidify our leadership as the key Spanish entity for defense land vehicle. By acquiring TESS Defence, we now have enhanced access to the Spanish land platform market, which includes significant program like the VCR 8x8, a maintenance contract. This positions us well for continued growth in this high visibility project. Internationally, this move strength Indra's role as leading system integrator. It also allows us to act as the national coordinator for large European lands program, further establishing our presence on the international stage. As a result, we expect to access a very relevant pipeline in land defense market, a market with a potential of EUR 120 billion globally. In addition to implement this transformational project, we will create a technological and manufacturing center in Asturias in the north of Spain. Turning back of our financial results, let me highlight the following. The double-digit growth achieved across our main financial metric together with both the volume and quality of our backlog lay the foundation for Indra's future growth. As for revenues, our 13% increase has been driven by each and every one of our businesses. Defense, 25% growth has been bolstered by FCAS Integrated System and Simulation areas. Air Traffic Management, 35% growth can be attributed to both organic levers such as international sales in Colombia, Belgium, United Arab Emirate and inorganic contribution like Parker in U.K. and SELEX in U.S. As for Mobility, we have seen sales grow about 16%, particularly worth nothing Mexico, Peru and U.K. contribution. Finally, Minsait has grown revenue by 6.5%, mainly driven by Public Administration & Healthcare vertical. If we look at the picture for our third quarter of 2024, we see a solid revenue growth of 9% and a strong profitability improvement with both EBITDA and EBIT margin growing beyond 1 point and with EBITDA and EBIT increasing double-digit in absolute terms. Finally, net profit grow by 24% in the third quarter '24 with a free cash flow generation of EUR 25 million in the quarter. On Slide #11, you can see the inorganic contribution to our revenue and the ForEx impact, both in the accumulated period in the quarter. It's important to remark the strength of our organic growth, 11% for the first 9 months of 2024 and plus 9% for the quarter. ForEx impact in the 3 quarter '24 has amounted EUR 25 million because of Argentina, Brazil and Mexico currencies depreciation versus euro. If you move to Slide #12, you can see on the left-hand side the breakdown of our revenue by region in the period, which are split across Spain, 50%; Europe, 21%; America, 20%; and EMEA, 9%. Currently, our international business already account for 50% of our revenue. In terms of EBITDA distribution, Defense, Air Traffic Management and Mobility are increasing their weight and now represent 55% of the total for the first 9 months of the year. Finally, on my Slide #13, with the evolution of our workforce broken down by business, you let me highlight here that we have improved our revenue per employee by 9% annually, with our workforce increasing just 3% compared to September '23, growing faster in our Defense division, as I have already stated. Now I will leave the floor of our Chief Financial Officer, Miguel Forteza, for an in-depth review of the performance of the division. Thank you.

Thank you, Jose Vicente, and good morning, everyone. Firstly, I would like to thank you all for the warm welcome, and it's a privilege for me to join the company at such a pivotal time. Well, now let's get down to the numbers. I will start by walking you through the key financial highlights by division. This has been a strong 9 months for Defense, as you can see in the key figures on the Slide 15. Order intake grew by 10%, mainly thanks to the Integrated Systems and Simulation areas. More important was the revenue delivery, which grew 25% in the first 9 months of the year with double-digit growth posted both in Spain and Europe, mostly driven by the contribution of the FCAS project and Integrated SYSTEMS and Simulation areas. Excluding FCAS contribution, sales would have increased by 11%. On top of the solid revenue growth, profitability increased with EBITDA margin growing and standing above 20%, while EBIT margin also expanded and stood at 17.9% in the first 9 months of the year from 17.5% last year same period. Despite this strong revenue growth, Defense backlog of revenues remains above 3x. Quarter-wise, sales grew by 16%, driven by Integrated Systems and Eurofighter despite considering a slightly lower contribution of the FCAS project in the quarter, as you can see on Slide 16. EBITDA margin improved by 2.5 percentage points and stood at 25.4% versus 22.9% in 3Q '23, mainly due to the increased contribution of the Eurofighter. For its part, EBIT margin improved 2.3 percentage points and was 22.6% for the quarter compared to 20.3% in 3Q '23. Air Traffic Management also delivered very good -- very strong performance, as you see on Slide 17, which shows how the double-digit growth trend continued in the first 9 months of the year. The positive performance showed by order intake, plus 52% growth, was mainly explained by the contracts signed in Canada, Colombia and Vietnam. The first 2 already signed in the first half of the year and the third signed in this quarter. For its part, sales in the first 9 months of the year grew 35%, boosted by growth across all geographies, mainly driven by contracts carried out in Colombia, UAE, Belgium and Azerbaijan. The acquisitions of Park Air in U.K. and SELEX in the U.S. also contributed inorganically to the division's growth. And finally, EBIT margin stood in the double-digit range of 12.3%, less than in the previous period due to the lower profitability of the acquired companies, SELEX and Park Air. If we move to Slide 18, we show the performance of the quarter, starting by 39% revenues growth bolstered by the projects in Colombia, UAE, Germany and the inorganic contribution of Park Air. EBITDA posted 4% growth to reach 16.6% margin, while EBIT recorded 7% and stood at 13.1% margin. If we move to the Mobility division, order intake increased by 15%, explained by the ticketing contracts signed in Ireland and Saudi Arabia. Sales grew 16%, driven by the growth posted in all geographies, especially bolstered by America, thanks to Mexico and Peru and Europe, mainly in the U.K. EBIT margin in the first 9 months of the year improved to 4.4% from minus 2.8% recorded in the first 9 months of 2023 by the lower weight of problematic projects in the division and by the higher focus on improving profitability. On Slide 20, we show the evolution of the division in the quarter. Revenues increased by 24%, boosted by Mexico and Peru and several projects in Spain. For its part, EBITDA margin improved to 8.2% from 0.8% in 3Q '23 and EBIT margin also went up to 5.7% from minus 1.8%. Now on Page 21, Minsait also printed a positive first 9 months of the year. The good commercial momentum goes on with backlog growing at 4% and order intake at plus 1% in the first 9 months of the year. For its part, revenues in the first 9 months grew by 7%, driven by the strong performance showed in Public Administration & Healthcare, which grew 14%, thanks to the positive activity registered in public administration in Spain and the elections projects in El Salvador and Iraq. Both Energy & Industry and Financial Services showed 5% growth, while Telecom & Media decreased by 5%. Finally, EBIT margin in the first 9 months of the year improved to 5.6% versus 5.4% in the first 9 months of last year, thanks to high operating leverage and steady sales growth as well as improved revenue mix towards Digital & Solutions and the ongoing focus on cost efficiencies. On Slide 22, in the quarter, Minsait posted 2% revenue increase, showing growth in all verticals. Public Administrations & Healthcare, 5%; Financial Services, 3%; and Energy & Industry, 3%, except for Telecom & Media, which declined 7%. Regarding profitability, operating margin stood at 7.6% versus 7.4% in 3Q '23. For this part, EBIT margin printed 6.1% versus 5.7% in 3Q '23. On Page 23, the breakdown of Minsait revenues by horizontal, where you can see that we have improved our mix once again with Digital & Solutions growing by 11% compared to the first 9 months of last year and now representing 51% of our sales. On Page 24, we show our order intake and revenues breakdown of Minsait. In the first 9 months of the year, order intake was up 1%, standing out Financial Services, 8% growth. Moving to the middle of the slide. Revenues in the first 9 months of the year grew by 7%, driven by Public Administrations & Healthcare, plus 14%; Energy & Industry, plus 5% and Financial Services plus 5%. On the contrary, revenues in Telecom & Media decreased by 5%. On the right-hand side, revenues in the quarter increased 2%, showing growth in all verticals. Public Administration & Healthcare, plus 5%; Financial Services, plus 3%; and Energy & Industry plus 3%, except for Telecom & Media, which posted a 7% decline. Let's start the financial review with the evolution of the free cash flow on Slide 25 that amounted to EUR 94 million, an excellent figure, taking into account business seasonality and the inclusion of the income tax payment of EUR 41 million in the previous quarter corresponding to the delivery of shares of the medium-term remuneration plan for the period '21-'23. This level of cash generation, as we will see below, has allowed us to maintain our financial leverage in a very low level of just 0.1x net debt to EBITDA. It is in line with our free cash flow guidance of more than EUR 260 million by year-end. Now on Page 26, we see how days of sales improved compared to the same period of 2023. The good performance versus September '23 can be explained by the improvements of accounts receivable, minus 2 days and accounts payable, minus 1 day. Page 27 shows the net debt evolution of the first 9 months of 2024. The first step is a strong operating cash flow of EUR 362 million due to the excellent performance of the businesses and the resulting higher operating profitability. As mentioned, change in net working capital stood at minus EUR 151 million compared to EUR 79 million in the first 9 months of 2023. Other financial liabilities stood at EUR 24 million, same figure as of previous year and net interest at EUR 17 million, EUR 3 million more than the first 9 months of 2023. With all this, we have closed this first 9 months with net debt at EUR 70 million and a leverage ratio of just 0.1x net debt to EBITDA, as I mentioned before. And you can see in Page 28, which is well below the figure we presented in September 2023. And now to finish my part, a quick look to the debt structure in Page 29. The first 9 months of the year, gross debt has been reduced to EUR 539 million, average maturity at 1.5 years and cost of debt at 4.3%. The cash position at the end of September was EUR 469 million, and we also have EUR 778 million of undrawn credit facilities so that we maintain liquidity while canceling gross debt with cash. With this, we finish the presentation. And now let's move to the Q&A session.

[Operator Instructions] First question comes from the line of Carlos Iranzo Peris from Bank of America.

I actually have 2, if I may. The first one, it's on Defense growth. So if you could give some color on what are the main programs that should drive growth in Defense in 2025? And the reason I'm asking is because in theory, FCAS growth will slow down significantly in 2025. And then the second one is about the new [ SpaceCo ]. Correct me if I'm wrong, but I thought you said previously that you did not want to be in the launcher business. And now I see in the slide that you are saying it's not a priority in the short term. So how should we take that?

Okay. Thank you for your question. If we start with Defense, okay. About FCAS. Well, first, you remember 1.5 years ago, many people had a doubt that Indra can lead a program like FCAS. Today, it's a reality. We have deployed in industrial footprint. In 2023, the sales for FCAS was EUR 139 million. This year will be EUR 220 million and our expect in 2025 will be EUR 200 million. But additionally, we grow in international sales and other program. I give you some example. We have win an important contract in Poland. Also, we have won a contract in Vietnam. Also, we are deploying our Defense business in Latin America, mainly for maintenance. That's we start to grow because in the past, we were more national. I think now with our leadership in national in different areas, plus to grow international can answer the growth in Defense business. About Spain -- Space. Well, about Space capability, we'll say we want to be different. We want to develop end-to-end capabilities. And for this, I think we need to be specialized. And that's -- we have started with our ground segment specialty that we have the knowledge. Now we have advanced in manufacturing this side with Deimos and we'll continue to study the market because all in all the end-to-end capability will be under Indra leadership. Also, we can develop partnership, we can develop relationship or a relation with university or start-up. I will see that Space NewCo, we are building that we think that we take the necessary capability to become Tier 1 in space to access to European program.

Next question comes from the line of Nicolas David from ODDO.

I have 2 actually. The first one is regarding TESS Defence. Congratulations for closing this deal. Could you share us some more details about the operational performance expected from this company? Maybe first on the first wave of orders that it's already affirmed and now that you are going to integrate fully the company in terms of revenue and operating profit. And then I understand that there's a second phase where operationally or in the way you are going to account the revenue of this company is going to be different. So could you elaborate a little bit more and share the long-term assumption you have taken regarding this business to justify the valuation? And my second question is regarding Minsait. I understand that after Q2, you were expecting a growth -- kind of a stronger growth than what you are delivering in Q3. What caught you by surprise in this area in terms of sectors and businesses would be helpful.

About this, I will start the rationality of this acquisition and later Miguel can go in the detail to [ valorization ]. And for Minsait, Luis will answer you. Well, you know my background is car industry. I never think when I leave a car industry that now in Indra, we are going to create a company to land vehicles. That is good. I think in Spain, we need to have a leader to participate in European program. I think the business in land vehicle is very important in the world. I think in the current geopolitical situation, they will grow. I think to have a Spanish company to take this leadership and to become a company with the P&L and current autonomy for operation is good. I think Indra has been the opportunity to take this. And now we need to implement and will implement in the same way we implement our plan, Leading the Future. I have zero doubt about the implementation, and we work with the current shareholder, but under Indra leadership. About valorization, Miguel, please, could you give us some detail?

Yes. Just to give you some color on how TESS works in terms of structure. Just to mention a couple of points. So first point, Indra will consolidate TESS through a procedure of full integration. Secondly, TESS will consequently account only for the revenues from the production of tranche 1 of the 8x8, that's the combat vehicle on wheels and its financial statements, as this program will keep its current structure with no margin embedded. But TESS's own management margin as prime contractor will be considered for the remaining tranches of the 8x8 program as well as for the VAC program, that's the armored chain vehicle and for any future program. Very important also to mention that TESS will also be responsible for the maintenance of the fleet produced from now throughout the fleet's useful life. So basically, TESS will start generating normalized margin progressively when VCR 8x8 tranche 2 and the VAC tranche 1, which is already in the design phase and being already contracted, will be produced under the new TESS model. So regarding -- well, valuations, it's been used -- the standard common practice valuation methods used in the industry, discount DCF and multipliers on market reference. On top of that, we have 2 fairness opinion which backed this valuation.

Thank you, Miguel. About Minsait, Luis?

Yes. I will take the one on Minsait. Thank you, Nicolas. Well, here the thing is that growth in revenues this Q is effectively a bit lower than in other Qs. But this is what we were expecting from the beginning of the year actually. And here, the message is that we see no risk in meeting our revenues guidance for the end of the year. There are, in any case, some explanations for this lower growth in revenues in the Q. I mean I will give you a couple of messages here only. One is that in this Q3 of '24, there is almost no contribution from our Elections business, which contributed with EUR 23 million of revenues in the third quarter of the year '23, okay? And this affects a little bit this growth. And then also another message regarding the revenues growth in the quarter is that we are effectively trying to increase margins through letting go some low-margin businesses. And in fact, this is having already an effect in the EBIT margins that you see that has gone from 5.7% in the third quarter of '23 to 6.1% in the third quarter of '24, which actually I think that is quite remarkable in the context I was mentioning of almost no Election business in this third quarter of 2024. So all in all, we see no risk for meeting the revenues guidance. This is the growth we were expecting from the beginning of the year. And we acknowledge that there is uncertainty, but we are moderately optimistic on what we see regarding revenues growth.

Our next question comes from the line of Alvaro Lenze from Alantra Equities.

The first one is on Minsait. And if you could provide some detail on what is the contribution from the payments business now that you have announced that you're open to selling it. I don't know if you told it already, but just to make sure I have it correctly in my model. And secondly, if you could provide some indications on what has been the inflation on wages for Minsait this year? And what do you expect for next year? And then my second question would be on Defense and if we could see more acquisitions in the tune of TESS Defence in regards to size or maybe looking to join with other partners in Defense to make similar joint ventures or if you are looking more to make bigger acquisitions in 2025?

Alvaro, I think about payments, Luis will give all the detail. I think it has been -- we are exploring that. All the possibility has been decided by our Board. Luis?

Yes. I mean, regarding the numbers on payments, I mean, there are -- I will give you whatever -- I mean, what I can give you, which is basically revenues figures. In the first 9 months of 2024, revenues for payments were EUR 155 million. And this figure in '23, so first 9 months of '23, revenues were EUR 145 million. So it's a sound business with sound margins growing at more or less the average of what we see in Minsait plus 7%, okay? This is on payments. Not very, very relevant in terms of size, but it is a profitable business. And on wages, on salary inflation, what we expect for 2024, which was your second question, I think, what we are seeing is around 4%, 5%, which is a little bit lower than what we saw last year in 2023, which I think was in the range of 8% or something like that.

Thank you, Luis. About Defense, we are in the stock market, and you know me. I don't like to talk about speculation. We talk about the facts. And of course, I think now Indra is in the international defense footprint. We discuss with different international partner. Also, we look at different company, but we will give you the adequate answer at the right moment because we don't want to reduce our flexibility in operation. That -- and to answer you more detail, 1 week ago, somebody from Brazil came to say me, and he told me, I came 2 years ago, Indra was no big movement. Now when we go to the Indra, we look all the machines in the civil construction, very noisy, many movements that we are in this process. We are building our Indra house filter, and we have a movement. That we'll inform you at the adequate time the adequate decision we will take.

A follow-up for Luis. I was asking on inflation for Minsait wages into 2025. I don't know if the bargaining agreements are already ongoing or not. And also if we can assume that the margins for payments are substantially higher than the average for Minsait?

Yes, we cannot give the exact number on the margins of payments. There are some higher than the average of Minsait. But it's probably not the higher margins division in any case. That's on payments. And we cannot disclose more information for obvious reasons because we have customers here and so on and so forth. And then on wages for 2024 -- sorry, for 2025, I mean, probably it's a little bit too early to say. I mean we are in the process of budgeting the whole year. And this is one of the variables which we are considering. We are not concerned with huge salary inflation next year, but this is something that we still cannot say either.

And additionally, that's -- we need to analyze the total Indra Group and also need to be approved by the Board. That for the moment is not the case.

Our next question comes from the line of Michael Briest from UBS.

Just a quick clarification. I don't think I heard what the revenue run rate of TESS was and there's an earn-out of EUR 30 million attached to it. Can you say what would trigger the earn-out?

Well, I think Miguel can give you more detail, but the revenue will be light to the number of vehicles we'll manufacture. Miguel?

Exactly. Yes, in terms of revenues, contribution will come mostly from the number of VCR 8x8 units delivered in '25, '26, '27 and go on and to a lesser extent the revenues from the design and program implementation of the VAC vehicle. So yes, but almost we will have no impact in EBITDA or EBITDA levels as sales from the VCR 8x8 tranche 1, as I've previously said, has no margin embedded. But I mean, if I can give you a very gross numbers, so TESS is expected to deliver around 100 units, '25, another 100 units, '26 will be -- that's what is expected.

Okay. And you are not...

Sorry. And that TESS is a mid- long-term bid for Indra, okay? That I think -- okay, I understand because in the first step of 8x8 is no big change. But the important of TESS is the next program will come and also the modernization.

Our next question comes from the line of Carlos Trevino from Banco Santander.

I do have 2 questions. The first one is follow-up on Minsait. You have explained the reasons why perhaps growth in Q3 has been a bit below than previous quarters. But I would like to follow up on if you have seen any changes in the business dynamics in Minsait over the last 3 months. My second question will be regarding free cash flow expectations for Q4. You have reiterated the full year guidance. I would like to be a bit specific on working capital. What kind of working capital dynamics do you see in Q4? The typical ones, are you expecting significant prepayments?

Luis?

Yes, I will start. Thank you, Carlos. No, we see no very relevant change in the dynamics. I mean, obviously, there is still uncertainty. We saw uncertainty some months ago also and things are not easy. And in fact, some of our peers are suffering a bit with the top line. We acknowledge that uncertainty. And basically, what we are doing is that we are keeping working in different initiatives to activate sales, which I think that are being quite effective. And also, we rely on the fact, and this is a difference versus some of our competitors that many of our customers are large corporations who are suffering less and also on the fact that we do have many multi-annual contracts that also give us some stability. And finally, you know that we work in core activities of our customers, which are areas where resilience is higher. So basically, dynamics are not easy, but this is what we were expecting from the beginning of the year. And again, I insist on the message that we see no risk in meeting the guidance in revenues growth that we posted at the beginning of the year.

Okay. I think about free cash flow, we'll keep our guidance more than EUR 250 million in 2024. And today, the forecast of revenue is in line that we expect from our customer. That Miguel maybe add some comment.

Yes. Just to clarify a bit. You know that the third quarter free cash flow in Indra is usually weak. So you can see our historical data. As you know, we always generate most of our free cash flow generation in the month of December. So 3Q '23 free cash flow was EUR 63 million, was in that case, clearly stronger than average because we exceptionally concentrated more clients payments in that quarter. Having said that, we reiterate, as Jose Vicente was stating, free cash flow guidance for the year for more than EUR 260 million. So we have to deliver more than EUR 190 million in the fourth quarter, which is something that we have already consistently done in the last 3 years and will be a similar case for the working capital.

Thank you, Miguel.

Our next question comes from the line of Laurent Daure from Kepler.

I have 3 questions. The first is on the IT side on Minsait. I want to make sure I understood well the message is when you take back the election negative impact, you are still running on mid-single-digit growth. Is it the kind of growth we should expect for the next 2 or 3 quarters or do you expect a specific headwind on other units? So that's the first one. Second one is on Air Traffic Management and Transport. You had this year several very, very strong quarters on the back of big deals. When shall we expect the growth on those 2 businesses to normalize a bit? And the final question is back on TESS. I'm sorry, but I still don't get the contribution for next year. I understand the number of units, but can you be very clear and tell us what you expect as average hypothesis in terms of revenue contribution? And did I get it right that you don't expect any EBIT contribution from this one?

Thank you, Laurent. About the Minsait, Luis?

I will start. Thanks, Laurent. Yes, you understood well, okay? Without elections, we are closer to mid-single-digit growth. And actually, here, what I can say is that I mean, regarding the next quarter that you were asking, we are sticking to the guidance that we gave, which is growth for the whole year of at least mid-single-digit. And then regarding the following quarters, again, we are in the budgeting process now, but we see growth next year as well, okay? We see organic growth next year as well. So as I was saying, we are moderately optimistic with the outlook, even though we acknowledge that things are not easy, and there is uncertainty that affects a little bit of top line.

Thank you, Luis. About ATM and Mobility, I will start Air Traffic Management. Well, I think to put Air Traffic Management that division today has been very positive. And today, I think Indra air traffic solution is the most advanced solution in this domain in the world. That you can -- EUROCONTROL, you can have London Airport and the agreement with NAV CANADA and also other solution in Asia Pacific. Today, in 85% of the airport in the world we have Indra solution. And also the agreement -- the NEXCOM for the U.S. I think that's -- sorry, I want to become humble. But I think today, in the air traffic we are the most advanced solution in the world. And when the customer look this and we can be successful in EUROCONTROL, that's -- for that, we grow very quickly because also other company has doubt about the future air traffic and for us, it's a diamond that we have. And we have put in value, and that has been confident to the global customer. About Mobility, we are in the turnaround. We say last year, we want to transform Mobility that in the future will be a vertical for Minsait, and that we are in this process. I think now we are in a stabilization period. I think under Minsait leadership also will work in more end-to-end offer to the customer to give more transversal solution. That will continue in this process. About TESS 2025 will depend on the vehicle we'll deliver, okay? As you know we are working. I think it's a little early. First, we need to deliver 2024. We need to expect the final decision for the competence about this. We'll take the lead and we have the vision. We can give you what is the vehicle we deliver in 2025. And with the adequate vehicle, we can give you the invoices we have in 2025. If no question, I want to make the conclusion. 1 year ago, you had doubt about our strategic plan. We received too many questions about our strategic plan. Leading the Future is a reality, it's integrating in all the company. Everybody work hard every day. We have the approval of the Board. I have the support of the Chairman in the company, and we grow in very solid and improvement every day. And the guidance for 2026, the 6,000 turnover, 10% EBIT, 12% EBITDA, more than EUR 900 million free cash flow committed year will achieve. And the guidance for 2024, more than EUR 4,800 million turnover and more than 8.6% EBIT and EUR 450 million EBIT and more than EUR 260 million cash flow will achieve it. We are in -- let's say, we are in -- the houses in construction, in very healthy construction and we'll project a very modern and international Indra company. Thank you for your support, and have a nice day.