SPIE SA (SPIE) Earnings Call Transcript & Summary

Hello, and welcome to the SPIE Full Year 2023 Results Call. Please note this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Gauthier Louette, Chairman and CEO; and Jerome Vanhove, Group CFO, to begin today's conference. Thank you.

Good morning, ladies and gentlemen. Thank you for attending this conference for the full year results of the year '23 for SPIE. So maybe I'll start with my usual conclusion, has there been a better time to be an electrical engineer, and 2023 is definitely a record year for SPIE. We had an exceptional level of organic growth at 8.4%. This is a strong momentum in our markets, and we've been able to increase prices in an inflationary context. We had a strong EBITA margin increase at 40 basis points compared to 2022, 6.7% of revenue. This is better than our guidance. It evidences our unabating focus on operational excellence and even higher selectivity in the context of strong demand. And indeed, we reached 2 years in advance our 25% EBITA margin plan. We had an exceptional level of free cash flow with a 109% cash conversion. Our leverage reached an all-time low at 1.2. We did execute brilliantly our bolt-on acquisition strategy, which, as you know, is at the core of our business model and is very value accretive. And finally, we continued to lead the way on sustainability, SPIE being one of the best-in-class performer with 48% of revenue, aligned with the EU taxonomy. It does showcase how strong we are as a key enabler for energy transition. And looking ahead, we are very confident to deliver yet another strong year in 2024. On Slide 5, our financial highlights. I'm really pleased to report an outstanding set of numbers. Revenue is now getting close to EUR 9 billion, up 8.4% organically, EBITA nearing EUR 600 million, EBITA margin improved by 40 basis points. Our free cash flow increased by 36% to reach EUR 427 million, and our leverage ratio was down to 1.2. Bolt-on M&A has been very active during the year as expected, and we are very pleased with the 9 acquisitions announced, representing around EUR 700 million in annual revenue. And finally, our adjusted EPS grew by 14.2%. We will recommend a dividend per share of EUR 0.83, up 13.7%. On Slide 6, in 2023, SPIE's organic growth was at 8.4%. This is a record level for the group despite a very high comparison basis, especially in Q4. We had a 10.2% organic growth in Q4 '22, which we compare now with 5.5% in Q4 '23. Definitely, 2023 has seen a very strong momentum in our market, and we also enjoy the higher price effect in an inflationary context. On Slide 7, in '23, all our segments recorded a material increase in EBITA margin. France, Germany and Central Europe and also Global Services Energy and Nuclear received a strong 20 basis points improvement. North-Western Europe delivered an outstanding performance with a 90 basis point margin improvement. This is mainly thanks to the Netherlands. The disposal of our U.K. operation means 40 basis points on the segment and 10 basis points at group level. The region enjoys a now 5.9% EBITA margin. It did catch up with the best-in-class margin performance of the group. Overall, the group's EBITA margin grew again by 40 basis points, exceeding our guidance and reaching 2 years in advance our 2025 targets. The strong operational performance reflects our strategic focus on profitability in the context of strong demand for our services and labor scarcity in our sector. Moving to Slide 8. In France, we enjoyed a 5% revenue organic growth and a 20 basis point EBITA improvement. All activities were well oriented. Tech FM was driven by the constant demand for energy efficiency solution, more technology per square meter and the need to adapt office spaces for the new usages. Industry Services was supported by decarbonization and reindustrialization projects. City Networks has seen acceleration from the low carbon mobility sector with increased demand for urban transport, smart lighting system and recharge systems for electrical vehicles. Finally, ICS has expanded through hybrid cloud solution as well as unified communication and cybersecurity solutions. On Slide 9, Germany and Central Europe, we did saw a strong momentum -- we did see a strong momentum across the region, 8.2% revenue organic growth, 20 basis point EBITA improvement. Germany alone recorded a 5% organic growth and a 10 basis point EBITA improvement. High-voltage activities, they did accelerate in H2 as expected. We do enjoy an excellent mid- to long-term visibility in this field, thanks to the substantial need for integrating renewables into the grid and for the upgrade of the transmission lines. For Tech FM and CNGs, we see similar drivers as in France. And finally, ICS was supported by unified communication activities and digitalization projects. Maybe it was functioning for City Networks and Grids that we do see an acceleration on the fiber market, which is so far lagging behind what we have seen in other countries. To conclude on Germany, let me remind you that activity in Germany mainly relates to energy efficiency and to the massive structural change in energy mix, and we definitely had a very strong year in Germany. In Central Europe, we've seen a double-digit organic growth, particularly in Poland and Austria, where our acquisitions are performing extremely well on top of a good dynamics in all our markets. Switzerland has benefited from a catch-up of ICS activities following prior supply chain delays. North-Western Europe, we've seen an exceptional level of organic growth at 13.1% and a significant increase in EBITA margin, 90 basis points, including the relative impact from the U.K. disposal and significant progress in the Netherlands at both historic perimeter and Building Solutions, former Worksphere. All sectors in the Netherlands explained outstanding organic growth, especially in high voltage activities and industry service throughout the year was absolutely excellent. Building Solutions remained very dynamic with the increasing demand for complex and sustainable solutions. The margin progress since acquisition of Worksphere is remarkable. Belgium's activity were fueled by high voltage projects while building renovations and maintenance were well oriented and industry did fair well. Now on Slide 11, Global Services Energy and Nuclear. We recorded an organic revenue growth of 13.5%, an EBITA margin improvement of 20 basis points. We experienced a very strong momentum in oil and gas, thanks to our strong position in Africa. We also benefited from the ramp-up of a contract in Denmark. Pluriannual contracts are providing good visibility, our EBITA margin progressed further from a high level, and we see really good trends for the year '24. Now, with the acquisition of Correll Group, we have renamed our Oil & Gas division to Global Services Energy to reflect our growing position in the offshore renewable activities. In Nuclear Services, the activity did remain constrained with the repair of the weld, which has entailed some disruption in the maintenance program. It's now progressively returning to normal. We see we enjoy a good mid- to long-term visibility, thanks to the new EPR programs, which have been launched and confirmed by the French government, and we do continue to see a high level of EBITA margin in this sector. Regarding the acquisition on Slide 12. As I said, we had a very active year in '23, 9 acquisitions, totaling more than EUR 700 million of full year revenue acquired, including ROBUR, which positions the group in industrial services in Germany. This was something we have been foreseeing for quite a while. Bolt-on M&A strategy remains at the core of SPIE's growth model. It does contribute to the extension of group services and the footprint density. Our active approach, combined with highly formulated markets where we're operating, does offer a rich pipeline of future, M&A opportunity in 2024 should be no different. Looking at shareholding structure on Slide 13. We are a service company, our employees are our most valuable asset. SPIE stands out as one of the 7 companies on the SBF 120 Index where employees are the largest shareholder of the group. Our shareholding structure highlights a significant 9.2% owned by SPIE employees and management, 7.4% attributed to employee funds and 1.8% to management. We're also very pleased to have 2 long-term shareholders, Bpifrance at 5.5% and Peugeot Invest at 5.1%. Last year, we really had a big success with our SPIE employees shareholding plan, SHARE FOR YOU '23, more than 17,000 employees from 14 countries participated. This is a 50% increase compared to '22. And notably, over 5,000 of these participants are first-time shareholders in the company. We are really pleased with this result. It's really important for us to associate our employees with our long-term value creation. And speaking of long-term value creation, maybe to conclude this section, let's take a step back and look at our progress since IPO. Our model does deliver. It is based on cash duration and M&A compounding. We had an outstanding performance in all respects. It does confirm the unique positioning of SPIE and accelerating markets, combined with margin over volume approach and the sound financial structure, which has always allowed us to further expand to fuel a profitable growth and self-financed bolt-on acquisitions. Now we will hand over to Jerome, who will comment on our financial performance.

Thank you, Gauthier, and good morning, everyone. I'm on Slide 16 with the highlights of our income statement. SPIE has demonstrated an outstanding financial performance in 2023. Let me outline our key figures. EUR 8.7 billion of revenue with an exceptional organic growth of 8.4%. EUR 584 million of EBITA, a significant increase by 14.3% versus 2022, including a strong EBITA margin increase of 40 basis points at 6.7%. The adjusted net income saw a significant rise to EUR 344 million, up by 14.2%. The adjusted earnings per share stands at EUR 2.05 on a fully diluted basis. These figures underscore the strong financial performance of SPIE in 2023. Moving to the revenue bridge. We have achieved a significant growth in 2023, with first an exceptional organic growth of 8.4% as said, obviously, including a material price effect in the context of higher inflation. M&A added only 2.4% to our growth for FY '23 as most of our acquisitions of last year were made in the second half of the year. Disposals had a negative 3.1% impact. This is due to the sale of our operations in the U.K. at the end of the year 2022. Net currency effects remaining negligible. Thus, the total revenue growth of 7.6% for the year. Now looking at the bottom part of the P&L. Our adjusted net income increased by 14.2%. This is in line with the increase of our EBITA. Into more details, the contained net interest reflects our optimized debt profile, of which more than 80% is at fixed rate. Other financial charges, they are mainly driven by the interest cost on our German defined benefit pension schemes that increased significantly due to the rise of interest rates over the period as well as a negligible net FX effect in 2023 in comparison with the net gain that we reported the year before in 2022. Finally, on the income tax, our normative tax rate is down by 2.5 points to 28.2%, mainly as a result of the exclusion from that calculation of the French CVAE tax. Now breaking down the items to reach the reported net income, I will highlight the following: the very limited restructuring cost, all of them being related to the integration of our newly acquired companies, the amount of minus EUR 0.5 million related to the ORNANE, our convertible bond, which includes circa minus EUR 8 million of linear amortization of the derivative component. And on the other hand, circa plus EUR 8 million related to the change in fair value of the same derivative component. As a reminder, in H1 '23, we recorded accumulated IFRS charge of EUR 18.4 million, which corresponded to the current minus EUR 0.5 million for the whole year. Considering it's noncash nature, it is restated in the adjusted net income, while the 2% yearly coupon cost remains included in the interest cost. The other nonrecurring items of EUR 41.1 million are mainly related to, a, the noncash IFRS 2 charge linked to the success of our employee shareholding program and the full vesting of our long-term incentive performance plans. And on the other hand, as well as higher acquisition costs, they are under IFRS free charge due to our obvious strong M&A activity in 2023. You are now well familiar with this chart, showing our structurally negative working capital, and this over the years, thanks to our optimized contractual terms, the invoicing processes as well as a good cash collection. Our working capital improved further by EUR 60 million at negative EUR 884 million at the end of the year. This represents a negative 37 days of revenue at the end of 2023, bearing in mind that one day of working capital in 2023 has increased so as to represent EUR 24 million versus EUR 22 million the year before. This is an excellent performance that did contribute to our outstanding cash conversion along with a very good quality of working capital, notably with reduced work in progress or accrued income. Moving to the next slide. SPIE has achieved an outstanding cash conversion, as said, at 109%. It does confirm, again, our long-standing cash-generative model with an average cash conversion in excess of 100% since IPO. It underlines the high quality of our EBITA performance. On the basis of this excellent operating cash flow, SPIE reached a record level of free cash flow of EUR 427 million in 2023. Moving on to next slide. Our net debt decreased to EUR 793 million at the end of December '23. This performance resulting mainly from, a, the operating cash flow of EUR 629 million, the well-contained cost of our debt and as well as our optimized tax cash out, which benefited in 2023 from a deferral of circa EUR 20 million, which will be cashed out in 2024. Thus, our free cash flow of EUR 427 million allowed us to, a, self-finance our M&A strategy, in which we engaged EUR 196 million of cash out. And I remind you that this amount still does exclude the cash out related to the acquisition of ROBUR and Correll, which is taking place only in the first quarter of 2024. It allowed also for the payment of dividends for EUR 128 million and also to the reduction of our net debt by EUR 127 million. Thanks to our efficient cash generative model and to our EBITA growth, SPIE's leverage ratio has reached an all-time low in 2023 at 1.2x. This excluding IFRS 16 impact. Since the acquisition of SAG in 2017, we maintained the momentum by bringing down the leverage ratio, while self-financing 44 acquisitions over the same period. It is a clear indication of our strong commitment to a solid and sustainable financial structure, providing with a significant headroom for our M&A strategy. This slide showcases SPIE's sound financial structure with a well-diversified debt profile, long maturities and very attractive financing conditions. As of the end of December '23, 80%, 81% being precise, of our debt is at fixed rate with the rated cost of our gross debt standing at circa 3.4% over the year. This does reflect the very attractive financing conditions we benefit from. We optimized our debt profile with a EUR 400 million in ORNANE at a fixed rate of 2%, maturing in 2028 and further demonstrated our commitment to sustainability-linked financing. SPIE enjoyed high quality at year-end with -- high liquidity, sorry, at year-end with EUR 1.7 billion available, including EUR 1.1 billion of excess cash and EUR 600 million of undrawn RCF. Our leverage ratio, at all time low, is reflecting our cash-generative model and allows for a strong credit position, upgraded to a BB+ rating. Such low level of leverage ratio will enable the group to lower the margin applied on installing facility as from 2024, this by 20 basis points, and this is in accordance with the conditions of our senior facility agreement. Moving to the recommended dividend for the fiscal year 2023. On the basis of a steady payout ratio policy of 40%, the Board of Directors will propose to the general meeting a dividend of EUR 0.83 per share. This is an increase by 13.7% in comparison to the year before. This dividend to be paid in cash includes an interim dividend of EUR 0.22 already paid in September 2023 with the remaining EUR 0.61 per share to be paid on May 16 of this year. And as per our dividend policy, an interim dividend will be paid again in September 2024 for an amount equivalent to 30% of the approved 2023 dividend. Before I conclude this section, let me mention our new reporting segmentation for the year 2024. Nuclear Services will be included in the France segment as Nuclear Services are exclusively delivered in France, and SPIE Nuclear already belongs to our French organization. Germany and Central Europe will be reported separately, Germany on one side and Central Europe on the other side. Global Service Energy, the former Oil & Gas Services, will be reported standalone. This new segmentation better reflects the evolution of the geographical mix of the group. And in order to align with the usual practice within the market, the group publication in Q1 and Q3 will report only on revenue, providing, of course, with a trading update. I will now hand over back to Gauthier.

Thank you, Jerome. Now moving to Slide 28. Let's have a look at our key figures relating to sustainability. We did make significant progress throughout '23. We are on track to reach our targets for the year 2025. However, the only KPI, which is not on track yet, it's a very important one, it is safety. We had 20 severe accident in 2023, which is up 25% compared to 2019, while the total recordable frequency rate did decrease by 20% over the same period since 2019. So not pleased with this accidents in '23, and we have a strong action plan to go back on track. But as I said, the whole safety performance is still a significant progress compared to 2019. We did progress regarding gender diversity and with an increase of 17% of women in key management positions compared to 2020. And in this regard, 2023 has been a good year since 35% of open key management positions have been staffed with women. Regarding green share, 48% of our revenue is now aligned with the EU taxonomy. This is one of the highest levels among the SBF 120. It compares to 46% in '22, reflecting the momentum in our progress linked to the long-term trends of our business and closing the gap with a 50% growth that we have set for '25. Our Scope 1 and 2 emissions have decreased by 10% since 2019. I further focus on another slide on this presentation. We also made significant progress in our Scope 3, as we reached 47% at the end of 2023 of the emissions related to our procurement made with suppliers having set themselves ambitious targets to reduce our carbon footprint by 2025. Going into further detail on our green share revenue. We've been pioneering this indicator for 5 years now. 48% of the revenue is aligned with the EU taxonomy. It does reflect our role as a key enabler for energy transition. The shift in the energy mix accounts for 21% of revenue. It includes electricity transmission and distribution services, performed on powering directly or indirectly renewable energy. Energy efficiency solutions account for 24% of the revenue, includes areas of our work for installation, replacement or maintenance of highly energy-efficient HVAC systems in buildings, technical solutions for highly energy efficient new buildings, energy efficiency in data center and also data solutions contributing to [indiscernible]. And we are 3% from low-carbon mobility with category regrouping, charging infrastructure for public transport [indiscernible], and electrical vehicles. So again, on the size of the green share, clearly asserts the fact that SPIE is part of the solution and a key enabler for energy transition. Moreover, in total, 75% of our revenue are eligible to the EU taxonomy on top of the 48% that are aligned. On Slide 30, focus on reduction of SPIE's direct carbon footprint. And obviously, 90% of our direct emission come from our vehicle fleet. So it is an important challenge to reduce the carbon footprint of the fleet. And obviously, the most efficient way is to use electrical vehicles. At this stage, we have been impacted by the delays in electric vehicle deliveries. Our purchase orders are high, and we reached 54% of fleet renewal to electrical vehicles by the end of 2023 in terms of cars ordered, but they have not yet brought on the road, but it bodes well for a significant improvement as soon as '24. Looking at our external ratings. Our ESG commitment has been recognized by leading rating agencies. So SPIE stands at top 3% of companies rated in Business Support Services by Sustainalytics. EcoVadis has consistently recognized our effort. It places us in the top 5% of companies in our sector, and we've been awarded the Gold category for the ninth consecutive year. Furthermore, CDP rated SPIE with a B score, and finally, we are rated BBB under MSCI. Looking at our people, we have more than 50,000 employees in the group at end of '23. In '23, we had a robust recruitment strategy, 6,400 new hires and 1,300 new apprentices. I would like to highlight the fact that 1,600 recruitments were made through our referral program. It's been implemented in all our countries. It proves very efficient. It's a remarkable success. It also illustrates a strong commitment and confidence of our employees in recommending their employers to possible candidates. In '23, our turnover rate was at 7%, a clear improvement compared to '22. And SPIE being a key enabler for energy transition and sharing a strong entrepreneurial mindset, it does continue to be a place where workers wish to stay for the journey as their values are welcome. They are well-trained and have good potentials to move upwards. Now the '24 outlook. So again, looking ahead to '24, we are very confident to delivery yet another strong year. We continue to deliver, obviously, further organic growth at a solid pace compared to '23. We will further increase our EBITA margin. We will continue our dynamic bolt-on acquisition strategy. It remains a core aspect of our business model. We will stick to our policy of dividend distribution with a payout ratio of 40% -- above 40% of the adjusted net income attributable to the group. And as the group has now reached its 2025 EBITA margin guidance, which was at 6.7%, and we've done that 2 years in advance, we are now upgrading our 2025 midterm margin guidance. Our EBITA margin is on the path of continuous improvement towards 7% in '25. Other targets remain confirmed and unchanged. This concludes our presentation. We will now take your questions. Thank you for your attention.

[Operator Instructions] We will take our first question from Rory McKenzie from UBS.

3 questions, please. Firstly, can you be more specific on the organic growth outlook for 2024? I understand it will moderate from the record 8% in 2023, but do you expect it to slow from the 5.5% exit rate that you saw in Q4? And any comments you have on the backlog strength would also be helpful. Then on the 2025 EBIT margin targets, and of course, we've had really good progress over the past 2 years and good to hear you can hold on to that. But can you explain or give more detail on how you expect to continue to push margins up given the past 2 years have been quite a unique environment with very tight markets and very strong demand. So, yes, how are you going to drive new records? And then finally, just on the segment change. Is there going to be any internal management reorganization around this and any exceptional costs? And can you just clarify what the organic growth rate within nuclear has been, so we know have to adjust the base?

Thank you, Rory. So well, regarding organic growth, obviously, we've given a guidance to -- until 2025 and with an average. So I think clearly to reach this guidance average, we cannot go too low in '24, and this is by no means our forecast. And so I think we are very confident for '24. You mentioned the backlog. We have an excellent backlog. And when we look at the order intake for the beginning of the year, it is strong. So again, very confident to be in line to deliver on the '25 guidance. Again, the backlog is not only on very good quality in terms of size, but also in terms of margin. We had -- we experienced very good trends in '23, which is shown in the fact that we did beat the margin guidance, so it's on the back of a very good portfolio, very good backlog, very good pricing power, which remains very strong because our services are scarce. We are good at what we do. Our customers trust us and need us, so we are really able to maintain a strong momentum in terms of pricing power. This is true in all our geographies, in all our market segments. And clearly, we keep working on the operational excellence. So really, this margin progress over the next 2 years is something where we will absolutely deliver on. Regarding the segment change, it is only a reporting matter, and we think it's clear. It also pays tributes to the growth in Germany. It also pays tribute to the growth in Central Europe. So we thought it will make it more visible and also clearer to the analysts and investor community. It doesn't entail any change of organization nor obviously, any restructuring cost. And we -- Jerome has shown that all these restructuring costs were very low in '23. And clearly, with the pattern of our market so far, we didn't have any issues with that. And clearly, this organization does entail 0 restructuring cost.

And so just to follow up on nuclear being added into France, is there any impact on, I guess, the organic growth run rate in France? What was nuclear growing at organically?

It is -- compared to the whole of France, nuclear is not new. So arguably, it would have been dilutive to the organic growth of France in '23 for the reasons we mentioned. But again, this impact is minimal. And at the end of the day, it is included in the group, so it doesn't change.

We'll take our next question from Eric Lemarie from CIC.

I've got 3, if I may. First, on the organic growth in 2023, could you give us the volume and pricing contribution to the Poland growth? And maybe could you give us an idea of what kind of pricing you expect in 2024? I got a second question on EQUANS actually, the margin improvement of EQUANS has been okay in 2023. And I was wondering if you observed any positive behavior from your competitors, including EQUANS now? And do you see any positive impact on the competition mood in the market? And the last question regarding the margin for the North-Western Europe. The margins there are below your margin in France or in Germany. How would you explain the difference of margin between North-Western Europe and France and Germany? And do you think margin in North-Western Europe could catch up with France, Germany or Central Europe?

Yes. Thank you. The price volume question is always a delicate one for us because it's very difficult for us to calculate. And so we estimate that with the inflation we did so in '23, which was a bit higher and especially on salaries, there's a higher price effect in '23 than in the past, but very, very difficult to ascertain. And in '23, our wages increased roughly 5% average across the group. We think in '24, it looks like it's going to be 3%, 3.5%. And so obviously, you see a bit of a difference there. But for the price impact, there's not only inflation, there's also pricing power. And I think you'll see this pricing power reflected in the margin increase. So regarding EQUANS, yes, the behavior is much better, thank god, so it's -- it reflects on the margin progress, which is not significant, still some way to go, but at least it's a good trend. And yes, the behavior on the market is much better. And it is similar when you look at our other competitors like EQOS Energie, which we see as also a good trend regarding margin, reflecting very good behavior on the market. So we do benefit in that sense of a more favorable environment, people are aware of the scarcity of resources. And at SPIE, we really focused on choosing our batons and working for the right type of customers and on the right type of contracts, not wasting our good workforce on the low profitability contracts. So this is something that is now more spread amongst the competition, and we do welcome that very much. Regarding North-Western Europe, we'll have further progress. And clearly, we have a very, very good pattern in the Netherlands. And basically, the Netherlands alone are on par with France and Germany, and so around 6.6%. Belgium, well, it's smaller, on a different market. And this is where we still need to improve going forward. And so confident for the North-Western business going forward, especially a remarkable performance and trends in the Netherlands, which is also reflecting in the cash generation.

[Operator Instructions] We'll take our next question from Augustin Cendre from Stifel.

I've got 2, if I may. The first one is kind of a follow-up on margin. I'd like to understand where the opportunities might come from in the next 2 years and the timing also of that margin expansion, maybe you could talk there about the margin opportunities you see in Germany in T&D. And you could maybe also elaborate on how much North-Western Europe could represent in that margin expansion at the group level. The second question relates to working capital. You've reached a negative 37 days this year from negative 38 days last year. It's now been 4 years with very strong working capital. Is that 37 days the new normal? And as a second question on working capital, do you benefit at all from prepayments coming from new contracts?

So Jerome will take the question on working capital. Regarding margin opportunities, as I said, we didn't make good use of our pricing power. Going forward, there is also -- there's a further focus. As I mentioned, there are still some areas of progress, I mentioned a few. Germany will progress further, definitely. It's -- we have excellent levers in terms of operative improvement in Germany, and they've shown a very strong pattern, but they still have plans to improve further. And on top of that, at group level, there will also be some impact on the relative acquisition we've done last year or at the beginning of this year. So I have really no doubt regarding further margin progress, both from -- stemming from organic improvement plans, which are at work now and relative acquisitions. And Jerome?

Yes. Regarding the working capital, I would -- we always had a question whether there is a normative number of days, so as to set the working capital going forward. I constantly said, and it stays very true, that the ultimate goal is rather to focus on the cash conversion. And to that respect, in '23, we highlighted again, and we posted a cash conversion well above 100%. So when you read the 37 days, bear in mind as well, what I explained in the presentation, meaning the increasing value of 1 day of working capital, which in 2023 was a quite sizable increase. So there is no fixed number of days being normalized, there is a trajectory and which is very well as such. Regarding the structure of the working cap, yes, we did benefit from prepayments from our customers, as always, and this on a permanent basis. But I would even specify that at the end of December, that amount is rather below what it might have been already in the past. This is heavily depending on the sequencing of some contracts at the time we start the ramping up on some contracts. I do insist on the very high-quality of the working cap at December end, also posting a slight reduction if we look at the number of days of our accrued income, the WIP. And it went together with also a slight reduction in the trade payables. So a very good starting point for 2024.

[Operator Instructions] We will take our next question from Laurent Gelebart from BNP Paribas.

I have a couple of questions. So the first one regards France and the backlog, so could you share with us how do you see the backlog evolving for France? And maintaining that because we know that FTTH or FTTX in France should go down, should decline, so how is evolving the rate of [indiscernible] activity? And also, are you positioned on the decarbonation projects being sponsored by the state? I'm referring to, for instance, ArcelorMittal, which is set to invest billions to reduce the CO2 emissions of its facilities. So how do you see potential for you on this one and other decarbonation projects in France?

Thank you, Laurent. Regarding the backlog in France, it's very good. I mean the FTTX decreasing is a minor thing to us. And it's now more than compensated with the growth in recharge infrastructure for vehicle and which is absolutely booming. And we had also a very good order intake in the Industrial segment. So basically, the backlog is good in France and both in terms of volume and quality, so no concern in this regard. I think the whole of SPIE is involved in decarbonation projects and of all kinds as evidenced in our green share. And we are involved in some carbon capture and storage projects in France. We are involved in hydrogen projects as well. We are involved in wind farms in France. We are a good player in solar energy. So it is -- and as you know, at SPIE, we focused on the large number of smaller projects as the one large white elephant type project. And so where it usually is a prestige project and not necessarily the most margin accretive. So yes, decarbonation is a huge driver for France and more generally for Europe at the moment.

Thank you. We have no further questions in the queue. [Operator Instructions] We will take our next question from Christophe Chaput from ODDO.

Christophe Chaput speaking from ODDO, and congratulations on the results. Just a quick one for me because you speak about FTTH in France. There is as well as I know, opportunities on FTTH in Germany. Would you say that it will be visible, let's say, under your organic growth for 2024? I mean, I'm just looking at the pace of ramp-up in a certain extent.

Well, we -- in Germany, we do -- at the moment, we do roughly EUR 100 million in FTTH, FTTB out of a business, which does roughly EUR 3 billion, so, obviously, it is a contributor in terms of organic growth. Germany is lagging behind in terms of FTTH. And for us, we have done -- a few years ago, we have done a small acquisition in this regard, the WirliebenKabel. And it's clearly something we're looking at. There's still a huge potential in Germany for -- in favor of fiber compared to the maturity of the French market today, and Netherlands are probably in between, and Germany is way behind. So clearly, for us, in terms of organic growth or further bolt-on opportunities, it is an area of strong interest.

There are no further questions. So I will hand you back to your host to conclude today's conference. Please go ahead, sir.

Well, thank you very much for your attention today and for the interest to -- you take to SPIE. We'll endeavor to further deliver in '24, a lot of opportunity for the year, a very strong starting point and very good momentum, so very confident on '24. And again, it's a great time to be an electrical engineer. Thanks a lot.

Thank you for joining today's call. You may now disconnect.