SPIE SA ($SPIE)

Welcome to the SPIE 2026 First Quarter Revenue Presentation. [Operator Instructions] Now I will hand the conference over to Gauthier Louette, Chairman and CEO, to begin today's conference. Please go ahead.

Good morning, everyone. Thank you for joining us today for our first quarter revenue call. I'm with Markus Holzke, the CEO of SPIE Germany, Switzerland, Austria; Jérôme Vanhove, our Group CFO; and Alexandra Bournazel, our Head of Investor Relations. As you know, Markus will become Group CEO as of April 30, and I'm very pleased to welcome him on this call. On the M&A front, SPIE has made a strong start to 2026. Underlying trends remain fully intact and are even strengthening as the current geopolitical crisis further highlights the urgent need for Europe to transition to low-carbon electricity. Let me start with safety, which remains a core commitment for the group. Next Tuesday, on April 28, SPIE will hold its Safety Day 2026. Safety workshops will be organized all across our sites in all our countries. Safety is a continuous training effort. Our health and safety code and its 10 life-saving rules apply to everyone across all trades and activities, making sure that every employee returns home safely each day is at the very heart of our commitments. Next, I'd like to share a few recent contract examples that reflect our strong positioning. In Germany, we have been mandated to install 5 new substations for transmission system operator, TenneT, a long-standing client relationship built on sustained trust. The framework agreement runs for around 8 years. Implementation is scheduled to begin in summer 2026 with phase commissioning continuing through to the end of 2033. The award of this contract highlights SPIE expertise as an implementation partner for complex grid infrastructure projects and demonstrates how the structured approach is helping to accelerate grid expansion and the energy transition. In France, SPIE built on several years of successful collaboration with ALK, a Danish pharmaceutical laboratory, covering both maintenance operations and clean room construction. We completed an electrification project for the plant located in Vandeuil, in Marne. We replaced gas equipment with electrical solutions, installing heat pumps and new electrical infrastructure, allowing the site to reduce its CO2 emissions by nearly 305 tons per year while also improving its energy performance. This contract illustrates the ability of SPIE's team to combine the skills to offer bespoke multi-technical solution while supporting both performance and decarbonization objectives. In the Netherlands, we entered in a new multiyear maintenance contract for Hutchison Ports ECT in the Port of Rotterdam, a site where we have been leveraging our expertise over many years. The contract covers all electrical maintenance activities at the ECT Delta and in the Euroromax terminals, including inspection and high-voltage servicing of more than 200 cranes as well as the installation of 7 strategically located EV charging hubs to support the energy transition across the Port area. With this contract, SPIE reinforces its role as a trusted partner to support the energy transition, valued for its ability to incorporate sustainability requirements into maintenance operations. Now moving on the key highlights for the quarter. on Slide 8. Total revenue grew by 1.7% at constant FX, including minus 0.9% in organic growth and 2.7% of M&A contribution. We made an exceptionally strong start to the year on the M&A front with 4 bolt-on acquisitions in Q1, representing approximately EUR 667 million of acquired annual revenue across our core geographies. With a solid balance sheet, continued focus on operational excellence and financial discipline, we reiterate our strong confidence in achieving our 2026 guidance. On the first quarter, organic growth was hampered by a stronger-than-usual impact from seasonality, which was more than offset by the contribution from acquisitions. Both Germany and Northwestern Europe faced a very demanding comparison base with organic growth of 7.2% and 7.5%, respectively in Q1 2025. Central Europe as well as Germany were also temporarily impacted by adverse weather conditions during the first weeks of the year, but will gradually catch-up over the coming quarters. During the quarter, the internal transfer of the former ROBUR non-German operations from Germany to Global Services Energy and Central Europe has no impact at group level. Overall, this performance once again demonstrates the resilience and balance of our multi-local multi-technical model. In Germany, revenue grew 1.2% year-on-year and organic growth was flat against a high comparison base of 7.2%. Outdoor activities, in particular, High Voltage and City Networks and grid were affected by adverse weather conditions at the beginning of the year, but we have secured operational capacity to ensure that we catch up on this over the coming quarters. Beyond the short-term seasonality effect, the underlying momentum in Germany remains very strong, driven by sustained demand for energy efficiency solutions and solid positioning in fast-growing segments such as data centers, cybersecurity or cloud and managed solutions. In Industrial services, our performance was supported by recurring maintenance operation and our pertinent exposure to attractive end markets such as automation, logistics, food and pharma. The PIK and Cyqueo acquisitions completed last year contributed close to 6% with integration progressing well and the internal reallocation of the former ROBUR non-German operations to Global Services Energy and Central Europe had a minus 1.4% impact with no impact that we see at group level. France on Slide 11, France delivered a solid performance in Q1 2026 with 1.9% total growth, of which 0.6% organic. As expected, City Networks and Building Solutions continued to weigh on overall growth. City Networks remained impacted by the slowdown in mature fiber optic rollout programs, while Building Solutions reflects both a degree of macro-related customer caution and our disciplined selective focus on high-value projects. The other 4 divisions, Technical Facility Management, Industry, ICS and Nuclear Services continue to perform well, supported by long-standing client relationships and a diversified sector exposure. In particular, Industry benefited from the fast-growing renewable and battery storage markets where ICS leveraged strong positions in cloud, cybersecurity, digital workplace solutions, data and AI. Lastly, Nuclear Services performed strongly, driven by high-quality execution of maintenance programs, notably the Grand Carénage. The Artemys acquisition completed at the end of January 2026 contributed 1.3% to the growth. Northwestern Europe, the total growth was slightly positive at 0.3% despite a minus 0.9% organic growth against a demanding comparison base in Q1 2025 of plus 7.5%. The organic decrease was more than offset by the 1.6% contribution from the 2025 acquisition of Rovitech and Voets & Donkers. In the Netherlands, project-driven activity in Building Solutions reflected a degree of seasonality with several larger contracts recently launched and set to contribute more meaningfully as they ramp up over the coming quarters. ICS delivered strong growth, capitalizing on its strengthened position in data center services and the contribution of recent acquisitions. Industry Services remained resilient, driven by energy storage and advanced technologies despite structural pressure in the petrochemicals. Belgium also had a slower start to the year against a high comparison base, notably in High Voltage services, while the order book continued to show strong momentum. In Central Europe, total growth reached plus 7.5%, while organic growth was minus 8.2% as adverse weather conditions in the first weeks of the year weighed on outdoor activities such as high voltage, telecommunications and transport infrastructure. This disruption were, however, short-lived and production is expected to catch up progressively over the next quarters. The backlog continues to build up, supported by strong investment dynamics linked to the energy transition. Bolt-on acquisitions contributed to growth by 13.2%, reflecting the sustained M&A activity of last year and also the internal transfer of former ROBUR operations located in Austria, which contributed to an additional 1.4%. And finally, Global Services Energy. It was down minus 4.4% year-on-year, including minus 4.1% organic. In an already challenging backdrop for oil and gas activities, operations began to be affected in March by the outbreak of the conflict in Iran, which did lead to the suspension of certain ongoing maintenance contracts in Qatar and in Iraq. In wind activities, momentum remained strong. The business was expanded through the internal transfer of the international wind operation, formerly ROBUR Wind from SPIE Germany. It brings around 600 new colleagues and approximately EUR 14 million of annual revenue, ordering the offering across the full life of wind assets and adding maintenance capabilities for wind turbine generators and [indiscernible] related. Regarding M&A, as I said earlier, SPIE kicked off the year with an outstanding level of M&A activity, announcing 4 acquisitions and adding EUR 667 million annual revenue. In Germany, SPIE signed agreements to acquire ROFA Industrial Automation Group and SGS. Markus will elaborate on this. Executed at a high single-digit EBITDA multiple, both acquisitions are expected to be accretive to adjusted EPS from the first year of consolidation. SPIE also expanded its footprint in Central Europe through 2 acquisitions, contributing a combined EUR 57 million of annual revenue. BLOCK Group in the Czech Republic is a recognized specialist in clean room design, engineering, procurement and construction. INVIZO in Slovakia is a provider of building security system and smart technical solutions. All these 4 acquisitions will be self-financed in line with SPIE's disciplined financial policy and commitment to maintaining a sound leverage profile. This acceleration of our M&A activity reflects the group's continued focus on high-value technical services and its proven ability to execute selective, high return bolt-on transactions. And now I will hand over to Markus for a deep dive into the German acquisition.

Thank you, Gauthier, and good morning, everyone. ROFA Industrial Automation Group is a leading player in industrial services in Germany with EUR 430 million in revenues in 2025 and a sustained high single-digit margin. ROFA brings leading capabilities in industrial automation, conveyor systems and intra-logistics with more than 1,200 highly qualified employees. This acquisition will enable SPIE to move further up the industrial value chain while adding a resilient diversified customer base across automotive, food, health care, logistics and pharmaceuticals, providing significant cross-selling opportunities for SPIE. At the bottom of the slide, you can see a selection of well-known blue-chip customers. And moving over to the acquisition of SGS Industrial Services. SGS will strengthen the group's expertise in electrical and mechanical installation for power facilities and industrial plants. The company generated EUR 180 million of annual revenues in 2025 with an EBITDA margin slightly north of 10%. SGS employs 800 skilled employees who can be deployed flexibly to meet project-specific requirements. Together with a diversified client base, this broadens SPIE's value chain and creates additional meaningful cross-selling opportunities. ROFA and SGS will significantly reinforce SPIE's industrial services platform, building on the successful integration of ROBUR in '24. And as Gauthier mentioned earlier, both acquisitions are expected to be accretive to adjusted EPS from the first year of consolidation. The closing of these 2 acquisitions is expected before the end of June 2026. And with that, I will now hand over to Jérôme.

Thank you, Markus, and good morning, everyone. Let's move on to the revenue bridge, which provides a breakdown of our 1.5% total revenue growth in Q1 2026. Our bolt-on M&A activity contributed plus 2.7% or the equivalent of nearly EUR 65 million. This reflects, on the one hand, the contribution from the 2025 acquisitions, mostly notably SD Fiber in Switzerland. Voets & Donkers and PIK AG. And on the other hand, the 2 months contribution from the 2026 acquisition, Artemys in France following its closing end of January 2026. The minus 0.1% disposal impact reflects the sale of the small noncore elevator service business in the Netherlands, which represented an annual revenue of circa EUR 7 million. The former ROBUR non-German operations previously reported within SPIE Germany were internally reallocated into 2 blocks. First, the international wind activities representing approximately EUR 40 million of annual revenue were transferred to Global Service Energy. Second, the industrial activities based on Austria -- in Austria amounting to around EUR 10 million were transferred to Central Europe. This internal reallocation is, of course, and as said already neutral on the total group revenue. Currency effect had a marginal impact of minus 0.2%, mainly driven by the euro-U.S. dollar exchange rate and partially mitigated by the appreciation of the Polish zloty against euro. Thank you for your attention. I now hand back to Gauthier.

Thank you, Jérôme. And moving on to our outlook for 2026. So we do fully confirm the 2026 outlook that we shared at the beginning of the year. We expect strong total growth driven by further organic growth and active bolt-on M&A, which will contribute significantly from this year onwards. We have no doubt that the EBITDA margin will continue to expand. The proposed dividend payout ratio will remain at 40% of adjusted net income attributable to the group. Today marks my 44th and last presentation of SPIE performance. And more than ever, it is a good time to be a European electrical engineer. Following our AGM on April 30, Markus will take over as the new CEO of SPIE. We have worked closely together for more than 13 years, and I'm fully confident that he will lead the group to great successes. I would like to thank you for your continued interest in SPIE and for the quality of our exchanges. Thank you for your attention. And now Markus, Jérôme and I are happy to take your questions.

[Operator Instructions] The next question comes from Remi Grenu from Morgan Stanley.

Just I mean, 3 on my side. So the first one would be on the impact of weather in Q1. So if you could potentially help us a little bit quantify what was the impact, so we can try to assess what was the underlying business momentum. And maybe as part of that discussion, it could be helpful to hear a little bit about the organic growth in March and the exit rate, which I guess was probably less impacted by the weather. So that would be the first topic. The second one is on France. It seems to be doing a bit better. So where are we in terms of growth within Building Solutions? Is it back to kind of flattish trend or still negative? And on the fiber rollout there, do you expect -- when do you expect the drag to completely disappear? And then the third topic, just taking maybe a step back, I think, you made some comments back in '22 and '23 that higher oil and gas prices were pushing clients to invest in energy efficiency, electrification and back then you -- SPIE was benefiting from that. So given the current context, is it something that you would expect to happen again? And do you have any discussion with clients that would support that view basically?

Yes. Well, thank you, Remi. Regarding weather, it was during the first weeks of the year, particularly in Germany and in Central Europe, we see in Poland, people told us these are worst winter in 10 years or more than 10 years. It also had some impact elsewhere, but to a lesser extent. It's obviously linked with the proportion of works we do outdoor. So typically, high-voltage distribution works are impacted. But also when you have areas where civil works contractors get delayed, then we have to come after them, obviously, they create some postponement as well. But it's something that is obviously behind us. And coming to your point, we did see a distinctly stronger March, that's for sure. The important thing that we were able to save capacity by way of holidays, trainings, so we managed to save productive man hours for later, which will help us catch up on this delay in the beginning of the year. And that's something that has been done very efficiently in all countries where we operate. Regarding France, there's still a drag from optic fiber and it's is going to be less than last year, but it will further create a drag this year, and it's possible that it will plateau next year. We're not sure yet. Regarding Building Solutions, we are in negative growth territory and we are very selective in terms of order intake, and this was the case we see last year, which with an impact on the revenue this year. But we are -- when we are selective, it means we target interesting projects, a bit more sophisticated, with more and more demanding customers in terms of quality and intricacy of what they do. And it means it's a better margin. So I think the important message for Building Solutions is that we managed to protect, if not progress our margins further. And I think it's good that you mentioned the trend. And clearly, the war in the Gulf is a stark reminder of how important it is to move to electricity. As you have seen in France, the government has issued a plan to foster further electrification of the country and we still have a very significant usage of fossil fuels. And it's a trend that we see with all our customers. So it is only further reinforced by the current events. But if we look at Industrial customer moving from gas fired furnaces to electrical ones, we see a lot of work with regard to heat pumps, et cetera. So it's a major concern. We see quite a surge now also in the electrification of fleet and so with an impact on the recharge point network. So it is a very positive trend, which will only be reinforced by the current events. And that's something where -- which will create a headwind for SPIE going further.

And just congratulations on the fantastic job you've done at SPIE over the last few decades.

Thank you, Remi. It's always a team effort.

The next question comes from Aleksander Peterc from Bernstein.

I'd also like to extend my congratulations to you, Gauthier, for your excellent stewardship of SPIE over the years and great success here. Just a couple of things from me. The first one, I'd just like to come back to France. We had this nice surprise with the return to year-on-year growth. Was there anything outstanding in the first quarter that drove this outperformance? Or should we now model growth for France at the like-for-like level more confidently in positive territory for the rest of the year? And the second question, just on the recently announced acquisitions, there's quite a lot of them. Can you tell us if they altogether will have a positive contribution to group EBITDA margins already this year or next year?

So with regard to France market, it is -- there is nothing really outstanding in terms of a peak in a project or something for the start of the year. It is a very normal course of events. And we mentioned the parts which have been helping such as technical facility, such as Nuclear, which has a positive trend. The year is still young, so I will not make any guess on the organic growth for the whole year. We see, as I said, positive trend in some areas, but we see also on other areas, customer with an element of cautiousness. So early to say how the whole year is going to shape. And with regard to acquisitions, altogether, they do create some margin variation. We have to see when it happens over the year, depending on the exact timing of closing. Specifically, the last year acquisition in Australia, Worley, which is Worley Power Services and which we plan to close hopefully by the middle of the year. This one is dilutive. It's dilutive to group, but it's also dilutive to the oil and gas or the GSE segment. But overall, positive impact.

The next question comes from Christophe Chaput from ODDO.

Again, I wish you the best for the coming months and the coming years. The first question is on EBIT margin. So your guidance is obviously an improvement for the full year. But would you say that H1 is going to improve as well because it probably depends in a certain extent on the level of catch-up. In Q2 you are going to make regarding the weather condition because the high voltage, let's say, could create a kind of negative mix on profitability in H1, I assume. So I just wanted to check that. By the way, regarding the weather condition, I'm not sure you quantified in terms of EUR 1 million, the impact on top line regarding the Q1. If you can help us, let's say, in that respect, it could be great. And the last one is regarding the life pipeline of M&A. So obviously, you signed a lot of deals year-to-date. Usually, the life pipeline represents an amount of sales of EUR 400 million, EUR 500 million. What -- how much it represents, let's say, actually after, again, the fantastic deal you signed in H1?

Thank you, Christophe, and thank you for your kind words. With regard to EBITDA margin, we -- even with this impairment we had on the first quarter, we're not worried about the margin progression over the year. And as you have seen in the past, it tends to be fairly continues over the year. So we do not expect H1 to be affected -- H1 margin to be affected by the slower start to the year and definitely not. Yes, I didn't quantify weather conditions because it's not easy to do. And -- but again, I think the main thing is to see this ability to catch up over the rest of the year, thanks to the capacity saved. And that's really something we are very confident about. And maybe for the pipeline of acquisitions, Jérôme, you say a word?

Yes. Definitely a strong start to the year, as you noticed, Christophe, but not making our pipeline empty, not at all. It does not pertain only to what we could do for the rest of the year 2026. We also have in the pipeline some very interesting targets that might generate concrete realizations for '27 and beyond. So again, we still benefit from the heavily fragmented nature of our market, constituting all along the year, new opportunities to come.

[Operator Instructions] the next question comes from Allen Wells from Jefferies.

Just 2 quick ones from me, please. Firstly, maybe just in France, you've talked about obviously being selective given the challenges in the Building Solutions business for a while. But can you remind us the negative growth seen in the first quarter, is that sequentially an improvement? Or is that still getting worse versus maybe what we saw in the second half of last year? I'm just trying to understand if this is getting better, is it getting stable or if we're still seeing headwinds in that market? And then secondly, just in the Energy business, could you just maybe just expand out what the exposure is to the Middle East within that business and how you think about the potential impact for the year? And then maybe linked to that, is there a chance of catch-up in that business as we move through the year should the conflict end? Or are there kind of capacity limitations that may prevent that?

Allen, thank you. Well, with regard to Building Solution, it's -- again, as the quarterly organic growth for a given division has its limits in terms of meaning. But yes, we see an improvement compared to where we were for the whole year last year in this first quarter. So -- and again, it's on the back of the work we did last year to really focus on interesting contracts, and we didn't have a bad order intake at all at the end of the day last year. So we're at a gradual -- it is so far an improvement compared to last year, definitely. With regard to Middle East, our overall exposure is in the range of EUR 100 million. It is euro. So it is in Qatar, in Iraq, in Saudi and a bit in Abu Dhabi. So we have demobilized fairly swiftly with good understanding with the customers. So first, we have paid on standby and then we demobilized some of the sites. Nobody has been hurt at SPIE, which is also obviously very important. We are in talks with customers. Some of them, they want us to stay. And for instance, in Iraq, we work for Total, and we are staying working at some -- preparing some works for or doing some sort of maintenance right now. In other areas like in Qatar, we did demobilize the site. So it will have an impact on the top line at least in H1, obviously. And then it's early to say what's going to happen next. So we are following this, obviously, on a day-by-day basis. It will be difficult to catch up per se. I think in this range, in this field compared to what we had for the winter in Europe. I think what is lost is lost and because it's maintenance. So you tend to do the same amount of maintenance with the same amount of people. So there might be a bit of need to restart the operations to a bit more people, but it will not be very significant. In terms of margin, this is not the best area for our oil and gas activities, Middle East. So the margins tend to be in the mid-single digit compared to the rule of oil and gas. So the EBIT margin is not significant at all. The EBIT impact for [ these are significant ].

The next question comes from Eric Lemarie from CIC CIB.

I got 4 questions, if I may. The first one on weather. I was wondering if you have been over pessimistic regarding the impact from the weather, notably in Germany, the consensus expected minus 2% in organic and it was flat. And actually, I was wondering whether you had any positive impact from the weather for some of your activities at it was -- it is the case for VINCI as the group mentioned last night. I've got a second question on GSI. Could you tell us maybe the split between oil and gas, wind and solar and the trend for this market in Q1? Because you mentioned notably a strong momentum in wind activities, but -- maybe you can tell us an idea of the growth there in Q1. Third question on the German stimulus package. I was wondering if you have any new comments on the way you see the potential impact of the German plant on your business? And the last question on Markus. I was wondering what will be your priorities and what will be -- what will you do differently compared to Gauthier in your view?

Well, I would be hard put to find a positive impact of the weather conditions. We -- I think it's not that we've been over pessimistic about the weather impact. I think we have been positively surprised by the strength of catch-up at the end of the quarter. So that's mainly that and that's as an overall picture. Oil and gas and wind and renewables, the split is roughly 90-10, so 90% oil and gas, 10% renewable, which is mainly wind. We have a few operations for maintenance of solar plants in Qatar, but it's mainly wind. And yes, the start to the year has been good in our wind connect activity. So the former Correll acquisition, we had a good start to the year, which is linked to the schedules of the various projects we're involved in. So we -- I won't give an organic growth by subsegment, but we had a good start -- definitely a good start in wind. And maybe for stimulus package, I will hand over to Markus.

Yes. Thank you, Gauthier. Well, the stimulus packages, they are supporting the sectors where we already work in. So for us, it is always hard to identify, is it an additional project or is it a regular budgeted project. The authorities, they do not necessarily tell us. But we see an increased pipeline in these sectors and also an increased number of won orders. So we already see some effects within this year. And then I'll take the fourth question right away regarding priorities and what am I going to do differently. First of all, I'm completely honored to be able to take this role, and I have a deep respect for what Gauthier has done over all these decades. Working 13 years together with Gauthier, he has been a great role model to me. And I am a child of this compounder model of SPIE. So what I've done over the last 13 years is visible in Germany and Central Europe and Switzerland and Austria. So the priorities, you can see as well from these periods. For me, there is no reason to change. That is the first fact. And from the priorities, I got a good view on the territories I was touched on in the past. And now for me, it is to get a very detailed view on the geographies where I had less exposure so far.

There are no more questions at this time. [Operator Instructions].

All right. If there are no further questions, thanks a lot for your attendance this morning. Thank you for your interest in SPIE. Do not forget, it's never been a better time to be a European engineer in electricity, and the yet -- the best is yet to come. Thanks a lot. Have a good day.

Thank you, ladies and gentlemen. That concludes our call.