Vinci SA (VCISF) CEO Xavier Huillard on Q2 2016 Results - Earnings Call Transcript

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Vinci SA (OTCPK:VCISF) Q2 2016 Earnings Conference Call July 29, 2016 5:00 AM ET

Executives

Xavier Huillard – Chairman & Chief Executive Officer

Christian Labeyrie – Chief Financial Officer & Executive Vice President

Nicolas Notebaert – Executive Vice-President, VINCI Concessions; Chairman

Jérôme Stubler – Chief Executive Officer

Pierre Coppey – Chief Operating Officer & In-charge of Concessions

Analysts

Grégoire Thibault – Natixis

JeanMoulenq – CM CIC Securities

Virginie Rousseau – Oddo & Cie

Josep Pujal – Kepler Cheuvreux

Nicolas Mora – Exane BNP Paribas

Elodie Rall – JPMorgan Securities

Olivia Peters – Joh Berenberg, Gossler & Co.

Gregor Kuglitsch – UBS Ltd.

Andy Jones – RBC Europe Ltd.

Xavier Huillard

Well, good morning to you all. Thank you for taking us, perhaps taking some of your holiday time, but no rush to get away because there are going to be lot of people on the roads. Before presenting our first half financial highlights I'd like to say that our consortium with CDC and Predica are pleased to be shortlisted to operate Lyon Airport. We're ready to get down to work very swiftly with the economic community and the elected representatives of the Auvergne region in order to roll out an ambitious industrial project drawn up during the course of the competition.

As per usual, we will give no additional figures or costed item on this transaction before the closing sometime in the autumn that's what I understood from Pierre yesterday, but I would ask after our presentation with Christian, I'll ask Nicolas Notebaert to briefly present these two platforms and to say a few words about our ambitions on these two airports.

I'd also like to take this opportunity to add there's absolutely no conflict of interest between the Lyon and Paris airports. This is what we demonstrate on a daily basis through the expansion of a few airports that we have such as that of Nantes. The great thing about the airport sector is that each airport can expand significantly and irrespective of competitive problems between them, there is room for everyone.

Turning now to our first half financial highlights, I would like to live-in up the presentation for photographs. The first photograph is one taken under to the CNIT in the La Défense business district. It's the underground Eole station that we won, €500 million. Some of you who don't understand how it operates from a structural standpoint will have an opportunity to question the global leader in engineering and structures, who is Jérôme, he knows exactly where the cables are located to ensure that the structure remains upright.

The next shot is the A9 to Montpellier. This is a very complex project on the connection of the two extremities, but the fact that the construction underway of the Nîmes-Montpellier high speed line, done by Bouygues. Next, an exotic shot that's one of the six airports of the Dominican Republic that has nine that we took over since April 2016.

The next photograph, we wanted to show you because it's a fine illustration of our expansion, international expansion, Auckland, New Zealand also great demonstration of our network expansion opportunities that are at play within the group, because barely had we acquired the company Electrix that there was an issue of lighting provision in Auckland. We had an opportunity of exporting to New Zealand the concept that we developed extensively in France, which is that of the PPP that allows through public lighting provision to fund the maintenance and renewal of the urban lighting provision by building on energy efficiencies over the long-term. So, we're able to implement this operational synergy very swiftly after the acquisition of Electrix.

Next, a snow scene in Slovakia, the D3 motorway between the north of Slovakia close to the border with the Czech Republic and Poland. Next a quite extraordinary architectural structure, which is the Cité du Vin, Bordeaux that was opened jointly by Alain Juppé and the French president a few weeks ago. We show this picture, it's to illustrate the fact that our business is really leveraged by technological developments. The digital modeling without which we wouldn't be able to build such complex structures and we also made great use of wooden structures here through activities that we have in the wood sector at VINCI Construction.

And then the Chernobyl containment shelter, this megastructure is almost fully assembled. We are currently performing the tests and we expect that in November to push the arch over the reactor that you see in order to ensure that the nuclear reactor is fully confined, the reactor that exploded just over 30 years ago.

And, lastly, a recently won contract, that's quite an amazing project of an immersed tunnel between Denmark and Germany. This is an artist's view. The works haven't actually begun yet. Extraordinary because 18 kilometers immersed on the seabed is not very common, also that the mode of implementation is a matter of prefabricating tunnel sections on land and to float them across to the sea where they're going to be immersed. And then, we connect the segments to build the tunnel through which vehicles and the train will pass. The project is not going to start immediately because it's still waiting a number of administrative and environmental authorizations from Germany.

Turning now more specifically to our first half financial results. Things went as expected or even slightly better than expected with total revenue just down by 1.5%, better than excepted traffic growth, airport traffic that still remains buoyant with a slight recovery of growth at VINCI Energies on a like-for-like basis. Still contraction but expected a revenue year-over-year in VINCI Construction in particular in France. However, good order intake of 11% on the half in order to improve our order backlog over 12 months. Confirmation of construction, homes 24% growth of bookings at VINCI Immobilier for the residential construction segment, 120 basis points increase of EBIT, and 12.4% of net income after tax, with a slight increase in temperature is normal at this period. There is seasonal effects on our gearing. All this reflects once again the strength of our business model.

Going into greater detail, Concessions up 6.1%. VINCI Airport traffic is up close on 12% in Portugal. What we're seeing is attractiveness of this country notably from a tourist standpoint isn't slowing. It's maintained at a very high level. But also good traffic levels, in France up 5.7%, Cambodia just under 5% and the Dominican Republic coming in at 7.3% growth. These are the airports we're consolidating.

Good traffic on the co-controlling airports, with partners, 7.7% growth achieved in Japan, and 11.5% growth in Santiago, Chile. Consolidated revenue of VINCI Airports is up 18.6% on the half. And what we do the math if we, add Lyon today on an annual basis, where on, in terms of number of passengers, we're talking 125 million passengers annually. So, we're continuing on the fine trend initiated a few years back.

On motorways, Autoroutes traffic levels got slightly better than expected, 2.9% growth on the light vehicles, 5.2% for heavy vehicles, revenue slightly up more thanks to the tariff increases that occurred in February through the implementation of the agreements booked last year as part of the package involving also the motorway stimulus package.

A special mention for an event that was very impactful, the floods that started on one of our motorway sections on the May 31, just to say without going into detail here that we gave a clear demonstration of our responsiveness and the hands-on operational attitude of our teams that managed this very exceptional episode quite remarkably. And then the motorway stimulus package now is kicking in. We've opened a number of initiatives including that of A9 between Perpignan and the Spanish border that was inaugurated yesterday by Pierre Coppey with the president.

If you're interested, Pierre Coppey can say word about that later because the French president took advantage of this to make announcements as to his wish to work on constructs identical to what we did in the first stimulus package in order to continue to allow the concessionaire companies to work in terms of modernization and development of our country.

Next, we signed the Strasbourg bypass, the A355. We're starting the design study and works. As you know, we are shortlisted concessionaire on the A45 for a motorway section between Lyon and Saint-Etienne. This is an interesting chart just to show you that in terms of the pre-Lehman crisis level, light vehicles are clearly above, up 13%. However, heavy vehicles that account for a third of our receipts are still below the traffic level that we had pre-Lehman crisis. So, basically, we'll have had a decade, lost decade in terms of growth on this heavy vehicle segment.

Turning now to a contracting overview, it's more of a mixed bag depending on the business and the geography, an expected decrease of 3.6%, but it varies by segment. VINCI Energies, as I indicated a moment ago, has seen a return to growth 0.4% like-for-like, but 3.4% on an actual basis given the recent acquisitions or the full year effect of the acquisitions in 2015. Acquisitions, you'll recall APX for information technology, J&P Richardson in Australia, and slightly further back Orteng in Brazil.

VINCI Energies has quite significantly improved its EBIT margin. Of course, the EBIT margin 5.5% doesn't reflect the full year margin because VINCI Energies has a better track record, but it's an improvement over the first half of last year. Eurovia. Eurovia is still struggling in France, but our sense is that things are improving as the new teams put in place after the local elections are now ready and on the move in order to kick start a number of investments. And so it's quite likely that we've reached the low point for road construction in France, which is obviously good news.

Eurovia also benefits from the ramp up of investments in terms of the rail infrastructure renovation projects with the announcement a couple of days ago, five firm years plus two optional years to overhaul 200 kilometers of rail per year with the devices that can both replace the ballast and lay the new track in order to renovate rail infrastructure, some of which were beginning to post real operational difficulties.

Still on Eurovia, business is holding up well in a number of countries internationally, good in the U.S., in Chile, Germany. However, there's a cyclical weakness in central Europe probably due to the fact of phasing in the rollout of structural funds were coming to the end of one phase not quite at the start of the new phase so there's a dip between two investment plans funded partly by the European structural funds. Eurovia made a few acquisitions. It acquired a rail works business, Rail Cantech, in Canada and acquired the 50% minority interest buyout in Bitumix Chile.

EBIT in no way reflects the full year EBIT. It's traditional in roads for weather reasons for EBIT to be negative during the first half. The good news that it's less negative this year than it was same time last year. And that augurs well for full a year EBIT in 2016.

VINCI Construction is also struggling some in France, where business is sharply down minus 11% after 14% reduction in 2015 over 2014. But VINCI Construction is also suffering in the oil and gas business through Entrepose Contracting for obvious reasons, that is that all the oil and gas majors have sharply cut their CapEx and will not resume, but we're going through this rather tricky investment trough at VINCI Construction, also causes difficulties in Africa, not in terms of profitability but of accessible volume because that large part of Africa lives on commodities and oil resources. So, VINCI Construction down 7.9% in spite of the integration of HEB acquired in New Zealand a few months ago.

Just a brief word in terms on the quality, our sense on VINCI Construction in France is that small business segment is still there though the very big deal seems to have resume there being the Paris region because of the Greater Paris Project that is giving lot of work to design offices, and that should lead to projects where things are hurting is the segment of medium-sized deals or transactions. So, they're pretty mix bag in France depending on the region because it's all down to knowing whether there are big projects that will offset the related weakness of medium-sized transactions.

Good news is order intakes in the half is good for contracting, up 11% over the same period last year, particularly visible at Eurovia and VINCI Construction leading us to build with a slight lag what we were saying six months ago that we are truly reaching the low point of the trough, maybe already reached Eurovia and still possibly to be reached in the coming months at VINCI Construction. But, given the lag effect, it won't prevent us from booking business reductions in 2016, but the order backlog holding up well which would indicate that things are stabilizing into 2017 and the out years.

Second point to be noted is the international expansion. When you look of international expansion on the half, were up 41.3% international business out of the total group business. And if we focus on contracting, we're closer to 47%, in other words, close on half of our contracting business is outside of France and that's in line with the strategic roadmap that we've been following for some time now.

That's what we can say about, all this is that, the world is a convulsing and we need to remain extremely selective and keenly prudent. Over to Christian before coming back in a moment to tell you about our forecast for 2016.

Christian Labeyrie

Thank you, Xavier. Good morning, ladies and gentlemen. I will fill-in on what Xavier said about revenue, I would emphasize that.

Our two divisions saw contrasting variations. We had organic growth in Concessions of 6% and a decline of 4.7% in Contracting. There are scope effects in both cases. In the Concessions we're mainly looking at the acquisition of AERODOM and this is the consortium company for the Dominican Republic reports from 2016. And in Contracting, we have 2015 transactions that are coming into full effect in the first half of 2016. And we are completing the projects in Brazil and also with VINCI Energies and acquisitions in 2016, such as the Australian company Rail Cantech at Eurovia. These scope effects account for 2.3%, which basically offsets the decline in organic growth.

We basically will be in breakeven if we haven't had foreign exchange impact, which is negative this year since euro has appreciated. This is what happened last year and, therefore, the conversion into euro of the revenues of some of the subsidiaries produced a lower result. Hence the 1.2% decline, the euro has gone up against all currencies including sterling apart from the U.S. dollar, which remained more or stable. So that's what we can say about revenues for the first half.

Regarding operating income, it is up by €180 million approximately 12%. This is a very good result, broadly achieved through concessions plus €175 million of VINCI Autoroutes. VINCI Autoroutes has seen its EBITDA rise both in percentage terms and in absolute amount. The increase in the operating income is not reflected in expenses increases, which were kept under control and the impact of the first time of the voluntary non-recurring contribution that we accepted to agree to pay to the states as part of agreement reached last year.

And looking at the operating income and the EBIT, there's additional positive impact, which comes into play, as you know, which is lower depreciation, lower amortization and overall extension minus and nonrecurring contribution. This has a €56 million contribution in Contracting. We should emphasize strong performance of VINCI Energies. The percentage increase is not what we're expecting for the year as a whole because as you know we have seasonal fluctuation in our results.

It's even more visible with Eurovia, which displays negative variation, but this reflects the fact that our revenues do not match our fixed cost and the things come back into line in the second half. This is an increase of 50 basis points. It's not very clear on this slide, but a 50-basis point increase in the margin of Eurovia on its revenues in the first half.

Slight disappointment for VINCI Construction down 10 basis points in the margin in the first half. That does not reflect what we expect for this year as a whole, but it reflects the fact that very often when we have a disappointment in our projects then we book provisions and then they will be written back and things will improve. This applies to our French business, which has to adapt to a strong decline in our business irrespective of order intake, which is spread over time, but we have to adapt to a strong decline in activity over the past two years. VCF, as Xavier said, we have the decline in volume in Africa, Entrepose and in our oil related activities. Our teams have managed to ensure the recovery of the British subsidiary, which is pretty much at breakeven in relation to the recovery pattern presented.

Next, looking at the income statement, there's not a great view to be said. There is a decline in the contribution from equity method subsidiaries and Japan has contributed positively and with depreciation in Russia on the Moscow-St. Petersburg one concession. There are also poor results in some of the Contracting subsidiaries in construction in particular internationally.

We should emphasize the financial results, which seems flat, but in actual fact, there is an improvement in the financing cost, which reflects the fact that we have benefited from the fact that we have floating rate debt to the tune of 40% with the corresponding decline in interest rates. And apart from the short fall, the net result is positive and we include interest expense on AERODOM whose debt has €450 million or euro equivalent with interest rates which have nothing to do with what we're accustomed to here in Europe. But we are going to very quickly seek to reduce that interest expense on AERODOM by setting up new financing packages.

So tax is up in absolute terms, but down in relative terms. Absolute terms is reflection of the fact that our profits are up, and the lower interest, lower tax rate is the calculation of the super tax of 10.7% on the corporate tax. In France, the overall impact is from 37% to 34% on the tax rate. So the net income is up €100 billion as a result, 12.7%, and earnings per share following the same trend.

Looking at the cash flow chart, the group's net debt is up on the first half, up to €2.5 billion over a rolling 12-month period. Half of the increase, €2 billion increase is due to acquisitions to the tune of €1 billion, Dominican Republic, Japan acquisitions in Contracting. But the major part is acquisitions in Japan and the Dominican Republican is not over yet, because apart from Lyon, we're working on other projects and do not expect a decline in net financial debt. But 10 years ago, we had a €16 billion debt, so we still have plenty of room for improvement.

We have paid out a €700 million dividend, which is the balance for 2015 and the rest to account for the difference, different items, a commitment to buy back shares in the third quarter, which to the tune of €150 million, and the rest is operating cash flow, which pre-investment is positive by €600 million, €250 million less than last year given the variation in our working capital requirement, and concessions were €700 million, so cash flow is around minus €30 million for the first half of this year.

Investment is mainly due – concerns mainly Concessions VINCI Autoroutes with the re-launched package even thought this is not significant for the first half because Pierre and the President have just inaugurated the motorway between [indiscernible] and Spain. Working capital requirement is up but in the wrong way, but that's normal at this time of the year. In the past we had WCR variation which are much higher. I recall that we had cash coming in last year in large amounts, much more than we expected in some of the Central European countries and maybe some customers are basically waiting for at the beginning of 2016. These are advances that we were given, which have been used up subsequently. So, this is quite normal and this accounts for the fact that the gap between WCR variation this year and last year is €1.1 billion, but this does not prejudge results for the year as a whole.

The next step is the balance sheet, consolidated balance sheet. We have the increase in our investments, our assets in Concessions, representing €1 billion. The positive WCR, it's resource, but that accounts for €1 billion, so that's the €2 billion I was referring to. Equity is stable and net debt is up by €2 billion and this €2 billion increase breaks down between the €700 million increase in gross financial debt and €1.3 million decline in cash. This is mainly due to the using of Contracting in WCR.

The increase in gross financial debt is the building of AERODOM to the tune of €450 million and the rest of the difference between refinancing and redemption of ASF debt. We have two new financing transaction to ASF, which you've seen, number one, a public €500 million issue over 10 years with a coupon of little of less than 1% with a Euribor of minus 37%. The all-in rate is less than 40 basis points which is very cheap for 10-year maturity and we've done even better than that on the second €390 million transaction which is an EIB financing, amortized over 17 years and this has been drawn down in yen which has enabled us to cover the cost of our investments in Japan.

So it looks pretty good as a quality borrower. We have fully benefit for the completely atypical situation on the financial market. That you can see top left is well spread over time. We're going to refinance all this quite calmly together with our investments, 4.5 years average maturity, 3.51% average cost. 40% of debt is at floating rate and our credit rating has been reviewed by Moody's. At long last, they've will line themselves on S&P. S&P had already given us an A-minus rating, and this applies to Moody's, so we're not going to have a split rating.

We have the same rating with both agencies. We have a better short term rating with Moody's short term, that's a bit surprising, a P-1 rating. We still issue commercial paper on negative interest rates. Available cash is still very high, €2.7 billion of net cash, plus €6 billion unused bank facility, which is very good and stock buybacks which offset the issuance of new shares and we're continuing to buy back gradually our stock and we have a mandate for this for the third quarter.

And finally, I'd like to commend our teams both at VINCI Concessions and at VINCI SA, who have worked very, very hard on two major complex transaction, number one the finalization of Kansai Airport's financing approximately €2 billion upfront financing. Bear in mind that the financing is spread over 40 years to the Japanese state. We have to finance a deposit. So, €2 billion financing, ¥1.5 billion borrowing in yen of 30 years, and Santiago Airports $200 million, half financed in four different currencies, which is quite difficult to do especially in the present context in Latin America. All this is just being finalized this week so we're not going to work on the Dominican Republic. Thank you very much.

Xavier Huillard

Thank you, Christian. Just a few brief quotes on outlook for 2016. We're in line with what we said six months ago. In Contracting, the good news is what I mentioned that is to say order intake holding up well, sharply up and, therefore, good improvement in order book, but with the lag effect obviously, we continue to anticipate a slight business dip for contracting overall essentially at Eurovia and VINCI Construction for full year 2016.

For motorways in France, traffic levels will continue to hold up well, but let me point out that the comparison basis of H2 2015 will erode the growth of 3.3% seen in the first half. What we currently expect is the traffic full year at VINCI Autoroutes should be of the order of 2.5% that is slightly better than what we expected six months ago.

Airport traffic levels will remain dynamic between 5% and 10%. It's a broad range, but difficult to predict. The only thing we can add is that on a number of our geographies such as Portugal in particular, the summer season, the holiday season is very important and the initial signs are very encouraging. All this factored in leads us to confirm what we stated, that is full year a slight reduction in revenue and increase in EBIT and net income which has led the board, which met yesterday, to not propose, but decide on an increase of the interim dividend to be paid in November that will go to €0.63 per share up slightly over 10% compared to the interim dividend paid out last year.

Before we move to the Q&A and as I announced, I'd like to hand over to Nicolas Notebaert, who will say a few brief words about the airports in Lyon.

Nicolas Notebaert

Well, good morning to you all. So let me just remind you that our consortium, the acquisition of 60% of the shares of the airport the controlling stake held by the state, a consortium, where we hold 51% with CDC [indiscernible] Predica 24.5% long-term partner and we know well so, we're really in a position of controlling interest and obviously, we want to work with all these partners, as well as the Chamber of Commerce and local authorities.

It's a fine asset both through its geographic location at the heart of European flows with a lot of land allowing for expansion through 2014. It's an industrial asset, which we like because what we worked a number of years in France and elsewhere is to grow traffic levels to leverage traffic potential where there's clearly an issue that we can focus on and the potential of the second largest French region in terms of GDP traffic mix as both business traffic, tourism traffic with the Alps as a winter destination, good tourist diversification throughout the year and to visit friends and relatives, that's a very balanced mix, balanced between arrivals and departures.

And lastly, we consider whilst being competitive because we are on these airport acquisition projects throughout the world. We've arrived at a very reasonable price for an asset of this quality. This growth, obviously, we're going to work a lot on quality of service, leading to improved service for our passengers. And as you've seen in Portugal over the duty free retail business, and if you know this, there's obviously continuous yield upside, we're going to work that with the management teams, working with top-notch teams. We successfully ensure the transformation of these assets in France and elsewhere, and this will be a success.

We're very pleased to find potential, a momentum that we will continue over the coming months, and as we've demonstrated for a number of years now in smaller airports have at Nantes and [indiscernible] we believe we're well placed to boost business on this type of airport in France, as we've done elsewhere in the world, in Portugal and more recently in Chile and Japan.

Xavier Huillard

Thank you. Any questions?

Question-and-Answer Session

Q - Grégoire Thibault

Grégoire Thibault from Natixis. I hope, Jean-Christophe won't begrudge me speaking before him. He didn't raise his hand. Okay. So, I got three questions, maybe start with the disappointments on VINCI Construction, VINCI Construction, the margin still decreasing slightly over the year. You mentioned that you have an uptick of 100 basis points per year. Can we stick to that, yes or no? What are the ways and means that you're putting in place in France, notably to improve the margin of VC France are there subsidiary combinations, things like that? That's my first question.

On the Lyon Airport, you say there's no conflict of interest. Some are less categorical than you. I say let's do some political fiction. Let's say, you obtained more than 8% of Paris airports. Are there problems in terms of competition or conflict of interest if in a few years down the road you manage both ADP and Lyon?

Third question, the disposal of the remaining 25% stake in VINCI Park, it hasn't yet closed, but was it done at financial conditions identical to those to the initial 75% two years ago? I should have let Jean-Christophe ask the first question.

Xavier Huillard

Sure. Jérôme and Nicolas, you can correct me if necessary. VINCI Construction is a combination of three cyclical difficulties: one in France, I'll come back on that; two, Africa, I've spoken about it; and three is everything related to oil and gas, right. What this means is that apart from that, everything's fine, but we have three key issues to face. In Africa, the method is quite simple. We apply. It involves the following in a simultaneously accessible volume. We can't make up the volume. We're convinced that this will come back. But we have to be patient, because it depends on commodity prices and the main thing is to adjust our tools to the available resources as quickly as possible.

We've always had very good results in Africa, even though margins are going down, which is normal when you have lower volume. But the margin applies, of course to a base which is much lower in volume terms, because in some countries we have declines of more than 50%, in some cases 70%. So this is very harsh. It's under control, but of course, it has an impact on profits. Oil and gas, it's a similar problem. It was very sudden. The majors stopped investing virtually overnight and to go judging from what I've heard from the French major, we're not too far away. We have to be patient for the next year or year and a half which is when the majors expect a cyclical turnaround, and that means we have to be in a strong position when oil prices start to go up again.

In Entrepose Contracting, we were fortunate. We had a very good transaction on pipes. It's called Trans Adriatic Pipeline. This represents for VINCI €700 million. That's not going to generate a great deal activity this year because we're still in the study phase. Am I right, Jérôme, in saying that? Four months of project in 2016, right, and the real issue is VINCI Construction in France, it's a very big structure. What have we done? Well, we've changed the casting and the organization in a very radical way, we've changed the – replaced the bosses on VINCI Construction France, and we've reallocated responsibilities in order to have people who were much more focused on project productivity and to group projects so that each production site could have the engineering offices, value engineering studies in order to work in good conditions.

So the structure is being set up. I am convinced that this new structure will enable us to implement recovery. But you have to be a bit patient because we're still at present in the process of implementing transactions that were probably dealt with in the previous period, and we have to implement these transactions in order to ensure recovery. I was perhaps a little bit ambitious talking about 100 basis points last time. I'm convinced that we'll go back to margin levels similar to what we had few years ago, but it is going to take a bit of time. But the important thing is that we've taken action in managerial terms, reorganizing things to have the appropriate structure.

Jérôme, do you want to add anything to what I've just said?

Jérôme Stubler

If we can have a micro? I think you basically said everything, but I can just shed some light on this on the order book of VC. VC's order book is on an N plus one basis up 3.1%, and on N plus two up 30% compared to last year and 23% compared to last year. So, this means that hysteresis will, as we'll see in the chart, we think that the low point should be achieved in a few months' time and there is a mechanical rise that will happen due to the increase in the order book.

On the second point, Aéroports de Paris, there are at times conflicts of interest between VINCI and ADP on international sites for example and this sometimes brings me to not take part in some parts of meetings when Aéroports de Paris is talking about an aspect where VINCI Airports is competitive. But I repeat there is no conflict of interest between the Paris platform and the platform in Lyon and even more so in Nice.

As for your question earlier, we are accustomed to having sufficient ongoing projects to stop asking ourselves questions on issues that aren't really relevant. So, there you have it. Let's see what happens. Many things can happen. Given the strong emphasis on the airport business over the past few years. You have dynamic in the next two to three years but maybe other opportunities, new opportunities, which means that we may find excellent opportunities elsewhere in the world in order to ensure our growth. So, we have to be a very open minded about opportunities and we'll answer that question when that question actually arises.

Nicolas, did you want to add something? No, okay.

Xavier Huillard

On VINCI Park, I think I should give some detail. We did not dispose of 75%. It's 100% of VINCI Park and we reinvested in a new structure with a partner. That's important because the accounting treatment is not the same, we have 23.7% stake in a new company, which I think is called [indiscernible] and that's the stake that we're selling. This still has to get the approval from the computational authorities because it so happens, but our partners both of them, [indiscernible] and Predica have car parks elsewhere. They have a portfolio as concessionaires of car parks and this is going to take a certain period of time, we don't know how long but it will take a few months, I'm hoping it will be before the end of the year, but this is not depend on us.

So, if there is a capital gain, it cannot be compared with the original capital gain, it has to be compared to the investment probably two to three years ago. So, yes there will be a capital gain, but it will not be the largest the one you may have in mind from previous figures but it will have a positive impact of a few hundred million euros on our cash position. Thank you.

I'll now give the floor to Jean-Christophe. The microphone is on its way.

Jean Moulenq

Two questions, one on VINCI Construction to continue on what Grégoire Thibault was talking, and second question, I guess, it's now on VC. Apart from the organizational problems, there are specific things, there are losses in some regions, there are losses in Paris in particular, losses on some projects on [indiscernible]. Are these losses going to decline in the second half? Is it too early to answer that question given to where we are on specialized construction on and waterproof construction? What about the traffic on the A86 with the ramp up of traffics at the beginning of the year? Thank you.

Xavier Huillard

Well, I suggest that we start up with the second part of the question and then I'll give the floor to Pierre Coppey, who will talk about the inauguration yesterday.

Pierre Coppey

Good morning, Jean-Christophe. And so, I thought there was a vehicle missing. You must have taken public transport. So we have average daily traffic in the first half, which is up by 5.8%, and this pans out to 33,611 vehicles per day, and we had a peak of 42,176 vehicles, which shows that this is a record. Traffic is continuing to grow satisfactory. Is that good enough for you or do you want me to carry on?

Jean Moulenq

Could we make it differentiate between business days and weekends?

Pierre Coppey

Well, we have traffic on Sundays, toll at €12 and peak traffic on Friday, those do not have a negative impact on traffic on Fridays at 5:00 PM and our special price for night traffic between €2 to €6, €1.5 has not had any impact on traffic. We are delighted that the flooding of the [indiscernible] tunnel, which is upstream with the impact on drainage did not lead to flooding of the A86 tunnel, is that, okay?

What about inauguration yesterday, the laying of the first stone of the President of the Republic came yesterday for the major re-launching plan for motorways between [indiscernible] It's a €180 million project and when answering was I – my comments on the fact that in France we have 100 dossiers approximately, infrastructure dossiers which required financing.

He said, he announced the launch of study by the Ministry of Transport with the concession as the different new plan that may either be a traditional plan or a re-launch plan. We're talking about big things, small things. The scope of the project will be discussed in a very near future, because he also announced that he wanted this plan to come into effect on the January 1st, right.

Xavier Huillard

And I'll go back and answer the first part of the question and my answer will be very simple. We have never given any details project per project. It's true we do have difficulties on some projects and it's true that cyclically the A92 is a difficult structure but which is not under control.

And on specialized construction, can we give a mic to Jérôme who is sitting in the front row? Thank you.

Jérôme Stubler

In revenue for the first half, the small decline in revenues simply reflects the foreign exchange impact and we still have very good order intake. The order intake is €1.8 billion and this is for – this is an annual activity of €3.1 billion, we took very good orders, booked very good orders in the first half. We have an excellent portfolio with a pipeline and projects, and which bodes very well for the next few months with momentum across the five continents, so the international strategies our specialized business is really working very well.

Xavier Huillard

Excellent. I'll go to the back of the room. Otherwise, we're going to forget them.

Virginie Rousseau

Hi, I'm from Oddo. I have a quick question on motorway concessions and on the impact of the bad weather in May, June. We have the traffic impact so [indiscernible]. Have you had some one-offs exceptional counseling to these events?

Pierre Coppey

No exceptional or no one-off costs linked to that.

Xavier Huillard

Next question, please.

Unidentified Analyst

Yes. Hi. [ph] Bryan Garnier. Three questions on this stimulus plan that you've signed with the state – the motorway stimulus plan when we look at the map that there is a lot of widening projects, and do you plan – when you do your own traffic modeling, are you expecting some upside on traffic levels from the motorway widening project?

Xavier Huillard

Yes. Well, put differently increased traffic levels was such that without the widening we'd have created bottlenecks that would have slowed the traffic. Our policy isn't supply driven. We just try and keep pace with them.

Unidentified Analyst

And second question, can you perhaps remind us, it was released at a time, could you perhaps remind us the toll factors between light vehicles and heavy vehicles and the toll increase?

Xavier Huillard

So there's a factor of three between light and heavy vehicles and their increase.

Unidentified Analyst

Final question on the order book. What's your sense regarding the underlying margin levels of contract of margins in your order book?

Xavier Huillard

I'd answer by saying that, discipline is now well shared, it's always been there at VINCI Energies and Eurovia that's clearly the best pupil in the class, at least in France. There may well have been a few failings in terms of stringent business selection at VINCI Construction two years ago, shall we say, all that is now behind us.

And, Josep, you have a question.

Josep Pujal

Hi, from Kepler. Two questions from my side. On this possible new stimulus plan announced yesterday when the first stone was being laid to the first stretch as you just indicated of stimulus plan that took three years to be negotiated – four, I stand corrected. Do you really believe the things are going to move that fast and if so what leads you to think that and if were that to be the case, it would be that they'd be stacked up all these projects, one on top of the other, the two stimulus plans or would we wait at the end of the first plan before launching the second?

My second question concerns this big SNCF networks contract that you cited earlier. What size of contract are we talking about? Are you alone in the consortium? If there is a consortium, what's your share in the consortium?

Xavier Huillard

Okay. I'll ask Pierre to answer the second part of your question. On your first question, obviously we live in hope and, of course, what's important is to realize to put the message across this message that we've been putting forward for years is that motorway concessioners can be particularly efficient vehicles to contribute to development when the public authorities can't always keep pace with the needs of the various regions. So obviously, we're going to get down to work with the authorities, with the transport ministry. And then of course, we can't possibly give you any specific timeline today, which is beyond our control.

Pierre, I don't think we can add anything further to that. What's important is that we need to talk about it. Pierre?

Pierre Coppey

Well, difficult to answer specifically your question because these contracts to renew tracks and today we don't know nor does the SNCF French railway know where the various sections to be renewed are located. It's sort of a framework contract over the five years with a possible two-year extension. We can give an order of magnitude of the size of the work, it's about €100 million per year, maybe slightly more, slightly less. And we're in a consortium notably with [indiscernible] which is a French railway company based in Toulon.

Xavier Huillard

Thank you. Next question.

Unidentified Analyst

Good morning. I have two questions, if I may. Number one, regarding margins in Contracting, we saw that where it was, an increase of 10 points in energy and a few points in roads, can this be extrapolated to the second half? And my second question, regarding development, you presented, made a presentation on airports, during the Investor Day sessions. You showed us a map with some potential developments. Can you perhaps provide us with an update on possible developments at VINCI Airports and also in the other divisions?

Xavier Huillard

Regarding margins in the Contracting business, the key point is the trend. You cannot extrapolate mathematically. What the important thing is the trend and the signs at VINCI Energies are not set in stone as 5.6%. We can still improve by a few basis points, and what comes out from Eurovia is that the margin for Eurovia for 2016 will be at least as much as for 2015, that's the trend, but we cannot make any mathematical calculation on this.

Nicolas Notebaert

Now for Airports in future, well, this is Nicolas. What we've done corresponds to the map over time in the virtual space of time. We had a Greenfield operation in synergy with VC major projects in Chile, and I think this is one of our distinguishing features. We're very flexible, which enabled us to find a very interesting partnership in Japan, and as Christian has said, the lowest interest rates were closing that we can have in the Japanese market with a very high increase in traffic launch, it was an excellent transaction.

We also executed a transaction in the Dominican Republic, and so as you can see, the maps that we're showing you display different forecast. We're probably the airport constructor, the operator that has a great diversity in geographical terms in terms of our capital investment, which is very flexible. Now, the following transactions in these regions reflect this of course. And we have various opportunities, we have to be competitive, that's key, and we always do this with a view to achieving profitability and efficiency in the operating model. So these regions reflect the map of one year ago. And of course we continue, as Xavier Huillard was saying, many other opportunities in air traffic, but our figures are well above the dynamics of the transport sector. You can't just talk about airports the whole time. We're also monitoring as we prove not only Greenfield transactions, but we're looking brownfield or yellowfield transactions in the motorway segment outside of Strasbourg. I can't say very much more at this stage.

Xavier Huillard

Yes.

Unidentified Analyst

Good morning. Barclays Bank. Three questions if I may. Number one airports. A few details on this. I'm a little bit confused about the new scope. Can you give us some information in terms of the revenue contribution regarding AERODOM? I think, you signed an agreement for Iranian airport. When is this going to be consolidated? And how does this impact the main aggregate figures? And what is the contribution to the net income of Chilean acquisitions in the first half and Osaka and Chile? And also non-recurring cash outflows in the first half for the year as a whole even though this is a difficult forecast, but what is the likely variation in WCR for VINCI? And last point on guidance, are you keeping your guidance unchanged or is it being revised upward on airport and motorway traffic? Does this mean that your expectations for Contracting have been revised downwards, or is this your usual prudence?

Xavier Huillard

Well, the first question regarding airport, you will have the answer on AERODOM on the online document we posted this evening. We have to give information when we consolidate a new company. I don't have the data with me. It will be public this evening. We don't give any details, entity per entity. Otherwise, you'd be asking us for details on every single entity we have. And we don't give any detail of contributions per asset or per country.

Now on WCR, I recall that last year, it's always difficult to give a WCR snapshot. But last year, we ourselves were surprised by an inflow of in excess by €300 million of what we expect. So last year's cash flow was probably higher by €300 million than we expected. This €300 million reversed this year or will be reversed this year, unless the customers empty their coffers every year, but it's difficult to anticipate that. We may well have €300 million less this year. We'll see what happens, I have no idea. And we just – we follow our WCR on a monthly basis, but we cannot follow it on a one year basis.

So you didn't – right, now on Iran, a major contribution, I suppose. Chile is not huge, but Osaka, we have a three month contribution for Japan. It's positive but it's only for three months. It only covers three months. Now on Iran, it's a bit better than our forecast. We have the traffic up by – as we thought, the traffic momentum and the base effect are extremely positive. We can communicate on traffic but not on the results.

On Iran, you'll recall the what we've signed is a memorandum of understanding, in which we have a specific timeframe to draw up in conjunction with the Air Force Department of Iran, a master plan and potential financing model for the renovation and extension of the terminals of [indiscernible]. So, that's where we are. We cannot be sure that this will materialize as a contract, so there is nothing in terms of contribution as we speak and all this is against the backdrop of difficulties that are not yet have been completely overcome with regarding the injection of funding into that country and, furthermore, we are really quite cautious.

So, on guidance, our guidance, broadly speaking, is the same as last time and you, in your analysis, you drew some conclusions from this including for motorway traffic. So I think what I said is probably in line with what you yourself have said. So it's seems we're gradually coming to an agreement on the figures. Next.

So, there are no questions in the room. I have questions over the phone. So, we can move to questions over the phone. Let's start with a French question. We take the three questions in English, so the questions in English because generally we don't – yeah, okay, I've got my headset. First question in French, yeah.

Operator

So, question in French from Exane BNP. Over to you.

Nicolas Mora

Hi, everyone. I have a few questions. Starting with the equity method. Maybe just to explain to us the pretty sharp drop between last year and this year, so what comes from one-offs and what comes from lower profitability of subsidiaries more structurally?

Secondly, on international contracting, France is holding up well. Actually, we see a dip in the quarter of the order intake, is that beginning to worry you or is it once again cyclical and we can expect an improvement as we go into 2017?

And third point on roads. The performance for the first half was good in terms of margin. We see volumes are holding up well in France, prices are trending well, maybe see an improvement in Central Europe in the second half. Can we now expect a sharper improvement in the margin full year over last year?

Xavier Huillard

Thank you, Nicolas, for that question. I'll take the last two to allow Christian some time to answer the first question. On international contracting, Jérôme will correct me if I'm wrong, internationally aside from [indiscernible] we're talking businesses of relative size, so you have quarters where you're lucky and you can book some and then there are some quarters where you're less fortunate, you book fewer deals, so you need to smooth that over time. And of course, as Jérôme points out that we haven't booked the significant fixed link in Denmark, the subsea fixed link between Denmark and Germany for the reason I indicated that this deal isn't especially positionable over time. We signed a deal. We don't have the green light to begin construction work because still waiting on green lights from Germany from the regulatory and environment authorities. It can take a few months. We don't expect to book it in 2016 in our order book.

On roads, let there be no mistake when I mention Central Europe, I don't expect a recovery and improvement of orders in Central Europe in the second half. The dip due to the phasing of European structural funds will take a little more time than that to kick in operationally. So, it's not a mid-term problem, but we can't expect that it will be material during the course of the half.

And then, Nicolas, your second statement about roads, also applies to volumes, that's to say that, in France we're more optimistic than we were a few months back regarding maintenance in euros of road business in France, but price levels obviously will have to wait a little longer to see prices tick up. The contractor obviously always afraid of being short and needs reassurance over the mid-term before he can boost his margins.

Over to Christian who's had ample time to prepare himself to answer the first question.

Christian Labeyrie

Yeah, a simple question, the answer is slightly more complicated. I'll try and keep it simple. The bulk of the difference of the contribution, firstly, I mean it's split across many units, but the bulk of the variance comes from one-offs, be it depreciation of certain stakes or termination losses on certain projects, the variance, the gap that's about €50 million. Over three quarters comes from those items, but I mean, there's some loss attritions here and there but we can't keep consequence on the sustainability of that trend. CFE is in a phase of a drop in earnings this year in the first half given the dredging business, very strong. Those of you who follow CFE, exceptional dredging last year because we had to complete the widening of the Suez Canal, not the tunnel, the Suez Canal, that's an explanation, there are many others like that.

Nicolas Mora

Okay, and if I may, just a follow-up on real estate, contribution was pretty low during the first half, we know that it can be pretty volatile depending on the volatility of sales promotion. We're expecting the beginnings of an improvement with the improved order intake at the end of 2014, can we still expect a gradual improvement in margins and revenues in the second half of 2016 going into 2017 and 2018?

Xavier Huillard

You're very sharp eyed, so there is a one-off on VINCI Real Estate, because we had a return to better fortunes on an old dispute that's now behind us, so that's a positive in the first half and that represents the gulf or the gap between the earnings of VINCI Real Estate this year and last year. Another point you need to bear in mind is that we property developers on sales, the bookings before when the customer signs to buy an apartment in a building, but then of course that reservation most lead to a notary deed and we mislead that minimum booking of reservation rate of 40%, 50% before legally launching the development, because if we sell one apartment in a building, we are duty bound to deliver it.

So before launching the project we ensure that we have 40% of the apartments booked even more if these bookings are in the increase, so this impacts on the notary deed, but the bulk of the business is taken run of the river with time, so there can be quite a several months lag effect between the property developers promoting on the number of apartments booked, the order of 25%, 30% and its actual reflection in revenue that sometimes bookings order are cancelled. It's not the case currently because there's been a change in the tax scheme for them to be – it takes time, but it will be reflected. And then in VINCI Real Estate there are also offices, commercial real estate or even hotels or businesses, but there are a few, about a dozen year. There's a phasing issue there, so we're on a growth trend, but it unfolds over time in light of the items mentioned.

Operator

Second question in French that's arrived. Yes. We have a question from Elodie Rall from JPMorgan. Over to you.

Elodie Rall

Good morning, Xavier. Two questions. First of all, I'd like to go back on VINCI Construction's margin. It was slightly down, and 100 basis points improvement is going to be ambition. The low point is still ahead of us possibly. With all the restructuring that you have conducted in France, can we hope that margins will increase between 2016, and 2015? That's the first question, and number, two regarding dividends, we know that your dividend policy is longstanding, 50% payout unchanged, but is that a shift in this policy given that the earnings generated by the Concession business has increased in recent years or is the 50% mark set in stone?

Xavier Huillard

Thank you, Elodie. I'll give a very simple answer. There is no intention to change our 50% dividend or approximately 50% dividend payout policy. That doesn't mean that it will never happen over the next 10 centuries, but we continue to implement that particular policy, firstly, because I think it's good to be consistent and further, and I often say this, we have other stakeholders in particular our employees, the representatives of employees, the trade unions vis-à-vis, these other stakeholders. It's very important to have a consistent policy. We managed to explain to them, we don't necessarily get their full support, but we managed to explain to them that salaries are kept under control, when dividends are up. When you explain to them that dividends are up when results dropping, it will be much more difficult to explain the same thing if the payout were to increase at a time, when we intend to contain salaries, keep them under control. You have to be very careful about that.

Regarding the margins of VC, I think we've already dwelled on this at length in our previous answers, Elodie. I don't really see what I can add to what has already been said or maybe I didn't understand your question. But what we said earlier about the fact that the low point will probably be reached in the next few months. I was referring to volume, what we said earlier, is that measures have been taken, not only in France, but also in two other areas, Africa and in the oil and gas sector to be in a position firstly, to do business on a selective basis and further to do business with an even stronger focus on productivity methods controlling are on productions and these measures have been implemented but they will require a bit of time before we see significant improvements in margins with the goal of this happening in medium future.

Operator

Right now, we have three questions in English that we will take now. We have a question from Olivia Peters from Berenberg. Madam, please go ahead.

Olivia Peters

Morning, everyone. Olivia Peters from Berenberg. Three questions please. The first one, and I'm sorry to get back it, is on VINCI Construction, specifically the French business. I wanted to get a sense of how long it will take a less profitable contract to unwind, and also to understand a bit more what has actually gone wrong in that business. Is it that the market has become open structured and therefore tendering has moved to single phase tendering rather than dual-phase tendering , or is it more of a lack of discipline on VINCI Construction France's behalf and poor execution?

Secondly on VINCI Constructions France, do you see the normalized margin at 4%? I think that's what you delivered in 2012. And on my last question, just in terms of pipeline of M&A activity. One thing if you can split this out roughly in percentage terms between the proportion that you bidding on in terms of brownfield, yellowfield, and greenfield? Thank you.

Xavier Huillard

Starting with your last part of your question, we don't have a ratio of targets in terms of yellowfield or brownfield. We respond to opportunities and we select issues when it's in countries with partners with whom we feel at ease. So, I can't answer to your question as to the split between the yellowfield and brownfield because we are, shall we say, more opportunistic than that. What's certain is that our differentiation in terms of some of our peers globally is better expressed when we're in greenfield or yellowfield mode. When it's pure brown field and when the assets boils down essentially to a financial equation there, we are opposite funds who can be more aggressive than we are as to the way they price the value of the asset. But as soon as the either enlargement works, residual works, all the works involved in a greenfield project, there we can fully express our full model by bringing in our contracting activities.

On the construction margin here again, I have a sense that we've pretty much covered this. I mean, what happened basically is the following that when you're in a period of declining growth of the cycle descends, you're faced with three issues. The first is your responsiveness when it comes to adapting your work capability in terms of the new market reality. If you wait for too long, then obviously you are not able to cover your fixed cost during the period that you've untailored your capability in terms of the new market reality.

Secondly, when the market shrinks, you have kind of psychological effect that kicks in the industry across countries, which is contractors fearing that they're going to lack business. So their teams tend to reduce their market margin pretentions and perhaps more aggressive in the way they can acquire their self-contracting teams. So, if you have the managerial structure that's overly optimistic then you're going to address deals that are under pressure.

Third factor, that's also more psychological, when times are tougher, your customers are less forthcoming when you offer the necessary claims that affect construction projects. When clients are more euphoric, you can more readily obtain changes to your contract. So, it's to factor in the inevitable changes that are typically same contract. So, in tougher times you have clients who are tenser and are slightly more tight-fisted than euphoric times and it's a combination of these that explain the difficulties that we have at VCF and in those cases, require a radical change in a mindset through a pretty significant change in castings and managers at various levels, that was the case for us.

Thank you. We take the next question please.

Operator

The next is from Gregor Kuglitsch from UBS. Sir, please go ahead.

Gregor Kuglitsch

Good morning. I've got a few questions. The first one, can I just come back to Dominican Republic. Can you give us, I understand we're going to see some details later on, but perhaps you can help us a little bit with the sort of annual run rate of EBITDA for instance or revenues, for example, and then maybe more qualitatively, is a quite a short concession of around 15 years. Can you perhaps give us the logic of what your plans are for that business, perhaps to lengthen the concession or anything else that you had in mind when you acquired it?

The second question is on Lyon I understand, you will have effective control. Can you just give us perhaps a sense of whether that means you will actually be fully consolidating this business or whether that will go through the equity method? And the third question is on the CapEx on motorways, a note on your slide 40, and I compare it to the previous guidance on CapEx, it's come down, reasonably substantially if you added up over the year. So, I want to understand what's going on there, to what extent that just basically is a shift out or whether that you've actually managed to take down the costs estimated to conduct that CapEx. Thank you.

Xavier Huillard

Okay. The EBITDA on the Dominican Republic, you don't give it – okay, you don't give. Okay, that was an easy one. Don't worry, we're in a conclave here, just bear with us. Dominican Republic, Nicolas is going to answer.

Nicolas Notebaert

So quality wise, one of the advantages of this deal, is that we consolidate with a company that's well managed, it was held by a fund. It also diversifies our traffic mix and traffic passenger origin. It's a very North American market. We won from the Japanese, Chinese, Korean for Kansai. Here, we have a lot of North American markets in dollars to the Dominican Republic, so it gives us a passenger mix with different regional GDPs and different currencies, so we're talking U.S. dollars with a lot of North American passengers. Trends are good because it's also a key factor. The global tourist market is even stronger than business traffic growth today. We see this in Portugal, we see it in Japan, and obviously we see it in the Dominican Republic, that's a stable country organized around tourism, so interesting growth outlook there, not to mention possible changes in the contract itself.

Christian Labeyrie

Let me add to Xavier before handing over to Pierre. That on Lyon we consolidate the asset because we have 51% or 60% on Lyon, on the CapEx run rate in the concessions. It depends both on the pace of progress of authorizations in projects depending on the price level market trends and it's impossible to monitor that, but we generally see that we're slightly down versus the announcement not to give you any better prices.

Gregor Kuglitsch

Thank you.

Xavier Huillard

Thank you. Final question, please?

Operator

As your last question is from Andy Jones from RBC. Sir, please go ahead.

Andy Jones

Thanks for taking the question and just two please, one of them on Lyon. I understand this is a single till regulated asset, but I was wondering if there's scope for it to become a dual till asset in the coming years?

And secondly, a question on slide 13 regarding the heavy vehicle traffic. Is this something that you still expect to recover? Or do you view this as a structural change as the nature of kind of supply change have seen more goods moving smaller vehicles rather than heavy vehicles? Thank you.

Xavier Huillard

On heavy vehicles traffic, you know how it is in the transport economy, what's lost is lost. What we want to know through this chart, the time it takes to return to the level we were at 10 years ago, very long time, because we're still slightly below the traffic level that we have previously. Where I follow you and will agree with you is that it's probably not just an effect of the Lehman Brothers crisis, but it's probably also the impact of better optimization of road, haulage, road transport with digital resources, digital tech to better optimize the filling of trucks that can – whose capability to carry is up.

Now, with the advent of the 44-tonne trucks, so there's that too, meaning that the number of heavy vehicles on the motorways is probably negatively impacted by that development. However, what's important is the slope. I mean, it's the growth and what's significant in the first half. The growth of our heavy vehicles was significant and we expect to see it continue trending positively in the months and years to come. A third of heavy vehicle traffic from ASF depends on Spain. 40% of [indiscernible] traffic levels depends both on Spain and Italy.

On the Lyon regulation, I mean, I think we just have to wait until we close the deal and then as we've always done, we'll explain to you in detail the regulation contract and the way in which things have been anticipated for our part in our business plan. So, we can't give you any further information, it's too complex and they would become to do that before the closing.

Xavier Huillard

Thank you, no more questions over the phone. Okay, is there a final question in the room?

Unverified Participant

No. [Foreign Language]

Xavier Huillard

So, everyone is hungry and wants to go off on a holiday. Thank you.

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