Alten S.A.

Ladies and gentlemen, good evening. Welcome to the Alten call for the Q4 Financials 2020. My name's Val. I'll be your coordinator for today's event. This call is being recorded. You'll be in listening mode during the presentation, then we'll open it up to Q&A after that. If you have a question, Press star one to record your question. If you require assistance, press star zero. You'll be connected to an operator. Over now to Mr. Bruno Benoliel, Deputy CEO, to begin today's call. Over to you, sir. Yes. Good evening to you all. Thanks for joining us. for the call on a review of 2020. At the end of the year, the situation has changed little versus Q3, as I indicated earlier during the October. A lot of wait-and-see, a pretty sluggish and mixed uptake. Tech and aerospace heavily impact. We had organic decrease in 2020 of 13%, it of 12.9% thanks to a Q4, slightly better than expected. So Q4 turnover of Alten right to 167.4 million, down 17.5% versus Q4 last year we anticipated. 18.5, hence the slight improvement that I mentioned, but you can see that activity remains markedly down versus last year at constant rates, down 17.4%, minus 24.4% in France and 24% in France. Full year, 2020, 2 billion 349 million down 11.1% versus 19. It was 2.624 billion. Like for like, scope and forest activity is down 12.9% down, 19.5% in France and 7.9% international. Very sluggish response activity rate increased gradually remaining lows. 77.2% in Q2, 84% Q3, 86% for it. Final quarter, well below the normative rates year to date. It's 84.6% in 2020, is against 92.1% in 2019. Furlough schemes were reduced because of an improved activity rate. It's still present in a few European countries, essentially France and Germany, all geographies. headcount in furloughed was 13% in 2020, was brought down to 80% in Q3, thanks to leave-taking, and 5% in Q4. Obviously, it's not added to the intercontract rate and taken into account in the activity rates I'm giving you. So they're part and parcel of the intercontract rate because It's an intercontract that's subsidized. Headcount continued to decrease 37,200 at the end of last year, 32,000 engineers, consultants, end of December 2020. 33,000 29,000 engineers excluding acquisitions disposal engineer headcount would have been 29,000 headcount that's an organic drop of 3,000 people 2017 in France and 2418 outside France by geography at the end of December The situation is as follows. France remain penalized by auto and aero. Auto represents 13% of France turnover, declined by 35% in Q4 after minus 40 in Q3. Aerospace, 21% of French sales, down 34% in Q4. After a peak, so to speak, of minus 50 in the Q3 energy, thanks to nuclear, railways, naval life sciences, telecom in total, just over 40% of turnover is still growing. International. No change of trend in Q4 versus Q3 and changes by country are dissimilar. Activity is down 7.9 annual year to date, but 12.4% international in Q4 after minus 14% in Q3, minus 11% in Q2. North America, USA. 80% of NORAM, the main sectors, auto, oil and gas, and service finance picked up slightly, so less decrease in Q3, minus 20 versus 25 in Q3. Canada resisted well up 13% 2020. Services up 15%. Telecom 5%. Life sciences plus 90%. All sectors in Canada are up, except for aerospace, of course. Germany. Country where activity decreased the most within the group, the organic drop reaches 24.5% decrease that was slightly reduced in Q4 minus 30 versus 34 in Q3 activity didn't pick up in the order aero sectors even if The decrease of Q4 in both those sectors is lower than in Q3, but it does remain very significant because in auto, minus 30 in Germany at Q4, whereas we were on levels... Higher than Q3, auto still 45% of turnover. As to aerospace, only 25% of chairman turnover. Let me remind you of the numbers. Minus 4% in Q4, minus 60 in Q3. Once again, minus 40 in Q4. The other sector, finance, energy, life science are up. Scandinavia. at constant scope and forex activities down 19% in Finland, a small quarter of Scandinavia. Activity improved in Q4 thanks to the pickup of industrial equipment, a preponderant in that country. In Sweden, activity stabilized, a decrease of 20% at constant scope and forex on the back of the strong decrease in the auto and trucks demand. very major in Sweden. So the decrease full year is the order of 40%. Benelux activity decreased slightly, but in Belgium it decreased by 10%, stabilizing Q4 essentially owing to the service sector, whereas the pharma sector continues to grow significantly. In the Netherlands, activity grew 3%. Thanks to semiconductors, all the other sectors are up. Spain now activity down 5%, but contracted slightly in Q4 owing to continued lockdown. Defense and space, automotive, civil aero are down, whereas activities up across all the other sectors. Asia-Pacific scope grew 6-5%, but leveled off overall in Q4. Growth driven by India, where local activity grew, posted growth about 10%, notably in electronic semiconductors. And in the tertiary sector in China, 27 million in turnover. Activities down by just under 10%, 8% to be precise. The auto accounts representing a significant part of the Chinese business. Activity had picked up as of Q2 and picked up more vigorously into Q3 and leveled off in Q4. Now, Italy. is a specific country in 2020 for Alten double digit growth across sectors save telecoms going to the decrease of a client Vodafone in the UK activity began to pick up in the final quarter even if it's heavily impacted by the drop in aero accounts minus 35 auto minus 30, both representing just under 40% of UK turnover, like what's happening in the rest of the world. Diversification of enterprise and other sectors in the UK grew significantly. If we look at the activity by sector, I won't repeat that auto and aero remain heavily impacted by the crisis. All the other sectors suffering from marked growth save for rail naval energy thanks to nuclear and life sciences if we home in sector by sector automotive 70 percent of turnover today down 30% sequential improvement, minus 40% Q2, 36% Q3, 33% for Q4, for OEM, F, A, Ferrari, all are down. And equipment supplies, only ZF is up, as I said last time. We don't anticipate real pickup before mid-July. 21 at best. Rail activity and nail activity still growing by over 10%, driven strongly by naval, but rail reaching 10%, an activity that slowed, obviously, in Q2, that picked up in Q3 and accelerated in Q4 for long-term projects. Aerospace now 12% of turnover, down 33%, with a strong decrease in Q2 and amplified in Q3. And a slight uptick in Q4. Visibility remains reduced. And for us, no genuine uptick of activity will occur before 22 or even 23 in the aerospace sector. Le sous-secteur du spatial.

Within aerospace, the subsector of space is less severely affected. It's only slightly down and should pick up faster. We expect it to have picked up by the end of H1, what with new launches, INS bus, and the SpaceX launches. Defense and security, 5% of our business. down 7%, severely impacted by Q2, minus 14, has picked up slightly in Q3 and Q4. We expect that to remain the trend over 2021 because budgets haven't been brought down. The mixed shows that oil and gas represents about half of the business industry. It's stable over the year, but down at the end of the year, having been affected by the crude oil impact. Nuclear steam is fairly stable, given the projects that are long-term projects from the main part. As for energy-related equipment, it's still increasing more than 5%. which account for some 8%, 8.7% of Olten's business. It's slightly up. Pharmacy, up 10%. Medical equipment, up 3%. This should go on growing over 2021, obviously. The other industries account for slightly less than 6% of our business, down some 10% over the whole year due to industrial goods. Lastly, telecom, 7% of our business, down 3% over the year, but with very different scenarios for our various customers, all growing apart from Vodafone in Italy and Ericsson in Sweden, but we expect this to be one-off. SFELTIS in France, given the fact that they want to bring these services back in-house, as they started to do in 2019, and this is a trend that has increased over 2020 with the crisis. We expect business to pick up over 2021, what with a switch to 5G. Electronics and multimedia. It's started to pick up again over Q4, even though it is down 20 points in Q3 and down over the whole year. As for Amadeus, we had 100 or so consultants there and that has had an impact, but semiconductors and electronics have still gone up. Then services and finance up 20% thanks mainly to retail and services with banking up 5%. So if you look at the various businesses by sector or by geography, even though the full year has been significantly down with two sectors having driven that in a number of countries.

But on the whole, the other markets are resisting fairly well.