Alten S.A.

Ladies and gentlemen, welcome to Alton's conference regarding our revenues for the first quarter 2022. And I'm going to give the floor to Mr. Enolial. Mr. Enolial, you have the floor. Good evening, everybody. Thank you for taking part in Alton's conference related to our activity for the first quarter 2022. For this first quarter, I don't know if you received the press release, confirmed the recovery for the second semester 2021. Even though the figures were slightly down, the first quarter last year was still affected by the pandemic. The war in Ukraine did not have any impact on our activity. Regarding our own activities in Russia and Ukraine, it's quite marginal And it did not have an impact on our client project. Altern revenue at the end of March 2022 is 894.6, up by 31% in relation to March 2021. In France, the business has gone up by 18.9% and by 38.6% outside of France. On a like-for-like basis, the business has progressed in a sustained manner with growth exceeding 20% and it's actually equivalent to the second semester 2021. It goes up by 14.9% in France and 24% outside of France. Acquisitions contributed to 33% of the growth this quarter and represents 7% of our revenue. The international business represents two-thirds of our business. The business rate is is 92.5%, slightly above the normative rate, with some disparities according to the geography or to the companies. In spite of the departures at the end of the year, there's a high turnover, but the group also managed a very good performance in terms of recruitment. with very good figures in terms of recruitment. Acquisitions represented 2,900 engineers, ACD companies acquired at the end of 2021 in China and India that were consolidated on the 1st of January. Consequently, or as a consequence, the group had 43,000 employees Today we have 47,800 employees. The objective that we had set up at the end of 2019 is reached in spite of the pandemic. Out of the 47,812, 1,400 are in France, 3,350 are abroad. In France, Our progress is mainly due to the civilian aeronautics, 26% of our revenue in France, plus 50% in relation to last year, but it hasn't recovered the level before the crisis. It's a progress that is also due to the life sciences, thanks to pharmaceuticals and electronics. Reversely, the automotive sector, 10% of the revenue in France is stable because the growth is mainly via near offshore. This sector in France is 35% below the level pre-COVID crisis. The energy sector, 14% of the revenue in France is stable because the growth in the nuclear industry and the sectors of equipment for energy is actually eaten up by the drop in oil and gas. So France is minus 5% the level in 2020. Abroad, the business is growing in most countries in the Iberian Peninsula, plus 27% in terms of growth. In Germany, the business is picking up. Well, it was quite late in 2021 because it was very much exposed to the civilian aeronautics in the country. It had spread pitted up at the end of the last quarter, and this acceleration was confirmed this quarter. The civilian aeronautics is plus 40% in Germany, but minus 30% compared with the beginning of 2020. For the automotive sector, 50% of the German revenue is making 50% progress and is recovering the pre-level crisis. Globally, thanks to the automotive sector and the other diversification sector, the business level in Germany is above 2020. In Italy, growth is maintained for the third year in a row. All sectors are up. In Benelux, growth is confirmed thanks to the Netherlands, where the business is really picking up thanks to the very good results in electronics. In the UK, the business is growing plus 30%, a business that picked up in the aeronautics sector that is far above the level at the beginning of 2020, a business that grew by 50%. automotive sector has grown by 37%, slightly below the level in 2020. The defense and electronic sectors are doing well. The UK has gone beyond the level before the crisis, especially in the automotive sector. In Scandinavia, Growth had slowed down in the last quarter of 2020 in Finland, representing 20% of the area. The activity is making a 7% growth. In Sweden, the business is making slow progress, even though there are some sectors that are growing and have recovered the level of peak prices. But the other sectors are slightly down. In Eastern Europe, the business progress is very sustained thanks to Poland, 60% of the area, and has grown by 20% thanks to the finance and automotive sector. In Romania, 40% of the area, plus 20% thanks to the automotive activity. In North America, in the U.S., representing 80% of the area. Our business has grown by 25% in the automotive sector, the treasury finance, life sciences, aeronautics and telecom, oil and gas, just as for the rest of the group, is going down. In Canada, 20% of the area growth has reached 20% in the finance sector and aeronautics sector. The Asia and Pacific area is growing still in a very sustained manner, more than 40 percent. China is growing by 40 percent thanks to the automotive sector that picked up again. Japan, plus 50 percent thanks to the tertiary sector and the semiconductor as well. I'd like to say that the revenue for countries hosting delivery centers such as India, well, they provide local revenue because when India is acting as a subcontractor for Germany, France, or the U.S., it's an integral revenue, and therefore the matching revenue is taken at the country level, the front office level, that manages the relationship with the final client The growth has remained very strong in most of the geographical areas, except from France and Sweden that are still below the level before the crisis. All the other countries are above the pre-COVID level. The business sector are all growing. Therefore, with a different rhythm, the automotive sector that is going up to 17% of the revenue for the group is growing by 25%. More strongly for the OEM, plus 40 for the manufacturers, among the manufacturers, two-thirds of the revenue. The situation is rather contrasted, even though there are some manufacturers that are slightly down, but most of them are growing. For the OEMs, very strong progress, especially for the German OEMs. all above 50%. The automotive sector that had fallen down because of the crisis is only 4% below the revenue level pre-COVID crisis. For the manufacturers, it's still 15% below the pre-level crisis, while the OEMs have gone beyond the situation before the crisis by more than 20%. The naval sector is stable. There has been reorganization within Bombardier. Aerospace plus 12.5% in terms of revenue. In the civilian aeronautics, the business is picking up. We had seen that at the beginning of 2021. It was confirmed in the fourth quarter, and it's far more bullish than anticipated. The business is only 10% below the level before the crisis. So that's quite unexpected. And in such a tight time schedule, It is therefore very likely that by the end of the year, the business level for the civilian aeronautics will recover the pre-level crisis. Beginning of 2023, maybe, or end of 2022. Energy. generating 4% of the revenue is up 6%, has come back to the pre-level crisis. Oil and gas, only representing 4% of the turnover, is down by 2%. Given the general situation that everybody is aware of, there should be an upturning of this trend. It's not the case yet. The nuclear sector, 2.4% of the revenue, has a 10% growth in a very favorable context with a shortage of engineers. Equipment for the energy sector, 6% of the revenue, 20% growth thanks to renewable energies, but not only. The life sciences have grown by 12%. It's quite homogenous between the medical equipment and the pharmaceutical equipment. The rest of the industry is for industrial equipment. Telecoms are slightly growing, plus 3 percent, slightly going down for the operators but growing for the OEMs. Treasury finance sector plus 13.5%, making progress in the bank and finance sector and the retail services as well.

In summary, outside of civil aeronautics and automotive, which has a much bigger upturn than expected and who are close to their pre-crisis levels, all sectors have gone beyond the plan and are significantly in growth. Now from the external growth perspective, we have acquired three companies at the beginning of this year, one company for which we had announced last January that they were coming into the group. This was a company situated in Spain in cloud and digital transformation sectors, 280 consultants and 12 million euros in turnover figure. During the second year, We bought an Indian company that is in product engineering, which is going to reinforce our positioning in terms of embedded software for products in automotive and not only. This is a 12 million euro turnover figure and 280,000 consultants, 280 consultants. And we had to delay because of authorization issues with antitrust companies in the U.K., a company situated in the cloud services on the public sector services as well, which is not very common for our part. This company should help us in the UK to capitalize on its business segment, which is 110 million dollars. euros worth of turnover with 110 consultants, including half who are freelance or external, which is often the case in the UK. Of course, we also have other cases that we are scrutinizing, as you understand, some of which are in LOI phase or simple discussions. So the beginning of this year is very promising with a pursuit of the ramping up of activities in all sectors, including automotive and civil aeronautics. The health situation and most especially macroeconomic and political situations could upset this trend, but the first quarter will be very significantly impacting the results for 2022, which are in any case above the forecast. And financial analysts can ask questions if they wish now. Ladies and gentlemen, if you want to ask a question, you have to dial 01 on your telephone keyboard. We have a few questions coming in, the first of which coming from Emmanuel Parent from Hubert Dupont. Go ahead. Yes. Hello. Do you hear me, Bruno? Yes, indeed. Okay. Good evening. So I had a few questions actually. The first of which, to go back to what you said on the M&A with acquisition of 210 million euros worth. So this is bigger than usual. So could you give us a little, a few elements on the margin and the acquisition ratio? And if you have in your pipeline other companies of this size. My other question, more to do with the news in relation to supply chains and industrial This hasn't played into Q1 results, but in relation to what you see in the month of April, is there so maybe a few troughs in this curve for certain industries or not at all? And last question. In relation to the business level, which is very high because of a very high turnover level and recruitment, which was very dynamic for Q1 as well. So do you expect for this to go down again in the quarters to come because this rate is especially high right now? Now concerning M&A, concerning the companies that are in New Deal, these are smaller companies than the UK company that was just acquired, so between 150 and 200 people. strong, and these are the similar size companies that we usually acquire. There's no companies of more significant size on the market. Now, the UK companies, the ratios and metrics that we've used are the usual ones, so seven times EBITDA with a runout over two years. The margin of the company is lower than that of the group. It is around six percentage points today and of course it's up to them to put in place the ad hoc company to bring back this company into the group standards in other words around 10%. Now concerning business in April whether in terms of recruitment as in terms of the sales activity for the time being we have no trough in the trend business is still good and for the time being we don't have specific warnings on the part of customers i hope this is going to last but for the time being this is the situation that we are seeing now concerning the level of operations we have forecasted a slight decrease in this level but very slight for the quarters to come we believe that this is still going to remain high However, for the rest of the year, because customer demand is there, it's true that it could be higher, but we are recruiting many engineers without projects to be able to answer calls for a tender. But we do not expect, at least as of today, for this level of activity to go down. And if it did, it would be very slightly, so 0.5 to 0.8 at most. Thank you. Moving on to the next question. Gregory Ramirez, Brian Garnier, you have the floor. Yes, good evening, Bruno. I have two questions. First to go back to hires. Are many hires done offshore from now on? And this plays against, I assume, the price mix. And so can we consider that concerning the remuneration inflation on the market plus turnover rates that are still high, we can stay on a price to salaries effect that is still favorable? So this is my first question. And concerning my second question, Emmanuel talked about the UK acquisition. So what are the margins of the two other companies? I believe that the first one was already mentioned in February or January, excuse me. Yes, indeed. I think that we did tell you that the margin was above 10% for the first company acquired. And for the UK company, it's only at 6%. And for the Indian company, it is for the time being, and stressing this because we're going to have to restructure it, and so it's probable that the margin is going to go down. But for the time being, it's still above 10% as well and closer to 15% as a matter of fact. And for recruitment, this is a good comment and a good question. today. Of the close to 2,000 employees that we've recruited, we have offshore people who are about 500, so a quarter of them who were recruited between India and Morocco to meet the increase of demand, especially in aeronautics and automotive, and so to manage future ramp-ups. And we do not have recruitment plans for thousands of employees for now for our EDCs, but we are going along the trend basically and trying to stay one step ahead because we have to integrate people, train them. And so this involves a number of costs, of course, but the rest of the employees were recruited mostly in Europe. the impact in relation to the price to salary mix. Well, what's for sure is that we do expect an erosion of the gross margin this year, because the fact that we are increasing the offshore share does not necessarily contribute to increasing the margin, contrary to the IT sector, because as you know, actually, these are projects that are offshored with the client's agreement. who has an overall vision of the project approach, and so we do not engage on huge BPOs, contrary to ID, or for lump sums where the client does not understand the breakdown of resources, whereas here they understand the breakdown between front and back office, and so in a sense they will recoup de facto the additional margin because they ask for us for additional productivity which means that the average price for a certain project would not be affordable on a high coast zone. And so necessarily this is going to be limiting the erosion of the margin and allowing us to maintain our margin levels and even improve them even though in absolute terms the margin is a little bit lower by offshoring a certain amount of these elements. And for the rest, we do see that we have put through price increases, but from my point of view, these are not sufficient to be able to offset the future remuneration increases considering that engineers have salary increases at anniversary dates, which allows us to smooth out the increase of salaries considering the increase in the turnover. but we have some customers where prices are negotiated for two or three years. And these are tier one references for bigger accounts. And for the time being, we have to manage our projects because in some cases, prices have not budged. We do not expect an erosion of gross margin by 2%. This is not what I'm saying, but there will be a slight erosion of gross margins by 50 or 60 percentage points, maybe less, decimals of percentages. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, for your reminder, press 01 on your telephone. A new question coming in from . Hi, Bruno. Do you hear me? Yes, very well. So I had a technical question on consolidation date of acquisition. I believe that the one in Spain was the 1st of April, but if you give us the consolidation date for the two other ones, that would be great. And it should be the 1st of July. Normally, because this implies that we implement an ad hoc organization. But it should be 1st of July. Okay, and on the price element, you have the issue of price grid and references negotiated with customers, but you also have the possibility of moving engineers around and renegotiating case by case and coming out of processes set by purchasing departments, et cetera. And so in the first three months of the year, can you measure the amplitude of what was acquired in terms of price increases? No, we cannot measure this precisely because there's a combination effect as well. What's for sure is that the natural turnover means that for some projects we have to replace engineers And so moving engineers around over several projects, well, when they are complex projects, this is really complicated because you have the background know-how that you should not lose. And so it does limit this possibility of optimizing the cost of the resource because people are not necessarily replaceable like that from one day to the next, considering that the natural turnover is forcing us to call upon this type of replacement on our projects. Now, to say, I mean, it's true that there are discussions on prices with purchasing departments, and there's the way projects are organized, which is what we manage with technical departments as well, which could allow us to optimize case by case, but to say to what extent and what impact it may have on prices, I must admit I could not tell you. Okay. The only thing that we can measure is the evolution of gross margin rates for a given project, which overlap over several fiscal years because most projects do not end at the 31st of December. And so depending on the improvement or erosion of gross margins, we see clearly what's going on. Right now it's quite heterogeneous. There are some projects for which we see gross margins improving which means that the financial sell price connected to the project is increasing and the price salary mix is improving on that project and for others it's the opposite and so that's why when I look today at the snapshot of the first quarter things should improve over time necessarily because we have so this effect of staff renewal And I'm anticipating, I could be cautious in this respect, but I do anticipate, so 50 to 60 basic points of erosion of the gross margin. So are you talking about annual projects which are over two or three years? And so do you have, so windows for price increases? Yeah, they could be one-year projects or projects that started a year, year and a half, two years ago, but started a second year. half of 21 and are going to end during this current year or first quarter of 23. And so the window of opportunity to renegotiate the price on the project if there is a possibility for this is just once, one shot or every three months because it's a renewable opportunity which allows you to renegotiate with technical departments the embedded cost on the project. So this also depends on the environments that we're in. there isn't just France but basically for bigger work packages prices are negotiated at the beginning of the work package with customers and they are set according to price grids per engineer per category of engineer from there either we review the price grids which allows us to so go back on and so fine-tune the price of the team and of the deliverable ultimately. Or there is no potential for price renegotiations because they are frozen for two years, for instance, because we do have customers that remind us that they don't want to renegotiate anything and from there you can manage things differently when there is a turnover or when the team is going to be changing during the project because project teams are not set in stone during the project. There's upstream development phases, etc. So this, I would say, is the specific know-how that we need to put in place to make sure that we play our cards the best to optimize margins.

I have two other questions. There's a specific explanation to the drop in margin in the UK by 60%. Is it the margin of... what has not been sold, overhead costs that have been underestimated. Do you have an explanation? And the second question, you said that you were quite happy about the performance for the first quarter. Do you believe that this performance is good? And do you have indicators? What do we have in the pipe in terms of growth recruitment, net recruitment? Well, I'll answer to your last question. April was a good month of net recruitment. It is, however, always more complicated. I do not think that we'll recruit in the QT period. as many as we recruited in the Q1. But there's no red light. I mean, there's no red warning anywhere. Then our recruitment policy is very aggressive. We believe that the business is going to remain dynamic. It's to do with the psychology of the business managers who, in a slowing down period, try to anticipate and slow down their recruitment themselves, while it's not really necessary all the time. The main driver is the commercial activity. When we have, you know, requests, tenders, as long as this is still going on, there's no reason for recruitment managers to change, and we still have this rationale in mind. to be ahead of the phases in order to win the project. So far, the first quarter is confirmed. This is the first of June. The context is as it is. But for April, there is no change. So we should have a second quarter in terms of recruitment that should be quite good. And last, there is something unexpected that takes place before the end of June. The company in the UK now, the management method and the project steering methods for this company, well, they are great professionals, but it's not the same as what we do when we monitor a project. There is productivity to take into account about the project, and I cannot measure that today. because the clients are in the public sector and there's always some inertia between the moment a project is worn and the moment the project starts. So our feeling is that this level of improductivity that is bigger than ours now I do not think that this company is oversized in terms of costs. It's a consultant company. It has a structure, which is not always the case of the companies of 200 people that we buy. This one is quite structured. We'll proceed to some modification, not at the beginning, but we'll try to improve their profitability, and they can only be happy about that. because they will get the dividends. We also have a very strong proportion of external employees, so the Roth margin is lower than for the in-house employees. So what are we going to do with this company? Will we be able to take it up to 10% or is it going to stagnate around 8 or 9? Well, so far, I cannot say. We just acquired the company. We still have different things to understand from an operational viewpoint. But so far, it's too early a stage to have a very precise Pictures of the levers we can activate. You said 100 million euros for this company, in terms of revenue. 110. Another question by Laurent Dor, Cap La Chevre. Good evening, Bruno. I have several questions. I wanted to talk about the acquisition in the UK. I think this is the largest acquisition in terms of turnover. The profile of this company, is it supported by a fund? This company has been very dynamic over the last few years. What could you tell us about this company? It would be very useful. The second thing. the price and the growth margin. You said there were major disparities in terms of prices. From one sector to another, clients do not accept the same prices. They have the maximum rate of use. So have you been considering arbitrating your resources in a more aggressive way than in the past to better serve the clients? My other question is regarding the growth margin. Could you tell us about the other costs? The travel sector is going to be picking up again. Could you tell us more about that, about what is going on? The second quarter started well. there's a progress of the use rate that will be not as strong as in the Q1. The headcount will be more or less from the first to the second quarter. So the good reasoning, the good way of thinking would be to take a deceleration assumption of four or five points in the field. Would that be okay, or am I missing a few info? Okay, I'm going to take the question one by one. In the UK, the company has had a regular growth, quite a measured growth. You know, it's not a company that had 10% growth every year, but it's growing slowly and surely, about 5% per year. They did better last year, probably, because including in the public sector, there was a general trend that consisted of increasing the digital project. They were not really affected by the crisis. You know, the public and the public sectors were not that affected, unlike the companies in the private sector. So this company, that wasn't the case. Now, this company does not have a commercial dynamics that is complying with the group standards. Its model is more structured on business managers that are also in charge of the delivery, that is to say the customer relationships. And therefore, they win that project because they feel very close to the client. This is not our organizational model. We have a very commercial organization, people that are in charge of their own branch. But for the big package, we have a team that is in charge of the delivery. And this team is not in charge of the commercial prospection. Our commercial or self-organization is very different from the organization of this company. It's rather a classical organization for a company in this sector. It's not specific to this company. So we'll have to convince them to work slightly differently and to set up an organization in order to be able to pick up some more business to be more dynamic. and to diversify their client portfolio. I don't know if it answers your question. Now, regarding detention, there is no investment fund in this company because the price will not have been the same. Was it a negotiation over the counter, or was it just a difficult negotiation? It's not really over the counter. Very quickly, we were in an exclusive negotiation with them. It was not a very structured process, if that was the question. What was the second question? The client preference, well, this is something that is actually quite difficult to implement because each manager, each BU manager, manages both the relationship with the clients and the recruitment in a standalone manner. So arbitrating. between two clients in two different business sectors, it would mean that at one point, an invisible hand decides to steal some resources in one BU to give them to the BU just next to it. In our organization, since we're all standalone and autonomous, it cannot work like this. Those who have clients with more profitability and more margin, well, they do their best to develop these type of clients, such as the telecom. Well, with clients that are not as profitable, they're taken care of by other teams. So each team recruits the resources that they need and they recruit within the group the resources that they need. There is no regulation, no internal regulation to arbitrate the dispatch of the resources because we do not have common resources with an arbitration that will be made by the technical department and then allocating the resources to the project depending on the clients and the needs. I'm sorry, Bruno. The acceptation of a prize. At the end of the day, the BU manager and the other departments, how does it take place? Who has the final say? Is it the person in charge of the BU that negotiates directly with the client? My question is the CEO. Does it have the possibility to block? Well, no. Because in major projects, the negotiations that are carried out are at the country level or group level. And prices are defined within framework contracts that are signed over several years when there is, for example, the fact that we are now benchmarked with Airbus. Negotiation takes place every two years or three years. But that's negotiated with the general management. It's not the business manager that is going to negotiate the Airbus price grades or the Stellantis price grades. So the tier two, tier three clients, that is to say, clients for which the business level is quite low, a few dozens of engineers, in that case, we don't always have a framework contract that is signed. When the margin is below a specific level of growth margin, it depends on the country, of course, because the growth margin profiles are different from one country to another, and the BU manager, the BU director, must make sure whether or not there is a waiver Because the BU director does not have the authorization to offer a price that is not compliant with our prices, basically. In the automotive BU, the objective is to develop the business with the automotive players. And since he is in charge of its own BA, in charge of its own recruitment, we are not going to tell this director, well, you recruited X people for such clients or that amount of people to anticipate the need for such clients, we're not going to steal resources from him to give them to another sector because we're going to hinder his development capacity, therefore its own margin and be an entrance for the communication plan. Sorry, the interpreter did not hear. The sound was not very good. So we have different companies, which organizational model is different. And you cannot, I mean, resource allocation is not done via the salespeople. Salespeople are in charge of finding projects. And in turn, they have incentives. They have incentives in terms of revenue, but they do not pay intercontract. Their organizational level is, their organizational model is very different. Now, a commercial that has an intercontract level that is above what he has in his own plan would accept some will might not accept to have some resources stolen. We all have a visibility regarding available resources in order to build our teams about two or three months ahead. But we cannot say we're going to cut off the resources for the automotive sector for Stellantis for the benefit of another client because this client is more profitable. if we can take the project at conditions that are compliant with objectives within Stellantis or Renault, we'll take the project T. The assumption you're describing is not compliant with a rationale, a Malthusian logic, basically. The second quarter, it's five point less compared with the first quarter. Well, we need to look at the number of working days because the mechanism for the working days are not the same. We have a deceleration assumption for the group margin. for the organic growth for the Group Fraser between first quarter and the second quarter? We can say that given our average headcount last year during the second quarter and the average revenue per person, What will happen to our average objective for the June if we believe that increase slightly between the beginning of the year and the end of the first quarter? We can model all this. We can, 42 as a starting point. We add what we have to add, 1,500, 1,500. during the second quarter in a linear way. We get a mean, then we have average objectives for the Q2, and that will determine more or less the expected revenue. And we can compare it with the Q2 last year. So mechanically, it will give us an assumption in terms of organic growth for the Q2 that will be lower than the first quarter. And the usage rate, the utilization rate, well, that's exactly what I meant. In terms of time schedule, can you give us an update for the third quarter, the fourth quarter?

So Q1 for 22, on group average, we have 0.5 working days more than last year. So to be precise, we have 62.60 versus 62.10. For Q2 22, we have 0.4 working days less than last year. And so for the quarter, it's just about the same. And so we have 61.4, so Q3, 22.6 days less or fewer, 64 working days. Q4, we have one working day less, so bringing it to 62 working days for 22, which is my... 4 or 5, so minus 1 for France and a little bit more internationally. And in France we have, so if we look at France specifically, we have one more working day for the first half of the year because we had one more working day in Q1, which is not the case in Q2. And for Q3, we have one working day fewer, and Q4, one working day fewer. And so on average during the year, we do one more for the first half, minus two for the second half, so minus one overall. Okay, we can modelize with this. That's perfect. And last point in relation to the leverage effect of But, of course, there's going to be more details. It's early in the year. But what can you say about this? So under the gross margin, we have everything to do with recruitment costs and sales costs. This is going to increase compared to last year. And necessarily, I mean, you get the picture. To assist growth, you have to staff managers, integrate them, train them. And this is the same for recruitment teams. And so, last year, we had started restaffing and reinvesting on recruitment costs as of the end of the first semester. So, this was especially for S2, actually. And this year, we are going to have a cost that's going to be proportionately higher than the one of last year. For the G and As, we are restaffing as well because we are late and growth is what you see with the figures. And so, we really need to assist this growth. It's quite tense in terms of internal organization right now. We have a number of IT projects that we had frozen that we have to restart. So it's not so much to do with traveling costs that are going to play into this. I think they are going to pick up again a little bit, but the fact is that ultimately So engineers' traveling costs were re-invoiced, and there's fewer trips that are re-invoiced and concerning trips of managers and executives. So in relation to corporate staff, this has picked up again, but much less than two years ago. And we do have a certain number of work habits for two- or three-hour-long meetings. People do not travel anymore. They go on teams. or these types of things. And so it's not TRIPS that are going to play into the situation. So it's going to be everything to do with so restaffing support functions, in particular HR functions. We've restarted IT projects. We've restaffed communication teams. We are redoing events for engineers, for sales managers. We are going to reorganize because we hadn't done this for two years. et cetera, et cetera. And so the rate of G and A is not going to increase, but we do not expect a big leverage effect on G and As. And so except if the growth is very strong during this year and we continue to running after growth because this is what's going on at Alton. We have growth rates that are 20 or 30 percent and so we have trouble recruiting the resources that we need and so we never stop recruiting recruitment plans and so we never manage to reach the level of resources that we need and so this does impact the level of G and A. And the fact is that if this is the case, we will be lagging behind the restructuring efforts that we need to implement. And that's why I told you at the beginning of the year that we did 19 in 2021, which was not standard. And we had to expect a picking up of the margin. We'll be at the two-digit figure. But the fact is that we will not be at 19. Okay, that's clear. Very comprehensive answer. Thank you, Bruno. You're welcome, Laurent. Ladies and gentlemen, for your reminder, if you want to ask a question, you have to dial 01 or press 01 on your keyboard. Next question, question from David Marcon from Societe Generale. Yeah, Bruno, sorry for coming back with another question, but I do have one because, I mean... it's still hanging because I wanted to challenge you a little bit on your forecast of the evolution of the gross margin at minus 50 or 60 basis points. And so we do have a certain number of companies, especially in IT, that are seeing today a real positive scissor effect on gross margins with prices increasing much more than what they thought at the beginning of the year and average remuneration that stays on course in spite of this tension on the job market, et cetera. And so I'd like to know if your hypothesis of minus 50 or 60 basis points, is there a difference between French and international because it seems that this might be so easier to materialize outside of France and in France and beyond the geographic effect, would there not be a sectoral effect? So outside of IT, do you see a gross margin that would be in better shape than the 50 or 60 basis points that you mentioned for the group? Now in the IT sector, And in the banking sector in particular, and not only, we have managed to put through a number of price increases without any problem. And in spite of the fact that price grids had been set for several years, and because we are speaking to counterparts here who need the resources to have their entities run and manage transformation processes. And so this is undeniable. It's much easier in the world of IT, even though you may be in an industrial setting and that you could be consolidating a DDSI, as opposed to a world of engineering where you are speaking to R&D departments, which are restricted by purchasing departments, which are much more cautious and keen on the revenue cost of engineering, of the project itself, then on engineering, because engineering is necessary to have the company run. Now, on the other side, you always have, and this is true for France, a competitor, even when they are tier one competitors who agree to not change their price to gain additional market shares and who could even agree to reducing them in the case of an aggressive sales strategy. And so this, in spite of the context, is still the behavior that we have to confront and that comes and pollutes the behavior of buyers. there are a number of issues linked to different industries. So we do have industries that are extremely so tough in negotiations and discussions, and which I would go to say that they have to take into account the fact that they increase remuneration in-house and ask us to reduce prices. And this is barely a caricature. This is a certain... number of things that we've heard. And we've even received emails to say that to support the effort that was made in-house, we would ask for suppliers to accept and make efforts both on the prices and on working capital requirements. And so I will not give the name of the customer, but I found this to be absolutely incredible. And I'm not saying that everyone is like this, but there are a number of players who are in this state of mind. Of course, we don't have to accept and we don't always accept, but this is just to give you an idea of the way things could take place in the world of engineers. It's true that remuneration is increasing, but they are not booming either in France. Since the market is much more concentrated and structured, this is where we see behaviors in some sectors that are the most unacceptable. when internationally in a sector that's very homogenous, the automotive sector, and where things are going quite with lots of difficulties with a certain number of players in Europe, you'll guess which they are. We have fewer difficulties in markets that are less structured. So for instance, in Italy, except for Samanthus, for instance in the UK or the Netherlands where it's much more simple in terms of prices than it is in France. And so when I'm saying so 50 to 70 basis points it's because I take into account both the so price to remuneration effect And also because in some countries we have to continue structuring technical departments because we're moving fast in the implementation of work packages. Thinking of Sweden, Germany, etc., where we are structuring our technical departments and reinforcing them in certain parts for near shore, offshore. And so I've taken an assumption which I know is quite conservative, but I don't think that we will manage to renegotiate this gross margin this year for the reasons that I explained but I do hear what you're saying and I do observe this in some sectors in France as well where we have remuneration increasing and prices that sometimes increase at the same percentage as remuneration which creates a margin increase ultimately and this is for sure. That's very clear Bruno. Thank you for picking up the challenge. You're welcome. It seems that we have no further questions. I give you the floor for the conclusion. Well, if you have no more questions, I'd like to thank you for your attention. Thank you for participating. I believe we have another appointment. I forgot the exact date, but we will meet again for sure at the end of July. for the usual meeting on the sales figure, revenue figure for the first semester of 2022. Have a good evening and see you soon. Ladies and gentlemen, the conference call is now finished. Thank you for your participation. You can now log out.