Alten S.A.

Hello, everybody. Hello. I would like to thank you for being with us for our conference, and we will talk about the figures by end of March 2026, a first quarter which has revealed an activity and half notes, not really good. The figures you will see have improved for some of them and others are still decreasing. By the end of March 2026, we had 1.7 billion euros turnover, which is a decline of 0.8% compared with the same period last year. In France, we progressed by 1.3% and out of France, a minus 1.3%. We had bad conditions in terms of exchange rates and we have managed to come back to an increasing organic turnover by 1.6%, which is stable out of France. For this quarter, we have no calendar. and the activity is almost identical to the one last year and it is at the stable perimeter. At the same constant perimeter, we have improved the turnover thanks to acquisition. Alten was having 54,000 people working for this company. We are... We have 154,000 altogether, of which 51,851 engineers. The acquisitions have contributed thanks to the increase of the engineers part. At Constant Perimeter, we have a better progression out of France. According to the different geographical zones, this is what the activity looks like and it has developed the following way. In France, the activity is stable, plus 0.3 year to year. The automobile sector is not decreasing by minus 1.9%. Aerospace, security, defense are increasing slightly. However, for living sciences, tertiary, telecoms, this activity has decreased. In the Iberian zone, 85% for Spain, the rest of Portugal. The growth is still very positive. We have an increase of 6%. Apart from the automobile sector, thanks to SEAT, and a slight decrease in the bank sector. In Italy, the activity has slowed down. We have 0.2% decline apart from the bank and finances, which is declining more, but all the other sectors are increasing, including the automotive activity. In Germany we have a performance which with turnover is decreasing in particular because of the automotive sector we had already the same phenomenon in 24 and 25. It seems that as we had indicated during the last communication that the activity is getting stable in Germany year to year minus 2%. In the sequences, we will have a look and take a close look at that during the next quarter, but it seems that the activity is going back to stable. The automobile is decreasing by 30% year to year, but at the same time, the whole activity is slowing down in this sector. The aerospace representing 22% of the German turnover is at plus 2% year to year. Same for safety and security. It represents now 7% of the turnover and is increasing by 1%. Still in Germany, the activity is, from a qualitative point of view, has strongly increased. That's quality. We have started the sectoral development, but this policy really reveals to be fruitful. We are hopeful and we hope that the activity is going to stabilize completely and will turn back to growth by the end of the year. UK. The activity is stable for this quarter. The automotive sector is representing 10% and aerospace is still declining both activities, but defense is increasing by more than 1% and represents 10% of the turnover, the same for energy. As regards the public sector, That represents 40% of the British turnover. The decline has stabilized now. Benelux. The activity is still declining, but is improving by and by. In Belgium, the activity is stable, but it declines in the Netherlands because of the half semiconductors for K, S, and L. In Eastern Europe, a decreasing activity of 5.6%. Poland represents the three-quarter of the zone, declines by 3%. Romania is losing 3% because of the tertiary sector. Nordics, it remains the only geographical zone where the decline is still very important. In Nordics, the activity has drawn back by 6% even if... We know that overall it tends to reach the minus 5%. And still the same reasons, automobile, life science and office activity. In Finland it's a little bit better, close to zero for tool machines. North America, the activity has decreased by 5%, but we think that it's going to increase in the coming quarters. The United States of America represents a decline by 10%, but that's because of automobile industry and life science. It is stable progressively and stabilizing in Canada at plus 7% thanks to aerospace and bank and finance. Then Asia-Pacific is back to growth this quarter. The activity is stable in China, one third of the zone, increasing more than 10% in India, another third, and 6% growth in Japan, and Korea decreases strongly because of the automobile industry. Considering as we usually do, if we consider the activity by sector, the automobile industry represents 13% of Alten. However, it declines and it goes on. By 2.6%, a little bit less in sequential analysis, OE and are declining too, and hopefully by the second quarter we will reach the balance, maybe at the third quarter. Rail. As we had indicated during the last conference, rail needs to tackle modernization. Growth is back during the first quarter, which represents 10% of this activity in a sector that should progress further on in 26 over the whole year. We hope that the problems of Alstom, as you could read in the press, is not going to bring them about to decrease their investments. Aerospace has confirmed the growth of last quarter, last year. Even aerospace has really reacted very well. Defense, security and naval goes on to progress very strongly. We have almost 10% increase year to year. Thank you very much. Industrial equipment and electronics this time, as well as semiconductors, is declining by 8%. In the overall industries, we have minus 6%. The activity tends to stabilize by and by, and we hope it will turn stable at the second or even third quarter. That's the only field of activities which is really at minus 18, a very strong decrease. It is a decline that has to be split up between operators and telecom. Then we have balanced finances, insurance. Last quarter was positive of 25, but now it slightly decreases during this first quarter because of France, Italy, Spain, and Southern Europe in general. But there is one activity that has increased in other geographical fields where bank finance insurance is important. It is Portugal, Poland, as well as North America or Canada. And then it has to be pointed out, public service and retail. This was decreasing over the last quarters, but during the first quarter, 26, it has rebalanced and we have a slight decrease only. We hope it's turning back to stability and we hope we will grow again during this year of 26. So you see that globally, apart from the telecom sectors, all the activities are coming back to growth or are stable. This looks much better for all our activities than one year ago, as well as for this first quarter that tends to confirm the stabilization of our activities. As M&A is concerned, we have signed but not completely closed It will happen in the coming days. A company for which we have communicated about its clinic we saw it two and a half months ago.

They have 60 million turnover. A company that has 470 consultants

Many external people working for this company, they are working on data, IT, cloud, software development. It's a company that reinforces our critical size in IT in France, in particular out of Paris, south-east of France, but not only. Our forecast for the year to come, macroeconomic, geopolitical context is of a high uncertainty and so it is extremely difficult to have a forecast. However, in this given environment we are working in, Thank you very much. According to this hypothesis, the operational margin should increase compared with the one that we achieved in 25. We have no precise guidance for this time. Of course, we talk about operational margin of the activity. We do not expect an explosion. I'm going to leave the floor to... And now I am going to hand over to you, participants to this conference, if you want to raise questions, you are very welcome, and I will answer your questions. Thank you very much. So we open now for the question and answer. Nicolas David has a first question. He has raised his hand, and you have the floor, Nicolas David. Here I am. Hello and hello Bruno. I would like to come back on the guidance. I understood that it does not take into account a degradation even at the bottom. But I'm surprised because when we hear the comments, we hear a lot of increase or stability, automobile, but also even Germany. If there is an increase, if there is an improvement, then do we have countries who are going to deteriorate? It is just countries or activities. Is it possible to find out if it has a link with Iran? This is my first question. Well, data is being published on a year-to-year basis. Now, you have to understand that there is a business dynamism We have a first quarter which is quite acceptable from an activity point of view. But this can be explained by two different things. First of all, we had first and second quarters of 25 which were not good, with the coming back to growth by the end of the last quarter, and then at the beginning, of the first half year, 26, it degraded again a little bit, because you know that's how it is, it's the beginning of the year, we have projects that do stop on the 31st of December, and then it goes up again, and during those activities and expansion periods, we again come to a crossroads with the loss that we had at the beginning of the quarter, which is going to be mixed with the growth that has been generated. Now, this year...

I mean, this has come true again.

For the first half year 26, we have lost a certain number of projects, and now we are still trying to catch up. but we have not reached yet the end of 25. It's going to happen. It was not done before. I think it is going to be achieved in 26, except if we have a real degradation of our activity. A level of activity for the first quarter and even half year is going to be higher compared with the first one of 25, but we're not back to the situation end of 25. So to be clear, even if There is a certain dynamism which is okay and others which are less okay. I mean, we have countries that still decline and even sectors of activities that decline. We also have the contrary. that goes into the good direction where we are going to reach a certain stability even if we do not go beyond, but we will reach the zero level. This is why the uncertainty is about how will we regain projects and what about the amount of projects working in Toulouse? But this has nothing to do, if I may say, with the economic context that we are in. This kind of cycle of our activities usually, it has always been like that. So we will see what happens by the end of the first quarter, and this will be the first trend, if I may say so. But we have to wait. I don't know if this answers your question, but to be even more precise, and What about the minus 0.5%? Well, first of all, you understand that the gap, I mean, we have not put minus 2, plus 2. We have a gap which corresponds to our convictions today, to what we are hoping in and what we observe on the market. There is a growth dynamism which is very sensitive. in particular as regards aerospace, defense, and this should not be destroyed because even if things are better in the automobile industry, I mean, it has dropped so much that at a certain point you reach the bottom. But there are other sectors that decline and decrease. So what we can say today... is that the war in Iran has so far no consequence on the dynamic of our customers. It is a zero effect. There is no effect. There is no consequence. But we do not know because even our own customers are not able to deliver any kind of indication. We don't know if the consequence is going to be deferred in time, maybe summer after summer or never. and according to what already happened, we have to wait to see the possible consequences. However, we can't say what is going to happen there. Maybe there is going to be a major oil shock. However, again, we do not know anything about the consequences, so we have no worst case. It is a worst case at, let's say, roughly around 0.5%. and we are absolutely unable with this war in Iran to say anything better than that.

That's quite clear, thank you.

Plus, it's far away, a lot of uncertainty, so for the SPE there is this open fight and it's logical. For the second...

For the second quarter, the second half year, we had a sequential worsening of the situation.

No, it is the second quarter, 25. I can't even understand how the year-to-year T2 quarter of this year, 26, could be better. because minus 20% would mean a scenario of strong degradation. I can't observe that. The minus one for the second quarter is careful, prudent. There will be a sequential degradation because the second quarter is always lower than the first quarter. And then... The question is, is this the result because we have less days, working days, or is it because we have an additional decrease because of the internal functioning of our company? We also had a slight stop of projects by the end of the first quarter this year, a little bit more important than last year, but we are catching up with it. So it hindered a little bit the whole mechanisms. We took that into consideration and we will see by the end of the quarter what we do. Organic growth, the second quarter will be identical or slightly inferior to the same quarter but last year. And in the worst case, we would have a minus 1, minus 1.2. It's extremely difficult to proceed to a forecast at this detailed level.

at the beginning of this quarter.

And the drop in headcounts, does that reflect the degradation? Yes, yes, exactly.

However,

The activity levels are still okay. I mean, we do not anticipate on a loss of contract for the second quarter, okay? And a last one before I hand over to others. How do we explain the decrease in electronics and semiconductors? How do you explain that? Is it specific to Alten? Is it specific to the market? Could it really go back to growth? ST Microelectronics are back to growth. This is an excellent question.

We have exactly the same question.

We have exactly the same kind of question, by the way. And yes, we would like to understand. And for reasons that we all know, it is an expanding sector. So either the sector is less externally organized and the investments are about production and less on subjects that we are working on, like S.M.L., SML we know very well. What we know, we can't speak for all the sectors, but for SML we know, despite a backlog with a very positive year and investments, the investments will start again. But for the time being, The subcontractors do not profit from it, nor do we, nor do the competitors. So, is it possible to extend that to the whole sector? I don't know, and I'm not sure. In the sectors of semiconductors, we have ASML, Samsung ST Microelectronics, etc. So, what is surprising is that on all of those accounts we have a degradation of the turnover. So, Either it is a dynamic that has to be broken down sector by sector, or we are bad and we do not have the right sane strategy to develop those accounts, and they are still very important for Alten. So we will have to investigate a little bit to better understand. I understand the question, I do not have the answer.

I think it's probably better to remain quite cautious at this juncture anyway. We don't really have the comfort of this element of visibility in order to be particularly confident at this stage. Okay, thank you very much. You're welcome, Nicolas. Thank you. Now, let's move to another question. Laurent Dor, over to you. Hello. Good evening, Bruno. I have three questions. The first is related to the aeronautic section, which is slightly better after the last few quarters. But you see what's happening with regards to air traffic. Well, Do you have any concerns about an eventual slowdown at the end of the year? You know, what have you heard from Airbus, etc.? That would be interesting to know. And my second point, when we're talking about margins, increasing margins, I just wanted to make sure that we were still on this dynamic salary versus price. with the increasing strength of AI. And thirdly, I want to talk about the acquisition that was announced. If you could share with us the profitability levels expected and see if the price paid is within standards, I suppose. Well, yes, the last question, yes, we're within the traditional standards. There's not going to be any burnout in this company. We have paid Some which are similar to other acquisitions in the past. In terms of profitability of the company, it's 7.5% of operational margin, bearing in mind that this is a company for which the gross margin is pretty good. And that means what? It means that there will be a potential improvement to 10% fairly quickly. And when I say quickly, I'm talking about 2027. For margins overall, well, The dynamic is interesting, but let's bear in mind that we have less and less activity in classic time and material, and the challenge, therefore, is to really maintain the margins for our projectors, to ensure the internal production is up to par, and even improve it, So the clients have calls for tender, and they're going to consider the technical offer, but they're also going to look at the budgets that are allocated. But overall, we are managing to stay afloat and to hold our gross margins in a fairly satisfactory fashion. It's always a mixture, isn't it? There are areas where it's less good than others. But at group level, the gross margin is holding up. With regards to the aeronautics section, well, this is why I haven't really made any specific commentary on Iran, because we really don't know what's going to happen. We haven't got much feedback from the field. However, I believe I have some ideas, and I look at 2024, for example, where we had no warning or very slight warning before any crisis, and then suddenly we're face-to-face with a work stoppage, project stoppages, one after the other, and that was in October 2024. Our clients, the traditional ones, people working in the field, don't have much information currently, which would allow us to anticipate any slowdown before the end of the year. Now, you know how it works. The cash flow isn't there, well, the clients might very well decide to walk and to invest elsewhere from one day to the next. And it's not easy to predict this kind of information. Direct clients are not necessarily informed of what's happening. Now today we can see that for the last two and a half years we are changing, we're moving in an environment which is much less sure in terms of prediction, because our own clients are often as unsure of what's happening as we are, particularly in terms of their budget. So similarly, as in 2024, we were caught off guard, and we weren't the only ones, let me tell you. In 2025, when we publish our first quarter, our first semester, we're trying to anticipate a recovery of the aeronautic industry in 2026, but actually we've gone much quicker than we expected. even if the clients have been faced with certain problems because budgets fell after summer. So overall it's generally satisfactory, but today we just don't have any slowdown included in our predictions for Airbus for the end of the year, but we're not exactly forecasting an enormous expansion either. We have to remain focused, measured, but we haven't forecast a slowdown or a decline in the activity. If we thought that the war in Iran was going to change everything, we would be obliged then, of course, to change the way we interpret all of the information we receive. But today, I think it would be gratuitous to do that, because we just don't have the information. And the acquisitions are going to be consolidated at the beginning of Q2? No, no, no. So it will be at the beginning of Q3. if they're within the scope, and by that I mean they're able to provide what's necessary to get into those figures. Failing that, it will be the 1st of October. Have you got many deals which have made a great deal of headway? Yes, yes, we have deals on the table. They're not major deals, but we do have deals there. We have deals in Asia, in North America, in Europe. Quite a few which... are taking a long time to be developed, perhaps because of legal implications from the salespeople or because of the negotiations, and some who are waiting because the results in 2025 weren't quite what were announced, and they would like to wait and see how they fare in the first quarter. rather than getting involved and then kind of embedded vision. We have two fairly advanced deals which are practically finished and we've got more than five deals underway. That's for the new deals. But if you look at the files that we have, we have deals that are signed. We've got more than ten of them which are in the wings. So it's much like February last year. Yes, it's exactly that. Okay, well, thank you very much.

You're welcome, Laurent.

Now let's move on. The next question, Derek Marcon. Over to you, Derek. Hello. Good evening, Bruno. I hope you can hear me. My first question is how we can reconcile the performance of the first quarter with this embedded growth that you outlined at the end of January. The second question is why, in H2, why is that equivalent to H1? If you're going to continue to increase our staff hiring, the basis is going to develop, at least in the third quarter. And the third question is related to the auto contracts in Germany. Can you give us some information on the major frameworks that you've won or lost or which are underway? And how... You view, I suppose, what's your hypothesis surrounding these deals that are one, or hopefully going to be one, when you look at the organic growth of 2025, and with regards to the semis, in the hypotheses which you have announced, when you look at commercial performance, etc., they haven't relaunched investment. Is there an option, because this is usually a part of Deal for the deals for semiconductor clients. Are there any particular deals that you are aware of that are traditionally onshore which are now being sent offshore? Right. Well, if I take your question one by one, embedded growth is annual. Okay? So, how have we managed to reconcile it with the figures from H1?

Well, you're talking about cure?

We're not talking about the same standards. What we were saying, what I was saying anyway, is that the principle of embedded growth is if The year that's starting, so let's say 2026, is a year which is particularly flat given the situation of 2025, and we're going to be less than 2-2. That's what we estimated anyway. And then you are taking the ratio, you're looking from December to January, what are you talking about? Are you looking at the cut in this 2-2? No, I...

I'm not concluding the cut.

You were looking at annual performance. We're not just looking at the first quarter. How do we compare Q1 to Q1 last year? We're not using the same standards when it comes to comparing the two things. Well, it should be worse then because we were above minus 2.2, weren't we? Yeah, this is an average, a yearly average, based on last year's average. But last year, we fell, remember, at the beginning, to then climb back up. We recovered. So, at the end, we were higher. So, what you have to do now is compare what? You have to compare the situation of average activity for the first quarter 2025 with exactly the same period in 2026. You look at the Current situation, which will consider the cut, which will include the cut? Because I can tell all control. You just have to compare what's comparable.

But it doesn't work in a direct fashion, so to speak.

It's not simple because we're comparing two standards or two modes of reference that are not the same. Then you say H2 equivalent to H1? Can you re-stipulate your question? Why do we say it was equivalent? Was that your question? Why is there no improvement compared to H2 and H1 when your basis for comparison was that it was going to improve the further along you get in the year? And if you continue to look at positive staffing in Q2, well, or in Q3, You're going to bring along growth which wasn't included before that. So that gives you two good reasons to consider organic growth in ASH2, which you didn't have in ASH1, I believe. Well, in the hypothesis that we had, ASH2 in 2025, if you consider the period from September, the last quarter, then you have a basis comparison which is very high because that's where we had the strongest amount of growth and we still haven't recovered we're still not there at the end of 2025 so we're going to compare the two H2s we can have organic growth in H2 2026 we're going to have to have recovered Not only the growth that we saw in H2 2025, and we're not there yet, we're still underneath it. So our hypothesis is it's going to come back, but we're not there yet. But we believe we're going to go beyond it even. So the hypothesis adopted is that we're going to be at zero if everything goes well. and that's why we communicate on 0 and minus 0.5. This means that we have to continue growth throughout 2026. And if you look at the situation today, it's not contradictory with the hypothesis that we held before. We haven't reached there yet, but we're looking at Q1 in 2026. And we're going to catch up with and manage to get the few hundred engineers that are missing, I suppose, are lacking. But we are going to recover that level. throughout the course of the year. So when you look at the figures, it's not very easy to understand because you're looking at Q1, Q2, Q3, Q4 in 2025. You look at negative staffing over the four quarters, is that right? Yes. So if you were stepping down a staircase, for example, in 2025, you have to try and stabilise in 2026. How does it work?

No.

Hold on. Stuffing is one thing. People left the company last year because some projects were slowing down, but we've maintained a certain level of activity with a turnover in the last four quarters. which was well above what that which was anticipated. Today, it's purely mechanic. Today, we're still missing 200 projects or engineers. When I say projects, it's the number of engineers that work on these projects, obviously. A project might involve 5 people, 10 people, etc.

So, a unit of measure is an engineer working on a project.

So today, it's still below the average in the last quarter of 2025. Okay, I didn't see it like that, I didn't look at it like that actually. When we look at the total headcount, that's the figure we have, so we don't necessarily see the number of staff allocated to each individual project. And of course there are also subcontractors and external factors. We have the Phoenix Effect. Over time, we've lost quite a lot of turnover. And in Europe, and this has been substituted by turnover generated elsewhere. Now, when it comes to Germany, in reality, when you look at the contracts, these are contracts which are framework contracts. and within those framework contracts and using the guidelines of the OEM in Germany, once we've signed them and we could be asked to carry out jobs to the tune of 100 million euros, it doesn't mean that you're going to see turnover. Immediately we're looking at perspectives in Germany and I think The fact that we find a certain number of contracts with, for example, BMW, Volkswagen, etc. today in the turnover, this allows us to answer calls for tender, to be a reference candidate, and we try to win those contracts with the people in place, or the people working for us, for example, in the most part in India. But it doesn't surprise me to see It doesn't give me any certainty that that turnover is going to be made largely by the OIMs. So a couple of months ago you didn't know what you'd made, what you hadn't made, there was a certain affairs pending, is that right? Yes. Well, there are some that we did not win, others which we won, When I say we won, once again, I'd like to mention the fact that I'd like to be very clear. These are framework agreements. There's no client commitment on stacks of 300 to 500 million euros. The data has to come once the turnover is there. So they can play with the money. We've adopted certain hypotheses. regarding stability in the automotive industry in Germany to date. It's time and material activity in BMW, for example, where the gross margins are very, very low, while there, for example, we're still referenced, but we're not really competitive anymore. You have to understand that in Germany, if we maintain the automotive industry, We have to adopt a dynamic of changing the mix, you know, getting out of projects where the margins are very, very low, very weak. BMW, for example, has tightened its price list. We had to wonder, should we stay or should we go? but we also could have decided quite simply to abandon this because there is turnover but very little margin and this could actually have a negative impact on the margin for these client accounts. We remained and I think the client understands the economics of it but I think you might have who reproached us for leaving and for maybe not responding to calls for tender on work packages for projects which are slightly more exciting. So in Germany we had to adopt a double hypothesis, maintain the autoactivity as it is today, which is not bad actually, because it's still slowing down, and the other hypothesis of course has been this idea of modifying the mix, changing the mix, a gradual exit from activities which have a very weak margin, time and material, for example, and try and boost activities related to work packages, where there's going to be a stronger margin with these clients, but there are extra costs which we have to assume. Okay, one or two perhaps that you've lost, but can you quantify the number that you've won, that we've won, just so we can have an idea of, commercially speaking, we've done the job, and the doors are now open to us, or are there still things where there's a great deal of uncertainty, when not everything has been concluded and some doors are still shut?

Well,

The calls for tender, for example, come in slowly. Well, what about frameworks? Did you win the framework agreements that you won? We can, okay, we can lose one or two, but there aren't that many of them out there.

It's not, when you talk about loss, it's not neutral.

There's not one call for tender per OIM. I'm not talking about individual projects, I'm talking about calls for tender. You can have many calls for tender in one OIM. There are always calls for tender for hybrid engines, electric engines, some for different software. You have calls for tender for different parts, different pieces of the software, some for platforms, some for engineering, etc., etc., etc. It's not per client, no. No, no, no, it's not per client. Okay, thank you. I won't annoy you anymore with that, says the gentleman.

No.

We haven't seen, I don't know, maybe we're not seeing the switch to sending activities offshore. Other people are going directly offshore looking for resources through local service providers, perhaps. Again, we have to really investigate that in order to understand. But we haven't been called upon, as we might be in... in the automotive or air industry, by our clients in any way, to see if we could help them to produce offshore, that clients have their own activities. Well, most of the clients have their own contacts. Perhaps, yes, it's possible. But I couldn't really say, to be honest. It's a real topic that has to be discussed, though. There is a market trend. which is fairly counterintuitive with the business dynamic. Thank you. Thank you, Bruno. Thank you for your patience. Thank you for that question. Thank you for that debate. Are there any other questions? I don't see any other hands raised. If you don't have any more questions then, I'd like to thank you for having participated in this webinar. Perhaps some people are on holiday, I don't know. I know that for the Paris district people are on holiday. We shall meet again. I'm always available if you have any questions. Please don't hesitate to send them to me. I think the next publication is going to be the 28th of July. And then we'll look at the first semester, the first half of the year and the results and the activity. We'll talk about the economic and humane context. And perhaps I will be able to be a little bit more precise in our vision of the operational margins. and what we potentially see anyway between July and December. Have a lovely evening and I shall see you soon. Bye-bye. Thank you.