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Hello and welcome to the Solutions 30 2021 Q2 revenue call. My name is Rosie and I'll be your coordinator for today's event. Please note this call is being recorded and for the duration your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star 1 on your telephone keypad to register your question at any time. If you require assistance, please press star zero and you'll be connected to an operator. I will now hand you over to Gian Beppe Fortis, CEO of Solutions 30, to begin today's conference. Thank you.

Thank you. Good afternoon, everybody. Thank you for being with us for this presentation of the first half 21 revenues. Let's go to the first slide first. Okay, so we had a very good first half performance with an increase of a little bit more than 20% of our revenues. Almost all of that is organic. That is just a little contribution of the external growth, some small external growth that we did at the end of 20, in particular in the U.K., And we are up by almost 40% compared to the first half of 19. This organic growth is strong in particular in the countries where we had startups of new contracts, Benelux, Italy, and Spain. And what's also important is that we had a very good sales performance in the second quarter of the year. with about 300 million euros of new contracts signed, which means that our clients and our prospects keep adding confidence in the company and are happy to give us new business. Next slide, please. Amaury, you may want to continue from here to comment the figures. Yes, thank you.

Good afternoon, everyone. Thank you, GMBP. I will now comment slide number five. The group generated a revenue of 441.2 million euros during the first half of 2021, up by 20.8% in comparison with last year. Maintenance activities which are recurrent represent 58% of the group revenue and this growth was actually mainly organic over H1. Organic growth accounted for 85% of the total growth and many results from the increasing volumes of work orders that we received from our customers and from the large contracts won by the group over the last months all across Europe. The M&A contributes to 12 million euros or 3% to the ITR revenue. It is mainly derived from the deals that the group closed at the end of 2020 and especially convergent in the UK. Next. This growth has actually been very strong all across the geographic segments. and even accelerated during the second quarter, where the group reaches €360 million of revenues, which represents an increase of 22.9%, out of which 20% is organic. This strong organic growth is actually driven by the major energy contracts signed in Belgium at the end of 2020 and by the telecom contracts signed in the first half of 2021 in Italy and in Spain. All these new contracts were in a ramp-up phase, and that is why you can see a strong acceleration of the revenue in Q2, going up to 21% in Benelux and almost 37% in the other countries. At the operational level, the priority was therefore to invest in recruiting and training teams in order to address the significant increase in workload coming from these new contracts, and also to support the rollout of these new technologies in Europe. Another consequence of this important contract is that the group also accelerates its geographical diversification, since for the first time, the French revenue only accounts for less than 60% of the group revenue, and this despite a very solid growth of 20.5% on this first semester. On the next slide, we will now look a little bit deeper at the development of the revenues in each region. On the next slide, you have a split of the revenue in France across the different verticals. And actually, all the business segments have been very dynamic. In the telecom business, revenue amounted to 194.7 million euros on H1, an increase of 22% compared to the first half of 2020. The business actually remains driven by the fiber deployments. and an increasing number of subscribers to high-speed internet connections. For the energy business, revenue reached 44.4 million euros, representing an organic growth of 18%. And this is notably the result of a positive base effect on the one end, but also on the other end, our activities related to the energy transition and to the electric mobility are also gaining momentum. During the second quarter, more than 30 million euros of new contracts in this domain were actually awarded to Solution 30. The IT business posted a revenue of 21.9 million euros compared to 17.7 million euros for the same period in 2020, while the security and payment business posted revenue of 9.3 million euros compared to 9.8 million euros a year before. These indices were actually the most affected by the lockdown measures as a result of the COVID pandemic. They are now gradually returning back to their normal levels of activity. And this trend is confirmed on the second quarter of 2021. On the next slide, you can note that in the Benelux region, the activity was also very dynamic. with this growth accelerating significantly at plus 21% during Q2. Revenues were actually boosted by the energy segment and the start of our new contract with Flujus for the installation and maintenance of smart meters. The activity actually started in March and month after month, our teams have been able to recruit and train more and more technicians and eventually to manage more and more volumes progressively. The activity on the energy segment was actually multiplied by four in comparison with last year during the second quarter. Regarding the telecom business, the revenue grew organically by 9% during the first half of 2021 and reached 57.8 million euros. In Belgium, the deployment of ultra high speed networks is just beginning and volumes should continue to increase. Next. In the other countries, revenues went up by 29% in H1 and even 37% in Q2. In Germany, H1 revenue amounted to 31.6 million euros compared to 32.2 million euros one year before. In this country, the trend remains very good and we expect the broadband deployment to begin by the end of the year. In Italy, revenue grew by 54% over H1 and even plus 77% over Q2. And that is related to the rapid ramp up of the contract signed with Telecom Italia for the deployment of fiber in the north of the country. In Spain, revenue grew organically by 44% over H1 and plus 68% over Q2. This growth is mainly driven by the increasing volumes of work orders we received from our existing customers both on the fiber and the 5G business. In Poland, the group posted a revenue of 11.6 million euros for the first six months of 2021, which is stable in comparison with last year. Finally, the group generated a revenue of 7.4 million euros in the UK, where we have been operating since December 2020. I will now leave the floor to Giambetti that will comment the outlook for the group.

Thank you, Amaury. Yeah, the outlook remains very good for the rest of the year and also for the following years. Please go to slide 12. Thank you. Let me remember, first of all, the transformation plan that we have launched during the summer. We now have our new auditors, PKF, who's been approved by the last shareholders meeting. And they have begun auditing our first half 21 financials. And we plan on publishing them at the end of September. We have also launched a couple of weeks ago our GRC program as announced. The aim is to improve and strengthen our internal procedures related to compliance and governance, so that we will be able to continue growing like we did in the past, but with some stronger fundamentals in terms of internal processes. So for the rest of the year, we expect again growth. So we have done double digit growth since the beginning of our activities back in 2003 and 2021 will not be an exception. even though the second part of this year is going to have a less favorable base for comparison, because in second half 2020, there was a strong catch-up effect after the lockdowns between March and May last year. We have put on hold M&A activities at the moment because of the current situation, but there is many opportunities, and we will resume M&A as soon as possible, certainly in 2022. We confirm that the main trends behind our activities have made very favorable, in particular the investments in the telecommunication infrastructure all across Europe. Fiber is the first one, but 5G is also important. We have a good experience in this sector in France, and France is advanced compared to most of the other European countries, which are today where France was in 1718. So we believe we can duplicate the performance that we did in France in the other geographies. And it's similar for the investments that are happening now in the energy sector. where electric cars are becoming a priority for all the European countries. And the bottleneck now is the infrastructure that is needed to distribute electricity and charge the cars. And we are well positioned in these two segments, telecom and energy. And we are pretty sure that the big investments that are going to last for decades, I would say, are going to sustain our growth for quite a while. So our target of 1 billion euro revenues is getting closer and closer. We are done with the presentation. We let you ask questions, any questions you may have.

As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Should you wish to withdraw your question, you can press star 2. You will be advised when to go ahead. So again, it's star 1 on your telephone keypad if you would like to ask a question on the phone lines.

And if you could please stand by for the first question. We currently have no questions coming through, but as another reminder, please press star 1 on your keypad if you do have a question. Thank you.

Okay, we've got no questions coming through on the phone lines at the moment, so I will now hand back to you for any webcast questions.

I think we have one question. Let me read it. Where do you stand in the process of finding an uncle shareholder? Has Rothschild started his mission? So the answer is yes, Rothschild started his mission just after the shareholders meeting in July. Now we are in a preparation phase. So basically we are preparing all the documentation and the information that is needed for potential investors. But now it's the summer, so we will enter a more active phase after the summer and certainly after the publication of our certified accounts at the end of September. So you will have more news in the last quarter of the year. Do you think you will be able to have certified accounts for the half-year results? Yes, we do believe that we are going to have certified accounts. Amaury, you may want to comment on that.

Yes, thank you, Jean-Pierre. Well, I just want to say that we are actually working on that together with our new auditor. There's no reason why we should not get satisfied accounts by the end of September. Everything is progressing according to the plan up to now.

We have another question which is why don't you launch a share buyback program? Why is the management not buying shares? Well, management is not buying because we're going through pretty rough times and basically the advice of our lawyers was not to touch any shares because we have basically inside information every day or so. So the position was not to do anything on shares for the management. And as Solutions Turkey, we decided not to buy shares, even though we have the possibility to do it, because an important part of the procedure that we have opened is the relationship with our banks. So at the moment, we prefer to concentrate our cash for the development of our activities. As you've seen, we had a strong growth in the first half of this year. And we need cash to finance the ramp-up plans in the different geographies. So priority at the moment is to use cash to finance our organic growth. Okay, then when do you expect to distribute dividends? Well, the answer here goes with the answer that they just gave. Priority today is to use our cash to finance our growth. As you've seen, strong growth in the first half. New geographies that don't have yet the critical size that are doing strong ramp-ups. This year we are going to hire, between own employees and subcontractors, probably 3,000 people, maybe more. So we need cash to finance our growth. That's the absolute priority. Another question, any news from the legal procedures in France and in other countries? No, in France, we have opened three procedures, one with the regulator, second one with the Court of Paris, And then there is another one for defamation. They are moving ahead, but we do not have particular information. And concerning the procedure that is open in the US, in California, that's not us. It's one of our partners who has been accused of wrongdoing. So he has initiated the procedure, but it's not us. Another question, can you give us some guidance on your profitability objectives? Amaury, you may want to take this one.

Yes. Well, as I said earlier, our priority for all the group was actually to manage the important ramp-ups that we had to operate in different countries, in Italy, in Belgium, in Spain. So, you know, we have been focusing on recruiting, training new technicians, putting them on the field, and they are improving their productivity over time. So we have no concern about the margins, but just have in mind that, you know, the countries where we were awarded with these very large contracts were countries where we had, you know, margins below the group average. In this context of strong growth, it's hard to improve the margins in these countries, but then profitability will continue to go up once we have digested these numbers.

Okay, other question, where do you stand with the conciliation procedure? Can you remind us the goals of this procedure? What about your relationship with your banks? Well, the procedure is a, is a good way to have a discussion with different stakeholders of the company in a rational environment. There has been too much of tension in the media for our company, and there has been certain behaviors that have not been rational, I would say. So now with this procedure, we have managed to put together our stakeholders and have rational discussions. Important stakeholders are, of course, our banks. They have a big advantage compared to other stakeholders because they see the cash that they're seeking on their bank accounts and they see that it's real. They also see the flows of cash and they see that there is nothing abnormal. So they are, I would say, very supportive. So the relationship with them is doing well. Other important stakeholders are the auditors. The two main missions of the consolidation procedure is, on one side, to make sure that the banks are comfortable, and on the other side, make sure that PKF, the new auditors, can have a good transition with EY, our previous auditors, and begin working in good conditions. And this is happening, actually. So there is no showstoppers. Things are going well. And we think that has been a good idea to open this procedure. The discussions with both auditors and banks are doing well with the help of the court. Another question, your outlook mentions the aim of adding new management and control procedures. Does that imply a potential change in the governance of the group? No, that's not the case. It's really the... The focus is really on the procedures. We just want to have stronger procedures when it comes to management of any third parties, whether it is subcontractors, whether it is related parties, just make sure that the compliance and the governance related to those parties is strong and documented and reliable. So that's really the main objective of this project. In terms of governance, the only thing that we want to do, because we promised it to our shareholders, is to increase the number of supervisory board members. And we said we couldn't do it before the shareholders meeting. Now we are waiting until we have certified accounts, and then it's very likely that we will propose to our shareholders new board members to increase the size of the supervisory board, and then adding having a couple of additional committees that we also promised to have, and it's pretty tight to have only six board members. So the only news concerning governance would most likely come at the end of the year with the suggestion of some new board members, supervisory board members. Can you confirm that you will focus on internal growth this year, no acquisitions in the pipe, Well, we have targets in the pipe, but it's unlikely that we will push them. Our priority now is really organic growth. We also want to be cautious because of the fourth wave of COVID. So we're not sure how the summer is going to be. and the back to school is going to be. So we are not pushing M&A at the moment, but opportunities, there is plenty of opportunities. So we will push again M&A as soon as possible. Certainly next year we will do again M&As. Could you please grant details on what your role could be within the electrical vehicle space? Any discussions already with potential clients in that space? Well, our role is to install charging stations and then maintain charging stations. It's something that we have begun doing already in the second part of 2020. And we continue now. As I said before, in the second quarter of the year, we had a very good sales performance. And some of that is related to new contracts for the installation and maintenance of charging stations. It's basically pretty much the same. We are a service company. We are there to install equipment and provide assistance to people that use such equipment. It's going to be the same for the charging stations with a particular focus on charging stations that are used at home and at the office where big volumes are expected. We really expect this segment to become important already this year and especially in the following years. Do you believe that Solutions 30 will be a much stronger company after the dust settles down? Any horizon for that to happen? Well, we are committed to develop our company in a sustainable way. And that means taking actions from the operational side, but also taking actions from the governance side. So, you know, every day we grow a little bit stronger on the operational side, on the governance side. So definitely, you know, the company will be stronger in three months and stronger at the end of the year. It's now very clear for us that governance is a focus point. It's one of the priorities that has been taken by Robert Ziegler, who joined us recently on the management board. So yes, so the company will be stronger in the coming months. Another question. Could you please provide more granularity regarding the 300 million euro new business that you added in Q2 by end market or client, for example? Do you expect another acceleration cyber optic to roll out in France on H2 or should it grow more slowly? General sales are stable on H1. When do you expect sales to develop more significantly? Should we wait for FTTH investment to ramp up first? And then could you provide more color regarding background of the extraordinary shareholders meeting? Okay, so let me go through it, maybe with the help of Amory on the first question, but I can begin with the second and the third, Amory, if you want to, and then you will reply to the first. So on the second point, acceleration of fiber rollout in France in the second half, I don't think so. The first half has been quite strong, like the second half of 2020. In the last 12 months, this is the number of March, end of March. So in the last 12 months, at the end of March, France deployed one million connections. uh which is really you know stronger than um uh what was uh expected uh so the last quarter was one so it was an around rate of four millions in in the last 12 months that was stronger than expected so i i think that now the situation should be should be more stable so we are not expecting a fast one pop in france in h2 in germany uh saves a stable in the first house and yes germany is beginning to invest in telecom infrastructure and energy distribution infrastructure, but not as fast as other countries. So we are seeing now ramp-ups in Benelux. We are seeing ramp-ups in Italy. There is good dynamics in Spain as well. Germany is a bit slow, like always in the past. So it's coming, but not as fast as the other countries. And yes, the first ramp-ups will be fiber. Concerning the extraordinary shareholders meeting, well, all the resolutions have passed. We had about one-third of the shareholders casting votes. And you have the details of the results on our website. You have all the details on our website. Amaury, can you comment the first question?

Yes, the question was about the 300 million euros sales that we announced in our press release or in the presentation today. So basically, the drivers still remain the telecom and the energy business. So in the telecom sector, the telecom sector represents approximately two-thirds of these additional contracts. And I would say that the three main countries in which we have a large contribution are UK, especially in the mobile business for the installation and maintenance of 4G and 5G antennas. We also do have large contracts for the deployment of fiber across Belgium and across Spain, which account for a large part of this of this additional contract. Then we have approximately 30% coming from the energy business and almost all of them are related to the installation of, well, I would say, sorry, three fourths are related to the installation and maintenance of charging stations all across Europe. We have been awarded with contracts in that field in all the countries where we operate. And the last quarter of the sales in the energy are related to the maintenance of smart meters, mainly in France and Benelux. Then in the total, out of the total, we do have a small remaining part of new contracts related to our IT assistance business. And these contracts are actually pan-European contracts concerning different countries.

Thank you, Amaury. Other question, do you plan to make capital increase soon and for what purpose? No, we do not plan any capital increase. The resolution concerning the extraordinary shareholders meeting was the possibility to have a certain amount of capital that we could uh increase uh without going through a shareholders meeting again but it's something that is a statutory provision that that we have since the beginning of the company and we do not plan on using that except if we need to issue some shares for an acquisition but you know it's going to be very similar to what we did in the past we prefer to buy cash and then issue shares only if we want the sellers to be engaged with us for a while. And in that case, we pay part of the acquisition with shares of solution 30, but it's a very minor thing. So the answer is no, we do not plan any meaningful capital increases in the future. um other question was what is your lender's position on the publication of the certified accounts by september it is correct they require publication of certified accounts by june will uh pkf um certify accounts for 2020 or only first half 21. i'm already i think this is really for you yeah i can i can take it

So your first question was whether it is correct that the lenders are requiring publication of certified accounts by June. This is false. This is totally false. We have a transparent dialogue with our banks, with our lenders, and they are very supportive. We have a very good relationship with them, so we have not been able to provide certified accounts by the end of June, but they keep on bringing their support to the activity in order to finance this 20% growth. And we communicated with a lot of transparency on the transition of the auditors, on the reasons that EY brought for their absence of certification, and we still do have a good relationship. What now we are committed to is to provide the certified accounts by PKF by the end of September, so that this is clear. So, PKF will obviously work on the out-year 2021 accounts, but because of the accounting standards, Their scope of work includes mandatory, it's compulsory for them to review the opening balance sheet of 2020. And especially in the context where you don't have an opinion from the former auditor, you need to perform your own diligence in order to build your own opinion. And this is absolutely critical and this is just compulsory because if you want to provide an opinion on the P&L, on the cash flow statement, on all the notes related to the financial statements, then PKF needs to have its own view of the 2020 accounts. They are currently reviewing all the working papers of EY. This is part of the transition process in order to build their opinion. So they will have to check and make sure that all the cash position was correct, the debt position was correct, and that all the, you know, financial aggregates were correct. So this will be part of their audit report that will come in June.

Thank you, Amaury. I think we have another question, but by phone. So I think we need to go back to the operator to add this question.

Thank you. So just before we go to that question, if I can remind everyone again, if you do have a question via the phone lines, you can press star one on your keypad. And this question comes from the line of Remy Grenou from Berenberg. Please go ahead.

Good afternoon. Actually, I had a few questions that you covered them all on profitability and activity in Germany and the UK. So that's all fine on my side. Thank you. Thank you, Remy.

okay so again we have no further questions currently coming through so i'll hand back to you for any further questions on the webcast okay we have another question uh why is your fiscal year guidance not stronger given the euro 100 million of annual contract value equivalent in new contracts one in q2 um well we usually don't give fiscal year guidance And the other thing is that the preparation and the ramp-ups of our activities can be quite long. So the 100 million worth of contracts that we have signed in Q2 are not necessarily coming into production or contribute significantly in the second half of this year. Another question. La Mediatrice de Communication Electronique says that there are lots of fiber last kilometer installation that are not done properly. Do you feel touched by this criticism? Well, you know, we are in a business where perfection is impossible. But we do have several KPIs related to the quality of the service we provide to our clients. And we also measure customer satisfaction. I would say that our performance is quite good. So we are among the good players in this field. And it's something that our operations follow very, very closely down to individual level for each of the clinicians. So it's not perfect, but I think we are doing a good job compared to competition. Another question. You mentioned a rapid growth of EV chargers installation. Which countries are the most likely to deliver big orders in the coming months? It's everywhere in Europe. I would say the most advanced countries are, well, the most advanced region is Benelux. It's something that is very strong up in the Nordics. Holland is growing strongly, and then south of Europe is more slow. But it's something that we are seeing all across Europe. Other question, on top of giving details of your plan to benefit from the transition to EVs, could you come up with expected long-term gross margins on average per business? Amaury, I don't know if you can comment on this.

Do you see... No, especially where we are in the ramp up. Actually, the main driver is not related to the business we operate in because at the end of the day, the job remains the same. We are providing technical assistance and so at the end of the day, we are paid. The payment we receive is related to the time required to operate our installation or our maintenance operation. So the main, the main driver actually is, uh, the, the, the size we managed to get the density we managed to get in, in, uh, in a country because our technicians are usually materialized between the activity. So they can, you know, change an internet box, uh, in the morning. And then just after, uh, going to place in order to install, um, uh, a new charger, for example. And so I would say that the main driver is the travel time that this technician will have between these two interventions rather than the nature of the intervention. So I would rather say that we need to look at the overall volumes we managed to get in one country and see the impact of this increasing volumes in a country. the impact on the profitability.

Thank you, Amaury. Another question, do you experience some contract losses since the beginning of the year? What about the relations with your historical partners? No, it's positive. We are positive on that side. As you can see from the figures of the revenues of the first half and second quarter, I think that that's the best answer we can give. So no losses of contracts. And the relationship with our historical partners are good. The CEO of Enedis has had a question on TV a couple of weeks ago. She's been very positive on Solutions 30. And it's the same for all of our clients. They know us well, and they keep supporting us. So no problems from that side.

Do not see other questions.

I think, well, it's one hour now, so I think we are at the end of our presentation. Let me once more thank you all for being with us today. As I said before, we have had a pretty good first half of the year. with 20% growth compared to 20. And we are sure that 21 is going to be, again, a year of double-digit growth, double-digit profitable growth. So thank you very much for investing in our company and supporting us. Thank you. Have a good afternoon.

Thank you, everyone, for joining. And you may now disconnect. Thank you.