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spk07: Hello and welcome to the SPIE half-year 2024 results call. My name is Jess and I'll be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen only. However, there will be the opportunity to ask questions. This can be done by pressing star 1 on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero and you'll be connected to an operator. I will now hand over to your hosts, Gautier Louet, Chairman and CEO, and Jérôme Vanhoef, Group CFO, to begin today's call. Thank you.
spk01: Good morning, ladies and gentlemen, and thank you for attending our conference for H1 Results 2024. As you know, today is a very special day in Paris with the opening ceremony of the Olympic Games. And speaking of Olympic Games, on page 3, we recently installed a high-voltage substation at the Parc des Princes for the Paris municipality. The goal is to ensure electrical supply for incoming events while minimizing diesel generator usage. Carbon emissions will be reduced by 90% for events such as football matches through direct connection to the electrical grid. And on that same note, on page 4, SPIE has also been a key actor of the Plan Béniade aimed at improving water quality of the Seine River in Paris. We provided a wide range of electromechanical services across three shafts of a 600-meter-long siphon located under the Marne River, a tributary to the Seine. This work is crucial to prevent overflow during heavy rain and to stop the discharge of untreated water into the river. On Site 5 in Austria, SPI works on the upgrade of the electrical systems in five tunnels along the A10 highway. Our team is leveraging its expertise on this project by modernizing these tunnels with the installation of 800 kilometers of new cables for Asfinag, one of our major customers in Austria. It does reinforce SPI's position as a leader in complex technical upgrades and our commitment to creating better and safer transport networks. Site 6 in Hamburg. We are extending our long-standing partnership with Lufthansa Technik for another four years. Our team will continue to provide essential technical services, ensuring the smooth running of this critical aviation facility of 500,000 square meters, composed of 85 buildings. This renewal is really good for SPIE. It demonstrates our expertise in managing complex infrastructure and the quality of execution of our teams on the field. We have more than 150 people on these premises. And finally, on slide seven, let me present our involvement for EDS nuclear energy program. We are part of a consortium for the supply and station of diesel backup generator for the new six EPR2 nuclear reactors, which will be built across three sites in France. This project will span over 17 years and it will contribute to France's energy sovereignty and low-carbon electricity production. We are going to bring our expertise in ventilation systems, pipework and fire protection to ensure the safety and efficiency of these facilities. Throughout this project, we affirm our commitment to France's energy future and our position as a key player in the low-carbon nuclear sector. Now moving to our financial performance for the first half of the year on page 9. We did deliver another very strong performance. Our organic growth reached a high level of 5.8%. Our EBITDA margin increased by 30 basis points to 5.6% of revenue. We did pursue intense Bolton acquisition activity to further improve our geographical balance. This year, for the first time, Germany will be the first contributing country of the group, both in terms of revenue and EBITDA. This very strong H1 2024 enables us to firm up our guidance to an EBITDA margin of at least 7% of revenue in 2024. A bit more detail, our revenue reached 4.7 billion euros, an all-time high for the first half, on the back of a revenue growth of 14.4%, of which 5.8% was organic and 8.3% from acquisitions. EBITDA was up nearly 21% at 2,066 million euros. Our intense Bolton M&A led us to a 245 million euros of additional annual revenue, with two acquisitions signed in Germany in H1 and two more acquisitions announced in July. Our leverage ratio was up by 0.1 times compared to H1 2023, reaching 2.4. Looking on slide 11 to our growth per geography, We did enjoy a dynamic organic growth across all our segments. Northwestern Europe and Germany were leading the way at respectively 8.3 and 6%. Central European countries did perform very well, while Switzerland continued to be impacted by very challenging comparison basis. France's performance remained solid. Global services Global Energy Services recorded an exceptional level of organic growth at 29.3%. The impact from acquisition was particularly noticeable in Germany at 24.6%, notably with Bridging IT and Robo. It was also significant for Global Services Energy with 11.5% following the acquisition of Corel Group. Now moving to our EBITDA margin on slide 12, we enjoyed a significant 30 basis point increase with improvements across the board. France continued to increase by 10 basis points. Germany significantly rose by 50 basis points with the accretive impact of our recent Bolton acquisitions, the positive mixed effects from our T&D activities, and the ongoing quality of execution. North-western Europe materially increased by 50 basis points with a favorable mixed effect in the Netherlands, while Belgium keeps improving gradually. Central Europe recorded the highest improvement, as much as 60 basis points, thanks to the quality of execution, the strong pricing power in some markets like our T&D activities, and the outstanding performance in Austria. Global services energy remained at a high level of margin at 8.4% of revenue. Giving a bit more color per segment, starting with France on slide 13, we recorded an organic growth of 2.1% and the EBITDA margin increased by 10 basis points. This organic growth was solid considering the challenging comparison basis of last year. In tech FM and building solutions, activity continued to be driven by energy efficiency solutions, including energy performance contracts. Industry services, driven by decarbonization and electrification projects, remained resilient. City network was supported by smart public lighting solutions and public transport, while revenue from fiber activities decreased as expected, but it did remain well contained. Finally, growth in nuclear services remained constrained in H1. We will expect in due course the first contribution of the new nuclear program, following the new order for diesel backup generator I just described in my introduction. In Germany, Slack 14, the remarkable 30.6% revenue growth in H1 included a strong 6% organic growth and nearly 25% growth from Bolton acquisition contribution. It does show the success of the strategy implemented over the last 10 years. As I said, Germany becomes this year the largest contributing country for SPI, both in revenue and EBITDA. And I don't need to remind you that this is the biggest addressable market in Europe. one and a half times the size of the French market. Talking about our acquisition, Robo, by setting up of industry services activity in the country and ICG reinforcing our city networks and grid activity are performing well and they materially contribute to the 50 basis point increase of EBITDA margin in Germany in H1. The integration plans are progressing well as The other key drivers for the EBITDA margin increase are the positive mixed effect from our T&D activities and the quality of execution across the board. And last but not least, the strong 6% organic growth was mainly driven by high-voltage city networks and grid activities. Germany needs to expand the capacity of the grids and to deploy smart monitoring systems to connect Many renewable energy sources spread widely across the country. Slide 15, Northwestern Europe. We recorded an 8.3% organic growth and an excellent 50 basis point EBITDA increase. In the Netherlands, the strong performance was driven by high-voltage activities, renovation of bridges and locks, transformation projects in decarbonization, electrification, and digitalization, with blue chip customers. Belgium was supported by investment made in high-voltage and by building solutions with renovation contracts for existing facilities. And overall, Northwestern Europe was still at an exceptional level of organic growth in H1. In Central Europe, slide 16, we recorded 3.2% organic growth and as much as 60 basis points EBITDA increase. Switzerland organic growth was in negative territory following the strong catch-up of the supply chain delay in 2023. This challenging comparison basis should last until the end of the year. Elsewhere in Central Europe, we did so a very strong momentum, especially in Austria, where our markets were bolstered by tunnel and transportation infrastructure projects, as illustrated at the beginning of our presentation, and in Poland, where works for high voltage grids and modernization of public lighting were very dynamic. And finally, on slide 17, Global Services Energy recorded an exceptional 29.3 organic growth and a 30 basis points EBITDA increase. We did benefit from the ramp-up of several pluriannual contracts in our traditional operations and maintenance activities, and also from the contribution of a shutdown operation offshore sub-Saharan Africa already observed in our Q1 24 trading update. Within the segment, we launched a wind power business unit following the acquisition of Coral Group. The integration process is well on track and we foresee strong business opportunities in the offshore wind market going forward. With regard to our Bolton acquisition activity, it has been intense over the beginning of the year, as evidenced by our 80.3% external growth in the first half and already two deals recently announced for H2, Otto in Germany and Horus in France. We successfully completed three acquisitions in Germany in selected areas of expertise, totaling 320 million full-year revenue, starting with HCG, leading player in telecommunication infrastructure, including fiber 5G networks with good growth perspectives and attractive EBITDA margin. MBG, a provider of EPC services for photovoltaic rollout, mainly for rooftop installation on buildings. And finally, OTO, recently announced, which is a provider of engineering, procurement, and installation for pharmaceutical and biotech production facilities. The company has a very unique know-how and a strong track record in the sector, providing an outstanding level of profitability, the EBITDA margin being above 20%. This acquisition will be integrated by different business units of our German organization, thus spreading evenly the management efforts. And we also announced this week the acquisition of Horus, in the robust nuclear services sector in France. He's a leader and an expert in non-destructive testing, such as X-ray testing, MPI inspection, or ultrasonic testing. These acquisitions are contributing to the expansion of the group service offering and footprint density, which is at the core of our growth model. Now we'll hand over to Jérôme, who will comment on our financial performance.
spk03: Thank you, Gauthier, and good morning, everyone. I'm on slide 20 with the highlights on our income statements. These key figures underscore the very strong financial performance of SPIE in the first semester. I would particularly point out €4.7 billion of revenue with a high level of organic growth at 5.8%, €266 million of EBITDA, a strong 20.7% increase compared to H1 2023. It is the result of the combined effect of a top line growth of 14% and a significant margin increase of 30 bps, as it has been said. The adjusted net income stood at 158 million euros, up by nearly 29%. Moving to the revenue bridge, I'm on slide 21. We've recorded a total revenue growth of 14.4% in the first semester, of which a high level of organic at 5.8%, still benefiting from an inflation effect at a lower level. A plus 8.3% change in perimeter effect, representing around €335 million of additional revenue in H1, coming from the acquisition of last year for €116 million, notably with Bridging IT, and from the new acquisitions of this year, notably Robur, Corel and ICG for a cumulative amount of €220 million roundabout. Finally, a negligible net currency effect of 0.3%. On slide 22, the bottom part of our P&L evidence is a strong increase of our adjusted net income at 157.6 million euros, a remarkable rise of nearly 29%. This is driven by, of course, the strong EBITDA performance in H1, plus 21%, as mentioned earlier, a rather stable financial cost with net interest and other financial charges being well-oriented, and thanks to a large portion of our gross debt being at fixed rate, while we benefited during the first semester from a better remuneration on our gross cash. Finally, on the income tax, our normative tax rate is at 28.2%. This is 100% basis point lower than in H1 2023, but this is in line with the normative tax rate retained at year-end 2023. Now on slide 23, looking at the bridge of our net income to the adjusted net income, I would like to highlight a few points. the impact of recent companies being acquired, which translates into an increase of the amortization cost of allocated goodwill at 58 million euros in the first semester compared to 36 million euros in H1 2023 due to new consolidated acquisitions. The limited cost of integration and restructuring at €0.3 million in H1. We clearly do anticipate higher integration costs in the second semester of this year, in line with the ramping up of integration processes, notably in Germany. Acquisition costs in accordance with IFRS 3 for an amount of €6.4 million. and €5.7 million EBITDA contribution from two recent acquisitions, namely ICG and MBG, not yet consolidated at the end of June 2024. These two acquisitions, these two companies, will be consolidated before year-end and duly reflected in our full-year consolidated financial statements for 2024. Given the material... profit generation from ICG together with ING during this first period of the year. It legitimates their inclusion in revenue EBITDA and adjusted net income in our presented management accounts. Regarding the other items of this bridge, we adjusted the non-cash 53.8 million euro charge related to the Ornan that I will detail on the next slide. €8.1 million of non-cash IFRS 2 charge, as usual, linked to our long-term incentive performance plan. And finally, the implied tax adjustments based on the normative tax rate at 28.2%. As said, I'm coming back on the Ornan and especially the accounting treatment related to such convertible bond in accordance with IFRS. This semester, we recognized 53.8 million euros non-cash charge as said. In practice, this amount is split between A, the amortization cost of the derivative instrument, this is a steady charge over the period, 4.5 million euros in H1, And the impact of the change in fair value of the derivative instrument component of the Ornan recorded for 49.3 million euros in our P&L, again, a non-cash charge. This is directly related and in line with the increase of our stock price, notably at June end. the stock price being the driving factor of this fair value assessment. In the balance sheet, at the end of June 2024, the derivative component of our Ornan is consequently revalued up at 89.3 million euros, As you all know, the attractiveness of these Ornan instruments lies in its long maturity, first up to 2028, its fixed coupon, only 2%, and its low dilution potential as the conversion in cash or in share at exit, as you know, remains at speed, hands, and options. Moving to our working capital performance, we confirm again the usual entire seasonality of our working cap. As of the 30th June 2024, our working capital represents a negative 457 million euros, which is the equivalent of negative 17 days of revenue. And it would even be negative 21 days at the end of June of revenue, if we exclude especially the first consolidation impact of the recent acquisitions and notably rebours. This is an excellent performance in line with our historical seasonal pattern and reflecting our very strong permanent discipline regarding invoicing, cash collection and all the related process across the board. Moving to slide 26 and the free cash flow, as already mentioned, our usual working capital seasonal pattern translates into a negative free cash flow each first semester. But it is worth mentioning that our operating cash flow has significantly improved at the minus 79.9 million euros, but compared to more than negative 200 million euros in H1 2023. And this achievement reflects the excellent performance of our EBITDA and the lower seasonality of the working cap in this first semester 2024. Our tax cash out amounts to 78.8 million euros in H124. This is up compared to last year. Two reasons for that. First, the growing group's taxable profit basis, obviously, both organically and from external growth. And secondly, I remind you that we benefited from a one-off tax deferral at the end of December 2023 that we pointed out at that time, which is now almost entirely cashed out since that date, representing nearly 20, 25 million euros. This good performance of EBITDA in working cap cascades to our free cash flow in H1 with clearly lower cash consumptions by nearly 100 million euros in comparison to the previous year. Finally, as per Our capital allocation policy fully self-financed its M&A activity, which translates into 722 million euros cash out in H1. Thus, in the end, a total change in our net debt over the first semester of minus 1 billion and 42%. million euro this leads me to directly move on to the leverage ratio slide 27 our leverage ratio excluding ifrs 16 was up 0.1 time at 2.4 times at the end of june 24 this is in comparison with 2.3 times at the end of june 2023 So while we self-financed our intense M&A activity in H1, as said, with more than 700 million euro cash out, our leverage ratio finally had a quite limited increase at the end of June. This is mainly thanks to the lower working capital seasonality effect that we had over the period. Obviously, our last year, And our last year end, sorry, leverage ratio, which pointed at 1.2 times, would increase more significantly at the end of this year, 2024, while we hereby reiterate our commitment to clearly maintain a strict, disciplined financial policy. Slide 28, to follow up on the financial structure. The group has a very solid balance sheet with a well-diversified debt structure, no upcoming maturity before June 2026, and obviously very attractive financing conditions. In H1, 77% of our debt is at fixed rate with a stable weighted cost of our gross debt standing at circa 3.4%. SPI proactively maintained a high level of liquidity, it's above €1 billion at the end of June, and notably with the extension and increase of our revolving credit facility, which stood at €600 million historically, now up to €1 billion and with a maturity extended in 2029. Finally, our long-term corporate credit rating, granted by Standard & Poor's and Fitch, remaining unchanged at BB+, both with stable outlook. I now hand over back to Gautier.
spk01: Thank you, Jérôme. Before we move to the 2024 outlook, I would like to update you on our ESG commitments and the rewards of our external ratings. And I highlight the progress with MSCI, which has upgraded speed rating to A in June 2024, compared to BBB last year. On slide 31, focus on the group carbon footprint reduction. To achieve our 2025 targets for scopes 1 and 2, we need to electrify our fleet of vehicles, which represents nearly 90% of our direct emissions. In H1, 74% of the vehicles we ordered were BEV, up from 54% at the end of 2023. On Scope 3, the proportion of emissions related to our procurement made with suppliers who have set ambitious targets to reduce their carbon footprint has increased to 52% at end June 24, compared to 47% at the end of December 23. I do salute the work of the teams who are in continuous dialogue with our numerous suppliers to support them with their own progress. And as you can see, we are fully mobilized to deliver on our sustainability 2025 roadmap. Now moving to our outlook for 2024. We see the very strong H1 2024 results give us confidence for the full year. In terms of organic growth, we anticipate a good dynamic in H2, albeit as expected, at a slower pace compared to H1. We frame up our EBITDA margin target to at least 7% of revenue, representing a minimum 30 basis points improvement. We're able to deliver this performance on the back of our carefully selected button acquisition, our proven pricing power, our highly selective approach with contracts, and our unabated focus on operational excellence. We will organize an investor day in 2025. Now that we are reaching one year in advance, our 2025 financial targets. So you might allow me to congratulate our teams for this outstanding performance, and as I keep saying, it is a good time to be an electrical engineer. I thank you for your attention, and now with Jerome, we will be pleased to take your questions.
spk07: If you would like to ask a question, please press star 1 on your telephone keypads. Please ensure your line is unmuted locally, as you'll be advised when to ask your question. So once again, that's star one if you would like to ask a question. After this question, it comes from the line of Alexander Peter from Bernstein. Please go ahead.
spk05: Good morning, and thank you for taking my question. I just have three. The first two are quite related on M&A. You had close to record levels of M&A activity in the first half. Do you expect this space to continue into the second half or should we expect a pause and consolidation for the remainder of the year? The second one is just on the pipeline of M&A targets. If you could share the geographies where you see most opportunities or where your focus really is going forward and what's the average size in terms of revenue of the targets you're looking at at the moment. And then just finally, assuming no further acquisitions between now and year end, where would you expect your net leverage to be? land by the end of the year. Thank you very much.
spk01: Thank you. We had a very good M&A activity in the first half, and we have a very interesting pipeline ahead of us in several geographies. Obviously, we are very much aware of the need to carefully integrate this acquisition, so we do also pace the acquisition with the available bandwidth for the management and clearly this is something we have in mind and will bear on some pace for the balance of the year, not meaning that we are not preparing more things for a bit later, obviously, because this process always takes time and it needs a lot of time to really align with the management of the company you want to buy, which is an important step for successful integration later on. We have targets, as I said, in all our geographies of various sizes, and clearly Germany remaining the main focus, but it's not the only one. And our markets, especially in Germany, are still very much fragmented, and we have companies of various sizes which are well run, well managed, well positioned and fairly attractive. But also we need, as Jerome mentioned, we need to be very aware of the financial discipline and especially in terms of the leverage we level, we want to maintain and this is something which remains at the top of our mind in every decision we take.
spk05: Thank you very much.
spk07: Your next question comes from the line of Remy Grenou from Morgan Stanley. Please go ahead.
spk04: Yes. Good morning, gentlemen. A few questions on my side. So first on Germany specifically, I think it accelerated that as you flagged it would in Q1 publication and you're flagging that you expect server ramp-up in TechFM in that country. So maybe you can elaborate a little bit on what's driving that and quantify that a little bit and also maybe give us more flavor on what's the outlook for Germany over the rest of the year in your view if we can expect this acceleration to kind of continue our stable organic growth going from there. The second question is on TND specifically in Germany. Can you make some comments on the backlog. If you have additional work ramping up or additional contracts, what's the short and mid-term expectation there? And also, if you could help us quantify the positive mix effect that you're referring to from TND within this 50-bit improvement in Germany, that would be great. Thanks.
spk01: So regarding TechFM, which is a trend that we observe in Germany, but not only. We are important players in TechFM in France, in the Netherlands, to some extent in Belgium. And the trends are similar and mainly driven by energy efficiency considerations for our customers and also adapting to the new ways of working with customers. way more communication technology in the offices. But really the energy efficiency decarbonization is a very strong driver which entails a lot of modifications, upgrades, a lot of digital input as well in the buildings and it does support our growth. The backlog in transmission and distribution in Germany It's very good and it's increasing all the time actually. The trend in transmission both for overhead lines and substations remains very strong. There's a high level of investment, a high level of projects coming to the market and being launched for tenders by the customers. And so we keep building up our backlog. So this is very positive. And yes, it has a positive mix impact in terms of margin, but I don't think I will go too much into details in terms of quantifying this impact on the margin altogether.
spk04: Great. Thanks. And just one, if I may, just to follow up on something you said at the very end of the presentation. Did I get that right, that you said that you expect organic growth in the second half to be slightly slower than in the first half, or are we talking on a year-on-year basis?
spk03: Yes, very clearly, Rémi, I think that's what has been said. The pace of the organic growth H2 in comparison to H1 would reduce, would slow down.
spk04: Okay, understood. Thank you very much.
spk07: The next question comes from the line of Eric Lemary from CIC. Please go ahead.
spk02: Yes, hi. Good morning. Thank you for taking my question. I've got three. The first one, regarding pricing power, could you tell us more about its impact on pricing, off pricing on the top line growth and on the EBIT margins? Second question, regarding acquisition, could you confirm or not that you continue to pay the same kind of multiples you used to pay, around six times the EBIT, and how do you see the multiples going on in the future? And the last question on the difference of EBIT margin in Central Europe versus the rest of Europe, in France, Germany, etc., Is there any reason why you should not generate the same level of margin in Central Europe compared to the countries in Europe? Thank you.
spk01: So, regarding pricing power, it is linked with a strong demand, and we have shown over the past years, I think, we have shown very clearly how we are able, A, to pass inflation to the customers, and B, even a bit more price increase as only the inflation, so that was a very strong trend and we do see the inflation is abating now, but we are still able to improve the margins on the back of better prices, which are linked with selectivity, positioning in terms of contract negotiations, etc. It has a positive impact on the margin, clearly, and it's one of the reasons why the margins are progressing across the board. The multiple of acquisition Jerome will answer, and what was the last part of your question? The EBITDA margin in Central Europe. The EBITDA margin in Central Europe, yeah. It is... But we see Central Europe is more recent in terms of coming to the group, and it has also grown with acquisitions. We are reaching very good progress in the countries where we are large enough, like Austria, where the margins are really excellent, and Poland, where they are very decent as well. The smaller countries, well, obviously, it's a bit more difficult. This is why, overall, the segment is not the first one of the group in terms of margin, but yet we are making very decent progress, and this segment should show a very small dilution compared to the average going forward.
spk03: On the other question, clearly, permanent discipline on the multiple evaluation we consider for acquisition. There is a certain range, which is rather steady over the time. I mean, from five times or to the upper extent, up to high single digits. It will really depend on the quality of the target, its gross profile, its profitability level of expertise. And all this being factored in, we are playing in this range. In the end, all our acquisitions remaining accretive on the EPS day one. Thank you.
spk07: Before we take our next question, as a reminder, please press star one if you'd like to ask a question. And our next question comes from the line of Rory McKenzie from UBS. Please go ahead.
spk00: Good morning. It's Rory here. Three questions, please. Firstly, on France, have you seen any impact on your clients from the political uncertainty? And are there any areas of your business that could be sensitive to any policy changes, I guess, particularly in your public sector exposure? Secondly, as you said, Germany is becoming your largest country now. Do you think that that should be the highest margin country in the group? Historically, I guess we've thought about country size, density, and mix as being important for margins, and Germany now has all three. So what are the long-term thoughts of the margins there? And then finally, just on the really strong organic working capital improvement in June, are there any aspects you think might reverse in H2, or do you think that that's just a good structural improvement, and so we should also expect a strong full-year organic working capital as well? Thank you.
spk01: Yeah, thank you, Roy. So for the political situation in France, well, first, as you know, exposure to public sector is roughly 20%, and it doesn't really budge from one year to the next. Basically, obviously the political uncertainty doesn't help, and it creates or it will create a bit of uncertainty hesitancy amongst our customers. This is something we have to recon. I don't think it will be major either. And as you know from what I've seen in the past, in more difficult times, by the way, the business is extremely resilient with a large amount of recurring contracts, small contracts, mission-critical services. so we are not overly worried. But it is also why it is important to have a good geographical balance, because then other countries are in other dynamics, and clearly it does help the solidity of the group. Clearly, it has always been the aim to improve the geographical balance, and that's why I'm very pleased that this year Germany is becoming the first contributor to the group in terms of revenue, in terms of EBITDA, and in terms of EBITDA margin this year. If it's not this year, it will be next year. But I think it might be also as soon as this year that they deliver the best margin in the group.
spk03: Regarding the working capital question, well, there's no miracle on this good performance at mid-year. It's clearly driven by... The invoicing, our ability to invoice, to collect cash on trade receivable, to maintain low overdue and so on. is that good performance will stay and will generate positive upside for the end of the year. We stay very cautious. At the time, our observation is whether our ability to lower this year the swing of our working capital seasonality with the ending point at the end of the year remaining as per our plan, meaning a target of cash conversion of 100%. Great. Thank you both.
spk07: The next question comes from the line of Sylvia Barker from JP Morgan. Please go ahead.
spk06: Thank you. Hi, good morning, everyone. Three questions for me, please. Firstly, just a quick follow-up on the organic growth question for the second half. Would you just clarify if you expect that rate to be slower than Q2 or H1, given Q1 was a bit higher? And then secondly, would you be able to comment on the margin impact from M&A for the full year, so what's baked into that margin guidance? And then finally, given Germany is now a lot more diverse and you seem to be getting a range of different sizes and lengths of contracts within T&D, would you be able to comment on the average contract value and length of contract in Germany today and maybe how that compares to five years ago? Thank you.
spk01: Yeah, so regarding the organic growth for the second half, as we said, it will be at a lower pace than on H1, and this is what we are expecting at the beginning of the year, and obviously this is what we are still anticipating. So yes, it will be lower than in H1, definitely, yeah. But you see, it's still a very good momentum, so there's nothing to worry about. But it will not be as high as H1, that's for sure.
spk03: Again... Yeah, one question regarding the accretive impact from M&A that you raised. Clearly, it will slightly ramp up across the year. And for the full year, I think it is fair to consider at least 15 bps, let's say, or above 15 bps of EBITDA margin increase, thanks to the impact of M&A.
spk01: And regarding the contract in Germany, Germany is no different from the other countries, except in transmission, where we do... First, we are getting fairly large in this area now, on the back of contracts which are usually a bit more bulkier. We're talking 30, 40, sometimes 60 million euros, spanning over several years. Again, the focus of SPIE is on small contracts, framework agreements, and recurring customers. These are recurring customers. We have four customers for transmission in Germany. It is the same contract all the time, in terms of legal terms, and it is the same technology project, and it's a succession of a line with a very well-trained team. So you see we are comfortable with the fact that we are addressing larger projects at very good margins, for transmission in Germany. But apart from this, which is different from what we see elsewhere, clearly for the balance of the business, it is the same. It is a lot of recurring contract maintenance, framework agreement, churn work on maintenance contracts. So we're still looking at an average size, which is small. And as I remind, for the whole group, the average order size is 30,000 euros.
spk06: Thank you very much.
spk07: We currently have no questions in the queue, so as one last reminder, please press star 1 if you would like to ask a question. We have no further questions in the queue, so I'll hand the call back to your hosts for some closing remarks.
spk01: Well, thank you very much for your attention this morning. I think it's in good shape, and I'm really pleased with the quality of the work delivered by all our teams in all our activities. And in case you forget, let me repeat, it is a good time to be an electrical engineer. Thanks a lot. Have a good day.
spk07: Thank you for joining today's call. You may now disconnect your lines.
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