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Hello and welcome to the SPEEQ1 2025 revenue call hosted by Gautier Louet, Chairman and CEO, and Jérôme Vanhoef, Group CFO. Please note this conference is being recorded for the duration of the call. Your lines will be on listen only. However, you'll have the opportunity to ask questions after the presentation and this can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please reach out to an operator. I will now hand you over to Mr. Gauthier Huet to begin today's conference. Thank you.

Good morning, everyone. Thank you for joining us today for our Q1 results conference call. So SPI has made a serious start to the year with encouraging momentum across several of our key markets. And in the current volatile macro environment, the underlying trends driving our business remain very much intact. We are nearly 100% European service business with no direct exposure to the tariffs currently discussed. To begin, I would like to show a few recent contract examples that reflect this positive momentum. So in Germany, we're awarded three new contracts in Baden-Württemberg as part of Netze BV, grid extension program. These projects include one greenfield and two brownfield substations, including line connections, with completion expected by 2028. They are key to integrating renewable and ensuring a more stable electricity supply in the region. Once again, this illustrates our strong positioning in high-voltage infrastructure in Germany. In France, SPEICF has designed a new generation virtual campus for the ICAM Engineering School. It enables 4,500 students to connect to a digital workplace from any device with improved performance and accessibility. This platform combines Citrix, Nutanix, and NVIDIA technologies and reduces the carbon impact by 75% compared to the previous solution. It is a very good example of how digital solutions can actively support sustainability goals. And on slide 5, also in France, we operate on the Saint-Dizier Air Base 113 through a one-speed contract that integrates electrical and automation works as well as cybersecurity. This contract showcases our strong offering to the defense sector which is likely to benefit from increased budgets, particularly so in Germany. SPIE Global Services Energy has been selected by Van Oort for the Ecovende offshore wind project. This is offshore Netherlands. Our teams are handling cable termination and testing for a wind farm, which will supply 660 megawatts of green electricity covering around 3% of the Dutch green energy consumption. This contract illustrates our successful diversification into offshore wind services. And now turning to our numbers on slide 8, speed delivered the third start to the year, with revenue up 8.5% in the first quarter, organic growth reached plus 2.1%, on top of a demanding 6.2% basis of comparison from Q1 last year. In the current macroeconomic context, our fundamentals remain unaltered. We do continue to benefit from good long-term trends in the energy transition and devitalization. In terms of Bolton M&A, we closed two acquisitions and recently signed a new one, integration of all 2024 acquisitions are progressing as planned. Looking into organic growth by region on slide 9, Germany continued to deliver very strong growth in Q1, both organically and from recent acquisitions. Northwestern Europe also delivered a solid performance fueled by grid expansion and energy efficiency projects. France did show resilience against a high comparison basis, revenue was broadly stable in a more mixed environment. Central Europe was broadly stable too, with a continued sequential improvement. Global Services Energy reflected normalization following an exceptional Q1 2024, which benefited from a one-off shutdown contract. Overall, this performance underscores the strength and balance of our multi-local, multi-technical model. On slide 10, looking at Germany, Germany is showing elevated momentum as it delivered another outstanding performance in QA with total growth of over 27%. Organic growth remained high at 7.2%, while 2024 acquisition provided a significant contribution of nearly 20%. High-voltage activities continue to benefit from strong structural demand, and their backlog remains at an all-time high. Growth in building solutions is firmly driven by data centers, defense, and transport infrastructure. In industry, rubber and auto integrations are well-advanced, strengthening our position in attractive sectors like wind and pharmaceutical. With continued strong momentum across all divisions, Germany clearly remains our most powerful growth engine. On slide 11 with France, the revenue in France was broadly stable with organic growth at minus 2.1% against the highest quarterly comparison basis of 2024. The overall resilience of our French business reflects its high degree of diversification, the strength of its position, and the strong selectivity. There have been more cautious client behaviors in specific markets. In building solutions, we remain very selective, prioritizing margins and focusing on higher value-added segments, such as data centers and healthcare. Technical facility management performed well, with no contracts kicking in, and shown work holding well. In our city network activities, fiber deployment is gradually winding down in areas where rollout has been already completed. Finally, nuclear services continue to grow, supported by the Grand Carriage Program in both maintenance and project activities. Slide 12, Northwestern Europe, with a strong start to the year with an 8.3% growth. including 7.5% organic, driven by robust activity across all our business lines. High-voltage activities are currently very strong in the Netherlands, driven by sustained energy transition investment and grid congestion relief projects. Both building solutions and ICS perform well, benefiting from strong demand for energy-efficient retrofits and data centers. Belgium also delivered solid growth, particularly in health care, commercial real estate, and technical facility management. Revenue in Central Europe increased slightly, with organic growth still negative, but showing a continued sequential improvement quarter after quarter. Poland is well positioned in high voltage and building solutions markets, with production expected to ramp up in H2. Austria delivered further growth against a particularly high comparison basis from last year's transport infrastructure activity. Overall, the region continues to recover steadily, supported by strong water intake. And lastly, in global services energy, revenue declined by minus 10.7% this quarter due to an exceptionally high comparison basis in Q1 2024, which had benefited from a one-off shutdown maintenance operation. Underlying activities remained solid, supported by strong demand in West Africa and continued expansion in wind. SPI continued to expand its renewable energy offering on the back of the successful integration of the Coral Group. The segment's fundamentals are robust, with long-term contracts ensuring stability.

I will now hand over to Jérôme. Thank you, Gautier, and good morning, everyone. Let's start with the revenue breach. SPIE's revenue was up plus 8.5% in Q1 2025. Organic growth was plus 2.1% against a particularly strong comparison basis in Q1 last year. External growth contributed plus 6.7%, or the equivalent of 146 million euros. With the full year effect on one hand of the acquisitions closed in 2024, contributing for €137 million, and on the other hand, the two ones which have been closed in Q1 2025, contributing for €9 million in such quarter. The minus 0.3% disposal impact reflects the divestiture of a small, subscale and low value-added IT support activity in Belgium. This business generated circa 20 million euro revenue last year. Currency effects were neglectable this quarter. Overall, these figures reflect the strength and balance of our growth model. On the next slide, you can see the quarterly evolution of our organic growth. Our Q1 performance should be bred in light of the very high comparison basis from Q1 2024, which had recorded the strongest quarterly organic growth of the year at 6.2%. This base effect is visible in France, and particularly at GSE, which had recorded a very high level of activity last year with a plus 43.7% organic growth on that segment. As we progress into the year, comparison basis will become easier. Moving to M&A, in Q1, we continued to deliver on our external growth strategy. We closed two Bolton acquisitions in the first quarter, Electromontage in Poland, a specialist in electrical installation services with nearly €70 million revenue, and Corporate Software in Switzerland, an IT consulting and service provider with nearly €4 million revenue. We recently signed and announced the acquisition of Eltech in Poland. Eltech is an integrator of building automation and management system, adding around 19 million euros in annual revenue. These acquisitions strengthen our capabilities in building solutions and ICS in Central Europe. Meanwhile, the integrations of the 2024 acquisitions are progressing well. and according to our plan. Looking ahead, we currently have 15 live M&A situations, confirming a very dynamic pipeline. These include a balanced mix of opportunities across our core geographies with a continued focus on technical capabilities, healthy development perspectives, and cultural fit, of course. This illustrates the strength and consistency of our M&A strategy, which remains a key contributor to our long-term value creation model. This concludes my part. I'll hand it over back to Gautier. Thank you, Jérôme.

Let me now conclude by reaffirming the 2025 outlook we shared at the beginning of the year. We expect strong total growth, pushing revenue well above the 10%. billion mark, supported by further organic growth and active Bolton M&A. We expect continued expansion of our EBITDA margin, and as every year, we intend to maintain a dividend payout of around 40% of adjusted net income. Thank you for your attention, and in case you forget, let me repeat again, it's a good time to be a European electrical engineer, and we are now happy to take your questions.

Thank you, Mr. Louet. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. And if you change your mind and want to withdraw your question, please press star 2. And please ensure your lines are unmuted locally, as you'll be prompted when to ask your question. So again, to join the queue for questions, please hit star 1. The first question comes from the line of Remy Grenu from Morgan Stanley. Please go ahead.

Good morning, Gauthier. Good morning, Jerome. Three questions if I may. So first, if you could share more details on the organic growth in France, the minus 2%, for example, quantifying a little bit the impact of the fiber ramp down, what was the contribution in Q1. And overall, for the country, if you expect that organic growth could further deteriorate later this year. So that would be the first one. The second one is I think you previously said that you were expecting 2025 organic growth not to be miles away from the 4% you did last year. So do you still believe that this will be the case? And then the third one is a more housekeeping question. If you can help us understand what's your view on the effective tax rate for this year, including the French corporate tax surcharge and what we should model for 2025?

Thank you, Rémi. Regarding fiber decline, it accounts for roughly 10 million for this first quarter compared to last year, so it's basically half of the organic decrease. We think we're going to do roughly 100 million for the whole year on optic fiber. I think the comparison basis, as we said, was strong for Q1, so we do not expect the gap to increase during the rest of the year. On the contrary, we think it will reduce gradually. We should not look at France as a falling knife. a very resilient business. We have a lot of activities which are still progressing. For instance, maintenance services for buildings, for technical facilities are in good shape. We have gained new contracts. We have a decent level of churn work. Our industry business is holding well as well. and so does our ICS activity. So basically, the two areas where we have negative growth this quarter are city networks with the impact of optic fiber as well, and this is an area where we have a bit more public customers, like local authorities for mid-voltage, etc., And we see the budgets are more constrained. And then probably the main culprit is the building installation. Well, starting middle of the year, last year, the customers have been fairly cautious with new programs. We have the housing market, which is as good as dead at the moment. So we are not in the housing market, but we have... players of that market who try to find work at the fringes of what we do, so the most simple things like small building offices, schools, etc. And obviously it prevents us from entering into a price war in this small project business. So this is what has explained a weakness starting Q4 and Q1 this year. Meanwhile, we have a decent order intake for data centers, for health assets, etc. So we see the situation in revenue easing up during the year, and especially it bodes well for 4-26. So we have another intake in building solutions, which is a which is now improving. But it was the main reason for the drop in Q1. So again, France is resilient. As I mentioned, margins are holding very well in France and our business is extremely capable to adapt and to decrease in revenue as we saw this quarter. So, again, we should not be too worried for the full year in France. Regarding the organic growth for the whole year, we don't see any reason to say something different than we said a few weeks ago.

And regarding the tax rate, maybe, Jérôme, you want to... Certainly. We reported, Rémi, 32.9% of effective tax rate last year. I think for 25, it's fair to assume a slight, probably decrease, something like 31, 31.5%, depending on the evolution of the mix of the contributing tax results in the various countries. This is excluding the exceptional contribution on large corporates that we would have to observe. In 2025, in France, as already mentioned, we assume that exceptional one-off contribution, one-off is what we understand so far, at circa 18 to 20 million euros that you should add on top of that. That P&L effect, as you have read already and understood last year, we have in our cash flow, cash out for taxes, slightly higher than the P&L impact we have, and this is due to catch-up effect on the increasing cash out for prepayments on taxes and tax deferrals that we observed in the last two fiscal years as already announced. I trust it does clarify the question.

Yes, all good. Thanks very much.

The next question comes from the line of Eric Lemaire from CIC. Please go ahead.

Yes, good morning. I've got three questions, please. The first one on the impact from acquisition you expect for this year in 2025, considering what you have announced so far, the two deals closed and the other pending. So far, what could be the impact on your top line expectations? A second question on Germany. What could you say about the German stimulus plan? Do you have today maybe a better idea of the possible impact of this plan on your business in the future? And the last question on phasing effect. You didn't mention any phasing effects in Q1. Should we expect some phasing effects maybe later in the years, in the next quarters? Thank you.

Maybe starting with Germany. The German plan is twofold, as you will remember. There is 500 billion for infrastructure. It pertains to rail, it pertains to energy transition. The Green insisted that 100 billion would be dedicated to energy transition. And then we have, obviously, a part also for energy efficiency in buildings. So this is the infrastructure plan. And then there is the second part, which is dedicated to defense. an estimate was also another 500 billion, but the reality, it was mentioned, it is whatever it costs. And again, it's not only weapons and equipment, it is also infrastructure in the military, and because the German government reckons that they need to improve very much the logistics and the infrastructure to for example, to low-swift transportation of material across the country. So it will have an impact on infrastructure as well. And as a matter of fact, it's not immediately linked with that, but we have seen for a while now, about six months, one year, more spent from the Bundeswehr and was already benefiting from that, who just obtained a contract for the infrastructure of a naval base in the north of Germany. So this is going to kick in. Probably the coalition government is now created, they have an agreement, and they are mentioning that they want to go fast on this infrastructure stand. So this is a is positive for us. Again, a part of it is dedicated to the energy transition. So it moves, and the coalition agreement was achieved faster than expected, so it's quite positive going forward. But obviously our growth in Germany doesn't rely solely on this plan. We have underlying trends which were already very strong. Our high voltage business is extremely busy. Our distribution business is also trading at very good levels, both in volumes and in price. So it is really a very strong growth engine that we have in Germany. We saw the impact last year and we continue to see the impact. So this is something which is going to last independently of the growth plan. Regarding phasing effects, nothing really special to mention about that. It does happen, especially regarding energy projects, which are a bit more chunky, and then it's mainly linked with the the time it takes to get the final authorization before we get the go-ahead to start. So from time to time, we saw that in the past, and we've seen that mid-term, it's not really a concern. And regarding... contribution from acquisitions. Jerome, you want to comment on that?

Certainly. If we embark on the full-year effect for 2024 acquisitions, that's around about 175 million euros, plus what we have closed to date in 2025, you can add a good 50 million. So let's say 270 million, sorry. So 250 million in total is what is already secured and closed as of today.

Thank you very much. That's very clear.

The next question comes from a line of David Serdon from Kepler Chevreux. Please go ahead.

Yeah, good morning, gentlemen. I would like just to have some further comment on your performance in France and Germany. Just for France, just to understand the situation, do you think that the French market is down for the industry or is it more just specific to SPIE? Second question is regarding the German market. Can you quantify the volume effect in this more than 7% organic growth? And third question is regarding the M&A. Do you think that it's time to make a pause, to have a pause on M&A because the world is maybe more unpredictable?

Well, regarding France, I gave some thought to what was happening. So again, apart from... from the building installation, so projects, and the drop, which is well-known and well-anticipated in optic fiber. We're looking at a business which is holding very decently, and, for instance, in industrial services, we're doing well. Our customers are very much into more electrification projects for the units. Nuclear sees a healthy growth, which now that the activities are back on normal track, we're really benefiting from that. And the information and communication systems are doing well. And again, as I said, in the building installation, we are now scoring... which are not all going to start right now, but it means that we are building up a backlog. So we should not see France again as a too black picture. There are many sectors which are holding very decently. And again, what's very important, both in terms of margin and cash generation, we are very much in line with what we have achieved in the past. We do see some sequential improvements going forward. So I don't think there's any reason to worry too much about our French business. We have shown in the past that we are very resilient, both in margins, both in cash generation, and very flexible regarding the cost basis. So France is a very recession-proof business. And again, we see signs that organic growth for the first quarter is probably the lowest we have in this year. Regarding Germany, I'm not sure I really understood your question regarding the volume. There is a strong demand in Germany for all our services, very strong, and you see what I could have mentioned regarding this new plan, it has also changed the confidence level of our customers, so they are more preparing now to for more investments. For instance, for our efficient facility business, it helps because people have more confidence to spend on churn works, etc. Everything that pertains to energy is very strong. So you see there is an impact on volume because the demand of the customers is very strong. And there is an impact of price We continue to improve our margins decently in Germany in the face of this strong demand and restrained capacity. So we still benefit from a good price effect, which allows us, obviously, to pass on price increase to customers distinctly beyond inflation. Maybe I could mention also that the acquisition we did in the solar energy in Germany is doing very well. So photovoltaic is very much fostered in Germany, and this doesn't change. So it is really also a good boost, both in terms of volume and margin.

And for Germany, can you remind us of the exposure to the automotive sector and do you see some signs of difficulties for some automotive customers?

Well, the exposure to automotive is 1.6% of our volume in Germany, mainly in maintenance. of plants. And as a matter of fact, we just won last year a new plant which is for trucks, for Daimler. So we're doing all right. Obviously, the maintenance of these plants, it does continue. First again, as announced, the shutdown of two small plants were not present. And in fact, the German autonomous sector is facing transformation, which is not bad for us because it entails modification works, etc. So we're not very much exposed and we see a stable business regarding what we do for them. There was a question regarding our strategy for M&A and whether we would consider a pause. Obviously, no. Clearly, we have a good pipeline, as Jerome described, and we are looking at companies who are doing well in the sector, and not surprisingly, because they are not in a very different sector from where we are, and clearly, we have no inflection at all of our M&A strategy.

Thank you.

As a reminder, if you would like to join the queue for questions, please press star 1 on your keypad. The next question comes from the line of Rory McKenzie from UBS. Please go ahead.

Good morning. Just one left for me, please. Just to follow up on the Germany fiscal expansion plans, as you said, your T&D activities have already been growing strongly for years. I think you've got a three-year backlog already or something like that. So can you talk about what the current capacity constraints are and how you think policy or more funding could speed up those transformation programs? Or do you think that the investment is going to be more about broadening the areas of modernization in the economy? Thank you.

Well, I think we're talking transmission and distribution. And probably the... The greatest impact of the plan will be towards distribution. So transmission, we have four DSOs, who are doing well and have their projects well financed, whereas we have hundreds of Stahlwerke in distribution. who now face a need for quite a bit of investment to adapt to the new grid, to the new transmission grid. And these people can do with support regarding their financing. So clearly the impact of the plan would be more in that direction, which obviously will help further growth. Now, for this customer, we operate on framework agreements. It's three years, five years framework agreements. And then the customer chooses to spend more or less money in the frame of this agreement. So it will help them to go towards the higher end of the spend.

Great. That's very interesting. Thank you.

The next question comes from a line of Augustin Sand from Stifel. Please go ahead.

Yes, good morning, and thank you for taking my questions. Apologies if I repeat some. I missed the beginning of the call, but I had a follow-up on Eric's question on the phasing. It seems like you had phasing in Central Europe last year. I didn't see it mentioned in the press release this time, but I was wondering how that would impact your business going forward. I saw in the presentation that you mentioned Poland would start, some project would start from H2 onwards. So the way to interpret it, is it that from Q3 onwards, you expect your organic growth to become positive again, or are you expecting an improvement of the phasing earlier than that?

Well, you see, we do not guide on quarterly organic growth per segment, but what I can say is that clearly, For Central Europe, the Euro is a back-end loader, and so we'll see gradual but steady improvement compared to the beginning of the year.

Okay. I had a question also on GSE and the performance. First, on the Q1 performance, could you give us the organic growth excluding the one-offs? exactly where that stands and second question related to that is I saw that last year you had an organic growth of 15% in Q2 so does that include a one-off for Q2 as well and should we expect a hard or difficult comparison basis or how should we see this?

We did have an impact of this one-off who spreading out to Q2 as well. I remind you this is one of contract patents to the shutdown of FPSO offshore Nigeria, which accounted for roughly 20 million revenue last year. This is what we had last year. And then Regarding the balance of the year, we see we have a number of new contracts ramping up, and we look at a sustained level of activity this year. I remind that we are mostly on the maintenance, and clearly it provides for a stable business. So we are, especially in West Africa, we're looking at a good perspective for the year for the oil and gas part, and for the wind, it also pertains to a discrete number of projects where we do on a time and material basis connection of the grid, so this can vary a bit. So clearly for oil and gas, the higher comparison basis was H1, definitely.

H1. Okay, thank you. And my last question is on your integrations. I was wondering if you could provide more detail by acquisition, so for Robur, MBG, ICG and Autolife on the different stages of the integration and what's left to do and where you are at exactly.

But, you know, it really depends on, for instance, Robo was, the Robo deal was closed earlier in the year, the HCG later, and auto towards the end of the year. So, obviously, we are in different phases, but, as you know, we have very well-established guidelines and principles and to organize this integration. So we have a well now oiled integration process which we are rolling out according to the various schedules and we are well on the plan with clearly Robo being the largest one and the first one where we have really well progressed. and we are very satisfied with the performance. And clearly, more for the others, it happened later last year, so we are at an earlier phase of integration, but everything according to this phased plan.

Thank you very much.

As a final reminder, if you would like to join the queue for questions, please press star 1 on your keypad. The next question comes from a line of Simona Sali from Bank of America. Please go ahead.

Yes, good morning, and thanks for taking my question. So one is a follow-up on organic revenue growth. So you already commented that you do not expect it to be dissimilar to what we saw last year. But can you comment a little bit more precisely on the trajectory through the year? And also as a follow-up on France, And considering the solid order intake in this country, should we expect organic revenue growth to be at least flat in Q2? Second question is related to building installations. Can you remind us of what is the overall exposure in other countries to building installations? And if you are experiencing similar competitive dynamics also in other countries, and if you are seeing also a change in client behavior due to the more mixed macro picture. Thank you.

Well, regarding France, again, we will not give a guidance per segment, but as I said, we are looking at sequential improvement over the year. Regarding Building installation, we don't see the same pattern country by country. For instance, if I look at the Netherlands, building installation is exactly on the same place where it was last year, so no change in the trends. It's the same in Germany, where we are less exposed to this area. And in Central Europe, for different reasons, it was fairly flat last year. And we had some delay in projects towards the end of last year. But we see now the order intake coming. But again, if you look at Poland, Czech Republic, Slovakia, a lot of moving parts, so clearly we have different patterns in this country for various reasons. We are not very large in this country, so it's not just the macroeconomics that impact, but also a number of discrete reasons. And then we are growing in this area in Belgium right now. Altogether, building installation, we're looking at less than a billion for the whole group.

Thank you.

We now have a follow-up question from David Serdin from Keplash, Europe. Please go ahead.

Yeah, I will be very brief. Just to understand, for GSE, is it correct that if we exclude the one-off shutdown activities last year, your business was quite positive on a life-or-life basis in Q1 and not at minus 10%?

Yeah, this is not a wrong assumption.

Okay, so it's a right assumption. Thank you.

There are no further questions, so I'll hand back over to you, Host, to conclude today's conference.

Thank you for your attention and your interest for SPIE. We have a very good start to the year. We didn't mention... too much margins because we don't communicate on margins on a quarterly basis but maybe it's worth mentioning that our margins are holding very well and in fact we see the increase that we are forecasting for the year already shaping up very well on Q1. And with that I will close this call. Thank you again for your attention and maybe allow me to remind the to remind you that it's a very good time to be an electrical engineer in Europe. Thank you.

Thank you for joining today's call. You may now disconnect your lines.