...Welcome to Atalian H1 2024 Results conference call. My name is Alan. 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 one on your telephone keypad. If you require assistance at any time, please press star zero, and you'll be connected to an operator. I'll now hand you over to your host, Frédéric Baverez, Group CEO, to begin today's conference. Thank you. Yes, Frédéric Baverez speaking. Good afternoon, everyone, or good morning for those joining from the U.S.. I hope you can hear me properly. Last time we had the financial presentation, it was on 24 May. It was for the result of the Q1 of 2024, and today, about three months later, we are logically here to present you the financial result for the first semester, ending on 30 June. As usual, I will do the presentation together with Laurent Carozzi, our Chief Financial Officer. I will give you the general overview, and Laurent will go more in detail about the figures. After the presentation, Laurent and I will naturally be ready to answer your questions. Let's start with the slide number five, please. And as usual, we have tried to summarize the key messages in our first slide, and so what are the key takeaways for the first semester? Actually, there are many. Firstly, there has been an important change for the company on which we have officially communicated on 2 July. Mr. Franck Julien, who had been the group main shareholder for a long time, has donated all his shares to Mrs. Sophie Pécriaux, who is also the Chairwoman of the Supervisory Board. And so following this transaction, Franck Julien no longer holds any stake or interest in the Atalian group, and Sophie Pécriaux is now the group's ultimate beneficial owner, UBO, to use the classical acronym. As Sophie Pécriaux pointed out in July when we revealed the operation, this change of shareholder has no impact on the group governance bodies, as well as on its strategy. Maybe to add a personal note, I would say that I have been working with Sophie Pécriaux since my appointment as CEO of Atalian, as she was already chairwoman of the supervisory board, which approved my nomination. I'm pleased to say that I have a great deal of trust in her, and I think I can say that the feeling is mutual. The second message concern the operating free cash flow, which recovered strongly compared with Q1, and Laurent will come back to the figures in more detail in a few minutes. And this turnaround in the free cash flow was expected, as I remind you, our working capital at the end of March had been impacted by unfavorable calendar effects, with the long Easter weekend, and these calendar effects which were not present anymore at the end of June. But beyond these calendar effects, we have significantly improved our invoicing process as well as our collection process in order to structurally improve our working capital management. And these efforts have started to pay, but I believe that we still have room for improvement by the end of the year. The third main message, sorry, is in line with what we had said at the end of the Q1. Our international activities are generally doing well and giving satisfaction. The Central and Eastern Europe zone is performing well, particularly in Turkey and in the Czech Republic. And the performance of our Turkish teams in terms of profitable growth, according to me, is truly commendable, even if, unfortunately, the volatility of the Turkish lira limits the positive impact on our consolidated accounts. And, on the other part of the business that we have abroad of France, the Benelux is on target, and it's absorbed, as I said, the few market losses suffered in 2023. For main message, it... At the same time, the environment is more difficult for the cleaning business in France, which represent roughly, as you know, half of the group sales volume. The other activities in France are doing quite well. We face some issues on the cleaning business, not on the other business in France. And about the cleaning business, as we already announced at the Q1 result presentation, we are finding it difficult to pass through our full cost increase to our customers. To put it simply, the cleaning profession has to face this year a rise in its payroll costs that significantly exceeds the general consumer price index, actually more than twice. And we are more or less able to pass through to our customers the price increase at the level of the general price index.... But it's much harder for them to accept increases that go beyond it, especially when the increase is about social security charges and not about direct employees' salary. I will give you more details in a few minutes, but it's important to have in mind and to remember that this is not a problem specific to Atalian. It's really a problem faced by all companies in the cleaning business in France in 2024. Talking now on the commercial front in France, we have won a significant volume of contracts since the beginning of the year, and it's a good news because it confirms that we have offers of quality, and we have offers that are competitive. And for me, it's something that is quite important. However, let's be clear, we have also recorded the loss of a few contracts, some of them quite old. I mean, with customers that we work for for a long time. When price or quality of service were not in question, and quite often they were not in question, we have good reason to believe that in reality, we were more likely to have been sidelined, if I may say so, for reputational reasons, either due to articles which discussed our financial difficulties before the positive conclusion of the refinancing, or due to articles which referred to the trial open against the former executives of the group, which took place in the Q1 of the year, and which came to a verdict on 2 July. This is what we call our legacy issues, if you accept the wording. And this legacy issue, we really have to clear up in advance of call for tenders issued by customers and even more by prospects. I would say that firstly, we need to keep reassuring our customers, current or potential, of our financial solidity and remind them of our successful refinancing in the Q1. And secondly, we need to show that the trial has recognized Atalian status as a victim. I really insist that the trial has recognized Atalian status as a victim, and since the operation I mentioned earlier, there is now a clear dissociation between the group and the individual who have been convicted. I consider and the full management, the team considers that we got a job ahead of us in terms of commercial education, knowing that the good thing is that we have the right arguments, and these arguments are good because they are factual. When reputation is at stake, it's indeed the facts that set the record straight. We have the facts to explain the situation to our customers and to all the stakeholders, sorry. Fifth message, sorry. In that context, we are obviously maintaining our strong internal discipline in terms of management processes, as well as in terms of cost control. Action plans have been underway since the beginning of the year. We already have initiated within them, and we are naturally not letting up on the pressure. Believe me, I'm strongly behind the teams to obtain the result we expect, but at the same time, as our objective is to return to stronger net organic growth, it's at the heart of our strategic plan. We have initiated a review to improve the efficiency of our sales effort, both on the defensive front, defensive meaning when we are outgoing, or on the offensive fronts, offensive meaning when we are in the process of winning new customers. One of the key ideas in this process is to organize ourselves more in line, at least for the big contract, with our customers' business sectors. It's especially true for France. It's an ongoing project at this time. Last, but obviously not least, in this introductory slide, we have revised our guidance for 2024 in view of the difficulties significantly exogenous that I have mentioned in the cleaning business in France, but also in view of the highly uncertain political situation in France, which is creating a wait-and-see climate for all businesses. It's true for us as well as for our customers, and which, beyond this wait-and-see climate, entails risk in terms of possible major evaluation of the minimum wages and possible questioning of social charges reduction scheme. For the one living in France, you know that it's a part of the political discussion at the moment, and it's true that as a workforce company, we could be impacted by such measures. I'll come back later to the updating of our guidance in a separate slide. I propose to go to next slide, number six, and I was quite long on the first slide, but the news were quite dense. I'll try to be quicker now on this second slide, especially since Laurent will come back in a few minutes, more in detail on our financial results for the semester. I will just give you the main lines. Our net sales are very slightly above EUR 1 billion, with a growth of +5.8% five point one percent, sorry, on comparable basis versus H1 2023. Our recurring EBITDA reaches EUR 39.9 million, representing a decrease of -2.6% on comparable basis versus H1 2023. But the recurring EBITDA in Q2 is 5.7 million higher than in Q1. In Q2, we have a recurring EBITDA of EUR 22.8 million versus EUR 17.1 million in Q1. Our recurring EBIT amounts to EUR 13.3 million for H1 2024, i.e., EUR 20.7 million less than for H1 2023. But I would like to stress that our EBIT, recurring EBIT was only at EUR 3.5 million at the end of March, showing a significant improvement in Q2 versus Q1. And latest indicators, the operating free cash flow, it remains negative at minus EUR 27.1 million, excluding non-recurring items. But it was clearly positive at EUR 34.6 million in Q2, which illustrates the significant improvement in cash management. So to say it very short, we have a challenging environment, but Q2 is significantly stronger than Q1. Let's jump to the next slide, which is slide number seven. Now if we now turn to the analysis of our two main geographic zones, starting with France, we are going to see in more concrete terms and in accurate figures what I mentioned in my introductory slide. In France, we can see that sales are more or less stable between the first half of 2023 and the first half of 2024. Taking inflation into account, this reflects a very slight contraction in the volume of our business, and this is a result of market losses incurred mainly last year, in 2023. I would remind you that the biggest contract loss was in airport security, with an effective date of 1 April, 2023. On the other hand, there is a more significant contraction in the EBITDA, down 21% over the full half year, I mean, versus last year. It represent a 9 million EUR decrease versus the first semester of 2023, and as I said previously, this drop in profitability comes to some extent from market losses, but above all, and significantly above all, from the difficulty we have in the cleaning business in France to pass through to our customers the full increase of our payroll costs. I'd like, in the next slide, to take a closer look at the breakdown of this increase, which is mainly, as you will see, the result of external decision, if I may use the word, which circumstantially boost this year, the payroll cost. It's important to emphasize one more time or once again, that it's a problem that is faced by all cleaning company in France, this year. If we move to slide eight, as announced, this slide lists in full transparency all the conventional or governmental measures affecting the staff costs of cleaning companies in France in 2023. I'm not going to go in all the line of the spreadsheet in the left side of the slide. But as you may see, among these measures, you have the two minimum wage increase decided for 2024 by the Professional Federation of the Cleaning Business, which is called FEP, for Fédération des entreprises de la propreté. They had agreed on two increase, one of 2.5% on 1 January, and the second one of 0.7% on 1 July. But these two increases turn out to be much higher than the 1.13% rise as of 1 January of the French minimum wage. The acronym, in French, is SMIC. You see it on the slide. This was decided by the public authorities. It's decided by the government at the end of the day, and it was decided in December. As such, it had an impact on the Social Security charges rebates for low-wage earners, which is known in France. In French we call them Allocation Fillon. You can translate them in English, in Fillon benefit, which are rebate on Social Security charges for low-wage earners, and they are calculated by reference to SMIC. Since you have this gap between the increase of the SMIC and the increase of the minimum wage of the cleaning business, you have Fillon benefits and the correlated reduction of this Fillon benefit amounts to around 2%, say 2%. It's not a small figure of the global wage bill for French cleaning staff paid at conventional FEP minimum. In addition to these two main effects, the first one being the wage increase, the second one being the Fillon benefit reduction, there have been a number of technical measures decided by the public authorities, either local or national, on certain Social Security charges. They are listed on the slide starting from the third line. I won't go into detail, but if you have questions, we can answer them afterwards. Now, talking of Atalian, not talking of the cleaning business, but talking from Atalian in the cleaning business. When we look at the evolution of the total payroll cost between the first half of 2023 and the first half of 2024, we see an increase of EUR 16 million. EUR 6 million on salaries, and EUR 10 million on Social Security charges. This represents a global increase of about 4% of the payroll cost. And what is really symptomatic is that in absolute figures, Social Security charges increase more than direct salaries, which is clearly not proportional, since Social Security charges represented less than 19%, to be clear, 19% of our payroll cost - global payroll cost in 2023. So, normally, we should have something quite different of the figures that you have, EUR 6 million on salary, EUR 10 million on salary. And as I said before, we are at this time only able to pass on about half of this increase to our customers. And at this stage, it's between EUR 8-9 million as of 30 June, which corresponds roughly to the rise in general consumer prices. The last index that was issued in July by the INSEE, the statistics body, in France, was 2.3% year on year. I would say that most customers refuse a higher increase which don't reflect direct salary increase. They see the direct salary increase, 2.5%, they see the general index increase 2-3%, but they are not keen to give additional price increase which are related to Social Security charges and not to direct salaries. It's all the more difficult, I shall say, that the requests we are making to them come after two years of quite sharp rises in 2023, 2022, sorry, and 2023, since the return of inflation in Western Europe after the launch of the war in Ukraine. But having said that, believe me, we do not give up. Let's be very clear, we do not give up, and actually, we are still very active and insistent on price increase. We are determined, and we try to leverage the second price, the second salary increase of the FEP at the 1 July. And maybe talking slightly on the future, but we may come back in the Q&A session. I think that with the return to lower inflation in the coming years, and likely through a reduction of the gap between the FEP minimum wage and the SMIC, which has never been so high as it is now, we can hope that the problem could be partly resolved in the next few years. But 2024 is clearly a difficult year for all cleaning company in France due to the scale of payroll cost increases exceeding the sole salary increase. The idea was really to be full transparent on what we have to suffer this year in our global payroll cost. Slide nine, please. Now let's talk about the performance of our activities outside France. I'll be quicker, but as I said, they are generally satisfactory. I recall that we are present in three countries, three Benelux countries, and in eleven Central and Eastern Europe countries, including Turkey. As you can see, on a comparable basis, sales rose by 18% and EBITDA by 30% in H1 2024 compared to H1 2023. This is a good performance, even we would talk of an excellent performance, which was, first of all, driven by our Turkish operations, which are both very dynamic and very well managed. Unfortunately, expressed in euros, this excellent performance has less impact in our accounted consolidated accounts due to the volatility of the Turkish lira in the context of hyperinflation. In actual euros, as you can see, we remain on a satisfactory trend. We save up 3% and recurring EBITDA up 12% with, like, I said earlier, an acceleration in the Q2 which is a good trend, and if I should talk about some countries, I would say that in addition to Turkey, the Czech Republic and the recovery of Poland are among the reasons of satisfaction in the Central and Eastern Europe zone, and the Benelux zone, as earlier said, sorry, is on target. They had a few market losses in 2023, and more or less absorbed them. That's good news. Now let's talk about the guidance, and it's slide 10, please. Turning now to guidance, I have already announced that we have revised it downwards for 2024 in view of the headwinds, mainly exogenous, that we encountered in France, and the uncertain political and economic context in which we are operating in our home country. To be very specific, we felt it prudent, on one hand to revise our recurring EBITDA forecast from around EUR 100 million to a range between EUR 80 million and EUR 90 million. On the other hand, to revise our CFFO forecast before refinancing fees from a range of EUR 20-30 million to a range of EUR 10 to 0 million. This based on a conservative Working Capital assumption on which Laurent will come back. But I would say these are the guidance, but above all, I want to assure you that we are not passively facing headwinds, and that we are reasonably at work to adapt the group to the situation and to improve both its resilience and its agility. Some of these headwinds, as I said, are not specific to Atalian and impact also our French competitors. But we face whatever the origin of the problem. We have a number of action plans already launched to improve our operational and financial performance. I will not list all of them, and to say the truth, some are being still confidential. I can mention cost discipline and notably travel cost management, optimization of floor spaces. We are going to have a strong reduction of our real estate cost next year. Implementation of stricter approval process for spend, for CapEx, for hiring, and naturally procurement policy is also part of cost discipline. We have operational productivity efforts. We have specific action plan on loss-making contract. And we have also, as I said, in the introductory slide, we try to work on our commercial efficiency, notably to improve the hit rate, taking into consideration defensive and offensive tenders. And to develop proactively special works, and since special works too generally place more in the second half of the year than in the first half of the year. It's something we are really currently working on. And at the same time, I would say it's sound. We are evaluating everywhere our organization in terms of organization chart as well as in people to see whether they are efficient and optimized, and whether we have the right people in the right places. I think that when we will present our Q3 results, we should be able to report a little bit more on the progress of this action plan. Finally, before handing over to Laurent, I'd like to say a word about 2025. The revision of our guidance for 2024, with respect to its cause, will in all likelihood, we should say, have an effect on our 2025 forecast. But we need also to further assess the impact of the action plans to counter this effect. This is... in this context, it's premature to assess all the impacts, positive and negative, precisely, and we will therefore wait until we have completed the 2025 budget process, before formulating a new guidance for 2025. It will be done in due time. And now, I'll turn the floor to Laurent, to present more in detail our first semester results. Thank you, Frédéric, and good afternoon all. Maybe we're gonna switch to slide 12. We start with our traditional brief overview of the key figures. Some have already been commented by Frédéric. H1 results really illustrates two contradictory trends, so satisfactory achievements for international maintenance and all corporate entities, and difficulties in the cleaning business in France. The main one is the partial pass-through of 2024 full staff cost increase, as explained in particular, in detail by Frédéric, and in particular, the higher payroll taxes. The other one records also some softness in productivity and trade balance. H1 2024 is in the continuation of the end of last year. Important wins of new contracts have occurred, illustrating the attractivity of the Atalian service offer, but contract retention-... is increasingly being impacted by legacy issues, as described by Frédéric, and political uncertainties in France, leading to a negative trade balance. This is reflected in the H1 numbers you see here. Revenues are slightly up at EUR 1 billion, while EBITDA is down 7.9% to EUR 39.9 million, and operating profit, excluding non-recurring item, is down EUR 2.7 million at EUR 13.3 million. The non-recurring items in H1, 2024, amounted to, circa EUR 18 million, mainly corresponding to refinancing fees, EUR 16 million, and to EUR 1.8 million of other items in Q2, mainly provisions as part of the disposal of our Lebanese operations, in July 2024. The net loss for H1, 2024, is a negative EUR 45 million, compared to a net profit of EUR 128 million in H1, 2023. But last year, the results were including the capital gains from the sale of operations to CD&R. Lastly, a few words on the CFFO, that we'll discuss with more details later. H1 2024 CFFO, excluding non-recurring items, amounted to EUR -27 million, compared to EUR +6 million in H1 2023. But the semester is a story of two halves. Q2 2024 CFFO, excluding non-recurring items, improved by EUR 21 million to EUR +35 million, thanks to significant improvements in working capital management over the Q2. Let's move to slide 13. Net sales increased by 5.1% on a comparable basis. Comparable basis now only captures the foreign exchange, as there was no major scope impact in H1 2024. All of main disposal occurred in 2023. Operations sold to CD&R in early 2023, and U.S. assets sold at the end of 2023, have been accounted for as discontinued operations, so they no longer impact the sales. Forex negative impact represents a negative EUR 42 million, mainly reflecting the depreciation of the Turkish lira vis-a-vis the euro. As already presented by Frédéric, this performance is mainly due to improvement of integrated FM and international operations, while the French trade balance remains challenged, notably with the loss of a major security and safety contract at the end of Q1, 2023. But Q2, 2024 trade balance is also affected by recent contract losses. Slide 14. Thank you. Here we are going to focus on the EBITDA evolution. So year-on-year, recurring EBITDA decreased by EUR 3.3 million to EUR 40 million, a decrease of around 8%. Excluding the impact of exchange rates, minus 5.3%, the recurring EBITDA on a comparable basis decreased by 2.6% in H1 2024, compared with H1 2023. So as mentioned previously, this reflects the positive contribution of productivity measures, the improvement of the international trade balance, and to a lesser extent, lower holding costs. But these positives have been more than offset, firstly, by insufficient indexation to pass through increased French staff cleaning costs, along with the impacts from the negative trade balance in France, as already commented by Frédéric. If we move on to the following slide, we'll be looking now at a few items in the P&L that have not been commented yet. No significant changes in depreciation and amortization, which slightly decreased to reach EUR 26.6 million. I've already commented on other income and expenses line corresponding to the non-recurring items of negative EUR 18 million, mainly relating to the refinancing costs. By the way, we do not expect further non-recurring costs relating to in relation to the refinancing for the remaining of the year. Net financial expenses increased by EUR 3.9 million to EUR 35.6 million. This change reflects mainly an H1 2023 positive Forex impacts as part of the Madison transaction. The net profit from continued operations for the period is negative at EUR 45 million, negative EUR 45 million, and the net income from discontinued operations in H1 2023, which included the net capital gains from the sale of operations in the UK, Ireland, and Asia. Let's move on to the following slide, slide 16. It presents the evolution of the CFFO, negative in H1 2024, but positive in Q2, reflecting the strong improvement in cash management. H1's CFFO, excluding non-recurring items, decreased from EUR 6 million in H1 2023 to a negative EUR 27 million in H1 2024. And this reflects a few things. The deterioration of the change in working capital requirements, so negative EUR 38 million, hampered by the still too high level of account receivables, i.e., late billings. The situation has strongly improved in Q2, and is currently and still being worked upon. We have a lower EBITDA of EUR 3 million. We have relatively stable CapEx, don't move around 1 million variance. We have a lower income tax paid, lower change in factor deposit as well. And there is a positive impact of the elimination of the non-cash items for EUR 2 million. That gives you the main movements around this evolution of the CFFO. Remember that the CFFO includes EUR 23 million of non-recurring items in H1 2024, due to the refinancing, out of which eight million occurred in Q2 2024. And if we look at Q2 2024, the CFFO improved versus Q1 and versus Q2 2023, and is positive at EUR +26 million. Mainly driven by positive changes in working capital requirements, is EUR +24 million in Q2 2023, up to EUR +32 million in Q2 2024. This improvement reflects the recovery of parts of the negative effects observed in Q1, due to unfavorable factoring timing, and persistent efforts to reduce the high level of accrued accounts receivable. This recovery will continue through the rest of the year and part of 2025. And now, the group is paying attention to cash management. In Q2, with the help of a consultant firm, we have launched specific actions, plans, aiming at structurally improving the management of processes that are affecting our working capital. So these measures, such as the structural reduction of late billing, require actions on the group's operational processes. Results of these plans are expected to bear fruit as from the end of this year, with full impact in 2025. Going forward, change in working capital is expected to be broadly neutral in the normal course of business for the full year, but with some, of course, timing effect, linked to the business seasonality on a quarter-per-quarter basis. Before moving to the debt evolution, one word on the EUR 250 million factoring line that is maturing in September. As we told you when commenting the Q1 results, we're expecting a final outcome in June. It hasn't happened. We are late due to administrative deadlines on the bank side. We have positive signals coming from all operations and commercial stakeholders. But still, we don't have the final agreement of the parent companies of CIC and Crédit Agricole on both sides. This should happen in the coming weeks. Constructive discussions are still underway, and the outcome is expected in probably before the end of September. We will, of course, update you as soon as these discussions are finalized. Moving on to the following slide. It shows the net debt evolution, which amounts to EUR 891 million as of the end of March 2024, compared to EUR 791 million at the end of December 2023. So net debt level, debt net, sorry, debt level reduced versus the EUR 909 million that we recorded at the end of March, many thanks to a positive cash generation in Q2. Cash and cash equivalents and financial debts are both impacted by the EUR 398 million reimbursement of the 2022-2025 bonds, but with no impact on the net financial debt. H1 net debts increase mainly results from the CFFO deteriorations I've just commented. We also paid EUR 18 million of interest for the bond before refinancing, which reduced our cash amounts. We accounted for EUR 13 million of accrued interest to these debts, decreased by EUR 9 million. The gross debt increased by EUR 25 million, reflecting also the new vendor loan debts related to the acquisition of the minority stakes in Atalian Propreté and Atalian Sûreté, as part of the refinancing. This concludes my presentation, and I now give the floor back to Frédéric for the conclusion. Thank you, Laurent. In conclusion, I would like to highlight all the achievements of the first half of the year, which certainly should not be underestimated. The refinancing is a major achievement. Strengthening our financial discipline and improving our cash management throughout the group are major achievements. ... contract wins, both in France and abroad, are major achievements. The turnaround of certain subsidiaries in difficulty, like the safety division in France, is a major achievement, and I would say that also we had to revise our financial forecast for 2024, and for a large part, for circumstantial, and if I can use the word exogenous reason, we still have real fundamental strengths that give me great confidence in our ability to implement our customer focus and profitability driven strategy. That's what I want to really insist on at this conclusion stage. Thank you for your attention, and Laurent and I will now be happy to answer any questions you may have. Thank you. If you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll be advised when to ask your questions. We will take our first question from Gemma Permal, J.P. Morgan, your line is open, please go ahead. Hi, can you hear me? Yep. Yes, yes. Thank you. Great, thank you. Thank you for the presentation, and especially for the explanation on the wage cost, that was helpful. Look, I know there are different moving parts with the earnings release. Could you maybe help us understand, because I think the opening slides mention the contract retention. Can you maybe sort of break out, you know, any contract loss and any effect from new contract wins from the previous quarters? Because I understand, like, it takes a couple of months before you ramp up, once you have the new contract win. I think that sort of attrition versus new contract wins will be helpful, and if you could also confirm whether, I think you've mentioned you've had some new contract wins as well, any indication on those will be helpful. That would be my first question. I'll start, but I was looking at Frédéric, because he's the only judge of which contract names we can discuss or not. I start to give you a sort of an overall picture. I focus mainly on H1, obviously. I try to give you a sense of the magnitude of the numbers already of the decline of EBITDA. We have a variance of EBITDA that is in the region of, for the group, EUR 3.4 million. All right? There are different moving parts. We have international being up, corporate being up, so here, and particularly international, I mean, the trade balance is on target, on budget, so we have no issues there. So really the focus should be in France and in cleaning. And to give you some color, the variance of EBITDA in cleaning is really in the region of EUR 8 million. But here what you have is let's say indexation is the main problem we've encountered, and that accounts more or less for this variance. All right? But we have, as you said, moving pieces, and we have productivity on one hand, and we have the trade balance on the other. And as you can tell, if my negative variance is mainly due to the sort of the payroll taxes, the impact, it means that productivity is offset by a lower and a negative trade balance. Now, in terms of magnitudes, and I won't give the I won't be too specific, but you should, you should assess that, we, we have an impact that is, let's say, slightly north of EUR 5 million in trade. And mainly here, obviously, compared to actually what we saw in Q1, because in Q1, we were still relatively comfortable. We've seen these trade balances mainly impacted by an increased negative impact of the losses versus wins. So the wins are satisfactory, and I will let Frédéric comment on that, 'cause I think we're reasonably pleased with what is happening in France. But the amount of losses, as mentioned, start of the year, slightly linked to the balance sheet, but it was cut off very quickly. But growingly now, because of the legacy issues, is disturbing our forecast. Well, what we can say is that if you stay on the profitability issue at the end of June, for sure, the main impact, it's indexation. We have a small impact of contract that have been lost, either last year or at the beginning of this year. But and I think I had already the opportunity to say it, but generally, we are informed of a contract won or lost, three to four months before it should start. That means that what we have at this stage in the figures of at the end of June, it's mainly tenders that have been awarded by the end of March to see it. And at this stage, the main impact is clearly indexation. What would be the global picture of this year of all the contracts awarded, unfortunately, I think that we should end the year with a negative trade balance. We expected to have a positive trade balance, but I think that taking into account the defensive contract that we have lost, the offensive contract that we have won, and the amendment of existing contract. We are still waiting for some significant tenders, but we should have figures that the net balance should be negative, not highly negative, but it should be slightly negative. To say it at this time, we are still on many tenders, and I would prefer to have the full year to give you a clear answer, but clearly, on the profitability issue, the main thing is in indexation. You can consider that it's a commercial issue, indexations, it's the request that the commercial teams make to obtain a revaluation of our prices, but I make a difference between indexation and tenders. And maybe, maybe to try to help you out, a little bit more, we're issuing a new guidance. So we're expecting EUR 100 million, now we're talking about, you know, landing on EBITDA between 80 to 90. Consider that two-thirds of the drop is linked to the increase in payroll taxes and a third in Europe. So that's more or less the ratio that is at play here. And what relates to trade balance is really linked to losses, not from lack of wins or whatnot. Sure. That is helpful. Thank you. And then, my second question is really about the liquidity, and I do apologize, this question may have different parts. But you- you've got about EUR 92 million in cash in June, and you're guiding for negative to nil, cash from operations. There's no RCF in place. Can you, first of all, maybe, help us get a sense of the factoring lines? I saw you had on your slide that you're about to have an announcement in a couple of weeks. But what's really holding them from agreeing? And is that the factoring lines maturity, is that really at the start of September, or is it more towards the end? I think most of us have September in mind, but we don't really have a date. Two, can you remind us the mechanics and the timeline of the vendor loan? I think that's for next year, but is it more of an amortizing one, or is it like a bullet payment? And then thirdly, just a general update on the RCF. Do you plan on having one? Are you having any discussions at all with lenders? Thank you. Okay, I'll try to take the questions in turn. So, as far as factoring is concerned, so I think you more or less know the numbers. So it's, we have an open line of EUR 250 million. We, at the end of June, we are, let's say a little bit short of EUR 230 million. I should mention something I think I've forgotten to explain, that is, within this EUR 230 million of factoring, there is a little bit more than 30 million that is recourse factoring. And in the midst of H1 versus H2, we have an increase of recourse factoring to the tune of EUR 8 million. So these EUR 8 million are no longer in my CFFO, but they are in cash, and we want them. So when you look at our performance, it's actually stronger than what you can see. And same thing for the guidance for the year, we haven't included this EUR 8 million in the CFFO guidance we're providing you with, but the cash will be here. It's just recourse, so it's not accounted for in the CFFO line. We expect it's mid-September, the dates where the renewal needs to happen. Obviously we are in daily conversations with the banks, so they are aware that we're getting very close to the dates. This has a... I wasn't there before, but I've, you know, learned that being more or less the case in the previous occurrences, that the discussions ended up at the last minute or that even sometimes after the date. So I would say we should reasonably expect something to a decision in between mid-September to end of September. But as you can tell, we're not very much in control of the agenda because we have had since June, as we told you, a positive improvement from operations and commercials, and we are now at the mercy of our case being discussed at the parent company levels, and it's one tiny case in the middle of many more. So we unfortunately, we have to wait there. Your vendor loan next year, it's a bullet payment. I don't recall exactly the date, I think it's in February, but we can bring you that back. It's a bullet payment. RCF, as mentioned when we last spoke, we've you know we have discussions, ongoing discussions with our current banks and then some more. We've mentioned the fact that we will have the opportunity to set up an RCF. It's probably a little early. It was a little bit early before the end of the trial. Now we are past the trial. We have now we're presenting these numbers, so the plan is to gradually discuss, explain where we're going, how we're going to open up these RCF discussions. If I want to be a tad prudent, I would say that the overall-... I don't know how familiar you are with the French situation, but the overall uncertainty around the French economy and in particular, the treatment that will be given to the minimum wages inflation, you know, basically push everyone to be a little bit on the cautious side in terms of taking decisions. Everything is slowed down at the moment, so, but nevertheless, we are going to continue to our full and try to get it as quickly as we can. Hope it answers your many questions. Next question maybe. We will take our next question from Michie Yana, Offspring Global. Your line is open, please go ahead. Hi, thanks very much. I hope you can hear me. Just on the guidance, thanks for the explanation on EBIT side, but the other free cash flow guidance, can you just walk me through what your assumptions are? Are you actually assuming some of the factoring line reduction? Is that reflected? No. No, no, no. So your CFFO guidance is minus 10 to 0. So a few things you should consider. First of all, as I've mentioned, we are benefiting from financing through our overall factoring program, and we have had an increase over the period so far, in terms of factoring capacity. We are still within the EUR 250 million envelope, but we are only using today 230, as I told you. But we've increased it by EUR 8 million, so we've managed to have EUR 8 million more of what we call recourse financing. So this is financing provided to us within the framework of the factoring program. But the status of the clients makes it that the banks don't wanna take the full liability of these bills, and so therefore they are recourse, i.e., they are as a debt to us. So they, we cannot account for them in the CFFO. So when you look at my -10 to 0, please do remember that I have a plus 8 elsewhere below my CFFO. So it's not actually - 10 to 0, it will be more - 2. You see two two eight, first element. And then the main things we're taking into account when you look at the CFFO, to make it very simple, is you have a variance at the EBITDA level, so we consider its cash is gonna go down. You have this EUR 8 million that should be within the CFFO. We will have the money, but it will no longer be in the CFFO, so you have my eight. And then for the rest, the balance, is simply made of some prudence we take on the variation of working cap. We haven't been too bad so far, but it's a highly volatile item. We're very, very dependent on a lot of processes leading to billings on time and all these things. So, as it is a very moving element, we've taken on board some prudence. If we can do better, of course, we'll do it. We'll try to do anything we can to do better than that, but in the balance you have on board is some prudence to make your balance. Voilà. So- Okay. Yeah. Okay, that's fine. Recourse. Understand. Okay. And if I can just go back to the previous question on impacts of the trade balance, you know, on net contract losses. I mean, it is called legacy issues, so it's not really nothing new that you weren't aware of in May. So- Mm. Why did it materialize all of a sudden? It didn't materialize- Change the assumption or, yeah. Yeah, no, what happened is we were expecting. No, entering into Q2, we were expecting, first of all, we were before trial. So, we could see that there was some tension around, let's call it, these legacy issues coming up, but the trial wasn't there. We've had the conclusion of the trial in early July. Since then, now the situation has changed from, you know, people expecting, waiting, not knowing, into some more certainty. Therefore, we've had, since then, some clients taking some positions as far as this issue are concerned, and in terms of what they want to do with us going forward. So the novelty is the verdict of the trial and its impact on the clients. If I may add something. It's true that the verdict didn't receive much media coverage. It was at the time where there were many things happening in France, on the political as well as on the sports side. But what we know is that the compliance department within the organization of public bodies and in corporations received the information. And in some case, I think that they may have issue without Atalian knowing that, a kind of ban just because of the verdict. And that's why I explained earlier that we need to make a kind of commercial education upstream from the major tenders. And I would say for customers and even more for prospects.... To express clearly the situation. And when we express clearly the situation with the fact, I think that we will probably be able to inhibit the potential ban, if I may say so. But it's true that I cannot give the name of the company, but I think that for one customer, it's probably something that happened. We were good at price, we were good at quality of service, but without giving us much explanation, they said that, "Okay, it's not going to work anymore with you." And this is something we really need now since the verdict has been issued to take into account and to be very present upstream from the tenders. When the tender is launched, you know, it's difficult to have a specific meeting with the procurement department or with the compliance department of the potential customers upstream. It's more easy, and it's really something that we integrate as part of our commercial approach. Okay, thank you very much. If I could just ask one more, just if you can clarify, so on the ownership transfer, was I mistaken that Miss Pécriaux is actually family member of the previous CEO? She's the wife of the previous shareholder. Okay, all right. Thank you very much. And she's an entrepreneur by herself in services that are not the same as that Atalian, but she has a good and significant experience in welcoming service, event rental services company called City One. She is clearly a chairwoman knowing the business we operate. We will take our next question from Miquel Lluis, Bain Capital. Your line is open, please go ahead. Hi, thank you for the presentation. I wanted to ask on the trade balance. I know you have discussed it before, but you didn't really give many precise figures. So if you could discuss gross churn versus contract wins by sector in the past quarter, that would be helpful. Thank you. Trade balance, contract wins per sector. When you mean by sector, it's cleaning- That's right, by segment. Yeah, in France- You mean safety, maintenance, energy, or by sector activity of our customers? Sorry, I meant by, you know, geography, and then in France, if you can discuss cleaning, which is, you know, the biggest sector now. As you know, in France, we have roughly EUR 1.4 billion, out of which cleaning is a bit more than EUR 1 billion. So it's more or less, I would say, 70% of what we do in France. Altogether, I would say that it's probably proportional, maintenance and energy is winning contracts. And what we lost was in cleaning and safety and security business. But we win many contracts. That's why the net balance will be negative, but it would be not that high. Talking in millions, I expect to have a one-digit figure, sorry, at the end of the year. Okay, that's, that's so cool. But maybe if you, if you can discuss churn and, you know, and additions in terms of like, churn in terms of percentage and additions in terms of millions of contract wins, you know, in, in the previous quarter. Look, this is. We don't provide this degree of precision in our numbers, so it's quite complicated. But, if the only thing is I could tell you roughly is that you have, we, in terms of EBITDA impact at the moment, our losses are twice as high in impact as our wins. Now, there is an element of logic in there that when you win a contract- In the twin figures. In each one. Twin figures. When you win a contract, it's always on a lower margin than when you lose a contract, so there is an element of reason within that. But there is an element of volume, it's picking up a little bit in H1, and we expect it to build up a bit more in H2. But it's two to one at the moment, probably is gonna. It could tweak more than that in H2, simply because we're hearing about contract interruptions. And by the way, could also feed through to 2025, because some of these contracts, we learn that we are going to lose them, but we still operate them, and we still be continuing to operate them part of H2. But then the loss will happen sometime in H2 and will impact mainly 2025. So that's why also we're quite prudent on 2025. Mm-hmm. Okay. I mean, I think that in the past you have provided figures, at least for retention, and, you know, in other presentations, there were figures for contract wins.... But, yeah, okay. And if you could provide us- It was on a yearly basis. On a year, on a yearly basis, in previous presentations you had for, if I recall properly, for 2023, we had for France, so it was all over overall, you had a 13% loss ratio, including an 11% loss ratio for cleaning, knowing that we had a very big contract in security that we lost, and so that was the EUR 11 to EUR 13 million. Overall, this year, we, we're not gonna lose any major contract in security because they are much smaller. But it wouldn't surprise us if the loss ratio would be more or less at the same level than last year. It could be there, but again, it's a bit early days. We are just in August, but. But at this time in France, if I take the picture at the end of July, we win more contract in volume in France than previous year. Okay. That's helpful. That's why it's part of the good news that make me confident. That mean that our offers are competitive in terms of content as well as in terms of price. Okay. And are you also losing more contracts than last year? Yeah, of course, there's more of everything. There are more wins and more losses. So it's- Okay. It's more or less what happened, you know? Okay. Could you discuss the price increases that you have put through in the first half, and whether you expect to pass more price increases in the second half? Indexation, price increases in the first half. Sorry, I didn't catch the question. Yeah, it- What I said is that since there is an increase of the wage in the 1 July, we have started in June a second campaign of indexation. Since you had some perturbation with the general election in France with the European Games and with the summer break, some of the discussions are not finished. But we are currently trying to obtain a second increase when we had one the 1 January, or to if we had none in the 1 January to or in the first semester, to obtain a second one. We are currently, but it's a current process, and we are talking of thousands of contract that it consolidated on a monthly basis. But I have not the result at the end of August at this time, since August is not finished. As I said, we stick, we are very active and determined on price indexation. But as said, it's not easy and I've been in service business for years. I can confirm you that indexation revaluation, it's the most difficult commercial act. It's easier to win contract than to obtain revaluation when you have not indexation as part of your contract. It used to be the case. Now more and more in the new contract, and it's also some things that make me confident for the future. More and more we can put the new cleaning index. I think we already presented in a former presentation, but since October last year, we have an official index of the cleaning cost that is issued by INSEE, which is the official public body on statistics. They publish every quarter an index which reflects faithfully the evolution of our cost. We try more and more to have this index in our contracts and without any consultation. Naturally, we know that our competitors try also to have this index as part of their new contract. Okay, thank you. And can you quantify on average, what's the price increase that you passed in January, and the one that you are trying to pass now? Can we provide a sort of the price, the price increase we had in January, the price increase we have today, and how much we passed through? It's complicated because you have. It's not one price per contract and you know- Yes. If you do one number in cleaning, you have 30,000, 30,000 contracts. Yeah, kind of an average, I mean, to get an idea if it's like- With that, I give you roughly the figures. I've told you that what we have been able at the end of June to pass through is close to the general index price, which is 2.3%. We have 0.7% increase as of the 1 July. That will increase, by the way, the gap between the FEP minimum and the SMIC. And so, we try to be closer than 3% for the full year. This is what I can give you at this time. ... All in all, if you want to have a sort of a, it's a different way of looking at it, but we provided you with. Frédéric provided you with the absolute impact of the increase in terms of staff costs. To make it simple, half of that has been passed through and half of that couldn't be passed through. So it's 50% of the increase at the moment has been actually passed through. And I'm talking about 2024, because last year it was fine. The pass-through went okay, but so at the moment, we only managed to pass through half of the- Last year, we had not this impact on the Social Security charges. No. And it's true that when you discuss with the customer, he can see the increase of the salary. This is quite clear, and it's indisputable, if I may use the word. But everything that has to do with Social Security charges, when they are of bad faith, and even if they are of good faith, they are quite reluctant to accept to take it into account. And that's why this gap between SMIC and cleaning minimum wage has been so painful. And it's something quite new. There have never been such a gap currently between if you take the hourly rate, sorry, between SMIC and cleaning, we are seeing 4.12%. It has never been seen in the last years. Okay, that's understood. So if we take the margin compression that we had in France of around 2.4% in Q2 compared to last year, can you break down how much of it comes from wage increases, how much of it from this Social Security charge, and how much from those legacy issues? Look. We cannot go down into such details. So I'll go back to the sort of explanation I've provided you with. The variance in H1 at the cleaning level is in the region of, you know, losing EUR 8 million of EBITDA. This eight million more or less represent what couldn't be passed through terms of indexation. So you have that. And of course, in maintenance, you know that we have a positive impact on productivity as we do, 'cause we continuously improve our numbers here, and we have. And so that's a positive, and obviously, it has been offset by the negative in the trade balance. And I've said earlier, you know, it's slightly more over in between EUR 5 and 10 million, but that's all I can give you there. Okay. Maybe one last question from my side. Last year we had, you know, similar issues. It was not possible to fully pass through inflation because cleaning inflation was above CPI inflation, et cetera. In theory, in 2024, we were going to recover part of that- Yes. But, you know, we see that instead of recovering, we are losing even more. Do you think that this is going to be possible to recover, you know, those profitability levels, or do you think that, you know, this is like a new regime in which, you know, cleaning in France is not that profitable? No, I think, well, it's a deep question, but last year what you had is, if you recall, 'cause last year was 2023, all right? And you had in 2022, because of the changing of managements, because all the stories around at the time, the disposal of the assets or whatever, you had a sort of, with my words, but the management before Franck Julien came back was a little late in pushing through an indexation approach. So what you had in 2023, you had a negative impact of indexations coming from all the late contracts of 2022 and the beginning of 2023, but that was simply because the management wasn't too active, let's say, in passing that through. Once the management started to jump on board on that, we've seen that in 2023, cost indices were accepted by clients, and that went through. So the overall 2023 picture for the 2023 contract indexation issues was actually okay. As we told you, and the other, what we have in 2024 is, I think Frédéric has explained it in many details, but we have a novelty in the sense that we have, let's say, to simplify, way higher payroll taxes than in the past. That is complicated to catch up. At the moment, we are only, as we speak, we can only capture back 50%. Are we gonna recover on the- The global? On the global, are we gonna recover this 50% on an ongoing basis on this current contract? I doubt. We'll give you, we provided you with a guidance that shows that obviously we don't believe that we'll be able to recoup some of that. In the new contracts that are upcoming and being signed, the salaries, the cost proposed include higher payroll taxes, so. And you know that the length of our contract, I think it is on average, you are in 18-month period, so you have the refresh. So your problems usually arise when you are within a contract, and within this contract, you wanted to, you know, you charge a salary of 10, and suddenly the salary has gone up to 12. And so you said to, as your client, "Please take the two." But when you renew the contract, you're gonna go up and say, "Okay, the cost is 12." And so the logic is that there should be a refresh coming. The average duration of our contract in France, it's less than three years, as an average. It's often two years in safety, it's three years, two to three years in. Yes. It is true that the retendering process, as it has been explained by Laurent, enables, and on one end, to bring global payroll cost back up to the right level. This is the first issue, and secondly, as I mentioned, we try to push on our customer the, what I call, the official cleaning cost index. Official being that is issued by a public statistical institute, and this is new, since it was created in October last year. Okay, thank you so much. Yeah. Thank you. We will take our next question from David Alty, Arcano. Your line is open, please go ahead. Hello. Two questions, please. First, on the renewal rate of defensive contracts, can you give us a feel for where you are? Has it come down to, I don't know, 50%, or is it better than that? And where were you last year? And then my second question is about the factoring lines. What is the contingency plan if the factoring lines maturing in three, four weeks are not extended? I'll take your second question, because it's quite, the answer is quite direct. I mean, if you remember, we have a EUR 250 million factoring line, out of which we're using EUR 230 million. If the banks were to say, "Stop," we cut down completely the factoring, there is no way we can find EUR 230 million. So, there is not even a possibility to have a plan B. Having said that, I don't think this is- this doesn't reflect the tone of discussions we have currently. Again, as mentioned, the business people and commercial people are on, and we are more at the parent company level. But there is not a possibility to have a plan B on this, in here. Do you wanna take the retention? The question or idea is not really in the current year to comment on the retention rate, because I think it's more significant to see it when you consider the full year, but at this time, it's better than it used to be last year about the same time. Okay. And I guess I'll stop there. Thanks very much. Good. We will take our next question from Alice Cerra. Searchlight Capital, your line is open, please go ahead. Hi, good afternoon. Thanks for the presentation. I have two questions for you today. The first one is around security and multi-tech, so anything in France that's not cleaning. What are your plans for these segments, given the underperformance? I'll let you answer that question before I ask the second one. Sorry, could you repeat the end of your question? 'Cause the line is, it's quite complicated. Yeah, sure. I'll just repeat the entire question, just in case. So my question is: What are your plans for the security and multi-tech segments, given the underperformance? Sorry, let me just rephrase. Security and multi-tech or management are not underperforming, they are actually performing very well. The safety division, remember it was loss-making, it's still loss-making, but it's in advance on the recovery plan. The idea was to have it back to black figures or green figures in 2025, and we're in advance on our plan. Multi-Tech is performing quite well. It's developing significantly with a growth that is a profitable growth, and we have new customers, and we operate quite significantly. One of the issue was to make sure that we were able to be present all over France, because we used to have an implantation that doesn't cover the full France, which is not the case for cleaning. And we have been quite successful in implementing new positions. So we... If your idea is, can multi-tech and safety compensate the cleaning headwinds? The answer is no, just for a question of size. We are talking of global figures, global turnover in France of 1.4 billion EUR, to make it rough, out of which a bit more than 1 billion EUR is in the cleaning business. You cannot compensate even if they overperform. We cannot compensate the headwinds in the cleaning business. ... Okay, you used to report the breakdown of EBITDA within France, so you used to separate cleaning from security and multi-tech. Could you please provide the EBITDA breakdown for this quarter? No, I think we did it during the refinancing process, but in the more classic reporting of the company, we unfortunately do not provide the breakdown. There is a tiny bit of a commercial sensibility to that. We're trying also to protect ourselves. We're the only company that is listed in this sector, so we provide to our competitors a great deal of info on the sector, on the trend, but we would like to limit that. So that's the reason why we don't disclose all the various profitability or various segments. As we do not give the detailed country by country for the different zone, where we, for the two international zone. As it has been mentioned by Laurent, our competitors are mainly family companies, and there are one that is present, the GSF, has presented accounts, but they have presented accounts on 18 months exercise, which it limits the comparison, but we do not want to give too many indicators to our competitors. This business, I recall you, is very competitive. Okay. Thank you. I'll move on to my second question then. So could you confirm the company will be receiving EUR 55 million plus capitalized interest from CD&R early next year, as a part of the sale of the U.K. business? Yes. Yeah. Is there a- It's fifty-five and plus, plus roughly, yeah, it should be sixty-three, taking into account the accrued interest. Okay, that's helpful. And, do you have a sense of when next year that will happen? Like- As mentioned, I think, I've tried to- February. I've tried to answer the question earlier. I think it's in February. It's end of February. I don't know the exact, but it's February. And good news, it's a year with only twenty-eight days in February. Okay, great. Thank you. That's all on my end. There are no further questions on the line, so I will now hand you back to your host for closing remarks. Okay, now, first, thank you for your attention. We wanted to be, as it has been the case, for the last call, in full transparency with you. The idea is really not to hide anything. We have headwinds, and but, these headwinds should not hide the fact that we have many satisfactory events in this year, and the headwinds, as I said, are for the biggest one, exogenous. We support them, but I would say, as our competitors do, we are clearly at work, and we really try to deliver, first to our customers, the best service that can be provided, but also the best performance for our lenders. And, we are committed by our strategic plan. And, I can confirm you that myself, Laurent, as well as the other Comex members and the people in the team, are working hard. It's not an easy job. But we are very committed, and it makes me quite confident. But one more time, thank you for your attention.