.Welcome to the Alten web conference regarding the third quarter twenty twenty-four turnover. Please ensure that you have chosen the language that you prefer to follow the conference. In order to do so, click on the interpreting icon. To follow the webinar in optimum conditions, please launch it via the Zoom App or your browser. Do not hesitate to ask your questions directly in the Q&A module, or you can raise your hand and we will give you the floor at the end of the conference. Please write your first name and last name so that we identify you. For those of you joining us by phone, by the international phone number, you will not have access to interpreting, and you will hear the original audio without being able to follow the slides. We will not be able to identify you either, which is why please state your name before asking your question. If you would like to take part in the Q&A, you can raise your hand by typing the hash key and nine, and then you ask your question with hashtag six. Thank you. We're now going to give the floor to Mr. Benoliel. Thank you. Good evening. Thank you for taking part in this conference regarding the Alten activity at the end of September twenty twenty-four. I am going to try to be brief, because we have another conference for Assystem in one hour. You should have received our press release because Cécile sent it at the end of the day, and I'm sure that you've already checked the figures, so there's no rebound in the activity. This third quarter made the erosion of growth worse and worse than what had been anticipated by our clients. Some of those who had already planned reporting projects before the summer decided a few days before projects that had been confirmed in September and October canceled other projects, in particular in the automobile sector and in the aerospace sector. At the end of September 2024, our turnover is EUR 3 billion, 116 million, 7,000. In France, the business has gone up by 5.8% and 3.2% outside of France. On constant data, our activity is only growing by 0.3%, 5.8% in France, it is going down by 1.8% outside of France. Over nine months, the business has had a 0.6% lower or more than last year, and this has had a nonsignificant impact, a trivial impact on growth. In the third quarter, overall growth has been 2%, 5.9% in France, and 0.2% outside of France. On constant data, growth is thus at 0.1%, 5.9% in France, and -2.6% outside of France. As you know, the activity rate is slow this year. There are postponements, the projects, and so we have a higher level of inter-contract. Our billable activity rate is 91% this quarter. It was higher last year, and at the end of September, it's at 91.2% against 91.8% at the end of September 2023. The rise in inter-contract is still limited in spite of the postponement, but it has an impact on our recruitment dynamic. The headcount of the group has gone down slightly because we're at 58,000 collaborators, when we were 58,300 in June and 57,000 at the end of 2023. Engineers have gone down by 51. Are now at 51,000 collaborators, whereas we had 51,390 engineers at the end of June and 50,000 at the end of 2023. Overall, throughout the year, our engineer headcount has gone up by 1,200 people, 894 from acquisitions, and 376 from organic growth, with a slight slowing down on growth in France, with 50 engineers and 326 engineers outside of France. To sum up, out of the fifty-one thousand two hundred and twenty engineers, eleven thousand seven hundred and fifty of them are in France and thirty-nine thousand four hundred and seventy outside of France. Now, if we look at business in geographical areas, you already have the main trends. They're exactly the same as the one we commented a month ago. France has a satisfactory performance this quarter, but with two extra business days compared to last year, so a growth of 2.9%, had it been the same number of business days, so France is still growing, but you will see that the growth rate is slowing down. Business has grown year on year in automobile, life sciences, defense, and energy. Telecommunications and BFA are still slowing down, but business has gone down in the automobile sector and aerospace sector. In Iberia, growth has stabilized at 9.5%, so more than 8% of growth year on year. All sectors are growing except for finance and life sciences, which are slightly declining. In Italy, growth is still slowing down, but it remains satisfactory because it's 8% in Q3. All of the significant sectors have slowed down but remain growing, except for non-finance, which is almost stable. Bank and finance, rather. In Germany, business has gone down by 16%, and year on year it's more than 11%. In the automobile sector, which represents about half our turnover, is decreasing by 16%. OEMs, which represent two-thirds of German turnover, are still growing, but there's -45% for equipment. Aeronautics is not progressing much during the third quarter. In the U.K., business has gone down by 12%, mostly because of the aerospace and the civil aerospace and public sectors. The public sector was impacted by the freeze of budget, and we're expecting this to resume in 2025, but we have no guarantees. The automobile and aerospace sectors have also slowed down. In Benelux, we have a stable activity, slightly decreasing in Q3 because of life sciences in Belgium, mostly, whereas the semiconductors in the Netherlands have started growing in the third quarter again. In Scandinavia, our business is stabilizing at 10%. The tools and machines and tertiary sectors are the most strongly impacted. In Eastern Europe, there's a decrease that is not as significant in Q3 as it was in the second quarter, since it's only a 4%. Poland, which represents two-thirds of our turnover in Eastern Europe, is growing, whereas in Romania, our business is still decreasing by 15% in Q3 because of the automobile sector and because of the tertiary sector. In North America, our business had started to grow again in the second quarter, but as you can see, in the third quarter, it's stable. This does not mean that our business is not resuming in the U.S. It was mostly impacted in Europe by the project postponements in Stellantis and Blue Origin. In Canada, our business is growing. It's in the U.S. that our business has slightly gone down, and in Canada, it's growing by 7%, even in the finance sector, which was decreasing in the first quarter. In Mexico, we still have strong growth, 30% for automobile and bank and finance. In Asia Pacific, our business is stable, still slightly impacted by the situation in Singapore. There's a 4% increase. China represents a third of the Asia Pacific region. There's an 8% growth, but it's slowed down in Q3 because of the automobile sector and the telecommunication sector. India, 30% of the area, is growing by 10%, but this growth rate has slowed down in Q3, slowed down in Q3 because of the automobile sector as well. Japan, which represents 20% of the area, and the growth was slowing down, but it's decelerated because it's only 2% in Q3. As for Korea, 9% of the area, the growth is also slowing down because of the automobile sector. So in a nutshell, we can say that Southern Europe is growing still, and it's satisfactory. France is between Northern and Southern Europe. Same for Benelux. And Northern and Eastern Europe, including the U.K., are struggling. They are faced with significant difficulties, especially in Germany and the U.K. Now, if we look at the different business sectors, the automobile sector is growing by 3.5%, but the business stabilized in Q3. Just like for the first quarter, most OEM manufacturers are improving, but some have slowed down in the third quarter. As for OEMs, the slowing of business is more significant, minus 22% year on year, but almost minus 30% in Q3 because of German manufacturers who have seen their projects, the number of projects, decrease significantly. Rail, there's still strong growth, 6%. Aerospace, 8% growth, but this growth was slowed down in Q3 because it only reached 4%. Airbus had made announcement in January, but actually this, growth was even slower than what we expected, and projects have been postponed in September and October. Defense and security, there is a 19% increase. The growth rate has accelerated in the third quarter. Energy growing by more than 3%, thanks to nuclear energy, represents about a third of the sector, and the growth rate has reached 15%. The oil and gas businesses, have grown by 15% year-on-year. We will see if this is because investments are resuming in this sector after several years of slow growth or if it's just functional investments because of a few important clients in this, business sector. Life sciences are declining slightly. Electronic semiconductors and industrial equipment is rather stable, and there's slight growth in the third quarter. Telecommunications are slowing by 5%, but this deceleration has slowed down in the third quarter. Here again, it's slowing down. The retail services and public sectors are also declining by more than 6%, mostly because of the significant decline in budget in the public sector and in these services. In the third quarter, similar to the first one, because of a more significant decline in the aerospace sector than we expected. It's not what was announced by our clients at the end of 2023 for the second semester of 2024. For M&A, no new acquisition was finalized. The closing of the new acquisition that was announced should happen before the end of the year. What to say about 2024? It is a difficult year. Growth has eroded all throughout the year. The third quarter is more difficult than expected because some accounts in the automobile sector are still slowing down, including because of a few manufacturers. The number of projects started is much lower than what had been anticipated and announced. Even though the announcements in July had already encouraged us to make decisions and to take this into account in our recruitment strategy, because there was a decrease in projects that had been announced. Alten was faced with projects being delayed or canceled. Some of them were quite important, even if they had been confirmed by several clients, this was because of cash flow strategies or investment strategies. We have seen these. This is quite unprecedented because these projects were canceled or delayed at the last minute. It's extremely rare. I think it had never happened since 2013 or 2012. It seems as though some clients were also surprised by their own difficulties, which explains why they have postponed even more projects compared to what had been planned at the beginning of. These postponements of projects also came with requests to delay payments at the beginning of January 2025 for projects that were due at the end of 2024. The economic context in Europe is not favorable. The rebound in the U.S. is not clear. Asia's growth is sluggish. Even though we'd anticipated a worst-case scenario, the truth is, we have to even adjust slightly our growth objective for organic growth, instead of decline, because we are planning on -0.7% to -0.4% organic growth to the end of the year. Operational profitability doesn't come as a surprise. It was announced. It will be negatively impacted by an inter-contract that is slightly more significant than planned and higher SG&A, slightly below what we had in the previous years. Despite an increase in the cost reduction plan that we didn't implement as a consequence for 2024, we're planning on having an operational margin around 8.7% for 2024 in a similar economic context. I'll give the floor to the participants. I'd like for you to open the conference, people to be put unmute, please, as per usual. Laurent has a question? Over to you. Hi, Vincent, Bruno, and Laurent. Going back to the forecast for Q4, it seems like there's a major step, 3-4% for organic growth. Is this only the difference? Is the difference only related to the automotive sector, or is there something else? And finally, I know that it's probably early to say for 2025, but you're already starting the year with a decline or a degrowth. Do you think we have the capacity to go back to growth in 2025, or is it likely that we'll again have a performance that's declining in 2025? These projects that have been postponed compared to what was planned initially, especially for projects that were supposed to start, and we were informed that no more than ten days before they were supposed to start, that they were postponed when the teams were actually ready to go. This is a situation, I have to admit, that is very specific, very peculiar. Especially given the fact that we'd, I mean, we had been informed that they were reducing their costs for Q3 and Q4, and that is why we revised and downsized our organic growth objective. But usually, I'd say that the forecast that we have, we're able to make them happen. But I don't remember ever finding ourselves in a situation where almost on a, on the Tuesday for the next Monday, that our client doesn't have the budget and that the project has to be canceled. I can't remember that ever happening before, and this has happened more than once. These are situations that we've had to face across the board, in the U.S., in Europe, mainly Germany, France, U.K. Countries where we have a lot of aeronautics and automotive activities, and it's mainly in these two sectors, that the situation that this kind of situation have occurred. But in other businesses as well, we've experienced an erosion of our growth, or at least erosion of the demand and the level, and then the number of startups of projects or call for tenders end up being lower than expected. To answer your question, globally, it's mainly relevant for the aerospace and automotive, but also you have life science, finance, that are more resilient, but they're still more sluggish than what we had in our forecast. Even though we had already been very reasonable in our ambition. I'm sorry, just stepping in before you end your answer, but when you give us the figures after nine months into Q3, the verticals were not as bad for Q1 and Q2, including for the banking sector. It feels like Q4 is even going to be harder. Even though we had sectors that were starting to stabilize throughout the year, it feels like it's just going back to this decline, right? Well, the truth is that Q3 is not as good as what we'd expected. What we would have expected. That means not only are we starting Q3, Q4 with this degrowth, but this decline because of Q3, but on top of that, we've had to downgrade the forecast for Q4. This cumulates, so the negative performance for Q4 also comes from the performance in Q3. What about in twenty twenty-five? This is a very relevant comment. We're going to start twenty twenty-five with an onboarded degrowth that we haven't assessed yet. We need to wait for the end of the year to do that. But if twenty twenty-five is flat, and that's not the scenario that we have for now, we're discussing with our clients, and right now they're mainly reducing costs and managing their cash flow. That's what's happening right now. But... So there's no encouraging sign right now, as of today, that would allow us to think that there's going to be a rebound for twenty twenty-five. And the big clients that we are lucky to work with, with large accounts, talking with the technical management, R&D departments, they tell us that they have no visibility whatsoever because they have also had constraints in their budget management, and they've suffered budget cuts that they did not expected because of the financial department. And that's just the news that they got, and there was no notice. So we ended up in a situation where we had a team of fifty people, we had a team of one hundred people in Germany, who was supposed to start their project, and it didn't. The revenue, of course, suffered from it, and that also increases the fact that sometimes we have more downtime between contracts. For 2025, if the activity stabilizes, then there will be organic growth. But I don't know to what extent. You're hoping for an increase in Q3, which would be, yes, symmetric with the deterioration that we've observed in Q3 for 2024? Apparently, I don't want to speak for, on behalf of others, but based on the information that I get, it seems to be actually very similar in our sector and even beyond. Just one last thing, have you been able to try to assess your taxes? Between 3 and 5 million EUR in Q4. The tax surplus, and probably half, this will be halved, but it needs to go through the... In 2025, in it, but it has to go through the Senate. Aditya Budarapu, over to you. Hello? Hello, you able to hear me? Yes, yes, Aditya, we can hear you. Okay, great. Thank you. Apologies for the issue with the audio. Just a few clarification- Aditya, could you please speak a bit louder, because- Okay. You're very far. Mm. Okay. Sure. I'll try my best, and let me know if there's any difficulties in hearing me. Thanks for taking the question, Bruno. Appreciate it. Maybe just to clarify a few things, in case I missed it in the translation. So did you say that automotive OEM customers were down 30% in Q3? Is that the number you gave on the call? No, not really. What I said is that, within the auto sector, we, on a year-on-year basis, achieved a growth of 8%, which is not bad. There is a big difference between the OEMs and the manufacturers, because OEMs still are growing at 14%, while the manufacturers are declining 28%, so close to 30%, but just the manufacturers. The manufacturers are representing a third of the whole auto business at Alten. So what I said is that, as a result, we have, on a year-on-year basis, a decline today of more than 20% at the manufacturers, while we still have a growth at the OEM market. I also underline that globally, what we see is that even at some OEM, which we are performing well, until now, we see a deceleration of the growth at some OEM in Germany and also in France and in the U.S. We don't worry, but the situation is less, I would say, booming, than it was during the H1. We are very concerned by the manufacturers, because in Germany, it's really very, very difficult. We are at minus 45% in Germany for the manufacturers, while we are still growing at the OEM. I think that Q4 will be even worse in Germany at the manufacturers. Okay. Globally, it's not minus 20-30%; it's plus 8%. Okay, understood. Thank you. Thank you, Bruno. Just to clarify another point, on 2025, you said you don't see any signs of a rebound. Did you say something about entering the year with negative growth, or did you say something about 2025 being flat growth, and then follow? If you could repeat that, please. Yes, for sure. Yes, as we've been declining over twenty twenty-four, and especially the decline in terms of trend will probably be stronger in H2 compared to H1, because starting September the dynamic of O2 in Aero is much less positive than it used to be. We are going to start twenty twenty-five with a negative embedded growth. I still don't know how much, because it will depend where we're gonna end twenty twenty-four, but for sure it will be a negative embedded growth. So to achieve a zero growth in twenty twenty-five, it means it involves that we will have to grow again to offset the decline of twenty twenty-four. And you're right. I said that we have no visibility at all, as our customers themselves have no visibility on their project portfolio, I mean, globally for 2025, and the global budget they will have tomorrow. Okay, got it. Thank you. And then now the new guidance for twenty twenty-four implies Q4 being something between -3% to -4.5%. Can you maybe just talk about what gives you the visibility on getting to that number as well, given you're seeing some of the cancellations or postponements are happening very close to the starting time? Do you have any indications at all that this number or these forecasts are maybe driven by projects which are definitely going to happen? Or could we see further, you know, very short-term cancellations as well, impacting this full year forecast? What we have taken into account what we already know, and even if customers are today saying that they will not cancel further projects, they also said that in September and October, and we saw that it happened again. So to be frank, I decided to take a buffer of further cancellation, even on projects that have been confirmed for Q4. Okay. Fine, so there's already some buffers for project cancellations. Okay. And then maybe just on the headcount, can you just talk about how you're thinking about the hiring and the headcount management into the end of the year and into 2025, given the uncertainty around demand, and you know, when projects might get postponed? Probably we will continue to slightly decline in Q4 in terms of net hiring, as we did in Q3, because we have to follow our project requirements in terms of people, if we don't want to borrow a bench that will be too expensive. As we don't want to impact too much the gross margin, we are obliged to let people go, because the staff turnover is still 22%. It has not declined to 15%. So we are monitoring the hiring in a way that we can adjust the bench to roughly 9%. Okay. Thank you very much, Bruno. That's very clear. Thank you. Thank you. There are no more questions. Yes, there is one. We have a question from Mr. Nicolas David. Over to you, Nicolas David. Good evening. Good evening, Bruno. Going back to the automotive and aerospace sectors. Automotive, so just to clarify, year-on-year, Q3, it was 4%, and it was up 9% over the first nine months of the year. But Q4 should grow for automotive and year-on-year for the first half of the year, because the performance was really good in Q4 and first half of the year by 2023 and 2024. There was actually a rebound in price, if I remember correctly. And this is going to amplify the year-on-year dynamics. This is the... We're starting the V-curve, which will have a hard time to reverse by next September. And what would be a realistic scenario on, in terms of year-on-year growth for the automotive, for the first part of the year, 2024, if we're cautious? It's hard to forecast that. What we're struggling is to know when it's going to start slowing down with the OEMs. There are some OEMs for whom we have, we're above -60%. And when we talk to some clients, they're panicking in Germany. OEMs are quite resilient for now, but globally, the whole sector has slowed down significantly in Q3. When I said that it slowed down a lot, it's the growth that has slowed down, even though the activity tends to stabilize, especially with some OEMs, it stabilizes after years of growth, but the real topic at stake here is that there are clients that have made announcements that you're aware of, Stellantis, Renault, you name it. Some industrial German OEMs as well, although cars... But if it was only for them, we'd probably still have a two-digit growth next year. Not across the board, maybe not Daimler Truck. But the real question is OEMs. Okay, but I would feel that as if the OEMs that are down 50%-60% year-on-year, they would have hit rock bottom by now. But we don't know, because this is something that we look at on a quarter after quarter basis. But if you read the news in Germany, they're announcing that they're going to slash the headcount between 40% and 50% reduction of their headcount. You were talking about OEMs that could grow next year, but why would OEMs, Volkswagen or Geely, how would they grow in 2025? The danger is also the fact that it could also deteriorate. It could erode with the OEMs as well. That's what I said. But if it was only for the OEMs, because we have growth embedded, and there's not a single player that has experienced negative growth, it's not because the, their growth rate is slowing down that we won't grow next year. See? And the OEMs, they have to manage their cash better, clearly. That's, that's a revenue issue that they have. If you read the news, it's clear. On electric car sales, you need to understand that the revenues are not exactly what was expected. So of course, adjustments have to happen on the slowdown of investments and cash flow management over three months and a little bit more. That's what we're going through right now. But there are still projects that need to take place as part of these transition projects. Now, you also have OEMs that are asking themselves questions on their investment strategy. These are questions about what kind of battery should they invest, what generation. The Chinese are five to 10 years ahead of the Europeans. There are some OEMs that have decided to acquire the Chinese technology with a license contract basis in order to avoid having to make the investment. So this is probably why our clients end up postponing their investments, because they don't have this visibility as to how or where they should invest. Thank you. That's clear. And the aerospace sector, do we also have a decline among OEMs? Mostly Airbus, of course. It is the key account, but it's the same trend as in other OEMs. And at Airbus, they made a big adjustment in September, and now since the beginning of October, we are being very cautious for Q4, or is this also a Airbus is still in decline, even for the first semester is going to continue, sequentially? I am not sure that the contacts that we have, have the information. When we read the communication given by Airbus regarding their process-production process rationalization plans, they communicated regarding these plans in the press, and it doesn't seem impossible that there might be extra projects, including for manufacturing engineering in 2025. They seem to have been to give a lot of visibility with their plan. They gave visibility internally and on the market regarding their goals for their savings plan, but the operational declination of the plan in the long term, I'm not in a position to answer, and neither are the contacts we have. We don't know what impact it will have on the business level in 2023, but it will have an impact on the engineering projects. Regarding prices, when we have reneg.otiations, will it be more difficult than in previous years? Yes, it will be more complicated for two reasons. First of all, because inflation has gone down again. So, wages should not be raised as much, and our clients have many projects in the five years to come, and they don't have the revenue level that they expect. So we are expecting them to ask us to help them make productivity gains. It's already the case in the automobile sector, and our answer, I think, will be an acceleration of their... of offshore projects. And when we look at France only- ...We're way ahead compared to the rest of Europe. But growth in the automotive sector is made mostly offshore, at 80% offshore since the end of COVID. This is very clear. We hired one thousand engineers in three years in Morocco for the automotive sector, and three or four in India. But for margins or EBIT, where do we stand? For the margin rates, yes, it's satisfactory, even if there are higher costs, because we need to steer these projects. There's a critical mass, but we also have to accelerate our adaptation of our organization. We did not think that we would finish the year with such a low turnover. Say we were expecting several dozens or even hundred thousands of euros. Our SG&A has been cut significantly, but we have structures that are still in high-cost countries, and we're trying to reorganize our delivery, among other things, because our turnover is not the same in Germany as it is in Morocco or India. We also have to adapt the cost structure. So our margins this year are not going to be great, but when we take into account the cost of the extra downtime, it explains a lot of the margin discrepancy. It means that we've compensated, in part, with our cost structure, the decrease in volume, because we've had lower turnover and top line this year. Indeed. Okay, thank you. It's clear. This is the best that we can get with the visibility we have. Indeed, well summarized. I think that there are no more questions, so we're going to close this conference. Right in time for the Assystem one that is about to start. Thank you for taking part in our third quarter conference. We will see you again at the beginning of January for our conference on 2025 business. I'm not sure that we will have more visibility, because it's usually in February and March that we are starting to have more visibility, but we will, we will know the figures for year 2024. Thank you very much. Enjoy your evening. See you soon. Bye.