Welcome to the ALTEN 2nd Semester 2025 Turnover Web Conference. Please choose the language channel that you desire to follow the conference. In order to do so, click on the Interpreting button. In order to follow the webinar in optimum conditions, please launch it via the Zoom app or your web browser. Do not hesitate to directly ask your questions in the Q& A module or to raise your hand so as to be given the floor at the end of the conference. Please write your first name and last name where intended so that we can identify who you are. For those of you who join us via audio by dialing the international phone number, this option does not allow you to choose the language you desire. You will thus hear the original without being able to follow the slides. We will not be able to identify you either, which is why we would like you to state your name before you ask your question. If you would like to take part in the Q& A, you can raise your hand by dialing 9 and turn on your microphone by dialing 6. Thank you for your attention. We now give the floor to Mr. Bruno Benoliel. [Translator]: Good evening everyone. Thank you for joining our own conference regarding the activity of the first semester of 2025. Our business stabilized and we have macroeconomics perspectives that were more favorable at the beginning of the year thanks to the interest rates of the American election. Unfortunately, these perspectives were changed because of tariff barriers. Many budgets were frozen, including in the industry. The situation is similar to the one I described in April, which means an activity that continues to erode slightly even if stabilization should happen soon during the first semester of 2025. EUR 2.84 billion compared to last year, when it was at EUR 2.1 billion. 3.8% in France and outside of France it has declined by 3.1%. At 3.5% our business is going down by 3.6% at the same scope. We had thought that the decline would be of 5.6% so it is - 4.3% in France and 6.2% outside of France. The activity was also penalized by 1.2 business days less than last year. There was an impact estimated the degrowth would have been 4.7% if we had the same number of business days. The group's business was penalized by the decline of the automobile sector and the organic growth would only have been 3.4% or 2.45% if we had had the same number of business days. As anticipated, w e commented already the second semester has not seen the trend being bucked, - 1.8% in turnover compared to 2024. EUR 1.41 million, 5.7% decline. In France, o ur business level is the same as 2024, 91.1% for the semester, close to 2024, which was 91.2%. Still lower than its normative level, but still very satisfactory in light of the overall context in the sector. The group's headcount continued to decline. At the end of June, we had 57,900 collaborators. We had 52,000 staff at the end of March 2025, out of the 51,000 engineers in the group, 11,800 are in France and the rest is outside of France. With the same scope for the first semester, our engineer headcount has gone down by 158 people, 281 in France and 295 out of France. We are going to include 996 engineers through the integration of Worldg rid. In France, the organic decline is 4.3% with one less business day than last year. This has had an impact of 0.6% on our business. Our business was also penalized by a decline in the automotive sector, worth 10% of our turnover. Telecommunications and banking have also gone down. Aeronautics remain stable in France and the defense and railway sectors have remained quite dynamic. In Iberia, the business in the second semester declined because of the automobile sector. In Spain, it was quite significant in the second trimester, whereas other sectors are growing. Overall, this area still grows by 4.8%. In Italy, our business is going up by 2.1%. All of the actors are growing. In Germany, the decline is stabilizing at around 18-19%. The automobile sector is still heavily impacted. Same situation as at the end of the first semester, - 25%, - 14% among manufacturers and the rest among OEM. Aeronautics - 7%, d efense is up 50%, but it only represents half of our business locally. B usiness is slowly stabilizing in Germany. I n the U.K., the decline continues in Q2 and it's reached 12% during the first semester. A decline in business stabilizes in the public sector, b oth automobile and aeronautics have seen their decline getting steeper. In the Benelux region, the activity was at 12% accumulated data at the end of June. The tertiary sector is the most impacted in Belgium, whereas life sciences is now growing again. In the Netherlands, the semiconductors business is now growing again, whereas the energy and tertiary sectors have declined slightly, are still slightly declining. In Eastern Europe, business is slowing down, was slowing down, but is now stabilizing in the first semester. Poland represents two thirds of the turnover. They have a 7% growth. Romania is declining by 11% because of the automobile sector. In Scandinavia, the business stabilizes at - 22% because of the trucks business in Finland and Sweden. In North America, our business has gone down by 6.5%. In the U.S., the life science business is impacted by the decrease in subsidies in the sector. This has generated a significant decline in business in the second semester, it's linked to the context. The automobile sector has also gone down quite significantly, -10%, and tertiary has gone down slightly, -8%. In Canada, our business has gone up by 6% and we have reduced second semester. In China, our business is growing again by 3.5%. All sectors are growing except for the telecommunications one. India, on the other hand, is declining because of the tertiary sector and industrial sectors. Japan has grown by 15% thanks to automobile and the tertiary sectors. As for Korea, we've lost an important client in the automobile sectors. Unfortunately, it is very hard to hear what Mr. Benoliel is saying. Per business sector, as usual, no change compared to the end of April. Similar comments. The automobile sector represents 15% of our turnover and our business is declining by 15%, 11% among manufacturers, which represent about 1% of our turnover, and 28% among OEMs. Railway is stable. Aeronautics and space have slightly slowed down during the second semester because of a slowing down of business, Airbus operations, and in the space sector as well, the semester decline is of 5% for the aerospace sector. Defense activities are going up by 10%, but the pace has already slowed down because of a basis effect. Energy has gone up by 3.1%, thanks to nuclear, oil, and gas. The sector of energy equipment has also increased. Life sciences have declined by 5.7%. Medical equipment sector, which represents 20% of the life science sector, have declined by 20%. The pharmaceutical sector is also slightly declining in spite of the U.S. situation. The sector of industrial equipment is declining by 5% and it has declined by 9% for other industries. Whereas the electronics and semiconductors business was slowing down last year, it is now stable again. The accumulations continue to decline by 7%, and it is increasing by 10% among equipment manufacturers. As for finance, for the finance sectors, which represent 8% of our turnover, it is now only declining by 2.5%. The performance depends on clients rather than geographical areas, except for France, where most accounts are still declining. Lastly, the retail, services, and media sector as well as the public sectors are going down by 8%, mostly because of the significant decrease of budgets in the public sector in most European countries. As for M&A, no acquisition was finalized during the first semester, but there are several projects that are about to happen. I think that in the October call we will be able to announce several acquisitions. The carve out of Worldg rid will finish at the end of October, and the last businesses will be transferred during the third quarter. Our 2025 outlook for 25 remained quite gloomy, and we lack visibility. As we mentioned in the April conference, the trend was not bucked following that call. Both in terms of geographical areas and business sectors, the situation hasn't changed. Even if the stabilization might happen, we will see at the end of the third quarter. Visibility is still quite low for the second semester. As I was saying, we consider that the economic situation has not changed. If it doesn't change, ALTEN should have an organic decline between -5.2% and -5.5%. This is slightly better than what we had in mind at the beginning of the year. Then we thought it would be more towards 6% decline. Outlooks remain quite gloomy and no change so far, no tangible sign that might make us believe that our business would again at the second semester. We have more encouraging messages from our clients for 2026, but we remain very cautious because we had the same messages last year. Nothing really ended up becoming a real project. This decline in business and the fact that there's one less business day today in this semester, and it will be the same next semester, means that our operational margin of the group is impacted. We have a strong seasonality this year with a four business day difference between H1 and H2. If the economic environment doesn't change, we consider that our operational margin should be at around 8% or 8.1% for the whole year. The forecast will be estimated during the publication of the business during the third quarter, as we do all year. Because of the seasonality and because last year, and the same as last year, there will be a difference in the operational profitability between H1 and H2. That's it. I'm going to give the floor to our participants. If you don't mind opening the floor. We have a question by Laurent Daure. You can take the floor. [Translator]: Can you hear me, Bruno? Yes, very well. Thank you. [Translator]: Good evening. I have three questions. First point, if you can give us a little update on aeronautics, because we had resisted better last year compared to other service companies. The outlook is slightly better for Airbus. What is your point of view on the rest of the fiscal year and the messages that that client has sent to you? Second point, on automobile, compared to previous years, you consider that your business level is the same. What is your potential extra downside on the sector? Is there still a lot that we might lose in terms of turnover? Lastly, on the yearly margins, can you give us the main blocks that make you lose operational margins? [Translator]: Regarding aeronautics, France is resisting better than Germany. Investment in the aeronautics sector has gone down significantly. Today, they are diminishing compared to last year, both for design and project management. Many projects have stopped in the hydrogen sector, I think it's been made public. In the manufacturing and engineering sector, because of the program started by Airbus internally to redefine its internal processes for production, there are several projects that were changed or downsized with smaller teams. As for data and IT, we are present, but to a lesser extent, and the business level has gone down as well. Overall budgets decrease slightly. Outlooks remain quite positive for next year. This is the message that they sent us. We'll see if this means that we'll have more projects with them. Usually they start their studies, but I think it's too early for 2026 and they want to replace the A320. In 2026, they announced that they would start this project. There are projects that are delayed in time, so we are not concerned for the aeronautics sector. There's no structural problem in that sector. There's a bit of a lull in business. It is temporary, but we are still expecting business to restart in 2026. We don't know exactly when, w e will see what happens in reality. As for the automobile sector, it's a very different topic indeed. That environment is currently in a lot of turmoil and they are trying to define their own strategy. Each manufacturer is trying to define their own strategy in a context where political decisions have a strong impact. They decided to redirect all technologies towards electric cars. This means that they need to redefine their products, they need to make industrial investments, and on our capacity to deliver products at an affordable price without knowing exactly what investments are necessary to be at the right level. There is fierce Chinese competition and there will be fierce Chinese competition. This is a market which in a way is completely disrupted by public authorities. They're putting all of the sector's actors to adapt. We have to adapt as best as we can. We have to make choices and our clients are making investment choices. They are investing in technologies that are not completely well known yet. They're investing in batteries in Europe and a lot of these investments were in the end delayed or postponed or stopped altogether. Now engaging in JVs or in subcontracting contracts with Chinese OEMs, t hey're trying to find a path to still be present in 2035. It is very difficult to answer this question. Indeed, in a context of a normal economic crisis, we know more or less what to expect and we know when to expect a bounce back in activity. Here it's impossible to say what the investment budgets will be at our clients in the years to come. I think that today companies are waiting to see what is the best strategy to implement. What we see also, one of the answers to this crisis is that people turn to offshore subcontractors. The French as well as the German OEMs who were reluctant to doing that are now turning to offshore suppliers. They might represent between 70% and 90% of the people who take part in the call for tenders. There's a real change in the sector. The sector is evolving. You still have what's the business that has upheld. All of the automobile teams are surviving design, engineering. Of course, we have a lot less projects for hybrid and combustion engines and more projects for electric engines, less for batteries because the battery business has reduced significantly. A lot of projects for the onboard softwares, n ot all projects have disappeared. These manufacturers survive, but their investments have declined significantly. They're just restructuring their costs. This is a very important point. Today, manufacturers, I'm not even talking about OEMs because their strategic situation is even worse. There's a huge decline for parts manufacturer, for some German parts manufacturer, for Stellantis or German manufacturers or even in northern Europe. The offshore number of applicants for both genders is very significant. Overall margin, w e have 1.5 less business days this year compared to last year. This means that we're going to have, we're going to lose 0.5 in operational margin overall. The rest of this margin loss comes from the absolute value. The decrease is not as significant as the business decrease. [Translator]: It is very hard to make out what Mr. Benoliel is saying. As you were saying, we have one to two points of margin difference. Yes, 1.5 at least. Yes. Okay, thank you very much. Thank you, Mr. Daure. Any other questions? Derric Marcon. [Translator]: Hi, Bruno, I hope you can hear me? [Translator]: Yes, Derric Marcon. I hear you loud and clear. [Translator]: I have two questions. The first one, could you talk about the outlook for organic growth over the year. You said it should be around - 5% or something versus this - 6% which you had in mind in April. What is the difference here? Where does it come from? Second question, in the guidance of - 5% and something, do you factor in the first signs of stabilization? Because in your comment, in your introduction and also in your conclusion, you said that the negative growth was slowing down and that you could foresee some stabilization in the coming months. Is this reflected in the - 5% and something that you're projecting for 2025? [Translator]: Of course it's factored in. We have taken into account the embedded negative growth for the first half of the year and we've also included it in the second part. Now it's not necessarily, it looks like the performance is improving, but because we have basis effect that is positive. We're including an additional negative growth for Q3 and Q4 because all the countries have their own hypothesis. The general feeling is that we should reach the bottom, rock bottom. If we see it in the fig ures, and we're asking questions to people in the field and we feel like it's going to, we're going to hit rock bottom at one point, it's going to stop at one point. We have in our scenario, the hypothesis of a slowdown of this negative growth but no stabilization. Stabilization should arrive around 2026, not before the end of 2025. Yes, absolutely. Okay, and what's the difference between - 5.1 or - 6? What is the difference? It's the result of the bottom-up aggregation and the different hypothesis that we have in the different countries. It's not just one specific BU or one specific sector. In Germany, for instance, we have scenarios with higher, stronger negative growth than other countries. There are other countries where we believe that the negative growth won't be significant given the trend because this negative growth tends to slow down a little bit. We still have this negative growth forecast. It's slightly better than what we initially thought, but initially we said it would be - 6. The rate, the rhythm, the pace of negative growth should slow down a little bit in the second part of the year. I think we were quite realistic in our forecast. Difference for Q2, which difference you were talking about? - 6 or -8? For the first part of the year, it was - 6.5 for Q2. Now it's less. Yes, because Germany, Scandinavia, France, which had a major negative growth for Q1, especially in the automotive sector, the negative growth is actually not as bad as we initially thought. Great. Thank you. Thank you very much. Are there any questions? We have a question in the chat. Inès Semaoui from BNP. [Translator]: Does the seasonality of the operating margin H2 higher than H1 still hold true if organic revenue growth declines in the second part of the year? [Translator]: Of course. The growth curve or negative growth doesn't have an impact on the margin. Can't offset the seasonality effect, which is considerable because we have a few different, we have four opening days difference, which is huge. It accounts for about 2%- 3% or 3% additional business for us between the first and the second semester. This has a sensitive impact on margin, a sensible impact, 1.5% between the two semesters. I don't see any other hand raised. Do we have any other questions? We actually have another question in the written Q& A. Some IT vendors, particularly Indian competitors, have cited a wave of vendor consolidation which has benefited certain companies, including in the automotive industry. Does this affect your sector of activity and more specifically the automotive industry? I don't know what you're talking about. When you talk about a wave of vendor consolidation, what does this refer to? What's certain, however, is that as of today in our referencing, we have clients in the automotive sector that are trying t o. Have larger projects. This means that if a player has a lot of, if a company has a lot of knowledge in mechanical design, software, automotive, if we have a large array of skills for engines, etc. Then it will clearly give a competitive advantage to people who already have a large market share because they're already present at different places. ALTEN is one of these companies. We're very well positioned in the automotive sector, therefore being well referenced in the U.S. in Europe, most automotive manufacturers are still working with us, which is why in a sector that's really down, it allows us to maintain our position. Very well. We don't have any other hand raised. If you have questions, feel free to take the floor. If we don't have any more questions. Oh, we do have a question again. Could you give us an update on Worldg rid, please? Question from, [audio distortion] I already updated you. The company has joined the group, so the operational elements, at least now it's fully integrated into the ALTEN team. As you probably know, the R2 financing should be unlocked by the end of the year. The revenue of Worldg rid 2025 should be a little bit higher than 2024. Now we have to integrate the support functions. The company is still managed by Atos. We are going to try to use the skills and the knowledge of Worldg rid and the strong positioning of ALTEN in the energy sector to continue to grow our activities. Not necessarily nuclear activity especially because the nuclear power plants are very dependent on the load plan of EDF but we're going to leverage the skills of Worldg rid because they have their own specific positioning and that's what I can say. This is the update on Worldg rid. We don't have any other hand raised and no written question. In this case I'd like to thank each and every one of you for partaking in this first semester review. Next time we talk to each other it will be September 25th because that's when we will publish the results of the group. In the meantime, I wish you a nice holiday and I will see you in September. Thank you. Have a nice evening.