Earnings Transcript for CAP.PA - Q2 Fiscal Year 2024

Aiman Ezzat : Good morning and thank you all for joining us for the H1 2024 Results Call. And today, I'll be joined by our CFO, Nive Bhagat; and our COO, Olivier Sevillia. So as anticipated, the demand environment began to show some signs of improvement in Q2, most notably in North America. Globally, clients continued to prioritize efficiency through cost transformation programs. And the demand for this discretionary deals remained relatively tame. Revenues in H1 stand at €11.138 billion, so down 2.6% at constant exchange rate. And as previously stated, Q1 proved to be the trough. And revenue growth rate improved in Q2, coming at minus 1.9% at constant exchange rate versus minus 3.3% in Q1. Bookings totaled €11.793 billion in H1, leading to a book-to-bill ratio of 1.06 for the period. The booking trend also improved in Q2. The book-to-bill in Q2 2 was 1.09, which is above historical average and reflect that there is still ongoing robust commercial momentum. The H1 operating margin is stable at 12.4% year-on-year. And the continued shift in the -- Capgemini's mix of offering towards more innovative and value-added services is leading to an increase of our gross margin, illustrating the strength of our positioning. Organic free cash flow generation also improved. It amounted to €163 million in H1, up €216 million year-on-year. And finally, the normalized EPS is up by 1% year-on-year to €5.88. So overall in an environment that remained soft throughout the half year, as anticipated, the group demonstrated the resilience of its operating performance. Now looking at Q2. Our growth is trending in the right direction in almost all businesses, sectors and regions. Just looking a bit in more detail

Olivier Sevillia : Thank you, Aiman. And good morning, everyone. Looking now at our revenues by sector at constant currency. Revenue growth rates, as Aiman said, improved in almost all our sectors in Q2 compared to Q1. Aiman already commented on Financial Services and Manufacturing. I will expand a bit on the other sectors. The Public Sector proved rough dynamics in Q2, accelerating a bit on Q1. The tech and telco sector improved the most during the past quarter, although remaining still negative, a big improvement sequentially. Consumer Goods & Retail is slightly improving, not yet back to positive territory, though]. And lastly, revenue growth in the Energy and Utilities sector remained in the positive territory. Moving on to the bookings evolution. So Q2 bookings are stable year-over-year. The book-to-bill ratio reached 1.09 in Q2, which is above our historical average for a second quarter and in particular above last year Q2. A few comments on our sales pipeline evolution and composition

Nivedita Bhagat : Thank you, Olivier. And good morning, everyone. I am pleased to share with you our H1 2024 performance. As mentioned by Aiman, Capgemini demonstrated its resilience in a macro environment which remained soft. Group revenues reached €11,138 million in H1 2024, down, minus 2.5% on a reported basis and minus 2.6% at constant currency. Operating margin amounted to €1,384 million or 12.4% of revenues, a stable percentage year-on-year. After other operating expenses, financial and tax expenses, which I will further comment in a moment, the net profit group share reached €835 million, up 3% year-on-year. Normalized EPS reached €5.88, up 1% year-on-year. Finally, we generated an organic free cash flow of €163 million, up €216 million year-on-year. Moving on to our quarterly revenue growth. As mentioned by Aiman, we have passed the trough in Q1. And revenue growth rates improved in Q2 as expected in all businesses and almost all regions and sectors. On an organic basis, decline in Q2 revenues was limited to minus 2.3% compared with minus 3.6% in Q1. This brings our H1 organic growth to minus 3%. Taking into account the group scope impact, the growth at constant currency is minus 1.9% in Q2 compared with minus 3.3% in Q1, leading to minus 2.6% for H1 overall. FX became a tailwind in Q2 with a 40 basis point positive impact, leading to a 10 basis point positive impact in H1. As a result, reported growth is minus 1.5% in Q2 and minus 2.5% in H1. At this point, we expect FX to have a neutral impact for the full year 2024. Moving on to revenues by region. After several quarters of continued deceleration, the trajectory of our growth rates evolved favorably in all 5 regions. As anticipated, North America is the region where growth rates improved the most in Q2, whereas in other regions growth either slightly improved or stabilized. Turning now to H1 revenues at constant currency. Revenues in North America region decreased by minus 5.4% year-on-year. While the TMT sector improved visibly in Q2, the Financial Services and consumer and retail sectors remained a drag, only partly offset by growth in the Manufacturing sector. Revenues in the United Kingdom and Ireland region declined by minus 2.8%, mostly driven by the Financial Services and Consumer Goods & Retail sectors in spite of solid growth in the Energy and Utilities and Services sectors. Activity in France was down, minus 2.7%. Solid momentum in the Public Sector was more than offset by visible softness in the TMT, Manufacturing and Financial Services sectors. Revenues in the Rest of Europe region were virtually stable at minus 0.1%, with the strong momentum in the Energy and Utilities and Public Sectors offset by a visible contraction of the TMT sector. Finally, revenues in the Asia Pacific and Latin America region were down, minus 1.6%, mainly driven by the decline of the Financial Services sector, partly offset by growth of the Consumer Goods & Retail and Public Sectors. Moving on to our revenues by business. All businesses experienced an improvement of their revenue trends in Q2 when compared to rates reported in Q1. The 3.7% growth in our management consulting business that is Strategy & Transformation stands out; and illustrates clients' demand for strategic consulting in their transition towards a more sustainable and digital model, further supplemented by their growing interest in exploring gen AI opportunities. Across H1 overall at constant currency, total revenues of Strategy & Transformation services are up 2.7% year-on-year. Total revenues of Applications & Technology services, which are Capgemini's core business, declined by minus 3.4%. Lastly, Operations & Engineering total revenues decreased by minus 1.8%. Moving on to the head count evolution. Total head count stands at 336,900 employees at the end of June, down by 4% year-on-year but stable since the end of March 2024. The offshore leverage stands at 57%, stable since the end of 2023. Lastly, attrition decelerated further over the past quarter. This brings our last 12-month attrition rate to 15.2%. Moving on to our operating margin by region. As is often the case with half yearly publications, we experienced more fluctuations in regional margin evolution than what we typically do on a full year basis, so please keep in mind that H1 regional margin evolution does not necessarily provide a full representation of what the full year evolution will be. Operating margin in North America stands at 15.5%, up 30 basis points year-on-year. U.K. and Ireland operating margin amounts to 20.5% compared with 18.4% in H1 last year. Conversely, operating margin in France is down to 9.1% from 11.1% in H1 2023. The Rest of Europe operating margin is up to 11.1%, up by 60 basis points year-on-year. Finally, operating margin in Latin America and Asia Pacific is 10.5%, slightly up from 10.2% in H1 last year. Moving on to the analysis of our operating margin. Overall, the continued shift in Capgemini's mix of offerings towards more innovative and value-added services more than compensated for the inflation impact in H1 2024. This illustrates the resilience of the group's operating model in a soft demand environment. The 50 basis points increase in gross margins, coupled with a nearly stable G&A expense, has offset the investment in selling expenses to fuel future growth. Moving on to the next slide. Our net financial result for H1 2024 is an income of €20 million, as opposed to an expense of €22 million in H1 last year. The swing was primarily driven by higher interest income on our cash assets, while our bond debt is entirely at fixed rates. The income tax expense increased by €13 million year-on-year to €326 million. Our effective tax rate is almost stable at 28% compared with 27.8% in H1 last year. Let's turn now to the recap of our P&L from an operating margin to net income. The other operating income and expenses are down €25 million year-on-year at €237 million, mainly driven by lower restructuring and integration costs over the period. Our operating profit is €1,147 million or 10.3% of revenues, up by 20 basis points year-on-year. After financial and tax expenses, minority interest and equity affiliates, the group share in net profit amounts to €835 million, up 3% on H1 2023. Consequently, the basic EPS is up 4% to €4.88, while our normalized EPS reaches €5.88, up 1% year-on-year. Finally, let's have a look at the evolution of our organic free cash flow and net debt. As you know, our cash generation pattern is highly skewed to the second half of the year. We generated an organic free cash flow of €163 million in H1. Therefore, we confirm our target of around €1.9 billion for FY 2024, which notably takes into account an increase of our cash tax rate. A few final words on capital allocation. The bolt-on acquisitions closed in H1 translated into a limited net cash outflow. In this context, we increased our returns to shareholders, which reached €905 million in H1 2024. This comprises €580 million corresponding to the 2023 dividend and €325 million net for share buybacks. Consequently, our net debt stands at €2.8 billion at the end of H1. This compares with €3.2 billion at the end of H1 last year and €2 billion at the end of 2023. On this note, I hand back to Aiman for the Q&A session.

Aiman Ezzat : Well, thank you, Nive. So let's now open the Q&A and allow, of course, to -- allow a maximum number of people in the queue to ask question. [Operator Instructions] Operator, could you please share the instructions?

Operator: [Operator Instructions]

Aiman Ezzat : Do we have the first question?

Operator: Yes. We will now take the first question from the line of Balajee Tirupati from Citi.

Balajee Tirupati : Two questions from my side, if I may. Firstly, if you could share more color on the deterioration of the outlook in the automotive and aerospace sector. At this stage, do you see it as a sustained deterioration through second half? Or more of knee-jerk reaction to uncertainty, increased uncertainty, on account of multiple elections in Europe and upcoming elections in the U.S. And second question, on free cash flow side

Aiman Ezzat : Thank you, Balajee. So first, on the automotive and aero, again look at the picture. On the aerospace sector, of course, the perspectives, the mid- to long-term perspective, are extremely good. As you have seen, there are some challenges coming from the supply chain, basically, which has slowed down the industry in terms of delivery and growth. And as a consequence, they are basically reserving cash and preserving costs, so for me, it's an adjustment in the short term. It doesn't change the fact that we are on the booming industry that will basically sustain growth, very strong growth actually, in the midterm, so for me it's an adjustment of supply chain that needs to happen to be able to reaccelerate growth, but in the short term, it does have an impact in terms of slowing down demand. The automotive sector, I think it's mixed. I think the -- it's mainly on the European side. The perspective are less good in the short term. We have seen a slowdown in the EV, which is also slow down a bit some of the investment in the short term in EV, but again it does not change the fundamentals of where things are going. So reality, yes, we are -- we have -- I don't know if you can call that knee-jerk reaction. We do have basically some reaction in the short term which are, I have to be honest, quite abrupt, from what we have seen in the last 2 or 3 weeks, that basically take us to become -- to take more caution and basically take into account what clients are telling us in the short term, at least for this year. Free cash flow, Nive?

Nivedita Bhagat : Yes. So Balajee, our H1 cash tax rate is never representative, as you're aware, of the full year. And as I've mentioned earlier, our cash tax rate in 2024 was always meant to be higher than it was going to be in 2023. Now coming back again to your point on free cash flow generally, I think there are 2 things to mention here

Operator: We will now take the next question from the line of Mohammed Moawalla from Goldman Sachs.

Mohammed Moawalla : Firstly, just in terms of the sort of shift in the outlook, I'm just curious to understand as you think about seasonality in the second half, particularly sort of Q2 to Q3. Could this still be similar to kind of prior years? And as we think about the exit rate being much lower in Q4, how does that sort of shape sort of 2025 in your view? Should we see a more pronounced recovery? Or simply the visibility is not there yet to kind of pass judgment on that. And then secondly, as we look at sort of you're obviously preserving the margins quite well, how does sort of this sort of change in kind of the revenue outlook and the fact that obviously on the head count you're still not sort of growing yet play into the shape of the margin for next year? And do you still feel comfortable around the kind of 14% guidance you gave as a mid-term target?

Aiman Ezzat : Okay, thank you, Mo. So on the -- on your question. First, on the growth rate, as I said, the recovery is there. So we see things improving, but of course, we are not -- we could not anticipate some of the abrupt changes we have seen in the aerospace and auto sector and, of course, the slowdown -- the slower recovery. Because there is still recovery, and we still expect positive news by Q4, in Financial Services; just the slope is lower than what we have expected. And as I did mention, in fact, we have taken a cautious view on France, okay, in our outlook because of the political environment and the implication -- we have seen some wait-and-see attitude in France and we have to be cautious about that, so that's basically what has driven the outlook we have for H2. We still, as I said, expect to be back to low single-digit growth by Q4 in terms of exit rate, which of course put us in a good trajectory going into 2025, but I think at this stage it will be a bit too early days on the variability of a number of elements in the environment to start talking about 2025 in more detail. On the -- also your question around the head counts and margin. First, the head counts for us are positive right now. So it has stabilized in the second quarter, but we have started to see some places where head counts have started to grow, notably in India. So we are positive on the fact that the recovery is there. And as such, the headcount growth will start to be there. We'll optimize as much as possible, of course, to continue to maintain our discipline around the margin and the operation, but we do expect head count growth to start to resume. And the first signs are really happening in India, so far. And there are some other countries as well where we start to see that, so I think I'm positive around that. On the margin, I see the possibility to do 14%. Of course, it will depend on the environment for next year, but right now, if you ask me, can we reach the 14% next year, my answer is yes. We still can reach the 14% next year. It can be challenging, but we still can reach 14% next year.

Operator: We will now take the next question from the line of Sven Merkt from Barclays.

Sven Merkt : Maybe firstly, can you comment just a bit more around how much visibility you have over the second half in terms of growth and perhaps which sectors would bring you to the high or low end of the guidance? And can you just confirm that I understood this right

Aiman Ezzat : Yes, I mean. So it's clear. I mean I did say we don't expect any discretionary spend to return this year, and we're not counting on it. And as you imagine, we have built some caution basically on that guidance, notably, because of the environment and some of the things that have changed. So from my perspective, between, listen, the low end and the high end, there is 1 point of growth for the full year, so 2 points in H2. It does factor basically variability that we still expect potentially in the environment, so we have derisked, of course, our guidance.

Operator: We will now take the next question from the line of Toby Ogg from JPMorgan.

Toby Ogg : Maybe just on North America, firstly. So that was the region that saw a bigger improvement in Q2 versus Q1. Did that improve quicker than you'd expected? And if so, what was the driver? And then just thinking about North America into the second half, what's the assumption for how that should evolve, particularly given the presence of U.S. elections and any impact that might have on decision-making? And then just second question, on the guidance for '24. Could you help us with the sort of core kind of macro assumption -- demand assumptions built into the low end of that? And should we be thinking of -- would it be fair to think that, at the low end, the assumption around discretionary is that it would deteriorate?

Aiman Ezzat : Yes. So let's start with North America. We see definitely a positive trend around North America. And I think it will continue -- we will continue to see improvements in Q3 and Q4. Nive did say that one of the element affecting North America is going to be the recovery of Financial Services, which is a bit slower than what we expected, so it will be a bit slower than what we could have anticipated in February, notably, but we definitely see North America back to positive territory by the end of the year, so the perspective are good. You saw that -- the economic growth. The GDP announcement last year was positive, so we'll continue to see a recovery and we count on it for the rest of the year. On the guidance, the core macro. Again, when you revise your guidance, you're going to be cautious, so we are cautious on Europe. We have been -- we are cautious on some of the manufacturing segment. Again I have to precise that, yes, auto and aero are not doing great, but the rest of the Manufacturing is actually growing, so -- but it's really an inversion. The auto and aero is an inversion compared to what we expected. I mean we expected to be in full growth in aero for the full year. We see now a contraction in H2, and that’s a significant shift that we have to take into account. And whenever you see something like that, clients start to abruptly change. You have to be cautioned in it, so I do not expect a better macro. I – we don’t see – like you say on North America, we don’t see a negative impact from the election. I think whatever variability has built in our customers’ budgets and forecasts and so on that we’ll see today is not going to fundamentally changed, unless something very abrupt happens, of course, so overall, we are confident on the guidance, that it has factored basically the – really what could happen overall, including, as I said, in France. Discretionary spend. I don’t see deterioration. I mean, to be frank, discretionary spend is at a quite low level historically. I am not sure there is much more to cut unless you want to really start basically impacting negatively customer operation. I think the – discretionary spend drops below what it is, I would consider our customers’ operations start to be at risk in terms of basically running. So I do not see deterioration in discretionary spend, but again we’re not counting on any improvements. So any improvement would be – how do you say, would be a positive surprise.

Operator: We will now take the next question from the line of Michael Briest from UBS.

Michael Briest : In terms of the -- a point of sort of clarification, I guess. I mean, when you talk about an exit rate, are you talking about a Q4 average or December's rate? Because if I put in, say...

Aiman Ezzat : Q4, Q4. I clarify. Q4, Michael.

Michael Briest : But I mean the low end would suggest Q3 then is perhaps weaker than Q2. Is that intentional? Or is that just a very conservative outlook?

Aiman Ezzat : Well, I mean Q3 will improve, but we are cautious around the level of improvement in Q3.

Michael Briest : Okay. And then just a question on margin. And obviously you've revised the range for revenues. We're halfway through the year. Do you have a feeling on whether you'll be more likely at the bottom or high end of the 2024 margin? And I appreciate the cut to guidance probably means that the bonus pool for the workforce is lower this year than budget. How much of a headwind might that create to the recovery next year given the earlier question about 14% margins?

Aiman Ezzat : I think we're digging a little bit too much, yes. I mean, first, the bonus pool evolves with the performance for the year, so I mean every year is the same. So -- if, next year, we have better operating leverage as well, so the bonus pool will improve, but for me it's not a headwind. It's built as part of the economic model, so for -- you shouldn't consider it being as a headwind. Giving people better bonus when the operation is better is not a headwind for me actually. I'd like the operations to be better to give them better bonus, so it is this is the economic model whenever we look at it. On the lower and higher end of the margin, Nive, you want to...

Nivedita Bhagat : So I think, as far as '24 is concerned, we expect that, of course, we will be well within the guidance of 13.3% to 13.6% that we've given. And Michael, as you're aware, there are a number of levers that we work through. So you've seen -- H1, you've seen that, in a softer environment, we've still improved our gross margin by 50 bps. And the continued progression we make is based on our revenue mix, as you're aware. And we will continue to focus on various other levers, be it our continued focus on utilization, our G&A, our various other expenses, our pyramid, our offshore, et cetera. So I think all the levers that we have at hand is something that we continue to focus as we go into the rest of '24 and beyond.

Michael Briest : But to do the high end of the margin would require a very strong H2 margin because your margins are flat in H1. Is that still possible?

Aiman Ezzat : Well, yes, it's possible. If not, we're not keeping the guidance. Of course, we have a range, so we stick to our range, but again the environment -- I'll take an example. If there is softening of environment in France more than what we expect, it put pressure on the margins. So that's why we have to keep basically a range. We know there is lower labor flexibility. The softening of the market in France basically put a bit of pressure on the margins. So we have to keep that range at this stage because we need it in terms of flexibility, depending of where the environment shifts.

Operator: We will now take the next question from the line of Laurent Daure from Kepler Cheuvreux.

Laurent Daure : My 2 questions are about the profitability of the group. First one is you have new highs on gross margin. So 26.7%. When you look at 2, 3 years from now on this margin level, how much of an further improvement can you do by pushing the mix further up? And my second question is on France, a 200 bps contraction, which is maybe 50 bps at a group level. Is it reflecting just a drop in demand that had deteriorated the utilization rate and hence easy to fix? Or is there something more structural that took place in the first half in France?

Nivedita Bhagat : Laurent, let me answer the France question, first, and then we can do the other one. So as far as France is concerned, yes, the deceleration that we had and the lower sort of activity has caused some pressure on the margin, but in H1 particularly, we've also had some one-off, which we do not expect will be repeated as far as H2 is concerned, but again as I've mentioned, as is often the case with -- of course, with half yearly publications, we do sometimes experience more fluctuations in regional margin evolution than we would typically do on a full year basis. And I refer only to regions when I specifically say that. So in this particular case, it's one-off -- a set of one-offs and, of course, the deceleration that you see particularly. On the second part of the question, in terms of the improvement. Our fundamental lever to improve our margin is based on revenue mix. And that is a focus that we will continue to do, so my expectation is -- as we move and as we continue to provide more value-added offerings to our clients and more value-added work, the expectation is the gross margin will continue to improve.

Aiman Ezzat : Yes. And keep in mind, for example, you see here we have to beef up our sales because, of course, as the market is slow, we have to put more efforts on sales. You've seen our sales costs are going up, which is an investment, of course, we are doing. And remember as well that we continue to maintain our investment in innovation and new offerings, et cetera because we do believe, again, that basically that's what fuels our growth and our margin in the medium to long term. So we will continue, even in this kind of environment, to maintain -- sustain our strategic investment while, of course, maintaining the discipline of the margin improvement that we expect to achieve.

Operator: We will now take the next question from the line of Frederic Boulan from Bank of America.

Frederic Boulan : When we look at the challenges right now, to what degree is pricing a factor? Is there any pressure on pricing and then some competitors trying to discount to win more business? Or it's more structural and demand from some of your large customers that's driving that. And then secondly, on the follow-up, I mean, interesting recovery in strategy and technology. Any specific factors that are driving that? Any specific type of project that resonate? And to what degree is a higher kind of contributor of that?

Aiman Ezzat : Listen. I mean again, when you know that the market is slow, there is challenges. Of course, there is some price pressure. I mean you cannot say the market slowed down. So there has been price pressure now for a few quarters. There is nothing new, again nothing irrational. And to be honest

Operator: We will now take the next question from the line of Nooshin Nejati from Deutsche Bank.

Nooshin Nejati : So 2 for me as well. Again on the margin, and I'm sorry if we're pushing on this, but given the higher demand for consultancy, I mean Strategy & Transformation, on the back of exploring gen AI, I'm wondering if you see some sort of a headwind for your margins here just because the business mix somehow would shift. And then on the head count

Aiman Ezzat : Thank you. It's good questions. So I mean the Strategy & Transformation is positive on the mix. It's a quite profitable business, so it is not a business that runs at low margin. And it also help position us for better value, so typically when we are positioning with a client on Strategy & Transformation, it's actually positioned on much more value-driven type of deals, more outcome-based. And that tend to position us actually for a better pricing environment as we start deploying technology, so for us it's actually a lead indicator of better business than basically competing on pure-tech deployment which basically in a certain way is much more competitive. On the head count. As I said, we start to see growth in India. And the demand has increased, so we are accelerating our recruitment in India. We start to -- seeing some countries as well where we start to see that. We are still cautious in some areas, as you might imagine, in terms of head count growth, notably in Europe, but overall I do expect head count growth to start resume as growth start to resume as well and the environment improves. The attrition rate, for the moment, is stable. I've seen for the 12 months it's still coming down, which mean the attrition rate in the quarter is pretty low; is -- frankly, is really even below sometime our operating environment, so if it increases a little bit, I think for us it's not necessarily a bad sign. So overall, I think the environment will remain good because the market is plentiful of resources right now. And even if there's acceleration in the next 2, 3, 4 quarters, we do not expect a significant impact of -- on attrition rates.

Operator: We will now take the last question from the line of Nicolas David from ODDO BHF.

Nicolas David : Yes. I have 2 actually. The first one is reading your comment in the U.S., in the banking sector in the U.S., where the recovery is slower than expected. It's kind of a -- it's a bit different than from the very bullish comments we've seen from some of your big peers, notably the Indians. Could you help us understand why it's a bit different for you there? Is it because you didn't sign some very, very large deals where the main purpose is to bring cost efficiency for the client? And you're more on the discretionary side and the digital side. And also, on mega deals overall and -- what do you see in the market? And have you been chasing some of those deals? Or -- and what has been your win ratio on these kind of mega deals overall? And do you have some nice ramp-up going in the next quarter? And the second question is more for Nive. How sustainable is the positive financial results you saw in H1? Should we expect that in H2 as well and for the next years?

Aiman Ezzat : Okay. So let me talk about the first thing. FS is a particular sector because it's sector of large clients, okay? So the mix of clients is important. And sometimes you're on the positive side because you have clients that are ramping up faster. Sometimes you are on the other side with clients which ramp up slower, so typically you can see differences in the same regions. And you have seen that in the past where, for example, we were seeing positive in the U.K., while some of our competitor were seeing negative; and vice versa. The mix of clients plays a lot, so -- and we have a bit more unfavorable, currently, mix of clients in terms of the speed of ramp-up and recovery, but again we -- let's be clear. The recovery is there but at a slower pace because probably the mix of clients we have is ramping up somewhat slower than that. On the mega deals, I'll let Olivier answer around what we have in the pipeline and what we see.

Olivier Sevillia : Yes. So on the mega deals, it depends on what we mean with mega. Let's put it that way. Our pipe is all-time high. We could say that, that way. It's a good pipe with a good mix of deals we originated and deals which are coming from the market. The key challenge there is -- so the pipe is good. And we closed some of them in H1 that are starting to fuel H2 but will fuel even further next year, so it's really about time to conversion, which is a bit difficult to predict precisely, but I'm optimistic [indiscernible].

Aiman Ezzat : Okay. And Nive...

Olivier Sevillia : No impact on this year revenue, growth of the pipe of mega deals.

Nivedita Bhagat : Okay, I think your last question was on France particularly. So clearly the -- we are expecting that there will be some sort of re-acceleration. And if that re-acceleration should happen, that will of course improve the margin, driven by better utilization, but otherwise, the one-offs that I particularly told you about will not recur in H2.

Aiman Ezzat : And again, if you go beyond this year, Nicolas, I mean, the -- besides the current environment, where we are cautious, the mid-term perspective in France -- I mean French companies are doing well. They are globalizing. They are investing, so we don't have any concern around the French environment in the midterm, but yes, we have caution on H2 around France because of a bit of a wait-and-see attitude in the short term. Thank you all...

Nicolas David : Thank you for the details of France, but my -- actually my question was more on the financial results at group level you saw in H1 which was positive.

Aiman Ezzat : The financial results -- sorry. Can you...

Nicolas David : The €20 million positive financial results you saw in H1...

Aiman Ezzat : Financial result. Sorry. I thought you were talking about France. So the fact that we have positive financial results in H1...

Nicolas David : How sustainable is that?

Nivedita Bhagat : Well, we will continue to be able to sustain it because, as I said, we look at it right from...

Aiman Ezzat : Financial results, so like interest, et cetera, yes...

Nivedita Bhagat : You mean net financial -- okay, all right, okay. That's okay...

Nicolas David : Yes.

Nivedita Bhagat : Sorry. We took some time to understand the question. So just very clearly, yes, it's positive, as far as H1 is concerned. And H2, the expectation is overall we will be fine, but I think there will be some more expense that we will have, of course, from an H2 perspective because H1 is never necessarily a proxy of what happens from an H2 perspective. But overall from a FY perspective, we expect to be all right.

Aiman Ezzat : So she's not committing it's going to be positive for the full year. That's the answer.

Nicolas David : All right.

Nivedita Bhagat : Thank you very much. And sorry. We didn't hear the question right...

Aiman Ezzat : Thank you all. We look forward to interacting with you in the coming days and weeks.