Schneider Electric S.E.

Amit Bhalla - Investor Relations Emmanuel Babeau - Deputy CEO and CFO

Gael De Bray - Deutsche Bank Simon Toennessen - Berenberg Andreas Willi - JPMorgan Daniela Costa - Goldman Sachs Ben Uglow - Morgan Stanley Andre Kukhnin - Credit Suisse Alasdair Leslie - Societe

Hello and welcome to the Schneider Electric Third Quarter 2016 Revenues Meeting and Conference call. To share our results today, we have our deputy CEO and CFO Emmanuel Babeau.

Emmanuel, Take it away.

Thank you. Well a lot of people this morning arriving in the room to me where it looks like a concert stage.

And so the good news is, we’re going to sing but that’s going to later on today. So we're going to start with a casual conversation around our Q3 numbers and thank you very much for starting the day early with us.

So, of course you know lot of things will be said during the day and I’m not going to anticipate many, many systems of information that we’ll share with you in the course of the day, but really focusing on our Q3 numbers and the highlight for this Q3. The overall performance as you have seen is an organic growth of minus 1.7% which is in line with our expectation that we shared with you for the full year of an underlying organic growth about stable without the selectivity impact, which accounted for roughly one point of negative impacts in the quarter.

There was another impact playing in Q3, which was a working day impact with less working days in Q3 2016 than in 2015 and that's about 0.6% of growth. So without that we have been about flat during this quarter, I would say as expected.

Now looking a little bit in the detail by geography, first thing probably and maybe biggest event of the quarter is the fact that China is back to positive territory. So we've been growing in China in Q3 and that was actually the first time of growth after almost two years of decline seven quarters exactly, and I will elaborate a little bit more of course on what we've been seeing in China.

Globally, we’re seeing North America and Western Europe pretty good resilience, North America is flat, we’ve been a growing a little bit in the U.S. here again I will enter into more detail.

Western Europe, you will see is down 1% in fact retreated from the working days, we are flat in Western Europe and we've seen ups and downs during the quarter that I will detail. No doubt that the biggest impact that maybe when that’s going to be the only one during this quarter is Middle East with significant decrease.

Please remember that in Middle East, we also include Turkey, and we have faced a kind of perfect storm during this third quarter. On one side, we all have in mind, of course the events in Turkey which has meant then during almost one month the business was shut off.

The other of course big negative is everything we are seeing in countries exports to the price of energy and notably in Saudi Arabia and to a lesser extent in the Emirates. And Middle East has been so negative, I mean we talk about mid-20s in term of decline that is I think globally a big impact at the level of the group’s minus 1.3points.

If I want to be totally existed in term of country facing difficulty, I should probably add up Australia which also has been experiencing a significant double-digit decline over the quarter and that has been causing an extra minus 4.5 points of growth during the quarter. So that mean that outside Australia and Middle East, in fact we've been showing some growth and some significant growth in the rest of the country on an underlying basis.

New economy, of course very much impacted during the quarter by what has been happening in Middle East, but new economy keep growing, we have a lot of question very often what do we see on new economy which can a future duty we see for new economy and no doubt that it's important to see that new economy outside Middle East kept growing. Now entering by business, I'm going of course to detail and elaborate on that.

Building really continuing a solid growth outside Middle East and Australia with the business is global flat that really growing outside Middle and Australia still with our final distribution business doing well. Infrastructure slightly up before selectivity action, I have in front of me and we of course, give a lot of information on infrastructure on the course of the day.

And we come back on selectivity as much as you want. Industry performance I would say was according to expectation, so still negative, we are still being impacted by oil and gas and clearly having an impact notably on the process of commission business, but China for industry automation was that’s the growth in Q3 that good news.

And then IT, which was probably the unexpected negative number for the quarter, you would see that we are bit south of minus 3% organic growth. Frankly it does not reflect the trend in IT actually our order intake have been positive in the quarter for IT.

So yes indeed there was a few countries with the lower spending in IT, but they were also a number of facing issues that explain why we've been at around minus 3% for IT in the quarter. Then of course, service continues to be a big priority, another quarter of good growth, mid-single-growth for service during this quarter and on the selectivity of projects.

This has globally an impact of €60 million for the third quarter and €40 million for infrastructure, €20 million for the rest of the company. And based on this quarter, which is once again in line with our expectation, we are confirming and reaffirming our target for the year.

Before going into more detail and I of course ask you as always on our planet and society parameter which as you know is our commitment and sustainability, I certainly not - I don't pretend that I'm going to go through all the indicators here maybe the first two are interesting to facing from transportation, we target 10% through the company program. We've been moving from 6.8% to 8.5% through the quarter very good position.

And the other one is the way we design our product for sustainability and we've been making a step progress during the quarter getting to 46%. On the right hand top of this page of course all the recognition reward that we are receiving based on everything we do on sustainability one of them during the quarter have been funded for the first time we've been introduced in the group.

And maybe rewarding one the fortune has been classifying as the 24 out of 60 companies which are actually changing the world, it’s a great matter of pride for us. Right, so entering into a bit more detail now in the number, our sales amounted to €6.64 billion for the quarter, is down 8% to of course effect which are not organic.

The first one is a scope effect biggest impact is the big consolidation of Delixi. Some of you may ask the question what was the performance of the Delixi during the quarters, so Delixi has been growing organically 2% during the quarter, but it's no longer consolidated in the sale for the reason that we explain at the end of H1, other scope impact entering Juno and Telvent Transportation.

Forex impact minus 2%, the impact is easing and it has been lowered clearly in Q3 than what we've seen in the first two quarters. And now for the full year, we expect a negative impact for the top line to be around €800 million, you still have first the Chinese yuan and second the British pound are as the big, big negative driver for our Forex.

Now looking at the detail of the organic growth and please once again bear in mind the two impact here which is working day around minus 0.6 and the selectivity which is first and foremost applying to infrastructure for two third, but not only in the €60 I described. So building was stable minus 0.1%, industry was down minus 2.6%, infrastructure minus 3% would have been growing slightly without selectivity, and IT minus 3.1% once again I’m going to come back on that not reflecting the underlying trend that we see on this.

So I think with our building business still growing without the working day impact and still growing quite materially outside Middle East and Australia which have been the two negative and significant negative during the quarter. First maybe word on the scope impact minus 8.2% that is mainly the big consolidation of Delixi, but this is also the disposal of Juno Lighting.

Looking by region at the performance, in North America, we've continued to grow a good performance in the U.S. that’s of course still the construction market which is positively oriented and notably of course a residential market where we continue we think to gain market share and we have good progress.

Mexico was also up in the positive, in the negative in the U.S. when it comes to construction, we still see of course the negative pressure coming from the industrial building notably, which is somewhat offsetting the good trend that we see in the residential.

In Western Europe, contrasted picture, we've been growing in the U.K. and in Italy, but we've been declining in Germany and Spain.

I will elaborate later on what we see on Germany and Spain. And in France, we’re today; we see clearly some elements of improvement on the medium and long term in France.

Everybody is reporting an improvement in the construction market notably for residential, is probably less clear today for the commercial building. I think we see that coming up, but it's probably more a positive contribution for 2017 than for 2016.

Then Asia-Pacific was mix, as I said, China back to growth globally and certainly positive for the building business. It's always a good situation that we shared with you in the Tier 1 and Tier 2 city where we see a lot of investments.

Among the other good news in the Asia-Pac region I clearly have to mention, India which has been delivering a good quarter, and Australia has been clearly a difficult part, the economy is facing the impact of the low price on commodity globally, and we have seen some impact beyond the infrastructure and industry markets, which have been weak for a significantly out of time, now we see construction market weakening as well in Australia. Rest of the world, Middle East extremely bad, as I said, it's really across the business so that Middle East has been bad, so no exception with building and good news in Africa and in Russia, the CIS region where we've been pushing a nice growth.

Industry still impacted of course by oil and gas, and we see that the impact on oil and gas that we start to see becoming extremely severe in the Middle East is maybe going to ease hopefully in the coming quarters in other regions. So let's not see oil and gas as a kind of homogeneous impact everywhere with the same magnitude at the same time, but nevertheless in Q3 it was really still playing and playing negatively.

China, as I said good news back to positive, thanks to the OEM markets which has been shown stabilization and some renewed investment among certain of our customers. Western Europe was too flat, good resilience in the OEM market year again.

France was a bit negative, Germany was about flat and the good news was coming from Italy and Nordic during the quarter. The U.S.

still impacted, so a lot of people are saying well the oil and gas pressure should ease in the coming quarters, but we see in the U.S. still impacted by the low oil and gas investment and that still been taking it’s on sole on our performance in Q3.

And the good news certainly for that service is continue to grow so for industry like for the rest of the group service is an engine for growth. Infrastructure, we were expecting a significant decrease, of course based on selectivity around €40 million of negative impact during the quarter.

So this part decrease is not coming as a surprise. This scope impact here maybe one on scope is coming from Telvent Transportation.

And now if we go in detail through the regions, North America still down again U.S. industry impacted by weakness coming from the oil and gas investment and probably from the last still having an impact.

We see weakness in Canada, Canada has been really getting difficult with price of commodity going down and we see a number of projects coming to an end and therefore situation in Canada getting probably overall more difficult. Western Europe was up, so we see that after a difficult period of time, some investments are back in Western Europe and notably in the U.K.

and Nordic where we've been growing. France was up as well with some renewed investments among our customers in France.

Moving to Asia Pacific, China down on selectivity, because that's a place where selectivity is meaningful and otherwise, we can see that Australia has been also negative, again no surprise in the community were commodity are driving to a large economy, low price on commodity is driving lower investment. Then rest of the world was also negative, Middle East, sorry to come back on Middle East being negative and Russia was also negative.

When we look at Russia today, this is really the only remaining significant negative place, situation has been moving elsewhere. And Africa was growing and service where well oriented.

Now moving to IT, and we’ll have a long presentation this afternoon with you Dave on IT, so you’ll be able to answer to many questions. Organic minus 3.1%, the business was close to flat in H1 and I want to be very clear this minus 3.1% does not reflect the trends, the trend that see in the IT business.

So the reason for the minus 3% is that we have seen a number of region indeed with the lower spending, but there was also some strong impact, there was facing in project, there were some delivery issues that we have been facing that explain this minus 3% globally. Order intake where nicely positive in fact during the quarter.

And year-to-date we are slightly up in term of order intake. So I’m not saying that this is the fast growing business today, but once again minus 3% does not for extend [ph].

Going through maybe the region rapidly, rest of the World was big negative, Middle East no surprise was significantly, but Africa was negative as well. In U.S.

we were down, but I think we still do - keep doing a good job in the IT channel in the U.S. with good feedback from what's happening there.

We were facing basis of comparison in the U.S. actually that has been an impact.

Western Europe was gone as well decline in Germany and in the U.K. and we see France and Italy growing with some datacenters spending going.

Asia-Pac up full growth in India and Southeast Asia, India still good performance on Luminous, the news coming from Australia again, and Japan was also negative during the quarter. Good growth on service that's really one of the big strengths of our IT business in term of resilience, in term of margin, the service business posted another good quarter.

Going now into some detail by region, starting with best performance, North America which was flat, so as I said in the U.S. we up on the building business, a good thing happening even if there were some icons on IT and not only in the IT channel, it still much tougher with everything which is related to oil and gas and industry investment.

Mexico has done a good quarter and Canada is coming difficult and significantly difficult. Western Europe minus 1%, once again without the working day that would have been stable.

Going in detail, U.S., France which was a bit down with some strong and some steady issue, but I would say France is the wrong stability today. In term of negative markets where Germany and Spain, Germany and Spain were both facing some higher accounts in Q3 last year.

Starting maybe with Germany, year-to-date trend is still very much positive, so let’s not focus on one quarter, I think that the nine months trend is relevant there and we are growing Germany for the first nine months. Spain was down with a mix of icons and as we all know and see recently, there were some uncertainties on the political situations in Spain, which clearly put the break on the number of spending and investment having an impact on the business.

For the positive, we’ve seen Italy growing, I would say almost across the board. Within the U.K.

growing we have in the room Tanuja, Country President for U.K which means that the Brexit has not yet impacted the economy. We still believe that next year is going to be difficult, but what we’ve seen in Q3 is first of all a lot of project be implemented and project which have been launched keeps carrying on.

And probably people in France of uncertainty have been anticipating a number of things and notably interfering inflation, so that has been a triggering some business as well. So that’s probably is the reason why we haven't seen yet the Brexit, but we will see the level of uncertainty is increasing and it's very likely the 2017 is going to be tougher.

We also have seen good growth in the Nordic region with solid performance in delivering a number of projects over there. Asia-Pacific minus 1% actually outside Australia, we've been growing between 1% and 2% in Asia-Pacific.

So Australia has been really impacting the region. As I said, China back to growth that’s really building in that industry, let’s be clear its moderate growth, so I’m not saying that China is back to the moderate growth that was very good news from the quarter.

India in the region has been also very positive in the quarter. Middle East - sorry, Southeast Asia marginally positive with ups and down, you have countries such as Vietnam or Philippine doing very well, Indonesia is more difficult for instance and of course, Australia as I said already many, many time has been difficult.

And then rest of the world minus 6%, actually the rest of the world outside Middle East has been growing, so the big, big negative year is Middle East for the reason I explain. When we look at South America and talking about South America so far Brazil is negative, the rest of the region growing so that mean that overall we are close to stability in South America.

Yes, positive everywhere apart from infrastructure and Africa has been growing. Right, so on the back of that quarter, which is as I said in line with our expectation, we are concerning our target for the full year.

For the revenue, it’s about flat underlying organic growth before project selectivity. And I’m going to come back on the project selectivity.

And for the adjusted EBITDA margin, we target a 60 might be improvement on the adjusted EBITDA margin before Forex and on the negative Forex impact on margin, we repeat the minus 15% that we shared with you at the end of June. Now on the selectivity impact, it’s so far €130 million to €140 million and we expect to be around €130 million for the last quarter.

So as expected an acceleration in the Q4 regarding the selectivity that’s exactly according to our plan. But that mean that the amount of selectivity and the impact on selectivity for Q4 could be more or less the same amount than what we’ve seen for the first three quarters in total.

Last element that I want to bring to your attention is the working the impact, which is going to be negative again in Q4 at around minus one point. Well, that's it for my presentation, and I now let me answer your questions.

Right I think we'll take - just a clarification on the questions, because we have couple of more sessions of Q&A today, so we’ll like to keep the questions here for Q3 if possible. Yeah we will ready to get the mike to you.

Go ahead.

[Technical Difficulty]

Yes certainly, so we don't disclose order intake, so when it's meaningful when I see big difference between our sales and order intake. I think it's relevant to explain that we seem to difference things.

I would not say this is the case for industry; we don't have the kind of gap that I was mentioning for IT. Now it is clear that when we look at the details process information has been difficult for the significant time now, and we see company going for Middle East a number of decreases in the backlog and the order intake is going down, so that has been negative one.

And one in some area you can definitely see high single digit decline. But altogether for industry I would not see kind of material or various things you can get in the sale that to report and the other intake.

I think we shared with you at the end of June the fact that our field device business was still with the strong double digit decline, I don't think that I can report significant improvement on that element. So yes everything related with oil and gas is the difficult part, overall good trend in that miles away from what we are reporting on the part.

Now on the selectivity as we’ve seen and I’m sorry for playing a little with the number, but I want to be here, €130 million and €140 million for the first three quarters flat in infrastructure once that elsewhere, okay. And I expect around €130 million for the last quarter based on the one that we have been doing, it should be around €100 million for infrastructure around €30 million for the other businesses.

And you would this afternoon that starting next year for the selectivity will be very much focusing on the impact on infrastructure, and will be giving a vision and objectives on the rest of the businesses, and when it comes through the infrastructure business we believe that for the coming period largely in 2017 go bid deal on 2017. We're going to be between €200 million and €250 million of extra negative selectivity impact on infrastructure, so 2017 and beyond largely in 2017.

So I hope I'm making myself clear, but if there is anything which is unclear please ask.

Gale?

Yes, Gael De Bray, Deutsche Bank. A couple of questions for me please.

You've talked about the phasing issues in IT, so if you could perhaps elaborate a bit more on that, I mean is it related to execution problems or is it something different? And does it mean you actually expect some sort of catch up in Q4 in terms of revenues?

By the way what’s the typical lead time for that business, the lead time between orders and revenue? And the second question is about the construction market in China.

Are you seeing some growth now in this market, but do you see that as sustainable, given the Chinese authorities are obviously trying to clear up the property market again?

Okay, so on IT, I'm going to and they're into a lot of detail, but it's really the facing of project, once again I mean you have to understand that the quarter doesn't necessarily encapsulate everything which make the comparison relevant quarter-on-quarter, year-on-year. So on that quarter, we had basis of comparison, we’re seeing that may have been shifting to Q4, so that explain why some projects we have some facing, you may have some logistic issues thing that are moving from one quarter to the other for a matter of availability or logistics issues, so all the things which have been playing.

So we'll see whether in Q4 we have a catch up, but certainly given the underlying trends in order intake. We're not expecting to stay at minus level, the idea was really to stay this is not the trend and you should not believe that this is the business which is going fast by this kind of minus.

So that was a message on IT. I don't discuss some catch up in Q4 we see exactly what is fourth quarter implementation.

China, well is it a sustainable recovery, I don't know, I think that there is clearly some money which want to be invested in real estate. There is a set from the Chinese people from real estate, some of you know I was mentioning the fact that the new lot of money has been leaving the stock exchange, go on the construction market, a lot of money available.

So yes they are trying to come down, because as you all are seeing there is significant inflation on the price of real estate and some city in China and they are trying to limit that. Now I think they are also trying to make sure that construction which is a powerful engine for the Chinese growth is not coming to stuff, so I think they are trying in a very, very special path [ph] to pilot some construction activity for the growth, at the same time trying to avoid excess and bubble, I’m not able say what’s going to happen for the time being we are seeing this trend and we have no element to tell us that things really are doing some impact negative territories and that is the best answer I can give to the question at this time.

Sorry just to check at this point we probably have some questions on the phone line and we’ll come back the room thereafter. Are they any questions?

I thought that everybody was in the room.

No we have a few in the - more than a few.

Hi, yes good morning, hi, Emmanuel.

Hi Simon.

My first question just on software, I think in the past you've split out a bit how the software growth was. I don't think I saw it in the release, I think you only did solutions and services.

Could you just comment a bit how that developed in the quarter?

Yes, I’m happy to do so, so software was a bit negative, low single digit in the quarter, a rhythmic of oil and gas impact which is during the quarter negative impact and some basis of comparison for some of the business. Again on software you may have some issues on one quarter things which we can be taken in the quarter before moving to the quarter after, so that does not fit with the trend in software that we were a bit negative in Q3.

Okay. And then the second question on the SFC savings.

I wasn't quite sure whether in the past you split out what the net number would be, and I think there's obviously an asterisk in the presentation where you're saying you're going to reinvest a couple of hundred million into digitalization and marketing and other bits. Was that in the past also €200 million, i.e.

sorry the net number now will just be an increase, €150 million on the midpoint effectively?

So absolutely Simon, we have mentioned it’s wondered and it’s probably more question for the end of the morning and this afternoon, but we are sticking to the €200, so we've been indeed growing the net amount.

Okay, perfect. See you later at the web.

Thank you.

Okay, see you. Thank you.

Andreas?

Andreas Willi with JPMorgan. First on the U.K.

which if you look at the risk going forward, but where is the Q3 performance coming in Q3, because very mixed signals from company’s EBITDA at 20% decline this morning in the U.K. in orders [Technical Difficulty].

What’s really going, what was hitting in orders and which market will take a long time. And the second question on selectivity was it always planned like it in terms of how we flow through this year or next year or is bit late maybe than Q4?

We are lucky in this, we have just in front of U.K. with the country present of the U.K.

so I think that certain better to have directly from whether that been in Q3 on the U.K market the positive and the negative.

In terms and then maybe address few things, on the revenue side I think Emanuel already mentioned, we had a good orders growth last year and we are seeing the execution of those orders and they were typically back end loaded in terms of the timing of it. So quite confident energy we are seeing our backlog bumped through and so that’s obviously helping.

In terms of orders and particularly I look at the different market on IT, I think we have some FX impact on the top line. On construction market we’ve actually seen project starting slowly to flip in terms of orders for the fourth quarter possibly going into next year, however in Q3 we actually were relatively resilient in orders in the construction state.

Being particular segments doing well, our datacenters we continue to see datacenters actually as a strong growth area, particularly actually post Brexit with data localization potentially becoming stronger. We also see investments continuing in hotel, in the U.K.

and European area and we obviously increasing potential in education and healthcare. But what we are seeing some negativity and in the industrial market overall in automation, the market is generally down in the U.K.

and then we’re seeing in some of our retail markets with residential housing starts, in housing starts forecast is lower than we expected.

Thank you. That could have been doing so, thank you for that.

Daniela?

Hi, good morning it’s Daniela from Goldman Sachs. I wanted to - I know you don’t give a bridge in Q3, but if you can comment in qualitatively on how pricing and raw materials are impacting you and how that’s change versus the first half?

No indeed, not only don’t we give and you see in any of those trends, but we don’t detail the P&L, because we don’t publish the P&L. What I can that price remain at sub priority and you will see that later in the day.

And on the roadmap I think it’s in line with what I said at the end of June, in the fact that most of the impact would be in H1 and we’re not expecting much in H2. So I would say nothing new in the quarter in that.

Ben?

Ben Uglow, Morgan Stanley. Emmanuel, can you just elaborate in China on the change in trend in some of the industry exposure, I believe that your industry divisional grow was down in China in the first half, what has changed in the third quarter, what do you specifically staying in the OEM environment.

And also so looking forward can you just give a sense of the OEM environment in Europe, we’re hearing mixed things how do you see that flowing out over the next six to 12 months?

Yes, so no revolution, Ben to be clear happen in Q3, I think that we started to see some stabilization in the growing market, we’ve seen some customers starting to look back to some investment after almost three years of decreasing investment, so again let me clear we are facing easier accounts, so that helping, we are probably in some of our customers facing the need of more investments that they paid of low investment. We believe for industry and just on OEM, we see maybe also some distributor anticipating some improvement of the situation, so the destocking is also over.

So it’s not a radical change in the picture I would say, it showed that the decrease have been to some extent exhausted and given the outlook for now and the global momentum into Chinese economy, things are started to stabilize improvement in some areas. So that’s really what we’ve seen.

Now the OEM in Europe in this contrasted I think I’ve been reporting the fact that Germany which was up so far has been a bit more difficult in the quarter. Italy was still very nicely up in that business and Spain was down but facing icons.

So and France was actually a big down as well during the quarter. So it’s a mix picture I’m not doing this quarter the kind of really positive momentum that we’re seeing in each one.

But again let’s be cautions, because you are the working day impact which is clearly having a consequence on the number. So I would not say overall a kind of significant change in trend really bit tougher in this quarter than the first two quarter of the year.

Hi it’s Andre Kukhnin from Credit Suisse. Just a couple of things I have.

Firstly on Middle East, could you help us with just a facing of that downturn where we in it when we start to see constant how that grow eventually?

Try to give a few. Middle East was for me the low growth story last year, and I must say beat again all organic expectation.

So that was last year fast growing region. So we are facing icons and they've gone to be the case until the end of the year.

In H1, Middle East was already going down, but certainly not at the pace that we have seen in Q3. And please keep in mind that all that have been magnified by the Turkey situation and the fact that Turkey which is I don't know whether that should be growing, but it should be decreasing at the around 20% as we have seen in Q3.

So this is really what has been adding during one month in Turkey. No, I think that, let's put Turkey aside, Saudi Arabia, Emirates we are probably at the beginning of the decrease doesn't mean that all quarters are going to be that negative, but I think the region is set for at least in decrease we all see the decision that I've been made in term of catching a budget, catching CapEx that type of course we see all engaged business, but that is spreading in to the whole economy.

So I would say that’s we are probably set for a year of difficulty in Middle East globally, does that mean that Middle East will always have the same impact on our supplying then one of course we have had in Q3 for the reason I’ve explained.

Great, thank you. And can you just talk follow-up on China commentary made on the industry are there interesting, is there much difference in terms of what you’re seeing between process and discrete industry would you say time is like discrete putting label…

Yes, I think it’s certainly discrete is better than process.

And final on U.K. are you moving prices in U.K.

contrast [ph]?

Yes, we are. And that’s after during the summer, so we’ve been increasing price, frankly we say super Agilent flexible on that one and depending on the situation will act again.

But the pound at 1.12 against euro as pushed us to be reactive. But that started during the summer, so immediately after the Brexit we took action.

In order to compensate for the margin squeeze that this great.

Well, just considering that we have more Q&A entering the course of the day and to give you guys more time for probably…

Couple of questions maybe?

Yes, we’ll probably take another couple of questions.

Yes, thank you very much. Alasdair Leslie from Societe.

So just could just following on the comments, so I think trying to maybe you could be just comment on U.S. showed cycled as well, I think EBITDA this morning was maybe blaming so uncertainty surrounding the U.S.

elections, but I think mostly haven’t been, like hearing there may be have next couple of quarters how you see that about trending?

So in the U.S. I don't think on the trend in industry was very different in Q3 than since the beginning of the year, but we still see negative impact in term of investment again everything related to oil and gas non-conventional investments, it’s fund allow which now we seen it’s checking it for on investment.

But I don't think that we have seen a kind of accelerated decrease during the quarter and for us the question is maybe after the election, and I think I’m not challenging the fact that maybe some uncertainty are going to wane after the election. Do we see some investment coming back and resuming, I don't have yet the elements, but we certainly have the view that after a significant head of decrease because of shell gas, shell oil and now the whole industry in the U.S.

There will be a time where we'll be facing easy comps investment would be needed. And we're going to see some television and hopefully then some growth being back.

I’m not able to say exactly when it's going to happen and what would be the role of clarification on the political grounds.

Quick follow-up on the 2016 guidance maintained about flat underlying organic growth, just given the weaker trend in Q3, and I think you have additional net of working day impact expected in Q4, do we just read that this is a bit more downside risk now on the full year would you expect bit of a cash and maybe some of the years like IT [indiscernible]?

No I think again we're doing super math if you take my numbers that shared with you on selectivity and in fact that is going to be a deal of €300 million and we say apart from that we're going to be around flat. I think that drives the trajectory that we expect for the year really.

And I don't even change at all and knowing that with that. So I think it's exactly nine with what we said at the end of June.

Very good. Thank Emmanuel.

And I think we…

I cannot wait to the back on stage later today.

Just for everyone thank you for this morning session. We will reconvene back at 10 A.M.

for the start of the Investor Day and please use the opportunity to spend some time with the marketplace.

Thank you, thank you very much.

Thank you very much.