Vinci S.A.

Xavier Hulliard - Chairman and CEO Christian Labeyrie - EVP and CFO Pierre Coppey - COO Yves Meignié - Chairman and CEO, VINCI Energies Jerome Stubler - Chairman, VINCI Construction

Josep Pujal - Kepler Cheuvreux Nabil Ahmed - Barclays Muriel Fellous - SocGen Eric Lemarie - Bryan Garnier Elodie Laurent - Ernst & Young Gregor Kuglitsch - UBS

Good morning to you all. Let's begin.

Slightly fewer people than usual, which indicates that some of our colleagues are already on our motorways, which is good news and we hope that you will also head for those motorways this evening or tomorrow. Jean-Christophe Lefevre is in the first row.

He'll ask the first question, as per usual. Some photographs to begin.

Here's the inside of Lisbon airport, Portuguese on the signs. This is a 3D drawing of the Santiago terminal in Chile that we'll be building with Astaldi.

And there's also ADP. This is the duplication works, the ring road around Montpellier on the A9, for Vinci Autoroute.

The next shot is a fine engineering structure built over the Ohio River as part of the first PPP1 two years ago in the US with our US partner, Walsh, straddling Kentucky and Indiana. This is the view of a training center, built by Vinci Energy in Belgium.

Here we have a Eurovia operation in the US, Atlanta, the northwest corridor, to illustrate that Eurovia in the US, as well as in other countries, not France, is involved in linear infrastructures not just to construct the black top, but also civil engineering works and earthworks. And now this is the iconic project of the moment in Siberia at Yamal for Novatek, with Total.

We're building four of these tanks, quite impressive in size, to store LNG once it's been extracted and before it is placed in ice-breaking methane carriers to deliver the gas. It's a total project of $28 billion in oil and gas.

When projects are launched they tend to be large scale. And there are similar sized projects that are programmed in the next year since Novatek's very happy with us.

We expect to have a lasting relationship with them in Siberia. If there are any volunteers you're welcome to go there.

It's minus 50 in winter. So what are the key takeaways for the first half of the year?

The Motorway traffic, better than expected, and airport traffic has held up extremely well. We'll give you the numbers.

We signed the MoU with the state in April that will allow us very soon to kick-start the motorway stimulus package. On Vinci Autoroute, good overall momentum.

International, good order intake, concession and PPP successes. Road construction business, that is struggling some in France, but showing signs of improvement at the end of the period, as we'll see through order intake.

Vinci Construction, impacted by the end of restructuring of our unit in the UK, but also by the dip in two of our activities because of the drop in the price of oil. Entrepose Contracting, on the one hand, and Sogea-Satom, our operation in Africa, are suffering from the reduction in CapEx, by oil companies for Entrepose Contracting, and oil-producing countries in Africa for Sogea-Satom.

However, and we rarely discuss this at these presentations, but it's important to do this from time to time, good rebound in real estate property, notably for the residential sector. Our bookings for the first half are up 50% almost versus last year, so the recovery in the residential property market is well and truly there, as is stated in the press.

We confirm that. And of course, 6-12 months down the road that will be on the rise with new construction projects being launched.

Overall performance summarized on this slide, notably a limited decrease in revenue, improvement of the EBIT margin, comes in at 8.6%. A 6.3% increase of Group net income, excluding the one-offs, the non-recurring items, because we disposed of Vinci Park last year and a strong reduction in net financial debt over the year.

And of course, this confirms the solidity, the strength and resilience of our model. Taking a deeper dive, Vinci Airport traffic is up by 11%, up 1% because of the recovery of Toulon Hyeres, which is our 23rd or 24th airport traffic, 12% in Portugal, over 14% in Cambodia.

I probably told you that in Cambodia we've launched works that are nearing completion to up the capacity of our terminals, both at Siem Reap and Phnom Penh. EBITDA, up significantly at Vinci Airports now, topping 50% of revenue.

And we're very galvanized with ADP and Astaldi on the design and engineering of the new Santiago terminal. There are already 100 people involved in the engineering design of the new terminal of Santiago and refurbishing the fourth terminal.

We're also very focused, with our partner, Orix, on Phase II of the privatization of Kansai, Osaka and Kansai airports, two airports with 35 million passengers, by way of comparison, 35 million passengers, about a third of passenger traffic at the Paris airports, so two fine projects. And it would appear that the competition is rather modest, for simple reasons, which is that the PPP and concessions concept is almost non-existent in Japan, so very few people have looked at it.

It's too new for people to rush into that concept and it may well be that several players haven't fully realized that Japan has become a major tourist destination, notably for Chinese, Taiwanese, and South Korean visitors. Surprising, we all had in mind that the Chinese and Japanese weren't the best of friends, but for tourism we're seeing a doubling in the number of Chinese visitors to Japan over the past year, an increase of 50% in Korean visitors, 45% from Taiwan.

So Japan has managed to become a very favored tourist destination for Asians. Vinci Highways International, the equivalent of Vinci Autoroute outside France, we successfully had the financial close of section 7 and 8 of Moscow-St.

Petersburg, 108 kilometers at the far end of the Moscow-St. Petersburg highway, with VTB Capital, a subsidiary of VTB Capital.

And the work is entrusted to an Italian-Turkish consortium, with Ictas. And Astaldi will now be able to start their works for $1.5 billion.

And we're currently completing the financing of the Regina ring road. Regina is the capital of Saskatchewan.

And Saskatchewan, as you also all know, is a Canadian province between Manitoba and Alberta, the size of France, with only 1 million inhabitants; capital, Regina. And we secured, together with local partners, a PPP, an availability scheme, the bypass.

This is nearing completion. The work's above 1 billion Canadian dollars and we will achieve 35% of that with our Eurovia-Carmacks affiliate.

And Vinci earthworks involved in the high-speed rail project in Southern France. Vinci Autoroute traffic, better than expected, up 2.5% the first half and in the second half, even if there are calendar effects, and we can't really extrapolate, the second quarter, up 3.7%, very encouraging.

EBITDA continues to grow. IFRIC 21 has made us give a pro-forma 2014.

When it's 73.4% EBITDA it's not comparable to the 71%, but versus, it's 73.5% if we reformat our 2014 numbers in light of the change of IFRIC 21. I don't know any more about that.

You can ask Christian if you want further details. So it continues to grow.

That's the traffic effect. It's a boost.

But there are always synergies and efficiencies to be delivered on our motorway network since we've combined all these networks within Vince Autoroutes. I wanted to show you this chart, which is the change in traffic over 12 sliding months, starting before Lehman Brothers.

We see the recovery. At the end of the curve, light passenger vehicles trending upwards.

That's positive, a recovery both for passenger vehicles as well as trucks. Trucks calculated by number of kilometer covered, hasn't returned to its level before Lehman, about 8% below the level prior to the Lehman collapse.

And it will take us some time to offset that or to catch up. We signed with the state, on April 9 an MoU which puts an end to the crisis triggered by the report by the Competition Authority last October and will allow the implementation of the stimulus plan.

We're awaiting, for the coming days, the opinion of the Counsel of State, which in turn allow the concessions granted to sign the various riders to the concessions contract, which will give rise to a publication in the official Gazette. It's only then we can indeed consider that all that is implemented and the stimulus plan for highways can be kick started.

Stimulus plan for us, its EUR2 billion. As you know, it's an extension in the lifetime of concession for ASF, two years and four months, Cofiroute, two and a half years; and Escota, two years, four months.

More on the Escota. Escota has a major CapEx program as part of this plan, everything that revolves around the Toulon [indiscernible].

In terms of receipts of Escota, it's modest, so Escota needs more life extension to support the major part of the CapEx that it receives. In this agreement, there's also the principle of tax stability enshrined in concessions contracts.

And we'll say more when it's closed in the, we'll have a final meeting in the autumn. A profit-sharing clause or rather a value-sharing clause, if traffic levels were to significantly exceed traffic levels planned at the privatization in 2006 and if things were to be better than expected as part of the stimulus plan that is the additional years brought about by the stimulus plan.

And the MoU provides for execution controlled by, I'd say on a voluntary contribution by all highway companies in order to fund the infrastructure agency, for a total amount of EUR800 million over the period and covered half by Vinci Autoroutes in the setting up of a fund, a fund of EUR200 million for all highway operators, to be managed by CDC, whose purpose will be to invest in equity on infrastructure projects, and notably infrastructure projects that are green projects. We consider that it's a balanced win-win agreement.

And once again, we'll give you more details when all that is finalized. We'll have a special meeting in the autumn.

Contracting, Vinci Energy, Eurovia, Vinci Construction, it's a pretty mixed bad, depending on businesses' geographies. Vinci Energy continues to roll out its expertise, its geographic footprint.

Vinci Energy has an international network that is becoming extremely strong and extending its footprint gradually through acquisitions, after Imtech in ICT that was just over a year ago - and Electrix in transmission of electrical energy in Australia/New Zealand that we mentioned six months ago. They're in the integration phase.

No difficulty. We acquired Orteng, some EUR130 million in revenue, in Brazil, and serves industrial clients, and the major client, Petrobras, in Brazil.

We also acquired a number of smaller-size companies that we haven't listed, in Europe. And we have a potential acquisition pipe outside Europe that's quite significant.

France is slightly down over the half, 1.4%, but the key takeaway is that revenue is up 10%. That's thanks to international operations and the recent acquisitions.

I can also add that the order book and margins are holding up well. The other key point, as you well know, is that these businesses are difficult to explain, are often poorly known, but will benefit from the good visibility that you will have with the IPO of Spie.

That was successful two months ago, has a very commendable track record. And after the reviews that you and your colleagues will do of Spie, you'll probably better understand what Vinci Energy is.

It's twice the size of Spie, with probably a global footprint that is bigger than Spie. So basically, Vinci Energy is Spie, but much better.

We're pretty much at ease with these businesses. We have the right organization, the right principles and the right marketing approach through micro segmentations, and we have the right operating management tools.

And so we can expect strong growth in the coming years. Eurovia struggled in France, for two reasons, lower spending levels by local authorities.

But also, a second factor was the wait-and-see attitude after elections. That is the new elected officials after the local elections a year ago, given their shrinking budgets, took more time than usual to form a view as to the projects they were going to launch during their term of office in terms of infrastructure investment in their towns.

This is a phase that is ending. We're beginning to see more business and our design offices and, that receive and can prepare new bids are very busy.

Eurovia managed this very difficult phase through reorgs in France, by part-time work, continuous efforts on project selection. The rail business is holding up well, and that reduces the overall reduction to 5%.

And this in spite of a severe drop in France that was of 11.1%. Lastly, I'd like to stress the remarkable performance, given the context, which is stable EBIT margin in spite of the dislocations even if you know that in road building is very seasonal.

And so the first-half margin isn't representative. France also struggled at Vinci Construction in France, suffers a sharp decline of some 13.8% of operations.

And included in that, there's the end of the infrastructure work for the major project for the high-speed rail in southwestern France. But that's not all.

Vinci Construction also had a hard time in two businesses, Entrepose Contracting and African countries that rely heavily on oil revenues. But also, the end of the Nottingham project in the UK that is expected to come into service in the coming days weighs on EBIT, down 100 bps over last year.

It's therefore more than ever necessary to redeploy Vinci Construction internationally. That's the purpose of Soletanche Freyssinet or VCGP, and that's going well.

It's also why we have once again resumed acquiring companies in the construction. We acquired HEB in New Zealand, a construction company with EUR230 million in revenue.

And we, a few weeks ago, or rather we're going, we've agreed with the owners of Conconcreto, a Colombian company that we know well because they were our partners on Soletanche, but also on our attempts to win concession projects in Colombia. We're strong believers in Colombia.

We felt it important to materialize our operational partnership in Conconcreto by taking a stake. We'll take a 20% stake in this fine company, Conconcreto, which is ranked second in the construction section, infrastructure projects, but also buildings and real estate.

A word of the Tours-Bordeaux high-speed rail project, the timeline is on track, even slightly ahead of schedule. We're happy with this because we're demonstrating that all components of the Group know how to work together in synergy when it needs to happen.

EUR615 million revenue is on a par with what we achieved in 2014. Of course, we'll deliver this project on time.

And we're in discussions, can't say any more because the discussion's not finalized, with SNCF networks and SNCF mobility, French railways, in order to agree on the train frequencies and the stops when it opens in the summer of 2017. International expansion and having a good balance between France and outside is shown on this map.

France is down over the half by 9% and its weight overall will no doubt continue to decrease. That's rather good news because that was a strategic focus.

Africa's down, for the reasons outlined, probably just cyclical, but we don't know how long that will last because it really depends on the way in which oil prices trend. The rest of the world is up well, notably east and west, in the Americas and in Asia, Middle East, Oceania.

The international that is outside France that was 37% the first half last year has topped the 40% mark in 2015 and will continue, in particular through M&A. This international expansion is reflected in our order intake.

It's perhaps rather difficult to read this chart. The takeaway is that France is down by 11%.

It's the box in the middle, in the dotted lines. It's quite a sharp fall.

But what's important, it's the combination of Q1 that was really difficult and Q2, that's far more encouraging because the order intake in Q2 were better than during Q2 2014 and particular in Q2, June was particularly good. So our sense is that things are improving.

International, up 9% over the half and with that, we can almost totally offset the weakness of France over the first six months. By business, Vinci Energy's up well.

That's due to the acquisitions I mentioned. Eurovia is suffering from the decrease in order intake in France, but, as I indicated, is seeing a lot of activity in responding to bids and tenders, for the reasons previously outlined.

And Vinci Construction is holding up well thanks to a recovery in major projects. There was the La Sante prison booked, line four of the Paris metro, shopping center in Poland, Santiago de Chile or line three of the Cairo metro.

Over to Christian, and I'll come back later with the outlook.

Fine. So revenue declined in H1 by 3.2%.

That's due to an organic decline of 6.7%. And that's because of a positive impact of foreign exchange rates, 2.3%.

Our two major business lines diverged. In concessions, we had 8.3 - sorry, in contracting we had an 8.3% organic decline.

But it's because we deconsolidated Vinci Park in 2014 and as a result there was a negative impact of 9% between consolidation, scope and foreign exchange. Contracting saw its revenue drop, although that was offset by recent acquisitions and positive exchange rates.

As for our acquisitions, an impact of about EUR500 million on revenue in H1, mostly carried out by Vinci Energy in H2, Imtech ICT and Electrix, as well as the Ibero-American unit being integrated. As for foreign exchange effects, they mostly focus on sterling and the US dollar.

Contracting's revenue declined by about 10% in France. Most of the decline was recorded by Eurovia and Vinci Construction.

In international operations, revenue dropped by 6.3%, mostly because of Vinci Construction, Vinci plc and Sogea-Satom. Let's move onto our recurring operating income or EBIT.

As Xavier asked me to do, I would like to point out first of all that we have applied, as of this year, the provisions of the IFRIC 21 interpretation, the interpretation of IAS. That leads to recognizing as expenses income and taxes other than income taxes on the date at which they are due.

Previously, these expenses were smoothed pro rata temporis throughout the year. So although the implication of these new provisions does not have any impact whatever on the annual results, it certainly does have an impact on interim periods.

So we restated our H1 financial statements to ensure they could, in 2014 so that they could be compared with H1 2015 results. So as a result, there was an improvement of EUR40 million of our 2014 figure, breaking down by a 71% increase in concessions because the land tax due in July will be recognized throughout H2, whereas contracting will be reduced because we, of the way in which the land tax is recognized.

So now let's look at the first-half figures a comparative analysis, so recurring operating income increased slightly, although once adjusted for Vinci Park we can see that this growth came in at 6.3%. This is because of contrasting trends in different business lines.

Concessions grew by more than 10%, with the operating income from ordinary activities increasing by 11%. Excellent growth at Vinci Airports and Vinci Motorways due to productivity gains in particular.

There's a slight erosion in the margin of operating income from operating, from ordinary activities. Vinci Energy, as you can see, benefited from the growth in its revenue due to its acquisitions in particular and maintained a high level of profitability in France as well as outside France.

For a start, Eurovia, and bear in mind that its interim results do not give an idea of the whole-year, full-year results because of seasonality effects. Eurovia held up very well, even in France, despite a drop in revenue of about 10%, witnessed in France.

Vinci Construction, at last, posted an EUR80 million decline in its recurring operating income. If we adjust for foreign exchange rates, the decline in the margin is simply 80 basis points.

And Vinci Construction in France, Sogea-Satom and African Entrepose account for this decline. These three business units, for various reasons, are facing sharp drops in business; in France because of the significant decline in public sector orders, in Sogea-Satom because of the contraction and investments by oil companies and oil-producing countries.

Note, however, that Vinci Construction [indiscernible], for instance, has improved its contribution and that kept the decline in the constructions divisions' decline, as well as the fact that the losses incurred by Vinci plc were halved. If we look at the income statement now we can see that the confirmation of the upturn in residential property, as well as the fact that we have satisfactorily concluded some construction projects in office construction.

In 2014, we recorded an exceptional revenue because of the capital gain from the disposal of Vinci Park of about EUR700 million, as well as capital gains. This year, we are recording an expense of about EUR10 million, resulting from our withdrawal from India with respect to the Eurovia operation.

There's about a EUR50 million improvement in our financial income because of the, thanks to the decline in interest rates that we've benefited from since most of our gross debt is at a floating rate. And at the same time, the return on our investments has declined and we've been able to maintain them at a fairly satisfactory level.

The decline in the taxes can also be highlighted due to the contraction in the taxable tax base. But at the same time, tax rates have actually increased.

That's because Vinci Park last year was taxed at a lower level. All in all, net income excluding non-recurring items came in at EUR827 million versus EUR778 million last year.

In the same way, earnings per share rose by 7.5%. So now let's look at our change in net financial debt.

Usually in H1 we have a negative result here because of seasonal effects. So in H1 2014, free cash flow was negative by about EUR500 million.

However, this year it moved into positive territory by about EUR200 million, a good performance that reflects a lower consumption of working capital requirement. Last year, for its consumption of current provisions topped EUR1.8 million, this year, EUR800 million.

Of course, there is a decline in business with customers who weren't paying us very well, such as public sector customers, as well as some African countries. There's also the impact of the management of WCR by our units.

Investments in H1 led to the acquisition of Orteng by Vinci Energy, plus about six small companies. But also, Vinci Construction acquired two companies in specialty business lines, one in Singapore and the other in Indonesia.

All in all, our net financial debt grew by EUR600 million in H1, but you need to have a full-year analysis to be able to make a significant comparison. So let's look at the consolidated balance sheet now that shows that our capital employed topped about EUR31 million, stable over the last 12 months.

Capital invested in concessions declined to some extent because we invested less and we depreciated previous investments while we wait for the stimulus package for motorways. And in contracting, however, there's been an increase in capital employed because of the acquisitions we've made.

But all in all, concessions account for the lion's share, with an increase, accounting for more than 84% of capital employed by the Group. We then have an increase in net financial - an improvement in net financial debt.

Our equity was built up by about EUR600 million over the year, stable at December 31 because this offset the paying out the balance of last year's dividend and share buybacks. I'd simply like to point out now that when we look at the figures we can see we reduced our gross debt, but also our cash position.

In fact we gave preference to using our available cash to lower our debt rather than refinance it because of the low interest rates, because we cannot achieve satisfactory returns on our cash investments, so it's better to reduce our cash position and repay existing debts while then borrowing to make new loans for the time being. As you can see here, our future debt maturity schedule is spread evenly in the next few years.

That will enable us, like we've always done, to carry out refinancing transactions at the time we choose without any pressure. In H1, as I said, we've decided not to do anything because we had a comfortable liquidity position and repaid all our maturities, including the EUR650 million we issued when we acquired ANA a year ago, as well as dating back to our acquisition of ASF.

So we were able to fully benefit from the repayment of these bonds issued at a very high rate. You can see that we maintain a high level of liquidity, more than EUR6 billion, including unused bank credit lines maturing in May 2020.

We have constantly intervened in the market through service providers to ensure that there would be no dilution because of the increase in the shareholding of our employees. We created 8 million shares in the period.

Our policy seeking to strike a correct balance between floating and fixed rates for our debt means that the gross debt cost has dropped to 3.51% from 3.70% last year. Lastly, credit rating agencies have confirmed our credit ratings, as well as, not only Vinci, but also our subsidiaries.

So this confirms the relevance of Vinci's business model, the visibility of our strategy and our constant financial policy. Thank you very much for your attention.

This order book remains at a very high level. It remains flat in comparison with June 2014, if we strip out the southeast Atlantic high-speed rail project that pollutes comparisons.

And this order book combines a significant drop in France, with a very good performance outside France and particularly outside Europe. We believe that the French market is reaching, is about to bottom out and might even be picking up slightly.

Many significant deals are being negotiated, such as this maritime project for LVMH or oil and gas or the Orly-West-to-Orly-South junction building for airports of Paris. All that is booked for Vinci Construction, but there's also a superb contract to renew a railroad for SNCF for Eurovia.

As I've already said, our departments working on all tenders to be submitted, calls for tenders are very busy, particularly because of projects resulting from the Greater Paris area project. And in the next six months to one year we'll start to see the positive impact of the upturn in sales in residential property.

The market in France will remain robust. The possible exception outside France will be Africa because we'll need to come to terms with the decline in oil prices.

All in all, order intake in H2 should be positive, enabling us to see our contracting revenue flatten out in 2016. And we might even record slight growth if we make new acquisitions.

With respect to our business lines, we believe that motorway traffic is going to increase at a faster pace than recorded in 2014. As you know, in 2014 we recorded 2.1% traffic growth.

We now believe that we will top that figure in full-year 2015. We believe that airport traffic will remain buoyant, probably close to the 9% recorded in 2014.

We believe that contracting revenue in full-year 2015 will decline slightly, with similar percentages to what was witnessed in H1 2015, i.e. a 2.4% decline.

And the overall operating margin will improve because of an improvement in concessions and the flattening out in margins and contracting. Net income should exclude, should increase slightly year on year if we strip out the exceptional items in 2014.

All of that led us to recommend to the Board of Directors that we should increase our interim dividend that will be lifted to EUR0.57 per share, up from EUR0.55 last year. Annual payment date has been set for November.

Just to finish this morning, stepping back somewhat, we are in line with our strategic roadmap. Looking beyond short-term developments, we are on the right track to increase the weight of concessions and, within concessions, to build up the weight of airports.

We're heading towards a faster development in Vinci Energy and other units. Eventually, it might become the largest component of our contracting business line because of the numerous consolidation possibilities that have appeared in the sector.

Vinci Energy is now a global player. We'll also see a development of niche segments, with, for instance, Soletanche Freyssinet.

And these are nice markets with a highly sophisticated technological content and excellent profitability. All of this will lead to, gradually, Vinci Energy becoming more and more international, as we've already seen in H1, with international operations accounting for more than 40% of our total revenue.

Thank you for your patience in this initial phase. And we will now answer your questions.

The first question for Jean-Christophe Lefevre-Moulenq. Which bank is it or CIC, CIC Securities.

In fact I have a question about the two pillars of your business, i.e. concessions and construction and civil engineering.

In construction and civil engineering, if I understand well, your guidance for income has been downgraded since the beginning of the year. You talked about an increase in contracting's margin and now you're expecting it to remain flat.

So what has led you to downgrade your guidance between February and now? Second, if we look at your contracting business's results in detail, there's about an improvement of EUR30 million at Vinci Energy, but a decline of about EUR80 million at Vinci Construction.

So could we, in order to compare these figures know what were the negative items that weighed in H1 2014 or H1 2015? I believe that you talked about some provisions mix of [ph] in maintenance activities.

Nottingham weighed about EUR100 million last year. What was the weight, its weight this year?

And in concessions, could you give us an order of magnitude with respect to Cofiroute's EBITDA margin, as well as ASF, and Cofiroute?

With respect to construction and civil engineering, I don't like that description because we're far more sophisticated than that now. Yes, there has been a downward trend.

And we're talking about margins flattening out because of three factors for our family [ph]. First, the end of the cleaning up in the UK.

Second, the impact of the decline in oil prices on investments launched by oil companies and the impact on Entrepose Contracting as a consequence. And lastly, as I said earlier, with respect to Africa, we have superb positions in Africa, but many of these positions are in countries that depend on oil to a great extent, i.e.

Gabon, Equatorial Guinea, Chad, Cameroon and Angola. And of course, the drop in oil prices is impacting the way in which these countries decide to launch or not new investments.

As I said earlier, it will take a while before growth picks up in these African countries. We are probably entering a somewhat softer period in terms of revenue.

And since these operations were working very well in terms of producing margins, that has an impact on volumes, as well as the level of margins, and that hurts Vinci Construction's profitability. To finish, with respect to Vinci Energy, the standard is 5.6% and we've maintained that constantly for several years.

So in some years facilities management struggle somewhat, that's not the case this year, all because we've just made, in some years, a major acquisition and it has to be standardized. But basically, our profitability is 5.6%.

So we don't provide information, detailed information because you have to take into account this constant work carried out in our existing business units and the proactive acquisition of companies. Before, this obviously leads, at the beginning, to an impact on our margins.

But overall, we make sure that we continue to post 5.6% profitability. Vinci Energy will remain at that level.

Eurovia's margin will remain stable year on year. And the slight downward trend you mentioned comes from Vinci Construction for the reasons I've just mentioned.

As for concessions, I don't believe we disclose our EBITDA rate. Cofiroute publishes its interim results, but I'm not sure.

It's in the report. Do take into account in fact that the EBITDA rate in H1 in motorway concessions is not at all representative because of seasonal effects and because of IFRIC 21, because this led us to increase our margin in H1 and that cannot at all be extrapolated to the full year.

The good news respect to motorways, if I stand back a little bit, is that the French are going to remain in France for a greater extent during the summer holiday.

I have two questions, one about margins in construction. How do you think this will trend in H2?

Respect to the three factors you mentioned, one is coming to its end and therefore we could expect a better margin in H2. Or should we project a similar level of margin in H2?

And something’s somewhat odd here. Why has Eurovia, despite the deterioration in its business, is holding up much better in respect to its margin?

Is that because they had anticipated what was going to happen in France and got ready for that, but everything that occurred respect to oil prices in Africa and so forth unfolded very quickly, and is that the reason why? Another question is about debt.

Could you give us a breakdown between fixed-rate and floating-rate debt? And until now you have sought to convert fixed into floating-rate debt, but do you believe you should now increase the fixed rate component?

I'll let you answer that one, Christian. As for Eurovia, the answer is they're very good.

Their management team is excellent. They are our best performers in France, also very good outside France.

So when I say they are best performers, I mean in France. They had prepared very well to the downturn.

In comparison, we saw their competitors. So they were very, had a very stringent discipline in terms of picking, selecting deals.

And that of course enables you to control overall margins to a greater extent. The other explanation with respect to Eurovia is that you have the fact that their daily business is made up by small deals, so you have a far lesser impact from major projects.

Some of the, that's the beauty of our business model. Some of our businesses depend on huge projects such as Vinci Construction and others that have far smaller deals on average.

As for the first part of your question, you'll have to calculate that yourself. As I said, margins have flattened out H1 in contracting.

I think Vinci Energy will remain at 5.6% and Eurovia at about 3%. You should be able to work out what's going to happen with respect to Vinci Construction.

In other words, in H2 we're expecting an improvement in the performance of construction, particularly because last year we were, the loss incurred in the UK was recognized in H2, but we won't have that this year. With respect to, having to do with oil prices, we don't have a crystal ball.

We can't tell you whether oil producing countries are going to resume their investments overnight. With respect to contracting business lines, I'd like to point out that commercial, an aggressive commercial policy does not depend on the market in absolute value terms but the fact that you're moving from one level to another.

We had a very high level in France; margins were excellent, because our competitors were not worried about whether lack business. We're probably going to have a flattening out at lower level.

There may be even a slight upturn. What is very difficult to manage was dropping from that very high level to a lower one.

But once you settle down at a lower level, people will get used to the situation and then you can start improving your margins again because you've pulled out of the highly disruptive area where you dropped from a higher level to a lower one. So it's not at all the same way as of operating as more industrial business lines.

As for the breakdown between fixed rate and floating rate debt, our net debt totals about EUR14 billion. We have about 50% of our gross debt is that floating rate.

Why? Because there's natural hedging with our cash investments and the remainder is more or less the EBITDA concession that is also in our opinion related to inflation.

So it's a sort of natural hedging. So what we can see is that, should interest rates rise, that will affect the longer end of the curve.

And the shorter end, that is of great interest for us because of cash investments, they're going to change far less. So we really don't want to have just fixed rate debt.

We've always done that for the last 15 years. Vinci has paid off quite well until now.

Hi. I'm from Barclays.

I have three questions if I may. Sorry to return to this, but I'd like to return to the contracting margin in construction in the first half, down 100 basis points for EBIT, only 50 bps down on EBITDA.

Is there some provisions that accounts for the difference here? And for the trend, could you give us more details on the contraction?

Christian said 20 basis points linked to ForEx. Is the margin in France down?

Is there a mix effect because more international, less France, so the total margin is down, in other words, France, more profitable than international or not? Second question, on Osaka, it's early, but could you give us some details on your position in the consortium and the kind of an order of magnitude of the CapEx for Vinci?

In the press conference you cited a number of countries that you're looking at. Could you give us an update on privatizations, next airport projects that you're looking at?

A final question was really just a point of detail on the agreement with the state on the motorways stimulus plan. In the slide you referred to a level profitability for the extended period of a concession.

Could you explain the principle of that?

I'll let Christian talk to construction because I've spoken, obviously I wasn't clear enough. I will let Christian.

Osaka, no, we won't give you any details. We're in the midst of phase two.

So it would be rather hazardous. In fact, I don't think we're allowed to give you details.

You just need to know we're in partnership with a Japanese company Orix, that's known. And in the tender, we said that the Japanese would have a little more power and weight in the partnership than us.

So that explains why a number of international players who might have been interested weren't able to go because they didn't find a Japanese partner, because of the distance that exists between the Japanese investors and the concession items that are not well-known in Japan. As to the outlook for airports, I won't give you much information on that.

Look at Osaka. Osaka, plainly, there's little competition.

Had I answered your question a year ago and had I mentioned Osaka, there would have been competition on Osaka. So I won't say anything.

As I indicated, we're looking at countries like Indonesia. There are many islands, many airports there, various sizes.

There are probably things to be done by people such as ourselves. And we also mentioned Iran earlier.

Yes, it's true. Like most companies, we're gearing up for the opening of the Iranian market.

And we expect that we could indeed deploy our skills for concessions and why not, airport concessions in France. There'll be the sale by the state of its 60% in Nice and Lyon airports.

Obviously we'll be bidding for these two platforms that are interested, as we indicated of late, because we were candidate for Toulouse airport. On the stimulus plan, Pierre, would you like to say a word about that?

Briefly, without going into details of the formula, the schedule of the rider for the stimulus plan, so, profitability, timeline on the stimulus plan, which, without going into the details of them, it actually caps the IRR at 10%, since you need to be complete. I believe I stated that we would give you far more details when all that is crystallized.

There is indeed a clause that exists even if it's of great interest that takes account the total traffic level since privatization and would kick in if the cumulative traffic level were to exceed 30% of what we planned at the privatization stage, given the line, I mean it would be good news if this clause kicked in. EBITDA, earnings, GAAP, I mean there was a dip of 50 million euro of EBITDA in construction and in recurring income.

There's some provisions for project risks. I mean there's no need to say too much about that.

France, construction at that margin lasts about 1.5% to 2%, depending on the cases year on year both in France at VCGF and Sogea-Satom. VCGF we started from a lower level, so, the France level is lower, whereas at Sogea we had margins that were higher.

What was your other question on earnings? Well, what's sure when we move from a high business level to a low business level as is currently the case in France in construction.

You obviously have an impact on how aggressive the competition is, necessarily an impact on margin. Once it levels off, whatever the level at which it stabilizes, as I indicated earlier, at that point, margins grow again.

Next question?

Yes. I'm from Soc Gen.

I have a question on France. The Greater Paris region, if you could give us some details, especially orders of magnitude on the type of project that will come on-stream today.

And on the high-speed rail link, have you nudged up profits on the works and if you could give us some indication on what you plan to book by way of profits this year on that. On property development, I mean it's marginal for the Group, but you had a strong increase in your property development margin.

I mean is this something we can extrapolate for the full year? And my final question, on the dividend, wanted to know if the guidance of an increase in the interim dividend is an indication for the year.

Okay, I'll take them in reverse order. Yes, of course, on the last question, I mean, it would be rather clumsy to increase the interim dividend and then do nothing on the balance dividend.

So you can interpret that sign of an increase of three-and-something percent of the interim dividend as being a sign of confidence in the way in which things will unfold full year. Our dividend has remained on a par what it was previously, for three years, if I'm not mistaken.

On high-speed rail, we've discussed this at length, it's always rather tricky for two reasons. SCA high-speed rail you have a project team, and then you have a lot of contractors involved, be they Vinci or non-Vinci, either partners or even subcontractors.

Obviously all the subparts of the works that were subcontracted to Vinci or non-Vinci units, obviously the margins were booked as we went along, because they took that as a normal project. So the residual margin is the margin for the project.

We've always said cautiously that, on such a mammoth project, it’s one that is only completed once the first train starts running. There are still things to be done.

We also have to refine and complete the systems dimension. So we have kept some spare in case we encounter more difficulties than we expect in implementing the systems during the terminal phase.

On Greater Paris, what are you asking for? Is it what's in the pipe?

It depends what you mean by Greater Paris, because it's kind of all things to all people. We need spokes of urban transport infrastructure in the Paris region.

There are a number of projects that have been let or, there's Orly [ph] the project which is keeping the teams busy for that urban transit project. There's the tunnel, the [indiscernible] station, and then also, for SGP, consultation on Line 15 South Fort d'Issy Vanves Clamart Station.

And there are some tenders planned in ‘16 and ‘17 for this Line 15 South and then works for the Paris metro on lines 4, 11, 12. Some contracts have been let, others in the tendering stage, such as Line 11, a tunnel, and four stations, or Orly.

A lot of things are happening in the Paris region in terms of urban rail transport infrastructure by either from SMCF or RFF. Does that answer your question?

Okay. I think we've answered all those questions, yes.

Vinci real estate, so yeah. Vinci, as I indicated in the first half results, that's the results on residential segment driving the growth.

We're only in the early stages here because we booked earnings as the construction progresses. You say we've had an increase of 50% in the number of units booked.

That's going to generate more work over the next eight to 12 months, but then there are some in commercial real estate, there is some projects for offices, hotels, once they're completed, they're done the second half of the year, we're not banking on such significant earnings at present. So, full year, we expect return to the level of margin that we've experienced in the past of the order of 6%.

Hi, from Natixis. Three questions, the first, just to return to international operations.

The Indian experience for you was rather unfortunate because you sold the Eurovia units last April, NAPC. Are you drawing a line on the Indian construction markets, I mean for concessions, there may be an opportunity, or is it just specific to NAPC?

Second question, a major investment for you that we've discussed a bit, the 8% that you have in Paris Airports, because Xavier, you have a seat on the board of ADP, if I'm not mistaken. What's your view on the next economic regulation of Paris Airports, ADP?

Third question on Vinci Energies France, we've seen a decrease for five consecutive quarters, less than Eurovia, the construction. I'd like to understand the reason for this continued decrease.

I mean is it selectivity to improve the margin of certain projects? Thanks.

Vinci energy, is Yves still in the room? Yes.

There he is in row two. Okay, I'll let you answer point three.

I'll start with the first two. NAPC, yes, we're not particularly proud of that.

We were very disappointed by the figure of the infrastructure market in India and we were somewhat disappointed by what the rather cumbersome nature of some of the processes and the difficulty of managing projects. For concessions we had a team on the ground that was following the deals that were put out for tender under the previous government, and experience has shown that practically nothing happened and what was left was not financially closed.

We're not fully convinced that things will change at a rapid pace. With the arrival of the new Prime Minister, there's a willingness, but it hasn't, it's not reflected in the facts.

So we won't return short term significantly to India on the infrastructure markets. Works or concessions does mean that we're rolling it out fully, but for the time being it's not part of our priorities.

On Paris Airports, there was a Board meeting yesterday. I looked at the economic regulation contract for Paris Airports.

I think it's a good contract because the period of the dual fund or the ordinary adjusted fund that was maintained, that a significant CapEx, EUR3.5 billion, and the tariff increase episode is lower than what was proposed by ADP, but it's higher than what was proposed by a number of other ADP stakeholders. So the compromise found by ADP and the state as grantor is a good compromise and it'll enable ADP to continue to modernize its infrastructure so as to promote the growth in air traffic and notably its prime company Air France.

All of that with the need for ADP, it's in the contract, to make productivity efforts that are quite significant. Its ADP personnel that is unhappy with the new plan because it means that it's going to have to, they're going to have to make more efforts than previously, so all that's very good.

I see that the stock market reacted very well or reacted very acceptably because the share price still stands at EUR107 or EUR108. Vinci Energies France.

With respect to Vinci Energies France, is for about 18 months, we've been fluctuating between minus 1%, 2% in organic terms in our four major fields of operation in France, about 20% local authorities, so we're hurt by what's occurring with respect to local authorities, although that accounts for just 20% of our revenue. In industry things are going quite well.

In telco things are going quite well, although one of our major customers has been very much in the news recently. And in the service sector we're being very selective.

If you look in France at Vinci Energy's major competitors, you'll notice that two of them have very high levels of margin, tend to have an increase, whereas those that are growing very fast have low levels of margins. Well said.

Good morning. Eric Lemarie, Bryan Garnier.

I have a question, because French Civil Engineering Association talks about how energy works are going to be a major component of the business in France.

Jerome, you know best. Could you answer that one?

Yes, indeed. EDF is launching a major project, and there the principle is to extend the lifespan of nuclear plants.

That project will cover about 10 years. We're very interested in that.

For the time being, that has not had any impact on our revenue because we're in a pre-study phase in fact, and calls for tender for works will start in about two or three years, roughly. Yes, we're also interested in related issues, I believe what's occurring between Areva and EDF should lead to this operation being launched faster because this will lead to matters being clarified.

And EDF is certainly going to do everything to make sure this project is launched as quickly as possible. If we don't have any questions in the room, we might take questions, sorry.

Gregor, you have the floor. Last question on Cofiroute, have you been looking at a re-leveraging of Cofiroute?

Is there anything new on this respect? Or for the same reasons, the ones that led us not to reduce, to refinance our debt maturities by issuing bonds, we're not going to do it for Cofiroute either?

No, that's not at all on the cards. Questions from the phones, we'll take questions in French first, and then we have one question in English afterwards.

The questions in French first, please. The first question Elodie Laurent.

Good morning everybody. Good morning, Xavier; good morning, Christian.

A few follow-up, a little bit of follow-up on previous questions, could you give us some information about July traffic? Was it as good as in Q2 as a whole?

With respect to the Spie's package, could you remind us about what sort of impact you're sort of expecting on works for Vinci, for its works operations? Third, with regard to your M&A ambitions, and slide 29 where you talk about extracting more value for your existing positions, do you believe you will launch other transactions like you've done divestments such as for Vinci car park, Vinci Park?

And you talked about margins being normalized with Eurovia at 3%, Vinci Construction probably 2.5%. And if you strip out the losses you incurred in the UK, what would have been the level of normalized margin given the trough in business in France and oil and gas?

Thank you very much.

For July traffic figures, I've got to ask Christian Labeyrie because of compliance, can we disclose any information? Well, we're prohibited from doing so.

Traffic was good in July, I won't say anything else. We didn't, don't have the right to say that in our press release.

We said that the full year figure would exceed 2%, would exceed 2.1%, since we said it would be better than last year. So, it could be 2.11%.

Now, Q1 was 2.7% and even 3.2% in Q2. With regard to works, as you know, a long time ago we reached agreement with the French government and that association you mentioned to ensure that 55% of the works resulting from the stimulus package would be entrusted to non-Vinci companies, in particular small companies, as long as they're competitive.

So the best we'll get about 45% of the works from this stimulus package. As for the timing, we'll launch some small projects at the end of 2015, but it will really gather steam in 2016 and 2017 and last about five years.

Other divestments such as Vinci Park, there's nothing in the pipeline right now. I'm not going to talk about small companies, but nothing significant right now has been considered.

With regard to Vinci construction margin, Christian, would you like to add anything? No.

Because, you can say whatever you like really. If you always have companies that are making losses and others earning more money than others, all that in aggregate terms leads to result.

We certainly have had major losses in the UK and don't hope to see that again elsewhere. But you have to manage all of these as a whole.

It's true, in the last few years construction was at about 4% and now it's closer to 2.5%. So, how long will it take to reach what you call a normalized level?

Jerome, you'd like to add anything? I was smiling at Jerome because, of course, the margin in construction will improve gradually to ensure that it renews to its previous level, thanks to the fact that I mentioned earlier i.e.

what is tough to manage is a drop from a high level business to a low level of business. If we remain at a low level in France, margins will start to increase again.

I don't know if you understand me right, when I talk about a quantum leap. That's the way it works in our business lines.

So that was for the first question. There's a second question in French, and we'll take it now.

So the next question is from Nicolas Mora.

Good morning, gentlemen. I have a few questions, mostly for Christian in fact.

Just to shed light under EBIT in the income statement, what's happening in terms of equity accounting in terms of the financial income loss? Did you have an impact on H1?

Well, with respect to equity accounts for companies, there have been contributions from EDF and CCF. There had been a few losses last year in peripheral operations.

With respect to financial income, there was a small foreign exchange gain, but it's nothing very material.

So, more or less H1 can be extrapolated to H2.

Yes, in so far as results accounted for under the equity method are not seasonal. Yes, of course.

A small detail now about the order book. We agree that you don't include HUB [ph] in H1.

No, we won't.

Good news. And if we look at CapEx, investments in concessions, in particular ASF, I remembered that you had a rather aggressive approach for investments excluding the stimulus package for 2016-2017.

Has that been postponed somewhat since Q1 came to standstill with the negotiations on stimulus package? Are you heading for non-stimulus package CapEx plan will be quite moderate.

So what are, ASF's experts say?

No. We haven't slowed down our ambitions because of these negotiations.

That was, we continued with that regardless of the stimulus package.

So, what is it going to lead to in sequential terms for this year and next few years?

Does anybody know? Nicolas, we'll disclose the program, we can't remember it right now.

We're going to re-draw it anyway.

Very well, if I may, a last question about the outlook for France. We realize that residential housing seems to be improving, in particular among developers, but it seems far more uncertain in non-residential and infrastructure segments.

So, order intake seems to be heading back into the private sector. So apart from the major projects you mentioned, what are you expecting with respect to large projects and ongoing projects?

Well, rather [indiscernible] questions, what can I say? The projects I mentioned earlier, Samaritaine, Roland Garros, south, north, southwest, Orly transit, that of course is from the private sector.

RFS at Eurovia.

[indiscernible] Eurovia, is that private or public?

Nicolas, we've always answered we don't really know what the difference is now between private and public. Is the high-speed rail line public or private?

It's both. ADP, is it private or public?

EDF, is it private or public? In reality, the public sphere is shrinking and most of our customers are customers who keep a public connotation admittedly but their modus operandi is closer and closer to the private sector.

So this drawing a distinction between public and private sectors is not something we'll really use on a daily basis. It's more meaningless.

And the split between ongoing projects, do you believe that there's an improvement?

Well, as I was saying earlier, we believe what is taking shape is a move according to which municipal elected representatives have needed more time to decide what investments they wanted to make during their term of office, because of the budget problems they are facing. So that explains why they haven't launched major projects.

I'm talking about local authorities, and that affects Vinci Construction as well as Eurovia, Vinci Energies to a slight extent. That's why nothing much happened in H1 and in particular because our order intake sagged in H1, in Q1.

We have a feeling the situation is changing. And that feeling is fueled by the fact that more and more price estimates are being handed in, Eurovia for instance, but also Vinci Construction.

That leads us to believe that, in any event, we've probably bottomed out. Are things going to pick up to a slight extent or somewhat more significantly?

It's too early to say. But the trough in terms of overall order intake has certainly been reached in France.

When you look at order intake and contracting in H1, the decline mostly is with respect to large deals more than EUR50 million. The others for contracting as a whole have tended to increase.

Then you have to look at it in a more fine-tune manner. Some areas are more robust than others, but our core business is holding up well.

Our last question is in English. You can answer in French, will be interpreted into English, and you have headsets.

Hi, good morning. Thank you.

I've got one question. You mentioned in your opening remarks the IPO of Spie.

So, we can obviously all look at the margins there at 6.5%, it's a little bit ahead of where you are. I wanted to understand whether you think there's a difference structurally between your business, so, Vinci Energies, and Spie or whether there's any reason why you couldn't ultimately reach those types of margin levels?

The second question is on consolidation, and I think you mentioned it in energy. You obviously did some relatively large deals in that segment this year.

Can you give us a view of whether you're seeing similarly sized business? I think Imtech was close to a billion of revenues, or whether you are seeing a similar type of opportunity out there at this point in time.

And then finally, you may have answered this question but I may have missed it, but can you just give us a sense on French revenues in contracting? Obviously they're down this year.

But do you think they will actually be flat next year in 2016 or could they still be down because of obviously the lack of order intake? Thank you.

Is it easier to answer in English? Okay.

Okay. Yves really wants to answer the question about Spie margins.

Well, we've looked at that very closely, as you'll appreciate, it's a good benchmark. Spie, below, puts below its EBITDA everything they do in terms of restructuring and headcount adjustments.

However, in this business, restructuring, headcount adjustments is nothing exceptional. It's every day the life of our companies.

So we recalculated Spie's result Vinci Energies style. To be precise, it's 5.7%.

So we're fairly close. But nevertheless, it gives me the opportunity of putting a bit more pressure on Yves, so that his 5.6 that that threshold is exceeded.

On consolidation, I'll answer. I'm not at all sure, be it at Vinci Energies or in other contracting division, that we'll make major deals, major acquisitions.

Our DNA is more to do a higher number of more modest deals, save exception, when we acquired Sogelec it was an opportunity to good to be missed. But the future will be probably more made of a good quantity of deals, Imtech, Electrics, or Orteng a few hundred million in revenue rather than a mega-deal of a few billion Euros.

On the last question concerning stability, what I said, to be precise, is that all in all overall, France and international, order intake of H2 should be good and allow for a stabilization of a contracting business in 2016, even slight growth if it's boosted by M&A. I'm talking overall France and international.

And I can't answer more specifically for the simple reason which is once again compliance issues. We mustn't say things over and above what we indicated in our official releases, allowing everyone to have the same input at the same time.

Thank you very much.

Thank you.

Okay. No regrets, have a great holiday.

Enjoy the ride on our motorways of Vinci Autoroute, and the Vinci Autoroute service areas, great things are happening there. Thanks.