Henri Poupart-Lafarge - Chairman and Chief Executive Officer Selma Bekhechi - Investor Relations Marie-Jose Donsion - Chief Financial Officer and Senior Vice President, Finance

James Stettler - Barclays Gael de Bray - Deutsche Bank Ben Uglow - Morgan Stanley Jonathan Mounsey - Exane BNP Paribas Christophe Quarante - Société Générale Alfred Glaser - ODDO BHF Henri Poupart-Lafarge: Good morning, ladies and gentlemen. Welcome to our annual results conference call. I will go through the classical agenda and then we'll review the 2020 strategy. Just to let you know, as you probably have seen Marie-Jose Donsion has left -- will leave the company. So I'm today with Selma that you all know, and Selma will take over the financial part of the presentation as well as all the tough questions. So as a global introduction, and our results of this year, if I had to summarize our performance, I would say that this performance is totally in line with our strategy, and if I had to even to say that we are one year in advance as compared to our plans. One year in advance in terms of growth as our sales have grown by 10% organically, you know that our guidance, we're more 5% per year, so by doing 10% is like two years in one year, and that, as you have probably noticed as well, we have given a new guidance in terms of EBIT margin of 7% already this year. This year meaning ending March 2019 rather than 2020, which was obviously the previous target. So if you go line by line, the order intake at €7.2 billion, which confirms very wealthy backlog, very good backlog of €34.2 billion, sales have commented 10% organic growth at €8 billion, I think, it's symbolically we have reached €8 billion. Recall you that a few years ago we were only at €6 billion, so there is a granular year-after-year growth. And we are already insisting on the yearly performance, but I think it's fair to step back a little bit and look at several years and for several years in a row, we've actually exceeded the 5% organic growth. EBIT at 6.5%, ahead of our expectation. Again, we saw that we will reach gradually at 7% and we had two years to do so and I think, we'll -- as I said, we'll reach it this year. Positive free cash flow and therefore, very healthy balance sheet, so with equity now worth 4 billion. Altogether, we're going to propose a dividend of €0.35, which is a growth of 40%, as compared to last year. So I'll go now on the different items of the 2020 strategy. I just recall you the 2020 strategy which was relatively simple. The basic idea of 2020 strategy was just to say that our market is growing worldwide on the back of very, very sound fundamentals which is the mobility needs in the different countries and the different cities in the world, but we have to see that this growth is higher in emerging countries, in Asia, in Middle East or in Americas, rather than in Europe, even though it continues to grow in Europe. So we are to deploy and redeploy ourselves in order to capture this growth. That was the first element of the strategy. The second one was about the solutions. Boost because this was required by the customer and particularly the new customers, but also because it's a differentiator for us against other competitors which do not master the global systems, the global railway systems. So when we talk about solutions, we talk about systems we talk about automation, signaling, and we talk, of course, about services. Innovation was also a key differentiator, and we are not at all in the kind of commodity business. We are in a business which is innovating day after day and we want to be at the leading edge of this innovation, and of course, project execution, operational excellence, cost competitiveness. So this has paid off and if you look at our orders this year, of course, these orders are lower than the previous years, which were including very large orders, each year, last year, the years before. This year, there is no gigantic order. It's partially a coincidence and partially related to the fact that, as I mentioned it in the past, in the Middle East, the number of flat orders has been postponed due to the oil price and hopefully, with the oil price recovery, we'll see them coming back. The very good news is that we are entering into '18/'19 with a very strong pipeline, actually, a number of orders which are being discussed not yet booked, you probably have seen Montréal, what we call [indiscernible], which is a new line of Montréal. Interestingly by the way, this is the only turnkey, which has been -- last turnkey, I would say, which has been [ordered] this year. So we're particularly proud of being ordered this turnkey and this will come in our books only during this quarter. We have also, while discussing the company, we're discussing on TGV of the future as well. We're discussing on a number of opportunities, so the pipeline is much stronger than the 1 we had at the same time last year. So I think I was candid enough with most of you to tell that this year order will not be as strong as the previous year, but I can tell you that this year being March 2018 but from March 2019 we have much better visibility. The second piece of good news is that we were also, I think, candid enough to say that last year we were a little bit disappointed by the signaling order intake, and this year we are back to a much sounder level and we have increased our signaling order intake by 30%, which is, of course, very good news after a year which was a lower year last year. Some examples of orders again, nothing, I would say, particularly large in these orders. Some good success in Canada. Canada is moving very nicely in March 2019 and also in March 2019, because of [indiscernible]. Europe, again, continued to channel a number of orders, so fuel the growth. Interestingly, we talk about Senegal, I always say that Sub-Saharan Africa is probably one of the latest region of the world where we are not totally present. We are now filling this gap, with Senegal, with the Dakar trains, but also we are obviously seeing in Ivory Coast for the middle of Abidjan, so last some projects in Africa are being developed as well, and Asia approaching to be positive as well. So good mix of midsize orders, I would say. In terms of geographical reach, you know that we have continuously developed our workforce and resources, expertise, competences in the world, so now not only we are covering commercially the world, and we are in the top three of all the continents, depending on the year and on our last contract, we can be number one, number two, or number three, but we are now consistently top three on all the continents. And now I would say Europe represent 50% [indiscernible] of our activities, so it's much more balanced than in the past and in terms of employees, we have now significant numbers of employees in all our regions. In terms of solutions, here as well, good balance of the portfolio, very high growth of system this year, mainly due to two contracts, I will come back on that, but overall, we are close to our goal, which is to be 40% in rolling stock and 60% for services signaling and system, split 20%, 20%, 20%, where of all is there of course depending on the year it can change, but this is where we stand. So in more details, so we have some growth in rolling stock this year, but I would say, in line with our global growth of the company with some deliveries in Europe, the beginning of Amtrak, I'll come back to the project but it's going well, some trends in Algeria and of course PRASA which is also going on, huge growth in systems on the back on Dubai and Riyadh. Some steep growth in service, very -- as you know service is growing relatively slowly, because in terms of order intake, we have a very large order intake of service, including, again, this year, but these are long-term maintenance contract and therefore, in terms of sales, it takes a lot of time to really see the -- fuel the growth of our service activity in terms of sales. Signaling, here is a slight decrease on the back of freight and mining market conditions, particularly in the U.S., fair to recognize as well that last year, we didn't have a very fantastic commercial performance, as I said, but which have been totally recovered this year. So two snapshots on our two contracts of systems. So in Riyadh and in Dubai, I think this is, again, the sign of our nice project execution and the signs of our competence in System. Just one word to give you some flavor about that. Clearly, in Riyadh, we are starting to test the metro, and we are powered the frequent structure in Riyadh and we're being the first one out of the three consultants to actually have some trains running in Riyadh, of course, on test but still running in Riyadh. And as far Dubai is concerned, we have launched the production in captivity, so I think that's going according to schedule and again, these are extremely complex project, of course, but these are projects which are really at the heart of our know-how. And again, which explain why we have been awarded the high contracting in Montréal. Continuing to invest in R&D, of course, I've mentioned it in the past, we announced 5 years ago the complete renewal of our rolling stock ranges starting from Tram, then metro, regional trains and, of course, now we are on high speed with the famous [indiscernible] continuing to invest in smart mobility and of course, continuing to invest in digital technology, in particular, on productivity maintenance. This year there have been two remarkable events on innovation which has attracted a lot of attention and I think, rightly so. The first one which is our hydrogen train, which has been awarded by the way GreenTec mobility prize in Munich, and which has added first service with passengers. So it's not a normal service, but it has been authorized to carry passengers on, in Germany. We have also, I would say, announced a new hybrid vehicle which is alpha between a bus and tram, which is also attracting a lot of positive attention and where we see, saw that as well, for I would say our first participation to the Busworld, the innovation award of the Busworld. I think this shows the nice innovation capacity of Alstom. I think as well that we were pretty lucky because we have launched these two vehicles at a time where diesel is becoming head of the evil of transportation and it took two years to, for diesel to become the really bad technology. If you want to make a pilot to do a [indiscernible] pilot with coal a little bit for energy, it took probably 10, 20 years for coal to really be banned from energy. Now diesel is going to be banned much more happily and it happened that we come on the market precisely with solutions to replace diesel with hydrogen train, to replace diesel trains, of course, the electrical bus to replace diesel buses, so two very nice innovations. All that can only, I would say, matter if we also execute and deliver our performance, just to remind you the past years. So since the last four years we have moved nicely from €300 million adjusted EBIT to more than €500 million adjusted EBIT, nice growth of the profitability. What is important is that I remember when I talked to you in March 2015, when we launched the project, we said that there were three drivers for our margin improvement, one, which was the portfolio, one, which was volume and the third one, which was operational excellence. I think in terms of portfolio, as I told you, we are more or less where we want to be. In terms of volume, we benefited a lot from the volume and will continue to do so. Now what is really impacting the margin this year is the operational excellence which is a combination of competitiveness, notably, thanks to this renewal of our platforms as well as good project execution. And if we've delivered this year the level of sales that we have delivered, probably beyond some of your expectations, it is precisely because we have perfectly delivered our projects, and therefore, all of my stones have been hit on time and that the machine, if I may say, has delivered all what was supposed to be delivered and this has fueled a lot the growth. In terms of operational excellence, as you know, we are working a lot with our suppliers, global sourcing, alliance, so the idea is not just to have a kind of battlefield with the suppliers, but to try to partner with them. And as you know, India is playing a small in our global footprint in terms of competitiveness, and we are continuing to ramp up our activities in India, with more than 3,300 people including 1,500 engineers in Bangalore. So very fast ramp up of our Indian activities which is bringing a lot of fruit. In terms of projects, as I said, extremely important to deliver our projects. I know I would say flagships in addition to Riyadh and Dubai. PRASA is moving nicely, as you know, you've followed that year after year, so we design the trains, we produced the first trains in Brazil, this is all behind us. So now we're really in the South African industrial scheme and the first trains will be delivered by South Africa this year and will come in revenue service by the end of the year. So the factory is completed, the production has started both in Gibela and in our other factory which we call Ubunye, and the trains will be delivered from South Africa. So we have, really now derisked, if I may say, this contract. We are starting to be in sale production in South Africa which is the ultimate goal of this project. Madhepura, very, very nice achievement, frankly, very, very nice achievement of all our teams. We have, two years after the contract, delivered our first locomotive from India, directly from the new factory in Madhepura in India. I think this Indian project is, I would say, combines all the competence of Alstom in terms of transfer of technology, in terms of localization, in terms of technology, so this is an extremely nice achievement. On Amtrak, so far, so good, earlier stage, obviously, but we are starting to assemble the prototype. So the if the engineering goes well, as I also explained in the past this is a very high-tech product, so there's no such localization, I would say challenge, even though because of the Buy American Act, this would be entirely produced in the U.S., but the challenges, of course, the challenge is mostly technological. And so far, so good, engineering is progressing well, and we are on time. Order activities, continued work environment, continued work on the energy consumption. Safety, as well as I could say that, and I'm particularly pleased about it, we are in advance as compared to our plan, 2 years in advance, because our 2020 goal was to reach IFR1 of 1 in 2020, and actually, we've reached it this year, March 2018, and we have moved in 4, 5 years from 3.4 to 1, so it's remarkable, I would say, an improvement of safety at work. All that can only be, I would say, achieved, thanks to our people and our teams, we are working on diversity. I'm not saying here that I'm totally satisfied with where we are. We're improving with the agenda of diversity, with the nice term, but we have a lot to be done. So thank you for your attention. Now I'll move to Selma after having mentioned, of course, all our certification in Dow Jones or what is the disclosure anti-corruption, anti-bribery and so forth. So Selma, floor is yours.

Thank you, Henri, good morning, everybody. So starting with the P&L on Page 22 and moving straight to the items below the adjusted EBIT lines. We had €47 million restructuring charges, driven by footprint rationalization and competitiveness initiatives, notably in the United Kingdom, the USA and Brazil. Other charges of €86 million included amortization of intangible assets and integration costs related to business combinations such as SSL, GE Signaling and Nomand that were reduced to 25 million this year. In other charges or as well some transaction cost related to the Siemens-Alstom deal amounted to 39 million. The financial result decreased to €91 million compared to €127 million last year. This is consistent with the decrease in the gross financial debt resulting from the repayment of bonds which have matured. On the income tax rate, the group recorded tax charge of €73 million this year, so it corresponds to an ETA of 25% compared to 33% last year, and this improvement came mainly from a favorable environment in France and U.S.A. And we expect to maintain a stable level in the tax rate in the future. Sharing net income of equity invested amounted to €216 million, mainly as a result of the re-measurement amount of the put option in the energy JVs. We also benefited from the improved performance of TMH and CASCO. Net income of discontinued operation amounted to €52 million, mainly due to the re-measurement of certain tax risks. As a result, the net income group share amounted to €475 million this year, compared to €289 million last year. Moving to Slide 23 on free cash flow. The group free cash flow was positive this year at €128 million, benefiting from the impact of a cash purchase program. The working cap was globally stable, variation being within the classical short-term volatility. The free cash flow was also impacted by the ramp up of the transformation CapEx that we will detail just right now, on Page 24. Alstom invested €202 million in CapEx this year, in order to strengthen its global footprint in the emerging market, while modernizing its existing facilities. This including transmission CapEx at €108 million. So group has continued the construction of the manufacturing site, notably in India, Madhepura in South Africa, [indiscernible] as well as the extension of the on-air site in the U.S.A to sales [indiscernible] project. As end of March 2018, the accumulated amount of transformation CapEx already spent represented €159 million out of the €300 million envelop we've indicated you during the Analyst Day. Moving to liquidity and gross debt on Slide 25. So the group had a gross cash in hand of €106 billion at the end of March 2018. In addition to this available €102 billion cash and cash equivalents, Alstom can access €400 million revolving credit facility maturing in June 2022, and which is obviously free hand run. In addition, the put options in the energy JV with GE provide additional flexibility. On 9 May 2018, Alstom signed an agreement with GE relating to the implementation of the agreements of 2015 regarding the exit of Alstom from this field energy JVs. The transfer of all interests, we look you on 2nd of October 2018 for a total amount of €2.6 billion. Regarding the gross debt, Alstom outstanding bonds amounted to €1.2 billion at end of March. The October 2017 maturity of roughly €300 million has been reimbursed, and the next maturity is now in October of this year for almost €400 million. On Slide 26, [indiscernible] stock net debt remained roughly stable over the period at €255 million at the end of March compared to €208 million last year. This evolution resulting mainly from a positive free cash flow of €128 million in the relative period. €104 million acquisition and disposables, including notably some GE-related separation impact, the ISIT cash-out, as well as advanced payment on the EKZ shares. €47 million increase, including the Indian railways contribution to Madhepura capital as well as some stock option subscription, dividends of €60 million and lastly, Forex and others of €58 million. Moving now to the equity on Slide 27. The equity reached €4 billion at the end of this fiscal year from €3.7 billion last year. It was mostly impacted by a net income of €475 million group share. Variation of pensions of €55 million net of tax, dividends paid to shareholders of €55 million. Share-based payment of €55 million and Forex and others of €220 million. Last, moving to Slide 28 an update on IFRS 15 implementation, the new standard for revenue recognition. It will be effective for Alstom from the fiscal year 2018, '19 and we have elected full retrospective method. There is no impact on the cash position and no impact at completion on the economics. However, there is a change in percentage of completion methods. Currently, Alstom is trading revenues on milestones. With a new standard, Alstom will apply cost-to-cost to recognize revenues. Hence we expect some timing effects on the revenue and profit recognition. GST estimated impacts, a reduction of equity at transition of roughly €450 million, while the order backlog is expected to increase of more than €2 billion, and reach around €36.9 billion at 1st of April of 2017. Again, there is no impact on cumulative profit or cash generation recognized over contract lifecycle, just some timing effect. Thank you, everyone. Henri Poupart-Lafarge: Thank you, Selma. So in terms of outlook, I think I mentioned it already. So we are updating our guidance, and we are of course including all consequences of IFRS 15 changes by having new guidance of around €8 billion of sales in 2019. This year, we have a goal of 10%, so I would say we have done two years in one year, so we should see the €8 billion, I would say, number as in line and consistent with our global trajectory. And again, the adjusted EBIT is at -- expected at 7% in March 2019 rather than March 2020. In the medium term, of course now this semester and this is the next chapter, we are projected this merger with Siemens for the medium term, just a global guidance on our positioning on the market. And this medium term is continue to outperform the market goals as we have done consistently in the last six years, always above the market growth, continue to improve our profitability as well done consistently in the last six years and of course continue to improve the cash generation. Nice condition to the Siemens Alstom project. Where do we stand? Things are moving according to plan, to schedule. So we have of course signed first Memorandum of Understanding, you’ll recall on the September 26th. Then we signed the contract itself, which we call the DTA on last 23rd. Then this DTA has to be approved by Alstom shareholders on July 17th. And we target to close the operation by the end of 2018. In the meantime, of course, we need to get all antitrust events cancelled in the world in a number of jurisdictions of course, including Europe. We have announced yesterday night the new future board of course subject to the completion of the deal. So I will not go into the details of each member. We have six independent members and we have five women out of the 11 member. So if you take me out of the board, then it’s a perfect match. I think this is a group of people which are combining of experience, global experience and also, I would say, by activities in the whole finance, HR, compliance experience. So I am extremely pleased with this new board, and we’ll be looking forward to working with all of them. We are also progressing in terms of targeting our ways of clocking. And as you know, it is really important we are competitor up until the day one of the new company. So we can work on the organization and regional processes, but certainly not on business related matters. And we have decided to adopt a log ingestion, which is based upon the three main pillar, first I would say the intimacy with customers and with the new scope we’ll be even more intimate and closer to all the customers in the world with all our -- with our last footprint and extremely diverse footprint. We want to put a strong emphasis on digitization. I mean if we do this merger, as you know, this is primarily to address the new mobility and the new digital technologies. So we’ll put some emphasis on this decision with a strong organization in charge of this particular matter. And then of course all that makes only sense if we adopt the same ways of clocking, the same processes, and if we have standard platform. So we have also two main functions, which we’ve been charged with high platform and operational excellence, which basically as a two functions, which will be in charge of having the synergy between the two groups. So in a nutshell, I think if I have to look back at ’17, ’18, this has been a fantastic year for Alstom. I think we have achieved or close to complete 2020 strategy, which we have announced a few years ago, which was one very important phase for the group, which was the globalization of the group, which was to put some sound base for worldwide in order to take advantage of this strong market. And in the same time, we launched an extremely exciting and positive strategic move together with Siemens and we are projecting this. So I think ’17, ’18 will probably remain exploratory as one of the key year for Alstom. So thank you very much. And now I’m available for your questions.

[Operator Instructions] The first question is coming from James Stettler calling from Barclays. Please go ahead.

My one question just is on the time schedule. I mean look like you’re doing everything you can from your side to get the merger done. Is there anything you see out there, which could delay the process? And can you maybe talk about in terms of the antitrust approval process from here? Thank you. Henri Poupart-Lafarge: I mean, you are right to point out that the demand -- and actually the only remaining process to be completed is the antitrust process, but it is not done. We target to complete this transaction by end of December. We have a good pool and rich conversation with a number of jurisdictions in the world. This is still got some uncertainty, particularly in these kinds of processes. But today we are in line and with our plan, which was announced at the beginning of the project.

Thanks. And I’ll now go to Gael de Bray coming from Deutsche Bank. Please go ahead.

Could you perhaps elaborate on the Group’s operating leverage please? Because the incremental margin was only about 13% in the second half, despite a very strong growth achieved over the same period of time, probably around 15% organically. I’m asking question, because you’re now guiding for an additional 15 bps margin increase on relatively flat sales. So I am just trying to reconcile a little bit what’s going on there. And if I can add a little bit to this question, also on the guidance, but this time for the €8 billion revenue guidance. I mean is the implicit lack of growth mainly due to the difficult comparison basis after the exception and the Q4 performance, or is it more related to IFRS and perhaps a bit due to FX? Thanks. Henri Poupart-Lafarge: So on your first question I think you need to look at year-on-year comparison. And if you look at year-on-year comparison, you will see that, as I said, it's now mixed impact, but also its operational excellence. And therefore, we have less, probably leverage on the gross. And we see more, I would say, gross margin, if I can put it like that, impact. So yes, what we have put in place and your analysis is correct, year-on-year we’ve got to put in place. The driver for margin enhancements is more related to competitiveness and more related to operational excellence rather pure goals. That's why we can anticipate continuous growth in profit, even though the sales will be around €8 billion. On your second question, I think it's -- I don't have the complete answer to your question, let me tell you something. First yes, the comparison is high and higher than what we anticipated, that you anticipated as well and that we anticipated as well, because our sales are higher than our own expectations. So yes, the basis of comparison is probably higher than. And if we have done 5% EPS, then you will see 5 and 5, and you’d have been happy with that. There it's a 10 deal and this is in a way modeling the 5 and 5, but that's -- you're right, I mean the fact that the base is higher than what we anticipated. Then on the IFRS-15 and maybe some questions about that. We would never know, because we have worked internally on IFRS-15 projection. What would have been on the old rules, nobody would ever know, it's the -- the elements, basically that's little bit of accounting technicality. Normally, there is no impact, because at the end of the contract, of course, the same value of sales and therefore there is no impact. There is a surging impact, because usually at the beginning of a contract, IFRS-15 is less, as I say, let's say the little of net sales than IAS-11 and at the end of the contract it delivers. So if you look at the global portfolio of Alstom, you would say that as we are growing probably that -- IFRS-16 would have had negative impact in the previous year. I would say that for '18-'19 that we’ll have no significant impact. So maybe a little bit, but again never know, because we never produced any IAS-11 sales this year, maybe a small negative impact but un-significant. And so I would say, the answer to your question is first, maybe some impact IFRS-16, I don't know and I don't estimate it as being significant.

Thank you. Now I will go to Mr. James Moore calling from Redburn. Please go ahead, your line is open.

I wonder if you can get back to the December time table you mentioned. I think your lawyers presented in a general forum not regarding you, but general topics earlier this year, the phase one. So taking three to five months, phase two is about a year. Is there anything that gives you confidence on December? It seems quite a short time frame, and I don’t think you’ve yet filed of the European Commission, correct me if I'm wrong. And can you explain why you haven't filed yet, and when we should expect it? Henri Poupart-Lafarge: I will not go into the details of our conversation with the European Commission. And I don’t view with -- I mean I don’t know which lawyer have given that. But there are some official deadlines for phase one and phase one, which are much softer. I mean I think phase one is 35 days, so it’s much softer. The question is to complete the file. I think regardless about this official date, it's more important that the European Commission is satisfied with information that we are giving to them. And we give them pre-filing, or doing this filing, or after -- between phase one or in phase two, that does really matter. Then phase two is not one year, it’s also down in -- I think its four months. So I think the timing is shorter and what you are mentioning, and that's why we are still on track for the end of December closing. Now as I said to James, I mean it's clear that I need to be cautious. I mean these processors are long and complex, and I am not going out any of during these processors, this is time wise of course. But today there is no reason to project differently than what we did in the past.

Thank you. We’ll now move to Ben Uglow calling in from Morgan Stanley. Please go ahead.

So first of all, Henri, I just want to makes sure I understood your answer to previous question. In terms of the organic growth that you are thinking about this year, is it correct for us to assume that you are thinking of around zero? I mean, I know that's implied in the number. But is that actually correct that you’re not really expecting significant organic growth this year? So that was the first question. Secondly, just could you quantify a little bit, and maybe to be a bit more specific about the operational excellence issue. You’ve had 70 basis points year-on-year margin expansion, roughly 90 million. Are we correct to assume that the majority of that increase has come from operational excellence specifically? Henri Poupart-Lafarge: It may sound a little bit complex and that's why we have tied but unsuccessfully to try to simplify the work by giving an absolute number in terms of sales has organic growth. And why is that, because we are talking IFR-15 for next year, and you want to compare with number of this year, which is not under IFRS-16. So the question is what growth do you want to I would say, to put in your model. I mean, if you want to compare €8 billion with this year or being repeated. First, we have not given any number, because we have not finalized the right treatment of the flow of the current year. And therefore, I’m not the one, I didn’t launch this IFRS-16. But to talk about organic is a little bit complex at that stage. We will see what could be the right treatment of ’17, ’18 under IFRS-16, and we’ll see what would be the comparison. My gut feeling at that stage, as I said is that, €8 billion is absolute number for next year as we projected internally under IFRS-16. There may be a slight negative impact this year, as I said as well, under IFRS-16 as compared to ’18. So you will see some kind of growth. But again I’d rather now start from base start and look at our €8 billion as being the year for next year, but there are accounting impacts. I would say this probably a little bit logic of the organic growth for itself. So that’s why -- again there is -- the comparison between the IFRS-16 and IAS-11 is not equal year-after-year. It would be simple if you add €200 million difference between IFRS-16 and IAS-11, but this is not what’s happening. So the growth under IAS-11 is not the same as the growth under IFRS-16. And that’s why I think there is also what is the absolute growth and it’s not the same it goes, if we discuss under one accounting standard and overall company standard. In terms of operational, I would say that this year the 70 bps it’s most at us between operational excellence and growth. It’s also let’s say, 35-35. As I told you next year, we think that we are going to continue to increase more at the operational level to remove between 35 to 50 in rough number to get between 6.5% to 7%.

The next question is coming from Mr. Jonathan Mounsey calling in from Exane BNP Paribas. Please go ahead.

Just a couple please just on the CapEx. So have the -- just the balance of the €300 million of transformation CapEx, I don’t have other people’s numbers. But it feels like the signals for that came in a bit lower this year than I was expecting. And can we expect then the CapEx maybe little higher than we previously thought this year? And then secondly, just on the pipeline. I mean it does look very strong, particularly the case of TGV in the future. Have you got any comments on what maybe the first tranche of may look like? I think overall it’s like 100 train sets. But how much it we likely to get in the first order, please? Henri Poupart-Lafarge: On the CapEx, we are more or less in line with our expectation. So we announced at the time that the three year of exceptional CapEx, we are in the second year of the exceptional one. And we have still next year some exceptional CapEx to come, so we’ll reach our target. You remember that we’ve got 300 globally, and we have today to around more than 60 sets so we have little bit more than 100 remaining to come, most of it next year. But I think we are on track. In terms of TGV, I think -- I mean there have been some number posting around in the press. So we are still finalizing the contract. Of course, we have the debt and discussing the details of -- technical details, the numbers which have been announced in the press were around 100, and this is one time that we’ll be 1.5.

We’ll now move to Mr. Christophe Quarante calling in from Société Générale. Please go ahead.

Three questions, if I may, first one is about the orders. Could you give us your view about trends year-on-year as you give us, last year -- you gave us last year, a good indicator. And could you -- just an idea or color of what’s going on here and what could be the landing point for this fiscal year 2018 or 2019? The second question, if I may ask, could you turn back on the mix that has maybe also had an impact on your profitability, and if I am correct due to the signaling coming back. Is it fair to assume that you may also reserve good surprise for this fiscal year? And lastly, did you see any change into your competitive environment currently? Thanks a lot. Henri Poupart-Lafarge: So, no. In terms of order intake, we don’t give any guidance, because of course we were discussing actually this year because of the events in antitrust and so forth. This has been little bit delayed. And if we have to book that before end of March, this would have had a tremendous impact on our order intake. So we’ll add three years at around €10 billion each of three years, we’re including the one very last contract of more than €2 billion, €2.5 billion, €3 billion. This year, we don’t add it and it goes to €7 billion. I don’t know if we can draw a conclusion that it’s €7 billion plus very last contract, I don’t know. But we have a strong pipeline and we have sustained activity. So I don’t think we can give any guidance there, but again the pipeline is good. On your second point of mix, no, I mean there’ve been very strong growth of system. So all-in-all, I would say, the share of the holding stock has remained mostly the same. So last year, there were two years of stand, this is not too many, this year little bit that too many most stand, maybe next year it would deliver. So we don’t expect any more in here mix impact where we should be. So that’s -- yes, signaling will comeback as we said, but at the same time, as I said, system was particularly high this year. So it may compensate in the future. In terms of competitive environment, frankly, I don’t see any major move. We discussed a number of trends in the past. They’re still there. We still have a global competition, globalization. We have been the one, Siemens and Alstom, was moved -- project to move but in terms of competitive behavior, I think no major revolution.

We’ll now go to Mr. Alfred Glaser calling it today from ODDO. Please go ahead.

I wanted to come back on free cash flow. You’ve had a very strong first half and negative second half. Could you give us a bit an outlook on free cash flow generation going forward, and on the transformation of earnings into free cash flow please? Henri Poupart-Lafarge: Yes, I mean this illustrates the volatility of the cash flow. One element of that is of course the order intake. I mean, we have three year down payment and lower level of order intake of course, so system go up and down. We still have, and this explains, I would say, the structural difference between our cash flow generation and our profitability is the transformation CapEx. Of course, we have a high CapEx this year of more than €200 million, which is much higher than recurring level so this explains also structurally. Finally, we still have so strong, I would say, exceptional expense due to our deal, particularly on the new one, so this explains also a little bit. But overall, I think what is mostly important for me is the working capital evolution. And frankly in the last year and including this year, we have managed to stabilize working capital and which is, as you know, my goal so that’s when we have finished with the exceptional CapEx. This is our guidance and this is our target. We deliver on cash, our profitability and we have done that. And the fact that we have improved last year a little bit working capital that we have deteriorated a little bit this year of capital when we talk about €50 million, frankly with the size of our working capital, this is extremely small number. I think overall we have, in this last year, achieved our target which is to have a stable working capital. I think this was ending our conversation. So thank you very much for your time. And we happy to meet some of you soon, we have the shareholder meeting on July 17th for those of you who are interested. And we have July 19th, the Q1 orders and sales. And of course in meantime, Selma and Julien are here to answer to all the other questions. Thanks a lot. Have a nice day.