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Edited Transcript of IMPN.S earnings conference call or presentation 19-Aug-20 6:30am GMT

Half Year 2020 Implenia AG Earnings Presentation

Wallisellen Sep 23, 2020 (Thomson StreetEvents) -- Edited Transcript of Implenia AG earnings conference call or presentation Wednesday, August 19, 2020 at 6:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* André Wyss

Implenia AG - CEO

* Marco Dirren

Implenia AG - CFO

* Silvan Merki

Implenia AG - Chief Communications Officer

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Presentation

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Silvan Merki, Implenia AG - Chief Communications Officer [1]

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Ladies and gentlemen, good morning, and welcome to the analyst and media webcast according to the half year report 2020 of Implenia. My name is Silvan Merki in the function of Chief Communications Officer.

We will hold our presentation in English. However, you are kindly invited to ask your questions via our chat function directly and during or after the presentation in this webcast. You could do it in English or in German, whatever you feel more comfortable with. We are collecting your questions, and we'll answer them after the presentation.

Before we start with the conference, first, I would like to draw your attention on our disclaimer that you find presented here. I won't read down everything, just this, during today, forward-looking statements may be made. Such statements involve certain risks that could not be predicted with reasonable assurance. Implenia assumes no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

One second remark, you will find already the slides and media release shown today on our website.

And third, if you wish to speak our CEO after presentation for interviews or one-to-one's, please reach out to our communications team as usual, and we will organize.

And now let us start. I'll hand over to Implenia's CEO, André Wyss. André?

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André Wyss, Implenia AG - CEO [2]

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Thank you, Silvan. Also a very warm welcome from my side. Before I go into the details of today's presentation, I would like to start by summarizing the main highlights. For the first half year, Implenia reports an increase of 39% in EBITDA to CHF 101.6 million. The positive effect of the successful Ina Invest transaction overcompensated a negative COVID-19 impact. Before COVID, all divisions met expectations and contributed to the good result, except the business unit civil of the Division Civil Engineering.

The impact of the strategy implementation is as planned, and we further sharpened and accelerated selected initiatives in the context of COVID-19. Last but not least, we confirm our guidance on group level before any COVID-19 impact.

We will now present our results for the first half year 2020 as follows: first, I will give you a business update of the group and its divisions; then our CFO, Marco Dirren, will provide a more detailed summary of the financials before I share a strategy update and outlook. We will be happy to answer any questions at the end of the presentation.

Now let's get started with the business update of the Implenia Group and its divisions. The group delivered a strong EBITDA for the first half year 2020 despite COVID. At CHF 6.2 billion, Implenia's order book remains at the high level and continues to be well diversified across divisions and countries. This further increased quality, thanks to our profitability-focused value assurance framework. While we managed to acquire remarkable lighthouse projects, mainly in the Division Buildings, the revenue was impacted by COVID-19 and decreased by roughly 12% to CHF 1.9 billion.

The impact of COVID on EBITDA due to volume shifts, decreased productivity and increased costs was approximately CHF 37 million in the first half year. Thanks to the successful Ina Invest transaction, we managed to overcompensate this negative impact and generated an EBITDA of CHF 101.6 million. All in all, the underlying performance of all divisions met expectations, except business unit civil of the Civil Engineering division where measures have already been taken.

I will now talk about the performance of each of our 4 divisions, the divisions: Development, Buildings, Civil Engineering and Specialties.

Let us start with Development. The division continued its strong performance and transferred half of its portfolio at market value to Ina Invest, where it will be developed in close collaboration with Implenia. This transaction led to a revaluation gain with an EBITDA effect of CHF 107.1 million. As you remember, Development contributed significantly to the result also in previous years. This planned contribution for this year as well as a significant part from the next 2 years of development is reflected in the Ina Invest transaction. The division invested even more than last year in its own portfolio in attractive locations. Development will continue as a trade developer to invest and develop an attractive portfolio while also offering real estate services.

The successful Ina Invest transaction builds a strong basis for value creation. First of all, it already created immediate shareholder value as the share price increased both directly after the announcement of the transaction as well as even after the spin-off.

Second, the transaction enabled a onetime revaluation gain of the transferred portfolio and, therefore, an accelerated EBITDA realization of a significant part of the planned development EBITDA from 2020 to 2022.

Third, the strategic partnership with Ina Invest will unlock incremental value over time and was successfully launched as Implenia was commissioned to realize 4 projects of Ina Invest's initial development portfolio.

Last but not least, Implenia will benefit from new increasing earnings with a positive impact on equity from real estate services provided for Ina Invest as well as from the expected dividends of its participation as a shareholder in Ina Invest.

In the Buildings division, the order book is of strong quality due to a focus on new contract models and the profitability-oriented value assurance framework. The order book was strengthened, for example, by recent acquisitions of new lighthouse projects in Switzerland and first assignments from Ina Invest. Revenue slightly decreased, mainly due to temporary closures of construction sites in Switzerland and Austria because of COVID-19.

Without COVID, the division delivered a solid performance from its underlying business, broadly in line with the previous year across all service offerings. The division continues to expand its value chain with a growing focus on the preconstruction phases in order to be a client-centric total solution provider.

Also, in the Division Civil Engineering, the order book remains at the high level, while revenue decreased, driven by temporary site closures due to COVID-19. The performance of the business units, tunneling and special foundations meets expectations. In the business unit, civil, however, challenges were accentuated by the most significant COVID-19 impact across the group, such as temporarily closed sites and lower productivity due to infection-prevention measures and interrupted supply chains.

Because of these challenges, the implementation of our strategic initiatives has been accelerated in the business unit civil based on 3 pillars. For each market, a specific project target portfolio has been defined with a clear focus on profitability. Then, the organizational structure of the business unit civil has been redesigned along Implenia's core competencies in order to create synergies and improve profitability. A potential decrease of assets and the rightsizing of the workforce might be part of this.

And third, project excellence and delivery will be improved with consistent use of further enhanced controlling instruments, process alignment, risk management, knowledge sharing and talent development.

In the Division Specialties, the order book significantly increased by almost 20%, thanks to several acquisition highlights across the units. At the same time, revenue decreased as COVID-19 had a significant negative impact on some units like gravel production, for example. The division, however, still delivered a solid performance from the underlying business broadly in line with the previous year, especially in construction logistics, building technology services and facades.

The Implenia Innovation Hub is now successfully anchored, and first business ideas are being piloted in the field. Looking ahead, the division will align its portfolio to shape change in the construction industry with a focus on innovative services and solution.

I will now hand over to our CFO, Marco Dirren, to provide a more detailed summary of the financials. Marco?

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Marco Dirren, Implenia AG - CFO [3]

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Thank you, André. Let's have a closer look at the financial details. As mentioned by André, the underlying performance of all divisions met expectations pre-COVID-19, except the business unit civil of the Division Civil Engineering.

Focusing on the variances to prior year, I'd like to highlight the EBITDA from Development and the revenue decrease mainly from the Division Buildings and the Division Civil Engineering. The expected EBITDA from Development was increased by the successful Ina Invest transaction.

The revenue decrease of the Division Buildings and the Division Civil Engineering was mainly driven by COVID-19. And for the Division Buildings, this was the main reason for the variance on EBITDA level too. For the Division Civil Engineering, the main reasons were the COVID-19 effect. Hence, the challenges in the business unit civil of the division. Overall, the EBITDA margin increased by 2%.

Our consolidated profit for the first half year rose over CHF 53 million to CHF 53.6 million. Looking at the reported EBITDA, we had 2 major influencing factors. The cash-neutral Ina Invest transaction has extraordinarily increased the result, and COVID-19 has deteriorated the half year result by approximately CHF 37 million. Deducting the depreciation from the EBITDA, we achieved an operating income of CHF 52.2 million, up from CHF 9.3 million compared to previous year. As indicated last year, the PPA amortization has come to an end. The financial result is as expected, and the positive tax impact is due to the tax-neutral dividend in kind from the Ina Invest transaction.

Let's now have a look at the EBITDA development by the Ina Invest transaction in more detail. The full year EBITDA impact of the Ina Invest transaction is CHF 107 million. This includes the planned full year EBITDA of CHF 58.6 million from the underlying business from the Division Development. The incremental and, therefore, onetime impact on EBITDA level is CHF 48.5 million, which is at the upper range of our guidance from the Capital Market Day earlier this year. Keep in mind that the Ina Invest transaction has unlocked new increasing earning streams for Implenia for the future.

With regards to the balance sheet, I would like to, first and foremost, highlight our continuing high level of cash and cash equivalents. The decrease in real estate transactions stems from the Ina Invest transaction. As already mentioned by André, Implenia has further invested more than CHF 28 million in its own development portfolio. The position of goodwill has only been impacted by currency effects. While the rights of use from leases are unchanged, the other noncurrent assets increased due to the participation in Ina Invest Limited.

Now turning to the liability and equity side of the balance sheet. I would like to highlight the following: the change in trade payables is clearly linked to the decrease of the production output compared to last year. Regarding the other current liabilities, 2 effects are of importance: First, project provisions related to the Ina Invest transaction led to an increase; and second, the liability from joint ventures increased.

With regards to the long-term financial liabilities, no significant changes occurred in the first half year of 2020. Because of COVID-19, the negative FX impact and the issuance of the dividend in kind of the Ina Invest transaction, the equity of Implenia decreased to CHF 502.5 million. Therefore, the reported equity ratio has temporarily decreased to 16.7%. This temporary decrease is due to 3 extraordinary effects: COVID-19 with approximately CHF 37 million, the FX effect with CHF 12 million and the Ina Invest transaction with CHF 9.6 million. These effects explain most of the decline of the equity ratio.

Looking at the upside potential and the outlook with regards to our equity ratio, one would need to take at least 4 factors into account. The upside potential from the remaining Development portfolio would lead to an equity ratio of clearly above 20%. As always, the positive impact of our subordinated convertible bonds had not been reflected, which would account for more than 5%. Additionally, the planned divestment of selected noncore activities as well as the externalization of asset-heavy activities was sharpened with the intent to accelerate the equity ratio improvements in the future. Lastly, we expect new increasing earnings from service offerings to Ina Invest and dividends from the 42.5% shareholder participation of the Ina Invest Limited.

Now turning to the free cash flow. As mentioned before, we have a continuing high level of cash and cash equivalents. Nonetheless, to counteract the effects of COVID-19, we've implemented a strict cash regime. This helped us to better manage the seasonality-driven decrease in net working capital, which improved by over CHF 24 million.

The cash flow from operating activities was mainly impacted by the cash-neutral Ina Invest transaction. Implenia transferred projects in scope to Ina Invest rather than generating cash in by selling them.

And now before handing back to André, let's enjoy a video of some of our projects and of what we do for our clients every day on our construction sites.

(presentation)

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André Wyss, Implenia AG - CEO [4]

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Now let me share an update on where we stand with regards to our strategy and provide an outlook on our markets. For our home markets, the most recent market size prediction remains positive. The expected growth of total construction output of plus 1.1% across Europe was revised to a decline of minus 11.5% for 2020. However, European construction output is expected to recover in 2021, with approximately a plus of 6% growth and continue to grow in 2022 with plus 3%, with some of our home markets like Norway showing an even stronger anticipated growth rates.

The impact of our strategic priorities is as planned. In our strategic priority portfolio, we have further sharpened our organic and inorganic portfolio initiatives along the value chain with the successful Ina Invest transaction as a recent highlight.

With regards to profitable growth, the Value Assurance approach is now applied to all projects. In addition, the digitalization and process harmonization initiative, INSPIRE, as well as Procurement Excellence and our BIM and Lean Construction programs are on track.

In terms of innovation, Implenia is currently focusing on industrialized construction methods as well as on standardized real estate and infrastructure products. First ideas from the Innovation Hub are now being field tested.

And with regards to talent and organization, the operating model has been proven to be fully effective even more so during the pandemic, and it's supported by a strong leadership and corporate culture based on 5 Implenia values: agility, excellence, collaboration, integrity and sustainability.

In the context of the pandemic, we have even sharpened and accelerated the implementation of selected initiatives along those 4 priorities. For example, we now move even faster and more rigorous with our best owner assessments with the divestment of selected noncore activities, with the externalization of asset-heavy activities or our cost management. These initiatives and our strategic priorities will allow us to become an integrated multinational leader in construction services.

As you see in this chart, we want to be a client-centric total solution provider with a growing focus on the preconstruction phases. As such, the share of our own Implenia activities will increase in the project initiation, conception, concretization and usage phases. At the same time, our share of own activities in the project realization phase will decrease as we intend to use more subcontractors for nonstrategic work.

For our clients, we will offer end-to-end planning and construction management expertise and services for large and complex projects. We aim to do this in a model that offers high flexibility to integrate strategic internal as well as external capabilities, and thereby, optimizing our asset needs.

While we generally remain optimistic about the market outlook, COVID-19 had and will most likely continue to have an impact on our performance. In order to protect Implenia's people, business and reputation, we have established global and country task forces since February this year. These task forces ensured that all our construction sites are fully compliant with governmental directives and can be operated in a safe way in order to protect the health of our employees and proactively communicate with unions, industry associations, clients, subcontractors and suppliers to keep our construction sites open and up and running.

The resulting EBITDA impact of COVID-19 due to site closures, postponed or canceled projects as well as due to productivity losses and costs related to infection prevention measures and interrupted supply chain was approximately CHF 37 million for the first half year of 2020.

For the second half year, the impact is difficult to predict as it depends on timing and severity of a potential second wave. For now, we considered 3 scenarios as summarized on the right side of the slide and anticipate scenario #2 with a more or less unchanged situation versus today, and the potential additional EBITDA impact of approximately CHF 10 million to CHF 30 million for the second half year. For the full year, we, therefore, expect the total EBITDA impact of approximately CHF 47 million to CHF 67 million.

Thanks to the strong progress and realized impact of the strategy and the current outlook in our attractive home markets, we believe that Implenia is well positioned to sustainably create added value. We, therefore, confirm our 2020 guidance on group level before any COVID-19 impact as well as the midterm target EBITDA margin of approximately 6.5%.

Before opening up for questions, I would like to briefly underline some of the key messages from today. To summarize: an increase of 39% in EBITDA to CHF 101.6 million. Positive effect of the successful Ina Invest transaction overcompensated the negative COVID-19 impact. Before COVID, all divisions met expectations and contributed to a good result, except business unit civil. The impact of the strategy implementation is as planned, and we further sharpened and accelerated selected initiatives. Last but not least, we confirm our guidance on group level before any COVID-19 impact.

Now before we answer your questions, a quick note that we will present our 2020 annual results on March 3, 2021. If you have any questions after this event, please do not hesitate to get in touch through the usual channels. Thank you very much for your attention.

I now hand over to Silvan to facilitate the Q&A session. Silvan?

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Questions and Answers

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Silvan Merki, Implenia AG - Chief Communications Officer [1]

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(Operator Instructions) I see we have the first questions in our chat. I will read for everybody and then hand over to André for answering them upon arrival.

The first question we got is, how quickly do you expect the equity ratio to improve to a level sufficient for an IG rating? What is the forecast ratio ex subordinated convertible at end 2020? The upside potential shown looks more mid- to longer term. André?

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André Wyss, Implenia AG - CEO [2]

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Yes. Maybe first 1 or 2 comments to this. Yes, certainly, the measures are mid- to long term. And I think that's how we should run the company. But certainly, we're also looking for short-term activities. As we said, we have sharpened and accentuated some of the measures due to the COVID impact. So there is a short-term impact, but certainly, the strategic measures are mid- to long term. Marco?

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Marco Dirren, Implenia AG - CFO [3]

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Yes, we're certainly aiming for an improvement of the equity ratio midterm, which is clearly -- which would lead us clearly above 20%. But as always, we don't guide on the equity ratio as such. All the measures we take, as you hear today, should improve the equity ratio significantly.

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Silvan Merki, Implenia AG - Chief Communications Officer [4]

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The next question you're asked, were there any impairments and/or restructuring costs in the first half year 2020? And are they expected for 2020?

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André Wyss, Implenia AG - CEO [5]

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So there were no impairments and restructuring costs of significance in the numbers. Otherwise, we would have reported them. We do not expect impairments for the second half. And the restructuring costs would need to be seen. But there are -- we do not comment on potential restructuring costs right now as we guide overall. Marco, any further comments to this?

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Marco Dirren, Implenia AG - CFO [6]

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No, not from my side. As said, just the implementation of strategy will have an impact, but no impairments or restructuring so far.

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Silvan Merki, Implenia AG - Chief Communications Officer [7]

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Thank you. Our next question we got, the negative free cash flow is another big concern for an IG rating. Where do you see it for the full year?

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André Wyss, Implenia AG - CEO [8]

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So just maybe a first comment from my side. The free cash flow is, always in the first half, challenging. Last year, we had KIM inno-living, which we sold right before the midyear. So you have these onetime moves. For us, the free cash flow is not a concern, but it's certainly a watch out, especially in the COVID-19 times. But we are pretty confident with the high cash position. And therefore, this is not a short-term concern. And midterm, clearly, free cash flow is an absolutely focus of the company. Marco?

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Marco Dirren, Implenia AG - CFO [9]

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Yes. As mentioned, we are satisfied with the high cash position. And we've introduced a strict cash regime during COVID-19, which we will certainly continue in one or the other way. And we do work on -- and we do collaborate with our clients as well to get -- to be cash neutral, cash positive on the projects. Actually, that would help us to improve the free cash flow. But as we always do, we don't guide on the free cash flow.

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Silvan Merki, Implenia AG - Chief Communications Officer [10]

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Thank you. I will read the next question we got, just to ensure your 2020 dividend payout will reflect the performance of the underlying business, excluding the noncash Ina Invest transaction.

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André Wyss, Implenia AG - CEO [11]

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So we have not a policy as such for payouts of dividends. But we mentioned several times, for the noncash Ina Invest transaction, there would not be a dividend payout likely. But this is certainly subject to the Board of Directors and of the Annual General Meeting, but we have not changed our position on this.

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Silvan Merki, Implenia AG - Chief Communications Officer [12]

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Our next question, any thoughts on how you plan to refinance the 2020 sub-convertible? Other ideas on how to strengthen your balance sheet to regain an IG credit rating?

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André Wyss, Implenia AG - CEO [13]

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Thank you for the question. Marco, I think that's your turf.

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Marco Dirren, Implenia AG - CFO [14]

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Yes. There are multiple dimensions to that. So first of all, we are in close contact with our banks on -- to actually work our adoptions and how we would actually approach the 2020 bonds. And then to strengthen our balance sheet, as we mentioned it during our presentation, we want to be more asset-light, focusing on generating -- and to be more client-centric, so generating profit and earnings from nonasset-heavy business, and that would help to increase the balance sheet. So the 2 topics are addressed, and we are working on that.

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Silvan Merki, Implenia AG - Chief Communications Officer [15]

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Thank you, Marco. The next question, would the full year 2020 guidance, including corona-related costs, allow you to keep net cash at year-end unchanged versus December 31, 2019?

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André Wyss, Implenia AG - CEO [16]

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I think I'm going to answer the first part of the question. And then Marco, you could answer the second part. The full year guidance stays unchanged, and we always said pre-COVID-related costs. But as you remember, we gave you an idea on how we see the full year related impact on COVID-19, which is CHF 37 million for the first half year. And depending on the scenario, we planned for scenario 2, which is more or less an unchanged situation to today, we expect another CHF 10 million to CHF 30 million for the second half. Second part of the question?

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Marco Dirren, Implenia AG - CFO [17]

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Yes. So I'll take that on the net cash. So we are certainly not only, but especially as well due to corona, on the cost sensitive in terms of how to spend cash. So we are cautious on that part.

On the other hand side, we have internal initiatives actually to fasten the cash conversion cycle to work on the work-in-progress, to work on the accounts receivables to actually turn them as fast and -- as fast as we can into cash and then working with our clients on, as I said, being cash neutral or cash positive on project. Certainly, that would allow us to treat our accounts payables so our suppliers in a fair way.

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Silvan Merki, Implenia AG - Chief Communications Officer [18]

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Thank you, Marco. Our next question is, going forward, in which profit and loss lines would we see the contributions from Ina Invest, may it be financial result or minority interest?

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André Wyss, Implenia AG - CEO [19]

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I think Marco…

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Silvan Merki, Implenia AG - Chief Communications Officer [20]

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And how should we plan this earnings contribution going forward?

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André Wyss, Implenia AG - CEO [21]

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Maybe I'll start with the second one. And then, Marco, you can answer the first part. Should we plan this earnings contribution going forward? I think we mentioned in the Capital Market Day on how this would need to be seen. So we see now a slight increase of these earnings over time with the recurring fees.

As you can see, Ina Invest started already with first projects. And we also said that Ina Invest will get the late-stage portfolio, so we expect quickly earnings. That's one of the advantages of Ina Invest, which we can capture within Implenia and also with the participation of the 42.5%. So we are certainly very optimistic about this. But remember, some of these upsides in 2021 and 2022 will be lower and then will accelerate over time. But this is certainly going to be very positive for Implenia. Now the first part goes to Marco.

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Marco Dirren, Implenia AG - CFO [22]

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Yes. So you would see the income of Ina Invest to the line, which is called income from associates in our annual report where we would report that -- those incomes.

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Silvan Merki, Implenia AG - Chief Communications Officer [23]

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Thank you, Marco. Our next question is, you mentioned postponed and canceled projects. Could you provide some examples? And why were these projects postponed or canceled?

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André Wyss, Implenia AG - CEO [24]

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Yes. Thank you for the question. So these are not postponed or canceled project by Implenia. These are postponed or canceled by the customer. And these are simple things like a country which has planned for certain projects, and this could be anywhere in -- where we are active, where a public or a private customer decided to wait due to COVID. And as a result, postpones the process of the whole project. These are not significant elements we saw, but certainly, that happened in the public and in the private field and more or less across all countries. And this was mainly due to the lockdown of COVID-19.

And that's why you can see in the market, EUROCONSTRUCT, and I showed you this on the market oversight, that EUROCONSTRUCT initially has foreseen a growth in the markets and has now declined for 2020 to minus 12 -- almost minus 12%, pretty much in line with our sales.

So our top line is more or less declining in line with the forecast. But this should be recovered now post lockdown. And therefore, EUROCONSTRUCT is actually quite bullish in -- on 2021. They even see a sharper uptake in 2021 versus originally planned due to compensate for some of those postponed projects, which now should come a little bit later in this year or even early next year. So that's what it is.

But from our side, we have not postponed project, but certainly, as you remember, we had shutdowns around the world due to COVID-19. France, for example, we had to stop all sites. In Austria, all sites, especially in the Buildings area. But also in Switzerland, like Geneva, Ticino, Vaud and even some SBB construction site were closed for the period of lockdown. So these are the 2 components to that question.

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Silvan Merki, Implenia AG - Chief Communications Officer [25]

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Thank you, André. We have a next question on Ina Invest. If Ina Invest continues to trade below net asset value, would this make raising equity for investing into the pipeline growth a problem?

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André Wyss, Implenia AG - CEO [26]

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So first of all, we are very happy with the go-live of Ina Invest, with the start of Ina Invest. Certainly, there was a bit of a correction. And this is also mainly due to that some investors don't -- they shouldn't be or can't be or won't be in the real estate field because they used to be only in construction. So there are some moves, certainly. It was trading on a very low volume, though. But certainly, I cannot give you any insights on Ina Invest on whether this will affect their possibility to invest into the pipeline.

In Implenia, we have the ability to invest in the pipeline. And we did, as Marco and I mentioned, we invested even more into our pipeline in the first half of 2020 versus the first half of 2019. It was over CHF 28 million this year versus over CHF 13 million last year. But for Ina Invest, we certainly cannot give you any insights on this. There, you would need to participate in the Ina investor call.

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Silvan Merki, Implenia AG - Chief Communications Officer [27]

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Okay. We have a next question on Implenia, again. You mentioned a potential reduction of assets and rightsizing of Civil Engineering. In which regions of our businesses is this an option? Will this result in an impairment or a significant restructuring cost?

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André Wyss, Implenia AG - CEO [28]

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So first of all, this is not a new plan. As you remember, our strategy was always to go full-centric customer broad. And we always said we're going to increase on the horizontal expansion. But we're probably going to reduce certain asset-heavy and people-heavy activities in some of our other markets.

In Buildings, this has almost been completed already. There's still some ways to go. In Civil Engineering, especially in tunneling and special foundation, there are no real needs. But yes, it's true in civil, we still see some issues there. It's across civil. It's not, in a sense, a new problem. It's still the same, but it was accentuated due to COVID-19 as this has most impact on those sites. And this is certainly something we're going to address. We have no major restructuring foreseen right now. We do this in a stacked approach. Because you also need to understand that these project are mostly running and we want to complete them. And maybe with the targeted new projects we're going to possibly acquire, this move will happen. So we just do what we planned already, a bit faster than initially planned.

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Silvan Merki, Implenia AG - Chief Communications Officer [29]

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Thank you, André. The next question we got, where and why did the problems in civil occur? Some more details would be appreciated. Similar problems as in the past? Many projects or mainly one project from that?

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André Wyss, Implenia AG - CEO [30]

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Yes. I think I answered that question more or less before. I can probably say it again. So the problems are more or less the same. They could not be corrected in a way we were satisfied, was accentuated clearly by COVID. This group was mostly affected by this.

But if you see in the refined target portfolio, we presented as a corrective measures. It's what the projects we're going to do and which ones we're not going to do. This is now fully aligned with the overall strategy of going to larger and more complex projects rather than to smaller projects, which is more the case in Switzerland than in some other places.

Potential lifting synergies in the organizational structure. So we're going to see where can we even lift more synergies. We started this already with the creation of the several business units. Now we've gone probably there a step further. And then it's the ongoing happening of the Value Assurance, the project excellence, the tools we implement where we are actually well on track to implement all of this.

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Silvan Merki, Implenia AG - Chief Communications Officer [31]

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Thank you, André. We currently have no more questions in the lineup. We would be ready and happy, of course, to answer 1 or 2 more questions until we end the Q&A session. So please feel free to ask more.

Currently, I don't see any incoming questions so far. If no more question would or will arrive -- we upload the chat again. There is one more question incoming. We see somebody's typing.

So question arrived. One more. Can you quantify the volume of postponed payments from customers in context with stopped projects due to COVID-19?

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André Wyss, Implenia AG - CEO [32]

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Marco, that's probably a question for you.

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Marco Dirren, Implenia AG - CFO [33]

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So we do not quantify the postponed payments. It's more like as it occurs according to the payment plans we have with our clients. So all which has been agreed with the client according to the payment plans. And if we have achieved the milestones, we've been entitled to payments, and we have been paid. But it's not that we would actually quantify the volume which was postponed. It is irregular. We are in the project business. And therefore, it's not that we would have a clear view on each and every day like we did -- like probably other industries have.

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Silvan Merki, Implenia AG - Chief Communications Officer [34]

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Thank you, Marco. No more questions in the lineup currently. No incoming questions. No typing so far visible.

So with this, I think we end our Q&A session. And I give the word back for the farewell to André.

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André Wyss, Implenia AG - CEO [35]

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Yes. Thank you, Silvan. With this, I would like to close our Implenia webcast, and thank you again for your attention. Goodbye, and stay healthy.