The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst
: My first question is for Cristina, whether you can give us an indication of the Minsait top line growth in the second quarter stand alone ex M&A and
ex Elections business, which I believe has had some impact in the quarter. And also regarding margins, whether there has been any special one-off
in the quarter to justify this pretty high level. So this is the new normal for Minsait.
My second question is for Ignacio. Again, on margins on the T&D division quarter-on-quarter, you have increased revenues more than EUR 100
million and profitability of the EBIT of the T&D division has only increased EUR 11 million, meaning that the original level of the business has been
pretty poor. Again, do we have something extraordinary here on the quarter to justify this low profitability? Reading on your note, you referred to
Haramain in a number of occasions. I don't know if that's been a significant impact on the quarter.
And finally, on the guidance, I remember last year when you gave us the new transformation plan that we were talking of a EUR 90 million delta
of savings this year versus last year. How much of that has been already achieved on the first half?
Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst
: Yes. I mean -- and that Haramain impact, is it possible to quantify that a little bit? Or it's just the idea that you already gave us -- for the second half,
we should expect a double-digit margin again on the division. So therefore, if we exclude that from the second quarter stand alone, we shall see
double digit already. That's the correct way to see it or...
Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst
: Okay. So just one final question on the guidance. It has stated in a number of places throughout the presentation, the comparison of this first half
versus the first half of '19, which is probably the correct way to do it. So if we do the same for the second half, EBIT in the second half of '19 was
EUR 145 million. So that will lead us at full -- EBIT for the full year, roughly EUR 245 million. I believe Ignacio said that at this stage, you prefer to be
prudent because probably related issues are still there. But assuming a similar behavior of COVID on the second half than the one we've seen in
the first half, that should be the correct math to do it, assuming a similar EBIT than the one achieved in the second half of '19?
Question: Manuel Lorente - Mirabaud Securities Limited, Research Division - Analyst
: No, no, no. Yes. I see that there are some levers to justify somehow a lower profitability on the second half beyond COVID-related issues.
Question: Ben Castillo-Bernaus - Exane BNP Paribas, Research Division - Analyst
: Just had a question on if you could comment on catch up or finishing of some projects. I think Transport division that needed some physical
presence to sign them off and therefore, recognize the revenue that was about -- there was a considerable amount of revenue that was going to
be concluded this year. Can you just give an update on that?
And then secondly, more of a big-picture question. But as your backlog in the Defence business continues to grow and there's some lag in terms
of recognizing that backlog in revenue, how do you manage your resources in terms of ramping the necessary R&D or investments to deliver on
those contracts? What possible timing risk is there where you may need to invest ahead of revenue being recognized?
Question: Ben Castillo-Bernaus - Exane BNP Paribas, Research Division - Analyst
: Yes, that was very helpful. I appreciate it.
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