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Hello, and welcome to SPIE 9 Months 2022 Results Conference Call. My name is Priscilla, I'll be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Mr. Gauthier Louette, the Chairman and CEO; and Mr. Jérôme Vanhove to begin today's conference. Thank you.
Yes. Good morning, ladies and gentlemen, and thank you for attending our conference call for Q3 results at SPIE. So during the third quarter, we had a very busy quarter, and we continue to deliver strong performance. Our organic growth is accelerating compared to the first half of the year, with a continued focus on margin strength and progression. Our solid results illustrate our unique strategic position as a key enabler of the energy transition, even more reinforced in the current situation of rising energy prices. We demonstrated our agility to pass on inflation and even increase our margin in the context of inflation. And we sold our U.K. business, allowing us to further focus on our continental footprint. And finally, our record backlog, combined with the strong demand in energy-related markets, allow us to upgrade our organic growth outlook for the full year 2022. Let me start with a few examples highlighting our expertise in energy efficiency, grid connection and sustainability. So in Belgium, we worked on the Flagey building. It is an iconic Art Deco building completed in 1938, and it's a former headquarters of National Radio Broadcasting. So the picture is not very much Art Deco, it is a boiler room. We won a 15-year energy performance contract, which includes the replacement of HVAC system as well as an efficient building management. For this project, we are aiming at achieving 15% of savings on gas consumption and 10% of savings on electricity consumption. In Germany, we are contracted by Pyrum to install the energy supply system for the new production facility. Pyrum can recycle around 2 liters of oil as well as carbon and coveted raw materials from just 1 old tire. Obviously, the right energy supply is vital to the process, and we propose an innovative solution for a new substation within station of transformer station, 1 on top of the other. And moving to Slide 5. Again, in Germany, we implemented a high-voltage overhead line in the Upper Palatinate for one of our main customer, TenneT. The line is set to transport wind energy from North to South and will enable decentralized local feed-in of renewable energy. For this ambitious project, we have mobilized as many as 100 highly experienced SPIE technicians. And again, it is a good example of our contribution to the transition of the energy supply in Germany. And then on Slide 6, in Belgium, SPIE is providing the Flemish public transport company, De Lijn, with 252 additional charging stations for its fleet of electric and hybrid buses. We do the delivery, commissioning, and we will also do the maintenance of this charging station. And the goal of De Lijn is to achieve zero-emission public transport service by 2035. So clearly, on this example as well, SPIE is part of the solution, helping our customers to achieve the sustainability goals. And now I will move to the highlights of the quarter, and this is on Slide 8. So organic growth over this 9-month period did accelerate at 5.6%, including an outstanding 8.5% organic growth in Q3. EBITA margin improved by 20 basis points in Q3, which supports a 20 basis points improvement over the 9 months period. We recently announced the full divestiture of our U.K. business, allowing us to fully focus on our operations in Continental Europe, where our growth model has proven to be very successful and very value accretive. We also announced the completion of our EUR 1.2 billion sustainability-linked refinancing, which is a testimony of the high confidence of our core brands in our model and our strong commitment to achieve our ESG objectives. And finally, our strong organic growth for this 9 months period, combined with our solid backlog, allow us to upgrade our organic growth outlook for the full year 2022 to at least 5%.
On Slide 9, as mentioned, our organic growth momentum did accelerate in Q3 at plus 8.5%, leading to plus 5.6% over the 9 months period, including the contribution of our acquisition and notably Worksphere, our total growth reached 14.7% over the 9 months. Let me stress in passing that we are really pleased with the Worksphere integration and with the contribution to the results of SPIE. Regarding our margin, the 20 basis point improvement of our EBITA margin is confirmed in Q3 as well for the 9 months year-to-date, and this is very much in line with our full year outlook. Looking now in detail at our growth per segment at constant ForEx. So we benefited from strong organic dynamism in all our markets over the first 9 months. Organic growth reached a good level at 5.5% in France. Organic growth was at 4.7% in Germany and Central Europe as well as in Northwestern Europe. On the latter, organic growth would even have written an impressive 6.4% excluding the U.K.
Finally, Oil & Gas and Nuclear segment recorded a very high 13.8% organic growth, mainly driven by strong momentum in OpEx spend for Oil & Gas Services. Growth from acquisitions totaled 8.7% at group level, including Worksphere with a 30.7% impact on the Northwestern Europe segment alone. And now if we look at Q3 alone on Page 11. Q3 evidences the acceleration of organic growth in most of our businesses, growth also supported by our ability to pass on cost increases in our prices. France enjoyed a buoyant 7.8%. Excluding the U.K., organic growth at Northwestern Europe was at a strong 11.1%, thanks to a high level of activity compounded with a low comparison with this. With U.K., it was up 14.6%. Germany and Central Europe was up 5.5%. Germany was lagging behind at 3.7% due to phasing effects in the high-voltage activity while showing a positive momentum in comparison with Q2. Oil & Gas and Nuclear segment was up 13.6%, driven as explained previously, by the good momentum on our oil and gas activities, and growth from acquisition was significant at 7.4%, mainly linked to Worksphere's integration. And now looking at our margins on Slide 12. We again enjoyed a 20 basis point improvement in Q3. Our EBITA margin increase has been very consistent quarter after quarter with 20 basis point increase over the first 9 months. We are well on track to achieve our full year objective of a 6.3% EBITA margin. This demonstrates our agility in current inflation context as detailed on the next slide, 13. So SPIE has a strong and proven model with efficient levels to protect and increase its EBITA margin in the current inflationary environment. We do manage to pass on cost increase, thanks to the indexation clauses that reflect our cost structure, shorter validity of offers, the frequent updating of our pricing tools and databases, and the usual short-term cycle for activities. We also enjoy proven pricing power. Our mission-critical positioning has been evidenced in the recent years and the recent close relationship with our customer. We come up with innovative solutions. And clearly, the proximity and stickiness of our clients has even been reinforced over the recent years and through the recent crisis. And clearly, we do keep a constant focus on operational excellence in all our operations. Now moving to Slide 14. Regarding bolt-on M&A., it remains a key player of our value strategy. During this first 9 months, we have realized 4 acquisitions, adding EUR 132 million of revenue on a full year basis. The last one that was announced earlier this week is the acquisition of the fire protection business unit from BELFOR in France. It will enable to strengthen SPIE's market position in passive fire protection in the nuclear sector in France. And as previously announced, there were 2 acquisitions in Germany: PTC Telecom, a technical services and telco solutions company and a technical facility management activity related to 3 core production sites from a German blue-chip industrial company. And then one acquisition in Poland, Stangl, a leading player for insulation services in mechanical and electrical building. So looking forward, we have an active pipeline of opportunities, and we are likely to sign more deals before the end of this year. Not reaching, however, our initial guidance of circa EUR 250 million acquired revenue. Now let's go more into the details of each business segment, starting with France on Slide 16. The organic growth accelerated at 5.5% in the first 9 months, illustrating our good positioning for energy transition and more so in the context of rising cost of energy. The contribution from bolt-on was at 2.7%. We do see growing customer demand for energy performance contracts and for energy improvement in Tech FM and Commercial installation. CityNetworks also performed well, driven by increasing demand for e-mobility, which is really performing very well at the moment, work on the improvement of the energy networks and smart lighting solutions. Finally, industrial services were dynamic, supported by decarbonation trends and the accelerated payback of our solutions, considering the current levels of energy prices. In Germany and Central Europe, our organic growth was at 4.7% over the 9 months and contribution from acquisition was at 5.2%. In Germany, organic growth was at 4.6% over the 9 months period, with a 3.7% organic growth in Q3. High-voltage revenue was still impacted by contract phasing effects. In this activity, the backlog is at a record level, and the quarterly breakdown of revenue may sway as we have seen in the past due to somewhat chunkier projects. Tech FM and CityNetworks and grids enjoyed a strong dynamic. And I'll remind you that across our activities in Germany, we have very limited exposure to industrial services and not at all in the area of process. In Central Europe, we recorded strong organic growth, especially a double-digit growth in Austria. And in Switzerland, ICS remained impacted by supply chain delays, which are now slowly reducing. In Northwestern Europe, Slide 18, we recorded a solid organic growth of 4.7%. In the Netherlands, the market remains very dynamic in Transmission & Distribution, in industrial services and in Tech FM. We are experiencing good growth in optic fiber rollout and data center. Worksphere integration is as good as completed. Operational organization is fully in place. Synergies are delivered as planned. And indeed, we are very pleased with the contribution of Worksphere. It brings innovative solutions, and it brings a really high-quality customer portfolio. With Worksphere, we are now #1 in the Netherlands. This country is fully engaged in the energy transition and the digital transformation, and those are for bright prospects for services. In Belgium, both building and industry services were dynamic, driven by energy efficiency needs. In the U.K., we have decided to exit the country with a full disposal of our operations. Our efforts in the previous year to turn around the business have been successful. And after a thorough strategic review led since April, we have come to the conclusion that SPIE UK would enjoy better perspectives on the new shareholding. The sale process that was then launched led to a successful completion with impact, and Jérôme will take you through the associated numbers. Finally, moving to [indiscernible]. Markets are generally well oriented and providing us with a good visibility. Total growth was up 16.7%, including a very strong organic growth at 13.8 and a favorable currency impact of 4.3%, obviously, due to some operations in U.S. dollar for oil and gas activities. Oil & Gas enjoyed a good momentum in OpEx spend. Our strong backlog, including multiyear contracts, provide us with a good midterm visibility. In nuclear services, 9 months revenue were only slightly up with a weak Q3 due to the changes in maintenance planning decided by EDF. Long-term visibility remains good, and we are receiving the first call for tenders for preliminary works related to the new EPRs. I will now hand over to Jérôme, who will comment on our financial performance.
Thank you, Gauthier, and good morning, everyone. I'm on Slide 21. As Gauthier pointed out, we achieved a very solid financial performance, as reflected in all our key figures. In Q3, group revenue reached EUR 2.018 billion, up 16.4% and our EBITA margin reached 6.6%, a 20 basis point improvement. Over the first 9 months, group revenue reached EUR 5.773 billion, up 14.7%, and our EBITA margin reached 5.6%, again, a 20 basis point improvement. I'm on Slide 22. This 9 months revenue bridge highlights the accelerating organic growth and the contribution from our acquisitions. Our 14.7% revenue increase in the first 9 months takes into account a 14.3% increase at constant ForEx, of which a very strong 5.6% organic growth. The 8.9% scope effect is mainly coming from the Worksphere consolidation as from February of this year. This is 5.9% out of the total scope effect of 8.9%. The 0.4% currency effect is mainly related to a strengthening of the U.S. dollar against the euro, especially in our Oil & Gas business. Last month, we have completed the refinancing of our EUR 1.2 billion syndicated loan as previously announced in July. This success of the syndication confirms again the high confidence of our core banks in our business model. This refinancing enabled to further extend the maturity of our debt and maintain good spread conditions. In parallel to the closing of this refinancing and in the context of rising interest rates, we set up an interest rate swap on a EUR 300 million portion of the drawn term loan, meaning 50% of it with a maturity of 5 years. With this swap, 85% of our gross debt is now at fixed rate or hedged for the respective maturities. Our sustainability-linked refinancing highlights again our strong ESG commitments and is fully aligned with our 2025 ESG targets. I'm on Slide 24. We have recently announced the full disposal of our U.K. operations. A few details regarding the economics of these transactions. The purchase price is at circa EUR 50 million, precisely GBP 43 million. This transaction will generate an estimated exceptional negative impact of around EUR 80 million on the group annual net income for the year -- for the fiscal year 2022, including an estimated EUR 95 million of capital loss, noncash, reduced by circa EUR 12 million of deferred tax assets contribution. For the avoidance of doubt, again, our 2022 group net income will remain largely positive and it will not have any impact on the adjusted net income and the group's dividend policy remains unchanged. This transaction will have a positive impact on the group net debt estimated at around EUR 40 million. We anticipate this transaction being fully completed before the end of 2022. This concludes my part. I will now hand it back to Gauthier.
Thank you, Jérôme. Before concluding this presentation, I would like to share with you the outstanding success of last SPIE's employee shareholding plan. So the SHARE FOR YOU 2022 was a 6th edition of our program since our IPO in 2015. Around 11,000 employees participated and more than 2,500 employees invested for the first time. 13 countries were involved, and we are very pleased to offer this plan to our colleagues who recently joined us from Worksphere in the Netherlands. Upon completion of the related capital increase, the share of employees and management would account for close to 9% of SPIE's capital. Involving our employees in the SPIE entrepreneurial adventure is very important to us. It is a key factor to our success where our people business, retaining quality personnel is key, and this sort of tools are very efficient in this regard. It is also very important that our employees do feel part of the green solution, and I'll come to that on the next slide. As you know, today, the energy transition is accelerating, and we are benefiting from strong tailwinds linked to increasing cost of energy, ESG regulation and decarbonation commitments at our customers. 65% of what we do does mitigate climate change through 3 key drivers: the shift in energy mix of 24%; energy efficiency for 36%; and mobility for 5%. We are more than ever part of the solution, and we are enthusiastic about providing the best solutions for our customers. And now moving to Slide 28. So thanks to our very promising first 9 months, we have revised upwards our organic growth. We now expect organic growth of at least 5% versus at least 4% previously. We target an EBITA margin of 6.3%, up 20 basis points. Regarding bolt-on M&A, our pipeline of opportunities remain very strong with multiple ongoing life situations, while phasing effects would lead to total full year revenue to be acquired in 2022 in the order of EUR 150 million. This is obviously not considering the EUR 450 million of annual revenue gain from Worksphere. Operating in a very fragmented market, bolt-on M&A remains a key pillar of our long-term value-creating strategy. We target a broadly stable average ratio at the end of the year, and our proposed dividend payout ratio will remain at circa 40% of adjusted net income. We are very confident to deliver on this updated 2022 guidance. And looking further ahead, we have demonstrated that we are in a key position to help our customers tackle the energy transition and the digital transformation. Being on the solutions side is a strong asset to support our future growth. I thank you for your attention. And now with Jérôme, we are ready to answer your questions.
[Operator Instructions] We will now take our first question from Ebrahim Homani from EIS.
Congrats. This is Ebrahim from CIC. In Germany, the first question is about Germany. After the slowdown in growth in Q3, should we expect an acceleration in Q4? My second question is about the Oil & Gas and Nuclear segment. Should we expect a decline in activity in 2023 if energy prices fall? We know that this is a brand that generates the highest level of margin. And my last question is about the impact of the disposal in the U.K. on the EBITA margin. And can we imagine other disposals?
So regarding Germany, as I said, the Q3 was impacted by some phasing effects of our high-voltage projects, and these are chunkier projects and they may vary from one quarter to the other. We expect an organic growth in Q4, which will not be very dissimilar, probably slightly better than Q3. Altogether, the German market remains very strong. And again, we have, be it in high voltage, been efficient in Tech FM, and we have a very strong backlog and a very good order intake. So we are not concerned at all about the German business. Regarding Oil & Gas, Ebrahim, we're obviously not going to guide for 2023. But I want to stress that we have had a very good Commercial performance this year. So not only the customers are spending more but also, we are gaining market share and evidence, for instance, by the new contracts we gained in Denmark for maintenance, the total energy assets over the next 5 years. So I'm really confident about the prospects for -- going forward for Oil & Gas. Nuclear, it's a bit more blurred at the moment with all the -- what is happening at EDF. But it is usually fairly stable. But as you have seen as Q3 has been a bit impacted by all what's happening at EDF right now, I think that the situation is going to normalize over the next year. Regarding U.K. disposal, it has a very small relative impact on our margins, all things equal. It was -- it has become a small operation within SPIE, so you see the impact on margin is small. And we do not plan any other disposal. Clearly U.K., we had launched a strategic review, it is important to do it thoroughly. I think we have come to a sensible solution. We always say that this market will need to be consolidated. We were not really feeling like being part of the consolidators. So I think this is a very sensible move. From the SPIE point of view, I think it's also very sensible for the employees of SPIE will now are going to have better opportunities in a different shareholding environment.
We will now move on to our next participant, David Cerdan from Kepler.
This is David Cerdan from Kepler Cheuvreux. I have a few questions for Gauthier and Jérôme. My first question is regarding your 8.5% organic growth in Q3. Can you split between the price effect and the volume effect? Second question is regarding wages. By how much have you increased wages year-to-date? And what do you expect for 2023? And my last question is related to Caverion. Have you had a look on Caverion?
So to the first point, as we have said before, it is very difficult for us to split between price and volume because we do not have a simple unit of measurement. If you sell a tonne of steel, when we sell a number of tonnes and the price per tonne, it is easy for us, it is obviously much more intricate. So very difficult to do the split. Regarding wages, year-to-date, we have worked with the agreements we had in the various countries. So it's beginning of the year, we had a wage increase in the range of maybe between 3% and 4%, maybe 2% -- between 2% and 4% depending on the countries. We are now in all of the countries are negotiating for next year. In some countries, it is done by -- at a branch level, like EBITA in Germany; at national level, France and Belgium with an index formula. So we do expect more inflation on wages next year than this year. But again, this is something we are already anticipating in our pricing. And so we [indiscernible] concern towards our margin for next year. And now looking at Caverion, we know Caverion well. And clearly, this was not on our target list. It is not synergetic and totally different geographies. Probably entering a new geography with a turnaround case is not the best idea, so it was not on our target list.
We will now move on to our next participant, Oscar Val from JPMorgan.
I have 3 questions. The first one is going back to Germany. You talked about a strong backlog with Transmission & Distribution. Is it possible to quantify how big that backlog is? That's the first question. The second question, again, on employee situation. You've talked about wages. Could you talk about the ability to hire? Is it becoming easier to hire electricians than it was 6 months ago? Or is it still difficult? And then the final question is, again, going back on M&A. You talked about potentially a few deals in what's left to the year. Do you expect to see more deals next year if competitors or family-owned businesses are more likely to sell themselves? Or do you expect next year to be a more difficult year for M&A?
Well, regarding backlog, we do not communicate on backlog and certainly not on a specific segment. But just generally, this -- in high voltage, the backlog does spread over several years and because these are chunkier projects and that take us some more time to execute. But it gives us a very good visibility over the next years on one side. And the other side, I'd like to mention also that in terms of margins, the quality of the backlog is of excellent quality with regard to margin. Regarding ability to hire, it's certainly not getting easier. Clearly, and as you see, despite all the turmoil in the economy that we've seen right now, we're still enjoying good growth, which is a sign of the high demand for our type of services and meaning that our resources are at a premium. Customers do need also technical profile. So it does happen that we look some of our people to our customers and which have -- would end [ about site ]. But it's not easy to find good people. Hence, also our ability to maintain or increase our margins. It is -- it does help us in a way in this regard as well as some of our customers. They are very much aware of the scarcity of resources. They don't want to rock the boat and they prolong contracts with us because they feel it is a safe way to keep good technical resources at hand. Regarding M&A, it's not -- usually, when the economy is more complicated, it doesn't make M&A activity easier because a number of vendors are reluctant to sell and wait for a better time. But it's not a major impact either, and we have an excellent pipeline. So I think we're really confident about ability to maintain a good deal flow in the future.
We will now move on to our next participant, Mr. Augustin Cendre from Stifel.
So I have 2 questions, if I may. If we could come back to the Oil & Gas division. And specifically, you mentioned the number of multiyear contracts that are the main arguments for you being confident on the backlog going forward. Could you share with us the share of multiyear contracts in this backlog or at least maybe the exposure you have to multiyear contracts? And on the second question with the U.K. divestments. Could you quantify or maybe not quantify, but give us an indication on the working capital impact we should expect? Is it in line with the rest of the group?
Well, regarding Oil & Gas, I think, first of all, in Oil & Gas, our exposure to OpEx is probably in the range of 85% to 90%. And then when it is CapEx, it is a small -- smaller usually investment in brownfields, et cetera, so we're not involved in large projects. And the share of multiyear contract, you'd be looking at probably in the range of 70% to 75% of what we do. So it is really, really our focus. We maintain large assets like FPSOs offshore Angola, offshore Nigeria. I know we have this contract offshore in Denmark. And this is really the main focus of what we do. And Jérôme will have a word about the working cap here.
Yes. Regarding the working capital impact from the divesture of the U.K. Bear in mind that at the same time, we turned around the business in 2020. And in 2021 in the U.K., we significantly improved also their trajectory regarding working capital management. And as from the end of '21 and again confirmed in Q1, Q2 and Q3 of this year, we've been pleased to see SPIE UK trading with a structurally negative working cap along the same performance of the group. So in a nutshell, no impact from that divestiture.
[Operator Instructions] We have David Cerdan from Kepler.
Okay. Globally speaking, do you think that or do you consider that the current market condition and prospects have never been so attractive for you?
Well, if you ask me the question January 30 last year, beginning of this year, I would have said definitely, yes. Nowadays, obviously, there's a bit more questioning around the macro and the fact that we have war at the border of 3 countries where SPIE is operating. So we are operating in Poland, Slovakia, Hungary, and they all have a border with Ukraine. So it's a different mood. However, first, in terms of recession, we have always been extremely resilient. As we said many times, we do not find at all to play defense. The cost structure is extremely flexible. We operate multi mission-critical services. So we don't -- we're not afraid of downturn of the economy at all. We'll be able to maintain our margins and a very good level of activity. But I'm not saying that -- I'm not an economist, I'm not saying what will happen in terms of macro. What we do see, however, and compared to other tough times we had to go through in the past. The driver of decarbonation and energy, the efficiency is stronger than it has ever been. All companies are committed on carbon neutrality in the years to come and the immediate carbon reduction. The cost of energy in uses allow our customers to take a stern look at the energy spend and the way they can save energy. The return on the investment on energy saving project is better than it has ever been and the solutions do exist. So even if the macro might be a bit more bleak than it used to be, we have stronger drivers than we ever had. So all together, I would say that we are in a very decent position.
We will now move on to our next participant, Eric Lemarié from CIC.
Eric from CIC. I've got 2 actually. On EQUANS, have you started to see some changes in the market since the acquisition of EQUANS by Bouygues? And the second question still on EQUANS. I have noticed that the average contract for EQUANS stand around EUR 70,000. I think it's around EUR 30,000 for SPIE. And I was wondering what could explain the difference in your view.
Well, to the second part of the question, it's very difficult to say. So I don't know exactly how they've been calculating this. But what I see is that there is stronger appetite at EQUANS for larger projects, which was one of our issues when we did the due diligence because the large projects are very, very successful. And regarding the attitude, well, so far, we see EQUANS a bit in limbo and not between signing and closing. So we have not seen a major change of attitude, not worsening, but not improving really either over the next year. I do expect a change now with Bouygues as a shareholder. We have seen progress over the last 2 years at Bouygues Energies & Services. Clearly, they have ceased to be a disruptive player for Bouygues Energies & Services has been much more disciplined on pricing and much more focused on margin and they achieved margin improvement. So I think it bodes well for what is going to happen once Bouygues holdings start to take a grip on EQUANS.
We will now move on to our next participant, Peter Testa from One Investment.
I have 2 topics, please. One is just on the German phasing, if I could understand a bit better. I mean obviously, Q2 and Q3 have been what they are. And you mentioned Q4 would be kind of like Q3. I was trying to understand on these high-voltage contracts, how they phase if they don't phase inside a year. And maybe whether you can give a sense also whether the high-voltage business while being very high quality, high margin is also a growing business. So whether it's -- these are long, relatively stable contracts in Germany, the first question.
Yes. Well, the -- on this contract again as our offer chunkier site. So depending when they start and when they finish, you have a variation of -- regarding the production of a given quarter. And then it's not easy to reforecast its accuracy because you invariably have a few issues with delays in start because some permits or some last-minute hiccups with some of the landowners or whatever. So -- or sometimes also happens right now in the Netherlands, a bit of administrative hiccups on the customer side. So this accounts for this sort of variation, and then we do not exactly have the same size of projects all the time so it is an added variation. Altogether, the trend of the market is positive. And clearly, the demand is very high, which has really helped us stacking up our margins over the last 18 months on one end, and which also provide for a good visibility. The key factor is also to find the right level of resources. And this is what we are working at, together also with our colleagues in Poland and in Slovakia. We try to use these resources in Germany as well. The idea is to grow the business in the years to come. The level of investment from the customer will allow that, provided that we find the right resources.
Okay. And given what you talked about in terms of phasing and just getting the contracts launched, are you expecting quite a bit, therefore, to launch next year? Or how do we understand that?
No. We're looking at a strong next year altogether. But again, I'm not committing on phasing quarter-by-quarter, but we're looking at a strong year next year. And beyond, clearly, we are bidding. A few days ago, I was reviewing a project, which will extend until 2030 and for main trunk line in the western part of Germany. So it is a very active market.
Okay. So it should be a good support to next year. And then the other question I had was on the step-up in growth in Q3. As you highlighted, the wage pressure, while it's there, it has not dramatically changed in the period of time and the growth has picked up. And I was wondering whether you were just seeing a very good -- whether just a good summer? Or are you seeing a pretty strong inflow now of projects across the piece?
I think generally, the trends are good. And again, if we look at our order book or backlog, it is fairly favorable. One of the questions is clearly execution. We do have a few hindrances linked to the supply chain. We mentioned ICT. It also happens in some other areas. And so generally, the trends are good. I do not expect Q4 to be as strong as Q3, clearly. It's -- we had a very strong August and September. I do not expect the last quarter to be as strong as we have seen in Q3.
Yes. Okay. And the last thing is just on hiring. It was asked earlier, but are you -- do you think you're able to step up the hiring pace now given your efforts and your comments about quality and mix of projects?
We are stepping up the hiring pace. But the key issue is that we also see a small increase in the resignation rate. It has moved from 6% to slightly above 7%. So we are feeling the bucket that we also want to show that we do not -- make sure that we don't have too many leakages. So talent attraction is key, and this year, we will manage to hire probably over 6,000 people. But talent retention is also essential. Hence, for instance, the shareholder program for employees, but also the stuff we try to do. And clearly, we need to work on both fronts. But we are perfectly able to attract people. Again, retaining them is, for me, the main concern.
We will now move on to our next participant, David Green from Boldhaven.
Just a couple of questions, if I can. Obviously, very strong top line performance. Just interested to get a bit more color on why there wasn't more operating leverage. I appreciate that there's obviously a cost headwind element, but any more granularity there? And just with regard to the sort of strength overall in organic sales growth. Could you maybe give us a little bit more color in terms of what's driving that across the different businesses? And to the extent you referenced the energy transition theme accelerating in terms of interest for obvious reasons. Is that something that's really only just had started to have an impact in Q3 and we should expect that to accelerate? The final question is on net debt. I think you previously guided to full year 2022 net debt of around 1.8x in line with 2021. Just wanted to make sure that you're still on track for that.
Yes. Well, regarding the operating leverage, as you have seen, we are increasing our -- improving our margins by 20 basis points, which I do not consider an easy task in the current environment. We will have to face headwinds in terms of inflation. We have to work not to pass on the inflation cost to the customer. We have older contracts where obviously, for some contracts which have been signed 2 years ago, inflation was not so much of a concern. So some of them do not have indexation, and we have to talk with our customers. So it's -- and the scarcity on resources, that doesn't help either and also the supply chain issues, bring us some time to have to buy on an emergency basis to come up for customers who was not delivered. So not specific. It's very easy on the spot. So I would not consider the 20 basis. I will not disregard there's a 20 basis point margin increase and consider it too easy to achieve. So I think operating levels as at just a bit in this regard as well. And now with the organic growth drivers of what we've seen, clearly, I think we have said that in the past, we're in a world where -- which is shifting a lot to electricity. The mix in electricity in the energy supply is becoming more important generally. The concern about energy efficiency has increased even more with the rising energy prices. The e-mobility has become a very important aspect of what we do. In France, this year, we do 3x as much recharge points as we did last year, and all our type of customers are craving for this sort of [indiscernible] right now. And finally, the energy transition, as we have seen in -- especially in Germany or in the Netherlands, but also in Belgium, brings a lot of investment to transport electricity from offshore wind farms to the consumer centers. So these are the main drivers that we have seen in the past. And as a concern all part of the activity, if we look at the industry, there's a lot of demand now for energy savings in the industry as well. On top of that, we have everything which is linked with the digitization of the optic fiber, which is -- has a very strong activity right now in the Netherlands. So a lot of drivers, and I'm not mentioning data centers. These are the main components leading to organic growth.
I will answer your third question regarding net debt. The answer is yes, 1.8x remains as the leverage remains our target while it doesn't get easier, honestly speaking, in this new context. But I think we have some very good levers we can play with, starting with our very strong discipline in managing our cash, our strong discipline in our ability to invoice, to negotiate cash advances with our supplier to minor -- constantly and to monitor constantly reduced overdues. So that would lead us to maintain so far our targeted leverage at 1.8x, identical to end of last year.
On the comments on the supply chain, I'm just interested, what are the specific constraints there? And what specific business areas is that covering?
Well, supply chain, the main direct impact is clearly on our ICT activity. We mentioned -- as you know, Cisco is the first supplier of SPIE and Cisco happened to have a very rush ride over the last 2 years being -- we lost a lot of visibility on the delivery times, et cetera, and for a number of customers are the only choice. They don't want alternative solutions so we have to deal with that. So it is the main direct impact, ICT supply and specifically Cisco. And then you see it is more the issues in other areas where lead time for transformers become longer and sometimes we will install a new cooler and then the microprocessor will only come a few weeks later, and so we have to go back to the site, et cetera. So -- but it is more the issue. The main concern is ICT. And then generally as well, we do have to cope with a slightly extended lead times.
It appears there is no further questions at this time. I'd like to turn the conference back to your host for any additional or closing remarks. Thank you.
Well, thank you very much for your attention today. I think SPIE is on a good track. We have worked a lot on our strategic positioning. We have streamlined our portfolio, and we do benefit from the drivers of the decarbonation, which is core to our business. So confident to deliver once more on our guidance for 2022 and confident going forward. Thanks a lot. Have a good day.
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