On Tuesday, Automatic Data Processing (NASDAQ:ADP) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what the C-suite revealed.
Josep Pujal – Kepler: I have three questions. The first one is on April traffic, are you able to measure what was the impact of the strike of the air control personnel? Also to understand, why the traffic was a bit more in France than in other – any other location, is there another phenomenon maybe the high-speed train new lines? Do you want the other two questions now or later?
Laurent Galzy – CFO: Yes please.
Josep Pujal – Kepler: So, my second question is on those initiatives to bolster traffic, are you happy with results. Do you think and are you able to measure if the net impact of lower tariff, higher traffic is positive or negative for your company, for the sales of your company? My third question was, it’s a general question, is it something that changes for you with the change in I would say the French politics, the new President and the new government?
Laurent Galzy – CFO: Concerning April traffic, as I mentioned, a number of – all the time, we have to be careful about finding explanations about the traffic for certain months because the – overall, we have a clear correlation between the GDP growth and the traffic growth with the traffic growth at twice or 2.3 times the GDP growth, but for specific months we can have quite volatile situation from a month to the other due to many factors and it is not always easy to explain month by month why there is a gap between the average of the year and the situation for a specific months. We mustn’t over interpret it, the months when we have very good months or a bad month. So concerning the explanation it can be a combination of factors you mentioned strikes, we had also very important elections in France so that can also have some impact on traffic, people postponing travels for weekends or holidays due to that so this may impact not only April, but also May and maybe June. I don’t see at this stage a very significant impact of high-speed train. We have that in the past of course and we have the most (structural) situation in which the domestic traffic is really mature with an existing competition of the high-speed train, but this is, let’s say, a normal situation. What was unusual was to have a very strong growth of domestic traffic last year. The growth usually comes more like it was the case in Q1 from international and to a lower extent European traffic. Concerning the mechanisms that we have put in place in the economic regulation agreement is this mechanism can bring up to roughly €5 million discount on the passenger fees of the fast growing airlines. So, we reached for the period between the April 1, 2011 and April 1, 2012, due to the strong growth of traffic we reached the cap. I don’t think it will be the case in 2012 due to a more moderate growth in traffic. In terms of impact on airlines, it’s of course, difficult to measure the impact on our overall turnover. It is, as I said, limited to €5 million. It’s something that makes it easier for the fast growing airlines to handle the growth because there are some specific costs in the face of the growth to start new airlines new destination. So it’s a way to accompany them and to help them and in that sense I think it’s useful. Concerning your last question, you question maybe – I don’t know precisely to what kind of changes for the Company you can refer, if it’s concerning the shareholding of the Company, I would say exactly the same thing that I said before, the shareholding of the Company according to law is to be for majority stake in the hand of French state which is not a right decision since it needs to go to the parliament. So, we think this limit of 2% that can be sold without changing the law by the government, but the FSI has 8% that can be sold when the FSI decides to do so which is not of course under our control.
Trafalgar Copley – Exxon BNP Paribas: Two questions here the first one is regarding Air France KLM during their latest results conference call, as I mentioned that they were discussing with you on the tariff increase for the coming year, mentioning some examples in Amsterdam, Schiphol and other European efforts. Are you ready to make some concessions in terms of tariff increase to Air France if their economic and financial situation is worse than they anticipate? My second question is just regarding Masternaut, should we expect any kind of seasonality on (indiscernible) in terms of revenues for the following quarters?
Laurent Galzy – CFO: Concerning Air France KLM, the process concerning tariffs start in late June, July, so there is a process concerning the tariffs for 2013 has not started and there is absolutely no discussion about that for the moment. Concerning our orientation for the future, we will stick to what we did in the past. We will apply the economic regulation agreement as there is always slight room for discussion, of course, as we did in the past, but simply as we did in the past and nothing here different. I am sorry concerning Masternaut maybe I wasn’t clear early on the call. We sold Hub telecom, sold Masternaut 15th of April.
Trafalgar Copley – Exxon BNP Paribas: I am sorry, I mean Hub telecom. Actually, I mean the revenue at Hub telecom, is there any kind of seasonality or should we expect rise of stable revenue over each quarter of the year?
Laurent Galzy – CFO: I don’t have the precise figures in mind but this activity has not really significant seasonality.