Bouygues : First-half 2014 results

Paris, 28 August 2014

Bouygues press release

First-half 2014

 Robust commercial performance

 Current operating profit: €134 million

 Net profit: €410 million, benefiting from exceptional items

 Strengthened financial structure

For information, as announced, reported results for 2013 have been restated for IFRS 11.

(€ million) First-half 2013 restated

Sales 15,094 15,182 +1%

Current operating profit 347 134 -€213m Operating profit 347 523(1) +€176m Net profit attributable to the Group 188 410(2) +€222m

Free cash flow(3)

Net debt(5)

155(4)

5,757

230

5,174

+€75m

-€583m

1 Including non-current operating income of €81 million related to Bouygues Telecom and a capital gain of €308 million on the sale of

Eurosport International (31%) and the remeasurement of the remaining interest (49%)

2 Including a net capital gain of €240 million on the sale by Colas of its stake in Cofiroute

3 Before change in the working capital requirement

4 Excluding capitalised interest related to 4G frequencies for €21 million

5 At 30 June

Commenting on the Group's results in the first half of 2014, Martin Bouygues, Chairman and CEO of the Bouygues group, said: "Although our operating performance reflects a more challenging economic and competitive environment in France, I believe that Bouygues has become stronger since the start of the year. Our construction businesses are increasing their international presence, Bouygues Telecom is successfully rolling out its aggressive strategy and Alstom will offer good growth and upside potential following the deal with General Electric. In addition, over the last six months the Group has once again proved its capacity to ensure its financial strength."

The Bouygues group reported consolidated sales of €15.2 billion in the first half of 2014, up 1% year-on- year. Growth in international sales, up 8% on the first half of 2013 to €5.0 billion, offset the decline in sales in France, down 3% on the first half of 2013 to €10.2 billion.
Current operating profit amounted to €134 million, €213 million less than in the first half of 2013, mainly due
to the expected decline in profitability at Bouygues Telecom. Operating profit amounted to €523 million, up
€176 million on the first half of 2013. It included a capital gain on the sale of a controlling interest in Eurosport International and non-current income at Bouygues Telecom. Net profit attributable to the Group amounted to €410 million, up €222 million on the first half of 2013, including a net capital gain of €240 million on the sale of Colas' stake in Cofiroute in the first quarter of 2014.
Although operating conditions were tougher in the first half of 2014, the Group managed to find the financial resources to withstand the decline in its profitability.

1/11

The order book at the construction businesses reached a high level of €28.0 billion at end-June 2014, up
3% year-on-year. The French market was tougher in the first half of 2014, with a slowdown in public-sector orders following the municipal elections, especially in roads, the scarcity of very large contracts and an increased wait-and-see attitude on the residential property market. In contrast, business activity remained dynamic on international markets. International orders accounted for half of the total order book at Bouygues Construction and Colas, amounting to €12.9 billion at end-June 2014, up 15% year-on-year.
At Bouygues Construction, order intake came to €5.2 billion in the first half of 2014, up 2% year-on-year. The order book at end-June 2014 stood at €17.5 billion, 4% up on end-June 2013, and provides good visibility for future activity.
At Bouygues Immobilier, reservations in the first-half of 2014 amounted to €737 million, down 23% year- on-year. However, this is not representative of the anticipated full-year trend, since a number of commercial property projects and significant residential block sales are expected in the second half of the year. The order book at end-June 2014 stood at €2.2 billion.
At Colas, the order book rose 9% year-on-year and stood at €8.2 billion at end-June 2014, including
€4.7 billion in international and French overseas territories markets, up 30% year-on-year, and €3.5 billion in mainland France, down 11% year-on-year. The share of the order book for execution beyond 2014 was up
35%, reflecting a longer order book, while orders for execution in 2014 were down 5% year-on-year.
Sales in the construction businesses were up 2% at €11.9 billion. They were driven by strong momentum in the international activities (up 9% year-on-year to €4.8 billion), which offset a decline in sales in France (down 2% year-on-year to €7.0 billion). Current operating profit amounted to €137 million, down €64 million on the first half of 2013. This was mainly due to the start of work on a number of major projects at Bouygues Construction, a tougher French roads market and an increase in the current operating loss at Colas' sales of refined products activity.

1 Bouygues Construction, Bouygues Immobilier and Colas

The audience share of the TF1 group's four freeview channels was stable in the first half of 2014 at 28.9%(2). The TF1 TV channel's audience share increased significantly in the second quarter of 2014, up 0.8 points in comparison with the second quarter of 2013, due to the 2014 FIFA World Cup.
Sales in the first half of 2014 amounted to €1.2 billion, down 2% on the first half of 2013. Current operating profit over the same period amounted to €50 million. The €21 million decline versus the first half of 2013 reflected the cost of screening the 2014 FIFA World Cup, partly offset by savings from the optimisation plan. Operating profit in the first half of 2014 included a capital gain of €323 million on the sale of the 31% stake in Eurosport International and remeasurement of the residual interest (49%), amounting to €373 million (up
€302 million in comparison with the first half of 2013).

1 At Bouygues group level, the sales and operating profit of Eurosport International remained included in the results of TF1 until the sale of an additional 31% stake in Eurosport International to Discovery Communications on 30 May 2014

2 Individuals aged 4 and over. Source: Médiamétrie.

Given the prospect of exponential growth in digital services, Bouygues Telecom is implementing an aggressive strategy with the aim of:
- creating value by developing mobile data use;
- pursuing growth in fixed broadband by making services and very-high-speed broadband accessible to as many people as possible;
- accelerating the company's transformation while reasserting its positioning.
This strategy was reflected in the company's commercial performance during the first six months of the year. The company added 74,000 plan customers in the first half of 2014, bringing the total at end-June to
9,984,000. Over 70% of retail plan customers have subscribed to a value-added plan(1) and 16% of mobile
customers use 4G(2), compared with 9% at end-December 2013, representing 1.8 million customers.

2/11

For the third consecutive quarter, Bouygues Telecom is No. 1 in the fixed broadband(3) market in terms of net adds(4), acquiring 102,000 new customers in the second quarter of 2014, to give a total of 2,215,000 customers at end-June 2014.
As expected, first-half financial results were affected by ongoing repricing within the mobile customer base. Sales amounted to €2.2 billion and sales from network to €1.9 billion, down 5% and 8% respectively on the first half of 2013. EBITDA stood at €332 million, €137 million less than in the first half of 2013. The company reported a current operating loss of €41 million and operating profit of €44 million after factoring in non-current income of €85 million(5) related notably to litigation settlements, which offset the costs of the adaptation plan. The "EBITDA minus Capex" item turned positive in the second quarter of 2014, at +€12 million, versus
-€17 million in the first quarter of the year.

1 An offer with data consumption higher or equal to 500MB/month

2 Customers having used the 4G network in the last three months (Arcep definition)

3 Includes high-speed and very-high-speed fixed broadband subscriptions

4 Company estimate for Q2 2014 and Arcep figures for Q4 2013 and Q1 2014

5 €429 million for litigation settlements and other minus €344 million in provisions for adaptation costs and other

As announced on 18 July 2014, Alstom's contribution to Bouygues' net profit is now booked only in the first and third quarters. Bouygues did not therefore book any contribution from Alstom in respect of the second quarter of 2014, compared with a contribution of €59 million in the second quarter of 2013.

Cash flow benefited from non-current income at Bouygues Telecom, while capital expenditure remained under tight control. Free cash flow(1) thus improved by €75 million in comparison with the first half of 2013 and stood at €230 million.
Net debt at end-June 2014 amounted to €5.2 billion, compared with €5.8 billion at end-June 2013 and
€4.4 billion at end-December 2013. The difference in relation to end-December 2013 was due to the usual seasonal effect at Colas, but also to the proceeds from the sale of Cofiroute for €780 million and Eurosport International for €256 million, as well as a particularly unfavourable trend in the working capital requirement, not representative of the full-year.
The Group managed to find the financial resources to withstand the decline in current operating profit in the first half of 2014 and to ensure the strength of its financial structure.

1 Before the change in working capital requirement. Excluding capitalised interest related to 4G frequencies for €21 million in the first half of 2013

Group sales are expected to be down very slightly in 2014, by between 1% and 2% in comparison with 2013. The slowdown in public-sector orders in France remains a point to watch in the second half of the year.
However, the construction businesses enjoy major strengths: strong momentum in their international
activities, an order book that provides good visibility, the diversity of business activities and expertise, and a great capacity to adapt. As a result, their financial performance should remain robust in 2014.
In a low-visibility context on the advertising market, TF1 is continuing to transform its business model. Its results will be marked by two exceptional events: the 2014 FIFA World Cup and the sale of Eurosport International.
Bouygues Telecom has confirmed its target of generating a slightly positive "EBITDA(1) minus Capex" item in
2014 and is continuing to implement its aggressive strategy.
It has the necessary strengths to regain increased competitiveness, as early as 2016, in a market with four players:
- a state-of-the-art mobile network and a comprehensive portfolio of frequencies;
- attractive offers and a technological breakthrough in the fixed activities;
- a cost structure adapted to the changed market through a plan to save €300 million a year on the total cost base from 2016.

1 EBITDA = current operating profit + net depreciation and amortisation expense + net provisions and impairment losses - reversals of unutilised provisions and impairment losses

3/11

Commenting on the Group's results in the first half of 2014, Martin Bouygues, Chairman and CEO of the Bouygues group, said: "Although our operating performance reflects a more challenging economic and competitive environment in France, I believe that Bouygues has become stronger since the start of the year. Our construction businesses are increasing their international presence, Bouygues Telecom is successfully rolling out its aggressive strategy and Alstom will offer good growth and upside potential following the deal with General Electric. In addition, over the last six months the Group has once again proved its capacity to ensure its financial strength."

Financial calendar:

14 November 2014: nine-month 2014 sales and earnings, 7.30am (CET)
You will find the full financial statements and notes to the financial statements on www.bouygues.com.
The financial statements have been subject to a limited review by the statutory auditors and the corresponding report has been issued.
The Half-year review is available on www.bouygues.com.
The full-year results presentation to financial analysts will be webcast live on 28 August 2014 at 11am on www.bouygues.com.

Press contact:

+33 (0)1 44 20 12 01 - presse@bouygues.com

Investors and analysts contact:

+33 (0)1 44 20 10 79 - investors@bouygues.com

4/11

Order books at the construction businesses (€ million)

Bouygues Construction 16,877 17,537 +4% Bouygues Immobilier 2,815 2,210 -21% Colas 7,570 8,242 +9%

TOTAL 27,262 27,989 +3%

Bouygues Construction order intake

(€ million)

France International TOTAL

Bouygues Immobilier reservations

(€ million)

Residential property Commercial property TOTAL

Colas

order book

(€ million)

Mainland France

International and French overseas territories

TOTAL

TF1

audience share1

TF1

TMC NT1

HD1

TOTAL

1 Individuals aged 4 and over. Source: Médiamétrie

Bouygues Telecom customer base

('000 customers)

End-Dec

2013

End-June Change

2014 ('000 clients)

Plan subscribers

o/w B&YOU subscribers

Prepaid customers

Total mobile customers

Total fixed customers

5/11

(€ million)

Other operating income and expenses 0 389(1) +€389m Operating profit 347 523 +€176m Cost of net debt (157) (163) -€6m Other financial income and expenses (7) 3 +€10m

Income tax expense (98) (59) +€39m

Investments in joint ventures and associates

o/w share of profits

o/w net capital gain on Cofiroute disposal

138

138

-

307

54

253(2)

+€169m

-€84m

+€253m

Net profit attributable to non-controlling

interests3 (35) (201) -€166m

1 Including non-current operating income of €81 million related to Bouygues Telecom and a capital gain of €308 million on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%)

2 Net capital gain at 100%

3 Formerly "Minority interests"

(€ million)

Sales 6,645 6,841 +3%

Current operating profit/(loss) Operating profit/(loss)

(77) (77)

(96)

100(1)

-€19m

+€177m

Net profit/(loss) attributable to the Group (42) 285(2) +€327m

1 Including non-current operating income of €196 million related to Bouygues Telecom

2 Including a net capital gain of €240 million on the sale by Colas of its stake in Cofiroute

(€ million)

Sales 8,449 8,341 -1%

Current operating profit

Operating profit

424

424

230

423(1)

-€194m

-€1m

Net profit attributable to the Group 230 125 -€105m

1 Including a capital gain of €308 million on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%) and non-current charges of €115 million at Bouygues Telecom

6/11

Sales

by business area

(€ million)

First-half

%

change

% change like-for-like and at constant exchange rates

Bouygues Construction Bouygues Immobilier Colas

Sub-total of construction businesses1

TF1

Bouygues Telecom

Holding company and other

+6% +7%

+4% +3%

-3% -2%

+2% +3%

-2% -2%

-5% -5%

nm nm

Intra-Group elimination (285) (284) nm nm

TOTAL 15,094 15,182 +1% +1% o/w France 10,466 10,193 -3% -3% o/w international 4,628 4,989 +8% +10%

1 Total of the sales contributions (after eliminations within the construction businesses)

(€ million)

Bouygues Construction 241 213 -12% Bouygues Immobilier 88 66 -25% Colas 58 34 -41% TF1 90 36 -60% Bouygues Telecom 469 332 -29% Holding company and other (17) (15) nm

Contribution of business areas to current operating profit

(€ million)

2013

First-half

Change

€m

Bouygues Construction Bouygues Immobilier Colas

Sub-total of construction businesses

TF1

Bouygues Telecom

Holding company and other

restated 2014

-€24m

-€13m

-€27m

-€64m

-€21m

-€132m

+€4m

TOTAL 347 134 -€213m

7/11

Contribution of business areas to operating profit

(€ million)

Bouygues Construction Bouygues Immobilier Colas

Sub-total of construction businesses

TF1

Bouygues Telecom

Holding company and other

First-half

2013

restated 2014

Change

€m

-€24m

-€13m

-€27m

-€64m

+€302m

-€47m

-€15m

TOTAL 347 523 +€176m

1 Including a capital gain of €323 million on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%)

2 Including non-current income of €85 million: €429 million from litigation settlements and other minus €344 million in provisions for adaptation costs and other

3 Including non-current charges of €4 million related to Bouygues Telecom and €15m for derecognition of goodwill related

to the sale of Eurosport International

Contribution of business areas to net profit attributable to the Group (€ million)

Bouygues Construction Bouygues Immobilier Colas

Sub-total of construction businesses

TF1

Bouygues Telecom

Alstom

Holding company and other

First-half

2013

restated 2014

%

change

-6%

-7% nm nm nm

-55%

-55%

nm

TOTAL 188 410 x2

1 Including a net capital gain of €372 million related to the sale of Cofiroute

2 Including a capital gain of €128 million on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%)

3 Including €147m for derecognition of goodwill at Holding company and other: €132 million related to the sale by Colas of

Cofiroute and €15 million related to the sale of Eurosport International

8/11

(€ million)

(€m)

Non-current operating income of €81m related to

Bouygues Telecom, net of taxes -

Net capital gain on the sale by Colas of its stake

in Cofiroute -

Net capital gain on the sale of Eurosport

International (31%) and the remeasurement of -

the remaining interest (49%)

Cofiroute contribution to first-half 2013 net profit -

Change in calculation method for Alstom

quarterly contribution -

(45) (240)

(113)

21

27

-€45m

-€240m

-€113m

+€21m

+€27m

(€m)

(€ million)

Net capital gain on the sale by Colas of its stake

in Cofiroute (372) -€372m

Cofiroute contribution to first-half 2013 net profit - 21 +€21m

(€ million - First-half 2014)

Net capital gain on disposal

- Goodwill at Holding company level

Net capital gain on disposal after goodwill

- Net capital gain attributable to non-controlling interests2 (3.4%)

385

0

385

0

385

0

385

-13

385

-132

253

-13

1 Colas contribution to net profit attributable to the Group

2 Calculated on net capital gain (at 100%) before goodwill

9/11

(€ million - First-half 2014)

Capital gain and remeasurement2 before tax 323 323 323

- Income tax expense

Capital gain and remeasurement2 after tax

- Goodwill at Holding company level

Net capital gain on disposal and remeasurement2

after goodwill

- Net capital gain attributable to non-controlling interests3 (56.5%)

-29

294

0

294

0

-29

294

0

294

-166

-29

294

-15

279

-166

1 TF1 contribution to net profit attributable to the Group

2 Net capital gain on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%)

3 Calculated on net capital gain (at 100%) before goodwill

(€ million)

Bouygues Construction 2,844 2,338 -€506m Bouygues Immobilier 239 26 -€213m Colas (1,141) (331)1 +€810m TF1 165 425(2) +€260m Bouygues Telecom (774) (971) -€197m Holding company and other (7,090) (6,661) +€429m

1 Including €780 million related to the sale by Colas of its stake in Cofiroute

2 Including €256 million related to the sale of the additional 31% stake in Eurosport International

Contribution of business areas to net capital expenditure

(€ million)

Bouygues Construction Bouygues Immobilier Colas

Sub-total of construction businesses

TF1

Bouygues Telecom

Holding company and other

TOTAL EXCLUDING EXCEPTIONAL ITEMS

Exceptional items

TOTAL

First-half

2013

restated 2014

Change

(€m)

+€32m

+€2m

+€37m

+€71m

=

-€70m

-€1m

=

-€21m

-€21m

1 Excluding capitalised interest related to 4G frequencies for €21 million at Group level (o/w €8 million at Bouygues Telecom

level and €13 million at Holding company level)

10/11

Contribution of business areas to free cash flow 1

Before change in working capital requirement

(€ million)

Bouygues Construction Bouygues Immobilier Colas

Sub-total of construction businesses

TF1

Bouygues Telecom

Holding company and other

TOTAL

First-half

2013

restated 2014

Change

(€m)

-€93m

-€16m

-€68m

-€177m

-€44m

+€284m

+€12m

+€75m

1 Free cash flow = cash flow - cost of net debt - income tax expense - net capital expenditure

2 Excluding capitalised interest related to 4G frequencies for €21 million at Group level (o/w €8 million at Bouygues Telecom

level and €13 million at Holding company level)

11/11

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