Bouygues: First-quarter 2016 results

2a2f9812-496c-4152-adac-c6f2c3b66324.pdf

Paris, 13 May 2016

Bouygues press release

First-quarter 2016

• Good commercial performance and sharp improvement in results at Bouygues Telecom
• Continued commercial momentum in the construction businesses
• As every year, results are not indicative of the Group's full-year performance
• Full-year 2016 outlook confirmed

Key figures (€ million)	First-quarter 2015	First-quarter 2016	Change
Sales	6,731	6,534	-3%
Current operating profit/(loss)	(194)	(140)	+€54m
Operating profit/(loss)	(216)a	(227)a	-€11m
Net profit/(loss) attributable to the Group	(157)	(180)	-€23m
Net profit/(loss) attributable to the Group excl. exceptional itemsb	(145)	(137)	+€8m
Net debtc	4,264	3,524	-€740m

1. Including non-current charges of €22 million at Bouygues Telecom in Q1 2015 and non-current charges of €87 million in all businesses in Q1 2016

2. See reconciliation table on page 9

3. At 31 March

   The first quarter of 2016 saw a good commercial performance by Bouygues Telecom and a sharp improvement in its results:

   • 151,000 new mobile plan customers excluding MtoMa and 71,000 new fixed customers in a highly competitive market;

   • year-on-year increase of 6% in total sales and 4% in sales from network, compared with a decline of 4% in the first quarter of 2015 and an increase of 1% in the fourth quarter of 2015;

   • improvement of 2.3 points in the EBITDAb margin in comparison with the first quarter of 2015.

     Commercial momentum continued in the construction businesses:

   • the order book stood at a high €29.9 billion, up 3% on end-December 2015 and almost flat on end-March 2015;

   • major contracts were won in France during the first quarter, including the Port of Calais extension, Tour Alto in La Défense and renovation of the Louvre Post Office building in central Paris.

As every year, the Group's first-quarter operating performance is not indicative of full-year performance, mainly due to the highly seasonal nature of Colas' business and the application of IFRIC 21.

The Group reported a net loss of €180 million in the first quarter of 2016, compared with €157 million in the first quarter of 2015. This figure included non-current charges of €87 million versus €22 million in the first quarter of 2015. Excluding exceptional itemsc, net loss attributable to the Group would have improved by

€8 million (a net loss of €137 million in the first quarter of 2016 versus a net loss of €145 million a year earlier).

1. Machine-to-Machine

2. EBITDA/sales from network

3. See reconciliation table on page 9

Outlook for 2016 confirmed

The outlook for 2016 provided with the full-year 2015 results release is confirmed.

Thanks to the strategy of transforming its businesses, the Group should continue to improve profitability in 2016.

The construction businesses will continue to target growth in international markets and broaden their portfolio of offers with innovative products and services in both existing markets and new market segments. Their profitability is expected to improve starting in 2016.

Bouygues Telecom confirms its target of a return to long-term growth in sales and profits and maintains its EBITDA target margin of 25% in 2017 with a plan to save at least €400 million in 2016 versus end-2013. Capital expenditure is expected to reach €750-800 million in 2016.

The roll-out of network sharing with the Numericable-SFR group combined with adaptation plans in the businesses are likely to result in non-current charges of around €270 million which will affect the Group's operating profit in 2016.

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Detailed analysis by sector of activity

Construction businessesa

The order book for the construction businesses at end-March 2016 reached the high level of €29.9 billion, 3% higher than at end-December 2015 and almost flat on end-March 2015.

The quarter saw the first signs of stabilisation in the construction market in France. The order book at end-March 2016 stood at €14.1 billion, almost flat on end-March 2015.

Order intake at Bouygues Construction rose over the quarter and included the conclusion of major contracts such as the Port of Calais extension, Tour Alto in La Défense and renovation of the Louvre Post Office building in central Paris.

Residential property reservations at Bouygues Immobilier rose 12% year-on-year, boosted by the effects of the Pinel tax incentive and wider access to the zero-interest loan programme, which took effect on 1 January 2016. Colas' roads business in mainland France is slightly down by 3%, in line with full-year expectations, after two years of sharp decline (14% in 2014 and 11% in 2015).

In international markets, the order book at end-March 2016 stood at €15.8 billion, almost flat on end-March 2015. International business at end-March 2016 accounted for 57% of the order book at Bouygues Construction and Colas, stable in comparison with end-March 2015.

Sales in the construction businesses reached €4.9 billion in the first quarter of 2016, down 5% on the first quarter of 2015 (-3% like-for-like and at constant exchange rates). The current operating loss of €116 million mainly reflects Colas' seasonality and is not indicative of full-year performance. The operating loss of €136 million includes non-current charges of €20 million mainly related to losses at the Dunkirk refinery (SRD).

(a) Bouygues Construction, Bouygues Immobilier and Colas

TF1

TF1's four freeview channels reached an aggregate audience sharea of 27.3% of individuals aged 4 and over in the first quarter of 2016, down 0.4 points year-on-year. In a fiercely competitive environment, the group maintained the prime-time pulling power of its core TF1 channel, while its DTT channels achieved a good performance among the target audiences, especially women aged under 50 purchasing decision-makers.

Sales were €482 million, up 1% in comparison with the first quarter of 2015. They benefited from the integration of Newen Studios, consolidated since 1 January 2016.

Current operating profit in the first quarter of 2016 was €15 million, down €13 million. TF1 posted an operating loss of €19 million after non-current charges of €34 million related to the change in accounting treatments of French drama, the transformation plan and the operating loss at the LCI channel.

(a) Source: Médiamétrie

Bouygues Telecom

The first quarter of 2016 saw a good commercial performance at Bouygues Telecom and a sharp improvement in its results, confirming the turnaround started in 2015.

The operator added 240,000 mobile customers in the first quarter of 2016, and 151,000 plan customers excluding MtoMa, giving a total of 12.1 million customers at end-March 2016.

4G penetration within Bouygues Telecom's customer base continued. It had 5.6 million 4G usersb at end-March 2016, representing 55% of the mobile base excluding MtoM, compared with 36% in the first quarter of 2015. The growth of 4G was accompanied by a continuing increase in usage. 4G customers' average monthly data consumptionc was 2.7 GB in the first quarter of 2016, compared with 2.2 GB in the first quarter of 2015.

Bouygues Telecom continued to grow steadily in the fixed market, adding 71,000 new customers in the first quarter of 2016. FTTHd services contributed 20% to net growth over the period. At end-March 2016, the fixed broadband subscriber base reached 2.9 million.

Bouygues Telecom's sales rose by 6% in the first quarter of 2016 to €1,131 million, and sales from network by 4% to €971 million. EBITDA increased by €28 million to €146 million. The EBITDA margin was 2.3 points higher than in the first quarter of 2015. The current operating loss of €33 million represented an improvement of

€29 million. The operating loss amounted to €55 million after non-current charges of €22 million related to the roll-out of network sharing with Numericable-SFR.

These results validate the strategic choices made by Bouygues Telecom, which has the strengths necessary to achieve its objectives in a market with four operators.

1. Machine-to-Machine

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

3. Data consumed on 3G or 4G cellular networks, excluding Wi-Fi

4. Fibre To The Home - roll-out of optical fibre from the optical access node (place where the operator's transmission equipment is installed) to homes or business premises (Arcep definition)

   Alstom

   Alstom's contribution to Bouygues' net profit in first-quarter 2016 is €0 million, after including:

   • Alstom's results reported on 11 May 2016 for FY2015/16 ended 31 March 2016;

   • the impacts at Bouygues of the sale by Alstom of the Energy activities in November 2015;

   • the effects of the public share buy-back offer carried out by Alstom in January 2016;

   • the reversal of the balance of the write-down recognised at Bouygues at 31 December 2015.

The carrying amount of Bouygues' interest in Alstom at 31 March 2016 was €1,914 million (or €30.83 per share). Alstom's contribution to Bouygues' net profit in first-quarter 2015 was €0 million.

Financial situation

Net debt was €963 million higher than at end-December 2015 and mainly reflects the usual seasonal effect of Colas' business. It includes the positive impact of the Alstom public share buy-back offer carried out in late January 2016 (+€996 million), the acquisition of Newen Studios (-€291 million at 100%) and the first instalment for the 700 MHz frequencies (-€117 million).

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