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Bouygues: Nine-month 2012 Results

PARIS, November 14, 2012 /PRNewswire/ --

  • Sales: €24.6 billion (+4%)
  • Net profit: €564 million (-29%), impacted by Bouygues Telecom
  • Construction businesses' order book at a high level, up 10% at €26.9 billion
  • Alstom's performances validates its roadmap
  • Sales target revised upwards to €33.2 billion

The Bouygues group reported a 4% increase in consolidated sales in the first nine months of 2012 to €24.6 billion (up 1% like-for-like and at constant exchange rates).

Current operating profit amounted to €954 million, down 29% on the first nine months of 2011, and operating profit fell 38% to €859 million after the inclusion of non-recurring charges related to adaptation plans at Bouygues Telecom and TF1. Net profit was also down 29% at €564 million. In keeping with the half-year trend, these results are mainly due to the lower profitability at Bouygues Telecom.

The financial structure is sound, with net debt under tight control.

Key figures

 
    (EUR million)
                                       9-month 2011   9-month 2012       Change
 
    Sales                                    23,719         24,597          +4%
  
    Current operating profit                  1,338            954         -29%
    Operating profit                       1,376[1]         859[2]         -38%
    Net profit attributable to the 
    Group                                       794            564         -29%
 
    Net debt[3]                               3,808       5,832[4]   +EUR2,024m
    Net gearing[3]                              36%            61%      +25 pts


[1]Including €38 million of non-current income relating to an asset disposal at Bouygues Telecom

[2]Including €95 million linked to the cost of the adaptation plans at Bouygues Telecom and TF1

[3]End of period

[4]Net debt of €3,639 million before factoring in two one-off events: the share repurchase tender offer (€1,250 million) and the purchase of
4G frequencies (€943 million)

Business areas

In keeping with the first-half trend, the construction businesses posted good commercial performances. The order book stood at €26.9 billion, 10% higher than at end-September 2011, giving good visibility on future business activity.

Bouygues Construction reported nine-month sales of €7,748 million, up 9% overall (up 6% in France and 13% on international markets) and 4% like-for-like and at constant exchange rates. The current operating margin was a robust 3.4% and net profit amounted to €174 million, up 9%.

Order intake was very high, both in France and in international markets, growing 8% to reach €9 billion. The order book stood at €17 billion, 12% higher than at end-September 2011, with international markets accounting for 45%.

Bouygues Immobilier reported a 5% increase in sales to €1,631 million for the first nine months of 2012 (up 8% in residential property, down 16% in commercial property). The operating margin stood at 7.5%, reflecting early adjustment measures in response to lower residential property reservations in a contracting French market. Net profit amounted to €75 million.

In an unfavourable economic and tax environment, residential property reservations reflected the wait-and-see stance on the property market and a fall in buy-to-let investment. Reservations were 32% lower than in the first nine months of 2011 at €1,040 million. Commercial property reservations stood at a good level, up 6% to €358 million despite a sluggish market.

Sustained by the commercial property segment, the order book rose 9% in comparison with end-September 2011 to €2,879 million, offering good visibility and representing 14 months of sales.

Colas reported sales of €9,670 million, an increase of 5% overall (up 1% in France and 12% on international markets) and 3% like-for-like and at constant exchange rates. Current operating profit fell €38 million to €236 million, affected by delays in contract execution due to poor weather conditions in mainland France in the first half of 2012 and lower profitability on the sale of refined oil products. The cost of raw materials used in the refining activity has risen sharply and could only be partially passed on to customers.

Net profit amounted to €178 million, €31 million less than in the first nine months of 2011.

The order book grew 5% to €7 billion versus end-September 2011.

TF1 has launched the second phase of its optimisation plan

TF1 reported a 1% rise in sales to €1,853 million. The fall in advertising revenue was offset by the growth of diversification activities, up 6% on the first nine months of 2011, but continued to affect current operating profit, which stood at €154 million, down €41 million. TF1 has launched the second phase of its optimisation plan, designed to make its business model more flexible and to continue cutting costs. The plan aims to generate recurring cost savings of €85 million by end-2014. A non-recurring €25-million charge related to this plan was booked in the third quarter of 2012. Nine-month 2012 operating profit amounted to €129 million and net profit to €87 million, €38 million lower than in the first nine months of 2011.

Bouygues Telecom confirms its 2012 targets and is continuing its adaptation plan

Bouygues Telecom reported an 8% drop in nine-month 2012 sales to €3,951 million and sales from network dropped 8% to €3,518 million. As expected, mobile sales from network continued to decline in the third quarter, while sales in the fixed broadband segment showed strong growth.

EBITDA stood at €807 million, €228 million lower than in the first nine months of 2011, in line with the full-year target of €900 million. Current operating profit amounted to €206 million, reflecting the drop in EBITDA as well as the increase in amortisation expense and provisions. Operating profit for the first nine months of 2012, at €136 million, included a €70-million non-recurring charge related to the adaptation plan, booked in the third quarter. Net profit amounted to €76 million.

The €300-million adaptation and savings plan is being gradually rolled out and is expected to have a full impact in 2013. The voluntary redundancy plan concerning 556 employees is currently under way.

In keeping with the trend of the second quarter, Bouygues Telecom improved its commercial performance in the mobile segment. It acquired 178,000 new mobile customers, with a net gain of 11,000 customers, excluding the impact of integrating Darty Telecom and Simyo. 188,000 new plan customers joined Bouygues Telecom in the third quarter of 2012, including 64,000 Darty Telecom customers.

B&YOU continued to grow, with a total of 625,000 customers at end-September 2012.

Finally, Bouygues Telecom continued to expand on the fixed broadband market, with 359,000 net additions in the third quarter and 77,000 new customers excluding the impact of integrating Darty Telecom. This gave a base of 1.8 million customers[1] at 30 September 2012, up 57% compared with 30 September 2011.

[1]Includes broadband and very-high-speed broadband subscribers. Customers gained following the acquisition of Darty Telecom,

effective as of 24 July 2012, are included in Q3 2012 financial statements.

Alstom's performances validates its roadmap

As announced, Alstom contributed €181 million to the Group's net profit in the first nine months of 2012, compared with €134 million in the first nine months of 2011.

Order intake grew robustly by 19% to €12.1 billion in the first half of FY2012/13. The order book at end-September stood at €52 billion, representing 31 months' sales.

Alstom confirmed that it expects sales to grow by more than 5% per year for the current fiscal year and the next two fiscal years, matched by a steady improvement in the operating margin to around 8% by March 2015. Free cash flow is expected to be positive in each of the next three fiscal years.

Following Alstom's €350-million capital increase, via a private placement, on 4 October 2012, Bouygues' stake in Alstom has fallen to 29.4% from 30.7% on 30 September 2012.

Under IFRS, this event triggers a dilution loss of €53 million, which will be recognised as a non-current operating charge in the fourth quarter of 2012.

Financial position

A €109-million increase in free cash flow[1] in the construction businesses partly offset the €241-million[2] drop in free cash flow at Bouygues Telecom. Overall, the Group's free cash flow in the first nine months of the year amounted to €713 million[2], €173 million less than in the same period of 2011.

Net debt amounted to €5.8 billion at end-September 2012. This represents an improvement of €169 million in comparison with end-September 2011, before factoring in the purchase of two blocks of 4G frequencies (€943 million) and the share repurchase tender offer (€1,250 million).

The Group launched a €700-million bond issue in October 2012, redeemable in 2023. The Group has a high level of liquidity (€7.3 billion) and an evenly-spread redemption schedule.

[1]Before the change in working capital requirement

[2]Before investment in 4G frequencies in the first nine months of 2012 (acquisition cost and capitalised interest)

Significant events since 30 June 2012

  • 3 July 2012: Bouygues Telecom announces a voluntary redundancy plan concerning 556 jobs.
  • 3 July 2012: Bouygues Bâtiment International, a Bouygues Construction subsidiary, takes 100% ownership of Leadbitter.
  • 5 July 2012: TF1 signs the agreement for its new HD1 channel with the French broadcasting authority, CSA.
  • 28 August 2012: Bouygues Telecom and Darty announce the launch of Bouygues Telecom Edition Darty offers, sold exclusively in Darty's 226 stores.
  • 6 September 2012: B&YOU launches the only prepaid card without an expiry date and with the market's lowest prepaid rates for calls, SMS and mobile internet in mainland France.
  • 20 September 2012: Launch of the Campus Val de Bièvre project, designed and developed by Bouygues Immobilier under its Rehagreen® initiative.
  • 23 October 2012: Colas announces a project to reorganise its roads business in mainland France around seven regional subsidiaries, all under the Colas name.
  • 25 October 2012: Colas Rail, in a consortium, wins an €85-million contract to extend Line 1 of the Algiers metro.
  • 30 October 2012: Bouygues Construction, in a consortium, wins a €110-million contract to build several sports facilities in Canada.
  • 6 November 2012: B&YOU launches new ground-breaking offers on the low-cost mobile market.

2012 sales target and outlook

On the basis of the situation at 30 September, the 2012 sales target has been revised upwards from €32.8 billion to €33.2 billion, 2% higher than in 2011.

    Sales
 
    by business area
                                              2012 target

    (EUR million)         2011    Reported   Reported    Reported      Reported   % change
                                  in March     in May   in August   in November
                                                      
    Bouygues
    Construction           9,802    10,000    10,100       10,200       10,400         +6%
    Bouygues Immobilier    2,465     2,450     2,450        2,450        2,450          =
    Colas                 12,412    12,500    12,700       12,700       12,900         +4%
    TF1                    2,620     2,620     2,620        2,620        2,620          =
    Bouygues Telecom       5,741     5,140     5,140        5,180        5,200         -9%
    Holding company and
    other                    120       120       120          120          120          nm
 
    Intra-Group
    elimination            (454)     (480)     (480)        (470)        (490)          nm
 
    TOTAL                 32,706    32,350    32,650       32,800       33,200         +2%
    o/w France            22,601    22,050    21,950       22,050       22,300         -1%
    o/w international     10,105    10,300    10,700       10,750       10,900         +8%


The amended 2012 Budget Act and the 2013 Budget Act should result in higher taxes and charges of around €70 million in 2012 and about a further €10 million in 2013.

Financial calendar:

27 February 2013: full-year 2012 results

7.00 am: press release

9.00 am: press conference

11.00 am: analysts' meeting


The financial statements have been subject to a limited review by the statutory auditors and the corresponding report has been issued.

You will find the full financial statements and notes to the financial statements on http://www.bouygues.com.



http://www.bouygues.com

 
                       
    Condensed consolidated
    income statement                         9-month         % change
    (EUR million)                       
                                         2011       2012                   
                                          
    Sales                              23,719     24,597          +4%
 
    Current operating profit            1,338        954         -29%
 
    Other operating income and
    expenses                            38[1]    (95)[2]           nm
 
    Operating profit                    1,376        859         -38%
 
    Cost of net debt                    (205)      (212)          +3%
     
    Other financial income and
    expenses                              (1)          8           nm
 
    Income tax expense                  (395)       (232)        -41%
 
    Share of profits and losses from
    associates                            143        210         +47%
 
    Net profit                            918        633         -31%
 
    Minority interests                  (124)       (69)         -44%
 
    Net profit attributable to the
    Group                                 794        564         -29%


[1]Non-current income relating to an asset disposal at Bouygues Telecom

[2]Cost of the adaptation plans at Bouygues Telecom (for €70 million) and TF1 (for €25 million)

        
    Third-quarter consolidated                 
    income statement                     Third-quarter        
    (EUR million)                        2011      2012     % change
 
    Sales                               8,505     9,092          +7%
 
    Current operating profit              586       478         -18%
 
    Operating profit                   624[1]    383[2]         -39%
 
    Net profit attributable to the
    Group                                 403       286         -29%


[1]Including €38 million of non-current income relating to an asset disposal at Bouygues Telecom

[2]Including €95 million linked to the cost of the adaptation plans at Bouygues Telecom and TF1

    Sales                                                                    Change
    by business area                                                  like-for-like
    (EUR million)                     9-month         % change      and at constant
                                                                     exchange rates
                                 2011         2012                                                
 
    Bouygues Construction       7,086        7,748         +9%                 +4%
    Bouygues Immobilier         1,548        1,631         +5%                 +5%
    Colas                       9,168        9,670         +5%                 +3%
    TF1                         1,839        1,853         +1%                   =
    Bouygues Telecom            4,285        3,951         -8%                 -9%
    Holding company and
    other                          90           94          nm                  nm
 
    Intra-Group
    elimination                 (297)        (350)          nm                  nm
  
    Total                      23,719       24,597         +4%                 +1%
          o/w France        16,391[1]       16,367           =                 -1%
      o/w international      7,328[1]        8,230        +12%                 +4%
 


[1]Export sales of refined oil products were reclassified according to their location

    Contribution of business areas
    to
    EBITDA
    (EUR million)                         9-month        % change
                                       2011     2012
  
    Bouygues Construction               370      432         +17%
    Bouygues Immobilier                 126      117          -7%
    Colas                               595      538         -10%
    TF1                                 229      201         -12%
    Bouygues Telecom                  1,035      807         -22%
    Holding company and other          (41)     (24)           nm
 
    TOTAL                             2,314    2,071         -11%


    Contribution of business areas
    to current operating profit           9-month        % change
    (EUR million)                     
                                       2011     2012
 
    Bouygues Construction               266      260          -2%
    Bouygues Immobilier                 127      123          -3%
    Colas                               274      236         -14%
    TF1                                 195      154         -21%
    Bouygues Telecom                    512      206         -60%
    Holding company and other          (36)     (25)           nm
 
    TOTAL                             1,338      954         -29%


    Contribution of business areas
    to net profit attributable to the
    Group                                 9-month       % change
    (EUR million)                                 
                                       2011     2012
 
    Bouygues Construction               159      174         +9%
    Bouygues Immobilier                  78       75         -4%
    Colas                               201      172        -14%
    TF1                                  55       38        -31%
    Bouygues Telecom                    316       68        -78%
    Alstom                              134      181        +35%
    Holding company and other         (149)    (144)          nm
 
    TOTAL                               794      564        -29%


    Net cash by business area              9-month         Change
    (EUR million)                                          (EURm)
                                       2011      2012
 
    Bouygues Construction             2,393     2,700    +EUR307m
    Bouygues Immobilier                 275       168    -EUR107m
    Colas                             (823)     (786)     +EUR37m
    TF1                                  87      (18)    -EUR105m
    Bouygues Telecom                  (440)   (1,475)  -EUR1,035m
    Holding company and other       (5,300)   (6,421)  -EUR1,121m
 
    TOTAL                           (3,808)   (5,832)  -EUR2,024m


    Contribution of business
    areas to cash flow
    (EUR million)                         9-month          Change
                                                           (EURm)
                                      2011       2012
 
    Bouygues Construction              400        419     +EUR19m
    Bouygues Immobilier                129        121      -EUR8m
    Colas                              620        621      +EUR1m
    TF1                                242        169     -EUR73m
    Bouygues Telecom                 1,052        723    -EUR329m
    Holding company and other           40         62     +EUR22m
 
    TOTAL                            2,483      2,115    -EUR368m


    Contribution of business
    areas to net capital
    expenditure
    (EUR million)                          9-month        Change
                                                          (EURm)
                                      2011       2012
 
    Bouygues Construction              177        117    -EUR60m
    Bouygues Immobilier                  7         10     +EUR3m
    Colas                              252        223    -EUR29m
    TF1                                 29         18    -EUR11m
    Bouygues Telecom                   536        586    +EUR50m
    Holding company and other          (4)          4     +EUR8m
 
    Total excl. 4G frequencies
    (800 MHz band)                     997        958    -EUR39m
    4G frequencies (800 MHz band)        0     715[1]   +EUR715m
    TOTAL                              997      1,673   +EUR676m


[1]Includes acquisition cost and capitalised interest

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