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Bouygues Sa — H1 2006 Earnings Presentation

63 slides from Bouygues Sa's earnings presentation, Sep 6, 2006

  1. Slide 1: Presentation of First-Half 2006 Accounts

    PRESENTATION OF FIRST-HALF 2006 ACCOUNTS 32 Hoche - PARIS 6 September 2006

  2. Slide 2: Forward-looking statements disclaimer

    This presentation contains projections and forecasts. They express objectives based on the current assessments and estimates of the Group’s senior management which are subject to many factors and uncertainties. Consequently, actual figures could differ significantly from projected figures. The follo

  3. Slide 3: Highlights, Business Areas, Accounts, Outlook and Objectives

    „ HIGHLIGHTS „ BUSINESS AREAS „ ACCOUNTS „ OUTLOOK AND OBJECTIVES

  4. Slide 4: Highlights in First-Half 2006

    HIGHLIGHTS IN FIRST-HALF 2006 „ Strong growth in Group net profit „ Announcement of an industrial and commercial partnership with ALSTOM and the acquisition of a 24.4% stake (at 1 September 2006) „ Strong commercial performances in all business areas „ Major success of Bouygues Telecom's new unlimit

  5. Slide 5: Strong commercial performances in first-half 2006

    STRONG COMMERCIAL PERFORMANCES IN FIRST-HALF 2006 „ Bouygues Construction 9 Orders taken: +37% (France: +22%, international: +63%) „ Bouygues Immobilier 9 Reservations: +22% (Housing: +14%, Commercial/Corporate Property: +84%) „ Colas 9 Order book: +16% (France: +11%, international: +21%) „ TF1 9 Ad

  6. Slide 6: Group: key operating figures

    BOUYGUES GROUP: key operating figures 1st half € million Change 2005 2006 Sales 11,043 12,052 +9% Operating profit 844 862 +2% Net profit att. to the Group 384 565 +47% As TPS and BTC were held for sale at end-2005, only their share of net profit was booked. Further rise in sales and earnings

  7. Slide 7: Group: debt situation

    BOUYGUES GROUP: debt situation at 30 June € million Change 2005 2006 Shareholders’ equity 5,053 5,806 +€753m Net debt before ALSTOM 3,980 2,923 -€1,057m Investment in ALSTOM - 2,192 ns Total net debt 3,980 5,115 +€1,135m Debt-to-equity ratio 79% 88% +9 pts 9 Standard & Poor’s credit rating maintaine

  8. Slide 8: Group: free cash flow

    BOUYGUES GROUP: free cash flow € million 1st half 2005 2006 Cash flow 1,453 1,382 - Cost of net financial debt -94 -78 - Income tax -260 -256 - Net operating investments -609 -707 Free cash flow 490 341 Increased investments in the first half

  9. Slide 9: Bouygues-ALSTOM: completion of the transaction

    BOUYGUES-ALSTOM: completion of the transaction „ Bouygues’ stake in ALSTOM 9 On 26 June 2006, Bouygues acquired the French government's stake in ALSTOM (29 million shares, 21% of capital) 9 On that date, Bouygues held a total of 23.26% of ALSTOM's capital and voting rights, including shares also pur

  10. Slide 10: Bouygues-ALSTOM: partnership

    BOUYGUES-ALSTOM: partnership „ Implementation of a framework for cooperation 9 Steering committee (9 members) ¾ General coordination 9 Commercial coordination committee (6 members) ¾ Upstream commercial cooperation ¾ Supervision of bids to tenders and negotiations Citadis urban tramway 9 Operational

  11. Slide 11: Share ownership structure at 30 June 2006

    BOUYGUES: share ownership structure at 30 June 2006 „ Capital „ Voting rights Foreign Foreign shareholders SCDM shareholders SCDM Groupe 18.4% Artémis 25.7% 2.1% (F. Pinault) 28.1% 35.0% Groupe 13.4% 2.4% Artémis Employees 17.6% (F. Pinault) 31.1% 26.2% Employees Other French Other French shareholde

  12. Slide 12: Share performance since 1 January 2006

    BOUYGUES: share performance since 1 January 2006 48 Bouygues CAC 40 46 +10% * 44 Share price in € 42 €41.31 * = 40 €41.30 at 30 Dec. 2005 38 36 Januaryjanvier-06 décembre-05 February March mars-06April février-06 avril-06May June mai-06 July juin-06 August juillet-06 août-06 * Close of 1 September 2

  13. Slide 13: Highlights, Business Areas, Accounts, Outlook and Objectives

    „ HIGHLIGHTS „ BUSINESS AREAS „ ACCOUNTS „ OUTLOOK AND OBJECTIVES

  14. Slide 14: Bouygues Construction: key figures

    BOUYGUES CONSTRUCTION (B/CW): key figures 1st half € million Change 2005 2006 Sales 2,943 3,261 +11% of which France 1,745 2,085 +19% of which international 1,198 1,176 -2% Current operating profit 137 141 +3% Current operating margin 4.7% 4.3% -0.4 pt Net profit att. to the Group 96 121 +26% Net ca

  15. Slide 15: Bouygues Construction: order book

    BOUYGUES CONSTRUCTION (B/CW): order book € bn New method Former method 8 7.6 At 30 June 2006 +27% (former method) France 7 53% 6.0 6.7 Americas 6 4% 5.0 5.2 78% 5 Other 4.6 4.6 5.2 7% Asia 4 11% Rest of Europe 2002 2003 2004 End-June End- End-June 25% 2005 2005 2006 „ Change in accounting method for

  16. Slide 16: Bouygues Construction: the Flamanville 3 contract

    BOUYGUES CONSTRUCTION (B/CW): the Flamanville 3 contract „ Bouygues Construction has been awarded the civil engineering package for the future Flamanville EPR nuclear power plant 9 Contract amount (share of Bouygues Construction): over €300m 9 More than 1,000 employees will work on the project 9 Sta

  17. Slide 17: Bouygues Construction: outlook

    BOUYGUES CONSTRUCTION (B/CW): outlook „ Construction businesses 9 The French market is still buoyant, notably in housing and the construction of public infrastructure 9 In Europe, Bouygues Construction is developing through external growth, packaged development projects and Public-Private Partnershi

  18. Slide 18: Bouygues Immobilier: key figures

    BOUYGUES IMMOBILIER: key figures 1st half € million Change 2005 2006 Sales 758 721 -5% o/w housing 500 566 +13% o/w corporate/commercial 258 155 -40% Current operating profit 72 80 +11% Current operating margin 9.5% 11.1% +1.6 pts Net profit att. to the Group 42 52 +24% Exaltis Tower Net cash at 30

  19. Slide 19: Bouygues Immobilier: reservations

    BOUYGUES IMMOBILIER: reservations 30 June 30 June Change Reservations 2005 2006 Housing Number of units 4,011 4,242 +6% Amount (€ m) 655 749 +14% Corporate/Commercial Office space (sq. m) 31,000 57,000 +84% Amount (€ m) 85 157 +85% TOTAL (€ m) 740 906 +22% Sharp rise in commercial activity

  20. Slide 20: Bouygues Immobilier: outlook

    BOUYGUES IMMOBILIER: outlook „ In France, a better balanced market environment 9 In the housing sector, the “soft landing” scenario is taking shape 9 In the corporate/commercial sector, there are signs of a recovery „ Contrasting international markets 9 A buoyant corporate/commercial sector in Spain

  21. Slide 21: Colas: key figures

    COLAS: key figures 1st half € million Change 2005 2006 Sales 3,993 4,507 +13% of which France 2,538 2,858 +13% of which international 1,455 1,649 +13% Current operating profit 38 70 +84% Current operating margin 1% 1.6%* +0.6 pt Net profit att. to the Group 46 70 +52% Net cash at 30 June (293) (398)

  22. Slide 22: Colas: order book

    COLAS: order book End-June End-June Change € million 2005 2006 Metropolitan France 2,590 2,863 +11% International and French 2,708 3,264 +21% overseas territories TOTAL 5,298 6,127 +16% Strong commercial activity

  23. Slide 23: Colas: outlook

    COLAS: outlook „ Roadworks in France: the market is levelling off „ Roadworks in international markets 9 Business is on the rise in North America, Central Europe and the Indian Ocean region 9 Stable business in Northern Europe „ Other activities: bright prospects 2006 Change Sales target (€ m) 2005

  24. Slide 24: TF1: key figures

    TF1: key figures 1st half € million Change 2005 2006 Sales 1,288 1,386 +8% core channel advertising 881 923 +5% other activities 407 463 +14% Current operating profit 250 209 -16% Current operating margin 19.4% 15.1% -4.3 pts Net profit att. to the Group 177 171 -3% France-Portugal semi-final Net ca

  25. Slide 25: TF1: leader in terms of audience share

    TF1: leader in terms of audience share January-July Channel Change 2005 2006 Women under 50 35.5% 34.9% -0.6 pt Individuals 4 years and over 32.0% 31.9% -0.1 pt Viewing time per person per day 3hrs 27 3hrs 26 -1 min (individuals 4 years and over) Advertising market share 54.2% 54.4% +0.2 pt Audience

  26. Slide 26: Pay-TV agreement: merger procedures

    PAY-TV AGREEMENT: merger procedures „ January 2006: a commercial agreement was concluded to merge the pay-TV businesses of TPS and the Canal+ group in an entity controlled by Vivendi „ April 2006: Competition Board examines the merger „ 13 July 2006: Competition Board releases merger report after co

  27. Slide 27: TF1: outlook

    TF1: outlook „ Contrary to popular opinion, the Internet boom is not cutting into the TV audience. „ After an expected 4% growth in 2006, the TV advertising market is likely to develop rapidly in 2007 once the market is opened to mass retailers. „ Technological innovation will create opportunities (

  28. Slide 28: Bouygues Telecom: key figures

    BOUYGUES TELECOM: key figures 1st half € million Change 2005 (1) 2006 Sales 2,150 2,182 +1% Net sales from network 2,029 2,029 = o/w sales excluding incoming traffic revenues 1,546 1,613 +4% EBITDA (2) 660 618 -6% EBITDA / net sales from network 32.5% 30.4% -2.1 pts Current operating profit 351 298

  29. Slide 29: Bouygues Telecom: financial structure

    BOUYGUES TELECOM: financial structure 1st half € million Change 2005 2006 Shareholders’ equity (1) 1,999 2,036 +2% Net debt (1) 1,003 398 Div. by 2.5 Debt-to-equity ratio 50% 20% -30 pts (1) End of period Cash flow 660 605 -€55m - Cost of net financial debt -17 -5 Div. by 3.4 - Income tax (2) -119 -

  30. Slide 30: Bouygues Telecom: H1 2006 market share

    BOUYGUES TELECOM: H1 2006 market share (France and overseas territories) „ Customer market share (1) „ Value market share (3) 1.9% (2) 16.9% Bouygues Telecom 19.3% Orange 35.5% 38.0% SFR 45.7% MVNO & other 42.7% (3) Source: operators (1) Source: ARCEP and operators (2) O/w MVNO: 1.4% Consolidated sa

  31. Slide 31: 2006: taking the offensive

    2006: taking the offensive Le 1° forfait mobile illimité tous opérateurS wistesjours ces 208

  32. Slide 32: Neo: a commercial success

    NEO: a commercial success 9 7 plans ranging from 2 to 15 hours 9 Unlimited calls to all operators 9 Free, unlimited emails Calls to 43 countries From 8pm to for the price midnight every day + of a call in France 671,000 Neo customers at end-June 2006 Creating a real difference with the rest of the m

  33. Slide 33: 2006: a year of commercial investment

    2006: a year of commercial investment The new offer was twice as successful As a result, costs rose as expected 9 Higher acquisition costs were due to 9 363,000 net Contract additions in H1 2006, volume effect, even though the unit thanks in particular to Neo acquisition cost was flat 9 Bouygues Tel

  34. Slide 34: Neo: a profitable investment

    NEO: a profitable investment „ Neo customers will generate the same profitability as Bouygues Telecom 9 ARPU of Neo customers is about €20 higher than for Contract customers 9 Less use of free minutes (observed with other unlimited offers) 9 Future decline in call termination rates „ 80% of Bouygues

  35. Slide 35: Bouygues Telecom: business customers

    BOUYGUES TELECOM: business customers „ 600,000 lines at end-June 2006 9 +15% in one year 9 Roughly 12% market share „ Growth of high value-added segments 9 SME customers: +16% in one year 9 Professional customers (self-employed): +18% in one year „ Strong sales growth 9 +10% in H1 2006 9 13-fold inc

  36. Slide 36: Bouygues Telecom: new business offer

    BOUYGUES TELECOM: new business offer „ An innovative fixed and mobile call management system Fixed Mobile Fixed Mobile FT ISP Fixed Internet Fixed + Mobile Internet „ Target: professionals, SME & big companies operating multiple sites „ Convergence offers customers several advantages 9 Employees are

  37. Slide 37: Bouygues Telecom: regulation

    BOUYGUES TELECOM: regulation „ Reductions in call termination rates imposed by ARCEP € cents 2004 2005 2006 Draft 2007 Calls to Bouygues Telecom 18.39 * 14.79 11.24 9.24 % change -17.4% -19.6% -24.0% -17.8% Calls to Orange / SFR 14.94 12.5 9.5 7.5 % change -12.5% -16.3% -24.0% -21.1% * Average rate

  38. Slide 38: Bouygues Telecom: roaming

    BOUYGUES TELECOM: roaming „ Wholesale price framework is positive for Bouygues Telecom 9 Lower purchase price for Bouygues Telecom 9 Limits on volume rebate mechanisms for its competitors „ Retail price framework 9 Difficult for operators to stand out from rivals 9 Operators and regulators are curre

  39. Slide 39: Bouygues Telecom: outlook

    BOUYGUES TELECOM: outlook „ 2006 sales target € million 2005 * 2006 Change Sales excl. incoming traffic revenues 3,155 3,342 +6% Incoming traffic revenues 989 833 -16% Net sales from network 4,144 4,175 +1% Total sales 4,447 4,471 +1% * Excluding BTC

  40. Slide 40: Bouygues Telecom: mobile TV

    BOUYGUES TELECOM: mobile TV „ Tests of DVB-H technology are conclusive 9 Strong customer appeal → wish to view their favourite programmes 9 Good quality image and sound 9 Mobile TV complements fixed TV „ The French audiovisual law must still be modified by autumn 2006 before the new service can be l

  41. Slide 41: Bouygues Telecom: contactless applications

    BOUYGUES TELECOM: contactless applications „ Bouygues Telecom draws on the experience of NTT DoCoMo 9 14 million Japanese mobile phones are equipped with contactless technology 9 Services available: transport and payment cards „ Transport: first step for Bouygues Telecom 9 Mobile phone with an integ

  42. Slide 42: Our vision of telecoms (1/2)

    OUR VISION OF TELECOMS (1/2) A review of UMTS In Europe, 60 operators have invested nearly €200bn (licences + networks), generating data revenues (excluding voice and text messages) that are so low that they have not been disclosed. This confirms that we have taken the right positions on 9 The price

  43. Slide 43: Our vision of telecoms (2/2)

    OUR VISION OF TELECOMS (2/2) The assets of mobile operators „ In the short and medium term (3 - 5 years), technologies will allow us to offer our customers data transfer 9 With a high capacity 9 In broadband 9 At a competitive price for the mass market Î In the data segment, mobile operators will be

  44. Slide 44: Bouygues Telecom: commercial performance

    BOUYGUES TELECOM: commercial performance Total customer Contract Prepaid base (Metropolitan France) H1 H1 H1 H1 H1 H1 2005 2006 2005 2006 2005 2006 SIM cards (thousands) 5,104 5,823 2,425 2,487 7,529 8,310 ARPU (€ / month) 57 52 ns ns 44 41 SAC (€ / customer) 237 251 27 27 156 170 Voice usage (min /

  45. Slide 45: Highlights, Business Areas, Accounts, Outlook and Objectives

    „ HIGHLIGHTS „ BUSINESS AREAS „ ACCOUNTS „ OUTLOOK AND OBJECTIVES

  46. Slide 46: Condensed consolidated income statement

    BOUYGUES: condensed consolidated income statement 1st half € million Change 2005 2006 Sales 11,043 12,052 +9% Operating profit 844 862 +2% Cost of net financial debt (90) (77) -14% Income tax expense (258) (249) -3% Net profit from continuing operations 521 560 +7% Net profit of discontinued or held

  47. Slide 47: Contribution of business areas to Group sales

    Contribution of business areas to Group sales 1st half € million Change 2005 2006 Bouygues Construction 2,790 3,155 +13% Bouygues Immobilier 758 721 -5% Colas 3,928 4,496 +14% TF1 1,277 1,377 +8% Bouygues Telecom 2,144 2,175 +1% Holding company and other 146 128 ns TOTAL 11,043 12,052 +9% of which F

  48. Slide 48: Contribution of business areas to Group EBITDA

    Contribution of business areas to Group EBITDA 1st half € million Change 2005 2006 Bouygues Construction 201 215 +€14m Bouygues Immobilier 88 69 -€19m Colas 183 215 +€32m TF1 306 246 -€60m Bouygues Telecom 660 618 -€42m Holding company and other (11) 59 +€70m TOTAL 1,427 1,422 = EBITDA = current ope

  49. Slide 49: Contribution of business areas to Group operating profit

    Contribution of business areas to Group operating profit 1st half € million Change 2005 2006 Bouygues Construction 137 152 +€15m Bouygues Immobilier 73 80 +€7m Colas 38 74 +€36m TF1 264 209 -€55m Bouygues Telecom 351 298 -€53m Holding company and other (19) 49 +€68m TOTAL 844 862 +2% As TPS and BTC

  50. Slide 50: Contribution of business areas to Group net profit

    Contribution of business areas to Group net profit „ Group share 1st half € million Change 2005 2006 Bouygues Construction 96 121 +€25m Bouygues Immobilier 42 52 +€10m Colas 44 68 +€24m TF1 76 74 -€2m Bouygues Telecom 182 273 +€91m Holding company and other (56) (23) +€33m +€181m TOTAL 384 565 +47%

  51. Slide 51: Contribution of business areas to Group cash flow

    Contribution of business areas to Group cash flow 1st half € million Change 2005 2006 Bouygues Construction 211 232 +€21m Bouygues Immobilier 75 66 -€9m Colas 184 219 +€35m TF1 299 264 -€35m Bouygues Telecom 660 605 -€55m Holding company and other 24 (4) -€28m TOTAL 1,453 1,382 -5% Including TPS and

  52. Slide 52: Contribution of business areas to Group net investments

    Contribution of business areas to Group net investments „ Net operating investments 1st half € million Change 2005 2006 Bouygues Construction 43 94 +€51m Bouygues Immobilier 1 (1) -€2m Colas 159 199 +€40m TF1 65 50 -€15m Bouygues Telecom 322 210 -€112m Holding company and other 19 155 +€136m TOTAL 6

  53. Slide 53: Contribution of business areas to Group free cash flow

    Contribution of business areas to Group free cash flow 1st half € million Change 2005 2006 Bouygues Construction 124 97 -€27m Bouygues Immobilier 50 43 -€7m Colas 10 (6) -€16m TF1 139 138 -€1m Bouygues Telecom 202 287 +€85m Holding company and other (35) (218) -€183m TOTAL 490 341 -30% Free cash flo

  54. Slide 54: Group: change in cash position in the first half

    BOUYGUES GROUP: change in cash position in the first half € million 2004 / 2005 / 2005 2006 Net cash at 31 December (year N-1) (1,875) (2,352) 9 Dividends paid -2,003 -463 9 Capital increase for Bouygues Confiance 3 scheme / +54 9 External acquisitions and disposals +897 +77 9 Share buyback -76 -44

  55. Slide 55: Group: net cash by business area

    BOUYGUES GROUP: net cash by business area End-June Change € million 2005 2006 (€ m) Bouygues Construction 1,470 1,757 +€287m Bouygues Immobilier 160 97 -€63m Colas (292) (398) -€106m TF1 (537) (391) +€146m Bouygues Telecom (1,001) (398) +€603m Holding company and other (3,780) (5,782) -€2,002m TOTAL

  56. Slide 56: Bouygues: financing policy

    BOUYGUES: financing policy Available cash: €6.5 billion 8000 7000 Debt repayment schedule 6000 5000 Undrawn MLT 4000 credit lines 3000 Option to buy 6.5% 2000 of Bouygues Telecom Cash 1000 0 Liquidity 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ... 2020 Very substantial liquidity Evenly s

  57. Slide 57: Highlights, Business Areas, Accounts, Outlook and Objectives

    „ HIGHLIGHTS „ BUSINESS AREAS „ ACCOUNTS „ OUTLOOK AND OBJECTIVES

  58. Slide 58: Bouygues: 2006 sales targets

    BOUYGUES: 2006 sales targets 2006 target Change 2005* Published in Published in 2006/2005 June September Bouygues Construction 5,815 6,450 6,550 +13% Bouygues Immobilier 1,557 1,720 1,650 +6% Colas 9,424 10,180 10,370 +10% TF1 2,489 2,640 2,650 +6% Bouygues Telecom 4,434 4,500 4,460 +1% Holding comp

  59. Slide 59: Bouygues: status report

    BOUYGUES: status report „ In four years, Bouygues has gradually redefined its scope of operations and strengthened its current businesses 9 Disposal under good conditions of businesses requiring additional investment or operating in a difficult competitive environment: Bouygues Offshore, Saur and TP

  60. Slide 60: Bouygues: strategic guidelines (1/2)

    BOUYGUES: strategic guidelines (1/2) „ The acquisition of a 24.4% stake in ALSTOM in 2006 has used up a large proportion of Bouygues’ investment capacity „ Backed by a sound financial structure, in the medium term the Group plans to 9 Expand further in the power and transport sectors 9 Increase remu

  61. Slide 61: Bouygues: strategic guidelines (2/2)

    BOUYGUES: strategic guidelines (2/2) „ In this context, Bouygues will focus on 9 Developing its knowledge of the power and transport businesses and establishing efficient cooperation with ALSTOM 9 Remaining vigilant on ¾ Technological and regulatory changes in telecoms and media ¾ Trends in construc

  62. Slide 62: Bouygues: financial calendar

    BOUYGUES: financial calendar „ 9 November 2006 9-month 2006 sales „ 7 December 2006 9-month 2006 earnings „ 12 February 2007 Full-year 2006 sales „ 28 February 2007 Full-year 2006 earnings „ 26 April 2007 Annual Meeting of Shareholders „ 9 August 2007 First-half 2007 sales „ 31 August 2007 First-hal

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Bouygues — H1 2006 Earnings Presentation on 6ix