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Bouygues SA — Investor Presentation (October 2006)
46 slides from Bouygues SA's investor presentation, October 2006
Slide 1: Bouygues Group Presentation October 2006
Bouygues Group Presentation October 2006 Investor Relations Department
Slide 2: Disclaimer and agenda
This document contains projections and forecasts. They express objectives based on the current assessments and estimates of the Group’s general management which are subject to many factors and uncertainties. Consequently, actual figures could differ significantly from projected figures. The followin
Slide 3: The Bouygues Group today: profile of a diversified industrial group
3 THE BOUYGUES GROUP TODAY three business areas and a stake Roadworks Building / Civil Works Property (1984) (1952) (1956) 96.4 % 100 % 100 % CONSTRUCTION (2006) 24.4% stake Cooperation agreement POWER - TRANSPORT (1994) (1987) TELECOMS MEDIA 89.5 % (1) 42.9 % (1) Agreement with BNP Paribas Group fo
Slide 4: Bouygues: key figures over 5 years
5 BOUYGUES: key figures over 5 years (million euros) Sales EBITDA 23,402 24,073 3,505 22,247 21,822 20,473 20,894 + 18% 2,943 x 2.1 2,415 2,730 2,260 1,680 2001 2002 2003 2004 2004 2005 2001 2002 2003 2004 2004 2005 French GAAP IFRS French GAAP IFRS Operating profit Net profit 1,748 Non-recurring it
Slide 5: Group key operating figures and debt situation
7 BOUYGUES GROUP: key operating figures 1st half Full Year Change € million 2005 2006 2005 Sales 11,043 12.052 + 9% 24,073 Operating profit 844 862 + 2% 1,748 Net profit att. To the Group 384 565 + 41% 832 9 As TPS and Bouygues Telecom Caraïbes (BTC) were held for sale at end-2005, only their share
Slide 6: Bouygues Group: free cash flow
9 BOUYGUES GROUP: free cash flow € million 1st half Full year 2005 2006 2005 Cash flow 1,453 1,382 3,090 - Cost of net financial debt - 94 - 78 - 187 - Income tax - 260 - 256 - 570 - Net operating investments - 609 - 707 - 1,229 Free cash flow 490 341 1,104 Increased investments in the first half 20
Slide 7: Agenda: The Businesses
11 THE BOUYGUES GROUP slide 2 THE BUSINESSES slide 11 GROUP OUTLOOK slide 49 THE BOUYGUES - ALSTOM DEAL slide 55 APPENDIX 1: FINANCIAL DATA slide 63 APPENDIX 2: BUSINESS DRIVERS slide 77 11 12 12 Investors presentation –October 2006
Slide 8: Bouygues Construction: Building & Civil Works and order book
13 BOUYGUES CONSTRUCTION : Building & Civil Works From design and construction to operation : a world leader A global operator involved at all stages of the value chain A recurring high cash position (€1.9bn at end 2005) 1st half Full Year Million euros Change 2006 2005 Sales 3,261 + 11% 6,131
Slide 9: Bouygues Construction: outlook
15 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 Partner
Slide 10: Bouygues Immobilier: key figures and reservations
17 BOUYGUES IMMOBILIER: key figures Corporate & Commercial Leading property developer in France Housing Property 22% 78% No speculative exposure, thanks to prudent business guidelines H1 2006 revenue breakdown by activity 1st half Full Year Million euros Change 2006 2005 Sales 721 - 5% 1,557 Ope
Slide 11: Bouygues Immobilier: outlook
19 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 Sp
Slide 12: Colas: profile and key figures
21 COLAS: profile of a world leader A seasonal but non-cyclical activity A local business (clients are mostly local communities) A vertically integrated company 9 Ownership of quarries 9 Production of aggregates, asphalt mixes and emulsions A 16.7% stake in Cofiroute, a private motorway comp
Slide 13: Colas: order book and strengths
23 COLAS: order book End-June End-June € million Change 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 24 COLAS: strengths Material reserves : 9 560 quarries and gravel pits 9 Presen
Slide 14: Colas: a non cyclical business and outlook
25 COLAS: a non cyclical business French GAAP IFRS 10 000 9,540 9 000 Sales 8 000 11 .8% 7 000 gro wth: n nual age a 6 000 €m 5 000 Aver 4 000 3 000 2 000 1 000 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2005 350 307 300 Net profit : 15.8% 250 n ual growth ge an Avera 200 €m 150 100 50 0 19
Slide 15: TF1: profile of the French leader
27 TF1: profile of the French leader The leading channel in France TF1 channel Other 9 35% of audience share * advertising activities • TF1 channel: 32% • Thematic channels: 3% 33% 67% 9 54,4% of the advertising market share * A successful diversification H1 2006 revenue breakdown (excluding TPS
Slide 16: TF1: key figures and outlook
29 TF1: key figures 1st half Full Year Million euros Change 2006 2005 Sales 1,386 + 8% 2,509 core channel advertising 923 + 5% 1,648 other activities 463 + 14% 861 Operating margin 15,1% - 5,4 pts 14,1% Net profit att. to the Group 171 - 3% 236 As TPS was held for sale at end-December 2005, only its
Slide 17: Bouygues Telecom: share ownership structure and key figures
31 BOUYGUES TELECOM: share ownership structure Agreement with BNP Paribas 9 In June 2005, Bouygues entered into a put-and-call agreement with BNP Paribas on its 6.5% stake in Bouygues Telecom. 9 Booked at 30 June 2005, the agreement generated an additional 444M€ of debt for Bouygues at end-June 20
Slide 18: Bouygues Telecom: financial structure and market share
33 BOUYGUES TELECOM: financial structure 1st half Full Year € million Change 2005 2006 2005 Net debt (1) 1,003 398 Div. by 2.5 441 Debt-to-equity ratio 50% 20% -30 pts 21% (1) End of period Cash Flow 660 605 -€55m 1,261 (4) - Cost of net financial debt -17 -5 Div. by 3.4 -26 - Income tax (2) -119 -1
Slide 19: 2006: taking the offensive
35 2006: taking the offensive 35 36 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 re
Slide 20: 2006: a year of commercial investment
37 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 9 Bouygue
Slide 21: Bouygues Telecom: commercial performance and regulation
39 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 (mi
Slide 22: Bouygues Telecom: competitive environment and outlook
41 BOUYGUES TELECOM: competitive environment Arrival of MVNOs on the French market 9 Expected to make the market more fluid, MVNOs accounted for only 1,4% of the market at end-June 2006 9 Trends: ¾ Emergence of brand licences ¾ Low-cost MVNOs, targeting the youth market Bouygues Telecom’s respon
Slide 23: Bouygues Telecom: technologies and mobile TV
43 BOUYGUES TELECOM: reminder of different technologies EDGE and UMTS currently offer similar capabilities EDGE is ten times cheaper than UMTS The real break will come with the 2nd generation UMTS (HSDPA) Actual download speed: network to mobile Actual upload speed: mobile to network Kbps 1,50
Slide 24: Contactless applications
45 NEW FUNCTIONALITIES: contactless applications (1/2) Tomorrow’s services 45 46 BOUYGUES TELECOM: contactless applications (2/2) Bouygues Telecom draws on the experience of NTT DoCoMo 9 14 million Japanese mobile phones are equipped with contactless technology 9 Services available: transport an
Slide 25: Our vision of telecoms: a review of UMTS
47 OUR VISION OF TELECOMS 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 of
Slide 26: Agenda: Group Outlook
49 THE BOUYGUES GROUP slide 2 THE BUSINESSES slide 11 GROUP OUTLOOK slide 49 THE BOUYGUES - ALSTOM DEAL slide 55 APPENDIX 1: FINANCIAL DATA slide 63 APPENDIX 2: BUSINESS DRIVERS slide 77 49 50 50 Investors presentation –October 2006
Slide 27: Bouygues: 2006 sales targets and status report
51 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 c
Slide 28: Bouygues: strategic guidelines
53 BOUYGUES: strategic guidelines 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 constructio
Slide 29: Agenda: The Bouygues-Alstom Deal
55 THE BOUYGUES GROUP slide 2 THE BUSINESSES slide 11 GROUP OUTLOOK slide 49 THE BOUYGUES - ALSTOM DEAL slide 55 APPENDIX 1: FINANCIAL DATA slide 63 APPENDIX 2: BUSINESS DRIVERS slide 77 55 56 56 Investors presentation –October 2006
Slide 30: Bouygues & Alstom: completion and synergies
57 BOUYGUES & ALSTOM: completion of the transaction Bouygues’ stake in ALSTOM : 24.4% at 1st september 2006 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 votin
Slide 31: Bouygues & Alstom: common vision and benefits
59 BOUYGUES & ALSTOM : a common vision The world power and transport infrastructure market is growing rapidly 3 Necessity of new equipment and systems 3 High growth prospects for services Local and international markets 3 Need to develop closer relations with customers 3 Requirement for internat
Slide 32: Flamanville contract and Alstom key figures
61 BOUYGUES & ALSTOM partnership 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
Slide 33: Agenda: Appendix 1 Financial Data
63 THE BOUYGUES GROUP slide 2 THE BUSINESSES slide 11 GROUP OUTLOOK slide 49 THE BOUYGUES - ALSTOM DEAL slide 55 APPENDIX 1: FINANCIAL DATA slide 63 APPENDIX 2: BUSINESS DRIVERS slide 77 63 64 64 Investors presentation –October 2006
Slide 34: Condensed consolidated income statement and sales by business
65 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 h
Slide 35: Contribution to Group EBITDA and operating profit
67 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 = As TPS and BTC we
Slide 36: Contribution to Group net profit and cash flow
69 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 +4
Slide 37: Contribution to net investments and free cash flow
71 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 TOTA
Slide 38: Net cash by business area and financing policy
73 BOUYGUES GROUP: net cash by business area End-June Change € million End - 2005 2005 2006 (€ m) Bouygues Construction 1,470 1,757 +€287m 1,874 Bouygues Immobilier 160 97 -€63m 150 Colas (292) (398) -€106m 415 TF1 (537) (391) +€146m (351) Bouygues Telecom (1,001) (398) +€603m (441) Holding company
Slide 39: Bouygues: return on capital employed
75 BOUYGUES: return on capital employed (1) 2003 2004 2005 French GAAP IFRS IFRS At business level Bouygues Construction (2) +++ +++ +++ Bouygues Immobilier (3) +++ +++ +++ Colas 22.8% 26.8% 34.6% TF1 16% 17.9% 15.5% Bouygues Telecom 8.5% 12.3% 15.4% At Group level Bouygues 8.6% 12.7% 16.5% (1) Curr
Slide 40: Agenda: Appendix 2 Business Drivers
77 THE BOUYGUES GROUP slide 2 THE BUSINESSES slide 11 GROUP OUTLOOK slide 49 THE BOUYGUES - ALSTOM DEAL slide 55 APPENDIX 1: FINANCIAL DATA slide 63 APPENDIX 2: BUSINESS DRIVERS slide 77 77 78 78 Investors presentation –October 2006
Slide 41: Major public-private projects
79 MAJOR PUBLIC-PRIVATE PROJECTS Since 2002, 18 major contracts won combining public and private funding These projects can take different legal forms: PFI, PPP, concession, etc. This market is growing fast due to: 9 increased needs in public infrastructure and facilities 9 efficiency drives 9
Slide 42: Colas in Central Europe; TF1 advertising breakdown
81 COLAS: developments in Central Europe 1989: the group began search for companies to acquire Strong growth in sales, due to: Poland 9 steady development in 15 years of a network Czech of local firms having a broad range of activities Republic Slovakia 9 infrastructure renewal investment in the
Slide 43: Bouygues Telecom: roaming and business customers
83 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 cu
Slide 44: Bouygues Telecom: licences and i-mode Alliance
85 BOUYGUES TELECOM: licences UMTS licence (€619 million): straight-line amortisation from May 2005 until its expiry in 2022 Renewal of GSM licences: 9 1% tax on sales 9 upfront fee of €25 million per year Î These conditions will apply to Orange and SFR as of March 2006, and to Bouygues Telecom
Slide 45: Share ownership structure and financial calendar
87 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 shareho
Slide 46: Bouygues share details and IR contact
89 BOUYGUES SHARE DETAILS Listed on the Eurolist of Euronext – compartment A ISIN Code : FR0000120503 Bloomberg code : EN FP Reuters code : BOUY.PA Indexes : CAC 40, Euronext 100, FTSE Eurofirst 80, DJ STOXX 600 Sector classification : 9 MSCI / S&P: Telecommunication Services 9 FTSE / Do