Bouygues

Good morning everybody and welcome to this presentation of the Brigg Group's 2021 results, which I will be commenting with Pascal Granger before taking your questions at the end of this presentation. We'll have the heads of all our five businesses here to answer your questions this morning. Yes, the questions will be at the end of the presentation. If that's okay, we're going to go through the presentation. Okay, we are back posting growth because our results are excellent, as a result of which the Board of Directors is proposing a dividend of €1.80 per share, which is a good reflection of our confidence about our future. Net debt is at an historically low level, as a result of which we have great investment capacity. And in 2021, we grasped two unique opportunities with the view to enhancing the group's resilience. We've presented them in the order in which they should be closed. The first of these is the proposed acquisition of Equans, which should enable us to create the number two worldwide in multi-technical services. This would actually change the very scale of the group. And the second goal... Hopefully the second merger will be the proposed merger between TF1 and M6, thus creating a major French media group. Now, our performance in 2021 has been aimed at creating and sharing value, something we've been doing for a number of years, and I just wanted to remind you of that. The first pillar of this strategy is the group's positioning in very diversified businesses that drive growth, over the long term. This enables us to ensure that the group is resilient in difficult times. Today we're going to present results that are a direct consequence of what we've done. In other words, we've strengthened and grown the construction and multi-technical services businesses. We have continued to wrap up the growth of Brie Telecom and consolidated TF1's positioning to enable TF1 to take up the challenges created by the global platforms. This would be through streaming and the content. The second major pillar of our strategy is optimization of our margins and optimization of the group's development. For each of our businesses we have margin optimization plans that are producing results. Colas would be a very good example of that. We also have a very selective investment policy and Our external growth transactions are highly targeted, as was the case with the acquisition of Distia to develop Kodas in Northern Europe. Our financial strategy is highly disciplined, and our CSO, or Corporate Social Responsibility Strategy, which we presented to you in December of last year, our CSO strategy is at the core of our growth strategy, but I'll come back to that. The third pillar of our strategy is our cash culture, recurring free cash flow and sharing of value with our stakeholders, particularly our clients, employees, and of course our shareholders, which of course means that the dividend continues to grow. I'd like to elaborate a little bit on the two transactions that we initiated in 2021. Again, in the order in which they should be closed out, beginning with Equans. Here again, our goal is to become a leader in multi-technical services operating in growth markets, energy transition, digital transition, and Equans is a company with a very large number of small contracts, meaning that the whole business is highly resilient. This is an acquisition which, thanks to the contribution of our own green energy and services business will create synergies and improve our margins. I'll elaborate on that in a few minutes. There's very little cap-out. It's not capital intensive at all, meaning that we have a strong cash generation. And, of course, where are we in this transaction? On the right-hand side, you'll see the forecast schedule. Our syndicated loan was announced on the 3rd of December last. This is how we plan to fund the closing. We are awaiting the opinions of the employee representative bodies at Engie and Equans in the next few weeks, which will then enable us to sign the share purchase agreement. We expect that the closing will take place after the various opinions we're awaiting and the antitrust body also the agreement for foreign entities to purchase Equan. We expect all that to lead to a closing in the second half of this year. Now, with the merging of TF1 and 6, this would create a major French media company. There are two parts to this transaction. The first of these is the more defensive side, which means that by aggregating the cost of programming, this would give us greater access to content. Of course, the content side of GAFA means that we are finding it increasingly difficult to have access to content. The more, let's say, aggressive side of this transaction is to ramp up the rollout of our French streaming platform over the next few years. So there's a gradual build-up of television consumed in a non-linear manner. In other words, streaming. This means that we will be able to arm the group for this transition to streaming. Third aspect, far from negligible, is the estimated annual synergies, which we have estimated at between 250 and 350 million euro. This should enable us to fund the more aggressive side of the ramp-up of streaming. On the right-hand side, you have the timeline. This is the forecast timeline anyway. Broadly speaking, we started exclusive negotiations last May. We've been talking with the antitrust authority and expect the antitrust authority's opinion in the autumn of this year. It will take a few weeks before the new market regulator authorizes this change of control, all this leading to a closing out of the deal and ultimately that lead to the merging of these two entities after the various AGMs somewhere at the end, the very end of 2022 or the early days of 2023. So, our 2021 guidance, well, we've either achieved or exceeded our guidance in the various areas. You see that on slide number eight. We announced sales very close to the level of 2019. We've achieved that because we finished the year at 37.6 billion. which is just 0.9% below the level we achieved in 2019. We gave guidance for our current operating product very close to 2019. Again, we've exceeded that because we finished the year at 1.7 billion, up 17 million on 2019. And the third guidance was our current operating margin, which we announced at the pre-crisis level, that's pre-COVID if you prefer, We've exceeded that guidance because we've finished with a margin of 4.5% up 1 percentage point by comparison with 2019. Let's now take a look at the group's key figures. This is page 9. At 37.6 billion euros, annual sales were up 8% by comparison with 2020. Sales are therefore back to the level we had before COVID. So this pickup is particularly noticeable in France. France, a country that was particularly affected by a very strict lockdown and a very gradual pickup of business in 2020. Current operating income, current operating profit at 1.693 billion, which is an increase of 471 million over 2020 and a 17 million increase over 2019. Again, the basis for comparison, the most relevant one is 2019 because This was before the COVID crisis. Current operating margin at 4.5%, up from 3.5% in 2020. Also above the level we had in 2019, which was then 4.4%. And this margin improvement was mainly due to the very good performance of Kola, who approved their margins, and TF1, who posted a record year. Finally, the group's net profit was was 1.125 billion after 1.184 in 2019. The number of non-recurring items, in particular, the contribution of Alstom, 221 million, 219 million, sorry, in March and June when we sold our Alstom shares, plus 31 million in the non-recurring expenses. Now, these are expenses that we recorded in 2021 for the purposes of the ECON's acquisition. and the merging of TF1 and M6. These were mainly legal expenses, economic research, and so on. Now, the group's financial structure is particularly solid. Briggs' net debt is at a historically low level, at less than €1 billion, at €941 million at the end of the year, after being close to €2 billion at the end of 2020. Debt ratio... is down from 17% in 2020 to 7% of equity. That's debt equity ratio down to 7% in 2021. This financial structure enables us to be reassured about our future investment strategy. And, of course, if you look at the rating agencies' figures, This was subsequent to the announcement we made about the proposed equant acquisition, while Moody's confirmed a rating of 8.3 with a stable outlook, and Standard & Poor's have given us an A- with a negative credit watch. This brings me to the dividend. The dividend is up. The Board of Directors will be proposing to the shareholders at the AGM a 10 euro cent increase to 1 euro 80 per share. That's a 6% increase over 2020. Again, a reflection of the group's confidence about its future. On this slide, you can see a good illustration of our dividend policy, which is a gradual ratcheting up of the floors that we exceed from time to time. When we presented the results last year, we said we'd come back to give you information about our CSO approach. So here again, we have enumerated four aspects of this CSR approach that characterize 2021. The first of these is quality of life at work, which we've improved, particularly with the extending of the common benefits platform that we've extended worldwide. This is the program we call BeCare. The second aspect is the launch of our second gender balance plan for 2021-23, which we've launched on a global scale for the entire group, Third aspect is the pledges we've made to set up transversal committees to work on biodiversity, whether it's about preserving or restoring biodiversity in each of our business lines. And finally, after presenting our climate strategy back in December last, we told you that we would get back to you in early 2022 to report on the expense we have envisaged with a view to reducing our carbon footprint. So we've looked at the expense over the period 2022 to 2024 and we've estimated the total expenditure at 2.2 billion euro. This will be aimed at methods or mostly construction methods which will enable us to reduce our carbon footprint. I propose now to move on to our review of operations beginning with the construction business.

On this slide, you have the Birmingham tramway built by Colas Rai. And we start with the order book for the construction business. The backlog stands at 33.2 billion euros. The overseas share is up three points at 65% of the backlog in international markets. And as you can see on the bar chart, if you look at the backlog, we're very close to the levels we've been having ever since the end of 2018, anywhere between 33.1, 33.2, with a low point at 33 billion euros in 2019. At 33.2, that does include the Destia order book to the tune of 755 million euros. On this slide, you have one of the operations we've been conducting in the U.S. with a logistics center in Miami. If you look more closely at the backlog, as Kodas, we have a record level, 10.7 billion euros, up 9% on constant forex, not including the main forex. disposals and acquisitions by Colas, and that reflects the fine sales performance, especially in Q4. You have two major projects that we finished in Q4. First, the design and build projects for the Manila subway to the tune of 680 million euros, and then we have a multi-annual maintenance contract for the motorways in the UK for €400 million, of which €160 million were recognized in the order book. At reconstruction, the backlog stands at €20.8 billion at end December 2021, up compared to end September. And so we took on new deals in the Q4, and even though some business were executed, we have been able to grow. We have significant new orders, the deployment, the rollout of FTTH in Brittany, the two data centers in Frankfurt, or the new property development business in Gentilly. And Bouygues Immobilier, our property company, the bookings are up, reservations are up 16%, but the problem is that we have, it's taking longer and longer to get building permits, plus in the commercial business, that is for commercial property, customers are waiting and seeing to see how they will sort of reorganize after the COVID pandemic. situation and work from home and that sort of thing. So they have to decide what their office policy will be, that is, commercial property. On page 17 now, we look at the financial performance of our construction business, 27.9 billion euros. The revenue is up 7% in all three businesses. Current operating profit stands at at 825 million euros, much better than 2020. Current operating margin 3.0%, 1.3% up compared to 2020. Current operating profit in 2021 is very close to 2019, even though revenue was down 6% over the period, which shows that all the metiers have been working hard to boost profitability. Now, let's zoom in, as it were, on energy and services. Of course, we cannot discuss the numbers of equants that is being acquired by Engie, but you can see a parallel between the two, equants and energy and services. And so we wanted to zoom in to just show what kind of company this was and the work that had been done. that has been achieved. There were some significant improvements at Brigg Energy and Service, and we've been working on improving profitability, and the results are right there. So Brigg Energy and Service is there throughout the supply chain from the generation of electricity to the end use. We have 22,000 employees around the world. That Brigg Energy and Service, BYES, has a very diversified portfolio, many small contracts. We have the average amount of 64,000 euros per contract. In 2021, there were as many as 55,000 different projects running throughout the year. Geographically, we have a diversified footprint as well, one-third in France, the balance out of France. The business segmentation is also well balanced because the most significant one is the building management system that accounts for about a quarter of our business and the rest is evenly distributed and so the risk is evenly distributed as well. We also need to point out that 50% of the contracts were more than eight years in the making. long-term relationship and with an 80% renewal rate. If you look at the sales of Brigg Energy and Service, we left out Axum, which is counted on the equity method. We are 9% up compared to 2021, compared to 2020, but because there's very little CapEx used, the CapEx to sales ratio is low, most of the revenue turns into, well, most of the profit turns into cash. And the second slide shows, well, there are confidence in our capacity to improve profitability and gain an additional 5%. or rather to go above 5%, I beg your pardon. Ever since 2019, we had someone from Pierre Langstrumpf-Legat came from the service business. He decided to work on profitability, giving preference to profit margin than volume. And this happens to be a growing market and a digital market. and indeed the energy transition will provide growth over the long run, and so we can certainly gain from the growth in the market itself. But that means we can, in that favorable context, give precedence to profit margins. So in 2018, we were in the red. 2019, we crossed over to plus 2.1, 2.8 in 2021, and we are confident that we will reach the 5% mark which is also the objective we have for the equants. The action plan that Pierre-Longso Chigat launched, and that was in agreement with the equants management when we decided to join that company or to take them over, rather, what works with $4 billion could work with $12 billion. Of course, we're looking at... well, much larger numbers, but the same order of magnitude. And so we have every reason to believe we can achieve the same profitability. The cash generation now, almost 500 million euros between 2019 and 2021 at Bouygues Energy and Service, now standing at almost 600 million euros by end 2021. Now, that's a net cash position made possible because, of course, we have been working hard at – making people cash-sensitive at Brigham and Zia. So we work with agencies just like Colas. These branches are in a position to deliver profit margins that are consistently good, provided, of course, the decision-making takes place close to the field, and indeed our management must be close to the field, and that is what's happening now. has been delivering and so we are very confident that we will be able to pull off the same kind of performance with Equance. TF1, well the numbers were published on 11 February. Gilles here spoke to you about the performance at TF1. numbers are much better than in 2020. And indeed, 2029 revenue, 2.4 billion euros up 17% on one year, 4% compared to 2019. That was made possible because, of course, there was sustained advertising investment after the end of the COVID crisis. And then also there was content production by Newend. There's a real demand for that. And so the fact that we have a good production force with the new one, that certainly makes a big difference. So current operating profit standing at 343 million, which is better than, certainly better than 2020, where it was below 200, even better than 2019, where it was at 255. It's a 15-year high. And, of course, the F1's objective was to have operating profits margin above 12%. Well, we certainly achieved that because now we stand at 14.1%, so well above the target. So what's the outlook for TF1? Well, we certainly propose to strengthen the media industry, as it were. We are reaching out to our viewers, but also we are well up of new developments. There's a real desire for content worldwide, and we are providing it on every platform, especially the non-linear platforms. We telecom now, of course, sales have been growing steadily. December 21 gives us, not including machine-to-machine, we have as many as 14.8 million mobile plan customers. including two point, so growth of 2.6 including 2.1 acquired through BTBD, BTBD being the company we acquired at the end of December 2021. So in 2021, in spite of, well, we have an additional 569,000 customers in 2021, including 133,000 in Q4. We have the numbers given regarding ambition for 2026. So we gave you that chart last year. We wanted to have 4 million new customers by end 2026. Well, out of the 4 million new customers, we already have 2.6 acquired in 2021 alone. And so all we need is to have an additional 1.4 million over 2026. the remaining 20 quarters, and we're confident that we'll be able to achieve this. Regarding our fixed customers, we have in SDTH, well, there comes a 52% of all our fixed customers, 718 new customers in 2021, with 201,000 in Q4 alone, And so we have 4.4 million new customers, so 278,000 new customers in 2021, including 74,000 in Q4. The target was to have 3 million customers in FTTH by end 2026. We already have 0.7. And so 2.3 million new customers in FTTH is our ambition for 2026. And again, we're very confident that we'll be able to achieve this. All the more because the British Telecom Fund has just concluded, well, at least found the way and means to roll out fiber throughout the French territory. By end December 2021, we had 24.3 million premises already marketed, up to 6.6 million year-on-year. And the second part of this is, of course, we've been stepping up the rollout of these fiber with Vauban Infra-Fibre, which will make it possible to cover the entire territory, including that now covered by SFR. And so we will be cover – well, we will also reach out to the – PIN network that is for the less covered areas and so we had 24 million premises at end 2021 and the additional FTTH customers will be easily found to arrive at ambition 2026 which you saw in the previous slide. Another important point in what seems to be a turbulent You may remember ABPU, average billing per user. Now, that's the bill paid, settled by the customer, which stands at 20.5 euros per month, up 50 cents a month, year on year. And that's for the mobile. For the fixed, it stands at 28.2 euros. up 40 cents over the year. You have to keep in mind that when we acquire FDTH acquisitions for new customers, the first year the customer gets a 50% discount. So having ADQ going up in that context is something of a challenge because we're reintroducing a large number of customers who are paying half the price. And yet we managed to increase the average billing per user Looking at our guidance, well, we reached our objectives. In 2021, organic growth was about 5%, so we met that guidance. We expected EBITDA, including BTBD, and including the dilutive effects of these customers because the ABPUs was less than that of wheat, and yet we managed to increase EBITDA. And capex, net capex was up to about 1.3 billion euros. At least the figure was reached at roughly 1.3 billion euros. Now, of course, when ABPU goes up, it means that revenue goes up. That was up 13 percent, sorry, 14 percent, including the service business, including BTBD. Even when you leave them out, it's still 5%, but it is quite a significant performance in what is after all a rather flat market, has been flat for the past three years. The revenue from the fixed is up 3%. If you look at the years 19, 20 and 21, on the services sales, and that's almost an additional billion euros that was added over these past three years, 990 million euros. Mr. Diaz will correct me if I'm wrong, but he is nodding, saying that it's the right figure. And their bid after lease is up 7% at 1.2 billion, 1.612 billion, sorry. Well, the mixed effect of FTTH means that you have new customers who pay half the price first year, and yet ADPU is up year on year. What's the outlook then for BRIC Telecom in 2022? Well, we're looking at growth in sales from services estimated at about 5%. EBITDA increase after lease is about 7%. even though there are additional expense, capital expenditure for the fixed line and the mobile network is being more dense. And so it means that there's more leases that we need to pay out. And gross capital expenditure confirmed at 1.5 billion euros, and that's to be ready for a growing base, but also new uses, especially in the mobile world, Having said all this, I'll now give the floor to Pascal Lebranger, who will give you a detailed presentation of the numbers.

Thank you, Olivier, and good morning, everybody. Just a few additional comments about the financial statements at December 31st, 2021. Concerning the income statement on page 32, I'm not going to elaborate on sales and current operating profit. They've already been commented by Olivier. As for other operating income and expenses, in 2021, they amounted to €40 million. Just for the record, last year, this was an expense, a non-recurring expense of €98 million. As already said, at the end of December 2021, the figure actually includes €91 million in non-recurring income at WeTelecom, mainly due to capital gains on the sale of data centres. This income is partly offset by non-recurring expenses amounting to €8 million at Brig Immobilier, part of the adaptation measures, also €10 million at Colas due to the decommissioning of Dunkirk and the acquisition of Destia, plus €31 million at TF1 and Brig SA due to the Equans project and the proposed merger of TF1 and M6. Cost of net debt has improved by €12 million over the period, mainly due to interest expense on bonds that are lower at big SA with the redemption of more expensive bond issues. As for the lower part of the income statement, we have an income expense of €432 million at the end of December 2021, up on 2020, which is only natural because income was higher. This calculation reveals an effective tax rate of 29% after 36% in 2020. 2020 was a very special year due to COVID, but also after 32% in 2019, which was mainly due to the lowering of the rate of interest, the tax rate, should I say, in France. The share of net profit of joint ventures and associates between the end of 2020 and 2021 was relatively stable. This item includes, in particular, the contribution of Alstom, that was €219 million, as mentioned by Olivier, plus losses generated by SEAF and Brieg, Salto at TF1, and Wojo at Brieg Immobilier. Overall, net consolidated income was €1.305 million at the end of December. The group share was €1.125 billion, up from €696 million at the end of 2020. Let's now move to page 33 to look at the group's balance sheet at year-end 2021. The total of the balance sheet was €44.6 billion, up from €40.6 billion at year-end 2020. Non-current assets amounted to €21.7 billion, up slightly, up by €189 million exactly. Several explanations for this variation. Property, plant and equipment was up €562 million. due to investments in the network carried out by Greek Telecom. As for Goodwill, Goodwill rose by €214 million, almost entirely as a result of the Decia transaction. Investment in joint ventures and associates was down €665 million, of which €711 million were due to the various transactions we carried out in 2021 concerning our stake in Alstom. Current assets rose by 3.8 billion over the period. This included 2.3 billion increase in cash and cash equivalents. On the liability side, shareholders' equity rose by 917 million. This in particular reflects our income for the period, the dividends, and income and expenses recognized directly under equity. Non-current liabilities rose by 359 million euros. This was mainly due to the increase in non-current debt. That was a €261 million increase. The reclassification of current liability for the debt we redeemed recently was compensated by a new bond issue for the same amount. This is in February 2013 for a total of €333 million borrowed from the European Investment Bank. Current liabilities rose by almost 2.8 billion between the end of 2020 and the end of 2021. This increase was mainly due to the increase in current debt, that's an 850 million euro increase, as a result of the reclassification of the Greek S.A. bond maturing in February of this year, and current operating liabilities in line with the increase in business in 2021. Let's now move on and take a look at our net debt and how it evolved in 2021. This is on page 34, by the way. As Olivier said earlier on, our net debt increased €941 million at the end of 2021, down over €1 billion by comparison with 2020. This is due to the following. €984 million due to the disposal of our stake in Alstom in March and then in June. 265 million expense on acquisitions, essentially the acquisition of Destia by Colas, 49 million euro generated by the raising or exercising of stock options and others, and we spent 93 million to buy back treasury shares, including 5 million under the terms of the liquidity contract. The amount spent on treasury shares is much higher than what we spent in previous years. As explained at a previous presentation, we decided to offset the dilution brought about by the exercise of stock options and to limit the impact of future buit confiance e-stops, e-stop transactions. The dividend represented 738 million euros and operations generated a positive flow of €1.189 billion. I now propose we move on to the next slide to look at the details in the net debt position. Let's begin with net cash flow, which includes the lease obligations amounted to €2.8 billion, up €467 million over a one-year period, in line with the increase in business over the period. This is also higher than 2019, where, just for the record, net cash flow amounted to 2.64 billion. Investment in operations amounted to 1.9, that's net capex 1.974, that's a 362 million euro increase, and a reflection of the upward trend in investment, in particular at retail income, aimed at accelerating the group's activity in the next few years. The change in working capital requirements, for operational reasons, amounted to a total of €359 million. This because, in particular, a sharp increase in working capital requirements for operating purposes, that was a total of €204 million after a period in 2020, which saw working capital requirements increase by €477 million. Overall, cash flow generated by operations was at the same level as in 2020, despite a sharp increase in capex, which is in itself a very satisfactory performance. That brings me to the end of my presentation of Sandra's statements, so thank you for your attention, and Olivier, I can give you back the floor. Let's now conclude rapidly by a few words about the outlook for the group in 2022. In 2022, the group has started the year with a confidence, despite what's currently happening in Europe at the present moment, but we expect to increase further, as indeed we expect current operating profit to improve in 2022. As for our carbon footprint, which is an important, even an essential aspect of our future, well, after approving the targets set by SBTI for Colas and the Colas Group, we are now aiming at group certification for all our businesses which will enable us to certify our carbon reduction trajectory, the one we have proposed anyway. One of the group's particularities is the fact that we have made commitments about all our activities whether in scope 1, 2 or 3. We also have two of our businesses that fall under Scope 3B. A lot of businesses only come under Scopes 1 and 2, but in construction, our inputs, and particularly concrete, have a considerable impact in terms of our carbon footprint. There's not much point in making commitments if we don't include Scope 3, which is what we did, and this is why we have also made commitments under Scope 3. I said we have started the year in good conditions, that we are confident about the merging of TF1 and FIX, which will give us a good foothold in the future and change the very scale of the group, not to mention equans. That brings me to the end of our presentation. The time has come to answer your questions. I am here with all the heads of our various businesses and the group's senior management. Ladies and gentlemen, time for questions, if you have any. If you wish to raise a question or comment, anything, please press button number one on your keyboard and then I will invite you to ask your question. The first question is from Nicolas from HSBC. Thank you and good morning. I have three brief questions concerning construction, first of all. The inflated prices of materials. Give us the breakdown of your sales figure, particularly your ability to pass on price increases, and that includes subcontracting and wage increases. My second question is somewhat more surprising, which concerns country risk. 12% of your sales come from outside of France and the UK. I was wondering what proportion you have in Eastern Europe and what are the potential consequences of the Russian intrusion in Ukraine in terms of sanctions. Third question on telecoms. 7% EBITDA growth expected in 2022. Has that anything to do with the agreement you just signed with Vauban? I'm going to let Benoit think about the answer to your third question. In the meantime, let me work backwards as regards Eastern Europe. We don't have any presence in Russia or Ukraine. We have very little presence in Eastern Europe. Colas has some presence in Hungary and Czech Republic and Slovakia. Sorry, not the Czech Republic, Slovakia. But broadly speaking, our footprint is very small in Eastern Europe and the figures are very small. Greek construction also has operations in Croatia. So country risk is, well, country risk to us there is very, very small. There may be the consequences of the overall economic situation, but it's not because we're not present in certain countries that there will not be any impact on the broader economy. Third question concerning construction costs and how we can pass on price increases on raw materials to our clients. There are very different situations in construction, depending on whether it's moving construction, Colas, or big immobilier. Let me begin with Colas. Let's ask Frédéric to tell you about how he sees our ability to pass on these costs. Okay, well, for Colas, We're relatively covered against inflation, be it in terms of staff costs or raw materials, because our contracts tend to be short. As Olivier said earlier on, we work through agencies, and most of our contracts are short-term. We have a lot of public contracts with revision formulae that protect us, not completely, but protect us rather well against increased costs. So, broadly speaking, we have very little exposure to this type of risk. We're rather well-hedged. Thank you, Pascal. Well, as we've said, the situation is very different in the energy services. We, too, have rather short contracts and the ability to adapt to our sales price rather quickly as our costs increase. For the longer-term contracts, larger contracts, how much can we pass on? Well, in our very large infrastructure projects, which is about 10 to 15% of our sales. We can but in public and certain private contracts we have price indexation formulae which means that our prices will increase and our takings will increase depending in accordance with the cost increases. Finally for fixed price contracts with purchasing we have a number of master contracts over a longer period of time but with that enable us to caution any sharp increases in costs. The final part concerning big real estate, big immobilier, we too are somewhat protected, particularly in the tertiary sector, because our products are indexed. As for residential property, part of our production is sold as our programs evolve. That's about 60%. though we also have a formula for price indexation that covers us against these increases. One final point concerning wage increases that you refer to. It's not so much a matter of wage inflation. It's just that the problem is actually finding the resources for our business. There are two very sensitive areas, North America and the UK, where there's a lot of tension in the labor market. So that's the problem we have with resources. As for inflation... As you've heard, we are capable of passing it on because they're largely covered by indexation. Telecoms. Benoit had time to prepare his answer. Okay. The project... This is his first time to take the floor, so I'm sure he'll be kind to him. The question concerns the impact on the EBITDA, especially as a result of the Vauban contract that we announced this morning, which will secure access to... fiber in all our public initiative network areas. This will be a marginal impact. The idea behind this project and the consequences indeed are all included in the 2026 plan that we presented to you last year. So it's all built into our guidance. Thank you, Benoit. Matthew Robillard from Barclays. Good morning and thank you for taking my questions. I have three, if I may. My first question concerns construction, pure construction. The group guidance for sales and the current operating profit. Could you give us some more detail for construction? What's your medium-term target in terms of margin? I know you intend to increase it, but do you feel that we'll see this come through in 2022? My second question concerns working capital at group level. As you said, you've performed well by reducing your working capital. You've done so for several years now, but do you believe that you still have room to improve on working capital? It's not something you give guidance on, but if Do you believe that you can improve your working capital in the future? My third question concerns telecoms. I see that your ARPU has continued to increase despite promotional drives at the entry level in the market, but I was wondering if in 2022 you will still have the possibility to increase prices. You know, promotional prices are low, so I think the gap is going to widen, which will probably lead to a certain level of churn. So my question is, are you confident about this gap gradually being created? Okay, we'll do that. I'm going to talk about improved margins in construction, broadly speaking. We're back to our pre-crisis levels in terms of margin. In 2022, we expect our current operating margin to increase on the margin in 2022, 2021, I should say. For Colas, sharp upturn in business in 2021, particularly the initial benefits of the changes that were brought in by Frédéric Gardès over the last two years with improved productivity in all industrial businesses. The new businesses of Colas are which has also improved profitability, as a result of which we can confirm our current operating profit margin, which we estimate at 4% for 2022, which will be higher than in 2021. It was 3.3%, not quite 4%, which is the target we're aiming at for 2023. As for Bouygues Immobilier, our current operating margin will be stable. We expect it to be stable this year with sales and current operating profit at the same levels as in 2021. I forgot to mention that we have not got a lot of stock to sell. Working capital, maybe Pascal would like to take that one. Well, as you pointed out quite correctly, we do not give any guidance on changes in working capital for a very simple reason, because it's a combination of several factors. Have we any room for improvement as regards working capital? The answer is yes, we have. We found that in all our businesses, a lot of work has been put into improving our working capital, but we continue to improve. And you'll have seen in the figures that Olivier gave you for Big Energy and Services that over the space of a few years, we've improved considerably. So that's the first factor. We have action plans, plans of action that enable us to improve our working capital. The second factor is the rhythm of our contracts. They anticipate down payments, intermediate payments. There's a whole series of mechanisms whereby the contractual clauses cannot be modeled. And so far as it can't be modeled, we ask our people to do the very best they can to achieve the best possible results. And that's produced results over the last two years. But we can't say at the start of the year if our working capital will have improved further or whether it will have remained stable. or even whether it will deteriorate somewhat. There's nothing really at stake here. It's really the pace of our contracts that determines working capital. Benoit, a few words. As for the mobile market in France and the average revenue per user, yes, there are still promotional drives, and we systematically respond. Every time there is this type of promotional drive, we gain customers. Now, however, these are limited in time. They're usually for a short period. Now, they tend to be over 10 euro, whereas historically, at least not so very long ago, we had promotional drives around the 5 euro mark. They're now always over 10, and they're always concerned entry-level, strictly digital offerings, so this does not in any way counter our strategy of increasing our AUPU. But increased usage is a great way of rolling out a more-for-more strategy.

Thank you.

The next question comes from Mrs. Vierney-Rouchelon from Odoo. Hello, good morning. Thank you for taking my question. I have two questions on construction, number one, regarding orders from local authorities. Some of your competitors found that in H2, there was not much by way of public orders. Was that the same for you? What are your expectations for 2022 in France, from local authorities in France? That was question number one. Number two, could us, we find that the EBIT margin is up compared to 2019, but EBITDA margin is down. because there's less depreciation compared with 2019. Can you tell us why? Frederic is the man to take the answer. Yes, well, regarding part one, orders from local authorities, H1 was pretty buoyant, indeed better than expected, but it's true. H2 was not as dynamic. We do expect some recovery in 2022, nothing crazy, though, a moderate resumption in business. But, of course, we're not basing ourselves just on volume, but new business and the transformation of our business. France, it is, of course, so what has driven Conace's numbers is orders from the private sector. Regarding EBITDA versus EBITDA, for the past few years, we've been focusing our investment where it does make a difference on manufacturing assets or when you have solutions to rent out, to lease out equipment or such like. We might do this hence. less by way of depreciation. If there are fewer acquisitions, there's less depreciation as well. But what you have to keep in mind is we do want to keep the cash to possibly acquire companies, and that means that assets will enable us to acquire the companies rather than being in a building that already belongs to us. We have a question on the other side, on the other line, the English line.

The question comes from the line of Sam McHugh from BNP Paribas Exxon. Please go ahead.

Thank you, Jean. Just two questions, please. The first on the telephone business. We've seen a very nice acceleration in broadband growth in 2021 versus 2020. as you've extended your FIBA bills and the BTBD distribution deal. As we look out for 2022, do you think we should be expecting a further acceleration in broadband growth in parts? And the second question on energy and services, thanks for the detail on contract duration. You talked about inflation earlier. When I think about the average of eight-year contract duration How are those contracts typically priced for inflation? And I don't know if you can give us any color on equans and how equans is maybe different or the same to your existing energy and services business in terms of contract duration and how inflation gets passed through on those contracts. Thank you very much.

Thank you. So we will start first with Benoit. It will let the time to Pascal to prepare himself for the second one, which is not an easy one. So first with Benoit.

I think the question was about the BTBD contribution to our business. In fact, the BTBD integration started last year is going very well, completely on track with our objectives. BTBD is in fact now selling a big telecom broad offer since November and it's completely in line with what we expected. So indeed, BTBD will be part of our strategy now for our growth, both in mobile and in broadband in the next year. And we are completely in line with what we anticipated for the integration of B2B.

Thank you, Benoit.

Pascal, please. Okay, I'm not sure I captured everything from the question, but I will answer for the energy and services. We saw we have very different types of businesses and contracts. And for instance, for all our long-term contracts, like capacity management, obviously those contracts are indexed, so the prices are reviewed regularly in line with inflation. When it comes to the majority of contracts in terms of number, there are short-term contracts. And obviously, there's capacity to adapt the pricing to the fluctuations in cost. As for the rest of those contracts, they are similar to our construction contracts. And again, either they are revised, indexed, or if they fix past contract, generally, we have provisions and measures as well that we take with our suppliers to ensure that we more or less stay within our forecast costs.

And again, when we compare this kind of contract to a quite short compared to what we do with the normal construction business, it's very similar to what we do with Colas. And thanks to the fact this is short term, it's quite easy to give back the inflation to the final customer.

Fantastic. Thank you, Dean. Thank you very much.

The next question comes from the line of Nicola Gifford from Goldman Sachs. Please go ahead.

Thanks very much. Morning, everyone. I have two questions. First, on the telco and TF1 strategic initiatives, I'd like to get a bigger picture of your thoughts on spinning out your telco and or media businesses. Is this something you would consider as a possibility going forward? And then secondly, on your telco The CMD last year, you outlined ambitions to double your B2B fixed market share by 2026. Just any color on how that's progressing would be great. Thank you. Thank you.

Could you, just that you didn't catch the first one, could you repeat it again, please?

Sure. On your telco and TF1 strategic initiatives, just a bigger picture question on what your thoughts are on spinning out your telco and your media businesses. And is this a possibility or something you'd consider going forward?

Benoit? Benoit for the second one.

Okay, so I will answer the second question of the B2B growth for Big Telecom. We announced that we wanted to double our market share in B2B until 2036. And in fact, we are considered in that development because if you look at the b2b market and some part of the market is mobile for high-end b2b we have 20 or 30 percent market share but on the broadband market we are below 10 percent market share on the small small enterprises market we are around 10 percent market so we have path to grow in this area. We are completely on track. Every year we have a high growth in this area. We are facing also new services in cloud, in integration. So we are on the track to develop this activity and we have the potential really to double our market share, especially in the broadband area of the B2B market.

For your first question, we consider that the structure of the group right now, when we consider all our activity or five different businesses, we consider that all of these five different businesses are core business. So we didn't intend to sell any of them. And we don't see any reason to do it because we have the means to be able to develop them at the level they need. So there is no reason for us to dispose one of them.

Great, thank you very much.

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Thank you to follow-up questions on orders from the local authorities. It's true in France with local authorities, but internationally, I mean, this is counterintuitive when you have all sorts of stimulus plans around the world and yet not much happening Is the low level of orders you take deliberate on your part? You prefer the private sector? Regarding the acquisition of equants, you are talking about a $7 billion acquisition. I didn't say anything, Mr. Clarisco, about the purchase of equants. We have a development strategy and a growth strategy, and we have an example with Colas when we invested with Destia in the north of Europe, in northern Europe, but there's no similar bolt-ons planned for equants at least or maybe something got distorted in the microphone. But orders from local authorities, then back to new developments in North America. Well, you asked about the private versus the public sector. Traditionally, Colas indeed has a significant market in the public sector. We are developing the private sector as well. But the two are separate and one doesn't go against the other. Regarding the public market, there are stimulus plans around the world, but it takes a while before they start kicking in. because the local authorities have to decide what it is they want to do, how they do it, et cetera. In North America, the Biden plan probably will have an effect on our business there, but again, that won't be happening until the second half of the year, at least in the United States. And regarding the various stimulus plans in France, well, it's pretty much the same, isn't it? In fact, it takes even longer than in the U.S., where in the U.S. deals can come a bit online faster than in France. In the U.K., there's again a post-Brexit plan that is starting to take shape, and in terms of volume, we've been gaining a few new deals. But all in all, we expect the full effects to be felt towards the end of the year. Thank you, Frederic. Nicole, maybe we... No, no, maybe I misunderstood. In the legal process with equants, you were thinking that you may need to shed some of your assets in order to acquire equants. No, what it is, is you have countries... where when such mergers take place, you need the legal authorization. But if there's, say, an American subsidiary of Equance, we need the go-ahead from the U.S. authorities. But it's not a competition issue. It's the way, well, anything to do with investing in a foreign country has its implications. We have a question from Mr. Mathieu Robillard from Barclays again. Hello, and again, a follow-up question on the indications you gave in the construction business. You have the pure construction as such. The backlog, I believe, is slightly down compared to 2021. That was the last question. Regarding Bouygues Construction, the revenue stands about the same in 2022. We expect it to be stable. The order book is very much in line with the one we had in 2020, so we expect revenue to be stable. Colas revenue is expected to grow faster, especially with the acquisition of Destia. Destia was acquired last year. at the beginning of December 2021, so it will be consolidated this year. We're big immobilier there, of course, because, well, sales happened in the years before, but because in commercial property there's not much going on and few offers in 2021, we expect revenue again in 2022 to be stable compared to 2021. Thank you. We see no further questions, and so the host has the floor again. Well, thank you so very much. Have a lovely day. Thank you for attending this session.