Bouygues

Welcome to the BUIX conference call. Please be aware that each of your lines is in listen mode only. At the end of the call, we will open the floor for questions. We will then provide instruction for you to follow if you would like to ask a question. If any participant has difficulty hearing the conference, please press star zero on your telephone keypad for operator assistance. I would like now to introduce Mr. Pascal Granger, Deputy CEO and CFO of Bouygues. Thank you.

Good morning to all of you and thank you for joining us to discuss Bouygues first quarter 2022 results. With me in the room are Christian Lecoq, CFO of Bouygues Telecom and Armel Garry, Head of Investor Relations. Following our presentation, will be answering your questions. Let's start with Q1 highlights on slide four. Total group sales were up 6% in Q1 2022. The construction and services businesses demonstrated a good level of activity with a backlog up 4% and sales up 7% driven by COLAS. WIC Telecom experienced a good commercial performance both in mobile and in fixed. And last, TF1 sales increased meaningfully. Second, our two M&A projects are well on track and new milestones were completed. The Equance acquisition received all the required employee representative bodies' opinions. This condition precedent being met The share purchase agreement should be signed soon. On the 8th of April, TF1 signed the agreement with Altis Media related to the sale of TFX channel. The completion of the sale is subject to obtaining clearance from the relevant authorities, the French Competition Authority and ARCOM, on to the effective merger between TF1 and M6. Concerning the proposed merger between TF1 and M6, let me remind you that it is subject to regulatory authorizations. This process involving the French Competition Authority and the French Regulatory Authority for Audiovisual and Digital Communication is ongoing. The ADLC was notified of the proposed murder on the 17th of February 2022 and their decision is expected in October. Regarding the French Market Authority , INME, RTL, Bouygues and TF1 will submit their request for exemptions for the mandatory filing of a proposed public offering. Let's now turn to the group's key figures on slide five. Before starting, I would like to remind you that like every year, due to the usual seasonality, Q1 earnings are not indicative of H1 and full year results. That being said, group sales of 8.2 billion euros in the first quarter 2022 were up 6% year on year and up 3% like for like on the constant exchange rates. All our business segments delivered growth compared to Q1 2021, except Bouygues d'Immobilier as forecasted. The growth was particularly strong at Colas and TF1, with a solid contribution from Colas up 19% and up 12% like for like on the constant exchange rates, and a good performance at TF1, up 10% and 7% live for like at the constant exchange rates. Current operating loss was 77 million euros in the first quarter 2022, a stable level compared to the first quarter 2021. The operating loss was 93 million euros, it included a negative 16 million euros of non-current result that is not representative of our business. It is linked to the gain on the disposal of data centers at Bouygues Telecom and to charges related to our two ongoing M&A operations recorded at Bouygues Construction at TF1 and at the holding level. I would like to add that in the first quarter of 2021, The operating loss was 21 million euros, including a positive 56 million euros of non-current results, mainly related to the sale of data centers at Bouygues Telecom. Net loss attributable to the group was 131 million euros in Q1 2022. Alstom no longer contributes to our figure, while Q1 2021 included a positive contribution from Alstom of €120 million. Let's now turn to the review of operations. Let's begin with the backlog in the construction and services businesses on slide 8. The overall backlog at end March 2022 was at the high level of €34.6 billion and up 4% year-on-year. It included around 700 million euros from Destia. The backlog was down 1% at constant exchange rates and excluding the main disposals and acquisitions. The increase in the backlog was driven by Colas, including Destia. Colas achieved a good commercial performance in road activities in France, the US, and Canada, and also The further dynamic trend at Colas High notably with the award of the contract for the first phase of line four of the Cairo Metro in Egypt. With construction order intake was up 8% in Q1 year on year driven by both international markets on the normal course of business. That backlog remained stable in Q1 2022 versus Q4 2021. At Bouygues Immobilier, we noted a significant catch-up in building permit issuances in the residential property market compared to the first three months of 2021. However, we still have a low supply of units available, which is reflected in the reservations and the backlog. clients in commercial activities are still in a wait-and-see mode. As a result, Bouygues Immobilier's backlog was down 13% year-on-year. Last, the share of backlog in international markets continued to increase, representing 65% of the backlog at Bouygues Construction on Colas, up 3.3% year-on-year. Let's now look at the construction activities key figures on slide 9. The construction and services businesses started the year on a positive note. Sales were up 7% year on year and 3% like for like at constant exchange rates. It is worth noting the good performance international markets where sales were up 11% thanks to the significant increase at Colas international sales, which were up 35%, led by the Europe, Middle East and Africa regions, as well as the US and Canada. Of note, Destia contributed €109 million to Colas sales in Q1. The increase in international sales also reflects the positive impact of foreign exchange rates. Current operating loss was 208 million euros. I would like to highlight three points on current profitability. First, BRIC construction's margin improved slightly, 2.8% versus 2.6% in Q1 2021. This was led by BRIC Energy and Services, whose current operating margin reached 3% in Q1 2022. Second, the current operating result of Bouygues Immobilier reflects the low level of activity, notably in the commercial property market. Q1 2021 included a positive contribution of 45 million euros in sales, mainly driven by a specific project named Suez. On term, COLAS had a current operating loss in line with the usual low activity level in Q1, which was accentuated this year by the impact of foreign exchange rates. You know that our construction and service businesses are committed to foster sustainable development and responsible behavior. You will find a few examples of those on slide 10. Let me start with WIC Construction, a responsible and committed player in sustainable construction, which has been recognized and accredited by the Top Employers Institute, an independent international body, as a Top Employer France for the sixth consecutive year and the Top Employer Europe for the fourth year. Certifications were also awarded to its entities in the United Kingdom, Switzerland, Poland and Czech Republic. In Marseille, in Les Fabriques ecodistrict, the Alpha project of Bouygues Immobilier will be entirely designed in low-carbon concrete. There will be low-carbon white concrete on the facade and low-carbon gray concrete for interior walls and infrastructure. Produced from recycled materials, low-carbon concrete reduces the carbon footprint by 30% to 70% compared to conventional concrete. The first wall in low-carbon white concrete was completed in Marseille in January 2022. Finally, also in January 2022, Colas and CEPOR signed an agreement to supply Colas' fleet of trucks in France with only 100 renewable bio-based fuels that reduces greenhouse gas emissions by 60% compared to diesel fuels. fuel and slashes fine particle emissions by up to 80%, the initiative would cut the emission of carbon dioxide by nearly 46,000 tons in a year once the deployment is completed. Turning to slide 12, let's talk briefly about TF1's results, which were released at the end of April. First, TF1 released a good set of results. The sales increase of 10% and 7% for like on the constant exchange rates was driven by both business segments. First quarter advertising revenues were up 5% year on year at 377 million euros, thanks to the gradual recovery of some business sectors that were still impacted by the pandemic in 2021. And furthermore, Neuron Studios' revenues continued to expand internationally in the first three months, up 16%, bolstered in particular by the contributions of the studios acquired in Spain and Germany in 2021. Current operating profit showed slight improvement reaching 60 million euros in the first quarter. Cost of programs remained under control in the media segment during Q1 2022. However, new and profitability was affected by a lower contribution of programs deliveries in Q1 2022 due to the phasing of program deliveries on the strong basis of comparison related to a catch-up effect in program deliveries in Q1 2021. As a result, current operating margin was down 0.5 points to 10.6%. Let's now move to slide 13, which highlights TF1's actions for more sustainable behavior and gender equality. I would like to mention Ecofunding. This initiative was not specific to Q1 2022, as it was launched in July 2021, but the first campaign started on 1st January 2022. Ecofunding is the first environmental advertising fund on the market, 100% financed by TF1. Advertising campaigns promoting a sustainable service with the criterion recommended by ADEME, such as, for example, an energy label or repairability index, will trigger a contribution to the ecofunding program. This fund will be used to produce and distribute awareness campaigns on environmental labels and criteria recommended by ADEME. In March, TF1 presented the second Experts Allowing Session, which brings together women experts from, for example, the health, medical research, justice, police, artificial intelligence, and entrepreneurship sectors. The program's goal is to increase the proportion of women experts in news programs, on TF1 and LCI. The representation of women experts in TF1 news programs, 1 p.m., 8 p.m., and during weekend news was 44% in 2021. To conclude, TF1 slide 14, I will be briefly brief as TF1's team already commented on its 2022 outlook. At end March, TF1 considers that it was not economically impacted by the consequences of the war between Russia and Ukraine. However, the development of the conflict could have an impact on the European economy and therefore on its activity. I now leave the floor to Christian Lecoq from Bouygues Telecom's performance.

Thank you Pascal and good morning everyone. Starting with slide 16, you can see that commercial performance in mobile was solid in the first quarter. At end March 2022, Book Telecom had 14.9 million mobile plan customers, including M2M. Commercial activity remained dynamic during the quarter, as Book Telecom won 97,000 new customers in Q1. You can see on the right side of that slide, that BookTelecom is on track to reach its ambitious 2026 target to win 4 million additional mobile customers, including M2M, as we already gained 2.7 million customers since the beginning of 2021, including those of BTBD. Now, let us turn our attention to our fixed customer base on slide 17. As you can see, We had 4.5 million fixed customers at end March 2022, including net ads of 52,000 over the first quarter. FTTH continued to experience strong growth with 172,000 net ads during the first quarter. With a total of 2.5 million subscribers, FTTH customers represented 55% of our fixed customer base compared to 42% one year ago. Having achieved almost one third of our ambition 2026 target since January 2021, we are also on track to deliver our 2026 goal of 3 million additional FTTH customers. Let's have a look at key figures on slide 18. First, we achieved a good performance both in volume and in value over the past 12 months, leading to a 6% growth in sales built to customers. Mobile eBPU, now including BTBD and restated for roaming impact, was up €0.3 year-on-year at €19.7, and fixed eBPU was up €0.3 year-on-year at €28.6. This good performance was partially offset by the decrease in incoming sales, leading to a 3% increase in self-formed services. Indeed, as you know, self-formed services include incoming voice calls and text messages built to other operators, which by nature do not contribute to EBITDA after leases because of a symmetry in costs. In Q1 2022, incoming sales were down 24% due to a lower incoming traffic and to a decrease in regulated coal termination rates. As such, EBD after leases, which I repeat, is not impacted by the change in incoming sales, grew by 7% in Q1 2022, in line with our annual guidance, and reached €354 million. Consequently, margin improved compared to last year, which is consistent with our goal to progressively increase it. The current operating profit of 87 million euros was better than in Q1 2021. Operating profit stood at 92 million euros and takes into account a non-current income of 5 million euros mainly due to the gain on the disposal of data centers. Please note that Q1 2021 non-current income stood at €60 million, also mainly related to the disposal of data centers. Last, you can notice that growth cap reached €508 million in Q1 2022, a higher level than in Q1 2021. In order to secure the deployment and the strengthening of our 4G, 5G, and fiber networks, and in the context of tight sources, we accelerated a portion of our annual gross capex program in the first quarter. This has no impact on our 2022 capex guidance of 1.5 billion euros. The investments decreased by 94 million euros over the period due to lower data center disposals. Looking at slide 19, Just a few words on some of our sustainable initiatives and innovation announced or launched in Q1 2022 in order to better satisfy the requirements of our customers. Among them, we launched Reparation Express, which is an in-store mobile repair service open to everyone. We also introduced SOURCE, the first responsible and inclusive mobile plan. SOURCE is a no-commitment plan that promotes digital sobriety, 10 euros for 10 gigabytes. SOURCE offers customers the unique possibility of converting their unused gigabytes into financial support for associations, thanks to our partner Lilo. We also integrated a sustainable development approach into the new version of the BBOX4K TV decoder. For example, it is now 95% made from recycled plastic, allergen-free plastic parts, 10% lighter, and with this texture, we're designing to reduce scratches and to extend the book lifespan and promote its reuse. Last, we were the first operator to announce Wi-Fi 6E in France. The launch occurred on 26th of April and is part of a strategy to always offer the best Wi-Fi to our customers. Let me remind you that Boost Telecom was number one in Wi-Fi performance in France, according to the NPR survey published in March 2020. Turning to slide 20, I simply remind you of our unchanged target for the full year. And now Pascal has given you the floor back.