Bouygues

Good morning, everyone. Let us start this presentation of the half-year results. We'll do this with Pascal Granger, and then we will have a discussion with all the heads of divisions that have come here for the occasion. All right, so, well, let us start with the main figures for the first half of the year. Revenue stood at 26.1 billion euros, a 41% increase reflecting the acquisition of Equance in October. At the beginning of the year, we didn't have Equance. On a like-for-like and constant exchange rate basis, the actual increase is only 3%. Copa stands at 214 million euros, at 727 million euros. Net income attributable to the group stands at 225 million euros, up to 78 million euros, and we'll put some details on the net debt. grew from 3.7 billion to 10.6 billion. Well, if you restate this for the acquisition of equants that took place last October, so restating it and also plus the amount paid to free mobile, I'll get back to that, and the buyback of our own treasury shares, the net debt would have been actually better paid The reason I said I would mention this thing with mobile is that we challenge both the amount and the immediate execution of that amount. And as we do every time, because of the seasonality of some of the businesses, in particular Colas, the performance for H1 are not representative of the annual performance. Let's move on to the highlights. of this half year for the group. On this slide, you can see that we celebrated 60 years of the Mine Orange Guild's a creation that was created to celebrate the best workers with the values of the group, the notions of respect, exemplarity, love of job well done, availability, belonging, teamship, teamwork. and belonging to a company with building the future. The guild members, there are about 600 around the world involved in the building of complex works, and there are 16 guilds right now bringing together 1,500 members around the world. You have the Energy Guild, and Jérôme, you're supposed to – you should come down to the – to the front row. You can do this. Nobody will notice. As I was saying, guild members, well, energy guild members, especially those within Equance, working for Jerome, who's just joined us. Another point here, employee shareholdership. We've completed the 12th operation of shareholder shape reserved to employees. These are employees of the French subsidiaries of the group, including those of Equance, and this was greatly oversubscribed, which displays the attachment of the commitment of our employees. This has brought about the creation of 6.8 new shares, but the dilution was fully compensated because precisely with this in mind, the group bought back and canceled shares in 2022. So employee shareholdership accounts for 23.9 percent of the capital stock compared with 21.3 percent at 31 December last year. This confirms WIC's position that the first company in CAC 40 in terms of employee shareholdership, we have two representatives of and shareholding employees on the board, plus the two staff representatives, which is statutory. A few words about VivaTech. VivaTech is a technical, technological show. We showed a number of innovations and agreements with startup companies, in particular to reduce the carbon footprint of the building industry. With Colas, we have a tool to analyze roads, and all the data collected by our vehicles make it possible to use materials that can be reused or recycled. Bouille Construction developed a platform that can recycle some items such as false ceilings, doors, and such like. We had a solution for energy consumption. Ikhwan's presented this. We can store thermal energy in aquifers. It's called ATES. So that makes for greener air conditioning. for storage of electrical energy. Bouygues Construction showed batteries for construction sites that are charged up at night so as to make them available during the day and using less expensive energy. And Smart Charging by Equance is a software that enables buses to be charged optimistically. to optimize energy consumption. And then WIC Telecom has brought about new innovations related to 5G. So we have tele-rehabilitation, distance rehabilitation by APESI. That is for patients that need rehabilitation. We have an autonomous droid delivery system built by Twins Wheel. And then we have the box Wi-Fi 6 for telecom and a 4K B box and a 5G box. So these are new innovations that give us an opportunity to rub shoulders with startup companies and then offer new services and products to our customers and understand new trends and areas where we should try and make headway. Let's move on to the operational review with the backlog, the order book for the construction business. It stands at 30.8 billion euros, which gives us good visibility on future business. If you look at this in detail, that backlog starting with construction where orders were taken to the tune up 68 percent with many significant contracts especially overseas but there's also good legacy business that is the businesses where of course individual contracts are lower but reconstruction was chosen to extend a metro line in Hong Kong. This is one of the territories where we've been working on a recurring basis to the tune of 470 million euros. We were also chosen to build two data centers in Australia for 350 million euros. There's another country where we've made headway with the Riviera Tower, a 200-meter-tall tower, 200 million-euro contract. And then the new deals, which occurred in Q1, And in particular, in Q1, we signed the Abidjan metro contract for 770 million euros. At 15.4 billion euros, the order book is up 1.6 billion euros, up 12 percent. This is mostly driven by the building business, Batimon International, where the order book is up 29 percent, and also, although less so, by Petrobras. Public Works, where orders are up 7%. In the property business, Wiggy Mobilier is facing a challenging market. This has been going on for several quarters running. The backlog there is down 400 million euros, minus 21%, standing at 1.4 billion euros. And then Colas, its backlog is up 3%. Well, the order taking is up 12% compared to H1 2022, significant contract in rail but also roads with the renovation of the road in the U.S., the Interstate 26. for about 110 million euros, and then a number of major projects driven by Colas Rai. In particular, the modification of lines in the London tube, 250 million euros. So the backlog is up 9% at 14.1 billion, with orders in road up 5%. And real up 21%. So let's look at the revenue and COPPA. Revenue from the construction business stands at 12.2 billion euros, up 3%, of which 4% on a like-for-like and constant exchange rate basis, thanks to Colas and Bouygues Construction. Remember that Bouygues Immobilier is unfortunately off track. Revenue for Bouygues Construction is up 5% because of the international businesses. The revenue of Bouygues Immobilier including the share of co-development is down 12%. We zoomed in on this on co-development. We do this with other developers to share the risk. This is a portion of the business that uses Bouygues Immobilier's resources. Without that, without co-development, revenue would have been down 14% and not 12%. Colas' revenue is up 4% and 6% on the like-for-like and constant exchange rate basis. It's driven by two main businesses, namely Rode and mostly in the EMEA areas, but also Canada and a lot in the United States. And Rail, as I said, that order book is growing fast. COPANA, that is Current Operating Profit from Activities, is down 7 million euros now. You have to remember what I said. This is a seasonal business. This is not representative of annual performance because Colas of course, has a slow business in the winter months. So this is not a reflection of the expected performance for the year. COPPA in reconstruction is slightly down over one year, 120 million. And the COPPA margin is 2.5%. But this is related to the non-linear rhythm pace of construction projects. So this, again, is not representative of the expected performance. But as businesses down in the property business with Immobilier's COPPA with co-development stands as 15 million euros. If you look at COPPA without including that, we were able to contain the drop in COPPA. And finally, Colas's COPPA stands as minus 127 million euros, down 29 million euros over one year. there are positive effects due to the measures taken that we showed after the H1 results in 2021. Let's move on to equants. This has been consolidated since Q4 2022. We have the integration, therefore, of equants, but we changed the scope of equants because since January of this year, We've also integrated Bouygues Energy and BYES's business. So the comparisons with H1 2022, of course, are irrelevant because, well, back then, Equance was not in our books in the first half of 2022. In line with what we announced at Capital Markets Day with Jérôme and Étienne Jacquelin, our strategy is to go for profitability rather than volume. So we're very selective In our contracts, we have an order book of 26.4 billion at the end of June 2023, up 2% compared to December 2022, giving us good visibility on future business. This is a buoyant context. We have a dynamic order taking 9.5 billion euros, 38% in France, 62% abroad. We have data centers in particular built in Germany and the U.K. And one item we've been monitoring is what you call the underlying margin of the order book, which is estimated in such a way that we can ensure good performance in the end. Equance's revenue stood at 9.1 billion in H1 2023, 3.1 billion in France, 6 billion abroad. Again, this is a very positive momentum around the world. COPPA stood at 243 million euros, so that's 2.7 percent profit margin. Now, from activities, that margin has improved compared to Q1 2023. That reflects, of course, the seasonality of the business, but also efforts as part of the perform plan conducted by Jerome, which is bearing fruit. And as regards equants, we confirmed the outlook for 2023. Equants in 2023 enjoyed a slight growth in revenue because of a selective choice of deals, of contracts. Our current COPAS is expected to be anywhere between 2.5% and 3%. And the conversion of current operating profit to cash flow before the WCR is estimated anywhere between 80 and 100 percent. TF1, Rodolphe gave you the presentation yesterday. TF1 confirmed its agility in managing its programming costs while confirming its leadership in ratings on commercial targets while cutting costs on operations, and so the performance is good. As expected, revenue is down in H1. It was down in H1 and TF1. On the like-for-like basis, it stood at it was down 9 percent. The media arm was hit by a scope effect because we dispose of Unify on a constant basis. It was down 6 percent. The advertising revenue reflected lower investment by advertisers in the context of the retail business has suffered headwinds. So we are down 5% on the like-for-like basis and constant exchange rates in Q2 2023, so less of a drop than in Q1. There's also a decline in revenue at Neuron Studio down 16% because of cyclicality of the delivery of program, but also the termination of the Salto business. And then Copa margin on H1 stood at 14.7%. So we caught up with some of the slowdown in Q1. And that is because of the good performance of the media business. The Copa margin for that stood at 21.6% in Q2, up 0.4 percentage point compared to Q2 2022. And then we should note the sound cash generation of TF1, including free cash flow after WCR at 155 million euros, up 34 million compared to H1 2022. Finally, the outlook for TF1, the outlook is maintained. New different outlooks for different businesses. But on the media area, we should be able to go back to 2022 levels in H2, and that will be, of course, partly due to the broadcasting of the Rugby World Cup in September. There's been a recent announcement of the resumption of the iconic series Plus Belle La Vie, but that will be broadcast on TF1. There will be streaming on the MyTF1 platform, and that is a clear illustration of the channel's strategy to move towards a digital transition. under Rodolphe. TF1 will consolidate its leadership in 2023 with a COPA margin close to that of 2022. And TF1 as a group will still generate sufficient cash to have stable or even growing dividends over the next few years. We will continue with Bouygues Telecom. A few first good news, Bouygues Telecom is number one on WiFi for the fourth year running. This rating is conducted by NPERF and for the first time we are number one on the fixed business on all technologies and that will enable Brick Telecom to be just not number one on Wi-Fi but also on the fixed line business. And you should also know that some of our competitors advertise last year's rating. And we remind them that this is 2023. They better use the figures from 2022 rather than 23. You can imagine that those who are announcing their performance did better last year than this year.

The second interesting information about the fibre technology is that Brick Telecom is investing to give more comfort to the clients. We've invested in the XGS PON technology, thanks to which we can have a better throughput, four times faster, so that we can reach up to 8 gigabits. This technology is available today in Paris, and progressively it's going to be deployed in the other major cities. Now, the commercial momentum is continuing. As you can see on the right-hand side, at the end of June, the operator had 15.3 million customers with a mobile plan. This means up 109,000 customers during the first half year, including 82,000 during the second quarter, which is a good performance given the market today. The momentum was continued as well at FTTH with a gain of 270,000 new fibre customers. including 122,000 during Q2. The fibre-to-the-home clients, FTTH clients, reached a total of 3.3 million. They represent 69% of the fixed installed base to be compared to 58% a year ago. That's what you can see on the bottom right-hand side. Therefore, the customer base now has posted a good performance. Now we have 4.8 million customers, that is up 86,000 customers for this first half, including 40,000 for Q2. The performance of Fibre is to be explained thanks to the deployment of FTTH. Buick Telecom has already commercialised 32 million FTTH premises and is about to reach its objective, which is 35 million FTTH premises for the end of 2026, when we presented the capital market day two years ago for Buick Telecom. The key figures now for Buick Telecom are the good commercial momentum goes together with an increase in value growth in value which is still our strategy we want volume and growth simultaneously at the end of june sales built customers was up six percent and that's thanks to a solid customer base and a growing customer base and an increase in abpu in abpu that is the amount that's charged or billed to the customers For mobile lines, ABPU is going up 30 cents for the year to reach 19.7 euros. In fixed lines, ABPU is up 1.8 euro year-on-year to reach 30.5 euros. So the services sales during the first half of 2023 is at 2.9 billion euros, therefore up 4% year-on-year. This is still penalised by the incoming sales due to the drop in the incoming uses that we can charge or bill, but this has no impact on EBITDA after leases. Overall sales is up 5% during the period. and benefited from the other sales which is driven by the works sales. EBITDA after leases was up 12% year-on-year thanks to a growing sales and thanks to a good monitoring of our costs at BRIC Tilikum. The EBITDA after lease margin is improving to reach 31.5% nowadays, therefore up 2.1 points in a year. I'd like to draw your attention to the fact that during Q4 2022, we re-qualified or restated for the full year, that is 2022, the annual fixed fees, that is frequency bands 900 MHz and 1800 MHz. That means we are now aligned on the three main competitors. The effect was a positive effect of 23 million euros on EBITDA after leases during Q4. The growth rate for EBITDA after leases for Q1, Q2 and Q3 2023, all things being equal, benefited mechanically of this requalification. And this effect will be offset as of Q4, which will be a good basis for comparison. Copa was up 57 million to reach 366 million euros. Operating profit was up as well in the same amount. and then gross capital expenditure excluding frequencies that reached 857 million euros, which is the level we had in 2022. Now, what about the outlooks for BRIC Telecom? Well, the outlook has not changed. BRIC Telecom for 2023 We will now continue with more figures with Pascal Granger.

Thank you, Olivier. A few additional details on the accounts at 30 June regarding the income statement on page 26. You have had details about revenue and COPA that was already presented. We have PPA depreciation at Colas TF1 and Bouygues Telecom. We also recognize a PPA depreciation of 26 million equants for 26 million euros for equants in H1 in line with the forecast we announced at Capital Markets Day. We announced 50 million euros for the year as a whole non-current that is non-representative of a business. stand at minus 80 million euros in H1 2023, compared with minus 44 in H1 2022. Bouygues Construction recognized a non-current charge of 46 million euros. This is related to a dispute in Singapore for a building delivered in 1997, changing regulations in a country where it is present. recorded 19 million euros in non-current charges because of the implementation in Q2 of the management incentive plans we announced at Capital Markets Day plus legal fees as part of our disposal plans. TF1 also recognized 19 million euros in non-current charges. This is related to the optimization of the property, of the plants and property, the strengthening of the career plan for our employees, and the acceleration of the digital transition. These non-current items for TF1 are related to the implementation of an optimization plan to reach 40 million euros in savings in operating expenses starting in 2025, 10 of 15 million of which will be reinvested in the acceleration of the digital transition. Net financial debt is up 76 million euros, and this is related to interest expenditures related to the acquisition of equants. Regarding the income statement, the bottom line also includes a 155 million tax charge compared with 103 million in H1 2022. We have an effective tax rate of 39% compared with 30% in H1 2022. This higher rate is related to deficits, tax deficits abroad which do not give rise to the recognition of deferred tax assets in the share of the net income of companies on an equity basis is up 54 million euros because of the contribution and the stop of losses at Salto. As a result, the net profit attributable stood at 225 million euros, up 78 million euros compared to last year. As you can see on page 27, net debt at 30 June 2023 stood at 10.6 billion euros compared with 7.4 billion euros at 31 December 2022. This 3.1 billion euro increase is related to the usual seasonality of our business, but it also includes the paying of 310 million euros to free mobile on 16 May, including 308 million euros plus interest as part of our dispute on smartphones and mobile contracts. Let me remind you that we strongly challenge both the ruling and the validity of its immediate execution. It should be noted that variation in capital requirements related to business and others is up 209 million euros reflecting the efforts made by all businesses. The ratings remain strong, A minus negative outlook for Standard & Poor's and A3 stable outlook for Moody's. In the following pages, let us look at the changes in net debt in 2023. On page 28, The change in net debt on H1 2023 is not to be compared with H1 2022 because H1 2022 had a positive impact related to the fair value variation of pre-hedging swaps introduced as part of the financing of the equants acquisition. The good news this year is the positive improvement in WCR changes. Mr. and the others businesses standing at 200 and to reach 291 million euros. The changes compared with December 31st, 2022 as follows includes net acquisitions and disposal minus 62 million euros for acquisitions and disposal at Kodak, Equance and the buyback of shares at TF1. The capital increase for employees plus 150 million euros. The buyback of shares and the liquidity contract minus 29 million euros. The variations of residual swaps not including taxes on completed swap operations minus 44 million euros. Dividends, 741 million euros. The 310 million euros paid out to Fimobel. And operations standing at 2.1, minus 2.1 million euros. I'll get back into the details now. Let us start off with the net... cash flows standing not including the taxes on net on completed swaps including the payback of lease obligations stood at 1.2 billion euros up 158 million euros compared to h1 2022 CapEx, net CapEx, not including figure Cs to that 1.1 billion euros, up 67 million euros over the year. That change reflects mostly the integration of equants. Variation WCR related to others and various businesses was marked by the usual seasonality, but the change is minus 2.1 billion euros compared to minus 2.4 billion euros in H1 2022, so this is an improvement of 291 million euros. This completes this presentation. Thank you for your attention. Right then, we will conclude with the outlook. Well, that's pretty straightforward. We confirm the outlook. Revenue close to that of 2022. Improvement in COPPA. current operating profit from activities. That is based on the 2022 pro forma integrating equants as if the acquisition had taken place on January 1st, 2022. Let's move on to the Q&A. We'll have two parts to that. First, we'll take questions in the room, and then there will be questions online. And we will, of course, take these questions as well with the representatives of all the businesses of the group. Don't speak all at once. There will be a chance for all of you to speak. Holidays are coming. Maybe the presentation was too clear and called for no questions, which is good news. It means that we are communicating better and better are there well it really was crystal clear that is all right are we allowed to take calls from the outside yes we thank you our mail we can take questions online So press star and 1 if you wish to put questions in French. The first question comes from From HSBC, Nicolas Cote-Colisson. Hello. I have lots of questions, starting with equants. Have you noted a change in the commercial attitude of your competitors since you took over to equants? Do they manage to retain their customers, or are they losing them out to you? I realize that this question applies to many of your competitors. Second question about WCR. If you had figures for H1. 2023 compared to 2022, there's a significant improvement, almost 600 million euros, not including equines. If you have details about the way in which you were able to achieve that 600 million gain, not including equines, can you drive draw consequences for the rest of the year. I realize there's seasonality from one half year to the next, but can you expect seasonality at equance as well? Because last year in H2, there was a 400 million gain on WCR. And the final question on telecoms, on the price environment, the average ABPU is up. in the fixed line business, much less so in the mobile business. Can you comment on your ability to raise prices in one but less so in the other? I'm turning to Jérôme on the attitude of our competitors. We were seen as being the company offering lower prices beforehand. Well, yes, we are in a position to raise our prices in as much as our competitors seem to be ahead of us in terms of profitability. And, of course, this makes it easier for us to gain on profit margins. We're not losing out on market shares. In fact, we're gaining market shares. It should be pointed out that the fact that we've joined Brigg has stabilized our customers, the equance customer base, and so this makes for better orders. Looking at our competitors, the fact that we are going for profitability rather than volume. This is good news for the industry because it means that rates are going up and so they are not bringing them down on their side. On regards, regarding seasonality, we are in line with the plan announced on the 30th of June. On WCR, Well, this may be disappointing. You know that for many years, WCR has been going up and down in the construction business. WCR is not a relevant indicator because it is subject to significant fluctuations. It was unfortunate last year. It's happier this year. Nonetheless, this is not a reflection of what will happen by year's end. What really counts is not so much variation WCR, but rather the efforts made by all our teams on the ground to make sure that bills should be collected on quickly and once, well, first bills should be drawn up and then collected on. And then, of course, that contract should include good payment clauses. So there are no lessons to be drawn from H1, except, of course, we're happy that the situation is better now than last year. But we're continuing these efforts in all parts of the group precisely to optimize WCR by year's end, as we do annually. every year and that is why we do not give guidance on this indicator because it fluctuates too much based on our contracts in various businesses. All right. And then the question about rates. On the fixed line business, we were the least expensive operator. We're gaining ground here but we're also gaining on prices in the mobile business. Well, the price environment of the market says, Benoit, is such that now we are facing less promotions than last year, both in the fixed and the mobile business, which is, of course, a positive factor because we have a stabilization of prices regarding the different movements In mobile and fixed businesses, it should be pointed out that Brick Telecom has two features, both in – well, we have the lowest install capacity, and so new customers that join us represent, of course, a larger portion, and so they have a one-year period. sort of promotion deal and then the prices go up. So the transition from year one to year two felt stronger at Telecom than our competitors because the share of new customers is bigger. It's true that we had a lower ABPU on the fixed line business than our competitors and we are catching up on that compared to the rest of the fixed line business which is not the case for Mova. Okay, next question.