Bouygues

Hello and welcome to the Briggs 9 Months 2024 results. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Pascal Granger, Deputy CEO and CFO of the Bouygues Group. To begin today's conference, thank you.

Good morning, everyone, and thank you for joining us to discuss Bouygues Nine Months 2024 results. With me today is Christian Lecoq, CFO of Bouygues Telecom. Following our presentation, will be answering your questions. Let's start with our highlights. I would start by saying that we confirm the Group Outlook for 2024. Then, I would point out four elements. First, the very solid backlog in the construction businesses provides visibility and activity. Second, equine sales, COPPA, margin from activities, and net cash improved year on year, reflecting the continued successful execution of its strategy plan. Third, Brick Telecom achieved a strong performance in fixed and continued to face a competitive environment in mobile. The operator launched a new brand named Big on the B2C market early October with an offer dedicated to households. And this morning, Brick Telecom announced the launch of the BNU Pure Fiber offer, specifically dedicated to digital customers. Moreover, the completion of the LabPost Telecom transaction is expected before the end of the year. Christian will talk about that later on during the call. And fourth, The financial structure remains robust with a net debt of 8.5 billion euros at end September 2024, improving compared to end September 2023. Let's now have a look at our three key figures on slide five. Group sales were up 1% at 41.5 billion euros in the nine months 2024 compared to the nine months 2023, mainly driven by equance and reconstruction. Like for like and a constant exchange rate, group sales increased by 2%. In the nine months of 2024, the group COPPA increased by 96 million euros compared to the nine months 2023, and reached 1,719 million euros. This increase was primarily led by equants, where copper improved by 97 million euros year-on-year, and in a lesser extent by brick construction and brick telecom. Brick-immobilized copper decreased by 50 million euros over the period, in relation in particular with a strong decline in activity, but also the adjustment in margins at the end of the operations, including some commercial discounts made to customers. Net profit attributable to the group was 687 million euros, a level slightly higher compared to the nine months of 2023. Please note that this net income group does not include into account the future increase in the tax rate for 2024, which would result from the new French Finance Act. Last, net debt was 8.5 billion euros, an improvement compared to the 10.2 billion euros at end September 2023. I will provide you more details about these figures later during this call. Let's begin with the backlog in the construction businesses on page 8. The backlog at end September 2024 was at a very high level of 31.8 billion euros, up 7% year-on-year. This backlog provides visibility on future activity. International backlog was up 6% year-on-year, notably driven by significant projects awarded at Bouygues Construction, reflecting a good momentum in civil works. And backlog in France was up 9% year-on-year, driven both by Bouygues Construction and Colas. Turning to page 9, you see that the increase in the construction businesses backlog was driven by Bouygues Construction. Let's go now into details. At Bouygues Construction, order intake amounted to 10.1 billion euros. Momentum remained good in the normal course of business, which represented around half of the total order intake during the first nine months of the year. Order intake also included several major contracts in Q3, notably The Torrance to Darlington Highway contract worth more than 2 billion euros, but also the Ride Hospital, both in Australia, as well as a hotel in Dominican Republic and a residential building in Florida. Backlog at boot construction was up 18% year-on-year, driven by civil works up 43% year-on-year, and building slightly up year-on-year. At Colas, order intake reached 9.8 billion euros. In Rose, order intake was slightly up year-on-year in France and was down internationally in relation notably with the completion of major projects and some delayed projects in North America and with the repositioning of activities in certain countries. In Rio, order intake was down year-on-year but this is not representative of business activity because of an unfavorable basis of comparison on the disposal of Colas High Italy. Moreover, at 8 September, the nine-month order intake did not include yet the contract to renovate Line 1 of the Cairo Metro. Colas' backlog was almost stable life-or-life and a constant exchange rate year-on-year due to the disposal of Colas High Italy, whose backlog was around 400 million euros. Backlog, as published, was down 4% year on year, with roads down 5% year on year, and rail down 2% year on year. Last, at Bouygues Immobilier, the general market conditions remained challenging. We noted French residential unit reservations showing improvements year on year, but this situation obviously does not make a trend. For its part, commercial property market is still at a standstill. As a result, Bouygues Immobilier's backlog was down 18% year on year. Let's now look at the construction activities sales on slide 10. Sales were up 1% year on year up also 1% like-for-like and at constant exchange rates. First, brick construction sales were up 5% year-on-year, essentially driven by international building. Second, at Colas, sales were stable year-on-year, supported by a solid performance in rail, where sales were up 5%. Road activities were stable year-on-year, with a slight growth in France and a slight decrease abroad. Last, at Bouygues Immobilier, sales were down 13% year-on-year, reflecting the difficult market conditions of both residential and commercial property markets. Let's go through COPPA on slide 11. Current operating profit from activities of the construction businesses reached 476 million euros a lower level than in the first nine months of 2023, resulting from the strong decrease in BRIC immobiliers' contribution. COPPA at BRIC Construction improved by 29 million euros compared to the nine months 2023, with a margin improving by 0.3 points year on year. Please remember that BRIC Construction COPPA was particularly strong in Q4 2023, an effect that we don't expect at the same extent for Q4 2024. At Colas level, COPPA was 306 million euros, almost stable year on year, with a stable margin from activities of 2.6%. As a reminder, 2023 third quarter COPPA notably benefited from a significant positive one-off related to the sale of a land asset in the US. Let's now turn to the review of operations for Equance on slide 13. Equance's commercial activity was robust with a dynamic order intake of 14.1 billion euros, including notably the award in the third quarter of some major contracts such as a project of electrical and mechanical work for the health sector in Canada and the fit out of a data center in the UK, each worth around 140 million euros. The order intake margin is on the up, highlighting the ongoing positive impact of the PERFORM plan. Equance backlog stood at 25.8 billion euros, up 4% compared to end December 2023, and slightly down year on year. Equance pursues its selective approach to contract strategy in a supportive environment and is continuing its gradual exit from the new-build activity in the UK. Equance sales stood at 14.1 billion euros, a 3% increase versus end September 2023, thanks to good overall momentum in France and abroad, despite the disposals completed at the end of 2023 and the impact of the gradual exit from the new-built activity. Sales were also underpinned by the strong growth in specialty businesses, notably in solar, data centers, and smart factories. COPPA reached 474 million euros with a margin from activities of 3.4%, improving by 0.6 points compared to the nine months 2023, underlining the continued successful execution of the PERFORM plan. To end with equants on slide 14, let me just add that 2024 guidance is confirmed with equants aiming for sales figures close to, yet slightly above, that of 2023. will factor in both the effect of growth in Equance markets and the scope effect related to the asset-based activity disposals at end 2023 and the selective approach to contract strategy. As a reminder, Equance is aiming for 2025 onwards, an acceleration in organic sales growth to align with that of market peers, In 2025, the current operating margin from activities closed to 4%, and in 2027, the current operating margin from activities of 5%. The cash conversion rate before working capital requirement of between 80 and 100%. Turning to slide 16, let's talk briefly about TF1's results, which were released on the 30th of October. First, the TF1 group audience remained strong with its main target audiences in the nine months of 2024. Second, in the nine months of 2024, total sales were up 3% year on year. Media sales increased by 4%, with advertising revenue up 5%, driven by TF1+, up 40%, confirming the platform's appeal to advertisers and which linear up 2% year-on-year. Q3 linear advertising revenue remained steady in July and August, despite the broadcast by France Télévisions of the Olympic Games and was down in September in relation with an unfavorable basis of comparison due to the broadcast of the Rugby World Cup in Q3 2023. New One Studios posted revenue down 3% year-on-year with JPG, which has been acquired end of July, contributing to New One Q3 2024 sales for around 8 million euros. As mentioned in the previous quarters, New One Studios will deliver flagship shows in Q4 2024, such as Marie Antoinette and Memento Mori second seasons. COPPA amounted to 198 million euros close to 9 months 2023 level. Q3 2024 benefited from the divestment of a brown license and the decrease in the programming costs. As such, nine months 2024 COPPA margin was 12.4% and remained down versus nine months 2023 margin. Turning to slide 17, I will end on TF1 Group by saying that 2024 outlook is confirmed despite a more challenging economic environment for the rest of the year. TF1 aims at keep growing in digital, building on the promising launch of TF1+, maintain a broadly stable current operating margin from activities, and continue to generate solid cash flow enabling the TF1 Group to aim for a growing dividend policy over the next few years. I now turn the call to Christian Lecoq for BRICS Telecom performance.

Thank you Pascal and good morning to everyone. Let's begin page 19 with the commercial performance in fixed. FTTH continued to experience strong growth in volume with 159,000 new customers in Q3 for a total of 408,000 new customers joining us since the beginning of the year, and for a total of 4 million FTTH customers. As you can see on the right side of the slide, we had a total of 5.1 million fixed customers at EDS September 2024, with an increase of 82,000 customers in Q3. Performance was also strong in value with a fixed ABPU up 2.3 year-on-year at 33.2 euros per client and per month. FTTH performance is the result of a high penetration rate and a strong FTTH footprint with 79% of our fixed customer base on FTTH up from 71% one year ago and also with national coverage of around 90% and 37.5 million FTTH premises already marketed. We expect around 40 million premises by end 2026. Regarding mobile, on site 20, the market environment remains competitive. At end September 2024, Book Telecom reached 15.8 million mobile prime customers thanks to its good performance of 170,000 new customers in Q3, leading to a total of 246,000 new customers since the beginning of the year. Mobile ABPU was down 0.2 euros year-on-year at 19.6 euros per client and per month. This decline in mobile ABPU was expected due to sustained competition in low-end segments and the persistent pressure on purchasing power, leading to the migration of some customers to more affordable mobile plans. Turning to slide 21, let me remind you that the B2C mobile market is undergoing changes in 2024 due to a slowdown in volume growth and increased competitive pressure since the second quarter, particularly on online mobile entry plans. Book Telecom launched in October its innovative marketing strategy featuring its newborn Big Hill. This launch is a strategic pivot towards household exclusivity. As explained early October, Big proposes a new definition of households extended to those who do not live under the same roof. Big Offer is built on three main pillars. First, Big Savings. address customer concerns about the cost of living by offering a sustainable, unique, progressive pricing structure. On mobile, BIG provides progressive discounts for all the lines including in the pack, subscribed and already held. On fixed, we provide a reduced and stable price. Second, BIG solutions. Our offer includes multiple services that respond to households' needs like the Gigaboots option, which allows to get a 20 additional gigabytes boost on eligible packages for free and up to three times a year. Third, Big Tranquility. We offer an exclusive support to facilitate household life with, for example, the possibility to use multi-bank accounts BIC is available in all Brute Telecom's distribution channels. With this bond, Brute Telecom aims to enhance our customer satisfaction and reduce churn for profitable calls. This new strategy is a big opportunity to catch up with household exclusivity and capture mobile packages with the household. Turning now to slide 22, Brooks Telecom announced this morning the launch of BNU Pure FreeBAR, the first internet-only fiber offer on the market designed for a specific segment of digital customers. With this offer, Brooks Telecom wants to address a specific segment of digital savvy customers and only looking for high-performance connectivity with no other additional services like a fixed line telephone or a TV service. As of today, no existing offers respond to this customer need. Our offer consists of, first, a powerful B-Box with high-speed internet. Second, a fair and attractive prices with no commitment. And third, an offer available exclusively online from subscription to after-sales service. Let's now have a look at key figures as you can see on slide 23. Bookstelecom achieved a 5% growth in sales bills to customers year-on-year. Sales from services were up 4% compared to the 9 months of 2023. Total sales were stable year-on-year, affected by the decrease in other sales, down 13% year-on-year, which mainly consists of handsets, accessories, and built-to-suit sales. EBITDA after leases increased by 55 million euros compared to nine months to enter in history and reached 1,506 million euros thanks to the combined effect of growth in sales based to customers and the sustained efforts on cost control. OPEX continued to increase due to strong growth in the FTTH customer base. The current operating profit from activities of €603 million was €18 million higher than in the nine months of 2023, reflecting the growth in EBITDA services mitigated by the increase in DNA over the period. Please note that in Q3, we reviewed some depreciation periods of certain assets leading to a positive one-off effect in Q3 2024 for an amount slightly below 20 million euros. This effect won't recur in Q4. Plus, you can notice that gross capex reached 1,084 million euros in 9 months 2024, which is in line with our full year outlook. Moving to slide 24, we are confirming our 2024 targets that are an increase in sales bills to customers, an EBD after lease of about 2 billion euros, and a gross capex of around 1.5 billion euros excluding frequencies. Turning to slide 25, let me add a few words on Lapos Telecom's transaction. In its press release, dated 29 May 2024, Books Telecom stated that it had been informed by FFR and La Poste of divergences between them concerning the terms and conditions of the transaction provided for in the exclusivity agreement. Signed by Books Telecom with La Poste Group for the acquisition of La Poste Telecom. Bouygues Telecom was informed that these divergences have been resolved on 4 November 2024. In addition, as the necessary administrative authorizations have been obtained and SFR has waived its preemption rights, the parties have agreed to complete the transaction before the end of the year. Bouygues Telecom will adapt its guidance to factor in the acquisition of La Poste Telecom in the month following completion of the transaction at the latter. And now Pascal, I'll give you back the floor.

Thank you, Christian. I will now briefly comment on the financial statements on slide 27, starting with the P&L. We have already discussed nine months sales on current operating profit from activities at the beginning of this call. Let me add a few comments this morning. First, other operating income and expenses which do not reflect operational activity were negative at 177 million euros in the nine months. This amount notably includes the non-current charges in relation with First, the Equence Management Incentive Plan, which represented 75 million euros in the nine months of 2024, split between Equence and Bouyguessey. I remind you that the Management Incentive Plan only started in the second quarter of 2023. As such, the amount recorded in the first nine months of 2024 is higher than that of the first nine months of 2023. A change in regulation in the UK, where reconstruction operates, which represented 33 million euros in the first nine months of 2024. Let me also remind you that some non-current charges were recorded at big immobilier level for 27 million euros, mainly in relation with the employment protection plan launched in April. Some non-current expenses were also recorded for lower amounts at TF1 and Bouygues Telecom. Second point, cost of net debt stood at minus 185 million euros compared to 231 million euros in nine months 2023. This improvement is mainly explained by the combined effect of the increase in cash and its remuneration given that debt is at fixed rates. The tax charge was recorded for minus 392 million euros. This higher tax charge versus last year is explained notably by the constraints related to international taxation, our presence in many different countries, and the large range of tax rates applied in each of them. As already mentioned at the beginning of this call, This amount does not take into account the future increase in the tax rate for 2024, which would result from the new French Finance Act. On fourth point, contribution of associates decreased from 50 million euros to 5 million euros, notably due to the continued investments made by joint ventures of Bouygues Telecom and the decline of TIPCO asset contribution, a Colas joint venture based in Thailand. As such, net profit attributable to the group was 687 million euros, slightly up year on year. Bouygues has taken note of the 2025 French Finance Bill as presented by the French government to the Council of Ministers on 10 October. The Article 11 of the bill provides for an exceptional levy on the profits of large companies in France. Should it be voted in its current form, it would represent, according to Bouygues' best estimate, a tax charge of around 110 million euros for 2024, payable in 2025. And it would represent a tax charge of around 60 million euros for 2025, payable in 2026. Let's now turn to slide 28 to describe the net debt evolution between the end of December 2023 and end of December 2024. As you see, the net debt increased by 2.2 billion euros since the end of 2023. This change includes First, acquisition net of disposals totaling minus 240 million euros, including acquisitions at Colas, Brick Telecom and TF1. Also, disposals at Colas, purchase of TF1 shares and investment in joint ventures by Brick Telecom. Second, Capital transactions and others for minus 66 million euros, including treasury share buyback and exercise of stock options. Sir, payment of dividends for minus 813 million euros. And last, minus 1.1 billion euros from operations that I will comment in the next slide. Turning to the breakdown of operations for the nine months 2024 on slide 29, you can observe that. First, net cash flow including lease expenses stood at 2,520 million euros, an improvement of 248 billion euros compared to nine months 2023. Second, net capex including frequencies was 1,601 million euros, an amount very similar to nine months 2023. This led to free cash flow before working capital requirements at 919 million euros, improving year on year by 254 million euros. Regarding working capital requirements, you see on the chart that since December 2023, it deteriorated by 2 billion euros and that last year over the same period, it had deteriorated by 2.2 billion euros. And what you don't see on the chart is that between 8 September 2023 and 8 September 2024, working capital requirements improved by 1.1 billion euros. We started 2024 with a very high level, and at the end of September, we are still at a very high level. Fourth quarter is always a good quarter. However, we cannot expect a 2024 fourth quarter as strong as in 2023, as fourth quarter last year was very exceptional. But as you know, it is very difficult to predict working capital requirements. As we do every year, we will remain proactive during the last two months of 2024 to manage the working capital. Last, please remember that the change in cash level had benefited in fourth quarter 2023, not only from the change in working capital requirements, but also from disposals that we won't have this year. I will now turn our attention to the financial structure on slide 30. The group maintained a high level of liquidity at 13.9 billion euros, which comprised 2.7 billion euros in cash and equivalents, and 11.2 billion euros in undrawn, medium, and long-term credit facilities. As you can see from the graph on the right, the debt maturity schedule is well spread over time. And I remind you that our next bond redemption is in October 2026. Please note that we put in place at Bouygues Telecom level the necessary credit lines anticipating the future acquisition of La Poste Mobile. Moving to slide 31, net debt was 8.5 billion euros at the end of September 2024, a strong improvement compared to end September 2023. As such, net gearing was 61% compared to 74% at end September 2023. Last, I want to highlight that the group benefits from a particularly strong financial position and that our financial credit ratings remain strong. I will now conclude this presentation on slide 33. We are confirming the group outlook for 2024. Equance will continue to improve its results in line with its strategic platform plan and Bouygues Immobilier will continue to face a challenging market environment with low visibility on the timetable for recovery. And last, in an uncertain economic and geopolitical environment and after a year of strong growth, Bouygues is targeting sales and current operating profit from activities for 2024 that are slightly up on 2023. Thank you for your attention, operator. Please open the floor for questions.

Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We will now take our first question from Nicolas Cote-Collison of HSBC. The line is open. Please go ahead.

Thank you. Hi, everyone. Three short questions, if I may. The first one is on taxes. So thanks for precising the numbers, so the $110 and $60 million. Any offsets or cost-cutting actions you may take to limit the impact on free cash flow in 2025-2026? My second question is about brick construction. You mentioned a normal cost of business representing 47% of the other intakes. It was kind of higher in H1 and Q1 too. Does it say anything about the macro environment in France? And the third and last question is on brick telecom and your pricing strategy in fiber. So I saw the new offers at BNU today. I'm just wondering, why do you need to do that when your net ads seems on track and your ADPU is fed up? I'm just wondering what makes you confident that volumes are a better strategy than value at this stage. Thank you.

I will answer the two first questions and Christian will answer to the last one. First question, tax and mitigation actions. In fact, we are optimizing our organization anyway. So when you add a new tax a few months before the end of the year, we don't have any specific action in order to mitigate that. We'll have an extra charge for that this year, that's for sure. The second question is related to the relative part of the contracts, small contracts in the order intake of BRIC construction. In fact, as we have registered during the third quarter, a huge contract in Australia, it has changed the percentage, nothing else at this stage. Okay.

Hi, Nicolas. We're getting the question for Blue Telecom with this offer. It's a BNU offer named Pure Fibre. We want to add a new segment for us. This offer is specifically designed for digital customers and is only available on the web. And regarding the customer care and after sales, except during the first month, it will be also only on the web, not with physical customer care or online. You cannot call a customer care. I imagine also that with this offer, you have no TV, no phone, and so it's a very specific offer for digital customers.

And how large do you think this market is in France or the addressable market?

The small market.

Okay. Thank you.

Between 10, probably around 10%.

Around 10%. Okay. Thank you.

Thank you. And we will now move on to our next question from Rohit Modi of Citi. Your line is open. Please go ahead.

Hi, thank you for taking my questions. I got three. Firstly, on your guidance on COPPA, you already have 6% increase in COPPA in first nine months. I understand that is a bit of one-off, but you're still guiding a slight increase. So do you expect like being conservative in the 4Q or do you expect there could be a slowdown in the 4Q? Second, on the telecoms, on the mobile service revenue growth, which has been negative. And apologies if you already mentioned this in previous quarters, but just wanted to understand your base grows by 4% year on year. Mobile app is down only 1%, but then service revenue is down 1.3. I'm not getting the math around it. If you can just give a bit more color around it. Thirdly, on big brand, you have launched it almost a month since you have launched it. Any color around how you're seeing the take-up, where you're taking the main, where the net ads coming from, it's from your own base or it's a mix of getting from other operators as well. Would be grateful.

Thank you. For your first question, considering the group guidance in terms of COPPA, in fact, COPPA is not particularly linear during the year, so especially at reconstruction level or CODAS level. So, in fact, we... We expect to be at the high end of slight increase, but we will see at the end of the year. Nothing specific should induce us to see a slowdown during the last quarter.

About your question on eBPU, I remind you that the eBPU is average billed per customer and not average revenue per customer. So it is the revenue billed to customers divided by the number of clients. And we do not disclose the revenue billed to customers for mobile. That's why you cannot do the math. About mobile service revenue, I remind you that it includes three things. First, the revenue billed to customers, mentioned before. Second, the revenue coming from incoming calls and incoming SMS. And you know that this revenue is declining year after year just because the prices are set by the RCEP, by the telecom regulation, telecom regulator, and the prices are going down year after year. And also clients migrate from SMS and call to WhatsApp or other app. It has no impact on our EBDA because at the same time there is less revenue but also less cost. The third thing that is included in the service revenues is the amortization of the onset subsidies, which is included in our service volumes. So the trend in terms of service revenues is not exactly the trend in terms of revenue built to customers, mainly because of the impact of incoming call and incoming SMS negative trend. You had another question about the big results. Today, it's still too early to observe the first results. Just in my news, our main goals are more long-term goals. We want to reduce churns, and this will take time to be visible, and we want to aggregate BookTelecom's customer households and captures. from competitors. So we are happy for the moment with what we see, but we cannot for the moment take any conclusion with that. We need some time to look at the impact on Germany.

Thank you.

Thank you. Once again, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We will now move on to our next question from Augustine . Your line is open. Please go ahead.

Yes, good morning, and thank you for taking my questions. I've got three, if I may. The first one is on . I noticed that in Q3, you had quite a strong margin improvement. I've got 75 basis points on my numbers. I was wondering whether, of course, that is sustainable. I imagine it's not, but could you also give us some insights into what is driving this strong margin improvement this quarter? My second question is on immobilier. I can see that your reservations are up in the first nine months and in Q3, yet you keep your cautious guidance. So in your opinion, what's necessary for you to turn more positive? Are you just waiting for the macro changes to improve or essentially rates to drop terribly or do you believe that some changes are needed by the state as well? And finally, on TF1, you mentioned a brand disposal which contributes positively to the copper this quarter. How much did that represent in terms of in Euro terms or if we can get some sort of estimates of how much that could contribute?

Thank you. In fact, first question, considering the improvement of margin at the current level. In fact, we are implementing our perform plan we presented during the Capital Market Day. So, in each segment, we are improving pricing, purchasing. non-profitable contracts, selectivity, so in each segment we are progressing and this induces the progression you have mentioned. What is very satisfactory for us is the fact that we can be selective and having an increase in our turnover already. And you remember that we were anticipating to stabilize during the two first years the turnover, and we do more than that, and that's perfect because we are effectively selective, and you see that in the results. So we are on track for our guidance. We consider that we feel comfortable to have this improvement being sustainable. I don't say that we will have a constant level of improvement of this margin quarter after quarter, but the trend is very satisfactory for us. Secondly, at Bouygues Immobilier, we have seen, effectively, during the first part of the year, an increase in reservations. But, you know, the macroeconomic is not so satisfactory. We have a lot of questions to be settled before being sure that we are at the lower point of the curve. So we will see, and you know that the penal mechanism ends at the end of the year, so we will see what are the different effects of the governmental policy and the macroeconomics on this particular. knowing that at the end of the day, the level of our activity in this immobilier business is very small compared to the size of the group. And third question about TF1, the disposal of this brand represented approximately 27 million euros during the last quarter. Very much.

Thank you. And we will now take our next question from Matthew Ravulia of Barclays. Your line is open. Please go ahead.

Good morning. Thank you for the presentation. I have a few questions. The first one was on equals. I noticed that one of your competitors disappointed a little bit on itself whilst you continue to grow nicely. And I was wondering if the fact that you outperformed was due to the different geographical business mix. or whether you feel you're gaining market share across the different business lines compared to some of your competitors. Then I had a few questions on telecoms. Coming back to the guidance.

Sorry, excuse me. We have some difficulties to hear you. There are some noises which makes the question difficult to understand. Sorry, could you repeat, please? I'm sorry for that.

Hello?

Pardon the interruption. Matthew, if you can still hear us, kindly. Okay. Matthew has dropped. While waiting for Matthew to recap, we'll move on to our next question from Stefan De Asia of OdoBHS. The line is open. Please go ahead.

Yes, thank you. I was just wondering whether you could, I know it's a little early, but give a little more color on the success of BIG and how hard you are pushing and to what extent you think that is a significant product in your customer base over the years to come and whether you think this is potentially extending a little bit the competition to the high street brand because so far competition was very much in the the low end of the mobile market, but with these savings, isn't there a risk that you're actually bringing some price reduction also to the high street bands and the box market? Thank you.

Regarding big offer, we have two main targets with big offer. The first one is to reduce churn, the churn of our clients. by announcing customer satisfaction, by doing then a new and attractive offer with multi-line convergent homes, with a unique pricing, with rebates on the mobile lines, with no more increase of the price after the first year. the price would remain stable and for customers subscribing to our fixed offer. We are also increasing progressive discounts that apply to each line subscribed and already had. That means that if one Clients inside the household would like to leave. It will impact all the other clients with a less important discount. So it's a good way for us to reduce charge. That's our first target. Our second target, as we have explained at the beginning of this talk, Brook Telecom is the operator in front with the lowest number of exclusive households. That means that all the lines inside the households are with the same operator. with BookTelecom. BookTelecom is the operator with the lowest number of exclusives hold or less than 40% when other operators are at higher than 50%. And so we want to attract the mobile lines of the households that are not with us today and that will also help us to increase our momentum especially in the mobile. So this is our two main targets. This will take time, as I said before, to see the results of this strategy to achieve this target, more than a few weeks, more than a few months, and so that's why I cannot give you now any figures or any impact about this offer, even if we are quite happy with it. It was a good commercial launch with no IT problem, no difficulties with our distribution channels. So everything is on track now to achieve what we want to do.

Did it contribute to your third quarter numbers in good numbers?

No, we launched this offer at the beginning of October. So as October is in the fourth quarter, it will not contribute to the third quarter figures.

My mistake. Thank you.

Thank you. Once again, as a final reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We will now move on to our next question. Once again, from Matthew Robillard of Barclays. Your line is open. Please go ahead.

Oh, thank you. Apologies. Clearly, I need to move to a bigger telecom mobile contract. I'll consider it more seriously now. Hopefully, it's better now. So, I had a question on eQuals. I saw that one of your competitors disappointed a little bit on sales, whilst you did very well on sales still. I was wondering if that was due to a different geographical or business mix, or whether you think you were gaining market share in some segments. So that's the first question. The second question was on telecoms. Earlier in the year, you guided for a slight growth for the 2026 EBITDA versus the 2023 EBITDA, EBITDA, actually. I just wanted to confirm you're talking about growth in absolute terms. This is not a slight CAGR. It's literally a slight growth between 23 and 26, low single digit, I guess. So that's two questions in one. And then, again, on telecoms, Did you benefit in any way from the Olympics in Paris in terms of your roaming revenues? Was it a good driver or was it very small? And I was also curious to understand a bit more what are the different moving parts in the others. I realize it's sunset, but as you flagged your BTS program there, and I wonder if a lot of the volatility that we've seen over the past quarters is due to a slowdown in BTS and I was wondering how it looks like. So, quite a few questions there. Thank you.

Starting with Équence, in fact, we are dynamic in all our geographies. except where we decided to withdraw. And I mentioned in particular our asset-based activities and our activity in the UK, considered as new-built activities. But elsewhere, we consider that all our markets are quite active. And so no specific reason to this growth. Only the fact that the transitions we are helping our customers to move from where they stand and to make efforts for the energy transition in particular makes the market quite active.

Regarding your first question on 2026 EBITDA target, yes, we said that it would be a slight growth compared to 2023, either in percentage or absolute value. I don't see the difference between the two. I remind you also that in 2025 we will be impacted by the energy cost. We edged our energy position in 2020 and 2021 until the end of 2024, so for the moment We have not been impacted by the energy rising cost, but it will be the case for us in 2025, which is probably different compared to other operators that have been impacted strongly in 2023 and 2024. It has not been the case for us, but it will be the case in 2025. Your other question is regarding the other cells. We do not forecast the other cells. For us, it's not a KPI for us because no margin, no cell impact, no margin impact. And so there is some volatility due to the fact that it is the end at some time on some kind of on some project and the beginning on some others, and it's very difficult to monitor the other cells, what will be the other cells the next year. We had a very small positive impact in July due to the Olympic Games. So we had more visitors coming to see the Olympic Games, but at the same time less visitors coming to visit Paris. or otherwise in France. And compare, if we look at the year forecast, the first semester was not very good in roaming compared to last year. It's a few million euros, but it was a bit less than 2023. And July was a bit higher, but very, very small, probably one or two million more. So very, very small impact.

Thank you. And if I can confirm for 2025, the energy cost headwind, I have in mind that it's around $70 million impact.

We said $80 million.

Great. Thank you very much.

Thank you. And we will now take our next question from Eric Rivari of CIC. The line is open. Please go ahead.

Yes, good morning. Two questions. First one is on equants, the 3% organic growth in Q3. Is it mainly price increases or also positive impact on volumes? And second question on CODAS. So I calculated an improvement of the COPA margin in Q3, roughly plus 60 basis points adjusted for the one-off that you had in Q3 2023. Could you give some explanations behind his significant improvement and are you expecting the same trend for Q4? Thank you.

As far as As a last question, first, we have effectively a one-off in 2023. We didn't have during the third quarter for 2024. No, you know, in COLA's life, a lot of things happen every quarter, so you couldn't expect the same improvement during the fourth quarter than we had during the third, you know. A lot of questions, seasonality, weather, weather conditions, markets. No, we are not expecting, we are expecting levels which are very homogeneous during the fourth quarter.

Okay, but on raw materials, are you noticing a decrease on oil products?

In fact, in raw materials, there are different effects. The market is good in France, and so that's a good thing. But in the same time, the circular economy increased the level of re-employment. So in a nutshell, we consider that we will be stable in raw materials. And that is the question for Colas. So I have a question. Let's say that probably we can consider that the organic growth is half of the total growth. Inflation is half, and in real term, the growth is half.

Okay. Thank you.

Thank you. And we will now take our next question from Nicola Mora of Morgan Stanley. The line is open. Please go ahead.

Yes, good morning, everyone. Just a couple from me. Actually, coming back to Colas, because we had quite a challenging start to the year, especially in some areas we were starting to restructure, Africa, the UK, North America not being great. I mean, the underlying challenges improvement in G3 is quite impressive, but it's not actually really matched by revenues. So just wondering what G3 gave you in terms of profitability that you didn't have last year. Are your cost-cutting or downsizing exercises finally yielding some results? Are you seeing some geographies being particularly strong with high margins? That would be the first one. And then on construction, same thing, we had quite a pedestrian start to the year, and suddenly a step up in Q3. I mean, the business has always been volatile, but usually more skewed to Q4 at the end of the year. I was just wondering whether there was anything to mention within construction, which we had to take in mind. Last point, sorry, on Colas. You've disposed of the Colas rail business in Italy. Is there any proceeds, any capital gains we should be aware of which might hit in Q4? That would be it, thank you.

Starting with your last question, no proceeds. with forecasted for the last quarter at glass level in Q4. You know, in our construction activities, you can have some move from one quarter to another. So there is no specific to induce from the improvement of the third quarter for the last quarter. And let's say that we are, continually trying to improve our organization so that there is nothing very specific. You can say that in France we have a quite good level of margin today due to the fact that we had an increase. You know that we were expecting an increase of activity before local elections in 2026. the starting point has been a bit delayed for that increase. We see that today and we have good results in France, for instance.

Thank you. And we will now take a follow-up question from Nicola Kurt-Cullison of HSBC. Your line is open. Please go ahead.

Just a short one on DNA and BRIC. So you mentioned a change in amortization period and an impact, a positive impact of 20 million on the DNA. So what base of DNA should we assume in Q4 and next year? Is that closer now to 330 million? A bit of guidance would be helpful. Thank you.

Okay, I'm sorry, I do not have the figures in mind. Well, that's right, you have a positive impact in Q3 because we changed from amortization period. You do not have this impact in Q4, and you should expect an increase in DNA in Q4 without this impact.

So we should be back to what we had previously.

Yes, probably, probably. But I knew that the DNA gradually increased due to the fact that for the moment, the DNA level is lower than our CapEx level. We increased our CapEx level in 2021. Our average duration period is between eight or nine years. And so it will take... It will take probably eight to nine years to reach the same level of CAPEX in terms of amortization.

And what were the assets where you extended the lifespan?

We changed the lifespan of some optical equipment in the fixed business. Okay.

Thank you.

Thank you. That was our last question. I will now hand it back to your host for closing remarks. Thank you.

Thank you for joining us today. We will be announcing full year 2024 results on 6th of March 2025. Should you have any questions, please contact our investor relations team. Their contact information is on the press release and on our website. Thank you very much for attending the meeting.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.