1 Bouygues Group presentation
Sept emb er 2014
1 BUILDING THE FUTURE IS OUR GREATEST ADVENTURE
This presentation contains forward-looking information and statements about the Bouygues group and its businesses. Forward-looking statements may be identified by the use of words such as “will”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates” and similar statements. Forward-looking statements are statements that are not historical facts, and include, without limitation: financial projections, forecasts and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance of the Group. Although the Group’ s senior management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Group, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and undue reliance should not be placed on such statements. The following factors, among others set out in the Group’s Registration Document (Document de Référence) under the section headed Risk factors (Facteurs de risques), could cause actual results to differ materially from projections: unfavourable developments affecting the French and international telecommunications, audiovisual, construction and property markets; the costs of complying with environmental, health and safety regulations and all other regulations with which Group companies are required to comply; the competitive situation on each of our markets; the impact of current or future public regulations; exchange rate risks and other risks related to international activities; risks arising from current or future litigation. Except to the extent required by applicable law, the Bouygues group makes no undertaking to update or revise the projections, forecasts and other forward-looking statements contained in this presentation.
September 2014
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Bouygues Group presentation – September 2014 1 THE BOUYGUES GROUP Slide 4
THE BUSINESSES Slide 13
H1 2014 RESULTS Slide 33
GROUP OUTLOOK Slide 81
CONCLUSION Slide 84
APPENDIX Slide 86 3
Profile
A diversified industrial group 5 businesses with different cycles focusing on three sectors: construction, telecoms and media 2013 contribution1 by business area Sales2 at €33.1bn Current operating profit2 at €1,319 m Free cash flow2 at €818m3 24(3) 4.6 223 125 149 2.4 26.1 1,005 819
Construction businesses TF1 Bouygues Telecom Key figures1 in 2013 €647m4 net profit 128,067 employees
(1) 2013 figures restated for IFRS 11 (2) Including Holding contribution: €9m for sales; -€34m for current operating profit; and -€174m for the free cash flow (3) Free cash flow is calculated before changes in WCR. It excludes capitalised interest related to 4G frequencies for €33m at Group level (o/w €13m at Bouygues Telecom level and €20m at holding company level) (4) Before the write-down of Alstom for €1,404m 4
Bouygues Group presentation – September 2014 2 Key strengths
A family company with a stable share ownership structure allowing long-term focus
A strong and distinctive corporate culture
A positioning on markets underpinned by solid demand
A solid operational track record of deliveringggg revenue and earnings growth
A sound financial profile
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A stable share ownership structure Shareholder structure at 30 June 2014 Capital Voting rights Foreign shareholders Foreign SCDM SCDM 20.9% shareholders 27.8% 38.2% 29.3%
24.1% 12.9% 30.0% 16.8% Employees Other French shareholders Other French Employees shareholders
At 31 June 2014: 335,727,874 shares and 484,648,071 voting rights. SCDM is a company controlled by Martin and Olivier Bouygues
Shareholders’ structure allowing long-term focus 6
Bouygues Group presentation – September 2014 3 A strong and distinctive corporate culture
Construction is a “good management school”
Projjgect management skills and knowhow in compppjlex projects
Masan Bay bridge, South Korea Stade de France Bouygues Telecom 3G network
Managers have experienced previous crises
Strong mobility within the Group and of top managers
Pragmatic – Cautious – Opportunistic – Entrepreneurial 7
Long-term growth opportunities
Growing long-term infrastructure needs in both developed and emerging countries Drivers: demographic growth, urbanization, saturated and aging infrastructures… Estimated total cumulative world infrastructure requirements (additions and renewal) to 2030*: 53 trillion $ New opportunities arising from environmental concerns Sustainable construction: from the building to the neighborhood Alternative transport infrastructures (railways, canals…) Strengthening existing customer base and increasing addressable market in Telecom / Media Fixed broadband market, mobile data, B2B market … QP District, Qatar
*Source OECD - rail, road, telecoms, electricity transmission & distribution, water 8
Bouygues Group presentation – September 2014 4 A solid operational track record
2001 CAGR 2013(1)
+4%+ 4 % Sales €20.5bn €33.1bn + 3 % Operating profit €876m €1,319m + 5 % Net profit2 €344m €647m3 X 4.4 DPS €0.36 €1.60
9 (1) 2013 figures restated for IFRS 11 (2) Attributable to the Group (3) Before the write-down of Alstom for €1,404m
A healthy financial profile All figures are at end December 2013 Debt under control Low gearing at 51%1 Evenly spread repayment schedule No significant off-balance sheet commitment
High level of liquidity Ability to control capex Available Cash = €8.7bn Capex-to-sales ratio2
6% StiblSustainable cash-flow 4% generation 2% Free cash flow2 = €0.8bn 0% Average Free cash flow since 2005 at €1bn Cash remittance to the holding
(1) Including impact of the write-down of Alstom 10 (2) Capex and Free cash flow exclude capitalised interest related to 4G frequencies for €33m at Group level
Bouygues Group presentation – September 2014 5 Dividend per share
1 1.5 1.6 1.6 1.6 1.6 1.6 1.2 0.90
0.75 0.5 0.36
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Dividend yield1: 2.7%2.2% 2.2% 2.5% 2.6% 5.3% 4.4% 5.0% 6.6% 7.1% 5.8%
1Dividend yield based on closing price 11
THE BOUYGUES GROUP Slide 4
THE BUSINESSES Slide 13
H1 2014 RESULTS Slide 33
GROUP OUTLOOK Slide 81
CONCLUSION Slide 84
APPENDIX Slide 86 12
Bouygues Group presentation – September 2014 6 Construction businesses
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CONSTRUCTION BUSINESSES: profile A world leader: n°7 “top international contractor” according to ENR ranking1 2013 key figures Sales4 by region Sales2: €26.1bn3 Asia & Africa Middle Eas t 6% 8% 11.1 Americas 12.8 11% 2.5 France Europe 59% (excl. Buildings & civil works Real estate Roads France) 16%
2 Operating profit : €1,005m Free cash flow2: €819m
390 437 378 331 178 110
Building & civil works Real estate Roads Building & civil works Real estate Roads (1) Companies are ranked according to construction revenue generated outside home country (2) 2013 figures restated for IFRS 11 (3) Total of the sales contributions (after eliminations within the 14 construction businesses) (4) As published in 2013 (not restated for IFRS 11)
Bouygues Group presentation – September 2014 7 CONSTRUCTION BUSINESSES: profile
Building & civil works Bouygues Construction is a world leading full service contractor in building & civil works, electrical contracting and maintenance A recognized expertise at every stage of a project from design to construction, operation, maintenance, and including financing arrangement Real estate Bouygues Immobilier is the leading property developer in France A pure player in real estate development with more than 50 years of experience, acting both in residenti al and commercilial segments and predidominan tly in France Roads Colas is a world leader in road construction and maintenance Key competitive advantage thanks to vertical integration with a widespread industrial footprint (aggregates, emulsions, asphalt mix, bitumen...) 15
CONSTRUCTION BUSINESSES: strengths & opportunities
The ability to provide innovative, high value-added solutions tailored to customers' requirements
The development of specialty activities, which are sources of growth
A strong and diversified international presence
The Baluarte bridge, Mexico The focus on long-term sustainability and the ability to adapt
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Bouygues Group presentation – September 2014 8 CONSTRUCTION BUSINESSES: high value-added solutions
High-level technical know-how A solid track record valued by customers all around the world Abilityyp to develop high value-added end-to-end offers 20 years of expertise in full service offering contracts Sports Hub, Singapore, 2010-2014 More than 120 projects (PPP/PFIs1/concessions) over the period Comprehensive solutions including design, construction, maintenance and financing Competitive advantage in sustainable construction French Ministry of Defense, Balard, 2012-2014 Increasing market demand, supported by regulation, for energy-efficient buildings Currently developing new offerings for green neighbourhood relying on the entire Bouygues Group’s expertise Green office®, Meudon
17 1PPP: Public-Private Partnerships, PFI: Private Finance Initiative
CONSTRUCTION BUSINESSES: high value-added solutions Some examples in transport: major road construction projects
L2 bypass PPP in New Coastal Road on Marseille, France RiReunion IIldsland, France
Construction of the longest off-shore viaduct The largest infrastructure project awarded in France (5.4 km) in France in 2013 Contract worth €218m for Bouygues 30-year PPP CttiConstruction Works valued at €340m for Bouygues Construction of four sections of an elevated Construction and Colas dual three-lane road Completion: 2017 Contract worth €318m for Colas Completion: 2018
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Bouygues Group presentation – September 2014 9 CONSTRUCTION BUSINESSES: high value-added solutions Some examples in transport: airports
Iqaluit International Airport, Lyon-Saint Exupéry Airport, Zagreb Airport, Canada France Croatia
Financing, design and Design and construction of a Financing, desi gn and construction of a new terminal new terminal construction of a new terminal Works valued at €160m for Works valued at €142m Works valued at €243m Bouygues Construction Handover of the first phase Handover scheduled for and Colas in 2016 end-2016 Handover scheduled for Passenger capacity: close Passenger capacity: 5 million end-2017 to 10 million 19
CONSTRUCTION BUSINESSES: development of specialty activities
Strategy Expand the offering available to customers Develop synergies with existing business areas Penetrate new growth potential markets For example: urban transport, a growing market Increasingly strong demand in large and mid-sized towns and cities Recognised know-how Rabat-Salé tramway, Morocco 30 projects completed in France since 1985 €bn Order book at Colas Rail International know-how: Cairo metro (Egypt), Rabat-Salé and Casablanca +14% (Morocco), Geneva (Switzerland), Los Teques (Venezuela), Kuala Lumpur Share of more than 1 year YoY Share of less than 1 year 1.3 (Malaysia), etc. 1.1 0.9 2013 sales at Colas Rail up +19% (€767m): 0.8 0.6 0.7 Strong growth in the order book, which enjoys increasing maturity with several 0.6 commercial successes : high-speed rail line in Morocco for €124m, RFR rapid 0.3 0.5 transit rail network in Tunis for €86m, Santiago metro in Chile for €67m 0.3 0.3 0.4 End-2010 End-2011 End-2012 End-2013 20
Bouygues Group presentation – September 2014 10 CONSTRUCTION BUSINESSES: main international contracts won in 2013 Group share – rounded up/down 50% of the order books at Bouygues Construction and Colas is to be executed in international markets Canada UK Switzerland Erlenmatt eco-neighbourhood in Basel (€130m) Iqaluit Airport (€160m) University campus in Hertfordshire (€140m) Property complex in Lewisham (€70m) Im Lenz eco-neighbourhood in Lenzburg (€110m) Road maintenance (€35m) Road maintenance in London (€205m) Hungary Slovakia US M85 motorway (€90m) R2 motorway (€80m) 1 Private property development (€200m) Operations in 80 countries Croatia Airport runway (€20m) Zagreb Airport (€240m) Cuba Hong Kong Luxury hotel complex (€60m) Subsea road tunnel (€1.15bn) Morocco Macao Luxury residence (€40m) Luxury hotel complex (€360m)1 Tangier-Kenitra high-speed Thailand rail line (€125m) PhtPhotovolt ltiaic solar power pltlants (€40m ) Tunisia Myanmar Tunis rapid rail network (€85m) Residential complex (€70m) Singapore Trinidad and Tobago Bangkok condominium tower (€100m) National oncology centre (€40m) Chad Bishan condominium tower (€100m) Countries where Bouygues Construction Chile Road (€40m) Turkmenistan and Colas generated sales in 2013 Santiago metro in Chile (€70m) Theatre and concert centre (€340m) International university (€90m) 21 (1) Partial order intake in 2013
CONSTRUCTION BUSINESSES: focus on long-term sustainability
A safe and extensive order book providing good visibility on future activity A record order book of €27.5bn at end-December 2013, up 3% year-on-year and up 22% since end-2010 An increase in the depth of the order book, giving time to adapt Order books (€m) 2013 orders at Bouygues Construction and Colas to be executed beyond one year (Y+1) are up 7% y-o-y and represent 44% of the total Bouygues Construction Bouygues Immobilier Colas +22% A strong ability to adapt +3% 26,808 27,530 Cost structure mostly variable (attached to projects) 24,806 22,575 6,704 7,088 +6% Geographical flexibility of teams 6,472 6,141 2,957 2,610 -12% Management’s proven responsiveness 3,051 2,280 Focus on controlling operating and financial risks in order 17,147 17,832 +4% to ensure long-term performance 14,154 15,283 Commercial selectivity (preference is given to margin)
Strict control procedures and cautious guidelines End-2010 End-2011 End-2012 End-2013
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Bouygues Group presentation – September 2014 11 CONSTRUCTION BUSINESSES: robust financial profile
A solid profitability1 Operating profit (€m) and margin 5,1% 5,3% 5,0% 6,0% 4,6% 4,7% 4,2% 3,7% 3,9% 5,0% 3,6% 3,7% 4,0% 27%2,7%2,8% 1,236 1 966 1,158 3,0% A recurring FCF generation (€m) 1,079 1,020 783 949 1,005 2,0% 535 832 1,0% 384 379 0,0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 819 784* 812 695 617 605 A high net cash position1 (€m) 497 420 450 488 3,547 368 3,404 3,281 3,175 3,308 161 2,794 2,495 2,587 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2,259 2,440 *Excluding Axione disposal at Bouygues Construction for €163m 1,689 1,185
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 23 (1) 2013 figures restated for IFRS 11
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Bouygues Group presentation – September 2014 12 TF1: profile A strong media group The leading TV channel in France, TF1 Strong position on free-to-air market with 4 channels 12 other pay-TV channels including Eurosport (n°1 sport TV channel in Europe) Diversification activities: audiovisual rights and production, licensing… 2013 key figures €2.5bn revenue 2013 sales breakdown €137m net profit1 TF1 Group Other activities advertising Around 3,800 employees 68% 32% Leader in audience share A core channel offering a unique exposure for advertisers generating a premium to the leader Journalist Harry Roselmack A leadership in combined audience share (28.9%2 for TF1, TMC, NT1 and HD1 at end-December 2013) representing an unrivalled television offer A unique position in Europe Channels and brands available on every media and every screens A true multimedia advertising agency (TV, radio, web, press) 25 1 Attributable to the group 2 Individuals > 4y - 2013 - Médiamétrie / Médiamat
TF1: targets Strengthen core free-to-air business Maintain the group’s leading market position Develop close relationship with TV viewers thanks to strong positions in new media Keep innovat ing to en hance t he effic iency of ad campa igns and increase monetiiization Continue the development of TF1’s pay services and products Eurosport: a strong asset Partnership signed with Discovery Communication Foster the counter-cyclical advantage of diversification Develop different sales modes (B2B, B2C,…) Improve profitability Phase 2 of the cost-optimization plan launched in 2012: increase productivity and flexibility Review the Group’s processes and organizations Pursue the rationalization of diversification businesses 26
Bouygues Group presentation – September 2014 13 27
BOUYGUES TELECOM: profile Major actor of the French telecom market for more than 17 years Mobile commercial launch in 1996, fixed broadband commercial launch in 2008 11.1 million mobile customers at end-December 2013 for a 15% market share 2.0 million fixed broadband customers at end-December 2013 for an 8% market share A network of more than 600 stores Tradition of innovation to deliver value for money to customers First call plans in the French market First unlimited bundles (Neo) First quadruple play offer (ideo) First “SIM-only/Web-only” offer for less than €25 (B&YOU) 2013 key figures €4.7bn revenue €13m net result2
9,100 employees 28 1SIM-only/web-only 2Attributable to the group
Bouygues Group presentation – September 2014 14 BOUYGUES TELECOM: facing a challenging mobile market
A challenging mobile market since 2012 Strong growth in SIM-only plans transforming the business model Sharp fall in pr ic ing Operators’ profitability squeezed significantly due to more and more customers switching to the new price plans combined with falls in market share
Bouygues Telecom reacted quickly beginning of 2012 with two strategic priorities Transform the business model Reposition the offering in order to boost differentiation and return to growth
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BOUYGUES TELECOM: technology and innovation A strong mobile network 15,000 sites deployed covering 99% of the French population in 2G and 96% in 3G 4G network open commercially on 1 October 2013: 70%1 of the population having access to 4G Network sharing agreement signed with SFR to significantly improve geographical coverage and network quality as well as generate cost savings Access to spectrum secured to support mobile data services in the future A capacity of 73 MHz of spectrum (27% of the total available) on 800, 900, 1,800, 2,100 and 2,600 MHz bands Fixed network 78% of the population covered in unbundled zones – 50% of the population covered by Bouygues Telecom’s own network with a target to add 1 million households by end 2014 1.1 million Fibre home passed (FTTH) – Target of 1.4 million by end 2014 and 2 million by end 2015 More than 7 million households eligible for very-high-speed thanks to Numericable wholesale agreement (1) Data collected on 13th March 2014 30
Bouygues Group presentation – September 2014 15 BOUYGUES TELECOM: opportunities
Average GB consumption per month by Bouygues Creating value by developing mobile data use Telecom customers in 3G vs 4G 4G allows intensive data use making new uses possible Pursuing growth in the fixed broadband business by making services and very-high-speed broadband accessible to as many people as possible Roll out of the directly-owned network enabling Bouygues Telecom to offer customers market-beating prices (€15.99, €19.99 and €25.99) Fixed broadband sales from +31% network (m€)1 820 Seize opportunities in B2B markets : take advantage of the €13bn2 corporate market opening up to competition 627 Major existing corporate clients include BNP Paribas, Lafarge, Foncia etc. 414 243
2010 2011 2012 2013 31 1Sales from network excluding ideo discount 2Estimate by Arcep and Bouygues Telecom
THE BOUYGUES GROUP Slide 4
THE BUSINESSES Slide 13
H1 2014 RESULTS Slide 33
GROUP OUTLOOK Slide 81
CONCLUSION Slide 84
APPENDIX Slide 86 32
Bouygues Group presentation – September 2014 16 ANNEX Reminder: change of accounting methods in 2014
As announced
The figures published in 2013 have been restated for IFRS 11
Following the sale of a controlling stake to Discovery Communications on 30 May 2014, TF1's remaining 49% interest in Eurosport International is consolidated by the equity method from 1 June 2014
To simplify the accounting method, Alstom’s contribution to Bouygues’ net profit is now booked only in respect of Bouygues’ Q1 and Q3; it is calccalcululatedated from the net results reported by Alstom for the six months ended 31 March and 30 September
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HIGHLIGHTS AND KEY FIGURES
BUSINESS AREAS
ALSTOM
FINANCIAL STATEMENTS
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Bouygues Group presentation – September 2014 17 Highlights
In a challenging economic and competitive environment in H1 2014 in France, Bouygues continues to demonstrate
Its competitiveness and its innovation capacity to the benefit of customers Robust commercial performance of the construction businesses Good audience ratings at TF1 Success of the new commercial offers at Bouygues Telecom No. 1 in the fixed activity for the third consecutive quarter1 4G taken up by 16% of mobile customers
Its ability to ensure the strength of its financial structure while operating conditions were more difficult, in particular for Bouygues Telecom and Colas in France Ability to sell assets at the right moment in order to finance new developments Ability to find the financial resources to improve free cash flow generation
(1) Company estimate for Q2 2014 and Arcep figures for Q4 2013 and Q1 2014 35
Group key figures
€m H1 2013 restated H1 2014 Change
Sales 15,094 15,182 +1%1 Current operating profit 347 134 -€213m Operating profit 347 523(2) +€176m Net profit attributable to the Group 188 410(3) +€222m
(1) Up 1% like-for-like and at constant exchange rates (2) Including non-current operating income of €81m related to Bouygues Telecom and a capital gain of €308m on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%) (3) Including a net capital gain of €240m on the sale by Colas of its stake in Cofiroute
Sales were driven by international growth ((pup 8% vs H1 2013 ) Current operating profit mainly reflects the expected decline in profitability at Bouygues Telecom Operating profit includes non-current items giving a positive €389m Non-current income of €737m related to the sale of the controlling interest in Eurosport International in Q2 2014 and to litigation settlements at Bouygues Telecom Non-current charges of €348m mainly related to the cost of the transformation plan at Bouygues Telecom Net profit attributable to the Group includes a net capital gain of €240m on the sale of the stake in Cofiroute in Q1 2014 36
Bouygues Group presentation – September 2014 18 Group free cash flow
€m H1 2013 restated H1 2014 Change
Cash flow 1,002 1,044 +€42m
- Cost of net debt (157) (163) -€6m
- Income tax expense (98) (59) +€39m
- Net capital expenditure (592)2 (592) = Free cash flow1 155(2) 230 +€75m
(1) Before change in WCR (2) Excluding capitalised interest related to 4G frequencies for €21m at Group level
Tight control of capital expenditure
The Group managed to find the financial resources to withstand the decline in H1 current operating profit and maintain free cash flow generation Cash flow benefited from non-current income at Bouygues Telecom 37
Group financial position
End-June End-Dec 2013 End-June €m Change 2013 restated 2014 restated
Shareholders' equity 8,669 8,952 +€283m 9,603 Net debt 4,435 5,174 +€739m 5,757 Net gearing 51% 58% +7 pts 60%
Change in net debt between end-December 2013 and end-June 2014 reflects The usual seasonal effect at Colas' business Proceeds from the sale of the stakes in Cofiroute for €780m in Q1 2014 and in Eurosport International for €256m in Q2 2014 A particularly unfavourable trend in WCR not representative of the full-year
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Bouygues Group presentation – September 2014 19 HIGHLIGHTS AND KEY FIGURES
BUSINESS AREAS
ALSTOM
FINANCIAL STATEMENTS
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Construction businesses
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Bouygues Group presentation – September 2014 20 Robust commercial performance of the construction businesses
Order books (€m) Order book: €28.0bn at end-June 2014, up 3% year-on-year Bouygues Construction Bouygues Immobilier ClColas +3%
€28.6bn €27.3bn €28.0bn Increased international presence 7,856 7,570 8,242 50% of the order book at Bouygues Construction and Colas on international markets (vs 46% at end-June 2013): €12.9bn, up 15% 3,060 2,815 2,210 year-on-year
17,650 16,877 17,537
End-June End-June End-June 2012 2013 2014
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A tougher environment in France
The French market was tougher in H1 2014 Slowdown in public-sector orders since the municipal elections, particularly in roads Scarcity of very large contracts No recovery in the property market
However Bouygues Construction's order book provides good visibility A number of large contracts were booked in H1 2014: Paris-Bercy sports stadium, 'City of Music' on Seguin island at Boulogne-Billancourt and new hospital buildings in Strasbourg Government measures to stimulate residential property are set to be taken in Q4 2014 (impact in 2015) Colas' railways activity is growing The potential for large infrastructure projects remains strong in the medium term, notably as part of “Grand Paris” infrastructure programme Example: contract for package 2 of the Paris metro line 14 extension, booked in July 2014 42
Bouygues Group presentation – September 2014 21 Dynamic international activity Operations in more than 100 countries Main international orders taken in H1 2014 Sales generated by Bouygues Construction and (rounded up/down) Colas in H1 2014 (and change vs H1 2013)
Switzerland Facilityyg management services Europe (excl. France): (5 years) at Crédit Suisse offices €2.1bn (+13%) (€90m) Canada France: Ankenbüel residential complex Highway 63 in Americas: €5.9bn (-4%) at Zumikon (€60m) Alberta (€110m) €0.9bn (+2%) UK US 3 rail contracts (€130m) Parks Highway in Asia, Oceania & Alaska (€60m) Middle-East: Africa: €1.1bn (+14%) Cuba €0. 6bn (=) Singapore Las Brujas hotel New Futura condominium tower (€70m) (€90m) Tai Thong condominium tower Congo (€70m) Brazzaville northern road exit (€40m) Thailand Ghana Australian Embassy (€70m) Ridge hospital (€160m) Countries where Bouygues Construction and Nigeria 43 Colas generated sales in H1 2014 Jabi Lake shopping centre (€60m)
International momentum: the example of Canada (1/2)
Bright economic prospects in the short- and medium terms One of the countries in the world the least affected by the crisis Civil engineering infrastructure needs in Canada estimated at more than CAD170bn1 Operations by Colas since 1962 and Bouygues Construction since 2008 2013 sales of over €1bn Average annual sales growth of 7% since 2007 New developments in Canada At end-2013, Colas set up operations in Ontario with the acquisition of Furfari Paving, a roadworks company In July 2014, Bouygues Construction took an 85% interest in Canadian company Plan Group, specialising in electrical engineering (design, installation, maintenance and related services) 2013 order book: ~€260m. 2013 sales: ~€240m Consolidated in Bouygues Construction's financial statements from the financial close (scheduled end-Q3 2014)
44 (1) Source: Ernst and Young report, ‘2013 infrastructure’, Global Priorities, Global Insights
Bouygues Group presentation – September 2014 22 International momentum: the example of Canada (2/2) Examples of completed or ongoing projects
Surrey hospital Motorway and rail Sports facilities for Iqaluit International (British Columbia) contracts Pan American Games Airport (Arctic North) 30-year PPP to finance, (Quebec and Alberta) (Ontario) Financing, design and design, build, operate and Construction and upgrading Financing, design and construction of a new maintain a hospital building of sections of Highways 73 construction of sports terminal Contract worth €114m for and 85 in Quebec facilities in Ontario for the Works valued at €160m Bouygues Construction Construction of an 2015 Pan American Games for Bouygues Duration of the works: intermodal rail logistics hub Contract worth €111m for 2008-2011 in Calgary Bouygues Construction Construction and Colas Contract worth €160m for Colas Duration of the works: Handover scheduled for Duration of the works: 2012-2014 end-2017 2012-2015 45
Business activity at Bouygues Construction
Good level of order intake Order book (€m) €5.2bn in H1 2014, up 2% year-on-year For execution in Y Includes the 'City of Music' contract on Seguin island for around For execution in Y+1 For execution from Y+2 to Y+5 €200m in Q2 2014 Long-term order book (beyond Y+5) +4%
Order book at a high level of €17.5bn at end-June 2014, 17,832 16,877 17,537 up 4% year-on-year 2,742 2,729 2,609 Strong visibility on full-year 2014 with €10.8bn in sales secured 2,938 3,643 at 30 June 2014 6,203
6,105 6,076
8, 887 5,105 5,209
End-June 2013 End-Dec 2013 End-June 2014
‘City of Music’ on Seguin Island, 46 Boulogne-Billancourt
Bouygues Group presentation – September 2014 23 Business activity at Bouygues Immobilier
Residential property reservations reflect a market in crisis Reservations (€m)1 Increased wait-and-see attitude since Q2 2014 and market contraction expected in 2014 Commercial property Residential property Commerci al effort s stdtepped up
Necessary trade-off between volumes and margins 955 -23% Decline in reservations in H1 2014 not representative 203 737 of the full year 62 -69% A number of commercial property projects and significant residential block sales expected in H2 2014 -10% 752 675
H1 2013 H1 2014 Les Lodges, Chanteloup-en-Brie, labelled as an “exceptional building” by Ademe
47 (1) Definition: residential property reservations are reported net of cancellations. Commercial property reservations are firm orders which cannot be cancelled (notarised deeds of sale)
Business activity at Colas
Order book at a high level of €8.2bn, up 9% year-on-year Order book (€m) Decline in order intake in France following the slowdown in Mainland France International and French overseas territories local authority spending after the municipal elections Strong momentum in FhFrench overseas tititerritories an d +9% 7,856 8,242 international markets 7,228 7,570
3,515 -11% Longer order book 4,021 3,634 3,941 Orders to be executed beyond 2014 were up 35% year-on- year (up €945m) at end-June 2014
4,727 +30% Orders to be executed in 2014 were down 5% year-on-year 3,594 3,835 3,629 at end-June 2014
End-June End-June End-June End-June 2011 2012 2013 2014
Roland-Garros airport, Reunion island
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Bouygues Group presentation – September 2014 24 Financial results of the construction businesses
€m H1 2013 restated H1 2014 Change
Sales 11,632 11,854 +2%1 o/w France 7,209 7,040 -2% o/w international 4,423 4,814 +9% Current operating profit/(loss) 201 137 -€64m o/w Bouygues Construction 204 180 -€24m o/w Bouygues Immobilier 84 71 -€13m o/w Colas (87) (114) -€27m Current operating margin 1.7% 1.2% -0.5 pts
(1) Up 3% like-for-like and at constant exchange rates (down 3% in France and up 11% internationally)
Sales grow th driv en by international activities Start of a number of major projects at Bouygues Construction Tougher French roads market for Colas and increase in the current operating loss at the sales of refined products activity Options are currently being reviewed to stem recurrent losses at the sales of refined products activity (operating loss of €30m in H1 2014 vs €23m in H1 2013 and €46m in 2013) 49
ANNEX Key figures at Bouygues Construction
International Order intake (€m)1 Order book (€m) France 6,893 For execution in Y For execution in Y+1 6,134 6,105 +2% For execution from Y+2 to Y+5 2,559 5,052 5,174 Long-term order book (beyond Y+5) 2,390 17,832 3,225 -5% 17,147 16,877 17,537 2,366 2, 252 2,742 2,702 2,729 2,609 4,334 3,643 3,744 +9% 5,959 2,938 6,203 2,880 2,686 2,922 6,105 6,076 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 8,486 8,887 (1) Definition: contracts are booked as order intakes at the date they take effect 5,105 5,209
End-Dec 2012 End-June 2013 End-Dec 2013 End-June 2014 €m H1 2013 restated H1 2014 Change Americas Sales 5,228 5,558 +6%2 At end-June 2014 Africa 5% o/w France 2,901 2,909 = 5% Asia and o/w international 2,327 2,649 +14% Middle East Current operating profit 204 180 -€24m 18% Current operating margin 3.9% 3.2% -0.7 pts France Europe 53% (excl. Net profit attributable to the Group 131 123 -€8m France) 19% (2) Up 7% like-for-like and at constant exchange rates 50
Bouygues Group presentation – September 2014 25 ANNEX Key figures at Bouygues Immobilier Reservations (€m)1 Order book (€m) Commercial property 1,314 2,815 1,243 Residential property 2,610 68 1,045 -21% 324 955 618 2,210 yoy 943 -23% 427 99 317 203 737 271 62 -69% 1,175 844 990 2,197 2,183 1,939 728 752 675 -10%
H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 End-June 2013 End-Dec 2013 End-June 2014
(1) Definition: residential property reservations are reported net of cancellations. Commercial property reservations are firm orders which cannot be cancelled (notarised deeds of sale)
€m H1 2013 restated H1 2014 Change Sales 1,143 1,192 +4%2 o/w residential 973 986 +1% o/w commercial 170 206 +21% Current operating profit 84 71 -€13m Current operating margin 7.3% 6.0% -1.3 pts Net profit attributable to the Group 45 42 -€3m (2) Up 3% like-for-like and at constant exchange rates 51
ANNEX Key figures at Colas
Order book (€m)
International and French overseas territories Mainland France
+9% 8,064 8,242 H1 2013 7,531 7,570 €m H1 2014 Change 7,094 7,088 restated
3,615 3,515 -11% Sales 5,456 5,294 -3%1 3,994 3,941 3,523 3,277 o/w France 3,377 3,155 -7% o/w international 2,079 2,139 +3% Current operating +30% (87) (114) -€27m profit/(loss) 4,449 4,727 3,537 3,629 3,571 3,811 Net profit/(loss) (()32) 317(2) +€349m attributable to the Group (1) Down 2% like-for-like and at constant exchange rates End-MarchEnd-March End-June End-June End-Sept End-Sept End-Dec End-Dec 2013 2014 2013 2014 2013 2014 2013 2014 (2) Including a net capital gain of €385m on the sale of the stake in Cofiroute
52
Bouygues Group presentation – September 2014 26 53
H1 highlights at TF1 Group audience share1 (%) Stable audience ratings at the TF1 group in H1 2014 28.429.0 28.9 0.5 0.9 2.1 2.1 1.9 TF1 channel audience ratings progressed in Q2 2014 (up 0.8 pts 3.6 3.5 3.2 vs Q2 2013) spurred by the 2014 FIFA World Cup HD1 16.9m viewers for the France/Germany quarter-final, a record figure all NT1 programmes included since October 2007 22.7 22.9 22.9 TMC TF1
Sale of an additional 31% interest in Eurosport International to H1 2012 H1 2013 H1 2014 Discovery Communications on 30 May 2014 Consolidation by the equity method of TF1's remaining 49% interest from 1 June 2014
On 29 July 2014, CSA rejected LCI's request to migrate to free-to-air DTT
2014 FIFA Wold Cup show, (1) Individuals aged 4 and over – Source: Médiamétrie Denis Brogniart, Estelle Denis and Franck Leboeuf 54
Bouygues Group presentation – September 2014 27 Financial results at TF1
Q1 Change vs Q2 Change vs H1 Change vs €m 2014(1) 2013 2014(1) 2013 2014(1) 2013 Sales 556 -1% 619 -3% 1,175 -2%2 o/w group advertising 369 = 430 -5% 799 -2% Current oppgperating profit 23 +€39m 27 -€60m 50 -€21m Current operating margin 4.1% +6.9 pts 4.4% -9.2 pts 4.3% -1.6 pts Operating profit 23 +€39m 350(3) +€263m 373(3) +€302m Net profit attributable to the Group 15 +€21m 308 +€260m 323 +€281m (1) At Bouygues group level, the sales and operating profit of Eurosport International remained included in the results of TF1 until the sale of the additional 31% stake in Eurosport International to Discovery Communications on 30 May 2014 (2) Down 2% like-for-like and at constant exchange rates (3) Including a capital gain of €323m on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%) Current operating profit includes the cost of screening the FIFA World Cup and the savings from the optimisation plan €56m in programming costs related to the 2014 FIFA World Cup in Q2 2014 €10m of recurrent savings generated in H1 2014 with a total of €66m generated since 2012 and a targeted €85m by end-2014
Q2 2014 operating profit includes a capital gain of €323m on the sale of the 31% stake in Eurosport International and the remeasurement of the remaining 49%
55
56
Bouygues Group presentation – September 2014 28 Bouygues Telecom's strategy
Given the prospect of exponential growth in digital services, Bouygues Telecom is implementing an aggressive strategy around three main priorities Creating value by developing mobile data use Pursuing growth in the fixed broadband business by making services and very-high-speed broadband accessible to as many people as possible Accelerating the company's transformation while reasserting its positioning
Bouygues Telecom has the necessary strengths to regain increased competitiveness on a market with four operators A state-of-the-art mobile network, and a comprehensive portfolio of frequencies Attractive offers and a technological breakthrough in the fixed activity A cost structure adapted to the changed market
57
Creating value by developing mobile data use (1/2)
A quality mobile network requires a large quantity of spectrum In 4G, the speeds available to customers are directly correlated to an operator's quantity of frequencies In the long term, all frequency bands will be used for 4G (technological neutrality)
Bouygues Telecom has invested in a portfolio of frequencies, giving it a long-term competitive advantage, in order to implement its strategy of winning high-value customers Acquisition of nearly a 1/3 of available spectrum Breakdown of the main operators’ frequencies in order to prepare for an explosion in data usages
€1.5bn invested in acquiring frequencies and 11% €70m of annual 4G licence fee related to the 27% Bouygues Telecom 1800 MHz refarming Orange 29% A diversified spectrum portfolio containing SFR Iliad all the frequency bands 31%
58
Bouygues Group presentation – September 2014 29 ANNEX Breakdown of spectrum in France
Quantity of frequencies allocated to the various operators (MHz duplex)1 As at 15 July 2014 2 30 11% 24 5 20 79 29% 20 15 5 24 10 10 20 20 84 31% 10 10 23(2) 10 10 15 15 73 27%
800 MHz 900 MHz 1 800 MHz 2 100 MHz 2 600 MHz TOTAL % of total
Bouygues Telecom Orange SFR Free Not allocated Bouygues Telecom has 31% of the low frequencies (800 MHz and 900 MHz) which provide quality 4G indoors and facilitate data usages
(1) The quantity of FDD (Frequency Division Duplexing - a technique where two separate frequency bands are used at the transmitter and receiver side) spectrum is rounded up or down. Source: Arcep (2) The quantity of frequencies allocated to Bouygues Telecom in the 1800 MHz band, after the return of spectrum in certain towns and cities according to a timetable 59 provided in Arcep decision No. 2013-0514.
Creating value by developing mobile data use (2/2) A modern, high-quality mobile network As early as 2011, Bouygues Telecom initiated a complete modernisation of its network...
2011 2013 2014 Investment in single RAN1 Opening of the widest 4G network First operator to launch 4G+ technology Aggregation of 1800 MHz More than 7,000 4G-compatible sites Refarming of 1800 MHz frequencies with 2600 MHz or 800 MHz
....enabling it to become the No. 1 4G operator today 2 No. 1 in 4G coverage with 70% of the population covered2 4G coverage in July 2014 70% 66% No. 1 in speeds thanks to 4G+ (speeds of up to 220 Mbits/s3) % of population % of country
Innovation to be launched in 2015: Ultra High Speed Mobile 30% 22% 24% An offer competitors will find difficult to match 18% Speeds close to 300 Mbits/s thanks to the aggregation 1.7% 1.5% of 3 frequency bands (1) Single RAN technology allows operators to support all existing mobile communication standards (from GSM to LTE) on one single network 60 (2) Arcep observatory on the coverage and quality of mobile services (3) Maximum theoretical download speed
Bouygues Group presentation – September 2014 30 ANNEX A modern, high-quality mobile network
According to Arcep's survey of the quality of mobile services in mainland France in June 2014, Bouygues Telecom is
No. 2 all criteria inclu ded No. 1 for su ccessfu l 5-min web browsing in 3G
Number of above-average indicators Successful 5-min web browsing in 3G 258 100%
96%
92%
88%
84% 0
80% 61
ANNEX The positive impact of 4G for Bouygues Telecom
The average data use of a Bouygues Telecom customer
GB/customer Launch of 4G 2 All customers The average data use of a Active 4G customers Bouygues TlTelecom customer: x2 since the launch of 4G 1
0 janv.-12Jan-12 Jul-12 juil.-12 janv.-13Jan-13 juil.-13Jul-13 janv.-14Jan-14 Jul-14 juil.-14
Bouygues Telecom business customer mobile subscriber base
Launch of Business customer mobile 4G subscriber base up 7% since the launch of 4G + 7 %
Jan-13janv.‐13 avr.Apr-13‐13 juil.Jul-13‐13 Oct-13 oct.‐13 Jan-14 janv.‐14 avr.Apr-14‐14 62
Bouygues Group presentation – September 2014 31 ANNEX From 4G+ to Ultra High Speed Mobile Bouygues Telecom already offers 4G+ and is preparing for Ultra High Speed Mobile which competitors will find difficult to match
From 4G+... …to Ultra High Speed Mobile AAtiggregation of 2 frequency ban ds: each new Aggregation of 3 frequency bands 2600 or 800 MHz base station can provide 4G+ (800 MHz/1800 MHz/2600 MHz) for an directly thanks to the1800 MHz already rolled available total of 45 MHz out at 7,000 sites Speeds up to 3 times faster than 4G Speeds up to twice as fast as 4G Available in France's 16 biggest towns and cities from September 2014 +
1
or
63
Pursuing growth in fixed broadband (1/3)
The network directly owned by Bouygues Telecom is already accessible to 12m households in broadband and to 1.1m households in FTTH1 Enabling Bouygues Telecom to offer its customers market-beating prices (€15. 99, €19. 99 and €25. 99) Share of Bouygues Telecom fixed broadband customers on directly-owned network
Roll-out is speeding up in order to increase the number of customers that may benefit 45% 55% 65% from these low prices June 2014 End-2014 2016 Winning new customers on the directly-owned network Coverage targets for directly-owned network at end-2015 16m eligible households for broadband 2m households with access to FTTH1 Agreements with SFR & Orange for a target of 6.5m households covered by FTTH in the long term
(1) Number of fibre optic horizontal and vertical connections by Bouygues Telecom 64
Bouygues Group presentation – September 2014 32 Pursuing growth in fixed broadband (2/3)
Strategy of offering low prices and technological breakthroughs in fixed broadband since end-2013
Nov 2013 Marc h 2014 June 2014 Q4 2014
2P broadband offer 3P broadband offer 3P FTTH offer Launch of the new for €15.99/month for €19.99/month for €25.99/month “Miami” TV box
Bouygues TTlelecom is preparing for a revoltilution: biibringing toge ther traditi ona l te lev is ion an d web content, responding to the growing appetite for consumption on demand Launch of a major technological innovation by the end of the year: the “Miami” TV Box
65
ANNEX The “Miami” TV Box
Partnership with Google and A fast and pertinent access to the large suggestion engine based on eco-system of user preferences Android developers
One single box and Connection possible from access to three all Android-compatible technologies devices (DTT, IPTV, OTT) The “Miami” TV Box
Comprehensive catalogue of TV and web in a single applications via access to interface (connected television, Google Play Store games, VOD, etc.)
66
Bouygues Group presentation – September 2014 33 Pursuing growth in fixed broadband (3/3)
A revolutionary TV box at an affordable price and a reduced cost
TV box production cost halved vs the Bbox Sensation… ...benefitting from perpetual app innovations by Android developers at an affordable price... ...and fully in line with the operator's strategy of offering market-beating prices An attractively-priced premium offer (less than €30/month)
By integrating 3 technologies (DTT, IPTV, OTT), the “Miami” TV Box offers television and the related services via a 3P offer to a larger number of customers
67
Accelerating transformation while reasserting the positioning (1/2)
Helping customers embrace the new uses of digital technology Redesigned stores, more focused on the sale and use of connected objects Enhanced mobile customer relations with advisers based in France
Simplification of offers and processes The radical simplification of offers will facilitate choice for customers: there will be fewer offers, they will be clearer and easier to compare As early as the end of 2014, this far-reaching overhaul will simplify processes and automatically reduce the use of support functions (IT, marketing, etc.)
68
Bouygues Group presentation – September 2014 34 Accelerating transformation while reasserting the positioning (2/2)
Adapt the cost structure to the fall in market value Roll-out of a plan to generate savings of €300m by end-2016 vs 2013, around half of which in 2015 These savings are to come from the simplification of offers and processes and the related downsizing Terms of the draft redundancy plan currently being negotiated with social partners Downsizing target: around 1,500 jobs The first redundancies could take place at the beginning of November 2014
The implementation of these transformations will trigger a major change in the organisation of the company and make it more dynamic and more agile to the benefit of customers
69
H1 commercial performance, a result of the strategy
End- End- End- Net growth of the fixed broadband business (‘000)1 '000 Dec March June 2013 2014 2014 100 102 Mobile customer base 11,143 11,064 11,024 72 o/w B&YOU subscribers 1,750 1,876 1,966 40 45 Fixed subscribers1 2,013 2,113 2,215 10
Total subscriber base 13,156 13,177 13,239 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Growth in value-added plans
2 More than 70% of retail plan customers subscribed to a value-added plan Active 4G3 subscribers ('000) at end-June 2014 and share of the total mobile subscriber base 16%3 of the mobile subscriber base uses 4G with average usage of 2GB/month 1,800 Nearly 60% of B&YOU customers were on a 4G plan ≥ 3GB at end-June 2014 1,400 1,000 Confirmed success of the new fixed broadband offers 16% 13% Bouygues Telecom No. 1 in terms of net adds4 for the third quarter running 9% Net growth of 202,000 customers in H1 2014 End Q4 13 End Q1 14 End Q2 14 (1) Includes broadband and very-high-speed subscriptions (2) Offer with data consumption higher or equal to 500MB/month (3) Customers having used the 4G network in the last 3 months (Arcep definition) (4) Company estimate for Q2 14 and Arcep figures for Q4 13 & Q1 14 70
Bouygues Group presentation – September 2014 35 Financial results of Bouygues Telecom
€m H1 2013 H1 2014 Change Sales 2,287 2,177 -5%1 Sales from network 2,113 1,940 -8% EBITDA 469 332 -€137m
Current operating profit/(loss) 91 (41) -€132m Operating profit 91 44(2) -€47m EBITDA minus Capex 62(3) (5) -€67m (1) Down 5% like-for-like and at constant exchange rates (2) Including non-current income of €85m: €429m for litigation settlements and other minus €344m in provisions for adaptation costs and other (3) Excluding capitalised interest related to 4G frequencies for €8m As expected, sales and EBITDA reflect commercial performances, the repricing of the subscriber base and the growing share of SIM-only plans Repricing4 rate of the retail plan subscriber base: 76% at end-June 2014 vs 60% at end-December 2013 EBITDA impacted by a €30m 4G licence fee related to the refarming of 1800 MHz in H1 2014 Bouygues Telecom finds its resources independently to finance its ongoing transformation The costs of the transformation plan are offset by litigation settlements The "EBITDA minus Capex" item is positive in Q2 2014: +€12m vs -€17m in Q1 2014 71 (4) Number of retail customers subscribing to a plan whose price has been revised since April 2013 as a percentage of the total retail plan subscriber base
ANNEX Key figures at Bouygues Telecom
Change vs Change vs Change vs €m Q1 2014 Q2 2014 H1 2014 Q1 2013 Q2 2013 H1 2013 Sales 1,085 -5% 1,092 -4% 2,177 -5% Sales from network 966 -9% 974 -7% 1,940 -8% EBITDA 163 -€49m 169 -€88m 332 -€137m EBITDA/sales from network 16.9% -3.0 pts 17.4% -7.1 pts 17.1% -5.1 pts Current operating profit/(loss) (19) -€47m (22) -€85m (41) -€132m
Operating profit/(loss) 181(1) +€153m (137)2 -€200m 44 -€47m Net profit/(loss) attributable 110 +€94m (86) -€125m 24 -€31m to the Group
EBITDA minus Capex (17) -€20m3 12 -€47m3 (5) -€67m3
(1) Including non-current income of €200m related notably to litigation settlements (2) Including non-current charges of €115m: €129m for litigation settlements and other minus €244m in provisions for adaptation costs and other (3) Excluding capitalised interest related to 4G frequencies for €8m in H1 2013 (o/w €4m in Q1 2013 and €4m in Q2 2013) 72
Bouygues Group presentation – September 2014 36 ANNEX Fixed and mobile business and financial performance
End-June End-Sept End-Dec End-March End-June '000 2013 2013 2013 2014 2014 Mobile customer base 11,286 11,094 11,143 11,064 11,024 o/w plan subscribers1 9,802 9,760 9,910 9,940 9,984 o/w prepaid customers 1,484 1,334 1,233 1,124 1,040 Fixed broadband customer base2 1,901 1,941 2,013 2,113 2,215 o/w very-high-speed3 320 334 363 378 368
4 Sales from the fixed broadband network (€m) B&YOU mobile subscriber base ('000) 219 222 207 213 1,966 197 203 1,876 1,750 1,634 1,509 +11% +9% 1,334
Q1 13 Q1 14 Q2 13 Q2 14 Q3 13 Q4 13 End-March End-June End-Sept End-Dec End-March End-June 2013 2013 2013 2013 2014 2014 (1) Plan subscribers: total customer base excluding prepaid customers according to the Arcep definition (3) Arcep definition: subscriptions with peak downstream speed higher or equal to 30 Mbit/s (2) Includes broadband and very-high-speed subscriptions (4) Sales from network excluding the ideo discount 73
ANNEX Key indicators at Bouygues Telecom
Plan Prepaid Total subscriber base Q1 2014 Q2 2014 Q1 2014 Q2 2014 Q1 2014 Q2 2014 Subscribers SIM cards ('000) 9,940 9,984 1,124 1,040 11,064 11,024 SIM cards (% mix) 89.8% 90.6% 10.2% 9.4% Fixed broadband subscriber base1 ('000) 2,113 2,215 Unit data – mobile subscribers ARPU (€/year/subscriber)2 359 349 109 109 327 320 Data usage (MB/month/subscriber)3 393 474 Text usage (texts/month/subscriber)4 384 379 114 118 348 347 Voice usage (min/month/subscriber)4 496 504 166 171 452 463 Unit data – fixed subscribers ARPU (€/year/subscriber)2 402 396 (1) Includes broadband and very-high-speed broadband subscriptions according to the Arcep definition 5 Marketing costs Q2 2013 Q2 2014 (2) Rolling 12-month period, stripping out the ideo discount, and excluding machine-to- machine SIM cards for mobile ARPU Marketing costs (€m) 123 89 (3) Rolling 12-month period, adjusted on a monthly basis, excluding machine-to-machine SIM cards Marketing costs/sales from network 11.7% 9.1% (4) Rolling 12-month period, adjusted on a monthly basis, excluding machine-to-machine SIM cards and excluding internet SIM cards (5) Mobile and fixed subscriber acquisition and retention costs 74
Bouygues Group presentation – September 2014 37 HIGHLIGHTS AND KEY FIGURES
BUSINESS AREAS
ALSTOM
FINANCIAL STATEMENTS
75
ALSTOM
Following the sale of the Power businesses to General Electric, Alstom will be a stronger company A world leader in the growing transport market A portfolio of products at the cutting edge of innovation A strong international dimension A strengthened balance sheet allowing it to develop further
Citadis tramway, Tours Bouygues believes in the growth and upside potential of the "new Alstom"
76
Bouygues Group presentation – September 2014 38 HIGHLIGHTS AND KEY FIGURES
BUSINESS AREAS
ALSTOM
FINANCIAL STATEMENTS
77
Condensed consolidated income statement (1/2)
€m H1 2013 restated H1 2014 Change Sales 15,094 15,182 +1% Current operating profit 347 134 -€213m Operating profit 347 523(1) +€176m Cost of net debt (157) (163) -€6m o/w financial income 22 21 -€1m o/w financial expenses (179) (184) -€5m Other financial income and expenses (7) 3 +€10m
(1) Including non-current operating income of €81m related to Bouygues Telecom and a capital gain of €308m on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%)
78
Bouygues Group presentation – September 2014 39 Condensed consolidated income statement (2/2)
€m H1 2013 restated H1 2014 Change Income tax expense (98) (59) +€39m Investments in joint ventures and associates 138 307 +€169m o/w share of profits 138 54 -€84m o/w net capital gain on Cofiroute disposal - 253(1) +€253m Net profit 223 611 +€388m Net profit attributable to (35) (201) -€166m non-controlling interests2 Net profit attributable to the Group 188 410 +€222m
(1) Net capital gain at 100% (2) Formerly 'Minority interests'
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THE BOUYGUES GROUP Slide 4
THE BUSINESSES Slide 13
H1 2014 RESULTS Slide 33
GROUP OUTLOOK Slide 81
CONCLUSION Slide 84
APPENDIX Slide 86 80
Bouygues Group presentation – September 2014 40 Outlook (1/2)
The Group's sales should be down very slightly in 2014 (between -1% and -2% vs 2013)
OtlkOutlook for the cons tructi on busi nesses The slowdown in public-sector orders in France remains a point to watch However, the construction businesses enjoy major strengths Strong momentum in their international activities offsets a more challenging economic environment in France The order book provides good visibility on future business activity Diversity of business activities and expertise A selective approach to orders and adaptation of organisations to actual business activity Financial performances should remain robust in 2014
81
Outlook (2/2)
Outlook for TF1 In a low-visibility context, TF1 is continuing to transform its business model Two exceptional events in 2014: the FIFA World Cup and the sale of a controlling interest in Eurosport International Outlook for Bouygues Telecom Bouygues Telecom confirms its target of generating a slightly positive "EBITDA minus Capex" item in 2014, and is rolling out its 3 strategic priorities in order to benefit from its renewed competitiveness as early as 2016 on a market with 4 operators Creating value with mobile data use Pursuing growth in the fixed broadband business Accelerate the company's transformation with targeted annual savings of €300m as early as 2016
82
Bouygues Group presentation – September 2014 41 THE BOUYGUES GROUP Slide 4
THE BUSINESSES Slide 13
H1 2014 RESULTS Slide 33
GROUP OUTLOOK Slide 81
CONCLUSION Slide 84
APPENDIX Slide 86 83
Conclusion
Although the competitive and economic environment is more challenging in France
The Bouygues group has strengthened... The construction businesses have ramped up their international expansion Bouygues Telecom has implemented and is rolling out an aggressive strategy The new Alstom will enjoy good growth and upside potential
...and once again proved its ability to ensure its financial strength Ability to sell assets at the right moment in order to finance new developments Ability to find the financial resources to improve its free cash flow generation
84
Bouygues Group presentation – September 2014 42 THE BOUYGUES GROUP Slide 4
THE BUSINESSES Slide 13
H1 2014 RESULTS Slide 33
GROUP OUTLOOK Slide 81
CONCLUSION Slide 84
APPENDIX Slide 86 85
Annex – as published Condensed consolidated income statement (1/2)
€m 2012 2013 Change Sales 33,547 33,121 -1% Current operating profit 1,286 1,344 +5% Other operating income and expenses (166)1 (91)2 nm Operating profit 1,120 1,253 +12% Cost of net debt (290) (309) +7% o/w financ ilial income 62 55 -11% o/w financial expenses (352) (364) +3% Other financial income and expenses 11 (26) nm
(1) Including €200m of non-current charges at Bouygues Telecom and TF1 and €34m of capital gains on asset disposals at Bouygues Telecom
(2) Including €80m at Bouygues Telecom and €11m at Colas 86
Bouygues Group presentation – September 2014 43 Annex – as published Condensed consolidated income statement (2/2)
€m 2012 2013 Change Income tax expense (330) (367) +11% Associates 217(1) 205(2) -6% Net profit from continuing operations 728 756 +4% Net profit attributable to non-controlling interests3 (95) (109) +15% Net profit attributable to the Group 633 647 +2% before the write-down of Alstom Write-down of Alstom - (1,404) nm Net profit/(loss) attributable to the Group 633 (757) nm
(1) Including non-current charges of €53m related to the dilution loss further to the capital increase at Alstom (2) Before the write-down of Alstom for €1,404m (3) Formerly called "minority interests" 87
Annex – as published Sales by business area €m 2012 2013 Change Bouygues Construction 10,640 11,111 +4% Bouygues Immobilier 2,396 2,510 +5% Colas 13,036 13,049 = Sub-total of construction businesses1 25,753 26,275 +2% TF1 2,621 2,470 -6% Bouygues Telecom 5,226 4,664 -11% Holding company and other 123 119 nm Intra-Group elimination (495) (578) nm TOTAL 33,547 33,345 -1% o/w France 22,308 22,118 -1% o/w international 11,239 11,227 = (1) Total of the sales contributions (after eliminations within the construction businesses) 88
Bouygues Group presentation – September 2014 44 Annex – as published Contribution of business areas to Group EBITDA
€m 2012 2013 Change Bouygues Construction 614 668 +€54m Bouygues Immobilier 186 191 +€5m Colas 832 823 -€9m TF1 318 300 -€18m Bouygues Telecom 908 880 -€28m Holding company and other (36) (27) +€9m TOTAL 2,822 2,835 +€13m
EBITDA = current operating profit + net depreciation and amortisation expense + net provisions and impairment losses - reversals of unutilised provisions and impairment losses 89
Annex – as published Contribution of business areas to Group current operating profit
€m 2012 2013 Change
Bouygues Construction 364 435 +€71m Bouygues Immobilier 179 178 -€1m Colas 406 417 +€11m
Sub-total of construction businesses 949 1,030 +€81m TF1 258 223 -€35m Bouygues Telecom 122 125 +€3m Holding company and other (43) (34) +€9m TOTAL 1,286 1,344 +€58m 90
Bouygues Group presentation – September 2014 45 Annex – as published Contribution of business areas to Group net profit/(loss)
€mAttributable to the Group 2012 2013 Change Bouygues Construction 267 277 +€10m Bouygues Immobilier 107 101 -€6m Colas 291 301 +€10m Sub-total of construction businesses 665 679 +€14m TF1 59 60 +€1m Bouygues Telecom (14) 11 +€25m Alstom 240 168 -€72m Holdi ng company and other (317)1 (271)2 +€46m Net profit attributable to the Group 633 647 +€14m before the write-down of Alstom Write-down of Alstom - (1,404) nm Net profit/(loss) attributable to the Group 633 (757) nm 91 (1) Including non-current charges of €53m related to the dilution loss further to the capital increase at Alstom (2) Before the write-down of Alstom
Annex – as published Condensed consolidated balance sheet
End-Dec End-Dec €m Change 2012 2013 Non-current assets 20,170 17,684(1) -€2,486m Current assets 16,584 15,469 -€1,115m Held-for-sale assets and operations - 1,151(2) +€1,151m TOTAL ASSETS 36,754 34,304 -€2,450m Shareholders' equity 10,078 8,684(1) -€1,394m Non-current liabilities 9,845 8,959 -€886m Current liabilities 16, 831 16, 495 -€336m Liabilities related to held-for-sale operations - 166(3) +€166m TOTAL LIABILITIES 36,754 34,304 -€2,450m Net debt 4,172 4,427 +€255m
(1) Including impact of the write-down of Alstom (2) Relating to Eurosport International and Cofiroute (3) Relating to Eurosport International 92
Bouygues Group presentation – September 2014 46 Annex – as published Change in net cash position in 2013 (1/2)
Net cash at Net cash at 31/12/2012 €m 31/12/2013
(4,172) (3 872) (4,360) (4,427) Acquisitions/ Reclassification Dividends disposals1 Issue & 4G frequencies of Eurosport paid buyback of Operation International4 Bouygues -103 (2) -591 shares +610 -33 Exceptional -67 disposals3 -71
2012 (3,862) -123 -608 +122 +599 -726 +426 (4,172) (4,172)
(1) Including scope effects (2) Capitalised interest related to 4G frequencies (3) Disposal in 2012 of 20% stake in Eurosport and the theme channels at TF1 as well as divestment of tower business and data centres at Bouygues Telecom (4) Reclassification of Eurosport International to held-for-sale operations 93
Annex – as published Change in net cash position in 2013 (2/2)
Breakdown of operation Net capital Net cash flow1 expenditure €m +2,066 -1,245(2)
Change in operating WCR3 and other -211
+610(2)
2012 +2,157 -1,433(4) (2) -125 +599(4)
(1) Net cash flow = cash flow - cost of net debt - income tax expense (2) Excluding capitalised interest related to 4G frequencies for €33m at Group level (3) Operating WCR: WCR relating to operating activities + WCR relating to net liabilities related to property, plant & equipment and intangible assets (4) Excluding exceptional items related to Bouygues Telecom: 4G frequencies in the 800 MHz band (acquisition cost and capitalised interest for €726m) and asset 94 disposals for €207m
Bouygues Group presentation – September 2014 47 Annex – as published Contribution of business areas to Group net cash flow
€m 2012 2013 Change Bouygues Construction 486 488 +€2m Bouygues Immobilier 120 120 = Colas 723 678 -€45m TF1 206 188 -€18m Bouygues Telecom 780 763 -€17m Holding company and other (158) (171) -€13m TOTAL 2,157 2,066 -€91m
Net cash flow = cash flow - cost of net debt - income tax expense
95
Annex – as published Contribution of business areas to Group net capital expenditure
€m 2012 2013 Change Bouygues Construction 159 159 = Bouygues Immobilier 13 10 -€3m Colas 345 296 -€49m TF1 45 39 -€6m Bouygues Telecom 869(1) 739(2) -€130m Holding company and other 2(1) 2(2) = Total excluding exceptional items 1,433(1) 1,245(2) -€188m Exceptional items 519 33 -€486m TOTAL 1,952 1,278 -€674m
(1) Excluding exceptional items related to Bouygues Telecom: acquisition cost and capitalised interest related to 4G frequencies for €726m at Group level (o/w €696m at Bouygues Telecom level and €30m at Holding company level) and asset disposals for €207m (2) Excluding capitalised interest related to 4G frequencies for €33m at Group level (o/w €13m at Bouygues Telecom level and €20m at Holding company level) 96
Bouygues Group presentation – September 2014 48 Annex – as published Contribution of business areas to Group free cash flow
€m 2012 2013 Change Bouygues Construction 327 329 +€2m Bouygues Imm obili eer 107 110 +€3m Colas 378 382 +€4m
Sub-total of construction businesses 812 821 +€9m TF1 161 149 -€12m Bouygues Telecom (89)1 24(2) +€113m Holding company and other (160)1 (173)2 -€13m TOTAL 724(1) 821(2) +€97m
Free cash flow = cash flow - cost of net debt - income tax expense - net capital expenditure. It is calculated before changes in WCR (1) Excluding exceptional items related to Bouygues Telecom: acquisition cost and capitalised interest related to 4G frequencies for €726m at Group level (o/w €696m at Bouygues Telecom level and €30m at Holding company level) and asset disposals for €207m (2) Excluding capitalised interest related to 4G frequencies for €33m at Group level (o/w €13m at Bouygues Telecom level and €20m at holding company level) 97
Annex – as published Net cash by business area
End-Dec End-Dec €m Change 2012 2013 Bouygues Construction 3,093 3,006 -€87m Bouygues Immobilier 358 271 -€87m Colas (170) 39 +€209m TF1 237 188(1) -€49m Bouygues Telecom (650) (783) -€133m Holding company and other (7,040) (7,148) -€108m TOTAL (4,172) (4,427) -€255m
(1) After reclassification of net cash for €67m at Eurosport International to held-for-sale operations 98
Bouygues Group presentation – September 2014 49 Financing
€m Available cash: €8.1bn
10,000 Debt maturity schedule at end-June 2014 9,000
8,000
7,000 Undrawn MLT 6,000 facilities 5,000 €5.3bn
4,000
3,000 Cash 2,000 €2.8bn 1,000
0
99
Annex Impact of IFRS 11 on the Group's 2013 financial statements
Restatement 2013 2013 €m Bouygues reported Colas TF1 restated Construction Sales 33, 345 (10) (204) (10) 33, 121
Current operating profit 1,344 2 (27) - 1,319
Operating profit 1,253 2 (27) - 1,228
Cost of net debt (309) - 5 - (304) Other financial income and expenses (26) - - - (26) Income tax expense (()367) - 7 - (()360) Associates1 205 (2) 14 - 217 Net profit from continuing operations1 756 -(1)-755 Net profit attributable to non-controlling interests (109) -1 -(108) Net profit attributable to the Group 647 ---647 before the write-down of Alstom1 100 (1) Before the write-down of Alstom for €1,404m
Bouygues Group presentation – September 2014 50 ANNEX Impacts of exceptional items on net profit attributable to the Group
€m H1 2013 restated H1 2014 Change Net profit attributable to the Group 188 410 +€222m Non-current operating income of €81m related to Bouygues Telecom, net of taxes (45) -€45m Net capital gain on the sale by Colas of its stake in Cofiroute (240) -€240m Net capital gain on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%) (113) -€113m Cofiroute contribution to H1 2013 net profit 21 +€21m Change in calculation method for Alstom quarterly contribution 27 +€27m Net profit attributable to the Group before exceptional items 188 60 -€128m
€m H1 2013 restated H1 2014 Change Net profit attributable to the Group of the construction businesses 145 471 +€326m Net capital gain on the sale by Colas of its stake in Cofiroute (372) -€372m Cofiroute contribution to H1 2013 net profit 21 +€21m Net profit attributable to the Group of the construction businesses 145 120 -€25m before exceptional items 101
ANNEX Impacts of the sale of the stake in Cofiroute on the income statement
Colas Bouygues €m Colas income income H1 2014 contribution1 statement statement Net capital gain on disposal 385 385 385 - Goodwill at Holding company level 0 0 -132 Net capital gain on disposal after goodwill 385 385 253 - Net capital gain attributable to non-controlling interests2 (3.4%) 0 -13 -13 Net capital gain attributable to the Group 385 372 240
(1) Colas contribution to net profit attributable to the Group (2) Calculated on net capital gain (at 100%) before goodwill
102
Bouygues Group presentation – September 2014 51 ANNEX Impacts of the sale of the 31% stake in Eurosport International on the income statement
TF1 Bouygues €m TF1 income income H1 2014 contribution1 statement statement Net capit a l gain on disposa l and remeasurement 2 bfbefore tax 323 323 323 - Income tax expense -29 -29 -29 Net capital gain on disposal and remeasurement2 after tax 294 294 294 - Goodwill at Holding company level 00-15 Net cap ita l gain on di sposal an d r em easure me nt 2 af ter goodwill 294 294 279 - Net capital gain attributable to non-controlling interests3 (56.5%) 0 -166 -166 Net capital gain and remeasurement2 attributable to the Group 294 128 113
(1) TF1 contribution to net profit attributable to the Group (2) Net capital gain on the sale of Eurosport International (31%) and the remeasurement of the remaining interest (49%) (3) Calculated on net capital gain (at 100%) before goodwill 103
Annex Group organisation chart
Roadworks Building / Civil Engineering Property (1986) (1952) (1956)
96.6 % 100 % 100 %
CONSTRUCTION
POWER - TRANSPORT 29.3% stake
(2006) (1994) (1987) TELECOMS MEDIA
90.5 % 43.5 %
Figures as of 31 December 2013 104
Bouygues Group presentation – September 2014 52 Annex A diversified portfolio
Entering new businesses under good conditions
Growing market . Acquisition of Colas / Screg in 1985 Regulatory or technological changes . Acquisition of TF1 in 1987 Favorable financial conditions . Launch of Bouygues Telecom in 1994 . Investment in Alstom in 2006 Ability to bring managerial skills
Disposing of businesses under the following circumstances Lack of understanding and control of the market and its opportunities Structural reduction of free cash-flow generation . Maison Bouygues in 1990 . Bouygues Offshore in 2002 Better opportunities for use of proceeds . Saur in 2005 Excessive Capex requirement . TPS in 2006 105
Annex – as published CONSTRUCTION BUSINESSES: 2013 sales breakdown
4% Building and Civil Works France 7% 14% 44% 53% France 16% Europe (excl. France) Building and Civil Works Asia and Middle east International Americas 42% Electrical Contracting 20% Africa
15% 4%
Residential France Commercial Europe 85% 96%
19% Specialty activites 9% 19% North America 15% Europe (excl. France) 15% Building materials 57% France
66% Roadworks Others
106
Bouygues Group presentation – September 2014 53 Annex 20 years of know-how in concession and PPP/PFI contracts Sport facilities PPPs (Stade Vélodrome in Marseille, Velodrom in Saint-Quentin en Yvelines) A28 motorway concession Hospital PPPs (Bourgoin-Jailleu, Caen etc.) A41 motorway concession Prison PPPs (Réau, Annœullin, Nantes, etc.) Stade de France concession PPPs in the education sector (Paris 4, Versailles Saint-Quentin universities, 5 secondary schools in Loiret) Reims tramway concession Territorial planning PPPs (Paris and Valenciennes street lighting, broadband network in Vaucluse, etc.) Cofiroute French Ministry of Defence, Paris Libourne street lighting PPP Paris Law courts complex United Kingdom Nîmes and Montpellier railway bypass 18 health, education, social housing and street lighting PFI contracts Municipal authority complex in Bordeaux (incl. Home Office, Broomfield hospital, social housing in Brent, L2 bypass in Marseille Hertfordshire campus etc.) Germany Rostock tunnel concession New Tyne Tunnel concession Hungary Portsmouth road maintenance PFI M5 motorway concession MAC-type road and railway maintenance contracts M6-M60 motorway PPP Singapore Canada Sports Hub PPP Hospital PPP in British Columbia South Korea Royal Canadian Mounted Police headquarters PPP Machang Bay Bridge Iqaluit International Airport PPP Croatia concession Long-term road maintenance contracts Istria motorway concession Pusan port concession phases 1 and 2 Hong Kong Zagreb Airport concession United States AsiaWorld-Expo concession Miami port tunnel PPP and Marriott hotel Jamaica Saudi Arabia Motorway concession: Ivory Coast Equestrian Club PPP highway 2000, 1A Highway concession Australia Cyprus Sydney metro Bouygues Construction Lanarka and Pafos Colas South Africa 107 airport concession Gautrain rail link concession
Annex Calendar
14 November 2014 Nine-month 2014 sales and earnings 7.30am
23 April 2015 Annual General Meeting 3.30pm
108
Bouygues Group presentation – September 2014 54 109
109 BUILDING THE FUTURE IS OUR GREATEST ADVENTURE
Bouygues Group presentation – September 2014 55