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2004 Annual Report
Télévision Française 1 A public limited company “Société Anonyme” with a share capital of €42,811,946 326 300 159 RCS Nanterre TF1 1, quai du Point du Jour 92656 Boulogne Cedex / France Tel. : (33) 1 41 41 12 34 Internet : http://www.tf1.fr 2004 Annual Report Couv I,II,III,IV-dos9mm GB 20/04/05 12:32 Page 2
Main subsidiaries’ and participations’ adresses
1, quai du Point-du-Jour TPS CINETOILE 92656 Boulogne-Billancourt Cedex - France TPS JEUNESSE TF1 PUBLICITE (www.tf1pub.fr) TPS MOTIVATION TF1 FILMS PRODUCTION TPS TERMINAUX TF1 DIGITAL TPS INTERACTIF ALMA PRODUCTIONS TPS SERVICES TFM DISTRIBUTION (www.tfmdistribution.com) MULTIVISION YAGAN PRODUCTIONS MULTIVISION GESTION CIBY 2000 SENT TFOU (www.tfou.fr) SOCIETE D’EXPLOITATION DU MULTIPLEX R6 - SMR6 3, rue Gaston-et-René-Caudron HISTOIRE 92448 Issy-les-Moulineaux Cedex - France USHUAIA TV EUROSPORT (www.eurosport.com) EUROSALES 305, avenue le Jour-se-Lève EUROSPORT France 92656 Boulogne-Billancourt Cedex - France e-TF1 120, avenue Charles-de-Gaulle TF1 ENTREPRISES ( www.tf1licences.com) 92200 Neuilly-sur-Seine - France SOCIETE D’EXPLOITATION ET DE DOCUMENTAIRES TF6 (www.tf6.fr) ODYSSEE (www.odyssee.com) SERIE CLUB (www.serieclub.fr) COMPAGNIE INTERNATIONALE DE COMMUNICATION - CIC Quai Péristyle - 56100 Lorient - France CIBY DA TV BREIZH (www.tvbreizh.fr)
9, rue Maurice-Mallet 3, rue du Commandant-Rivière - 75008 Paris - France 92130 Issy-les-Moulineaux - France TCM DA UNE MUSIQUE (www.unemusique.fr) TF1 VIDEO (www.tf1video.fr) Chemin du Dévent - 8 Victoria House TF1 INTERNATIONAL (www.tf1international.com) 1024 Ecublens - Suisse VISIOWAVE (www.visiowave.fr) 18, quai du Point-du-Jour 92656 Boulogne-Billancourt Cedex - France Tour Maine Montparnasse - 33, avenue du Maine TF1 PUBLICITE PRODUCTION (www.tpp.tv) 75015 Paris - France GLEM LES NOUVELLES EDITIONS TF1 TOUT AUDIOVISUEL PRODUCTION 26, rue Danton - 92300 Levallois-Perret - France 30-32, rue Proud’hon TELEMA 93210 La Plaine Saint-Denis - France 47, rue de la Chapelle - 75018 Paris - France STUDIOS 107 QUAI SUD TELEVISION
54, avenue de la Voie-Lactée 44, rue de Strasbourg - 44000 Nantes - France Contents 92656 Boulogne-Billancourt Cedex - France OUEST INFO LA CHAINE INFO - LCI (www.lci.fr) 35, rue Greneta -75002 Paris - France 145, quai de Stalingrad PUBLICATIONS METRO FRANCE Chairman’s Statement 02 Group’s Activities 22 92137 Issy-les-Moulineaux Cedex - France 5, rue du Mail - 75002 Paris - France Principal Directors 04 Broadcasting France 24 TELEVISION PAR SATELLITE - TPS (www.tps.fr) PINK TV TF1 Group Organisation 05 Distribution 36 TPS CINEMA TPS ENTREPRISES Key Figures 06 International Broadcasting 38 45, boulevard Victor-Hugo TPS GESTION TF1 Share 08 Audiovisual Rights 39 93534 Aubervilliers Cedex - France TPS SPORT TF1’s Competitive Environment 10 TELE SHOPPING TPS FOOT Group History 12 TPS STAR 40-42, rue Pierre-Curie - 93122 La Courneuve - France 2004, Key Events 14 TPS CINEFAZ SYLVER TF1 and Society 16 Financial Report 41
Coordination : TF1 IR Department. Design & Production: L’Agence Synelog - Tel.: 01 53 00 74 29 – Photos: DR, TF1, Gérard Bedeau, Christophe Chevalin, Etienne Chognard, Jean-Claude Roca, Jean-Marc Sureau, Julien Gauvin, François Pugnet, Patrick Roncen, Eurosport, Paramount Pictures, TPS, Warner Bros, Miramax Film Corp., Studios 107, TF1 International, Focus Features, Dreamworks, TF1 Films Productions, Entropie Films, Renn Productions, Eric Travers / Gamma, Yagan Productions, Touchstone Pictures, Histoire, Sportitalia, X. ACT 1/40/227x300 GB 20/04/05 11:23 Page 1
First French TV Channel
3 out of 4 French people watch TF1 every day Broadcasting France 89 out of the 100 best programs in 2004 23 thematic channels, of which Eurosport, LCI, TF6 and TPS Star A presence in 54 countries via Eurosport More than 20 million cassettes/DVD distributed in 2004 More than 2 billions pages viewed in 2004 About 20 French movies co-produced every year Distribution
First French generalist channel, with an audience share of 31.8% in 2004, TF1 is although a built-in group of communication that develops, around its core business, activities in growth markets. International Broadcasting Since 1987, date of the privatisation and the entry of Bouygues in the shareholding structure, the TF1 channel has created new activities with strong added value, from its business of programs producer and broadcaster. Today, TF1 group activities cover the whole audiovisual industry: upstream in production, acquisition and sale of audiovisual rights, downstream in publishing and distribution of cassettes, DVD and music CD, derivative products linked to broadcasting (telematic services, derivative rights, games, contents and Internet web site) and the home shopping. TF1 expands as well in the pay TV market, with TPS, that distributes TV content to 1.7 M French households, through satellite, cable or ADSL, and with thematic channels that are today major components of the pay tv offer in France. Audiovisual Rights
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Chairman’s Statement
Patrick Le Lay Chairman & Chief Executive Officer
Dear shareholders,
2004 was a good year for the TF1 Group. The TF1 channel’s audience increased by 1.1% for women under 50 years and advertising revenue resumed strong growth at 6.6%. For all our French thematic channels, advertising revenue climbed more than 20%. These sources of satisfaction are not limited to “Broadcasting France”, but are reflected in most of the group’s other companies, notably TPS, Eurosport, TF1 Vidéo and Téléshopping. This annual report will be punctuated by the respective details.
In an environment where the consumer has easy For 2005, these ambitions translate into: access to a multi-channel offer thanks to digital • general-interest, family-oriented and events-based technologies, TF1 Group’s successes are a good sign programming on TF1 that meets the expectations of for the future and reinforce the Group’s strategy our audience and our client advertisers; implemented since the late 1990s. This strategy is based on the following ambitions: • enhancement of our thematic offering in terms of • to remain the leader in the development of programmes content and channels, notably through the creation in France; of a “Discovery” division comprising Odyssée, • to continue to develop programmes and services Histoire and Ushuaïa TV (to be launched in 2005); distribution; • broadcasting TF1 over the digital terrestrial television • to consolidate Eurosport as the leading pan- (DTT) network as of March 2005, followed later by LCI, European channel. Eurosport and TF6;
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"I continue to have great confidence in the future of our group, in its strategy, and in all the employees with whom I prepare to meet tomorrow’s challenges." Broadcasting Broadcasting France
• the DTT broadcast of TPS Star, the TPS premium Taking into account a low visibility of the advertising Distribution channel, will complement the excellent launch of the market, TF1 channel advertising revenue should grow TPS offering over high-speed telephone lines (ADSL). “in the market”, i.e. between 3% to 4%, and TF1 Group Thanks to these new distribution channels, the multi- consolidated revenue should increase by approximately platform operator TPS will be accessible by the majority 3% to 5%. Moreover, programming costs growth of of French people; TF1 Channel should be 3.9%. • the accelerated growth of Eurosport, both in Eastern In conclusion, I continue to have great confidence in Europe and Southern Europe, where the launch of the the future of our group, in its strategy, and in all the Sportitalia offering was a success. These developments employees with whom I prepare to meet tomorrow’s were complemented in January 2005 by the creation of a new challenges by introducing new drivers of business channel, Eurosport 2, which, broadcast in four languages, and financial growth.
is already received by over 10 million European subscribers. International Broadcasting
Naturally, in the course of the coming year, we will grow our other businesses – video, distance shopping and audiovisual production and broadcasting rights, which should all have a new year of profitable growth.
In addition, the TF1 Group has prepared for the new accounting standards, which should have no more than a limited impact on our results. We are leveraging Boulogne, this change to simplify and streamline our modus operandi and our structure so as to generate better Patrick Le Lay Chairman & Chief Executive Officer performance and improved profitability. Audiovisual Rights
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Principal Directors (February 2005) Chief Executives Patrick LE LAY Chairman Chief Executive Officer Etienne MOUGEOTTE Senior Executive Vice President Head of Broadcasting Claude COHEN Chairman of TF1 Publicité
TF1 Main subsidiaries
General Management Télévision par Satellite TPS Histoire Arnaud BOSOM Emmanuel FLORENT Gérard CARREYROU Director of Technical Resources Chairman and Chief Executive Officer Chairman and New Technologies TF1 Entreprises Jean-Michel COUNILLON Emmanuel FLORENT Série Club Senior Vice President Chairman Jean d’ARTHUIS Secretary General and Director Michel BROSSARD Chairman of Legal Affairs Chief Executive Officer TF6 Emmanuel GRADOS TF1 Vidéo Director of Human Resources Jean d’ARTHUIS Pierre BROSSARD Chairman and Internal Communication Chairman Michel KUBLER Téléshopping TV Breizh Director of Business Development Michel KUBLER Patrick LE LAY Jean-Pierre MOREL Chairman Chairman and Chief Executive Officer Executive Vice President, Yann BOUCRAUT Administration and Finance Chief Executive Officer TF1 Films Production Etienne MOUGEOTTE Broadcasting e-TF1 Chairman and Chief Executive Officer Edouard BOCCON-GIBOD Management Company: Vice President, Communication TF1 Entreprises TF1 International and Public Relations represented by Emmanuel FLORENT, Chairman Patrick BINET Takis CANDILIS Chairman and Chief Executive Officer Vice President, French TV Dramas Eurosport Franck FIRMIN-GUION Angelo CODIGNONI TFM Distribution Chairman and Chief Executive Officer Vice President, Magazines, Jean-Paul ROUGIER Entertainment and Games Jacques BEHAR Chief Executive Officer Vice President, General Manager, Charles VILLENEUVE Administration and Finance Vice President, Sports GLEM Laurent-Eric LE LAY Jean-François LANCELIER Takis CANDILIS Vice President, General Manager, Chairman Vice President, Broadcasting Broadcasting Robert NAMIAS Jacques RAYNAUD Tout Audiovisuel Production Vice President, Information and News Vice President, General Manager, Takis CANDILIS Distribution and Advertising Laurent STORCH Chairman Vice President, Acquisitions TF1 Digital and Youth programmes Etienne MOUGEOTTE Alma Productions Chairman and Chief Executive Officer Maxime LOMBARDINI TF1 Publicité Chairman Claude COHEN La Chaîne Info Chairman Management Company: TF1 Digital represented by TF1 Publicité Production Martine HOLLINGER Etienne MOUGEOTTE Takis CANDILIS Chief Executive Officer Chairman Jean-Pierre MOREL Odyssée Management Company: Executive Vice President, Studios 107 TF1 Digital represented by Administration, Finance Gérard CARREYROU, Takis CANDILIS and Information Technology Chief Executive Officer Chairman
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TF1 Group Organisation (February 2005)
Broadcasting France Distribution 100% TF1 Publicité (1987) 66% Télévision par Satellite TPS (1996) 95% GIE Aphelie (1992) 100% TPS Sport (1998) 100% TF1 Entreprises (1989) 100% TPS Interactif (1998) 100% Une musique (1988) 100% Multivision (1992) 50% Les Nouvelles Editions TF1 (1997) 100% TPS Terminaux (1999) 100% Téléshopping (1987) 100% TPS Motivation (2000) 100% Eurosport France 1 (1993) 100% Sent (1999) Broadcasting France 11.4% Pink TV (2004) 100% TPS Jeunesse (1996) 40% TMC (2005) 100% TPS Foot (1999) 100% TF1 Digital (2000) 100% TPS Cinéma (1996) 100% Histoire (2004) 100% La Chaîne Info - LCI (1994) 100% Société d’exploitation de documentaires - Odyssée (1996) 50% TF6 (2000) 50% Extention TV - Série Club (2001) Audiovisual Rights 100% Ushuaïa TV (2004) 71.1% TV Breizh (2000) 100% TF1 Vidéo 2 (1998) 60% Ouest Info (2002) 100% CIE Internationale de 2
100% e-TF1 (1999) Communication - CIC (1991) Distribution 100% TFou (2003) 49% Sylver (2002) 100% Glem (1995) 100% TF1 International (1993) 75% Quai Sud (2001) 50% TFM Distribution (2002) 100% Tout Audiovisuel Production (2001) 100% Ciby DA (1998) 100% Alma Productions (2001) 49% Téléma (2000) 100% TF1 Publicité Production (1990) 100% Ciby 2000 3 (2002) 100% Yagan Productions (2004) 50% TCM Droits Audiovisuels (1996) 100% Studios 107 (1991) 100% TF1 Films Production (1980)
Other Activities International Broadcasting International Broadcasting 34% Publications Métro France (2003) 49% Prima TV (2004) 100% Eurosport (1991) 80% Visiowave (2000) 100% Eurosales (1994) 60% KSO (2004) 29% Sportitalia (2004)
The year of creation or acquisition is shown into brackets.
1 - Held via Eurosport. 2 - Held via TF1 Entreprises.
3 - Held via TF1 Films Production. Audiovisual Rights
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Key Figures 2,861.5M +14.9% Consolidated figures 2004 Growth of net profit in 2004
(in € million)
495.5 497.5 Consolidated figures 427.8 398.8 333.9 293.5
220.1 191.5 155.2
0.7% Other activities 7.9% Audiovisual rights 2003 2004 13.3% Distribution 2002 EBITDA EBIT Net profit attributable to the Group
8.4% International broadcasting
951.9 866.2 806.2
492.6 443.2 412.2
69.7% Broadcasting France
2002 2003 2004 Shareholders' funds Net debt
351.7 2002 2003 2004 336.8 339.6
Other activities: Métro, Visiowave, Prima TV, Syalis Audiovisual rights: TF1 Vidéo, CIC, RCV, Ciby DA, TF1 International, Téléma, TCM, Cabale Distribution: TPS International broadcasting: 2002 2003 2004 Eurosport, Europa TV, KSO & SRW Broadcasting France: TF1, TF1 Entreprises, Téléshopping, Investments in French production (€M) Eurosport France, LCI, Odyssée, TF6, TV Breizh, Série Club,Histoire, e-TF1, Glem, Alma, TAP, TPP, Studio 107, TF1 Films Production
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351.7M 35.5% Investment in French production Audience share on women under 50 years1
2002 2003 2004
Audience share/Women under 50 years1 35.7% 34.4% 35.5% Broadcasting Broadcasting France
Audience share/Individuals aged 4 and over1 32.7% 31.5% 31.8% Distribution
TV Advertising market share2 54.0% 54.7% 54.8% International Broadcasting
Employees (on December 31) 3,480 3,682 3,867
1 - Source Médiamétrie.
2 - Source Sécodip. Audiovisual Rights
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TF1 Share
Dividend and net earnings per share Market capitalisation at December 31 (in euros) (in euros billion)
1.03 6.02 5.96 89% 5.45 0.90 5.14 0.85 76% 0.73 72% 0.65 0.65 0.65 0.65 63%
20012002 2003 2004 2001 2002 2003 2004
Dividends Earnings per share Pay-out ratio (in %)
TF1 share price and CAC 40 restated* in 2004
Share price (€) Number of shares
35.0 6,000,000
30.0 5,000,000
25.0 4,000,000
20.0
3,000,000 15.0
2,000,000 10.0
1,000,000 5.0
0 0 Jan. Feb. March Apr. May June July Aug. Sept. Oct. Nov. Dec.
TF1 CAC 40 restated Volume
* On the basis of the evolution of the TF1 share price.
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Average number of shares traded per day (in million)
1.16 1.07 1.04
0.89 Broadcasting Broadcasting France
2001 2002 2003 2004 Distribution
Diary of financial announcements for 2005* Shareholders as of December 31, 2004
January 27 Full year 2004 revenue
February 15 Full year 2004 accounts
February 16 Analysts meeting 1.4% Société Générale April 12 Shareholders’ General Meeting 5.0% Others 0.1% Treasury shares April 28 First quarter 2005
June 20 First quarter 2005 accounts 16.6% Europe (excluding France) International Broadcasting July 28 First half 2005 revenue
August 30 2005 half year accounts 41.5% Bouygues August 31 Analysts meeting
October 27 Third quarter 2005 revenue
November 22 Third quarter 2005 accounts
* This timetable is subject to change
35.4% Others (France) Audiovisual Rights
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TF1’s Competitive Environment +10,2% Growth of the advertising market for all media
Advertising investments than 2003. The Internet Television consumption and With 60% of its operating revenue registered the greatest growth: audience share € coming from advertising, TF1 is +78.1% to 837.5M. The thematic In 2004, viewers watched more channels increased their advertising dependent on the advertising market television than ever. The average revenue by 24.8%. Television grew and subject to its fluctuations. daily television consumption by 6.4%. The market share for The TF1 general-interest channel, (or individual watching duration) rose television (national, regional and the group’s 23 thematic channels to three hours and 24 minutes complementary channels) stood at and the Internet site live off the (+ 2 minutes vs. 2003) for individuals 31.3%, a fall of 1.1%. advertising investment of French aged four years and over, and three or foreign advertisers. 2005 outlook hours and 29 minutes (+ 10 minutes vs. 2003) for women under 50 years. The Zenith Optimedia** agency Despite this dependence, the TF1 In the space of 10 years, forecasts a 4.5% increase in TV Group does not have a clear visibility consumption has increased by advertising investment for 2005 of the French advertising market. 27 minutes for individuals aged four (+2.8% in multimedia*** ). The Ad It is cyclical, volatile and strongly years and over, and 45 minutes for Barometer **** agency’s figure is linked to economic trends and the women under 50 years. 3.2% for the year for the same geopolitical situation. investments. The breakdown of the audience among the television channels in Evolution in 2004* For the month of January 2005, 2004 shows TF1 as the channel The multimedia advertising market the Sécodip figures for TV gross expanded by 10.2% in 2004, investments indicate an increase * Source: Sécodip. climbing to a gross of €18.3 billion. of 1.8% for the market. TF1 recorded ** Zenith Optimedia forecast – December 2004. *** Multimedia: Press, television, radio, cinema, outdoor. All media attracted greater advertising an increase of 1.3%. **** Ad Barometer forecast – November 2004.
Breakdown of gross revenues within the 2004 TV advertising market 0% 50%
TF1 54.8% France 2 12.0% Variations in media gross revenue France 3 7.8% and market share 2004 Canal+ 2.3%
GROSS REVENUE CHANGE MARKET France 5 1.0% In €M 04/03 IN % SHARE IN % MEDIA M6 22.1% Press 6,212.5 +8.4 34.1 Television 5,717.6 +6.4 31.3
National and regional The historical trend of free-to-air TV operators’ television 5,204.9 +4.9 28.5 advertising market share was as follows: Thematic channels 512.7 + 24.8 2.8 Radio 2,938.0 +9.9 16.1 (en %) TF1 FR 2 FR 3 CANAL+ FR 5 M6 Outdoor 2,411.6 + 10.6 13.2 1998 50.2 17.6 11.1 2.7 0.4 17.9 Internet 837.5 + 78.1 4.6 1999 51.1 16.3 10.2 2.8 0.5 19.1 Cinema 133.4 +2.6 0.7 2000 53.8 12.7 8.4 3.2 0.6 21.4 Total Media 18,250.6 + 10.2 100 2001 54.9 11.4 7.6 2.5 0.6 23.0 2002 54.0 11.9 8.0 2.5 0.7 22.9 Source: Sécodip – gross figures updated January 19, 2005. 2003 54.7 11.7 8.1 2.2 0.9 22.4 Source : Sécodip.
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204 minutes 23,5% Daily TV viewing time (average) in 2004 of French households receive more than 15 channels
growing most among individuals While the first nine months of 2004 The market growth (net of contract aged four years and over, and the showed only slow growth of the cancellations) for the year came to only winner among women under subscriber base for a pay television around 222,000 subscribers. 50 years. offering, the main operators (notably TPS, Canal + and CanalSatellite) Thematic channels The complementary channels have registered sustained growth during The advertising market for strengthened their audience, notably the course of the last quarter, and complementary channels continues due to their expanded distribution, primarily in the month of December. to focus. In 2004, 3/4* of investments be it via satellite, cable or ADSL.
were made with the 15 top thematic Broadcasting France The latest Médiacabsat survey They now represent 11% of the channels (in terms of audience). indicated that 5.565 million national audience. Complementary channels represented households received an extended 9% of the television advertising Pay television television offering (over 15 channels), market (i.e., €512.7 M), while the i.e., 23.5% of French households. In 2004, the French population could audience for all these channels choose to receive a pay television At December 31, 2004, TPS had reached 11% of individuals aged offering over cable, satellite or ADSL. some 1.355 million subscribers to its four years and over. satellite and ADSL bundle offering Indeed, 2004 saw the emergence and 320,000 subscribers to TPS of a new audiovisual distribution movie channels on cable and in the platform, ADSL, and the overseas territories and dominions. development of offerings combining On the market for television by television, high-speed Internet, satellite the TPS market share stood
and telephony. at 37% (new subscribers in 2004). * Source: Sécodip. Distribution
For the target “individuals aged four years and over,” the 2004 audience share breakdown was as follows: 0% 25% 50%
TF1 31.8% ( + 0.3 pt) France 2 20.5% (= ) Table of top 15 thematic channels (the TF1 Group’s channels are in boldface) France 3 15.2% ( – 0.9 pt) (+ 0.1 pt) Canal+ 3.8% TYPE CHANNELS AUDIENCE1 (+ 0.1 pt) France 5 3.0% 1 General interest RTL9 2.3 (+ 0.2 pt) Arte 2.0% 2 Sport Eurosport 1.7 M6 12.5% ( – 0.1 pt) 3 Youth Canal J 1.4 (+ 0.3 pt)
Autres 11.0% International Broadcasting 4 News LCI 1.0 Source : Médiamétrie. 5 General interest TMC 1.0 For the target “women under 50 years”, 6 General interest 13e Rue 1.0 TF1’s priority target, the 2004 audience share breakdown 7 Youth Tiji 1.0 was as follows: 8 General interest TF6 0.9 0% 25% 50% 9 General interest Paris Première 0.8 TF1 35.5 % ( + 1.1 pt) 10 General interest TV Breizh 0.8 France 2 17.0 % ( + 0.1 pt) 11 Youth Disney Channel 0.7 France 3 11.3 % ( – 0.9 pt) 12 Cinema-Sport TPS Star 0.7 Canal+ 3.6 % ( – 0.3 pt) 13 General interest Série Club 0.6 France 5 2.7 % (= ) 14 Music MCM 0.6 (= ) Arte 1.4 % 15 General interest Téva 0.6 M6 18.6 % ( + 0.1 pt) Source: Médiacabsat – as of June 13, 2004. ( – 0.3 pt) Autres 10.0 % (1) Audience as a % of individuals of four years and over, multi-channel environment. Audiovisual Rights Source : Médiamétrie.
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Group History
On the strength of its leadership 1990 position in the free-to-air television The group extends its production market for the past 18 years, the expertise with the creation of Banco TF1 Group has today become one Production (production of television of the key players of the French feature films) and the acquisition of and European audiovisual sector. Protécréa (audiovisual production). Creation of TF1 Pub Production to 1987 promote the channel's identity. On April 6, the CNCL (Commission Trop Belle pour Toi by Bertrand Blier, Nationale de la Communication et co-produced by TF1 Films des Libertés) chooses the Bouygues Production wins 5 "Cesars" produce and market a single sports Group to be the operator of the including best film. For the first time, channel in Europe: Eurosport. channel; it becomes one of the core investment in French film production shareholders, representing 50% of exceeds one billion francs. The newly created Champions League the capital. is broadcast by TF1, marking TF1's 1991 commitment to French and European TF1 is privatised and listed on the football. stock market on July 24 at a price of Eurosport, the leading pan-European sports channel comes under the FF165 (equivalent to €2.5 today, after umbrella of the TF1 Group, and the 1994 a 10 for 1 share split in June 2000). French version of the channel is The Bouygues Group increases its As of this point in time, TF1 no longer unveiled. Launch of TF1 on the stake in TF1 from 25% to 34%. has the benefit of licence fees and thematic channels' market with The gamble is made on a non-stop relies solely on advertising revenue. this acquisition. news channel: LCI is launched on For the first time, the channel's Setting up of Studios 107 to develop cable on June 24. audience share breaks through the sets for the integrated production the 40% threshold. of sitcom, variety and game shows. 1995 With the acquisition of 60% of Glem 1988 1992 Productions, TF1 becomes a TF1 unveils its new headquarters at producer of entertainment programmes. Patrick Le Lay is appointed CEO of Boulogne, bringing together all its the TF1 Group. Launch of the website www.tf1.fr, staff on the one site. Hélène et les which is an immediate success. Creation of Une Musique, music garçons and Premiers Baisers are Eurosport becomes the leading pan- publishing and recorded music the first of the successful afternoon sitcoms aimed at young people. European channel covering 66 million subsidiary. TF1 Vidéo capitalises households and nearly 15 million on the success of the Bébête Show 1992 also sees the development of television viewers daily. cassette (more than 150,000 copies the channel's TV dramas, with Julie sold) to launch new products. Lescaut, Les Cordier, juge et flic and 1996 Les Cœurs brûlés enjoying real Creation and launch of TPS (Télévision audience success (this is still the 1989 Par Satellite) in partnership with case today). Expansion of the TF1 Group with the France Télévision, France Télécom, setting up of TF1 Entreprises (video, CLT, M6 and Lyonnaise des Eaux. 1993 telematics, licences and merchandising). The launch is accompanied by the The Eurosport networks and "The creation of TCM (34%-owned by Laying of the first stone of the new European Sport Network" (operated TF1), a company which will acquire headquarters at Boulogne. by Canal+ and ESPN) merge to and manage broadcasting rights.
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1999 2002 Launch of the new site and general- TF1 increases its stake in TPS, interest portal www.tf1.fr in May, following the acquisition in January of while Eurosport sets up its own site, the 25% owned by France Télévisions www.eurosport.com. The UK version Entreprise and France Télécom, and of the sports channel is launched. in July, of the 16% owned by Suez. TPS is now 66%-owned by TF1 and TPS creates Superfoot and 34%-owned by M6.
Superstades (pay-per-view) to Broadcasting France broadcast French First and Second TF1 and Miramax sign a partnership League football matches. agreement to set up a joint company, TFM, distributing movies in French July sees the CSA renew TF1's 2000 cinemas. authorisation to broadcast (granted On May 10, the TF1 share enters the The final episode of Star Academy in 1987) for five years. CAC 40 following a ruling by the (1st season) attracts more than Conseil des Indices Boursiers, and on 11.8 million television viewers for a 1997 June 21, there is a 10 for 1 share 51.4% audience share. The success Launch of the documentary channel, split, to improve the share's liquidity. of this new entertainment has a Odyssée, aimed at expanding TF1's knock-on effect on a number of the On July 2, TF1 attracts more than group's subsidiaries. presence in the thematic channels 21 million television viewers for the market and supplementing the TPS broadcasting of the Euro 2000 final. 2003 offering. Distribution On September 1, TV Breizh (channel On April 23, TPS launches three TF1 Vidéo now distributes the focusing on Brittany and the sea, in new channels for young people: René Chateau Vidéo film catalogue which TF1 has a 71% stake today) is Eurêka!, Boomerang and TFOU. (800 titles). launched on TPS, CanalSatellite and the main cable networks. TF1 announces it has taken a 34.3% Four Cesars are awarded to films co- stake in Publications Metro France, produced by TF1 Films Production: In December, TF1 launches the small the French subsidiary of Metro Capitaine Conan by Bertrand mini generalist channel TF6, broadcast International, for €12M. on TPS and certain cable networks. Tavernier (two Cesars), Pédale Douce On November 12, TF1 issues a by Gabriel Aghion and Les voleurs by €500 M bond, enabling it to diversify André Téchiné. 2001 and extend its sources of financing. In January, TF1 acquires 50% of On December 18 in partnership Série Club, the "100% series" 1998 with France Télécom, TPS launches channel, and increases its stake in International Broadcasting Eurosport attracts 80 million television its digital television offering over Eurosport to 100% by acquiring the viewers (cumulative audience share) ADSL telephone lines in Lyons. holdings of Canal Plus and Havas. with 24-hour broadcasting of the It is dubbed “TPSL Prestige”. Nagano Olympic Games. TF1 Games, a new division of TF1 Entreprises focusing on the publishing Launch and broadcasting on TPS of and distribution of parlour games, Shopping Avenue (home shopping heads sales with an adaptation of the channel) and Infosport (the first game Who Wants To Be A Millionaire? sports news channel). The success of 11 films co-produced TF1 International supplements by TF1, having exceeded 1 million its library of broadcasting rights cinema admissions in 2001, with the acquisition of Ciby DA's underscored the group's involvement in comprehensive catalogue. cinema film production/co-production. Audiovisual Rights
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2004 Key Events
BROADCASTING FRANCE Broadcasting* On April 10, the first airing of the programme La Ferme Célébrités attracted 8.5 million prime-time viewers for a 45.7% audience share. On June 6, TF1 enjoyed exclusive rights to film the ceremonies surrounding the 60th anniversary of the liberation of France and provided the signal for international broadcasting. The whole channel and indeed the whole group was mobilised for this event. TF1 broadcast live eight of the biggest Euro 2004 matches. On June 21, the France-Switzerland match notched up the best audience of the year for any type of programme with over 15.3 million Thematic channels Since December 3, Odyssée and viewers. In March, TF1 raised its shareholding in Histoire have been broadcast from the TV Breizh technical centre at The summer saga, Zodiaque TV Breizh to 67% and in April to 71.1%. Lorient, where the channels share (5 episodes), produced by Alma with On June 22, LCI celebrated its tenth the digital production and all Claire Keïm and Francis Huster, beat anniversary. Since 1994, La Chaîne technology facilities. audience records for this programme Info has forged its leadership as the type with an average approaching top French non-stop news channel. 10.8 million viewers per episode. Production companies At the end of June, the TF1 Group The capital increase in Groupe At the International Car Show in signed an agreement with France Glem brought the TF1 holding in September, TF1 presented two major Télévisions, ARTE France, l’INA, this subsidiary to 97.8% and then to innovations that are destined to Pathé, Suez, and Wanadoo to acquire 100% in the course of the first half revolutionise television in the coming 2004. years: high definition television and 100% of the capital of Histoire, mobility. the thematic channel dedicated to March 24 saw the public release of French and world history. the Immortel (ad vitam), an adaptation On October 5, audience success for The seventh wave of Médiacabsat of the comic strip La Femme Piège the broadcast of the film Astérix et by Enki Bilal. It was directed by the Obélix: Mission Cléopâtre, with over (covering the period from December 29, 2003 to June 13, 2004) author, produced by Téléma and 12.4 million viewers for a 50.2% co-produced by TF1 Films Production. audience share. confirmed the group’s channels’ good audience figures, justifying The latest film from Jean-Jacques The TF1 News Division and Technical the TF1 growth strategy in the Annaud, Deux Frères, co-produced Division set up a major facility to complementary audiovisual arena. by TF1 Films Production, was a big cover the American Presidential success with 3.3 million admissions Elections. The same teams were The October 25 launch of Pink TV, over its operating duration. again mobilised at the end of the first gay and “gay-friendly” December for the terrible tidal wave channel, announced live during the Four years after the success of Le that hit India and South East Asia. TF1 8 o’clock news. Fabuleux Destin d'Amélie Poulain,
* Source: Médiamétrie.
14 ACT 1/40/227x300GB20/04/0511:23Page15 2004 AnnualReport magazine. consumptionanddistanceshopping the The enhancedprogramme hasbecome design andanewteamofpresenters. changed formula:anewset, In September, Téléfoot Magazine seasons. League exclusively thewhole starting August2004,willbroadcast for theEnglishFootballLeagueand, On March 15, DISTRIBUTION television programmes: new magazinesbasedonTF1 In June,TF1Licenceslaunchedtwo Other companies spectators. attracted over4.4millioncinema was released onOctober27and co-produced byTF1FilmsProduction, Un LongDimanchedeFiançailles the newfilmfrom Jean-Pierre Jeunet, championship forthree Téléshopping TPS . won thebidding Premier Ushuaïa and , launched a over December2003). ADSL offering (i.e.,a101%increase new subscribers month ofDecember, TPSwon A historicalrecord of theFirstDivisionfootballmatches. unreasonable inflationofthecosts subscribers, byparticipatinginthe its employees,ortheinterests ofits financial future ofthecompany TPS decidednot championship totheCanal+group. the French FirstDivision to entrustthebroadcasting rightsof Professional FootballLeague of thedecisionbyFrench On December10,TPSwasadvised can nowsubscribetoTPSL. access.Fivemillionhouseholds Internet TV overthetelephonelineandADSL coverage to On October15, “double play”offering 15 newtowns TPS L to endangerthe to itssatelliteor at TPS:inthe expanded its and 66,588 (LFP) and : During the28 of theItalianpopulation. channel thatwilleventuallycover81% (Europa TV) February 6sawthelaunchof BROADCASTING INTERNATIONAL Distribution, were acinemasuccess. The LastTrapper In December, thefilms 1.5 millionunitsin2004. Lord oftheRings cassette ofthefinalinstalment releasedTF1 Vidéo aDVDandvideo AUDIOVISUAL RIGHTS services. and results onEurosport interactive live andinitstotality, plushighlights Athens, Eurosport , anunscrambledsports th Olympic Games , distributedbyTFM . Salesreached covered theevent Downfall Sportitalia and in The 15
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TF1 and Society
Ethical broadcasting – Then by TF1’s team in charge of viewing each one of the spots once TF1 has been running several the BVP has given its opinion. initiatives to promote on-going – Lastly by the CSA, which assesses improvements in its editorial quality ads subsequently. and consistently higher ethical standards for the programmes it Independent editorial content, child broadcasts. TF1 is, first and foremost, protection, pluralistic and honest a general-interest, family-oriented information, and programme ethics, channel. Respect for viewers in are some of the issues covered in general and for children in particular the latest agreement that TF1 and rank high on its list of priorities. the CSA signed in January 2002. Television is more than a source of The CSA, it is also worth pointing information and entertainment: it is a out, was not required to draw TF1’s wide-open window looking out onto the attention to any breaches in world. Parents should be aware of that provisions relative to information and be there as much as possible when honesty in the course of 2003. their children (so to say) consume In this agreement, the CSA also television. TF1 (as indeed other general- underscored TF1’s efforts to provide interest channels) displays a series subtitled programmes for hearing- of rating icons to warn parents and impaired viewers. It indeed set an to enable them to protect their children annual target of 1,000 hours of from images that could otherwise programmes for that viewer category. disturb them. In 2004, TF1 broadcast 1,845 hours TF1 has also pledged to run an of subtitled programmes using teletext. annual awareness campaign on this office. This office answered to more The TF1 channel reaches the whole issue, in line with objectives it has than 213,000 calls in 2004. This Viewer national community in all its diversity. agreed on with the CSA. Service office keeps tabs on viewer This factor is one of the cornerstones TF1 has its own in-house of its editorial policy. Accordingly, feedback. And viewers regularly tell programme-compliance office that it is pushing ahead with policies to us that they are satisfied with the checks every air-bound programme include journalists from national consistency they see in the editorial upstream. As part of its agreement minorities in its News and Sports guidelines, content and ethics of our with the CSA, rating icons are displayed divisions. It is also especially newscasts. on all programmes, and psychologists determined to cast minorities in vet programmes for children. its most popular TV dramas. The new system has been in use since November 2002. Another minority that TF1 is striving to put in the spotlight is the gay Ad content is also run through community. It showed this thorough checks. community devoid of taboos in a – First by the BVP (France’s prime-time slot, playing its part in Advertising Verification Bureau) which efforts to change society’s attitudes views the spots and issues a towards homosexuality. preliminary opinion. The BVP is a member of the European Advertising Lastly, to strengthen ties with viewers Standards Alliance, a Europe-wide and to cater for their wants and organisation likewise watching over needs more directly, TF1 has set up ethics in advertising. an entirely viewer-dedicated 11-staff
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"Television is a wide-open window looking out onto the world."
to relieve. In 2004, special Who Wants to be a Millionaire?, Attention à la Marche, La Ferme, Le Maillon faible (Weakest Link) and other shows generated more than €5 M for associations like Les Toiles Enchantées, Handicap International, Perce-Neige, Petits Princes, Restos du Cœur and Broadcasting Broadcasting France others. That is TF1’s way of promoting general-interest initiatives on issues spanning community health, civic involvement and environmental protection. Furniture used by the TF1 and the community the form of awareness-raising ads, group is also given to charity. the associated events get generous When TF1 discontinued Bigdil, Every year sees the TF1 Group news coverage, and 15 or so modules one of its shows, for instance, involved in various sponsorship follow its “solidarity travellers”. proceeds from the stock clearance and patronage initiatives. In 2004, were used to help Samu Social TF1 instantly reacted to the Asian for instance, the group earmarked and Emmaüs cater for the needs
earthquake and the devastating Distribution in excess of €16 million (i.e., of the deprived. approximately 1% of its advertising effects of the ensuing tsunami. To tap into an effective communications revenue) to humanitarian, civil and Besides airing a number of dedicated system and promote these "public cultural operations. newscasts, TF1 reshuffled its schedule to broadcast a special involvement" operations, TF1 joined For instance, TF1 backed charities "Solidarité Asie" on Monday January forces with other parties to found like Secours Populaire, Ligue Contre 3 at 8.50 pm, extending the charity jeveuxaider.com, France’s first le Cancer and Sidaction, as well as appeal for the catastrophe’s victims. "solidarity portal", which went online environmental-protection organisations TF1 donated €600,000 to six on January 31, 2002. such as the Fondation Nicolas Hulot, € associations and TPS gave 100,000 Efforts to implement policies seen as in 2004. The TF1 channel’s Broadcasting to the French Red Cross. In addition, two Department supplied spot-production socially responsible have earned TF1 a special Who Wants to be a Millionaire? place in three sustainable-development resources and advertising slots free € shows generated 1,068,000 for indexes, DJSI STOXX, ASPI
of charge. In total, it broadcast more International Broadcasting associations helping the tsunami’s ® than 220 such spots last year. Eurozone and FTSE4Good Europe. victims. As over the last 16 years, TF1 also Another show, Chantons Ensemble supported the Pièces Jaunes Contre le Sida, which TF1 aired on (small-change) operation. Last year, April 24, 2004, generated nearly this operation collected nearly €6 M €300,000 for Sidaction, an that will go to improving child-care association that funds AIDS-prevention equipment and facilities in hospitals. campaigns and support for HIV This operation is organised by the victims and those around them. Fondation des Hôpitaux de Paris - Hôpitaux de France and presided over A number of programmes also fund by France’s First Lady, Bernadette charity projects regardless of their size Chirac. It gets ample exposure in and the problems they endeavour Audiovisual Rights
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TF1 and Society
Advances in terms of especially dental and eye care – is social benefits particularly attractive. TF1 has also extended its package to include The TF1 Group’s efforts to deliver medical services not covered by high-quality service in every one of social security. its lines of business lean on two critical factors, staff creativity and • On the 1% housing-loan front, staff professionalism. That is why TF1 works with specialised trusts to TF1 strives to nurture a social provide social housing for staff in dire environment that will promote group need, as well as extremely attractive staff fulfilment. terms on home-buyer, building and home-improvement loans (provided General employees use them for their main Lastly, to provide its staff with TF1’s social policies consistently and place of residence). pleasant living conditions, TF1 also proactively exceed legal requirements. Likewise, 1% housing-loan runs a company restaurant serving The social rules in force in the group organisations can vouch for tenants lunch and dinner seven days a week, are the cornerstone of the pleasant, and lend them the required deposit a travel agent, hairdresser, boutique, fair and impartial working environment (in the case of permanent and cash-dispensing machine, metro- it strives to build. Key improvements contract staff alike). ticket and phone-card vending in this field follow. machines and more. Some 300 employees are housed • Employee-saving schemes: thanks to this trust today. A gym (recently refurbished and now TF1 has set up three mutual funds to featuring ultra-modern amenities) is administer staff savings. TF1 Actions, • TF1 also organises weekly services also available. There are lessons one of those funds, has been allowing staff to talk to: weekday mornings, lunchtimes and available since 1988. That is where – a sports doctor, evenings, and even Saturday staff invest the bonus they are – a medical-insurance representative, mornings. A sports doctor is also entitled to in exchange for voluntary – a social worker who meets available for the medical check-up investments. In this case, they employees in difficulty and looks for that staff are required to take if they receive the maximum bonus allowed suitable solutions with them. want to join the gym. under the law (100% of their voluntary TF1 also has a family-friendly policy. contribution, with a ceiling of €3,450 Recruitment and mobility • It awards €915 birth and wedding per employee per year). Recruitment policies stem directly In addition, the special profit-sharing trust premiums. from the three-year strategic plans which was created in 1989 typically • Pregnant women are entitled to full that executive management issues affords each employee the equivalent pay throughout their maternity leave. after consulting the group’s operational of a 14th monthly salary a year. They also cut 10 hours off their working week from the 6th month and functional organisations. These • The welfare system provides high- onward, and are entitled to four weeks’ policies adjust to accommodate quality care and outstanding nursing leave once their maternity developments in the company’s benefits. Moreover, TF1 has taken leave is over. environment whenever changes out specific insurance covering staff • They are also entitled to a gross warrant them. on high-risk missions in war or €8 premium covering day-care costs The goal of these policies is to deliver earthquake zones and the like. for every day worked. the high professional standards • TF1 likewise covers 50% of its • Leave for family events (weddings, that befit TF1’s leadership in its various staff’s healthcare-insurance births, deaths, moves, child markets, and to nurture individual contributions, and the coverage – sickness, etc.) is also provided. and team motivation.
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"Staff creativity and professionalism: an essential objective for TF1."
Mirroring the fact that professional All premises meet the standard legal Equal opportunities for men mobility is one of the key issues shaping requirements for public buildings and and women the TF1 Group’s human resources disabled access. TF1 is also pushing ahead with its policy, more than 200 employees Show-business contract workers efforts to avoid discrimination changed jobs in 2004 (upping the total between men and women, and to since 2001 to 900). This policy reflects TF1 has spent the last four years honour the legal principle of equal the group’s determination to bolster constantly and proactively integrating opportunities in recruitment processes, each and every employee’s career non-permanent staff and curbing comparable career prospects and Broadcasting France prospects through individual coaching the job insecurity associated with identical compensation. and hands-on career management. their status. If men have traditionally outnumbered From 2001 to 2004, this integration women in technical jobs, the TF1 Disabled workers policy involved hiring 380 non- Group has spent recent years In 2004, the TF1 Group ran an permanent employees (technical levelling the playing field to the in-house awareness campaign, with workers, freelancers and directors) 47 women to 53 men ratio it can a view to promoting disabled-worker and every one of its companies will boast today. The ratio of promoted integration. Its twofold policy involved be pushing ahead with efforts in this women is exactly the same as that of hiring disabled workers and using the direction in 2005. If contract and promoted men (11.3%). Likewise, services of sheltered workshops. freelance workers account for 12.3% women employees have enjoyed of the group’s total headcount, TF1 SA’s training opportunities under exactly the TF1 counts about 30 disabled score has dropped below the 7% same terms and conditions as men. employees and uses the services of mark. It is worth pointing out that The differences between men’s and Distribution sheltered workshops or “CATs” contract workers account for a women’s compensation at (centres providing assistance through substantial portion of staff in the “supervisor” level is explained by employment, providing productive group’s drama, variety-show and the fact that vacancies in production services as well as medical and entertainment programme production. jobs are mostly filled with candidates social support for disabled adults) on holding a BTS (advanced vocational a regular basis. Services can include TF1 has set up a genuine social diploma) in audiovisual techniques. putting in-house magazines into policy for this staff category. Men outnumber women in this envelopes, recycling hardware, • Employee-saving schemes: category, and market conditions organising cocktails and the like. contract workers are entitled to take impose higher starting salaries than TF1 has also joined Tremplin, an part in capital-increase operations on for candidates holding, say, a BTS association which includes leading TF1 Avenir 2 and Bouygues in secretarial services (a practically French companies working to help Confiance 2 funds, and to participation women-only category). Otherwise, under terms and conditions stated International Broadcasting disabled students earn qualifications a man and a woman hired for the in the agreement. and secure jobs. TF1’s goal is to same technical or other BTS-level • Healthcare: medical-expense create a candidate pool to match job will earn exactly the same salary. coverage and welfare schemes date its staffing requirements. In other words, young man or woman back to 1992. In employment- journalists, or young man and TF1’s Employment and Handicap interruption situations, contracts women administrators with similar Committee was created in February involve paying wages for 18 months, academic backgrounds will be 2004. It comprises members of the against 12 before. hired on the same salary. Health and Safety Committee, the • Others: a specific 35-hour-working- company doctor and Board week agreement for contract workers, members, and is actively helping annual revisions of fee schedules, disabled workers to blend into the and access to the Works Council’s company. social and cultural activities. Audiovisual Rights
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TF1 and Society
The environment programme in this area (and indeed France’s only early-evening TF1’s activities have little impact on programme dedicated to promoting the environment and involve no environment-friendliness), Ushuaïa, particular industrial risks. The group, four times a year at 8.55 pm. Toner and ink cartridges are also nonetheless, takes an active stance collected and recycled. Copier filters on protecting the environment The TF1 Group has been active are likewise replaced on a regular and set up a proactive environmental alongside Nicolas Hulot, the man basis. policy in 2004. That policy’s main who has come to epitomise concern aspects follow: for the planet in French viewers’ Gases used in refrigeration systems eyes, for almost 20 years now. are among the fluids recommended 1/ All group sites are required to cut Besides broadcasting Ushuaïa by relevant legislation, as are the water and power consumption, and distributing spin-off DVDs, methods we use to drain used manage waste, recycle hardware magazines and the like, it will launch equipment before disposing of it. and video media, etc. Ushuaïa TV in 2005. Ushuaïa is one TF1 has also fine-tuned its automatic The TF1 Group has set up of the TF1 Group’s key awareness- office-lighting system with a view to environmental-monitoring indicators, nurturing vehicles and its underlying cutting its site’s power consumption. and TF1 Group board members are principle is that “wonder is the first Lastly, to stay a step ahead of briefed on results. TF1 has pledged to step towards respect”. pending regulation aiming to provide regular and transparent updates Specific TF1 Group initiatives in the eradicate gases that deplete on how those indicators evolve. environmental arena are as follows: the ozone layer (CE regulation 2/ Respect for the environment Selective waste-sorting facilities have no. 2037/2000 of the European concerns group staff regardless of been set up in suitable TF1 Group Parliament and Council of June 29, their category and business line. Staff facilities. The volume of waste at TF1 2000, working up to a ban in 2015), are thus encouraged to act accordingly headquarters and the logistics it entailed TF1 has planned to replace all and to help promote this policy. prompted the General Services relevant air-conditioning equipment department to buy a waste compactor, (about 1,600 heat pumps and air- 3/ Contractors working on TF1 which has been operational since conditioning cabinets, and five units Group premises are involved in this August 2003. An outside company producing ice-cold water) starting initiative. then provides sorting services in a next year. This project will span five The Internal Resources and dedicated off-site facility. years and is part of a full building Technologies department is in charge • At the main Point du Jour site, overhaul. of implementing and monitoring this wastepaper sorting is run in association environmental policy. with the company La Corbeille Bleue. • Waste edible oil is stored in 4/ Lastly, and most importantly, special containers and collected executive management is encouraging by a specialised company. TF1 Group companies like the TF1 • Batteries powering hand driers and channel, the thematic channels, TF1 air fresheners, as well as other Video, TF1 Entreprises and others to batteries used by staff and stored in use the products and programmes it collection units are collected by releases throughout the year to raise outside service providers. viewer awareness and thus to nurture • Exprimm, the company responsible environment-friendliness and protection. for providing electrical maintenance TF1, for instance, produces and services at the site, collects neon broadcasts France’s leading tubes.
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"The Group takes an active stance on protecting the environment and emphasizes on the prevention of occupational hazards." Broadcasting Broadcasting France Distribution Health, safety and hygiene work areas, including closed offices, and the doctor examined meeting rooms and the company 3,305 employees in 2004) and specific In 2004, TF1 focused particularly restaurant. This regulation is care for employees with jobs on preventing occupational hazards, respected and, to help smokers and involving particular risks (they raising awareness among all parties. non-smokers live together, smoking vaccinated 900 employees and Safety training courses were run for areas have been defined (and prepared 157 first-aid kits for staff 375 employees from different staff conspicuously signposted). Smoking bound for high-risk zones in 2004). categories in 2004. Fire-prevention areas have air purifiers to remove a This office also encompasses the training courses are held on a regular substantial amount of the nicotine freelancers working for the group, as basis and fire drills for all the staff are from the air. Smoker shelters in the the professional bodies representing this staff category have no medical conducted as required by relevant patio and on one of TF1 main centres providing regular check-ups. legislation. building’s terraces likewise
encourage staff wanting to smoke Efforts to renew office furniture also International Broadcasting There are also job-specific courses to do so outdoors. unfurled through 2004. The goal was in first aid (plus a stress-management to adjust workstations to new module for staff working in high-risk The master occupational-hazard technology (flat screens, for zones), and in driving in difficult document has been updated. This instance). In total, 400 workstations situations (now available for News document lists all the hazards in and 850 chairs were replaced. division staff entrusted with each of the company’s units, and all Special trolleys were bought to assignments). Other courses dealing the associated preventive measures reduce the use (and hence handling) with specific risks (electrical hazards, (instructions, training courses, etc.). of cardboard boxes. movements and postures, and the The medical department comprises like) are also provided. a company doctor and three nurses. As required by the Evin law, smoking They provide daily care (nurses is forbidden in enclosed public or treated staff on 6,987 occasions, Audiovisual Rights
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Group’s Activities
The restructuring of the group’s companies and the application of IAS 14 (international reporting standard on segment reporting) led TF1 to change the way it presents its sector information. Redeployment by major competing communication groups and the arrival of several new sector players attracted by new distribution possibilities for programmes and services (DTT, ADSL, WiFi, mobiles, etc.) prompted TF1 to reorganise its entities to make them more competitive within their sectors.
In addition, IAS 14 advocates the presentation of information by sector of activity and by geographical zone in greater detail than is required by French legislation.
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Table of Contents
The group’s activities break down into the four following sectors. The subsidiaries comprising these divisions are listed on page 05 of this document. Broadcasting France TF1 Channel The group’s historical business. Broadcasts family-oriented programmes, news and live events. Constantly strives to blaze new trails and to provide the prestigious programmes that its audience expects. Thematic The last 10 years have seen TF1 build an array of popular thematic channels dealing with information, sports, entertainment, documentaries, youth issues, etc. Advertising Offers a rich variety of advertising media, ranging from conventional communications to relationship marketing, and still growing to provide consistently more original and more potent solutions to advertiser concerns. Production The TF1 Group counts seven production subsidiaries serving the cinema business, the TF1 channel, and the thematic channels.
Others (TF1 Entreprises, Téléshopping and e-TF1) 24 Broadcasting France TF1 has created a number of subsidiaries which have grown on the strength of the channel’s exposure and built their success on groundbreaking, in-house initiatives.
Distribution TPS The 66% stake that TF1 has owned in TPS since 2002 has made TF1 one of the key players in France’s pay-TV scene. Satellite and ADSL versions of TPS offer more than 200 channels and services, featuring digital broadcasts of all the leading French channels and TPS Star.
36 Distribution
International Broadcasting Eurosport International Eurosport is the most widely-distributed sports channel in France and Europe. Its success stems from its unique offering combining all the top-ranking international sports competitions spanning more than 100 disciplines.
Sportitalia A new sports channel introduced in Italy in 2004 by the Eurosport teams in collaboration with Tarak Ben Ammar.
38 International Broadcasting
Audiovisual Rights Deals with buying, selling and distributing broadcasting rights for media and/or cinemas.
39 Audiovisual Rights
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Broadcasting France
15.3 million viewers Best rating in 2004 for the football match France-Switzerland b of the Euro 2004
TF1 CHANNEL* France’s leading general-interest channel, TF1 provides family-oriented and event-related programmes dealing with prominent issues appealing to a broad-based audience, and encompasses news, entertainment, drama, sports, feature films, youth programmes, magazine formats and documentaries. Through them, TF1 offers its viewers a dynamic and user-friendly choice of programmes constantly in line with their expectations.
In the face of rivals offering choices segmented by theme, age, sex and/or genre, TF1 is cementing its position as a living general-interest channel, as a leading broad-appeal medium, and as a trailblazer. In 2004, TF1 accounted for 31.8% of viewers, and for 35.5% of women under 50 (a key advertiser target). Further proof of TF1’s vigour came from the fact that it ranked as leader more than nine evenings in 10. TF1 scores The 2004 record was the football match between France Another 2004 highlight was Zodiaque, the summer saga: and Switzerland during the Euro 2004 cup, which drew five episodes ranked among the 100 highest ratings in 2004. 15.3 million viewers. This summer serial’s last episode drew 11.3 million viewers. Between the Euro 2004, Champions League, FIFA Centennial and UEFA Cup, TF1 put 10 football matches French cinema in the spotlight among the 100 most-watched programmes in 2004, 18 feature films broadcast on TF1 made their way into the cementing its position as the football-broadcasting leader. 2004 hit parade. No less than 13 of them were French – as indeed were the top 3, Astérix et Obélix Mission French drama tops the pops Cléopâtre (12.4 million viewers), Monsieur Batignole (12.3 million) and Les Bronzés Font du Ski (10.8 million). French drama, more than ever before, proved to be the American films Shrek and Cast Away were hits too, mainstay of TF1’s broadcasts: 50 of them ranked among the drawing 10.3 and 10.1 million viewers respectively. 100 highest ratings in 2004. TF1’s big (and recurrent) police heroes have shown fresh Magazines and entertainment proof of their appeal: Julie Lescaut, Une Femme d’Honneur, Les Cordier, Navarro, Commissaire Moulin and Femmes de – the success of large-scale popular Loi are still acclaimed by French viewers. rendez-vous As many as 11.5 million viewers at a time watch Véronique This channel’s drive to break new ground in its magazines, Genest, who stands out as the public’s favourite heroine (10 games, variety and reality shows not only built the skills that of the 11 episodes broadcast during non-summer months have cemented TF1’s position in these new genres, it also ranked among last year’s 100 highest ratings). attracted new audience groups.
* Source: Médiamétrie.
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Late evenings 89 out of the10 0
best programs in 2004 The success that late-evening shows have enjoyed attests to TF1’s expertise. It cemented the handsome scores it had enjoyed in previous years. To cater for a broad-based audience, TF1 will continue to build its late-evening shows around magazine formats weekdays and around series weekends.
La Ferme Célébrités drew as EXCELLENT POSITIONING Information + entertainment = WEEKEND DRAMA many as 8.5 million viewers for its FOR TF1’S LATE-EVENING infotainment THE BEST FROM THE US prime-time broadcasts and daily PROGRAMMES IN 2004 Incroyable Mais Vrai attracted a TF1 broadcasts exclusive and shows scored an average rating TF1’s late evenings attracted an substantial number of loyal viewers unreleased series at weekends. of 50% in the women-under-50 average of 2.4 million viewers in in 2004 too. This programme The Experts, the US’s number-1 2004. That equates to a 33.4% series since 2002, has 2.9 million category. This new reality-TV presented by Bruno Roblès was share in the 4-and-older viewer viewers (or 40% of the audience*) on genre, as its name implies, watched by 3.2 million people (i.e., category, and a 38.2% share in the edge of their seats. Other series presents celebrities. 35% of the audience*). Vis ma Vie, the women-under-50 segment - have also been doing well for a An average of 7.0 million prime- a sharp rise on 2003. presented by Laurence Ferrari, also number of seasons. New York Unité Broadcasting France time viewers confirmed Star did well. Spéciale/Law & Order (2.6 million or VARIED MAGAZINE FORMATS Academy’s success once again. Information and investigation 38% of the audience*) and New York Magazines of testimony to open 2004 also brought a new (and Le Droit de Savoir and its spin-offs, Section Criminelle/Criminal Intent a window on a changing society successful) game from presenter Le Droit de Savoir: Fait Divers and (2.6 million or 36% of the audience*), The big hit, Y’a que la Vérité qui Arthur, A Prendre ou à Laisser, Le Droit de Savoir: Grands are two benchmark examples. Compte!, produced and presented supplementing other game Documents unravel news highlights by Pascal Bataille and Laurent shows already broadcast on TF1 and key events. Charles Villeneuve Fontaine, draws an average of like Attention à la Marche, Zone drew an average of 3.1 million 3.2 million viewers. Rouge, and Le Maillon Faible viewers, a 38% audience share*. Friday’s Sans Aucun Doute is still a (Weakest Link). success: 2.1 million viewers (44% An original talk show of the audience*) tune into Julien 2004 also saw star presenter Cauet TF1 Courbet’s show. Others, like C’est draw his fair share of the audience.
the benchmark Quoi l’Amour and Confessions His 2.2 million viewers and 33%* Distribution for news Intimes also command consistently audience share rank La Méthode healthy scores. Cauet among TF1’s hits. 2004 was particularly eventful * On individuels aged 4 and over - Médiamétrie. on the international scene as well as closer to home, with regional and European elections. Once again, TF1 was acclaimed as the news benchmark. The power behind the information comes from the appeal of the various events that this channel covers. TF1’s newscasts are still the
daily highlight that the French International Broadcasting look forward to most. In 2004, 46 newscasts attracted more than 10 million viewers. Audiovisual Rights
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Broadcasting France
Information where it’s urgent
Sunday December 26 saw one of the century’s most powerful earthquakes unleash a colossal tidal wave that ravaged the coasts of Sumatra, Thailand, Sri Lanka and southern India. More than 50 TF1 journalists and technical staff worked across Asia, despite the humanitarian risks, logistical issues, scant knowledge of the area and myriad other factors undermining their efforts to cover the catastrophe.
When the dispatch came in on the Arnaud continues, “It was gruelling: allowing them to send their stories live broadcasts from the area, to an morning of December 26, TF1 and journalists and technical staff had and live broadcasts very fast. extremely tight deadline. Everyone, LCI news directors instantly very little time to get to the disaster Meanwhile, in Paris, editors in chief including the assistants, editors, decided to send to the region four area, shoot their first stories and and technical supervisors were journalists and researchers were TF1 teams (bolstering Asian edit them. Which still left the busy getting organised and liaising busy as early as the day after the correspondent Antony Dufour’s transmission issue…” The team between the newscaster and catastrophe. In total, more than team) and two from LCI. At that had portable Fly Away satellite correspondents. At the same time, 12 hours of TF1 air time were fully point, the problem facing the transmission systems affording the News division had to compile a dedicated to the disaster. technical and news staff was them an important autonomy and special show, involving a string of * 26/12/2004 to 26/01/ 2005. simple: to get the best choice, in record time – on Christmas weekend. Arnaud Mouillevois, who runs the reporter teams, explains, “We put teams together balancing each member’s skills and field experience, and taking the affinity among them into account. It was a delicate exercise, but it was vital to the success of the mission.” A few hours later, the first teams were leaving for Asia on the few remaining flights. On Monday 27 December, the 1 o’clock news aired images shot and edited on location, as well as the first correspondents’ presentations. The operations were practically all up and running by the time the 8 o-clock news began: there were two teams in Thailand, one in Indonesia, one in Sri Lanka and one on its way to southern India. It took nothing short of a technical, physical and moral feat to overcome the logistical hurdles in those disaster-stricken zones while dealing with the time difference (+5 or 6 hours) – in the midst, of course, of the human catastrophe.
26 ACT 1/40/227x300GB20/04/0511:23Page27 2004 AnnualReport requirements and,ultimately, toallthesubscribersandadvertisersitsserves. These channelshaveturnedTF1intoafamilyofcateringforanyaudience’s and entertainment. TF1’s programmesandhavecementedtheirpositionsasextensionofTF1-hallmarkednews documentaries. Andviewersrecognisethequalityofthesechannels,whichsupplement Our thematicchannels,inotherwords,spansports,news,featurefilms,entertainmentand stakes in11thematicchannels(plusindirectinterestsTPS’12channels). channelsenrichingFrance’sof supplementary audiovisualscene.TF1hascometoown The TF1Grouphasbundleditstelevision-relatedexperienceintoawideselection THEMATIC CHANNELSINFRANCE 2004 withthree weeklies( TF6 entertainmentprogrammes were bolstered intheautumnof TF6 sports arena. which thesetwochannelsare complementaryinFrance’s Eurosport, eurosport.tf1.fr, fittinglymirrors thewayin website thatTF1haslaunchedandnowoperateswith on TF1(Formula1,French FootballCup,etc.).The championship) orprogrammes complementingtheones with exclusiverights(France’s 2nd-divisionfootball highlights programmes blendingawealthofinternational prominent positionisbasedonitsuniquechoiceof makes Eurosport France’s leadingthematicchannel.Its A 1.7%audienceshare inthe4-and-oldercategory Eurosport France and more up-to-datebackdrops. result, were abletoenjoyarejuvenated channel,newdecor underwent anoverhaulinJanuary2005.Itsviewers,asa 10inJune2004(seeaspotlightonpage29)and LCI turned in uppersocialandprofessional categorieswatchthemost. segment andremains oneofthethree channelsthatviewers stands at1.2%.LCIiscementingitsleadershipinthenews share (inthe4-and-olderportionofinitialisedpopulation) The latestMédiacabsatsurveyshowedthatLCI’s audience itself grew about9%). with growth onsatelliteaswellcablenetworks(which During 2004,itattracted400,000newsubscribers(up8%), At December31,2004,LCIreached 5.3millionhomes. LCI and reality TVdailies( Bête an event-specificprime-timeshowamonth( , presented bySébastienFolinandSandrainOctober), Survivor Cauet TIVI,RealTVUSA at 7.00pmdailyinOctober). L’Homme contrela and Hit TF6 ), *Mediacabsat(wave8)December29,2003–June13,2004. ** 2004,audienceshareinthe4-and-oldercategory. Mediacabsat –January-June * target category(individualsof15yearsandolder). watched channelsinitssubscribergroup inpracticallyevery Série Club,theseriesbenchmark,ranksamong5most- more than theprevious year). households viaTPSandthemaincableoperators(180,000 On December31,2004,SérieClubreached 2.28million Street policy, featuringaUSelectionspecial( Série Clubisalsopushingaheadwithitsevent-making now-emblematic seriesare stillthere. 4 TF6 isthetoprankingchannelforitsinitialisedaudience.Itranks exclusive. TF6 (300,000more thanlastyear).ThischannelisaTPSsatellite At theendofDecember2004,2.66millionhomessubscribedto January 2005. andlivelierdécorin TF6 alsoswitchedtoamore modern Expert scheduling highlightfilmslike frères Scott/OneTree Hill preview onSaturdays) andtwoall-newseriesforFrance( Firefly award winner), number-1 inCanada), ( The seriespolicyismore aggressive, withthree prime-timeslots 2005 brought fourall-newseries: Série Club channels) witha1.1%audienceshare. 24 within theTF1Group (ofwhich12are editedbyTPS) 23 th in thewomen-under-50 targetsegment(excludingfree-to-air on Wednesdays, ), theScreenings awards, , andthelike. (from theproducers of thematic channels K Street Angel (produced byGeorgeClooney)and Coupling and on Fridaysandthe La FamilleenFolie Buffy Armageddon X-Files (new, 2004Screenings ). Thenew-release and Blue Murder nights andmore. West Wing New York District , The Firm, ). TF6isalso (new and and Les K 27
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TV Breizh This channel is on air 16 hours a day and runs specials every Since it was created in September 2000, Lorient-based weekday evening (Grandes Biographies Saturdays, Histoire TV Breizh has grown into one of the top supplementary de France Tuesdays, Mystères et Enigmes Thursdays, etc.). channels available through TPS and CanalSatellite via Histoire co-produces 20 or so new documentaries a year. the main networks and ADSL. TV Breizh counts nearly This year it focused on the history of petroleum and on Jean Paul II’s journeys. 4.4 million subscribers. Since September 2004, TV Breizh’s general-interest Ushuaïa TV programmes and ambitious series, film and drama-buying The TF1 Group’s new discovery channel, Ushuaïa TV, will be policy has elevated it to the position of 9th cable and satellite introduced in 2005, exclusively on TPS. As the other channel it enjoys today. discovery-unit channels, Ushuaïa TV will be broadcast from Today, TV Breizh is pushing ahead with its audience- the production department in Lorient. As well as new conquering drive and stretching its initialisation coverage. It programmes, Ushuaïa TV will rebroadcast the most stunning is simultaneously consolidating its operation in Lorient, images from the well-known documentaries that Nicolas building a technical unit to broadcast a number of national Hulot presents on TF1. These programmes are produced by channels (Pink TV, Odyssée, Histoire and Ushuaïa TV). Yagan. Odyssée TFOU Odyssée has kept the promise it made when it was founded TFOU was introduced in 2003 and developed by e-TF1 1997. It has become the cable and satellite benchmark for teams building on the success of the tfou.fr website (one documentaries. million visits a month). It brings 4- to 10-year-old children an ample variety of programmes (cartoons, a talk show This inquisitive and world-embracing channel offers a variety presented by a puppet, magazines presenting the latest and of new programmes touching on discovery (travel, peoples, greatest in cinema, video, music and so on). adventure, animals, etc.), general knowledge (civilisations, science, technology, heritage, geopolitics, etc.) and special- TFOU is available from 6.30 am to 8.30 pm daily, and reaches event broadcasts. more than 1.3 million homes exclusively on the TPS network. The quality of its programmes has earned it acclaim and awards. It has co-produced more than 330 hours of documentaries including L’Affaire Dominici, Chance It, Les Diamants de Giscard, La Vie Comme Elle Va and others. On December 31, 2004, Odyssée counted more than 2 million subscribers (10% more than in 2003). Besides its ample distribution through cable networks, this channel is available via satellite exclusively on TPS and via ADSL on TPSL. In 2004, Histoire joined forces with Odyssée to form TF1’s discovery unit, which likewise includes Ushuaïa TV. Histoire This channel was established in 1997 and bought by TF1 in June 2004. Today, it counts 4 million subscribers and is accessible by satellite, through all the cable networks, and via ADSL. Histoire takes viewers through French and world history, from the days of old to the present day, to explain why things are the way they are today. It tells the lives of the men and women who marked their time and casts light on lifestyles and civilisations through documentaries, films and a weekly magazine, Le Journal de l’Histoire.
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June 1994-June 2004: La Chaîne Info is 10 years old
Launching LCI was quite a gamble at the time. But today it has become the reference news channel in France. The success is due to its original format (real-time news thanks to numerous daily newscasts, in-depth news in magazine formats and talk shows, plus all the major events live) and the mobilisation of its enthusiastic staff, who do their utmost to offer quality information to their French audience every day. A look back over the past decade.
1994 1999 In November, the channel opened 2002 On June 24 at 8.30 pm, the The LCI antenna transmits live an office at New York. The high-speed “LCI Live” service starter’s gun for the first French around the clock. was launched in September. LCI non-stop news channel. The petrol tanker Erika sank on 2001 programmes are now accessible December 26: first international December 12. Oil slicks washed On September 11, Pierre live around the clock and across scoop for LCI. One of the channel’s up on the Breton beaches. Alexandre, LCI correspondent in the world via the Internet. LCI Live journalists at Marseille airport filmed The channel’s magazines and news New York, informed the editorial today has 11,500 subscribers. the final special forces assault on programmes covered the event live. team that an aeroplane had
the Airbus highjackers live. crashed into the World Trade 2004 Broadcasting France 2000 Center. At 3.34 pm precisely, the In June, LCI celebrated its 10th 1996 LCI moved to the TF1 head office TF1 antenna switched over to that anniversary. Leading personalities LCI joined the top 15 channels on at Boulogne. On September 1 at of LCI, which retransmitted the first who were in the news during the the TPS bundle. 6.00 am, in the presence of Patrick images of the terrorist attack. decade celebrated the event at the Le Lay, Jean-Claude Dassier and Millions of French people Georges Pompidou Centre; the 1998 Etienne Mougeotte, La Chaîne Info discovered the dramatic event live. evening was broadcast live on LCI. July 12, the French team won the broadcast its first digital news Viewers acquired the “LCI reflex.” At the same time, LCI videos were Soccer World Cup. The channel’s programme thanks to Process December saw the launch of the made available for the first time on journalists brought the explosion of News, the result of two years of new version of lci.fr in association mobile phones. joy live to LCI viewers. involvement and collaboration with tf1.fr (today, three to four among various group entities. million pages viewed per month). Distribution LCI means: - €48 M annual budget - Around-the-clock broadcasting - 55 news bulletins per day - Around 30 different magazines - All major events live - Two studios and two production teams - 14 offices in the provinces and six abroad - 22 clip-edit facilities - 217 full-time employees, of whom 115 journalists - Over 5,000 guests per year - Over five million cable and satellite subscriber households, i.e., 13.5 million potential viewers. - One of the top three channels most watched by the A/B+ category
- Broadcasting via cable and satellite, ADSL and the Internet. International Broadcasting Audiovisual Rights
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Broadcasting France TF1: the reference vehicle in any media plan
ADVERTISING TF1’s advertising arm offers advertisers a multitude of ways of communicating thanks to its effective, complementary vehicles – from powerful mass media through thematic channels to one-to-one.
TF1, the reference vehicle in any media plan. In 2004, the TF1 channel underscored its leadership by broadcasting practically all the most powerful ad spots. As a result, it assures advertisers of maximum exposure of their campaigns to all audiences, enabling them to efficiently expand the share-of-mind of their brands and their sales in the short term. A complete and structured offering of thematic channels, enabling advertisers’ communications strategy to be fine- tuned according to their targets and individual centres of interest: • News with LCI, the 100% News channel and a reference for decision makers; • Sport with Eurosport France, the channel dedicated to live sporting events; • TV dramas and series with: – TF6, the mini-general-interest channel targeting young adults; • Young people with Télétoon, Cartoon Network, Eurêka!, – TV Breizh, the channel for TV dramas, cult series and Boomerang, TFou and Piwi, six channels covering all the feature films; children target segments. • Cinema with TCM, the legendary movie channel; Internet with tf1.fr: endowed with a rich and varied content, • Discovery with: the TF1 website is the legitimate relay of the channel’s – Odyssée, the documentary channel; programmes. It has confirmed its status as the premier – Ushuaïa TV, the channel to better understand nature and media and news site in France. The strong point of the site is to respect it; its ability to adapt continuously to new Internet uses, which – Histoire, the channel to decipher the past and better are boosted by the expansion of high-speed access – and understand the present; this offers advertisers new audiovisual communications • The gay and “gay-friendly” world with Pink TV; opportunities.
30 ACT 1/40/227x300GB20/04/0511:23Page31 2004 AnnualReport • andfullinformationonthethematicchannelsservedby • accesstovideospresenting theeditorialleitmotivof • accesstotheTF1programming grid,whichisconstantly • facilityforadvertiserstoviewtheircampaignsinreal time; tf1pub.fr, withthefollowingfeatures: Publicité alsoputonlineanewversionoftheprofessional site In 2004,tobetterrespond toclientexpectations,TF1 exploitation. through topublicrelease, DVDavailabilityandinternational to theimageofafilmduringitslifecycle,from shooting feature film sponsorship,whichenablesbrandstobuildlinks tailored toeachoftheircommunicationsobjectives. assurance foradvertisersoffindinganoriginalsolution TF1 Publicité:afullrangeofcutting-edgevehiclesandthe TF1 Publicité,acompleteround-up ofstudies,rates,sales updated; main TF1programme types; terms andconditions,etc. advertisers stepout “Unauthorised” television advertisers from thepress, retail andbookpublishing. In 2004*,televisionopenedupitsadvertisingspotsto television. Inparticular, the 9.5% ofthepress investmentin The thematicchannelsrepresented became anewsstandsuccess. new press magazines,whichsoon market share), forexampletolaunch channels, andinparticularTF1(55% the poweroffree-to-air Certain publishershaveleveraged represented 58%ofinvestments. The TVmagazinesegment done primarilyperedition. purchase ofcertainmagazinesis challenge forthepress, sincethe And speedingupsalesisamajor quickly launchorboostsales. advertising isanopportunityto awareness andimage,television Besides thebenefitstotitles’ television revenue thisyear. representing closeto1.5%oftotal invested intelevisionadvertising, resources asof2004.71titles to haveaccessalltelevision The writtenpress istheonlysector on television The press advertising January 2004. January “unauthorised” sectorsstarting three outofthefourso-called France modifieditsmeasuresfor television advertising.Therefore, sectors fromcommunicatingvia discontinue thebanningofcertain from theBrusselsCommissionto France respondedtothedirection * BythedecreeofOctober8,2003, screen thisyear. promoted 24booksonthesmall channels. Bookpublishers steps oncableandsatellite 13 retailers, however, tooktheirfirst So theyhavebeenmore discreet. free-to-air channelsuntil2007. still notallowedtocommunicateon Advertisers from theretail sectorare thematic channels Retail andbookpublishingon magazine. centre ofinterest orthetargetof selected fortheirproximity withthe offering ofthethematicchannels, specialised press exploitedthe open, starting in January 2004. open, startinginJanuary advertising arenaiscompletely – Forthepresssector, thetelevision channels broadcastinginanalogue). 2007 –onnationalfree-to-air 1, still notauthorised–untilJanuary communications) andgradual(itis (i.e., excludingpromotional up oftelevisionadvertisingispartial – Fortheretailsector, theopening television advertisingtoday. – Cinemaisstillbannedfrom channels distributedbycableorsatellite. January 2004,butaccessislimitedto advertising wasalsoopenedupin – Forbookpublishing,television 31
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24 movies co-produced and 45 million invested by TF1 Films Production in 2004
PRODUCTION COMPANIES The TF1 Group is historically a producer of programmes. It has surrounded itself with production subsidiaries so as to supply the channel with entertainment, news, TV drama and documentary programmes as well as to fulfil its obligations of investing in French production.
Cinema TF1 Films Production TF1 Films Production handles the investments linked to TF1’s obligations to invest 3.2% of its advertising revenue in the co-production of European film and at least 2.5% in French-language production. This subsidiary co-produces some 20 feature films each year and in so doing acquires the broadcasting rights destined for TF1 and the co-producer royalties giving it access to the receipts generated by the exploitation of the films. In 2004, TF1 Films Production committed close to €45 M to the production of European or French cinema products.
Television GLEM Glem is a production company specialising in entertainment TAP – Tout Audiovisuel Production programmes. Its activity revolves around three main areas: TAP was founded in July 2001 and is steered by Charles – entertainment with programmes such as 30 tubes de Villeneuve. TAP produces documentaries and reportages. It légende, Mister France, NRJ Music Awards; produces Droit de savoir and has launched new concepts – reality TV, with Marjolaine et les Millionnaires, l’Ile de la such as Appels d’Urgence, a magazine anchored by Carole Tentation and Queer: 5 experts dans le vent; Rousseau. – tours, for example those of Star Academy and André Rieu. TF1 Publicité Production Quai Sud TF1 Publicité Production specialises in the production of This company produces and, in association with Julien content for the broadcasting division – short programmes, Courbet, hosts the prime-time magazine formats (Les 7 programme sponsorship and trailers are its areas of péchés capitaux) and those of the second part of the evening excellence. (Sans Aucun Doute, Confessions Intimes). The TF1 Publicité Production teams have a permanent ear to Alma Productions clients’ expectations and invent new concepts to offer them Alma Productions was founded in June 2001 and is in the greatest visibility over the airwaves. charge of the production of TV dramas for TF1. This young Studios 107 company can already boast several products, including Studios 107 market their studios and technical services to Julie, Chevalier de Maupin and TF1’s summer success, outside producers for such programmes as: Attention à la Zodiaque. marche, Y’a que la vérité qui compte and La Méthode Cauet.
32 ACT 1/40/227x300GB20/04/0511:24Page33 2004 AnnualReport The broadcasting portiongivesthe a co-production portion. into abroadcasting portionand This investmentisbroken down to theco-production of24films. Production committedsome As aresult, in2004,TF1Films that ceilinghasgoneupto3.2%. previous fiscalyear. Since2001, of theiradvertisingrevenue ofthe European cinemabyinvesting3% the financingofFrench and and obligedthemtocontribute making afinancialcompensation in theirprogramming without from theaffinity forcinemaoutput television channelswere profiting realised thatthe The government cinema wasgoingthrough acrisis. in 1980,atatimewhenFrench TF1 FilmsProduction wasfounded mark, three were TF1co-productions. TF1’s subsidiarydedicatedtocinemaco-production. OfthefourFrench filmsthatpassedthethree millionadmissions of itsbestperformancesforthepast10years.Animprovement thatwastotheadvantageofTF1FilmsProduction, With amarketshare of38.4%andthenumberadmissionsup22.5%over2003,French cinemain2004achievedone TF1 co-productions –boxoffice stars € 45 M set onsuccessincinemasfollowed between 7and77,withdualsights both menandwomen,aged to selectingprojects thatwillsatisfy Production paysspecialattention channel. Consequently, TF1Films a general-public,general-interest with theeditorialdirection ofTF1, selection criteriathatare aligned by theTF1subsidiaryisbasedon The selectionoffilmsco-financed 600, 300,100…24! the exploitationoffilm. benefit from revenue generatedby portion enablesthesubsidiaryto cinema release. Theco-production around 30monthsaftertheir films exclusivelyontheTF1channel broadcasts oftheco-produced channel therighttooneortwo experience oftheproducer, etc. actors, thestyleofdirector, the quality ofthewriting,choice and originalityofthestoryline, the different criteria–theinterest decide tosupportbearinginmind 20 to25filmsthatthechannelwill leaves attheendofdaysome substantial “sorting”process, which committee of10orsopeople.A reader abetted byanexternal analyse themindepth,aidedand directors read 600scenariosand the TF1FilmsProduction artistic that cross itsdoorstep!Eachyear, considering thenumberofprojects detective films.Sometask, dramas, adventure filmsand pride ofplacetocomedies, by successontelevision.Itgives ranked 6 12.3 millionviewers,respectively, Monsieur Batignole et Obélix:MissionCléopâtre scores onthechannel. which achievedcommendable the “home-made”co-productions, year wasalsoavintagefor 2004. Asregards television,last top performersofFrench cinemain (2.5 million)were alsoamongthe nominations), Deux Frères five nominationsfortheCésars), Podium with nolessthan12nominations. nominations forthe2005Césars, received thebiggestnumberof by Jean-Pierre Jeunet,thisfilm 4.4 millionadmissions.Directed de Fiançailles, headed upby the 17“millionaire” filmsin2004, TF1 subsidiaryco-produced nineof put together(74.7million).Inall,the registered byalltheFrench films to halfthenumberofadmissions 30 millionspectators,thatis,close Production in2004attractedover co-produced byTF1Films And therecipe works.The24films audiences of2004. (3.6 millionadmissionsand th and 7 (3.3 millionandtwo L’enquête Corse Un LongDimanche which notchedup th in thetop100 , with12.4and Astérix and 33
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Ushuaïa, Star Academy, Franklin, … Nearly10 0 million strong brands brang out by TF1 Entreprises videos watched on www.tf1.fr
OTHER COMPANIES TF1 has created several subsidiaries that have flourished on the fringes of Broadcasting France and built their success on innovative initiatives.
TF1 Entreprises TF1 Entreprises groups together four businesses in the areas of publishing and licences: – TF1 Licences markets brand licences to industrial companies (Ushuaïa, Star Academy, Franklin, Barbapapa, Bob l’Eponge), designs and distributes derivative products (Jenifer, Priscilla, Patricia Kaas, etc.) and executes communications operations linked to shows and events (performer tours, etc.); – TF1 Games publishes parlour games based on television programmes (Who Wants To Be A Millionaire?, Star Academy, Ushuaïa, Franklin, etc.) and original concepts (Composio, Cranium, Cadoo, etc.); – TF1 Musique develops disc projects relative to musical operations (Star Academy, T-Rio summer operation, etc.) in partnership with music companies, to brands and to characters whose rights it controls (Franklin, etc.). Une Musique, a subsidiary of TF1 Entreprises, produces and publishes music from television programmes and films; – TF1 Publishing publishes magazines (Star Ac Mag, Ushuaïa, Dora l’exploratrice, Score, etc.), children’s books (Bob L’Eponge, Tortues Ninja…) and comics (Spartacus, Star Academy…). TF1 Editions, a subsidiary of TF1 Entreprises, publishes books (Le dernier trappeur…) and novels derived from the channel’s TV dramas (Zodiaque, Julie, chevalier de Maupin, etc.).
Téléshopping Téléshopping is one of the main home-shopping operators (catalogue management, logistics processes, product in France. The activities of this subsidiary hinge on the quality, after-sales service, etc.) and database programmes broadcast Monday to Saturday morning management. (except Wednesday) on TF1, the nine million catalogues dispatched in 2004 to over one million active customers, e-TF1 and the e-commerce sites www.teleshopping.fr and e-TF1 brings together all the TF1 Group’s interactive www.surinvitation.com. Online sales in 2004 amounted to activities – teletext, audiotel, SMS, Internet, interactive TV, over €10 M in revenue (around 200,000 online orders), mobile multimedia, etc. generating a profit for the past five years. These services enable the group to pursue its relationship It is thanks to Téléshopping that the TF1 Group has with viewers around broadcasting events. All the major developed a genuine know-how in distance sales themes are reflected in interactive services to respond to the
34 ACT 1/40/227x300GB20/04/0511:24Page35 2004 AnnualReport market thatisgrowing only19%. among mediasiteswithanaudiencegrowing 42%ona The tf1.frwebsiteagainstrengthened itsleadershipposition with versionsadaptedtoeachterminal. viatf1.frandoninteractivetelevisionTPS, the Internet any timetheywishviatelephone(audiotel,SMS,i-mode),on So TF1viewerscanpractice games, etc. results, thelatest aboutTF1programmes, youth,entertainment, expectations ofthegeneralpublic–non-stopnews,sports sales skills Téléshopping increased itsrevenue 15%compared to2003. the figures are veryencouraging,sinceTéléshoppinghas as thesolidhealthofenterprisedemonstrates.Indeed, and process wasinitiated.Today, ithasreached maturity Several yearsago,anin-depthchangetothestructure and The mostseniorofTF1programmes, togetherwith to-day operations,beingatthecutting corporate valueandareality. Inday- “being atthecuttingedge”isbotha Far from beingjustacatchphrase, edge makessense Being atthecutting management” withintheteams. handle thefamous“change a missionstatementsoastobetter backed upbytheimplementationof entire business.Thischoicewas introduction ofasingleISforthe Information System(IS)andthe restructuring ofthewhole committee approved the effort. In2001,themanagement figures are thefruitofanin-depth There are nomiracles.Thegrowth the wholeenterprise information systempermeating The firstbuildingblock:asingle Auto-Moto , hasneverbeensodynamicandinnovative. Who Wants To BeAMillionaire? life cycle.Thisyear, over200sensitive that intervenesthroughout theproduct has introduced aqualitydepartment the generalpublic,Téléshopping Faithful toitsimageofqualitytowards The ruleisquality the latesthome-cinema. world (closeto diamond, thebestlegofhamin how toselectaflipper, a3-carat no meanchallenge.Ithastoknow products forTéléshopping.Thisis appropriateness andqualityofnew Purchasing team.Itguaranteesthe This stageishandledbythe products ismercilessly stringent. Selection andreferencing ofthe style ofsellingthosearticles. innovation andthrough adifferent selection ofproducts thatfocuson edge isexpressed boththrough the € 1,000 perkilo!)or Téléfoot Citroën. CarShow,at theInternational inpartnershipwith mobile TVbroadcast inMPEG4formatwaslaunched signed withNipponTVandEurope’s firstexperimentin broadcasting. Mid-2004,astrategicagreement was e-TF1 isalsodeterminedtoplayitspartinmobileTV mobile networks. European SoccerCupsiteinJune2004onthe2.5G/3G almost 100millionvideos,ande-TF1developedtheofficial mobile networks.In2004,thetf1.frwebsitedistributed e-TF1 ismeetingitsambitionsonthehigh-speedfixedand maintaining thecharacterofa promote theobjectsforsalewhile was reworked soastobetter In parallel,theprogramme editorial revamped bytheMarketingteams. support materialswere entirely date andmore colourful.Allsales new graphicidentity, more upto Last Septembersawthebirthofa It’s thestylethatcounts! distance-shopping). (better thantheaveragefor their purchases inlessthan12days nine outof10customersreceive The figures are veryencouraging: customers andtomeetdeadlines. are paramount–torespond to For everyoneinvolved,twoobsessions service forTéléshoppingcustomers. hand-picked toguaranteethebest the workofmultipleserviceproviders characteristics –itneedstoco-ordinate Téléshopping hasitsownspecific Meet thedeadlines the customer100%. goes underthemicroscope tosatisfy and qualityofsalespitch–allthis standards, intrinsicperformance grade. Regulationcompliance,product Close to15%ofthemdidnotmakethe “samples” were analysedindepth. Watch thisspace! interactive televisionservice. day beavailableviai-modeoran Téléshopping products couldone of newtechnologiesgoesonand investigations intothedevelopment The missioncontinuesand at unbeatableprices. referencing andoffering products club basedontheprincipleof surinvitation.com, aselectsales given birthtoanewsite, This accumulatedknow-howhas 200,000 orders ayear. website generatescloseto existence, theteleshopping.fr After closetosevenyearsof Continuous innovation the artisticteamsfrom TF1. insynergywith been modernised And thechanneldesignhasalso to feedthefiveweeklyrendezvous. stand out.Shootingiscontinuous Laurent Cabrol) makeeachselection surrounding theincomparable presenters (five“characters” garden!) andanexpandedteamof a newset(areal housewith ingredient. SinceSeptember2004, for whichrepresents avital television programme theaudience 35
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Distribution
1.7million TPS Star: subscribers a premium channel! to TPS offer
TPS, TÉLÉVISION PAR SATELLITE To seek the best programmes, develop the best environment for the channels, listen and respond effectively to viewers’ expectations – TPS is committed to offering a great show and TV for all tastes, with its flagship TPS Star and all the major themes the whole family loves.
Rights assured TPS is a partner of the French Professional Football League until May 2005. In the framework of their latest request for Cinema tenders, the channel decided not to participate in the In 2003, TPS signed a total exclusivity contract with Warner unreasonable inflation of the costs of League 1 matches. Bros (Troy, Harry Potter and the Prisoner of Azkaban, Matrix TPS will close the 2004-2005 season with top-ranking Revolutions, Ocean’s Twelve, etc.), Touchstone in the Disney matches and, exclusively, all the matches of the last two Group (Ladykillers, The Village, Starsky and Hutch, etc.) and days of the championship. Walt Disney Pictures (Pirates of the Caribbean 1 and 2, etc.). TPS is the exclusive broadcaster of French basketball (Pro In 2004, TPS demonstrated the renewed confidence of the A, Aces’ Week, qualification matches of the French teams, American producers by assuring its access to the rights of its etc.) with the match of the day on Sunday afternoons. two historical partners, Paramount and Regency. CBS Paramount International Television: the global contract, A new step for TPS Star which includes pay-per-view and catalogue rights, covers all Since September 2004, TPS Star, the TPS Premium the feature films from Paramount Pictures until 2010 Channel, has taken on a new dimension with a clear, easy- (Collateral, Irresistible Alfie, Spongebob squarepants, and to-follow programme line during the week (original series on starting in 2006 in the cinema, Mission: Impossible 3, etc.), a Mondays, “blockbuster” evenings on Wednesdays) and broad selection of television films and some of the studio’s thanks to the arrival of personalities to lend a hand to a team major classics. of talented journalists, plus the launch of new programmes Regency Enterprises: the global contract, which also (medias, exclusive Looney Tunes short films, etc.). includes the pay-per-view and catalogue rights, covers all TPS Star has also underpinned its policy of purchasing the feature films produced by the studio (Daredevil, Elektra, original series not previously broadcast in France (Las Man on fire, Stay, etc.), and those that will be released in the Vegas, The Apprentice, or Arrested Development). United States from January 1, 2006 to December 31, 2010. The French broadcasting regulator, CSA, awarded TPS’ In parallel, TPS has increased its investment in French premium channel the qualification “channel of first cinema to offer its subscribers exclusive films for all tastes exclusivity”. As a result, it is allowed to broadcast a major (Arsène Lupin, Immortel ad vitam, La Confiance règne, feature film at prime-time on Saturday evenings starting in Espace Détente, Iznogood and Man to Man). Among all January 2005. TPS Star is the only channel in the thematic broadcasters (free-to-air, cable, satellite), TPS is the third broadcasting segment to have this privilege. biggest investor in French film production. As regards sport, TPS Star can boast the skills of top Sport specialists (Jean-Luc Arribar, Daniel Bravo, Grégory Nowak, and others) to provide unique coverage of the exclusive TPS won the bidding for the English Soccer League and, broadcasting of the big matches of the English Soccer for three seasons starting August 2004, will broadcast the championship on Saturday and Sunday afternoons, with whole English Premier League championship, which over five hours continuous live transmission. includes no less than 45 French players. To assure a wide- ranging availability, TPS has created English Premier League, a channel totally dedicated to broadcasting the A wealth of themes matches of the day, with 10 matches either live or recorded, Having already strengthened its Youth offering, which now i.e., more than 300 matches per season. includes 10 channels and services, TPS is pursuing its growth
36 ACT 1/40/227x300GB20/04/0511:24Page37 2004 AnnualReport bulletins directly ontheirtelevisionwithTPS. customers oflaFrançaisedesJeux,whocannowfillintheir des Jeux.ThisisafirstinFranceandsimplifiesthelifeof launched inmid-October, TPSLcustomerscanifthey wish andTelevision”Thanks toan“Internet multi-serviceoffering fixed feeranges,startingat has adoptedtheTPScommercial offer withfivestandard To respond toalltelevisionpreferences, theTPSLoffering over 25majorcitiesinFrance. by FranceTelecom, isavailableintheParisregion andin offering, marketedbyanapproved distributionnetworkand new siteswithitspartnerFranceTelecom. TheTPSL five millionpotentialhouseholdsthankstotheroll-out of premium televisionoverthetelephonelinehadarangeof At theendof2004,TPSasleaderonmarketfor National roll-out ofTPS TPS launchedLoto As apioneerofinteractiveTVinFrance,September2004, and flora,explorationforfunorasasport. the channeldedicatedtogreat outdoors,respect forfauna 2005, M6MusicRockandBlack;plusUshuaïaTV, Music offers 100%musiccategorisedbytype;andinearly Pink TVisanoptionalmini-general-interest channel;XTRA Blanc channelisdedicatedtoloversofthemountainworld; of thethemesDiscovery, MusicandSport.TheTV8Mont- channel. Itswealthandvarietyofprogrammes makeitthedriverofbundle.TPSStarisbestTPS. entertainment, etc.).To enhancethequalityofthisoffering, thefocusin2004wasonTPSStar, theTPSpremium The TPSbundlecomprisesmanychannelsbroadly coveringthemajortelevisionthemes(cinema,sport,youth,series, TPS Star, concentratedexclusivity France Pro Achampionship,andthe Basketball League,includingthe an exclusiveflavour–theNational The sportsprogrammes alsohave time slotsandforallviewertypes. television, magazineformats–atall palette –cartoons,series,reality channels, itoffers abroad entertainment The ultimateinfamily-oriented programme onthecinema. is theonlychanneltooffer adaily film genres. Inaddition,TPSStar put thespotlightonalldifferent are onTPSStar. Themeevenings studios, 55%oftheUSblockbusters agreements withthemainAmerican As TPShassignedexclusivity and sport. strengths –cinema,entertainment channel hasconsolidatedaround its offers viewerseaseofchoice,the Besides itsnew-lookgrid,which ® et Banco € ® 11 permonth. , thetopgamesoflaFrançaise Finally, TPSStar’s bigproject for film atprimetimeonSaturday evenings. allowed tobroadcast amajorfeature first exclusivity”.Asaresult, itis channel thequalification“channelof The CSAawarded ourpremium 2004 endedwithamajorinnovation. the selectclubofpremium channels. to assure itsrisewithintheranksof of TPSStar’s visibilityandpromotion channel’s managementtakescare best thattelevisioncanoffer. The is there tohelpmakeTPSStarthe streamlined andresponsive structure most ofthebundle’s channels.A sum ofitstalents,afterthefashion And everydaythechannelis 1 soccernightthrough toMay2005. the BigMatchofeachFrench League English soccerchampionship,plus to broadcast thebestmatchesof Premier League,enablingTPSStar set, but also high-speed Internet tosurfpeacefullyontheirPC. set, butalsohigh-speedInternet take advantagenotonlyofthemajorTPSchannelsontheirTV and dominions. TPS filmchannelsoncableandintheoverseasterritories ADSL offering and320,000customersofTPSStarthe scribers, ofwhich1,355,000subscriberstothesatelliteor At December31,2004,TPShadsome1,700,000sub- subscribers, a74%increase compared to2003. TPS’s netgrowth amountedtoover115,000new satellite offering andcloseto50,000TPSLcustomers. In 2004,TPSattracted209,000newcustomersforits with confidenceandstaysubscribedforthepleasure. success ofitsstrategybywhichthepubliccansubscribe service, proximity andtransparency, whichare thekeysto TPS hascreated aPleasure Pact,astrong commitmentto satellite intheautumnof2005. with high-definitiontelevisionthatwillberolled outvia also represents innovationattheserviceoftelevisionviewers networks (satellite,telephonelineusingADSL,DTT).TPS to markitsarrivalonpowerful,complementarydigital communications, inharmonywithsubscriberpreferences, The TPSoffering issupportedbynewnationwide get away…TPSisallthat,butabove“Pleasure”. To dream, tobemoved,getinformation,discover, to Transforming communications new programmes willhavetobe Besides masteringthetechnology, then inMPEG4highdefinitionmode. programmes interrestrial digitaland 2005 willbetobroadcast its be theflagshipofTPSmore thanever. In thecomingmonths,TPSStarwill channel willdeveloponDTT. “unscrambled” timeslotsthatthe created tocomplementthe 37
Audiovisual Rights International Distribution Broadcasting Broadcasting France ACT 1/40/227x300GB20/04/0511:24Page38
Audiovisual Rights International Distribution Broadcasting Broadcasting France (Sources: AGF, GFK,CKOIntomart,Barb,Audimétrie,Sofrès,MMS,Gallup,AGBPolska,Eurosport) In2004, Eurosportattracted646,000viewerspermedian * Formula 1GrandPrix). world championships(withtheWRCralliesand 2005, thiseventwillbecomeoneoftheonlythree FIA promoter oftheFIAWorld Touring CarChampionship.In Furthermore, Eurosport hasbecomethecommercial reference sportssiteatEuropean level. expertise andunderpinnedthegroup’s placeasthe crowned theEurosport teams’sportsinformation 2.1 millionvisitorspermonth(+61%), surfers Internet Finally, withonebillionpagesviewedin2004and federations andathletes). OlympicCommittee,sports in general(International Sydney Olympicsin2000)andbythesportingworld viewers permedianhour;i.e.,+58%compared tothe know-how –whichisrecognised byviewers(1.4million The AthensOlympicGamesshowedupEurosport’s technical andeditorialteams. programmes produced andpresented bytheEurosport combat sports,etc.–andalsoofthequality races; athletics; cycling,withallthemajorinternational Cup, theChampions’League,AfricanNationsCup; soccerwiththeUEFAthree GrandSlamtournaments; Touring CarChampionship,etc.–tennis,withnotably Rally Championship(WRC),Paris-DakarRally, European motor sports–Motorcycling GrandPrix,Superbike,World of majorsportingevents–over100disciplinesasvaried audience record isareflection bothofitsunrivalledoffering 23 milliondifferent viewers (+8.1%)eachday. This audience* reached record levelsin2004withcloseto uninterruptedgrowth since2002,thechannel’sWith to reach 98millionhouseholdsspread across 54countries. won overinexcessof3.5millionsubscribers2004(+7.3%) The Eurosport channelisnowbroadcast in19languagesand strengthened itsleadershippositionin2004. Thanks toitsuniqueknow-how, theEurosport Group Eurosport International International Broadcasting 38 It isafurthersuccessforthegroup’s growth. international boasted ninemillionviewersperweekbytheendof2004. broadcasting landscape.ItwaslaunchedonFebruary6and The Sportitalia(Si)sportschannelsoonmadeitsmarkontheItalian developed Sportitalia’s content. eurosport.com, installedatMilan, Eurosport, Eurosportnews and responsible fortheItalianversionsof the newchannel.Theeditorialteam services andtheprogramming of acquisition ofsportsrights,technical headquarters totakecare ofthe employees from itsParis Eurosport secondedseveralofits motivated French andItalianteams. 40 daysthankstothedynamismof Sportitalia waslaunchedinonly A project launchinrecord time in Italythrough asportschannel. examine theinterest ofapresence producer, Tarak BenAmmar, to forces withthefamousfilm At thatpoint,thegroup TF1joined covers 81%oftheItalianterritory. unscrambled round theclock.It of-cost channelbroadcast free-to-air networkforsale–afree- Rupert Murdoch putuphisItalian the opportunities.Early2004, outside France,ithasnotneglected with regard toitsgrowth strategy While TF1hasalwaysbeenprudent Sportitalia! Buongiorno connoisseurs. and targetsparticularlythesports being trulyattheserviceofsports The newchannelispositionedas A channelservingenthusiasts and interviews. scene through highlights,reports sports Italian andinternational studios embracingthewholeof Si Live hours oflivecoverageadaywiththe The programming teamoffers six adventure sportsandsurfsports. trendy typesofsport–beachvolley, offers “fun”sportsandthemore for theyoungerviewers,Sportitalia events.And includes international Games. Theprogramme gridalso the four-year intervalsbetweenthe other general-interest channelsin disappear from thescreens ofthe to theOlympicdisciplinesthat the channelalsogivesprideofplace formula 1,cycling,tennis,etc.).But Italians’ favouritesports(soccer, Sportitalia correspond tothe Most oftheeventsbroadcast on The all-sportschannel programmes produced atthe ACT 1/40/227x300GB20/04/0511:24Page39 Audiovisual Rights content onVHSvideotapesandDVDthroughTF1Vidéo. and TFMDistribution,plusthepublishingofaudiovisual feature filmsortelevisionthroughTF1International of tradingandcatalogueaudiovisualproducts, The BroadcastingRightsdivisioncoversthebusiness 2004 AnnualReport The ReturnoftheKing,KillBillvolume1,Immortel more recent successesare: filmssuchas categories, from filmtosport,youthhumour. Amongits coversall acatalogueofover3,000items,TF1Vidéo With www.tf1vidéo.fr. and in1999launchedthededicatedwebsite: offering several rangesofvideoproducts vianewsstands networks andrental, has,since1997,been TF1Vidéo and beyondmassdistribution,traditionaldistribution business hasgrown substantiallysinceitscreation. Above istheleadingFrenchTF1 Vidéo publisheronthemarket.Its TF1 Vidéo and Miramax. films tocinemas,inparticularthoseofTF1FilmsProduction Miramax. Thiscompanyspecialisesindistributingfeature TF1 Group andtheAmericanfilmproduction company founded inJuly2002basedonanagreement betweenthe 50%-owned TFMDistributionisaneconomicinterest group TFM Distribution règne Téléma catalogueincludesthefollowingfilms: Charles Gassotfeature filmproduction company. The since2000,isthe Téléma, 49%ownedviaTF1International Téléma in theTFMDistributioneconomicinterest group. ownsastakeinTélémaand Furthermore, TF1International markets: LosAngeles,Cannes,Venice, Toronto, etc. ispresentthe TF1Group. inallthemajor TF1International added valuecatalystoftheheritagerightsaccumulatedby rights inFranceandinternationally. Inthissense,itisakey dedicated totheacquisitionandmarketingofbroadcasting isthesubsidiary Created in1995,TF1International TF1 International mariage such as au StadedeFrance,Coucouc’estnous Passion oftheChrist by E.Chatilliez, , Le FabuleuxDestind’AméliePoulain,Lavieest Un airdefamille ; non-filmssuchas La FemmePiège , Le bonheurestdanslepré ; hitsofformeryears by E.Bilal, of K7/DVDssoldbyTF1Vidéo sinceitscreation. 100 Jean-Marie Bigard Lord oftheRings– La confiance 7 ansde and , etc. The million video products andgeneratedbillingsof hassoldover100million In all,sinceitsformation,TF1Vidéo leadership inthissector. thegrowth shouldregain ofnon-filmonDVD,TF1Vidéo With DVDs for2004(source SEV). sales ofthisnewdigitalmediumshouldreach over75million catalogue ofsome1,200titles.From amarketpointofview, offersTF1 Vidéo itstitlesinDVDformatandalready ownsa mémoire ducinémafrançais Belle ; and the René Château Vidéo classiccatalogue," ; andtheRenéChâteauVidéo ". € 1.275 billion. La 39
Audiovisual Rights International Distribution Broadcasting Broadcasting France Contents
42 Board of Directors 42 Activity and results 2004 52 Human resources and environment update 57 Risk factors 60 Subsidiaries and shareholdings 62 Capital 67 Resolutions Board of Directors Board
68 Financial statements 68 Consolidated profit and loss account - Operational breakdown 69 Consolidated profit and loss account 70 Consolidated balance sheet 72 Consolidated cash flow statement 73 Notes to the consolidated financial statements 89 Statutory Auditor’s report 90 TF1 SA Balance sheet 92 TF1 SA Profit and loss account 93 TF1 SA cash flow statement 94 Notes to the company financial statements 105 Statutory Auditor’s report Financial statements
108 Legal informations 108 Corporate governance and internal control 116 Statutory Auditor’s report 117 Resolutions 121 Information concerning TF1 SA 126 People responsible for financial information Legal informations
Accounts 2004 41 Board of Directors Directors’ report presented by the Board of Directors at the Combined Annual General Meeting on April 12, 2005 (Ordinary part)
Ladies and Gentlemen • Téléshopping, whose contribution to consolidated operating revenue increased by 14% (excluding changes to accounting We are assembled here today at the Ordinary Annual General policies linked to the transition to IFRS standards) thanks to Meeting, as required by French law and by our Articles of a good marketing performance and sustained Internet activity, Incorporation, to report to you on our management during the which benefited from the launch of the e-commerce Web site past financial year, submit the accounts for the 2004 financial “surinvitation.com”; year for your approval, and review the company’s situation and • TF1 International (+63.3%, excluding changes to accounting growth prospects. policies linked to the transition to IFRS standards), thanks to As in previous years, the accounts for the financial year 2004 income generated from the sale of films such as: Agents are presented for both TF1 Group (consolidated accounts) and Secrets and Arsène Lupin. for the parent company, Télévision Française 1. Programming costs for the main channel rose by 4.8% to €893.2 M. 1 Activity and results 2004 Consolidated operating income amounted to €398.8 M, up 19.4%, with an operating margin of 13.9%, up 1.8 points. 1.1 The Group The financial result was negative to the tune of €(18.5) M. This figure was composed principally of financial items linked to the In 2004, TF1 Group operating revenue increased 3.4% to net financial debt of TF1 Group (€412.2 M at December 31, € 2,861.5 M. At constant accounting policies (excluding 2004). changes to the accounting policies linked to the transition to Exceptional items resulted on a loss of €1.2 M. IFRS standards 1), the increase of TF1 Group operating revenue € would have been 6.5%. The year’s business on international Goodwill amortisation in 2004 increased from (12.0) M in € markets represented 9.6% of total consolidated operating rev- 2003 to (19.3) M. This followed the acquisition by TF1 of enue (€273.6 M, including €200.0 M generated in Europe). additional shares in Groupe Glem, the goodwill on which was fully written off in the first half of 2004, and the acquisition of 2004 closed with advertising revenue for the main channel up 100% of the capital of the Histoire channel, the goodwill on 6.6% for the full year. Buoyed by the traditional sectors of Food, which was entirely written off in the third quarter of 2004. Cosmetics products and Automobiles, and boosted by the € Services and Telecommunications sectors, TF1 increased its The group share of net income stood at 220.1 M, an improve- TV advertising market share (2) by 0.1 points to 54.8% for the ment of 14.9%, and the net margin rose by 0.8 points to 7.7%. full year 2004. At December 31, 2004 the group’s shareholders’ funds totalled € € Other activities of the TF1 Group posting strong performances 951.9 M, on total balance sheet assets of 3,227.6 M. Con- € include: solidated net debt stood at 412.2 M, that is 43.3% of share- • TF1 Vidéo (incl. C.I.C and RCV), which saw its contribution to holders’ funds. In July 2004, Standards & Poor’s confirmed consolidated operating revenue grow by 9.5% (excluding TF1’s rating of A/Stable/A-1, underscoring its healthy financial changes to accounting policies linked to the transition to situation. IFRS standards), thanks to strong programming in new offer- The restructuring of the group’s companies and application of ings such as Lord of the Ring III, Kill Bill Volume 1 and in the the IAS 14 accounting standard led TF1 to change the way it humour category (Jean-Marie Bigard, Dany Boon, etc.); presents its sector information. Redeployment by major com- • TPS with operating revenue up 7.4% in total at end- peting communication sector players and the arrival of several December 2004, 1,675,000 subscribers including 1,355,000 new sector players attracted by new distribution possibilities for direct by satellite and ADSL. TPS’s market share for new sub- programmes and services (DTT, ADSL, WiFi, mobile phones, scribers is estimated at 37% for satellite (+1 point versus etc.) prompted TF1 to reorganise its entities to make them more 2003) and 73% for ADSL in partnership with France Télécom competitive within their sectors. In addition, IAS 14 advocates (on average in 2004); presenting information by sector of activity and by geographical zone in greater detail than is required by French legislation.
1 See paragraph 2.2.2 of the notes to the consolidated accounts 2 Secodip
42 The group’s activities break down into the five following sectors: 1.1.1 Broadcasting France • BROADCASTING FRANCE which combines TF1 and the the- matic channels broadcast in France, advertising sales, the CONTRIBUTION TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT integrated production companies and the broadcasting diver- BROADCASTING FRANCE sification activities (namely, TF1 Films Production, TF1 Entre- (in euros million) 2004 2003 2002 prises, Téléshopping, e-TF1); Operating revenue 1,995.4 1,897.1 1,857.1 •INTERNATIONAL BROADCASTING combining the interna- TF1 SA 1,654.9 1,554.3 1,518.1 tionally-based Eurosport activity and Sportitalia; EUROSPORT FRANCE 52.0 49.3 48.9 LCI 35.2 33.9 36.3 •DISTRIBUTION through TPS; ODYSSEE 3.1 3.1 3.5 • AUDIOVISUAL RIGHTS which includes TF1 Vidéo, TF1 Inter- TF 6 6.8 5.9 4.4 national and its subsidiaries, TCM; TV BREIZH 5.6 4.2 – T FOU 0.6 0.4 – • OTHER ACTIVITIES which brings together the various activi- SERIE CLUB 3.4 3.2 3.2 ties such as Visiowave, Métro and Dfree; HISTOIRE 1.4 – – TF1 PUBLICITE 12.5 9.4 8.1 To facilitate comparisons between new and old sector formats, STUDIO 107 3.6 7.3 6.6 this Directors’ report includes a table showing the key profit and TF1 PUBLICITE PRODUCTION 6.9 7.1 7.7 loss account figures for the main group companies according TF1 FILMS PRODUCTION 14.7 13.1 16.4 GLEM 24.9 44.3 41.6 to the old format on page 49. TF1 ENTREPRISES 31.7 56.2 54.7 TELESHOPPING 82.6 73.0 69.4 CONTRIBUTION TO THE CONSOLIDATED PROFIT AND LOSS E-TF1 47.8 26.0 11.0 ACCOUNT MISCELLANEOUS 7.7 6.4 27.2 (in euros million) 2004 2003 2002 Operating profit 354.9 289.8 281.1 Operating revenue 2,861.5 2,768.7 2,655.3 TF1 SA 334.4 287.8 261.9 BROADCASTING FRANCE 1,995.4 1,897.1 1,857.1 EUROSPORT FRANCE 4.7 4.5 5.9 DISTRIBUTION 380.1 353.8 289.8 LCI (9.7) (9.5) (6.9) AUDIOVISUAL RIGHTS 226.4 269.0 260.7 ODYSSEE (0.2) (0.4) (0.3) of Directors Board INTERNATIONAL BROADCASTING 239.2 235.1 245.4 TF 6 1.0 (0.1) (2.8) OTHER ACTIVITIES 20.4 13.7 2.3 TV BREIZH (5.9) (6.1) – T FOU (1.0) (0.6) – Operating profit 398.8 333.9 293.4 SERIE CLUB 0.7 0.4 0.5 BROADCASTING FRANCE 354.9 289.8 281.1 HISTOIRE (1.2) – – DISTRIBUTION 1.3 2.8 (13.8) TF1 PUBLICITE 9.4 6.6 7.5 AUDIOVISUAL RIGHTS 15.8 15.9 6.1 STUDIO 107 (2.0) (3.8) 0.1 INTERNATIONAL BROADCASTING 27.5 25.7 20.0 TF1 PUBLICITE PRODUCTION (0.4) 0.2 0.2 OTHER ACTIVITIES (0.7) (0.3) 0.0 TF1 FILMS PRODUCTION 0.7 0.5 5.6 Net profit 220.1 191.5 155.2 GLEM (4.6) (11.5) (3.4) BROADCASTING FRANCE 213.4 187.7 181.1 TF1 ENTREPRISES 7.5 11.2 10.2 DISTRIBUTION (3.4) (6.4) (21.2) TELESHOPPING 9.5 4.4 1.3 AUDIOVISUAL RIGHTS 13.0 5.4 (0.3) E-TF1 2.5 (1.2) (8.9) INTERNATIONAL BROADCASTING 2.5 5.0 (0.5) MISCELLANEOUS 9.5 7.4 10.2 OTHER ACTIVITIES (5.4) (0.2) (3.9) Net profit 213.4 187.7 181.1 TF1 SA 217.6 191.7 178.8 Preamble EUROSPORT FRANCE 3.1 3.0 4.0 LCI (9.7) (9.5) (6.7) An analysis of the contribution to the consolidated financial ODYSSEE (0.2) (0.4) (0.5) Financial statements figures of TF1’s subsidiaries is shown below. TF 6 1.0 (0.2) (3.0) TV BREIZH (4.2) (2.7) (1.2) TF1 has changed the way it presents its accounts as part of the T FOU (1.0) (0.6) – move towards IFRS standards. This has had a negative impact SERIE CLUB 0.5 0.2 0.3 on the group’s 2004 consolidated turnover €(88.1) M. The HISTOIRE (1.4) – – TF1 PUBLICITE 6.3 3.6 5.2 changes relate to TF1 Entreprises, Téléshopping, TF1 Vidéo STUDIO 107 (1.3) (2.3) 0.1 and TF1 International and mainly concern the way revenue and TF1 PUBLICITE PRODUCTION (0.2) 0.2 0.2 charges are presented. Operating income is unaffected. The TF1 FILMS PRODUCTION 0.6 – 3.9 GLEM (7.4) (7.9) (1.9) impact of these changes is shown for each entity. TF1 ENTREPRISES 5.0 7.3 6.8 TELESHOPPING 6.6 3.2 1.7 E-TF1 2.6 (1.1) (9.1) MISCELLANEOUS (4.5) 3.2 2.5 Legal informations
Accounts 2004 43 Board of Directors
Directors’ report
• TF1 Channel (source: Médiamétrie) • Thematic channels in France In 2004, TF1’s audience share among individuals aged four In 2004, the TF1 Group continued its development strategy in years and above increased by 0.3 points to 31.8%. More sig- the pay-TV market, principally through leading thematic chan- nificantly, TF1 gained 1.1 audience share points among women nels. At December 31, 2004, TF1 had shareholdings either under 50, reaching 35.5%. TF1 therefore posted the best directly, or through TPS, in 22 thematic channels. In June 2004, improvement in audience share by any channel for these two TF1 acquired 100% of the capital of the Histoire channel, bol- categories. stering the group’s thematic channel sector with the creation of This performance underlines how well the programme offering a “Discovery” unit comprising Odyssée, Histoire and Ushuaïa met viewers’ expectations. With supply becoming segmented TV. This latter channel is due to be launched in 2005. In 2004, and an increased number of broadcasting channels, the per- TF1 also acquired a 11.4% shareholding in the capital of Pink formance reinforces TF1’s position as the leading channel. In TV, the first new “gay” and “gay friendly” thematic channel 2004, TF1 accounted for 89 out of the 100 largest viewing launched in October 2004. In February 2005, TF1 completed audiences. the acquisition from Pathé Group of 80% of TMC, along with AB Group. Major football competitions, particularly Euro 2004, were a major feature last year and generated exceptionally large UPDATE ON DIGITAL TERRESTRIAL TELEVISION (DTT) viewing figures. The Switzerland-France match broadcast on LCI, TF6, Eurosport France and TPS Star are among the chan- TF1 on June 21 attracted 15.3 million viewers, the highest nels selected by the CSA to supplement the digital terrestrial viewing figure for any channel during the year. pay TV offering. TMC is among the channels chosen by the The heroes and heroines of TF1 series and television films CSA to supplement the free-to-air digital terrestrial television accounted for half the top performers, repeating their success offering. year after year. The likes of Julie Lescaut, Une Femme d’Hon- The contribution of the French thematic channel to TF1 Group neur, Navarro, Commissaire Moulin, Les Cordier Juge et Flic, operating revenue amounted to €108.1 M, up 8.1%. The com- Commissaire Valence, Joséphine ange gardien, Diane Femme bined operating income of these channels remained negative at Flic, Femmes de Loi, Sœur Thérèse.com regularly attracted €(12.3) M. between 8 and 11 million viewers. The 5-episode summer series, Zodiaque generated between 10 and 11 million viewers EUROSPORT FRANCE and is well placed in the rankings. Eurosport France is the French version of the Eurosport News is ranked in eighth place. By convention only the largest channel. It is the only version of Eurosport which has a window audience figures for the 8 o’clock news and the 1 o’clock news of specialised programmes comprising local rights including are mentioned in the rankings. Note that 46 airings of the French Second Division football, French Cup football, the UEFA 8 o’clock news had viewing figures of over 10 million and that cup, Handball, Volleyball, Formula 1, etc., as well as regional the average annual audience share for the 8 o’clock news was slots and local magazines. Eurosport France supplements 40%. The 1 o’clock news, meanwhile, had an average audi- TF1’s sports offering, particularly for prestigious events such as ence share of 52%. Formula 1 racing, the football/rugby World Cups, the Confed- eration Cup etc.. The improved performance by French film-making compared with last year, with French films accounting for 13 of the The contribution to group operating revenue increased by 5.5% € 18 biggest box-office audiences, was also reflected in the rank- to 52 M. Eurosport France generates an operating income of € ings. The two biggest TV audiences were for Astérix et Obélix: 4.7 M. Mission Cléopâtre (12.4 million viewers) and Monsieur Batig- nolle (12.3 million viewers), which occupied the 6th and 7th places in the top 100.
44 continuing toinvestinhighqualityprogramming. lined andoperatingcoststobereduced, whileatthesametime Ushuaïa TVwillenablecertainsupportfunctionstobestream- Setting upa“Discovery”unitbasedonOdyssée,Histoire and ence. and enhancethechannelimageamonganenthusiasticaudi- procedures havebeenreorganised toimprove theaudience gramme line-uphasbeenoverhauled,whilestaff andoperating 2004 (6-monthfigures). Sinceitspurchase, thechannel’s pro- TF1’s operatingrevenue, recording anetlossof channel hadbecomeprofitable, postinganetprofit of TF1’s operatingrevenue wasup15.3%and,asforecast, the Given thebuoyantadvertising market,TF6’s contribution to achieve break-even in2007. € rose by22.3%).In2004,LCIrecordedtising turnover alossof to The contributiontogroup operatingrevenue increased by3.8% subscribers. ODYSSEE satellite channelswithamarketshare of1.4% 10-year anniversaryin2004.Itisrankedthird amongcableand households, up8%onDecember31,2003.LCIcelebratedits At December31,2004,LCItotalled5.3millionsubscriber LCI 3 Médiacabsat–December 29,2003/June15,2004. At December31,2004, r income of general-interest. ItmadeanegativecontributiontoTF1’s net pursuing apolicyofacquiringtheprogramming rightsformini- r 58%, withanincreased contributiontoTF1group’s operating The channel’s advertising revenue increased bymore than programme schedulewithmore ofageneralistformat. ures, thechannelcontinuesitsstrategyofdeveloping a senting anincrease of15%.Boostedbytheseaudiencefig- satellite channelswithanaudienceshare of0.8% channel hasconsolidateditsrankingamongthecableand one ofthemostdistributedFrench themechannels.The 4.4 millionhouseholds(+10%ontheyear)andhadbecome At December31,2004,TVBreizh wasreceived byalmost TV BREIZH scribers tothe At December31,2004,4.0millionhouseholdswere sub- r halved itsloss,practicallyreaching break-even onstable Accounts 2004 eaching break-even in2007. evenues of33.3%.Thishasbeenachievedwhilesteadfastly evenues. (9.7) M,stableincomparisonto2003.LCIlooksset € 35.2 M,inaverydynamicadvertisingenvironment (adver- numbered 2.0millionsubscribersatend-2004and € (4.2) M.TVBreizh hasreaffirmed itsobjectiveof HISTOIRE TF6 channel. Itcontributed (50%) had2.7millionsubscribers. € € 3 (1.4) Min 1.4 Mto 3 of A/B+ € , repre- 1.0 M. •T • “Growth” sectors: • • At December31,2004 • • “Traditional” sectors: Gross advertisingexpenditure inthemajorityofsectorswasup: increase versus2003. share for “TVads”atyear-end 2004of54.8%,a0.1point The thematic channelsrose by25.5%. 6.6%, whileadvertisingrevenue atthegroup’s French-based Against thisbackdrop, TF1’s netadvertisingrevenue grew by GDP) showingvolatilityfrom onequartertothenext. nomic indicators(consumption,householdconfidenceand ever, 2004wasmarkedbyalackofvisibility, withmosteco- 2004 (source: INSEE),itsbestperformancesince2000.How- quarter of2004.GDPgrowth wasexpectedtoreach 2.1%in again pickedupandconsumptionrebounded inthefourth overthesummer,After aslightdownturn French GDPonce sold byTF1Publicité. Advertising spaceonthesestations(excludingSérieClub)is • Advertisingsales r scribers. SérieClub’s contributiontoTF1’s operatingrevenue ose by6.3%anditsnetprofit almostdoubled. from Internet accessproviders.from Internet 55.2%, up1.0point.Thisstrong performancestemsmainly r ance whichincreased theirbudgetsby23.7%and9.5%, points). ThemaindriverofthissectorwasBanksandInsur- Services rose by13.6%,withamarketshare of45.8%(+0.1 market share to57.3%. House cleaningdeclinedby16.5%,butwithanincreased (+9 advertisersversus2003). of 53.7%,up0.7point,andanincrease inadvertisernumbers Automobiles, whichimproved by14.6%,withamarketshare advertisers; points) andanadvertiserreach upby2.5pointsto85%of Cosmetics rose by0.9%,withamarketshare of55.8%(+0.1 improve itsposition(+0.4%versus2003); on TF1withahighmarketshare (58.7%).Itcontinuedto Food, whichincreased by5.3%,wasthetopspendingsector turers. partly bytheSarkozypactbetweenretailers andmanufac- down inthesetwosectorssinceSeptember2004,caused However, there hasbeenanadvertisingexpenditure slow- espectively, onTF1; elecommunications rose by18.3%,withamarketshare of TF1 CHANNEL consolidated itsposition,withamarket SERIE CLUB (50%) had2.3millionsub- 45
Legal informations Financial statements Board of Directors Board of Directors
Directors’ report
The arrival of the Press sector in TV advertising from January 1, Studios 107 contributed over €3.6 M to group operating rev- 2004 mainly benefited TF1: by year-end 2004, €41.4 M had enue but made an operating loss of €(2.0) M. been spent on TF1 (Secodip figures). This is close to 1.5% of Operating revenue for TF1 Publicité Production stood at the channel’s revenues and represents a market share of €6.9 M, down 2.8% in comparison to 2003. 55.3%. 70% of Press advertisers using TV opted for TF1 as TF1 Films Production contributed €14.7 M to group operating their communication medium. revenue, an increase of 12.2%. In 2004, TF1 Films Production In 2004, THEMATIC CHANNELS represented 9.0% of gross TV co-produced 23 full-length films, of which 9 were seen by more market revenues and 2.8% of the multimedia market (based on than one million cinemagoers (Un Long Dimanche de six different media). These channels posted a rise of 24.8% Fiançailles, Podium, Deux Frères, l’Enquête Corse among € (versus 2003) to 512.7 M. This is still a highly concentrated others). At end-December 2004, €44.7 M had been invested market as the first 15 channels (of 80 polled by Secodip) in 24 full-length films, the required amount of investment as set account for 72% of advertising expenditure and 62% of the out in the licensing conditions. audience (Médiamétrie: subscribers to thematic channels aged Glem’s negative contribution of €(4.6) M to TF1’s group oper- 4 years and over, first half 2004). ating income was mainly due to the sales decline in tours, The complementary nature of national free-to-air TV and the reality TV and “entertainment” units. thematic channels was illustrated in 2004: 82% of advertisers present in national television also communicated on thematic • Diversification activities channels (versus 75% in 2003). TF1 Group has also developed various content management In this environment, TF1 is a leader: 66% of “thematic” adver- and diversified product activities representing spin-offs from the tisers are present in at least one of the channels whose adver- main and thematic channels. The chief of these are TF1 Entre- tising space is sold by TF1 Publicité and 144 other advertisers prises, Téléshopping and e-TF1. opted for at least one of the thematic channels selling adver- In 2004, the TF1 Entreprises faced difficult conditions: the par- tising space. lour games and music market declined by 4% (source: NPD) Retail, Press and Book Publishing, which are new arrivals on and 15% (source: SNEP, excluding video) respectively, € the thematic channels, have already spent close to 5 M on increasing competition for Ushuaïa brand products and the the channels whose space is sold by TF1 Publicité. This repre- Star Academy brand reaching maturity. sents 2.5% of gross advertising revenues on thematic channels Furthermore, since July 1, 2003, TF1 Interactive, previously as measured by Secodip. under TF1 Entreprises, was accounted for in the Internet divi- OUTLOOK FOR 2005 sion and was brought under the e-TF1 umbrella. This creates Growth should be moderate in 2005 (+1.4% according to an unfavourable basis of comparison (TF1 Interactive’s turnover € INSEE), although household consumption could remain at June 30, 2003 was around 12.3 M). buoyant. Because they lack visibility in this challenging envi- In 2004, the contribution to operating revenue by Téléshopping ronment, advertisers have preferred to wait and embark on increased by 13.2% to €82.6 M. All this company’s activities short-term advertising. The market tends to overreact to are enjoying a positive momentum: exogenous events like exchange rate movements (euro/dollar), •the programmes have been upgraded thanks to new studio the oil price or even the Sarkozy pact. sets, a new format and a new team of presenters; Even so, the growth forecasts for the TV advertising market are •the catalogue has been boosted (+28%) by the use of new relatively optimistic: marketing database tools and a new commercial offering; +3.0% for 2005 according to France Pub; •Internet (+43%) benefited as a result of the launch of a new +3.2% for 2005 according to Ad’Barometer; e-commerce site “surinvitation.com”, a sales club offering +4.5% for 2005 according to Zénith Optimédia. limited quantities of products at reduced prices with specific time limits. This new site, designed to make inroads into the • Production companies distance buying market, had already attracted close to 71,000 members by year-end 2004. In order to supply the various channels with programmes, TF1 has developed several production companies covering all genres: films, entertainment programmes, short programmes, documentaries, TV dramas, etc. The main constituents of the unit are TF1 Film Production, Glem, Quai Sud, TF1 Publicité Production, Alma, TAP, Yagan Productions and Studios 107.
46 Operating margins stood at 11.5% (versus 6.0% in 2003) Eurosport International’s contribution to group operating rev- thanks to the sharp rise in processed volumes and lower sub- enue stood at €239.2 M, a rise of 1.7%. Despite a slight fall in contracting costs made possible by renegotiating contracts subscriber prices, licence fee turnover and miscellaneous items and increase shipment volumes. Overheads, production costs were stable due to the increased number of paying sub- and mark-ups were stable. scribers. Advertising receipts climbed 4.9%, due to the overall Téléshopping continues to grow its operation and plans to improvement in national and pan-European advertising markets open two shops in Paris during 2005. and the wealth of sporting events held in 2004 (Euro Football, summer Olympic Games etc.). In 2004, the contribution of the Internet sector to TF1 Group € operating revenue increased by 83.8% to €47.8 M. The growth The contribution to operating income was 27.5 M (+7.0% was primarily a result of: compared with December 31, 2003), that is an operating •An increase in advertising and e-commerce revenues driven margin of 11.5%, thanks to the optimal use of know-how and by a recovery in the market, the development of new formats resources and the increased realisation of internal production and a sharp rise in site audience figures (+42%). Visits to the synergies. TF1.fr site rose dramatically in 2004: with 2.7 million individual The contribution of Eurosport International to the group’s net visitors in December 2004, TF1.fr matched its record in income at end-December 2004 stood at €2.5 M (versus November and consolidated its position as the no. 1 media €5.0 M in 2003), taking into account the losses incurred by site in France; Sportitalia. • The development of mobile multimedia (i-mode, Wap, Gallery etc.); Sportitalia • The success of the A prendre ou à laisser programme. (accounted for under the equity method – 29% TF1) Operating revenue and net income of e-TF1 were both positive February 6, 2004 was marked by the launch in Italy of the free- for the first time at end-December 2004. to-air sports channel Sportitalia, broadcast unscrambled on the
analogue network. With more than 9 million viewers per week, of Directors Board 1.1.2 International Broadcasting Sportitalia has succeeded in making its mark in the audiovisual market. INTERNATIONAL For its first operating year, Sportitalia posted a net loss of BROADCASTING (in euros million) 2004 2003 2002 €(2.5) M (contribution to net income of TF1 Group). Operating revenue 239.2 235.1 245.4 Operating profit 27.5 25.7 20.0 1.1.3 Distribution Net profit 2.5 5.0 (0.5) DISTRIBUTION (in euros million) 2004 2003 2002 Eurosport International Operating revenue 380.1 353.8 289.8 Present in 54 countries and broadcast in 19 languages, the Operating profit 1.3 2.8 (13.8) Eurosport channel was received by 98 million households at Net profit (3.4) (6.4) (21.2) December 31, 2004, and 51.5 million paying households (+7.3% compared to end-December 2003). Daily cumulative Télévision Par Satellite – TPS (66% consolidated by proportionate consolidation) audience grew by 8% over the same period to reach 22.7 mil- Financial statements lion viewers per day. At end-December 2004, the TPS multi-channel digital offering The sports information channel, Eurosportnews, continued its totalled 1,675,000 active subscribers, of which 1,355,000 expansion within Europe and also outside Europe (new distri- receiving direct by satellite and ADSL and 320,000 subscribing bution contracts in South Africa, India, Malaysia, Australia and to the TPS Cinema channels via cable and satellite networks New Zealand) and now reaches 18 million households in more (France and overseas). TPS’s market share of new subscribers than 70 countries. was estimated at 37% for satellite (+1 point versus 2003) and Launched on January 10, 2005, Eurosport 2 will eventually 73% for ADSL in partnership with France Télécom (2004 replace Eurosportnews in Europe, which will continue to be average). developed outside Europe. A veritable sister channel to The churn rate (excluding card only) was 10%, an improvement Eurosport, Eurosport 2 offers a programme line-up aimed at of 0.6 point in comparison to 2003. a younger audience, combining news, magazines and 1,800 viewing hours of sports events per year, of which 450 hours are exclusive live broadcasts. Legal informations
Accounts 2004 47 Board of Directors
Directors’ report
TPS’s contribution to group operating revenue was at TF1 International €380.1 M, an increase of 7.4%. Average revenue per sub- The contribution of TF1 International to group operating rev- scriber rose slightly to €37.7. enue was €39.3 M, up 37%, thanks mainly to revenues gen- TPS maintained operating break-even with a contribution to erated by the sale of films such as Agents Secrets and Arsène € TF1 Group operating income of 1.3 M. For the first time the Lupin. TPS satellite activity reached break-even in terms of net profit in 2004. This enabled it to reduce the total group net loss 1.1.5 Other activities (including ADSL activity), representing a net impact of €(3.4) M (versus €(6.4) M in 2003) on TF1’s net profit. OTHER ACTIVITIES (in euros million) 2004 2003 2002 At end-2004, TPS (100%) net financial debt was €171.3 M, a € Operating revenue 20.4 13.7 2.3 decrease of 53 M in comparison to 2003. METRO – – – On October 15, 2004, TPS L expanded its coverage to 15 new VISIOWAVE 20.4 13.7 2.3 PRIMA TV – – – towns and launched a “double play” offering: television SYALIS – – – +Internet access (high speed), which is now available for sub- Operating profit (0.7) (0.3) 0.0 scription to 5 million households. METRO – – – VISIOWAVE (0.7) (0.2) 0.1 PRIMA TV – – – 1.1.4 Audiovisual rights SYALIS – (0.1) (0.1) Net profit (5.4) (0.2) (3.9) AUDIOVISUAL RIGHTS METRO (0.9) – – (in euros million) 2004 2003 2002 VISIOWAVE (1.0) 0.1 – Operating revenue 226.4 269.0 260.7 PRIMA TV (1.6) – – TF1 VIDEO (incl. CIC and RCV) 162.5 215.2 192.1 SYALIS (1.9) (0.3) (3.9) TF1 INTERNATIONAL 39.3 28.7 32.6 OTHERS 24.6 25.1 36.0 Visiowave Operating profit 15.8 15.9 6.1 TF1 VIDEO (incl. CIC and RCV) 17.1 17.3 14.5 In 2004 Visiowave contributed €20.4 M to group operating rev- TF1 INTERNATIONAL (5.3) (1.1) (6.2) € OTHERS 4.0 (0.3) (2.2) enue, representing an increase of 49% and a negative (1.0) M Net profit 13.0 5.4 (0.3) contribution to TF1 Group net profit. TF1 VIDEO (incl. CIC and RCV) 12.2 12.4 10.3 2004 was the year that Visiowave became the official choice in TF1 INTERNATIONAL (2.1) (1.8) (5.6) OTHERS 2.9 (5.2) (5.0) the New York subway tender offer. The company has also been retained to equip Heathrow airport and has won its first TF1 Vidéo (including CIC and RCV) Malaysian contract. Robust performances in the kiosk activity and traditional net- Metro work sales enabled TF1 Vidéo to post a sharp increase in Publications Metro France (TF1 acquired 34% of its capital at activity in comparison to 2003; this was despite a decline in the end of the 2003 financial year) was consolidated from rental activity as a result of the termination of the distribution December 31, 2003. Activity improved in 2004 thanks to contract for the Buena Vista Home Entertainment catalogue (on buoyant sales in Paris, Lyons, and Marseilles, and heavy mar- December 31, 2003). The contribution to operating revenue in keting in the new launch areas (Toulouse, Lille, Bordeaux and 2004 was €235.7 M, an improvement of 9.5% before changes Nice). The company’s net loss stood at €(0.9) M at end- to the presentation of results linked to IFRS. December 2004. 2004 was marked by a wealth of new programmes, namely Lord of The Ring III, Kill Bill Volume 1, Immortel, 7 ans de mariage and The Passion of The Christ, and in the comedy cat- egory Jean-Marie Bigard and Dany Boon. In terms of volume, global sales represented 19.7 million cassettes/DVDs (+30.5% versus 2003). TF1 Vidéo’s operating margin was 7.3% and its contribution to group net income dipped slightly to €12.2 M (versus €12.4 M in 2003).
48 Contributions to the consolidated profit and loss account according to the former presentation
CONTRIBUTION TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT OPERATING REVENUE OPERATING PROFIT NET PROFIT (in euros million) 2004 2003 2002 2004 2003 2002 2004 2003 2002 TF1 channel 1,667.4 1,563.7 1,526.2 352.1 299.0 274.1 224.8 193.7 177.9 TF1 SA 1,654.9 1,554.3 1,518.1 334.4 287.8 261.9 217.6 191.7 178.8 TF1 PUBLICITE 12.5 9.4 8.1 9.4 6.6 7.5 6.3 3.6 5.2 DIVERS 0.0 0.0 0.0 8.3 4.6 4.7 0.9 (1.6) (6.1) Publishing / Distribution 280.5 349.6 343.3 35.1 34.3 30.6 24.4 23.8 21.1 TF1 ENTREPRISES 31.7 56.2 54.7 7.5 11.2 10.2 5.0 7.3 6.8 TF1 VIDEO (incl. CIC and RCV) 162.5 215.2 192.1 17.1 17.3 14.5 12.2 120.4 10.3 UNE MUSIQUE 3.2 5.1 23.5 0.8 1.3 4.7 0.5 0.9 2.9 TELESHOPPING 82.6 73.0 69.4 9.5 4.4 1.3 6.6 3.2 1.7 DIVERS 0.5 0.1 3.6 0.2 0.1 (0.1) 0.1 0.0 (0.6) Eurosport 291.2 284.4 294.3 32.2 30.2 25.9 8.1 8.0 3.5 Thematic channels 56.1 50.7 47.4 (17.0) (17.1) (10.9) (17.4) (10.6) (9.3) LCI 35.2 33.9 36.3 (9.7) (9.5) (6.9) (9.7) (9.5) (6.7) ODYSSEE 3.1 3.1 3.5 (0.2) (0.4) (0.3) (0.2) (0.4) (0.5) TF6 6.8 5.9 4.4 1.0 (0.1) (2.8) 1.0 (0.2) (3.0) TV BREIZH 5.6 4.2 – (5.9) (6.1) – (4.2) (2.7) (1.2) TF1 DIGITAL – – – (0.7) (0.8) (1.4) (2.4) 2.6 1.8 TFOU 0.6 0.4 – (1.0) (0.6) – (1.0) (0.6) – SERIE CLUB 3.4 3.2 3.2 0.7 0.4 0.5 0.5 0.2 0.3 HISTOIRE 1.4 – – (1.2) – – (1.4) – – Interactive division 47.8 26.0 11.0 2.5 (1.2) (8.9) 2.6 (1.1) (9.1) Production 39.4 59.9 56.0 (6.1) (13.0) (0.9) (14.4) (9.0) (1.0)
Audiovisual rights 78.6 66.9 85.0 (0.6) (0.9) (2.8) 1.4 (7.0) (6.7) of Directors Board TPS 380.1 353.8 289.8 1.3 2.8 (13.8) (3.4) (6.4) (21.2) Miscellaneous 20.4 13.7 2.3 (0.7) (0.2) 0.1 (6.0) 0.1 0.0 METRO ––––––(0.9) – – VISIOWAVE 20.4 13.7 2.3 (0.7) (0.2) 0.1 (1.0) 0.1 – PRIMA TV ––––––(1.6) – – EUROPA TV ––––––(2.5) – – TOTAL 2,861.5 2,768.7 2,655.3 398.8 333.9 293.4 220.1 191.5 155.2
1.1.6 Role of TF1 vis-à-vis its subsidiaries The common services agreement entered into between TF1 and its subsidiaries, described in the special report of the TF1’s role is to define, upstream, the prime strategic directions Statutory Auditors, concerns: of the group. It acts as stimulator for the various entities, giving priority to the search for synergies and harmonised proce- • the permanent availability to subsidiaries of specific services dures. supplied (management, legal and finance, internal communi- cation, statistical studies, management control, etc). These From a financial viewpoint, TF1 ensures that all its subsidiaries services are invoiced to every subsidiary by the application of are adequately capitalised. The TF1 group’s treasury depart- Financial statements key allocation criteria (employees and turnover). In 2004, the ment manages and consolidates the cash of all group sub- total invoicing amounted to €25.24 M. Services delivered on sidiaries, with the exception of TPS, TCM, Téléma, Série Club, demand are invoiced under market conditions. Visiowave and Quai Sud subsidiaries, which have their own cash and their own financing. • Other services supplied (TPS: financing, Eurosport: long term loan) are detailed in the Statutory Auditors’ special report. Since 2003, the TPS financing needs are handled by the share- holders’ current accounts (M6 and TF1). Legal informations
Accounts 2004 49 Board of Directors
Directors’ report
The common services agreement entered into between TF1 €155,794,174.71 and the profit of €29,514,770.94, brought and Bouygues concerns: forward from the previous financial year, we ask that you agree • the permanent availability to TF1 of specific services supplied to the following appropriation and distribution proposed by the by Bouygues (human resources activities, finance, informa- Board of Directors: tion technology, communication, social development, etc.). •Distribution of a dividend of €139,138,823.85 These services are invoiced to TF1 by the application of key (i.e. a net dividend of €0.65 per share allocation criteria (employees, long term capital and turnover). with a nominal value of €0.2) € In 2004, the total invoicing amounted to 5.16 M. Services • Appropriation as balance carried forward €46,170,121.80 delivered on demand are invoiced under market conditions. In compliance with the dividend tax reform under Article 93 of • Other services supplied (management of share capital, air the 2004 Rectifying Finance Act relating to income distributed transport services and agreements on credit lines with with effect from January 1, 2005, and with the provisions of Bouygues Relais) are detailed in the Statutory Auditors’ spe- Article 243 bis of the French General Tax Code, the entire div- cial report. idend distributed is available for the 50% allowance provided for in paragraph 2, section 3 of Article 158 of the General Tax 1.2 The TF1 parent company Code. Only natural persons domiciled for tax purposes in France qualify for this tax relief. In 2004, TF1 SA revenue amounted to €1,572.1 M, up 6.7%, split between advertising operations (€1,559.2 M) and miscel- The dividend will become payable on May 2, 2005. laneous revenue (€12.9 M). Operating income was €357.8 M, We hereby seek your authorisation to appropriate as retained up 12.4%. Net profit for the year stood at €155.8 M, up earnings the dividends related to TF1 shares held as treasury 53.2%. shares, as provided for in Article L. 225-210 of French Com- mercial Law (Code de commerce). Distribution and allocation of profits We remind you that, in the last three financial years, dividends by Télévision Française 1 paid for the 2001, 2002 and 2003 financial years were respec- In the resolutions that we are submitting for your approval, we tively €0.65, €0.65 and €0.65 net per share with a nominal are seeking your approval of the company and consolidated value of €0.2; depending on the situation of the beneficiary, the accounts for financial year 2004. In view of the distributable corresponding tax credits on the basis of a 50% rate were profits of €185,308,945.65, including the net profit of respectively €0.325, €0.325 and €0.325.
FIVE YEAR FINANCIAL RECORD 2000 2001 2002 2003 2004 I - Share capital at the end of the accounting period (in €) a) Share capital 42,236,632 42,399,216 42,810,116 43,030,830 42,951,946 b) Number of shares issued 211,183,160 1 211,996,079 214,050,579 215,154,149 214,759,729 c) Number of bonds convertible into shares II - Profit and loss account (in €) a) Turnover (excluding VAT) 1,491,806,305 1,431,613,565 1,435,159,747 1,473,209,669 1,572,077,137 b) Profit before tax, profit sharing, depreciation, amortisation and provisions 596,567,739 442,366,777 308,600,140 350,491,202 388,424,004 c) Corporate income tax 150,087,760 126,152,134 86,651,600 102,216,908 130,525,658 d) Employees profit sharing 13,511,247 11,592,039 8,650,777 10,395,547 12,885,824 e) Profit after income tax, profit sharing, depreciation, amortisation and provisions 358,132,161 276,227,636 198,022,521 101,673,966 155,794,175 f) Total dividends 137,269,054 137,797,451 138,303,875 139,021,195 139,593,824 2 III - Earnings per share (in €) a) Net profit before depreciation, amortisation and provisions 2.05 1.44 1.00 1.09 1.14 b) Net profit after depreciation, amortisation and provisions 1.70 1.30 0.93 0.47 0.73 c) Dividend per share 0.65 0.65 0.65 0.65 0.65 2 IV - Employees a) Number of employees 1,299 1,330 1,383 1,436 1,485 b) Total payroll costs in € 97,677,913 98,448,241 98,927,602 96,459,545 101,314,664 c) Total of employee benefit costs in € 43,173,430 43,930,772 43,279,320 46,200,725 48,465,021
1 After stock split 1 for 10 June 21, 2000. 2 Submitted for approval at the general meeting.
50 •t strategy drivenbyanumberofobjectives: strategy pursuedbytheGroup sincetheendof1990’s, a r The TF1Group’s successeswithinachangingaudiovisualenvi- 1.3 2005outlook Accounts 2004 •t •t 3.9%. same time,TF1channelprogramming costsshouldriseby re market”, iebetween3%to4%,andTF1Group consolidated market, TF1channeladvertisingrevenue shouldgrow “inthe Finally, takingintoaccountalowvisibilityofthe advertising growth. bution, whichare settoexperienceanotheryearofprofitable namely video,home-shoppingandbroadcasting rightsdistri- The TF1Group willalsogrow itsothersectorsofactivityfurther, • •A • • • The pursuitoftheseambitionsin2005willentailthefollowing: onment augurwellforthefuture. Theyalsovalidatethe France; scribers. guages andreceived bymore than10millionEuropean sub- the newEurosport 2channel,already broadcast infourlan- launched, hascontinuedwiththeroll-out inJanuary2005of Europe, whereSouthern Sportitaliahasbeensuccessfully Eurosport’s Europe and developmentinbothEastern form operator, withinreach ofmosttheFrench population; These newdistributionchannelswillbringTPS,amulti-plat- channel, istobedistributedontheterrestrial digitalnetwork. high-speed telephonelines(ADSL),TPSStar, TPS’s premium March 2005, followedbyLCI,Eurosport FranceandTF6; TF1 istobedistributedontheterrestrial digitalnetworkfrom launched inthefirstquarterof2005; bining Odyssée,Histoire andUshuaïaTV, isplanned,tobe available channels.Inparticular, a“Discovery”entitycom- Our thematicoffering willbebolstered intermsofcontentand expectations; gramming willaimtomeetaudiences’andadvertisers’ TF1’s general-interest, family-orientedandevents-basedpro- channel. venue shouldincrease byapproximately 3%to5%.Atthe o remain theleaderindevelopmentofprogrammes in o continuetodevelopprogramme andservicedistribution; o consolidateEurosport astheleadingpan-European fter theexcellentstartmadedistributingTPS’s offering via • by thefollowingaccountingadjustments: •M •F announcement oftheH12004results: announced tothemarketatanalysts’meetingfollowing standards are summarisedbelow. Apreliminary versionwas opening balancesheetatJanuary1,2004,basedonIFRS December 31,2003,onthebasisofFrench GAAPandthe The maindifferences betweenthebalancesheetasat Financial Statements). IFRS basis(seenote2.2.2.intheNotestoConsolidated French accounting practicethusfacilitatingcomparisononan also berestated according toIFRSstandards andinlinewith loss accountandbalancesheetsinceJanuary1st,2004will apply inthetransitionyearof2004.However, TF1’s profit and accounting standards. French accountingstandards willstill Starting onJanuary1,2005,TF1willtherefore adoptIFRS Board (IASB). AccountingStandardstandards issuedbytheInternational financial yearsfrom January1,2005,applyingtheaccounting member statesmustpresent theirconsolidatedaccountsfor 2003, companieslistedonaregulated marketofonethe lished intheEuropean Union’s ofOctober13, Official Journal In applicationoftheEuropean regulation no.1725/2003pub- 1.4 Transition toIFRSstandards (4) Mostofthe (3) Balancesheetpresentation onthebasisof recurring/non-recurring items(IAS1). in thenotestoConsolidatedFinancial Statements). also reclassified according to French standards from January1,2004(see2.2.2. (2) Reclassificationofprogrammes notready forbroadcasting (IAS38).Thisitem (1) Businessgoodwillreclassified asgoodwill (IAS38). urn rvsos6. 69.2 10.6 (8.5) 69.2 (3) 72.7 626.0 1.5 62.1 (80.2) 634.5 1.4 22.7 T (0.1) F 102.9 Other currentliabilities Current provisions T (1) Deferred tax (2)and(3) (180.6) F (2) Non-current provisions 0.0 48.0 761.6 T 311.7 Minority interest a (1) 876.5 48.0 (192.4) 492.3 185.1 Shareholders’ funds LIABILITIES 501.0 114.9 185.1 T (763.8) F 693.4 Marketable securitiesandcash 131.1 Other currentassets T 894.9 Programmes andfilmrights Other non-currentassets F T Goodwill Intangible fixedassets ASSETS SIMPLIFIED (in eurosmillion) Restatement ofhead office item(netofdeferred tax)(IAS16) aeceios991869(22 (2) (82.2) 836.9 (4) 919.1 21.4 (2) 887.5 866.1 rade creditors 219.5 841.1 otal shareholders’funds 621.6 32.0 229.5 197.5 rade debtors angible fixedassets tllaiiis32303134(96 (2) (59.6) 3,153.4 3,213.0 (2) otal liabilities (59.6) 3,153.4 3,213.0 otal assets nnilisrmns(iblte)1. 11.4 (1.3) 11.4 627.0 628.3 inancial instruments(liabilities) 5.1 inancial creditors 5.1 11.0 24.3 13.3 inancial instruments(assets) inancial assets tiual otegop86286119.9 886.1 866.2 ttributable tothegroup inancial instruments (IAS39) iscellaneous € 21.4 Mincrease inconsolidatedshareholders’ fundsisexplained 11.301.01. 31.12.03 FRENCH IFRS CHANGE ON THE MAIN ONTHE CHANGE IFRS FRENCH APSADRSIMPACTS STANDARDS GAAP 04 COMMENTS € € € 20.7 M (0.1) M 0.8 M 51
Legal informations Financial statements Board of Directors Board of Directors
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The consolidated accounts for the periods ending March 31, Marketing research and development June 30 and September 30, 2004 restated to IFRS standards The advertising and broadcasting marketing departments carry are currently under examination by our auditors, while the con- out behavioural studies, research into new viewer indices (joint solidated accounts for the year to December 31, 2004, are in viewing), processing and analysis of audience statistics and the process of being drawn up. sociological analyses. The main effects of restating net income for the year to December 31, 2004 for IFRS standards are: Programme innovation • Entries for straight-line amortisation of goodwill reversed in the group’s books; TF1 Group activity also includes significant creation and inno- •Financial instrument assets and liabilities shown at fair value; vation in terms of entertainment programmes, TV dramas and • Expenses for stock-option plans covered by the IFRS 2 production of films whose results are difficult to forecast. standard booked. This new, broader definition justifies an annual research and € These restatements will not significantly impact the group’s net development budget of around 20 M. income for the year ended December 31, 2004. TF1 is due to release its first set of accounts to IFRS standards 2 Human resources on June 20, 2005 after the close of the 1st quarter of 2005. The group will at the same time also release the full set of 2004 and environment update accounts to IFRS standards (1st quarter, 1st half, 9 months and 12 months 2004). 2.1 Human resources
1.5 Events since the financial year-end Workforce: Statistics for the whole TF1 Group No significant event has occurred since the close of the finan- cial year. Group TF1’s workforce increased by 5% in 2004 (figures at December 31). The breakdown is as follows:
1.6 Research and Development costs Permanent staff Research and Development costs of the TF1 Group are not EMPLOYEES SUPERVISORY STAFF MANAGERS JOURNALISTS MOBILE STAFF TOTAL significant and represent an annual charge of approximately 74 775 2,440 563 15 3,867* €4.5 M in 2004. TF1 has redefined more broadly its research and development activity. It can be broken down into three key * Including 116 people working abroad + 6 employees of Eurosport media. N.B. These figures differ from those included in the notes to the consolidated themes: accounts, which give only the workforce of companies consolidated by the group. New technologies Fixed-term staff • at TF1, within the Internal Technologies and Resources Department: research into new technologies (digital broad- Number of staff on fixed-term contracts 290 casting, portability of reporting tools, networks, information Number of staff with a qualification contract 45 exchange, image processing,…) and new associated services Number of staff with an apprenticeship contract 35 (interactivity, VOD, transfer of TF1 content to mobile phones, games consoles,…) The TF1 Group continued with its policy of upgrading tempo- •at TPS: work on the following themes: high definition, televi- rary workers to permanent staff status, which helps to explain sion on mobile phones, ADSL, MPEG4, home-networking. the low percentage of fixed-term staff (12.3% vs. 13.6% in •at Visiowave: this 80% TF1-owned company has developed 2003). a very powerful, promising video compression technology that could constitute the base for the future MPEG4 standard.
52 porary workersaccountedfor2/3 of thegroup’s hiringpolicyoverthepastyear. Moreover, tem- overtime compared with2003.Thedeclineisalsoareflection 2003 continuedin2004.Thetablebelowindicates5%less than forpermanentstaff: more favourable systemforcalculatingtheirovertimehours The noticeabledrop in Hiring anddepartures in2004 as follows: r The breakdown atgroup levelofequivalentfull-timestaff rep- department. condition thatitdoesnotaffect thesmoothrunningof whentheytake theirholidays,ontheone tiative concerning work time”agreements. Theseallowemployeestotaketheini- Therefore, allTF1Group by“reduced companiesare governed r time” daysperannum,whileexecutivesare notaffected by a fixednumberofdaysannually, have12or13“reduced work “reduced worktime”daysperannum.Managerial staff, with 14 Non-managerial staff work37hours/weekandhave –andnon-permanentstaff). trative staff, journalists production, technicalandadminis- permanentstaff – cerning different staff categoriesbasedonstatus(agreements con- the have beenconcludedinallgroup companiesandgovern Agreements ontheorganisationandreduction ofworktime Organisation ofworktime workforce. equivalent atonly41.84,i.e.,1%ofthegroup’s permanent workers) in2004stillrepresented averylowfull-timeworker Recourse bytheTF1Group tooutsidelabour(temporary Accounts 2004 esented bytemporaryworkersoverthe12-monthperiodwas educed worktime. ubro eudnis36 89 2 534 465 departures Number ofnegotiated Number ofredundancies Number ofretirementdepartures Number ofstaffhiredonnon-fixed-termcontracts Number ofstaffhiredonfixed-termcontracts EPRR TF RELNE IE-E PRODUCERS FIXED-FEE FREE-LANCE TEMPORARY STAFF 5. 14 5.836.16 154.48 81.42 352.4 UBRO OR AMOUNT NUMBER OFHOURS 36,431 ORAIT CONTRACTWORKERS JOURNALISTS overtime hours rds of overtimethankstoa (at 125%and150%)in € 939,752 Annual numberofworkinghours/days plan. ment. Thesemeasures are notpartofthecompany’s training sible touse“reduced worktime”daysforpersonaldevelop- employment, theopportunityofacquiringnewskills,itispos- sonal developmentandwithoutanydirect connectiontotheir To OF TF1GROUPCOMPANIES’ WORKTIME FOR THEORGANISATION ANDREDUCTION SUMMARY OFTHEDIFFERENTAGREEMENTS shareholders, representing 2.33%ofthecapital. 1,384 employeesorformerbecamecompany capital wasoffered toemployees,onpreferential terms. As partofTF1’s privatisation in1987,10%ofthecompany’s savings schemes. increase andmethods/possibilitiesforcustomisedemployee combining ageneralincrease withaperformance-related Remuneration isreviewed everyyearwithmeasures potentially Remuneration part time. At December31,2004,170non-fixed-termemployeesworked TF1 Group: absenteeismandreasons: * AdministrativeandTechnical Production staff. aaeswrigi yl from1,584to1,591hours from1,569to1,576hours ANNUALNUMBEROF WORKING HOURS/DAYS FOR ATP STAFF* workingincycle Managers staff) andSupervisory (Employees number ofhoursworkingincycle staffwithaconstant Non-managerial STATUS ubro bec asfrecpinllae3,529 606 unaffected 18,989 4.04 19,270 1,602 unaffected Number ofabsencedaysforexceptionalleave leave orpaternity Number ofabsencedaysformaternity accidents Number ofabsencedaysduetowork/travel-related Number ofabsencedaysduetosickness ANNUALNUMBEROF WORKING DAYS FOR JOURNALISTS Number ofunpaidabsencedays T ofabsenteeism(asa%staff) Rate from208to215days Executives Journalists withafixednumberofdaysannually STATUS from213to216days Executives withafixednumberofdaysannually Managers tldy fasne43,996 otal daysofabsence
encourage measures enablingallstaff, aspartoftheirper- 53
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In 1988, TF1 introduced a company savings plan for all the HIRING group’s staff. Women 179 There are currently three joint investment funds. Men 286 •At December 31, 2004, 2,647 employees belonged to the Total 465 company savings plan, i.e., 89% of permanent staff of com- PROMOTIONS* panies participating in the group savings plan. The employer top up paid by TF1 and its subsidiaries (€3,450 per year and Women 205 per employee, i.e. the maximum allowed by the law) repre- Men 235 sents €7.3 M. Total 440 •In 1999 and 2001, TF1 embarked on a capital increase * With or without change in professional category. reserved for employees as part of two new company NUMBER OF TRAINEE STAFF IN 2004* schemes. 1,628 employees or 75.3% of the workforce joined the first scheme and 1,944 the second, that is 53.7% of Women 1,035 group employees. To be noted: the performance index of TF1 Men 1,178 Avenir 1, which fell due on October 29, 2004, is 235.90%. Total 2,213 TF1 Group employees were also able to subscribe to the capi- * Trainees in professional training. tal increase reserved for staff of the Bouygues group at the time NUMBER OF TRAINEESHIP HOURS IN 2004 of Bouygues’ capital increase in 1999, 2000, 2001 and 2002. Women 40,453 All employees have benefited from employee profit sharing Men 46,748 since 1989. In 2004, this amounted (for financial year 2003) to Total 87,201 €12 M, that is an average amount per employee of €2,749. Professional relations and collective bargaining TF1 Group: average monthly remuneration for non fixed- agreements term contracts by professional category in 2004 (in €) Nearly all TF1 Group companies have Staff Representative EMPLOYEES SUPERVISORY MANAGERS JOURNALISTS SALES REP. ALL CATEGORIES STAFF Committees, a Works Council, a Health & Safety Committee 2,000 2,883 4,972 5,292 2,921 4,510 and trade union representatives. The agreements reached by companies with staff representatives offer benefits in terms of In 2004, the annual percentage increase was 4.51% for the welfare protection, severance pay, holidays, trade union rights TF1 Group. This figure corresponds to the difference in the … which go well beyond labour law guarantees. remuneration of employees present both on December 31, 2003 and December 31, 2004. The trade union environment at TF1 Group in 2004 (titular members) Summary of the group’s social security contributions
in 2004 WORKS STAFF HSC BOARD OF COUNCIL REPRESEN- DIRECTORS EMPLOYEE CONTRIBUTIONS EMPLOYER CONTRIBUTIONS TOTAL TATIVES TOTAL €52.6 M €106.8 M €159.4 M CFTC 21 24 29 24 98 CGC 01001 Professional equality between men and women CFTC/FO/CGC 580215 CGT/SNJ-CGT 12003 2004 statistics for the whole of the TF1 group: CFDT RadioTélé 345113 Independents 02002 AVERAGE MONTHLY GROSS STARTING SALARY* CFTC/FO 06006
SUPERVISORY STAFF MANAGERS Total 30 47 34 27 138 Women €2,080 €2,247 Number of meetings with staff representatives (WC+SR+HSC+BD) 348 Men €1,716 €2,328 Number of meetings with trade union representatives 62 * Employees of 18 to 26 years of age and with less than one year seniority. Number of collective agreements during the year under consideration 8
54 Health and safety conditions Among the other types of training offered, human relationship techniques again took pride of place in the training plan, with In 2004, TF1 placed particular emphasis on preventing occu- courses on “presentation techniques”, “meeting leadership”, pational risks and sought to heighten the awareness of each “communicating in a professional context”, “train the trainers” category of worker. and “negotiating practices”. Safety training (375 employees underwent safety training in Then there are the “professional skills” courses enabling staff to 2004) is aimed at the different staff categories. Fire prevention develop their specific expertise in fields as diverse as jour- training is given on a regular basis and evacuation exercises for nalism, management, law and marketing. the entire staff are mounted as and when required by existing regulations. Finally, language courses and theme days to discover the pro- fessions practised within the group were continued. The unified assessment of occupational risks was updated. The € document itemises the risks in each of the company’s working In 2004, a budget of 4.7 M was dedicated to training within units and the prevention measures to counteract these risks the group, i.e. 3.42% of total wage costs. (operating instructions, training). 2,213 TF1 Group employees received training during 2004. The medical department, comprising a company doctor and A total of 87,200 hours of training was dispensed in the three nurses, provides daily cover (in 2004 there were TF1 Group. Moreover, 30,123 hours of additional training was 6,987 nurse interventions and 3,305 employees examined by given to 84 TF1 Group trainees through sandwich courses and the doctor) but also carry out specific examinations of certain individual training leave. employees involved in hazardous occupations. In 2004, The group’s apprenticeship tax for 2004 amounted to €1.2 M. 900 employees were vaccinated and 157 first aid kits were pre- TF1 pursues an active graduate trainee recruitment policy. pared for employees leaving on reporting missions in high-risk Trainees represent an important source of new recruitment for regions. Furthermore, the medical department this year took TF1, which has established close partnerships with schools over the annual medical check-up for free-lance journalists and universities. In 2004, the group hired 982 trainees. of Directors Board working in the group, as the profession’s supervisory body has Special relationships exist with the following teaching estab- not opened up a medical centre offering routine check-ups. lishments: 2004 • Secondary School Diploma in Audiovisual Studies, Lycée Number of work accidents resulting in lost time 38 Jacques Prévert, Boulogne Number of fatal work/travel-related accidents 0 • Secondary School Diploma in Audiovisual Studies, Lycée Number of HSC meetings 56 René Cassin, Bayonne Staff with safety training 382 •Secondary School Diploma in Audiovisual Studies, Lycée de l’image et du son, Angoulême Professional training • IIIS: Institut International de l’Image et du Son, Trappes • Advanced Technical Diploma in Audiovisual Communications, The purpose of training is to ensure that staff have the requisite University of Paris (Sorbonne) high level of technical, personal and managerial skills to carry • Masters degree in Media Studies, ESCP/EAP, Paris out their responsibilities and to prepare staff for new positions. •ISEP: Institut Supérieur d’Electronique de Paris A major staff training drive aimed primarily at technicians was • INT: Institut National des Télécommunications (Management mounted ahead of the introduction of a digitised final produc- and Telecoms), Evry Financial statements tion room, new broadcasting technology and the design of the new “virtual” studios. Safety and IT technical training for IT staff continued to be pri- ority areas again in the past year. Management training has long been a priority, with courses for new managers and team leaders. New modules have been introduced this year, particularly in the area of conflict management. Legal informations
Accounts 2004 55 Board of Directors
Directors’ report
Employment and the integration The daily news programme, Actu Breizh, was launched in Sep- of handicapped workers tember 2002. The Nantes-based Ouest Info press agency, which already provides local correspondent reporting for TF1 For a number of years, TF1 has operated a policy in favour of and LCI, has been appointed to handle the outside news handicapped workers. This takes several forms: reporting. It has recruited an additional 10 television reporters • Employing handicapped workers, to supply the requirements of TV Breizh. TV Breizh itself has •Signing subcontracting agreements with sheltered work- recruited eight persons internally to work specifically on this shops. news programme. Number of handicapped workers 35 A new milestone was reached at the end of the second half of € Amount paid to sheltered workshops 211,122 2004. In October 2004, TV Breizh became a technical service provider, broadcasting Pink TV. In November 2004, TV Breizh Community work began the technical migration of the theme channels of TF1’s Each year, the TF1 involves itself in the community through Discovery unit, Odyssée and Histoire, to its new technical site. already existing sponsorships. In 2004, the TF1 Group spent This new broadcasting platform was designed jointly by TF1 more than €16 M (i.e., the equivalent of about 1% of its adver- Digital and the TF1 group’s Thematic Channels Technical tising revenue) on humanitarian, social or cultural operations. Department. It features shared digital technology and is jointly Thus, TF1 contributes in its own way towards promoting gen- managed by Paris and Lorient. This new site in Lorient took five 2 eral-interest initiatives on themes as varied as public health, months to build and represents an additional 300 m of new € citizenship and environmental protection. premises and an investment of 2.5 M. Designed to host up to six channels, it will broadcast the programmes produced by A scheme was launched in July 2004 to donate refurbished the theme channels and will also be responsible for their pre- equipment to associations. Most of the donations are made liminary verification and digitisation. It is also preparing for the through Jeveuxaider.com, which is responsible for selecting arrival of Ushuaïa TV due to be launched during 2005. and vetting recipient associations and ensuring that the equip- ment is used for its intended purpose. This simplifies the logis- By becoming a technical service provider for the other national tics aspects for TF1, enabling large batch sizes and a single channels, TV Breizh has consolidated its regional position and entry point. Between July and December 2004, 500 items of IT reaffirmed its regional roots. Today, this channel directly and hardware, 25 items of audiovisual broadcasting equipment and indirectly employs a little over 60 persons (36 TV Breizh 190 pieces of office furniture, reprographics equipment and employees, 10 Ouest Info journalists and 14 Objectif Ouest consumables were donated to 10 associations. Recipient technicians). associations in turn redistribute the IT hardware to a network French or foreign associations, particularly in Africa. Importance of sub-contracting Plastic bottle caps are collected on behalf of the “Un Bouchon The TF1 Group makes almost no use of sub-contracting. How- = Un Sourire” association ever, it does entrust third parties with some services such as security, building maintenance, catering, etc. Within the frame- Example of territorial impact of the group’s activity work of these different partnerships, the TF1 Group asks each of its service providers (through a contract) to adhere to the TV Breizh, the Breton channel broadcast on cable and satellite, social and environmental regulations, etc. in force. Since most was launched in September 2000. Setting up an operation of our partners are French, the risk of these regulations not 500 km from Paris was a challenge. Although the region was being adhered to is very small. not lacking in production facilities, they were privately run and technical facilities were rare. The arrival on the scene of TV Other elements on social benefits or health and safety condi- Breizh has seen the development of the audiovisual sector in tions within TF1 Group will be find in chapters “advances in Brittany, with several production companies established locally terms of social benefits”, “Health, safety and hygiene” in the acting as suppliers to TV Breizh, particularly in magazine pro- section “TF1 and society”. grammes and fiction dubbing.
56 the chapter“theenvironment” inthesection“TF1andsociety”. Other elementsonenvironment withinTF1Group willbefindin group’s routine business. ment. Constructionwasteisnotaby-product oftheTF1 100 tonsto383in2004mainlydueoffice refurbish- as in2003,i.e.,around 1,200tons.Skipwasterose by and batteries,represented practicallythesameweightin2004 Miscellaneous waste,wastepaper, salvagedneonlightbulbs W totalled 705tonsin2004(+100tonnesvs.2003). The consumptionofsteam,alsousedtoheatsomebuildings, 2003 andrepresented around 65,000m system, washrooms andkitchens)waslowerin2004than W duction unitatTF1. lation ofanextracontrol room atEurosport andnewfinalpro- increase isexplainedbythemovetonewpremises, theinstal- and represented around 39.5millionkWh(+2.5MKWh).The Electricity consumptionincreased between2003and2004 for itsbroadcasting business(studiolighting,finalproduction). activity, theairconditioningsystemsinvariousbuildingsand The TF1Group requires electricityforthecompany’s everyday (Electricity/Water/Gas/Steam) Controlling energyconsumption four yearsrunning. The amountofwastegeneratedbytheTF1Group hasfallenfor guarding theenvironment, particularlythrough wasterecycling. less, thegroup isactivelyinvolvedinprotecting andsafe- environment andposesnoparticularindustrialrisk.Neverthe- By itsverynature, TF1’s activityhasalimitedimpactonthe 2.2 Environment Accounts 2004 It amountedtoaround 49,700m ings andconsumptionistherefore dependentontheweather. Gas consumptionincreased. Gasisusedtoheatsomebuild- lowest levelofconsumptioninthepastfouryears. ater consumption(usedessentiallyintheairconditioning aste 3 in 2004(+4,000m 3 in 2004,i.e.,the 3 ). losses incaseofrisk. and therapidresumption ofactivity, thusminimisingoperating crisis managementteamtoensure vigilance,prevention ofrisks sales, accounts,treasury, payroll…) andtheformationofa (information systems,channel-related services,advertising Added tothisisthesecurityofcompany’s vitalfunctions sents anannualoperatingcostaround security ofthesekeyprocesses isregularly testedandrepre- duction andbroadcasting ofthetelevisionnewsforLCI.The tion andsellingofadvertisingslotsfortheTF1channel,pro- 1o four processes: programme broadcasting, production ofthe has beenformedtooperateanemergencysiteforthefollowing services, humanresources, communicationsandsecuritystaff A multi-disciplinaryteamoftechnicalandITspecialists,general site. securing themonaprotected external guaranteeing “servicecontinuity”foritskeyprocesses by this reason, thegroup hasreinforced theprocedures aimedat various buildingswouldhaveamajorimpactonbusiness.For Any exceptionaleventpreventing accesstotheTF1group’s channels. grammes fortheTF1channelandgroup’s thematic tion, notablytoensure uninterruptedbroadcasting ofitspro- TF1 Group hasinstitutedapro-active policyofriskidentifica- 3 Riskfactors Broadcasting of 3.1 Industrialandenvironmental risks of alternative offerings. of alternative signal andthere isnosubstitutefortheTDFnetworkinform TDF istheonlynationaloperatorbroadcasting thetelevision lite network. (and allthenationalchannels)jointlyviaitsfree-to-air andsatel- with theTF1signal)andbroadcasting ofprogrammes forTF1 ensures thetransmission(providing broadcasting sites TDF • by cable(theoperators“must-carryanalogue”obliga- • by satellite,namelyAtlanticBird 3forunscrambledbroad- • by radiowaves,viathe112maintransmissionsites and TF1’s programmes are currently broadcast toFrench homes: in signaltransmission tion). casts andHotbird forbroadcasting onTPSand; 3,161 TDFre-transmission sites; ’clock and8o’clocktelevisionnewsprogrammes, produc- TF1 programmes –Riskofinterruption € 2 M. 57
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TF1 is therefore dependent on TDF for the broadcasting of its With the TPS offering in France now distributed via ADSL over signal and cannot call on other transmission methods if the TDF France Telecom phone lines, TPS and France Télécom have network breaks down. set up the infrastructure (main and back-up networks) needed TDF provides secure transmission to its transmitters through a for continuously broadcasting the first 20 channels on a secure dual transmission system (free-to-air and satellite). Therefore, if basis. France Télécom is contractually liable to pay penalties to a radio wave feeding a transmitter fails, it is possible to switch TPS for any breaks in transmission. The size of penalty pay- to the satellite signal (and vice versa). ments depends on the viewing hour during which the incident occurs. Broadcasting sites are largely secure as a result of the many broadcasting transmitters. However, incidents do occur with Eurosport has an entity in the UK that secures the broad- the antenna system (antenna, wave guides and frequency casting of its programmes. multiplexers), while the electricity supply can escape TDF’s notice (responsibility of EDF). 3.2 Regulation-related risks Power cuts have therefore occurred in the broadcasting of our The legal regulation to which TF1 is subject is described in the signal for either technical reasons (defective transmitters/elec- section “legal environment”. tricity supply) or reasons internal to TDF (mainly strikes). The TF1 is an audiovisual communications service subject to autho- penalties provided for in the contract are in no way commen- risation. The company’s initial authorisation to use frequencies surate with TF1’s potential operating losses during these inci- for a duration of 10 years starting April 4, 1987 (Law of Sep- dents (loss of audience, impact on TF1’s image, advertisers tember 30, 1986) expired in 1997. Based on decision no. 96- requesting reductions, loss of merchandising rights…). 614 of September 17, 1996, the channel received a first The loss that TF1 could suffer if a transmitter fails is obviously five-year renewal of this authorisation, without a bid for candi- proportional to the number of television viewers served by the datures, effective starting April 16, 1997. defective transmitter. A failure in the Paris region (10 million The TF1 channel’s authorisation to transmit was automatically viewers) could have major economic repercussions. This is renewed for the years 2002 to 2007 by a decision of the CSA why TF1 has negotiated a deal to ensure that TDF’s services of November 20, 2001. Under the provisions of Article 82 of the intervene very quickly in the event of a failure. To date, no trans- modified Law of September 30, 1986, this authorisation could mitter failures have exceeded four hours. be automatically extended to 2012 on the basis of the “simul- TPS’ primary activity is the provision of a programme offering cast” broadcast of the digital terrestrial free-to-air channel. The broadcast by satellite on Eutelsat’s Hot Bird 13 position. CSA, by a decision dated June 10, 2003, modified the TF1 TPS’ main programmes are broadcast on two of the five satel- authorisation and its convention to integrate the specifications lites in the orbital position and occupy six frequencies, whereas relative to digital terrestrial television broadcast of the the position has 100. programme. The risk of a unit disruption is limited to one satellite, since the TF1 Group must also respect a certain number of general obli- satellites are located several tens of kilometres from each other gations relative to broadcasting and production investment. and cannot, therefore, be disrupted simultaneously. TPS must Any extension of these constraints could have a negative therefore be prepared for a failure on half its capacity. The solu- impact on the company’s profitability. tions are a better use of satellite output. No further regulations have been adopted since the beginning In 2001, TPS experienced an incident on the HB5 satellite of 2005 that could have a significant impact on TF1 Group. lasting several hours. HB5 has now been abandoned in favour of HB6. The measures described above were immediately 3.3 Customer risk implemented and proved successful. Eutelsat was able to verify TPS’ ability to react, particularly as TPS can remotely guide the TF1 Publicité automatically monitors the financial health of configuration for the list of channels and frequencies received advertisers wishing to invest in the TF1 group’s channels that by its subscribers. are served by TF1 Publicité. The risk of non-payment by TF1 Publicité’s advertisers is historically less than 0.1% of total annual revenue. Eurosport automatically monitors the financial health of satellite or cable operators on which the channel is distributed. The risk of non-payment by distributors is historically low.
58 held. TF1 isnotexposedtotheriskoffluctuatingpricesforshares Share-related risks currency. marily forthepurchase ofbroadcasting rightspaidinforeign options) toprotect itselffrom exchangeratefluctuations,pri- (forward currency purchases andsalespurchase of In 2004,thegroup usedexchangeratehedginginstruments In 2004,TF1undertooknointerest ratehedging. Interest rateandexchangehedging dated accounts. rates, liquidity, shares) isprovided inthenotestoconsoli- A detailedanalysisofmarketrisks(interest rates,exchange 3.4 Marketrisks group’s profitability. group’s othersubsidiarieswhichcoulddurablyaffect the There are noothersignificantsinglecustomerrisksinthe to protect themselvesagainstcustomerbaddebts. andTF1EntreprisesTF1 Vidéo havetakenoutcredit insurance • The group hastwomaintypesofinsurance: ance companies. Group toobtaininsurancecontractswiththesefirstrateinsur- The existenceofthisprevention planmakesiteasierforTF1 Chubb, Gan,Allianz,Generali,… through brokers dealingwithmajorcompaniessuchasZurich, tion plan.Thegroup’s insurancepoliciesare thennegotiated established. Thisunitimplementsaregularly updatedpreven- policy ofriskidentificationandacorresponding unithasbeen section onriskfactors,thegroup hasinstitutedapro-active the As indicatedintheintroduction tochapter3,concerning 3.5 Insurancecover Accounts 2004 The coverappliesparticularlyincasesinvolvingterrorist acts. property andtheoperatinglossesresulting from thisdamage. policy provides coveragainstmaterialdamagecausedtoTF1 France andworldwide,everywhere thatTF1operates.The insurance coverforTF1,itsexistingorfuture subsidiaries,in € Non-life insurance(cover: 900 K,deductibleofaround € 347.8 M,premium ofsome € 25 K).Thispolicyprovides TF1. No casecurrently inprogress presents amajorfinancialriskfor Risks associatedwithcompetitionrights TF1. No casecurrently inprogress presents amajorfinancialriskfor (privacy ofanindividual’s privatelife,libel) Risks associatedwiththerightsofindividuals these disputes. description inthenotesowingtoconfidentialnature of notes totheconsolidatedaccounts.TF1limitsitself Provision chargesinrespect oflitigationare detailedinthe servatively evaluated. fully provisioned intheaccounts.Provision amountsare con- litigation ofwhichthecompanyorgroup isaware hasbeen or group’s revenues, income,financialsituationorassets.Any pany’s knowledge,likelytosignificantlyimpactthecompany’s No individualdisputesorlitigationare, tothegroup’s orcom- provisioning. TF1’s interests. Where necessary, litigationgivesrisetorisk counselanalysesindividualdisputeslikelytoharm External 3.6 Litigation All TF1Group insurancecontractshavebeenrenewed. capacity. committed intheirexecutive,supervisoryormanagement and employeeswhowouldbeliableforanyprofessional error In addition,theinsuranceprovides coverfordefactomanagers or indirectly). which TF1hasatleast50%ofthevotingrightseitherdirectly sidiary companiesorassociate(companiesin sentatives, itsrepresentatives ontheBoard ofDirectors ofsub- officers since1997.Theinsured are TF1’s tradeunionrepre- TF1 hasalsosubscribedtoaliabilityinsuranceforcompany framework ofOperating,Product andProfessional Liability. Cover isestablishedforinjurycausedtothird partieswithinthe Public liabilityinsurance (cover:around • subsidiaries iscalledintoquestion. quences ifthepublicliabilityofTF1anditsexistingorfuture the nature ofthedamage).Thispolicycoversconse- some € 130 K,deductibleof € 3 Kto € € 80 Kdependingon 30.5 M,premium of 59
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4 Subsidiaries and shareholdings TRANSPORT AUTOMATIQUE DE PRODUITS AUDIOVISUELS SPECIAUX 9 – TAPAS 9 4.1 New incorporations Incorporated on December 30, 2004, the simplified joint stock company TAPAS 9, with a capital of €40,000, divided into TRANSPORT AUTOMATIQUE DE PRODUITS AUDIOVISUELS 40,000 shares with a nominal value of €1 each, of which TF1 SPECIAUX 5 – TAPAS 5 holds 100%. Incorporated on July 29, 2004, the simplified joint stock Its aim is to create and exploit all television content, in French € company TAPAS 5, with a capital of 40,000, divided into or foreign languages, on every support, especially terrestrial, € 40,000 shares with a nominal value of 1 each, of which TF1 cable, satellite or telecommunication networks, using all known holds 100%. or not yet known technologies and standards. Its aim is to create and exploit all television content, in French TRANSPORT AUTOMATIQUE DE PRODUITS AUDIOVISUELS or foreign languages, on every support, especially terrestrial, SPECIAUX 10 – TAPAS 10 cable, satellite or telecommunication networks, using all known Incorporated on December 30, 2004, the simplified joint stock or not yet known technologies and standards. company TAPAS 10, with a capital of €40,000, divided into TRANSPORT AUTOMATIQUE DE PRODUITS AUDIOVISUELS 40,000 shares with a nominal value of €1 each, of which TF1 SPECIAUX 6 – TAPAS 6 holds 100%. Incorporated on July 29, 2004, the simplified joint stock Its aim is to create and exploit all television content, in French € company TAPAS 6, with a capital of 40,000, divided into or foreign languages, on every support, especially terrestrial, € 40,000 shares with a nominal value of 1 each, of which TF1 cable, satellite or telecommunication networks, using all known holds 100%. or not yet known technologies and standards. Its aim is to create and exploit all television content, in French SOCIETE PANEUROPEENNE D’EDITION ET D’EXPLOITATION or foreign languages, on every support, especially terrestrial, DE DOCUMENTAIRES – TRADING NAME: USHUAÏA TV cable, satellite or telecommunication networks, using all known Incorporated on December 30, 2004, the limited partnership or not yet known technologies and standards. USHUAIA TV, with a capital of €10,000, divided into TRANSPORT AUTOMATIQUE DE PRODUITS AUDIOVISUELS 10,000 shares with a nominal value of €1 each, in which TF1 SPECIAUX 7 – TAPAS 7 holds a 99% stake and SYALIS 1%. Incorporated on July 29, 2004, the simplified joint stock Its aim is to hold USHUAIA TV, the thematic channel on nature € company TAPAS 7, with a capital of 40,000, divided into and discovery, exclusively distributed by TPS. 40,000 shares with a nominal value of €1 each, of which TF1 holds 100%. 4.2 Subscriptions and shareholdings Its aim is to create and exploit all television content, in French or foreign languages, on every support, especially terrestrial, TV BREIZH cable, satellite or telecommunication networks, using all known On January 28, 2004, TF1 purchased 40,500 shares from or not yet known technologies and standards. Artemis and F. Pinault, for the sum of €4,049,901. TRANSPORT AUTOMATIQUE DE PRODUITS AUDIOVISUELS On March 3, 2004, TF1 purchased 19,500 shares from News SPECIAUX 8 – TAPAS 8 International Limited, for the sum of €1,950,000. Incorporated on December 30, 2004, the simplified joint stock On April 15, 2004, TF1 purchased 9,000 shares from Sportfive, € company TAPAS 8, with a capital of 40,000, divided into for the sum of €900,000. 40,000 shares with a nominal value of €1 each, of which TF1 Following these purchases, TF1 holds 71.14% of the capital of holds 100%. TV BREIZH. Its aim is to create and exploit all television content, in French or foreign languages, on every support, especially terrestrial, cable, satellite or telecommunication networks, using all known or not yet known technologies and standards.
60 capital betweenshareholders remains unchanged. € and thenetpositionagainbecamepositivetoextentof As aresult, is theshare capitalofTF1International cial year. Theseentrieswere effective onNovember10,2004. account, towhichwasalsodebitedthelossfor2004finan- and applyingtheremaining balancetoablockedreserve negative balancebrought forward onprofit andlossaccount € injection of TF1 International’s capitalof undertaken aspartoftherationalisationcinemadivision, Following thedeficitwhicharose onthemergertransactions TF1 INTERNATIONAL r On July2,2004,TF1tookastakeinthecapitalofPINKTV, PINK TV to € charging thenegativebalanceonprofit andlossaccountof r incorporating increase wasmade,raisingthenominalvalueofshares by funds: Changes inShareholders’ of the issueatparof843,750shares eachwithanominalvalue Meeting ofDecember17,2004.Theincrease waseffected by € TF1 subscribedthewholeofcapitalincrease amountingto GROUPE GLEM(NOWRENAMEDGLEM) Accounts 2004 value of € epresenting 11.4%ofthecapital,forsum eduction, reducing thenominalvalueofshares (by 7M. 17 56.2 M.Thisreduction waseffected bychargingthe 22.9 M).Asaresult, theshare capitalof 13.5 M,whichwasdecidedbytheShareholders’ General 13,580,000 dividedinto848,750shares eachwithanominal € € 26.4 M,thenreduced to 16. Theshare capitalthusrose from € 16. € € 30 Manditsnominalvaluewasreduced by 3.8 Mofissuepremium, followedbyacapital € 37 Mwasincreased byacash € on June28,2004,acapital 3.4 M.Thebreakdown of € 22.5 Mwasraised € € 80,000 to 0.5 M. € 10.8 M, € 51 M TF1 PRODUCTION € 1,885 shares itheldinEUROPA TVforthesumof soldtoTF1allthe On October29,2004,EUROSPORT EUROPA TV TELESHOPPING atanetbookvalue(i.e. (i.e. (2,475) inthiscompanytoTELESHOPPINGatnetbookvalue On September6,2004,TF1soldalltheshares itowned TOP SHOPPING(FORMERLY TAPAS) 4.3 Disposals owned bythiscompany. sports andbroadcast duringprime-timesixdaysaweek,is Since thatdate,thechannelFIGHTTV, dedicatedtocombat 40,000 shares itheldinFIGHTTV, forthesumof allthe On November24,2004,TF1soldtoEUROSPORT FIGHT TV(FORMERLY TAPAS 4) took placeinDecemberatnetbookvalue. and GLEMare now100%subsidiariesofTF1.Thesechanges 107, ALMAPRODUCTIONS,TPP, YAGAN PRODUCTIONS holding company. To thisend,itssubsidiariesTAP, STUDIOS ture, TF1 PRODUCTIONhasceasedtobeanintermediate In order tosimplifytheadministrative,legalandfinancialstruc- PING. actions, TOPSHOPPINGisnowowned100%byTELESHOP- shares itheldinthecompany. Asaresult ofthesetwotrans- 25 22,031,000. € 39,600). Onthesamedate,SYALIS alsosoldto € 400) allthe € 40,000. 61
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5 Capital
OPERATION ISSUE PRICE PER SHARE NUMBER OF SHARES TOTAL SHARE CAPITAL NOMINAL PREMIUM ISSUED TOTAL AFTER INCREASE 24.07.87 Privatisation of TF1 FRF 10 0 0 21,000,000 FRF 210,000,000 29.10.99 Increase of employee capital FRF 10 FRF 969.21 118,316 21,118,316 FRF 211,183,160
OPERATION NOMINAL VALUE PER SHARE NUMBER OF SHARES TOTAL SHARE CAPITAL NOMINAL INCREASE ISSUED TOTAL 01.01.00 Conversion of capital to Euro a) Capital increase FRF 10 FRF 3.11914 0 21,118,316 FRF 277,054,144.17 b) Conversion €20 021,118,316 €42,236,632 20.06.00 Division of nominal value €0.2 0 0 211,183,160 €42,236,632
OPERATION ISSUE PRICE PER SHARE NUMBER OF SHARES TOTAL SHARE CAPITAL NOMINAL PREMIUM ISSUED TOTAL AFTER INCREASE 20/12.01 Increase of employee capital €0.2 €23.21 812,919 211,996,079 €42,399,216 Fr. 01.01.02 to 30.06.02 Exercise of stock options in plan no. 2 €0.2 €7.77 1,249,000 € certified 213,505,079 42,701,016 on 04.09.02 Exercise of stock options in plan no. 3 €0.2 €9.82 260,000 Fr. 01.07.02 Exercise of stock options to 31.12.02 in plan no. 2 €0.2 €7.77 275,500 214,050,579 €42,810,116 certified Exercise of stock options on 24.02.03 in plan no. 3 €0.2 €9.82 270,000 Fr. 01.01.03 Exercise of stock options to 31.12.03 in plan no. 2 €0.2 €7.77 242,070 215,154,149 €43,030,830 certified Exercise of stock options on 23.02.04 in plan no. 3 €0.2 €9.82 861,500 Fr. 01.01.04 Exercise of stock options to 30.11.04 in plan no. 2 €0.2 €7.77 263,430 215,573,679 €43,114,736 certified Exercise of stock options on 30.11.04 in plan no. 3 €0.2 €9.82 156,100
OPERATION AMOUNT OF CAPITAL CHANGES NUMBER OF SHARES TOTAL SHARE CAPITAL NOMINAL PREMIUM CANCELLED TOTAL AFTER REDUCTION 30.11.04 Cancellation of treasury shares €0.2 – 313,950 214,759,729 €42,951,946 Cancellation of shares bought by the company €0.2 – 500,000 15.02.05 Cancellation of shares bought by the company €0.2 – 700,000 214,059,729 €42,811,946
5.1 Amount/type of share Under the terms of these authorisations, TF1 acquired 500,000 shares between October 20 and November 25, 2004 There are no investment certificates, preference shares or at an average price of €23.89 per share for a total of €11.9 M shares with double voting rights. and 700,000 shares between January 11and February 14, 2005 at an average price of €25.05 per share for a total of 5.2 Market transactions €17.5 M.
Shareholders’ Meetings of April 20, 2004 and previous years 5.3 Share management gave the Board of Directors the authorisation to purchase the Company’s own shares up to a maximum of 10% of the share TF1, as issuing company, manages its own securities depart- capital at the date of instituting the share buy-back programme. ment and financial department. In particular, these authorisations enable the Board of Directors to purchase the Company’s shares in order to cancel them.
62 5.4 Shareholders To the best knowledge of the Board of Directors, the Company’s share ownership broke down as follows:
SITUATION AT 31 DECEMBER 2004 SITUATION AT 31 DECEMBER 2003 SITUATION AT 31 DECEMBER 2002 NO. OF SHARES % OF % OF VOTING NO. OF SHARES % OF % OF VOTING NO. OF SHARES % OF % OF VOTING CAPITAL RIGHTS CAPITAL RIGHTS CAPITAL RIGHTS Bouygues 89,017,073 41.5% 41.5% 88,458,329 41.1% 41.4% 88,457,409 41.3% 41.5% Société Générale 3,100,000 1.4% 1.5% 3,100,000 1.4% 1.4% 3,100,000 1.5% 1.5% Total core shareholders (1) 92,117,073 42.9% 43.0% 91,558,329 42.6% 42.8% 91,557,409 42.8% 43.0% Others France (2) (3) 75,985,606 35.4% 35.4% 63,574,975 29.5% 29.7% 53,823,520 25.1% 25.3% of which employees 7,138,603 3.3% 3.3% 7,666,847 3.6% 3.6% 7,481,214 3.5% 3.5% Treasury shares 251,537 0.1% 0.0% 1,275,387 0.6% 0.0% 1,275,387 0.6% 0.0% Europe (ex France) (3) 35,583,907 16.6% 16.6% 43,401,938 20.2% 20.3% 48,137,584 22.5% 22.6% Others (3) 10,821,606 5.0% 5.0% 15,343,520 7.1% 7.2% 19,256,679 9.0% 9.1% Total 214,759,729 100.0% 100.0% 215,154,149 100.0% 100.0% 214,050,579 100.0% 100.0%
(1) Core as declared to Euronext on February 23, 1994 (avis Euronext no. 94-600). (2) Including non-identified holders (around 9% in 2004, 12% in 2003 and 11% in 2002). (3) Estimates by Euroclear.
The number of shareholders is estimated at more than In the event that one of the members of the group of buyers 100,000. were in the position of selling its shares, the other group mem- There is no double voting right. bers would be given priority in purchasing them. The other members will have the opportunity of acquiring the shares on
To the best knowledge of the company, there are no TF1 of Directors Board the basis of their existing shareholding. If there are no pur- pledged shares and TF1 has pledged none of its subsidiaries’ chasers among the group members, then the assignor will shares. have the opportunity of selling its shares to one or more other assignees who will then become members of the group of core Thresholds crossed shareholders. Very few declarations have been made of thresholds being crossed in 2004. No declaration was made that the 2% Shareholders’ agreement threshold has been crossed. In July 2002, TF1 and M6 signed a protocol agreement with Suez for the purchase of its 25% stake in TPS. This resulted in Concerted action a 66% stake in TPS for TF1 and 34% for M6. The shareholders resulting from the group of buyers involved in The purchase includes a shareholders’ agreement providing for TF1’s privatisation (Bouygues and Société Générale at the joint management of TPS by TPS Gestion (sole statutory 31/12/04 representing 42.9% of the capital) constitute the manager). There are eight members on the Board of Directors group of core shareholders. This concerted action has existed of TPS Gestion, five of whom are appointed by TF1 and three since 1987 and was declared to Euronext on February 23, by M6. Strategic decisions and decisions that are key to TPS’s Financial statements 1994 (avis Euronext n° 94-600), in accordance with the regu- financial and operational objectives are taken by the qualified lations in force. majority of 75% of the Board of Directors. The decisions 1987 saw the group of TF1 buyers implement a number of include approval of TPS’ annual operating budget and invest- agreements, jointly and severally, in accordance with the law. ments or expenditure representing a financial commitment of They also linked up to manage TF1, thus making the concerted more than €6 M. action a reality. Legal informations
Accounts 2004 63 Board of Directors
Directors’ report
5.5 Stock warrant or stock purchase plans
HISTORICAL INFORMATION ON STOCK WARRANT OR STOCK PURCHASE PLANS
PLAN N° 2 PLAN N° 3 PLAN N° 4 PLAN N° 5 PLAN N° 6 PLAN N° 7 PLAN N° 8 Date of AGM 12.06.1995 12.06.1995 12.06.1995 18.04.2000 18.04.2000 23.04.2002 23.04.2002 Date of Board Meeting 08.04.1997 18.03.1998 20.09.1999 06.12.2000 11.12.2001 24.02.2003 31.08.2004 Date of allocation 08.04.1997 18.03.1998 20.09.1999 06.12.2000 11.12.2001 12.03.2003 16.09.2004 Type of plan Subscription Subscription Subscription Subscription Subscription Subscription Subscription Total no. of shares eligible as options or for purchase 2,270,000 2,300,000 2,300,000 840,000 2,071,300 2,300,500 1,008,000 • by directors 550,000 570,000 400,000 – 550,000 550,000 0 • by the ten principal staff 700,000 800,000 620,000 100,000 370,000 390,000 100,000 Option exercisable as from 08.04.2000 18.03.2001 20.09.2002 06.12.2003 11.12.2004 12.03.2006 16.09.2007 Maturity date 08.04.2004 18.03.2005 20.09.2006 06.12.2007 11.12.2008 12.03.2010 16.09.2011 Purchase or warrant price €7.97 €10.02 €23.27 €53.04 €27.80 €20.20 €23.46 Terms of exercise Exercise after Exercise after Exercise after Exercise after Exercise after Exercise after Exercise after 3 years 3 years 3 years 3 years 3 years 3 years 3 years Sale after Sale after Sale after Sale after Sale after Sale after Sale after 5 years 5 years 5 years 4 years 4 years 4 years 4 years No. of stock warrants exercised at 10/02/2004 2,030,000 1,547,600 00000 Stock warrants or purchase options that have been cancelled or lapsed 210,000 80,000 62,000 49,500 105,000 0 3,000 Remaining stock warrants or purchase options 30,000 672,400 2,238,000 790,500 1,966,300 2,300,500 1,005,000 Plan no. 1 became obsolete on October 10, 2002. The options for the purchase of shares detailed above are currently the only financial instruments issued by TF1 having a poten- tially dilutive impact. The potential dilutive impact on profits is mentioned in the consolidated profit and loss account. If all options were exercised, the share capital of TF1 would be 223,062,429 shares. There is no other form of potential capital.
Information on stock warrants or stock purchase 5.6 Gross compensation of company officers options VARIABLE STOCK WARRANTS OR STOCK PURCHASE OPTIONS GRANTED FIXED COMPENSATION NAME BENEFITS FOR 2004 PAID TO DIRECTORS (EXCLUDING EMPLOYEE REPRESENTATIVES) Function COMPENSATION IN KIND IN 2005 AND OPTIONS EXERCISED LE LAY Patrick (1) €920,000 €4,140 €1,132,667 GRANTED OR SHARES Chairman & CEO SUBSCRIBED TERMS OF OR BOUGHT PRICE EXERCISE PLAN NO. Change 2004/2003 – 17.76% 0.50% – 17,92% Options granted during MOUGEOTTE Etienne (2) €946,239 €47,014 €610,000 the year to each director Senior Executive Vice President by the company or any Change 2004/2003 1,15% 0.00% 35,56% group company 0 – – – COHEN Claude €611,000 €21,724 €427,000 Options raised during Chairman of TF1 Publicité the fiscal year by each director 0 – – – Change 2004/2003 3.44% 0.00% 18,61%
STOCK WARRANTS OR STOCK PURCHASE OPTIONS GRANTED (1) 100% of the remuneration (in line with the AMF recommendation). In 2004, the TO THE 10 OTHER EXECUTIVES WHO RECEIVED THE LARGEST amount invoiced to TF1 SA was €2,304,140. NUMBER OF OPTIONS (EXCLUDING NON EMPLOYEE (2) Of which TF1 Films Production: €83,239. REPRESENTATIVES) AND OPTIONS EXERCISED There is no joining or leaving bonus payment. NO. OF OPTIONS GRANTED OR SHARES Patrick Le Lay’s gross variable pay in 2004 depended on: a) the SUBSCRIBED OR BOUGHT PRICE PLAN NO. share prices of Bouygues and TF1; b) TF1’s group share of net Options granted during the year consolidated income; c) a number of qualitative objectives: to the 10 other executives who quality of management, personal contribution to the group’s received the largest number of options 100,000 €23.46 8 development and contribution to the business’s value added. Options exercised during the year by the 10 other executives 177,930 €7.97 2 who received the largest number of options 130,000 €10.02 3
64 (2) Submittedforapproval attheGeneralMeeting. (1) Adjustedfor10for1split. Dividends andyield Officer of thelistedcompany, BouyguesSA. Michel DerbesseisalsoadministratorandJointChiefExecutive Executive Officer ofthelistedcompany, BouyguesSA. Martin Bouyguesisalsoadministrator, ChairmanandChief the administratorsasfollows: In 2004,Board ofDirectors’ feesof Board ofDirectors’ fees their fixedpay. ments. Thevariableelementoftheirpayispeggedat70% performance criteriaandtherealisation ofcertaincommit- Cohen wasbasedonfourqualitativeandquantitativerevenue The gross 2004variablepayofEtienneMougeotteandClaude salary. Eachcomponentelementisweighteddifferently. The variableelementofhispayispeggedat150%fixed Accounts 2004 ERDIVIDENDPAID YEAR POUYAT Alain POUPART LAFARGE Olivier representative) PETTON Céline(employee representative) PERNAUT Jean-Pierre(employee MOUGEOTTE Etienne MONTAGNER Philippe LE LAY Patrick DERBESSE Michel COHEN Claude SABAN Haïm BOUYGUES Martin BARBIZET Patricia 0306 .2 .7 981. 773.5% 3.8% 3.4% 1.7% 1.3% 3.3% 3.9% 27.7 25.5 28.4 57.5 52.0 18.6 15.2 9.4 19.6 19.1 45.9 14.8 9.4 29.8 7.4 36.9 63.1 94.2 54.9 17.1 0.975 9.4 0.975 0.975 0.975 0.69 0.325 0.51 0.325 0.36 0.325 0.325 0.65 0.23 0.65 0.17 0.65 0.12 0.65 0.65 2004 0.46 2003 0.34 2002 0.24 2001 2000 1999 1998 1997 E A RDTTTLHG O LS (CLOSINGPRICE) CLOSE LOW HIGH TOTAL TAX CREDIT NET (2) € 285,468.74 were paidto – (1) ( € ) € € € € € € € € € € € .53. 132.52.7% 23.95 21.3 31.1 0.65 € 15,250.00 26,143.75 15,250.00 15,250.00 20,050.00 15,250.00 92,050.00 15,250.00 15,250.00 20,050.00 26,779.16 8,895.83 the Government. Dividends thatare notclaimedwithinfiveyearsare remitted to tions formanagedregistered shares andbearer shares. ment, eitheratTF1forregistered shares oratfinancialinstitu- Dividends are availabletoshareholders from theirdateofpay- FTSE4Good Europe andASPIEurozone. lowing sustainabledevelopmentindices:DJSISTOXX, FTSE Eurotop 300.TheTF1stockisalsoincludedinthefol- lowing stockmarketindices:CAC40,ITCAC,SBF120and At December31,2004,theTF1stockwasincludedinfol- admitted toanyotherstockexchange. code: FR000005490.There iscurrently norequest forittobe The TF1stockisquotedontheParisexchange–ISIN 5.7 Thestock these fiveindividuals. Bouygues hasdisclosedinitsannualreport allamountspaidto pany, BouyguesSA. Information SystemsandNewTechnology ofthelistedcom- Alain PouyatisalsoadministratorandChiefExecutiveOfficer of Executive Officer ofthelistedcompany, BouyguesSA. Olivier PoupartLafargeisalsoadministratorandJointChief munications ofthelistedcompany, BouyguesSA. Philippe MontagnerisalsoChiefExecutiveOfficer forTelecom- SHARE PRICE (1) ( € COIGPIE YIELD ) (CLOSINGPRICE) 65
Legal informations Financial statements Board of Directors Board of Directors
Directors’ report
Trend in share price and trading volumes € TF1’s closing share price on December 31, 2004 was 23.9, The TF1 group’s market capitalisation at December 31, 2004 down 13.5% over the year compared with a growth of 7.4% for was €5.1 billion. On the basis of the 2004 net profit, this the CAC 40 index and 8.2% for the SBF 120 index. equates to a PER (Price Earnings Ratio – market capitalisation In 2004, TF1 stock’s average daily trading volume was in relation to net profit) of 23.4 compared with 31.1 at 1,160,154, in line with 2003’s figures. TF1 stock recorded its December 31, 2003. highest volume of transactions on May 5, with 5,009,271 The trend in TF1’s share price and trading volumes over the last shares traded. three years and in the current year has been as follows:
YEAR MONTH HIGH (1) LOW (1) CLOSE NUMBER OF SHARES TRADED (2) MARKET CAPITALISATION (3) €€€ €M 2002 January 31.6 26.0 27.1 14,482,576 5,745.1 February 27.7 24.9 26.9 13,437,677 5,706.9 March 36.1 26.7 35.7 37,913,751 7,559.8 April 36.9 30.0 31.6 35,879,485 6,699.1 May 35.0 30.2 32.8 26,467,830 6,953.5 June 33.1 24.2 27.1 26,955,816 5,788.1 July 28.8 21.6 25.0 28,193,278 5,327.0 August 25.1 19.6 20.8 20,814,102 4,438.8 September 25.9 20.1 21.5 35,463,759 4,588.2 October 28.1 20.4 26.0 34,688,307 5,551.1 November 31.3 24.9 30.3 21,226,844 6,458.5 December 31.5 23.8 25.5 16,978,884 5,449.7 2003 January 26.7 22.3 22.9 17,128,356 4,903.9 February 22.9 20.8 21.2 19,169,359 4,542.2 March 24.5 18.6 20.9 22,199,105 4,477.3 April 27.5 20.3 25.2 39,500,528 5,404.4 May 26.0 23.5 25.1 17,415,353 5,383.0 June 28.0 25.5 26.8 21,739,581 5,749.1 July 29.2 26.3 28.2 21,560,251 6,054.5 August 28.3 26.3 27.7 11,343,833 5,947.1 September 29.8 24.8 25.4 27,637,385 5,454.3 October 27.1 24.4 25.8 26,135,050 5,545.9 November 27.3 24.8 26.9 34,644,097 5,782.4 December 28.9 26.6 27.7 22,045,200 5,959.8 2004 January 31.4 27.5 29.0 28,489,074 6,239.5 February 29.5 27.4 27.7 26,108,348 5,959.6 March 28.6 24.5 25.8 27,522,667 5,559.6 April 27.8 25.5 25.8 34,864,258 5,546.4 May 26.7 23.8 25.4 24,092,844 5,471.9 June 26.7 24.8 25.9 23,261,329 5,577.6 July 26.3 23.0 23.7 21,711,933 5,104.4 August 23.8 21.1 23.1 22,966,019 4,975.2 September 25.2 22.4 22.8 28,604,328 4,921.3 October 24.3 22.2 23.6 26,326,170 5,083.2 November 24.8 23.2 24.0 24,121,214 5,163.0 December 24.1 22.8 23.9 24,372,189 5,143.5 2005 January 25.6 23.9 24.6 22,718,500 5,293.8
Source: Euronext Paris SA. Note: The prices have been rebased to take account of the 10-for-1 split in June 2000. (1) Highs and lows are those recorded at stock market sessions. (2) Trading volumes represent transactions recorded both on and off the central CAC system. (3) Based on the last closing price of each month multiplied by the number of shares at the end of the month.
66 •t •t • •g • that you: In theresolutions thatare beingsubmittedtoyou,wepropose Law (Codedecommerce). byArticleL.225-38ofFrench Commercialments governed the group’s accountsforfinancialyear2004andtheagree- The group’s StatutoryAuditorswillmakeknowntheirreports on 6 Resolutions Accounts 2004 •r • in 2004; stock warrantsorpurchase plansgrantedorexercised r transfer amountsfrom thespeciallong-termcapitalgains in thespecialreport oftheStatutoryAuditors; of French Commercial Law(Codedecommerce) mentioned byarticleL.225-38 the agreements andoperationsgoverned year 2004,theappropriation anddistributionofprofits, and approve thecompanyandconsolidatedaccountsforfinancial control procedures; organisation oftheBoard ofDirectors’ workandofinternal take duenoteofthepresentation ofthepreparation and tions in2004; Meeting; Director isduetoexpire attheendofthisAnnualGeneral POUPART LAFARGE andHaïmSABAN,whosetermas LAY, PhilippeMONTAGNER, EtienneMOUGEOTTE,Olivier BARBIZET, MartinBOUYGUES,ClaudeCOHEN,PatrickLE ake duenoteofthepresentation ofoperationsconcerning ake duenoteofthepresentation ofshare buy-backopera- eserve toareserve account; enew forafurthertwoyearstheterminoffice ofPatricia ive fulldischargetotheBoard ofDirectors; •r • tions. We • • at theendofthisAnnualGeneralMeeting; of MichelDERBESSE,whosetermasDirector isduetoexpire appoint asDirector fortoyears,OlivierBOUYGUES,instead € ital. Themaximumpurchase pricepershare istobesetat Such acquisitionwouldbelimitedto10%oftotalshare cap- warrant plansorincapitalincreases reserved foremployees. number ofshares corresponding toshares issuedinstock 20th resolution (extraordinary part),notablytorepurchase a operations, orcancelshares subjecttotheadoptionof employees, keeportransfershares inthecourseoffinancial r the stockmarket.Theaimofbuy-backprogramme isto gramme enablingthecompanytobuybackitsownshares on authorise theimplementationofashare acquisitionpro- expire attheendofthisAnnualGeneralMeeting; instead ofJean-LouisMULLENBACH,whosetermisdueto appoint asStatutoryAuditorforsixyears,MichelSAVIOZ, the endofthisAnnualGeneralMeeting; Reydel, whosetermasStatutoryAuditorisduetoexpire at enew forafurthersixyearstheterminoffice ofSalustro egulate thestockmarketprice,appropriate shares for
55 andtheminimumsellingpricepershare at invite youtovoteinfavouroftheabove-proposed resolu- The Board ofDirectors € 15. 67
Legal informations Financial statements Board of Directors Financial statements
Consolidated profit and loss account - Operational breakdown
(in euros million) 2004 2003 2002 TF1 Channel Advertising revenue 1,645.5 1,543.7 1,507.3 Advertising agency fees (86.3) (82.4) (83.1) NET REVENUE FROM BROADCASTING 1,559.2 1,461.3 1,424.2 Royalties and contributions Authors (63.9) (58.1) (58.2) CNC (81.5) (76.5) (74.7) Transmission costs TDF, Satellites, Transmissions (56.5) (57.2) (56.0) Programming costs (893.2) (852.0) (881.6) GROSS MARGIN 464.1 417.5 353.7 Diversification and other revenue 1,209.8 1,219.4 1,143.5 Other operating expenses (1,176.4) (1,141.4) (1,069.4) Depreciation, amortisation and provisions (net) (98.7) (161.6) (134.3) OPERATING PROFIT 398.8 333.9 293.5 FINANCIAL LOSS (18.5) (14.4) (29.7) PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS 380.3 319.5 263.8 Exceptional items (1.2) (8.1) (4.4) Goodwill amortisation (19.3) (12.0) (8.9) Corporate income tax (136.2) (114.7) (94.2) Share in net earnings of companies consolidated under the equity method (5.0) 0.0 (1.2) NET PROFIT OF CONSOLIDATED COMPANIES 218.6 184.7 155.1 Minority interest 1.5 6.8 0.1 NET PROFIT ATTRIBUTABLE TO THE GROUP 220.1 191.5 155.2
The additional information provided by the operational break- •Transmission costs: down of the consolidated profit and loss account does not These expenses result from the transmission of TF1’s pro- replace the information given in the notes to the consolidated grammes. financial statements, but is to facilitate understanding of the two •Programming costs: main components of TF1’s activities: These are the internal and external costs of programming. They • TF1 channel broadcasting activities; include expired and retired broadcasting rights. •diversification activities.
3 Operating profit 1 Net revenue from broadcasting The operating profit is calculated on the basis of the gross Net revenue from broadcasting relate to net revenue invoiced margin. It takes into account revenue from diversification activ- to advertisers by TF1 Publicité after deduction of running costs. ities and other operating revenue minus operating expenses related to diversification activities and other operating expenses not directly attributable to programmes. This operating profit is 2 Gross margin that stated in the consolidated profit and loss account. The gross margin breaks down as follows: •Net revenue from broadcasting (see above). 4 Other items • Royalties and contributions: These fees are fully or partly based on advertising revenue As stated in the consolidated profit and loss account. – fees paid to authors, – contribution to the CNC (National Cinema Council).
68 Consolidated profit and loss account
(in euros million) NOTES 2004 2003 2002 Turnover 2,861.5 2,768.7 2,655.3 Net advertising revenue 2.14 1,781.2 1,663.2 1,628.5 • TF1 Channel 1,645.5 1,543.7 1,507.3 •Others 135.7 119.5 121.2 Diversification revenue 1,034.1 1,056.1 968.8 Technical services revenue 20.1 23.6 27.3 Other revenue 26.1 25.8 30.7
Operating expenses (2,462.7) (2,434.8) (2,361.8) External production costs (644.6) (593.3) (538.4) Staff costs (379.2) (363.9) (337.3) Other operating expenses 4.1 (1,340.3) (1,316.0) (1,351.8) Depreciation, amortisation and provisions (net) •Depreciation (100.5) (117.5) (111.7) •Provisions 1.9 (44.1) (22.6)
OPERATING PROFIT 398.8 333.9 293.5
Financial revenue 20.1 15.5 11.2 Financial expenses (38.6) (29.9) (40.9)
FINANCIAL LOSS 4.2 (18.5) (14.4) (29.7) Board of Directors Board PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS 380.3 319.5 263.8
Exceptional items 4.3 (1.2) (8.1) (4.4) Goodwill amortisation (19.3) (12.0) (8.9) Corporate income tax 4.4 (136.2) (114.7) (94.2) Share in net earnings of companies consolidated under the equity method 4.5 (5.0) 0.0 (1.2)
NET PROFIT BEFORE MINORITY INTEREST 218.6 184.7 155.1
Minority interest 1.5 6.8 0.1
NET PROFIT ATTRIBUTABLE TO THE GROUP 220.1 191.5 155.2
Average number of shares in circulation (in thousands) 214,229 213,281 211,970
Earnings per share (€) 1.03 0.90 0.73 Financial statements Diluted earnings per share (€) 1.02 0.89 0.73 Legal informations
Accounts 2004 69 Financial statements
Consolidated balance sheet
ASSETS (in euros million) NOTES 31.12.04 31.12.03 31.12.02 NET VALUE NET VALUE NET VALUE Intangible fixed assets 890.1 894.9 892.1 Audiovisual rights 2.3 and 3.1 92.8 99.7 97.4 Other intangible fixed assets 2.4 and 3.2 797.3 795.2 794.7
Goodwill 2.5 and 3.3 107.8 114.9 111.5
Tangible fixed assets 2.6 and 3.4 176.7 197.5 217.6 Land 45.7 45.7 45.7 Freehold buildings 32.3 34.7 37.1 Other tangible assets 98.7 117.1 134.8
Financial assets 2.7 and 3.5 55.7 13.3 9.8 Investments consolidated under the equity method 45.1 1.0 0.0 Investments and loans to associated undertakings 6.4 6.4 6.1 Other financial assets 4.2 5.9 3.7
FIXED ASSETS 1,230.3 1,220.6 1,231.0
Programmes and film rights 2.9 and 3.6 535.4 693.4 666.6 Raw materials and supplies 16.0 10.5 8.7 Trade debtors 3.7 912.4 621.7 671.7 Other debtors and adjustment accounts 3.8 and 3.15 372.9 481.7 503.5 Marketable securities and cash at bank in hand 2.10 and 3.9 160.6 185.1 55.0
CURRENT ASSETS 1,997.3 1,992.4 1,905.5
TOTAL ASSETS 3,227.6 3,213.0 3,136.5
70 1 nldn urn akoedat 660618.6 0.6 16.6 (2) Lessthanoneyear (1) Includingcurrent bankoverdrafts Accounts 2004 rdtr ,8. ,4. 2,258.3 2,244.0 2,188.2 554.8 3,136.5 53.4 42.8 155.2 3,213.0 568.0 63.7 43.0 191.5 3,227.6 638.8 50.0 43.0 220.1 TOTAL SHAREHOLDERS’FUNDSANDLIABILITIES Creditors Other creditors andadjustmentaccounts Tr Financial creditors andborrowings Provisions forliabilitiesandcharges Minority interest Shareholders’ funds Profit attributabletothegroup Other reserves Share premium Share capital (in euros million) SHAREHOLDERS’ EQUITYANDLIABILITES ade creditors 1 (2) (1) 2.11, 2.13,3.14and3.15 2.12 and3.12 2.16 and3.10 NOTES 3.15 3.13 3.11 NET VALUE 31.12.04 2. 9. 758.0 952.7 547.6 696.6 919.1 806.2 628.3 723.5 891.9 866.2 572.8 951.9 8212971.4 102.9 88.2 81163532.2 116.3 58.1 07 01 0.6 (0.1) (0.7) E AU NETVALUE NET VALUE 11.331.12.02 31.12.03 71
Legal informations Financial statements Board of Directors Financial statements
Consolidated cash flow statement
(in euros million) NOTES 31.12.04 31.12.03 31.12.02 1 – Operating activities Net profit 218.6 184.7 155.1 Depreciation, amortisation and provisions 95.5 155.9 129.3 •Intangible fixed assets 48.0 50.5 55.0 •Tangible fixed assets 3.4 48.1 58.9 65.1 • Financial assets (6.6) 5.9 0.0 • Expense to amortise 1.5 2.0 0.1 • Goodwill 3.3 19.3 12.0 8.9 •Provisions for liabilities and charges 3.12 (14.8) 26.6 0.2
Investment grants release to revenue 3.14 (7.7) (12.3) (7.8) Expense to amortise 0.0 (1.5) (11.0) Capital gains/(losses) on disposal of fixed assets 8.1 (3.4) 2.0 Change in deferred taxation 4.4 (12.0) (2.8) 1.4 Share of investments consolidated under the equity method 5.0 0.0 1.2 Cash flow 307.5 320.6 270.2
Stocks (39.1) (20.4) (20.7) Trade debtors (11.0) 52.9 95.6 Trade creditors 53.4 (54.3) (21.1) Net advances from third parties (12.4) 14.5 10.1 Change in working capital needs (9.1) (7.3) 63.9
NET CASH INFLOW FROM OPERATING ACTIVITIES 298.4 313.3 334.1
2 - Investing activities Purchase of intangible fixed assets 3.1 and 3.2 (51.5) (58.2) (51.0) Purchase of tangible fixed assets 3.4 (29.5) (42.0) (31.7) Disposal of fixed assets 5.2 6.6 5.5 61.1 Purchase of financial asset investments 5.1 (61.3) (17.1) (372.8) Change in liabilities on purchase of financial asset investments 0.0 (50.2) 50.2 Increase/(decrease) in other financial assets 0.2 (1.9) 8.6 Increase/(decrease) in fixed assets creditors 1.8 8.9 8.0
• Consolidation adjustments (0.2) 1.9 9.0 NET CASH OUTFLOW FROM INVESTING ACTIVITIES (133.9) (153.1) (318.6)
3 - Financing activities Increase in shareholders’ funds 5.3 13.7 20.1 24.7 Increase in capital subscribed by minorities 0.0 2.4 122.5 Decrease in loans 5.4 (79.2) 103.8 0.0 Dividends paid 3.9 and 3.10 (139.4) (138.3) (138.7) NET CASH OUTFLOW FROM FINANCING ACTIVITIES (204.9) (12.0) 8.5
TOTAL INCREASE IN CASH AND CASH EQUIVALENTS (40.4) 148.2 24.0
Cash at beginning of period 184.5 36.3 12.3 Net inflow/outflow (40.4) 148.2 24.0 Cash at end of period 144.1 184.5 36.3
72 decision oftheCSAonNovember20,2001. automatic renewal ofthisautorisation,from 2002to2007,by use offrequencies foraperiodof5years.TF1benefitsfrom an offer”. OnMarch 26,1996,theCSArenewed TF1’s licencesfor ness, thatthelicenceshouldnotberenewed withouttender made againstthelicenseejustify, byreason oftheirserious- siders thatthepenalty(ies)imposedonlicenseeorclaims occasion foradurationoffiveyears,(...)unlesstheCSAcon- l’Audiovisuel), withouttenderoffer, uptotwiceandoneach that licencesare “renewed bytheCSA(ConseilSupérieurde Also, Article28.1ofLaw94-88February1,1994stipulates quencies previously allocatedtoitasastate-ownedchannel. tive from April16,1987,enablingittobroadcast onthefre- TF1 isoperatingundera10-yearbroadcasting licence,effec- 1.1 Presentation ofTF1 1 TheTF1Group (2) There isnodifference betweenthepercentage ofcontrol andthatofshares held. (1) Localcurrency (inthousands). Accounts 2004 UOPR VA 0 E wds eln fteErsotcanli wdn100.00 13,580 100.00 SA 3,095 225 SellingoftheEurosportchannelinSweden 10,800 SASU 1,000 SA SCS Swedish 38 SellingoftheEurosportchannelinUK 4,500 SCS 99,132 SEK SCS SA 75 English SA GLEM 100 TF1 INTERNATIONAL GBP 30 SCS TF1 VIDEO CONTROL% EUROSALES AB 118 GMBH 10 TF1 DEVELOPPEMENT 18 LA CHAINEINFO SASU 2,325 E-TF1 80 LTD TF1 DIGITAL 1,800 BV SA EUROSHOPPING SASU SASU EUROSPORT MEDIA 3,000 15,000 EUROSPORT TV 40 3,403 EUROSPORT TELEVISION SASU SA 37 EUROSPORT TELEVISION 36,912 SA EUROSPORT FRANCE SASU SA ALMA PRODUCTIONS 128 SAS CIC ACTIVITY STUDIOS 107 SASU 2,400 TF1 ENTREPRISES 2,550 NATIONALITY TF1 PUBLICITEPRODUCTION SASU CURRENCY EUROSPORT SA LEGALSHARE UNE MUSIQUE TV BREIZH SYALIS SA TELESHOPPING TF1 FILMSPRODUCTION TF1 PUBLICITE COMPANY Notes totheconsolidatedfinancialstatements TUTR CAPITAL STRUCTURE (1) FULLY CONSOLIDATED COMPANIES € € € € € € € € € € € € € € € € € € € € € € € € F 100.00 F F 100.00 F F F F Selling oftheEurosportchannelinGermany F F SellingoftheEurosportchannelinHolland German Dutch F F F F F F F F F F F F F ec uivsa ihs100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Productionofprogrammes Audiovisualrights Videodistribution 100.00 100.00 rench Eurosportadvertising agency rench Developmentof digitaltechnology 100.00 100.00 rench Newschannel rench ofInternetservices Creation/broadcasting 100.00 rench ofthethemechanneldivision Holdingcompany 100.00 100.00 rench Homeshoppingtheme 71.14 rench rench 100.00 100.00 rench 100.00 100.00 SellingoftheEurosport channelinFrance Productionofprogrammes 100.00 Videodistribution rench TVproductionstudios merchandisingproducts rench on-lineservices, Video, 100.00 rench Commercialsandpromos rench SellingoftheEurosportchanneloutsideFrance rench Musicpublishing rench channel Thematic rench Financing company rench Homeshopping rench Co-productionoffilms rench Marketingof TF1 advertisingairtime rench rench rench DTT. order toincludeprovisions relating totheimplementationof the CSAdecidedtomodifyTF1’s licenceanditsconventionin “simulcast” ofthedigitalterrestrial channel.OnJune10,2003, automatic extensionuntil2012,byreason oftherepeat on 1986, asamended,thisauthorisationmaybesubjecttoan Under thetermsofArticle82LawSeptember30, consolidated. which are notmaterialtothegroup accounts,havenotbeen are consolidated undertheequitymethod.Certainsubsidiaries, held. ThecompaniesinwhichTF1hasasignificantinfluence proportionately consolidatedbyreference tothepercentage The companiesjointlycontrolled byseveralshareholders are sive control, whetherbylaworinfact,are fullyconsolidated. The companiesoverwhichTF1has,directly orindirectly, exclu- 1.2 Scopeofconsolidation (2) 73
Legal informations Financial statements Board of Directors Financial statements
Notes to the consolidated financial statements
COMPANY LEGAL SHARE CURRENCY NATIONALITY ACTIVITY CONTROL% (2) STRUCTURE CAPITAL (1) BAXTER SA 562 € French Music publishing 100.00 COMIQUE COMPAGNIE SARL 8 € French Press agency 100.00 GLEM FILM SAS 80 € French Co-production of films 100.00 TOUT AUDIOVISUEL PRODUCTION SASU 80 € French Production of programmes 100.00 TF1 EXPANSION SA 38 € French Development of digital 100.00 LES NOUVELLES EDITIONS TF1 SAS 38 € French Publishing 51.00 STE D’EXPLOITATION DE DOCUMENTAIRES SCS 8 € French Documentary thematic 100.00 REGIE CASSETTE VIDEO SASU 40 € French Video distribution 100.00 CIBY DA SA 9,294 € French Audiovisual rights 100.00 GIE APHELIE GIE – – French Real estate leasing 95.00 TF1 PRODUCTION SAS 40 € French Holding company of the production division 100.00 QUAI SUD TELEVISION SA 40 € French Production of programmes 75.00 SACAS SNC 38 € French Development of digital technology 100.00 TF1 SATELLITE SNC 38 € French Development of digital technology 100.00 VISIOWAVE AG 350 CHF Swiss Network digital video 79.98 TFOU SCS 40 € French Thematic channel 100.00 CIBY 2000 SA 13,798 € French Audiovisual rights 100.00 HISTOIRE (3) SA 937 € French Thematic channel 100.00 YAGAN PRODUCTIONS (3) SAS 53 € French Audiovisual rights 100.00 KIGEMA SPORT ORGANISATION (3) LTD20GBP English Car race organisation 60.00 SRW EVENTS LTD (3) LTD4GBP English Car race organisation 60.00 COMPANIES PROPORTIONATELY CONSOLIDATED TF6 SCS 80 € French Thematic channel (general interest) 50.00 TF6 GESTION SA 80 € French TF6’s management company 50.00 SERIE CLUB (EXTENSION TV) SA 50 € French Thematic channel (series) 50.00 SOUS-GROUPE TPS (4) TPS SNC 1,800 € French Selling of TPS programmes 66.00 TPS GESTION SA 72 € French TPS’s management company 66.00 TPS CINEMA SNC 8 € French Movie channel 66.00 MULTIVISION SNC 601 € French Pay per view theme channel 66.00 TPS JEUNESSE SNC 8 € French Youth channel 66.00 TPS SPORT SNC 8 € French Sport channel 66.00 TPS INTERACTIF SNC 8 € French Publishing and marketing of services 66.00 TPS ENTREPRISES SNC 8 € French Communication projects 66.00 TPS FOOT SNC 8 € French Sport theme channel 66.00 TPS MOTIVATION SA 45 € French Management of marketable securities 66.00 TPS TERMINAUX SNC 154,374 € French Management of the equipment base 66.00 TCM DA SNC 240 € French Audiovisual rights 50.00 TCM GESTION SA 40 € French TCM DA’s management 50.00 TELEMA SAS 1,000 € French Audiovisual rights production 49.00 COMPANIES CONSOLIDATED UNDER THE EQUITY METHOD PUBLICATIONS METRO FRANCE SAS 100 € French Publishing 34.30 EUROPA TV (3) SPA 6,500 € Italian Production and distribution of Sportitalia 29.00 PRIMA TV (3) SPA 6,500 € Italian Multiplexe operator 49.00
(1) Local currency (in thousands). (2) There is no difference between the percentage of control and that of shares held. (3) Company consolidated for the first time in 2004, without any significant impact on TF1 Group’s financial figures. (4) TPS Sub-Group: shareholders’ agreement signed by TF1 and M6 on July 19, 2002, TPS is jointly controlled and thus consolidated under the proportionate method.
74 2 Group accounting policies Prima TV holds a national television broadcasting authorisa- tion for a DTT network on the Italian territory (commercial 2.1 Basis of accounting name: D-Free). Following this acquisition, TF1 Group has the opportunity to exercise a two year option relative to a part of The consolidated financial statements of the TF1 Group have the multiplex capacity, in order to broadcast a pay channel been prepared in accordance with Generally Accepted French over the area covered. TF1 Group has a pre-emption right Accounting Standards, notably the 99/02 regulation of the over the shares of its partner, as well as a “guaranteed price” Accounting Regulations Committee, ratified by Government put option to be exercised in 2006. In return, TF1 Group has order dated June 22, 1999. granted to its partner a promise to sell at the same time. In The accounting policies adopted for the 2004 consolidated addition, the shareholders’ agreement includes a mechanism financial statements are comparable to those for the 2003 and for resolving any management deadlock, through a guaran- 2002 consolidated financial statements. teed price issue. The consolidated financial statements incorporate a certain Europa TV holds a national television broadcasting licence for number of restatements and adjustments compares with the an analogue terrestrial network on the Italian territory. TF1 individual company accounts of TF1 group companies. Group has a pre-emption right over the shares of its partner, as The restatements relate essentially to rights in co-produced well as a continuation right. The shareholders’ agreement programmes, which, in the consolidated financial statements, includes a mechanism for resolving any management dead- are treated as current assets and written off when broadcast, lock, through a guaranteed price issue. Europa TV launched in as described in note 2.9. February 2004 the channel Sportitalia. The adjustments, other than those arising on consolidation, Exits relate particularly to: •the elimination of tax depreciation allowances recognised in • TF1 Cinéma, Protecrea, Les Films du Jour, Parmentier Pro-
individual company accounts; duction, Cogelda, Les Films Ariane, Big Cash, SICCIS, TF1 of Directors Board • exchange differences arising on assets and liabilities and Catalogue and TF1 International Pictures, previously fully con- accounted for through the profit and loss account; solidated, have been excluded from the scope of consolida- • the recognition of significant leasing contracts in fixed assets tion because of internal restructuring operations taking effect and in liabilities (creditors); on January 1, 2004. • deferred taxation, calculated as described in the note 2.13. • The company Cabale, previously fully consolidated, has been eliminated from the scope because of its takeover by Ciby DA 2.2 Comparability of consolidated financial on December 30, 2004. statements • The company Mikado, previously fully consolidated, which was liquidated on December 28, 2004, has been excluded 2.2.1 Change in scope of consolidation with effect from December 28, 2004. The 2004 changes in scope, described below, have no signifi- • The company Groupe Glem, which took over Glem with effect cant impact in TF1 Group consolidated financial statements. from January 1, 2004, is now named Glem.
Entries Changes in stake Financial statements •In 2004, Kigema Sport Organisation, Super Racing Week-end • The additional stake in TV Breizh increased TF1 Group’s Events and Histoire (acquired companies) have been fully interest in this subsidiary from 40.5% to 71.1%. consolidated for the first time as well as Yagan Productions • The additional stake in Groupe Glem (which was renamed (newly formed company). Glem) increased TF1 Group’s interest in this subsidiary from •From January 1, 2004, Italian companies Prima TV (49% 72.8% to 100%. owned) and Europa TV (29% owned) have been consolidated under the equity method. Legal informations
Accounts 2004 75 Financial statements
Notes to the consolidated financial statements
2.2.2 Changes of method These two changes have a negative impact of €88.1 M on 2004 consolidated operating revenue. They only concern the With effect from January 1, 2004, TF1 Group made changes in presentation of revenue and expense and do not impact oper- accounting presentation which, while based on the accounting ating income. framework described in paragraph 1, converge on the presen- tation that will be adopted in 2005 under International Financial Reporting Standards. Those changes in presentation are 2.3 Audiovisual rights described below. This note refers to the shares owned in films that have been co- produced by TF1 Films Production, TF1 Cinema, TF1 Video, Programmes and film rights (impact on the balance sheet Glem, Les Films du Jour, Téléma and Les Films Ariane, the presentation) audiovisual trading and distribution rights held by TF1 Interna- Programmes and film rights are accounted for in inventories tional, TF1 International Pictures, TF1 Catalogue, TCM DA, TF1 when technical acceptance of them has occurred and the Entreprises, Ciby DA and Cogelda, and the musical rights held rights are opened. by Une Musique and Baxter. All rights not fulfilling the preceding conditions are accounted The date of posting as intangible assets and the amortisation for in commitments and contingencies (for the part of rights not rates applied are defined as follows: paid) or in prepayments and accrued income (for the rights DATE OF POSTING AMORTISATION RATE already prepaid). CO-PRODUCTION AUDIOVISUAL AUDIOVISUAL MUSICAL RIGHTS SHARE DISTRIBUTION RIGHTS TRADING RIGHTS The impact on the consolidated balance sheet as of January 1, End of 2004 is summarised in the table below (in €M): shooting date in line with revenue
HEADING CONCERNED PART NOT PAID PART PAID TOTAL Censors’ straight-line rate IMPACT certificate over 3 years Programmes and film rights (22.3) (170.0) (192.3) Signing of straight-line straight-line 2 years contract rate over 3 years rate over 75% 1st year Trade debtors (7.9) 249.0 241.1 or in line 5 years 25% 2nd year Other debtors with revenue and adjustment accounts (42.0) (79.0) (121.0) Total assets (72.2) 0.0 (72.2) For films co-produced by TF1 Films Production and Téléma, the method applied is the one, which enables the film to be Trade creditors (72.2) – (72.2) written off for tax purposes as quickly as possible. It can thus Total shareholders’ funds and liabilities (72.2) – (72.2) differ from film to film. A provision is set up when estimated future revenue do not Trade creditors 72.2 – 72.2 cover the book value, net of amortisation. This change in accounting presentation does not affect the change in working capital needs. 2.4 Other intangible fixed assets
Turnover (impact on the profit and loss presentation) This mainly concerns valuation differences, as defined in note 3.2. Other intangible assets relate essentially to acquisition of Forecasts for returns of merchandise sold are no longer trademarks and software, and are amortised over a period of accounted for through a risk accrual but rather through credit between one and two years, except for the Eurosport trade notes to be issued, which decreases revenue and related mark which is not amortised. expenses. This change in presentation concerns primarily TF1 Entreprises, TF1 Vidéo and Téléshopping. 2.5 Goodwill The pay-backs on certain distribution contracts are deducted from revenue such that only the economic advantage to TF1 The difference between the purchase price of the participation (commission) appears as income. This change primarily con- acquired and the corresponding share of shareholders’ equity cerns TF1 Entreprises and TF1 Vidéo. is allocated to the assets and liabilities of the acquired com- pany, so that the consolidated balance sheet reflects their fair value. Residual goodwill is amortised over the relevant period on a straight-line basis, between 4 and 20 years.
76 re solidated accountsinorder torecognise thefixedassetand panies oftheGroup are material,theyare restated inthecon- When fixedassetsacquired underleasingcontractsbycom- Depreciation ratesare asfollows: 2.6 Tangible fixedassets acquisition. of theaccountingperiodyearfollowing may besubjecttorevision duringaperiodexpiringattheend Under French regulations, theallocationofpurchase price Committee. 230 ofthe99/02regulation oftheAccountingRegulations method, inaccordance withtheoptionoffered byparagraph The TF1Group continuestoapplythepartialrevaluation is notsignificant,itfullywrittenoff intheyearofacquisition. However, where theamountofgoodwill(ornegativegoodwill) Negative goodwillisreversed inlinewiththerelated losses. this Regulation. to anymaterialdifference compared withthatrecommended by below, ifappliedtomakethiscomparison, doesnotgiverise Regulations Committee(CNC); howeverthemethoddescribed not applyinginadvanceRegulation2002-10oftheAccounting and goodwilliscompared withrecoverable value.TF1Group is (excluding audiovisualrightswhichare dealtwithasinnote2.3) In particular, thebalancesheetvalueofintangibleassets that areduction invaluemayhaveoccurred. suggest orexternal, events orcircumstances, whetherinternal with group accountingpolicies,annuallyormore frequently if The carryingvalueoffixedassetsisreviewed, inaccordance of fixedassets 2.8 Subsequentmonitoringofthevalue their share ofnetprofit. proportion ofshareholders’ fundsheldbytheGroup, including accounted forinthebalancesheetavaluerepresenting the Participations consolidatedundertheequitymethodare for impairmentcalculatedbyreference totheirvalueinuse. for attheiracquisitioncost,ifnecessaryreduced byprovisions Participations innon-consolidatedcompaniesare accounted 2.7 Financialassets Accounts 2004 ulig tagtln 20years Straight-line 2to10years Straight-lineorreducingbalance Other tangiblefixedassets T Buildings cnclfclte tagtln rrdcn aac 3to7years Straight-lineorreducingbalance echnical facilities lated debtinthebalancesheet. •t • principles: the DiscountedCashFlowmethodaccording tothefollowing which theybelong.TheCGU’s valueinuseisdeterminedby cash flowsare grouped intheCashGeneratingUnit(CGU)to gible assetswithwhichitisimpossibletodirectly associate value inuse.Inorder todeterminethevalueinuse,thoseintan- Recoverable valueisthehigherofnetrealisable valueand •t lowing twoconditionsare met: accounted forunder“programmes andfilmsrights”ifthefol- b) • • a) 2.9 Programmes andfilmrights •t •I the following: c) rights overwhichhaveexpired are retired. production whichhasnotbeen broadcastExternal andthe • able valueoftheCGU. this balancesheetvalueproves tobehigherthantherecover- solidated balancesheet;aprovision forimpairmentissetupif value itsfixedassets(includinggoodwill)contributetothecon- The recoverable valueoftheCGUisthencompared tothe •P •F plan madebythemanagementofunitconcerned; cash flows(aftertax)comefrom amediumtermbusiness by thegroup’s channelsaswellco-productions. productions, includingbroadcastingexternal rightsacquired channel; TF1 group in-houseproductions tobebroadcast ontheTF1 grant of the rights (for external production). grant oftherights(forexternal tion); W tion inthosemarkets. the companyoperates,aswellwithitscompetitiveposi- dance withthepotentialdevelopmentofthosemarketswhere flow andaconstantgrowth rate.Thisgrowth rateisinaccor- counted CashFlowdeterminedonthebasisofaprescriptive ment outlayatyear-end. “consumption” valuesasindicatedundersection“d”; financial yearonthebasisoftheirpurchase costlesstheir (direct costsplusattributableproduction overheads); n-house production isvaluedatitsoverallproduction cost echnical approval (for both in-house and external produc-echnical approval (forbothin-houseandexternal he terminalvalueiscalculatedbysumtoinfinityoftheDis- he adopteddiscountratecorresponds toTF1Group’s The term“programmes andfilmrights”covers: The principlesforvaluing“programmes andfilmrights”are ilm rightsandco-productions are valuedattheendofeach r A programme isregarded asready forbroadcast andis eighted Average CostofCapital(WACC); ogrammes inprogress are valuedaccording totheinvest- 77
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Notes to the consolidated financial statements
d) Programmes are deemed “consumed” at the moment of 2.10 Marketable securities transmission. The value of marketable securities is calculated at cost of d.1 Purchased TV rights and co-produced programmes acquisition. When the value is lower than the acquisition cost, (Children excluding Cartoons - Variety - Theatre - Documen- a provision is made. taries - News and Sport). 2.11 Government grants for investment POSSIBLE TRANSMISSIONS 1 2 OR MORE 1st transmission 100% 100% Government grants, when received irrevocably, are credited to 2nd transmission – – the profit and loss account in line with the depreciation of the assets they are financing. Some purchases of audiovisual rights relating to children’s pro- grammes are amortised according to the valuation of each Grants received from the CNC (National Cinema Council) are transmission as contractually defined. credited to the profit and loss account in the financial year during which the relevant films are completed. d.2 Co-productions of duration less than 52 minutes 2.12 Provisions for liabilities and charges POSSIBLE TRANSMISSIONS 1 2 OR MORE 1st transmission 100% 100% A provision for liabilities and charges is set up when an obliga- 2nd transmission – – tion to a third party causes, certainly or probably, a cash out- flow without an offset at least equivalent, and when this is not d.3 Co-productions of duration equal already recognised as a liability. The provision is maintained as to or exceeding 52 minutes long as the expiry and the amount are not precisely set. The main types of provisions for liabilities and charges are the POSSIBLE TRANSMISSIONS 1 2 OR MORE following: 1st transmission 100% 80% 2nd transmission – 20% •Provisions for litigation concern the potential expenditure that will be caused by current trials or litigation whose underlying d.4 Purchased rights for full-length feature films, event existed at the year-end, even if the litigation arose sub- TV dramas, series and cartoons. sequently. •Provisions for pension costs cover TF1’s commitment to its POSSIBLE TRANSMISSIONS 1 2 OR MORE employees. Pension commitments are limited to those laid 1st transmission 100% 50% down in the Collective Agreements of Group companies. 2nd transmission – 50% They are calculated by applying to the forecast final salary the rights as anticipated at the forecast retirement date, taking d.5 All other programmes are fully written off at first into account: transmission, and therefore are no longer considered as –rights under those Agreements by reference to the years of company assets whatever the duration of the owner’s service of different grades of staff; rights. –employee turnover calculated according to the average of A provision is made if it becomes probable that a given pro- resignations and retirements experienced; gramme will not be broadcast. – salaries and benefits, including an index of employer’s pay- roll taxes in force; e) Tax depreciation allowances (in respect of co-production – an annual revaluation rate of salaries; shares) included in “regulated provisions” in TF1 SA’s accounts –the life expectancy of employees determined from statistical have been restated, in accordance with consolidated tables; accounting principles, in order to eliminate their impact on the –a discount rate applied to the retirement commitment, consolidated accounts. revised each year. A part of this commitment is covered by an insurance contract, the balance being the subject of a provision for liabilities and charges annually adjusted.
78 •r Consolidated deferred taxationresults mainlyfrom: 2.13 Deferred taxation • •P ments are restated soastoreduce shareholders’ equity. ments heldasfixedassets”in thecompany’s financial state- TF1 shares accountedforundertheheading“Otherinvest- 2.16 Treasury shares the caseofoptionpremiums, whichare chargedwhenpaid. basis withthelossesandgainsonhedgeditemsexcept in purposes are determinedandaccountedforonasymmetrical Gains andlossesonfinancialinstrumentsusedforhedging purposes. linked toitsbusinessactivityonlyandnotforspeculative Group operatesoncurrency marketstohedgecommitments exposure tointerest rateandexchangefluctuations.The The Group usesfinancialinstrumentstoprotect itselffrom 2.15 Financialinstruments missions paidtoagents. Income from advertisingisrecorded netofrebates andcom- 2.14 Advertising Accounts 2004 •d year. r potential impactofchangesintaxrates,whethervariableor Deferred taxhasbeencalculatedusingtheliabilitymethod.The educed (longtermcapitalgains)isincludedintheprofit ofthe 2.2.2 in accordance withthechangeofmethoddescribednote distribution businesses(videoandmusic)havebeenreleased The provisions ofgoodssoldinthepublishingand forreturn rate asisappliedtopensioncommitments. employee turnover. Theprovision isdiscountedatthesame the salaryatdateofbenefitingfrom therightsand culated takingintoaccounttheyearsofserviceemployees, their yearsofservice.Theaccruingcostsuchleaveiscal- companies oftheGroup totheiremployeesaccording to in 2003.Theycoverthecostofadditionalleaveattributedby fiscal allowances; on thefinancialstatements,ofbookentriesresulting from financial statementsandtaxregulations. estatements thatare madeinorder toeliminatetheimpact, ifferences intimingofrecognition ofitemsbetweenthe r ovisions forlong-serviceleavewere setupforthefirsttime Movements duringtheyearare asfollows: 3.1 Audiovisualrights 3. Notestotheconsolidatedbalancesheet for incommitmentsandcontingencies. the portionremaining tobepaidattheyear-end isaccounted on itsstageofprogress (firstdayorend ofshooting,etc.),and or broadcasting rightcanleadtoseveralpaymentsdepending ments andcontingencies.Inpracticeapurchase programme –are accountedforinthevaluationofcommit- not yetopened r in Contractual amountsoffinancingremaining tobemade– 2.17 Programme purchase commitments ment ofvalueatDecember31, 2004. the methodologydescribedin note2.8,disclosesnoimpair- The monitoringofthisbusiness goodwill,inaccordance with allocation ofgoodwill,broken downasfollows: (1) Businessgoodwilliscomposedofidentifiedintangibleassetsarisingonthe 3.2 Otherintangiblefixedassets espect ofbroadcasting rightsawaitingtechnicalapproval or iiwv 14.2 420.3 21.9 75.0 241.3 – 797.3 (49.8) 1.0 1.6 T – 1.0 (49.8) Visiowave 847.1 (7.2) Groupe TPS – 0.1 1.6 (0.6) 0.6 Série Club 74.4 Eurosport France (7.2) – 8.2 Eurosport SA (0.6) 0.6 (0.5) 795.2 (in eurosmillion) (44.8) 8.2 – (0.5) (44.8) 840.0 Net bookvalue Amortisation Brands andsoftware (16.8) 92.8 67.3 Business goodwill 7.2 Gross value 4.7 Brands andsoftware (620.5) (4.0) 730.1 (5.5) Business goodwill 18.1 (1.9) (6.1) Cost (20.6) (44.8) 43.3 10.4 (14.6) (18.1) 99.7 (604.2) 722.0 Net bookvalue Provisions Amortisation Gross value tl772.7 otal (1) 01.01.04 01.01.04 7. 772.7 – – – 772.7 AND RESTATEMENTS AND RESTATEMENTS CONSOLIDATION CONSOLIDATION THE SCOPEOF THE SCOPEOF HNEI ICES DECREASE INCREASE CHANGE IN DECREASE INCREASE CHANGE IN 31.12.04 31.12.04 31.12.04 79
Legal informations Financial statements Board of Directors Financial statements
Notes to the consolidated financial statements
3.3 Goodwill
GROSS VALUE CHANGE IN SCOPE GROSS VALUE AMORTISATION INCREASE CHANGE IN SCOPE AMORTISATION NET VALUE AT AT 01.01.04 OF CONSOLI- AT 31.12.04 AT 01.01.04 OF CONSOLI- AT 31.12.04 31.12.04 DATION AND DATION AND (in euros million) RESTATEMENTS RESTATEMENTS Parmentier Production 0.5 (0.5) – (0.5) – 0.5 – – CIC 0.5 – 0.5 (0.5) – – (0.5) – Protécréa 0.6 (0.6) – (0.6) – 0.6 – – Syalis 0.2 – 0.2 (0.2) – – (0.2) – Glem 8.3 5.9 14.2 (8.3) (6.2) 0.3 (14.2) – Téléshopping 2.8 – 2.8 (2.8) – – (2.8) – Eurosport (ESO) 80.7 – 80.7 (13.2) (4.0) – (17.2) 63.5 Téléma 5.0 – 5.0 (4.0) (1.0) – (5.0) – Eurosport France 25.9 – 25.9 (4.0) (1.3) – (5.3) 20.6 SETS 14.8 – 14.8 (2.3) (0.8) – (3.1) 11.7 Quai Sud 2.4 0.6 3.0 (1.5) (0.9) – (2.4) 0.6 TV Breizh 4.3 5.8 10.1 (4.3) (0.3) – (4.6) 5.5 Métro France 11.1 (11.1) –––––– KSO/SRW – 6.2 6.2 – (0.3) – (0.3) 5.9 Histoire – 4.5 4.5 – (4.5) – (4.5) – Total 157.1 10.8 167.9 (42.2) (19.3) 1.4 60.1 107.8
The monitoring of this goodwill, in accordance with the 3.4 Tangible fixed assets methodology describes in note 2.8, discloses no impairment of Movements of tangible fixed assets and of the corresponding value at December 31, 2004, except for the Glem and Histoire depreciation during the year are summarised as follows: CGUs. The goodwill in respect of these units has been entirely 01.01.04 CHANGE IN INCREASE DECREASE 31.12.04 written off. THE SCOPE OF CONSOLI- The following table presents the different assumptions used for DATION AND the impairment tests which resulted in these write-offs. (in euros million) RESTATEMENTS Land 45.7–––45.7 CGU BOOK INTANGIBLE FORWARD DISCOUNT METHOD OF CONSTANT VALUE IN FIXED ASSETS VIEW RATE CALCULATING GROWTH Buildings 58.0–––58.0 BALANCE DEPRECIATION TERMINAL RATE Technical facilities SHEET FOR THE PERIOD VALUE (1) (€M) (€M) and equipment 151.5 0.3 7.0 (5.3) 153.5 (2) Histoire 4.7 (4.5) 5 years 8.10% See note 2.8 3.75% Other tangible assets 293.3 6.3 18.7 (7.6) 310.7 Glem 6.3 (6.2) 5 years 8.10% See note 2.8 3.00% Assets under construction 9.6 (9.7) 5.9 (2.0) 3.8 Gross Value 558.1 (3.1) 31.6 (14.9) 571.7 Cash flow from these CGUs being negative throughout the Buildings (23.3) – (2.4) – (25.7) period projected, it was not felt relevant to go on to carry out Technical facilities tests on the sensitivity of the value in use to variations in the and equipment (128.4) 1.5 (13.0) 5.0 (134.9) growth and discount rates. Other tangible assets (208.9) – (32.5) 7.0 (234.4) Amortisation (360.6) 1.5 (47.9) 12.0 (395.0) Net book value 197.5 (1.6) (16.3) (2.9) 176.7
(1) Including leasing: €12.4 M (comprising an increase of €2.1 M for the year). (2) Including leasing: €32.7 M.
80 3.6 Programmes andfilmrights flow statement. solidation), are detailedbelowinnote5.1relating tothecash not appearintheabovetableastheyare eliminatedoncon- The acquisitionofshares inconsolidatedcompanies(whichdo TV: (1) Includingaproportion ofshareholders’ fundsofEuropa TV: 3.5 Financialassets described above(note2.2.2). (1) Restatementessentiallyincludestheimpactofchangemethod as grammes andfilmrights,inaccordance with2.9. The followingtableprovides abreakdown ofstockspro- Accounts 2004 te iaca ses60(.)07(.)4.4 (0.5) 10.6 (9.5) 0.7 3.0 (1.8) (0.1) 6.0 49.1 T 17.2 Other financialassets 1.0 undertakings associated under theequitymethod Investments consolidated (in eurosmillion) rvsos(1.)05(.)(123.6) 3.8 0.6 0.8 (4.4) 2.8 (0.2) 1.2 1.6 0.1 0.5 0.7 0.8 (1.5) (0.4) 0.0 22.0 (0.4) (119.7) (1.1) 4.1 – (0.5) 627.4 – 1.1 1.1 3.2 T 2.5 49.4 Provisions (30.7) (13.2) T TV Breizh (159.4) Histoire 51.6 13.2 Odyssée 737.4 Série Club TF6 Groupe Eurosport Groupe TPS TF1 Channel (in eurosmillion) (4.4) 7.3 (0.8) – (10.9) T Provisions Investments andloansto tlgosvle2. 7237(50 60.1 (15.0) 3.7 47.2 24.2 otal grossvalue tlntbo au 9. 255 75535.4 659.0 47.5 51.9 (205.5) (206.0) 693.4 813.1 otal netbookvalue otal grossvalue 55.7 (7.7) 2.9 47.2 13.3 otal netbookvalue € 13.8 Mandgoodwillrestatement ofPublicationsMetro France: 01.01.04 01.01.04 RESTATEMENTS RESTATEMENTS SOLIDATION AND OF CONSOLI- SCOPE OFCON- DATION AND HNEI H NETCHANGE CHANGE IN THE THE SCOPE HNEI ICES DECREASE INCREASE CHANGE IN (1) (1) – € 50 45.1 (5.0) 24.2 M,Prima € 31.12.04 11.1 M. 31.12.04 losses for judged improbable) amountto of programmes. Deferred taxassetsnotrecognised (sincetheirrealisation is become deductiblefortaxpurposeswhenpaid,andprovisions foramortisation (2) Deferred taxassetsrelate essentiallytoprovisions forchargesthatonly ments andcontingencies. prepaid expensesonsportsbroadcasting rightsinaccruedincomeorcommit- 3.8 Otherdebtorsandadjustmentaccounts described above(note2.2.2). (1) Restatementessentiallyincludestheimpactofchangemethodas 3.7 Trade debtors been realised atDecember31,2004), mainly ofmoneymarketfunds(onwhichallcapitalgainshave Marketable securities,foranetamountof Cash atbankandinhandamountedto and inhand 3.9 Marketablesecuritiesandcashatbank compared to2003( (1) Adjustmentaccountsmainlyincludeprepaid expenses( rvsos(98 59 (25.7) (5.9) – (in eurosmillion) (19.8) 246.1 T Provisions T 15.2 T Advances fromcreditors (in eurosmillion) n tes 97(51 4661.3 64.6 216.5 (35.1) 223.8 99.7 – 223.8 T Deferred taxation Adjustment accounts and others) current accounts assets saleproceeds, debtors(tax, Sundry and others) socialorganisations staff, localauthorities, (Government, debtors Other operating aedbos6634. . 675.7 8.2 41.2 626.3 rade debtors tlntbo au 2. 8. . 912.4 938.1 3.4 9.3 287.3 287.3 621.7 641.5 otal netbookvalue otal grossvalue tl480(51 7. 481.7 372.9 (35.1) 408.0 otal € 51.6 Manddeferred amortisationfor (2) € (1) 144.2 Min2003)becauseofthe 01.01.04 € 62.9 Mandare composedofcarryforward tax RS AU RVSOSNTVLENETVALUE NETVALUE PROVISIONS GROSS VALUE RESTATEMENTS SOLIDATION AND SCOPE OFCON- HNEI H NETCHANGE CHANGE IN THE 80–4. 46.0 157.9 48.0 36.5 – – 48.0 36.5 (1) 31.12.04 (1) € 11.3 M. € 29.0 M. € € 121.0 Mrestatement of 131.6 M,consist € 24.8 M),adecrease . 262.4 1.1 31.12.04 31.12.03 81
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Notes to the consolidated financial statements
3.10 Shareholders’ funds 3.12 Provisions for liabilities and charges
SHARE CAPITAL RETAINED SHAREHOLDERS’ Provisions, as indicated in note 2.12, are as follows: (in euros million) EARNINGS FUNDS 01.01.04 CHANGE IN INCREASE RELEASE 31.12.04 Shareholders’ funds at 31 Dec. 01 42.4 728.0 770.4 THE SCOPE Capital increase (1) 0.4 17.1 17.5 OF CONSO- LIDATION Dividends – (136.9) (136.9) AND 2002 net profit – 155.2 155.2 RESTATE- (in euros million) MENTS USED NOT USED Shareholders’ funds at 31 Dec. 02 42.8 763.4 806.2 Claims (1) 46.4 (3.1) 8.6 (6.4) (16.0) 29.5 Capital increase (1) 0.2 10.3 10.5 Associated Dividends – (138.3) (138.3) companies 0.2––––0.2 Exchange effect – (0.6) (0.6) Other provisions (2) 38.4 3.5 11.9 (15.4) (4.2) 34.1 Change in the method of consolidation (2) – (3.1) (3.1) Pension costs 17.9 (0.3) 10.1 (0.4) (3.0) 24.3 2003 net profit – 191.5 191.5 Total 102.9 0.1 30.6 (22.2) (23.2) 88.2 Shareholders’ funds at 31 Dec. 03 43.0 823.2 866.2 (1) Claims include: Capital increase (1) 0.1 3.6 3.7 •disputes with TF1 core channel customers 2.8 Dividends – (139.1) (139.1) •disputes with other customers 2.9 •dispute involving TPS and counterfeiting 3.5 Exchange effect – (0.2) (0.2) •legal disputes with private companies 15.1 Operations on Treasury shares (0.1) 1.2 1.1 •legal disputes with public companies 3.8 2004 net profit – 220.1 220.1 Total 29.5 (3) Shareholders’ funds at 31 Dec. 04 43.0 908.8 951.8 (2) Other provisions cover the following risks: (1) Stock options exercised •TPS set top boxes lost or stolen 2.5 •renewal of TPS cards due to piracy 6.2 (2) Set up of opening net of tax provisions for long-service leave • long-service leave 5.5 (4) Share capital is divided into 214,759,729 ordinary shares with a nominal value •taxation 9.0 € of 0.20 per share. Share capital is fully subscribed. • SOFICAS 7.5 •miscellaneous 3.4 3.11 Minority interest Total 34.1 Provisions for liabilities and charges are valued so as to cover (in euros million) 2004 2003 2002 claims and other risks linked to group activities that could lead Opening minority interest (0.1) 0.6 0.3 to a definite or likely cash outflow. Change in the scope of consolidation 1.3 6.2 2.2 No other potential liability (disputes likely to cause a cash out- Exchange effect – (0.1) – flow) has been identified at year-end. Dividends (0.4) – (1.8) Net profit (1.5) (6.8) (0.1) Closing minority interest (0.7) (0.1) 0.6
82 follows: rates, andaftertakingintoaccounthedgingoperations,isas The breakdown offinancialdebtbetweenfixedandvariable TF1’s exposure toliquidityriskisanalysedbelowinnote6.3.1. (2) TPS: (1) Telema: financial debtisbroadly asfollows: At December31,2004,thebreakdown oftheconsolidated 3.13 Financialdebt line, are nowaccountedforunderothercreditors andadjustmentaccounts. (1) Deferred tax,previously accountedforinthebalance sheet underaseparate The breakdown isasfollows: 3.14 Othercreditors and adjustmentaccounts guarantees orchargesoverproperty. TF1 group’s financialdebtisnotsupportedbymortgages, is analysedinnote6.3.2. The sensitivityofTF1’s consolidatedaccountstoratechanges See detailinnote6.3.2. Accounts 2004 urn akoedat 64––16.4 500.0 – 536.3 500.0 500.4 – – 14.4 16.4 – MATURITY 21.5 Current bankoverdrafts Sub-total creditlines Leasing Committed revolvingcreditlines Bond issue (in eurosmillion) DESCRIPTION te rdtr 4. 2. 205.2 61.2 6.3 225.9 57.0 4.7 242.2 57.4 5.7 T accounts Adjustment andrelated Government grantsforinvestment Other creditors 2.9% F Deferred tax T (in eurosmillion) Non-exposed debt (131.7) V 4.0 Fi – (29.0) – – – 16.1 – – (131.7) – 4.0 – (29.0) T Marketable securities 16.1 thebankandinhand Cash at T Bond issueinterest Current accountsandothers xsadsca euiy333330322.4 323.0 343.3 axes andsocialsecurity tl735666758.0 696.6 723.5 otal 412.1 500.3 572.8 14.4 500.3 (102.6) 14.4 58.1 otal netfinancialdebt otal grossfinancialdebt xdast rdtr 282. 94.5 23.9 22.8 ixed assetscreditors ral aedb 15.8% debt ariable rate e aedb 81.3% debt xed rate (2) € 19.9 M. € (1) 8.7 M and Visiowave: 8.7 MandVisiowave: (1) € ESTA EWE OVER 1 BETWEEN LESS THAN 4.0 M. ERAD5YAS5YEARS 5 YEARS AND 1 YEAR 29––12.9 – – 12.9 . 440323.4 0.3 14.4 8.7 2004 216. 68.4 62.1 52.1 032002 2003 31.12.04 TOTAL € Adjustment accountsmainlycompriseprepayments (including in 2003. credited totheprofit andlossaccountis Council (CNC)forTF1FilmsProduction. In2004,theamount liabilities mainlycomprisegrantsfrom theFrench Cinema grantsforinvestmentincludedin The amountofgovernment notes tobeissuedadvertisers The changeinothercreditors isduetotheincrease ofcredit accelerated amortisation.Theymaybeanalysedasfollows: Deferred taxliabilitiesprincipallyrelate tothecancellationof porate incometax. T Other operatingexpensesincludethefollowingitems: 4.1 Otheroperatingexpenses and lossaccount 4 Notestotheconsolidatedprofit Debtors andcreditors are dueasfollows: 3.15 Duedatesfordebtorsandcreditors usdais921. 14.0 54.4 11.1 51.0 9.2 42.9 T Subsidiaries TF1 SA (in eurosmillion) te prtn xess700773743.0 168.5 787.3 170.2 780.0 339.5 180.9 256.9 T expenses Other operating 275.9 T 723.5 Audiovisual feesandtax Subcontracting andproductioncosts 0.8 T (in eurosmillion) 7.0 372.9 650.0 1.9 715.7 – 7.8 – 363.2 650.0 Other creditors T F Other debtors(net) advances fromcreditors) Net tradedebtors(excl. (in eurosmillion) axes andsocialsecuritymainlyincludeVAT collectedandcor- xsadlve 883. 35.4 36.6 65.4 38.8 65.0 64.7 axes andlevies 891.9 ransmission costs(TDF) 37.4 24.5 830.0 rade creditors tl5. 2168.4 62.1 52.1 otal tl130313601,351.8 1,316.0 1,340.3 otal nnilceiosadlas5. 44503572.8 500.3 14.4 58.1 inancial creditorsandloans 32.8 Mfrom TPSsubscribers). ESTA EWE OVER 1 BETWEEN LESS THAN ERAD5YAS5YEARS 5 YEARS AND 1 YEAR 2004 2004 € 7.7 Mvs 032002 2003 032002 2003 € 12.3 M TOTAL 83
Legal informations Financial statements Board of Directors Financial statements
Notes to the consolidated financial statements
4.2 Financial loss 4.5 Subsidiaries consolidated under the equity method The financial loss for 2004 comprises the following:
(in euros million) 2004 2003 2002 MAIN FIGURES AT 100% PUBLICATIONS PRIMA TV EUROPA TV (in euros million) METRO FRANCE Net profits/(losses) on the sale Net fixed assets 0.6 1.7 2.9 of marketable securities 2.3 1.1 0.5 Financial creditors (gross) 1.4 0.9 1.2 Net provisions/(releases) for contingencies and financial investments (1.4) 1.2 – Total net assets 15.8 20.2 19.4 Provisions/(releases) Turnover 21.4 13.2 8.1 for marketable securities (0.4) – (7.8) Operating profit (2.6) (3.2) (8.5) Interest (25.3) (17.0) (17.6) Net profit (2.7) (3.2) (8.5) Foreign exchange gains/(losses) 0.6 (0.2) (7.4) Prima TV and Europa TV have been consolidated since Janu- Dividends 1.7 1.2 0.7 ary 1, 2004 (note 2.2.1). Others 4.0 (0.7) 1.9 Total (18.5) (14.4) (29.7) 5 Notes to the cash flow statement 4.3 Exceptional items The cash flow statement has been drawn up in accordance Exceptional items in 2004 comprise the following: with the method advocated by the Accounting Regulations Committee (99/02). (in euros million) 2004 2003 2002 Capital gains/(losses) on disposal of fixed assets (0.7) 0.1 (2.0) 5.1 Purchases of financial assets Net provisions (0.4) (1.6) (0.6) The purchases of financial assets in 2004 are as follows: Donations – – (2.3) Capital losses on the sale of Film par Film – (3.9) – COMPANIES PURCHASED 31.12.04 (in euros million) Others (0.1) (2.7) 0.5 Europa TV 24.3 Total (1.2) (8.1) (4.4) Prima TV 13.8 TV Breizh (minority purchase) 6.9 4.4 Corporate income tax Kigema Sport Organisation 4.2 (in euros million) 2004 2003 2002 Histoire 3.9 Current taxation 148.2 117.5 92.8 Glem (minority purchase) 3.6 Deferred taxation (12.0) (2.8) 1.4 Quai Sud Television 0.9 Total 136.2 114.7 94.2 Pink TV 0.5 Others 3.2 Deferred taxation is calculated on the liability basis at the rate Total 61.3 of 34.93% (common rate) and 15.72% (reduced rate) at December 31, 2004. 5.2 Disposal of fixed assets The effective tax rate of 38.4% corresponds to the total tax charge (€136.2 M) as a percentage of pre-tax profit. The 3% (in euros million) 31.12.04 difference compared with the common rate arises principally Disposal of tangible and intangible fixed assets 4.4 because goodwill amortisation charged is not deductible and Disposal of financial assets 2.2 because the tax losses of the year (the realisation of which is Total 6.6 judged improbable) have not been recognised as deferrred tax assets. Since January 1, 1989, TF1 has opted for tax consolidation treatment, an option regularly renewed. Tax savings by reason of the tax losses of subsidiaries are always reimbursed to those companies.
84 6.1 SECTORINFORMATION 6 Othersinformation amount of linked tothereimbursement byTPSofbilaterallinesforatotal The decrease offinancialcreditors in2004( 5.4 Changeinfinancialcreditors include thefollowingitems( Cash flowwithanimpactonshareholders’ fundsin2004 to financingactivities 5.3 Increase ofshareholders’ fundslinked 6.1.2 ContributionsbysectortotheBalanceSheet to theProfit andLossAccount 6.1.1 Contributionsbysector Accounts 2004 uvnin rne:8.7 1.3 3.7 T Subventions granted: on Operations Treasury shares Exercise of TF1 SAstockoptions iclaeu 2517.9 6.5 0.3 100.4 486.1 425.7 24.2 62.5 4.4 0.4 93.2 5.1 154.4 475.7 424.6 26.2 NETFIXED ASSETS T 138.4 Miscellaneous 4.9 Audiovisual rights (0.2) Production (1.2) (13.0) Internet (0.9) (0.7) channels Thematic Eurosport (6.1) 2.5 2.8 (0.6) TPS 30.2 13.4 Publishing –Distribution (17.1) 57.3 26.0 1.3 TF1 corechannel 53.3 32.2 19.6 (in eurosmillion) (17.0) CONTRIBUTIONS 37.6 47.8 353.1 66.8 283.4 50.9 34.3 375.7 299.0 290.6 T 56.1 35.1 Miscellaneous 352.1 Audiovisual rights Production 344.3 1,561.2 Internet 1,666.1 channels Thematic 275.1 Eurosport OPERATING TPS Publishing –Distribution TF1 corechannel (in eurosmillion) CONTRIBUTIONS TURNOVER PROFIT tl13.7 otal tl12031,220.6 1,230.3 otal 333.9 398.8 2,742.9 2,835.4 otal € 74.3 M. 2004 € M): 2004 2003 € 79.2 M)ismainly 2004 2003 2003 follows: account andbalancesheetatDecember31,2004wouldbeas illustration, thecontributionstoconsolidatedprofit andloss new breakdown ofsectorsasJanuary1,2005.Byway T presentation 6.1.3 Contributionsbysectorunderthenew2005 (1) Incl. COMMITMENTS RECEIVED (1) Incl. COMMITMENTS GIVEN 31, 2004: business oftheTF1group are analysedasfollowsatDecember Commitments andcontingenciesrelated totheday-to-day 6.2 Commitmentsandcontingencies tes1. 07 40.7 (0.7) 475.7 74.6 369.6 19.6 1.3 269.7 15.8 27.5 375.7 354.9 215.0 238.6 T Others 1,986.5 Broadcasting international Audiovisual rights OPERATING Distribution Broadcasting France (in eurosmillion) NET CONTRIBUTIONS TURNOVER FIXED urnes5. 73–6. 84.3 5.7 40.8 69.5 8.2 52.0 – – 1.7 17.3 231.4 36.2 – 52.2 446.8 14.1 8.2 63.9 301.7 T 81.2 1.7 Guarantees leases Operating 1.5 Leasing transmission Image 124.3 40.8 0.2 Sports transmissionrights 155.6 and broadcastingrights 52.0 0.1 Programmes 25.7 1.7 (in eurosmillion) 231.4 60.9 1.2 36.2 446.8 69.0 63.9 14.1 301.7 T Other commitments 81.2 Guarantees leases Operating Leasing transmission Image Sports transmissionrights broadcasting rights Programmes and (in eurosmillion) aking intoaccountIFRSstandards, TF1Group hasselecteda tl28543881,230.3 398.8 2,835.4 otal tl886110715920521,638.0 2,095.2 135.9 1,110.7 848.6 otal 1,674.0 2,174.6 161.8 1,154.4 858.4 otal € € 55.4 MinCHF, 55.4 MinCHF, (1) (1) € € (1) (1) 101.3 MinGBPand 101.3 MinGBPand LESS THAN BETWEEN OVER 5 TOTAL TOTAL LESS THAN BETWEEN OVER 5 TOTAL TOTAL ER1AD YEARS 1AND 1 YEAR YEARS 1AND 1 YEAR 9. 8. 70442427.4 494.2 848.4 17.0 1,024.5 53.3 285.9 469.6 191.3 501.6 427.4 494.2 848.4 17.0 1,024.5 53.3 285.9 469.6 191.3 501.6 ––––– 5 YEARS 5 YEARS € € 17.1 MinUSD. 173.1M inUSD. RFTASSETS PROFIT 2004 2004 2003 2003 85
Legal informations Financial statements Board of Directors Financial statements
Notes to the consolidated financial statements
Programmes and broadcasting rights Operating leases The acquisition of broadcasting rights and co-productions Included here are – in both commitments given and received – giving rise to a definite contractual liability for the group prior to the minimum future payments due under operating leases the year end – but for which technical approval has not been which are non-cancellable and current at the year end. Only given or rights are not yet opened at that date – appear as those leases, which are significant at group level, have been commitments given and received. According to the principle in taken into account and they comprise principally property note 2.17, these liabilities are valued at their contractual leases, in particular offices occupied by TF1 and the French amounts, after deduction of the contractual financing amounts, companies which are members of the Eurosport group. which are shown in “accrued income” on the balance sheet, are shown in trade debtors. These commitments concern Guarantees mainly TF1 SA (€682.0 M) and TPS (€245.9 M). This covers deposits and guarantees made under commercial contracts or leases. Sports transmission rights The acquisition of sports transmission rights, which give rise to Other commitments a definite contractual liability for the group prior to the year end, This covers mainly: are included in commitments given and received at the value • Contractual obligations under financial instruments to hedge not yet paid. exchange rate risks, principally future currency purchases € These commitments concern TF1 SA ( 228.5 M), Eurosport and sales (see note 6.3.3). These have been marked to € € ( 229.0 M) and TPS ( 36.7 M). market at the year-end; thus, for a forward purchase contract, the commitment given is valued at the future rate and the Image transmission commitment received at the reverse rate. Conversely, for a Commitments under this heading comprise: forward sale contract, the commitment given is valued at the • in respect of TF1, the fees payable to TDF for a broadcasting reverse rate and the commitment received at the future rate. service, until the expiry of the contact; • Contractual obligations under financial instruments to hedge •in respect of Eurosport and TPS, rental payable (until contract rate risks, accounted for at their market value at year-end expiry) to private companies for satellite capacity and trans- (SWAP and CAP on Eurosport’s loan, SWAP on TPS’ loan, mitter-receiver. SWAP on TF1’s bond issue). Those financial instruments are detailed in note 6.3.2. Leasing •Miscellaneous contracts for the supply of materials and the provision of services as part of the recurring business activi- GIE Aphélie, the entity from which TF1 leases the property it ties of group companies; in particular, contracts to purchase has occupied since 1992, entered the consolidation scope TPS terminals and the related computer and technical main- with effect from January 1, 2000, in accordance with the pro- tenance. visions of regulation 99-02 of the Accounting Regulations •A financial investment granted by TPS to France Télécom for Committee. Since that date, the commitment under the leasing TPSL activity. contract has been included in the consolidated financial state- • Sale of TF1 share purchase options (see note 2.3 of the ments of the group. Notes to the financial statements of TF1 SA). Other leasing commitments, to the extent they are significant, • An estimate made by TPS of the future investment con- have been restated for consolidated financial statements in cerning DTT (commitments given). accordance with note 2.6. TF1’s fixed assets (intangible, tangible and financial) are not supporting mortgages. No complex obligation has been entered into by the TF1 Group at December 31, 2004. The above description omits no off-balance sheet items, which would be significant under the terms of accounting standards in force.
86 (1) Incl.TF1SA: € a bondof rity datesmainlyfallingbetweenoneandfiveyearsahead, confirmed credit linesamountingto TF1 Group atDecember31,2004remains strong: TF1has As showninthetablebelow, thecashpositionof 6.3.1 Liquidityrisk 6.3 Financialmarketrisks (2) Thegroup madevariableapart( (1) Excludingaccruedinterest not yetdue. ARE ASFOLLOWSAT DECEMBER 31,2004 MATURITY DATES OFFINANCIALINSTRUMENTS (1) Credit balancesatbank. ARE ASFOLLOWSAT DECEMBER31,2004 MATURITY DATES OFFINANCIALASSETS AND DEBTS 6.3.2 Interest raterisk Accounts 2004 A 3. 3. (0.1) 139.5 – – 139.5 – – 500.0 23.4 T 500.0 160.7 CAP 0.0 0.3 V – 0.0 Fi (in eurosmillion) 14.4 – 160.7 572.8 8.7 500.3 14.4 500.0 58.1 23.4 and marketablesecurities 500.0 Non-exposed financialassets 0.3 – V V 14.4 Gross financialliabilities – Non-exposed financialliabilities 8.7 V 853.5 Fi (in eurosmillion) F/V – V 747.5 106.0 T V Bond issue To Leasing Committed revolvingcreditlines (in eurosmillion) V tl8.1 840.6 536.3 otal 500.3 14.4 21.6 1,376.9 500.3 761.9 114.7 – otal ral aecs 90––29.0 – SWAPariable rate – 29.0 131.7 29.0 – – – – 131.7 29.0 cash ariable rate netmarketablesecurities ariable rate financialliabilities ariable rate ariable ratecash 536.3 M,39%ofthetotalavailable. e aeSA 8. 28–285(2.4) 238.5 – 52.8 185.7 SWAP xed rate 527.4 500.3 14.4 12.7 financialliabilities xed rate a akatoiain 1. 6. . 876.9 0.3 761.9 114.7 – tal bankauthorisations € € 500 Mmaturity2010.Linesdrawnamountto 595.5 MandTPS: (2) (1) (1) ESTA EWE OVER BETWEEN LESS THAN ER1AD5YASVALUE 5YEARS 1AND 1 YEAR € € 300 M)ofthebondissue. 197.3 M. –– ESTA EWE OVER 1 BETWEEN LESS THAN / LS HN EWE VR OA ESTA BTEN1OE TOTAL OVER 1 BETWEEN LESSTHAN TOTAL OVER 1 BETWEEN LESSTHAN F/V ERAD5YAS5YEARS 5 YEARS AND 1 YEAR 5 YEARS 64––16.4 – – 16.4 € –––– 876.9 M,withthematu- ERAD5YAS5YAS ERAD5YASYEARS 5 YEARS AND 1YEAR 5YEARS 5 YEARS AND 1 YEAR 0. 0. 10.6 300.0 300.0 UHRSDCEI IE MUT RW AVAILABLE AMOUNTSDRAWN AUTHORISED CREDITLINES TOTAL AUIYMATURITY MATURITY MARKET TOTAL (1) cial covenantandnotriggerevent. Bank credits contractedbytheTF1Group provide fornofinan- 2007). r During H22004,TF1Group decidedtogiveupbefore thefinal investment revenue) of4.0%forthefullyear2004. this wouldrepresent anincrease infinancialexpenses(netof lead toadecrease ofthefinancialresult amountingto Thus, animmediateonepointdecrease ofinterest ratewould rate decrease. position of 2004, thenetsituationafterhedgingatvariablerateisanasset Having regard totheratehedgingportfolioatDecember31, to obtainanaturalhedgingofthebalancesheet. excess (whichisinvestedbydefinitionatvariablerate)inorder re part ofthegross financialdebtcorresponding tothefinancing The interest rateriskpolicyconsistsinfixingatfixedthat FOLLOW UPANDMANAGEMENTOFTHEINTERESTRATE RISK edemption itssecondsyndicatedcredits ( e oiinatrhdig459(02 64412.2 16.4 – (160.7) (70.2) – – 465.9 – 412.2 16.4 (160.7) – (238.5) – (131.7) 238.5 527.4 300.0 Net positionafterhedging (300.0) SWAP fixedrate hedges: Interest rate SWAP variablerate hedges: Interest rate Net positionbeforehedging and marketablesecurities) F F (in eurosmillion) nnillaiiis(iaca et)5742. 64572.8 16.4 29.0 527.4 inancial assets(cash inancial liabilities(financialdebts) quirement ofTF1Group (netdebt),bymakingvariablethe (1) € 70.2 M;thustheGroup hasalowsensitivityto 29––1. 840.6 12.9 – – 12.9 IE AIBE NON- FIXED VARIABLE AERT EXPOSED RATE RATE € 350 Mmaturity € 0.7 M; TOTAL 87
Legal informations Financial statements Board of Directors Financial statements
Notes to the consolidated financial statements
6.3.3 Exchange rate risk then become the rate to be adopted for the purpose of hedging instruments. INSTRUMENTS OF EXCHANGE RATE HEDGES Daily monitoring of the markets is effected in real time by using CURRENCY NOMINAL MARKET VALUE (in euros million) VALUE OF HEDGES financial information software. Forward purchase USD 36.0 (3.6) The position is reviewed each month with the Chief Executive Activating forward purchase (1) USD 11.5 (0.4) Officer with regard to open positions so as to validate the Forward purchase GBP 10.8 (0.2) strategy seeking to meet the budgeted rates. Activating forward purchase (1) GBP 0.9 0.0 The group manages its exposure to exchange rate and interest Forward purchase GBP 6.8 0.7 rate risk by using hedging instruments such as swaps, forward Forward sale Other currencies 11.0 0.1 sale and purchase contracts, exchange options and rate Total hedges (3.4) options. The derivatives are used for hedging only and never for (1) An activating forward purchase secures a minimum hedge price and allows speculatiove purposes. the holder to benefit from a positive trend of the currency up to the level of threshold. If this threshold is crossed, the hedge price becomes once more the minimum secured price. 6.4 Employees
FOLLOW UP AND MANAGEMENT OF THE EXCHANGE RATE RISK The number of employees at the financial year-end, according
AT 2004 CLOSING PRICE USD (1) CHF GBP (2) OTHER TOTAL to the standards in force under the Collective Agreement on CURREN- Communication and Audiovisual Production, was as follows: (in euros million) CIES (3) Assets 22.7 11.0 11.5 8.2 2004 2003 2002 Liabilities (35.5) (11.5) (13.5) (3.7) College 1 - Workers and clerical employees 74 80 116 Off-balance sheet (173.1) (55.4) (101.3) – College 2 - Technical staff 775 795 752 Before hedging (185.9) (55.9) (103.3) 4.5 College 3 - Managerial and executive staff 2,389 2,259 2,142 Hedges (1) 47.5 – 4.9 (11.0) College 4 - Journalists 494 510 470 Net position after hedging (138.4) (55.9) (98.4) (6.5) (299.1) Total 3,774 3,644 3,480 Sensitivity (1.0) (0.4) (1.4) (0.0) (2.7) The above table presents employees of fully consolidated or Price used +/– 0.01 € 1.376 1.558 0.712 proportionately consolidated companies at the end of (1) The net position in relation to the dollar must be seen in context. In fact, sev- December 2004. eral companies of the Group (TF1, TPS, Eurosport), by reason of their business activities, enter into contracts to purchase forward multiannual rights, which explains the magnitude of off-balance sheet exposed amounts. Those off-balance 6.5 Executive compensation sheet commitments are deliberately not fully hedged because there is a strong probability they will be offset by recurrent turnover in USD. Remuneration of the eight Executive Directors (composed of (2) The net position after hedging in sterling results from a hedging instrument of three Group Board Members and five divisional Group Direc- which the underlying asset is future turnover not taken into account in off-balance tors) for the year ended December 31, 2004 amounted to sheet commitments. € (3) Other currencies are mainly NOK, SEK and DKK. As for GBP, the net position 6,532,884. after hedging results from a hedging instrument of which the underlying asset is No significant personal loans or guarantees have been granted future turnover not taken into account in off-balance sheet commitments. to any Director or Board Member apart from share loans to The consolidated net position in currency after taking into Directors who are also Board Members. account hedges (valued in euros at the closing price) is €340.4 M. The risk of loss on the overall net currency position 6.6 Share purchase options by reason of an unfavourable and uniform movement of one and share subscriptions options euro centime against all the currencies concerned would be negative to the extent of €3.1M. Information relating to options granted to employees is given in paragraph 5.6 of the Report of the Board of Directors. 6.3.4 Investment risk 6.7 Risks in emerging countries TF1 has no exposure to the risk of price movements in secu- rities held. TF1’s activity and profit were not impacted by crises in emerging countries. 6.3.5 Risk management policy At the end of each year, “budget rates” are established for the 6.8 Subsequent events following year in respect of currency and interest rates. These No significant event has occurred since December 31, 2004. budgeted rates are validated by the Chief Executive Officer and
88 section 2.2.2ofthenotes. programme broadcasting rightsandturnover, mentionedin your attentiontothechangeinaccountingmethodregarding W of operationsalltheentitiesconsolidated. give atrueandfairviewofthefinancialpositionresults according toFrench generallyacceptedaccountingprinciples, In ouropinion,theconsolidatedfinancialstatements,prepared provides areasonable basisforouropinion. the consolidatedfinancialstatements.We believethatouraudit mates made,aswellevaluatingtheoverallpresentation of assessing theaccountingprinciplesusedandsignificantesti- consolidated financialstatements.Anauditalsoincludes dence supportingtheamountsanddisclosures inthe statement. Anauditincludesexamining,onatestbasis,evi- the consolidatedfinancialstatementsare free ofmaterialmis- plan andperformtheaudittoobtainreasonable assurancethat accepted auditingstandards. Thosestandards require thatwe We Opinion ontheconsolidatedfinancialstatements these consolidatedfinancialstatements,basedonouraudit. by theBoard ofDirectors. Ourrole istoexpress anopinionon These consolidatedfinancialstatementshavebeenapproved financial report, fortheyearendedDecember31,2004. financial statementsofTF1,presented onpages69to88ofthe Annual GeneralMeeting,wehaveauditedtheconsolidated In accordance withourappointmentbyyourShareholders’ Financial yearendeddecember31,2004 statements on theconsolidatedfinancial Statutory auditors’report Accounts 2004 ithout callingintoquestiontheopiniongivenabove,wedraw Statutory Auditor’s report
conducted ourauditinaccordance withFrench generally given inthefirstpartofthisreport. fore contributed totheformationofourunqualifiedopinion, solidated financialstatementstakenasawholeandhavethere- These conclusionswere formedaspartofourauditthecon- Co-production shares andbroadcasting rightsare• accounted • Section 2.8ofthenotespresents themethodusedtomon- As partofourreview oftheaccountingprinciplesusedby • following: we substantiateourconclusions,drawtoyourattentionthe graph 2,oftheFrench Commercial Code,whichrequire that In conformitywiththeprovisions ofArticleL.225-235,para- Basis ofourconclusions We Specific verifications ihlRSEJean-Pierre CROUZET SALUSTRO REYDEL Michel ROSSE MAZARS &GUERARD Paris laDéfenseandParis,March 17,2005 statements. presentation anditsconformitywiththeconsolidatedfinancial agement report. We havenocommentstomakeasitsfair were reasonable. ensured thattheassumptionsmadeandresulting valuations actual performance.Whenassessingthesefigures, we comparison ofprevious periodbroadcasting forecasts with analysis ofthereliability ofbroadcasting forecasts, through a assessed theprovisions fordepreciation basedonan provisions fordepreciation are tobedetermined.We Section 2.9ofthenoteswhich,inparticular, defineshowthe for inaccordance withthepolicyandmethodsdescribedin assumptions madeandresulting valuationswere reasonable. approach adoptedbythegroup wasrelevant, andthatthe Based ontheinformationavailable,weensured thatthe itor thevalueofmainintangibleassetsandgoodwill. accounting periods. and thepresentation madetoensure comparabilitybetween accounting methoddescribedinsection2.2.2ofthenotes company, wecheckedtheappropriateness ofthechangesin
also verifiedtheinformationprovided inthegroup’s man- The StatutoryAuditors 89
Legal informations Financial statements Board of Directors Financial statements
TFI SA Balance sheet
ASSETS (in euros million) NOTES 31.12.04 31.12.03 31.12.02 NET NET NET Intangible fixed assets 1.2 and 2.1 137.1 164.8 187.4 Franchises and other similar rights 0.1 0.1 0.2 Brand 0.0 0.0 0.0 Goodwill 0.0 0.0 0.0 Other intangible fixed assets 0.0 0.0 0.0 Co-production ready for broadcasting 70.0 91.4 109.0 Co-production rights available for rebroadcasting 56.3 45.5 53.0 Co-production in progress 10.7 27.8 25.2
Tangible fixed assets 1.3 and 2.2 29.4 32.5 36.0 Land 0.0 0.0 0.0 Freehold buildings 0.0 0.0 0.0 Technical facilities and equipment 8.5 10.7 14.3 Other tangible fixed assets 19.9 18.9 20.7 Tangible fixed assets under construction 1.0 2.9 1.0
Financial assets 1.4 and 2.3 967.3 979.0 1,048.4 Investments 599.4 589.7 655.6 Loans to associated undertakings 0.0 0.0 0.0 Other investments held as fixed assets 9.3 27.6 27.3 Loans 357.9 361.1 364.8 Other financial assets 0.7 0.6 0.7
FIXED ASSETS 1,133.8 1,176.3 1,271.8
Inventories 1.5 and 2.4 403.0 468.0 425.0 Raw materials and consumables 0.2 0.6 0.6 Goods held for resale 0.0 0.0 0.0 Rights ready for broadcasting 188.5 213.3 171.2 Rights for rebroadcasting 212.7 137.1 143.8 Broadcasting rights in progress 1.6 117.0 109.4
Prepayments and accrued income 2.5 216.3 2.6 1.7 Trade debtors 1.6 352.5 344.8 362.3 Other debtors 2.6 383.8 449.6 436.1 Marketable securities and cash at bank and in hand 1.7 and 2.7 142.1 154.5 2.3 Prepaid expenses 2.8 4.1 117.7 102.3
CURRENT ASSETS 1,501.8 1,537.2 1,329.7
Expenses to be spread over several years 1.3 1.5 0.0 Premium on the redemption of bond issues 2.6 3.0 0.0 Unrealised losses/gains on foreign exchange 0.0 0.0 0.9
TOTAL ASSETS 2,639.5 2,718.0 2,602.4
90 1 nldn akoedat 640018.5 0.0 495.0 16.4 233.7 158.8 (2) Includingcurrent accountswithassociatedcompanies (1) Includingbankoverdrafts Accounts 2004 rpi noe547716.9 146.1 0.8 79.4 7.7 0.0 166.7 2,602.4 1.6 2.5 5.4 502.9 2,718.0 163.9 0.9 31.0 1.3 23.4 3.2 504.0 2,639.5 0.0 74.6 4.2 29.4 670.0 198.0 12.1 0.0 53.4 TOTAL 42.8 SHAREHOLDERS’ FUNDSANDLIABILITIES 0.0 25.0 66.9 Unrealised losses/gainsonforeign exchange 24.3 734.0 4.3 101.7 CREDITORS ANDOTHERLIABILITIES 10.6 0.0 63.7 Prepaid income 43.0 25.0 29.5 Other creditors 734.0 155.8 4.3 Fixed assetscreditors T Tr 0.0 50.0 Other financialcreditors 43.0 Bank borrowings 25.0 Bond loans PROVISIONS FORLIABILITIESANDCHARGES Other provisions forliabilities Provisions forcharges Provisions forcontingencies SHAREHOLDERS’ FUNDS Regulated provisions: programme amortisation grantsforinvestment Government Net profit fortheyear Retained earnings Other reserves Long-term capitalgainreserve Legal reserve Revaluation reserve Share premium Share capital (in euros million) SHAREHOLDERS’ EQUITYANDLIABILITES xadsca iblte 7. 6. 147.4 169.4 179.6 ax andsocialliabilities d rdtr 9. 2. 444.8 420.9 392.3 ade creditors (1) (2) 1.12 and2.10 1.10. 1.11. NOTES 2.11 2.9 1.9 1.8 NET VALUE 31.12.04 ,5. ,7. 1,218.4 1,171.1 1,159.5 ,4. ,0. 1,348.1 1,503.8 1,443.8 1. 3. 150.4 132.5 117.9 5. 3. 495.0 233.7 158.8 640018.5 35.1 0.0 41.5 16.4 34.9 . . 0.0 0.0 0.0 E AU NETVALUE NET VALUE 11.331.12.02 31.12.03 91
Legal informations Financial statements Board of Directors Financial statements
TF1 SA Profit and loss account
(in euros million) NOTES 2004 2003 2002 Turnover 1.13 and 3.1 1,710.5 1,596.2 1,552.0 Advertising revenue 3.1 1,559.2 1,461.3 1,424.2 Technical services 1.6 1.6 1.4 Other operating revenue 11.3 10.4 9.6 Stored production 0.9 (1.3) 0.2 In-house production 0.0 1.5 0.0 Operating grant 0.0 0.0 0.3 Depreciation, amortisation and provisions releases 30.7 26.3 20.4 Expense transfers 98.9 93.5 92.2 Other revenue 7.9 2.9 3.7
Operating expenses (1,352.7) (1,278.0) (1,271.6) Purchase of raw materials and consumables 3.2 (481.8) (554.2) (465.8) Change in inventory (52.6) 63.8 44.4 Other purchases and external expenses (379.4) (354.0) (426.0) Taxes and levies 3.3 (99.9) (93.3) (91.4) Wages and salaries 3.4 (107.8) (102.3) (98.9) Social security charges 3.5 (48.5) (46.2) (43.4) Depreciation, amortisation and provisions (net) 3.6 • amortisation of broadcast co-production (57.0) (55.3) (91.8) • depreciation of other fixed assets (11.8) (12.1) (13.2) • amortisation of operating expenses to be spread (0.2) 0.0 0.0 • provision for intangible assets and current assets (30.2) (41.2) (17.9) • provision for liabilities and charges (11.6) (13.4) (2.3) Other expenses 3.7 (71.9) (69.8) (65.3)
OPERATING PROFIT 357.8 318.2 280.4
Net profit from joint operations 0.0 0.0 0.0
Financial revenue 81.1 63.0 83.5 Financial expense (141.6) (144.1) (53.0)
FINANCIAL PROFIT/(LOSS) 3.8 (60.5) (81.1) 30.5
PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS 297.3 237.1 310.9
Exceptional income 36.8 62.5 66.7 Exceptional revenue on operations 0.1 0.6 0.3 Exceptional revenue on fixed assets 2.6 18.2 19.9 Provision releases 34.1 43.7 46.5
Exceptional expenses (34.9) (81.3) (84.2) Exceptional expense on operations (0.1) (0.1) (2.8) Exceptional expense on fixed assets (15.3) (55.3) (33.5) Exceptional depreciation, amortisation and provisions (19.5) (25.9) (47.9)
Exceptional profit/(loss) 3.9 1.9 (18.8) (17.5) Employee profit sharing (12.9) (10.4) (8.7) Corporate income tax 3.10 and 3.11 (130.5) (106.2) (86.7)
NET PROFIT 155.8 101.7 198.0
92 order togiveaproper comparisonwiththeconsolidatedaccounts.allofabovewere includedin “Changeinworkingcapital (2) Inthecompanyfinancialstatements,purchase, consumptionandsaleofprogrammes andtheexpired rightsare recorded u (1) Co-produced programmes notincluded. Accounts 2004 e nlw(ufo)(88 7. 1.3 (16.2) (17.5) 154.6 170.8 (136.9) 229.5 (16.2) (28.8) 125.8 17.5 (138.3) 110.1 241.6 154.6 (139.0) 10.6 113.9 1.3 (73.8) 19.1 (265.8) 77.3 (250.5) (8.5) (424.7) (221.3) 170.8 15.3 3.7 (67.1) (76.9) 2.4 107.0 Cash atendofperiod (133.2) Net inflow/(outflow) (28.8) 208.9 Cash atbeginningofperiod 0.1 0.0 16.1 315.9 TOTAL (94.5) INCREASE/(DECREASE) INCASHANDEQUIVALENTS 20.9 (43.9) (0.9) (66.3) NET CASHOUTFLOWFROMFINANCING 198.0 234.0 Dividends paid Net changeinloans (1.5) 190.1 Increase inshareholders’ funds 0.7 12.3 3 -Financingactivities 0.0 (2.1) 101.7 NET CASHOUTFLOWFROMINVESTINGACTIVITIES 246.5 Increase/(decrease) inotherfinancialassets 258.8 0.0 Increase/(decrease) infixedassetscreditors 11.9 Disposal offixedassetinvestments 0.0 155.8 Purchase offixedassetinvestments Disposal offixedassets Purchase offixedassets 2 -Investingactivities NET CASHINFLOWFROMOPERATING 0.0 ACTIVITIES 0.0 Change inworkingcapitalneeds Net advancesfrom third parties Expenses toamortiseoverseveralperiods Tr T Stocks Depreciation, amortisationandprovisions ofco-production Purchase ofco-production Cash flow Gain/(loss) ondisposaloffixedassets Investment grantsreleased torevenue Depreciation, amortisationandprovisions Net profit 1 -Operatingactivities (in euros million) aedbos5. 1.)115.2 (13.5) 55.6 rade debtors TF1 SAcashflowstatement d rdtr 611. 1.1 10.3 26.1 ade creditors (1) (2) (1) (2) (2) (1) (2) (2) 31.12.04 5.)(25 (64.2) (32.5) (58.2) 5.)(30 (40.1) (43.0) (51.4) 233. 92.6 37.2 10.2 42.3 120.4 90.7 89 87 (5.0) (8.7) (8.9) . . 0.2 0.5 0.0 11.331.12.02 31.12.03 needs”. nder “Intangiblefixedassets”.In 93
Legal informations Financial statements Board of Directors Financial statements
Notes to the company financial statements
Accounting policies and presentation of the accounts for the b) Cartoons twelve-month financial period ended December 31, 2004. POSSIBLE TRANSMISSIONS 1 2 OR MORE The accounts for the financial year have been prepared in 1st transmission 100% 50% accordance with the legal and statutory provisions currently in 2nd transmission – 50% force in France. c) Programmes of duration less than 52 minutes 1 Principal accounting policies POSSIBLE TRANSMISSIONS 1 2 OR MORE 1st transmission 100% 100% 2nd transmission – – 1.1 Comparability of financial statements With effect from January 1, 2004, TF1 Group made changes in d) Programmes of duration equal accounting presentation concerning programmes and film to or exceeding 52 minutes
rights. POSSIBLE TRANSMISSIONS 1 2 OR MORE Programmes and film rights are accounted for in inventories 1st transmission 100% 80% when technical acceptance of them has occurred and the 2nd transmission – 20% rights are opened. A provision is made if it becomes probable that a given pro- All rights not fulfilling the preceding conditions are accounted gramme involving co-production will not be broadcast. for in commitments and contingencies (for the part of rights not paid) or in prepayments and accrued income (for the rights 1.2.2. Co-productions ready for broadcasting already prepaid). The items reported under this heading are all co-productions The impact on the consolidated balance sheet as of January 1, that have not yet been transmitted. They are accounted for at € 2004 is summarised in the table below (in M): their purchase cost. HEADING CONCERNED PART PAID PART NOT PAID TOTAL IMPACT 1.2.3. Co-production rights available for rebroadcasting Intangible fixed assets (29.0) – (29.0) Inventories (108.6) (7.9) (116.5) Co-productions which have already been transmitted once, Prepayments and accrued income 211.7 – 211.7 and for which one or more rebroadcastings are still possible, Other debtors – (2.9) (2.9) are accounted for under “Co-production rights available for Prepaid expenses (74.1) (39.1) (113.2) rebroadcasting” and valued at 20% or 50% of their purchase Total assets – (49.9) (49.9) cost. Trade creditors – (49.9) (49.9) Total shareholders’ funds and liabilities – (49.9) (49.9) 1.2.4. Co-productions in progress Commitments and contingiencies – 49.9 49.9 Co-productions that are not ready for production are reported under “co-productions in progress”. These co-productions are 1.2 Intangible fixed assets valued at the amount already paid by the end of the financial year. The contractual amounts of payments to be made are 1.2.1. General principles included in “Commitments and contingencies”. Co-production shares are depreciated when broadcast, according to their type and to the following amortisation 1.3 Tangible fixed assets methods: Depreciation methods are set out in the following table:
a) Children excluding Cartoons - Variety - Theatre - Technical facilities and equipment Straight-line or reducing balance 3 to 7 years Documentaries - News and Sport Other tangible fixed assets Straight-line 2 to 10 years
POSSIBLE TRANSMISSIONS 1 2 OR MORE 1st transmission 100% 100% 2nd transmission – –
94 Va a) Purchased TVrights lowing amortisationmethods: when theyare transmittedaccording totheirtypeandthefol- Broadcasting rightsandin-houseproduction are amortised 1.5.1. Generalprinciples 1.5 Inventories is alsomade. is provided. Ifnecessary, aprovision forliabilitiesandcharges When thevalueinuseislessthanpurchase cost,amortisation •o •e Their valueinuseis: Financial assetsare valuedattheirpurchase cost. 1.4 Financialassets gramme willnotbebroadcast. A provision ismadeifitbecomesprobable that agivenpro- to orexceeding52minutes d) Programmes ofdurationequal c) Programmes ofdurationlessthan52minutes Series -Cartoons) b) Purchased TVrights transmission ascontractuallydefined. grammes are amortisedaccording tothevaluationofeach Some purchases ofaudiovisualrightsrelating tochildren’s pro- Accounts 2004 n rnmsin–20% 80% ORMORE 2 – – 100% 100% 1 ORMORE 2 50% – 50% 2nd transmission 100% 1st transmission ORMORE 2 POSSIBLE TRANSMISSIONS 1 – 100% – 2nd transmission 1st transmission 1 POSSIBLE TRANSMISSIONS 100% ORMORE 2 2nd transmission 1st transmission POSSIBLE TRANSMISSIONS – 100% 1 2nd transmission 1st transmission POSSIBLE TRANSMISSIONS prospects. the companiesconcerned; riety -Theatre -DocumentariesNewsandSport). ither equaltotheproportion ofshareholders’ equityheldin r determinedbyreference totheirbusinessandprofitability (Children excludingCartoons- (Full-length feature Film-Dramas are depreciated. profit andlossaccountaswhenthecorresponding assets ment are credited toadeferralaccountandcredited tothe type. valued at50%or20%oftheirpurchase cost,according totheir accounted forunder“Rightsavailablerebroadcasting” and which oneormore rebroadcastings are stillpossible,are Rights whichhavealready beentransmittedonce,andfor 1.5.3. Rightsavailableforrebroadcasting costs plusattributableproduction overheads). for attheirpurchase costoroverallproduction cost(direct not yetbeentransmittedforthefirsttime.Theyare accounted The itemsreported underthisheadingare allrightsthathave 1.5.2. Rightsready forbroadcasting 1.6 Trade debtors which definemonthlypercentages as follows: rules laiddownbytheFrench Tax AuthoritiesonJuly3,1970, the monthfollowingendofshootinginaccordance withthe broadcast. Thisamortisationiscalculatedfrom thefirstdayof purposes ofin-houseproductions orco-productions notyet This itemessentiallyrelates toacceleratedamortisationfortax 1.9 Regulatedprovisions To grants 1.8 Government a provision ismade. sition cost.Whenthevalueislowerthanacquisitioncost, Marketable securitiesare valuedonthebasisoftheiracqui- 1.7 Marketablesecurities not yetcollectedatDecember31,2004,are notsignificant. Risks onreceivables originatingafterDecember31,2002and • • as follows: In addition,baddebtsare covered byprovisions forliabilities, All tradedebtorscurrently subjecttoclaimsare fullyprovided. 0ht 4hmnh2% 15% 5% 20% 10th to24thmonth 3rd to9thmonth 2nd month 1st month 2002. falling duebetweenJanuary1,2002andDecember31, 50% oftheirtotalamount,nettax,foraccountsreceivable prior toJanuary1,2002; 100% oftheirtotalamount,nettax,foraccountsreceivable
the extent they are confirmed, government grantsforinvest- the extenttheyare confirmed,government 95
Legal informations Financial statements Board of Directors Financial statements
Notes to the company financial statements
1.10 Provisions for liabilities and charges Gains and losses on financial instruments used for hedging purposes are determined and accounted for on a symmetrical The amount of these provisions is calculated according to the basis with the losses and gains on the hedge items except in assessment of liabilities existing at the end of each accounting the case of option premiums, which are charged when paid. period.
1.11 Pension costs 2 Notes to the balance sheet Pension cost commitments are limited to those laid down in the Collective Agreements of group companies. They are calcu- 2.1 Intangible fixed assets lated by applying to the forecast final salary the rights as antici- Intangible fixed assets essentially refer to programmes and film pated at the forecast retirement date; a provision for liabilities rights; the following table provides a detailed breakdown of and charges is recorded. their movements: 1.12 Long-service leave SUMMARY OF MOVEMENTS (in euros million) 2004 2003 Supplementary days off are granted to employees in accord- Co-productions in progress 30.1 27.6 ance with their years of service within the company. The charge Co-productions ready for broadcasting 91.4 109.0 related to these acquired long-service leave rights is computed Co-productions available for rebroadcasting 45.6 53.3 by reference to their years of service with the company, their Value of co-productions as of january 1 167.1 189.9 salary at the date of taking the benefit and the rate of staff turnover. It is discounted and then accounted for in provisions Add: for liabilities and charges. Investments January 1 to December 31 73.4 60.1
1.13 Advertising Transfer to prepayments (29.1) – Advertising revenue corresponds to the amount received from Subtract: the sale by TF1 Publicité of advertising space and sponsorship, Disinvestments January 1 to December 31 net of its fees. Cost of 1st transmission (46.3) (48.9) Cost of 2nd transmission (10.7) (6.4) 1.14 Commitments and contingencies Total cost of broadcasting (57.0) (55.3) Purchased broadcasting rights and co-productions to which Rights expired (8.1) (13.5) the station was firmly and contractually committed prior to the Rights retired (4.6) (11.7) end of the accounting period, but for which technical approval Rights sold (residual book value) (2.5) (2.4) has not yet been granted or rights have not yet been opened, Total disinvestments January 1 to December 31 (72.2) (82.9) are reported as “Commitments and Contingencies”. These commitments are valued on the basis of the amount set out in Value of co-productions as of December 31 139.2 167.1 the contract, after deduction of accrued income
Image transmission contract commitments correspond to the Breakdown fees payable to the operator in charge of the transmission Co-productions in progress 12.8 30.1 service falling due up to the end of contract period. Co-productions ready for broadcasting 70.0 91.4 Guarantees and pledges made in connection with commercial Co-productions available for rebroadcasting 56.4 45.6 leases are reported as “Commitments and Contingencies” Total 139.2 167.1
1.15 Financial instruments The Group uses financial instruments to protect itself from exposure to interest rate and exchange rate fluctuations. The Group operates on currency markets to hedge commitments linked to its business activity only and not for speculative pur- poses.
96 • TF1 purchased from TF1Production itsstakein: • TF1 purchased from Eurosport itsstakein: DEPRECIATION COST as thecorresponding depreciation, are summarisedasfollows: Movements intangiblefixedassetsforthefinancialyear, aswell 2.2 Tangible fixedassets in existingregulated provisions madeasdescribedinnote1.9. € mission ofco-productions amountedto As ofDecember31,2004,theprovision forriskofnon-trans- • • TF1 purchased thefollowing: In 2004, Financial investments 2.3 Financialassets Accounts 2004 • • • as follows: TF1 madea • • companies: TF1 subscribedtothecapitalincrease ofthefollowing • • • • (in eurosmillion) te 31591038.0 1.0 5.9 33.1 57.9 1.0 1.0 6.9 2.6 52.0 0.7 T Other T 2.9 (in eurosmillion) T Assets underconstruction Other T cnclfclte n qimn 81594149.9 4.1 5.9 48.1 58.4 4.1 echnical facilitiesandequipment 3.7 58.8 echnical facilitiesandequipment tl8. 185187.9 5.1 11.8 81.2 117.3 7.7 11.3 113.7 otal otal tdo 0 for for Studios 107 Europa TV Prima TV TV Breizh F nentoa for GLEM TF1 Digital TF1 International GLEM for TF1 International TV Breizh Studios 107 Europa TV Prima TV 0.2 Misinprovision fordepreciation ofassetsand € 84.7 Mprovision onshares insubsidiaries € € 13.8 Mfor49.00%ofshare capital 6.9 Mfor30.65%ofshare capital 01.01.04 01.01.04 NRAEDECREASE INCREASE DECREASE INCREASE € 28.2 M,ofwhich € € € € € € € € € € € € 28.0 M 24.3 M 15.3 M 45.7 M 13.5 M 30.0 M 31.12.04 31.12.04 4.7 M 9.8 M 5.9 M 4.7 M 2.3 M 1.0 M •a •v •a • This headingessentiallyrelates to: Loans visions of in thebalancesheetofTF1SAamountsto At December31,2004,thetotalvalueofshares reported r back programme asdescribedintheinformationnote,which 993,850 TF1shares were purchased aspartofashare buy- 1,245,387 TF1shares, foratotalamountof As ofDecember31,2004,thisheadingessentiallyrelates to Other financialassets 97,550 TF1shares. TF1 soldacalloptiontobankatpriceof through anunderwrittenbankloan.Aspartofthisoperation, 10% oftheirtotalinvestment.Theremaining 90%wasfinanced to thegroup’s employees.The subscribersonlycontributedto In December2001,TF1carriedoutacapitalincrease reserved 24, 2001. note, whichreceived 01-436from theVisa theCOBonApril a share buy-backprogramme asdescribedintheinformation for atotalamountof Shares stillheldasofDecember31,2004,i.e.251,537 shares 283,950 TF1shares havebeencancelled. gering theexercise bythebankofitscalloption.Moreover This employeessavingplanendedonOctober29,2004,trig- 709,900 TF1shares. TF1 soldacalloptiontobankatpriceof_18.66covering through anunderwrittenbankloan.Aspartofthisoperation, 10% oftheirtotalinvestment.Theremaining 90%wasfinanced the group’s employees.Thesubscribersonlycontributedto In October1999,TF1carriedoutacapitalincrease reserved to de Bourse eceived the Visa 99-305fromeceived theVisa the from abank poolonMarch 31,2000; 4.1; cised in2009,underthetermsandconditionsstatednote enable thepurchase optionontheleasedbuildingtobeexer- to GIEAphélie.Thisloan,includingrolled-up interest, would an equityloanof 2004: alue onDecember31,2004:
long-term loangrantedtoGIEAphélie,boughtbackbyTF1 loan grantedtoEurosport (residual valueonDecember31, € 268.8 M). € (COB) onMarch 30,1999. 191.3 M. € 49.0 M( € 7.4 M,havebeenpurchased aspartof € 31.0 Mnominalvalue)granted € Commission desOpérations 39.9 M); € 790.7 Mlesspro- € € 25.9 M. 29.26 covering 97
Legal informations Financial statements Board of Directors Financial statements
Notes to the company financial statements
2.4 Inventories 2.6 Debtors This heading essentially relates to non-transmitted broad- casting rights. 2.6.1. Trade debtors
EXTERNAL IN-HOUSE TOTAL PRODUCTION TF1 Publicité, as agent of TF1 SA, sells advertising space to PRODUCTION PRODUCTION 2004 2003 advertising agencies. For this, TF1 Publicité receives fees Rights ready for 1st broadcasting 259.8 1.1 260.9 201.7 indexed on turnover generated. The balance payable by Rights available for rebroadcasting 173.4 – 173.4 177.6 TF1 Publicité to TF1 SA in respect of such purchases was Rights in progress 117.0 0.6 117.6 110.0 €164.6 M at December 31, 2004, against €158.2 M at Value of programmes December 31, 2003. This balance is net of sales rebates, which as of january 1 550.2 1.7 551.9 489.3 have yet to be granted, and which are included in “Other Creditors”. Add: Investment January 1 to December 31 591.1 295.7 886.8 836.4 2.6.2. Other debtors Transfer to prepayments or This heading essentially relates to VAT receivable for €61.8 M, commitments and contingencies (117.0) – (117.0) – and loans granted to subsidiaries under cash management agreements for €326.7 M. Subtract: Disinvestments January 1 to December 31 2.6.3. Due dates for debtors Cost of 1st transmission 464.0 289.6 753.6 693.8 Cost of 2nd transmission 34.2 – 34.2 32.3 Debtors linked to fixed assets and current assets, excluding € Total cost of broadcasting 498.2 289.6 787.8 726.1 prepayments and accrued income, total 1,252.1 M. A proportion of the debtors carried under fixed assets €7.3 M € Rights expired 23.0 – 23.0 17.9 and current assets 893.5 M fall due within one year. Rights retired 7.6 5.1 12.7 27.4 A proportion of the debtors carried under fixed assets € Rights sold (residual book value) 4.0 – 4.0 2.4 351.1 M fall due between one and five years. A proportion of the debtors carried under fixed assets €0.2 M Total disinvestments fall due after five years. January 1 to December 31 532.8 294.7 827.5 773.8 2.7 Cash and marketable securities Value of programmes as of December 31 491.5 2.7 494.2 551.9 Marketable securities consist of money market funds for €127.0 M (on which all capital gains have been realised at Change in stock (58.7) 1.0 (57.7) 62.6 December 31, 2004).
Breakdown 2.8 Prepaid expenses Rights ready for 1st broadcasting 228.4 1.1 229.5 260.9 Prepaid expenses account for €4.1 M as of December 31, Rights available for rebroadcasting 263.1 – 263.1 173.4 2004. In 2003, prepaid expenses amounted to €117.7 M, Rights in progress – 1.6 1.6 117.6 including €113.3 M of sports broadcasting rights, which are Total 491.5 2.7 494.2 551.9 now accounted for in prepayments and accrued income (for As of December 31, 2003, the provision for risk of non-trans- the rights already prepaid) and accounted for in commitments mission of rights amounted to €91.4 M. and contingencies (for the part of rights not paid).
2.5 Prepayments and accrued income Prepayments and accrued income mainly concern purchase of broadcasting rights for €120.9 M and purchase of sport rebroadcasting rights for €87.9 M.
98 (3) Cancellationof813,950shares asof30November2004. (2) Exercise ofshare subscriptionoptions. (1) DividendspaidonApril24,2004. lowing table: The movementsforthefinancialyearwere asshowninthefol- shares eachwithanominalvalueof The share capitalisdividedinto214,759,729fullypaidordinary 2.9 Shareholders’ funds to adefiniteorlikelycashoutflow. claims andotherriskslinkedtogroup activitiesthatcouldlead Provisions forliabilitiesandchargesare valuedsoastocover TF1’s share ofthelossesgeneral partnershipsubsidiaries. The provisions relating toassociatedcompaniescorrespond to non-collection ofanaccountreceivable relating toTF1Publicité. The provision forbaddebtsincludesTF1’s share intheriskof down asshowninthefollowingtable: Defined asinnotes1.10,1.11and1.12,theseprovisions break 2.10 Provisions forliabilitiesandcharges Accounts 2004 hr aia 30–0.1 – 43.0 Share capital (in eurosmillion) o ogsrielae350802014.0 10.6 0.1 4.8 0.2 1.9 0.7 0.8 – 4.0 2. 3.5 11.8 12.1 T 1.7 Exchange loss leave for long-service 12.0 Provisions P Bad debts companies Associated Claims (in eurosmillion) 734.0 117.9 25.0 1,041.6 – 34.1 4.3 29.5 17.4 – 19.5 155.8 159.5 – – – – (139.1) – – – – – 038.6 1, 155.8 – 132.5 (101.7) (37.4) 3.6 – T 734.0 101.7 provisions Regulated 25.0 – 66.9 Sub-total 4.3 Net profitfortheyear Other reserves 63.7 Retained earnings gain reserve Long-term capital Legal reserve Share premium tl4. 331. . 34.9 6.9 13.0 13.3 41.5 otal 179.0 (139.1) 1,171.1 otal nincss1. . . . 15.7 2.0 0.3 6.8 11.2 ension costs 01.01.04 01.01.04 ––––– 7–––2.7 LOAINICES DECREASE ALLOCATION INCREASE OF PROFIT NRAEDCES DECREASE DECREASE INCREASE (GENERAL MEETING OF APRIL 0 2004 20, € 0.2. SDNOT USED USED (1) (2) (2) 151,159.5 51.5 17.3 0.1 (3) (3) 31.12.04 31.12.04 50.0 43.0 € € The heading“Bondloans”isdueaftermore than5years,for one year. Of thetotalcreditors, 2.11.5. Duedatesforcreditors ( granted byTF1Publicité,amountingto This headingincludescredit notesandrebates ontariffs tobe 2.11.4. Othercreditors heading amountingto with cashmanagementagreements isrecorded underthis Cash placedatTF1’s disposalbyitssubsidiariesinaccordance 2.11.3. Otherfinancialcreditors give upthiscredit earlywasmadeinAugust2004. amounting to The companysubscribedinJuly2002asyndicatedloan various banksatDecember31,2004. The companyhad 2.11.2. Bankborrowings r In November2003,TF1issueda7year(2010) 2.11.1. BondIssue 2.11 Creditors outflow) hasbeenidentifiedatyear-end. No otherpotentialliability(thatmightgenerateacash € edeemable infullatparwitha4.375%coupon. 0.8 Mofotherdebtsare dueaftermore thanoneyear. 500 M. 162.5 Min2003). € 350 M,foraperiodof5years.Adecisionto € 595.5 Mofundrawncredit facilitieswith € € 1,438.4 M, 146.3 M( € 190.7 Min2003). € 937.6 Mfallsduewithin € 160.7 Min2004 € 500 Mbond 99
Legal informations Financial statements Board of Directors Financial statements
Notes to the company financial statements
3 Notes to the profit and loss account 3.8 Financial profit Financial loss for 2004 breaks down as follows: 3.1 Breakdown of turnover (in euros million) 2004 2003 Advertising revenue amount to €1,559.2 M and correspond to Dividends 26.8 23.2 TF1 Publicité’s revenue, less the fees enabling TF1 Publicité to Net interest received 2.2 10.2 cover its operating costs €(141.9) M. Provisions for depreciation of financial investments (1) (84.7) (105.5) Provisions for depreciation of other debtors (6.2) (7.2) 3.2 Purchase of raw materials and consumables Provisions for liabilities (1.7) (2.2) The purchase of broadcasting rights has been accounted for as Exchange differences 1.3 (0.3) inventories. Their consumption is determined by reference to Profits on sales of marketable securities 2.2 0.7 their broadcast date or to their retirement. Bond reimbursement premium amortisation (0.4) – Net (60.5) (81.1) 3.3 Taxes and levies (1) See notes 2.3. This heading essentially records TF1’s contribution to the With respect to associated companies, interest paid amounts French National Cinema Council, for an amount of €81.5 M in to €3.0 M and interest received to €23.8 M in 2004 (respec- 2004 (€76.5 M in 2003). tively €9.7 M and €24.8 M in 2003).
3.4 Wages and salaries 3.9 Exceptional items This heading includes €5.0 M of fees paid to freelance The exceptional items for 2004 break down as follows: employees (€5.2 M in 2003). (in euros million) 2004 2003 Capital losses on disposal and retirement of programmes (12.6) (25.2) 3.5 Social security charges and employment Net provisions (including accelerated expenses amortisation for tax purposes) 14.5 17.9 This heading includes €3.7 M of employee benefits, relating to Capital gains/(losses) on disposal of financial assets (1) – (12.2) the employer’s contribution to the Company Savings Plan. Other – 0.7 Net 1.9 (18.8) 3.6 Depreciation, amortisation and provisions (1) Shares reclassified within TF1 Group, essentially. The heading “amortisation of broadcast co-productions” concerns the amortisation of the shares of broadcast co- 3.10 Corporate income tax productions. The difference between the charge based on the theoretical rate of income tax (35.43%) and the actual rate of income tax 3.7 Other expenses (45.6%) mainly results from: € This item covers payments to authors amounting to €63.9 M •the reversal of provisions for liabilities and charges (84.7) M € in 2004 (€58.1 M in 2003). and of other debtors (13.4) M, and of provisions for pension costs and long-service leave €(4.9) M, the net proft recorded by GIE Aphélie €(2.8) M and employee profit sharing €(2.5) M; •the deduction of dividends €(25.2) M. Since January 1, 1989, TF1 has chosen the status of tax consolidation, an option renewed on January 1, 1994 and on January 1, 1999. The tax savings arising due to the tax losses of group compa- nies are reimbursed to those subsidiaries.
100 COMMITMENTS GIVEN their duedatesare asfollows: On December31,2004,thevarioustypesofcommitmentsand 4.1 Commitmentsandcontingencies 4 Othersinformation 3.11 Deferred taxation several years. broadcasting rights”mainlyincludes contractsrunningover entertainment programmes for long-term contractsrelating tovarietyandgameshows The heading“Programmes andbroadcasting rights”includes change inaccountingmethoddescribednote1.1. grammes andbroadcasting rightsispartlyexplainedbythe The increase ofcommitmentsgivenandreceived forpro- (1) Including COMMITMENTS RECEIVED Accounts 2004 euae rvsos4.9– 11.31 41.79 – etc. commitments andlong-termleave, Organic taxandprovisionsforpension paidvacation, profitsharing, Employee provisions Regulated (in eurosmillion) tes4897–1. 21.9 14.5 – 17.8 9.7 27.4 4.8 99.8 – 83.5 125.7 – 18.8 353.4 56.1 8.6 65.8 25.3 235.1 17.7 4.8 62.2 T Others 1.0 transmissioncontracts Image 268.7 2.8 leases Operating 177.7 17.8 leasing Real-estate 32.4 1.0 Sports broadcastingrights 27.4 99.8 93.7 broadcasting rights – Programmes and 83.5 51.6 (in eurosmillion) 125.7 – 18.8 353.4 56.1 8.6 65.8 235.1 T 17.7 62.2 Others Guarantees transmissioncontracts Image leases Operating leasing Real-estate Sports broadcastingrights broadcasting rights Programmes and (in eurosmillion) tl5507089. ,2. ,021.4 1, 1,424.1 98.3 750.8 575.0 otal 1,293.5 1,592.1 131.7 837.6 622.8 otal € 16.2 MinUSD, (1) (1) (1) (1) € 42.8 MinCHFand LESS THAN BETWEEN OVER 5 TOTAL TOTAL LESS THAN BETWEEN OVER 5 TOTAL TOTAL ER1AD YEARS 1AND 1 YEAR YEARS 1AND 1 YEAR 0. 1. 70285189.6 566.6 228.5 716.8 17.0 25.2 111.5 309.9 100.0 381.7 189.6 566.6 228.5 716.8 17.0 25.2 111.5 309.9 100.0 381.7 UUEICES NTXFUTUREDECREASEIN TAX FUTURE INCREASEIN TAX € 214.2 M.Theitem“Sports 5 YEARS 5 YEARS € 85.1 MinGBP. 2004 2004 2003 2003 between TF1andGAN. r property atitsnetbookvalue.Thisfinancialleasecontract Since June30,2001,TF1hashadanoptiontopurchase the • • • term andamountsto pying since1992.Thiscapitalleasecontracthasa15years’ 1 quaiduPointJourinBoulogne,thatithadbeenoccu- In June1994,TF1leasedfrom GIEAphélietheoffice building, contracts Group’s commitmentsregarding real-estate leasing in force. would besignificantunderthetermsofaccountingstandards The abovedescriptionomitsnooff-balance sheetitems,which December 31,2004. No complexobligationhasbeenentered intobyTF1at standing amountswas At thatdate,theexchangevalue oftheaggregate oftheseout- in 2005undercontractssignedatDecember31,2004. foreign exchangemarketcoverthemajorityofduedatesfalling vide againstratemovements.Thesehedgingoperationsonthe sale contracts,inadditiontopurchase optioncontractstopro- r Because ofitspaymentsandreceipts effected inforeign cur- 4.2.1 Hedgingofexchangerates 4.2 Useoffinancialhedginginstruments (3) Leasepaymentscalculatedusingatheoretical interest rateof6.25%. owned thebuilding. (2) Depreciation chargesthatwouldhavebeenaccountedforifthecompany (1) Includingcapitalrepayment of • • eplaces the12-yearcommercial leaseoriginallycontracted ency, TF1SAmakesuseofforward currency purchase and ucaeoto ntebidn n20 67.1 Purchase optiononthebuildingin2009 remainingfutureleasepayments Estimated charges depreciation “Theoretical” rgnlvle164.6 Lease payments Original value equipment: building: land: € € cuuae 81.0 - accumulated esta n er17.7 5.3 65.8 13.9 - morethanfiveyears - betweenoneandfiveyears - lessthanoneyear - financialyear - financialyear cuuae 114.8 - accumulated 11.3 Minactivatingforward purchases ofUS dollars. 12.7 Minforward purchases ofUSdollars; (1) € € 164.6 M(excl.interest charges): 24.0 M: (2) € 45.1 M. € € € 61.0 M 57.9 M 45.7 M (3) 128.7 86.3 101
Legal informations Financial statements Board of Directors Financial statements
Notes to the company financial statements
4.2.2 Hedging of interest rates 4.7 Movements in provisions
In 2003, TF1 subscribed a €300 M interest rate SWAP as part (in euros million) 01.01.04 INCREASE DECREASE 31.12.04 of the hedging of interest rates policy run by the group. The Regulated provisions latter is described in the notes to the consolidated accounts. • In respect of intangible The impact of the hedging of interest rates on December 31, fixed assets (programmes) 132.5 19.6 34.1 118.0 2004 is reported within financial profits for €5.4 M. Provisions for liabilities and charges 41.5 13.3 20.0 34.8 Provisions for depreciation of fixed assets 3.0 0.5 0.3 3.2 4.3 Employees Provisions on financial assets The number of employees at the financial year-end, according • Long-term investments 106.7 84.6 – 191.3 to the standards in force under the Collective Agreement on • Related loans –––– Communication and Audiovisual Production, was as stated in Provisions for depreciation of current assets the table below: • Inventories 84.5 29.7 22.8 91.4 2004 2003 2002 • Other debtors 8.8 14.0 7.1 15.7 College 1 - Workers and clerical employees 28 34 39 Total 377.0 161.7 84.3 454.4 College 2 - Technical staff 470 465 446 College 3 - Managerial and executive staff 742 701 671 College 4 - Journalists 245 236 227 Total 1,485 1,436 1,383
4.4 Executive compensation Remuneration of the eight Executive Directors (composed of three Group Board Members and five divisional Group Direc- tors) for the year ended December 31, 2004 amounted to €6,532,884. No significant personal loans or guarantees have been granted to any Director or Board Member apart from share loans to Directors who are also Board Members.
4.5 Share purchase options and share subscription options Information relating to options granted to employees is given in paragraph 5.6 of the Report of the Board of Directors.
4.6 Directors’ fees Directors’ fees paid in 2004 amounted for €285,469.
102 at December31,2004 4.8 Financialandshort-terminvestmentsheld Accounts 2004 F ULCT 000100 14,354,311 100.00 30,000 35,018,041 17,147,927 100.00 20,202,803 100.00 19,889,933 2,307,019 100.00 4,499,998 100.00 287,981,609 200,000 100.00 169,994 150,000,000 TF1 PUBLICITE TF1 INTERNATIONAL TF1 FILMSPRODUCTION TF1 ENTREPRISES SYALIS EUROSPORT FINANCIAL INVESTMENTS F ETO .0 1 23 19 17 0.001 33 53 408 1 0.003 0.02 584 0.20 1 0.07 1 0.02 0.004 1 0.01 2 1 1,600 3,962 1 9,999 15,000 11.00 12,642 1,584 T 99.99 36,222 440 37,562 20.00 TF6 GESTION 33.92 1.00 9,999 COMIQUE COMPAGNIE 100.00 15,000 848 99.99 EUROSHOPPING 25 39,999 TRICOM 39,994 TRICOM &CIE SERIE CLUB TF6 TELEMA LES NOUVELLESEDITIONS TF1 TVB NANTES USHUAIA TV TCM GESTION 114,702 SMR6 69,130 388,319 2,600,380 @ TF1 100.00 SAGIT 99.90 34.30 100.00 1,524,324 5,000 TA 120,000 3,219,258 999 343 29.00 TA 2,619,064 TA 34.00 1,885,000 49.00 TA 5,100 7,272,201 TA 3,185,000 TA 100.00 PUBLICATIONS METROFRANCE 8,500 ALMA PRODUCTIONS Y STUDIOS 107 TA EUROPA TV e-TF1 PRIMA TV TCM DA TELESHOPPING tlfnnilivsmn 413,677,894 otal financialinvestment GNPOUTOS4,0 50 156,721 75.09 40,000 AGAN PRODUCTIONS P P P P P P P S1 000100 40,000 40,000 40,000 100.00 40,000 100.00 40,000 40,000 100.00 40,000 40,000 100.00 40,000 100.00 40,000 100.00 40,000 40,000 AS 10 AS 9 AS 8 AS 7 AS 6 AS 5 FSAE FUNDS OF SHARES UBR%SHAREHOLDERS’ NUMBER % ,0 0.0761,062 100.00 5,000 (in euros) holders’ equityownedbyTF1SA. Shareholders’ fundscorrespond totheproportion ofnetshare- AEI EUIEJU 3 8684 21,162,054 23,613,729 48,648.40 16,330.38 31,943,338 25,616,748 435 24,661,846 1,446 3,541.39 17,913.81 48,356.56 1,430 9,020 510 T T NATEXIS SECURITEJOUR CARDIF TRESORERIE FORTIS EURO TRESORERIE DEXIA MONEY3M AGF EUROCASH MARKETABLE SECURITIES tlivsmns540,675,609 126,997,715 otal investments otal marketablesecurities FSAE AT OF SHARES NUMBER SHARE PRICE SHAREHOLDERS’ 31.12.04 (in euros) FUNDS 103
Legal informations Financial statements Board of Directors Financial statements
Notes to the company financial statements
4.9 Subsidiaries and financial investments
COMPANIES OR GROUPS CURRENCY SHARE RESERVES INTEREST GROSS BOOK NET BOOK LOANS AND GUARANTEES TURNOVER NET RESULT DIVIDENDS OF COMPANIES CAPITAL HELD VALUE OF VALUE OF CREDITS AND PLEDGES IN LAST IN LAST RECEIVED SHARES SHARES GRANTED BUT GRANTED ACCOUNTING ACCOUNTING DURING THE HELD HELD NOT YET PERIOD PERIOD PERIOD REPAID (€ thousands or foreign (€ thousands) currency units if indicated) I - SUBSIDIARIES (holding of at least 50% of shares) TF1 PUBLICITE 2,400 5,983 100.00% 3,038 3,038 – – 1,701,757 5,972 3,870 TF1 FILMS PRODUCTION 2,550 16,780 99.996% 1,768 1,768 – – 16,837 561 400 TÉLÉ SHOPPING 127 460 100.00% 130 130 – – 82,876 6,684 2,924 TF1 PUBLICATIONS 75 (1,528) 99.88% 519 – 1,402 – – 44 – TF1 ENTREPRISES 3,000 431 100.00% 3,049 3,049 – – 40,068 16,772 18,020 SYALIS 36,912 6 100.00% 41,680 41,680–––(1,900) – TF1 US USD 28 – 100.00% 24 24––––– SWONKE 18 420 100.00% 900 441––––– e-TF1 1,000 (46) 99.90% 999 999 – – 49,881 1,649 – TF1 DIGITAL 99,132 (103,508) 100.00% 99,132 – 48,724 – 538 (26,715) – @ TF1 40 (2) 100.00% 40 40–––(2)– SAGIT 40 (1) 99.99% 40 40–––(1)– EUROSPORT SA 15,000 258,949 100.00% 234,243 234,243 268,823 – 364,337 14,032 – TF1 PRODUCTION 40 (156) 100.00% 40 40 13,360 – – (13,106) – TF1 EXPANSION 38 (60,839) 100.00% 94,921 94,921 53,499 – – (2,112) – SACAS 38 (24,546) 99.96% 154,628 154,628–––(1,705) – TF1 INTERNATIONAL 10,800 6,965 100.00% 66,431 9,731 15,707 – 43,232 (617) – TV BREIZH 3,404 – 71.14% 19,013 2,413 1,760 – 6,916 (5,890) – YAGAN PRODUCTIONS 53 116 75.09% 40 40 – – 5,470 40 – USHUAIA TV 10 – 99.99% 10 10––––– TAP80246 100.00% 80 80 373 – 5,391 435 – STUDIOS 107 1,800 (204) 100.00% 4,680 – 4,149 – 9,227 (1,207) – ALMA PRODUCTIONS 80 167 100.00% 80 80 2,557 – 15,827 (132) – GLEM 13,580 577 100.00% 13,822 4,022 4,096 – 47,549 (14,299) – TF1 PUBLICITE PRODUCTION 37 104 100.00% 37 37 – – 13,019 (375) 3 TAPAS 540–100.00%4040––––– TAPAS 640–100.00%4040––––– TAPAS 740–100.00%4040––––– TAPAS 840–100.00%4040––––– TAPAS 940–100.00%4040––––– TAPAS 10 40 –100.00% 40 40––––– II - FINANCIAL INVESTMENTS (holding 10% to 50% of shares) MEDIAMETRIE 930 6,039 10.75% 15 15 – – 37,066 935 25 MERCURY INTERN. FILM DEM 1,000 – 50.00% 255 255––––– TCM GESTION 40 (2) 33.92% 14 14 – – 3 – – TCM AUDIOVISUAL RIGHTS 240 8,176 34.00% 82 82 6,173 – 14,571 1,053 1,544 PUBLICATIONS METRO FRANCE 100 2,775 34.30% 12,000 12,000–––(2,673) – TVB NANTES 40 (2) 11.00% 4 4–––(2)– SMR6 75 – 20.00% 15 15 5–––– PINK TV 133 (3,151) 11.44% 497 497 816 – 766 (5,262) – EUROPA TV 6,500 – 29.00% 24,296 22,031 345 – 8,067 (8,492) – PRIMA TV 6,500 – 49.00% 13,790 12,740 420 – 13,181 (3,214) – III - FINANCIAL INVESTMENTS (holding of less than 10%) GIE CHALLENGER FORMATION 11 – 6.67% 1 1 – – 1,556 – – MEDIAMETRIE EXPANSION 1,829 (67) 5.00% 91––––110– TPS GESTION 72 (35) 0.021%––––507(92) – LES NOUVELLES EDITIONS TF1 40 (17) 1.00%––––289136– EUROSHOPPING 75 – 0.02%–––––21– TRICOM & CIE 45 7 0.07%–––––(3)– TF6 80 118 0.02%––––17,646 1,841 – TF6 GESTION 80 – 0.001%––––93– SERIE CLUB 50 327 0.004% 2 2 – – 9,617 954 – SED ODYSSEE 8 (64) 0.20% – – 1,761 – 4,426 (186) – LA CHAINE INFO 4,500 50 0.0003% – – 2,611 – 40,216 (9,663) – TF1 SATELLITE 37 – 0.04% 62 62–––(1,013) – TELEMA 1,000 4,746 0.01% 3 3 – – 36,186 90 – TRICOM 450 183 0.003%–––––118– COMIQUE COMPAGNIE 8 3 0.20% – – 1 – – (3) – Total 790,711 599,415
4.10 Post balance sheet events No significant event has occurred since the end of the year.
104 We Opinion onthefinancialstatements cial statements,basedonouraudit. of Directors. Ourrole istoexpress anopiniononthesefinan- These financialstatementshavebeenapproved bytheBoard • thespecificverificationsandinformationrequired bylaw. • thebasisofourconclusions, • the auditofaccompanyingfinancialstatementsTF1, ended December31,2004,on: Annual GeneralMeeting,wehereby report toyou,fortheyear In accordance withourappointmentbyyourShareholders’ Financial yearendeddecember31,2004 on thefinancialstatements Statutory auditors’report • As partofourreview oftheaccountingprinciplesusedby • following: we substantiateourconclusions,drawyourattentiontothe graph 1,oftheFrench Commercial Code,whichrequire that In conformitywiththeprovisions ofArticleL.225-235,para- Basis ofourconclusions Accounts 2004 the notes. programme broadcasting rights,mentionedinsection1-1of your attentiontothechangeinaccountingmethodregarding W r its assetsandliabilitiesatDecember31,2004ofthe give atrueandfairviewofthecompany’s financialpositionand dance withaccountingprinciplesgenerallyacceptedinFrance, In ouropinion,thefinancialstatements,prepared inaccor- that ourauditprovides areasonable basisforouropinion. the overallpresentation ofthefinancialstatements.We believe ples usedandsignificantestimatesmade,aswellevaluating ments. Anauditalsoincludesassessingtheaccountingprinci- supporting theamountsanddisclosures inthefinancialstate- ment. Anauditincludesexamining,onatestbasis,evidence the annualfinancialstatementsare free ofmaterialmisstate- plan andperformtheaudittoobtainreasonable assurancethat generally acceptedinFrance.Thosestandards require thatwe esults ofitsoperationsfortheyearthenended. presented onpages90to104ofthefinancialreport, accounting periods. its presentation madetoensure comparabilitybetween accounting methoddescribedinsection1-1ofthenotesand company, wecheckedtheappropriateness ofthechange in ithout callingintoquestiontheopiniongivenabove,wedraw Statutory Auditors’report
conducted ourauditinaccordance withauditingstandards ihlRSEJean-Pierre CROUZET SALUSTRO REYDEL Michel ROSSE MAZARS &GUERARD Paris laDéfenseandParis,March 17,2005 of shares andcontrolling interests. r In accordance withthelaw, weverifiedthattheDirectors’ cial positionandtheannualfinancialstatements. documents senttotheshareholders withrespect tothefinan- given intheBoard ofDirectors’ managementreport, andinthe the conformitywithfinancialstatementsofinformation We accordance withFrench generallyacceptedauditingstandards. We Specific verificationsandinformation given inthefirstpartofthisreport. fore contributed totheformationofourunqualifiedopinion, annual financialstatementstakenasawholeandhavethere- These conclusionswere formedaspartofourauditthe Co-production shares andbroadcasting rightsare• accounted • eport containstheappropriate disclosure astotheacquisition sonable. the assumptionsmadeandassociatedvaluationswere rea- performance. Whenassessingthesefigures, weensured that paring previous broadcasting forecasts withactual ability ofthebroadcasting forecasts, particularlybycom- assessed theprovisions fordepreciation byanalysingthereli- how theprovisions fordepreciation are tobedetermined.We Sections 1.2and1.5ofthenoteswhich,inparticular, defines for inaccordance withthepolicyandmethodsdescribedin tions madeandresulting valuationswere reasonable. adopted bythecompanywasrelevant, andthattheassump- mation availabletous,weensured thattheapproach sion foramortisationmayberecorded. Basedontheinfor- determine thevalueinuseofinvestmentsforwhichaprovi- Section 1.4ofthenotesdescribesmethodusedto havenocommentstomakeasthefairpresentation and alsocarriedoutthespecificverificationsrequired bylaw, in The StatutoryAuditors 105
Legal informations Financial statements Board of Directors Financial statements
Statutory auditors’ report During 2004, besides specific services rendered in conformity on regulated contracts with market conditions, TF1 invoiced certain subsidiaries a pro- portion of the residual shared administrative service costs, as Financial year ended december 31, 2004 defined in these agreements, as follows: As the Statutory Auditors of your company, we hereby present (€’000s) AMOUNT (EXCLUDING VAT) to you our report on regulated contracts. TF1 PUBLICITÉ 16,188 We are not required to investigate the possible existence of EUROSPORT 3,373 agreements, but to inform you, on the basis of the information TF1 ENTREPRISES 441 provided to us, of the basic terms and conditions of the agree- TF1 VIDÉO 1,673 ments which have been brought to our attention; nor are we LA CHAÎNE INFO 668 required to express an opinion on their appropriateness or UNE MUSIQUE 42 merit. It is your responsibility, according to the provisions of e-TF1 675 Article 92 of the Decree of March 23, 1967, to assess the pur- YAGAN PRODUCTIONS 63 pose and benefits of these agreements, with a view to TELESHOPPING 867 approving them. TF1 FILMS PRODUCTION 118 We have not been informed of any agreements, as specified by STUDIOS 107 134 Article L.225-40 of the French Commercial Code, being TF1 INTERNATIONAL 506 entered into during the year. ODYSSEE 65 In accordance with the Decree of March 23, 1967, we have TF1 PUBLICITE PRODUCTION 189 been informed of the following agreements, which were TAP 62 approved during previous years, and were applicable during ALMA PRODUCTIONS 180 the period. Total 25,244
Agreements with subsidiaries Agreements with Bouygues The agreements signed on May 24, 2002 provide for the – The common services agreement (relating to management, invoicing of specific services rendered, at the request of TF1 human resources, company law, IT, advice and finance) entered subsidiaries, by the administrative departments (management, into between TF1 and Bouygues on October 8, 1997, provides human resources, legal and finance) and a proportion of the for the invoicing of specific services rendered, at TF1’s request, residual shared administrative service costs, which includes the by these common services and a proportion of the residual amount invoiced by Bouygues to TF1 under the terms of the shared service cost. This proportion, determined by applying common services agreement between them. This proportion is key allocation criteria (number of employees, long term capital determined by applying the key allocation criteria (number of and turnover) specific to each type of cost, cannot exceed employees and turnover) specific to each type of cost. 0.45% of TF1’s consolidated turnover before tax. During 2004, the amount invoiced by Bouygues, excluding any specific services rendered as defined in this agreement, was €5.2 million. – The company’s investment management agreement enables TF1 to use Bouygues’ central administrative department for investment management purposes. During 2004, Bouygues invoiced €60,000 for these services.
106 premiums onhedginginstruments,underthisagreement. During 2004,TF1invoiced Euribor rate. of Eurosport tohedgeagainstanincrease inthethree-month TF1 hasentered intoaninterest ratecapandswaponbehalf rate plus0.375%. Interest is calculatedonthebasisofthree-month Euribor r TF1 hasagreed thatEurosport candeferforfiveyearsthe period, andmustbefullyrepaid byJanuary2,2009. This loancameintoeffect onJanuary1,2002,foraseven-year million. Eurosport, TF1grantedEurosport along-termloanof Under thetermsofalong-termloancontractbetweenTF1and Agreement withEurosport services. During 2004,Bouyguesinvoiced The fixedfeeperflyinghourwas ment, whichoperatestheaircraft fleetoftheBouyguesgroup. Bouygues enablesTF1touseBouygues’AirTransport Depart- – Theairtransportagreement regarding theaircraft ownedby Accounts 2004 epayment oftheprincipal. € 10.9 million,includinginterest and € 5,300 in2004. € 0.9 millionforthese € 278.8 ihlRSEJean-Pierre CROUZET SALUSTRO REYDEL Michel ROSSE MAZARS &GUERARD Paris laDéfenseandParis,March 17,2005 umentation from whichitisderived. the informationprovided tousconformswiththesource doc- that weplanandperformourworktoenableusverify dards generally acceptedinFrance.Thosestandards require We During 2004,TF1invoiced • lock-in cashoverathree-month periodonthebasisof draw fundsonaday-to-daybasiswithinterest• attheEONIA This agreement enablesTPSto: stake). (TF1 ownsa66%stakeandMétropole Télévision–M6a34% TPS maydrawfundsfrom both(orone)ofitsshareholders period. million to the amountofcurrent accountwasincreased from conditions astheprevious oneofDecember2003,exceptthat a current account.Thiswassubjecttothesametermsand granted TPSabridgingloanonitsconfirmedcredit lines,using Under anagreement entered intoonNovember30,2004,TF1 Agreement withTPS three-month Euriborrateplus0.15%. rate plus0.25%;
conducted ourworkinaccordance withtheauditingstan- € 299 million.Theagreement isvalidforaone-year The StatutoryAuditors € 2.3 millionunderthisagreement. € 270 107
Legal informations Financial statements Board of Directors Legal informations
Corporate governance and internal control
Board of Directors, Auditors (February 2005) Martin BOUYGUES (May 3, 1952) Chairman and Chief Executive Officer of Bouygues Patrick LE LAY (June 7, 1942) Chairman of TF1 Administrators Selection Committee Chairman and Chief Executive Officer of TF1 Appointed September 1, 1987 since October 11, 1988 • Administrator/Chairman and Chief Executive Officer Member of TF1 Administrators Selection Committee of Bouygues SA Appointed April 17, 1987 • Chairman of SCDM SA • Administrator of Société de Distribution d’Eau de la Côte-d’Ivoire • Administrator/Chairman of TV Breizh SA (SODECI) SA • Administrator of Bouygues SA • Administrator of Compagnie Ivoirienne d’Electricité (CIE) SA • Administrator of Colas SA • Administrator of Crédit Commercial de France (CCF) • Administrator of Prima TV SA • Permanent representative of TF1 International SA for TF1 Films Production SA Claude COHEN (June 24, 1941) • Permanent representative of TF1 Development SA Chairman of TF1 Publicité since October 15, 2004 for TPS Gestion SA Chief Executive Officer of TF1 Publicité • Permanent representative of TF1 for Téléma SAS between March 1, 1987 and October 14, 2004 • Permanent representative of TV Breizh SA for TVB Nantes SA Co-opted October 7, 1997 • Permanent representative of TPS Sport SNC for TPS Motivation SA • Administrator of Eurosport SA Patricia BARBIZET (April 17, 1955) Chairman of TF1 Audit Committee Michel DERBESSE (April 25, 1935) Member of TF1 Compensation Committee Joint Chief Executive Officer of Bouygues Co-opted July 12, 2000 Appointed January 19, 1994 • Administrator/Joint Chief Executive Officer of Bouygues SA • Chief Executive Officer of Financière Pinault SCA • Administrator of Bouygues Construction SA • Member and Chairman of the Supervisory Board • Administrator of Colas SA of Pinault-Printemps-Redoute SA • Administrator of Bouygues Immobilier SA • Member of the Supervisory Board of Yves Saint Laurent SAS • Administrator of Bouygues Télécom SA • Member of the Supervisory Board of Yves Saint Laurent • Administrator of Fédération Nationale des Travaux Publics SA Parfums SA • Member of the Supervisory Board of Chateau Latour (SC) • Administrator - Chief Executive Officer of Artemis SA Philippe MONTAGNER (December 4, 1942) • Administrator - Chairman of the Board of Théâtre Marigny SA Chief Executive Officer for Telecommunications • Administrator/Chairman and Chief Executive Officer of Piasa SA of Bouygues • Administrator of FNAC SA Appointed January 23, 1995 • Administrator of Air France SA • Administrator of Bouygues Telecom SA • Permanent representative of Artémis for Bouygues SA • Administrator of ETDE SA • Permanent representative of Artémis for Sebdo le Point SA • Independent Administrator of Bouygues SA • Permanent representative of Artémis for AGEFI SA • Board Member and Chairman of Christies International PLC (GB) • Board Member of the Supervisory Board of Gucci (Holland)
108 Appointed April17,1987 Member ofTF1AuditCommittee Member andChairmanofTF1CompensationCommittee Chief ExecutiveOfficer ofSCDMSAS Joint ChiefExecutiveOfficer ofBouygues Olivier POUPART-LAFARGE • Permanent representative ofTF1for MédiamétrieSA • Permanent representative ofTF1for ExtensionTVSA • Permanent representative ofTF1for TélévisionParSatellite • Permanent representative ofTF1for GlemSA • Permanent representative ofTF1for TVBNantesSA • Permanent representative ofTF1forTVBreizh SA • Permanent representative ofTF1forLesNouvellesEditions • Permanent representative ofTF1forTF6GestionSA • Administrator ofLV &COSA • Administrator ofEurosport SA • Administrator/Chairman andChiefExecutiveOfficer • Administrator/Chairman andChiefExecutiveOfficer Appointed January12,1991 Member ofTF1AdministratorsSelectionCommittee Senior ExecutiveVice President ofTF1sinceApril30,1987 Etienne MOUGEOTTE • Permanent representative ofBouyguesforImmobilierSA • Permanent representative ofBouygues forBouyguesBatiment • Permanent representative ofBouygues forBouyguesTravaux • Permanent representative ofBouygues forBouygues • Administrator ofNovasaurSA • Administrator ofBICSA • Administrator ofColasSA • Administrator ofBouyguesTelecom SA • Administrator/Joint ChiefExecutiveOfficer ofBouyguesSA Accounts 2004 Gestion SA TF1 SAS of TF1DigitalSA of TF1FilmsProduction SA International SA International Publics SA Construction SA (March 1,1940) (October 26,1942) • Board ofManagersGTBrandsHoldings,LLC(USA) • Management CommitteeMemberandChiefExecutive Officer • Director andChiefExecutiveOfficer ofKSFCorp.(USA) • Director andChiefExecutiveOfficer ofGermanMediaPartners • Director ofDirectv Group Inc.(USA) • Director andChairmanofProsiebenSat. 1MediaAG(Germany) Appointed April23,2003 Group (USA) Chairman andChiefExecutiveOfficer ofSabanCapital Haïm SABAN • Administrator ofSociétéParisienned’EtudesInformatiques • Administrator ofC2SSA • Administrator ofETDESA • Administrator ofBouyguesTélécomSA • Administrator ofBouyguesSA Co-opted March 18,1998 T Chief ExecutiveOfficer ofInformationSystemsandNew Alain POUYAT Elected April23,2002asEmployeerepresentative Archivist sinceNovember, 1994 Céline PETTON Elected February23,1988asEmployeerepresentative V Jean-Pierre PERNAUT echnology ofBouygues ice President sinceFebruary1993 of German Media Partners, LLP (British Virgin Islands) of GermanMediaPartners,LLP(BritishVirgin Islands) Management Ltd(BritishVirgin et deGestionSA (October 15,1944) (February 28,1944) (February 20,1971) (April 8,1950) 109
Legal informations Financial statements Board of Directors Legal informations
Corporate governance
Statutory Auditors
Statutory Auditors DATE OF FIRST APPOINTMENT EXPIRY DATE OF PRESENT APPOINTMENT
Salustro Reydel General Meeting General Meeting approving 8, avenue Delcassé - 75008 Paris of January 14, 1988 the 2004 annual accounts
Mazars & Guerard General Meeting General Meeting approving Immeuble Le Vinci - 4, allée de l’Arche - of May 15, 2001 the 2006 annual accounts 92075 Paris La Défense
Alternate auditors Jean-Louis Mullenbach General Meeting General Meeting approving 8, avenue Delcassé - 75008 Paris of January 14, 1988 the 2004 annual accounts
Thierry Colin General Meeting General Meeting approving Mazars & Guerard of May 15, 2001 the 2006 annual accounts Immeuble Le Vinci - 4, allée de l’Arche - 92075 Paris La Défense
The General Meeting of April 20, 2004 renewed the mandate The General Meeting of April 23, 2003 renewed the mandates of Alain POUYAT as administrator for two years. The elections of Patricia BARBIZET, Martin BOUYGUES, Claude COHEN, of Jean-Pierre PERNAUT and Céline PETTON as Employee Michel DERBESSE, Patrick LE LAY, Philippe MONTAGNER, Representatives were noted. Etienne MOUGEOTTE and Olivier POUPART LAFARGE as administrators for two years. Haïm SABAN was appointed as administrator for two years replacing Société Générale.
110 concerns themeitherdirectly or indirectly.concerns one, anddonottotakepartinavoteoranydeliberationwhich Directors ofanyconflictinterest situation,evenapotential Directors are required toinformtheChairmanofBoard of of themeetinghascastingvote. Each director hasonevote.Inthecaseofatie,Chairman tion oftheChairmanBoard isfixedat68years. elected foratwo-yeartermofoffice. Theagelimitforthefunc- Directors andtheChairmanofBoard ofDirectors are eral MeetingofApril23,2003. as specifiedbythe“Bouton”report, wasappointedattheGen- Three women sitontheBoard, andoneindependentdirector, Article 66ofthe86-1067LawSeptember30,1986. elected bytheemployeeelectoralcollegesasdefined Incorporation, twoare representatives oftheemployees which, asrequired statutorilybyArticle10oftheArticles The Board ofDirectors currently comprises12directors, of policy.corporate governance investors who,asmajorityshareholders, shapetheGroup’s The TF1Board ofDirectors iscontrolled bythegroup of 1 Board ofDirectors Chairman’s powers. consider itnecessarytoimposeanyspecificlimitationsonthe structure is.Inviewofthewayitfunctions,Board didnot Board, andassess howappropriate theBoard’s organisational practices,especiallytheoperatingmethodsoftheir ernance Furthermore, eachyeartheDirectors review corporategov- rights toFrench League1football. example, whenTF1tookpartintheinvitationtobidforTV situation oftheGroup. Anadhoccommitteewasformed,for ects andassesstheirimpactontheaccountsfinancial some oftheirnumberformadhoccommitteestovalidateproj- process. Forlargeprojects, theDirectors mayrequest that r r requirements,with corporategovernance Board Directors are Acting intheinterests ofshareholders andwishingtocomply Corporate governance Accounts 2004 esponsible forensuringthattheyhaveattheirdisposalthe esources andinformationneededforthedecision-making •P • • • The Board ofDirectors’ functionisto: mation disclosedtotheBoard ofDirectors. meetings are obligedtotreat asstrictlyconfidentialanyinfor- The Directors andanyotherpersoninvitedtoattendBoard communiqué. sonal dealingdetails,totheAMFandmakesitpublicina information, whichmustincludetheindividual’s nameandper- des Marchés Financiers”“AMF”).TF1thencommunicatesthe General RulesoftheFrench stockexchangeauthority(“Autorité five daysofthetradeinaccordance withArticle222-14ofthe sonal linkswiththem.Thesedealingsshouldbereported within shares undertakenbythem,orpersonshavingcloseper- effect onNovember25,2004,todeclare anydealinginTF1 Directors were informed ofthenewobligationthatcameinto Board ofDirectors metonfiveoccasions. sentations ortoexamineexceptionalissues.In2004,theTF1 bility ofadditionalmeetingsbeingconvenedforparticularpre- Board meetingsare inprincipleheldquarterly, withthepossi- the Board toprovide explanationsandsubstantiveinformation. on theirowninitiative;theChairmanispermanentlyavailable to Directors can,moreover, provide supplementary information pertaining tohumanresources andheadcountchanges. affect theGroup’s consolidatedprofits andsignificantissues situation, cashflowandliabilities,eventsaffecting orlikelyto plans, informationformonitoringactivity, turnover, thefinancial company andtheGroup, includingstrategicandbusiness Information isreceived the periodicallybyDirectors concerning Committee. Compensation CommitteeandtheAdministratorsSelection the minutesofmeetingsAuditCommittee, with potentialrisksidentified.Directors are alsoprovided with constraints, ismadeavailabletoDirectors duringmeetings, ations anddecision-making,subjecttoregulatory andsocial All documentsandpertinentinformationnecessaryfordeliber- • • Monitor theirexecution; restructuring operations; internal Approve significantly-sizedoperations,majorinvestmentsand strategy; Determine thecompany’s andtheGroup’s direction and Decide thecompensationofcompanyofficers. Carry outanyverificationswhichitconsidersappropriate; r ovide informationtoshareholders andthefinancialmarkets; 111
Legal informations Financial statements Board of Directors Legal informations
Corporate governance
The main decisions in 2004 of the Board were the following: 2 The Audit Committee •Meeting of February 23: to approve the 2003 annual Created on February 24, 2003, the Audit Committee is made accounts and call the general meeting; up of Patricia BARBIZET, Chairman, and Olivier POUPART- • Meeting of June 8: review of the first quarter 2004 accounts, LAFARGE. and the strategic directions and business lines of the Group; The role of the Audit Committee is to: • Meeting of July 7: review and authorisation of the acquisition • examine the company and consolidated accounts before of an interest in Socpresse; their presentation to the Board; • Meeting of August 31: review of the accounts for the first half • ensure the appropriateness and long-term validity of the of 2004; accounting procedures adopted for the preparation of these • Meeting of November 30: review of the accounts for the third accounts; quarter, analysis of business activity and the estimated annual • verify the internal collection and control procedures involved results for 2004, the three-year plan, authorisation to submit in drawing up the relevant information; bids for the TV broadcasting rights to French League 1 foot- •report and make recommendations on the above, both regu- ball and examination of the Board’s working; larly each time accounts are presented and/or on any other •Directors’ fees for 2004 were allocated as follows: occasion justifying it; – Director: the standard annual amount is €15,250. Fifty per •give their view on the reappointment or nomination of the cent of the fee is by reason of the Directors’ responsibilities statutory auditors; and fifty per cent for attending Board meetings; • examine conclusions of the Internal audit function and to • Committee member: validate its annual plan. – Audit committee: €2,000 per member, per quarter, – Compensation committee: €1,200 per member, per Four meetings are planned per year during which the quarterly, quarter, half-yearly and annual accounts are examined before their – Selection committee: €1,200 per member, per quarter; presentation to the Board. • For the specific mandate of Chairman: €6,000 per month. The Committee held four meetings in 2004 and one in the first There are three specialised committees within the Board: the quarter of 2005. The minutes of each meeting are presented to Audit Committee, the Compensation Committee, and the Directors. Director Selection Committee. The Board determines the make-up and powers of the committees, which carry out their 3 The Compensation Committee activities under their own responsibility, and designate their Created in 1989, the Compensation Committee is made up of members from among the Directors. Olivier POUPART-LAFARGE, Chairman, and Patricia These committees are composed of two or three Directors. Any BARBIZET. individual occupying the function of Chairman, Chief Executive The role of the Compensation Committee is to: Officer or Joint Chief Executive Officer of TF1 is not entitled to •propose to the Board of Directors the compensation and be a member of the Audit Committee or the Compensation benefits in kind to be granted to company officers; Committee. The three committees meet at the initiative of their • examine the stock subscription or purchase plan(s) for direc- respective chairmen or at the request of the Chairman of the tors and employees; Board of Directors and can deliberate provided two of their •propose compensation and incentive plans for group members are present. Decisions are made by simple majority executives; of the members and they report on their work at the next • submit to the Board each year the draft report required by meeting of the Board of Directors. French Commercial Law (Code de commerce) concerning: – the compensation and benefits granted to company officers by the company and companies it controls; – the stock subscription or purchase options granted to and exercised by company officers and the 10 company employees who are the principal beneficiaries; – the options granted to and exercised by employees of companies under the majority control of TF1. The Committee met twice in 2004 and once in the first quarter of 2005. The minutes of each meeting are presented to administrators.
112 company. work andtoprocedures control implemented bythe ofinternal to thepreparation andorganisationoftheBoard ofDirectors’ Law (LoisurlaSécuritéFinancière) ofAugust1,2003relating cates eachyearthereport required bytheFinancialSecurity As from the2004GeneralMeeting,Chairmancommuni- of 2005andminuteshavebeensenttotheDirectors. The Committeemetoncein2004andthefirstquarter • • The role oftheAdministratorsSelectionCommitteeisto: Patrick LELAY andEtienneMOUGEOTTE. Committee ismadeupofMartinBOUYGUES,Chairman, Created onFebruary24,2003,theAdministratorsSelection 4 TheAdministratorsSelectionCommittee A Accounts 2004 éiePto 100% 20% 100% 100% 80% 100% 100% 100% 100% 100% Jean-Pierre Pernaut Céline Petton Haïm Saban Alain Pouyat Olivier Poupart-Lafarge Etienne Mougeotte Philippe Montagner Pa Michel Derbesse Claude Cohen Martin Bouygues Pa TTENDANCE OFADMINISTRATORS AT BOARD MEETINGSIN2004 examine specifically: view tomakingproposals totheBoard; organisation andfunctioningoftheBoard ofDirectors witha thecomposition, periodically examinequestionsconcerning the caseofvacancyacompanyofficer. – allmeasures tobetakeninorder toensure successionin their ambitandmembership, – proposals forthecreation ofBoard workingcommittees, persons, ensuring thattheBoard ofDirectors includesindependent – possibleapplicationstoapositionasAdministrator, while rcaBrie 80% 100% tricia Barbizet trick LeLay eliminated. the riskoferror orfraudiscompletely undercontrol or As withanycontrol system,there isnoabsoluteguaranteethat the company’s values,standards andrules. internal cable lawsandregulations, representative socialbodiesand behaviour takeplacewithinaframeworkdeterminedbyappli- dures toensure thatmanagementactivity, operationsandstaff To • • •r the followingobjectives: designed toensure areasonable chanceoftheachievement Management andallthepersonnelofanorganisation, process implementedbytheBoard ofDirectors, theExecutive controlsAccording are tothisbenchmark,internal definedasa major players. benchmark forgoodpracticecurrently adoptedbythemarket’s Tr the “COSO”(CommitteeofSponsoringOrganizations priateness and efficacy of its internal controls.priateness andefficacy ofitsinternal dure isadopted enablingTF1toultimatelyevaluatetheappro- environment andtheprocedures inplace.Adynamicproce- TF1 Group. Theresult isafactualdescriptionofthecontrol control staffundertaken bythevariousinternal inthe This report istheproduct ofinformationgatheringandanalysis harmonisation ofprocedures. entities whichinvolvesthesearch forsynergiesandthe more, TF1 SAprovides coordination betweenthevariousgroup upstream, themainstrategicdirections oftheGroup. Further- by thecompany. Itfocuses,firstly, onTF1SA’s efforts to define, Financial SecurityLaw, control procedures theinternal setup This partofthereport aimstoprovide, inaccordance withthe internal controlprocedures. oftheChairman’sBelow youwillfindanoverview reportonthe http://www.tf1finance.fr. Internet throughtheAMFandonfollowingwebsite: The reportisalsoavailableinelectronicformatonthe quarters andcanbeobtainedbyanyindividualonrequest. is availablefreeofchargeinhardcopyformatatTF1’s head- Note: ThefullChairman’s reportoninternalcontrolprocedures Internal control report control reportInternal To control objectives 1 Internal optimal executionofoperations. conformity withcurrent legalandregulatory practices; eadway Commission)methodology, whichconstitutesthe eliable financialinformation;
analyse its internal control system,TF1Groupanalyse itsinternal hasadopted achieve theseobjectives,theGroup relies onformalproce- 113
Legal informations Financial statements Board of Directors Legal informations
Internal control report
2 Environment and control The Department also provides tax know-how and consultancy services and coordinates external auditor work and tax inspec- 2.1 General control environment tions for the entire Group.
The principles of Group’s corporate governance, its organisa- MANAGEMENT CONTROL DEPARTMENT tional structure and the transmission of its values and rules The Management Control Department presents segmented constitute the general internal control environment. financial data according to economic criteria in order to analyse •The organisation and the composition of the Board of Direc- performance, plan activity and results as well as, in a more gen- tors and specialised committees which assist it (Audit Com- eral manner, conduct company operations. mittee, Compensation Committee and Administrators It carries out detailed analysis of the Group, and in this process Selection Committee), as described in the section of the combines similar economic units into relevant categories: sub- report on the preparation and organisation of the work of the sidiaries, sales departments, technical or functional entities, Board of Directors and the Committees, are corporate gov- planning units or sectors. ernance compliant and internal control friendly. • The targets adopted by the managers in charge of the various The effectiveness of the system in each entity depends on the group entities are embodied in the three-year plan. As such, complementarity between an individual operations manager, this plan is also a key element of the internal control environ- who draws up and executes a plan validated by the General ment. It defines the objectives in terms of sales levels and Management, and a management controller who is officially costs, as well as the resources, entities and teams to be assigned to the operations manager and who assists him at mobilised. every stage in the process. Powers are delegated on the basis of guidelines set by the TREASURY AND FINANCING DEPARTMENT Group to ensure that the Group fulfils its obligations towards The Treasury and Financing Department is responsible for man- outside parties. Delegation pursues the twin objective of aging operations connected with financing, investment, making operational staff take on responsibility and adequately hedging of foreign exchange and interest rate risks, and secure fulfilling commitments. payment methods for the whole group, with the exception of some subsidiaries (TPS, TCM, etc.). These have their own 2.2 Risk evaluation treasury department providing independent financing. TF1 has set up a working group which, in collaboration with 2.3.2 Human Resources Department external consultants, has identified risks and defined a deci- sion-making system for crisis management. This initiative is in The Human Resources Department plays a key role in the the context of a more wide-ranging risk management project selection, allocation and development of human resources for led by the Major Risk Management Committee of the the efficient functioning of the various TF1 group entities. Bouygues group, in which TF1 participates. The Human Resources Department monitors compliance with the French Labour Code and changes in labour policy in con- 2.3 Control activities junction with the various employee representative bodies.
2.3.1 Administration and Finance Department
CENTRAL ACCOUNTS AND TAX DEPARTMENT The Central Accounts and Tax Department is responsible for defining the applicable accounting principles and guaranteeing the reliability of the systems for collating and processing finan- cial information and the continuity of accounting methods. It ensures that parent company and consolidated financial state- ments are a true and fair reflection of the activity of the group companies according to existing standards and regulations. It also ensures that this information is supplied in the correct format and in a sufficiently timely manner for its effective use.
114 sary incertainentitiesoftheGroup. group. Specificbusinessapplicationsare usedwhere neces- ment andconsolidationtools,are deployedthroughout the financial informationsystems,notablyaccounting,manage- Extensive ational andfunctionalmanagementsconcerned. operations securely andefficiently, thisinliaisonwiththeoper- the ITsystemsneededtogenerateinformationandmanage TF1’s Technology Resources Departmentdefines andInternal 2.4 InformationandCommunications management ofrisks. mittee, whoseobjectiveisongoinganalysisandoperational Furthermore, thisdepartmentoperatesTF1’s MajorRisksCom- utilised. necessary humanandtechnicalresources are availableand It guaranteesbroadcasting continuitybyensuringthatthe operations andgeneralservices. as wellthemanagementofproperty portfolio,logistics implementation andmaintenanceofITtechnicalsystems, r TF1’s Technology Resources Departmentis andInternal 2.3.4 Technology Resources Department andInternal Group. assigned tothecentralentityordifferent entitieswithinthe and drivingtheentire legalprocess forward. Lawyerscanbe The GeneralSecretariat alsoassumesarole incoordinating • • • main functions,organisedasfollows: The Group GeneralSecretariat coordinates anddrivesthree 2.3.3 GeneralSecretariat andLegalAffairs Department Accounts 2004 esponsible forproducing broadcast programmes, thedesign, nates mattersinvolvinglegalactions,property andinsurance. The InsuranceandLitigationService,whichcentrallycoordi- legal matters; TF1’s regulatory obligationsare metandcloselyfollowsall tions withtheFrench andEuropean authorities,ensures that The InstitutionalRelationsService,whichcoordinates rela- the Group; well asmonitoringthevariousaspectsofcompanylawwithin defining andsupervisingthegroup’s policyoncontracts,as The LegalAffairs Department,whichisresponsible for excluded). two Directors (TF1ExecutiveDirectors andemployeesare Created in2003,theAuditCommitteeiscomposedofatleast 2.5.2 AuditCommittee milestone. the AuditCommitteeisanimportantcorporategovernance auditfunctionoperatedbyadepartmentreporting to internal under control onanimproving basis.Theexistenceofan control of informationenablingrisktobeidentifiedandbrought auditthereforeInternal constitutesatoolfortheanalysisand audit functionoftheBouyguesgroup. taken overtheassignmentspreviously handledbythecentral auditservice,whichhas TF1 Group nowhasitsowninternal Audit 2.5.1 Internal over, orresponsibility for, theoperationinquestion. carried outbymanagementstaff havingnodirect authority tinuously bymanagementmeansoffrequent assessments, control systemsmustthemselvesbemonitoredInternal con- control operations 2.5 Internal ment ofallstaff participants. within TF1Group, supportedbythecompetencesandinvolve- controlsThis process leadstoadynamicvisionofinternal and operationalcontrol. objectives inpursuitofthetriplegoalefficiency, riskcontrol information systemscontinuetobeoneoftheGroup’s priority Generally, ongoingimprovements toprocesses, standards and control systems. its subsidiariestosupplementandstrengthen existinginternal TF1 hasalready initiatedseveralprojects atitsmainentityand 4 Conclusion:acontinualimprovement plan This chapterisavailableinthefullversionofreport. 3.3 Procedures putinplacebyTF1Publicité flows 3.2 Securingofassetsandoptimisationfinancial nication offinancialinformation 3.1 Procedures forthegeneration,control andcommu- control procedures3 Descriptionofinternal 115
Legal informations Financial statements Board of Directors Legal informations
Statutory Auditor’s report
Statutory auditors’ report We conducted our review in accordance with the professional on the report by the chairman of the board of directors standards applicable in France Those standards require us to on internal control procedures plan and perform our work so as to assess the fairness of pres- Financial year ended december 31, 2004 entation of the information provided in the Chairman’s report on the internal control procedures used for the preparation and treatment of accounting and financial information. Those stan- dards notably require that we: As Statutory Auditors of TF1 and in accordance with the provi- • inform ourselves of the objectives and the general organisa- sions of the final paragraph of Article L.225-235 of the French tion of the internal control procedures used for the prepara- Commercial Code, we hereby present our report on the report tion and treatment of accounting and financial information prepared by the Chairman of your company in conformity with presented in the Chairman’s report. the provisions of Article L.225-37 of the French Commercial • inform ourselves of the work underlying the information Code, for the year ended December 31, 2004. thereby provided in the report. The Chairman is required to report to you in particular on the Based on our work, we have no comments to make on the dis- manner in which the work of the Board is prepared and organ- closures and statements concerning the company’s internal ised and on the internal control procedures implemented within control procedures used for the preparation and treatment of the company. the accounting and financial information contained in the report Our role is to inform you of any observations we have on the by the Chairman of the Board of Directors, prepared in con- disclosures and statements contained in the Chairman’s report formity with the provisions of Article L.225-37 of the French with regard to the internal control procedures applied for the Commercial Code. preparation and treatment of accounting and financial informa- tion. Paris la Défense and Paris, March 17, 2005
The Statutory Auditors MAZARS & GUERARD SALUSTRO REYDEL Michel ROSSE Jean-Pierre CROUZET
116 tions containedtherein. mercial Code,approves thesaidagreements andtheopera- agreements covered byArticlesL.225-38oftheFrench Com- having notedtheStatutoryAuditors’specialreport onthe and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum of theFrench Commercial Code) (Approval ofagreements covered byArticleL.225-38 Third resolution re cial statementsassubmittedtothem,welltheoperations Sheet, theProfit andLossaccountthenotestofinan- the consolidatedaccountsfor2004comprisingBalance for thesaidfinancialyear, approves thesereports togetherwith ending December31,2004andontheconsolidatedaccounts the activityandsituationofGroup forthefinancialyear in theBoard’s report andintheStatutoryAuditors’report on in theDirectors’ report andaware oftheinformationcontained having notedthattheBoard’s report ontheGroup isincluded and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum (Approval oftheconsolidatedaccounts) Second resolution the Companyfor2004financialyear. The GeneralMeetingapproves theDirectors’ managementof re cial statementsassubmitted,welltheoperations Sheet, theProfit andLossaccountthenotestofinan- accounts forthe2004financialyearcomprisingBalance year’s accounts,approves thesereports andtheannual the financialyearendingDecember31,2004andonsaid Auditors’ report ontheactivityandsituationofcompanyfor having heard theBoard ofDirectors’ report andtheStatutory and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum (Approval ofthecompanyaccounts) First resolution Ordinary part Accounts 2004 flected intheseaccountsandsummarisedreports. flected intheseaccountsandsummarisedreports. Resolutions of € for financialyears2001,2002and2003were respectively The GeneralMeetingnotesthatthenetdividendsdistributed treasury shares. re oftheamountdividends inclusion, inRetainedEarnings, French Commercial Code,theGeneralMeetingauthorises In compliancewiththeprovisions ofArticle225-210the domiciled fortaxpurposesinFrancequalifythisrelief. Article 158oftheGeneralTax Code.Onlynaturalpersons the 50%allowanceprovided forinparagraph2,section3of Meeting notesthattheentire dividenddistributedisavailablefor Article 243boftheFrench GeneralTax Code,theGeneral with effect from January1,2005,andwiththeprovisions of the 2004RectifyingFinanceActrelating toincomedistributed In compliancewiththedividendtaxreform underArticle93of Dividends willbecomepayableonMay2,2005. • Leavingabalancetobecarriedforward of Reserves, byDecember31,2005,atthelatest. long-term capitalgainsreserve toanaccountcalledOther ings, decidestotransferthe quorum andmajorityrulesrequired forordinary generalmeet- Act, theGeneralMeeting,actingincompliancewith tax regime includedinArticle39ofthe2004RectifyingFinance In order tocomplywiththereform ofthelong-termcapitalgains gains reserve toareserve account) (Transfer ofamountsfrom thespeciallong-termcapital Fifth resolution and • Distributionofadividend and distributionofprofits proposed bytheBoard ofDirectors: from theprevious year, approves thefollowingappropriation € € noting thatthedistributableprofit amountsto and majorityrulesrequired forordinary generalmeetings,after The GeneralMeeting,actingincompliancewiththequorum (Appropriation anddistributionofprofits) Fourth resolution 0.65, 155,794,174.71 and per (i.e. anetdividendof lative totheTF1shares thatTF1isauthorisedtoholdas 185,308,945.65, givenanetprofit fortheyearof € 0.2; thecorresponding taxcredits were € € 0.325 onthebasisa50%taxcredit. € 0.2 nominalshare) 0.65 and € 0.65 netforeachshare ofanominalvalue € € 0.65 29,514,770.94 inretained earnings € 25,000,894.42 inthespecial € € € 139,138,823.85 0.325, 46,170,121.80 € 0.325 117
Legal informations Financial statements Conseil,d’administration Legal informations
Resolutions
Sixth resolution Tenth resolution (Presentation of share subscription or share purchase (Renewal of a Director’s term of office) options granted or exercised in 2004) The General Meeting, acting in compliance with the quorum The General Meeting, acting in compliance with the quorum and majority rules required for ordinary general meetings, and majority rules required for ordinary general meetings, renews the term of office of Martin BOUYGUES, which expires having heard the special report of the Board of Directors on at the end of this Meeting, for a further two years. share subscription or share purchase options granted or exer- His new term of office shall end at the close of the General cised in 2004, notes the information contained in this report. Meeting convened to rule on the accounts for the 2006 finan- cial year. Seventh resolution (Presentation of the way the work of the Board of Direc- Eleventh resolution tors is organised and concerning internal control proce- (Renewal of a Director’s term of office) dures) The General Meeting, acting in compliance with the quorum The General Meeting, acting in compliance with the quorum and majority rules required for ordinary general meetings, and majority rules required for ordinary general meetings, after renews the term of office of Claude COHEN, which expires at hearing the Chairman of the Board of Directors’ report on the the end of this Meeting, for a further two years. way the work of the Board of Directors is organised and con- Her new term of office shall end at the close of the General cerning the internal control procedures put in place by the Meeting convened to rule on the accounts for the 2006 finan- company and the Statutory Auditors’ special report on the cial year. section of the Chairman’s report devoted to internal control pro- cedures for collating and processing accounting and financial Twelfth resolution information, takes note of the information contained in these (Renewal of a Director’s term of office) reports. The General Meeting, acting in compliance with the quorum Eighth resolution and majority rules required for ordinary general meetings, (Presentation of share buy-back operations in 2004) renews the term of office of Patrick LE LAY, which expires at the end of this Meeting, for a further two years. The General Meeting, acting in compliance with the quorum and majority rules required for ordinary general meetings, after His new term of office shall end at the close of the General hearing informations relative to acquisitions, transfers or can- Meeting convened to rule on the accounts for the 2006 finan- cellations of shares realised in 2004 and mentioned in the cial year. directors’ report of the Board of Directors, takes note of the information contained in this report. Thirteenth resolution (Renewal of a Director’s term of office) Ninth resolution The General Meeting, acting in compliance with the quorum (Renewal of a Director’s term of office) and majority rules required for ordinary general meetings, The General Meeting, acting in compliance with the quorum renews the term of office of Philippe MONTAGNER, which and majority rules required for ordinary general meetings, expires at the end of this Meeting, for a further two years. renews the term of office of Patricia BARBIZET, which expires His new term of office shall end at the close of the General at the end of this Meeting, for a further two years. Meeting convened to rule on the accounts for the 2006 finan- Her new term of office shall end at the close of the General cial year. Meeting convened to rule on the accounts for the 2006 finan- cial year.
118 the dutiesofDirector ofthecompany. entrusted tohimandthatthere isno bar onhimcarryingout Olivier BOUYGUESdeclares thatheacceptstheposition cial year. Meeting convenedtoruleontheaccountsfor2006finan- His termofoffice shallendatthecloseofAnnualGeneral This isduetoexpire attheendofthisAnnualGeneralMeeting. has notrequested therenewal ofhistermoffice asDirector. Madrid –92200Neuilly, inplaceofMichelDERBESSE, who on September14,1950atSuresnes andresiding at15,villa appoints asaDirector fortwoyearsOlivierBOUYGUES,born and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum (Appointment ofaDirector) Seventeenth resolution cial year. Meeting convenedtoruleontheaccountsfor2006finan- His newtermofoffice shallendatthecloseofGeneral end ofthisMeeting,forafurthertwoyears. r and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum (Renewal ofaDirector’s termofoffice) Sixteenth resolution cial year. Meeting convenedtoruleontheaccountsfor2006finan- His newtermofoffice shallendatthecloseofGeneral expires at theendofthisMeeting,forafurthertwoyears. r and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum (Renewal ofaDirector’s termofoffice) Fifteenth resolution cial year. Meeting convenedtoruleontheaccountsfor2006finan- His newtermofoffice shallendatthecloseofGeneral expires attheendofthisMeeting,forafurthertwoyears. r and majorityrulesrequired forordinary generalmeetings, The GeneralMeeting,actingincompliancewiththequorum (Renewal ofaDirector’s termofoffice) Fourteenth resolution Accounts 2004 enews thetermofoffice ofHaïmSABAN,whichexpires atthe enews thetermofoffice ofOlivierPOUPART-LAFARGE, which enews thetermofoffice ofEtienneMOUGEOTTE,which • release shares whenthe rightsattachedtotradablesecurities • • cancel shares underthetermsfixedbyExtraordinary The companyisauthorisedto: account 251,357shares ownedbythecompany. 15,2005,amaximum of21,154,435shares, takingin ruary shares uptoalimitof10%theshare capital,i.e,onFeb- deems appropriate andononeormore occasions,itsown of theFrench Commercial Code,topurchase, wheneverit the conditionsandobligationsmentionedinArticleL.225-209 the legalandregulatory conditionsapplicableandinparticular Board ofDirectors, withpowertodelegate,incompliance Financiers information notecertifiedbythe hearing thereport from theBoard ofDirectors andseeingthe and majorityrulesrequired forordinary generalmeetings,after The GeneralMeeting,actingincompliancewiththequorum (Share buy-backs bythecompany) T convened toapprove theaccountsfor2010financialyear. financial yearsItwillendatthecloseofGeneralMeeting Auditorforsix 8, avenueDelcassé-75008Paris,Alternate Michel SAVIOZ, onOctober29,1948atParis,residing born MULLENBACH, is th and majorityrulesrequired forordinary generalmeetings,notes The GeneralMeeting,actingincompliancewiththequorum Auditor’s((Appointment ofanAlternate termofoffice) Nineteenth resolution approve theaccountsfor2010financialyear. office willendatthecloseofGeneralMeetingconvenedto appointment forafurthersixfinancialyears.Theirnewtermof REYDEL, isabouttoexpire andhasdecidedtorenew the that thetermofoffice ofthestatutoryauditor, SALUSTRO and majorityrulesrequired forordinary generalmeetings,notes The GeneralMeeting,actingincompliancewiththequorum (Renewal ofaStatutoryAuditor’s termofoffice) Eighteenth resolution wentieth resolution sharing schemes,companysavings schemes; transfers ofshares toemployeesundercompanyprofit pany officers andgroup’s subsidiaries officers, allocationsor buy programs, allocationsoffree shares toemployees,com- entitling theholdertoreceive shares ofthecompany, share Shareholders Meeting; at the term of office of the Alternate Auditor,the termofoffice oftheAlternate Jean-Louis (French stockexchangeauthority),authorisesthe about toexpire anddecidedtoappoint Autorité desMarchés 119
Legal informations Financial statements Board of Directors Legal informations
Resolutions
• provide liquidity and make a market in its shares through an Extraordinary part independent investment services provider operating within • Reading of Board of Directors’ reports and of Statutory Audi- the terms of a liquidity agreement conforming to a Code of tors’ reports. Ethics approved by the Autorité des Marchés Financiers; • retain shares for subsequent payment or exchange in the • Authorises the Board of Directors to reduce the company’s context of takeovers; capital through the cancellation of treasury shares. • to organize every market operations that would be authorized • Delegates full powers to the Board of Directors to increase by the Autorité des Marchés Financiers, and more generally the company’s capital, with preferential subscription rights to realise any operation laid down by the Law. maintained, via the issuance of shares or securities giving The company is authorised to acquire its own shares in the access to the company’s capital. open market or off-market within the following limits (subject to • Delegates full powers to the Board of Directors to increase adjustments following any corporate transactions affecting the the company’s capital by incorporating premiums, reserves or company’s): profits. € • the acquisition price must not be higher than 55 per share • Delegates full powers to the Board of Directors to increase (excluding acquisition expenses); the capital, with the elimination of preferential subscription € • the selling price must not be less than 15 per share rights, via the issuance of shares or securities giving access (excluding selling costs); to the company’s capital. • total funds allocated to a share buy-back programme must • Authorises the Board of Directors to set the issue price for not exceed (21,154,435 shares x €55=) €1,163,493,925. public offerings, without preferential subscription rights, via The General Meeting decides that shares can be sold by any the issuance of shares or securities giving access to the method, including the use of derivatives (however, the writing of capital within the limits of 10% of the said capital. put options is excluded) in the open market or off-market, and • Delegates full powers to the Board of Directors to proceed at any moment. Share exchanges in conformity with current with capital increases to remunerate contributions in the form rules and regulations are ruled out. There is no limitation on the of shares or securities giving access to the capital. proportion of share buy-backs that can be transacted as block trades. These can account for the entire programme. • Delegates full powers to the Board of Directors to proceed with a capital increase, without preferential subscription If the allocation of shares is no longer in line with the company’s rights, to remunerate shares tendered in share exchange strategy, shares concerned could be sold under the agreement offers. of the Board of Directors and alongside with a communication to the market. • Delegates full powers to the Board of Directors to increase the number of shares to be issued in the event of a capital The Board of Directors is vested with full powers for imple- increase with or without preferential subscription rights. menting this authorisation, particularly for deciding if initiating a buy-back programme is warranted and determining the terms • Delegates full powers to the Board of Directors to issue any and conditions. The Board can delegate these powers for the securities entitling the holder to debt securities. purposes of placing any stock market orders, concluding • Delegates full powers to the Board of Directors to proceed agreements to maintain share purchase or sale registers, filing with capital increases in favour of employees of the company returns to the Autorité des Marchés Financiers (French stock or other group companies who are members of a company exchange authority) or any other body, carrying out any for- savings scheme. malities, and generally, doing all that is required. • Authorises the Board of Directors to issue free shares from As laid down by the law, the Board of Directors’ report to the the existing stock of shares or shares to be created to the Annual General Meeting will advise shareholders of any pur- employees of the company or group, or certain categories of chases, transfers, disposals or cancellations of shares made in staff. this connection. • Delegates full powers to the Board of Directors to grant The present authorisation is valid until the next General Meeting options to subscribe or purchase shares. of the company convened to approve the accounts for finan- • Powers for registration and formalities. cial year 2005.
120 •A • The objectsofTF1are asfollows: Company objets Financial year: Date ofexpiry: Date ofincorporation: Form: APE code: Siret N°: Tr Registered office: Name: General information r process shallresume when,forwhateverreason, thelegal funds reach onetenthofthecompany’s registered capital.This funds. Thisdeductionceasesto beobligatorywhenthereserve vious losses,shallbededucted toconstitutelegalreserve 5% oftheincomeafinancial year, asreduced byanypre- Statutory appropriation of income Accounts 2004 provisions inforce. Its activityistocomplywithitscontractconditionsandthelegal eserve fallsbelow thisonetenth. bution oftelevisionbroadcasts includingalladvertising. notably theconception,production, programming anddistri- authorised bylawsandregulations inforce, comprising Operation ofanaudiovisualcommunicationsservice,suchas ticular: development ofthecompany’s objectivesorassets,inpar- Also anyrelated orcomplementaryobjectslikelytofurtherthe transactions directly orindirectly connectedtotheabove. exchange ofallassets,entitlementsorotherwise. ciation inhiddenpartnershipsormanagementin-kind purchase ofcompanystockorrights,merger, alliance,asso- companies, contribution,limitedpartnership,subscription, third party, aloneorwithothers,bywayofcreation ofnew all ofthesedirectly orindirectly, onitsownaccountorfora broadcasting, – toprovide servicesofalltypesforsoundandtelevision – tosellandproduce advertising, intended fortelevision,cinemaorradiobroadcasting, any recorded imagesand/orsoundtracks,reports andfilms – tostudy, toproduce, toacquire, tosell,rent andtouse ade register: Information concerning TF1SA Information concerning ll industrial,commercial, financial,investmentandreal estate (“Société Anonyme”) Public limitedcompany France 92656 Boulogne-BillancourtCedex, 1, quaiduPoint-du-Jour, January 1toDecember31 January 31,2082 September 17,1982 922D 326 30015900067 326 300159RCSNanterre TELEVISION FRANÇAISE1-TF1 to thenumberofshares heldbyeachoneofthem. This profit isdistributedbetweenallshareholders proportionally • • Distributable incomeiscomprisedof: shareholders possessing 5%atleastoftheregistered capital. law, ifrequested atashareholders’ meetingbyoneormore deprived oftherighttovoteunder theconditionslaiddownby exceeding thefractionwhichought tohavebeendeclared are If notdeclared undertheabove conditions,theshares is crossed upward ordownward. ditions, eachtimethethreshold of0.5%,1%,2%, 3% and4% This declarationmustbemade, complyingwiththeabovecon- he/she possesses. istered office, thetotalnumberofshares andvotingrights to theCompanybyreturn-receipted registered mail,atitsreg- enabling him/hertoreach ortoexceedthisthreshold, declare rights, shall,withinfivedaysofregistration oftheshares of atleast0.5%,1%,2%,3%and4%capitalorvoting Any person,actingaloneorwithothers,whoattainsaholding at leastthree daysbefore thedateofmeeting. dence, dulycompleted,mustreach TF1attheaboveaddress The singleformtoappointaproxy ortovotebycorrespon- sentative forthemeeting. by whichtheycanvotecorrespondence orappointarepre- meeting, request from TF1attheaboveaddress asingleform Shareholders may, atleastsixdaysbefore thedateof • • or toberepresented attheGeneralMeeting: In order tohavetherightattend,votebycorrespondence spouse oranothershareholder. may onlyberepresented attheGeneralMeetingbyhis/her All shareholders mayvotebycorrespondence. Ashareholder irrespective of thenumberofshares theyown. All shareholders mayparticipateintheGeneralMeetings, General meetings the incomecarriedforward from theprevious financialyear. the ArticlesofAssociation; amounts credited toreserves, inapplicationofthelawand the incomeoffinancialyear, lessprevious lossesand Point-du-Jour, 92656BoulogneCedex,France. Department (GeneralMeetingssection),TF1,1,quaidu set forthemeeting.ThecertificatemustbesenttoLegal the shares willremain unavailablefortradingupuntilthedate date setfortheGeneralMeeting,acertificatedeclaringthat account, tosendthecompany, atleastfivedaysbefore the intermediary, withwhomtheirshares are recorded inan Holders ofbearer shares mustarrangefortheauthorised with simpleproof ofidentity; date setfortheGeneralMeetingandtheyare thenadmitted holders’ register ofthecompanyatleastfivedaysbefore the Holders ofregistered shares mustbeincludedintheshare- 121
Legal informations Financial statements Board of Directors Legal informations
Information concerning TF1 SA
Company responsible Stock warrants exercised – 2003 for share administration In 2003, on the exercise of stock warrants under Plans no. 2 and financial information and no. 3, 1,103,570 new shares with a nominal value of €0.2 were subscribed. This resulted in a capital increase of TF1 as issuing company. €220,714 and a share premium of €10,340,813.90.
Stock warrants exercised – 2004 Capital (Article 6 of the Articles of Association) In 2004, on the exercise of stock warrants under Plans no. 2 and no. 3, 419,530 new shares with a nominal value of €0.2 were subscribed. This resulted in a capital increase of €83,906 Changes and a share premium of €3,579,753. Employee saving plan - 1999 Amount In the scope of its employee saving plan, TF1 issued in 1999 On February 15, 2005, the capital of TF1 amounted to 118,316 new shares with a nominal value of FF10. This resulted €42,811,946, divided into 214,059,729 shares each of €0.2 in a capital increase of FF1,183,160 and a share premium of nominal value. FF114,673,050.36 The issued shares represent 100% of the share capital and Capital increase through an increase of the share nominal existing voting rights. value, following the conversion of the capital into Euros - There are no founder’s shares, dividend-right certificates, con- 2000. vertible or exchangeable bonds or other securities giving access The capital was increased by an amount of FF65,870,984.17 to the capital, nor voting rights certificates, nor double voting from FF211,183,160 to FF277,054,144.17 by the transforma- rights. tion of FF30,704,644.76 coming from “revaluation reserve” and There is no statutory clause limiting the free negotiability of shares. FF35,166,339.41 from “other reserves”. The company is authorised to make use of the legal provisions The nominal value of each share was increased from FF10 to allowed to identify shareholders possessing voting rights in its FF13.11914 (€2). The capital, converted into euros as of Jan- own shareholders’ meetings. In order to keep informed as to uary 1, 2000 amounted to €42,236,632, divided into the breakdown of its capital, TF1 draws up from time to time 21,118,316 shares of €2 each. lists of holders or bearers of registered shares via Euroclear.
Nominal value split – 2000 Nominal value was split ten for one by decision of the General Authorised issues Meeting dated April 18, 2000 and taking effect on June 21, Following the combined Shareholders’ General Meeting of April 2000. The number of shares went from 21,118,316 to 12, 2005, assuming it gives approval, the company will be 211,183,160. authorised to issue, during a period of 26 months, one or more bond debentures up to a maximum nominal amount of Employee saving plan – 2001 €1,200,000,000. In the scope of its employees saving plan, TF1 issued in 2001 The table below details the different issues that can be made € 812,919 new shares with a nominal value of 0.2. This resulted by the company. in a capital increase of €162,583.80 and a share premium of The maximum nominal amount of the authorised increases €18,867,849.99. (whether immediate or at a later date) in share capital is € Stock warrants exercised – 2002 120,000,000. The maximum nominal amount of the authorised bond issues In 2002, on the exercise of stock warrants under Plans no. 2 is €1,200,000,000. and no. 3, 2,054,500 new shares with a nominal value of €0.2 were subscribed. This resulted in a capital increase of €410,900 and a share premium of €17,049,965.
122 Authorised operationsconcerningthecapitalofTF1 • • • • • • each, withthefollowingconditions: bonds amountingto market, issued onNovember12,2003,theinternational by decisionoftheBoard meetingofSeptember8,2003,TF1 2002 (ninthresolution oftheordinary partofthemeeting)and holders duringtheCombinedGeneralMeetingofApril23, In compliancewiththeauthorisationgrantedbyshare- issue bonddebentures andsecuritiestothepublic. The companydidnotmakeuseofprevious authorisationsto amaximumlimitof10%share capital. (4) Within (3) PSR:Preferential SubscriptionRight. effect from(2) With theCombined GeneralMeetingofApril12,2005. • thetotalnominalamountofbondissues(resolutions 22and24)mustnotexceed • thetotalnominalamountofvariousauthorisedincreases incapitalmustnotexceed (1) Itisspecifiedthat: Accounts 2004 Issues ofsharesandsecurities h nerto falaonsfrwihcptlzto CombinedGeneralMeeting ofallamountsforwhichcapitalization the integration offreesharesfollowing Shares tobeissuedforallocation odb euiis(optnedlgto)– without PSR with PSR Issues ofsharesandsecurities, to debtsecurities(competencedelegation) Securities entitlingtheholder usrbn oteCmaySvnsPa niie ue1,19 11 1992 June12, unlimited – CombinedGeneralMeeting – – shares Programme topurchaseown Plan Savings subscribing totheCompany plans withoutPSR withoutPSR shares, withoutPSR Plan(PEE), Savings subscribingtoaCompany foremployees Shares reserved in apublicexchangeoffer(competencedelegation) delegation) for contributionsinshares(power Shares andequitiespaying will bepossible(competencedelegation) hrsadeute,pyn o hrscnrbtd CombinedGeneralMeeting Purchase ofsharesforemployees Issues ofsharesforstockoptions offree Shares tobeissuedforallocation payingforsharescontributed Shares andequities, Capital reductionthroughsharecancellation Capital 2ofeachyear withthefirstpaymentonNovember12,2004 12 Coupon: Issue price: Maturity: Date from whichinterest runs: Settlement date: Amount: (3) (competence delegation) (3) € 4.375% perannum,payablein arrear onNovember November 12,2010 (competence delegation) 500 M 99.381% ofthetotalnominalamount (3) (3) (power delegation) (power (power delegation) (power November 12,2003 € 500 Minthedenominationof (3) (competence delegation) November 12,2003 INCREASES € MUTO AMOUNT AMOUNT OF € € € AIU AIU UAINRMIIGGENERAL RESOLUTION MEETING REMAINING MAXIMUM DURATION ,0 6mnh 6mnh pi 2 0523 2005 12, April 26months 26months – 1,000 M OIA OIA DURATION NOMINAL CAPITAL OF BOND 120 M 2 6mnh 6mnh pi 2 0527 2005 12, April 26months 26months – 120 M 120 M (4) (4) (4) (4) (4) (4) (1) € 1,000 € € € ,0 6mnh 6mnh pi 2 0522 2005 12, April 26months 26months 1,200 M ,0 6mnh 6mnh pi 2 0524 2005 12, April 26months 26months 1,200 M ,0 6mnh 6mnh pi 2 0529 2005 12, April 26months 26months 1,200 M ISSUES € • •E • •N 1,200 M. (1) – – –1 – – – unsecured andunsubordinated obligationsof TF1. mandatory underFrench law)with allotherpresent andfuture and (subjecttosuchexceptions asare from timeto and willrankequallyrateably bothamongthemselves unsubordinated andunsecured obligationsofTF1andrank Rank ofdebt bourg andEuroclear. accepted through Euroclear France,Clearstream Luxem- The bonds–issuedunderFrench legislation–willbe bought inthiswaywillbecancelled. to proceed tobuy-backbondsonoroff themarket.Bonds making earlyreimbursement ofbonds.TF1reserves theright applicable tobonds,TF1refrains duringthewholetermfrom Normal redemption: arly redemption: ature andformofbonds: € 120 M; 6mnh 6mnh pi 2 0526 2005 12, April 26months 26 months 8mnh 8mnh obndGnrlMeig21 32 CombinedGeneralMeeting 31 2005 12, April 18months 30 2005 12, April 18 months 2005 12, April 26months 38months 26 months 26months 38 months 26 months
er1ya obndGnrlMeig20 CombinedGeneralMeeting 1year year : thebondsconstitutedirect, unconditional, except incaseofchangetaxregime at par, infullatmaturity (2) in bearer andbookentryform. Combined GeneralMeeting Combined GeneralMeeting Combined GeneralMeeting Combined GeneralMeeting Combined GeneralMeeting Combined GeneralMeeting Ordinary GeneralMeeting Ordinary A A rl1,2005 pril 12, 2005 pril 12, # 123
Legal informations Financial statements Board of Directors Legal informations
Information concerning TF1 SA
Legal framework Under the terms of Article 82 of Law of September 30, 1986, as amended, this authorisation can be automatically extended Shareholding for five years (to 2012), by reason of the simultaneous broad- casting (“simulcast”) of the channel’s programmes by digital ter- Under the terms of Article 39 of Law no. 86-1067 of September restrial transmission. By a decision of June 10, 2003, the CSA 30, 1986 as amended, an individual or entity, acting alone or has modified TF1’s licence in order to incorporate the provi- with others, shall not hold, directly or indirectly, more than 49% sions relating to the broadcasting of programmes on digital ter- of the capital or voting rights of a company licensed to operate restrial television. a national television service by terrestrial analogue route. This provision was modified by Law no. 2001-624 of July 18, Main legal provisions and obligations 2000. This limits the scope of the 49% rule to those hertzian channels with an average annual audience (analogue, cable Texts: and satellite combined) in excess of 2.5% of the total television • Contract conditions set forth by Decree no. 87-43 of January audience. A decree of the Conseil d’Etat (Council of State) 30, 1987 and the Decision regarding licensing use of fre- must define in detail how channel audiences are to be quencies of November 20, 2001, given to TELEVISION calculated. FRANÇAISE 1, until January 1, 2007; • Law no. 86-1067 of September 30, 1986 as amended by Under the terms of Article 39 of Law no. 86-1067 of September Law no. 94-88 of February 1, 1994, by Law no. 2000-719 of 30, 1986 as amended, when an individual or entity holds, August 1, 2000 and by Law no. 2004-669 of July 9, 2004; directly or indirectly, more than 15% of the capital or voting • E.C. Directive on Transnational Television of October 3, 1989, rights of a company licensed to operate a national television as modified; service by terrestrial analogue route, shall not hold, directly or • Decree no. 2001-609 of July 9, 2001, amended by decree indirectly, more than 15% of the capital of another company no. 2001-1326 of December 28, 2001 (production obligations holding a similar authorisation. of free-to-air analogue channels); Under the terms of Article 40 of Law no. 86-1067 of September • Decree no. 90-66 of January 17, 1990, as amended by 30, 1986 as amended, no individual or entity of foreign nation- decree no. 92-279 of March 27, 1992 and by Decree ality shall purchase an interest leading to foreign nationals no. 2001-1330 of December 28, 2001 (broadcasting obliga- holding, directly or indirectly, more than 20% of the capital of a tions); company licensed to operate a national television service by • Decree no. 92-280 of March 27, 1992, as amended by terrestrial analogue route. decree no. 2001-1331 of December 28, 2001 (obligations Under the terms of Article 41 of the Law of September 30, relating to advertising and sponsorship). 1986, as amended by the Law of July 9, 2004, one and the same person can hold, directly or indirectly, a maximum Decree no. 2003-960 of October 8, 2003 has amended number of seven authorisations for a national television service Article 8 of Decree no. 92-280 of March 27, 1992 related by digital terrestrial route. to sectors banned from television advertising. The legal provisions of this Decree, partly applicable from January 1, 2004, will see the opening of the following markets: Licensing conditions • Book publishing: but only for cable and satellite channels; TF1 is an audiovisual communications service subject to •Cinema: maintenance of the prohibition; licence. The initial period of licence for use of frequencies, for •Press: full opening for all broadcasters; duration of 10 years from April 4, 1987 (Law of September 30, • Retail: opening (except advertising for “commercial promo- 1986), expired in 1997. tions”): By reason of decision no. 96-614 of September 17, 1996, TF1 – From January 1, 2004 for local channels, cable and satel- received a first renewal of its licence, without other candidates lite channels and DTT channels, being considered, for five years. – From January 1, 2007 for all national analogue channels In compliance with Article 28-1 of the Law of September 30, “Commercial promotions” are defined as “any offer of prod- 1986, as modified by Law of August 1, 2000, TF1 benefited ucts or services made to consumers or the organisation of from a second “automatic” renewal of its licence for the years any events that are exceptional or seasonal, resulting 2002 to 2007, by decision of the CSA on November 20, 2001. particularly from the length of the offer, the price and terms of sale, the volume of stock put on sale, the nature, source or particular qualities of products or services or associated products or services”.
124 •a provisions inforce are thefollowing: and ofinvestmentinproduction, theprincipallegal In termsofgeneralbroadcasting obligations a detailedruling. tion tothecinemawasopencriticismandissuedFrancewith view thatmaintainingthebanontelevisionadvertisinginrela- The European Commissionexaminedthisdecree. Ittookthe Accounts 2004 •b •a •p • • • • • before 8.30p.m; W and 10.30p.m.Nocinemafilmshallbebroadcast on of whichamaximum104shallbeginbetween8.30p.m 40% ofFrench origin; 60% ofbroadcast materialshallbeofEuropean originand and forpeakviewinghours,tocinemaaudiovisualworks. rights acquired cannotexceedfouryears; 16%). Therightsrelating totwothirds ofthebroadcasting tion astoFrench-speaking contentincludedintheprevious sioning ofFrench-speaking andEuropean cartoons(obliga- forthecommis- obligation toinvest0.6%ofnetturnover 9p.m; unreleased audiovisualworks,startingbetween8p.m.and and tobroadcast 120hoursofFrench-speaking orEuropean visual works,ofwhich10.66%from independentproducers, forthecommissioningofFrench-speaking audio- turnover obligation toinvest16%oftheprevious year’s netannual bulletins andtelevisionnewsmagazines; obligation tobroadcast annually800hoursoftelevisionnews documentaries; children’s programmes including50hoursofmagazinesand obligation tobroadcast annuallyaminimumof1,000hours shall bedevotedtoFrench-speaking programmes; broadcasting right. investment mustbelessthan thepre-purchase partofthe a minorityparticipator. Theco-production element ofits sidiary ofthebroadcaster (TF1FilmsProduction) operating as works. Thisinvestmentistobeachievedthrough asub- pendent producers) intheco-production ofEuropean cinema cinema worksandatleast75%commissionedfrom inde- (withatleast2.5%dedicated toFrench-speaking turnover obligation toinvest3.2%oftheprevious year’s netannual programmes; news andforupto50%ofannualvolumeother grammes; useofownmeansproduction authorisedfor
r r maximum of192cinemafilmsperyearmaybebroadcast, oadcasting quotasapplyforthewholebroadcasting time ohibition onuseofownmeansproduction forfictionpro- ednesday andFridayevenings,Saturday allday, orSunday minimum oftwothirds oftheannualbroadcasting airtime in theinvitationtobidwasraisedeight. 2003 fordigitalterrestrial broadcasting, thenumberofchannels (two ofwhichshared thesamechannel)authorisedinJune for thesixchannels.Afterwithdrawalofthree candidates On December14,2004,theCSAlaunchedaninvitationtobid consultation onOctober22,2004. had becomevacant.Beforehand, theCSAinitiatedapublic proceed withaninvitationtobidforthesixchannelswhich Following thiscancellation,theCSAstatedthatitwould Ciné-Cinéma andPlanète. the digitalterrestrial channelsiMCM,CanalJ,Sport+,i>Télé, authorisations whichtheCSAhadissuedonJune10,2003to decision ofOctober20,2004,cancelledsixthetwentythree Following anapplicationbyTF1,theCouncilofState,inits nels: TF1,LCI,Eurosport France,TPSStarandNRJTV. SMR6 whichcombines(ontheR6network)followingchan- programmes tothepublic.Anauthorisationwasissued operations toenabletransmissionandbroadcasting ofDTT four multiplexoperatorsresponsible forthenecessarytechnical On October21,2003,theCSAissuedauthorisationsto selected channels,whichincludedthefiveTF1Group channels. On June10,2003,theCSAissuedauthorisationsto channels (TF1,Eurosport, LCI,TF6andTPSStar). chosen. Underthistender, theCSAselectedfiveTF1Group On October24,2002,theCSAreleased thelistofcandidates tenders fornationaldigitalterrestrial televisionservices. On July24,2001,theCSA(French mediaauthority)invited Digital terrestrial televisionservices sector. to indicatetheacceptabilityofprogrammes broadcast forthis the Channelhasundertakentoadopta5-categorysigncode As regards the commitmenttoprotect childhoodandyouth, 42 to42-11oftheaboveLawSeptember30,1986. sanctioned bytheCSA,pursuanttoprovisions ofArticles Compliance withlegalobligationsiscontrolled andfinancially 125
Legal informations Financial statements Board of Directors Legal informations
People responsible for financial information
TF1 31, 2002, as approved by the Board of Directors, in accor- To our knowledge, the information in this document gives a true dance with auditing standards generally accepted in France. and fair view of the Group. It includes all the statements nec- No observations or qualifications were made in our report on essary for investors to make their judgement on the assets, these financial statements. activity, financial situation, results and outlook of TF1. There are We also audited the parent company financial statements and no omissions likely to alter the significance of those the consolidated financial statements for the years ended statements. December 31, 2003 and 2004, as approved by the Board of Directors, in accordance with auditing standards generally accepted in France. No qualifications were made in our reports Paris, March 21, 2005 on these financial statements. We have drawn your attention to the changes in accounting method described in the notes to Patrick LE LAY the parent company financial statements and consolidated Chairman and Chief Executive Officer financial statements concerning: • in respect of the year ended December 31, 2003, the recog- nition of long-service leave; Statutory auditors • in respect of the year ended December 31, 2004, the accounting for programme broadcasting rights and turnover. Based on our work described above, we have no comments to Statutory auditors statement make as to the fairness of the information regarding the finan- on the registration document cial position and the accounts presented in this registration Financial year ended december 31, 2004 document. As Statutory Auditors of TF1 and in application of Article 211- 5-2 of the General Regulation of the Autorité des Marchés Paris la Défense and Paris, March 17, 2005 Financiers (AMF), the French financial markets regulator, we have examined the financial information reported in this regis- The Statutory Auditors tration document concerning the financial position and past financial statements of the company, in accordance with the MAZARS & GUERARD SALUSTRO REYDEL professional standards applicable in France. Michel ROSSE Jean-Pierre CROUZET The Chairman of the Board of Directors of TF1 is responsible for this registration document. Our role is to express an opinion on the fairness of the information regarding the financial posi- tion and the accounts contained in the registration document. Our work, which we conducted in accordance with profes- sional standards generally accepted in France, consisted of assessing the fairness of the information regarding the financial position and the accounts and verifying that this information The registration document also includes: complies with the audited financial statements. Our work also • The Statutory Auditors’ general report and their report on the consisted in reading the other information contained in the reg- consolidated financial statements for the year ended istration document in order to identify any material inconsisten- December 31, 2004 (shown respectively on pages 105 and cies with the information regarding the financial position and the 89 of the document), including the reasons for their conclu- accounts, and to report any information that was clearly mis- sions in accordance with Article L.225-235 of the French stated which came to our attention, based on our broad knowl- Commercial Code; edge of the company acquired during our audit. • The Statutory Auditors’ report, prepared in application of the Concerning forecasts of specific items estimated using a struc- last paragraph of Article L.225-235 of the French Commer- tured method, this review took into account the assumptions, cial Code (shown on page 116 of the document), on the with associated figures, made by management. report prepared by the Chairman of the Board of Directors on We audited the parent company financial statements and the the internal control procedures applied for the preparation consolidated financial statements for the year ended December and treatment of accounting and financial information.
126 E-Mail: [email protected] http://www.tf1finance.com By Internet: 92656 BoulogneCedex-France 1, quaiduPoint-du-Jour Investor RelationsDepartment TF1 By mail: on demandhistoricaldataaboutthecompany: Y 92656 BoulogneCedex-France 1, quaiduPoint-du-Jour Legal Affairs Department TF1 Legal documentscanbeconsultedat: E-mail: [email protected] Fax: (33)1412910 Te Deputy GeneralManagerandChiefFinancialOfficer Jean-Pierre MOREL Information andinvestorrelations (Fully consolidatedcompanies) Fees ofgroup statutoryauditors Accounts 2004 te 548 .%3 35 0 60 0 0 35 0 992 0.0% 102 0 60 51 15.6% 4.8% 31 839 35 84.4% 3.9% 168 29 91.3% 671 T Other otherassignments Audit: accountsexamination and consolidated certification audit, statutory Audit: 2004 ou canalsoreceive informationontheTF1Group andobtain tl75100 9 0.%945 0 1,087 102 51 934 100.0% 199 100.0% 735 otal l.: (33)1412599 (in K € ) MUT%AON 1 2 ON TESTOTAL OTHERS YOUNG (1)+(2) % AMOUNT % AMOUNT SALUSTRO-REYDEL (1) Mazars & Guérard (2) SUB-total Ernst & Ernst SUB-total Mazars&Guérard (2) (1) SALUSTRO-REYDEL 127
Legal informations Financial statements Board of Directors The Frence version of the Annual report was filed by the “Autorité des Marchés Financiers” (AMF - French stock exchange commission) on March 22, 2005, in accordance with the articles 211-1 and 211-42 of the General Regulation of the AMF. This document may not be used to support a financial operation unless it is accompanied by an operation note certified by the AMF.
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