1998 Annual Report Contents Editorial 3 SGE group organisation 4 Key figures for 1998 6 SGE‘s worldwide operations 8 Report of the Board of Directors 10 Business in 1998 Concessions 22 The present reference document, in the form of the 1998 annual report, Building and civil engineering 28 was registered with the COB (the French stock exchange commission) on Roadworks 42 March 26, 1999 under the number R.99-058. It may not be used in Electrical engineering and works 48 support of a financial transaction unless accompanied by an operation Thermal and mechanical activities 54 note certified by the COB. Financial Report Consolidated financial statements 63 Individual financial statements 91 Reports of the statutory auditors Report on the consolidated financial statements 112 Report on the financial statements 113 Report on regulated contracts 114 Special report regarding authorisation 1998 Annual Report 1998 to issue marketable securities 115 Special report regarding authorisation to reduce the capital stock by cancellation of shares 117 ● Draft resolutions Ordinary part 120 Extraordinary part 123 General information General information about the company 130 Board of Directors, senior management and supervisory bodies 139 Individuals responsible for the reference document and for auditing the financial statements 142 Photography credits: ADB, G. Bassignac (Gamma), E. Benard, SGE Group COB cross-referencing table 144 X. Boymond, Ulstein Bilderdienst, A. Da Silva, Ph. Demail, G. Durand, Chr.Gruner, St. Kalimerov, J. Kretschmann, Ph. Lesage, 1 cours Ferdinand-de-Lesseps, 92851 Rueil-Malmaison Cedex - France M. Lombard, G.Maucuit-Lecomte, M. Pallardy, B. Staubach, Tel: +33 1 47 16 35 00 - Fax: +33 1 47 51 91 02 - Internet: www.groupe-sge.com Fr. Vigouroux, Cofiroute, Sogea, Freyssinet, GTIE photo library, X. The present reference document, in the form of the 1998 annual report, was registered with the COB (the Design and production: Stratéus. French stock exchange commission) on March 26, 1999 Photo-engraving: Open Graphic. under the number R.99-058. It may not be used in Printing: JPA. support of a financial transaction unless accompanied by an operation note certified by the COB. SGE Group is a company of 1998 Annual Report Contents Editorial 3 SGE group organisation 4 Key figures for 1998 6 SGE‘s worldwide operations 8 Report of the Board of Directors 10 Business in 1998 Concessions 22 The present reference document, in the form of the 1998 annual report, Building and civil engineering 28 was registered with the COB (the French stock exchange commission) on Roadworks 42 March 26, 1999 under the number R.99-058. It may not be used in Electrical engineering and works 48 support of a financial transaction unless accompanied by an operation Thermal and mechanical activities 54 note certified by the COB. Financial Report Consolidated financial statements 63 Individual financial statements 91 Reports of the statutory auditors Report on the consolidated financial statements 112 Report on the financial statements 113 Report on regulated contracts 114 Special report regarding authorisation 1998 Annual Report 1998 to issue marketable securities 115 Special report regarding authorisation to reduce the capital stock by cancellation of shares 117 ● Draft resolutions Ordinary part 120 Extraordinary part 123 General information General information about the company 130 Board of Directors, senior management and supervisory bodies 139 Individuals responsible for the reference document and for auditing the financial statements 142 Photography credits: ADB, G. Bassignac (Gamma), E. Benard, SGE Group COB cross-referencing table 144 X. Boymond, Ulstein Bilderdienst, A. Da Silva, Ph. Demail, G. Durand, Chr.Gruner, St. Kalimerov, J. Kretschmann, Ph. Lesage, 1 cours Ferdinand-de-Lesseps, 92851 Rueil-Malmaison Cedex - France M. Lombard, G.Maucuit-Lecomte, M. Pallardy, B. Staubach, Tel: +33 1 47 16 35 00 - Fax: +33 1 47 51 91 02 - Internet: www.groupe-sge.com Fr. Vigouroux, Cofiroute, Sogea, Freyssinet, GTIE photo library, X. The present reference document, in the form of the 1998 annual report, was registered with the COB (the Design and production: Stratéus. French stock exchange commission) on March 26, 1999 Photo-engraving: Open Graphic. under the number R.99-058. It may not be used in Printing: JPA. support of a financial transaction unless accompanied by an operation note certified by the COB. SGE Group is a company of 1998 Annual Report 2 Editorial SGE’s net income for 1998 was e92.3m, the highest ever in the company’s history. This performance, achieved through a three- fold increase in operating income, is the product of three years of far-reaching restructuring. All our divisions made a return to profit, in a clear demonstration of the new impetus generated by organising the SGE group around lines of business activity. Net sales fell slightly in comparison with the previous year, although the market started to show growth in some sectors in 1998. This decrease is the sign of our commitment to optimising margins rather than increasing business volumes, and of the ability of SGE companies to implement a policy of highly selective order intake. Combined with sound financial health, this situation leaves SGE poised to take initiatives. In Europe, which will remain our primary field of operations, we will target expanding market segments and high value added businesses and proceed with external growth when it has the potential to complement and con- solidate our existing positions. We will do so in our own way, with- out excessive haste, but with ambition and determination. Already in 1998, we acquired Terre Armée Internationale, raising Freyssinet to the level of uncontested world leader in specialist civil engineer- ing, and Calanbau, strengthening Sophiane’s position among the major players in fire protection. These operations are excellent illustrations of the way we intend to root our growth firmly in the principles that have made us strong. Another event in 1998 was the start of concessions to operate the Stade de France and the Tagus river crossings. These 30-year agreements demonstrate that SGE’s strategy is to look to the long term. Our 1998 performance will be confirmed by results in the years to come. ANTOINE ZACHARIAS CHAIRMAN AND CEO 3 SGE group organisation Board of Directors Executive Committee Chairman Chairman and Chief Executive Officer Antoine Zacharias Antoine Zacharias Directors General Manager Dominique Bazy Bernard Huvelin Daniel Caille Alain Dinin Deputy General Managers Patrick Faure Xavier Huillard Roland Génin Alain Leclerc Philippe Germond Roger Martin Guillaume Hannezo Christian Péguet Pascal Lamy Henri Stouff Jean-Marie Messier Serge Michel Managers Henri Proglio Pierre Linden, Pierre Trotot Concessions Manager. Vivendi Frédéric Gauchet, (represented by Guy Dejouany) Senior Manager. Christian Labeyrie, New Directors Chief Financial Officer (subject to the adoption of the seventh, and Secretary of the Board of Directors. eighth and sixteenth resolutions by the Shareholders’ Meeting of May 10, 1999): Quentin Davies Statutory Auditors Ernst Moritz Lipp Deloitte Touche Tohmatsu-BMA Salustro Reydel 6 4 5 3 2 9 7 1 8 10 1 - Roger Martin 2 - Christian Labeyrie 3 - Christian Péguet 4 - Xavier Huillard 5 - Alain Leclerc 6 - Pierre Linden 7 - Frédéric Gauchet 8 - Antoine Zacharias 9 - Bernard Huvelin 10 - Henri Stouff 4 SGE ❚ 1998 ANNUAL REPORT Société Générale d’Entreprises Concessions Building Roadworks Electrical Thermal and and civil engineering mechanical engineering and works activities Cofiroute Campenon Eurovia GTIE group Sophiane 31% Bernard SGE Stade de France SDEL Lefort Freyssinet SGE VBU Francheteau 33% Tagus River Sogea Santerne SGE bridges Environnement 25% Prado-Carénage tunnel Norwest Garczynski Holst Traploir 28% Fournié- Grospaud The above-mentioned companies, with the exception of the concession operators, are generally wholly-owned subsidiaries of SGE (see on page 88-89). 5 Key figures for 1998 Notice Net sales Shareholders’ Throughout this document, In millions of euros equity and in millions of French francs. the financial elements are In millions of euros shown as follows: and in millions of French francs. 526.4 ¥ Euros are in upright 8,140.2 8,011.5 433.9 446.9 3,453 characters 53,397 6,552.7 52,552 2,846 2,932 Example: 8,011.5 42,983 ¥ French francs are in italics Example: 52,552 1996 1997 1998 1996 1997 1998 Operating Provisions for income/(expense) liabilities and charges In millions of euros In millions of euros and in millions of French francs. and in millions of French francs. 123.6 811 1,331.8 1,264.8 8,736 8,297 891.8 43 5,850 282 (14.1) (93) 1996 1997 1998 1996 1997 1998 Net income/(expense) Net financial In millions of euros surplus and in millions of French 92.3 In millions of euros francs. 605 and in millions of French francs. 769.5 46.9 5,048 657 308 4,310 347.1 2,277 (56.7) (372) 1996 1997 1998 1996 1997 1998 Cash flow Net capital from operations expenditure In millions of euros In millions of euros and in millions of French francs. and in millions of French francs. 196.3 256.1 1,288 1,680 197 128.2 154.6 1,292 841 1,014 114.5 751 1996 1997 1998 1996 1997 1998 6 SGE ❚ 1998 ANNUAL REPORT Breakdown of net sales by line Net sales by division and by line of business (as a percentage) of business* Building and civil engineering as a percentage and in millions of euros 1,765.2 Building 31 1,146.7 Civil engineering 47 400.1 Hydraulic works 11 391.4 Miscellaneous 11 3,703.4 Total Roadworks