Earnings Release • May 15, 2012
Earnings Release
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The first quarter of 2012 was in line with expectations. The Bouygues group reported consolidated first-quarter sales of €7 billion, up 4% (2% like-for-like and at constant exchange rates). Current operating profit came to €82 million (down 46% versus Q1 2011) and does not reflect the expected full-year performance. Net profit increased 3% to €35 million, due to an improved contribution from Alstom.
| (€ million) | Q1 2011 |
Q1 2012 |
Change |
|---|---|---|---|
| Sales | 6,686 | 6,985 | +4% |
| Current operating profit | 153 | 82 | -46% |
| Net profit attributable to the Group | 34 | 35 | +3% |
| Net debt1 | 3,293 | 5,324 | +€2,031m |
| Net gearing1 | 31% | 55% | +24 pts |
1 End of period
Bouygues Construction reported sales of €2,380 million, an overall rise of 10% (up 2% in France and 21% on international markets), or 3% like-for-like and at constant exchange rates. The current operating margin held firm at 3.3% and net profit rose 13% to €52 million.
Order intake was excellent, both in France and internationally. Orders amounted to €3.7 billion, up 31%, and included the contract for the new Paris law courts complex but not for the Nimes-Montpellier railway bypass yet. The order book was up 14% to €16.7 billion versus end-March 2011, with international contracts accounting for 47%, thus giving good visibility for future activity.
Bouygues Immobilier reported a 7% rise in sales to €472 million (up 9% in residential property and down 12% in commercial property). The operating margin was 7.4% and net profit was stable at €22 million.
First-quarter 2012 commercial property reservations amounted to €116 million, reflecting Bouygues Immobilier's ability to develop turnkey projects that meet customers' expectations. To a great extent, they offset a 28% drop in residential property reservations to €293 million in a "wait-and-see" market that is expected to contract further in 2012. Total reservations in Q1 2012 were down 6% at €409 million. The order book stood at €3 billion, 32% higher than at end-March 2011.
Colas reported a 4% rise in sales to €2,209 million, down 1% in France and up 16% internationally. Due to a particularly wet winter in Europe and to heavier costs related to the early start-up in North America, the current operating result, traditionally negative in the first quarter, was -€186 million, €21 million more than in Q1 2011, and the net loss was €127 million. Given the highly seasonal nature of Colas' activities, first-quarter results are not representative of the year as a whole.
Good commercial activity, especially in international markets, took the order book to €7.3 billion, 4% higher than at end-March 2011.
TF1 reported a 2% increase in first-quarter sales to €629 million, sustained by the growth of its diversification activities. The channel's programme choices meant that programming costs were higher than in Q1 2011, thus impacting current operating profit, which stood at €56 million. Net profit amounted to €35 million.
Bouygues Telecom reported a 3% drop in sales to €1,366 and a 3% fall in sales from network to €1,220 million. Stripping out the effect of the cut in voice and SMS call termination rates, sales from network would have risen by 6%. EBITDA declined 8% to €296 million, which mainly reflected the cut in call termination rate differentials. Bouygues Telecom confirms that it expects sales to contract by 10% in 2012 and EBITDA to decrease by around €250 million. The company has embarked on a €300-million cost-cutting plan which will start to have an impact in 2013.
Bouygues Telecom lost 210,000 contract customers from its mobile phone base in Q1 20121 . The market was particularly active after the arrival of a fourth operator on 10 January 2012, but since mid-March portability requests have gradually been returning to their previous level. Bouygues Telecom demonstrated its capacity to anticipate and respond to changing market conditions with the launch in summer 2011 of its B&YOU "bare bones" offer, which had attracted 253,000 customers by end-March 2012. The strategy of expanding the community MVNO market is continuing to pay off, with a base of 1.9 million active customers2 at end-March 2012. Bouygues Telecom is also continuing to grow on the fixed broadband market, recording a net increase of 88,000 customers in the first quarter and a base of 1.3 million customers3 at 31 March 2012.
1 The number of pre-paid mobile customers fell by 169,000
2 An estimate of the MVNO active customer base: customers who have carried out an outgoing operation during the last month
3 Includes both broadband and very-high-speed plans
Alstom contributed €58 million to Bouygues' net profit in Q1 2012, compared with €23 million in Q1 2011. Alstom performed well in commercial terms in FY2011/12, with order intake rising by 14%, exceeding the increase in sales.
Alstom has announced that it expects sales to grow by more than 5% a year over the next three years (from FY 2012/13 to FY 2014/15). It expects its operating margin to improve steadily, reaching around 8% by March 2015. Free cash flow is also expected to be positive in each of the next three financial years.
Free cash flow1 amounted to €84 million2 in Q1 2012, the same level as in Q1 2011.
Cash flow generation resulted in a slight improvement in net debt compared with end-March 2011 (€3.3 billion), before factoring in the purchase of two blocks of 4G frequencies (€911 million) and the share repurchase tender offer (€1,250 million). Including these two transactions, net debt at end-March 2012 amounted to €5.3 billion.
The Group has a high level of liquidity (€7.8 billion) and a well-balanced debt repayment schedule.
1 Before change in the working capital requirement
2 Excluding a €683-million investment in 4G frequencies
1 Subject to approval by the competition authorities
On the basis of first-quarter results, the 2012 sales target has been raised by €300 million to €32.7 billion, the same level as in 2011.
| Sales by business area (€ million) |
2011 | 2012 target |
|||
|---|---|---|---|---|---|
| actual | Reported in March |
Reported in May |
change | ||
| Bouygues Construction | 9,802 | 10,000 | 10,100 | +3% | |
| Bouygues Immobilier | 2,465 | 2,450 | 2,450 | = | |
| Colas | 12,412 | 12,500 | 12,700 | +2% | |
| TF1 | 2,620 | 2,620 | 2,620 | = | |
| Bouygues Telecom | 5,741 | 5,140 | 5,140 | -10% | |
| Holding company and other | 120 | 120 | 120 | = | |
| Intra-Group elimination | (454) | (480) | (480) | nm | |
| TOTAL | 32,706 | 32,350 | 32,650 | = | |
| o/w France | 22,601 | 22,050 | 21,950 | -3% | |
| o/w international | 10,105 | 10,300 | 10,700 | +6% |
28 August 2012: first-half 2012 results (5.45pm CET) 29 August 2012: first-half 2012 results presentation
The financial statements have been subject to a limited review by the statutory auditors and the corresponding report has been issued.
Find the full financial statements and notes to the financial statements on www.bouygues.com.
Press contact: +33 (0)1 44 20 12 01 - [email protected]
Investors and analysts contact: +33 (0)1 44 20 10 79 - [email protected]
| Condensed consolidated income statement (€ million) |
First quarter | % change |
|
|---|---|---|---|
| 2011 | 2012 | ||
| Sales | 6,686 | 6,985 | +4% |
| Current operating profit | 153 | 82 | -46% |
| Other operating income and expenses | 0 | 0 | nm |
| Operating profit | 153 | 82 | -46% |
| Cost of net debt | (74) | (79) | +7% |
| Other financial income and expenses | (5) | (1) | nm |
| Income tax expense | (29) | (5) | -83% |
| Share of profits and losses from associates | 24 | 62 | +158% |
| Net profit | 69 | 59 | -14% |
| Minority interests | (35) | (24) | -31% |
| Net profit attributable to the Group | 34 | 35 | +3% |
| Sales by business area (€ million) |
2011 | First quarter 2012 |
% change |
Change like-for-like and at constant exchange rates |
|---|---|---|---|---|
| Bouygues Construction | 2,169 | 2,380 | +10% | +3% |
| Bouygues Immobilier | 443 | 472 | +7% | +7% |
| Colas | 2,119 | 2,209 | +4% | +3% |
| TF1 | 614 | 629 | +2% | +1% |
| Bouygues Telecom | 1,404 | 1,366 | -3% | -3% |
| Holding company and other | 35 | 36 | nm | nm |
| Intra-Group elimination | (98) | (107) | nm | nm |
| Total | 6,686 | 6,985 | +4% | +2% |
| France | 5,008 | 5,026 | = | = |
| International | 1,678 | 1,959 | +17% | +7% |
| Contribution of business areas to | First quarter | % | |
|---|---|---|---|
| EBITDA (€ million) |
2011 | 2012 | change |
| Bouygues Construction | 112 | 130 | +16% |
| Bouygues Immobilier | 25 | 24 | -4% |
| Colas | (85) | (115) | nm |
| TF1 | 94 | 80 | -15% |
| Bouygues Telecom | 321 | 296 | -8% |
| Holding company and other | (10) | (12) | nm |
| TOTAL | 457 | 403 | -12% |
| Contribution of business areas to | First quarter | % | |
|---|---|---|---|
| Current operating profit (€ million) |
2011 | 2012 | change |
| Bouygues Construction | 77 | 79 | +3% |
| Bouygues Immobilier | 36 | 35 | -3% |
| Colas | (165) | (186) | nm |
| TF1 | 62 | 56 | -10% |
| Bouygues Telecom | 153 | 107 | -30% |
| Holding company and other | (10) | (9) | nm |
| TOTAL | 153 | 82 | -46% |
| Contribution of business areas to | First quarter | % | |
|---|---|---|---|
| Net profit attributable to the Group (€ million) |
2011 | 2012 | change |
| Bouygues Construction | 46 | 52 | +13% |
| Bouygues Immobilier | 22 | 22 | = |
| Colas | (113) | (123) | nm |
| TF1 | 20 | 15 | -25% |
| Bouygues Telecom | 89 | 59 | -34% |
| Alstom | 23 | 58 | +152% |
| Holding company and other | (53) | (48) | nm |
| TOTAL | 34 | 35 | +3% |
| Net cash by business area (€ million) |
First quarter | Change | ||
|---|---|---|---|---|
| 2011 | 2012 | €m | ||
| Bouygues Construction | 2,615 | 2,842 | +€227m | |
| Bouygues Immobilier | 346 | 372 | +€26m | |
| Colas | (509) | (531) | -€22m | |
| TF1 | 133 | 36 | -€97m | |
| Bouygues Telecom | (201) | (1,326) | -€1,125m | |
| Holding company and other | (5,677) | (6,717) | -€1,040m | |
| TOTAL | (3,293) | (5,324) | -€2,031m |
| Contribution of business areas to Cash flow |
First quarter | % | |
|---|---|---|---|
| (€ million) | 2011 | 2012 | change |
| Bouygues Construction | 118 | 134 | +14% |
| Bouygues Immobilier | 34 | 33 | -3% |
| Colas | (79) | (101) | nm |
| TF1 | 79 | 72 | -9% |
| Bouygues Telecom | 311 | 272 | -13% |
| Holding company and other | (5) | (3) | nm |
| TOTAL | 458 | 407 | -11% |
| Contribution of business areas to | First quarter | Change | |
|---|---|---|---|
| Net capital expenditure (€ million) |
2011 | 2012 | €m |
| Bouygues Construction | 44 | 35 | -€9m |
| Bouygues Immobilier | 2 | 2 | = |
| Colas | 71 | 53 | -€18m |
| TF1 | 8 | 5 | -€3m |
| Bouygues Telecom | 148 | 145 | -€3m |
| Holding company and other | 0 | (1) | -€1m |
| TOTAL EXCL. 4G FREQUENCIES (800 MHz) |
273 | 239 | -€34m |
| 4G FREQUENCIES (800 MHz) | 0 | 683 | +€683m |
| TOTAL | 273 | 922 | +€649m |
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