Bouygues : First-quarter 2019 results

PRESS RELEASE

PARIS

16/05/2019

FIRST-QUARTER 2019 RESULTS

•ROBUST COMMERCIAL PERFORMANCE IN THE THREE SECTORS OF ACTIVITY

•SIGNIFICANT IMPROVEMENT IN GROUP CURRENT OPERATING RESULTS

•OUTLOOK CONFIRMED

The consolidated financial statements at 31 March 2019 are presented in comparison with the financial statements at 31 March 2018, restated to take account of the application from 1 January 2019 of IFRS 16 on leases. Because of the reclassification of lease payments as amortization expense and interest expense, and the new presentation of lease expenses in the financial statements, the Group has adopted new financial indicators to continue to reflect the operating nature of lease expenses (see glossary on page 12): "EBITDA after Leases", "Current operating profit after Leases" and "Operating profit after Leases". Furthermore, "Free cash flow", "Free cash flow after WCR" and "Net debt" have also been redefined.

KEY FIGURES (€ million)	Q1 2018		Q1 2019		Change
	restated
Sales	6,826		7,933		+16%a
Current operating profit/(loss)	(94)	(58)		+€36m
Current operating profit/(loss) after Leasesb	(108)		(73)		+€35m
Operating profit	(39)c		(43)d	-€4m
Operating profit/(loss) after Leasesb	(53)		(58)		-€5m
Net profit /(loss) attributable to the Group	14	(59)		-€73m
Net debt (-)/Net surplus cash (+) at 31 March	(3,832)		(5,111)		-€1,279m

(a)Up 8% like-for-like and at constant exchange rates

(b)See glossary on page 11 for new definition

(c)Including non-current charges of €6m at TF1 and non-current income of €61m at Bouygues Telecom

(d)Including non-current income of €15m at Bouygues Telecom

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The Group's three sectors of activity continued to achieve a robust commercial performance in first-quarter 2019.

•The backlog in the construction businesses at end-March 2019 reached a record level of €34.4 billion, up 9% year-on-year and up 4% like-for-like1 and at constant exchange rates.

•Bouygues Telecom gained 459,000 new mobile customers in first-quarter 2019, including 149,000 new mobile plan customers excluding MtoM. In the fixed segment, 94,000 new FTTH customers joined Bouygues Telecom, giving the company its best quarter since the launch of its fiber offers (total net adds of 59,000 in the fixed segment in first-quarter 2019).

•TF1 posted good audiences, taking a 32.3% share of the target market of women under 50 who are purchasing decision-makers (up 0.1 points year-on-year) and 29.4% of individuals aged 25 to 49 (up 0.8 points year-on-year).

The Group reported sales of €7.9 billion in first-quarter 2019, up 16% over first-quarter 2018 and up 8% like- for-like and at constant exchange rates. For information, the Miller McAsphalt group, Alpiq Engineering Services and aufeminin were not included in the scope of consolidation in first-quarter 2018.

The Group reported a €36-millionyear-on-year improvement in its current operating loss to €58 million in first-quarter 2019, versus €94 million in first-quarter 2018, driven by the very strong performance of Bouygues Telecom and TF1, and despite an unfavorable comparison impact at Colas. The Miller McAsphalt group reported a €37-million loss in first-quarter 2019 due to the usual seasonal effect in Canada although it was only consolidated from second-quarter 2018.

The decrease in non-current income related mainly to capital gains on the sale of mobile sites at Bouygues Telecom explains the slight increase in the Group's operating loss (€43 million in first-quarter 2019, versus €39 million in first-quarter 2018).

The Group reported a net loss attributable to the Group of €59 million in first-quarter 2019, a deterioration of €73 million year-on-year, due notably to a lower contribution from Alstom (€33 million in first-quarter 2019, versus €73 million in first-quarter 2018).

As each year, the Group's first-quarter results are not indicative of full-year performance, mainly due to the highly seasonal nature of Colas' business and the application of IFRIC 21.

OUTLOOK

The Group confirmed its outlook:

•In 2019, to improve Group profitability and generate €300 million of free cash flow2 at

Bouygues Telecom;

•Within two years, to increase Group free cash flow generation after WCR3 to €1 billion thanks to the contribution of the three sectors of activity.

1Restated for major changes in the scope of consolidation

2Free cash flow = Net cash flow (determined after (i) cost of net debt, (ii) interest expense on lease obligations and (iii) income taxes paid), minus net capital expenditure and repayments of lease obligations. It is calculated before changes in working capital requirements (WCR)

3Free cash flow after WCR = Net cash flow (determined after (i) cost of net debt, (ii) interest expense on lease obligations and (iii) income taxes paid), minus net capital expenditure and repayments of lease obligations. It is calculated after changes in working capital requirements (WCR) related to operating activities and excluding 5G frequencies

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DETAILED ANALYSIS BY SECTOR OF ACTIVITY

CONSTRUCTION BUSINESSES

The backlog in the construction businesses at end-March 2019 reached a record €34.4 billion, up 9% versus end-March 2018, and up 4% like-for-like4 and at constant exchange rates.

In France, the backlog in the construction businesses at 31 March 2019 was €14.6 billion, up slightly by 1% excluding Axione5.

The backlog at Bouygues Construction at end-March 2019 was €8.5 billion, up 2% excluding Axione5. In first- quarter 2019, it included construction of the Nice Wholesale Market for €90 million and of the Hauts d'Asnières neighborhood, north-west of Paris, for €49 million.

The backlog at Bouygues Immobilier, down 9% year-on-year at €2.3 billion at 31 March 2019, reflects a decline in the residential property market and the rescheduling of commercial property projects that should be finalized in the fourth quarter of 2019.

The backlog at Colas was €3.8 billion at 31 March 2019, up 7% year-on-year, driven by a growing Roads market in France in a pre-election year.

Good commercial momentum continued in international markets, where the backlog was up 19% versus end- March 2018 and up 6% like-for-like4 and at constant exchange rates. It was €19.7 billion at 31 March 2019 and included a €181-million contract for the University of Brighton as well as a €60-million rail maintenance contract with Network Rail, both in the UK.

At end-March 2019, international business represented 61% of the backlog at Bouygues Construction and Colas, versus 57% at end-March 2018.

The construction businesses reported sales of €5,934 million, up 17% year-on-year and up 8% like-for-like and at constant exchange rates.

The current operating loss of €207 million in first-quarter 2019 notably reflects the usual seasonal nature of Colas' business and is not indicative of full-year performance. At Colas, the current operating loss remained stable year-on-year. A growing Roads market in France and an improvement in specialized activities thanks to recovery measures, especially in the Rail business, offset the negative contribution from the Miller McAsphalt group in first-quarter 2019. For information, the Miller McAsphalt group reported a €37-million loss in first- quarter 2019 due to the usual seasonal effect in Canada but was consolidated only from second-quarter 2018.

The decline in current operating profit at Bouygues Immobilier was due to low activity in the commercial property segment and higher cost of works following a peak in residential property reservations in the market as a whole in 2017.

Bouygues Construction reported current operating profit of €77 million versus €84 million in first-quarter 2018. The decline was related to the phasing of major projects, notably in Australia.

4Restated for major changes in the scope of consolidation

5After restatement in 2018 of Axione's backlog for €0.7bn, following the deconsolidation of Axione in 2018 (divestment of 49% of Axione to Mirova on

31December 2018)

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TF1

TF1 achieved a share of 32.3% (up 0.1 points year-on-year) of its target audience of women under 50 who are purchasing decision-makers and 29.4% (up 0.8 points year-on-year) of individuals aged 25-49.

TF1 reported sales of €554 million, up 11% versus first-quarter 2018. Restated for exchange-rate effects and acquisitions in 2018, especially in digital, the increase was 4%. This growth was a combination of stronger linear and non-linear advertising revenue linked to the TF1 group's healthy viewing figures, and the incremental revenue contribution from the agreements signed with telecom operators and Canal+.

Current operating profit reached €63 million in first-quarter 2019, up €24 million year-on-year. The current operating margin rose to 11.4%, versus 7.8% a year earlier. This growth reflects the diversification of revenue sources in the broadcasting activity and tight control at the five unencrypted channels of the cost of programs, which was €222 million in first-quarter 2019, down €8 million year-on-year.

BOUYGUES TELECOM

Bouygues Telecom recorded a very good commercial performance in first-quarter 2019 and robust growth in its financial results.

The company added 459,000 mobile customers in first-quarter 2019, of which 149,000 were new mobile plan customers excluding MtoM, for a total of 11 million mobile plan customers excluding MtoM at end-March 2019 and 16.8 million Mobile customers overall.

In the fixed segment, Bouygues Telecom accelerated its sign-up of FTTH customers, with 94,000 new adds in first-quarter 2019. The company doubled its FTTH penetration rate year-on-year to 18% at end-March 2019. It had 663,000 FTTH customers at 31 March 2019.

The company had a total of 3.7 million Fixed customers at end-March 2019, an increase of 59,000 in first- quarter 2019.

Bouygues Telecom reported sales of €1,451 million in first-quarter 2019, up 13% year-on-year. Sales from services rose 6% to €1,094 million. This increase reflected growth in the Mobile and Fixed customer base and the stabilization of mobile ABPU.

EBITDA after Leases showed a sharp growth of €50 million year-on-year, to €300 million. The EBITDA after Leases margin was 27.4%, up 3.2 points from first-quarter 2018.

Current operating profit was €91 million in first-quarter 2019, up €32 million year-on-year.

Operating profit was €106 million in first-quarter 2019, versus €120 million in first-quarter 2018 due to lower non-current income (€15 million in first-quarter 2019 versus €61 million a year earlier) mainly related to capital gains on the sale of mobile sites to Cellnex (58 sites transferred in first-quarter 2019 vs. 331 in first-quarter 2018).

Gross capex was €327 million versus €329 million in first-quarter 2018.

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The BtoB market is one of the key drivers of growth at Bouygues Telecom. The strategy of Bouygues Telecom Entreprises is based on three priorities:

-To become a leader in the connectivity and networks market with enhanced service offerings (security, managed services, etc.), directly or through partnership with well-known companies,

-To accelerate its expansion into the market of micro-businesses, SMEs and intermediate-sized businesses,

-To strengthen its positioning among large companies.

In line with that strategy, Bouygues Telecom finalized its acquisition of Keyyo and Nerim in the first quarter of 2019. Keyyo brings complementary experience in advanced digitization and innovative products and services for SMEs, especially in the fixed segment. Bouygues Telecom will also benefit from Nerim's technical expertise in the marketing of data and hosting networks for intermediate-sized enterprises.

ALSTOM

As announced on 7 May 2019, Alstom's contribution to the Group's net profit was €33 million in first-quarter 2019, versus a contribution of €73 million in first-quarter 2018.

Alstom also announced that its Board of Directors would ask the general meeting of shareholders on 10 July 2019 to approve a dividend of €5.5 per share. If ratified, the Bouygues group, which currently owns 62,086,226 shares, would receive €341.5 million in third-quarter 2019.

FINANCIAL SITUATION

Net debt at 31 March 2019 was €5.1 billion, versus €3.8 billion at 31 March 2018 and €3.6 billion at 31 December 2018. The difference from 31 December 2018 is mainly due to the seasonal nature of Colas' business. The difference from 31 March 2018 mainly reflects the acquisition of Alpiq Engineering Services by Bouygues Construction and Colas, of aufeminin by TF1 and of Keyyo and Nerim by Bouygues Telecom.

FINANCIAL CALENDAR

•29 August 2019: First-half 2019 results (7.30am CET)

•14 November 2019: Nine-month 2019 results (7.30am CET)

The financial statements have been subject to a limited review by the statutory auditors and the corresponding report has been issued.

Please find the integrated report, full financial statements and notes to the financial statements on bouygues.com

INVESTORS AND ANALYSTS CONTACT:	PRESS CONTACT:
[e-mail] • Tel.: [phone]	[e-mail] • Tel.: [phone]

BOUYGUES SA • 32 avenue Hoche • 75378 Paris CEDEX 08 • bouygues.com

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