Bouygues : Press release H1-2022

PRESS RELEASE

PARIS

02/08/2022

FIRST-HALF 2022 RESULTS

• STRONG FIRST-HALF RESULTS AGAINST A COMPLEX BACKDROP
• GROUP SALES UP 6% AND GROUP CURRENT OPERATING PROFIT UP €21 MILLION
• GROUP OUTLOOK FOR 2022 CONFIRMED
• BOUYGUES TELECOM REPLACES ITS 2022 SALES FROM SERVICES GROWTH TARGET OF AROUND 5% WITH A SALES BILLED TO CUSTOMERS GROWTH TARGET OF ABOVE 5%
• BOUYGUES TELECOM REVISES ITS TARGET UPWARDS AND NOW EXPECTS EBITDA AFTER LEASES GROWTH OF OVER 8% (VERSUS "GROWTH OF AROUND 7%" PREVIOUSLY)

The Board of Directors, chaired by Martin Bouygues, met on 1 August 2022 to finalize the financial statements for the first half of 2022.

Key figures

(€ million)	H1 2022		H1 2021		Change
Sales	18,531		17,417		+6%	a
Current operating profit/(loss)	492		471		+21
Current operating margin	2.7%		2.7%		=
Operating profit/(loss)	448	b	551	c	-103
Net profit/(loss) attributable to the Group	147		408		-261
Net surplus cash (+)/net debt (-)	(3,705)		(2,813)		-892

1. Up 3% like-for-like and at constant exchange rates.
2. Including net non-current charges of €44m.
3. Including net non-current income of €80m.

• Sales totalled €18.5 billion, up 6%, or up 3% like-for-like and at constant exchange rates. Sales growth was mainly contributed by Colas.
• Current operating profit increased by €21 million versus the first half of 2021 to €492 million. The current operating margin was 2.7%, stable relative to the first half of 2021. The media and telecom businesses significantly improved their profitability. Currently impacted by Colas, the profitability of the construction and services businesses was lower.
• Net profit attributable to the Group was €147 million. It includes net non-current charges1 of €44 million, comprising mainly costs relating to the planned Equans acquisition and the proposed TF1-M6 merger. As a reminder, net profit attributable to the Group in the first half of 2021 included a €219 million contribution from Alstom, essentially related to share sales as well as net non-current income of €80 million, mainly related to the sale of data centers by Bouygues Telecom.
• Net debt was €3,705 million versus €2,813 million at end-June 2021, equating to a change of €892 million. Net gearing2 remained low at 29% (versus 24% at end-June 2021).

OUTLOOK FOR 2022

The Group confirms its outlook for 2022:

This outlook is based on information known to date. It excludes any further deterioration in the situation due to Covid-19 and does not factor in the planned acquisition of Equans or the proposed merger between TF1 and M6.

• In 2022, the Group is expecting a further increase in sales and current operating profit vs 2021.
• After the endorsement of Colas' greenhouse gas emission reduction targets in 2021, the other business segments are now looking for the SBTi3 to endorse their own decarbonization targets.

Bouygues remains very vigilant, looking for any changes in the macroeconomic situation and their direct or indirect consequences on the Group's activities and results.

Bouygues Telecom revises its outlook for 2022:

Bouygues Telecom replaces its 2022 sales from services growth target of around 5% with a sales billed to customers growth target of above 5%.

Bouygues Telecom replaces its sales from services growth target with a sales billed to customers growth target, which is more representative of its performance. Unlike sales billed to customers, sales from services (up 3% in first-half 2022) are subject to the structural and cyclical performance of sales from "incoming" traffic, whereas this has no impact on EBITDA after Leases (since sales from "incoming" traffic are offset by symmetric costs related to "outgoing" traffic).

1. Including non-current charges of €13m at Bouygues Construction, of €7m at TF1 and of €34m at Bouygues SA; and non-current income of €10m related to capital gains on the sale of data centers at Bouygues Telecom.
2. Net debt/shareholders' equity.
3. Science Based Target initiative.

First-half 2022 results - Bouygues group - 2 August 2022

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Bouygues Telecom revises its target upwards and now expects EBITDA after Leases growth of over 8%.

Previously, Bouygues Telecom was expecting an EBITDA after Leases growth target of around 7%.

Gross capital expenditure was confirmed at €1.5 billion (excluding 5G frequencies) in order to keep pace with growth in the mobile and fixed customer base, and in usage.

Outlook for TF1:

The current macroeconomic situation marked by inflation and the Ukraine conflict has not had a significant effect on the TF1 group's first-half 2022 results. In the second half of the year, the TF1 group will continue to adapt its costs in line with market developments.

The media arm will benefit from an ambitious programme schedule, marked particularly by the Soccer World Cup at the end of 2022, which will boost its audience figures and allow it to offer premium ad inventories to its advertiser customers. The TF1 group will extend its coverage and help meet rapidly changing customer usage thanks to its efforts to allocate content between linear and non-linear services. The divestment of the Publishers business is expected in the second half of 2022.

Newen Studios will benefit from major programme deliveries in the second half and new orders, notably from the platforms, giving it confidence in its ability to achieve the set targets.

MILESTONES COMPLETED IN THE ACQUISITION OF EQUANS

On 12 May 2022, Bouygues signed a Share Purchase Agreement to acquire Equans from Engie, after the employee representative bodies of Equans and Engie had given their opinions.

On 19 July 2022, the European Commission cleared the acquisition of Equans by Bouygues on condition that Bouygues complies with its commitment to divest Colas Rail Belgium.

On 19 July 2022, the Competition and Markets Authority (CMA), in the UK, observed that the transaction would only worsen competitive conditions solely as regards the current tender relating to catenary systems for the High Speed 2 (HS2) railway line. On 26 July, Bouygues submitted its proposed remedies on which the CMA should soon give its decision.

As a reminder, closing of this deal is expected in the second half of 2022.

PROPOSED MERGER BETWEEN THE TF1 AND M6

The French Competition Authority's investigation teams have issued their report on the proposed merger between TF1 and M6. In their report, which in no way predicts the final decision of the authority's board, the investigation teams consider that the deal raises a number of significant competition concerns (especially in relation to the advertising market). The nature and extent of the remedies required in the report would mean that the merger plans would no longer be meaningful for the parties involved and they would therefore abandon them.

The parties, who do not intend to make any changes to their original plans, will inform the authority of their response within the next three weeks; hearings will take place before the French competition authority's board on 5 and 6 September.

First-half 2022 results - Bouygues group - 2 August 2022

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DETAILED ANALYSIS BY SECTOR OF ACTIVITY

CONSTRUCTION AND SERVICES BUSINESSES

At end-June 2022, the backlog in the construction and services businesses (Bouygues Construction, Bouygues Immobilier and Colas) rose 6% to €35.1 billion, compared to the end-June 2021 backlog of €33.3 billion. At constant exchange rates and excluding principal disposals and acquisitions, the backlog improved slightly by 1%. At €20.5 billion, the backlog at Bouygues Construction offers good visibility on future activity. The 5% decline in the backlog for Building and Civil works (lower level of major contracts booked in the past year) was partly offset by a rise in order intake in Energies & Services (up 3% year-on-year). In the first half of 2022, Bouygues Construction reported a 7% increase in order intake year-on-year, driven by the normal course of business.

The French residential property market continued to see strong demand. In the commercial property segment, customers remained cautious. Bouygues Immobilier benefited from a significant catch-up in obtaining building permits, which started to translate into new housing units for sale. However, considering the low supply to date, reservations were down 14% over the period, hindered by commercial property and the postponement of block reservations in residential property. Overall, the backlog at Bouygues Immobilier was 12% lower than at end- June 2021 but was stable versus 31 December 2021.

The backlog at Colas was €12.9 billion, up 25% year-on-year and up 14% at constant exchange rates and excluding principal disposals and acquisitions. Order intake at Colas was very strong in the first half of 2022 (up 27% year- on-year, including the scope effect related to Destia). In particular, international rail activities booked a significant order in the second quarter, corresponding to a five-year extension of the contract to renew and modernise railway infrastructure in the United Kingdom. In the first quarter, Colas had already booked a large order for the Cairo metro in Egypt. Roads activities also contributed to this good commercial momentum, in particular in France and in the United States.

The construction and services businesses reported sales of €13.7 billion in the first half of 2022, up 7% year-on- year and up 3% like-for-like and at constant exchange rates. This growth was mainly driven by Colas. Bouygues Construction's sales were relatively stable. Bouygues Immobilier, notably hit by the weak commercial property segment, saw an 11% decline in sales (first six months of 2021 positively impacted by the progress of work on a specific commercial property development1). Sales at Colas rose 17% (up 9% like-for-like and at constant exchange rates), driven primarily by international business (up 28%).

Current operating profit from the construction and services businesses totalled €41 million and end-June 2022. As a reminder, like every year, first half current operating result is not representative of full-year results. The current operating margin stood at 0.3% versus 0.6% in the first half of 2021. The current operating margin at Bouygues Construction (2.9% versus 2.6% in the first-half of 2021) was supported by an improved margin at the Energies & Services arm, which reached 3.2% in the first half of 2022 (versus 2.3% in the first half of 2021) and the resilience of the margin in the Building & Civil Works arm (stable at 2.8%). The current operating margin at Bouygues Immobilier benefited from the tight control of its costs amid weak business. Finally, profitability at Colas was hampered by a sharp increase in production costs, especially related to energy and bitumen. These costs could not systematically be passed on to customers, most notably for the contracts booked before the sudden price hikes.

1 Contribution from the commercial property segment of €27m in first-half 2022 versus €88m in first-half 2021.

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TF1

With the TF1 group maintaining its audience shares at a high level1 in the first half of 2022, sales reported by TF1 amounted to €1,187 million at end-June 2022, rising by 5% year-on-year (up 3% like-for-like and at constant exchange rates). It benefited from:

• 5% growth in media sales. Advertising revenue rose by 2% (high basis of comparison resulting from the Euro soccer tournament broadcast in June 2021).
• Robust sales growth at Newen Studios (up 9%), notably driven by the acquisitions of the iZen (Spain) and Flare Film (Germany) studios in 2021.

Current operating profit in the first half of 2022 was €189 million, up €20 million year-on-year. This can be attributed to tight control of programming costs in the broadcasting activities. Current operating profit at Newen Studios was lower than in the first six months of 2021 due to the phasing of programme deliveries, though the weak first quarter was partially offset by the second quarter. Altogether, the current operating margin improved to 15.9%, up 0.9 points year-on-year.

In June, TF1 divested Gamned!, a digital marketing agency specialised in programmatic media buying. It also announced that an agreement had been signed to divest the Publishers business. Furthermore, TF1 entered into exclusive negotiations on 21 July 2022 to sell its interest in Ykone, a global influencer marketing agency. The closing of this transaction was announced on 27 July 2022.

BOUYGUES TELECOM

Bouygues Telecom maintained good commercial momentum throughout the first half of 2022, in both mobile and fixed.

At end-June 2022, mobile plan customers excluding MtoM were 15 million, thanks to the gain of 193,000 new customers in the first half.

In fixed, the company had 2.6 million FTTH customers at end-June 2022, thanks to 315,000 new adds in the first six months. The proportion of fixed customers subscribing to an FTTH plan continued increasing, rising to 58% versus 45% one year earlier. The fixed customer base totalled 4.5 million, with 81,000 new adds in the first six months.

Reflecting this good commercial momentum, sales billed to customers were €2.7 billion, up 6% versus the first half of 2021, benefiting from continued growth in the mobile and fixed customer bases and in ABPU2 (mobile ABPU, restated for the impact of roaming, rose €0.2 year-on-year to €19.8 per customer per month, while fixed ABPU increased by €1.0 year-on-year to €28.7 per customer per month).

The decrease in sales from incoming traffic reflected lower voice and text usage and lower regulated per unit tariffs. However, sales from incoming traffic have no impact on EBITDA after Leases as this is compensated by symmetric costs related to outgoing traffic.

As a result, sales from services rose by 3% year-on-year. Other sales rose 12% year-on-year, driven by growth in sales on handsets and network roll-outs. In total, the operator's sales increased by 5% versus the first half of 2021.

1 33.5% among women under 50 who are purchasing-decision makers (stable year-on-year) and 30.1% among the 25-49 age group (-0.4 points year-on-

year).

2 ABPU including BTBD.

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