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Bouygues EN
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/27/2013

Martin Bouygues - Chairman and CEO: Good morning, ladies and gentlemen. Thank you for being here this morning. I'd like to start my presentation if I may. First of all, let's have a look at the highlights and key figures for Bouygues in 2012. As you know, the financial results of Group Bouygues in 2012 clearly reflect the substantial upheaval in the mobile telecommunications market in France and reflect to a tougher economic situation. Yet in spite of all that, this Group has maintained its robust fundamentals.

I think the most important of these fundamentals is our tremendous commercial flexibility. We've seen a very strong forward-going momentum in the construction business that I'll come back to in a few moments time. TF1 has managed to both to cut its costs and improve its audience ratings, both substantially, and the beginning of 2013 is, I'm happy to say, a continuation of that very favorable trend. We've also stabilized our mobile subscriber base in Bouygues Telecom and seen substantial growth in our fixed subscriber base, which was very important for us.

We've maintained a very sound balance sheet with a very healthy level of free cash flow and a tight control of our net debt. We managed to do all that while implementing very considerable adaptation plans. Our business areas have been highly responsive in adapting to the new situation. Bouygues Immobilier has taken the necessary measures to withstand the considerable downturn in the residential property market in France.

Colas has launched a new organization for its road making activities in France. TF1 has implemented the Phase II of its optimization plan and finally Bouygues Telecom has carried out all the transformational measures that we announced very early in 2012 and which have been implemented gradually throughout 2012 in accordance with our announcements and all those measures are now implemented.

The sales of the Group in 2012 up by 3%, EUR33.547 billion. Our current operating profit is down by 29% at EUR1.286 billion as against EUR1.819 billion last year. Operating profit which is significantly down by 40%, EUR1.120 billion and net profit attributable to the Group which is down to EUR633 million, clearly the net profit has gone down in a similar proportion to the operating profit. The sales are higher than our initial objective which was EUR32.35 billion and this has been driven mainly by the construction businesses. Of course, the current operating profit has been significantly impacted by the lower profitability of Bouygues Telecom.

Operating profit includes EUR200 million of non-current charges, which are related to the adaptation plans of Bouygues Telecom and TF1 and EUR34 million of capital gains on asset disposals at Bouygues Telecom.

In this very difficult situation, I thought you'd like to see how the operating profit has changed from 2011 to 2012 business by business. With Bouygues Construction, we've had an operating profit up by EUR11 million, that's due to the proper execution of ongoing contracts. Bouygues Immobilier has seen its operating profit fall by EUR22 million and here we've had to implement on a number of adjustment measures and abandoned a number of programs.

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