The Bouygues groupÃ¢â¬â¢s consolidated sales for the first half of 2003 amounted to Ã¢âÂ¬ 10.2 bln, down 5.8% on the same period in 2002 due to the disposal of Bouygues Offshore at the end of June 2002. Excluding the impact of this disposal, group sales were stable, as sales growth at Bouygues Telecom and TF1 offset declining activity in the construction business area.
Net earnings attributable to the Group like-on-like: +12%
The Group reported earnings before tax and exceptional items of Ã¢âÂ¬ 402 mln. compared with 356 million euros in the first half of 2002, an increase of 13%. Like-on-like, the figure was up 19%.
Net earnings for the first half of 2003 amounted to Ã¢âÂ¬ 130 mln versus Ã¢âÂ¬ 465 mln. in the same period last year. The comparable figure for the first half of 2002 was Ã¢âÂ¬ 116 mln. euros after deduction of capital gains on the disposal of securities, including the sale of Bouygues Offshore for Ã¢âÂ¬ 337 mln., and factoring in the change in the scope of consolidation. On this basis, net earnings rose by 12%. This performance was fuelled by growth in profits at Bouygues Telecom, TF1, Bouygues Immobilier and Saur.
Bouygues Construction: recovery under way
At end-June 2003, Bouygues Construction booked a loss of Ã¢âÂ¬ 5 mln. However, second quarter results confirm the recovery already noted in the first quarter of 2003 in comparison with the second half of 2002. The restructuring measures implemented in the company as of the end of 2002 are starting to pay off. At end-August 2003, the order book stood at Ã¢âÂ¬ 5.3 bln., a higher level than at end-2002. This confirms Bouygues ConstructionÃ¢â¬â¢s expertise and commercial drive.
Solid financial structure
The Group continues to enjoy a solid financial structure, with a debt-to-equity ratio of 68%, compared with 60% at end-June 2002. Net debt at end-June 2003 amounted to Ã¢âÂ¬ 4.2 bln., compared with Ã¢âÂ¬ 3.2 bln. at end-2002. This rise is mainly due to the increase of Bouygues´ stake in Bouygues Telecom (it acquired E.ON´s shares for Ã¢âÂ¬ 394 mln.) and the usual seasonal variations in cash flow, especially at Colas.
Standard & PoorÃ¢â¬â¢s has maintained Bouygues´ credit rating: A- with stable outlook.
Cash flow: +25%
The Group´s cash flow increased by 25% in the first half of the year to Ã¢âÂ¬ 878 mln. This is considerably more than its operating investment, which amounted to Ã¢âÂ¬ 374 mln. compared with Ã¢âÂ¬ 655 mln. in the first half of 2002.
An increase in the Group´s working capital requirement in the first half of the year to Ã¢âÂ¬ 844 mln. was due partly to seasonal factors in certain businesses, an annually recurring feature, but also to a one-off payment of tax on capital gains from the sale of its stake in Bouygues Offshore. For those reasons, free cash flow at end-June was negative. Over the year as a whole, however, it is expected to be positive and to exceed the 2002 figure, excluding changes in the working capital requirement.
Outlook for 2003
Based on the Group´s performance in the first six months of the year, projected sales for the year as a whole are expected to amount to Ã¢âÂ¬ 21.5 bln., stable in relation to the comparable figure for 2002. Net earnings are expected to increase significantly in relation to the 2002 figure of Ã¢âÂ¬ 319 mln., excluding the capital gain from the sale of Bouygues Offshore.