A N N U A L R E P O R T - Bouygues

NUMBER ONE TELEVI
France’s leading general-interest TV channel, TF1
has diversified into complementary businesses
including theme channels, internet activities,
audiovisual rights, spin-off products and pay TV.
Highlights
• December: announcement of a planned
merger between TPS and Groupe Canal+.
• October: 13.3 million viewers for the football
match between France and Cyprus on TF1.
• Summer: 12 million viewers on average for
the summer serial, Dolmen.
• July: six TF1 channels in the Mediacabsat
Top 10 (audience of cable and satellite
channels, 27 December 2004 to 12 June 2005).
• First half of 2005: disposal of Visiowave and
Studios 107.
• June: exclusive rights to show the 2010
and 2014 football World Cup competitions
in France.
• May: acquisition of a 40% stake in TMC.
• March: launch of Ushuaïa TV. Launch of DTT
in France: TF1 has two licences for free-to-air
(TF1 and TMC) and four for pay channels.
Sales 2005
€2,509m*
(=)
Operating profit
€353m*
(-7%)
* excl. TPS
Net profit (Group share)
€236m
(+5%)
Employees
4 100*
* incl. fixed-term contracts
Sales target 2006
€2,620m
(+4%)
13.3 million viewers tuned in
to the France-Cyprus match
Under the terms of the agreement
concerning TPS concluded by Vivendi
Universal, TF1 and M6 on 6 January
2006, TPS is deemed to be an asset
held for sale and TF1’s financial statements
are presented according to
IFRS 5 (Non-current Assets Held for
Sale and Discontinued Operations).
The sales figure for the TF1 group does
not therefore include TPS in 2004 and
2005 (for consistency, 2004 figures
are given like-on-like). Thus, sales for
the TF1 group (ongoing activities) in
2005 were stable at €2,509 million.
On-air advertising sales increased by
0.1% over the year as a whole. Annual
sales by other divisions (excluding
activities held for sale) rose by 0.6%.
Growth in other activities was mainly
due to four factors.
• Audience figures for the TF1 group's
theme channels in France were good
and advertising sales rose by 16% in
2005. e-TF1's contribution to sales
increased by 42.7% and the tf1.fr
website consolidated its position as
France's premier media portal;
• Teleshopping benefited from popular
programmes and thriving internet
sales;
• TF1 International reported a 52.6%
jump in sales, due in particular to a
number of box-office successes (TF1
International was the fourth biggest
French film distributor in 2005).
The TF1 group's operating profit fell
by 7% to €353 million (including
a €14.2 million capital gain on the
sale of Visiowave) in
comparison with
the previous
year. The fall
was mostly
due to the
combined
e ffe c t
of flat advertising sales and a 2.9%
increase in the cost of programmes.
Over 2005 as a whole, the net profit
attributable to the Group rose by 5%
to €236 million, giving a net margin
on sales of 9.4%, compared with 9.0%
in 2004.
Most of this improvement was due to a
reduction in the tax charge.
The TF1 group had shareholders’ equity
of €1,050 million at 31 December
2005, for a balance sheet total of
€3,470 million. Net debt
amounted to €351
million, or 33% of
equity.
In November 2005,
Standard & Poor’s confirmed
TF1’s long-term
A and short-term A-1 rating,
underlining the
group’s excellent
financial
health.
The outlook
moved from
stable to
negative.
IFRS
32