Financial Review - Bouygues

A leader inproperty development2004 sales€1,295m (+5%)Operating income€114m (+43%)Net earnings (Group share)With twenty-three branches in France and seven units inEurope, Bouygues Immobilier is a developer of residential,office and retail park projects. With its excellent financialposition and strong earnings growth (+48%), the companyfurther increased its market share in 2004.€65m (+48%)Employees845Sales objective 2005** IFRS standards€1,450m (+13%)HIGHLIGHTSOffice and retail property Sale of the Exaltis building(23,000 m 2 ) in La Défense Sale of the Grand Horizon building(16,000 m 2 ) in Marseille Delivery of CNAM's head office inBagnolet and Le Monde's head officein the 13th arrondissement of Paris Sale of the Alcala Parque retailpark (32,000 m 2 ) in Seville, SpainResidential property 6,593 homes delivered in France Start of residential propertyprogrammes in Spain First project delivered in Warsaw,PolandExpansion Acquisition of Société Lyonnaisepour la Construction (SLC) Opening of two new branchesin Perpignan and La Rochelle Start-up of a residential propertybusiness in Brussels, Belgium Start-up of the Retail Parksbusiness in FranceOn the private residential propertydevelopment market, BouyguesImmobilier's main rivals are Nexity,Kaufman & Broad and Capri. With6,759 units sold in 2004, BouyguesImmobilier remains in second placebehind Nexity.Bouygues Immobilier leads a corporateproperty market on which the competitionis highly diversified. Its directrivals are mainly British and Americandevelopers and land developmentcompanies.Consolidated book sales, recordedas in previous years according to thepercentage of completion method,amounted to €1,295m in 2004, a riseof 5%. Operating income rose by 43%to €114m, representing 8.8% of sales.Net earnings attributable to the Grouprose by 48% to €65m.Forward sales remained buoyant:reservations amounting to €1,549mwere taken, 11% more than in 2003.Bouygues Immobilier had a cash surplusfor the fourth year running, dueto strong residential property sales,favourable buyer financing terms formajor corporate property developmentsand deferred payment terms formajor land acquisitions.Residential property:still a thriving marketThe residential property market continuedto thrive in both the Paris regionand the rest of France, buoyed by lowinterest rates, strong rental demandand effective tax incentives. 6,759housing units were reserved, including164 in Europe, for a total of€1,069m, representing a 25%increase on the previous year.The key to this rise was stronggrowth in demand in the outersuburbs of the Paris region,the Atlantic crescent andthe south and south-eastof France. Book salesincreased by 22% to €864m.Bouygues Immobilier strengthened itspresence in the Rhône-Alpes regionwith the acquisition of SociétéLyonnaise pour la Construction (SLC)in October 2004.Commercial andcorporate propertyRental demand remained weak in2004, causing rents to fall. Againstthis background, BouyguesImmobilier sold167,000 m 2 ofoffice,retail and hotel space, including71,000 m 2 in Europe excludingFrance, for a total of €467m, consolidatingits leading position in the newoffice market.In 2004, Bouygues Immobilier deliveredtwo prestigeprojects designedby architects ofinternational18