Financial Review - Bouygues

Number one televisiongroup in France2004 sales€2,835m (+3%)Operating income€399m (+19%)Net earnings (Group share)€220m (+15%)Employees4,000Sales objective 2005** IFRS standards€2,930m (+3%)HIGHLIGHTS TF1's audience share rose by0.3 points overall and by 1.1 pointsamong women under 50. TF1 broadcast eight of the mostimportant Euro 2004 matches liveon air. The Switzerland-Francegame attracted the largest audienceof the year, with an audience shareof 59.9%. LCI celebrated its tenth anniversaryon 22 June. Since 1994, LCIhas established itself as France'sleading 24-hour news channel. Eurosport provided complete,live coverage of the AthensOlympics. On 20 December, TF1 won theexclusive rights to broadcast thenext Rugby World Cup, which willtake place in France in 2007. In December, TPS signed up66,588 new subscribers. In 2004,TPS exceeded its subscriber growthtargets, attracting 209,000 newsubscribers to its satellite serviceand almost 50,000 to TPS L.TF1 is France's leading general-interest TV channel and issuccessfully developing other businesses such as the productionand distribution of spin-off products, internet activitiesand interactive services, theme channels and theinternational expansion of the Eurosport channel, the saleof audiovisual rights and pay TV via TPS.In 2004, TF1 reported a 3.4% rise insales to €2,835m as a result of a 6.6%increase in advertising revenue andthe solid performance of diversificationactivities. Excluding changes ofmethod connected with IFRS convergence,sales would have increasedby 6.6%. The cost of programmes onthe core channel increased by 4.8%to €893.2m. Consolidated operatingincome rose by 19.4% to €398.8m,giving an operating margin of 13.9%,an improvement of 1.9 points on 2003.The Group share of net earningsincreased by 14.9% to €220m andthe net margin on operating revenueby 0.8 points to 7.7%.In July 2004, Standard & Poor's confirmedTF1's A/Stable/A-1 rating,underlining its continued financialhealth.The reorganisation of group companiesand introduction of the IAS 14accounting standard have led TF1 tochange the way it reports segmentinformation. Redeployment by rivalmedia groups and the arrival in numberof new players in the media sector,attracted by new possibilities for distributingprogrammes and services(DTT, ADSL, WiFi, mobile phones,etc.), have encouraged TF1 to reorganiseso as to become more competitivein each of the sectors in whichit operates. In addition, IAS 14 recommendsgiving fuller and more detailedinformation by line of businessand geographical area thanis required under Frenchlaw. The group hasaccordingly been dividedinto five lines of business:French channels,international channels,distribution, broadcastingrights, other (VisioWave,Metro, Dfree).French channelsTF1 core channelIn 2004, TF1's share of the audienceover four years of age increased by0.3 points to 31.8%. Even more significantly,TF1 gained 1.1 points of audienceshareamongwomen under 50, which rose to35.5%. It was the best increase inaudience share of any channel inthese two categories.With 89 of the top 100 audiencesin 2004, TF1 is the channelmost watched byFrench viewers.Major football competitions,especiallyEuro 2004,were one of theoutstanding24