Financial Review - Bouygues

Bouygues SASales 2004€68m (+10%)Operating income-€30m (-25%)Net earnings (Group share)€586m (x 2.7)Employees227The parent company of an industrial group, Bouygues SAis entirely dedicated to the development of the Group'sbusinesses. It is the place where decisions are taken thatdetermine the Group's strategy and the allocation of itsfinancial resources. Bouygues SA also provides the Groupas a whole with a range of different services.For Bouygues SA, 2004 was markedby an exceptional payout of 5 eurosper share and the disposal of SaurExceptional payoutBecause of the favourable outlook forthe Group, the Board of Directorsasked the Shareholders' Meeting on7 October 2004 to make an exceptionalpayout of 5 euros per share. Theshareholders approved the proposal,and the payout took place on7 January 2005.It had no effect on Bouygues' S&Pcredit rating of A-/stable/A-2.Disposal of SaurAfter launching an invitation to tenderon 23 July 2004, Bouygues sold Saurto PAI partners under an agreementsigned on 19 November 2004. Thesale does not include Saur's Africanand Italian subsidiaries, which havebeen taken over by Finagestion, awholly-owned Bouygues subsidiary.PAI partners paid €1,031m for Saurand Bouygues has paid €58m for a15% stake in the company formed byPAI partners to make the acquisition.The disposal of Saur reflects theBouygues group's strategy of refocusingits activities.Other eventsOn 24 March 2004, Bouygues exercisedits option of redeeming inadvance all the bonds convertible intonew shares and/or exchangeable forexisting shares still in issue (OCEANE,1.70%, 1999-2006). As a result of thistransaction 13,556,732 new shareswere created, 260,718 bonds thatBouygues had bought back were cancelledand 33,379 bonds wereredeemed for €8.8m. During the firsthalf of the year Bouygues bought onthe market and cancelled a quantity ofshares equivalent to all the shares created,thus stabilising the number ofshares on 30 June at the end-2003level.On 29 October 2004, Bouyguestapped the financial market with a€1bn bond issue outside France.Therefore, one million bearer bondsmaturing 29 October 2014 wereissued for €1,000 par at a fixed rate of4.375%.Bouygues SA new head office project, Avenue Hoche in Paris. Architect: Kevin RocheServices providedto subsidiariesAs well as being responsible for theoverall management of the Group,Bouygues SA provides a range ofgeneral and expert services to Groupbusinesses in areas such as finance,communication, new technologies,insurance, legal affairs, humanresources, etc. For that purpose,Bouygues SA concludes annualagreements with its operating divisionsunder which it invoices them forservices rendered.ManagementBouygues SA pays particular attentionto Group management, taking steps toencourage exchanges and ensuremaximum benefit from the accumulatedexperience within the Group,and to promote personal developmentand the Group's corporate valuesand spirit.Financial flowsIn 2004, Bouygues SA received dividendstotalling €432,942,217 from thefollowing subsidiaries:Bouygues Construction: €30,010,288Bouygues Immobilier: €28,035,000Colas: €87,850,077TF1: €57,497,316Saur: €225,918,053Other: €3,631,483There are no significant flows of fundsbetween Group subsidiaries.Cash management is centralised withinfinancial subsidiaries wholly ownedby Bouygues SA. This arrangementensures optimum management offinancial expenses, since the surpluscash generated by certain subsidiariescan be used in addition to orin place of confirmed lines of creditgranted by credit institutions to othersubsidiaries.32