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Analysis of Bouygues Group* construction businesses
*Bouygues Construction, Bouygues Immobilier and Colas
 

BACKLOG

At end-June 2022, the backlog in construction and services businesses rose 6% to €35.1 billion. This compares with the end-June 2021 backlog of €33.3 billion (at constant rates of exchange rates and excluding the principal disposals and acquisitions, the backlog improved by 1%). 

At €20.5 billion, the backlog at Bouygues Construction offers good visibility on future activity.  The 5% decline in the backlog for Building and Civil Works (lower level of major contracts booked in the last year) was partly offset by a rise in order intake in Energies & Services (up 3% year-on-year). In the first half of 2022, Bouygues Construction reported a 7% increase in order intake year-on-year, driven by the normal course of business. 

SALES

The construction and services businesses reported sales of €13.7 billion in the first half of 2022, up 7% year-on-year. This growth was driven mainly by Colas. Like-for-like and at constant exchange rates, sales were up 3%.  

OPERATING PROFIT

Current operating profit from the construction and services businesses totalled €41 million at end-June 2022. By way of a reminder, the first half current operating profit is not representative of full-year results.  The current operating margin stood at 0.3% versus 0.6% in the first half of 2021. The current operating margin at Bouygues Construction (2.9% versus 2.6% in the first half of 2021) was supported by an improved margin at the Energies & Services arm, which reached 3.2% in the first half of 2022, and the resilience of the margin in the Building & Civil Works arm (stable at 2.8%). 

Bouygues Construction key figures
Backlog: €20.5 billion 
Order intake : €5.4 billion (including €2.2 billion in France and €3.1 billion for International)
Sales: €6.4 billion

The Group’s financial situation remains strong

At €17.9 billion, the Group maintained a very high level of available cash (€20.4 billion at end-2021).

Current operating profit increased by €21 million compared to the first half of 2021 to reach €492 million. The current operating margin was 2.7%, stable relative to the first half of 2021.

Net debt at end-June 2022 was €3,705 million versus €2,813 million at end-June 2021, i.e. a variation of €892 million. 

Net gearing remained low at 29% (versus 24% at end-June 2021).

The long-term credit ratings assigned to the Group by Moody’s and Standard and Poor’s are unchanged since 10 November 2021 and are respectively: A3, stable outlook and A-, CreditWatch Negative. 

The Group confirms its outlook for 2022

As announced when these half-year results were first published, in 2022 the Group is expecting a further increase in sales and current operating profit compared to 2021.   

After the endorsement of Colas’ greenhouse gas emission reduction targets in 2021, the other business segments are now looking for the SBTi to endorse their own decarbonization targets. 

Bouygues remains very vigilant as to any changes in the macroeconomic situation and their direct or indirect consequences on the Group’s activities and results.

Milestones completed in the aquisition of Equans 

On 12 May 2022, Bouygues signed a Share Purchase Agreement to acquire Equans, after the employee representative bodies of Equans and Engie had given their opinions. 

On 19 July 2022, the European Commission cleared the acquisition of Equans by Bouygues on condition that Bouygues complies with its commitment to divest Colas Rail Belgium. 

The UK's Competition and Markets Authority (CMA) observed that the transaction would only worsen competitive conditions, solely as regards the current tender relating to catenary systems for the High Speed (HS2) railway line. On 26 July, Bouygues submitted its proposed remedies on which the CMA should soon give its decision. 
By way of a reminder, closing on this deal is expected in the second half of 2022.

NON-FINANCIAL INITIATIVES IN THE BUSINESS SEGMENTS
- Bouygues Construction is rolling out its BYSprong offering, an innovation developed by the in-house R&D unit, designed to carry out large-scale energy renovations of properties. 

- In May, Bouygues Immobilier unveiled “Coeur de Vie”, its new value proposition for residential property, tailored to people’s needs in the post-pandemic era. In June, it also unveiled its “Jardin pour la Vie” concept which aims to reintroduce nature into urban environments. Ecologists and landscapers will be systematically consulted during design phases.

- In June, Colas dedicated its second annual Environment Day to the topic of biodiversity. Other broader actions promoting biodiversity are also being conducted.  

- On 20 June, TF1 received eight awards at the 11th Deauville Green Awards, an international green-themed festival aimed at using film to raise awareness of sustainable development.

- Bouygues Telecom has filed an application to obtain SBTi (Science Based Targets initiative) endorsement of its climate targets.

Read the full press release here.

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