Impacts of COVID-19 on the Bouygues group
Press release - Paris 01/04/20
Impacts of COVID-19 on the Bouygues group
- WITHDRAWAL OF 2020 GUIDANCE FOR THE CONSTRUCTION
BUSINESSES, TF1 AND THE GROUP
- SUSPENSION OF BOUYGUES TELECOM'S 2020 GUIDANCE
MAINTAINED
- MODIFICATION OF RESOLUTION SETTING THE
DIVIDEND
- ARRANGEMENTS FOR PARTICIPATING IN THE COMBINED ANNUAL
GENERAL MEETING OF 23 APRIL 2020
The Covid-19 pandemic has spread very quickly to
many different countries. Wherever it is present worldwide, the
Group’s business segments share the same priority of protecting the
health and safety of their employees and their families, as well as
that of all other stakeholders (customers, subcontractors or
suppliers) and of ensuring compliance with the measures implemented
by the competent public health authorities.
The Group is also taking part in initiatives to
fight this pandemic by providing one million European-standard
surgical masks to the French health authorities, as announced in a
press release on 21 March 2020. These masks will be supplied in the
next few days.
To help get through this unprecedented crisis,
which has now hit a very large number of countries, the Group is
drawing on its strengths, namely the commitment of its 130,500
employees, the diversity of its business activities and its
particularly robust financial structure.
The Group enjoys a very substantial cash
surplus.Group net debt is low at €2.2 billion at
end-December 2019, equating to a gearing1 of 19%. The debt maturity
schedule is evenly spread and none of the debt contains financial
covenants.Bouygues also has a very substantial cash surplus. At
end-December 2019, available cash stood at €11.6 billion, of which
€3.3 billion in cash and €8.3 billion in unutilized
medium/long-term credit facilities that contain no financial
covenants.
All the Group’s business segments are
working hard to ensure that business continues when possible. They
are rolling out action plans to reduce the impact of this crisis on
their sales and profitability.Although the impact of the
crisis differs from one business segment to another, they are all
implementing major action plans. In terms of the workforce, a
number of exceptional measures have been taken, such as the
widespread implementation of teleworking, and, in France,
short-time working and the signing of a collective agreement
allowing employees to take their paid vacation during the lockdown
period. Expenditure is being kept under tight control whilst
maintaining core projects. Drawing on the Group’s experience in
Hong Kong, all business segments are now working on restarting
their activities as soon as this is possible, without even awaiting
the end of the lockdown, whilst ensuring optimum health and safety
conditions for their employees, and in compliance with all
governmental measures. To this end, the business segments are
coordinating with the public authorities, customers and with their
supply and subcontracting chain. Major orders for masks and
Personal Protective Equipment have already been made.
Bouygues withdraws its 2020 guidance for
the Group and its business segments, except for Bouygues Telecom,
whose guidance is suspended.As a result of the impact of
the Covid-19 epidemic on its business segments, which cannot be
quantified at the moment, the Group published a press release on 24
March 2020 informing the financial markets of the suspension of the
guidance disclosed at its 2019 full-year results presentation, as
well as that of its business segments. The press release stated:
“the impact of Covid-19 will depend on many different factors,
particularly, for all the Group’s business segments, on the scope
and duration of the epidemic, the prevention and support measures
adopted by the governments concerned and whether employees are
eligible for short-time working. More specifically, for the
construction businesses, it stated that the outlook would depend on
how long worksites stay shut, as well as on the availability of
project owners, contractors, suppliers, service-providers and
subcontractors. For the media activities (which make a limited
contribution to Group sales), as announced by TF1 on 23 March 2020,
the main impact will be on advertising sales.
Since then, new circumstances have appeared. On
27 March, France announced that it would extend its lockdown period
for an extra 15 days, a period that might be extended even further
after that. In the last few days, a growing number of geographies
have implemented similar measures in order to limit the spread of
the epidemic. For example, the places where the Group has a
long-term presence, such as the UK, certain Canadian provinces and
a part of the United States.
These governmental measures have interrupted
work on a very large number of worksites in the
construction businesses. As a result, activity in
the Group’s construction businesses has currently either slowed
down considerably or is completely shut down in ten or so
countries, representing around 60% of the activity. In France, the
Group is actively preparing for the gradual resumption of activity,
although it is unclear how fast this will be, and will leverage
these action plans to speed up the resumption of its activities
outside France.
In a press release of 1 April 2020,
TF1 announced that “We have in recent days seen a
sharp acceleration in cancellations of advertising campaigns,
extending across all sectors. The lack of visibility on future
trends in the advertising market, and the expected continuation of
the current trend in the second quarter, are likely to have a
substantial impact on our first-half performances.” Furthermore, as
regards content production, it stated “The extension of the
lockdown period will inevitably lengthen the suspension of
shooting. ”
In contrast, activity at Bouygues
Telecom is resilient in this Covid-19 pandemic. In the
last two weeks alone, mobile and fixed usage has increased sharply
by 30% and 50% respectively. Due to the lack of commercial
activity, the market has experienced a significant reduction in
gross adds, as well as in cancellations. Bouygues Telecom's teams
are working hard to maintain the best possible mobile and fixed
network service quality in order to satisfy customer demand. The
impact of the pandemic remains limited on Bouygues Telecom's
activity to date.
Therefore, based on these new circumstances and
the contribution of the construction businesses, the current crisis
will have a significant impact on the Group’s results in 2020. This
means that the 2020 guidance for the Group, the construction
businesses and TF1 cannot be achieved.The guidance was as
follows:
- For the Group, free cash flow generation after WCR2 of €1
billion in 2020, with the contribution from all three sectors of
activity;
- For the construction businesses, an expected improvement in the
current operating margin in 2020 versus 2019;
- For TF1, a double-digit current operating margin and cost of
programs at €985 million in 2020.
However, it is too early to give any new
guidance.
Bouygues Telecom’s 2020 guidance continues to be
suspended, due to Covid-19’s limited impact on its activity, until
there is far greater visibility on the duration of the health
crisis in France.
Finally, the Group reiterates its 2030
greenhouse gas emissions reduction target. In 2020, it will define
a target compatible with the Paris Agreement3 and the Group’s five
business segments will prepare an action plan.
The Board of Directors has decided to
amend the resolution (appropriation of 2019 earnings, setting of
dividend) to be submitted to the forthcoming Combined Annual
General Meeting.In the midst of a major and growing health
crisis and given the resulting economic uncertainty, Bouygues
naturally intends to act responsibly and show its solidarity with
the efforts asked of its stakeholders, particularly its employees.
As a result, the Board of Directors has decided to withdraw its
proposal to pay out a dividend at the Combined Annual General
Meeting to be held on 23 April 2020. The Board of Directors
will meet in August in order to reassess the situation and review
the opportunity of proposing the pay-out of a dividend in respect
of the 2019 financial year.
Arrangements for participating in the
Combined Annual General Meeting on 23 April 2020 In
light of the measures taken by the French government in relation to
the Covid-19 pandemic, and in accordance with Order No. 2020-321 of
25 March 2020, the Board of Directors has decided to organize the
Combined Annual General Meeting of 23 April 2020 at 3.30pm (CET) at
its registered office located at 32, avenue Hoche 75008 Paris,
France, without the shareholders attending in person.
As a result, the company is asking shareholders
to either vote remotely or give a proxy vote to the Chairman:
- Either by correspondence, using the form attached to the
Convening Notice and available to download on www.bouygues.com
- Or on-line, via the Votaccess secure platform.
The general meeting will be webcast on
www.bouygues.com
Shareholders are reminded that they are entitled
to send any questions in writing, until 20 April 2020 2 pm, to the
following e-mail address: questions.ecrites2020@bouygues.com. The
arrangements for participating in the Annual General Meeting of 23
April 2020 are available on bouygues.com under Annual General
Meeting. They will also be set forth in the Convening Notice
published in the Balo (Bulletin des Annonces Légales Obligatoires)
on 3 April 2020.
1 Net debt over shareholders’ equity.2Free cash flow after
WCR = Net cash flow (determined after (i) cost of net debt,
(ii) interest expense on lease obligations and (iii) income
taxes paid), minus net capital expenditure and repayments of lease
obligations. It is calculated after changes in WCR related to
operating activities and excluding 5G frequencies.3 To keep the
global increase in temperatures to below 1.5 °C.
ABOUT BOUYGUESBouygues is a diversified services group
with a strong corporate culture whose businesses are organised
around three sectors of activity: Construction, with Bouygues
Construction (building & civil works and energies &
services), Bouygues Immobilier (property development) and
Colas (roads); Telecoms, with Bouygues Telecom, and Media, with
TF1.
Investors and analysts
contact:investors@bouygues.com • Tél : +33 (0)1 44 20 10
79
Press contact:presse@bouygues.com • Tél : +33
(0)1 44 20 12 01
BOUYGUES SA • 32 avenue Hoche • F-75378 Paris CEDEX 08 •
www.bouygues.com
- CP Groupe Bouygues impacts Covid-19_EN_01042020
Bouygues (EU:EN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bouygues (EU:EN)
Historical Stock Chart
From Sep 2023 to Sep 2024