Operator: Ladies and gentlemen, welcome to Bouygues First Quarter 2021 Results Conference Call. I'll now hand over to Karine Adam-Gruson, Head of Bouygues Investor Relations. Please go ahead. Karine Adam-Gruson: Thank you. Good morning, ladies and gentlemen.

I would like to remind everyone that you can find on the company website at www.bouygues.com the earnings press release, the presentation we will be commenting on during this conference call, an Excel file with historical key figures for the group and each business and the company financial statements. Statements made on this call are forward-looking statements. Such statements reflect objectives that are based on management's current expectations or estimates and are subject to a number of factors and uncertainties that could cause actual figures to differ materially from those described in the forward-looking statements. I will now turn the call over to Olivier Roussat, CEO of Bouygues.

Olivier Roussat: Thank you, Karine.

Good morning to all of you, and thank you for joining us to discuss the Bouygues' first quarter 2021 results. With me in the room today, they are Pascal Grange, Deputy CEO and CFO of Bouygues; and Christian Lecoq, CFO of Bouygues Telecom. Following our comments, we will be answering your question. Let's begin with Slide 4. Q1 2021 results reflected a solid start to the year, with a sharp improvement compared to the Q1 2020.

This Q1 2020 was negatively impacted by the beginning of the pandemic. As usual, given the nature of our activities, especially the road activity, Q1 was impacted by seasonality. Let me stress the main highlights for this quarter. First, we experienced a significant growth in group sales compared to Q1 2020. Second, the group's current operating results and margin were close to Q1 2019.

Third, net profit attributable to the group was positive, which is quite unusual considering the seasonality of the business. Fourth, our financial structure remained very robust. And lastly, based on Q1 results, Bouygues Telecom is able to release -- to revise upwards its EBITDA after lease target for the full year. In conclusion, in an environment still uncertain and affected by the pandemic, the group confirms its outlook. Let's turn now to the group key figures on Slide 5 to review more in detail this performance.

Group sales were €7.7 billion, up 7% year-on-year. The good news for the first quarter is that all our business segments delivered growth compared to Q1 2020, thanks to solid commercial activities. The growth was particularly strong in France, as last year activity was impacted by a strict lockdown from mid-March 2020. In international markets, sales were affected by an unfavorable exchange rate effect. Like-for-like and at constant exchange rate, revenue was down by only 3%.

Current operating results improved by €165 million compared to 1 year ago. At minus €77 million, results were close to Q1 2019 level, which is a good performance. And finally,

it reflects: first, a favorable base effect as Q1 2020 was negatively impacted by the beginning of the lockdown; and second, the positive results of ongoing strategic plan and the operational action led by the business segments. Therefore, Q1 2021 current operating profit -- current operating margin, sorry, was close to Q1 2019 level. Operating results improved strongly, benefiting from this solid operational performance and €60 million of noncurrent income at Bouygues Telecom essentially related to the disposal of data center.

Finally, a €21 million net profit attributable to the group was positive. It include a €120 million contribution from Alstom, was detailed in our press release published last week. Let's turn to Slide 6 that highlights the group's strong financial position. I now give the floor to Pascal.

Pascal Grangé: Thank you, Olivier.

At end March 2021, available cash was at the high level of €11.5 billion compared to €10.3 billion 1 year ago. It included €3.6 billion in cash and €7.9 billion of undrawn medium and long-term facilities, of which €7.5 billion were without covenants. As you can see, the debt maturity schedule is well balanced with no debt to owe. Moving to Slide 7. Net debt was €2.6 billion at the end of March 2021.

It is the lowest level for our first quarter in 15 years. Compared to end March last year, net debt was down €946 million, a significant reduction. The strong cash generated by operations of €1.5 billion covered both the payment of dividends and the acquisition of EIT, which has been renamed Bouygues Telecom Business Distribution, and this now referred to as BTBD. Moreover, net debt benefited from the positive impact of the disposal of Alstom's share capital in November 2020 and March 2021 for a total of €0.9 billion. Net gearing decreased by 9 points over the same period to 22%.

Compared to end December 2020, the increase in debt -- net debt is moderate €662 million, as the usual seasonality effects were partially offset by an improvement in operations. The group relies on a particularly strong financial position, which remains a major asset to strengthen its business segments and accelerate their growth over the next few years. Let's now turn to Slide 8 to see the net debt evolution between end December 2020 and end March 2021. You can observe that the moderate increase in net debt since the end of last year is mostly explained by the 2

following items: first, the positive impact of €492 million of proceeds net of fees from the sale of 12 million Alstom shares in March; and second, an outflow of €1.1 billion from operations decreasing by €189 million year-on-year, that I will explain on the next slide. Turning to the breakdown of operations for the first quarter 2021 on Slide 9.

You can observe that, first, net debt -- net cash flow, including lease expenses, increased by €179 million year-on-year, a significant improvement, reflecting the increase in activity in all businesses. This level is even better than in Q1 2019. Second, net CapEx was down €110 million, mainly due to higher disposals in the first quarter at Bouygues Telecom related to data centers. And third, you can see on the chart that working capital requirement related to operating activities increased by around €80 million compared to the same period of last year. I would like to stress that the management of working capital by the business segments in 2020 was remarkable.

We started the year with a working capital requirement already optimized. And with stronger activities than 1 year ago, to date, we do not observe any slippage. I will now turn to the review of operations, starting with the construction businesses. Let's begin with the backlog in the construction businesses on Slide 12. At €33.4 billion, the overall backlog at end March 2021 was up 2% at constant exchange rates and excluding the main disposals and acquisitions compared to the same period of last year.

It also remained at a high level compared to the last 6 years. The share of order book in international markets is stable year-on-year, representing 62% of the backlog at Bouygues Construction and Colas. Let's now look at the backlogs by geography on Slide 13. As you can see, the international markets remained dynamic, with a 4% increase in backlog at end March year-on-year at constant exchange rates and excluding the main disposals and acquisitions. Colas has notably won significant contracts in the road sector in West Africa and Eastern Europe.

In the Greater London region, Bouygues Energies & Services was chosen by the operator Virtus to design and build its mega-data center in Hayes. In France, the backlog was down slightly year-on-year at end March 2021. Bouygues Construction's backlog was up 3%, driven by a good commercial dynamic in medium-sized projects. The decrease of Colas backlog reflected delays in public orders due to the pandemic. In roads, orders resumed.

And in rail, new orders are expected in the second half of the year. Colas already responded to tenders for the Grand Paris projects, whose results are expected in the coming months. At Bouygues Immobilier, reservations in residential rose by 15% compared to last year, reflecting solid customer demand. However, delays in obtaining building permits are still very long due to the pandemic and municipalities agents working from home. We therefore have a lower supply of units available.

Regarding commercial activities, clients are in the wait-and-see mode. As a result, the backlog was down 12% year-on-year. Let's now look at the construction activities' key figures on Slide 14. The construction businesses started 2021 on a strong note. Activity was up 6% like-for-like and at constant exchange rates, driven by all business segments.

In France, revenue was up 16%, partly reflecting a favorable comparison effect at the lockdown, which began mid-March last year, led to the closure of most of our work sites. In addition, we benefited from a steady demand in residential and a good activity in roads in March. This level of activity is close to the one we had in first quarter 2019. Like-for-like and at constant exchange rates, international sales were down only 3%. Colas activity, particularly in Central Europe and in the United States, was impacted by unfavorable weather conditions in the first quarter.

The profitability improved significantly compared to Q1 2020. Current operating results increased by €155 million, and current operating margin was minus 3.5%, at the level of Q1 2019. This was

led by: first, an increase in margin at Bouygues Energies & Services compared to Q1 2019; second, better progress at work sites at Bouygues Immobilier; and third, an earlier start of Colas activity in Canada and the positive results of the ongoing strategic plan, including notably the organization in France and the optimization of industrial activities. Please remember that like every year, Q1 earnings are not indicative of first half and full year results due to the usual effects of the seasonality. Looking ahead, our construction businesses have promising growth prospects as the essential needs of housing, energy and transportation remain intact.

Moreover, our businesses will benefit from the stimulus plans announced in the country in which they operate. Let's have a brief look at those plans across the world on Slide 15. We have already shown you this map, which represents the percentage of sales of our construction businesses by region in 2020 and the underlying stimulus plans that have been announced for each of them. We updated the chart with the $2.3 trillion plan recently announced in the United States by President Joe Biden. This new plan would incorporate $621 billion for transportation infrastructure, notably including the modernization of wages, highways, roads and public transportation, airport renovation, rail upgrade, and ports and waterways improvements.

This plan will be financed over 15 years. It is too early to know precisely what will be approved by Congress, but this plan should bring good opportunities for Colas in the U.S. Bouygues Construction could also benefit from good prospects in building activities and public works, as they are developing in the region. The Pawtucket tunnel in the state of Rhode Island illustrates this potential. In Europe, and particularly in France, while there may be some delays, we still expect to see the positive outcomes in H2 2021.

Now let's talk briefly about TF1, as results were released at the end of April. We will discuss the proposed merger at the completion of the Q1 2021 results presentation. First, TF1 released a good set of results, as highlighted on Slide 17. The improvement in sales and current operating profit was driven by all 3 business segments. In Q1 2021, TF1's audience share among key targets improved compared to Q1 2020, highlighting the attractiveness of the group's TV channels.

First quarter advertising revenues were up 1% year-on-year at €358 million. We saw the return of advertising spending in several sectors, such as food and retail. As a whole, sales were up 3% year-on-year. Performance at studios and entertainment was also very good, driven by Newen, which saw revenue boosted by some catch-up in productions originally planned in 2020. Current operating profit showed significant improvement, reaching €57 million in the first quarter, thanks to the good control of broadcasting schedule costs amounting to €211 million, which remained almost stable compared to the first quarter of last year.

As a result, current operating margin was up 2.7 points to 11.2%. In this context, TF1 confirms its full year outlook, as you can see on Slide 18. As recently announced and in line with its strategy, Newen recently took a controlling stake in Izen, a leading player in Spanish production. This strategic move is consistent with Newen's ambition to grow its activity in international markets by generating a significant part of its 2021 sales outside France and by increasing its backlog with pure-player platforms. Moreover, TF1 expects Unify to increase its sales and achieve a positive current operating margin in 2021.

Please note that this outlook is based on information known to date and excludes any further deterioration due to the pandemic. Now let me turn the call over to Christian Lecoq.

Christian Lecoq: Thank you, Pascal, and good morning, everyone. I hope you are all fine and in good health. Starting with Slide 20.

You can see that we achieved a significant step in mobile in the first quarter. At end March 2021, Bouygues Telecom had 14.3 million mobile plan customers, excluding MtoM, following the integration of 2.1 million BTBD customers. Commercial activity remained dynamic during the quarter despite the closure of around 220 stores due to the health crisis considerations. As a result, Bouygues Telecom won 141,000 new plan customers in Q1. Thanks to this performance, Bouygues Telecom already achieved 54% of its Ambition 2026 target to win 4 million additional mobile customers, excluding MtoM.

We are therefore confident in our ability to meet the target. My presentation will also show you that mobile ABPU continue to grow at the same time we expanded our customer base. Now let us turn our attention to our fixed customer base on Slide 21. As you can see, we have 4.3 million fixed customers at end March 2021, including 98,000 won in the first quarter. In FTTH, net adds continued to grow at 190,000 customers joined us during the first quarter.

With a total of 1.8 million subscribers, FTTH customers represented 42% of our fixed customer base compared to 28% one year ago. Having achieved 6% of our Ambition 2026 target in one quarter, we are on track to deliver our goal of 3 million additional FTTH customers. Once again, I would like to stress that the increase in volume is not detrimental to ABPU. Indeed, as shown on Slide 22, our more for more strategy is bearing fruit. Please do keep in mind that the ABPU figures on this slide do not include BTBD.

Mobile ABPU and fixed ABPU were up year-on-year in the first quarter of 2021. Mobile ABPU increased by €0.6 to €20.2, restated for the roaming impact. And fixed ABPU increased by €1.1 to €28.2. This growth in both volume and ABPU resulted in the solid top line growth in the first quarter 2021, as illustrated on Slide 23. Total sales were strong and up 17% year-on-year in the first quarter of 2021.

Sales from services were up 13% over the period, or 4% excluding BTBD. This performance was achieved both through mobile revenue, which was up 15%, including BTBD; and through fixed revenue, which grew by 9%. Other sales increased by 35%, a strong performance reflecting the acceleration of FTTH connection and the growth in build-to-suit revenues. EBITDA after leases for the first quarter was up 10% year-on-year at €330 million. Performance is better than what we expect for the full year 2021.

Please remember that in Q2, we have an unfavorable comparison effect on EBITDA after leases coming from

2 items: first, €17 million of capital gain from the disposal of FTTH premises to SDAIF; and second, €20 million of available savings related to the 2020 lockdown. The EBITDA after leases margin was down as expected, reflecting: first, the dilutive impact from the BTBD integration; second, a negative roaming impact of around €20 million in the first quarter of 2021 versus first quarter of 2020; and third, a mix effect related to the FTTH ramp-up, notably in medium-dense urban areas. Regarding current operating profit at €76 million, I would like to say that it included €6 million of depreciation and amortization of intangible assets acquired for BTBD, following the provisional purchase price allocation. Lastly, operating profit was higher than in Q1 2020 at €136 million, thanks to a noncurrent income of €60 million essentially related to the disposal of data centers. I now want to add a few words regarding our recent BTBD acquisition on Slide 24.

The integration started positively since employees are fully committed, a new senior management team has been put in place, and the EIT integration plan is on schedule. BTBD launched its first commercial campaign in March and April, and it has been successful as BTBD sales performance was higher than 1 year ago. Meanwhile, the commercial trends remained dynamic for trademark licenses. We initiated the first BTBD customer migration to Bouygues Telecom network during the quarter, and we are pleased to have no impact on churn rate. We'll continue to migrate BTBD customers slowly and progressively to maintain good service quality.

The first switch of customers to Bouygues Telecom offers will begin by the end of 2021, 12 months earlier than planned. To summarize, the BTBD integration is well on track to succeed. Let me end with our outlook on Slide 25. Thanks to the performance achieved in the first quarter, Bouygues Telecom raises its EBITDA after leases target for the full year and is now expecting an increase of around 7%, including BTBD. Furthermore, Bouygues Telecom confirms its 2021 sales from services and net CapEx objectives.

Now I'm pleased to hand over the floor to Pascal.

Pascal Grangé: Thank you, Christian. I would like to briefly comment on the financial statements on Slide 27. We have already discussed first quarter revenues and current operating profit at the beginning of this call. Other operating income and expenses were positive at €56 million in the first quarter.

It notably included noncurrent income of €60 million at Bouygues Telecom, as Christian explained already, and a negative €4 million at Bouygues Immobilier related to some adaptation measures. You can also note that cost of net debt decreased slightly year-on-year due to lower interest expense on our bonds, as we reimbursed a bond in July 2020 and issued a new one at a lower rate in April 2020. Regarding the income tax line, the effective tax rate was 20% in the first quarter 2021 compared to 28% last year, in line with a smaller operating loss and a decrease in the French tax rate. The share of net profit of joint ventures and associates was €105 million. It included the contribution from Alstom, as explained previously.

We will now turn our attention to the group outlook on Slide 29. Olivier, I give you the floor.

Olivier Roussat: Thank you, Pascal. I'm on Slide 29. In a macroeconomic and COVID-19 crisis context that remains uncertain, the group confirms its outlook already announced in February 2021.

Obviously, this outlook is based on information known to date and exclude any new unfavorable change due to the pandemic. To conclude this presentation, I'd like to come back to the Monday night announcement regarding the merger project between TF1 and M6. Slide 31. As announced 3 days ago, Bouygues SA, Groupe TF1 and M6 have entered into exclusive negotiation to merge the activity of Groupe TF1 and Group M6 to create a major French media player. Bouygues assessed this unique opportunity to reinforce its position in the French media market, which offer long-term growth prospects.

The new combined group will be strongly positioned to compete in the evolving global media landscape, thanks, first, 360-degree multimedia presence in TV, radio, content production and digital, benefiting from strong brands. Second, the combined entity with pro forma sales of €3.4 billion in 2020 and strong investment capacity in content and technology. This entity will strengthen the supply of French quality content and allow the acceleration of the development of a French streaming champion. The merged company will be a leading player in Europe. Third, this merger will provide an enriched experience for the general public.

We will gain an enhanced premium and local content offer and a customized digital experience. Furthermore, advertisers will be offered a wider range of choice, benefiting from cutting-edge technology in streaming and addressable TV advertising. Lastly, this transaction will result in strong value creation for all shareholders. The annual run rate EBITDA synergy have been estimated between €250 million and €350 million. The new entity will -- would, sorry, therefore, be positioned as a benchmark for the sector.

On the Slide 32, we highlight the main step involved in this transaction. The first step will be a carve-out of the activity of Groupe M6 between those related to broadcasting authorization that we call on the slide M6 Edition and the rest of the activity that we put in M6 Services. We do this due to the French regulation. Because of the French regulation, it's now possible to put in the same entity 2 channels with an audience which is over 8% at the nationwide point of view. The -- for this reason, we need to separate the 2 -- to create 2 entity, one for M6 and the other entity for the rest of the group.

The activity of M6 Services will merge with TF1 in exchange for new TF1 share based on the merger parity, reflecting the overall economic exchange ratio of 2.1 TF1 share for 1 M6 share. Following this, Bouygues would acquire an 11% stake of the merged entity from RTL Group for €641 million. And finally, RTL Group will contribute its 48% stake in M6 Edition to the combined entity. Following these steps, Bouygues will own around 30% of the merged entity and will have exclusive control over it, acting in concert with RTL Group as a strategic shareholder. Both Bouygues and RTL Group are committed to support the combined entity over the long term.

This project was unanimously approved by the Board of the 4 companies. Looking at the financial slide. This operation will be accretive for Bouygues and bring significant value-creation potential. Slide 33. As a matter of fact, as you can see on this slide, thanks to the M6 Group's high profitability, the current operating margin of the merged entity will have been 30.7% in 2020 on a pro forma basis higher than the TF1 margin, which was 9.1, sorry, percent in 2020.

This transaction will also increase earnings per share. This transaction will have a limited €600 million impact on the net debt before consolidating M6 net debt or -- at closing, and it will not affect our ability to consider other opportunities to reinforce Bouygues in other business segments. Moreover, the value creation potential would be significant then to the annual EBITDA synergy. The project is very attractive for Bouygues from both the industrial and financial sides. Third -- Slide 34.

The transaction is subject to the usual condition precedent and more specifically, the approval of the French antitrust authority and the media regulator. Its completion is expected by the end of 2022. Meanwhile, neither TF1 nor M6 will be at risk during this period because it will be business as usual and competition as usual for each entity. Like all industrial and synergistic operation, the transaction is more complex than a simple financial view. But we are very confident in the outcome of the discussion we will have with the antitrust authority and the media regulators that will allow this operation to be completed under satisfactory condition for all stakeholders.

This concludes our presentation. Thank you for your attention. Operator, please open the floor for questions.

Operator: [Operator Instructions] The first question comes from the line of Mr. Nicolas Cote-Colisson from HSBC.

Nicolas Cote-Colisson: I'll start with a question on telecoms. I'm interested in your views on equipment supply constraints, if any. And also, how do you take the decision from Iliad to eventually enter the premium market? Because both of you are now having high ambitions to become a long-term leader behind Orange. So I'm interested in your views on the risks of a resurgence of a price war after almost 2 years of, I would say, relative peace. And on the construction side, back to your Slide 15 on the stimulus plan.

Can you help us on the phasing? I was wondering if you could tell us if there are any regions that could materially impact your business as early as 2021.

Christian Lecoq: Nicolas, so about your first question, I think it's mainly about the trend we saw today on chipset supplies. Today, we have these difficulties of chipset supply doesn't have any impact for us on the radio network equipment or, in general, network equipment, I will say, neither on handset. What we see is that we have more difficulties for set-top box and box with 2 impacts. The first one is a bit higher prices for these equipment, but today, it's more impact for us, less than €10 million for the year, for example.

And the second impact is that we have to anticipate our supplies so as to be secured. So today, I think that we have already ordered our box for the next coming years, so from now to mid of next year. So we are very confident to -- on this point. So no big deal for us. It's the first point.

The second point was about the price war, possibility of price war in France. That's what we saw, I would say, more promotional -- more promotions in the Q1 of this year. I think it was mainly because the shops were closed, and so we have to attract the customers to the digital channels. I imagine 2 things. The first one is that Bouygues Telecom didn't put in place the, first, the promotions.

During Q1, it was mainly SFR, and we decided to follow as usual. This is the first point. And the second point is this is very limited promotional -- promotions limited to the SIM-only, web-only offers, and so no big impact for us. Today, our shops have been reopened today, so today or yesterday. So I think that Q2 will be much better for us at this point.

And about Iliad on the subsidy market, well, no comment. They used to do that I think for -- they are used to do that for now 2 years or 3 years with refurbished handset. So with -- you see -- you saw that in our figures. You see that in our figures. No big impact on our revenue neither on.

Pascal Grangé: As far as stimulus plans are concerned in the construction businesses, I would say that probably in the U.S., it will be next year, but we could expect in Europe, and especially in France, first effect during H2 2021. So there was, in particular, for Colas projects, smaller rail projects and probably some cycling roads and so on and so forth.

Operator: The next question comes from the line of Mr. Jakob Bluestone from Crédit Suisse.

Jakob Bluestone: I had two questions, please.

Firstly, I'd be interested if you could comment a little bit about your thinking on the balance sheet on the back or post the TF1-M6 transaction. I appreciate it's quite a late closing. But do you think there's still balance sheet capacity for further acquisition and assuming the deal goes through? Or do you still have a sort of slightly underlevered balance sheet? Or is this you essentially done? And then secondly, can you perhaps comment a little bit around the margins for Colas? I mean, operating profit improved by almost €100 million year-on-year. I think it had a €75 million COVID drag in last year. So it looks like there's sort of a fairly healthy ex-COVID development in Colas.

So just interested in what are your expectations around margins for Colas? Do you still expect margins to sort of end up at the 2019 level for this year? Or given the performance in Q1, do you think it could be a little bit better?

Pascal Grangé: Okay. For your first question, if you consider our balance sheet, we can consider that we have a very, very low level of debt end of last year but also end of this year. I remind you that if you cover a 1-year period, the operational inflows have covered, first, the dividend; secondly, the acquisition of EIT. So the proceeds in -- related to Alstom have improved our net debt from the -- for the same amount. So it's a good achievement of our operational activities.

So you know that we have structured the TF1-M6 operation in a way in which we will have a company after merger with a very, very low level of debt and no impact for the consolidated debt of the group. And we will have to disburse €644 million to buy to RTL Group at 11% of their stake. So there is a very important room to develop our other businesses. I remind you that we have already said that we consider several fields for development, first, roads for Colas. And we have targeted 2 -- in particular, 3

particular regions: Northern Europe, Germany and the U.K.

And we have energy and services in which we want to -- the third region, sorry, the Northern Europe, Germany and Northern America, especially in U.S. And we have also targeted energy and services in which we consider that we have room for development and improvement in margins. So we have -- we consider that our balance sheet is sufficiently strong to develop these different projects. The second question was related to Colas margin. You have seen that we have achieved a quite good performance during the first quarter of 2021.

And we are very satisfied about that figure. Because if you consider the level of activity in 2021 compared to 2019, we are a bit lower, but we have maintained the level of margin, which is a very good news and which, in fact, illustrates the actions we are developing at the Colas -- in Colas Group in order to optimize some activities, in particular, quarries and bitumen activities under the efforts which have been made to restructure French road activities. So we are quite confident for the year. Frankly speaking, it's very early to know precisely what will be the margin for the current year, but we remain optimistic to be not far from the 2019 level, probably not at the level of 2019, but in fact, we have to wait one quarter to see how things develop.

Jakob Bluestone: And if I can just ask a quick follow-up.

Just on the M6 transaction, given you expect to retain exclusive control, can we assume that the accounting treatment of TF1 within the Bouygues Group will remain unchanged so you continue to consolidate it?

Pascal Grangé: You are perfectly right. We will be retaining the whole group under the global method.

Operator: The next question comes from the line of Mr. Eric Lemarié from Bryan Garnier.

Eric Lemarie: Yes.

I've got two. The first one, regarding Bouygues Energies & Services. On the sales of Bright by ENGIE in these sectors, do you expect any positive impact on market discipline in term of pricing after this operation will be done? A second question regarding the new workplace. There is a lot of talks currently, discussion around the new workplace post-pandemic, I would say. Do you get some specific offers in the Bouygues Group? I was thinking in particular of Bouygues Immobilier and Bouygues Energies & Services.

And maybe it would be nice, if I may, if you can provide the revenues and margin of Bouygues Energies & Services in Q1, please.

Pascal Grangé: First, considering Bright, we do not -- in fact, we do not expect any impact on the market related to this operation. Let's say that, as you know, we have an important action plan in order to recover some better margin at the Bouygues Energies & Services level. And the same, in fact, for the Bright Group because if you consider that they are at a level which could be improved and if you compare to their competitors and our competitors. So -- but no market effect of this operation.

Secondly, the margin improved. I don't compare the profitability of Q1 2021 to 2020. As you know, the lockdown last year impacted drastically the margin. But if -- we are on the way of improvement of the profitability of Bouygues Energies & Services from 1.2% in Q1 2019 to 2.2% at Q1 2021. We have set an action plan.

It takes time to have the results of that because, as I mentioned in different circumstances, we need to change the organization of the company. We have to change the geographical mix of the company, and we have to change the activity mix of the company. We are doing so. We are quite satisfied about our action plan on the results we obtained. The margin is increasing.

We intend to reach at this year a level which will be comparable to the average level of margin at Bouygues Construction. This is the first step. And then we will have to reach the level of our competitors. And your third question was related to workplaces, and you were asking if we had some specific solutions to propose to our clients. The -- I have different things to say in that respect.

First, we are sure that a lot of companies are actually in wait-and-see period because they don't know. We are not in a normal situation. So people are working from home today, but it's due to the pandemic, and it's not a long-term policy. So we will have to wait. We will adapt our products in order, at Bouygues Immobilier level, to propose some new kind of offices.

And we have already our WOJO activity, which is related to the co-working places. And obviously, they stopped their activity in large extent during the -- in the last 12 months, but we will consider that it will recover rapidly. You know that the WOJO company is a company which is cooperation between Accor, a JV between Accor and Bouygues Immobilier.

Operator: The next question comes from the line of Mr. Jerry Dellis from Jefferies.

Jerry Dellis: Yes. First question relates to your construction activities. I'd be interested to understand how a more inflationary outlook might impact your cost base, the various elements of your cost base. And what ability you think you might have to pass on higher inflation to customers? Second question. Okay.

Second question was just on the telecom guidance. You've raised the EBITDA guidance obviously this morning, but the revenue target is unchanged. So the reasons behind the EBITDA upgrade would be very interesting, please. And then just finally, on the RTL-M6 transaction, I'd be interested to understand, please, how RTL will be compensated for contributing the 48% stake of M6 Edition into the merged entity?

Pascal Grangé: I will start with the inflation question in the construction businesses. Firstly, we have to separate 2, the Bouygues Construction activity probably and Colas activity.

Because in average, Colas activity are based on a short-term contract. So when we submit our offer, we have not a very long to wait before realizing the work. So there is no material inflation issues. When there is inflation and some raw materials and so on, we increase our offer price. So there is no particular risk in that respect.

At Bouygues Construction, the situation is a bit different because the period between the day we submit our offer to the day we are realizing the work, we have far longer to wait. And there is, in fact, 2 particular mechanism in order to transfer that risk to, first, to our clients with formulas. And in some contracts, we have some formulas, price index in order to cover that risk. And secondly, when we offer firm prices, then we ask our suppliers firm offers for the equipments and the materials. So this is our strategy.

So the remaining part of the risk remain more marginal. This is for the inflation. Probably Christian will answer to.

Christian Lecoq: Yes. For Bouygues Telecom EBITDA, so the change of guidance means that we have €30 million more EBITDA than expected before.

The main impact is the fact that BTBD integration is better than expected. So that means that we have better level of synergies than we expected before. So this is the main impact. The second impact is the trend in term of OpEx. We are spending less OpEx, a bit less OpEx than expected.

And this is the second impact. And the third impact is we could have some small roaming revenue at the end of the year due to vaccination campaign. And we expect that the COVID impact could be lower at the end of the year. That is the 3 main impact for EBITDA, but the main one is BTBD synergy.

Pascal Grangé: And your third question was related to the structure of M6-TF1 deal and how RTL Group will be compensated for their 48% stake in M6 Edition.

That's quite clear. They will be remunerated with TF1 shares. And the -- when we mentioned the 16% stake of Bouygues, of RTL Group, this includes the compensation for their 48% -- for their participation in M6 Edition. Is it clear?

Jerry Dellis: That is clearer, but it's still not clear to me the basis on which M6 Edition will be valued. Is it possible to shed some light on that, please?

Pascal Grangé: No.

At that stage, it's too early to give you some details on that. But obviously, all the mechanism has been -- at that -- designed in order to make sure that the level of valuation of M6 Edition will be integrated in the remuneration of RTL Group.

Operator: The next question comes from the line of Mr. Mathieu Robilliard from Barclays.

Mathieu Robilliard: Yes.

If I start with the question on construction. Could you give us a little bit of color in terms of the intake at Colas during the quarter? And also, how you now view in the quarter that has passed and the outlook compared to maybe your views at the end of last year where you were quite cautious? So that would be the first question. Also, on construction, so there was some big order intake in France in the quarter. I may have missed comments on that during your scripted remarks, but should you -- could you give a bit of color there? That would be great. And then lastly, on telecoms.

You were asked before about the competitive environment, and your message is that it is -- it has deteriorated a bit on the very low end. But I guess, what you're saying is that it still is solid for the rest of the market. So I wanted to know if you were able to continue to do more for more initiatives on your back book since the beginning of the year and you still think you can do during the rest of the year as you did in 2019 and '20?

Christian Lecoq: So let me answer the third question on telecommunication. Yes, of course, our goal is to continue our more for more strategy during the year and the years after. So we did that during Q1, despite the fact that we had, of course, some promotions on the end market.

So we'll continue to do that.

Pascal Grangé: And as far as your first question is concerned, which is what will be -- what is the color in commercial activity for Colas during Q1 2021. Let's say that we were obviously a bit anxious at the beginning of the quarter, due to the fact that it's quite difficult for civil servants to organize competition and call for tenders from home. And we are quite satisfied about how the situation has been -- has evaluated during the quarter. Colas tenders increased by 15 -- in average, has increased by 15% in Q1 2021 compared to Q1 2020.

But it remains lower than the average level of Q1 2019. But we had a quite satisfactory last month, I mean, in March. So we are considering new call for bids for municipalities, which are at the beginning of a new electoral cycle. And we consider that it will have a positive impact during Q2 and H2. So -- and then we will have, in addition, the impact of the stimulus package.

So we are quite satisfied about this commercial activity. And I'm very sorry, but I have not get your second question.

Mathieu Robilliard: Yes. Sorry. It was about the order intake on construction.

In France, there seems to be a 35% increase. So maybe you explained it during the call before, and I missed it. But if you could give us a little bit of color as to why it progressed so well in construction in France.

Pascal Grangé: In fact, there is always a bit of volatility in our figures in France for Bouygues Construction as we are considering major and medium-sized projects. Let's say that during the first quarter, we had 2 important projects, which are the real estate renovation project in Boulevard des Capucines, which is quite important, and we have been awarded also for some stations for the Grand Paris.

But in general, we can say that we are quite satisfied about the order book in France and order intake related to medium-sized projects.

Operator: The next question comes from the line of Mr. Josep Pujal from Kepler Cheuvreux.

Josep Pujal: Yes. I have two questions both on the TF1-M6 deal, please.

The first one is on the synergies, which are an important part of the deal. Could you help us understand the main areas where you expect the synergies and also the split between the merged entity and the pure-channel M6, where those -- most of those synergies will be? And my second question is about what you mentioned earlier about this long-term commitment of RTL and, of course, yourselves to support the deal. Could you be more precise about what long term -- does it mean how long are they, I would say, engaged in supporting, I would say, this entity?

Pascal Grangé: Okay. Starting with your second question. Let's say that we have negotiated effectively a long-term cooperation agreement.

So there is no date for -- which is forecasted for them to leave. So it could -- obviously, they will see. And I think that Thomas Rabe, because it's mostly a question for Thomas Rabe, explained that in the Le Figaro today, that he is at least committed for a few years, and then after, if the cooperation goes well, he intends to stay. He mentioned that it is -- that Bertelsmann is a group, a family-owned, which is committed on the long term. So he do not intend to leave.

That is for your first question. And your second question was related to synergies. Most of the synergies are cost synergies which are related to optimization of stock, utilization of tools and obviously, all programs, which are both externally, and this is the main part. And there is a few revenue synergies which are related to the way we can propose new offers to our clients and to advertisers.

Operator: The next question comes from the line of Nawar Cristini from Morgan Stanley.

Nawar Cristini: I have two on telecoms, please. Firstly, starting by B2B, following Iliad's launch in March to the SME market, would love to know if you've seen any impact at the moment and what you see generally in the marketplace. Have you seen any particular reactions triggered by these entrants? So that's the first question. And my second question is linked to the subsidized offer. I've seen that in the digital and environment road map that the government published in February, they seem to mention this as a potential route to try to work on the carbon footprint coming from smartphones.

It would be helpful to get your view on this. Do you see any potential risk coming from regulation in the subsidy market?

Christian Lecoq: Right. So about your first question and Iliad's entry in the B2B segment, we do not see any impact on the market. As you know, Iliad offer as many -- what we call the pro segment, so the small office, home office or very small business, and not the small and medium enterprise. So we do not have any impact today.

We already have, at the telecom level, some offers for this pro segment at quite the same price as Iliad, if you included in the -- Iliad offers all or what we have already in our offer, like, for example, premium services and so on and also the mobile line. So no impact, no impact for us. I remind you that Iliad was probably already present in the pro segment via mass market offers like us today. We have many tools that, in fact, use B2C offers, normal B2C offers. So that's the point for that.

About the subsidy, we do not consider that smartphone subsidies have an impact on the renewable weight of mobile. Today, I think that on the market, more than 75% of the customers can change their handsets today, so are free to change their handsets, and they do not block quickly their SIMs. So we do not think that this has an impact. I remind you also that Bouygues Telecom has a big program in term of renewal of the handset. We were the first operator to launch such a program many years ago now, and so we are very happy with this program.

And the last point, We are quite surprised that, at the same time, the government demands us a 5G -- a fast 5G network deployment or 5G network rollout, whilst hiring at the same time to slow down the equipment of the customers in new 5G compatible handsets. So good to have a 5G network. But if the people cannot get any 5G handset -- because the 5G handset now, the price is more than €1,000, so it would be difficult to equip everybody at such a price. So without subsidies, I don't think that we could have a big 5G effect in France.

Operator: [Operator Instructions] We have no further questions.

So I'll hand the call back to our speakers to conclude the call for today. Thank you.

Pascal Grangé: Thank you. Okay. Thank you for joining us today.

We'll be announcing first half 2021 sales and earnings on 26th of August 2021. Should you have any question, please contact our Investor Relations team. The contact information is on the press release on our website. Have a good day.

Operator: Ladies and gentlemen, this concludes Bouygues First Quarter Results Conference Call.

Thank you all for your participation. You may now disconnect.