Operator: Ladies and gentlemen, welcome to Bouygues Nine Months 2019 Results Conference Call. I now hand over to Karine Adam, Head of Bouygues Investor Relations. Please go ahead.

Karine Adam: 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 the 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 Mr. Philippe Marien, Deputy CEO of Bouygues.

Philippe Marien: Thank you, Karine. Good morning to all of you and thank you for joining us. I would like to welcome everyone to our conference call to discuss Bouygues' nine months results. With me in the room is Christian Lecoq, CFO of Bouygues Telecom; and Pascal Grangé Former CFO of Bouygues Construction. As you know Pascal will replace me as CFO of the Bouygues Group following my retirement at end February 2020.

Following my comments we will be answering your questions. To begin on slide 4. The nine months results are in line with the trends we discussed during the first half announcement. First, the profitability of the group improved year-on-year driven by the three sectors of activity. Second, the construction businesses delivered a solid performance.

The backlog remained at a very high level at end September and the current operating profit increased. And third, Bouygues Telecom continued to deliver strong commercial and financial performance, thanks to a differentiation strategy focused on reliable and high-quality networks as well as a simple and seamless customer experience. In this context, we confirm the full year outlook shared with you in February and confirmed in August. The key figures showed on slide 5, confirms the increase in the group's results. Group sales of €27.6 billion were up 9% in the nine months.

Like-for-like and at constant exchange rates, group sales as well as sales in France and international markets were all up 5%. Current operating profit improved in the first nine months of 2019 and was up €260 million compared to the first nine months of 2018. This performance was driven by the three sectors of activity highlighted in the table. First at Bouygues Telecom, the current operating profit rose by €74 million year-on-year, thanks to solid and continued top line growth. Second, TF1 delivered €57 million current operating profit increase, which was already discussed during the publication of their nine months results on October 30 of this year.

And third, the construction activities posted growth of €122 million in current operating profit year-on-year boosted by a recovery in energy and services, a strong dynamic in mainland France roads business and a return to breakeven at Colas Rail. Therefore, the year-on-year group current operating margin reached 4.1% in -- for the nine months 2019. Group operating profit included non-current income of €50 million in the first nine months of 2019 mainly related to the capital gain on the sale of sites to Cellnex at Bouygues Telecom versus non-current income of €198 million in the same period of 2018. Finally, net profit attributable to the group increased by €77 million from a year ago. It includes Alstom's contribution of €238 million in the first nine months of 2019.

Of note, this contribution takes into account the net capital gain of €172 million from the disposal of 13% of Alstom's share capital in the third quarter. These results confirm our ability to meet our 2019 objective of improved profitability at the group level. Let us now turn to Slide 6 to see the net debt evolution from end December 2018 to end September 2019. On Slide 6. Net debt was €4.6 billion at end September 2019, up €1 billion compared to end December 2018.

Compared to end September 2018 net debt was down €0.8 billion. This increase over year-end is explained by several items. First, an inflow of €1.4 billion related to Alstom comprised €1.1 billion of proceeds for the September sales of 13% of Alstom's share capital and July's dividend of €341 million. Second, an outflow of €165 million in acquisition and disposals coming mainly from the

following acquisitions: Keyyo and Nerim at Bouygues Telecom in Q1; De Mensen and by TF1 in Q2. Please keep in mind that net debt at end September 2019 does not include the acquisition of Reel One by Newen at TF1.

The third item is the outflow of €710 million for the dividends. And finally, we have an outflow from operations as discussed in the next slide. Turning to the breakdown of operations on Slide 7 for nine months 2019. You can observe that net cash flow including lease expenses grew €109 million year-on-year excluding Alstom's dividend of €341 million. This increase was led by Bouygues Construction Colas and TF1.

Net CapEx is down €58 million mainly due to Bouygues Telecom, as expected, while net CapEx for construction activities is almost stable. As a result. free cash flow generation before working capital requirement has improved by €167 million year-on-year. Last, working capital requirement increased by roughly €400 million. The working capital requirements improvements at Colas and Bouygues Immobilier did not offset the deterioration of Bouygues Construction, which is linked to progress of on major projects.

By year-end, we expect net debt between €2.6 billion and €2.7 billion with an increase in working capital of around €400 million, which is the level at end September 2019. While we do not accept -- expect to offset the increase in working capital that we have experienced so far this year. It is not the result of any structural trend but rather more of timing issues. I will now turn to the review of operations starting with the construction businesses. Let's begin with the backlog on slide 10.

At €32.5 billion, the backlog in the construction businesses at end September 2019 remained at a very high level. As you can see on the chart, it is the second highest level of activity in the past three years -- six years. Despite a decline of 4% in the overall backlog at end September 2019 compared to the same period last year, the commercial momentum of both Colas and Bouygues Construction remains good as you will see in the following slides. Let us now to -- turn to France as illustrated on slide 11. In France, the backlog at end September 2019 reached €14 billion, a slight decline compared to last year at constant exchange rates and excluding major acquisitions and disposals.

At Colas, the backlog was up 7% over the previous year boosted by an 8% growth from roads in mainland France. At €8.5 billion at end September 2019, Bouygues Construction's backlog was slightly down compared to the same period last year. Significant contracts were booked in Q3 2019, including the harbor expansion of Port-la-Nouvelle in Southern France for €199 million. Important tenders are expected in 2020 related to Grand Paris Express. As anticipated, the backlog at Bouygues Immobilier was down 11% compared to last year.

This is due to the absence of commercial property order intakes in the first nine months 2019 as well as a decline in the French residential property reservations in a slightly contracting housing market. This slowdown in French residential market could continue in the first half of 2020 within the context of local elections in the spring. Let us now move to international markets. International markets are dynamic, especially in countries where the group has a long-standing presence. In this environment as shown on slide 12, the backlog at end September 2019 remained unchanged at a high level of €18.5 billion.

Orders for the quarter notably include two

major contracts: the construction by Bouygues Construction of a 4.4-kilometer tunnel in Hong Kong for €364 million and the construction by Colas of a taxiway at the Los Angeles international airport for 75 billion -- €75 million. Some significant orders are expected in Q4 2019 and in 2020 at both Colas and Bouygues Construction as evidenced by today's announcement of a €756 million contract at Bouygues Construction for the design and excavation of an undersea tunnel in Hong Kong. Overall, the share of order book in international markets rose from 59% one year ago to 61%. Let's now move to the nine months results for the construction businesses. Turning to slide 13.

Sales were up 9% in the nine months 2019 and up 4% like-for-like and at constant exchange rates, demonstrated -- demonstrating dynamic activity at Colas and Bouygues Construction. The construction businesses' current operating profit increased by €122 million in the first nine months of 2019 compared to the first nine months of 2018. Current operating margin was up 0.4 points over the same period. Several factors led to this increase. At Bouygues Construction, the rise year-on-year is -- in current operating profit was driven by a recovery in Energies and Services following difficulties in the completion of three projects in Q3 2018.

As highlighted, Energies and Services current operating profit was positive at €51 million in the first nine months 2019 compared to a loss of €139 million in the first nine months 2018. Energies and Services nine months current operating margin reached 1.8%, while building and civil works delivered a 3.2% margin. At Colas, current operating profit increased by €59 million over the same period. Excluding this year's negative contribution of €28 million from Miller McAsphalt in January and February, Colas current operating profit was up €87 million year-on-year reflected by strong improvement. As a reminder, the results of Miller McAsphalt in January and February were not consolidated last year.

The €87 million increase was driven by a solid momentum in the roads business in mainland France and the return to breakeven at Colas Rail, thanks to recovery measures implemented since end 2018. At 2.2% in the first nine months 2019, Colas' current operating margin was up 0.5 points, and excluding the negative impact from Miller McAsphalt, it was up 0.8 points. Last as previously mentioned, Bouygues Immobilier is experiencing weak activity in commercial property developments. Furthermore in residential, a buoyant French market related to peak reservations in 2017 had strained resources putting pressure on margins. Now let me turn the call over to Christian.

Christian Lecoq: Thank you, Philippe. Starting with slide 15, you can observe that our commercial customers remain very strong. We won 501,000 new mobile plan customers, excluding MtoM in the first nine months of 2019 of which 220,000 were in the third quarter. In FTTH, net adds have accelerated with 286,000 new customers joining us in the first nine months of 2019 of which 110,000 were in the third quarter alone. FTTH customers represented 20% of the fixed customer base at end September 2019 compared to 13% one year ago.

The FTTH customer base at end September 2019 has doubled compared to one year ago with 855,000 subscribers. We expect this trend to continue allowing us to reach one million FTTH customers by year-end. Overall, at end September 2019, Bouygues Telecom serviced 11.4 million mobile plan customers, excluding MtoM and 3.8 million fixed customers. As shown on slide 16, Bouygues Telecom delivered solid top line growth in the first nine months 2019. Sales were up 13% year-on-year and 11% like-for-like.

In line with first half year 2019, sales from services rose 7% in the quarter, thanks to

three factors: first, continued growth in the mobile and fixed customer base; second, stability of mobile ABPU at €19.9 for two years; and third, a significant €1.1 increase in fixed ABPU year-on-year to €26.6. This increase confirms the success of our strategy in the fixed market. EBITDA after leases for the nine months was €1.05 billion, an increase of 13% year-on-year. Additionally, EBITDA margin on sales from services was up 1.6 points to 30.9%. At €460 million -- €465 million, operating profit was down €80 million compared to the first nine months of 2018, reflecting an unanticipated drop in non-current income.

Two reasons explain this decline. First, lower number of mobile site disposals with €58 million in nine months 2019, compared to €127 million in nine months 2018; and second, non-current income of €110 million booked in Q3, 2018 related to the cancellation of 1,800 megahertz frequency charges accounted for prior to 2018. Gross CapEx at €734 million in the first nine months 2019 are down €186 million year-on-year in line with expectations for 2019. Free cash flow before working capital requirement improved by €27 million to €205 million in the first nine months 2019. Please keep in mind that in the first nine months 2019, Bouygues Telecom has already paid €144 million of income tax versus €82 million in the first nine months 2018.

Since we expect to pay a lower income tax for the full year 2019 related to the decrease in non-current income, we will pay smaller tax payments in Q4 than in last year. We are, therefore, confident of reaching our target of free cash flow generation of €300 million by year-end at Bouygues Telecom. Moving to slide 17. You see that for the second consecutive year, Arcep ranked Bouygues Telecom number one in rural areas. And was recognized second on network in France, thanks to the quality of its mobile network.

We are proud of these results since we ranked either number one or number two in all KPIs. Bouygues Telecom's focus on network quality and continued strategy and future developments provides confidence in the mobile network leadership and growth package. Slide 18. I like that our growth strategy is based upon three main drivers. First, we benefit from an increase of mobile market share in less dense areas.

Our mobile network chain has resulted in 50% more sites compared to 2015. And traditionally, we have strengthened our local distribution channels with the opening of around 50 stores. The second driver is a growth acceleration in FTTH. At end September 2019, we have €10.2 million premises marketed, up 3.9 million year-on-year. We are covering 85 French departments and over 3,090 municipalities.

Our goal is to market, 12 million premises by end 2019 and 20 million premises by 2022. The third driver is the B2B market. The acquisitions of Keyyo and Nerim are strengthening that Bouygues Telecom Enterprises position in both mobile and fixed with a focus on the SME segment. The integration process is ongoing. And we are currently migrating Nerim's technical infrastructures to Bouygues Telecom's infrastructures.

Regarding Keyyo, the good news is that we are already benefiting from our first positive commercial synergies.

Philippe Marien: Thank you, Christian. I would like to briefly comment on the financial statements. We have already looked at sales and current operating profit shown on slide 5. Let us now have a look at other income and expenses contributing to operating profit on slide 20.

The €148 million decrease in non-current income compared to one year ago came essentially from Bouygues Telecom as explained by Christian. Turning to slide 21. As you can see that income tax expenses increased by €60 million leading to an effective tax rate of 33% for the nine months -- the first nine months 2019. Moving to the associates and joint ventures line. The €34 million positive change is explained mainly by the improvement in results at Tipco, Colas' subsidiary that manufactures and distributes asphalt products in Southeast Asia.

Finally, we will turn our attention to the outlook for the full year. As you can read on slide 23 and as stated at the beginning of this call, we confirm the outlook shared with you in February and confirmed in August. This concludes my presentation. Operator, please open the floor for questions.

Operator: [Operator Instructions] And we have our first question from Nicolas Cote-Colisson from HSBC.

Go ahead. Nicolas Cote-Colisson: Thank you. Hello. First question on telecoms, you posted a significant increase in broadband ABPU this quarter, but the mobile ABPU is still flat though. When do you think we should see the effect of price increases? And looking forward what's your view on pricing models for 5G in the B2C segment especially? And I've got a second question for other businesses.

New management teams at Colas and Bouygues Immobilier are implementing efficiency plans or optimization plans. Can you tell us a bit more about these and whether it should -- we should see that as a way to win more contracts or improve margins or both? Thank you.

Christian Lecoq: Hi, Nicolas, this is Christian. About your first question about mobile ABPU, which is flat, it's mainly mix effect between low-end markets and high-end parts of the market. We continue to increase our ties either with our -- for our new clients and also for the existing clients, but it takes time to see that in the ABPU.

About 5G ABPU, of course, we will not disclose in advance our marketing strategy, but I think that our goal as all our competitors is to -- we will try to get more money to take some money thanks to 5G.

Philippe Marien: So regarding Colas and Bouygues Immobilier. At Colas, there is no change because of the new management. On -- in fact the strategy or some recovery is based mainly on the recovery at Colas Rail and the plan was -- is implementing since the beginning of 2019. So no change.

The idea is to come back to a safer situation in Colas Rail, mainly by reducing the SNCF share of the French activity of Colas Rail. And we have solved the threat issues at the end of 2018. So no change and the idea is, obviously, to increase the profitability of Colas Rail. Regarding the rest of the activity, no particular change because of the change of management, the idea is -- but launched two years ago now, launched developments in carriers and aggregates on one side and bitumen strategy on the other hand, but it's not a change because of the management. It's an evolution again since two -- for two years now, so no real change because of new management.

Regarding Bouygues Immobilier. Clearly, we are facing a weak situation in term of residential first because of decrease in reservations in 2018 and now in 2019 because of the general environment and mainly because of the municipal election. So we anticipate to have a better situation second half of 2020 with new phases for reservations and permits. That's the first point. So decrease in term of activity, so lower margin obviously.

And the second issues we have is clearly an increase in term of costs, building costs because of again a nice situation in construction, thanks to the good reservation in 2017. This situation probably will last up to the end of 2020. And we will recover a nicer situation in 2021, because of the decrease in construction market for residential mainly, again, because of the decrease in reservation in 2018, 2019. So that's the key issue for Bouygues Immobilier and the new management is facing to this situation and will prepare a series of measures to accelerate the recovery in 2020. And we will discuss that at the beginning of last year -- or next year to explain the various action we will take into account.

Nicolas Cote-Colisson: Okay. Thank you.

Operator: So we have another question from Andrew Lee from Goldman Sachs. Please go ahead.

Andrew Lee: Yes.

Good morning everyone. I had a couple of questions. One was on telco churn. So you're annualizing your more -- or the more aggressive promotions from 2018. And it's over a year since the €5 mobile promotions in the market were pretty much removed.

Are you seeing any increased churn as customers come off these promotions? And then secondly, just on your mobile service revenue year-on-year growth looks like it slowed a little versus last quarter. I just wonder if you can give us any color on any particular reason for that? Thank you.

Christian Lecoq: So about your first question about the churn rates for clients, we acquired last year at a very low price. As they are still at very low tariffs. In fact, advertisement for new clients is higher than what they are paying today.

And of course they are not churning.

Philippe Marien: Second question...

Christian Lecoq: ….second question.

Karine Adam: In your revenue.

Christian Lecoq: Your question is about the revenue...

Andrew Lee: About service revenue growth.

Christian Lecoq: Yes. Sorry. I think that you have to keep in mind that -- I think that you are calculating the service revenue by multiplying yes the total [indiscernible] multiplied by the ABPU. And then, you'll get only the revenue billed to the clients.

Then to go to the service revenue you have to add also start minuteing. So you have the incoming call and SMS revenue. You have the MVNO revenue. You have the roaming revenue and you have the IFRS 16 impacts. So all of these kind of things are not I will say linear or it's very difficult, you can have some difference in parts quarter-by-quarter.

That's why you -- it's very difficult to go from the subscribers increase plus the ABPU change to the service revenue percentage.

Andrew Lee: Thank you.

Unidentified Analyst: Hi, two questions please. First in terms of the EBITDA trajectory in Q4 on telecom. So clearly in Q3, the trajectory was a bit slower because as you pointed out, there were some one-offs in Q3 2018, but when we look into Q4 2019 and beyond, should we expect the operating leverage to reaccelerate assuming obviously that the top line continues to grow nicely? Or is there any change in the cost structure that will prevent EBITDA from progressing strongly? And then in terms

of Colas: When you look at your order book today, how is your expectation for 2020? Because typically as you flagged in the past during election years Colas can be a bit weak, but it seems the order book is actually quite solid in France.

So I was wondering. What is the outlook for you for Colas in 2020 in France? Thank you.

Christian Lecoq: So about EBITDA growth from Q3. That's why that I'll remind you that we had last year the impact of 1800 megahertz frequencies, which was we had to recognize the minus €8 million in Q1 minus €8 million in Q2 and plus €16 million in Q3. That's why our EBITDA growth I will say was better in Q1 and Q2.

And it's worse in Q3. If you exclude these elements, you will see that the EBITDA growth is quite stable. So we think that we -- I won't disclose Q4 indication. But of course we expect to see continued growth in term of EBITDA even if it should be slower than in the past than prior last year especially because part of our growth is coming from fixed where we have more and more fixed costs related to DSL or FTTH first point. And second point we are investing in our customer satisfaction program.

So that's our main -- and customer experience. That's our main strategic goal for the coming year.

Philippe Marien: So regarding Colas, you're right. We have always decreased in term of order intakes following a pre-election year, so the -- during the election year. So probably and surely, we will have the same phenomenon as in the past.

Nevertheless, we consider that the impact will be less important than previously, because in excess of this pre-election year phenomenon, we have clearly another element, which is an increase in our order intake not because of election year, but because of the status of the French road network. After a very long period from 2012 to 2017, we have seen a decrease because of the local authorities' budget constraints. We have seen a big decrease in term of budget for maintenance on the road business. So, the status of the network is not good. And so in excess of the usual pre-election year phenomenon, we see clearly an increase in our backlog because of pure maintenance activity.

And we consider that this trend will continue in 2020. So, for sure, we will see a decrease, but not so important as the previous years.

Unidentified Analyst: Thank you very much.

Operator: So, we have another question from…

Philippe Marien: And on top of just we have obviously the Grand Paris Express program which leads to have a new category of deals and then business coming from this big program. So, clearly, we are sure that we will continue to have new orders coming from the Grand Paris Express because after the tunnel construction we have to equip the tunnels with rails.

So, for Colas Rail, clearly, we see a relatively good 2020 year in France because of the Grand Paris program. So, not so bad as previously for roads and good dynamic for rail.

Unidentified Analyst: Very clear. thank you.

Operator: So, we have another question from Mr.

Giovanni Montalti from UBS. Go ahead.

Giovanni Montalti: Hello. Hi. Thanks for taking my question.

It's almost a year you signed the agreement for a partnership with Mirova and Axione around the deployment of fiber in dense areas. I was just wondering if you could give us a bit of color on the way this JV is going in terms of a route; in terms of I mean the way financials are working. And also if you may consider eventually extending this JV also to the less-dense areas to the rural areas as other players are doing. Thank you.

Christian Lecoq: Okay.

So, we signed with CityFast which is a subsidiary of Mirova at the end of last year an agreement for deploying 3.4 million premises in FTTH in the very dense areas. The deployment is ongoing process. I can't tell you exactly where we are but it should take around three years to quite finish the area. It's a very good partnership and we are very happy to work with Mirova and Axione on these topics. Regarding your other questions about doing other things in the rural areas, I'll just remind you that we do not have any infrastructures at Bouygues Telecom in rural areas because the FTTH network is rolled out by either Orange or SFR in the medium dense and by specialized operators in the public initiative network area.

Giovanni Montalti: No, no. For sure I understand that, but I was for example thinking of the JV that Iliad escalated with a financial partner to let's say help finance the co-investments that they have to do exactly with the big operators or with Orange and Altice in the semi-dense. Would you consider doing something like that eventually using this vehicle you have already created; or as well joining the one with Iliad joining forces? I don't know, just understanding how you -- we may think about this. Thank you.

Christian Lecoq: So, Iliad's scheme is -- it's a clever, clever scheme.

We have to deal with the scheme and we will look what we will do probably next year.

Giovanni Montalti: So, it could be possible for alternative carriers to join forces. I mean it could make sense for everybody. You would have a larger scale. There will be a diversification of the risks…

Philippe Marien: So, I mean definitely it's a very clever scheme.

So, we will see in the future if this scheme could be adapted to us. And definitely it's very clever and could be useful so we will see. We'll think about it--

Giovanni Montalti: Thank you very much. Thank you.

Operator: So, we have another question from Stephane Beyazian from MainFirst.

Go ahead.

Stephane Beyazian: Yes, thank you. Two questions if I can. The first one is if I'm looking at the present market in the third quarter, what is interesting intriguing I would even say is that all the operators have been growing their broadband base which is something new because over the past couple of years there is always -- there was a loser pretty much every quarter in the past couple of years. So, I was just wondering whether you have any view an explanation about that.

Any view on the overall market or that could help us understanding and why everybody is winning now? And my second question is regarding the order book. The -- at Bouygues Construction sorry to be more specific where we are seeing a little bit of pressure there. Obviously, I'm -- I think it is not including the Hong Kong contracts which are pretty strong. And again we are still at relatively high historical level but I'm just wondering whether you think that possibly you are at sort of the peak levels on your current geographies and whether you think that you may need now to be entering or pushing ahead stronger in new geographies where you haven't been so much, such as Germany, for instance, that could help you perhaps to further expand the activity of Bouygues Construction internationally. Thank you.

Christian Lecoq: So, about the fixed market in France reminding you just that the market is a growing market by more than 500,000 more households each year. So, that's why that sometimes someone is doing -- losing some customers and some other is gaining more customers. But it's a growing market more than 0.5 million per year.

Philippe Marien: That's all? Okay. So, regarding the backlog of Bouygues Construction, clearly, the backlog of Bouygues Construction is not under pressure.

And clearly our strategy -- and we say that for years. Our strategy is not growing strategy at any price, but clearly a selective approach on a project-by-project basis to be sure that we increase our margin which is our key target. Our target is not to increase by any means our backlog. So, we are not under pressure. We consider that we have sufficient opportunities in front of us to be selective and it's exactly what we have done in 2019.

As you have mentioned backlog in construction is always very difficult to compare one date to another because the day after you can have a new contract. So, what is important is the general trend. The general trend remains very solid because as we explained last year in October -- in September or October, I don't remember, in October; the construction landscape for us is a nice one in term of opportunities, mainly in the major countries in which we have a footprint. So the idea is not accept very specific opportunity, but the idea is not to enter massively into a new country, because again in the countries in what – in which we have a good footprint the opportunities are there. So clearly, we will continue to develop our activity in sophisticated contracts based on projects with sophisticated solution in term of low energy consumption, in term of smart cities, in term of sophisticated infrastructure, exactly what we have done in the recent past.

And so the – for us the market remains good. And again, it's sufficiently good to be selective to be sure that we will be able to deliver good margin in the coming years. That is our key target. And the target is not to increase again at any price at – I mean at any conditions, the volume of our activity. So we have absolutely no fears about our backlog in construction, because of the good trends generally speaking in term of stimulus plans for infrastructure as we have in France for instance, or in England, or in Eastern Europe or in Australia and other countries.

So no big change, no new geographical areas except opportunities based on specific projects, but again the situation for us remains good, because of a lot of opportunities leading to have a great selectivity on projects.

Stephane Beyazian: All right. Thank you.

Operator: So we have another question from Alexandre Roncier from Exane. Please go ahead.

Alexandre Roncier: Hi. Thanks for taking the question. Can you give us some more color on the benefits you would see from the upcoming IMO 2020 regulation, and more specifically how this should affect your different business line both on the revenue side for Miller McAsphalt? As I understand, there is worry in the market that asphalt contract pricing could see pressure. What's your main benefit on the costs side for the construction activity? What kind of net benefit could we see on margin in the coming years? And then secondly, working capital has been coming more of a drag than expected I think for the first nine months. How confident are you that you can normalize working capital level in light of your 2020 free cash flow guidance? Thanks.

Philippe Marien: So, regarding IMO 2020. And for us, clearly, it's – and Colas is the first buyer of the bitumen in the world first. And second, we have already too big a geographical platform to distribute – to store and distribute bitumen in North America thanks to Miller McAsphalt; and in Southeast Asia thanks to Tipco. We consider that's it's an opportunity for us to increase this activity of storage and distribution of bitumen. The idea is the creation of a third platform in Europe, started with a French facility.

So clearly for us, it's an opportunity to increase this good activity, because as you have seen with Tipco on one side or Miller McAsphalt, this activity has higher margin than the average Colas margin. So for us definitely, it's an opportunity to increase our margin in the future, again based on the two existing platforms first; and second, by the opportunity to create a third platform in Europe. Regarding working cap 2020, so clearly, as usual it's not always very easy in – on the construction side to monitor precisely the working cap requirements. Clearly, for 2019 we will not be able to reach our target, which was zero variation in working cap requirement. And we will be more in the range as I have said in around €400 million and mainly due to Bouygues Construction timing effects.

We will take some measures to improve that. And the idea is to have sufficient headroom on first the order activities on the regular Bouygues Construction activities to mitigate, obviously variation and variations by structure in Bouygues Construction, because one contract at the end of the year with big advance payment, obviously improve dramatically the working cap requirements one year, and not the year after or not the year before. So, clearly the idea is to create headroom from other activities in the Bouygues Group; and in the regular activities the bread and butter activity of Bouygues Construction to be able to mitigate this variation we have in – we have always in the building and civil work activity. It will be the way to securize the idea of the €1 billion free cash flow generation after working cap within the coming two years.

Alexandre Roncier: Very clear.

Thank you.

Operator: So we have another question from Frederic Boulan from Bank of America. Please go ahead.

Frederic Boulan: Hi. Thanks for taking the question.

So first of all, it was really a similar question on the free cash flow generation and the working cap. So I think last year was also €400 million negative working cap; a year before a bit more. So it's starting to look like a trend. It wasn't like that before. So, if you can extrapolate a bit more on what's driving this.

So you talk about timing of contract but shouldn't we have over the medium to long term a zero number? Or so we should have inflows over time. And specifically, on the big outflow this year is it something that – is it timing issue that is bound to unwind at one point? Or it's something that we shouldn't really expect in the medium term. And so – and a follow-up on the free cash flow point, so you mentioned on your starting comments that you got €1.4 billion of inflow from Alstom disposal and dividends. So if you can share with us at the light of your €1 billion target for next year, how the fact that you have those proceeds plus the fact that you expect a significant growth in free cash flow will drive your policy in terms of return? And then thirdly, if I may just to follow-up on a previous question on service revenue dynamics. So I understand there are some differences between ABPU and subs and service revenue and – but service revenue went from 8.5% last quarter to 6.6%.

And ABPU seems to be improving in fixed and improving in mobile. So, if you can explain a little bit what we could expect going forward, if there is some seasonality or one-off's or technicals in Q2 or Q3. Q2 was very strong. Maybe Q2 was an outlier – and what we can reasonably expect for the coming quarters? Thank you.

Philippe Marien: So, regarding your first set of questions.

Regarding our dividend policy, there is no change and the use of the proceeds coming from Alstom there is also no change compared to my present comments. So we will use the cash

by order: to develop our existing businesses; second, to monitor our net debt; and third, to see if there is possible and at which level a return to shareholders. The final decisions will be taken at the beginning of next year. So we will discuss that precisely in February 2020. Regarding -- but with no change on the near view.

If we are able to increase the dividend, obviously, we will do that. And you are right. If we have a target to increase our free cash flow after net working cap requirement, obviously, it will lead to increase the dividend distribution. Regarding the working cap, you are right, we have seen a deterioration in our working cap in the previous years, mainly -- and we commented that previously, mainly in the next -- in the last two years, because of very specific reason except the timing of projects in Bouygues Construction, mainly an increase in the inventories in Colas because of the Miller McAsphalt arrival first. And second, negative working cap in Bouygues Immobilier, because of our positioning on big development in neighborhood areas with the acquisition of a land before to launch a very long operation.

We consider that now we are entering into a more regular results, so with no more change on that, because now we will have this type of operation regularly. But there is no big change coming from the previous situation. So it is a reason why we continue to think that in the future we will -- more or less around zero in term of working cap variation, with a range of variation, because of pure timing effects in big contracts.

Christian Lecoq: So about Telecom service revenues in the mobile, I think, your question was in the mobile. So the main difference, as I said before, between revenue billed to the clients and mobile service revenue is, of course, incoming call and SMS revenue IFRS 16 and roaming revenues and MVNO revenues.

MVNO revenues, especially now, is at lower than the last year, because many of the pressures that the European commission put on the tariffs. On unit side, of course, we have less cost on this point. And MVDO -- about MVNO revenues, we -- the MVNO revenues is not recognized exactly on a linear basis. It's depending on negotiation we can have with our partners on this point. And so, we can have some good news some quarter and bad news some others.

And that's why you can see difference. You can -- it's very difficult to go from the EVDO and subscriber base directly to the service revenues.

Philippe Marien: Next?

Operator: Okay. So we have another question from Eric Lemarié from Bryan, Garnier. Go ahead.

Eric Bryan: Hi. Thanks. Two question, please. Firstly, what about this 3.2% margin on Bouygues building and civil works at the end of September? Is it better or worse than last year, when you had a strong margin, if I remember? And tell me if I am wrong, but it looks like the current operating profit of Bouygues building and civil works is down year-on-year at the end September. Could you confirm that? This is my first question.

And I got a second question on Bouygues Immobilier. Do you maintain your guidance of 100 basis point margin decline this year? Or do you feel it could be worse than 100 basis points? Thank you.

Philippe Marien: So regarding Bouygues Construction, the 3.2% is not far from our normative margin which is 3.5%. So we are in line with our general average margin in term of building and civil works. After that, you know perfectly that according to the timing of the various projects, we could have variations from 4% to 3%, depending on the various timing of the -- and the timing of the portfolio.

And you are perfectly right. At the end of September of 2018, we reached 4.2% in term of building and civil margin, which is absolutely not normative. And we never -- we have never said that this 4.2% will be forever. So now we are at 3.2%, which is again very close from our normative margin. Again, quarter by quarter, we can move from 3% to 4% in building and civil work, which is totally normal according to the nature of the portfolio of our various contracts.

So we are totally in line with our normative margin for building and civil work this year. Regarding your second, Bouygues Immobilier. So, for sure, now we are mid-November. And we are now, unfortunately, sure that we will not be able to reach our target mainly because we will not have all the commercial deals we anticipated previously. We wait for some significant projects before the end of the year, but not the full deal we anticipated.

The result of that will be clearly an improvements of the margin compared to end of September, but we'll not -- we are not in a position to reach the 6%. And we anticipate to be around 4% for the full year.

Eric Bryan: Thank you.

Operator: Okay. So we have another question from Jeremy Dellis from Jefferies.

Please go…

Philippe Marien: Just to complete my question -- my answer, nevertheless, we continue to maintain the idea that we will be able to increase the margin of the full construction activity in the Bouygues Group, because of the improvements of Bouygues Construction and Colas. So there is no change on the construction guidance overall, but for sure, we will be not at 6% for Bouygues Immobilier.

Jeremy Dellis: Okay. Good morning. It's Jerry Dellis here….

Philippe Marien: Sorry to interrupt.

Jeremy Dellis: Hi. Thanks for taking my questions. First question is related to the mobile activity. If we do drill through the mobile service revenue number into the services billed to customers, it looks like growth accelerated this quarter to about 4.5%.

I suppose, as we go into Q4, you start to lap against the improvement in the promotional environment that I think kicked in from Q4 of last year. Does that pose a risk to this revenue growth rate that you're delivering in on the mobile side? Second question has to do with fixed service revenues. And again, if we drill into the services actually billed to customers, it looks like service revenue growth on that sort of retail basis was up 11% in the third quarter. If we look back to the second half of last year, this same metric was growing only about 2%. So, I'd like to understand please, whether you think this acceleration in service revenue growth billed to customers is primarily a function of your higher fiber-to-the-home penetration.

Or is there also an element of you sort of raising your prices to narrow the price discount versus competitors? And then very finally please, could you just confirm again, what you regard as being the sort of normative operating margin for Colas please? Thank you.

Christian Lecoq: So, about your second question, about the fixed revenues, the increase in term of growth rate in the fixed revenue is mainly due to ABPU increase and this is coming from less promotion and higher tariffs. I think that we raised our tariffs by something like €2 in the FTTH a few months ago. Your first question was about mobile service revenues. And the trend now is very good.

Many users subscribers, they increase our credibility to maintain an -- our ABPU. We hope that we should continue to have good trends in term of revenues at Bouygues Telecom. I don't know, if it will be at the same pace as today because there's a weighting that's high but there's -- the trends should continue at a good level.

Philippe Marien: So, regarding Colas normative margin, for the road activity of Colas, we remain with the same ideal to be between 3.5% to 4% on normative level. And we will be able to reach that at the group -- Colas group level when we will have this level 3.5% margin in Colas Rail which is not the case now because the situation is breakeven situation coming from a very big loss in 2018, so breakeven this year and improvement in the coming years.

And again, at the time Colas Rail will be able to reach the 3.5%, so probably two, three years from now, we will have 3.5%, 4% for the whole Colas group as a normative level.

Jeremy Dellis: Great. Thank you.

Operator: So we have our first -- our next question sorry from Nicolas Cote-Colisson from HSBC. Please go ahead.

Mr. Nicolas Cote-Colisson, your line is open. Nicolas Cote-Colisson: Sorry. Yes just a follow-up question, a quick one on Colas in Canada. Revenue is down due to economic slowdown in Alberta.

I wonder, how we should be concerned about Canada given you recently increased dramatically your exposure on this country. And also, how much disruption do you get in Hong Kong from the events? Could there be delays in projects which could trigger extra costs? Thank you.

Philippe Marien: So, regarding Hong Kong. At this point, we have absolutely no impact on our activity. Obviously, we are closely monitoring the situation, but no delay in term of execution.

Except on the weekend, there is absolutely no trouble during the working days. You have seen that the Hong Kong authorities continue to award new contracts and big contracts. So, we don't anticipate big trouble for us, either in term of delay, in term of execution or in term of the pipeline of projects. Obviously, the situation is relatively uncomfortable. And we wait for a normalized situation in the coming months, but again, for the time being, no negative impact.

And it's not only a dream. It's what we are facing today. Regarding Canada, no. There's a -- in Canada, the situation is very difficult in Alberta for sure because of the oil price situation. The situation is not bad in Ontario which is the most important footprint for Miller McAsphalt, so no problem in Ontario.

And again, we have these difficulties in term of works in Canada, but for the bitumen activity, the situation remains very good because, the distribution of bitumen is not only from Canada to Canada, but also from Canada to America. So, as a whole, the situation is not so good as possible because of this drop in Alberta, but it's not a real negative impact for the whole Canadian activity and mainly for the bitumen activity. So, there is no negative impact coming from the -- our reinforcements in Canada and the acquisition of Miller McAsphalt. Nicolas Cote-Colisson: Thank you.

Operator: So, we have no further questions.

Philippe Marien: Okay. So, if there is no more questions, thank you very much for joining us today. We will be announcing full year 2019 sales and earnings on February 20, 2020. So have a good day. Thank you very much.

And if you have questions obviously, please contact our Investor Relations team. Have a good day. Thank you very much all of you. Bye.

Operator: Ladies and gentlemen, this concludes Bouygues' nine months 2019 results conference call.

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