A N N U A L R E P O R T - Bouygues

BOUYGUES 

2005 

A N N U A L R E P O R T

C O N C O R D A N C E 

Headings of Annex I, EU Regulation N ° . 809/2004 

Annual Report 

1. Persons responsible inside back cover 

2. Statutory auditors 125; 205 

3. Selected financial information 

3.1 Historical financial information 2; 8-12; inside front cover 

3.2 Interim financial information not applicable 

4. Risk factors 92-102 

5. Information about the issuer 

5.1 History and development of the issuer 142 

5.1.1 Legal and commercial name 142 

5.1.2 Place of registration and registration number 142 

5.1.3 Date of incorporation and lifetime 142 

5.1.4 Registered office, legal form, governing law, country of incorporation, address and telephone number 142; back cover 

5.1.5 Important events in the development of business 142 

5.2 Investments 

5.2.1 Principal investments completed 11; 152; 154; 204 

5.2.2 Principal investments in progress 157 

5.2.3 Principal planned investments 19; 25; 31; 37; 43 

6. Business overview 

6.1 Principal activities 14-46 

6.2 Principal markets 14-46 

6.3 Exceptional factors not applicable 

6.4 Situations of dependence 98-100 

6.5 Competitive position 14-46 

7. Organisational structure 

7.1 Brief description 5 

7.2 Significant subsidiaries 5; 207-208 

8. Property, plant and equipment 

8.1 Major tangible fixed assets 173; 192 

8.2 Environmental issues that may affect utilisation of tangible fixed assets 48-102 

9. Operating and financial review 

9.1 Financial condition 9-12 

9.2 Operating results 

9.2.1 Significant factors materially affecting income from operations 157-158 

9.2.2 Material changes in net sales or revenues 158 

9.3 Governmental, economic, fiscal, monetary or political policies or factors that have materially affected 

or could materially affect operations, directly or indirectly 

not applicable 

10. Capital resources 

10.1 Short and long term capital resources 180-183 

10.2 Sources and amounts of cash flows 154; 193-194; 204 

10.3 Borrowing requirements and funding structure 186-187; 192-193 

10.4 Restrictions on the use of capital resources that have materially affected or could materially 

affect operations, directly or indirectly 

not applicable 

10.5 Anticipated sources of funds to carry out planned investments 9 

11. Research and development, patents and licences 104-106 

12. Trend information 

12.1 Most significant trends affecting production since the end of the last financial year not applicable 

12.2 Trends likely to have a material effect on prospects 19; 25; 31; 37; 43 

13. Profit forecasts or estimates not applicable 

14. Administrative, management and supervisory bodies and senior management 

14.1 Administrative, management and supervisory bodies and senior management 108-121 

14.2 Conflicts of interest relating to administrative, management and supervisory bodies and senior management 118 

15. Remuneration and benefits 

15.1 Amount of remuneration and benefits in kind 126-128 

15.2 Total amounts set aside or accrued to provide pension, retirement or similar benefits 128 

16. Board practices 

16.1 Date of expiration of current terms of office 108-117 

16.2 Service contracts with members of administrative, management or supervisory bodies 118 

16.3 Information about the audit committee and remuneration committee 120; 123-124 

16.4 Compliance with the prevailing corporate governance regime 118 

17. Employees 

17.1 Number of employees 51; 59; 65; 73; 79; 91 

17.2 Shareholdings and stock options 108-117; 126-132; 137-138 

17.3 Arrangements for involving employees in the capital 137 

18. Major shareholders 

18.1 Shareholders owning over 5% of the share capital or voting rights 131-132 

18.2 Existence of different voting rights 132 

18.3 Direct or indirect ownership or control 131-132 

18.4 Known arrangements, the operation of which may result in a change of control not applicable 

19. Related party transactions 216 

20. Financial information concerning assets and liabilities, financial position and profits and losses 

20.1 Historical financial information inside front cover; 152-218; 225-226 

20.2 Pro forma financial information (IFRS 5) 158 

20.3 Financial statements 152-218 

20.4 Auditing of historical annual financial information inside front cover; 225-226 

20.5 Age of latest financial information 147-150 

20.6 Interim and other financial information not applicable 

20.7 Dividend policy 7; 11 

20.8 Legal and arbitration proceedings 100-101 

20.9 Significant change in financial or trading position not applicable 

21. Additional information 

21.1 Share capital 135-139 

21.2 Memorandum and articles of association 142-143 

22. Material contracts 44 

23. Third party information, expert statements and declarations of interest 236-238 

24. Documents on display 143-150 

25. Information on holdings 218 

Historical financial information for 2003 and 2004 

The following information is included by reference in this Annual Report: 

• changes in the financial situation and operating result between 2003 and 2004, presented on pages 8 to 12 of the 2004 Financial 

Review filed with the Autorité des Marchés Financiers on 12 April 2005 as no. D. 05-0407; 

• the consolidated financial statements for the year ending 31 December 2004, the notes to the financial statements and the auditors’ 

report relating thereto, presented on pages 94 to 122 and page 143 of the 2004 Financial Review filed with the Autorité des Marchés 

Financiers on 12 April 2005 as no. D. 05-0407; 

• the consolidated financial statements for the year ending 31 December 2003, the notes to the financial statements and the auditors’ 

report relating thereto, presented on pages 88 to 116 and page 132 of the 2003 Financial Review filed with the Autorité des Marchés 

Financiers on 31 March 2004 as no. D. 04-369. 

B

CONTENTS 

Chairman’s statement 2 

Management team 4 

Simplified group organisation chart 5 

Bouygues and its shareholders 6 

Key figures 9 

Business activities 

Bouygues Construction, full-service contractor 14 

Bouygues Immobilier, France’s leading property developer 20 

Colas, the world leader in roadworks 26 

TF1, number one television group in France 32 

Bouygues Telecom, mobile communication services 38 

Bouygues SA 44 

Recent events since 1 January 2006 46 

Sustainable development 

Sustainable development in the Group 48 

Bouygues Construction 52 

Bouygues Immobilier 60 

Colas 66 

TF1 74 

Bouygues Telecom 80 

Risks 92 

Innovation, research and development 

Innovation, research and development 104 

Legal and financial information 

Corporate governance 108 

Remuneration of corporate officers – Stock options 126 

Share ownership 131 

Stock market 133 

Capital 135 

Results of Bouygues SA 140 

Legal information 142 

Annual publications 144 

Financial statements 

Consolidated financial statements 152 

Parent company financial statements 209 

Annual general meeting of 27 April 2006 

Agenda 220 

Board of Directors’ reports 221 

Auditors’ reports 225 

Reconstitution of investment certificates 

and voting right certificates as shares 233 

Draft resolutions 239 

This document is a free translation of the Annual Report filed with the Autorité des Marchés 

Financiers (AMF) on 12 April 2006 pursuant to Article 212-13 of the AMF’s General Regulations. It may 

be used in support of a financial transaction if supplemented by a stock exchange prospectus. 

Cover photo: Challenger, main headquarters of Bouygues group until 1 July 2006. 

Photo credits: S. Arbour (p. 30), É. Avenel (p. 22-65), J-L Bellurget / Fondation Colas (p. 72), C. Berthet (p. 58), J. Bertrand (p. 29-70), G. Bosio/Yagan Productions/Ushuaïa Nature (p. 74), Buena Vista (p. 35), J. Cauvin (p. 34), CDL (p. 48), J-M Cédille (p. 41), Y. Chanoit 

(p. 14-18-19-36/ Bouygues Telecom-43-49-50-52-53-54-56), J-F Chapuis (p. 68), E. Chassaing (p. 61), C. Chevalin (p. 37-75-77), A. Chézière (p. 29-98), W. Choroszewski (p. 26), A. Da Silva (p. 17-22-40-41-43-48-80-85-88-102-106), J. David (p. 4-20-60), DDB Paris (p. 38-41), F. Deconinck 

(p. 38-84-89), C. Demonfaucon (p. 59), T. Deschamps (p. 90-100), F. Dunouau (p. 68-71), FCB/TPS (p. 36), FIA WTCC (p. 37), Free Lance’s (p. 29-31), Gautrain Rapid Rail Link (p. 19), B. Germain (p. 31), Getty Images/Red Line (p. 16), D. Giannelli (p. 26), J. Graf (p. 4-52-66-80), F-X Gros- 

Rosanvallon (p. 104), P. Guignard (cover; p. 18-56), J. Langevin (p. 106), P. Lefebvre (p. 99), P. Lesage (p. 4), D. Mac Allan (p. 46), É. Matheron Balaÿ (p. 40-83-87), B. Matussière (p. 57), G. Maucuit-Lecomte (p. 67), P. Maurein (p. 43-95), P. Muradian (p. 82), Paris Venise (p. 90), V. Paul 

(p. 49-58-63-64-69-101), M. Pelletier (p. 2), A. Picard (p. 42), Procitel (p. 20), F. Pugnet (p. 99), V. Rackelboom (p. 78), Rapp Collins (p. 40), M. Robinson (p. 93), J-C Roca (p. 34-76), P. Ruault (p. 104), Somaro (p. 70), Studio Mauve (p. 69), J-M Sureau (p. 32-74), É. Thibaud (p. 100), TPS 

(p. 78), TVO (p. 19), T-D Vidal (p. 72), Z. Waters (p. 30), L. Zylberman (p. 28-48-86-88-98-105). Photo libraries: Bouygues (p. 7), Bouygues Construction (p. 55-57), Bouygues Immobilier (p. 25-94), Colas (p. 30-73-102), TF1 (p. 35-36), Bouygues Telecom (p. 42-82-90-91-101). Architects: 

Arquitectonica/Arup Sustainable Design (p. 23), Atelier Lechuguette (p. 100), Baumann/Plobner (p. 25), Bernardo For Brescia/Bridot Willerwal (p. 22), BNT (p. 17), A. Derbesse (p. 25), Devillers/Brochet/Lajus/Puejo (p. 46), J. Dubus/G. Roustan (p. 62), Mário Sua Kay (p. 24), J-J Ory 

(p. 20), Partenaires et architectes/AGBF/Urban Concept (p. 60), K. Roche (cover, p. 44)/J-M Wilmotte (p. 44), RTLK/Valode & Pistre/Estudio Lamela/Allende Arquitectos/Estudio de Arquitectura Indya/Ana Ordás (p. 24), Solzic-Cléret (p. 22), Valode & Pistre (p. 16), Vincent Casinos 

Architectes (p. 83). i-mode TM and broadband i-mode TM are trademarks registered by NTT DoCoMo Inc. in Japan and other countries.

2005: an ex 

Bouygues had another excellent year in 2005, with all 

indicators showing substantial progress in relation to 

2004. Recurring net profit was up 19%, while the return 

on capital employed rose from 12.7% in 2004 to 16.5%. 

The long-term nature of Bouygues’ performance makes its 

achievement all the more significant. Sales have increased 

by 18% since 2001, operating profits have doubled and net 

profit has tripled. These figures show that we have made the 

right long-term choices. 

Bouygues Construction had a particularly bright year in 

terms of both the order book and profit. 

Bouygues Immobilier again improved its margins and reported 

remarkably vigorous sales on the housing market. 

Colas, the world’s leader in roadworks, once again had a 

record year, further consolidating its already strong positions 

on international markets. 

TF1 maintained its undisputed position as France’s 

top general-interest TV channel, borne out by audience 

2

CHAIRMAN'S STATEMENT 

cellent year 

figures. Despite tough conditions on the advertising market 

it returned a solid performance in terms of both profit and 

sales. Following the draft agreement on the future of TPS, TF1 

is refocusing on its core business as a content provider. 

Ten years after its commercial launch, Bouygues Telecom 

passed the milestone of eight million customers, including 

1.4 million for i-mode TM . Our strategic options for broadband 

have proved to be the most appropriate: first Edge, then 

second-generation UMTS (HSDPA). As a result, in 2005 we 

were able to offer a high-speed i-mode TM service combining 

nationwide coverage with high-quality service at prices that 

everyone can afford. 

Continuing its proactive policy of encouraging employee 

savings, Bouygues successfully carried out another capital 

increase reserved for employees. On completion of the 

operation, employees had become Bouygues’ second largest 

shareholder group with 13.3% of the capital and 17.5% of the 

voting rights. 

The ordinary dividend is up 20%. The Board will ask the 

AGM on 27 April 2006 to distribute a dividend of 0.90 euro 

per share. 

We have a strong corporate culture, which aims to satisfy 

customers and is based on respect for people and the environment. 

Taking the long-term view, it is expressed in entrepreneurial 

behaviour that is responsible in its commitments, 

creative in its proposals and prudent in its choices. That attitude 

has now been intensified, coordinated and given formal 

expression in our sustainable development policy. 

Bright prospects for 2006 mean that we can look forward to 

recruiting 14,000 new staff during the year, including 8,000 

in France. I should like to thank our shareholders for their 

confidence and all the Group’s employees for their work, their 

enthusiasm and their spirit. They are the real source of the 

Group’s present and future success. 

28 February 2006 

Martin Bouygues 

Chairman and CEO 

BOUYGUES 2005 

3

MANAGEMENT TEAM 

Bouygues 

parent company 

Olivier Poupart-Lafarge 

Deputy CEO 



Olivier Bouygues 

Deputy CEO 

Alain Pouyat 

Executive VP, 

Information Systems 

and New Technologies 

Jean-Claude Tostivin 

Senior VP, 

Human Resources 

and Administration 

Lionel Verdouck 

Senior VP, 

Cash Management 

and Finance 

Jean-François Guillemin 

Corporate Secretary 

Heads of the 

five business areas 

Yves Gabriel 

Chairman and CEO, 

Bouygues Construction 

François Bertière 


Bouygues Immobilier 

Alain Dupont 


Colas 

Patrick Le Lay 


TF1 

Philippe Montagner 


Bouygues Telecom 

4


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0cm 1 2 3 4 5 

SIMPLIFIED GROUP ORGANISATION CHART at 15 February 2006 

BOARD OF DIRECTORS 



CONSTRUCTION 

TELECOMS AND MEDIA 

Executive Directors 


Deputy CEO 


Deputy CEO and standing 

representative of SCDM, Director 

100% 100% 96.4% 42.9% 83%* 

CONSTRUCTION PROPERTY ROADS MEDIA TELECOMS 

Directors 

Pierre Barberis 

Deputy CEO, Oberthur 

Patricia Barbizet 

CEO and Director, Artémis 

Madame Francis Bouygues 

Georges Chodron de Courcel 

Deputy CEO, BNP Paribas 

Charles de Croisset 

Vice-Chairman, 

Goldman Sachs Europe 

Michel Derbesse 

Lucien Douroux 

Chairman and Director, Banque de 

Gestion Privée Indosuez 

Alain Dupont 

Chairman and CEO, Colas SA 

Yves Gabriel 



Patrick Le Lay 

Chairman and CEO, TF1 

Jean Peyrelevade 

Vice-Chairman, Quadrature 

François-Henri Pinault 

Chairman and CEO, PPR 

Alain Pouyat 

Executive Vice-President, Information 

Systems and New Technologies, 


Michel Rouger 

Former Presiding Judge 

of Paris Commercial Court 

100% Building 

100% Civil Works 

100% Electrical contracting (ETDE) 

Representatives of employee 

mutual funds 

Jean-Michel Gras 

Thierry Jourdaine 

Non-voting supervisor 

Philippe Montagner 

BOARD COMMITTEES 

Accounts committee 

Michel Rouger (Chairman) 


Georges Chodron de Courcel 

Charles de Croisset 

Selection committee 

Jean Peyrelevade (Chairman) 

100% LCI 

100% Eurosport 

66% TPS (held for sale) 

Remuneration committee 

Pierre Barberis (Chairman) 


Ethics and sponsorship committee 

Lucien Douroux (Chairman) 

Michel Derbesse 


* consolidated at 89.5% since June 2005 


BOUYGUES 2005 

5

BOUYGUES AND ITS SHAREHOLDERS 

More than 35 years after its first listing on the Paris 

Stock Exchange, Bouygues continues to be one of 

the leading stocks in the market, as demonstrated 

by its inclusion in the CAC 40 index. We have 

always involved our shareholders in our numerous 

value-creating initiatives, combining a responsible 

attitude with an entrepreneurial spirit. 

FFCI/CLIFF information meeting at Montpellier (June 2005) 

Communicating with our 

shareholders 

We are committed to ensuring that all 

our institutional and individual shareholders 

can always have easy access 

to full and transparent financial information. 

Financial releases 

• Our financial releases (including 

sales and earnings figures, and 

announcements of major financial 

transactions) are distributed widely 

and immediately in France and 

around the world, by different information 

networks via press agencies 

and the internet. In 2005, we published 

15 financial releases. 

• This information is also published in 

notices placed in leading French and 

international financial, economic 

and investment press. In 2005, 14 

newspapers and magazines published 

these notices. 

In the interests of transparency and 

equal access to information, our 

website www.bouygues.com provides 

shareholders with detailed, constantlyupdated 

material on Bouygues, including 

key performance indicators and 

information about our management, 

businesses and values. 

All press releases issued by the Group 

and its businesses are available on 

the site, along with all other documents 

of interest to shareholders 

such as annual reports, full financial 

statements for the last six years, 

and documents relating to the Annual 

General Meeting. All presentations 

made to equity and bond investors 

can be viewed on the site. Separate 

sections are devoted to specific issues 

including corporate governance, IFRS, 

Standard & Poor’s credit rating and 

sustainable development. 

The website includes a section specifically 

targeted at individual shareholders 

containing more accessible 

and user-friendly information and a 

frequently asked questions page. Live 

and recorded webcasts of major earnings 

presentations are also carried 

on the site. 

Shareholders can contact us directly 

via two dedicated e-mail addresses: 

investors@bouygues.com and service. 

titres.actionnaires@bouygues.com 

Publications 

We regularly send shareholders our 

most important publications: the 

abridged annual report, the Annual 

Report, and our in-house magazine 

Le Minorange. 

Results announcements 

• In line with our commitment to providing 

transparent financial information 

on a regular basis, we publish 

quarterly results. This policy enables 

our shareholders and the broader 

financial community to monitor the 

performance of the Bouygues Group 

and its component businesses all 

year round. 

• Detailed financial statements for 

the Group, the Bouygues SA parent 

company, and the Group’s five businesses 

are published twice a year. 

Meeting investors 

Our senior management arranges 

regular meetings with our shareholders 

and with the broader financial 

community, in order to establish and 

foster genuine dialogue. 

• Three major meetings are held 

each year. Two of these coincide 

6

with the announcement of our 

annual and first-half results, and 

the third is our Annual General 

Meeting, held at Challenger in 

Saint-Quentin-en-Yvelines near Paris. 

The publication of our quarterly 

results is accompanied by conference 

calls for institutional investors 

and financial analysts. 

• On 7 June 2005, we went on the road 

to meet our individual shareholders, 

at a meeting held in Montpellier with 

the support of the FFCI (the French 

Federation of Investment Clubs) 

and CLIFF (the French Association 

of Investor Relations Professionals). 

The next such meeting is scheduled 

for 9 October 2006 in Marseille. 

• Over 300 contacts a year between 

Bouygues and investors and analysts 

from France and abroad help 

maintain a constant dialogue. 

Outside France, our roadshows give 

major international investors the 

opportunity to meet Bouygues management 

and raise our worldwide 

profile. During 2005, we held twelve 

roadshows, meeting investors in 

the United Kingdom, the United 

States, Germany, Japan, Switzerland, 

Scandinavia, Italy, the Netherlands 

and Belgium, etc. 

• We also take part in sector conferences 

attended by major telecommunications 

companies, aimed at 

French and international institutional 

investors. 

2006 diary dates 

• 27 April 2006: 

Annual General Meeting 

• 3 May 2006: 

Dividend payment 

• 11 May 2006: 

2006 first-quarter sales 

• 8 June 2006: 

2006 first-quarter earnings 

• 10 August 2006: 

2006 first-half sales 

• 6 September 2006: 

2006 first-half earnings 

• 9 October 2006: 

FFCI/CLIFF shareholder 

information meeting, Marseille 

• 9 November 2006: 

2006 9-month sales 

• 7 December 2006: 

2006 9-month earnings 

• During 2005, coverage of our stock 

by financial analysts increased further. 

Currently, 18 brokers in France 

and abroad are actively following 

the company, compared with 15 

at end 2004. Of these, 10 had Buy 

recommendations on the share, 

against 8 at end 2004. 

Registered share service 

Since 1990, we have provided a free 

registered share service, which maintains 

accounts for holders of pure registered 

shares. Investors who choose 

to hold shares in this form receive 

regular information from Bouygues 

and have direct access to the company; 

they also enjoy double voting 

rights once their shares have been 

held in registered form for more than 

two years. Shareholders wishing to 

hold their shares as pure registered 

shares should send their request 

directly to their financial intermediary. 

Registered Share Account 

Department contact details: 

➤ Tel.: +33 (0)1 30 60 35 82 

+33 (0)1 30 60 32 64 

➤ Toll-free (from fixed lines in France): 

0805 120 007 

➤ e-mail: 

service.titres.actionnaires@bouygues.com 

Creating value 

(€ million, 

at 31 December) 

Market capitalisation, 

2002 to 2005 

9,060 9,224 

2002 2003 

11,314 

13,908 

2004 2005 

At end 2005, Bouygues had a market 

capitalisation of €13.9 billion, 

23% higher than at the end of 2004. 

Because the number of shares outstanding 

was virtually unchanged, this 

performance was due primarily to the 

increased share price. At 31 December 

2005, Bouygues ranked 24 th in the 

CAC 40 index by market capitalisation. 

Exceptional payout 

On 7 January 2005, Bouygues made an 

exceptional payout of €5 per share, as 

proposed by the Board of Directors in 

July 2004. The total amount paid out 

to shareholders was €1.7 billion, equivalent 

to 15% of the company’s market 

capitalisation at that time. This payout 

rewarded our shareholders after 

several years of heavy investment in 

growth businesses with rising profitability 

(Bouygues Telecom, Colas). 

Ordinary dividend 

Every year since 2003, we have 

increased the dividend paid out to our 

shareholders, with dividend growth 

close to the rate of growth in recurring 

net profits. In March 2006, the 

Board of Directors decided to ask the 

Annual General Meeting to approve 

a substantially higher dividend for 

2005; the proposed dividend of €0.90 

per share represents a 20% increase 

on the 2004 dividend of €0.75. This 

dividend reflects our commitment 

to increase ordinary dividends and 

0.26 

Net dividend per share, 

1999 to 2005 

0.9O* 

0.36 0.36 0.36 

shareholder returns over the long 

term. Excluding the exceptional payout, 

the dividend-to-earnings ratio for 

2005 is 36%. 

Share buybacks 

0.50 

0.75 

1999 2000 2001 2002 2003 2004 2005 

* to be proposed at the AGM on 27 April 2006 

Since 2002, Bouygues has had a policy 

of buying back its own shares on the 

market in order to optimise return 

on equity and compensate for the 

dilutive effect of newly-issued shares. 

During 2005, Bouygues cancelled 8.4 

million shares (2.5% of the share 

capital as at 31 December 2005) to 

reduce the dilutive effect of the new 

shares issued in connection with the 

Bouygues Confiance 3 employee share 

ownership plan launched at end 2005 

and on the exercise of stock options. 

BOUYGUES 2005 

7

BOUYGUES AND ITS SHAREHOLDERS 

ROCE 

(Return on Capital 

Employed) 

One way to measure the value created 

by a business is to compare the return 

generated by the capital employed 

in the business (equity contributed 

by the shareholders and debt provided 

by banks) with the cost of that 

capital. 

In 2005, the Bouygues Group achieved 

ROCE of 16.5%, significantly higher 

than 2004. The Group’s ROCE is clearly 

superior to the weighted average cost 

of capital. 

8.6% 

2003 

French GAAP 

12.7% 

2004 

IFRS 

16.5% 

2005 

ROCE = (current operating profit after tax + share of profits 

and losses of associates) ÷ average capital employed 

(shareholders’ equity + debt). 

Share ownership 

at 15 February 2006 

• Since the end of 2004, there have 

been four main changes in the share 

ownership structure of Bouygues 

SA. SCDM, a company controlled by 

Martin and Olivier Bouygues, raised 

its interest by 1.5 percentage points. 

The Artemis group (F. Pinault) 

reduced its interest slightly by 0.5 

of a point. Following the capital 

increase made in connection with 

the Bouygues Confiance 3 employee 

share ownership plan, the employees 

own 13.3% of the capital, compared 

with 11.5% at end 2004. Finally, 

the percentage interest held by 

non-French shareholders increased 

significantly, reflecting the higher 

profile of Bouygues among international 

investors. 

Foreign 

shareholders 

35.5% 

Other 

French 

shareholders 

25.4% 

Share ownership 


SCDM* 

18.5% Groupe 

Artémis 

(F. Pinault)* 

7.3% 

Employees 

13.3% 

Number of shares: 337,150,519 

* SCDM is a company controlled by Olivier and Martin 

Bouygues. SCDM and the Artémis group are bound by 

a shareholder agreement. 

Foreign 

shareholders 

28.3% 

Other 

French 

shareholders 

22% 

Voting rights 


SCDM* 

25.6% 

Employees 

17.5% 

Groupe 

Artémis 

(F. Pinault)* 

6.6% 

Number of voting rights: 423,787,714 

* SCDM is a company controlled by Olivier and Martin 

Bouygues. SCDM and the Artémis group are bound by 

a shareholder agreement. 

• The difference between percentage 

ownership and voting rights is due 

to the fact that all investors who 

hold their shares in registered form 

for more than two years are given 

double voting rights. 

Share price performance in 2005 

Bouygues Bouygues + €5 reinvested CAC 

Share price since the 

beginning of 2005 

During 2005, the Bouygues share price 

showed a nominal increase of 21%, 

in line with the CAC 40 (up 23%). 

However, on 7 January 2005 the 

exceptional payout of €5 per share 

led to an automatic correction of €5 

in the share price as the share went 

ex-coupon. Since then, the share price 

has done far more than simply reverse 

this correction, rising to €44.8 on 

16 February 2006. The adjusted share 

price (with reinvestment of the exceptional 

payout) is the true indicator 

of the market performance enjoyed 

by our shareholders. On this basis, 

Bouygues shares rose by 42% in 

2005, the 9 th best performance in the 

CAC 40. 

54 

52 

50 

48 

46 

44 

42 

40 

38 

36 €34 

34 

32 

30 

28 

Dec. Jan. Feb. Mar. April May June Jul. Aug. Sept. Oct. Nov. Dec. Jan. 


€52.3 

+54% 

€44.8 

+32% 

+30% 

Bouygues share factsheet 

• Listing: Eurolist of Euronext 

(compartment A) 

• ISIN code: 

FR0000120503 

• Identification codes: 

Bloomberg: ENFP, 

Reuters: BOUY.PA 

• Par value: €1 

• Indices: 

CAC 40, Euronext 100, FTSE 

Eurofirst 80 and Dow Jones 

Stoxx 600 

• Sector classification: 

- MSCI/S&P indices: 

Telecommunication services 

- FTSE and Dow Jones indices: 

Construction & Materials 

• Eligible for deferred settlement 

service (“SRD”) and French 

equity savings plans (“PEAs”) 

Contact 

Anthony Mellor 

Investor Relations Director 

Tel. +33 (0)1 30 60 22 77 

Fax: +33 (0)1 30 60 31 40 

Address: Challenger 

1 avenue Eugène Freyssinet 

78061 St-Quentin-en-Yvelines cedex 

France 

e-mail: investors@bouygues.com 

8

KEY FIGURES 

FINANCIAL HIGHLIGHTS 

(€ million) – IFRS 2004 2005 2005/2004 

Sales 

of which international 

20,894 

5,989 

24,073 

7,127 

+15% 

+19% 

EBITDA (1) 2,943 3,505 +19% 

Current operating profit 1,557 1,852 +19% 

Operating profit 1,557 1,748 +12% 

Net profit attributable to the Group 909 832 - 8% 

Recurring net profit (2) 700 832 +19% 

Return on capital employed (ROCE) 12.7% 16.5% +3.8 pts 

Cash flow 2,714 3,090 +14% 

Free cash flow (3) 1,007 1,104 +10% 

Shareholders’ equity (period-end) 4,978 5,561 +12% 

Net debt (period-end) 1,875 2,352 +25% 

Gearing (period-end) 50% 42% -8 pts 

Market capitalisation (period-end) 11,314 13,908 +23% 

Net dividend 0.75 0.90 (4) +20% 

Number of employees 113,334 115,441 +2% 

As TPS was held for sale at end December 2005, only its share of net profit was booked in 2004 and 2005. 

(1) current operating profit plus net depreciation and amortisation expense and net increases in provisions 

(2) recurring net income before exceptional transactions (e.g. gain on sale of Saur in 2004) 

(3) cash flow minus cost of net debt minus tax and minus net capital expenditure 

(4) to be proposed to the Annual General Meeting of 27 April 2006 

2005 was another excellent year for the 

Bouygues group both in terms of sales and profit. 

Its construction businesses performed strongly and 

recorded a sharp increase in orders booked. 

Steep rise in profitability 

Full-year 2005 sales amounted to €24.1 billion, up 

15% on 2004. Current operating profit climbed 19%. 

Recurring net profit stood at €832 million, 19% 

higher than 2004. Return on capital employed was 

16.5%, compared with 12.7% in 2004. 

A solid financial structure 

Net debt amounted to €2,352 million at 31 December 

2005, giving a debt-to-equity ratio of 42%. 

Standard & Poor’s maintained its credit rating for 

Bouygues: A- with stable outlook. 

Cash flow rose by 14% to €3,090 million and free 

cash flow by 10% to €1,104 million. 

SALES: €24.1 billion (up 15%) 

20,894* 

of which international 

24,073* 

5,989 7,127 

2004 2005 

* excluding TPS, 

held for sale 

at end 2005 

4,525 

2,489 

263 

9,424 

5,815 

1,557 

Contribution to the Bouygues Group 

Bouygues group. Consolidated sales for 2005 were 

15% up on the previous year. This figure factors in 

mobile-to-mobile billing between GSM operators, 

effective from 1 January 2005. For comparability, 

2004 sales have been increased to reflect mobile-tomobile 

billing as adjusted to 2004 call termination 

rates. On this basis, sales were 11% higher. 

Bouygues Construction. Sales rose by 13% in 

France and by 9% on international markets, with 

continued strong growth in the electrical contracting 

and maintenance business (ETDE), which hit the 

€1 billion euro mark. 

Bouygues Immobilier. The 20% increase in sales 

was due to the start of building work on a large 

number of housing units reserved in 2004 and the 

dynamic corporate and commercial property sector 

in Spain and Portugal. 

Colas. Sales showed robust growth (19%), especially 

outside France and more particularly in Central 

Europe. Like-for-like and at constant exchange rates, 

sales rose by 11% overall, including 7% in France and 

16% on international markets. 

(€ million – IFRS) 

■ Bouygues Construction 

■ Bouygues Immobilier 

■ Colas 

■ TF1 

■ Bouygues Telecom 

■ Holding and other 

TF1. Sales were stable. The channel’s net advertising 

revenues were virtually unchanged from 2004, 

resulting from a rise of 3% in the fourth quarter, 

while full-year sales from other activities grew by 

0.6%. 

Bouygues Telecom. In 2005, the mobile telephony 

business posted net sales from network of €4,240 

million, up 27% due primarily to mobile-to-mobile 

billing, effective from 1 January 2005. Had the system 

been in place in 2004 (billing estimated using 

the 2004 call termination rate), the increase in net 

sales from network would have been 4%. 

Holding and other. Saur activities retained by 

Bouygues represented sales of €245 million at end- 

2005, down slightly on the same period in 2004. 

BOUYGUES 2005 

9

KEY FIGURES 

OPERATING PROFIT: 

€1,748 million (up 12%) 


1,557 

1,748 

NET PROFIT ATTRIBUTABLE 

TO THE GROUP: 

€832 million (down 8%) 


909* 

832 

RECURRING NET PROFIT: 

€832 million (up 19%) 

700* 

832 

RECURRING EARNINGS 

PER SHARE: 

€2.51 (up 20%) 

Non-recurring items 

Recurring items 

 

 

 

 

598 

2004 2005 

14 

353 

238 

156 

389 




■ Colas 

■ TF1 



301 

101 

2004 2005 

* including €209m capital 

gain from Saur 

176 

296 

Net loss from holding and other: -€132m 




■ Colas 

90 

■ TF1 


2004 2005 

* excluding capital gain from Saur 

Net profit attributable to the Group in 2005 does not 

include non-recurring items. It is 8% lower than the 

figure for 2004, which factored in the €209 million 

gain on the disposal of Saur. Excluding this capital 

gain, net profit rose by 19%. 

The contribution of all business areas to Group net 

profit grew. 

 

 

 

 

 

 

 

 

 

Over the last four years, recurring earnings per 

share has increased 3.3 times. 

Earnings per share for 2005 was €2.51. Based on 

recurring net earnings (excluding the gain on Saur 

in 2004), this represents a year-on-year increase 

of 20%. 

At 31 December 2005, a total of 336,762,896 million 

shares and investment certificates were in 

issue, slightly more than at 31 December 2004 

(332,758,624). 

Operating profit advanced broadly in line with sales 

during 2005. 

The Construction businesses achieved a further 

improvement in operating margin in 2005. 

10

NET DIVIDEND PER SHARE: 

€0.90 (up 20%) 

0.26 

0.36 0.36 0.36 

Once again, Bouygues increased the dividend payout 

to its shareholders in 2005. Based on the good 

results achieved by the Group during the year and 

a fine outlook, Bouygues is able to propose a further 

substantial increase in the dividend, which if 

approved will mean that dividends will have virtually 

doubled in two years. 

The Board of Directors is asking the Annual General 

Meeting of 27 April 2006 to approve a dividend of 

€0.90 per share, representing an increase of 20%, 

in line with the growth in recurring net profit. This 

dividend will be paid on 3 May 2006. 

The exceptional payout of €5 per share announced 

in July 2004 was made on 7 January 2005, representing 

a total of €1.7 billion, equivalent to 15% of 

the market capitalisation at that time. This payout 

enabled our shareholders to share the excellent 

results achieved following the investments made by 

the Group since 1999. 

0.5 

0.75 

0.90* 

1999 2000 2001 2002 2003 2004 2005 

* to be proposed at the AGM on 27 April 2006 

CASH FLOW: 

€3,090 million (up 14%) 

1,261 

2,714 


23 

453 

3,090 

2004 2005 

411 

161 

781 




■ Colas 

■ TF1 



Virtually all our businesses recorded a further 

increase in cash flow during 2005, reflecting their 

strong positions in buoyant markets. 

Overall, cash flow rose by 14%, giving Bouygues substantial 

capacity to fund future development. 

NET OPERATING INVESTMENT: 

€1,229 million (up 17%) 

€ million – IFRS 2004 2005 

Bouygues Construction 73 56 

Bouygues Immobilier 4 4 

Colas 348 411 

TF1 79 155 

Bouygues Telecom 502 584 

Bouygues SA and other 41 19 

TOTAL 1,047 1,229 

FREE CASH FLOW: €1,104 million (up 10%) 


1,007 

1,104 

2004 2005 

431 

Free cash flow represents the ability of the Group 

to generate surplus cash after financing the cost of 

debt, income taxes, and net capital expenditure. 

Bouygues generated cash flow of €3,090m in 2005. 

170 

239 

273 

Free cash flow at holding and other: -€114m. 

105 




■ Colas 

■ TF1 


After deducting the cost of net debt (€187m), 

income tax expense for the year (€570m) and net 

capital expenditure (€1,229m), free cash flow was 

€1,104m. 

BOUYGUES 2005 

11

KEY FIGURES 

NET DEBT: 

€2,352 million (up 25%) 

ROCE (Return on Capital Employed) (1) : 

2006 SALES TARGET 

€25,300 million (up 5%) 

(€ million – IFRS) 2003 

French GAAP 

2004 

IFRS 

2005 

IFRS 


1,875 

2,352 

2004 2005 

At the start of 2005, Bouygues recorded a cash outflow 

of €1.7bn due to the exceptional payout, and a 

cash inflow of €1bn due to the sale of Saur. 

Bouygues' financial position remained healthy at 

end 2005, with net debt standing at €2.4bn, or 

42% of equity. This debt figure includes a liability 

of €460m relating to the reciprocal call and put 

options exchanged with BNP Paribas relating to its 

6.5% interest in Bouygues Telecom, and excludes 

debt carried by TPS which is held for sale. 

Bouygues Telecom and TF1 reported net debt of 

€441m and €351m respectively. The other businesses 

reported cash surpluses: €1,874m for Bouygues 

Construction, €415m for Colas, and €150m for 

Bouygues Immobilier. Debt carried by Bouygues SA 

and other activities amounted to €3,999m. 

In view of this robust financial position, with an 

evenly spread debt maturity profile and excellent 

liquidity, Standard & Poor’s has maintained 

Bouygues’ A- rating with stable outlook. 

Group level 

Bouygues Group 8.6% 12.7% 16.5% 

Business level 

Bouygues Construction +++ (2) +++ (2) +++ (2) 

Bouygues Immobilier +++ (3) +++ (3) +++ (3) 

Colas 22.8% 26.8% 34.6% 

TF1 16.0% 17.9% 15.5% 

Bouygues Telecom 8.5% 12.3% 15.4% 

(1) current operating profit after tax and share of profits/losses of associates divided by average capital employed (equity + debt) 

(2) ROCE is not meaningful for Bouygues Construction because its activities generate high levels of surplus cash. One of the key strengths of 

this business is its ability to grow without tying up capital. 

(3) Bouygues Immobilier has a very high cash surplus, because Bouygues Immobilier has for some years been generating exceptionally high 

cash flows because of favourable economic conditions. 

The Bouygues Group achieved a substantial improvement in ROCE during 2005, from 12.7% to 16.5%. In the two 

years since 2003, ROCE has virtually doubled. 

The current level of ROCE is significantly higher than the weighted average cost of capital. 

2,600 

4,560 

10,050 

240 

6,100 

1,750 




■ Colas 

■ TF1 



In 2006, Group sales are expected to hit €25.3 

billion, up 5% on 2005 (6% in France and 4% on 

international markets). 

Construction businesses should continue to thrive 

and are likely to show a rise of 5% at Bouygues 

Construction, 12% at Bouygues Immobilier and 7% 

at Colas. 

Sales should grow by 4% at TF1 and by a modest 1% 

at Bouygues Telecom due to a reduction in incoming 

rates. 

12

Business 

activities 



Colas 26 

TF1 32 


Bouygues SA 44 

Recent events 

since 1 January 2006 46

FULL-SERVICE CONTR 

Bouygues Construction is one of the world’s leading 

construction companies, offering customers 

comprehensive building, civil works and electrical 

contracting skills and services ranging from 

project design to maintenance. It combines the 

strength of a large group with the responsiveness 

of a network of smaller contracting businesses. 

Highlights 

New concessions 

• A41 motorway (€500m). 

• Cyprus airports (€500m). 

• Gautrain, the Pretoria-Johannesburg 

rail link in South Africa (€500m). 

Major new contracts 

• T1 tower at La Défense, in France (€97m). 

• Renault logistics platform at Sens in France 

(€77m). 

• Olkiluoto EPR nuclear power station in Finland 

(€170m). 

• Hotel and office complex in Trinidad & Tobago 

(€165m). 

Projects under construction 

• Lok Ma Chau tunnel in Hong Kong (€290m). 

• Port of Tangier in Morocco (€170m). 

Projects delivered 

• A28 motorway in France (€658m). 

• Hong Kong Exhibition Centre (€245m). 

• UK Home Office (€325m). 

Sales 2005 

€6,131m 

(+11%) 

Operating profit 

€238m 

(+42%) 

Net profit (Group share) 

€175m 

(+25%) 

Employees 

38,500 

Sales target 2006 

€6,450m 

(+5%) 

The port of Tangier in Morocco 

Excellent commercial 

and financial 

performance 

Record level of orders booked: 

€6,510 million 

In favourable economic conditions, 

Bouygues Construction achieved 

some notable commercial successes 

in 2005. Orders booked in France 

amounted to €3,958 million, €933 million 

more than in 2004, while orders 

on international markets increased by 

€459 million to €2,552 million. 

Orders overtook sales in 2005, a performance 

all the more remarkable in 

that it does not include three major 

contracts won in 2005 but awaiting 

finalisation at year-end: the A41 motorway 

(€500m), the Cyprus airports 

(€500m) and the Gautrain rail link 

between Pretoria and Johannesburg 

in South Africa (€500m). 

Rising sales: €6,131 million 

With an 11% increase in sales, Bouygues 

Construction turned in an excellent 

performance boosted by delivery of 

the A28 motorway in France, the Home 

Office headquarters in the UK and 

AsiaWorld Expo in Hong Kong. 

On a buoyant French 

market, sales rose by 

13% to €3,653 million. 

Sales outside France rose by 9% to 

€2,478 million. 

Strong growth at ETDE was a contributing 

factor to a robust sales performance: 

for the first time in its history, 

ETDE’s sales broke the billion euro 

barrier. A policy of external growth 

since 2001 and a dynamic sales force 

have enabled ETDE to double its sales 

in three years. 

IFRS 

14

ACTOR 

> Excellent commercial and financial performance in 2005 

A sharp increase in net profit: 

€175 million (+25%) 

Higher earnings are due in particular 

to the Vision & Performance project, 

which has brought major changes to 

Bouygues Construction’s organisation 

and operating methods since 2003. 

The net margin rose from 2.5% in 

2004 to 2.9% in 2005. The net profit 

figure in 2004 included non-recurring 

income of €37 million. 

A record cash surplus 

The net cash surplus reached a record 

€1,874 million, €351 million more than 

in 2004. 

Cash flow rose by 41% to €410 million, 

reflecting the improvement in the 

company’s margins. 

Bouygues Construction pursued an 

active development policy in 2005, 

with a net capital outlay (cash flow) of 

€148 million. 

Bouygues Construction’s available 

cash is a major asset in controlling 

construction risks, giving the group 

the capacity to pursue its development 

policy. 

Priorities for growth 

in high value-added 

activities 

Bouygues Construction has continued 

to pursue its development strategy, 

focusing on four priorities for growth. 

Sales 

€bn 

5.5 

2004 2005 2006 (o.) 

(o.) : objective 

Sales by business segment 

€m 

B/CW 

International 

2,323 

Order book 

€bn 

of which France and Europe 

5.0 

6.1 

Electrical contracting 

and maintenance 

951 

4.6 

3.6 3.4 

6.45 

5.2 

4.0 

2003 2004 2005 

B/CW 

France 

2,857 


€m 

140 

175 

2004 2005 

Net cash 

€m 

1,346* 

2003 2004 2005 

* French GAAP 

1,523 

1,874 

Order book 

by geographical area 

Americas 

Africa and other 

5% 

5% 

Asia 

14% 

Europe (excl. France) 

20% 

France 

56% 

IFRS 

CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 

ASSETS (€m - IFRS) 2004 2005 

• Tangible and intangible fixed assets 296 265 

• Goodwill 145 175 

• Non-current financial assets 170 218 

NON-CURRENT ASSETS 611 658 

• Current assets 1,972 2,255 

• Cash and equivalents 1,773 2,074 

• Financial instruments (debt-related) - - 

CURRENT ASSETS 3,745 4,329 

TOTAL ASSETS 4,356 4,987 

LIABILITIES (€m - IFRS) 

• Shareholders’ equity attributable to the Group 302 414 

• Minority interests 3 4 

SHAREHOLDERS’ EQUITY 305 418 

• Long-term debt 134 122 

• Non-current provisions 437 519 

• Other non-current liabilities 1 1 

NON-CURRENT LIABILITIES 572 642 

• Debt (amount due within one year) 24 4 

• Current liabilities 3,363 3,849 

• Short-term bank borrowings and overdrafts 92 74 


CURRENT LIABILITIES 3,479 3,927 

TOTAL LIABILITIES 4,356 4,987 

NET DEBT (1,523) (1,874) 

CONSOLIDATED INCOME STATEMENT 

(€m - IFRS) 2004 2005 

SALES 5,512 6,131 

CURRENT OPERATING PROFIT 168 249 

• Other operating income and expenses - (11) 

OPERATING PROFIT 168 238 

• Income from net debt 26 32 

• Other financial income and expenses 2 1 

• Income tax expense (59) (114) 

• Share of profits and losses of associates 3 19 

NET PROFIT BEFORE DISCONTINUED 

OR HELD-FOR-SALE OPERATIONS 140 176 

• Net profit of discontinued or held-for-sale operations - - 

TOTAL NET PROFIT 140 176 

• Minority interests - 1 

CONSOLIDATED NET PROFIT ATTRIBUTABLE TO THE GROUP 140 175 

BUSINESS ACTIVITIES 

15

T1 tower, Paris La Défense 

teaching hospital in Caen, a logistics 

hub for a hospital in Douai and a 

street lighting maintenance contract 

at Auvers-sur-Oise. The group has created 

Challenger Investissements so as 

to provide local authorities and public 

institutions with fast-track, competitive 

PPP solutions for medium-sized 

investments. 

Electrical contracting and 

maintenance 

Growth in the electrical contracting 

and maintenance sector helps 

Bouygues Construction to consolidate 

its activities with complementary life 

cycles and to boost profitability. ETDE 

is pursuing two main objectives: to 

complete nationwide coverage and 

to acquire new technical skills. ETDE 

achieved organic growth of 14% in 

2005, while acquisitions brought in 

additional sales of €173 million. 

Public-private partnerships 

Bouygues Construction aims to stake 

out a significant position on the buoyant 

market for public-private partnerships 

(PPP) in France, meeting needs 

for infrastructure such as hospitals, 

prisons, schools and street lighting. 

It has already won its first PPP contracts, 

including the construction and 

maintenance for 25 years of a Women, 

Children and Haematology unit at the 

As well as taking an interest in 

social housing projects in the United 

Kingdom, Bouygues Construction won 

its first street lighting contract under 

a PFI and expects to finalise a number 

of other projects in 2006, including 

Broomfield Hospital, worth £220m, 

and a school in Lewisham, worth 

£70m. Having delivered AsiaWorld 

Expo, Bouygues Construction is now 

beginning to operate the 130,000 m 2 

international exhibition centre in 

Hong Kong. 

Property development 

This high value-added line of business 

involves providing customers with 

turnkey projects on the best possible 

terms, whether legal, financial 

or administrative. It accounts for a 

growing share of the group’s business. 

Quille and DV Construction have 

won a contract to build a logistics 

platform for Renault at Sens. Losinger 

has concluded a number of contracts 

in Switzerland, including the 

One Roof project involving construction 

of 30,000 m 2 of office space. 

Bouygues Bâtiment International has 

also strengthened its positions in the 

segment. 

The creation of AdValys, an asset management 

firm, will enable the group to 

offer property investors opportunities 

to invest in all types of property asset 

in France and Europe. AdValys will also 

track and manage the assets until 

disposal of the investment. 

Transport infrastructure 

concessions 

Bouygues Construction aims to get 

involved as far upstream as possible 

in order to create projects that 

combine financing, construction, 

operation and maintenance. It won 

three major concession contracts in 

2005: the A41 motorway in France, 

the Cyprus airports and the Gautrain 

project in South Africa. 

The three projects will be finalised and 

work will start in 2006. 

Bouygues Construction’s Concessions 

division had an excellent year in 2005, 

boosted by the opening of the A28 

motorway at the end of the year. 

Building and Civil Works 

Sales at the Building and Civil Works 

division rose by 7% to €5,144 million 

in 2005. France accounted for 

€2,857 million, 56% of the total, and 

international markets for €2,287 million 

(44%). 

France 

The construction market in France 

held firm in 2005. 410,000 new housing 

starts were recorded, a 25-year 

high, and the market for industrial 

16

uildings and offices was stable, with 

authorisations on the rise. Demand for 

public buildings remained steady. 

The French construction industry has 

two distinctive features: a dense network 

of regional players with solid 

positions on local markets and three 

majors, Bouygues, Vinci and Eiffage. 

The market leader in the Paris region, 

Bouygues Construction is also one 

of the top four construction firms in 

each of the five main French regions. 

Bouygues Bâtiment Île-de-France had 

an excellent year, recording a 7% rise 

in sales to €1,166 million and delivering 

several prestige projects. 

The €64m Actualis development 

comprises 16,000 m 2 of office space, 

5,000 m 2 of retail space, apartments 

and a car park. 96 boulevard 

Haussmann, a €54m, 23,000 m 2 development 

owned by Calyon, will house 

a business centre, apartments, shops 

and a day nursery for the City of Paris. 

The new €49m museum at quai Branly, 

devoted to the arts and civilisations of 

Africa, Asia, Oceania and the Americas, 

comprises four buildings with a total 

surface area of 57,000 m 2 . Bouygues 

Bâtiment Île-de-France won two other 

major projects in 2005: the €68m 

Porte des Poissonniers development 

for the City of Paris, and the €97m 

T1 tower, a 38-floor, 70,000 m 2 office 

block in Courbevoie. 

The regional subsidiaries of Bouygues 

Entreprises France-Europe operate 

on both building and civil engineering 

markets. They reported a strong 

13% rise in sales to €1,291 million, 

mostly attributable to the growing 

proportion of large-scale projects 

and property development contracts. 

The A28 motorway (€670m), built 

by Bouygues Travaux Publics, DTP 

Terrassement and Quille, was delivered 

five weeks ahead of schedule. 

Bouygues Entreprises France-Europe 

won contracts to renovate and build 

hospitals at Caen, Douai and Vesoul 

and a €77m contract to build a logistics 

platform for Renault at Sens. The 

project involves the construction of 

four buildings with a surface area of 

156,000 m 2 extendable to 200,000 m 2 

for the storage and shipment of spare 

parts and accessories. 

Bouygues Travaux Publics reported 

sales of €277 million in France in 

2005, the same level as in 2004. The 

Actualis, Paris 

year’s main projects were completion 

of the A28 motorway and a 

€46m contract to renovate the 7 km 

Maurice Lemaire tunnel in the Vosges 

(eastern France). Bouygues Travaux 

Publics won a €500m concession for 

the A41 motorway in partnership with 

GFC Construction, DTP Terrassement, 

Losinger Construction, Colas, SETEC, 

Caisse d’Epargne et de Prévoyance 

des Alpes and Area. The 19 km motorway 

through the mountains will link 

Geneva and Annecy. Bouygues Travaux 

Publics is continuing to increase the 

proportion of international business 

in its sales mix. 

DTP Terrassement reported sales 

of €109 million in France in 2005, 

compared with €140 million in 2004. 

The fall is mainly due to the end 

of major work on the A28 motorway. 

However, with earthworks for 

the Grands Goulets tunnel starting 

in 2005 and for the A41 motorway in 

2006, the medium-term outlook for 

DTP Terrassement is secure. 

International 

Internationally, Bouygues Construction 

operates through local subsidiaries or 

consortia formed for specific projects. 

According to the annual survey conducted 

by the magazine Engineering 

News Record in December 2005, the 

top 225 international construction 

firms generated sales of €123 billion 

The A41 motorway will link Geneva and Annecy 

(USD 168 million) outside their home 

markets in 2004, an increase of 20% 

in dollar terms (stable in euro terms) 

in relation to 2003. 

Competition is fierce on international 

markets in general and on 

the European market in particular, 

characterised by concentration 

among European groups, the return 

of American firms since 2003 and 

the rise of players from emerging 

countries. 

In Western Europe, Bouygues UK is 

continuing to expand in Britain, specialising 

in PFI projects involving the 

design, financing, construction and 

management of infrastructure delegated 

by the government to the private 

sector, especially hospitals and 

schools. Deliveries in 2005 included 

the €325m Home Office building and 

the €68m Barking Schools project, a 

second reference in the education sector 

after the King’s College project for 

London University delivered in 1999. 

The €110m Central Middlesex Hospital 

was under construction, another 

success that confirms Bouygues 

Construction’s position as a prime PFI 

player in the UK hospital sector. 

Losinger, a subsidiary of Bouygues 

Entreprises France-Europe, reported 

sales of €291 million in 2005 and 

can look forward to further growth 

following the conclusion of several 

substantial contracts, including the 

construction of two sorting centres 

for the Swiss post office worth €90 

million. 

Bouygues Bâtiment International has 

won a 25-year concession for the 

Cyprus airports (€500m of works), 

the group’s first airport concession. 

Bouygues Travaux Publics also won 

a €170m contract from Areva and 

Siemens to build the Olkiluoto nuclear 

power station, its first major project 

in Finland. The company’s nuclear civil 

engineering expertise gave it the edge 

over its international rivals. 


17

A28 motorway, France 

In Eastern Europe, a number of major 

projects were delivered in 2005, including 

phase 2 of the M5 motorway in 

Hungary. Growth will continue following 

the conclusion of major contracts 

in Russia, such as a €70m design-build 

contract for the Tax Ministry. Russia is 

becoming a significant growth area 

for the group. 

In Macau, Bouygues Bâtiment 

International and VSL have won a 

€63m contract to build the superstructure 

of the podium that will 

accommodate the future Venetian 

Cotai casino and a 250,000 m 2 shopping 

mall. 

In South Korea, Bouygues Travaux 

Publics is continuing work on the 

Masan Bay bridge, a €250m project 

of which Bouygues Travaux Publics 

has a €180m share. A joint venture 

with Hyundai Engineering Corp., the 

project involves the design, financing, 

construction, operation and maintenance 

of the Masan Bay bridge under 

a 30-year concession. The 1,700 metre 

bridge is the second-longest in South 

Korea. 

In Thailand, Bouygues Bâtiment 

International has taken orders for several 

hotels and residential buildings, 

including the €34m Athénée tower. It 

is also involved in major projects in 

Turkmenistan. 

VSL won the biggest contract in its 

history for the construction of 45 km 

of elevated viaducts for the Dubai 

Metro. VSL’s share of the contract, 

concluded with two partners, is worth 

€33 million. 

In South Africa, Bouygues Travaux 

Publics won the €500m contract to 

build the Gautrain rail link between 

Johannesburg and Pretoria as part 

of a consortium including RATP, 

the Paris metro operator. A PPP 

contract, it involves the financing, 

design, construction, operation and 

maintenance of an 80 km line linking 

Johannesburg, Pretoria and 

Johannesburg International Airport. 

Bouygues TP reduced its stake in its 

South African subsidiary Basil Read 

from 71% to 19% at the end of 2005. 

In the Americas/Caribbean zone, 

Bouygues Construction has achieved 

some notable commercial successes. 

An example of PFI: 

the Home Office building in London 

Bouygues Construction also won 

motorway infrastructure concessions 

and PPP contracts, including a €56m 

contract for phase 3 of the M5 motorway 

in Hungary and a €58m contract 

for phase 1B3 of the Istria motorway 

in Croatia. 

Bouygues Construction has a longstanding 

presence in the Asia-Pacific 

zone through its Dragages subsidiary, 

established in Hong Kong since 1955. 

Development of the New Territories is 

creating numerous opportunities and 

Dragages Hong Kong has concluded 

a €39m contract to build Castle Peak 

tunnel. 

18

Gautrain link project, South Africa 

Bouygues Bâtiment International 

has concluded the €165m Waterfront 

International Development contract 

in Trinidad and Tobago. The project 

includes a 150,000 m 2 development 

comprising a 5-star Hyatt hotel with 

428 rooms on 22 floors, a conference 

centre, two 26-storey office buildings 

and a car park. 

A contract to build a ninth hotel in 

Cuba was concluded for €39 million. 

kets, which generated €118 million, 

ETDE operates alone or in tandem with 

other Bouygues Construction entities, 

as on the €30m Waterfront contract in 

Trinidad and Tobago. 

ETDE contributed €987 million to 

Bouygues Construction’s consolidated 

sales in 2005, an increase of 39% 

on 2004, mostly due to a strategy of 

external growth in place since 2001. 

ETDE acquired ten companies in 2005 

and recorded organic growth of 14%. 

tion systems segment. 

ETDE has continued to expand in the 

broadband business, completing the 

third phase of the ROSE optical security 

network contract for RTE. The 

acquisition of Axione has reinforced 

its broadband network engineering 

skills. 

ETDE’s electrical and HVAC engineering 

division has continued to expand, 

acquiring Métral in south-eastern 

France and reinforcing its HVAC capacity 

by acquiring Stéfal’s HVAC engineering 

activities. 

International 

ETDE is also establishing itself 

through external growth elsewhere 

in Europe. In June 2005, it acquired 

David Webster, the UK’s third largest 

street lighting contractor with 260 

employees and annual sales of €40 

million. ETDE already had a foothold in 

the UK through its facilities management 

subsidiary Ecovert FM. ETDE and 

David Webster won a PFI street lighting 

contract with the London borough 

of Lambeth worth €54 million over 

25 years. The acquisition of ICEL will 

strengthen ETDE’s presence with large 

industrial firms in the south-east of 

England. 

In Africa, ETDE is establishing a local 

presence through a network of twelve 

fast-growing subsidiaries (sales in 

Olkiluoto nuclear power station in Finland 

2005 were 23% up on the previous 

year). Other contracts in France’s 

overseas dependencies and elsewhere 

are more the result of taking 

advantage of opportunities as they 

arise, targeting large-scale projects 

in particular. 

Outlook for 2006 

Bouygues Construction is maintaining its 

growth strategy, focusing on four priorities: 

electrical contracting and maintenance, 

public-private partnerships, property 

development, and transport infrastructure 

concessions. 

Electrical Contracting 

and Maintenance 

ETDE has three lines of business with a 

substantial services component: utility 

networks (€476 million, 47% of 

sales), electrical and HVAC engineering 

(€276 million, 27% of sales) and 

facilities management (€144 million, 

14% of sales). On international mar- 

France 

ETDE consolidated its position in the 

electrical contracting and maintenance 

sector with the acquisition of 

Lignest and Snef and now also has 

railway signalling expertise following 

the acquisition of Sosiel. The acquisition 

of ETS (Entreprise de Téléphonie 

et de Signalisation) makes ETDE a 

significant player in the communica- 

The company has solid positions on buoyant 

markets with good prospects for growth. 

Order books at end-2005 amounted to €5.2 

billion and 63% of the 2006 sales target 

has already been covered. 

With the finalisation of major contracts 

like the A41, Cyprus airports and Gautrain 

projects, Bouygues Construction can look 

forward to a further high level of activity 

in 2006. 


19

FRANCE’S LEADING 

With 32 branch offices in France and 7 operations 

elsewhere in Europe, Bouygues Immobilier designs 

and builds residential, office and retail park projects. 

In robust financial health and with a 

sharp 41% rise in profits, Bouygues 

Immobilier further increased its market 

share in 2005. 

for €1,047 million (67%) of the total, 

a rise of 21%, and the corporate segment 

for €510 million (33%), a rise 

of 18%. 

Highlights 

Residential 

• 8,208 housing units reserved, an increase 

of 21%. 

• Sharp rise in the regions. 

• Growth in the residential segment in Europe. 

Office and retail 

• 157,000 m 2 of office and retail space sold: 

57,000 m 2 in the Paris region (including 

46,000 m 2 in Issy-les-Moulineaux), 

48,000 m 2 in the regions, especially Lyon and 

Dijon, and 52,000 m 2 in Portugal and Spain. 

• Delivery of 23,000 m 2 of refurbished office 

space at 96 boulevard Haussmann, Paris. 

Development 

• Promise to buy land for an office development 

at Issy-les-Moulineaux (87,000 m 2 ). 

• Agencies opened in Amiens, Grenoble and 

Lorient. 

Sales 2005 

€1,557m 

(+20%) 


€156m 

(+31%) 


€90m 

(+41%) 

Employees 

1,000 


€1,750m 

(+12%) 

96 Haussmann, Paris, 

inaugurated in December 2005 

The leading property 

developer 

Bouygues Immobilier designs, builds 

and sells property development projects. 

In order to do so, it identifies and 

buys land then draws up projects with 

architects and design firms. 

It generally acts as the contracting 

authority for the developments, 

which 

it then sells to 

individual customers 

or 

investors. 

Reservations in 2005 amounted to 

€1,738 million, 12% up on the previous 

year, and included: 

• 8,208 housing units for €1,350 million 

(up 26%); 

• 157,000 m 2 of commercial and corporate 

property for €388 million 

(down 19%). 

Sales in 2005 amounted to €1,557 million, 

20% up on the previous year. 

The residential segment accounted 

Current operating profit amounted 

to €156 million, representing 10% of 

sales, compared with 9.2% in 2004. 

Net profit attributable to the Group 

rose by 41% to €90 million. 

Bouygues Immobilier has shareholders’ 

equity of €285 million and reported 

a net cash surplus for the third 

year running. 

Residential property: 

still a thriving market 

An estimated 121,500 housing 

units were built on the 

IFRS 

20

PROPERTY DEVELOPER 

> Further growth in residential property in 2005 

French private residential property 

development market in 2005, 8% 

more than in 2004. 

The market continued to thrive on the 

back of strong demand fuelled by a 

dearth of new housing in France over 

the last 20 years. 

Low long-term interest rates in 2005 

were another factor, compounded by 

sustained demand for rental property, 

tax incentives and a trend towards 

residential property as a safe investment 

in preparation for retirement. 

In a context of buoyant demand, the 

average price per square metre of new 

residential housing rose by an estimated 

11% in comparison with 2004. 

The Paris region accounts for 20% 

of the market and the rest of France 

for 80%, a proportion that has risen 

in recent years as a result of strong 

growth in demand. The market is 

fragmented, with little concentration 

among developers. The eight biggest 

property developers in France account 

for less than 40% of the market. 

Bouygues Immobilier’s main rivals are 

Nexity and Kaufman and Broad. 

Having sold 8,208 housing units in 

2005 (up 21%), including 7,734 in 

France, Bouygues Immobilier consolidated 

its position as one of the leading 

developers with a market share of 

6.4% and rising. 

New residential properties for rental 

account for 60% of reservations. 

Sales 

€m 

Commercial / corporate 

Residential 

1,750 

1,557 

1,295 

380 

64 

510 

431 

1,370 

1,047 

864 

2004 2005 2006 (o.) 2004 2005 


Commercial property 

Reservations, thousand m 2 

163 167 

157 

2003 2004 2005 

Residential property 

Breakdown by geographical area 

Europe 

Rest of France 

Paris region 

5,405 

3,157 

2,213 

6,759 

3,812 

2,783 

8,208 

474 

4,721 

3,013 


€m 

90 


Reservations, units 

5,405 

IFRS 

6,759 

8,208 

2003 2004 2005 


Reservations by value (€m) 

France and European operations 

806 

1,068 

1,350 

2003 2004 2005 2003 2004 2005 


ASSETS (€m - IFRS) 2004 2005 


• Goodwill - - 


NON-CURRENT ASSETS 75 81 

• Current assets 826 957 

• Cash and equivalents 313 237 





• Shareholders’ equity attributable to the Group 238 284 


SHAREHOLDERS’ EQUITY 248 285 






• Current liabilities 828 819 


• Financial instruments (debt-related) 2 - 

CURRENT LIABILITIES 848 834 


NET DEBT (249) (150) 


(€m - IFRS) 2004 2005 

SALES 1,295 1,557 


• Other operating income and expenses - - 


• Cost of net debt - 1 

• Other financial income and expenses (11) (12) 


• Share of profits and losses of associates - - 








21

Le Carré des Rois development scheme, 

Saint-Denis 

Bouygues Immobilier has sufficient 

reserves of land in France to cover 

three years’ activity. 

Paris Region 

Bouygues Immobilier has strong positions 

in the Paris region, where it has 

a market share of 13%. 

With prices in Île-de-France rising 

sharply, Bouygues Immobilier’s strategy 

is to expand in the second and 

third rings of the greater Paris region, 

where land is still affordable, so that 

residential developments can target a 

broad customer base, especially firsttime 

buyers. 

A number of major projects are under 

way, including: 

• the O'Vert development at Bussy- 

Saint-Georges, to the south-east of 

Paris, comprising 630 housing units, 

9,000 m 2 of office space and 20 

retail units; 

• La Croisette, an AgirVert ® development 

comprising 342 housing units 

at Carrières-sous-Poissy, to the west 

of Paris; 

• Eden, a development comprising 220 

housing units at Plessis-Robinson, to 

the south of Paris; 

• Les Jardins du Carrousel, a codevelopment 

comprising 507 housing 

units at Issy-les-Moulineaux, just 

outside Paris; 

• Quai Treize, 58 upmarket housing 

units in Paris, near the Bibliothèque 

de France, designed by the famous 

architect Henri Gaudin. 

Le Carré des Rois, a major development 

comprising 172 housing units at 

Saint-Denis, to the north of Paris, was 

delivered in the summer of 2005. 

The residential property market 

continues to thrive 

Rest of France 

Bouygues Immobilier’s rapid expansion 

in the French regions, where reservations 

rose by 24% in 2005, was 

fuelled by strongly growing demand in 

the south and south-east, the Atlantic 

crescent, the Rhône-Alpes region and 

eastern France. 

To boost its expansion outside the 

Paris region, Bouygues Immobilier 

introduced a new organisational 

structure with two operational divisions 

covering the north and south of 

the country rather than just one. 

The company also continued to extend 

its geographical coverage, opening 

new agencies in Amiens, Grenoble and 

Lorient, bringing the number of establishments 

in France to 32. 

It intends to continue the process in 

2006, opening agencies in Caen and 

Reims and a branch in Metz. 

The expanded network will enable the 

company to cover 210 towns and cities. 

Bouygues Immobilier embarked on a 

number of major development projects 

in 2005, including: 

• the Cours Richelieu in La Roche-sur- 

Yon in western France, comprising 

305 apartments, six houses, a 100- 

room student hall of residence, an 

old people's home with a 75-bed 

facility under medical supervision 

and a nursing home; 

Exaltis building, Paris La Défense, May 2005 

22

• the Allée des Oliviers in Montpellier 

in southern France, comprising 145 

social housing units on low-interest 

loans; 

• Ponts Jumeaux, a 300-unit project 

in a mixed development zone in 

Toulouse. 

Bouygues Immobilier is an active 

player at the top end of the market 

in Paris and its near suburbs, involved 

in both new building and refurbishment 

projects. It is also expanding in 

this segment in France’s other major 

cities. 

Bouygues Immobilier maintained sales 

at the previous year’s level, marketing 

157,000 m 2 of office, retail and hotel 

space, including 52,000 m 2 in Europe 

outside France, and consolidating its 

leading position on the new office 

market. 

A number of major developments were 

delivered in 2005, including: 

• the 23,800 m 2 Insight building (Paris 

13), headquarters of the Banques 

Populaires, sold to Deutsche Bank 

Real Estate; 

• 96 Haussmann (Paris 8), the former 

headquarters of Banque Indosuez, a 

23,000 m 2 refurbishment project for 

Calyon under a property development 

agreement; 

• R Way, a 4,200 m 2 building in 

The company also won a competition 

to develop two packages of Lyon’s 

Buire mixed development zone near 

the Part-Dieu station. 

Bouygues Immobilier will build a hundred 

or so housing units on the site 

and its subsidiary SLC Groupe Pierre- 

Eugène Pitance a further 80 units. 

Commercial and 

Corporate Property: 

a brighter outlook 

Against a background of sluggish economic 

growth, the corporate property 

market hit a trough in 2005. However, 

signs of an upturn emerged in the 

second half of the year as rental values 

became firmer and demand in the 

Paris region began to stir. 

The investment market remained 

buoyant at €16 million with approximately 

20% being invested in new 

buildings. 

Bouygues Immobilier’s main competitors 

are land development companies, 

investment funds and British and 

French developers. 

Mozart tower project: undertaking to purchase 87,000 m 2 of office space in Issy-les-Moulineaux near Paris 


23

• Château Blanc, a 30,000 m 2 development 

at Wasquehal in northern 

France. 

The company has concluded a property 

development agreement for the 

construction of 46,000 m 2 of office 

space in Issy-les-Moulineaux for 

Generali. 

Bouygues Immobilier, having already 

delivered 113,000 m 2 of retail parks in 

Europe, mostly in Spain and Portugal, 

has drawn on its experience and success 

in the segment to tackle the 

French market. 

Cristallia programme, Madrid: 92,000 m 2 of offices 

The company will develop three more 

retail parks in 2006, at Nîmes, southeastern 

France (12,000 m 2 ), Marollesen-Hurepoix 

to the south-east of Paris 

(10,000 m 2 ) and Caen, northern France 

(15,000 m 2 ). 

Sales growth in Europe 

Bouygues Immobilier has continued 

to expand its operations in Spain, 

Portugal, Germany, Belgium and 

A shopping centre project in Lisbon 

Boulogne sold to investment fund 

Warburg-Henderson which houses 

the headquarters of the National 

Cancer Institute. 

Major projects currently in progress 

include: 

• Exaltis, a 23,000 m 2 tower in Paris La 

Défense sold to La Mondiale, scheduled 

for delivery in March 2006 and 

partly let to Mazars & Guérard; 

• refurbishment of the former Medef 

headquarters on Rue Pierre 1 er de 

Serbie (Paris 8), a 6,300 m 2 development 

sold to Crédit Suisse Asset 

Management; 

• the Dijon Business Centre, a 15,000 m 2 

development housing the Côte d’Or 

Departmental Council, the Dijon 

Chamber of Commerce and Industry 

and an Ibis hotel; 

• the Woodstock business park at 

Lyon Saint-Priest, which on completion 

will comprise 13 buildings on a 

32,000 m 2 site; 

Valparimmo, a joint subsidiary of 

Bouygues Immobilier and EDF, has 

negotiated the purchase from the 

Paris city authorities of another site at 

Issy-les-Moulineaux for the construction 

of 87,000 m 2 of office space. 

A lease has been signed with Airbus 

for the construction of 5,600 m 2 of 

office space in Toulouse. 

Retail parks: launch 

on the French market 

Bouygues Immobilier staked out a 

position on the French retail park market, 

delivering a first 10,000 m 2 project 

at Beaucaire, in Provence, in 2005. 

Retail parks offer consumers an innovative 

complement to city centre 

shopping featuring distinctive architectural 

design in a landscaped environment. 

24

Poland, which generated sales of €168 

million in 2005, 10.8% of the total and 

87% more than in 2004. 

In Spain, Bouygues Inmobiliaria is 

developing Cristallia, a major project 

in Madrid comprising 11 buildings and 

92,000 m 2 of office space. Four buildings 

sold to investors were delivered 

in early 2006. In Barcelona, the company 

is building City 22, a project 

comprising 13,700 m 2 of office space 

sold to Segurfundo and MEAG, an 

investment fund. 

On the residential property market, 

Bouygues Inmobiliaria has delivered 

its first development sold to private 

customers, comprising 73 housing 

units at Castelldefels in the Barcelona 

suburbs. The company is also continuing 

to expand on the retail parks 

market. 

In Portugal, Bouygues Imobiliària 

has continued to pursue its strategy 

of growth in the commercial 

property and office segments. Two 

retail parks were sold, one at Viana 

to Generali and the other at Braga 

to Commerzbank, which also bought 

Expobi 2, a 10,000 m 2 office building 

in Lisbon. 

A promise of sale has been signed in 

partnership with the Dutch promoter 

AM for the construction of a 43,000 m 2 

shopping centre at Guimaraes. 

Bouygues Imobiliària also intends to 

expand into the residential property 

market in Lisbon. 

In Germany, Bouygues Immobilien has 

sold 20 units in its residential development 

Les Solitaires and has started to 

market the 30,000 m 2 Main Triangel 

office building in Frankfurt. 

In Belgium, Bouygues Immobilier 

Belgium has delivered the first phase 

Les Solitaires residential development, Frankfurt 

of its Sedgewick House residential 

development in Brussels and has 

started to market Chasse Royale, a 120- 

apartment project, also in Brussels. It 

has submitted an application for planning 

permission for a 20,000 m 2 retail 

park outside Charleroi. 

In Poland, Bouygues Immobilier Polska 

is continuing to expand on the residential 

property market in Warsaw. 

213 apartments were reserved in 2005 

and the company has enough land to 

build some 1,000 apartments over the 

next few years. 


Bouygues Immobilier intends to increase 

its market share in order to consolidate 

its position as France’s leading property 

developer and become a key player in 

Europe. 

Its strategic priorities are: 

• to continue vigorous but prudent 

growth by expanding in the residential 

property segment, especially in the 

French regions, keeping risks in the 

office segment under control and focusing 

its efforts in Europe on Portugal, 

Spain and Poland; 

• to maintain a high level of profitability; 

• to preserve a robust financial structure 

through long-term control of 

debt. 

Sales are likely to show a further substantial 

rise in 2006 as a result of a high 

level of commercial activity in 2005. 

New tax incentives in France are expected 

to stimulate demand for residential 

property on a market that is levelling 

out. 

In this context, Bouygues Immobilier 

expects a further increase in residential 

property reservations and a moderate 

but rising level of activity on the commercial 

and corporate property market. 


25

THE WORLD LEADER 

Operating in all aspects of roadworks and transport 

infrastructure, Colas also covers the full range 

of upstream industrial activities from quarrying 

and mixing plants to units producing emulsions 

and binders. With its network of local contractors, 

Colas spans more than forty countries and has 

some 58,000 employees in over 1,200 establishments. 

Highlights 

Flourishing sales, especially on international markets 

• roadbuilding contracts in Slovakia (€75m), 

• motorway construction contracts in Hungary 

(€49m), 

• A41 concession in France. 

Ongoing acquisitions policy 

• Prosign and Veluvine (road painting) in France, 

• Acquisitions in North America and Europe. 

Industrial activities 

• Increase in production capacity: 

over 100 million tonnes of aggregates, 

• 20 to 25 years' reserves of materials. 

Major international projects 

• Second phase of renovation of the Antwerp ring 

road in Belgium; 

• First year of a PFI contract in Portsmouth, UK; 

• Construction of sections of the M5 and 

M3 motorways in Hungary; 

• Completion of a container storage facility 

at the port of Norfolk, Virginia (USA). 

Sales 2005 

€9,540m 

(+19%) 


€390m 

(+35%) 


€307m 

(+22%) 

Employees 

57,800 


€10,100m 

(+6%) 

IFRS 

Work on the A31 motorway, France 

Excellent financial 

and sales performance 

19% increase in sales 

All Colas’ activities in 2005 were located 

in buoyant markets (France, Central 

Europe, Indian Ocean, North America) 

where equipment and infrastructure 

modernisation needs meant that sales 

growth often surpassed GDP growth. 

The already substantial rise in sales 

was amplified by external growth, 

Colas acquiring a large number of 

small and medium-sized businesses in 

late 2004 and throughout 2005. 

The acquisitions enabled Colas to 

improve its geographical coverage 

in Central Europe and strengthen 

its positions in certain lines of 

business, notably road paint 

production, aggregates, 

bitumen storage and civil engineering. 

Helped by favourable weather conditions, 

almost all the group’s subsidiaries 

confirmed or improved their 

performance despite a jump in prices 

for oil products, which represent a 

substantial proportion of production 

costs across all business areas. 

Colas achieved remarkable results in 

2005, recording a sharp rise in sales, 

profits and investment. 

Consolidated book sales amounted 

to €9,540 million, 18.9% more than 

in 2004. Like-on-like and at constant 

exchange rates, the increase was 

11.3%. 

For the first time in a number of years, 

exchange rate fluctuations in 2005 

had almost no effect on sales figures. 

An 18% increase in order books 

Net profit attributable to the group 

rose by 22.3% to €307 million and 

cash flow by 25% to €783 million. 

Shareholders’ equity rose from €1,230 

million at end-2004 to €1,478 million. 

Net investment amounted to €495 

million. With a net cash surplus of 

€415 million, the company had no 

net debt. 

Order books at the end of December 

2005 amounted to €4.66 billion, 

up by approximately 18% 

(16% in France, 20% 

on overseas and 

i n te r n a t i o n a l 

markets). 

26

IN ROADWORKS 

> Sharp rise in sales and profits in 2005 

Colas group businesses 

Mainland France 

Roads 

The group’s roads business in France 

is highly diversified. Each year the 

company completes some 53,000 projects 

in transport infrastructure construction 

or maintenance (motorways, 

major roads, local roads, airports, 

ports, railways, and public transport 

lanes for buses and trams), industrial 

and commercial hubs, mains services 

for individual homes and housing 

estates, urban and environmental 

amenities, and leisure facilities. 

It also has a building operation in 

the Paris region which includes conventional 

construction work, mostly 

office buildings, and the dismantling 

and demolition of old buildings. 

Safety and Signalling 

The road safety and signalling business 

comprises the manufacture, 

installation and maintenance of safety 

equipment (guard rails, traffic directing 

equipment), signalling devices 

(signs, trailers, production and application 

of paints, marking) and traffic 

management equipment (traffic light 

maintenance). 

Pipes and mains 

The business comprises the laying and 

maintenance of pipes and mains and 

deep drilling. 

Sales 

€bn 

8.0 

2004 2005 2006 (o.) 


Sales by business segment 

Other activities 

(pipes and mains, 

waterproofing, rail, signalling) 

18% 

Sales of 

products 

12% 

Order books 

€bn 

9.5 10.1 

Roadworks 

70% 

mainland France 

international and overseas markets 

3.5 

1.9 

4.0 

2.1 

1.6 1.9 

4.6 

2.4 

2.2 

2003 2004 2005 

Europe 

(excl. 

France) 

18% 


€m 

251 

307 

2004 2005 

Sales by region 

North 

America 

19% 

Other 

5% 

Net cash 

€m 

255* 

423 

France 

58% 

415 

2003 2004 2005 

+ French GAAP 

IFRS 


ASSETS (€m - IFRS) 2004 2005 

• Tangible and intangible fixed assets 1,438 1,687 



NON-CURRENT ASSETS 2,002 2,320 



• Financial instruments (debt-related) 5 9 




• Shareholders’ equity attributable to the Group 1,205 1,451 


SHAREHOLDERS’ EQUITY 1,230 1,478 











NET DEBT (423) (415) 


(€m - IFRS) 2004 2005 

SALES 8,024 9,540 




• Cost of net debt (7) (10) 

• Other financial income and expenses 24 4 


• Share of profits and losses of associates 42 49 








27

Waterproofing 

The waterproofing business comprises 

the production and marketing in France 

and on international markets of waterproofing 

membranes, skylights and 

smoke extraction devices, roadways 

waterproofing, and waterproofing and 

cladding/roofing for buildings. 

Rail 

The rail business comprises the construction 

and maintenance of rail 

networks, including both conventional 

track and high-speed lines, tramways 

and underground lines, and the widening 

of rail tunnels. 

Concessions 

Antwerp Ring road, Belgium 

Colas has a 16.67% stake in Cofiroute, 

a motorway concession company that 

operates a 986 km network of major 

roads in the north-western quarter 

of France. 

Together with Bouygues Construction, 

it also has a 46.1% stake in Adelac, the 

concession company that has won a 

55-year concession to operate the A41 

motorway linking Annecy and Geneva. 

Competitive environment 

Colas is the leading roads contractor 

and in second place for the production 

of aggregates, rail works and 

waterproofing. A ranking for other 

activities would be meaningless. On 

roadworks and civil engineering markets, 

Colas subsidiaries are in competition 

with Eurovia (Vinci), Appia 

(Eiffage) and a very dense network of 

some 1,600 small, medium and large 

regional and local firms. Lafarge and 

Ciments Français are competitors on 

the aggregates market, along with 

regional and local producers of aggregates, 

some of which also have a 

civil engineering activity. Subsidiaries 

operating in complementary activities 

compete with the specialist arms of 

the French construction firms already 

mentioned and their international 

counterparts and a host of small, 

medium and large specialist firms, 

regional, national and foreign, like 

Signature, Girod and Lacroix in the 

signalling segment and Vossloh and 

Amec Spie in the rail segment. 

International and overseas 

markets 

International sales in the roads sector 

run at more or less the same 

level as sales in France, though individual 

projects tend to be larger in 

North America, Central Europe and the 

Indian Ocean. 

The group’s main complementary 

activities outside France are pipes and 

mains, civil engineering and railway 

works in Europe, and building and civil 

engineering in the Indian Ocean. 

In Asia, Colas is developing the storage 

and marketing of oil products, 

especially bitumen, mostly for roads. 

TGV Est high-speed line 

Colas has prime positions on international 

markets and is in competition, 

in each country, with local firms or 

subsidiaries of major international 

construction firms, cement makers or 

materials producers. 

Strong sales growth in 

mainland France 

Consolidated sales in France rose by 

11.2% on 2004 to €5,240 million (7.8% 

like-on-like). 

Roads 

On a buoyant market, Colas and its 

regional roads subsidiaries reported 

an 11.8% rise in sales to €4,289 million. 

Local authority and private sector 

investment, urban transport projects 

(especially tramways) and urban 

development schemes offset the continuing 

decline in government spending, 

underlined by further delays in 

28

the performance of contracts under 

planning agreements between central 

government and the regions. 

The group also pursued its strategy 

of expanding its materials production 

capacity, especially aggregates, making 

a number of acquisitions during 

the year. 

Safety and signalling 

The safety and signalling division 

recorded an impressive 24.5% increase 

in sales, mostly due to the consolidation 

of two road paint production and 

road marking companies in the second 

half of the year, Prosign in France 

and Veluvine in the Netherlands, and 

sustained demand from the motorway 

and equipment maintenance segments. 

Pipes and mains 

Sales at the pipes and mains division 

remained stable in comparison with 

2004. Demand on the oil and gas markets 

remained firm and the trend on 

the water market was favourable. 

Waterproofing 

Waterproofing subsidiaries reported 

a significant rise in sales, up 11.2% 

on 2004, although the figure for 

waterproofing membrane production 

reflects the increase in raw materials 

prices. 

Rail 

Sales at the rail division rose by 21% 

on the previous year, mostly due to 

substantial volumes of work on major 

rail projects in France and the UK. In 

contrast, local branches have had to 

adapt to a cut in track maintenance 

and renovation grants from RFF, the 

infrastructure operator. 

Very sharp rise in 

international and 

overseas sales 

Sales on international and overseas 

markets amounted to €4.3 billion, a 

29.8% increase on 2004 (11.8% like-onlike 

and at constant exchange rates). 

In geographical terms, North America 

Construction of the Paris tramway 

accounted for 41.4%, Europe (excluding 

France) for 40.1%, Africa/Indian 

Ocean/Asia for 9% and French overseas 

dependencies for 9.5%. 

Europe 

Sales in Europe (excluding France) 

rose by 44.5% on the previous year 

to €1,725 million, with central Europe 

accounting for €937 million and 

northern Europe for €788 million. 

In Belgium, sales were sustained by 

major projects including renovation 

of the Antwerp ring road, a section 

of the E25 motorway and renovation 

and extension of the runway at Liège 

airport. 

In Denmark, the market was satisfactory 

in volume terms but subject 

to considerable price pressure in a 

context of fierce competition. 

In the UK, under a 25-year contract 

to renovate and maintain roads in 

Portsmouth concluded in July 2004, 

work on the main network began in 

February and the first year of the 

contract as a whole was completed to 


29

acquired in the south of the country. 

North America 

Sales in North America rose by 20% 

on 2004 to €1,780 million. Like-on-like 

and at constant exchange rates, the 

figure was 13%. 

In the United States the group, which 

has subsidiaries operating in 23 states, 

recorded a 13% rise in sales. 

In Canada, sales rose sharply on the 

back of high public spending and 

sustained growth in the residential, 

commercial and industrial sectors, 

especially in the oil-rich west of the 

country. 

Colas reinforced its positions with a 

number of small-scale acquisitions, 

particularly in Quebec, British Columbia 

and the North-West Territories. 

Gilles Villeneuve circuit, Canada 

Route des Tamarins, 

La Réunion 

the customer’s satisfaction. 

In Switzerland, the market remained 

sluggish and sales fell slightly. 

In Hungary, sales jumped as a result 

of work on motorway contracts, 

mains projects and the acquisition of 

Hoffmann Rt, a roads company. 

Sales also rose in the Czech Republic, 

where the acquisition of the 

Kamenolom Cisarsky quarries enabled 

the company to extend its range of 

activities. 

In Slovakia, sales rose sharply in a 

buoyant market sustained by motorway 

and infrastructure maintenance 

projects. 

In Romania, sales remained at the 

same level as in the previous year 

despite heavy flooding. 

In Poland, three new quarries were 

Uncertainties over renewal of the 

TEA-21 federal infrastructure financing 

programme were finally dispelled with 

the passing of the SAFETEA-LU Act, 

which guarantees $286 billion in federal 

funding for transport infrastructure 

projects over six years, giving 

a clearer view of the picture for the 

medium term. 

Portsmouth, UK 

Indian Ocean – Africa 

Sales in the Indian Ocean rose sharply 

as a result of major projects in 

Madagascar funded by international 

backers, including the strengthening 

of RN2, the “Vanilla Road”, and renovation 

of 300 km of RN6. 

In Morocco, sales remained at the 

same level as in the previous year. 

An increase in roadworks offset the 

closure of a quarry and a fall in emulsion 

sales. 

In Benin, sales tumbled due to a lack 

of projects. 

In Gabon, sales were boosted by ongoing 

infrastructure work for an oil company. 

Overseas dependencies 

Building activity in La Réunion was 

boosted by vigorous private-sector 

investment, while sales in the public 

works segment benefited from the 

launch of major projects like the Route 

des Tamarins. 

Activity in Mayotte mainly concerned 

the construction of breakwaters for 

the port of Longoni. 

In the Caribbean, sales slowed in 

Guadeloupe but picked up slightly in 

Martinique. 

30

Two major projects were completed 

in Guiana: 

• strengthening of the main runway of 

Rochambeau airport, 

• earthworks for the Soyuz launch 

pads at the Kourou Space Centre. 

Asia 

With all the group’s subsidiaries in 

the region benefiting from brighter 

economic conditions, sales of bitumen 

products reached a record high, 

approaching the million-tonne mark. 

Expansion in the production, storage 

and distribution of oil products, especially 

bitumen and emulsions, was 

stepped up. 

Subsidiaries in Thailand performed 

well. 

In Malaysia, construction work started 

on a bitumen refinery which will 

ultimately be able to handle 25,000 

barrels of oil a day and produce up 

to 800,000 tonnes of bitumen a year. 

Production at the plant is scheduled 

to begin in early 2007. 

In India, where the group has six 

production units, Hincol continues to 

lead the emulsion market, producing 

80,000 tonnes of binders a year. 

In Vietnam, the takeover of a company 

specialising in the storage and 

distribution of bitumen has improved 

the group’s geographical coverage in 

that segment. 


Considerable urban development and infrastructure 

needs remain, both in France and 

on international markets. 

Projects in progress or under consideration 

suggest that business will continue to thrive 

in the first half of 2006. Although economic, 

budgetary and monetary uncertainties 

coupled with meteorological considerations 

urge caution, 2006 looks like being a repeat 

of 2005. 

Plans for further acquisitions have been 

made, some of which could come to fruition 

in 2006, both in France and elsewhere. 

If that is the case, and if markets remain 

firm in the second half of the year, Colas 

may expect to enter a new phase in its 

strategy of profitable growth in 2006, with 

sales of more than €10 billion, especially as 

its advantages remain unchanged: 

• network of profitable businesses with relatively 

little exposure to cyclical movements, 

• a growing proportion of industrial activities 

with efficient plant, 

• over 95% of sales generated in the developed 

world and no exposure in unstable 

countries, 

• a robust financial situation, 

• a simple, flexible organisation. 

Mions industrial site: quarrying, mixing, recycling 


31

NUMBER ONE TELEVI 

France’s leading general-interest TV channel, TF1 

has diversified into complementary businesses 

including theme channels, internet activities, 

audiovisual rights, spin-off products and pay TV. 

Highlights 

• December: announcement of a planned 

merger between TPS and Groupe Canal+. 

• October: 13.3 million viewers for the football 

match between France and Cyprus on TF1. 

• Summer: 12 million viewers on average for 

the summer serial, Dolmen. 

• July: six TF1 channels in the Mediacabsat 

Top 10 (audience of cable and satellite 

channels, 27 December 2004 to 12 June 2005). 

• First half of 2005: disposal of Visiowave and 

Studios 107. 

• June: exclusive rights to show the 2010 

and 2014 football World Cup competitions 

in France. 

• May: acquisition of a 40% stake in TMC. 

• March: launch of Ushuaïa TV. Launch of DTT 

in France: TF1 has two licences for free-to-air 

(TF1 and TMC) and four for pay channels. 

Sales 2005 

€2,509m* 

(=) 


€353m* 

(-7%) 

* excl. TPS 


€236m 

(+5%) 

Employees 

4 100* 

* incl. fixed-term contracts 


€2,620m 

(+4%) 

13.3 million viewers tuned in 

to the France-Cyprus match 

Under the terms of the agreement 

concerning TPS concluded by Vivendi 

Universal, TF1 and M6 on 6 January 

2006, TPS is deemed to be an asset 

held for sale and TF1’s financial statements 

are presented according to 

IFRS 5 (Non-current Assets Held for 

Sale and Discontinued Operations). 

The sales figure for the TF1 group does 

not therefore include TPS in 2004 and 

2005 (for consistency, 2004 figures 

are given like-on-like). Thus, sales for 

the TF1 group (ongoing activities) in 

2005 were stable at €2,509 million. 

On-air advertising sales increased by 

0.1% over the year as a whole. Annual 

sales by other divisions (excluding 

activities held for sale) rose by 0.6%. 

Growth in other activities was mainly 

due to four factors. 

• Audience figures for the TF1 group's 

theme channels in France were good 

and advertising sales rose by 16% in 

2005. e-TF1's contribution to sales 

increased by 42.7% and the tf1.fr 

website consolidated its position as 

France's premier media portal; 

• Teleshopping benefited from popular 

programmes and thriving internet 

sales; 

• TF1 International reported a 52.6% 

jump in sales, due in particular to a 

number of box-office successes (TF1 

International was the fourth biggest 

French film distributor in 2005). 

The TF1 group's operating profit fell 

by 7% to €353 million (including 

a €14.2 million capital gain on the 

sale of Visiowave) in 

comparison with 

the previous 

year. The fall 

was mostly 

due to the 

combined 

e ffe c t 

of flat advertising sales and a 2.9% 

increase in the cost of programmes. 

Over 2005 as a whole, the net profit 

attributable to the Group rose by 5% 

to €236 million, giving a net margin 

on sales of 9.4%, compared with 9.0% 

in 2004. 

Most of this improvement was due to a 

reduction in the tax charge. 

The TF1 group had shareholders’ equity 

of €1,050 million at 31 December 

2005, for a balance sheet total of 

€3,470 million. Net debt 

amounted to €351 

million, or 33% of 

equity. 

In November 2005, 

Standard & Poor’s confirmed 

TF1’s long-term 

A and short-term A-1 rating, 

underlining the 

group’s excellent 

financial 

health. 

The outlook 

moved from 

stable to 

negative. 

IFRS 

32

SION GROUP IN FRANCE 

> Biggest increase in audience share on the French market in 2005 

French channels 

French channels generated revenue of 

€2,039.9 million in 2005 (before stripping 

out inter-sector sales), 1.2% more 

than in 2004, and an operating profit 

of €292.5 million. Excluding TF1 SA, 

sales in the sector rose by 4.8% and 

the operating margin improved by 5.2 

points to 7.8%. 

TF1 channel* 

Record-beating viewing-time figures 

drove TV consumption to its highest 

levels since the Mediamat panel was 

established in 1989. 

Average daily viewing amounted to 

206 minutes, a two-minute increase 

on the previous year. The rise was 

even greater among women under 50, 

the core advertising target audience, 

an additional seven minutes bringing 

the total to 216 minutes. TF1 is the terrestrial 

channel that has contributed 

most to this increase. 

Growth at TF1 continued in 2005. With 

32.3% of the audience of individuals 

aged 4 and over (up 0.5) and 36.2% of 

women under 50 (up 0.7), TF1 exceeded 

its 2004 levels in its two core target 

markets. It continues to be both a 

leading general-interest channel and 

a media innovator. 

TF1 had 97 of the top 100 audiences in 

2005, compared with 89 in 2004 and 

95 in 2003. 

* Source: Médiamétrie 

Sales* 

€bn 

Advertising revenue (TF1 core channel) 


2.5 2.5 2.6 

1.6 1.6 1.7 

0.9 0.9 0.9 

Sales* 

by business segment 

International 

channels 

10% 

Audiovisual 

rights 

8% 

French channels 

82% 


€m 

225 

Audience share 

Individuals aged 4 and over 

M6 

12.6% 

France 5 

3.1% 

Canal+ 

3.6% 

France 3 

14.7% 

236 

2004 2005 2006 (o.) 2004 2005 

* excl. TPS (o.) : objective 

IFRS 

* excl. TPS 

TF1 viewing time 

Women under 50 

1 h 37 1 h 40 1 h 46 

Source: Médiamétrie 

Arte 1.8% 

TF1 

32.3% 

France 2 

19.8% 

Investment in French 

production (€m) 

339.6 351.7 370 

2003 2004 2005 2003 2004 2005 

Source: Médiamétrie 


ASSETS (€m - IFRS) 2004 2005 




NON-CURRENT ASSETS 1,330 931 





• Held-for-sale assets - 564 



• Shareholders’ equity attributable to the Group 975 1,051 

• Minority interests 1 (1) 

SHAREHOLDERS’ EQUITY 976 1,050 







• Short-term bank borrowings and overdrafts 17 - 



• Liabilities on held-for-sale assets - 350 


NET DEBT 409 351 

TPS is booked as a held-for-sale asset. 


(€m - IFRS) 2004 2005 

SALES 2,501 2,509 


• Other operating income and expenses - 14 



• Other financial income and expenses 4 - 


• Share of profits and losses of associates (5) (5) 



• Net profit of discontinued or held-for-sale operations (2) 14 


• Minority interests (1) (2) 



33

Laurent Cabrol presents the 

Teleshopping programme 

34 

Advertising* 

In this context, the TF1 group recorded 

an across-the-board increase in 

net advertising revenue, with the TF1 

core channel posting a rise of 0.1%, 

French theme channels a rise of 16% 

and internet activities a rise of 30%. 

Advertising revenue increased by 3% 

in the last quarter of 2005. 

The structure of TF1’s advertising revenue 

reflects shifts and changes in 

household consumption patterns. 

The food industry is still the biggest 

spender on advertising on TF1, though 

its overall expenditure declined by 

9% in 2005 and spending on beverage 

advertising slipped back by 8.6%. 

Telecoms and services continue to 

drive the market, with sharply rising 

advertising budgets: the telecom 

sector is the fifth largest advertiser 

on TF1 and spending in 2005 rose by 

25.9%, mainly due to advertising by 

internet service providers. The sector 

was boosted by the launch of 

new products and services, such as 

combined TV, telephone and internet 

* source: Secodip 

packages and liberalised directory 

services. 

Spending by the service sector, the 

seventh largest advertiser on TF1, 

rose by 3.6%, driven by employment 

and recruitment agencies and banks 

(+1.6%). 

French theme channels 

Sales by the TF1 group’s French theme 

channels rose by 8.3% in 2005 (before 

stripping out inter-sector sales) to 

€138.9 million, sustained by: 

Dolmen, TF1’s highly successful 

summer serial 

• the consolidation of TMC, which generates 

annual sales of €5.2 million; 

• the good viewing figures recorded 

by TF1 group channels in the most 

recent Mediacabsat survey (1) . Six 

channels from the TF1 stable featured 

in the top 10 in terms of audience 

share, including Eurosport, the 

leading cable and satellite channel, 

equal with RTL9, and TV Breizh, now 

in third place; 

• a 16% increase in advertising revenue 

from theme channels in 2005. 

French theme channels recorded an 

operating loss of €15.9 million in 2005, 

though LCI and TV Breizh reduced 

their operating loss by €3.2 million 

and €2.7 million respectively. 

Histoire, Ushuaïa TV and TMC, channels 

newly acquired or created in 2004 

and 2005, accounted for €9.3 million 

of the operating loss. 

Given the outlook for sales growth, 

losses from theme channels are likely 

to show a significant decline in 2006. 

LCI should cut its losses by around 

20% and TV Breizh is expected to 

break even. 

Teleshopping’s contribution to the TF1 

group’s consolidated sales in 2005 

amounted to €89.3 million, up 6.8%, 

mainly due to strong growth in internet 

sales (up 56%), which now account 

for around 20% of the subsidiary’s 

revenue. 

The opening of a first store in Paris 

in August 2005 and a second in 

early 2006 marked a milestone in 

the development of the business. The 

Infomercials project (American-style 

teleshopping) began on 15 October in 

France on certain cable and satellite 

channels and is expected to expand 

rapidly in 2006. The Teleshopping subsidiary 

reported an operating profit of 

€8.2 million, giving a margin on sales 

of 9.2%. 

TF1 Entreprises suffered from a difficult 

economic climate and a slowdown 

in licensing and merchandising 

business in 2005; in addition one of 

its flagship brands, Star Academy, is 

(1) Ninth Mediacabsat survey (27 December 2004 

to 12 June 2005)

eginning to tire. The subsidiary’s contribution 

to sales fell to €29.7 million. 

TF1 Entreprises made up for this 

decline by developing new lines of 

business such as comic strips and 

coffee-table books, optimising its 

licence agreements and signing up 

new brands. 

TF1 Hors Média, created on 1 September 

2005 to offer advertisers and agencies 

options for off-media communication, 

contributed €0.5 million to the sales 

of TF1 Entreprises, which reported an 

operating profit of €5.7 million in 

2005. 

The contribution to sales of e-TF1, the 

group’s interactive services division, 

jumped by 42.7% to €69.8 million, 

buoyed by the success of the game 

shows A prendre ou à laisser and 

Attention à la marche, and a surge in 

advertising revenue and sales of pay 

content driven by the rising number 

of visitors to the tf1.fr portal. 

The portal has consolidated its position 

as France’s leading media website, 

registering a 47% increase in 

audience on a market that grew by 

28%. It is 21 st in the ranking of French 

websites, its highest place since the 

site was launched, has 65% of the 

media website market and ranks 

ninth in terms of internet advertising 

expenditure. 

e-TF1’s operating profit more than 

doubled in 2005 to €6.3 million, giving 

a margin on sales of 9.0% compared 

with 5.1% in 2004. 

Distribution 

of programmes 

and services 

TPS 

TPS reported a 6% increase in sales 

in 2005 and had 1.75 million satellite, 

cable, ADSL and group subscribers at 

31 December. The rise in sales was due 

to an increase in the average number 

of subscribers over the period. 

Having entered into a partnership with 

neuf telecom in February 2005, in 

November TPS announced the conclusion 

of an agreement with Telecom 

Italia to broadcast its programmes on 

the ADSL network of internet service 

provider Alice. 

10 million households were able to 

receive TPS via ADSL by the end of 

the year. 

TPS made an operating profit of €17 

million in 2005 consolidated at 66%, 

eight and a half times more than 

in 2004, and passed the break-even 

point, reporting a net profit of €14 

million consolidated at 66%. It had 

total net debt of €160.6 million at 31 

December 2005. 

Merger of Canal+ and TPS 

On 16 December 2005, Vivendi 

Universal, TF1 and M6 announced their 

intention to combine the French pay 

TV activities of Canal+ and TPS in an 

entity controlled by Vivendi Universal, 

the aim being to develop an enhanced 

and competitive pay TV offering driven 

by strong brands for the benefit of 

consumers. 

On completion of the merger, TF1 and 

M6 will own 9.9% and 5.1% respectively 

of the new entity, controlled 

exclusively by Vivendi Universal. In 

February 2006, Lagardère announced 

that it would join the new group, 

taking a 20% stake that would leave 

Vivendi Universal with 65%. The move 

would not affect TF1 and M6. 

On 6 January 2006, after consulting 

the social partners involved, 

Vivendi Universal, TF1 and M6 signed 

the agreement concluding the deal, 

which was then referred to the Conseil 

Supérieur de l’Audiovisuel (broadcasting 

authority) in a consultative capacity 

and to the competition authorities 

for approval. If approval is forthcoming, 

TF1 and M6 have decided to keep 

their stakes in the new entity for at 

least three years after the transaction 

is finalised. After that time, TF1 and M6 

would have the option of selling their 

shares at market value, enabling them 

Cult serial Lost in prime time on TF1 

to reap the full benefit of the new 

entity’s development. 

The put option would include a guaranteed 

minimum of €1.13 billion for 15% 

of the new entity’s shares, valuing the 

company as a whole at €7.5 billion. 


35

TF1 is testing mobile TV with the DVB-H standard 

The background to the merger plan 

is an environment that is changing 

faster than had been anticipated. Four 

major factors are now affecting the 

overall balance in the television industry 

in France, especially the pay TV 

segment: 

• rapid developments in digital distribution 

technologies (ADSL, DTT, 

mobile TV, etc.) and the equally great 

rapidity with which they have been 

taken up by consumers; 

• the spread of free-to-view offerings, 

especially on DTT and ADSL, with 

operators offering bouquets of free 

channels; 

• the arrival of powerful new operators, 

especially telecom operators, 

internet service providers and multinational 

publishing and retail groups, 

compounded by a restructuring of 

the cable industry; 

• differences in the way different players 

are regulated (telecom operators 

are not subject to the same obligations 

as TV channels). 

Audiovisual rights 

The audiovisual rights division generated 

sales of €247.9 million in 2005 

(before stripping out inter-sector 

sales) and reported a 62.6% rise in 

operating profit to €22.6 million, representing 

an operating margin of 9.1%, 

3.2 points up on 2004. 

TF1 Vidéo’s contribution to Group sales 

fell back by 5.1% to €160.7 million. 

However, revenue surged in the second 

half of the year, rising by 24.6% 

after a 28.7% drop in the first half, 

on the back of a strong catalogue 

and the video release of Brice de Nice 

(over 900,000 units sold), Les Experts 

(Crime Scene Investigation – over 1 

million units sold) and comedian Gad 

Elmaleh’s most recent show (almost 

600,000 units sold). The operating 

profit in 2005 amounted to €16.8 million, 

giving an operating margin of 

Match Point, shown at 

the Cannes Film Festival 

10.5%, up by just over half a point. 

On 15 November 2005, TF1 Vidéo 

launched its video-on-demand service, 

tf1vision.fr. This new line of business, 

combined with the rapid growth of 

broadband internet in France, should 

help to increase TF1 Vidéo’s sales in 

2006. 

TF1 International, boosted by the boxoffice 

success of Brice de Nice (4.3 

million entries), Iznogoud (2.5 million), 

Le Dernier Trappeur (2.1 million), 

Aviator (1.7 million) and Match Point 

(1.5 million), increased its contribution 

to consolidated sales by 52.6% 

to €63.8 million (before stripping out 

inter-sector sales). TF1 International 

broke even in operating terms, having 

reported a €6.5 million loss in 2004. 

International channels 

Eurosport was received in 105.1 million 

homes in Europe by the end of 

2005, including 55.9 million paying 

subscribers (4.4 million more than at 

end-2004). 

The channel is now shown in 54 countries 

and in 19 languages. The strategy 

of showing either live or recorded 

major sporting events has paid off, 

since the number of paying subscribers 

is rising. 

Eurosport 2, launched on 10 January 

2005, is shown in seven languages 

(English, Polish, Turkish, Greek, French, 

Italian and Russian) in 37 countries 

and is received in 17.7 million homes, 

almost all of them paying subscribers. 

Eurosport International’s contribution 

to consolidated sales in 2005 

rose slightly to €258.8 million (before 

stripping out inter-sector sales). 

Subscriber revenue is rising due 

to the growing market for pay TV 

in Europe, the quality of Eurosport 

products (Eurosport, Eurosport 2, 

Eurosportnews) and the strength of 

the brand. 

Advertising revenue has fallen only 

slightly despite the lack in 2005 of 

major sporting events like the Olympic 

Games. This satisfactory performance 

is the result of products and services 

better adapted to advertisers’ require- 

36

ments and very good viewing figures. 

New activities, notably organisation of 

the World Touring Car Championship 

(FIA WTCC), have also contributed to 

sales growth. 

Eurosport International reported an 

operating profit of €29.9 million compared 

with €26.7 million in 2004, and 

improved its operating margin by just 

over one point to 11.6%. 

In December 2005, Italian affiliate 

Europa TV announced its intention 

to sell its frequencies to Mediaset in 

the context of the launch of the new 

DVB-H network. Provided that it 

obtains the necessary authorisations, 

Europa TV will sell Mediaset its infrastructure 

and frequencies, the latter 

being earmarked exclusively for 

Mediaset’s new DVB-H offering. Europa 

TV is controlled by Tarak Ben Ammar 

(71%) and the TF1 group (29%). 


On 10 June 2005, TF1 announced 

the disposal of its entire 80% stake 

in Visiowave to General Electric 

Infrastructure Security, a whollyowned 

subsidiary of General Electric. 

TF1 had acquired an initial stake in 

Visiowave in July 2000 and a controlling 

interest in November 2002. 

The disposal generated a capital gain 

of €14.2 million, booked as operating 

profit in TF1’s consolidated financial 

statements. 

Melissa Theuriau, LCI 

Eurosport is the organiser of the FIA World Touring Car Championship 


TF1 intends to continue to pursue growth 

in accordance with its strategy, which is: 

• to remain France's leading programme 

producer, 

• to develop Eurosport, 

• to create new formats for programmes 

and services, adapted to new technologies. 


37

MOBILE COMMUNICAT 

Bouygues Telecom offers its consumer and corporate 

customers a wide range of mobile phone services, 

including voice and data, through i-mode TM , 

and data transmission. 

the figures for 2004 should be adjusted 

for mobile-to-mobile sales that 

would have been billed if the system 

had been introduced on 1 January 

2004, equivalent to €761 million (at 

2004 call termination rates). 

Bouygues Telecom still has the best 

customer mix in the industry with 

68.4% of contract customers. It had 

18.2% of the total base of contract 

customers at year-end, compared with 

18% at the end of 2004. 

Highlights 

• December: Bouygues Telecom signed up its 

eight million th customer and announced its 

intention to appeal against the competition 

commission's decision to impose a €58 million 

fine for alleged collusion. 

• October: Philippe Montagner appointed 

Chairman and CEO; first experiments with 

mobile digital TV (DVB-H standard); launch of 

broadband i-mode for the general public; 

roll-out of the new Bouygues Telecom Club 

concept. 

• August: launch of the Emotion contract. 

• May: introduction of high-speed services for 

corporate customers using the Edge network 

(coverage: 85% of the population). 

• January: end of the “bill & keep” system 

and introduction of mobile-to-mobile billing 

between operators; launch of the Expression 

contract. 

Sales 2005 

€4,537m 

(+24%)* 

* +2% with mobile-to-mobile billing at 2004 rates 

EBITDA / Net sales from 

network: 31.8% 

(+3.3 points)* 

* with mobile-to-mobile billing in 2004 


€352m 

(+8%)* 

* +6% with mobile-to-mobile billing in 2004 

IFRS 

Employees 

7,300 


€4,580m 

(+1%) 

Bouygues Telecom moved into the 

broadband era in 2005. 

Its Edge network covers over 90% 

of the French population. It provides 

access to broadband i-mode, a comprehensive 

set of mobile multimedia 

services. 

Bouygues Telecom moved past the 

eight million customer mark in 2005. 

Solid performance 

in 2005 

Sales 

The broadband i-mode campaign 

Consolidated sales amounted to 

€4,537 million. For the first time in 

2005, mobile phone operators billed 

mobile-to-mobile call termination, 

generating an additional €665 million 

in sales for Bouygues Telecom. 

To measure the true increase in sales, 

Bouygues Telecom generated consolidated 

net sales from network of 

€4,240 million in 2005, a like-on-like 

increase of 3.6%. Handset sales and 

other items fell 11% to €297 million, 

most of the decline being mainly 

attributable to an exceptionally high 

level of handset sales in the first 

quarter of 2004. 

The customer base expanded significantly, 

the number of contract customers 

at year-end (including 

in the Caribbean) 

increasing by 12.6% 

to 5,563,000. 

The number of customers 

using prepaid 

SIM cards rose by a 

more moderate 1.5%. 

Altogether, Bouygues 

Telecom had 8,131 million 

customers at end-2005 

compared with 7,468 million 

a year earlier, an 

increase of 8.9%. 

Voice traffic fell by 25 minutes per 

customer per month to 263 minutes 

per month. As the fall stemmed almost 

entirely from unlimited contracts, and 

in particular from lower consumption 

of free airtime, it therefore had little 

impact on sales. 

The regulator imposed a 17.3% cut on 

Bouygues Telecom’s mobile call termination 

rates from 1 January 2005. 

The price cut and the growing proportion 

in the mix of mini-contracts which 

generate less income explain the 

reduction in average revenue per user 

(ARPU) from €47.8 per month in 

2004 (including mobileto-mobile 

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ION SERVICES 

> Launch of broadband i-mode services and a rise in profits in 2005 

billing at 2004 call termination rates) 

to €44.6 per month in 2005. 

An attractive loyalty programme and 

high-quality customer service helped 

to limit churn among contract customers 

to 1.3% in 2005. 

Results and financial situation 

Consolidated EBITDA in 2005 amounted 

to €1,349 million, equivalent to 

31.8% of net sales from network. 

Because mobile-to-mobile billing 

caused net sales from network to 

swell by €665 million, the EBITDA 

margin rate calculated on that basis 

is not directly comparable with the 

equivalent figure for previous years. 

Customer growth and cost controls 

caused a like-on-like improvement to 

the margin of 3.3 points in comparison 

with 2004. 

The current operating profit rose by 

10% to €656 million, while the operating 

profit amounted to €598 million 

after a €58 million charge for the fine 

imposed by the Competition Council 

for alleged collusion. 

The consolidated net profit amounted 

to €352 million, an increase of 6%. It 

would have been €410 million excluding 

the fine, an increase of 23.5%. 

Since 2002, cash flow has been sufficient 

to finance capital expenditure 

and reduce debt. Rollout of the Edge 

technology cost €240 million, spread 

over 2004 and 2005. Total gross 

Sales 

€bn 

3.7 

4.5 4.6 

Number of i-mode 

customers thousand 

1,400 


€m 

332 

352 

2004 2005 2006 (o.) 2004 2005 


500 

1,000 

Number of i-mode 

sites 

235 

2003 2004 2005 2003 2004 2005 

Market share by value 

(%) 

19.7 

18.9 

18.2 

300 

350 

Contract customers 

(%) 

68.4 

66.1 

64.4 

2003 2004 2005 2003 2004 2005 

IFRS 


ASSETS (€m - IFRS) 2004 2005 


• Tangible and intangible fixed assets 3,133 3,078 



NON-CURRENT ASSETS 3,573 3,295 

• Current assets 802 1,011 



CURRENT ASSETS 829 1,016 



• Shareholders’ equity attributable to the Group 1,783 2,132 

• Minority interests - - 

SHAREHOLDERS’ EQUITY 1,783 2,132 

• Long-term debt 1,187 434 


• Other non-current liabilities - - 

NON-CURRENT LIABILITIES 1,217 488 



• Short-term bank borrowings and overdrafts - - 




NET DEBT 1,197 441 


(€m - IFRS) 2004 2005 

SALES 3,666 4,537 





• Other financial income and expenses (7) - 


• Share of profits and losses of associates - - 





• Minority interests - - 



39

Appel gratuit depuis un fixe. 

customers and professionals a comprehensive 

range of broadband data 

contracts and universal text messaging. 

mobile talk plans offering unlimited 

calls to all fixed and mobile phones 

in France after the third minute, from 

8.00 p.m. until midnight; 

investment over the last few years 

has remained below €600 million. 

Bouygues Telecom reimbursed the 

outstanding amount of its shareholder 

loan, €621 million, in the first half of 

2005. To take advantage of low interest 

rates and obtain maximum flexibility, 

Bouygues Telecom concluded 

bilateral loan agreements with ten 

banks for a total of €725 million, 

with maturities of two, three and five 

years. At the same time the ceiling of 

the syndicated loan concluded in April 

2004 was steadily reduced and the 

facility itself was cancelled in advance 

in December 2005. Long-term debt 

amounted to €441 million at end-2005, 

compared with €1,197 million a year 

earlier. The debt-to-equity ratio at 31 

December 2005 was 0.21. 

Bouygues telecom 

products and services 

Corporate 

i-mode in the broadband era 

Bouygues Telecom opened its Edge 

network in May, offering corporate 

The services can be accessed from 

a laptop equipped with a high-speed 

digital card, from a digital personal 

assistant or from a smart phone. 

General Public 

Bouygues Telecom expanded its range 

of unlimited services in order to 

increase voice usage on mobiles: 

• special Expression contracts offering 

unlimited calls to fixed phones 

anywhere in France after 6.00 p.m. 

and at weekends; 

• special Emotion contracts, the first 

Bouygues Telecom S.A. au capital de 616 661 789,28 €. 397 480 930 RCS Nanterre. Siège social : Arcs de Seine, 20 quai du Point du Jour, 92100 Boulogne Billancourt. 

s o l u t i o n s p o u r l e s e n t r e p r i s e s 

www.entreprises.bouyguestelecom.fr 

0800 300 100 

un nouveau monde. le vôtre. 

ACCÉDEZ AU RÉSEAU NATIONAL 

HAUT DÉBIT 

• Bénéficiez d’une couverture nationale avec 

85% de la population couverte en EDGE. 

• Accédez pleinement et sans contrainte à votre 

bureau : mails et pièces jointes, agenda, intranet, 

internet, applications professionnelles... 

• Profitez de connexions rapides et de transferts 

de données haut débit avec un smartphone, un 

PDA ou un PC avec carte PCMCIA compatibles 

EDGE. 

Votre entreprise n’a plus de limites. 

EFFICACE, TOUT SIMPLEMENT 

• at Christmas, relaunch of special 

Expression contracts with a 90-minute 

initial offer and launch of a 

new, unlimited Nomad recharge card, 

offering 40 minutes of airtime and 

unlimited calls to all fixed phones 

and Bouygues Telecom mobiles from 

8.00 p.m. until midnight. 

In October, 


T e l e c o m 

b r o u g h t 

broadband within the reach of the 

general public with an innovative 

range of new i-mode services. 

Covering 90% of the population, they 

include unlimited free e-mails, instant 

messaging with MSN Messenger, television 

with TPS, music downloads and 

an enhanced i-mode portal. 

The first unlimited broadband i-mode 

contract was launched, priced at €9.90 

per month and two new Edge i-mode 

handsets from NEC and Samsung were 

proposed. 

Universal Mobile 

Universal Mobile has been a great success 

among young people, with over 

360,000 customers at end-2005. A 

prepaid card has enhanced the range 

since October. 

Success of TV over broadband i-mode 

Roll-out of 3G and pilot 

schemes 

Bouygues Telecom has taken various 

steps since 2003 to prepare its network 

for the arrival of third generation 

technology. Half its sites in Paris 

and the Paris region were ready for 

HSDPA equipment by the end of 2005. 

Since November 2005, Bouygues 

Telecom has been conducting tests 

of the HSDPA technology on an 

experimental network. The results of 

practical trials have confirmed the 

significant advance that HSDPA represents 

in relation to first-generation 

UMTS (R99). 

In 2006, Bouygues Telecom will continue 

to prepare base stations for 

HSDPA electronic equipment (core 

network and radio), for which purchasing 

agreements will be concluded 

in the first half of the year. 

Bouygues Telecom will conduct two 

trials in the first half of 2006: mobile 

TV (DVB-H) and a contactless application. 

Mobile TV is being tested with 200 

i-mode customers and five transmitters 

in Paris. The customers are 

offered a bouquet of ten regular 

channels, a special-event channel and 

related services. 

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The commercial launch of such a service 

will require regulatory changes, 

the allocation of frequencies and the 

definition of a business model. 

In partnership with RATP, the Paris 

public transport operator, Bouygues 

Telecom is trying out a handset with 

a contactless function for turnstile 

access to the underground system. 

Customers can recharge their Navigo 

account directly from their handset. 

If the trials are conclusive, other contactless 

applications may be developed, 

such as payment of parking 

charges, access control and identification. 

Subsidiaries 

Réseau Clubs Bouygues Telecom 

(RCBT) 

RCBT, the network of Bouygues 

Telecom stores, continued to expand, 

opening 36 new outlets in 2005, taking 

the total number to 479. RCBT 

tested a new modular store concept 

in 22 outlets during the year. Based on 

the principle of combining productivity 

with keeping close to customers, 

the concept will be rolled out in all 

Bouygues Telecom stores over the 

next three years. 

In order to boost its retail network, 

improve the delivery of know-how at 

points of sale and enhance customer 

service, RCBT has decided to create 

a branch network alongside its proprietary 

and associate stores; seven 

branches were in operation at the end 

of 2005. 

Stores account for 30% of new customers, 

48% of renewals and over 

80% of after-sales services. RCBT 

generated sales of €268 million 

in 2005. 

Téléciel 

Téléciel, a wholesale 

distributor 

of telecommunications 

products 

and services, 

coordinates a 

nationwide network 

of 1,700 

sales outlets of 

various kinds, 

supplying them 

with handsets 

and recharge 

cards. They include 

independent 

retailers specialising 

in mobile 

phones, national 

and regional store 

chains with a wider 

range of activities, 

internet retailers 

and mail-order 

companies and vendors of prepaid 

recharge cards. 

In mid-2005 Téléciel launched Phonéo, 

an umbrella brand that already has 

forty or so members. Phonéo is a 

nationwide network of independent 

retailers specialising in mobile telephony 

and multimedia. As Téléciel’s 

partners, they are entitled to various 

advantages while preserving their 

own identity and reputation. 

Téléciel reported a 

9% increase in 

sales in 2005 

to €103 million. 


Telecom 

Caraïbe 

(BTC) 

After five 

years, BTC 

has over 

1 6 0 , 0 0 0 

customers. 

It proposes 

p r o d u c t s 

suited to 

the local 

m a r k e t , 

f o c u s i n g 

on locked 

contracts in 

particular. 


Accessing the Edge network using a laptop 

The product range was simplified 

in 2005 and two new products were 

launched: Trace Mobile and Leader 

Price Mobile. Trace Mobile, launched 

in April in partnership with Trace 

TV, the leading music channel in the 

Caribbean, combines music and telephony 

on the Universal Mobile model 

and is intended primarily for young 

people. 

The product has increased BTC’s share 

of the youth market (most first-time 

customers are young people). 

Since the end of October, BTC has been 

marketing its prepaid “La Carte” offering 

through Leader Price, the leading 

discount store chain in the Caribbean 

visited by 85% of households at least 

once a month. BTC reported sales of 

€117 million in 2005. 


41

10 December 2004 imposing an initial 

17.3% cut in Bouygues Telecom’s 

wholesale price for call termination on 

its network (16.3% for its competitors) 

and scrapping the “bill and keep” system 

with effect from 1 January 2005. 

The decision imposed a further 24% 

cut in all three operators’ prices from 

1 January 2006. 

Regulatory environment 

Competition 

The French competition commission 

(Conseil de la concurrence) fined the 

three mobile phone operators, Orange 

France, SFR and Bouygues Telecom, for 

two types of alleged concerted practice 

which would have restricted competition 

on the mobile phone market. 

The alleged practices were exchanging 

information about new subscriptions 

and cancellations, and engaging 

in behaviour that would effectively 

lock in their market share. Bouygues 

Telecom was fined €16 million on the 

first count and €42 million on the 

second. The competition commission’s 

decision was immediately enforceable. 

Bouygues Telecom paid €58 million on 

29 December 2005. It has lodged an 

appeal against the decision with the 

Paris Appeal Court. 

Call termination on mobile 

networks 

Arcep, the French telecommunications 

regulator, issued a decision on 

In negotiations on a further cut to 

be applied from 1 January 2007, 

Bouygues Telecom will emphasise the 

need to maintain a difference between 

its call termination rates and those of 

its competitors on the grounds that 

cost differences justify asymmetrical 

regulation. 

Wholesale market for access to 

and call origination on mobile 

networks 

In mid-April, Arcep informed the 

European Commission of a draft decision 

under which the three mobile 

operators would be required to accede 

to reasonable requests for network 

access from MVNOs (mobile virtual 

network operators). 

As the European Commission was 

minded to veto the proposal, Arcep 

withdrew its draft decision pending 

reassessment of its market analysis. 

It proposed to monitor the market 

until the end of 2006 in order to see 

whether the contracts concluded by 

MVNOs with Orange and SFR enabled 

them to intervene on the market in a 

significant manner. 

Cut in wholesale prices for SMS 

At the end of October, Arcep invited 

comments on its analysis of the wholesale 

SMS market, which it proposed to 

classify as a new relevant market, 

each of the three mobile operators 

being deemed to exercise significant 

market power. 

The obligations envisaged by Arcep 

include an initial ceiling of 2.5 euro 

cents per SMS, with no distinction 

being made between the three operators. 

Bouygues Telecom challenged the 

decision, arguing that Arcep’s classification 

of the service as a relevant 

market is entirely artificial and 

that it applies existing regulations to 

the market. Furthermore, Bouygues 

Telecom had already referred the 

The “Club Bouygues Telecom” network includes close to 500 stores 

issue of wholesale prices for SMS call 

termination to the regulator in July 

2005 because it had been unable to 

reach an agreement with its two competitors 

on a cut to 2.5 euro cents. 

In an arbitration issued on 8 November, 

Arcep ultimately opted for a cut of 

approximately 20%, from 5.33 cents 

to 4.3 cents, retroactive from 1 July 

2005. Bouygues Telecom applied the 

measure and informed Orange and 

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SFR of its new price. 

UMTS licence 

In accordance with the terms of 

its licence, in early 2005 Bouygues 

Telecom submitted a report as part 

of the procedure to verify compliance 

with its UMTS network rollout 

obligations two years after award of 

the licence. 

After reviewing technological developments 

since 2002 and noting that the 

market for broadband mobile services 

had got off to a sluggish start everywhere, 

Bouygues Telecom set out its 

strategic choices for broadband: 

• rollout from 2005, covering at least 

90% of the population with the Edge 

technology, offering comparable 

performance to the current version 

of UMTS; 

• introduction of UMTS in the much 

more effective HSDPA version, with 

coverage of 20% of the population 

by the time the network is opened 

in 2007. 

In its decision of 20 May 2005, 

the regulator amended the timetable 

of Bouygues Telecom's 

rollout obligations, allowing it 

the same 28-month extension as 

its competitors. Consequently, 

Bouygues Telecom will have until 

30 April 2007 to offer UMTS services 

providing coverage of 20% of the 

population. 

Consumer affairs 

On 27 September 2005, with Arcep, 

the Industry Minister organised a 

round table bringing together network 

operators, industry associations and 

consumer groups to discuss 

consumer demands 

relating to telephone 

and 

i n t e r n e t 

services. 

A number of measures 

were introduced 

as a result 

of the meeting, 

intended 

to improve the 

transparency of 

product and service 

offerings, contractual 

conditions, commercial 

practices 

and dispute settlement 

procedures. 

The following decisions were also 

taken: 

• one-stop 10-day mobile number portability 

must be in place by the 

beginning of 2007; 

• time spent on hold at call centres 

must be free of charge; 

• cancellation times must be cut to 

one month and deposits must be 

refunded within ten days; 

• contracts must not exceed twelve 

months, whatever the type of service. 

A number of regulations putting these 

decisions into effect are expected. 



Bouygues Telecom aims to expand its 

customer base by emphasising innovative 

products and the quality and variety 

of broadband i-mode services. 

Partnerships in specific segments, on 

the Universal Mobile model, may expand 

the range. 

The tied retail network will be strengthened; 

stores will gradually be refurbished 

to offer customers a better 

welcome. 

Bouygues Telecom will ensure continuous 

improvement in processes at 

Customer Relations Centres to maintain 

the high level of service quality. 

The 24% cut in call termination rates 

imposed by the regulator from 1 January 

2006 will have a significant impact on 

sales growth. 

Net sales from network are expected to 

rise by 1% to €4,280 million and total 

consolidated sales to €4,580 million. 


43

BOUYGUES SA 

The parent company of an industrial group, Bouygues SA is entirely dedicated 

to the development of the Group’s businesses. It is the place where decisions 

are taken that determine the Group’s activities and the allocation of its financial 

resources. Bouygues SA also provides the Group as a whole with a range 

of services. 

Sales 2005 

€64m 

(-6%) 


€(23)m 

(-23%) 


€261m 

(-55%) 

IFRS 

Employees 

185 

Plan for Bouygues SA’s new headquarters at Avenue Hoche, Paris 

A number of important events 

occurred in 2005. 

Exceptional payout and 

increase in ordinary 

dividend 

An exceptional payout of €5 per 

share was made to shareholders on 7 

January 2005, generating a total outflow 

of €1.7 billion. The Annual General 

Meeting on 28 April 2005 also decided 

to increase the ordinary dividend by 

50% to €0.75 per share, compared 

with €0.50 in 2004. 

Disposal of Saur 

The disposal of Saur to PAI partners 

was finally concluded on 15 February 

2005 after the competition authorities 

had approved the transaction. 

Under the terms of the agreements 

with PAI partners, Bouygues took a 

15% stake in Novasaur, the company 

formed by PAI partners to acquire 

Saur. In April 2005, Bouygues sold 

5% of Novasaur. The operations sold 

to PAI partners did not include Saur’s 

African and Italian subsidiaries, which 

were taken over by Finagestion, a 

wholly-owned Bouygues subsidiary. 

Finagestion sold its interests in Italy 

and Mali in 2005. The contract with 

Compagnie Ivoirienne d’Electricité was 

renewed. Finagestion breaks even. 

Stake in Bouygues 

Telecom 

BNP Paribas sought to enhance the 

liquidity of its 6.5% stake in Bouygues 

Telecom. Bouygues therefore granted 

BNP Paribas a put, exercisable at any 

time between 1 September 2005 and 31 

July 2007, at a price of between €477 

million and €495 million depending 

on the date of exercise. In return, BNP 

Paribas granted Bouygues a call exercisable 

from 1 to 30 September 2007 

at the price of €497 million. If the 

aggregate amount of dividends paid 

by Bouygues Telecom to BNP Paribas 

exceeds €4.6 million, the amount 

of dividends will be deducted from 

the prices given above. The effect of 

the agreement, booked on 30 June 

2005, was to increase the amount of 

Bouygues’ debt at year-end by €460 

million. In return, Bouygues was able 

to consolidate 89.5% of Bouygues 

Telecom’s results. 

Motorway privatisation 

In July 2005, the French govern- 

ment issued an invitation to tender 

for state holdings in three motorway 

companies. Bouygues decided not to 

submit a bid for the acquisition of 

one of the companies even though 

its investment capacity would have 

allowed it to complete such a transaction 

without affecting its credit rating. 

However, as the infrastructure 

is already in place, the rationale for 

making such a bid would have been 

essentially financial, which does not 

44

Bond issue 

On 22 July 2005, Bouygues SA 

launched a €750 million bond issue. 

The bonds were issued at a fixed rate 

of 4.25% per annum and will mature 

on 22 July 2020. 

subsidiaries as follows: 

Bouygues Construction: €49,977,360 

Bouygues Immobilier: €44,010,000 

Colas: €104,473,857 

TF1: €59,180,267 

Other: €3,053,644 

correspond to Bouygues’ vocation as 

an entrepreneur. The Group preferred 

to preserve its resources so that it can 

invest in other projects better suited 

to its development strategy. 

Employee share 

ownership 

At the end of 2005, Bouygues SA 

carried out a €250 million capital 

increase reserved for Group employees. 

9,972,331 new shares were created 

for a corporate savings plan entitled 

Bouygues Confiance 3. The dilution 

resulting from the capital increase 

was limited by the cancellation of an 

initial 1,048,873 shares, followed by 

a further 7,312,776 shares, acquired 

by Bouygues under its buy-back programme. 

The estimated €30 million 

benefit to employees was booked as 

personnel costs at 30 June 2005. For 

accounting purposes, shareholders’ 

equity was increased by the same 

amount to offset the reduction in 

profit. 

Services rendered 

to subsidiaries 

As well as being responsible for the 

overall management of the Group, 

Bouygues SA provides a range of general 

and expert services to Group 

businesses in areas such as finance, 

communication, new technologies, 

insurance, legal affairs, human 

resources, etc. For that purpose, 

Bouygues SA concludes annual agreements 

with its operating divisions 

under which it invoices them for services 

rendered. 

Management 

Bouygues SA pays particular attention 

to Group management, taking steps 

to encourage exchanges between 

support structures and line divisions, 

maximise the benefit of accumulated 

experience, provide leadership and 

develop team spirit within the Group. 

Financial flows 

In 2005, Bouygues SA received dividends 

totalling €260,695,128 from its 

There are no significant flows of funds 

between Group subsidiaries. Cash 

management is centralised within 

financial subsidiaries wholly owned 

by Bouygues SA. This arrangement 

ensures optimum management of 

financial expenses, since the surplus 

cash generated by certain companies 

can be used in addition to or in place 

of confirmed lines of credit granted 

by credit institutions to other subsidiaries. 


45

RECENT EVENTS SINCE 1 JANUARY 2006 

Park Hyatt Paris-Vendôme hotel. The 

luxury hotel, redeveloped by Bouygues 

Immobilier, was recently ranked 

Europe’s best and number two in the 

world by the magazine Institutional 

Investor. 

TF1 


On 5 January 2006, Bouygues 

Construction announced that its 

subsidiary Dragages Hong Kong was 

starting to operate AsiaWorld Expo, 

the international exhibition centre it 

had previously built. The centre has 

70,000 m 2 of exhibition space, including 

a large multi-purpose arena with a 

seating capacity of 13,500. Over thirty 

international exhibitions are already 

scheduled for 2006, generating sales 

four times higher than forecast. 

AsiaWorld Expo, Hong-Kong 

was planning to recruit over 7,000 

employees in 2006, including 3,000 in 

France, 20% more than in 2005. 


Bouygues Immobilier has won the 

competition to redevelop the Berge 

du Lac district of Bordeaux. On a 

30-hectare (75-acre) site, it will build 

1,550 housing units, schools, a gym 

and amenities for local services. 

40,000 m 2 of parkland will enhance 

the new neighbourhood’s appeal. 

On 6 January 2006, TF1, Vivendi 

Universal and M6 signed the agreement 

merging Canal+ and TPS 

announced on 16 December 2005. On 

17 February 2006, Vivendi Universal 

announced a planned agreement with 

Lagardère under which Canal+ would 

own 65% of the new entity, Lagardère 

20%, TF1 9.9% and M6 5.1%. 

In early 2006, Société Générale sold 

its 1.4% stake in TF1 on the market. The 

disposal ends the shareholder agreement 

between Bouygues and Société 

Générale. 


On 1 March 2006, Bouygues Telecom 

launched two new unlimited contracts, 

Neo and Exprima. With the Neo contract, 

customers can make unlimited 

calls to all fixed and mobile phones in 

metropolitan France every day after 

8.00 p.m. They can also make calls to 

other countries in Europe and to North 

America at the same price as a call 

within France included in the contract. 

With the Exprima contract, customers 

can make unlimited calls to all fixed 

phones in metropolitan France every 

day after 8.00 p.m. 

Bouygues Telecom and TF1 have decided 

to conclude a licence agreement 

under which they will be able to propose 

an innovative voice and services 

offering in 2006 called TF1 Mobile. 

Bouygues SA 

In February 2006, the €750 million 

15-year bond issue launched in July 

2005 was raised to €1 billion under the 

same conditions. 

On 23 January 2006, Bouygues 

Construction also announced that it 

On 28 February 2006, Bouygues 

Immobilier sold its 40% stake in the 

La Berge du lac, Bordeaux 

46

Sustainable 

development 


in the Group 48 



Colas 66 

TF1 74 


Risks 92

SUSTAINABLE DEVELO 


division 

Bouygues has already taken many 

steps to limit the impact of its activities 

on the environment, improve working 

conditions for staff and involve its 

partners in actions for progress. The 

aim now is to step up those efforts, 

rationalise them and measure their 

effects. A new organisation has been 

put in place to achieve that aim. 

Olivier Bouygues, one of the two 

Deputy CEOs, has been given the task 

of coordinating the Group’s sustainable 

development policy. A sustainable 

development division has been 

created in order to help business units 

share best practices, raise awareness 

among employees and provide training, 

and assist and advise sustainable 

development liaison staff. It also 

represents the Group to the outside 

world. 

A committee made up of representatives 

from the five business areas 

and Bouygues SA met for the first 

time in November 2005. Two or three 

times a year, its members will consider 

sustainable development issues 

and the action taken in each business. 

The committee will also review posi- 

Sustainable development is a response to the expectations of our customers 

and staff. In 2005, the Group chose to increase, rationalise and formalise its 

efforts in that direction. A new sustainable development division has been 

created to coordinate Group strategy, with liaison units in each business area. 

However, because the Group’s subsidiaries face specific challenges, they have 

their own policies for matters relating to social and environmental responsibility. 

Definition 

Sustainable development is an integral 

part of the Bouygues group’s 

strategy. In accordance with its culture 

and values, Bouygues is committed 

to serving its customers while 

assuming its social and environmental 

responsibilities. Applying the principle 

of continuous improvement and taking 

proactive and innovative measures, 

the strategies and processes 

of Bouygues group entities take 

account of environmental protection, 

the conservation of natural resources, 

improvements to living conditions, the 

sharing of experience, use of the best 

technologies, dialogue with stakeholders 

and their involvement in decisions 

that concern them. 

In this context the role of Bouygues SA, 

the parent company, is to provide help 

and advice to all Group businesses as 

they work to serve their customers 

and provide them with relevant, highquality 

goods and services at the best 

cost, while taking care to preserve the 

interests of future generations. 

48

PMENT IN THE GROUP 

Our culture is rooted in respect for 

people and for their environment. 

An integral part of our long-term vision, 

it is expressed in the choices of a 

responsible entrepreneur. Martin Bouygues 

“ 

” 

tive and negative feedback relating to 

Bouygues and its sustainable development 

policy. Committee members, 

reporting directly to divisional CEOs, 

will also be expected to put forward 

proposals for consideration by the 

relevant executive committees. 

A Quality Safety Environment (QSE) 

committee made up of QSE managers 

from each business holds parallel 

meetings to discuss measures introduced 

within the Group to analyse and 

prevent risk and consider appropriate 

management methods. 

Support services (human resources, 

purchasing, IT, legal affairs) also consider 

how to take practical account 

of sustainable development in their 

activities. The Human Resources committee, 

for example, is looking at discrimination 

issues. 

The work of the sustainable development 

division and the committees is 

explained in detail in corporate communication 

media available within the 

Bouygues group and its subsidiaries, 

The Group’s values 

People are our greatest resource. 

Customers are the reason for the company’s existence and satisfying them is 

our only goal. 

Quality is the key to competitiveness. 

Creativity enables us to offer our customers original, practical solutions at the 

best cost. 

Technical innovation, which improves the cost and efficiency of our products, 

underpins our success. 

Respect for oneself, for others and for the environment inspires our everyday 

behaviour. 

Promotion is based on individual merit. 

Training gives our people the means to extend their knowledge and enhance 

their professional life. 

Young people, and their potential, will forge the company’s future. 

Challenge drives progress. To stay a leader, we must act like a challenger. 

Attitude is more powerful than technical and economic strength alone. 

for example Le Minorange, Bouygues’ 

in-house magazine with a circulation 

of 50,000, Challenger Express, a bimonthly 

newsletter for the Group’s 

3,500 senior executives, and businessspecific 

intranets. 

Ethics and respect 

The Bouygues Management Institute, 

created in 1999, provides training and 

information to the Group’s top 500 

executives, and acts as a discussion 

forum. Its aim is to unite managers 

in a common commitment to shared 

values. Various events have been 

organised on the subject of ethics 

and respect. 

Every month, 18 executives are invited 

to attend a seminar on “Developing 

Bouygues’ Values”. The seminar tells 

them about the Group’s approach 

to ethics and helps them to draw 

up their own strategy for ethical 

action. It is also an opportunity for 

Martin Bouygues to answer managers’ 

questions on the subject directly. 

431 high-level executives have taken 

part in the seminar since 2002. 

The “Respect and Performance” seminar, 

launched in 2005, is designed to 

raise managers’ awareness of respect, 

a core Bouygues value, and what it 

entails on a daily basis. The purpose 

of the seminar is to develop a style of 

management conducive to exchanges 

and teamwork. 288 people have taken 

part in the seminar since it was created, 

including 60 high-level executives. 

The aim is for 1,500 employees, 

including 210 senior managers, to 

have attended one of the seminars by 

the end of 2006. 

A new “Social and Environmental 

Responsibility” seminar will be 

launched in 2006. At each one-day 

session, a group of 12 to 15 managers 

will be able to discuss social and 

SUSTAINABLE DEVELOPMENT 

49

SUSTAINABLE DEVELOPMENT IN 

Minorange guild workers 

which helps students for two years, and 

the Georges Besse Foundation, which 

supports future engineers, though 

the Francis Bouygues Foundation supports 

its beneficiaries for longer and 

does not impose any particular type 

of course. Bouygues’ first groupwide 

charitable sponsorship initiative, it 

complements the schemes operated 

independently by Bouygues SA and 

the five businesses. 

Africa since the company was sold 

to PAI, an investment fund, in 2004. 

Several actions relating to social and 

environmental responsibility have 

been carried out. In Côte d'Ivoire, CIE 

(Compagnie Ivoirienne d’Electricité) 

set up an in-house AIDS committee 

in 1991 to combat the spread of the 

disease. A partnership has been established 

with the Ivorian government’s 

National AIDS Programme and the 

department of infectious and tropical 

environmental issues and best 

practices. Entertaining and interactive 

content will be used to introduce 

participants to the complexities of 

sustainable development and to the 

conditions for integrating it into company 

procedures. 

an organisation’s strengths and areas 

to be improved. Over 30 Abby exercises 

have already been organised 

within the Group. A new, more interactive 

version of the application will be 

introduced in 2006 to facilitate the 

definition of actions for progress. 

The Minorange Guild 

The Bouygues group’s growth is rooted 

in a strong culture that has always 

put people first. It is built on founding 

principles like teamwork, the assumption 

of responsibility and respect. The 

Minorange Guild is the embodiment of 

these convictions. 

Two Group companies (Bouygues Telecom and Colas) participate in the UN’s Global Compact, an initiative set up in 1999 

to support 10 principles of best practice. Bouygues Immobilier is due to sign up in 2006. 

The 10 principles of the Global Compact 

Human Rights 

Businesses should: 

1 support and respect the protection of internationally proclaimed human rights in 

their sphere of influence; 

2 make sure that they are not complicit in human rights abuses. 

A single performance 

assessment tool 

In 2002, Bouygues SA introduced a 

self-assessment application called 

Abby which enables managers, using 

an anonymous voting system, to 

measure themselves against management 

practices defined by the EFQM 

(European Foundation for Quality 

Management) model. It covers the 

main aspects that contribute to sustainable 

economic, social, societal and 

environmental performance according 

to several distinct criteria. This selfassessment 

exercise helps to identify 

The Francis Bouygues 

Foundation 

The Francis Bouygues Foundation was 

created in 2005 to help deserving 

high-school graduates to continue 

their higher education. Each beneficiary 

has a mentor from Bouygues and 

receives a bursary of between €1,500 

and €8,000 a year for four to six 

years. 17 students were chosen in 

2005, and 30 or so beneficiaries will 

subsequently be designated each 

year. The options and methods of 

the Francis Bouygues Foundation have 

been inspired by the Euris Foundation, 

Created by Francis Bouygues in 1963 

to recognise achievement in the 

construction trades, it now has 906 

members in 17 orders. On-site, guild 

workers promote the values of compliance 

with safety rules and best 

practice, work well done, fraternity 

and loyalty to the company. At Colas, 

the “Compagnons de la Route” guild is 

based on the same values. 

Activities in Africa 

Finagestion, a Bouygues subsidiary, 

has taken over Saur’s activities in 

Labour 

Businesses should uphold: 

3 freedom of association and the effective recognition of the right 

to collective bargaining; 

4 the elimination of all forms of forced and compulsory labour; 

5 the effective abolition of child labour; 

6 the elimination of discrimination in respect of employment and occupation. 

Environment 

Businesses should: 

7 support a precautionary approach to environmental challenges; 

8 undertake initiatives to promote greater environmental responsibility; 

9 encourage the development and diffusion of environmentally friendly technologies. 

Anti-Corruption 

10 Businesses should work against all forms of corruption, including extortion and 

bribery. 

50

THE GROUP 

diseases at the Treichville teaching 

hospital in Abidjan. 

Under the terms of the partnership, 

sick employees nationwide are monitored 

free of charge and provided 

with anti-retroviral drugs. In Senegal, 

in January 2005 SDE (Sénégalaise des 

Eaux) signed a corporate HIV charter 

under which the company undertakes 

to inform employees about anonymous 

testing and to organise information 

meetings about HIV/AIDS. 

Bouygues SA’s new 

headquarters 

From design to delivery, Bouygues 

SA’s new headquarters at 32, avenue 

Hoche in Paris is being built according 

to HEQ (High Environmental Quality) 

principles, which involve meeting 14 

targets in various areas such as insulation, 

waste management, choice of 

materials, etc. The new building has 

scored “fair” on two criteria, “good” 

on nine and “excellent” on three. For 

example, the design provides for 400 

sq. m. of landscaping and a plant wall, 

regulation of the ventilation according 

to the number of people in the 

building, large bay-windows to provide 

plenty of natural light and the use of 

absorbent materials (fitted carpets, 

false ceilings, etc.) to improve sound 

insulation. 

Employee share ownership 

Almost 25,000 employees subscribed 

to Bouygues Confiance 3, a capital 

increase reserved for the employees 

of Bouygues’ French companies. It 

was the third scheme of this type 

after Bouygues Confiance in 1999 

and Bouygues Confiance 2 in 2001. A 

corporate savings plan with matching 

contributions from Bouygues, 

launched in 1990, is still available to 

employees, who now own 13.3% of 

Bouygues’ share capital and 17.5% of 

the voting rights. This makes them 

Bouygues’ second largest shareholder 

group, and Bouygues the leading 

French company in the CAC 40 index 

in terms of employee share ownership. 

With the aim of further improving 

the Group’s social policy, since the 

beginning of 2006 Bouygues has also 

offered employees a supplementary 

pension savings scheme under which 

the company makes matching contributions 

ranging from 50% to 20% of 

amounts paid in, up to a maximum of 

€1,000 a year. 

Measures against 

discrimination 

In consultation with the High Authority 

for the Fight against Discrimination 

and for Equality (HALDE) chaired by 

Louis Schweitzer, Bouygues businesses 

are seeking practical ways of doing 

more to combat any form of discrimination 

within the Group. 

Sporting Association 

The ASM (Association Sportive du 

Minorange) was created in 1969 with 

the aim of increasing well-being and 

team spirit among employees. It now 

has over 1,000 members in 21 sections, 

a 40% increase in membership over 

the last five years. 

900 employees from throughout the 

Group took part in a wide range of 

sporting events in 2005, including 

running and skiing competitions, the 

Colas Golf Cup and a 24-hour go-kart 

race. 

Professional status 

54% 

27% 

19% 

Average age in France: 39 

TF1 

6% 

Site workers 

Clerical and 

technical 

Managerial 

39 40 41 


Telecom 

10% 

Colas 

44% 


Construction 


Immobilier 

Colas 

115,441 employees (at 31/12/2005) 

In France 

96.8% 

of staff on 

permanent 

contracts 

3.2% 

on fixed-term 

contracts 

38 39 

TF1 

33 


Telecom 

Group 


Construction 

38% 


Immobilier 

2% 

Proportion of women by business 

area in France 

52% 

49% 48% 

13% 

8,000 employees recruited in France in 2005 

36% 

> 30 

years 

old 

64% 

< 30 

years 

old 

8% 


Construction 


Immobilier 

Colas 

TF1 

18% 


Telecom 

Group 

Average length of service in 

France: 10 years 

11 11 

10 

10 

9 


Construction 


Immobilier 

Colas 

45% 

29% 

26% 

TF1 

Site workers 

Clerical and 

technical 

Managerial 

5 


Telecom 

Group 

23% 

77% 

Fixed-term 

contracts 

Permanent contracts 


51

BOUYGUES CONSTRUCTION 

EDITORIAL 

THE CHALLENGES FACING BOUYGUES CONSTRUCTION 

by Yves Gabriel, Chairman and CEO 

It is fundamentally important for a company like ours to reconcile the demands 

of financial profitability in our growth model with the social, societal and environmental 

impacts of our activities. The fact that Bouygues Construction builds 

infrastructure, facilities, amenities and dwellings that leave a lasting 

mark on our living environment means that sustainable development 

is central to our strategy. 

The challenges we face 

Our activity has major environmental impacts. We clearly have 

a contribution to make to limiting the consumption of natural 

resources and energy, and hence to the fight against global 

warming. We also have a duty to keep nuisance from our 

construction sites to a minimum and to ensure 

that our works blend into their 

environment. 

Because working conditions in our business 

sometimes raise safety and stress-related 

issues, we have to not only ensure our workers’ 

health and safety but also offer them 

training and career development opportunities. 

In addition, as an international firm, 

we aim to help raise social standards in our 

industry in the countries where we operate. 

Creating value 

I am convinced that Bouygues Construction has an important role to play in 

all these areas. Our commitment to sustainable development, which is valid 

for the long term, creates value for Bouygues Construction and for all our 

stakeholders. 

By limiting the consumption of raw materials and the disposal of waste and 

by improving the energy efficiency of our buildings, we cut costs both for 

ourselves and for our customers. The demands of the environment and society 

stimulate our capacity for innovation and cause us to see our activity in 

a new light. Our commitment also contributes to risk prevention, and hence 

to the preservation of our image. 

We also create value through our capacity to fulfil the expectations of all our 

stakeholders. Our staff, our customers, our financial partners and 

society as a whole are increasingly sensitive to ethical concerns 

and preservation of the environment. 

Taking a structured approach 

Many of our initiatives, from the framing of an integrated 

Quality Safety Environment policy to solidarity actions, are 

designed to address these issues. 

In addition to such initiatives, I have decided to 

structure our approach throughout all Bouygues 

Construction’s businesses by integrating it fully into 

our development strategy. Senior management will 

define a common core of requirements in 2006 

which will then be implemented in each entity in 

the form of operational targets. The attitude 

expressed in our corporate slogan “Building 

solutions for a demanding world” will 

never have been truer. 

The major 

challenges facing 


The major challenges we face derive 

from the specific features of our businesses 

and the countries in which we 

operate. 

■ Social and societal issues 

Workplace health and safety 

The construction industry is exposed 

to the risk of accidents. In France, for 

example, the risk of death is three 

times higher than the average for 

other industries. But workplace accidents 

are not inevitable. Our objective 

at Bouygues Construction is to seek to 

eliminate accidents altogether, among 

both our permanent and temporary 

staff. 

Training and the use of apprenticeship 

as a means of entry into 

employment 

Skill levels in our businesses are rising 

steadily due to growing demands 

for quality and safety and the use of 

increasingly sophisticated equipment. 

It is vital for Bouygues Construction to 

implement ambitious training policies 

to ensure that its workers continue to 

be employable. 

The construction industry, currently 

creating a large number of jobs, is 

also well-placed to help young people 

without employment or in social diffi- 

52

culty to enter the labour market, especially 

through apprenticeships, which 

are used extensively in our entities. 

Helping to raise social standards 

We sometimes operate in countries 

where social standards are much 

lower than in OECD countries. 

We have an opportunity to help raise 

those standards by applying our 

human resources policies to local 

staff. 

■ Environmental challenges 

Blending our worksites and 

projects into their environment 

Local residents and associations and 

local authorities are highly sensitive 

to site nuisances, such as noise, waste, 

visual pollution and repercussions on 

ecosystems, which directly affect the 

firm’s image. 

To limit them, Bouygues Construction 

takes measures ranging from selfplacing 

concrete to work schedules 

adapted to suit the needs of the 

neighbourhood. 

Global warming 

Bouygues Construction contributes 

to the fight against global warming 

by limiting carbon dioxide emissions, 

using plant that is more fuel-efficient 

or uses alternative fuels and 

constructing buildings that consume 

less energy. 

Uncoupling growth from the 

consumption of resources 

The depletion of natural resources is 

a major challenge for our businesses, 

which consume considerable amounts 

of raw materials like aggregates and 

gypsum and processed products like 

steel and cement. 

To preserve these resources, we seek 

sourcing solutions that take such factors 

into account, including proximity 

to sites and the quality of local 

resources. In addition, in response 

to European and French policies for 

reducing landfill waste disposal, we 

will have to invest in recycling and 

handle the possible dismantling of 

some of our constructions. 

Our action in the 

economic sphere 

Our activities create large numbers 

of jobs, both directly and indirectly 

through our sub-contractors, who 

account for almost half our output. 

We have therefore chosen to illustrate 

our economic responsibility from the 

standpoint of employment. 

■ A major contribution to 

employment 

At end-December 2005, Bouygues 

Construction’s businesses represented 

38,500 direct jobs. In France, over 

95% of employees are on permanent 

employment contracts. Bouygues 

Construction expects to fill 7,250 posts 

throughout the world in 2006. 3,000 

people will be recruited in France, 

20% more than in 2005, creating a 

total of 1,000 net jobs. 

Bouygues Construction contributes to 

the development of the countries in 

which it operates through a proactive 

policy of employing local site workers 

and managers. Some subsidiaries, 

like Dragages Hong Kong, Dragages 

Singapore and Bouygues Thai, have 

only a handful of expatriates in a 

workforce of several hundred employees. 

■ Even-handed relations 

with sub-contractors 

We pay particular attention to the 

quality of partnerships with our subcontractors 

in order to integrate them 

into our actions for progress, such 

as method plans, risk analysis and 

procedures. 

For example, the PIST (Sub-Contractor 

Partnership and Engineering) project 

launched in 2005 by the residential 

housing division of Bouygues 

Bâtiment Ile-de-France is designed to 

promote engineering in sub-contracted 

packages. Partner sub-contractors 

join company staff in study groups 

to define processes for each trade 

with the aim of improving productivity, 

safety and quality. 

In 2006, Bouygues Construction will 

continue the company-wide process 

of involving its partners, whether subcontractors 

or suppliers, in its QSE 

planning. 

■ Continuous progress 

In Vision & Performance, a corporate 

plan launched at the end of 2002, 

Bouygues Construction embarked on a 

continuous progress approach, involving 

actions such as increased on-site 

productivity, common purchasing for 

almost all group entities, knowledgesharing, 

R&D and innovation. 

In addition to the benefits to the firm 

and its customers, the purchasing policy 

contributes to efforts to preserve 

the environment, in particular by 

seeking to reduce fuel consumption. 

The purchasing department has also 

cooperated closely with the occupational 

health service on the choice of 

products used by employees, leading 

for example to resin adhesives being 

dropped from the approved list. 

This approach complements the quality 

plans implemented in our subsidiaries, 

which increasingly integrate 

the extended firm concept, including 

sub-contractors and suppliers in our 

actions for progress. Crowning these 

efforts, operational units generating 

94% of our sales have been awarded 

ISO 9001 certification. 


53


Our action in the social 

and societal sphere 

The attention paid by Bouygues 

Construction to its employees and to 

local residents is fundamental to our 

policy of social and environmental 

responsibility. 

■ Paying attention to 

employees 

Our long-term success is founded on 

the know-how, skills and mindset of 

our staff. 

Integrating employees 

Bouygues Construction values apprenticeship 

as an essential factor of integration. 

Young people attending the 

Gustave Eiffel apprentice training centre, 

created by Bouygues Construction 

in 1997, are able to obtain a vocational 

qualification endorsed by a diploma. 

Apprentices are trained jointly by an 

Enhancing training 

apprentice master and staff at the 

Centre. 

135 young people in training served 

their apprenticeships in Bouygues 

Construction companies in 2005. We 

gave a commitment to enhancing the 

scheme by signing a charter with the 

public authorities in November 2005, 

and many agreements exist with specific 

structures. 300 apprentices are 

currently in training in our French 

subsidiaries. 

Bouygues Construction also recruits 

vigorously from elite universities, 

specialist institutes and vocational 

high schools, organising forums, conferences 

and other events like the 

Bouygues Construction Challenge. The 

firm offered 1,524 internships and 50 

voluntary overseas placements to students 

in 2005. As a matter of policy, it 

is in favour of subsequently offering 

interns a position. 

Outside France, priority is given to 

integrating local staff and tracking 

their careers in order to enhance their 

value to the company and entrust 

them with managerial responsibilities 

as appropriate. 

Increasing employability 

Our human resources policy aims to 

make staff increasingly employable 

as they work in the firm, by increasing 

their skills and ensuring appropriate 

career management. Various career 

options have been introduced to put 

flesh on the bones of this policy, in 

areas such as support services, project 

management, etc. Three aspects 

illustrate the policy: training, mobility 

and the Minorange Guild. 

Training 

Bouygues Construction spent €21.6 

million on training in France in 2005, 

representing 3.67% of the total payroll. 

Entities offer staff both general 

training and vocational courses to 

support their professional development, 

such as managerial courses, the 

“Sales Campus” for salespeople and 

“springboard” courses for supervisory 

staff. 

One of the distinctive features of our 

approach to training is the mentoring 

of newly recruited site workers, practised 

in most structures. Mentors help 

young people to define their professional 

ambitions and play an essential 

role in passing on knowledge. 

Mobility 

Geographical and career mobility has 

always been one of the main pillars of 

our human resources policy, fostered 

by complementarities and synergies 

between Bouygues Construction entities 

and within the Bouygues group 

as a whole. Staff need to be properly 

informed if they are to take advantage 

of the opportunities for mobility, 

and information is provided by human 

resources managers, divisional managers 

and specific intranet tools. 

331 employees of Bouygues Entreprises 

France-Europe, representing 4.5% of 

the workforce, were able to benefit 

from mobility opportunities in 2005. 

Minorange Guild 

The Minorange Guild, created by 

Francis Bouygues in 1963, currently 

has almost 900 members (out of 

8,500 site workers in France) and aims 

to recognise the best site workers, 

exemplary in their transmission of 

knowledge to young people, safety, 

fraternity, solidarity and respect onsite. 

Guild members must meet these 

exacting requirements on a daily basis 

and continued membership can never 

be taken for granted. Another aim of 

the Minorange Guild is to involve site 

workers in the conduct of the business 

and open up a direct channel 

for dialogue with senior management. 

The guild has inspired similar organisations 

in other countries, such as the 

Atlas Guild in Morocco, the Dragon 

Mentoring at Pertuy 

Construction 

Volunteer mentors (professionals 

acknowledged by their fellowworkers) 

agree to develop their 

teaching faculties with the aim 

of welcoming, training, informing 

and guiding young people in the 

firm. They attend a 28-hour training 

course, dispensed in two 2-day 

sessions. 33 mentors from Pertuy 

Construction have been trained 

in two years to follow up the 

twice-yearly intake of young site 

workers hired on skill formation 

contracts. 

Guild in Hong Kong and the Maestros 

de la Construcción created in Cuba 

in 2005. 

Health and safety 

The accident rate at Bouygues 

Construction is now five times lower 

than the average for the construction 

industry in France (permanent 

and temporary staff alike), though 

this achievement should not stop us 

from being vigilant at all times (see 

diagram p.59). 

Encouraging results 

Comprehensive health and safety 

management has enabled Bouygues 

Construction to maintain its performance 

levels and confirm its lead- 

54

ing position in this area. While the 

accident frequency rate remained 

stable in 2005 at 11.5, the severity 

rate improved to 0.5, compared with 

an average frequency rate for the 

construction industry in France of 56 

and a severity rate of 3.24 (1) . 

Efforts in 2005 focused on reducing 

the number of accidents suffered by 

temporary staff, resulting in an 18% 

reduction in the frequency rate for 

that category. Training and pre-selection 

are now compulsory when temporary 

staff are recruited. 

Several awards have hailed Bouygues 

Construction’s achievements in the 

realm of safety: 

• Bouygues Travaux Publics won a Gold 

Award for the LDB 201 project in Hong 

Kong in a safety competition organised 

by the Labour Department; 

• Dragages Singapore was awarded 

the best safety performance by the 

Labour Department for the Savannah 

Park Condominium; 

• Quille, a subsidiary of Bouygues 

Entreprises France-Europe, came 

second in a national safety competition 

for general contractors in 

France in the safety and management 

implementation category; 

• DTP Terrassement won an award for 

a safety film in the safety competition 

organised by the Fédération 

Nationale des Travaux Publics. 

Greater emphasis on prevention 

Bouygues Construction established 

a Prevention, Health and Safety 

Committee in 2000. It helps to define 

broad guidelines relating to the overall 

management of workplace health 

and safety. Consisting of QSE officers 

from across the group, the committee 

meets quarterly to share experiences 

and best practices. 

Best practices include: 

• information (posters, intranet, video), 

Safety training on a worksite in Asia 

awareness and training actions on all 

sites, including “toolbox” meetings 

on sites outside France and regular 

health and safety meetings with site 

workers on sites in France; 

• an ergonomic approach to workstations. 

Managerial and supervisory 

staff at Bouygues Travaux Publics 

have been involved in analysing risks 

connected with workstations, including 

ergonomics. In 2005, in order 

to reduce the risk of accidents, GFC 

Construction and DV Construction 

commissioned psycho-ergonomists 

to analyse how site workers perceive 

safety messages and put them into 

practice; 

• vigilance with regard to the use of 

high-risk products, through systematic 

identification, a ban on dangerous 

products and recommendations 

for products that pose a health risk. 

Bouygues Bâtiment Ile-de-France, for 

example, has banned certain form oils; 

Innovation at the service 

of safety 

By sharing experience and 

research, DTP Terrassement, 

Bouygues Travaux Publics and the 

Plant consortium have been able 

to explore technical options for 

reducing the number of accidents 

linked to the difficulties of driving 

earth-moving machinery, especially 

in reverse. The innovation 

consists in coupling an ultrasound 

radar detection system with a 

video camera. When the radar 

detects an obstacle, an audio signal 

alerts the driver, who can then 

view the obstacle on screen. 

• road safety campaigns, like the one 

organised by Bouygues Entreprises 

France-Europe to increase employee 

awareness of the need to comply 

with the rules of the road, using 

videoconferences, driving courses for 

those involved in repeat accidents, 

breathalysers and the installation of 

cruise control devices; 

• targeted health initiatives. Sogec, an 

ETDE subsidiary in Côte d’Ivoire, has 

created an AIDS committee to combat 

a scourge that affects 10% of 

the country’s population. Amongst 

other measures, the committee carries 

out information campaigns for 

employees. 

(1) Data from the Caisse Nationale d’Assurance Maladie des Travailleurs Salariés (CNAMTS)- 2003 


55


Ongoing process of OHSAS 18001 

certification 

22% of Bouygues Construction’s 

operational units had obtained OHSAS 

18001 certification by end-2005 (58% 

of sales was thus generated by certified 

entities) compared with 14% in 

2004 like-on-like. The proportion is 

expected to rise to 30% within two 

years. 

Favouring entry into the workforce 

and fighting discrimination 

Our entities have carried out a number 

of initiatives to encourage employment 

and combat discrimination. 

• In 2005, DTP Terrassement renewed 

its partnership with the Ile-de-France 

regional council and several public 

job-seeker and training organisations 

to enable 25 young people to 

train as plant drivers and mechanics. 

24 were offered jobs and 22 were 

hired. 

ETDE focuses on integrating its equipment into the environment 

• On the Tahiti hospital site, ETDE 

took on 44 trainees on sandwich 

courses provided in partnership with 

local professionals and job-seeker 

and training organisations. The 

trainees obtained their diplomas in 

November 2005 and 30 of them have 

since joined ETDE permanently. 

• Helping disabled people to find 

employment, Bouygues Bâtiment Ilede-France 

is a partner of a guide 

published by the Secretary of State 

for the Disabled that provides information 

and advice on how ordinary 

people should behave towards 

people with disabilities. The firm is 

carrying out an initiative to raise 

awareness of the issue among staff. 

• In 2005, GFC Construction signed 

a diversity charter with the city of 

Lyon and a local non-profit organisation 

that aims to favour diversity 

through recruitment and career 

management. 

■ Paying attention to local 

residents and communities 

Our action during the design and construction 

of a project is based on three 

priorities: consultation, minimum site 

nuisances and communication. 

Consultation with local communities 

Consultation procedures in France 

are laid down by law and Bouygues 

Construction complies with all its 

statutory requirements. However, initiatives 

are taken on the ground that 

go well beyond what the laws and 

regulations require. 

• Over 90 meetings were held over 

a six-month period in the different 

communities affected by the route of 

the A28 motorway stretch between 

Rouen and Alençon. 

• A process for dialogue with all 

local residents was launched when 

the housing division of Bouygues 

Bâtiment Ile-de-France embarked on 

a housing project in Saint-Cloud. A 

site installation plan was drawn up 

jointly to take into account aspects 

such as school hours, access, cleaning, 

parking, etc. 

• In countries where regulations 

on consultation do not exist, voluntary 

initiatives are taken. When 

a motorway was built in Jamaica, 

fishermen’s dwellings were moved 

rather than simply demolished, as 

the initial plan had called for. 

Keeping site nuisances to 

a minimum 

The company systematically seeks to 

keep site nuisances like noise, dust 

and traffic to a minimum through 

measures such as an environmental 

checklist and site installation plan, 

and software to model noise propagation 

so as to keep plant noise down. 

Noise levels were reduced to 70 dB 

within a radius of 50 metres of the site 

during the construction of a motorway 

in Jamaica. 

Communication with local residents 

during construction work 

Our companies make every effort to 

communicate with local residents 

A28 motorway, France 

and maintain good relations during 

construction work. Measures that 

are becoming increasingly widely 

used include freephone numbers for 

recording calls from local residents 

and sound nuisance impact studies for 

sensitive sites in urban environments. 

Reducing noise 

On the “Villa du Lac” site 

at Divonne-les-Bains, GFC 

Construction (Bouygues 

Entreprises France-Europe) eliminated 

the noise resulting from the 

use of vibrating needles by using 

self-placing concrete that does 

not need to be vibrated. 

56

Bouygues Bâtiment Ile-de-France, for 

example, sets up a system on all sites 

for keeping abreast of local residents’ 

expectations and demands. The system 

includes a site telephone number, 

a freephone number and a complaints 

book. 

■ Community action and 

sponsorship 

Our companies carried out numerous 

operations to show their solidarity 

with communities in difficulty, in many 

cases linked to our businesses and our 

projects. 

Our action in the 

environmental sphere 

We are stepping up our environmental 

policy in order to limit environmental 

impacts throughout the entire lifecycle 

of our projects. A number of initiatives 

along those lines have already 

been taken. 

■ Design 

Our approach is to favour the development 

of ecological alternatives at the 

design stage in order to reduce the 

environmental impact of our projects 

during construction and operation. 

A genuine capacity for innovation 

and R&D 

As part of its Research & Development 

programme, Bouygues Construction 

is exploring several avenues around 

the theme of sustainable construction. 

They include using an intranet 

site to share environmental knowledge 

within the group, innovation in 

thermal, energy-conscious engineering 

and analysis of the regulatory and 

certification context. Research is also 

being done to optimise the overall 

• In the context of a road-building project 

in Cameroon, DTP Terrassement 

provided a school to accommodate 

300 children from villages around 

the Ngai Toukoulou life base. 

• After the ravages of the tsunami in 

Asia, Bouygues Thai rebuilt a new 

school for 400 pupils at Baan Nam 

Khen, co-financed by Bouygues 

Construction, in a record nine 

months. The school comprises 24 

class-rooms and a new multi-purpose 

building. 

• ETDE embarked on a solidarity sponsorship 

programme in 2005 and 

selected a project which involves 

installing six solar- and wind-powered 

systems to provide electricity to 

schools and hospitals on Nicaragua’s 

Caribbean coast, a region where 80% 

of the population is without power. 

Mother and Child hospital, Kabul 

• The Mother and Child hospital in 

Kabul, financed by Bouygues and 

public donations, was delivered on 

16 February 2005. Designed and built 

by Bouygues Bâtiment International, 

the hospital with its up-to-the-minute 

facilities is the only one of its 

kind in Afghanistan. 

In addition to these operations 

rooted in our businesses, Bouygues 

Construction is also involved in preserving 

the cultural heritage and 

has become a sponsor of the Louvre 

Museum. It is funding the refurbishment 

and installation of galleries 

housing the museum’s collection of 

Near Eastern artefacts from the Late 

Antiquities period. 

Baan Nam Khen’s new school, Thailand 


57


Street-lighting system in Lille (France) 

cost of our operations during the 

construction and maintenance phase, 

including the environmental dimension. 

Technical guides have been 

prepared for the purpose in three 

sectors, namely hospitals, prisons and 

motorways. 

We are also taking part in research 

programmes in partnership with 

other firms in the industry to help 

improve the environmental performance 

of our constructions. For 

example, with Rhodia and Lafarge we 

have developed Ductal ® , a type of 

concrete which enables savings to 

be made on materials for equivalent 

functional characteristics. Bouygues 

Entreprises France-Europe is taking 

part in Revival (Retrofitting for 

Environmental Viability Improvement 

of Valued Architectural Landmarks), 

a European research project seeking 

to limit greenhouse gas emissions in 

the building sector. The group is an 

active member of the “Business and 

Sustainable Construction” committee, 

which brings together a dozen large 

firms with the aim of improving their 

knowledge and practices in that area. 

Our capacity for innovation is also 

reflected in the ecological alternatives 

we offer our customers. For the port 

of Tangier, Bouygues Travaux Publics 

offered an ecological alternative that 

reduced the quantity of materials by 

using a breakwater made up of precast 

concrete caissons rather than a 

traditional solution using rubble and 

rockfill, thus keeping the encroachment 

on the marine environment to 

a minimum. 

HEQ expertise 

Bouygues Construction, through 

a number of its subsidiaries, has 

acquired expertise in the HEQ (High 

Environmental Quality) approach, the 

aim of which is to design and build 

healthy and comfortable buildings 

that consume little energy. Elan offers 

technical assistance in HEQ both to 

clients and to construction firms. 

Limiting impacts on the 

environment 

We make sure that specific features 

of natural environments are taken 

into account at the design stage of 

our projects. On the A28 project, for 

example, trees that provide a habitat 

for the hermit beetle were moved, 

while on the A41 motorway project 

a special crossing was built to preserve 

the habitat of the white-clawed 

crayfish. 

We also attach great importance to 

analysing residents’ lifestyles when 

tendering for contracts. ETDE won a 

street-lighting contract with the city 

of Lille partly because it had given 

consideration to the way local inhabitants 

live (by providing special lighting 

in small yards between houses where 

people tend to congregate) and was 

able to offer them a real improvement. 

■ Construction 

Environmental site management 

based on strong QSE ® principles 

In the first quarter of 2005, Bouygues 

Construction defined a common core 

of QSE ® (Quality, Safety Environment) 

requirements, now implemented in the 

entities. They include the preparation 

of a plan, designed to encourage 

staff to integrate the QSE ® dimension 

throughout the project lifecycle, from 

sales to works. 

As part of the QSE ® approach, 

Bouygues Bâtiment International is 

developing a matrix of environmental 

actions, designed to define minimum 

environmental standards to be met 

everywhere in the world. 

Activities generating 36% of Bouygues 

Construction’s sales had been award- 

QSE-compliant project at Divonne-les-Bains 

58

Private Construction 

QSE ® plans 

The Private Construction division 

of Bouygues Bâtiment Ile-de- 

France draws up a QSE ® plan 

for each of its sites and for its 

agencies, covering three main 

principles: energy saving, waste 

management and neighbourhood 

relations. AFAQ, the French quality 

certification body, has recognised 

the approach as being pragmatic, 

practical and economical and has 

encouraged the company to continue 

its efforts. 

Site workers 

Clerical 

& technical 

Managerial 

Total number of employees 

at 31 December 2005 

38,500 

of which 18,800 

in France (49%) 

Breakdown by 

professional status 

37,699 38,449 38,477 

23,021 

22,147 

21,122 

7,951 8,993 9,550 

6,727 7,309 7,805 

2003 2004 2005 

Average age: 

39 

Average length 

of service: 

11 years 

Breakdown by type 

of contract in France (%) 

4.9 4.3 4.8 

95.1 95.7 95.2 

2003 2004 2005 

Fixed-term 

Permanent 

ed ISO 14001 certification at end-2005, 

a proportion which is expected to 

double over the next two years. 

Clean sites 

In France, as at many of our sites elsewhere, 

steps to improve installations 

and equipment are taken with the aim 

of reducing waste and pollution risks. 

They include: 

• retention tanks for the storage of 

pollutants, 

• settling tanks for water used to wash 

out concrete mixers, 

• spraying water to prevent dust 

clouds, 

• provision of a catalogue describing 

the environmental impacts of plant 

and equipment. 

Simone Veil school at Asnières (Paris region), managed by Exprimm 

Raising environmental awareness 

To ensure that these measures are 

properly implemented, Bouygues 

Construction trains site supervisors and 

workers in the everyday reflexes needed 

to protect the environment, through 

guides, handbooks, environment kits 

and specific training courses. 

■ Lifecycle issues 

Improving the ways in which our constructions 

are used and managing the 

end of their lifetime are two important 

aspects of our sustainable development 

policy in the future. 

Our facilities and concession management 

activities mean that we have 

to look for innovative solutions to 

minimise the environmental impact 

and maximise the benefit to society 

of our projects while they are in 

operation, whatever our contractual 

commitments. For example, Exprimm 

has developed an environmental procedure 

for the facilities it manages 

which focuses on reducing energy 

and paper consumption, sorting and 

recycling waste. 

Women 

Men 

Breakdown by sex 

in France (%) 

12.6 12.8 13.3 

87.4 87.2 86.7 

2003 2004 2005 

Accident frequency 

rate (France) 

11.90 

11.80 11.50 

2003 2004 2005 

Recruitment by status 

(France) 

2,064 2,134 

2,988 

1,314 

993 962 

734 

627 552 

940 

444 620 

2003 2004 2005 

Accident severity 

rate (France) 

0.70 

0.52 0.50 

2003 2004 2005 

Site workers 

Clerical 

& technical 

Managerial 


59

BOUYGUES IMMOBILIER 

EDITORIAL 

THE CHALLENGES FACING BOUYGUES IMMOBILIER 

par François Bertière, Chairman and CEO 

Respect for the environment is an intrinsic part of Bouygues Immobilier’s 

business. In many communities we help to requalify land, for example when 

we redevelop a derelict industrial site or an inner city area. More than just 

housing, offices and shops, we aim to build our customers a genuine living 

environment. 

We have organised ourselves to anticipate future risks. Before each operation, 

we take particular care to analyse the soil and the environmental 

impact of our developments. The establishment of a new Research and 

Development department will also help us to come up with innovative and 

environmentally friendly solutions. We passed an important milestone two 

years ago when we started implementing our “AgirVert ® ” (Act 

Green) environmental scheme in a number of projects. The 

scheme prefigures the “Habitat and Environment” and “High 

Environmental Quality” certifications for residential and 

commercial developments respectively. 

As a contracting entity we play an important role in 

the social aspects of community life, since we give 

work to many players in the economy. We aim to 

optimise relations with our partners, for example 

by applying common purchasing policies. In 2005, 

we introduced quality-based referencing for subcontractors. 

Our long-term future also depends 

on integrating our employees into the company 

and securing their loyalty. 

As creators of living spaces, our mission is to provide businesses, people, 

and public and private services with the buildings that suit their needs. 

Our aim is to help make towns and cities more human. It is therefore our 

responsibility to offer products for all categories of customer. As well as 

working on developments that are more easily accessible to first-time 

buyers we are also anticipating the needs of future senior citizens, seeking 

the best-suited solutions. 

Since we listen to our customers, we are also attentive to all the stakeholders 

in every one of our projects, engaging in permanent consultation 

with elected officials, public bodies, local associations and residents. 

Our duty towards them, and towards our staff and 

shareholders, is to secure Bouygues Immobilier’s 

growth and long-term future while respecting 

our values. We seek to combine financial performance 

with respect for business ethics by 

keeping the risks involved in our activities under 

strict control. 

Reflecting this ongoing commitment, we shall 

soon be signing up to the United Nations Global 

Compact. More than just an instrument for development, 

it is also a source of progress for the 

firm. By drawing up a road map, we 

will set our action in the context 

of a comprehensive sustainable 

development policy. It must 

express our exacting demands 

for innovation and architectural 

quality. Our new logo and our 

new slogan are good illustrations 

of that strategy. 

Our business 

■ Key figures 

Bouygues Immobilier has 10 regional 

divisions in France and 1,026 employees 

at 32 sites located in the Paris 

region, the rest of France and Europe, 

covering 80 cities. Over 100 staff are 

employed in seven agencies in five 

countries outside France. 

■ At the service of our 

customers 

As a property developer, Bouygues 

Immobilier’s business is to design, 

build and sell housing, office, leisure 

and commercial property. 

We acquire the necessary sites and 

carry out operations for our customers. 

Our ambition is to participate in 

the development of towns and cities 

and make them more human. 

Quality and certification 

Attentive to its customers at all times, 

Bouygues Immobilier organises, measures 

and assesses their satisfaction. 

Each year we carry out telephone 

surveys of our call centre’s activity 

and a survey of programme operations. 

In 2005, customer satisfaction 

levels rose to 72%. These criteria are 

taken into account when determining 

the performance-related part of 

regional managers’ pay. Concerned 

to ensure that its buildings are prop- 

60

erly constructed, supervised, tested 

and accepted, Bouygues Immobilier 

entrusts the work to construction professionals. 

Our design offices ensure 

compliance with construction industry 

regulations, verified on-site by 

approved inspectors. 

Bouygues Immobilier was awarded 

ISO 9001 certification in 1996, the first 

French property developer to achieve 

that distinction. The certification covers 

all the company’s operations in 

France, Spain and Poland. 

The practical benefit of this quality 

policy could be seen in an 8.5% reduction 

in insurance premiums in 2005. 

Following a two-year audit, the insurance 

company AGF concluded that 

our operations were well-managed 

in terms of the quality of construction 

and of partner firms, resulting 

in a fall in the number of reserves on 

delivery. 

A culture of innovation 

Ensuring customer satisfaction means 

constant innovation. That is why, in 

September 2005, we created an R&D 

department under the aegis of the 

central development division. It monitors 

societal and technological trends 

to help us achieve the best possible 

designs for tomorrow’s buildings. 

Priorities include the launch, under a 

partnership, of a product for first-time 

home buyers. The “€100,000 house” 

initiative is part of a government 

scheme designed to make it easier 

for those hitherto excluded from the 

housing market to buy a first home. 

It is also perfectly natural that 

Bouygues Immobilier should take 

steps to make its buildings adaptable. 

That is why we are already giving 

thought to housing suited to older 

people. 

■ Sustainable building 

Our buildings last for a long time. 

We are aware of their environmental 

impact. That is why, in addition to the 

architecture, we also systematically 

carry out environmental studies when 

presenting the policy of a development 

project. 

Ground temperature 12°C 

Evacuation of air 

We work on a daily basis with leading 

architects like Christian de 

Portzamparc and the American firm 

Arquitecnica, top design firms specialising 

in the environment like Tribu, 

and other experts, acoustical engineers 

and planners. They help us to 

build with new materials that reduce 

noise pollution and cut energy bills. 

Our business is subject to strict planning 

and building regulations. As well 

as complying with such regulations, 

Bouygues Immobilier is keen to step 

up safety and conservation measures. 

The local context is always taken into 

account in our projects, as is the 

environment into which a development 

will be integrated. Bouygues 

Optimising energy consumption 

SUMMER 

Air cooled at 2-3°C 

Fresh air 

Canadian 

well 

Immobilier ensures that this approach 

is backed up by dialogue with elected 

officials, local residents and all the 

stakeholders in a project. 

With the aim of meeting its customers’ 

needs as fully as possible, Bouygues 

Immobilier takes account of the future 

use of the sites it builds or refurbishes. 

Thus, it undertakes to optimise the 

acoustics and energy consumption of 

completed projects. 

For example, a 44-unit apartment 

block at Obernai in Alsace was built 

according to bio-climatic design principles, 

using solar panels to produce 

hot water, a wood-fired boiler, a vegetated 

roof, rainwater run-off into the 

soil and external insulation. At Magnyles-Hameaux, 

outside Paris, 35 houses 

have been awarded “Habitat and 

Environment” certification as a result 

of the integration of solar panels that 

provide 30% of the development’s 

energy needs and earth-connecting 

ventilation. 

Bouygues Immobilier has embarked 

on several commercial and housing 

programmes that meet various 

“High Environmental Quality” (HEQ) 

criteria, such as rainwater recovery, 

solar water-heaters, renewable energy 

sources, solar panels, waste sorting 

and reduction of site nuisances, under 

the terms of an environmental charter 

with the municipality concerned. 

Bouygues Immobilier is at the leading 

edge of HEQ in projects like the 

Mozart development (87,000 sq. m. of 

office space at Issy-les-Moulineaux), 

on which the firm has joined forces 

with Arup Sustainable Design. 

For its housing programmes, in 2005 

Bouygues Immobilier continued 

its AgirVert ® scheme introduced in 

2004. The scheme, a guide listing best 

environmental practices structured 

around eight key themes, is intended 

to ensure a comprehensive overview 

of the various ecological impacts of a 

building based on HEQ principles. The 

eight themes, which in French form 

the acronym AgirVert ® , are: 

• developing the site, 

• managing rainwater, 

• integrating control of consumption 

and charges (energy, water, coownership), 

• identifying materials that meet environmental 

requirements, 

• ensuring the comfort and health of 

future occupants, 

• insisting on a clean site, 

• providing future buyers with information, 

• keeping promises. 

16 projects in most of our divisions 

have already commenced under the 

AgirVert ® scheme. 

Objectives for 2006 

• To continue to anticipate environmental 

construction regulations. 

• To further extend H&E and HEQ certification. 


61


Terrasses Belvédère development, Cergy (Paris region) 

Dialogue with 

stakeholders 

As a committed economic partner of 

local social life, Bouygues Immobilier 

aims to enhance the environment and 

improve the space in which people 

live and work. Because its activities 

are central to citizens’ concerns, 

they touch many different categories 

of people. Whether with our main 

partners, sub-contractors, customers, 

employees, shareholders, public 

authorities, civil society organisations, 

local residents, non-profit organisations 

or the media, establishing the 

right conditions for dialogue is an 

integral part of our approach. 

For each programme, we engage in 

permanent consultation with elected 

officials, public bodies, local associations 

and residents, even if their 

different demands are sometimes 

difficult to reconcile. Issues such as 

above-ground parking facilities and 

landscaping, restrictions on neighbourhood 

nuisances, amenities for 

visitors, cycle paths and access paths 

for persons with reduced mobility are 

all discussed at meetings, conferences 

and press briefings. 

■ Partner firms 

Through its partners and sub-contractors, 

Bouygues Immobilier’s business 

indirectly generates 30,000 jobs. 

When co-ordinating partners, contractors, 

public authorities, design 

firms and other players, Bouygues 

Immobilier is committed to respecting 

social and environmental best practice. 

In 2005, the firm introduced a purchasing 

policy under which contractors are 

referenced according to quality and 

reliability criteria. The scheme, covering 

five trades to date, provides a basis 

for creating partnerships and helping 

partners to make progress through 

action plans for improvement. By signing 

our Corporate Project Promise, 

sub-contractors commit to best practices. 

In return, we guarantee them a 

bonus if they do not exceed a certain 

number of reserves per construction. 

■ Architects 

Bouygues Immobilier uses nationally 

and internationally renowned architects 

for its programmes, such as 

Jean-Jacques Ory, Jean-Paul Viguier, 

Jean-Loup Roubert, Christian Devillers, 

Henri Gaudin and Jean-Michel 

Wilmotte, all people with acknowledged 

planning expertise. Each of 

their designs includes a landscaping 

element contributed by experienced 

professionals. 

When sites are classified, regular consultations 

take place with architects 

from the French heritage agency to 

adapt building designs to the requirements 

of architectural protection. 

■ Civil society 

Bouygues Immobilier makes considerable 

efforts to communicate with 

the public and to explain its projects, 

carrying out information campaigns 

using hoardings, temporary sales 

booths and public meetings at which 

local associations and residents can 

put their point of view. The firm is 

highly attentive to any questions and 

objections brought to its attention, 

such as when elected officials or residents 

raise the question of creating 

cycle paths or particular amenities. 

In 2005, for example, Bouygues 

Immobilier worked with an association 

that had objected to a project in 

Bourg-la-Reine with the aim of preventing 

the felling of a century-old beech 

tree. Bouygues Immobilier presented 

a new block plan to the city council. 

Now, despite some delay, the 22 housing 

units are under construction and 

the project has been named “Copper 

Beech” after the tree. 

■ Local authorities 

Whether in urban rehabilitation projects 

or applications for construction 

permits, well upstream of the project 

Bouygues Immobilier works closely 

with mayors, elected officials and a 

range of public authorities. Many projects 

are possible only because the firm 

goes beyond statutory requirements 

in a number of areas and takes steps 

to meet municipalities’ specific expectations. 

Senior managers also sit on a 

large number of construction industry 

commissions and bodies, for example 

the City of Paris and the Fédération 

des Promoteurs Constructeurs. 

Objectives for 2006: 

• to scale local initiatives and partnerships 

up to national level; 

• to ensure the general implementation 

of best practices; 

• to develop architectural innovation. 

Challenges of our 

business 

The impacts and challenges of 

Bouygues Immobilier’s business fall 

into two categories. The first shows 

how the firm contributes to sustainable 

building, the second highlights 

its responsibility to society and the 

environment. 

■ Mobilising our staff 

Creating jobs 

Operating in a buoyant market, 

Bouygues Immobilier creates jobs. In 

2005, growth in our housing business 

led to the creation of three new agencies 

in Lorient, Amiens and Grenoble 

and an increase in the size of our 

62

teams. The workforce increased by 

21% and, allowing for natural turnover, 

266 new employees were taken on. 

Only 11 of the company’s employees 

are on temporary contracts. 

Attentive to the needs of young graduates, 

Bouygues Immobilier offers a 

number of paid internships. 18 of the 

students who spent time training at 

Bouygues Immobilier in 2005 were 

offered permanent jobs. Mentoring 

and tutoring schemes have been 

encouraged to help young people on 

the first rungs of the professional 

ladder. New employees are offered 

mentors with whom they have no 

hierarchical relationship in order to 

favour their integration into the firm 

and their personal development. The 

mentors guide their charges, above all 

through an induction day and two integration 

sessions at which Bouygues 

Immobilier’s values and organisation 

are presented. On these occasions, 

the CEO in person sets out the firm’s 

ethical rules and answers questions 

from newcomers. The policy also 

applies to new employees elsewhere 

in Europe. In 2005, for example, three 

Polish staff members spent several 

months in Paris soaking up the technical 

know-how and skills of their more 

experienced colleagues. 

Encouraging diversity 

The gender balance among Bouygues 

Immobilier’s employees is 52% male, 

48% female. Although the firm does 

not employ many handicapped people 

at present, it is looking at ways of 

improving the situation. It also has a 

policy of enabling older employees 

to continue working longer, while the 

mentoring scheme for new employees 

helps to ensure that knowledge is 

passed on. One member of the Human 

Resources staff has been specifically 

asked to study the question of older 

workers and ensuring that the right 

conditions for employing them are 

in place. 

Developing skills and careers 

Bouygues Immobilier has introduced 

effective arrangements for developing 

its employees’ careers and providing 

them with continuous training. 

A systematic approach to the identification 

and development of key skills 

was introduced in 2005. At once participatory, 

strategic and forward-looking, 

it aims to identify the key factors 

for successful performance in every 

position. A new annual assessment 

form has been produced, based on 

needs and skill levels. In use since 

January 2006, its more finely graduated 

skills matrices allow for more 

detailed and personalised assessment. 

Better targeted training can then help 

individual employees to improve their 

performance. 

As an international group, Bouygues 

Immobilier offers possibilities for 

mobility and career development to 

those employees who wish to take 

advantage of them while also encouraging 

the employment of local staff. 

The systems we have in place enable 

those seeking mobility to change their 

job, place of work or structure, including 

within the Bouygues group as 

a whole. Our mobility code ensures 

that everyone is informed of vacant 

positions, giving them regular opportunities 

to express their wishes on 

the subject and offering them support 

tailored to their personal situation. 

Bouygues Immobilier spent 3.18% of 

its payroll on training in 2005. 13,764 

hours of training were dispensed to 

705 employees (69% of the workforce), 

representing an average of 

19.5 hours per employee. 1,501 training 

courses were taken. 

In order to meet new expectations, 

the Human Resources division has 

reorganised its training policy, putting 

the emphasis on the transmission 

of know-how and the sharing 

of knowledge within the firm. The 

training courses offered by Bouygues 

Immobilier University are now organised 

into four families: 

• Integration: 2 courses for newcomers 

• Professional skills: 48 courses covering 

the full range of our activities 

• Work skills: 8 courses to optimise 

working methods and attitudes to 

work 

• Computer skills: 16 courses designed 

to improve computer literacy 

Some of the courses, such as those 

on the environment, energy and heat 

or facilities for persons with reduced 

mobility, go beyond our statutory 

obligations, anticipating changes in 

the law and putting our employees 

at the leading edge of information in 

these areas. 

Pay and labour relations 

Pay scales are structured in such a way 

that they can be tailored to individuals 

while enabling all employees to share 

in the company’s success. There are 

three elements to the system: 

• a fixed salary equivalent to 14.3 

months; 

• a performance-related element for 

120 employees, based on concrete 

and measurable targets. This element 

may represent up to 4 months’ 

salary; 

• a profit-sharing scheme for all 

employees, which may represent up 

to one month’s salary, capped at 

€3,000 to favour the lower paid. 

A total of €1.5 million was available 

for profit-sharing in 2004, payable to 

employees in 2005, giving an average 

bonus of €1,830 per person. 

The quality of labour relations is 

a constant concern for the Human 

Resources division. The works council 

represents all the firm’s local enti- 


63


ties in France. 14 commissions met in 

2005 to better identify the conditions 

in which employees work, considering 

matters such as profit-sharing, 

vocational training and gender equality. 

Four company-wide agreements 

were concluded with the two trade 

union organisations represented in 

Bouygues Immobilier: 

• a supplement to the profit-sharing 

agreement, 

• an agreement on the exceptional 

release of profit-sharing bonuses, 

• an annual agreement on salaries, 

conditions and hours, 

• an agreement on individual entitlement 

to training. 

The vigilance of all staff and of the 

Health and Safety Committee contributed 

greatly to an improvement in 

the accident frequency and severity 

rate. Only four accidents occurred in 

2005, and no working days were lost 

as a result. 

■ Keeping environmental 

impacts under control 

Involvement in rehabilitation 

In order to reduce nuisance and pollution 

from building sites, Bouygues 

Immobilier includes a construction 

waste recycling obligation in the 

specifications it provides to partner 

firms. 

Bouygues Immobilier regularly carries 

out operations on former industrial 

sites or derelict land which it first 

cleans up, thus helping to improve the 

environment. 

Pollution control and prevention 

In 2005, for the first time, Bouygues 

Immobilier experienced a major pollution 

incident on a site at Amiens. 

Although pollution control measures 

had been taken before construction 

started, the discovery of much more 

extensive pollution than had been 

originally identified meant that twenty 

houses had to be demolished so that 

the site could be completely cleaned 

up. The incident caused the company 

a severe financial loss and a one-year 

delay in delivering the houses. But 

Bouygues Immobilier put its customers’ 

long-term interests first, explaining 

the situation to them and treating 

each case individually with regard to 

matters such as compensation and 

alternative housing. As a result of this 

transparency, no requests were made 

for sales to be rescinded. 

Following the incident, Bouygues 

Immobilier has stepped up its risk 

prevention measures by systematically 

engaging consultants whenever 

it takes an interest in a site. If the 

consultants’ report raises questions, a 

more detailed examination is requested 

and the consultants are asked to 

draw up a comprehensive site cleanup 

programme, fully optimised in 

technical, financial and environmental 

terms. 

Optimising resources 

Although Bouygues Immobilier’s business 

does not produce more waste than 

any other administrative operation, 

it constantly endeavours to reduce 

waste production. Videoconferencing 

is increasingly widely used so as to 

cut the need for travel, limiting emissions 

of polluting gases caused by 

transport and reducing the risk of 

accidents as well as being cheaper 

and quicker. 

Environmental improvements to 

works 

Bouygues Immobilier expresses its 

environmental commitments in practical, 

day-to-day ways. That is the 

case with the design of its head office 

at Issy-les-Moulineaux, for which the 

firm has opted to meet the highest 

environmental quality standards. 

Measures have been taken at the low 

environmental impact site to reduce 

pollution and optimise construction 

waste management and energy consumption. 

The building will showcase 

the kind of environmental quality that 

Bouygues Immobilier aims to achieve 

in its operations, including optimised 

rainwater management, efficient heating 

systems, optimised glass facades 

and waste recycling. 

■ New forms of solidarity 

In 2005, Bouygues Immobilier staff 

focused their charitable efforts on 

the Telethon, supporting and taking 

part in a cycling “tour de France”. 

Bouygues Immobilier and its partners 

collected over €264,000 for the 

French muscular dystrophy association, 

making it France’s fourth largest 

corporate donor. The event is unusual 

both for the extent of the participation 

it generates and for the amount 

of money it raises. Otherwise, the 

firm also provides one-off or regular 

support to various charities and 

good causes, such as the rebuilding 

of a village in Indonesia with the 

Fondation de France after the tsunami 

and a local charity for sick children in 

southern France. Locally and regionally, 

Bouygues Immobilier is closely 

involved in cultural events in Saint- 

Denis, Gattières and Aix-en-Provence, 

together with the firm’s local staff 

who are generally at the origin of such 

initiatives. 


• To extend the performance-related 

pay system to other categories of 

staff. 

• To recruit more handicapped people 

for sedentary work. 

• To develop HEQ-label operations. 

Increasing our 

responsibility 

■ Our organisation 

Sustainable development is a strategic 

matter at Bouygues Immobilier, placed 

under the aegis of the development 

and services manager. The sustainable 

development committee he chairs is 

primarily responsible for monitoring 

implementation of the firm’s commitments 

on the ground. 

Sustainable development actions are 

organised by Bouygues Immobilier’s 

quality manager and passed on 

through quality officers in the 

regions. 

64

The sustainable development committee 

puts forward action plans and 

reports to the general management, 

which analyses and directs policy in 

this area on the occasion of two annual 

strategic reviews. Representatives 

also take part in meetings organised 

within the framework of Bouygues’ 

groupwide sustainable development 

committee. 

■ Controlling major risks 

Facing an increase in risks of all types, 

Bouygues Immobilier has identified 

and defined its main environmental, 

health, technology, media and political 

risks. Crisis management, damage 

limitation and communication procedures 

have been drawn up in the 

event of an incident, which enable the 

company to respond effectively and 

transparently. 

The crisis unit can requisition the 

most appropriate skills for the situation. 

If an incident triggers a crisis, 

a pre-constituted team swings into 

action under the direct authority of 

the Chief Executive Officer. 

■ Our ambition 

Bouygues Immobilier has prepared its 

accession to the United Nations Global 

Compact in 2006. A voluntary scheme, 

the Global Compact involves promising 

to comply with ten principles relating 

to human rights, fundamental social 

rights, environmental protection and 

the fight against corruption. The firm 

will endeavour to put them into practice 

in its business operations, and has 

already begun to do so by choosing 

responsible partners. 

Bouygues Immobilier intends to continue 

existing efforts, both with partners 

and internally, to implement best 

practice in sustainable development 

as widely as possible. It will make 

choices consistent with this strategy 

in all areas of its business. 


• To operate clean sites that generate 

as little pollution and nuisance as 

possible. 

• To improve procurement traceability 

with our partners. 

• To identify sources of waste and find 

alternatives in the firm’s operating 

methods. 

Clerical 

& technical 

Managerial 

Women 

Men 



1,026 (+21%) 

of which 931 


Breakdown by 


1,026 

797 845 

267 

530 

280 

565 

346 

680 

2003 2004 2005 


in France in France (%) 

50 49.9 48.5 

50 50.1 51.5 

2003 2004 2005 

Satisfied customers 

(%) 

66 69 72 

2003 2004 2005 

Average age: 

40 


of service: 

10 years 



2 1 1.5 

98 99 98.5 

2003 2004 2005 


(France) 

188 

68 

96 

60 35 120 

29 

31 

61 

2003 2004 2005 

Housing units delivered 

on schedule (%) 

83 

92 95 

2003 2004 2005 

Fixed-term 

Permanent 

Clerical 

& technical 

Managerial 


65

COLAS 

THE CHALLENGES FACING COLAS 

Alain Dupont, 

Chairman and CEO of Colas 

Alain Dupont, Chairman & CEO, has wasted no time in laying down guidelines for 

action by Colas in areas such as continuous training, better working conditions, 

workplace safety, recycling, clean sites, QSE ® certification, the development of 

environmentally friendly products and technologies and better road safety, now 

grouped together under the generic term sustainable development. 

Alain Dupont has ensured that these issues are an integral part of Colas’ strategy. 

The priorities of human resources policy must be to attract, hire, train, nurture, 

protect and retain staff. Efforts must focus on actions to reduce or eliminate 

the adverse environmental effects of industrial activities, going beyond mere 

compliance with the rules and regulations. Colas has long been at the leading 

edge of research intended to eliminate chemical compounds potentially harmful 

to the environment from its output. Systematic and regular inventories of 

chemical compounds used in production will be stepped up in order to promote 

the firm’s policy of substitution and ecological design. As fossil fuels are becoming 

more expensive, and as reducing global warming and the greenhouse 

effect has become a new objective, efforts to save energy and use renewable 

energy sources have been increased and incorporated into investment plans and 

research programmes. 

Because Colas is geographically scattered – it has over 1,200 establishments 

in forty countries carrying out 100,000 projects each year – management and 

management tools have been decentralised to subsidiaries and local units so 

that they can optimise their action in a local context. With a network of over 50 

environment correspondents and in-house auditors, the Environment division 

is gradually introducing specific indicators based entirely on data that can be 

genuinely consolidated with a sufficient degree of reliability to enable policies for 

progress to be implemented, in contrast to other options which merely give 

that impression. These indicators will then be extended. 

QSE (Quality, Safety, Environment) certification is a priority means of action to 

promote sustainable development. 

• Quality. ISO 9001 certification has been systematically sought for the group’s 

European subsidiaries, which generate 80% of sales effectively controlled by 

Colas. It does not correspond to the cultural and legalistic context of North 

America, but the commitment to quality is just as genuine there. The situation 

in the rest of the world is more variable: the quality approach is ill-suited to 

the “nomadic” conception of the business in sub-Saharan Africa, but it is being 

pursued in Thailand. However, quality is one of the foundations of the Colas 

culture everywhere, based on technical excellence. 

• Safety. Structural measures are already in place, based on actions and 

indicators designed to mobilise staff. There is no need for a systematic commitment 

to certification. 

• Environment. The firm’s unchanged priority is to seek certification of its 

industrial activity in order to ensure that commitments given in operating 

licences are translated into action and that its management of impacts and 

obligations is fully visible. By the end of 2005, ISO 14001 or EMAS certification 

had been obtained for activities in France, Switzerland, Belgium and Denmark 

generating 45% of sales in the areas concerned. In the US, almost 50% of 

production of asphalt mixes is covered by the “Green Diamond” label, a rigorous 

industry certification scheme. As a result of this policy, new plant design 

incorporates feedback and takes full account of local residents’ expectations. 

Seven subsidiaries have opted for total certification to date. Activities generating 

over 30% of sales in France and Western Europe (Austria, Denmark, 

Finland, Germany, Ireland, Switzerland, the UK) have obtained environmental 

certification. 

• Integrated QSE approach. Two subsidiaries obtained triple ISO 9001, 

ISO 14001 and Ohsas 18001 certification in 2005, bringing the total to four. 

• Audit policy. Steps are being taken to strengthen internal and external audit 

mechanisms with the twin aims of ensuring that they add value and incorporating 

their conclusions into internal control procedures. 

Human resources 

Recruitment, skills development, internal 

promotion, motivation, prevention, 

working conditions and modern management 

are the foundations of Colas’ 

human resources policy. Taking the 

long-term view, the human resources 

policy adapts to national and local 

cultural factors in accordance with the 

legal, social and societal environment. 

All subsidiaries ensure compliance 

with fundamental ILO (International 

Labour Organisation) conventions. 

Colas’ objective is to favour a mindset 

based on attention and service to 

customers while developing a sense of 

responsibility and an entrepreneurial 

spirit within the firm. It aims to ensure 

that work remains meaningful, provide 

high-quality working conditions 

and cultivate close links with local 

economic and social life. 

■ Recruitment to anticipate 

and support growth 

Recruitment 

Recruitment is a priority for Colas, 

whether young people starting out 

on their careers (priority is given to 

internal promotion) or experienced 

professionals, without any form of 

discrimination and with a single objective: 

to favour empowerment, autonomy 

and the spirit of enterprise. 5,200 

new employees joined Colas in France 

and elsewhere in 2005, an increase of 

40% on 2004. 

66

Internships and apprenticeships 

Apprenticeships and internships offer 

unique opportunities for students 

and professionals to meet each other 

and exchange ideas and experience. 

Internships are an important source of 

recruitment for Colas: 50% of recent 

graduates recruited in France in 2005 

had previously spent time with the 

firm as an intern. Colas establishments 

welcomed over 2,500 young 

people, 600 of them outside France, 

an increase of 27% on the 2004 figure 

for France. Internships take place 

within the framework of agreements 

with educational establishments and 

are not intended to replace permanent 

jobs; remuneration is consistent 

with the work done. Students in their 

first year of higher education can 

expect to be paid between €500 and 

€1,000 a month, depending on their 

contribution and commitment. 

■ Training for promotion: 

developing skills 

By welcoming and integrating new 

recruits, developing skills, supporting 

career development and promotion 

and favouring professional and 

geographical mobility, the company’s 

training programmes represent a genuine 

investment in people. 

Training in France 

Expenditure on training in France in 

2005 amounted to 4% of the total 

payroll. As a deliberate choice, 50% 

Colas University 

Created at the instigation of 

senior management, Colas 

University is intended to support 

the career development of the 

company’s executives. It consists 

of three cycles, the teaching being 

provided by high-level educational 

institutions. 

- The first cycle, lasting 20 days, 

is a Roads Master’s for newly 

recruited engineers, managers 

and senior technicians (teaching: 

ENPC). 

- The second cycle, lasting 10 

days, is intended for managers 

who have been with the firm for 

about four years and are taking 

up positions of greater responsibility 

(teaching: ENPC). 

- The third cycle, lasting 12 days in 

three 4-day sessions, is intended 

for managers of individual establishments 

(teaching: HEC). 

of hours were devoted to site workers, 

30% to technical and clerical staff and 

20% to engineers and managers. 

In a total of 14,000 training actions, 

almost 3,500 employees took part 

in some 340 scheduled sessions of 

“Campus Colas” modules. The school, 

open to all employees, provides over 

one third of training hours from a 

common core of 150 programmes covering 

essential knowledge and skills 

in all areas. 

Colas is also greatly involved in the 

creation of vocational qualification 

certificates, a scheme run jointly by 

employer and labour organisations. 

An “urban roads and networks” diploma 

has been created for site workers 

in partnership with the firm. 36 site 

workers to date have been awarded 

the diploma. Preparations are being 

made for a second diploma for road 

surface layers. 

Training outside France 

The same broad training policy is 

applied outside France, adapted to 

local conditions. Specific training 

actions in 2005 included the following: 

• Europe: in Belgium, 100 employees 

were trained in plant operation; 

in Switzerland, 36 employees 

were trained in sales and negotiating 

techniques and 11 employees in 

plant operation (finishers); in central 

Europe, training was provided in fire 

safety, handling dangerous materials 

and plant operation; 

• Africa and the Indian Ocean: literacy 

and remedial education, health 

and safety for employees and their 

families, internal promotion of gangers 

and site foremen, alternating 

classroom/workplace training, plant 

operation training by an organisation 

from mainland France, computer 

literacy, office software. 

• North America: an American version 

of the Colas University concept, 

adapted to North American issues 

and the North American workforce; 

grants to study in Canada (University 

of Sherbrooke and École Technique 

Supérieure, Montreal) and the United 

States (South Georgia Technical 

College). 

■ Recognising the value in 

people 

Colas is a company in which employees 

can spend their entire career, in 

contrast to current preoccupations 

like job insecurity and the need to 

change company in order to climb 

the ladder. For employees who wish to 

move within the group, career opportunities 

are offered for example via 

the Nomades intranet. Almost 1,100 job 

offers have been placed online in the 

last four years. 

Exemplary behaviour and 

motivation 

Wishing to honour talent and highquality 

work by the best professionals 

because of their value as an example 

to others, each year Colas distinguishes 

site workers who achieve a very 

high level of professional skill by inviting 

them to join the Compagnons de la 

Route, a guild. 

Work session at Colas University 


67

COLAS 

Over 800 employees have become 

guild members since 1993, benefiting 

from the specific training programme 

that goes with the distinction. 90 new 

members joined the Compagnons de 

la Route in 2005. 

Pay 

When employees start their careers, 

pay scales are based on their qualifications. 

Pay then varies according to 

the achievement of individual targets 

and the level of responsibility. Growth 

and good results in 2005 enabled the 

firm to pursue a dynamic pay policy, 

not least because one variable element 

of employees’ pay is based on 

profits. 

Gender equality 

In a predominantly male industry, the 

number of female employees at Colas 

is steadily rising, in particular in support 

functions, for which there are 

more applications from female candidates. 

Colas has female employees 

in all its support divisions, including 

in senior managerial positions 

(Human Resources, Legal Affairs, 

Communication) and in operating 

units (district manager, works supervisor, 

site manager). 

In September 1995, Colas appointed 

its first-ever female CEO at one of its 

subsidiaries, Colas Nord-Picardie. 

■ Safety 

For the last 15 years, a proactive accident 

prevention policy defined by the 

Colas Safety Charter has produced 

tangible effects both in France and 

internationally. A network of safety 

officers in each subsidiary and establishment 

and on work sites promote 

safety messages on common themes 

like the induction of new employees, 

the safety of temporary workers, the 

consideration given to sub-contractors, 

awareness-raising at managerial 

level, etc. 

The group’s safety officers met in 

Antwerp in June 2005 to exchange 

best practices. Targets were defined 

for the years to come, including a 7% 

annual reduction in accident frequency 

rates and the complete elimination 

of accidents entailing time off work in 

50% of works centres by 2008. 

Colas devotes more than half of its 

training programmes to the prevention 

of workplace accidents and occupational 

illnesses. First-aid training is 

an important aspect of the policy, the 

aim being to have at least one person 

trained in first-aid on each site. 

Over 11,200 employees worldwide 

(almost 20% of the total workforce) 

have had first-aid training, including 

7,200 in France (22% of the workforce). 

The company’s objective is to 

ensure that 30% of the workforce are 

trained in first-aid by 2008. 

Working conditions 

The fact that Colas has won many 

prizes (11 in France, 12 in the United 

States, 3 in Canada, 3 in Ireland, 8 in 

Asia) is proof of the effectiveness of 

practical action to improve workplace 

safety on the ground. 

Road safety programme 

In 2005, at the second European 

Road Safety Summer School in Paris, 

Alain Dupont signed the European 

Road Safety Charter in the presence 

of Dominique Ristori, head of the 

European Commission’s Directorate- 

General for Energy and Transport. The 

aim of the charter is to achieve a 25% 

reduction in the number of road accidents 

involving third parties in Colas’ 

European subsidiaries (60 companies 

in 15 countries) by 2008. In France, 

the number of trained drivers rose 

from 15,300 to 18,700 in one year. 

Over 6,200 driving assessments and 

almost 3,000 post-accident reviews 

have been carried out since 2002. 

Health in Madagascar 

To make up for the lack of local 

healthcare provision, for several 

years Colas has taken measures 

to improve the health of its 

employees and their families, 

including information campaigns 

on the risks of sexually transmissible 

diseases and the creation of 

health centres on worksites, open 

to all employees, their families 

and local people. When building 

the “Vanilla Highway”, Colas 

made sure that spin-offs from the 

project would benefit the local 

population, building base camps 

that could subsequently be put to 

civil use, training local staff and 

providing health education in the 

villages along the route of the 

new road. 

■ Giving priority to local 

employment 

Colas is organised in such a way that 

it can take action at local level by providing 

material or financial support. 

Examples of actions that offer people 

in difficulty access to jobs include: 

local partnerships under government-sponsored 

schemes to promote 

first-time employment; participation 

in employer groupings to help young 

people find first-time jobs and gain 

qualifications on certain projects; 

employment support contracts with 

ANPE, the French jobseekers agency, 

and subsidised employment contracts 

with ASSEDIC, the unemployment 

benefit agency (in La Réunion, for 

example); helping unemployed people 

back into the workforce in partnership 

with neighbourhood councils in New 

Caledonia. 32 jobseekers were given 

operational training in 2005. 

68

■ Internal communication: 

promoting authenticity 

Communication initiatives promote 

strong values of cohesion in a geographically 

extended group with 

employees from very different backgrounds, 

nationalities and cultures 

and a workforce whose rapid expansion 

is partly due to steady external 

growth. With the principal aim of 

encouraging staff to meet and share 

with each other, the sincerity of the 

approach helps to keep employees 

loyal to the company. 

Some Colas conventions in 2005: 

• Managers Convention: 

1,215 participants from 30 countries, 

a high point being the reassertion of 

the group’s intangible principles 

• Workshop managers Convention: 

403 participants from 27 countries 

• Environment Officers Convention 

(France): 64 participants 

• Human Resources Convention: 


• Safety Officers Convention in Antwerp: 


Environment 

The Environment division continued to 

structure its action in 2005, whether 

cross-cutting initiatives with other 

support divisions, the establishment of 

consolidated global indicators or the 

organisation of a network of ISO 14001 

correspondents and auditors. The 

guiding principles of the Environment 

division’s actions are caution, scientific 

rigour in the use and communication 

of figures, risk control, continuous 

improvement and the proximity principle 

for local assessment of environmental 

impacts. 

■ The environment and 

services to customers 

research, Colas has chosen to maintain 

its research and development 

programmes so that it can continue 

to offer new products and services 

adapted to its markets. 

New public procurement procedures, 

PFI (Private Finance Initiative) projects, 

public-private partnerships (PPP) 

and long-term maintenance contracts 

are a first priority for meeting the 

challenge. For several years now, in 

Canada (Alberta), the UK (Portsmouth) 

and Hungary (M5 motorway), Colas 

subsidiaries have been involved in 

exemplary projects that enhance 

feedback and prepare for the gradual 

spread of this type of contract, whatever 

the country concerned. 

Priorities for developing new products 

remain unchanged: performance, customer 

service and sustainable development. 

Particular emphasis has been 

placed on energy saving and reducing 

greenhouse gas emissions, substitution 

and noise reduction. 

Energy saving 

3E mixes (Environmental and 

Economical with Energy) are made at 

temperatures of around 115°C, 40°C 

lower than usual, representing an 

energy saving of over 10%. The asphalt 

is itself produced at temperatures of 

around 400°C, compared with around 

1500°C for its traditional competitor, 

cement clinker. The 3E mixes were 

tested in France in late 2004, then in 

June 2005, under the supervision of 

government inspectors. Results were 

Colas’ primary objective is to satisfy 

its customers within the context of the 

challenges facing society as a whole. 

Well-designed, well-built and properly 

maintained infrastructure optimises 

the initial outlay and the consumption 

of resources. Infrastructure must be 

designed and built to last, an obvious 

factor often neglected because 

of short-term pressures or an unsuitable 

legal context. In France, even 

though the government now gives less 

support to innovation and hence to 

“Vanilla Highway”, Madagascar 


69

COLAS 

Prosign, a new Colas 

subsidiary, the 

substitution champion 

Prosign, which makes and applies 

road markings, joined the Colas 

group in 2005 with a solid reputation 

for environmental achievements. 

The winner of many 

prizes and other awards, it has 

developed: 

- coloured products without lead 

derivatives, 

- methacrylic cold plastics with 

low emissions of volatile organic 

compounds (VOC), 

- solvent-based paints with a high 

percentage of solids and no toluene 

(30% less solvent), 

- water-based products (< 5% 

VOC) without glycol ethers. 

Vegecol overlay used at Luxembourg Gardens, Paris 

consistent with expectations, or even 

better in some cases. The products in 

the 3E range are therefore ready for 

full-scale launch in early 2006. 

Substitution and ecological design 

REACH (Registration, Evaluation and 

Authorisation of Chemicals), the 

new European chemicals regulatory 

framework, will come into effect in 

2006. Some measures have already 

been anticipated: research has long 

focused on the reduction or elimination 

of toxic or harmful substances 

in products. The regulation will thus 

have little impact on Colas products, 

though it will imply even greater vigilance 

in all forms of purchasing. 

In order to reduce dependence on 

oil, considerable efforts are being 

devoted to making products from 

renewable raw materials, like Vegecol, 

a plant-based binder. This know-how 

will be used to test other plant-based 

components or substitutes for bitumen 

products in 2006, probably for 

launch in 2007, even if oil and petrochemical 

products will continue to 

predominate. 

There is strong demand for the 

Vegecol binder, which has won an 

International Road Federation prize: 

it was used on over 60 sites in 2005 

(compared with four in 2004) and 600 

tonnes of the binder were applied 

(under 60 in 2004). Vegecol, a genuine 

substitute for bitumen, is made 

from natural materials (plant oils and 

resins) and is an organic product that 

does not contain any harmful or toxic 

compounds. Translucent and colourable, 

it has another environmental 

advantage: a 30% reduction in temperatures 

used and hence a reduction 

in energy consumption and greenhouse 

gas emissions. Substitution 

also applies to products used in the 

manufacturing process. Thus, antiadhesives 

for spreading equipment 

are increasingly being replaced by 

rapeseed oil, workshop solvents are 

being replaced by washing products 

or bacterial solutions, and less use is 

being made of chlorinated solvents in 

laboratories (consumption has been 

cut from 5,000 litres a year to less 

than 100 litres a year in Denmark, for 

example). 

Noise 

Colas has invested heavily over the 

last fifteen years in the development 

of products that reduce rolling noise 

(the nuisance most often mentioned 

by local residents) by several decibels. 

Noise is a genuine issue in our 

society. 

Ten years after Colsoft, Rugosoft was 

awarded the European Golden Decibel 

prize in 2005 and a further prize 

at the International Road Federation 

Congress in Bangkok. The overlay 

combines very high safety levels with 

considerable noise absorption (7 to 

8 dB). 

■ Recycling 

Recycling is another fundamental priority 

for action and research. The 

company engages in four types of 

recycling: 

• The incorporation of waste materials, 

or raw and “secondary” materials, 

to give roadways new properties: 

it is a win-win situation for both the 

producer of waste or coproducts and 

the user. Colas has extensive experience 

in this field, in particular with 

Colsoft, a noise-reducing mix that 

incorporates powdered rubber from 

used tyres, Scintiflex, a reflective surfacing 

incorporating glass waste, and 

the Fractal anti-noise wall containing 

wood waste. Compogom, developed in 

2005, is used to make sub-bases from 

ground automobile tyres. 

• The recycling of roadbuilding and 

construction waste. Colas makes 

extensive use of recycled roadbuild- 

Environment-friendly paint used for road marking 

70

ing and construction waste. In 2005, 

with the Ecosol process for recycling 

earthwork spoil, it recycled 250,000 

tonnes of ordinary materials into standardised 

gravel in the Paris region 

alone. It also re-uses asphalt pavement 

tops (25% in the standardised 

asphalt mixes used in work for the 

Paris city authorities), crushes demolition 

concrete at 18 plants in France, 

and recycles bitumen road surfaces 

Recycling asphalt mixes: 

the contrast between 

France and the United 

States 

Recycling asphalt mixes is standard 

practice in the United States, 

accepted by customers and 

steadily increasing. The figures 

speak for themselves: recycled 

products account for 13.5% of the 

18 million tonnes of asphalt mixes 

produced each year, equivalent to 

the output of 18 mixing plants. 

Recycling is still relatively rare 

in Europe, especially in France, 

amounting to less than 5% of production 

at Colas, because of resistance 

to technological change 

among public sector customers. 

Colas Nord-Picardie has invested 

in a high-capacity mobile asphalt 

plant intended for projects using 

a high proportion (as much as 

50%) of recycled materials. 

on-site (Colas Sud-Ouest alone processed 

300,000 sq. m. in 2005) or 

incorporates them into new mixes 

at mixing plants. This illustrates the 

extent to which roadbuilding materials 

can be recycled. 

• Substitution at equivalent quality 

and cost: crushed concrete from 

demolition waste; power station fines, 

regularly used in the production of 

asphalt mixes; steelmaking slag, of 

which Screg Est processed 250,000 

tonnes in Lorraine in 2005. The business 

risks are greater: for example, 

Colas had to close its Granufos slag 

recycling plant near Marseille and 

Ecoballast, a railway ballast recycling 

subsidiary of Seco-Rail. 

• Use of substandard materials of 

poor technical quality (clinker from 

the incineration of household waste, 

foundry sand) in the public interest. 

Such materials are used only if they 

are imposed in the specifications or 

subsidised. For example, Colas handles 

over 40% of the clinker produced in 

the Greater Lyon region and recycled 

100,000 tonnes of foundry sand in 

Nord-Picardie in 2005, taking care 

to ensure that this type of recycled 

material does not adversely affect the 

quality or durability of its works. 

Overall, more than 5 million tonnes 

of materials are recycled in France 

each year, representing almost 15% 

of Colas’ production of aggregates, 

the equivalent of the output of 12 

quarries. 

Mobile asphalt plant with a high recycling rate, France 

Meeting local needs 

Colas has modernised and is now 

operating an 80 hectare (200 

acre) industrial production plant 

in the heart of the Lyon conurbation, 

less than 10 km from the 

city centre. Based at Mions, the 

facilities have ISO 14001 and 9001 

certification. They can produce 

1,400 t/h of recycled aggregates, 

concrete and asphalt mixes, meeting 

up to 10% of local needs, in 

compliance with the principle of 

proximity. Local concerns have 

been addressed by installing 

external wall cladding and ending 

open-air storage. 

Dialogue with civil 

society 

Through its business of building and 

maintaining infrastructure Colas 

addresses a large number of societal 

concerns, placing the company at the 

centre of economic and social life. 

■ Contributing to the 

dissemination and sharing 

of knowledge 

Colas makes a private-sector contribution 

to the public and social 

spheres in various ways, drawing on 

experience acquired throughout the 

world over many years. As well as 


71

COLAS 

contributing to public-private partnerships, 

joint research projects and skill 

transfers, it organises and takes part 

in conferences, seminars and exhibitions 

of an international, educational, 

professional and general nature. In 

some countries where Colas does 

not or used not to operate, it has 

helped with technology transfers to 

local authorities. For example, it has 

provided assistance with pavement 

design using thin asphalt overlays in 

Malaysia and Mexico and helped to 

overhaul a surface dressings policy in 

South Africa. 

■ Taking part in local community 

life 

In France, in addition to active involvement 

in a number of local employment 

initiatives as part of the company’s 

human resources policy, participation 

in local community life mainly takes 

the form of sponsorship of a dozen 

Renovation of Montflanquin square, Lot-et-Garonne department, France 

or so cultural initiatives and over a 

hundred sports teams which express 

the Colas group’s values of openness 

and dynamic action. Initiatives 

outside France are even more varied, 

reflecting the diversity of countries 

The World Emulsion 

Congress 

Colas created this international 

scientific congress in 1993 to 

encourage transfers of knowledge 

about the physical and chemical 

process of emulsion, common to 

several sectors of activity, such 

as foodstuffs, bitumen, cosmetics, 

detergents, inks, plastics, paints, 

pharmaceuticals, photography, 

plant health, etc. The congress 

also attracts academic researchers. 

The fourth edition will be held 

in Lyon in 2006. 

in which Colas operates, including 73 

welfare projects in liaison with local 

NGOs, 31 cultural projects and sponsorship 

of a hundred or so sporting 

events or teams. 

■ Encouraging the 

dissemination of ideas 

This policy, managed at Colas parent 

company level, covers three main 

areas: the arts, through the Colas 

Foundation, which brings modern art 

into the workplace; human, social, economic 

and political sciences through 

the Colas Circle, which regularly 

invites thinkers and opinion-leaders to 

speak on a key subject of their choice; 

and the hard sciences, with the introduction 

in 2005 of the “Rencontres 

Scientifiques Colas”, scientific gatherings 

organised in partnership with 

the leading science magazine La 

Recherche. Colas is also a partner of 

a number of high-profile events, such 

as the Marciac Jazz Festival and the 

Jules Verne centenary celebrations, 

with events in Nantes and Amiens. 

Colas Circle speakers in 2005 included: 

Patrick Légeron, psychiatrist at the 

Centre Hospitalier Sainte-Anne in Paris, 

on the psychology of change; 

Catherine Wihtol de Wenden, senior 

researcher at the National Centre for 

Scientific Research, on labour immigration; 

Michel Serres, author and member of 

the Académie Française, on globalisation; 

Marcel Bozonnet, General Manager 

of the Comédie Française, on the 

Comédie Française, theatre and enterprise; 

Pierre-Cyrille Hautcoeur, professor at 

the University of Paris I Panthéon- 

Sorbonne, on finance and Franco- 

German relations. 

Three Colas Scientific Conferences 

were held in 2005: 

Forecasting the climate, with Jean- 

Claude André, director of the European 

Centre for Research and Advanced 

Training in Scientific Computation, and 

Philippe Courtier, head of the École 

Nationale des Ponts et Chaussées, an 

elite engineering school; 

Reducing CO2 in the atmosphere: 

geological storage?, with Christian 

Fouillac, head of the Geological and 

Mining Research Bureau, and François 

Guyot, head of the mineralogy department 

at Denis Diderot University 

(Paris VII); 

“After forty sketches” by Carol Narino 

(Colas Foundation) 

72

Nanotechnologies to support technological 

progress, with André De Haan, 

from the Polytechnic Faculty of Mons, 

Belgium, and Jean-Christophe Dumetz, 

chief executive of Nanotech SAS, Aixen-Provence. 

Risks – Exceptional 

events – Litigation 

The management of risks inherent 

in its activities is a central concern 

at Colas and is devolved to the level 

at which risks can best be identified, 

assessed and controlled. A decentralised 

structure continues to be the 

key to the group’s risk management 

policy. Regular exchanges have taken 

place over the last few years with 

the Bouygues group, which organises 

joint sessions on risk, focusing on the 

analysis and prevention of potential 

major risks. Colas does not seem to 

be greatly exposed to any particular 

major risks, given the nature of its 

businesses, the scatter of its establishments 

and the large number of 

projects carried out each year. 

Colas takes particular care to identify 

and prevent recurring risks, using 

high-performance reporting tools to 

monitor incidents and analyse their 

causes. The fact that information is 

centralised means that feedback can 

be passed on to subsidiaries, enabling 

the company to take preventive 

measures and define best practices. 

Colas constantly seeks to adapt and 

improve its risk management procedures 

and incorporates this aspect 

into specific training courses intended 

for all employees. 

Site workers 

Clerical 

& technical 

Managerial 

In France 

Fixed-term 

Permanent 

Site workers 

Clerical 

& technical 

Managerial 



57,800 (+8%) 

of which 33,100 


Breakdown by 


57,791 

53,068 53,468 

35,737 

35,444 

38,241 

11,521 11,872 12,743 

5,810 6,152 6,807 

2003 2004 2005 



2.3 1.7 2.3 

97.7 98.3 97.7 

2003 2004 2005 


(France) 

3,195 

3,498 

2,389 

2,165 

2,311 

1,582 

590 756 853 

217 274 334 

2003 2004 2005 

Average age: 

41 


of service: 

11 years 


in France in France (%) 

7.7 7.8 7.8 

92.3 92.2 92.2 

Women 

Men 

2003 2004 2005 

Trends in safety indicators 

France (per year) 

International and French overseas territories (per year) 

0.69 

16.40 

0.69 0.66 

15.42 14.56 

2003 2004 2005 

Severity 

Frequency 

0.24 

8.97 

0.19 

7.92 

0.25 

9.20 

2003 2004 2005 

Severity 

Frequency 

Country France Hungary Madagascar North 

America 

Number of employees 30,000 2,300 4,100 9,000 

Average annual salary 

Plant operator (€) 21,150 10,150 1,250 32,750 

Average annual salary 

Site manager (€) 29,250 13,500 1,850 44,850 

Statutory annual minimum wage (€) 14,600 2,750 250 8,750 

Number of accidents and size of vehicle fleet 1997 2001 2005 2005/1997 

Number of vehicles 13,746 19,694 22,509 +63% 

Number of accidents involving third parties 3,024 2,886 2,342 -23% 

Frequency 0.22 0.15 0.104 -53% 


73

TF1 

74 

EDITORIAL 

THE CHALLENGES FACING TF1 

by Patrick Le Lay, Chairman and CEO 

It is above all through programme content and respect for viewers that TF1, 

Europe’s leading general-interest TV channel, makes a commitment to the community 

to defend and promote the values of sustainable development. 

Ethics, child protection and the guarantee of editorial independence are priorities 

for a family TV channel. These values are set out in the most recent 

convention between TF1 and the CSA, the French TV watchdog, 

signed in January 2002. 

Environmental protection is also promoted in schedules, both on 

TF1, where the flagship programme is Ushuaïa, presented by 

Nicolas Hulot, and on theme channels, with Jean-Louis Caffier 

presenting Terre Mère on LCI. In early 2005, TF1 launched 

Ushuaïa TV, the first channel entirely devoted to fair and sustainable 

development. 

Openness to the entire national community is 

another important feature of TF1’s editorial 

charter. The channel endeavours to 

favour the presence of national minorities 

in its programmes. 

TF1’s commitment to society is 

underlined by the amount of 

prime time it devotes 

to humanitarian actions for causes like children in hospital, the fight against 

AIDS, etc. This commitment represents the equivalent of 1% of the channel’s 

advertising sales. 

Social and environmental responsibility is also an internal matter for TF1. Our 

company seeks to create a social framework within which employees can 

flourish and encourages a proactive human resources policy in areas such as 

pay, training, health and safety, mobility, benefits, etc. A particular effort has 

been made in recent years to increase the number of people with disabilities 

in the company and to integrate non-permanent staff, resulting in an exceptional 

reduction in job insecurity. 

Full digital broadcasting, implemented in 2005 by the Technologies and 

Internal Resources Division, coupled with the modernisation of equipment, 

reflects the company’s commitment to continuous improvement and paperless 

communication in compliance with the principles of sustainable 

development. 

Even if the ecological footprint of its business is relatively small, 

TF1 endeavours to implement best environmental practices, such 

as energy saving and waste management, in all areas over which 

the channel and its subsidiaries exercise control. 

Efforts to implement policies seen as socially responsible have 

earned TF1 a place in three sustainable-development 

indexes: DJSI STOXX, ASPI Eurozone ® and 

the FTSE4Good Europe Index. 

In its commitment to sustainable development, 

TF1 does not merely pay lip service 

to fashion. I am proud that for nearly 

20 years now, TF1 has thrown its media 

weight behind good causes. 

Ethics 

■ Broadcasting 

A general-interest and family channel, 

TF1 has always attached great importance 

to respect for viewers. 

As such, it has made many efforts over 

many years to constantly improve the 

editorial quality and ethical standards 

of the programmes it screens. 

Programmes are subject to supervision 

by the CSA under the terms of 

the channel’s convention (1) with the 

audiovisual media watchdog. TF1 has 

also established a compliance unit 

which checks all air-bound content 

upstream. 

Adverts are systematically verified by 

BVP, the advertising standards authority, 

which issues an opinion before the 

advert is screened, then by TF1 and 

finally by the CSA, which carries out a 

check after the event. 

In the convention, the CSA underlined 

the channel’s efforts to provide subtitled 

programmes for hearing-impaired 

viewers and set an annual target of at 

least 1,000 hours a year for that type 

of programme. 

In 2005, TF1 broadcast 2,275 hours of 

subtitled programmes using teletext. 

As part of its efforts to protect children, 

since 2002 TF1, like the other 

general-interest channels, has shown 

icons informing viewers about pro- 

(1) 25 of the convention’s 64 articles relate to 

ethical broadcasting.

Messages for children 

on TF1 

After raising children’s awareness 

of issues like tolerance, peace and 

children’s rights, TF! has sought 

to promote healthy eating and a 

healthy lifestyle in an entertaining 

and interactive way through 

games, poems and quizzes in an 

operation focusing on nutrition 

under the title Croq’Attitude. 

Examples of messages shown: 

“Do you want to be big and 

strong? 

Eat fish, eggs or meat every day! 

That’ll make you big and strong!” 

“Do you want to have the 

Croq’Attitude too? 

Eat five portions of fresh fruit and 

vegetables every day to keep illness 

at bay!” 

gramme content so that parents can 

protect their children from potentially 

offensive images. In addition, 

TF1 has undertaken to carry out an 

annual campaign to inform the public 

and raise awareness of child protection 

measures on TV, according 

to objectives defined with the CSA. 

Programmes for children are also submitted 

to psychologists for assessment. 

Reaching out to the entire national 

community in all its diversity is one 

of the cornerstones of TF1’s editorial 

policy. The channel is continuing 

to include journalists from national 

minorities in both its News and Sports 

divisions. TF1 has also made a special 

effort to cast visible minorities in its 

most popular drama series. 

The gay community is another minority 

that TF1 is striving to bring out 

of the shadows. It has shown gays 

without taboo in a prime-time slot, 

playing its part in efforts to change 

society’s attitudes towards homosexuality. 

In 2004, TF1 took a stake in Pink 

TV, France’s first gay general-interest 

TV channel. 

■ Sponsorship 

Each year, the TF1 group shows its 

commitment to the community in various 

forms of sponsorship. It is through 

its position as an opinion shaper that 

TF1 can act in favour of good causes. 

In 2005, the TF1 group devoted over 

€18 million (the equivalent of approx. 

1% of its advertising sales) to humanitarian, 

civil or cultural actions. 

Some actions in 2005: 

• Sidaction 

AIDS was declared France’s national 

good cause in 2005. On 1, 2 and 3 

April, TF1 joined forces with the charity 

Sidaction, eight other TV channels 

and five radio stations, devoting some 

of its scheduled programmes, reports 

and advertising slots to the nationwide 

operation. From 21 March to 8 

April 2005, TF1 presenters, journalists 

and artists regularly reminded viewers 

of the number they could call to 

make donations. Sidaction aims to 

improve existing treatments, explore 

new avenues of research, promote 

prevention, meet the needs of those 

suffering from AIDS and defend their 

rights, especially in developing countries. 

• Earth Challenge 

TF1 and Ushuaïa TV are supporting the 

Earth Challenge campaign launched 

by the Nicolas Hulot Foundation 

and Ademe, the Agency for the 

Environment and Energy Management. 

The campaign proposes a number of 

simple ways in which individuals can 

help to preserve the environment 

in their daily lives. For a three-year 

period from 30 May 2005, once a week 

during a weather forecast TF1 will 

display a counter showing the number 

of people who have signed up to the 

Earth Challenge. On the channel’s website 

for children, tfou.fr, an area called 

Récré’Actions uses games, short films 

and other attractions to raise awareness 

of environmental issues and the 

importance of individual action. 

To support the campaign, Ushuaïa TV 

has chosen to screen a short educational 

programme by Jean-Albert 

Lièvre. The 13-minute film, shown 

60 th anniversary 

of the liberation of Auschwitz 

before the regular schedule starts 

and at closedown until the end of 

2005, reasserts Ushuaïa TV’s editorial 

positioning as the sustainable development 

channel. With the same objective, 

every day for a year from 5 July 

2005 the channel is showing two other 

8-minute films entitled “Water: From 

Source to Sea” and “Biodiversity”. 

• Liberation of Auschwitz 

On 27 January 2005, TF1 paid tribute 

to the victims of the Holocaust with 

a live world television broadcast of 

the ceremony to celebrate the 60 th 

anniversary of the liberation of the 

Auschwitz-Birkenau concentration 

camp, including interviews with former 

deportees. 

Progress on social issues 

In delivering high-quality service 

across all its lines of business, TF1 

relies on the professionalism and creativity 

of its people. Crucial for the 

channel and its subsidiaries, that is 

why TF1 places so much importance 

on ensuring that the working environment 

allows them to flourish. 

TF1 consistently implements a proactive 

social policy that goes beyond its 

legal obligations. The rules established 

by the group lay the foundations for a 

pleasant, fair and impartial working 

environment. Much progress has been 

made in this sphere, including the 

establishment of mutual funds for 

employee savings, a welfare scheme 


75

TF1 

that gives employees high-quality 

social protection and outstanding 

benefits, and a family-friendly policy 

with measures such as premiums for 

the birth of a child, marriage, child 

care, etc. 

■ Recruitment and mobility 

Recruitment policies stem directly 

from the three-year strategic plans 

drawn up by senior management after 

consulting the TF1 group’s operating 

and support structures. Adjusted to 

accommodate developments in the 

business environment as they occur, 

the policies are designed to ensure 

the high professional standards the 

company needs in order to remain 

a leader in its various lines of business 

and to motivate individuals and 

teams. 

Constant efforts are made to integrate 

talented young people to prepare 

them for the jobs of the future and 

Véronique Genest, Paul Allio and Mouss Diouf in Julie Lescaut 

to recruit experienced professionals 

to strengthen existing teams or start 

new lines of business. 

■ Disabled workers 

Thirty years after the landmark 1975 

legislation, the 2005 Disability Act 

reformed the law relating to disabled 

people, introducing various measures 

to favour access to employment. In 

pursuit of that objective, the TF1 group 

is conducting an awareness-raising 

campaign designed to bring more 

people with disabilities into the workforce. 

The campaign has four main 

thrusts: direct employment, continuing 

employment, use of the sheltered 

sector, and sensitisation and information. 

TF1, along with other leading French 

firms, is a member of Tremplin, an 

association which aims to help disabled 

students gain qualifications and 

find jobs. For TF1, the aim is to create 

a pool of potential candidates to meet 

its staffing needs. 

TF1’s Employment and Disability commission, 

created in February 2004 and 

comprising members of the Health 

and Safety committee, the occupational 

health service and senior management, 

takes various measures to 

improve the conditions of employment 

for disabled workers within the 

company. All premises (headquarters 

and other sites) meet the legal 

requirements for public buildings and 

disabled access. TF1 also screens a 

growing number of programmes for 

hearing-impaired viewers. 

■ Contract workers 

For five years, TF1 has pursued a consistent 

and proactive policy of integrating 

temporary employees and 

reducing the job insecurity associated 

with their status. 470 non-permanent 

employees (technicians, freelancers 

and directors) were hired between 

2001 and 2005 as a result of this 

policy, which will be continued in all 

TF1 group companies in 2006. TF1 has 

implemented a genuine social policy 

for contract workers. With regard to 

employee savings, they can take part 

in capital increases and the profitsharing 

scheme under the terms of a 

collective agreement. They have also 

had access to medical insurance and 

a welfare scheme since 1992. If they 

are on sick leave, under the welfare 

scheme their salary can be paid for 

up to 18 months instead of 12 months, 

as was the case previously. Otherwise, 

there is a specific agreement on the 

35-hour week for contract workers, 

fee schedules are reviewed annually 

and contract workers have access to 

the social and cultural activities 

organised by the works council. 

■ Gender equality 

TF1 is continuing its policy of non-discrimination 

between men and women 

and, as required by law, it complies 

with the principle of equal opportunity 

in recruitment, career development 

and pay. A few years ago, men considerably 

outnumbered women. The 

TF1 group has restored the balance 

in recent years: women now account 

for 48% of the workforce and men for 

52%. The proportion of women promoted 

in 2004 was identical to that of 

men, 11.3%, and higher in 2005 (10.4% 

of women and 9.4% of men). 

■ Health and safety 

In 2004 and 2005, TF1 placed particular 

emphasis on preventing occupa- 

76

tional risks in order to raise awareness 

among all the players concerned. 

441 employees from various categories 

of staff received safety training 

in 2005, compared with 375 in 2004. 

Regular training in fire prevention is 

organised and evacuation drills for 

all staff are carried out as required 

by the regulations. Three new courses 

were introduced in 2005 in order to 

improve working conditions: 

• a course in personal equilibrium at 

work, with the aim of understanding 

how stress mechanisms work and 

identifying the causes of stress in 

order to manage it better; 

• a course in using mobile elevator 

platforms for staff who have to use 

hoists on set; 

• a course to teach employees how to 

prevent eye strain. 

Training related to specific occupational 

risks is also provided, including 

first aid (a stress management 

module has been added to improve 

the psychological support given to 

employees working in high-risk areas) 

and advanced driving techniques. 

The single occupational risk assessment 

document has been updated. 

The document lists risks in each of 

the company’s operating units and 

monitors implementation of previously 

defined preventive measures for 

each identified risk, such as operating 

instructions, training, etc. 

Environment 

Although its activities have a limited 

impact on the environment compared 

with other sectors of the economy, 

the TF1 group carries out a proactive 

policy in all the areas over which it 

can exercise control. Action and continuous 

improvement plans have been 

introduced at all sites in the Paris 

region (73,000 m 2 ), covering aspects 

like the consumption of energy, fluids 

and raw materials (paper), carbon 

dioxide emissions, waste management 

and awareness raising, going beyond 

legal requirements in all cases. 

■ Consumption 

Several measures have been taken to 

stabilise electricity consumption at 

the Point du Jour site in Boulogne in 

2006, such as reducing the amount 

of lighting in car parks, turning off 

set and studio lighting at specific 

times and installing movement detectors 

in washrooms. These actions 

will be continued and stepped up in 

2006, one significant measure being 

replacement of the centralised building 

management system. With the 

new system, the temperature in office 

areas can be controlled and lighting 

levels adjusted according to occupancy 

and the amount of natural light. 

Staff using water and gas for cleaning 

and cooking, for example, will be 

informed of the importance of reducing 

consumption. 

Renewable energy sources and carbon 

dioxide emissions will be under review 

in 2006. Items on the agenda include 

the results of an initial CO 2 assessment, 

the possibility of installing solar 

panels, examination of a “renewable 

energy” contract proposed by EDF, 

and the acquisition of a hybrid mail 

vehicle. 

■ Recycling 

Waste sorting has been introduced 

wherever possible, taking into account 

the specific characteristics of sites. 

Eurosport has installed wastepaper 

baskets with separate compartments 

for paper and other waste. At TF1’s 

headquarters, in view of the amount 

of waste and the logistics of disposal, 

the support services division 

decided to acquire a waste compactor, 

in operation since August 2003. The 

waste is then sorted by an outside 

contractor, La Corbeille Bleue, which 

sells on what it can for recycling. 80% 

of the contents of office wastepaper 

baskets are recycled. Batteries, neon 

tubes and toner cartridges are also 

recovered and recycled. 

■ Purchasing 

In 2005, for the first time the analysis 

of tenders from suppliers and service 

providers included ethical criteria. The 

ecological characteristics of products 

and the bidder’s actions and commitments 

relating to sustainable development 

are taken into account and may 

be a plus factor in assessing a bid. 

■ Programmes 

It is mostly as an opinion shaper 

that TF1 can promote protection of 

the environment. TF1 produces and 

airs Ushuaïa, its flagship environment 

programme and the only prime-time 

feature devoted to the subject on 

French TV. TF1 has partnered Nicolas 

Hulot, the show’s presenter and an 

icon of the environmental movement 

in France, for almost twenty years, 

broadcasting Ushuaïa and producing 

and distributing spin-off products like 

DVDs and magazines. 

Terre Mère, hosted by Jean-Louis 

Jean-Louis Caffier, Terre Mère, LCI 

Caffier and shown three times a week 

on the rolling news channel LCI, also 

focuses on sustainable development 

and the need for people to adapt their 

behaviour to the changing environmental 

situation. On the programme, 

leading French and foreign specialists 

look at trends in farming, tourism, 

water use, planning, transport and 

energy from an environmental standpoint. 

On 14 March 2005, TF1 launched 

Ushuaïa TV, the latest offspring of 

the group’s Discovery division and 

the first channel entirely devoted to 

sustainable development. Ushuaïa 

TV’s schedule is based on three key 

values: inspiring wonder in viewers 


77

TF1 

and promoting an understanding of 

and respect for the Earth. All the 

programmes on the channel – documentaries, 

films, discussions – have 

respect for the environment as their 

central theme. Ushuaïa TV is a member 

of Comité 21, the French committee 

for the environment and sustainable 

development. 

TF1 also has a commitment to society. 

In 2005, it renewed its partnership 

agreement with the Nicolas Hulot 

Foundation, supporting its educational, 

scientific and cultural action on 

behalf of the natural heritage of the 

human race. TF1 and the Foundation 

regularly organise awarenessraising 

operations for TF1 staff and 

the Foundation’s campaigns are supported 

by TV adverts. 

Risk management 

The TF1 group is aware of its exposure 

to risk, whether accidental or 

The HD Forum association launches the HD-ready label at Eutelsat 

intentional, and of the duty it has to 

all its stakeholders to ensure both 

personal safety and continuity of service 

should a major incident occur. 

Internal measures have been in place 

since 2001 with the aim of coordinating 

the group’s thinking and action on 

risk prevention, continuity and crisis 

management. Under the aegis of TF1’s 

senior management, the initiative 

makes use of the skills of a group of 

employees drawn from all the company’s 

different structures. An external 

audit in 2004 by an internationally 

reputed consulting firm, followed by 

an internal audit in 2005, confirmed 

TF1’s position as one of the leading 

players in the field in terms of best 

practice. 

■ Organisation 

Focusing on safety, infrastructure 

and technology risks, organisational 

efforts have focused primarily on 

maximum prevention then, if a major 

incident (flood, fire, power failure, etc.) 

were to occur on the main site, on 

rescuing staff and restoring the most 

important functions from an external 

site. If the main site were affected, the 

aim of the continuity objectives is to 

ensure that TF1 programmes continue 

to be broadcast without any visible 

impact on the viewer and to restore 

news bulletins and advertising spots 

within three hours. 

As well as digitisation of the broadcasting 

process at Boulogne, the 

process to secure broadcasts was 

completely overhauled in 2005 and a 

new, high-security site was identified 

and correspondingly equipped. 

Crisis management also involves identifying 

the necessary resources and 

skills and bringing them to bear 

at the earliest opportunity. 

TF1 has opted to take 

a network approach to 

risk management rather 

than creating specific units. 

This system means that each division 

can be involved in defining methods 

and procedures for restoring its own 

activities and that the cross-cutting 

approach needed in such matters can 

be maintained. The plan is supervised 

by the head of the Technologies and 

Internal Resources Division, reporting 

directly to senior management. 

A coordinator ensures that the 

members of the working group have 

complementary skills, that plans are 

moving forward and that quarterly 

management reviews are organised. 

■ Quality 

Quality policy is based on continuous 

improvement. Applied to TF1’s key processes 

(broadcasting and the production 

of news bulletins) and redefined 

when digital equipment was installed, 

the policy is designed to optimise the 

technical quality of broadcasts, permanently 

increase understanding of 

innovative processes 

and 

encourage 

the involvement of all players, both 

inside and outside the group. 

After the production of news bulletins 

for TF1 and LCI in 2000, standard and 

emergency operating methods and 

quality monitoring for all programme 

broadcasting were completely overhauled 

in 2005. The incident management 

system, reviewed in 2005, 

provides for weekly meetings of all 

the players involved – editorial, operational, 

maintenance, IT – with the aim 

of identifying better technical and 

organisational solutions and tracking 

indicators. The introduction of 

performance indicators and a tracking 

mechanism means that incidents 

Objective: to launch HDTV 

TM & © 2003 Warner Bros. Entertainment Inc. All rights reserved. 

78

Example of the local impact of the Group’s activity 

TV Breizh, the cable and satellite Breton channel, was launched in September 

2000. While the region was not entirely devoid of audiovisual production 

activities at the time, they were on a very small scale and technical equipment 

was scarce. The arrival of TV Breizh gave fresh impetus to the activity: 

several production companies based in Brittany now work with the channel, 

in particular on magazines and voiceovers for TV dramas. 

A new milestone was passed when, in October 2004, TV Breizh became a 

technology provider and started to broadcast Pink TV. 

In March 2005, Ushuaïa TV joined the TV Breizh broadcasting platform in 

Lorient, which already hosted Odyssée and Histoire, two other theme channels 

from TF1’s Discovery stable. TV Breizh also provides equipment duplication, 

verification and digitisation services and makes self-promotional items 

for its client channels. 

In becoming a technology provider for other nationwide channels, TV Breizh 

has consolidated its presence and reasserted its Breton roots. Directly or 

indirectly, the channel now employs 54 people (31 at TV Breizh, 8 journalists 

at Ouest-Info and 15 technicians at Objectif Ouest). 

are traceable. 41 major incidents (ie, 

affecting the picture or sound) of 

internal origin (equipment, operation, 

power, etc.) were recorded in 2005, 

with an aggregate elapsed time of 23 

minutes. 12 incidents affected the DTT 

signal only, giving a signal availability 

rate of 99.996%. 

■ Research and development 

There are three main strands to TF1’s 

research and development activity. 

New technologies 

There are two main areas of R&D in 

new technologies: 

• at TF1, in the Technologies and 

Internal Resources Division, studies 

of new technologies (digital 

broadcasting, portability of filming 

equipment, networks, exchanges of 

information, image processing, etc.) 

and related new services (interactivity, 

VOD, porting of content to mobile 

phones, game consoles, etc.); 

• at TPS: high definition, mobile TV, 

ADSL, the MPEG-4 standard, home 

networking. 

Marketing 

The marketing departments of the 

advertising and broadcasting divisions 

carry out behavioural studies, 

research into new ratings (joint viewing) 

and sociological studies, and process 

and analyse audience statistics. 

Programmes 

Creation and innovation play a very 

important part in TF1’s activity, 

especially as regards entertainment 

programmes, TV dramas and film production. 

In order to keep close track of 

its relations with viewers and address 

their concerns directly, TF1 has set 

up a 12-person viewer response unit. 

In 2005, the unit answered some 

200,000 calls, e-mails and letters. The 

service is one way of getting feedback 

from viewers about the quality of 

programmes on air. 

Clerical 

& technical 

Managerial 

Women 

Men 

Total number 

of employees 


4,100 (+2%) 

Breakdown by 


3,716 

1,040 

2,676 

4,074 4,144 

1,225 

2,849 

1,142 

3,002 

2003 2004 2005 


in France (%) 

48 47.9 47.8 

52 52.1 52.2 

2003 2004 2005 

2003 2004 2005 




(France) 

481 

431 

381 

215 

203 

189 

192 

Average age: 

38 


of service: 

9 years 

5.3 6.2 5.9 

94.7 93.8 94.1 

2003 2004 2005 

228 

266 

2003 2004 2005 

2003 2004 2005 

Fixed-term 

Permanent 

Investment in 

Percentage of contract 

sponsorship initiatives workers (%) 

(€m) 

18 13.6 

16 

12.3 

11.5 

14 

Clerical 

& technical 

Managerial 


79

BOUYGUES TELECOM 

EDITORIAL 

THE CHALLENGES FACING BOUYGUES TELECOM 

by Philippe Montagner, Chairman and CEO 

and Nonce Paolini, Deputy CEO 

Aware of the environmental and societal impacts of its activity, Bouygues 

Telecom again took many initiatives in those areas in 2005. They are integrated 

into a proactive approach intended to be both practical and incremental. 

It is practical so that genuine progress can be made and so that all our employees 

can understand what they have to do in their daily work. 

It is incremental because the firm needs to be realistic and take a long-term 

view. Bouygues Telecom has set out on the path of continuous improvement: 

numerous performance indicators have been introduced to measure results, 

which then help to define new targets for progress. 

Issues 

One of our concerns is to ensure that the radio masts we install each year to 

extend our network coverage blend into their environment as well as possible. 

We also need to be more transparent with regard to the potential health effects 

of radiofrequencies from both radio masts and handsets. Waste management, in 

particular handsets and obsolete equipment, is another important environmental 

issue. 

Where society is concerned, our aim is to give growing numbers of customers 

access to mobile telephony. Bouygues Telecom already covers over 98% of the 

French population and is taking part in a government-supervised scheme to 

cover remaining blind spots. We also have a duty to protect children against 

offensive content, especially in the context of mobile multimedia and our 

i-mode TM services. 

Main developments in 2005 

Arrangements for collecting and recycling handsets have been introduced at 

all our points of sale. We have incorporated High Environmental Quality criteria 

into the design and construction of our new Customer Relations Centre 

in Bourges. 

Two base stations powered by renewable energy sources have been built, 

one using solar and wind power, the other fuel cells. Both experiments are 

the first of their type in the world. 

We have extensively supported the creation of the Health and 

Radiofrequencies Foundation which, under the aegis of the Research Ministry, 

funds programmes to study the effects of exposure to radiofrequencies and 

disseminate the results. 

Areas of progress 

We can further optimise the quality and quantity of our means of communication 

and our packaging so as to generate as little waste as possible. 

We can improve the ways in which we address disability issues, at two levels. 

We can increase the range of our mobile phone services for people with disabilities, 

and we can make greater use of the protected sector to participate 

in the broader effort to integrate disabled workers. 

We must also continue to encourage customers to use paperless billing, 

which helps to preserve the environment. 

Bouygues Telecom’s commitments 

Three years ago, we signed up to the United Nations Global Compact, promising 

to promote ten principles relating to human rights and environmental 

protection. We are pleased to see that our suppliers have responded favourably 

to our initiative, once we had drawn their attention to the issue. Since 

2005, we have also supported the “Earth Challenge” in partnership with the 

Nicolas Hulot Foundation. 

The majority of our workforce are young people (the average age is 32) who 

support that commitment with enthusiasm and an acute sense of responsibility. 

For Bouygues Telecom, sustainable development is not a concept but 

a reality. 

OUR APPROACH 

Bouygues Telecom’s commitment to 

sustainable development is based on 

three pillars: 

a commitment to the environment: 

• reducing nuisance and pollution, 

• collecting and recycling waste, 

• reducing electricity and paper consumption, 

• designing new buildings; 

a commitment to society: 

• promoting health and safety, 

• supporting customers in their phone 

use, 

• addressing disability issues, 

• monitoring the origin of products, 

• supporting good citizenship initiatives; 

a management system based on: 

• improving quality, 

• controlling operational risks, 

• promoting constant innovation, 

• maintaining dialogue with stakeholders. 

OUR ORGANISATION 

Sustainable development initiatives 

are coordinated by the Quality and 

Environment division in liaison with 

operational and support units. In practice, 

this is done by a committee made 

up of representatives of the firm’s 

main lines of business, which meets 

once a month and reports regularly to 

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senior management. 

The committee circulates information 

both in-house and outside, in particular 

through a specific website. Project 

managers supervise action plans that 

are implemented on the ground by 

two-person teams comprising representatives 

of Support Services and 

Human Resources (there is one team 

for each of the firm’s ten main sites). 

Employees directly involved in sustainable 

development are offered inhouse 

training on environmental and 

societal issues. 

Information about particular achievements 

and best practices to be shared 

is circulated more widely via the 

company intranet and in-house magazine 

and at events organised during 

Sustainable Development Week, a high 

point of each year. 

Some actions are illustrated by the 

principle of the Global Compact to 

which they relate. Performance indicators 

refer to Global Reporting Initiative 

indicators (1) . 

OUR COMMITMENT TO 

THE ENVIRONMENT 

Reducing nuisance 

and pollution 

8* 

■ Base stations that blend 

into the environment 

In 2005, Bouygues Telecom took further 

steps to preserve the living environment 

and heritage of the French 

regions when rolling out its network. 

The firm applies the Good Practice 

Guide drawn up by AMF, the association 

of French mayors, and Afom, 

the French mobile phone operators 

association. This is designed to ensure 

that the installation of radio masts is 

a more transparent process involving 

greater consultation and that it 

takes place more harmoniously, wherever 

the site. The firm also respects a 

set of principles and technical rules 

contained in a document entitled 

“Radio Masts in Harmony with their 

Environment”, which it has applied 

in assessing the extent to which over 

1,800 sites blend into their surroundings. 

Bouygues Telecom endeavours to 

group its masts with those of other 

operators whenever possible, taking 

account of its radio coverage objectives 

and technical and legal requirements. 

In the same spirit, it proposes 

the construction of a new mast only 

as a last resort, after considering all 

Bernard Chaffange, director of Lyon Saint-Exupéry 

International Airport, where a Bouygues Telecom mast has 

been installed 

Bouygues Telecom has decided to sign up to the Lyon Saint-Exupéry 

International Airport eco-partners charter. What do you expect from 

this partnership? 

We wanted to unite the businesses on our site behind our actions to promote 

greater environmental responsibility. It’s a way of giving substance to our 

commitment. 

We expect a lot from Bouygues Telecom, as we do from all those that have 

signed up to the charter. Above all, we expect them to come up with ideas for 

the very practical measures we intend to take, as well as sharing best practices 

and providing feedback. The challenges are considerable and the objectives 

ambitious, in terms of both energy saving and waste recycling. 

How do you see Bouygues Telecom’s commitment to the environment 

and society? 

We operate in very different fields and yet we have something very important 

in common: we both “go further in bringing people together”! That is what 

guides us as we assume our responsibilities in areas like user access to 

services, waste recycling, transparency with regard to nuisances and their 

health effects. For example, I find the employee satisfaction surveys that 

Bouygues Telecom has decided to introduce particularly interesting. 

options that make use of existing 

facilities. 

Bouygues Telecom has developed 

twenty or so solutions for integrating 

aerials and their supports, including 

false chimneys, plant camouflage, 

reconstituted roofs, etc. As a result, 

it has been possible to install equipment 

on sites as strictly protected 

as the Château of Chambord and 

Montpellier’s historic city centre. 

■ Reducing greenhouse gas 

emissions 

In order to reduce travel by employees 

between sites in the Paris region, 

Bouygues Telecom launched a 

Company Travel Plan in early 2005 

and stepped up its efforts: 

• by making increasing use of videoconferencing, 

which not only saves 

time but also helps to reduce pollution 

from cars and aircraft and 


reduces the risk of road accidents; 

• by extending the shuttle service 

between sites in the Paris region, 

which carried 21,800 employees in 

2005. 

In partnership with the Nicolas Hulot 

Foundation, the firm promotes the 

Earth Challenge’s “green attitude”: 

I use my car less for going to work; 

I make short journeys on foot; I drive 

more smoothly and less fast; I take the 

train whenever I can. 

2,700 employees, 38% of 

the workforce, had committed 

to the Earth Challenge 

by the end of 2005. 

9 

Since May 2005 Bouygues Telecom, 

in partnership with the city of Lyon 

and JC Decaux, has taken part in 

the Vélo’V scheme, whereby the city 

makes 2,000 bicycles available for 

hire to inhabitants round the clock at 

200 pick-up points. 

Smart chips inside each bicycle pro- 

(1) an international database of sustainable development indicators 

* Some actions are illustrated by the principle of the Global Compact to which they relate. 


81


cess all the technical information, 

such as availability, the state of brakes 

and lights, etc. A modem and a SIM 

card provided by Bouygues Telecom 

transmit the customer’s identity and 

financial information to JC Decaux’s 

electronic money servers via the GPRS 

network. 

Vélo’V scheme in Lyon 

Blending base stations into the environment in Besançon 

Collecting and 

recycling waste 

8 

■ Batteries and handsets 

Without awaiting publication of the 

decree of 13 August 2005 on waste 

electrical and electronic equipment, 

Bouygues Telecom had already taken 

the initiative of collecting and recycling 

unwanted handsets from aftersales 

service and repair centres. 

In May 2005, the collection scheme 

was extended to 500 stores in the 

Clubs Bouygues Telecom network. 

Handsets still in working order are 

reconditioned and sold on in emerging 

countries to give deprived populations 

access to means of communication. 

The others are dismantled so that 

materials like gold, silver and plastics 

can be recovered and recycled. 

This scheme complements the one to 

collect and recycle batteries, which 

has been in place for a number of 

years (6,314 tonnes were processed 

in 2005). 

The number of handsets collected at 

outlets in the second half of 2005 

amounted to 3% of sales by volume. 

Bouygues Telecom intends to step up 

its communication to customers in 

2006 to encourage them to return old 

handsets to points of sale. 

■ Waste from base stations 

In 2005, Bouygues Telecom concluded 

a nationwide contract with a network 

of employment centres for the disabled 

with the aim of using people 

with disabilities to dismantle and 

recycle network equipment (aerials, 

electronic cards, etc.) reaching the 

end of its lifetime. Used batteries 

from radio relay racks continue to be 

collected and passed on to specialist 

companies for recycling. 

■ Waste from office sites 

Two years after the introduction of 

paper sorting in our offices, the compliance 

rate has risen from 65% to 

78%, reflecting growing support for 

the system among employees. 

A scheme for collecting and recycling 

used office products (printer 

and toner cartridges, computers and 

peripherals) and used neon lighting 

tubes has also been introduced. 

In addition, Bouygues Telecom encourages 

employees to discard their own 

used batteries at collection points 

on all sites, collecting 428 kg of batteries 

in 2005. The batteries are then 

processed by a specialist recycling 

company. 

Reducing electricity 

consumption 

■ At base stations and 

computer centres 

8 

Automatic GSM electricity meters were 

Experimenting with renewable energy resources 

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installed at fifty or so base stations in 

2005. Initial data from the meters, 

transmitted to the operating software 

over the Bouygues Telecom network, 

was used to define a consumption 

profile that then served as the basis 

for an optimisation plan. 

Corporate customers are offered the 

same technology to help them monitor 

and optimise their energy consumption. 

Bouygues Telecom has achieved a 3% 

like-on-like reduction in electricity 

consumption at its computer centres 

by redefining admissible temperature 

differences and humidity levels. 

Bourges customer relations centre 

At the two computer centres that 

consume the most power, the company 

has concluded a contract with 

EDF under which the electricity utility 

undertakes to provide 15% of the 

electricity consumed from renewable 

energy sources. 

■ Experiments 

with renewable 

energy resources 

9 

Wishing to diversify the sources of 

the energy it uses, Bouygues Telecom 

has tried out different ways of using 

renewable energy sources at two base 

stations in the south-west of the country, 

one using a combination of wind 

and solar power, the other, in partnership 

with Air Liquide, using fuel cells. 

These two initiatives, the first in 

the world of their type, were prizewinners 

in the Economical and Clean 

Technologies Awards, organised on 

1 December 2005 by Ademe, the 

Agency for the Environment and 

Energy Management, and the magazine 

Industrie et Technologies. The 

company intends to carry out further 

similar experiments. 

■ In offices 

Bouygues Telecom has continued its 

efforts to reduce electricity consumption 

in offices by installing low-consumption 

bulbs and motion sensors in 

washrooms. 

In its six Customer Relations Centres, 

2,700 customer adviser screens have 

been replaced by LCD flat screens that 

use half as much power, generating 

an economy of over 200 MW in a full 

year. 

Optimising paper 

consumption 

■ For communication 

purposes 

Bouygues Telecom has significantly 

reduced the amount of paper it uses 

for communicating with customers, 

from 4,500 tons in 2003 to 3,000 tons 

in 2005. A new initiative was launched 

in 2005 to optimise the production 

and delivery of POS (point of sale) 

materials. 

The company is also considering using 

paper certified by a body like the 

Forest Stewardship Council (1) and recycled 

paper for certain purposes. 

■ For office use 

Paper consumption in Bouygues 

Telecom offices fell by a further 18% 

in 2005 compared with 2004. The 

target in 2006 is seven reams of paper 

per post. In the last quarter of 2005, 

the company installed new networked 

digital photocopiers, set by default to 

print recto-verso and equipped with a 

scanning function that greatly limits 

the use of photocopies. 36 machines 

were operational by the end of the 

year and over 200 will come into 

operation over the next two years. 

Since 2001, new computer tools have 

enabled staff to order office supplies, 

meals and travel, and to manage their 

schedules and submit purchasing 

requests and expense accounts over 

the intranet without issuing 

paper documents. 

8 

More generally, at the end 

of 2005 over 80,000 customers had 

taken advantage of the new electronic 

billing facility, which is both immediate 

(customers are informed by e-mail 

as soon as the new bill is ready) and 

practical (they can consult, download 

and store detailed invoices wherever 

they are). Paperless billing is automatically 

included in contracts with 

corporate customers. 

Environmentallyconscious 

design of 

buildings 


Bouygues Telecom has applied High 

Environmental Quality (HEQ) principles 

to the design and construction of 

its new Customer Relations Centre 

in Bourges. The first stone was laid 

on 23 September 2005 and the site’s 

application for HEQ certification was 

approved by CSTB, the construction 

sector technical approval body, during 

the design and scheduling phase. 

For the site, Bouygues Telecom has set 

itself precise targets in terms of: 

• energy management (high-performance 

double glazing, reversible 

air-conditioning, low-consumption 

bulbs, etc.); 

(1) a label that guarantees sustainable management of forestry resources 


83


• waste management (optimisation of 

the storage area, waste-paper sorting, 

etc.); 

• acoustic and visual comfort of customer 

advisers (thicker than usual 

false ceiling, anti-noise shields on 

skylights, indirect lighting integrated 

into the fixtures and fittings, etc.); 

• ergonomics of workstations (use of 

sustainable materials, layout validated 

by ergonomists, etc.). 

OUR COMMITMENT 

TO SOCIETY 

Promoting health 

and safety 

■ Transparency about 

the health effects of 

radiofrequencies 

7 

The Health and Radiofrequencies 

Foundation was created in July 2005 

under the aegis of the Research 

Ministry. 

A public interest body of which 

Bouygues Telecom is a founder member, 

its aim is to define, promote and 

fund epidemiological, experimental 

and sociological research into the 

effects of exposure to radiofrequencies 

and to disseminate the results to 

professionals and the public. 

Always attentive to the health of its 

employees, in 2005 the company 

trained all its maintenance staff in 

the use of isotropic sensing devices 

to monitor exposure levels during 

assignments. 

Bouygues Telecom also continues to: 

• answer all correspondence it receives 

on the subject; 

• send out a brochure entitled 

“Radiofrequencies and Health: The 

Facts” free of charge on request 

(45,300 copies had been circulated 

by end-2005); 

• organise conferences and debates 

on the subject; 

• commission an accredited independent 

inspector, according to a 

protocol drawn up by the National 

Frequencies Agency, to measure the 

various components of electromagnetic 

fields around its installations 

in response to written requests from 

local residents, elected officials or 

local authorities. 

To find out more, visit the website 

www.sante.bouyguestelecom.fr 

■ Workplace health and 

safety 

With an accident frequency rate of 1.36 

and a severity rate of 0.052, Bouygues 

Telecom’s results in 2005 were once 

again better than the average for the 

industry. 

In addition to its statutory obligations, 

Bouygues Telecom is continuing to 

invest in preventive measures to provide 

staff with a safe working environment 

and enhance the quality of life 

and well-being within the company. 

Significant actions in 2005 included: 

• the introduction of day-long accident 

prevention forums comprising workshops 

and teach-ins (extinguishing 

real fires, road safety, etc.), in which 

354 employees participated in 2005; 

• a study of the ergonomics of customer 

adviser workstations (computer 

applications, atmosphere, workload), 

resulting in a switch to low-reflection 

flat screens that cause less 

eye-strain; 

• the development and enhancement 

of software to manage accident prevention 

plans in the context of network 

maintenance operations. 

A number of preventive health initiatives 

for staff were carried out in 

2005, including: 

• the production of a guide to risk prevention 

in handling operations; 

• a ban on phoning when driving, even 

with a hands-free kit or earpiece; 

• an AIDS campaign organised in all 

the company’s establishments; 

• an anti-drinking campaign. 

The establishment of a Stress and 

Well-Being Observatory enables occupational 

health professionals to identify 

the best solutions to problems 

encountered by individual employees. 

In 2005, 3,800 people agreed to take 

the test on a personal basis. 

Supporting our 

customers in their 

phone use 

1-2 

■ Protecting children 

against offensive content 

Bouygues Telecom, as a responsible 

corporate citizen, takes steps to protect 

children against offensive content. 

It stepped up its communication on 

the subject in 2005 through articles 

in magazines for prospective and 

actual customers, enclosures with 

invoices and a Child Protection link 

on the home page of its website, 

www.bouyguestelecom.fr 

In November 2005, Bouygues 

Telecom helped to draw up the first 

free guide, entitled “Your Child and 

Mobile Telephony”, published by 

Afom in partnership with the publisher 

Autrement, the National Union 

of Family Associations and Dr. Claude 

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Allard, a psychiatrist and psychoanalyst. 

The guide gives parents helpful 

information for educating their children 

in mobile phone use. 

In addition to these information campaigns, 

the company offers users of 

mobile multimedia services direct 

access to child protection measures 

from their handsets, enabling them: 

• to obtain information about the 

potential risk of certain types of 

content unsuited to children; 

• to activate parental control free of 

charge with the Bouygues Telecom 

Customer Relations Centre; 

• to report illegal content to an internet 

contact point. 

■ Informing customers 

about their consumption 

So that customers can call with no 

worries and control their expenditure, 

Bouygues Telecom offers means of 

control such as a block on non-contract 

calls or the possibility for prepay 

customers to choose between different 

value recharges. Contract customers 

also receive a text message alert 

if they cross a threshold they have 

previously determined. 

A service available to Universal Mobile 

customers who have exhausted their 

credit enables them to send up to ten 

free call-back text messages a month. 

Enabling as many people 

as possible to access our 

services 

■ Improving access to 

mobile telephony for people 

with disabilities 

As a member of Afom, the mobile 

phone operators association, in May 

2005 Bouygues Telecom signed a 

charter under the aegis of the interministerial 

delegation for people 

with disabilities and the Electronic 

Communications and Posts Regulatory 

Authority (Arcep), undertaking to step 

up and give a long-term commitment 

to actions designed to give disabled 

people easier access to mobile telephony. 

The Secretary of State for the 

Disabled emphasised the exemplary 

nature of the initiative, stating that “it 

is the first economic sector to give a 

commitment of this type.” 

A handset labelling scheme has been 

introduced to meet charter commitments. 

Bouygues Telecom examines 

each new handset according to criteria 

for each different type of disability. 

The company is continuing its action 

in partnership with the association 

HandiCaPZéro and proposes the 

free installation of two voice activation 

software packages for the 

sight-impaired, Mobile Accessibility, 

launched in November 2004, and 

Mobile Speak, introduced at the end 

of 2005. 

In addition to voice activation of the 

main functions, Mobile Speak also 

offers access to specific information 

on the internet, a choice between 

two audio profiles, incorporation of a 

colour and light detector, GPS utilities 

and an audio-book service. Price information 

and the service guide continue 

to be delivered free of charge 

in Braille and can be accessed from 

the Bouygues Telecom website. Sightimpaired 

customers can also ask for a 

large-type invoice. 

■ Coverage of blind spots 

Under the national agreement between 

the government and the mobile phone 

operators, Bouygues Telecom is con- 


Jean-Pierre Bigan, managing director for France of Vivanco, 

an importer of mobile phone accessories 

Do you think social audits can be a genuine source of progress? 

They are the only guarantee of a break with previous practices. Partner 

companies in the countries concerned have to accept such audits in order 

to safeguard their growth, because they know it’s something for which their 

customers can sanction them. 

Our experience shows that improvements can easily be made in some areas, 

like health and safety equipment and facilities, things like lighting, first-aid 

kits, how people move around, safety measures for dangerous machinery, 

etc. 

Working conditions are the next step: age, formal employment contracts, 

penalties, and so on. Pay and hours are more difficult subjects to tackle 

because they are on the borderline of interference in economies that differ 

fundamentally from one country to another. 

What benefit do you reap from this new approach, taken at Bouygues 

Telecom’s instigation? 

As far as we’re concerned it’s a logical step towards ensuring that we have 

the right partners, partners that are willing to include social factors as well 

as the traditional criteria that guide our choice, such as products, design, 

quality, competitiveness, etc. 

It is unavoidable in a context of globalisation. To do nothing would be utterly 

hypocritical. Our real power lies in establishing partnerships with companies 

that have been clearly selected with those factors in mind. 


85


tinuing to cover blind spots (areas 

not covered by any mobile phone 

operator). 

By the end of 2005, the company had 

installed: 

• 69 roaming sites, where one operator 

has a single mast on which other 

operators’ customers can make and 

receive calls; 

• 31 shared sites, where a single mast 

hosts each operator’s own network. 

Bouygues Telecom will continue rollout 

in 2006, installing over 200 new 

sites with the aim of ultimately reaching 

the 730 called for in the agreement. 

Favouring equal 

opportunity 

■ Employing disabled 

workers 

6 

Bouygues Telecom works closely with 

employment agencies specialising in 

the placement of people with disabilities. 

Open days have been held in 

Customer Relations Centres, attended 

by representatives of specialist bodies 

and people with disabilities. The number 

of disabled workers has increased 

by more than 30% compared with 

2004. The company is also developing 

partnerships with sheltered workshops 

and employment centres for 

the disabled. 

Bouygues Telecom has participated in 

a project by Agefiph, an agency that 

promotes the employment of disabled 

workers, to set up a specific link on 

its website (www.agefiph.asso.fr) to 

encourage the employment of people 

with disabilities in Customer Relations 

Centres. 

Bouygues Telecom’s Executive 

Committee regularly monitors the 

company’s disabled employment 

policy. 

■ Diversity in the workforce 

Bouygues Telecom promotes nondiscrimination 

and equal opportunity 

in the workforce. To give just one 

example, the company had employees 

of 40 different nationalities at the end 

of 2005. 

48% of employees are male and 52% 

female, though two-thirds of clerical/technical 

and supervisory staff are 

female and two-thirds of managerial 

staff are male. 16.7% of women were 

promoted in 2005 and 15.1% of men. 

■ Skills development 

In 2005, as every year, Bouygues 

Telecom’s spending on training considerably 

exceeded its legal obligation. 

Almost 6,400 employees took at 

least one training course. 

The emphasis is on high value-added 

vocational training, management 

courses and courses designed to 

make staff more employable and more 

mobile. 

In-house training in a wide variety of 

areas (legal affairs, telecoms, maintenance, 

quality, labour relations, etc.) 

now accounts for a significant share 

of total investment in continuous education. 

The Customer Service initiative was 

repeated in all Bouygues Telecom 

stores for the fourth year running. 

Under the scheme, customer advisers 

wishing to gain experience of working 

in stores spend time alongside sales 

staff, welcoming customers and providing 

them with information about 

products and services. The scheme 

has been a real success, with almost 

1,600 employees taking part in 2005. 

Monitoring the origin 

of our products 

4-5 

As a signatory to the Global Compact, 

in 2005 Bouygues Telecom embarked 

on a programme of social audits 

in low-cost countries, especially in 

China and Eastern Europe, with the 

aim of ensuring that products are 

manufactured under decent working 

conditions for the employees of its 

suppliers and their sub-contractors. 

Eight audits were carried out by SGS, 

a specialist firm, leading either to 

remedial measures or removal of the 

supplier from the approved list. 

Supporting good 

citizenship initiatives 

Bouygues Telecom carried out various 

actions in 2005 as part of its sponsorship 

policy. 

• A three-year partnership was 

concluded with the Nicolas Hulot 

Foundation for the Earth Challenge, 

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including distribution of the “Green 

Book” at Bouygues Telecom outlets, 

a message from Nicolas Hulot sent 

to all Contract customers and a free 

text message to join the scheme. 

120,000 customers have supported 

a charter that sets out ten simple 

ways of reducing greenhouse gases 

with the aim of cutting carbon dioxide 

emissions by 40,000 tonnes a 

year. 

• A partnership with the French multiple 

sclerosis association Unisep 

collected 500,000 donations during 

Multiple Sclerosis Week through 

recharges purchased by Prepaid customers. 

Contract customers could 

also send a text message to make 

a donation to Unisep during a campaign 

that lasted from 1 December 

2005 to 15 January 2006. 

Bouygues Telecom made a top-up contribution 

to each donation. 

• A club of volunteers has been created, 

through which staff members 

can provide practical assistance to 

good causes, such as physical rehabilitation 

centres and charities for 

the disabled and the deprived. 

OUR MANAGEMENT 

SYSTEM 

In support of its commitment to the 

environment and society, Bouygues 

Telecom is continuing to optimise its 

quality-based management system, 

operational risk management and 

innovation processes. Dialogue with 

stakeholders is also a central concern, 

whether within the firm or outside. 

Quality-based 

management 

In 2005, as every year since 1997, overall 

customer satisfaction was measured 

by means of a survey in which 

a sample of customers are asked how 

they perceive Bouygues Telecom. 

Six main areas are explored and compared 

with the perceptions of other 

operators’ customers. The six areas 

are image and consideration, service 

and customer assistance, the relational 

information system, equipment 

(handsets, products), services and 

functionalities, and network. 

Bernard Dupré, chief executive of Afutt, 

the French telecom users association 


What do you expect from Bouygues Telecom in the context of its commitment 

to the environment and society? 

Bouygues Telecom, like all the other mobile phone operators on the planet, 

has to have a clear and ambitious sustainable development policy that 

addresses the main issues: promoting the recycling of handsets and the collection 

of batteries, reducing the visual impact of radio masts and ensuring 

that exposure to radiofrequencies remains below permitted levels. As far 

as society is concerned, Bouygues Telecom must ensure that children are 

protected, make provision for people with disabilities, participate in regional 

development and impose ethical rules in its commercial activities. 

In all those areas Bouygues Telecom must give specific, quantifiable commitments 

that are assessed at regular intervals. They must be in proportion to 

the issues at stake and move forward from one year to the next. 

What do you think of Bouygues Telecom’s relations with its customers? 

The system for monitoring dissatisfaction and complaints set up by Afutt 

shows a steady and significant decline in complaints about Bouygues 

Telecom over the last three years. This positive trend is all the more remarkable 

in view of the steady rise in the number of customers over the same 

period. The achievement is certainly attributable to a policy of improving 

customer relations and better addressing customers’ concerns. The creation 

of a Consumer department within the company and the option of using an 

ombudsman to settle certain disputes are hallmarks of a company that wants 

its consumer policy to reflect current best practice. 

However, some features of the mobile phone market still militate against the 

establishment of evenly balanced, healthy, long-term relations with consumers. 

Contract periods, arcane pricing and the sometimes questionable wording 

of advertisements and promotional offers are matters on which Afutt has 

put forward proposals designed to further improve relations of trust between 

customer and supplier. 


87


After each survey, the results are presented 

in detail to operational staff, 

who then have to come up with action 

plans to further improve customer 

satisfaction. 

Complaints received by the customer 

service division are analysed twice a 

month, giving a close-up view of the 

difficulties encountered. 

Backing up these measures, the company 

is continuing to improve its 

processes with the aim of making 

them more reliable and secure while 

increasing internal efficiency. Based 

on a collaborative method involving 

players from all parts of the firm, the 

approach is designed to provide a 

practical response to the company’s 

service promise. 

Seven areas have been identified for 

each stage of the customer lifecycle, 

from anticipating future needs to 

the processing of requests through 

contact channels. Each area is overseen 

by a member of the Executive 

Committee with the help of a process 

manager who, acting as coordinator, 

ensures end-to-end operation and 

optimisation. 

With the aim of comparing its processes 

with best practice, in April 2005 

Bouygues Telecom created a tool baptised 

Reflex (Reflection on Excellence), 

inspired by the European Foundation 

for Quality Management model. 

The tool: 

• analyses an executive committee’s 

performance according to 

nine criteria, 

• measures strengths and identifies 

areas for improvement, 

• raises employee awareness of the 

need for continuous progress. 

Tried out in divisions as different as 

Organisation & Purchasing, Human 

Resources and IT, Reflex is a user- 

10 

friendly and rapid stimulus for 

exchanges and the preparation of 

operational action plans. 

In order to raise awareness and develop 

skills among employees who are 

experts in their own particular field, 

new information and training sessions 

have been organised: 

• on waste management and regulations 

relating to waste electrical and 

electronic equipment, 

• compliance with Global Compact 

principles in relations with suppliers 

(for the Purchasing, Legal Affairs 

and Supplier Quality Assurance divisions). 

In April 2005, Bouygues Telecom introduced 

Ethics and Management courses 

for managers, following on from those 

organised by the Bouygues group (185 

staff had attended such courses by 

end-2005). A code of conduct covering 

relations with suppliers has also been 

drawn up and circulated to all staff. 

To monitor implementation and measure 

the performance of its actions, 

in 2005 Bouygues Telecom gave 

fresh impetus to its audit plan, 

closely involving regional agencies. 

The Personal Safety competition was 

extended in 2005 to include the environment 

and the security of property 

in all establishments. The competition 

is a way of comparing employees’ 

commitment and raising their awareness 

of best practice. 

The Aix-en-Provence agency came first 

with a clean sheet for personal safety 

(safety notices properly displayed, 

compliance with fire regulations, regular 

checks, evacuation exercises, prevention 

plans, compliance with rules 

on smoking and drinking) and the best 

result for security of property (badge 

display, vulnerability of workstations, 

compliance with procedures for the 

destruction of classified information). 

Managing operating risks 

As well as identifying and addressing 

environmental and societal risks, as 

mentioned earlier, Bouygues Telecom 

strengthened its crisis management 

arrangements in 2005. 

On 17 November 2004, a malfunction 

in the software of a vital network component 

prevented the company from 

providing communication services for 

several hours. A number of measures 

have since been taken: 

• hardware redundancy has been 

enhanced in response to the growing 

number and complexity of software 

systems; 

• a review of possible incidents is now 

carried out from the standpoint of 

the extended firm when the company’s 

critical processes are analysed. 

Managers of critical processes have 

also reviewed their indicators and 

alert thresholds; 

• a crisis unit has been set up in each 

of the eight operating structures, 

with a skeleton staff on duty round 

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the clock. Equipment and procedures 

for communicating between units 

have been enhanced. 

As part of the company’s policy to prevent 

intruders and in the context of the 

government’s anti-terrorist measures, 

in June 2005 certain sensitive sites 

(especially computer centres) were 

registered with the National Defence 

General Secretariat as essential sites. 

CCTV trials were conducted to assess 

the effectiveness of CCTV in response 

to incidents such as fire, vandalism 

and break-ins. 

Bouygues Telecom has also joined 

a commission that monitors waste 

management regulations. 

Innovation 

In November 

2005, Bouygues 

Telecom organised 

a four-day 

Innovation Forum, the third of its kind, 

with the aim of recognising and stimulating 

the capacity for innovation in 

all the company’s units. Participants 

in the event were able to discover 

entries for the Innovation Trophies 

competition as well as the company’s 

innovative technologies and best 

practices. 

The fourteen Innovation Trophy prizewinners 

included: 

• the new layout concept for Bouygues 

Telecom stores (Customer category), 

• a small, flat aerial, easy to integrate 

into the environment, developed by 

the Network division (Corporate category), 

• a system for automatically reading 

supplier invoices, which saved 1.2 

million photocopies in 2005 through 

electronic scanning and storage 

(Public category). 

Bouygues Telecom also puts innovation 

at the heart of its strategy with 

the aim of providing customers with 

handsets and products that meet their 

expectations. 

In 2005, the company won the 

Best Innovator prize, sponsored by 

AT Kearney and the magazine 

L’Expansion, in the “Adaptation to the 

Market” category. 

The award recognises Bouygues 

Telecom’s initiatives in that sphere, 

including the creation of a science 

council, an annual Innovation Forum 

and a new technology showroom 

where prototypes are displayed. 

Dialogue with 

stakeholders 

On 1 December 2005, the Competition 

Council fined Bouygues Telecom for 

taking part in alleged collusion on the 

mobile phone market. 

The firm pointed out that it had been 

asking the authorities for several 

years to rectify the imbalance on the 

French mobile phone market, which 

had serious and long-term adverse 

effects on competition. 

Bouygues Telecom filed seven complaints 

or requests for arbitration 

between October 2002 and November 

2005 and deplores the fact that none 

of them has resulted in measures that 

would enable the third operator to 

benefit from a level playing field in the 

competitive arena. 

■ Customers 

As well as measuring customer perception 

and taking steps to improve 

customer satisfaction, Bouygues 

Telecom organises round tables with 

targeted customer categories (people 

with disabilities, for example) to identify 

their specific expectations and 

develop appropriate products and 

services. 

In 2005, portfolio-based customer 

management was extended to the 

entire customer base, ensuring closer 

relations between customer advisers 

and customers. The initiative contributes 

to fulfilment of the company’s 

service promise. 

The Consumer department, which 

interfaces with consumer bodies, 

stepped up its action in 2005 and, 

with the consumer association Adeic, 

embarked on a study of the standardisation 

of accessories. 

Bouygues Telecom has given detailed 

presentations of its commitment to 

the environment and society to participants 

in regular quarterly meetings 

with consumer associations so as to 

elicit their reactions and expectations 

on the subject. 

■ Staff 

Staff are regularly asked for their 

opinion on the company and its operation 

through a staff satisfaction survey. 

The questionnaire contains 90 

questions under five headings: business 

and trends, organisation and 


operation of the company, working 

conditions, labour relations, Bouygues 

Telecom as a mobile phone company 

and operator. The results of the survey 

are analysed by an outside company 

which, in accordance with the code of 

conduct, guarantees that answers are 

anonymous. 

A number of areas for improvement 

have been identified: managers 

who are closer to employees and 

who listen and engage in dialogue, 

immediate superiors who are willing 


89


attracted some 5,000 people to stands 

manned by volunteers from the Club 

Objectif Soleil. 

■ Suppliers 

Bouygues Telecom has informed over 

200 suppliers of its membership of the 

UN Global Compact, and over 80% of 

them have said they are willing to support 

the company in its commitment. 

The company is gradually introducing 

specific requirements arising from 

compliance with Global Compact principles 

into its calls for tender and 

contracts. 

In addition, a detailed questionnaire 

has been sent to a targeted panel of 

thirty or so suppliers to find out their 

attitude towards sustainable development 

and what action they envisage 

taking jointly with Bouygues Telecom. 

■ The community 

For the fifth year in succession 

Bouygues Telecom attended the 2005 

Mayors and Local Authorities Fair, an 

opportunity for the company to present 

its environmental and social initiatives, 

to which local elected officials 

are particularly sensitive. 

On a stand using recyclable and natural 

materials, Bouygues Telecom high- 

to pass on concerns, simpler methods 

and processes, more operationally 

effective cross-cutting procedures, 

and greater individual empowerment. 

Social dialogue 

The high turnout for elections at 

Bouygues Telecom (80% in 

2002, 84% in 2004) confirms 

the extent of employees’ 

involvement in corporate 

life and their interest in social dialogue. 

Several collective agreements were 

concluded in 2005: 

• a doubling of the average company 

contribution to complementary 

health cover, 

• new ways of providing support for 

internal mobility (transfers between 

the regions and Paris), 

• a profit-sharing agreement, 

3 

• an agreement on social dialogue 

and the resources available to staff 

representatives, 

• a special effort for the lowest paid 

during annual wage negotiations. 

Events 

In 2005, Bouygues Telecom provided 

information about its environmental 

and social initiatives at 

meetings attended by particular categories 

of staff and during Sustainable 

Development Week, which was a great 

success at the company’s 11 main sites 

(1,168 handsets were collected and 400 

quizzes completed). 

As part of the Earth Challenge initiative, 

the company organised three 

“green days” on the themes of water, 

air and energy with the aim of encouraging 

employees to commit to one of 

the three “green actions” promoted 

on the occasion. The three events 

Bouygues Telecom at the 2005 Mayors Fair 

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Giving a commitment to the Earth 

lighted its involvement in a number of 

innovative projects. 

The company also acted as advocate 

for the Earth Challenge for Local 

Authorities, organised by the Nicolas 

Hulot Foundation under the auspices 

of the Association of French Mayors. 

The aim of the initiative is to encourage 

local authorities to find original 

ways of sensitising the community to 

the need to reduce greenhouse gas 

emissions. 

Almost 300 mayors have given a commitment 

on behalf of their communities, 

symbolically swearing an oath on 

the Bouygues Telecom stand. 

Recycled network equipment 

(tonnes) 

37 27 

100 107 

2003 2004 2005 

Sites evaluated according to the 

10 integration rules (aggregate) 

3,242 

1,381 

2004 2005 

58 

117 

Industrial accident 

frequency rate 

4.49 

3.77 3.77 

1.37 1.58 

3,775 

4,100 

1.36 

2003 2004 2005 

Breakdown by professional 

status 

7,388 

6,954 

7,280 

3,768 

GRI* 

EN 11 

batteries 

excl. batteries 

GRI* 

EN 14 


Telecom 

Profession 

Electricity consumption per 

workstation in offices (in MWh) 

5.52 

4.7 4.59* GRI* 

EN 3 

2003 2004 2005 

Answers to questions about 

radiofrequencies and health 

95 

213 

230 

243 

513 454 

2003 2004 2005 

Industrial accident 

severity rate 

0.21 

0.19 0.19 

0.024 

0.040 

Breakdown by 

type of contract (%) 

Annual paper consumption per 

workstation (reams) 

11.95 

10.28 

8.38 

2003 2004 2005 

EM field measurements requested 

by stakeholders 

451 

379 

388 

GRI* 

PR 1 

2003 2004 2005 

Total number 

of employees 


7,300 (=) 


(%) 

50.6 53.1 51.9 

3,179 3,288 3,512 

49.4 46.9 48.1 

Clerical & technical 

Fixed-term 

Managerial 

Permanent 

2003 2004 2005 

2003 2004 2005 

2003 2004 2005 

* The above indicators refer to Global Reporting Initiative indicators, an international database of sustainable development guidelines. 

0.052 

2003 2004 2005 

1.4 1.1 1.2 

98.6 98.9 98.8 

* change of scope 

in relation to 2004 

figures 

GRI* 

PR 1 

e-mails 

letters 


Telecom 

Profession 

GRI* 

EN 1 

GRI* 

LA 1 

Women 

Men 

Reconditioned or recycled 

handsets 

58,673 

108,966 

119,267 

2003 2004 2005 

2003 2004 2005 


Payroll devoted to continuing 

education (%) 

5.84 5.58 

4.98 

GRI* 

LA 9 

Recruitment 

by status 

1,504 

1,251 

Average age: 

33 


of service: 

5 years 

980 

700 

821 

403 

253 280 

418 

2003 2004 2005 

GRI* 

EN 15 

Regulatory 

threshold 

Clerical & technical 

Managerial 


91

RISKS 

The Bouygues Group is exposed to different types 

of risk in its different business areas. It is continuing 

to step up its risk identification and management 

policy in order to achieve its main operating 

objectives. 

The parent company ensures that 

its main subsidiaries maintain a high 

level of risk awareness. 

Each year, a senior Bouygues executive 

reviews the major risks to which 

the Group is exposed. By analysing 

and raising awareness of risks, he 

actively helps to promote a culture 

within subsidiaries in which risk control 

is regarded as a key aspect of 

management. The parent company 

has also laid down guidelines for the 

management of major risks which are 

implemented in each business area. 

Each division has set up specific risk 

management bodies or structures. 

They in turn take steps to introduce 

risk prevention and crisis management 

systems and training programmes 

in order to control or reduce the 

most important risks they face. 

As the final element in their risk 

management portfolio, subsidiaries 

take out insurance policies or other 

forms of risk cover in accordance with 

the usual practice in their profession. 

OPERATING, 

ENVIRONMENTAL AND 

PUBLIC HEALTH RISKS 


Network technology risks 

The technology needed to deliver a 

mobile telephone service is by nature 

sophisticated. Founded on an infrastructure 

of critical interconnected 

hardware components, it is at risk 

from natural disaster, criminal damage 

and terrorism, power failure and 

other incidents of a local nature. 

Network developments to offer customers 

access to new services introduce 

a higher probability of systems or 

human error that may entail temporary 

denial of service. The network 

failure in November 2004 graphically 

demonstrated the risks of systems 

error. 

A comprehensive review following 

that incident has resulted in the introduction 

of new protective measures, 

including: 

• duplication of subscriber recognition 

equipment using an alternative 

technology, 

• securing of vulnerable points in the 

optical fibre network, 

• early replacement of potentially 

obsolescent hardware platforms and 

introduction of operational indicators 

at critical points. 

Information technology risks 

The vast majority of operating processes 

rely on information technology. 

Information systems are a key factor 

in the performance and automation 

of critical tasks such as activation of 

customer lines with the appropriate 

pricing plan, call charging, invoicing, 

payment collection, rapid response to 

enquiries, etc. Computers optimise the 

logistics chain and manage retailer 

commission. The systems are interconnected 

in order to optimise data 

mining, forming a vast and highly 

complex network. Processing capacity 

must be precisely calibrated to ensure 

that systems are never saturated, 

while the network itself must be kept 

perfectly secure to prevent fraud. 

Under such circumstances, any poorly 

managed change, even on a small 

scale, or any unanticipated saturation 

of capacity may set off a chain reaction 

or open a breach in the system 

that can be used to commit fraud. 

In 2005, Bouygues Telecom again 

reinforced and expanded its I-Réagir 

information systems continuity plan, 

organising applications redundancy 

and database back-up and conducting 

tests to assess the performance 

of emergency solutions and restart 

capabilities under stress. 

Health risks 

Mobile telephony uses radio waves 

to carry communications. The press 

and other media regularly echo 

public concern about whether mobile 

phones and radio masts are harmful 

to health. 

Bouygues Telecom is attentive to all 

scientific developments in the field. 

It encourages research and, above 

all, has solemnly promised to take 

account of the results of such research 

by implementing any protective measures 

it might reveal to be necessary. 

Bouygues Telecom also believes it has 

a duty to help everyone gain a better 

understanding of the issues in the 

debate, which is why it publishes a 

brochure designed to be both instructive 

and transparent. Other initiatives 

include a special website 

www.sante.bouyguestelecom.fr which 

reports the results of new scientific 

research as they are published. 

Bouygues Telecom is a founder 

member of the Fondation Santé 

et Radiofréquences (Health and 

Radiofrequencies Foundation). Created 

in July 2005, the Fondation is a public 

interest body whose purpose is to 

define, promote and fund epidemiological, 

experimental and sociological 

research into the effects of exposure 

to radiofrequencies and to disseminate 

the results to professionals and 

the public. Transparency is an essential 

precondition of the precautionary 

principle. 

■ TF1 

Operating risks 

TF1’s programmes are currently broadcast 

to French homes: 

• by radio waves from TDF’s 112 principal 

transmitters and 3,161 rebroadcast 

stations, 

• by satellite, using Atlantic Bird 3 

for unscrambled broadcasts and 

Eutelsat’s Hot Bird for TPS, 

• by cable (cable operators are obliged 

to carry certain analogue channels). 

TDF is responsible for transmitting (ie, 

feeding the TF1 signal to broadcast 

sites) and broadcasting TF1’s programmes 

(and those of all the other national 

channels) jointly via its free-to-air 

and satellite networks. 

TDF is the only national operator to 

broadcast television signals; there is 

no comparable alternative to the TDF 

network at present. 

TF1 therefore depends on TDF to 

broadcast its signal and cannot use 

other means of transmission if TDF’s 

network fails. 

TDF ensures security of transmission 

by using both free-to-air and satellite 

networks to carry the signal to 

92

its transmitters. Thus, if a radio system 

feeding a transmitter fails, the 

feed can be switched to the satellite 

system (and vice versa). Redundant 

transmitters further enhance security 

of transmission. In contrast, the mast 

system (masts, waveguides and frequency 

multiplexers) is not immune 

from incidents, while the power supply 

is the responsibility of electricity 

utility EDF and can escape TDF’s 

vigilance. 

Interruptions in signal transmissions 

have occurred for technical reasons, 

such as transmitter or power supply 

failure, or for reasons internal to 

TDF, especially industrial action. The 

penalties contained in the contract 

are in no way commensurate with 

TF1’s potential operating losses when 

such incidents occur (loss of audience, 

harm to TF1’s image, advertisers’ 

demands for compensation, loss of 

merchandising rights, etc.). 

The damage that TF1 could sustain if a 

transmitter fails is obviously proportional 

to the number of viewers served 

by the defective equipment. A failure 

in the Paris region, with its 10 million 

viewers, could have major economic 

repercussions. That is why TF1 has 

negotiated a deal to ensure that TDF 

technicians intervene very quickly if 

an incident occurs and has asked for 

emergency measures to be stepped 

up. Apart from one incident involving 

a local site, no long-term transmitter 

failure has occurred to date. 

TPS’s primary activity is to provide 

programmes broadcast by satellite on 

Eutelsat Hot Bird TM 13° Est. 

Its main programmes are broadcast 

on two of the five satellites in the 

orbital position and occupy six frequencies 

(the position has around a 

hundred in all). 

The risk of a unit disruption is limited 

to one satellite since the satellites are 

several dozen kilometres apart and 

hence cannot be disrupted simultaneously. 

TPS must therefore be prepared 

for a failure on half its capacity. 

Solutions are to be found in the best 

use of the satellite’s output. 

In 2001, TPS experienced an incident 

on the HB5 satellite lasting several 

hours. HB5 has now been abandoned 

in favour of HB6. The measures 

described above were immediately 

implemented and proved successful. 

Eutelsat was able to verify TPS’s ability 

to react, particularly as TPS can 

remotely guide the configuration for 

the list of channels and frequencies 

received by its subscribers. 

TPS is now also available via ADSL 

phone lines, a service marketed by 

France Télécom. TPS and France 

Télécom have set up the necessary 

dual-network infrastructure to secure 

continuous broadcasting of the first 

twenty channels. Denial of service 

penalties are contained in the contract 

between France Télécom and TPS; the 

amount of the penalty depends on the 

time at which the incident occurs. 

Eurosport has a structure in the UK 

which enables the channel to secure 

the broadcasting of its programmes. 


Bouygues Construction has to manage 

the many risks connected with a 

particularly risk-prone activity, such 

as geological risks, archaeological 

discoveries, bad weather affecting 

deadlines, lack of foresight, problems 

in the performance of contracts due 

to the number of players involved, 

nuisance caused by works, etc. 

When Bouygues Construction concludes 

design-build-operate contracts, 

these classic risks are compounded by 

design and operating risks. 

In its private-sector development 

projects, especially public-private 

partnerships in France and private 

finance initiatives in the UK, Bouygues 

Construction takes a project financing 

approach which involves no exposure 

to the project debt. 

Bouygues Construction’s legal staff 

are closely involved in project development 

and contract negotiation, thus 

helping to control the main risks. 

More generally, internal procedures 

were introduced in 2003 with the aim 

of improving the identification, control 

and management of risk. 

On the design front, the company 

has extensive engineering and design 

capabilities. It continues to be selective 

in its choice of projects and takes 

out appropriate insurance cover with 

first-rank insurers, giving it further 

control over its main risks. 

Bouygues Construction believes that 

it is not exposed to any specific major 

environmental risks. As the company 

does not own any fixed production 

sites, which would be treated in the 

same way as permanent industrial 

facilities, pollution risks are limited 

to the temporary facilities used on 

construction sites. 

In addition, under current rules most 

of the waste generated by construction 

activities is classified as inert. 

Bouygues Construction makes sure 

it complies with local waste management 

regulations, especially as 

regards waste sorting at source and 

negotiations with waste treatment 

specialists. 

Risks in connection with the storage 

and transport of waste and toxic products 

relate mainly to the use of oils 

and fuels when pouring concrete and 

carrying out earthworks. In each project, 

the company takes the necessary 

steps to prevent any risk of accidental 

pollution that may arise and to react 

as quickly and effectively as possible 

if an accident should occur. 

Bouygues Construction ensures 


93

RISKS 

The principle applied within the Group 

is to systematically hedge any resithat 

it constantly complies with the 

regulations in force and implements 

the necessary prevention and management 

systems. 

■ Colas 

At Colas, the overall risk management 

policy is defined and risk analysis 

and assessment are conducted centrally. 

For several years now, Colas has 

addressed risk management issues 

in tandem with its parent company, 

which organises regular risk seminars 

focusing in particular on the 

analysis and prevention of potential 

major risks. 

Risk measurement, tracking and prevention 

are devolved to the most 

appropriate level. This arrangement 

means that subsidiaries and individual 

establishments monitor and manage 

the risks to which they are exposed. 

Colas does not seem to be greatly 

exposed to any particular major risks, 

given the nature of its businesses, the 

scatter of its establishments and the 

large number of projects carried out 

each year. 


As a property developer, Bouygues 

Immobilier is mainly concerned by site 

pollution. In most cases, the company 

guards against this risk by requiring 

the seller of the land to clean up the 

site itself or pay for a clean-up. 

When a site includes existing buildings 

to be demolished, Bouygues 

Immobilier ensures compliance with 

asbestos and clean-up regulations 

and verifies that the relevant work is 

carried out by approved contractors, 

guaranteeing that safety rules will be 

respected. 

In 2005, for the first time, Bouygues 

Immobilier experienced a major pollution 

incident on a site at Amiens. The 

incident caused the company a severe 

financial loss and a one-year delay 

in delivering the project. Following 

the incident, Bouygues Immobilier has 

stepped up its risk prevention measures 

by systematically engaging consultants 

whenever it takes an interest 

in a site. 

If the consultants’ report raises questions, 

a more detailed examination 

is requested and the consultants are 

asked to draw up a comprehensive 

site clean-up programme, fully optimised 

in technical, financial and environmental 

terms. 

MARKET RISKS 

Interest rate and 

exchange rate risk 

Some Group companies use hedging 

instruments to limit the impact on 

the income statement of movements 

in exchange rates and interest rates. 

Group policy for using hedging instruments 

is described below. 

Nature of the Group’s 

exposure to risk 

■ Exchange rate risk 

Broadly speaking, the Group has little 

exposure to exchange rate risk in its 

ordinary business operations. As far 

as possible, the Group seeks to ensure 

that when contracts are invoiced in 

foreign currencies, the corresponding 

outlays are made in the same 

currency. This is the case for most 

contracts outside France, where the 

proportion of expenditure on subcontractors 

and suppliers in local 

currency is much greater than the 

proportion of expenditure in euros. 

The Group is also especially attentive 

to the risks associated with assets in 

non-convertible currencies and, more 

generally, to country risk. 

■ Interest rate risk 

The Group’s financial earnings are not 

greatly affected by interest rate movements. 

Most of its debt is effectively 

fixed-rate, in the form of fixed-rate 

bonds and a portfolio of hedging instruments 

that transform floating-rate 

debt into fixed-rate debt. 

On average over the year, variablerate 

bank debt on the balance sheet is 

less than cash and equivalents invested 

in variable-rate instruments. 

Fluctuating European interest rates or 

a divergence between European interest 

rates and those of the main currencies 

outside the eurozone would 

have little impact on the Group’s 

income statement. 

Group-wide policies on 

hedging instruments 

The instruments used by the Group are 

limited to the following: for exchange 

rate hedges, forward purchases and 

sales, currency swaps and currency 

options; for interest rate hedges, interest 

rate swaps, future rate agreements 

(FRAs), caps and floors. 

In addition, these instruments: 

• are used only for hedging purposes, 

• are contracted only with leading 

French and foreign banks, 

• present no risk of illiquidity in a 

downturn. 

Specific reporting documents are produced 

for the managerial and supervisory 

bodies of the relevant companies 

concerning the use of hedging instruments, 

the choice of counterparties 

and interest rate and exchange rate 

risk management in general. 

Hedging rules 

■ Exchange rate risk 

94

dual exchange rate risk arising from 

commercial transactions. When cash 

flows are certain, exchange rate risk 

is covered by forward purchases and 

sales or by currency swaps. For some 

major projects, a hedge using currency 

options may be put in place before 

the contract is finally concluded. 

As with exchange rate risk, and likewise 

for rationalisation purposes, the 

interest rate positions of some Group 

entities may be managed centrally and 

partially offset against each other. 

Accounting methods 

If the euro were to depreciate by 

1% against all other currencies, the 

market value of the portfolio would be 

+€4 million. 

Values have been calculated by the 

Group or obtained from the bank 

counterparties to the contracts. 

Equity interests in foreign companies 

are generally covered by debt of a 

comparable amount in the same currency 

on the books of the companies 

holding the interests in question. 

As a general rule the Group uses 

hedge accounting for its hedging 

instruments. Hedge documentation is 

prepared in accordance with IAS 39 

and one of two methods is used to 

account for hedging instruments: 

For rationalisation purposes, the foreign 

exchange position of some Group 

entities may be managed centrally 

so that symmetrical positions can be 

offset against each other. 


The principle is to hedge all or some of 

the foreseeable and recurring financial 

assets and liabilities at the level 

of each sub-group. 

In practice, the entities that hedge 

interest rate risk are those whose 

business is capital-intensive by nature 

(telecom and media). These entities 

secure their future financial position 

by fixing the cost of their debt with 

swaps and FRAs or by limiting it with 

caps for a period of time linked to 

the maturity of the financial liabilities 

being hedged. 

• fair value hedge: changes in the fair 

value of the hedging instrument and 

the hedged item are recognised symmetrically 

in the income statement; 

• cash flow hedge: the ineffective part 

of the change in the fair value of the 

hedging instrument is recognised 

in the income statement and the 

effective part in shareholders’ equity 

(until the transaction is unwound). 

In a few cases, such as when the 

notional amount is small or the maturity 

is short, it is Group policy not to 

use hedge accounting so as to avoid 

cumbersome administrative procedures. 

In such cases, any change in the 

fair value of the hedging instrument is 

recognised in the income statement. 

Market value of 

hedging instruments 

At 31 December 2005, the market 

value (net present value) of the portfolio 

of hedging instruments was +€9 

million (1) . This amount consists mainly 

of the net present value of interest 

rate swaps to hedge the Group’s debt 

(fair value and cash flow hedges) and 

the net present value of forward transactions 

to hedge the currency risk on 

commercial transactions. 

The market value by type of hedge 

was as follows: 

• transactions as part of a fair value 

hedge: +€14 million, 

• transactions as part of a cash flow 

hedge: -€5 million. 

If the yield curve were to shift upward 

(downward) by one percentage point, 

the market value of the portfolio of 

hedging instruments would be respectively 

+€5 million (+€12 million). 

(1) Including Colas for -€9 million. The impact of the market value of the interest rate swap taken out by Colas’ UK subsidiary for the Portsmouth contract (-€9 million) is entirely offset by the market value 

of the derivative incorporated into the contractual flat fee paid by the customer (+€9 million). 


95

RISKS 

Interest-bearing debt maturity (€ million) 

Split of current and non-current debt by interest rate type 

Current 

debt 

2006 

1 to 2 

years 

2 to 3 

years 

3 to 4 

years 

Non-current debt 

4 to 5 

years 

5 to 6 

years 

2007 2008 2009 2010 2011 

6 years 

and 

over 

2012 

Other 

Total 

non current 

debt 

12/2005 

Split of current and non-current debt, including the effect of all open interest rate 

hedging contracts at the balance sheet date: 

Fixed rate* 

12/2005 12/2004 

85% 

69% 

Bond issues 

Bank borrowings 

Finance lease obligations 

594 

43 

35 

67 

18 

12 

15 

1,012 

13 

8 

509 

11 

5 

759 

17 

4 

1,728 

56 

7 

4,008 

176 

57 

Floating rate 

(*) fixed-rate debt due at more than one year 

15% 

31% 

Other debt 

Participating loans 

22 

4 

8 

3 

1 

2 

2 

20 

Interest rate risk 

Total interest 

bearing debt 

694 89 35 1,036 526 782 1,793 4,261 

The split of financial assets and liabilities by interest rate type at 31 December 

2005 was as follows: 

Call option for 6.5% of 


Total (including Bouygues 

Telecom call) 

460 460 

694 549 35 1,036 526 782 1,793 4,721 

Comparative at 31/12/2004 242 1,050 37 32 1,040 536 1,813 140 

Split of current and non-current debt by currency 

Non-current at 

31/12/2005 

Euro 

Europe 

GBP 

Other 

currencies 

USD 

CFA 

Other 

currencies 

4,610 38 23 9 35 6 4,721 

Current at 31/12/2005 677 3 1 11 2 694 

Non-current at 

31/12/2004 

4,486 13 11 20 103 15 4,648 

Current at 31/12/2004 220 18 4 242 

Total 

Floating 

rate 

Fixed 

rate 

Total 

Financial liabilities 447 4,968 5,415 

Financial assets* 3,063 3,063 

Net position before hedging (2,616) 4,968 2,352 

Interest rate hedges 345 (345) 

Net position after hedging (2,271) 4,623 2,352 

Adjustment for the seasonal 

nature of certain activities 

Net position after hedging 

and adjustment 

350 

(1,921) 

(*) including €26 million for fair value of financial instruments used to hedge net debt 

An immediate 1% rise in short-term interest rates would reduce interest charges 

by €19.2 million over a full year. 

96

Interest rate hedging 

Maturity 2006 

Interest rate swaps 

- on financial assets 

- on financial liabilities 

Future Rate Agreements 



Caps / Floors 



(1) of which swaps paying fixed rate: €334 million 

(2) of which swaps paying fixed rate: €568 million 

525 

414 

- 

- 

- 

- 

Outstanding at 31/12/2005 

2007 to 

2010 Beyond Total 

34 

617 37 

- 

- 

- 

- 

- 

- 

- 

- 

559 (1) 

1,068 (2) 

- 

- 

- 

- 

Exchange rate hedging by currency 

31 December 2005 (value in €) 

Currency USD GBP CHF HKD Other Total 

Forward purchases/sales 

- Forward purchases 

- Forward sales 

75 

170 

14 

28 

Currency swaps 79 54 111 61 16 321 

Currency options 

- Purchased 

- Written 

34 

- 

9 

- 

3 

7 

2 

- 

- 

22 

- 

- 

22 

42 

8 

4 

114 

269 

53 

4 

Security interests 

Mortgages of land or buildings or pledges 

of equipment 

Total 12/2005 Construction Property Roads Media Telecoms 

Bouygues SA and 

other activities 

< 1 year 

Maturity 

1 to 5 

> 5 years Total 

years 

9 9 1 3 5 9 

Pledges of securities and subordinated 

loans (1) 25 7 18 18 7 25 

GROUP TOTAL 34 7 18 9 19 10 5 34 

(1) see also Note 14: Off-Balance Sheet Commitments 

Exposure to equity risk 

The Group has no significant exposure to the risk of a fall in the price of the equities it holds. 

Liquidity risk 

At 31 December 2005, the Group had €3,037 million in available cash and equivalents plus €3,785 million of medium-term confirmed and unused bank facilities. 

The Group does not therefore face any liquidity risk. The bank loans contracted by Bouygues do not include any financial covenants or trigger events. The same applies to bank loans contracted by Bouygues 

subsidiaries. 


97

RISKS 

COUNTRY RISK 

Most of the Bouygues Group’s businesses 

have little or no exposure to 

country risk. 

The Group has introduced a highly 

flexible organisation to limit the risk 

arising from instability in some parts 

of the world, allowing it to withdraw 

more easily from the countries concerned 

and minimise its financial 

losses. Insurance against political risk 

is taken out on a case-by-case basis 

and strict internal control procedures 

are in place to limit the financial 

repercussions. 

Bouygues Construction does not at 

present have any significant business 

in countries affected by serious civil 

disturbances or armed conflict. The 

Group seeks to ensure the continuity 

of contracts with its customers, but 

its first concern is for the safety of 

its employees, including repatriation 

if necessary. 

Colas does over 95% of its works 

business in Europe and North 

America (United States and Canada). 

Consequently, it has little exposure 

to country risk or non-payment risk, 

since 60-65% of sales are with publicsector 

customers (central and local 

government authorities) and it executes 

a very large number of small 

contracts. 

Finagestion, a Bouygues subsidiary 

which has taken over Saur’s African 

subsidiaries, continues to be affected 

by country risk in connection with 

Côte d’Ivoire. CIE and SODECI distribute 

water and power in Côte d’Ivoire 

under public service delegation contracts, 

though they are not responsible 

for investment. CIPREL is a power 

generation subsidiary in Côte d’Ivoire 

which also owns assets there. Despite 

political instability, the companies 

were able to maintain a normal level 

of operations in 2005. Guarantees 

taken out with Coface amongst others 

meant that the Bouygues Group had 

no significant net exposure in Côte 

d’Ivoire at the end of 2005. 

TECHNOLOGY RISKS 

The Group uses few patents or technologies 

that could expose it to the risk 

of technological obsolescence. 

Through its investment in research 

and development Colas ensures that 

it is consistently at the leading edge 

of technology, enabling the company 

to remain competitive. There does 

not appear to be any risk of obsolescence 

associated with its patents and 

technologies. Thanks to its research 

and development policy, Colas is able 

to constantly renew and update its 

technical know-how. 

Dependence on 

customers and suppliers 


The design of a mobile phone network 

and the delivery of a communication 

service imply the acquisition and 

implementation of sophisticated, complex 

and interdependent equipment. 

With the aim of forestalling risks, legal 

staff have developed contracts that 

require suppliers to comply with strict 

safety and quality procedures and to 

cover their own risks. 

At the same time, painstaking efforts 

have been made to identify all suppliers 

involved in critical processes. As 

a result, the purchasing department 

can closely monitor each individual 

supplier. They in turn must implement 

back-up procedures to respect 

the continuity of service strategy and 

agree to a reliability audit at any time 

on Bouygues Telecom’s initiative. 

■ Colas 

Colas is sensitive to variations in 

supplies and prices of raw materials, 

especially oil products (bitumen, fuel, 

heating oil) in its roads activity and 

materials like steel and aluminium in 

its safety, signalling and waterproofing 

activities. However, most roads contracts 

and their related commitments 

are of short duration. Contracts often 

include price review clauses which 

help to protect or limit the impact of 

price rises on the company’s margins. 

Longer-term purchasing agreements 

or hedges can be negotiated on a 

case-by-case basis in certain activities 

or for certain contracts. 


Bouygues Construction is not dependent 

on third parties for its construction 

activity, whether in terms 

of technical skills (eg, licences) or 

business development (eg, exclusivity). 

When disposing of assets, the 

company has sometimes given non- 

98

competition undertakings relating to 

the divested activities in certain geographical 

areas but such undertakings 

are not deemed likely to hinder its 

development. 

Bouygues Construction does not 

use non-standard equipment for its 

construction activity or depend on 

particular suppliers except for certain 

specific or large tunnel boring 

machines which are made by a limited 

number of specialist manufacturers. 

However, the company has all the 

resources to design TBMs itself and 

ensures that it does not depend on 

any particular supplier. 

Bouygues Construction works with 

a large number of sub-contractors 

on projects it does not carry out 

directly. None of them is likely to 

place the company in a situation of 

dependence. 

■ TF1 

TF1 Publicité systematically monitors 

the financial health of advertisers 

wishing to buy space on the channels 

of the TF1 group it serves. The risk of 

non-payment by TF1 Publicité’s advertisers 

is historically less than 0.1% of 

annual sales. 

TF1 Vidéo and TF1 Entreprises use credit 

insurance to safeguard against the 

risk of customer default. 

There are no other significant single 

customer risks in the group’s other 

subsidiaries that could have a lasting 

impact on the group’s profitability. 

Specific regulations 

Act 86-1067 of 30 September 1986 (the 

Audiovisual Communication Act) set 

maximum limits on shareholdings in 

TV operators and restrictions on the 

number of licences an operator can 

hold. Article 39 states that an individual 

or legal entity acting alone or in 

concert may not directly or indirectly 

own more than 49% of the capital 

or voting rights of a company that 

holds a licence relating to a terrestrial 

national television service whose 

audience exceeds 2.5% of the total 

television audience. 

Article 41.3.2 states that any individual 

or legal entity that controls such 

a company within the meaning of 

Article 233-3 of the Commercial Code 

(direct or indirect majority shareholding 

– de facto control) or has placed 

it under his authority or dependence 

is deemed to hold a licence. 

TF1 and Bouygues Telecom are subject 

to specific regulations in the pursuit 

of their business. Under the terms of 

the Audiovisual Communication Act 

and the Telecoms Regulation Act of 

26 July 1996, use of the terrestrial 

frequency spectrum is treated as an 

exclusive occupation of the public 

domain. Consequently, in order to 

use terrestrial frequencies, TF1 and 

Bouygues Telecom must obtain a 

licence and comply with its terms. 

Bouygues Telecom has to pay a fee, 

while TF1 has to give non-financial 

undertakings: 60% of its broadcast 

output must consist of European 

works and 40% of original French 

works, and it must allocate a substantial 

proportion of its net annual 

revenues to buying new films and TV 

productions. 

Compliance with these terms and conditions 

is monitored permanently by 

two regulatory authorities, the Conseil 

Supérieur de l’Audiovisuel (CSA) for 

TF1 and the Autorité de Régulation des 

Communications Electroniques et des 

Postes (Arcep) for Bouygues Telecom. 

These authorities have the power to 

impose fines and to suspend, curtail 

and withdraw licences. 

TF1 was granted a 10-year licence on 

4 April 1987. On 17 September 1996 

the licence was renewed for five 

years from 16 April 1997, and on 20 

November 2001 for a further five years 

from 16 April 2002. 

Under the terms of Article 82 of the 

Audiovisual Communication Act, the 

licence could be extended automatically 

until 2012 as one of the conditions 

for simulcasting the channel on 

digital terrestrial TV. 

By an order of 8 December 1994 

amended by an order of 17 November 

1998, Bouygues Telecom was granted 

a licence to establish a DCS 1800 

network, valid for 15 years (ie, until 

8 December 2009). 

By an order of 3 December 2002, 

Bouygues Telecom was also granted a 

licence to establish a third generation 

(UMTS) network, valid for 20 years (ie, 

until 3 December 2022). The licences 

are renewable. 

Neither Arcep nor the CSA has ever 

found Bouygues Telecom or TF1 to 

be in breach of its licence terms and 

conditions. 

Arcep has interviewed Bouygues 

Telecom, like the other two operators, 

as part of the procedure to control 

UMTS rollout obligations. In a decision of 

20 May 2005, Arcep granted Bouygues 

Telecom a 28-month extension to its 

timetable for rolling out UMTS. 


99

RISKS 

Telecommunications regulations 

evolve every year. Recent changes 

are described in the section of this 

report describing Bouygues Telecom’s 

activity in 2005. 

To access certain contracts, especially 

for infrastructure, a construction firm 

must be approved on the basis of its 

expertise and sound financial health. 

Bouygues Construction believes that 

it has the necessary approvals, or 

fulfils all the criteria needed to obtain 

is subject to the regulations issued 

by the governments and public 

authorities of the countries in which 

it operates. For example, a set of 

administrative authorisations must be 

obtained for each site before work 

begins. Failure to obtain these authorisations 

could result in the start of 

work being delayed, which could lead 

to penalties at the end of the project if 

the delay is not made up. Penalties are 

generally limited by contract. 

1992). There is a risk that the start of 

work will be postponed due to the time 

taken to obtain these authorisations 

and the need to wait for the results of 

public enquiries. It is generally up to 

local authorities to fulfil these obligations, 

but in concession contracts the 

duty falls to the concession-holder. 

Bouygues Construction makes a constant 

effort to keep up with the often 

rapid changes in the regulations. 

However, the relatively short cycle 

of the construction business and the 

comparatively low level of investment 

in the sector help to reduce the risk 

arising from regulatory change. 

them, to secure its development in 

countries and markets identified as 

strategic. 

For housing and infrastructure works 

and services, Bouygues Construction 

Infrastructure projects in France are 

subject to public utility declarations 

and environmental protection authorisations, 

such as those provided for 

in the Water Act (Act 92-3 of 3 January 

Bouygues Construction’s infrastructure 

concession activities share a characteristic 

common to all activities 

contracted out by governments or 

local authorities, insofar as publicsector 

clients can exercise their public 

powers to modify or cancel contracts, 

although in such cases the contractor 

is entitled to compensation. 

The African companies transferred 

to Finagestion under the agreements 

relating to the disposal of Saur are 

exposed to this risk. 

Bouygues Immobilier’s property 

development activities are subject to 

authorisations that may give rise to 

many third party claims, which can 

cause delays and difficulties in starting 

operations. Bouygues Immobilier 

is exposed to the risk of appeals 

against the administrative authorisa- 

tions, such as construction permits, 

that it needs for its property development 

projects. The risk is especially 

high in densely populated urban 

areas. The company forestalls the risk 

by not signing any promises to buy 

land until all time limits for appeals 

have expired. 

Any change, abolition or restriction 

on tax incentives for investment in 

new rental housing causes a change in 

investor behaviour, inducing property 

sales. Bouygues Immobilier limits the 

impact of this risk on its business by 

ensuring that its property and customer 

portfolio does not become unduly 

unbalanced. 

EXCEPTIONAL EVENTS 

- LEGAL DISPUTES 

Group companies are involved in 

various lawsuits and disputes in the 

normal course of their business. Risks 

have been assessed on the basis 

of past experience and analysis by 

the Group’s legal departments and 

counsel. To the company’s knowledge, 

there is no exceptional event or lawsuit 

that may substantially affect the 

activities, assets, results or financial 

situation of the Group as a whole. 

Lawsuits are reviewed regularly, especially 

when new facts arise. Provisions 

seem appropriate with regard to these 

100

assessments. The Group uses all legal 

means possible to defend its legitimate 

interests. 

The main disputes and events that 

occurred in 2005 are described below. 

• On 30 November 2005, the French 

competition commission (Conseil 

de la concurrence) imposed a €58 

million fine on Bouygues Telecom 

in connection with alleged collusion 

between mobile phone operators. 

The decision was immediately 

enforceable and the fine was paid on 

29 December 2005. The competition 

commission accused Orange France, 

SFR and Bouygues Telecom, over the 

period from 2000 to 2002, of exchanging 

information and engaging in 

behaviour that would effectively lock 

in their market share. Orange was 

fined €256 million and SFR €220 million. 

Bouygues Telecom has lodged 

an appeal against the decision with 

the Paris Appeal Court. Consumer 

groups have announced that customers 

will sue the operators for 

compensation but by the beginning 

of March 2006 Bouygues Telecom 

had received only two writs. The 

pursuit of these lawsuits depends on 

the progress of Bouygues Telecom’s 

appeal against the competition commission 

decision. 

• On 5 December 2005, the competition 

commission fined a Colas subsidiary 

€21 million on the grounds that in 

1991 it had concluded an agreement 

to share out asphalt markets in the 

Seine-Maritime department. The 

subsidiary in question has decided 

to appeal. 

• On 22 March 2006, the competition 

commission issued a decision concerning 

public procurement contracts 

in the Ile-de-France region between 

1991 and 1997. Four group companies 

were fined a total of €10.5 million. 

On 17 October 2005, three group 

companies were informed of charges 

against them relating to contracts 

for building work on schools in the 

Ile-de-France region. 

• The compensation claim from SNCF, the 

French railways, for anticompetitive 

behaviour during construction of the 

TGV Nord high-speed rail link to northern 

France in 1989-90 is continuing and 

the first expert reports were submitted 

in 2005. The administrative court and 

Conseil d’Etat could issue their decisions 

in 2006. 

• Bouygues Travaux Publics is party 

to an arbitration relating to the circumstances 

that led to the cessation 

of construction work on a road 

project in Uganda worth approximately 

€40 million, financed by 

the European Development Fund. 

The arbitration has been suspended 

while a representative of the 

European Commission conducts a 

goodwill mission. 

• Bouygues and Bouygues Telecom 

are continuing their appeal before 

the Court of First Instance of the 

European Communities relating to 

the state aid granted during the 

recapitalisation of France Télécom in 

2002 and the retroactive modification 

of UMTS licence fees in favour of 

Orange and SFR. Bouygues Telecom 

is also continuing its complaint 

against the existence and practices 

of the Orange-SFR duopoly which 

dominates the French mobile phone 

market. In 2005, Bouygues Telecom 

brought an additional complaint 

before the competition commission 

relating to the corporate segment of 

the mobile phone market, of which 

the duopoly has a 90% share. 

• Following the failure which struck 

its network on 17 November 2004, 

Bouygues Telecom has brought an 

action for compensation against 

Tekelec in the United States. Tekelec 

is the supplier of virtual HLR servers, 

a critical component of the Bouygues 

Telecom network. Tekelec has raised 

a number of procedural objections 

but discovery is ongoing. 

INSURANCE – RISK 

COVERAGE 

The Group constantly endeavours to 

optimise and ensure the long-term 

validity of the insurance policies taken 

out by Bouygues SA and its subsidiaries, 

not only to protect itself against 

potential losses that are exceptional 

in terms of their size or number but 

also so that cover is provided at a 

cost which does not undermine the 

Group’s competitiveness. This policy 

of securing long-term insurance 

implies partnership with high-quality, 

financially sound insurers. In order 

to maintain such partnerships and 

ensure that information cannot be 

used to the detriment of the interests 

of the Group and its shareholders, 

especially in legal disputes, the Group 

ensures that guarantee conditions and 

the amount of premiums are kept in 

strictest confidence, especially where 

liability insurance is concerned. 

Because of the range of their activities, 

the Group and its subsidiaries 

have to contract very different types 

of insurance, suited to each situation. 

The risks incurred by the Group in its 

five lines of business are not comparable. 

Consequently, each business area 


101

RISKS 

takes out its own insurance policies. 

Premiums also vary considerably; the 

Group’s premium payments to general 

insurance companies represent 

approximately 0.3% of sales, a percentage 

which can be understood only 

in the light of that diversity. 

In addition to mandatory insurance, 

covering 10-year building guarantees 

in France and automobile third party 

liability for example, the main policies 

are as follows. 

• Damage. The cover is generally 

equal to the value of the assets 

insured. For the largest concentrations 

of value, however, the cover 

is limited to the amount of repairs 

for damage occurring in a disaster 

scenario, defined with the insurers’ 

consent following prior expert 

valuations carried out by external 

consultants. 

When damage to the insured assets 

is likely to cause an interruption in 

operations, insurance is taken out to 

cover the resulting operating losses. 

The cover is based on the length of 

time for which the damaged site is 

unavailable according to the disaster 

scenario used and existing disaster 

recovery plans. 

• Site insurance. The cover is equal 

to the market value. By way of an 

exception, for certain geographically 

extended projects, the cover 

may also be limited to the amount 

of repairs for damage occurring in 

a disaster scenario. The scenario is 

determined according to the type 

of project (eg, motorway, viaduct or 

tunnel) and the part of the world in 

which it is situated, so as to assess 

the risk of earthquakes or cyclones, 

for example, and the resulting 

damage. The cover is sometimes 

limited by the total available capacity 

on the world insurance market, 

for example for damage resulting 

from earthquakes or terrorist acts 

in another country. 

• Liability insurance. These policies 

insure against damage to third 

parties for which Group companies 

may be responsible. As these companies 

are of very different size and 

operate in very different businesses, 

the cover is tailored to the risks 

incurred. It is generally in excess of 

€5 million per claim. 

For all these policies, deductibles are 

adjusted to optimise the overall cost to 

the Group according to the likelihood 

of claims and the premium reductions 

that can be obtained from insurers by 

increasing deductibles. Taking these 

factors into account, certain risks are 

insured without any deductible at all 

while others are insured with a higher 

deductible, amounting in some cases 

to as much as €3 million. 

Some insurance policies issued by 

traditional blue-chip insurance companies 

are partly reinsured by the 

Group’s captive reinsurance subsidiary. 

The subsidiary is managed by 

a specialist company which defines 

the provisions to be constituted in 

compliance with insurance and reinsurance 

regulations, the purpose of 

which is to ensure that the provisions 

are sufficient to meet the commitments 

of the companies to which they 

apply. 

The Group and its subsidiaries continue 

to take preventive measures 

and introduce safeguards to further 

reduce the likelihood of accidents and 

losses and to limit their scope. One 

benefit of this policy is to facilitate 

negotiations with insurers over conditions 

of coverage and the amount 

of premiums. 

102

Innovation, 

research and 

development

INNOVATION, RESEARC 

Cycle track made from Vegecol binder 

While research and development (R&D) concerns the scientific and technological 

aspects of our work, innovation extends to processes, services, and 

understanding our customers and markets. The strategy of Research and 

Development functions, together with their budgets, is validated by the general 

management of the various units in order to ensure that the fields of 

research are strictly consistent with the strategic orientations of our business 

lines. 

• benchmarking (monitoring achievements 

outside the group), 

• advising and assisting with respect 

to projects carried out by business 

entities. This generally concerns 

complex projects with high technological 

or scientific value added, 

• animating and co-ordinating an 

Innovation division bringing together 

all those working on this question; 

a special intranet site has been 

created. 


Apart from expressing its natural concern 

for the safety of what it builds by 

implementing the strictest standards, 

Bouygues Construction is dedicated 

to advancing techniques and materials 

to achieve maximum comfort 

for customers and users. Bouygues 

Construction enjoys a powerful image 

as a technological innovator, enhanced 

throughout its history: 

• bridges (precast segments erected 

with launching beams), tunnel 

boring machines (earth-pressurebalance 

principle, TBM guidance), 

• construction (4-day cycle), 

• Ductal ® high-performance concrete; 

its strength and other qualities, 

particularly its fire resistance, are 

remarkable, 

• post-tensioning (VSL processes), 

• complex financial packages: M5, N4, 

and A28 motorways, PPP (Hungary, 

Hong Kong, London, etc.), 

The high level of the technical culture 

of Bouygues business lines explains 

the very close connections between 

R&D functions and engineering departments, 

making it possible to keep an 

ear close to the ground in terms of 

commercial and production concerns. 

Most of the Group’s Research & 

Development structures are decentralized 

throughout the subsidiaries so 

that researchers can provide solutions 

tailored to their markets. However, 

the e-Lab, a specialized Bouygues SA 

R&D expenditure 

in 2005: €137 million 

structure created in 1994, supports the 

different Bouygues businesses to help 

with technological evolution, making 

them aware of innovations developed 

in the world of research and by startups 

in the new digital technologies 

sector. To effectively carry out this 

assignment, the activities of e-Lab are 

focused on four main tasks: 

• independent research, where e-Lab 

produces scientific or software innovations 

around the general topic of 

decisional science, 

104

H AND DEVELOPMENT 

• modelling (harbour works, etc.) 

Current work is focused on the following 

fields: 

• acoustics and vibration, 

• productivity and automation, 

• energy performance and the environment, 

• sustainable construction and Whole 

Life Costing (WLC), an approach 

that integrates the cost of a project 

for its entire lifetime. In terms of 

housing, the R&D work of Bouygues 

Construction therefore focuses on 

the design of buildings that are 

less dependent on external energy 

sources and looks into possible 

improvements to user comfort. The 

developments in this field are very 

numerous: comparative study of 

insulation systems, guide to the use 

of solar-heated domestic hot water 

systems, competitive intelligence in 

the field of fuel cells, controlling 

the air-permeability of buildings 

with high-performance supply-andextract 

ventilation, targeting of 

power consumption forecasts, etc. 

An Innovation committee made up of 

technical managers acting under the 

guidance of General Management coordinates 

the work done by the various 

subsidiaries. The principal events 

organized in 2005 to raise the awareness 

of staff included: 

• the innovation forum attended in 

January 2005 by 200 staff members 

from the commercial, production, 

and technical sectors; 

• the very first Bouygues Construction 

Innovation Competition which saw 

more than 330 projects submitted 

by 1,000 staff members in a range 

of categories: technical, production, 

and commercial aspects, information 

technology, management-financelegal 

aspects, human resources. One 

project awarded a prize was the 

ETDE multimedia terminal system 

which enables site personnel not 

equipped with computers to access 

the company’s internet and intranet 

services. 


The R&D of Bouygues Immobilier is 

focused on strategic marketing and 

the development of new products. 

The main achievements are new concepts 

for housing and offices which 

have given rise to registered marks: 

business parks and ‘Les Académies’ 

student hostels, for instance. 

Current research concerns: 

• design of entry-level products for 

first-time home owners, 

• the development of new marketing 

methods outside France. 

Colas 

The history of Colas has been marked 

by large numbers of innovations which 

have contributed to the company’s 

success and helped it become the 

world’s No. 1 in roadbuilding: 

• 1932: invention of Rocasphalt cold 

mix. 

• 1937: Compomac, a cold mix which is 

still evolving today. 

• 1964: Grave-emulsion mix. 

• 1983: Emulcol, first emulsion tack 

coat with controlled breaking. Its 

ingredients make it a very environmentally-friendly 

product. Emulcol 

was awarded an innovation prize in 

the public works sector. 

• 1986: invention of Médiflex, the 

first very thin bituminous concrete. 

Médiflex won first prize in the innovative 

techniques competition run 

by the French Roads Administration. 

• 1995: Colnet, which provides perfect 

bonding between different courses 

of mixes and waterproofs the support 

on which it is placed. 

Some examples of recent innovations: 

• Neophalt BT: low-temperature mastic 

asphalt. 

• Vegecol: organic binder made from 

renewable resources, used as a bitumen 

substitute. Vegecol was used on 

more than sixty projects in 2005, as 

compared to four in 2004. 

• Ecomac: environmentally-friendly 

process for warm bituminous mixes. 

By optimizing the use of bitumen 

emulsion, Ecomac reduces pollution 

emissions. 

• Active Joint: crack-initiation system 

for cement-bound aggregate 

courses. 

• Rugosoft: low-noise bituminous 

concrete with long service lifetime. 

It also considerably reduces water 

splash in wet conditions and its 

roughness reduces skidding. 

• Fractal wall: noise wall developed 

jointly with the École Polytechnique. 

Winner of the Siemens Innovation 

Prize in 2003. 

At Colas, R&D is a network of 50 

decentralized laboratories and 100 

design departments. Within this dense 

network, the Scientific and Technical 

Campus comprises around 80 scientists, 

engineers, and technicians 

working in eight research units. The 

company gives priority to applied 

research, resulting in marketable 

products. As a result, Colas develops 

at least one new product every year. 

Research has several objectives: 

• enhance the comfort and safety 

performance of surfacing, 

• reduce costs through recycling, 

• streamline binder manufacturing 

processes, 

• reduce traffic noises, 

• develop environmentally-friendly 

products. For this purpose, the 

research programmes target better 

usage of natural resources, reduced 

energy consumption and greenhouse 

gas emissions, and development 

of recycling of industrial and 

worksite waste. 

INNOVATION, R&D 

105

INNOVATION, RESEARCH AND DEVELOPMENT 

TF1 

TV channel TF1 is continuing its development 

in a fast-evolving sector. R&D 

is focused on: 

• audiovisual content. The activity of 

TF1 comprises a large component 

dedicated to creation and innovation 

in terms of entertainment 

programmes, drama, and identification 

of new concepts and strategic 

partners; 

• marketing research and development. 

The marketing, advertising 

and broadcasting departments work 

on audience ratings, process and 

analyze audience results, and carry 

out viewer behaviour studies and 

analyses; 

• production, broadcasting, and reception 

facilities technologies. The 

technologies and internal resources 

department is thus working on process 

digitization and on the portability 

of reporting equipment. 

In the last few years a number of key 

technical advances have been made: 

• broadband television (Dream TV 

project, then the TPS L commercial 

offering); 

• Process News for producing the 

TF1 and LCI news programmes. The 

entire production setup and broadcasting 

system of TF1 are now digitized; 

• the mobile unit for reporting teams 

(filming, cutting, satellite transmission); 

• satellite broadcasting by statistical 

multiplexing. 

The main topics currently being examined 

are: 

• television on mobile phones, by 

means of experiments with panels 

of test users. Some of these experiments 

are being carried out jointly 

with Bouygues Telecom; 

• the TF1 high-definition 

TV offering; 

• the future of television 

under IP and 

convergence with 

the internet. 


Telecom 

B o u y g u e s 

Telecom has 

set up a very 

comprehensive 

system 

for its R&D 

drive and 

has placed 

innovation 

among the top 

seven fields for 

action. 

The New Technologies Department 

carries out most of the R&D work: 

• competitive intelligence and showrooms, 

• patenting, 

• follow-up of innovative projects, 

• organizing the scientific committee, 

• co-ordination of technological roadmaps. 

A ‘use and customs laboratory’ studies 

the behaviour of the ‘digital household’. 

An Innovation forum, 

comprising an 

i n n o v a t i o n 

c o m p e t i t i o n 

stimulates staff 

to ever greater 

achievements 

and rewards 

the best projects 

every year. 

The third of these 

forums rewarded 

fourteen of a total 

of 300 submissions. 

Some of them, like 

the flat microwave 

beam (‘FH plat’) using 

an antenna smaller than 

a sheet of A4 paper, have 

made outstanding contributions 

to sustainable development. 

When it came into existence in 1996, 

Bouygues Telecom’s ambition was to 

become the benchmark operator on 

the personal-communication market. 

By creating talk plans and providing a 

free answerphone service, Bouygues 

Telecom put mobile phones within 

the reach of the general public. In 

an extension to this approach, the 

company has been offering Neo, the 

first unlimited subscription for access 

to all mobile and landline operators, 

since March 2006. 

On the technological front, Bouygues 

Telecom has never stopped innovating. 

It was the first French operator 

to offer DHR (Digital High Resolution) 

sound, a technology providing a quality 

of communication that is comparable 

to that of a landline. 

There have also been a great many 

other achievements: 

• Lucie: virtual assistant, 

• folding aerial to facilitate maintenance, 

• testing and qualification of terminals, 

• integration of push-to-talk communication 

(‘walkie-talkie’ mode), 

• integration of i-mode, 

• e-messaging, 

• base stations with autonomous 

power supplies (wind turbines, solar 

panels, fuel cells). 

Current developments are targeting: 

• mobile video. Experiments with test 

users began in 2005 and will continue 

through 2006; 

• landline/mobile convergence; 

• ‘post Edge’ broadband; 

• contactless applications; 

• push to X; 

• hyperpersonalization. 

The technical culture of construction 

businesses, which has for many years 

been firmly anchored in people’s 

minds, has over time been enriched 

by a striving for innovation linked 

to the appearance and rapid evolution 

of new technologies in telecoms 

and the media. The Bouygues group 

ranks customer-oriented innovation 

and creativity high among its fundamental 

values. 

106

Legal and 

financial 

information 

Corporate governance 108 

Remuneration of corporate officers 

Stock options 126 

Share ownership 131 

Stock market 133 

Capital 135 

Results of Bouygues SA 140 

Legal information 142 

Annual publications 144

CORPORATE GOVERNANCE 

1. BOARD OF DIRECTORS 

AND INTERNAL CONTROL 

Report of the Chairman of the Board of Directors 

on the conditions for preparing and organising 

the Board’s work and the internal control 

procedures introduced by the company (Article 

L. 225-37 of the Commercial Code). 

1.1.2. Information about directors (at 31 December 2005) 

1.1. Organisation of the Board 

of Directors 

The duration of the appointment of directors, previously 

six years, was reduced to three years in 

2005 for directors appointed, or whose appointments 

were renewed, at the Annual Meeting of 

28 April 2005. 

1.1.1. Membership 

The Board currently comprises nineteen directors 

and one non-voting supervisor: 

• 17 directors are appointed by the Annual 

Meeting from amongst the shareholders, 

• 2 directors are appointed by the Annual Meeting 

as representatives of employee shareholders 

for a two-year term from among the members 

of the Supervisory boards of the Group’s 

employee savings mutual funds (profit- 

sharing and corporate savings plans), 

• 1 non-voting supervisor: pursuant to Article 

18 of the by-laws, the supervisor is responsible 

for ensuring strict compliance with the 

by-laws and attends Board meetings in an 

advisory capacity. 

The Board has created four committees to help 

it carry out its tasks: the Accounts Committee, 

the Remuneration Committee, the Selection 

Committee and the Ethics and Sponsorship 

Committee. 

Expertise / Experience 

Principal positions 

(outside Bouygues SA) 

Other positions 

and functions 

CHAIRMAN AND CEO 

Martin BOUYGUES 


78280 GUYANCOURT - France 

Date of birth: 03/05/1952 

Date of first appointment: 21/01/1982 

Expiry date of current term of office: 2006 

Number of shares in the company: 150,540 

(60,955,725 via SCDM) 

Martin Bouygues joined the Bouygues group in 1974 as works supervisor for the construction of the large Parisian 

shopping complex Les Halles, before working in sales management. In 1978, he helped to establish Maison Bouygues, 

specialising in the sale of catalogue homes. 

In 1984, Martin Bouygues began diversifying Maison Bouygues and, together with the Bouygues group, acquired Saur, 

a water treatment and distribution company. He was appointed Chairman and CEO of Saur two years later. 

Martin Bouygues became a director of Bouygues in 1982 and was appointed vice-chairman in 1987. 

On 5 September 1989, Martin Bouygues took over from Francis Bouygues as Chairman and CEO of Bouygues. 

Chairman of SCDM 

Director of TF1, CCF, Sodeci, CIE. 

Standing representative of SCDM 

on the board of Actiby and SCDM 

Participations. 

APPOINTMENTS DURING THE LAST FIVE YEARS (outside Bouygues group) 

2001 2002 2003 2004 2005 

Chairman and CEO and director of SCDM. 

Director of Actiby. 


Standing representative of SCDM on the 

board of Actiby. 


Director of CCF. 



Chairman of SCDM. 




Chairman of SCDM. 


Standing representative of SCDM on the board 

of Actiby and SCDM Participations. 

108

DEPUTY CHIEF EXECUTIVE OFFICERS 





and functions 

Olivier POUPART-LAFARGE 





Expiry date of current term of office: 

2009 (2008 Deputy CEO) 


Graduate of École des Hautes Études Commerciales (HEC). 

Olivier Poupart-Lafarge joined the Bouygues group in 1974. He was finance department manager for two years, then he 

was appointed head of the International Finance Department in 1976, then executive secretary of Bouygues Bâtiment 

International in 1980 and director of International Finance in 1983. Since 1984, Olivier Poupart-Lafarge has been executive 

vice-president of Group Finance and Strategy. In June 2002, he was appointed deputy chief executive officer by the Board 

of Directors of Bouygues. 

Co-CEO of SCDM 


2001 2002 2003 2004 2005 

Director of SCDM and BIC. Director of SCDM and BIC. Director of BIC. Director of BIC. Co-CEO of SCDM. 

Director of BIC. 

Olivier BOUYGUES 



Standing representative of SCDM, 

director 



Expiry date of current term of office: 

2007 (2006 Deputy CEO) 

Number of shares in the company: 

155,815 (60,955,725 via SCDM) 

Olivier Bouygues graduated as an engineer from the École Nationale Supérieure du Pétrole (ENSPM). 

He joined the Bouygues group in 1974. His career began in the group civil works branch. From 1983 to 1988, at Bouygues 

Offshore, he held the posts of director of the Cameroon subsidiary Boscam, then director of the France Works and Special 

Projects division. 

From 1988 to 1992, he was Chairman and CEO of Maison Bouygues. 

In 1992, he became Group executive vice-president for Utilities Management where the International and French activities 

of Saur were grouped together. In 1997, Bouygues and Saur acquired Cise, thereby creating the third largest French 

utilities management group. On 19 November 2004, Saur was sold to PAI partners. Olivier Bouygues became deputy chief 

executive officer of Bouygues. 

Co-CEO of SCDM 


2001 2002 2003 2004 2005 

Chief executive officer and director of SCDM. 

Director of Actiby and Esso. 

Deputy chief executive officer and director 

of SCDM. Director of Actiby and Esso. 

Chief executive officer and Director of SCDM. 

Director of Actiby and Cefina. 

Manager of SIR. 

Chief executive officer and director of SCDM. 

Manager of SIR and SIB. 

Director of Bouygues Telecom, Colas, 

TF1 and BIC. 

Standing representative of 

Bouygues on the Board of Bouygues 

Construction and Bouygues 

Immobilier. 

Chairman of the board of directors 

and director of Finagestion. 

Chairman and CEO and director 

of Seci. Director of TF1, Bouygues 

Telecom, Colas, Bouygues 

Construction, Eurosport, Cefina, 

Novasaur, Sodeci, CIE and 

Sénégalaise des Eaux. Standing 

representative of SCDM on the board 

of SCDM Énergie. 

Non partner manager of SIR and SIB. 

Co-CEO of SCDM. Director of Cefina and 

Novasaur. Manager of SIR and SIB. 

Standing representative of SCDM on the board 

of SCDM Énergie. 

LEGAL AND FINANCIAL INFORMATION 

109





and functions 

OTHER DIRECTORS 

Pierre BARBERIS 

71-73 rue des Hautes Pâtures 

92726 NANTERRE cedex - France 




Number of shares in the company: 500 

Graduate of École Polytechnique, and the Institute of French Actuaries. 

Pierre Barberis began his career at Caisse des Dépôts et Consignations, and joined Crédit Lyonnais in 1966 where in 1974 

he became director of information technology and Organisation. From 1979 he was in turn chief executive at Trigano SA, 

Crédit du Nord and Axa Group. He was vice-chairman of Axa from 1987 to 1991. He then became chairman of VEV and ran 

several computer software companies. Since May 2002, Pierre Barberis has been deputy chief executive of Oberthur Card 

Systems. 

Deputy chief executive 

of Oberthur Card 

Systems 

Chairman and director 

of Wilson Gestion. 

Manager of Amrom. 


2001 2002 2003 2004 2005 

Chairman and CEO and director of VEV. 

Manager of Amrom. Chairman of BFB and 

Prolaine. Chairman and director of: SGQ, 

Wyde inc., Lainière Holding and Wilson 

Gestion. Director of Alliance Internationale, 

Rodier Corp., Vendome Rome and 

Boostworks. 

Chairman and CEO and director of VEV. 

Chairman and director of Wilson Gestion 

and SGQ. 

Chairman of Prolaire and BFB. Director of 

Alliance Internationale, Wyde Inc, Vendome 

Rome, Rodier Corp., Lainière Holding and 

Boostworks. Manager of Amrom. 

Chairman and director of Wilson Gestion and 

VEV. Deputy chief executive and director of 

Oberthur Card Systems. 

Director of Alliance Internationale, 

Boostworks, Lainière Holding and Sengac. 


Deputy chief executive and director of 

Oberthur Card Systems. Chairman and 

director of Wilson Gestion and VEV. 

Director of Alliance Internationale, 

Boostworks, Lainière Holding and Sengac. 


Deputy chief executive and director of 

Oberthur Card Systems. Chairman and 

director of Wilson Gestion. 

Director of Alliance Internationale. 


Patricia BARBIZET 

12 rue François 1 er 

75008 PARIS - France 



(standing representative of Artémis) 

Second appointment: 13/12/2005 


(individual capacity) 


Graduate of the École Supérieure de Commerce de Paris (ESCP). 

Patricia Barbizet held important posts in the finance department of the Renault group before becoming finance 

director of the Pinault group in 1989. She has been chief executive - director of Artémis since 1992 and chairman of the 

supervisory board of the PPR group since 2002. 

Chief executive and 

director of Artémis 

Vice-chairman and director of PPR. 

Chief executive and director of 

Palazzo Grassi. 

Director of Théâtre Marigny. 

Chairman and CEO and director of 

Piasa. 

Chairman & board member of 

Christie's International Plc. 

Director of FNAC, TF1 and Air France. 

Member of the supervisory board 

of Gucci and Yves Saint Laurent. 

Standing representative of Artémis 

on the board of Sebdo le Point and 

Agefi. Member of the management 

board of SC du Vignoble de Château 

Latour. Chief executive and member 

of the supervisory board of 

Financière Pinault (non proxy). 

110





and functions 


2001 2002 2003 2004 2005 

Chief executive and director of Artémis. 

Chairman of the supervisory board of 

Pinault-Printemps-Redoute. 

Chairman of the Board of Directors of 

Théâtre Marigny. Chairman and CEO of Piasa. 

Board member of Christie’s International Plc. 

Director of FNAC. 

Member of the supervisory board of Yves 

Saint Laurent Parfums, Yves Saint Laurent 

Couture, Yves Saint Laurent Haute Couture 

and Gucci. Standing representative of 

Artémis on the board of Rexel, Sebdo le Point 

and Agefi. Member of the management board 

of SC du Vignoble de Château Latour. Chief 

executive of Financière Pinault (non proxy). 

Member of the financial markets council. 

Madame Francis BOUYGUES 

50 rue Fabert 






(5,290,034 via FMB) 

Georges CHODRON de COURCEL 

3 rue d’Antin 







Board member of Christie’s International Plc. 

Director of FNAC. 

Member of the supervisory board of Yves 

Saint Laurent Parfums, Yves Saint Laurent 

Couture, Yves Saint Laurent Haute Couture, 

and Gucci. Standing representative of 

Artémis on the board of Agefi, Sebdo le 

Point. Member of the management board 

of SC du Vignoble de Château Latour. Chief 

executive of Financière Pinault (non proxy). 







Chairman and board member of Christie’s 

International Plc. Director of FNAC and Air 

France. Member of the supervisory board of 

Gucci, Yves Saint Laurent Parfums, Yves Saint 

Laurent. Standing representative of Artémis 

on the board of Sebdo le Point and Agefi. 

Member of the management board of SC du 

Vignoble de Château Latour. Chief executive 

of Financière Pinault (non proxy). 






Théâtre Marigny. Chairman and CEO and 

director of Piasa. Chairman and board 

member of Christie’s International Plc. 

Director of FNAC and Air France. 

Member of the supervisory board of 

Financière Pinault, Gucci, Yves Saint Laurent 

Parfums, Yves Saint Laurent. Standing 

representative of Artémis on the board of 

Sebdo le Point and Agefi. Member of the 

management board of SC du Vignoble de 

Château Latour. Chief executive of Financière 

Pinault (non proxy). 



Pinault-Printemps-Redoute. Vice-chairman 

and director of PPR. Chief executive and 

director of Palazzo Grassi. Chairman of 

Théâtre Marigny. Director of Théâtre Marigny. 

Chairman and CEO and director of Piasa. 

Chairman and board member of Christie’s 

International Plc. Director of FNAC and Air 

France. Member of the supervisory board 

of Financière Pinault, Gucci and Yves Saint 

Laurent. Standing representative of Artémis 

on the board of Sebdo le Point and Agefi. 

Member of the management board of SC du 

Vignoble de Château Latour. Chief executive 

of Financière Pinault (non proxy). 

- - 


2001 2002 2003 2004 2005 

- - - - - 





Graduate in economics and of the École Centrale de Paris. 

Georges Chodron de Courcel joined BNP in 1972, where he became head of financial research in the finance department 

in 1978, then executive secretary of Banexi in 1982. He then became director of securities management and director of 

finance and industrial investment. In 1989, he was appointed Chairman of Banexi, then central director of BNP in 1990. In 

1995, he became executive vice-president then chief executive of BNP from 1996 to 1999. After the merger with Paribas in 

August 1999, Georges Chodron de Courcel became head of the finance and investment arm of BNP Paribas from 1999 to 

2003. He has been deputy chief executive of BNP Paribas since June 2003. 

Deputy chief executive 

of BNP Paribas 


2001 2002 2003 2004 2005 

Member of the executive committee of BNP 

Paribas. 

Director of Scor SA and Nexans. 


Lagardère SCA and Sommer SA. 


Paribas. 

Director of Scor SA, Nexans and Alstom. 


Lagardère SCA and Sommer SA. 


Paribas. 

Director of Nexans and Alstom. Member of 

the supervisory board of Lagardère SCA. 

Director, then Supervisor of Scor SA. 

Deputy chief executive of BNP Paribas. 

Director of Nexans and Alstom. Member of 

the supervisory board of Lagardère SCA and 

Sagem. Supervisor of Scor SA and Scor Vie. 

Director of Nexans, Alstom and FFP 

(Foncière Financière Participations). 


Lagardère SCA. 

Supervisor of Scor SA, Scor Vie and 

Safran. 

Deputy chief executive of BNP Paribas. 

Director of Nexans, Alstom and FFP (Foncière 

Financière Participations). Member of the 

supervisory board of Lagardère SCA and 

Sagem, now called Safran (appointed as 

Supervisor). 

Supervisor of Scor SA and Scor Vie. 


111





and functions 

Charles de CROISSET 

4 rue Barye 






Graduate of the Institut d’Études Politiques de Paris (IEP) and the École Nationale d’Administration (ENA) and with a 

degree in law. 

Charles de Croisset joined the French Finance Ministry as Inspector in 1968. He was head of the private office of the 

Minister for Industry in 1979 and joined Crédit Commercial de France (CCF) in 1980 as executive secretary. He became 

executive vice-president of CCF in 1983, and then chief executive and director in 1987. He was then appointed head of the 

private office of the Finance Minister (1987 - 1988). In 1993, he was appointed Chairman and CEO of CCF, and in 2000, chief 

executive and director of HSBC Holdings Plc and director of HSBC Bank Plc. In March 2004, Charles de Croisset became 

Vice-chairman Europe of Goldman Sachs. 

Vice Chairman 

Europe at Goldman 

Sachs 


2001 2002 2003 2004 2005 

Chairman of CCF. Chairman of Nobel. 

Chairman of the Supervisory Board of CCF 

Charterhouse. Vice-chairman of CCF Holding 

Suisse. Director of SA des Galeries Lafayette, 

Euler, Société des Amis du Louvre and the 

Institut Pasteur. Member of the Supervisory 

Board of HSBC-CCF Asset Management 

Europe. 

Michel DERBESSE 

64 avenue Raymond Poincaré 






Chairman and CEO of CCF. Executive Director 

of HSBC Holdings Plc. Director of HSBC 

Bank Plc and HSBC CCF Asset Management 

Group. Member of the Board of Directors 

of HSBC Guyerzeller Bank SA. Chairman of 

the Supervisory Board of Nobel. Member of 

the Supervisory Board of Galeries Lafayette 

and Euler. Standing representative of SRRE 

Luxembourg on the board of SOMAREL. 

Chairman and CEO of CCF. Member of the 

Board of Directors of HSBC Guyerzeller Bank 

SA and HSBC Private Holding (Suisse) SA. 

Member of the Supervisory Board of Euler 

& Hermes and SA des Galeries Lafayette. 

Director of HSBC CCF Asset Management 

Group and HSBC Bank Plc. Executive Director 

of HSBC Holdings Plc. 

Standing representative of SRRE Luxembourg 

on the board of SOMAREL. 

Chairman and CEO of CCF. Member of the 

Supervisory Board of Euler & Hermes and SA 

des Galeries Lafayette. Director of HSBC CCF 

Asset Management Holding, HSBC Bank Plc, 

HSBC Holding Plc and HSBC Private Banking 

Holdings. Member of the Board of Directors 

of HSBC Guyerzeller Bank AG. 

Graduate engineer from the École Spéciale des Travaux Publics (ESTP). 

Michel Derbesse joined Bouygues in 1962. He began his career as site engineer, and continued in the Group’s network of 

regional construction subsidiaries. He was appointed deputy CEO of GFC (Lyon) in 1975, then chairman and CEO of Dalla 

Vera (Orléans) in 1977, chief executive then chairman and CEO of GFC in 1978 and then COO of the whole regional network 

of construction companies in 1982. He became Group executive vice-president for Construction (building/civil works and 

roadworks) in 1986. He was chairman of Screg from 1986 to 1996. From October 1995 to March 2005, he was COO then 

deputy chief executive of the Bouygues group. 

Director of FNTP 

Chairman of Fondation du 

Patrimoine. Director of Renault and 

Thales. Member of the supervisory 

board of Euler & Hermes. 

Member of the college of supervisors 

of Galeries Lafayette. 

Chairman of Fondation du Patrimoine. 

Director of Renault and Thales. Member of 

the Supervisory Board of Euler & Hermes. 

Member of the college of supervisors of 

Galeries Lafayette. 

Director of Société Fermière du 

Casino Municipal de Cannes. 


2001 2002 2003 2004 2005 

Director of SCDM and FNTP. Director of SCDM and FNTP. Director of FNTP. Director of FNTP. Director of FNTP and of Société Fermière du 

Casino Municipal de Cannes. 

Lucien DOUROUX 

20 rue de la Baume 






Graduate of the Conservatoire National des Arts et Métiers (CNAM). 

Lucien Douroux was appointed chief executive of Caisse Régionale du Crédit Agricole de Paris et d’Île-de-France in 1976. 

He was chief executive of Caisse Nationale du Crédit Agricole from 1993 to 1999, and was appointed chairman of the 

supervisory board of Crédit Agricole Indosuez from 1999 to 2001. 

Chairman and director 

of Banque de Gestion 

Privée Indosuez 

Director of Euris. 

112





and functions 


2001 2002 2003 2004 2005 

Chairman of the Board of Directors and 

Director of Banque de Gestion Privée. 

Chairman of the supervisory board of Crédit 

Agricole Indosuez and Fonds de Garantie des 

Dépôts. Member of the supervisory board of 

Suez-Lyonnaise des Eaux. Vice-chairman of 

the Board of Directors of Wafabanq. Director 

of Euris. 

Alain DUPONT 

7 place René Clair 

92653 BOULOGNE-BILLANCOURT cedex 

France 






director of Banque de Gestion Privée. 

Chairman of the supervisory board of Fonds 

de Garantie des Dépôts. Vice-chairman of the 

Board of Directors of Wafabanq. 

Director of Suez and Euris. 




de Garantie des Dépôts. 

Vice-chairman of the Board of Directors of 

Wafabanq. Director of Suez and Euris. 




de Garantie des Dépôts. Vice-chairman of the 

Board of Directors of Wafabanq. Director of 

Suez and Euris. 

Graduate of the École Spéciale des Travaux Publics (ESTP). 

Alain Dupont began his career as site engineer at Screg in 1965. He was works manager at Orly airport in 1968, and was 

then appointed branch office manager in 1970, then Île-de-France regional manager in 1975 and Chairman and CEO of 

Screg Île-de-France in 1978. 

In 1983, Alain Dupont was appointed deputy CEO of Colas, before becoming director and chief executive in 1985, and then 

Chairman and CEO in 1987. 



of Colas SA 


director of Banque de Gestion Privée. Director 

of Suez and Euris. 

2001 2002 2003 2004 2005 

Standing representative of Colas on the 

board of Cofiroute. Vice-chairman of FNTP. 

Director of the Association of Public Works 

Contractors in France. 

Director of USIRF. Chairman and Treasurer of 

URF. Director of CNETP. 

Vice-chairman of SEFI. 





Director of USIRF. Vice-chairman of SEFI. 

Director of CNETP. 





Director of USIRF. Vice-chairman of CNETP. 

Director of IFRI. 

Director of SMAvieBTP. 



Vice-chairman of CNETP. Director of the 

Association of Public Works Contractors in 

France. 

Director of USIRF. 

Director of IFRI. Director of SMAvieBTP. 

Chairman and CEO of Colasie. 

Chairman of the Board of Directors 

and Director of Colas Inc. Director of 

Colas Île-de-France Normandie, Colas 

Rhône-Alpes, Smac, Spac, Société 

Parisienne d’Études d’Informatique 

et de Gestion, Colas Suisse Holding, 

Colascanada, Colas Ltd, Colas 

Danmark, Hindustan Colas Ltd and 

of the Professional Association of 

Public Works Contractors in France 

and Overseas. Director of Tasco. 

Standing representative of Colas 

on the board of Colas Centre-Ouest, 

Colas Midi-Méditerranée, Colas 

Sud-Ouest, Cofiroute and Somaro. 

Representative of Colas on the 

supervisory board of Grands Travaux 

Routiers and Colas Émulsions. 

Standing representative of Spare 

on the board of Colas Est. Standing 

representative of SPRI on the board 

of Colas Nord-Picardie. Member of 

the supervisory board of La Route 

Marocaine and Société Moghrébienne 

d’Entreprises et de Travaux. 

Vice-chairman of FNTP. 


board of Cofiroute. Chairman of CNETP. Vicechairman 

of FNTP. Director of the Association 

of Public Works Contractors in France. 

Director of USIRF. 

Director of IFRI. Director of SMAvieBTP. 


113





and functions 

Yves GABRIEL 







Jean-Michel GRAS 

3-5 avenue Morane Saulnier 

78944 VÉLIZY cedex - France 

Graduate civil engineer from Ponts et Chaussées. 

Yves Gabriel joined the Bouygues group in 1976. His career began at Screg Île-de-France as works engineer; he then 

became head of sector and manager of a regional branch office. In 1985 he established Screg Bâtiment where he was 

chief executive until 1992. 

From 1989 to 1992, he was also appointed chief executive of Bouygues’ industrial construction division and was chairman 

of Ballestrero. From 1992 to 1996, he was chief executive of the Screg group (third-largest French company in the 

roadworks sector). In November 1996, he joined the Saur group as executive vice-president responsible for activities in 

France and the merger with the Cise group. In June 2000, he was appointed chief executive of the Saur group. 

In September 2002, he was appointed Chairman and CEO of Bouygues Construction. 

Chairman and 

CEO of Bouygues 

Construction 


2001 2002 2003 2004 2005 

Representative of the employee mutual 

investment funds 




Thierry JOURDAINE 



- - 

Director of FNTP. 

First vice-chairman and director of SEFI. 


Jean-Michel Gras joined Bouygues Telecom in 1996 as purchasing quality engineer. 

He then carried out network information systems project management assignments. He is currently head of computer 

purchasing at Bouygues Telecom. 

- 

Director of ETDE and FNTP. 

Standing representative of Bouygues 

Construction on the board of 

Bouygues Bâtiment International, 

Bouygues Bâtiment Île-de-France and 

Bouygues Travaux Publics. 

First vice-chairman and director of SEFI. 



2001 2002 2003 2004 2005 

Representative of the employee mutual 

investment funds 




- - - - - 

Thierry Jourdaine joined Bouygues in 1985 as works supervisor. He was head of quality management at Bouygues 

Bâtiment Residential Division from 1996 to 2001. Thierry Jourdaine then became head of quality management at 

Bouygues Bâtiment International. 


2001 2002 2003 2004 2005 

- - - - - 

- 

114





and functions 

Patrick LE LAY 

1 quai du Point du jour 

92656 BOULOGNE-BILLANCOURT - France 





Graduate engineer from the École Spéciale des Travaux Publics (ESTP), Institut d’Études Politiques de Paris (IEP), Centre 

des Hautes Études de la Construction and Centre de Préparation aux Affaires. 

Patrick Le Lay joined the Bouygues group in 1981. He was initially deputy company secretary then company secretary of 

Bouygues, and became head of the Group Diversification division in 1984. 

Following the privatisation of TF1 in 1987, Patrick Le Lay became vice-chairman and CEO, then Chairman and CEO in 1988. 


of TF1 


2001 2002 2003 2004 2005 

Standing representative of TF1 on the board 

of GIE SOGEDIF and Société d’Administration 

et de Gestion de l’Audiovisuel Sportif – SAGAS. 

Jean PEYRELEVADE 

23-27 rue Cambon 






Standing representative of TF1 on the board 

of GIE SOGEDIF and Société d’Administration 

et de Gestion de l’Audiovisuel Sportif – SAGAS. 

- - - 

Graduate of the École Polytechnique, Institut d’Études Politiques (IEP) and civil aviation engineer in chief. 

Jean Peyrelevade was deputy head of the private office of the Prime Minister in 1981, and in 1983 became chairman of 

Compagnie Financière de Suez and, at the same time, of Banque Indosuez. 

He was appointed Chairman and CEO of Banque Stern, then in 1988 became chairman of UAP, before becoming chairman 

of Crédit Lyonnais in 1993 for 10 years. 

Vice-chairman 

of Quadrature 

(formerly-Toulouse 

et associés) 


2001 2002 2003 2004 2005 


director of Crédit Lyonnais. 

Director of AGF, Lyonnaise des Eaux, Club 

Méditerranée, Air Liquide, LVMH, Power 

Corporation of Canada and MK2. Standing 

representative of Crédit Lyonnais on the 

board of Lagardère Group. 



Director of AGF, Lyonnaise des Eaux-Suez, 

Club Méditerranée, LVMH, Power Corporation 

of Canada and MK2. Standing representative 

of Crédit Lyonnais on the board of Lagardère 

Group. 



Director of Lyonnaise des Eaux, LVMH and 

Power Corporation of Canada. 

Standing representative of Crédit Lyonnais 

on the board of Lagardère Group. 

Director of Suez and Power Corporation of 

Canada. Member of the supervisory board of 

Groupe Express-Expansion. 

Director of Colas and Prima TV. 

Chairman of Incunables & Co. 


La Chaîne Française d’Information 

Internationale – CFII. Standing 

representative of TF1 on the board 

of Téléma. 

Standing representative of TPS Sport 

on the board of TPS Motivation. 

Standing representative of TF1 

Développement on the board of 

Télévision par Satellite Gestion. 

Chairman and CEO of TV Breizh. 

Standing representative of TV Breizh 

on the board of TVB Nantes. 

Director of Suez and of Société 

Monégasque d’Électricité et de Gaz. 


CMA-CGM. 

Co-manager of Quadrature (Toulouse et 

associés). Director of Suez and Société 

Monégasque d’Électricité et de Gaz. 


CMA-CGM. 


115





and functions 

François-Henri PINAULT 

10 avenue Hoche 




(Standing representative of Financière 

Pinault) 

Second appointment: 13/12/2005 

(individual capacity) 



Graduate of the École des Hautes Études Commerciales (HEC). 

François-Henri Pinault has spent his whole career within the PPR group. He was chief executive of France Bois Industries 

from 1989 to 1990 and was appointed Chairman and CEO of Pinault Distribution in 1991. In 1993, he became chairman of 

CFAO. He was appointed chairman of the FNAC Group in 1997, and was then executive vice-president of PPR Group and 

then head of Internet activities and chairman of the supervisory board of PPR-Interactive from 2000 to 2001. Since 2003, 

François-Henri Pinault has been chairman of the Board of Directors and director of Artémis. 

In 2005, he became chairman of the Board of Directors and then Chairman and CEO of PPR. 


of PPR 

Managing partner of Financière 

Pinault. 

Chairman of the Board of Directors 

of Artémis. Vice-chairman of the 

supervisory board of Boucheron 

Holding. Director of Simetra 

Obligations, FNAC and Soft 

Computing. 


of Gucci Group NV and Yves Saint 

Laurent SAS. Member of the 

management committee of SC du 

Vignoble de Château Latour. 


2001 2002 2003 2004 2005 

Managing partner of Financière Pinault. 


Member of the Board of Directors of 

Pinault-Printemps-Redoute. Member of the 

supervisory board of Pinault-Printemps- 

Redoute and Gucci Group NV. Director of 

FNAC, Rexel, Finaref and Soft Computing. 


PPR Interactive. Standing representative 

of Artémis on the Board of Guilbert and 

Conforama. Member of the management 

committee of SC du Vignoble de Château 

Latour. 

Alain POUYAT 







Manager and active partner of Financière 

Pinault. Chief executive and director of 

Artémis. Member of the supervisory board of 

Pinault-Printemps-Redoute. Member of the 

supervisory board of Gucci Group NV. 

Director of FNAC, Soft Computing and Afipa. 

Standing representative of Artémis on the 

Board of Guilbert and Conforama. Member 

of the management committee of SC du 

Vignoble de Château Latour. 


Chairman of the Board of Directors, deputy 

chief executive and director of Artémis. 

Member of the supervisory board of Pinault- 

Printemps-Redoute and Gucci Group NV. 

Vice-chairman of the supervisory board of 


Director of FNAC, Afipa and Soft Computing. 

Chairman and CEO of Simetra Obligations. 

Standing representative of Artémis on the 

Board of Guilbert and Conforama Holding. 

Member of the management committee of SC 

du Vignoble de Château Latour. 



Artémis. Vice-chairman of the supervisory 

board of Pinault-Printemps-Redoute. 

Chairman and CEO of Simetra Obligations. 

Member of the supervisory board of Gucci 

Group NV and Boucheron Holding. Director 

of FNAC, Afipa and Soft Computing. Standing 

representative of Artémis on the Board of 

Conforama Holding. 

Member of the management committee of 

SC du Vignoble de Château Latour. 

Graduate of the École Nationale Supérieure des Arts et Métiers (ENSAM). 

Alain Pouyat joined Bouygues in 1970. He started as a computer engineer and was appointed IT manager in 1981 followed 

by Group IT director in 1986. 

He has been executive vice-president for Information Systems and New Technologies of the Group since 1988. - 



Artémis. Vice-chairman and member of the 

supervisory board of Pinault-Printemps- 

Redoute. Member of the Board of Directors 

of Pinault-Printemps-Redoute. Chairman and 

CEO of PPR. Chairman and CEO of Simetra 

Obligations. Director of Simetra Obligations, 

Palazzo Grassi, FNAC and Soft Computing. 

Vice-chairman of the supervisory board of 

Boucheron Holding. 

Director of Afipa. Chairman and member of 

the supervisory board of Gucci Group NV. 


Yves Saint Laurent SAS. Member of the 

management committee of SC du Vignoble de 

Château Latour. 

Director of Bouygues Telecom, C2S, 

TF1, Speig and ETDE. 


2001 2002 2003 2004 2005 

Director of World Online France. - Supervisor of Wanadoo. 

Supervisor of Wanadoo. 

- 

116





and functions 

Michel ROUGER 

30 rue Claude Lorrain 






Graduate of the Institut Technique de Prévision Economique et Sociale. 

Michel Rouger took part in the establishment and development of Banque Sofinco (1956-1984), as director of operations 

and risk. In 1985, he joined the Suez group as executive vice-president of Sofiroute, where he ran various subsidiaries 

- chairman of Céfina and chief executive of Cogiroute - until 1991. He has been a judge at the commercial court of 

Paris since 1980, and was presiding judge of the court between 1992 and 1995. He was chairman of the Consortium 

de Réalisation (CDR) between 1995 and 1998, and continues to carry on the activities of consulting, mediation and 

independent directorships. 


2001 2002 2003 2004 2005 

Chairman of Angelynvest. Member of the 

supervisory board of De Broeck University 

and Lagardère Group. Manager of Michel 

Rouger Conseil. 

SCDM 



Number of shares in the company: 60,955,725 

SUPERVISOR 

Philippe MONTAGNER 



Chairman of Angelynvest. Member of the 

supervisory board of De Broeck University 

and Lagardère Group. Manager of Michel 

Rouger Conseil. 

Chairman of Promega. Director of De Broeck 

Diffusion and Compagnie Financière M.I. 

29. Member of the supervisory board of 

Lagardère Group and Centuria. Manager of 

Michel Rouger Conseil. 

Chairman of Promega. Director of Compagnie 

Financière M.I. 29. Member of the supervisory 

board of Lagardère Group and Centuria. 

Manager of Michel Rouger Conseil. 

- 


of Centuria. Director of Compagnie 

Financière M.I. 29. 


Sharing Knowledge. 


Member of the supervisory board of Centuria. 

Director of Compagnie Financière M.I. 29. 

Chairman of Emer Parcs. 


Chairman of Actiby, SCDM Énergie 

and SCDM Participations. 


2001 2002 2003 2004 2005 





- - Chairman of Actiby. Chairman of Actiby. Chairman of Actiby, SCDM Énergie 

and SCDM Participations. 

Graduate of the École Spéciale des Travaux Publics (ESTP) and the Centre des Hautes Études du Béton Armé et 

Précontraint. 

Philippe Montagner joined the Bouygues group in 1968 and managed some of the largest projects carried out by the 

Group (University of Riyadh, Channel Tunnel) as well as running several important subsidiaries. 

Since 1994, he has run the Telecommunications division of the Bouygues group. 

Philippe Montagner was chairman of Bouygues Telecom from June 1994 to February 2004 and again since October 2005. 

Chairman and CEO and 

Director of Bouygues 

Telecom 


2001 2002 2003 2004 2005 

- - - - 

Vice-chairman and member of the 

supervisory board of Ginger Groupe 

Ingénierie Europe. Director of TF1, 

ETDE, Bouygues Immobilier and TPS 

Gestion. 

Vice-chairman and member of the 

supervisory board of Ginger Groupe 

Ingénierie Europe. 


117

■ Bouygues’ position with regard to the current 

corporate governance regime 

In order to ensure transparency and good corporate 

governance, Bouygues intends to comply 

with the recommendations of the European 

Commission Recommendation dated 15 February 

2005 relating to the role of directors, and with 

the provisions of the report entitled “corporate 

governance of listed companies” published in 

October 2003 under the aegis of the French 

Association of Private Companies (AFEP) and 

the French Business Movement (MEDEF). These 

principles particularly underpin the rules of procedure 

of the Board of Directors. However, the 

company does not comply exactly with some 

recommendations (meeting of external directors 

without internal directors in attendance; committees 

comprising at least three members). 

■ Combining the functions of Chairman and 

of Chief Executive Officer in one position 

The general management of the company is the 

responsibility of the Chairman of the Board of 

Directors. This appeared to be the appropriate 

choice, since Martin Bouygues has always been 

heavily involved in operational activities. 

■ Independence of directors 

The Board of Directors has carried out an assessment 

of its members and considered what proportion 

of them are independent directors. 

The European Commission Recommendation 

dated 15 February 2005 emphasises that when 

independence criteria are applied, the Board 

of Directors should attach more importance to 

substance than to form. Like the AFEP-MEDEF 

report of October 2003, it states that independence 

must be understood as the absence of any 

substantial conflict of interest likely to influence 

a director’s judgment. These are the main factors 

taken into consideration by the Board when making 

its assessment. 

After having examined the situation of each 

of the directors, the Board considers Pierre 

Barberis, Georges Chodron de Courcel, Charles 

de Croisset, Lucien Douroux, Jean Peyrelevade 

and Michel Rouger to be independent directors 

within the meaning of the European Commission 

Recommendation and of the AFEP-MEDEF report. 

Lucien Douroux and Jean Peyrelevade have held 

management positions with financial establishments 

that have a business relationship with the 

company, but they have not held such positions 

for a number of years, and furthermore the 

establishments concerned have undergone substantial 

changes since that time. The Selection 

Committee, having examined the relationship 

between Bouygues and BNP Paribas, has also 

concluded that Georges Chodron de Courcel is 

not in a situation of a substantial conflict of 

interest. 

The Board takes the view that none of these 

persons is connected with the company, with the 

shareholders controlling it or with its management 

by a relationship creating such a conflict 

of interest. 

These six directors are therefore considered 

as independent in the light of the European 

Commission Recommendation and the AFEP- 

MEDEF report. 

Six out of 17 of the directors are therefore independent, 

representing one third of the members 

of the Board of Directors as recommended by 

the AFEP-MEDEF report. The Board takes the view 

that its current composition, characterised by 

the presence of directors representing substantial 

shareholders and directors exercising managerial 

functions within the Group, but also by a 

relatively high proportion of independent directors, 

contributes to good corporate governance. 

■ Family relationships 

Martin Bouygues, Olivier Bouygues and Madame 

Francis Bouygues are directly related. 

■ Potential conflicts of interest 

Article 5 of the rules of procedure of the Board 

of Directors provides for directors to undertake 

to inform the Chairman of the Board of Directors 

of any situation of conflict of interest, even of a 

potential nature, and not take part in the vote 

on any resolution which directly or indirectly 

concerns them. 

Georges Chodron de Courcel is Deputy chief 

executive of BNP Paribas, a company which may 

have occasion to offer banking services or support 

to the Group. 

The major shareholders of the Group (SCDM and 

companies in the Pinault group, which together 

own 25.99% of the capital, and Madame Francis 

Bouygues) are directly or indirectly represented 

on the Board of Directors by Martin Bouygues, 

Olivier Poupart-Lafarge, Olivier Bouygues, 

Patricia Barbizet, Madame Francis Bouygues and 

François-Henri Pinault. 

Martin Bouygues, Olivier Poupart-Lafarge, Oliver 

Bouygues, Patricia Barbizet, Alain Dupont, Patrick 

Le Lay, Yves Gabriel and Alain Pouyat are corporate 

officers or directors of various companies in 

the Bouygues group. 

As far as Bouygues is aware, there are no other 

potential conflicts of interest, from the corporate 

point of view, between the duties of any of the 

members of the Board of Directors and their 

private interests and / or other duties. 

■ Judgments and orders 

As far as the company is aware, during the last 

five years, none of the members of the management 

bodies: 

• has been found guilty of fraud, 

• has been associated with any insolvency, 

sequestration or liquidation, 

• has been incriminated or subject to official 

public sanction by any statutory or regulatory 

body, including professional bodies, 

• has been prevented by a court from acting as 

a member of an issuer’s administrative, management 

or supervisory body or from being 

involved in an issuer’s management or the 

conduct of its business. 

■ Other information 

Patricia Barbizet and François-Henri Pinault were 

selected as members of the Board of Directors 

pursuant to the shareholders’ agreement entered 

into between SCDM and Artémis, the main provisions 

of which are summarised on page 132 of 

this document. No other member of the Board 

of Directors has been selected pursuant to any 

arrangement or agreement entered into with the 

company’s principal shareholders, customers, 

suppliers or other persons, and no such other 

arrangements or agreements exist. 

The members of the Board of Directors have not 

agreed to any restriction in relation to the sale 

of their investment in the capital of the company, 

with the exception of the rules relating to the 

prevention of insider dealing and the obligation 

contained in the by-laws whereby each director 

must be the owner of at least 10 shares in the 

company, on the understanding that the rules of 

procedure of the Board of Directors recommend 

that each director should be the owner of at least 

500 shares in the company throughout his or her 

term of office. 

With the exception of the employment contracts 

of salaried directors, there are no service contracts 

in existence between the members of 

the Bouygues Board of Directors and any of the 

company’s subsidiaries which provide for the 

granting of any benefits (subject to the contract 

between SCDM and Bouygues which has been 

approved under the regulated agreements procedure). 

1.1.3 Assessment of the Board of 

Directors 

In accordance with the provisions of the AFEP- 

MEDEF report, once a year the Board of Directors 

devotes an item on its agenda to the assessment 

of its own operations. 

This principle of governance has been included in 

the Board’s rules of procedure. 

Thus, on 13 December 2005, the Board of Directors 

118

devoted an item on its agenda to a discussion of 

its organisation and operations. A questionnaire 

and a note on the Board’s operations had been 

circulated to directors in advance to enable useful 

preparation for this exchange. 

At the meeting, directors representing the 

employee mutual funds expressed a wish to 

have a meeting with one of the Group’s directors 

before Board meetings, in order to improve preparation 

for such meetings and better understand 

the challenges and strategic decisions involved. 

It was decided that at their request, these directors 

could meet Olivier Poupart-Lafarge, Deputy 

CEO, before meetings of the Board of Directors. 

It was also decided to institute a system of 

notation in order for each director to be able to 

express his or her opinion more precisely on the 

various operational aspects of the Board. This 

procedure will be implemented at the next review 

of the Board’s operations. 

1.1.4. Changes to the membership of 

the Board 

■ Changes to the membership of the Board 

in 2005 

The Annual Meeting on 28 April 2005 renewed 

the appointment of Michel Rouger as director 

and appointed two directors, Thierry Jourdaine 

and Jean-Michel Gras, as representatives of the 

employee mutual funds. 

On 13 December 2005 Artémis, Financière Pinault 

and Tennessee resigned from office as directors. 

On the same date, the Board of Directors co-opted 

as directors François-Henri Pinault (as a replacement 

for Financière Pinault) and Patricia Barbizet 

(as a replacement for Artémis). François-Henri 

Pinault and Patricia Barbizet were previously 

the permanent representatives of Financière 

Pinault and Artémis on the Board of Directors, 

respectively. 

■ Changes to the membership of the Board 

proposed to the Annual Meeting 

Renewal of the term of office of three 

directors 

The Annual Meeting on 27 April 2006 will be asked 

to renew the appointments of Martin Bouygues, 

Monique Bouygues and Georges Chodron de 

Courcel, for a three-year term. 

Information about these directors appears on 

pages 108 and 111 of this document. 

Ratification of the co-option of two directors 


to ratify the co-option as directors of Patricia 

Barbizet, in place of Artémis, and François-Henri 

Pinault, in place of Financière Pinault, for the 

remainder of their terms of office. 

Information about these directors appears on 

pages 110 and 116 of this document. 

Appointment of a new director 


to appoint a new director, François Bertière, for a 

three-year term. 

François Bertière was born on 17 September 1950, 

is a graduate of the Ecole Polytechnique, the 

Ecole Nationale des Ponts et Chaussées engineering 

school, and a qualified architect. He started 

his career at the Ministry of Infrastructure. He 

was a technical adviser at the Education Ministry 

and then Deputy Director at the Department of 

Infrastructure of Upper Corsica, before becoming 

Director of Urban Development at the Public 

Development Office of Cergy-Pontoise. He joined 

the Bouygues Group in 1985 as Deputy CEO of 

Française de Construction. He was then appointed 

CEO and subsequently Chairman and CEO of 

France Construction. In 1998, he became Vice- 

Chairman and CEO of Bouygues Immobilier, and 

has been Chairman and CEO of that company 

since 2001. 

1.1.5. Meetings 

The Board of Directors holds four ordinary meetings 

a year, in February/March, June, September 

and December. At the February/March meeting, 

the Board closes the accounts for the previous 

financial year. At the June meeting, it reviews 

the company’s performance during the first half 

of the year and considers the strategic options 

for each line of business and for the Group as 

a whole. In September, the Board considers the 

half-year accounts, and in December it reviews 

the company’s business plans, estimated sales 

and profits for the past year and the outlook 

for the year to come. Since 2003, the Board 

has approved and published quarterly financial 

statements. Other Board meetings are held as the 

Group’s business requires. 

The agenda for Board meetings is in three parts: 

business activities, accounts and legal matters. 

A detailed review of each subject is provided to 

each director. Committee meetings are held prior 

to Board meetings. 

Since February 2003, the auditors have been 

systematically called to all meetings at which the 

Board considers annual or interim accounts. 

Persons who are not Board members, whether 

Bouygues group employees or not, may be invited 

to attend Board meetings. 

1.1.6. Rules of procedure 

The Board adopted a set of rules of procedure at 

its meeting on 10 September 2002. The rules of 

procedure were amended in June 2003 to take 

account of the recommendations of the Bouton 

report, in March 2005 in order to transpose 

the provisions of the AMF’s general regulations 

concerning dealings by corporate officers in the 

company’s securities, and in September 2005 in 

order to authorise participation in Board meetings 

by means of telecommunication. In February 

2006, the Board of Directors again amended its 

rules of procedure to take account of the entry 

into force of new provisions, and particularly by 

introducing a definition of criteria for the independence 

of directors in accordance with the 

European Recommendation of 15 February 2005 

and the AFEP-MEDEF report of October 2003. 

The main features of the rules of procedure are 

as follows: 

the rules of procedure set out the annual programme 

of work to be carried out by the Board. 

They provide that any significant disposals or 

acquisitions planned by the Group must be submitted 

to the Board in advance for approval. 

The rules are also designed to ensure that 

the Board receives the information it needs in 

order to function properly. Every year the Board 

devotes an item on the agenda of one of its meetings 

to an assessment of its own workings. 

It is recommended that each director own at 

least 500 Bouygues shares in registered form. 

Directors undertake not to vote on matters 

where they have a conflict of interest. They must 

disclose any transactions that they, or persons 

closely associated with them, may enter into in 

relation to the company’s securities within five 

days of the conclusion of such transactions, in 

accordance with the regulations in force. 

Annexes to the rules of procedure define the 

remit and operating rules of the four committees 

set up since 1995. These rules restrict membership 

of the committees to directors independent 

of the company’s management. Corporate officers 

or salaried directors of the company cannot 

therefore sit on the committees. The committees 

are chaired by independent directors. 

Particular attention has been paid to the 

Accounts Committee. In particular, the rules 

provide that the Accounts Committee should 

supervise the appointment of the auditors (the 

Committee implemented this provision in 2004 

because the terms of office of a statutory auditor 

and an alternate auditor were due to expire) and 

ensure that they are independent, for example 

by monitoring their fees. The rules of procedure 

also specify how the Remuneration Committee 


119

should monitor the performance-related element 

of corporate officers’ pay. It does not allow 

senior executives to be awarded stock options 

at a discount. 

The rules of procedure provide that at least two 

directors must be independent within the meaning 

of the European Recommendation and the 

AFEP-MEDEF report. 

1.2. Review of the business of 

the Board of Directors in 2005 

The Board met five times in 2005. The attendance 

rate of the directors was 88%. 

In addition to the decisions and votes included 

on the agenda under the prevailing laws and 

regulations, the Board considered the proposed 

privatisation of three motorway concession companies, 

and the proposed merger between TPS 

and CanalSatellite. 

On 1 March 2005 it examined the impact of 

the transition to IFRS on 31 December 2004, 

and decided to create the Francis Bouygues 

Foundation, intended to provide study grants to 

deserving young people. 

On 28 April 2005, it agreed the text of the replies 

to be given to written questions formulated by 

shareholders. 

On 21 June 2005, it decided to launch a €250 

million capital increase, reserved for employees, 

through the creation of a new leveraged mutual 

fund; it authorised the company to compensate 

for the dilutive effect of this increase in the 

share capital by purchasing shares with a view 

to their cancellation; it decided to create a Group 

pension fund; it approved the planned acquisition 

by Bouygues of the BNP Paribas Group’s stake in 

Bouygues Telecom; it examined the transactions 

resulting in the completion of the sale of Saur 

to PAI partners; and it analysed and agreed the 

principle and terms of bond issues. One such 

issue was completed on 21 July 2005 in a global 

amount of €750 million. The Board also authorised 

a stock option plan for the benefit of directors 

and employees of the Group, and cancelled 

1,048,873 shares in the company that had been 

bought back. 

On 13 September 2005, the Board approved the 

decision taken by the Group not to make a bid 

in the context of the privatisation of the three 

motorway concession companies in France. It 

examined the accounting treatment of the agreement 

with BNP Paribas relating to the potential 

purchase of its stake in Bouygues Telecom. 

On 13 December 2005, the Board discussed the 

proposed merger between TPS and CanalSatellite, 

and cancelled 7,312,776 shares that had been 

bought back. It also debated its own organisation 

and operating methods. 

More generally, the Board regularly reviewed 

developments in each of the Group’s lines of 

business. The strategic options and business 

plans of each line of business and of the parent 

company were presented to the Board for its 

approval. Every ordinary meeting of the Board 

commenced with a detailed presentation of the 

business and key figures of the company and its 

main subsidiaries. 

After hearing the reports from the committees 

concerned, the Board also drew up its 

management report, approved the annual and 

quarterly accounts, drew up the special report on 

stock options, reviewed the financial statements, 

approved the prospectus for the share buyback 

programme and set the amount of the dividend. 

1.3. Work of the committees 

established by the Board 

The Board has established four committees 

whose remit and operating rules are defined in 

the Board’s rules of procedure. 

1.3.1. Accounts Committee 

The Accounts Committee, created in 1995, reviews 

the quarterly and annual accounts before they 

are presented to the Board, ensuring that 

the accounting methods used to draw up the 

accounts are both relevant and consistent, and 

verifying the internal reporting procedures used 

for the collection and monitoring of the information 

on which the accounts are based. It also 

supervises the appointment of the auditors. 

The members of the Accounts Committee are 

Michel Rouger (Chairman), Patricia Barbizet and 

Georges Chodron de Courcel. Michel Rouger and 

Georges Chodron de Courcel are independent 

directors. Charles de Croisset, an independent 

director, was appointed to the Committee in 

February 2006. 

The Committee met four times in 2005 and the 

attendance rate of its members was 66.66%. 

The Committee verified the comparability of 

the accounts after changes in the scope of 

consolidation of the Group, and ensured that the 

extent of the audit was sufficient. It analysed the 

provisions included in the accounts according to 

subject matter and scope, and reviewed the quarterly 

accounts. It also examined the measures 

taken by the Group with a view to the adoption 

of IAS/IFRS, and approved the provision of information 

regarding the transition from the old to 

the new accounting principles. It checked the 

valuations of intangible fixed assets, goodwill, 

provisions for risks and charges and deferred 

tax assets. 

The Accounts Committee also examined the following 

matters: 

• control structure of Saur; 

• brand awareness surveys carried out for 

Eurosport; 

• treatment of the UMTS fee; 

• Bouygues Construction sites at risk; 

• sales of hotels and guarantees of income given 

to customers at Bouygues Immobilier; 

• activation of deferred taxes; 

• analysis of movements in TF1’s programme 

stock; 

• universal service and customer loyalty provisions 

at Bouygues Telecom; 

• Portsmouth contract entered into by Colas; 

• BFR goodwill and development; 

• operations for the cancellation of shares; 

• treatment of the Bouygues Confiance 3 plan; 

• fiscal deficits of TF1 Expansion; 

• revaluation of 2006 World Cup rights; and 

• procedures implemented at Bouygues 

Construction and TF1. 

In the context of its business, the Accounts 

Committee interviewed the Group’s Finance 

Director, Accounts and Audit Director and auditors, 

without senior executives present. 

1.3.2. Remuneration Committee 

The Remuneration Committee was created in 

1996 with the task of putting proposals to the 

Board concerning the remuneration and other 

benefits of corporate officers. Its members are 

Pierre Barberis (Chairman) and Patricia Barbizet. 

Pierre Barberis is an independent director. 

The Committee met once in 2005 and the attendance 

rate of its members was 100%. It considered 

the remuneration of corporate officers 

and the stock options awarded to them. It also 

examined and put to the Board reports on the 

remuneration of corporate officers and the award 

and exercise of stock options during the year. 

120

1.3.3. Selection Committee 

The Selection Committee was created in July 1997. 

Its task is to examine applications for directorships 

and proposals to create Board committees. 

It issues an opinion in the event of the appointment, 

renewal or dismissal of a Chief Executive 

Officer or Deputy Chief Executive Officer. The 

Committee comprises Jean Peyrelevade 

(Chairman) and François-Henri Pinault, who 

replaced Serge Weinberg on 13 December 

2005. Jean Peyrelevade is an independent 

director. 

The Selection Committee met twice in 2005. In 

February, it issued an opinion on the renewal of 

the appointment of Michel Rouger as a director. 

This opinion was positive. It also proposed that 

with effect from the Annual Meeting on 28 April 

2005, new or renewed terms of office of all directors 

should be reduced from six to three years. 

In December, it met to give an opinion on the 

replacement of Artémis and Financière Pinault. 

The attendance rate of this Committee was 100% 

in 2005. 

1.3.4. Ethics and Sponsorship 

Committee 

The Ethics and Sponsorship Committee, created 

in March 2001, monitors compliance with the 

Group’s values and rules of good conduct and 

issues opinions on corporate sponsorship projects. 

Its members are Lucien Douroux (Chairman), 

François-Henri Pinault and Michel Derbesse. 

Lucien Douroux is an independent director. 

The Committee met three times in 2005 and the 

attendance rate of its members was 88.88%. 

After reviewing numerous projects proposed to 

Bouygues, the Committee gave a favourable opinion 

on the commencement or continuation of 26 

sponsorship initiatives of a humanitarian, medical, 

social and cultural nature. The Committee 

also examined the new provisions published 

by the National Computers and Civil Liberties 

Commission containing a framework for whistleblowing 

procedures, before formulating an opinion 

for the Board of Directors. After approval by 

the Board of Directors, the terms and conditions 

of such a procedure will be submitted to staff 

representative bodies. 

1.4. Internal control procedures 

Bouygues and its subsidiaries are acutely aware 

of the importance of internal control, a process 

which helps to give reasonable assurance as to 

achievement of the Group’s principal objectives. 

Internal control bodies and procedures thus play 

a part in identifying, preventing and managing 

the main risk factors that could hinder the 

Group’s achievement of its objectives. 

While the general purpose of internal control is to 

help the Group achieve its operational objectives, 

it is also intended to ensure that the manner in 

which the Group is managed and conducts its 

business, and the behaviour of staff, comply with 

the regulations and with the rules and guidelines 

that Bouygues wishes Group companies to 

adhere to. 

It is of course in accounting and financial matters 

that internal controls are most widely applied, 

given the potential importance of the quality and 

reliability of the Group’s accounting and financial 

information. 

Like any control system, however, the system set 

up by Bouygues cannot provide a cast iron guarantee 

as to its capacity to achieve its objectives. 

1.4.1. General internal control 

environment 

The parent company and its senior executives 

strive to create an environment that promotes 

awareness among Group employees of the need 

for internal control. 

• Where ethics and integrity are concerned, the 

Chairman and CEO regularly issues strong messages 

to the Group’s senior executives about 

the need for their conduct to be irreproachable 

in every respect, which means both complying 

with prevailing laws and regulations and 

respecting the Group’s own values. 

He does so firstly at Group management meetings, 

which are attended once a quarter by 

the Group’s top managers, but also within 

the framework of the Bouygues Management 

Institute, which organises a monthly seminar 

on developing Bouygues’ values, designed to 

raise awareness among top management of the 

necessity to comply in all circumstances with 

laws and regulations and with the ethical rules 

that form the basis of the Group’s mindset. The 

Chairman and CEO of Bouygues and other members 

of the company’s general management 

always speak at these seminars. 

From time to time the Group’s Corporate 

Secretary organises executive seminars 

designed more specifically to remind participants 

of the regulations that apply in various 

areas and how they tie in with legal problems 

encountered by the company’s operating divisions. 

The Board of Directors of Bouygues has created 

an Ethics and Sponsorship Committee whose 

tasks include: 

• helping to define the rules of conduct and 

guidelines for action on which executives 

and other employees must base their behaviour, 

• proposing or advising on initiatives to promote 

exemplary professional conduct in this 

area, 

• ensuring compliance with the values and 

rules of conduct thus defined. 

The Ethics and Sponsorship Committee comprises 

three directors and is chaired by an 

independent director. 

In carrying out its work, the Committee may 

hear the Chairman of the Board or any person 

designated by him. 

• The maintenance of a high level of competence 

among Bouygues and Group employees is also 

one of the parent company’s aims, since it 

helps to create an environment favourable to 

internal control. Bouygues therefore takes a 

proactive approach to staff training while seeking 

to secure the loyalty of its senior employees. 

This will preserve a level of experience and 

knowledge of the company which will enable the 

Group’s culture and values to be passed on. 

By running the Bouygues Management Institute, 

and through the seminars it organises, the parent 

company makes a significant contribution 

to training the Group’s senior managers, while 

informing them of the company’s requirements 

and expectations in terms both of competence 

and mindset. 

• More generally, the philosophy that the parent 

company wishes its main subsidiaries to share 

is that of a group whose executive managers 

are close to their senior employees and whose 

management practices are transparent, prudent 

and rigorous. 

These principles are formulated at Executive 

Committee level and passed on to subsidiaries 

at all levels (Board of Directors, general 

management, management committee). Major 

decisions taken at the highest level, concerning 

UMTS or TV football rights, for example, are 

consistently inspired by this principle of rigorous 

and prudent management, and serve as 

a benchmark for the day-to-day management 

decisions taken by each line of business. 

• Lastly, the parent company plays a leading 

role in human resource management policy at 

Group level. 

Thus, the Senior Vice-President, Group Human 

Resources and Administration, chairs and coordinates 

the Group Human Resources Committee, 

an essential link for the transmission of the 

Group’s values. 


121

The Group’s human resources charter also contributes 

to the spreading of the Group’s culture 

by reminding everyone that the company’s 

development is primarily dependent on people. 

For their part, the operating divisions have 

been engaged for a number of years in the 

important task of raising awareness among 

their employees of the risks inherent in their 

businesses, so that these can be more successfully 

controlled. 

1.4.2. Objectives / activities and 

control procedures - risks 

Objectives / Management cycle 

The introduction of internal control procedures 

is linked to the definition of objectives that are 

compatible with the risks to which the Group is 

exposed. 

• The Group’s general objectives are defined 

through the management cycle, a process 

which enables the Group’s general management 

to participate upstream in defining the strategies 

of each operating division, to approve 

their business plans prepared in the context of 

that strategic framework, and then to monitor 

the progressive achievement of the objectives 

during the course of the year. 

The principles of the management cycle are 

directly applicable in all Group entities, thus 

ensuring that the Group as a whole has a solid 

and coherent structure. 

This iterative process enables the Group’s general 

management at all times to ensure that 

the objectives are consistent with the strategies, 

to monitor any discrepancies between the 

results and the objectives, and to anticipate 

the remedial measures to be taken at the 

level of the Group or of the operating division 

(financing requirements, redefinition of priorities, 

etc.). 

Another aim is to provide the Group’s general 

management and the Bouygues Board of 

Directors with all the information necessary for 

them to take decisions. 

The principal members of the parent company’s 

general management attend board meetings 

of the companies at the head of the Group’s 

operating divisions, and it is those boards 

that decide the strategic options and business 

plans. 

Strategic plan and business plan 

Each operating division defines its own medium-term 

strategic plan (over a three-year 

period) taking into account the Group’s general 

strategy and its own particular characteristics. 

The strategic plan is presented to the Group’s 

general management by the general management 

of each operating division and in June to 

the Bouygues Board of Directors. 

The resulting action plans form the basis of 

the three-year business plans, and these are 

presented to the Group’s general management 

by the general management of each operating 

division and in December to the Bouygues 

Board of Directors. 

Business plans are adjusted in March to take 

account of the accounts for the previous financial 

year and of any significant developments 

affecting the initial plan. 

Annual plan 

In the December business plan, the plan for the 

first year is the most detailed, representing a 

commitment by each operating division to the 

Group’s general management. This is known as 

the annual plan. 

A first review of progress (or an update) of the 

annual plan for the current year takes place in 

June, when the strategic plan is presented to 

the Group’s general management. 

A second update takes place in November, and 

is incorporated into the new business plan. 

• Alongside the Group’s general objectives, the 

parent company also sets more specific objectives 

relating, in particular, to the reliability 

of financial information, essential for a listed 

company, or to compliance with laws and regulations, 

which is essential to the Group’s success. 

Activities and control procedures 

Internal control implies the identification and 

analysis of factors that may hinder the achievement 

of objectives (concept of risks) and in some 

cases the introduction of the means to control 

such risks. It is characterised by the existence of 

bodies or structures exercising internal control, 

and the implementation of control standards and 

procedures. 

Major risks of a general nature 

• The various committees (major risks - QSE - 

sustainable development) 

In 2002, as part of its policy to control major 

risks, the parent company set up a major risk 

management committee whose task was to 

improve major risk management procedures 

within the various operating divisions. 

This committee, which existed until 2005, was 

wholly successful in carrying out its task since 

it raised the awareness of all the operating divisions, 

which set up procedures and/or structures 

for the management of major risks (risk 

analysis, crisis management, training, etc.). 

The principal issues examined by the operating 

divisions, depending on their activities, relate 

in general to: 

- technological risks, 

- environmental risks, 

- health risks and 

- protection of strategic assets. 

Since 2005, Bouygues has continued to have 

an organisational role as regards QSE and 

sustainable development, in relation to which 

two committees comprising senior executives 

from the operating divisions meet regularly 

under the chairmanship of Olivier Bouygues 

to discus matters considered essential by the 

parent company. 

• Guidelines for major risk management 

The parent company has laid down guidelines 

for major risk management at Group level with 

which subsidiaries are required to comply, 

while remaining entirely responsible for management 

of their own risks, with general management 

intervening only in exceptional cases. 

These guidelines encourage subsidiaries to 

introduce a risk control process that includes 

the following stages: 

- identification and classification, 

- assessment, selection and prioritisation, 

- treatment, control, monitoring and supervision. 

The guidelines also encourage subsidiaries to 

establish a crisis management system which 

includes a definition of alert thresholds and the 

organisation of a duty roster. 

In addition, the parent company organises 

crisis management training sessions for senior 

executives. 

• Legal aspects 

The Group’s Corporate Secretary monitors matters 

with significant legal implications for the 

Group. 

In this context, the Corporate Secretary and 

the parent company’s lawyers may occasionally 

become involved alongside the operating 

divisions in handling major disputes or matters 

having an impact at Group level. 

Bouygues’ Corporate Secretary chairs the 

Group’s legal committee which is made up of 

the legal directors of the operating divisions. 

He thus coordinates and supervises all the 

Group’s legal affairs. 

At parent company level, in addition to the 

powers of representation vested in corporate 

officers (Chairman & CEO, Deputy CEOs), there 

122

is a centralised and formalised system of delegated 

powers (in writing). 

Thus, certain powers are delegated directly 

by the Chairman & CEO to certain persons in 

clearly identified areas (for example, Alain 

Pouyat, Executive Vice-President, Information 

Systems and New Technologies, has extensive 

powers to represent the company in his area 

of activity). 

In addition, Olivier Poupart-Lafarge, Deputy 

CEO, delegates fairly wide powers to his most 

senior colleagues in support divisions to enable 

them to carry out their respective functions 

(for example, Jean-Claude Tostivin, Senior 

Vice-President, Group Human Resources and 

Administration; Lionel Verdouck, Senior Vice- 

President, Cash Management and Finance). 

He also delegates special powers to certain 

employees to carry out tasks of a limited 

nature. 

• Insurance 

The Group’s risks and insurance division provides 

assistance, advice and support to the 

Group’s subsidiaries. It also has a role in internal 

control procedures as applied to risk management. 

Having a comprehensive overview of the policy 

of the various operating divisions as regards 

insurance, the Group’s central risk and insurance 

department takes out Group insurance to 

complement the insurance taken out at operating 

division level. 

It ensures that subsidiaries are insured with 

first-class companies and that the terms of 

their policies (coverage, deductibles, premiums) 

are consistent with the risk to which they 

are exposed. 

In 2005, the central risk and insurance department 

also assumed direct responsibility for the 

insurance of Finagestion. 

Risks specific to the operating divisions 

Each operating division is responsible for examining 

the specific risks to which it is exposed 

and for adopting the appropriate procedures 

according to the nature of the risks identified. 

These specific risks may differ considerably 

depending on the operating division concerned. 

For example, they may relate to regulation (TF1, 

Bouygues Telecom), public health (Bouygues 

Telecom), technology (TF1, Bouygues Telecom), 

competition (Bouygues Telecom), the environment 

(Colas), or the economic or political situation 

of a particular country. 

The operating divisions have also set up very 

formalised commitment procedures intended 

to ensure better control of commercial commitment. 

Thus, depending on the level of financial commitments, 

the amount of works or the technical 

challenges involved, the various entities of 

Bouygues Construction are obliged to make an 

application to request the agreement of the 

company’s general management. 

This is also the case at Colas where, despite 

a very strong culture of decentralisation, 

arrangements exist for the control of commitments 

both in terms of commercial commitments 

(submission of projects to “contract 

committees”) and in terms of external growth 

transactions, which must be presented and 

secure the prior agreement of the general 

management of Colas and sometimes even of 

its Board of Directors. 

At TF1, particular attention is given to the 

purchasing process, which can result in very 

substantial commitments (for example in the 

case of contracts for the purchase of rights). 

These contracts are subject to a very precise 

validation procedure involving various departments, 

and sometimes general management, 

according to the amount of the commitments 

and the nature of the contract concerned. 

At Bouygues Telecom, commercial offers 

involve very substantial stakes and this is the 

reason why they are examined by an offers 

committee in which the general management 

of the company is involved. Since 2005 a socalled 

“offers balance sheet” has been created 

for the same reasons in order to ensure that 

commercial offers made are followed up and 

that the results are monitored in the light of 

initial forecasts. 

In 2003, the Bouygues Board of Directors commissioned 

Philippe Montagner, a member of 

Bouygues’ general management, to carry out a 

global assessment of the major risks to which 

the Group is exposed. Every year, he lists and 

analyses the procedures and measures adopted, 

and produces a report for the Bouygues 

Board of Directors and general management, 

which analyses the major risks faced by the 

Group and is used as the basis for the preparation 

of an annual report mapping and prioritising 

the main risks. 

Finally, the Group’s general management may 

also commission a specific audit of a given risk, 

either by an outside consultant or internally by 

the audit department of the operating division 

concerned. 

Financial and accounting risks 

• Group consolidation department 

A Group consolidation/accounting department 

exists within the parent company, and reports 

to Olivier Poupart-Lafarge, Deputy CEO. Its principal 

task is to define and establish consistent 

rules and methods of consolidation for the 

Group and to assist the operating divisions in 

their consolidated management. It also prepares 

the parent company accounts. 

Consolidation is carried out quarterly on a 

step-by-step basis. Each operating division 

consolidates at its own level using identical 

methods defined by the Group consolidation 

department, which then carries out the overall 

consolidation of the Group’s accounts. 

A specific software product developed by a 

specialist company is used to consolidate the 

accounts at the various levels, ensuring that 

principles and rules validated by the auditors 

are consistently applied. A very large number 

of listed companies use this software. It is 

implemented by each of the operating divisions 

in the context of their step-by-step approach 

to consolidation, and ensures rigorous control 

over preparation of the accounts, which are 

thus subject to standard procedures. 

In addition to the computerised accounting 

system, a number of years ago the Group 

consolidation department produced a Group 

consolidation handbook containing the rules 

and procedures which constitute the essential 

principles applicable to consolidation throughout 

the Group. The handbook is an important 

reference tool for the preparation of the 

consolidated accounts. In the context of the 

transition to IAS/IFRS, the Group consolidation 

department has created a dedicated intranet 

site setting out the various principles and 

options that apply within the Group. 

As part of its task of organising and coordinating 

consolidation of the accounts, the 

Group consolidation department also regularly 

provides the operating divisions with information 

about the rules and methods that apply 

(by organising seminars, distributing circulars, 

etc.), and thus helps to maintain the consistency 

of the consolidated accounts preparation 

system. This has particularly been the case in 

relation to the introduction of IAS/IFRS. 

The company uses the Adamau accounting software 

for the management of obligations and 

control of expenditure, together with the Ulysse 

software for the monitoring of expenses, which 

enables formalised and secure procedures to 

be applied when expenses are incurred. 

• Accounts Committee 

The Board of Directors of Bouygues set up 

the Accounts Committee in 1995. Its task is, 


123

in particular, to ensure that the accounting 

methods adopted for the preparation of the 

accounts are both relevant and consistent, and 

to verify the internal procedures for reporting 

and monitoring the information on which the 

accounts are based. 

In addition to carrying out general and regular 

checks, the committee selects specific subjects 

for detailed examination, such as the consequences 

of disposals or acquisitions. It checks 

the accounting treatment of the risks incurred 

by the various companies of the Group, particularly 

country risks and, in the case of Bouygues 

Construction, the risks involved in the completion 

of certain projects. The committee pays 

particular attention to changes in accounting 

methods, and therefore regularly examines 

decisions and measures taken to implement 

the new IAS/IFRS. 

Chaired by an independent director, the committee 

meets at regular intervals (it met four 

times in 2005). It interviews the auditors without 

representatives of the company being present, 

and can issue any reports and opinions for 

the Board of Directors. In 2005, the auditors 

provided the Accounts Committee with a report 

summarising their work, dealing particularly 

with internal control, and commented on this 

report to the committee. 

The same systems are in place within the 

Boards of the major subsidiaries, all of which 

have created an accounts committee. 

• Management control 

The global organisation of the management 

control system is such that no Group company 

can avoid the control process. All companies 

not controlled by the operating divisions are 

controlled by the parent company. 

Using procedures of various kinds, the parent 

company also exercises management control 

at its own and at Group level. 

The rules governing relations between the parent 

company and the operating divisions were 

summarised in a document produced by the 

Group strategies and development department 

in 2001. This document was updated in 2005, 

and serves as a reference for all the operating 

divisions. 

Parent company management control 

The Group’s strategies and development department 

prepares an annual expenditure budget in 

close cooperation with other departments of 

the parent company. 

Structural expenses are monitored on a monthly 

basis so that any discrepancies in relation 

to the budget can be swiftly identified and 

analysed. 

This analysis helps to identify discrepancies 

which could cast doubt on the annual forecast. 

Twice a year, the Group strategies and 

development department updates the expenditure 

budget for the current year in liaison with 

the departments concerned. 

Group reporting 

The parent company systematically controls its 

subsidiaries’ financial management by means 

of the annual plan (including updates) and 

monthly sets of indicators. The indicators are 

sent directly to the Group’s general management 

and centralised by the Group’s strategies 

and development department, which plays a 

pivotal role in the Group’s management control. 

The sets of monthly indicators provided to 

the parent company are the same as those 

prepared by each operating division for its own 

general management. 

Every quarter, interim accounts are produced 

along with the monthly indicators. 

Thus, the management cycle and the control 

and reporting procedures provide a regular 

flow of information and ensure a constant 

dialogue with the operating divisions. As a 

result, plans can be adjusted and the parent 

company is always in a position to control the 

management of its subsidiaries and intervene 

in advance of strategic decisions. 

• Cash management and finance 

The parent company’s cash management and 

finance department defines and monitors the 

application of sound financial management 

principles at Group level. Its role is both to 

organise and coordinate. 

The operating principles mainly concern the 

Bouygues Relais and Uniservice cash management 

centres, which are managed by the parent 

company, and the operating divisions’ own cash 

management centres. They also apply to the 

financing of subsidiaries. 

The fundamental rules of prudent management 

particularly relate to internal security 

(two signatures for payments, etc.), external 

security (secure cheques, payment by promissory 

note, etc.), liquidity (confirmed lines of 

credit, investment of surplus cash, etc.), the 

quality of counterparties, the terms of loan 

agreements (absence of covenants, etc.) and 

the assessment and hedging, where necessary, 

of exchange rate risks. 

• Internal audit 

Audit is a means of analysis, control and information 

which plays a vital role in risk analysis 

and management. All the operating divisions 

are aware of the importance of internal audit, 

to the extent that they have decided to set up 

their own permanent internal audit structures. 

The decentralisation of audit departments continued 

in 2005, and every operating division 

now has a structured internal audit department 

carrying out tasks in a very broad range 

of areas including management control and 

finance. 

Audits are carried out according to a rigorous 

methodology. After each audit a report is prepared 

containing an analysis and recommendations 

which are then followed up. 

There is also a central Group audit department 

at parent company level, which mainly carries 

out audits of the operating divisions’ IT systems 

at the request of the Group’s general management 

or that of the operating division itself. 

• Whistleblowing procedure 

In 2003, the Bouygues group set up a whistleblowing 

procedure, which is intended to enable 

the Group’s employees to report ethical irregularities. 

The procedure is in the process of being adjusted 

to bring it into line with recent recommendations 

of the National Computers and Civil 

Liberties Commission. In accordance with the 

Recommendation of the European Commission 

dated 15 February 2005 relating to the role of 

directors, the procedure will operate under the 

control of the Accounts Committee but also of 

the Ethics Committee of the Board of Directors. 

1.4.3. Information and communication 

The production and dissemination of information, 

both inside and outside the Group, does much to 

enhance internal control. 

Existing information systems (cf. Section 1.4.2) 

provide a means of managing and controlling the 

business, and communication helps both to make 

staff more aware of the importance of control 

and to provide those outside the Group with reliable 

and relevant information in compliance with 

legal requirements. 

Internal communication 

The Group’s internal communication department 

plays an active part in circulating information 

to the Group’s employees, which strengthens 

the Group’s identity and helps bind Bouygues 

employees together. 

Reporting directly to the Chairman and CEO, 

it is responsible for the bi-monthly newsletter 

124

Challenger Express, intended for senior executives 

and heads of department, and for the 

magazine Le Minorange, published twice yearly, 

which provide a real link between all the Group’s 

employees. 

It also supervises e.by and ebysa, the Bouygues 

group and parent company intranet portals, 

which provide online access to large amounts of 

information and are used by Group and company 

employees as a real working tool. 

The Group’s internal communication department 

also publishes Bouygues in Brief, a brochure containing 

financial information which is circulated 

externally as well as to managerial, technical and 

administrative staff. 

Group management meetings, which are attended 

four times a year by the Group’s principal 

managers and directors, also play an essential 

role in internal communication, and help transmit 

the Group’s culture and values. For general management 

at Group level, they provide an important 

channel for transmitting key information 

and messages to the Group’s top executives. 

External communication 

The Group’s external communication department 

reports directly to the Group’s Chairman and CEO, 

and works in close cooperation with the operating 

divisions for their mutual benefit. 

Its main tasks are: 

• to manage the Group’s image (press relations, 

public relations, corporate sponsorship, etc.); 

• to pass on information from external sources 

to the Group’s general management and 

executives. 

Financial information 

The Group’s cash management and finance 

department is responsible for providing financial 

information (relations with investors and financial 

analysts) and is constantly in contact with 

shareholders and analysts while providing the 

market with the information it needs. 

Great care is taken to prepare the Annual Report, 

which the Group considers a major channel of 

communication. 

1.4.4 Steering 

Internal control systems must themselves be 

controlled by means of regular assessments. 

Bouygues’ Accounts Committee is the main body 

responsible for exercising such supervision. 

Under the Board’s rules of procedure, one of the 

tasks of the Accounts Committee is to “verify 

internal procedures for gathering and monitoring 

the information used to prepare the accounts”. 

The Board has also asked Philippe Montagner, a 

member of general management, to conduct a 

comprehensive review of the major risks to which 

the Group is exposed, including an assessment of 

the extent to which the risks associated with the 

Group’s various entities are taken into account. 

Finally, the auditors also play an important role 

in this regard, through their remarks or questions 

in the context of their conventional audits 

and the recommendations they may make to the 

Accounts Committee. 

The Chairman of the Board of Directors 

2. SUPERVISION BY THE 

AUDITORS 

2.1. Statutory auditors 

Mazars & Guérard (Mazars group), of 39, rue de 

Wattignies, 75012 Paris, France, represented by 

Michel Rosse, appointed as statutory auditors for 

the first time at the Annual Meeting on 10 June 

1998, and whose appointment was renewed for a 

further six-year term by the Annual Meeting on 

22 April 2004. 

Mazars & Guérard are members of the Paris 

regional association of auditors. 

Ernst & Young Audit, of Faubourg de l’Arche, 11 

allée de l’Arche, 92400 Courbevoie, France, represented 

by Jean-Claude Lomberget, appointed as 

statutory auditors for the first time at the Annual 

Meeting on 24 April 2003, for a six-year term. 

Ernst & Young Audit are members of the Versailles 

regional association of auditors. 

2.2. Alternate auditors 

Thierry Colin (Mazars group), appointed as alternate 

auditor for the first time at the Annual 

Meeting on 25 May 2000, and whose appointment 

was renewed for a further six-year term by the 

Annual Meeting on 22 April 2004. 

Christian Mouillon (Ernst & Young group), appointed 

as alternate auditor for the first time at the 

Annual Meeting on 24 April 2003, for the same 

term of office as Ernst & Young Audit. 

2.3. Fees of the statutory 

auditors and of the members 

of their networks paid by the 

Group 

The fees paid to each of the statutory auditors 

and to the members of their network by Bouygues 

and all fully consolidated Group companies are 

shown in note 23 to the consolidated financial 

statements (page 205 of this document). 


125

REMUNERATION OF CORPORATE OFFICERS - STOCK OPTIONS 

1. REMUNERATION OF CORPORATE OFFICERS 

1.1. Report on remuneration of corporate officers - Stock options 

Chairman 

M. Bouygues (1) & CEO 

32 years 

O. Poupart-Lafarge 

Position 

and length 

of service 

within the 

Group 

Deputy CEO 

32 years 

O. Bouygues (1) Deputy CEO 

32 years 

Sub-total of directors’ fees 2005: 

Chairman & CEO + Deputy CEOs 

Remuneration (1) 

+ 

Directors’ fees (5) 

Fixed 

Variable 

920,000 

0% 

1,380,000 

0% 

920,000 920,000 

0% 

1,380,000 1,380,000 

0% 

920,000 

1,380,000 

% variable / fixed 150% 150% 

Bouygues directors’ fees 48,784 48,784 48,784 48,784 

Subsidiaries directors’ fees 25,416 25,416 26,666 26,666 

TOTAL 2,374,200 2,374,200 2,375,450 2,375,450 

Fixed 

Variable 

920,000 

0% 

1,242,000 

0% 

920,000 920,000 

0% 

1,242,000 1,380,000 

+11% 

920,000 

1,242,000 




TOTAL 2,239,732 2,239,732 2,379,857 2,241,857 

Fixed 

Variable 

920,000 

0% 

1,012,000 

+7.9% 

920,000 920,000 

0% 

937,625 1,012,000 

0% 

920,000 

1,012,000 




TOTAL 1,988,954 1,914,579 2,002,669 2,002,669 

Bouygues directors’ fees 

Subsidiaries directors’ fees 

Total 

Amounts in respect 

of the financial year 

2004 (2) 

in euros 

Amounts in respect of 

the financial year 2005 (2) 

Benefits in kind (4) 

Criteria for variable remuneration 

in euros (3) in euros 

- difference between the Bouygues share 

price and changes in the CAC 40 index 

(50%) 

- change in Bouygues group share of net 

consolidated profit (50%) 



(27%) 



- several qualitative criteria (33%) 



(18%) 




135,236 

+8.9% 

4,140 

0% 

82,584 

+1.4% 

50,236 

-63% 

4,176 

+0.87% 

10,584 

-87% 

Allocation of 

stock options 

in number of options 

due paid due paid in 2004 in 2005 in 2004 in 2005 

97,568 

128,408 

225,976 

200,000 0 

100,000 100,000 

100,000 100,000 

126

A. Dupont 

P. Le Lay 

Y. Gabriel 

A. Pouyat 

Position and 

length of 

service within 

the Group 

Director 

41 years 

Director 

25 years 

Director 

31 years 

Director 

36 years 

Remuneration (1) 

+ 

Directors’ fees (5) 



2004 (2) 

in euros 

Fixed 

920,000 920,000 920,000 920,000 

0% 

0% 

Variable 

1,334,000 1,334,000 1,380,000 1,334,000 

0% 

+3.45% 

0 


Special bonus - - 690,000 - 



TOTAL 2,293,392 2,293,392 3,029,392 2,293,392 

Fixed 

920,000 920,000 920,000 920,000 

0% 

0% 

Variable 

1,132,667 1,380,000 1,216,000 1,132,667 

-17.9% 

+7.36% 




TOTAL 2,184,109 2,431,442 2,268,692 2,185,359 

Fixed 

750,000 750,000 850,000 850,000 

+2.8% 

+ 13.33% 

Variable 

825,000 739,310 1,062,500 825,000 

+11.6% 

+28.80% 



TOTAL 1,599,392 1,513,702 1,936,892 1,699,392 

Fixed 

800,000 800,000 920,000 920,000 

-5.4% 

+15% 

Variable 

644,000 500,000 782,000 644,000 

+28.8% 

+21.43% 

% variable / fixed 80.5% 85% 



TOTAL 1,489,740 1,345,740 1,755,088 1,617,088 



2005 (2) 

in euros 

Criteria for variable remuneration (3) Benefits in kind (4) 

in euros 



(7%) 



- change in Group share of net consolidated 

profit of Colas (50%) 




(7%) 

- difference between the TF1 share price and 

changes in the CAC 40 index (20%) 


profit of TF1 (40%) 




(18%) 


profit of Bouygues Construction (40%) 


- Bouygues profit (8%) 



(18%) 




- profit of Bouygues Telecom (17%) 

4,100 

0% 

4,140 

0% 

8,748 

+42.7% 

4,404 

+7.7% 

4,100 

0% 

4,140 

0% 

8,748 

0% 

4,404 

0% 

Allocation of 

stock options 

in number of options 

due paid due paid in 2004 in 2005 in 2004 in 2005 

100,000 100,000 

0 0 

75,000 100,000 

75,000 100,000 


127

Amounts in respect (3) The percentages show the proportion represented by these criteria in the calculation of the total 

Position Remuneration (1) Amounts in respect of the 

financial year 2004 (2) 

of the 

variable remuneration. All the variable remuneration is subject to a ceiling equal En nombre to a percentage d’options of 

En euros 

within the 

+ 

financial year 2005 

Group Directors’ fees (5) 

in euros 

the fixed salary. The percentage depends 

Critères de la rémunération variable (3) on the individual director. 

Avantages en nature (4) Attribution de 

stock-options 

in euros 

(4) Benefits in kind consist of the provision of a company car, plus, in the case of Martin Bouygues 

and Olivier Bouygues, part-time provision of an assistant and of a driver/security guard for their 

due paid due paid personal needs. 

en 2004 en 2005 en 2004 en 2005 

The percentages show variations by reference to the previous financial year, 2003 or 2004. 

P. Barberis Director Bouygues directors’ fees 30,490 30,490 30,490 30,490 

(5) Bouygues directors’ fees = the amounts include directors’ fees paid in respect of participation on 

Artémis 

24,392 24,392 24,392 24,392 


one or more of the Board’s committees. 

P. Barbizet 

Director 

12,196 12,196 12,196 12,196 Subsidiaries directors’ fees = directors fees paid by Group companies within the meaning of Article 

(permanent rep.) 


L. 233-16 of the Commercial Code. 

Mme F. Bouygues Director Bouygues directors’ fees 24,392 24,392 24,392 24,392 

(6) In accordance with the guide dated 27 January 2006 for preparation of the Annual Report, 

published by the Autorité des Marchés Financiers, salaries paid to the two directors representing 

G. Chodron de Courcel Director Bouygues directors’ fees 30,490 30,490 30,490 30,490 employee shareholders who have a contract of employment with Bouygues or one of its 

subsidiaries are not included. 

C. de Croisset Director Bouygues directors’ fees 24,392 24,392 24,392 24,392 

M. Derbesse (7) Director 



L. Douroux Director Bouygues directors’ fees 30,490 30,490 30,490 30,490 

JM. Gras (6) Director Bouygues directors’ fees - - 28,294 18,294 

T. Jourdaine (6) Director Bouygues directors’ fees 24,392 24,392 24,392 24,392 

J. Peyrelevade Director Bouygues directors’ fees 30,490 30,490 30,490 30,490 

Financière Pinault 

FH. Pinault 

(permanent rep.) 

Director 


24,392 

6,098 

24,392 

6,098 

24,392 

6,098 

24,392 

6,098 

M. Rouger Director Bouygues directors’ fees 30,490 30,490 30,490 30,490 

Sub-total of directors’ fees 2005 (8) : 

Directors 

Bouygues directors’ fees 488,693 

Subsidiaries directors’ fees 211,158 

Total 699,851 

Overall total of directors’ fees (8) Subsidiaries directors’ fees 328,345 339,566 

Bouygues directors’ fees 561,016 586,261 

Total 889,361 925,827 

(1) The remuneration of corporate officers and salaried directors is determined with reference to remuneration paid in 

comparable companies. With the exception of the remuneration paid to Michel Derbesse described in paragraph (7) opposite, 

no remuneration and no directors’ fees other than those mentioned above were paid to corporate officers by Group 

companies. Remuneration is paid by Bouygues with the exception of that of Alain Dupont who is paid directly by Colas and 

with the exception of that of Martin Bouygues and Olivier Bouygues, which is invoiced by SCDM to Bouygues in the context 

of the agreement governing relations between Bouygues and SCDM, which has been approved pursuant to the procedure for 

regulated agreements. 

Part of the remuneration paid by Bouygues is invoiced back to the subsidiaries when the person concerned holds a 

management position there. 

(2) The amount due = all the amounts allocated in respect of one financial year. 

The amounts paid = all the amounts paid in the course of the financial year, on the understanding that the variable part 

allocated in respect of a financial year is actually paid in the course of the first quarter of the following financial year. 

The percentages of the fixed and variable remuneration inserted below show variations by reference to the previous financial 

year, 2003 or 2004. 

(7) The appointment of Michel Derbesse as Deputy CEO expired on 1 March 2005. In the first two 

months of the financial year 2005, Michel Derbesse received gross fixed remuneration of €153,333 

in respect of this appointment, and received benefits in kind amounting to €15,093. 

Michel Derbesse’ contract of employment had been suspended during the period in which he held 

this company office. 

Upon Michel Derbesse’ retirement in 2005 (with 44 years’ service with the Group), he was paid a 

lump sum and three months’ notice in accordance with the collective agreement of the building 

industry, namely a total amount of €2,620,275. 

These lump sum payments were approved pursuant to the regulated agreements procedure. 

In order to ensure the completion of two current assignments, two support contracts of a duration 

of one year have been entered into between Michel Derbesse and two subsidiaries of the Group. 

Each of these contracts provides for the payment of a monthly sum of €10,000 during the contract 

term. 

(8) Total including directors’ fees paid to Carmelina Formond (€12,196) and Serge Weinberg, permanent 

representative of Tennessee (€30,490), directors who left the Board of Directors in 2005. 

Additional retirement provision: 

Corporate officers and salaried directors have the benefit of the additional retirement provision 

introduced for the members of the Group’s general management committee, namely 

0.92% of the reference salary per year of service under the regime. The Group is not obliged 

to set aside provisions in respect of this additional retirement provision, which takes the 

form of an insurance policy taken out with an insurer outside the Group. This additional 

retirement provision has been approved pursuant to the regulated agreements procedure. 

Other commitments: 

The company and its subsidiaries have not entered into any commitment and are not given 

any undertaking relating to the granting of a lump sum upon the retirement of the Chairman, 

Deputy CEOs or salaried directors. In respect of his or her contract of employment, a salaried 

director or a senior executive whose contract of employment has been suspended during 

the period in which he or she holds that appointment, has the benefit of the collective agreement 

applicable to the company, and may therefore receive the lump sum provided for in the 

said collective agreement in the event of dismissal or retirement. 

128

2. REPORT ON THE ALLOCATION AND EXERCISE OF 

STOCK OPTIONS 

Special report on options granted pursuant to Articles L. 225-177 to L. 225-186 of the Commercial Code 

2.1. General information: distribution of options per plan and per 

category of beneficiaries 

1999 2000 2001 2002 2003 2004 2005 

Date of AGM 27/06/1995 25/05/2000 25/05/2000 25/05/2000 25/05/2000 22/04/2004 28/04/2005 

Date of Board 

meeting 

Number of options 

allocated by the 

Board (1) : 

- including 

corporate officers 

30/03/1999 

06/07/1999 

04/11/1999 

- including ten 

employees of the 

company 

Original exercise €219.77 

price before 

to 

adjustment (1) €297.95 

€18.35 

Exercise 

adjustment (2) €25.18 

price after 

to 

Start date for 

exercise 

Expiry date 

Number of 

options valid 

on 31/12/2005 

04/07/2000 

27/03/2001 

03/07/2001 

18/09/2001 

25/06/2002 

17/12/2002 

17/06/2003 15/03/2004 21/06/2005 

342,350 1,239,800 4,023,600 3,598,100 2,996,000 3,180,750 3,102,500 

30/03/2004 

06/07/2004 

04/11/2004 

29/03/2006 

05/07/2006 

03/11/2006 

€69.13 

€58.74 

04/07/2005 

03/07/2007 

690,000 1,150,000 625,000 800,000 500,000 

1,180,000 320,000 412,000 422,000 406,000 

€33.75 

to 

€39.40 

€28.67 

to 

€33.47 

27/03/2005 

03/07/2005 

18/09/2005 

26/03/2008 

02/07/2008 

17/09/2008 

€27.56 

to 

€27.08 

€23.41 

to 

€23.00 

25/06/2006 

17/12/2006 

24/06/2009 

16/12/2009 

€22.80 €29.61 €31.34 

€19.37 €25.15 €31.34 

17/06/2007 15/03/2008 21/06/2009 

16/06/2010 14/03/2011 20/06/2012 

1,728,627 1,277,227 4,067,425 3,953,864 3,388,884 3,583,693 2,954,000 

2.2 Options granted and exercised in 2005 

The twentieth resolution of the Annual Meeting on 28 April 2005 authorised the Board of Directors on 

one or more occasions to grant options conferring a right to subscribe for new shares or to purchase 

existing shares. This authorisation was conferred for a period of five years and required the beneficiaries 

of these options to be employees and/or corporate officers of Bouygues or of companies or 

economic interest groupings directly or indirectly associated with Bouygues under the terms of Article 

L. 225-180 I of the Commercial Code. 

2.2.1 Granting of options 

■ General information 

Options conferring a right to subscribe for new Bouygues shares were granted during 2005. On 21 June 

2005, the Board of Directors allocated 3,102,500 options to 984 beneficiaries, corporate officers or 

employees of the company or of companies in the Bouygues group. 

Date of allocation 

Number of options allocated 

Exercise price of the options 

(€) 

21 June 2005 3,102,500 31.34 

The exercise price of these options was fixed without discount, at the average of the opening prices on 

the 20 stock market days preceding the Board meeting at which the options were granted. 

These options are valid for a period of seven years from the date of their allocation. 

■ Options granted to corporate officers and salaried directors of Bouygues 

Corporate officers, 

salaried directors 

Company 

granting 

the options 

Date 

of the allocation 

Number of 

options 

Exercise price 

of the options 

(€) 

Olivier Bouygues Bouygues 21 June 2005 100,000 31.34 

Alain Dupont Bouygues 21 June 2005 100,000 31.34 

Yves Gabriel Bouygues 21 June 2005 100,000 31.34 

Olivier Poupart-Lafarge Bouygues 21 June 2005 100,000 31.34 

Alain Pouyat Bouygues 21 June 2005 100,000 31.34 

Total Bouygues 500,000 

Total: 20,953,720 

(1) The figures given for the year 1999 are those determined by the Board before the share split (see (2) below). 

(2) As required by law, the exercise prices were adjusted upon the increases in the share capital that took place on 30 July 1999 and 10 April 

2000. They take account of the ten-for-one share split that took place in 2000. They were also adjusted on 7 January 2005 due to an 

exceptional payout. 


129

■ Options granted to the ten employees (other than corporate officers) of Bouygues who 

received the largest number of options during the financial year 2005 

Names 

Company 

granting the 

options 

Date of 

the allocation 

Number of 

options 

Exercise price of 

the options (€) 

Jacques Bernard Bouygues 21 June 2005 14,000 31.34 

François Bertière Bouygues 21 June 2005 100,000 31.34 

Michel Buxeraud Bouygues 21 June 2005 9,000 31.34 

Blandine Delafon Bouygues 21 June 2005 11,000 31.34 

Ariel Dubois de Montreynaud Bouygues 21 June 2005 11,000 31.34 

Jean-François Guillemin Bouygues 21 June 2005 30,000 31.34 

Philippe Montagner Bouygues 21 June 2005 100,000 31.34 

Jean-Claude Tostivin Bouygues 21 June 2005 30,000 31.34 

Lionel Verdouck Bouygues 21 June 2005 30,000 31.34 

Gilles Zancanaro Bouygues 21 June 2005 12,000 31.34 


During the financial year 2005 corporate officers and employees of Bouygues did not receive options 

granted by companies associated with Bouygues under the terms of Article L. 225-180 of the Commercial 

Code or by companies controlled by Bouygues within the meaning of Article L. 233-16 of the Commercial 

Code. 

2.2.2 Options exercised by corporate officers and employees of Bouygues in 

2005 

■ General information 

The following Bouygues options were exercised by corporate officers and salaried directors of the 

Group in 2005, as well as by all the Group’s employees: 

Plan 


of the options (€) 

Number of options 

exercised in 2005 

30/03/1999 18.35 1,610,981 

06/07/1999 21.01 119,150 

04/11/1999 25.18 157,002 

27/03/2001 33.47 196,128 

03/07/2001 32.81 88,447 

18/09/2001 28.67 188,447 

25/06/2002 23.41 11,985 

17/06/2003 19.37 15,035 

15/03/2004 25.15 4,415 

21/06/2005 31.34 2,000 

Total 2,393,590 

■ Options exercised by corporate officers and salaried directors of Bouygues 

Corporate officers 

Company 

granting the 

options 

Plan 

Number 

of options 

exercised 

Exercise price of 

the options 

(€) 

Martin Bouygues Bouygues 30/03/1999 269,533 18.35 




30/03/1999 

27/03/2001 

131,777 

23,538 

18.35 

33.47 

Olivier Poupart-Lafarge Bouygues 30/03/1999 131,777 18.35 

Michel Derbesse (corporate 

officer until 01/03/2005) 

Alain Dupont 

Bouygues 30/03/1999 191,681 18.35 


Colas 

18/09/2001 

21/03/2000 

188,447 

10,600 

28.67 

43.65 

Patrick Le Lay TF1 18/03/1998 200,000 10.02 

Total 


Colas 

TF1 

936,753 

10,600 

200,000 

■ Options exercised during the financial year 2005 by the ten employees of Bouygues 

subscribing for the highest number of shares 

Corporate officers 

Company 

granting the 

options 

Plan 

Number 

of options 

exercised 


of the options 

(€) 

Jacques Bernard Bouygues 30/03/1999 14,394 18.35 

Gérard Bucourt Bouygues 30/03/1999 11,993 18.35 

Michel Buxeraud Bouygues 30/03/1999 14,394 18.35 

Blandine Delafon Bouygues 30/03/1999 11,993 18.35 

Jean-François Guillemin Bouygues 30/03/1999 21,573 18.35 

Gérard Lemarié Bouygues 30/03/1999 10,793 18.35 

Philippe Montagner Bouygues 30/03/1999 131,777 18.35 

Jean-Claude Tostivin Bouygues 30/03/1999 21,573 18.35 

Lionel Verdouck Bouygues 30/03/1999 21,573 18.35 

Gilles Zancanaro Bouygues 30/03/1999 11,993 18.35 


During the financial year 2005, the company registered the exercise of 1,184,781 Bouygues options by 

employees of the company or its subsidiaries, other than corporate officers, salaried directors and the 

ten persons mentioned above. 

The Board of Directors 

130

SHARE OWNERSHIP 

1. CHANGES IN SHARE OWNERSHIP OVER THE LAST THREE YEARS 

Situation at 31 December 2005 Situation at 31 December 2004 Situation at 31 December 2003 

Shareholder 

Number 

of shares 

% 

of capital 

Number of 

voting rights 

% of voting 

rights 

Number 

of shares 

% 

of capital 

Number of 

voting rights 

% of voting 

rights 

Number 

of shares 

% 

of capital 

Number of 

voting rights 

% of voting 

rights 

SCDM (1) 61,262,080 18.19 107,372,414 25.34 56,849,198 17.08 103,411,302 24.72 47,084,100 14.13 93,937,290 22.05 

Artémis group (2) 26,266,778 7.80 29,573,296 6.98 26,306,518 7.91 29,613,036 7.08 27,006,518 8.11 31,013,036 7.28 

Total shareholders’ 

agreement 

87,528,858 25.99 136,945,710 32.32 83,155,716 24.99 133,024,338 31.80 74,090,618 22.24 124,950,326 29.33 

Bouygues employees 44,774,405 13.30 74,311,729 17.54 38,357,093 11.53 66,025,941 15.78 36,536,113 10.97 68,628,395 16.11 

Other French shareholders 84,323,571 25.04 92,443,742 21.82 121,235,815 36.43 129,258,321 30.90 130,537,608 39.17 140,428,930 32.96 

Capital Group International 26,969,688 8.01 26,969,688 6.36 

Other foreign shareholders 93,061,374 27.63 93,061,374 21.96 90,000,000 27.05 90,000,000 21.52 91,963,191 27.60 92,022,516 21.60 

Bouygues 105,000 (3) 0.03 0 0 10,000 ns 0 0 72,439 0.02 0 0 

Total 336,762,896 100 423,732,243 100 332,758,624 100 418,308,600 100 333,199,969 100 426,030,167 100 

((1) SCDM is a company controlled by Martin Bouygues and Olivier Bouygues. This figure includes shares owned directly by Martin Bouygues and Olivier Bouygues. 

(2) The Artémis group (F. Pinault) includes Artémis, Tennessee, Simetra Obligations and Financière Pinault, companies which directly own Bouygues shares. 

(3) Treasury shares held under a liquidity agreement. 

Apart from Capital Group International, the company is not aware of any shareholder, other than those shown in the table above, holding more than 5% of the capital or voting rights. 

Significant changes in share ownership 

The main changes in share ownership since 

31 December 2003 are as follows: 

• increase in the interest held by employees, 

from 11% to 13.3% of the capital and from 16.1% 

to 17.5% of the voting rights; 

• increase in the interest held by SCDM, from 

14.1% to 18.2% of the capital and from 22% to 

25.3% of the voting rights; 

• reduction in the interest held by the Artémis 

group, from 8.1% to 7.8% of the capital and 

from 7.3% to 7% of the voting rights; 

• increase in the interests held by foreign shareholders, 

from 27.6% to 35.6% of the capital and 

from 21.6% to 28.3% of the voting rights. 

Capital Group International, Inc. (CGII), an 

American investment firm which is the parent 

company of a group of fund management companies, 

disclosed on 8 August 2005 that it had 

passed above the 5% threshold of the capital and 

voting rights of Bouygues. 


131

2. SHAREHOLDERS’ 

AGREEMENTS 

2.1. Bouygues 

The terms of the shareholder agreement of 

4 December 1998 between SCDM and Artémis 

relating to their holdings in Bouygues were published 

by the Conseil des Marchés Financiers (the 

French financial markets regulator) in a notice 

of 9 December 1998. They have been amended 

three times. The amendments were published by 

the Conseil des Marchés Financiers in decisions 

dated 13 September 2001 and 23 May 2003 and 

by the Autorité des Marchés Financiers (the successor 

to the Conseil des Marchés Financiers) in 

a decision dated 18 January 2005. 

In accordance with the regulations, the parties 

acting in concert stated their intentions to the 

Conseil des Marchés Financiers in the following 

terms: 

• Concerted policy within the company: under the 

terms of a shareholder agreement concluded 

on 4 December 1998 for an initial three-year 

period, the parties intend to conduct a concerted 

business policy for the company and consult 

each other before taking any decisions that 

might cause a significant and lasting change 

in the strategy, legal structure or financial 

resources of the company or its major subsidiaries. 

To this end, Artémis will have three 

seats on the Board of Directors. The parties also 

agreed to approve all the resolutions put by the 

Board of Directors to Shareholders’ Meetings. 

• Shareholdings: the parties do not rule out buying 

and selling shares but have each agreed to 

cap their shareholdings and have also agreed 

that the total number of shares or voting 

rights held by them, acting in concert, should 

not exceed one-third of the share capital or 

voting rights. 

The amendment of 13 September 2001 extended 

the shareholder agreement until 4 December 

2004 and cancelled the non-transferability clause 

in the initial agreement. 

The amendment of 22 May 2003 extended the 

shareholder agreement until 4 December 2007. 

It preserves the provisions of the agreement 

as amended except as regards reciprocal preemption 

rights, which the parties agreed to 

waive. In particular, it extends the provision 

stating that the agreement would be terminated 

ipso jure if SCDM held less than 10% of Bouygues’ 

share capital or Artémis less than 5%. 

Under the terms of the amendment of 21 December 

2004, Artémis agreed not to hold more than 10% 

of Bouygues’ share capital and SCDM agreed not 

to hold more than 23%. Artémis further agreed 

not to hold more than 3,306,518 double voting 

rights, the number it held on signature of the 

amendment. 

2.2. Bouygues Telecom 

The material provisions of the Bouygues Telecom 

shareholders’ agreement are: reciprocal preemption 

rights, a ban on selling shares to an 

operator providing a telephone service to the 

public without the other shareholders’ prior 

consent, and an undertaking by each party not to 

acquire an equity interest in a rival operator. 

The BNP Paribas Group wishing to ensure the 

liquidity of its 6.5% stake in Bouygues Telecom, 

the Bouygues Group granted the BNP Paribas 

Group a promise to buy this stake, exercisable 

at any time from 1 September 2005 to 31 July 

2007. In return, the BNP Paribas Group granted 

Bouygues a promise to sell, exercisable between 

1 and 30 September 2007. 

3. VOTING RIGHTS 

The principal shareholders of Bouygues hold 

voting rights on terms no different from those 

enjoyed by the other shareholders. They are 

entitled, on the same terms as the other shareholders, 

to double voting rights subject to the 

conditions specified in Article 12 of the by-laws, 

the terms of which are reproduced on page 143 

of this Annual Report. 

132

STOCK MARKET 

1. BOUYGUES ON THE STOCK MARKET IN 2005 

1.1. Shares 

Bouygues shares are listed on Euronext’s Eurolist (compartment A). There were 336,762,896 shares and 

investment certificates in issue at 31 December 2005. 

During 2005, 2,393,590 shares were issued as a result of the exercise of stock options; 9,972,331 shares 

were issued in a capital increase reserved for employees under the Bouygues Confiance 3 employee 

share ownership plan; and 8,361,649 shares were cancelled. The average number of shares and investment 

certificates in issue during 2005 was 332,036,321. The average daily volume traded was 1,359,232 

securities, 2.3% higher than in 2004. 

On 7 January 2005, an exceptional payout of €5 per share or investment certificate was made. 

In 2005, Bouygues was the 21 st best performing share in the CAC 40, rising by 21.5% and closing at a 

price of €41.3 on 31 December. After adjusting the share price trend for reinvestment of the exceptional 

payout, growth in the share price was 41.6%. The CAC 40 index advanced by 23% in 2005, continuing the 

recovery that began in 2004. 

On 7 January 2005, the date on which the €5 per share exceptional payout was made, there was a 

mechanical correction in the Bouygues share price, which fell from €35.24 (closing price on 6 January 

2005) to €30.2 (opening price on 7 January 2005). 

Since then, the shares have risen sharply, boosted by strong performances from the Construction businesses 

in terms of sales, earnings and order books. 

Number 

of shares 

Net 

Dividend (€) Quoted market price Dividend yield 

based on closing 

Tax 

Total High Low Closing price (%) 

credit 

2001 343,158,371 0.36 0.18 0.54 57.95 25.11 36.99 1.5 

2002 343,801,210 0.36 0.18 0.54 38.80 20.40 26.31 2.1 

2003 332,671,539 0.50 0.25 0.75 28.28 16.61 27.72 2.7 

2004 332,254,414 0.75 (1) - 0.75 34.26 25.94 34.00 2.2 

2005 336,289,029 0.90 (1) - 0.90 42.67 28.75 41.30 2.2 

1.2. Investment certificates 

Bouygues investment certificates are listed on Euronext’s Eurolist (compartment A). The table below 

shows changes in the number of investment certificates (issued in 1986), the dividend paid, and the 

dividend yield over the last five years: 

Number of 

investment 

certificates 

entitled to 

dividend 

Net 

Dividend (€) Quoted market price Dividend yield 

based on 

Tax 

closing price 

Total High Low Closing 

credit 

(%) 

2001 593,008 0.36 0.18 0.54 47.47 29.16 37.60 1.4 

2002 560,709 0.36 0.18 0.54 40.90 20.26 23.85 2.3 

2003 528,430 0.50 0.25 0.75 30.00 16.74 26.20 2.9 

2004 504,210 0.75 (1) - 0.75 37.18 23.10 35.00 2.1 

2005 473,867 0.90 (1) - 0.90 39.00 25.31 36.30 2.5 

(1) The tax credit has been abolished with effect from 1 January 2005. The dividend now entitles individuals tax-resident in France to 50% tax 

relief. 

On 28 February 2006, the investment certificate was trading at €40. 

The Annual General Meeting of 27 April 2006 will be asked to approve the reconstitution of all the investment 

certificates and voting rights in issue as ordinary shares. For details of this proposal, refer to page 

137 of this Annual Report. 

(1) The tax credit has been abolished with effect from 1 January 2005. The dividend now entitles individuals tax-resident in France to tax relief 

(of 50% in 2005 and 40% in 2006). 

On 28 February 2006, the share was trading at €44.06. 


133

2. TRENDS IN SHARE PRICE AND TRADING VOLUME 

2.1. Bouygues share price over the last 18 months 

2004 

High 

Low 

Number of 

shares traded 

Capital traded 

(€m) 

July 28.11 25.94 24,050,209 653 

August 28.73 26.55 21,222,382 584 

September 30.64 27.58 27,839,474 812 

2.2. Investment certificate price 

High 

Low 

Number of 

shares traded 

2005 first quarter 30.33 25.31 6,574 

2005 second quarter 33.66 27.00 5,232 

2005 third quarter 34.90 31.65 26,326 

2005 fourth quarter 39.00 33.00 4,195 

October 31.70 29.92 24,079,054 744 

November 33.60 30.82 21,289,133 692 

December 34.26 32.00 32,685,449 1,086 

2005 

January 30.85 28.75 36,023,161 1,107 

February 32.75 29.82 25,331,648 807 

March 32.88 30.05 23,868,747 741 

April 31.79 29.78 31,058,876 959 

May 31.76 30.31 23,512,221 732 

June 34.78 30.45 38,411,693 1,241 

July 36.45 33.33 25,651,501 900 

August 37.59 35.81 41,024,083 1,499 

September 38.90 35.86 22,373,185 827 

October 41.29 37.06 28,575,475 1,110 

November 42.67 40.22 30,698,986 1,267 

December 42.22 40.00 21,971,061 901 

Source: Euronext 

134

CAPITAL 

1. GENERAL INFORMATION 

1.2. Changes in the share capital over the last five years 

1.1. Amount of the share capital 

All the amounts appearing in the following table are in euros. 

On 31 December 2004, the share capital of 

Bouygues was €332,758,624, divided into 

332,758,624 shares with a nominal value of 

€1 each. 504,210 shares were divided into as 

many investment certificates and voting right 

certificates. 

During the financial year 2005, a capital increase 

reserved for employees was completed in an 

amount of €250,006,338, at a price per share of 

€25.07, 9,972,331 shares being issued. This capital 

increase was subscribed by a leveraged mutual 

fund forming part of the Group Savings Plan and 

known as Bouygues Confiance 3. 

During the financial year 2005, 2,393,590 new 

shares were created as a result of the exercise 

of options granted to Group employees, and 

8,361,649 shares bought back by the company 

were cancelled. 

Consequently, on 31 December 2005, the share 

capital of Bouygues was €336,762,896 divided 

into 336,762,896 shares with a nominal value 

of €1 each. 473,867 shares were divided into as 

many investment certificates and voting right 

certificates. 

The number of voting rights on 31 December 2005 

was 423,732,243 (on 31 December 2004, the number 

of voting rights was 418,308,600). 

Years 

2001 

2002 

from 1 January 

to 16 June 2003 

Increases and reductions in the share capital 

within the last five years 

• Exercise of options for 1,009,490 shares 

• Subscription by Corporate Savings Plan of 10,034,985 shares 

• OCEANE bond conversion: 12,216 shares 

• Exercise of options for 610,530 shares 

• OCEANE bond conversion: 10 shares 

Nominal 

1,009,490 

10,034,985 

12,216 

Amount of variations 

in the share capital 

610,530 

10 

Premiums and incorporation 

of reserves 

6,499,867 

219,966,871 

302,664 

3,930,741 

246 

Amount of 

the share 

capital 

333,704,178 

343,739,163 

343,751,379 

344,361,909 

344,361,919 

Aggregate 

number of 

shares and 

investment 

certificates 

333,704,178 

343,739,163 

343,751,379 

344,361,909 

344,361,919 

• Exercise of options for 58,370 shares 58,370 375,903 344,420,289 344,420,289 

17 June 2003 • Cancellation of 9,685,825 shares bought back by the company (9,685,825) (236,218,525) 334,734,464 334,734,464 

From 17 June 

to 10 December 2003 

• Exercise of options for 318,070 shares 318,070 2,048,371 335,052,534 335,052,534 

16 December 2003 • Cancellation of 2,521,365 shares bought back by the company (2,521,365) (57,386,267) 332,531,169 332,531,169 

From 11 December 


From 1 January 

to 10 June 2004 


• Exercise of options for 386,240 shares 

• OCEANE bond conversion: 13,556,732 shares 

386,240 

13,556,732 

3,646,271 

335,881,691 

333,586,209 

347,142,941 

333,586,209 

347,142,941 


From 11 June 

to 6 October 2004 


14 December 2004 • Cancellation of 633,087 shares bought back by the company (633,087) (20,177,199) 332,758,624 332,758,624 

From 1 January 

to 16 June 2005 



From 17 June 


• Exercise of options for 1,163,673 shares 1,163,673 26,788,468 333,674,851 333,674,851 

13 December 2005 • Cancellation of 7,312,776 shares bought back by the company (7,312,776) (279,502,996) 326,362,075 326,362,075 

28 December 2005 

From 9 December 


• Subscription by the mutual fund Bouygues Confiance 3 

of 9,972,331 shares 

9,972,331 240,034,007 336,334,406 336,334,406 



135

1.3. Authorisations to increase or reduce the share capital or to buy back shares 

In accordance with Article L. 225-100 paragraph 7 of the Commercial Code, the following table lists the current powers granted to the Board of Directors by the Annual Meeting, and the use made of these powers 

during the financial year. 

Purpose 

Global ceiling or maximum 

nominal amount (€m) 

Duration AGM Use of the powers during the financial year 2005 

1. Purchase by the company of its own shares or investment certificates 10% of the capital 18 months 28/04/2005 

Purchase of 12,078,486 shares (including 1,668,900 in respect of 

the buyback programme authorised by the AGM on 22/04/2004) 

2. Issue (with preferential subscription rights) of shares or transferable securities giving access to 

the share capital of the company or of a company of which it has more than 50% control 

3. Increase of capital by incorporation of reserves, earnings or 

issue premiums 

4. Issue (without preferential subscription rights) of shares or transferable securities giving access 

to the share capital of the company or of a company of which it has more than 50% control 

5. Increase in the number of securities to be issued in the event of a capital increase with or 

without preferential subscription rights 

6. Fixing of the issue price by public tender offer, without preferential subscription rights, 

of equity capital or any transferable securities giving access to the share capital 

7. Increase in the share capital with a view to paying for capital contributions consisting of shares 

of a company or of transferable securities giving access to the share capital of a company 

8. Increase in the share capital with a view to paying for securities tendered in a public exchange 

offer 

9. Increase in the share capital for the benefit of company or Group employees belonging to a 

company savings plan 

10. Approval of the issue by a subsidiary of the company, of equity capital giving access, whether 

immediately or in the future, to shares of the company 

150 

5,000 (debt securities) 

26 months 28/04/2005 nil 

4,000 26 months 28/04/2005 nil 

150 (1) 

5,000 (debt securities) (1) 26 months 28/04/2005 nil 

15% of the initial issue (1) 26 months 28/04/2005 nil 

10% of the capital (1) 26 months 28/04/2005 nil 

10% of the capital (1) 26 months 28/04/2005 nil 

150 (1) 26 months 28/04/2005 nil 

10% of the capital 26 months 28/04/2005 

150 (1) 26 months 28/04/2005 nil 

28/12/2005: increase in the share capital of €250,006,338 

(nominal €9,972,331, or 3.06% of the share capital on that date) 

reserved for employees 

11. Free allocation of shares to company or Group employees 10% of the capital 38 months 28/04/2005 nil 

12. Issue of shares in the context of stock options, without preferential subscription rights Limit fixed by law 38 months 28/04/2005 

13. Issue of transferable securities conferring a right to the allocation of debt securities 5,000 26 months 28/04/2005 nil 

14. Reduction of the capital by cancellation of treasury shares 

15. Issue of preference shares without voting rights and with the same rights as investment 

certificates 

(1) charged to the global ceiling indicated in point 2 of this table 

10% of the capital per 

24-month period 

10 

10 (debt securities) 

18 months 28/04/2005 

18 months 28/04/2005 nil 

21/06/2005: introduction of a stock option plan enabling 984 

beneficiaries to subscribe for 3,102,500 shares 

(exercise price: €31.34) 

21/06/2005: cancellation of 1,048,873 shares (0.31% of the share 

capital on that date) 

13/12/2005: cancellation of 7,312,776 shares 

(2.19% of the share capital on that date) 

136

2. ADDITIONAL REPORT ON THE USE OF POWERS RELATING TO 

INCREASES IN THE SHARE CAPITAL 

The additional report of the Board of Directors provided for by Article L. 225-129-5 of the Commercial 

Code and Article 155-2 of the Decree of 23 March 1967 appears on page 223 of this Annual Report. 

3. FINANCIAL AUTHORISATIONS SUBMITTED TO THE ANNUAL 

MEETING ON 27 APRIL 2006 

The following table summarises the delegated powers and authorisations to be conferred on the Board 

of Directors by the Combined Annual Meeting on 27 April 2006. With effect from the date of their 

approval by the meeting, these financial authorisations cancel and replace those previously granted for 

the same purpose, if applicable in respect of the unused part thereof. 

Purpose 

1. Purchase by the company of its own shares or investment certificates 

2. Reduction of the capital by cancellation of treasury shares 

3. Issue of preference shares without voting rights and conferring the same 

rights as investment certificates. This resolution will only be submitted to 

the vote of the Annual Meeting in the event that the resolution relating to 

the reconstitution of investment certificates and voting right certificates as 

shares is not adopted. 

Draft law transposing the Takeovers Directive: 

4. Use, during the period of public tender offers, of delegated powers and 

authorisations to increase the share capital, in the event that such use is 

authorised by law. 

The draft law transposing the Takeovers Directive was still subject to adoption 

by Parliament at the beginning of March 2006. The draft law provides that, 

subject to the principle of reciprocity and in the event of a public tender offer, 

the Board of Directors will be able to take any step expressly authorised by the 

Annual Meeting within the eighteen months preceding the filing of the offer. 

5. Issue of equity warrants on preferential terms, during the period of a public 

tender offer, in the event that such issues are permitted by law. 

The draft law transposing the Takeovers Directive provides that, subject to the 

principle of reciprocity, the Annual Meeting will be able to authorise the Board 

of Directors, during the period of a public tender offer, to issue equity warrants 

on preferential terms and to grant them to shareholders free of charge. 

Since the question of which Annual Meeting is competent to issue such an 

authorisation is still under discussion (whether ordinary or extraordinary), two 

similar resolutions have been drafted (the first for an ordinary meeting and the 

second for an extraordinary meeting) in order to cover both possibilities. 

(1) charged to the global ceiling indicated in point 2 of the previous table 

Global ceiling 

or maximum 

nominal amount 

(€m) 

10% of the 

capital 

10% of the 

capital per 24- 

month period 

10 

10 (debt 

securities) 

Ceilings 

provided by 

the various 

applicable 

authorisations 

Duration 

18 

months 

18 

months 

18 

months 

14 

months 

150 (1) 18 

months 

4. COMPANY SAVINGS PLAN 

On 31 December 2005, Group employees owned 13.3% of the capital of Bouygues and 17.5% of its voting 

rights, mainly through a number of mutual funds. 

• The participation mutual fund, created in 1968, invests in Bouygues shares bought on the market. 

During the last five years, the investment made has amounted to €30.1 million. On 31 December 2005, 

this fund owned 3.04% of the capital of Bouygues and 4.43% of the voting rights. 

• The Group Savings Plan mutual fund collects voluntary contributions from employees and the contribution 

made by the company. These are invested in Bouygues shares by direct purchases made on 

the market. On 31 December 2005, this fund owned 3.77% of the capital of Bouygues and 5.32% of the 

voting rights. During the last five years, total savings and company contributions have amounted to 

€351 million, including €193 million in savings made by employees and €158 million in contributions 

made by the company. 

• The leveraged mutual fund known as Bouygues Confiance, created following the increases in the share 

capital carried out in December 1999 and January 2000, owned 2.20% of the capital and 1.75% of the 

voting rights on 31 December 2004. This fund matured on 5 January 2005 and the sums held were paid 

out to the employee shareholders. 

• Following the increases in the share capital carried out in 2001 and 2005, the leveraged mutual funds 

known as Bouygues Confiance 2, Bouygues Confiance 2 International and Bouygues Confiance 3, own 

5.47% of the share capital and 6.34% of the voting rights as at 31 December 2005. 

• A Bouygues Immobilier mutual fund owns 0.10% of the share capital and 0.14% of the voting rights. 

5. STOCK OPTIONS 

On 31 December 2005, current stock options granted pursuant to authorisations conferred by 

Extraordinary Annual Meetings represented a maximum of 11,351,815 new shares. This figure corresponds 

to options that can actually be exercised, i.e. where the exercise right is no longer restricted and where 

the exercise price is lower than the stock market price on 30 December 2005 (€41.30). 

6. RECONSTITUTION OF INVESTMENT CERTIFICATES AND 

VOTING RIGHT CERTIFICATES AS SHARES 

A proposal will be made to the Annual Meeting on 27 April 2006 to approve the reconstitution of existing 

investment certificates and voting right certificates as shares, pursuant to Article L. 228-31 of the 

Commercial Code. In fact, when existing investment certificates represent no more than 1% of the authorised 

share capital of a listed company, that company can reconstitute such investment certificates and 

voting right certificates as shares. 

This reconstitution, which requires the prior approval of the meeting of holders of voting right certificates 

to be held on 12 and 26 April 2006, would take place by way of the transfer by Bouygues to the holders 

of investment certificates of the corresponding number of voting right certificates, free of charge. 

The terms and conditions of the transaction are specified in the report of the Board of Directors on 

the reconstitution of investment certificates and voting right certificates as shares (page 233 of this 

document). 


137

7. POTENTIAL CREATION OF NEW SHARES 

11,351,815 shares would be added to the 336,762,896 shares and investment certificates existing on 31 

December 2005 if all exercisable stock options were exercised, bringing the total number of shares and 

investment certificates to 348,114,711. 

8. BUYBACK OF SHARES 

Special report on the buyback of shares (Articles L. 225-209 and L. 225-211 of the Commercial Code) 

8.1. Summary of the use made by the Board of Directors of the 

authorisations conferred by the Annual Meeting 

The Annual Meetings on 22 April 2004 and 28 April 2005 authorised the Board of Directors to buy back 

the company’s own shares and investment certificates in the context of the share buyback programmes 

approved by the AMF, respectively, under no. 04-226 on 30 March 2004 and no. 05-242 on 8 April 2005. 

■ Summary of purchases and sales of shares during the financial year 

During the financial year 2005, the company purchased 12,078,486 shares (1,668,900 between January 

and April in the context of the programme authorised by the Annual Meeting on 22 April 2004, and 

10,409,586 between May and December in the context of the programme authorised by the Annual 

Meeting on 28 April 2005), representing 0.03% of the share capital as at 31 December 2005. 

The Annual Meeting on 28 April 2005 authorised the Board of Directors to reduce the authorised share 

capital by cancelling up to 10% of the authorised capital per 24-month period in accordance with the 

law. Pursuant to this provision, the Board of Directors cancelled 1,048,873 shares on 21 June 2005 representing 

0.31% of the capital on that date, and then cancelled 7,312,776 shares on 13 December 2005, 

representing 2.19% of the capital on that date. 

Shares were also bought and sold pursuant to a liquidity contract conforming to a Code of Ethics 

approved by the AFEI. 

• number of shares registered in the name of the company on 31/12/2004 10,000 (1) 

• number of shares purchased during the financial year 12,078,486 

• number of shares sold during the financial year 3,621,837 

• number of shares cancelled during the financial year 8,361,649 

• number of shares registered In the name of the company on 31/12/2005 105,000 (1) 

• percentage of the authorised share capital owned by the company 

on 31/12/205 

0.03% 

■ Between 24 March 2005 and 20 March 2006, the company carried out the following operations 

(*) : 

(*) The period concerned began on the day after the date on which the report of the previous programme was prepared and will end on the 

date on which the description of the programme is published. 

Situation as at 20 March 2006: 

Percentage of share capital directly or indirectly 

owned as treasury shares: 0.37% on 20/03/2006 

Number of shares cancelled in the last 24 months: 22,937,708 

Number of shares held in the portfolio (1) : 1,245,100 

Book value of the portfolio: €52,145,374 

Market value of the portfolio (2) : €54,958,714 

(1) including 400,000 pursuant to a liquidity contract complying with the AFEI Code of Ethics, 546,000 allocated for use in future acquisition 

transactions, and the balance being earmarked for cancellation 

(2) opening price on 21/03/2006: €44.14 

Transactions carried out other than in the context of the liquidity contract: 

Number of 

shares 

Average 

maximum 

maturity 

(years) 

Average 

transaction 

price 

Average 

exercise price 

Aggregate gross amounts (1) 

Purchases 

Sales / 

Transfers 

Positions opened in the context of the previous 

buyback programme until the date of publication of 

programme description 

Purchase positions 

opened 

Call 

options 

purchased 

8,927,922 0 

(3) 

€38.69 0 

Amounts 345,444,951 0 

(3) 

(3) 

Futures 

purchased 

Sale positions opened 

Call 

options 

sold 

Futures 

sold 

(1) pursuant to the liquidity contract 

(3) Option 1 Option 2 Option 3 Option 4 

Number of shares 2,283,650 3,056,000 55,959 56,140 

Average maximum maturity (years) 2.0 6.3 4.7 0.8 

Average exercise price €33.81 €31.34 €31.34 €24.59 

138

Transactions carried out other than in the context of the liquidity contract: 

Purchases 

Aggregate gross amounts 

Sales / Transfers 

Number of shares 3,920,780 4,037,780 

Average price of the transaction €39.69 €38.65 

Amounts €155,629,855 €156,078,776 

8.2. Authorisation to be given to the Board of Directors to enable 

it to intervene in its own shares or investment certificates and to 

be submitted to the Annual Meeting on 27 April 2006 

In accordance with Articles 241-2 and 241-3 of the Autorité des Marchés Financiers regulations, the 

company is publishing information relating to the share buyback programme to be submitted for the 

authorisation of the Annual Meeting on 27 April 2006, in this report. 

■ Objectives of the buyback programme 

Bouygues’ intention is to renew its option to implement a buyback programme in relation to the 

company’s shares and investment certificates. 

The objectives of this buyback programme will be: 

• to ensure the liquidity of and stimulate the market in its shares through the use of an investment 

services provider acting wholly independently in the context of a liquidity agreement in accordance 

with the Code of Ethics of the AFEI recognised by the Autorité des Marchés Financiers; 

• to deliver shares upon the exercise of rights attached to transferable securities conferring a right to 

the allocation of shares in the company, by way of reimbursement, conversion, exchange, presentation 

of a coupon or in any other way; 

• to retain shares with a view to their subsequent delivery by way of payment or exchange in the context 

of external growth transactions, in order to minimise the cost of the acquisition or, more generally, 

improve the terms of the transaction; 

• to allocate shares to employees or corporate officers of the company or of companies in its Group on 

the terms and conditions provided by law, and particularly in the context of profit sharing upon the 

expansion of the business, under the stock options regime or by means of a company or inter-company 

savings plan, or by way of an allocation of shares free of charge; 

• to cancel shares subject to authorisation by the Extraordinary Annual Meeting; 

• to implement any market practice which might be accepted by the Autorité des Marchés Financiers, 

and more generally to carry out any transaction in accordance with the regulations in force. 

Securities bought back and retained by Bouygues will be stripped of their voting rights and will not confer 

rights to the payment of dividends. Shares or investment certificates may be purchased in any way 

in accordance with the regulations in force, on the market or off-market, in particular over-the-counter, 

including by means of derivative financial instruments and at any time, particularly during periods of 

public tender, exchange or standing offers. There shall be no limit on the proportion of the programme 

that may take place by the trading of blocks, which may represent the whole of the programme. 

Shares purchased may be sold particularly under the conditions laid down by the Autorité des Marchés 

Financiers in its note dated 6 December 2005 relating to the introduction of a new regime governing the 

buyback of a company’s own shares. 

Pursuant to this authorisation, the company may purchase its own shares or investment certificates on 

the market or off-market in accordance with the limits indicated below: 

• maximum purchase price: €80 per share or investment certificate, 

• minimum sale price: €30 per share or investment certificate, subject to adjustments associated with 

any operations relating to the company’s share capital. 

The maximum amount that may be allocated to the share and investment certificate buyback programme 

shall be €1,500,000,000 (one billion five hundred million euros). 

The total number of shares and investment certificates held on any given date may not exceed 10% of 

the authorised share capital existing on that date. 

■ Duration of the buyback programme: eighteen months from the date of its approval by the Annual 

Meeting, namely until 26 October 2007. No more than 10% of the share capital may be cancelled per 

24-month period. 


139

RESULTS OF BOUYGUES SA 

1. DIVIDEND 

1.1. Appropriation and distribution of the earnings of Bouygues SA (parent company) 

The Annual Meeting, having acquainted itself with the Board of Directors’ report on operations and having noted that distributable earnings, before appropriation 

to the legal reserve, amounted to €537,180,016.80, is asked to approve the following appropriation and distribution: 

- distribution of a first net dividend (5% of par) of €0.05 per share or per investment certificate, representing a total amount of €16,838,144.80, drawn from 

distributable earnings; 

- distribution of an additional net dividend of €0.85 per share or per investment certificate, representing a total amount of €286,248,461.60; 

- appropriation of the balance, amounting to €234,093,410.40, to retained earnings. 

Subject to approval by the Annual General Meeting, the dividend of €0.90 net per share and per investment certificate will be paid in cash from 3 May 2006. 

Should the company hold some of its own stock when the dividend is distributed, the sum corresponding to the amount of dividend not paid because of the 

nature of such stock will be allocated to retained earnings. 

The company is required by law to state the dividends distributed in respect of each of the last three years and the related tax credits. They were as follows: 

2002 2003 2004 

Exceptional 

payout (2) 

Number of shares 344,361,919 333,199,969 332,758,624 332,758,624 

Dividend €0.36 €0.50 €0.75 €2.52 

Tax credit (1) €0.18 €0.25 - - 

Total dividend per share €0.54 €0.75 €0.75 €2.52 

Total dividend payout €121,089,514.32 €166,423,811.00 €248,928,093.00 €838,551,732.48 

Distributed income eligible for the rebate specified 

in item 2 of article 158.3 of the French General Tax 

Code 

- - €248,928,093.00 €838,551,732.48 

(1) calculated at the rate of 50% 

(2) The amounts shown relate to the portion of the exceptional payout of €5.00 per share or per investment certificate (as approved by the Ordinary General Meeting of 7 October 2004 and paid on 7 January 2005) 

classified as dividend for tax purposes. Of the total €5.00 payout, €2.52 was classified as dividend and €2.48 as repayment of capital contributions for tax purposes. 

Dividends not claimed within five years are paid to the French State. 

140

2. FIVE-YEAR FINANCIAL SUMMARY 

CAPITAL AT YEAR-END 

a) Share capital (€) 

b) Number of ordinary shares in issue 

c) Number of investment certificates (without voting rights) 

d) Maximum number of shares to be issued in the future: 

• by reconstitution of investment certificates and voting right certificates as ordinary shares (1) 

• by exercise of stock options 

• by conversion and / or exchange of convertible bonds 

2001 2002 2003 2004 2005 

343,751,379 

343,158,371 

593,008 

593,008 

10,588,944 

16,550,756 

344,361,919 

343,801,210 

560,709 

560,709 

13,420,560 

16,550,746 

333,199,969 

332,671,539 

528,430 

528,430 

15,326,960 

16,550,746 

332,758,624 

332,254,414 

504,210 

504,210 

17,626,248 

- 

336,762,896 

336,289,029 

473,867 

473,867 

20,953,720 

- 

OPERATIONS AND RESULTS FOR THE YEAR (€) 

a) Sales excluding taxes 

73,416,040 

62,497,403 

61,677,048 

68,137,090 

64,270,115 

b) Earnings before tax, depreciation, amortisation and provisions 

230,010,624 

21,715,695 

119,984,708 

385,435,019 

173,230,055 

c) Income tax 

22,310,429 

(1,925,403) 

58,783,774 

55,295,002 

(37,656,430) 

d) Employee profit-sharing 

e) Earnings after tax, depreciation, amortisation and provisions 

f) Distributed earnings 

g) Withholding tax 

- 

236,941,212 

122,306,699 

0 

- 

120,842,391 

121,089,514 

0 

(250,000) 

216,422,001 

166,423,811 

0 

(69,154) 

585,890,338 

248,928,093 

Nil 

(224,770) 

260,833,378 

303,086,606 

Nil 

PER SHARE DATA (€) 

a) Earnings after tax but before depreciation, amortisation and provisions 

b) Earnings after tax, depreciation, amortisation and provisions 

c) Gross dividend allocated to each share 

0.73 

0.69 

0.54 

0.06 

0.35 

0.54 

0.54 

0.65 

0.75 

0.40 

1.32 

0.75 (2) 0.90 (2) 

1.76 

0.77 

PERSONNEL 

a) Average number of employees during the year 

261 

253 

244 

227 

195 

b) Total payroll for the year (€) 

38,521,514 

36,496,987 

37,747,311 

38,215,169 

34,374,008 

c) Amount paid in respect of employee benefits 

(social security, welfare benefits, etc.) for the year (€) 

15,062,453 

11,250,274 

12,551,862 

13,363,283 

11,678,781 

(1) such reconstitution would not change the share capital 

(2) without tax credit 


141

LEGAL INFORMATION 

1. GENERAL INFORMATION 

Company name 

Registered office 

With effect from 

1 July 2006, the registered 

office will be located at 

Registration number 

APE code 

Form 


90 avenue 

des Champs-Élysées 

75008 Paris - France 

32 avenue Hoche 

75008 Paris - France 

572 015 246 Paris 

452 B 

société anonyme 

(public limited 

company) 

Date of incorporation 15 October 1956 

Expiry date 14 October 2089 

Financial year 

Governing law 

1 January 

to 31 December 

French 

2. BRIEF HISTORY OF THE 

GROUP 

1952 Francis Bouygues forms a building firm 

1955 First diversification: creation of Bouygues 

Immobilier 

1970 Bouygues is floated on the Paris stock 

market 

1984 Expansion into services, takeover of Saur 

(sold in 2004) 

1986 Acquisition of Colas, the world’s leading 

road building company 

1987 Bouygues is named operator and main 

shareholder of TF1 

1989 Martin Bouygues is appointed Chairman 

& CEO of the Bouygues group 

1996 Launch of Bouygues Telecom, France’s 

third mobile phone operator 

2002 Bouygues Telecom launches i-mode, 

the pocket internet 

2003 Bouygues owns 83% of Bouygues Telecom 

2004 Exceptional payout of €1.7 billion 

2005 All divisions yield strong profits 

3. BY-LAWS 

3.1. Purpose 

(Article 2 of the by-laws) 

The company has as its purpose in all countries: 

• the acquisition, directly or indirectly, of interests 

in all French or foreign companies or groupings, 

whatever their purpose or business, and the 

management and disposal as appropriate of 

such interests, 

• the creation, acquisition, operation and disposal 

as appropriate of all French or foreign 

undertakings, in any field of business, whether 

industrial, commercial or financial, including in 

particular in the construction sector (building, 

civil works, roads, property) and the service 

sector (public utilities management, media, 

telecommunications), 

• and in general, all industrial, commercial, financial, 

mining and agricultural operations or 

transactions and all operations or transactions 

involving movable or real property relating 

directly or indirectly to the purpose set forth 

above or to all similar or related purposes that 

may enable or facilitate the achievement or 

pursuit thereof. 

3.2. Appropriation of earnings 

(Article 24 of the by-laws) 

At least 5% of net earnings for the year, minus 

prior losses if any, are retained in order to constitute 

the legal reserve. This requirement ceases to 

be mandatory when the legal reserve equals one 

tenth of the share capital. 

The sum necessary to pay the holders of shares 

and investment certificates a first dividend equal 

to 5% of the paid-up share capital is retained 

from distributable earnings. After appropriations 

to other reserves and to retained earnings 

decided by the Annual Meeting, the balance of 

distributable earnings is divided between the 

holders of shares and investment certificates. 

3.3. Annual meetings 

(Articles 19 to 21 of the 

by-laws) 

Annual meetings of shareholders are called in 

accordance with the formalities required by law. 

They consist of all holders of shares and voting 

certificates, whatever the number of shares or 

certificates they hold. 

Special meetings of holders of investment certificates 

and of bonds issued by the company 

may be called in the cases provided for by the 

prevailing laws and regulations. 

All documents required in order to vote at annual 

meetings must reach the company at the latest 

on the third day before the date of the meeting. 

142

3.4. Double voting rights 

(Article 12 of the by-laws - 

Provision in force since 

1 January 1972) 

Double voting rights are allocated to all fully 

paid-up shares that are proved to have been 

registered for at least two years in the name of 

the same holder. 

In the event of a capital increase by incorporation 

of reserves, profits or premiums, double voting 

rights are conferred as of issue on registered 

shares allocated as a bonus to shareholders 

in respect of existing shares conferring such 

entitlement. Double voting rights attached to 

registered shares will be lost if such shares are 

converted into bearer shares or if title to them 

is transferred, except in cases where the law 

provides otherwise. 

The extraordinary annual meeting may not abolish 

double voting rights without being authorised 

to do so by a special meeting of holders of 

those rights (Article L. 225-99 of the Commercial 

Code). 

3.5. Thresholds 

(Article 8.3 of the by-laws) 

Persons holding directly or indirectly at least 

1% of the capital or voting rights are required to 

inform the company of the total number of shares 

or voting certificates they own. Notification must 

be made by registered letter with acknowledgment 

of receipt sent to the registered office 

within fifteen days of conclusion of the transaction, 

on or off the stock market, irrespective of 

delivery of the securities. 

Further disclosures must be made under the 

same conditions each time the 1% threshold is 

crossed in either direction. 

If disclosures are not made under the conditions 

set forth above, the voting rights attached 

to shares or voting certificates exceeding the 

fraction that should have been disclosed are 

suspended under the conditions provided by law 

if a request to that effect is made at the Annual 

Meeting by one or more shareholders holding at 

least 5% of the share capital or voting rights. 

Under the terms of Article 8.2 of its by-laws, the 

company is authorised to use all legal means 

regarding the identification of holders of securities 

conferring an immediate or future right to 

vote at shareholders’ meetings. 

4. PLACES WHERE LEGAL 

DOCUMENTS MAY BE 

CONSULTED 

Documents relating to Bouygues which must be 

made available to the public (copies of the deed 

of incorporation and by-laws, historical financial 

information relating to the company and its 

subsidiaries for each of the two financial years 

preceding the publication of the annual report 

and the reports and certificates of the statutory 

auditors referred to in the annual report and in 

this update), may be consulted at the registered 

office located at 90 avenue des Champs-Élysées, 

75008 Paris, and, with effect from 1 July 2006, at 

32 avenue Hoche, 75008 Paris. 

With the exception of the deed of incorporation, 

the aforementioned documents may also 

be consulted electronically on the company’s 

website at www.bouygues.com, under the heading 

“Finance”. 


143

ANNUAL PUBLICATIONS 

1. PUBLISHED INFORMATION 

In accordance with Article L. 451-1-1 of the 

Monetary and Financial Code, and Article 221-1-1 

of the general regulations of the AMF, this document 

contains all the information published or 

made public by the company within the European 

Economic Area or in any third country during the 

last twelve months in order to satisfy its legislative 

or regulatory obligations as regards financial 

instruments, issuers of financial instruments or 

markets in financial instruments. 

Date of 

publication 

2 March 2005 

Subject 

MISCELLANEOUS INFORMATION 

Publication 

2004 net earnings AMF and Bouygues websites 

Financial announcements 

L’Agefi (03/03/2005), Les Échos (03/03/2005), 

Le Figaro (05/03/2005), 

Le Monde (05/03/2005), 

La Tribune (04/03/2005), Investir (05/03/2005), 

Le Journal des Finances (05/03/2005), 

Option Finance (07/03/2005), 

La Vie Financière (04/03/2005), 

Valeurs Actuelles (04/03/2005), 

Le Revenu (04/03/2005), 

Financial Times (14/03/2005), 

The Wall Street Journal (07/03/2005), Europe, USA 

and Asia editions 

Handelsblatt (12/04/2005) 

3 March 2005 Expiry of the term of office of a Deputy CEO Les Petites Affiches 

9 March 2005 

2004 sales 


AMF and Bouygues websites 

L’Agefi (09/02/2005), Option Finance (14/02/2005), 

Le Revenu (11/02/2005) 

16 March 2005 Annual Meeting press release Les Echos - Bouygues website 

16 March 2005 Notice of meeting (Annual Meeting) BALO (Compulsory Legal Announcements Bulletin) 

16 March 2005 Notice of meeting (Special meeting of holders of investment certificates) BALO 

18 March 2005 Expiry of the term of office of a Deputy CEO Office of the Clerk of the Paris Commercial Court 

23 March 2005 Annual accounting documents BALO 

8 April 2005 Share buyback programme AMF - Les Échos (13/04/2005) 

8 April 2005 Notice of meeting (Annual Meeting) BALO - Les Petites Affiches 

8 April 2005 Notice of meeting (Special meeting of holders of investment certificates) BALO - Les Petites Affiches 

12 April 2005 Financial review AMF and Bouygues websites 

3 May 2005 

Sales for the first quarter 2005 


Financial announcement L’Agefi (04/05/2005) 

4 May 2005 Total number of voting rights on 28 pril 2005 BALO 

12 May 2005 Appointment of a director Les Petites Affiches 

13 May 2005 Sales for the first quarter 2005 under IFRS BALO 

144


Date of 

publication 

Subject 

Publication 

13 May 2005 Certificate of the statutory auditors BALO 

18 May 2005 

Filing of parent accounts 

This filing comprises the following items: 

- report of the statutory auditors on the parent accounts; 

- 2004 annual accounts comprising the balance sheet, the income statement and the 

notes to the accounts; 

- management report of the Board of Directors to the Annual Meeting 

on 28 April 2005; 

- report of the Chairman of the Board of Directors; 

- table of appropriation of earnings; 

- resolution of the Annual Meeting on 28 April 2005 approving this appropriation; 

- inventory of transferable securities. 

Office of the Clerk of the Paris Commercial Court 

19 May 2005 Reduction decision Office of the Clerk of the Paris Commercial Court 

19 May 2005 Authorisation to increase the share capital Office of the Clerk of the Paris Commercial Court 

19 May 2005 Amendments to the by-laws and updated by-laws Office of the Clerk of the Paris Commercial Court 

30 May 2005 Expiry of the term of office of a director Les Petites Affiches 

1 June 2005 Change of director(s) Office of the Clerk of the Paris Commercial Court 

6 June 2005 

22 June 2005 

23 June 2005 

Filing of consolidated accounts. 

This filing comprises the following items: 

- report of the statutory auditors on the consolidated accounts; 

- 2004 consolidated accounts comprising the balance sheet, income statement and 

notes to the accounts; 

- management report of the Board of Directors to the Annual Meeting on 28 April 2005; 

- report of the Chairman of the Board of Directors; 

- table of appropriation of earnings; 

- resolution of the Annual Meeting on 28 April 2005 approving the consolidated 

accounts; 

- inventory of transferable securities. 

First publication of accounts under IFRS - Net profit for the first quarter 2005 


Decision to increase the share capital – Cancellation of shares – Recording the reduction 

of the share capital. Amendment of the by-laws 




Le Figaro (25/06/05), Option Finance (27/06/05), 

Le Revenu (24/06/05), 

Financial Times (30/06/05) 

Les Petites Affiches 


145


Date of 

publication 

Subject 

Publication 

4 July 2005 

6 July 2005 

Press release containing the half-yearly statement of the liquidity contract of 


Decision to reduce and increase the share capital - Reduction in the share capital, 

increase in the share capital – Updated bylaws 



22 July 2005 Prospectus and reference document of 21 July 2005 Luxembourg Stock Exchange website 

28 July 2005 

Privatisation of the motorways: Bouygues has decided not to make an offer - 

Press release 


9 August 2005 Sales for the first half of 2005 AMF and Bouygues websites 

12 August 2005 Sales for the first half of 2005 BALO 

22 August 2005 Information on crossing of thresholds AMF website 

Net profit for the first half year 


14 September 

2005 



Le Figaro (17/09/2005), 

Le Monde (18 and 19/09/2005), 


Le Journal des Finances (17/09/2005), 


La Vie Financière (16/09/2005), 

Le Revenu (16/09/2005), 

Financial Times (19/09/2005), 

The Wall Street Journal (19/09/2005), Europe, USA 

and Asia editions 

12 October 2005 

24 October 2005 

Philippe Montagner appointed Chairman and CEO of Bouygues Telecom and 

Nonce Paolini confirmed as Deputy CEO 

Table of sales and profits for the first half of 2005 (or half-yearly consolidated accounts 

and half-yearly business reports) 


8 November 2005 Sales for the first nine months AMF and Bouygues websites 

14 November 2005 Sales for the first nine months BALO 

1 December 2005 Information on crossing of thresholds AMF website 

BALO 

13 December 

2005 

14 December 

2005 

Resignation of directors – change of directors. 

Decision to increase and reduce the share capital. 

Amendment of the by-laws. 

Updated by-laws. 

Net profit for the first nine months of 2005 






Le Revenu (16/12/2005) 

146


Date of 

publication 

Subject 

Publication 


2006 

2 January 2006 




Decision to increase the share capital - Amendment of the by-laws. 

Bank certificate - Updated bylaws. 

Decision to increase the share capital - Amendment of the by-laws. 

Bank certificate - Updated by-laws. 

Decision to increase the share capital. 

Amendment of the by-laws. 

Updated by-laws. 

Resignations and appointments of directors. 

Recording of an increase in the share capital. Recording of a reduction in the share 

capital. Amendment of the by-laws. 

Press release containing the half-yearly statement of the liquidity contract of 

Bouygues SA. 

18 January 2006 Number of voting rights and shares BALO 

8 February 2006 Admission and listing of shares BALO 




Les Petites Affiches 

AMF website 

9 February 2006 Sales for the financial year 2005 AMF and Bouygues websites 

13 February 2006 Sales for the financial year 2005 BALO 


Reference document (Prospectus) of 21 February 2006, unaudited consolidated accounts 

to 30/06/2005 and unaudited consolidated accounts to 30/09/2005 

Strong growth in sales and profits 

Luxembourg Stock Exchange website 

Sites internet : AMF - Bouygues 

L'Agefi (03/03/2006), Les Échos (02/03/2006), 

Le Figaro (04/03/2006), Le Monde (03/03/2006), 


Le Journal des Finances (04/03/2006), Option 

1 March 2006 Financial announcements 

Finance (06/03/2006), 

La Vie Financière (03/03/2006), Valeurs actuelles 

(03/03/2006), Financial Times (20/03/2006), 

The Wall Street Journal, 

éditions Europe, USA et Asie (06/03/2006), 

Handelsblatt (09/03/2006). 

6 March 2006 Notice of meeting (Special meeting of holders of voting right certificates) BALO 

6 March 2006 Press release (Special meeting of holders of voting right certificates) Les Échos - Bouygues website 

15 March 2006 

15 March 2006 

Notice of meeting (Special meeting of holders of investment certificates 

and Annual Meeting) 

Press release (Special meeting of holders of investment certificates 


BALO 

Les Échos, L'Agefi - Bouygues website 

17 March 2006 

Press release (Special meeting of holders of voting right certificates 


Les Échos, L'Agefi 

27 March 2006 Notice of meeting (Special meeting of holders of voting right certificates) BALO - Les Petites Affiches 


147

Date de publication 

PRESS RELEASES RELATING TO TRADING BY BOUYGUES IN ITS OWN SHARES 

Period concerned 

Publication 

14 March 2005 February 2005 

21 March 2005 from 15 to 18 March 2005 


4 April 2005 from 29 March to 1 April 2005 

11 April 2005 from 4 to 8 April 2005 

18 April 2005 March 2005 

3 May 2005 26 April 2005 

9 May 2005 April 2005 

24 May 2005 from 16 to 20 May 2005 

30 May 2005 from 23 to 27 May 2005 

13 June 2005 May 2005 

4 July 2005 27 June 2005 

11 July 2005 7 July 2005 

11 July 2005 June 2005 

25 July 2005 from 19 to 22 July 2005 

1 August 2005 from 25 to 29 July 2005 

8 August 2005 from 1 to 5 August 2005 


16 August 2005 July 2005 


5 September 2005 26 August 2005 

12 September 2005 August 2005 

19 September 2005 from 12 to 16 September 2005 

26 September 2005 from 19 to 23 September 2005 

3 October 2005 from 26 to 30 September 2005 

10 October 2005 from 3 to 7 October 2005 

11 October 2005 cancelled and replaced: from 3 to 7 October 2005 



24 October 2005 September 2005 

2 November 2005 from 24 to 28 October 2005 


148

7 November 2005 from 31 October to 4 November 2005 

14 November 2005 from 7 to 11 November 2005 

21 November 2005 14 November 2005 

21 November 2005 October 2005 


12 December 2005 November 2005 

26 December 2005 20 December 2005 

2006 

2 January 2006 27 and 29 December 2005 

9 January 2006 2 January 2006 

16 January 2006 December 2005 

30 January 2006 26 and 27 January 2006 

6 February 2006 1 February 2006 

27 February 2006 23 February 2006 






149

PRESS RELEASES RELATING TO TRANSACTIONS BY CORPORATE OFFICERS OR CLOSELY RELATED INDIVIDUALS AND LEGAL ENTITIES 

Date of publication Dates of the transactions Publication 

25 April 2005 18 april 2005 

24 May 2005 10 May 2005 

30 May 2005 2 February 2005 and 26 May 2005 

6 June 2005 6 June 2005 

27 June 2005 22 June 2005 

4 July 2005 from 28 to 30 June 2005 

11 July 2005 6 July 2005 

8 August 2005 1 August 2005 

8 August 2005 cancelled and replaced: 1 August 2005 



19 September 2005 14 and 15 September 2005 


3 October 2005 from 19 to 22 September 2005 

2 November 2005 26 October 2005 




5 December 2005 28 November 2005 

19 December 2005 from 15 to 16 December 2005 

26 December 2005 from 19 to 23 December 2005 

2006 

2 January 2006 from 27 to 30 December 2005 

9 January 2006 from 2 to 6 January 2006 

16 January 2006 12 January 2006 

6 March 2006 2 and 3 March 2006 

20 March 2006 15 and 16 March 2006 

2. AVAILABILITY OF INFOR- 

MATION 

2.1. In electronic form 

Bouygues website: www.bouygues.com 

Autorité des Marchés Financiers (AMF) website: 

www.amf-france.org 

Website of the Compulsory Legal Announcements 

Bulletin (BALO): www.journal-officiel.gouv.fr 

Website of the Office of the Clerk of the Paris 

Commercial Court: www.infogreffe.fr 

Website of the Luxembourg Stock Exchange: 

www.bourse.lu 

2.2. In printed form 

All the documents mentioned in this annual 

report are available free of charge from the 

company. 

150

Financial 

statements 

CONSOLIDATED FINANCIAL STATEMENTS 

Balance sheet 152 

Income statement 153 

Cash flow statement 154 

Changes in shareholders' equity 155 

Notes 156 

PARENT COMPANY FINANCIAL STATEMENTS 

Balance sheet 209 

Income statement 210 

Cash flow statement 210 

Notes 211


BOUYGUES GROUP - CONSOLIDATED BALANCE SHEET 

Assets (in millions of euros - IFRS) 

Liabilities and shareholders’ equity (in millions of euros - IFRS) 

Note 

12/2005 

Net 

12/2004 

Net 

Property, plant and equipment 4,615 4,629 

Intangible assets 1,056 1,020 

Goodwill 4,618 4,540 

Investments in associates 497 486 

Other non-current financial assets 283 237 

Deferred tax assets and long-term tax credits 8 375 569 

NON-CURRENT ASSETS 4 11,444 11,481 

Inventories / Programmes / Broadcasting rights 1,804 1,691 

Advances and down-payments on orders 357 369 

Trade receivables 5,418 4,575 

Tax asset (receivable) 71 45 

Other receivables and prepaid expenses 1,684 2,464 

Cash and equivalents 3,215 3,260 

Financial instruments (1) 35 48 

Other current financial assets 6 15 

CURRENT ASSETS 5 12,590 12,467 

Held-for-sale assets (2) 24 564 

TOTAL ASSETS 17 24,598 23,948 

Note 12/2005 12/2004 

Shareholders’ equity 

- Share capital 337 333 

- Share premium and reserves 3,417 2,771 

- Translation reserve 44 (15) 

- Current year’s consolidated net profit 832 909 

Shareholder’s equity attributable to the Group 4,630 3,998 

Minority interests 931 980 

SHAREHOLDERS’ EQUITY 6 5,561 4,978 

Non-current debt 9 4,721 4,648 

Non-current provisions 7 1,265 1,176 

Deferred tax liabilities 

and non-current tax liabilities 8 89 158 

TOTAL NON-CURRENT LIABILITIES 6,075 5,982 

Advances and down payments received 677 679 

Current debt 9 694 242 

Current taxes payable 211 177 

Trade payables 5,805 5,207 

Current provisions 7 676 540 

Other current liabilities, deferred income 

and similar 4,351 5,846 

Overdrafts and short-term bank borrowings 178 252 

Financial instruments (1) 9 41 

Other current financial liabilities 11 4 

CURRENT LIABILITIES 11 12,612 12,988 

Liabilities on held-for-sale assets (2) 24 350 

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY 17 24,598 23,948 

NET DEBT 10 2,352 1,875 

(1) hedging of fair-value financial liabilities 

(2) 2005: TPS is recorded as a held-for-sale asset 

152


(in millions of euros - IFRS) 

Note 2005 (1) 2004 (2) 

SALES (3) 12 24,073 20,894 

Other revenues from operations 147 141 

Purchases used in production (10,190) (8,993) 

Personnel costs (4,808) (4,380) 

External charges (5,716) (4,506) 

Taxes other than income tax (512) (470) 

Net depreciation and amortisation expense 17 (1,196) (1,103) 

Net charges to provisions and impairment losses 17 (457) (283) 

Changes in production and property development inventories 58 (13) 

Other operating income and expenses 453 270 

CURRENT OPERATING PROFIT 13 1,852 1,557 

Non-current operating income and expenses 13 and 17 (104) 0 

OPERATING PROFIT 13 and 17 1,748 1,557 

COST OF NET DEBT 14 and 17 (187) (159) 

Other financial income and expenses (29) (30) 

Income tax expense 15 and 17 (570) (501) 

Share of profits and losses of associates 4 and 17 62 37 

NET PROFITS BEFORE RESULTS OF DISCONTINUED AND HELD-FOR-SALE OPERATIONS 17 1,024 904 

Net profit of discontinued and held-for-sale operations 24 and 17 14 211 

NET PROFIT 17 1,038 1,115 

Attributable to the Group 17 832 909 


Minority interests in share of profits / losses of associates 14 

BASIC EARNINGS PER SHARE (in euros) 16 2.51 2.72 

DILUTED EARNINGS PER SHARE (in euros) 16 2.42 2.68 

(1) 2005: excluding TPS, recorded in "Net profit of discontinued and held-for-sale operations". 

(2) 2004: TPS and gain on disposal of Saur recorded in "Net profit of discontinued and held-for-sale operations" line, for comparison purposes 

(3) Of which sales generated abroad 7,127 5,989 


153


CONSOLIDATED CASH FLOW STATEMENT (in millions of euros - IFRS) 

Note 2005 (1) 2004 (1) Note 2005 (1) 2004 (1) 

A - NET CASH GENERATED BY OPERATING ACTIVITIES 

Cash flow: 

Consolidated net profit (including minority interests) 1,038 1,115 

Share of profit or loss from associates (equity-accounted) (2) (30) (13) 

Elimination of dividends from non-consolidated companies (5) (6) 

Charges to/write-backs of depreciation, amortisation 

and non-current provisions 

1,336 1,306 

Gains and losses on asset disposals (54) (353) 

Miscellaneous charges 48 3 

sub-total 2,333 2,052 

Cost of net debt 187 162 

Income tax expense for the year 570 500 

Cash flow 17 3,090 2,714 

Changes in working capital related to operating activities 

(including deferred taxes) 

(511) 35 

NET CASH GENERATED BY OPERATING ACTIVITIES 2,579 2,749 

B - NET CASH USED IN INVESTING ACTIVITIES 

Purchase price of property, plant and equipment and intangible assets 

(1,371) (1,221) 

17 

Proceeds from disposals of property, plant and equipment and intangible assets 142 174 

Net liabilities related to property, plant and equipment and intangible assets 38 107 

sub-total (1,191) (940) 

Purchase price of non-consolidated investments and other investments 

(5) (54) 

17 

Proceeds from disposals of non-consolidated companies and other investments 5 7 

Net liabilities related to non-consolidated companies and other investments 

sub-total 0 (47) 

Effects of changes in scope of consolidation 

Purchase price of investments in consolidated companies 

(328) (284) 

17 

Proceeds from disposals of investments in consolidated companies 78 1,153 

Amount receivable from Saur disposal 1,031 (1,031) 

Net liabilities related to investments in consolidated companies and effect 

of other changes in scope on cash 

(60) 22 

sub-total 22 721 (140) 

Other cash used in investing activities 

(change in loans, dividends received from non consolidated companies) 

(71) (10) 

NET CASH USED IN INVESTING ACTIVITIES (541) (1,137) 

C - NET CASH USED IN FINANCING ACTIVITIES 

Capital increases during the year paid for by shareholders 

and minority interests (including exercise of stock options) (18) 5 

Net change in capital due to conversion of bonds into shares / cancellation 

or acquisition of treasury shares and other (41) (58) 

Dividends paid during the year 

Dividends paid to shareholders of the parent company (249) (164) 

Dividends paid to minority shareholders of consolidated companies (91) (94) 

Exceptional payout made in 2005 (1,664) 1,664 

Other reductions of share capital (11) (1,667) 

Change in debt (4) 160 (270) 

Cost of net debt (5) (187) (162) 

Other cash used in financing activities 4 (93) 

NET CASH USED IN FINANCING ACTIVITIES (2,097) (839) 

D - EFFECT OF FOREIGN EXCHANGE FLUCTUATIONS 25 (8) 

CHANGE IN NET CASH (A + B + C + D) (34) 765 

Cash position at 1 January 5 3,008 2,250 

Net cash flows during the year (34) 765 

Other non-monetary flows 6 (7) 

TPS held for sale: elimination from cash position at end of period 57 

Cash position at 31 December 2005 (6) 5 3,037 3,008 

(1) including cash flow from TPS: 

Net cash position at 1 January 3 3 

- cash generated by operating activities 34 48 

- cash used in investing activities (24) (7) 

- cash used in financing activities (70) (41) 

Cash position at 31 December 2005 (57) 3 

(2) Elimination of share of profit or loss of associates + dividends received from associates 

(3) Definition of change in working capital: Current assets - Current liabilities (including current provisions, excluding current financial 

liabilities and financial instruments (debt hedging) -> in financing) 

(4) Definition of debt: non-current debt + current debt 

(5) of which net interest paid: (220) (208) 

(6) excluding cash position of TPS 

154

CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY, YEAR ENDED 31 DECEMBER 2005 (in millions of euros - IFRS) 

GROUP SHARE 

Share 

capital 

Share 

premium 

Reserves related 

to capital 

Retained 

earnings 

Consolidated reserves 

and profit for the year 

Treasury 

shares 

Profits recognised 

directly in equity 

POSITION AT 1 JANUARY 2004 333 1,977 712 43 1,940 9 5,014 

MOVEMENTS 

Capital and reserves transactions, net (58) (58) 

Share-based payment 7 7 

Dividends (1,828) (1,828) 

Net profit for the year (attributable to the Group) 909 909 

Financial instruments 6 6 

Translation adjustments (15) (15) 

Other changes (36) (1) (37) 

POSITION AT 31 DECEMBER 2004 333 1,919 712 43 985 (1) 7 3,998 

Change in accounting methods 

ADJUSTED POSITION AT 31 DECEMBER 2004 333 1,919 712 43 985 (1) 7 3,998 

MOVEMENTS 

Capital and reserves transactions, net 4 (22) 98 233 (331) (18) 

Share-based payment 7 32 39 

Dividends (249) (249) 


Financial instruments (9) (9) 

Translation adjustments 59 (1) 59 

Other changes (4) (18) (22) 

POSITION AT 31 DECEMBER 2005 337 1,897 810 276 1,244 (5) 71 4,630 

MINORITY INTERESTS 

Share 

capital 

Share 

premium 


to capital 

Retained 

earnings 

Consolidated reserves 

and profit for the year 

Profit recognised 


POSITION AT 1 JANUARY 2004 890 890 

MOVEMENTS 




Financial instruments 

Translation adjustments 2 2 

Other changes (29) (29) 

POSITION AT 31 DECEMBER 2004 978 2 980 

Change in accounting methods 

ADJUSTED POSITION AT 31 DECEMBER 2004 978 2 980 

MOVEMENTS 

Capital and reserves transactions, net 


Minority interests in net profit for the year 206 206 



Change in scope of consolidation (170) (170) 

Other changes 3 3 

POSITION AT 31 DECEMBER 2005 926 5 931 

TOTAL SHAREHOLDERS’ EQUITY 337 1,897 810 276 2,170 (5) 76 5,561 

(1) including call options on Bouygues SA shares (37) 

Total 

Group 

Total 

Minority 

interests 


155

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

Contents 

1. Significant events of the year 

2. IFRS accounting policies 

3. IFRS transition at 1 January and 31 December 2004: 

reconciliation of French GAAP / IFRS consolidated financial 

statements 

4. Non-current assets 

5. Current assets 

6. Consolidated shareholders’ equity 

7. Non-current and current provisions 

8. Non-current tax assets and liabilities 

9. Non-current and current debt 

10. Main components of change in net debt 

11. Current liabilities 

18. Financial instruments 

19. Off balance sheet commitments 

20. Headcount, employee benefit obligations and employee 

share ownership 

21. Disclosures on related parties and remuneration of directors / 

senior executives 

22. Additional cash flow statement information 

23. Auditors’ fees 

24. Changes in scope of consolidation and held-for-sale operations 

25. Principal exchange rates 

26. List of consolidated companies 

(Figures in millions of euros) 

12. Analysis of sales and other revenues from operations 

13. Operating profit 

14. Cost of net debt and other financial income and expenses 

15. Income tax expense 

16. Basic and diluted earnings per share 

17. Segment information 

156

NOTE 1: SIGNIFICANT EVENTS 

OF THE YEAR 

1.1. 1 January 2005: transition 

to IFRS 

• Under European Council Regulation 1606 / 2002, 

adopted 19 July 2002, companies listed on a 

regulated market in a member state must prepare 

their consolidated financial statements 

for the first financial year ending on or after 

1 January 2005 in accordance with the accounting 

standards issued by the International 

Accounting Standards Board (IASB), known as 

International Financial Reporting Standards 

(IFRS), as adopted by the European Union. 

• A detailed analysis of the impact of IFRS transition 

on the balance sheet as at 1 January 2004, 

including the general principles applied in the 

first-time adoption of IFRS, was published in 

the “Legal and Financial Information” chapter 

of the 2004 Annual Report (page 89). 

• A detailed analysis of the impact of IFRS transition 

(balance sheet, statement of changes in 

shareholders’ equity, income statement and 

cash flow statement) as at 31 December 2004 

has been published on the Bouygues website 

(Finance / Shareholders / IFRS standards). 

• Decisions on which standards to apply in the 

2005 financial statements reflect the Group’s 

assumptions about which standards will be 

applicable as at 31 December 2005. 

• In some specific areas, clarifications or interpretations 

are pending from the IASB or the 

International Financial Reporting Interpretations 

Committee (IFRIC); 

- Customer loyalty programmes (Bouygues 

Telecom) 

- Service concession agreements 

As regards service concession agreements, 

the Bouygues Group has equity interests in 

companies that hold Public / Private Partnership 

(PPP) contracts. The majority of these companies 

are accounted for by the equity method. 

The impact of accounting for these contracts 

in accordance with IFRS is not material. 

The new Portsmouth contract signed by Colas, 

a fully-consolidated company, is accounted for 

using the “financial asset” model, based on the 

draft IFRIC interpretation. 

• No changes have been made to the previouslypublished 

IFRS consolidated financial statements 

as at 1 January 2004 (opening balance 

sheet) and 31 December 2004. 

1.2. Scope of consolidation 

as at 31 December 2005 

Main changes in the scope of 

consolidation during 2005: 

983 companies consolidated: the increase of 57 

since 31 December 2004 relates mainly to acquisitions 

made by Colas. An additional 6.5% interest 

in Bouygues Telecom has also been consolidated, 

in accordance with the promise to sell granted by 

BNP Paribas (see note 1.5 below). 

1.3. Exceptional payout of 1.7 

billion euros (7 January 2005) 

The Shareholders’ General Meeting of 7 October 

2004 approved an exceptional payout of 5 euros 

per share (1.7 billion euros in total). The coupon 

was paid on 7 January 2005, and recognised in 

“Other non-financial liabilities” in the balance 

sheet as at 31 December 2004. The liability was 

removed from the balance sheet in 2005 on payment 

of the dividend. 

1.4. Sale of Saur to 

PAI partners 

The effects of the sale of Saur were included in 

the financial statements as at 31 December 2004. 

The amount of 1,031 million euros receivable from 

PAI partners, included in “Other receivables” as 

at that date, was received in February 2005. 

Following the sale, the Bouygues Group held 15% 

of Saur’s holding company, Novasaur (formerly 

Financière Gaillon). 

In 2005, the interest of Bouygues in Novasaur 

was reduced from 15% to 9.9%. Bouygues no longer 

exercises significant influence over Novasaur, 

since the number of directors appointed by 

Bouygues is below the threshold set by the shareholder 

agreements. 

1.5. Bouygues’ interest in 


Bouygues has granted BNP Paribas a promise 

to buy the latter’s 6.5% interest in the capital 

of Bouygues Telecom, exercisable at any time 

between 1 September 2005 and 31 July 2007 at a 

price of between 477 million euros and 495 million 

euros depending on the date of exercise. 

At the same time, BNP Paribas granted Bouygues 

a promise to sell this interest to Bouygues, 

exercisable between 1 September 2007 and 

30 September 2007 at a price of 497 million 

euros. 

These agreements were recognised as follows 

in the financial statements as at 31 December 

2005: 

- Increase in long-term debt = 460 

(present value at 31 December 2005) 

- Reduction in minority interests 

held by BNP Paribas = (130) 

- Increase in goodwill 

in the balance sheet = 320 

- Unwinding of the discounting of the debt: 

2005 income statement effect 

(over 6 months) = (10) 

1.6. Employee savings plan: 

recognition of share price 

discount 

The Board of Directors of Bouygues, meeting on 

21 June 2005, decided to establish a new leveraged 

investment fund for Group employees, who 

are entitled to a 20% discount on the share price 

based on the quoted market price on the 20 trading 

days preceding this decision. 

The resulting employee benefit of 30 million 

euros was recognised as an expense in “Personnel 

costs” in the consolidated financial statements 

for the six months ended 30 June 2005. 

1.7. 750 million euro bond 

issue 

In July 2005, Bouygues carried out a bond issue 

of 750 million euros maturing July 2020. The 

issue was priced at 99.804% and pays interest 

at 4.25%. 

This bond issue has extended the average maturity 

of the Group’s debt. 

1.8. Bouygues Telecom: fine for 

anti-competitive practices 

On 1 December 2005, the French competition 

commission (Conseil de la concurrence) ordered 

Bouygues Telecom to pay a fine of 58 million 

euros for alleged collusion. Bouygues has lodged 

an appeal. The total fine levied on France’s three 

mobile operators was 534 million euros. 

This fine has been recognised as an expense in 

“Non-current operating income and expenses”, 

with a negative impact on net profit attributable 

to the Bouygues Group of €52 million. For 

a breakdown of “Non-current operating income 

and expenses”, which showed a total of 104 million 

euros in 2005, refer to Note 13. 


157

1.9. Significant events and 

changes in scope of 

consolidation since 31 December 

2005 

• On 31 January 2006, Bouygues carried out a 

bond issue of 250 million euros, supplementary 

to the initial issue of 750 million euros (see 

Note 1.7), maturing 2020. The issue proceeds 

were received on 20 February 2006, and the 

issue was priced at 97.203% with an interest 

rate of 4.25%. 

• TPS: on 6 January 2006, TF1 and M6, who jointly 

control the TPS satellite offering with interests 

of 66% and 34% respectively, signed an industrial 

agreement with Vivendi Universal, the 

parent company of the Canal+ pay TV group, 

intended to merge the French pay TV activities 

of Canal+ and TPS. 

The proposed agreement is subject to approval 

from the French competition authorities and 

to a ruling by the French audiovisual regulator, 

the CSA. 

For the years ended 31 December 2005 and 

2004, income and expenses generated by TPS 

have been excluded from the operating activities 

shown in the income statement, in accordance 

with IFRS 5. Net income for the two 

periods relating to TPS is shown on the line “Net 

profit of discontinued or held-for-sale operations”. 

Assets and liabilities relating to TPS at 

31 December 2005 are also shown separately in 

the balance sheet under “Held-for-sale assets” 

and “Liabilities on held-for-sale assets”. 

NOTE 2: IFRS ACCOUNTING 

POLICIES 

2.1. IFRS standards and 

optional treatments applied 

As required by European Council Regulation 

1606 / 2002, adopted 19 July 2002, the Bouygues 

Group has prepared its consolidated financial 

statements in accordance with the accounting 

standards issued by the International Accounting 

Standards Board (IASB) as adopted by the 

European Union. 

These standards, collectively referred to as 

International Financial Reporting Standards 

(IFRS), also include International Accounting 

Standards (IAS) and interpretations issued by the 

Standing Interpretations Committee (SIC) and the 

International Financial Reporting Interpretations 

Committee (IFRIC). 

The Bouygues Group has applied all standards 

and interpretations effective within the European 

Union as at 31 December 2005. 

IAS 32 and IAS 39 on financial instruments have 

been applied with effect from 1 January 2004, 

ahead of the mandatory application date. 

The accounting principles applied by the 

Bouygues Group are described below. In some 

cases, IFRS allow companies to choose between 

the benchmark treatment and an allowed alternative 

treatment. The main optional treatments 

applied by the Group are described below. 

The Group has elected not to apply the following 

standards, amendments and interpretations 

ahead of the mandatory application date: IFRS 

7 (Financial Instrument Disclosures), application 

date 1 January 2007; the amendment to IAS 19 

(Employee Benefits), application date 1 January 

2006; and certain changes to IAS 39 that are 

mandatorily applicable from 1 January 2006. 

2.1.1. Basis of preparation 

The financial statements are prepared using the 

historical cost convention, with the exception 

of certain items (in particular financial assets 

and financial liabilities) which are measured at 

fair value. 

Preparing financial statements to comply with 

IFRS requires the use of estimates and assumptions 

which may have affected the amounts 

reported for assets, liabilities and contingent 

liabilities at the balance sheet date, and the 

amounts of income and expenses reported for 

the financial year. 

These estimates and assumptions have been 

applied consistently on the basis of past experience 

and of various other factors regarded as 

reasonable, forming the basis of assessments 

of the valuations of assets and liabilities for 

accounting purposes. Actual results may differ 

materially from these estimates if different 

assumptions or conditions apply. 

Where no standard or interpretation applies to 

a specific transaction, Group management has 

exercised its judgement to define and apply 

accounting policies that will provide relevant 

and reliable financial information, such that the 

financial statements: 

• give a true and fair view of the financial position, 

financial performance and cash flows of 

the Group; 

• reflect the economic reality of the underlying 

transactions; 

• are impartial, prudent, and complete in all 

material respects. 

2.1.2 Optional accounting treatments 

on first-time adoption of 

IFRS at 1 January 2004 (IFRS 1) 

The transition from French generally accepted 

accounting principles (French GAAP) to IFRS was 

effected in accordance with IFRS 1, “First-Time 

Adoption of International Financial Reporting 

Standards”, which requires IFRS to be applied 

retrospectively from 1 January 2004. 

The effects of the restatements required to comply 

with IFRS were recognised in consolidated 

shareholders’ equity as at 1 January 2004. 

Except as indicated below, the Bouygues Group 

has not used any other optional treatments or 

exemptions to the retrospective application of 

IFRS from the transition date allowed under 

IFRS 1. This applies in particular to: 

• business combinations, 

• fair value or revaluation used as deemed cost. 

■ Property, plant and equipment and intangible 

assets (IAS 16 and IAS 38) 

The Bouygues Group elected to use the depreciated 

historical cost model for the subsequent 

measurement of property, plant and equipment 

after initial recognition, and has applied this 

treatment retrospectively to all such assets. 

The value of property, plant and equipment 

recognised in the IFRS balance sheet at 1 January 

2004 took account of estimated terminal residual 

values, and of depreciation periods specific to 

each component of the asset (plant, equipment, 

buildings, etc). The difference between the carrying 

amount as determined under French GAAP 

and the new carrying amount determined under 

IFRS was taken to consolidated shareholders’ 

equity. 

Some items were reclassified in order to comply 

with IFRS definitions and disclosure requirements. 

158

■ Business combinations 

Business combinations carried out prior to 

1 January 2004 (date of first-time adoption 

of IFRS) were not restated retrospectively in 

accordance with IFRS 3. Goodwill and fair value 

adjustments to assets and liabilities existing at 

1 January 2004 were included in the IFRS opening 

balance sheet at their original amount, net 

of accumulated depreciation, amortisation and 

impairment losses to 31 December 2003. 

Goodwill, previously amortised on a straight-line 

basis, is no longer amortised under IFRS. 

Market shares previously recognised as separate 

intangible assets as a result of fair value adjustments 

in connection with business combinations 

were reclassified as goodwill as at 1 January 

2004. Under French GAAP, market shares were 

subject to impairment tests using methods consistent 

with IFRS, involving the use of cash 

generating units (CGUs). First-time adoption of 

IFRS had no impact on the value of these assets 

as at 31 December 2004 relative to the French 

GAAP valuation. 

■ Translation reserve 

The existing French GAAP translation reserve 

was deemed to be zero as at 1 January 2004. 

The reserve as at that date was transferred to 

consolidated reserves as allowed under IFRS 1, 

with no impact on total consolidated shareholders’ 

equity. 

■ Actuarial gains and losses 

As at 1 January 2004, the actuarial gains and 

losses arising on the Group’s obligations in 

respect of lump-sum retirement benefits were 

recognised as a liability in non-current provisions 

and charged to consolidated shareholders’ 

equity (cumulative gains and losses under the 

corridor method deemed to be zero). Actuarial 

gains and losses arising subsequent to 1 January 

2004 continue to be recognised using the corridor 

method. 

■ Share-based payment (IFRS 2) 

The Group applied IFRS 2 from 1 January 2004 

for all plans awarded after 7 November 2002 and 

vesting on or after 1 January 2005. 

■ Off-plan property sales 

Adoption of IFRS has changed the presentation 

of off-plan property sales. Under French GAAP, 

the entire amount of the sale was recognised in 

trade receivables on signature by the customer 

of the notarised deed of sale, with a matching 

liability recognised in deferred income. The sale 

was then recognised in the income statement 

based on the percentage of completion of the 

property development project. 

Under IFRS, no deferred income is recognised. 

Instead, trade receivables and sales are recognised 

based on the percentage of completion of 

the property development project. 

■ Financial instruments (IAS 32 and IAS 39) 

The Group has elected to recognise the effects of 

IAS 39 on financial instruments as at 1 January 

2004, ahead of the mandatory application date. 

These effects relate mainly to hedging instruments 

(interest rate risk and currency risk). The 

amount involved as of 1 January 2004 was not 

material. 

2.2. Consolidation methods 

and treatment of subsidiaries, 

associates and other 

investments 

• Companies over which Bouygues exercises control 

are consolidated using the full consolidation 

method. 

Exclusive control over TF1: 

• Bouygues holds 42.89% of the capital and 

42.94% of the voting rights of TF1, and according 

to a ruling by the Conseil de la Bourse 

des Valeurs of 11 February 1994 is regarded as 

acting in concert with Société Générale, a fellow-shareholder 

of TF1, under the terms of a 

shareholders’ agreement (1) . 

• Exclusive control by Bouygues over TF1 is demonstrated 

by the fact that: 

• Bouygues has consistently and regularly 

held a substantial majority of the voting 

rights exercised at TF1 shareholders’ meetings; 

• no other shareholder directly or indirectly 

controls a higher share of voting rights than 

Bouygues. 

Bouygues has clearly had exclusive power to 

determine decisions at TF1 shareholders’ meetings 

during at least two consecutive financial 

years (article L233-16 II of the Commercial Code). 

Other factors indicating the existence of exclusive 

control include: 

- the predominance of Bouygues among the 

group of shareholders acting in concert; 

- the large number of seats on the TF1 Board of 

Directors allocated to Bouygues; 

- the role of Bouygues in appointing key executives 

of TF1. 

All these factors clearly establish that Bouygues 

exercises exclusive control over TF1. 

The relationship between Bouygues and TF1 also 

meets the criteria stipulated in articles L233-3 I 

& II of the Commercial Code relating to de facto 

control by one company over another. 

• Companies under the joint control of more 

than one shareholder are consolidated by the 

proportionate consolidation method, based on 

the percentage of control held. 

• Companies over which Bouygues exercises 

significant influence are consolidated by the 

equity method. 

Cofiroute: although less than 20% owned 

(16.7%), Cofiroute is consolidated using the 

equity method, as Bouygues exercises significant 

influence through its seats on the Board 

of Directors. 

• In accordance with IAS 39 on financial instruments, 

investments in non-consolidated companies 

are recognised at fair value and are 

subject to impairment tests. 

Changes in scope of consolidation: 

2005 2004 

Fully consolidated 760 726 

Proportionately 

consolidated 

197 169 

Equity method 26 31 

983 926 

The main changes during 2005 are described in 

“Significant Events”. 

2.3. Business combinations 

With effect from 1 January 2004, the acquisition 

cost of a business combination (including 

transaction costs) is allocated to the identifiable 

assets and liabilities of the acquiree, measured 

at fair value at the acquisition date. These identifiable 

assets and liabilities are presented in the 

balance sheet using the full fair value method 

in accordance with IFRS 3. This method involves 

remeasuring the assets and liabilities acquired 

at fair value in full (including minority interests), 

rather than remeasuring just the percentage 

interest acquired. 

Fair value is the amount for which an asset or 

cash generating unit could be sold between 

knowledgeable, willing parties in an arm’s length 

transaction. Goodwill represents the excess of 

acquisition cost over the acquirer’s interest 

in the fair value of the acquiree’s identifiable 

assets, liabilities and contingent liabilities that 

can be reliably measured at the acquisition 

date; it is allocated to the cash generating unit 

(which within the Bouygues Group equates to the 

business segment) benefiting from the business 

combination. 

(1) In January 2006, Société Générale sold its interest in TF1, meaning that Bouygues and Société Générale were no longer acting in concert (AMF sale reference 206C0188, dated 30 January 2006). 

This change does not affect the exclusive control exercised by Bouygues over TF1. 


159

The main initial allocations of acquisition cost to 

identifiable assets and liabilities may be adjusted 

within the twelve months following the acquisition 

date, after which they may no longer be 

adjusted. 

Goodwill recognised prior to 1 January 2004, 

which Bouygues elected not to restate under 

the option allowed by IFRS 1, continues to be 

measured using the partial fair value method 

(IFRS 3). This method involves restricting the 

fair value remeasurement of identifiable items 

to the percentage interest acquired. Minority 

interests are measured at the carrying amount 

of such items as shown in the balance sheet of 

the acquired entity. 

Negative goodwill is taken to the income statement 

in the period in which the acquisition is 

made. 

Subsequently, goodwill is carried at cost net of 

any impairment losses identified using the methods 

described under “Subsequent remeasurement 

of non-current assets” below, in accordance 

with IAS 36. Impairment losses are charged to the 

income statement as an operating item. 

2.4. Foreign currency 

translation 

2.4.1. Transactions denominated in 

foreign currencies 

Transactions denominated in foreign currencies 

are translated into euros at the average 

exchange rate on the date of the transaction. 

Monetary assets and liabilities denominated in 

foreign currencies at the balance sheet date 

are translated at the closing exchange rate. 

Translation differences are recognised as income 

or expenses in the income statement. Non-monetary 

assets and liabilities denominated in foreign 

currencies and accounted for at historical cost 

are translated using the exchange rate on the 

date of the transaction. 

2.4.2. Financial statements of 

foreign entities 

All assets and liabilities of consolidated entities 

with a functional currency other than the euro 

are translated at the closing exchange rate. 

Income and expenses are translated at the average 

exchange rate for the period. Translation differences 

arising from this treatment, and arising 

from the retranslation of a subsidiary’s opening 

shareholders’ equity at the closing exchange 

rate, are taken to the translation reserve, which is 

a component of “Share premium and reserves” in 

shareholders’ equity. Translation differences arising 

on the net investment in foreign subsidiaries 

and associates are recognised in shareholders’ 

equity. 

2.5. Deferred taxation 

Deferred taxation is recognised on differences 

between the carrying amount and tax base of 

assets or liabilities, and arises as a result of: 

• Temporary differences between the carrying 

amount and tax base of assets or liabilities, 

which may be: 

- items generating a tax liability in the future 

(deferred tax liabilities), arising mainly from 

income that is liable to tax in future periods; 

or 

- items deductible from taxable profits in the 

future (deferred tax assets), mainly provisions 

that are temporarily non-deductible 

for tax purposes. 

• Tax losses available for carry-forward (deferred 

tax assets), provided that there is a genuine 

probability of recovery in future periods. 

Deferred taxes are measured using known applicable 

tax rates at the balance sheet date. In the 

case of French entities, deferred tax assets have 

been adjusted to reflect the effect of changes in 

tax legislation and of new tax rates. 

Deferred taxes are not discounted. 

Deferred tax assets are included in non-current 

assets. 

2.6. Non-current assets 

2.6.1. Property, plant and equipment 

Property, plant and equipment is measured at 

acquisition cost net of accumulated depreciation 

and impairment. Depreciation is recognised on a 

straight line basis over the estimated useful life 

of the asset. 

Useful lives by main asset category and business 

segment: 

Mineral deposits (quarries) 

(1) 

CONSTRUCTION MEDIA TELECOMS 

Non-operating buildings 10 to 30 years 25 to 50 years - 

Industrial buildings depends on type - 20 years 

Plant, equipment and tooling 3 to 10 years 3 to 7 years 3 to 10 years 

(2) 

Other property, plant and equipment 

(vehicles and office equipment) 

In accordance with IAS 16, when an item of property, plant and 

equipment consists of components with different useful lives, each 

component is accounted for and depreciated as a separate item, in 

terms of the estimated terminal residual values and depreciation 

calculations. 

Gains and losses on disposal represent the difference between 

the sale proceeds and the carrying amount, and are recognised in 

the income statement under “Non-current operating income and 

expense”. 

(1) depreciated on the basis of the rate of depletion, 

up to a maximum of 40 years 

(2) depending on the type of asset 

3 to 10 years 2 to 10 years 

(2) 

Depreciation periods are reviewed annually, and 

are adjusted if expectations differ from previous 

estimates. The resulting changes in accounting 

estimate are accounted for prospectively. 

160

■ Leases: 

Items of property, plant and equipment held 

under leases whereby the Bouygues Group retains 

substantially all the risks and rewards of ownership 

are recognised as assets in the balance 

sheet. Leases are classified as finance leases or 

operating leases in accordance with the criteria 

specified in IAS 17. Prior to the first-time adoption 

of IFRS, leased assets were only recognised in the 

balance sheet if the lease qualified as a créditbail 

transaction under French GAAP. 

Assets held under finance leases are recognised 

in the balance sheet in “Property, plant and 

equipment” at the lower of fair value or the 

present value of the minimum lease payments, 

less accumulated depreciation and impairment 

losses. They are depreciated over their estimated 

useful lives. The lease obligation is recognised as 

a liability under “Debt” in the balance sheet. 

Obligations under operating leases are disclosed 

in off balance sheet commitments. 

2.6.2. Intangible assets 

IAS 38 defines an intangible asset as an identifiable 

non-monetary asset without physical 

substance, which may be: 

- separable, i.e. capable of being independently 

sold, transferred, licensed, rented or exchanged; 

or 

- derived from contractual or other legal rights, 

whether separable or not. 

Intangible assets with finite useful lives are 

depreciable. Intangible assets with indefinite useful 

lives are not depreciable, but are subject to an 

impairment test at each balance sheet date. 

They include: 

• Development expenses: 

- in accordance with IFRS, incorporation and 

research expenses are expensed as incurred. 

ed to generate future economic benefits and 

their cost can be reliably measured. 

• Concessions, patents and similar rights: 

These include the following assets held by 

Bouygues Telecom: 

Type of asset 

GSM frequency 

costs 

Amortisation 

method 

straight line 

Period 

12 years 

UMTS licence straight line 

(1) 

IT system 

software and 

developments 

straight line 

4 years 

Office software straight line 4 years 

(1) The amortisation period for the UMTS licence will match its 

useful life. Since the high-speed network opened on 26 May 

2005, Bouygues Telecom has been amortising its UMTS licence 

over a period of 17.5 years. 

• UMTS licence: 

The fee for the UMTS licence, awarded for a 20- 

year period, comprises: 

• a fixed component of €619.2 million, recognised 

as an intangible asset on the date the licence 

was awarded (12 December 2002); 

• a variable component, calculated at 1% of sales 

generated by the operation of the third-generation 

mobile network, which is recognised in the 

income statement for the period with effect 

from the opening of the UMTS network. 

2. 6. 3. Other intangible assets 

Other intangible assets recognised by the Group 

include leasehold rights and broadcasting rights 

(TF1). 

Intangible assets with no legal protection have 

been reclassified as goodwill under IFRS. 

■ TF1 broadcasting rights: 

This item includes shares in films and programmes 

co-produced by TF1 Films Production, 

TF1-Video, Glem and Téléma; distribution and 

trading rights owned by TF1 International TCM 

DA, TF1 Entreprises and CIBY DA; and music rights 

owned by Une Musique and Baxter. 

Broadcasting rights are accounted for at historical 

cost. Dates of initial recognition and amortisation 

methods are as follows: 

Initial recognition 

End of shooting 

Censors’ certificate 

Signature of contract 

Co-production shares 

in line with revenues 

3 years 

straight line 

For films co-produced by TF1 Films Production 

and Téléma, the Group uses whichever method 

enables the film to be amortised as quickly as 

possible. Consequently, the method used may 

differ from film to film. 

In accordance with IAS 36, an impairment loss 

is recognised on a line by line basis where estimated 

future revenues do not cover the carrying 

amount of the asset. 

Amortisation method 

Broadcasting rights 

Distribution / Trading 

3 years straight line, or 

in line with revenues 

(5 years for trading) 

Music rights 

2 years 

75% in year 1 

25% in year 2 

- development expenses are capitalised if the 

relevant criteria are met, i.e. if they are expect- 


161

2.6.4. Subsequent remeasurement 

of non-current assets 

The carrying amount of non-current assets is 

reviewed in accordance with Group accounting 

policies on an annual basis, or more frequently if 

internal or external events or circumstances indicate 

that an asset may be impaired. In particular, 

the carrying amount of intangible assets (other 

than broadcasting rights, which are measured 

using the policies described in 3.2.3.1) and goodwill 

is compared with their recoverable amount. 

In determining value in use, intangible assets to 

which independent cash flows cannot be directly 

allocated are grouped within the cash-generating 

units (CGU) to which they belong, or within the 

appropriate group of CGUs representing the lowest 

level at which management monitors return 

on investment (business segment level in the 

case of the Bouygues Group). The value in use of 

CGUs is measured using the discounted cash flow 

(DCF) method, applying the following principles: 

• the pre-tax cash flows used are those derived 

from the medium-term business plan prepared 

by the management of the business segment 

as part of the Group’s management cycle; 

• the discount rate is determined by adjusting 

the segment’s weighted average cost of capital 

to arrive at a pre-tax rate; 

• the terminal value is calculated by aggregating 

the discounted cash flows to infinity, based on 

normative cash flows and a perpetual growth 

rate that is consistent with the growth potential 

of the markets in which the business segment 

operates and with its competitive position in 

those markets. 

The recoverable amount of the CGU as determined 

above is then compared with the carrying 

amount in the consolidated balance sheet 

of the non-current assets (including goodwill) 

attributed to the CGU. If this carrying amount is 

greater than the recoverable amount of the CGU, 

an impairment loss is recognised, this loss being 

allocated in the first instance to any goodwill 

recognised in the balance sheet. 

2.6.5. Non-current financial assets 

In addition to deferred tax assets (treated as 

non-current), other non-current financial assets 

include loans and receivables (including amounts 

due from non-consolidated companies), deposits 

and caution money, and investments in non-consolidated 

companies over which the Bouygues 

Group exercises neither control nor significant 

influence. 

Investments in non-consolidated companies are 

measured at fair value, with changes in fair value 

taken to shareholders’ equity. 

Fair value is the market price for listed investments, 

and value in use for unlisted investments. 

Value in use is determined using the most appropriate 

criteria for each individual investment. 

If there is objective evidence that an investment 

is impaired, the accumulated losses taken 

to shareholders’ equity are recognised in the 

income statement. 

Advances to non-consolidated companies, and 

other loans and receivables, are accounted for at 

amortised cost, determined using the effective 

interest method. 

In the case of variable-rate loans and receivables, 

cash flows are periodically re-estimated to reflect 

changes in market interest rates, resulting in an 

adjustment to the effective interest rate and 

hence to the valuation of the loan or receivable. 

Loans and receivables are reviewed for objective 

evidence of impairment. An impairment loss is 

recognised if the carrying amount of a financial 

asset is greater than the estimated recoverable 

amount as determined by impairment testing. 

Impairment losses are recognised in the income 

statement. 

2.7. Current assets 

2.7.1. Inventories 

Inventories are stated at the lower of cost (first in 

first out or weighted average cost, depending on 

the nature of the business) or market price. 

Where the realisable value of inventory is lower 

than cost, a provision for impairment is recognised. 

2.7.2. Programmes and broadcasting 

rights (TF1) 

Programmes and broadcasting rights include 

in-house productions made by TF1 but not yet 

broadcast; external productions, comprising 

broadcasting rights acquired by TF1; and co-productions. 

They are measured at total production 

cost (including a portion of indirect production 

costs), or at acquisition cost in the case of coproductions. 

Consumption of programmes depends on the type 

of programme and the number of possible transmissions. 

Most programmes are 100% amortised 

on first transmission, or when it becomes evident 

that the programme will not be broadcast. 

Sports transmission rights: 

Acquisitions of sports transmission rights for 

which TF1 has placed an irrevocable order prior 

to the balance sheet date are priced at the 

contractual amount less any sums already paid 

at that date. 

A programme is treated as ready for broadcast 

and recognised in inventory under “Programmes 

and broadcasting rights” when the following two 

conditions are met: technical acceptance (for inhouse 

and external productions), and opening of 

rights (for external productions). 

External productions that have not been broadcast, 

and the rights to which have expired, are 

expensed as a component of current operating 

profit. 

The value of programmes and broadcasting rights 

is measured as follows: 

• in-house production: at overall production cost 

(direct costs plus a portion of indirect production 

costs); 

• broadcasting rights and co-productions: at 

purchase cost, less consumption for the year 

calculated at each balance sheet date. 

2.7.3. Trade receivables 

Trade receivables are carried at face value, net 

of impairment recorded to reflect the probability 

of recovery. These receivables are usually 

short-term and non interest-bearing. They are 

measured at the original invoice amount, unless 

application of an implied interest rate would have 

a material effect. 

In line with the percentage of completion method 

of accounting for long-term contracts, trade 

receivables include: 

• statements issued as works are executed or 

services provided, and accepted by the project 

owner; 

• unbilled receivables, arising where works are 

entitled to acceptance but billing or acceptance 

by the project owner has been delayed. 

2.7.4. Other current receivables and 

prepaid expenses 

Other receivables are carried at face value, net 

of impairment recorded to reflect the probability 

of recovery. 

162

2.8. Financial instruments 

Some group entities use hedging instruments to 

limit the impact on the income statement of fluctuations 

in exchange rates and interest rates. The 

Group’s policy on the use of financial instruments 

is described below. 

2.8.1. Risks to which the Group is 

exposed 

■ Currency risk 

In general, the Bouygues Group has little exposure 

to currency risk in routine commercial transactions. 

Wherever possible, expenses relating to 

a contract are incurred in the same currency as 

that in which the contract is billed. This applies to 

most projects executed outside France, on which 

local-currency expenses (sub-contracting and 

supplies) represent a much higher proportion 

than euro-denominated expenses. In addition, 

the Group pays particular attention to risks relating 

to assets denominated in non-convertible 

currencies, and to country risk generally. 


The Group’s financial income and expenses have 

low sensitivity to interest rate risk. The bulk of 

debt is in the form of fixed-rate bond issues, and 

a range of hedging instruments is used to convert 

variable-rate debt into fixed-rate debt. 

On average over the year, the amount of variable-rate 

debt in the balance sheet is less than 

the amount of surplus cash invested at variable 

rates. 

The consolidated income statement would be 

only marginally affected by fluctuations in euro 

interest rates, or by a divergence in interest 

rate trends between the euro and other major 

currencies. 

2.8.2. Principles applied to all hedging 

instruments 

The only instruments used for hedging purposes 

are forward currency purchases and sales, currency 

swaps and purchases of currency options 

for currency risk hedging purposes; and interest 

rate swaps, future rate agreements, and purchases 

of caps and tunnels for interest rate risk 

hedging purposes. 

These instruments: 

• are used solely for hedging purposes; 

• are contracted solely with high-quality French 

and foreign banks; 

• carry no liquidity risk in the event of a downturn. 

Specific reports are prepared for those responsible 

for the management and supervision of the 

relevant Group companies, describing the use 

of hedging instruments, the selection of counterparties 

with whom they are contracted, and 

more generally the management of exposure to 

currency risk and interest rate risk. 

2.8.3. Hedging rules 

■ Currency risk 

Group policy is to hedge systematically all residual 

currency exposure relating to commercial 

transactions. If the future cash flow is certain, 

the currency risk is hedged by buying or selling 

currency forward, or by means of currency swaps. 

For some large contracts, options may be taken 

out for hedging purposes before the awarding of 

the contract has been confirmed. 

In general, equity investments in foreign companies 

are hedged by a debt of a similar amount in 

the same currency, recorded in the books of the 

company that owns the investment. 

In the interests of efficiency, the currency positions 

of some Group entities may be managed 

centrally, which in some cases may result in the 

offset of matching positions. 


Group policy is for each sub-group to hedge some 

or all of its financial assets and liabilities, where 

these are foreseeable and recurring. 

In practice, this applies to capital-intensive businesses 

(telecoms and media). These entities 

control their future interest charges by fixing 

their cost of debt using swaps and future rate 

agreements, or by limiting it through the use 

of caps, over a period equivalent to that of the 

financial liabilities to be hedged. 

As with currency risk, the interest rate positions 

of some Group entities may, in the interests of 

efficiency, be managed centrally and partially 

offset. 

2.8.4. Accounting methods 

In general, the financial instruments used by the 

Group qualify for hedge accounting, which means 

that the hedging relationship is documented in 

accordance with the requirements of IAS 39. Two 

types of accounting treatment are used: 

• Fair value hedges: changes in the fair value of 

the hedging instrument and changes in the fair 

value of the hedged item are recognised symmetrically 

in the income statement. 

• Cash flow hedges: changes in the fair value of 

the hedging instrument are recognised in the 

income statement for the ineffective portion of 

the hedging relationship, and in shareholders’ 

equity (until the hedge is closed out) for the 

effective portion. 

In a few cases (involving small notional amounts 

and a short hedging period), financial instruments 

are deliberately excluded from hedge 

accounting in order to avoid excessive administrative 

processing. In these cases, changes in the 

fair value of the financial instrument are taken 

directly to the income statement. 

2.9. Consolidated shareholders’ 

equity 

Treasury shares are deducted from consolidated 

shareholders’ equity, in accordance with IFRS 

(including the acquisition cost of call options 

used to cover the 2005 stock option plan). 

If Group subsidiaries hold their own shares, an 

additional percentage interest is recognised at 

Group level. 

■ Translation reserve 

This reserve was deemed to be zero at 1 January 

2004, and the balance transferred to “Retained 

earnings”. The translation reserve shown in the 

balance sheet represents translation differences 

arising since that date. 

2.10. Non-current liabilities 

2.10.1. Non-current debt (portion 

due after more than one year) 

With the exception of derivative instruments 

accounted for as financial liabilities measured 

at fair value, all other borrowings and financial 

liabilities are recognised initially at fair value and 

subsequently at amortised cost, measured using 

the effective interest method. 

Transaction costs directly attributable to the 

acquisition or issuance of a financial liability are 

offset against that liability, and amortised over 

the life of the liability using the effective interest 

method. 

The effective interest rate is the rate that exactly 

discounts estimated future cash payments to 

maturity (or to the next market rate repricing 

date) to the net carrying amount of the liability. 

The calculation takes account of all fees and 

points paid or received by the parties to the 

contract. 

The portion of long-term debt due within less 

than one year is included in current liabilities. 


163

2.10.2. Non-current provisions 

Under IAS 37, “Provisions, Contingent Liabilities 

and Contingent Assets”, a provision is recorded 

where the Group has an obligation to a third 

party at the balance sheet date resulting from a 

past event, the settlement of which is expected 

to result in a outflow from the group of resources 

embodying economic benefits. 

The amount recognised as a provision represents 

the Group’s estimate of the outflow of resources 

that will be needed to settle the obligation. 

Non-current provisions are not usually associated 

with the normal business cycle of each 

segment (compare the definition of current provisions 

below). 

Non-current provisions mainly comprise: 

• Provisions established to cover the uninsured 

portion of risks under 2-year and 10-year construction 

contract guarantees. These provisions 

are recognised in line with recognition 

of contract revenues, based on statistical data 

reflecting actual experience over the long 

term. 

• Provisions related to notified tax reassessments 

and fines levied by the competition 

authorities. 

• Provisions for litigation, claims and foreseeable 

risks relating to the Group’s operations, especially 

foreign operations, including permanent 

withdrawal from projects and sundry risks and 

liabilities. 

• Provisions for site remediation costs. 

• Employee benefits: 

- Provisions for long-service awards. 

- Provisions for obligations to employees in 

respect of lump-sum benefits payable on 

retirement. 

This provision is calculated using the projected 

unit credit method based on final 

salary, and on the basis of the collective 

agreement for each business segment. The 

calculation takes account of: 

➤ status, age and length of service for each 

employee category; 

➤ employee turnover, calculated on the 

basis of the average number of leavers 

by business segment, age bracket and 

employee category; 

➤ average salary and wages including 

bonuses and benefits in kind, uplifted 

by a coefficient to reflect the applicable 

percentage of employer’s social security 

charges; 

➤ a final salary inflation rate; 

➤ a discount rate applied to the obligation 

over the projected period to the retirement 

date; 

➤ estimated life expectancy, based on mortality 

tables. 

The Group does not recognise movements in 

this obligation arising from changes in actuarial 

assumptions unless they represent more 

than plus or minus 10% of the retirement 

benefit obligation (the corridor method). 

Any actuarial gains and losses recognised 

are amortised through the income statement 

over the average remaining working lives of 

the employees concerned; in line with the 

treatment elected by the Group on transition 

to IFRS, this method has been applied 

prospectively from 1 January 2004. 

• Provisions for pension obligations (depending 

on the country and terms of the pension 

plan). 

The actuarial assumptions used to measure the 

present value of the pension obligation and 

the pension cost for the period in respect of 

defined-benefit plans represent the best estimate 

of the variables that will determine the 

final cost of the benefits. These assumptions 

are mutually consistent, and the discount rate 

was determined by reference to the expected 

market rate at the balance sheet date, taking 

into account the estimated timing of benefit 

payments (see Note 20). 

2.11. Current liabilities 

2.11.1 Advances and down-payments 

on orders 

This item comprises advances and downpayments 

received from customers on start of 

works contracts. 

2.11.2. Current provisions 

• Provisions relating to the normal business 

cycle of each segment. These mainly comprise: 

- Provisions for project and contract risks, 

joint ventures, etc. 

- Provisions for restructuring 

- Provision for customer loyalty programmes 

(Bouygues Telecom), etc. 

• Provisions for losses to completion on contracts. 

These relate to contracts in progress, 

and take account of claims accepted by the 

customer. They are measured on a contract 

by contract basis, with no netting between 

contracts. 

2.11.3. Trade payables and other 

current liabilities 

Because of the short-term nature of these liabilities, 

they are shown in the consolidated financial 

statements at a reasonable estimate of market 

value. 

2.11.4. Deferred income and similar 

See the section “IFRS standards and optional 

treatments applied” for the specific treatment 

applied to off-plan property sales. 

2.12. Income statement 

As allowed under IAS 1, “Presentation of Financial 

Statements”, the Bouygues Group presents an 

income statement that classifies expenses by 

nature, in the format specified in recommendation 

2004-R-02 issued by the French national 

accounting standard-setter, the Conseil National 

de la Comptabilité (CNC), on 27 October 2004. 

An income statement classifying expenses by 

function is shown in Note 17 to the financial 

statements. 

2.12.1. Definition of operating 

revenues 

Revenues from the Group’s operations are recognised 

when: 

• it is probable that the future economic benefits 

of the transaction will flow to the Group; 

• the amount of revenue can be reliably measured; 

• at the transaction date, it is probable that the 

amount of the sale will be recovered. 

■ Bouygues Telecom: 

Bouygues Telecom generates revenue from services 

and handset sales. 

• Services 

Fixed-price packages and commercial services 

are invoiced one month in advance, and the 

corresponding revenue is recognised on a 

straight-line basis over the service period. 

Revenues from call charges other than fixedprice 

packages, roaming fees and interconnection 

fees are recognised as the service is used. 

Service discounts offered to new customers on 

subscription to fixed-price packages that are 

contingent upon the customer committing to 

retain their subscription for a specified period 

are charged to income over the minimum commitment 

period. 

164

Services carried out on behalf of content providers 

in relation to SMS+ services, special 

numbers and i-mode services are not included 

in income and expenses for the period. Only the 

margin on such services is recognised in sales. 

• Handset sales 

Handset sales are recognised on the sale of the 

handset to the distributor or retailer, but the 

margin on the sale is eliminated until the line is 

activated by the consumer. 

• Distributor / retailer commission 

All commission payable to distributors and retailers 

is recognised as an expense. 

2.12.2. Accounting for long-term 

contracts 

■ Construction activities 

In all the Group’s construction activities, longterm 

contracts are accounted for using the 

percentage of completion method. The revenue 

recognised equals the latest estimate of the 

total selling price of the contract multiplied by 

the actual stage of completion determined by 

reference to the physical state of progress of the 

construction work. 

If a contract is expected to generate a loss on 

completion, a provision for losses to completion 

is recognised as a current provision in the balance 

sheet. The loss is provided for in full as soon 

as it can be reliably measured, irrespective of the 

stage of completion. 

■ Property development 

The accounting treatment applied to property 

development activities is as follows: 

Property development revenues are recognised 

using the percentage of completion method once 

the following conditions have been met: 

- building permit with no appeal; 

- signature of notarised deed of sale or development 

contract; 

- construction contract signed (order given to 

start works). 

The percentage of completion represents costs 

incurred to date as a proportion of the total 

estimated costs to completion. 

Property development project finishing costs are 

recognised on a percentage of completion basis. 

All interest charges associated with ongoing or 

completed property development projects are 

expensed as incurred. 

2.12.3. Profits / losses from joint 

operations 

These represent the Group’s share of profits 

or losses from non-consolidated companies 

involved in the operation of production sites 

for road-building and asphalt products, and are 

included in operating profit. 

2.12.4. Share-based payment 

In accordance with IFRS 2, stock subscription 

options granted to corporate officers or employees 

of Bouygues or other Group companies (TF1) 

are accounted for in the financial statements 

as follows: the fair value of the options granted 

(corresponding to the fair value of the services 

rendered by the employees as consideration 

for the options) is recognised as an employee 

benefit under “Personnel costs” in the income 

statement, with the matching entry credited to 

shareholders’ equity. 

The amount of the employee benefit is measured 

at the grant date of the option using the 

Black & Scholes model, and is charged to the 

income statement over the vesting period of the 

rights. In accordance with IFRS 2, this treatment 

applies only to plans awarded after 7 November 

2002. 

2.13. Cash flow statement 

The cash flow statement is presented in accordance 

with IAS 7 and CNC recommendation 2004- 

R-02. 

This statement explains changes in the Group’s 

net cash position, which is defined as the net 

total of the following balance sheet items: 

- cash and equivalents; 

- overdrafts and short-term bank borrowings. 

2.14. Off balance sheet 

commitments 

A summary of contractual obligations and commercial 

commitments is provided in Note 19. 

2.15. Financial indicators 

Definitions of key financial indicators: 

2.15.1. EBITDA 

Current operating profit excluding net depreciation 

and amortisation expense and changes 

in provisions. 

2.15.2. Free cash flow 

Cash flow (from operations, before changes in 

working capital) less net capital expenditure for 

the period. 

2.15.3. Net debt 

This represents the aggregate of: 

• cash and equivalents; 

• overdrafts and short-term bank borrowings; 

• non-current and current debt; 

• financial instruments (used to hedge financial 

liabilities measured at fair value). 

2.16. Other information 

Comparability of the IFRS financial statements: 

• The accounting policies applied under IFRS as 

at 31 December 2004 are the same as those 

applied as at 31 December 2005, and consequently 

there is no impairment of the comparability 

of balance sheet, income statement and 

cash flow statement items between accounting 

periods. 

• In accordance with IFRS 5, the TF1 subsidiary 

TPS, which is in process of divestment, is shown 

on the separate lines used to report held-forsale 

assets and operations in the consolidated 

balance sheet as at 31 December 2005 and the 

income statement for the year then ended (see 

Note 24). 

• The impact of changes in the scope of consolidation 

during 2005 does not affect the 

comparability of the financial statements as 

presented. 


165

NOTE 3: IFRS TRANSITION AT 1 JANUARY AND 

31 DECEMBER 2004: RECONCILIATION OF FRENCH GAAP / 

IFRS CONSOLIDATED FINANCIAL STATEMENTS 

3.1. 1 January 2004: French GAAP / IFRS comparative balance 

sheet (as published in the 2004 Annual Report, pages 90 & 91) 

For optional accounting treatments elected under IFRS, see Note 2, ”IFRS standards and optional treatments 

applied”, and specifically Note 2.1.1, ”Optional accounting treatments on first-time adoption of IFRS at 1 January 

2004 (IFRS 1)“. 

Balance sheet 

(IFRS classifications) in millions of euros 


French 

IFRS 

GAAP 

Difference 

Assets 

Property, plant and equipment 4,532 5,020 488 

Intangible assets 6,409 1,088 (5,321) 

Goodwill 264 5,272 5,008 

Other non-current assets 778 1,558 780 

Current financial assets 2,616 2,598 (18) 

Other current assets 10,518 (1) 8,683 (1,835) 

Total 25,117 24,219 (898) 

Liabilities & shareholders’ equity 

Shareholders’ equity attributable to the Group 5,058 (1) 5,014 (44) 

Minority interests 1,046 (1) 890 (156) 

Total shareholders’ equity 6,104 5,904 (200) 

Non-current provisions and other non-current liabilities 1 896 1,516 (380) 

Non-current debt 5,160 4,233 (927) 

Other current liabilities 11,715 (1) 11,100 (615) 

Current financial liabilities 242 1,466 1,224 

Total 25,117 24,219 (898) 

Net debt 2,786 3,101 315 

as % of shareholders’ equity 46% 53% 

(1) French GAAP as at 1 January 2004, after restatement for the change of method relating to the customer loyalty programme provision 

(Bouygues Telecom) recognised at end 2004 under French GAAP and retained under IFRS. 

1 January 2004: comments on the principal differences 

between French GAAP and IFRS 

ASSETS 

in millions of euros 

Property, plant and equipment 488 

Capitalisation of plant and equipment held under finance leases 124 

Net reclassifications from other balance sheet items 297 

(primarily telecoms software) 

Net restatement of depreciation periods 78 

(buildings, telecoms equipment, etc.) 

Other items (11) 

Intangible assets (5,321) 

Reclassification of fair value adjustments as goodwill (market shares, etc.) (5,027) 

Other reclassifications to property, plant and equipment or other balance 

sheet items (primarily telecoms software) (239) 

Amortisation of intangible assets and other items (55) 

Goodwill 5,008 

Reclassification of intangible assets (fair value adjustments previously 5,027 

recognised as market shares of acquirees) 

Other reclassifications (19) 

Other non-current assets 780 

Reclassification of deferred tax assets to “Other current assets” 706 

Net additional deferred tax effect from IFRS adjustments and other items 74 

Current financial assets (18) 

Net restatement of securitisation programmes (Bouygues Telecom) and 

remeasurement of hedging instruments 

Other current assets (1,835) 

Reclassification of deferred tax assets to non-current assets (706) 

Restatement of receivables relating to off-plan property sales (936) 

(matching reduction in “Other current liabilities”) 

Reclassification of broadcast rights not yet ready for transmission (TF1) (72) 

(matching reduction in “Other current liabilities”) 

Restatements to deferred charges (32) 

Other items (securitisation, reclassifications, etc.) (89) 

LIABILITIES & SHAREHOLDERS’ EQUITY 

Impact of transition on shareholders’ equity at 1 January 2004 

See Note 3.4, column 1 for an analysis of the transition from French GAAP to IFRS 

Non-current provisions (380) 

Reclassification of provisions to current liabilities (436) 

(normal business cycle) to comply with IFRS 

Net additions to provisions to comply with IFRS (employee benefits, 

deferred tax liabilities, etc.) 56 

Non-current debt (927) 

Reclassification of current portion of debt (984) 

Reclassification from “Other equity” 167 

(primarily Bouygues Telecom participating loans) 

Other items, net (securitisation, finance leases) (110) 

Other current liabilities (615) 

Reclassification of current provisions 436 

Restatements related to property activities (936) 

(matching reduction in “Other current assets”) 

Other items (TF1 rights, matching entry in current assets) (115) 

Current financial liabilities 1,224 

Reclassification of the current portion of debt 984 

Securitisation and hedging instruments, net 186 

Other items (finance leases, etc.) 54 

166

3.2. December 2004: financial statements published in the 2004 

Annual Report under French GAAP 


(French GAAP - in millions of euros) 

2004 

net 

ASSETS 

Intangible fixed assets 5,634 6,409 

Goodwill 192 264 

Tangible fixed assets 4,205 4,532 

Long-term investments (1) 

Non-consolidated subsidiaries and affiliates 126 145 

Equity-method subsidiaries and affiliates 474 472 

Other 122 161 

FIXED ASSETS 10,753 11,983 

Inventories 1,208 1,181 

Programmes and broadcasting rights 535 693 

Advances and payments on account 369 105 

Trade receivables (2) 5,659 5,972 

Other receivables, prepaid expenses & similar items (2) (3) 3,085 2,519 

Short-term investment securities 2,810 2,144 

Cash and equivalents 446 472 


2003 

net 


(1) of which due in less than one year 5 3 

(2) of which due in more than one year 407 750 

(3) 12/2004: of which receivable from PAI partners on sale of Saur shares 1,031 

LIABILITIES AND SHAREHOLDERS’ EQUITY 

Authorised capital 333 333 

Premiums, reserves & consolidated earnings (4) 3,745 4,867 

Translation reserve (95) (69) 

Treasury stock 

SHAREHOLDERS’ EQUITY (attributable to the Group) (8) 3,983 5,131 


TOTAL SHAREHOLDERS’ EQUITY 4,947 6,025 

Other equity 140 167 

SHAREHOLDERS’ EQUITY AND OTHER EQUITY 5,087 6,192 

PROVISIONS FOR LIABILITIES AND CHARGES 1,866 1,896 

FINANCIAL LIABILITIES (5) 4,686 5,160 

PROGRESS PAYMENTS RECEIVED 480 576 


Other non-financial liabilities, accrued income and similar items (7) 7,289 5,658 

NON-FINANCIAL LIABILITIES (6) 12,496 11,003 

Short-term bank borrowings 250 242 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 24,865 25,069 

(4) of which net earnings for the year (attributable to the Group) 858 450 

(5) of which due in less than one year 241 1,178 

(6) of which due in more than one year 223 303 

(7)(8) 12/2004: of which exceptional payout to be made on 7 January 2005 1,664 



2004 2003 

SALES (1) 23,402 21,822 

Other operating income 1,114 1,104 

Purchases and changes in inventories (5,206) (4,888) 



External charges and other operating expenses (11,153) (10,431) 

Net depreciation, amortisation and provisions (1,322) (1,339) 

Share in earnings of unincorporated joint ventures 51 58 

OPERATING INCOME 1,547 1,238 

Net financial items (165) (219) 

EARNINGS BEFORE TAX AND EXCEPTIONAL ITEMS 1,382 1,019 

Net exceptional items 209 (14) 

Income tax (519) (380) 

NET EARNINGS OF CONSOLIDATED COMPANIES 1,072 625 

Share in earnings of companies accounted for by the equity method 42 43 

NET EARNINGS BEFORE MINORITY INTERESTS AND 

AMORTISATION OF GOODWILL 

1,114 668 

Amortisation of goodwill (55) (42) 

NET EARNINGS BEFORE MINORITY INTERESTS 1,059 626 

Minority interests (201) (159) 

Share in earnings acquired from minority interests (17) 

NET EARNINGS (attributable to the Group) 858 450 

Earnings per share (in euros) 2.57 1.34 

Diluted earnings per share (in euros) 2.53 1.28 

(1) of which sales generated outside France 6,370 6,110 


167

CONSOLIDATED CASH FLOW STATEMENT 


2004 2003 

2004 2003 

A - OPERATING ACTIVITIES 

Cash flow from operations 2,267 2,073 

Net earnings of consolidated companies (1) 1,045 611 

Depreciation, amortisation and provisions on fixed assets 1,234 1,255 

Net change in provisions and deferred taxes 367 264 

Expenses to be amortised over several periods (gross) (6) (4) 

Net gain (loss) on disposals of assets and other items (373) (53) 

Change in working capital requirement 423 239 

Current assets, prepaid expenses and similar items (137) (236) 

Net progress payments received, non-financial liabilities and other items 560 475 

NET CASH FROM OPERATING ACTIVITIES 2,690 2,312 

B - INVESTING ACTIVITIES 

Increase in fixed assets: (1,601) (2,250) 

Acquisitions of intangible and tangible fixed assets (1,263) (1,133) 

Acquisitions of participating interests (338) (1,117) 

Decrease in fixed assets: 1,371 677 

Disposals of intangible and tangible fixed assets 177 203 

Disposals of participating interests 1,194 474 

C - FINANCING ACTIVITIES 

Decrease in shareholders’ equity and other equity (1,748) (248) 

Exceptional payout to be made in 2005 1,664 

Dividends paid during the year (258) (213) 

Net change in financial liabilities (464) 558 

NET CASH FROM (USED FOR) FINANCING ACTIVITIES (806) 97 

D - NET IMPACT OF EXCHANGE RATE MOVEMENTS (7) (19) 

CHANGE IN CASH AND EQUIVALENTS (A + B + C + D) 635 737 

Cash and equivalents at 1 January (2) 2,374 1,624 

Net flows during the year 635 737 

Other non-monetary movements (3) (3) 13 

CASH AND EQUIVALENTS AT 31 DECEMBER (2) 3,006 2,374 

(1) net earnings of consolidated companies after amortisation of goodwill, including dividend received from companies accounted for by 

the equity method 

(2) cash plus marketable securities less short-term bank borrowings 

(3) transfers between line items 

Net investment: (230) (1,573) 

Net change in other long-term investments (18) (4) 

Receivables on Saur disposal (1,031) 

Net change in liabilities relating to fixed assets 115 (91) 

Impact from changes in scope of consolidation (78) 15 

NET CASH USED FOR INVESTING ACTIVITIES (1,242) (1,653) 

168

3.3. 31 December 2004: comparative French GAAP and IFRS 

balance sheets (as shown in the transition document published on 

the bouygues.com website in June 2005) 

BALANCE SHEET 

(in millions of euros) 


French 

IFRS 

GAAP 

ASSETS 

Tangible fixed assets 4,629 4,205 

Intangible fixed assets 1,020 5,634 

Goodwill 4,540 192 

Non-current financial assets 1,292 722 

Current assets 9,144 10,856 

Cash and equivalents 3,260 3,256 

Financial instruments (1) 48 

Other current financial assets 15 

Total 23,948 24,865 


Shareholders’ equity attributable to the Group 3,998 3,983 


Other equity 140 

Total shareholders’ equity 4,978 5,087 

Long-term debt 4,648 4,686 (2) 

Non-current provisions 1,176 1,866 (3) 

Other non-current liabilities 158 

Debt (maturing within one year) 242 

Current liabilities 12,449 12,976 

Short-term bank borrowings 252 250 

Financial instruments (1) 41 

Other current financial liabilities 4 

Total 23,948 24,865 

Net debt 1,875 1,680 

Gearing 38% 33% 

(1) on fair-value hedges of financial liabilities 

(2) French GAAP: all financial liabilities 

(3) French GAAP: all provisions for liabilities and charges 

31 December 2004: comments on the main changes between the two sets of 

standards 

ASSETS 

in millions of euros 

Tangible fixed assets 424 

The increase under IFRS is due mainly to the reclassification of intangible fixed assets 

(telecom software, etc) (+250), the capitalisation of leased equipment (+83), and 

restatements on building and equipment depreciation periods and components (+110). 

Intangible fixed assets (4,614) 

The reduction is due mainly due reclassifications of fair value adjustments (market share) 

as goodwill. 

Goodwill 4,348 

Reclassifications from fair value adjustments of intangibles now recorded in goodwill 

(market shares, etc.) 

Other non-current assets 570 

This heading includes deferred tax assets (DTA) included in “Other current assets” 

under French GAAP for the net amount of 570 at 31 December 2004. 

Other current assets (1,712) 

Reclassification of DTA as “Other non-current assets” in the net amount of (570). 

Restatement of property receivables for off-plan sales (VEFA) in the amount of 

(1,095) (Matching reduction in “Other current liabilities”). 


Assets 48 

Liabilities 41 

This item relates to debt hedging instruments estimated at fair value. 

The change recorded is allocated either to income for the period or to consolidated 

shareholders’ equity, depending on the nature of the financial assets and liabilities. 


Shareholders’ equity (109) 

Including +15 for Group share; see above table providing detailed analysis of the transition 

as of 31 December 2004. 

Shareholders’ equity under French GAAP at 31 December 2004: 5,087 

Group share 3,983 

Provisions for employee benefits (IAS 19) (52) 

Tangible (IAS 16) and intangible (IAS 38) fixed assets 

(analysis by component/depreciation and amortisation periods / depreciable 15 

costs, etc.) and asset impairment (IAS 36) 

Straight-line goodwill amortisation (attributable to the Group) 23 

15 

Net deferred taxes on IFRS restatements (IAS 12) 19 

Additional restatements for gain on disposal of Saur (deconsolidation) 21 

Other (1) (11) 

Sub-total - Group share 3,998 

Minority interests’ share / other equity 1,104 

Reclassification as non-current financial liabilities of minority interests on 

Bouygues Telecom participating loans (and other shareholders’ equity) (140) 

Other restatements on minority interests 16 

Sub-total - Minority interests 980 

(124) 

Shareholders’ equity under IFRS at 31 December 2004: 4,978 

(1) including changes in fair value of financial instruments and miscellaneous restatements 

Non-current provisions (690) 

The reduction is due mainly to the reclassification into current provisions of provisions in 

connection with the normal operating cycle in the amount of 540 million euros. 

Non-current debt (38) 

The small change is due mainly to the reclassification of the amount due within one year as 

current liabilities. 

Other non-current liabilities 158 

This heading now includes deferred tax liabilities. 

Current liabilities (527) 

Small net change 

Of which: - reclassification of current provisions 540 

- restatements for Group property business (See “Other current assets”) (1,095) 


169

3.4. 31 December 2004: transition from French GAAP to IFRS on shareholders’ equity 

(in millions of euros) 01/01/04 

Capital 

increase 

Treasury shares 

Conversion 

reserve 

Other 

movements 

Income 31/12/04 

Shareholders’ equity - Group share 

under French GAAP (1) 5,058 356 (414) (26) (1,849) (2) 858 3,983 

Treasury shares under Bouygues SA liquidity agreement (1) (1) 

Net tangible and intangible fixed assets depreciation / (1) 16 15 

amortisation period / basis and deferred charges (IAS 2 / 16 / 38) 

Provisions for employee benefits (IAS 19) (52) (52) (7) 

Net deferred tax on IFRS restatements (IAS 12) 20 (1) 19 

Share-based payments 7 (7) 

Goodwill 23 (5) 23 

IFRS supplement on Saur disposal 21 (6) 21 

Other restatements and reclassifications (11) 11 (9) (4) (1) (10) 

Shareholders’ equity under IFRS 5,014 356 (415) (15) (1,851) 909 3,998 

Minority interests (and other equity) 

under French GAAP 

Reclassification as non-current financial 

liabilities of minority interests on 

participating loans and other equity 

1,046 5 2 (150) (3) 201 1,104 

(167) 27 (140) 

964 

140 

Other 11 5 16 

Minority interests under IFRS 890 5 2 (123) 206 980 

Total shareholders’ equity under French GAAP 6,104 361 (414) (24) (1,999) 1,059 5,087 

Total shareholders’ equity under IFRS 5,904 361 (415) (13) (1,974) 1,115 4,978 

(109) 

(1) French GAAP at 1 January 2004 after restatement for change in method for customer loyalty provision (Bouygues Telecom), created at end 2004 under French GAAP (maintained under IFRS) 

(2) of which: dividend paid by Bouygues SA: (164), exceptional payout to be made on 7 January 2005: (1,664) 

(3) of which: dividends distributed by minority shareholders: (94) 

(4) of which: change in fair value of financial instruments and other 

(5) cancellation of straight-line goodwill amortisation: 100%: 28; o/w Group share: 23 

(6) supplement due to effect of deconsolidating Saur under IFRS: 100% = 25, o/w Group share: 21 

(7) resettting of actuarial gains and losses (corridor) to zero and various adjustments to conform to IAS 19 (LT employee benefits) 

170

3.5. 31 December 2004: transition of income statement (French GAAP to IFRS) 

INCOME STATEMENT 


12/2004 

French 

GAAP 

IFRS / 

restatements/ 

Income 

Disposal 

of Saur (1) 

Other 

IFRS 

reclassifications 

12/2004 

IFRS 

Sales 23,402 (2,176) 16 21,242 

Other revenues 1,114 (35) (938) 141 

Taxes other than income tax (512) 43 (7) (476) 

Personnel costs (4,827) (9) Share-based payments: (9) (2) 452 (26) (4,410) 

Purchases and changes in inventories/external charges/other operating expenses (16,359) 16,359 

Purchases used in production 3 670 (9,813) (9,140) 

External charges (3) Finance leases: (2) 1,004 (5,644) (4,643) 

Change in inventories used in production and property development (13) (13) 

Other operating income and expenses 5 (3) (328) 597 274 

Depreciation, amortisation and provisions (1,322) 14 (4) 138 (246) (1,416) 

Share in earnings of unincorporated joint ventures 51 (51) 

Operating profit 1,547 

IFRS restatements and reclassifications 10 (232) 234 

Current operating profit 1,547 10 (232) 234 1,559 

Financial income and expenses (165) 17 148 

Cost of net debt (3) 

Mainly including liabilities 

related to finance leases 

2 (161) (162) 

Other financial income and expenses (3) (29) (32) 

Exceptional income and expenses 209 (209) 

Income tax (519) (1) 18 2 (500) 

Share of income in affiliated companies 42 (3) (2) 37 

Goodwill amortisation (55) 28 

Cancellation of straight-line 

goodwill amortisation 

12 15 (5) 

Net profit of discontinued and held-for-sale operations (Saur) 25 IFRS impact with Saur deconsolidated 188 213 

Net earnings 1,059 56 1,115 

Group share 858 51 909 

Minority interests’ share 201 5 206 

(1) elimination of the impact of the operations of Saur (sold in December 2004) and Infomobile (sold in August 2004) and reclassification 

of net income from disposal under the IFRS heading “Net profit of discontinued and held-for-sale operations”. 

(2) stock option plans issued after 7 November 2002 

(3) of which: - finance leases: 40 (IAS 17) 

- inclusion of change in depreciation and amortisation in residual book value: (27) (IAS 16) 

(4) of which : - cancellation of deferred charges: 9 (IAS 38) 

- inclusion of finance leases: (34) (IAS 17) 

- restatement for asset amortisation period and basis: 37 (IAS 16) 

(5) to be reclassified as operating income 

The +51 change under IFRS can be summarised as follows: 

Net profit - Group share under French GAAP, year to 31 December 2004 858 

No straight-line amortisation of goodwill under IFRS (excluding Saur) 23 

Stock options: charge created for share-based payments under stock option plans at 

Bouygues SA and TF1 (IFRS 2) (7) 

Restatement of depreciation charges on buildings, equipment 16 

(components/periods, etc.) and depreciable expenses 

Additional IFRS restatement of gain on the disposal of Saur at end 2004, after resetting 21 

negative translation reserves to zero as of 1 January 2004 (IFRS 1) 

Other IFRS restatements (of which net deferred tax = (1)) (2) 

Net profit attributable to the Group under IFRS, year to 31 December 2004 909 


171

3.6. 2004 Consolidated cash flow statement 

(In millions of euros) 

IFRS (1) 

Year 2004 

French 

GAAP (2) 

Net cash generated from operating activities 

Cash flow after cost of net debt and income taxes 2,052 2,267 

Cost of net debt and tax expense 662 

Cash flow before cost of net debt and tax expense 2,714 

Other cash flows relating to working capital requirement 35 423 

Net cash generated from operating activities 2,749 2,690 

Net cash used in investing activities 

Net acquisitions of tangible and intangible fixed assets (1,047) 

Net acquisitions of consolidated investments and other 822 

(230) 

Receivables on Saur disposal (1,031) (1,031) 

Other cash flow from investing activities 119 19 

Cash flow used in investing activities (1,137) (1,242) 

Net cash used in financing activities 

Shareholders’ equity (1,720) (1,748) 

Dividends paid (258) (258) 

Exceptional payout 1,664 1,664 

Cash used for financial liabilities (270) 

Cost of net debt (162) (464) 

Other cash from financing activities (93) 

Net cash used in financing activities (839) (806) 

Effect of changes in exchange rates (8) (7) 

Change in cash position 765 635 

Cash position at 1 January 2,250 2,374 

Changes during 2004 758 632 

Cash at 31 December 3,008 3,006 

NOTE 4: NON-CURRENT ASSETS 11,444 

An analysis of non-current assets by business segment is provided in Note 17. 

4.1 Summary of net investments for the period 

(operating and financing) 

(In millions of euros) 2005 2004 

Acquisitions of property, plant and equipment 1,198 1,106 

Acquisitions of intangible assets 173 115 

Investments in operating assets 1,371 1,221 

Non-current financial assets (investments in consolidated 

and non-consolidated companies, other long-term investments) 333 338 

Investments in financial assets 1,704 1,559 

Disposals of non-current assets (225) (1,334) 

Net investment 1,479 225 

(1) presentation in accordance with the CNC recommendation dated 27 October 2004 

(2) comparative presentation of cash flow statement under French GAAP, in accordance with possible concordance under IFRS 

The 2004 cash flows shown in the IFRS cash flow statement exclude the cash flow of Saur, which was 

sold at the end of 2004. 

Net cash generated by operating activities 59 

Most of the net increase between the two sets of standards comes from the additional net 

profit under IFRS (+51) that affects cash flow 

Net cash used in investing activities 105 

The change is mainly due to the deconsolidation of Saur cash flow under IFRS 2 (+122) 

Net cash used in financing activities (33) 

The change is due to the deconsolidation of Saur and to IFRS restatements 

172

4.2. Movements during the period 4,615 

4.2.1. Property, plant and equipment 

Gross value 

Land and 

buildings 

Industrial plant 

and equipment 

Other property, plant 

and equipment 

PP&E under construction 

and advance payments 

Total 

1 January 2004 1,495 6,708 1,837 130 10,170 

Translation adjustment (5) (32) (10) (1) (48) 

Transfers and other movements 44 (21) 61 (90) (6) 

Changes in scope of consolidation (165) (77) (237) 1 (478) 

Acquisitions and other increases 41 685 237 143 1,106 

Disposals and other reductions (60) (325) (115) (7) (507) 

31 December 2004 1,350 6,938 1,773 176 10,237 

of which finance leases 47 55 230 332 

MOVEMENTS DURING 2005 

Translation adjustment 30 95 29 154 

Transfers and other movements 12 83 (202) (116) (223) 

Changes in scope of consolidation (30) (49) 21 (6) (64) 

Acquisitions and other increases (1) 64 807 225 102 1,198 

Disposals and other reductions (13) (424) (145) (4) (586) 

31 December 2005 1,413 7,450 1,701 152 10,716 


Depreciation and impairment 

1 January 2004 (447) (3,530) (1,173) (5,150) 


Transfers and other movements 4 39 (36) 7 

Changes in scope of consolidation 57 31 140 228 

Disposals and other reductions 14 239 99 352 

Net depreciation expense (55) (763) (253) (1,071) 

Impairment losses recognised (1) (1) 

Impairment losses reversed 

31 December 2004 (426) (3,965) (1,217) (5,608) 

of which finance leases (20) (28) (131) (179) 


Translation adjustment (7) (60) (18) (85) 

Transfers and other movements (2) 1 181 180 



Net depreciation expense (46) (796) (231) (1,073) 

Impairment losses recognised 

Impairment losses reversed 

31 December 2005 (464) (4,475) (1,162) (6,101) 

of which finance leases (10) (38) (110) (158) 

Net 

(2) 

Total 

31 December 2004 924 2,973 556 176 4,629 


31 December 2005 949 2,975 539 152 4,615 


Total 

(1) including Bouygues Telecom: Network investments of 506 million (10% higher than in 2004) 

(2) including Bouygues Telecom: gross value of fully-depreciated property, plant and equipment still in use: 661 million (network equipment 

and installations) 

Analyses of the carrying amount of intangible assets and property, plant & equipment, and of investment 

in operating assets, by business segment and geographical area are provided in Note 17, “Segment 

Information”. 


173

4.2.2. Intangible assets 1,056 

Gross value 

Development 

expenses 

Concessions, patents and 

similar rights (1) 

Other intangible 

assets 

Total 

1 January 2004 5 1,046 1,029 2,080 


Transfers and other movements 0 0 (93) (93) 

Changes in scope of consolidation 0 4 (67) (63) 

Acquisitions and other increases 1 53 61 115 

Disposals and other reductions 0 (6) (31) (37) 

31 December 2004 6 1,098 899 2,003 



Transfers and other movements 0 (17) (10) (27) 

Changes in scope of consolidation (7) (7) 35 21 

Acquisitions and other increases 1 46 124 171 

Disposals and other reductions 0 (10) (4) (14) 

31 December 2005 0 1,110 1,047 2,157 

Amortisation and impairment 

1 January 2004 (2) (200) (790) (992) 

Translation adjustment 0 (1) 0 (1) 

Transfers and other movements 0 1 14 15 



Net amortisation expense (2) (56) (62) (120) 

Impairment losses recognised 0 0 0 0 

Impairment losses reversed 0 0 0 0 

31 December 2004 (4) (250) (729) (983) 

MOVEMENTS IN 2005 

Translation adjustment 0 0 (1) (1) 

Transfers and other movements 0 14 3 17 

Changes in scope of consolidation 4 8 (13) (1) 


Net amortisation expense 0 (83) (61) (144) 

Impairment losses recognised 0 0 0 0 

Impairment losses reversed 0 0 0 0 

31 December 2005 0 (303) (798) (1,101) 

Carrying amount Total 

31 December 2004 2 848 170 1,020 

31 December 2005 0 807 249 1,056 

(1) includes Bouygues Telecom UMTS licence: 619 

UMTS licence 

The fee for the UMTS licence, awarded for a 20-year period, comprises: 

• a fixed component of 619 million euros, recognised as an intangible asset on the date the licence was 

awarded (12 December 2002). 

• a variable component, calculated at 1% of sales generated by the operation of the third-generation mobile 

network, which is recognised in the income statement for the period with effect from the opening of the 

UMTS network. 

The UMTS licence is amortised over its useful life. Bouygues Telecom began to amortise the licence on 

26 May 2005, when the UMTS network opened. 

Total 

174

4.2.3. Goodwill 4,618 

■ Movement in carrying amount of goodwill 

Gross value Impairment Carrying amount 

1 January 2004 5,272 5,272 

Changes in scope of consolidation (735) 2 (733) 

Impairment losses (17) (17) 

Other movements 19 (1) 18 

31 December 2004 4,556 (16) 4,540 


Changes in scope of consolidation 500 (1) 500 

Impairment losses (7) (7) 

Other movements (415) (2) (415) 

31 December 2005 4,641 (23) 4,618 

(1) includes 320 million euros relating to the option to buy 6.5% of Bouygues Telecom 

(2) includes (420) million euros relating to TPS, in process of divestment, reclassified as “Held-for-sale assets” 

■ Split of goodwill by cash generating unit (CGU) 

As mentioned in Note 2, CGUs are equivalent to business segments within the Bouygues Group. 

Segment 31 December 2005 31 December 2004 

Total % of parent Total % of parent 

Bouygues Construction 106 99.97% 76 99.97% 

Colas 805 96.42% 726 96.27% 

TF1 1,047 42.93% 1,393 41.50% 

Bouygues Telecom 2,655 89.55% 2,335 83.05% 

Other activities 5 10 

Total Bouygues 4,618 4,540 

■ Consolidated purchase price of listed shares (TF1 and Colas) 

Consolidated purchase 

price per share (1) 

Average quoted share price 

at 31 December 2005 (2) 

TF1 10.37 22.92 

Colas 65.34 143.92 

4.2.4. Non-current financial assets 780 

(1) includes goodwill relating to associates: 138 

Gross value 

Other non-current assets Total 

Associates (1) gross 

Investments in 

Other noncurrent 

assets 

value 

non-consolidated 

companies 

Impairment 

Carrying 

amount 

1 January 2004 479 267 185 931 (166) 765 

Translation adjustment (2) 0 (2) (4) 0 (4) 

Transfers and 

other movements 0 0 0 0 5 5 

Changes in scope of 

consolidation (16) (69) (18) (103) 4 (99) 

Acquisitions and other 

increases 27 53 45 125 0 125 

Disposals and other 

reductions 0 (28) (62) (90) 0 (90) 

Net impairment 

reversals / (losses) 

21 21 

31 December 2004 488 223 148 859 (136) 723 


Translation adjustment 4 0 3 7 0 7 

Transfers and other 

movements (17) 21 (7) (3) 1 (2) 

Changes in scope of 

consolidation (12) (10) 1 (21) (11) (32) 

Acquisitions and other 

increases 36 6 94 136 0 136 

Disposals and other 

reductions 0 (29) (33) (62) 0 (62) 

Net impairment 

reversals / (losses) 

10 10 

31 December 2005 499 211 206 916 (136) 780 

(1) carrying amount per share in the consolidated financial statements 

(2) average of quoted share prices between 1 December 2005 and 31 December 2005 

Impairment tests were carried out as described in Note 1, and did not indicate any material impairment of 

intangible assets or goodwill attached to the Group’s CGUs (business segments). 


175

■ Investments in associates 497 

Share of net 

assets held 

Net goodwill 

relating to 

associates (1) 

Carrying 

amount 

1 January 2004 330 149 479 

Translation adjustment (2) 0 (2) 

Transfers and other movements 0 0 0 

Changes in scope of consolidation (3) (13) (16) 

Acquisitions and other increases 25 0 25 

Disposals and other reductions 0 0 0 

Net impairment reversals / (losses) 0 

31 December 2004 350 136 486 


Translation adjustment 4 0 4 

Transfers and other movements (17) 0 (17) 

Changes in scope of consolidation (12) 0 (12) 

Acquisitions and other increases 2 0 2 

Disposals and other reductions 34 0 34 

Net impairment reversals / (losses) 0 

31 December 2005 361 136 497 

(1) includes impairment of (2) 

The Bouygues Group owns a number of interests in associates, which are listed in Note 26 

(Detailed List of Consolidated Companies at 31 December 2005). 

Movements in the carrying amount of investments in associates during 2005 

31/12/2004 

Net movement 

in 2005 (1) 31/12/2005 

Of which: share 

of net profit 

Construction 

Stade de France 12 1 13 3 

Other public works concession 

companies 35 4 39 2 

Other associates 10 10 14 

Roads 

Cofiroute 349 20 369 46 

Tipco Asphalt 9 8 17 1 

Other associates 11 (2) 9 2 

Media 45 (5) 40 (6) 

Bouygues SA and other associates 

Novasaur (2) 21 (21) 

Other associates 4 (4) 

Total 486 11 497 62 

(1) including share of net profit for the year, acquisitions, changes in scope of consolidation, translation adjustments, 

dividend payments and capital increases 

(2) Novasaur: deconsolidated in 2005 after divestment of a 5.12% interest 

Summary information about the assets, liabilities, income and expenses of the principal associates of the 

Bouygues Group is provided below. 

Amounts shown are for 

100% of the associate 

Cofiroute 


Alis 

Stade 

de France 

Non-current assets 4,421 895 369 

Current assets 594 65 77 

Total assets 5,015 960 446 

Shareholders’ equity 1,428 (4) 39 

Non-current liabilities 3,107 946 337 

Current liabilities 480 18 70 

Total liabilities and equity 5,015 960 446 

Sales 900 4 72 

Operating profit 465 NS 18 

Net profit 276 (6) 9 

Amounts shown are for 

100% of the associate 


Cofiroute Alis (1) Stade 

de France 

Non-current assets 3,393 715 371 

Current assets 793 94 64 

Total assets 4,186 809 435 

Shareholders’ equity 1,256 (1) 36 

Non-current liabilities 775 773 354 

Current liabilities 2,155 37 45 

Total liabilities and equity 4,186 809 435 

Sales 895 - 74 

Operating profit 458 - 18 

Net profit 260 - 9 

(1) operation of the A28 motorway started in 2005 

176

4.2.5. Other non-current financial assets 283 

4.2.5.1. Carrying amount of principal investments in non-consolidated companies at 31 December 2005 

Investment 

Gross 

value 

Impairment 

Carrying 

amount 

31/12/2005 31/12/2004 

interest Total assets (2) liabilities 

Total current 

% 

& non-current 

Total 

sales 

Net 

profit 

Carrying 

amount 

French companies 

CATC (2) 2 2 99.8% 2 - - - 10 

Foncière du point du jour (2) 10 (7) 3 100.0% 3 - - - 3 

Périphérique de Lyon (2) 9 (8) 1 38.7% 4 - - - 1 

Sylver (2) 4 4 49.0% 9 5 14 3 4 

Novasaur 36 (1) 36 9.9% 3 3 1 - 30 

Asphalt & binder companies (Colas) (3) 19 (2) 17 - - - - 21 

Other investments in French companies 31 (13) 18 - - - - 14 

Sub-total 111 (30) 81 21 8 15 3 83 

Foreign companies 

Socoprim (Côte d’Ivoire) (2) 14 14 66.3% 22 1 - 14 

Ma Chang (South Korea) (2) 7 7 44.0% 42 28 (1) 6 

CCIB (Romania) (2) 6 (6) 0 22.0% - - - - 

VSL corporation (USA) (2) 22 (22) 0 100.0% 1 (1) 

Asphalt & binder companies (Colas) 2 (1) 1 - - - - 1 

Other investments in foreign companies 49 (38) 11 - - - - 12 

Sub-total 100 (67) 33 64 30 0 (2) 33 

Total 211 (97) 114 85 38 15 1 116 

(1) carrying amount after divestment of a 5.12% interest in 2005 and deconsolidation of the remaining 9.88% interest 

(2) Although Bouygues has an interest of more than 20% in these companies, they are not consolidated because their potential contribution to the consolidated financial statements is not material. 

(3) The information provided for Colas asphalt & binder companies and other investments in French and foreign companies covers a number of companies, about which individual information is not disclosed. 


177

4.2.5.2. Other non-current financial assets 169 

The main items included in this heading are: 

• Advances to non-consolidated companies 45 

• Non-current loans and receivables 45 

• Other long-term investments: 79 

comprising: 

- Deposits and caution money 67 

- Other long-term investment securities 12 

Main components of “Other long-term investment securities” 

Miscellaneous mutual funds 6 

Other investments individually less than 2 million euros 6 

Analysis of investments in non-consolidated companies and other non-current financial assets 

(excluding associates) by type 283 

Availablefor-sale 

financial 

assets 

Loans and 

receivables 

Financial 

assets at fair 

value through 

profit or loss 

Held-tomaturity 

financial 

assets 

31 December 2004 63 51 4 119 237 

Movements during 2005 35 48 1 (38) 46 

31 December 2005 98 99 5 81 283 

Due within less than 1 year 6 5 1 2 14 

Due within 1-5 years 6 39 3 2 50 

Due after more than 5 years 86 55 1 77 219 

Investments in joint ventures 

The Bouygues Group holds a number of interests in joint ventures, which are listed in Note 26 (Detailed List 

of Consolidated Companies at 31 December 2005). 

Aggregate amounts for assets / liabilities and sales are provided in the table below: 

Bouygues share 31/12/2005 31/12/2004 

Total assets / liabilities 763 626 

Sales 918 755 

4.3. Non-current tax assets 375 

See Note 8 for details. 

Total 

NOTE 5: CURRENT ASSETS 12,590 

5.1. Inventories 1,804 

Inventories 

Inventories: raw materials, 

supplies, finished goods 

and property development 

inventories 

Gross value 

31/12/2005 31/12/2004 

Impairment 

Carrying 

amount 

Gross value Impairment Carrying 

amount 

1,368 (75) 1,293 1,274 (118) 1,156 

Programmes and 

broadcasting rights (TF1) (1) 655 (144) 511 659 (124) 535 

Total 2,023 (219) 1,804 1,933 (242) 1,691 

Impairment 

of inventories 

(a) includes reversals of impairment losses on property development inventories (Bouygues Immobilier): 22 

(1) TF1: the maturities of broadcasting and transmission rights contracts entered into by TF1 to secure future programming schedules are as 

follows: 

within less 

than 1 year 

Charges 

Maturity 

within 

1-5 years 

after more 

than 5 years 

Reversals 

31/12/2005 31/12/2004 31/12/2005 31/12/2004 

Inventories: raw materials, supplies, 

finished goods and property 

development inventories (34) (47) 40 (a) 44 

Programmes and broadcasting 

rights (TF1) 

(76) (34) 55 30 

Total (110) (81) 95 74 

Total 

2005 

Total 

2004 

• Programmes and broadcasting 

rights (1) (2) 491 850 292 1,633 1,025 

• Sports transmission rights (3) 212 457 271 940 494 

Total 703 1,307 563 2,573 1,519 

(1) From 2005 onwards, this includes output deal contracts entered into by TF1 SA. 

Some of these contracts are denominated in foreign currencies (30 million euros in CHF, 89 million euros in GBP and 418 million euros 

in USD). 

(2) programmes and broadcasting rights: these relate primarily to TF1 SA (1,277 million euros) and TPS (236 million euros). 

(3) sports transmission rights: these relate to TF1 SA (609 million euros), Eurosport (314 million euros) and TPS (17 million euros). 

178

5.2. Advances and down-payments on orders 357 

5.5. Cash and equivalents 3,215 

31/12/2005 31/12/2004 

Gross 

value 

Gross 

Carrying 

Impairment 

value amount 

Impairment Carrying 

amount 

Advances and down-payments on orders 360 (3) 357 369 0 369 

5.3 Trade receivables, tax assets, other receivables 

and prepaid expenses 7,173 

31/12/2005 31/12/2004 

Gross 

value Impairment Carrying 

amount 

Gross 

value 

Impairment 

Carrying 

amount 

Trade receivables 

(including unbilled receivables) 5,759 (341) 5,418 4,896 (321) 4,575 

Current tax assets 

(tax receivable) 73 (2) 71 45 45 

Other receivables 

and prepaid expenses : 

Other operating receivables 

(employees, social security, 

government & other) 1,148 (20) 1,128 997 (25) 972 

Sundry receivables 495 (89) 406 1,474 (1) (123) 1,351 

Prepaid expenses 150 150 141 141 

Total 7,625 (452) 7,173 7,553 (469) 7,084 

(1) includes receivable from PAI partners on sale of Saur: 1,031 

5.4. Financial instruments (assets) 41 

See Note 18, Financial Instruments. 

Cash and equivalents 

Gross 

value 

31/12/2005 31/12/2004 

Impairment 

Carrying Gross 

amount value 

Impairment 

Carrying 

amount 

Cash 618 618 442 442 

Short-term investment securities 2,609 (12) 2,597 (1) 2,829 (11) 2,818 

Total 3,227 (12) 3,215 3,271 (11) 3,260 

As at 31 December 2005, the realisable value of short-term investment securities was greater than their 

carrying amount. 

Investments are placed with high-quality French and foreign banks. 

Cash and equivalents can be easily converted into cash. 

(1) Short-term investment securities are mainly classified as available-for-sale. 

Net cash and equivalents as shown in the cash flow statement comprise the following items at 31 December 

2005: 

31/12/2005 31/12/2004 

Cash 618 442 

Short-term investment securities 2,597 2,818 

Sub-total 3,215 3,260 

Overdrafts and short-term bank borrowings (178) (252) 

Sub-total (178) (252) 

Total 3,037 3,008 

Split by currency 


Euro 

Pound 

sterling 

Swiss 

franc 

Other 

European 

currencies 

US 

dollar 

Other 

Cash 351 22 29 70 27 119 618 

Short-term investment securities 2,579 2 16 2,597 


Overdrafts and short-term bank 

borrowings (35) (51) (1) (91) (178) 

Total 2005 2,895 22 31 19 26 44 3,037 

Total 

Total 2004 2,880 22 31 29 26 20 3,008 


179

NOTE 6: CONSOLIDATED SHAREHOLDERS’ EQUITY 

6.1. Share capital of Bouygues SA 

(in euros) €336,762,896 

As at 31 December 2005, the share capital of Bouygues SA consisted of 336,289,029 shares and 473,867 

investment certificates. Movements in the year ended 31 December 2005 were as follows: 

Movements during 2005 

1 January 2005 Reductions Increases 31 December 2005 

Shares 332,254,414 (8,361,649) 12,396,264 336,289,029 

Investment certificates 504,210 (30,343) 473,867 

Number of shares / certificates 332,758,624 (8,391,992) 12,396,264 336,762,896 

Par value (in euros) €1 €1 

Share capital (in euros) 332,758,624 (8,391,992) 12,396,264 336,762,896 

6.2. Statement of changes in shareholders’ equity for year ended 31 December 2005 

(Group & minority interests) 



Share 

capital 

Share 

premium 


to capital 

Retained 

earnings 

Consolidated 

reserves & profit 

for year 

Treasury 

shares 

Profits recognised 


Total 

31/12/2005 

Attributable to the Group 337 1,897 810 276 1,244 (5) 71 4,630 

Minority interests 926 5 931 

Total shareholders’ equity 337 1,897 810 276 2,170 (5) 76 5,561 

180

6.2.1. Attributable to the Group 


Share 

capital 

Share 

premium 


to capital 

Retained 

earnings 

Consolidated 


for year 

Treasury 

shares 

Profits 

recognised 


Total 

Group 

Position at 1 January 2004 333 1,977 712 43 1,940 9 5,014 

Movements 



Dividends (1,828) (1,828) 

Net profit for the year attributable to the Group 909 909 


Translation adjustments (15) (15) 


Position at 31 December 2004 333 1,919 712 43 985 (1) 7 3,998 

Change of accounting method 

Adjusted position at 31 December 2004 333 1,919 712 43 985 (1) 7 3,998 

Movements 

Capital and reserves transactions, net 4 (22) 98 233 (331) (18) 

Share-based payment 7 32 39 


Minority interests in net profit for the year 832 832 

Financial instruments (9) (9) 



Position at 31 December 2005 337 1,897 810 276 1,244 (5) 71 4,630 


181

6.2.2. Minority interests 


Share 

capital 

Share 

premium 


to capital 

Retained 

earnings 

Consolidated 


for year 

Profits 

recognised 


Total: minority 

interests 

Position at 1 January 2004 890 890 

Movements 5 5 


Dividends 206 206 

Net profit for the period attributable to minority interests 


Translation adjustments 

Other movements (29) (29) 

Position at 31 December 2004 978 2 980 

Change of accounting method 

Adjusted position at 31 December 2004 978 2 980 

Movements 

Capital and reserves transactions, net 


Net profit for the period attributable to minority interests 206 206 



Change in scope of consolidation (170) (170) 

Other movements 3 3 


6.2.3. Analysis of movements in profits taken directly to equity during 2005 

(portion attributable to the Group) 

Note Year ended 31/12/2005 

Translation reserve 1 59 

Financial instruments (changes in fair value) 2 (9) 


Other movements 4 (18) 

Total 64 

1 - Translation reserve 

The translation reserve was deemed to be zero as at 1 January 2004 under IFRS, and hence includes only 

movements since that date. 

Principal translation differences at 31 December 2005 on foreign companies reporting in: 

31/12/2004 Movement in 2005 31/12/2005 

US dollar (16) 34 18 

Canadian dollar (1) 15 14 

Other 2 10 12 

Total (15) 59 44 

182

2 - Fair value remeasurement reserve 

Reserve arising on the remeasurement of financial instruments and available-for-sale financial assets at 

fair value 

NOTE 7: NON-CURRENT AND CURRENT PROVISIONS 

7.1. Non-current provisions = 1,265 

31/12/2004 Movement in 2005 31/12/2005 

Movement during the year 15 (9) 6 

Long-term 

employee 

benefits (1) 

Litigation 

and claims (2) 

Guarantees 

given (3) 

Other noncurrent 

provisions (4) 

Total 

3 - Share-based payment (IFRS 2) 

TF1 and Bouygues SA stock options 

31/12/2004 2005 31/12/2005 

• Transfer to reserves 7 (7) 2004 expense 

• 2005 expense: 

- TF1 2 2 

Portion attributable to 


- Bouygues SA 7 7 Based on plans granted since 

November 2002 

Consolidated expense 

Employee savings plan 

(Bouygues Confiance 3) 

Total 7 32 39 

9 9 (recognised in “Personnel 

costs”) 

30 30 Cost of benefit awarded to 

employees on 21 June 2005 

(discount to share price) 

1 January 2004 320 264 188 620 1,392 


Translation adjustment 

Transfers between items 10 (5) 3 17 25 

Changes in accounting method 

and scope of consolidation (34) (18) (2) (278) (332) 

Charges to provisions 45 91 83 171 390 

Provisions utilised (7) (43) (47) (89) (186) 

Provisions no longer required (3) (46) (10) (54) (113) 

31 December 2004 331 243 215 387 1 176 



Transfers between items 1 (19) (2) (19) (39) 

Changes in scope of consolidation 1 (1) (21) (21) 

Charges to provisions 67 141 75 103 386 

Provisions utilised (30) (28) (39) (66) (163) 

Provisions no longer required (3) (27) (18) (30) (78) 

31 December 2005 368 309 232 356 1,265 (5) 

4 - Other movements 

31/12/2005 

Call options on Bouygues SA shares (37) 

Other movements 19 

Total (18) 

(1) Long-term employee benefits 368 

Lump-sum retirement benefits 251 

Long-service awards 96 

Other long-term employee benefits 21 

(2) Litigation and claims 309 

Provisions for customer disputes 128 

Subcontractor claims 36 

Employee-related litigation and claims 21 

Other litigation and claims 124 

(3) Guarantees given 232 

Provisions for warranties 164 

Additional building, civil engineering / civil 

works guarantees 68 

(4) Other non-current provisions 356 

Risks related to tax and other 

official inspections 109 

Provisions for miscellaneous foreign risks 16 

Provisions for subsidiaries and associates 14 

Provisions for contractual obligations 9 

Provisions for site remediation costs 64 

Other non-current provisions 144 

(5) includes 46: fines for anti-competitive practices, 

Construction segment 


183

7.2. Current provisions = 676 

Provisions related to the operating cycle (see Note 2). 

Provisions 

for customer 

warranties 

Provisions 

for foreign 

exchange 

losses 

Provisions for 

project risks 

& project 

completion 

Provisions 

for losses to 

completion 

Provisions 

for customer 

loyalty 

programmes 

Other 

current 

provisions 

1 January 2004 23 5 148 73 136 156 541 


Translation adjustment (1) (1) 

Transfers between items (11) 1 (15) (25) 

Changes in accounting method and scope 

of consolidation 

1 (6) (5) 

Charges to provisions 15 74 49 11 81 230 

Provisions utilised (12) (1) (45) (41) (71) (170) 

Provisions no longer required (14) (7) (9) (30) 

31 December 2004 27 4 146 74 147 142 540 



Transfers between items 2 (10) 36 43 71 

Changes in scope of consolidation (1) (3) (13) (17) 

Charges to provisions 19 71 81 155 90 416 

Provisions utilised (15) (33) (27) (128) (59) (262) 

Provisions no longer required (2) (2) (22) (31) (21) (78) 

31 December 2005 31 2 153 (1) 132 (3) 174 184 (2) 676 

(1) including : 

- provisions for risks on completed projects: 77 

- provisions for final settlement on projects: 76 

Total 

NOTE 8: NON-CURRENT TAX 

ASSETS / LIABILITIES 375 / 89 

8.1. Non-current tax assets 

31/12/2004 Change 31/12/2005 

Deferred tax 

assets 

566 (191) 375 

• Bouygues 

Telecom (1) 426 (223) 203 

• Other segments 140 32 172 

Other non-current 

tax assets 3 (3) 0 

Total non-current 

tax assets 

569 (194) 375 

(1) Bouygues Telecom: Deferred tax assets on tax losses available for carryforward 

(mainly depreciation deferred for tax purposes), the recoverability 

of which is based upon profit forecasts for 2006 contained in the latest 

business plans presented to the Board of Directors. 

8.2. Non-current tax liabilities 

31/12/2004 Change 31/12/2005 

Deferred tax 

liabilities 158 (69) 89 

Other non-current 

tax liabilities 

Total non-current 

tax liabilities 158 (69) 89 

(2) including: 

- provisions for accident risk insurance costs: 48 

- other current provisions: 126 

(3) relates to the Construction segment: Bouygues Construction 67, Bouygues Immobilier 33, Colas 32 

(individual project provisions are not disclosed for confidentiality reasons). 

184

8.3. Deferred tax assets and liabilities by business segment 


Type of deferred taxation 

by business segment 

Net deferred tax 

asset / liability 

at 31/12/04 

Changes in 

scope of 

consolidation 

Translation 

adjustment 

Gain 

Expense 

Other 

items 

Net deferred tax 

asset / liability 

at 31/12/05 

A - Tax losses available for carry-forward 



Colas 3 4 7 

Media 12 12 

Telecoms 332 (168) 164 

Bouygues SA and other activities 0 

Sub-total 338 0 0 16 (168) 0 186 

B - Temporary differences (1) 

Bouygues Construction 33 13 (1) 12 57 

Bouygues Immobilier 16 5 21 

Colas (23) (3) (4) 16 (7) 17 (4) 

Media (10) 11 (1) (3) (3) 

Telecoms 94 4 (57) (3) 38 

Bouygues SA and other activities (40) 3 (1) 29 (9) 

Sub-total 70 (3) (4) 52 (67) 52 100 

Total 408 (2) (3) (4) 68 (235) 52 286 (2) 

(1) main sources of deferred taxation: 2005 2004 

- deferred tax assets on employee benefits 87 64 

- deferred tax on temporarily non-deductible provisions 54 19 

- restricted provisions booked solely for tax purposes (57) (18) 

- other 16 5 

100 70 

(2) net deferred tax asset 

8.4. Period to recovery of deferred tax assets 

31 December 2005 Less than 2 years 3 to 5 years Over 5 years Total 

Period to recovery of deferred 

tax assets 257 52 66 375 

8.5. Unrecognised deferred tax assets 

Amount of deferred tax assets not recognised due to low probability of recovery 

31 December 2005 31 December 2004 


Colas 27 35 

TF1 42 63 

Other 75 66 

Total unrecognised deferred 

tax assets 195 214 


185

NOTE 9: NON-CURRENT AND CURRENT DEBT 5,415 

Non-current debt 4,721 

Current debt 694 

9.1. Interest-bearing debt by maturity 

Current 

debt 

2006 

1 to 2 

years 

2007 

2 to 3 

years 

2008 

3 to 4 

years 

2009 

Non-current debt Total 

4 to 5 5 to 6 Over 6 

non-current 

years years years Other debt 

2010 2011 2012 & later 

31/12/05 

Bond issues 594 1,012 509 759 1,728 4,008 3,761 

Bank borrowings 43 67 12 13 11 17 56 176 676 

Finance lease obligations 35 18 15 8 5 4 7 57 80 

Other debt 22 4 8 3 1 2 2 20 20 

Participating loans 111 

Total interest-bearing debt 694 89 35 1,036 526 782 1,793 4,261 4,648 

Promise to buy 6.5% of Bouygues Telecom 460 460 

Total incl. Bouygues Telecom promise 694 549 35 1,036 526 782 1,793 4,721 

Comparative at 31/12/04 242 1,050 37 32 1,040 536 1,813 140 4,648 

Total 

12/2004 

Finance lease obligations by 

business segment 

Construction Property Roads Media Telecoms 

Bouygues SA & 

other activities 

Total 

Non-current at 31 December 2005 32 2 23 57 

Current at 31 December 2005 26 1 8 35 

Non-current at 31 December 2004 36 15 29 80 

Current at 31 December 2004 35 9 6 50 

9.2. Confirmed credit facilities and drawdowns 

Description 

Confirmed facilities - Maturity 

Drawdowns on credit facilities - Maturity 

Less than 1 year 1-5 years Over 5 years Total Less than 1 year 1-5 years Over 5 years Total 

Bond issues (primarily Bouygues SA) 594 1,521 2,487 4,602 594 1,521 2,487 4,602 

Bank borrowings 178 3,424 402 4,004 43 103 73 219 

Other borrowings 57 62 15 134 57 62 15 134 

Total before Bouygues Telecom promise 829 5,007 2,904 8,740 694 1,686 2,575 4,955 

Promise to buy 6.5% of Bouygues Telecom 460 460 460 460 

Total including Bouygues Telecom promise 829 5,467 2,904 9,200 694 2,146 2,575 5,415 

186

9.3. Liquidity at 31 December 2005 

9.5. Interest rate risk 

As at 31 December 2005, available cash stood at 3,063 million euros (including 26 million euros of financial 

instruments contracted to hedge net debt). In addition, the Group had 3,785 million euros of unused confirmed 

medium-term credit facilities as at the same date. 

The split of financial assets and liabilities by interest rate type at 31 December 2005 was as follows: 

Variable Fixed Total 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

Non-utilised 

medium and 

long-term 

facilities 

Available 

cash 

Call option for 6.5% 

of Bouygues Telecom 

Financial liabilities 447 4,968 5,415 

Financial assets (*) 3,063 3,063 

Net position before hedging (2,616) 4,968 2,352 

Interest rate hedges 345 (345) 

Net position after hedging (2,271) 4,623 2,352 

Adjustment for the seasonal nature of certain activities 350 

Net position after hedging and adjustment (1,921) 

(*) including 26 million euros for the fair value of financial instruments contracted to hedge net debt 

An immediate 1% rise in short-term interest rates would reduce net interest by 19.2 million euros over a full 

year. 

0 

Liquidity 2006 2007 2008 2009 2010 2011 2012 2013 2014 2020 

9.6. Split of current and non-current debt by currency 

Consequently, the Group has no exposure to liquidity risk. 

The credit facilities contracted by Bouygues contain no financial covenants or trigger events, and nor do 

those used by Bouygues subsidiaries. 

9.4. Split of current and non-current debt by interest rate type 

Split of current and non-current debt, including the effect of all open interest rate hedging contracts at the 

balance sheet date: 

12/2005 12/2004 

• Fixed rate (1) 85% 69% 

• Variable rate 15% 31% 

Europe 

Euro Pound Other US CFA Other Total 

Sterling currencies Dollar Franc currencies 

Non-current at 31/12/05 4,610 38 23 9 35 6 4,721 

Current at 31/12/05 677 3 1 11 2 694 

Non-current at 31/12/04 4,486 13 11 20 103 15 4,648 

Current at 31/12/04 220 18 4 242 

An analysis of debt by business segment is provided in Note 17. 

(1) rates fixed for more than one year 


187

NOTE 10: MAIN COMPONENTS OF CHANGE IN NET DEBT 2,352 

10.1. Change in net debt 

2005 

31/12/2004 movements 31/12/2005 

Cash and equivalents (3,260) 45 (3,215) 

Overdrafts and short-term bank borrowings 252 (74) 178 

Net cash and equivalents (3,008) (29) (1) (3,037) 

Non-current debt 4,648 73 4,721 

Current debt 242 452 694 

Financial instruments, net (7) (19) (26) 

Gross debt 4,883 506 5,389 

Net debt 1,875 477 2,352 

(1) cash and equivalents as analysed in the 2005 cash flow statement (net cash flows + non-monetary movements) 

10.2. Principal transactions in the year ended 31 December 2005 

Net debt at 31 December 2004 1,875 

Main impacts of changes in scope of consolidation (192) 

Exceptional payout by Bouygues 1,664 

Proceeds received from divestment of Saur (1,031) 

Ordinary dividends paid by Bouygues and TF1 to minority shareholders 339 

Bouygues Confiance 3 capital increase (196) 

Main acquisitions and disposals of investments and financial assets 239 

Purchase of treasury shares 362 

Bouygues Telecom fine and exceptional levy on payout made by Bouygues SA 120 

Operating and other items (1,288) 

Net debt at 31 December 2005 (before promise to buy Bouygues Telecom shares) 1,892 

Recognition of the promise to buy 6.5% of Bouygues Telecom 460 

Net debt at 31 December 2005 2,352 

Sign convention: cash and equivalents negative, debt positive 

NOTE 11: CURRENT LIABILITIES 12,612 

Breakdown of current liabilities 

31/12/2005 31/12/2004 

Advances and down-payments received 677 679 

Debt (amount due within one year) (1) 694 242 

Current taxes payable 211 177 


Current provisions (2) 676 540 

Other current liabilities, deferred income and similar 

Other operating liabilities (employees, Social Security, government) 1,998 1,740 

Deferred income 961 1,058 

of which investment grants 0 0 

Unrealised foreign exchange gains 0 0 

Other non-financial liabilities 1,392 3,048 

Overdrafts and short-term bank borrowings 178 252 

Financial instruments (hedging of fair-value financial liabilities) (3) 9 41 

Other current financial liabilities 11 4 

Total 12,612 12,988 

(1) see analysis in Note 9 

(2) see analysis in Note 7.2 

(3) see analysis in Note 18 

NOTE 12: ANALYSIS OF SALES AND OTHER REVENUES FROM 

OPERATIONS 

12.1. Analysis by accounting classification 

2005 2004 

Sales of goods 2,215 2,007 

Sales of services 9,415 9,976 

Construction contracts 12,443 8,911 

Sales 24,073 20,894 

Royalties 



Total 24,220 21,035 

There were no material exchanges of goods or services in the year ended December 31, 2005. 

188

Information about construction contracts 


Construction 

Colas 

Total 

Unbilled works 259 224 483 

Warranty retentions 41 16 57 

Works billed in advance (624) (171) (795) 

Advance payments received (375) (113) (488) 

12.2. Analysis by business segment 

Sales reported by fully-consolidated companies include accounting revenues from works contracts and sales of goods and services. 

SEGMENT 

2005 sales 2004 sales 

France International Total % France International Total % 

Construction 3,346 2,469 5,815 24% 2,957 2,270 5,227 25% 

Property 1,389 168 1,557 6% 1,205 90 1,295 6% 

Roads 5,436 3,988 9,424 39% 4,877 3,070 7,947 38% 

Media 2,239 250 2,489 11% 2,214 269 2,483 13% 

Telecoms 4,525 4,525 19% 3,649 3,649 17% 

Bouygues SA & other subsidiaries 11 252 263 1% 3 290 293 1% 

Consolidated sales 16,946 7,127 24,073 100% 14,905 5,989 20,894 100% 

% change 2005 vs. 2004 14% 19% 15% 

12.3. Analysis by geographical area 12.4. Split by type of contract, France / international (%) 

2005 sales 2004 sales 

Total % Total % 

France 16,946 70 14,905 71 

European Union 2,636 11 2,034 10 

Rest of Europe 766 3 655 3 

Africa 1,056 4 979 5 

Middle East 21 18 0 

United States and Canada 1,781 8 1,499 7 

Central & South America 132 1 107 1 

Asia-Pacific 735 3 697 3 

Total 24,073 100 20,894 100 

2005 2004 

France International Overall France International Overall 

Public-sector contracts (3) 29 49 35 30 48 35 

Private-sector contracts 71 51 65 70 52 65 

(3) sales billed directly to government departments or local authorities (mainly works and maintenance contracts) in France and abroad 


189

NOTE 13: OPERATING PROFIT 1,748 

Current operating profit 

2005 2004 

Sales 24,073 20,894 


Purchases used in production and external charges (15,906) (13,499) 



Net depreciation, amortisation, provisions and impairment 

Depreciation and amortisation (1,196) (1,103) 

Net charge to provisions and impairment losses (457) (283) 

Changes in production & property development inventories 58 (13) 

Other operating income and expenses 453 270 

Reversals of provisions no longer required (1) 223 (1) 125 

Net gain on disposal of non-current assets 84 91 

Other income and expenses 146 54 

Current operating profit 1,852 1,557 

Non-current operating income and expenses (2) (104) 0 

Operating profit 1,748 1,557 

See Note 17 for a breakdown by business segment 

(1) Reversals of provisions no longer required are individually immaterial. 

(2) fines for anti-competitive practices in 2005: 

- fine for alleged collusion in the mobile telephony market (ruling by the French competition commission) 58 

- construction segment 46 

NOTE 14: COST OF NET DEBT AND OTHER 

FINANCIAL INCOME AND EXPENSES (187) 

Cost of net debt 2005 2004 

Cost of gross debt (224) (234) 

Interest income on cash and equivalents 37 75 

Total (187) (159) 

The cost of net debt breaks down as follows: 

• Net interest charges on debt (216) (212) 

• Interest charges on finance leases (6) (6) 

• Net interest charges related to cash and equivalents 2 15 

• Positive and negative effects of financial instruments on net debt (5) (4) 

• Income from available-for-sale securities and cash equivalents 38 48 

Under IFRS, foreign exchange gains and losses are treated as operating items. 

(187) (159) 

Other financial income and expenses 2005 2004 

Dividends from non-consolidated companies 5 4 

Net charges: provisions and impairment of financial items 8 (3) 

Net discounting expense (12) (1) (3) 

Change in fair value of other financial assets and financial liabilities 4 (2) 

Current account waivers, gains / losses on disposals of investments in 

non-consolidated companies and other financial assets, net interest other 

than on debt, commitment and arrangement fees, advance rent and other (34) (26) 

Total (29) (30) 

See Note 17 for an analysis of the cost of net debt by business segment 

(1) includes: (10) in respect of the liability recognised for the promise to buy Bouygues Telecom shares from BNP Paribas 

190

NOTE 15: INCOME TAX EXPENSE (570) 

15.1. Analysis of net income tax expense 

France 

2005 2004 

Other 

countries 

Total 

France 

Other 

countries 

Total 

Tax payable to the tax authorities (282) (122) (404) (252) (64) (316) 

Deferred tax liabilities (19) (1) (20) 9 (1) 8 

Deferred tax assets (1) (153) 7 (146) (194) 1 (193) 

Total (454) (116) (570) (437) (64) (501) 

(1) includes Bouygues Telecom deferred tax assets written back 

See Note 17 for an analysis by business segment 

15.2. Tax proof (reconciliation between standard tax rate 

and effective tax rate) 

The differences between the actual standard corporate income tax rate applicable in France and the 

effective tax rate based on the consolidated financial statements are as follows: 

NOTE 16: BASIC AND DILUTED EARNINGS PER SHARE 

Earnings per share before dilution (basic earnings per share) is obtained by dividing net profit attributable 

to the Group by the weighted average number of shares outstanding during the year, excluding the average 

number of ordinary shares bought and held as treasury shares. 

2005 2004 

Net profit attributable to the Group 832 909 

Weighted average number of shares outstanding 332,036,321 333,600,848 

Basic earnings per share (in euros) 2.51 2.72 

Basic earnings per share for 2004 excluding gain on divestment 

of Saur (in euros) 

Diluted earnings per share is calculated by reference to the weighted average number of shares outstanding, 

adjusted for the conversion of all potentially dilutive shares (i.e. stock subscription options legally and 

effectively exercisable at the balance sheet date). 

2005 2004 

Net profit used to calculate diluted earnings per share 832 909 

Weighted average number of shares outstanding 332,036,321 333,600,848 

Adjustment for potential dilutive effect of stock options 11,351,815 5,538,592 

Diluted earnings per share (in euros) 2.42 2.68 

2.10 

2005 2004 

• Standard tax rate in France 34.93% 35.43% 

• Recognition and utilisation of tax loss carry-forwards (0.77%) 1.35% 

• Effect of permanent differences 2.29% (0.60%) 

• Taxes not calculated at the standard corporate income tax rate: (0.99%) (2.51%) 

flat-rate taxes, dividend taxes, group tax election, differences in tax rates 

(long-term capital gains in France, foreign tax rates) 

• Effective tax rate 35.46% 33.67% 


191

192 

NOTE 17: SEGMENT INFORMATION 

Segment information is presented in two forms: 1. By business segment: Construction (Bouygues Construction) ; Property (Bouygues Immobilier) ; Roads (Colas) ; Media (TF1) ; Telecoms (Bouygues Telecom) ; Bouygues SA 

and other activities - 2. By geographical area: France, Europe (excluding France), Africa, Asia-Pacific, Americas, Middle East. 

17.1. Analysis by business segment: year ended 31 December 2005 



& other activities 


Total sales 6,131 1,557 9,540 2,508 4,537 423 24,696 

Inter-segment sales (316) (116) (19) (12) (160) (623) 

Third-party sales 5,815 1,557 9,424 2,489 4,525 263 24,073 

Net depreciation and amortisation expense (111) (3) (338) (80) (626) (38) (1,196) 

Net charges to provisions (186) (44) (107) (44) (67) (9) (457) 

Current operating profit 250 156 421 353 656 16 1,852 

Non-current operating income and expenses (12) (32) (58) (2) (104) 

Operating profit 238 156 389 353 598 14 1,748 

Cost of net debt 32 1 (10) (12) (26) (172) (187) 

Income tax expense (114) (53) (121) (116) (220) 54 (570) 

Share of profits and losses of associates 19 49 (5) (1) 62 

Net profit before results of discontinued and held-for-sale operations 176 92 312 221 352 (129) 1,024 

Net profit of discontinued and held-for-sale operations 14 14 

Net profit 176 92 312 235 352 (129) 1,038 

Net profit attributable to the Group 176 90 296 101 301 (132) 832 (4) 

BALANCE SHEET 

Property, plant and equipment 247 46 1,650 152 2,270 250 4,615 

Intangible assets 11 1 47 178 806 13 1,056 

Goodwill (1) 106 805 1,047 2,655 5 4,618 

Deferred tax assets & long-term tax receivables 61 26 64 16 203 5 375 

Investments in associates 62 395 40 497 

Other non-current assets 89 8 98 21 3 64 283 

Cash and equivalents 251 40 241 177 5 2,501 3,215 

Other unallocated assets 9,939 

Total assets 24,598 

Non-current financial liabilities 8 72 108 513 23 3,997 4,721 

Non-current provisions 519 79 471 47 54 95 1,265 

Deferred tax liabilities & long-term tax liabilities 1 5 61 7 15 89 

Current financial liabilities 4 14 37 25 11 603 694 

Overdrafts and short-term bank borrowings 56 1 100 1 1 19 178 

Unallocated liabilities 17,651 

Total liabilities 24,598 

Net debt (2) (1,874) (150) (415) 351 (3) 441 3,999 2,352 

CASH FLOW STATEMENT 

Cash flow (from operations, before changes in working capital) 411 161 781 453 1,261 23 3,090 

Net acquisitions of property, plant and equipment and intangible assets (56) (4) (411) (155) (584) (19) (1,229) 

Net acquisitions of investments in consolidated companies and other investments (39) (134) (30) (47) (250) 

OTHER INDICATORS 

EBITDA 547 203 867 476 1,349 63 3,505 

Free cash flow 273 105 239 170 431 (114) 1,104 

(1) see breakdown in Note 4 (allocated on the basis of the investee company) 

(2) contribution at business segment level, including Bouygues Relais and Uniservice current accounts 

(these inter-segment accounts are eliminated in the “Bouygues SA and other activities” column). 


(3) excluding TPS (106 million euros) 

(4) increase of 19% relative to 2004 (excluding gain on divestment of Saur) 

Total 

2005

17.2. Analysis by business segment: year ended 31 December 2004 





Total sales 5,511 1,295 8,024 2,502 3,665 399 21,396 

Inter-segment sales (284) (77) (19) (16) (106) (502) 

Third-party sales 5,227 1,295 7,947 2,483 3,649 293 20,894 

Net depreciation and amortisation expense (115) (6) (299) (79) (562) (42) (1,103) 

Net charges to provisions (104) (18) (46) (31) (17) (67) (283) 

Operating profit 168 119 310 381 597 (18) 1,557 

Cost of net debt 26 (7) (13) (62) (103) (159) 

Income tax expense (59) (40) (94) (137) (196) 25 (501) 

Share of profits and losses of associates 3 42 (5) (3) 37 

Net profit before results of discontinued and held-for-sale operations 140 68 253 225 332 (114) 904 

Net profit of discontinued and held-for-sale operations (2) 213 211 

Net profit 140 68 253 223 332 99 1,115 

Net profit attributable to the Group 140 64 242 93 275 95 909 

Net profit attributable to the Group, excluding Saur 140 64 242 93 275 (114) 700 

BALANCE SHEET 

Property, plant and equipment 287 45 1,413 208 2,293 383 4,629 

Intangible assets 1 1 41 124 837 16 1,020 

Goodwill (1) 76 726 1,393 2,335 10 4,540 

Deferred tax assets & long-term tax receivables 36 24 29 21 426 33 569 

Investments in associates 48 368 45 25 486 

Other non-current assets 70 6 106 11 2 42 237 

Cash and equivalents 228 57 224 159 16 2,576 3,260 

Other unallocated assets 9,207 


Non-current financial liabilities 11 44 89 524 619 3,361 4,648 

Non-current provisions 437 66 426 80 29 138 1,176 

Deferred tax liabilities & long-term tax liabilities 1 7 49 31 70 158 

Current financial liabilities 24 15 50 33 9 111 242 

Overdrafts and short-term bank borrowings 58 3 74 17 100 252 

Unallocated liabilities 17,472 

Total liabilities 23,948 

Net debt (2) (1,523) (249) (423) 409 1,197 2,464 1,875 

CASH FLOW STATEMENT 

Cash flow (from operations, before changes in working capital) 291 125 623 483 1,159 33 2,714 

Net acquisitions of property, plant and equipment and intangible assets (73) (4) (348) (79) (502) (41) (1,047) 

Net acquisitions of investments in consolidated companies and other investments (1) (11) (66) (54) 954 822 

OTHER INDICATORS 

EBITDA 413 143 655 491 1,176 65 2,943 

Free cash flow 187 81 175 254 398 (88) 1,007 

(1) see breakdown in Note 4 (allocated on the basis of the investee company) 

(2) contribution at business segment level, including Bouygues Relais and Uniservice current accounts 

(these inter-segment accounts are eliminated in the “Bouygues SA and other activities” column). 


Total 

2004 


193

17.3. Analysis by geographical area 

Year ended 31 December 2005 

France 

European 

Union 

Rest of 

Europe 

Africa Asia-Pacific Americas Middle East Total 

Income statement 

Third-party sales 16,946 2,636 766 1,056 735 1,913 21 24,073 

Balance sheet 

Property, plant and equipment (1) 3,725 248 53 199 41 349 4,615 

Intangible assets 1,015 22 13 6 1,056 

Unallocated assets 18,927 


Cash flow statement 

Purchase price of property, plant and equipment 

and intangible assets (1,093) (70) (19) (71) (17) (101) (1,371) 

(1) including assets held under finance leases 


Income statement 

France 

European 

Union 

Rest of 

Europe 

Africa Asia-Pacific Americas Middle East Total 

Third-party sales 14,905 2,034 655 979 697 1,606 18 20,894 

Balance sheet 

Property, plant and equipment (1) 3,657 193 107 377 30 265 4,629 

Intangible assets 941 15 13 13 38 1,020 

Unallocated assets 18,299 


Cash flow statement 

Purchase price of property, plant and equipment 

and intangible assets (943) (59) (17) (97) (14) (91) (1,221) 

(1) including assets held under finance leases 

194

17.4. Income statement by function 


Construction 

(Bouygues 

Construction) 

Property 


Immobilier) 

Roads 

(Colas) 

Media 

(TF1) 

Telecoms 


Telecom) 



Total 

Consolidated sales 5,815 1,557 9,424 2,489 4,525 263 24,073 

Cost of sales (4,903) (1,264) (8,130) (1,799) (3,253) (222) (19,571) 

Gross profit 912 293 1,294 690 1,272 41 4,502 

Research and development expenses (7) (1) (107) (21) (1) (137) 

Selling expenses (289) (97) (138) (164) (3) (691) 

Administrative expenses (366) (41) (765) (199) (431) (75) (1,877) 

Goodwill impairment (1) (5) (6) 

Other operating income & expenses 2 59 61 

Current operating profit 250 156 421 353 656 16 1,852 


Construction 


Construction) 

Property 


Immobilier) 

Roads 

(Colas) 

Media 

(TF1) 

Telecoms 


Telecom) 



Total 

Consolidated sales 5,227 1,295 7,947 2,483 3,649 293 20,894 

Cost of sales (4,518) (1,048) (6,845) (1,766) (2,450) (180) (16,807) 

Gross profit 709 247 1,102 717 1,199 113 4,087 

Research and development expenses (4) (1) (101) (3) (26) (1) (136) 

Selling expenses (249) (86) (133) (149) (4) (621) 

Administrative expenses (324) (41) (690) (189) (427) (127) (1,798) 

Goodwill impairment (11) (11) 

Other operating income & expenses 36 36 

Current operating profit 168 119 311 381 597 (19) 1,557 


195

NOTE 18: FINANCIAL INSTRUMENTS 

The tables presented below show, for information purposes, the aggregate notional amounts at 31 December 

2005 for each type of financial instrument used, split by residual maturity for interest rate hedges and by 

currency for currency hedges. 

18.1. Fully-consolidated companies 

18.1.1. Interest rate hedges 

■ Analysis by maturity (in millions in euros) 

Maturity 

at 31/12/05 

Notional amounts 

2006 2007 to 2010 Beyond Total at 31/12/2004 


- on financial assets 525 34 559 (1) 639 

- on financial liabilities 414 617 37 1,068 (2) 1,441 

Future rate agreements 

- on financial assets - - - - - 

- on financial liabilities - - - - - 

Caps / floors 

- on financial assets - - - - - 

- on financial liabilities - - - - 410 

(1) of which swaps paying fixed rate: 334 

(2) of which swaps paying fixed rate: 568 

■ Analysis by business segment (in millions of euros) 



& other 

activities 

Total 

31/12/2005 


- on financial assets 225 334 559 639 

- on financial liabilities 14 20 34 400 400 200 1 068 1 441 

Future rate agreements 

- on financial assets - - - - - - - - 

- on financial liabilities - - - - - - - - 

Caps / floors 

- on financial assets - - - - - - - - 

- on financial liabilities - - - - - - - 410 

In the case of renewable interest rate hedges, the amounts shown in the columns relate to the longest maturity. 

Total 

31/12/2004 

196

18.1.2. Currency hedges 

■ Analysis by currency 

Currency 

At 31 December 2005 (equivalent value in millions of euros) 

US dollar Pound sterling Swiss franc 

Hong Kong 

dollar 

Forward purchases / sales 

- forward purchases 75 14 3 - 22 114 148 

- forward sales 170 28 7 22 42 269 224 

Currency swaps 79 54 111 61 16 321 220 


- purchased 34 9 2 - 8 53 22 

- written - - - - 4 4 - 

Other 

Total 

Total 

at 31/12/04 

■ Analysis by business segment (in millions of euros) 



& other 

activities 

Total 

31/12/2005 

Total 

31/12/2004 

Forward purchases / sales 

- forward purchases 33 - 23 53 - 5 114 148 

- forward sales 236 - 4 11 - 18 269 224 

Currency swaps 19 - 12 - - 290 321 220 


- purchased 12 - 2 18 21 - 53 22 

- written - - 4 - - - 4 

18.2. Market value of hedging instruments 

At 31 December 2005, the market value (net present value) of the hedging instruments portfolio was +9 million 

euros. 

This amount mainly comprises the net present value of interest rate swaps contracted to hedge the Group’s 

debt (fair value hedges and cash flow hedges), and the net present value of forwards and futures contracted 

to hedge currency risk arising on commercial transactions. 

(1) includes -9 million euros for Colas arising from the impact of the interest rate swap contracted by the UK subsidiary of Colas 

for the contract with Portsmouth City Council; it is entirely offset by the market value of the derivative embedded in the fixed contractual 

fee paid by the customer, also of 9 million euros. 

The split of this market value by type of hedge is as follows: 

- fair value hedging relationship: + 14 millions euros 

- cash flow hedging relationship: - 5 millions euros 

A movement of +1.00% in the yield curve would increase the market value of the hedging instruments portfolio 

by 5 million euros; a movement of -1.00% in the yield curve would increase the market value of the hedging 

instruments portfolio by 12 million euros. 

A uniform 1% depreciation in the euro against all other currencies would increase the market value of the 

hedging instruments portfolio by 4 million euros. 

These calculations were prepared by the Bouygues Group, or obtained from the banks with whom the 

instruments were contracted. 


197

NOTE 19: OFF BALANCE SHEET COMMITMENTS 

19.1. Reciprocal commitments 

Commitments given / received 


Total 

12/2005 Construction Property Roads Media Telecoms & other 

activities 

Commitments given 2,072 18 579 93 428 936 18 657 1,076 339 2,072 1,867 

Image transmission 387 387 82 302 3 387 447 

Operating leases (1) 1,040 18 31 71 41 879 (2) 191 513 336 1,040 1,051 

Irrevocable purchase obligations 645 548 (3) 22 57 18 384 261 645 369 

Commitments received 2,032 18 579 93 428 896 18 627 1,066 339 2,032 1,854 

Image transmission 387 387 82 302 3 387 447 

Operating leases (1) 1,040 18 31 71 41 879 191 513 336 1,040 1,051 

Irrevocable purchase obligations 605 548 22 17 18 354 251 605 356 

Balance (4) 40 40 30 10 40 13 

(1) minimum future lease payments due until the normal renewal date of the lease (or earliest potential termination date) under operating leases relating to current operations (land, buildings, plant & equipment, etc.) 

(2) Bouygues Telecom: commitments given in connection with operating activities, primarily commercial leases of property and sites housing technical installations for the network (of which network site rentals: 661 and property rentals: 149) 

(3) Bouygues Immobilier: irrevocable commitments, subject to conditions, relating to the purchase of land banks 

(4) Bouygues Telecom: effect of the specific terms of certain equipment supply contracts 

under 

1 year 

1 to 5 

years 

Maturity 

over 5 

years 

Total 

Total 

12/2004 

19.2. Sundry commitments 


Total 


activities 

Commitments given 648 129 17 70 128 254 50 259 273 116 648 642 

Other contractual obligations and 

commercial commitments given 648 129 17 70 128 254 50 259 273 116 648 642 

(guarantees, endorsements, etc.) (1) 

Commitments received 100 2 87 5 6 48 44 8 100 70 

Other contractual obligations and 

commercial commitments received 100 2 87 5 6 48 44 8 100 70 

(guarantees, endorsements, etc.) 

Balance 548 127 17 70 41 249 44 211 229 108 548 572 

(1) In the course of its ordinary activities, the Group provides ten-year guarantees or performance bonds for which no quantified estimate or disclosure is made unless it becomes apparent that the guarantee or bond will require the Group to make payments, in which case a provision would 

be recognised. 

under 

1 year 

1 to 5 

years 

Maturity 

over 5 

years 

Total 

Total 

12/2004 

198

19.3. Other commitments 

19.5. Contingent assets and liabilities 

Commitments given 

GSM licence 

UMTS licence 

Bouygues Telecom has a GSM licence which requires compliance with a number of 

obligations; the company is in compliance with all these obligations. 

This licence is due for renewal in 2009. 

The UMTS licence awarded to Bouygues Telecom requires compliance with various 

obligations, relating in particular to the pace of the roll-out, geographical coverage 

and the commercial opening of the network. 

In a ruling issued on 20 May 2005, the French telecommunications regulator (Arcep) 

put back to 30 April 2007 at the latest the date by which Bouygues Telecom is 

required to make the UMTS services covered by the licence commercially available. 

Contingent assets: 

Litigation 

Contingent 

liabilities: 

Litigation 

In February 2005, Bouygues Telecom instituted proceedings against Tekelec US, 

the supplier of two computer servers that failed on 17 November 2004, making it 

impossible for a number of Bouygues Telecom subscribers to make 

or receive calls. 

The case is currently before the courts of North Carolina. 

Bouygues Telecom is alleging negligence by the manufacturer, and is claiming 

damages of USD 80 million. 

A complaint against Bouygues Telecom, SFR and Orange France relating to SMS 

tariffs is currently being investigated by the French competition commission. 

Blind spots 

In 2002, Bouygues Telecom and the two other French mobile operators committed to 

providing coverage in a number of blind spots. This commitment was set out in an 

agreement signed in 2003 and amended in 2004. 

The three operators are obliged to provide coverage to 3,100 communities, 

representing 2,250 sites. 

Bouygues Telecom complied with its obligations in respect of 2005. The programme 

will continue in 2006 and 2007. 


Total 


activities 

Total commitments given 2,720 147 596 163 556 1,190 68 916 1,349 455 2,720 2,509 

Total commitments received 2,132 20 579 93 515 901 24 675 1,110 347 2,132 1,924 

No material off balance sheet commitments have been omitted from this disclosure, in accordance with applicable accounting standards. 

under 

1 year 

1 to 5 

years 

Maturity 

over 5 

years 

Total 

Total 

12/2004 

19.4. Collateral given 


Total 


activities 

Mortgages secured on land and buildings, pledges 

of plant and equipment 9 9 1 3 5 9 5 

Pledges of securities, subordinated loans 25 7 18 18 7 25 18 

Total Group 34 7 18 9 19 10 5 34 23 

under 

1 year 

1 to 5 

years 

Maturity 

over 5 

years 

Total 

Total 

12/2004 


199

19.6. Obligations under finance leases and operating leases 

19.6.1. Obligations under finance leases 

Summary of future minimum lease payments under 1 year 1 to 5 years Total 

Finance leases at 31 December 2005 42 61 103 

Comparative at 31 December 2004 41 100 141 

Present value of minimum lease payments under 1 year 1 to 5 years Total 

Minimum lease payments 42 61 103 

Finance charges 4 10 14 

Present value of minimum lease payments 38 51 89 

Comparative at 31 December 2004 46 70 116 

The amount of contingent rent under finance leases at 31 December 2005 is: nil 

19.6.2. Obligations under operating leases 

Minimum payments for the year 

Total lease payments for the year 

Minimum payments for the year 176 

Summary of future minimum 

lease payments 

under 1 

year 

1 to 5 

years 

over 5 

years 

Operating leases at 31 December 2005 191 513 336 1,040 

Comparative at 31 December 2004 183 529 339 1,051 

Total 

NOTE 20: HEADCOUNT, EMPLOYEE BENEFIT OBLIGATIONS 

AND EMPLOYEE SHARE OWNERSHIP 

20.1. Average headcount 

2005 2004 

Managerial 17,035 15,888 

Supervisory, technical and clerical 17,825 17,432 

Site workers 27,230 25,986 

Sub-total: France 62,090 59,306 

Expatriates and local contract staff 57,004 56,946 

Total average headcount including TPS 119,094 116,252 (1) 

TPS (610) 

Total average headcount excluding TPS 118,484 

(1) after deducting Saur average headcount (21,305), included at 31 December 2004 

20.2. Employee benefit obligations, retirement benefit obligations 

(post-employment benefits) 

The tables below disclose information about the Bouygues Group’s retirement benefit obligations. 

20.2.1. Defined-contribution plans 

2005 2004 

Amounts recognised as expenses (1,383) (1,292) 

The above defined-contribution expenses comprise contributions to: 

• health insurance and mutual insurance funds, 

• pension funds (compulsory and top-up schemes), 

• unemployment insurance funds. 

For related-party information, see Note 21 

200

20.2.2. Defined-benefit plans 

■ Net expense recognised in the income statement (as an operating item) 

Lump-sum 

Pensions 

retirement benefits 

2005 2004 2005 2004 

Current service cost 13 16 

Interest expense on obligation 9 7 2 2 

Expected return on plan assets (2) (1) 

Net actuarial loss / (gain) recognised (1) 

Past service cost 6 6 (1) 

Net expense recognised in income statement 27 29 (1) 1 

■ Movement in balance sheet items 

Lump-sum 


Pensions 

2005 2004 2005 2004 

Position at 1 January 225 224 22 21 

Expense recognised 27 29 1 

Change in scope of consolidation 0 (29) (1) 

Translation adjustment 0 0 

Transfers between items and other movements (1) 1 1 


■ Amounts recognised in the balance sheet 

Lump-sum 

Pensions 


31/12/2005 31/12/2004 31/12/2005 31/12/2004 

Present value of obligation (1) 335 273 103 81 

Fair value of plan assets (3) (2) (3) (2) (74) (60) 

Net unrecognised actuarial loss / (gain) (10) (7) (12) 1 

Unrecognised past service cost (71) (3) (38) 5 

Net obligation recognised 251 225 22 22 

(1) total present value of obligation relating to lump-sum retirement benefits and pensions 

(2) residual TF1 fund covering a portion of the obligation, reducing the present value of the TF1 obligation 

(3) Most of this expense is due to the effect of the new lump-sum retirement benefit calculation rules contained in the new 

Collective Agreement for managers in the construction industry, which came into force on 1 January 2005. 

■ Main actuarial assumptions used to measure lump-sum retirement benefit obligations 

31/12/2005 31/12/204 

Discount rate (OAT TEC 10) 3.38% - 3.57% 3.6% - 3.57% 

Mortality table INSEE INSEE 

Retirement age 

- Managerial 60 / 63 years 60 / 63 years 

- Technical, clerical & supervisory, site workers 60 years 60 years 

Salary inflation rate 2% - 4.3% 2% - 4.3% 

(1) including general inflation 


201

■ Analysis by business segment at 31 December 2005 


Bouygues SA & other 

activities 

Net lump-sum retirement benefit expense 8 1 10 2 3 3 27 

Non-current provisions (balance sheet): 

- lump-sum retirement benefits 63 6 118 26 20 18 251 

- pensions 1 21 22 

Total 

■ Analysis by geographical area at 31 December 2005 

France 

European 

Union 

Africa 

Asia- 

Pacific 

Americas 

Total 

Net lump-sum retirement benefit expense (1) 23 1 3 27 

Non-current provisions (balance sheet): 

- lump-sum retirement benefits 232 13 5 1 251 

- pensions (2) 19 3 22 

(1) Pension expense for 2005 is approximately 1 million euros. 

(2) discount rate and expected return on plan assets: see Note 2 

202

20.3. Employee share ownership 

NOTE 21: DISCLOSURES ON RELATED PARTIES AND 

REMUNERATION OF DIRECTORS / SENIOR EXECUTIVES 

20.3.1. Stock options 

■ Securities giving access to the share capital 

Share price on 30 December 2005: 41.30 euros 

PLAN 

Options 

outstanding on 

31 December 

2005 

Date of 

grant 

Earliest normal 

exercise date 

Earliest 

employee 

savings plan 


(€) 

1999.04 628,320 20/04/1999 20/04/2004 - 18.35 

1999.07 943,607 06/07/1999 06/07/2004 - 21.01 

1999.11 156,700 04/11/1999 04/11/2004 - 25.18 

2000.07 1,277,227 04/07/2000 04/07/2005 - 58.74 

2001.03 1,990,531 27/03/2001 27/03/2005 - 33.47 

2001.07 1,676,894 03/07/2001 03/07/2005 - 32.81 

2001.09 400,000 18/09/2001 18/09/2005 - 28.67 

2002.06 3,365,417 25/06/2002 25/06/2006 25/06/2003 23.41 

2002.12 588,447 17/12/2002 17/12/2006 17/12/2003 23.00 

2003.06 3,388,884 17/06/2003 17/06/2007 17/06/2004 19.37 

2004.03 3,583,693 15/03/2004 15/03/2008 15/03/2005 25.15 

2005.06 2,954,000 21/06/2005 21/06/2009 21/06/2006 31.34 

The total number of options outstanding (11,351,815) comprises: 

1) options legally exercisable at 31 December 2005, either by normal exercise or by partial exercise ahead of 

the normal exercise date under the terms of the employee savings plan (applies to plans granted from June 

2002 onwards), 

2) options effectively exercisable at 31 December 2005, i.e. options that are in the money (exercise price 

below the closing share price at the balance sheet date of 41.30 euros). 

21.1. Related-party disclosures 

Expenses Income Receivables Liabilities 

2005 2004 2005 2004 31/12/05 31/12/04 31/12/05 31/12/04 

Parties with an ownership 

interest (SCDM) 6 1 

Joint ventures 99 89 177 135 74 58 76 53 

Associates 13 9 103 59 38 6 18 12 

Other related parties 17 22 5 20 23 38 33 36 

Total 135 120 285 214 136 102 127 101 

Maturity 

Less than 1 year 106 90 125 101 

1 to 5 years 11 12 2 

More than 5 years 19 

includes: impairment of doubtful receivables 

(primarily non-consolidated companies) 49 48 

21.2. Remuneration and benefits paid to directors and senior 

executives 

These disclosures cover members of the Group’s Executive Committee who were in post on 31 December 

2005. 

Direct remuneration: 19,461,428 euros, including basic remuneration of 8,086,300 euros, 10,846,500 euros 

of exceptional variable remuneration paid in 2006 on the basis of 2005 performance, and 528,628 euros 

of directors’ fees. Directors’ fees paid to non-executive directors and non-voting supervisors amounted to 

440,283 euros. 

Short-term benefits: None 

Post-employment benefits: Members of the Executive Committee belong to a top-up retirement benefit plan 

based on 0.92% of their reference salary for each year’s membership of the plan. This plan is contracted out 

to an independent insurance company. Contributions paid into the fund managed by the insurance company 

amounted to 6,400,000 euros in 2005. 

Long-term benefits: None 

Termination benefits: These comprise lump-sum retirement benefits of 669,216 euros. 

Share-based payment: 700,00 stock options were granted on 21 June 2005 at an exercise price of 31.34 euros. 

The earliest exercise date is 21 June 2009, and the expense recognised in the year ended 31 December 2005 

is 2.22 million euros. 


203

NOTE 22: ADDITIONAL CASH FLOW STATEMENT INFORMATION 

22.1. Cash flows of acquired and divested subsidiaries 

Breakdown by business segment of net cash flows resulting from acquisitions and divestments of subsidiaries 

Acquired / divested subsidiaries Construction Property Roads Media Telecoms 


& other 

activities 

Total 

12/2005 

Cash and equivalents 20 11 (21) (14) (24) (28) 

Inventories (2) (5) (25) 3 5 (24) 

Trade receivables (32) (23) (98) (8) 56 (105) 

Non-current assets (14) (20) 52 74 92 

Goodwill (30) (77) (73) (180) 

Trade payables (4) 19 112 13 (71) 69 

Long-term debt (1) 28 (80) (53) 

Non-current provisions 1 9 (1) (30) (21) 

Net acquisition cost (61) 1 (92) (28) 0 (70) (250) 

Cash acquired or divested (20) (11) 21 14 24 28 

Net debt related to long-term investments (33) 976 943 

Net cash flow resulting from acquisitions 

and divestments of subsidiaries (81) (10) (104) (14) 0 930 721 

22.2. Investing and financing transactions with no cash consideration 

■ Bouygues SA’s interest in Bouygues Telecom: 

Bouygues SA / BNP Paribas: reciprocal promise to buy / sell a 6.5% interest in Bouygues Telecom (see Note 1.5, Significant Events) 

This transaction generated no cash consideration during 2005 and hence is not included in the cash flow statement. 

204

NOTE 23: AUDITORS’ FEES 

The table below shows fees paid to the auditors (and member firms of their networks) responsible for the audit 

of the consolidated financial statements of Bouygues and fully-consolidated companies, as expensed through 

the income statement in 2005. 

Engagement 

(in thousands of euros) 

Mazars & Guérard network Ernst & Young network Other firms (1) Total expense 

2005 % 2004 2005 % 2004 2005 % 2004 2005 2004 

A - Audit 

Audit of consolidated and individual 3,454 95 4,327 3,000 90 2,900 6,600 84 7,403 13,054 14,630 

company financial statements 

Related engagements 165 5 37 214 7 0 320 4 75 699 112 

Sub-total 1 3,619 100 4,364 3,214 97 2,900 6,920 88 7,478 13,753 14,742 

B - Other services 

Company law, tax, employment law 64 53 2 148 856 11 185 909 397 

Information technology 0 0 0 0 0 11 0 11 

Internal audit 76 0 0 0 0 0 0 76 

Other 113 52 1 93 78 1 96 130 302 

Sub-total 2 253 105 3 241 934 12 292 1,039 786 

Total fee expense 3,619 100 4,617 3,319 100 3,141 7,854 100 7,770 14,792 15,528 (2) 

(1) In the interests of comprehensiveness, this table includes fees paid to other firms. 

(2) includes 1,576 relating to Saur, divested at end 2004 


205

NOTE 24: CHANGES IN SCOPE OF CONSOLIDATION 

AND HELD-FOR-SALE OPERATIONS 

■ Divestment of Saur 

At end 2004, Bouygues signed an agreement with the PAI partners investment fund to sell its entire interest 

in Saur to Novasaur (formerly Gaillon), a holding company, for 1,031 million euros. The sale was completed 

after approval from the competition authorities in February 2005. 

Bouygues made a capital gain of 213 million euros, net of tax. 

The results of Saur for the year ended 31 December 2004 were included in “Net profit of discontinued and 

held-for-sale operations” in the income statement. 

■ TPS: in process of divestment 

Because the divestment of TPS is in process, income and expenses relating to TPS for the years ended 31 

December 2004 and 2005 are shown separately on the line “Net profit of discontinued and held-for-sale 

operations”. 

■ Impact of TPS on the balance sheet at 31 December 2005 and the income and cash flow 

statements for 2004 and 2005: 

Cash flow statement 2005 2004 

Opening cash and equivalents 3 3 

Operating activities 34 48 

Investing activities (24) (7) 

Financing activities (70) (41) 

Effect of changes in exchange rates & other 

Cash and equivalents at 31 December (57) 3 

Assets and liabilities of discontinued and held-for-sale operations are as follows: 

12/2005 

Non-current assets 

Property, plant and equipment 46 

Intangible assets 7 

Goodwill 420 

Other non-current assets 

Deferred tax assets and long-term tax receivables 4 

Current assets 

Inventories 30 

Trade receivables 44 

Tax asset (receivable) (2) 

Other current assets 72 

Cash and equivalents (57) 

Financial instruments (hedging of fair-value financial liabilities) 

Other current financial assets 

Total assets of discontinued and held-for sale operations (A) 564 

Non-current liabilities 

Non-current debt 10 

Non-current provisions 

Deferred tax liabilities and long-term tax liabilities 1 

Current liabilities 

Current debt 38 

Current taxes payable 

Trade payables 125 

Other current liabilities 176 

Overdrafts and short-term bank borrowings 

Financial instruments (hedging of fair-value financial liabilities) 

Other current financial liabilities 

Total liabilities of discontinued and held-for sale operations (B) 350 

Net assets divested (A - B) 214 

Income and expenses generated by discontinued and held-for-sale operations are as follows: 

2005 2004 

Sales 365 348 

Operating profit 17 2 

Cost of net debt (3) (3) 

Other financial income and expenses 1 (2) 

Income tax expense (1) 1 

Net profit of discontinued or held-for-sale operations 

14 (2) 

206

NOTE 25: PRINCIPAL EXCHANGE RATES 

NOTE 26: LIST OF CONSOLIDATED COMPANIES AT 31 DECEMBER 2005 

Convention: 1 local currency unit = X euros 

Country 

Currency unit 

Closing rate Annual average rate 

31/12/05 31/12/04 2005 2004 

EUROPE 

Denmark Danish krone 0.134039 0.134430 0.134183 0.134419 

United Kingdom Pound sterling 1.459215 1.418339 1.464040 1.472058 

Hungary Hungarian forint 0.003955 0.004066 0.004023 0.003990 

Poland Polish zloty 0.259067 0.244828 0.248636 0.221370 

Czech Republic Czech koruna 0.034483 0.033563 0.032826 0.031354 

Romania Romanian leu 0.271724 0.253872 0.275932 0.247291 

Switzerland Swiss franc 0.643045 0.648130 0.646064 0.647819 

NORTH AMERICA 

United States US dollar 0.847673 0.734160 0.807765 0.802472 

Canada Canadian dollar 0.728597 0.609162 0.666800 0.618675 

REST OF THE WORLD 

Morocco Moroccan dirham 0.091672 0.089226 0.090819 0.090685 

Thailand Thai baht 0.020645 0.018816 0.020027 0.019924 

Hong Kong Hong Kong dollar 0.109321 0.094446 0.103872 0.103026 

African Financial Community CFA franc 0.001524 0.001524 0.001524 0.001524 

South Africa South African rand 0.133973 0.130044 0.126888 0.125909 

Companies 

A - TELECOMS / MEDIA 

1 – TELECOMS - BOUYGUES TELECOM group 

Full consolidation 

Bouygues Telecom S.A. and its subsidiaries Boulogne-Billancourt, France 89.55 83.05 

2. COMMUNICATION - TF1 group 

City / Country 

% interest 

% direct and 

indirect control (1) 

2005 2004 2005 2004 


Télévision Française 1 SA Boulogne-Billancourt, France 42.93 41.50 

Ciby Droits Audiovisuels SA Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

La Chaîne Info (LCI) SCS Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

Téléshopping SA Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

TF1 International SA Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

TF1 Publicité SA Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

TF1 Vidéo SA Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

Une Musique SA Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

e-TF1 Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

EUROSPORT and its subsidiaries Boulogne-Billancourt, France 42.93 41.50 100.00 100.00 

Proportionate consolidation 

Télévision Par Satellite (TPS) SNC Issy-les-Moulineaux, France 28.33 27.39 66.00 66.00 

Associates (Equity Method) 

Publications Metro France Paris, France 14.72 14.23 34.30 34.30 

B - CONSTRUCTION 

1. CONSTRUCTION - BOUYGUES CONSTRUCTION group 


Bouygues Construction SA Saint-Quentin-en-Yvelines, France 99.97 99.97 

Bouygues Bâtiment Île-de-France 

Bouygues Bâtiment Île-de-France SA Saint-Quentin-en-Yvelines, France 99.97 99.97 

Bâtiment France subsidiaries 

Bati Renov SA Orly, France 99.88 99.88 

Brézillon SA Noyon, France 99.33 99.33 

Sodéarif SA Saint-Quentin-en-Yvelines, France 99.96 99.96 

Bouygues Bâtiment International 

Bouygues Bâtiment International SA Saint-Quentin-en-Yvelines, France 99.97 99.97 

Bâtiment International subsidiaries 

Bouygues Hungaria Budapest, Hungary 99.97 99.97 

Bouygues Polska Warsaw, Poland 99.97 99.97 

Bouygues Thaï Ltd Bangkok, Thailand 48.98 48.98 

Bymaro Casablanca, Morocco 99.95 99.95 

DTP Singapour Pte. Ltd Singapore 99.97 99.97 

(1) where percentage control differs from percentage interest 


207

Companies 


% Interest 

% Direct and 


2005 2004 2005 2004 

Companies 


% Interest 

% Direct and 


2005 2004 2005 2004 

1. CONSTRUCTION - BOUYGUES CONSTRUCTION group 

Entreprises France-Europe subsidiaries 

DV Construction SA Mérignac, France 99.97 99.97 

GTB Bouyer Duchemin SA Nantes, France 99.97 99.97 

GFC Construction SA Caluire-et-Cuire, France 99.97 99.97 

Norpac SA Villeneuve-d’Ascq, France 99.97 99.97 

Pertuy Construction SA Maxeville, France 99.97 99.97 

Quille SA Rouen, France 99.97 99.97 

Acieroïd SA and its subsidiaries 

(formerly Acieroïd Espagne) Barcelona, Spain 99.97 99.97 

Bouygues UK Ltd and its subsidiaries London, United Kingdom 99.97 99.97 

Losinger Construction AG Bern, Switzerland 99.97 99.97 

Bouygues Travaux Publics 

Bouygues TP SA Saint-Quentin-en-Yvelines, France 99.97 99.97 

Basil Read Ltd and its subsidiaries Johannesburg, South Africa Divested 70.61 

Prader Losinger SA Sion, Switzerland 99.64 99.64 

Prader Zurich Zurich, Switzerland 99.90 99.90 

Other subsidiaries Bouygues Construction 

DTP Terrassement SA Saint-Quentin-en-Yvelines, France 99.97 99.97 

Dragages et TP (Hong-Kong) Ltd Hong Kong, China 99.97 99.97 

VSL International Ltd et ses filiales Bern, Switzerland 99.88 99.88 

Groupe Entreprise Transport et Distribution d’Électricité (ETDE) 

ETDE SA and its regional subsidiaries Saint-Quentin-en-Yvelines, France 99.97 99.97 

Axione and its subsidiaries Malakoff, France 99.97 - 

ETDE Réseaux et Communication SA Villebon-sur-Yvette, France 99.97 99.97 

Exprimm SA Saint-Quentin-en-Yvelines, France 99.97 99.97 

Gallet Delage SA Kremlin-Bicêtre, France 99.97 99.97 

Mainguy SAS Vertou, France 99.97 99.97 

Serma SAS and its subsidiaries Champgorgueil, France 99.97 99.97 

Stefal and its subsidiaries Montrouge, France 99.97 - 

Transel SAS Saint-Quentin-en-Yvelines, France 99.97 99.97 

David Webster Lighting and its subsidiaries Hertfordshire, United Kingdom 99.97 - 

Ecovert FM London, United Kingdom 99.97 99.97 

Icel Maidstone Ltd Sittingbourne, United Kingdom 99.97 - 

Société Gabonnaise d’Électrification 

et de Canalisation (Sogec) Libreville, Gabon 84.39 84.39 


Bouygues Bâtiment 

Consortium Stade de France SA La Plaine-Saint-Denis, France 33.32 33.32 

Bouygues TP 

Adelac SAS Archamps, France 39.19 - 

Autoroute de liaison Seine-Sarthe SA Versailles, France 33.16 44.83 

Aka Holding Budapest, Hungary 25.12 25.12 

Bina Fincom Zagreb, Croatia 50.98 50.98 

2. ROADS - COLAS group 


Colas SA and its regional subsidiaries 

(Colas, Screg and Sacer) Boulogne-Billancourt, France 96.42 96.27 

Grands Travaux Océan Indien (GTOI) SA Le Port (La Réunion), France 96.41 96.26 99.99 99.99 

Spac SA and its subsidiaries Clichy, France 96.41 96.27 100.00 99.99 

Seco-Rail Chatou, France 96.41 96.27 100.00 99.90 

Somaro SA Chatou, France 96.41 96.27 100.00 99.99 

Colas Guadeloupe Baie Mahault, France 96.41 96.26 100.00 99.99 

Colas Martinique SA Le Lamentin, France 96.41 96.26 100.00 99.99 

Smac Acieroïd SA and its subsidiaries Boulogne-Billancourt, France 96.41 96.27 100.00 99.99 

Colas Hungaria and its subsidiaries Budapest, Hungary 96.41 96.27 100.00 100.00 

Colas Danmark Virum, Denmark 96.42 96.27 100.00 100.00 

Colas SA and its subsidiaries Lausanne, Switzerland 95.66 95.51 99.22 99.21 

Colas Inc. and its subsidiaries Morristown, New Jersey, USA 96.42 96.27 100.00 100.00 

Colas Maroc and its subsidiaries Casablanca, Morocco 96.35 96.20 100.00 99.93 

Colas UK Ltd and its subsidiaries Rowfant, Crawley, United Kingdom 96.42 96.27 100.00 100.00 

Strada Sroda-Wielkopol, Poland 96.42 56.10 100.00 58.27 

Société routière Colas Gabon Libreville, Gabon 86.67 86.54 89.90 89.89 

Screg Belgium and its subsidiaries Brussels, Belgium 96.41 96.27 100.00 100.00 

Proportionate consolidation 

Carrières Roy SA Saint-Varent, France 48.19 48.12 49.98 49.98 


Cofiroute SA Sèvres, France 16.07 16.05 16.67 16.67 

3. PROPERTY - BOUYGUES IMMOBILIER group 


Bouygues Immobilier Boulogne-Billancourt, France 100.00 100.00 

SNC Bouygues Immobilier 

Entreprises Île-de-France Boulogne-Billancourt, France 100.00 100.00 

SNC Bouygues Immobilier Paris Boulogne-Billancourt, France 100.00 100.00 

SNC Bouygues Immobilier Est Strasbourg, France 100.00 100.00 

SLC and its subsidiaries Lyon, France 100.00 100.00 

Parque Empresarial Cristalia SL Madrid, Spain 100.00 100.00 

SA Bouygues Inmobiliaria Madrid, Spain 100.00 100.00 

C – OTHER SUBSIDIARIES 


Finagestion and its subsidiaries (Africa) Saint-Quentin-en-Yvelines, France 100.00 100.00 

Bouygues Relais SNC Saint-Quentin-en-Yvelines, France 100.00 100.00 

Challenger SNC Saint-Quentin-en-Yvelines, France 100.00 100.00 

Société française de participation 

et gestion (SFPG) SA and its subsidiaries Paris, France 99.76 99.76 

Challenger Reassurance Luxembourg 99.99 99.99 

Uniservice Geneva, Switzerland 99.99 99.99 

208 

(1) where percentage control differs from percentage interest


in French GAAP 

PARENT COMPANY BALANCE SHEET AT 31 DECEMBER 

Assets (in millions of euros) 

Gross 

2005 

Amortisation, 

depreciation 

and impairment: 

2005 

Net 

2005 

Net 

2004 

Net 

2003 

Intangible assets 2 1 1 1 

Property, plant and equipment 

Long-term investments 6,936 9 6,927 7,277 7,823 

Holdings in subsidiaries 

& affiliates 

6,835 4 6,831 6,726 7,187 

Loans / advances to subsidiaries 

& affiliates 68 1 67 541 623 

Other 33 4 29 10 13 

NON-CURRENT ASSETS 6,938 10 6,928 7,277 7,824 

Inventories and work in progress 

Advances and payments on account 

Trade debtors 18 18 19 20 

Other debtors (1) 333 1 332 879 33 

Short-term investments 2,436 2,436 2,507 1,578 

Cash 9 9 9 10 

CURRENT ASSETS 2,796 1 2,795 3,414 1,641 

Other assets 28 28 26 13 

TOTAL ASSETS 9,762 11 9,751 10,717 9,478 

(1) 31 December 2004: includes amount receivable from PAI partners on the sale of Saur 

Liabilities (in millions of euros) 

Net 

2005 

Net 

2004 

Net 

2003 

Share capital 337 333 333 

Share premium and reserves 2,708 2,632 4,348 

Retained earnings 276 42 3 

Net profit for the year 261 586 216 

Restricted provisions 

SHAREHOLDERS’ EQUITY 3,582 3,593 4,900 

Provisions 137 187 177 

Debt 4,101 3,345 2,978 

Advances and progress payments received 

Trade creditors 21 47 28 

Other creditors (2) 87 1,782 19 

LIABILITIES 4,346 5,361 3,202 

BANK OVERDRAFTS AND 

CURRENT ACCOUNTS 

1,823 1,763 1,375 

Other liabilities 1 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 9,751 10,717 9,478 

(2) 31 December 2004: includes exceptional payout made on 7 January 2005 


209


in French GAAP 

INCOME STATEMENT (in millions of euros) 

CASH FLOW STATEMENT (in millions of euros) 

2005 2004 2003 

SALES 64 68 62 

Other operating revenues 18 11 10 

Purchases and changes in inventory 

Taxes other than income tax (2) (2) (2) 

Personnel costs (46) (52) (50) 

Other operating expenses (44) (42) (33) 

Depreciation, amortisation, impairment 

and provisions, net (13) (13) (11) 

OPERATING LOSS (23) (30) (24) 

Financial income and expenses 209 343 189 

PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS 186 313 165 

Exceptional items 113 218 (7) 

Income tax expense (38) 55 58 

NET PROFIT 261 586 216 

2005 2004 

A - OPERATING ACTIVITIES 

Cash flow (from operations, before changes in working capital) 213 294 

Net profit for the year 261 586 

Amortisation, depreciation and impairment of non-current assets, net (12) (154) 

Charges to / reversals of provisions, net (52) 9 

Transfers of deferred charges (5) (6) 

Gain / losses on disposals of non-current assets 21 (141) 

Change in working capital (305) 71 

Current assets (249) (48) 

Current liabilities (56) 119 

NET CASH GENERATED BY / (USED IN) OPERATING ACTIVITIES (92) 365 

B - INVESTING ACTIVITIES 

Increases in non-current assets 

Acquisitions of intangible assets and property, plant and equipment 

Acquisitions of long-term investments (158) (45) 

(158) (45) 

Disposals of non-current assets (1) 26 802 

Investment, net (132) 757 

Other long-term financial investments, net 475 88 

Amounts receivable / payable in respect of non-current assets, net (1) 795 (797) 

NET CASH GENERATED BY / (USED IN) INVESTING ACTIVITIES 1,138 48 

C - FINANCING ACTIVITIES 

Change in shareholders’ equity (2) (18) (1,727) 

Exceptional payout made in 2005 (2) (1,664) 1,664 

Dividends paid (249) (166) 

Change in debt 754 357 

NET CASH GENERATED BY / (USED IN) FINANCING ACTIVITIES (1,177) 128 

CHANGE IN NET CASH POSITION (A+B+C) (131) 541 

Cash position at 1 January 753 212 

Other non-monetary flows 

Change during the year (131) 541 

NET CASH POSITION AT 31 DECEMBER 622 753 

(1) 2004: includes €796 million receivable from PAI partners on sale of Saur, paid 15 February 2005 

(2) 2004: includes €1,664 million exceptional payout, paid 7 January 2005 

210

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 

Contents 

1. Significant events of the year 

2. Accounting policies 

3. Non-current assets 

4. Current assets by maturity 

5. Other assets 

6. Changes in shareholders’ equity 

7. Composition of share capital 

8. Provisions 

9. Liabilities by maturity at the balance sheet date 

10. Details of amounts involving related companies 

11. Financial instruments 

12. Off balance sheet commitments given and received 

13. Sales 

14. Group tax election and income tax expense 

15. Contingent tax position 

16. Average number of employees during the year 

17. Advances, loans and remuneration: directors and senior executives 

18. List of investments 

19. List of subsidiaries and affiliates 

Figures in millions of euros 


211

NOTE 1: SIGNIFICANT EVENTS 

OF THE YEAR 

1.1 Holdings in subsidiaries and 

affiliates 

1.1.1 Significant increases: 

% interest as at 

31/12/2005 31/12/2004 

• Colas €34m 96.42 95.56 

• TF1 €65m 42.89 41.45 

• Novasaur €15m 9.88 - 

1.1.2 Bouygues SA interest in 


The BNP Paribas Group having sought to enhance 

the liquidity of its 6.5% stake in Bouygues 

Telecom, Bouygues granted BNP Paribas a promise 

to buy this stake, exercisable at any time 

between 1 September 2005 and 31 July 2007 at a 

price of between €477 million and €495 million 

depending on the date of exercise. 

In return, BNP Paribas granted Bouygues a promise 

to sell this interest to Bouygues, exercisable 

between 1 September 2007 and 30 September 

2007 at a price of €497 million. 

If the cumulative amount of dividends paid by 

Bouygues Telecom to the BNP Paribas Group 

exceeds €4.6 million, the prices indicated above 

will be reduced by the amount of dividend paid. 

1.1.3 Significant divestments 

• Saur: 

The effects of the sale of Saur were included in 

the financial statements as at 31 December 2004. 

The amount of €796 million receivable from PAI 

partners, included in “Other receivables” as at 

that date, was received in February 2005. 

Following the sale, Bouygues held 15% of Saur’s 

holding company, Novasaur (formerly Financière 

Gaillon). 

In 2005, the interest of Bouygues in Novasaur 

was reduced from 15% to 9.9%. 

• Sale of CATC and Cica to Sogeby, a 100%-owned 

subsidiary of Bouygues SA. 

• Sale of Fibysa to Finagestion, a 100%-owned 

subsidiary of Bouygues SA. 

• Liquidation of the following companies: 

Bymages 4, Financière des Saules, RCS. 

1.2 Treasury shares 

Acquisition of 8,361,649 treasury shares at a 

value of €320 million, classified in “Other longterm 

investments”. These shares were then 

cancelled via capital reductions in June and 

December 2005 (Board decisions of 21 June and 

13 December 2005). 

105,000 treasury shares held under a liquidity 

agreement as at 31 December 2005. 

1.3 SNC Challenger 

On the expiry of the construction lease for 

the Challenger building (December 2005), SNC 

Challenger, the lessor, realised a gross gain of 

€102.91 million, of which €102.90 million was 

recognised in the Bouygues SA income statement 

(in line with its 99.99% interest in SNC 

Challenger). 

In line with standard practice, this gain represents 

the residual value of the building on expiry 

of the lease as estimated at the time of signature 

of the lease, equivalent to the cost of construction 

less the depreciation that would have been 

recognised by the lessor if the building had been 

recorded as asset in its balance sheet over the 

term of the lease. 

The tax arising on this gain has been spread 

over 15 years, and is reflected in the books of 

Bouygues SA by the recognition of a provision for 

income taxes of €37.9 million. 

1.4. Advances to subsidiaries 

and affiliates 

• Bouygues Telecom: reimbursement of advances 

amounting to €498 million. 

• Finagestion: funds of €23.6 million advanced 

during the year. 

1.5. Bond issue 

1.5.1 Bond issue carried out in July 

2005 

• Amount: 

€750 million 

• Rate: 4.25% 

• Issue priced at: 99.804% 

• Repayment terms: repayable in full at par on 

22 July 2020. 

1.5.2 Significant events subsequent 


A €250 million bond issue supplementary to the 

July 2005 issue was launched in January 2006 on 

the same terms (issue priced at 97.203%). 

1.6 Net financial income 

Net financial income amounted to €209 million, 

comprising (in millions of euros): 

- Dividends received and share 

of partnership profits 369 (1) 

- Net interest expense (168) 

- Net change in impairment and 

provisions relating to subsidiaries (5) 

- Gains on disposals of short-term investment 

securities 12 

- Other items 1 

(1) includes €103 million arising on the expiry of the construction 

lease for the Challenger building 

NOTE 2: ACCOUNTING 

POLICIES 

The financial statements have been prepared 

in accordance with the current provisions of 

French law. 

2.1. Intangible assets 

Incorporation costs and research and development 

costs are expensed in full as incurred. 

As a general principle, software acquired from 

third parties is recognised as an intangible asset 

and amortised on a straight-line basis over a 

maximum of five years. 

2.2. Property, plant and 

equipment 

Property, plant and equipment is recognised 

at acquisition cost net of reclaimable taxes. 

Transaction costs that do not form part of the 

market value of the acquired asset are expensed 

as incurred. 

Own production capitalised is recognised at production 

cost plus a percentage of overheads. 

Depreciation is calculated on a straight-line basis, 

according to the nature and estimated useful life 

of each asset component. Where plant and equipment 

is eligible for accelerated tax depreciation, 

an additional depreciation charge is recognised 

in the income statement. 

The application from 1 January 2005 of 

Regulations 2002-10 and 2004-06 of the French 

national accounting standard-setter, the Conseil 

National de la Comptabilité (CNC), relating 

respectively to depreciation and impairment of 

assets and to the recognition and measurement 

of assets, had no material effect on the financial 

statements. 

212

Estimated useful lives and depreciation 

methods 

Buildings 40 years straight-line 

Fixtures and fittings 10 years straight-line 

Computer hardware 3 years straight-line 

Office furniture 10 years straight-line 

2.3. Long-term investments 

2.3.1. Holdings in subsidiaries 

and affiliates and other long-term 

investment securities 

Holdings in subsidiaries and affiliates and other 

long-term investment securities are recognised 

at acquisition cost. Transaction costs that do not 

form part of the market value of the acquired 

asset are expensed as incurred. 

2.3.2. Value in use of holdings in 

subsidiaries and affiliates 

Holdings in subsidiaries and affiliates and other 

long-term investment securities are also measured 

at value in use, determined using objective 

criteria (stock market price for quoted companies, 

shareholders’ equity, profitability), forecast 

data (economic outlook, earnings prospects), or 

any other information indicative of the actual 

value of the asset. 

If value in use is less than cost, a provision for 

impairment is recorded to cover the difference. 

2.3.3. Long-term receivables 

Long-term receivables are shown in the balance 

sheet at face value. If the realisable value (taking 

into account the probability of recovery) is less 

than the carrying amount, a provision for impairment 

is recorded to cover the difference. 

2.4. Receivables and payables 

expressed in foreign currencies 

Receivables and payables expressed in foreign 

currencies are translated at the exchange rate 

prevailing on the balance sheet date, or at the 

hedged rate if the item is covered by a currency 

hedge. 

Unrealised foreign exchange gains and losses are 

taken to suspense accounts in the balance sheet; 

unrealised losses are recognised in the income 

statement by means of a provision. 

2.5. Short-term investments 

The short-term investment portfolio is measured 

in accordance with French accounting standards. 

The value of equity securities, negotiable debt 

instruments and money-market mutual funds 

was determined by reference to the last known 

price on 31 December 2005. In the case of quoted 

securities, the average quoted stock market 

price over the last month of the financial year 

was used. 

2.6. Other assets 

Deferred charges mainly comprise the portion 

of bond issue costs not covered by the issue 

premium. In the case of convertible bonds, any 

unamortised issue costs relating to bonds converted 

into shares are offset against the share 

premium on the newly-issued shares. 

Bond redemption premium relates to the bond 

issues of July 1999, November 2003, October 

2004 and July 2005, which were priced respectively 

at 99.854%, 99.348%, 99.05% and 99.804% 

of the nominal value. 

2.7. Provisions 

These mainly comprise: 

• provisions for income taxes, in particular taxes 

due in respect of rolled-over capital gains and 

split taxes; 

• provisions for additional risks relating to lossmaking 

subsidiaries, established where the 

negative net assets of a subsidiary are not 

wholly covered by provisions for impairment of 

Bouygues SA’s investment in and loans and / or 

advances to that subsidiary; 

• provisions for charges, including retirement 

benefit obligations. With effect from 1 January 

2005, Bouygues SA has adopted the CNC recommendation 

that these obligations be recognised 

as an expense. The effect of this change 

of accounting method was €5.2 million, and was 

offset against retained earnings. 

2.8. Hedging instruments 

Bouygues SA uses hedging instruments to limit 

the impact on the income statement of fluctuations 

in exchange rates and interest rates. 

These instruments share the following characteristics: 

- they are limited to the following products: forward 

currency purchases and sales, currency 

swaps and purchases of currency options for 

currency risk hedging purposes; and interest 

rate swaps, future rate agreements, and purchases 

of caps and tunnels for interest rate risk 

hedging purposes; 

- they are used solely for hedging purposes; 

- they are contracted solely with high-quality 

French and foreign banks; 

- they carry no liquidity risk in the event of a 

downturn. 

Gains and losses on financial instruments used 

for hedging purposes are recognised in the 

income statement symmetrically with gains and 

losses arising on the hedged item. 

2.9. Retirement benefit 

obligations 

Methods and assumptions used in calculating the 

obligation: 

• projected unit credit method based on final 

salary; 

• benefits as defined in agreements or established 

by custom within the company, taking 

into account the new collective agreement 

for managerial grade staff applicable from 

1 January 2005; 

• obligation adjusted to comply with CNC recommendations 

of July 2000, April 2003 and March 

2004; 

• vested rights as of 31 December 2005; 

• employees classified in groups with similar 

characteristics in terms of grade, age and 

length of service; 

• average monthly salary for each employee 

group, uplifted by a percentage to reflect the 

applicable rate of employer’s social security 

charges; 

• salary inflation rate: 4.30%; 

• discount rate: 3.57%; 

• average employee turnover rate calculated on 

the basis of average number of leavers in the 

years 1999 to 2004; 

• life expectancy by reference to 1993 mortality 

tables. 

2.10. Consolidation 

Bouygues SA is the ultimate parent company in 

the consolidation. 


213

NOTE 3: NON-CURRENT ASSETS 

Intangible assets 

Balance at 

1 Jan. 2005 

Increases 

Decreases 

Balance at 

31 Dec. 2005 

Software 2 2 

Other 

Gross value 2 2 

Accumulated amortisation (1) (1) 

Net value 1 1 

Property, plant and equipment 

Land and buildings 

Other 

Gross value 

Accumulated depreciation 

Net value 

Long-term investments 

Holdings in subsidiaries 

& affiliates 

6,743 123 31 6,835 

Loans / advances to subsidiaries 

& affiliates (1) 543 29 504 68 

Other 14 386 367 33 

Gross value 7,300 538 902 6,936 

Impairment (24) (15) (9) 

Net value 7,276 538 887 6,927 

Total net value 7,277 538 887 6,928 

(1) of which amounts falling due after more than one year Gross value 

Loans / advances to subsidiaries & affiliates 68 

NOTE 4: CURRENT ASSETS BY MATURITY 

Advance payments and payments on account 

Gross < 1 year > 1 year 

Trade debtors 27 21 6 

Other debtors 324 280 44 

Total 351 301 50 

NOTE 5: OTHER ASSETS 

Balance at 

1 Jan. 2005 

Increases 

in the year 

Amortisation 

for the year 

Balance at 

31 Dec. 2005 

amount due 

in < 1 year 

Bond issue costs 11 5 2 14 2 

Total deferred charges 11 5 2 14 2 

Bond redemption premium 14 1 2 13 2 

Other 1 1 1 1 1 

Total 26 7 5 28 5 

NOTE 6: CHANGES IN SHAREHOLDERS’ EQUITY 

Shareholders’ equity at 31 December 2004 (before appropriation of profits) 3,593 

Profits appropriated to shareholders’ equity 585 

Dividends paid (249) 

Shareholders’ equity after appropriation of profits 3,929 

Changes in share capital 4 

Changes in share premium and reserves (613) 

Net profit for the period 261 

Shareholders’ equity at 31 December 2005 3,581 

214

NOTE 7: COMPOSITION OF SHARE CAPITAL 

Number of 

voting rights 

Number of 

shares 

Number of 

investment 

certificates 

Total 

Start of period 418,308,600 332,254,414 504,210 332,758,624 

Movement during 

the period 

5,423,643 4,034,615 (1) (30,343) 4,004,272 

End of period 423,732,243 336,289,029 473,867 336,762,896 

Par value: €1 

Maximum number of 

potentially dilutive shares: 

21,427,587 

(1) Movements in number of shares during the period: 

Increases: 12,396,264 by exercise of stock options, conversion of investment certificates 

and Bouygues Confiance 3 plan 

Diminutions : 1,048,873 by cancellation of treasury shares pursuant to the Board decision of 21 June 2005 

NOTE 8: PROVISIONS 

7,312,776 by cancellation of treasury shares pursuant to the Board decision of 13 December 2005 

Balance 

1 Jan. 2005 

Interaccount 

transfers 

Charge for 

the year 

Reversals during the year Balance at 

31 Dec. 2005 

Used Unused 

Provisions for subsidiaries 1 1 1 1 

Provisions for taxes 164 (1) 10 49 50 74 

Other provisions 9 8 9 8 

Provisions for risks 174 (1) 19 58 51 83 

Provisions for charges 12 54 (1) 12 54 

Total 

Provisions charged / reversed 

as operating items 


as financial items 


as exceptional items 

186 (1) 73 70 51 137 

16 12 

7 

(1) 

50 109 

73 121 

(1) includes €5 million for the provision for retirement benefit obligations recognised at 1 January 2005 and offset against retained earnings 

121 

NOTE 9: LIABILITIES BY MATURITY AT THE BALANCE SHEET 

DATE 

Debt 

Liabilities 

Bond issues 

Gross 

value 

< 1 year 

July 1999 bond issue (1) 512 512 

1 to 5 

years 

May 2002 bond issue2 (2) 1,037 37 1,000 

> 5 years 

November 2003 bond issue (3) 780 30 750 

October 2004 bond issue (4) 1,008 8 1,000 

July 2005 bond issue (5) 764 14 750 

Bank borrowings 

Total debt 4,101 601 1,000 2,500 

Trade creditors 21 21 

Other creditors 87 85 2 

(6) 

Bank overdrafts and current accounts 1,823 1,823 

Deferred income 

Total 6,032 2,530 1,002 2,500 

Original amounts, excluding accrued interest 

(1) July 1999 bond issue: 

Amount: FRF 3,280 million, i.e. €500 million - rate: 4.875% 

Redemption terms: redeemable in full on 3 July 2006 at par 

(2) May 2002 bond issue: 

Amount: €750 million in May 2002 and €250 million 

in December 2002 - rate: 5.875% 

Redemption terms: redeemable in full on 15 May 2009 at par 

(3) November 2003 bond issue: 

Amount: €750 million - rate: 4.625% 

Redemption terms: redeemable in full on 25 February 2011 at 

par 

(4) October 2004 bond issue: 

Amount: €1 billion - rate: 4.375% 

Redemption terms: redeemable in full on 29 October 2014 at 

par 

(5) July 2005 bond issue: 

Amount: €750 million - rate: 4.250% 

Redemption terms: redeemable in full on 22 July 2020 at par 

(6) Tax due in full discharge on special long-term capital gains 

reserve 


215

NOTE 10: DETAILS OF AMOUNTS INVOLVING RELATED 

COMPANIES 

Assets 

Long-term investments 6,903 Debt 

Amount Amount 

Liabilities 

Trade debtors 17 Trade creditors 3 

Other debtors 226 Other creditors 7 

Cash and current accounts 

Bank overdrafts and current 

accounts 

1,823 

Total 7,146 Total 1,833 

Expenses 

Income 

Operating expenses 8 Operating income 62 

Financial expenses 23 Financial income 377 

Income tax expense Income tax credits 189 

Total 31 Total 628 

NOTE 11: FINANCIAL INSTRUMENTS 

11.1 Interest rate hedges 

Amount outstanding at 31 December 2005 

by maturity 


2006 

2007 

- 2010 

After 

On financial assets 300 300 

On financial liabilities 200 200 

11.2 Currency hedges 

Amount outstanding at 31 December 2005 

by currency 

Forward currency contracts 

Forward purchases 

Forward sales 

Total 

CHF GBP USD Other Total 

Currency swaps 37 37 

11.3 Options 

CALLS: At 31 December 2005, Bouygues SA held 5,339,650 call options on Bouygues shares (€51.3 million) 

and 0.358 calls in connection with the Bouygues Confiance 2 plan (immaterial). 

NOTE 12: OFF BALANCE SHEET COMMITMENTS 

Commitments given (contingent liabilities) 

Amount of 

guarantee 

Acquisitions of Bouygues SA shares 11 

Retirement benefit obligations 7 

Other commitments given 

(1) 

497 

Total 515 

Commitments received (contingent assets) 

Other commitments received 

(1) 

497 

Total 497 

(1) gross value of the BNP Paribas put option for Bouygues Telecom shares, valuation as at 21 June 2005 

of which 

related 

companies 

In the past, before the construction business was spun off into separate subsidiaries, Bouygues SA 

issued performance bonds in connection with its ordinary activities. Some of these performance bonds 

have been retained by the company, although the contracts were executed by its subsidiaries; they are 

not quantified or disclosed specifically unless they are liable to result in the Group being obliged to 

make a payment. 

In such cases, a provision is recorded to cover the amount involved. 

NOTE 13: SALES 

Sales recorded by Bouygues SA mainly comprise shared costs recharged to subsidiaries. 

The market value of the portfolio of hedging instruments at 31 December 2005 was + €11.9 million 

216

NOTE 14: GROUP TAX ELECTION AND INCOME TAX EXPENSE 

Bouygues made a group tax election in 1997 under article 223 A-U of the French General Tax Code; this 

election still applies. 

In addition to Bouygues SA, the group tax election included 77 subsidiaries in 2005. 

Each company in the tax group recognises its own income tax expense as though the group election is 

not in place; the parent company recognises any tax savings. 

At the end of the period, Bouygues SA recognised net income tax expense, comprising: 

NOTE 15: CONTINGENT TAX POSITION 

At 1 January 

2005 

Movements 

in the year 

At 31 December 

2005 

Assets Liabilities Assets Liabilities Assets Liabilities 

Non-deductible expenses: 

Provision for income taxes 186 47 121 112 

Other provisions 9 16 8 17 

Total 195 63 129 129 

Expenses deducted for tax purposes, 

and income liable to tax but not recognised 

for accounting purposes 

Unrealised foreign exchange losses 

Unrealised foreign exchange gains 

Short-term Long-term Total 

Net income tax expense on 

Profit before tax and exceptional items 49 49 

Other non-exceptional items: provision for split taxes (38) (38) 

Exceptional items (186) (52) (238) 

(175) (52) (227) 

Tax gain from group tax election 183 6 189 

(income tax received from profit-making subsidiaries 

in the tax group) 

Total 8 (46) (38) 

Unrealised foreign exchange 

gains / losses, net 

Deferred charges 

Share of losses of general partnerships 7 7 

Capitalisation bonds 2 2 9 9 

Bouygues Confiance 2 calls 3 3 

Other income and expenses 3 2 9 12 7 9 

Total 3 2 9 12 7 9 

NOTE 16: AVERAGE NUMBER OF EMPLOYEES DURING THE YEAR 

2005 2004 

Managerial 148 173 

Administrative / clerical, technical and supervisory 47 54 

Total 195 227 

NOTE 17: ADVANCES, LOANS AND REMUNERATION: DIRECTORS 

AND SENIOR EXECUTIVES 

Remuneration of directors and senior executives: 

• The total amount of direct and indirect remuneration of all kinds received from French and foreign companies 

by senior executives (CEO and deputy CEOs) was as follows: €3 million of basic remuneration, €3.8 million 

of variable remuneration paid in early 2006 based on 2005 performance, and €0.24 million of directors’ 

fees. 

• Directors’ fees paid to members of the Board of Directors and non-voting supervisors: €0.5 million 

NOTE 18: LIST OF INVESTMENTS AT 31 DECEMBER 2005 

Holdings in subsidiaries and affiliates 

Number 

of shares 

% 

Estimated 

value (1) 

TF1 91,796,565 42.885 2,152 

(a) 

Bouygues Telecom 33,260,254 82.198 4,122 

Colas 31,006,010 96.419 1,610 

Bouygues Immobilier 44,994 99.987 284 

(b) 

Bouygues Construction 1,705,126 99.935 414 

(b) 

Other investments 182 

Total holdings in subsidiaries and investments 8,764 

Negotiable debt instruments and money-market mutual 

funds 

2,282 

Capitalisation bonds 132 

(a) 

Other investments 28 

(a) 

Total short-term investments 2,442 

Total investments 11,206 

(1) In most cases, this is the carrying amount in the balance sheet. The following values are stated if they are greater than the carrying 

amount: 

(a) stock market value (closing price for equities, average price for the last month of the year for bonds) 

(b) share of consolidated net assets 


217

NOTE 19: LIST OF SUBSIDIARIES AND AFFILIATES 

Share 

capital (1) 

Other shareholders’ 

equity (1) (7) % 

Book value of 

investment (2) 

Gross Net 

Loans 

& 

advances 

Guarantees (2) Sales (2) Net profit / 

(loss) (2) 

Dividends 

received (2) 

A - Detailed information 

1. Subsidiaries (interest more than 50%) 

France 

Bouygues Construction 128 286 99.935 59 59 6,131 175 50 

(5) 

Bouygues Immobilier 69 215 99.987 245 245 1,557 90 44 

(5) 

Bouygues Telecom 617 1,515 82.198 4,122 4,122 4,537 352 

(5) 

Bouygues Relais 1 98.947 1 

C2S 99.960 1 1 8 

Colas 48 1,403 96.419 1,611 1,611 9,540 307 104 

(5) 

Finagestion 2 99.838 67 274 (17) 

(5) 

SFPG 99.760 4 

(6) 

SNC Challenger 107 99.990 15 15 15 107 

Sotegi 99.760 

(6) 

Total 6,053 6,053 67 22,062 1,019 198 

Other countries 

Uniservice 51 17 99.990 32 32 4 3 

Total 32 32 4 3 

2. Affiliates (interest 10% or more, but less than 50%) 

France 

TF1 43 1,008 42.885 730 730 2,874 236 59 

(5) 

Novasaur 38 (38) 9.830 15 15 

Total 745 745 2,874 236 59 


Total - - 

B - Aggregate information 

3. Other subsidiaries 

France (1) 

(3) 

Other countries 4 7 

4. Other affiliates 

France 1 1 1 38 1 

(4) 


Overall total 6,835 6,831 68 24,981 1,259 260 

Comments 

(1) in the local functional currency 

(2) in euros 

(3) revaluation difference 

(4) impairment of loans / advances: €1 million 

(5) parent company of a sub-group: consolidated reserves, sales 

and net profit for the sub-group 

(6) year ended 30 November 

(7) including net profit for the year 

218

Annual general 

meeting 

of 27 April 2006 

Agenda 220 

Board of Directors' reports 221 

Auditors' reports 225 

Reconstitution of investment certificates 

and voting right certificates as shares 233 

Draft resolutions 239

AGENDA 

1. ORDINARY PART 2. EXTRAORDINARY PART 

● Board of Directors’ report on the company’s 

situation and operations in 2005. 

● Chairman’s report on the preparation and 

organisation of the Board’s work and on the 

internal control procedures introduced by the 

company. 

● Auditors’ reports for 2005. 

● Auditors’ observations on the Chairman’s 

report concerning internal control procedures 

relating to the preparation and treatment of 

accounting and financial information. 

● Board of Directors’ special report on stock 

options. 

● Approval of the parent company financial 

statements for the year ended 31 December 

2005 as presented by the Board. 

● Approval of the consolidated financial statements 

for the year ended 31 December 2005 

as presented by the Board. 

● Appropriation of earnings for 2005. 

● Transfer of the balance of the special longterm 

capital gains reserve to the “Other 

reserves” account. 

● Approval of the agreements referred to in 

Article L. 225-38 of the Commercial Code. 

● Ratification of the co-option of two directors 

(Patricia Barbizet and François-Henri Pinault). 

● Renewal of the term of office of three directors 

(Martin Bouygues, Monique Bouygues and 

Georges Chodron de Courcel). 

● Appointment of a new director (François 

Bertière). 

● Ratification of the Board’s decision to move 

the registered office. 

● Authorisation given to the Board of Directors 

with a view to enabling the company to buy 

back its own shares or investment certificates. 


to issue equity warrants in the event of a 

tender offer for the company’s shares. 

● Board of Directors’ and auditors’ reports. 

● Board of Directors’ report on the reconstitution 

of investment certificates and voting right 

certificates as shares. 

● Expert appraiser’s report on special privileges. 

● Reconstitution of investment certificates and 



to use delegations and authorisations in order 

to increase the company’s share capital in 

the event of a tender offer for the company’s 

shares. 


to issue equity warrants in the event of a 

tender offer for the company’s shares. 


to reduce the company’s share capital by the 

cancellation of treasury stock. 

● Delegation of powers for the Board of Directors 

to issue non-voting preference shares having 

the same rights as investment certificates. 

● Amendment of the by-laws. 

● Powers to carry out formalities. 

220

BOARD OF DIRECTORS' REPORTS 

BOARD OF DIRECTORS’ 

REPORT AND REPORT ON THE 

RESOLUTIONS PUT TO THE 

ANNUAL GENERAL MEETING 

Ladies and gentlemen, 

We have called you to this Annual General Meeting 

to ask you to approve twenty-one resolutions, the 

contents of which are described in this report. 

REPORT ON RESOLUTIONS 

WITHIN THE COMPETENCE OF 

THE ORDINARY PART OF THE 

MEETING 

Approval of accounts 

The first three resolutions concern approval of 

the annual accounts of Bouygues SA and the consolidated 

financial statements as at 31 December 

2005, the appropriation of earnings and the 

payment from 3 May 2006 of a dividend of €0.90 

per share and per investment certificate, payable 

in cash. 

Information about the company’s management 

in 2005, the company accounts and the consolidated 

financial statements and the proposed 

appropriation of earnings is contained in the 

report on the company’s operations in 2005. 

Shareholders wishing to receive this report or 

the auditors’ reports may obtain them by returning 

the document request form attached to the 

notice of the meeting. 

Transfer of the balance of the 

special long-term capital gains 

reserve 

The fourth resolution concerns the transfer of 

€183,615,274.88 from the special long-term capital 

gains reserve to “Other reserves” in accordance 

with Article 39 IV of the Supplementary Finance 

Act 2004 (Act 2004-1485 of 30 December 2004). 

Regulated agreements 

The fifth resolution concerns approval of the 

agreements referred to in Article L. 225-38 of 

the Commercial Code, which are the subject of a 

special report from the auditors. 

Ratification, renewal and 

appointment of directors 

The sixth and seventh resolutions concern the 

ratification of the co-option as director of: 

• Mrs Patricia Barbizet, replacing Artémis, for 

the latter company’s remaining term of office, 

i.e. on conclusion of the Annual Meeting called 

to approve the accounts for 2007; 

• Mr François-Henri Pinault, replacing Financière 

Pinault, for the latter company’s remaining 

term of office, i.e. on conclusion of the Annual 

Meeting called to approve the accounts for 

2009. 

In the eighth, ninth and tenth resolutions, 

you are asked to renew the appointment, for a 

three-year term expiring on conclusion of the 

Annual Meeting called to approve the accounts 

for 2008, of: 

• Mr Martin Bouygues; 

• Mrs Monique Bouygues; 

• Mr Georges Chodron de Courcel. 

In the eleventh resolution, you are asked to 

appoint as director, for a three-year term expiring 

on conclusion of the Annual Meeting called to 

approve the accounts for 2008: 

• Mr François Bertière. 

Move of the registered office 

The twelfth resolution concerns the ratification 

by the shareholders’ meeting, in accordance with 

Article L. 225-36 of the Commercial Code, of the 

decision made by the Board of Directors at the 

meeting of 28 February 2006 to move the registered 

office to 32 avenue Hoche, 75008 PARIS, as 

of 1 July 2006. 

Stock buy-back programme 

In the thirteenth resolution, the Board asks 

you to authorise it to have the company buy its 

own shares or investment certificates under the 

terms of Articles L. 225-209 to L. 225-212 of the 

Commercial Code. 

According to this regulation, the total number 

of shares and investment certificates purchased 

may not exceed 10% of the share capital. The unit 

purchase price may not be more than €80 per 

share or investment certificate and the sale price 

may not be less than €30 per share or investment 

certificate, subject to any adjustments relating to 

transactions involving the share capital. 

This authorisation, which will replace the 

one given by the Annual General Meeting of 

28 April 2005, is requested for a period of eighteen 

months and is intended to enable the 

company, in compliance with the provisions of 

Commission Regulation (EC) No. 2273/2003 of 

22 December 2003 and Articles 241-1 to 241-6 

of the General Regulations of the Autorité des 

Marchés Financiers: 

• to ensure the liquidity of and organise the 

market for the shares, through an investment 

service provider acting independently under 

the terms of a liquidity agreement; 

• to remit shares on the exercise of rights 

attached to transferable securities; 

• to keep shares with a view to using them 

subsequently for payment or exchange in the 

context of acquisitions; 

• to allocate shares to employees or corporate 

officers under the terms and conditions provided 

by law; 

• to cancel shares subject to specific authorisation 

from the shareholders’ meeting (to be 

conferred by the eighteenth resolution); 

• to implement any market practice accepted 

by the Autorité des Marchés Financiers and 

generally to carry out any other transaction in 

compliance with the prevailing regulations. 

We ask you to allocate a maximum total amount 

of one and a half billion euros (€1,500,000,000) 

to the buy-back programme, a description of 

which is given in the special report on the stock 

buy-back programme. 

ANNUAL GENERAL REPORT 

221

Issue of equity warrants in the 

event of a tender offer 

The fourteenth resolution will not be submitted 

to the shareholder vote on the assumption that, 

at the date of the shareholders’ meeting, the law 

concerning public takeover bids will have been 

definitively adopted providing for a vote at the 

extraordinary shareholders’ meeting for this type 

of delegation. A similar resolution is provided 

for in the extraordinary part of the meeting (the 

seventeenth resolution). 

This resolution aims to authorise the Board of 

Directors, assuming that this power is permitted 

by prevailing laws and regulations, to issue 

equity warrants allowing holders to subscribe 

to shares in the company under preferential 

conditions and to allocate these warrants to 

shareholders at no cost in the event of a tender 

offer for the company’s shares. 

The aim is to apply the principle of reciprocity, i.e. 

to avoid your company having to gain authorisation 

from the Annual General Meeting during the 

offer period to take steps that may cause the 

offer to fail, when the bidder is not itself subject 

to the same or similar requirements. 

This authorisation is given for eighteen months. 

REPORT ON RESOLUTIONS 

WITHIN THE COMPETENCE OF 

THE EXTRAORDINARY PART OF 

THE MEETING 

Reconstitution of investment 

certificates and voting right 

certificates as shares 

The fifteenth resolution will only be submitted 

to the shareholder vote if the special meeting 

of holders of voting right certificates, due to be 

held by first notice on 12 April 2006, or in the 

event that a quorum is not obtained, by second 

notice on 26 April 2006, approves the proposal 

relating to the reconstitution of investment certificates 

and voting right certificates as shares. 

Information about this transaction is provided 

in our report on the reconstitution of investment 

certificates and voting right certificates as 

shares and in the expert appraiser’s report on 

special privileges. 

Capital increases in the event 

of a tender offer 

The sixteenth resolution aims to allow the 

Board of Directors to use the different delegations 

and authorisations provided by the general 

meeting of 28 April 2005 to increase the company’s 

share capital in the event of a tender offer 

for the company’s shares, assuming that the use 

of these authorisations is permitted by prevailing 

laws and regulations. 







This authorisation is given for fourteen months. 

Issue of equity warrants in the 

event of a tender offer 

The seventeenth resolution will not be submitted 

to the shareholder vote on the assumption 

that, at the date of the shareholders’ meeting, 

the law concerning public takeover bids will have 

been definitively adopted providing for a vote at 

the ordinary shareholders’ meeting for this type 

of delegation. A similar resolution is provided for 

in the ordinary part of the meeting (fourteenth 

resolution). 

This resolution aims to authorise the Board of 

Directors, assuming that this power is permitted 

by prevailing laws and regulations, to issue 

equity warrants allowing holders to subscribe 

to shares in the company under preferential 

conditions and to allocate these warrants to 

shareholders at no cost in the event of a tender 

offer for the company’s shares. 







This authorisation is given for eighteen months. 

Reduction of the share capital 

by cancellation of treasury 

stock 

In accordance with Article L. 225-209 of the 

Commercial Code, the purpose of the eighteenth 

resolution is to authorise the Board of Directors, 

with the option of delegating such powers to 

any person authorised by law, to cancel, on one 

or more occasions, at its own discretion, up to 

a limit of 10% of the share capital in any 24- 

month period, all or some of the shares that the 

company holds or may hold as a result of using 

the various purchase authorisations given by 

the shareholders’ meeting to the Board, and to 

reduce the share capital by the same amount. 

This authorisation is given for eighteen months 

and cancels any previous authorisation having 

the same purpose. 

Non-voting preference shares 

having the same rights as 

investment certificates 

The nineteenth resolution will only be submitted 

to the shareholder vote if the fifteenth 

resolution (reconstitution of investment certificates 

and voting right certificates as shares) is 

not approved. The purpose of this resolution is 

to delegate powers to the Board of Directors to 

decide, in cases where the prevailing regulations 

so provide, to issue, buy back and convert nonvoting 

preference shares having the same rights 

as investment certificates and all transferable 

securities of whatever kind giving access by all 

means, immediately and/or in the future, to nonvoting 

preference shares having the same rights 

as investment certificates. 

The nominal amount of all preference shares 

issued under the terms of the delegation may not 

exceed €10,000,000 (ten million euros) or 25% of 

the share capital. 

222

This delegation is granted to the Board for eighteen 

months as of the date of the meeting. 

The twentieth resolution concerns the amendment 

of article 18 of the by-laws (Supervisors) to 

reduce the term of office of supervisors from six 

years to three years; this amendment applies to 

supervisors appointed or whose terms of office 

are renewed after the shareholders’ meeting of 

27 April 2006. 

Powers 

The twenty-first resolution concerns powers to 

accomplish formalities relating to both the ordinary 

and the extraordinary part of the meeting. 

* * 

* 

Information about the conduct of the company’s 

business, which we have a statutory obligation 

to provide, is contained in the business report 

communicated to you. 

We ask you to vote on the resolutions put to 

you. 


SUPPLEMENTARY REPORT 

OF THE BOARD OF 

DIRECTORS ON THE CAPITAL 

INCREASE RESERVED 

FOR BOUYGUES GROUP 

EMPLOYEES SUBSCRIBING 

TO THE BOUYGUES GROUP 

CORPORATE SAVINGS PLAN 

(Article 155-2 of the decree of 23 March 1967 on 

commercial companies) 


We remind you that at the Annual General 

Meeting of 28 April 2005, you granted the Board 

of Directors powers to decide, for a period of 

twenty-six months, at its own discretion, to 

increase the share capital, on one or more occasions, 

up to a limit of 10% of the share capital, 

through the issue of new shares to be paid up 

in cash reserved for Bouygues employees and 

employees of affiliated companies subscribing to 

a corporate savings plan. 

You delegated to the Board of Directors, with the 

option of subdelegating to the Chief Executive 

Officer or, with his consent, to one or more 

Deputy CEOs, all powers to carry out such capital 

increases and to set the definitive terms and 

conditions. 

We also remind you that the special meeting 

of holders of investment certificates on 28 

April 2005 noted that, in accordance with the 

law, holders of investment certificates have no 

preferential right of subscription to non-voting 

preference shares having the same rights as 

investment certificates if ordinary shares are 

issued under this delegation of powers. 

Using the powers thus delegated to it, the Board 

of Directors decided at its meeting of 21 June 

2005 to carry out a capital increase reserved for 

employees in order to meet the high expectations 

of the Group’s employees and to help to 

maintain a sense of unity between employees of 

the Group’s subsidiaries. 

This capital increase, carried out in the form of 

an employee share ownership scheme created 

specifically for this purpose, to be approved by 

the Autorité des Marchés Financiers, will be limited 

to a maximum of €250 million (including the 

issue premium). 

This is a leverage operation to increase employees’ 

investment, as under the terms of the 

exchange transaction between the employee 

share ownership scheme and the bank, the personal 

contribution from each employee will be 

topped up with a contribution from the bank 

equal to nine times the employee’s personal 

contribution. 

Therefore, when they withdraw from the scheme, 

employees will receive a percentage of the capital 

gain on the total shares purchased thanks to 

their personal contribution and the bank’s contribution 

corresponding to the difference between 

the share price at the time of withdrawal from 

the scheme and the subscription price before the 

20% discount, multiplied by the total number of 

shares purchased. 

This is a risk-free transaction as irrespective of 

Bouygues’ share price performance, employees 

will benefit from a guaranteed return on their 

personal contribution. 

The subscription price was set at 80% of the 

average opening share price quoted during the 

twenty trading days prior to 21 June 2005, i.e. 

€25.07. 

Shares subscribed through the employee share 

ownership scheme will bear interest on 1 January 

2005; the new shares will be assimilated into 

existing shares. 

The subscription period will begin on 1 November 

2005 at the earliest and end on 31 December 

2005 at the latest. The Chairman will determine 

the terms for the payment of subscriptions. 

In accordance with the decision of the Annual 

General Meeting of 28 April 2005, the number of 

shares offered is equal to less than 10% of the 

share capital. The maximum number of shares 

that can be created given the authorised amount 

and the subscription price is 9,972,078 shares, 

equal to 3% of the share capital. 

The impact of the issue of up to 9,972,078 new 

shares on a shareholder owning 1% of Bouygues’ 

share capital and not subscribing to the capital 

increase would be as follows: 

Percentage stake 

Before issue 1% 

After issue of a maximum 

of 9,972,078 new shares 0.97% 

Furthermore, the impact of this issue on the 

proportion of consolidated shareholders’ equity 

(Group share) as at 31 March 2005 for a shareholder 

owning one Bouygues share and not 

subscribing to the capital increase would be as 

follows: 

Share of shareholders’ equity 

Group share as at 31 March 2005 

Before issue €12.26 

After issue of a maximum 

of 9,972,078 new shares €12.63 

Given the issue price and the volume of the transaction, 

it is unlikely to have a significant impact 

on the share price. 

The Board of Directors has also decided that the 

proposed capital increase will be combined with 

a buy-back of treasury stock to limit the dilutive 

impact of the capital increase. 

In accordance with the provisions of Article 155-2 

paragraph 3 of the decree of 23 March 1967, this 

report will be available to shareholders at the 

Company’s registered office within two weeks 


223

after the Board meeting and will be brought to 

the attention of shareholders at the next general 

shareholders’ meeting. 



SPECIAL REPORT ON STOCK 

OPTIONS 

This report can be found in the Legal and financial 

information section, pages 129 and 130 of this 

document. 


SPECIAL REPORT ON BUY- 

BACKS OF SHARES 


information section, pages 138 and 139 of this 

document. 

CHAIRMAN’S REPORT ON 

THE PREPARATION AND 

ORGANISATION OF THE 

BOARD’S WORK AND ON 

THE INTERNAL CONTROL 

PROCEDURES INTRODUCED 

BY THE COMPANY 


information section, pages 108 to 125 of this 

document. 

224

AUDITORS' REPORTS 

AUDITORS’ GENERAL REPORT ON THE ANNUAL ACCOUNTS 


In accordance with the terms of our appointment 

at your Annual General Meeting, we hereby submit 

our report for the year ended 31 December 

2005: 

• our audit of the annual accounts of Bouygues 

as attached to this report, 

• the substantiation of our opinion, 

• the specific verifications and information 

required by law. 

The annual accounts are the responsibility of 

the Board of Directors. Our responsibility is to 

express an opinion on them based on our audit. 

I - Opinion on the annual 

accounts 

We conducted our audit in accordance with the 

prevailing standards of the profession in France. 

Those standards require that we plan and perform 

our audit to obtain reasonable assurance 

that the annual accounts are free of material misstatement. 

An audit includes examining, on a test 

basis, evidence supporting the amounts in the 

accounts. An audit also includes assessing the 

accounting principles used and significant estimates 

made in the preparation of the accounts 

and evaluating their overall presentation. We 

believe that our audit provides a reasonable 

basis for our opinion. 

In our opinion, the annual accounts give a true 

and fair view, according to French accounting 

principles, of the results of operations for the 

year ended 31 December 2005 and of the company’s 

financial situation and assets at that date. 

Without prejudice to the opinion given above, 

and in accordance with article L. 232-6 of the 

Commercial Code, we draw your attention to the 

two changes in accounting methods that took 

place during the year, resulting from: 

• the first-time application of CRC regulations 

2002-10 relating to asset depreciation and 

write-downs and 2004-06 relating to the definition, 

recognition and valuation of assets, as 

discussed in note 2-2 to the parent company 

financial statements. 

• the first-time provisioning of termination benefits, 

according to the terms set out in note 2-7 

of the notes to the parent company financial 

statements. 

II - Substantiation of our 

opinion 

Pursuant to the provisions of Article L. 823-9 of 

the Commercial Code concerning substantiation 

of our opinion, we bring to your attention the 

following items of information: 

The equity securities appearing as assets on your 

company’s balance sheet are valued using the 

methods described in note 2.3 of the notes to the 

parent company financial statements. We have 

carried out specific assessments of the elements 

taken into consideration for estimating book values 

and, where relevant, verified the calculation 

of impairment provisions. These assessments do 

not call for any particular comment on our part 

as regards the methods used or the reasonable 

nature of the information provided in the notes 

to the financial statements. 

The assessments thus made form part of our 

audit of the annual accounts taken as a whole 

and have thus contributed to the formation of 

our opinion expressed in the first part of this 

report. 

III - Specific verifications 

and information 

We have also carried out the specific verifications 

required by law in accordance with the prevailing 

standards of the profession in France. 

We are also satisfied that the information given 

in the Board of Directors’ business report and 

in the documents provided to shareholders 

concerning the financial situation and annual 

accounts is fairly stated and agrees with the 

annual accounts. 

As required by law, we have satisfied ourselves 

that information relating to acquisitions of equity 

and controlling interests and the identity of 

shareholders has been provided to you in the 

business report. 

Paris-La Défense, 9 March 2006 

The Auditors 

Ernst & Young Audit 

Jean-Claude Lomberget 

Mazars & Guérard 

Michel Rosse 


225

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 


In accordance with the terms of our appointment 

at your Annual General Meeting, we have 

audited the consolidated financial statements of 

Bouygues for the year ended 31 December 2005 

as attached to this report. 

The consolidated financial statements are the 

responsibility of the Board of Directors. Our 

responsibility is to express an opinion on them 

based on our audit. These financial statements 

have been prepared for the first time in accordance 

with IFRS as adopted in the European 

Union. For comparison purposes, they contain 

figures relating to 2004 that have been adjusted 

to reflect the impact of these accounting standards. 

I - Opinion on the consolidated 

financial statements 

We conducted our audit in accordance with 

the professional standards applicable in France. 

Those standards require that we plan and perform 

our audit to obtain reasonable assurance that the 

consolidated financial statements are free of 

material misstatement. An audit includes examining, 

on a test basis, evidence supporting the 

amounts in the accounts. An audit also includes 

assessing the accounting principles used and significant 

estimates made in the preparation of the 

financial statements and evaluating their overall 

presentation. We believe that our audit provides 

a reasonable basis for our opinion. 

In our opinion, the 2005 consolidated financial 

statements give a true and fair view, according 

to IFRS as adopted in the European Union, of 

the assets, financial situation and results of the 

group formed by the persons and entities within 

the scope of consolidation. 

II - Substantiation of our 

opinion 

Pursuant to the provisions of Article L. 823-9 of 

the Commercial Code concerning substantiation 

of our opinion, we bring to your attention the 

following items of information: 

Loss-of-value tests were carried out on intangible 

fixed assets and goodwill as described in note 

2.6.4 of the notes to the consolidated financial 

statements. We examined the methods for carrying 

out the tests and the assumptions on which 

they were based. 

Current and non-current provisions appearing on 

the balance sheet in amounts of €676 million and 

€1,265 million respectively were valued using the 

rules and methods described in notes 2.11.2 and 

2.10.2 to the consolidated financial statements. In 

the light of the information available to date, our 

assessment of the provisions is based in particular 

on an analysis of the processes used by senior 

management to identify and assess the risks. 

The assessments thus made form part of our 

audit of the consolidated financial statements 

taken as a whole and have thus contributed to 

the formation of our opinion expressed without 

qualification in the first part of this report. 

III - Specific verifications 

We have also examined the information contained 

in the Board of Directors’ business report 

in accordance with the prevailing standards of 

the profession in France. We are satisfied that 

the information is fairly stated and agrees with 

the consolidated financial statements. 


The Auditors 




Michel Rosse 

226

AUDITORS’ REPORT IN ACCORDANCE WITH ARTICLE L.225-235 OF THE COMMERCIAL CODE 

ON THE REPORT OF THE CHAIRMAN OF BOUYGUES SA ON INTERNAL CONTROL PROCEDURES 

RELATING TO THE PREPARATION AND TREATMENT OF ACCOUNTING AND FINANCIAL 

INFORMATION 

AUDITORS’ SPECIAL REPORT 

ON REGULATED AGREEMENTS 


In our capacity as auditors of Bouygues and 

pursuant to the provisions of Article L. 225-235 

of the Commercial Code, we hereby present our 

report on the report prepared by the Chairman of 

your company in accordance with the provisions 

of Article L. 225-37 of the Commercial Code for 

the year ended 31 December 2005. 

The Chairman’s report should describe the conditions 

for preparing and organising the Board’s 

work and the company’s internal control procedures. 

Our responsibility is to inform you of our observations 

based on the information contained in 



the Chairman’s report relating to internal control 

procedures and the preparation and treatment of 

accounting and financial information. 

We have performed our assignment in accordance 

with the prevailing standards of the profession 

in France, which require us to verify that 

the information given in the Chairman’s report 

relating to internal control procedures and the 

preparation and treatment of accounting and 

financial information is fairly stated. This work 

includes: 

• acquainting ourselves with the objectives and 

general organisation of internal controls and 

the internal control procedures relating to 


The Auditors 


Michel Rosse 

the preparation and treatment of accounting 

and financial information contained in the 

Chairman’s report; 

• acquainting ourselves with the work underlying 

the information given in the report. 

On the basis of this work, we have no comment 

to make about the information concerning 

the company’s internal control procedures as 

they relate to the preparation and treatment 

of accounting and financial information contained 

in the Chairman’s report prepared pursuant 

to the provisions of Article L. 225-37 of the 



In our capacity as auditors of your company, we 

hereby submit our report on regulated agreements. 

■ Agreements authorised and concluded 

during the year 

Pursuant to Article L. 225-40 of the Commercial 

Code, we were advised of agreements that had 

been previously authorised by your Board of 

Directors. 

Our assignment is not to find out whether there 

may be other agreements but to inform you, on 

the basis of the information provided to us, of the 

principal features and terms of the agreements 

notified to us. We are not asked to give an opinion 

on whether they are useful or necessary. Under 

the terms of Article 92 of the decree of 23 March 

1967, it is for you to assess the appropriateness 

of these agreements with a view to approving 

them. 

We have performed our assignment in accordance 


in France which require us to verify that 

the information given to us is consistent with the 

documents from which it derives. 

Common service agreements 

Bouygues has concluded common service agreements 

under which it provides its sub-groups 

with services, relating in particular to management, 

human resources, information technology 

and finance. 


227

Bouygues invoiced the following amounts in respect of this agreement in 2005: 

Subsidiaries Amount excl. VAT Persons concerned 

Bouygues Construction €10,430,358 

Bouygues Immobilier €2,476,060 

Bouygues Telecom €8,471,342 

Colas €15,938,447 

Finagestion €934,617 Olivier Bouygues 

TF1 €5,218,055 

Olivier Bouygues, Michel Derbesse (until 21 April 2005), 

Yves Gabriel and Olivier Poupart-Lafarge 

Michel Derbesse (until 18 April 2005) 

and Olivier Poupart-Lafarge 


Alain Pouyat and Olivier Poupart-Lafarge 


Alain Dupont, Patrick Le Lay and 


Patricia Barbizet, Martin Bouygues, Michel Derbesse 

(until 12 April 2005), Patrick Le Lay, Alain Pouyat and 


Service agreements: use of Bouygues offices at 90 avenue des Champs-Elysées 

Bouygues has concluded an agreement with its main subsidiaries under which it provides fully-equipped 

occasional offices at 90, avenue des Champs-Elysées. 

Bouygues invoiced the following amounts in respect of this agreement in 2005: 



International 


Île-de-France 

Bouygues Construction €236,000 

Bouygues Telecom €20,000 

Bouygues Travaux 

Publics 

€63,000 Yves Gabriel and Olivier Poupart-Lafarge 

€485,000 Yves Gabriel 

€129,000 




Alain Pouyat and Olivier Poupart-Lafarge 


(until 20 April 2005) 

ETDE €57,000 Yves Gabriel and Alain Pouyat 

Bouygues Immobilier €10,000 

Michel Derbesse (until 18 April 2005) and 


Service agreements: use of aircraft owned by Bouygues 

Bouygues has concluded an agreement with its main subsidiaries for use of its aircraft. 

Bouygues invoiced the following amounts in respect of these agreements in 2005: 




International 


Île-de-France 

Bouygues Travaux 

Publics 



€47,025 Yves Gabriel and Olivier Poupart-Lafarge 

€47,700 


DTP Terrassement €129,825 

TF1 group €661,050 

€0 Yves Gabriel 

Eurosport €286,650 Olivier Bouygues 

Colas €486,900 


(until 20 April 2005) 

Michel Derbesse (until 18 April 2005) and 



(until 12 April 2005), Patrick Le Lay, 

Olivier Poupart-Lafarge and Alain Pouyat 


Alain Dupont, Patrick Le Lay and 


Bouygues Telecom €328,219 



Finagestion €224,100 Olivier Bouygues 

ETDE €0 Yves Gabriel and Alain Pouyat 

Service agreements: investor relations services for Bouygues Construction and TF1 provided by the 

general secretariat of the Bouygues group 

Bouygues has concluded agreements to provide investor relations services to certain subsidiaries. 

Bouygues invoiced the following amounts in respect of these agreements in 2005: 


TF1 €60,000 



(until 12 April 2005), Patrick Le Lay, 




228

Agreements to buy and sell Bouygues Telecom shares held by the BNP Paribas group 

In view of Bouygues’ possible purchase of all Bouygues Telecom shares held by the BNP Paribas group 

(6.5% of Bouygues Telecom’s capital) for a basic price of €475 million, Bouygues signed the following 

agreements to buy and sell with BNP Paribas on 21 June 2005: 

• Bouygues granted BNP Paribas an option to buy, valid until 31 July 2007. 

• BNP Paribas granted Bouygues an option to sell, exercisable between 1 and 30 September 2007. 

The basic price of €475 million bears interest at a rate of 2.07% from the day on which the undertakings 

were signed until the purchase takes place. Dividends paid before the transfer of ownership, plus 

interest at a rate of 2.07%, will be deducted from the basic price. 

Person concerned: Georges Chodron de Courcel 

Sponsorship agreement between Bouygues and ARSEP 

The sponsorship agreement between Bouygues and ARSEP for the purpose of raising funds for the 

EDMUS project to computerise data on multiple sclerosis sufferers was renewed for a three-year period 

(2005-2007). 

Bouygues paid €40,000 excluding VAT in respect of this agreement in 2005. 

Person concerned: Michel Derbesse 

Supplementary pension plan for executive management 

Bouygues has signed a supplementary pension plan agreement for the members of the Group’s 

Executive Committee, including the corporate officers and salaried directors of Bouygues SA. This 

supplementary plan represents 0.92% of the reference salary for each year of membership of the plan. 

It has been outsourced to an insurance company. The contribution paid in 2005 to the fund set up by 

the insurance company was €3,662,301 excluding VAT. 

Persons concerned: Martin Bouygues, Olivier Poupart-Lafarge and Olivier Bouygues. 

Sub-licensing agreement concerning Magnitude accounting and financial software between 

Bouygues and certain subsidiaries 

Bouygues has signed a sub-licensing agreement for the use of its Magnitude consolidation software (for 

which Bouygues has a non-exclusive usage licence) with three of its subsidiaries. 

Bouygues invoiced the following one-off amounts in respect of this agreement in 2005: 


Colas €237,000 

Olivier Bouygues, Alain Dupont, Patrick Le Lay 


Bouygues Immobilier €80,000 Olivier Poupart-Lafarge 


Olivier Bouygues, Yves Gabriel 


Retirement agreement for Michel Derbesse 

Michel Derbesse’s term of office as Deputy CEO ended on 1 March 2005 and his employment contract, 

which was suspended during his term as a corporate officer, automatically resumed on that date. In 1995, 

the Board of Directors decided that the duration of Mr Derbesse’s corporate officership would be taken 

into account in determining his length of service and rights with respect to his employment contract. 

Mr Derbesse’s retirement took place under this framework. 

Bouygues paid Mr Derbesse a 12-month termination benefit, calculated in accordance with the collective 

agreement in the building industry, equal to €2,300,000, in addition to the amount relating to the threemonth 

notice period provided for by the collective agreement. 

Person concerned: Michel Derbesse 

■ Agreements approved in previous years which continued to be effective in 2005 

In accordance with the decree of 23 March 1967, we were informed that the following agreements, 

approved in previous years, continued to be effective in 2005: 

Reciprocal advances between Bouygues and its subsidiaries leading to the invoicing of interest: 

Advances by Bouygues to its subsidiaries led to the invoicing of €7,381,824 of interest at rates lower than 

the tax-deductible minimum (4.58%) for advances in euros. 

Guarantees 

Guarantees given by Bouygues to Crédit Lyonnais 

Calyon, subrogated to Crédit Lyonnais in its rights, in a letter dated 2 August 2005 issued notification 

that it was terminating guarantees given by Bouygues in 1992 relating to the repayment by Romanian 

limited-liability company CCIB of the following loans: 

• an aggregate amount of €1,219,592 in respect of the long-term credit agreement; 

• €370,451 plus interest, expenses and fees in respect of the long-term supplementary loan. 

Continuation of guarantees given by Bouygues to TF1 International 

In the context of the disposal of Ciby Droits Audiovisuels, Bouygues gave a counter-guarantee for commitments 

assumed by Fiducine with regard to TF1 International. 

Continuation of guarantees given by Bouygues to Bouygues Bâtiment International 

In January 1998, Bouygues concluded a concession agreement relating to an equestrian club project 

in Jeddah (Saudi Arabia). Following the spin-offs in June 1999, one result of which was to substitute 

Bouygues Bâtiment (since renamed Bouygues Bâtiment International) for Bouygues, the two companies 

concluded an agreement in order to amend the clauses relating to joint and several liability. 

Trademark licence agreements 

With Bouygues Construction, Bouygues Travaux Publics, Bouygues Immobilier 

Bouygues concluded trademark licence agreements in 2000 with Bouygues Construction, Bouygues 

Bâtiment, Bouygues Travaux Publics and Bouygues Immobilier, in particular so as to give them: 

• the right to use respectively the Bouygues Construction, Bouygues Bâtiment, Bouygues Travaux 

Publics and Bouygues Immobilier trademarks, company names and trade names; 


229

• the right for companies in the construction 

sector to use the Minorange ellipse. 

Bouygues invoiced the following amounts in 

respect of this agreement in 2005: 

Subsidiaries 

Amount excl. VAT 


Bouygues Travaux Publics €15,855 


With Bouygues Bâtiment International and 

Bouygues Bâtiment Île-de-France 

Bouygues concluded the following agreements 

in 2003: 

• with Bouygues Bâtiment International, a supplement 

to the trademark licence agreement 

of 21 December 2000, granting it the right to 

use the Bouygues Bâtiment trademarks in certain 

foreign countries, to use the Minorange 

ellipse trademarks in France and specified 

foreign countries and to use the Bouygues 

Bâtiment company name and trade name 

worldwide. 

• with Bouygues Bâtiment Île-de-France, a 

licence agreement granting it the exclusive 

right: to use the Bouygues Bâtiment trademark 

in France, a non-exclusive right to use the 

Bouygues Bâtiment company name and trade 

name in France, a non-exclusive right to use 

the Minorange ellipse trademark in France in 

conjunction with the Bouygues Bâtiment name 

and the right to use the Bouygues Bâtiment 

company name and trade name. 

Bouygues invoiced the following amounts in 

respect of these agreements in 2005: 

Subsidiaries 

Amount excl. VAT 

Bouygues Bâtiment International €7,318 

Bouygues Bâtiment Île-de-France €15,550 

With Bouygues Telecom 

Bouygues concluded a trademark licence agreement 

with Bouygues Telecom in 1996, followed 

by supplementary agreements in 1997 and 2001 

granting it the following rights (amounts excluding 

VAT): 

• an exclusive licence to use the Bouygues 

Telecom trademark in France, in respect of 

which Bouygues invoiced €15,245 in 2005; 

• exclusive licences to use Bouygues Telecom 

trademarks in 99 foreign countries, in respect 

of which Bouygues invoiced €30,185 in 2005; 

• an exclusive licence to use the Bouygtel trademark 

in France, in respect of which Bouygues 

invoiced €15,245 in 2005; 

• a non-exclusive licence to use the Bouygnet 

trademark in France, in respect of which 

Bouygues invoiced €1,524 in 2005. 

Agreement between Bouygues and SCDM 

In December 2004, Bouygues concluded an agreement 

with SCDM, a company owned by Martin and 

Olivier Bouygues, which has a small team (including 

Martin and Olivier Bouygues) that makes an 

ongoing contribution to activities benefiting the 

Bouygues group. 

Under the terms of the agreement, SCDM will 

invoice Bouygues for costs incurred up to a maximum 

of €8 million a year, relating to: 

• wages, in particular those of Martin and Olivier 

Bouygues, who are paid solely by SCDM, 

• research and analysis relating to strategic 

developments and the expansion of the 

Bouygues group, 

• miscellaneous services. 

SCDM may also provide specific services to 

Bouygues outside the scope of its permanent 

mission, which are invoiced according to normal 

market conditions. 

Under the terms of the agreement, Bouygues will 

also invoice SCDM for office space of 130 m 2 on 

the Challenger site for an annual rental charge of 

€85,000, as well as specific services according to 

normal market terms. 

In respect of this agreement, SCDM invoiced 

Bouygues an amount of €6,117,356 (excluding 

VAT) in 2005, and Bouygues invoiced SCDM an 

amount of €134,688 (excluding VAT). 

Technical support agreement between 

Bouygues and TF1 Publicité 

An agreement was concluded on 17 September 

2004 to allow TF1 Publicité to use the services 

of Bouygues’ e-Lab department in the context 

of the provision of technical support services 

for the creation and optimisation of advertising 

products and services offered by TF1 Publicité. 

Bouygues invoiced €100,000 excl. VAT in respect 

of this agreement in 2005. 

Assumption of defence costs 

Bouygues’ assumes costs incurred by senior 

managers or employees in their defence or in 

connection with criminal proceedings resulting 

in discharge or acquittal where such proceedings 

are brought against them for acts accomplished 

in performance of their duties or for the mere 

fact of holding a position as Director, Chairman, 

CEO or Deputy CEO or any equivalent position in 



a Group company. 

This agreement had no effect in 2005. 

Other agreements 


The Auditors 

With Bouygues Construction 

Bouygues concluded a three, six, nine-year sublease 

agreement with Bouygues Construction 

as of 1 January 2000 relating to approximately 

5,000 m 2 of the Challenger site. 

Bouygues Construction invoiced €3,044,802 excl. 

VAT in respect of this agreement in 2005. 

With Bouygues Bâtiment International 

The agreement signed at the end of December 

2003 between Bouygues and Bouygues Bâtiment 

International concerning the handling of the 

Casablanca mosque claim remained in effect in 

2005. 

With SCI des Travaux Publics du 90 avenue des 

Champs-Élysées 

The agreement concluded on 10 September 2003 

with SCI des Travaux Publics du 90 avenue des 

Champs-Élysées (represented by the Fédération 

Nationale des Travaux Publics - FNTP) in the context 

of the sale by Bouygues of its offices on the 

Champs-Élysées, with deferred transfer of use, 

continued to take effect in 2005. 

Bouygues was invoiced €658,353 excl. tax and 

VAT in respect of the occupation of these premises 

in 2005. 


Michel Rosse 

230

AUDITORS’ REPORT ON THE REDUCTION OF SHARE CAPITAL BY 

THE CANCELLATION OF REPURCHASED SHARES 

AUDITORS’ SPECIAL REPORT ON ISSUES OF PREFERENCE 

SHARES AND TRANSFERABLE SECURITIES GIVING ACCESS TO 

NON-VOTING PREFERENCE SHARES HAVING THE SAME RIGHTS 

AS INVESTMENT CERTIFICATES 


In our capacity as auditors of Bouygues and in 

performance of the duties set forth in Article 

L. 225-209, paragraph 7, of the Commercial Code 

in the event of a reduction of capital by cancellation 

of repurchased shares, we have prepared 

this report to inform you of our assessment of 

the reasons for and conditions of the proposed 

transaction. 

We have conducted our assignment in accordance 

with the prevailing standards of the profession in 

France and have duly assessed the lawful nature 

of the reasons for and conditions of the capital 

reduction. 

The transaction is planned in the context of the 

company’s repurchase of its own shares, up to 

10% of the capital, under the conditions set forth 

in Article L. 225-209 of the Commercial Code. You 

are asked to approve the authorisation at your 

Annual General Meeting. Should you do so, it will 

be valid for 18 months. 

Your Board asks you to give it all powers, for an 

18-month period, to cancel shares bought under 

the terms of the various authorisations allowing 

your company to buy back its own shares, up to a 

limit of 10% of the capital per 24-month period. 

We have no comment to make on the reasons for 

and conditions of the envisaged capital reduction, 

bearing in mind that this transaction can be 

carried out only if your Annual General Meeting 

previously approves the company’s repurchase 

of its own shares. 


In our capacity as auditors of your company and 

in performance of the duties set forth in Articles 

L. 228-12 and L. 228-92 of the Commercial Code, 

we have prepared this report on the proposed 

issue to holders of investment certificates of 

preference shares and securities giving access 

to non-voting preference shares and having the 

same rights as investment certificates. 

On the basis of its report, your Board of Directors 

has asked you, pursuant to Article L. 225-129-2 

of the Commercial Code, to delegate to it for a 

period of 18 months your capacity to decide on 

this operation and to set the issue terms. 

It is the responsibility of the Board of Directors to 

prepare a report in accordance with Article 206-2 

of the decree of 23 March 1967. It is our task to 

express our opinion on the proposed issue and 

on certain information contained in this report. 

We have carried out the work we deemed necessary 

for this purpose. This work included checking 

the information provided in the Board of 

Directors’ report on the characteristics of preference 

shares and the method of determining their 

issue price. 

Without prejudice to the subsequent review of 

the terms of the proposed issue, we have no 

comment to make on the proposed operation 

and the method for determining the issue price 

of equity securities to be issued set forth in the 

Board of Directors’ report or on the presentation 

of the characteristics of preference shares set 

forth in this report. 

As the issue price for any equity securities to be 

issued has not been fixed, we express no opinion 

on the final terms under which the issue may be 

carried out. 

In accordance with Article 155-2 of the decree of 

23 March 1967, we shall draw up a supplementary 

report when the Board of Directors carries out 

the issue. 


The Auditors 


The Auditors 




Michel Rosse 




Michel Rosse 


231

AUDITORS’ SUPPLEMENTARY REPORT ON THE CAPITAL INCREASE RESERVED FOR EMPLOYEES SUBSCRIBING TO A CORPORATE 

SAVINGS PLAN 


In our capacity as auditors of your company and 

pursuant to the provisions of Article 155-2 of the 

decree of 23 March 1967, we hereby present a 

supplementary report to our special report of 16 

March 2005 on the issue of shares reserved for 

Bouygues employees and employees of affiliated 

companies that are members of a corporate savings 

plan, as authorised by the Annual General 

Meeting of 28 April 2005. 

This meeting delegated to the Board of Directors 

the powers to decide on a transaction of this 

kind for a period of twenty-six months and up to 

a limit of 10% of the share capital as at the date 

the decision is made. 

Using the powers thus delegated to it, the Board 

of Directors decided at its meeting of 21 June 

2005 to carry out a capital increase reserved for 

employees limited to a maximum of €250 million, 

through the issue of 9,972,078 shares with a subscription 

price set at 80% of the average opening 

share price quoted during the twenty trading 

days prior to 21 June 2005, i.e. €25.07. 

It is the responsibility of the Board of Directors 

to prepare a supplementary report in accordance 

with Article 155-2 of the decree of 23 March 1967. 

We are required to give our opinion on certain 

information provided in this report and on the 

proposal to cancel the preferential subscription 

right. 

We have conducted our assignment in accordance 

with the prevailing standards of the profession in 

France. Those standards require that we plan and 

perform our audit to verify: 

● the figures taken from the interim consolidated 

financial statements prepared under 

the responsibility of the Board of Directors as 

at 31 March 2005. In the context of the transition 

to IFRS as adopted in the European Union 

for the preparation of consolidated financial 

statements for 2005, the interim consolidated 

financial statements to 31 March 2005 were 

prepared for the first time in accordance with 

the IFRS accounting and valuation policies 

adopted in the European Union, in the form 

of interim financial statements as defined 

in the general regulations of the Autorité 

des Marchés Financiers. For comparison purposes, 

they contain figures relating to 2004 

and the first quarter of 2004 that have been 

restated for these accounting standards. We 

have conducted a limited examination of the 

interim financial statements in accordance 


in France; 

● the conformity of the conditions of the operation 

with the authorisation granted by the 

Annual General Meeting and the sincerity of 

the information provided in the supplementary 

report of the Board of Directors on the 

calculations used to determine the issue price 

and the final amount of the capital increase. 

We have no observations to make on: 

● the sincerity of the figures taken from the 

company’s financial statements and given in 

the supplementary report of the Board of 

Directors; 

● the conformity of the conditions of the operation 

with the authorisation granted by the 

Annual General Meeting of 28 April 2005 and 

the indications provided; 

● the proposal to cancel preferential subscription 

rights on which you have already given 

your opinion, the calculations used to determine 

the issue price and the final amount of 

the capital increase; 

● the presentation of the impact of the issue on 

the situation of holders of shares or transferable 

securities giving access to the increased 

share capital in relation to shareholders’ equity 

and the impact on the share price. 

Note: pending the enactment of the law relating to 

takeover bids, the auditors’ reports on the sixteenth 

and seventeenth resolutions submitted to the Annual 

General Meeting on 27 April 2006 will be made available 

to shareholders within the legal time limits, namely by 

11 April 2006 at the latest. 

Paris-La Défense, 5 July 2005 

The Auditors 




Michel Rosse 

232

RECONSTITUTION OF INVESTMENT CERTIFICATES 

AND VOTING RIGHT CERTIFICATES AS SHARES 


SPECIAL REPORT ON THE 

RECONSTITUTION OF 

INVESTMENT CERTIFICATES 

AND VOTING RIGHT 

CERTIFICATES AS SHARES 


We have called you to this Annual General Meeting 

to ask you to approve the proposed reconstitution 


certificates as shares, as presented in accordance 

with Article L. 228-31 of the Commercial Code. 

As at 31 December 2005, there were 473,867 

Bouygues investment certificates, representing 

0.14% of share capital. 

If existing investment certificates represent no 

more than 1% of the share capital of a company 

whose shares are admitted to trading on a 

regulated market, this company may reconstitute 

existing investment certificates and voting right 

certificates as shares. 

The Board of Directors believes that this is an 

appropriate time for a reconstitution of this kind 

and to simplify Bouygues’ shareholding structure 

for the following reasons: 

● the number and the liquidity of investment 

certificates and voting right certificates is 

decreasing from one year to the next due to 

reconstitutions ‘over time’; 

● investment certificates and voting right certificates 

are difficult and costly to manage in 

relation to the privileges they provide for the 

company; 

● reconstitution is subject to stringent rules, 

which will become increasingly difficult to 

respect as reconstitutions proceed; 

● investment certificates and voting right certificates 

have been rendered obsolete by the 

order of 24 June 2004 concerning the reform 

of transferable securities, which has resulted 

in the creation of new financial instruments 

and rendered it impossible to issue new investment 

certificates and voting right certificates. 

This reconstitution will proceed in accordance 

with applicable regulations under the following 

terms: 

voting right certificates will be acquired by 

Bouygues at a price determined by the general 

shareholders’ meeting. The amount of compensation 

due to the unidentified holders will be duly 

recorded. The reconstitution will be effected by 

the transfer by Bouygues of the corresponding 

voting right certificates to holders of investment 

certificates at no cost. 

In its valuation, the Board of Directors has not 

used financial criteria relating to the value of the 

assets, the profits made and the company’s business 

prospects that are not relevant for a voting 

right certificate. 

The main methods that may be used to determine 

the value of a voting right certificate are 

as follows: 

• difference between the share price and the 

price of the investment certificate 

This method is not relevant as prices of investment 

certificates are not quoted regularly and 

therefore their price development is inconsistent. 

• valuation based on the quoted price of the 

voting right certificate 

Prices of voting right certificates are quoted 

almost daily. Trading volumes are low but in 

general fairly regular. However, although the 

price has remained stable at around €2 since 

2002, it has risen recently to a peak of €5.24, 

with no clear correlation with the increase in the 

share price. 

• peer comparison valuation 

There are few transactions of a similar nature. 

The only really comparable transaction is that 

carried out by L’Oréal in 1999. Other transactions 

are similar but there are disparities between 

these transactions, each of which has its own 

specific features. However, certain elements from 

comparable transactions may be used. 

• valuation based on the quoted price of the 

voting rights certificate relative to the 

quoted share price 

The most relevant method and that used by the 

Board takes into account the value of the voting 

right certificate expressed as a percentage of 

the share price. This method has also been used 

in previous transactions and allows for adjustments 

at the date of the Board meeting for the 

share price. It will be proposed to the Board that 

this percentage will be determined by referring 

to the average value of the voting right certificate 

relative to the Bouygues share price over a 

three-month period from 15 November 2005 to 

14 February 2006 inclusive, weighted by trading 

volumes of the voting rights certificate. 


233

Trading data for the period from 15 November 2005 to 

14 February 2006 (inclusive) – source: Euronext 

From 15 November 2005 to 14 February 2006, Bouygues’ average share price weighted by trading 

volumes was €42.39 (non-weighted average of €42.44) and €3.64 for voting right certificates (nonweighted 

average of €3.54). 

Share data 

Price Minimum Maximum 

Average No. of 

volume quotations 

Average 42.44 40.00 46.19 1,207,919 65 

Weighted average 42.39 

Voting right certificates 

Price Minimum Maximum Average 

volume 

No. of 

quotations 

Value of voting right certificate 

relative to share price 

Average Minimum Maximum 

Average 3.54 2.60 5.24 376 48 8.35% 6.31% 11.63% 

Weighted average 3.64 8.48% 

The average ratio of the value of voting right certificates to the share price, calculated only for dates 

for which the voting right certificates were listed, weighted by the trading volume of voting right 

certificates, is 8.48% (non-weighted average of 8.35%). The relative value of Bouygues’ voting right 

certificates is therefore 8.48% of the share price. 

Purchase price – premium 

In determining the purchase price for voting right certificates, as is regularly the practice in similar 

transactions, it is legitimate to offer a premium to the relative value of the voting right certificates as 

determined above. 

For tender offers or similar or comparable transactions over the last 12 years, the average premium 

offered to the value of voting right certificates relative to the share price is 40% and has never exceeded 

62%. 

* ratio of the value of voting right certificates relative to the share price subject to the terms of the offer and the average value of voting 

right certificates relative to the share price as observed on the stock market prior to the launch of the transaction 

Date 

Relative value of voting right certificate 

under the terms 

of the offer 

(%) 

over prior 

period 

(%) 

Premium (*) 

(%) 

Eridania Beghin Say Demerger June 2001 5.0% 3.6% 38.1% 

L’Oréal Bond redemption June 1999 6.0% 4.0% 50.0% 

Piper Heidsieck Squeeze-out offer April 1997 3.6% 2.8% 27.7% 

OGF-PFG Squeeze-out offer July 1996 13.3% 8.3% 61.4% 

Financière St Fiacre Minority buyout offer April 1996 28.0% 23.5% 19.1% 

Eridania Beghin Say Share exchange offer June 1995 6.3% 7.4% -15.9% 

L’Oréal Share exchange offer June 1993 40.0% 41.1% -2.6% 

Average 

Overall 14.6% 13.0% 25.4% 

Excluding share exchange offers 11.2% 8.4% 39.3% 

Excluding share exchange offers and demerger 12.7% 9.6% 39.6% 

Given the high value of the voting right certificates relative to the share price (8.48%) and the need to 

protect the interests of Bouygues’ shareholders while also offering a fair price to holders of voting right 

certificates, a premium of 50% is proposed (equivalent to the premium offered in the L’Oréal transaction), 

representing an offer price of 12.73% of Bouygues’ weighted average share price over the three 

months prior to 28 February 2006 (€42.89), or €5.46 per voting right certificate. 

This valuation has been assessed by Détroyat Associés, an independent expert appointed to issue a 

fairness opinion on the proposed price. 

As at 28 February 2006, there were 473,424 voting right certificates. Based on this number, the transaction 

would cost Bouygues €2,584,895. 

The reconstitution of voting right certificates and investment certificates as shares will take effect as of 

18 May 2006, after which the purchase price will be paid. 

The extraordinary general meeting will give a verdict relating to a report prepared by an expert 

appraiser on the special privileges conferred, in accordance with Articles L. 228-31 and L. 225-147 of the 


The extraordinary general meeting may only give a decision after the proposed reconstitution is 

approved by the holders of voting right certificates, who will attend a special meeting, with a 95% 

majority of holders present in person or represented by proxy. 

A special meeting of holders of voting right certificates has been called for this purpose and is due 

to take place by first notice on 12 April 2006 or in the event that a quorum is not obtained, by second 

notice on 26 April 2006. 

234

Consequently, we ask you, subject to the adoption 

of this proposed reconstitution by the special 

meeting, to approve the proposed reconstitution 

of existing investment certificates and voting 

right certificates as shares as presented above. 

If the resolution is rejected by the special meeting, 

this resolution will no longer be submitted 

to the shareholder vote at the Annual General 

Meeting. 

We ask you to vote on the resolutions put to 

you. 


EXPERT APPRAISER’S 

REPORT ON SPECIAL 

PRIVILEGES 


By an order dated 1 March 2006, the Chairperson 

of the Paris Commercial Court appointed Jean- 

Charles de Lasteyrie as expert appraiser, with the 

task of assessing the value of special privileges 

that may result from the reconstitution of investment 

certificates and voting right certificates as 

shares under article L. 228-31 of the Commercial 

Code. 

We have carried out our appraisal in accordance 

with article L. 225-147 of the Commercial Code, 

as amended by the order of 24 June 2004 which 

altered the rules regarding securities issued by 

commercial companies, and with the standards of 

the CNCC (French national auditors’ association) 

in force at 14 August 2003. 

The plan to reconstitute investment certificates 

and voting right certificates as shares 

was finalised in the Board of Directors’ report 

provided to us. 

It is our task to express an opinion on the assessment 

of the stipulated special privileges. 

Our findings are set out below: 

1. Presentation of the operation and 

description of the special privilege 

1.1 Context of the planned operation 

1.2 Description of the special privilege 

2. Work done and assessment of the value 

of the special privilege 

2.1 Work done 

2.2 Assessment of the value of the 

special privilege 

3. Conclusion 

1. Presentation of the operation 

and description of the special 

privilege 

1.1 Context of the planned operation 

Article 7 of your company’s by-laws states that its 

equity capital is €336,762,896. It is divided into 

336,762,896 shares with par value of €1 each. 

According to the Board of Directors’ report dated 

28 February 2006, 473,424 shares have been split 

into the same number of investment certificates 

and voting right certificates. These shares may 

be reconstituted under the conditions provided 

by law. The investment certificates represent 

around 0.14% of your company’s equity capital. 

The investment certificates and voting right 

certificates are listed in the A compartment of 

Euronext Paris. 

The Board of Directors proposes to simplify the 

structure of your company’s equity capital by 

reconstituting the investment certificates and 


This will eliminate the cost that is currently 

incurred in managing the two types of certificate, 

which is deemed excessive in relation to the 

privileges they provide for the company and its 

shareholders. 

1.2 Description of the special privilege 

To proceed with this reconstitution, your company 

is using the procedure set out in article 

L. 228-31 of the Commercial Code. This allows 

companies whose shares are listed for trading on 

a regulated market and whose investment certificates 

represent less than 1% of their capital to 

reconstitute existing certificates as shares. 

The reconstitution procedure is as follows: 

• your company buys back voting right certificates 

from holders. 

• The voting right certificates bought back in 

this way are allocated free of charge to investment 

certificate holders, and the two types 

of certificate held by the same person can be 

reconstituted as shares. 

Firstly, a special meeting of voting right certificate 

holders must approve the plan, with a 

majority of 95% of holders present or represented 

by proxy. A special meeting of voting 

right certificate holders has been called for this 

purpose and is due to take place by first notice 

on 12 April 2006 or, in the event that a quorum is 

not obtained, by second notice on 26 April 2006. 

An independent appraiser, Détroyat Associés, 

has been appointed to assess the fairness of the 

price offered for both voting right certificate 

holders and shareholders. In its report dated 3 

March 2006, the independent appraiser concluded 

that the price of €5.46 offered to voting right 

certificate holders and shareholders was fair. 

The special privilege lies in the allocation of 

voting right certificates free of charge to investment 

certificate holders, after your company has 

bought them back from voting right certificate 

holders. 

2. Work done and assessment 

of the special privilege 

To assess the special privileges that may arise 

from the reconstitution of investment certificates 

and voting right certificates as shares, we 

carried out the following work: 

• we liaised with Bouygues’ legal and finance 

departments in order to understand the background 

to the operation and to analyse its 

planned terms. 

• We studied the Board of Directors’ report and 

the text of resolutions proposed to the Annual 

General Meeting, including the reconstitution 



235

certificates as shares and the price offered to 

voting right certificate holders. 

• We studied the report by the independent 

appraiser regarding the fairness – for both voting 

right certificate holders and shareholders 

– of the price offered to voting right certificate 

holders. 

2.1 Assessment of the value of the 

special privilege 

Method used to set the value of voting right 

certificates 

Your company’s Board of Directors proposes to 

set the price of voting right certificates at €5.46 

each. This price was determined according to 

the relationship between the quoted prices of 

Bouygues voting right certificates and shares, 

plus a 50% premium. 

To calculate the relationship between the prices 

of Bouygues voting right certificates and shares, 

the Board of Directors used average voting right 

certificate and share prices weighted by trading 

volumes over a period of three months. 

On this basis, the relative value of Bouygues voting 

right certificates was calculated to be 8.48% 

of the share price. 

The Board of Directors then looked at the premium 

it was reasonable to offer voting right 

certificate holders. On the basis of transactions 

that were deemed comparable, your Board of 

Directors decided on a premium of 50%. 

As a result, the relative value of Bouygues voting 

right certificates is 12.73% of the share price. 

Taking into account the weighted average share 

price of Bouygues shares in the three months 

prior to 28 February 2006 (€42.39), the value of 

voting right certificates is €5.46 each. 

The independent appraiser concluded that the 

price offered per voting right certificate was fair 

for both Bouygues voting right certificate holders 

and shareholders. 

Assessment of the value of voting right certificates 

Article L. 228-31 states that the price offered to 

voting right certificate holders “shall be determined 

according to the terms set out in point 2 

of article 283-1-1 of Act 66-537 of 24 July 1966 on 

commercial companies”. 

Point 2 of article 283-1-1, which was not incorporated 

in order 2000-912 of 18 September 2000, 

states that “the valuation of securities, carried 

out using the objective methods used in asset 

sales, shall take into account asset value, profits, 

stockmarket value, the existence of subsidiaries 

and the business outlook with weightings appropriate 

to each case”. 

Since voting right certificates carry no non-pecuniary 

particular rights, the financial criteria relating 

to Bouygues’ asset value, profits and business 

outlook do not apply. 

It is for this reason that your Board of Directors 

valued the voting right certificates on the basis 

of their relative value with respect to the value 

of Bouygues shares. By taking an average share 

price weighted for trading volumes over three 

months, occasional fluctuations arising due to 

the low liquidity of voting right certificates can 

be smoothed out. The operation was compared 

with similar operations to determine the premium 

to be offered to voting right certificate 

holders. 

A premium is applied to this kind of operation 

due to the need to make an attractive proposal 

to voting right certificate holders, since 95% of 

voting right certificate holders present or represented 

by proxy in the meeting must approve the 

operation if it is to proceed. The premium is 50% 

relative to the weighted-average price during 

the three months prior to 14 February 2006 (the 

date on which the Board of Directors chose to 

end the calculation period), 36.2% relative to the 

unweighted average share price over a 1-month 

period (€4.01) and 4.2% relative to the highest 

voting right certificate price in the previous 

month (€5.24). 

Based on a price of €5.46, the cost of buying 

back the voting right certificates will be around 

€2.6m before tax. 

3. Conclusion 

The stipulated special privileges form part of a 

plan to reconstitute investment certificates and 

voting right certificates as shares, and we have 

no comment to make on them. 

Paris, 24 March 2006 

Jean-Charles de Lasteyrie 

FAIRNESS OPINION BY 

INDEPENDENT APPRAISER 

DÉTROYAT ASSOCIÉS 

As part of the planned squeeze-out offer for 

its 473,867 voting right certificates (hereinafter 

“VRC”s) currently in issue, with a view to allocating 

them free of charge to holders of investment 

certificates (hereinafter “IC”s), Détroyat Associés 

has been appointed as an independent appraiser 

to give a fairness opinion on the price of €5.46 

per VRC. 

The method used by Bouygues’ Board of Directors 

in setting this price involved i) determining the 

value of a VRC relative to that of an ordinary 

Bouygues share, and ii) assessing the premium 

that should be offered on top of this relative 

value, in view of comparable transactions that 

have taken place on the Paris stock exchange. We 

approve this approach. 

In carrying out our appraisal, we looked at historical 

price and volume data for both Bouygues 

VRCs and ordinary shares, provided by Euronext. 

We also used our own experience in this type of 

transaction. 

236

I. Analysis of the relative value of VRCs 

The tables below set out market data (at 14 February 2006) for Bouygues shares and VRCs, based on the 

closing price for ordinary shares. 

Bouygues ordinary share 

Average 


volume 

Number of 

quotations 

14/02/2006 45.50 45.16 45.69 727,660 1 

1 month 

Average 44.45 42.05 46.19 1,057,787 22 


3 months 

Average 42.44 40.00 46.19 1,207,919 65 


6 months 

Average 40.38 35.81 46.19 1,325,715 131 


1 year 

Average 36.50 29.78 46.19 1,315,627 258 


2 years 

Average 33.05 25.94 46.19 1,324,880 517 


3 years 

Average 30.08 16.61 46.19 1,336,520 771 



Unlike the listed VRCs of other companies, which have very low liquidity and for which prices are not 

quoted regularly, we note that Bouygues VRCs are regularly traded in the market, with prices quoted on 

202 days in the last 12 months, as opposed to 258 for Bouygues ordinary shares. However, we note the 

VRCs’ low trading volumes, with 54,022 VRCs traded (giving a turnover rate of around 11.4%) as opposed 

to 339 million Bouygues shares traded during the same period. 

Voting right certificates 

Average 


volume 

Number of 

quotations 

14/02/2006 3.91 3.91 3.91 300 1 

1 month 

Average 4.01 3.45 5.24 523 14 


3 months 

Average 3.54 2.60 5.24 376 48 


6 months 

Average 3.22 2.11 5.24 321 93 


1 year 

Average 2.57 1.85 5.24 267 202 


2 years 

Average 2.28 1.80 5.24 243 409 


3 years 

Average 2.14 1.40 5.24 255 596 



The table below sets out the relative value of a VRC expressed as a percentage of the value of a 

Bouygues ordinary share. The calculation only takes into account days on which VRC prices were quoted. 

Weighted averages are based on VRC trading volumes. 

Value of VRC relative to share price 

Average 

Weighted average 

14/02/2006 8.59% 8.59% 

1 month 9.08% 8.38% 

3 months 8.35% 8.48% 

6 months 7.95% 8.20% 

1 year 7.00% 7.36% 

2 years 6.86% 7.07% 

3 years 7.13% 7.33% 


237

The decision by Bouygues’ Board of Directors 

to apply the volume-weighted 3-month average 

relative value means that recent relative movements 

in the two types of Bouygues securities 

can be taken into account, while preventing oneoff 

fluctuations from biasing the figures excessively. 

The figure adopted by Bouygues (8.48%) 

is the highest average figure calculated. 

Bouygues’ Board of Directors has decided to 

apply this 8.48% figure to the volume-weighted 

average price of Bouygues ordinary shares in the 

three months until the day before its decision, i.e. 

27 February 2006. As a result, the reference value 

of the VRC is €3.64. 

II. Premiums offered in similar 

transactions 

In the absence of any method recognised by the 

academic or financial communities for assessing 

the value of an individual voting right, we 

approve the decision taken by Bouygues’ Board 

of Directors not to attempt an intrinsic valuation. 

The only appropriate method is to carry out a 

comparison with listed peers. Since a direct comparison 

of different companies’ VRC prices would 

not be meaningful, we approve the method of 

comparing VRC values relative to share prices. 

As a result, to assess the price offered by 

Bouygues for the buyback of its VRCs, the premium 

offered with respect to the VRC reference 

value has been compared with premiums offered 

in comparable transactions. This method does 

not take into account offers for unlisted VRCs. 

However, we note that in the VRC squeeze-outs 

carried out by Société du Louvre and Groupe 

Taittinger in 2005, the price offered corresponded 

to 12% of the companies’ respective share prices. 

The price of €5.46 offered per Bouygues VRC 

equals 12.73% of the 3-month volume-weighted 

average price of Bouygues shares at 27 February 

2006. 

We have identified seven public offers since 1993 in which the premium offered to VRC holders can be 

calculated. For each of these transactions, we have compared the price offered (or the exchange value 

of the securities offered) per VRC, expressed as a percentage of the ordinary share price, with the relative 

value per VRC expressed as a percentage of the ordinary share price, as determined by stockmarket 

prices in the months prior to the offer. 

Company 

Eridania Beghin Say 

L’Oréal*** 

Piper Heidsieck 

OGF-PFG 

Financière St Fiacre 

Eridania Beghin Say 

L’Oréal 

Transaction 

Demerger** 

Squeeze-out 

offer 

Squeeze-out 

offer 

Squeeze-out 

offer 

Minority buyout 

offer 

Share exchange 

offer 

Share exchange 

offer 

Securities 

concerned 

Shares, 

ICs, VRCs 

Date 

VRC value / 

ordinary share value 

Terms 

of the offer 

3 previous 

months* 

Premium 

of the 

offer 

June 2001 5.00% 3.62% 38.10 % 

VRCs June 1999 6.00% 4.00% 50.00% 

Shares, 

ICs, VRCs 

Shares, 

ICs, VRCs 

Shares, 

ICs, VRCs 

April 1997 3.61% 2.83% 27.67% 

July 1996 13.33% 8.26% 61.44% 

April 1996 28.00% 23.50% 19.15% 

ICs / VRCs June 1995 6.25% 7.43% -15.86% 

ICs / VRCs June 1993 40.00% 41.08% -2.62% 

Average 25.41% 

Minimum -15.86% 

Maximum 61.44% 

Average excluding share exchange offers 39.27% 

Average excluding share exchange offers 

and demergers 

39.56% 

* relative value based on quoted VRC prices in the three months prior to the offer except for: 

- Eridania Beghin Say demerger: data taken over a 1-year period (only 1 VRC price quotation in the 6 months prior to the offer) 

- Piper Heidsieck squeeze-out offer: data taken over a 6-month period (no VRC price quotations in the 3 months prior to the offer) 

** Eridania Beghin Say (EBS) was split into four companies in May 2001, with shareholders receiving one share in each of Beghin Say, 

Cereol, Provimi and Cerestar for each EBS share held. As part of this transaction, one share in each of Beghin Say, Cereol, Provimi and 

Cerestar were exchanged for 20 EBS VRCs. 

*** calculation at 20 January 1999, on which date Détroyat Associés signed its appraisal confirming the fairness of a VRC price equal to 6% 

of the ordinary share price 

Sources: information memorandums, annual reports 

The premiums observed in public offers vary widely, ranging from -16% to +61%, with an average of 25%. 

Limiting our analysis to squeeze-out and buyback offers, the average is 39.6%. 

Bouygues’ Board of Directors has decided to offer 

€5.46 per VRC, i.e. a premium of 50% to the previously 

determined reference value of €3.64. This 

premium is identical to that used in the two most 

recent transactions, and is substantially higher 

than the average premiums calculated above, 

although it is lower than the highest premium 

observed (61.44%). 

Conclusion 

Analysing the prices of Bouygues VRCs and ordinary 

shares in the three months to 14 February 

2006, we calculate that the VRC’s value is 8.48% 

of the ordinary share’s value. 

Taking into account the volume-weighted average 

price of Bouygues’ ordinary shares in the 

three months to 27 February 2006 (€42.89), the 

price per VRC offered (€5.46) shows a 50% premium 

to the VRC reference price. 

Premiums applied in public offers for VRCs vary 

widely. The mandatory nature of the planned 

squeeze-out leads us to conclude that a 50% 

premium is fair. It lies within the observed range 

of premiums, and is equal to or higher than the 

premiums offered in the three similar transactions 

carried out in the last nine years, although 

it is lower than the highest premium offered ten 

years ago. 

As a result, the price of €5.46 offered per VRC 

is fair for both VRC holders and for Bouygues 

shareholders. 

Paris, 3 March 2006 

Détroyat Associés 

238

DRAFT RESOLUTIONS 

1. ORDINARY PART 

First resolution 

(Approval of the parent company accounts for 

2005 and discharge of directors) 

The Annual Meeting, taking its decision under the 

quorum and majority voting conditions for ordinary 

shareholders’ meetings, having acquainted 

itself with the Board of Directors’ annual report 

on the company’s business and situation in 2005, 

the Chairman’s report attached to the business 

report, the auditors’ general report on the 

accounts for the year and the auditors’ report 

on the Chairman’s report, approves the parent 

company accounts as at 31 December 2005 as 

presented, showing net profit of €260,833,378.18, 

and the transactions recorded in the accounts or 

summarised in the reports. The Annual Meeting 

approves the choice of accounting method for 

retirement benefits, resulting in a reduction of 

€5,185,467 in retained earnings. 

The Annual Meeting gives the directors full discharge 

for performance of their duties in 2005. 

Second resolution 

(Approval of the consolidated financial statements 

for 2005) 





on the company’s business and situation, the 

Chairman’s report attached to the business 

report, the auditors’ report on the consolidated 

financial statements and the auditors’ report 

on the Chairman’s report, approves the consolidated 

financial statements at 31 December 2005 

as presented, showing net profit attributable to 

the Group of €832,170,000, and the transactions 

recorded in the accounts or summarised in the 

reports. 

Third resolution 

(Appropriation of earnings, amount of dividend) 





and noting that distributable earnings amount to 

€537,180,016.80, decides: 

• to distribute a first net dividend (5% of par) of 

€0.05 per share or per investment certificate, 

representing a total amount of €16,838,144.80; 

• to distribute an additional net dividend of €0.85 

per share or per investment certificate, representing 

a total amount of €286,248,461.60; 

• to carry over the remainder in the amount of 

€234,093,410.40. 

The dividend of €0.90 per share and per investment 

certificate will be paid in cash from 3 May 

2006. 

In accordance with Article 158.3.2 of the General 

Tax Code, natural persons resident in France for 

tax purposes from 1 January 2006 will be eligible 

for 40% tax relief on the dividend, or €0.36 per 

share and per investment certificate. 

No earnings other than the above-mentioned dividend, 

whether eligible or not for the 40% rebate, 

are distributed in respect of this meeting. 

Should the company hold some of its own stock 

when the dividend is distributed, the sum corresponding 

to the amount of dividend not paid 

because of the nature of such stock shall be 

allocated to retained earnings. 

The Annual Meeting notes that the Board of 

Directors has fulfilled its statutory obligation to 

state the amount of dividends distributed in the 

last three years. 

2002 2003 2004 

Exceptional 

payout (2) 

Number of shares 344,361,919 333,199,969 332,758,624 332,758,624 

Dividend €0.36 €0.50 €0.75 €2.52 

Tax credit (1) €0.18 €0.25 - - 

Total dividend per share €0.54 €0.75 €0.75 €2.52 

Total dividend €121,089,514.32 €166,423,811.00 €248,928,093.00 €838,551,732.48 

Distributed earnings 

eligible for tax relief in 

accordance with Article 

158.3.2 of the General 

Tax Code 

- - €248,928,093.00 €838,551,732.48 

(1) on the basis of a 50% tax rate 

(2) The amounts shown relate to the fraction similar to a dividend for tax purposes of the exceptional payout of €5.00 per share or per 

investment certificate decided by the shareholders’ meeting of 7 October 2004 and made on 7 January 2005. This payout qualifies for 

tax purposes as an exceptional dividend of €2.52 and a capital repayment of €2.48. 


239

Fourth resolution 

Sixth resolution 

Ninth resolution 

Twelfth resolution 

(Transfer of the balance from the special longterm 

capital gains reserve to the “Other reserves” 

account) 





and having regard to the provisions of Article 

39 IV of the Supplementary Finance Act 2004 

(Act 2004-1485 of 30 December 2004), decides 

to transfer €183,615,274.88 from the special 

long-term capital gains reserve to the “Other 

reserves” account, from which exceptional tax at 

the rate of 2.5% as stated in Article 39 IV of Act 

2004-1485 of 30 December 2004 will be deducted 

(€4,590,381.87). 

Consequently, the special long-term capital gains 

reserve stands at €0. 

The Annual Meeting confers all powers on the 

Board of Directors to implement this resolution, 

accomplish all formalities, make all accounting 

entries and pay all taxes in connection herewith. 

Fifth resolution 

(Agreements referred to in Article L. 225-38 of the 

Commercial Code) 



shareholders’ meetings and pursuant to the 

provisions of Article L. 225-40 of the Commercial 

Code, having acquainted itself with the auditors’ 

special report on agreements referred to 

in Article L. 225-38 of the Commercial Code, 

approves the agreements mentioned therein. 

(Ratification of the co-option of a director) 

The Annual Meeting, taking its decision under 

the quorum and majority voting conditions for 

ordinary shareholders’ meetings, ratifies the cooption 

by the Board of Directors at its meeting of 

13 December 2005 of Mrs Patricia Barbizet, residing 

at 10, rue du Dragon, 75006 Paris, as director, 

replacing Artémis, for the latter company’s 

remaining term of office, i.e. on conclusion of the 

Annual Meeting called to approve the accounts 

for 2007. 

Seventh resolution 

(Ratification of the co-option of a director) 



ordinary shareholders’ meetings, ratifies the cooption 

by the Board of Directors at its meeting 

of 13 December 2005 of Mr François Jean Henri 

Pinault, residing at 7bis, rue des Saints Pères, 

75006 Paris, replacing Financière Pinault, for the 

latter company’s remaining term of office, i.e. 

on conclusion of the Annual Meeting called to 

approve the accounts for 2009. 

Eighth resolution 

(Renewal of a director’s term of office) 



ordinary shareholders’ meetings, notes that the 

directorship of Mr Martin Bouygues, residing 

at 31, rue Delabordère, 92200 Neuilly sur Seine, 

expires on this day and renews his directorship 

for a three-year term expiring on conclusion 

of the annual meeting called to approve the 

accounts for 2008. 





directorship of Mrs Monique Bouygues, residing 

at 50, rue Fabert, 75007 Paris, expires on this 

day and renews her directorship for a three-year 

term expiring on conclusion of the annual meeting 

called to approve the accounts for 2008. 

Tenth resolution 





directorship of Mr Georges Chodron de Courcel, 

residing at 23, avenue Mac Mahon, 75017 Paris, 

expires on this day and renews his directorship 

for a three-year term expiring on conclusion 

of the annual meeting called to approve the 

accounts for 2008. 

Eleventh resolution 

(Appointment of a new director) 


the quorum and majority voting conditions 

for ordinary shareholders’ meetings, appoints 

Mr François Bertière, residing at 3, avenue 

Jacqueminot, 92190 Meudon for a three-year 

term of office as director. 

His term of office will expire on conclusion of the 

annual meeting called to approve the accounts 

for 2008. 

(Ratification of the Board of Director’s decision to 

move the registered office) 




itself with the Board of Directors’ annual report, 

ratifies, pursuant to Article L. 225-36 of the 

Commercial Code, the decision made by the 

Board at its meeting of 28 February 2006 to move 

the registered office from 90, avenue des Champs 

Elysées, 75008 Paris, to 32, avenue Hoche, 75008 

Paris, as of 1 July 2006, and to amend article 4 of 

the by-laws accordingly. 

Thirteenth resolution 

(Authorisation given to the Board of Directors 

with a view to enabling the company to buy back 

its own shares and investment certificates) 




itself with the Board of Directors’ annual report, 

authorises the Board of Directions, with the option 

of delegating its powers, to cause the company to 

buy its own shares or investment certificates in 

compliance with the prevailing laws and regulations 

at the time it does so, and in particular in 

compliance with the conditions and obligations 

set forth in Articles L. 225-209 to L. 225-212 of the 

Commercial Code, in Commission Regulation (EC) 

No 2273/2003 of 22 December 2003, and Articles 

241-1 to 241-6 of the General Regulations of the 

Autorité des Marchés Financiers. 

The purpose of this authorisation is to enable 

the company: 

• to ensure the liquidity of and organise the 

market for the shares, through an investment 

service provider acting independently under 

the terms of a liquidity agreement that com- 

240

plies with a code of conduct recognised by the 

Autorité des Marchés Financiers; 

• to remit shares on exercise of rights attached 

to transferable securities giving access to the 

company’s capital; 

• to keep shares with a view to using them 

subsequently for payment or exchange in the 

context of acquisitions; 

• to allocate shares to employees or corporate 

officers of the company or Group companies 

under the terms and conditions laid down 

by law, in particular in the framework of 

profit-sharing schemes, stock option schemes, 

corporate savings plans and inter-company 

savings schemes or by allocation of bonus 

shares; 

• to cancel shares, subject to authorisation by 

the extraordinary shareholders’ meeting; 

• to implement any market practice accepted 

by the Autorité des Marchés Financiers and in 

general to carry out any other transaction that 

complies with the prevailing regulations. 

Shares or investment certificates may be acquired 

in compliance with the prevailing regulations by 

all means, on or off the market, in particular by 

private contract, including by way of derivatives, 

and at any time, including during a tender offer 

or an exchange offer. There is no limit on the part 

of the programme that may be carried out by 

block trading, which may account for the entire 

programme. 

Shares acquired may be sold under the conditions 

set by the Autorité des Marchés Financiers in its 

instruction of 6 December 2005 relating to the 

application of the share buy-back programme. 

In the context of this authorisation, the company 

may acquire its own shares or investment certificates 

on or off the market, complying with the 

following limits: 

• maximum purchase price of €80 per share or 

investment certificate; 

• minimum sale price of €30 per share or investment 

certificate; 

subject to any adjustments relating to transactions 

involving the share capital. 

The maximum amount of funds earmarked for 

the programme to buy back shares and investment 

certificates shall be €1,500,000,000 (one 

and a half billion euros). The total number of 

shares and investment certificates held may not 

exceed 10% of the share capital at this date. 

With a view to availing itself of the present 

authorisation, the Board of Directors is granted 

all powers, especially to assess whether it is 

appropriate to begin a buy-back programme and 

to decide the terms and conditions thereof. The 

Board may delegate such powers so as to place 

all stock market orders, conclude all agreements, 

in particular with a view to keeping registers of 

purchases and sales of shares, make all declarations 

to the Autorité des Marchés Financiers or 

any other body, accomplish all other formalities 

and in general do all that is necessary. 

The Board, in its report to the Annual General 

Meeting, will provide shareholders with information 

about any purchases, transfers, disposals or 

cancellations of shares carried out in this way. 

This authorisation is given for eighteen months 

from the date of this meeting. 

It invalidates, for the unused part, any previous 

authorisation having the same purpose. 

Fourteenth resolution 

(Authorisation given to the Board of Directors to 

issue equity warrants in the event of a tender 

offer for the company’s shares. This resolution 

will not be submitted to the shareholder vote on 

the assumption that, at the date of the shareholders’ 

meeting, the draft law concerning public 

takeover bids will have been definitively adopted 

providing for a vote at the extraordinary shareholders’ 

meeting for this type of delegation.) 





and the auditors’ special report, authorises the 

Board of Directors for a period of eighteen 

months from the date of the meeting, assuming 

that the use of such authorisation is permitted 

by prevailing laws and regulations, in the event 

of a tender offer for the company’s shares and 

in compliance with legal and regulatory requirements 

in force at the time, to issue equity warrants 

allowing holders to subscribe to shares in 

the company under preferential conditions and 

to allocate these warrants to shareholders at 

no cost. 

The Annual Meeting decides that the total nominal 

amount of capital increase that may result 

from the exercise of these warrants may not 

exceed €150,000,000 (one hundred and fifty million 

euros), such amount being set against the 

overall limit stipulated in the tenth resolution 

of the Annual General Meeting of 28 April 2005 

(delegation of powers to the Board of Directors to 

increase the capital, preserving the preferential 

subscription right) and that the number of equity 

warrants that may be issued may not exceed 

450,000,000 (four hundred and fifty million). 

The Annual Meeting decides that the Board of 

Directors will have full powers to determine the 

terms for the exercise of these equity warrants, 

which must relate to the terms of the offer or any 

other rival offer, as well as the other characteristics 

of the warrants, including the exercise price 

or how the price is determined, as well as the 

general characteristics and terms of any issue 

decided on the basis of this authorisation. 

The Annual Meeting notes that this authorisation 

entails a waiver by shareholders of their preferential 

right to subscribe the ordinary shares in 

the company to which warrants issued on the 

basis of this authorisation may give entitlement. 

The Annual Meeting notes that investment certificate 

holders, at a special meeting on this day, 

have expressly waived their preferential right 

to subscribe non-voting preference shares having 

the same rights as investment certificates 

to which warrants issued on the basis of this 

authorisation may give entitlement. 

2. EXTRAORDINARY PART 

Fifteenth resolution 

(Reconstitution of investment certificates and 

voting right certificates. This resolution will only 

be submitted to the shareholder vote if the 

special meeting of holders of voting right certificates, 

due to be held by first notice on 12 

April 2006, or in the event that a quorum is not 

obtained, by second notice on 26 April 2006, 

approves by a majority the proposal relating to 

the reconstitution of investment certificates and 

voting right certificates as shares.) 



shareholders’ meetings, and subject to the 

conditions required for the allocation of special 

privileges, having acquainted itself with: 

• the Board of Directors’ report and expert 

appraiser’s report on special privileges; 

• the assessment of Détroyat Associés, acting as 

an independent expert, verifying the fairness 

of the purchase price offered by the company 


241

for voting right certificates to shareholders 

and holders of voting right certificates; 

• approval, with the required majority of 95% 

holders present in person or represented by 

proxy, by the special meeting of holders of voting 

right certificates of the proposed reconstitution 

of existing certificates as shares; 

1. approves the proposed reconstitution of existing 

certificates as shares as presented by the 

Board of Directors in accordance with Article 

L. 228-31 of the Commercial Code and, more 

specifically, the purchase by the company of 

all voting right certificates at a price equal 

to €5.46 per voting right certificate and the 

transfer of the corresponding voting right certificates 

to holders of investment certificates 

at no cost; 

2. decides to carry out this reconstitution and 

grants full powers to the Board of Directors to 

amend the by-laws accordingly by removing: 

• paragraphs 2, 4, 5, 6 and 7 of Article 7 (Share 

capital), which will now read as follows: 

“The share capital is equal to €336,762,896, 

divided into 336,762,896 fully paid-up shares of 

€1 par each. 

The share capital may be redeemed, reacquired, 

increased or reduced under the conditions and 

within the limits provided by law.” 

• the reference to investment certificates and 

voting right certificates in Article 8.1 (Form 

– Registration), which will now read as follows: 

“Fully paid-up shares may be in registered or 

bearer form at the owner’s discretion. 

Shares shall be registered in accounts under 

the conditions provided by law.” 

• The second paragraph of Article 9 (Transfer 

of shares) and the reference to investment 

certificates and voting right certificates in 

the first paragraph of this article, which will 

now read as follows: 

“Shares shall be transferred from account to 

account under the conditions provided by law.” 


voting right certificates in Article 10 (Rights 

to assets and obligations attached to shares), 

which will now read as follows: 

“Each share gives entitlement, with regard to 

ownership of corporate assets and distribution 

of profits, to a share equal to the portion of the 

capital that it represents. 

Shareholders shall bear losses only up to the 

amount of their contributions or the value of 

their shares. 

The rights and obligations attached to each 

share, including rights to dividends or to a 

share of reserves, are vested in the owner 

thereof as of the time they are registered in an 

account in his name or in his favour. 

Shareholders are bound by the present by-laws 

and by all decisions of shareholders’ meetings.” 

• the reference to investment certificates in 

Article 24 (Distribution of profits), which will 

now read as follows: 

“At least five per cent (5%) of the year’s profits, 

minus previous losses if any, shall be retained 

in order to constitute the reserve required by 

law. Such requirement ceases to be mandatory 

when the reserve is equal to one-tenth of the 

share capital. It becomes mandatory again if 

the reserve falls below one-tenth of the share 

capital, for whatever reason. 

The distributable profit comprises the profit for 

the year, minus previous losses and the amount 

retained for the legal reserve as appropriate, 

plus retained earnings, if any. The following 

shall be retained from such distributable 

profit: 

a) the sum required to pay shareholders, by 

way of a first dividend, five per cent (5%) 

of the paid-up and non-redeemed amount of 

their shares. However, if a year’s profits are 

insufficient to allow such payment, shareholders 

may not claim it on the profits of 

subsequent years; 

b) all reserves or retained earnings that the 

shareholders’ meeting may decide and 

whose appropriation and utilisation it shall 

determine. 

The remaining distributable profit shall be 

divided between shareholders. 

The shareholders’ meeting deciding on the 

appropriation of profits may allow each shareholder, 

for some or all of the distributed dividend, 

to choose between payment of the 

dividend in cash or in shares.” 

• the reference to investment certificates in 

Article 25 (Liquidation), which will now read 

as follows: 

“Should the company expire or be dissolved, 

the ordinary shareholders’ meeting shall settle 

the method of liquidation and shall appoint 

one or more liquidators, whose powers it shall 

determine. 

The liquidation bonus shall be divided between 

shares without distinction.” 


voting right certificates in Article 26 (Disputes), 

which will now read as follows: 

“All disputes relating to company matters that 

may arise during the company’s lifetime or 

during its liquidation, whether between shareholders 

and the company or its directors, or 

between shareholders themselves, shall be 

referred to the competent courts of the place 

where the company has its registered office.” 

• more generally, all references to investment 

certificates and voting right certificates; 

• all references to their holders. 

Sixteenth resolution 


use delegations and authorisations in order to 

increase the company’s share capital in the event 

of a tender offer for the company’s shares.) 




itself with the Board of Directors’ report and the 

auditors’ special report, expressly authorises 

the Board of Directors, for a period of fourteen 

months from the date of this meeting, assuming 

that the use of such authorisation is permitted 

by prevailing laws and regulations, in the event 

of a tender offer for the company’s shares and 

in compliance with the legislative and regulatory 

requirements in force at that date, to use the 

different delegations of competence, delegations 

of powers and authorisations provided by the 

general meeting of 28 April 2005 to increase the 

company’s share capital by any means under the 

conditions and within the limits provided by the 

following resolutions: 

• tenth resolution (Delegation of powers to the 

Board of Directors to increase the capital, 

presenting the preferential subscription right, 

by issuing ordinary shares or transferable 

securities giving access to ordinary shares in 

the company or in a company of which it owns 

more than half the capital); 

• eleventh resolution (Delegation of powers to 

the Board of Directors to increase the share 

capital by incorporating premiums, reserves 

or earnings); 

• twelfth resolution (Delegation of powers to 

the Board of Directors to increase the capital, 

cancelling the preferential subscription right, 

by issuing ordinary shares or transferable 

securities giving access to ordinary shares in 

the company or in a company of which it owns 

more than half the capital); 

242

• thirteenth resolution (Authorisation given to 

the Board of Directors to increase the number 

of securities to be issued in the event of a 

capital increase with or without preferential 

subscription rights); 

• fourteenth resolution (Authorisation given to 

the Board of Directors to set, under terms 

decided by the shareholders’ meeting, the 

issue price for a public offering, without preferential 

subscription rights, of stock or transferable 

securities giving access to the capital, 

within the limit of 10% of the capital); 

• fifteenth resolution (Delegation of powers to 

the Board of Directors to carry out a capital 

increase with a view to remunerating contributions 

in kind consisting of a company’s stock 

or transferable securities giving access to the 

capital); 

• sixteenth resolution (Delegation of powers to 

the Board of Directors to increase the capital, 

without preferential subscription rights, in 

order to remunerate securities tendered in the 

event of an exchange offer); 

• seventeenth resolution (Delegation of powers 

to the Board of Directors to increase the 

capital in favour of employees of the company 

or of Group companies who are members of a 

corporate savings plan); 

• eighteenth resolution (Delegation of powers 

to the Board of Directors to issue shares following 

the issuance by a Bouygues subsidiary 

of transferable securities giving immediate or 

future access to shares in the company); 



have, in the event of an issue with the cancellation 

of the preferential subscription right, waived 

their preferential right to subscribe non-voting 

preference shares having the same rights as 

investment certificates, and noted that this resolution 

entails a waiver of their preferential right 


the same rights as investment certificates to 

which transferable securities issued on the basis 

of this authorisation may give entitlement. 

Seventeenth resolution 


issue equity warrants in the event of a tender 

offer for the company’s shares. This resolution 

will not be submitted to the shareholder vote on 

the assumption that, at the date of the shareholders’ 

meeting, the draft law concerning public 

takeover bids will have been definitively adopted 

providing for a vote at the ordinary shareholders’ 

meeting for this type of delegation.) 





auditors’ special report, authorises the Board of 

Directors, for a period of eighteen months from 

the date of this meeting, to issue, assuming that 

the use of such authorisation is permitted by 

prevailing laws and regulations, in the event of 

a tender offer for the company’s shares and in 

compliance with the legislative and regulatory 

requirements in force at that date, equity warrants 

allowing holders to subscribe to shares in 

the company under preferential conditions and 

to allocate these warrants to shareholders at 

no cost. 

The Annual Meeting decides that the total nominal 

amount of capital increase that may result 

from the exercise of these warrants may not 

exceed €150,000,000 (one hundred and fifty million 

euros), such amount being set against the 

overall limit stipulated in the tenth resolution 

of the Annual General Meeting of 28 April 2005 

(delegation of powers to the Board of Directors to 

increase the capital, preserving the preferential 

subscription right) and that the number of equity 

warrants that may be issued may not exceed 

450,000,000 (four hundred and fifty million). 

The Annual Meeting decides that the Board of 

Directors will have full powers to determine the 

terms for the exercise of these equity warrants, 

which must relate to the terms of the offer or any 

other rival offer, as well as the other characteristics 

of the warrants, including the exercise price 

or how the price is determined, as well as the 

general characteristics and terms of any issue 

decided on the basis of this authorisation. 

The Annual Meeting notes that this authorisation 

entails a waiver by shareholders of their preferential 

right to subscribe the ordinary shares in 

the company to which warrants issued on the 

basis of this authorisation may give entitlement. 



have expressly waived their preferential right 


the same rights as investment certificates 

to which warrants issued on the basis of this 

authorisation may give entitlement. 

Eighteenth resolution 

(Authorisation given to the Board of Directors 

to reduce the company’s share capital by the 

cancellation of treasury stock) 





auditors’ special report: 

1. authorises the Board of Directors, in accordance 

with the provisions of Article L. 225-209 

of the Commercial Code, to cancel, at its own 

discretion, on one or more occasions, all or 

some of the shares in the company acquired 

by exercise of the various authorisations to 

buy back shares granted to the Board by the 

shareholders’ meeting, up to a limit of 10% of 

the authorised capital per twenty-four month 

period; 

2. authorises the Board of Directors to charge 

the difference between the purchase value and 

the par value of cancelled shares to premiums 

and available reserves; 

3. delegates to the Board of Directors, with the 

option of subdelegating under the conditions 

provided by law, all powers to carry out the 

capital reduction or reductions following the 

cancellation of shares as authorised by this 

resolution, cause the corresponding accounting 

entries to be made, amend the by-laws 

accordingly and in general accomplish all the 

necessary formalities; 

4. grants the present authorisation for eighteen 

months; 

5. notes that this authorisation invalidates any 

previous authorisation having the same purpose. 

Nineteenth resolution 

(Delegation of powers for the Board of Directors 

to issue non-voting preference shares having 

the same rights as investment certificates. This 

resolution will only be submitted to the shareholder 

vote if the fifteenth resolution relating 

to the reconstitution of investment certificates 

and voting right certificates as shares has not 

been submitted at this meeting or has not been 

approved.) 





auditors’ special report and in accordance with 

Articles L. 225-129-2, L. 228-12 et seq., L. 228-91 

and L. 228-92 of the Commercial Code: 

1. delegates to the Board of Directors, with the 

option of subdelegating to any person authorised 

by law, powers to decide the issuance 

in favour of investment certificate holders of 


243

(i) non-voting preference shares having the 

same rights as investment certificates and (ii) 

all transferable securities of whatever kind, 

issued for valuable consideration or free of 

charge, giving access by all means, immediately 

or in the future, to non-voting preference 

shares having the same rights as investment 

certificates, and the buy-back and conversion, 

under the conditions set forth in Article 

7 of the by-laws, of non-voting preference 

shares having the same rights as investment 

certificates, up to a maximum nominal amount 

of €10,000,000 (ten million euros), given that 

the nominal amount of all preference shares 

issued under the terms of this delegation may 

not exceed 25% of the share capital; 

2. decides in accordance with Article 7 of the 

by-laws as amended that the non-voting preference 

shares and the transferable securities 

giving immediate or future access to 

the above-mentioned non-voting preference 

shares shall have the same characteristics as 

the issued transferable securities that led to 

their issue and shall be issued under the same 

terms and conditions, subject to a possible 

discount linked to the estimated value of the 

voting right; 

3. decides that the transferable securities giving 

access to non-voting preference shares having 

the same characteristics as investment 

certificates issued in this way may consist of 

debt securities or be associated with the issue 

of such securities or enable such securities 

to be issued as intermediate securities. In 

particular, they may be subordinated or not, 

and be issued in euros or foreign currency 

or any other monetary unit established with 

reference to several currencies. 

The nominal amount of debt securities issued 

in this way may not exceed €10,000,000 (ten 

million euros) or the equivalent value in euros 

at the date the issue is decided, given that 

such amount does not include redemption 

premiums over par, if any. This amount is independent 

of and separate from the amount of 

debt securities, the issues of which is provided 

for by the twelfth, fifteenth, sixteenth and 

twenty-first resolutions put to shareholders’ 

meeting of 28 April 2005; it is also independent 

of and separate from the amount of debt 

securities whose issuance might be decided or 

authorised by the Board of Directors pursuant 

to Article L. 228-40 of the Commercial Code. 

The securities (giving access to non-voting 

preference shares having the same characteristics 

as investment certificates) may bear 

interest (which may be capitalised) at a fixed 

or floating rate; they may be redeemed with or 

without a premium or amortised or purchased 

on the market or be the subject of a tender or 

exchange offer from the company; 

4. decides that the Board of Directors shall 

have all powers to implement this delegation, 

including by concluding any agreement to 

that end, in particular with a view to completing 

any issue, to make the above-mentioned 

issues on one or more occasions, in such 

proportion and at such times as it may deem 

appropriate, in France or elsewhere or on the 

international market – and, as appropriate, to 

postpone such issue – to note completion of 

the issue and amend the by-laws accordingly 

and to accomplish all formalities, make all 

declarations and request all authorisations 

that may prove necessary to the satisfactory 

conduct and completion of such issues. 

5. grants the present powers for eighteen months 

and notes that this authorisation invalidates 

any previous authorisation having the same 

purpose. 

Twentieth resolution 

(Amendment of the by-laws) 




itself with the Board of Directors’ report, 

decides to amend the first paragraph of Article 18 

(Supervisors) of the by-laws as follows: 

Old wording 

“The ordinary shareholders’ meeting may appoint 

one or more supervisors for a six-year term.” 

New wording 

“The ordinary shareholders’ meeting may appoint 

one or more supervisors for a three-year term. 

However, the term of office of supervisors in 

office at the date of the shareholders’ meeting of 

27 April 2006 shall be six years.” 

Twenty-first resolution 

(Powers to carry out formalities) 

The Annual Meeting grants all powers to the 

bearer of an original, copy or extract of the 

minutes of this meeting to carry out all legal or 

administrative formalities and to make all filings 

and notifications required by the prevailing laws 

and regulations. 

244

CERTIFICATE OF RESPONSIBILITY 

Having taken all reasonable steps to that end, I certify that to the best of my knowledge the information contained 

in this Annual Report accurately reflects the true situation and that there are no material omissions. 

The statutory auditors, Ernst & Young Audit and Mazars & Guérard, have provided me with an opinion in which they 

state that they have verified the information about the financial situation and accounts provided in this Annual 

Report, and that they have read the Annual Report as a whole. 

The statutory auditors have prepared reports, containing observations, on the historical financial information 

provided in this Annual Report. They are listed on the inside front page of this Annual Report. 

Saint-Quentin-en-Yvelines, 11 April 2006 


Chairman and CEO


Challenger - 1 avenue Eugène Freyssinet 

78061 Saint-Quentin-en-Yvelines cedex 

France 

Tel.: +33 1 30 60 33 00 

www.bouygues-construction.com 


150 route de la Reine 

92513 Boulogne-Billancourt cedex 

France 

Tel.: +33 1 55 38 25 25 

www.bouygues-immobilier.com 

Colas 

7 place René Clair 


France 

Tel.: +33 1 47 61 75 00 

www.colas.fr 

TF1 

1 quai du Point du jour 


France 

Tel.: +33 1 41 41 12 34 

www.tf1.fr 

Challenger - 1 avenue Eugène Freyssinet 78061 Saint-Quentin-en-Yvelines cedex - France - Tel.: +33 1 30 60 23 11 

Registered office of Bouygues: 90 avenue des Champs-Élysées 75008 Paris - France - Tel.: +33 1 44 20 64 00 

32 avenue Hoche 75378 Paris cedex 08 (from 1 July 2006) - France - Tel.: +33 1 44 20 10 00 - www.bouygues.com 


Arcs de Seine - 20 quai du Point du jour 


France 

Tel.: +33 1 39 26 75 00 

www.bouyguestelecom.fr 

The Annual Report 2005 is printed on PEFC paper. International PEFC certification guarantees compliance with the rules of sustainable forestry and monitoring until the final distributor. 

Bouygues group Internal Communication Department. Design: Red Line. Production: AC 2 Communication. Printing: Typoform. Translation: Bouygues Translation Department ; A. Shaw ; SJ Reynolds and JH Lambert ; Translations. Q2 2006.

A N N U A L R E P O R T - Bouygues

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