Bouygues SA (EN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Good morning, and thank you for being with us for this presentation of the Bouygues Group's annual results, 2020 annual results. We're still working remotely because of the pandemic. This morning, I'm going to comment at the results with Olivier Roussat and Pascal Grange and, of course, with the heads of our 5 businesses. We'll then happily take your questions at the end of the presentation. First of all, I'd like to say a few words about changes to the governance of our group. Now at yesterday's Board of Directors meeting, I proposed that we separate the functions of Chairman and Chief Executive Officer. As you know, I have been Chairman and CEO since the first of September 1989. I'm now nearly 69 years of age. And so I felt that the time had come to change the way our group is governed. Now the Board approved my suggestion. And of course, Olivier Roussat was appointed Chief Executive Officer of the group. Before that, he was Deputy CEO. So that was the natural way to do things. So he will be in charge of our Board of Directors and management committee. He has also appointed 2 new Deputy CEOs. Pascal Grange, who was previously Senior Vice President and who will continue to be in charge of finance. You all know Pascal, of course. And secondly, Edward Bouygues, also as Deputy CEO. My eldest son who's in charge of developing telecoms, CSO and group development, he will also be appointed Chairman of Bouygues Europe, which is a small entity liaising between the Bouygues Group and the European Commission. The idea is to do lobbying, defend our positions when we need defending. And Edward will also devote service time to Bouygues Telecom, where he has been appointed Executive Vice President in charge of development. So I think that was a very useful move. Remember, the group was founded by Francis Bouygues exactly 70 years ago. I think it was in the last quarter of 1951. And the first full year was 1952. Now one of the original things about the group is that in 70 years of its existence, we have only had 2 Chairman. That's rare enough to be worth mentioning. I think this is -- maybe one of the reasons that we have a very strong corporate culture. Our corporate culture is very original and very widely shared by our employees. These are, I believe, characteristic features of the Bouygues Group. I think it will be up to the new team to develop, enrich and even modernize that culture, to ensure that it is as widely shared as possible by our employees for the greater benefit of our clients and, of course, of our shareholders, too. That's what I want to say about our change of governance. Let's now move on to Page 5 to the presentation of the highlights. 2020 was an unprecedented year that was very difficult from the human and economic point of view. If the pandemic that the world had faced hasn't been finished now, at least there are vaccinations that are, in fact, light at the end of the tunnel. So in this broader context, the group has proved it's agile, responsible and resilient. We very rapidly adapted to the way we work and implemented strict protocols to protect our employees, our clients, our partners and, of course, our subcontractors. In France, back in mid-April before the first lockdown, we gradually started up our construction business again. And thanks to the sharp rebound of business in the second half year, we have actually contained the impact of the pandemic on our revenue and on the group's results. So the group's current operating income rose 11% by comparison with the second half of 2019. Now the target we set ourselves as a -- of a current operating margin slightly higher than the second half of 2019. That target has been exceeded because we exceeded 6.8%, that is up 0.8 of a percentage point. Against this backdrop of crisis, this actual -- certainly, our financial structure is undeniable. We ended the year with a very low level of debt, fractionally below the EUR 2 billion mark, down by comparison with 2019 and cash at a very high level of EUR 12 billion. Free cash flow after working capital requirements reached EUR 1.2 billion, which is much higher than in 2019. In fact, it's a remarkable performance that is worthy of mention, given the context. So far as there's no such thing as a vaccination against global warming, whose consequences are increasingly visible, increasingly striking, we have moved on to a new stage with our climate strategy. On the 16th of December last, our 5 businesses published ambitious goals to reduce their greenhouse gas emissions by 2030 in line with the Paris Agreement. And of course, they also published their plans of action to achieve those goals. Finally, given our good results, the Board will propose that the next AGM approve the payment of a dividend of EUR 1.70 per share, which is a token of our confidence in the group's future. Moving on to the highlights. This is Page 6 of the handout. Construction finished the year with a backlog at a record level, which gives us good visibility for the future. Furthermore, profitability was well turned around in the second half year, and free cash flow is at a remarkably good level. As for TF1, it has remained a leader in terms of its own commercial targets and has proved very quick to respond and adapt its programs at its cost. Finally, Bouygues Telecom is continuing to expand. The commercial dynamics have been very good in mobile and actually gathered pace in fiber to the home. Bouygues Telecom exceeded its services revenue target, which rose by 6.4% over the year. Its EBITDA after leases also rose sharply over the year at over 6%. Finally, it generated a free cash flow of EUR 254 million, of course, in line with the guidance. Let's now look at the key figures for the group on Page 7, which is evidence of our good resistance to the pandemic. Thanks to the very strong mobilization of the businesses, the downturn in revenue was well contained. And indeed, likewise with contemplating income. At EUR 34.7 billion in 2020, the group's revenue was only down 9% over the period. Remember that it was down 15% at the end of the first half year by comparison with the first half of 2019. Current operating income was well in the black for the year at EUR 1.222 billion, down EUR 454 million by comparison with 2019. Just for the record, in the first half year, we estimated that the impact of the pandemic would be some EUR 650 million. That is the impact on the group's current operating income. At EUR 696 million, the group's net income or group share of net income includes an increase in noncurrent income related to the cost of adapting our construction business and impairments of various assets at the Unify division at TF1. It also includes Alstom's contribution of EUR 169 million, which is down from EUR 238 million in 2019. Alstom's contribution was EUR 118 million in Q4 subsequent to the 2 transactions we carried out during the period. Let's take a closer look at the group's performance in the second half. That's Page 8 of your handout. As we said at the start of today's presentation, the group became very profitable once again in the second half of 2020. Current operating margin reached 6.8%, up 0.8 of a percentage point over the year. This is higher than the target we set ourselves last August. This performance was due to the good growth momentum at Bouygues Telecom, the pickup in business and the various savings achieved in construction out of TF1. Let's now look at the group's free cash flow. That's Page 9. The group generated a remarkably high level of free cash flow after working capital requirements at EUR 1.2 billion, much higher than we anticipated. It was up sharply on 2019 even when we factor out the Alstom dividends. Now this performance is indicative of 2 things. First of all, a very good generation of free cash flow at EUR 725 million despite the impact of COVID-19 on our businesses and our results and in a broader context of maintaining our investment momentum to increase our growth over the next few years. Leaving aside 5G frequencies, net CapEx totaled EUR 1.6 billion, which was stable by comparison to 2019. Finally, or secondly, I should say, the excellent management of working capital requirement relating to operating activity by all the businesses. This performance contributed to the great strength of our financial structure, as you can see on our new slide. At fractionally below the EUR 2 billion mark, net debt at year-end improved by EUR 240 million -- EUR 241 million by comparison with year-end 2019. This net debt allows for the high generation -- or should I say, it can result from high generation free cash flow after working capital requirements. The positive impact of the disposal of a 4.8% stake in the capital of Alstom in September 2020 for a total of EUR 450 million net of expenses; the acquisition of EIT by Bouygues Telecom for some EUR 830 million; and the first 5G frequencies, for which we paid EUR 87 million. The gearing or net debt ratio was at historically low 17%. This compares with an average of approximately 37% over the last 15 years. As you can see on Page 11, at the end of December 2020, Bouygues had a very high level of cash available for a total of EUR 12 billion. That's an increase of EUR 400 million compared with the end of December 2019. This breaks down to EUR 4 billion in cash and EUR 8 billion in undrawn lines of credit, of which EUR 7.6 billion are covenants. Concerning the debt structure, it's very well spread over time. Furthermore, the bank loans in this debt schedule, which is in light blue on the chart, is a relatively minor by comparison, which shows just how efficient our centralized cash management is. I'm now going to give the floor to Olivier Roussat for a detailed review of the performance of our various operations. Olivier, you have the floor.

Thank you, Martin, and we'll start off with the construction business. On this slide, you have pictures of this business. You have what is known as soft mobility. We're building a [indiscernible] tunnel for Grand Paris, a bicycle lane and a garden where we plant greenery to prevent having too much concrete on the ground. Order book has reached an almost all-time record, EUR 33.1 billion. That's -- the real record was 2 years ago, where we were slightly above that. But still, we have 62% of the order book. The backlog then is overseas, and it's stable compared to 2019. Let's take a closer look at the construction business in France. The order book in France is slightly down, just 1% down, year-on-year. It's 1% up at Bouygues Construction and 2% up at Colas compared to last year. Bouygues Construction order intake was up 5% in Q4 2020 compared to a year before. And you have 2 examples of such orders. In Q4, there is a project in Bagneux and another one in Champs-sur-Marne. At Colas, the order book is stable in Road Metropole. That is the road business in France. And that's because we have a better-than-expected performance from private as well as public customers. The order book at Bouygues Immobilier is down 11%. There are reasons -- well, the same reasons, as we mentioned before. We don't have an issue with demand. We have, in fact, an issue with supply. What it is, is that we have land, we have customers that are happy to buy property. But in between the 2, we need to get the construction, the building permit and that has been halted. And so that makes it difficult to take on new orders. If you look at the order book internationally, it's up 12 -- 2% if you leave out disposals and acquisitions that occurred in -- compared to 2019. It's up because Bouygues Construction's order book is up 4%, and that's because its order intake was up 10% in 2020 compared to 2019. We have 2 examples, again, from Q4, the Pawtucket Tunnel in the U.S., EUR 256 million; you have Ucka in Croatia. We have Hong Kong, the Health Authority's EUR 200 million. For the order book of Colas, it's stable, restated for the main acquisitions and disposals. It does include the extension of the metro line, the Edmonton Metro line in Canada, that's worth EUR 500 million right there. H1 was, of course, impacted by the COVID crisis. But the construction business bounced back in H2. And that dramatic return to business made it possible to contain the loss of revenue and, indeed, a decline in operating profit for the year. Sales for the construction business revenue was EUR 26.2 billion, so down 11% over the year. That decline is more marked in France than elsewhere because the lockdown conditions were much more drastic in France than elsewhere around the world. The current operating profit stands at EUR 437 million. So that's a healthy figure, but it's down still EUR 473 million compared to 2019. Current operating margin stands at 1.7% over the year. So that's down 1.4 percentage points compared to last year. However, on H2, current operating margin for the construction business reached a high level, 5.7%, up 0.5 percentage points compared to H2 2019. And so that good performance is the result of several things: number one, gradual return to business indeed catching up because that is also because we took all sorts of steps in H1, make the necessary provisions to be able to start up when business picked up again; savings that were conducted around the business; and then some compensation that we received after some sites were halted in H1. Throughout the year, significant efforts were also made to generate free cash flow. And so now after, WCR stands at -- it's a high number, it's EUR 1.04 billion compared to EUR 704 million a year before. So that's a significant improvement. Let's move on to TF1. The results were presented by Gilles Pelisson about 10 years ago -- 10 days ago, I beg your pardon. So I will go over this quickly enough. The first good news is that we maintained its leadership on commercial targets. The audience shares on women in charge of purchases remained high at 32.4%. Regarding individuals aged between 25 to 49, audience share was 29.9%, and that's a consistent increase since 2017. These audience shares show that, well, viewers spend more time watching TV because of the lockdown and the curfews and whatnot. Nonetheless, they decided to stick with TF1, which goes to show that the -- our programs were very much in line with viewers expectations. Regarding the financial performance, well, you do have the effects of the COVID crisis with the lost revenue in H1 2020, but then a rebound of the broadcasting business in H2. Revenue -- sales were down 11% for the year as a whole. There is a resumption of advertising income in H2, and that made it possible to make up some of the cancellations of H1. Some of the advertising campaigns were simply postponed from H1 to H2. On revenue, there was Newen, which had halted all its shootings between April and May, was able to resume that activity in H2. And then we do have to pay tribute to the efforts made by TF1 to keep the cost structure under control, in particular, the programming costs. TF1 was able to save as much as EUR 152 million for all its 5 free-to-view channels, and that is unprecedented in TF1's history. And that EUR 152 million saving made it possible to compensate 100% of the lost advertising revenue. Regarding the outlook for TF1. Well, in 2021, TF1 will offer a great variety in its programs. And well, we will be able to resume programming, including for the Euro 2021, because the World Cup is the following year. Still, there is some uncertainty about the COVID crisis, indeed possible variance and new lockdown conditions. But TF1 will lean on its ability to adjust and adapt so as best to handle the situation and develop its broadcasting accordingly. It will be developing Newen's activity internationally and to develop its new platforms there. And then we will refocus Unify, strengthen the brands, develop synergies to develop business and improve profitability. In fact, we're looking to positive COP in 2021. Now Bouygues Telecom. On this picture, you have a Bouygues Telecom shop. Because of the curfew conditions, we changed the opening hours. Now it's 9 until 6 PM, but a number of shops had to close down in shopping malls. Still, if you look at the sales momentum that we had in 2020, we can see that, that momentum was confirmed. Our operator was able to secure its position. Even though there was a significant increase in traffic, customer satisfaction did not decline at all. And in fact, at end December 2020, Bouygues Telecom had 12.1 million contract mobile customers, not including machine-to-machine or the EIT acquisition. We gained as many as 606,000 clients over the year, including 150,000 in Q4 alone. The base of fixed customers is now 4.2 million, including 38% of FTTH customers compared with 25% last year. The demand for FTTH has been stepping up. And that -- there, you have the effects of lockdown, where there was a significant push of FTTH technology compared to ADSL. Bouygues Telecom gained 226,000 new customers. That's a record high since -- ever since we launched the FTTH offer. All in all, Bouygues Telecom was able to take on another -- to take on 604,000 FTTH customers over the year, with a total number standing at 1.6 million at end 2020. On this picture, you have the latest offer. That's supposed to be the best Wi-Fi repeater on the market. It's called modem Bbox fiber Wi-Fi 6. Bouygues Telecom is the first operator to build a vertical modem. It's vertical because a signal propagation is better when you have a standing box rather than when it is horizontal. That's a significant technological breakthrough. And we have to pay tribute to Bouygues Telecom. Up until now, we had these boxes lying underneath the set-top box. And now it's standing alone, and indeed standing, which makes a huge difference. Now how does the new intake of customers reflect on revenue? Well, sales were up 5% over the year. I beg your pardon. The sales from services were up 5% year-on-year in spite of the lost revenue of roaming, that was as much as EUR 33 million. The fixed business was up 9% over the period. The mobile sales -- mobile business is up 3%, and that's because of more customers, but also improvement in ABPU, both mobile and fixed. The mobile average billing per unit grew from EUR 19.2 million in Q4 2019 to EUR 20.4 million in Q4 2020, restated for the roaming effect. As to the fixed ABPU, it's even more spectacular. We're looking at an additional EUR 2.7 per customer per month, with our ABPU standing now at EUR 28.6. We have a bigger -- well, a more aggressive strategy called more for more, offering more services for a slight increase in the rates, and this is really now bearing fruit. Our strategy now has enabled us to generate in sales from services an improvement of 6.4% over the full year, standing at EUR 4.9 billion. You have a little sticker on Page 25. So this was a major -- well, an impacted year where we lost a lot of roaming business and yet being able to generate 6.4% improvement is quite a feat. It is quite unique indeed in Europe because of course, of the lockdown, there was no roaming business, and yet we were able to achieve that performance. At EUR 1.5 billion, EBITDA after leases was up EUR 91 million compared to last year. So that includes EUR 20 million of nonrecurring costs that were related to the brand positioning campaign and the advertising campaign. And then there's a EUR 90 million negative net impact of roaming over the year. And yet, in spite of all this, EBITDA margin after leases was stable at 30.7%. Current operating profit was EUR 623 million, up EUR 83 million over the year. That includes EUR 50 million of nonrecurring items in Q4 because of a better improvement in delinquent bills and a revision of the depreciation timetable. Operating profit stood at EUR 651 million, including EUR 28 million from noncurrent profits and compared with EUR 70 million before because there were fewer mobile sites sold off. CapEx, not including 5G frequencies, were EUR 1.27 billion, in line with the guidance. And disposals over the same period were EUR 245 million, and that includes a significant portion of the Asterix project, optic fiber project. That was EUR 185 million in disposals right there. And then free cash flow, EUR 254 million is in line with the objective for 2020, that is what we announced. Let's take a look at the effects of the EIT operation. That operation was completed on December 31 in the morning last year. The acquisition price was EUR 264 million -- sorry, EUR 564 million, not including the earn-out there. Some -- part of the price includes a reflection of the performance after the acquisition. In any case, that acquisition makes Bouygues Telecom the #3 mobile operator in France with 14.2 million customers with -- when you add in the 2.1 million EIT customers. So this is a tool by which we will expand our market share. That was part of the strategy which Richard and his teams discussed at the beginning of the year. So because of this acquisition with EIT, Bouygues Telecom will be able to develop its business on 3 key markets. The -- well, general public, B2C, and we -- EIT already has 2.1 million customers right there. The corporate market, we have as many as 93% of French companies already covered. And then -- well, we have as many as 4,000 branches on the Crédit Mutuel-CIC network. So that will expand, of course, the network. Synergies will occur as EIT customers will migrate from SFR and urge go to Bouygues Telecom, although some were there already, of course. Let's review the announcements that Richard made on Capital Markets Day in January. His strategic plan is called Ambition 2026 for Bouygues Telecom. So what's the purpose there? Well, of course, we want to accelerate growth so as to become #2 in the mobile business. We'll see just what we mean by #2 in the mobile business. We want to be a major player in the fiber business with an additional 3 million customers in BtoC and then also increase the fixed part of the business for BtoB. To get there, we have 3 assets. Of course, we have -- our employees, very much committed to this, and we have seen a development over the year, the quality of the network, and that has been recognized by Arcep again and again. And of course, its outstanding customer experience, and that has been an asset for many years indeed. So Ambition '26 proposes to pursue sustainable but profitable growth. The idea was to have sales from services above EUR 7 billion by 2026. EBITDA after leases should stand at about EUR 2.5 billion. EBITDA margin is aimed to be 35%. And then free cash flow, we're looking at EUR 600 million. That's the third objective. Now what exactly do we mean by #2 in the mobile business? Well, we want to be considered to be the first second choice. I mean, in terms of networks, when customers are asked, if you don't go for #1, whom would you go for? I mean it's a matter of perception. We want to be in that position. How can we get there? Well, of course, there has been a significant brand positioning announced by Richard in 2020. We also need to secure a position as the second mobile network in France, and that was done through the significant investments, which Richard mentioned in Capital Markets Day. And then, of course, we have to capitalize on the integration of EIT. That's number one. Number two is to gain 3 million additional FTTH BtoB customers -- BtoC customers, I beg you pardon, and that will be because of the expansion of our coverage. We will double the number of subscribers from 17.7 million premises to 25 -- 35 million by 2026. You may remember this set-top box, the vertical Wi-Fi repeater, this is the first time that the media have recognized that we have, Bouygues Telecom have produced the best device on the market. It's the best on the FTTH market, which is -- happens to be the fastest-growing business. So there, you have an example right there. But we'll also be working on eco-designed item, products in this -- that Wi-Fi Box is a case in point. And then we will be offering competitive offers and capitalize on our more-for-more strategy. And number three, we want to double our position in the fixed BtoB business and be a major player in the wholesale fixed business. And well, we -- because of the connection with EIT, we can have access to the SME market, which is the most profitable segment -- market segment. And then there are a number of infrastructure projects that are underway. We want to be able to turn these FTTO and FTTA infrastructure, turn this into a profitable business and be able to cash in on the wholesale fixed offer. So we have our objectives for 2021. I mean obviously, we'll pursue both FTTH and mobile with the integration of EIT. We're looking at organic growth at sales from services estimated at about 5%, plus 5%, in spite of the lost roaming business. And we don't expect that to bounce back so quickly. You have to understand that roaming does not exist within Europe. Roaming business comes from the U.S. or Asia. And as things stand, transcontinental flights are few and far between. And there were a few people on board at all. So very few roaming consumers and so very little business there. We're also looking at an improvement in after -- in EBITDA after leases, including EIT, up 5%. Well, because, of course, people are spending more money in the business, but -- and we have to spend more on OpEx and CapEx. There are more leases. So we have, in spite of this, we're looking at improved EBITDA. And then net CapEx should be about EUR 1.3 billion, not including 5G frequencies. And now I'll give the floor to Pascal Grange, who will give you details of the accounts.

Thank you, Olivier. I'm going to talk about the consolidated accounts, beginning with the income statement. I'm not going to dwell on revenue and current operating income because they've already been presented by business by both Olivier and Martin. So I'm going to focus on the other operating income and expenses, which were a total of EUR 98 million negative in 2020 against income of EUR 20 million in 2019. Now these expenses include EUR 69 million at Colas. This is consistent with the reorganization of the Road Building business in France and, of course, the decommissioning of the Dunkirk refinery. It also includes EUR 70 million in restructuring costs at Bouygues Immobilier. And finally, EUR 75 million at TF1 corresponding to the impairment of part of the goodwill and some of the unified brands. These expenses were partly offset by nonrecurring income. Two examples, EUR 36 million at Bouygues Construction. This is due to the litigation with Alpiq; and of course, EUR 28 million at Bouygues Telecom, mainly due to capital gains from disposals of mobile sites. The net debt improved by EUR 40 million over 1 year. This variation was due to, first of all, EUR 25 million in the -- a reduction of EUR 25 million in the average outstanding debt by comparison to the previous year and a weakening of interest rates on our bond issues worth EUR 15 million to us. Concerning the lower half of the income statement, we recorded a taxation of EUR 317 million in 2020, down from EUR 452 million in 2019. The effective tax rate was 36% this year, up fractionally from 32% in 2019. This variation can be attributed to 2 factors. First of all, a number of deficits abroad, outside of France anyway, which cannot be carried as deferred tax assets. And secondly, the effective tax rate is different this year because 2020 losses on fully integrated subsidiaries are activated at a lower rate than the effective rate at this year. The decrease of EUR 134 million in the net income of joint ventures and associates in 2020 was mainly due to the decreased contribution from Alstom. This variation can be explained in several ways. First of all, the EUR 54 million decrease in capital gains from disposals and dilution, EUR 172 million last year, but only EUR 118 million in 2020. Secondly, this can be explained by a decrease in Alstom's contribution, a EUR 15 million decrease due exclusively to the downsizing of our stake in the capital of Alstom. Overall, net income was EUR 770 million in 2020. The group share was EUR 696 million, down from EUR 1.184 billion in 2019. Let's now look at the group's balance sheet at year-end 2020. The total of the balance sheet was EUR 40.6 billion, up from EUR 39.5 billion at year-end 2019. We are, by the way, Page 31. Noncurrent assets totaled EUR 21.5 billion, up by EUR 1.132 million -- EUR 1.132 billion. This is due to several factors. First of all, intangible assets were up EUR 517 million. Bouygues Telecom is the main contributor to this increase due to the acquisition of 5G licenses for a total of EUR 608 million. Conversely, the impairment of Unify brands was carried under this same item at minus EUR 17 million. As for goodwill, goodwill rose by EUR 691 million. This increase is mainly attributable to EIT for plus EUR 756 million, offset partly by the impairment of the Unify division's goodwill for a total of EUR 58 million. Finally, joint ventures and associates was down slightly, down EUR 14 million. This was mainly due to 2 changes. First of all, the valuation of Bouygues Telecom's stake in STAIF, which we refer to as the Asterix project. That is for EUR 295 million. Almost entirely offset by Alstom for EUR 263 million. This amount is consistent with the share of our results for the period. The variation in the value of Alstom was subsequent to our disposal of 4.8% stake and the first capital increase of Alstom. These current assets -- the current assets were mainly stable over the period. Finally, assets held for sale, assets or activities held for sale, includes EUR 41 million in net book value. The net book value of the Bouygues Telecom data center, which we expect to dispose of in the course of 2021. On the liability side, the biggest change concerns noncurrent liabilities, which rose by EUR 1.221 billion between 2019 and 2020. Noncurrent financial debt rose by EUR 1.3 billion. This was, of course, subsequent to the EUR 1 billion bond issue in April 2020 and the additional earn-out to be paid for the acquisition of EIT by Bouygues Telecom. Let's now look at changes in net debt in 2020. This is Page 32. As you've already seen, net debt was fractionally below the EUR 2 billion mark at the end of 2020. This low level of debt is a reflection of how well our businesses have performed in 2020 and, in particular, Bouygues Construction, which at a very high level of cash at over EUR 3.1 billion. TF1 and Colas succeeded in reducing their debt to almost 0 in 2020. Net debt at the end of 2020 was down EUR 241 million by comparison with year-end 2019. This was subsequent to the following main changes: First of all, EUR 450 million due to the disposal of almost 4.8% in the capital of Alstom, as I said earlier on. Secondly, the cost of acquisitions, that was EUR 747 million net of disposals, comprising mainly EIT for EUR 830 million, which includes the earn-out, that was by Bouygues Telecom, of course; the acquisition of Granit Contracting by Colas for EUR 224 million; and of course, the amount received in compensation subsequent to the digital litigation, that was approximately EUR 90 million. In addition, we have EUR 37 million for various capital transactions and others, combining the share buybacks, the exercising stock options and the residual part of the capital increase reserve for employees is issue known as Bouygues Confiance n°11. Then of course, there was the dividend for EUR 687 million, that was a cash-out. EUR 87 million corresponded to the first installment on the 5G frequencies. And finally, the important part of the year was the additional EUR 1.275 billion arising from operations. And this is what I propose now to look at in greater detail on Page 33. Let's begin with net cash flow, which includes the redemption of, should I say, the repayment of lease obligations. This net cash flow was EUR 2.337 billion, down EUR 203 million when compared to 2019. This was due to the sharp downturn in activity and results over the period. Net Capex, not including 5G, was stable at EUR 1.6 billion. As I said earlier on, the group decided in 2020 to maintain its CapEx momentum in 2020 to accelerate growth of its businesses over the next few years. Changes in working capital requirements relating to operations improved substantially over the period, substantially, by that, I mean, by EUR 700 million. Now this performance is a good reflection of the ongoing efforts of the businesses to cash in trade receivables and reduce the level of inventory. So free cash flow after working capital requirements totaled EUR 1.2 billion, up sharply by comparison with 2019. Finally, the variation working capital requirements arising from amortizations and miscellaneous improved by EUR 195 million. This was mainly due to a number of postponements towards the end of the year at Bouygues Telecom. Overall, the variation in operations related working capital requirement was much higher than in 2019. A few words to finish. Let's finish with operating CapEx. That's Page 34. As mentioned, operating CapEx, that's not including 5G frequencies, are, broadly speaking, stable by comparison with 2019. However, this stability hides several factors: EUR 218 million decrease in construction. The construction business adjusted its CapEx to the level of activity during the pandemic. Secondly, this was due to a EUR 189 million increase at Bouygues Telecom, which substantially increased its gross CapEx by comparison with expectations. Furthermore, in 2020, Bouygues Telecom acquired 70 megahertz of 5G frequencies at a cost of EUR 608 million, as you can see. Overall, operating CapEx, net operating CapEx, totaled EUR 2.22 billion in 2020. Finally, that brings me to the end of my presentation of the financial accounts statements. I give you the floor back, Martin, for you to continue.

Thank you, Pascal. I'm now going to bring or conclude this presentation. Moving on to Page 36. In a difficult context, the context of the global pandemic known as COVID-19, the group proved to be agile, responsible and resilient. Our activities are positioned in essential necessities, housing, transportation, communication, information, entertainment and so on, with business models that have not been undermined by the pandemic. All our business segments proved their ability to rebound swiftly, thanks to the adaptive -- adaptation measures that they rolled out as early as April 2020. Now this performance would not have been possible without the unrelenting commitment of all our employees, the quality of social dialogue that we have had for years with our social partners and, of course, the great financial strength of the group. Finally, the group proved to be resolutely responsible to its stakeholders. In this document, we've mentioned certain decisions that we took in that respect. On the strength of its ability to adapt and its resilience, the group decided to maintain the capital allocation that we have shown on Page 37. First of all, the thing to do is to develop our existing activities. Beginning with energy and services, in 2020, we enforced our expertise in renewables and, in particular, in green hydrogen. At Colas, Colas provided itself with the logistical means required for its bitumen strategy, which consisted in securing supplies and in extending its distribution and trading businesses. At Bouygues Telecom, we have decided to accelerate our growth. As we told you, we've acquired EIT at the end of 2020 and launched our strategic plan called Ambition 2026. Finally, in media, TF1 has been developing Newen's international business and working on large platforms. Finally, we're very eager to maintain our strong investment-grade rating, with good control over our debt and secure cash flow. Our long-term rating was recently published by Standard & Poor's and Moody's. And as you can see, our ratings are very good, continue to be very good. Finally, we'd like to make a return to shareholders, and the Board of Directors has proposed at the next AGM to vote on the payout of a dividend of EUR 1.70 per share. Against this backdrop, in 2021, the group will invest in order to strengthen its business segments and boost their growth in the years to come while maintaining our dividend payout policy, as pointed out on Page 39. The outlook based on what we know to date, and barring any deterioration due to COVID-19, the outlook is as follows: In 2021, revenue and group's performance should be well above 2021, but not as high as in 2019. In 2022, the group's current operating profit should be back to a level similar to or slightly better than in 2019. Over and beyond the financial prospects, I'd like to say a few words to you about our corporate social responsibility road map. This is Page 39. Last year, we set ourselves 4 priorities. First of all, health and well-being in the workplace, gender balance, the climate and biodiversity. To preserve our employees' health and improve their well-being, Bouygues has reinforced its approach called quality of life in the workplace and is pursuing the development of social protection in all our companies in the group, in France and outside. The first thing is called Bouygues Care. The first issue here is insurance benefits in the event of the death of one of our employees. To encourage gender balance at all levels, in Bouygues, we'll be launching its gender balance plan, '21-2023, which will include a gender balance criteria and the variable compensation of the group's executive officers and senior executives. Finally, at the end of 2021, the group will map out the various stages and financial consequences of its climate strategy. It will also review the strategic conditions and financial conditions required to be carbon neutral by 2050. Finally, it will specify its commitments to biodiversity. That said, ladies and gentlemen, that brings us to the end of our presentation. But before moving on to questions and answers, let me remind you of our next 2 rendezvous on Page 40. On the 22nd of April, I will be chairing the combined Annual General Meeting. And the first quarter 2021 results will be published on the 20th of May. Our next 2 rendezvous. My colleagues and I are now at your disposal to take your questions.

All right. We have the first question from Nicolas Cote-Colisson from HSBC.

Regarding the construction business and the outlook for 2021, the COVID effect was kept under control at end 2020, and yet we don't expect business to be as good as in 2019. Can you give us reasons why and the reasons why your competitors might be more optimistic than you? Then on the telecom and BtoB, the regulator has imposed new restriction -- well, new regulations on high-quality service. What are you waiting to get into? Or are you waiting for new developments to get into the professional, that is the BtoB business? And then on Page 37, you have your strategy -- capital allocation strategy on the long term, and you have the very low level of debt and cash generation that should remain high. This should offer opportunities for new diversifications, and the fact that you have new demographics and new sort of new health requirements. What are your long-term expectations?

All right. Number one, on the construction business and our own expectations regarding sales in 2021. For Bouygues Construction and Colas, we're looking at an improvement in revenue of about 3% to 4%. On Bouygues Immobilier, we are looking at something more significant, about 10%. The reason is that you had the lockdown effect on -- well, Colas and Bouygues Construction was a period when you could not bill our customers because sites had halted. But for Bouygues Immobilier, you had a double penalty. You had the same, no new acquisitions. And then during the first lockdown, you could not sell anything, so you couldn't get advances on new sites, which is why now Bouygues Immobilier is bouncing back in a more dramatic way. Now BtoB, Richard.

Yes. On the BtoB end of the business, there is a new piece of regulation, which improves quality of service for Orange. And these are, of course, positive developments. And we are determined to enter the BtoB business with the infrastructure project in the Saint Malo project, and that will make us even more relevant on the BtoB market.

On question number three, we have always -- well, we've always tried to be as conservative and as cautious, financially cautious as possible. It is true, the debt level is quite low. For the time being, our intention is to pursue existing activities and that may well require additional capital expenditure for external growth purposes. And so that's -- we allow for that. But other than that, we don't have any strategic ambition to embark on a new business altogether. Having said that, we are always keen to consider the future and look at possible scenarios, not just for France, but for the world at large, how are we going to pull out of the COVID crisis, and in particular, we are expecting, well, a significant increase in public debt. What difference will this make to the world economy? We have to allow to consider a number of possible scenarios so as to position the group in the best possible way for the future.

Next question from Eric Lemarié from Bryan Garnier.

Yes. I have, in fact, 3 questions, if I may. Number one, on the construction business, I understood that Colas, in its press release, announced that they were looking at current operating profit in 2021 to be close to that of 2019. What -- I mean, Bouygues Construction and Bouygues Immobilier you're expecting profit margin -- operating margin to bounce back? On Bouygues Energies & Service, BYES, you didn't get into the detail of that. But can you tell us what was BYES' performance of sales and operating profit? And then Alpiq, why is it that you received a compensation? Is it that Alpiq's performance? Was it under expectations?

On current operating profit, you have Frederic's statement regarding Colas. But you have to recognize is that in, well, in H1, of course, business was less than expected. So we are look -- we're waiting. It won't be until 2022 that we expect profit to be in line with 2019. For Bouygues Immobilier as early as Q3, we're expecting operating profit to be, well, in 2021, pretty much in line with what we had in 2019. That was Bouygues Construction. For Bouygues Immobilier, we are looking at an improved operating profit, but less in 2021 than what we had in 2019.

For BYES, or maybe BYES, current operating profit for the year is margin is 1% for the year and 3.2% for H2. Regarding the dispute with Alpiq, well, we closed on the basis on the provisional closing with Alpiq. When we arrived at the final reckoning with Alpiq, we came to a disagreement as to how they had arrived at the provisional numbers. We -- there was a dispute. And this was -- this was solved at the end of the year to our advantage with the EUR 36 million compensation.

The next question comes from the Josep Pujal from Kepler.

I have, in fact, 3 questions. Number one, on cost inflation. When you see that some products used by the construction business, steel, copper, raw materials are going up, do you expect this to have an impact on profit margin in 2021? Or do you -- have you organized some sort of hedging to protect from that? It would be good to know the percentage of your orders that have clauses that protect you from increases in the prices of raw materials. Regarding the expectations for 2021, you said that in 2020, local authorities paid their bills at the end of last year. And hence, you had less of a receivable -- well, a problem with collecting receivables. But for 2021, do you believe that -- what is the outlook for WCR? Do you think that the situation will turn around and that what you earned in 2020 might disappear in 2021? That was question number two. And question number three, a follow-up on the Alpiq issue. This EUR 36 million in compensation, is that the final award? Is that -- or are there still disputes with Alpiq? And could that number be revised upwards?

So on the cost of raw materials, yes, we have clauses that protect us from price increases, and we are indeed looking at increases in the price of raw materials, and that is why we have such protection clauses in our contracts. On that point, there are 2 ways of doing this. We have indexation formulas, but also when we purchase raw materials, we usually have the contract with a firm price, even if the -- if the market prices go up. The second question about the free cash flow in 2021. You may remember that in the previous financial announcements in 2020, we told you that we were concerned that there might be an unfavorable development of working capital requirement. We announced that in April. It didn't happen. We expressed our concerns again in June, and still the problem did not materialize. So as you said, some clients play ball and they paid their bills on time. Well, no one paid ahead of time, and I'm not saying that local authorities really helped. But say they didn't make things any worse than they could have been. But it's very difficult to have a reliable model of WCR in the construction business. What we do is, in as much as possible, we try and cash in on our receivables, but we don't take more than we need or than what is due. And we also help our customers manage their inventories, and that is how we improve WCR. As to what we expect in 2021, this is a dynamic exercise. I mean we want our people to work hard to collect the money that is owed us. Now the outcome for 2021, it's a bit premature to tell now, but we'll see. And the final point, for Alpiq, it's both good and bad news. There's the final -- the settlement is final. So we won't be getting anything more than what we have already received.

This is Frederic Boulan from Bank of America.

I have 3 questions. First of all, concerning telecoms and your targets for 2021. 5% EBITDA growth, including EIT, that's about a EUR 60 million contribution from EIT. EBITDA will be organically stable despite the 5% growth from services revenue. Maybe you could explain what's happening here. Secondly, concerning 2022. You have some [ EUR 630 million ] additional from telcos, which is maybe encouraging in terms of the pickup of your profitability and indeed the pickup of construction, in particularly Colas. So I'm a little surprised by this message of stability or thereabouts. I seem to be missing something there, if you could help me there. Third question concerning the group's debt. A year ago, you proposed an exceptional dividend of EUR 0.90 subsequent to the Alstom transaction. Now the debt and cash flow are extremely well-managed and in a very good place at the end of 2020. So what are the prospects? Do you prefer to remain cautious given the uncertainties of the pandemic? Or is there any chance of a medium-term return to shareholders in the medium term?

Let's begin with telecom's question. Richard?

Concerning EBITDA growth in 2021, you have to bear in mind what we told you at our Capital Market Day. We've decided to accelerate growth. And this comes at a cost, particularly in 2021 in fixed lines, which will have a slight impact on our 2021 EBITDA. In addition to that, one peculiarity regarding 2021, that is that last year, first -- in the first quarter, we had roaming, which constituted significant revenue. But in our anticipation, we won't have that income in 2021, unless you know otherwise. But barring that, that is a variance or a negative variance by comparison with what you're familiar with.

Your second question, well, to answer your question, just cautious -- we tend to be traditionally cautious. And once again, very conservative, what we have told you about 2022 is a conservative estimate regarding stability.