Good day, ladies and gentlemen, and welcome to the Bouygues conference call. For your information, this conference is being recorded. Please be aware that your lines are in listen-only mode. However, at the end of the presentation, the lines will be open for questions. We'll then provide instructions on procedure to follow if you would like to ask a question. If you have any difficulty hearing the conference, please press the star zero on your telephone keypad for operator assistance. I'd like to turn the call over to Mr. Pascal Grangé, Deputy CEO and CFO of Bouygues. Please go ahead, sir.
Good morning, everyone, and thank you for joining us to discuss Bouygues' first quarter. Sorry. Is it okay?
Yes, please go ahead, sir.
Okay. With me today are Christian Lecoq, CFO of Bouygues Telecom, and Armelle Gary, Head of Investor Relations. Following our presentation, we will be answering your questions. Let's start with our key messages on slide 4. First, let me remind you that like every year, notably due to the seasonality of our activities, especially at Colas level, Q1 earnings are not indicative of half-year and full-year results. That said, group sales were up 46% in the first quarter of 2023 compared to the first quarter of 2022. This increase was mainly driven by the contribution of Equans, which was acquired in October 2022, also reflects a solid performance from our business segments as well as inflation. Like for like on a constant exchange rate, group sales increased by 4%.
The group COPA in the first quarter of 2023 increased by EUR 75 million compared to the first quarter of 2022 and reached EUR 9 million. As such, the margin from activities was a positive 0.1%, an improvement versus first quarter of 2022. Net loss attributable to the group was minus EUR 134 million, a level comparable to Q1 2022. I will provide you more details about it later during this call. Last, net debt was EUR 8.8 billion compared to EUR 7.4 billion at end 2022, a usual increase due to the seasonality of activities. Let's now turn to the review of operations on slide 7. Let's begin with the backlog in the construction businesses.
As a reminder, from January 2023, Bouygues Energies & Services backlog is no longer included in the construction businesses backlog, as it is now included in the Equans backlog. To facilitate comparison and analysis, we have highlighted in gray color the impact of Bouygues Energies & Services backlog in the previous years. The backlog at end March 2023 was at the high level of EUR 29.4 billion, up 6% year-on-year, excluding Bouygues Energies & Services backlog from end March 2022 figures. The increase in the backlog was driven by both Bouygues Construction and Colas. Looking at backlog of for each business segment on slide 8, Bouygues Construction's backlog, excluding Bouygues Energies & Services, increased by 8% to EUR 15 billion, offering good visibility on future activity.
Order intake was up 57% in France and 127% outside of France. This momentum was driven by both the normal course of business on large contracts, of which around EUR 350 million for the Toulouse Metro, around EUR 770 million for the Abidjan Metro in Ivory Coast, one hospital in U.K. for around EUR 330 million, and one hospital in Morocco for around EUR 130 million. At Bouygues Immobilier, the general market conditions remain challenging. Due to inflation, rising interest rates, and difficulty to obtain loans, we continue to see a global wait-and-see mode from both residential and commercial property customers. To adapt to the general context, we postponed the launch of some contracts which waited on supply and reservations.
As a result, Bouygues Immobilier's backlog was down 20% year-on-year. Just a few words to say that we recently got positive news on the Vivaldi commercial project near Paris related to the withdrawal of appeals. This project should contribute to revenues in the coming years. We will provide more details in the coming months once the project is fully launched. Colas backlog was up 8%. The order intake increased by 17%. Colas achieved a good commercial performance in rail activities, notably with a significant order for the Abidjan Metro in Ivory Coast. Colas Roads continued its positive momentum with good commercial performances in North America and in France. These performances were partially offset by Europe, Middle East, Africa. Let's now look at the construction activities key figures on slide 9.
The construction business recorded figures which, like every year, due to seasonality, are not indicative of the first half and the full year results. Again, to facilitate comparison and analysis, we have excluded Bouygues Energies & Services from the first quarter 2022 figures. Sales were up 5% year-on-year and also 5% like-for-like on that constant exchange rate. First, Bouygues Construction sales were up 6%, driven by international building and to a lesser extent, by civil works. Second, at Bouygues Immobilier, sales including share of co-promotions were down 15% impacted by the wait-and-see mode of both residential and commercial property customers, as mentioned earlier. Third, at Colas, sales were up 9%, of which international sales up 14%. Revenue benefited partially from inflation, which accelerated since March 2022. Therefore, first quarter 2022 results were not fully reflecting the new pricing environment.
Current operating loss from activities of the construction businesses of minus EUR 243 million was very similar to Q1 2022. First, COPA at Bouygues Construction was stable compared to Q1 2022. Second, COPA at Bouygues Immobilier, including share of co-promotions, stood at EUR 7 million. Third, in Q1 2023, as usual, Colas had a non-representative minus EUR 301 million EUR 10 million below, euros below Q1 2022. The effects of the action plans implemented during 2022 to cope with inflation continued to bear fruit. However, the effects were mitigated by the sale of the underperforming subsidiary, Branscome, in the United States as part of Colas rationalization of activities. Let's now turn to the review of operations from Equans on slide 11.
As a reminder, starting from January 2023, Equans figures include those of Bouygues Energies & Services. The figures reported for the first quarter of 2022 include only those of Bouygues Energies & Services as Equans Q1 2022 pro forma figures are not available. Therefore, Q1 2023 constitutes the first quarter combining the two entities. The integration is on track with new organization in place in the main countries and the Perform plan launched in most business units. Equans commercial activity was solid. The backlog stood at EUR 26.7 billion, up 3% compared to end December 2022 figures, including Bouygues Energies & Services backlog for EUR 6.5 billion. This backlog offers a good visibility on the future activities.
To be noticed that the Equans backlog, excluding Bouygues Energies & Services at end December 2022, was adjusted from EUR 18.7 billion to EUR 19.5 billion following the standardization of the calculation methods for multi-year contracts in Belgium. Equans backlog, including Bouygues Energies & Services at end 2022, stood at EUR 25.9 billion. One last important comment on Equans commercial activity, the underlying margin of the order intake improved, highlighting the first positive impacts of the Perform plan. Equans contribution to the group revenue on COPA represented respectively EUR 4.4 billion and EUR 98 million, with a 2.2% COPA margin, due notably to seasonality. Don't forget that the Bouygues Energies & Services integration in Equans occurred very recently in January 2023, and that a new Perform plan has just been launched.
This performance is therefore in line with our expectations. To end with Equans on slide 12, let me just add that 2023 guidance are confirmed, with Equans aiming for a slight increase in sales as a result of its selective approach strategy. A COPA margin between 2.5% and 3% on a cash conversion rate before working capital requirement of between 80% and 100%. Turning to slide 14, let's talk briefly about TF1's results, which were released on the 27th of April. TF1 demonstrated its ability to adapt to the general environment by controlling costs while maintaining good audiences within its main targets. In the 1st quarter 2023, as anticipated, sales were down. They decreased by 14% with media sales down 14% and Studio TF1 sales down 20%.
Regarding media sales, as already explained by TF1, half of the decrease was due to a scope effect linked to the deconsolidation of Unify in fourth quarter 2022. Advertising revenue was down 10% and down 7% on a like-for-like basis, reflecting unusual macro uncertainties and sector-specific tensions, for instance, in retail, food or finance. Newen Studios posted revenues down 20% due to a high basis of comparison with one main program which had been delivered in first quarter 2022. Costs of program were EUR 201 million versus EUR 220 million in first quarter 2022, largely mitigating the decrease in advertising revenue. Studio TF1 low level of activity and IT expenses related to the digital acceleration plan impacted COPA and COPA margin.
Turning to slide 15, I will end on TF1 by saying that within a market offering a low visibility, the TF1 Group will maintain in the media operating segment its agility in programming costs while offering a differentiating and event-driven lineup. After delivering numerous projects in 2022, Newen Studios will draw on the diversity of its talent pool to develop new growth-driving projects for the years ahead. 2023 outlook is confirmed. The TF1 Group will segment its leadership position and maintain a broadly stable current operating margin of activities. It will continue to generate cash flow in order to aim for a growing or at least stable dividend policy over the next few years. I now turn the call to Christian Lecoq for Bouygues Telecom performance.
Thank you, Pascal. Good morning to everyone. Turning to slide 17, let's begin with the commercial performance in mobile and fixed. At end March 2023, Bouygues Telecom had 15.2 million mobile plan customers excluding M2M, thanks to 27,000 new customers in Q1. As you can see on the right side of the slide, we had 4.7 million fixed customers at end March 2023. FTTH continued to experience strong growth with 148,000 new customers joining us during the first quarter. With a total of 3.1 million subscribers, FTTH customers represented 67% of fixed customer base, up from 55% one year ago. With 31 million FTTH premises marketed, we are ahead of our schedule to reach our target of 35 million premises by 2026. Let's have a look at the key figures on slide 18.
First, we achieved 6% growth in sales billed to customers. Mobile ABPU was up EUR 0.2 year-on-year at EUR 19.7, and fixed ABPU was up EUR 1.7 year-on-year at EUR 30.3. As for the mass market, roaming has returned to its pre-COVID level. We no longer restate our mobile ABPU for roaming impact. This performance was still partially offset by the continued decrease in incoming sales, leading to 4% increase in sales from services. Other sales were up 20%, notably led by build-to-suit revenues. EBITDA after Leases increased by EUR 45 million compared to Q1 2022, and reached EUR 399 million. The margin increased compared to last year, which is consistent with our goal to progressively deliver margin expansions.
Don't forget that the reclassification to intangible assets of fixed annual fees for some frequencies that we made in Q4 2022 has a positive impact on Q1 EBITDA after Leases. Positive impact on EBITDA after Leases will last until Q3 and will be offset in Q4 as the reclassification was made in Q4 2022. The current operating profit from activities of EUR 126 million was EUR 32 million higher than in Q1 2022. You can notice that gross CapEx was EUR 522 million in Q1 2023, a slightly higher level than in Q1 2022, mainly related to continued investment in our networks. On slide 19, let me highlight some recent developments undertaken by Bouygues Telecom Entreprises in cybersecurity, industrial 5G, and collaborative tools.
First, the acquisition of [Aleo], a specialist in integration, unified communication services, and cybersecurity. Second, a new partnership signed with Alten and Siemens France to help the promotion and the deployment of industrial 5G solutions. The last development of this non-exhaustive list is the launch of the new platform, B.flex with Webex, developed in cooperation with Cisco and dedicated to small and medium-sized companies. This application offers fixed and mobile telephony solutions and collaborative features with a high level of data protection and privacy. Moving to slide 20, we are on the way to achieve all our 2023 targets that are an increase in sales billed to customers, an EBITDA after Leases of around EUR 1.9 billion, and a gross CapEx of around EUR 1.5 billion excluding frequencies. Now, Pascal, I'm giving you back the floor.
Thank you, Christian. I will now briefly comment on the financial statements on slide 22. We have already discussed first quarter sales and current operating profits from activities at the beginning of this call. Few comments this morning. First, other operating income and expenses were negative at EUR 24 million in the first quarter. This amount notably includes non-current charges at Bouygues Construction in relation with the litigation judgment in Singapore. This dispute, as explained in our 2022 URD, is associated with a building delivered in 1997, for which Bouygues Construction Singapore has recently been sentenced. Bouygues Construction could appeal. Second, financial results stood at minus EUR 98 million compared to minus EUR 47 million in Q1 2022.
This increase is mainly due to the cost of financial debt that reached EUR 69 million compared to EUR 35 million in Q1 2022, mostly due to Equans acquisition financing costs. Third, a tax charge was recorded for EUR 3 million compared to a tax income of EUR 27 million in Q1 2022, consistent with the results of each period. Fourth, contribution of associates increased from -EUR 3 million to EUR 15 million, notably thanks to Tipco Asphalt, a Colas subsidiary based in Thailand, and the fact that Salto, a video platform launched by TF1 with two other partners and now stops, is no longer reporting losses this year. As such, net loss attributable to the group was -EUR 134 million, very similar to Q1 2022.
I will now turn our attention to the group financial structure. Moving to slide 23, net debt was EUR 88 billion at the end of March 2023. Compared to end December 2022, net debt was up EUR 1.3 billion. As every year, this change is related to usual seasonal impacts. As such, net gearing was 64%. I remind you that the group benefits from a particularly strong financial position and that our financial credit ratings remain strong. Let's now turn to slide 24 to describe the net debt evolution between end December 2022 and end March 2023. Net debt increased by EUR 1.3 billion since the end of last year. This change is mostly explained by the following items. First, acquisitions net of disposals totaling EUR 38 million. There is nothing specific to highlight this quarter.
This amount notably includes acquisition and disposals at Equans and Colas. co-capital transactions and other for EUR 80 million, including Bouygues share buyback. Last, EUR 1.3 billion from operations that I will comment in the next slide. Turning to the breakdown of operations for the first quarter of 2023 on slide 25, you can observe that net cash flow, including lease expenses, increased by EUR 50 million. Net CapEx was up EUR 45 million similar to Q1 2022.
Third, you can see on the chart that the change in working capital requirement related to operating activities and other stood at minus EUR 943 million, a usual change for a Q1 due to the seasonality of our activity, but to be noticed, a lower amount this quarter compared to last year. As we do every year, we will remain proactive during all 2023 to manage the working capital. I will now conclude this presentation on slide 27. We are confirming the group outlook for 2023. We expect sales close to those of 2022, as well as an increase in current operating profit from activities. I remind you that this outlook is obviously based on 2022 pro forma in financial information that assumes the Equans acquisition was completed on first of January 2022. Thank you for your attention.
Operator, please open the floor for questions.
Thank you very much, Mr. Grangé. Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. Please ensure your mute function is not activated until you're set to reach equipment. Once again, please press star one. Our first question is coming from Nicolas Cote-Colisson calling from HSBC. Please go ahead, sir.
Hi. Thank you. First question is on Equans, because your guidance includes an improvement in working cap in 2023. Q1 is negative, maybe you can help us with the phasing and the seasonality of the business for the coming quarters. Maybe still on Equans, if you can give us an indication of the margin you are achieving on order index, please. Maybe a short one on Telecoms. You just mentioned the 200 basis point increase in EBITDA margin was benefiting from the impact of reclassification of frequencies. Is it the same amount as in the previous quarter, which was, I think, EUR 23 million? Thank you.
Starting with the Equans question on the working capital seasonality at this level. Probably you have seen in the past that we had this seasonality effect for the working capital requirement for Bouygues Energies & Services. We have the same profile for Equans as a whole. You can see that also with our competitors' figures, not at the quarter because they don't have any publication of their quarterly figures. You can see that at the half year for our competitors. Concerning margins, for new contracts, we don't publish these figures. What we can say, and that's what we have said during the call, the trend is good, and that we see an improvement in order in take margins.
Regarding Telecom, hi Nicolas. The impact of EUR 23 million in Q4 2022 was for the full year. The impact in Q1 2023 is a bit more than EUR 5 million positive impact compared to Q1 2022. It will be the same in Q2, in Q3, and in Q4, you will have a negative impact compared to Q4 2022 of around EUR 17 million.
Okay, that's clear. Thank you.
On full year, this is no totally neutral.
Okay.
Thank you much, sir. Our next question is coming from Mathieu Robilliard, calling from Barclays. Please go ahead.
Yes, good morning. Thank you for the presentation. I had a question on Colas first. You posted a strong revenue growth. You do flag that part of it is due to inflation. Could you maybe give us a bit of breakdown in terms of what has been the volume trend and what is the impact on inflation? Following up on inflation, at Colas and more, looking at the margin, I realize this is a special quarter, but more generically, are you finding it now easy to catch up with on the cost increases that you've had throughout the last 12 to 18 months? Second, on telecoms, could you qualify how you see the competitive environment? Obviously, we've seen a lot of price increases on the back book and the front book.
More recently, there's been a bit more tension on the promotional side. I was wondering if you were worried about some of the declines there. Lastly, on telecoms, very strong margin, and you explained the impact of the frequency was quite low in this quarter. Could you flag where are the savings coming from? Thank you.
Starting with your Colas question, the first was related to what is volume, what is inflation. We can say that probably we have an important inflation, but also increasing volume in the U.S. and in North America. Probably we are quite stable in France and in Europe in terms of volume. How do we deal with inflation now? Let's say that it was quite a surprise to have such an inflation 18 months ago. We had to adapt our contracts and the way we were working at that time. Now we have done these adaptations, so we there is still some risk related to inflation, but in a lesser extent.
For group Telecom, in the mobile market, we continue to observe a trend of increasing ties and less aggressive promotional offers. Of course, you can have some flash sales that are launched during a short period of time. That do not put into question our value strategy on our customer base. For example, yesterday afternoon, we increased the price of our 100 gigabyte offer from EUR 14 to EUR 16. Plus EUR 2 per month for the subscriber who is taking this kind of offer. In the fixed business, data are also growing, as you can see in our ABPU trend. It is of course linked to the FTTH movement of customers from DSL to FTTH. This is good for us.
Regarding margin, well, we are saving some costs mainly on fixed part of our costs like G&A and things like that. The first point, the second point, we are improving our efficiency regarding FTTH installation, FTTH acquisition, and so on. We are better and better on this part of the business.
Thank you very much.
Thank you, sir. Our next question is coming from Mollie Witcombe, calling from Citi. Please go ahead, ma'am.
Hi. Thank you for taking my questions. I have two. Firstly, I noticed that you've repaid about EUR 600 million of the syndicated loan. I'm just wondering, can we conclude that that will be your strategy, repayment will be your strategy, or whether you'll be looking to refinance in the next coming years? Secondly, you said originally that there would be around EUR 60 million in implementation costs for Equans. I know there was some in Q4, and I imagine there's some this quarter as well. Just wondering if you could talk a little bit about phasing on that. Actually, sorry, just a third one.
Just wondering if we can come back quickly to inflation in the construction businesses, and you said it's stable in Europe, in terms of volume. Is this the same across the other businesses in terms of, particularly in terms of backlog, specifically at Equans? Thank you.
Starting with the question related to the financing. You know that our strategy is to raise the long-term financing, generally speaking, with bond issues, regularly. We still have this idea. You know that we have raised last year, an important amount in order to refinance an important part of Equans. We would continue, so nothing new in that respect. Just to remind you that we have covered the interest rate for an important amount, so the average cost of our financing is quite attractive in the current market. Second question is related to?
Implementation costs
Implementation costs at Equans. We are the very beginning. I remind you that we have sold Bouygues Energies & Services shares to Equans beginning of January this year. We are at the early beginning of this cost, but no news which is a source of concern for us. Actually, we are quite on track. Nothing very specific to mention at this stage. The third question is inflation. You know, inflation is never good news for us because we, for our customers, it's an important issue.
We have a strategy which is quite clear in terms of inflation. We have two mechanism available in order to cope with inflation. The first is to transfer part of the risk to our customers by increasing prices with indexation formulas, with cost industry contracts, and so on. We have a second strategy which is to transfer part of this risk to our supply chain and customer, subcontractors or suppliers. In addition to that, we have in all our construction contracts contingencies which are here in order to cover the remaining part of this risk.
I remind you that, generally speaking, an important cost of energy is a good news for Equans because we are decarbonization and price of energy allows our clients to, our customers to decide on some investment in order to reduce their energy consumption or to decarbonize it.
Okay. Thank you.
Thank you much, ma'am. Our next question is coming from Samuel McHugh of BNP Paribas. Please go ahead.
Good morning, everyone. Thanks for the questions. Just two on telcos, please. The first one just on the other revenue. You called out the strong build-to-suit sales. Could you try and quantify the impact on EBITDA year-over-year from these sales, just to help us kinda bridge the gap on whether you expect more of these sales through the year? Secondly, on the mobile side, I see you have, like you said, changed the pricing back to 16, and you added just 27,000 mobile customers this quarter. I guess conceptually, is it important that you guys post positive KPIs in mobile post-paid? Or do you see any kind of more strategic rationale to maybe focus a bit more on value and focus less on the KPI itself, so, you know, is positive KPI is a really big important indicator for you? Thank you.
About your first question, on other revenues, there is no impact on EBITDA. The increase in other revenue is mainly linked to the Saint-Malo project. The project we have with Cellnex, on a JV called Nexl oop, to build backhauling fiber network in France. There is no margin on this project. No impact linked to the other revenue growth. Regarding mobile, our performance at +27,000 subscribers is quite good compared to the market.
I think that ARCEP published a few days ago the figures, and you can probably saw that the growth of the market is very, very low in Q1 2023, and it was already the case in Q4 2022. This is a result of the fact that everybody is mainly focused on value and not on volume. It is also the case for Bouygues Telecom.
That was very clear. Thank you very much.
Thank you very much, Mr. McHugh. Ladies and gentlemen, if you have any questions, please press star one at this time. As we do not appear to have any further questions at this time, let's turn the call back over to Mr. Grangé for any additional or closing remarks. Thank you.
Thank you for joining us today. We will be announcing half year 2023 results on 28th of July, 2023. Should you have any question, please contact our Investor Relations team. Their contact information is on the press release on our website. Thank you.
Thank you very much, sir. Ladies and gentlemen, this will conclude today's presentation. Thank you for your attendance. You may disconnect.