Bouygues Offshore Income from Operations up 6%.Business Editors MONTIGNY-LE-BRETONNEUX, France--(BUSINESS WIRE)--March 6, 2001 2000 Income excluding Non-Recurring Tax: EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 47.2 Million ( US$43.9 Million(1) ) The Board of Directors of Bouygues Offshore S.A. (NYSE NYSE See: New York Stock Exchange :BWG BWG Bankwesengesetz (Federal Law on Banking, Austria) BWG Beam Waveguide (antenna) BWG Bundesamt für Wasser und Geologie (Federal Office for Water and Geology, Switzerland) ) (BOURSE bourse (b  rs), term applied to a European stock exchange. The first international bourse was established in Antwerp in the 16th cent. :BOS.) reported financial results for the year ended December 31,
2000.
As previously reported, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight 1 increased 8% to EUR 1,065.1 million (US$ 991.1 million) from EUR 983.7 million in 1999. Gross margin was 16% of net sales, up sharply over the prior year despite under-utilization of our yards and barges. The increase was driven by good performances in our onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. oil and gas contracting business. Research and Development costs increased 16% to EUR 6.6 million. We are focusing our R&D on the deep offshore and liquefied gases sectors. As a result of significantly higher bidding costs related to projects expected to be awarded in 2001, selling expenses rose to EUR 44.7 million from EUR 25.2 million in 1999. Administrative expenses accounted for 6.2% of net sales, as in previous years, and totaled EUR 66.4 million. Income from operations increased 6% to EUR 51.5 million (US$ 47.9 million), including goodwill amortization of EUR 1.3 million arising from the Sofresid acquisition. Financial expense of EUR 0.1 million primarily consisted of interest income of EUR 5.8 million (versus EUR 7.1 million in 1999) and EUR 6.5 million for currency hedging on projects (compared with EUR 1.8 million in 1999). The income was EUR 47.2 million after recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. income tax of EUR 6.4 million, non-recurring income of EUR 0.2 million and minority interests were taken into account. An excellent performance by our onshore oil and gas contracting business in 2000 allowed the Group to fully amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. the deferred tax asset recorded as part of the purchase accounting subsequent to the acquisition of Sofresid. The corresponding non-recurring tax liability did not impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. cash flow. Net income was EUR 38.8 million (US$ 36.1 million) including exceptional corporate income taxes. Net income per share was EUR 2.29. Breakdown by Segment
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In millions of euros(1) 1999 2000
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Net Sales
Oil & Gas Contracting 728.9 791.5
of which Offshore - 309.5
Onshore - 482.0
Maintenance Services 124.6 131.1
Maritime & River Works 71.8 61.5
Liquefied Gases 8.5 13.2
Chemicals, Refining, Energy and
Industries 49.9 (2) 67.8
Income from operations
Oil & Gas Contracting 46.3 47.3
of which Offshore - (6.5)
Onshore - 53.8
Maintenance Services 2.7 5.4
Maritime & River Works (0.5) 4.0
Liquefied Gases 0.2 (1.0)
Chemicals, Refining, Energy and
Industries (0.2) (4.2)
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1 1 euro = 6.55957 French francs.
2 Second-half 1999
Offshore-Onshore Oil & Gas Contracting net sales increase reflected the contribution of the onshore business. The gas treatment contracts in Nigeria and Algeria and the pipe laying contracts in Russia are in the commissioning phase. The profitabilities of current contracts has not been offset by lower levels of yard utilization in 2000. Measures have been taken in order to reduce the yards stand by costs. Moreover the contracts signed in the shallow water See:
Net sales of the Maintenance Services segment rose 5%. Greater selectivity selectivity /se·lec·tiv·i·ty/ (se-lek-tiv´i-te) in pharmacology, the degree to which a dose of a drug produces the desired effect in relation to adverse effects. selectivity 1. with regard to contracts combined with a rebounding market in France to significantly increase income from operations, although the 100% growth can be partially attributed to recovery of a provision for an old contract. Net sales in the Maritime INTEREST, MARITIME. By maritime interest is understood the profit of money lent on bottomry or respondentia, which is allowed to be greater than simple interest because the capital of the lender is put in jeopardy. & River Works reached EUR 61.5 million with the completion of Beirut Sea Front project and the progress of Monaco's La Condamine
La Condamine is the second oldest district in Monaco, after Monaco-Ville. harbour and the container port in Pointe pointe n. In ballet, dancing that is performed on the tips of the toes. [From French pointe (des pieds), point (of the feet), tiptoe; see point.] des Grives, Martinique projects. The segment's 2000 operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was in line with the best of the past five years. The Liquefied Gases business net sales remained low at EUR 13.2 million. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of EUR 1.0 million stems from intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: marketing activities, which led to the award of the contract for the Bilbao LNG LNG (liquefied natural gas): see under natural gas. terminal in late 2000. The Chemicals, Refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , Energy and Industries segment performed poorly due to the downward market trend in the second half of the year and problems completing two contracts in the first half. Geographic Breakdown ---------------------------------------------------------------------- % of Net Sales 1999 2000 ---------------------------------------------------------------------- France 15.0 21.2 Europe (excluding France) 28.6 41.5 Africa (south of the Sahara) 50.8 34.0 North Africa and Middle East 0.5 2.0 North and South America 3.0 0.4 Asia/Pacific 2.1 0.9 ---------------------------------------------------------------------- Geographically, Europe outside France has become Bouygues Offshore's main area of activity thanks to our expanding business in Russia. Sub-Saharan Africa is still an important region, despite the postponement of some major projects. Through Sofresid in Algeria, we also operate in North Africa. Our business in France includes recurring maintenance activities and maritime works, as well as engineering activities performed by Sofresid, mainly in the refining and energy sectors. Our business in the Asia/Pacific region and North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. is developing as opportunities arise. Capital Expenditures Consolidated capital expenditures amounted to EUR 49.7 million, down from EUR 96.4 million in 1999. These expenditures consisted of maintenance related investments and a third installment of EUR 29.4 million for the Saibos FDS FDS Fim-De-Semana (Portugese: weekend) FDS Federated Department Stores, Inc. FDS Fiche de Données de Sécurité (Material Safety Data Sheets) FDS Famicom Disk System FDS Faculty of Dental Surgery (R) dynamic positioning Dynamic positioning (DP) is a system to automatically maintain a ship’s position and heading by using her own propellers and thrusters. This allows operations at sea where mooring or anchoring is not feasible due to deep water, congestion on the sea bottom (pipelines, vessel. Balance Sheet Highlights Bouygues Offshore enjoys a sound financial structure. Cash and cash equivalents at year-end were EUR 200.2 million, down from EUR 231.9 million as a result of the anticipated decline in cash advances on contracts. 2001 Outlook Herve LE BOUC, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. commented: "Despite the widespread decline in upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger offshore oil and gas spending in 2000, we succeeded in winning orders totaling EUR 1,160.5 million and increasing our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. 11% to a record EUR 998.7 million (US$ 929.3 million). The exploration and production industry is expected to recover in 2001, stimulated by the high oil prices of the past few months and the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of work on upstream oil and gas projects. We are confident that we will be able to leverage these more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. conditions through our engineering skills, our presence in more than 20 countries and our ability to deliver innovative turnkey See turnkey system. solutions to record further growth in 2001." Dividend The Board of Directors proposes a dividend for approval by shareholders of EUR 1.10 per share ( EUR 0.55 per ADS), with a record and payment date of May 31, 2000. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties, notably in the section outlook above. Although the Company believes that backlog is a reasonably reliable indicator of future net sales, postponements or cancellations of previously awarded contracts or delays in the completion of ongoing projects could negatively impact net sales. In addition to the impact of backlog, among the other factors that could cause the Company's actual net sales to differ materially from those estimated are the following: fluctuations in the level of oil and gas industry spending; the Company's ability to obtain additional contracts in 2001 and commercial prospects not translating into firm orders or sales; risks involved in doing business abroad (such as civil disturbances Group acts of violence and disorder prejudicial to public law and order. See also domestic emergencies. , adverse government actions and economic and governmental instability); risks of loss of its two largest barges; and fluctuations in exchange rates (primarily the US dollar versus the Euro) and risks involved in the execution of contracts. From design engineering to startup and maintenance, Bouygues Offshore provides its customers with turnkey projects in onshore and offshore oil and gas contracting, liquefied gases, maritime and river works and chemicals-refining/energy-industry. Further information on the company can be found on line at www.bouygues-offshore.com. Driven by a strong commitment to the energy industry, an on-the-spot presence and a team of talented professionals, we deliver solutions that are safe, innovative and promote the success of our clients and our Company. 1 Based on an exchange rate of Euro 1 = US$0.9305, which was the European Central Bank European Central Bank (ECB) Bank created to monitor the monetary policy of the countries that have converted to the Euro from their local currencies. The original 11 countries are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, reference rate on December 31, 2000. 2 Includes EUR 66.2 million in 2000 and EUR 61.1 million in 1999 that represent operating costs operating costs npl → gastos mpl operacionales billed directly to single project joint ventures or reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. expenses billed to customers, neither of which generate operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. .
Summarized French GAAP Consolidated Financial Statements
Consolidated Income Statement (in millions)
----------------------------------------------------------------------
2000 2000 1999
$ (2) Euros(1) Euros(1)
----------------------------------------------------------------------
Net sales 991.1 1,065.1 983.7
Cost of sales (833.6) (895.9) (849.2)
Gross margin 157.5 169.2 134.5
Research and
development costs (6.1) (6.6) (5.7)
Selling expenses (41.6) (44.7) (25.2)
Administrative
expenses (61.9) (66.4) (55.1)
Income from
operations 47.9 51.5 48.3
Financial income
(expense) (0.1) (0.1) 9.4
Non-recurring
income 0.2 0.2 1.5
Recurring corporate
income tax (5.9) (6.4) (8.4)
Share in net income
of equity
affiliates 2.0 2.2 1.2
Minority interests (0.2) (0.2) (0.1)
Group share in
income 43.9 47.2 52.1
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Non-recurring
corporate income
tax (7.8) (8.4) -
----------------------------------------------------------------------
Net income 36.1 38.8 52.1
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Net income per
share (in monetary
units) (2) 2.1 2.29 3.08
Net income per ADR 1.05 1.15 1.54
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(2) Based on the weighted average number of shares outstanding in
the period (16,953,103 shares in 1999 and 16,927,365 in 2000).
Consolidated Balance Sheet (in millions)
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Assets 2000 2000 1999
$(2) Euros(1) Euros(1)
----------------------------------------------------------------------
Fixed
assets 170.7 183.5 159.4
Current
assets 554.3 595.6 466.3
Treasury
shares 7.5 8.1 8.1
Cash and
cash 186.3 200.2 231.9
equiva-
lents
----------------------------------------------------------------------
Total
Assets 918.8 987.4 865.7
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Liabilities 2000 2000 1999
$(2) Euros(1) Euros(1)
----------------------------------------------------------------------
Shareholders'
equity 166.2 178.6 176.2
Minority interests (0.0) (0.0) (0.0)
Accrued contract
costs and other
provisions 118.5 127.3 119.1
Financial debt 49.8 53.5 34.2
Current
liabilities 584.3 628.0 536.2
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Total Liabilities
and Shareholders'
Equity 918.8 987.4 865.7
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Consolidated Cash Flow Statement (in millions of euros)
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2000 1999
Euros(1) Euros(1)
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Net cash provided by operating
activities 28.7 95.7
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----------------------------------------------------------------------
Net cash provided by (used in)
investing activities (47.8) (63.8)
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Net cash provided by (used in)
financing activities (13.9) (23.3)
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Net effect of exchange rate
changes 1.3 14.1
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Net increase (decrease) in
cash and cash equivalents (31.7) 22.7
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Backlog (in millions of euros(1))
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Dec. 31, 2000 Dec. 31, 1999
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Oil & Gas Contracting 860.7 777.6
of which offshore 428.6 -
onshore 432.1 -
Maintenance Services 29.4 27.5
Maritime & River Works 10.5 33.7
Liquefied Gases 79.8 3.0
Chemicals, Refining, Energy
and Industries 18.3 61.5
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1 1 euro = 6.55957 French francs.
2 Based on an exchange rate of Euro 1 = US$0.9305, which was the
European Central Bank reference rate on December 31, 2000.
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