To assess whether Bouygues SA is suitable to issue hybrid bonds, we evaluate its financial profile based on the provided 2022 annual report data: 1. **Capital Structure and Leverage:** The company has seen a significant increase in its debt profile. Long-term borrowings rose from 5.8 billion EUR in 2022 to 11.6 billion EUR in 2023. Additionally, "Net Debt" increased sharply from 941 million EUR in 2022 to 7.44 billion EUR in 2023. This rapid accumulation of debt, partly driven by acquisition activities (cash flows used in obtaining control of subsidiaries were 6.27 billion EUR), indicates a growing reliance on external financing. 2. **Profitability and Cash Flow:** While the company remains profitable (1.13 billion EUR profit in 2022-2023), the growth in interest expenses (from 176 million EUR to 231 million EUR) and the rising cost of debt suggest that the company could benefit from instruments that provide capital relief while potentially qualifying for equity treatment under certain accounting standards. 3. **Financial Stability:** Bouygues is a large, established entity with massive revenue (44.3 billion EUR in 2023) and substantial noncurrent assets (31 billion EUR). Its ability to service its obligations is supported by a strong asset base and steady operating cash flows. 4. **Strategic Rationale:** Hybrid bonds are often used by capital-intensive firms like Bouygues (which operates in construction, media, and telecommunications) to manage leverage ratios and credit ratings while funding significant expansion or acquisitions. Given the significant increase in net debt, a hybrid issuance would be a standard financial strategy for a company of this scale to maintain its financial flexibility and credit profile. Given the substantial scale, stable revenue generation, and the strategic need to manage a growing debt load following major corporate transactions, the company appears to be in a position where hybrid capital would be an appropriate tool for its capital structure management. Strongly Suitable