Step 1 — Relevant industry Bouygues is a diversified industrial/construction, telecoms, and media group. It does not fit cleanly into the provided regulated utilities, oil & gas E&P, unregulated power & gas, or transportation infrastructure methodologies. Therefore, I apply the general corporate baseline formulas. Key assumptions: - EBITDA is reconstructed as operating profit plus depreciation/amortisation, including right-of-use asset depreciation. - Nonrecurring operating items are adjusted by adding nonrecurring losses and subtracting nonrecurring gains. - Lease adjustment is included by adding right-of-use depreciation back to EBITDA and including lease liabilities in adjusted debt. - Cash interest uses interest paid / cost of net debt plus lease interest where available. - Cash taxes use income taxes paid. - Adjusted debt is approximated as gross borrowings plus lease liabilities minus cash and cash equivalents. This is broadly consistent with the company’s disclosed net debt, but explicitly includes lease liabilities. Step 2 — 2021 Adjusted EBITDA 2021 operating profit = €1,733m 2021 depreciation and amortisation = €2,065m 2021 right-of-use depreciation = €353m 2021 nonrecurring losses = €75m 2021 nonrecurring gains = €115m Reconstructed EBITDA before nonrecurring adjustment: = 1,733 + 2,065 + 353 = €4,151m Adjusted EBITDA: = 4,151 + 75 − 115 = €4,111m Step 3 — 2021 FFO 2021 cash interest / interest paid = €207m 2021 cash taxes paid = €397m FFO: = Adjusted EBITDA − cash interest − cash taxes = 4,111 − 207 − 397 = €3,507m Step 4 — 2021 Adjusted Debt At Jan. 1, 2022, corresponding to fiscal year-end 2021: Long-term borrowings = €5,805m Current borrowings and current portion of noncurrent borrowings = €1,324m Bank overdrafts and short-term borrowings = €351m Noncurrent lease liabilities = €1,473m Current lease liabilities = €362m Cash and cash equivalents = €6,501m Reported gross debt including leases: = 5,805 + 1,324 + 351 + 1,473 + 362 = €9,315m Adjusted Debt: = 9,315 − 6,501 = €2,814m Step 5 — 2021 Adjusted Debt / Adjusted EBITDA = 2,814 / 4,111 = 0.68x Step 6 — 2021 FFO / Adjusted Debt = 3,507 / 2,814 = 1.25, or 124.6% Step 7 — 2022 Adjusted EBITDA 2022 operating profit = €1,872m 2022 depreciation and amortisation = €2,228m 2022 right-of-use depreciation = €446m 2022 nonrecurring losses = €183m 2022 nonrecurring gains = €93m Reconstructed EBITDA before nonrecurring adjustment: = 1,872 + 2,228 + 446 = €4,546m Adjusted EBITDA: = 4,546 + 183 − 93 = €4,636m Step 8 — 2022 FFO 2022 cash interest / interest paid = €260m 2022 cash taxes paid = €518m FFO: = Adjusted EBITDA − cash interest − cash taxes = 4,636 − 260 − 518 = €3,858m Step 9 — 2022 Adjusted Debt At Jan. 1, 2023, corresponding to fiscal year-end 2022: Long-term borrowings = €11,586m Current borrowings and current portion of noncurrent borrowings = €1,361m Bank overdrafts and short-term borrowings = €418m Noncurrent lease liabilities = €2,107m Current lease liabilities = €498m Cash and cash equivalents = €5,736m Reported gross debt including leases: = 11,586 + 1,361 + 418 + 2,107 + 498 = €15,970m Adjusted Debt: = 15,970 − 5,736 = €10,234m Step 10 — 2022 Adjusted Debt / Adjusted EBITDA = 10,234 / 4,636 = 2.21x Step 11 — 2022 FFO / Adjusted Debt = 3,858 / 10,234 = 0.38, or 37.7% Step 12 — Credit trend classification Signal 1: Leverage 2021 Adjusted Debt / EBITDA = 0.68x 2022 Adjusted Debt / EBITDA = 2.21x Change = 2.21 − 0.68 = +1.53x This is greater than +0.2x, so Signal 1 is Deteriorating. Signal 2: Cash-flow coverage 2021 FFO / Adjusted Debt = 1.25 2022 FFO / Adjusted Debt = 0.38 Change = 0.38 − 1.25 = −0.87 This is less than −0.03, so Signal 2 is Deteriorating. Both signals agree. Although operating EBITDA improved in 2022, the acquisition-driven increase in borrowings and sharp rise in net debt materially weakened leverage and cash-flow coverage. Therefore, the year-on-year S&P-style credit trend is Deteriorating. Deteriorating