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Research Tree provides access to ongoing research coverage, media content and regulatory news on BOUYGUES SA. We currently have 7 research reports from 1 professional analysts.
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A stock returned to last spring's prices
23 Feb 17
The annual release has confirmed the trend seen in the first 9m. On one side, we have the rather stable performance of the construction businesses (80% of Bouygues’ turnover but only 55% of its EBITDA) with a global revenue decline in 2016 of 1% yoy and lfl (stable on construction itself and -4% yoy on Colas, but +11% for Bouygues Immobilier in a market boosted by historically low interest rates). And, on the other side, Bouygues Telecom (15% of Bouygues’ turnover but 32.5% of its EBITDA in 2016) is delivering quite impressive results given a French market still shared by four players: revenues were up by 6% yoy in Q4, as in the first 9m, but above all the EBITDA was up by 22% yoy for the whole year, with a margin up by 3ppts at 23% reflecting the savings made through the restructuring of the group. Net debt was at €1.9bn at end-December (corresponding to 0.7x the EBITDA), €695m lower than at the end of 2015. This decrease reflects the sharp growth in the group’s cash flow, up 21% yoy to €2.5bn at end-2016, the proceeds of the Alstom public share buy-back offer, asset disposals and very tight management of the working capital requirement by all the group’s business segments. As for the outlook for 2017, since the construction businesses have a high level order book at end 2016 and a solid competitive edge on their rivals, the current operating margin should continue to improve with a selective approach and focus on profitability rather than volumes. Management has also confirmed for Bouygues Telecom an EBITDA margin target of 25% for 2017.
A return to a 25% margin on telecoms within reach
18 Nov 16
The first 9m release has confirmed the trend in the last few quarters. On one side, we have the rather negative performance of the construction businesses (80% of Bouygues’ turnover but only 55-60% of its EBITDA) with revenue declines of 2% yoy on construction itself and 5% yoy on Colas, even if Bouygues Immobilier (property development) looks better in a market boosted by historically low interest rates. And, on the other side, Bouygues Telecom (15% of Bouygues’ turnover but probably again 35% of its EBITDA in 2016) is delivering quite impressive results given a French market still shared by four players: revenues were up by 6% yoy for the first 9m (and also in Q3) but above all the EBITDA was up by 23% yoy, with a margin up by 3.4 ppts at 23.1% reflecting the savings made through the restructuring of the group. Note the operating profit will be affected by non-current charges of around €270m, including the roll-out of network sharing with the SFR group and adaptation plans in the business segments, before taking into consideration non-current income related to the sale of towers by Bouygues Telecom. (On 11 July, Bouygues Telecom entered into a definitive agreement for the sale of towers to Cellnex. The agreement initially covers 230 towers for a total amount of €80m, although the number of towers could rise to 500. A gain of €56m on the sale of the first 230 towers was recognised as of 30 September 2016.) As for Bouygues Telecom, management has confirmed the return to long-term sales and earnings growth, and maintains an EBITDA margin target of 25% for 2017 with a plan to save at least €400m in 2016 versus end-2013.
A good Q1, reassuring for the future
13 May 16
Q1 revenues were down by 2% yoy while the EBITDA was up by 59%. But this operating performance has to be put in perspective given the fact that, as usual, Colas’ EBITDA due to seasonality was a negative €187m (vs -€173m a year ago) and therefore the 59% global increase represents only €26m, thus only 1% of the global annual EBITDA of the group. Commercial momentum continued in the construction businesses with an order book up 3% at end-December 2015 and almost flat at end-March 2015. Note some major contracts were won in France during Q1, including the Port of Calais extension, Tour Alto in La Défense and the renovation of the Louvre Post Office building in central Paris. As for the Telecom business, revenues were up by 6% yoy while the EBITDA increased by 23.7% yoy. A very good performance even if the growth recorded in terms of EBITDA has also to be put in perspective: the EBITDA in Q1 includes the impacts of IFRIC 21 which affect the timing of recognition of some taxes and represents only 15% of the full-year EBITDA. Nonetheless, the EBITDA margin is up by 2.3ppt!
So the big deal has collapsed
04 Apr 16
So the big deal, which was supposed to reduce from four to three the number of telcos in France and to lead to a more serene French market, collapsed on Friday evening… to the total surprise of nearly all investors on the stock market this morning. It seems that Martin Bouygues felt humiliated by the demands of the French minister of economy, Emmanuel Macron (especially on the future governance of Orange of which Bouygues would have become the second largest shareholder behind the French state). Martin Bouygues was indeed asking for too much from the beginning: €10bn for its telecom unit which is currently generating an annual EBITDA of only c.€800m (vs c.€1.3bn five years ago before the arrival of Free on the French mobile market)! Even if it was at this price that Patrick Drahi wanted to buy the unit a year ago, it was clear that in the case that Orange did the work for the others (Orange is the French leader and is indeed the least interested in the reduction from four to three of the number of telcos in France), it could not buy high Bouygues Telecom and sell low more than half of its assets to the others (Iliad and SFR). And Bouygues had to realise that two other players Xavier Niel and Patrick Drahi are used to being quite uncompromising in negotiations. Put in a nutshell, the deal has collapsed and the French telcos stocks dropped sharply this morning as a result.
Bouygues Telecom recovers before its possible merger with Orange
24 Feb 16
As expected Bouygues’s 2015 revenues were down by 2% yoy while the EBITDA was perfectly flat yoy thanks to stable profitability at the construction businesses and improved profitability at TF1 and Bouygues Telecom. The group has given in parallel a rather light outlook for 2016: “the group should continue to improve profitability in 2016.” Note, however, the group confirms its target of a return to long-term growth in sales and profits for Bouygues Telecom. Nonetheless, we have this time one number: Bouygues Telecom has an EBITDA margin target of 25% for 2017 (vs 19.7% in 2014 and 18.5% in 2015) with a plan to save at least €400m in 2016 versus end-2013. A quite impressive target but it is to make the bride more beautiful: the group is unlikely to achieve it as, at the same time, Bouygues is continuing the discussions announced on 5 January 2016 concerning a merger between Bouygues Telecom and Orange.
Bouygues Telecom's EBITDA is returning to sustainable growth
27 Aug 15
Bouygues's H1 revenues were down by 1% yoy while the EBITDA was up by 19%. The Q2 is a little bit better than the Q1 with flat sales yoy while revenues were down by 2% during Q1. As for the EBITDA, the good performance has to be put in perspective: Bouygues generates 70% of its EBITDA in H2 and the +19% recorded in H1 corresponds to less than 5% of the global annual EBITDA. But the good performance of Bouygues Telecom must be emphasised: while H1 revenues are down by only 1% yoy, the EBITDA is up by 7%, reflecting a real tight control of marketing and operating costs. The group has revised its outlook for Bouygues Telecom upwards and confirmed it for its construction businesses and TF1.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
21 Feb 17
Lighthouse Group* (LGT): Middle Britain growth (CORP) | Utilitywise* (UTW): Double-digit sales growth (CORP) | Trakm8* (TRAK): Earnings expectations cut again (CORP) | dotDigital* (DOTC): Myriad growth opportunities (CORP) | Artilium* (ARTA): Five-year Telenet deal secured and prepaid (CORP) | Netcall* (NET): Cloud investment pays off (CORP)
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Time to go over weight
24 Feb 17
We believe equity investors are taking an unnecessarily cautious stance on the construction sector. Forward looking indicators (e.g. consumer confidence, construction PMIs and housing starts) point to a stable market and recent sales LFL are particularly encouraging (e.g. Marshalls). Near term margins may suffer temporary distortions as inflationary pressures build. However, history has shown that modest input cost inflation is actually a positive for earnings growth in the sector. Therefore, as we move into 2018, margin trends are likely to surprise on the upside.
N+1 Singer - Morning Song 22-02-2017
22 Feb 17
CORETX (COR LN) Contract wins and new Lifestyle facility | Gooch & Housego (GHH LN) Solid Q1 trading plus earnings enhancing acquisition of StingRay Optics | NCC Group (NCC LN) Further issues in Assurance | PCI-PAL (PCIP LN) Strong H1 underpins positive outlook | UBM (UBM LN) Results | Verona Pharma (VRP LN) Phase IIa RPL554 add-on trial to tiotropium commenced