Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on BOUYGUES SA. We currently have 6 research reports from 1 professional analysts.
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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.
A new crazy offer from Patrick Drahi?
22 Jun 15
The new highly-leveraged telecoms tycoon, Patrick Drahi, chairman and founder of Altice, has eventually decided to make an offer to acquire Bouygues-Telecom for €10bn. This key and long-awaited deal will reduce the number of telcos in France from four to three. Note Bouygues will consider the offer at a board meeting on 23 June. Of course the deal, if accepted by Martin Bouygues, will have to fall within the regulator’s and European watchdogs. Note French Economy Minister Emmanuel Macron has fired a warning shot against the deal, saying that companies should be focusing on investment and jobs, not mergers. To address potential anti-trust concerns, Mr Drahi has probably struck a side-deal with Xavier Niel (founder of Iliad) to purchase parts of Bouygues’ telecom network and spectrum. And also with Orange, which could reassure the French government by hiring in the future part of Bouygues-Telecom’s staff to cover some of the 30k retirements the group will have to manage by 2020. At this stage we don’t know if Drahi’s full cash offer (with a loan from banks including BNP and JPMorgan) will be entirely made by Altice or partly made by Numericable-SFR, its 80% subsidiary with which Bouygues-Telecom will eventually merge.
Panmure Morning Note 30-11-2016
30 Nov 16
RPC, the international plastics products design and engineering group, has delivered yet another strong set of results (1H17 EBITDA +65%, EPS +45%). At the interim stage PBT was +66% (materially better than we had forecast). Topline growth has principally being driven by acquisitions (GCS + BPI), though organic remains a feature (and crucially remains at levels consistent with FY16). The two recent acquisitions have quickly been assimilated into the panEuropean platform and management has raised cost synergy guidance (again).
N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
Panmure Morning Note 02-12-16
02 Dec 16
Today James Halstead will be holding its 101st AGM. Trading during the first part of FY17 has been mixed, with some notable challenges. However, movements in FX (i.e. weak sterling) is boosting reported earnings, offsetting UK volume trends and pricing pressures. Whilst earnings are likely to be second half weighted, the picture is in-line with expectations and we are leaving our FY17 PBT estimates unchanged (£47.4m in FY17 vs £45.4m FY16).
02 Dec 16
On 30 September 2016, when the company announced its full year results, it reported that the UK business had seen a slow start to the year, with particular weakness in repair and renewal spending by the NHS as well as “reticence” in the education sector. However, with the UK only representing about a third of the business, this weakness was expected to be more than offset by the positive effect of a weakened sterling on its overseas business, given the benefits for competitiveness and margins.
N+1 Singer - Vp - Excellent interims, outperforming again
29 Nov 16
Vp has reported another impressive set of interims, confirming strong growth in most markets and a positive outlook. Recent acquisitions are bedding in well and the full year outturn is set to exceed previous expectations (5%/6% EPS upgrades in FY17/FY18). The recent Capital Markets Day provided a reminder of Vp’s qualities (specialist focus, high returns, strong cash generation) and its growth potential, which in our view are not reflected in a modest <11x P/E rating. We firmly believe the shares are due a re-rating and see intrinsic value in excess of 800p.