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Over the past 3Y, Bollore has undergone a major portfolio reshuffle, with media companies (post Vivendi break-up) now the largest assets in its portfolio. The cash redeployment strategy has not yet been laid out while a simplification of its holding structure doesn''t seem imminent. At a discount to NAV of 40%, BOL tracks in line with other conglomerates. We move to Neutral as we see limited catalysts for re-rating. Major portfolio reshuffle in the past 3Y Over the past three years, Bollore has rapidly shifted its asset portfolio through the sale of its Logistics/African businesses (for c.EUR10bn) and the break-up of Vivendi (unlocking significant value in the process). The group''s portfolio is today mostly exposed to listed assets (c.80% of Gross Asset Value) through media companies. Key debates: use of cash, simplification, losses in batteries Management has not yet laid out its cash redeployment strategy (c.EUR5bn at the holding level), but indicated that it was not exploring extra returns to shareholders in the short term. The group is also working on turning around its loss-making battery business. A simplification of the holding structure (a process that could unlock value) doesn''t seem imminent following a failed attempt to merge the lower end of the cascade of holdings after the French AMF declared the operation non-compliant. Discount to NAV is in line with peers - downgrade to Neutral BOL has underperformed its underlying blended listed assets since the end of April, likely due to limited prospects for simplification. Our valuation is based on a sum-of-the-parts where we use current share prices for listed assets, peer multiples for non-listed businesses and a discount to NAV for stakes in intermediary parent holdings. We apply a discount of 40% to the SOP, consistent with a sample of European holdings/conglomerate (vs our previous 20% discount). With limited upside to our EUR5.4 TP (lowered from EUR5.7), we downgrade the stock to...
Bollore Bollore SE
As in H1 23, Bolloré’s statements now solely reflect the performance of Vivendi and of its Oil logistics business. That said, unfortunately for Bolloré, as in H1, oil prices remain well below their 2022 level. It is therefore not surprising that the Q3-23 trading statement came in below its level in 2022. In any case, Bolloré has not given us any clues as to its ambitions for the future now that the sale of its logistics business is about to be completed.
Having shed its image as a logistics-focused industrial conglomerate, Bolloré is now a mere reflection of Vivendi and its oil logistics business. The bad news for Bolloré is that oil prices have decreased, and the group’s results have obviously been far from stellar. Now that a takeover bid on Vivendi has been ruled out and the company is set to pocket €4.65bn, the question of redeploying the cash is becoming ever more topical.
After a stellar 2022 owing to a buoyant environment, Bolloré returned to normal with revenues down 11% yoy (organic) in the Q1 23. The Logistics division was the main detractor from Bolloré’s performance stemming from falling air and sea traffic in tandem with lower freight rates. The decline in oil prices hampered Bolloré Energy, which recorded a 16% organic decline. The slight bright spot is the communications division, up 2%.
In the space of two years, Bolloré has completely reshuffled its portfolio from being a logistics giant industrial conglomerate to a media company, so to speak. After the sale of its historical logistics activities in Africa to the Italian shipowner MSC, it is now the balance of the logistics activities that are going to be taken off the table. While the proceeds of the previous operation were redistributed to shareholders, these could end up financing a Vivendi takeover.
Having sold the logistics activities in Africa, it is now the turn of the whole Transport and Logistics division to leave the Bolloré portfolio. Bolloré announced today that it has entered into exclusive negotiations with the CMA CGM Group to sell its Transport & Logistics business for a €5bn cash-free/debt-free enterprise value. This move comes as a surprise given Bolloré’s long-standing appeal in the sector and its leadership position, but does make sense from a financial perspective.
Despite not being as impressive as 2021 with the spin-off of UMG, 2022 remains a milestone year for the industrial conglomerate which saw the handover of its historic chairman and the exit from Bolloré’s African logistics business. While we had been wondering about the HoldCo’s next moves with its pockets now filled, Bolloré will propose a simplified cash tender offer for c.10% of its share capital. The outlook for 2023 looks less promising with an expected drop in oil prices, freight rates and volumes.
Much like 2021, 2022 will be a milestone for Bolloré, marked by the transfer of the group to the new generation in February and the closing of the Bolloré Africa Logistics chapter. We see this €5.7bn deal, which opens the door to the reshuffling of the HoldCo’s portfolio, as positive from both a financial and a timing point of view. Combined with the record results expected for 2022, we reiterate our favourable opinion on the stock.
Bolloré closed another upbeat quarter, posting impressive revenue growth of 16% lfl yoy in Q3. Again this quarter, Transport & Logistics and Oil Logistics were the main growth drivers, benefiting from higher freight rates and the sharp rise in oil prices. But as the acquisition of the Bolloré Africa Logistics division by MSC looms, oil prices might revert back, and since Vivendi did not perform so well this quarter, questions are being raised about the sustainability of Bolloré’s growth.
Bolloré closed an upbeat H1 2022, posting impressive growth in revenues, EBITDA and net income. Transport & Logistics and Oil Logistics were the main drivers of these record results, both of which benefited from the current economic climate: higher freight rates and a sharp rise in oil prices. All in all, impressive results that should please investors.
Bolloré closed an impressive Q1 with strong revenue growth across all divisions. The group’s Transport and Logistics activity was boosted by the increase in freight forwarding and the Oil Logistics activity was supported by the strong rise in oil prices in the context of the war in Ukraine. The electricity storage and systems business also witnessed a boost in sales with higher sales of buses, plastic films and specialized terminals.
Bolloré’s 2021 was a milestone year, marked by the successful spin-off of Vivendi’s crown jewel UMG and the surprising announcement of a potential exit of Bolloré’s historical African logistics business. The 2022 outlook will be marked by this major deal, opening the door for a complete revamp of the HoldCo’s portfolio in the hands of the new generation, which formally took over the family endeavour in February.
Bolloré closed an upbeat Q3, posting impressive revenue growth for its Transportation & Logistics business, as well as a sales surge for Oil Logistics boosted by rising oil prices. On the Vivendi side, the de facto takeover bid of Lagardère following its agreement signed with Amber Capital points to the family’s next major move after the successful completion of the UMG spin-off, which has led to the Bolloré parent holding an 18% stake on the now independent crown jewel.
Bolloré could be looking to exit its long-standing logistics activities in Africa according to French media. Although the company has not commented on the matter — so it remains all speculation — we see this potential move as a clear positive. Bolloré is faced with the high capital intensity of the business while affronting competitive pressures from deeper-pocketed and expanding rivals. Supportive valuations for logistics & port operators and the upcoming departure of Vincent Bolloré suggest that the timing is right.
In a letter addressed to Vivendi, Bolloré has committed to not ask the French market authority (AMF) for an exemption of launching a takeover bid on Vivendi, triggered if the HoldCo finds itself crossing the regulatory threshold of 30% of the share capital.
Bolloré closed a strong first quarter for its Transportation and Logistics division, partly offset by the weakness from Oil Logistics, while Vivendi was led once again by top performer UMG (soon to be spun-off). The transport and logistics activity outperformance was driven by the strong trading environment stemming from global inventory rebuilding efforts as cyclical sectors emerge from a post-pandemic slumber, a trend that should extend through H1 21.
Vivendi has finally revealed its future plans for UMG, with Bolloré now finding itself as one of the major beneficiaries from the upcoming spin-off of what is, by far, Vivendi’s most valuable asset. This surprising development, which has been most likely orchestrated by Bolloré (up to a certain extent), could result in a complete rethink of the HoldCo’s investment strategy for years to come.
