Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on BOLLORE. We currently have 3 research reports from 1 professional analysts.
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An integrated European media powerhouse dies before being born
24 Oct 16
Once upon a time (say about 6 months ago), Mediaset and Vivendi concluded a splendid strategic alliance: the French group was to acquire 100% of Mediaset Premium, while each entity would be taking a 3.5% stake in the other on the occasion. The ambition was to build a pan-European OTT platform and to create a southern European content and VOD powerhouse… The announced wedding has since moved to the divorce legal battlefield, maybe paving the way for a ménage à trois .
In the mean time, in Africa ….
24 Mar 16
While the economic and financial press makes its headlines over Vivendi, the company’s investments, its takeover bids and the changes of some executive managers within the Vivendi Group and its holdings, only a few people question the good execution of Bolloré’s activities in Africa. In 2014, the transportation and logistics activities represented 53% of Bolloré’s turnover and 87% of the operating result. Africa’s contribution was 42% of the Transport & Logistics’ turnover, that is 22% of the consolidated revenues (the figure is not available for the operating result). For 2015, Transport & Logistics amounted to 56% of the 2015 turnover. We have, for now, no indication about the share of the African continent, only that Bolloré has already warned about the slowdown in mining and petroleum activities in some countries like Nigeria, Gabon, Democratic Republic of Congo, Sierra Leone, Mozambique and Angola. In any case, Africa remains a continent of strategic importance for the Bolloré group. Since October 2014, the chairmanship of Transport & Logistics has belonged to Vincent Bolloré’s son, Cyrille Bolloré. The activity has been reorganised from geographical areas (on one hand, Africa and, on the other, Europa-Asia-America) into four operational divisions: port activities, transport fees, railway operations in Africa, and energy. But all these divisions may involve activities in Africa. Bolloré Africa Logistics (BAL) operates the largest integrated logistics network in Africa, covering 46 countries, employing 24,000 persons and publishing about €2.5bn of revenues. With 250 subsidiaries, the company managed 14 container terminals and around 20 inland container depots in customs warehouses at the end of 2014. In the transit and logistics area, BAL takes care of all customs and administrative procedures, upstream and downstream of transportation by both sea and air on behalf of its clients and deals with the carriage of goods by road or by rail. Within the Bolloré Group, changes are always happening within management. We have already mentioned that an important reshuffling of the teams was conducted inside the transportation and logistics activity (see our Latest dated 28/04/2015). Since then, we have learnt that Dominique Lafont, who headed up the Bolloré Africa Logistics (BAL) subsidiary for a 10-year period until Autumn 2014, has moved to KKR in July 2015, the US equity company, looking to invest in Africa’s infrastructure. The regional manager of BAL in western Africa, Lionel Labarre, is also now going to leave the African activities for Vivendi, having been involved in all of Bolloré’s strategic projects in the Ivory Coast for 16 years …. In addition to the port and logistics businesses, the company is now reinforcing Bolloré’s presence in railway concessions. Requiring major investments (at least €2bn) over several years (about eight), the aim of the project is to open up the hinterland in order to facilitate the export of agricultural and mining resources, increasing the volumes processed by the ports which are managed by Bolloré (Abidjan, Cotonou, Lomé). In connection with the railway projects, the Bolloré Group plans to install Bluezone, inland container depots with handling and storage capacities and optic fibre networks all along the railway.
African rail push at Bolloré’s risk-reward
22 Oct 15
Even if the H1 15 publication has taught us one thing, it is the magnitude of the investments which are facing Bolloré for the coming years as well as the consequences of them: to find the resources needed to finance these projects and potentially to disentangle the ongoing legal actions in connection with the African concessions. The investments have two major purposes: on one hand, electricity storage with the related businesses and, on the other, the ambitious project planned in Western Africa with the aim of securing Bolloré’s logistics business in African harbours. At 30/06/2015, relatively strong growth in investments (+45% to €112m) was recorded in the electricity storage industry with the progression of car-sharing and developments in the bus and stationary activities. The group continued to sell electric vehicles (Bluecars, Bluebuses, Bluetrams and the Bluesummer, a cabriolet version designed by Bolloré and produced by the PSA-Peugeot Citroën group). A car-sharing service was inaugurated in London in June and the car-sharing service of Indianapolis (USA) was launched in September 2015. Due to be completed by end-2019, the plan to roll out 16,000 charging points across France is expected to get under way before the end of the year (€116m to invest between 2015 and 2018, see our Latest dated 08/09/2014). In H1 15, the battery business, Blue Solutions, was breaking even for the first time, but this was not the case for the whole electricity storage and solutions activity which remained (with no surprise) in losses. Remember that the listed company, Blue Solutions, holds options which are exercisable between September 2016 and June 2018 over almost all the other companies within the scope of the electricity storage and solutions activity. But the current greatest project of the Bolloré group is the construction of a railway loop, which is part of the completion of the building of an integrated logistics network through five countries in Western Africa (see our Latests dated 08/09/2014 and following ones). To boost its logistics flow capacities, the group decided to strengthen its presence in African rail concessions by planning investments to renovate and upgrade the road linking Abidjan (Ivory Coast) to Kaya through Ouagadougou (Burkina Faso), to construct the stretches between Kaya and Niamey (Niger) and to renovate the line to Cotonou (Benin), giving a total of 2,740km of rail to construct or renovate. The group also plans to develop the railway from Cotonou to Lomé (Togo) and then to Nigeria. Bolloré intends to install Bluezone (areas equipped with their own electricity supply), inland container warehouses with handling and storage capacities and a fibre optic network (internet, voice/data) all the way along the railway. Last year, up to €2bn was announced for these investments (€1m per km), to be realised over the next eight years. Furthermore, some developments are expected in Cameroon and Guinea for the renovation of a line which should reduce the congestion from Conakry (Guinea) to the Kagbelen inland container warehouse operated by the group. This is an ambitious project to finance, while the group is already indebted. At 30/06/2015, the consolidated net debt amounted to €4.3bn (compared with €1.8bn at the end of 2014), leading to a gearing of 36% (18% at 31/12/2014). The acquisition of Vivendi shares for €3.6bn (of which only €0.6bn obtained from the sale of 22.5% in Havas) was the reason, Bolloré increasing his holding from 5.1% to 14.4% during the half year in Vivendi, of which 2.5% is hedged. Note that at the end of July, the group completed a 6-year bond issue for €450m with a 2.875% annual coupon, with the aim “to extend the average maturity of its debt”. Having initially been determined that he would finance the African project practically alone without approaching any development bank, Vincent Bolloré said during the analysts’ meeting that he was now looking for industrial partners in Africa. If this does not work, an IPO of the railway activity could be launched - in the next three or four years? But for the next three years, the higher level of operating and financial costs should be more than offset by the dividends already received and expected from Vivendi. Bolloré’s H1 15 net result was already very high, due to €325m of dividends received from Vivendi. With the company not being consolidated as an associate, Bolloré receives dividends. Vincent Bolloré is the Chairman of the Supervisory board of Vivendi, held today with 14.5% by the Bolloré Group. In 2015, Vivendi paid an ordinary dividend with respect to 2014 of €1 per share which was supplemented by an extraordinary interim dividend of the same amount, due to the success of the sale of GVT and the 20% interest in Numericable-SFR. Added to the ordinary dividend, a second extraordinary interim dividend (€1 per share) is expected in 2016. In 2017, Vivendi should pay an ordinary dividend, already expected at €1 per share. Between 2015 and 2017, Bolloré will consequently receive a total of €914m from Vivendi.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Taking the bull by the horns
15 Feb 17
Avon Rubber announced this morning that CEO Rob Rennie has left and been replaced with Paul McDonald, formerly managing director of Avon’s Dairy division. This news comes as a surprise and is likely to raise some questions over the CEO and CFO transition, with the CEO only being in post for just over a year. However, the group has appointed an executive already known to many who have followed the business, and as such should be seen as a good appointment with a track record of decisiveness and getting things done.
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.
Share & share alike
14 Feb 17
The rally in the last fortnight, highlighted in the table, reflects a continued flow of positive updates and economic news. The FTSE 250, Small cap and Fledgling indices have reached record highs. We are in the lull ahead of results for those companies with a December year end, a welter of economic data regarding the UK economy, the State of the Union address in the US on 28 February and the UK Budget on Wednesday 8 March. We will learn at that stage the latest forecasts from the Office of Budget Responsibility. As highlighted previously, the reaction to corporate updates will continue to set the tone.