(Update: stock market reaction, communication from the British CMA on the takeover of Equans by Bouygues, statements by the CEO on the TF1/M6 merger, on exceptional costs and on the takeover of Equans)
PARIS (Agefi-Dow Jones)–Diversified conglomerate Bouygues confirmed its financial targets for the 2022 financial year on Tuesday, after its half-year results beat analysts’ expectations. Its subsidiary Bouygues Telecom, for its part, modified its annual outlook, notably raising its growth target for EBITDA (gross operating surplus). The group is also preparing its arguments to convince the Competition Authority to validate the marriage between TF1 and M6 after an initial unfavorable report.
For 2022, the group present in telecoms, construction, real estate and television still expects an increase in its turnover and its current operating profit (ROC) compared to 2021.
Bouygues Telecom, for its part, has changed its annual outlook. The telecom operator has raised its growth target for EBITDA after rent to more than 8%, against around 7% previously. Bouygues Telecom has also replaced its Services revenue growth target of around 5% with a revenue growth target of more than 5% in 2022. The company believes that this indicator is more ” representative” of his performance.
ROC up in the first half
Bouygues delivered these prospects while its results generally improved in the first half. Over the period, the conglomerate’s net profit amounted to 147 million euros, against 408 million euros a year earlier. The profit for the first six months of 2022 was however burdened by a non-current result of -44 million euros, which mainly includes the costs relating to the plans to acquire Equans and to combine TF1 and M6.
Olivier Roussat, the general manager of Bouygues, indicated during a telephone press conference that these costs were distributed for approximately one third for the merger TF1 / M6 and for the remaining two thirds for the acquisition of Equans. These expenses include in particular lawyers’ fees and economists’ fees, explained the leader. In the second half of the year, these exceptional costs should still amount to around 45 million euros, bringing the total amount for 2022 to nearly 90 million euros, said Olivier Roussat.
The first half of 2021, for its part, had benefited from a contribution from the railway equipment manufacturer Alstom – of which Bouygues has now almost completely exited the capital – of 219 million euros, as well as a non-current result of 80 million. euros mainly related to capital gains on the sale of data centers at Bouygues Telecom.
The COI for the first six months of 2022 was €492 million, compared to €471 million in the first half of last year. The half-year turnover increased by 6% over one year, to 18.53 billion euros.
According to a consensus provided by the group, the median of the analysts’ forecasts stood at 18.39 billion euros for the turnover of the first half, at 409 million euros for the ROC and at 129 million euros. for net profit.
On the Paris Stock Exchange, Bouygues shares rose 0.7% to 29.48 euros, while the CAC 40 fell 0.6% at the same time.
The marriage between TF1 and M6 threatened
Regarding the proposed merger between TF1 and M6, “we are going to provide [nos] arguments around mid-August” to respond to the investigation report from the services of the Competition Authority, said Olivier Roussat, referring to “a significant mobilization of resources during the summer”.
This report was communicated on July 22 to the companies, specified the leader. In this document, the authority’s investigation services judged that the marriage between the two audiovisual groups raised significant competition problems, in particular on the advertising market.
Despite this first unfavorable opinion, TF1 and M6 have announced their intention to maintain their project as presented. The two groups believe that the remedies required in the report of the investigation services would make the merger plan lose “all relevance”.
The companies will present their points of view during hearings before the College of the Competition Authority, scheduled for September 5 and 6.
Olivier Roussat assured that they had “solid” arguments. “We believe that the market has evolved, that advertising is emerging on a number of platforms, that platforms are coming to sports rights,” he said.
The general manager cited as an example the introduction of advertising in the Netlix offer and the broadcast on Amazon’s video platform of part of the matches of the Roland-Garros tennis tournament. “The world has changed, these are things that we will be able to re-explain to the College, which will be fully assembled when we intervene on September 5 and 6,” said Olivier Roussat.
No “overseas shopping”
Asked about a possible consolidation operation in another European country, if the TF1-M6 merger proved impossible, the managing director replied that the merger between the two French audiovisual groups remained “plan A”. “We don’t have a plan B to go shopping abroad,” he said.
Regarding the group’s other major external growth file, namely the takeover of Equans, Bouygues indicated that it had submitted proposed remedies to the Competition & Markets Authority (CMA), the British competition authority. The latter announced on Tuesday that it would examine these remedies, setting a deadline of September 28 with a potential extension until November 23. The CMA, however, considered on Tuesday that there were “reasonable grounds” to think that it could accept the commitments of Bouygues and Equans or “a modified version” of these same proposals.
On July 19, the CMA expressed its concerns about the takeover of Equans by Bouygues, fearing that it would weaken competition in the context of the current call for tenders for the catenary of the High Speed 2 high-speed line. United Kingdom.
The green light from the CMA is the last regulatory authorization to be obtained to validate this merger. “At this stage, we are quite calm,” said Olivier Roussat. “Concretely, the remedy has already been accepted by the CMA in its mind,” he added.
-Julien Marion, Agefi-Dow Jones; +33 (0)1 41 27 47 94; [email protected] ed: VLV
(Dimitri Delmond, Agefi-Dow Jones and Ed Frankl, Dow Jones Newswires, contributed to this article)
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August 02, 2022 05:52 ET (09:52 GMT)