(News Bulletin 247) – The diversified conglomerate delivered results that exceeded expectations and detailed the trajectory to restore the profitability of the former subsidiary of Engie, acquired at the end of last year.

Bouygues passes this time without incident the test of the financial results. The conglomerate present in the media, construction and telecoms delivered a convincing publication for its annual accounts, while the results for the third quarter were disappointed due to a hitch at Colas.

Bouygues saw its turnover increase by 4% on a like-for-like basis last year to 44.32 billion euros. Current operating income stood at 1.96 billion euros, against 1.69 billion euros in 2021 and 1.86 billion expected by design offices, according to a Parisian analyst. “The results are higher than expected whether in telecoms or in construction, where margins have increased, despite inflation”, underlines this financial intermediary.

The operating margin for construction activity fell from 2.7% in 2021 to 3.1% in 2022.

A sham profit drop

In telecoms, Bouygues Telecom managed to generate current operating income from activities up more than 15% year-on-year to 694 million euros. Sales billed to customers increased by 6% to 5.6 billion euros.

Net profit for Bouygues as a whole nevertheless fell by 152 million euros year on year to 973 million euros due to both a truncated comparison base – the profit for 2021 included disposals of Alstom shares and 219 million euros and the sale of the Bouygues Telecom data center – and exceptional costs, linked to mergers and acquisitions, i.e. the merger project between its subsidiary TF1 and M6, abandoned at fall, and the acquisition of Equans.

The acquisition of this company, a former subsidiary of Engie specializing in multi-technical services (ventilation, heating, fire protection), was finalized in October for an amount of 6.1 billion euros.

A 5% margin for Equans in 2027

This transformative acquisition, if it adds a new string to the bow of Bouygues, left some analysts skeptical because of the price paid and the important work that the group must accomplish to restore square to the profitability of this company.

Bouygues is also holding an investor day dedicated to this new subsidiary this Thursday and, as such, has given its roadmap and its ambitions for Equans. Refocusing the company on the creation of value, Bouygues anticipates a “slight growth” of its subsidiary in 2023 and 2024.

In terms of the margin, Bouygues intends to raise the current operating profitability of Equans’ activities to 5% in 2027 against 2.3% in 2022. This will be done in progressive stages: the margin is expected between 2.5% and 3 % in 2023, close to 4% in 2025 and 5% in 2027. “The market certainly appreciates having visibility on the margins of Equans”, estimates the Parisian analyst previously quoted.

Regarding its overall outlook for 2023, Bouygues has indicated that it expects turnover to be close to that of 2022 and an increase in its operating profit from activity on the rise.

On the Paris Stock Exchange, Bouygues shares rose 3% around 10:20 a.m., in a generally rising market, the CAC 40 gaining 0.3% at the same time.