Firstly, we would attentively monitor changes in the demand and requirements in the construction industry in the countries undergoing development where the Bouygues Group and its construction subsidiary are present.
The growth of the mobile networks and particularly the approaching launch of the 5G network could also be points to monitor relating to the strategy of Bouygues Telecom.
Clearly it would be advisable to monitor the signature of any contracts between Bouygues and its partners in the private or public sectors that could provide the company with supplementary revenue.
Of course, we would also closely monitor the growth and events of the Bouygues Group’s competitors, notably in the sectors of mobile telephones and construction.
In the same way, we would follow closely the economic and financial health of local co-operatives that represent a large part of the demand for services from Bouygues. This is particularly the case in countries that are still following an austerity plan or experiencing financial troubles and therefore need to reduce their budgets.
Finally, before buying or selling Bouygues shares, it is recommended to compare the strategic plans and fixed objectives of this group with its true economic and financial results.
The Bouygues group is a French industrial group whose name is now familiar to all. However, its business can be divided into two main sectors. Indeed, more than 78% of its turnover is generated by the construction and maintenance of transport, leisure and urban development infrastructures, while the remainder concerns the well-known telecommunications and media activities with Bouygues Télécom accounting for 14.9% of turnover and the television channel TF1 for 6.3% of group turnover.
Bouygues makes most of its profits in France and Europe, of course, but profits are also made in North America, Asia-Pacific, Africa, Oceania, Central and South America and the Middle East.
Originally, the Bouygues group's main activities were in the real estate and construction sectors. Over time, however, the company has diversified considerably and now operates in a wide range of businesses. Here you can find out more about the various Bouygues companies and subsidiaries and their importance within the group.
Construction: This remains the Bouygues group's main activity, with the subsidiary Bouygues Construction, which covers all the building and public works businesses, and also electricity with the subsidiary Bouygues Energie & Services. Through its construction activities, Bouygues has taken on large-scale projects such as the Stade de France, the Normandy Bridge, the Channel Tunnel, the Singapore Sports Hub, the Baluarte Bridge, the QP District real estate complex in Doha, the Velodrome stadium in Marseille and the First Tower in La Défense, Paris. The Bouygues group currently holds all the shares in this construction company and its subsidiaries. Through it, it achieves a turnover of almost 12 billion euros with a net profit of 320 million euros and 50,132 employees.
Real estate: This is the group's second largest business with Bouygues Immobilier, which is Bouygues' property development subsidiary. This company was created in 1956 and is responsible for carrying out various housing, office and commercial projects, as well as urban development projects such as the Ginko eco-neighbourhood in Bordeaux, the GreenOffice in Meudon and the IssyGrid intelligent electricity distribution network in Issy-Les-Moulineaux. Here again, the group holds all the shares in the subsidiary Bouygues Immobilier. This subsidiary generates over €2,500 million in sales with a net profit of €91 million and employs 2,059 people worldwide.
Colas: This company was acquired by the Bouygues group in 1986 but was originally created as a joint venture between Royal Dutch Shell and SGE. This company specialises in the construction and maintenance of transport, urban development and leisure infrastructures and is currently the leader in this field. It is also active in railway works through its subsidiary Colas Rail. Colas was also behind the creation of the company GTOI in the French overseas territories and the subsidiary GTR in Morocco. The Bouygues Group currently holds 96.6% of the shares in Colas. The company generates a turnover of 11 billion euros with a net result of 355 million euros and employs 54,837 people worldwide.
Media: The Bouygues group also holds shares in the media company TF1. This television channel was privatised in 1986 and has now become one of the main French media groups and owns several other channels such as LCI, TMC, NT1, Ushuaïa TV, Histoire, HD1 and TV Breizh. It also owns a 50% stake in the channel Série Club and the print media Metronews. The Bouygues group currently holds 43.9% of TF1. This subsidiary has a turnover of more than €2,000 million and a net profit of €42 million. It employs 3,107 people, mainly in France.
Telecommunications: In 1994, the Bouygues group entered this booming sector with its subsidiary Bouygues Telecom, which was the third company to obtain a mobile telephone licence. But this subsidiary also offers fixed telephony, Internet access and television services with its Triple Play offer. The group created the B&You brand, which was eventually abandoned in the face of strong competition from Free, which entered the market as the fourth mobile operator. The company will merge its customer bases on this occasion. Recognised for the quality of its fixed telephony and Internet access services, Bouygues Télécom topped the ACERP ranking in 2014. Currently, the Bouygues group holds 90.5% of the shares in Bouygues Télécom. This subsidiary has a turnover of more than €4,700 million and a net profit (group share) of €92 million. It employs 7,334 people worldwide.
Energy and transport: Although this is not one of its favourite areas of activity, the Bouygues group is also active in this sector thanks to the shares it holds in the Alstom group, which represent 21.03% of the total holding, making it its main shareholder since 2006. But the collaboration between Bouygues and Alstom does not stop there, as the merger between the two companies has also led to the creation of a joint venture in the hydroelectric power plant sector. This company, called Embix, was created in 2011 and specialises in the control and management of energy projects for eco-districts and smart grids. In 2014, Bouygues agreed to grant the French state a 20% buyback option on its shares following a successful bid by General Electric for Alstom's energy subsidiary. To date, Bouygues holds nearly 28.3% of Alstom's shares. Alstom generates €3,570 million in sales and net income (group share) of €128 million. It employs 31,000 people worldwide.
It should be noted that the Bouygues group previously owned other subsidiaries in various sectors of activity. For example, it owned SAUR, which provided services to local authorities and industries and which was sold to the PAI Partners group in 2014. He also owned the subsidiary Bouygues Offshore in the oil and gas construction sector. This company specialised in oil technology, supply, construction and installation and was sold in 2002 to the Saipem group, a subsidiary of the Italian group ENI.
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You should also have to carry out a complete study of the group's competition as part of your analyses of the Bouygues share price. That's why we suggest that you to discover who Bouygues' main competitors are in its various segments.
In the construction and concessions sector, it is of course the French group Eiffage which is in direct competition with Bouygues. This group operates in various areas of public works such as construction, infrastructure, concessions and energy. Eiffage is also the third largest construction group in France and fourth in Europe.
Another company in direct competition with Bouygues is the French group Vinci. This company is the second largest construction and Concession Company in the world and employs over 222,397 people worldwide. Its activities apply to motorways, concessions, energy and construction. The Vinci group is also present in around a hundred different countries.
The Orange group specializes in telecommunications and has over 266 million customers around the world. It's the leader or second operator in nearly 75% of the European countries in which it's present and in 83% of the countries of Africa and the Middle East.
The French group Vivendi is another competitor of Bouygues which carries out several activities including media and communication. It's present in around 100 countries and is included in the composition of the CAC 40 index. Vivendi focuses its activities around the Universal Music Group and the Canal + premium TV group as well as the publishing company Editis and Havas.
Finally, Bouygues' last major competitor is the M6 group, which is a French media group built around the television channel of the same name. The group is mainly active in the audio-visual sector with several general and thematic channels, radio stations, film and television production and distribution companies. M6 is also present online with several information and service websites, online videos and computer companies. It has recently branched out into publishing, music and entertainment production, along with distance selling and sports.
In the past, and even nowadays, the Bouygues Group has become associated with other companies whose activities were similar or complementary to theirs.
Bouygues notably invested in Alstom Company capital in which it holds 29.3% which generates supplementary revenue for the company.
This company also became associated with the Lagardère Company for content distribution on its television channels.
In the mobile telephone sector, Bouygues also became associated with SFR (Numéricable) in 2008 in order to counter the major competition from the arrival on the market of the low cost Free (Iliad) Company.
More recently, the Bouygues Company also implemented a partnership, signed in 2019, with the Fnac-Darty Group with the purpose of providing internet subscriptions, both fixed and mobile, from the new Fnac Connect POS.
Still in 2019, the Bouygues Group also implemented a sizeable partnership with the Cellnex Group in the 5G sector. Cellnex is actually a major player in the wireless telecommunications equipment sector in Europe and created 88 dense zones for Bouygues Telecom with the objective of managing 5G traffic.
Recently Bouygues finally completed a partnership agreement with Axione with the objective of accelerating its internet speed and increasing the number of subscribers per fibre.
To better understand how Bouygues shares are likely to evolve in the medium and long term, it is important to have a good understanding of this French group, as well as its strengths and weaknesses, in order to better determine its growth possibilities. Here are some explanations on this subject:
First of all, we can of course point out that the telephony and internet subsidiary Bouygues Télecom has grown strongly over time since its foundation and is now one of the largest telecommunication service providers in Europe.
This brings us to a second positive point for the evolution of Bouygues' share. Bouygues has distinguished itself from its competitors by the fact that it has diversified its activities in an intelligent way. Initially focused on the construction sector, the company now also has a strong position in the television and telecoms sector. Thanks to this successful diversification, Bouygues is more resilient to the risks associated with a single area of specialisation and is able to compensate for cyclical losses in some sectors with gains in others. Indeed, it should be understood here that the cycles which determine the level of profitability and the activities of the various branches of the Bouygues group are independent and very different from each other. On the one hand, there is the construction and roads sector, in which Bouygues Constuction and Colas are leaders and which generates 78% of sales, the media sector with the TF1 group, which is more than 43% owned by Bouygues and accounts for 6% of sales, and telephony with the Bouygues Telecom subsidiary, which generates 6% of sales.
Of course, Bouygues' activities in the construction sector remain the most important. But this brings us to another strength of the company, as Bouygues has managed to position itself advantageously in emerging markets. Investors appreciate the order book of several tens of billions of euros per year in the international sector.
Bouygues is also a reassuring group and stock exchange share thanks to its international scope. The company is active in many countries around the world. More specifically, after the French market, which accounts for 42% of total activities, the rest of Europe accounts for 30% of total activities and the Asia and Middle East sector accounts for the remaining 20%. This geographical diversification has its advantages, including the protection of the group against major geo-economic risks.
Of course, shareholders and investors who bet on the Bouygues group's shares do so more specifically for the group's economic situation and financial stability, which are very reassuring. This stability was reinforced after the public offer for Alstom shares in 2015. In addition, analysts often point to the good cost control and well-considered asset management of this family-oriented group, which rarely makes bad decisions.
While there are many arguments in favour of a rise in the Bouygues share price on the stock market, there are also arguments in favour of a possible fall in the price of this asset. These too should be taken into account before buying or selling Bouygues shares. To help you better understand these elements that could have a downward influence on the Bouygues share, here are the elements that you should include in your analysis.
Firstly, despite the fact that the Bouygues group operates in several countries and is doing its utmost to accelerate its international expansion, most of its revenues still come from the French market alone, which generates almost two-thirds of total sales. This may pose a problem for the future profitability of this company in view of the difficulties that this market presents, particularly with regard to road infrastructure or construction. Moreover, the main countries in which Bouygues is well established outside France are mainly the nearby European countries.
Similarly, operating profits from Bouygues' shares in the TF1 group have been declining significantly for some years now. This decline in revenue is largely due to a significant increase in market share from the channel's 100% online competitors and from other channels which are increasingly offering their content.
From a strictly financial point of view, Bouygues also sometimes disappoints investors because of the quality of its overall strategy. Indeed, following the group's attempt to diversify into nuclear energy, in association with Alstom, which led to a resale of shares after this failure, or following the failed attempt at an alliance with its telecoms competitor Orange, the stock market price of this asset is more volatile than before.
Finally, the group's profitability still leaves something to be desired and could be significantly improved. Analysts, who still consider it insufficient in relation to Bouygues' growth possibilities, can thus influence the market downwards on this share through their criticism.
The Bouygues Group does of course publish its share price on its official website in the section reserved for investors. However there are other ways to consult this share price in real time. You can review the stock market charts available on the online trading platforms which also offer the advantage of enabling you to customise them with the addition of certain indicators and information.
Generally speaking, there are two distinct methods that enable you to speculate on the Bouygues share price. Either you can buy this company’s shares through an intermediary and integrate them in your stock market portfolio or you can choose to trade in these assets directly using CFD contracts through an online trading platform which enables you to speculate on the rise or fall in this asset price depending on the trend.
The Bouygues Group is of course a French group and therefore its share price is quoted on the Euronext Paris stock market. More precisely, Bouygues is quoted in the section A of this financial marketplace as this company boasts one of the largest French stock market capitals. We also note that the Bouygues Company holds its position as one of the 40 largest stock market capitals in France and is therefore included in the CAC 40 stock market index.
There are a number of factors that can cause Bouygues' share price to fall, including when Bouygues' financial results fall short of investors' expectations, this can cause the share price to fall. Competition in Bouygues' industry can also affect its share price. If competition becomes more aggressive or if new players enter the market, this may have a negative impact on the company's prospects, and therefore on its share price. Regulatory changes in Bouygues' industry can also affect its share price. For example, if the government decides to reduce infrastructure spending, this could have an impact on the company's projects and therefore on its share price. Finally, economic events, such as financial crises or recessions, can also have an impact on Bouygues' share price. In a difficult economic environment, investors may be more cautious about their investments and may seek to reduce their exposure to equities.
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