Bouygues (BOUYY) (H1 2026) Earnings Call Highlights: Record Equans Margin and Strategic ...

Negative Points

• Group revenue declined 1.3% on a constant ForEx basis, with Bouygues Telecom and TF1 experiencing expected declines in COPA.

• Bouygues Telecom's mobile ABPU fell EUR0.60 year-on-year to EUR16.70 due to intense price competition and dilution from new low-ARPU customers.

• TF1's revenue fell 6% on a like-for-like basis, with linear advertising revenue down 9% due to macroeconomic uncertainties.

• Bouygues Immobilier's revenue dropped 19% year-on-year, and its order book declined 11%, reflecting ongoing challenges in the residential market.

• The proposed acquisition of SFR is now expected to close no earlier than late 2027 or early 2028, creating uncertainty and incurring significant fees.

• S&P placed Bouygues ( BOUYY ) on a negative credit watch, reflecting potential risks associated with the SFR acquisition.

• The group's free cash flow before working capital requirements decreased to EUR360 million from EUR440 million in the prior year.

• Colas' road business in France is expected to slow due to municipal elections, with a 3% to 5% decline in activity volumes.

• Equans' revenue declined 3% on a constant ForEx basis in H1, with a slow start in Q1 only partially offset by Q2 recovery.

• The geopolitical environment, including conflicts in the Middle East and Ukraine, remains volatile and could impact future performance.

Q & A Highlights

Q: Regarding Equans, you gave us a guidance for Equans, but group-wide, I don't see much of a change. Is there a part of the risk which is lower than expected? Second, your competitors or Equans' competitors have enjoyed significant growth with the data centers. What's stopping you from taking advantage of that trend? And on the Telco business, could you give us some detail on the competition, especially for the mobile business? A: Stephane Stoll (CFO): We noted a higher guidance for Equans in light of the performance to date. We did not upgrade the group's guidance, but that doesn't mean to say that other businesses are in trouble. We're just being cautious. The year isn't over yet. There's an uncertain environment. We certainly hope that there will be an improvement in H2 as well. For now, we're simply confirming the guidance, but the Equans' improvement is not significant enough to upgrade the group's guidance. Jerome Stubler (President of Equans): We have a development plan for data centers, both in the US and in France, and new technology towards direct cooling has led to lots of design work. But now the orders are picking up, and this will translate into revenue in the months to come. Benoit Torloting (CEO of Bouygues Telecom): The mobile market has become mature in as much as there's no volume growth on the market in France. And so with innovations, we can extend our client base. In terms of ABPU, you have to remember, this is a competitive environment, especially for the entry-level contracts, which are with lots of price pressure. And so because of this, our strategy for the past 18 months has been to work on convergence to satisfy customers and reduce churn, and we have a significantly lower churn, and that explains the high number of Bouygues Telecom customers.

Q: On Equans and the volumes, we find that we have an improvement on the top line on sales in Q2. Does that reflect the fact that the selective process that you started when you acquired Equans is behind us? Regarding M&As, are you prepared to make more acquisitions now because you're more confident about the business? And how does that fit in with the fact that you will be finalizing the deal with SFR? And about the energy business, what is your hedging strategy in the telecom business in particular? A: Jerome Stubler (President of Equans): On that question as to whether in 2026, we still feel the effects of selectivity. Well, of course, there are a number of businesses we decided to phase out, especially in Britain, Netherlands and Switzerland, but we are now looking to a growth path everywhere we can do it. Olivier Roussat (CEO): We want to grow Colas and Equans through acquisitions, through external growth. The reason we do this is either when we want to enter a new market, for instance, in the road business in Germany, where we can't just come in from France with our trucks to gain contracts. So penetration of the new market means you have to engage in M&A. The acquisition of SFR will not get in the way of Bouygues' strategy as regards to Colas and Equans because these are the two companies that need a lot of M&As. Pierre Vanstoflegatte (CEO of Colas): On hedging on energy, there are two aspects for industrial sites and sites where you consume electricity, gas or coal. So we've been hedging contracts. So about 70% of the contracts are covered by hedging provisions. Benoit Torloting (CEO of Bouygues Telecom): The energy cost is mostly power costs, electricity costs in Bouygues Telecom. So we've been hedging our electricity purchases. We have a 70% coverage for 2027. And we are working hard on energy efficiency for our radio equipment.

Q: I had three questions, starting with Colas. Can you tell us what's going on? We have a rather more complex environment at the beginning of the year. In France, things are stable, but there are challenges in North America. So what's the outlook, the short-term outlook? On Vannoy construction, what's the strategy there? And on Equans, I believe you have significant provisions in a volatile context. You said you have one-off items in Q2. Can you give us color on that? And then a final question about data centers. Can you tell us about the group strategy? A: Pierre Vanstoflegatte (CEO of Colas): The first half year at Colas is in line, give or take EUR1 million, with last year, same period last year, which was a good year for Colas. So we don't see any particular difficulty. The only impact that we referred to was the volume of business in France because of the fact that it's an election year, municipal elections, in particular. This is what we've observed this year. But we anticipated this, we've managed, and I think we've diversified a number of activities to offset that. As for North America, Canada and the USA are two large countries. The market is faring well. I think we've considerably boosted the order intake and backlog, up 18% or 19%, particularly thanks to large contracts of over EUR200 million. Pierre-Eric Saint-Andre (CEO of Bouygues Construction): Vannoy Construction is part of the strategic plan that we have devised, which consists in rebalancing our activities in mature countries. Vannoy is in the Mid-Atlantic region of the USA, which has the highest demographic growth in recent years. We're mostly in the field of education, health care, retail and industry. This is a good stepping stone for us in a mature market. Stephane Stoll (CFO): These nonrecurring items concern the capital gain on the sale of asset-based businesses, the EV charging stations in the Netherlands. The margin in Q2 was 5.6% for Equans. So notwithstanding these nonrecurring items, the recurring margin will be closer to 5.2%. Olivier Roussat (CEO): On the data center business, we do not have a perfectly detailed French guideline. We operate as our companies are present. When we have a foothold in Australia, we deal through AW Edwards; when we're in Europe and France, we will work with Bouygues Construction and Equans. Sometimes in Italy, our solutions will be led by Equans; in the USA, these are solutions that will be driven by Equans. So we react depending on the strength of our foothold and our various businesses in the region of question.

Q

For the complete transcript of the earnings call, please refer to the full earnings call transcript .