Bouygues Telecom announces its new strategic plan “Ambition
2026”
Paris, 15/01/2021
Press release
Bouygues Telecom announces its new strategic
plan “Ambition 2026”
To become the number 2 telecoms operator in mobile and a
major player in fiber in France
For more than five years, Bouygues
Telecom has been successfully implementing its sustainable and
profitable growth strategy. After having made ambitious pledges to
fight against climate change, Bouygues Telecom is now taking a new
step by unveiling its strategic plan and targets for
2026.
To achieve that ambition, Bouygues
Telecom is stepping up its growth in a reinvigorated French market,
leveraging the drivers responsible for its success since 2015, its
recent acquisition of EIT, new initiatives in its various markets
(B2C, B2B and wholesale) and expert skills and dedication of its
people.
The financial targets of the Ambition
2026 strategic plan are to generate in 2026:
- over €7 billion in sales from services;
- EBITDA after Leases of around €2.5 billion with an
EBITDA after Leases margin of around 35%;
- free cash flow1 of around €600
million.
Richard Viel, Bouygues Telecom’s CEO, said:
“Bouygues Telecom’s strategy since 2015 has been an undisputed
success. The business and financial targets set at the time have
all been achieved or exceeded, making Bouygues Telecom the operator
with the fastest sales growth on the French market and among the
very first in Europe. The company is now entering a new phase of
its development in order to strengthen its positioning as a
full-service operator, strong on all connectivity markets. I am
proud to unveil our new “Ambition 2026” strategic plan.”
As announced, Bouygues is today holding a
Capital Markets Day specifically for Bouygues Telecom. CEO Richard
Viel and Deputy CEO Benoît Torloting, accompanied by CFO Christian
Lecoq, will present their vision of the telecoms market and
Bouygues Telecom’s medium-term strategy and outlook in the context
of a new strategic plan, “Ambition 2026”.
Bouygues Telecom, 25 years of
innovation
2021 marks Bouygues Telecom’s 25th anniversary.
The company has been a pioneer in many areas over
the last 25 years. In 1996, it made mobile telephony accessible to
everyone, for example by offering the first mobile phone bundle,
then in 1999 the first mobile phone plan with unlimited voice.From
2010, it has brought connectivity within everyone’s reach. Bouygues
Telecom was the first player on the market to offer a
quadruple-play package (mobile, fixed, internet and TV) and a 4G
box offering a high-speed internet connection in areas with slow
ADSL speeds. It launched the first box on the market to have an
incorporated Android TV decoder and was the first operator to offer
its customers Netflix.Making sure that its customers get the best
digital experience is another key concern. Since 2020, Bouygues
Telecom has offered the best Wi-Fi modem on the market2, meeting
the expectations of French consumers, 96% of whom consider it
essential to have good Wi-Fi at home. It is acknowledged to be the
operator that provides its B2B customers with the best service3.
And in 2020, for the seventh consecutive year, the French telecoms
regulator Arcep confirmed Bouygues Telecom’s network as the
second-ranked mobile network in mainland France.
Bouygues Telecom, a socially responsible
player
Bouygues Telecom endeavors to offer its
customers a high-performance, energy-efficient and sustainable
network, aiming to cut its greenhouse gas emissions4 while meeting
the expectations of its customers and other stakeholders. It
reduces its environmental impacts by improving its products and
extending the lifetime of its equipment. Its modems and TV decoders
are eco-designed (box, packaging, first virtual box incorporated
into the TV set) and their energy consumption is regularly
optimized (35% reduction between the Miami box and the Bbox
Sensation, and 36% reduction between the Bbox 4k and the Miami
box). As the first operator to commit to refurbishing mobile phones
back in 2011, Bouygues Telecom has consolidated its leading
position in the smartphone circular economy, rolling out a 4R
mobile strategy (Repair, Recover, Refurbish, Recycle). It also
takes action to encourage more sober use of digital technologies
among its customers.
Bouygues Telecom has been successfully
rolling out its strategy since 2015, making it one of the
fastest-growing operators in the sector in Europe over the
2015-2020 period.
At its previous Capital Markets Day in October
2015, Bouygues Telecom presented an ambitious strategy for a return
to long-term sales and results growth. That strategy has
borne fruit and all the commitments made have been achieved or
exceeded:
- Mobile growth: 1 million more customers in 2017 vs end-2014
(achieved a year early)
- Fixed growth: 1 million more customers in 2017 vs end-2014
(achieved in 2017)
- EBITDA after Leases margin: 25% in 2017 (exceeded, with
27% in 2017)
Between 2015 and 2020, Bouygues Telecom
maintained growth momentum on a French market that has stagnated in
value terms. Bouygues Telecom added 2.7 million mobile
customers excluding MtoM, and 1.6 million fixed customers between
end-2014 and Q3 2020 and is by far the operator with the strongest
overall sales growth, averaging 7.3% a year between end-2014 and
20205. It more than doubled its EBITDA after Leases over the same
period (around €1.5 billion expected in 20205 versus €694 million
in 2014) and increased its EBITDA after Leases margin by over 10
points (31% expected in 20205 versus 18% in 2014). This
growth has made Bouygues Telecom one of the best-performing
operators in France and Europe.
The French telecoms market is entering a
new phase of growth
The French telecoms market will
experience a phase of growth between 2021 and 2026, driven by two
major ground-breaking technologies – FTTH and 5G – and a growing
need for connectivity. France is one of the most advanced
countries in Europe in terms of the roll-out of fiber, which is
accelerating. The regulatory environment is generally favorable to
5G, which is just starting. These two new ground-breaking
technologies give innovative players unique opportunities to gain
market share. In addition, connectivity has become essential for
both individuals and businesses, a development amplified by the
health crisis. Mobile use increased 1.5x between 2018 and 2020 and
is likely to double between 2020 and 2023 and double again between
2023 and 20266. In this context, Bouygues Telecom believes it is
the right time to step up its
growth.
Ambition 2026 aims to speed up growth in order to become
the number 2 in mobile and a major player in fiber.
This ambition has three strands:
Become the number 2 in
mobile:
- Continue the “more for more” strategy
successfully rolled out over the last three years;
- Consolidate its position as the second-ranked mobile
network in France: increase coverage (target of 28,000
sites in 2023 and around 35,000 in 2026) and quadruple network
capacity by 2026;
- Capitalize on the integration of EIT, which
enables the company to position itself as France’s third-largest
operator by market share, adding more than 2 million
customers;
- Benefit from its extended distribution network
through the long-term partnership concluded with Crédit Mutuel,
which will distribute Bouygues Telecom’s fixed and mobile products
and services in over 4,200 Crédit Mutuel and CIC local bank
branches;
- Benefit from the brand’s repositioning “On est
fait pour être ensemble”7 in 2020, with the aim of becoming the
second-ranked operator in terms of prospect purchasing
intentions.
Gain an additional 3 million FTTH
customers:
- Market high-quality, competitively-priced
offers while continuing the “more for more”
strategy;
- Propose innovative, eco-designed, best-in-class fixed
devices;
- Continue to offer a high-quality customer
experience;
- Double FTTH coverage from around 17 million
premises marketed at end-20208 to a target of 35 million at
end-2026 (with an intermediate target of 27 million at
end-2022).
Double market share in fixed B2B and
become a wholesale fixed player:
- Consolidate its position as a benchmark in customer
relations in B2B;
- Be a leading connectivity operator with enhanced
service offerings, either directly or through
strategic partnerships;
- Increase market share in the small-business segment by
leveraging a multi-channel distribution network: Bouygues
Telecom Entreprises’ and Nerim’s direct and indirect sales forces,
the Crédit Mutuel-CIC distribution network, which has a solid
small-business customer base, and digital distribution via Keyyo
Communications;
- Monetize its FTTO and FTTA infrastructure in
B2B and expand its wholesale
fixed offering, capitalizing on its expertise and
leading position in wholesale mobile.
Ambition 2026 aims to pursue profitable
and sustainable growth resulting in a doubling of free cash flow
versus 2019.
There are robust prospects for profitable and
sustainable growth over the period 2021-2026. Bouygues Telecom has
set itself the following targets for 2026:
- sales from services of more than €7 billion vs
approx. €4.9 billion in 20209;
- EBITDA after Leases of around €2.5
billion vs approx. €1.5 billion in 20209;
- EBITDA after Leases margin of around
35% vs 31% in 20209;
- free cash flow of around €600 million vs
around €250 million expected in 2020 (and €300 million reported in
2019).
This growth is expected to occur in two
stages:
2021-2023: faster growth in
mobile (including EIT) and FTTH and an increase in fixed ABPU
should boost sales from services and EBITDA after Leases.
However, the EBITDA after Leases margin is likely to remain
stable in 2023 (at around 31%) due to higher costs linked
to faster growth in the fixed segment, densification of the mobile
network and the initial dilutive effect of integrating EIT.
2024-2026: ongoing growth in
mobile and FTTH, expansion of the wholesale fixed offering and
higher mobile and fixed ABPU should continue to sustain growth in
sales from services and EBITDA after Leases. Bouygues
Telecom is aiming for an EBITDA after Leases margin of around 35%
in 2026 as a result of economies of scale generated by the
integration of EIT, the growth of its customer base and favorable
development of the fixed business model.
In order to achieve the targets of its Ambition
2026 strategic plan, Bouygues Telecom will accelerate roll-out of
its FTTH and 5G infrastructure and invest in mobile radio capacity
and fixed devices (modems, TV decoders, etc.) to keep pace with
changes in use and a growing customer base.Consequently,
the company estimates gross capex of around €1.5 billion a
year between 2021 and 2025 and of around €1.4 billion in
2026. These annual amounts include the cost of gradually
replacing Huawei equipment, with around 3,000 sites being converted
by 2028. The 2021 gross capex guidance includes €140 million for
the integration of EIT. Disposals of assets, mostly data centers,
are expected at around €200 million in 2021.
Overall, Bouygues Telecom’s aggregate
capex between 2021 and 2026 will create substantial
value.
financial calendar
- 18 February 2021: Full-year 2020 results (7.30am
CET)
The Capital Markets Day presentation will start
at 3 pm (CET) on 15 January 2021. Details on how to connect and the
presentation will be available on www.bouygues.com.
About Bouygues
Bouygues is a diversified services group
operating in over 90 countries with 130,000 employees all working
to make life better every day. Its business activities in
construction (Bouygues Construction, Bouygues
Immobilier, Colas); media (TF1) and
telecoms (Bouygues Telecom) are able to drive
growth since they all satisfy constantly changing and essential
needs.
INVESTORS AND ANALYSTS CONTACT:
PRESS CONTACT:investors@bouygues.com • Tel.: +33 (0)1 44
20 10 79
presse@bouygues.com • Tel.: +33 (0)1 44 20 12 01
BOUYGUES SA • 32 avenue Hoche • 75378 Paris
CEDEX 08 • www.bouygues.com
GLOSSARY
4G consumption: data consumed on 4G cellular
networks, excluding Wi-Fi.
4G users: customers who have used the 4G
network during the last three months (Arcep definition).
ABPU (Average Billing Per User):- In the mobile
segment, it is equal to the total of mobile sales billed to
customers (BtoC and BtoB) divided bythe average number of customers
over the period. It excludes MtoM SIM cards and free SIM cards.- In
the fixed segment, it is equal to the total of fixed sales billed
to customers (excluding BtoB) divided by theaverage number of
customers over the period.
B2B (business to business): when one business
makes a commercial transaction with another.
EBITDA after Leases: current
operating profit after taking account of the interest expense on
lease obligations, before (i) net depreciation and amortization
expense on property, plant and equipment and intangible assets,
(ii) net charges to provisions and impairment losses, and (iii)
effects of acquisitions of control or losses of control. Those
effects relate to the impact of remeasuring previously-held
interests or retained interests.
EBITDA margin after Leases (Bouygues Telecom):
EBITDA after Leases as a proportion of sales from services.
Free cash flow: net cash flow
(determined after (i) cost of net debt, (ii) interest expense on
lease obligations and (iii) income taxes paid), minus net capital
expenditure and repayments of lease obligations. It is calculated
before changes in working capital requirements (WCR) related to
operating activities and excluding 5G frequencies.
Fixed churn: the total number of cancellations
in a given month, divided by the total number of subscribers at the
end of the previous month.
FTTH (Fiber to the Home):
optical fiber from the central office (where the operator’s
transmission equipment is installed) all the way to homes or
business premises (Arcep definition).
FTTH penetration rate: the FTTH
share of the total fixed subscriber base (the number of FTTH
customers divided by the total number of fixed customers)
FTTH premises secured: the horizontal deployed,
being deployed or ordered up to the concentration point.
FTTH premises marketed: the
connectable sockets, i.e. the horizontal and vertical deployed and
connected via the concentration point.
Mobile churn: the total number
of cancellations in a given month, divided by the total number of
subscribers at the end of the previous month.
MtoM: machine to machine
communication. This refers to direct communication between machines
or smart devices or between smart devices and people via an
information system using mobile communications networks, generally
without human intervention.
PIN: Public-Initiative Network.
Sales from services (Bouygues Telecom)
comprise: - Sales billed to customers, which
include:- In Mobile:
- For BtoC customers: sales from outgoing call charges (voice,
texts and data), connection fees, and value-added services.
- For BtoB customers: sales from outgoing call charges (voice,
texts and data), connection fees, and value-added services, plus
sales from business services.
- Machine-To-Machine (MtoM) sales.
- Visitor roaming sales.
- Sales generated with Mobile Virtual Network Operators
(MVNOs).
- In Fixed:
- For BtoC customers: sales from outgoing call charges, fixed
broadband services, TV services (including Video on Demand and
catch-up TV), and connection fees and equipment hire.
- For BtoB customers: sales from outgoing call charges, fixed
broadband services, TV services (including Video on Demand and
catch-up TV), and connection fees and equipment hire, plus sales
from business services.
- Sales from bulk sales to other fixed line operators.
- Sales from incoming Voice and Texts.- Spreading of handset
subsidies over the projected life of the customer account, required
to comply withIFRS 15.- Capitalization of connection fee sales,
which is then spread over the projected life of the customer
account.
Other sales (Bouygues Telecom): difference
between Bouygues Telecom’s total sales and sales from services.It
comprises:- Sales from handsets, accessories and other
- Roaming sales- Non-telecom services (construction of sites or
installation of FTTH lines)
- Co-financing of advertising
Very-high-speed: subscriptions
with peak downstream speeds higher or equal to 30 Mbit/s. Includes
FTTH, FTTLA, 4G box and VDSL2 subscriptions (Arcep definition).
Wholesale: wholesale market for telecoms
operators
1 Free cash flow: net cash flow (determined after (i) cost of
net debt, (ii) interest expense on lease obligations and (iii)
income taxes paid), minus net capital expenditure and repayments of
lease obligations. It is calculated before changes in working
capital requirements (WCR) related to operating activities and
excluding 5G frequencies.2 Source: 01 Net.3 Bouygues Telecom
Entreprises won the 2021 Customer Service prize awarded by Viséo
Customer and BVA.4 Climate targets for 2030: a 50% reduction in
carbon emissions on scopes 1 and 2 and a 30% reduction on scope 3
(vs. 2020), and use of over 50% renewable energy sources.5
Estimates for 2020 are derived from the Visible Alpha consensus at
7 January 2021 and do not include EIT6 Source: Ericsson.7 « We
are made to be together”8 Company estimate.9 Estimates for 2020 are
derived from the Visible Alpha consensus at 7 January 2021 and do
not include EIT.
- PR_CMD_Bougues Telecom_2021
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