Bolloré half-year results 2021. Analyst meeting.
Notes, Q&A and thoughts
The three pillars of the company are Bolloré Transport and Logistics, Communication and electrical storage and Systems.
Indicates that Bolloré controls 29.5% of vivendi.
C +: the results are good.
Havas: very strong recovery. Resilience is helped by the importance of the health segment. Strict cost control.
Net income impacted by the change in the Spotify market price, for which UMG holds 5%. The market cap has increased from $ 20 billion to $ 60 billion in full covid and now stands at a market cap of $ 45 billion.
Significant growth for Bolloré logistics.
Important sale of buses and batteries.
Maritime logistics: has improved and has more interesting levels of margins.
Douala concession: we are in dispute over this concession.
Total Energie with the acquisition of our charging stations in Singapore achieves an 85% market share for charging stations in Singapore.
Industrial investments in H1 2021 amounted to 328 MEUR: 222 MEUR concerns Vivendi and 92 MEUR concerns Bolloré Logistics.
Cash at Bolloré level = 3.2 billion euros (confirmed lines not drawn and liquid investments). This is outside of Vivendi.
Air logistics remains at -19% compared to 2019.
China continues to perform well in logistics.
OVRSEA (digital transport commissioner), of which Bolloré holds 55%, experienced significant growth during the health crisis.
Bolloré Africa Logistics: MPS Ghana is gaining momentum after large investments of 1 billion euros with other actors.
The decline in operating income is partly related to the currency effect. More serious figures are coming back and this should be confirmed in H2 2021.
C +: 8.9 million subscribers in France on the rise, that's good. Studio Canal had good results thanks to the catalog and the series.
Electricity storage and systems: organic growth of 43% thanks to the acceleration of sales of batteries and plastic films.
Contract with Daimler: the ramp up is accelerating despite the supply problem (raw materials), the deadlines for obtaining the raw materials are a little longer and there is a bit of a quality problem, but this remains contained.
Plastic films: dynamic but impact of raw material sourcing problem.
Carsharing: the sale of this activity will be completed by H2 2021.
Other assets: agreement with Mediaset also made it possible to end a conflict with Daily motion.
Trends in Q3: on ports and freight forwarding (FF) = good and continues to be good.
Port volumes: all volumes continue to increase (empty, import, export, etc.).
FF: still good maritime volumes. Air fret: we have not yet returned to 2019 levels.
Still as many charters. Positive trend and it is improving.
Blue system Singapore: the terminals are sold. All that remains to sell is carsharing, which should be done in H2 2021. The sale of carsharing is well oriented. We will get some cash (de-registration allows you to get some cash). There will be no nasty surprises once this is all over. We should have a nice surprise on the cash.
Singapore (which has just been sold) was losing around 10 MEUR.
We are not far from being flat on the system part.
IER: almost at equilibrium but impact of rising raw materials. The activity resumed in Europe but less in the USA. In the USA, there are fewer returns to the office and this is where we have higher margins.
Logistics: is an external growth operation still planned? What do you think of the rise in multiples?
We always have ambitious acquisition goals but before proceeding with an acquisition we must deploy the TMS (transport management system) software from the publisher Cargowise. Currently, 97% of transport orders go through this TMS. Normally it takes 5 years to deploy it well, but we are targeting to end deployment by June 2022 which is an important stage of deployment.
We are waiting for the distribution of UMG shares which will change the structure of the group and we will have more cash.
Prices of repurchased FF have increased a lot. The prices are going up. The multiples are high but that will not prevent us from making an acquisition. If the multiples are higher, the future prospects are better.
Bolloré logistics is very competitive and can fend for itself.
Contract with RATP for buses: these are purchase options from 2023 to 2025. We hope to obtain 200 buses by 2025.
Delivery to Daimler: Daimler customers prefer lithium polymer. We always have a bit of a supply problem because China has a lot and at times they play the watch.
We could recover lithium to refine it in Europe, it could be a separate activity.
Profitability of FF has increased sharply. Profitability in the port part is very strong thanks to the volumes.
Customs operations have given us a lot of margins. The return of borders allowed us to increase profitability.
The trend seems to be lasting on freight and not one shot. Can last a bit more, do not see the prices drop. On the air, he even sees a peak season.
Calls for concessions: we are studying in the Democratic Republic of Congo but also in Albania and Greece.
What about Bolloré's stake in UMG? Is there a lock up or not? Does this classify as an equity interest? Is the price of 35 billion euros for the UMG valuation remain unchanged with the non-completion of the transaction with Pershing Tontine?
The price of 35 billion has not changed. Vivendi is discussing with several investors who do not discount the price.
UMG securities will be considered as equity interest (Titre de participation in French)
There is no lock up period for the UMG shares held directly by Bolloré.
What will you do with this participation?
We will see how the quotation goes. Bolloré's mandate is to seize the best opportunities.
Most of the business units are either enjoying good trends (FF and port concessions), have been reorganized and back on track (C+ France), are showing nice dynamics (Editis) or are seeing a more normalized environment (Havas). Car sharing assets and the sell of charging stations in some locations at good prices even though they are loss making shows that Bolloré focused on the best business’s.
Vincent Bolloré has always been pragmatic and everything has a price. I would not be surprised to see additional movements in the coming months. The Lagardère acquisition came quickly and it is probable that VB will extract value quickly and boost synergies between Vivendi and C+. It is already the case with the partnership between Europe 1 and C News (C+ news channel).
To the question of where one should position themselves if they want to take advantage of the Bolloré Galaxy investment thesis: the answer is:
Compagne de l’Odet>Bolloré>Vivendi
Why is Compagnie de l’Odet the place to be?
- The change of name from Financière to Compagnie de l’Odet is far from being innocent. Odet will hold a central place whatever happens.
- Odet has been acquiring directly shares of Vivendi before the spin off
- VB has said at the latest general assembly that Odet is inexpensive (the price was towards 1 100 euros when the general assemble took place)
- VB never sold a single share of Odet
- Vincent Bolloré is the chairman of Compagnie de l’Odet whereas he is not on the front line at the Bolloré and Vivendi level.
- Bolloré private entities bought an unprecented amount of Odet shares during the coronavirius pandemic.
Besides Compagnie de l’Odet, Bolloré and Vivendi, they are other quoted companies in the Bolloré Galaxy (Société Industrielle et Financière de l’Artois, Financière Moncey, Compagnie du Cambodge, Forestière Equatoriale, Tramways de Rouen and Chemin de fer et Tramways du Var et du Gard) but liquidity is extremely low
These entities are shareholders of Compagnie de l’Odet. Some also have massive net cash positions following the sale of Havas to Vivendi.
To the question what is VB going to do next? My answer is I don’t know but I am aligned as much as possible with him by having my biggest position within the Bolloré galaxy at the Odet level.
- VB is pragmatic and he is here to make money for his shareholders in his companies (understand that IMO it is better to be a minority shareholder in the Bolloré galaxy companies then in other quoted entities),
- The Bolloré treasury shares to be used in an optimum way must see their value increase. How is that possible? Simplifying the Bolloré business to make it easier to read, simplyfing the structure won’t cost that much on the less liquid entities.
In my opinion, we should be seeing lots of things in the coming months. In Vincent Bolloré we trust!
As a side note, I have seen Vincent Bolloré and I can only confirm that he knows what he wants, is charismatic and that if your company is “takeable” he will take it.