General presentation of the Bouygues Company:
The Bouygues Group is a French industrial company whose brand has become renowned, a household name in fact. Its activities can be divided into two main sectors. More than 78% of its turnover is generated through construction and the maintenance of infrastructures regarding transport, leisure and urban developments, and the remainder is from its reputable activities in telecommunications and media through Bouygues Telecom with 14.9% of its turnover alone, plus 6.3% from the TF1 television channel.
It is of course in France and Europe that Bouygues achieves the major part of its turnover although it is also present in North America, Pacific Asia, Africa, Oceania, Central and South America, as well as the Middle East.
Know the competition to Bouygues shares:
Through the diversity of its activities the Bouygues Group has to face numerous competitive companies in various sectors such as construction and that of mobile telephones. It is therefore important for all investors that wish to trade in this company’s share price on the stock markets to know about its major competitors. In fact, as we observed with the arrival of Free, Bouygues can rapidly lose part of its market share or, on the contrary, gain a larger part, against other companies in the same sector. Here therefore is a list of the Bouygues Company’s major competitors that we recommend you follow carefully to ensure you keep up to date with the market share of each of these renowned brand names in the sectors of construction and mobile telephones.
- Eiffage: In the construction sector.
- Vinci: In the construction sector.
- France Telecom-Orange: (Bouygues Telecom) In the mobile telephone sector.
- Groupe M6: (Bouygues Telecom / TF1)
- Vivendi: In the construction sector.
Strategic alliances implemented by the Bouygues Group:
In the past, and even nowadays, the Bouygues Group has become associated with other companies whose activities were similar or complementary to theirs.
- Alstom: Bouygues notably invested in Alstom Company capital in which it holds 29.3% which generates supplementary revenue for the company.
- Lagardère: This company also became associated with the Lagardère Company for content distribution on its television channels.
- SFR: 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.
- Fnac-Darty: 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.
- Cellnex: 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.
- Axione: 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.
Introduction and quotation of Bouygues shares:
The Bouygues Group’s share price is quoted on the NYSE Euronext Paris stock market. It is also integrated in the calculation of the CAC 40 as it has a share capital of over 10 billion Euros.
It was in 1970 that the Bouygues Company made its initial IPO. But since that time numerous economic events have brought their influence to this stock market asset. To enable you to better understand this company’s growth over the years we will now examine this company’s financial and economic history in more detail.
In the 1970s Bouygues built its first offshore oil platforms and increased its international presence in 1980.
In 1984 Bouygues took control of SAUR, then TF1 in 1987 following its privatisation. The company also acquired certain competitive companies in the construction sector.
Regarding the 1990s, Bouygues created LCI in 1994 and launched the third French mobile telecommunications operator Bouygues Telecom with the launch of the TPS digital range in 1996. During this period construction was the principal source of income for this company’s turnover through the ‘large works policy’ of François Mitterrand and the company’s overseas orders.
In 2004 Bouygues separated from its subsidiary SAUR through its sale to the PAI Partners investment fund for nearly one billion Euros. It did however keep 15% of the shares as well as the African and Italian activities.
In 2006 Bouygues finally shed its remaining part of the SAUR Company capital.
More recently, in September 2015, Bouygues resold its share in the Holding Eranove Company, representing 19%. This company is a specialist in the supply of water and energy to Africa. The amount of this transaction is unknown.
Finally, in March 2018 the Bouygues Group acquired the energy and construction services of Alpiq for the amount of 850 million Swiss Francs. These operations affected 7,650 Alpiq employees.
By combining this information with the more volatile movements recorded in the past on the historical stock market charts you will be in a better position to determine how the Bouygues share price could react to events that impact the issuing company and therefore better able to anticipate future movements in this asset using a simple fundamental analysis.
The advantages and strong points of Bouygues shares as a stock market asset:
To better understand how Bouygues shares are susceptible to change in price over the medium and long term it is important to be familiar with this French group and understand its strengths and weaknesses in order to best determine its growth possibilities. Here therefore are some explanations on this subject:
Among the strong points of Bouygues we particularly note its presence in different markets such as construction and real estate but also the audio visual and telecommunications sectors. It has of course shown itself to be extremely capable of diversifying its activities in order to consistently increase its revenue. Bouygues also benefits from a strong presence abroad with particularly strong development in the emerging countries such as India and China. Another strength of the Bouygues Group relates to its investment in eco-construction and sustainable development, two activity sectors that are experiencing a boom in growth at present. And finally it benefits from a number of significant long term contracts that provide a positive perspective to investors.
The disadvantages and weak points of Bouygues shares as a stock market asset:
However the Bouygues Group also has certain weak points such as a debt level that is fairly high. We also note that Bouygues depends to a great extent on the Alstom Group relating to its net results. And finally, since its launch onto the DTT channels, its participation in the TF1 media group is increasingly delicate.
The Bouygues Group does nonetheless have strong opportunities it could seize in the future due to an increasing demand in infrastructure and buildings in countries experiencing a development boom where it is well implanted. The development of the 5G network throughout French territory could also represent a means for Bouygues to distinguish itself from its direct competitors in the telecommunications sector. But also, and especially the Bouygues Group could benefit from the implementation of partnership contracts between the private and public sectors to generate more income.
However, to fully benefit from these development opportunities Bouygues must face certain threats that continue to persist. This is particularly true in the area of telecommunications where its low cost competitor Free continues to lower the price of mobile telecommunications. After a few difficult years and a drop in production in the construction sector, Bouygues also has to face increasing strong competition from China. Other particular events and situations can also negatively influence the development possibilities of the Bouygues Group. Local co-operatives could for example find themselves in increasingly complex budget related situations that require them to review their current and future projects. And to conclude, a number of countries around the world are still recovering from the economic crisis, following austerity plans that also limit new investments and the advance of projects already underway.