PARIS: 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.

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.”

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.

Bouygues is a diversified services group operating in over 90 countries with 130,000 employees all working to make life better every day.

www.bouygues.com