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Canal Plus: “2016 looking worse”

Vivendi revealed its numbers on May 11th, and for one analyst the position at Canal Plus “is looking even worse than thought”.  During the post-results conference call it was confirmed (by Vivendi CFO Herve Philippe) that news channel i>Tele would not be sold.

Canal Plus would also be launching its ‘myCanal’ OTT app on Samsung ‘smart’ TVs.

Laurie Davison, equity analyst at Deutsche Bank, in a note to clients complemented the performance of Vivendi’s Universal Music division which “continues the music recovery theme – a positive 2015 global recorded music market for the first time in 18 years and WMG and UMG seeing new streaming revs more than offsetting physical format decline.”

However, Davison was less impressed by Canal Plus Group’s situation. He commented that its management had stated that outside of France, the net profitability of other operations (including StudioCanal, C+ international and CanalSat mainly) would be net flat for the full-year.  Deutsche Bank is already factoring in anticipated EBITA losses this year, and at a steeper rate (-€20 million) than the overall market consensus [and which] “comes before the BeInSport merger impact, but management would not confirm a positive impact here for 2016. This drop makes the target of restoring profitability in France from the implied €430 million of losses in 2016 by 2018, look even more challenging. Yet on this plan there are still no details from management.”

Charles Bedouelle, from Exane/BNP-Paribas bluntly added at the end of his report that bank’s “Outlook is unchanged (and understandably vague)”, although he had said that Canal’s position was “no catastrophe”.

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