With linear TV advertising weakening, Bouygues will book a €569 million impairment on its TF1 stake in nine-month accounts, lowering the stake’s carrying value and net profit attributable to the group, it said Oct. 30.
The charge equals all goodwill linked to the investment. It will take TF1’s carrying value in Bouygues’ consolidated accounts to €2 billion as of Sept. 30, or €9.67 per share, down from €15.36 before the impairment.
Bouygues said the item is not tax-deductible and will be booked in non-current profit or loss. It will reduce net profit attributable to the group but leave current operating profit from activities (COPA), net debt, liquidity and investment capacity unchanged. Bouygues characterized the impairment as non-cash. TF1’s consolidated financial statements will be unaffected, as will Bouygues SA’s parent-company accounts and distributable earnings.
The company linked the charge to continued strain in TF1’s traditional advertising market. TF1 reported lower linear TV advertising revenue for a fourth consecutive quarter, Bouygues said. The group said the market is contracting faster than it expected as viewing habits change and advertisers shift spending to online platforms. It described these patterns as global, with audiences consuming television content differently and advertisers reallocating budgets.
Bouygues also said it sees little near-term prospect of better macroeconomic or political conditions. It pointed to limited prospects for regulatory changes that would place broadcasters on more even terms with online platforms.
The group said the impairment does not change TF1’s strategic importance. Bouygues plans to keep supporting the broadcaster’s digital transition and its response to changing audience and advertiser behavior. It said TF1’s plan is starting to show results and is intended to strengthen the broadcaster’s long-term competitive position.
Bouygues is due to publish its first-nine-month results on Thursday, Nov. 5.
