French TV outfit Canal+ Group unveiled on Tuesday solid full-year financial results for 2024 and plans to pursue its international M&A strategy, even though its market value has dropped drastically (to an estimated $2.1 billion) since being listed as a standalone entity by its parent company Vivendi at the London Stock Exchange.
Canal+ posted total revenues of €6.45 billion ($6.8 billion), a 3.6-percent increase on 2023 while its EBITA (Earnings before interest, taxes, and amortization) was up by 5.4% to €503 million ($529 million). The pay TV group is also still on track to complete its acquisition of MultiChoice, the leading PayTV operator in English and Portuguese-speaking Africa, which was initially planned for April and has now been delayed by six months (to Oct. 8) due to local regulations.
Enders’ senior analyst Francois Godard said the Canal+’s full-year result confirm that it’s a “value stock,” but that “it’s not a company that will see tremendous growth.”
“When you see tech companies who are posting 20% growth every year, that’s not what Canal+ is doing and that’s never been what they promised. Their reputation is built on the fact that they’re a solid company, which is built on a viable, cost-effective economic model that brings a slow but steady growth.”
Godard suggested that Canal+ may take longer than expected to find its footing at the London stock exchange because “it’s unlike any other listed media group.” “There are no comparisons and it’s difficult to explain the potential of their strategy because a lot of people are concerned about cord-cutting and don’t necessarily understand the value in aggregation,” says Godard. Ultimately, it requires some thoughts and long-term forecasting that investors don’t always seek,” he continued.
Maxime Saada, Canal+ Group CEO, meanwhile, addressed the oufit’s underwhelming start at the London stock exchange in an interview with The Financial Times on Tuesday, arguing that the group “was not in a hurry,” and said it was a “three-year story.” Saada also highlighted the company’s global ambitions in a statement that came along with the financial results, noting that Canal+ is on track to reach 50 to 100 million subscribers, and singled out the ongoing acquisition of Multichoice as “transformative” for the banner’s growth. Saada said the company’s net debt of €355 million (relatively modest for a company of the size of Canal+), allows it to complete the takeover of Multichoice as it seeks to tap into Africa’s rising market.
The continent is showing “all key drivers for PayTV growth,” Saada said, mentioning “the demography, with 2 billion population expected in 2050 from 1.2 billion today in Sub-Saharan Africa; GDP with 4.5% expected for the next five years; and penetration of electricity.”
The six-month delay in the completion of the Multichoice acquisition isn’t due to regulatory concerns as anti-trust authorities have already given their green light, but due to local regulations.
Saada said he expects “significant synergies, particularly across the largest cost bases of both companies, namely content acquisition and technology. Elsewhere, Canal+ has also upped its stake to 29.3% in the Scandinavian streaming service Viaplay and has increased its stake to 37.2% in the multi-territory Asian video streamer Viu, which an option to increase it.
Content-wise, Saada has pointed out the company has just signed a three-year agreement with French guilds to invest more than $500 million in French and European cinema (down from €600 million during the three years prior), and is pursuing its aggregation strategy through its output deals with U.S. studios, along with distribution pacts with streaming services such as Netflix and Max. These pacts allow streamers to attract subscribers through the Canal+ package that’s accessible on French set-top boxes, which in turns benefits commercially Canal+. The latter previously had a deal with Disney+ that recently came to an end. Disney+ went on to negotiate separately with French guilds to commit to invest roughly €40 million per year in French movies for the next three years and access films nine months after their theatrical window. Due to its high level of investment in local movies, Canal+ has access to newly-released films six months after release in theaters, ahead of all other players in France.
Canal+ is also home to French production-distribution powerhouse Studiocanal which runs direct distribution operations in France, the U.K., Germany, Poland and Australia/New Zealand. The banner just successfully released “Bridget Jones: Mad About the Boy” in theaters.
Last year, the company had some major hits with the Amy Winehouse movie “Back to Black” which topped charts in 8 countries, and “Wicked Little Letters” which became Britain’s highest grossing independent comedy since 2021. In France, meanwhile, Studiocanal released Gilles Lellouche’s crime romance “Beating Hearts” which became the studio’s highest-grossing film ever (and biggest investment) in France selling almost five million tickets.
Studiocanal also released last year “Paddington in Peru” which grossed $170 million in worldwide box office to date, bringing the total box office for the “Paddington” trilogy franchise close to $700 million. More “movies, series, stage shows and immersive experiences” are expected to come out of the franchise, Saada said.
On the TV front, Studiocanal delivered the international series “Paris Has Fallen,” based on the “Has Fallen” movie franchise, on its pay TV channels, as well as on Amazon Prime in the U.K. and Hulu in the U.S. and has announced that a second season is now shooting in the U.K..
Studiocanal, whose library spans over 9,400 titles, is currently developing several franchise movies based on its IP’s, including a new “Evil Dead” movie and a reboot of “Escape from New York.” The new “Evil Dead” spin-off movie will be directed by Sébastien Vaniček (“Vermines”).
