The costly failure of online acquisitions TF1

“A real industrial accident,” said Patrick Le Lay, former CEO of TF1. The One’s foray into web country turned out to be a costly fiasco for most of its websites: AuFeminin and its Marmiton subsidiary, Doctissimo, MinuteBuzz and Newen (Digitals, Gamekult). According to information from Capital. Then, on July 21, it was announced exclusive negotiations to sell 70% of Ykone (another subsidiary of AuFéminin) to Future Technology Retail, a subsidiary of Saudi Bindawood Holding Company. echoThis marketing agency is estimated to be worth around 50 million euros in the process.

When asked, the chain states: “These activities generated less synergy than expected with our core business. By GAFA.”

Sites sold to Reworld attract 25 million unique visitors per month. Missing them, the TF1 group has taken a big leap back: it has fallen from 29 to 15.8 million unique monthly visitors, from ninth to 44th place among French Internet groups, away from M6 (16th) and France Télévisions (18th row), according to Mediametry. The remaining audience comes mainly from news sites (TF1 Info) and catch-up sites (MyTF1). In terms of replays, the front page remains in the lead, with 26.5 million top shots over the first five months of the year according to Médiamétrie, ahead of France Télévisions (21.4 million) and M6 (17.4 million). “We’ve decided to focus and speed up the broadcast,” the series confirms.

Above all, the proceeds of these dispositions remain far from the purchase price. Doctissimo was acquired for 16 million euros, MinuteBuzz for 8 million, and especially AuFeminin for 328 million (381 million for share capital minus 53 million net cash).

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This fiasco has several explanations. First, the recoveries were made with high ratings. For example, AuFeminin was purchased at 18 times the total operating surplus for 2017. He wrote at the time a price that “seems high, while specialists conjure up a midrange of 10 to 12 times the total operating surplus for this man’s operations.” echo. This award was justified by an optimistic business plan: it promised revenue growth between 14.5% and 21.5% over the period 2018-2021. This is a solid recovery compared to the growth already achieved in 2017 (+6%) and 2016 (+15%). The company also promised a gross operating margin of between 15% and 16%. Objectives considered by the expert Leddobel as “voluntary”, responsible during the acquisition process to express an independent opinion on the valuation.

Likewise, MinuteBuzz’s high rating was backed by a Action Plan Generous: operating profit of 3 million euros on a turnover of 15 million in 2019. In fact, the results of the startup were much lower: operating profit of 113,078 euros from a turnover of 6.4 million.

At the beginning of 2019, TF1 combined all these acquisitions into a division called Unify, and set ambitious goals based on these impressive business plans: a total operating margin of more than 15% on a turnover of €250 million in 2021. These goals were then abandoned It may never have been achieved. It’s hard to know precisely, because TF1 stopped publishing Unify results in mid-2021, clearly wanting to hide their failure. But the latest published results (negative operating margin of -2.5% on a turnover of €160 million in 2020) have been far from the norm.

According to the site small networkAuFeminin currently generates €14 million in gross operating surplus (Ebitda), away from the €25 million generated during the acquisition in 2018, and the target of €30 million in five years at the time. “AuFeminin has given up on the top 10 fans, in particular for neglecting SEO [référencement dans les moteurs de recherche]. The international company, which achieved 8 million, lost 4 million. Most states are closed. E-commerce has collapsed, ”the site adds. In MyLittleParis, Ebitda fell from 10 to 3 million euros. small network It also refers to an “accelerated bureaucracy: the financial management moved from 7 to 25 people.”

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Another problem: most post-sale site managers left to TF1. The front page rejected some of them, such as AuFeminin CEO Marie-Laure Sauty de Chalon or MinuteBuzz leaders Maxime Barbier and Laure Lefevre. Others left on their own, such as AuFeminin leaders Agnès Alzard and Christophe Decker; the founding directors of its subsidiary My Little Paris Fany Péchiodat and Bruno Vuillier; Or Head of Newen’s Web Activities, Johann Le Cardinal. It must be said that most of them made a fortune during the sale to TF1 by selling their shares and/or via bonuses, as in the case of AuFeminin where the directors shared €2.7 million in total bonuses during the sale, including €864,000 for CEO Marie Laure Saute de Chalons.

Unify’s management itself was unstable. As President, Olivier Abicassis left mid-2021. As General Manager, Sabina Gross replaced Marie Lou Gevil in 2020. As Head of Management, Céline Trancart replaced Geraldine Lanave in mid-2022. In the finance department, Jerome Isser replaced Patrick Caetano in mid-2021. 2020. In technical management, Nicholas Silbermann replaced Martin Boronsky in 2020. Internationally, he left Fleur Belzer in 2020 without being replaced. In HR, Ann-Laurie Perron departed in 2022. At the head of the women’s division, Anne-Sophie Jordan was replaced in 2020 by Cecil Dehesden, and replaced by Elodie Mandel in mid-2021. At the head of Doctissimo, Nicolas Salado was replaced by Vincent Alzieu in 2022. More so, Charlotte Bouygues (daughter of main shareholder Martin Bouygues) left her position as director of e-commerce at AuFeminin last year, to create a cosmetics startup called Nhectar.

To make matters worse, Doctissimo was selected for its management of Doctissimo’s personal data. First, the presentation Critical investigation He disclosed that this data was resold for advertising purposes. This will lead to a violent clash between presenter Elise Lucet and Unify chief Olivier Abecassis… Above all, Privacy International has accused the health website of not respecting the RGPD (General Data Protection Regulation). This NGO submitted a complaint to the CNIL, which opened an investigation and appointed a rapporteur …

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The last problem: The front page, with this series of acquisitions made in 2017-2018, arrived a little late to the market. So it had a limited choice in terms of available prey, as many of the tempting targets had already been captured by other predators.

In previous years, Bouygues had deliberately steered clear of the internet’s takeover frenzy, letting many files slip under their noses, like Dailymotion, Webedia, AlloCiné, CCM Benchmark, or even Doctissimo, which they’d buy back later (and ten times cheaper). Its rare incursions into the land of the web, via organic developments (Wat, Eurosportbet, Place des Tiles, 1001 Lists, surinvitation.com, etc.) have been failures.

So in 2016, Jill Bilson, when he took over at TF1, noticed that the front page was a fringe player on the web. He decided to break the deliberately cautious policy of his predecessor, Nunes Paolini, and take out his checkbook to catch up. This allowed him to return to racing. The group’s Internet audience doubled, growing from 15 to 30 million unique visitors per month. But at a high cost. Between 2019 and 2021, Unify accumulated 245 million euros in losses, according to its social accounts. TF1 had to reduce its book value by 225 million euros, to only 87 million at the end of 2021. This may explain why Martin Puig sacrificed it when buying the M6, entrusting the management of the new entity to Nicolas de Tavernost”, analyzes the employee.

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