Altice Europe N.V. Second Quarter 2019 Pro Forma1 Results

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Algemeen advies 01/08/2019 09:07
All silos Growing YoY, including France Residential
Revenues +3.8%, EBITDA +10% and OpFCF +18%2
FY 2019 Guidance Increased
31 July 2019: Altice Europe N.V. (Euronext: ATC and ATCB), today announces financial and operating results for the quarter ended June 30, 2019.
Patrick Drahi, Altice Europe founder: “The turnaround of Altice Europe is more and more evident with another key milestone in Q2 2019: residential revenue as well as total revenue in France is back to growth. Consistent with Q1 2019 results, we demonstrate in Q2 2019 our capacity to benefit from decreasing churn and call centers volumes to generate significant savings. Altice France and Altice International are accelerating their revenue growth, with stronger EBITDA growth, paving the way for an acceleration of the deleveraging, already noticeable. This successful operational turnaround allows us to increase our full year guidance.”
Altice Europe Q2 2019 Key Financial Highlights
? Revenue grew by +3.8% YoY (+3.3% YoY on a constant currency (CC) basis) vs. -0.1% YoY in Q1 2019.
? Adjusted EBITDA grew by +9.8% YoY (+9.3% YoY on a CC basis) vs. +4.1% YoY in Q1 2019. Adjusted EBITDA margin was 39.9% in Q2 2019 (+2.2pts YoY).
? Significant investments were made in networks, customer premise equipment and innovative new services, with total accrued capital expenditure for Altice Europe of €756 million in Q2 2019, relatively stable YoY.
? Consequently, Operating Cash Flow grew +18.4 YoY2 in Q2 2019.

1 All financials are shown under IFRS 15 accounting standard. Financials shown above are pro forma defined as results of Altice Europe new perimeter as if the spin-off of Altice USA had occurred on 1/1/18. Altice USA considered as third-party and not included in group eliminations from 1/1/18. Segments are shown on a pro forma standalone reporting basis and Group figures are shown on a pro forma consolidated basis. In addition, financials for Altice Europe exclude the international wholesale voice business (following closing announced on September 13, 2018) and press magazines disposed (following closing of Point de Vue on July 2, 2018 and Groupe L’Express on July 30, 2019) from 1/1/18. Financials shown are pro forma for the tower transaction in Portugal (following closing announced on September 4, 2018) and the tower transaction in the Dominican Republic (following closing announced on October 3, 2018) from 1/1/18
2 Operating Free Cash Flow excluding Altice TV

Altice Europe Q2 2019 Key Operational Highlights
? Altice France achieved another good level of customer acquisition in the second quarter in a market with fewer promotions, while continuing to focus on and significantly reduce churn in both fixed and mobile. As expected and consistent with FY 2019 guidance, Altice France benefitted in Q2 2019 from an improved revenue trend, both in residential and business services, as well as lower costs, underpinned by better quality of services and lower churn (-20% YoY in Q2 2019).
o Residential fixed base grew by +31k customers, with +64k fibre customers. SFR has now 43% of its total fixed subscriber base on fibre.
o Residential mobile postpaid base grew by +105k customers, supported by the best 4G+ network in 2018 (according to nPerf survey).
o Altice France reported positive revenue growth of +4.0% YoY without any reduced VAT benefit (vs. -1.2% YoY in Q1 2019). Altice France reported a significantly improved Adjusted EBITDA trend in Q2 2019 of +10.1% YoY (vs. +4.6% YoY in Q1 2019).
? In Portugal, the Group again achieved a solid level of customer acquisition in the second quarter, driving revenue growth, with careful cost control resulting in an improved Adjusted EBITDA trend.
o The residential fixed base grew by +1k customers, while fixed and mobile churn has stabilized at the lowest level ever, alongside ARPU stabilization (churn below 8% in fibre and below 9% in mobile postpaid in Q2 2019). Fibre customer net additions were +35k, supported by the expansion of fibre coverage. Mobile postpaid net additions were +31k.
o Thanks to its continued network investments and successful convergent strategy, MEO reported an improved revenue trend in Q2 2019 with +1.1% YoY (vs. +0.4% in Q1 2019), driven by positive mix effect (migration from prepaid to postpaid and to convergent offers). A tight control of the cost base paved the way to an improved Adjusted EBITDA trend of +0.4% YoY in Q2 2019 (vs. -1.4% YoY in Q1 2019).
? Altice International revenue grew by +3.6% YoY (vs. +2.0% in Q1 2019), notably driven by Teads which grew by +40% in Q2 2019.
Capital Structure Key Highlights
? Total consolidated Altice Europe net debt was €30.1 billion at the end of Q2 2019.
? Altice Europe received strong support from the debt capital markets during the Altice Luxembourg refinancing transaction in May 2019. Altice Luxembourg 2022 Notes and Altice France 2024 Notes partial repayment was effective early June. This refinancing demonstrated Altice Europe’s commitment to proactively manage its liabilities across its capital structure, significantly improve its maturity schedule, reduce its gross leverage and move closer to its leverage target while reducing its annual cash interest cost.

FY 2019 Guidance Increased
? For the full year 2019, Altice Europe expects:
o Operating free cash flow growth in the area of 15% YoY, excluding the Altice TV segment (in the area of 10% YoY previously).
o Altice France revenue growth within a range of 5% to 6% (3 to 5% previously).
o Altice France Adjusted EBITDA within a range of €4.1 billion to €4.2 billion (€4.0 to 4.1 billion previously).
? Altice Europe targets a leverage of 4.25x net debt to Adjusted EBITDA within 20 months for the telecom perimeter (Altice Luxembourg), as announced on March 28, 2019.
Other Significant Events
? On May 18, 2018, the General Meeting of Altice Europe granted the authority to the Board to cancel any shares in the share capital of the company held or to be held by the company. On April 26, 2019, the Board of Altice Europe resolved to cancel 685,000,000 common shares A held by the Company. The cancellation of such shares became effective on June 28, 2019.
? On July 18, 2019, Altice France unveiled its new set-top box SFR Box 8, designed and produced by Altice Labs. France will be the first country in which Altice markets the box, to be launched on August 20, 2019. Altice France launches the only box on the French market to be equipped with the latest generation WiFi (WiFi 6) along with cinema-like sound and image standard (boasting 4K HDR with Dolby Vision® and Dolby Atmos®). The box incorporates all the new features users expect such as the voice assistant and an innovative multi-screen interface bringing an unprecedented experience into the home. The box will be available for the whole range of fixed offers, as an option, in DSL, FTTB and FTTH. Coupled with the power of the Altice France network, the first high-speed broadband infrastructure in the country with more than 13 million eligible connections, the SFR Box 8 will offer an unrivalled Internet experience.
? On July 30, 2019, Altice Europe closed the sale of 51% of Groupe L’Express to Alain Weill.

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tijd 09.04
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