ALTICE N.V. – THIRD QUARTER 2016 PRO FORMA1 RESULTS

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Overig advies 10/11/2016 19:35
Best momentum across Altice Group since IPO – execution focus and
investments in networks and convergence are paying off:
o Return to revenue growth with all major markets contributing to
improvement, expanding margins, growing cash flow conversion.
o Demonstrating success of Altice Model, reinvesting growing cash
flows in infrastructure and content, improving customer experience,
churn and KPIs. Rapid de-leveraging to facilitate further investments
in growth platform.
o Balanced footprint in Europe and USA with growth set to accelerate;
 France another material revenue improvement in Q3 2016
declining 2.0% YoY in Q3 2016 pro forma for recent
acquisitions of media assets excluding regulatory impacts2
(2.4% decline including these impacts) and return to EBITDA
growth. FY 2016 revenue trend still expected to be better than
FY 2015 (-3.5% YoY) as revenue ex-media assets declined 2.6%
YoY3 in Q3 (vs. -6.1% and -4.6% in Q1 and Q2 2016 respectively);
 Altice USA better than expected results with stronger revenue
growth (including the highest cable revenue growth for
Optimum since 2014 at +2.7% YoY, Suddenlink +6.7% YoY in
constant currency), significant margin improvement (+8.2pp
YoY for Optimum and +5.4pp YoY for Suddenlink) and accelerated network investments. Building best-in-class US
cable system to sustain growth (Group has c.41% exposure4 to
large, growing US market);
 Portugal revenue back to growth for the first time since 2008
in September and overall for Q3 2016 excluding regulatory
impacts5 (+1.2% YoY); Reported revenue flat YoY (0.0%) in Q3
2016 (vs. -3.0% in Q2 2016, -3.5% in Q1 2016 and -7.3% in FY
2015) with fiber growth still accelerating
 Operational momentum increases confidence in expectation for continued
improvement in revenue and EBITDA trends for the remainder of 2016:
o France (SFR Group) – Focus on improving network quality, customer
experience, retention processes and content enriched service
bundles, which combined with improving market dynamics and
company transformation is expected to drive further significant
improvements in revenue and EBITDA trends US (Optimum) – Growth still running ahead of initial expectations.
Remain confident in efficiency targets with higher cash flow
facilitating reinvestment to drive better customer experience (whole
network now offering 300/350Mbps broadband speeds6);
o US (Suddenlink) – Industry-leading margins with focus remaining on
customer retention and improving churn. Integration with Optimum
progressing well (single management team with one commercial
strategy) and Project GigaSpeed network upgrades remain on track;


1 Financials shown in these bullet points are pro forma defined here as results of the Altice N.V. Group as if all
acquisitions had occurred on 1/1/15, including PT Portugal (MEO), Suddenlink, Cablevision (Optimum),
NextRadioTV and Altice Media Group France (and excluding Newsday Media Group, Cabovisao, ONI, La
Reunion and Mayotte mobile activities as if the disposals occurred on 1/1/15). Segments shown on a pro forma
standalone reporting basis, Group figures shown on a pro forma consolidated basis.
2 Excluding retail roaming EU tariffs impacts in May 2016.
3 Excluding acquired content and media assets for comparability (i.e.
NextRadioTV and Altice Media Group France).
Altice USA Operating Free Cash Flow, defined as EBITDA less capex, as a proportion of total Operating FCF for
the 9 months ending September 2016 excluding corporate segment (€-36.5m) and €407.7m of capex related to
the acquisition of multi-year major sports rights (English Premier League Football, French Basketball League
and English Premiership Rugby) in France and other territories.
5 Excluding impact from voice termination fee reduction of 30% in September 2015, SMS termination fee
reduction of 35% in April 16, and retail roaming EU tariffs impacts in May 2016.
6 300Mbps for B2C (residential) customers and 350Mbps for B2B (commercial) customers.

Altice N.V. Group Adjusted EBITDA grew 8.5% YoY on a CC basis
driven by the very strong growth of Altice USA (Optimum Adjusted
EBITDA +33.1% YoY, Suddenlink +20.8% YoY on a CC basis);
 Altice N.V. Operating Free Cash Flow grew 13.9% YoY on a CC basis in Q37
driven by the very strong growth of Altice USA (Optimum and Suddenlink
growing +135.1% and +57.0% YoY on a CC basis respectively).
 Robust, diversified and long-term capital structure: during 2016, Altice has
refinanced just over EUR 21 billion equivalent of its debt year to date,
extending the weighted average life of the Group’s debt by 18 months
while keeping the average cost of debt constant.
 Reiterated FY 2016 Altice N.V. Group guidance, including our expectation
of an improving trend in Altice Group revenue on a consolidated basis (as
given on 15 March 2016 under the prior Group perimeter excluding
Optimum and acquired content and media assets, at constant currency).
On this basis, we also still expect mid-single digit growth in Group
Adjusted EBITDA and Operating Free Cash Flow growth flat to slightly
down reflecting accelerated investments. This includes our expectation of
growth in the Adjusted EBITDA contribution from France YoY.

Michel Combes, Chief Executive Officer of Altice, said: “We are extremely
pleased to see our focus on execution is paying off, delivering substantially
better revenue and financial performance across all our major markets
including US, France and Portugal. The efficiency savings we are achieving are
fueling higher investment in infrastructure and content, and improving
customer experience, which is now driving the growth of our business. Altice
has fully transformed into a leading transatlantic, converged telecoms and
media company and quarter after quarter we find ourselves in a stronger
position.
7 Excluding €407.7m of exclusive content capex in Q3 2016 related to multi-year major sports rights.

Altice USA with Optimum and Suddenlink has seen a further acceleration in
revenue growth while simultaneously improving margins materially, driven by
accelerated investments in upgrading our networks and services.
Altice France with SFR is progressing with our innovative strategy based on the
convergence of telecoms, media, content and advertising, enabling us to offer
more and more value to our customers. We are in the middle of our
transformation of SFR and remain confident performance will continue to
improve significantly from here. Our fiber expansion and accelerated 4G/4G+
network investment program is putting us in a prime position to return quickly
to sustainable growth.
Altice Portugal with MEO returning to growth for the first time since 2008
allows us to continue to invest to reach the whole country with fiber services
by 2020.
All of which shows Altice is able to achieve efficiency savings, invest massively
and grow at the same time which we will continue to focus on across the whole
Group.”

see and read more on
http://altice.net/wp-content/uploads/2016/11/Alt-PR-Q3-16-Results-Press-Release.pdf



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