Iliad has reported a fall in full-year profit, as weakness in the French business continued in the three months to December. The company said that France had reached "a low point" after another quarter of negative growth in fixed line revenues, but expects that the marketing initiatives launched during the year will drive a return to growth in 2019. Free cash flow (EBITDA minus capex) guidance for 2020 has been lowered for a second time (EUR 800 million), after the target was trimmed in September 2018 (EUR 1 billion).
Alongside its financial results, Iliad also announced that it is exploring the possibility of forming an industrial partnership with an investment fund for its passive mobile infrastructure in France, concerning approximately 5,700 mobile towers.
At group level, full-year revenues were up by 0.6 percent to EUR 4.89 billion, while EBITDA declined by 1.2 percent to EUR 1.76 billion. Group net profit contracted by 18.5 percent to EUR 330 million, as the 13 percent rise achieved by the French business was not enough to offset start-up losses in Italy and the negative impact of Irish operator Eir (in which Iliad and NJJ have a majority stake).
French revenues down 5% in Q4
In Iliad's core market of France, fourth-quarter revenues declined 5 percent year-on-year to EUR 1.18 billion (-3.1% when excluding handset sales). Performance continued to be negatively impacted by the ongoing decline in fixed line revenues, which fell 4.6 percent to EUR 650 million (-3.8% in Q3). Revenue growth in the mobile segment moved into negative territory, following a sharp fall in handset sales. Mobile revenues invoiced to subscribers progressed slightly to EUR 375 million, up 1.1 percent year-on-year.
Looking at the operational metrics, the French customer base continued to decline quarter-on-quarter across the fixed and mobile segments. While the operator’s higher-tier mobile offer achieved positive net additions (+39,000), the ongoing contraction in subscribers on the EUR 0 or EUR 2 mobile plan resulted in a net drop of 94,000 mobile connections (-90,000 in Q3), for a total of 13.44 million.
In the fixed market, Free lost customers for a fourth quarter in a row, suffering from the expiry of promotions. The net loss worsened to 32,000 (-14,000 in Q3), bringing the base to 6.43 million. Broadband ARPU declined to EUR 31.80, from EUR 32.10 sequentially and EUR 33.90 in the year-earlier period. The operator recently announced that FTTH connections passed the 1 million mark in the second half of January. FTTH net additions improved quarter-on-quarter to reach 148,000.
No further details were released on the performance of the Freebox Delta premium bundle unveiled on 04 December, which reached the milestone of 100,000 customers in mid-March.
