Altice Europe raised its FY operating free cash flow guidance and the revenue/EBITDA outlook for its French operations, as it said that the group's operational turnaround was bearing fruit. Altice France reported revenues of EUR 2.60 billion in the second quarter, up 4.0 percent year-on-year (-1.2% in Q1), while adjusted EBITDA rose 10.1 percent to EUR 1.08 billion (+4.6% in Q1).
Following these positive trends and sustained customer growth at SFR, the French business is now targeting FY revenue growth in the region of 5-6 percent (3-5% previously), with an adjusted EBITDA of EUR 4.1-4.2 billion (up from EUR 4.0-4.1 billion).
The recovery in France reached a new milestone as the residential business returned to positive revenue growth, said the company. Across the fixed and mobile segments, residential revenues saw a slight rise of 0.3 percent (-4.4% in Q1) to reach EUR 1.67 billion, as growth in the mobile division more than offset the ongoing drop in the fixed segment. The operator noted that the residential business benefitted from ongoing customer growth and a clear moderation in ARPU decline.
The positive trend continued for non-residential revenues. In Business (B2B, wholesale and other non-media revenues), growth improved to 11.8 percent (+10.2% in Q1), based on EUR 817.2 million worth of revenues, with a good performance across all divisions, including the MVNO activities and the SFR FTTH venture. Media revenues grew by 9.7 percent to reach EUR 112.4 million (+14.7% in Q1).
Mobile subscriber growth remained healthy, while continuing to weaken quarter-on-quarter, with 105,000 B2C postpaid net additions since March across France and the overseas territories (+117,000 in Q1 and +220,000 in Q2 2018). The B2C fixed base increased to 6.27 million when excluding subscribers to OTT services, up by 31,000 since March (+28,000 in Q1 and +13,000 in Q2 2018). Out of this total, fibre-based subscriptions rose by 64,000 in the quarter to reach 2.70 million.
Commenting on the commercial performance, the operator said that the quarter benefitted from a market with fewer promotions, while highlighting a strong reduction in churn and calls to its call centres, compared to the year-earlier period.
Altice Europe returns to positive revenue growth, raises FCF guidance
The improved performance in France led to stronger EBITDA growth at parent Altice Europe. Adjusted EBITDA rose by 9.8 percent year-on-year to EUR 1.43 billion (+4.1% in Q1), with revenues increasing to EUR 3.59 billion (+3.8% from -0.1% in Q1). Altice International, including the subsidiaries in Portugal, Israel and Dominican Republic, remained in negative territory, as adjusted EBITDA fell 2.4 percent to EUR 393.0 million, despite a 3.6 percent rise in revenues (EUR 1.01 billion).
For the full year, Altice Europe has raised its objective for operating free cash flow growth to around 15 percent, up from 10 percent previously (excluding Altice TV). It also reiterated its plans to deleverage its balance sheet, confirming a target of four times net debt to adjusted EBITDA (4.25x) within 20 months for its telecom operations grouped under the holding company Altice Luxembourg.
