Dutch operator VodafoneZiggo reported annual results slightly ahead of its forecast. The company said it expects to complete the integration of Vodagone and Ziggo this year, a year earlier than planned, with 85 percent of the synergies already realised.
After slightly exceeding its target for operating cash flow in 2019 with growth of 4 percent, the company forecast growth of 2-3 percent this year. Capex is expected to reach 19-21 percent of revenue, after 20 percent in 2019. The outlook includes integration costs of EUR 35 million and integration capex of EUR 80 million.
The pay-out to shareholders is expected to drop to EUR 400-500 million in 2020, after EUR 585 million for 2019. This does not take into account the expected spectrum auction and costs for launching wholesale access on the cable network. A court ruling on the latter has again been delayed, from a previous expected date of 18 February, the company said.
Customer growth in broadband and postpaid, shift to 2P and FMC
In the fixed market, VodafoneZiggo added 12,500 homes passed for a total of 7.25 million. The number of customers fell by 3,300 to 3.88 million, leading to a small drop in the network penetration to 53.4 percent. The number of RGUs dropped by 13,900 to 9.64 million, for a stable result of 2.49 services per customer.
ARPU per customer rose to EUR 49 from EUR 47 a year ago. Consumer ARPU was up 5 percent, SOHO stable at EUR 58 and small business up 1 percent to EUR 83.
Ziggo lost only 3,600 TV subscribers in the quarter, including 2,800 basic and 800 enhanced video. In total it had 3.87 million TV customers at year-end, of which 12.7 percent were on the basic package.
Broadband growth was relatively strong with net adds of 13,100 for a total of 3.36 million. In telephony, it lost 23,400 customers to 2.41 million.
In the mobile market, Vodafone added 45,700 customers to 5.06 million. Postpaid grew by 75,500 to 4.48 million, and prepaid was down by 29,800 to 581,000. This took the share of prepaid to 11.5 percent.
Postpaid ARPU fell sharply, by 13 percent to EUR 19 for consumers and by 18 percent to EUR 18 for business.
On the multiplay market, the operator showed a further shift from single- and triple-play households to double-plays. Single plays fell to 13 percent of households, 2P rose to 25.2 percent, and the 3P dropped to 61.8 percent.
The number of households taking both fixed and mobile services rose by 49,000 in the quarter to 1.35 million, or 40 percent of all broadband subscribers. The number of postpaid lines linked to FMC accounts increased by 88,000 to 2.08 million, or 46.4 percent of the postpaid base. That's equal to an average 1.55 Sims per household.
Record consumer cable revenue growth, consumer mobile returns to growth
The performance resulted in quarterly revenues up 3.0 percent to EUR 1.02 billion. Revenue growth was led by consumer cable, at a record 3.0 percent, while mobile service revenue fell 8.7 percent. Including 41 percent growth in equipment sales, total consumer mobile revenues were up 3.3 percent, the first growth in a year. Business mobile revenue still fell 1.4 percent, including a 9.3 percent drop in service revenue.
Operating cash flow increased 9.6 percent to EUR 457 million. The operating result was still a loss of EUR 10.1 million due to depreciation. Capex totaled EUR 188 million or 18.4 percent of revenue.
