EUR 8824.00 For Business Accounts Only

Iliad Q1 25: Solid results, but focus on M&A in Italy and France

Summary: Iliad has had a solid quarter overall, but French SR trends are clearly being impacted by the weakness in mobile pricing, and although Italy is performing OK, we do not believe Iliad when they say they don’t need M&A in Italy (as they did on this Q1 call), as we value Italy at a negative NPV including the cost of spectrum renewal. SFR is the only French telco yet to report; in terms of a read-across: The IFER tax (that knocked c7pp off EBITDA growth for Iliad this quarter) will not impact SFR as much, as Iliad hada rebate period unwind; the KPI read is positive, as SFR suggested at its Q4s, but probable slowing market trends will impact the SFR SR result. Iliad repeated the line that they think SFR would have to be broken up to get anti-trust approval for French M&A, which we think is their way of trying to muscle in on the deal; we remain unconvinced that SFR does need to be broken up, and outlined our views on French M&A in this recent report. We remain of the view that a deal is more likely than not to happen this year.