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- Russell Waller
Feedback from call with Orange IR on French pricing - back book increa...
We hosted a call with Orange IR to discuss the pricing environment. Watch a replay of the call HERE. We provide a summary of the call in this short piece. Interestingly, it looks as though SFR has lifted some of its back book prices for some of its customers.
- Chris Hoare
Sub-Saharan African Telecoms Solid top line, decent overall performan...
Q1 was a solid quarter for the Sub-Saharan African operators, especially from a top line perspective. Airtel Africa continued to outperform peers overall. We continue to think that fundamentals for AAF and MTN are strong and deserve more attention. Valuations are compelling too.
- Russell Waller
- Paul Charpentier
- Thomas Hynes
Have payments hit bottom yet?
In October 2023, we adopted a negative view on the payment sector, citing commoditisation risks and a bleak macroeconomic outlook as threats to the companies in our coverage. While commoditisation remains a concern, we are now more optimistic about the macro environment. To answer the initial quest
- Paul Charpentier
Have payments hit the bottom yet ? - Worldline
In October 2023, we adopted a negative view on the payment sector, citing commoditization risks and a bleak macroeconomic outlook as threats to the companies in our coverage. While commoditization remains a concern, we are now more optimistic about the macro. To answer the initial question, we beli
- Russell Waller
Orange (Buy, TP: €14, +47%) Altice France (SFR) - Most preferred Ilia...
There has been a lot of focus on the recent change in mobile price points from SFR/Bouygues. Orange has underperformed the CAC40 by c10% over the last 10 days. Most commentary we have seen, seems to worry that the move by SFR will start a new price war at the high end. We think that is probably not going to happen, and explain why in this report. That is good news for Orange, that looks oversold in our view.
- Paul Charpentier
Worldline - not as weak as expected, but too early to jump in
Worldline reported 2.5% organic growth in Q1 2024, weak in absolute terms but better than anticipated by the market and us. We wait for a clear uptick in momentum and the confirmation of an improved profitability to turn positive on the stock; which is arguably far from expensive at 5.1x EV/NTM EBI
- Russell Waller
Orange (Buy, TP: €14, +28%) Q1 24: Good results; French KPIs not a w...
Orange has reported a solid set of results, with EBITDA c+0.4% ahead of consensus. Guidance has all been reiterated, and cost synergy numbers for Spain have been lifted (with new additional revenue synergy numbers given, that are based on intra-company churn switching data, which makes it plausible some could be delivered in our view).
- Aurelien Deside
- Paul Charpentier
Worldline - results and guidance in line
Worldline reported Q4 2023 results this morning, a touch below expectations on revenue but better than expected on profitability and FCF generation. As a reminder, the company had to cut its FY guidance in Q3 2023 to take into account the impact of the slowdown in consumer spending and the terminat
- James Ratzer
- Russell Waller
Orange Masmovil approval: A good outcome. A compliant EC? More M&A to ...
The EC has approved the Orange Masmovil merger (HERE) with remedies unchanged from the announcement in early December (HERE). We continue to be of the view that the remedy package is a good one for the operators in Spain, and indeed for the likelihood of further M&A in Europe.
- Russell Waller
Orange (Buy, TP: €14, +30%) Q4 23: Good results and guidance; positi...
Orange has reported a very solid set of results, with EBITDA c1.5% ahead of consensus for Q4. France guidance for 2024 EBITDA has been lifted, and overall Group guidance is in-line at EBITDA and 3% ahead at OCF. Ex energy, Group EBITDA is growing at >4%. Comments on the call about the Digi remedy package are very positive for European in-market consolidation in our view.
- Russell Waller
- TMT Team
- Aurelien Deside
- Paul Charpentier
Most bad news priced in
In a sector note we review the macroeconomic and sector-specific headwinds faced by the payment industry. We also take the opportunity to revise our numbers on Worldline. We turn Neutral (from Sell) on the French name as the October profit warning reset expectations to a reasonable level. Our PT mo
- Aurelien Deside
- Paul Charpentier
Macro headwinds keep blowing
In this paper, we review the macroeconomic and sector-specific headwinds faced by the payment industry. We also take the opportunity to revise our numbers on Nexi and Worldline. We upgrade to Neutral (from Sell) on Worldline, as the October profit warning did reset expectations to a reasonable leve
- Russell Waller
Remedy package signed in Spain: Not as bad as the headline would sugge...
The decision that we have all been waiting for has finally arrived. Orange Masmovil and Digi have reached an agreement for a remedy package in Spain. We provide our thoughts on the package in this piece. The headline “Digi buying spectrum” is bad, but we think that the reality and specifics of the package are nowhere near as bad as the headline would suggest.
- Chris Hoare
Sub-Saharan African Telecoms Decent quarter in a challenging macro en...
Q3 was a decent quarter for Sub-Saharan African (SSA) operators. Fundamentals remain strong. We have updated forecasts post Q3 results, and our recommendations and target prices remain unchanged, except for Safaricom. AAF remains our preferred play in Africa.
- James Ratzer
The biggest decision you haven't heard of
While the Masmovil-Orange decision is probably the biggest upcoming decision you have heard of, the biggest decision for the European telecoms industry that most people haven’t heard of, is coming up next month at the World Radio Congress : the longer-term use for the 6.4-7.1GHz band in Europe.
- Aurelien Deside
- Paul Charpentier
Miss and cut
Worldline has reported disappointing Q3 2023 revenue missing consensus estimates by 2.5%. Acknowledging the slowdown in the economy, the group has also reduced its FY 2023e guidance to +6-7%, implying a harsh Q4 2023e. We have cut our expectations to the low end of the new guidance range, and slash
- Russell Waller
Orange (Buy, TP: €14.0, +30%) Q3 23: Good delivery, EBITDA growth >3%...
Orange has reported a solid set of results, with results almost exactly in-line with consensus expectations at revenue and EBITDA. All guidance has been reiterated. In that regard, these results will not set the pulse racing but solid delivery is something we admire. Ex energy and FX, EBITDA is growing >3% y/y, which is pretty good, and means Orange is well on the way to reach medium-term EBITDA and FCF guidance as well as the nearer-term goals.
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