reports
- Jonathan Chaplin
Altice Model Update
Broadband subscriber losses in 2Q24 will likely be better than we thought previously because more of the ACP impact will be in 3Q24 than we thought previously (full year estimate remains unchanged). We also lowered revenue and EBITDA slightly. The company needs to stabilize EBITDA and reduce leverage. Progress on the first is slow and the second won’t be easy as it seems debtholders have organized. We remain on the sidelines.
- Jonathan Chaplin
1Q24 Broadband Trends
In this iteration of “Broadband Trends” we explore the drivers of the slowdown in the broadband market and the path ahead over the next couple of quarters as the industry works through the unwinding of ACP. We also reprise our work on the competitive positioning of the various operators based on relative NPS scores.
- 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.
- Russell Waller
- Russell Waller
- Russell Waller
- Russell Waller
European Telecoms High Yield review Setting out our key preferences
We published our Global High Yield Quarterly this week – HERE. For a European perspective, we provide a summary of our thoughts and ideas on the European HY issuers in this piece, which takes excerpts from the Global HYQ and adds to it, including asset cover and a summary of our most preferred and least preferred names.
- Russell Waller
- Jonathan Chaplin
Broadband market growth slower in 1Q24
Broadband industry growth slowed in 4Q23. We wondered, exiting the quarter, whether growth would level off or slow further in 1Q24. Based on the data we have collected so far, it appears that growth has slowed further, and possibly quite materially. We suspect slower growth will impact all operators, although for fiber, it should be partly offset by footprint expansion.
- Russell Waller
- Russell Waller
Altice International Q4 23: Good numbers, all disposal options seem ...
Altice International reported a solid set of results today. The war in Israel has impacted the Israeli numbers, but broadly as expected. Portugal continues to perform very nicely, and overall the guidance suggests that ATCI, like NOS (read HERE), see minimal impact from Digi in 2024. The guidance looks sensible (conservative), but German construction revenue could be a big delta to numbers, and the impact here remains uncertain.
- Russell Waller
Billionaires compared Is it right that Xavier Niel businesses have t...
The European Telco landscape is dominated by three high profile billionaires. Patrick Drahi, John Malone, and Xavier Niel. They all have multiple debt silos, and large empires, but the bonds trade at very different spreads. In this note, we look at why that might be the case, and in particular, if the Niel businesses deserve to trade at tighter spreads. We think they do, which means that Xavier Niel should be able to continue to raise funds cheaply (albeit the Iliad spreads widened after the Tel...
- Russell Waller
NOS (Neutral, TP: €4.0, +22%) Q4 23: Good EBITDA beat, +26% DPS hike (...
NOS has reported yet another very good set of numbers, with Telco EBITDA +3.0% ahead of consensus expectations and Telco EBITDA growth now at +11.8% y/y. NOS has lifted the ordinary dividend by 26% (100% payout), giving it a 10.6% yield for 2024 (with the chance of exceptional returns as well).
- Russell Waller
- 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
Altice France Does Teads hold the key to delevering?
A break-up of Altice International, is, we are told, option A for delevering at Altice France. According to press reports however, there is a gap between the offers made for Altice Portugal and the amount that Patrick Drahi wants (€7bn of proceeds wanted vs €5bn-€6bn offered); because Altice International debt will have to be repaid in the event of a sale of Portugal, €5bn of proceeds might not be enough to persuade Drahi to sell, as the amount of cash that could be up-streamed might be too smal...
- Russell Waller
Altice France Does Teads hold the key to delevering?
A break-up of Altice International, is, we are told, option A for delevering at Altice France. According to press reports however, there is a gap between the offers made for Altice Portugal and the amount that Patrick Drahi wants (€7bn of proceeds wanted vs €5bn-€6bn offered); because Altice International debt will have to be repaid in the event of a sale of Portugal, €5bn of proceeds might not be enough to persuade Drahi to sell, as the amount of cash that could be up-streamed might be too smal...
- Russell Waller
- Russell Waller
Altice How much is Sotheby's worth?
Patrick Drahi’s net worth is an important topic for all three Altice silo bondholders. We first wrote about that HERE. We update those thoughts in this report, based on the recent financial results at Sotheby’s. We evaluate performance since Sotheby’s was taken private and give our thoughts on valuation as well.
- 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.
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