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MarketScreener Homepage  >  Equities  >  Euronext Amsterdam  >  Altice Europe N.V.    ATC   NL0011333752

ALTICE EUROPE N.V.

(ATC)
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Altice Europe N : International - Q3 2020 MD&A

11/25/2020 | 04:29pm EST

MANAGEMENT'S DISCUSSION AND ANALYSIS

ALTICE INTERNATIONAL S.à r.l

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020

1

Table of contents

Chapter

Page

1

Overview

3

2

Strategy and performance

9

3

Basis of presentation

10

4

Group financial review

11

5

Revenue

15

6

Adjusted EBITDA

18

7

Operating profit of the Group

20

8

Result of the Group - items below operating expenses

21

9

Liquidity and capital resources

23

10

Capital Expenditures

25

11

Key operating measures

26

12

Other disclosures

27

13

Key Statement of Income items

28

2

1 OVERVIEW

1.1 Overview of the Group's business

The Group is a multinational group operating across two sectors: (i) telecom (broadband and mobile communications) and (ii) content and media. The Group operates in Portugal, Israel and the Dominican Republic. The Group also has a global presence through its online advertising business Teads. The parent company of the Group is Altice International S.à r.l. (the "Company").

The direct controlling shareholder of the Company is Altice Luxembourg S.A. ("Altice Luxembourg"), which holds 100% of the share capital of the Company, and is itself indirectly controlled by Altice Europe N.V. ("Altice Europe").

The Group had expanded internationally in previous years through several acquisitions of telecommunications businesses, including MEO in Portugal; HOT in Israel; and Orange Dominicana and Tricom in the Dominican Republic. The Group's acquisition strategy has allowed it to target cable, FTTH or mobile operators with what it believes to be high-quality networks in markets the Group finds attractive from an economic, competitive and regulatory perspective. Furthermore, the Group is focused on growing its businesses by focusing on cost optimization, increasing economies of scale and operational synergies and improving quality of its network and services.

As part of its innovative strategy, the Group is focusing on investment in its proprietary best-in-class infrastructure, both in fibre and mobile, commensurate with the Group's position as a number one or number two operator in each market. The Group continues to improve its competitiveness in fixed-mobile convergence and maintains its focus on improving customer experience, reflected in a sustained commercial momentum achieved in 2019.

Teads, the digital advertising business acquired in 2017, continues to be a leading player in its space, empowering the most renowned publishers in the world to connect to an audience of 1.5 billion people every month.

On September 11, 2020, Altice Europe and Next Private B.V. (the "Offeror"), a direct subsidiary of Next Alt, jointly announced that a conditional agreement had been reached on a recommended public offer (the "Offer") to be made by the Offeror for all common shares A and common shares B in the capital of Altice Europe for €4.11 in cash per share (cum dividend). This represents a total consideration of approximately €2.5 billion. Following the Offer, the Offeror wishes to delist Altice Europe. On November 24, 2020, the Offer was launched.

1.2 Products, services and brands

Through its various Group companies, the Group provides fixed services, mobile telephony services and media and advertising services to residential and business customers in all the geographies in which it operates. In addition, the Group offers a variety of wholesale and other services across its footprint. The Group also invests in specific content to supplement and enrich the services the Group provides.

The Group's fixed services (high-qualitypay-TV, broadband Internet and fixed-line telephony) are mainly provided over its proprietary fibre- and cable-based network infrastructure which are either FTTH, FTTB, DOCSIS 3.1 or DOCSIS 3.0 enabled, offering download speeds of between 30 Mbps and 10 Gbps depending on geography. On a blended basis, as of September 30, 2020, the Group's high-speed broadband services passed 8.3 million fibre/cable homes, with 2.3 million fibre unique customers. The Group offers xDSL/DSL/DTH services, with 3.0 million residential fixed unique customers as of September 30, 2020. The Group also offers mobile services in the geographies in which it operates, through 2G, 3G and 4G Long-Term-Evolution ("LTE") technology (with 1 Gbps achieved in the second quarter of 2019). On a blended basis, as of September 30, 2020, the Group had 10.0 million residential mobile subscribers (of which 4.9 million were postpaid subscribers).

The Group is focused on the convergence of fixed and mobile services by cross-selling and up-selling its offerings to further increase its multi-play penetration (except for Israel, where the regulator does not allow it). The Group's fibre and mobile technologies enable it to offer premium digital services, attractive interactive features (e.g., 'MEO Go!' offering in Portugal) and local content (e.g., through its 'HOT 3' channel in Israel) to its customers. The Group has leveraged its network advantage to drive its multi-play strategy and offer an attractive combination of content, speed and functionality. The Group offers to its residential customers bundled double- and triple-play fixed services, which comprises paying for a combination of TV, broadband Internet access and fixed-line telephony services together with

3

customer premise equipment at what the Group believes are attractive prices. The Group believes the demand for its multi-play packages is primarily driven by the inherent quality of the various products included within them, which the Group believes are among the best available in the markets in which it operates. Although the Group is convinced its products offer the best value for money and cost-savings for customers when purchased as part of multi-play packages, the Group also offers most of these services on a stand-alone basis in most of its geographies. In some markets, such as Portugal, the Group offers quad-play bundles including both fixed and mobile services.

The Group is focused on strategically developing content to complement its fixed and mobile services with high- quality content offerings on its own networks and to external partners. The Group continues to broadcast and distribute various other sports events in selected countries, including the Portuguese Liga in Portugal.

Teads is a leading digital video advertising business and distributes ads to over 1.5 billion people every month. Teads solutions combine high-quality inventory with smart uses of data, along creative artificial intelligence. This makes marketing more precise and more efficient, whilst enabling brands to deliver the optimal advertising experience personalized to the user.

The Group markets its products and services under multiple brands, including but not limited to the following brands: 'HOT' in Israel; 'MEO' and 'MOCHE' in Portugal; 'Altice' in the Dominican Republic, and, in each case, several associated trademarks.

1.3 Activities

The Group tracks the performance of its business by geography and further analyses its revenue by activity. The Group has identified the following activities: residential services, business services and media (targeted advertising).

1.3.1 Residential services

The Group offers a variety of fixed residential services, primarily as part of multi-play packages, with available offerings depending on the bandwidth capacity of its cable and fibre networks in a particular geography, which consist of FTTH, hybrid fibre coaxial ("HFC") and copper line ("xDSL").

The Group has a high-quality fibre- and cable-based network infrastructure across the geographies in which it operates. The Group has already rolled-out and secured plugs in FTTH in Portugal. The Group's fixed services (high-qualitypay-TV, broadband Internet and fixed-line telephony) are mainly provided over its proprietary fibre- and cable-based network infrastructure which are either FTTH, FTTB, DOCSIS 3.1 or DOCSIS 3.0 enabled.

Broadband Internet access and fixed-line telephony

The Group provides broadband Internet access and fixed-line telephony services across its fibre (and in certain areas xDSL) and cable footprint. Large portions of its networks that are FTTH-enabled or DOCSIS 3.1 enabled can offer download speeds of up to 10 Gbps with limited network and customer premise equipment upgrades given the existing technological capability of its networks. This technological capability can be realized with relatively low levels of capital expenditure and will enable it to better meet the needs of its residential customers who demand higher download speeds. Across Portugal, the Group is upgrading its networks for next-generation FTTH technology which will deliver more download speeds in the mid-term as well as reducing operating costs of running and maintaining its networks and services. As of September 30, 2020, the Group provides broadband Internet to 3.0 million residential customers across its geographies.

The Group's fixed-line telephony services are based on either PacketCable or Voice-over-Internet-Protocol ("VoIP") technologies. The Group offers a wide range of telephony packages and its triple-play offers tend to include flat-rate telephony packages with a significant number of minutes of use included in the price. The Group provides national and international connectivity to its customers either through its own interconnection capabilities or through its partners. The Group continues to phase out stand-alone telephony packages as its strategy is to offer fixed-line telephony as an add-on product in its multi-play packages.

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Altice Europe NV published this content on 25 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 November 2020 21:28:00 UTC


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Financials
Sales 2020 14 984 M 18 093 M 18 093 M
Net income 2020 -203 M -245 M -245 M
Net Debt 2020 31 405 M 37 921 M 37 921 M
P/E ratio 2020 -45,7x
Yield 2020 -
Capitalization 6 494 M 7 852 M 7 842 M
EV / Sales 2020 2,53x
EV / Sales 2021 2,41x
Nbr of Employees 45 409
Free-Float 46,0%
Chart ALTICE EUROPE N.V.
Duration : Period :
Altice Europe N.V. Technical Analysis Chart | ATC | NL0011333752 | MarketScreener
Technical analysis trends ALTICE EUROPE N.V.
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 14
Average target price 4,82 €
Last Close Price 5,34 €
Spread / Highest target 82,7%
Spread / Average Target -9,68%
Spread / Lowest Target -25,0%
EPS Revisions
Managers and Directors
NameTitle
Alain Phillippe Romain Weill Chief Executive Officer & Executive Director
Patrick Drahi President & Executive Director
Jurgen van Breukelen Chairman
Armando Pereira Chief Operating Officer
Malo Pascal Jean-Pierre Corbin Chief Financial Officer
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