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    ILD   FR0004035913

ILIAD

(ILD)
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Iliad : H1 2021 Management Report & Analysis

08/05/2021 | 02:16am EDT

Société anonyme. Share capital: €14,901,666

Registered office: 16, rue de la Ville l'Evêque - 75008

Paris, France

Registered in Paris under no. 342 376 332

ANALYSIS OF THE GROUP'S BUSINESS AND RESULTS

KEY CONSOLIDATED FINANCIAL DATA

In € millions

H1 2021

H1 2020

INCOME STATEMENT

Total revenues

3,722

2,784

Services revenues

3,478

2,688

EBITDAaL

1,398

876

Profit from ordinary activities

579

218

Profit for the period

239

208

Profit for the period attributable to owners of the Company

243

208

BALANCE SHEET

Non-current assets

18,938

14,505

Current assets

4,530

2,583

Of which cash and cash equivalents

1,604

1,003

Total assets

23,469

17,088

Total equity

5,565

5,532

Non-current liabilities

12,237

7,766

Current liabilities

5,666

3,790

Total equity and liabilities

23,469

17,088

CASH FLOWS

Cash flows from operations

1,505

1,125

Right-of-use assets and interest expense on lease liabilities - IFRS 16 impact

(414)

(363)

Capital expenditure - France1

(771)

(622)

Capital expenditure - Italy1

(201)

(223)

Capital expenditure - Poland1

(64)

-

Capital expenditure - frequencies2

(46)

(2)

Net change in cash and cash equivalents - Group (excluding change in net

588

(109)

debt and dividends)

Dividends

(176)

-

Net debt

7,380

3,733

  1. Excluding payments for frequencies
  2. France (H1 2021: €6 million; H1 2020: €1 million) and Italy (H1 2021: €39 million; H1 2020: €1 million).

2

1 OVERVIEW

The iliad Group (the "Group") is a leading electronic communications player in France, Italy and Poland, with 43.4 million subscribers3, €6.8 billion in revenues in the last twelve months, and more than 15,000 employees.

Since it was founded over 20 years ago, the Group has experienced very strong growth in France, with numerous technological and commercial developments. It has gone from being a fixed narrowband Internet service provider to an integrated fixed and mobile ultra-fast operator, by clearly focusing on deploying the latest technologies and proposing straightforward commercial offerings.

In 2018, the Group expanded its geographic reach to Italy, where it captured market share of more than 10% in less than two years. Then in 2020, it continued its expansion in Europe by acquiring Play, Poland's leading mobile telecom operator.

iliad S.A. is the parent company of the iliad Group, which operates under the trade names of Free in France, iliad in Italy and Play in Poland. iliad S.A. has been listed on Euronext Paris (ILD ticker symbol) since 2004.

Following its acquisition of Play in Poland in late 2020, the Group now has three separate geographic segments: France, Italy and Poland, with France split out between B2C and B2B.

The following key performance indicators are used in this management report:

EBITDAaL: profit from ordinary activities before depreciation, amortization and impairment of property, plant and equipment and intangible assets and the impact of share-based payment expense.

Revenues billed to subscribers: revenues generated from the sale of services to subscribers.

1.1 Breakdown of revenues

France B2C

Fixed offerings (Broadband and Ultra-Fast Broadband)

In line with the sales and marketing approach it has followed for the past two years, in the first half of 2021 the Group pursued its rational pricing and promotions policy, while continuing to focus on (i) differentiation through innovation, with the launch of the Freebox Pop, and (ii) ongoing investment in Free Fiber, which has cemented the Group's position as France's leading alternative Fiber operator.

3 Including 15.4 million registered subscribers in Poland.

3

At June 30, 2021, the Group had four main fixed offerings (with two versions of the Freebox Delta):

Freebox

: Included in the package

Freebox mini 4K

Revolution

Freebox Pop

Freebox Delta

INTERNET

(5 GB EPON

(10 GB

Optical fiber

Fiber)

EPON Fiber)

xDSL+4G

MONTHLY PRICE

First 12 months

€14.99

€19.99

€29.99

€39.99(1)

After 12 months

€34.99

€44.99

€39.99

€49.99(1)

(1) The Freebox Delta S still costs €39.99 a month after the first year.

Depending on the eligibility of the subscriber's line, Free's offers are compatible with the following Broadband and Ultra-Fast Broadband technologies:

  • Fiber (FTTH), which gives access to Ultra-Fast Broadband.
  • ADSL, which allows subscribers to access the Internet at a speed of at least 2 Mbps and up to 22.4 Mbps in areas where the local loop is unbundled, and 17.6 Mbps in non-unbundled areas, depending online eligibility (IP speeds).
  • VDSL2, which gives speeds of up to 100 Mbps download and 40 Mbps upload for subscribers in unbundled areas and with short lines.
  • 4G+, via a 4G+ Box which costs €29.99 a month and provides easy access to ultra-fast Internet for people located in areas that are not eligible for Fiber or where fixed-line Internet speeds are low but there is good 4G+ coverage. Similarly, the Freebox Delta has an xDSL/4G function that enables the xDSL signal to be bonded with a 4G signal in areas with low speeds, so subscribers can have up to 10 times faster speeds than when using ADSL alone.

The Group's offers include some or all of the following services, depending on the plan subscribers choose:

  • Telephony: all subscribers have access to a telephone service under which they can make calls through their Freebox to fixed numbers in Metropolitan France (apart from short numbers and special numbers), as well as to fixed lines in over 110 destinations outside Metropolitan France depending on the terms of their plan. Additionally, various Group offers include free calls or packaged deals for calls to mobile numbers in Metropolitan France.
  • Free proposes the largest audiovisual offering in the market, enabling its subscribers to access a television service comprising some 600 channels in all. Freebox TV has 220 channels in its basic package, with another 60 available through the TV by CANAL Panorama package, 30 of which are exclusive to Freebox TV. Around 240 high definition channels are also available, as well as a catch-upTV service covering more than 100 channels.

Free offers numerous value-added services including Freebox Replay (its catch-up

TV service), the highlights of the Ligue 1 Uber Eats championship (included in the Pop and Delta plans), video on demand (VOD), subscription video on demand, such as Netflix, Amazon Premium (S- VOD, included in the Delta plan), subscription to pay-TV packages and channels (Canal+, beIN Sports, etc.) and video games. The TV by CANAL offer gives subscribers access to over 100 channels on replay and 8,000 items of on-demand content on all types of screen (smartphone, tablet, Xbox 360, Xbox One and PC/Mac). The Famille by CANAL package gives access to the TV by CANAL offer, except for the sports channels, to subscribers who have a Freebox Crystal (which stopped being marketed at end-2020) or a Freebox mini 4K.

4

  • Free proposes new technology usages for households, such as unlimited access to newspapers and magazines via LeKiosk (Freebox Delta), voice-controllingtheir box using OK Freebox and Alexa (Freebox Delta) and Google assistant (Freebox mini 4K), and adding a smart-homehub (Freebox Delta and Freebox Delta S) as well as a security pack for home surveillance. The Freebox Pop, launched in July 2020, allows subscribers to significantly improve WiFi reception in their homes thanks to the inclusion of a smart repeater which automatically connects up to the Freebox.
  • Hosting services, which correspond to (i) providing dedicated servers to private individuals who wish to secure their data, and (ii) website hosting and the purchase/resale of domain names (services targeted mainly at private individuals and very small businesses that have relatively low data storage requirements). Hosting services are billed based on a monthly or annual subscription depending on the type of offer.

Mobile offerings

In the first six months of 2021, the Group continued to focus on improving its subscriber mix by increasing the proportion of subscribers on the Free Mobile Unlimited 4G/5G Plan. This notably entailed keeping the intermediate plan first launched in 2018, which offers a discounted price for 12 months and then automatically switches to the Free Mobile Unlimited 4G Plan (and, since December 15, 2020, the 4G/5G Plan). The price of this intermediate offering varies depending on the period, and in the first half of 2021 it ranged between €9.99 and €11.99 per month. At the same time, the Group pursued its proactive campaigns to migrate subscribers on the €2 plan to the Free Mobile Unlimited 4G/5G Plan.

Sales of devices (mobile phones and Delta Players)

  • Mobile phones

The Group proposes a selection of the latest mobile phones on the market. With a view to being as transparent as possible, Free offers phones separately from its subscriptions, which means that subscribers can opt for whichever plan and phone they prefer, or can choose not to purchase a phone at all. Several different solutions are available: (i) buying a phone and paying for it upfront; (ii) buying a phone and spreading its cost (up to 24 installments at no extra cost), or (iii) renting a phone (whereby the subscriber makes an initial payment and then a pays a monthly rental fee, which varies depends on the model, and at the end of the rental period has the choice between returning their phone and getting a latest-generation phone under a new rental agreement, or extending the rental period for their existing phone).

In all cases, the Group recognizes the corresponding revenue when the phone is received by the subscriber.

  • Delta Players

As part of the Freebox Delta offering, subscribers become owners of their Delta Player, which is billed at a price of €480. Subscribers can choose the payment method they prefer from among the options available (cash payment or 90-day payment or 48-month installments).

In all cases, the Group recognizes the corresponding revenue when the Player is received by the subscriber.

Italy

The Group has enjoyed resounding commercial success in Italy since it first launched its mobile business there on May 29, 2018. It ended the first half of 2021 with 7.8 million subscribers, representing more than 10% of the Italian mobile market (excluding M2M).

At end-June 2021, iliad Italia had three mobile plans: (i) a voice-based plan costing €4.99/month - the lowest price in the market for this segment - offering unlimited calls in Italy and to over 60 international destinations, (ii) a €7.99/month plan including unlimited calls and 80 GB/month of 3G/4G/4G+ mobile

5

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

Disclaimer

Iliad SA published this content on 05 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2021 06:15:07 UTC.


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Sales 2020 5 871 M 6 812 M 6 812 M
Net income 2020 427 M 495 M 495 M
Net Debt 2020 11 179 M 12 971 M 12 971 M
P/E ratio 2020 23,3x
Yield 2020 1,78%
Capitalization 10 662 M 12 369 M 12 371 M
EV / Sales 2019 2,48x
EV / Sales 2020 3,58x
Nbr of Employees 15 100
Free-Float 99,1%
Chart ILIAD
Duration : Period :
Iliad Technical Analysis Chart | ILD | FR0004035913 | MarketScreener
Income Statement Evolution
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Nicolas Emmanuel Jaeger Group Chief Financial Officer & Senior VP
Xavier B. Niel Chairman
Virginie Calmels Independent Non-Executive Director
Bertile Burel Independent Non-Executive Director
CÚline Lazorthes Independent Non-Executive Director
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