▪This document has been prepared by Iliad S.A. (the "Company") and is being furnished to you solely for your information and personal use.▪This presentation includes only summary information and does not purport to be comprehensive.
▪The information contained in this presentation has not been subject to independent verification. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein.
▪None of Iliad S.A., its affiliates or its advisors, nor any representatives of such persons, shall have any liability whatsoever (in negligence or otherwise) for any loss arising from any use of this document or its contents or otherwise arising in connection with this document or any other information or material discussed.
▪This presentation containsforward-lookingstatements relating to the business, financial performance and results of Iliad S.A. These statements are based on current beliefs, expectations or assumptions and involve unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those described in such statements. Factors that could cause such differences in actual results, performance or events include changes in demand and technology, as well as the ability of Iliad S.A. to effectively implement its strategy.
▪Anyforward-lookingstatements contained in this presentation speak only as of the date of this presentation. Iliad S.A. expressly disclaims any obligation or undertaking to update or revise anyforward-lookingstatements contained in this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based unless so required by applicable law
2
2019 REVIEW
THOMAS REYNAUD - GROUP CEO
FY 2019 HIGHLIGHTS
1
DELIVERINGTRANSFORMATION PLAN IS
2
ITALYSTRONG PERFORMANCE IN
3
ADAPTING THE GROUPE STRUCTURE
Iliadnet adds leader for Fibre in 2019
Commercial recovery in Broadband and Mobile
Acceleration of French mobile revenue trend
Improved network quality with extensive rollouts and 700MHz upgrade
France revenue rebound:+3% in 2019, +6.0% in Q4
Sustained commercial momentum:>2.4 million net adds in 2019, 5.3 million subscribers at end-2019
Fast network rollout:>4,000 equipped sites at end-2019
Preferred telecom brand in Italy(1
Entering the B2B market via the acquisition of Jaguar Network
Tower deal with Cellnex in France and Italy:€2bngross proceeds
Acceleration ofFTTH rollout thanks to our partnership with Infravia
Stronger balance sheet
(1) PHD Tracking, étude commandée par Iliad
4
LEARNINGS FROM THE 2019 CMD
Our CMD in May 2019 showcased our growth plan, the quality of our assets, how we have adapted our business. Our 2019 results are a testimony to the hard work and team effort put in.
5
FRANCE
FIBER MARKETED TO NEARLY HALF OF FRENCH HOUSEHOLDS
FIBER CONNECTIBLE SOCKETS (000s)
+4,300
13,900
+3,400
5,000
Very dense areas
9,600
3,900
6,200
2,500
8,900 Medium and low dense areas
5,700
3,700
2017
2018
2019
Contracts signed with 23 PINs, 1.2 million connectable sockets in low dense areas
15 million threshold reached in early March 2020
7
FIBER:
OUR FTTH NETWORK IS MAKING A DIFFERENCE
FTTH: ILIAD BEST PERFORMER IN UP/DOWN SPEED (1)
CUSTOMER CARE SCORES IN BROADBAND (2)
0
50
100 150Average200download250 bitrate300 350
400 450
500
3.3/5
3.4/5
3.2/5
Free
460.2 Mb/s
2.7/5
SFR
404.4 Mb/s
Orange
371.4 Mb/s
SFR
Bouygues
Orange
Free
Telecom
Bouygues Telecom
368.3 Mb/s
Source: ARCEP
Average upload bitrate
CUSTOMER SATISFACTION SCORES IN BROADBAND (2)
Free
289.3 Mb/s
7.5/10
7.6/10
7.7/10
7.0/10
Bouygues Telecom
266.5 Mb/s
Orange
263.8 Mb/s
SFR
251.3 Mb/s
SFR
Bouygues
Free
Orange
Telecom
Source: ARCEP
(1)
nPerf 2019 - January 1, 2019 -> December 31, 2019
8
(2)
ARCEP's annual scorecard from its platform « J'alerte l'ARCEP », published on February 4, 2020
FIBER:
OUR FTTH STRATEGY IS DELIVERING ON ITS PROMISE
FTTH NET ADDITIONS
777,000
745,000
427,000
313,000
Free
Orange
Bouygues Telecom
SFR & Others
Our target of > 500k FTTH net adds for 2019 was reached as early as Q3 19
The majority of our FTTH gross adds in 2019 are new customers
FTTH PENETRATION RATE
+12 points
27.2%
+7 points
15.3%
8.5%
2017
2018
2019
9
FIBER:
ON TRACK TO REACH OUR 2024 TARGET
FTTH CUSTOMER BASE (000s)
4,500
+777
1,760
+427
+246
983
+110
556
200
310
2015
2016
2017
2018
2019
2024
The 2 million FTTH subscribers target will be reached in a few weeks
We are well on track to reach our 2024 target
10
BROADBAND:
COMMERCIAL RECOVERY IS CONFIRMED
BROADBAND NET ADDS
32 32
-14
-16
-15
-19
-28
-32
Q1 18
Q2 18
Q3 18
Q4 18
Q1 19
Q2 19
Q3 19
Q4 19
NPS IMPROVEMENT IN BROADBAND (1)
9
-1
March 2019
February 2020
Second consecutive quarter of positive net adds thanks to FTTH momentum
FTTH churn 4 points lower than xDSL
Clear improvement in NPS
(1) IFOP survey commissioned by Iliad - February 2020
11
MOBILE:
FULL STEAM AHEAD ON NETWORK ROLLOUT
MOBILE NETWORK ROLL-OUT(1)
17,046
14,511
12,157
8,497
2016
2017
2018
2019
NUMBER OF NEW ACTIVE MOBILE SITES
(ALL TECHNOLOGIES) (2)
2,535
~ 1,500
~ 850
~ 400
Free
Telco A
Telco B
Telco C
Our 2019 mobile rollout exceeded our initial plans, 2.5k new sites vs. 2.0k targeted
Coverage of c.98% of the population in 3G and c.96% in 4G - a great achievement in only 8 years
(1)
ANFR
12
(2)
Iliad estimate, based on Open Data figures provided by ANFR
MOBILE:
ADDING QUALITY TO THE EXTENDED NETWORK
MOBILE NETWORK ROLLOUT (1)
17,046
14,511
12,157
12,012
3,252
940
2017
2018
2019
Total sites (metropolitan France)
with 700 MHz
Upgrading our Mobile Network: >12k sites lit on 700MHz compared with the 10k guidance given at the CMD
Full release of 700MHz frequencies across France during 2019, enabling deeper coverage in densely-populated areas and a wider coverage in rural areas
Higher on-net usage is a key enabler for ARPU growth and churn reduction
(1) ANFR
13
MOBILE:
HIGH QUALITY NETWORK WITH GOOD CUSTOMER SATISFACTION
ROLLOUT AND 700MHZ UPGRADES ARE DRIVING UP MOBILE
CUSTOMER CARE SCORES - MOBILE (2)
MOBILE NPS (3)
QUALITY (1)
0
5
10
15
20
25
30
35
40
45
50
55
3.1/5
3.1/5
3.2/5
Orange
50.3 Mb/s
2.7/5
Free
43.9 Mb/s
SFR
35.8 Mb/s
Bouygues Telecom
33.0 Mb/s
SFR
Bouygues
Orange
Free
Telecom
Source: ARCEP
25
14
March 2019
February 2020
FreeN°1 alternative mobile operator for 4G download speed
Quality of the service recognized in ARCEP's latest consumer survey,N°1 alternative mobile operator for customer satisfaction
Iliad to benefit between 2021 & 2024 from additional spectrum in the 900MHz band (coverage) and the 2.1 GHz band (capacity)
nPerf 2019 - January 1, 2019 -> December 31, 2019
(2) ARCEP's annual scorecard from its platform « J'alerte l'ARCEP », published on February 4, 2020
14
IFOP survey commissioned by Iliad - February 2020
IMPROVED COMMERCIAL MOMENTUM IN MOBILE
MOBILE NET ADDITIONS
17
-18
-50
-77
-90
-94
-200
Q2 18
Q3 18
Q4 18
Q1 19
Q2 19
Q3 19
Q4 19
Good level of 4G net adds in Q4 which are traditionally lower than in Q3 due to seasonality on handset subsidies
Return to positive mobile net adds although our focus remains on 4G offers
Extended distribution network with more shops in towns with over 100k inhabitants cities is helping improving visibility
Improved momentum in Broadband / Fiber helping meet demand for convergence
15
ENABLERS OF FUTURE GROWTH
STRATEGIC PARTNERSHIP
WITH
CELLNEX
Strategic partnership with Cellnex covering 5,700 sites in France and 2,200 sites in Italy
Total consideration of€2bn
30% stake retained in the French TowerCobusiness, to benefit from future value creation
Leveraging Cellnex know-howfor maintaining sites and increasing tenancy ratio
STRATEGIC PARTNERSHIP
WITH
INFRAVIA
▪ Partnership in France with Infravia ▪ Creation of a JV ("IFT") at 49% Iliad
/ 51% InfraVia with a 100% EV of €600m
IFT will acquire Iliad's existing co- financing agreements (around 1
million existing co-financed sockets) and will co-finance the creation of new sockets and take up new co-financing tranches
B2B LAUNCH
Leveraging our network infrastructure:22 million FTTH premises by 2022, 25k mobile sites by 2024
Complete range of solutions based on ourDNA: Simplicity,
Innovation, Affordability
Proprietary cloud and hosting infrastructure (Scaleway Top 10 cloud provider in Europe)
Excellent momentum in Q4 despite very aggressive and targeted winback offers from the 2 leading competitors
(1) Market shares calculated using AGCOM Quarterly Report / Humans SIMs only / Q4 19 based on Q3 numbers for the market
18
ITALY:
ILIAD ALREADY A STRONG BRAND
NPS MOBILE B2C (1)
BRAND ADVOCACY (2)
36%
42
31%
29%
22%
22
10%
Average 2018
Average 2019
Iliad
Telco 1
Telco 2
Telco 3
Telco 4
~18 months after the launch, Iliad's brand is getting tremendous support from its customers
Good spontaneous awareness, close to TRE brand which has been active since 2003(2)
Iliad rankedN°1 in terms of Intention to Subscribe (2)
(1)
Customer experience, independent third party
19
(2)
PHD Tracking, average May 2019 - December 2019
ITALY:
STRONG YEAR FOR OUR NETWORK ROLLOUT
ACTIVE MOBILE SITES
10,000 - 12,000
around 5,000
2,062
414
838
0
13
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
2020e
2024e
Acceleration of our mobile rollout in Q4
Ambitious 2020e target of having around 5,000 active sites by the year-end
Well on track to reach our target of 10,000-12,000 active sites by 2024
20
GOVERNANCE AND CAPITAL STRUCTURE UPDATE
BOARD CHANGES
Xavier Niel appointed Chairman
Maxime Lombardini to become Vice-Chairman
2 new independent Directors:
Céline Lazorthes (Founder & CEO Leetchi)
Jacques Veyrat (President Impala SAS)
MANAGEMENT CHANGE
Shahrzad Sharvan appointed Group's Corporate Secretary
CAPITAL STRUCTURE
Post the combined operation share buyback + capital increase, Xavier Niel's stake has moved up from 52% to 71%. The backing of Iliad's founder is a strong message of confidence in our Odyssée 2024 growth plan
21
FINANCIAL REVIEW
NICOLAS JAEGER - GROUP CFO
FY 2019 GROUP - REVENUES
REVENUES (€M)
QUARTERLY REVENUES (€M)
+9.0%
+9.2%
+7.7%
5,332
4,891
427
+3.0%
1,293
1,314
Italy
125
1,203
81
96
1,201
Italy
9
France
4,768
4,912
France
1,213
1,194
1,219
Intragroup
Intragroup
-2
-6
-1
-1
2018
2019
Q1 18
Q1 19
Q2 18
Q2 19
+8.1%
1,336
1,236 109
46
1,190 1,229
-2
Q3 18
Q3 19
+11.0%
1,389
1,251 140
70
1,183 1,251
-2
-2
Q4 18
Q4 19
Group revenues / services revenues up 9% (8% excl. Jaguar Network) with Italy contributing for 12 months vs. 7 months in 2018
France back to growth in 2019, driven by the acceleration in Mobile (billed) and a return to organic growth in Fixed in Q4
Italy's strong sales momentum driving growth acceleration in H2 19
23
FY 2019 GROUP - PROFITABILITY
EBITDAaL (€M)
PROFIT (€M)
CAPEX (€M)
-5.8%
1,726
1,976
1,654
1,816
1,755
369
+5.5%
Italy
261
+3.3%
France
1,807
1,907
330
France
1,555
1,607
Italy
-52
2018
2019
2018
2019
-253
2018
2019
France EBITDAaL up 5.5%
2019 profit inflated by disposal gains on the tower deals
Capex up 9%, mainly due to the acceleration of the rollout in Italy
24
FY 2019 REVENUES
MAIN DRIVERS OF FRANCE REVENUES (€M)
QUARTERLY YOY GROWTH
2
4,912
(26)
20
138
4,768
(34)
43
2018
Fixed ex
Jaguar
Mobile
Other mobile
Equipment
Elims
2019
Jaguar
Networks
billed to
service
subscribers
Mobile billed to subscribers are the main growth driver in 2019 thanks to our 4G net adds and customer upgrades
Fixed services revenues (excl. Jaguar) improving quarter after quarter
Equipment revenues up slightly with sales of the Delta Player offsetting the decline for mobile handsets
25
FACTORS DRIVING UP ARPU
BROADBAND ARPU
-1.2%
-0.9%
+2.5%
+1.2%
32.9
32.8
32.5
32.5
32.5
32.6
32.1
31.8
Q1 18
Q1 19
Q2 18
Q2 19
Q3 18
Q3 19
Q4 18
Q4 19
MOBILE ARPU (BILLED TO SUBSCRIBERS)
+11.6%
+14.0%
+12.2%
10.6
10.6
+8.0%
10.1
9.5
9.5
9.3
9.0
8.8
Q1 18
Q1 19
Q2 18
Q2 19
Q3 18
Q3 19
Q4 18
Q4 19
Better customer mix in both Mobile & Broadband
Initial effects of front book price increases (post 1st year) for both Broadband and Mobile
Non-recurringVAT impact
26
EBITDAaL
FRANCE EBITDAaL
ACCELERATION IN H2 19
EBITDAaL Margin
37.9%
38.8%
+5.5% (1)
1,807
1,907
2018
2019
+9.1%
997
+1.7%
894
910
913
H1 18
H1 19
H2 18
H2 19
Main positive impacts: operating leverage in Mobile, lower unbundling fees and non-recurring VAT impact
Main negative impacts: higher external charges related to network expansion in Fixed and Mobile, revenue decline in Fixed, higher content costs
27
CAPEX ECONOMICS ARE IMPROVING
FTTH CONNECTION CAPEX (€M)
+61%
2018
2019
4G SITES UPGRADED TO 700MHZ
+8,800
+2,300
2018
2019
CAPEX SPENT ON FREEBOXES (€M)
+12%
2018
2019
2019 capex only slightly higher than in 2018 (+3%) despite very significant commercial and network rollouts
28
ITALY IN INVESTMENT PHASE
REVENUES (€M)
EBITDAaL (€m)
427
-28
-24
-52
+28%
+12%
-108
+21%
-144
+16%
140
124
Capex (€m)
369
261
69
97
80
109
-253
H1 18
H2 18
H1 19
H2 19
2018
2019
2018
2019
Q4 18 Q1 19 Q2 19 Q3 19 Q4 19
2018
2019
Quarter-on-quarteracceleration in Q4 driven by strong commercial momentum
Negative EBITDAaL reflecting strong commercial momentum in the ramp-up phase
Strong increase in capex reflecting our mobile rollout (2,500 newly equipped sites in 2019)
29
EQUITY FCF BRIDGE
EFCF bridge (€m)
1,907
(1,607)
A
299
(253)
D
(369)
B
1,520
682
(252)
430
C
(323) (106)(69)
(340)
France
France Capex France OCF Italy EBITDAaL Italy Capex
Group OCF
WCR
Net interest
Taxes
Other (incl.
FCF pre
Spectrum
FCF post
EBITDAaL
(incl. leases)
Cellnex
spectrum
(Fr + It)
spectrum
proceeds)
France OCF up €47m YoY with EBITDAaL up €99m and Capex up €52m
Negative working capital contribution due to Italian VAT timing
Cash taxes higher than P&L tax (€m) due to Italian losses
Net proceeds from the tower deal, cash out from Jaguar Network acquisition and share buybacks
30
COMFORTABLE MATURITY PROFILE AND LEVERAGE UNDER CONTROL
Group net debt (€m) and leverage (xEBITDAaL)
Group debt maturity profile at end-2019 (€m)
€3.4 bn
Repaid in early Jan/Feb 2020
998
696
709
709
562
67
124
75
59
55
50
90
Liquidity
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
>
2030
Solid balance sheet -2.2x leverage post Cellnex deal
Ample liquidity to meet upcoming maturities, debt repayments post Cellnex closing
Infravia closing announced on February 28
Average maturity> 4 years
31
OUTLOOK
NICOLAS JAEGER - GROUP CFO
GUIDANCE FOR FRANCE & ITALY
In addition to the human impact, the current coronavirus epidemic will generate an economic slowdown in certain regions. The social and financial impacts for the iliad Group are currently limited. Nevertheless, the epidemic could impact the iliad Group and its objectives, as is the case for all companies in the telecommunications sector. Possible impacts include the shortage of certain electronic components and a slower rollout of Fixed and Mobile networks.
France
FIXED
Achieve a 25% share of the Broadband and Ultra-Fast Broadband market in the long term
2m FTTH subscribers in 2020, 4.5m in 2024
Have 22m connectible Fiber sockets by end-2022 and around 30m by end-2024
MOBILE
Have more than 80% of the subscriber base signed up to the Free Mobile Unlimited 4G Plan by 2024
Have over 25,000 sites by 2024
Achieve a 25% share of the mobile market in the long term
B2B
Obtain a B2B market share of around 4% to 5% share by 2024
Generate B2B revenues of between €400 million and €500 million by 2024
FINANCIALS
Generate EBITDAaL margin in France (excluding B2B and equipment sales) of over 40% in 2020
Achieve an EBITDAaL less Capex figure (excluding B2B activities) of more than €800 million in 2020 and around €1 billion in 2021
Italy
MOBILE
Have around 5,000 activated mobile sites by end-2020
Have rolled out between 10,000 and 12,000 mobile sites by end-2024
FINANCIALS
Based on having around 5,000 activated mobile sites at end-2020, we expect lower EBITDAaL losses in 2020 than in 2019
Achieve EBITDAaL break-even with a market share of less than 10%
Generate €1.5bn in revenues in Italy in the long term
33
APPENDIX
GROUP REVENUES
€m
2018
2019
Q1
Q2
H1
Q3
9M
Q4
H2
FY
Q1
Q2
H1
Q3
9M
Q4
H2
FY
France
1,201
1,194
2,395
1,190
3,585
1,183
2,373
4,768
1,213
1,219
2,432
1,229
3,661
1,251
2,485
4,917
Fixed services
672
660
1,332
654
1,986
644
1,298
2,630
654
658
1,312
661
1,973
666
1,327
2,640
Mobile services
476
486
962
492
1,454
482
974
1,936
487
510
997
524
1,521
527
1,057
2,054
o.w. invoiced to subscribers
365
373
738
385
1,123
375
760
1,498
384
405
789
423
1,212
425
848
1,636
Equipment
56
50
106
46
152
50
96
202
73
53
126
45
171
59
104
229
Intra-group sales France
(2)
(3)
(5)
(2)
(7)
(2)
(4)
(8)
(2)
(1)
(3)
(1)
(4)
(1)
(3)
(6)
Italy
-
9
9
46
55
70
116
125
81
96
177
109
286
140
250
427
Intra-group
-
-
-
-
-
-
-
-
(1)
(1)
(2)
(2)
(4)
(2)
(4)
(6)
Group revenues
1,201
1,203
2,404
1,236
3,640
1,251
2,487
4,891
1,293
1,314
2,607
1,336
3,943
1,389
2,725
5,332
o.w. services revenues
1,148
1,156
2,303
1,192
3,495
1,197
2,389
4,692
1,223
1,264
2,486
1,295
3,781
1,334
2,629
5,115
35
GROUP KPIs
2018
2019
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
FRANCE
Mobile subscribers
13,825
13,625
13,535
13,441
13,391
13,314
13,296
13,313
o.w. 4G plans
7,369
7,555
7,744
7,783
7,858
7,928
8,075
8,177
o.w. voice plan
6,456
6,070
5,791
5,658
5,533
5,386
5,221
5,136
Mobile data usage (GB per month per subs)
9.2
9.6
9.9
10.9
11.6
11.9
12.8
13.9
Broadband subscribers
6,501
6,473
6,459
6,427
6,411
6,396
6,428
6,460
o.w. FTTH
646
734
835
983
1,133
1,305
1,515
1,760
% FTTH penetration
9.9%
11.3%
12.9%
15.3%
17.7%
20.4%
23.6%
27.2%
Total subscribers base
20,326
20,098
19,994
19,868
19,802
19,710
19,724
19,773
Broadband & Ultra Fast Broadband ARPU (€ per month)
Iliad SA published this content on 17 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2020 07:50:07 UTC
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