Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Euronext Paris  >  SFR Group    SFR   FR0011594233

SFR GROUP

(SFR)
SummaryNewsCompany 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsAnalyst Recommendations

SFR : Full Year and Q4 2016 Results

03/09/2017 | 09:05am EST
Press release Saint-Denis, March 8, 2017 SFR Group - Full Year and Q4 2016 Results
  • Return to revenue growth in Q4 2016 +0.6% YoY (+0.8% YoY excluding regulatory impacts1) after 24 quarters of decline, of which only 7 after Altice control; all business segments showing significantly improved performance
  • 2016 guidance achieved; revenue trend improved and EBITDA growth YoY excluding media and content investments2
  • SFR Group revenue expected to stabilize in 2017
  • Fastest 4G/4G+ rollout in the market (81% population coverage, more than doubling the total number of 4G sites over the past year) and delivering the fastest 4G+ speeds up to 300Mbps across 18 cities3
  • B2C mobile customer base returned to growth and B2B mobile base stabilized in Q4 following significant improvements in network quality and services
  • Continued rapid fiber FTTH/FTTB rollout (9.3 million homes passed end-2016) with the fiber customer base growing to over 2 million customers
  • Delivering the fastest fiber (up to 1 Gbps) and DSL speeds with the most reliable connections according to ARCEP 4
  • Significant expansion in content offering adding major sports rights, securing exclusive deals with NBCU and Discovery channels and adding 15 titles for SFR Presse application

2016 Full Year Results / Highlights

In 2016, SFR continued to successfully execute on its three strategic priorities to regain its position as a leading operator while ensuring that it can adapt to the new realities of the industry supported by its integration within Altice.

Priority 1: Accelerated investment in SFR's networks.

The complete overhaul of SFR's entire "production plant" initiated when Altice took over and starting to produce results from the third quarter of 2015, has allowed SFR to expand its 4G coverage to 81% of the population by the end of 2016. This 17 percentage point year-on-year increase returned SFR to a leadership position among French 4G operators. It was an historic rollout in terms of volume with SFR building out the most number of new 4G sites throughout the year (+5,248 YoY). SFR is the leader in 4G+ coverage offering a

1 Excluding retail roaming EU tariffs impacts in May 2016.

2 In FY 2016, SFR Group revenue excluding acquired media assets (i.e. NextRadioTV and Altice Media Group France) declined 3.2% YoY vs. a decline of 3.5% YoY in FY 2015 on a comparable basis. SFR generated EBITDA of €3,861m in FY 2016 excluding the contribution from NextRadioTV and Altice Media Group France (€59.6m over 12 months) and excluding content expense for the use of major sports rights (English Premier League Football, French Basketball League and English Premiership Rugby) and production of SFR Sports channels, for a total of €63.4m since August 2016, vs. €3,860m in FY 2015 on a comparable basis.

  1. SFR is delivering the fastest mobile data download speeds in cities such as Nantes where it has rolled out the latest 4G+ up to 300Mbps mobile base station equipment (as per Speedtest 4G data as of December 2016).

  2. Fastest fiber speeds delivered on average according to ISP Speed Index as of December 2016. Fastest DSL speeds

according to data from nPerf as of Q4 2016. Most reliable connections for fiber and DSL according to ARCEP Quality of access to fixed services as of November 2016.

throughput of up to 300Mbps across 18 cities and will achieve, as targeted, 90% 4G coverage in 2017 and 99% in 2018.

At the same time, SFR retained its number 1 position in fiber with 9.3 million homes passed as of December 31, 2016, in more than 1,300 municipalities (i.e. an additional 1.6 million homes passed across an additional 270 municipalities).

SFR continues to upgrade its fiber HFC (FTTB) cable network as well as expanding its fiber-to-the-home (FTTH) coverage with similarly very high speed throughputs (up to 1Gbps download and 100-200Mbps upload speeds). SFR is now able to rollout nearly 2 million new additional fiber homes passed each year. SFR also continues to build partnerships with local authorities to bring very high speed broadband services to the largest number of people, as demonstrated by its contract win in 2016 with the Public Initiative Network (PIN) in Isère, one of the largest in France in terms of volume. Finally, SFR is fully committed to the success of France's Very High Speed plan and is lobbying for a more balanced distribution of rollouts in Less Dense Areas.

This accelerated investment in improving and expanding SFR's mobile and fiber networks was supported by

€2.3 billion in capex in 2016.

Priority 2: Creating a convergent telecoms and media operator, providing the best quality network access and content services.

SFR's pioneering convergent strategy was implemented in record time with the launch of innovative offers that included the best content bundles in June 2016, after the purchase of Altice Media Group France and NextRadioTV.

In just a few months, SFR launched its digital newsstand application, SFR Presse, currently with 65 titles and more than 10 million downloads to date (1.5 million downloads in January 2017 alone). The Group also launched five sports TV channels (SFR Sport 1, 2, 3, 4K and 5), supported by exclusive agreements for broadcasting prestigious sports such as with the English Premier League, French Basketball League, English Premiership Rubgy, World Series of Boxing and the French Athletics Federation. In addition, SFR and NextRadioTV launched two news channels, BFM Sport and BFM Paris. Finally SFR, in partnership with Altice, launched its first original and outstanding creative production "Les Médicis, Maîtres de Florence" (broadcast exclusively on SFR Play), as well as signed strategic agreements with Discovery Communications and NBC Universal.

In 2016, the SVOD platform (SFR Play) has come into its own as a unique film library, currently offering approximately 1,000 feature-length films, 30% of which are French. With 1.2 million subscribers, SFR Play is the leading SVOD service in France and is adding to its exclusive and brand new content offerings on a regular basis.

At the same time, and in accordance with its non-exclusivity commitments, SFR has made all of its new services available Over-The-Top (OTT) to allow everyone to benefit. This means that anyone can subscribe to SFR Sport, SFR Presse and SFR Play simply by connecting to the Internet regardless of their operator.

Finally, for business customers, a range of innovative services have been launched to provide even better solutions to their needs, including an IoT partnership with SIGFOX announced in March; offering fiber to micro-businesses via its "Connect Entrepreneurs" service; and a mobile network performance assessment via its "Engagement Business Libéré" initiative.

Priority 3: In-depth digital transformation of the company.

In the summer of 2016, SFR signed an historic labor agreement "New Deal" with representatives of the Unions to accomplish the corporate transformation needed to transcend its history. The objective of this transformation is to durably simplify the corporate structures inherited from multiple acquisitions, to improve the quality of the customer experience and services, and to make SFR more digital, in sync with the

environment in which we are evolving.

The plan was announced in the summer 2016 and the first round of voluntary departures began in the distribution business in December. The second round, still being negotiated, will be implemented from July 2017.

2017 guidance

For 2017, SFR Group revenues are expected to stabilize compared to FY 2016 on a pro forma and organic basis5benefitting from additional investments in upgrading and expanding its leading fiber and mobile 4G/4G+ network coverage, as well as incremental content investments including major sports rights, NBCU/Discovery channels, original programming and additional video-on-demand titles (totaling c.€350- 400m on an annualized basis). SFR will also continue with the next phase of the "New Deal" transformation plan, following an agreement with representatives of the unions for voluntary departures last summer.

Proforma6financial and operating review

The focus for SFR on improving network quality, customer experience, retention processes and content enriched service bundles (the "Altice Way") is delivering a significant improvement in subscriber, revenue and EBITDA trends:

  • Total revenue grew +0.8% YoY in Q4 2016 pro forma for recent acquisitions of media assets excluding regulatory impacts7, or +0.6% YoY growth including these impacts to a total of €2,892m. For FY 2016, pro forma revenue declined 2.9% YoY to a total of €11,170m;

    • FY 2016 revenue ex-media assets8declined 3.2% YoY, an improvement as expected compared to FY 2015 (-3.5% YoY), with a return to revenue growth in Q4 2016 of +0.6% YoY (vs. -6.1%, -4.6% and -2.6% YoY in Q1, Q2 and Q3 2016 on a like for like basis respectively);

  • Mobile B2C customer base returned to growth in Q4 with total mobile churn reducing again YoY;

    • The total B2C customer base increased by 136k net additions in Q4 with postpaid net additions of 33k and prepaid net additions of 103k (vs. total net losses of 88k, postpaid net losses of 73k and prepaid net losses of 16k in Q3 2016);

    • B2C mobile postpaid ARPU of €25.8 in Q4 also grew +2.2% YoY (vs. €25.3 in Q4 2015);

    • Mobile B2C revenue trend improved again in Q4 declining 1.5% YoY (vs. -4.8%, -7.1% and -4.2% YoY in Q1, Q2 and Q3 2016 respectively);

  • Fixed B2C revenue growth was sustained in Q4 (+1.3% YoY), driven by fixed ARPU growth of +5.7% YoY, benefitting again from the content and bundling initiatives implemented from May 2016 (blended fiber/DSL ARPU increased to €36.9 in Q4 2016 compared to €34.9 in Q4 2015), as well as a favourable mix effect from DSL to fiber migrations;

    • Fiber customer net additions accelerated in Q4 to 54k9but the aim is to accelerate this growth much further. SFR is improving its execution on DSL to fiber migrations supported by completing

      5 Pro forma revenue growth including media assets acquired during 2016 (i.e. NextRadioTV and Altice Media Group France) as if all acquisitions had occurred on 1/1/16, excluding NewsCo and l'Etudiant (disposals announced in November 2016).

      6 Financials shown in these bullet points, unless otherwise stated, are pro forma defined here as results of SFR Group as if all acquisitions had occurred on 1/1/15, including NextRadioTV and Altice Media Group France media assets.

      7 Excluding retail roaming EU tariffs impacts in May 2016.

      8 Excluding acquired media assets for comparability (i.e. NextRadioTV and Altice Media Group France).

      9 Includes 4k fiber net additions from new La Poste TV revenue sharing contract (total of 19k La Poste TV customers included within the B2C fixed based from Q4 2016).

      the insourcing of its main technical and customer services providers, as well as rolling out new customer premise equipment;

    • Customer experience is being enhanced to reduce churn and new content is being added to differentiate SFR's convergent offers;

    • Total fiber and DSL customer losses improved slightly in Q4 on a sequential basis (-61k vs. -75k in Q3 2016) as SFR increased the competitiveness of its DSL offers in response to intense competition;

  • B2B revenue trend improved again in Q4 declining 3.3% YoY (vs. -7.6%, -4.5% and -3.8% YoY in Q1, Q2 and Q3 2016 respectively) as the B2B mobile customer base has stabilized following the significant improvements in network quality and service;

    • Mobile B2B base (ex-M2M) stabilized in Q4 (-1k) with ARPU growth of +2.9% YoY;

    • Delivery process improving, noticeably reducing delivery times and billing activation;

    • Fixed Voice is still a drag but the unified communications business is picking up with an expansion of new ICT services products;

  • Wholesale revenue increased +12.8% YoY in Q4, partly supported by the resolution of a dispute with a MVNO customer;

  • Other revenue was flat in Q4 (+0.1% YoY) as the strong growth at NextRadioTV was offset by the external legacy print revenue declines at Altice Media Group France. On 28 November 2016, SFR announced it had entered into exclusive negotiations to sell NewsCo and l'Etudiant within the AMG France business (retaining an ownership stake of 25%).

SFR Group published this content on 08 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 09 March 2017 14:05:20 UTC.


© Publicnow 2017
All news about SFR GROUP
2017Orange to launch online banking service on Nov. 2
RE
2017SFR : The French Financial Market Authority grants its clearance decision regard..
PU
2017SFR : Filing of a buyout offer followed by a squeeze-out on SFR Group
PU
2017Cyclicals and ex-divs send European shares to four-month low
RE
2017SFR : Altice announces its intention to file a public buyout offer followed by a..
PU
2017SFR : Altice crosses the 95% ownership threshold in sfr group
GL
2017SFR : Group - Q2 2017 Results
GL
2017FIBER FRANCE : a priority for the government and a pledge by Altice-SFR
PU
2017Activist SFR investor says launches legal action against Altice
RE
2017Altice IPO pricing values U.S. business at up to $22 billion
RE
More news
Managers and Directors
NameTitle
Alain Phillippe Romain Weill Chairman & Chief Executive Officer
Armando José Pereira de Oliveira Rodrigues Chief Operating Officer
Christophe Delaye Executive Director-Networks & Information Systems
Arthur Dreyfuss General Secretary
Eric Pradeau Executive Director-Operators
Sector and Competitors
1st jan.Capitalization (M$)
SFR GROUP28.59%0
VERIZON COMMUNICATIONS INC.-2.91%237 444
CHARTER COMMUNICATIONS, INC.-4.93%125 703
NIPPON TELEGRAPH AND TELEPHONE CORPORATION3.95%97 297
DEUTSCHE TELEKOM AG0.64%86 303
SAUDI TELECOM COMPANY3.96%58 586