The iliad Group maintains its unique European growth profile in second-quarter 2022
Aug 30, 2022
The Group's results for the second quarter of 2022 clearly show the lasting nature of the strong growth momentum it has seen since 2019. Thanks to its stand-out positioning, which combines innovative, best value-for-money offerings with the rollout of latest-generation networks, the Group delivered very good sales performances and higher profitability. In France, in the first half of 2022, iliad was the market leader for both Fixed and Mobile net adds. We are continuing to keep a vigilant eye on the current volatility of the financial and energy markets and have recently reinforced our financing capacities while taking steps to secure the prices and volumes of our supplies.
As in the first quarter, in the second quarter of 2022 the Group saw strong growth in its subscriber base in each of its three geographies, as well as high subscriber satisfaction rates.
Pro forma like-for-like revenue growth1 came to 6.6% in the second quarter, and 7.8% excluding the regulatory impacts in Poland. Broken down by country, revenues were up 7.1% year on year in France, 16.8% in Italy, and 1.8% in Poland1 despite the regulatory impacts which once again did not affect profitability (excluding those impacts, revenues rose by 6.4%). These results mean that iliad’s growth was the strongest out of the Top 15 independent European telcos.
In France, the second quarter saw Free once again notch up the market's highest number of new Fixed subscribers (67,000) while also performing extremely well in the Mobile market (120,000 net new subscribers, including 233,000 new 4G/5G subscribers). Thanks to its extensive Fiber network and the quality of its products, in first-half 2022 Free was once again ranked number one2 by nPerf for Fixed Internet performance in France and kept its position as the alternative Mobile operator with the fastest 4G speeds3.
In Italy, we added 257,000 new Mobile subscribers in the second quarter, despite a fiercely competitive environment, and iliad Italia remained the market leader for Mobile net adds. The Fixed business delivered a robust sales performance, with 68,000 subscribers signed up since the launch of the offer.
In Poland, the business combination between Play and UPC has been effective since April 1 and the Group is focusing on achieving synergies. In this context, the Group recorded strong growth in its postpaid mobile subscriber base (up 82,000), and in the Fixed segment, net adds came to 41,000.
Consolidated EBITDAaL rose by 10.1% on a pro forma like-for-like basis in the first half of 2022 (12.8% as reported) to €1.58 billion, mainly driven by Italy and France (up by €82 million and €71 million respectively). Operating cash flow surged year on year (up by 44% or €158 million), led by France and, to a lesser extent, Italy. The Group's capex priorities are still to extend and densify the coverage of its mobile networks in its three geographies, maintain a robust pace of Fiber rollouts, and connect its new B2C and B2B customers to ultra-fast broadband.
On June 20, the Group announced an agreement to sell 50% of its FTTx network in Poland to Infravia. This agreement – which is pending approval from the local authorities – will enable iliad to accelerate its convergence program in Poland and support the digitalization of usages for both B2C and B2B subscribers.
The Group has also put in place strategic initiatives to strengthen its mid- and long-term growth potential and acquire new skills. In Italy, we signed a RAN-sharing agreement in April with WindTre for non-densely populated areas, in order to accelerate the rollout of iliad Italia's mobile network. In Poland, our early-July acquisition of Redge – a leading OTT technology player in Eastern and Central Europe – has added major expertise to the Group in a complex and fast-growing field. In France, our acquisition in early July of a 10% stake in Certideal – a French leader in smartphone refurbishment – has strengthened the partnership we recently set up with this company and will help us execute our environmental strategy.
At June 30, 2022, the Group's leverage ratio was 3.1x, which was higher than at end-2021 due to the acquisition of UPC in Poland for €1.5 billion on April 1. On July 27, the Group announced that it had finalized a €5 billion medium-term financing program with a large pool of international banks, which will cover all of its financing needs, notably the payment for 5G frequencies in Italy in late September.
Commenting on the Group’s performance, Thomas Reynaud, iliad’s Chief Executive Officer, said: "It is with a mixture of pride and humility that we are announcing this morning the strong results achieved by the iliad Group in all three of our operating countries. With pride because we’ve managed to develop a growth model that is unique among pan-European telcos. And with humility because these very good results are the outcome of the years of investment we've put into our networks and our innovation strategy. We have all the strengths we need, especially strategically and financially, to continue to grow, despite the uncertainties of the current international environment".
(1) Excluding payments for frequencies
(2) LTM: last twelve months
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