Altice NV: Full Year and Q4 2016 Results
March 08 2017 - 12:00PM
ALTICE N.V. - FULL YEAR AND Q4
2016 PRO FORMA[1]
RESULTS
-
Successful year of execution in
FY 2016 including rapid integration of US businesses and
transformation into leading transatlantic, converged telecoms and
media operator.
-
Accelerating momentum across
Altice Group - all businesses with positive revenue growth, best
quarterly performance in Q4 since Altice IPO:
-
Group revenue growth
accelerated to +2.7% YoY[2] in Q4 2016
with further expansion in margins and growing cash flow
conversion;
-
Return to revenue growth in
France in Q4 (+0.6% YoY[3]) after 24
quarters of decline, of which only 7 after Altice control. Revenues
expected to stabilize in FY 2017 supported by stabilization of B2C
and B2B mobile customer base in Q4 2016 following significant
improvements in network quality and services;
-
Significant acceleration in
Altice USA revenue growth to +5.1% YoY in Q4 on a constant currency
(CC) basis (vs. +1.2% YoY in Q4 2015 before Altice took control of
the businesses);
-
Optimum revenue growth
accelerated in Q4 to +4.4% YoY on a CC basis; continued strong
revenue growth at Suddenlink (+6.7% YoY on a CC basis);
-
Significant improvement in
customer service metrics[4];
-
US accounts for 44% of Group
Operating FCF[5]
-
Return to revenue growth in
Portugal in Q4 (+0.5% YoY[6]) after 32
quarters of decline, of which only 4 after Altice
control;
-
Further acceleration in revenue
growth in Israel in Q4 to +4.1% YoY on a CC basis.
-
Altice Model and strategy
validated with advanced turnaround in Europe and stronger US
performance:
-
All 2016 financial guidance
achieved;
-
Completed internal
reorganization to leverage scale, expertise and
innovation;
-
Reinvesting growing cash flows
and attracting the best talent to provide the best customer
experience, the best infrastructure, and the best content across
the Group;
-
Rapid de-leveraging (reduction
in net debt / Adjusted EBITDA of 0.5x YoY[7]) to
facilitate further investments in accelerating growth
platform.
-
Leading global commitment to
rapidly build state-of-the-art fiber networks:
-
c.9 million homes upgraded for
higher speed broadband services across Altice Group in
2016;
-
Leading fiber[8]
operator in France reaching 9.3 million homes passed at the end of
2016 (+1.6 million additional homes YoY), targeting 11 million
homes passed by end-2017 and 22 million by 2022. Delivering the
fastest fiber (up to 1 Gbps) and DSL speeds with the most reliable
connections[9];
-
Announced substantial 5-year
upgrade of Altice USA network from fiber HFC to FTTH to deliver 10
Gbps broadband speeds ("Generation GigaSpeed");
-
Whole Optimum network already
offering 300/350Mbps broadband speeds[10]),
increased from 101 Mbps pre-Altice;
-
58% of Suddenlink network now
offering 1 Gbps speeds, from 20% pre-Altice;
-
Accelerated fiber rollout in
Portugal reaching 3.0 homes passed at the end of 2016 (+714k
additional homes passed YoY), increased from 1.8 million
pre-Altice. Well on track to reach target of 5.3 million fiber
homes passed by 2020, with more than 900k homes passed expected to
be rolled out in 2017 to become the market leader for
fiber.
-
Altice Group Adjusted EBITDA
grew +15.7% YoY (+15.1% on a CC basis) in Q4 driven by the strong
growth of Altice USA (Optimum Adjusted EBITDA +40.6% YoY,
Suddenlink +17.4% YoY on a CC basis) and
strong growth in France +12.1%. Altice USA reached an Adjusted
EBITDA margin of 40.7% on a combined basis in Q4 (+8.3 % pts YoY
vs. 32.4% in Q4 2015).
-
Altice Group Operating Free
Cash Flow grew +20.4% YoY (+19.5% on a CC basis) in Q4[11] driven by
the strong growth of Altice USA (Optimum and Suddenlink grew +93.8%
and +29.6% YoY on a CC basis, respectively, having simultaneously
accelerated revenue growth and significantly expanded operating
cash flow margins during 2016).
-
Robust, diversified and
long-term capital structure: during 2016, Altice refinanced over
EUR 21 billion equivalent of its debt, extending the weighted
average life of the Group's debt by 18 months (6.6 years end-2016)
while keeping the average cost of debt constant.
Guidance
2017[12]
For 2017 we expect growth YoY in Altice Group
revenue, including revenue stabilization in France on a pro forma
organic basis. We expect high-single digit growth in Group Adjusted
EBITDA YoY and Group capex of c.€4 billion.
Michel Combes,
Chief Executive Officer of Altice, said: "2016
was a pivotal year for Altice as we successfully transformed the
Group into a leading, transatlantic converged communications
player. Our business is stronger than ever and we have put all the
building blocks in place for continued profitable growth.
Our 2016
performance has validated the Altice Model as we've been very
focused on execution, seeing an advanced turnaround in Europe and
stronger US performance. Indeed, since Altice took control of the
major businesses it has acquired, France and Portugal have returned
to revenue growth for the first time in many years, and growth in
the US has significantly accelerated. This growth has been driven
by our clear strategy:
Attract the best
talent to create and provide the best customer experience, the best
infrastructure and the best content.
We continue to
invest in these areas to differentiate our offers, expand our
capabilities and expertise, and add new revenue sources to the
Group.
We are proud of
our global network commitments - during 2016 we upgraded over 9
million homes for higher speed broadband services and more than
doubled the number of 4G mobile sites in France. We have a leading
commitment to fiber with rapid deployments across the Group and
technological innovation well in advance of our peers. All of this
investment is being facilitated by driving significant efficiency
savings across every one of our businesses, supported by completing
our internal reorganization to leverage our new scale. The
combination of growth and margin expansion confirms our original
investment thesis when we entered all of the markets where we now
have operations. We firmly believe this strategy will continue to
support our growth well into the future."
March 8, 2017: Altice N.V. (Euronext: ATC NA and ATCB NA),
today announces financial and operating results for the quarter and
year ended December, 2016.
All major markets
drove profitable growth in Q4
-
Altice Group Revenue €6,087m, up 2.7%
YoY[13]:
-
€2,892m France (SFR) Revenue[14], up
0.6%.
-
€1,522m US Optimum Revenue[15], up
5.8% on a reported basis; increase of 4.4% on a CC basis to $1,645m
in local currency.
-
€611m US Suddenlink Revenue, up 8.1% on a
reported basis; increase of 6.7% on a CC basis to $660m in local
currency.
-
€580m Portugal Revenue, up 0.5%.
-
Altice Group Adjusted EBITDA €2,286m, up 15.7%
YoY[16]:
-
€954m France (SFR) Adjusted EBITDA[17], up
12.1%.
-
€579m US Optimum Adjusted EBITDA, up 42.5% on a
reported basis; increase of 40.6% on a CC basis to $626m in local
currency.
-
€289m US Suddenlink Adjusted EBITDA, up 19.0% on
a reported basis; increase of 17.4% on a CC basis to $313m in local
currency.
-
€265m Portugal Adjusted EBITDA, up 7.8%.
-
Altice Group Adjusted EBITDA margin expanded by
4.2% pts YoY to 37.6%:
-
France (SFR) margin increased by 3.4% pts to
33.0%.
-
US Optimum margin expanded by 9.8% pts to
38.0%.
-
US Suddenlink margin expanded by 4.3% pts to
47.3%.
-
Portugal margin increased by 3.1% pts to
45.6%;
-
Altice Group Operating Free Cash Flow[18] of €968m,
up 20.4% YoY; up 19.5% on a CC basis.
Contacts
Chief Investor Relations
Officer
Nick Brown: +41 79 720
1503 / nick.brown@altice.net
Chief Communications
Officer
Arthur Dreyfuss: +41 79 946 4931 /
arthur.dreyfuss@altice.net
Conference call details
The company will host a conference
call and webcast tomorrow, March 9, 2017, to discuss the results at
2:00pm CET (1:00pm UK time, 8:00am ET)
Webcast live:
http://edge.media-server.com/m/p/c4gw23nr
Dial-in access telephone
numbers:
France: +33 1 76 77 22 74
UK: +44 330 336 9105
USA: +1 719 457 2086
Confirmation
Code: 4389172
[1] Financials
shown in these bullet points are pro forma defined here as results
of the Altice N.V. Group as if all acquisitions had occurred on
1/1/15, including PT Portugal (MEO), Suddenlink, Cablevision
(Optimum), NextRadioTV and Altice Media Group France (and excluding
Belgium and Luxembourg, Newsday Media Group, Cabovisao, ONI, La
Reunion and Mayotte mobile activities as if the disposals occurred
on 1/1/15). Segments shown on a pro forma standalone reporting
basis, Group figures shown on a pro forma consolidated basis.
Financials include only one month of contribution from the
insourcing of Parilis and no impact from the insourcing of
Intelcia, as the impacts were not material.
[2] In constant
currency, Altice N.V. Group revenue grew 2.2% YoY in Q4.
[3] Altice
France revenue grew 0.8% YoY excluding retail roaming EU tariffs
impacts in May 2016.
[4] 19% YoY
reduction in total calls and 21% YoY reduction in technical service
visits in H2 2016 vs. H2 2015 at Altice USA.
[5] Based on FY
2016 pro forma consolidated Operating FCF (defined as Adjusted
EBITDA less Capex) contribution, excluding group corporate segment
(€-88.1m), €44.0m of capitalised exclusive content costs in
Portugal for multi-year contracts and €413.8m of capex related to
the acquisition of multi-year major sport rights at Altice
International.
[6] Altice
Portugal revenue grew 1.3% YoY excluding regulatory impacts.
[7] Altice
Group leverage as measured by net debt / Adjusted EBITDA on a L2QA
basis reduced to 5.4x in Q4 2016 from 5.9x in Q4 2015.
[8] FTTB and
FTTH homes passed.
[9] 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.
[10] 300Mbps
for B2C (residential) customers and 350Mbps for B2B (commercial)
customers.
[11] Excluding
spectrum capex of €477m in France in Q4 2015.
[12] 2017
guidance applies to current Group perimeter in this earnings
release at constant currency. Refers to pro forma revenue and
EBITDA growth including Optimum (Cablevision) and Media assets in
France (i.e. NextRadioTV and Altice Media Group France), and
excluding Belgium and Luxembourg, for 12 months in 2016. Capex
guidance excludes net impact of handset securitisation.
[13] Group
Revenue grew 2.2% on a constant currency (CC) basis.
[14] Includes
media assets (i.e. NextRadioTV and Altice Media Group France).
[15] Excluding
Newsday following disposal of 75% stake completed in July 2016.
[16] Group
Adjusted EBITDA increased 15.1% on a CC basis.
[17] Includes
media assets (i.e. NextRadioTV and Altice Media Group France).
[18] Defined as
Adjusted EBITDA less Capital Expenditure, excluding spectrum capex
of €477m in France in Q4 2015.
Altice Full Year and Q4 2016 Pro
Forma Results
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Altice NV via Globenewswire
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