A near five per cent fall in revenue at France’s SFR-Numericable pulled down Q1 2015 numbers for parent Altice.
Revenue in France fell by 4.7 per cent, to €2.74 billion, driven downwards by an 8.7 per cent fall in consumer mobile revenue. Domestic performance would have been worse had it not been for a more resilient performance on the fixed side.
Parent Altice saw a 3.3 per cent fall in group revenue to €3.26 billion, partially offset by growth in Israel and the Dominican Republic.
Group figures were stated on a pro forma basis, reflecting the acquisition of SFR by Numericable in November 2014.
However, Dexter Goei, Altice’s CEO, chose to talk up the group performance at the earnings level, with a 20 per cent jump in adjusted Ebitda and 12 per cent growth in operating free cashflow, boosted by “faster and larger” merger synergies between SFR and Numericable.
Indeed, Goei sang the praises for the combination of SFR’s mobile service and the fixed offering from Numericable: “We are particularly pleased with the strong start to the synergies realisation plan in France and are confident that our strategy based on higher value generation through focus on quadruple play and use of our clear fibre advantage will continue to deliver results.”
The sale of SFR to Numericable creatrd an opportunity for quadplay services.
Altice reiterated the way forward in France is to focus on high end customers and quadplay convergence. The benchmark for progress on the mobile side will be ARPU figures, which still showed a gentle decline to €25.5 in Q1 2015 from $25.9 in Q4 2014. The company explained by saying Q1 was traditionally weaker for consumption of services.
The company, however, is laying the groundwork for its quadplay strategy in France, with a 27 per cent increase in capex to €400 million as it invested in 4G and fibre deployment. It will also have to fix a declining mobile customer base, including postpaid.
Cash is also being spent on deleveraging at Numericable-SFR. Since the deal closed in November, a 20 per cent reduction in net debt to Ebitda ratio has occurred.
For the full-year 2015, Altice expects Numericable-SFR adjusted Ebitda to grow “at least 20 per cent from FY2014″.