Iliad S.A (ILIAD) Q2 2024 earnings summary

Executive summary

• Achieved top five European telecom operator status with 50 million subscribers, expanding to 61 million including Tele2 and Eir, and consolidated revenues of €4,902 million in H1 2024, up 10.3% year-over-year.

• EBITDAaL rose 13.2% to €1,859 million, with profit for the period increasing 8.6% to €251 million, and strong net adds in mobile and fiber across all geographies.

• Outperformed topline growth with market share gains in all countries and segments, driven by ARPU growth and demand for higher-end products.

• Innovation highlighted by the launch of Freebox Ultra, Wi-Fi 7 box in Italy, and Kyutai's Moshi, the first openly accessible voice-enabled AI.

• Maintained strong financial discipline with group leverage at 2.8x and holding leverage at 3.8x as of June 2024.

Financial highlights

• H1 2024 group revenue grew 10.3% year-over-year (8.5% organic pro forma), with France up 9.6%, Italy up 11.5%, and Poland up 12.0% (4.6% organic).

• EBITDAaL increased 13.2% (11% organic pro forma), margin improved to 37.9% (+90bps), and profit from ordinary activities rose 24.6%.

• Operating free cash flow surged 61% to €370 million, with France contributing the most; free cash flow (excl. financing/dividends) was €98 million, down from €820 million in H1 2023 due to working capital outflow and lower asset disposals.

• Net debt at €10.25 billion, group leverage at 2.8x, interest coverage at 7.9x, and liquidity at €3.8 billion.

• Capex at €888–900 million, down 14.6%–15.4% year-over-year, with capex intensity at 18%.

Outlook and guidance

• Confident in reaching €10 billion revenue target for 2024, with EFCF generation expected to accelerate in H2 due to phasing of cash interests, taxes, and spectrum payments.

• Maintains focus on industrial investments, commercial expansion, and disciplined capital allocation.

• Continued focus on innovation, AI, cybersecurity, and ESG-linked financing.

• Leverage ratio improved to 2.8x LTM EBITDAaL.

• Continued focus on organic growth, especially in Italy's broadband segment.