Hello. Hello, welcome to the Altice France Q2 2023 earnings call for debt investors and analysts. Please note that this conference is being recorded. I'd now like to hand you over to Sam Wood, Head of Investor Relations. You may now begin your conference. Thanks, operator. Hello, and welcome to the Altice France Q2 2023 earnings call for debt investors and analysts. On the line to take you through the presentation, we have Patrick Drahi, founder and controlling shareholder of Altice, Dennis Okhuijsen, Malo Corbin, Gerrit-Jan van der Wende, as well as Mathieu Cocq, CEO of SFR. As the presentation may contain forward-looking statements, please read the legal disclaimer on slide 2. With that, I'll hand over to Patrick. Thank you, Sam. Good morning or good afternoon to you all. I understand we are a little bit less than yesterday, thank you for attending today. For those who were yesterday, thank you for attending twice. I'm gonna repeat a part of what I said yesterday, and then we're gonna focus on our French business. As part of the call yesterday, we extensively discussed the ongoing investigation by the authorities in Portugal. As founder and controlling shareholder of this group, I want to repeat that we take this matter extremely seriously. After learning of the Portuguese authorities investigation on July thirteenth, we acted immediately, engaging legal and forensic advisors, suspending payments to allegedly implicated third parties, and launching a thorough review process across all Altice, including France. At this time, and to the best of our knowledge, the digital entity investigation scope is limited to Portugal. We have, however, identified internally that Altice entities outside of Portugal, including Altice in France, have done some business with the affected suppliers, as identified by the Portuguese authorities. The transition process to replace these suppliers is well underway, notably in France, as Malo will explain in his presentation. Based on the preliminary analysis performed to date on the list of suppliers publicly identified by the Portuguese authorities, we estimate Altice France potential exposure to these identified counterparties would, if the allegations were to be substantiated, to be a low single digital of total expenditures in France, around 2%, with the potential fraudulent amount being only the margin of commission on such volumes. A potential financial impact of around 0.5% of our total purchasing in France, mostly in the technical area. As Malo will explain, this is almost closed or in the process to be closed. The good news going forward is that we expect to reduce a bit our cost of purchasing in France. At the local level, as a precautionary measure, we have reviewed and strengthened the approval process for all purchases, payment, purchase orders, and related processes at the French level. As I explained yesterday, since July 13, our objective has been to shed light on the precise course of events and reveal the truth. I want to be transparent with you and update you on where we stand today. While our goal is to provide as much information as possible, there may be details we are not at liberty to share today due to the pending nature of the matter. This concludes what we can say at this time on this topic. I understand you may have further questions, and of course, when there is anything material for us to share in the future, we will do so as appropriate and permissible. I will make myself available to meet many of you during non-deal roadshows to be set up in early September in New York and London, where I will be joined by SFR CEO, Mathieu Cocq. Moving on, I want to use the opportunity today to remind all of you that I am fully committed to Altice France and SFR, the business I started on my own 30 years ago. The business I built from scratch with the help of our first employees, deploying fiber meter by meter in the most remote areas of the south of France, then consolidating and modernizing 99% of the whole alternative fixed infrastructure throughout the country, completed end of 2014 by the acquisition of SFR, the largest mobile operator, and then again, building from scratch the largest alternative fixed fiber wholesaler with XpFibre. SFR is today the only not state-owned operator, which owns the largest fiber network of France, comprised of the fiber modernization of the cable assets and the recent FTTH deployment of XpFibre, covering around 40% of the whole country. This is the richest independent, asset-rich French operator from far, fully controlled by one shareholder, delivering substantial operating cash flows. This is thanks to all our loyal employees for whom I give my full support, thanks to our customers, and of course, thanks to our debt investors in SFR and France since the beginning. My single priority today for Altice France is to deleverage and strengthen the capital structure. At the core of our strategy, we must, of course, improve operational and financial trends in France. Our local management will. They have the experience for that, the motivation, and similar education and career background than our peers. In the meantime, deleveraging requires execution on inorganic options. We have been focused on these options in the last several months with the corporate team. We will talk more about these options later in this presentation. Remember, for many of you who accompanied me in the past, we had a similar and complex situation back then at Numericable, with financial markets shaken by the subprime crisis and a declining highly leveraged asset, which required a lot of CapEx. We solved this, and we will solve the present situation in a similar way, with 4 key measures. Number 1, empowering our local management to enable him to focus on the front line. Number 2, selling some non-core assets to reduce debt. Number 3, buying back our own debt. Number 4, contributing equity and implementing actions on the M&A fronts. If you want now to move to slide number 4, I take the opportunity here to explain the current organizational structure and ownership structure for Altice France, which is very similar to Altice International, but with only one country in for the business. First, in terms of ownership structure, the vast majority, that is to say, more than 90% of Altice France, is owned by Next. Next is my personal family holding, for which I own 100% of the shares and voting rights. The rest, a bit less than 10%, is owned by management and families, as explained yesterday. To give you a better sense of control, this is invested through two investment vehicles into which the management hold their shares and options that they had before the take-private of January 2021. I personally control also the voting and the liquidity of these two investment vehicles. In other words, 100% of the voting and liquidity of Altice France is within my hands. Altice France consists of, number one, SFR. Number two, the media division with leading brands, BFM and RMC. Number 3, last but not least, our high-value stakes in XpFibre, a unique growing infrastructure business. Moving to the middle of the slide, we have a full suite of experienced management team in the operation. Arthur, is the 2 operations or in the 3 operations, if we take telecom, media, and XpFibre. Arthur Dreyfuss runs our media business, and as Chairman of Altice France, leads external and regulatory relationships. He has been instrumental in building the group over the last 9 years, helping us in the institutional relation and the communication of the group worldwide. Mathieu Cocq has been in the telecom business for 15 years, notably building our footprint in the overseas territories next to the late entrepreneur, my dear Jean-Michel Hélie. Mathieu is recognized by his colleagues and his peers as a true leader, simple and analytic, rapid and precise in action. I know each member of Arthur and Mathieu's team. They have experience and talent, and they have my support. For instance, Eric Pradeau, who runs our largest division, the B2C division of SFR, has been with us since the acquisition of Completel in 2007. He knows every detail of the telecom business in France, from technical to commercial, and to field operations. Like Mathieu, who graduated from École Polytechnique and Columbia, Eric is an engineer from one of the best French engineering school. Our CFO in France, Benjamin Haziza, I personally hired in 2019, and he used to be a partner at Deloitte in France. Olivier and Emmanuel are running our technical division and B2B division, and Olivier has been instrumental in bringing to quality the mobile network and coverage the mobile, and the 5G network of SFR, while Emmanuel managed to return the trend in B2B mobile for our business division in France. Note please, that the team average age is 46, which means it is experienced enough, but also sufficiently young to have a strong energy and will, and wish to succeed. Concerning Mr. Pereira's involvement in France, as the question was raised yesterday, and I promised to answer, he was deputy managing director of our French business, meaning SFR, not involved in the media, from the end of 2017 until the beginning of 2019, where alongside our previous CEO, he played a key role to relaunch the business and build the network of XpFibre, which is now over 80% deployed. In August 2022, exactly one year ago, when I promoted Mathieu as CEO of SFR, I asked Mr. Pereira to advise Mathieu on the operational issues of SFR for a one-year transitional period. Independently of the recent unforeseeable events, this advisory mission was therefore terminating at the end of July 2023. Given the global scale and presence of our group, it is critical to coordinate for certain activities, which is done by the corporate team here around me. That corporate team is led by those presenting, and alongside myself, it means we will continue to coordinate on key areas such as reporting, treasury, tax, M&A, communications, and investor relations. This is where I end my comments, but I will stay here for future Q&A, and I hand over now to Malo, please. Thank you, Patrick. Good morning, everyone. Turning to slide 5. In the Q2, total revenue of Altice France declined by 2.6%. Total EBITDA and operating free cash flow declined by 5.7% and 4.1%, respectively, in the Q2. SFR negative trends year-over-year are mainly driven by negative sales volumes over recent quarters, notably due to a lower level of available net add in France, as well as the drag of the slowdown of the FTTH rollout for XpFibre. SFR had EUR 1.4 billion of liquidity at the end of Q2, including EUR 1.1 billion of undrawn revolving credit facility. Pro forma net leverage was 6 times net debt to EBITDA on an LTM basis. Our unchanged guidance is for midterm organic operating free cash flow to grow by EUR 1 billion, driven by EBITDA growth and CapEx reduction. We target leverage of 4.5x. Moving to slide 6, you can see the revenue trend by segment for the Q2. Telecom revenue declined by 2.5% year-over-year, with non-show service revenue declined by 2.4% in Q2, consisting of mobile service revenue declining by 1.6% and a fixed service revenue decline of 3.5% year-over-year. The service revenue decline is mainly driven by negative volumes over recent quarters. In the first and Q2 of the year, we have noted much lower volume growth, meaning fewer net adds available in the market overall. The fixed service revenue trend improved compared to the Q1, from minus 4.3% to minus 3.5%. We expect it to improve again in the second half of the year. We see a path to returning to fixed service revenue growth at the end of 2023. Fixed churn decreased year-over-year. Other important KPIs have also shown an improvement year-over-year, such as our FTTH installation success rate and other KPIs related to the success of field operations. We will benefit from the ongoing expansion of our addressable fiber footprint in France, with close to 34 million fiber homes passed at the end of the Q2, and only a small portion of homes with only a DSL or FTTB solution. Given some investors have asked the question in recent weeks, we can confirm from our analysis that there is no leaching in SFR fiber or in SFR cable networks. Moving on to mobile. As you may remember, this quarter, we'll have the positive contribution of Coriolis and Syma acquisitions. The majority of such losses were skewed towards lower value packages. Year to date, we have seen more competitive intensity within the mobile market. We have tried to maintain discipline in terms of pricing against this more competitive backdrop, especially at the low end of the mobile market. We have continued to expand our 5G coverage with more than 65% population coverage at the end of the Q2. Business services revenue declined by 2.3% in the Q2, primarily driven by the anticipated decline in construction activity. SFR built 145,000 fiber homes in Q2, below the 221,000 homes built last year, mechanically leading to a decrease in construction revenue. Keep in mind that construction revenues are realized upon% of completion, and so the reported revenue in any given quarter does not add up precisely with a simple calculation by number of homes built in the quarter. Media revenue declined by 5.3% in Q2 against a challenging macro backdrop. Altice Media continues to occupy a strong position in the market, thanks to a solid performance of all its brands. Altice Media TV channels enjoyed a 7.6% commercial audience share in Q2, BFM TV was the top French news channel, channel for all days during the quarters, kid channels RMC Découverte and RMC Story achieved an audience increase of 0.3 percentage points year-over-year. In digital, finally, Altice Media is also showing very strong growth compared to last year. Turning to the next page, you can see the summary financial for the Q2. Total revenue declined by 2.6% and EBITDA by 5.7%. In addition to the drop-through of the residential revenue decline, which we expect to improve in time, there were three other items to not explain the EBITDA trend. Firstly, the construction drag on revenues and consequently on the margin. This is a headwind we previously outlined, which we expect to continue to impact through the year, given we are reaching the end of the construction activity for each PC. The other hand, remember that we do not consolidate today the recurring and growing wholesale revenues of XpFibre itself in the Altice France perimeter, which is high-margin and continues to grow significantly. Secondly, network OpEx increased year-over-year as we continue to deploy more mobile sites in order to identify our mobile coverage. Finally, direct and indirect energy costs related to the fixed and mobile network stepped up slightly year-over-year in the Q2, as expected, and as you saw already in the Q1. The key to driving an improved EBITDA trend is clearly service revenue growth, as outlined in our midterm guidance, and we remain focused on improving this trend. We expect to return to an improved EBITDA trend by the Q4 of this year. Total CapEx was EUR 562 million in the Q2, and consequently, total working free cash flow was EUR 470 million. We see a material opportunity to improve operating free cash flow through reducing capital intensity in the midterm, a point that will remain a key focus for us. In the meantime, CapEx levels will remain under control. For the full year 2023, we expect CapEx to be below EUR 2.3 billion. On the supplier matter, Altice France was doing business with 8 affected suppliers, with a total volume of business representing less than 2% of its expenditures. Most of these suppliers have already been terminated today. The rest will be terminated by the end of 2023. More precisely, out of the 8 affected suppliers, one is in charge of some FTTH rollouts, with terms and conditions, including pricing, fully aligned with other subcontractors, and the transition won't affect at all our cost of rollout in France. For the 7 other affected suppliers, 90% of the volume of business has already been stopped today. Slide 8 shows you the free cash flow waterfall for the Q2. Interest costs amounted to EUR 351 million, and for the full year 2023, we expect annual interest costs of approximately EUR 1.3 billion, which includes the full impact of the recent amendment extent transaction and floating rate exposure. Cash taxes amounted to EUR 50 million in Q2. Semi-working capital and other was a EUR 93 million outflow in the Q2. In the first half of the year, we have seen mainly two items impacting our negative working capital trend. Firstly, there have been some delays in payments related to the construction activity and maintenance performed for XpFibre. We expect to get part of this back in the second half of the year. Secondly, we are now seeing first signs of accrued CapEx reduction. Our cash CapEx currently is higher than our accrued CapEx, resulting in a negative working cap flow, which we expect to normalize in the second half of the year. In line with our previous comments, we expect to show better change working capital trend in the second half of 2023. Below free cash flow, in order to bridge to the change in net debt quarter over quarter, we note three main items. Firstly, restructuring cash out was EUR 39 million in Q2. Up until now, we have already cashed out EUR 240 million, representing approximately 80% of the total restructuring amount. Secondly, we paid the second installment of approximately EUR 50 million related to the Coriolis acquisition. We have one more payment of EUR 65 million to be made in 2024. In addition, we purchased IRUs for an amount of EUR 10 million in the Q2. Finally, financing flows and other, mainly consisting of securitization and factoring, totaled approximately EUR 100 million. The decline in securitization and factoring is seasonal and consistent with prior years. Following an inflow in Q1, this amount has remained stable compared to last year. On slide 9, we show you an update on XpFibre. XpFibre financials are not consolidated today, and we own 50.01% stake, with a path to control via a call option on a small incremental equity stake. As you know, XpFibre is the largest alternative passive FTTH infrastructure work center in France, which will soon comprise of over 7 million FTTH homes in the medium and low-dense areas of France. As you can see on the left of the slide, the vast majority of this network is now deployed, with over 6 million homes available at the end of Q2. In the middle of the slide, we show the penetration rates for XpFibre, split by total and medium dense areas. As you can see, the penetration has continued to increase in line with our original expectations, with progress made since our full year 2022 update. In the mid-medium dense areas, we have already built 100% of lighted homes, and you can see very high penetration already today. In the long run, we expect high penetration, more than 85%, due to the fact that there is no case for overbuild of this network... The midterm financial profile of XpFibre is very attractive. We expect revenue of EUR 700 million, resulting in EBITDA in excess of EUR 600 million at an infrastructure margin. In 2023, we'll already be making good progress toward this. In summary, there is significant value in XpFibre today, and much more within the next 2, 3 years, and we believe a very high equity value sits within our stake today. With that, I will hand over to Gerrit Jan. Thank you, Malo, and hello, everyone. Turning to page, to slide 10, where we show you the SFR capital structure and the debt maturity profile. As a reminder, at the beginning of the year, we completed an amend and extend transaction on the 2025 and 2026 term loans. We extended approximately EUR 6 billion, which was around 75% of those loans, and we extended those to August 2028. That transaction significantly improved the average maturity of the SFR debt capital structure. Pro forma net debt amounted to EUR 22.9 billion at the end of the 2Q, and we had a blended weighted average life just short of 5 years, and a blended weighted average cost of debt of 5.6%. At the end of the Q2, total pro forma net leverage was 6 times, 6.0 times on an LTM basis. These leverage metrics do not take into account our valuable stake in XpFibre, which is continuing to perform well and provides us with significant optionality. Our leverage target of 4.5 times net debt to EBITDA, does remain unchanged, and we are committed to deleverage and have several levers to achieve this, both organic and inorganic. We'll go through these inorganic options on the following slide. Moving to slide 11. Here we outline our absolute priority today, which is to delever. We are focused on addressing our nearest maturities, which are in 2025 and 2026. We expect to delever by 1 full term within the next 12 months by taking inorganic actions. We want to get back to normalized cost of debt, which includes the unsecured layer, and improve the weighted average life of our capital structure. In order to achieve this, we realize we need to execute on one or more of the inorganic actions we have available today. Assets which we are looking to monetize include data centers, amongst other options, and none of these options are mutually exclusive. Recent events with respect to the Portugal investigation, have meant discussions on the data center sale have been extended compared to our previous expectations. We confirm today, however, that data centers remain an active discussion, and we will update you further on this once there is a material development. With XpFibre, the base case remains that we reconsolidate this high value stream of wholesale revenue through exercising our call option on a small percentage of the equity. We do also have a plan B, and we have a plan C. Plan B is to recap XpFibre, either the full entity or our stake, and we also have plan C. The next 2 bullets on the slide, strategic equity options and consolidation, will remain under consideration in each case. As we have explained before, it is not always smart for us to go into full detail in an open forum like this, but we want to be extremely clear today that there are many inorganic levers that are under discussion and available for us to implement on in the next 12 months. Finally, additional equity from the shareholder remains an option on the table, too. As Patrick clearly mentioned earlier, advisors have been hired on several of these streams. We want to be very clear to you today that we are fully committed to deleveraging Altice France. We know this requires actions and not words, and we want to assure you this is our absolute priority today. It is the number one focus and the key takeaway that we want to leave with you. Sam, over to you. Thanks, Gerrit. That concludes the prepared remarks today, and the remaining time will be used for Q&A. Like yesterday, we ask if you could stick to one question per institution, please, so we can take as many questions from as many of you as possible. We'll remain available to take any questions offline after this call as needed, should there still be any outstanding or open questions. Operator, we're now ready to open the floor to Q&A. Please go ahead with the instructions. Thank you very much. If you'd like to ask a question, please press star and the number one on your telephone keypad. We will pause for a couple of seconds to gather all the questions from the queue. Thank you. We have our first question from Nick McDonald, from Bank of America. Your line is now open. Hi, good afternoon. Thanks for taking the question. Could I ask, firstly, on the operating trends, I think I heard the comment about EBITDA stabilizing or growing in the Q4. Could I just clarify that? Is that in year-on-year terms, and does that apply to the service revenue trend as well? Secondly, could I just ask as well on the inorganic levers, how advanced are you on the data center sale? Is that something that you expect to update on in a matter of weeks, or is it or is it months? Thank you. This is Malo. Thank you, Nick McDonald, for the, for the question. I'll take the first one, I guess Dennis Okhuijsen will take the second one. So on the operating trend, yeah, as I, as I mentioned, you know, we really see, you know, for Q4 of this year, a much better trend. Year over trend for the EBITDA, which will be sustained by better trends in the service revenues, and that will be in the fifth. Yeah. I think on the inorganic levers, I think on the data centers, the discussion is very much active, as it was. You know, we were hoping to conclude it, I guess, in the summer, summertime. It might be slightly delayed, and it's not gonna take only a few weeks to bring it to closure, but we are still feeling confident on the process and the, and the discussion on the data center sale. I think also with the other, you know, inorganic options, you know, we are doing them not sequentially. I think we're doing a lot of these processes in parallel, because we, we do want to achieve the results that we want. As a result, we have many work streams running in parallel, of which the data center is clearly most advanced in terms of closure. Rest assured, on all the options Gerrit Jan has been outlining, we have advisors, we have processes in place, and we feel confident we can give you a good update when we present the Q3 numbers. I think we can probably go in a bit more detail on the various work streams. Rest assured, we're not sitting still. We're very active as we are outlining today. Okay, thank you. Thank you. We have our second question from Tom Gibney of BNP Paribas. Your line is now open. Hi, good afternoon. Just with respect to the XpFibre net debt guides, you, you appear to have changed that a little bit. Previously, you said that there would be cash flow breakeven at XpFibre, and now it's saying that we're going from EUR 2.1-EUR 2.5. Just wondering what the reason is for that change, and whether that's right, that there has been a change. Also, I just wondered if you could, you, you, you said there was 4 items which affect your liquidity restructuring costs, second installment payment. There was the third one, and I just wondered whether you could repeat what that, what that third item was, please. Explain a little bit more about. Okay, Tom. Malo, please, XpFibre. Yeah. You want to cover first? Yes, on the confusion, nothing has changed. As you see, you know, on page 9, we're still guiding to in the midterm revenues in excess of EUR 900 and EBITDA in excess of EUR 600. The net debt at the end of 2023, what we have been saying on that the company is turning cash flow breakeven in the course of 2023, meaning that by end of this year, you know, you won't see any more increase in the net debt. That's why today we are getting you to what we believe is the maximum net debt that you will see, you will see at exit, unless, of course, we do a recap. Yeah. You know, in the status quo scenario, this is the max net, max net debt, you should see for the day. Just to be clear, to add precision on what Malo says. As you can see, we have already built more than 6.2 million of the 7 million we have to build. Remains 800,000. Some of them will be completed this year. Next year, we'll have a few hundred thousand to be done, which means 2026, 2025, sorry, 2025, 2026, there will be almost zero CapEx down there, which means the EBITDA will convert into 90% the free cash flow. That, I think, answers precisely your question. Malo said he's guiding EBITDA above EUR 600 million, and I think will be more if we wait a bit more in time, because EBITDA is growing by, with revenues, and revenues growing by penetration. The penetration of the homes we deliver this year is not at the level of the home that had been delivered three years ago. You have both a ramp-up of growth of homes passed and a ramp-up of penetration. All the operators in France will have zero DSL customer. Everything will be migrated to fiber. You could expect this asset to be 90% penetrated, at least, with, as we said, revenue of at least EUR 900 million. The day we take control of it, and we consolidate it, we will not consolidate EUR 900 million of revenue because part of this revenues are intra-group revenue. They are coming from SFR. We will consolidate 100% of the EBITDA, which we guided above EUR 600 million, which I just mentioned, will convert 90% into free cash flow. Level of debt will be maximum this year, then we start to go down in debt, except if we do a recap. Okay? Sorry, The second question was the fourth point of your free cash flow. Yes. Your exceptional stuff. Yes. on free cash flow, Malo. To be extremely precise, if we take them one by one, I think the first is Altice TV. As we guided previously, we expect this year to have a negative cash outflow for Altice TV of a bit more than EUR 100 million. Remember that, you know, in Altice TV, we have the extensive, you know, championship rights, but those rights will end at the next of this coming season, meaning that from July 2024 onwards, we expect Altice TV to be breakeven. That's the first one. The second one is the restructuring program that we have in France. We are getting to the end of the cash out related to that program. This year, we guided to around EUR 140 million of cash out. There should be almost no cash out next year associated to that program. The third one is the M&A. The only, you know, outstanding payment for the M&A are Coriolis. In the Q2, we paid the second installment for EUR 50 million. As I mentioned, there is another installment of EUR 65 million to be paid next year, and there is no other payment due for any M&A acquisition. The last item is the spectrum. As you know, for the EUR 700 million, you know, we had to pay four times, EUR 118 million. Three payments were already being made last year and the previous year. There is still one payment to be made, which is expected this year. Yeah. In other words, all the cash item below EBITDA minus CapEx, below operating cash flow, has gone down from EUR 1.2 billion last year to roughly EUR 400 million this year, then going forward, going down to almost zero. All our EBITDA minus CapEx will convert into cash to serve interest. As we said, we expect EBITDA to grow, CapEx to decline, so the full cash flow position, operating cash flow position of the company will be available for debt service without the inorganic action that we are going to implement. Thanks. What, what would be the, at XpFibre, what would be the, the, just to follow up on that, that point, what would be the current, outstanding customer advances for the IRUs? I beg your pardon? What's the question again? Sorry. What's the current Excuse me. What's the current balance sheet liability related to the IRUs that have been sold? Liabilities? There is no liability. No, we are not, you know, it's not something we are disclosing. I think just, you know, the EBITDA numbers we are mentioning here for XpFibre are accounting numbers. Yeah. Meaning that take into account. We don't take for granted 100% of the IRU payment. No. which goes to XpFibre. Of course, you know, when a retail players buys IRU, it's for a long period of time. The revenues and the EBITDA associated with those customers is recognized over that period. Just, just to be clear. The EBITDA, we say, is an accounting EBITDA, it's not a cash EBITDA. Cash EBITDA is much better. Much higher today. Over time, it will be the opposite. Over time, cash EBITDA will be lower and the accounting EBITDA will be higher. Okay? Understood. All right. Okay, thank you. Thank you. Before we move on to our next question, if you'd like to ask a question, please press star and the number one on your telephone keypad. Again, please press star and the number one on your telephone keypad. Our next question comes from Sheenal Sarawagi from Investec. Your line is now open. Thank you for taking my question. Just repeating what Nick had asked to get a little more, more elaboration. You had mentioned in the commentary that residential services is expected to return to growth. I was looking to understand. Right now you have volume losses both in mobile and fixed. What is the plan strategy for a turnaround there? Okay. Sheenal, thank you for your question. I, I think this question will be for our CEO, who is on the ground, and he can give you more flavor on the, what's going on in the market and how he intends, he intends to, to improve the revenue trends on the customer side. Yeah. Mathieu, if you're on line with us, if you can take over, please. Yes, sure. Thanks. Hello, everyone. Happy to join the conference. As it was said already, we have seen in the market in Q1 and Q2, the market reaching a standstill with much lower volumes in terms of data. You will not discover that our competitors have lower net adds. If we look at our side, on the fixed side, contrary to the others, we did a better performance. We are still negative net adds in terms of fixed, but at lower levels than we used to be two a year ago. The reason why we are very optimistic about the fixed side is that, first of all, over the past eight months, churn is decreasing month after mo nth. Second time, the phone book prices have increased significantly, and I can give you some examples because we have seen huge differences in terms of pricing from a year ago. I'll give you one example: If you would take an offering at SFR a year ago, in August 2022, for mid-range FTTH offer, you would pay EUR 23 for the 1st year. Now you pay EUR 30. It's a +EUR 7 market in the price that we have. We have much fewer promotion. We have seen that across all the years. Finally, we have a mix of, and a quality of sales that is increasing quarter after quarter. Again, to give you a sense of that, last year, in June, we used to sell 60% of our FTTH offer on low range and middle range offering. Right now, a year later, in June 2023, we have 60% of our sales which are directed to mid-range and high-range products. There's a lot of embedded value in that quality of sales that we have, and we also have a huge leverage of embedded value inside our customer base. We see that the market has been very aggressive over the past 6 years, and there's a lot of discount in the customer base. Now, because we invest a lot in quality, because we invest a lot into detail- ... we have a tremendous growth out of this customer base. That's why we are optimistic on the fixed side. On the mobile side, I agree with you. The market has also reached quite a standstill, and our net adds have decreased compared to, to last year. You have to keep in mind that a large chunk of these negative net adds are linked to very low add, very low-end, value customer. By very low-end, I mean people paying between 0 and 2 EUR per month for the first 12 months. A large chunk of our negative net adds, north of, two-third, is linked to these low-value, customers. We're happy to let, to let them go, basically, because we monitor the revenue out of this low-value customer, and over the past 12 months, this revenue is stable. You have to look segment by segment. Yes, we have negative net adds, but if you exclude those customers, low-end customers, we are very close to breakeven. Okay, thank you for the response. Like, even if they are low-value net adds that you're losing, it's still impacting the residential mobile year-on-year. Thanks for that clarity. I had another one on basically inorganic cash flow. We have been discussing this for quite some time, and I understand from Gerrit's comment that we were expecting data centers in slow to be formed up by summer, it got delayed. Could you give a little more clarity or some more minute details into what are your expectations there? If the valuations have moved from there or anything around that with more clarity would be really helpful. Okay, Malo, please, on the data center. Yeah, I know. I think, you know, I think, you know, today we, we see the process is delayed by 2 weeks, but it does not mean that, you know, we expect any impact on the, the valuation of the data center. We are still, you know, discussing the same valuation with the potential parties on that, on the data center. Thanks, Malo. Our next question comes from Peter Jurik from Tresidor. Your line is now open. Hey, guys. Thanks for taking my question. My question would be more around specifically, you know, identifying the suppliers that you have decided to break relationships with and the impact there. I guess the question I would have is ultimately, you know, how have you identified these suppliers? Is it only the suppliers that have been identified by the Portuguese authorities, or have you identified additional suppliers internally? You know, is there... I guess of the suppliers that have been identified, were they all linked to Armando Pereira, or were they linked to other individuals within the group? And are you additionally doing more work through some kind of internal audit or anything else that you can give a little bit more detail on to potentially identify other suppliers or any other sources, ultimately of value leakage? And ultimately, you know, it would be interesting to also know how -- it seems like you, you know that, you know, how, how the flow of cash worked, and you talk about a 20%-30% markup. You know, how was that 20%-30% markup identified? Again, is that purely through the investigation of the Portuguese authorities, or have you guys actually done, done internal work to relatively quickly identify, look, you know, this guy, this supplier is buying this from Cisco. If I go directly to Cisco, I can, I can purchase it, cheaper so on and so forth. It would just be great to get more clarity exactly as to how you guys are handling, the operational, impact here. Thank you. Okay, Peter, thank you for your question. It's a good question, let's tell you what we can tell you. Most of the information we have is coming from the police investigation, which we are not free to disclose. Let's just remember it to everyone, that the inquiry is by the police is taking place now. People have been accused, the judgment is not done, the process is gonna take probably several years. In the police report that we received, there were some 100 companies, there are all kinds of jurisdiction, most of them starting in Portuguese and going throughout the world. Our internal process, before, now, and after, has been always to check who are our suppliers. We do KYC on our suppliers. Some are key banks in the world, providing money, monetization of the supplier payment, have also done a KYC, and nobody could find this array of companies, but the police. It took probably the police 5 to 6 years of investigation throughout the world to find and show us this list of 100 or so companies. Immediately after having received, as I said, this report on July 13, we put investigators all around the world, lawyers, accountants, checking all our subsidiaries, checking the subsidiaries of our subsidiaries. What we notably did was to send the last, the list of these 100 names, most of which were totally unknown to us, to our accounting department, to check if we had businesses with them. Well, as Malou said yesterday, globally, on the 100 companies, less than 10 or around 10 were doing business with us, us being, our key subsidiaries or the subsidiaries of our subsidiaries. On these 10 companies, we have identified the business flow with them for each of our subsidiaries, the amount of volume of business we are dealing with every year. We have been able, first of all, based on our lawyers' advice, we immediately stopped on July 14 in the morning, payment and orders to all these guys. All these guys being a group of around 10 people, 10 companies throughout the world. Second, we have already managed, within 3 weeks, to terminate 70%-80% of these contracts. Those we, we haven't been terminated yet, are companies supplying manpower, you know, field services, construction services, because we need to migrate these contracts to other suppliers. In terms of your second question was, were they all linked to this gentleman or this gentleman? We don't know. In the report of the police, they all come to several names, some of which we all know are here, but some of which we never heard of before. Most of them, I must say, without disclosing a big secret, most of them are being Portuguese people. Based on the names we found in this report, and also investigation we carried out, we put on leave or we fire, depending on the local employment laws, the people mentioned in the reports, plus some more that we interviewed, mostly in the purchasing department, in the recent last 2 weeks. Now, in terms of how do we know about the kind of margin, is because we have been able to find, for some of these paid companies, their P&L, and we have been able to identify the level of margin they are doing. For those who, for example, you mentioned the name of the company, for those we can buy direct, we have been able to identify the margin. The margin, as I said, is not 20%-30%. This is a global number. For example, this morning, we mentioned, or not this morning, right now, we mentioned one company in France. We think the margin is more in the order of 15%. It depends very much on the kind of supply we had, sometimes 15%, and again, people working at the same conditions that other subcontractors, and we have redirected the business either directly to the main hardware supplier. By the way, this hardware supplier is mentioned here. They are very well known in the world, and they probably do other similar businesses with other guys in the world. Second thing, we have been able to move most of the suppliers, either by buying directly, that's for the easy, an easy catch, or by transferring to another, existing subcontractor or a new one, in the different countries. It's a very, very big work, and it has been extremely intense for all our people throughout the world. I can say, and I want to insist, that today, there is not any dysfunction in the organization, anywhere in the world. The brand has not affected anywhere in the world, and in Portugal, where we had the most noise, and where we are number one in our business, our subscriber reputation, our brand loyalty reputation is not affected so far, so we don't see any impact whatsoever in our businesses right now. The only impact I would see, would be a positive one, when we may save some money in buying direct from, in some cases, but we are talking about minimum amount per, per companies. Great. Thank you for the thorough answer. Thank you, Peter. Our next question comes from Aman Mahal, from PGIM. Your line is now open. Hi there, just a few questions for me, if possible. One I asked yesterday on the AI call, will ask here as well. Vendor financing lines, I guess there's 3 main banks in the year-end account, about EUR 1 billion of table outstanding lines. Could you just flag if you're concerned of any risk, of any of those lines being pulled? I guess, second question around 2025 maturity. I guess there's obviously various disposals you're looking at, could you just flag as when you expect to take care of those maturities? I guess the third question, Patrick, you mentioned 4 key leads at the beginning, empowering local management teams, sell non-core assets, buying back debt and contributing equity. Could you just maybe expand on the buying back debt point, just to get a bit more clear on what you're thinking on that front? Thank you. Maybe, thank you, Aman, for your questions. Maybe you start, Gerrit, with the monetization and the maturities. Yeah. I guess on the vendor financing lines, you know, I, I think same as we mentioned for all of these international yesterday, you know, this, this, we sit with, with a number of relationship banks. And, you know, we've, we've gone through volatile times in the past, and never in the past have the banks canceled these lines with us. We don't expect any impact this, you know, on, on the vendor financing lines, in, this, this time either. And we have no indication that, that banks will, will cancel these. I think, you know, on top of that. Also, you know, I guess, as a, and almost more specifically for France than AI yesterday, you know, we have EUR 120 million drawn under our revolver. As a matter of principle, we've always kept these vending, vendor financing lines, total facility, potential total facility size, lower than our revolver sign, size. Just in case, which again, we don't expect, but in case you get cancellation of lines, you can always, you know, use your revolver to compensate. Nick, on your question on the 2025 maturities, you know, I think that, you know, they are a priority for us. You know, I think as we've mentioned, you know, inorganic options, you know, we are committed to effectuate those in the next 12 months. You know, I, I think ultimately, depending on markets and, and, you know, we, we might, we might come to market on the 25s, you know, before year-end, if we feel comfortable to refinance those ahead of the inorganic options. Depending on the speed of the inorganic options, we might not do that, because we then can take care of the 25s with your inorganic options. There's a bit of interplay there. As Dennis was saying as well, we're working on all the, all these options in parallel and not sequential. You know, we think that it's, it's a fluid situation, and we'll, and we'll decide in the coming months, but we'll know what we're doing with the 25s before year-end. I think, you know, as we have now one process, which is the data centers, which is more advanced, that is clearly gonna be targeted to reduce debt of the 25s. In first instance, we are prioritizing the shorter dated maturities. It's clearly that as, as we're executing on the inorganic options, you know, we might have the ability to buy back debt at a significant discount, you know, given where the trading value is. Means that if we are selling something, we can actually disproportionately reduce more debt, which is clearly in all our interests, to get the leverage to the 4.5 times target, as we have had that target for some time. Thanks. Just, just on buying, I, I guess, sort of you touched on that buying back debt point. Is that, is that the reference more broadly that you were making earlier? Yeah, I, I think the buying back debt, I think we're, we're trying to make the point that, you know, right now, as the debt is not trading at par, you know, buying back, you know, for a certain amount, you get a disproportionately an amount of deleveraging. But we also wanted to make sure that we're not gonna do that at the expense of risking the maturity profile. So the maturity profile and the 25, 26 maturities clearly have great focus. you know, we feel very comfortable with all the options that we have and the liquidity that we already have today, the 25 and 26 maturities are manageable, and then, then the deleveraging that we are looking for, which is at least a turn, you know, in the next 12 months, I think we will achieve that by buying back debt at a discount. Okay. Thanks very much, guys. Question comes from Vivek Khanna from Deutsche Bank. Your line is now open. Hi. Good afternoon, most of my questions have been asked already, but I had a quick 2 follow-ups, if I may? First, a very simple one. What percentage of your cable network has been retrofitted to fiber? I'm assuming that on the balance, you probably have wholesale agreements in place to offer fiber. The second question, if I may, you talked about distributions and slide of distributions from XpFibre, sort of mitigating declines in contribution from the construction activity. Just to get a sense, you know, what do you think the distributions would be in 2024, as an example? Thank you. If any, at all? Vivek, this is Patrick. Could you please clarify your second question? I'm not sure I got... The first one is easy. I will ask Mathieu to answer, but the second one, I'm not sure fully understood. Sure, sure. Sure, sure, sure. I mean, obviously, Patrick, with the decline in investment spend at XpFibre, the free cash flow is going to have a significant inflection point. Yeah. I'm just trying to understand when, as a- Okay ... restricted group, we could potentially start to receive dividends from that entity, obviously, not including any potential recapitalization. Okay, okay. Got you. Got you. Mathieu will take the first question, let me answer the second one before. It's very simple. At the moment, as Malo explained, we own 50.1% or 50.01%, I think, of XpFibre, the rest being owned by our partners, AXA, Allianz, and OMERS from Canada. This is probably one of the most successful wholesale JV for fiber in Europe and probably in the world. It's growing revenues very rapidly and steadily, most of revenues are going down into EBITDA. Today, as we build, we consume this EBITDA into CapEx, as explained before, we'll finish our build, 99% of our build by next year.... which means in 2025, it becomes a cash cow. It is in our shareholder agreement that once construction is fully achieved or mostly achieved, we have a possibility to call a few percentage of the shares from our partner friends, and then consolidate the whole asset. The moment we consolidate this asset, it will be, of course, part of the full leverage entities that we have today. We expect this to then to, to deliver hundreds of millions of cash flows, which will, of course, you have to count only 50% of those, because the dividend of that will be 50% or 50%-53%. The cost to buy the control is already embedded in our financials, because if you look at the negative working cap on some of the construction revenue, this, this will pay largely for taking back this position. You can consider today that the end of the construction stream and margins that we had in the last 3, 4 years, will be superseded in 2025 by a higher revenue stream and cash flow stream to our group, contributing, of course, to the operating cash flow, serving debt and interest of our total structure. Debt going down over there because the debt level is now at peak, because the financing of the construction has been done by the revenues and EBITDA, but also by IRU upfront payments. This is already accounted for in the EBITDA we mentioned before. I think that's much, as much as we can say here. Dennis explained that very well 3 years ago when we entered into this transaction, that the value of the construction phase from 2019 to 2024 is nice, but the value of the asset plus its construction phase is much, much higher and highly contributive in cash to serve interest on our debt. First question, Mathieu, if you can answer, where is the status of our 9 million homes passed? How many have been modernized, how many are left, and what do you do in the zones which are not yet modernized? Thank you. Yeah. A quick summary on the footprint we have in fiber outside of the specific network. As you mentioned, Patrick, we have close to 9 million homes passed in fiber. We have 1 million FTTH already fully owned by SFR, okay. Then we have roughly 8 million of FTTB, 2.7, we are in a very dense area, and the rest is in medium and low dense area. We expect the transition toward FTTH to be achieved by the end of 2026. Right now, we have made a few hundred thousand migration toward FTTH, but this program should be done by, again, the end of 2026. Thank you. This, this explains also why Malo is guiding for lowering CapEx year after year, because we are still spending money upgrading our fiber, our cable networks into fiber, but which means also that by the end of 2025, 2026, all of XpFibre and all of our cable, all the network will be fiber. This is what I said in the preamble of our presentation today, we will be the only independent operator controlling 40% of the French fiber. Not controlling in terms of distribution, but in terms of asset owning, and half of it being shared with our partner friends in XpFibre, the rest being 100% owned by SFR. Fantastic. Thank you. Our next question comes from James Traynor, from Aperture Investors. Your line is now open. Thank you for taking my questions. I have 2 questions. Firstly is, when you speak about inorganically leveraging by 1 turn within 12 months, you know, that implies quite a material amount of proceeds coming into the business if we think about company doing about EUR 4 billion or just shy of EBITDA. Is this roughly correct? I know you're also speaking about buying back bonds below par. If you comment on, does this roughly match your internal plan for proceeds coming into the business? Secondly, is on the ARPUs in your fixed, it seemed like they were weaker quarter-on-quarter. If you could just speak about what was happening there, that'd be much appreciated. Thank you. Thank you, James. This is Patrick. I'm going to take the first question, and the ARPU question is going to be for Mathieu. To deliver 1 turn is EUR 4 billion, you're totally right. To deliver 1 turn of EUR 4 billion, by buying back debt, you need probably much less than EUR 4 billion today. We have a potentiality of selling assets for higher value than that in France or somewhere else, and that will contribute enough equity to deliver within 1 year. We are super confident, and we will deliver 1 turn within 12 months, as we said before. Okay. Now, please, Mathieu, on the ARPU question. Yes, please. On the ARPU question, did you discuss the fixed or the mobile? Sorry, I didn't get it. Fixed, please. Oh. Fixed, please. Thank you. On the fixed ARPU, as I said just before, we are really working on value. Clearly, the ARPU on fixed is growing steadily over the past 8 months. As I mentioned, no promotion anymore. A year ago, we used to sell FTTH for EUR 10 per month in a promotion. We don't do that anymore. Nothing is less than EUR 20 for the first 12 months. We are growing steadily ARPU on the fixed side. Also what you have to keep in mind is that as long as we grow the front book prices from EUR 10 to EUR 15 to EUR 20 to EUR 30, and then there is a bill shock after 12 months, the customer, the customer after 12 months has no incentive basically to switch from one operator to another operator. This will lead also to a lower churn and a higher ARPU in the end. That's what's happening on the fixed side right now. Great. Just for the, the weakness in, in this quarter, what was behind that, please? I guess that you're referring to the, to the, to the decrease in revenues, the, the decrease in revenues is directly linked to the customer base decline, basically. It's not an ARPU matter. It, it's really a base effect. Okay. Thank you very much. Our next question will come from Antonio Barraco of BlackRock. Your line is now open. Thank you very much, Patrick and the team for the presentation and the explanation. I have a couple of questions, if I may. The first one is in reference to, Patrick, your comments in terms of the four key measures, contributing equity, and I think Gerrit also in the slide 11, also mentioned the possibility of additional equity from shareholder. How should we think about the potential for that additional equity in terms of what will trigger you contributing that equity? What will be a timeline for that? What comfort can we take that that equity would be enough to plug any hole in case disposals do not go according to plan? That's the first question. The second question is about cash flow for the remainder of the year. You guys have outlined how cash flow should improve in 2024. Between concerning the, the cash flow burning in the, in the first half of the year, you said some things may revert in the second half. Can you talk about what should we expect in, in terms of cash flow in the second half of the year, and to what extent that is dependent on that recovery that you are seeing in Q4? Thank you very much, guys. Okay, Antonio, thank you for, for your questions. Malo will take the cash flow for the second part of the year question. First one, as we said, we want to deleverage, 1 turn, and this can be done by, as we said, equity contribution. When this equity contribution will be done, it will be done, when, we have disposed of certain assets inside France or outside of France, and that will, enable to bring cash to buy back some debt. The equity contribution is buying debt at a discount, therefore, for reducing the leverage of 1 turn independently of the organic growth of the company. The inorganic is to raise, one way or the other, EUR 3 billion of equity, plus or minus. On the, on the, on the cash flow, cash flow question, so indeed, net debt has increased since the end of 2022. You have seen the detailed financial statement in the slides we provided today. You know, part of that was due to the negative change working capital, for which we expect a much better trend for the rest of the year. So, you know, you, you should not expect significant growth in the net debt for the next six months. Thank you very much. Just to clarify the answer on the equity. The equity contribution will be the disposals and bringing back that cash into the company for buying at debt of discount. That's how should we think about that equity contribution? Antonio, to think more precisely about it, look at what we did in 2008. We sold assets, and we brought in cash to buy back debt at a cheaper price, and this is how we contributed, and we're gonna do exactly the same way, the same thing. Now, to discuss in details how we're gonna do it, I cannot do it now, but we have a lot of options. One, is asset disposal, bringing cash. Two, a lot of people are calling to come and be partner with us. Three, bringing cash from our other businesses. Okay? That's clear. Thank you. Our final question comes from the line of Simon Duff at M&G. Your line is now open. Hi, can you hear me? Yep, we can hear you, Simon. Perfect. Yeah, just quickly on the inorganic options, can you just talk through this idea that the core scenario is to reconsolidate rather than monetize the XpFibre stake? At the moment, I think that would be relevering based on it being 8 times levered. So what's the timeline for any reconsolidation that would have a positive leverage impact on the SFR silo? Second question is on these media assets. You know, can you just talk about whether there are any active discussions? Is the intention to sell them piecemeal or as a single asset, and what kind of valuation can we expect from them? Okay. Thank you, Simon. First thing, at present, I think Malo disclosed that XpFibre is generating EUR 300 million of EBITDA, EUR 300+ and with EUR 2.something of debt. As you see, it's 8x levered, so it's not the right time to consolidate. Secondly, I explained to you that we will finish the construction of this asset next year, because the moment the asset is just is still cash flow negative on an annual basis. It will become cash flow positive by the end of next year. You can expect this asset to grow by approximately EUR 100 million of EBITDA a year. It's end of this year, cash flow positive. Yeah, end of this year on a monthly basis, not for the year. Okay? Next year, it's cash flow positive, which means the debt starts to flatten, and the following year, it's cash flow positive and free cash flow positive, so the debt starts to go down, right? Remember, we raised this debt, and this is infrastructure debt at a very good price. What is it, Gerrit? 2%-ish. It's, 3%, 3%. Okay. Yeah. 2%-3%. All right, you got EUR 2.something billion of debt at 2%-3%. We're talking about EUR 75 million of interest, and the EBITDA is growing by EUR 100 a year, approximately. By the end of next year, by the end of this year, we're gonna be operating cash flow positive. By the end of next year, we should be free cash flow positive. Until then, there is no point of consolidating anything. Now in 2025, if you want to put yourself in perspective, then you get another EUR 100 million of free cash flow, of EBITDA, I'm sorry. You still have the same level of debt even going down. This is a moment where this asset leverage is lower than our current leverage. This becomes a moment where we think about consolidation, which is 2025. This will still have a good way up on EBITDA and even more on free cash flow, as we expect much higher EBITDA by the end of this decade. This is an asset forever with equity value, which has nothing to do in terms of trading with other telecom assets in Europe. Concerning your second question, the media business is not for sale. Although we've been approached by a number of people, this business is not for sale. We are open to any discussion on anything, but this is not our core reflection at the moment, and this is not what will bring the leverage down to where we want to bring it. Okay? Thank you. Just to be clear on the XpFibre asset then, so it's not part of the one-term leverage plan, deleveraging plan? Nope. No, it's not. Perfect. It's not base case. Yeah, the base case is we consolidate in 2025, and we start to report the operations, and we benefit from the cash flow from the assets. But remember, the key objective for us is to fix the capital structure, and we're outlining all the options that we have. And we feel comfortable that there are other options that are more easier, you know, and better and smarter for us to execute upon than go into a plan C or B on the XpFibre stake. But we're just putting out there all the options that we have, and we have work streams with all the options, and we update on Q3, you know. But the base case is we reconsolidate XpFibre in 2025. There are other options just in case. Excellent. Thanks very much. Thank you very much, and this does conclude today's conference call. We thank you for your participation. You may now disconnect. Thank you.