Welcome to the Iliad call, analyst. My name is Val. I will be your coordinator for today's event. Please note this conference is being recorded. For the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the presentation. If you are connected by phone, this can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero. You will be connected to an operator. I will now hand you over to your host, Thomas Reynaud, Chief Executive Officer, to begin today's conference. Thank you. Good morning, everyone, welcome to our Q1 presentation. I am Thomas Reynaud. I'm in our Paris head office right now. We have Nicolas Jaeger, Deputy CEO, Nicolas Didio, Head of IR, and we have in Warsaw, Jean-Marc Harion [Non-English content] Jean-Marc. We have in Milano, Benedetto Levi with us, our Italian CEO of Iliad Italia. Q1 was a good quarter that really underlines the strength of the group. I think that if we look at the key takeaways, the number one topic is growth. Revenue growth is strong at 34%. This is boosted by the first full consolidation of Play in Poland, and excluding Play, organic growth would be a solid 5%. On the commercial front, momentum was good despite the commercial difficulties due to the lockdown and the closing of our distribution channels and mainly the retail stores. If you look at France, we continue to see a good balance between growth and value. Italy had a decent momentum in spite of the fact that most of our stores were closed during weekend. In Poland, we are stable in postpaid but with a strong ARPU uplift. In my mind, these good commercial results are the consequence of the strong network strategy that we have. The rollout dynamic continues to be very strong. As you know, we see the rollout of 5G and fiber as enablers for Iliad to gain market share. In France, we are the leading 5G operator in terms of number of radio sites. We cover more than 55% of the population, and we have the intention to accelerate with ambitious target to be above 80% by the end of the year. In Italy, we had good net adds of 300,000 new mobile customers. We continue deploying our mobile network at a rapid pace, crossing the 7,000 threshold in March. Clearly, Iliad Italia has made great progress in shifting an increasing proportion of the traffic on our network. This is the reason why we announced this morning a review of our full-year guidance. We decided to upgrade that guidance to a positive EBITDA for Iliad Italia for the full- year. Probably the main highlight of the quarter is Play with the first full consolidation. We are clearly in advance in terms of integration, and Play is a very promising acquisition, both in terms of revenue growth and cash flow generation as the result of our first operational decision. Clearly, we remain focused on growth opportunities. We just launched our B2B activity in France at the end of March with a very positive response from our potential customers and various distributors. This is good news. In Italy, we are finalizing our broadband launch. Stay tuned. It's not impossible that we push it back to right after the summer. We need to make sure that our systems are ready. Finally, during this quarter, and this is very important, we strengthened our balance sheet. We closed the deal with our strategic partner, Cellnex, in Poland for EUR 800 million. The net proceeds of tax will be fully allocated to deleveraging. Good news, the deleveraging of the balance sheet will continue. We have decided to start the sale process of our 30% stake in our French tower co. The bigger part of the proceeds will be allocated to reduce the level of debt, and a smaller part will be used for our French 5G program. That is why we review our cash flow guidance in terms of operational cash flow in France. Why we decided to take that decision? As we explained two years ago at our 2019 CMD, we want to improve the return on capital employed. One of the important lever to achieve that objective is to set up infrastructure partnerships. We did it with Cellnex in France, Italy, Poland, and with InfraVia on fiber in France. Clearly, it enabled us to boost our investment firepower. I do believe that at the beginning of the implementation of those partnership, it was important to keep a stake to secure the implementation of the partnership from an operational point of view. Today, things are on track in France in terms of rollout, in terms of cooperation between French Cellnex team and Free Mobile team. There is no need from an operational point of view to keep that stake all the more that the market seems not to give the full value to that infrastructure stake. The second reason we took that decision is that 5G represents a clear opportunity for us to increase our turnover, and we are accelerating our plan to enter in the market combining services and handsets. It makes a lot of sense. We plan to have more than 80% coverage by the end of the year. It's too early to give you a precise number. We put under review our 2021 France operating cash flow guidance. We will come back to you early September. The new guidance will reflect the part of the proceeds allocated to 5G and, to a lesser extent, the securitization of our procurement strategy in electronic chipset and mobile equipment in a very volatile market. Maybe to finish, just a few comments on the integration of Play. As you can see on Slide 17, we are very pleased with the integration process so far. The teams in Poland are of a very high quality, and the discussions are very fruitful on both sides. We took the opportunity to extend the executives committee from seven to 10 members. We appointed six new members, of which three are women. We set up 10 workshops, and clearly we identified some strong initiatives in order to boost network quality, to improve our distribution channels, and to have a more powerful marketing strategy, increasing the digitalization of some channels. Finally, we closed the transaction with Cellnex. This transaction is significant because it will enable us to accelerate our network rollout in Poland. Nicolas? Thank you, Thomas. Let's move to Slide 21. Group revenues. The group revenue rose by almost 34% to EUR 1.85 billion in the first three months. It's led by three factors. The first full quarter of consolidation of the group business in Poland, which generated approximately EUR 400 million revenue during the period, a 26.7% increase in revenue billed to subscriber in Italy, and the confirmed structural return of growth for France with revenue up 2.4%. It's a solid growth, primarily driven by service revenue, a 28% increase including Play and 5% on a like-for-like basis. Clearly lower than Q1 2020 due to the negative impact of the lockdown in various regions and an unfavorable basis, as you can see on the right-hand side, a basis of comparison compared to Q1 2020. Lastly, the group revenue profile for Q1 2021 is also a reflection of our new European scope, as over 30% of our consolidated revenues are now generated outside of France, mainly Poland and Italy. Let's move to Slide 22 and dive on the French trends. Revenue rose by 2.4% during the period to over EUR 1.2 billion, continuing the strong momentum seen in 2020. Growth for service revenue was relatively even across our two businesses, with ongoing acceleration growth on the fixed business. Fixed service revenue are up 4.4% year-on-year. This is very solid, and it is driven by a combination of both volume effect and increase in a higher value proportion among the subscriber base. Mobile service revenue up 3.4%. Growth for mobile business was held back by the impact of COVID-19 pandemic, more specifically on ancillary revenues such as roaming and value-added services. B2B revenue are still low in value terms, but saw a double-digit growth of 20%, mainly driven by Jaguar Network. Let's move on ARPU. Fixed business ARPU is up EUR 0.13 compared to Q4 last year and EUR 0.60 year-on-year. This Q1 performance confirmed that the fixed business has strong ARPU momentum, directly resulting from a better subscriber mix and the effect of migrating subscribers to premium plans Delta and Pop. The upsell trend that we've seen in 2020 is continuing in Q1 2021. Wireless mobile ARPU is at 2.7%, like-for-like, to EUR 10.8, represents a more moderate growth compared to the 6.5% recorded in Q4 due to the value-added services we just discussed before. The growth of the mobile business is the direct result of our successful strategy of migrating customers to our 4G and 5G plan. Almost 65% of the base is today on 4G and 5G plan, linked to the constant improvement of the quality of our 4G network that we have significantly increased in terms of coverage, in terms of quality. Let's move to slide 24. Italy first. Despite the tougher COVID-19 restriction, we generated EUR 188 million revenues in Italy, up 25%. Iliad Italia kept the same brisk pace as in 2020 for its network rollout. At the end of April, it had almost 7,300 mobile sites up in the air, totally aligned with our full-year guidance of having around 8,500 sites activated by the end of the year. In view of that rapid rollout, higher traffic coverage of Iliad Italia with its own network, we have fast-tracked our profitability objective for Italy, and we now expect to achieve a positive EBITDA in 2021. On the right side, Poland. First quarter of full consolidation. During the first three months, Play generated PLN 1.8 billion, which is around EUR 400 million. Revenue is up 4%. The performance is mostly led by service revenue with increase in the ARPU B2C. The first quarter of 2021 was also very busy in terms of financial integration with all the bank borrowing facility refinance representing PLN 5.5 billion. The Play market delisting finalized on the 6th of April. The closing of the transaction with Cellnex for the 60% sale for around EUR 800 million. Let's move to Slide 26. France and Group is standing by its long-term objective for B2C and B2B markets. As indicated earlier, we have decided to monetize our 30% stake in On Tower France before the end of the year in the light of the limited valuation given to a minority participation by the market. Majority of the proceeds will be used to deleverage the group, and strengthen its financial structure. The rest of the proceeds will be devoted to accelerating our CapEx program for 5G infrastructure in France, and in a lesser extent, we have reviewed over the last two months, the procurement strategy, speeding up our inventories given the current tension and volatility on the electronic and equipment market. This led us to put under review our 2021 French operating free cash flow guidance, and we will give you a full update during our H1 results. Italy confirmed objective in terms of rollout and moving faster in terms of EBITDA breakeven. Poland, we confirm our operating free cash flow increase for 2021. As a conclusion, the group continued its growth strategy, confirmed financial strength in the first quarter. We delivered another good sales performance despite the fact that a large portion of distribution network closed during the period. Thanks to the successful integration of Play in Poland the group registered year-over-year 34% growth and over 30% of our consolidated revenue are now generated outside of France. Lastly, Q1 also saw us keep up the fast pace of the rollout, enabling Italy to reach EBITDA quicker and Free Mobile to be the leading operator in France in terms of the number of 5G sites deployed. Finally, to summarize our move on France, it's kind of shooting two birds with one stone, highlighting the significant value of our minority stake in infrastructure vehicle and grabbing the growth opportunity offered by 5G and securing our procurement plan for the risk of shortage. We can now open the Q&A session and happy to answer your questions. Thank you. As a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll be advised when to ask your question. Again, press star one on your keypad. Thank you. The first question comes from the line of Mathieu Robilliard from Barclays. Please go ahead. Good morning, thank you for taking the question. First, obviously, I had a question about the CapEx or rather the operating free cash flow guidance removal. I understand reading the press release and from what you said that you want to enter a new growth segment. I would suspect it's what it's called the subsidized handset segment in France. My question really is, I imagine that you would have always thought you would enter that segment one day or another. Therefore, if you needed to improve the network quality, that would have meant higher CapEx. Is that something that you always had in mind or has something changed and you actually thought in the past you could continue to grow your revenues without entering that segment and therefore, the CapEx envelope as it was sufficient? Really, in a nutshell, the question is, are we now realizing that in order to continue to grow better and more than the other players, you actually need a higher CapEx envelope? That's the first question. The second question is on the tower sale. I listened carefully to what you said about the reasoning to sell it, and I was wondering if the same reasoning could apply one day to your stake in InfraVia, whereby, if things develop as expected, maybe you don't need to be present in that structure. Thank you. Thank you for your two questions. Clearly, the question raised by the future sale of our 30% stake in France On Tower raised some questions. Clearly this is an opportunistic move for us to decide to reinvest a small part of that proceed into 5G. Why is that? We do consider that 5G is a game changer. It will enable us to address new market segments, to address the B2B market, and to address also that part of the highest value of the mobile market, which is the combination of services and handsets that we do not address. We also consider that 5G is a great opportunity in order to change the perception. We made huge progress in terms of performance of our mobile network, and sometimes we have the sentiment that there is a mismatch. The quality of that network will improve significantly in the second half of this year. On one side, we're going to benefit from the refarming of the 2.1 spectrum on Page 10, as you can see. It will enable us to boost our performance in terms of 4G download. We are already, Page nine, and this is in line with the objective that we set during our CMD in 2019 to have the best mobile network among the alternative operator. This is already the case in terms of 4G download. Clearly our ambition is to accelerate our 5G rollout. We decided to review and to upgrade our population coverage in 5G at 80%. Clearly what you should have in mind, and this is what we present on Page 13. On one side, just after the refarming, we will have 23% of the spectrum in France. This is a game changer. As I think we address only 16% of the French mobile market in terms of value, because we don't address yet the B2B market and the so-called subsidy market. This is a clear opportunity for us, and we want to take that opportunity. On the timing of the sale, Nicolas. On the timing of the sale for the tower, it will be before the end of the year. Clearly, we'll be opening discussion and we have within the agreement with Cellnex some clause that enable us to move on that sale. In terms of valuation, I will not give you what we have in mind, but clearly, the initial EV for us is a floor. Your second part of the question was the stake in InfraVia, but let's go beyond. I think it's a part of the call this morning. We do think that we have significant minorities on the Iliad balance sheet that are undervalued. We have a 30% stake in OTF. We have 40% stake in OTF Poland. We have a 50% stake in IFT. We have 30% stake plus in eir. Sometimes the market doesn't see the value of those assets. Clearly, we will be always very careful around the value of those assets. Does it make sense to sell our stakes in InfraVia quickly? No. The vehicle is still on the ramp-up phase, strongly investing. We are not at all in the phase where it has a very strong EBITDA/free cash flow generation that would maximize its value. It's a question not for this year but for a few years down the road. Thank you. The next question comes from the line of Nicolas Cote-Colisson from HSBC. Please go ahead. Hi, thank you. To follow up on the French guidance. Is the suspension of the guidance solely linked to the CapEx or EBITDA could also be a moving part if you were to get into the subsidized handset market? Maybe on that point, what's your approach on subsidies? In the past I think you've been very clearly against your competitors going into this market. My second question would be on Italy and the slow progress with the remedies sites. I was wondering, what are the issues there? Is that TIM and Vodafone not making space on the requested sites, or do you have any issues with the electromagnetic emissions, or is that in with mismanaging the process? Whatever the answer is, what is the solution there? How can the process be improved, can you call to the EC to intervene in the matter? Thank you. Just on the so-called subsidy market, Nicolas. I really mention so-called subsidy market. We stick to our principle. We consider that the subsidy market, the way it is done by some of our competitors, is a lack of transparency for the end user, for the consumer. Really the DNA of our brand is simplicity and transparency. On top of that, it's true that it has an impact on automatic renewal of the handset with a negative impact on the environment. This is the number one source of carbon emission. What we want to address is the market of the combination of service plus handset. In a very transparent way for the consumer and not pushing customers to renew automatically their handset at the end of their commitment period. We stick to our principle, but at the same time, we consider that as most of the European countries, the French market will move towards more and more transparency, and that it will create an opportunity for us to tap that market. Nicolas, on the guidance? In terms of your question, Nicolas, let's be totally direct and frank. It's nothing linked to the EBITDA. EBITDA is fully on track. It's clearly around our will to push more this year on the five-year rollout in the light of the growth opportunity that we see to seize a new market. Sorry, Nicolas, to interrupt. Just on that point, what prevents you to provide us with the guidance today? I suspect that you have to place your orders right now to impact the rest of the year. What prevents you to be more precise there? What is the missing information on your side? It's a very good question, Nicolas. First, a part of the guidance that is under review today is linked to a certain volatile environment. I'm sure that you've seen since our last call in March, that there has been quite a few tension on the equipment electronic chip set that we use for our Freebox, that we have directly or indirectly, with the BTS for our wireless rollout. That creates mechanically some volatility around our ability to secure some of the assets. This is why we cannot give you a full, transparent number today. That's one of the reasons. Second one, we are just opening the discussion with Cellnex. As I said, we have an agreement that makes sure that there is a path for the transaction to be made. Clearly today, the discussions are just beginning with our partner. Okay. Thank you. On Italy then? On Italy, we are fast-tracking the EBITDA guidance, which should be positively seen by the market. We had over the last year a lot of tension from the investor around the EBITDA on Italy, and we are finally coming at the point where it's going to be positive. Given the strong path of the rollout, clearly we are pushing up the guidance and having a positive EBITDA contribution for Italy in 2021. Sorry, and for the towers and actually the relationship with the remedies towers, if I may say so. Benedetto, maybe you can say a few words regarding the tower situation in Italy. Sure. It's not a secret that we are so far unhappy with the way the remedies are implemented. That's the reason why we appealed the decision on that topic. Our only goal is to get access to a maximum number of sites in order to keep a strong pace of our rollout. We are having discussion with the different parties. We really hope that the implementation of the remedies will go in the right direction, will allow us to get access to those sites because of course, Iliad has a very important site portfolio, and we hope we will get access to it. Okay. Thank you very much. Thank you. The next question comes from the line of Giovanni Montalti from UBS. Please go ahead. Thank you. Good morning. You guys have been talking a lot about the CapEx spend and the guidance revision. Maybe you can give out a bit of color also on the size of the opportunity in terms of value, on business segment of market. Thank you. No, in terms of value, as we explained. We really want to take the opportunity of the launch of 5G to create a change in the perception of our network quality that improved significantly over the last 18 months. We're becoming the number one alternative operator in terms of network quality. It's also important to strike the mindset of the B2B market with the best 5G coverage at the time we're getting into that market. This is exactly what we try to summarize in that slide to show the fact that we still get a lot of room to grow on the French mobile market. You should analyze also the decision to accelerate our ambition on 5G as a sign of a good initial feedback from our customer base on our 5G coverage. Cool. Thank you. Thank you. The next question comes from the line of Marcin Nowak from IPOPEMA Securities. Please go ahead. Good morning. Thank you for the presentation and for taking the question. I would like to ask about your plans towards Play in greater details. In particular, you mentioned fixed broadband development as one of your priorities for Poland. Have you maybe in mind fixed infrastructure development in rural areas as mentioned in the press releases, or maybe sticking only to your wholesale model as currently developed? Thank you. There are different ways to address the Polish broadband market. What I can tell you today is that we have a 50 million mobile subscriber base with great opportunity in terms of cross-selling and becoming a convergent player in Poland. I see very interesting indicators, for example, on the Play Home segment that we have that is progressing well, and that give us confidence that Play has a great upside potential when you look at the performance of that segment. Now, I think it's too soon to get into details on what would be the broadband strategy. We have to play close cards because the broadband Polish market is a very competitive market, but we get different opportunities between wholesale offers, the rollout of the POPC, where we should be in a position to secure in good condition and access to those new networks. The possibility also in some cities to roll out our own infrastructure. There is also the FWA strategy that could make sense in certain zones, as you can see with the quality of our result this morning, specifically on the home segment. Yes. Thank you. Just one more follow-up. When could we expect some clarification in your strategy plans for Poland, Polish big market? Oh, it's already the case with the push on the home segment, with the quality of our TV hub that has a huge success among our existing subscriber base. Great. Thank you so much. Thank you. The next question comes from the line of Abhilash Mohapatra from Berenberg. Please go ahead. Yes, good morning. Thanks for taking my questions. I've got two questions on France, please. Firstly, just on the 5G investments, just wanted to dig a bit deeper and try and understand what exactly has changed. Is this related to how you're sort of deploying your network? For example, if you look at Slide 12, where you say that you're leading on population coverage on 5G already. Given that, why do you feel the need to accelerate the deployment further? Just a bit more color on that would be helpful. Secondly, just again on France and the margins there. Just trying to think about since 2021, obviously, now this will be a full- year where you'll have moved to the InfraVia model on FTTH. The deal with Cellnex is behind us. In terms of the changes in the gross margin beyond 2021, do you see scope for continued margin improvement? Thank you. What has changed since our last meeting? Different things first. Now we had a clear view that we will sell that 30% stake by the end of the year. We have to ask ourselves what will be the usage of the proceeds of that sale. As I mentioned, and I really insist on that, the vast majority of the proceeds will be used to deleverage the balance sheet, and a smaller part to accelerate on 5G. It was our duty to make the right allocation between deleveraging and upgrading our target. What has changed also since then, this is a good take-up of 5G services by our existing subscriber base and a strong interest from our subscribers in 5G. 5G is a hot topic for the French consumer, and clearly we want to lead the pack, and this is super important at a time when over the last two years, we invested significantly and we improved significantly the performance of our mobile network. Clearly 5G is a change of generation, and it could be a game changer for the perception of the quality of our network. The last thing that has changed since March is a deterioration of the situation on the electronic chipset market with a lot of volatility, and I consider that this is our duty to secure our procurement strategy and to secure the electronic chipsets for the year to come, and also to secure some mobile equipment in advance. I do believe that the securitization of that procurement strategy makes a lot of sense when you look at, for example, the automotive industry and the difficulties of some car manufacturers. We don't want to end up in a tough decision. We have big ambition in terms of network rollout, and we need to meet those ambition. In terms of your point on margin, you have different drivers. The first driver is the growth. We have still strong growth on French assets. It's driven mainly by service revenue, which is the part that is generating higher margin first. We are more and more getting on the fixed cost base, especially on wireless. The incremental euro gain has a strong marginal impact in terms of EBITDA margin. Last but not least, we still have some roaming costs that are going to vanish in the next 18 months. That's very helpful. Thank you. Thank you. Before going to the next question, I'd like to remind all participants that you may ask your question by pressing star one on your telephone keypad. The next question is a follow-up question coming from the line, Mathieu Robilliard from Barclays. Please go ahead. Thank you for taking another question. In your French press release, I suppose it's the same in English, but in the French press release at least, you mentioned that the competitive environment in France has deteriorated a bit on the low-end market since the beginning of the quarter. Going back to the first question that I asked you, I was wondering if that was also a reason why you want to move faster into the high-end market. If you could give us a little bit of color as to how that competitive environment has developed in Q2, that would be very helpful. Thank you. No, you're right. The mobile market in France is very competitive with the comeback of some aggressive offers around the EUR 5 price point. This is why our strategy of differentiation and the big push on the performance of our network makes sense at that specific point of time, where we really want to find the right balance between value and volumes. Thank you. Thank you. The next question comes from the line of Stéphane Beyazian from Stifel. Please go ahead. Please go ahead. Yes, thank you. Sorry about that. I was on mute. I've got three questions if I can. The first one is: Is it possible for you to tell us in your internal budget how many years are sort of impacted by your new CapEx plan? My second question is: Do you expect your new plan to be disruptive for the French market? How have you balanced that in your decision? I'm obviously referring, and you know, to the years of price battles and higher promotions that we had, for instance, in 2018. How concerned are you that you could be disrupting the market again? My third question, and I'm sorry, that's just a clarification for something I probably missed there. You're not expecting to change your EBITDA trajectory in France. Most of the adjustment, if not all the adjustment, is in CapEx, but you still want to better address the so-called handset subsidies market. Are you suggesting that you're not preparing some extra OpEx spending to better address that market? Thank you for the clarification. I'll start with the first question. CapEx plan. No, clearly, we are not today giving any long-term guidance in terms of CapEx. We are focusing on the operating free cash flow guidance that is linked to our will to make a blitz, a push, a differentiating factor on 5G. It's once in your lifetime that when you have a good network, that it's perceived by your customer base to make it known and to make it a differentiating factor to address an untapped market, which is the so-called subsidy market. Second part, disrupting the market again. I don't know exactly what you mean, but the idea is not to make big change around the SIM-only market where we are, where we have a strong holding already. The idea is to have a compelling offer that matches the customer need and demand when he wants to have both in an easy way, maybe also in a shop, and a handset and a SIM, which is called a subsidy market, where we are today quite limited. This is where we want to be, and this is where we can think we can play our cards with a very strong advantage on the 5G network. EBITDA trajectory and change. The question was, is the guidance around the operating free cash flow change linked to EBITDA and CapEx or CapEx only? It's linked to CapEx. In terms of our move on the untapped market, it will not impact the EBITDA positively nor negatively this year. Okay, thank you. If you want to make a blitz, don't you be considering more promotions or something just to attract customers as fast as possible? Don't put me wrong. The blitz is on 5G, and now for the commercial offering, you'll have to wait for the launch. Okay. Thank you. Thank you. The next question comes from the line of Nayab Amjad from Citibank. Please go ahead. Hi, thank you for taking my question. Just one quick one. Most of my questions have been answered. What are the EBITDA trends like in Poland? What do you mean when you say integration has been going well? Thank you. It means that we start to see in terms of profitability, the impact of our first operational decision. It will translate into a better profitability. We give you a guidance for the full- year with an increased operating free cash flow from there. What we see, it's a good dynamic in terms of profitability, thanks to some decision of streamlining on the distribution, marketing, commercial decision, and also putting together our procurement strategy. We are clearly in advance compared to our initial budget when we made the acquisition of Play. Thank you. Thank you. There are currently no further questions in the queue, I will hand back the call to our speakers to conclude today's conference. Thank you. Thank you very much for your attention this morning, and have a very good day. Thanks. Thanks. Thank you for joining today's call. You may now disconnect.