Welcome to Iliad Q1 2024 Results Conference Call. Please note, this call is being recorded, and 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 call, and this can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to your host, Thomas Reynaud, CEO, and Nicolas Didio, Group Head of FP&A and Investor Relations, to begin today's conference. Thank you. Good afternoon, everyone, and good morning for those listening from the U.S. I'm here in Paris with Aude Durand, our Deputy CEO, Nicolas Didio, in charge of our Investor Relations. And we have the chance also to have all our country managers, Nicolas Thomas for France, Jean-Marc Harion in Warsaw for Poland, and Benedetto Levi in Milano for Italy. So today, I'm super happy to have the opportunity to present another strong set of results for Iliad. Clearly, we keep on gaining market share with 700,000 new subscribers in just three months. And at the same time, we continue to outpace the sector. We are the fastest growing operator in Europe with an 11% growth and a 9% organic growth. This means that we are within touching distance of our goal to become the number 5 European telecom operator, which is an important target for the full team. I will start with commercial performance, which was good. In France, in fact, we had our best quarter in a decade. France is back to a double-digit organic growth, 10 years after the launch of Free Mobile. And these good results are mainly the consequence of the launch of the Freebox Ultra. Freebox Ultra is clearly a game changer. There is no box that is similar in the French market. It's really creating a unique traction for our activity. At the same time, we totally revamp our customer care from a very centralized approach to a decentralized approach, and it's also a big part of the equation in these good results. In Poland, we continue to grow both in terms of subscribers, numbers, and financial. I think that we have a good mix between volume and value, but we should pay attention to the deterioration of the broadband market. Clearly, we want to implement our convergence strategy, and we have some competitors that are aggressive. We're still the number two in terms of recruitment, but we want to come back to the number one position in broadband. On mobile, clearly, we've been the leader in terms of recruitment for the last two years, and this is still the case in Q1. Italy. I was in Milano over the last few days with Aude to celebrate Iliad Italia sixth anniversary. I can tell you that, our operation in Italy are totally amazing with a great team. In Italy, we've been the leader in terms of, recruitment for the past 24 quarters, and it's still the case for Q1, with an impressive net addition of more than 300,000 net adds in a super competitive market. In fact, I see a strong deterioration of the Italian market. Let's have a look at the offers of our competitors on their website. Kena, for example, with Telecom Italia at EUR 5.99 for 200 GB. Even in that extreme, extreme competitive environment, and especially from Telecom Italia and Vodafone Italia in terms of win back, the team managed to post a really good quarter. Let's move to the financials, and Nicolas will give you all the details in a minute. What I can tell you is that in 2023, we had a kind of a decoupling of our revenue growth and our EBITDA growth. Revenue growth was roughly 8%, EBITDA growth 3%-4%. The good news is that during Q1 2024, thanks to a good cost control and the taming of the inflation, we recorded a strong improvement of our EBITDA growth, more or less in line with our revenue growth. We managed to post an EBITDA growth at 12%. I want to remind that we are super laser focused on keeping a lean cost base and to maintain our ability to be agile. We continue to control cost all over our market, and this is key in a super competitive environment. Clearly, at the same time, we are obsessed with maintaining a robust financial strength. Clearly, the change of dimension of the group over the last few years was not done at the expense of our financial position. Since 2021, when we took private the company, we actually improved the leverage of the company. The leverage of both Iliad S.A. and Iliad Holding remain within the comfort zone, with a strong improvement. We are at 2.9 times EBITDA at Iliad S.A., and 3.9 time at Iliad Holding. The clear evidence of that is the refinancing in April and May for both Iliad S.A. and Iliad Holding in with very, very good conditions. What I can tell you is that, there's been an amazing transformation of the group over the last few years, and beyond these figures, clearly, we want to continue to expand our horizon, both from a technological and a geographic perspective. From a technology standpoint, we invest, and we will continue to invest in the development of our private and public cloud services, our cybersecurity solutions, and we will make some announcements in June. And also our computing capabilities, and we made an announcement this morning on our data center platform. We have today in Europe one of the most powerful data center platforms with 15 data centers, Paris, Marseille, Warsaw, and we will invest EUR 2.5 billion over the next decade in order to take advantage of that strong demand in the context of the booming of the AI for new data centers. We also expanded our geographical footprint during Q1. We made the acquisition of a stake of 20% in the Swedish operator, Tele2. We are now in eight countries, and we had a very important milestone two weeks ago with the AGM of Tele2, enabling Iliad to be represented at the board of directors with three board members, Aude Durand, Jean-Marc Harion, and myself. In conclusion, congratulations to the team, an amazing team at Iliad, and clearly, we are not complacent. We're gonna keep on transforming our organization, looking at new opportunities, always having in mind, and this is really the end game, always having in mind our subscribers. For 2024, we have two clear objectives. On the one side, to become the number 5 telecom operator in Europe. And at the same time to reach, for the first time, the EUR 10 billion threshold in terms of revenue, when you take into account France, Italy, and Poland. Nicolas, the floor is yours. Thank you, Thomas, and good afternoon, everyone. On slide 16, as indicated by Thomas, the group continues to be the European leader in terms of revenue growth, 11% on a reported basis, 9% organic pro forma. This quarter, the only difference between reported and organic pro forma is the foreign exchange, which provided a tailwind. There is no M&A impacting the comparison. Looking briefly at the country performance, for the first quarter, Italy grew 12.8% in Q1, a growth level in line with previous quarters, if we adjust the Q4 from a non-recurring item. This remains mostly driven by volume gains, since the competitive intensity, as described by Thomas, in the mobile market, is very high, and targeted win-back offers still very much in place. Another element driving the growth momentum in Italy is, of course, our market share gains in fiber, where we see a constant acceleration of the demand, and as we expand our addressable market. Momentum in France remains outstanding, with revenue, revenues growing 10% in Q1. France is thus returning to double-digit growth on an organic basis, a bit more than 12 years after the launch of our mobile activity. B2C is pacing up in line with the improvement of our subscriber mix and strong net adds, and B2B remains very well oriented, although growth rate is slightly lower, as revenues from energy resale benefited in 2023 from high inflation rates passed to customers, and inflation is slowing down. Poland is sequentially improving at 5.2% growth. This is 3% growth in Q4, with an improvement in mobile billed to subscribers, as well as fixed services. Moving now to the EBITDA on slide 17. Group reported EBITDA grew 12.2% and 9.6% on an organic basis. Clearly a strong quarter, with the three countries contributing to the performance, with France leading the pack with a 15% growth. EBITDA margin for France is rebounding by 170 basis points to 36.2%, driven essentially by a stronger operating leverage, with revenues billed to subscribers in mobile and fixed services strongly up. We had lower energy costs as expected, and had a bit more gain from BTS than last year. This offset the staff cost growing 9%, as we expand our distribution network in B2C and commercial teams in B2B, and the higher taxes from IFER, which we continue to see as counterproductive, as it is basically taxing our mobile investments. Italy grew 12%, broadly in line with revenues, with minimum energy cost impact, as hedging was structured differently than in France and Poland, and with lower gains from BTS than last year. EBITDA in Poland was at 5.5% in euros and down 2.5% in local currency. As you remember, we implemented our FiberC o from Q2 2023, so this quarter is the last one with an unfavorable basis of comparison. Excluding the impact of the FiberC o, EBITDA would be growing high single digit, driven by lower energy costs, good cost control, and good revenue growth from mobile bill to subscribers. On slide eighteen, if we move to CapEx and operating free cash flow trends, group CapEx declined by 24%, to EUR 480 million. CapEx in France was down 37%, thanks to different factors. Lower spend on Freebox as we built up inventories since the beginning of last year. Lower contribution from the fixed component of our roaming agreement, but also sale of non-core assets. Excluding this, CapEx would be down by 10%.... As expected, CapEx in Italy was up by around EUR 20 million, as contribution from Zefiro was low in 2023, and there is a progressive catch up for this year in terms of rollout in low-dense areas. The other factor contributing to the increase is a strong success from our fiber offer, where we see the acceleration of the take-up rate. In Poland, CapEx was down 7% in local currency, as we continue upgrading the mobile network after the C-band auctions last year. On the right part of the slide, you can see the main moving parts of our operating free cash flow. Q1 2024 is double the operating free cash flow of Q1 2023, mostly driven by France, with Italy staying break-even-ish, and Poland slightly up, and maintaining a strong contribution to the cash flow generation of the group. Moving now to slide 19, with a view on the free cash flow moving parts. We already touched base on the group operating free cash flows, so let's focus on the other items. Working capital outflow of EUR 49 million, driven by the investments in the BTS program, previously accounted in cash outflows related to assets, assets held for sale. Cash taxes of EUR 91 million are up 68 million year-on-year, due to phasing effect. Bear in mind, Iliad Holding is since 2022, the fiscal parent company of the group, so cash taxes at Iliad OpCo will always be a bit higher than at the Iliad Holding level. Spectrum of EUR 115 million can be split mainly between EUR 70 million for Poland, as we finish to pay the C-band spectrum, and EUR 38 million in Italy. Moving to slide 20, 21, and 22 for leverage and maturities. March 2024, Iliad Group leverage declined by 0.1 turns to 2.9 times, with the net debt going down by EUR 33 million. Interest coverage ratio is slightly declining, but remains good at 7.6 times. Iliad Holding leverage, staying at 3.9 times in March, and includes some financing for Freya, related to the transaction on Tele2. On slide 21 and 22, you will see the liquidity profile at the end of March 2024 for Iliad and Iliad Holding, and the pro forma view post debt issuance and refinancing activities of April and May. As Thomas mentioned, we have been proactively addressing part of our maturities for 2024 and 2025 for Iliad SA, and 2026 for Iliad Holding. We have received great support from investors. The EUR 500 million, seven-year at Iliad level was 3.2 times oversubscribed. Issuance was made in parallel of a capped tender offer on the October 2024 and April 2025 maturities, leading to a bit less than EUR 500 million being tendered, extending our average maturity to 3.3 years. The level of liquidity remains excellent, and our cash position and available credit lines cover most of our maturities for the next 3 years. On Iliad Holding, we issued two new bonds, one in euros for EUR 750 million, after a tap of EUR 150 million euros, and one of $950 million after a tap of $200 million, both maturing in 2031. In total, it is EUR 1.6 billion equivalent euros raised, with also strong support from investors, with oversubscriptions around 3 times. These new bonds were issued in parallel to a partial tender offer on our '26 maturities, which were fully tendered. At Iliad Holding consolidated level, our average maturity is now 3.8 years. This concludes our presentation, and we are more than happy to answer your questions. Thank you. Ladies and gentlemen, as a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one now on your device, and to withdraw your question, please press star two. The first question comes from the line of Joshua Mills, calling from BNP Paribas. Please go ahead. Hi, guys. Thanks for taking the questions. A couple from me. One would just be on the general level of competition you're seeing in France at the moment. Any changes that you could point to in the past few months? I think now we've had the big four operators report, it looks like there's been a bit of a slowdown, both in terms of overall mobile and overall broadband growth. Obviously, you're winning at the expense of SFR and others, but possibly you could comment a bit there as well, about where overall market growth is heading to. And then the second question I had was, probably early days, but now you're on the board with Tele2, any insights you could give us from what you've seen so far? Any preliminary thoughts, if you're willing to share them, about how you look at the strategy for that company going forward? Thanks very much. Okay. On France, what we see that, France is still a very competitive market. You still have, below-the-line offers. What I can tell you when it comes to Free, we have a really great momentum, thanks to the launch of the Freebox Ultra, and also the ongoing revolution that we have in terms of customer care, because we invested massively in a new, customer team. But we have a chance to have, Nicolas Thomas with us, that will say a few words on France. On France, we are sticking to our strategy, so we made the decision to block the prices of the €2 and the €19.99 until 2027. It's a paying strategy, given the net adds we communicate every quarter. We see some aggressivity with the low-cost brands of our competitors in the segment between €5 and €14. But we always have the correct reaction to this, and we keep on migrating our €2 subscriber base on the €19.99. And besides, as Thomas said, our growth is also driven by the convergence, where we reach a very high convergence rate of almost 75%. Where we keep upselling at an attractive price from a pure market point of view, but with a high value creation when it comes to our P&L. Okay, regarding Sweden, it's too soon to draw any conclusion. What I can tell you is that we've started engaging with Tele2 executives to establish a roadmap of cooperation, and there is a strong appetite on both sides in order to share best practices, industrial knowledge, and in particular, in terms of innovation, convergence, and investment in next generation network, and also data centers and cloud. So a big program, a very important roadmap, and the name of the game is cooperation. Great. That's very clear. Thanks for that. Just maybe to come back on that question about the overall market growth, is that something you're seeing slow down in terms of volume and, you know, across the market for, for broadband and mobile? Or is it just that maybe some of the net adds are being picked up by smaller players who maybe aren't capturing? It's tough to draw any conclusion. I'm pretty sure that you have in mind the report from ARCEP published yesterday night. But what I can tell you is that we managed to post our best quarter in 10 years in terms of growth. So we're optimistic about the evolution of the French market. As a matter of fact, we keep having the best value for offers in the market, either on the mobile market with the EUR 19.99, which is also a EUR 9.99 offer and convergence unlimited plan, the only one in France, and with our broadband offers from Revolution up to Ultra. And so our commercial strategy enables us to keep growing and very fast and very high, even in a slowing down market. Great, thank you. The next question comes from the line of Mathieu Robilliard, calling from Barclays. Please go ahead. Yes, good afternoon. Thank you for the presentation. I had two questions. The first one is on Italy, where you flagged that the market remains very competitive, and yet you continue to outperform and gain customers. So I was wondering how you explain that, because obviously, when you entered the market, and for some time you've been very aggressive on prices and gain market share on that. But it seems like there's more than that now, that is explaining your success. So maybe if you can give us a bit of color there. And the second question is going back to the previous question on Tele2, and I heard what you said, it's early days, and the roadmap is about cooperation. But I was wondering, when I look at how some of the companies where the group at large has been involved, I was wondering if best practices also involve being better at managing IT, being better, better at, managing costs? Because, some of the companies you've been involved with have, has seen some quite material changes on that aspect. Thank you. Thank you, Mathieu. Clearly, in Sweden, we, with Tele2, we are just at the beginning of the story, at the early days, so we are quite humble. But clearly, we see a lot of prospect of cooperation, I insist, for both organization, at the same time, Iliad and Tele2. Coming back to Italy, Benedetto, maybe you can give some color on the- Yeah ... the strength of the Iliad Italia brand, and that unique image of value for money in Italy that we have with Iliad Italia. Yeah, sure. No, Mathieu, I think you're right. So there's definitely more than price explaining our results in Italy. So, I think the answer is really the brand and the consistency we had during the last six years. This explains the super high NPS we have, the satisfaction rate of our users, which is based on, let's say, pricing strategy, and again, transparency, which is really giving the results. And also, satisfaction in terms of quality both from our mobile network, which we rolled out during these years, and also on the fixed side. Our fiber offer was recently named as the fastest in Italy, like twice as fast as the second in the ranking. So I think really it's a blend of, quality, consistency, the brand, and also the expansion of our distribution network. But it's, definitely not a price issue. And maybe on the economic model of Italy, clearly what we see is a strong improvement of our mobile operations. And we took the decision to reinvest the profit of mobile into fiber, and this is the reason why, you saw the best quarter ever in terms of, fiber net adds during Q1. If I may follow up, you expect that acceleration to continue? Is that what you're hoping for this year? We'll see. We don't give any guidance regarding the number of fiber net adds in Italy. But clearly, at least we have the ambition to keep the number one position in terms of net adds. And then we monitor the growth in light of our profitability. Thank you very much. The next question is from Peter Jury, calling from Tresidder. Please go ahead. ... Hey, guys. Thanks for taking my questions, and congratulations on very good results. I think my first question was touched upon briefly, but I just wanted to get a little bit more detail for the avoidance of doubt. When you, I haven't seen the ARCEP report, so maybe the answer is there, but on, on your estimates, how has the mobile markets in France done in the quarter? Because I know when I, when I look at the reporting of the various guys, you know, sometimes there's M2M SIMs included, sometimes they're not. So it's, it's a little difficult to think about human SIMs, I guess. So how do you feel? Is, is the SIM market shrinking or growing? That helps me contextualize how well you're actually doing, 'cause if it's shrinking and you guys are doing as you're doing, I mean, it's, it's great. So that would be my first question. Okay. I think that you should not overread the last set of publication from ARCEP and some of our competitors. The global picture is that the post-paid market was up by 60,000 subscribers. But at the same time, I think that there was a lot of cleanup with some of our competitors, especially in the prepaid market. So what we see that at least a stable mobile market or even a slightly growing mobile market. But there was a lot of cleanup effect with some of our competitors, I think, during Q1. Okay. And that's post-paid, but how would you say sort of prepaid and maybe machine-to-machine SIMs, although I don't know what the profitability of them is, what's the bigger picture as well? We're not in the M2M market, so it's hard for us to get a view. What I can tell you is that we still see some growth on the post-paid market. We're not on the prepaid market, we're not on the M2M market, and we still see some growth on the post-paid market. According to the ARCEP report published yesterday, it is still the case. Okay, perfect. Thank you. That helps me contextualize things. And the second question I had is, you know, you guys, it's a pretty good result that you guys had in Italy, particularly on fiber. I guess, you've talked over the past couple of quarters that you will be accelerating in fiber, and you have. You've referenced expanding your distribution network. Could you give us practical examples of how you expanded your distribution network there? And, also, what is your estimate of your share of churn that you are winning? Because obviously, you know, you're only operating within the fiber landscape, within churn, et cetera. So just to get us a sense of how well you're doing on that metric. So clearly, there was a very important decision taken three years ago to address only the fiber market. Today, our footprint is a little bit more than 14 million homes, so it's growing. Clearly the fiber technology is not as hot as the fiber technology in France, where there is a real brand name around fiber, which is not the case yet in Italy with fibra. But, Benedetto, maybe you can give some additional color on the evolution of the fiber market in Italy. Yes. So, as you know for sure, it's a market which is late compared to many others, both in terms of, rollout and even more in terms of, take-up. So, we decided to only address FTTH, which means that today we address around half the market, let's say, to make it simple. And, we see an acceleration in the rollout and in the take-up, so we are quite optimistic also, for the future. And to answer the first part of your question in terms of distribution network, of course, we opened a few more, stores, but the main, let's say, decision that was taken, in July last year, was to enter the so-called multi-brand, stores, which are more than 3,000 in Italy. So, we address this new distribution channel, which allowed us to be much more capillary, also in very small towns with a physical distribution network, which is also giving some good results. That, what we mean by expansion of our distribution network. The last stat, I don't know if you guys have it internally, but sort of your share of win of churn on footprints. Yes, we have the information, but we don't share that information. Or would you, would you tell us if it's more than 25% or less than 25%? Maybe directionally. Well, I think you have to consider the fixed broadband market in Italy is not growing. So obviously when you do some math, our share of market on net add is very high. Okay, thank you. We currently have no question coming through, so as a final reminder, if you'd like to ask a question, please press star one now on your device. We have now a question coming from Stéphane Beyazian, calling from ODDO BHF. Please go ahead. Yes, thank you very much. I've got two questions. The first one is, you mentioned that the Freebox Révolution is to you a game changer in the market, and surely I can see how it is different to the rest of the market. But can you give a bit more color on how important it is in terms of driving, you know, your customer acquisition, whether you think that will continue? You know, some of your competitors have just been saying that this is a niche product because it's too expensive, blah, blah, blah. So, you know, any color you could give around that. And the second question is regarding the investment want to do in the data centers. Can you give us an idea on, you know, what sort of metrics you're looking at to make a return on that investment? Because I've seen a lot of announcement about investing in data centers in France, so it seems that there's gonna be a lot of capacity that's gonna be built. So I was just wondering, you know, whether you're looking at in terms of metrics, profitability from that investment in the long run. Thank you very much. Okay, thank you, Stefan. So first, we've been in the data center business for more than 10 years now. We have more than 150 customers for our data center activity. We have hyperscaler, large corporation started from all over Europe, so it's not a brand new activity for us. Clearly, we are at the center of the AI ecosystem in France, thanks to the investment of Xavier Niel, thanks to our Kyutai initiative. And also, I think that we have a unique insight in terms of momentum, thanks to our cloud services company, Scaleway. So clearly, it's a very capitalistic activity, so that's why you need to secure fund with a very long tenure, but we get plenty of access to fund of that nature. At the end of the day, we're looking at a return on capital employed. If we move to the Freebox Ultra, what I can tell you, and Nicolas will give you all the details, sometimes the shortcut about our commercial success is, yes, it's pricing. This is not the case. The central case for our good commercial performance is under one side innovation, amazing improvement in our network quality. We are the number one investor in terms of fiber rollout, in terms of fiber penetration in France, and at the same time, the ongoing revolution with our new customer care. But specifically, Nicolas, on the Freebox Ultra? Yes, sure. On so Freebox Ultra, it's true that we have a very specific product indeed, because, it's a product which, is the first one in the world to, offer on a large scale, Wi-Fi 7. It's also the first one to offer such a high symmetric bandwidth. It offer the first one to offer that much content in hard bundle. So we are hard bundling Amazon Prime, Disney Plus, Netflix, Canal+ La Chaîne, so Canal+ is the number four channel in France live, and many other contents for a very attractive price. I can tell you, I won't give you any figures, obviously, but I can tell you that we are doing significant figures on this. And besides that, there is also a halo effect on the brand, thanks to Ultra and our capacity to innovate on the other, in fact, offers of our broadband portfolio. Okay, fair enough. Thank you. There are no further questions, so I will hand you back to your host to conclude today's conference. Thank you. Thank you so much. What I can tell you is that, we had a really good Q1 that is quite promising, but, we will never be complacent. We know that, we still have a lot of things to do, in order to further improve, this new customer care revolution, in order to expand our fiber footprint in Poland, in, France. We consider that we still have so many things to do in Italy, and I really want, an acceleration of our market share gain in Italy. So, no complacency at Iliad. A lot of work, a lot of great things to achieve, and, we'll be super happy to, present you the H1 figure at the end of August. Thank you so much. Thank you for joining today's call. You may now disconnect.