Altice returns to revenue growth in France

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Altice, the acquisitive investment vehicle controlled by billionaire Patrick Drahi, has returned to revenue growth in France, for the first time since it acquired the country’s largest mobile operator SFR just over two years ago.

Altice said on Wednesday that the fourth quarter of 2016 saw group revenues rise 2.7 per cent to €6.1bn. Revenues for France increased 0.6 per cent to €2.9bn — after six years of declines — and US revenues climbed 5.8 per cent to €1.5bn.

“We met all the targets we set for the group on revenues, profitability and cash generation,” said Michel Combes, chief executive of Amsterdam-listed Altice.

The results come after a year in which Altice has repositioned itself from being a predominantly French telecoms operator to a European-American player in telecoms and content.

It has been expanding its presence in the US with the acquisitions of Suddenlink Communications in May 2015 and Cablevision Systems the following year. It is exploring an initial public offering of a minority stake in the US business.

At group level, it is espousing a blended strategy of telecoms and content: owning and creating content such as sports rights, news channels and entertainment, that it can distribute through its telecoms infrastructure to its mobile and fixed-line subscribers.

Mr Combes said: “Our content strategy allows us to increase and retain customers. This strategy is starting to pay off.”

SFR lost 2.5m subscribers, was forced to cut costs and announced widespread job losses after it was bought by Altice from Vivendi in November 2014 and was merged with Altice’s Numericable Group.

Mr Combes said that the group’s mobile subscriber base was starting to stabilise, thanks to improvements in its network and customer services.

Last year, Altice improved profitability and reduced slightly the high levels of debt used to fund its acquisition spree.

Overall, the group’s earnings before interest, tax, depreciation and amortisation margin — a measure of profitability — increased by 4.2 percentage points to 37.6 per cent during 2016. In France, the ebitda margin was up 3.4 percentage points to 33 per cent.

During 2016, Altice reduced its net debt from 5.9 times ebitda to 5.4 times. Over the 12 months, it refinanced over €21bn of its debt and extended the weighted average life of the group’s debt by 18 months to 6.6 years, keeping the average cost of the debt constant.

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