Oddo - comment
ILIAD (BUY, TP240): WEAK KPIs BUT GREAT ARPU DISCIPLINE AND ROLLOUT ACCELERATION- H2 sales of Eu2.02b vs Eu2.02b est. and EBITDA of Eu624b vs Eu634m est. Oddo
(Css Eu629m). We note: i) Commercial KPI are a bit weaker than expected both in
fixed (+25k vs +39k est.) and mobile (+450k vs 480k est.) BUT ARPU discipline
is very strong, Free being the only player to increase fixed ARPU (35.8€ vs
35.5€) and mix improving in mobiles due to leased offers, ii) Deployment
accelerating with +600 antennas in H1 and upgrade of new pylons guidances for
H2 (+1000 expected in H2 ie 1600 sites vs 1500 before).
- Overall, the bulls will focus on ARPU and deployment and the bears will
highlight the decelerating KPIs and an less probability of a french conso.
-> current levels take into account the end of hopes of french consolidation
and doubts on the rationale of the T-mobile US bid. We think consolidation is
delayed but will occur within 18-24 months even in case of US bid success. From
the 240€ highest share price to current 170€, around 40€ could be explained by
end of consolidation hopes and 30€ remaining on US deal mistrust, which
represents a €1.7bn value destruction on this deal announce wich in both cases
looks exagerated. BUY.