Investment Proposition




Having delivered a solid financial performance in the first half of 2021 on all of our key financial guidance metrics, we are on track to deliver against our FY 2021 objectives as presented in February 2021. This implies a return to top line growth in 2021 on a rebased basis, including a partial recovery from the COVID-19 pandemic which mainly affected our other revenue in 2020. The recovery in our other revenue will to some extent be offset by a reduction in the regulated cable access fee, which became effective as of July 1, 2020, and a continued pressure on our interconnect revenue given the switch to data messaging and more VoIP calling. Elsewhere, our rebased revenue performance will be driven by growth in our B2B business and a modest increase in our subscription revenue from customer uptiering and certain price adjustments. For the full year 2021, we continue to expect our rebased revenue to expand up to 1% compared to 2020. Having reversed the negative trend in our rebased revenue in the second quarter, we feel comfortable that we can maintain a positive top line growth trajectory for the remainder of the year. However, as our (other) revenue started to sequentially improve as of Q3 last year once the tight lock-down was lifted, we expect our revenue growth trend to decelerate in the second half versus the first six months of the year, yet this is fully embedded in our FY 2021 outlook. 

Our rebased Adjusted EBITDA grew nearly 3% in the first half compared to H1 2020. This puts us well on track to deliver a healthy increase between 1 and 2% in 2021 on a rebased basis, even though we anticipate a softer Adjusted EBITDA performance in the second half driven by a tougher comparison base for some of our operating expenses and an overall pick-up in commercial activity versus last year.

On a rebased basis, our Operating Free Cash Flow was up 4% over the first six months of the year, driven by the aforementioned growth in our Adjusted EBITDA and lower accrued capital expenditures relative to the same period last year. Relative to H1, we expect higher investment spending in H2 this year, which includes certain selective network-related investments as announced in February this year, creating optionality for future cost effective fixed and mobile network upgrades. We therefore expect a reversal in our Operating Free Cash Flow in the second half, as embedded in our FY 2021 outlook. For the full year 2021, we continue to expect our Operating Free Cash Flow to modestly decrease by around 1% on a rebased basis. With that, we still expect to deliver on the lower end of our 2018-2021 Operating Free Cash Flow CAGR of between 6.5% to 8.0%.

Our Adjusted Free Cash Flow in the first half reached €202.5 million, which puts us well on track to deliver on our FY 2021 guidance despite a lower Adjusted Free Cash Flow performance in the second quarter due to the phasing of our annual cash tax payment. Given this annual settlement, we anticipate a rebound in our Adjusted Free Cash Flow in the remainder of the year. Despite the anticipated modest contraction in our Operating Free Cash Flow in 2021, we are confident in our ability to generate a robust Adjusted Free Cash Flow between €420.0 and €440.0 million. Growth in our Adjusted Free Cash Flow will amongst other factors be driven by both lower cash taxes and lower cash interest expenses, while our vendor financing program is expected to remain broadly stable compared to end-2020.


OUTLOOK FY 2018 - 2021 FY 2018 rebased(a) As presented on December 4, 2018 As reaffirmed on February 11, 2021
Operating Free Cash Flow CAGR (rebased)(b, c) €674.7 million Between 6.5% - 8.0% Lower end of the 6.5% - 8.0% range


OUTLOOK FY 2021 FY 2020 Rebased(a) As presented on February 11, 2021
Revenue growth (rebased)(d) €2,573.2 million Up to 1%
Adjusted EBITDA growth (rebased) (b) €1,346.5 million Between 1-2%
Operating Free Cash Flow growth (rebased) (b, c) €825.8 million Around -1%
Adjusted Free Cash Flow (b, e) - € 420.0 - 440.0 million range

(a) For purposes of calculating rebased growth rates on a comparable basis for the periods shown above, we have adjusted our historical revenue and Adjusted EBITDA to reflect the impact of the following transactions to the same extent revenue and adjusted EBITDA related to these transactions is included in our current results: (i) exclude the revenue and Adjusted EBITDA of our former Luxembourg cable subsidiary Coditel S.à r.l. (deconsolidated as of April 1, 2020) and (ii) reflect changes related to the IFRS accounting outcome of certain content rights agreements entered into during the third quarter of 2020.

(b) Quantitative reconciliations to net profit (including net profit growth rates) and cash flows from operating activities for our Adjusted EBITDA, Operating Free Cash Flow and Adjusted Free Cash Flow guidance cannot be provided without unreasonable efforts as we do not forecast (i) certain non-cash charges including depreciation and amortization and impairment, restructuring and other operating items included in net profit, nor (ii) specific changes in working capital that impact cash flows from operating activities. The items we do not forecast may vary significantly from period to period.

(c) Excluding the recognition of the capitalized football broadcasting rights and mobile spectrum licenses and excluding the impact from lease-related capital additions on our accrued capital expenditures.

(d) Relative to our reported revenue for the full year 2020, our revenue growth for the full year 2021 would be equivalent to up to 1%.

(e) Assuming certain payments are made for the temporary prolongation of our current 2G and 3G mobile spectrum licenses in 2021, yet excluding payments on any future spectrum licenses as part of the upcoming multiband auction, and assuming the tax payment on our 2020 tax return will not occur until early 2022.