Altice (SFR) France - comment

Interesting choice of phrases used by Altice management during their Q3 conference call, especially when asked about EBITDA trajectory and whether the business is going to reach an inflexion point. Management state EIBTDA performance in Q4 will be on a better trend, but on further probing this is likely to still mean negative growth, albeit not the c. 5-6% negative seen in Q1-Q3. Management remained vague on what assets are for sale from the Altice France structure, but with leverage remaining above 6.0x the only way to hit their 1.0x of deleveraging is from asset sales. Proceeds from the sale of its data centres are significantly lower than the previously whispered amount, with net proceeds to be c. €500m. 

A further area of concern for us is the rescheduling of the spectrum payments.  Yes, it is a positive for cashflow, with the cancellation of the c.€120m payment in Q4 this year and no payments now due until FY26.  But the worry is did the Company have to go and ask for a delay in the payments?  The question was shut down and we are not sure if other operators have had their spectrum payments rescheduled. The change highlights the tightness of liquidity at Altice France, and even with Data centre proceeds, Altice management acknowledges that they are likely to draw down on the RCF to repay the 2025 bonds.