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COMMUNICATIONS: Notes From The TDF Infrastructure Roadshow

COMMUNICATIONS
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  • Operates across two main segments; Telecoms (i.e. hosting for French telcos; two-thirds of business) and Broadcast & Networks which offers site hosting/transmission to both corporate (e.g. radio/TV broadcasters) and public entities (e.g. Ministère de l’Intérieur and Gendarmerie Nationale).
  • Selling their fibre business to DIF, with a Share Purchased Agreement signed in July, to become a pure play hosing company; 12% of EBITDAal being sold with just 8% coming from within the rated perimeter; no expected impact on rating. Le Monde reported proceeds of EUR ~1bn) in April.
  • Top-line CAGR excl. pass-through since 2020 of 2.6%; pro-forma LTM EBITDAal margin and Cash Conversion (EBITDAal – Maintenance CapEx) of 52.7% and 45.4% at H1 are at the low end of recent ranges (they were 57% and 50.7% respectively in 2022).
  • Telco business has been driving growth with a 5.7% CAGR. KPIs still growing but moderating - H124 BtS sites +4.8% to 1777 with moderating growth, Points of Presence +1.3% with support from 5G, edge computing, indoor venue coverage demand.
  • Broadcast business in decline with a -0.9% CAGR albeit broadly flat since FY22 and with less convincing KPIs; TV (DTT) and radio (FM/DAB+) PoS broadly flat in recent years – these technologies are facing structural issues with the rise of IPTV/streaming and the decline in radio.
  • Cash of just EUR 57mn with EUR 500mn in undrawn RCFs against bonds of EUR 650mn/600mn/800mn outstanding in 26/27/29 (and a drawn EUR 300mn facility in 26). UoP today is to pre-finance the 2026 maturities with a max EUR 200mn tender also announced. FY23 re-stated CFO after Op Leases was EUR 296mn with Op CapEx (excl. increase of right of use assets) of EUR 295mn.
  • H124 leverage of 5.35x, up from 5.18x/4.79x at FY23/FY22. Fitch see leverage commensurate with BBB- of 5-5.5x. Management committed to IG and to remaining in this range. In their Jan 2024 affirmation, Fitch noted lower telecom site-hosting exposure and weaker market positions compared to larger, more diversified peers like Cellnex and Inwit, which benefit from stronger market positions and anchor relationships.
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  • Operates across two main segments; Telecoms (i.e. hosting for French telcos; two-thirds of business) and Broadcast & Networks which offers site hosting/transmission to both corporate (e.g. radio/TV broadcasters) and public entities (e.g. Ministère de l’Intérieur and Gendarmerie Nationale).
  • Selling their fibre business to DIF, with a Share Purchased Agreement signed in July, to become a pure play hosing company; 12% of EBITDAal being sold with just 8% coming from within the rated perimeter; no expected impact on rating. Le Monde reported proceeds of EUR ~1bn) in April.
  • Top-line CAGR excl. pass-through since 2020 of 2.6%; pro-forma LTM EBITDAal margin and Cash Conversion (EBITDAal – Maintenance CapEx) of 52.7% and 45.4% at H1 are at the low end of recent ranges (they were 57% and 50.7% respectively in 2022).
  • Telco business has been driving growth with a 5.7% CAGR. KPIs still growing but moderating - H124 BtS sites +4.8% to 1777 with moderating growth, Points of Presence +1.3% with support from 5G, edge computing, indoor venue coverage demand.
  • Broadcast business in decline with a -0.9% CAGR albeit broadly flat since FY22 and with less convincing KPIs; TV (DTT) and radio (FM/DAB+) PoS broadly flat in recent years – these technologies are facing structural issues with the rise of IPTV/streaming and the decline in radio.
  • Cash of just EUR 57mn with EUR 500mn in undrawn RCFs against bonds of EUR 650mn/600mn/800mn outstanding in 26/27/29 (and a drawn EUR 300mn facility in 26). UoP today is to pre-finance the 2026 maturities with a max EUR 200mn tender also announced. FY23 re-stated CFO after Op Leases was EUR 296mn with Op CapEx (excl. increase of right of use assets) of EUR 295mn.
  • H124 leverage of 5.35x, up from 5.18x/4.79x at FY23/FY22. Fitch see leverage commensurate with BBB- of 5-5.5x. Management committed to IG and to remaining in this range. In their Jan 2024 affirmation, Fitch noted lower telecom site-hosting exposure and weaker market positions compared to larger, more diversified peers like Cellnex and Inwit, which benefit from stronger market positions and anchor relationships.