Telenet Group Holding N.V.

For the first half of 2023, revenue was €1.4 billion, up 9% year over year, helped by Caviar and Eltrona; rebased revenue growth was almost 2%. Adjusted EBITDA was €677 million in H1, up 1% reported and broadly stable rebased; adjusted EBITDAaL was €619 million, up 1% reported and 3% rebased. Accrual CapEx was €342 million in H1, up 16% year over year, and adjusted free cash flow was €103 million, down 39%. Management reiterated full-year adjusted free cash flow of around €250 million and said it remains on track for full-year financial objectives; rebased revenue and EBITDAaL guidance does not yet include Wyre benefits. The company ended June with more than €1 billion of cash and nearly €1.7 billion of cash plus undrawn RCF capacity, while net total leverage was 3.5x under the new definition and 4.0x under the prior definition.

John Porter struck an upbeat but measured tone, saying the company has made substantial progress fixing the CRM/IT transformation issues and is “getting back to business as usual.” He said customer-facing disruptions were limited to edge cases, with 98% of customers not feeling the issues, and emphasized that marketing has restarted fully and subscriber recovery should follow. Strategically, he highlighted the strength of the new Wyre network platform, the Orange wholesale arrangement in the south, and Telenet’s improving position in large enterprise B2B.

Erik Van den Enden said Q2 was soft on operations because of the June price increase, temporary IT issues, and a competitive market, but he pointed to strong B2B and media additions and the strategic importance of Wyre. He cited H1 adjusted EBITDA of €677 million, EBITDAaL of €619 million, CapEx of €342 million, and adjusted free cash flow of €103 million, explaining the FCF decline by higher cash CapEx, seasonal working capital, higher cash interest/derivatives, and €4 million lower vendor financing. He also said the company’s 2023 energy spend is fully covered by fixed-price agreements, about 42% of 2024 exposure is hedged, the RCF was expanded to €600 million and extended to May 2029, and leverage remains toward the lower end of the target range.

Analysts focused on the IT migration issues, competition, Wallonia network strategy, capital allocation, and the impact of Proximus price increases. Management said the IT problems were mainly in fulfillment/activation edge cases, were being worked down daily, and were no longer materially disrupting most customers; they also said competition was fierce but not structurally different from prior quarters. On Wallonia and network sharing, management said the most attractive model is a mix of coax and fiber, and that the BIPT review likely means meaningful broader network-sharing discussions will play out in 2024 rather than immediately.