A year of exceptional growth for Iliad

The iliad Group’s financial results for 2023 clearly illustrate its European leadership, both in terms of revenue growth and net adds in the Mobile and Fixed markets. We saw virtuous growth in each of our three geographies, combining market share gains with increases in ARPU, while remaining true to our values of simplicity, transparency and fair pricing. Building on this momentum, for 2024 the Group is targeting €10 billion in revenues, and is aiming to become Europe’s fifth-largest mobile operator.  

Consolidated revenues rose 10.4%¹ to €9.24 billion in 2023, and 11.3% in the fourth quarter¹. In France, revenues were up 9.9% in the fourth quarter – our strongest growth in the last nine years – and passed the €6 billion mark for the first time. In Italy, revenues advanced by 14.5% over the full year and by 19.9% in the fourth quarter, passing the symbolic €1 billion mark. Poland’s revenues (in euros) grew 13.1% for the year as a whole to €2.2 billion and 10.2% in the fourth quarter (4.0% and 3.0% respectively on a pro forma like-for-like basis), benefiting from the first full year of consolidation of UPC Polska as well as favorable exchange rate trends.

In France, Free ended 2023 as the market leader in terms of net adds, both in the Mobile and Fixed markets. It gained 787,000 net new Mobile subscribers during the year, including 213,000 in the fourth quarter, and 234,000 net new Broadband and Ultra-fast Broadband subscribers (of which 858,000 new fiber subscribers), including 100,000 in the fourth quarter, which represents Free's best quarterly performance in 10 years. This represented two major milestones for Free, which topped the 15 million Mobile subscribers and 5 million fiber subscribers marks in 2023. This exceptional revenue performance was accompanied by higher ARPU for both Mobile and Fixed-line subscribers, as well as a lower churn rate, testifying to the power of the Free brand. And it was a very busy year too in B2B, with the launch of Free Pro's Cyber XPR solutions following the Group’s acquisition of a majority stake in iTrust, the expansion of Free Pro's offerings after its integration of Canal+ Business, the launch of an extended range of new services by our fintech Stancer, and Scaleway's state-of-the-art additions to its suite of services (PaaS, QaaS), including the launch of a dedicated AI offering thanks to the purchase of its supercomputer.

In Italy, iliad Italia was the net add leader in the Mobile market for the sixth year running, with 1.16 million net new subscribers (of which 255,000 in the fourth quarter), allowing it to pass the 10 million Mobile subscribers mark less than 6 years after it was launched. And for the second year in a row, it was also the leader for net adds in the Fixed market (out of Italy’s top five telcos), notching up 98,000 new subscribers during the year, with the pace of growth accelerating in the fourth quarter (35,000 net adds). These excellent sales performances are the result of the extension of our addressable fiber market as well as the sales and marketing initiatives launched during 2023, in particular iliad Space in July. They also clearly illustrate our subscribers' commitment to a strong brand that has remained true to its values since its launch.

In Poland, Play recorded the country’s highest number of net adds² for the second consecutive year, both in the Mobile and Fixed markets. It added 336,000 net new Mobile subscribers during the full year (70,000 in the fourth quarter), including 397,000 subscribers who signed up to a plan (120,000 in the fourth quarter), with the prepaid segment continuing to return to normal levels (a reduction of 61,000 cards in 2023, of which 51,000 in the fourth quarter). With these adds, Play passed the 13 million active Mobile subscribers mark in 2023. With sales performance rebooted since end-2022, and following the completion of the PŚO transaction with InfraVia on April 1, 2023, as well as the launch of new broadband and TV packages in May 2023 and the legal merger of UPC and Play in August 2023, the Group is now ready to fully leverage the potential of the Play brand in the Fixed and convergence markets. Play’s net adds in the Fixed market re-accelerated during the fourth quarter, coming in at 38,000 and bringing the total to 122,000 for the year as a whole³.

At €3.44 billion, consolidated EBITDAaL was up 4.2% year on year (2.1% on a pro forma like-for-like basis). EBITDAaL growth was primarily led by France (up €105 million, or 4.6%), where the increase in revenues billed to subscribers offset energy price inflation and higher personnel costs, as well as Italy (up €36 million, or 17.2%). EBITDAaL for Poland was stable versus 2022 in euros (but down 3.1% in local currency), reflecting a year of transition that saw the service agreement with PŚO set up as from April 1 and sharp rises in energy prices. Consolidated profit for the period fell 58% to €318 million due to (i) an unfavorable basis of comparison resulting from the one-off €330 million gain recorded in 2022 on the sale of OTP to Cellnex (ii) higher depreciation due to the high level of investments in recent years and (iii) to a lesser extent, the higher level of interest rates. 

Consolidated capex totaled €2.02 billion, representing some 22% of revenues, down 5.8% on 2022⁴. This year-on-year decrease was attributable to Italy’s lower outlay for 5G equipment after its capex drive in 2022 and the creation of the Zefiro joint venture. In France, capex remained at a high level (up 0.5%), reflecting investments to keep up with the Group’s major market share gains, as well as its build-up of inventories of the Freebox Ultra (which was launched on the market in late January 2024) and Scaleway's purchase of a supercomputer, giving the Group the most powerful cloud-native AI computing capacity deployed to date in Europe. In Poland, Play accelerated its 5G rollout, continued to expand its mobile network (1,050 additional active base stations) and launched a new Internet box drawing on the technology developed in France with the Freebox.

Consolidated operating free cash flow⁵ rose by €264 million, or 22.6%⁶, in 2023 to €1.43 billion. This increase was driven by Italy, which ended the year with positive operating free cash flow for the first time (at €4 million, up €174 million year on year), as well as by France (up €96 million).

The Group reinforced its financial structure during the year, reducing its leverage ratio to 3.0x at end-2023 from 3.2x at end‑2022. This 0.2x decrease was achieved thanks to the year-on-year growth in EBITDAaL, as well as the proceeds received from the sale of a 50% stake in PŚO – our Fiberco in Poland – and the divestment of our residual interest in OTP. The Group is in an excellent liquidity position, with €1.2 billion in cash and cash equivalents and €3.7 billion in undrawn credit facilities at December 31, 2023. Thanks to this ongoing financial discipline and effective management of our capital structure, we are well placed to seize exciting external growth opportunities, such as our recent transaction with the Kinnevik group which, once completed and approved by the relevant authorities, will make us Tele2's main shareholder, holding 20% of its capital and around 29% of the voting rights.

Also during 2023, the iliad Group resolutely pursued the implementation of its Climate Plan, based on the two priority action areas announced in January 2021: reducing its carbon emissions and decarbonizing its energy supply. Two major milestones were passed in this area a few weeks ago, with the validation of our carbon reduction pathway by the Science Based Targets initiative (SBTi) and the signing of three new power purchase agreements in our three geographies.

Commenting on the Group’s performance, Thomas Reynaud, iliad’s Chief Executive Officer, said: "iliad went all out to win in 2023, gaining strong market share in France, Italy and Poland. The Group also transformed itself during the year, in particular by investing massively in artificial intelligence, the Cloud and connectivity for businesses. We consolidated our robust financial position, enabling us to sign an agreement to become the main shareholder⁷ of Tele2 in early 2024 and to extend our geographic reach to eight countries. And we intend to stay on the winning track, as we're aiming to become Europe’s fifth-largest telco this year!"