Research Update: Telco Altice France S.A. Outlook Revised To Negative On Parent?s Negative Free Cash Flow; Ratings Affirmed

We have revised the outlook on telecommunications and media holding company Altice Europe N.V., the parent entity of the group that caps the sub-group rating (Altice France and Altice International), to negative on our revised forecast for negative free operating cash flow (FOCF) in 2019 and high debt to EBITDA of above 6.0x through 2020, driven by operational underperformance. We also forecast weaker FOCF and leverage at Altice France, which comprises 74% of Altice Europe's EBITDA, due to its lower-margin customer mix, lack of future revenue and EBITDA growth prospects in the consumer segment, and weaker negative reported FOCF in 2018 versus our base case. We are therefore revising our outlook on Altice France to negative from stable and affirming

...- We have revised the outlook on telecommunications and media holding company Altice Europe N.V., the parent entity of the group that caps the sub-group rating (Altice France and Altice International), to negative on our revised forecast for negative free operating cash flow (FOCF) in 2019 and high debt to EBITDA of above 6.0x through 2020, driven by operational underperformance. - We also forecast weaker FOCF and leverage at Altice France, which comprises 74% of Altice Europe's EBITDA, due to its lower-margin customer mix, lack of future revenue and EBITDA growth prospects in the consumer segment, and weaker negative reported FOCF in 2018 versus our base case. - We are therefore revising our outlook on Altice France to negative from stable and affirming our 'B' rating. Altice France's 'b+' stand-alone credit profile (SACP) remains unchanged. - The outlook reflects a possible downgrade of Altice France over the next 12 months if Altice Europe's EBITDA declines further in 2019, or if we...

Research Update