VodafoneZiggo Group B.V.

The stable outlook reflects our view that VodafoneZiggo's free operating cash flow (FOCF) to debt (adjusted for its vendor financing program) will remain positive despite market competition and regulatory pressures, and its adjusted leverage will remain above 6x. We could lower our ratings if reported FOCF after leases becomes consistently negative. This could happen due to a challenging regulatory and competitive environment, for example, if increased competition from the Tele2 and T-Mobile merger and KPN translate into lower average revenue per user (ARPU) and materially higher net customer losses than our base-case expectation. This, alongside the company's aggressive shareholder returns and sustained use of vendor financing, could more than offset the merger's cost synergies and translate into a sustainably weaker

...S&P Global Ratings does not expect COVID-19 to materially affect VodafoneZiggo Group B.V.'s operating performance. Impacts stemmed from advertising revenue, handset sales, and roaming, which impact on EBITDA was partially offset by lower roaming, marketing, and production costs. In addition, while there could be some negative effect on the group's business-to-business (B2B) segment, its exposure represents about 25% of revenue, and we anticipate this could be mitigated by increased revenue from retail broadband, as customers continue to upgrade contracts to faster internet following the emphasis on remote working. As VodafoneZiggo accelerate its 1 Gbps speed coverage (100% coverage by 2022), success will hinge on customers' take-up rate, however. This translates to subscription revenue being flat and slight total revenue growth (about 1%) in 2020, mainly from nonsubscription and other revenue, including handset sales. The EBITDA margin is anticipated to somewhat increase in 2020 on improved...

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