Minorities should probably wait for Voo's takeover to be bought out

Orange said yesterday that it has no plans to make a tender offer on Orange Belgium. The group should however end up launching an offer on its subsidiary but probably not in the short term. We would advise cautious on potential dilution of the minorities (with the acquisition of Voo) which could ultimately represent only 12% of the capital (vs 23% today). In our opinion it is currently still better to buy Orange itself.

Reminder of our "simple-track" coverage of Orange Belgium

Orange Belgium released its H1 this morning. It is the occasion to remind that we now follow Orange Belgium only through Orange. We had recommended investors to tender their shares to Orange’s offer in early 2021. Orange could launch a new offer in 2023 but this takes its time: a way of saying to shareholders who did not bring their shares to the offer that they will not gain much in the end.

A buy-out of minorities at a good price

Orange has decided to use part of the funds received from its long-standing tax dispute with the French Government to buy the minorities of Orange Belgium at €22 per share. We should recommend investors to tender their shares to the offer when it is officially launched.

Why still a 30% discount relative to its February levels?

Impressive EBITDA growth in Q3 while the EBITDA guidance given before the Covid crisis was confirmed. All in all we are confident that, in 2021 as in 2019, and after a slight decline in 2020, revenues should grow by around 2%/3%... while the EBITDA margin should further improve. We reiterate our strong buy on the stock which is trading at a 30% discount to its February levels.

A good set of results in Q4

Quite a solid and better than expected set of results for Orange Belgium in Q4 with revenues and EBITDA up respectively by 4.8% yoy and 5.5%. As for 2020, the group expects low-single digit revenue growth while the EBITDAaL should stand between €310m and €330m (vs. €300m in 2019). It will propose a dividend of €0.6 for 2019, up by 20% yoy. And we believe it could propose €0.7 in one year. We maintain our Add on the stock.

A not so bad EBITDA excluding the termination of Telenet MVNO contracts

Orange Belgium is transitioning from a mobile-only operator into a high-quality convergent operator (relying on the new cable wholesale regulation). Excluding the impact from the loss of Telenet MVNO revenues, the adjusted EBITDA would have shown a 14% improvement as efficiency measures take hold. We believe the group should regain an EBITDA margin of 25% in the coming years and we remain at Add on the stock with a 10% upside.

Telenet has accelerated the migration of its mobile customers towards BASE network

The group has released its Q4 numbers: reported revenues down by 1.3% yoy (vs +1.5% in the first 9m) and reported EBITDA down by 24.9% yoy but Q4 16 included a positive impact of the Walloon tax agreement of €15.5m (excluding this EBITDA would have decreased by 1.8% (but vs a 1.5% increase in the first 9m)). As for 2018, the group expects its total service revenues to grow in 2018 for the third year in a row but aims at an adjusted EBITDA between €280m and €300m. This takes into account the los

A correct Q3 despite the EU roaming impact

Q3 revenues increased by 1.7% yoy (as in H1). This is quite a good performance to be achieved despite the impact of the regulatory implementation of Roam-Like-at-Home (as of 15 June 2017, retail roaming within the EU has to be offered at domestic retail prices). Excluding this impact of c.€15m, the global revenues would have increased by 6.5% yoy (and service revenues by 8.2%!): the rapid adoption of 4G data usage and the increase in both the postpaid customer base and ARPU contributed substanti

Data consumption fuels revenue and EBITDA growth

Q2 revenues increased by a solid 3.5% yoy growth (they were only nearly stable in Q1). In Q2, Orange Belgium generated service revenues of €279.5m, a very good increase of 4.3% yoy (they were flat in Q1): the rapid adoption of 4G data usage and the increase in both the postpaid customer base and ARPU contributed substantially to this positive development and fully offset the negative impact of the EU Roaming Regulation (service revenues should have grown by 7.5% excluding it!). Like in Q1, EBIT

Excluding EU roaming and despite cable costs, Q1 EBITDA increased by 12%

Q1 revenues were nearly stable yoy (-0.7%) but the mobile equipment sales (representing a little less than 10% of the global turnover) were down by 13% with the reduction in the number of subsidised devices and also a different launch date of some popular models. In Q1, Orange Belgium generated service revenues of €274m, a very correct increase of 0.6% compared with the same period last year (i.e. +2.6% excluding the EU Roaming Regulation): the rapid adoption of 4G data usage and the increase in

New convergent offers and rebranding into Orange Belgium

H1 revenues were stable yoy (+0.3%) but the mobile equipment sales (representing a little less than 10% of the global turnover) were down by 11%, with the decline in basic mobile phones sold and a joint offer at the high end. In H1, Orange Belgium generated mobile service revenues of €504.5m, a solid increase of 1.9% compared with the same period last year (i.e. +3.2% excluding the EU Roaming Regulation): the rapid adoption of 4G data usage and the increase in both the postpaid customer base and

May be the time to buy Mobistar

Mobistar’s revenues amounted to €1.235bn in 2015, a decline of 1.1 % yoy. However, the turnover in Q4 amounted to €322.6m, an increase of 2.3 % yoy. In 2015, Mobistar achieved a restated EBITDA of €276m, representing an increase of 0.4 % compared to 2014. The restated EBITDA in Q4 2015 amounted to only €47.9m, compared to €57.2m in the same period last year. However, it should be noted that the company adopted a prudent approach to the pylon tax with an additional provision of €10m in Q4 for 20

Morning Note – 24 April 2024

Filtronic - LEO liftoff: SpaceX strategic agreement and $20m order

Just 15 months after winning its first order in the Low Earth Orbit (LEO) satellite communications market, Filtronic has announced a 5-year strategic partnership with SpaceX which includes an initial $19.7m (£15.8m) E-band amplifier production order for delivery in FY25. As a result, we upgrade our FY24/FY25 forecasts and lift our target price to 57.4p (was 37.5p), equivalent to 74% upside. Although this is the first time SpaceX’s Starlink has been named as a Filtronic customer, this is now the

Filtronic - Agreement with SpaceX drives upgrades

Filtronic has signed a strategic partnership and commercial agreement with SpaceX which includes a production order worth £15.8m and warrants that could be exercised for up to 10% of existing share capital. Filtronic announced its first orders from SpaceX in January 2023, although the customer was unnamed at that point. Since then, SpaceX has placed orders totalling $43m (including yesterday’s order) for products to support the build out of its Starlink low Earth orbit (LEO) satellite constellat

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Morning Note – 3 April 2024

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Calnex Solutions - FY24 trading update – marking time

Calnex has released a pre-close trading update for the year to March 2024, indicating that revenue would be £16.3m, c£0.7m below our forecast, partly due to the timing of orders at the end of the period. Group trading has been impacted by the well-documented, continuing challenges in the Telecoms sector which have seen delayed project timings leading to corresponding delays in customer spending. Administrative costs are being controlled and are focussed on maintaining R&D. Calnex remains confide