Iliad correctement valorisé selon Bank of America Merrill Lynch

Bank of America Merrill Lynch dégrade sa recommandation sur Iliad de « achat » à « neutre », avec un objectif de cours de 170€, estimant que la valorisation de l’opérateur de télécommunications est désormais généreuse.

[cleeng_content id= »480322302″ description= »Plus d\’analyses et de commentaires à découvrir…  » price= »0.19″ t= »article »]Les raisons du changement d’opinion sont explicitées comme suit:

« Downgrade to Neutral: Better case valuation priced in
We downgrade Iliad to Neutral for three key reasons. First, valuation now appears full. Based on our estimates, Iliad offers a 16E EFCF yld of c6.5% – this EFCF is based on very strong wireless execution (margin of 29.5%) and declining Group capex. Iliad’s 2016E P/E is 17.3x. Second, the current share price implies a valuation of 14x 2015E fixed-line FCF and 9x 2016E mobile EBITDA (or 50% ownership of a merged wireless entity) – all blue sky scenarios (BofAML view & based on above-consensus BofAML ests). Last, we see just 1% upside to our new PO (which rises from €155 to €170/sh, post strong H2 fixed/mobile EBITDA).
Strong top-line and EBITDA growth set to continue
Fixed-line revenue (Q4 12A: +11.8%, Q1 13E: +9.5%, Q2 13E: +8.9%) and EBITDA (H2 12A: +20.7%, H1 13E: +13.9%) growth should remain robust, driven by Freebox/ARPU, renewed quad-play pushes and H2 12 momentum (p3-4). FT’s new set-top box makes the French PTT competitive once again, but Iliad’s Freebox remains a superior proposition (Blu-Ray, HD capacity – p4). Wireless growth is likely to remain decent, although ARPU is tailing off. Free Mobile’s move to contract (c60% of market value, p6) is not surprising. Subsidies on new highend Asian-manufactured phones make sense – SAC would be just €4-6/mth (18-mth contract), with potential ARPU uplift of >€15/mth (from €2/mth to €18/mth).
Network share, M&A on the agenda – all eyes on Bouygues

Should Bouygues Tel do network sharing with SFR, Iliad may appear isolated (vs two strong 4G networks – p8). However, a Bouygues-Free agreement would be very FCF-accretive for Iliad. We continue to believe that a Bouygues-Free combination is the only permissible French merger (Reuters, 7 Jan). Synergies would be large (MergeCo worth >€10bn, p9) – but large obstacles remain (p10).
Free Mobile will swing from a negative EBITDA contribution (2012A: -€46mn) to a source of EBITDA growth (2013E: +€99mn) – a substantial difference of €145mn, YoY. We are now c15% above consensus for 2014E EBITDA (vs 31.5% above consensus 12 months ago). Our EPS estimate declines are driven by rising D&A. »

On notera que pour BofAML, l’hypothèse la plus crédible en matière de consolidation du marché français des télécommunications serait un rapprochement entre Bouygues et Free (alors qu’une fusion SFR-Free a été rejetée par les autorités françaises de la concurrence). Notons que cette analyse relève d’une logique purement financière/théorique – les dimensions industrielles/sociales d’une telle opération n’étant pas à l’évidence considérée par le courtier.

L’argument de BofAML est le suivant:

« Only a Bouygues-Free combination would likely be allowed We have noted that the EC approved the Orange Austria / 3 merger, at least in part, since the Merge Co will still be smaller than the two larger existing Austrian wireless operators (TKA and T-Mobile).
This caveat suggests that only No3 and No 4 operators are likely to be allowed to merge, across the European Union. Mergers involving the market leader – or the No2 player – seem unlikely to be approved (BofAML view).
“They are also proportionate given that the new company will be smaller than the other two remaining competitors.” – Joaquin Almunia (Dec 12).
Austrian deal approval (EC document) suggests that a combination of Bouygues Tel and Free Mobile is the only permissible merger in French wireless (this merger was discussed in a Reuters article – 17 Jan 2013).
A Bouygues Tel merger makes financial sense…the numbers add up…
We continue to believe that a Bouygues-Telecom / Free Mobile deal would hold four clear and very sizeable synergies:
Roaming synergy: Free Mobile would migrate €400mn-€500mn pa of roaming traffic (2013E-15E) on to the MergeCo (old Bouygues Tel) network – a considerable opex synergy;
Capex synergy: Free Mobile could scale back its new network roll-out (currently costing €300mn pa) – a considerable capex synergy;
Spectrum synergy: Free Mobile would have sufficient spectrum (notably Bouygues Telecom’s 800MHz and 1800MHz bandwidth) to serve its evergrowing subscriber base;
Market inflation: A merger could see the French wireless market enter a period of inflation, after 10+ years of very heavy price deflation. »

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