Intrinsic Value iliad S.A. (ILD.PA)

• Previous Close: €182.00
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

iliad S.A. operates as a disruptive force in the European telecommunications sector, specializing in integrated fixed and mobile services across France and Italy. The company’s core revenue model hinges on subscription-based offerings, including VoIP, IPTV, and flat-rate calling plans, with its flagship Freebox multiservice ADSL product driving customer retention. By leveraging cost-efficient infrastructure and aggressive pricing strategies, iliad has carved a niche as a value-oriented alternative to incumbent operators. Its market position is reinforced by a combined subscriber base of 25.8 million across its two key markets, reflecting strong penetration in competitive landscapes. The company’s ability to bundle services and undercut rivals on price has allowed it to sustain growth despite regulatory and competitive pressures. With a focus on innovation and scalability, iliad continues to challenge traditional telecom paradigms while expanding its footprint in underserved regions.

Revenue Profitability And Efficiency

In FY 2020, iliad reported revenue of €5.87 billion, demonstrating resilience in a saturated market. Net income stood at €334 million, with diluted EPS of €5.63, reflecting disciplined cost management. Operating cash flow of €2.11 billion underscores robust cash generation, though capital expenditures of €2.02 billion highlight ongoing investments in network infrastructure and service expansion.

Earnings Power And Capital Efficiency

The company’s earnings power is supported by its high-margin subscription model and operational scalability. Despite significant capex, iliad maintains a strong cash conversion cycle, with operating cash flow covering 104% of capital expenditures. This balance indicates efficient reinvestment of earnings to sustain growth without compromising liquidity.

Balance Sheet And Financial Health

iliad’s balance sheet shows €686 million in cash against total debt of €11.87 billion, reflecting a leveraged but manageable position. The debt load is typical for capital-intensive telecom operators, and the company’s consistent cash flow generation provides a buffer for servicing obligations. Liquidity remains adequate, with no immediate refinancing risks evident.

Growth Trends And Dividend Policy

Subscriber growth in Italy and France has been steady, though market saturation may limit future expansion. The company paid a dividend of €14.63 per share in FY 2020, signaling confidence in sustained profitability. However, dividend sustainability depends on maintaining cash flow amid competitive and regulatory headwinds.

Valuation And Market Expectations

With a beta of 0.28, iliad’s stock exhibits lower volatility relative to the market, appealing to risk-averse investors. The absence of reported market cap data limits precise valuation analysis, but the company’s earnings multiple and dividend yield suggest a balanced risk-reward profile in the telecom sector.

Strategic Advantages And Outlook

iliad’s strategic edge lies in its disruptive pricing and ability to bundle services, though competition from incumbents and 5G rollout costs pose challenges. The outlook remains cautiously optimistic, with growth hinging on execution in Italy and efficiency gains in France.

Sources

Company filings, Euronext disclosures