France's Iliad posts higher core profit as Italy drives growth in Q1
Financial Performance and Strategic Developments
By Leo Marchandon and Gianluca Lo Nostro
Q1 Earnings Overview
May 21 (Reuters) - French telecoms group Iliad reported a 1.2% increase in first-quarter core earnings on Thursday, as it continued to rack up new subscribers in Italy despite intense competition in its biggest market, France.
EBITDAaL and Revenue Growth
Total earnings before interest, taxes, depreciation and amortisation after leases (EBITDAaL) in the first three months of 2026 were €942 million ($1.1 billion) on organic revenue growth of 3.3%. Italy posted the biggest core profit jump, with a 25% year-on-year surge to €111 million.
Subscriber Growth by Market
The unlisted group, owned by French tech tycoon Xavier Niel, added 200,000 subscribers in Italy, while customer growth in France and Poland remained flat despite higher fibre adoption.
Market Position and Competitive Landscape
No-Frills Mobile Plans and Market Disruption
Iliad is known for its no-frills mobile plans, which disrupted the highly regulated telecoms markets in France and Italy after their respective launches in 2012 and 2018, triggering intense price competition among operators.
Cash Flow and Future Outlook
Free Cash Flow Performance
The group's bottom-line free cash flow, the money left over after debt costs and government spectrum payments, nearly doubled to €416 million, helped by lower licence fees. It said it expected to generate more cash in 2026 than it did last year.
Strategic Moves and M&A Activity
Exclusive Talks with Altice France
Iliad is in exclusive talks, extended until June 5, with Altice France to buy rival operator SFR in a consortium led by Bouygues and alongside Orange. The proposed deal values SFR at €20.35 billion and would allow Iliad to acquire nearly a third of the assets, mainly in business-to-consumer and infrastructure.
CEO Commentary on Ongoing Negotiations
Iliad CEO Thomas Reynaud told reporters in a post-earnings call that the discussions were ongoing and all parties were taking a constructive approach.
"This is an extremely complex transaction, more complex than even the most complex deals, and the outcome remains uncertain," Reynaud said.
Additional Information
($1 = 0.8598 euros)
(Reporting by Gianluca Lo Nostro, Leo Marchandon and Rihab Latrache in Gdansk; Editing by Matt Scuffham and Milla Nissi-Prussak)
