Report Overview

TalkTalk UK – Cost savings drive earnings in a challenging market

TalkTalk grew EBITDA by 10% in 2019/20, an impressive cost cutting driven result, with revenue and gross margin falling as the company struggles with the move to high speed

The company is cautious on 2020/21, indicating only stable EBITDA citing CV-19 related pressures, although the lockdown has also brought much lower churn and an improving price environment

The move to full fibre could prove challenging in the longer term, but it also brings an opportunity to rebrand away from a pure price focus, the source of much of TalkTalk’s challenges

Contents

Subscriber base stabilises on lower churn…

…but revenue decline accelerates

Pressure on existing customer pricing…

…but new customer price pressure easing

Churn, and new sales, down in lockdown

EBITDA expectations (if not guidance) hit…

…but sustaining growth in 2020/21 will be challenging

Full fibre brings challenges, but maybe opportunities too

List of charts/tables

Figure 1: TalkTalk Headline EBITDA progression (£m)

Figure 2: TalkTalk on-net net adds (000)

Figure 3: TalkTalk monthly on-net churn

Figure 4: Complaints about fixed broadband per 100,000 customers

Figure 5: Consumer on-net operating performance

Figure 6: Group revenue growth

Figure 7: TalkTalk price increases

Figure 8: Broadband entry level dual-play pricing, new customers (£/month)

Figure 9: Broadband high speed pricing, new customers (£/month)

Figure 10: TalkTalk gross adds and churn during the lockdown

Figure 11: TalkTalk Group financial results (£m)

Figure 12: EBITDA/OCF growth in year to March 2000