European telecom giant Altice N.V., parent of No. 3 U.S. cable operator Altice USA, announced a sweeping management restructuring Friday that will see the CEO of the operation step down, while the chief of its domestic operations will assume a dual role.
Altice N.V. CEO Michel Combes resigned Friday and Altice USA chairman and CEO Dexter Goei will take on the additional role of CEO of the European parent. Altice founder Patrick Drahi will also return as president of the board of directors of the European telecom giant.
The moves come after Altice N.V. has stumbled in its European telecom business. Its stock was down more than 20% Nov. 3 after a disappointing third quarter and the revelation that it would come in at the low end of earnings guidance for the year. So far this year Altice N.V. shares are down about 40% and the bleeding has spread to Altice USA, which has seen its stock fall more than 25% since its June IPO, mainly, according to analysts, because of its ties to the parent company.
According to reports, some investors have worried that Altice N.V.’s poor results could jeopardize its ability to service its heavy debt load – about five times its cash flow and substantially higher than its European telecom counterparts.
In a statement Altice N.V said the new management structure “is designed to better implement Altice's strategy, create clearer accountability amongst management and improve the operational and financial performance of the business. It aligns more fully the interests of founders and group management, both with significant ownership in the group, and the public shareholder base.”
In addition to Drahi’s and Goei’s new roles, Altice N.V. chief financial officer Dennis Okhuijsen will assume the additional role of CEO of Altice Europe; and SFR Media CEO Alain Weill was named chairman and CEO of SFR Group and chief operating officer of Altice Media.
"Michel has been an important part of the Altice story when he first joined the Board of Altice,” Drahi said in a statement. “He provided key support and judgment as we developed our expansion strategy. As CEO, Michel critically created the group structure to operate a transatlantic communications business while driving key technology, research and innovation initiatives, which will serve Altice for the future. I would like to personally thank him for his contribution, integrity, loyalty and friendship."
Combes joined Altice N.V. in 2015 as chief operating officer, after leaving equipment maker Alcatel-Lucent which was acquired by Nokia. He became Altice CEO in 2016, when Goei stepped down from that role to take over as head of the U.S. cable operations.
"I would like to thank Patrick and the team for their confidence over the past years,” Combes said in a statement. “It has been a privilege to be part of the Altice story, accompany the expansion of the group and lead the industrialization of the convergence strategy. With Patrick returning as President of the group, Altice will be well positioned to execute its strategy across all operations."
