ALTICE – FIRST QUARTER 2016 PRO FORMA1altice.net/sites/default/files/pdf/20160511-Altice-Q1-16... · 2017-05-22 · EARNINGS RELEASE May 11, 2016 2 o Portugal: revenue inflection

EARNINGSRELEASEMay11,2016

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ALTICE–FIRSTQUARTER2016PROFORMA1RESULTS

• AlticeGroupcontinuespositiveoperationalmomentuminQ12016:

o OverallAlticeGroupadded67kpostpaidmobilecustomersand105kfiberbroadbandcustomers

o France: continued fiber customer net additions (+66k) and B2Cmobile postpaid net losses of -28k (vs. -144k in Q1 2015) despitechallenging market environment characterized by heavypromotions,high-endbaseadding+13k

o Portugal: continued convergent 4P/5P (+6k) and postpaid mobilesubscribergrowth(+35k)withbestcustomerservicemetrics in themarket2

o Suddenlink: strong customer relationship (+22k) and broadbandsubscribergrowth(+30k)

o Dominican Republic: continued postpaidmobile subscriber growth(+15k)andfibercustomernetadditions(+4k)

o Israel: stabilization of cable customer base (-2k, best performancesinceAlticeIPO)withreturntogrowthinMarch

• Operational momentum setting the base for improvement in revenuetrendsthroughout2016:

o France:stabilizedcustomerbase,contentenrichedservicebundles,pricing initiatives and improving market dynamics to drivesignificanttop-lineimprovementvs.Q12016(-6.1%YoY)

1FinancialsshowninthesebulletpointsareproformadefinedhereasresultsoftheAlticeNVGroupasifallacquisitionshadoccurredon1/1/15,includingPortugalTelecom,SuddenlinkandNextRadioTV(andexcludingCabovisao,ONI,LaReunionandMayottemobileactivitiesasifthedisposalsoccurredon1/1/15).Segmentsshownonastandalonereportingbasis,Groupfiguresshownonaconsolidatedbasis2MEOhadtheleastnumberofcustomerservicecomplaintsreceivedin2015bytheNationalCommunicationsAuthority(Anacom)ofallitscompetitorsinPortugal.


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o Portugal: revenue inflectionreached inQ12016(-3.5%vs. -8.7%inQ42015)drivenbyB2CtrendinflectingasB2Bsegmentisexpectedtoimprovefurtherin2016

o US:returntohistoricalgrowthrate(+6.7%vs.3.7%inFY2015onaCCbasis)asaresultofcustomerandARPUgrowth

• RobustfinancialperformancedespitetemporaryweaknessinFrancewithMEOandSuddenlinkdeliveringrecordresults:

o Strong growth in Portugal (adjusted EBITDA +20.9% YoY), US(+18.5%onaCCbasis)andDominicanRepublic(+7.5%onaCCbasis)offsettingweaknessinFrance(-9.0%);

o Group EBITDA andOperating Free Cash Flow grew 0.9% and 1.1%respectivelyYoY3inQ1evenwithacceleratedinvestments

o GroupadjustedEBITDAmarginexpandedby1.3ppYoYto37.9%inQ1asefficiencymeasurescontinue

• Robust, diversified and long-term capital structure: Successful €10bnrefinancing,extendingGroupweightedaveragedebtmaturityfrom5.9to7.3years(onlymarginalincreaseinaveragecostfrom5.5%to5.8%).4

• Accelerated re-investments into fiber/mobile networks and selectivecontent:

o France:leading4GmobilesitebuildoutinFranceagaininQ12016(+985 sites, more than double peers) and accelerated fiberbroadbandcoverageexpansion(+420khomespassedinQ1tototal8.1m,ontrackfor22mby2022);#1fibercoverageinFrance

o Portugal: accelerated fiber broadband coverage expansion (+170khomespassedinQ1tototal2.4m,ontrackfor5.3mby2020)

3OpFCFexcluding€44mofcapitalisedexclusivecontentcostsinPortugalformulti-yearcontracts4ExcludingCablevisiondebt


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o Suddenlink:Ontracktodelivernext-generationbroadbandservicesacrossthefootprintby2017,atlowercostthanoriginallyplanned

o Media and content acquisitions to advance “access plus content”strategyinFrance.

• FY2016guidancereiterated

May11, 2016: AlticeNV (Euronext: ATCNA andATCBNA), today announcesfinancialandoperatingresultsforthequarterendedMarch31,2016.

StrongproformaadjustedEBITDAgrowthinUSandPortugal

§ GroupRevenue€4,260m,down2.7%YoY5:o €2,573mFranceRevenue,down6.1%o €1,138mInternationalRevenue,up1.3%6o €570mUS(Suddenlink)Revenue,up9.0%onareportedbasis7o Sequentialrevenuetrendsandleadkeyperformanceindicators

pointingtoimprovingGrouprevenuetrendoutlookfor2016§ GroupadjustedEBITDA€1,615m,up0.9%YoY8:

o €851mFranceadjustedEBITDA,down9.0%o €533mInternationaladjustedEBITDA,up12.6%9;Portugal(MEO)

adjustedEBITDAup20.9%o €242mUS(Suddenlink)adjustedEBITDA,up21.0%onareported

basis10§ GroupadjustedEBITDAmarginexpandedby1.3%ptsYoYto37.9%:

o Francemargincontractedby1.1%ptsto33.1%duetoheavypromotionalactivity

5GroupRevenuedeclined3.3%onaconstantcurrency(CC)basis6InternationalRevenuedeclined0.7%onCCbasis7US(Suddenlink)Revenueincreased6.7%onCCbasisto$628minlocalcurrency8GroupadjustedEBITDAincreased0.3%onCCbasis9InternationaladjustedEBITDAincreased11.9%onCCbasis10US(Suddenlink)adjustedEBITDAincreased18.5%onCCbasisto$267minlocalcurrency;IFRSadjustmentfromUSGAAP+$1.3mtoEBITDAandcapex


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o Internationalmarginexpandedby4.7%ptsto46.9%;Portugal(MEO)marginexpandedby9.8%ptsto48.4%

o USSuddenlinkmarginexpandedby4.2%ptsto42.5%§ GroupOperatingFreeCashFlow11of€899m,up1.1%YoY12

KeyStrategicUpdate

§ SFR: On 27 April 2016, SFR announced the acquisition of Altice N.V.’s49%minoritystakeinNextRadioTV,aFrenchmediaoperatorfocusedonmainstream news, sports, business, high-tech and discovery (includingleading brands BFM and RMC); the proposed transaction valuesNextRadioTV at an enterprise value of €741m13 as the company isacquired at cost relative to the original price paid by Altice; access to100%oftheeconomics.SFRalsoannouncedithadenteredintoexclusiveexclusive negotiations to acquire Altice Media Group France at anenterprise value of €241m or 4.5x adjusted EBITDA pro forma for taxbenefitsandsynergies.ThesecontentacquisitionsarepartofaconvergedstrategytostrengthenSFR’s product offerings, aiming to reduce reduce churn, increaseARPUand revenue growth (including new advertising revenues). Tocomplement existing TV channels being acquired, SFRwill leverage theNextRadioTVandAMGplatformstolaunchtwonewnewschannels,BFMParis andBFMSport, aswell as fivenewSFR Sports Channels. SFRhasalso launched a new open-platform digital newsstand application (SFRPresse), with all of the AMG content already available to all SFRcustomers.

11DefinedasEBITDAlessCapitalExpenditure,excludingexclusivecontentcapexof€44minPortugalformulti-yearcontracts12GroupOperatingFreeCashFlowincreased29.4%onCCbasis13IncludingNuméro23.NextRadioTVhasaminoritystakeinN23withanoptiontocontrolafter2017subjecttoregulatoryapprovals.


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§ Portugal: Completed disposals of Cabovisao and ONI on January 19,2016.

Successful€10.1bnrefinancingofexistingdebt

• SFR: Priced $5.19bn of 10-year Senior Secured Notes (Non-Call 5) andissuednew$1,425mand€850mterm loanson6April, 2016;TheEuroequivalent coupon for 7.375% in USD is 5.7%, marginal increase inaveragecostofdebtfrom4.7%to5.2%.14

• Altice International: Priced $2.75bn of 10-year Senior Secured Notes(Non-Call5)on18April,2016;TheEuroequivalentcouponoffor7.5%inUSDis5.8%,averagecostofdebtunchangedatc.6.0%.

• Suddenlink:Priced$1.5bnof10-yearSeniorSecuredNotes(Non-Call5);USDcoupon5.5%,marginal increase inaveragecostofdebt from5.3%to5.5%.

DexterGoei,ChiefExecutiveOfficerofAltice,said:“Wehavemadesignificantprogress in executing our operational, financing and strategic agenda acrossthegroup.IthasbeenachallengingquarterinFrancebutweareconfidentthatour accelerated network investment program, content-enriched serviceoffering and operational improvements will deliver improving resultsthroughout 2016 under the new management. Portugal Telecom is well ontrack to become the bellwether operator in the European communicationsspace. We are excited about Suddenlink’s performance under our first fullquarterofownershipanditsgrowthprospects.Welookforwardtosuccessfullyconcluding the Cablevision regulatory approval process and closing theacquisitioninQ22016.”

14Swapsexecutedatslightlybetterlevelsthananticipatedatthetimeofdebtraisingasannouncedon7April,2016


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Contacts

HeadofInvestorRelationsNickBrown:+41797201503/[email protected]

HeadofCommunicationsArthurDreyfuss:+41799464931/[email protected]

Conferencecalldetails

Thecompanywillhostaconferencecallandwebcasttodiscusstheresultsat2:30pmCET(1:30pmUKtime,8:30amETtoday).

Webcastlive:http://edge.media-server.com/m/p/vj7c4drxDial-inAccesstelephonenumbers:France:+33176772226UK:+442034271902USA:+16462543365ConfirmationCode:7645450


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FinancialPresentation

AlticeN.V.(AlticeNV,the“Company”,orthe“Successorentity”)wascreatedasaresultofacross-bordermergerwithAltice S.A. as per a board resolutiondatedAugust 9, 2015.AlticeNV’s sharesstartedtradingonEuronextAmsterdamfromAugust10,2015onwards.AlticeNVisconsideredtobethe successor entity of Altice S.A. and thus inherits the continuity of Altice S.A’s consolidatedbusiness.AlticeN.V.anditssubsidiarieshaveoperatedforseveralyearsandhavefromtimetotimemade significant equity investments in a number of cable and telecommunication businesses invarious jurisdictions.Therefore, inorder to facilitateanunderstandingof theCompany’s resultsofoperations,wehavepresentedanddiscussedtheproformaconsolidatedfinancialinformationoftheCompany (givingeffect toeach such significantacquisitionanddisposal as if suchacquisitionsanddisposalshadoccurredby January1,2015 including the financialsofPT-Portugal SGPSandCequelCorporation)forthequartersendedMarch31,2015andMarch31,2016(the“ProFormaFinancialInformation”).

This press release contains measures and ratios (the “Non-IFRS Measures”), including AdjustedEBITDAandOperating FreeCash Flow, that arenot requiredby, or presented in accordancewith,IFRSoranyothergenerallyacceptedaccountingstandards.WepresentNon-IFRSmeasuresbecausewebelievethattheyareofinterestfortheinvestorsandsimilarmeasuresarewidelyusedbycertaininvestors,securitiesanalystsandotherinterestedpartiesassupplementalmeasuresofperformanceand liquidity.TheNon-IFRSmeasuresmaynotbecomparable to similarly titledmeasuresofothercompanies, have limitations as analytical tools and should not be considered in isolation or as asubstituteforanalysisofour,oranyofoursubsidiaries’,operatingresultsasreportedunderIFRSorother generally accepted accounting standards. Non-IFRS measures such as Adjusted EBITDA andOperatingFreeCashFlowarenotmeasurementsofour,oranyofoursubsidiaries’,performanceorliquidityunder IFRSoranyothergenerallyacceptedaccountingprinciples. Inparticular,youshouldnotconsiderEBITDAasanalternativeto(a)operatingprofitorprofitfortheperiod(asdeterminedinaccordancewithIFRS)asameasureofour,oranyofouroperatingentities’,operatingperformance,(b)cash flows fromoperating, investingand financingactivitiesasameasureofour,oranyofoursubsidiaries’,abilitytomeetitscashneedsor(c)anyothermeasuresofperformanceunderIFRSorothergenerallyacceptedaccountingstandards.Inaddition,thesemeasuresmayalsobedefinedandcalculateddifferentlythanthecorrespondingorsimilartermsunderthetermsgoverningourexistingdebt.

Financialandstatisticalinformationandcomparisons

FinancialandstatisticalinformationisatandforthequarterendedMarch31,2016,unlessotherwisestated.WherefinancialorstatisticalinformationisgivenforthequarterendedMarch31,2015,anyyearoveryearcomparisonsaretothequarterendedMarch,2014,unlessotherwisestated.


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SummaryFinancials

ProformaInformation


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NotestoSummaryFinancials

(1) PortugalisMEO(formerlyPortugalTelecom)onlyfortheproformafinancialinformationshowninthetablesabove,excludingCabovisaoandONI(disposalscompletedJanuary19,2016).

(2) FortheFrenchOverseasTerritories(FOT),cablerevenueincludesrevenuesfromcableservicesweprovideinGuadeloupeandMartiniqueaswellasxDSLbasedbroadbandInternet(includingIPTV)andfixed-linetelephonyservicesweprovideinGuadeloupe,MartiniqueandFrenchGuiana.TheLaRéunionandMayottemobilebusinessesweresoldonJuly31,2015andsoareexcludedfromtheproformafinancial informationshown inthetablesabove.

(3) “Others” comprisesourB2B telecommunications solutionsbusinessanddatacentreoperations inSwitzerland (GreenandGreenDatacenter),ourdatacentreoperationsinFrance(Auberimmo)andourcontentproductionanddistributionbusinessinFrance(MaChaîneSport,MCS,andSportv).“Others”alsoincludesNextRadioTVcontributingrevenue,EBITDAandcapexof€53.2m,€7.8mand€11.6minQ12016respectively(€48.3m,€7.2mand €0.0m respectively inQ1 2015).On completion of SFR’s acquisition of AlticeN.V.’sminority stake,NextRadioTV resultswill be consolidatedwithintheFrancesegmentgoingforward.

(4) Adjustmentsarerelatedtotheeliminationof intercompanytransactionsbetweencompaniesoftheAlticeGroup.SegmentsareshownonbothastandalonebasisandGroupconsolidatedbasisforreconciliation.

Quarter ended March 31, 2016

In EUR millions Portugal Israel DR FOT OthersTotal Altice

International France USA CorporateTotal

Altice N.V.

Revenue Fixed - B2C 174.3 157.6 27.5 17.2 18.4 394.9 680.5 451.5 0.0 1,526.9Revenue Fixed - B2B 108.1 19.5 9.9 3.3 3.3 144.2 348.8 74.4 - 567.3Revenue Wholesale 68.6 - 17.9 1.5 1.9 89.9 295.3 13.7 - 398.9Revenue Mobile - B2C 142.0 41.5 104.5 21.9 .3 310.2 1,082.0 - - 1,392.2Revenue Mobile - B2B 51.8 12.8 12.2 1.1 - 77.9 166.6 - - 244.5Other revenue content 27.2 - - - 63.6 90.8 - - - 90.8Other revenue datacenter - - - - 4.3 4.3 - - - 4.3Other revenue - - 5.3 4.2 16.1 25.6 - 29.9 0.0 55.6

Total standalone revenues 571.9 231.3 177.3 49.2 108.0 1,137.7 2,573.2 569.5 .1 4,280.5Intersegment eliminations (3.6) - - (1.0) (12.6) (17.3) (3.6) - (0.0) (20.9)

Total consolidated revenues 568.3 231.3 177.3 48.2 95.3 1,120.5 2,569.6 569.5 .0 4,259.7

Quarter ended March 31, 2015

In EUR millions Portugal Israel DR FOT OthersTotal Altice

International France USA CorporateTotal

Altice N.V.

Revenue Fixed - B2C 176.8 156.9 26.5 17.7 17.9 395.7 717.6 412.5 - 1,525.7Revenue Fixed - B2B 117.5 18.5 9.3 3.9 3.3 152.4 359.7 65.8 - 577.9Revenue Wholesale 75.7 - 14.4 1.7 - 91.7 327.9 15.5 - 435.1Revenue Mobile - B2C 136.8 36.0 101.9 23.4 .3 298.4 1,136.6 - - 1,434.9Revenue Mobile - B2B 57.6 13.4 12.0 1.4 - 84.5 198.2 - - 282.8Other revenue content - - - - 53.7 53.7 - - - 53.7Other revenue datacenter - - - - 3.9 3.9 - - - 3.9Other revenue 28.4 - 5.1 1.7 7.5 42.7 (0.0) 28.6 0.0 71.3

Total standalone revenues 592.8 224.7 169.2 49.7 86.7 1,123.1 2,740.0 522.4 .0 4,385.5Intersegment eliminations - - - (1.5) (1.7) (3.3) (3.4) - (0.0) (6.7)

Total consolidated revenues 592.8 224.7 169.2 48.2 84.9 1,119.8 2,736.5 522.4 - 4,378.7


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(5) AdjustedEBITDAisdefinedasoperatingprofitbeforedepreciationandamortization,restructuringandnon-recurringcostsandotherspecificitemssuchasequitybasedcompensation.

(6) In Portugal, capex of €44.4m for exclusive content includes the costs for themulti-year contracts for Porto Canal andother Portuguese footballrights.

GroupKPIs

Q1-16[3months]

Dominican BelgiumandFrenchOverseasFrance Portugal Suddenlink Israel Republic Luxembourg Territories Total

FIBER/NON-FIBERSYSTEMSHomesPassed 9,481 4,849 3,217 2,416 652 260 178 21,052FiberHomesPassed 8,131 2,407 2,968 2,416 553 260 171 16,906

Fiberuniquecustomers 1,881 412 1,489 1,025 147 109 57 5,120Fibercustomernetadds 66 8 22 (2) 4 5 2 105

3P/4P/5Pcustomers 1,485 374 411 487 49 48 45 2,8993P/4P/5Ppenetration 79% 91% 28% 47% 34% 44% 79% 57%

TotalFiberRGUs 5,062 1,193 2,930 2,180 300 233 146 12,045PayTV 1,663 405 1,085 822 130 117 57 4,277PayTVnetadds 70 8 (8) (2) 2 3 2 76PayTVpenetration 20% 17% 37% 34% 23% 45% 33% 25%

Broadband 1,709 381 1,253 696 78 63 45 4,226Broadbandnetadds 75 10 30 2 9 3 2 132Broadbandpenetration 21% 16% 42% 29% 14% 24% 26% 25%

Telephony 1,690 407 592 662 92 53 45 3,541Telephonynetadds 76 8 15 2 11 1 2 116Telephonypenetration 21% 17% 20% 27% 17% 20% 26% 21%

RGUsperfibercustomer 2.7 2.9 2.0 2.1 2.0 2.1 2.6 2.4

FiberARPU €38.7 €41.1 €104.4 €53.9 €37.5 €52.9 € 62.2 -

TotalDSL/Non-FiberRGUs(Incl.DTH) 11,388 2,711 - - 288 - 136 14,523Broadband 4,412 729 - - 90 - 48 5,279Telephony 4,313 1,141 - - 198 - 79 5,731TV 2,663 840 - - - - 9 3,513

MOBILEB2CTotalmobilesubscribers 14,865 6,148 - 1,290 3,918 5 219 26,444

Postpaidsubscribers 12,576 2,712 - 1,239 818 5 151 17,502Postpaidnetadds (28) 35 - 40 15 0 3 67

Prepaidsubscribers 2,289 3,436 - 51 3,100 - 68 8,943

MobileARPU €21.8 €6.9 - €11.8 €9.2 €32.1 € 31.1 -

AsandforthequarterendedMarch31,2016inthousandsexceptpercentagesandasotherwiseindicated


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NotestoGroupKPIs

(1) TotalHomesPassedinFranceexcludesDSLhomesoutsideofNumericable-SFR’sfiberfootprint.PortugaltotalHomesPassedincludesDSLhomesenabledforIPTVoutsideofPortugalTelecom’sfiberfootprint.DominicanRepublictotalHomesPassedincludesDSLhomesoutsideofthefiberfootprint.InIsrael,thetotalnumberofHomesPassedisequaltothetotalnumberofIsraelihomes.

(2) Fiberuniquecustomersrepresentsthenumberofindividualenduserswhohavesubscribedforoneormoreofourfiberbasedservices(includingpay television, broadbandor telephony),without regard to howmany services towhich the enduser subscribed. It is calculatedon a uniquepremisesbasis.ThetotalnumberofFibercustomersdoesnotincludesubscriberstoeitherourmobileorISPservices.FiberCustomersforFranceexcludeswhite-labelsubscribers.ForSuddenlinkitreferstothetotalnumberofuniquecustomerrelationships.

(3) RGUs,orRevenueGeneratingUnits,relatetosourcesofrevenue,whichmaynotalwaysbethesameascustomerrelationships.Forexample,oneperson may subscribe for two different services, thereby accounting for only one subscriber, but two RGUs. RGUs for pay television andbroadbandarecountedonaperservicebasisandRGUsfortelephonyarecountedonaperlinebasis.ForSuddenlinkthisisequivalenttoPSUs,orPrimaryServiceUnits.

Q1-15[3months]

Dominican BelgiumandFrenchOverseasFrance Portugal Suddenlink Israel Republic Luxembourg Territories Total

FIBER/NON-FIBERSYSTEMSHomesPassed 9,119 4,531 3,171 2,364 495 233 178 20,091FiberHomesPassed 6,728 1,835 2,866 2,364 352 233 169 14,548

Fiberuniquecustomers 1,595 388 1,452 1,056 125 109 48 4,772Fibercustomernetadds 48 4 25 (9) 2 (1) 2 70

3P/4P/5Pcustomers 1,149 342 402 487 21 51 33 2,4863P/4P/5Ppenetration 72% 88% 28% 46% 17% 47% 69% 52%

TotalFiberRGUs 4,105 1,110 2,873 2,230 221 234 114 10,886PayTV 1,382 379 1,132 846 118 119 48 4,024PayTVnetadds 49 5 (6) (7) 1 (6) 2 37PayTVpenetration 21% 21% 39% 36% 34% 51% 28% 28%

Broadband 1,373 350 1,184 712 48 61 33 3,760Broadbandnetadds 61 6 35 (1) 4 1 3 109Broadbandpenetration 20% 19% 41% 30% 14% 26% 20% 26%

Telephony 1,350 381 557 672 55 54 33 3,102Telephonynetadds 62 5 10 1 7 0 3 89Telephonypenetration 20% 21% 19% 28% 16% 23% 20% 21%

RGUsperfibercustomer 2.6 2.9 2.0 2.1 1.8 2.2 2.4 2.3

FiberARPU €40.1 €40.1 €98.3 €51.8 €35.6 €49.5 € 59.2 -

TotalDSL/Non-FiberRGUs(Incl.DTH) 12,920 2,849 - - 328 - 164 16,261Broadband 4,925 755 - - 98 - 63 5,841Telephony 4,808 1,234 - - 230 - 87 6,358TV 3,188 861 - - - - 14 4,062

MOBILEB2CTotalmobilesubscribers 15,816 6,271 - 1,057 3,699 4 207 27,054

Postpaidsubscribers 12,860 2,513 - 1,054 742 4 134 17,306Postpaidnetadds (144) 119 - 84 14 - (2) 71

Prepaidsubscribers 2,956 3,758 - 3 2,957 - 74 9,748

MobileARPU €21.8 €6.8 - €12.8 €10.2 €30.6 € 31.5 -

AsandforthequarterendedMarch31,2015inthousandsexceptpercentagesandasotherwiseindicated


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(4) Fiberpenetrationratesforourpaytelevision,broadbandandtelephonyservicesarepresentedasapercentageoffiberhomespassed.

(5) ARPUisanaveragemonthlymeasurethatweusetoevaluatehoweffectivelywearerealizingrevenuefromsubscribers.ARPUiscalculatedbydividingtherevenuefortheserviceprovidedaftercertaindeductionsfornon-customerrelatedrevenue(suchashostingfeespaidbychannels)fortherespectiveperiodbytheaveragenumberofcustomerrelationshipsforthatperiodandfurtherbythenumberofmonthsintheperiod.Theaveragenumberofcustomerrelationshipsiscalculatedasthenumberofcustomerrelationshipsonthefirstdayintherespectiveperiodplusthenumberofcustomer relationshipson the lastdayof the respectiveperiod,dividedby two.For IsraelandDominicanRepublic,ARPUhasbeencalculatedbyusingthefollowingexchangerates:averagerateforQ1-16,€0.232=ILS1.00,€0.020=1DOP.

(6) MobilesubscribersisequaltothenetnumberoflinesorSIMcardsthathavebeenactivatedonourmobilenetworks.InIsrael,thetotalnumberofmobilesubscribersincludesB2CandB2B(B2Bisnotdisclosedseparately)splitbetweeniDENandUMTSservicesasfollows:

AsofMarch31st 2015 2016

inthousandsMobileSubscribers iDEN....................................................................................................................................................................................157 134UMTS..................................................................................................................................................................................901 1,156

Total.........................................................................................................................................................................1057 1,290


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FinancialandOperationalReview-ProFormaforquarterendedMarch31,2016comparedtoquarterendedMarch31,2015

GroupTotal Group revenue of €4,260m decreased by 2.7% YoY on a consolidatedbasis in Q1 2016 as growth in US and Dominican Republic was offset bydeclinesinFranceandPortugal.Onaconstantcurrencybasis,revenuedeclinedby3.3%.GroupadjustedEBITDA increasedby0.9%YoY to€1,615mdue to the stronggrowthinPortugal(+20.9%onastandalonebasis),US(+21.0%)andDominicanRepublic(+7.6%)offsettingweaknessinFrance(-9.0%).Onaconstantcurrencybasis Group adjusted EBITDA was up 0.3%. Group adjusted EBITDA marginexpanded1.3%ptsYoYto37.9%.InQ12016themarginimprovementYoYwas9.8%ptsinPortugaland4.2%ptsinUS.Francemargincontractedby1.1%ptsdue to heavy promotional activity. Altice International’s adjusted EBITDAgrowthwas11.9%YoYinQ12016atconstantcurrencydrivenbystronggrowthintheDominicanRepublicandefficiencysavingsachievedsofarinPortugal.Group Operating Free Cash Flow increased 1.1% to €899m, or 0.6% on aconstantcurrencybasis,withsignificantgrowthinUSoffsettingthedeclineinFrance.FranceTotalrevenueinFranceof€2,573mdecreasedby6.1%YoYonastandalonebasisinQ12016duemostlytodeclinesintheB2Cdivision.AdjustedEBITDAwasalsoimpactedbyheavypromotionalactivity,declining9.0%YoYto€851mwithmarginscontractingby1.1%ptsYoYto33.1%.Therevenuetrendisexpectedtoimprovein2016basedonrecentoperationalperformancetrends:


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o StabilisedpostpaidmobilecustomerbaseinQ32015sotheyearoveryearcomparisonsbecomemorefavourablein2H2016.SignificantimprovementinmobilesubscriberattritioninQ1YoYdespitecontinuedaggressivemarketcompetition(B2Cpostpaidnetlossesof28k,high-endbasecontinuestogrow+13kinQ1)

o GrowingfibercustomeradditionsandDSLmigrations(+66kuniquefibercustomeradditionsinQ1).TotalfiberandDSLcustomerbaseimpacted(-61k)byDSLboxshortagewhichhasnowbeenresolved.

o Acceleratedre-investingofsavingstoreignitegrowth§ Highestnumberof4Gsitesrolledoutinthemarketagainin

Q1(985);ontrackwithplantoreachnetworkparitywithmarketleaderby2017

§ Extendedleadingfibercoverageby420khomespassedinQ1toatotalof8.1m,anaccelerationintherolloutcomparedtopreviousquarters(expandingbyc.2mp.a.from2016onwards)

§ AcquisitionofNextRadioTVstakeandexclusivenegotiationfortheacquisitionofAlticeMediaGroupFrancetocomplementexclusivesportsrightsincludingEnglishPremierLeaguetoadddifferentiatedcontenttoourcommunicationsservices

§ LaunchingfivenewSFRSportchannelsandtwonewnewschannels(BFMParisandBFMSport)


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Portugal(MEOonly)

Integrationontrack,includingacquisitionopexsavingtarget15,withasignificantimprovementintherevenuetrend:

o AdjustedEBITDAgrewby20.9%YoYinQ1withmarginsat48.4%up9.8%pts

o Toplineinflectionwithrevenuedown3.5%YoY(vs.-8.7%inQ42015)withB2Creturningtogrowth(+0.8%)andB2Bdown8.7%;expectrevenuetrendtoimprovein2016

§ BetterB2Ctrendin2016withresilientcustomerbase§ StrongerB2Bsegment(peakdeclineinQ22015)withno

furtherkeycorporateaccountlossesaftertakingownership(H22015)andmarketsharegainsintheSoHo/SMEmarket

o Convergencestrategywith54%ofourfibercustomers4P/5Pcustomers.91%ofourfibercustomersare3Pormorecustomers

o Acceleratingfiberrollouttoreach5.3mhomespassedby2020andcontentinvestments(e.g.FCPortorights)

15Targetfor€200mofopexsavings,€100mofwhichwasexpectedinthefirst12-18monthsfromacquisition.


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US(Suddenlink)

Returntohistoricalrevenuegrowthachieved(Q12016revenueup6.7%YoYonaCCbasis),acceleratingagainfromtheendof2015(+4.5%YoYinQ4and3.6%inQ32015)astheimpactfromdroppingViacomcontentattheendof2014hasnowfallenaway:

o 2.6%growthYoYinresidentialcustomerrelationshipswithARPUgrowthof4.0%

o Stronggrowthinresidentialhigh-speedinternet(revenue+17.0%YoYonaCCbasis)duetocontinuedgrowthinthebroadbandcustomerbase(+30kinQ1)andsuccessinsellinghigherspeedtiersofservicetonewandexistingcustomers

o ContinuingOperationGigaSpeed–upgradingthenetworktomake1Gbpsservicesavailableto90%ofthefootprintby2017

o StrongEBITDAgrowthof18.5%onaCCbasiswithbest-in-classmarginsof42.5%(up4.2%ptsYoY)

o Reiteratedefficiencytargets($215mofopexsavingsand$65mofcapexsavings)

IsraelFixedlinecustomerbasereturnedtogrowthinMarchwiththelowestcablecustomerlossesinQ1(-2k)sinceAlticeIPO:

o FixedchurnimprovementsseeninQ42015sustainedfrombettercustomerserviceandretentiontools

o Continuedpostpaidmobilegrowth(+40k,+32kB2CUMTS)o AdjustedEBITDAgrew0.4%YoYonareportedbasisbutwasdown

2.8%onCCbasisduetoimpactofcontinuedintensecompetitioninthemobilesegment


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DominicanRepublic

ContinuedstrongcommercialmomentumandfinancialperformancewithRevenuegrowthof4.8%YoY(4.7%onCCbasis)andAdjustedEBITDAgrowingby7.6%YoY(7.5%onCCbasis):

o Continuedmobilepostpaidnetadditionssinceacquisition(+15k)o Further3Gand4Gnetworkcoverageexpansion(89%3G

populationcoverageachievedinQ12016and45%4Gcoverage)o Further41khomespassedupgradedforfiberinQ1,surpassingIPO

targetof550k;extendingfootprintfurtherduring2016o OngoingDSLtofibermigrationathigherARPUsandmargins

Sharesoutstanding

AsatMarch31,2016,AlticeN.V.had841,272,450Ashares(including25,426,488treasuryshares)and272,279,140Bsharesoutstanding.


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ConsolidatedNetDebtasofMarch31,2015andproforma(PF)16forrecentrefinancing,breakdownbycreditsilo

16PFcashpositionsinFranceandAIdonotgiveeffecttoadditionalaccruedinterestpaidatclosingof€66mand€29mrespectively


19


20

AlticeN.V.ProformaNetLeverageReconciliationasofMarch31,2015


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NOTANOFFERTOSELLORSOLICITATIONOFANOFFERTOPURCHASESECURITIES

Thispressreleasedoesnotconstituteorformpartof,andshouldnotbeconstruedas,anofferorinvitationtosellsecuritiesofAlticeN.V.oranyofitsaffiliates(collectivelythe“AlticeGroup”)orthesolicitationofanoffertosubscribefororpurchasesecuritiesoftheAlticeGroup,andnothingcontainedhereinshallformthebasisofor be relied on in connectionwith any contract or commitmentwhatsoever. Any decision to purchase anysecurities of the Altice Group should bemade solely on the basis of the final terms and conditions of thesecuritiesandtheinformationtobecontainedintheofferingmemorandumproducedinconnectionwiththeofferingof such securities. Prospective investors are required tomake theirown independent investigationsand appraisals of the business and financial condition of the Altice Group and the nature of the securitiesbefore taking any investment decision with respect to securities of the Altice Group. Any such offeringmemorandummaycontaininformationdifferentfromtheinformationcontainedherein

FORWARD-LOOKINGSTATEMENTS

Certain statements in this press release constitute forward-looking statements within the meaning of thePrivateSecuritiesLitigationReformActof1995.Theseforward-lookingstatementsinclude,butarenotlimitedto,all statementsother than statementsofhistorical facts contained in thispresentation, including,withoutlimitation,thoseregardingourintentions,beliefsorcurrentexpectationsconcerning,amongotherthings:ourfuturefinancialconditionsandperformance,resultsofoperationsandliquidity;ourstrategy,plans,objectives,prospects,growth,goalsandtargets;andfuturedevelopments inthemarkets inwhichweparticipateorareseeking to participate. These forward-looking statements can be identified by the use of forward-lookingterminology,includingtheterms“believe”,“could”,“estimate”,“expect”,“forecast”,“intend”,“may”,“plan”,“project”or“will”or, ineachcase, theirnegative,orothervariationsorcomparable terminology.Where, inany forward-looking statement, we express an expectation or belief as to future results or events, suchexpectationorbelief isexpressedingoodfaithandbelievedtohaveareasonablebasis,buttherecanbenoassurance that the expectation or belief will result or be achieved or accomplished. To the extent thatstatements in this press release are not recitations of historical fact, such statements constitute forward-lookingstatements,which,bydefinition,involverisksanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthoseexpressedorimpliedbysuchstatements.

FINANCIALMEASURES

Thispress release containsmeasuresand ratios (the “Non-IFRSMeasures”), includingEBITDAandOperatingFreeCashFlowthatarenotrequiredby,orpresentedinaccordancewith,IFRSoranyothergenerallyacceptedaccounting standards.We present Non-IFRSmeasures becausewe believe that they are of interest for theinvestorsand similarmeasuresarewidelyusedby certain investors, securitiesanalystsandother interestedparties as supplemental measures of performance and liquidity. The Non-IFRS measures may not becomparabletosimilarlytitledmeasuresofothercompanies,havelimitationsasanalyticaltoolsandshouldnotbeconsideredinisolationorasasubstituteforanalysisofour,oranyofoursubsidiaries’,operatingresultsasreportedunderIFRSorothergenerallyacceptedaccountingstandards.Non-IFRSmeasuressuchasEBITDAandOperatingFreeCashFlowarenotmeasurementsofour,oranyofoursubsidiaries’,performanceor liquidityunder IFRS or any other generally accepted accounting principles. In particular, you should not considerEBITDAasanalternativeto(a)operatingprofitorprofitfortheperiod(asdeterminedinaccordancewithIFRS)asameasureofour,oranyofouroperatingentities’,operatingperformance,(b)cashflowsfromoperating,investingandfinancingactivitiesasameasureofour,oranyofoursubsidiaries’,abilitytomeetitscashneedsor (c) anyothermeasuresof performanceunder IFRSor other generally accepted accounting standards. Inaddition, these measures may also be defined and calculated differently than the corresponding or similartermsunderthetermsgoverningourexistingdebt.

EBITDA,OperatingFreeCashFlowandsimilarmeasuresareusedbydifferentcompaniesfordifferingpurposesand are often calculated in ways that reflect the circumstances of those companies. You should exercise


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caution incomparingEBITDAandOperatingFreeCashFlowasreportedbyustoEBITDAandOperatingFreeCash Flow of other companies. EBITDA as presented herein differs from the definition of “ConsolidatedCombinedEBITDA”forpurposesofanyoftheindebtednessofanAlticeIssuer.TheinformationpresentedasEBITDAisunaudited.Inaddition,thepresentationofthesemeasuresisnotintendedtoanddoesnotcomplywith thereporting requirementsof theU.S.SecuritiesandExchangeCommission (the“SEC”)andwillnotbesubject to review by the SEC; compliance with its requirements would require us to make changes to thepresentationofthisinformation.

Documents

ALTICE – FIRST QUARTER 2016 PRO FORMA1altice.net/sites/default/files/pdf/20160511-Altice-Q1-16... · 2017-05-22 · EARNINGS RELEASE May 11, 2016 2 o Portugal: revenue inflection