First Half 2016 Results

Thursday, July 28, 2016 —

First milestones from the BASE(a) integration reached as we implemented our new organization and
launched our all-in-one converged offering "WIGO" in late June;
- Rebased(1) top line and Adjusted EBITDA growth of 4% and 2% in H1 2016 to €1,178.6 million and
€552.5 million, respectively, including BASE's mobile business acquired on February 11, 2016;
- Reconfirming our FY 2016 outlook, as well as our three-year outlook of 5-7% Adjusted EBITDA
growth(b) driven by synergies from the BASE acquisition and operational excellence.

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Telenet Group Holding NV ("Telenet" or the "Company") (Euronext Brussels: TNET) announces its unaudited condensed consolidated results under International Financial Reporting Standards as adopted by the European Union ("EU IFRS") for the six months ending June 30, 2016.

HIGHLIGHTS

  • Net subscriber growth for our advanced fixed services of broadband internet, enhanced video and fixed-line telephony improved 26% qoq in Q2 2016 to 31,000, driven by attractive marketing campaigns and promotions;
  • Successful launch of our first all-in-one converged product "WIGO" in late June 2016, resulting in close to 13,000 "WIGO" subscribers at Q2 2016 quarter-end, boosting quad-play penetration to 22% of cable customers;
  • In mobile, we had a productive quarter as we increased operational flexibility by extending the Full-MVNO Arrangement with Orange Belgium (formerly known as Mobistar) to facilitate the transition to BASE's network and delivered solid net mobile postpaid subscriber additions of 27,700 despite the competitive environment;
  • Revenue(2) of €1,178.6 million in H1 2016, +31% yoy on a reported basis. Year-to-date, we achieved 4% rebased revenue growth driven by (i) higher revenue from our advanced fixed services, including the benefit from the mid-February 2016 price adjustments, (ii) higher B2B revenue, and (iii) higher revenue related to our "Choose Your Device" programs launched mid-2015. Revenue of €626.1 million in Q2 2016, +38% yoy on a reported and +3% yoy on a rebased basis, respectively;
  • Adjusted EBITDA(3) of €552.5 million in H1 2016, +15% yoy and +2% yoy on a rebased basis. Adjusted EBITDA for both H1 2016 and H1 2015 included nonrecurring benefits of €6.0 million and €7.6 million, respectively, linked to the settlement of certain operational contingencies. Adjusted EBITDA growth in H1 2016 was adversely impacted by €5.2 million higher BASE integration costs and higher commercial costs at BASE. Q2 2016 Adjusted EBITDA of €290.4 million, +18% yoy and +1% yoy rebased , reflecting the same drivers as mentioned above;
  • Accrued capital expenditures(4) of €303.5 million in H1 2016, reflecting (i) the recognition of the Belgian and UK football broadcasting rights, (ii) higher network-related investments as part of our 1 GHz HFC upgrade project, and (iii) the effects of the BASE acquisition. Excluding the impacts related to football broadcasting rights, our accrued capital expenditures represented around 18% of revenue in H1 2016;
  • Free Cash Flow(5) of €128.4 million in Q2 2016 represented a significant improvement over the negative Free Cash Flow in Q1 2016, bringing the YTD total to €59.3 million;
  • Net loss of €19.6 million in H1 2016 impacted by an €86.2 million loss on derivatives and a €16.9 million loss on extinguishment of debt following the voluntary repayment of certain Senior Secured Notes due 2021;
  • On track to deliver on our full year 2016 outlook, while the execution of our 2020 Vision, including the synergies related to the BASE acquisition, will enable us to secure profitable growth, targeting a 5-7% Adjusted EBITDA CAGR over the 2015-2018 period.