First Half 2018 Results

  • Improved net subscriber trend in Q2 2018 driven by our latest marketing campaigns and fixed-term promotions, resulting in lower annualized churn, and net uptake of 17,500 "WIGO" subscribers.
  • MVNO-related synergies and tight cost control drove a 7% increase in rebased Adjusted EBITDA to €645.5 million. Net profit of €108.9 million (+42% yoy) on non-cash derivatives gain vs loss last year.
  • The board of directors proposes an extraordinary dividend of €600 million (€5.2 per share) following its assessment of any meaningful short-term M&A opportunities and confirmed deleveraging.

The enclosed information constitutes regulated information as defined in the Royal Decree of 14 November 2007 regarding the duties of issuers of financial instruments which have been admitted for trading on a regulated market.

Brussels, August 1, 2018 – Telenet Group Holding NV (“Telenet” or the “Company”) (Euronext Brussels: TNET) announces its unaudited consolidated results under International Financial Reporting Standards as adopted by the European Union (“EU IFRS”) for the six months ended June 30, 2018.

HIGHLIGHTS

  • The Q2 2018 net subscriber trend for our video, broadband internet and fixed-line telephony services improved compared to the preceding quarter driven by our latest marketing campaigns and fixed-term promotions, resulting in improved annualized churn.
  • Continued robust net postpaid subscriber growth in Q2 2018 (+34,600) thanks to the continued success of our converged "WIGO" offers.
  • H1 2018 revenue of €1,250.9 million (Q2 2018: €632.5 million), +1% yoy and reflecting certain inorganic movements. On a rebased basis, our top line slightly contracted amidst (i) continued competitive and regulatory headwinds, (ii) lower usage-related revenue following the success of our flat-fee bundles and (iii) the absence of a price adjustment in H1 this year, which was largely offset by higher wholesale and small business revenue.
  • Net profit of €108.9 million for H1 2018 versus €76.6 million in H1 last year. Net profit for H1 2018 was driven by the increase in Adjusted EBITDA, as discussed below, and a €55.9 million non-cash gain on our derivatives, which were partially offset by a €66.7 million non-cash foreign exchange loss on our USD-denominated debt and a €24.6 million loss on the extinguishment of debt following certain refinancings.
  • Adjusted EBITDA(2) of €645.5 million for H1 2018, +9% yoy on a reported basis and +7% yoy on a rebased basis. Our rebased Adjusted EBITDA growth was primarily driven by substantially reduced MVNO-related costs as a result of the accelerated onboarding of our Full MVNO customers and tight cost control. Our Adjusted EBITDA margin improved by 370 basis points yoy on a rebased basis to 51.6%. Adjusted EBITDA of €337.7 million in Q2 2018, up 9% yoy on a rebased basis, resulting in our best quarterly margin in three year's time of 53.4%.
  • Accrued capital expenditures(3) of €301.7 million for H1 2018 (Q2 2018: €145.1 million), up 8% yoy, and representing approximately 24% of our revenue on the back of continued investments in both our fixed and mobile infrastructures and the start of our IT network modernization project.
  • Net cash from operating activities, net cash used in investing activities and net cash used in financing activities of €519.1 million, €265.8 million and €165.9 million, respectively, for H1 2018. Adjusted Free Cash Flow(4) of €257.3 million for H1 2018, marking a substantial improvement compared to H1 last year.
  • Full year 2018 outlook reconfirmed as we continue to target healthy financial growth with rebased Adjusted EBITDA(a) growth of 7-8% leading to a rebased Adjusted EBITDA(a) CAGR of 6-7% over the 2015-2018 period. Against stable rebased revenue growth, we expect our accrued capital expenditures to represent around 26% of our revenue in 2018, leading to robust Adjusted Free Cash Flow(b) of €400.0-420.0 million for 2018.