First Nine Months 2017 Results

Thursday, October 26, 2017 — 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.

  • Accelerated net subscriber growth for our all-in-one converged "WIGO" bundles post the June 2017 revamp: 265,100 subscribers at September 30, 2017 with 40,700 net subscribers added in Q3 2017.
  • Adjusted EBITDA of €911.2 million in 9M 2017 (+5% yoy rebased), including a €10.1 million contribution from SFR Belux , and net profit of €106.3 million versus €41.6 million in 9M 2016.
  • Full year 2017 outlook reconfirmed with Adjusted Free Cash Flow(a) expected at the upper end of our outlook. On track to achieve a 5-7% Adjusted EBITDA(b) CAGR over the 2015-2018 period.               

Brussels – 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 nine months ended September 30, 2017.

HIGHLIGHTS

  • Broadly stable net subscriber trend for our advanced fixed services of enhanced video, broadband internet and fixed-line telephony on a sequential basis in Q3 2017 despite a continued intensely competitive environment and a tough promotional quarter.
  • New "WIGO" line-up with improved shared mobile data allowances well received as demonstrated by accelerated net subscriber growth in Q3 2017 (+40,700) to 265,100 "WIGO" subscribers at September 30, 2017.
  • Stabilizing performance in the prepaid segment post the mandatory prepaid registration in addition to a solid net inflow of 40,200 postpaid subscribers thanks to our "WIGO" bundles amidst a promotional environment.
  • Modernization of our mobile network well underway with around 72% of our 2,800 macro sites upgraded and 129 new sites constructed at September 30, 2017. Innovation hub opened in Brussels with focus on 5G and Internet of Things deployments.
  • Accelerated onboarding of our Full MVNO customers with around 54% on the Telenet network at the end of September 2017, now targeting full completion by the end of Q1 2018 versus end-2018 initially.
  • Revenue(2) of €1,884.3 million in 9M 2017 (+5% yoy) impacted by acquisitions and the sale of Ortel to Lycamobile as of March 1, 2017. On a rebased basis(1), our 9M 2017 revenue was up 1% yoy with an increased contribution from our wholesale business, higher cable subscription and B2B revenue being partially offset by lower mobile telephony and handset-related revenue. Q3 2017 revenue of €646.0 million, +4% yoy on a reported basis, including a full quarter contribution from SFR BeLux, and up 3% on a rebased basis driven by higher wholesale and B2B revenue.
  • Net income of €106.3 million in 9M 2017 versus €41.6 million in 9M 2016. Net income for 9M 2017 was impacted by (i) the increase in Adjusted EBITDA, as discussed below, (ii) a €209.9 million non-cash foreign exchange gain on our USD-denominated debt, (iii) a €192.4 million non-cash loss on our derivatives (iv) a €46.7 million loss on the extinguishment of debt following certain refinancings in Q2 2017 and (v) the aforementioned accelerated onboarding of our Full MVNO customer base resulting in a €29.2 million non-cash expense in Q3 2017.
  • Adjusted EBITDA(3) of €911.2 million in 9M 2017, +7% yoy on a reported basis and +5% yoy on a rebased basis. Our Adjusted EBITDA growth was primarily driven by (i) lower costs associated with handset sales and subsidies, (ii) lower MVNO-related costs driven by the accelerated onboarding of our Full MVNO customers, (iii) lower integration and transformation costs versus the prior year period and (iv) overall control of our overhead expenses. Adjusted EBITDA of €318.8 million in Q3 2017, +5% yoy on a rebased basis.
  • Accrued capital expenditures(4) of €534.1 million in 9M 2017 reflected the recognition of the Belgian football broadcasting rights for three seasons as of the 2017-2018 season. Excluding this impact, accrued capital expenditures represented approximately 23% of our revenue. Compared to last year, our accrued capital expenditures reflected higher network investments as part of our 1 GHz HFC upgrade project and the start of our mobile network upgrade program.
  • Net cash from operating activities, net cash used in investing activities and net cash from financing activities of €669.8 million, €737.5 million and €5.5 million, respectively, for 9M 2017. Adjusted Free Cash Flow(5) of €345.4 million in 9M 2017, up 107% yoy (Q3 2017: €208.3 million, +94% yoy).
  • Full year outlook reconfirmed with Adjusted Free Cash Flow(a) expected to come in at the upper end of our €350.0 - 375.0 million range. On track to deliver on our medium-term outlook of a 5-7% Adjusted EBITDA(b) CAGR over the 2015-2018 period.