First Quarter 2017 Results

Thursday, April 27, 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.

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 three months ended March 31, 2017.

  • Continued traction for our innovative all-in-one converged "WIGO" bundles, leading to 188,600
    subscribers at March 31, 2017 with 37,100 net subscribers added in Q1 2017.
  • Adjusted EBITDA of €289.4 million in Q1 2017, up 6% yoy on a rebased basis, and net profit of €65.8
    million versus a net loss of €8.6 million in Q1 2016.
  • Full year 2017 outlook reconfirmed with us being on track to achieve a 5-7% Adjusted EBITDA(a)
    CAGR over the 2015-2018 period.

 

HIGHLIGHTS


Continued traction for our "WIGO" bundles since their launch late June last year, resulting in 188,600 "WIGO" subscribers at March 31, 2017, boosting quad-play penetration (excluding BASE) to 24% of cable customers.

BASE integration well under way as we already upgraded approximately 25% of our macro sites and migrated just over 11% of our MVNO customers to our acquired network by the end of March 2017, keeping us on track to reach €220.0 million of synergies targeted by 2020.

In mobile, we recorded solid net postpaid subscriber growth in Q1 2017 (+43,000) to just over 2.1 million postpaid subscribers. Our net postpaid result was driven by continued traction for our "WIGO" bundles and promotional offers at BASE. On an organic basis, our total postpaid and prepaid SIM count increased 3,500 in Q1 2017.

Revenue(2) of €616.0 million in Q1 2017, +11% yoy on a reported basis and reflecting a full quarter contribution from BASE and the sale of Ortel Mobile NV ("Ortel") to Lycamobile as of March 1, 2017. On a rebased basis(1), our revenue in Q1 2017 was broadly stable yoy with higher cable subscription and B2B revenue being offset by continued pressures on our acquired mobile business and substantially lower revenue from handset sales.

Net income of €65.8 million in Q1 2017 versus a net loss of €8.6 million in Q1 last year. Net income for Q1 2017 was impacted by (i) the increase in Adjusted EBITDA, as discussed below, (ii) a €20.1 million non-cash foreign exchange gain on our USD-denominated debt and (iii) a €15.2 million non-cash gain on our derivatives.

Adjusted EBITDA(3) of €289.4 million in Q1 2017, +10% yoy and +6% yoy on a rebased basis. Our Adjusted EBITDA growth was primarily driven by (i) substantially lower costs associated with handset sales and subsidies, (ii) lower sales and marketing expenses due to phasing, (iii) lower integration and transformation costs versus the prior year period, and (iv) overall control of our overhead expenses.

Accrued capital expenditures(4) of €125.5 million in Q1 2017, equivalent to around 20% of our revenue. Compared to Q1 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, and the effects of the BASE acquisition.

Net cash from operating activities, net cash used by investing activities and net cash from financing activities of €117.3 million, €145.2 million and nil, respectively, for Q1 2017. Negative Adjusted Free Cash Flow(5) of €15.9 million in Q1 2017 impacted by €114.3 million of cash taxes paid in the quarter.

Full year 2017 outlook reconfirmed, targeting (i) stable revenue and mid-single-digit Adjusted EBITDA(a) growth on a rebased basis, (ii) an accrued capital expenditures (excluding football broadcasting rights) to revenue ratio of around 24% and (iii) healthy Adjusted Free Cash Flow(b) between €350.0-375.0 million.

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