Full Year 2018 Results

• FY 2018 outlook achieved: rebased Adjusted EBITDA +8% yoy to €1,324.1 million (Q4 2018: +11% yoy) due to accelerated MVNO-related synergies and tight cost control. Net profit of €252.2 million.
• Delivering on our ambitious 2015-2018 plan, having achieved an Adjusted EBITDA CAGR of just over 6% on a rebased basis, representing the mid-point of our medium-term outlook.
• Committed to deliver a 6.5-8.0% rebased Operating Free Cash Flow CAGR(a) over the 2018- 2021 period, with top line and Adjusted EBITDA declines in 2019 from certain challenges and headwinds.

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, February 14, 2019 – 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 year ended December 31, 2018.

HIGHLIGHTS

• Improved commercial momentum for our quad-play "WIGO" bundles following our new line-up with 21,900 net subscriber additions in Q4 2018 to reach 399,700 "WIGO" subscribers at December 31, 2018.
• Modest growth in our mobile postpaid subscriber base in Q4 2018 (+8,500 net postpaid subscribers) reflected a removal of 11,000 inactive mobile subscribers and a continued challenging competitive environment.
• As anticipated, our commercial performance in Q4 2018 continued to be impacted by higher churn in the acquired SFR footprint following our accelerated customer migration strategy, skewing the underlying improving trend.
• FY 2018 revenue of €2,534.8 million (Q4 2018: €642.3 million), +1% yoy and reflecting certain inorganic movements. On a rebased(1) basis, our top line slightly contracted amidst (i) €16.8 million lower handset sales, (ii) continued competitive and regulatory headwinds and (iii) lower usage-related revenue following the success of our flat-fee bundles. These headwinds were largely offset by (i) a substantially larger contribution from our regulated and commercial wholesale businesses, (ii) the favorable impact of the July 2018 price adjustments and (iii) continued growth in the small business segment.
• Net profit of €252.2 million for FY 2018, driven by the net effect of (i) the increase in Adjusted EBITDA(2), (ii) a €115.2 million non-cash foreign exchange loss on our USD-denominated debt, (iii) a €111.8 million non-cash gain on our derivatives, (iv) a €36.8 million impairment on our Luxembourg cable operations, (v) a €24.6 million loss on the extinguishment of debt, (vi) a €22.7 million reversal of impairment of investments in equity accounted investees and (vii) a €10.5 million gain on the disposal of assets related to a joint venture.
• Adjusted EBITDA of €1,324.1 million for FY 2018, +9% yoy on a reported basis and +8% 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 440 basis points yoy on a rebased basis to 52.2%. Adjusted EBITDA of €333.1 million in Q4 2018, up 11% yoy on a rebased basis, resulting in a 570 basis points rebased margin improvement yoy to 51.9%.
• Accrued capital expenditures(3) of €687.7 million for FY 2018 (Q4 2018: €203.0 million), -6% yoy as 2017 reflected the recognition of the Belgian football broadcasting rights. Our accrued capital expenditures in 2018 were impacted by the extension of the 2G mobile spectrum license. Excluding these impacts, our underlying accrued capital expenditures increased 4% yoy and were slightly below 26% of revenue for FY 2018.
• Net cash from operating activities, net cash used in investing activities and net cash used in financing activities of €1,075.6 million, €466.4 million and €560.1 million, respectively, for FY 2018. Adjusted Free Cash Flow(5) of €421.9 million for FY 2018 versus our FY 2018 outlook of €400.0 to €420.0 million.
• Having delivered robust financial growth in 2018 on the back of accelerated MVNO-related synergies and tight cost control, we are facing certain challenges and headwinds in 2019 including (i) the full achievement of BASE-related synergies by end-2018, (ii) the loss of the MEDIALAAN MVNO contract, (iii) continued regulatory headwinds and (iv) higher commercial costs to reignite growth in 2020 and 2021. As a result of these headwinds, we anticipate revenue to decline around 2.5% yoy and Adjusted EBITDA(b) to decline by 1-2% yoy on a rebased basis. Excluding the lower contribution from our MVNO business, both our revenue and Adjusted EBITDA performance would have been broadly stable in 2019 on a rebased basis. We expect to achieve robust Operating Free Cash Flow(a) growth of 16-18% in 2019 driven by substantially lower accrued capital expenditures, leading to Adjusted Free Cash Flow(c) between €380.0-400.0 million.

(a) A reconciliation of our Operating Free Cash Flow guidance for 2019, and our Operating Free Cash Flow CAGR for 2018-2021, to a EU IFRS measure is not provided as not all elements of the reconciliation are projected as part of our forecasting  process, as certain items may vary significantly from one period to another.

(b) A reconciliation of our Adjusted EBITDA guidance for 2019 to a EU IFRS measure is not provided as not all elements of the reconciliation are projected as part of our forecasting  process, as certain items may vary significantly from one period to another.

(c) A reconciliation of our Adjusted Free Cash Flow guidance for 2019 to a EU IFRS measure is not provided as not all elements of the reconciliation are projected as part of our forecasting process, as certain items may vary significantly from one period to another.