Altice Europe N.V. Second Quarter 2019 Pro Forma1 Results

All silos Growing YoY, including France Residential
Revenues +3.8%, EBITDA +10% and OpFCF +18%²
FY 2019 Guidance Increased

AMSTERDAM--(BUSINESS WIRE)--Regulatory News:

Altice Europe N.V. (AEX:ATC) (AEX:ATCB), today announces financial and operating results for the quarter ended June 30, 2019.

Patrick Drahi, Altice Europe founder: “The turnaround of Altice Europe is more and more evident with another key milestone in Q2 2019: residential revenue as well as total revenue in France is back to growth. Consistent with Q1 2019 results, we demonstrate in Q2 2019 our capacity to benefit from decreasing churn and call centers volumes to generate significant savings. Altice France and Altice International are accelerating their revenue growth, with stronger EBITDA growth, paving the way for an acceleration of the deleveraging, already noticeable. This successful operational turnaround allows us to increase our full year guidance.”

Altice Europe Q2 2019 Key Financial Highlights

• Revenue grew by +3.8% YoY (+3.3% YoY on a constant currency (CC) basis) vs. -0.1% YoY in Q1 2019.
• Adjusted EBITDA grew by +9.8% YoY (+9.3% YoY on a CC basis) vs. +4.1% YoY in Q1 2019. Adjusted EBITDA margin was 39.9% in Q2 2019 (+2.2pts YoY).
• Significant investments were made in networks, customer premise equipment and innovative new services, with total accrued capital expenditure for Altice Europe of €756 million in Q2 2019, relatively stable YoY.
• Consequently, Operating Cash Flow grew +18.4 YoY² in Q2 2019.

Altice Europe Q2 2019 Key Operational Highlights

• Altice France achieved another good level of customer acquisition in the second quarter in a market with fewer promotions, while continuing to focus on and significantly reduce churn in both fixed and mobile. As expected and consistent with FY 2019 guidance, Altice France benefitted in Q2 2019 from an improved revenue trend, both in residential and business services, as well as lower costs, underpinned by better quality of services and lower churn (-20% YoY in Q2 2019).
  • Residential fixed base grew by +31k customers, with +64k fibre customers. SFR has now 43% of its total fixed subscriber base on fibre.
  • Residential mobile postpaid base grew by +105k customers, supported by the best 4G+ network in 2018 (according to nPerf survey).
  • Altice France reported positive revenue growth of +4.0% YoY without any reduced VAT benefit (vs. -1.2% YoY in Q1 2019). Altice France reported a significantly improved Adjusted EBITDA trend in Q2 2019 of +10.1% YoY (vs. +4.6% YoY in Q1 2019).
• In Portugal, the Group again achieved a solid level of customer acquisition in the second quarter, driving revenue growth, with careful cost control resulting in an improved Adjusted EBITDA trend.
  • The residential fixed base grew by +1k customers, while fixed and mobile churn has stabilized at the lowest level ever, alongside ARPU stabilization (churn below 8% in fibre and below 9% in mobile postpaid in Q2 2019). Fibre customer net additions were +35k, supported by the expansion of fibre coverage. Mobile postpaid net additions were +31k.
  • Thanks to its continued network investments and successful convergent strategy, MEO reported an improved revenue trend in Q2 2019 with +1.1% YoY (vs. +0.4% in Q1 2019), driven by positive mix effect (migration from prepaid to postpaid and to convergent offers). A tight control of the cost base paved the way to an improved Adjusted EBITDA trend of +0.4% YoY in Q2 2019 (vs. -1.4% YoY in Q1 2019).
• Altice International revenue grew by +3.6% YoY (vs. +2.0% in Q1 2019), notably driven by Teads which grew by +40% in Q2 2019.

Capital Structure Key Highlights

• Total consolidated Altice Europe net debt was €30.1 billion at the end of Q2 2019.
• Altice Europe received strong support from the debt capital markets during the Altice Luxembourg refinancing transaction in May 2019. Altice Luxembourg 2022 Notes and Altice France 2024 Notes partial repayment was effective early June. This refinancing demonstrated Altice Europe’s commitment to proactively manage its liabilities across its capital structure, significantly improve its maturity schedule, reduce its gross leverage and move closer to its leverage target while reducing its annual cash interest cost.

FY 2019 Guidance Increased

• For the full year 2019, Altice Europe expects:
  • Operating free cash flow growth in the area of 15% YoY, excluding the Altice TV segment (in the area of 10% YoY previously).
  • Altice France revenue growth within a range of 5% to 6% (3 to 5% previously).
  • Altice France Adjusted EBITDA within a range of €4.1 billion to €4.2 billion (€4.0 to 4.1 billion previously).
• Altice Europe targets a leverage of 4.25x net debt to Adjusted EBITDA within 20 months for the telecom perimeter (Altice Luxembourg), as announced on March 28, 2019.

Other Significant Events

• On May 18, 2018, the General Meeting of Altice Europe granted the authority to the Board to cancel any shares in the share capital of the company held or to be held by the company. On April 26, 2019, the Board of Altice Europe resolved to cancel 685,000,000 common shares A held by the Company. The cancellation of such shares became effective on June 28, 2019.

• On July 18, 2019, Altice France unveiled its new set-top box SFR Box 8, designed and produced by Altice Labs. France will be the first country in which Altice markets the box, to be launched on August 20, 2019. Altice France launches the only box on the French market to be equipped with the latest generation WiFi (WiFi 6) along with cinema-like sound and image standard (boasting 4K HDR with Dolby Vision® and Dolby Atmos®). The box incorporates all the new features users expect such as the voice assistant and an innovative multi-screen interface bringing an unprecedented experience into the home. The box will be available for the whole range of fixed offers, as an option, in DSL, FTTB and FTTH. Coupled with the power of the Altice France network, the first high-speed broadband infrastructure in the country with more than 13 million eligible connections, the SFR Box 8 will offer an unrivalled Internet experience.

• On July 30, 2019, Altice Europe closed the sale of 51% of Groupe L’Express to Alain Weill.

Conference call details

The company will host a conference call and webcast today, Wednesday 31^st of July 2019 at 6:00pm CEST (5:00pm BST, 12:00pm EDT)

Dial-in Access telephone numbers:

Participant Toll Free Dial-In Number: [phone]

Participant International Dial-In Number: [phone]

Conference ID: 1529996

A live webcast of the presentation will be available on the following website:

https://event.on24.com/wcc/r/2017272/E1FB5672B40C37C330134D5DB37E6BCB

The presentation for the conference call will be made available prior to the call on our investor relations website:

http://altice.net/investor-relations

About Altice Europe

Altice Europe (ATC & ATCB), listed on Euronext Amsterdam, is a convergent leader in telecoms, content, media, entertainment and advertising. Altice delivers innovative, customer-centric products and solutions that connect and unlock the limitless potential of its over 30 million customers over fibre networks and mobile broadband. Altice is also a provider of enterprise digital solutions to millions of business customers. Altice innovates with technology, research and development and enables people to live out their passions by providing original content, high-quality and compelling TV shows, and international, national and local news channels. Altice delivers live broadcast premium sports events and enables its customers to enjoy the most well-known media and entertainment.

Financial Presentation

Altice Europe N.V. (Altice Europe or the “Company”) was created as a result of a cross-border merger with Altice S.A. as per a board resolution dated August 9, 2015. Altice Europe’s shares started trading on Euronext Amsterdam from August 10, 2015 onwards. Altice Europe is considered to be the successor entity of Altice S.A. and thus inherits the continuity of Altice S.A.’s consolidated business. Altice Europe and its subsidiaries have operated for several years and have from time to time made significant equity investments in a number of cable and telecommunication businesses in various jurisdictions. Therefore, in order to facilitate an understanding of the Company’s results of operations, we have presented and discussed the pro-forma consolidated financial information of the Company – giving effect to each such significant acquisition and disposal as if such acquisitions and disposals had occurred by January 1, 2018; as if the spin-off of Altice USA had occurred on January 1, 2018, for the quarters ended June 30, 2018 and June 30, 2019 (the “Pro Forma Financial Information”). In addition, financials for Altice Europe exclude the international wholesale voice business (following closing announced on September 13, 2018) and press magazines disposed (following closing of Point de Vue on July 2, 2018 and Groupe L’Express on July 30, 2019) for the quarters ended June 30, 2018 and June 30, 2019. Financials shown are pro forma for the tower transaction in Portugal (following closing announced on September 4, 2018) and the tower transaction in the Dominican Republic (following closing announced on October 3, 2018) from January 1, 2018.

This press release contains measures and ratios (the “Non-GAAP measures”), including Adjusted EBITDA, Capital Expenditure (“Capex”) and Operating Free Cash Flow, that are not required by, or presented in accordance with, IFRS or any other generally accepted accounting standards. We present Non-GAAP measures because we believe that they are of interest to the investors and similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. The Non-GAAP measures may not be comparable to similarly titled measures of other companies or have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our, or any of our subsidiaries’, operating results as reported under IFRS or other generally accepted accounting standards. Non-GAAP measures such as Adjusted EBITDA are not measurements of our, or any of our subsidiaries’, performance or liquidity under IFRS or any other generally accepted accounting principles, including U.S. GAAP. In particular, you should not consider Adjusted EBITDA as an alternative to (a) operating profit or profit for the period (as determined in accordance with IFRS) as a measure of our, or any of our operating entities’, operating performance, (b) cash flows from operating, investing and financing activities as a measure of our, or any of our subsidiaries’, ability to meet its cash needs or (c) any other measures of performance under IFRS or other generally accepted accounting standards. In addition, these measures may also be defined and calculated differently than the corresponding or similar terms under the terms governing our existing debt.

Adjusted EBITDA is defined as operating income before depreciation and amortization, other expenses and income (capital gains, non-recurring litigation, restructuring costs) and share-based expenses and after operating lease expenses. This may not be comparable to similarly titled measures used by other entities. Further, this measure should not be considered as an alternative for operating income as the effects of depreciation, amortization and impairment excluded from this measure do ultimately affect the operating results, which is also presented within the annual consolidated financial statements in accordance with IAS 1 - Presentation of Financial Statements.
Capital expenditure (Capex), while measured in accordance with IFRS principles, is not a term that is defined in IFRS nor is it presented separately in the financial statements. However, Altice Europe’s management believe it is an important indicator for the Group as the profile varies greatly between activities:

• The fixed business has fixed Capex requirements that are mainly discretionary (network, platforms, general), and variable capex requirements related to the connection of new customers and the purchase of Customer Premise Equipment (TV decoder, modem, etc.).
• Mobile Capex is mainly driven by investment in new mobile sites, upgrade to new mobile technology and licenses to operate; once engaged and operational, there are limited further Capex requirements.
• Other Capex: Mainly related to costs incurred in acquiring content rights.

Operating free cash flow (OpFCF) is defined as Adjusted EBITDA less Capex. This may not be comparable to similarly titled measures used by other entities. Further, this measure should not be considered as an alternative for operating cash flow as presented in the consolidated statement of cash flows in accordance with IAS 1 - Presentation of Financial Statements. It is simply a calculation of the two above mentioned non-GAAP measures.
Adjusted EBITDA and similar measures are used by different companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. You should exercise caution in comparing Adjusted EBITDA as reported by us to Adjusted EBITDA of other companies. Adjusted EBITDA as presented herein differs from the definition of “Consolidated Combined Adjusted EBITDA” for purposes of any of the indebtedness of the Group. The financial information presented in this press release including but not limited to the quarterly financial information, pro forma financial information as well as Adjusted EBITDA and OpFCF is unaudited. In addition, the presentation of these measures is not intended to and does not comply with the reporting requirements of the U.S. Securities and Exchange Commission (the “SEC”) and will not be subject to review by the SEC; compliance with its requirements would require us to make changes to the presentation of this information.

Financial and Statistical Information and Comparisons

Financial and statistical information is for the quarter ended June 30, 2019, unless otherwise stated, and any year over year comparisons are for the quarter ended June 30, 2018.

Regulated Information

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Altice Europe Summary Financials Pro Forma Information

	Altice Europe - Quarter ended June 30, 2019
In EUR million	Altice France	Portugal	Israel	Dominican Republic	Teads		Others	Altice TV	Corporate & Other	Eliminations	Altice Europe Consolidated
Residential – Fixed	617.6	154.1	135.1	26.0		-	-	-	0.0	-	932.8
Residential – Mobile	1,050.8	137.5	66.2	88.1		-	-	-	-	-	1,342.5
Business services	817.2	230.1	33.7	26.5		-	0.2	-	-	-	1,107.7
Media	112.4	-	-	-		116.3	-	56.6	-	-	285.3
Standalone Revenue	2,598.1	521.6	235.0	140.5		116.3	0.2	56.6	0.0	-	3,668.3
Eliminations	-19.5	-17.6	-0.1	-0.3		-0.6	-	-38.3	-0.0	-	-76.4
Consolidated Revenue	2,578.5	504.1	234.9	140.3		115.6	0.2	18.3	-	-	3,591.9
Adjusted EBITDA	1,075.6	213.3	90.0	69.9	19.6		0.1	-23.2	-8.6	-2.9	1,433.9
Margin (%)	41.4%	40.9%	38.3%	49.7%		16.9%	nm	nm	nm	nm	39.9%
Accrued Capex	565.6	95.9	60.0	31.2	1.5		-	4.3	-	-2.8	755.7
Adjusted EBITDA - Accrued Capex	510.0	117.4	30.0	38.7	18.2		0.1	-27.5	-8.6	-0.1	678.2

	Altice Europe - Quarter ended June 30, 2018
In EUR million	Altice France	Portugal	Israel	Dominican Republic	Teads	Others	Altice TV	Corporate & Other	Eliminations	Altice Europe Consolidated
Residential – Fixed	635.0	153.6	149.0	25.3	-	-	-	-	-	962.9
Residential – Mobile	1,029.1	140.4	61.7	89.3	-	-	-	-	-	1,320.6
Business services	730.9	222.0	30.5	23.2	-	0.2	-	2.4	-	1,009.3
Media	102.4	-	-	-	83.2	-	19.7	-	-	205.4
Standalone Revenue	2,497.4	516.1	241.2	137.9	83.2	0.2	19.7	2.4	-	3,498.1
Eliminations	-10.0	-13.1	-0.2	-0.1	0.1	-	-15.6	0.6	-	-38.2
Consolidated Revenue	2,487.4	503.0	241.0	137.7	83.3	0.2	4.1	3.0	-	3,459.9
Adjusted EBITDA	976.6	212.4	105.0	74.7	10.4	-0.0	-62.3	-8.4	-2.8	1,305.5
Margin (%)	39.1%	41.2%	43.5%	54.2%	12.5%	nm	nm	nm	nm	37.7%
Accrued Capex	576.0	106.3	60.6	29.1	-	-	1.2	-	0.0	773.2
Adjusted EBITDA - Accrued Capex	400.6	106.1	44.4	45.7	10.4	-0.0	-63.5	-8.4	-2.9	532.4

Notes to Summary Financials

1. Financials shown in these tables are pro forma defined as results of Altice Europe new perimeter as if the spin-off of Altice USA had occurred on 1/1/18. Altice USA considered as third-party and not included in group eliminations from 1/1/18. Segments are shown on a pro forma standalone reporting basis and Group figures are shown on a pro forma consolidated basis. In addition, financials for Altice Europe exclude the international wholesale voice business (following closing announced on September 13, 2018) and press magazines disposed (following closing of Point de Vue on July 2, 2018 and Groupe L’Express on July 30, 2019) from 1/1/18. Financials shown are pro forma for the tower transaction in Portugal (following closing announced on September 4, 2018) and the tower transaction in the Dominican Republic (following closing announced on October 3, 2018) from 1/1/18
2. “Other” segment within Altice International includes datacentre operations in France (Auberimmo)
3. Adjusted EBITDA is defined as operating income before depreciation and amortization, other expenses and income (capital gains, non-recurring litigation, restructuring costs) and share-based expenses and after operating lease expenses
4. Teads gross revenues are presented before discounts (net revenues after discounts are recognised in the financial statements)

    

Altice Europe KPIs

	Altice Europe - Quarter ended June 30, 2019
000’s unless stated otherwise	Altice France	Portugal	Israel	Dominican Republic	Total
Fibre homes passed	13,506	4,712	2,146	759	21,123
FIXED B2C
Fibre / cable unique customers	2,701	879	999	191	4,770
Net adds	64	35	6	-1	104
Total fixed B2C unique customers	6,271	1,586	999	326	9,148
Net adds	31	1	6	1	32
MOBILE B2C
Postpaid subscribers	13,970	3,023	1,152	593	18,739
Net adds	105	31	5	14	156
Prepaid subscribers	1,473	3,304	173	2,348	7,298
Total mobile B2C subscribers	15,444	6,327	1,326	2,941	26,037

	Altice Europe - Quarter ended June 30, 2018
000’s unless stated otherwise	Altice France	Portugal	Israel	Dominican Republic	Total
Fibre homes passed	11,722	4,284	2,104	752	18,862
FIXED B2C
Fibre / cable unique customers	2,442	714	1,001	198	4,355
Net adds	56	46	0	-2	99
Total fixed B2C unique customers	6,109	1,565	1,001	324	9,000
Net adds	13	6	0	2	20
MOBILE B2C
Postpaid subscribers	13,164	2,890	1,144	539	17,736
Net adds	220	38	-15	8	251
Prepaid subscribers	1,618	3,492	156	2,637	7,904
Total mobile B2C subscribers	14,782	6,382	1,300	3,176	25,639

Notes to KPIs tables

1. Portugal fibre homes passed figures include homes where MEO has access through wholesale fibre operators (c.0.4 million in Q2 2019)
2. Fibre / cable unique customers represents the number of individual end users who have subscribed for one or more of our fibre / cable based services (including pay television, broadband or telephony), without regard to how many services to which the end user subscribed. It is calculated on a unique premise basis. Fibre / cable customers for France excludes white-label wholesale subscribers. For Israel, it refers to the total number of unique customer relationships, including both B2C and B2B
3. Mobile subscribers are equal to the net number of lines or SIM cards that have been activated on the Group’s mobile networks and excludes M2M. In Israel, the split between iDEN and UMTS (B2C only, including prepaid) services is as follows: 4k iDEN and 1,321k UMTS as of June 30, 2019, and 7k iDEN and 1,294k UMTS as of June 30, 2018
4. The tables above exclude Altice USA’s key operating measures. As a result, the totals are presented as if the separation of Altice USA had occurred on January 1, 2018

Altice Europe Financial and Operational Review by Segment - Pro Forma³

For the quarter ended June 30, 2019 compared to the quarter ended June 30, 2018

France (Altice France including SFR)

SFR continued to invest in its proprietary infrastructure to further improve customer satisfaction and enhance its position in the fast-growing fibre wholesale market. SFR remains the number one high-speed broadband infrastructure in France⁴, with more than 13.5 million homes passed⁵ at the end of Q2 2019: a significant increase in Q2 2019 of 538,000 fibre homes passed in France. More than 3,200 towns enjoy speeds of up to 1 Gbps.

The largest alternative FTTH infrastructure wholesale operator in France, SFR FTTH, has more than 5 million homes to be passed with scope for more homes to be franchised or acquired: an additional 500,000 homes have been awarded with exclusive FTTH deployments in H1 2019.

On the mobile side, SFR covered 98.7% of the population with 4G at the end of Q2 2019, with 40,613⁶ of 4G mobile antennas in service in France. SFR reached its target of 90% population coverage in very low-dense areas, three years in advance. SFR delivers higher 4G data rates, thereby improving customer experience (aggregation of 4 carriers allowing 4G+ at 300/500 Mbps and now 1 Gbps in Q2 2019). SFR is pleased to have the best 4G+ network coverage in 2018, according to the nPerf survey (more than 1 billion measures per annum). This increase in speed makes it possible to support the transition to 5G, something which the Group continues to work towards actively.

The operational turnaround and sustained customer growth have been underpinned by churn reduction and NPS improvements (Net Promoter Score), leading to an inflection in revenue growth and lower costs in Q2 2019 to continue in the quarter coming. The turnaround is supported by significant improvements in 2018 in infrastructure and in technical service operations. This turnaround is also driven by the highest level of employee commitment since 2008 according to our latest Human Resource study.

Altice France continues to offer innovate products, with a new option in mobile launched in Q2 2019 to benefit from secondary device (smartwatch) through eSIM. This allows mobile customers to enjoy 4G network, even far away from smartphone, typically during sport sessions.

The following subscriber KPIs are based on the current reporting perimeter for Altice France (including FOT):

• Total Altice France revenue increased by +4.0% YoY in Q2 2019 to €2,598 million without any reduced VAT benefit, reflecting the impact of positive net adds and less pronounced ARPU effect.
• Residential revenues reached a key milestone, by returning to growth in Q2 2019 with +0.3% YoY (vs. -4.4% YoY in Q1 2019 ex VAT benefit)), as a result of customer adds with a clear moderation of ARPU decline. Our strategy to get a fair share of net adds while following tactically some peer promotion was consistent with residential segment being back to growth.
• The residential fixed base in France grew again with +31k unique customer net additions in Q2 2019 (vs. +13k net additions in Q2 2018):

• Fibre net additions reached +64k in Q2 2019 (vs. +56k in Q2 2018).
• Residential fixed revenues decreased by -2.7% YoY in Q2 2019 (vs. -4.4% YoY in Q1 2019 ex-VAT benefit), impacted by prior customer adds with a moderation of ARPU decline. Altice France is expanding its addressable market for high-speed broadband services significantly in France which will help Altice France to retain and migrate a larger portion of its DSL base, as well as increase ARPU.

• Mobile residential postpaid customer growth in France was again very strong this quarter:

• The mobile residential postpaid customer base increased by +105k net additions in Q2 2019 (vs. +220k in Q2 2018); the SFR brand continued to show positive quarter of net additions, on top of the digital Red brand success highlighting the competitiveness of SFR from the no-frill and digital segment to the 5-Play convergent market.
• Residential mobile revenues increased by +2.1% YoY in Q2 2019 (vs. -4.4% YoY in Q1 2019 ex-VAT benefit), impacted by prior customer adds and still encouraging trends in ARPU in each segment: SFR brand and the digital brand Red.

• Business services (B2B, wholesale and other non-media revenues) revenues grew by +11.8% YoY in Q2 2019 (vs. +10.2% YoY in Q1 2019). B2B benefitted from the adoption of a new pricing and customer retention strategy, along with better cross-selling between the fixed and mobile segments from a better franchise, linked to a better-quality network. Wholesale revenues benefitted from an increased demand in WDM infrastructure (10G / 100G) and long-haul fibre, leveraging key SFR assets in fibre and optics. Wholesale continued to benefit from an increased contribution from the major MVNO operators in France (La Poste, EIT), both in mobile and fixed, evidence of the improved quality network at Altice France. In addition, Altice France benefited in Q2 2019 from increasing streams of revenues for the construction of the FTTH network following the successful closing of the sale of a minority equity stake of 49.99% in SFR FTTH on March 27, 2019.
• Media revenues grew by +9.7% YoY in Q2 2019 (vs. +14.7% in Q1 2019).

After a strong Q1 2019, Altice France reported a significantly improved Adjusted EBITDA in Q2 2019 of €1,076 million, +10.1% growth YoY without any VAT impact (vs. +4.6% YoY in Q1 2019). Adjusted EBITDA margins improved by +2.3pts YoY to 41.4% thanks to an improved revenue trend as well as lower costs, underpinned by lower overall churn (-20% YoY in Q2 2019), seeing benefits in the areas of marketing and sales, call centers and customer acquisition and retention effort.

Total Altice France capex amounted to €566 million in Q2 2019, a limited decrease of €10 million YoY reflecting sustained fixed and mobile network investments, with optimization through refurbished equipment to limit success capex (i.e. customer premises equipment). Most of FTTH deployment Capex are in SFR-FTTH (non-consolidated).

Portugal (MEO)

Q2 2019 was the seventh consecutive quarter of growth for the fixed residential customer base in Portugal. This solid customer growth is contributing to an improved trend in revenue growth. MEO has reached over 4.7 million fibre homes passed (+121k in Q2 2019), on track for its target for nationwide fibre coverage of 5.3 million homes. MEO’s competitive mobile infrastructure reached 99.4% 4G and 78.5% 4G+ population coverage at the end of Q2 2019. MEO pursues innovation with full HD experience (top TV channels in HD with experience of restart and catchup), a new in-house developed SVOD platform and the first 5G supported live TV broadcast of e-sports.

• Total Altice Portugal revenue grew +1.1% YoY in Q2 2019 to €522 million.
• Total residential revenues modestly declined by -0.8% YoY in Q2 2019, with residential fixed growth of +0.3% YoY offset by a decline in residential mobile of -2.1% YoY underpinned by the structural negative trend in the prepaid segment, with postpaid growing.
• MEO residential fixed subscriber base grew YoY in Q2 2019, supported by positive net additions in Q2 2019 of +1k (vs. +6k in Q2 2018):

• Fibre customer net additions in Q2 2019 were +35k (vs. +46k in Q2 2018); convergence of the base continued to grow, increasing the proportion of valuable customers with higher lifetime value. 55% of the total customers in the residential fixed segment are on fibre technology, still a major growth enabler. In Q2 2019, MEO benefited from a positive mix effect with more convergent offers (+2pts YoY) adding clients with higher lifetime value.

• Postpaid residential mobile subscriber net additions in Q2 2019 were +31k (vs. +38k net additions in Q2 2018), supported by MEO’s ongoing network investments. Prepaid residential mobile net losses were -71k in Q2 2019 (vs. -12k in Q2 2018). MEO benefited from positive mix effect with migration from prepaid to postpaid.
• Business services revenues grew +3.6% YoY in Q2 2019, driven by growth in both B2B and wholesale revenue streams. In the B2B segment, consistent with recent quarters, its service mix is diversifying rapidly with strong ICT service revenues growth YoY.

Total Altice Portugal Adjusted EBITDA increased by +0.4% YoY to €213 million with Adjusted EBITDA margins stable year over year, reflecting the loss of higher margin revenue in the B2B segment which was offset by robust cost control.

Total Altice Portugal capex amounted to €96 million in Q2 2019 (€106 million in Q2 2018).

Israel (HOT)

• Total revenue declined by -7.7% YoY in Q2 2019 on a CC basis, -2.6% on a reported basis to €235 million, reflecting ongoing price competition in both the fixed and mobile markets during Q2 2019:

• The cable customer base grew +6k in Q2 2019 (vs. +3k in Q1 2019, +0k in Q2 2018). Residential fixed revenues declined by -14.2% YoY in Q2 2019 (vs. -9.6% in Q1 2019) on a CC basis driven by sustained pricing pressure;
• The residential mobile postpaid customer base grew this quarter with net additions of +5k (vs. +7k in Q1 2019, -15k in Q2 2018). Residential mobile revenues grew +1.6% YoY in Q2 2019 (vs. +0.3% in Q1 2019) on a CC basis predominantly driven by higher equipment sales YoY, as pricing pressure remained a material drag.

• Total Adjusted EBITDA in Israel declined by -18.7% in Q2 2019 YoY on a CC basis, or -14.3% on a reported basis YoY to €90 million, driven by revenue declines as the operating cost base was broadly stable YoY. Adjusted EBITDA margin decreased by -5.2%pts YoY to 38.2% on a reported basis.
• Total capex was €60 million in Q2 2019, stable YoY. Hot was the first in Israel to launch 500 Mbps speed in Fixed all over the country.

Dominican Republic (Altice Dominicana)

• Total revenue in Dominican Republic decreased by -1.6% YoY in Q2 2019 on a CC basis, or +1.9% YoY on a reported basis to €141 million:

• The total fixed residential customer base grew in Q2 2019 with +1k net adds in Q2 2019 (vs. +7k in Q1 2019, +2k in Q2 2018); Revenues benefited from premium services (series and sport like US baseball league);
• Total residential mobile subscriber decreased by -123k net losses in Q2 2019 (vs. -36k in Q1 2019, -43k in Q2 2018). Residential mobile postpaid net additions were +14k in Q2 2019 (vs. +11k in Q1 2019, +8k in Q2 2018) with a drag in prepaid. 4G population coverage was 97.5% in Q2 2019, supporting consumer needs for data traffic.

• Total Adjusted EBITDA in Dominican Republic declined by -9.8% in Q2 2019 YoY on a CC basis, or -6.5% on a reported basis YoY to €70 million, driven by revenue declines and an increase in the operating cost base YoY as a result of higher network operations and maintenance operating costs. Adjusted EBITDA margin decreased by -4.5pts YoY to 49.7% on a reported basis.
• Total capex was €31 million in Q2 2019, increasing 7% YoY, with an effort in single RAN and radio capacity (mobile network).

Teads

• Total revenue⁷ grew +39.8% in Q2 2019 YoY to €116 million (+34.0% on a CC basis), marking the best growth since Altice Europe took ownership of Teads.
• Total Adjusted EBITDA grew +89.3% in Q2 2019 YoY to €19 million (+76.6% on a CC basis) with a margin expansion of 2.7pts compared to Q2 2018.
• Teads benefits from its unique approach to address high-quality digital advertising as an alternative global media platform. Teads benefits from robust growth in each of its territories, with a proven and profitable growth. In the second quarter, Teads signed global advertising partnerships with several of the top 100 global ad spenders. Growth in the second quarter was partially driven by further adoption of the company’s full-funnel advertising solutions.

Altice TV

• Altice TV revenue was €57 million in Q2 2019 (vs. €60 million in Q1 2019, €20 million in Q2 2018). The increase in revenue YoY was driven by higher OTT revenues, the contribution of the previously announced wholesale deal signed with Canal+ and an increased contribution from the annual minimum guarantee from SFR vs. FY 2018.
• As a result of the increased revenue YoY Adjusted EBITDA decline moderated YoY to -€23 million in Q2 2019 (vs. -€22 million in Q1 2019, -€62 million in Q2 2018).

Shares outstanding

As at June 30, 2019, Altice Europe had 1,194,011,147⁸ common shares outstanding and 1,391,748 preference shares B outstanding.

Altice Europe Consolidated Net Debt as of June 30, 2019, breakdown by credit silo⁹

• Altice Europe has a robust, diversified and long-term capital structure:

• Group weighted average debt maturity of 6.0 years;
• Group weighted average cost of debt of 5.7%;
• 86% fixed interest rate;
• No major maturities at Altice France until 2024, none at Altice International until 2023 and none at Altice Luxembourg until 2025;
• Available liquidity of €3.3 billion¹⁰.

• Total consolidated Altice Europe net debt was €30.1 billion at the end of Q2 2019.

Altice Luxembourg (HoldCo)	Amount in millions (local currency)	Actual		Coupon / Margin	Maturity
Senior Notes	EUR 445	445		7.250%	2022
Senior Notes	USD 636	560		7.750%	2022
Senior Notes	EUR 750	750		6.250%	2025
Senior Notes	USD 1,480	1,303		7.625%	2025
Senior Notes	EUR 1,400	1,400		8.000%	2027
Senior Notes	USD 1,600	1,409		10.500%	2027
Swap Adjustment	-	-63		-	-
Altice Luxembourg Gross Debt		5,803
Total Cash		-17
Altice Luxembourg Net Debt		5,786
Undrawn RCF		186
WACD (%)		7.3%
Altice France (SFR)	Amount in millions (local currency)	Actual	PF	Coupon / Margin	Maturity
Senior Secured Notes	USD 815	717	717	6.250%	2024
Senior Secured Notes	EUR 750	750	750	5.625%	2024
Senior Secured Notes	USD 5,190	4,569	4,569	7.375%	2026
Senior Secured Notes	USD 1,750	1,541	1,541	8.125%	2027
Senior Secured Notes	EUR 1,000	1,000	1,000	5.875%	2027
Term Loan	EUR 1,122	1,122	1,122	E+3.00%	2025
Term Loan	USD 1,392	1,225	1,225	L+2.75%	2025
Term Loan	USD 2,118	1,864	1,864	L+3.6875%	2026
Term Loan	EUR 985	985	985	E+3.00%	2026
Term Loan	USD 2,488	2,190	2,190	L+4.00%	2026
Drawn RCF - Opco	-	85	85	E+1.5%	2024
Commercial Paper	-	100	100	0.60%	2019
Other debt & leases	-	264	264	-	-
Swap Adjustment	-	-1,021	-1,021	-	-
Altice France Gross Debt		15,392	15,392
Total Cash		-372	-428
Altice France Net Debt		15,021	14,964
Undrawn RCF		1,129	1,129
WACD (%)			5.0%
Altice International	Amount in millions (local currency)	Actual		Coupon / Margin	Maturity
Senior Secured Notes	EUR 500	500		5.250%	2023
Senior Secured Notes	USD 2,060	1,814		6.625%	2023
Senior Secured Notes	USD 2,750	2,421		7.500%	2026
Term Loan	USD 892	785		L+2.75%	2025
Term Loan	USD 887	780		L+2.75%	2026
Term Loan	EUR 296	296		E+2.75%	2026
Drawn RCF	-	0		E+3.50%	2021
Other debt & leases	-	46		-	-
Swap Adjustment	-	6		-	-
Altice International Senior Debt		6,648
Senior Notes	EUR 250	250		9.000%	2023
Senior Notes	USD 400	352		8.125%	2024
Senior Notes	USD 385	339		7.625%	2025
Senior Unsecured Notes	EUR 675	675		4.750%	2028
Swap Adjustment	-	1		-	-
Altice International Total Debt		8,266
Total Cash		-475
Altice International Net Total Debt		7,790
Undrawn RCF		831
WACD (%)		5.7%
Total Altice Lux Consolidated Debt		29,461	29,461
Total Cash		-864	-921
Total Altice Lux Consolidated Net Debt		28,596	28,540
WACD (%)			5.6%
ACF	Amount in millions (local currency)	Actual		Coupon / Margin	Maturity
Corporate Facility	EUR 240	240		E+6.843%	2020
Corporate Facility	EUR 1,488	1,488		E+6.843%	2021
ACF Gross Debt		1,728
Total Cash		-103
ACF Net Debt		1,625
WACD (%)		6.8%

Altice Europe Pro Forma Net Leverage Reconciliation as of June 30, 2019

In EUR million
Altice Group Reconciliation to Swap Adjusted Debt	Actual	PF
Total Debenture and Loans from Financial Institutions	31,515	31,515
Value of Debenture and Loans from Financial Institutions in Foreign Currency converted at closing FX Rate	-31,320	-31,320
Value of Debenture and Loans from Financial Institutions in Foreign Currency converted at hedged Rate	30,244	30,244
Transaction Costs	330	330
Total Swap Adjusted Value of Debenture and Loans from Financial Institutions	30,769	30,769
Commercial Paper	100	100
Overdraft	133	133
Other debt and leases	178	178
RCF drawn at Hivory Opco	10	10
Gross Debt Consolidated	31,189	31,189

In EUR million
Altice Group (Actual)	Altice Luxembourg Consolidated	Altice TV	Altice Corporate Financing	Altice Europe	Altice Europe Consolidated
Gross Debt Consolidated	29,461	-	1,728	-	31,189
Cash	-864	-24	-103	-57	-1,049
Net Debt Consolidated	28,596	-24	1,625	-57	30,140
Altice Group (Pro Forma)	Altice Luxembourg Consolidated	Altice TV	Altice Corporate Financing	Altice Europe	Altice Europe Consolidated
Gross Debt Consolidated	29,461	-	1,728	-	31,189
Cash	-921	-24	-103	-57	-1,105
Net Debt Consolidated	28,540	-24	1,625	-57	30,084

In EUR million
Altice Europe (Pro Forma)	Altice France	Altice International	Altice Luxembourg	Eliminations	Altice Luxembourg Consolidated	Altice TV	Altice Corporate Financing	Altice Europe	Altice Europe Consolidated
Gross Debt Consolidated	15,392	8,266	5,803	-	29,461	-	1,728	-	31,189
Cash	-428	-475	-17	-	-921	-24	-103	-57	-1,105
Net Debt Consolidated	14,964	7,790	5,786	-	28,540	-24	1,625	-57	30,084
LTM Standalone	3,925	1,564	-	-	5,489	-154	-	-48	5,287
Eliminations	-	1	-	-2	-2	-		2	0
Corporate Costs	-	-7	-3	-	-10	-		10	-
PF International voice disposal & I24 Europe	-	-0	-	-	-0	-	-	-	-0
LTM EBITDA Consolidated	3,925	1,558	-3	-2	5,477	-154	-	-36	5,287
PF Press magazines	12	-	-	-	12	-	-	-	12
PF Tower sale and lease back	-	-9	-	-	-9	-	-	-	-9
LTM EBITDA	3,937	1,549	-3	-	5,480	-154	-	-36	5,290
Gross Leverage	3.9x	5.3x	-	-	5.4x	-	-	-	5.9x
Net Leverage	3.8x	5.0x	-	-	5.2x	-	-	-	5.7x

Altice Europe Non-GAAP Reconciliation to GAAP measures as of June 30, 2019 year to date¹¹

In EUR million	June 30, 2019
Revenues	7,104.3
Purchasing and subcontracting costs	-1,878.0
Other operating expenses	-1,320.5
Staff costs and employee benefits	-754.8
Total	3,150.9
Share-based expense	24.5
Rental expense operating lease	-447.7
Adjusted EBITDA	2,727.7
Depreciation, amortisation and impairment	-2,627.5
Share-based expense	-24.5
Other expenses and income	2,887.4
Rental expense operating lease	447.7
Operating profit	3,410.9
Capital expenditure (accrued)	1,526.5
Capital expenditure - working capital items	150.2
Payments to acquire tangible and intangible assets	1,676.7
Operating free cash flow (OpFCF)	1,201.2

FORWARD-LOOKING STATEMENTS

Certain statements in this press release constitute forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this press release, including, without limitation, those regarding our intentions, beliefs or current expectations concerning, among other things: our future financial conditions and performance, results of operations and liquidity; our strategy, plans, objectives, prospects, growth, goals and targets; and future developments in the markets in which we participate or are seeking to participate. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “plan”, “project” or “will” or, in each case, their negative, or other variations or comparable terminology. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will be achieved or accomplished. To the extent that statements in this press release are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements including risks referred to in our annual and quarterly reports

¹ All financials are shown under IFRS 15 accounting standard. Financials shown above are pro forma defined as results of Altice Europe new perimeter as if the spin-off of Altice USA had occurred on 1/1/18. Altice USA considered as third-party and not included in group eliminations from 1/1/18. Segments are shown on a pro forma standalone reporting basis and Group figures are shown on a pro forma consolidated basis. In addition, financials for Altice Europe exclude the international wholesale voice business (following closing announced on September 13, 2018) and press magazines disposed (following closing of Point de Vue on July 2, 2018 and Groupe L’Express on July 30, 2019) from 1/1/18. Financials shown are pro forma for the tower transaction in Portugal (following closing announced on September 4, 2018) and the tower transaction in the Dominican Republic (following closing announced on October 3, 2018) from 1/1/18
² Operating Free Cash Flow excluding Altice TV
³ Financials shown in this section are based on the new reporting perimeter for Altice Europe unless stated otherwise
⁴ Delivering broadband speeds over 100Mbps
⁵ FTTB and FTTH homes passed
⁶ Source: ANFR
⁷ Teads gross revenues are presented before discounts (net revenues after discounts are recognised in the financial statements)
⁸ As at June 30, 2019, Altice Europe had 1,173,211,475 common shares A (including 178,054,191 treasury shares) and 198,853,863 common shares B outstanding
⁹ Pro forma for €56m of cash released from the SFR FTTH escrow account in July 2019; Group net debt includes €57m of cash at Altice Europe N.V. and other subsidiaries outside debt silos. Excludes operating lease liabilities recognized under IFRS 16. Altice France Hivory opco RCF is drawn for €10m; Altice France SA RCF is drawn for €75m, Altice International and Altice Luxembourg RCF’s undraw
¹⁰ €2.2bn of undrawn revolvers and €1.1bn of cash. Cash includes €103m of restricted cash for debt financing obligations at Altice Corporate Financing
¹¹ The financial numbers disclosed in the reconciliation above are subject to review procedures of Altice Europe’s external auditors. The difference in consolidated revenue as reported for Altice Europe in the Non-GAAP Reconciliation to GAAP measures as of June 30, 2019 year to date and the Pro Forma Financial Information for Altice Europe as disclosed in this Earnings Release is mainly due to Teads gross revenues which are presented before discounts in this Earnings Release (net revenues after discounts are recognised in the financial statements). In addition, financials for Altice Europe exclude the international wholesale voice business (following closing announced on September 13, 2018) and press magazines disposed (following closing of Point de Vue on July 2, 2018 and Groupe L’Express on July 30, 2019) from 1/1/18. Financials shown are pro forma for the tower transaction in Portugal (following closing announced on September 4, 2018) and the tower transaction in the Dominican Republic (following closing announced on October 3, 2018) from 1/1/18