Altice N.V. (Altice Europe) First Quarter 2018 Pro Forma1 Results

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

• Altice N.V. post-split of Altice USA (to be renamed “Altice Europe”) is delivering on its plan to improve operational performance - Q1 2018 showed the best subscriber trends Altice has ever reported
  • France total fixed B2C customer base grew for the first time since Altice took control with +71k unique customer net additions in Q1 2018 (vs. -35k losses in Q1 2017), including the best fiber performance (+96k), supported by massive churn reduction and higher gross additions achieved through better operational processes;
  • France B2C mobile postpaid customer base increased by +239k net additions in Q1 2018 (vs. +68k in Q1 2017), representing the best quarterly performance since Altice acquired SFR, achieved through better service quality leading to significant churn improvement;
  • Significant improvement in overall customer satisfaction both in fiber and mobile demonstrating Altice fiber and content investments are key differentiators;
  • Portugal total fixed B2C customer base grew for the second quarter in a row with unique customer net additions in Q1 2018 of +4k (vs. -28k in Q1 2017), supported by further reduction in churn to the lowest level ever. Fiber customer net additions were the highest ever in Q1 2018 with +49k new customers (vs. +31k in Q1 2017), supported by the rapid expansion of fiber coverage; MEO gained market share for the second quarter in a row demonstrating that Altice’s fiber and mobile infrastructure strategy is paying-off;
  • Israel total fixed customer base grew for the first time since acquisition, adding +1k unique customer net additions in Q1 2018 (vs. -3k in Q1 2017) despite the intensification of competition in the market.
• Altice Europe revenue flat +0.0% YoY on a constant currency (CC) basis in Q1 2018.
• Altice Europe Adjusted EBITDA² declined -0.5% YoY on a CC basis in Q1 2018, a margin of 35.7% (-0.4% pts YoY vs. 36.1% in Q1 2017).
• Significant investment in networks, customer premise equipment and innovative new services with total capital expenditures for Altice Europe of €761m in Q1 2018 (an increase vs. €687m in Q1 2017):
  • Leading fiber³ operator in France reaching over 11 million homes passed as of Q1 2018 and 96% 4G mobile population coverage;
  • Leading fiber operator in Portugal reaching 4.2 million homes passed as of Q1 2018 and 97% 4G mobile population coverage (65% 4G+ mobile population coverage).
• New management team for Altice Europe⁴ once the split of Altice USA from Altice N.V. becomes effective:
  • Team led by Patrick Drahi, heavily involved to enhance focus and execution;
  • Alain Weill, currently Chairman and CEO of Altice France will become CEO of Altice Europe, given the increased prominence of the French business;
  • Dennis Okhuijsen will remain CFO of Altice Europe while Malo Corbin, previously Altice Group Financial Controller, will assume the role of Finance Director, Gerrit Jan Bakker will remain Altice Europe Treasurer and Coralie Durbec will be in charge of Altice Europe Investor Relations; Natacha Marty will become Altice Europe General Counsel;
  • Armando Pereira, currently SFR Telecom CEO, will serve as Altice Europe COO;
  • Operating company CEOs remain unchanged.
• Continuing to execute on non-core asset disposal program to strengthen the company’s long-term balance sheet position:
  • French and Portuguese towers – sale of c.10k French sites and c.3k Portuguese sites;
  • Dominican Republic – strong position in an attractive market;
  • Closing for towers and Dominican Republic transactions targeted in H2 2018.
• Announced separation of Altice USA Inc. (“Altice USA”) from Altice N.V. expected to be effective early June.

Patrick Drahi, founder of Altice N.V., said: “In the first quarter of 2018, Altice Europe has started to deliver on its operational turnaround plan, showing the best subscriber trends Altice has ever reported. Our strategy is paying off, focusing on making our customer experience better through improving processes, infrastructure investments, the best customer premise equipment such as Sofia, and renewed commercial offers with content as a key differentiator.

I am confident that these first initial significant improvements will be further enhanced in the coming quarters. We want to bring the best operational experience and drive the highest level of customer satisfaction which in turn will allow us to achieve our industrial and financial objectives. Altice Europe has tremendous opportunities. We have a unique asset base, fully converged, with premium infrastructure from networks to CPE and content assets, which is now allowing Altice Europe to firstly win back share across markets and consequently return to growth.

In parallel, we have made further progress on the execution of our non-core asset disposal program, which is well advanced and will strengthen our long-term balance sheet position.”

Altice N.V. (Euronext: ATC NA and ATCB NA), today announces financial and operating results for the quarter ended March 31, 2018.

FY 2018 Guidance (Updated for IFRS 15)

Altice N.V. has adopted the IFRS 15 accounting standard, required from January 2018, based on the full retrospective approach. As previously disclosed, Altice N.V. restated revenue and restated Adjusted EBITDA decreased by approximately €120m and €90m, respectively, for the year ended December 31, 2017 under IFRS 15 (restated revenue and restated Adjusted EBITDA in France for FY 2017 decreased by €95m and €78m, respectively). The impact of this accounting change is mainly linked to mobile handsets subsidies adjustments because of the effect of the change in amortization pattern and commission capitalization.

For the year ended December 31, 2018, under IFRS 15, Altice Europe is expected to generate Operating Free Cash Flow⁵ of between €2.3bn to €2.5bn, excluding the Altice TV segment. The adoption of IFRS 15 is expected to reduce FY 2018 Adjusted EBITDA by approximately €50 to €100m compared to the prior accounting standard, mainly in France, and thus prior guidance (OpFCF for Altice Europe of between €2.4bn to €2.6bn) has been updated for this amount, although this change is not expected to impact net cash flow after working capital movements. Altice France is expected to generate operating free cash flow of between €1.5bn to €1.6bn (updated from prior guidance of between €1.6bn to €1.7bn due to this IFRS 15 accounting change).

Altice Europe reiterates plans to expand Adjusted EBITDA and cash flow margins over the medium- to long-term.

Update on Altice Reorganization Including Altice USA Separation (‘Spin-Off’ or ‘Split’)

On January 8, 2018, Altice N.V. announced that its Board of Directors approved plans for the separation of Altice USA from Altice N.V. to be effected by a spin-off of Altice N.V.’s 67.2% interest in Altice USA through a distribution in kind to Altice N.V. shareholders. The separation will enable each business to focus more on the distinct opportunities for value creation in their respective markets and ensure greater transparency for investors. The proposed transaction is designed to create simplified, independent and more focused US and European operations to the benefit of their respective customers, employees, investors and other stakeholders.

The separation is to be effected by a spin-off of Altice N.V.’s 67.2% interest in Altice USA through a distribution in kind to Altice N.V. shareholders. Altice N.V. expects to complete the proposed spin-off transaction early June 2018, following Altice N.V. shareholder approval (Altice N.V. AGM vote on May 18, 2018), AFM approval and publication of a prospectus in connection with the distribution. US regulatory approvals have already been obtained.

Simultaneously, on January 8, 2018, the Board of Directors of Altice USA approved in principle the payment of a $1.5 billion cash dividend to all shareholders immediately prior to completion of the separation. Thereafter, on May 15, 2018, the Board of Directors of Altice USA declared a one-time cash dividend of $2.035 per share of Altice USA Class A common stock and Class B common stock. The dividend is payable to stockholders of record at the close of business on May 22, 2018. The payment date for the one-time cash dividend Altice USA declared will be two business days prior to the separation date. If the Master Separation Agreement to be entered into by Altice N.V. and Altice USA in connection with the separation of Altice USA from Altice N.V. is terminated on or prior to the payment date of the dividend, the payment of the one-time cash dividend will not occur.

In the spirit of enhanced accountability and transparency, Altice N.V. also announced on January 8, 2018, that Altice Europe will reorganize its structure comprising Altice France (including French Overseas Territories), Altice International and a newly formed Altice TV subsidiary. This includes integrating Altice’s support services businesses into their respective markets and bundling Altice Europe’s premium content activities into one separately funded operating unit with its own P&L. This reorganization of Altice Europe is now almost complete as follows:

• Following the announcement of the spin-off of Altice USA, Altice N.V.’s ownership of Altice Technical Services US was transferred to Altice USA for a nominal consideration (Altice USA now owns 100% of ATS US). In addition, in April 2018 Altice N.V. exercised its call option for the acquisition of 49% in Altice Technical Services Europe for a fixed price of €147 million (to be paid in November 2018). As a result of the exercise of this call option, Altice N.V.’s ownership in Altice Technical Services Europe increased to 100%. The closer integration of these suppliers will allow for further quality of service improvements. Subsequently, Altice Technical Services France and Altice Customer Services have been transferred from Altice International to Altice France in May 2018;
• The transfer of Altice N.V.’s ownership of i24 US and i24 Europe to Altice USA was completed in April 2018 for a minimal consideration as previously announced (Altice USA now owns 100% of i24 US and 100% of i24 Europe);
• The transfer of the Altice Content division from Altice International to Altice Europe and creation of Altice TV were completed in May 2018;
• The transfer of the French Overseas Territories (FOT) business from Altice International to Altice France is expected to complete in Q3 2018;
• The disposal of Altice Europe’s International wholesale voice business has been signed, with closing expected by year end 2018.

Conference call details

The company will host a conference call and webcast today, Thursday 17th of May 2018 at 2:00pm CEST (1:00pm BST, 8:00am EDT) to discuss the results.

Dial-in Access telephone numbers:
Participant Toll Free Dial-In Number: [phone]
Participant International Dial-In Number: [phone]
Conference ID 4459709
A live webcast of the presentation will be available on the following website:
https://event.on24.com/wcc/r/1670099/5E8F14FE61C4C863EEEE260BC18A7BF8

The presentation for the conference call will be made available prior to the call on Altice N.V.’s investor relations website:
http://altice.net/investor-relations

About Altice

Altice is a convergent global 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 50 million customers over fiber networks and mobile broadband. The company enables millions of 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 millions of customers to enjoy the most well-known media and entertainment. Altice innovates with technology in its Altice Labs across the world. Altice links leading brands to audiences through premium advertising solutions. Altice is also a global provider of enterprise digital solutions to millions of business customers. Altice is present in 10 territories from New York to Paris, from Tel Aviv to Lisbon, from Santo Domingo to Geneva, from Amsterdam to Dallas. Altice (ATC & ATCB) is listed on Euronext Amsterdam. For more information, visit www.altice.net

Financial Presentation

Altice N.V. (Altice N.V., the “Company”, or the “Successor entity”) was created as a result of a cross-border merger with Altice S.A. as per a board resolution dated August 9, 2015. Altice N.V.’s shares started trading on Euronext Amsterdam from August 10, 2015 onwards. Altice N.V. is considered to be the successor entity of Altice S.A. and thus inherits the continuity of Altice S.A.’s consolidated business. Altice N.V. 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, 2017; as if the planned spin-off of Altice USA had occurred on January 1, 2017, and excluding press titles within the AMG France business sold in April and October 2017, for the quarters ended March 31, 2017 and March 31, 2018 (the “Pro Forma Financial Information”). Financials include the contribution from Teads from Q3 2017 onwards. In addition, financials for Altice Europe exclude Altice N.V.’s international wholesale voice business (exclusivity for sale announced on March 12, 2018) and green.ch AG and Green Datacenter AG in Switzerland (following closing announced on February 12, 2018) for the quarters ended March 31, 2017 and March 31, 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, non-recurring items (capital gains, non-recurring litigation, restructuring costs) and equity-based compensation 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’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 Altice Group. The information presented as Adjusted EBITDA 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 March 31, 2018, unless otherwise stated, and any year over year comparisons are for the quarter ended March 31, 2017.

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 (New Perimeter)

	Altice Europe - Quarter ended March 31, 2018
In EUR millions	Altice France	Portugal	Israel	Dominican Republic	Teads	Others	Altice TV	Corporate & Other	Eliminations	Altice Europe Consolidated
Fixed - B2C	665.6	155.3	150.2	24.4	-	-	-	-	-	995.4
Mobile - B2C	1,055.5	134.9	61.8	86.0	-	-	-	-	-	1,338.1
B2B	453.8	145.4	29.6	20.1	-	-	-	-	-	648.7
Wholesale	250.5	39.0	-	1.8	-	-	-	-	-	291.3
Other	173.5	32.3	-	0.4	67.7	0.2	20.3	0.3	-	294.7
Standalone Revenue	2,598.8	506.7	241.5	132.7	67.7	0.2	20.3	0.3	-	3,568.3
Eliminations	-11.2	-11.9	-0.2	-0.3	-0.5	-	-15.8	-0.4	-	-40.2
Consolidated Revenue	2,587.6	494.9	241.4	132.4	67.3	0.2	4.5	-0.1	-	3,528.1
Adjusted EBITDA	914.5	219.2	107.1	76.1	5.5	-0.1	-56.0	-6.2	-0.4	1,259.7
Margin (%)	35.2%	43.3%	44.4%	57.3%	8.1%	nm	nm	nm	nm	35.7%
Capex	568.8	104.7	58.1	27.6	-	-	3.8	-	-2.3	760.7
Adjusted EBITDA - Capex	345.8	114.5	49.1	48.5	5.5	-0.1	-59.8	-6.2	1.9	499.1

	Altice Europe - Quarter ended March 31, 2017
In EUR millions	Altice France	Portugal	Israel	Dominican Republic	Teads	Others	Altice TV	Corporate & Other	Eliminations	Altice Europe Consolidated
Fixed - B2C	696.6	176.2	170.0	28.7	-	-	-	-	-	1,071.5
Mobile - B2C	1,026.8	140.5	55.9	107.6	-	-	-	-	-	1,330.8
B2B	492.5	151.9	35.3	23.9	-	-	-	-	-	703.6
Wholesale	256.7	41.3	-	4.2	-	-	-	-	-	302.2
Other	154.8	32.2	-	-0.7	-	0.8	6.0	-0.4	-	192.7
Standalone Revenue	2,627.3	542.1	261.3	163.7	-	0.8	6.0	-0.3	-	3,600.9
Eliminations	-12.3	-6.9	-0.3	-1.0	-	-	-6.3	-3.0	-	-30.2
Consolidated Revenue	2,610.3	532.9	261.0	162.6	-	0.8	-0.3	-3.3	-	3,570.8
Adjusted EBITDA	908.1	256.6	118.7	97.7	-	0.2	-46.1	-45.1	-1.2	1,288.9
Margin (%)	34.6%	47.3%	45.4%	59.7%	nm	nm	nm	nm	nm	36.1%
Capex	486.2	107.5	62.3	23.1	-	-	2.9	3.4	1.3	686.6
Adjusted EBITDA - Capex	421.9	149.1	56.5	74.6	-	0.2	-49.0	-48.5	-2.5	602.3

Notes to Summary Financials

(1)	Financials shown in these tables are pro forma defined as results of the Altice N.V. Group New Perimeter ("Altice Europe") as if the planned spin-off of Altice USA had occurred on 1/1/17 and excluding the press titles within the AMG France business ("France - Media" segment) as if the disposals occurred on 1/1/17. Segments are shown on a pro forma standalone reporting basis, Group figures are shown on a pro forma consolidated basis. Financials include the contribution from Teads from Q3 2017 onwards. In addition, financials for Altice Europe exclude Altice N.V.’s international wholesale voice business (exclusivity for sale announced on March 12, 2018) and green.ch AG and Green Datacenter AG in Switzerland (following closing announced on February 12, 2018).
(2)	“Other” segment within Altice International includes datacentre operations in France (Auberimmo).
(3)	Adjusted EBITDA is defined as operating income before depreciation and amortization, non-recurring items (capital gains, non- recurring litigation, restructuring costs) and other adjustment (equity-based compensation expenses).
(4)	Capex shown on an accrued basis.

Altice Europe KPIs

Q1-18 [3 months]	As and for the quarter ended March 31, 2018
					Dominican
	France	FOT	Portugal	Israel	Republic	Total
Homes passed	24,599	178	5,066	2,525	788	28,089
Fiber / cable homes passed	11,239	172	4,168	2,525	750	18,853
FIXED B2C
Fiber / cable unique customers	2,327	59	669	1,002	200	4,257
Net adds	96	0	49	1	-4	143
Total fixed B2C unique customers	6,014	83	1,559	1,002	322	8,979
Net adds	71	0	4	1	-1	75
Fixed ARPU (€/month)	€ 34.7	€ 45.6	€ 32.7	€ 51.6	€ 25.2	-
MOBILE B2C
Postpaid subscribers	12,774	198	2,851	1,159	530	17,513
Net adds	239	7	34	7	-5	282
Prepaid subscribers	1,666	54	3,504	150	2,688	8,062
Total mobile B2C subscribers	14,440	252	6,356	1,309	3,219	25,575
Mobile Postpaid ARPU (€/month)	€ 24.1	€ 35.2	€ 9.5	€ 12.4	€ 20.8	-

Q1-17 [3 months]	As and for the quarter ended March 31, 2017
					Dominican
	France	FOT	Portugal	Israel	Republic	Total
Homes passed	25,744	178	4,997	2,465	758	34,143
Fiber / cable homes passed	9,634	172	3,403	2,465	659	16,332
FIXED B2C
Fiber / cable unique customers	2,083	59	509	1,014	208	3,873
Net adds	45	0	31	-3	4	76
Total fixed B2C unique customers	6,079	85	1,571	1,014	319	9,068
Net adds	-35	-3	-28	-3	-1	-70
Fixed ARPU (€/month)	€ 35.9	€ 46.0	€ 34.6	€ 58.5	€ 30.0	-
MOBILE B2C
Postpaid subscribers	12,405	170	2,708	1,104	557	16,943
Net adds	68	8	-15	22	-8	76
Prepaid subscribers	2,108	59	3,455	116	2,910	8,647
Total mobile B2C subscribers	14,514	228	6,162	1,220	3,466	25,590
Mobile Postpaid ARPU (€/month)	€ 25.5	€ 36.7	€ 10.0	€ 12.7	€ 22.7	-

Notes to KPIs tables

(1)	Total homes passed in France includes unbundled DSL homes outside of SFR’s fiber / cable (FTTH / FTTB) footprint. Portugal total homes passed includes DSL homes enabled for IPTV outside of MEO’s fiber footprint and fiber homes passed figures include homes where MEO has access through wholesale fiber operators (c.0.3m in Q1-18). In Israel, the total number of homes passed is equal to the total number of Israeli homes.
(2)	Fiber / cable unique customers represents the number of individual end users who have subscribed for one or more of our fiber / 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 premises basis. Fiber / 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)	ARPU is an average monthly measure that we use to evaluate how effectively we are realizing revenue from subscribers. ARPU is calculated by dividing the revenue for the service provided after certain deductions for non-customer related revenue (such as hosting fees paid by channels) for the respective period by the average number of customer relationships for that period and further by the number of months in the period. The average number of customer relationships is calculated as the number of customer relationships on the first day in the respective period plus the number of customer relationships on the last day of the respective period, divided by two. For Israel and Dominican Republic, ARPU has been calculated by using the following exchange rates: average rate for Q1-18 €1.00 = ILS 4.2537, €1.00 = 60.1939 DOP.
(4)	Mobile subscribers is equal to the net number of lines or SIM cards that have been activated on our mobile networks. In Israel, the split between iDEN and UMTS (B2C only, including prepaid) services as follows: 7k iDEN and 1,302k UMTS as of March 31, 2018, and 9k iDEN and 1,210k UMTS as of March 31, 2017.

Altice Europe⁶ Financial and Operational Review by Segment – Pro Forma

For quarter ended March 31, 2018 compared to quarter ended March 31, 2017

France (Altice France including SFR)

Q1 2018 operational results in France were the best since Altice took control: continued infrastructure and customer premise equipment investments, new commercial offers and improving customer service all contributed to lower churn and higher customer gross additions.

Process improvements implemented since management changed at the end of 2017 are already demonstrating results at SFR, and this is just the beginning. SFR is now observing consistent improvements in customer service metrics which is being reflected by improvements in a series of customer satisfaction indicators. For example, SFR has made significant progress in customer installation processes, improving the installation completion rate and driving higher gross additions. The average days to install a fiber (FTTH) customer was down more than 30% YoY, while the installation rate was up +20% YoY, resulting from operational processes changes implemented since Q4 2017. On the fiber network side, incidents are being detected automatically and fixed more quickly, driving lower repeat calls to call centers and a significantly reduced number of calls related to technical service. As a result, fibre churn fell by more than 25% reaching a level comparable to some peers but still far from management’s target level. Further significant improvements will be seen in the following quarters.

SFR continued to invest in its infrastructure (network, IT and CPE) to further improve its customer satisfaction. On the fixed side, SFR remains the number one high-speed broadband infrastructure in France⁷ now reaching more than 11 million homes passed⁸ with +288k additional homes passed in Q1 2018 (including +224k new FTTH homes passed). On the mobile side, SFR continues to be the leader in terms of 4G mobile antennas in service in France (28,929 antennas) and covers 96% of the population with 4G at the end of the first quarter. In parallel, SFR is already preparing the arrival of the next generation of mobile telephony with 5G technology. After the first tests carried out in 2016 and 2017, SFR with one of its partners, Nokia, were the first in France to make a 5G New Radio connection using the 3.5 GHz frequency band.

In March 2018, SFR redesigned its offers, stripping out premium content, and making the telecom offers more simple and comparable to competitors. These offers are now built around two separate blocks: one centred around telecoms and one centred around premium content (Sport, Cinema/Series, etc.); these are offered as pay options, at a rate still preferential for SFR customers, for fixed and mobile offers. Altice France also announced the launch of a single brand this summer for all of its sports content: RMC Sport, set to replace SFR Sport with the Champion’s League launch this summer. This strategy is starting to pay off as there is a significant uplift on gross adds ARPU for customers taking content options and this trend is anticipated to strengthen as further key content is added with the Champion’s League from Q3 2018.

This solid operational turnaround and customer growth are expected to lead in the coming quarters to an inflection in revenue growth.

The following subscriber KPIs are based on the old reporting perimeter for SFR Group for comparability to previously reported figures in 2017 and 2016 (i.e. excluding FOT):

• Total Altice France revenue declined -1.1% YoY in Q1 2018 to €2,599m.
• The total fixed B2C customer base in France grew for the first time since Altice took control with +71k unique customer net additions in Q1 2018 (vs. -35k losses in Q1 2017), including the best fiber performance and lowest level of DSL losses:
  • Fiber net additions reached +96k in Q1 2018 (vs. +45k in Q1 2017) and DSL net losses were -25k in Q1 2018 (vs. -79k in Q1 2017);
  • Fixed B2C ARPU declined -3.0% YoY ex-VAT benefit⁹, or -3.6% YoY on reported basis to €34.7 in Q1 2018 (vs. €35.9 in Q1 2017), partly impacted by more intense market competition following SFR’s successful churn reduction and more proactive retention activity. SFR’s new bundle offers with premium options were made available towards the end of the first quarter which is expected to partly offset the negative impact on ARPU from the VAT law change implemented from March 2018;
  • Fixed B2C revenues declined -3.9% YoY ex-VAT benefit, or -4.5% YoY on a reported basis in Q1 2018, impacted by prior customer losses and the decline in ARPU.

• Mobile B2C postpaid customer growth in France in Q1 2018 was the highest since Altice bought SFR:
  • The mobile B2C postpaid customer base increased by +239k net additions in Q1 2018 (vs. +68k in Q1 2017);
  • B2C mobile postpaid ARPU declined -4.8% YoY ex-VAT benefit, or -5.3% YoY on a reported basis to €24.1 (vs. €25.5 in Q1 2017) due to increased customer retention and share of RED-branded customers within the mix of gross additions;
  • Mobile B2C service revenue grew +1.6% YoY ex-VAT benefit, or +0.9% YoY on a reported basis, supported by better mobile postpaid customer trends; total mobile B2C revenue grew +3.4% YoY ex-VAT benefit or +2.8% YoY on a reported basis.

• B2B revenue declined -7.9% YoY in Q1 2018, impacted by backbook price reductions implemented in Q2 2017. Following a change to the B2B management team in H2 2017 and adoption of a new pricing and customer retention strategy, the underlying order book has improved, leading to an improvement in trend sequentially already.
• Wholesale revenues were down -2.4% YoY in Q1 2018, excluding the international wholesale voice business (exclusivity for sale announced on March 12, 2018).
• Other¹⁰ revenue grew +12.1% YoY in Q1 2018, supported by continued strong growth at NextRadioTV.

Total Altice France’s Adjusted EBITDA grew by +0.7% in Q1 2018 YoY to €915m with margins expanding by +0.6% pts YoY to 35.2% reflecting cost savings being realised from the voluntary plan.

Total Altice France capex amounted to €569m in Q1 2018, an increase of €83m YoY reflecting continued network investments and significantly improved commercial trends.

Separately, on February 9, 2018, the “SFR Group”, which includes the telecoms operations of SFR and group media businesses (press titles, stake in NextRadioTV), was renamed “Altice France”.

Portugal (MEO)

MEO continues to see the benefits of its accelerated investment to expand its fiber coverage with the second consecutive quarter of growth for its fixed customer base, and a strong performance in the pay-TV segment. MEO has now reached 4.2 million fiber homes passed, on track for its target for nationwide coverage of 5.3 million homes. As MEO continues to invest in its mobile network – now reaching over 97% 4G mobile population coverage and 65% 4G+ mobile population coverage – the mobile postpaid customer base continues to grow.

This quarter, MEO pursued further initiatives as part of its digital transformation and to promote sustainability:

• “My MEO” provides a new self-care user experience which is more mobile centric with a new design and user-friendly interface. This new multi-platform tool will allow customers to manage their accounts and find relevant information about their products & services, anytime and anywhere, in a simple and easy way;
• “Video Chat” is an integrated solution that recreates a real store experience which is 100% online, allowing customer service teams to engage in real time with customers in their homes;
• All the commercial post-paid offers began to include free electronic invoices.

These new products and services demonstrate once again MEO’s leadership when it comes to innovation and improving customer experience.

MEO’s successful infrastructure investment, new commercial strategy and improving quality of its customer service all contributed to better operational results with historically low churn and higher customer gross additions. This solid customer growth is expected to lead in the coming quarters to consistent market share growth and an inflection in revenue growth.

• Total Altice Portugal revenue declined -4.5% YoY in Q1 2018 ex one-off¹¹ or -6.5% YoY on a reported basis to €507m, mainly impacted by prior fixed B2C customer losses and repricing in the B2B segment:
  • MEO added a record number of fiber customers this quarter again, supported by the expansion of its fiber footprint: net additions in Q1 2018 of +49k (vs. +31k in Q1 2017);
  • The acceleration in fiber growth supported total fixed net additions, positive for the second quarter in a row in Q1 2018 (+4k). DSL/DTH trends also improved YoY with customer losses of -45k in Q1 2018 (vs. -59k in Q1 2017). This better commercial performance was driven by higher gross additions and further churn improvements (reaching again this quarter record low levels, especially for the fiber customer base);
  • B2C fixed revenues declined in Q4 -7.7% YoY ex one-off¹¹ or -11.9% YoY on a reported basis in Q1 2018, driven by prior fixed customer losses of -0.8% YoY and a decline in total fixed B2C ARPU of -5.5% YoY. ARPU pressure reflects the regulatory decision in Q3 2017 to open up MEO’s customer base for disconnections which required more retention activity, as well as the absence of an across the board price increase in 2018, leading to a more challenging YoY comparison;
  • The postpaid B2C mobile subscriber trends improved again YoY in Q1 2018 with net additions of +34k (vs. -15k losses in Q1 2017), supported by MEO’s network investment and successful convergent strategy. Prepaid B2C mobile net losses were -154k in Q1 2018 (vs. +8k in Q1 2017), including the impact of greater prepaid to postpaid migrations;
  • Mobile postpaid ARPU declined -5.1% YoY in Q1 2018 due to increased promotional offers to migrate prepaid to postpaid customers and retention activity following the disruption from the Q3 2017 regulatory decision on customer disconnections, contributing to the decline in B2C mobile revenues of -4.0% YoY;
  • B2B revenues declined -2.0% YoY¹¹ or -4.3% YoY on a reported basis, due to the continued repricing of our legacy services facing intense competition;
  • Wholesale revenue declined -5.7% YoY in Q1, mainly due to other Portuguese operators continuing to replace copper access lines and circuits leased from MEO by their own infrastructure;
  • Other revenue was in line with the prior year (+0.3% YoY).
• Total Altice Portugal Adjusted EBITDA declined by -10.6% ex one-off¹¹, or -14.6% YoY on a reported basis to €219m with margins reducing by -1.9% pts ex one-off¹¹ YoY to 43.3% (or -4.1% pts on a reported basis) reflecting the loss of higher margin revenue in both the B2C and B2B segments.

• Total Altice Portugal capex of €105m in Q1 2018, in line with the level of last year (€108m in Q1 2017) reflecting continued network investments.
• MEO gained market share for the second quarter in a row which is expected to contribute to revenue growth in the coming quarters.

Israel (HOT)

• Total revenue in Israel declined -0.9% YoY in Q1 2018 on a CC basis, or -7.5% on a reported basis to €242m with continued strong mobile growth offset by declines in the fixed line business due to intensified competition in fixed and further in mobile:
  • The cable customer base grew for the first time since Altice took control with +1k net additions in Q1, despite a very high level of promotions in the market. Fixed line ARPU declined -5.6% YoY in Q1 in local currency, mainly driven by greater competition in the TV market. Overall fixed revenues declined -4.1% YoY in Q1 in local currency. HOT remains a premium brand in the market, supported by its superior fixed network infrastructure, premium content packages, and superior customer service;
  • The B2C mobile postpaid customer base continues to grow with net additions of +7k in Q1 and B2C mobile postpaid ARPU growing +4.5% YoY in local currency, reflecting HOT’s focus on high-value customers. Mobile revenues grew +7.8% YoY in Q1 in local currency.

• Total Adjusted EBITDA in Israel declined by -3.3% in Q1 2018 YoY in local currency, or -9.8% on a reported basis YoY to €107m with margins reducing by -1.1% pts YoY to 44.4%.

Dominican Republic (Altice Dominicana)

• Total revenue in Dominican Republic declined -2.4% YoY in Q1 on a CC basis, or -18.9% YoY on a reported basis to €133m with continued fixed growth being offset by declines in the prepaid mobile business:
  • The total fixed B2C customer base was stable in Q1 (-1k net additions) with a slight decline in the fiber customer base (-4k) being partially offset by growth of the DTH customer base. Total fixed B2C ARPU increased +1.4% YoY in Q1 in local currency;
  • Total B2C mobile subscriber trends improved YoY, decreasing by -34k net losses in Q1 (vs. -44k in Q1 2017) with net mobile postpaid losses of -5k (vs. -8k in Q1 2017), mobile postpaid ARPU grew +10.5% YoY in Q1 in local currency. Subscribers trends have been impacted in recent quarters by continuous prepaid voice erosion and increased price competition for mobile data services. New offers focused on data and value were made available this quarter, which is expected to partially offset that impact going forward.
• Total Adjusted EBITDA in Dominican Republic declined by -6.2% in Q1 2018 YoY in local currency, or -22.1% on a reported basis YoY to €76m with margins reducing by -2.3% pts YoY to 57.3%.

Shares outstanding

As at March 31, 2018, Altice N.V. had 1,492,756,175 common shares A (including 531,025,305 treasury shares) and 228,272,075 common shares B outstanding.

On January 30, 2018, Altice announced its intention to cancel 370,000,000 common A shares. The cancellation of such shares will become effective in accordance with the provisions of Dutch law.

Altice Europe Consolidated Net Debt as of March 31, 2018, breakdown by credit silo¹²

• Altice Europe has a robust, diversified and long-term capital structure:
  • Group weighted average debt maturity of 6.1 years;
  • Group weighted average cost of debt of 5.5%;
  • 84% fixed interest rate;
  • No major maturities at SFR until 2022, and none at Altice International until 2023;
  • Available liquidity of €3.0bn¹³.

• Total consolidated Altice Europe net debt was €32.2bn at the end of Q1 2018.

Altice Luxembourg (HoldCo)	Amount (local currency)	Actual	Coupon / Margin	Maturity
Senior Notes	EUR 2,075	2,075	7.250%	2022
Senior Notes	USD 2,900	2,353	7.750%	2022
Senior Notes	EUR 750	750	6.250%	2025
Senior Notes	USD 1,480	1,201	7.625%	2025
Swap Adjustment	-	-147	-	-
Altice Luxembourg Gross Debt		6,231
Total Cash		-74
Altice Luxembourg Net Debt		6,157
Undrawn RCF		200
WACD (%)		7.0%

Altice France (SFR)	Amount (local currency)	Actual	PF	Coupon / Margin	Maturity
Senior Secured Notes	USD 4,000	3,245	3,245	6.000%	2022
Senior Secured Notes	EUR 1,000	1,000	1,000	5.375%	2022
Senior Secured Notes	USD 1,375	1,115	1,115	6.250%	2024
Senior Secured Notes	EUR 1,250	1,250	1,250	5.625%	2024
Senior Secured Notes	USD 5,190	4,210	4,210	7.375%	2026
Term Loan	EUR 1,136	1,136	1,136	E+3.00%	2025
Term Loan	USD 1,409	1,143	1,143	L+2.75%	2025
Term Loan	USD 2,145	1,740	1,740	L+300%	2026
Term Loan	EUR 998	998	998	E+3.00%	2026
Drawn RCF	-	330	630	E+3.25%	2021
Other debt & leases	-	132	150	-	-
Swap adjustment	-	-256	-253	-	-
Altice France Gross Debt		16,044	16,362
Total Cash		-354	-407
Altice France Net Debt		15,690	15,954
Undrawn RCF		795	495
WACD (%)			4.7%

Altice International	Amount (local currency)	Actual	PF	Coupon / Margin	Maturity
HOT Unsecured Notes	ILS 814	189	189	3.90 - 6.90%	2018
Senior Secured Notes	EUR 500	500	500	5.250%	2023
Senior Secured Notes	USD 2,060	1,671	1,671	6.625%	2023
Senior Secured Notes	USD 2,750	2,231	2,231	7.500%	2026
Term Loan	USD 903	733	733	L+2.750%	2025
Term Loan	USD 898	728	728	L+3.75%	2026
Term Loan	EUR 299	299	299	E+2.75%	2026
Drawn RCF	-	280	-	E+3.50%	2021
Other debt & leases	-	84	66	-	-
Swap Adjustment	-	372	372	-	-
Altice International Senior Debt		7,088	6,789
Senior Notes	EUR 250	250	250	9.000%	2023
Senior Notes	USD 400	324	324	8.125%	2024
Senior Notes	USD 385	312	312	7.625%	2025
Senior Unsecured Notes	EUR 675	675	675	4.750%	2028
Swap Adjustment	-	28	28	-	-
Altice International Total Debt		8,677	8,379
Total Cash		-377	-340
Altice International Net Total Debt		8,300	8,040
Undrawn RCF		631	911
WACD (%)			5.6%
Total Altice Luxembourg Consolidated Debt		30,952	30,972
Total Cash		-805	-821
Total Altice Luxembourg Consolidated Net Debt		30,147	30,151
WACD (%)			5.4%

ACF	Amount (local currency)	Actual	PF	Coupon / Margin	Maturity
Corporate Facility	EUR 240	240	240	E+6.843%	2020
Corporate Facility	EUR 2,113	2,113	1,488	E+6.843%	2021
ANV/ACF Gross Debt		2,353	1,728
Total Cash		-132	-132
ANV/ACF Net Debt		2,221	1,596
WACD (%)			6.8%

Altice Europe Pro Forma Net Leverage Reconciliation as of March 31, 2018

€m
Altice Europe Reconciliation to Swap Adjusted Debt				Actual	PF
Total Debenture and Loans from Financial Institutions				32,781	32,781
Value of Debenture and Loans from Financial Institutions in Foreign Currency converted at closing FX Rate				-26,585	-26,585
Value of Debenture and Loans from Financial Institutions in Foreign Currency converted at hedged Rate				26,582	26,582
Transaction Costs				339	339
Fair Value Adjustments				-4	-4
Total Swap Adjusted Value of Debenture and Loans from Financial Institutions				33,113	33,113
Overdraft				17	17
Other				174	174
PF New Organization				-	-605
Gross Debt Consolidated				33,305	32,700
Altice Europe (Actual)	Altice Luxembourg Consolidated	Altice Corporate Financing	Altice TV	ANV	Altice N.V. Post-split TopCo
Gross Debt Consolidated	30,952	2,353	-	-	33,305
Cash	-805	-132	-	-156	-1,093
Net Debt Consolidated	30,147	2,221	-	-156	32,212
Altice Europe (Pro Forma)	Altice Luxembourg Consolidated	Altice Corporate Financing	Altice TV	ANV	Altice N.V. Post-split TopCo
Gross Debt Consolidated	30,972	1,728	-	-	32,700
Cash	-821	-132	-279	-156	-1,388
Net Debt Consolidated	30,151	1,596	-279	-156	31,312

€m						Altice Corporate Financing		ANV	Altice N.V. Post-split TopCo
Altice Europe (Pro Forma)	Altice France	Altice International	Altice Luxembourg	Eliminations	Altice Luxembourg Consolidated		Altice TV
Gross Debt Consolidated	16,362	8,379	6,231	-	30,972	1,728	-	-	32,700
Cash	-407	-340	-74	-	-821	-132	-279	-156	-1,388
Net Debt Consolidated	15,954	8,040	6,157	-	30,151	1,596	-279	-156	31,312
LTM Standalone	4,167	1,794	-	-	5,961	-	-232	-64	5,665
Eliminations	-	-0	-	-11	-0	-	-	11	-
Corporate Costs	-	-26	-5	-	-42	-	-	31	-
LTM EBITDA Consolidated	4,167	1,768	-5	-11	5,919	-	-232	-22	5,665
Gross Leverage	3.9x	4.7x	0.0x	0.0x	5.2x	0.0x	0.0x	0.0x	5.8x
Net Leverage	3.8x	4.5x	0.0x	0.0x	5.1x	0.0x	0.0x	0.0x	5.5x

Altice N.V. Non-GAAP Reconciliation to GAAP measures as of March 31, 2018 year to date¹⁴

	For the three months ended
In million Euros	March 31, 2018
Revenues	3,599.1
Purchasing and subcontracting costs	-1,116.6
Other operating expenses	-862.9
Staff costs and employee benefits	-367.3
Total	1,252.2
Stock option expense	7.9
Adjusted EBITDA	1,260.1
Depreciation, amortisation and impairment	-1,005.2
Stock option expense	-7.9
Other expenses and income	-106.1
Operating profit	141.0
Capital expenditure (accrued)	760.7
Capital expenditure - working capital items	60.9
Payments to acquire tangible and intangible assets	821.6
Operating free cash flow (OpFCF)	499.4

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 the Altice N.V. Group New Perimeter ("Altice Europe") as if the planned spin-off of Altice USA had occurred on 1/1/17 and excluding the press titles within the AMG France business ("France - Media" segment) as if the disposals occurred on 1/1/17. 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, Group figures are shown on a pro forma consolidated basis. Financials include the contribution from Teads from Q3 2017 onwards. In addition, financials for Altice Europe exclude Altice N.V.’s international wholesale voice business (exclusivity for sale announced on March 12, 2018) and green.ch AG and Green Datacenter AG in Switzerland (following closing announced on February 12, 2018) from 1/1/17.
2 See reconciliation of non-GAAP performance measures to operating profit for the three months period ended on page 18 of this release.
3 FTTB and FTTH homes passed.
4 Requires approval of the general meeting.
5 Operating Free Cash Flow (“OpFCF”) defined as Adjusted EBITDA less capex.
6 Financials shown in this section are based on the new reporting perimeter for Altice Europe unless stated otherwise.
7 Delivering broadband speeds over 100Mbps.
8 FTTB and FTTH homes passed.
9 Excluding benefit of lower VAT for some press/TV bundles implemented in 2016; loss of benefit from March 2018 following VAT law change.
10 Other revenue includes SFR Media, FOT, support services and eliminations with the SFR Telecom business.
11 Excluding impact from one-off sale of receivables in Q1 2017 for €11.5m (€7.9m in B2C and €3.6m in B2B).
12 Pro-forma for new organization. Includes €625m of prepayment of the Altice Corporate Financing facility following €900m dividend from Altice USA, and €300m RCF drawn at SFR.
13 €1.6bn of revolvers available and €1.4bn of cash (pro-forma for new organization and €900m of dividend from Altice USA of which €275m will stay on balance sheet to fund the Altice TV silo and €625m is used to repay the Altice Corporate Financing facility). Cash includes €131m of restricted cash for debt financing obligations at Altice Corporate Financing.
14 The financial numbers disclosed in this reconciliation below are subject to review procedures of Altice N.V.’s external auditors. The difference in consolidated revenue and Adjusted EBITDA as reported for Altice N.V. in the Non-GAAP Reconciliation to GAAP measures as of March 31, 2018 year to date and the Pro Forma Financial Information for Altice Europe as disclosed in this Earnings Release is mainly due to pro forma adjustments to exclude the financial information related to the International Wholesale Voice business and I24.}