march 15, 2016 - alticealtice.net/.../20160315-alt-fy-15-earnings-release.pdf · 3/15/2016 ·...

EARNINGSRELEASEMarch15,2016

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ALTICE–FULLYEAR2015PROFORMA1CONSOLIDATEDRESULTS

• Best Group KPIs in Q4 since Altice IPO with positive operationalmomentumineachmajormarket

o Overall Altice Group added 270k postpaid mobile customers and130kfiberbroadbandcustomers

o France: mobile subscriber growth (+140k B2C postpaid netadditions) and stabilized fixed base (-6k) with continued fibercustomernetadditions(+78k)

o Portugal: continued convergent 4P/5P (+19k) and postpaidmobilesubscribergrowth(+49k)

o Suddenlink: strong customer relationship (+13k) and broadbandsubscribergrowth(+21k)

o Dominican Republic added 7k fiber customers and a record 42kpostpaid mobile net additions while Israel reports lowest cablecustomernetlosssinceAlticeIPO(-4k)

• Operationalmomentum setting basis for revenue trend improvement in2016

• Strongfullyearfinancialperformancein2015withGroupadjustedEBITDAup 18% and Operating Free Cash Flow up 33% (16% and 35% ex-Suddenlink,respectively)

• Achieved2015guidanceforNumericable-SFRandAlticeInternational3

1FinancialsshowninthesebulletpointsareproformadefinedhereasresultsoftheAlticeNVGroupasifallacquisitionshadoccurredon1/1/15,includingPortugalTelecomandSuddenlink(andexcludingCabovisao,ONI,LaReunionandMayottemobileactivitiesasifthedisposalsoccurredon1/1/15).Segmentsshownonastandalonereportingbasis,Groupfiguresshownonaconsolidatedbasis3Numericable-SFRFY2015guidance:adjustedEBITDA>€3.85bnandEBITDA-Capex>€2.0bn;AlticeInternationalFY2015guidance:adjustedEBITDA>€1.925bnandcapex/salesinthehighteens(Altice


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• GroupadjustedEBITDAmarginexpandedby5.8ppYoYto38.1%in2015as efficiency measures progress; all major businesses with best-in-classmarginscomparedtotheirpeergroup

• Acceleratedre-investmentsintofixedandmobilenetworks,andselectivecontent:

o France: leading 4Gmobile site build out in France inQ4 2015 and2016YTDgivingleading2015coverageprogression(from33%end-2014to64%)andexpandedfiberbroadbandcoverageby1.3mfiberhomespassed in2015to total7.7m, retaining#1 fibercoverage inFrance(targeting22mhomespassedbytheendof2022)

o Portugal: build-out of national fiber network, rampup inQ4 2015withplantocoveranadditional3mhouseholdsandbusinessesatarateof600kp.a.overthenextfiveyears

o Suddenlink:OperationGigaSpeed–well-advancednetworkupgradeprogram to deliver next-generation broadband services across thefootprintby2017

o Acquisition of differentiated content and sports rights in bothFranceandPortugaltocomplementcommunicationsservices

• Successful Altice Group transformation including completion of PortugalTelecom and entry into the US market with Suddenlink and CVC(announced),aswellasstrategicpartnershipwithNextRadioTV

• Robust,diversifiedandlong-termcapitalstructure

o IncreasedproportionoffixedratedebtofAlticeEuropeto83%from68%atQ3

InternationalguidanceupdatedaspartofQ32015resultsfollowingcompletionofPortugalTelecomacquisition)


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o Maturity of €1.1bn of Corporate Facility extended by two years(March2019)

March15,2016:AlticeNV(Euronext:ATCNAandATCBNA),todayannouncesfinancialandoperatingresultsfortheyearendedDecember31,2015.

Strongproforma2adjustedEBITDAandCashFlowgrowth

§ GroupRevenue€17,495m,down0.1%YoY5o €11,038mFranceRevenue,down3.5%o €4,324mInternationalRevenue,down0.4%6o €2,181mUS(Suddenlink)Revenue,up24.2%7o Sequentialrevenuetrendsandleadkeyperformanceindicators

pointingtoimprovingGrouprevenuetrendoutlookfor2016§ GroupadjustedEBITDA€6,671m,up17.6%YoY8:

o €3,860mFranceadjustedEBITDA,up20.2%o €1,933mInternationaladjustedEBITDA,up7.7%9o €889mUS(Suddenlink)adjustedEBITDA,up29.3%10

§ GroupadjustedEBITDAmarginexpandedby5.8%ptsto38.1%;best-in-classmarginimprovementwithfurtherupside

o Francemarginexpandedby6.9%ptsto35.0%o Internationalmarginexpandedby3.3%ptsto44.7%(Portugal

Telecommarginexpandedby4.3%ptsto41.2%-sector-leadingmarginsamongEuropeanPTOs11)

5GroupRevenuedeclined3.2%onaconstantcurrency(CC)basis6InternationalRevenuedeclined4.2%onCCbasis7US(Suddenlink)Revenueincreased3.7%onCCbasisto$2,420minlocalcurrency8GroupadjustedEBITDAincreased13.8%onCCbasis9InternationaladjustedEBITDAincreased3.2%onCCbasis10US(Suddenlink)adjustedEBITDAincreased8.0%onCCbasis11ComparingaveragedomesticmarginsofEuropeanPTOs(PublicTelecommunicationsOperators)includingBT,DeutscheTelekom,Elisa,KPN,Orange,Proximus,Swisscom,TDC,Telefonica,TelekomAustria,TelenorandTeliaSonera


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o USSuddenlinkmarginexpandedby1.5%ptsto40.7%-UScablesector-leadingmargininQ412

§ GroupOperatingFreeCashFlow13of€3,550m,up33.3%YoY14withgrowthcontributionsfromallreportingsegments

KeyStrategicUpdate

§ €2.5bndividendpaidbyNumericable-SFRonDecember22,2015.Alticesubsequently repaid vendor note (€1,977bn) put in place for the keyacquisition of Vivendi’s remaining 20% interest in Numericable-SFR(Alticeheld78.14%ofthesharecapitalofAlticeattheendofDecember,2015)

§ US:Completedacquisitionof70%stakeinSuddenlinkonDecember21,

2015

§ US:Acquisitionof Cablevisionpending regulatory reviews;expected tocloseQ22016

§ Completed sale of Cabovisao and ONI to Apax France on January 19,2016

§ Altice Media: Completed acquisition of stake in NextRadioTV through

strategicpartnershipwithcompanyfounderandmajorshareholder;o Tender offer closed and squeeze out of minority shareholders

completedonFebruary1,2016

12ComparingaverageofComcast(CableCommunicationsbusinessonly),Charter,TWC,Cablevision,Mediacommargins.13DefinedasEBITDAlessCapitalExpenditure,excludingspectrumcapexof€477minFrance14GroupOperatingFreeCashFlowincreased29.4%onCCbasis


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§ OnJanuary20,2016,AlticeannouncedthecreationofAlticeLabs,basedin Portugal, leading the innovation agenda for all Altice Group’soperations.

§ In France, acquired a 5MHz block of paired spectrum in the 700MHz

bandfor€477m(includingfees)onNovember17,2015.

DexterGoei,ChiefExecutiveOfficerofAltice, said: “Weend2015deliveringthe best quarterly KPIs since our IPO with all major operations seeingsignificant improvements as a result of operational focus, integration andinvestments.TheseimprovementsareinthecontextofGroupadjustedEBITDAup 18% and Operating Free Cash Flow up 33% for 2015 (pro forma incl-Suddenlink),significantlyhigherthanpeersoverthepastyear,withimprovingrevenuetrendsineachlocalmarket.

We have strengthened our management team and during 2016 we willcontinue to be very focused on further improving operational and financialperformance, integrating the businesses we have acquired and pursuing theefficiency targetswehave setout.AlticeGroupcompanieshavebest-in-classmarginswith furtherupsideaswe continueour successful strategybasedonfixed/mobileandmediaconvergenceandtheimplementationofbestpracticesandefficienciesacrossallofouroperations.

Weremainconfidentthatacceleratinginvestmentsinbothfiberand4G+infrastructure,aswellashighervaluegenerationthroughfocusontriple-andquadrupleplaybundlesenhancedwithdifferentiatedcontentofferings,willcontinuetodeliversuperiorresults.”


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Guidance2016

For 2016 we expect an improving trend in Altice Group revenue on aconsolidatedbasis (under thecurrentGroupperimeterat constantcurrency).We expectmid-single digit growth in Group Adjusted EBITDA and OperatingFreeCashFlowgrowthflattoslightlydownreflectingacceleratedinvestments.Contacts

HeadofInvestorRelationsNickBrown:+41797201503/[email protected]

HeadofCommunicationsArthurDreyfuss:+41799464931/[email protected]

Conferencecalldetails

Thecompanywillhostaconferencecallandwebcasttodiscusstheresultsat2.30pmCEST,9.30amESTtoday.

Webcastlive:http://edge.media-server.com/m/p/wcqk5kpaConferencecalldialin:

France:+33176772228

UK:+442034271903

USA:+16462543360


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FinancialPresentation

Altice N.V. (the “Company”, or the “Successor entity”) was created as a result of a cross-bordermergerwithAltice S.A. asper aboard resolutiondatedAugust9, 2015.AlticeNV’s shares startedtradingonEuronextAmsterdam fromAugust10, 2015onwards.AlticeNV is considered tobe thesuccessorentityofAlticeS.A.andthus inherits thecontinuityofAlticeS.A’sconsolidatedbusiness.AlticeN.V. and its subsidiaries have operated for several years and have from time to timemadesignificant equity investments in a number of cable and telecommunication businesses in variousjurisdictions. Therefore, in order to facilitate an understanding of the Company’s results ofoperations,wehavepresentedanddiscussedtheproformaconsolidatedfinancialinformationoftheCompany (giving effect to each such significant acquisition as if such acquisitions had occurred byJanuary1,2014includingthefinancialsofNumericableGroupS.A.,AlticeHispaniolaS.A.(previouslyOrange Dominicana S.A.), Tricom S.A., SFR, PT-Portugal and Suddenlink LLC) for the years endedDecember31,2014andDecember31,2015(the“ProFormaConsolidatedFinancialInformation”).

This press release contains measures and ratios (the “Non-IFRS Measures”), including AdjustedEBITDAandOperating FreeCash Flow, that arenot requiredby, or presented in accordancewith,IFRSoranyothergenerallyacceptedaccountingstandards.WepresentNon-IFRSmeasuresbecausewebelievethattheyareofinterestfortheinvestorsandsimilarmeasuresarewidelyusedbycertaininvestors,securitiesanalystsandotherinterestedpartiesassupplementalmeasuresofperformanceand liquidity.TheNon-IFRSmeasuresmaynotbecomparable to similarly titledmeasuresofothercompanies, have limitations as analytical tools and should not be considered in isolation or as asubstituteforanalysisofour,oranyofoursubsidiaries’,operatingresultsasreportedunderIFRSorother generally accepted accounting standards. Non-IFRS measures such as Adjusted EBITDA andOperatingFreeCashFlowarenotmeasurementsofour,oranyofoursubsidiaries’,performanceorliquidityunder IFRSoranyothergenerallyacceptedaccountingprinciples. Inparticular,youshouldnotconsiderEBITDAasanalternativeto(a)operatingprofitorprofitfortheperiod(asdeterminedinaccordancewithIFRS)asameasureofour,oranyofouroperatingentities’,operatingperformance,(b)cash flows fromoperating, investingand financingactivitiesasameasureofour,oranyofoursubsidiaries’,abilitytomeetitscashneedsor(c)anyothermeasuresofperformanceunderIFRSorothergenerallyacceptedaccountingstandards.Inaddition,thesemeasuresmayalsobedefinedandcalculateddifferentlythanthecorrespondingorsimilartermsunderthetermsgoverningourexistingdebt.

Financialandstatisticalinformationandcomparisons

Financial and statistical information is at and for the year ended December 31, 2015, unlessotherwisestated.WherefinancialorstatisticalinformationisgivenfortheyearendedDecember31,2015,anycomparisonsaretotheyearendedDecember,2014,unlessotherwisestated.


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SummaryFinancials

ProformaInformation

Year ended December 31, 2015 Three months December 31, 2015

In EUR millions Portugal Israel DR FOT OthersTotal

International FranceTotal

Europe USA Corporate

TotalAltice

N.V.

Standalone revenues 2,347.4 923.3 694.8 195.1 163.4 4,323.9 11,038.1 15,362.0 2,181.2 20.4 17,563.6 Intersegment revenue adjustment (3.9) - - (8.8) (15.7) (28.4) (20.2) (48.6) - (19.6) (68.2)

Consolidated Group revenues 2,343.5 923.3 694.8 186.3 147.7 4,295.5 11,017.9 15,313.4 2,181.2 0.8 17,495.4

Standalone adjusted EBITDA 967.8 430.5 360.4 86.7 87.4 1,932.8 3,860.2 5,793.0 888.8 (11.0) 6,670.8 % margin 41.2% 46.6% 51.9% 44.4% 53.5% 44.7% 35.0% 37.7% 40.7% -53.8% 38.0%

Intersegment EBITDA adjustment (0.5) - - 8.8 (17.0) (8.7) 26.5 17.8 - (17.8) 0.0 Consolidated Group adjusted EBITDA 967.3 430.5 360.4 95.5 70.5 1,924.2 3,886.7 5,810.9 888.8 (28.8) 6,670.9

% margin 41.3% 46.6% 51.9% 51.3% 47.7% 44.8% 35.3% 37.9% 40.7% 38.1%

Consolidated Group Capex 331.2 284.9 124.1 50.8 40.9 832.0 2,333.7 3,165.8 431.8 0.0 3,597.7 o/w

- Spectrum/Satellite Capacity (51.5) - (51.5) (477.0) (528.5) (528.5) - Exclusive Content (42.4) (17.5) (59.9) (59.9) (59.9)

Capex excluding capacity/content 279.7 242.5 124.1 50.8 23.4 720.6 1,856.7 2,577.4 431.8 0.0 3,009.3

Standalone EBITDA-Capex [ex-spectrum] 636.7 145.6 236.3 35.8 46.5 1,100.8 2,003.5 3,104.3 456.9 (11.1) 3,550.2

Year ended December 31, 2014 Three months December 31, 2014é

Portugal Israel DR FOT OthersTotal



TotalAltice

N.V.

Standalone revenues 2,533.0 857.3 607.1 189.0 152.9 4,339.3 11,436.0 15,775.4 1,756.2 3.0 17,534.6 Intersegment revenue adjustment - - - (2.5) (6.4) (8.8) (8.1) (16.9) - (3.0) (20.0)

Consolidated Group revenues 2,533.0 857.3 607.1 186.6 146.5 4,330.5 11,427.9 15,758.5 1,756.2 - 17,514.7

Standalone adjusted EBITDA 934.3 411.8 283.3 81.6 83.4 1,794.4 3,212.1 5,006.5 687.6 (23.2) 5,671.0 % margin 36.9% 48.0% 46.7% 43.2% 54.6% 41.4% 28.1% 31.7% 39.2% 32.3%

Intersegment EBITDA adjustment - - - 4.6 (5.2) (0.6) 3.4 2.8 - (2.7) 0.1 Consolidated Group adjusted EBITDA 934.3 411.8 283.3 86.2 78.2 1,793.8 3,215.5 5,009.3 687.6 (25.9) 5,671.1

% margin 36.9% 48.0% 46.7% 46.2% 53.4% 41.4% 28.1% 31.8% 39.2% 32.4%

Consolidated Group Capex 397.8 224.7 69.3 47.0 56.1 795.0 1,893.5 2,688.5 320.6 - 3,009.1 o/w

- Spectrum/Satellite Capacity - - - - - - Exclusive Content - (27.8) (11.2) (39.0) (39.0) (39.0)

Capex excluding capacity/content 397.8 196.9 69.3 47.0 44.9 756.0 1,893.5 2,649.5 320.6 - 2,970.1

Standalone EBITDA-Capex [ex-spectrum] 536.5 187.1 214.0 34.6 27.3 999.4 1,318.6 2,318.1 367.0 (23.2) 2,661.9


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NotestoSummaryFinancials

(1) Portugal is Portugal Telecom only for the pro forma financial information shown in the tables above, excluding Cabovisao and ONI (disposalscompletedJanuary19,2016).

(2) FortheFrenchOverseasTerritories(FOT),cablerevenueincludesrevenuesfromcableservicesweprovideinGuadeloupeandMartiniqueaswellasxDSLbasedbroadbandInternet(includingIPTV)andfixed-linetelephonyservicesweprovideinGuadeloupe,MartiniqueandFrenchGuiana.TheLaRéunionandMayottemobilebusinessesweresoldonJuly31,2015andsoareexcludedfromtheproformafinancial informationshown inthetablesabove.

(3) Other comprises our B2B telecommunications solutions business and datacentre operations in Switzerland (Green and Green Datacenter), ourdatacentreoperationsinFrance(Auberimmo)andourcontentproductionanddistributionbusinessinFrance(MaChaîneSport,MCS,andSportv).

(4) Adjustmentsarerelatedtotheeliminationof intercompanytransactionsbetweencompaniesoftheAlticeGroup.SegmentsareshownonbothastandalonebasisandGroupconsolidatedbasisforreconciliation.

(5) AdjustedEBITDAisdefinedasoperatingprofitbeforedepreciationandamortization,restructuringandnon-recurringcostsandotherspecificitemssuchasequitybasedcompensationorcertainbusinesstaxesinFrance(CVAE).

Year ended December 31, 2015 Three months ended December 31, 2015




TotalAltice

N.V.

Revenue Fixed - B2C 696.7 645.3 106.9 73.3 71.3 1,593.5 2,873.1 4,466.7 1,720.1 - 6,186.7Revenue Fixed - B2B 448.2 72.9 37.8 14.7 13.3 586.9 1,401.8 1,988.8 278.5 - 2,267.2Revenue Wholesale 291.3 - 62.7 5.8 4.3 364.2 1,328.1 1,692.3 59.8 - 1,752.1Revenue Mobile - B2C 581.7 151.0 414.0 67.5 1.3 1,215.6 4,722.2 5,937.8 - - 5,937.8Revenue Mobile - B2B 214.7 54.0 50.7 4.4 - 323.8 712.9 1,036.7 - - 1,036.7Other revenue content 69.7 - - - 24.2 93.9 - 93.9 - - 93.9Other revenue datacenter - - - - 16.1 16.1 - 16.1 - - 16.1Other revenue 45.1 - 22.7 29.3 32.9 129.9 - 129.9 122.8 20.4 273.1

Total Standalone revenues 2,347.4 923.3 694.8 195.1 163.4 4,323.9 11,038.1 15,362.0 2,181.1 20.4 17,563.6Intersegment eliminations (3.9) - - (8.8) (15.7) (28.4) (20.2) (48.6) - (19.6) (68.2)

Consolidated Group revenues 2,343.5 923.3 694.8 186.3 147.7 4,295.5 11,017.9 15,313.4 2,181.1 .8 17,495.4

Year ended December 31, 2014 Three months ended December 31, 2015




TotalAltice

N.V.

Revenue Fixed - B2C 699.2 614.1 92.4 75.0 74.8 1,555.5 2,917.7 4,473.2 1,395.0 - 5,868.1Revenue Fixed - B2B 493.6 66.4 42.9 15.8 14.5 633.1 1,433.5 2,066.7 210.1 - 2,276.8Revenue Wholesale 326.9 - 33.9 5.8 - 366.5 1,342.0 1,708.6 40.3 - 1,748.8Revenue Mobile - B2C 627.5 128.6 370.7 76.5 1.3 1,204.5 4,937.0 6,141.5 - - 6,141.5Revenue Mobile - B2B 222.9 48.3 42.0 4.7 - 317.8 805.8 1,123.7 - - 1,123.7Other revenue 163.0 - 25.3 11.3 62.2 261.8 - 261.8 110.8 3.0 375.7

Total standalone revenues 2,533.0 857.3 607.1 189.0 152.9 4,339.3 11,436.0 15,775.4 1,756.2 3.0 17,534.6Intersegment eliminations - - - (2.5) (6.4) (8.8) (8.1) (16.9) - (3.0) (20.0)

Consolidated Group revenues 2,533.0 857.3 607.1 186.6 146.5 4,330.5 11,427.9 15,758.5 1,756.2 - 17,514.7


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GroupKPIs

Q4-15[3months]

Dominican Belgiumand FrenchOverseasFrance Portugal Suddenlink Israel Republic Luxembourg Territories Total

FIBER/NON-FIBERSYSTEMSHomesPassed 9,323 4,742 3,210 2,395 655 234 178 20,738FiberHomesPassed 7,711 2,237 3,050 2,395 512 234 171 16,310

Fiberuniquecustomers 1,814 404 1,467 1,027 143 104 55 5,014Fibercustomernetadds 78 8 13 (4) 7 (2) 2 102

3P/4P/5Pcustomers 1,403 364 411 483 40 50 43 2,7943P/4P/5Ppenetration 77% 90% 28% 47% 28% 48% 78% 56%

TotalFiberRGUs 4,840 1,166 2,892 2,178 277 188 141 11,682PayTV 1,593 396 1,093 824 128 90 55 4,179PayTVnetadds 76 8 (1) (4) 4 (2) 2 83PayTVpenetration 21% 18% 36% 34% 25% 39% 32% 26%

Broadband 1,634 371 1,223 694 69 53 43 4,086Broadbandnetadds 89 9 21 - 8 (0) 3 130Broadbandpenetration 21% 17% 40% 29% 13% 22% 25% 25%

Telephony 1,614 399 577 660 81 45 43 3,418Telephonynetadds 90 8 15 1 10 (0) 3 127Telephonypenetration 21% 18% 19% 28% 16% 19% 25% 21%

RGUsperfibercustomer 2.7 2.9 2.0 2.1 1.9 1.8 2.6 2.3

FiberARPU €39.3 €40.1 €103.6 €54.6 €36.7 €47.3 € 62.1 -

TotalDSL/Non-FiberRGUs(Incl.DTH) 11,756 2,763 - - 300 - 138 14,957Broadband 4,538 741 - - 93 - 52 5,424Telephony 4,434 1,169 - - 207 - 75 5,885TV 2,784 852 - - - - 11 3,647

MOBILEB2CTotalmobilesubscribers 15,137 6,252 - 1,229 3,894 5 218 26,735Postpaidsubscribers 12,604 2,676 - 1,199 803 5 148 17,435Postpaidnetadds 140 48 - 38 42 0 4 273

Prepaidsubscribers 2,533 3,576 - 30 3,092 - 70 9,300

MobileARPU €22.2 €6.9 - €11.9 €9.7 €23.3 € 30.5 -

AsandforthequarterendedDecember31,2015inthousandsexceptpercentagesandasotherwiseindicated


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NotestoGroupKPIs

(1) TotalHomesPassedinFranceexcludesDSLhomesoutsideofNumericable-SFR’sfiberfootprint.PortugaltotalHomesPassedincludesDSLhomesenabledforIPTVoutsideofPortugalTelecom’sfiberfootprint.DominicanRepublictotalHomesPassedincludesDSLhomesoutsideofthefiberfootprint.

(2) Fiberuniquecustomersrepresentsthenumberofindividualenduserswhohavesubscribedforoneormoreofourfiberbasedservices(includingpay television, broadbandor telephony),without regard to howmany services towhich the enduser subscribed. It is calculatedon a uniquepremisesbasis.ThetotalnumberofFibercustomersdoesnotincludesubscriberstoeitherourmobileorISPservices.FiberCustomersforFranceexcludeswhite-labelsubscribers.ForSuddenlinkitreferstothetotalnumberofuniquecustomerrelationships.

(3) RGUs,orRevenueGeneratingUnits,relatetosourcesofrevenue,whichmaynotalwaysbethesameascustomerrelationships.Forexample,oneperson may subscribe for two different services, thereby accounting for only one subscriber, but two RGUs. RGUs for pay television andbroadbandarecountedonaperservicebasisandRGUsfortelephonyarecountedonaperlinebasis.ForSuddenlinkthisisequivalenttoPSUs,orPrimaryServiceUnits.

(4) Fiberpenetrationratesforourpaytelevision,broadbandandtelephonyservicesarepresentedasapercentageoffiberhomespassed.

(5) ARPUisanaveragemonthlymeasurethatweusetoevaluatehoweffectivelywearerealizingrevenuefromsubscribers.ARPUiscalculatedbydividingtherevenuefortheserviceprovidedaftercertaindeductionsfornon-customerrelatedrevenue(suchashostingfeespaidbychannels)fortherespectiveperiodbytheaveragenumberofcustomerrelationshipsforthatperiodandfurtherbythenumberofmonthsintheperiod.Theaveragenumberofcustomerrelationshipsiscalculatedasthenumberofcustomerrelationshipsonthefirstdayintherespectiveperiodplusthenumberofcustomer relationshipson the lastdayof the respectiveperiod,dividedby two.For IsraelandDominicanRepublic,ARPUhasbeencalculatedbyusingthefollowingexchangerates:averagerateforQ4-15,€0.235=ILS1.00,€0.020=1DOP.

(6) MobilesubscribersisequaltothenetnumberoflinesorSIMcardsthathavebeenactivatedonourmobilenetworks.InIsrael,thetotalnumberofmobilesubscribersincludesB2CandB2B(B2Bisnotdisclosedseparately)splitbetweeniDENandUMTSservicesasfollows:

AsofDecember30th 2014 2015

inthousandsMobileSubscribers iDEN....................................................................................................................................................................................172 138UMTS..................................................................................................................................................................................802 1,091

Total.........................................................................................................................................................................889 1,229


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FinancialandOperationalReview-ProFormaandAggregatedBasisforyearendedDecember31,2015comparedtoyearendedDecember31,2014

GroupTotal Group revenue of €17,495m decreased by 0.1% YoY on a consolidatedbasis in 2015 as growth in US and exchange rate tailwinds offset declines inFranceandPortugal.Onaconstantcurrencybasis,revenuedeclinedby3.2%.GroupadjustedEBITDAincreasedby17.6%YoYto€6,671mduetothestronggrowth in France (+20.2% on a standalone basis), US (+29.3%) and Portugal(+3.6%).On a constant currencybasisGroup adjusted EBITDAwasup 13.8%.GroupadjustedEBITDAmarginexpanded5.8%pts YoY to38.1%. InQ42015themarginimprovementYoYwas7.6%ptsinFrance,9.3%ptsinPortugal,and2.2%ptsinUS.AlticeInternational’sadjustedEBITDAgrowthwas8.9%YoYinQ4 2015 at constant currency driven by strong growth in the DominicanRepublicandefficiencysavingsachievedsofaratPortugalTelecom.GroupOperatingFreeCashFlow increased33.3% to€3,550m,or29.4%onaconstantcurrencybasis,withgrowthcontributionsfromallreportingsegmentsFranceTotalrevenueinFranceof€11,038mdecreasedby3.5%YoYonastandalonebasisin2015duetodeclinesinboththeB2CandB2Bdivisions.AdjustedEBITDAwasupverystrongly20.2%YoYto€3,860mwithfullyearmarginsexpandingby6.9%ptsYoYto35.0%.Therevenuetrendisexpectedtofurtherimprovein2016basedonrecentoperationalperformancetrends:


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o SignificantlyimprovedmobileperformanceinQ42015includingsubscribergrowth(140kB2Cpostpaidnetadditions;54ktotalB2Cnetadditions)andstillachievedfinancialguidanceforFY2015

o GrowingfibercustomeradditionsandDSLmigrations(+78kuniquefibercustomeradditionsinQ4).TotalfiberandDSLcustomerbasealmostflatqoq(-6k)asDSLattritiondeclined

o BetterB2BunderlyingtrendsinH22015inFixedDataandVoiceandMobilewhileICTcontinuestoexpand

o Acceleratere-investingofsavingstoreignitegrowth§ Upgraded3Gsitesforbettervoicequalityandhighest

numberof4GsitesrolledoutinthemarketinQ4(1,080)andin2016YTD(364);plantoreachnetworkparitywithmarketleaderby2017

§ Extendedleadinfibercoverageby1.3mhomespassedin2015toatotalof7.7m,acceleratingrollouttoc.2mp.a.from2016onwards

§ AcquisitionofNextRadioTVstakeandexclusivesportsrightsincludingEnglishPremierLeague,Frenchbasketballleague(“PROA”),EnglishRugbyPremierLeagueandWorldSkiChampionshiptoadddifferentiatedcontenttoourcommunicationsservices

o LaunchedZive,the#1S-VODserviceinFrancewithover1millioncustomers

o OntracktooutperformsynergyandefficiencytargetsannouncedatthetimeoftheSFRacquisition


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Portugal(PortugalTelecomonly)

Achievingfinancialtargets,includingacquisitionopexsavingtarget16onrun-ratebasis(€120m):

o AdjustedEBITDAgrewby3.6%YoYwithmarginsat41.2%up4.3%pts(Q4growthof16.2%YoYandmarginsup9.3pts)

o Challengingrevenuetrenddown7.3%YoYwithB2Cdown3.6%andB2Bdown7.5%;expectrevenuetrendtoimprovein2016

§ BetterB2Ctrendin2016withresilientcustomerbaseandmarketpriceincreasesinJanuary2016

§ StrongerB2Bsegment(peakdeclineinQ22015)withnofurtherkeycorporateaccountlossesaftertakingownership(H22015)andmarketsharegainsintheSoHo/SMEmarket

o Convergencestrategywith54%ofourfibercustomersnow4P/5Pcustomers.90%ofourfibercustomersare3Pormorecustomers

o Acceleratingfiberrollouttoreach100%ofthepopulationby2020andcontentinvestments(e.g.FCPortorights)

16Targetfor€200mofopexsavings,€100mofwhichwasexpectedinthefirst12-18monthsfromacquisition.


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US(Suddenlink)

Provengrowthtrackrecord(2015revenueup3.7%YoYonaCCbasis),acceleratingattheendof2015(+4.5%YoYinQ4)astheimpactfromdroppingViacomcontentattheendof2014increasinglyfallsaway.2.8%growthYoYinresidentialcustomerrelationshipsanddynamicB2Bbusiness

o StrongsupportofOperationGigaSpeed–upgradingthenetworktomake1Gbpsservicesavailableto90%ofthefootprintby2017.

o Introductionin2H2016ofournewall-in-onehomehubbasedonLaBoxtechnologydeployedaroundtheGroup

o Reiteratemediumtermefficiencytargets($215mofopexsavingsand$65mofcapexsavings

IsraelBestKPIssinceAlticeIPO;Broadbandcustomerbasestabilized,lowestcablecustomerlosses(-4k):

o Reducedchurnfrombettercustomerserviceandretentiontools(churndown5%pts)

o Continuedpostpaidmobilegrowth(+38k,+35kB2CUMTS)o AdjustedEBITDAgrew4.5%YoYonareportedbasisbutwasdown

5.0%onCCbasisduetoimpactofcontinuedintensecompetitioninthemobilesegment(cableadjustedEBITDAmarginsof59%)

DominicanRepublic

ContinuedstrongcommercialmomentumandfinancialperformancewithRevenuegrowthof14.4%YoY(2.1%onCCbasis)andadjustedEBITDAgrowingby27.2%YoY(13.5%onCCbasis):


16

o Bestmobilepostpaidnetadditionssinceacquisition(+42k)o Further3Gand4Gnetworkcoverageexpansion(90%3G

populationcoverageachievedinQ12016,44%4Gcoverageatendof2015)

o ReachedIPOtargetof550khomespassedupgradedforfiber;+182kadditionalfiberhomesin2015,targetingfurther200kin2016

o OngoingDSLtofibermigrationathigherARPUsandmarginswithtripleplaypenetrationincreasing3xsincetheacquisition

Sharesoutstanding

AsatDecember31,2015,AlticeN.V.had841,244,925Asharesand272,280,241Bsharesoutstanding.


17

ConsolidatedProFormaNetDebtasofDecember31,2015

AlticeLuxembourg(HoldCo)Amount(local

currency)Actual Actual

Coupon/Margin

Maturity

SFR-SeniorNotes(EUR) EUR2,075m 2,075 7.250% 2022SFR-SeniorNotes(USD) USD2,900m 2,664 7.750% 2022PT-SeniorNotes(EUR) EUR750m 750 6.250% 2025PT-SeniorNotes(USD) USD1,480m 1,359 7.625% 2025DrawnRCF -SwapAdjustment (617)AlticeLuxembourgGrossDebt 6,231 6,231AvailableCash (5) (5)AlticeLuxembourgNetDebt 6,225 6,225UndrawnRCF 200WACD(%) 7.0%

AlticeFranceAmount(local

currency)Actual Actual

Coupon/Margin

Maturity

USDNotes2019 USD2,400m 2,204 4.875% 2019USDNotes2022 USD4,000m 3,674 6.000% 2022USDNotes2024 USD1,375m 1,263 6.250% 2024EURNotes2022 EUR1,000m 1,000 5.375% 2022EURNotes2024 EUR1,250m 1,250 5.625% 2024USDTermLoan USD2,574m 2,364 L+3.750% 2020EURTermLoan EUR1,881m 1,881 E+3.750% 2020USDTLJul15Refi USD550m 505 L+3.81% 2022EURTLJul15Refi EUR300m 300 E+3.81% 2022USDTLOct15Div USD1,340m 1,231 L+4.00% 2023EURTLOct15Div EUR500m 500 E+4.00% 2023DrawnRCF EUR450m 450 E+3.25% 2019OtherDebt(EUR) EUR212m 212SwapAdjustment (2,080)AlticeFranceGrossDebt 14,755 14,755AvailableCash (355) (355)AlticeFranceNetDebt 14,401 14,401UndrawnRCF 675WACD(%) 4.7%


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ALTICEINTERNATIONAL

Amount

(local

currency)

Actual ActualCoupon/

MarginMaturity

HOTUnsecuredNotes(NIS) NIS1,063m 250 3.90-6.90% 2018GreenDataCenterDebt(CHF) CHF43m 40 L+1.700% 2022SeniorSecuredNotes(USD) USD460m 423 7.875% 2019SeniorSecuredNotes(EUR) EUR210m 210 8.000% 2019TermLoan(USD) USD1,013m 931 L+4.500% 2019DR-SeniorSecuredNotes(USD) USD900m 827 6.500% 2022DR-SeniorSecuredNotes(EUR) EUR300m 300 6.500% 2022PT-TermLoan(EUR) EUR398m 398 E+4.250% 2022PT-TermLoan(USD) USD498m 457 L+4.250% 2022PT-SeniorSec.Notes(EUR) EUR500m 500 5.250% 2023PT-SeniorSec.Notes(USD) USD2,060m 1,892 6.625% 2023TLJul15Refi(EUR) EUR450m 450 E+3.500% 2022DrawnRCF EUR160m 160 E+4.000% 2019PTLeases EUR67m 67SwapAdjustment (185)AlticeInternationalSeniorDebt 6,719

SeniorNotes(USD) USD425m 390 9.875% 2020SeniorNotes(EUR) EUR250m 250 9.000% 2023DR-SeniorNotes(USD) USD400m 367 8.125% 2024PT-SeniorNotes(USD) USD385m 354 7.625% 2025SwapAdjustment 28AlticeInternationalTotalDebt 8,108 8,108

Cash-AlticeInternational (266) (266)AlticeInternationalNetTotalDebt 7,842 7,842

UndrawnRCF 824

WACD(%) 6.0%

TotalAlticeLuxConsolidatedDebt 29,094 29,094

TotalCashALux (626) (626)TotalAlticeLuxConsolidatedNetDebt 28,468 28,468

WACD(%) 5.5%

Suddenlink

Amount

(local

currency)

Actual ActualCoupon/

MarginMaturity

NonExtendedTermLoan USD1,481m 1,360 L+2.813% 2019ExtendedTermLoan USD815m 749 L+3.250% 2022NewSn.Sec.Notes USD1,100m 1,010 5.375% 2023SuddenlinkSec.Debt 3,120 3,120

SeniorNotesdue2020 USD1,500m 1,378 6.375% 2020SeniorNotesdue2021 USD1,250m 1,148 5.125% 2021NewSeniorNotes USD300m 276 7.750% 2025NewSeniorHoldcoNotes USD320m 294 7.750% 2025SuddenlinkGrossDebt 6,215 6,215

Cash-Suddenlink (79) (79)SuddenlinkNetDebt 6,136 6,136

UndrawnRCF 321

WACD(%) 5.3%

Amount

(€mequivalent)


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AlticeNVProformaNetLeverageReconciliationasofDecember31,2015

AlticeGroupexc.CVC ALUX SL ANV/ACF* AlticeGroupGrossDebtConsolidated 29,094 6,215 1,088 36,398NetDebtConsolidated 28,468 6,136 958 35,562LTMNC-SFRStandalone/SuddenlinkStandalone 3,860 889LTMAlticeInternationalStandalone 1,933ALuxCorporatecosts/consolidationadjustments (7)ANVCorporatecosts/consolidationadjustments (4)LTMEBITDAConsolidated 5,786 889 (4) 6,671GrossLeverage(LTMexcludingsynergies) 5.0x 7.0x 5.5xNetLeverage(LTMexcludingsynergies) 4.9x 6.9x 5.3x*Excludesc.€7.7bnrestrictedcashforCVCand$1,829m(€1,680m)cashraisedforCablevision.


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NOTANOFFERTOSELLORSOLICITATIONOFANOFFERTOPURCHASESECURITIES

Thispressreleasedoesnotconstituteorformpartof,andshouldnotbeconstruedas,anofferorinvitationtosellsecuritiesofAlticeN.V.oranyofitsaffiliates(collectivelythe“AlticeGroup”)orthesolicitationofanoffertosubscribefororpurchasesecuritiesoftheAlticeGroup,andnothingcontainedhereinshallformthebasisofor be relied on in connectionwith any contract or commitmentwhatsoever. Any decision to purchase anysecurities of the Altice Group should bemade solely on the basis of the final terms and conditions of thesecuritiesandtheinformationtobecontainedintheofferingmemorandumproducedinconnectionwiththeofferingof such securities. Prospective investors are required tomake theirown independent investigationsand appraisals of the business and financial condition of the Altice Group and the nature of the securitiesbefore taking any investment decision with respect to securities of the Altice Group. Any such offeringmemorandummaycontaininformationdifferentfromtheinformationcontainedherein

FORWARD-LOOKINGSTATEMENTS

Certain statements in this press release constitute forward-looking statements within the meaning of thePrivateSecuritiesLitigationReformActof1995.Theseforward-lookingstatementsinclude,butarenotlimitedto,all statementsother than statementsofhistorical facts contained in thispresentation, including,withoutlimitation,thoseregardingourintentions,beliefsorcurrentexpectationsconcerning,amongotherthings:ourfuturefinancialconditionsandperformance,resultsofoperationsandliquidity;ourstrategy,plans,objectives,prospects,growth,goalsandtargets;andfuturedevelopments inthemarketsinwhichweparticipateorareseeking to participate. These forward-looking statements can be identified by the use of forward-lookingterminology,includingtheterms“believe”,“could”,“estimate”,“expect”,“forecast”,“intend”,“may”,“plan”,“project”or“will”or, ineachcase, theirnegative,orothervariationsorcomparable terminology.Where, inany forward-looking statement, we express an expectation or belief as to future results or events, suchexpectationorbelief isexpressedingoodfaithandbelievedtohaveareasonablebasis,buttherecanbenoassurance that the expectation or belief will result or be achieved or accomplished. To the extent thatstatements in this press release are not recitations of historical fact, such statements constitute forward-lookingstatements,which,bydefinition,involverisksanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthoseexpressedorimpliedbysuchstatements.

FINANCIALMEASURES

Thispress release containsmeasures and ratios (the “Non-IFRSMeasures”), includingEBITDAandOperatingFreeCashFlowthatarenotrequiredby,orpresentedinaccordancewith,IFRSoranyothergenerallyacceptedaccounting standards. We present Non-IFRS or any other generally accepted accounting standards. WepresentNon-IFRSmeasuresbecausewebelievethattheyareofinterestfortheinvestorsandsimilarmeasuresarewidelyusedbycertaininvestors,securitiesanalystsandotherinterestedpartiesassupplementalmeasuresofperformanceandliquidity. TheNon-IFRSmeasuresmaynotbecomparabletosimilarlytitledmeasuresofother companies, have limitations as analytical tools and should not be considered in isolation or as asubstitute for analysis of our, or any of our subsidiaries’, operating results as reported under IFRS or othergenerallyacceptedaccountingstandards. Non-IFRSmeasures suchasEBITDAandOperatingFreeCashFloware notmeasurements of our, or any of our subsidiaries’, performance or liquidity under IFRS or any othergenerallyacceptedaccountingprinciples.Inparticular,youshouldnotconsiderEBITDAasanalternativeto(a)operatingprofitorprofitfortheperiod(asdeterminedinaccordancewithIFRS)asameasureofour,oranyofouroperatingentities’,operatingperformance,(b)cashflowsfromoperating,investingandfinancingactivitiesas ameasureofour,or anyofour subsidiaries’, ability tomeet its cashneedsor (c) anyothermeasuresofperformanceunder IFRSorothergenerallyacceptedaccountingstandards. Inaddition,thesemeasuresmayalsobedefinedandcalculateddifferentlythanthecorrespondingorsimilartermsunderthetermsgoverningourexistingdebt.


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EBITDA,OperatingFreeCashFlowandsimilarmeasuresareusedbydifferentcompaniesfordifferingpurposesand are often calculated in ways that reflect the circumstances of those companies. You should exercisecaution incomparingEBITDAandOperatingFreeCashFlowasreportedbyustoEBITDAandOperatingFreeCash Flow of other companies. EBITDA as presented herein differs from the definition of “ConsolidatedCombined EBITDA” for purposes of any the indebtedness of an Altice Issuer. The information presented asEBITDAisunaudited.Inaddition,thepresentationofthesemeasuresisnotintendedtoanddoesnotcomplywith thereporting requirementsof theU.S.SecuritiesandExchangeCommission (the“SEC”)andwillnotbesubject to review by the SEC; compliance with its requirements would require us to make changes to thepresentationofthisinformation.

march 15, 2016 - alticealtice.net/.../20160315-alt-fy-15-earnings-release.pdf · 3/15/2016 ·...

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