Iliad : Press Release

PRESS RELEASE

Paris, September 1, 2017 FIRST-HALF 2017 RESULTS

• Mobile business: a solid performance with 440,000 new subscribers added during the period, or 45,000 more than in first-half 2016, making Free Mobile the leading recruiter of mobile subscribers for the 22nd consecutive quarter1
• FTTH: Free is the leading alternative FTTH operator with 5.3 million connectible sockets (up 900,000 over the period) and almost 420,000 FTTH subscribers (up by around 110,000 over the period)
• Landline business: the Group confirms its position as France's leading alternative landline Broadband and Ultra-Fast Broadband operator, with some 6.5 million subscribers at June 30, 2017
• 4G: over 50% of subscribers using 4G, with record average monthly data usage of 6.6 GB
• First-half revenues up by over 7% to €2,464 million
• 8.2% increase in EBITDA to €875 million, driven by a sharp increase in profitability for the Mobile business
• Ongoing sustained investment in ultra-fast networks with around 1,800 mobile sites rolled out during the period, with 3G coverage close to 91% of the population

SIGNIFICANT EVENTS IN FIRST-HALF 2017

Just five years after it entered the mobile market, the Group has become one of the leading telecommunications operators in France, with 19.6 million subscribers, of which over 13 million mobile subscribers and some 6.5 million Broadband and Ultra-Fast Broadband subscribers. At June 30, 2017, it had market shares of 24% for Broadband and Ultra-Fast Broadband and 18.5%2 for mobile. During the first half of 2017, the Group continued its profitable growth trajectory, generating close to €2.5 billion in revenues - up 7.3% on first-half 2016.

The most significant events of first-half 2017 were as follows:

Operational information

n Landline business: the Group confirmed its position as France's leading alternative landline Broadband and Ultra-Fast Broadband operator, with some

6.5 million subscribers at June 30, 2017. The number of new subscribers during the period (net of cancellations) came to 83,000, representing a net add market share of 27%. The contraction in the Group's net adds compared with the first half of 2016 was due to fierce competition during the period, with numerous promotions launched by competitors, as well as the maturity of the market.

n Continued FTTH rollouts and connections. The Group continued the FTTH rollout drive during the first six months of 2017, with (i) 900,000 new connectible sockets installed, bringing the total to 5.3 million at June 30, 2017, and (ii) some 110,000 additional subscribers connected to fiber during the period, i.e., as many as for the whole of 2016. This means that the Group's FTTH subscriber base increased by 35% in the space of six months and at June 30, 2017 it stood at almost 420,000.

n Mobile business: the Group was France's leading recruiter of mobile subscribers for the 22nd quarter in a row, notching up 200,000 net adds in the second quarter of 2017. Thanks to its strategy of continually enriching its offers for the same price, the Group has been France's net add market leader ever since it launched its Mobile business. At June 30, 2017, the Group had over 13 million mobile subscribers, giving it a

market share of 18.5%2.

n A further improvement in the Mobile business's subscriber mix, with new subscribers signing up for the €19.99 per month offer (€15.99 per month for Freebox subscribers). Following on from 2016, when a large proportion of the Group's net adds took up this offer, in the first half of 2017, all of its new subscribers signed up for it.

n Ongoing success of 4G. At June 30, 2017, the Group had 6.8 million 4G subscribers (more than half of its mobile subscriber base). This figure reflects the quality of the Group's 4G network, which, in the second quarter of 2017, obtained the best score for 4G connections in France in the nPerf mobile connections performance survey for the ninth consecutive quarter. In addition, average monthly data usage per 4G subscriber rose sharply once again, reaching 6.6 GB.

n Italy's fourth mobile network operator: the Group made significant progress in preparing for the launch of its mobile offerings. Since late 2016 and during the first

half of 2017, the Group has (i) secured a backhaul network of some 10,000 kilometers of fibre and deployed its core network, (ii) set up roaming solutions, (iii) negotiated interconnection contracts, and (iv) recruited an Italy-based team to manage the new subsidiary's operations.

Financial information

n Consolidated revenues up by more than 7% compared with first-half 2016. In spite of a competitive environment, the Group reported robust growth in the first half of 2017, with revenues climbing by more than 7% year on year to just under €2.5 billion.

n Another period of solid growth for the Mobile business, with revenues reaching nearly €1.1 billion. Both overall revenues for the Mobile business and Mobile services revenues rose by more than 10% in the first half of 2017 despite slower growth for incoming revenues during the period. The robust growth reported for Mobile services revenues was due to a further significant improvement in the subscriber mix, with more subscribers choosing the €19.99 per month offer (€15.99 per month for Freebox subscribers).

n Revenues for the Landline business up 4.8% to €1.4 billion, mainly thanks to the TV by CANAL Panorama package for Freebox Revolution subscribers.

n A record half year for the mobile network rollout, in line with 2016. The Group pursued its rollout drive in the first six months of 2017 by (i) opening nearly 1,800 new 3G sites, (ii) equipping over 2,200 4G sites for 1,800 MHz frequencies, and (iii) opening more than 500 sites using 700 MHz frequencies. The Group's objective is to rapidly develop its mobile network with a view to extending and enhancing its quality, notably by broadening its 3G and 4G coverage. At end-June 2017, the Group's full coverage rate (i.e., both indoor and outdoor) was almost 91% of the French population for 3G and 82% for 4G.

n A more-than 8% increase in consolidated EBITDA, thanks to a sharp increase in profitability for the Mobile business and despite a number of negative impacts on Landline EBITDA. Consolidated EBITDA came to €875 million in first-half 2017, up 8.2% year on year. This rise was wholly attributable to the sharp increase in profitability for the Mobile business, thanks to a higher proportion of traffic carried directly on the Group's own network and an improved mobile subscriber mix. Conversely, EBITDA for the Landline business was negatively affected during the period by (i) regulatory decisions, notably a €0.35 rise in unbundling fees to €9.45 per month, (ii) higher payroll costs due to the acceleration of the FTTH network rollout, and (iii) the measures taken to enrich the Group's offerings, notably the TV by CANAL Panorama package.

n Capital expenditure focused on the mobile and FTTH network rollouts, with significant financial flexibility maintained. The Group invested €723 million in its landline and mobile infrastructure in France in the first six months of 2017, enabling it to become more autonomous and augment its profitability while at the same time enhancing its subscriber service. It also invested €58 million in Italy during the period (including

€50 million for the frequencies purchased from Wind/Tre). Despite this outlay, the Group's financial structure remained strong, and with a leverage ratio of 1.0x EBITDA at June 30, 2017, it was once again one of the European telecom operators with the least amount of debt.

KEY INDICATORS

Operating performance indicators

Subscriber numbers June 30, 2017 June 30, 2016 June 30, 2015

Total mobile subscribers	13,140,000	12,080,000	10,925,000
- Of which 4G	6,800,000	4,700,000	2,400,000
Total Broadband and Ultra-Fast Broadband subscribers	6,468,000	6,261,000	5,991,000
- Of which FTTH	419,000	250,000	-
Total number of subscribers	19,608,000	18,341,000	16,916,000

Other indicators	Six months to June 30, 2017	Six months to June 30, June 30, 2015 2016
Broadband and Ultra-Fast Broadband ARPU (in €)	34.00	33.90	34.50
Freebox Revolution ARPU* (in €)	>38.00	>38.00	>38.00
Number of connectible FTTH sockets	5.3m	3.1m	-
Average 4G data usage (in GB per month per subscriber)	6.6 GB	3.9 GB	2.2 GB

* Excluding promotions

Financial performance indicators

In € millions	Six months to June 30, 2017	Six months to June 30, % change 2016
Consolidated revenues	2,464.0	2,296.9	7.3%
- Landline	1,393.5	1,329.1	4.8%
- Mobile	1,075.4	973.4	10.5%
- Intra-group sales	(4.9)	(5.6)	12.5%
Consolidated EBITDA	874.6	808.5	8.2%
Profit from ordinary activities	430.1	360.2	19.4%
Profit for the period	232.6	190.4	22.1%
Leverage ratio	1.0x	0.9x	10.1%