Altice Europe N.V.: Q3 2020 Pro Forma Results - 19.11.2020 - 5:35pm CET

Earnings release

November 19, 2020

ALTICE EUROPE N.V. THIRD QUARTER 2020 RESULTS1

Group revenue +3.2% and Telecom revenue +2.7% Group EBITDA +5.1%

€3.5 billion of available liquidity2

Altice Europe N.V. (Euronext: ATC and ATCB) today announces financial and operating results for the quarter ended September 30, 2020.

Patrick Drahi, Altice Europe founder: "In line with the performance since the beginning of the year, the Group proved its resilience during the third quarter. In France, we have maintained growth in our core telecom business, supported by residential service revenue growth. The Altice Corporate Financing facility was repaid during the third quarter, following the issuance of €900 million equivalent of new 8.25-year Senior Secured Notes at Altice France. Including these transactions, the Group has repaid €1.4 billion of debt since April 2020. The Group's diversified and simplified capital structure has no material maturities before 2025 and €3.5 billion of available liquidity. We maintain our FY 2020 guidance to grow revenue and EBITDA, and continue to focus on deleveraging the Group through growing revenue, EBITDA and cash flow."

Altice Europe Q3 2020 Key Financial Highlights

• Group revenue grew by +3.2% YoY in Q3 2020.
• Telecom revenue excluding equipment and roaming grew by +4.4% YoY in Q3 2020.
• Residential service revenue excluding roaming grew by +1.9% YoY in Q3 2020.
• Telecom EBITDA grew by +0.7% YoY in Q3 2020 and Telecom EBITDA margin was 39.9%.
• Total accrued capital expenditure was €818 million in Q3 2020.
• Consequently, Operating Free Cash Flow amounted to €663 million in Q3 2020.

1. Financials exclude press magazine Groupe L'Express (following disposal on July 30, 2019) and daily newspaper Libération (following disposal on September 03, 2020) from 1/1/19
2. €3.5 billion liquidity includes €2.1 billion of undrawn revolvers and €1.3 billion of cash. The €1.3 billion of cash is including the €375 million earn-out to be received in December 2021 (not including the €375 million earn-out to be received in December 2026) and excludes funding of the Covage acquisition expected in Q4 2020 and any associated construction-related EBITDA

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Earnings release

Altice Europe Q3 2020 Key Operational Highlights

• Altice France achieved a solid financial performance in Q3 2020, with revenue growth in the residential service and business services segments supporting total revenue growth of +4.0% YoY:

o The residential fixed base grew by +21k net additions, with +113k fibre net additions and 50% of the total fixed subscriber base on fibre. The residential mobile postpaid base grew by +25k net additions.

o Altice France reported revenue growth of +4.0% YoY and EBITDA growth of +2.8% YoY in Q3 2020. Residential service revenue, excluding roaming out, grew by +3.2% YoY in Q3 2020.

• Altice International Telecom revenue, excluding low margin equipment revenue and roaming revenue, declined by -0.3% YoY in Q3 2020. Altice International residential service revenue, excluding roaming, declined by -1.6% YoY.

1. The residential fixed base grew by +17k net additions, with +50k fibre net additions. The residential mobile postpaid base grew by +27k net additions.

Capital Structure Key Highlights - including subsequent events

• Total consolidated Altice Europe net debt was €28.9 billion at the end of Q3 2020 (€28.5 billion pro forma for the €375 million earn-out due in December 2021 related to the FastFiber partnership).
• On September 15, 2020, Altice Europe announced that it had issued €900 million (equivalent) 8.25-year
  Senior Secured Notes at Altice France S.A. ("Altice France") following significant excess demand. The weighted average cost on a fully euro swapped basis is 4.125%. This consists of €500 million of 8.25- year Senior Secured Notes with a coupon of 4.125% and $475 million of 8.25-year Senior Secured Notes with a coupon of 5.125%. The proceeds from this transaction have been used to repay the then outstanding amount under the Altice France revolving credit facility of €150 million, and the remaining proceeds of €750 million have been used to repay the Altice Corporate Financing facility. The remainder of this facility has been repaid with cash on balance sheet at Altice International. Total annual interest savings pro forma for this transaction are €33 million, through a reduction of the average cost of debt.
• On September 11, 2020, Altice Europe and Next Private B.V. announced that a conditional agreement has been reached on a recommended public offer to be made by Next Private B.V., for all common shares A and all common shares B in the capital of Altice Europe, for €4.11 in cash per share (cum dividend). Altice Europe and Next Private continue to make good progress on the preparation for the offer and expect to be able to make a public announcement on the offer soon.
• On July 27, 2020, Altice Europe announced two agreements with Mediapro. Firstly, for the season 2020/21, Altice Europe will resell the UEFA rights to Mediapro in exchange for Altice Europe's right to resell Mediapro's TELEFOOT channel (including the main football matches for French Ligue 1 and Ligue 2). This will allow Mediapro to broadcast the UEFA Champions League and Europa League. Both the RMC Sport channel and Mediapro's TELEFOOT channel will broadcast the two competitions from October 2020. SFR will offer all of the football to its customers with RMC Sport, TELEFOOT, Canal+ and BeIN SPORTS. Secondly, for the seasons 2021/22, 2022/23 and 2023/24, Altice Europe entered into a distribution agreement with Mediapro to resell the TELEFOOT channel (including the main football matches for French Ligue 1 and Ligue 2) with a revenue share mechanism. This is expected to generate additional revenues for the Altice France residential segment. With this agreement, Altice Europe maintains the commitment to improve Altice TV cash flow trends, approaching break-even, while SFR customers will continue to benefit from the best football offer in France.
• On July 22, 2020, Altice International repaid $385 million (€342 million equivalent) 7.625% 2025 notes. In addition to this, the Group has bought back €105 million of debt at Altice International in Q3 2020, or €244 million of debt at Altice International since April 2020. In combination with the Altice Corporate Financing ("ACF") facility repayment, the Group has repaid €1.4 billion of debt since April 2020.

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Earnings release

• On July 2, 2020, the transfer of approximately 9% of the share capital of Altice France S.A. from Altice Europe to Altice France Holding S.A. was completed, in-line with the previously stated objective as part of the January 2020 Altice France refinancing.

Guidance

• For the full year 2020, the Group expects to:

1. Accelerate residential revenue growth in its key geographies;

1. Grow Altice Europe revenue;

• 1. Grow Altice Europe EBITDA.
• In the mid-term, the Group targets organic free cash flow3 of more than €1 billion.
• Further delever the Group, target leverage of 4.0x to 4.5x net debt to EBITDA
• The Group continues to assess the potential impacts of the COVID-19 pandemic carefully, especially the impacts on roaming and advertising.

3 Excluding spectrum and significant litigations paid and received

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Earnings release

Contacts - Altice Europe

Head of Investor Relations Altice Europe

Sam Wood: [phone] / [e-mail]

Head of Communications Altice Europe

Arthur Dreyfuss: [phone] / [e-mail]

Conference call details

The company will host a conference call and webcast today, November 19, 2020 at 6:00pm CET (5:00pm GMT, 12:00pm EST).

Dial-in Access telephone numbers:

Participant Toll Free Dial-In Number: [phone]

Participant International Dial-In Number: [phone]

Conference ID: 7690887

A live webcast of the presentation will be available on the following website: https://event.on24.com/wcc/r/2631118/05F1562E98E8A298F94071B9BF5EB615

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

http://altice.net/investor-relations

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