Telenet : Full Year 2020 Results

The enclosed information constitutes regulated information as defined in the Royal Decree of 14 November 2007 regarding the duties of issuers of financial instruments which have been admitted for trading on a regulated market. Inside information.

• Robust operational performance in Q4 2020 with 10,600 net new broadband customers, marking our best quarterly achievement since Q4 2015.
• FY 2020 outlook achieved on all financial metrics, confirming resilience of our business in light of the COVID-19 pandemic, notwithstanding impact on certain parts of our business.
• Anticipating a return to growth in 2021 driven by a recovery in our other revenue and robust subscription revenue, together with tight cost control. Gross dividend of €1.3750 per share proposed to the April 2021 AGM as part of our dividend floor.

Mechelen, February 11, 2021 - Telenet Group Holding NV ('Telenet' or the 'Company') (Euronext Brussels: TNET) announces its unaudited consolidated results under International Financial Reporting Standards as adopted by the European Union ('EU IFRS') for the year ended December 31, 2020.

HIGHLIGHTS

• Continued commercial momentum in Q4 2020 notwithstanding a competitive market, having added 20,500 net new FMC customers to our 'WIGO', 'YUGO' and 'KLIK' bundles, 17,300 net new mobile postpaid subscribers and 10,600 net new broadband internet RGUs.
• The fixed monthly ARPU per customer relationship reached €58.4 and €58.7 in 2020 and Q4 2020, respectively, up 1% yoy for both periods, and driven by a higher share of multiple-play and higher-tier broadband customers and the benefit of certain price adjustments.
• FY 2020 and Q4 2020 revenue of €2,575.2 million and €665.1 million, broadly stable and -1% yoy on a reported basis, respectively, and including the impacts of our acquisition of De Vijver Media (fully consolidated since June 3, 2019) and the divestiture of our former Luxembourg cable business (deconsolidated as of April 1, 2020). On a rebased⁽¹⁾ basis, our FY 2020 and Q4 2020 top line decreased almost 2% and nearly 1% yoy, respectively, due to significantly lower other revenue following the effects of the COVID-19 pandemic. Excluding other revenue, our rebased revenue in 2020 was broadly stable yoy, in line with our FY 2020 outlook, and up just over 1% in Q4 2020 versus Q4 last year..
• Net profit of €338.5 million in FY 2020 (Q4 2020: €40.4 million, -56% yoy), +44% yoy, driven by (i) significantly lower net finance expense in the period, (ii) lower income tax expense and (iii) a €27.5 million gain on the disposal of assets related to a joint venture.
• FY 2020 and Q4 2020 Adjusted EBITDA⁽²⁾ of €1,378.0 million and €336.9 million, broadly stable and -4% yoy, respectively, including the aforementioned inorganic impacts and changes to the IFRS accounting treatment of certain content-related costs for our premium entertainment packages and the Belgian football broadcasting rights because of changes related to the underlying contracts as of Q3 2020. On a rebased basis, our FY 2020 Adjusted EBITDA increased modestly by almost 1% yoy, versus our broadly stable outlook, and was up nearly 1% yoy in Q4 2020.
• Accrued capital expenditures⁽³⁾ of €597.0 million for FY 2020 (Q4 2020: €169.5 million), up nearly 2% versus last year and approximately 23% of revenue. Our FY 2020 accrued capital expenditures included (i) the aforementioned inorganic impacts (ii) €39.9 million higher lease-related capital additions and (iii) the recognition of certain Belgian Jupiler Pro League football broadcasting rights in Q3 2020. Excluding the recognition of the football broadcasting rights and lease-related capital additions in both periods, consistent with the basis of our 2018-2021 Operating Free Cash Flow CAGR guidance, our accrued capital expenditures in 2020 decreased modestly by 1% yoy to around 21% of revenue.
• Operating Free Cash Flow⁽⁴⁾ of €787.0 million for FY 2020 (Q4 2020: €167.4 million), -4% yoy, mainly driven by higher Iease-related capital additions in Q4 2020. On a rebased basis and excluding the recognition of football broadcasting rights and the impact of lease-related capital additions on our accrued capital expenditures, our Operating Free Cash Flow was up almost 3% versus 2019, outperforming our FY 2020 outlook of between 1-2%.
• Net cash from operating activities, net cash used in investing activities and net cash used in financing activities of €1,057.4 million, €475.6 million and €601.2 million, respectively, for FY 2020. Our Adjusted Free Cash Flow⁽⁵⁾ grew 6% yoy in 2020 to €415.8 million with a robust €157.3 million contribution in Q4 2020. The strong growth in our Adjusted Free Cash Flow was driven by both lower cash taxes and lower cash interest payments following certain refinancings and included a €3.9 million negative contribution from our vendor financing program.
• In 2021, we expect both our revenue and Adjusted EBITDA^(b) to return back to growth with a targeted rebased^(a) growth of up to 1% and between 1-2%, respectively. We will also deliver healthy Adjusted Free Cash Flow^{(b, d)} between €420.0 and €440.0 million for the FY 2021 despite a modest contraction in rebased Operating Free Cash Flow^(b,c) in 2021 of around 1% on the back of higher targeted investments as detailed in our outlook section. With that, we still expect to deliver on the lower end of our 2018-2021 Operating Free Cash Flow^{(b, c)} CAGR of between 6.5% to 8.0%.
• In line with our tightened shareholder remuneration policy, as communicated at the end of October last year, the board of directors will propose to the April 2021 Annual Shareholders' Meeting to approve a gross dividend of €1.3750 per share. Once approved, this dividend will be paid in early May and complements the intermediate dividend of the same size, which was paid in December 2020. With that, we will have returned a total gross dividend of €2.75 per share to shareholders (€300.1 million in aggregate), which represents an increase of 47% compared to last year.

Press releaseEarnings Release Q4 2020 ENG_vFINAL.pdf - 374 KB