Altice Europe N.V. Q2 2018 Results August 2, 2018
Disclaimer FORWARD-LOOKING STATEMENTS Certain statements in this presentation 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 presentation, 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 var iations 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 presentation 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. FINANCIAL MEASURES This presentation contains measures and ratios (the “Non - GAAP Measures”), including Adjusted EBITDA, Capital Expenditure (“Capex”) and Operating F ree 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 acce pted 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 f low s 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 “Con sol idated 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 compl y 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. 2
Altice Europe Core Strategy Starting to Pay Three pillars to deliver growth and enhanced profitability 1 2 3 Invest in best- Focus on Leverage in-class customer unique content proprietary experience assets infrastructure Fiber 4G+/5G Revenue EBITDA margin OpFCF growth expansion generation 3
Q2 2018 Strong Achievements Continued execution on Altice Europe turnaround and deleveraging 1 Differentiated strategy focused on investment in fiber and content continues paying off 2 Operational turnaround progressing: continued positive subscriber momentum in France and Portugal 3 Creation of one of the largest European towerCos 4 Strengthening of diversified capital structure through successful asset disposals and refinancing activity 5 Separation of Altice USA from Altice N.V. (renamed Altice Europe N.V.) effective 4
Accelerated Positive Subscriber Momentum Better processes improving customer experience and resulting in lower churn Altice France Q2-18 B2C trends Altice Portugal Q2-18 B2C trends YoY YoY Fiber net adds 1 +46k +56k Fiber net adds +60% +40% Fiber churn 16% Fiber churn 7% -25% Lowest level -20% Best-in-class ever achieved Postpaid mobile net adds +211k Postpaid mobile net adds +38k +520% +125% Postpaid mobile churn (YoY) 18% Postpaid mobile churn 8% -15% -20% Lowest level Best-in-class ever achieved 1. FTTH/FTTB customers 5
Creation of One of the Largest European TowerCos Building on long-term partnerships to invest in leading infrastructure Transactions summary 1 TowerCo highlights • Creates one of the largest European Towercos • c.€2.5bn total cash consideration • Incremental EBITDA generated from mutualizing the towers ✓ Unique portfolio of sites in strategic locations ✓ New tenants to come on existing sites €3.6bn €660m Enterprise value $170m ✓ New sites to be built 2017 pro forma 18.9x 18.0x 18.3x EBITDA multiple ✓ Support for 4G/5G networks deployment # sites 10,198 2,961 1,049 Altice pro forma 50.01% 25.00% 0.00% ownership 1. In France, the transaction will be subject to customary conditions precedent for this type of transactions, with closing of the transaction (subject to regulatory approvals) expected to occur in Q4 2018; in Portugal and Dominican Republic the transactions are expected to close during Q3 2018 and are subject to the effective demerger and customary closing conditions 6
Owner of The Leading Fixed Infrastructure in All Geographies Very high-speed footprint across Altice Europe Fiber homes passed 1 (m) N ° 1 N ° 1 N ° 1 11.6 4.3 4.2 10.3 1.8 1.8 9.8 2.1 6.8 2.8 8.5 1.5 4.7 6.5 4.7 0.0 0.0 0.3 Proprietary Rented 1. FTTH/FTTB homes passed as of Q2-18 for Altice Europe, latest data available for competitors 7
Altice Europe Successfully Extending its Maturity Profile Limited near term maturities following very successful refinancing activity Altice maturity profile Altice cumulative % of debt matured €8Bn of Debt Pushed to 2026 & Beyond 78% 53% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Q2-17 Q2-18 Q2-17 Q2-18 In Q2-17, 78% of the debt was maturing by 2025; Maintain a long-term capital structure with limited near-term maturities Today only 53% is maturing by 2025 Note: Q2-17 and Q2-18 PF latest refinancing, at constant foreign exchange rates, and excluding for both Q2-17 and Q2-18 pro forma amounts drawn on RCF, HOT notes and Green Data Center debt 8
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