Outlook

For the first nine months of 2018, our rebased revenue modestly contracted versus the prior year period as a result of the aforementioned competitive and regulatory headwinds, including substantially lower handset-related revenue from lower sales volumes. Relative to the first nine months of 2018, we anticipate our rebased revenue growth to modestly improve in Q4 driven by a growing contribution from our wholesale and small business segments and the benefit from the July 2018 rate adjustment, partially offset by continued competitive and regulatory headwinds, including a 17% reduction in the cable wholesale rate as of August 1,2018. For the full year 2018, we continue to anticipate stable revenue growth on a rebased basis.

In 2018, our Adjusted EBITDA(a) is being positively influenced by the accelerated synergies from the BASE acquisition, including lower MVNO-related costs as we substantially completed the onboarding of our Full MVNO subscribers to the Telenet network at the end of Q1 2018. Combined with continued rigorous cost control and focus on our indirect spend levels, we achieved a solid 7% rebased Adjusted EBITDA growth for the first nine months of 2018. As a result of the faster-than-expected execution of our synergy roadmap, we will be capturing substantially all planned cost-related synergies in 2018 already as opposed to our initial outlook. This will result into higher Adjusted EBITDA(a) growth on a rebased basis for 2018, yet resulting into a tougher comparison base heading into next year as we will have captured the vast majority of our cost synergies this year already while having lost a MVNO contract as of early 2019. As a result, we now expect our Adjusted EBITDA(a) to grow between 8.0-8.5% for the full year 2018 on a rebased basis as compared to our initial outlook of 7-8%. As a result, our medium-term Adjusted EBITDA(a) outlook over the 2015-2018 is now expected to reach the mid to upper end of our 6-7% range. 

For our accrued capital expenditures, 2018 will be the final full year in our investment cycle characterized by relatively high investments on the back of (i) our five-year €500.0 million "Grote Netwerf" HFC network upgrade program, (ii) our €250.0 million investment in the modernization of our acquired mobile network, (iii) a full-year inclusion of SFR Belux, including investments to improve the customer experience in Brussels and Wallonia, and (iv) the start of our IT platform upgrade plan, leading to additional innovative digital capabilities and cost opportunities going forward. We continue to target an accrued capital expenditures to revenue ratio of around 26% for the full year 2018 and we are committed to decreasing our accrued capital expenditures as of 2019 (excluding the potential recognition of football broadcasting rights and mobile spectrum licenses.

For the first nine months of 2018, we generated €321.9 million of Adjusted Free Cash Flow. For the full year 2018, we now see our Adjusted Free Cash Flow(c) at the upper end of our €400.0-420.0 million range despite certain anticipated payments on our mobile spectrum license. Growth in our Adjusted Free Cash Flow continues to be driven by (i) robust Adjusted EBITDA(a) growth as mentioned above, partially offset by higher capital expenditures and payments on mobile spectrum licenses, (ii) lower cash interest expenses as a result of the December 2017 refinancing and (iii) continued growth in our vendor financing platform through which we are able to extend payment terms for certain strategic suppliers.

(a) A reconciliation of our Adjusted EBITDA guidance for 2018, and our Adjusted EBITDA CAGR for 2015-2018, to a EU IFRS measure is not provided as not all elements of the reconciliation are projected as part of our forecasting  process, as certain items may vary significantly from one period to another.

(b) Excluding the recognition of football broadcasting rights and mobile spectrum licenses.

(c) A reconciliation of our Adjusted Free Cash Flow guidance for 2018 to a EU IFRS measure is not provided as not all elements of the reconciliation are projected as part of our forecasting process, as certain items may vary significantly from one period to another.

(d) Assuming certain payments are made on our mobile spectrum licenses in Q4 2018 and the tax payment on our 2017 tax return (excluding the tax prepayment of Q4 2017) will not occur until early 2019.