Investment Proposition




Having delivered a solid financial performance in the first quarter, we are on track to deliver against our FY 2021 objectives as presented in February 2021. This implies a return to topline growth in 2021 on a rebased basis, including a partial recovery from the COVID-19 pandemic which mainly affected our other revenue in 2020. The recovery in our other revenue will to some extent be offset by a reduction in the regulated cable access fee, which became effective as of July 1, 2020, and a continued pressure on our interconnect revenue given the switch to data messaging. Elsewhere, our rebased revenue performance will be driven by growth in our B2B business and a modest increase in our subscription revenue from customer uptiering and certain price adjustments. For the full year 2021, we continue to expect our rebased revenue to expand up to 1% compared to 2020. Given the COVID-related impact on our revenue profile in Q2 last year, we expect a strong recovery in Q2 2021 whereas Q1 still showed a modest 1% topline decline.

Our rebased Adjusted EBITDA grew nearly 4% in the first quarter compared to Q1 2020. This puts us well on track to deliver a healthy increase between 1 and 2% in 2021 on a rebased basis. As mentioned earlier, we do anticipate a reversed trend in our Adjusted EBITDA in the second quarter as the prior year period reflected significantly lower programming costs, due to the accelerated write-down of broadcasting rights in Q1 2020 as a result of the global COVID-19 pandemic, as well as much lower sales and marketing expenses in Q2 2020.

On a rebased basis, our Operating Free Cash Flow was up 15% in the first quarter. In line with the aforementioned phasing in our Adjusted EBITDA in Q2 2021, we expect a similar reversed trend in our Operating Free Cash Flow. As a result of the COVID-19 pandemic, our Q2 2020 accrued capital expenditures substantially decreased to around 20% of revenue. We do therefore expect much higher investments in the second quarter, relative to the prior year period, negatively impacting our Operating Free Cash Flow. For the full year 2021, we continue to expect our Operating Free Cash Flow to modestly decrease by around 1% on a rebased basis. With that, we still expect to deliver on the lower end of our 2018-2021 Operating Free Cash Flow CAGR of between 6.5% to 8.0%.

Our Adjusted Free Cash Flow in the first quarter reached €124.0 million, which puts us well on track to deliver on our FY 2021 guidance despite an expected lower Adjusted Free Cash Flow performance in the second quarter as a result of both our annual cash tax payment and a lower Operating Free Cash Flow performance. Despite the anticipated modest contraction in our Operating Free Cash Flow in 2021, we are confident in our ability to generate a robust Adjusted Free Cash Flow between €420.0 and €440.0 million. Growth in our Adjusted Free Cash Flow will amongst other factors be driven by both lower cash taxes and lower cash interest expenses, while our vendor financing program is expected to remain broadly stable compared to end-2020.


OUTLOOK FY 2018 - 2021 FY 2018 rebased(a) As presented on December 4, 2018 As reaffirmed on February 11, 2021
Operating Free Cash Flow CAGR (rebased)(b, c) €674.7 million Between 6.5% - 8.0% Lower end of the 6.5% - 8.0% range


OUTLOOK FY 2021 FY 2020 Rebased(a) As presented on February 11, 2021
Revenue growth (rebased)(d) €2,573.2 million Up to 1%
Adjusted EBITDA growth (rebased) (b) €1,346.5 million Between 1-2%
Operating Free Cash Flow growth (rebased) (b, c) €825.8 million Around -1%
Adjusted Free Cash Flow (b, e) - € 420.0 - 440.0 million range

(a) For purposes of calculating rebased growth rates on a comparable basis for the periods shown above, we have adjusted our historical revenue and Adjusted EBITDA to reflect the impact of the following transactions to the same extent revenue and adjusted EBITDA related to these transactions is included in our current results: (i) exclude the revenue and Adjusted EBITDA of our former Luxembourg cable subsidiary Coditel S.à r.l. (deconsolidated as of April 1, 2020) and (ii) reflect changes related to the IFRS accounting outcome of certain content rights agreements entered into during the third quarter of 2020.

(b) Quantitative reconciliations to net profit (including net profit growth rates) and cash flows from operating activities for our Adjusted EBITDA, Operating Free Cash Flow and Adjusted Free Cash Flow guidance cannot be provided without unreasonable efforts as we do not forecast (i) certain non-cash charges including depreciation and amortization and impairment, restructuring and other operating items included in net profit, nor (ii) specific changes in working capital that impact cash flows from operating activities. The items we do not forecast may vary significantly from period to period.

(c) Excluding the recognition of the capitalized football broadcasting rights and mobile spectrum licenses and excluding the impact from lease-related capital additions on our accrued capital expenditures.

(d) Relative to our reported revenue for the full year 2020, our revenue growth for the full year 2021 would be equivalent to up to 1%.

(e) Assuming certain payments are made for the temporary prolongation of our current 2G and 3G mobile spectrum licenses in 2021, yet excluding payments on any future spectrum licenses as part of the upcoming multiband auction, and assuming the tax payment on our 2020 tax return will not occur until early 2022.