Tele Columbus AG, DE000TCAG172

Tele Columbus AG, DE000TCAG172

14.11.2016 - 07:04:43

Tele Columbus AG reports strong EBITDA growth in third quarter

PRESS RELEASE

Publication of third quarter and nine months results 2016:

Tele Columbus AG reports strong EBITDA growth in third quarter

- Revenues in the third quarter grew by 59.9% from EUR 73.9 million to EUR 118.2 million year on year due to the consolidation effect of primacom and pepcom; on a pro forma basis, revenues were up 3.1% in the quarter (4.1% for the nine months)

- Normalised EBITDA for the third quarter reached EUR 63.7 million, up 72.6% from EUR 36.9 million in the previous year's period; on a pro forma basis Normalised EBITDA increased strongly by 6.5% year on year (5.9% for the nine months)

- Normalised EBITDA margin of 53.9%, up 4.0ppt from the third quarter of FY2015

- Tele Columbus Group added more than 15k Internet RGUs in the quarter

- FY2016 targets with stable homes connected, mid-single digit percentage revenue growth versus FY2015 and high single digit percentage Normalised EBITDA growth year on year confirmed

- Capex for FY2016 expected at the lower end of 35% to 38% of revenues

Berlin, 14 November 2016. Tele Columbus AG ("Tele Columbus", "Company" or "the Group"), the third largest German cable operator, published its financials for the third quarter and first nine months of fiscal year 2016. The Group continued on its successful growth trajectory in the third quarter recording a strong 59.9% increase and a pro forma increase of 3.1% in revenues to EUR 118.2 million (Q3 FY2015: EUR 73.9 million). In the nine months, revenues grew pro forma 4.1% year on year. The company also increased the Normalised total operating performance which includes own work capitalized amongst others by 56.2% to EUR 127.9 million (Q3 FY2015: EUR 81.9 million). Normalised EBITDA for the quarter strongly grew to EUR 63.7 million, resulting in an increase of more than 72% and a pro forma increase of 6.5% year on year (Q3 FY2015: EUR 36.9 million) and on a nine month basis 5.9% year on year. This led to a Normalised EBITDA margin of 53.9%, up 4.0ppt from the third quarter of FY2015. The increase reflects Tele Columbus' successful operating performance as well as the positive effects arising from the integration of primacom and pepcom. In the reported period, Tele Columbus Group spent EUR 31.1 million on capital expenditures and - together with the EUR 47.8 million in the first half year - a total of 78.9 million in the first nine months (22.3% of revenues).

In the third quarter, the company showed a positive development of all relevant Key Performance Indicators (KPIs): As of 30 September 2016, Tele Columbus Group holds a stable basis of 3.6 million homes connected, approximately 5k up from June 2016, and is serving 2.42 million customers. With 1.58 RGUs (Revenue Generating Units) per subscriber (Q2 FY2016: 1.57x) the total number of RGUs increased by 19k to 3,823k (Q2 FY2016: 3,804k) which translates into 2.44 million Cable TV RGUs, 422k Premium TV RGUs and 463k Telephony RGUs.

Internet RGUs rose substantially to more than 500k which is an increase of 15k net additions quarter over quarter including the backlog of 3k from the second quarter. Meanwhile, close to 35% of Internet gross adds take 120 Mbit/s download speeds or more which is slightly up from the around 1/3rd reported with Q2 results. The total blended average revenues per user (ARPU) rose to EUR 16.3 per month in the third quarter 2016 (Q3 FY2015: EUR 14.9).

The Management Board of Tele Columbus reiterates its guidance for fiscal year 2016 expecting - stable homes connected of approximately 3.6m, a

- mid-single digit percentage revenue growth versus pro forma revenues of FY2015, a

- high single digit percentage Normalised EBITDA growth year on year versus pro forma FY2015

and specifies its guidance for - Capex to the lower end of the originally communicated 35% to 38% of revenues range.

"Even though we are heavily working on the integration of primacom and pepcom, we are well on track growing our business nicely by following our four key strategic initiatives", says Ronny Verhelst, CEO of Tele Columbus Group. "We will continue on that path consequently in order to take full advantage of the market chances arising." As key drivers for its mid-term development the company is pursuing the targets to generate organic growth, to make use of the smaller M&A opportunities in the German cable market, to exploit the synergies from the integration of the acquired companies and to expand the business customer activities. "This strategy is beginning to pay off - and given the strengths and opportunities of the company we are very much looking forward to further develop Tele Columbus on the basis of our prolonged management contracts" explains Frank Posnanski, the company's CFO.

On 14 July 2016, the Tele Columbus AG was honoured with the Corporate Finance Award by the Boersen-Zeitung, one of the most renowned national business media for capital markets in Germany. The prize was awarded in 5 categories for the strategically and financially most outstanding transactions in 2015. Tele Columbus was elected in the category small/mid caps due to its consequent and successful acquisition strategy and the professional financing of the transactions.

On 1 August 2016, Tele Columbus has achieved another important milestone in the integration of its acquired companies and launched a new Internet & Telephony product portfolio for pepcom Group. The new Internet & Telephony products, marketed under the brandname cablesurf, offer speeds between 20 Mbit/s and 400 Mbit/s and give access to Tele Columbus' free Community Wifi service. Together with the new Internet & Telephony product portfolio, Tele Columbus introduced attractive Triple Play-packages which include the necessary hardware.

On 19 August 2016, Tele Columbus launched its Community Wifi service in the Berlin Mercedes-Benz Arena offering its customers complimentary access to the Internet.

On 1 September 2016, Tele Columbus launched a new product portfolio for business customers offering Tele Columbus, primacom and pepcom customers harmonised commercial rates with bandwidths of 120, 200 and - depending on regional availability - 400 Mbit/s download speeds.

In September 2016, the group launched a new housing industry brand under the brand name "Tele Columbus Gruppe" serving as a strong umbrella for all housing industry activities in the transition phase until the introduction of a new company brand expected in 2017.

Recent developments

In October 2016, the group further intensified its close relations to the housing industry by reactivating its housing industry board in a new composition. The board is now chaired by Lutz Freitag, former president of the biggest German housing industry roof association GdW, and comprises 6 further renowned housing industry representatives.

Effective 1 October 2016, Roland Schleicher, formerly McKinsey Associate Partner and head of the McKinsey integration support team in 2015, joined as Chief Business Transformation Officer (CBTO).

On 11 October 2016, the Group announced that the contracts of CEO Ronny Verhelst and CFO Frank Posnanski were extended by three years to September 2019 and four years to September 2020 respectively.

On 13 October 2016, HL komm was re-certified for KV-Savenet 3.2 which allows the exchange of data via VPN between medical institutions.

On 14 October 2016, Tele Columbus AG has successfully concluded the repricing, consolidation and tenor extension of its EUR1.255 billion term loan facilities and amended certain other provisions in its EUR1.38 billion Facilities Agreement. The transaction became effective 31 October and results in interest cost savings of EUR6.3 million p.a. from November 2016.

On 28 October 2016, Tele Columbus Group announced that the Group has reached long-term agreements continuing the existing partnerships with some of the biggest German housing associations. Based on the new contracts signed in September 2016, Tele Columbus Group will provide services to 170,000 existing and new homes connected.

On 28 October 2016, HL komm in cooperation with City of Leipzig successfully launched a City-Wifi consisting of 47 access points.

On 8 November 2016, the management signed a balance of interest and social plan with the Group's workers' council and the different workers' councils of pepcom Group companies preparing the ground for full organizational integration of the pepcom group in 2017 and leading to significant expected personnel cost synergies from Q2 FY2017 onwards.

In the recent weeks, Tele Columbus Group successfully increased the number of connected homes ready for 400 Mbit/s to 880k and the number of Internet access points for the Community Wifi offering in the own networks from 50k to approximately 100k.

Additional information

Release of preliminary Q4/full year results FY2016: 28 March 2017 Release of Q1 results FY2017: 22 May 2017 Annual General Meeting: 9 June 2017

Summary table for Q3 FY2015 / Q3 FY2016 and selected preliminary pro formas Q3 FY2015 / Q3 FY2016 respectively:

EURm Q3 Q3 yoy % Pro forma Q3 yoy % FY2015[1] FY2016 Q3 FY2016 FY2015[2] Revenues 73.9 118.2 59.9 114.7 118.2 3.1

Normalised 36.9 63.7 72.6 59.8 63.7 6.5 EBITDA Norm. 49.9 53.9 4.0ppt 52.1 53.9 1.8ppt EBITDA margin, %

Capex 21.0 31.1 48.1 Capex / 28.4 26.3 (2.1ppt) Revenues, %

EUR per month Total 14.9 16.3 9.4 blended ARPU RGU as per end of period ('000) CATV 1,889 2,437 29.0 Internet 363 500 37.7 Telephony 352 463 31.5 Premium TV 397 422 6.3

About Tele Columbus

The SDAX listed Tele Columbus Group is Germany's third largest cable network operator. Via its origins - individual regional cable network operators that were merged into Tele Columbus - the company dates back to 1972. Today, about 3.6 million connected households in Germany are served by Tele Columbus, primacom, pepcom, Deutsche Telekabel, Martens und KMS with TV signals and, increasingly, digital broadcast packages, Internet and voice connections provided via high-performance broadband cable. As a national provider with a regional focus and a partner of the housing industry, the Group is present throughout its core markets Berlin, Brandenburg, Saxony, Saxony-Anhalt and Thuringia as well as in numerous key regions in western Germany. In tune with current demand trends, the company is upgrading its networks in a hybrid fibre-optic infrastructure for superfast Internet connections of up to several hundred megabits per second with the state-of-the-art Internet transmission standard DOCSIS 3.0. The broadband cable caters to the entire range of innovative media applications from analogous, digital and high-definition TV to high-speed Internet and voice connections to telemetry services, tenant portals and interactive services. Beyond merely transmitting signals, Tele Columbus uses its own product platform in order to actively increase the programme offering and to develop additional services. Via its company HL komm, Tele Columbus also delivers powerful connections and network services to business customers.

Disclaimer

This release may contain forward-looking statements. These statements reflect the Company's current knowledge and expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Such risks, uncertainties and assumptions may cause our actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this document.

This release contains references to certain non-GAAP financial measures, such as Normalized EBITDA and Capex, and operating measures, such as RGUs, ARPU, and Unique Subscribers calculations. These non-GAAP financial and operating measures should not be viewed in isolation as alternatives to measures of the Company's financial condition, results of operations or cash flows as presented in accordance with IFRS. The non-GAAP financial and operating measures used by the Company may differ from, and not be comparable to, similarly titled measures used by other companies.

In addition, this release contains pro forma financials. Our pro forma financials have been prepared for illustrative purposes only. They are based on the assumption that the acquisitions of primacom and pepcom had occurred on 1 January 2015. Because of their nature, our pro forma financials address a hypothetical situation and, therefore, do not represent our actual results of operations. It is not necessarily indicative of the results that should be expected in the future and investors should not put undue reliance on these pro forma financials.

All information contained in this release has been carefully prepared. However, no reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in this document and no liability whatsoever is accepted by the Company or any of its directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. The Company does not undertake any obligation to update or revise any information contained in this release, including forward-looking statements, whether as a result of new information, future events or otherwise.

[1] Q3 FY2015: 3M TC and 2M primacom [2] based on the assumption that the acquistions of primacom and pepcom had occurred on 1 January 2015 (pro forma)

Contact:

Hannes Lindhuber Phone +49 (30) 3388 4170 Fax +49 (30) 3388 9 1999 presse@telecolumbus.de www.telecolumbus.com

14.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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Language: English Company: Tele Columbus AG Goslarer Ufer 39 10589 Berlin Germany Phone: +49 (0)30 3388 4177 Fax: +49 (0)30 3388 9 1999 E-mail: Hannes.Lindhuber@telecolumbus.de Internet: www.telecolumbus.de ISIN: DE000TCAG172 WKN: TCAG17 Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service

520211 14.11.2016

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