1H 2015 Strategy & Results Presentation. August 31, 2015

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1H 2015 Strategy & Results Presentation

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This document has been prepared by Iliad S.A. (the "Company”) and is being furnished to you solely for your information

and personal use.

This presentation includes only summary information and does not purport to be comprehensive. 

The information contained in this presentation has not been subject to independent verification.

No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the

fairness, accuracy, completeness or correctness of the information or opinions contained herein.

None of Iliad S.A., its affiliates or its advisors, nor any representatives of such persons, shall have any liability whatsoever (in

negligence or otherwise) for any loss arising from any use of this document or its contents or otherwise arising in connection

with this document or any other information or material discussed.

This presentation contains forward-looking statements relating to the business, financial performance and results of Iliad

S.A. These statements are based on current beliefs, expectations or assumptions and involve unknown risks and

uncertainties that could cause actual results, performance or events to differ materially from those described in such

statements. Factors that could cause such differences in actual results, performance or events include changes in demand

and technology, as well as the ability of Iliad S.A. to effectively implement its strategy.

Any forward-looking statements contained in this presentation speak only as of the date of this presentation. Iliad S.A.

expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this

presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are

based unless so required by applicable law.

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1H 2015 Highlights

A unique and robust long-term model

Broadband

Mobile

Financials

A solid performance

delivered

Clear NGN

commitments

France’s leading

recruiter for 14 quarters

in a row

A strong 4G player

Brisk growth effectively

managed, resulting in a

strong financial

performance

Net adds 123k Net-add market share* 36% Net adds 820k Market share 16% 4G population coverage > 50% Revenues +7% EBITDA up 16% to €725m Mobile services revenues +23% >20% of subscribers on VDSL2 * Company estimates

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June 2014

Subscriber KPIs

- Broadband

5,735,000

5,868,000

5,991,000

- Mobile

9,095,000

10,105,000 

10,925,000 

Total number of subscribers

14,830,000

15,973,000 

16,916,000 

Other Broadband KPIs (end of period)

Broadband ARPU (incl. promos)

€35.80

€35.10

€34.50

Freebox Revolution ARPU (excl. promos)

> €38.00

> €38.00

> €38.00

Another Strong Commercial Performance

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Broadband Business

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Excellent 1H for the broadband business,

despite a fiercely competitive landscape

Successful launch of the Freebox mini 4K

that did not impair the success of the

premium offer

Dilutive effect of promotional offerings

leading to a Group ARPU of €34.50

Iliad market share –

June 2015

Iliad 1H 2015 net-add

market share*

23%

36%

Broadband: Strong Momentum

A growing subscriber base in a competitive environment

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Quality/Customer Experience

Ever more attentive to our subscribers

Ongoing investment in customer care 400 jobs created in 1H 2015 in France

Some 6,500 people dedicated to assistance services

A streamlined nationwide distribution network

48 Free Centers – covering major French cities

Some 1,600 SIM card dispensers set up in stores across France – available in the Maison de la Presse and Mag Presse store networks and Free Centers

Innovative services

Face-to-Free service: a customized assistance service via webcam enhancing the customer experience and simplifying communication with the Freehelper

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Freebox mini 4K – The Best Entry-price Product

An original offer to replace the Freebox Crystal for €29.99/month

ADSL2+/VDSL2/FTTH – WiFi up to 450 Mbps Compact format: 11 x 15 x 3.5 cm

4K – Ultra High Definition Player

Powered by Android TVTM _{- Google}TM _{Cast ready}

Calls to landlines in 106 countries

More than 200 TV channels included, o/w 50 HD channels Freebox Replay

Voice search remote control

Hotline & Home technical assistance

Multi TV offer

Option of receiving TV services on a second TV from a Freebox Revolution for €1.99/month

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Straightforward Offers and a Rational Market Approach

2 straightforward offers available in c.90% of France – compatible with all technologies

ADSL2+, VDSL2 and FTTH up to 1Gbps*.

Differentiating through innovation & simplicity:

Freebox

mini 4K

– The most innovative entry-price product

Ø 

First triple-play box in the world with 4K and Android TV

TM

Ø 

Only €29.99/month

A well-established maverick positioning in a highly competitive market

Freebox

Revolution

- Leading innovation almost 5 years after its launch

Ø 

Most advanced triple-play box including Blu-ray

TM

_{, NAS server}

with a hard drive, FreePlugs, gamepad, calls to mobiles, etc.

A selective and profitable promotion policy to attract price-sensitive subscribers

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ADSL 2+: Leading operator in terms of unbundling footprint

More than 7,500 unbundled Central Offices

Unbundling footprint covering of 87% of the French population

More than 1,500 new unbundled Central Offices over the last 12 months

Pushing the Next-Generation Network Experience

* Available for subscribers who have a Freebox Revolution or a Freebox mini 4K and an eligible telephone line

Providing better bandwidth for subscribers

Ø  _{More than 20% of our subscribers now have access to higher Internet speeds}

through VDSL2

Ø  _{Higher Internet speeds: 100Mbps* download and 40Mbps* upload}

Ø  _{All of subscriber connection nodes now have VDSL2 equipment}

Increasing our FTTH commitments

Ø  Dense areas: 230 optical nodes with a potential coverage of more than 3.4m FTTH plugs – migration path improving

Ø  Non-dense areas: Stepping up co-financing arrangements with Orange – agreement to cover 4.5m homes – 700k plugs available as of June 2015

Ø  _{Ready to accelerate subscriber migrations}

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Mobile Business

12 3,600 5,205 6,795 8,040 9,095 10,105 10,925 1H 2012 2H 2012 1H 2013 2H 2013 1H 2014 2H 2014 1H 2015

16%

Mobile: France’s Top Net Recruiter for 14 Quarters in a Row

Undisputed leader for recruitments

* Total subscribers excl. MtoM Source: Operators & ARCEP

Free market share* – June 2015

16% market share at end-June 2015 with nearly 11m

subscribers

Ø 

Leading recruiter since launch in January 2012

– 820k net adds during 1H 2015 whereas the

overall French market lost 183k subscribers*

Nb. of subscribers – 1H 2012 - 1H 2015

Positive changes in the subscriber mix

Ø 

Improved subscriber mix with more new

subscribers taking up the €19.99 plan

Ø 

First subscribers moving up from the €2 plan to

the €19.99 plan observed in 1H 2015

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An Enhanced Offer for our Subscribers

1

st

_{no-commitment mobile plan including roaming in all EU countries}

Unlimited plan (€19.99) works for 35 days/year per country at no extra charge (SMS/MMS, calls & 3G Internet with 3GB) across the EU as well as in Canada and Israel

374 price reductions for incoming and outgoing communications (calls, SMS, MMS & data) Unlimited messages from Europe and French overseas departments to French mobiles

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Focusing on Mobile Subscriber Satisfaction

Top-mark satisfaction rate

Best recommendation rating

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3G

coverage rate x2 in 3 years to around 80% of the French population at end-June 2015

More than 2,100 3G sites opened over the last 12 months 5,266 sites in service at end-June 2015

4G

> 50% population coverage

c.4,000 sites: No.3 in France

Number of Free Mobile’s 4G sites:

Strong momentum for 4G coverage in 2015

Migration from 3G to 4G: mobile network designed from the outset to use the latest technologies (an all-IP NGN) Almost 1,900 new 4G sites opened in 1H 2015

Around 60% population coverage expected by end-2015

Building a High-Quality & High-Value Network

824

2,099

_3,991

Dec. 2013 Dec. 2014 June 2015

x1.7 1,411

_x1.9

June 2014

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Rapidly increasing coverage since 2014

4G Reality

Free’s 4G subscriber base ramped up

2.4m 4G subscribers, i.e. c.22% of the subscriber base

Strong increase in data usage: average of 2.2GB monthly data consumption per user

Offering strong bandwidth vs. benchmark

Source: nPerf 2Q France mobile 4G Internet connection barometer

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A balanced and improving portfolio of frequencies

In December 2014 Iliad was granted 5MHz in the 1,800MHz frequency band

From May 2016 the 1,800MHz frequency portfolio should further increase to 15MHz (following the ARCEP decision on the refarming process on July 30, 2015)

A confirmed interest in the upcoming 700MHz auction

A clear path towards independency

A 3G network covering c.80% of the French population as of end-June and on-track to reach 90% population coverage by end-2017 – in accordance with the terms of the Group’s license

Discussions under way with Orange (overseen by the regulator) on the gradual phase out of national 3G roaming A topic that needs to be discussed and assessed in light of:

Ø  _{The RAN-Sharing agreement in force between NC-SFR and Bouygues Telecom}

Ø  _{The 4G roaming provided by Bouygues Telecom to NC-SFR}

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Financial Performance

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Strong Financial Performance

* Excl. Other operating income and expense

Double-digit growth in profitability

Group revenues

€2,160m

+7%

EBITDA

€725m

+16%

EBIT*

€330m

+17%

Profit for the period

€163m

+16%

Cash from operations

before tax & WCR

€721m

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Group revenues

(€ millions)

Broadband revenues

Revenue Growth on the Back of Solid Fundamentals

Mobile revenues

Another sharp rise in Mobile

revenues, up by 18%

+

820k new subscribers

+

Higher-value subscriber mix

driving services revenue up

by 23%

7% growth in Group revenues

during 1H 2015 (8% excl.

handsets)

+

High market share gains

+

Mobile: more than 40% of

Group revenues

1H 2014 1H 2015 1,279

1,285

+0.5% 1H 2014 1H 2015 746

880

+18.1% 1H 2014 1H 2015 2,020

2,160

+6.9%

Strong top line growth, with revenues reaching a record high

of c.€2.2bn

Ongoing growth for Broadband

activities

+

123k new subscribers attracted

by the Group’s offers

-

Dilutive effect of promotional

offerings & pricing environment

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Group Profit

(€ millions)

Group EBITDA

Significant Improvement in Profitability

Group EBIT

Robust Group EBITDA and a

wider EBITDA margin (+270 bps)

+ Fast-growing Mobile business leading to better coverage and a significant improvement in the Mobile EBITDA margin

+ FTTH network rollout & scale effect on fixed costs base for both Broadband and Mobile

-  Dilutive impact of enhanced commercial offerings

A 17% year-on-year

increase in Group EBIT

+ Driven by EBITDA growth -  Dilutive contribution of Mobile -  Higher D&A due to new assets

(network, 4G license)

A 16% increase

in Group profit

+ In line with Group EBIT -  Negative impact of increase in corporate tax rate

1H 2014 1H 2015 624

725

+16.2% 1H 2014 1H 2015 281

330

+17.2% 1H 2014 1H 2015 140

163

-1 30.9% 33.6% +16.4%

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Strong Investments Backed by Robust FCF

(€ millions) Group cash from ops before tax & WCR Total CAPEX FCF

721

(613)

(80)

Group WCR Other (interest, non-rec.)

(48)

(67)

(47)

Operating FCF

675

Taxes 1H 2014 1H 2015 615 721 1H 2013 599 +3% 1H 2012 422 +42% +17%

Strong growth in Group cash from operations before tax & WCR

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1,064

1,023

1,084

1,162

1.16x

_0.85x

0.84x

0.84x

2012

2013

2014

1H 2015

Net debt (€m)

Group leverage

A Solid Financial Profile

A unique positioning

Recurring subscription-based revenues

Critical mass reached in the Mobile business, with 16% market share A proven track record of growing top line and profitability

An entrepreneurship-owned company

A very solid financial structure

Total equity of €2.5bn

Leverage kept below 1x EBITDA Strong liquidity position (> €1.5bn)

24 1,250 2,519 3,122 5,266 40% 50% 67% 80% 1H 2012 1H 2013 1H 2014 1H 2015

Nb. of 3G sites Mobile coverage (% of population)

3,600 6,795 9,095 10,925 5,147 5,518 5,735 5,991 8,747 12,313 14,830 16,916 1H 2012 1H 2013 1H 2014 1H 2015 Mobile Broadband Nb. of Subscribers (‘000s) 417 586 624 725 28.9% 32.0% 30.9% 33.6% 1H 2012 1H 2013 1H 2014 1H 2015 EBITDA (€m) Margin (%) Revenues (€m) 320 601 746 880 1,130 1,235 1,279 1,285 1,444 1,829 2,020 2,160 1H 2012 1H 2013 1H 2014 1H 2015 Mobile Broadband

Delivering Profitable Growth

CAGR: +24.6% CAGR: +14.4%

* Incl. intersegment revenues

*

* *

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Operational and Financial Outlook

Broadband

Achieve a 25% share of the landline broadband market in the long term  Step up the pace of FTTH rollouts

Mobile

Deploy more than 1,500 sites in 2015

Reach a 4G coverage rate of around 60% of the French population by end-2015, 4 years before our coverage commitment deadline

Achieve a 25% market share in the long term

Group

Achieve more than 10% growth in consolidated EBITDA in 2015 2H 2015 CAPEX in line with 1H 2015