Iliad 17Q4: targets maintained, to bid for 5G spectrum in Italy

Most targets were reiterated.

17Q4

• div 2017 68c
• acquired 50% stake in Sepia (housing Telecom Reunion Mayotte) in 2017

Targets fixed

• LT 25% market share BB
• grow FTTH subs 300-500k/yr from 2018
• 9m FTTH HP YE 2018, 20m FTTH HP YE 2022

Targets mobile

• add 2k sites in 2018
• 3G coverage 95% & 4G (all incl 1800 band) 90% YE 2018
• LT 25% market share mobile

Group targets

• EBITDA margin up in 2018, EBITDA margin FR 40% by 2020
• capex FR 2018 EUR 1.4-1.5b (excl. spectrum & new Freebox launch)
• FCF (EBITDA - capex) FR >EUR 1b from 2020 from lower national roaming charges (2G & 3G with Orange, expires YE 2020), improved mobile subs mix, nationwide mobile network by 2020

"Almost ready for launch in Italy"

• in place: infra (10k km backbone) & interconnections, offers & mkt plan, distr. network, full team, testing for QoS
• launch summer 2018
• to bid in 5G auction 2018 (700 & 3600/3800 bands)
• investments Italy 2017: € 314m (o/w 50 for spectrum from Wind Tre, 220 for 1800 licenses renewal until 2029)
• target: EBITDA break-even at <10 market="" share="" span="">

FTTH strategy

• virtuous model, first benefits from 18H1
• medium dense areas (co-finance model) capex < 1000 EUR/home

Macro

• French corporate tax rate (33%) to 28% in 2020, 25% in 2022