Com Hem Reports Third Quarter Results 2016

Regulatory News:

Com Hem (STO:COMH):

Third quarter summary

· Revenue totaled SEK 1,309m (1,255 in Q3 2015), up 4.3%.

· Net result for the period more than doubled and amounted to SEK 106m (51).

· Earnings per share more than doubled to SEK 0.56 (0.25).

· Underlying EBITDA increased by 8.7% to SEK 642m (590).

· Operating profit (EBIT) increased by 18.7% to SEK 227m (192).

· Number of unique consumer subscribers rose by 8,000 to record high 934,000.

· Consumer churn rate at a record low of 12.7%, 0.4p.p. decrease from Q2 2016.

· Record high consumer ARPU of 371 SEK (369 Q2 2016).

· Continued strong volume growth in broadband, up 11,000 to 689,000 RGUs.

· Digital-TV RGU’s increased by 4,000 and 7,000 TiVo customers were added (penetration rate of 37%).

· Change in 2016 Capex guidance. We lower Capex guidance for 2016 to a range of SEK 850-950m (including Boxer in Q4) compared to SEK 1.0-1.1bn previously as the core business now runs at a sustainably lower capex level.

· Significantly increase the dividend in 2017: Following consistently strong cash generation, the Board intends to propose a change to the mix of the shareholder remuneration to increase the cash dividend from SEK 1.50 per share to SEK 4.00 per share to be paid out semi-annually in May and October, 2017. Alongside the cash dividend we will also continue to do buybacks from time to time.

· Boxer brings 500,000 new DTT-customers, primarily in SDUs, and is expected to add SEK 300m in Underlying EBITDA during the first 12 months after the acquisition which closed on September 30.

Comment from Anders Nilsson, CEO, Com Hem

The best quarter ever

The third quarter of 2016 was an eventful and exciting period for Com Hem. We closed the acquisition of Boxer, adding half a million customers into our new growth market. The seasonally strong third quarter produced record profitability in our existing businesses where we delivered records in revenue and Underlying EBITDA, and strong operating free cash flow. We are now seeing the positive effects of the rebranding campaign as we added 8,000 additional subscribers in the quarter while consumer ARPU reached a record high of SEK 371 and consumer churn fell to a record low of 12.7%. Com Hem is in a great position with an established leading brand in the MDU market and, with the Boxer acquisition under our belt, a great opportunity to expand into the SDU market to become a true national operator in broadband and TV-services.

Continued progress in customer satisfaction along with positive rebranding effects led to the consumer customer base growing by 8,000 and a continued strong broadband growth of 11,000 RGUs. Demand for our DTV products was strong in the quarter with RGUs increasing by 4,000. Our TiVo base grew by 7,000 customers, now at 37% of our total DTV base. The number of telephony RGUs dropped by 7,000.

Consumer ARPU reached a record high of SEK 371 compared to 369 SEK in Q2, as a larger portion of customers now subscribe to higher tier products. Consumer churn decreased by 0.4 p.p. compared to Q2 and was 12.7% in the quarter, now 0.2 p.p. lower than the previous record low level of 12.9% in Q3 and Q4 2015. Com Hem’s fibreCoax infrastructure continues to deliver the fastest average download speed amongst our peers according to external tests by Bredbandskollen, Netflix Speed Index and Google Video Index. Within B2B our focus remains on growing the high-margin On- Net business, while we see a structural decline in the OffNet legacy fixed telco business. During the quarter we added 1,000 new OnNet B2B customers, and compared to last year the OnNet B2B customer base has grown by almost 30% and OnNet revenues by 55%.

Revenue grew by 4.3% compared to the third quarter 2015, driven by a 6.0% growth in our consumer business and a 1.0% growth in B2B, partly offset by a decline of 0.9% in the network operator business. Underlying EBITDA grew by 8.7% to a record high of SEK 642m, with an Underlying EBITDA margin of 49.0%. Capex amounted to SEK 180m in the quarter compared to SEK 219m in the third quarter 2015. We believe that we have optimized the core business to a point where we can run a lean operation and deliver steady growth at a sustainably lower capex level. We therefore lower our capex guidance for the full year 2016 to SEK 850-950m from SEK 1-1.1bn previously. Together, Underlying EBITDA growth and lower capex than last year led to continued strong operating free cash flow, which grew by 24% to SEK 461m. Our strong cash flow allowed us to continue executing on our share buyback program. In the quarter we repurchased shares for SEK 287m, representing 2.0% of total number of registered shares as of September 30, while remaining within our leverage target. The share repurchase programme continues with a mandate to repurchase up to SEK 200m between October 1 and November 30.

Significantly increase the dividend in 2017 Following consistently strong cash generation, the Board intends to propose a change to the mix of the shareholder remuneration to increase the cash dividend from SEK 1.50 per share to SEK 4.00 per share to be paid out semi-annually in May and October, 2017. Alongside the cash dividend we will also continue to do buybacks from time to time.

Notes to the editors: You will find the complete report with tables in the attached PDF or at: http://www.comhemgroup.se/en/investors/financial-reports-presentations/

Com Hem has today disclosed selected financial information and alternative performance measures for Boxer for 2015 and first nine months 2016, recalculated to estimated Com Hem accounting principles (non-audited). See further on our webpage: http://www.comhemgroup.se/en/investors/financial-reports-presentations/

Conference call on October 18

Management will host a conference call for the financial community at 10:00 am CET today. The presentation will be held in English and the presentation material can be accessed on www.comhemgroup.com. An on-demand version is also available after the presentation.

Link to webcast: http://cloud.magneetto.com/comhem/2016_1018_q3_2016/view

Conference call dial-in numbers:

Sweden: +46 8 5052 0114

UK: +44 20 7 1620 177

USA: +1 334 323 6203

To ensure that you are connected to the conference call, please dial in 10 minutes ahead of the conference call to register your attendance.

This information is information that Com Hem Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:30 CET on October 18, 2016.

About Com Hem

Com Hem offers broadband, TV, play and telephony services to Swedish households and companies. Approximately 40 percent of the country's households are connected to Com Hem's network, making Com Hem an important driver of digital Sweden. We offer broadband speeds of up to 1 Gbit /s and a wide range of channels via digital TV at home or mobile via Com Hem Play. The company was founded in 1983 and has approximately 1,200 employees including about 700 within customer service. Com Hem is headquartered in Stockholm and operates through three subsidiaries; Com Hem AB, Phonera Företag AB and iTUX Communication AB. In September 2016, Com Hem acquired Boxer TV-access AB. In 2015, Group sales totaled SEK 5,000 million. Since 2014 the Com Hem share is listed on Nasdaq Stockholm. www.comhemgroup.se.

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