NETGEM (EPA:ALNTG) - From BOX FOR EVERYONE to FIBER FOR EVERYONE : Netgem opens a new chapter in its story of the connected home

Transparency directive : regulatory news

24/01/2019 07:30

PRESS RELEASE

                  From BOX FOR EVERYONE to FIBER FOR EVERYONE

         Netgem opens a new chapter in its story of the connected home

- Netgem unveils its Services strategy and strengthens its position in
  Videofutur
- Successful launch of Videofutur in Fiber with more than EUR10 million revenue
  in 2018

Paris, January 24, 2019

Netgem Board of Directors announces the annual consolidated revenue and net
revenue of 2018 and validates the strategic plan in the services for very
high-speed and the Fiber.

               4th quarter   4th quarter          12 months   12 months
Netgem Group       2018          2017     Change     2018        2017   Change
consolidated
revenue            10.8          16.5      -34%      41.8        61.8    -32%
consolidated
net revenue         4.7           7.0      -33%      19.7        25.2    -22%
Videofutur
revenue (non
consolidated)       3.3           1.8      +89%      10.2         5.6    +82%

Unaudited data, in EUR millions

Consolidated revenue confirm unsurprisingly the slowdown of operators'
investments in Boxes, noted since the beginning of 2018, but a more moderate
slowdown in net revenue, thanks to the contributory effect of services
activities within the scope of consolidation of Netgem.

In 2018, the revenue of Videofutur (Vitis), Fiber operator and unconsolidated
subsidiary in our published statements, has grown by 82% and exceeds EUR 10
million.

"By creating Netgem in 1996, our ambition was to offer everyone the services of
a connected home. Box have been the solutions for us to connect millions of
televisions. It has been a successful first step. With Fiber, we open ourselves
to the market of new services and uses of the whole family. This is where we
want to invest from now on " explains Joseph Haddad, Founding President of
Netgem Group.

20 years of successful connected home experience

In 1996, the television was the center of the home and the symbol of
entertainment. Netgem invented the "Box", allowing the development of the IPTV,
emblematic service of the deployment of ADSL, the first generation Internet.

Today, this central point has fragmented into multiple individual screens and
connected objects, and many other digital services are there and will be
consumed: video streaming and very high-resolution audio, virtual reality, but
also security, health, energy, education ... Fiber optics will inexorably
replace the "copper wire", and makes a new generation of digital services that
will improve the lives of everyone possible.

The emergence of a Fiber ecosystem, with favorable rules of the game

Everywhere in Europe the Fiber market is partially or totally open. It is the
consequence of the priority of the political choice of "ultra-high-speed for
everyone". Since the infrastructures are being financed by public resources,
independent service operators should be able to access that market in a
non-discriminatory manner.

In France, Netgem has been active in this market for several years through its
participation in Videofutur, and more recently in the UK, and is deploying in
those countries as an operator of the connected home and very high-speed
services.

After focusing on the Box for Everyone as mission of its first 20 years, Netgem
nows chooses the Fiber for Everyone, its new mission in the conquest of the
connected home.

First success with Videofutur, a replication in progress in Great Britain

This model of service operators for ultra-high speed has been incubated and
developed these past years in France within Vitis, mother company of
Videofutur,of which NETGEM is the largest shareholder, alongside la Caisse des
Dépôts, the first investor in the open access market and Oceinde, fiber
operator in La Réunion.

In few years, Videofutur succeeded in positioning itself as an alternative
operator in France, leader of the open access market, which are the fiber
operators that provide the national coverage of very high speed in the regions
and cover almost half of the homes. The infrastructures of these networks are
financed by public funds and any operator can deliver services there in a
non-discriminatory way. The reference magazine 01net, in a recent comparative
overview of the operator offers in France, has made the offer of VITIS, under
the Videofutur brand, the best in the regions.

In Great Britain, in a different market organization context, a similar
development is underway. The contract won a few years ago in Great Britain has
led the local subsidiary to develop a know-how as an "operator of services for
third-parties ", which it now deploys more widely under the brand name
Netgem.tv, through several distribution channels, including fiber in priority.

Strengthen in Videofutur to assess strategy services

Netgem announces that the company will hive down to Vitis its "multi-screen
cloud platform and digital recorder" activity which has been so far part of the
Box activity, with nine employees and exclusive rights to technology in France
and Germany.

This operation, validated by the competent bodies of Vitis and Netgem,
reinforces appreciably the resources of Vitis, and leads to a majority takeover
of Netgem within Vitis, which will own 53.2% of the capital post operation
(fully diluted). This operation follows a capital increase of EUR 4 million in
cash subscribed at the end of 2018 by the others shareholders.

This operation is subject to a number of usual conditions precedent, including
the agreement of the next General Meeting of Netgem shareholders. It values the
participation of Netgem within VITIS to EUR 17.9 million post-money.

Videofutur business plan, which is not consolidated in Netgem Group's accounts,
shows a tripling of activity to reach EUR 30 million in 2021.

Refocused Box activity

This operation also allows the Box activity to refocus on its core business, to
significantly reduce its costs and thus ensure the support of its customers and
the maintenance of its products in a profitable way.

A new space to discuss the strategy: fiberforeveryone.Netgem.com

To dialogue with its shareholders on this strategy, NETGEM is now opening a new
dedicated area: fiberforeveryone.netgem.com.

Everyone can comment on the strategy, make suggestions, register to participate
in the presentation of the strategy and the latest offers of Videofutur on May
14, 2019 in Paris.

Financial calendar

2018 Results March 21, 2019, before stock market opening
Revenues and net revenue for Q1 2019 May 10, 2019, before stock market opening
Annual General Assembly May 14, 2019
First half 2019 revenues and results 1st August 2019, before stock market
opening
Revenues and net revenue for Q3 2019 October 17, 2019, before stock market
opening

contacts

Investor Relations
Charles-Henri Dutray
charles-henri.dutray@netgem.com
+33 1 55 62 56 11

Shareholder relations & press relations
Nicolas Castex
nicolas.castex@equitystories.fr
+33 (0) 6 09 58 07 72

About NETGEM
NETGEM is the pioneer of the connected home, with the invention of the Box in
1996, and the co-creation of the independent operator of services for the very
high-speed and Fiber in France, under the brand VideoFutur. Millions of homes
around the world today use the NETGEM Box, under brands of our distribution
partners, operators of telecommunications services and entertainment.
NETGEM is listed on Euronext Paris Compartment C (ISIN: FR0004154060, Reuters:
ETGM.PA, Bloomberg: NTG: FP) www.netgem.com

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