2019 UNIVERSAL REGISTRATION DOCUMENT ANNUAL FINANCIAL REPORT CONTENTS MESSAGE FROM THE CHIEF EXECUTIVE OFFICER AND THE CHAIRMAN 6 CONSOLIDATED FINANCIAL AFR OF THE BOARD OF DIRECTORS 4 STATEMENTS 161 Consolidated income statement 163 Consolidated statement OVERVIEW OF THE GROUP of comprehensive income 164 AND ITS BUSINESSES 7 1 Consolidated balance sheet – assets 165 1.1 The iliad Group 8 Consolidated balance sheet – equity 1.2 Markets and strategy 14 and liabilities 166 1.3 The Group’s businesses 19 Consolidated statement of changes in equity 167 1.4 A network serving the Group’s Internet and telephony operations 28 Consolidated statement of cash fl ows 168 1.5 Research & Development 32 Statutory Auditors’ report on the consolidated fi nancial statements 222 1.6 Regulatory framework 33 1.7 Organizational structure 39 ILIAD S.A. FINANCIAL STATEMENTS 229 AFR 2 RISK FACTORS 41 7 7.1 Accounting principles and policies 234 2.1 Risks related to the Group’s operations 43 7.2 Notes to the balance sheet at December 31, 2019 236 2.2 Risks related to the Group’s industry 47 7.3 2019 review of operations 247 2.3 Risks related to the Group’s organizational structure 48 7.4 Financial items 249 2.4 Financial risks 49 7.5 Other information 250 2.5 Legal risks 50 7.6 Dividends paid in the past fi ve fi scal years 253 2.6 Insurance and risk coverage 52 7.7 The Company’s fi ve-year fi nancial 2.7 Internal control 52 summary 254 7.8 Other information relating 3 CORPORATE GOVERNANCE 55 AFR to the fi nancial statements 255 Statutory Auditors’ report 3.1 Membership structure on the fi nancial statements 256 of the Company’s administrative and management bodies 56 3.2 Organization and operating INFORMATION ABOUT THE procedures of the Board 8 COMPANY AND ITS CAPITAL 261 of Directors 64 8.1 Information about the Company 262 3.3 Organization and operating procedures of executive 8.2 Information about the Company’s management and management capital 264 bodies 74 3.4 Compensation of the Group’s corporate offi cers 76 9 ANNUAL GENERAL MEETING 275 9.1 Proposed resolutions presented at the Annual General Meeting NON-FINANCIAL AFR to be held in 2020 276 NFIS 4 PERFORMANCE 105 9.2 Board of Directors’ report Our corporate social responsibility policy 106 on the resolutions submitted to the Annual General Meeting 4.1 Human resources data 108 to be held in 2020 287 4.2 Environment 122 4.3 The Group’s role in society 128 ADDITIONAL INFORMATION 293 AFR Report by one of the Statutory Auditors, 10 appointed as an independent third 10.1 Persons responsible party, on the consolidated non- fi nancial for the Universal Registration information statement included Document 294 in the Group’s management report 133 10.2 Documents accessible to the public 294 ANALYSIS OF THE GROUP’S 10.3 Material contracts 295 5 BUSINESS AND RESULTS 137 5.1 Overview 139 GLOSSARY 296 5.2 Signifi cant events of 2019 147 5.3 Comparison of results for 2019 and 2018 150 CROSS-REFERENCE TABLES 301 5.4 Additional information 159 INFORMATION FROM THE ANNUAL FINANCIAL REPORT IS IDENTIFIED IN THE TABLE OF CONTENTS BY THE SYMBOL AFR INFORMATION FROM THE NON-FINANCIAL INFORMATION STATEMENT IS IDENTIFIED IN THE TABLE OF CONTENTS BY THE SYMBOL NFIS - Universal Registration Document 2019 UNIVERSAL REGISTRATION DOCUMENT 2019 including the Annual Financial Report In the space of 20 years, the iliad Group has become one of the leading electronic communications players in France and Italy, with over 25 million subscribers, 11,000 employees, and more than €5.3 billion in revenues in 2019. www.iliad.fr “The French language version of this Universal Registration Document was fi led on April 10, 2020 with the French fi nancial markets authority (Autorité des marchés fi nanciers – AMF) in its capacity as competent authority within the meaning of EU Regulation 2017/1129, without prior approval, in accordance with Article 9 of said regulation. The Universal Registration Document may also be used for the off er to the public or the admission to trading of securities on a regulated market, provided it is accompanied by securities note and, if applicable, a summary of all amendments applied to the Universal Registration Document. All of these items are approved by the AMF in accordance with the abovementioned regulation.” The English language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein the original language version of the document in French takes precedence over this translation. Copies of this Universal Registration Document can be obtained free of charge from the Company’s registered offi ce (16, rue de la Ville-l’Évêque – 75008 Paris, France – Tel.: +33 1 73 50 20 00) and may also be viewed on the Company’s website (www.iliad.fr) as well as on the website of the AMF (www.amf-france.org). Universal Registration Document 2019 - 3 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER AND THE CHAIRMAN OF THE BOARD OF DIRECTORS MESSAGE FROM THE CHIEF EXECUTIVE OFFICER AND THE CHAIRMAN OF THE BOARD OF DIRECTORS In 2019, we started to reap the benefi ts of “all our hard work over the past 18 months: our sales performance swung back up, we returned to growth in France, with revenues up 3%, and our profi tability strengthened. This clearly shows that we have got our strategy right. „ To the Shareholders, 2019 was a particularly intense year. It was a year that saw the fi rst signs of our sales recovery. And it was a year in which we took major strategic decisions, with the signature of two infrastructure partnership agreements and an unprecedented transaction concerning the Company’s capital. It was a year that paved the way for the Group’s future. In 2019, we started to reap the benefi ts of all our hard work over the past 18 months: our sales performance swung back up, we returned to growth in France, with revenues up 3%, and our profi tability strengthened. This clearly shows that we have got our strategy right. After a diffi cult sales performance in the summer of 2018, we launched our Odyssey 2024 business development plan, with two short- term objectives. First, to improve our sales and marketing strategy while ensuring we keep Free’s DNA intact – namely innovation, straightforward usage and transparent prices. And second, to achieve effi ciency gains in our network rollouts by overhauling our industrial processes. All of the measures we have put in place have helped to signifi cantly enhance the subscriber experience. In 2019, we continued our strategy of investing massively in There are therefore many indicators that point to how our fi ber and mobile rollouts. Fiber is now our number one industrial Group is on the right track. At the same time, the two strategic priority and the Group ended the year with almost 14 million partnership deals we signed in 2019 have not only laid the marketable sockets. We are now present in every département ground for our future, but are also helping us to go quicker and in Metropolitan France and nearly one French household in two further in rolling out our networks. has access to Free Fiber. What is more, in 2019 we became the We forged the fi rst of these partnerships in May, entering into a leading recruiter of new fi ber subscribers. deal with Cellnex to accelerate our 4G and 5G network rollouts Thanks to fi ber, as well as the success of the Freebox Delta in France and Italy. The agreement involved the Group selling and our revamped sales and marketing strategy, we were able 70% of OnTower, the company that manages iliad’s passive to return to a positive net add fi gure in our fi xed-line business mobile telecommunications infrastructure in France and close during the year. to 2,200 sites in Italy. For mobile, in 2019 we were the operator that deployed the Then in September, we announced the signature of an exclusive largest number of new sites in France, with a particular focus partnership deal with InfraVia, aimed at accelerating the rollout on 700 MHz frequencies and preparing for 5G. As a result, in of fi ber (FTTH) in low- and medium-density population areas in the last quarter of 2019, our net number of mobile subscribers France (representing approximately 26 million lines), through a returned to growth for the fi rst time in two years. specially-created entity called Investissement dans la Fibre de Territoires (IFT). In Italy, meanwhile, over 5 million subscribers have chosen us as their provider. And impressively, iliad Italia has already Another major strategic operation for the Group in 2019 was become the country’s favorite mobile telephony brand. In 2020, the €1.4 billion share buyback off er it launched at a price of €120 we intend to continue on this trajectory, building on the results per share (representing a 38% premium), which was fi nanced by we have already achieved and increasing our profi tability. And a share issue open to all iliad shareholders and guaranteed by in tandem, our network investments are going to enable us to Xavier Niel. carry ever-higher volumes of data for our subscribers. 4 - Universal Registration Document 2019 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER AND THE CHAIRMAN OF THE BOARD OF DIRECTORS We will [...] continue to ramp up our Odyssey 2024 plan in 2020.