Wind Tre Group Consolidated interim financial statements as of and for the six-month period ended June 30, 2018 Wind Tre Group Report on operations at June 30, 2018 CONTENTS 1 THE WIND TRE GROUP .......................................................................................................................... 3 2 COMPOSITION OF THE CORPORATE BODIES OF WIND TRE S.P.A. ............................................................. 5 3 WIND TRE GROUP HIGHLIGHTS AT JUNE 30, 2018 ................................................................................... 6 4 THE ITALIAN TELECOMMUNICATIONS SERVICES MARKET ...................................................................... 12 5 COMMERCIAL AND OPERATING PERFORMANCE ..................................................................................... 13 6 NETWORK .......................................................................................................................................... 16 7 HUMAN RESOURCES ........................................................................................................................... 19 8 REGULATORY FRAMEWORK AT JUNE 30, 2018 ....................................................................................... 20 9 OUTLOOK .......................................................................................................................................... 23 GLOSSARY ................................................................................................................................................... 25 Report on operations 2 Wind Tre Group at June 30, 2018 1 THE WIND TRE GROUP Wind Tre S.p.A. (hereinafter referred to as Wind Tre or the Company and together with its subsidiaries the Group or the Wind Tre Group) is a joint stock company having registered office in Largo Metropolitana, 5, Rho, Milan, Italy. Wind Tre is a leading operator in the fixed and mobile telecommunications and data services sector in Italy strongly oriented towards “in-mobility” data communication services, internet mobile access services (broadband and ultra- broadband fixed-line services) as well as a convergent fixed-mobile offer. A wide range of content, applications and multimedia support completes Wind Tre market proposition. These consolidated financial statements for the period ended June 30, 2018 were approved by the Company’s Board of Directors on July 31, 2018. At the date of approval Wind Tre is controlled by Wind Tre Italia S.p.A. (hereinafter referred to as Wind Tre Italia) which in turn is controlled by the Luxembourg based entity VIP-CKH Luxembourg Sàrl (hereinafter referred to as VIP-CKH or the Joint Venture). VIP-CKH is a joint venture whose share capital is owned as to 50% by CK Hutchison Holdings Limited (hereinafter referred to as CK Hutchison) and by Veon Ltd. (hereinafter referred to as Veon). The Joint Venture owns and operates telecommunications businesses in Italy. CK Hutchison is a limited liability company incorporated in the Cayman Islands and registered in the Register of Companies of the Cayman Islands (no. MC-294.571) whose shares are listed on the Hong Kong Stock Exchange and whose principal place of business is located at 12th Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong. Veon is incorporated under Bermuda law, domiciled in Claude Debussylaan 88, 1082 MD Amsterdam, The Netherlands and listed on NASDAQ. At the approval date of this financial statements, CK Hutchison agreed to purchase VEON’s 50% indirect stake in Wind Tre. Upon completion of the transaction, CKHH will indirectly hold 100% of the shares of Wind Tre. Completion of the transaction is pending approvals from the European Commission and Italian authorities. The formation of the Joint Venture, required as per EU prescription the implementation of remedies including the signing of certain agreements with Iliad, a French telecom operator, entered into Italian market on May 29, 2018. These agreements have resulted in the commitment of the Wind Tre Group to sell frequencies and sites to Iliad in the period 2017 – 2020 as well as to sign agreements which enable Iliad to operate telecommunications services in the Italian market while it is creating its own network. From an accounting perspective frequencies and sites that are expected to be transferred to Iliad by December 31, 2018 are presented and measured at each closing date in line with IFRS 5 requirements and discussed in the General Accounting Policies section. Accelerated depreciation has been charged on the sites that are expected to be transferred after December 31, 2018 and will still be utilized by the Group through that date, in order to represent their new expected limited useful lives. More detailed information on this transaction are reported in Wind Tre Group’s Notes to the Consolidated Financial Statements as at December 31, 2016 and 2017. At the end of 2016 the carrying amount of the assets to be sold was reviewed in terms of impairment or by revising their useful lives. These assessment has been updated in the financial statements at June 30, 2018 and is discussed in the explanatory notes. Report on operations 3 Wind Tre Group at June 30, 2018 The diagram below sets out the structure of the Wind Tre Group as of June 30, 2018. Wind Tre has invested and will continue to invest to strengthen its fixed and mobile networks, thereby accelerating the process of network integration. Trieste and Agrigento were the first two Italian cities to benefit from the new consolidated Wind Tre mobile network which guarantees high performance for coverage, quality of service and connection speed and ensures a better user experience; Bologna, Alessandria, Milan, Rome and some other minor cities have been sub-sequentially added in 2018. In November 2016 Wind Tre signed an agreement with ZTE Italia, a subsidiary of the ZTE Corporation to consolidate, modernize and overlay the Wind Tre radio access network. Following the issuance to ZTE of an order denying privileges on exports and re-exports of U.S. products, software and technology issued on April 15, 2018 by U.S. Authorities, ZTE suspended performance under their contract with Wind Tre, resulting in delays to the network modernization and consolidation. On July 13 2018, the U.S. Department of Commerce lifted the denial order. In June 2018 Wind Tre entered into a RAN agreement with Ericsson Italia to continue, together with ZTE, in network modernization and consolidation. Wind Tre also has given notice to ZTE Italia of a partial termination and de-scoping of its activities under their RAN agreement with Wind Tre. Report on operations 4 Wind Tre Group at June 30, 2018 2 COMPOSITION OF THE CORPORATE BODIES OF WIND TRE S.P.A. Board of Directors (1) Chairman Kjell Morten Johnsen Directors Jeffrey Alan Hedberg, Managing Director Christian Nicolas Roger Salbaing Board of Statutory Auditors (2) Chairman Giancarlo Russo Corvace Standing auditor Marcello Romano Standing auditor Luca Occhetta Substitute auditor Roberto Colussi Substitute auditor Maurizio Paternò di Montecupo (1) Starting from May 5, 2018 the Director Mr. Kjell Morten Johnsen has held the office as Chairman of the Board of Directors of the Company while the former Chairman of the Board, Mr. Christian Nicolas Roger Salbaing has held the office as Director. (2) The shareholders’ meeting of the Company held on November 5, 2016 appointed the Board of Statutory Auditors for a term expiring on the date of the shareholders’ meeting that approves the Company’s financial statements for the year ending December 31, 2018. Report on operations 5 Wind Tre Group at June 30, 2018 3 WIND TRE GROUP HIGHLIGHTS AT JUNE 30, 2018 2018 financial data are in accordance with IFRS 15. To enable a better year-on-year comparison, 2018 figures are also shown on a comparable basis, in accordance with previous accounting standards IAS 18, applied for 2017 reported financial statements. (millions of euro) 2018 Change 2018 6 months 2017 Note Income Statement 6 months Comparable 6 months Amount % IAS 18 Total Revenue(1) 3.1 2,771 2,771 3,083 (312) (10.1)% EBITDA(2) 3.2 935 893 900 (7) (0.8)% Operating loss 3.3 (156) (146) (721) 575 (79.8)% Net finance expense (152) (152) (287) 135 (47.0)% Loss before tax (308) (298) (1,008) 710 (70.4)% Loss after tax 3.4 (317) (310) (1,050) 740 (70.5)% (1) The figures for the period ended June 30, 2017 have been reclassified to ensure comparability with the figures for the period ended June 30, 2018 (2) Operating loss before depreciation and amortization, reversal of impairment losses/impairment losses on non-current assets and gains/losses on disposal of non-current assets (millions of euro) At June 30, At June 30, 2018 At December 31, Note Statement of financial position 2018 Comparable 2017 IAS 18 Net non-current assets 3.5 12,457 12,394 13,071 Equity attributable to owners of the Group 1,302 1,246 1,644 non-controlling interests - - - Net working capital 3.6 (982) (975) (1,109) Capital Structure Composition 3.7 (10,173) (10,173) (10,318) 3.1 Revenue (millions of euro) 2018 Change 6 months 2018 Comparable 2017 Amount % 6 months IAS 18 6 months Revenue 2,737 2,737 3,001 (264) (8.8)% - from Services 2,418 2,418 2,624 (206) (7.9)% - from Sales 319 319 377 (58) (15.4)% Other Revenue 34 34 82 (48) (58.5)% Total revenue 2,771 2,771 3,083 (312) (10.1)% Report on operations 6 Wind Tre Group at June 30, 2018 Mobile (millions of euro) 2018 2018 2017 Change 6 months 6 months 6 months Comparable Amount % IAS 18 Revenue from services 1,902 1,902 2,085 (183) (8.8)%