2024 Half-Year Reviewed Condensed Consoldiated Financial Statements

                                                TDF Infrastructure

Period from January 1 to June 30, 2024

Statutory auditor’s review report on the condensed interim consolidated financial statements

ERNST & YOUNG Audit

                                            ERNST & YOUNG Audit                                                       Tél. : +33 (0) 1 46 93 60 00                                          

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TSA 14444

92037 Paris-La Défense cedex

TDF Infrastructure

Period from January 1 to June 30, 2024

Statutory auditor’s review report on the condensed interim consolidated financial statements

To the President,

In our capacity as statutory auditor of TDF Infrastructure (the “Company”) and in accordance with your request in connection with a potential refinancing project, we have performed a review of the accompanying condensed interim consolidated financial statements of the Company for the period from January 1 to June 30, 2024.

The preparation of these condensed interim consolidated financial statements is your responsibility. Our role is to express a conclusion on these condensed interim consolidated financial statements based on our review.

We conducted our review in accordance with professional standards applicable in France and the professional guidance issued by the French Institute of Statutory Auditors (Compagnie nationale des commissaires aux comptes) relating to this engagement. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 – standard of the IFRS as adopted by the European Union applicable to interim financial information.

Paris-La Défense, September 12, 2024

The Statutory Auditor

ERNST & YOUNG Audit

Thierry Cornille

S.A.S. à capital variable

344 366 315 R.C.S. Nanterre

Société de Commissaires aux Comptes

Société d'expertise comptable inscrite au Tableau de l'Ordre de la Région Paris - Ile-de-France

Siège social : 1-2, place des Saisons - 92400 Courbevoie - Paris-La Défense 1                                                                                                                                                                              1

TDF INFRASTRUCTURE SAS

GROUP

CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

June 30, 2024

Consolidated statement of comprehensive income,

6 months period ended June 30, 2024

In thousands euros                                                          Notes

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

** In accordance with IFRS 5, June 2024, December 2023 Restated and June 2023 Restated columns disclose the Group's results restated for discontinued operations (the Group's Fiber business, see notes 1 and 6) for which incomes and expenses have been reclassified on the line “Net loss from discontinued operations “

* At December 31, 2023, and June 30, 2023, the line “Cash flow hedge” concerned exclusively the Fiber business, which is treated as a discontinued operation at June 30, 2024.

Consolidated balance sheet as of June 30, 2024

          In thousands euros                                                                         Notes

TOTAL EQUITY AND LIABILITIES

** In accordance with IFRS 5, “June 2024” column discloses the assets and liabilities of discontinued operations (the Group's Fiber business, see notes 1 and 6) on the lines “Assets and liabilities held for sale and discontinued operations”

* At December, 31 2023 and 30 June 2023, the line “Cash flow hedge reserves” concerned exclusively the Fiber business. As this business is a discontinued operation on 30 June 2024, these reserves have been reclassified under “Reserves from discontinued operations”.

Consolidated statement of cash flows 6 months period ended June 30, 2024

** In accordance with IFRS 5, the columns “June 2024”, “December 2023 restated” and “June 2023 restated” disclose the Group's cash flows restated for flows from discontinued operations (the Group's Fibre business, see notes 1 and 6), whose flows have been reclassified on the line “net cash from discontinued operations”.

Consolidated statement of changes in equity

Number of

In thousands euros                                                                         outstanding shares

* Over the different periods presented, cash flow hedge reserves concern exclusively the Fiber business. 

5

Notes to the consolidated financial statements 

1.  HIGHLIGHTS OF THE PERIOD............................................................................................................................. 8

2. BASIS OF PREPARATION.................................................................................................................................... 9

2.1 Presentation of the financial statements............................................................................................... 9

3.  BASIS OF PREPARATION.................................................................................................................................. 10

3.1  Statement of compliance.................................................................................................................. 10

3.2  Functional and presentation currency................................................................................................ 10

3.3  Basis of measurement...................................................................................................................... 10

3.4  Judgments and estimates................................................................................................................. 10

3.5  Error corrections............................................................................................................................... 11

3.6  Standards and interpretations in force................................................................................................ 11

3.7  Impairment tests............................................................................................................................... 11

3.8 Income tax........................................................................................................................................ 11

3.9 Exchange rates used for the period.................................................................................................... 11

4.  FINANCIAL RISK MANAGEMENT......................................................................................................................... 12

4.1  Credit risk........................................................................................................................................ 12

4.2 Market risk........................................................................................................................................ 12

4.3 Liquidity risk...................................................................................................................................... 13

4.4 Indebtedness.................................................................................................................................... 14

5.  OPERATING SEGMENTS.................................................................................................................................. 16

6.  DISCONTINUED OPERATIONS, ASSETS HELD FOR SALE AND DISPOSED ENTITIES........................................................ 18

6.1 Discontinued operations.................................................................................................................... 18

6.2 Assets held for sale and disposed entities........................................................................................... 19

7.  NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME..................................................................................... 20

7.1  Revenue.......................................................................................................................................... 20

7.2  Other income and expenses (in current operating income).................................................................. 20

7.3  Consumed purchases....................................................................................................................... 21

7.4  Personal cost................................................................................................................................... 21

7.5  External expenses............................................................................................................................ 21

7.6  Profit on disposal of non-current operation assets.............................................................................. 22

7.7  Depreciation, amortization, and impairment losses............................................................................. 22

7.8  Other operating income and charges................................................................................................. 22

7.9 Net finance costs.............................................................................................................................. 23

7.10 Income tax...................................................................................................................................... 24

8.  NOTES TO THE BALANCE SHEETS: ASSETS......................................................................................................... 26

8.1 Goodwill........................................................................................................................................... 26

8.2 Intangible assets............................................................................................................................... 27

8.3 Property, plant, and equipment........................................................................................................... 28

8.4 Trade receivables and other current and non-current assets................................................................ 28

9.  NOTES ON THE BALANCE SHEET: EQUITY AND LIABILITIES..................................................................................... 30

9.1 Financial debt................................................................................................................................... 30

9.2 Employee benefits............................................................................................................................. 32

9.3 Provisions......................................................................................................................................... 33

9.4 Other current and non-current liabilities.............................................................................................. 34

10.  CASH FLOWS.............................................................................................................................................. 35

10.1 Cash generated from operating activities before changes in working capital........................................ 35

10.2 Changes in working capital.............................................................................................................. 35

10.3 Net cash used in investing activities................................................................................................. 35

10.4 Net cash used in financing activities................................................................................................. 35

11.  WORKFORCE.............................................................................................................................................. 36

12.  CONTINGENT LIABILITIES AND OFF-BALANCE SHEET COMMITMENTS...................................................................... 37

12.1 Contingent liabilities (assets)............................................................................................................ 37

12.2 Firm commitments........................................................................................................................... 37

12.3 Contingent commitments................................................................................................................. 38

13.  SHARES IN ASSOCIATES................................................................................................................................ 39

14.  RELATED PARTY DISCLOSURES...................................................................................................................... 39

14.1 Compensation of key management personnel................................................................................... 39

14.2 Transactions with related parties...................................................................................................... 39

15.  SIGNIFICANT SUBSEQUENT EVENTS................................................................................................................ 40

16.  CONSOLIDATION SCOPE................................................................................................................................ 41

1.      Highlights of the period

Project for the sale of the Fiber business and presentation as discontinued operations (IFRS 5)

On 18 April 2024, TDF and La Banque des Territoires entered into exclusive negotiations with DIF Capital Partners to sell the Fiber business of the Group.

The agreement concerns the acquisition of the entire capital of TDF Fibre and Lumière Fibre, a newly incorporated vehicle entirely held by the Group and to which TDF SAS is expected to contribute its operating units providing engineering, maintenance, deployment and commercialization services for optical fiber networks.

This transaction could be completed by the end of 2024, subject to satisfaction of the conditions precedent.

Until the transaction is completed, and regarding the agreement signed by the Group, the ongoing negotiation, and the nature of the scope concerned by the project, the Fiber business has been classified as a discontinued operation as of June 30, 2024, within the meaning of IFRS 5.

Consequently, in the financial statements disclosed:

-       all income and expenses of the Fiber business have been reclassified on the line “Net loss from discontinued operations" over the various periods presented in the group income statement,

-       all Fiber business cash flows have been reclassified on the line “Cash flows from discontinued operations” over the various periods presented in the Group cash flow statement,

-       assets and liabilities relating to the Fiber business have been reclassified on the lines “Assets and liabilities held for sale or discontinued operations“ at June 30, 2024.

Capex Facility 2023 extended by one year

On May 14^th, 2024, TDF Infrastructure SAS obtained the agreement from all concerned lenders, allowing to exercise a one-year extension option bringing to July 10, 2027 the maturity of the syndicated acquisition and capex facility raised in 2023 (“Capex Facility 2023”).

One-year extension of the revolving credit facility

On May 14^th, 2024, TDF Infrastructure SAS obtained the agreement from all the concerned lenders, allowing to exercise a one-year extension option bringing to July 10, 2029 the maturity of the revolving credit facility raised in 2023.

2.      Basis of preparation

The Group’s consolidation head company, TDF Infrastructure SAS, is a “société par actions simplifiées” (simplified joint stock company) with a registered office at 92 120 Montrouge - 155 bis Avenue Pierre Brossolette.

As a partner to television, radio, telecommunication operators and local governments, the Group performs the following activities:

- Telecommunications: design, deployment, maintenance, and management of 2G, 3G, 4G, 5G telecommunication networks infrastructure, hosting on roof tops and indoor areas, datacenters and Edge

Computing solutions, hosting of broadcasting and reception equipment on proprietary sites,  -       audiovisual services and networks (TV and radio digital broadcasting, radio FM broadcasting).

The Group draws upon its recognized expertise and over 8 700 active terrestrial sites mainly in France and focuses on rolling out its telecommunication infrastructures and developing new digital solutions: ultrahigh-definition television, private mobile networks etc.

The Group operates in markets characterized by sweeping changes in both technology and regulations (for example, some businesses are subject to pricing constraints imposed by local regulatory authorities).

The Group has also positioned itself as a player of digital network facilities in France through the deployment and marketing of Very High-Speed optical fiber networks. As of June 30, 2024, this business is subject to a disposal project and considered as a discontinued operation within the meaning of IFRS 5 (see note 1).  

2.1 Presentation of the financial statements

The main performance indicators used by the Group are:

EBITDA, which is equivalent to current operating income before depreciation, amortization, and impairment of assets.

EBITDAaL (EBITDA after Leases, see note 5), which corresponds to EBITDA adjusted for: -       charges corresponding to operating leases,

-       charges booked in relation to the application of IFRS 2 which are non-cash in nature,

-       charges corresponding to severance payments and all fees directly related (lawyers, etc.)

Current operating income, which is equivalent to operating income before: 

-       Any impairment of goodwill,

-       “Other operating income” and “other operating expenses”, which may include: 

o   Material and unusual gains or losses on sale and/or impairment of non-current tangible and intangible assets;

o   Certain restructuring charges;

o   Gains or losses on sale of subsidiaries net of selling costs, liquidation costs and acquisition costs of subsidiaries;

o   Other operating income and expenses, such as a provision for material litigation, changes in provisions for dismantling affecting income and related to changes in calculation assumptions.

3.      Basis of preparation 

                         3.1           Statement of compliance

The TDF Infrastructure Group condensed consolidated financial statements, for the 6 months ended June 30, 2024, have been prepared in accordance with IAS34 – Interim financial reporting. As condensed financial statements, they include selected explanatory notes and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023.

IFRS can be downloaded from the following website: https://ec.europa.eu/info/index.fr

The condensed consolidated financial statements on June 30, 2024 were prepared under the supervision of the management of the Group, and faithfully reflect the results for the period in accordance with IFRS.

The condensed consolidated financial statements on June 30, 2024, were approved by the Chairman of TDF Infrastructure SAS on September 12, 2024.

                         3.2           Functional and presentation currency 

The consolidated financial statements are stated in thousands of euros, which is the presentation and functional currency of the Group’s consolidation head company.

                         3.3           Basis of measurement 

Financial statements have been drawn up on the historical cost basis, except for the following items that are recognized at fair value: financial instruments held for trading, available-for-sale financial instruments and liabilities arising from cash-settled share-based transactions. 

                         3.4           Judgments and estimates

In the process of drawing up the consolidated financial statements, the measurement of certain balance sheet items requires the use of assumptions, estimates or assessments. This is notably the case with goodwill (notes 3.7 and 8.1), tangible and intangible assets (notes, 8.2 and 8.3), amounts of provisions (notes 9.2 and 9.3), deferred tax valuation (notes 3.8 and 7.10), recognition of revenue. These assumptions, estimates and assessments are made based on information available or situations existing at the time the financial statements are drawn up and may subsequently turn out different from future conditions.

At each closing date, the Group identifies the assets for which a disposal has been initiated and assesses if the sale is highly probable as required by IFRS 5.

IFRS 5 states that an entity shall classify a non-current asset (or disposal Group) as held for sale if its book value will be recovered principally through a sale transaction rather than through continuing use. For the sale to be highly probable the asset (or disposal Group held for sale) must be available for immediate sale in its present condition and management must be committed to the sale.

In addition, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification. In this case the non-current asset (or disposal Group) is valued at the lower of its carrying value and fair value less costs to sell.

Most Group entities have multi-year agreements with large customers. During the term of the agreements and upon expiry and/or renewal, discussions take place between those entities and their customers over the conditions, particularly financial, that have applied to these agreements. In view of this, where applicable, the entities record in their books the expected benefits and obligations under the agreements, including their best estimate of the effect of consequences deriving from the terms thereof. These estimates are uncertain by nature, and the final results may prove significantly different from estimates made at the date of preparation of the financial statements.

The Group is not subject to significant seasonal fluctuations.

                         3.5           Error corrections

No error correction has been accounted for during the year.

                         3.6           Standards and interpretations in force

The accounting policies are unchanged compared to those used in the preparation of the consolidated financial statements for the year ended December 31, 2023.

As of June 30, 2024, no amendment to IFRS standards has a significant impact on the Group's financial statements.

                         3.7           Impairment tests

For interim financial statements, unless any impairment loss indicator is identified, no impairment test on goodwill, on intangible assets with an indefinite useful life, and on other tangible and intangible assets, is performed.

The CGUs or groups of CGUs selected for goodwill impairment testing are Towers France, PSN Infrastuktura and Levira. 

On June 30, 2024, the Fiber CGU is subject to a disposal project and considered as a discontinued operation, within the meaning of IFRS 5 (see note 1 and 15).

                         3.8           Income tax

The measurement of the interim income tax expense is calculated by applying pre-tax profit for the period to the effective annual forecasted income tax rate (see note 7.10). The forecasted effective tax rate is calculated excluding any impacts of disposal of subsidiary or activity and in particular excluding any impairment of goodwill if it is not subject to tax.

                         3.9           Exchange rates used for the period 

The following were the functional currencies used in the Group:

4. Financial risk management

                         4.1           Credit risk

The total carrying value of financial assets takes account of the maximum exposure to credit risk.

Trade receivables

For some major TV, Radio and Telecom customers, sales invoices are issued in advance in compliance with contractual terms. 

Trade receivables are subject to provisions for impairment depending on the risks incurred and on ageing. 

Short–term investments

The Group places its cash with first class banking institutions, the objective being to generate a secure, as opposed to a speculative, return. Cash is invested in euro-denominated money market UCITS and in term deposits with a maturity of under 3 months.

                         4.2           Market risk

A. Management of interest rate risk 

Exposure to the Group’s interest rate risk can be analyzed below:

In thousands euros

Fixed interest rate debt

Variable interest rate debt Total before hedging

Fixed interest rate debt

Variable interest rate

Total after hedging

At June 30, 2024, closing date, the Group notably bears:

-       €1 063.6m of shareholders debt with fixed interest rate towards Tivana France Holdings (indirect shareholder);

-       €2 050m of bond debt with fixed rates (excluding loan issuance costs);

-       €300m of variable rate bank debt on Capex Facility 2021;

-       €344.5m related to lease liabilities related to IFRS 16 application, 

As of December 31, 2023, the Group's debt included €445 million of floating-rate term debt (excluding loan issue costs) relating to the financing line dedicated to the Fiber entities.

At the same time, the Group has implemented a floating rate debt hedging policy in order to manage its exposure to interest rate fluctuations, and thus subscribed derivatives instruments to hedge defined tranches of the bank debt dedicated to Fiber entities activity.

Thus, as of June 30, 2024, given the disposal project of the Group’s Fiber business (see note 1), and in accordance with IFRS 5: 

-       the bank credit line is disclosed in the Group balance sheet among the liabilities of discontinued operations,

-       the fair value of derivatives is disclosed in the Group's balance sheet among the assets of discontinued operations.

Indeed, as of June 30, 2024, the Group’s debt exposure to the interest rate risk does not include the items mentioned above.

See also note 6 on discontinued operations’ information. 

B. Exchange risk

The Group’s functional currency is euro. The Group has little exposure to exchange rate fluctuations in other currencies.

                         4.3           Liquidity risk

To ensure liquidity, the Group has available resources of €546.8m (€925.7m on December 31, 2023 of which

€304.3m could only be used the Fiber operating segment, which is classified as a discontinued operation at June 30, 2024, refer to notes 1 and 6).

The available liquidity consists of: 

-       Cash and cash equivalents of €46.8m as of June 30, 2024 (€135.7m on December 31, 2023 of which €14.3m could only be used the Fiber operating segment).

-       A Revolving Credit Facility negotiated under a Credit Facility Agreement signed in July 2023, for an amount of €325.0m, by TDF Infrastructure SAS to cover its own needs and those of its subsidiaries in respect of acquisitions, capital expenditure, working capital and general corporate purposes. As of June 30, 2024, this line is not used.

-       A credit line “Capex Facility 2023” signed in July 2023, for an amount of €175.0m, by TDF Infrastructure SAS to finance or refinance the Group's investment requirements. As of June 30, 2024, this line is not used.

Contractual maturities of financial debt break down as follows (including interest payments):

                              In thousands euros                          Book value

Financial debts - Nominal 3 434 537 Loan issue expenses          (12 109)

          Financial interest                                                             239 672

          Lease liability (IFRS 16)                                                   344 538

          Financial interest on lease liability (IFRS 16)                       1 996

           Trade payables                                                                143 566

            Total financial liabilities                                           4 152 200           4 935 116               552 775         2 206 763         2 175 578

                              In thousands euros                          Book value

Financial debts - Nominal 3 942 054 Loan issue expenses          (25 859)

          Financial interest                                                             191 513

          Lease liability (IFRS 16)                                                   328 946

          Financial interest on lease liability (IFRS 16)                       2 031

           Trade payables                                                                237 769

            Total financial liabilities                                           4 676 454           5 619 565               629 253         2 299 672         2 690 640

See the notes 4.4 and 9.1 which describe the split, the nature, and the characteristics of financial debts.

As of June 30, 2024, we have:

-       the shareholder debt, towards Tivana France Holdings for €1 063.6m, with a fixed rate interests of 5.5% and a maturity on March 20, 2030;

-       the bond debt issued on April 7, 2016, for €650m, with a fixed coupon of 2.50% and a maturity on April 7, 2026.

-       the bond debt issued on December 1, 2021, for €800m, with a fixed coupon of 1.750% and a maturity on December 1, 2029.

-       the bond debt issued on July 21, 2023, for €600m, with a fixed coupon of 5.625% and a maturity on July 21, 2028.

Financial expenses are calculated up to the contractual maturity of the liabilities to which they relate. 

Maturities on financial debts (bank and bond debts) correspond to contractual maturities, without presuming any early repayments.

Regarding the shareholder loan of €1 063.6m towards Tivana France Holdings, quarterly interests on that debt can be:

-       capitalized

-       paid

-       or the payment can be deferred, without the interests being capitalized.

Therefore, within the liquidity risk disclosure section, the following assumptions are made: 

-       interests that are neither capitalized nor paid are disclosed with a maturity under one year,

-       future interests are paid every quarter until maturity, without considering the deferred payments or capitalization mechanisms that are authorized by the loan documentation.

                         4.4           Indebtedness

The Group has contracted an unsecured senior debt towards bondholders (“bond debt “) and bank lenders (“bank debt“). 

Bond debt

As of June 30, 2024, the characteristics of bond debts of the Group are unchanged compared to December 31, 2023.

Bank debt

Revolving credit facility

As of June 30, 2024, as of December 31, 2023, the Group has a €325 million revolving credit facility negotiated under the Credit Agreement.

As of June 30, 2024, this line is not used (unchanged since December 31, 2023).

On May 14^th, 2024, TDF Infrastructure SAS obtained the agreement from all the lenders concerned, allowing to exercise a one-year extension option bringing to July 10, 2029 the maturity of the revolving credit facility (see note 1).

The other conditions of this agreement have not changed compared to December 31, 2023.

The bank agreement includes a financial covenant to be respected if the credit line is used: 

-       A ratio of net debt to EBITDA which must be less than 7.00x,

-       For the calculation of this ratio, certain adjustments, defined in the bank agreement, must be applied,

-       At interim closing, EBITDA is based on the last 12 rolling months, 

-       The covenant is calculated and communicated to the lenders’ agent every semester, based on June and

December financial statements,

-       At end of June 2024, the Group is compliant with the covenant.

Capex Facility 2021:

As of June 30, 2024, as of December 31, 2023, the Group had a €300 million Capex Facility 2021, negotiated under a syndicated loan, signed on March 26^th, 2021.

As of June 30, 2024, and as of December 31, 2023, this line is totally used. 

The conditions of this agreement have not changed compared to December 31, 2023.

The Capex Facility 2021 banking agreement also includes a financial covenant that must be complied with:  -       A ratio of net debt to EBITDA which must be less than 7.00x,

-       For the calculation of this ratio, certain adjustments, defined in the bank agreement, must be applied,

-       At interim closing, EBITDA is based on the last 12 rolling months, 

-       The covenant is calculated and communicated to the lenders’ agent every semester, based on June and

December financial statements,

-       At end of June 2024, the Group is compliant with the covenant.

Capex Facility 2023:

As of June 30, 2024, as of December 31, 2023, the Group had a €175 million Capex Facility 2023, negotiated under 2023 bank debt refinancing. 

As of June 30, 2024, this line is not used (unchanged since December 31, 2023).

On May 14, 2024, TDF Infrastructure SAS obtained the agreement from all the lenders concerned, allowing to exercise a one-year extension option bringing to July 10, 2027 the maturity of the Capex Facility line (see note 1).

The other conditions of this agreement have not changed compared to December 31, 2023.

The Capex Facility 2023 banking agreement also includes a financial covenant that must be complied with:  -       A ratio of net debt to EBITDA which must be less than 7.00x,

-       At interim closing, EBITDA is based on the last 12 rolling months, 

-       For the calculation of this ratio, certain adjustments, defined in the bank agreement, must be applied,

-       The covenant is calculated and communicated to the lenders’ agent every semester, based on June and December financial statements,

-       At end of June 2024, the Group is compliant with the covenant.

Bank debt line dedicated to Fiber entities.

As of June 30, 2024, and as of December 31, 2023, through the entity TDF Fibre, the Group has a non-recourse bank loan. As defined in the bank agreement, TDF Fiber may have these financing lines available only to cover the needs of the Group's Fiber entities.

The conditions remain unchanged compared to December 31, 2023. The bank agreement notably includes a covenant which is respected as of June 30, 2024.

Regarding the disposal project of the Group’s Fiber activity (see note 1) and in accordance with IFRS 5, on June 30, 2024, this bank debt line is disclosed in the balance sheet among the liabilities of discontinued operations. See also note 6 on discontinued operations’ information.

5. Operating segments

Pursuant to IFRS 8, the Group reports its results and assets by operating segment. The determination of the operating segments reflects the Group’s internal reporting structure. The results of all operating segments are regularly reviewed by Group senior management with a view to assessing their performance and to taking decisions on the resources to allocate to each segment.

Specifically, as of June 30, 2024, the Group's Fiber business is considered as a discontinued operation within the meaning of IFRS 5.

Thus, the Towers France CGU itself represents more than 90% of revenues, assets and profits of the Group. The results of the Group are therefore reviewed as a whole.

Consequently, at June 30, 2024:

-       the Fiber operating segment is no longer disclosed in the Group's segment reporting,

-       the Group, as presented, does not include the part of the Fiber business historically included in the Towers operating segment and the Towers France CGU, as it will ultimately be sold as part of the transaction through the sale of the Lumière Fibre entity (a newly incorporated vehicle, to which TDF SAS is expected to contribute its operating units providing engineering, maintenance, deployment and commercialization services for optical fiber networks), see note 1.

However, as a transitional measure, and given that the sale transaction has not yet been completed, the Group's review of results is carried out as of June 30, 2024, in particular regarding the relevance of some ratios, based on the following indicators:

-       EBITDAaL of Towers segment before IFRS 5, reflecting the Group's EBITDAaL without restating the portion of the Fiber business historically included in the Towers operating segment,

-       Leverage of Towers segment before IFRS 5, which does not include the expected gain or the proceeds from the transaction at this stage of the disposal project.

Under IFRS 8, the Group discloses revenue by business lines (see notes 7.1) which are broken down as follows:

-       Telecom and Services: hosting of broadcasting and reception equipment on Group’s sites (including rooftop and indoor coverage) providing maintenance and engineering services, locating sites, data centers, Edge Computing solutions.

-       Television: carrying and broadcasting digital signals and related services, -           Radio: carrying and broadcasting analog and digital signals and related services, -     Private mobile network (PMN).

Finally, figures disclosed hereafter represent the way the Group activity is reviewed internally, in particular the key indicator “EBITDAaL“, which is EBITDA:

o   restated from expenses related to operating leases,

o   restated from charges booked in application of IFRS 2 (which are in the Group’s case without cash impact), o restated from all charges corresponding to severance payments and recognized over the period (legal and transactional severance payments) among the Group, and all fees directly related (lawyers, etc.)

Therefore, indicators below are disclosed without any presentation impact related to operating leases restatement under IFRS 16:

o   Operating cash available after operating leases, o           Operating capex excluding increase of Right of use asset, o             Net debt excluding Shareholder’s loan, accrued interests and lease liability.

6. Discontinued operations, assets held for sale and disposed entities

                         6.1          Discontinued operations

On 18 April 2024, TDF and “La Banque des Territoires” entered into exclusive negotiations with DIF Capital

Partners to sell the Fiber business of the Group.

Therefore, as of June 30, 2024, Fiber activity of the Group is qualified as a discontinued operation within the meaning of IFRS 5.

Consequently, in the financial statements disclosed:

-       all income and expenses of the Fiber business have been reclassified on the line "Net loss from discontinued operations" over the various periods presented in the Group income statement,

-       all Fiber business cash flows have been reclassified on the line "Cash flows from discontinued operations" over the various periods presented in the Group cash flow statement,

-       assets and liabilities relating to the Fiber business have been reclassified on the lines "Assets and liabilities held for sale or discontinued operations" on June 30, 2024.

Furthermore, regarding the expected disposal result, no provision has been recorded in the Group's financial statements at June 30, 2024.

The detail of incomes and expenses reclassified on the line "Net loss from discontinued operations" is presented below:

Revenue

Other income

Consumed purchases

External expenses

Personnel cost

Profit/loss on disposal of non current-operating assets Other expenses

Depreciation, amortisation and impairment losses

Impairment of goodwill & intangible assets identified in business combinations

Other operating income and charges

OPERATING INCOME

Financial income and expenses

Income tax

NET LOSS OF DISCONTINUED OPERATIONS

The detail of the cash flows reclassified on the line "Cash flows from discontinued operations" is presented below:

The details of assets and liabilities related to the Fiber activity over the various periods disclosed is as follows:  

In thousand euros

Non-current liabilities Bank debt

Other financial debts

Provisions

Deferred tax liabilities

Other non-current liabilities

TOTAL NON-CURRENT LIABILITIES

Current liabilities

Other financial debts

Provisions

Trade payables

Tax and social liabilities

Other current liabilities

Accrued interest

                         6.2          Assets held for sale and disposed entities

At June 30, 2024, the Group does not have any assets held for sale in the meaning of IFRS 5.

7. Notes to the statement of comprehensive income

General comment: the incomes and expenses of the Fiber business, qualified as a "discontinued operation" under IFRS 5, have been restated from the "June 2024" and "June 2023 restated" columns, but not from the “June 2023 published” column (see notes 1 and 6).

                         7.1           Revenue

In thousands euros

Digital Television

Radio

Private Mobile Networks (PMN)

Total Broadcasting Services & Networks

Telecom: site hosting

Telecom: other services

Total Telecoms & Services

Fiber

Others Total revenue

                         7.2           Other income and expenses (in current operating income)

In thousands euros

Other income

Other income and expenses mainly comprise compensations from insurance and change in work in progress. 

In thousands euros

Business tax

Property tax

Other taxes

Provision on receivables - Prov. for risks and charges

Other operating expenses

Other expenses

The line "Provision on receivables – Prov. For risks and charges" includes changes in provision for risks and charges and changes in provisions on trade receivable and other current assets. It mainly includes charges to provisions for litigation and reversals of provisions for dismantling.

The lines Property tax and Other taxes are impacted by the effect of the IFRIC 21 standard. Indeed, according to IFRIC 21, annual charges related to Property tax, IFER and C3S taxes have to be fully recognized on January 1^st. 

                         7.3           Consumed purchases

In thousands euros

Material purchases

Energy and fuels

Other purchases including change in inventory

Capitalized purchases

                         7.4           Personal cost

In thousands euros

Salaries & wages

Social security contributions

Tax contributions on salaries & wages

Statutory employee profit sharing

Post-employment benefits : defined benefit plans Post-employment benefits : defined contributions

Share based payments

Other personnel costs

Capitalized personnel costs

                                                  Total personnel costs                                (54 175)         (51 203)

Other personnel costs largely comprise of contractual employee profit sharing, various staff expenses (workers’ council, lunch contribution, Committees for Occupational Health and Safety etc.), and accruals for vacation and other employee costs.

In addition, personnel costs include -€3.5m (-€1.5m in as of June 30, 2023) corresponding to severance payments recognized over the period (legal and transactional severance payments) among the Group, and all fees directly related such as legal fees.

                         7.5          External expenses

In thousands euros

Real estate

Technical subcontracting

Administrative subcontracting

Expenses linked to personnel

Surveys & consulting fees

External & internal communication costs

Corporate fees

Insurance

Other capitalized charges

External expenses

                         7.6          Profit on disposal of non-current operation assets

Profit on disposals over the various periods disclosed mainly corresponds to assets sales completed by TDF SAS. 

                         7.7           Depreciation, amortization, and impairment losses

In thousands euros

                         7.8           Other operating income and charges

Other operating income and charges mainly include income and costs, which are significant and unusual, and are recognized in non-recurrent operating income (below EBITDA, see also the note 2.1) notably:

-       the effects and adjustments related to acquisitions and disposals of entities on the disclosed and previous periods;

-       different changes on provisions for dismantling, for which the corresponding asset is fully depreciated, following the update of the best estimate of the outflow related to the future dismantling.

                         7.9          Net finance costs

Net finance costs can be broken down as follows:

In thousands euros

Finance expenses linked to debt : Bond

Finance expenses linked to debt : Bank debt revolving

Finance expenses linked to debt : Shareholder

Finance expenses linked to debt : Capex facility

Finance expenses linked to debt : Fiber project

Finance expenses linked to debt : Financial lease

Finance interests linked to lease liability : IFRS 16

Finance expenses linked to debt : Other debts Refinancing costs

Result on financial instruments measured at amortized cost (b)

Capitalisation & amortisation of loan issue expenses (c)

Profit (loss) related to derivatives (d)

Total finance expenses (e) = (b) + (c) + (d)

Net financial debt cost (a) + (e)

Concerning the shareholder loan of €1063.6m towards Tivana France Holdings (amount unchanged vs 2023) quarterly interests on that debt can be, according to what TDF Infrastructure determines: 

o capitalized o paid o or the payment can be deferred, without the interests being capitalized.

Regarding financial expenses linked to bond debt, the changes between the two periods disclosed is mainly explained by the additional bond issuance of €600 million, with a fixed coupon of 5.625% carried out in July 21,

2023.

Regarding financial expenses linked to bank debt Revolving and Capex Facility, the changes between the two periods disclosed is in relation with debt drawdowns carried out on these credit lines (see note 9.1 and 10.4) and the changes in euro zone EURIBOR interest rates.

See notes 4.4 and 9.1 describing the change in financial debt and their characteristics.

On June 30, 2024, excluding shareholder debts and lease liability, the average interest rate on financial debt is 3.63% (2.65% on June 30, 2023, after IFRS 5 restatement of Fiber business), including financing costs and hedging income.

Other financial income and charges are as follows:

In thousands euros

Net discounting costs excluding net debt

Forex gains (losses)

Other financial expenses & Income

Other financial revenues / charges

Net discounting costs mainly concern discounting effects on provisions and deferred income.

Finance income and expenses recognized under other comprehensive income are as follows:

The changes in the fair value of cash flow hedging instruments relates exclusively to derivatives instruments in relation with defined tranches of the bank financing dedicated to fiber entities. Thus, according to IFRS 5, those changes are reclassified in the line “Other comprehensive income or loss from discontinued operations”.

                         7.10        Income tax

From April 1, 2015, a tax consolidation group was created headed by Tivana France Holdings (single shareholder of TDF Infrastructure Holding SAS since March 31, 2015, itself sole shareholder of TDF Infrastructure SAS). All

French entities owned directly or indirectly at least 95% by Tivana France Holdings SAS are included in this tax group (“French tax group”).

The scope of the tax consolidation group being therefore greater than the consolidation of TDF Infrastructure SAS group, it should be noted that the effects of the tax consolidation (recognition of the tax group benefit and the Tax Group's tax loss carried forward) are not recognized in these consolidated financial statements. On the contrary, each entity calculates its tax expense on its own and recognizes its tax loss carried forward (or not) on its own, according to its own results and its own perspective to use or not the tax loss carried forward it generates.

The income tax expense is calculated applying the effective interest method as prescribed under IAS 34, based on the annual forecast and June 2024 earnings. The forecasted effective tax rate is calculated excluding any impacts of disposal of subsidiary or activity and in particular excluding any impairment of goodwill if it is not subject to tax.

The income tax of the period is analyzed below:

In thousands euros

Current tax expense

Other income tax expense

Deferred tax expense

Income tax expense from continuing operations

Income tax from discontinued operations and disposed entities

Note that among the €24.4m of current tax expenses mentioned above, €24.4m concern entities belonging to the tax consolidation group (“French tax group”), of which TDF SAS, and are offset at the tax consolidation group level by loss of other companies, such as Tivana France Holdings SAS, TDF Infrastructure Holding SAS or TDF Infrastructure SAS (see hereafter).

Income tax recognized in other comprehensive income is analyzed below:

In thousands euros

   Currency translation differences for foreign operations                                                                     677

    Cash flow hedges                                                                   -                                                     -(1 687)                                                 435

   Actuarial gains on defined benefit plan                                   1 359                                                (351)1 336                                                (345)

    Others                                                                                                                                 --

                                   Total                                         1 365         (351)

The reconciliation between the theoretical income tax based on a theoretical income tax rate and the income tax based on the effective tax rate method (as prescribed by IAS 34 for interim financial statements and based on annual forecasts) is provided below: 

In thousands euros

Profit (loss) for the period

Total income tax for the period

Profit (loss) excluding income tax

Theoretical income tax based on the French statutory income tax rate

Actual income tax

(1) This deferred tax income relates to the Group decision to classify CVAE as income tax

As of June 30, 2024, the theoretical income tax rate used corresponds to the preponderant rate in the Group's French activities.

On June 30, 2024, depreciations or non-recognition of tax loss carried forward assets are mainly related to TDF Infrastructure SAS (€12.4m against €9.1m as of June 30, 2023). 

These deferred tax assets are not recognized, since these entities do not have strong enough forecasts demonstrating consumption of tax loss carried forward but note that a tax consolidation is done above TDF Infrastructure SAS level (see above). 

The line "impact of discontinued operations " corresponds to the effects of reclassifying the contribution of the Fiber business under IFRS 5 in the reconciliation between the income tax at the theoretical rate and the income tax calculated using the effective tax rate method.

8. Notes to the balance sheets: assets

General comment: the assets and liabilities of the Group's Fiber business are disclosed in the columns “December 2023” and “June 2023” but not in the column “June 2024” due to the reclassification of this activity as a discontinued operation according to IFRS 5 at June 30, 2024 (see notes 1 and 6).

Except for deferred taxes that are classified as non-current assets or liabilities, assets and liabilities are classified as current when the amounts are expected to be recovered or settled no more than 12 months after the reporting date. If this is not the case, they are classified as non-current.

                         8.1           Goodwill

The CGUs or groups of CGUs that were selected for goodwill impairment testing are Towers France, PSN Infrastuktura and Levira.

On June 30, 2024, the Fiber CGU is subject to a disposal project and, in accordance with IFRS 5, is presented as a discontinued operation (see notes 1 and 16).

As of June 30, 2024, the Group goodwill breakdown among the various CGUs or CGU groups is as follows:

In thousands euros

Towers France

Levira

On June 30, 2024, the increase in the goodwill of Levira CGU corresponds to the acquisition of 100% of the Estonian entity AA-SAT, specialised in satellite communications, on February 19, 2024 (see note 16).

                         8.2          Intangible assets

Intangible assets are analyzed below:

          Gross value at January 1, 2024                1 359 890

                          In thousands euros                                          Total

Impairment losses at January 1, 2024

     Reclassifications                                                                            (3)

Since no trigger event occurred at June 30, 2024 (see the note 3.7), no impairment test was performed on brands with an indefinite useful life (included in intangible assets). The net book value of these brands is €23.0m at June 30, 2024.

As of June 30, 2024, and as of December 31, 2023, acquisitions of intangible assets mainly include completed or in progress roll-out of fiber optic networks in sparsely populated areas, in accordance with IFRIC 12 standard (Service Concession Arrangements) which is into force for this activity.

At June 30, 2024, in the context of the disposal project of the Group's fiber business (see note 1), the intangible fixed assets recognized under IFRIC 12 related to completed and ongoing rollouts of fiber optic networks have been reclassified and presented under assets of discontinued operations, in accordance with IFRS 5.

                         8.3           Property, plant, and equipment

Property, plant, and equipment are analyzed below:

Gross value at January 1, 2024

Acquisitions166 532

Disposals(20 493)

Reclassifications(27 256)

Changes in consolidation scope17

Other changes in consolidation scope (IFRS 5)(174 335)

Currency translation adjustments21

Gross value at June 30, 2024

Amortization at January 1, 2024

Office furniture, Broadcasting

                                                                                   Land & buildings                                office and computer           Others                    Total

network equipment

Tangible assets notably include assets recognized under the right of use (IFRS 16), thus presented in LandBuildings and Other tangible assets.

                         8.4           Trade receivables and other current and non-current assets

Other current and non-current assets are as follows:

                         In thousands euros                                                                                                      

Inventories,including items in progress16 806                                                                                                                       (3 316)

                             In thousands euros                                                                                                     

                                                                  Trade accounts receivables218 606                                                                         (6 706)

                                                             Trade receivables on disposal of assets114                                                                             -

Change in the trade accounts receivables is mainly related to seasonality effect in customer invoicing on certain activities of the Group.

     Credit notes not yet received                                                             -                                             -4                                            -

     Advance payment - corporate income tax                                   1 341                                         -1 365                                         -

      Tax and social security receivables                                          30 521                                        -43 822                                        -

     Prepaid expenses                                                                      4 754                                         -3 534                                         -

     Other receivables                                                                    10 828                                  (625)17 345                               (1 130)

     Non-current receivables                                                               995                      -

      Loans, security deposit, guaranty                                               6 509                (76)

9. Notes on the balance sheet: equity and liabilities

General comment: the assets and liabilities of the Group's Fiber business are disclosed in the columns “December 2023” and “June 2023” but not in the column “June 2024” due to the reclassification of this activity as a discontinued operation according to IFRS 5 at June 30, 2024 (see notes 1 and 6).

Except for deferred taxes that are classified as non-current assets or liabilities, assets and liabilities are classified as current when the amounts are expected to be recovered or settled no more than 12 months after the reporting date. If this is not the case, they are classified as non-current.

                         9.1           Financial debt 

As of June 30, 2024, the main part of financial debt consists of unsecured senior external debt held by bondholders (bond debt), bank debt, Fiber non-recourse project debt, as well as a shareholder loan. Overall, the Group’s financial debt is analyzed and has varied as described below:

In thousands of euros

Bond

including term debt including loan issuance costs

Bank debt including loan issuance costs including revolving debt including capex facility 2021

Fiber project debt including loan issuance costs including term debt including revolving debt

Shareholders' debt

Finance lease debt

Operational investments debts

Lease liability (IFRS 16)

Other financial debts

Bond debt

As of June 30,2024, no change since December 31^st, 2023.

Bank debt

Revolving credit line subscribed as part of the “Credit Facility Agreement” as of July 10th, 2023

As of June 30, 2024, and as of December 31, 2023, this credit line is not used.

On May 14^th, 2024, TDF Infrastructure SAS obtained the agreement from all the lenders concerned, allowing to exercise a one-year extension option bringing to July 10, 2029 the maturity of the revolving credit facility (see note 1).

Capex facility 2021

As of June 30, 2024, and as of December 31, 2023, this credit line is used for an amount of €300m. 

Capex facility 2023

As of June 30, 2024, and as of December 31, 2023, this credit line is not used.

On May 14, 2024, TDF Infrastructure SAS obtained the agreement from all the lenders concerned, allowing to exercise a one-year extension option bringing to July 10, 2027 the maturity of the Capex Facility (see note 1). Other conditions remain unchanged from December 31, 2023.

Bank debt line dedicated to Fiber entities

As part of the ongoing disposal of the Group's Fiber business, this credit line is reclassified under "Liabilities held for sale or discontinued operations" for the first time on June 30, 2024. The main conditions are unchanged from December 31, 2023.

Shareholders loans

No change since December 31, 2023.

Lease liability (IFRS 16)

In accordance with the application of IFRS 16, a financial debt was recognized under the lease liability.

In relation with the principles of the standard:

-          New leases concluded during the period are recognized as an increase in lease liability for the present value of expected payments, 

-          Decrease in lease liability represents the part of rental paid on the period and affected to the repayment of the financial debt, after deduction of the interest expenses (see the note 7.9).

Other financial debts

Other financial debts of €12.2m at June 30, 2024 mainly correspond to current accounts with Tivana France

Holdings and TDF Infrastructure Holding (direct and indirect shareholders of the Group) for a total amount of €12m

(€4.7 as of December 31, 2023);

Financial debt (excluding accrued interests) is analyzed by maturity below: 

Bond debt

Bank debt

Fiber project debt

Shareholders' debt Finance lease debt

Operational investments debts

Lease liability (IFRS 16)

Other financial debts

                         9.2           Employee benefits 

In the first half of 2024, the change in eurozone interests’ rates impacted the discount rate used when calculating the provision for retirement benefits.

As of June 30, 2024, the discount rate used to calculate this provision is 3.7% (3,2% as of December 31, 2023).  Considering this change of assumption, the Group has recognised actuarial gains for €1.4m to recognize the decrease of the provision (see note 9.3).

                         9.3           Provisions

                                                   Provision for claims and disputes2 275                                                                         -                  (1 600)                         -                                                                          (2 000)                                                                                                -                       -

                                Provision for dismantling, decommissioning and restoring sites1                                             (1 416)                       325                 1 056                                                                               -                                                                                                -                         (7 928)

                                                Prov for bringing into compliance of sites-                                                                       -                           -                         -                                                                              -                                                                                                     -                           -

                                                                  Other provisions1                                                                                  (690)                     (380)                         -                                                                               -                                                                                                 0                           -

Provisions Currency Discounting  translation

                                     In thousands euros                                         Dec 2022           additions       utilisations         unused                                   Others

adjustment

  Prov. for post-employment benefits (pension, retirement benefit)            32 259                           1 472                        (46)                              -                                                       -                                                                     1                               (1 336)

   Provision for claims and disputes                                                                8 621                               220                              -                    (1 596)                              -                                                                                               -                                     -

  Provision for dismantling, decommissioning and restoring sites               59 232                                  1                   (1 162)                       (744)                                                   876                                                                     -                                    (507)

   Prov for bringing into compliance of sites                                                      461                                   -                              -                              -                                     -                                                                                          -                                      -

    Other provisions                                                                                           1 150                               232                          (2)                              -                 -                                                                                                            1                                     -

Presented as current    16 366 Presented as non-current         85 357

33

A provision is recognized when:

-          there exists a current, legal, or implicit, obligation arising from a past event,

-          it is likely that an outflow of resources representing economic benefits will be required to discharge this obligation, and 

-          the value of the obligation can be estimated with a sufficient degree of reliability.

Such obligations may be of a legal, regulatory, technical, or contractual nature. They may also stem from the Group’s practices or public commitments that have given rise to legitimate expectations on the part of the third parties concerned that the Group will assume certain responsibilities.

The amount recognized as a provision is the best estimate of the outflow of economic benefits required to settle the present obligation at the reporting date. If the value cannot be estimated reliably, no provision is recognized; the obligation is then disclosed as a contingent liability (see note 12.1).

Claims and disputes, other provisions

Claims and disputes mainly arise from litigation the Group is facing, as well provisions for negative disposal result of entities.

These provisions are assessed and updated by senior management applying prudence in relation to damages claimed and the status of each case. 

Provisions for dismantling, decommissioning, and restoring sites

In accordance with IAS 37 "Provisions, Contingent Liabilities and Contingent Assets", the amount recognized as a provision is the best estimate of the expenditure required to settle the Group’s obligations.

The provision is discounted to present value using a rate that reflects the time value of money, based on the yield of a risk-free bond. This actuarial estimate is reviewed every year and, if necessary, the provision is adjusted in the following way (in accordance with IFRIC 1):

-       by addition or deduction to/from the corresponding dismantling asset,

-       or if the dismantling asset is already totally depreciated, the provision adjustment is taken to profit or loss.

As of June 30, 2024, the change in provision for dismantling is mainly impacted by the increase of the discount rate (3.7% at the end of June 2024 against 3.1% at the end of December 2023), in the context of the change of interest rates in the eurozone.

                         9.4           Other current and non-current liabilities

Other liabilities are analyzed below:

                                                                  In thousands euros                            June 2024

Trade payables

Trade payables on fixed assets aquisitions

Corporate income tax liabilities

Tax and social liabilities

Dividends payable

The tax and social liabilities primarily include cotisation foncière des entreprises (i.e., "CFE"), social security payables, VAT, and employee vacation provisions. 

As of June 30, 2024, the current liabilities include a dividend payable of €80m, to be paid by TDF Infrastructure SAS to TDF Infrastructure Holding SAS (sole shareholder of the Group). The payment of this dividend, enacted by decision of the sole shareholder on April 4th, 2024, was paid in cash in July 2024.

Other current and non-current liabilities include deferred income of €237.4m (€424.4m as of December 31, 2023) of which €166.6m is maturing after one year (€387.4m at December 31, 2023). The decrease observed compared to December 31, 2023 is mainly due to the reclassification, on June 30, 2024 of the assets and liabilities of the Fiber business as “assets and liabilities from discontinued operations” in accordance with IFRS 5 (see note 1). 

10.  Cash flows

General comments: 

-       the cash flows of the Fibre business, qualified as a "discontinued operation" within the meaning of IFRS 5, are restated in the "June 2024", "December 2023 restated" and "June 2023 restated" columns, but not in the "December 2023 published" and "June 2023 published" columns (see notes 1 and 6),

-       the line "Cash flows from discontinued operations" corresponds to the change in cash and cash equivalents of fiber entities (see note 16) in accordance to IFRS 5.

                         10.1        Cash generated from operating activities before changes in working capital

Cash generated from operating activities excludes cash flows on non-current asset sales/purchases, income tax and finance costs which are disclosed under Cash flows from investing activities, Income tax paid and Cash flows from financing activities respectively.

                         10.2        Changes in working capital

In thousands euros

                         10.3        Net cash used in investing activities

At June 30, 2023, the line “Net proceeds from disposals of subsidiaries “corresponds mainly to acquisitions of operating fixed assets.

                         10.4        Net cash used in financing activities

At June 30, 2024 - drawdowns and repayment of debts are principally composed of: o drawdowns on the revolving credit line for €50m, which generated repayments of €(50)m over the period

o   drawdowns of current accounts with Tivana France Holdings (indirect shareholder of the Group) for

€7.2m  o Repayments of rental obligation debt for €(24.4)m -   The “financial interest “line corresponds mainly to: 

o   The €(16.3)m payment related to the annual coupon on the €650m bond debt issued on April 7,

2016, o cash outflows for rent presented as interests’ expenses, in accordance with the application of IFRS

16

At June 30, 2023 -         drawdowns and repayment of debts are principally composed of: o drawdowns related to the use of the revolving credit line for a cumulated amount of €225m, which generated a repayment of €(225)m over the period,  

o   drawdowns on the term loan dedicated to the Fiber entities activity for €63m (disclosed in the cash flows from discontinued operations in the column “June 2023 restated”).

o   current account net proceeds with TDF Infrastructure Holding and Tivana France Holdings (direct and indirect shareholders of the Group) for €23.3m,

o   cash outflows for rents of €(21.8)m presented as repayment of lease liability. -      the line “Financial interests“ mainly corresponds to: o the €(20)m payment related to the annual coupon on the €800m bond debt issued on April 7, 2016, o cash outflows for rent presented as interests’ expenses, in accordance with the application of IFRS

16.

Concerning the table of changes in financial liabilities disclosed in note 9.1:

-       At June 30, 2024: o increase in lease liability following IFRS 16 over the period (€51.7m), has no cash impact, the counterpart being the recognition of a fixed asset under right of use of assets rent,

o   the change in issuance costs (€2.8m) and the increase in finance lease debts (€3.6m) have no cash impact,

o   the €25 million change in financial debt on the fiber project debt and the (€0.7m) change in operational investments debts, reclassified as cash flow from discontinued operations, have no effect on cash flow from continuing operations (see notes 1 and 6) and are therefore not included in cash flow from financing activities,

o   thus, after restatement of these items, changes in financial debts disclosed in note 9.1 represent a negative net cash impact from continuing operations of €(17.1)m.

-       At June 30, 2023: o increase in lease liability following IFRS 16 over the period (€42.4m), has no cash impact, the counterpart being the recognition of a fixed asset under right of use of assets rent,

o   the change in bond issuance costs (€2.1m) and the increase in finance lease debts (€2.4m) have no cash impact,

o   increase of operational investments debts (€7.9m) has no cash impact, the counterpart being the recognition of a fixed asset,

o   thus, after restatement of these items, changes in financial debts disclosed in note 9.1 represent a positive net cash impact of €62m.

11.  Workforce

Total Group headcount is as follows:

France

International

                                                                       Total workforce at closing                           1 877             1 988

12.  Contingent liabilities and off-balance sheet commitments

                         12.1        Contingent liabilities (assets)

Contingent liabilities correspond to:

-       Possible obligations arising from past events whose existence will only be confirmed by the occurrence of uncertain future events that are beyond the company’s control; or

-       Present obligations arising from past events, which are not recognized because it is not probable that an outflow of resources representing economic benefits will be required to settle the obligation or because the obligation amount cannot be measured with sufficient reliability.

Contingent liabilities as of June 30, 2024

The French Competition Authority, after having initiated a procedure against the Group in June 2018, decided in January 2020 that, in the end, there were no reasons to pursue the said procedure. Following an appeal, this decision has been canceled in June 2024 and the case has been referred to the Competition Authority for further investigation. However, this referral decision is subject to an appeal.

No other significant developments since December 31, 2023.

                         12.2        Firm commitments

A. Operating lease commitments – Group as lessee 

At June 30, 2024, the Group directly recognizes in financial debt the lease liability related to rights of use of leases, in accordance with IFRS 16 (see the note 9.1).

B. Firm purchase commitments

Firm purchase commitments made by the Group are as follows:

years years

                                                                            In thousands euros< 1 year                                               > 5 years

The change in commitments of capex is notably explained by the restatement of fiber business as discontinued operations within the meaning of IFRS 5 as of June 30, 2024 (see note 1).

C. Firm commitments to provide services 

Under multi-year contracts with customers, Group entities have committed to provide services in the following business lines:

1 to 5

                                                           In thousands eurosProjection                            < 1 year                       > 5 years

years

                                                                    Digital Television153 400                                                                          228 311                22 629

                                                                            Radio108 613                                                                                   225 813                    733

                                                              Private Mobile Networks (PMN)-                                                                                -                         -

                                               Total Broadcasting Services & Networks262 013                                                     454 124               23 362

Telecom: site hosting390 394 1 456 351 2 059 662 Telecom: other services23 991 44 999 92 042 Total Telecoms & Services414 385 1 501 350 2 151 704

                                                                                  Fiber-                                                                                                    -                         -

                                                                              Others2 108                                                                                           982                         -

                                                                             Radio98 250                                                                                    213 691                 3 129

                                                              Private Mobile Networks (PMN)-                                                                                -                         -

                                               Total Broadcasting Services & Networks245 101                                                     475 484               32 445

Telecom: site hosting369 619 1 342 618 1 894 802 Telecom: other services27 338 45 324 97 823 Total Telecoms & Services396 957 1 387 942 1 992 625

                                                                              Fiber53 607                                                                                    208 878              848 428

                                                                              Others3 001                                                                                        1 402                         -

The above table shows known and estimated information to date. In future periods, certain contracts may be subject to pricing adjustments.

On December 31, 2023, the future contractual revenue of the Fiber business amounted to 1.1 billion euros. On June 30, 2024, the future contractual revenue for this business is no longer presented, following its qualification as a discontinued operation under IFRS 5 (see note 1).

                         12.3        Contingent commitments

Guarantees given and received

As of June 30, 2024, bank guarantees given in connection with the Group's business amounts to €9.4 million, compared with €72.6 million as of December 31, 2023 (of which €63.2 million related to the Fiber business, which is classified as discontinued operations under IFRS 5 at June 30, 2024).

As of December 31, 2023, the €72.6 million in guarantees received were all related to the Fiber business which is classified as discontinued operations on June 30, 2024. 

Commitments under bank agreements 

No change on those commitments since December 31, 2023

Other commitments      

No significant change since December 31, 2023.

13.  Shares in associates

At June 30, 2024, as at December 31, 2023, the Group did not own any associates.

14.  Related party disclosures

                         14.1        Compensation of key management personnel

No new compensation scheme towards key management personnel has been set up during 2024 first half year.

                         14.2        Transactions with related parties

The related parties at TDF Infrastructure SAS Group level are identified as:

1.    Companies owned directly or indirectly by TDF Infrastructure Holding SAS,

2.    Companies owned directly or indirectly by Tivana France Holdings or its shareholders, especially Brookfield Infrastructure group, Public Sector Pension Investment Board (PSP Investments), APG Asset Management N.V. and Arcus Infrastructure Partners,

3.    Companies in which directors of the companies included in the TDF Infrastructure SAS group scope are company representatives,

4.    Key management personnel.

The main transactions of the period made with related parties of the TDF Infrastructure SAS group are:

•       Interest charges invoiced to the Group by Tivana France Holdings amounting over the period €33.7m and related to the shareholder loan of €1 063.6m; accrued interests on this loan are of €191.7m at June 30, 2024

(€157.9m as of December 31, 2023), and is disclosed as current liabilities by prudence (see also the note 4.3);

•       A dividend payable to TDF Infrastructure Holding SAS of €80m. This undistributed dividend is disclosed in current liabilities on June 30, 2024, and was paid in July 2024;

•       net receipts of €7.2m from shareholders current accounts (with Tivana France Holdings);

•       €0.1m of income and €2.2m of expenses recognized by the Group over the period related to the management fees agreement with Tivana France Holdings.

Related party transactions were carried out on an arm’s length basis on normal commercial terms.

15.  Significant subsequent events

Sale of the Fiber business : signing of the Sale and Purchase Agreement (SPA)

In continuation of the agreement signed on April 18, 2024, the Group, through the entities TDF SAS and TDF

Infrastructure SAS, as well as the Banque des Territoires signed on July 31, 2024 with DIF Capital Partners the Sale and Purchase agreement (SPA), aimed at selling the Group's Fiber business (as described in note 1) The SPA covers in particular:

-          the conditions precedent to which the completion of the transaction is subject,

-          the determination of the purchase price, possible post-closing adjustment and earn-out mechanism, as well as the corresponding payment terms.

More precisely, as part of the SPA, the Group gave representations and warranties to the buyer in respect of certain specific commitments and risks. Depending on the nature of the items covered, these warranties expire if no claim for compensation has been made by the buyer:

-          either within 3 years after completion of the transaction,

-          either upon extinction of the identified risk,

-          or upon expiry of the applicable limitation period.

Amendment to the shareholder loan towards Tivana France Holdings

On September 3, 2024, TDF Infrastructure signed an amendment to the loan concluded with Tivana France Holdings (sole shareholder of TDF Infrastructure Holding SAS, sole shareholder of the Group). 

This amendment, applicable retroactively to July 1, 2024, modifies the following conditions of the loan:

-          the maturity is extended until March 31, 2035 (initially March 31, 2030) with an optional 5-year extension held by the lender,

-          the fixed interest rate changes from 5.5% to 7.95%

-          the contract now authorizes the repayment of the principal of the loan.

16.  Consolidation scope 

The Estonian subsidiary Levira, in which TDF SAS holds a 49% equity stake and whose financial and operating policies are determined by the Group, is fully consolidated.

On February 19, 2024, Levira acquired 100% of the Estonian company AA-SAT, specialized in satellite communications. This company is fully consolidated in the Group's financial statements on June 30, 2024.

As a reminder, the Group acquired 70% of the TORM’s shares on May 31, 2021. In accordance with IFRS 3 and considering the valuation of the sale agreement obtained on the 30% still held by the historical shareholder, the interest percentage applied is 100%.