ADRIA BIDCO 2013 Financial Results Presentation 29 April 2014
Disclosure Regarding Forward-Looking Statements This presentation includes forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology, including words such as “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will”, “could” or “should” or, in each case, their negative or other variations thereof or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include statements regarding, or based upon, our Management’s current intentions, beliefs or expectations concerning, among other things, our future results of operations, financial condition, liquidity, prospects, growth, strategies, potential acquisitions, or developments in the industry in which we operate. Forward-looking statements are based upon assumptions and estimates about future events or circumstances, and are subject to risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will materialize. Accordingly, our actual results may differ materially from those expressed or implied thereby. Unless otherwise specified, forward-looking statements herein speak only as of the date of this presentation. We undertake no obligation, and do not intend, to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above. Readers are cautioned not to place undue reliance on any forward-looking statements. 2
Agenda Introduction 2013 Highlights Operational Review Financial Review Appendices 3
Introduction to Adria Bidco South-East Europe’s leading provider of pay-TV and broadband services 2020 Senior Notes Issuer Adria Bidco B.V. 1.9 million cable and satellite TV, broadband, fixed and mobile RGUs across the six countries of former Yugoslavia Listed GEM, Irish Stock Exchange Operating in a market characterised by rapidly growing pay- Governing Law State of New York TV and broadband that is currently underpenetrated relative € 475 million Outstanding notes to other CEE and Western European markets Coupon 7.875% Unmatched reach via cable and direct-to-home platforms Maturity 15 November 2020 across the region, and ethnically targeted over-the-top content platforms internationally Coupon dates 15 November & 15 May XS0992294388 (Reg. S) Reputation for providing the most attractive content in its ISIN code XS0992293810 (144A) respective markets, available across all devices and formats Group strategy leverages established proven strengths superior network, – differentiated content offerings, and – loyal customer base – to further strengthen market leadership in the region and to target the region’s expat community with best in class local content delivered through the internet Following successful acquisition of the Group in March 2014, Adria Bidco is now indirectly majority-owned by funds affiliated with KKR 4
Agenda Introduction 2013 Highlights Operational Review Financial Review Appendices 5
2013 operational highlights Homes passed (m) 1.3 Homes passed up by 16% to 1.3 million vs. 2012, primarily as a result of network expansion +16% – 75,000 added during Q4 2013 1.1 RGUs up by 19% to 1.9 million since December 2012 2012 2013 – 57% of new additions resulted from acquisitions of cable RGUs (m) companies in Slovenia, Serbia and Bosnia, and world-wide OTT operator Net TV Plus 1.9 +19% Number of unique cable subscribers up by 10% to 812,000 1.6 – 11,000 unique cable subscribers added during Q4 2013 Blended ARPU up by 10% year-on-year to € 17.0 2012 2013 – Migration from lower-priced analogue to higher-priced digital pay-TV services among key drivers Blended cable ARPU ( € ) ARPU of € 16.8 in Q4 2013 vs. € 17.0 for Q3 2014 – 17.0 +10% 15.4 2012 2013 6
2013 financial highlights Strong growth in consolidated group revenues to € 243.0m Revenues (EUR m) SBB Serbia: € 126.8 million – 243.0 Telemach Slovenia: € 75.2 million – +27% Telemach BH: € 19.2 million – United Media: € 26.9 million – 191.5 Q4 2013 revenue up by 12% to € 67.0 million vs. Q3 2013 – Adjusted EBITDA up 20% to € 110 million 2012 2013 Acquisitions contributed c. € 6.5 million to EBITDA – Q4 2013 adjusted EBITDA up by 4% to € 28.7 million vs. Q3 – 2013 Adjusted EBITDA (EUR m) Stable annual operating cash inflow of € 70.2 million due to – positive operating results, and 110.0 +20% – improved working capital, partially offset by… 91.4 higher CAPEX compared to 2012 at € 81.3million driven by – increased investments in all cable groups (SBB Serbia, Telemach Slovenia, Telemach Bosnia) and United Media Group 2012 2013 Total capex of € 21.9 million in Q4 2013 – Net leverage in 2013 at 4.22x 7
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Network expansion driven by bolt-on acquisitions Homes passed across key markets Key developments NetTV.plus - OTT content platform, which distributes local ethnic content to former Yugoslav expats around the world – Acquired in Q3 2013 '000 – Over 150 local-language channels 843 797 – Community of 4.7 million people in Western Europe, North America and Australia – 59,000 subscribers as at 31 Dec 2013 – Significant future growth opportunities Kabel TV & Elektro Turnsek - Slovenian 297 cable companies 243 191 Acquired in H1 2013 – 107 Added 72,000 cable pay-TV RGUs to – customer portfolio 2012 2013 2012 2013 2012 2013 JET TV and United Media Production acquired in Serbia during H1 2013 SBB Serbia* Telemach Slo Telemach BH – Added 15,000 cable pay-TV RGUs to *Includes KDS and JET TV subscribers in Serbia customer portfolio Art Net acquired in Bosnia during Q1 2013 United Group Distribution , operating across the former Yugoslav region, acquired in Q1 2013 9
RGUs Key developments RGUs by service RGUs up by 19% to 1.9 million since 2012, driven by '000 +11% organic growth, and – 806 – acquisitions (Slovenia, Bosnia, 725 Serbia) +10% +20% 424 400 363 354 Cable pay-TV RGUs positively affected +52% +11% by organic growth and acquisitions in 168 111 Slovenia - 59 29 26 Cable pay-TV DTH pay-TV IPTV Broadband Fixed Other Growth in telephony RGUs driven by internet telephony services acquisitions in Slovenia and increase in multi-play subscriptions over the 2012 2013 period Slovenia 55,000 IPTV RGUs added through the Serbia* Bosnia 3% 1% acquisition of Net TV Plus 2% 2% 10% 42% 20% 27% 43% 58% 30% 34% 28% *Revenues from DTH pay-TV services for all six countries of operation reported under SBB Serbia 10
Continued growth in blended cable ARPU Key developments ARPU per unique subscriber 2013 blended cable ARPU up 10% to € 17.0 Cable ARPU per country ( € ) Blended cable ARPU ( € ) ARPU of € 16.8 in Q4 2013 vs. € 17.0 for Q3 – 16.8 28.1 27.2 2014 SBB Serbia +9% – Delayed price increase approved from April 14.8 12.9 15.4 2014 11.7 11.4 – Promotional campaigns – Lower telephony traffic – FX impact 2012 2013 2012 2013 2012 2013 2012 2013 Telemach Slovenia SBB Serbia* Telemach Slo Telemach BH – Growth in subscribers for multi-play offering – Subscriber migration from lower-priced analogue cable pay-TV services to higher-priced digital pay-TV services SBB Serbia* Telemach Slovenia Telemach BH – Price increase for triple-play package in € 2013 2012 2013 2012 2013 2012 Telemach BH Cable pay-TV 7.6 7.0 16.2 16.3 7.8 6.5 Growth in subscribers for multi-play offering – Broadband Price increases for cable pay TV and internet 11.0 10.8 15.6 15.6 10.8 9.3 – broadband internet services Telephony 6.3 8.0 5.0 5.8 13.0 11.9 Higher telephony services revenues – *Includes KDS and JET TV subscribers in Serbia 11
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Revenue development Key drivers 2013 revenue development Group revenue up by 27% to € 243.0 million from 2012 due to acquisitions, organic growth, and overall increase in ARPU (EUR m) SBB Serbia 67.0 Revenue up by 13% to € 126.8 million +27% driven by subscriber base growth and migration to multi-play packages 59.7 Telemach Slovenia 58.5 57.8 Revenue up by 15% to € 75.2 million due to: Q1 2013 Q2 2013 Q3 2013 Q4 2013 – acquisitions – continued subscriber migration to higher-priced digital pay TV 126.8 services 112.2 – increase in the number of multi- play subscribers 75.2 65.6 Telemach BH Revenue up by 40% to € 19.5 million due to a mix of acquisitions and organic subscriber base growth 19.2 13.6 United Media Group Generated revenues of € 26.9 million in SBB Serbia Telemach Slovenia Telemach Bosnia line with gradual subscriber base growth 2012 2013 of the Group and overall market 13
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