ADRIA BIDCO Q1 2014 Financial Results Presentation 26 June 2014 - - PowerPoint PPT Presentation

adria bidco q1 2014 financial results presentation
SMART_READER_LITE
LIVE PREVIEW

ADRIA BIDCO Q1 2014 Financial Results Presentation 26 June 2014 - - PowerPoint PPT Presentation

ADRIA BIDCO Q1 2014 Financial Results Presentation 26 June 2014 Disclosure Regarding Forward-Looking Statements This presentation includes forward-looking statements. Forward-looking statements can be identified by the use of forward-looking


slide-1
SLIDE 1

Q1 2014 Financial Results Presentation

26 June 2014

ADRIA BIDCO

slide-2
SLIDE 2

2

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.

Disclosure Regarding Forward-Looking Statements

slide-3
SLIDE 3

3

Q1 2014 Highlights Financial Review Appendices

Agenda

Introduction Operational Review

slide-4
SLIDE 4

4

Introduction to Adria Bidco

South-East Europe’s leading provider of pay-TV and broadband services

1.9 million cable and satellite TV, broadband, fixed and mobile RGUs across the six countries of former Yugoslavia

Operating in a market characterised by rapidly growing pay- TV and broadband that is currently underpenetrated relative to other CEE and Western European markets

Unmatched reach via cable and direct-to-home platforms across the region, and ethnically targeted over-the-top content platforms internationally

Reputation for providing the most attractive content in its respective markets, available across all devices and formats

Group strategy leverages established proven strengths

extensive 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 majority-owned by funds affiliated with KKR

2020 Senior Notes

Issuer Adria Bidco B.V. Listed GEM, Irish Stock Exchange Governing Law State of New York Outstanding notes €475 million Coupon 7.875% Maturity 15 November 2020 Coupon dates 15 November & 15 May ISIN code XS0992294388 (Reg. S) XS0992293810 (144A)

slide-5
SLIDE 5

5

Q1 2014 Highlights Financial Review Appendices

Agenda

Introduction Operational Review

slide-6
SLIDE 6

6

Q1 2014 operational highlights

Homes passed up by 16% to 1.3 million vs. Q1 2013, primarily as a result of network expansion

11k of new homes passed added during Q1 2014

RGUs up by 17% to 1.9 million since Q1 2013 driven by organic growth and acquisitions (Slovenia, Bosnia, and Net TV Plus) − Acquisitions completed in 2013 added c.174k RGUs − 42k of RGUs added during Q1 2014

Number of unique cable subscribers up by 6% to 808k, vs. Q1 2013

Blended cable ARPU up by 4% year-on-year to €17.3 driven by

migration from lower-priced to higher-priced service packages

growth in subscribers for the multi-play offering, and

price increases for triple-play packages

1.16 1.34 Q1 2013 Q1 2014

Homes passed (m)

+16% 1.65 1.93 Q1 2013 Q1 2014

RGUs (m)

+17% 16.7 17.3 Q1 2013 Q1 2014

Blended cable ARPU (€)

+4%

slide-7
SLIDE 7

7

Q1 2014 financial highlights

Consolidated group revenues up 14% year-on-year to €65.9m

SBB Serbia: €31.8 million

Telemach Slovenia: €20.3 million

Telemach BH: €5.4 million

United Media Group: €7.7 million

EBITDA (excl. non-operating expenses) up 21% to €32.2 million

CAPEX for Q1 2014 at €22.3 million compared to the below average CAPEX of €12.2 million in Q1 2013 (FY 2013 CAPEX: €81.3 million), driven by increased investments at SBB Serbia, Telemach Slovenia and Telemach Bosnia.

EBITDA-CAPEX decreased from €14.5 million in Q1 2013 to €9.9 million in Q1 2014 due to continued investment in our network.

Net leverage in Q1 2014 of 4.00x, down from 4.22x at end-2013.*

26.7 32.2 Q1 2013 Q1 2014 +21% 57.8 65.9 Q1 2013 Q1 2014

Revenues (EUR m)

+14%

EBITDA (Excluding non-operating expenses) (EUR m)

* Annualised Last Two Quarters EBITDA (excl. non-operating expenses) is calculated by multiplying EBITDA for the two most recent quarters by two.

slide-8
SLIDE 8

8

Q1 2014 Highlights Financial Review Appendices

Agenda

Introduction Operational Review

slide-9
SLIDE 9

9

Network expansion during Q1 2014 (v. Q4 2013) driven solely by organic growth

Comparison against Q1 2013 affected by acquisitions including:

United Media Production

Elektro Turnsek

Homes passed across key markets Key developments

Network expansion during Q1 2014 driven by organic growth

*Includes KDS and JET TV subscribers in Serbia

731 853 243 298 184 191 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Q1 2013 Q1 2014 SBB Serbia* Telemach Slovenia Telemach BH

'000

slide-10
SLIDE 10

10

42% 34% 21% 2% 1%

Serbia

57% 0% 0% 30% 11% 2%

Bosnia

39% 0% 0% 27% 28% 6%

Slovenia

RGUs by service Key developments

Increasing RGUs since year-end 2013

*Revenues from DTH pay-TV services for all six countries of operation reported under SBB Serbia

Increasing RGUs during Q1 2014

Comparison of the number of cable pay-TV RGUs against Q4 2013 affected by reclassification of 7k B2B pay-TV subscribers in Slovenia

Comparison against Q1 2013 affected by acquisitions

+11%

759 371

  • 373

122 21 801 406 64 432 181 44 Cable pay-TV DTH pay-TV IPTV Broadband internet Fixed telephony Other services

'000

Series2 Series1

Q1 2013 Q1 2014

slide-11
SLIDE 11

11

Q1 2014 blended cable ARPU up 4% year-on-year to €17.3 SBB Serbia

Price increase implemented as of March 2014

Positive impact of promotional campaigns

Lower telephony traffic

Telemach Slovenia

Growth in subscribers for multi-play offering

Subscriber migration from lower-priced to higher-priced service packages

Price increase for triple-play package

7k B2B pay-TV subscribers in Slovenia were reclassified during the reporting period, affecting ARPU levels

Telemach BH

Growth in subscribers for multi-play offering

Higher telephony services revenues

Blended cable ARPU per unique subscriber Key developments

Continued growth in blended cable ARPU

*SBB includes KDS and JET TV subs in Serbia

16.7 17.3 Q1 2013 Q1 2014

Blended cable ARPU (€)

+4% 12.9 13.3 28.7 28.3 13.8 14.4 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Q1 2013 Q1 2014 SBB Serbia* Telemach Slo Telemach BH

Blended cable ARPU per country (€)

SBB Serbia* Telemach Slovenia Telemach BH in € Q1 2013 Q1 2014 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Blended Cable ARPU 12.9 13.3 28.7 28.3 13.8 14.4

+3% +4%

  • 1%
slide-12
SLIDE 12

12

Q1 2014 Highlights Financial Review Appendices

Agenda

Introduction Operational Review

slide-13
SLIDE 13

13

Q1 2014 revenue development Key drivers

Revenue development

Group revenue up by 14% to €65.9 million

  • vs. Q1 2013 due to organic growth, an
  • verall increase in ARPU and acquisitions

SBB Serbia

Revenue increased by 2% to €31.8 million driven by subscriber base growth and migration to multi-play packages

A price increase was implemented as

  • f March 2014 which had a one month

impact on the Q1 2014 results

Telemach Slovenia

Revenue up by 18% to €20.3 million due to:

continued subscriber migration to higher priced service packages

increase in the number of multi-play subscribers

acquisitions

Telemach BH

Revenue up by 22% to €5.4 million due to a mix of organic subscriber base growth and acquisitions United Media Group

Generated revenues of €7.7 million in line with gradual subscriber base growth of the Group and overall market 57.8 65.9 Q1 2013 Q1 2014

Revenues (EUR m)

+14% 31.2 17.2 4.5 31.8 20.3 5.4 SBB Serbia Telemach Slo Telemach BH

Q1 2013 Q1 2014

+2% +18% +22%

slide-14
SLIDE 14

14

EBITDA (Excluding non-operating expenses) (EUR m) Q1 2014 EBITDA by business segment

EBITDA development

EBITDA (Excluding non-operating expenses) in Q1 2014 of €32.2 million

14.7 10.4 2.5 2.8 1.8

SBB Serbia Telemach Slo Telemach BH United Group Other Businesses

26,674 32,248 Q1 2013 Q1 2014 +21%

* EBITDA is shown before IC eliminations

slide-15
SLIDE 15

15

Capital expenditures

CAPEX development Key drivers

CAPEX for Q1 2014 at €22.3 million compared to the below average CAPEX of €12.2 million in Q1 2013 (FY 2013 CAPEX: €81.3 million), as the Group continued investments in network extension and modernisation, as well as content

Front-loading of full year 2014 CAPEX to Q1 2014 primarily due to a €1.8 million increase during the quarter attributed to set-up costs for the launch of a new channel (N1) SBB Serbia

Increase due to investments in customer premise equipment and network extension in line with subscriber growth Telemach Slovenia

Increased investments into customer premise equipment, backbone and network upgrades and network extension following integration of newly-acquired entities Telemach BH

Increased investments into customer premise equipment, backbone and network upgrades EUR (m)

* incl KDS and JET TV in Serbia

Other 12.2 22.3 Q1 2013 Q1 2014 6.1 2.6 1.1 2.0 0.4 8.3 5.6 1.7 4.4 2.3 SBB Serbia* Telemach Slovenia Telemach BH United Media Group Other

Q1 2013 Q1 2014

slide-16
SLIDE 16

16

EBITDA-CAPEX

Cash flow generation and financial position

EUR (m)

Key drivers

Operating cash flow affected by significant transaction costs following acquisition of the Group by KKR and

  • ther shareholders

Improvement in both gross and net leverage since Q4 2013

Leverage

4.30x 4.16x 4.22x 4.00x Q4 2013 Q1 2014 Gross leverage Net leverage 14.5 9.9 Q1 2013 Q1 2014

slide-17
SLIDE 17

17

Q1 2014 Highlights Financial Review Appendices

Agenda

Introduction Operational Review

slide-18
SLIDE 18

18

Income Statement

in €000 Q1 2013 Q1 2014 Revenue 57,818 65,947 Other income 1,051

  • Content cost

(11,370) (13,310) Satellite capacity cost (1,827) (1,827) Internet link cost (787) (725) Materials cost (1,808) (1,288) Staff costs (5,271) (5,992) Depreciation (11,678) (13,639) Amortisation of intangible assets (4,810) (5,420) Other non-operating expenses (4,596) (42,513) Other operating expenses (11,132) (10,556) Results from operating activities 5,590 (29,323) Finance income 1,052 120 Finance costs (3,756) (20,149) Net finance costs (2,704) (20,029) Profit/(loss) before tax 2,886 (49,352) Income tax (expenses)/benefit 37 (34) Minority share

  • (162)

Profit/(Loss) for the period 2,923 (49,548)

slide-19
SLIDE 19

19

Balance Sheet

slide-20
SLIDE 20

20

Cash Flow Statement

slide-21
SLIDE 21

21

Presentation of Financial Information Group quarterly pro forma financial statements have been prepared in accordance with Group Accounting Policies. Pro Forma combined financial information gives effect to the business combination (acquisition of Slovenia Broadband S.a.r.l. and its subsidiaries) as if it had occurred as at 1 January 2014. Non-IFRS Financial Measures The Group may present financial information herein that is not prepared in accordance with IFRS or any other generally accepted accounting principles, such as EBITDA, Adjusted EBITDA and other financial measures. This non-IFRS financial information should be considered in addition to, but not as a substitute for, financial information prepared in accordance with IFRS. Since not all companies compute these or other non-IFRS financial measures in the same way, the manner in which the Group has chosen to compute the non-IFRS financial measures presented herein may not be comparable with similarly defined terms used by other companies.

Presentation of Consolidated Financial Data