Investor’s Presentation March 2020 Axtel – Confidential Information - For Recipient’s Use Only 1
Agenda I. Axtel Strategy II. Financial Results III. Business Opportunities in Infrastructure and Services Units IV. Appendix Axtel – Confidential Information - For Recipient’s Use Only 2
I. Axtel Strategy Axtel – Confidential Information - For Recipient’s Use Only 3
B2B, infrastructure-based Company EBITDA Government 17% Service Infrastructure Enterprise 49% 51% 83% Services Unit (Alestra) – Revenue Breakdown 2019 Revenues & EBITDA US $664 mm & US$ 232 mm +83% Enterprise Ps. 12,784 mm & Ps. 4,466 mm Alestra Others 50% 50% Infrastructure Unit – Revenue Breakdown Fiber Network +40,600 km 50% service business unit (Alestra) +22,000 km LD & 18,600 km Metro Axtel – Confidential Information - For Recipient’s Use Only 4
Functional Separation: Capture Opportunities and Maximize Value SERVICES (Brand: “ALESTRA”) INFRASTRUCTURE (Brand: TBD) • ~50k customers Telecom IT Network • Wholesale connectivity and • >18k Collaboration Connectivity System Integration passive infrastructure customers • Value-added Largest neutral operator services IT Unified Video DRP Comm. Conference Infrastructure IP Fiber Transit (Dark & Lit) Managed Networks Cloud Expand expertise organically and/or inorganically: VPN Ethernet LAN Hybrid - Cybersecurity Spectrum Wholesale Migration cloud Access - Digital Productivity Wi Fi SD-WAN applications Transformation - Systems Standard Services Cybersecurity Integration 40,600 km Fiber to Fiber to the 22,000 km (LD) the Tower Data Center Internal 18,600 km (Metro) Perimeter Internet Voice Network Wholesale / Operators Enterprise and Government (Including Alestra Services) 1) Source: AV&CO (2019). Axtel – Confidential Information - For Recipient’s Use Only 5
Non-strategic Asset Divestments – Focused Strategy & Indebtedness Reduction Data Centers’ Alliance with Equinix Tower Sale 1 3 142 towers sold to ATC in 2017; 12 additional Valuation: 175 Mdlls towers in 2018 Includes assets and operations of 3 Data Centers ▪ Proceeds: 61 Mdlls - 3 large-scale colocation customers Joint-Marketing agreement : - Develop marketing opportunities for IT Solutions, data FTTx Mass Market Divestment 2 center and network services; exchange sales leads of the enterprise segment and joint participation in government segment projects Sale to Televisa (~80%) in December 2018 and Megacable (~20%) in May 2019 ▪ Km: 5,800 km of FTTx (fiber-to-the-home or business) Apodaca ▪ Proceeds: 5,863 MPs ▪ Customers: ~280,000 Querétaro (1) Exclude ~5 Mdlls of related expenses and 13 Mdlls of funds held in escrow account, to be released in 12 months Axtel – Confidential Information - For Recipient’s Use Only 6
Debt Profile Debt Composition (as of Dec’19 – PF Data Center Transaction) Leverage Evolution (Net Debt / EBITDA*) Net Debt: US$ 614 M Acc. Pay. Alfa: US$ 11 M 4.0 3.7 22 173 24 3.6 3.6 617 3.4 500 3.2 102 2.9 (1) (2) 2Q'17 4Q'17 2Q'18 3Q'18 4Q'18 4Q'19 4Q'19 PF Net Debt 2024 Notes Bancomext IFRS 16 Others Cash (1) With normalized cash balance. (2) PF Data Center transaction (Dlls) (Ps) * Without tower sale benefit nor merger-related expenses Debt Composition (as of Dec’17) Maturity Profile Net Debt: US$ 966 M (in US $mm) Acc. Pay. Alfa: US$ 83 M Avg. life: 5.1 yrs 513 47 966 310 181 72 500 48 48 26 23 15 18 14 14 Net Debt 2024 Notes Bancomext Syndicated Others Cash 2020 2021 2022 2023 2024 2025 2026 2027 2028 (Dlls) (Ps) Facility (Ps) Bancomext Others 2024 Notes Axtel – Confidential Information - For Recipient’s Use Only 7
II. Financial Results Axtel – Confidential Information - For Recipient’s Use Only 8
Revenues & EBITDA Revenues EBITDA (in MPs.) (in MPs.) CAGR +1% 4,466 12,544 12,788 12,784 4,169 590 -10% 879 (1) 1,089 3,460 One-time +2% 12,199 11,905 Recurring 11,456 840 Tower Sale 225 2017 2018 2019 2017 2018 2019 (1) Includes merger-related expenses of Ps.429 million. Axtel – Confidential Information - For Recipient’s Use Only 9
Revenues by business unit – 2018 vs 2019 Services Infrastructure (in MPs) (in MPs) -3% +7% 10,490 223 10,177 327 5,170 316 4,843 219 2,475 2,159 Gov’t Enterprise Enterprise Government (1) Voice Others 9,954 -13% -12% +4% 8,018 Enterprise 8,014 2018 2019 2018 2019 (1) Non-recurrent government segment revenues of Ps. 274 million in 2018 vs Ps. 148 in 2019. Axtel – Confidential Information - For Recipient’s Use Only 10
EBITDA by business unit – 2018 vs 2019 +7 % (w/o tower sale) (in MPs) 463 4,393 4,466 225 165 Tower Sale 2,287 1,824 +25% -7% Infrastructure (w/o tower sale) +8% (w/o Voice) 2,179 2,344 Services YTD18 Infrastructure Services YTD19 Axtel – Confidential Information - For Recipient’s Use Only 11
III. Business Opportunities in Infrastructure and Services Units Axtel – Confidential Information - For Recipient’s Use Only 12 12
Services Unit – ICT Market Growth and Revenue breakdown Customer Base Growth in Corporate ICT Market (in BPs., %) CAGR Government ’19 - ’24E 21% $102.4 Large Corporate $93.2 35% $85.9 $84.0 Financial $76.9 9.9% Services 12% $67.3 IT $60.3 SME 32% Telecom – Managed Network 3.0% 18,000+ Total Customers Telecom – Internet & Data - 21 of top 35 customers have average tenure with Alestra of more than 8 years (3.3%) Telecom - Voice (14.7%) - 90% of the most relevant Financial Institutions in 2012A 2014A 2016A 2018A 2020E 2022E 2024E Mexico are Alestra’s customers Axtel – Confidential Information - For Recipient’s Use Only 13
Infrastructure Unit – Sector growth and target market (Wholesale ) Growth Infrastructure Market Wholesale Customer Base Large buyers of ✓ Growth concentrated in fiber to the Wireless Growing FTTT and FTTDC tower Carriers segment backhaul. demanding (CAGR of 28%) (1) - 5G will be a high- large driver bandwidth Internet Giants, ✓ Driven by mobile data of growth. services to Data Centers consumption (4G), 5G connect & Tower deployment and growing facilities and Operators customers. IT outsourcing to DCs (cloud) Large Fixed international International players Carriers present relevant opportunities. Fixed National Carriers 1) Source: AV&CO (2019). Axtel – Confidential Information - For Recipient’s Use Only 14
IV. Appendix: PF Financial Information Axtel – Confidential Information - For Recipient’s Use Only 15 15
Financial Summary – Proforma for Data Center Transaction 2019 Adjustment 2019 PF (in MPs) Revenue 12,784 (255) 12,528 Costs (3,353) (131) (3,484) Expense (5,015) 157 (4,858) Other income (expense) 50 - 50 EBITDA 4,466 (229) 4,236 Axtel – Confidential Information - For Recipient’s Use Only 16
Axtel – Confidential Information - For Recipient’s Use Only 17
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