Q1 2016 Results PLAY Investor Presentation May 24, 2016 This - - PowerPoint PPT Presentation

STRICTLY CONFIDENTIAL

Q1 2016 Results PLAY Investor Presentation May 24, 2016

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This presentation has been prepared by P4 Sp. z o.o. (“PLAY”). The information contained in this presentation is for information purposes only. This presentation does not constitute or form part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or acquire interests or securities of PLAY or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Certain financial data included in the presentation are “non-IFRS financial measures.” These non-IFRS financial measures may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with International Financial Reporting Standards. Although PLAY believes these non-IFRS financial measures provide useful information to users in measuring the financial performance and condition of its business, users are cautioned not to place undue reliance on any non-IFRS financial measures and ratios included in this presentation. Financial data are presented in zloty rounded to the nearest thousand. Therefore, discrepancies in the tables between totals and the sums of the amounts listed may occur due to such rounding. Forward Looking Statements This presentation contains forward looking statements. Examples of these forward looking statements include, but are not limited to statements of plans,

• bjectives or goals and statements of assumptions underlying those statements. Words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”,

“anticipate”, “believe”, “continue”, “probability”, “risk” and other similar words are intended to identify forward looking statements but are not the exclusive means of identifying those statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that such predictions, forecasts, projections and other forward looking statements will not be achieved. A number of important factors could cause our actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward looking statements. Past performance of PLAY cannot be relied on as a guide to future performance. Forward looking statements speak only as at the date of this presentation PLAY expressly disclaims any obligations or undertaking to release any update of, or revisions to, any forward looking statements in this presentation. No statement in this presentation is intended to be a profit forecast. As such, undue reliance should not be placed on any forward looking statement.

Agenda

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Business and Strategy Jørgen Bang-Jensen CEO Financial Performance Robert Bowker CFO

Play’s Ultra Growth

4 2,051 2,735 3,579 3,720 4,392 5,363 5,821 2010 2011 2012 2013 2014 2015 LHA Q1'16

0.8 2.0 3.4 5.2 7.1 8.7 10.7 12.3 14.2 14.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016

Play Plus T-Mobile Orange

Double digit number growth almost every year

Q1 2016 – Key Highlights

Strong Financial Performance

Q1 2016

PLN 1,441m

+17.4% YoY

Continued Commercial Success

Total subs Market share Revenue

Q1’16 LHA

PLN 437m

+35.2% YoY

Adjusted EBITDA

PLN 5,821m

+19.6% YoY

PLN 1,724m

+40.8% YoY

Adj EBITDA Margin

30.4%

+4.0pp YoY

29.6%

+4.5pp YoY

14.42m

+13.7% YoY

25.5%

+3.6pp YoY

PLN 36.7

• 3.4% YoY

Blended ARPU

0.7%

0.0pp YoY

Contract Churn

50.9% of subs

+2.6pp YoY

Contract share

Subscriber base growth Quality of Subscribers

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Revenue Adjusted EBITDA Adj EBITDA Margin

1,735k LTM Q1’16

• 0.4% YoY

Added subs

34.1 34.3 35.8 38.0 36.7 Q1'12 Q1'13 Q1'14 Q1'15 Q1'16 14.3 14.4 15.1 16.6 16.4 Q1'12 Q1'13 Q1'14 Q1'15 Q1'16

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Fast growing subscriber base… …with stable ARPU…

Contract 1 Prepaid 1 YoY growth (%)

Adjusted EBITDA2 (PLNm)

…continues to drive revenue expansion… …and profitability

Adjusted EBITDA margin YoY growth (%) 15.6% 22.8% 11.9% 29.6%

Total Revenues (PLNm) ARPU (PLN / month)1 Subscriber base (000s)

1MTR-Adjusted; 2Adjusted for costs/(income) resulting from valuation of retention programs and certain one-off items, plus a reversal of capitalization, and impairment of SAC assets and SRC assets.

Total subscriber base 1 17% 16% 14% 25.2%

3,294 4,135 4,924 6,132 7,341 4,150 5,245 6,019 6,554 7,079 7,444 9,380 10,943 12,685 14,420 Q1'12 Q1'13 Q1'14 Q1'15 Q1'16 Contract Prepaid

26%

49.8 50.1 51.5 52.2 48.8 Q1'12 Q1'13 Q1'14 Q1'15 Q1'16

1,904 2,519 3,056 3,682 4,202 924 857 538 698 931 112 284 238 255 443 2,940 3,660 3,832 4,634 5,576 LTM Q1'12 LTM Q1'13 LTM Q1'14 LTM Q1'15 LTM Q1'16 Usage Interconnection Sales of Goods

5% 21% 20% 24% 374 587 898 1,224

1,724

LHA Q1'12 LHA Q1'13 LHA Q1'14 LHA Q1'15 LHA Q1'16

Fast growth of customer base and stable ARPU continues to drive revenue and profitability expansion

30 DAYS to to change the tariff

Q1 2016 – Marketing activity

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THEY EY ALREAD EADY Y KNOW THAT T PLAY ULTR TRA A IS THE BEST T OFFER! FER!

4G LTE ULTR LTRA Handse set 4G LTE ULTR LTRA Contract 4G LTE ULTR LTRA Network coverage ge

IT IS EASY AS A PIE, EVEN N KIDS S GET IT IT

NEW W OFFER R : 30 DAYS to to change smartphone 30 DAYS to to resig ign

Q1 2016 – Key Business Developments

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Continued Commercial Success

• We have reached 14.42m of subscribers (+13.7% YoY) and 25.5% market share (+3.6pp YoY) as of

March 31, 2016

• In LTM ended on March 31, 2016, we have added 1,735k subscribers (270k in Q1), of which 1,209k were contract
• subscribers. The share of contract subscribers at the end of Q1 2016 amounted to 50.9% share of the total

subscriber base (+2.6pp YoY)

• Play maintains its dominant position in Mobile Number Portability. Our share of all numbers moved between MNOs

amounted to approximately 38% in Q1 2016 and in average 42% for the last twelve months

• On March 17, 2016, we introduced a new program „Fair Play”, available to all new customers, individual and
• business. New postpaid customers have first 30 days to change their mind either changing tariff, the handset or

resigning from the service

• At the beginning of November 2015, Play introduced new service – music platform „Tidal” which is free to use for

contract subscribers for a period of the contract. We continue Tidal offering in Q1 2016.

800/2600MHz auction

• On February 5, 2016, we have paid for 1 block of 2x5MHz bandwidth in the 800 MHz frequency band and 4 blocks,

each of 2x5MHz bandwidth in the 2600MHz frequency band. The total price paid for the above-listed frequency blocks amounted to PLN 1,718m. The payment was made using cash, available overdraft facilities and a drawdown from the RCF

• On March 8, 2016, we launched the 4G LTE ULTRA (the LTE carrier aggregation) using inter alia a new frequency
• f 800 and 2600 MHz. The refarming of 2100 from 3G to 4G is ongoing. The speed is expected to increase up to

262 Mbits. In the range of 4G LTE ULTRA we achieved the coverage of 40% of population

• Network roll-out – with more than 400 BTS on LTE 800, Play is again having the fastest roll-out of new

frequencies.

• Usage revenues for the last twelve months ended on 31 March, 2016, amounted to PLN 4,202m, an increase of 14%

YoY

• Usage revenues in Q1 2016 amounted to PLN 1,059m, an increase of 10% YoY
• Q1 2016 Adjusted EBITDA amounted to PLN 437m, an increase of 35% YoY.

Strong Financial Performance

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Total volume of “Port-Ins” under MNP (‘000) and shares by MNOs (%)1

1 Source: multi-operator MNP management platform.

 PLAY is the preferred

• perator among

customers migrating their mobile number  Continues to outperform competitors in Mobile Number Portability with a net gain of 686k in last twelve months ended March 31, 2016  Other (7%) represents Mobile Virtual Network Operators (MVNO). Vast majority of MNVOs

• perating on Play’s

network generate wholesale revenues. Total volume (`000) Shares by

• perator

(%)

Continued Leadership in Mobile Number Portability…

56% 50% 42% 1% 2% 7% 8% 12% 15% 24% 24% 27% 11% 12% 10% 1,583 1,604 1,633 LTM Q1'14 LTM Q1'15 LTM Q1'16 T-Mobile Orange Plus Other Play

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Business and Strategy Jørgen Bang-Jensen CEO Financial Performance Robert Bowker CFO

Agenda

Summary Financials

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1 Other operating income less other operating costs; 2 Includes: impairment of SAC/SRC asset, advisory services fees, valuation of retention programs and other one-off items.

PLN millions Q1 2015 Q1 2016 Change Total Revenue 1,228 1,441 17% Service revenue 1,156 1,308 13% Usage revenue 959 1,059 10% Retail contract revenue 788 866 10% Retail prepaid revenue 148 158 7% Other revenue 24 35 49% Interconnection revenues 197 249 26% Sales of goods and other revenue 71 133 87% Total Direct Costs (398) (504) 27% Interconnect costs (230) (276) 20% Network Sharing (38) (39) 4% COGS (73) (132) 81% Other direct costs & SRC/SAC not eligible for (57) (57) 0% Contribution 830 936 13% D&A (356) (376) 6% Other1 (13) (18) 31% G&A (250) (217)

• 13%

Operating Profit 211 326 55% SAC / SRC Costs Capitalized (289) (276)

• 5%

D&A 356 376 6% Other EBITDA adjustments2 46 12

• 74%

Adjusted EBITDA 323 437 35% Total Revenue (%) 26.3% 30.4% +4.0pp

FCF Summary

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1 Purchase of Series A and C Notes issued by Play Topco; 2 Retention programmes and special bonuses paid out, foreign exchange gains / (losses)

PLN millions Q1 2015 Q1 2016 Change Adjusted EBITDA 323 437 35% Non-cash items and changes in provisions (1) (1)

• 17%

Change in working capital (94) (230) 144% Cash capex (net) (113) (108)

• 5%

Income tax paid (0) (51) 100% FCF before financing and non-recurring items 115 47

• 59%

Proceeds from finance liabilities 544 190

• 65%

Repayment of finance liabilities (8) (7)

• 14%

Cash interest (net) and other financial costs (110) (124) 13% Purchase of debt securities1 (75) (70)

• 7%

Spectrum purchase

• (1,718)

n/a Deposit (paid to)/received from UKE in relation with spectrum auction (184)

• 100%

Other 2 1 (2) n/a Net increase (decrease) in cash and cash equivalents 284 (1,683) n/a Effect of exchange rate change on cash and cash equivalents (7) (0)

• 100%

Beginning of period cash and equivalents 498 1,557 213% End of period cash and equivalents 775 (126) n/a

Capitalization

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1 Currency exchange rate as of March 31, 2016 1 EUR = 4.2684 PLN; 2 LHA Adj. EBITDA as of March 31, 2016 of PLN 1,724.0m; 3 Including accrued interest EUR 6.2 m / PLN 26.6m; 4 Including accrued interest PLN 1.2m / EUR 0.3m; 5 Including accrued interest EUR 2.9 m / PLN 12.3m; 6 Including accrued interest EUR 2.8 m / PLN 11.8m.

PLNm EURm1 xLHA Adj. EBITDA2 Cash and cash equivalents (overdrafts) (126) (30) (0.1x) Revolving Credit Facilities drawn 191 45 0.1x Finance Leases 36 8 0.0x Senior Secured Notes 3,252 762 1.9x

• f which EUR 725m 5.25% fixed rate Notes due 2019 3

3,121 731 1.8x

• f which PLN 130m WIBOR+3.50% floating rate Notes due 2019 4

131 31 0.1x Secured debt 3,479 815 2.0x Net secured debt (including overdrafts) 3,605 845 2.1x EUR 270m 6.50% Senior Unsecured Notes due 20195 1,165 273 0.7x Total debt - Play Holdings 2 S.à r.l. 4,644 1,088 2.7x Net debt - Play Holdings 2 S.à r.l. 4,770 1,118 2.8x EUR 415m 7.75% / 8.50% Senior PIK Toggle Notes due 20206 1,783 418 1.0x Total debt - Play Topco S.A. 6,427 1,506 3.7x Net debt - Play Topco S.A. 6,553 1,535 3.8x As of March 31, 2016

5.5x 4.5x 3.3x 2.9x 3.2x 4.1x 4.9x 4.5x 4.1x 3.5x 3.2x 3.1x 2.9x 2.6x 2.3x 1.7x 2.8x 5.5x 4.5x 3.3x 2.9x 3.2x 4.1x 3.4x 3.2x 2.8x 2.4x 2.2x 2.0x 1.9x 1.7x 1.5x 1.0x 2.1x 4.9x 4.7x 4.3x 3.9x 3.4x 2.8x 3.8x Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 PF Q4'13 PF Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16

Ultra strong deleveraging track record

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1 Net debt assuming full escrow release and distribution of escrowed amounts to shareholders; debt includes accrued interest and finance leases; 2 Pro forma for January 2014 refinancing and recapitalization (Senior Secured Notes and Senior Notes issuance; CDB/Alior debt repayment and distribution to shareholders).

Fast EBITDA growth based on revenue growth out of a stable cost base and efficient capex allows for quick deleveraging January 2014 refinancing and recapitalization LTE license and roll-out Net secured debt Net debt Net debt / LHA EBITDA Net debt

• incl. PIK

1,2 1,2 1 1

March 2015 Tap to Senior Secured Notes August 2014 PIK Notes issuance LTE Payment

1

Q&A

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Appendix

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• Adjusted EBITDA reconciliation
• Quarterly KPIs
• Annual KPIs

Adjusted EBITDA Reconciliation

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Adjusted EBITDA defined as operating profit plus depreciation and amortization, advisory services fees, cost/(income) resulting from valuation of retention programs and certain one-off items, plus a reversal of capitalization and impairment of SAC assets, and SRC assets. PLN millions Q1 2015 Q1 2016 Change Operating Profit 211 326 55% D&A 356 376 6% Reversal of SAC/SRC Capitalization (289) (276)

• 5%

Impairment of SAC/SRC 11 12 3% Advisory services fees 7 8 18% Valuation of retention programs 21 (23) n/a Other one-off other operating costs 2 100% Add one-off finance and legal services 2 100%

• n/a

Add cost on valuation of cash denominated in EUR 7

• 100%

Add one-off impairment of overdue receivables

• 13

n/a Adjusted EBITDA 323 437 35% % of Revenues 26.3% 30.4% +4.0pp

Unit

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Total revenue PLNm 986 1,055 1,146 1,206 1,228 1,299 1,367 1,470 1,441 Change QoQ % 1% 7% 9% 5% 2% 6% 5% 8%

• 2%

Service revenue PLNm 938 1,004 1,089 1,130 1,156 1,225 1,293 1,308 1,308 Change QoQ % 3% 7% 9% 4% 2% 6% 6% 1% 0% Usage revenue PLNm 801 852 927 944 959 1,009 1,070 1,065 1,059 Change QoQ % 2% 6% 9% 2% 2% 5% 6%

• 1%
• 1%

Adjusted EBITDA PLNm 238 269 275 289 323 374 422 425 437 Change QoQ % 13% 13% 2% 5% 12% 16% 13% 1% 3% Adjusted EBITDA Margin PLNm 24.2% 25.5% 24.0% 23.9% 26.3% 28.8% 30.9% 28.9% 30.4% Reported Subscribers - Contract k Subs. 4,924 5,147 5,457 5,810 6,132 6,441 6,717 7,070 7,341 Change QoQ % 3% 5% 6% 6% 6% 5% 4% 5% 4% Net Additions - Contract k Subs. 154 223 310 354 321 310 275 353 271 Change QoQ %

• 25%

45% 39% 14%

• 9%
• 4%
• 11%

28%

• 23%

Churn - Contract % 0.8% 0.8% 0.7% 0.7% 0.7% 0.6% 0.7% 0.6% 0.7% ARPU - Contract (MTR-Adjusted)1 PLN 51.5 53.0 54.3 53.5 52.2 52.0 52.5 50.7 48.8 Change QoQ % 0% 3% 2%

• 1%
• 2%

0% 1%

• 3%
• 4%

Data usage per subscriber - Contract MB 943 1,091 1,289 1,710 2,060 2,204 2,388 2,730 3,146 Change QoQ % 13% 16% 18% 33% 20% 7% 8% 14% 15% unit SAC - Contract PLN 329 311 340 323 296 286 312 285 323 Change QoQ %

• 2%
• 5%

10%

• 5%
• 8%
• 3%

9%

• 9%

13% unit SRC PLN 280 300 286 254 254 276 299 271 273 Change QoQ % 5% 7%

• 5%
• 11%

0% 9% 8%

• 9%

1%

Quarterly KPIs

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1 MTR-Adjusted – current, symmetrical Mobile Termination Rate of PLN 0.0429 applied to historical ARPU.

Unit

FY 2012 FY 2013 FY 2014 FY 2015 Q1'16 LTM1 Q1'16 LHA1 Total revenue PLNm 3,579 3,720 4,392 5,363 5,576 5,821 Change YoY % 31% 4% 18% 22% 20% 20% Service revenue PLNm 3,336 3,458 4,161 4,982 5,133 5,231 Change YoY % 26% 4% 20% 20% 17% 14% Usage revenue PLNm 2,388 2,918 3,524 4,102 4,202 4,247 Change YoY % 37% 22% 21% 16% 14% 12% Adjusted EBITDA PLNm 562 707 1,072 1,544 1,658 1,724 Change YoY % n.a. 26% 52% 44% 43% 41% Adjusted EBITDA Margin PLNm 15.7% 19.0% 24.4% 28.8% 29.7% 29.6% Reported subscribers - Contract k Subs. 3,877 4,770 5,810 7,070 7,341 7,341 Change YoY % 25% 23% 22% 22% 20% 20% Net additions - Contract k Subs. 782 893 1,041 1,259 1,209 1,248 Change YoY %

• 9%

14% 17% 21% 0%

• 8%

Churn - Contract % 0.9% 0.7% 0.8% 0.6% 0.7% 0.7% ARPU - Contract (MTR-Adjusted)2 PLN 51.1 50.8 53.1 51.9 50.9 49.7 Change YoY % 6% 0% 4%

• 2%
• 4%
• 6%

Data usage per subscriber - Contract MB 898 849 1,274 2,345 2,635 2,943 Change YoY % 22%

• 5%

50% 84% 69% 56% unit SAC - Contract PLN 355 333 326 295 301 303 Change YoY %

• 14%
• 6%
• 2%
• 10%
• 5%
• 2%

unit SRC PLN 259 271 280 275 280 272 Change YoY %

• 12%

5% 3%

• 2%

3% 7%

Annual KPIs

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1 Change YoY compared to the relevant period in 2015; 2 MTR-Adjusted – current, symmetrical Mobile Termination Rate of PLN 0.0429 applied to historical ARPU.