United Group BO 2014 financial results presentation 29 April 2015 - - PowerPoint PPT Presentation

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United Group BO 2014 financial results presentation 29 April 2015 - - PowerPoint PPT Presentation

United Group BO 2014 financial results presentation 29 April 2015 Disclosure Regarding Forward-Looking Statements and the Presentation of Certain Financial Information This presentation contains forward-looking statements, which include all


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2014 financial results presentation

29 April 2015

United Group BO

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This presentation contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “estimates”, “would,”, “will”, “could”, “should” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and

  • ther important factors beyond our control that could cause our actual performance or achievements to be materially different from future performance or

achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future strategies and the environment in which we will operate in the future. These forward-looking statements speak only as at the date of this

  • presentation. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein

to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based. In addition, this presentation contains summary unaudited pro forma condensed combined financial information for Adria Midco B.V. and its subsidiaries for the year ended December 31, 2014, which represents the arithmetical addition of the financial information of Adria Midco for the year ended December 31, 2014 (which includes the financial results of Slovenia Broadband S.à r.l. and its subsidiaries from March 1, 2014) and the financial information of Slovenia Broadband S.à r.l. for the two months ended February 28, 2014, after applying certain intercompany eliminations and making certain pro forma adjustments to give effect to the acquisition by United Group B.V. of Slovenia Broadband S.à r.l. and its subsidiaries on March 6, 2014, as though it had occurred on January 1, 2014. This presentation also contains summary unaudited pro forma condensed combined financial information for Adria Midco B.V. and its subsidiaries for the year ended December 31, 2013, which represents the financial information of Slovenia Broadband S.à r.l. and its subsidiaries for the year ended December 31, 2013, after making certain pro forma adjustments to give effect to the acquisition by United Group B.V. of Slovenia Broadband S.à r.l. and its subsidiaries on March 6, 2014, as though it had occurred on January 1, 2013. The unaudited pro forma financial information for Adria Midco B.V. and its consolidated subsidiaries is presented for informational purposes only and is not intended to represent or be indicative of the results of operations or financial position that we would have reported had the acquisition by United Group B.V. of Slovenia Broadband S.à r.l. and its subsidiaries been completed as of the dates and for the periods presented herein and should not be taken as representative of

  • ur results of operations or financial condition following the completion of such transaction.

Certain financial measures and ratios related thereto in this presentation, including EBITDA, Adjusted EBITDA, Adjusted EBITDA minus capital expenditure, RGUs and ARPU (collectively, the ‘‘Non-IFRS Measures’’) are not specifically defined under IFRS or any other generally accepted accounting principles. These measures are presented here because we believe that they and similar measures are widely used in our industry as a means of evaluating a company’s operating performance and financing structure. Our management believes this information, along with comparable IFRS measures, is useful to investors because it provides a basis for measuring the operating performance in the periods presented. These measures are used in the internal management of our business, along with the most directly comparable IFRS financial measures, in evaluating the operating performance. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, and you should not consider such items as alternatives to net income (loss), operating income or any other performance measures derived in accordance with IFRS, and they may be different from similarly titled measures used by other companies.

Disclosure Regarding Forward-Looking Statements and the Presentation of Certain Financial Information

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Highlights Financial review Mergers & Acquisitions

Agenda

Introduction Operational review Appendices Tušmobil

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Introduction to United Group

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

services

  • 2.2 million cable and satellite TV, broadband, fixed-line 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

  • Broad 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 our 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

  • Owned by funds affiliated with KKR, EBRD and the management

2020 Senior Notes

Issuer United Group B.V. Listed GEM, Irish Stock Exchange Governing Law State of New York Outstanding notes €625 million Coupon 7.875% Maturity 15 November 2020 Coupon dates 15 November & 15 May

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Highlights Financial review Mergers & Acquisitions

Agenda

Introduction Operational review Appendices Tušmobil

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1,331 1,436

2013 2014

Homes passed (k)

+8% +

2014: operational highlights

  • Healthy year-on-year RGU growth
  • across all services
  • driven predominantly by increased multi-

play subscribers

  • Homes passed up by 8% to 1,436k vs. 2013 due to
  • expansion and investment in our network
  • acquisition of Broadband Montenegro
  • Blended cable ARPU up by 7% to €17.9 vs. 2013 as a

result of

  • successful execution of our strategy aimed at

selling more services to our cable subscribers

  • increased revenue from cable network-based

services

  • migration from lower-priced to higher-priced

service packages

  • price increases in Serbia (March 2014) and

Slovenia (April 2014)

  • low churn rates

16.7 17.9 2013 2014

Blended cable ARPU (€)

+7% 805 400 61 424 167 29

815 432 87 468 250 73

Cable pay-TV DTH pay-TV OTT Broadband internet Fixed -line telephony Other services

RGUs by service (k)

2013 2014 +1% +8% +43% +10% +50% +152%

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2014: financial highlights

  • Revenues up 17% year-on-year to €283.7 million as a result of
  • rganic growth and acquisitions
  • growing number of RGUs
  • price increases
  • Adjusted EBITDA up 22% year-on-year to €133.5 million
  • Group Adjusted EBITDA growing faster than revenues
  • reflects ability to capitalise on customer relationships through

sales of additional and higher margin products

  • Net Leverage down to 3.93x from 4.22x

* Annualised Last Two Quarter Adjusted EBITDA is calculated by multiplying the Adjusted EBITDA for the two most recent quarters by two.

243.0 283.7

2013 2014

Revenues (€ m)

+17% 4.30x 4.05x 4.22x 3.93x Q4 2013 Q4 2014 Gross leverage Net leverage

109.1 133.5

2013 2014

Adjusted EBITDA (€ m)

+22%

*

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Highlights Financial review Mergers & Acquisitions

Agenda

Introduction Operational review Appendices Tušmobil

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SBB Serbia

  • Organic increase driven by investments

aimed at network extension and modernisation in regions where a strong penetration rate is expected Telemach Slovenia

  • Organic increase against 2013, with 5k

additional homes passed Telemach BH

  • Organic increase due to further network

expansion during the period

Homes passed across key markets Key developments

Network expansion

843 892 296 301 188 198 2013 2014 2013 2014 2013 2014 SBB Serbia Telemach Slovenia Telemach BH

Homes passed (k)

+6% +2% +5%

Telemach Podgorica

  • Additional growth on Group level due to acquisition of BBM (renamed to

Telemach Podgorica), DTH platform in Montenegro, with 45k homes passed

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RGUs vs. Unique cable subscribers Key developments

Increasing subscribers and RGUs

  • Increasing cable subscribers as a

result of organic network growth

  • Faster growth in RGUs per unique

cable subscribers driving overall performance

SBB Serbia & Telemach BH

  • Start of telephony liberalisation and

cross-selling multi-play offers to 1-Play subs

Telemach Slovenia

  • Cross-selling multi-play offers to ~27%
  • f 1-Play subscribers (3-Play)
  • Mobile offering to provide further boost

(4-Play)

  • Upgrading existing customers to more

premium products Our 815k unique cable subscribers order on average between 1.5x and 2.5x different services

RGUs vs. Unique cable subscribers 2013 2014 SBB Serbia 1.5x 1.7x Telemach Slovenia 2.4x 2.5x Telemach BH 1.7x 1.9x

805 815 2013 2014

Unique cable subs (k)

+1% 1,887 2,125 2013 2014

RGUs (k)

+13%

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Low penetration rates offering significant cross-sell and up- sell potential and growth opportunity

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RGUs by service Key developments

Increasing RGUs

Healthy year-on-year RGU growth in all services

Fixed-line telephony (+83k) largest contributor to the 238k increase in RGUs

87k OTT RGUs generated through

  • rganic growth,

acquisition of Solford (52k), and

acquisition of 7k subscribers from Bosna TV in June 2014 805 400 61 424 167 29

815 432 87 468 250 73

Cable pay-TV DTH pay-TV OTT Broadband internet Fixed -line telephony Other services

RGUs by service (k)

2013 2014 +1% +8% +43% +10% +50% +152%

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Group

  • Blended cable ARPU up 7% to €17.9 in 2014

as a result of increased blended cable ARPUs across all of our markets SBB Serbia

  • Key drivers included the price increase in

March 2014 and the availability of fixed line portability which resulted in many ported fixed line numbers into SBB

  • DTH ARPU decreased slightly to € 8.8 due

to increase of subscribers in lower price countries and take up of promotional offers Telemach Slovenia

  • Growth in multi-play subscribers
  • Price increase positively affected the pay-TV

and internet products

  • Blended cable ARPU impacted by

reclassification of B2B subscribers Telemach BH

  • Growth in subscribers for multi-play offering
  • Increase in revenue from internet and fixed-

line telephony services

Blended cable ARPU Key developments

ARPU development

SBB Serbia Telemach Slovenia Telemach BH in € 2013 2014 2013 2014 2013 2014 Cable pay-TV 7.5 8.0 16.3 16.5 7.1 7.4 Broadband internet 11.2 10.7 15.8 15.8 10.3 9.4 Fixed-line telephony 7.1 5.9 5.1 4.7 12.5 11.4 Blended cable ARPU 12.9 13.7 29.6 30.8 13.5 15.0

12.9 13.7 29.6 30.8 13.5 15.0 2013 2014 2013 2014 2013 2014 SBB Serbia Telemach Slovenia Telemach BH

Blended cable ARPU per segment (€)

+6% +4% +11%

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Key drivers

A wholesome pay-TV package through content ownership and strategic partnerships

  • Ability to offer the region’s most popular

sports channels underpins leadership

  • Continued enhancement in attractiveness
  • f sports rights portfolio – recently added

ABA League – popular regional basketball league

  • Ownership of popular kids entertainment

across markets

  • Critical for attractiveness of package for

families

  • Attractive owned local content,

complemented by long term strategic partnerships

  • Long-term strategic partnerships with

international entertainment brands

  • “Partner of choice” in the region for content

providers

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Highlights Financial review Mergers & Acquisitions

Agenda

Introduction Operational review Appendices Tušmobil

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Revenue development 2014 Key drivers

Revenue development by segment

Group

  • 2014 revenues up 17% year-on-year to €283.7

million driven by growing RGUs, overall increase in ARPU, organic growth and acquisitions SBB Serbia

  • Revenue up by 9% to €141.4 million driven by

subscriber base growth (launch of door-to-door sales and refreshed bundles) and migration to multi-play packages

  • Increasing fixed-line telephony RGUs
  • Price increase implemented as of March 2014

Telemach Slovenia

  • Revenue up by 14% to €82.4 million
  • Price increase implemented as of April 2014
  • Increase in the number of multi-play subscribers

Telemach BH

  • Revenue up by 18% to €22.4 million due to
  • rganic RGU base growth
  • Realization of synergies from past acquisitions
  • Growth of internet and fixed-line telephony

segments

243.0 283.7

2013 2014

Revenues (€ m)

+17% 130.3 72.5 19.0 18.1 3.0 141.4 82.4 22.4 26.5 11.0 SBB Serbia Telemach Slovenia Telemach BH United Media Group Other Businesses

Revenue by segment (€ m)

2013 2014 +18% +46% +9% +14% +267%

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Key drivers

Adjusted EBITDA development

Group

  • Adjusted EBITDA up by 22% to €133.5

million vs. 2013 as a result of increased revenues and cost discipline

  • Successful integration of acquisitions

Adjusted EBITDA development 2014

109.1 133.5

2013 2014

Adjusted EBITDA (€ m)

+22%

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81.3 77.1

2013 2014

Capex Group (€ m) (adjusted for N1/Bosna TV)

  • 5%

81.3 87.2

2013 2014

Capex Group (€ m)

+7%

Capital expenditures

CAPEX development Key drivers

Group

  • 2014 Capex at €87.2 million compared to

Capex of €81.3 million in 2013, as the Group continued investments in network extension, modernisation and content

  • 2014 Capex impacted by investment in

growth:

  • non-recurring capitalised set-up costs for

the launch of N1 TV channel (€7.5m) and

  • an asset acquisition of Bosna TV

subscribers (€2.6m)

  • Capex is expected not to exceed depreciation

levels on a long-term basis SBB Serbia

  • In 2013 higher spending caused by change

from DOCSIS 2.0 to DOCSIS 3.0. Telemach Slovenia

  • Investments into customer premise

equipment, backbone and network upgrades and network extension following integration of newly-acquired entities Telemach BH

  • Temporarily less intense network expansion

44.5 17.1 8.2 11.3 0.1 40.9 22.2 7.6 13.1 3.3 SBB Serbia Telemach Slovenia Telemach BH United Media Group Other Businesses

Capex by segment (€ m)

2013 2014

  • 7%

+16%

  • 8%

+30%

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Adjusted EBITDA-CAPEX and leverage development

Key drivers

  • Adjusted EBITDA-Capex increased

due to stronger growth in Adjusted EBITDA compared to Capex

  • Improvement in both gross and net

leverage since 2013 as a result of higher Adjusted EBITDA driven by

  • rganic growth and acquisitions

* Annualised Last Two Quarter Adjusted EBITDA is calculated by multiplying the Adjusted EBITDA for the two most recent quarters by two.

Leverage Adjusted EBITDA-CAPEX

4.30x 4.05x 4.22x 3.93x Q4 2013 Q4 2014 Gross leverage Net leverage

27.8 56.4

2013 2014

Adjusted EBITDA - Capex (€ m)

+103%

*

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Highlights Financial review Appendices

Agenda

Introduction Operational review Mergers & Acquisitions Tušmobil

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Mergers & Acquisitions

  • The acquisitions of Orlando Kids, Broadband Montenegro and Grand Productions were

completed in Q4 2014.

  • On 1 April 2015, Telemach Slovenia closed the acquisition of the mobile operator Tušmobil.
  • We have entered into agreements to acquire EUNET.
  • The Group continually monitors M&A opportunities and is currently in early stages of

evaluating multiple potential opportunities. In line with its stated strategy, the Group is looking for acquisitions that are value accretive and offer substantial synergies with the Group’s existing operations.

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Highlights Financial review Appendices

Agenda

Introduction Operational review Tušmobil Mergers & Acquisitions

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Tušmobil

Strictly confidential – intended for the recipient only

Overview and transaction rationale

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Strictly confidential – intended for the recipient only

Tušmobil acquisition rationale

Attractive target with upside

  • pportunity

1

 #3 player in a stable 3 MNO Slovenian mobile market  Positive market share momentum up from ~11% in 2012 to ~13% in 2014, with further scope to grow  Strong historical growth (2012–14 Revenue CAGR of 4% and EBITDA CAGR of 11%) combined with

EBITDA margins increasing from 12.8% in 2012 to 14.9% in 2014, with further upside

Creates a fully convergent

  • ffering in

Slovenia

2

 Complementary business to Telemach, and combined entity creates the only fully convergent operator with

enhanced scale and product capabilities

 Enhanced ability to compete in the market through powerful quad-play customer proposition: bundling

strong Telemach products with mobile services

 Leverage fixed network to offload mobile data traffic (home / wifi) to enhance mobile gross margin

Cost synergies

3

 Low operational execution risk: longstanding operating track record for the Group and especially Telemach

management in the market and Group’s strong track record of integrating add-on acquisitions

 Common sales channels, operations and marketing  Network and SG&A cost optimisation  Annualised cost synergies of ~€2.6m to be achieved within 12 months

Significant potential to accelerate growth

4

 Recent business performance affected by selling shareholders' financial constraints; Upside as Tušmobil

will benefit from strong Telemach platform and Group financial strength to reposition Tušmobil as a high-quality operator (network, customer care, brand perception)

 Ability to cross-sell to each company’s customer base  Leverage Tušmobil’s 3G / upcoming LTE network to promote “Broadband anywhere” for Telemach

customers – e.g. mobile-TV service D3G, etc.

 Actively target corporate customers leveraging improved offerings 24

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Strictly confidential – intended for the recipient only

26% 24% 24% 23% 21% 17%

Vivacom TEF SK Cosmote RO VOD HU VIP SRB T2 HR

Tušmobil – A growing mobile operator with upside opportunity

 #3 mobile network operator (“MNO”) by subs in a market with 3 full mobile

  • perators and 4 MVNOs(1)

− 295k mobile subscribers as of December 2014 − 13% market share

 Offers voice and data mobile products to postpaid and prepaid customers;

positioned as challenger − Mobile service and handset sales represent approximately three quarters

  • f revenues

− Wholesale and other service revenues mainly from wholesale of voice minutes and revenue share agreements for internet and VoIP services

 Acquired 4G/LTE licence (for 15 years) in early 2014 for ~€21m

Overview

Source: Company data. AKOS, Telegeography as of Dec 2014. (1) MVNO: Mobile Virtual Network Operator – provides services based on agreement with a mobile network operator.

Subscriber and ARPU(1) evolution

251 272 295

17.7 16.2 15.4

2012 2013 2014

Subscribers ARPU (€)

(subscribers in 000s, ARPU in €/month)

Positive market share evolution, with significant further upside

11.2% 11.9% 12.7% 29.6% 29.7% 29.3% 50.4% 49.2% 48.4% 8.8% 9.2% 9.6%

2012 2013 2014

Tušmobil Si.mobil Telekom Slovenije Other

BGR SVK SRB ROU HRV HUN Market shares of #3 mobile operators in CEE CAGR 8.3%

1

25

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Strictly confidential – intended for the recipient only

Creation of a truly convergent player in Slovenia

Mobitel

Source: Company data, AKOS.

Pro forma

√ √ √ √ √ √

Technology 2G, 3G, 4G 2G, 3G, 4G 3G / MVNO 2G, 3G, 4G MVNO 2G, 3G, 4G

√ √ √ √ √

Technology DSL, FTTx DSL, FTTx DSL, FTTx Cable, FTTx Cable, FTTx Mobile BB Pay-tv Telephony

√ √ √ √ √ √ √ √ √ √

2

26

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Strictly confidential – intended for the recipient only

0.8 2.6 0.6 0.8 0.4 1 Fibre rental savings 2 Outsource and professional services optimisation 3 4 HR optimisation Other OPEX optimisations Total cost synergies

Significant cost synergies well identified and diligenced

 Cancellation of long distance network connection contracts with incumbent / others

where they duplicate with Telemach’s network

 Detailed analysis of overlap performed to analyse synergy potential  Elimination of duplicating contracts related to outsourcing services and other

professional services (e.g. CRM, Billing, business intelligence) will generate savings

 Contracts for maintenance (e.g. Network, IT, IP Telephony, etc.) can be terminated as

these services can be provided by Telemach‘s staff or by Telemach suppliers

 HR optimisation and departments consolidation will lead to reduction in FTEs in office

space required

 Reduction in headcount in the first twelve months based on conservative assumptions  CRM, Billing, ERP and other IT platforms will be united and maintenance and upgrade

expenses can be reduced

 IP upstream optimisation by using Telemach IP peering and international SDH links

Annualised synergies by category – 12 months horizon Key action plans

3

 Conservatively estimated cost synergies only  Significant additional revenue synergy potential  Detailed work plan being developed / already completed for most items (€m)

 The Group has a successful track record of value accretive acquisition, having successfully integrated

Telemach Slovenia in 2009 and 17 smaller targets between 2011 and 2014

Source: Company data.

27

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Strictly confidential – intended for the recipient only

Significant potential to accelerate growth

4

Strong brand Distribution scale Network RGUs Strong premium brand Young brand, perceived as low-cost 12 15 9 86 Cable / FTTx ~300k HPs 2G / 3G / 4G National 187k 132k 141k 14k – – – 295k

 Cross-sell fixed and mobile

services to Tušmobil and Telemach customers

 Larger customer base to

target and enhanced distribution platform

 Leverage powerful quad-play

bundles to gain market share

 Enhanced focus on enterprise

customers though quality quad play offerings

 Lower mobile ARPU decline

through improved brand / quality perception

Own stores Technology

Scale €84m €77m

2014 Revenue PoS Brand perception Coverage Pay TV Broadband Fixed telephony Mobile

Source: Company data. (1) Cable pay-TV subscribers only.

(1)

 Significant revenue synergies achievable in the next 3-4 years

28

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Tušmobil historical financial performance

Revenue EBITDA EBITDA-Capex Capex

9.2 12.0 11.5 2012 2013 2014 EBITDA 72.2 75.9 77.4 2012 2013 2014 Revenue

EBITDA margin % 13% 16% 15%

4.0 5.3 4.6 2012 2013 2014

Capex % of revenue

(€m) (€m) (€m)

(1) (1) (1) (1)

Source: Company data. (1) Capex 2014 net of spectrum costs of €20.6m paid in H1 2014. Total capex for 2014 was €25.2m.

6% 7% 6%

(1)

5.2 6.7 7.0 2012 2013 2014

Capex % of EBITDA

(€m)

57% 56% 61%

(1)

(1)

 Strong historical revenue growth combined with increasing margins with further upside

29

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Snapshot of United Group + Tušmobil

Source: Company data Note: Revenue split different versus HY reporting. DTH revenues are split by geographies above. HY report includes DTH revenues under SBB Serbia Group. (1) Contribution pro forma for Tušmobil. (2) Leading broadband internet provider within footprint and second position in overall broadband internet market following the respective incumbent with national footprint. (3) Cable RGUs in markets consist of pay-TV, broadband internet and fixed-line telephony RGUs. (4) DTH RGUs in Slovenia includes RGUs for DTH International which is in charge of distributing PINK channels in Western Europe. (5) Mobile RGUs in Slovenia include mobile RGUs for Telemach Slovenia and Tušmobil as of December 2014.

RGUs (Dec ’14) Slovenia Pay-TV Broadband (within footprint) Fixed telephony Positioning (by market share)

(3)

Entities / core brands Contribution to 2014 revenue from key jurisdictions(1) Country EU membership / Currency Cable DTH Cable RGU/sub OTT Croatia Montenegro United Media Group Macedonia Serbia Bosnia 460k 32k 2.46x Member € Candidate € Member HRK Candidate MKD

(4)

NR €

  • (2)

(2) (2)

  • N/A

BAM Candidate RSD 852k 197k 1.67x 5k 105k 220k 1.87x

  • 50k
  • 32k
  • 16k
  • 33%

47% 9% Worldwide NR € / Hard currencies

  • 81k

Mobile(5) 309k

  • Mobile telephony
  • 30
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Q&A

Strictly confidential – intended for the recipient only

31

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Highlights Financial review Appendices

Agenda

Introduction Operational review Mergers & Acquisitions Tušmobil

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Pro Forma Comprehensive Income Data

Pro forma Comprehensive Income Data

The Company Pro forma year ended December 31, 2013 2014 (in € thousands)

Revenue......................... 243,022 283,696 Other income ................. 3,324 6,255 Content cost ................... (52,795) (56,854) Satellite capacity cost .... (7,305) (7,309) Internet cost ................... (4,472) (11,800) Materials costs ............... (8,528) (6,792) Staff costs ...................... (23,441) (28,611) Depreciation ................... (38,306) (49,518) Amortization of intangible assets (26,782) (28,430) Other operating expenses (70,336) (91,187) Results from operating activities 14,381 9,449 Finance income .............. 4,906 6,692 Finance costs .................. (48,960) (81,122) Net finance costs ........... (44,054) (74,430) Profit/(loss) before tax . (29,673) (64,981) Income tax (expenses)/benefit 1,036 (109) Profit/(loss) for the period (28,637) (65,090)

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Historical Balance Sheet Data

Historical Balance Sheet Data

Slovenia Broadband The Company As of December 31, 2013 As of December 31, 2014 (in € thousands)

Cash and cash equivalents .............................................................................................. 8,229 16,182 Current assets .................................................................................................................. 80,613 95,559 Non-current assets .......................................................................................................... 774,683 1,060,271 Total assets .................................................................................................................... 855,296 1,155,830 Current liabilities ............................................................................................................ 101,099 101,915 Non-current liabilities ..................................................................................................... 342,620 564,078 Total liabilities ............................................................................................................... 443,719 665,993 Total equity ..................................................................................................................... 411,577 489,837 Total equity and liabilities ............................................................................................ 855,296 1,155,830

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Consolidated Statement of Cash Flows Information

Slovenia Broadband The Company(1) Year ended December 31, Two months ended February 28, Year ended December 31, 2013 2014 2014 (in € thousands)

Cash flows from operating activities .............................................. 70,235 19,834 242(2) Cash flows from (used in) investing activities ................................ (146,334) (12,831) (623,072)(3) Cash flows from (used in) financing activities ............................... 69,151 (144) 168,762(3) Increase (decrease) in cash and cash equivalents ............................ (6,948) 6,861 (454,068) (1) Includes cash flow information of Slovenia Broadband and its subsidiaries from March 1, 2014. (2) Cash flows from operating activities for the year ended December 31, 2014 for the Company are not comparable to prior periods as they include the effects of one-off cash payments for costs and expenses of the Company of, among others, (i) €34 million incurred in connection with the acquisition of Slovenia Broadband and its subsidiaries by the Issuer on March 6, 2014, (ii) €8 million (net of certain refunds), in one-off tax payments and (iii) €3 million in interest payments in January and February 2014, in relation to then-existing indebtedness as well as the Original Notes, as both were simultaneously outstanding pending completion of the Issuer’s acquisition

  • f Slovenia Broadband in March 2014. In addition, we incurred certain other one-off cash costs in 2014 related to
  • ur refinancing and group restructuring.

(3) For the movements in cash flows provided by (used in) investing activities and cash flows provided by (used in) financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Flow” and the cash flow statement for the Company for the year ended December 31, 2014, which is included elsewhere in this offering memorandum.