United Group BO FY 2015 financial results presentation 28 April - PowerPoint PPT Presentation

United Group BO FY 2015 financial results presentation 28 April 2016

Disclosure Regarding Forward-Looking Statements and the Presentation of Certain Financial Information 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 other 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. This presentation contains summary audited financial information for Adria Midco B.V. and its subsidiaries for the twelve months ended December 31, 2015, unless another source, such as management accounts, is specifically mentioned. In addition, this presentation contains summary unaudited pro forma condensed combined financial information for Adria Midco B.V. and its subsidiaries for the twelve months ended December 31, 2014, which represents the arithmetical addition of the financial information of Adria Midco B.V. for the twelve months 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. 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 our 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. 2

Agenda Introduction Highlights Operational review Financial review Mergers & Acquisitions Appendices 3

Introduction to United Group South-East Europe’s leading provider of pay-TV and broadband  2020 Senior Notes services, with a strong presence in mobile telephony following the Issuer United Group B.V. Tušmobil acquisition Listed GEM, Irish Stock Exchange 2.85 million cable and satellite TV, broadband, fixed-line and mobile  RGUs across the six countries of former Yugoslavia Governing Law State of New York  Operating in a market characterised by rapidly growing pay-TV and € 625 million Outstanding notes broadband that is currently underpenetrated relative to other CEE Coupon 7.875% and Western European markets Maturity 15 November 2020 Broad reach via cable and direct-to-home platforms across the  region, and ethnically targeted over-the-top content platforms Coupon dates 15 November & 15 May 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 4

Agenda Introduction Highlights Operational review Financial review Mergers & Acquisitions Appendices 5

FY 2015: operational highlights  Healthy year-on-year RGU growth RGUs by service (k)**  Across all services 920  Driven predominantly by increased multi- 815 play subscribers and acquisitions 558 474 468 +13% 432  Homes passed up by 4% to 1,495k YoY due to 343 331 +94% +23% +19% 250  Expansion of and investment in our network 116 107 +10% 2334% 87 60  +37% Acquisition of 6 entities in Bosnia and 14 Herzegovina Cable pay- DTH pay- OTT Broadband Fixed -line Mobile Other  Growth partly offset by elimination of double TV TV internet telephony services services counted homes passed in Serbia in 2015  Blended cable ARPU up by 2% to € 18.3 YoY as a result FY 2014 FY 2015 of  Successful execution of our strategy aimed at Homes passed (k) selling more services to our cable subscribers Blended cable ARPU  ( € ) Increased revenue from cable network-based 1,495 18.3 services 1,436 17.9 +4% +2%  Migration from lower-priced to higher-priced service packages  Blended ARPU growth dampened by one time negative effect of BiH acquisitions, which had lower blended ARPU than existing BiH operations FY 2014 FY 2015 FY 2014 FY 2015 ** Comparability vs. FY 2014 is affected by the reclassification of B2B cable subscribers at SBB, from unique cable subscribers to “Other” subscribers, in line with Group policy as of 2015. Excluding this effect, the figure would have been 937k vs. 815k in FY 2014. The significant increase in mobile subscribers is due to the Tušmobil acquisition 6

FY 2015: financial highlights Revenues ( € m)  Revenues up 33% YoY to € 377.3 million as a result of 377.3 +33%  Organic growth and acquisitions 283.7  Growing number of RGUs  Price increases FY 2014 FY 2015  Adjusted EBITDA up 21% YoY to € 161.0 million  EBITDA growth lower than revenue growth due to inclusion of Adjusted EBITDA ( € m) mobile business in Slovenia with lower margins than cable 161.0 business 133.5 + 21%  Net leverage* up to 3.97x from 3.93x  Additional € 150 million of debt issued in April 2015 by tapping the high yield bond with the interest rate of 7.875% FY 2014 FY 2015  Leverage increase due to interest payment for the bond in November 2015 Leverage 4.06x 4.05x * Annualised Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two times the amount of Consolidated Adjusted Pro Forma L2Q EBITDA 3.97x 3.93x NB: FY 2015 financials are based on audited IFRS results (except for adjusted EBITDA), while quarterly results are based on management data. The pro-forma FY 2014 income statement include 12 months of UG results and 2 months results FY 2014 FY 2015 of Slovenia Broadband (for the period ended 28 February 2014). Gross leverage Net leverage 7

Agenda Introduction Highlights Operational review Financial review Mergers & Acquisitions Appendices 8

Network expansion Homes passed across key markets Key developments SBB Serbia Homes passed (k)  Decrease of 5% following elimination of network overlap between SBB and 892 KDS in Novi Sad after the merger of 844 -5% the two companies Telemach Slovenia  Organic increase against FY 2014, with 3k additional homes passed Telemach BiH  Increase of 53% due to the +1% acquisition of 6 cable operators in July 2015 +53% 302 304 301 198 FY 2014 FY 2015 FY 2014 FY 2015 FY 2014 FY 2015 SBB Serbia Telemach Slovenia Telemach BH 9