United Group BO FY 2017 financial results presentation 30 April - PowerPoint PPT Presentation

United Group BO FY 2017 financial results presentation 30 April 2018

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 condensed financial information for Adria Midco B.V. and its subsidiaries for the twelve months ended December 31, 2017. The statement of financial position for Adria Midco B.V. and its subsidiaries as at 31 December 2017 and as at 31 December 2016, as well as the condensed consolidated interim statements of profit or loss and cash flows for Adria Midco B.V. and its subsidiaries for the twelve months periods then ended have been audited by our independent auditors in accordance with IFRS. 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 United Group B.V. Senior Notes * Europe’s  South-East leading multi-play Issuer United Group B.V. telecommunications and media provider Listed International Stock Exchange (Channel Islands) 3.6 million cable and satellite TV, broadband, fixed-line  and mobile RGUs across the six countries of former Governing Law State of New York Yugoslavia 2022 Fixed Rate Notes  Operating in a market characterized by growing pay-TV €575 million Outstanding notes and broadband that is currently underpenetrated relative to other CEE and Western European markets Coupon 4.375% Maturity 1-Jul-22  Broad reach via cable and direct-to-home platforms across the region, and ethnically targeted over-the-top Coupon dates 15 January & 15 July content platforms internationally 2024 Fixed Rate Notes  Reputation for providing the most attractive content in €325 million Outstanding notes our respective markets, available across all devices and formats Coupon 4.875% Maturity 1-Jul-24  Group strategy leverages established proven strengths – extensive network, Coupon dates 15 January & 15 July – differentiated content offerings, and Floating Fixed Rate Notes loyal customer base – €450 million Outstanding notes to further strengthen market leadership in the region Coupon Three-month EURIBOR plus 4.375% and to target the region’s expat community with best in class local content delivered through the internet Maturity 1-Jul-23 Coupon dates 15 October, 15 January, 15 April, 15 July  Owned by funds affiliated with KKR, EBRD and the management * On June 30, 2017, we had in place a € 775 million bond that was issued under the 2013 indenture. These notes were redeemed in full on July 27, 2017 (€ 817.5 million paid, including accrued and unpaid interest plus redemption costs). In addition, all outstanding borrowings under the RCF dated November 5, 2013 and the PIK facility agreement dated July 3, 2014 were paid 4

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

FY 2017: operational highlights  Healthy year-on-year RGU growth across all services – Driven predominantly by organic subscriber growth, increased multi-play subscribers and acquisitions – Serbia: Ikom (RGUs: +161k) and Kabel Group 85 (RGUs: +4k) – Slovenia: Teleing (RGUs: +31k)  Homes passed up by 13% to 1,770k YoY due to – Expansion of and investment in our network – Acquisitions in Serbia and Slovenia  Blended cable ARPU up by 5% to € 20.3 YoY as a Blended cable ARPU (€) result of Homes passed (k) – 1,770 Successful execution of our strategy aimed at 20.3 19.4 selling more services to our cable subscribers 1,571 +13% +5% – Increased revenue from cable network-based services – Migration from lower-priced to higher-priced service packages – Price increases in Serbia, Slovenia and Bosnia and Herzegovina FY 2016 FY 2017 FY 2016 FY 2017 6

FY 2017: financial highlights Revenue (€ m)  Revenues up 13% YoY to € 520.6 million as a result of 520.6 459.0 +13%  Organic growth and acquisitions  Growing number of RGUs  Price increases FY 2016 FY 2017  Adjusted EBITDA up 17% YoY to € 223.3 million  Adjusted EBITDA (€ m) Driven by our focus on profitable growth 223.3  Like-for-like margin improvements in both cable and mobile 190.4 +17% businesses  Net leverage* up to 5.20x from 5.12x  Gross leverage** up to 5.34x vs. 9M 2017 due to cash outflow related to Floating Fixed Rate Notes interest payment in October and closing of Kabel Group 85 and Teleing transactions FY 2016 FY 2017 Leverage * Annualized Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two times Consolidated Adjusted L2Q EBITDA plus two times € 0.6 million of 5 months 2017 Teleing EBITDA (Teleing consolidated in 5.34x United Group from 1 December 2017) plus two times € 0.03 million of 4 months 2017 Kabel Group EBITDA 5.27x (Kabel Group consolidated in United Group from 1 November 2017) plus € 1.3 million of expected synergies with Ikom 5.20x ** Gross indebtedness was reduced by € 200 million, which is the amount deposited on a special account 5.12x for the acquisition of CME assets in Slovenia and Croatia. The adjustment was made as CME EBITDA is not included in the Group EBITDA which is used in the leverage calculation 7 9M 2017 FY 2017 Gross leverage Net leverage

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

Network expansion Homes passed across key markets Key developments Homes passed (k) SBB Serbia 1,057  Increase of 17% driven by organic network expansion and acquisition of 17% Ikom with 143.5k homes passed 902 Telemach Slovenia  Additional 21.7k homes passed due to both organic growth and acquisition of Teleing (+19k) Telemach BH  Increase of 4% due to organic +7% +4% network expansion 329 324 312 308 Telemach MNE +33%  Increase of 33% driven by organic network expansion following the 60 acquisition of M-Kabl 45 FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 SBB Serbia Telemach Slovenia Telemach BH Telemach MNE 9