United Group BO Q1 2016 financial results presentation 24 May 2016 - PowerPoint PPT Presentation

United Group BO Q1 2016 financial results presentation 24 May 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 unaudited condensed financial information for Adria Midco B.V. and its subsidiaries for the three months ended March 31, 2016. Both Q1 2015 and Q1 2016 data is based on management results, which may differ from IFRS results. 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 2.9 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

Q1 2016: operational highlights RGUs by service (k)  Healthy year-on-year RGU growth 922 – across all services 805 – driven predominantly by increased multi- 566 475 play subscribers 479 +15% 437 364 343 +18% + 19 % 271 +18%  Homes passed up by 9% to 1,499k YoY due to +2001% 110 112 +9% 93 95 +34% – 16 expansion of and investment in our network – acquisition of Broadband Montenegro and 6 Cable pay- DTH pay- OTT Broadband Fixed -line Mobile Other TV TV internet telephony services services entities in Bosnia and Herzegovina  Blended cable ARPU up by 3% to € 19.0 YoY as a Q1 2015 Q1 2016 result of – successful execution of our strategy aimed at selling more services to our cable Blended cable ARPU Homes passed (k) subscribers ( € ) – 19.0 increased revenue from cable network-based 1,499 18.3 +3% +9% services 1,378 – migration from lower-priced to higher-priced service packages – Blended ARPU growth dampened by one time negative effect of BH acquisitions, which Q1 2015 Q1 2016 Q1 2015 Q1 2016 had lower blended ARPU than existing BH operations 6

New reporting structure  Prior to January 1 2016, results of DTH operations throughout the region reported within SBB Serbia segment - as of January 1 2016, results of DTH operations reported within the segment where these operations occur – SBB Serbia includes the results of cable services in Serbia and DTH operations in Serbia, Croatia and Macedonia, including the results of EUnet (acquired in May 2015). Absolut Solutions and Totalna TV Croatia results are included in the SBB Serbia segment, however their results are not reflected in the consolidated results of SBB Serbia Group. In Q1 2015 SBB Serbia results also included DTH operations in Slovenia, Bosnia and Herzegovina, and Montenegro – Telemach Slovenia includes the results of cable and mobile services in Slovenia and DTH operations in Slovenia (as of January 1, 2016) – Telemach BH includes the results of cable and DTH services in Bosnia and Herzegovina (as of January 1, 2016) – United Media Group (formerly Adria Media Group) includes the results of media and content business including the results of N1 Info, Grand Production and Orlando Kids and Bambino – Other Businesses includes other operating businesses, such as NetTV and Telemach Podgorica (renamed from Broadband Montenegro) including DTH services in Montenegro (as of January 1, 2016) Please see appendix for like for like comparisons of revenue, adjusted EBITDA and capital expenditures for Q1 2016 vs. Q1 2015. 7

Q1 2016: financial highlights Revenue in m ( € )  Revenues up 40% YoY to € 103.8 million as a result of 103.8 +40% – organic growth and acquisitions 74.2 – growing number of RGUs – price increases Q1 2015 Q1 2016 Adjusted EBITDA in m  Adjusted EBITDA up 36% YoY to € 45.5 million ( € ) – EBITDA growth lower than revenue growth due to inclusion of 45.5 33.4 mobile business in Slovenia with lower margins than the cable +36% business – Like for like margin improvements in both cable and mobile businesses Q1 2015 Q1 2016  Net leverage* up to 4.01x from 3.97x Leverage – Leverage increase due to deferred payment for Tušmobil of € 20 million at the end of March 4.11x 4.06x 4.01x * Annualised Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two 3.97x times the amount of Consolidated Adjusted Pro Forma L2Q EBITDA FY 2015 Q1 2016 Gross leverage Net leverage 8

Agenda Introduction Highlights Operational review Financial review Mergers & Acquisitions Appendices 9

Network expansion Homes passed across key markets Key developments Homes passed (k) SBB Serbia 846 832  Increase of 2% caused by organic network expansion 2% Telemach Slovenia  Organic increase against Q1 2015, with 4k additional homes passed Telemach BH  Increase of 52% due to the +1% acquisition of 6 cable operators in July 2015 303 305 301 +52% 199 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 SBB Serbia Telemach Slovenia Telemach BH 10