United Group BO 9M 2016 financial results presentation 29 November - PowerPoint PPT Presentation

United Group BO 9M 2016 financial results presentation 29 November 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 nine months ended September 30, 2016. The interim statement of financial position for Adria Midco B.V. and its subsidiaries as at 30 September 2016 and as at 30 September 2015, 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 nine months periods then ended have been reviewed by our independent auditors in accordance with the International Standard on Review Engagements 2410 and have been prepared 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 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 3.06 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 characterized by growing pay-TV and € 775 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

9M 2016: operational highlights RGUs by service (k)**  Healthy year-on-year RGU growth 958 912 – Across all services – Driven predominantly by increased multi-play 603 subscribers and the acquisition of M-Kabl in 541 484 +5% Montenegro 465 404 380 +4% +12% +12% 324 321 +4%  Homes passed up by 4% to 1,553k YoY due to +26% +17% 118 112 113 100 – Expansion of and investment in our network – Acquisition in Montenegro Cable pay- DTH pay- OTT Broadband Fixed -line Mobile Other TV TV internet telephony services services 9M 2015 9M 2016  Blended cable ARPU up by 5% to € 19.3 YoY as a result of Homes passed (k) Blended cable ARPU – Successful execution of our strategy aimed at ( € ) selling more services to our cable subscribers 1,553 19.3 1,487 18.3 – Increased revenue from cable network-based +5% +4% services – Migration from lower-priced to higher-priced service packages – Price increases in Serbia, Slovenia and Bosnia and Herzegovina 9M 2015 9M 2016 9M 2015 9M 2016 ** Following the Tušmobil acquisition mobile service RGUs are no longer reported under Other services due to their increased importance. 6

New reporting structure  Prior to January 1st 2016, results of DTH operations throughout the region were reported within SBB Serbia segment - as of January 1st 2016, results of DTH operations reported within the segment where these operations occur. These changes in the reporting structure were also made for the 9M 2015 results for comparison purposes. – 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. – Telemach Slovenia includes the results of cable and mobile services in Slovenia and DTH operations in Slovenia – Telemach BH includes the results of cable and DTH services in Bosnia and Herzegovina – 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 Montenegro (renamed from Broadband Montenegro) including DTH services in Montenegro  In 9M 2015 results, which were published last year, results of all DTH operations were included in SBB Serbia segment 7

9M 2016: financial highlights Revenue ( € m)  Revenues up 23% YoY to € 336.4 million as a result of 336.4 +23%  273.4 organic growth and acquisitions  growing number of RGUs  price increases 9M 2015 9M 2016  Adjusted EBITDA up 21% YoY to € 140.9 million Adjusted EBITDA ( € m)  140.9 EBITDA growth in line with revenue growth despite inclusion of 21% 116.8 mobile business in Slovenia with lower margins than the cable business  Like-for-like margin improvements in both cable and mobile businesses 9M 2015 9M 2016  Net leverage* up to 4.15x from 3.97x Leverage  Leverage increase due to cash outflow related to acquisitions and 4.34x the loan issued in connection with the new management incentive plan** 4.15x 4.04x 3.97x * Annualized Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two times the amount of Consolidated Adjusted Pro Forma L2Q EBITDA H1 2016 9M 2016 ** For further detail, please see the 9M 2016 High Yield Bondholder Report 8 Gross leverage Net leverage

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

Network expansion Key developments Homes passed across key markets Homes passed (k) SBB Serbia 892  Increase of 6% caused by organic 839 network expansion 6% Telemach Slovenia  Organic increase against 9M 2015, with 4k additional homes passed Telemach BH 309  Increase of 3% due to organic network 301 306 302 expansion +1% +3% 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 SBB Serbia Telemach Slovenia Telemach BH 10