Management Update April 2016 1 i-CABLE At A Glance Integrated - PowerPoint PPT Presentation

Management Update April 2016 1

i-CABLE At A Glance Integrated Triple-Play FY2015 Revenue = HK$1,510m Communications Provider Others² 32 (2%) • Integrated services provider of television, broadband and telephony services to ~1m Internet & Multimedia¹ 348 customers (23%) • Near universal Hybrid Fibre Coaxial (“HFC”) network in Hong Kong which can be easily overlaid with a scaleable Gigabit Passive Optical Network Television 1,130 (“GPON”) for bandwidth-hungry consumers (75%) • Most watched Pay-TV platform in Hong Kong over the past 2 decades FY2015 Customers = ~ 1m • Awaiting formal free-to-air (“FTA”) license from i-CABLE Communications Limited Hong Kong government Telephony (8%) • One of the largest producers of television, film and 100 multimedia content based in Hong Kong producing Broadband 171 >10,000 hours of programming each year (14%) • One of the largest TV and film libraries in Hong Kong, with >30,000 hours of TV programmes on top of >20 years of news footage 951 Television (78%) 2 1 Mainly consumer broadband & telephony. 2 Includes inter-segment elimination.

Track Record of Innovative Multimedia Offerings Jan-2015 Rollout of GPON broadband services Jan-2010 Application Jul-2005 for FTA license Apr-2002 Aug-2015 Launch of Launch of fully Renewed UEFA in-train TV digitised news Jun / Nov-2010 Champions service production center, HD broadcast of 2010 League rights to first in Hong Kong Jun-1993 FIFA World Cup 2018 Hong Kong Cable Mar-2005 and first ever HD 2016 Jan-2000 awarded a Launched coverage of Asian Awarded telecom Pay TV license Sundream Games in Hong Kong license Motion 2015 Pictures Oct-1993 Mar-2000 Went on air with 8 i-CABLE Communications Limited Commenced channels; Launched 2012 broadband Asia's first operations 24-hour news 2010 Feb-2016 channel Launched FanHub, an 2005 Dec-2015 enhanced Pay Upgraded 1993 TV service with 2002 News platform 1999 2000 interactive Jul-2012 to HD features Unprecedented capabilities; live coverage of Launched Nov-1999 London Olympics News hd209 IPO to raise 2012 US$550m for 20% of the company 3

Overview of Business Segments Television Internet & Multimedia Others • TV subscription business, • Broadband Internet access • Sundream Motion Pictures Limited (“ Sundream ”): Movie advertising, channel services, VoIP telephony, carriage, programme and other Internet access- production and distribution licensing, miscellaneous TV- related businesses arm which acquires, related businesses produces and distributes • Services delivered via HFC films in Hong Kong and and GPON internationally • International Distribution Limited (“ iDL ”): Distribution arm of i- CABLE’s TV content to third parties locally and overseas i-CABLE Communications Limited • Inter-segment elimination FY2015 Key Financials (HK$m) Revenue 1,130 348 32 Reported EBITDA 1 (46) 143 (117) Margin (%) (4)% 41% NA Adjusted EBITDA 2 53 143 (88) Margin (%) 5% 41% NA Note: Revenue and EBITDA based on segment revenues, which include inter-segment revenue and EBITDA. 1 Reported EBITDA is defined as earnings before interest income, finance costs, impairment losses on investment, non-operating income / expenses, provisions for 4 income tax, depreciation of property, plant and equipment but after amortisation of programming rights and impairment losses on programming library (see note 4 to the financial statements in i-CABLE 2015 Annual Report). 2 Adjusted EBITDA is calculated by adding amortisation of programming library and impairment losses on programming library to Reported EBITDA. Adjusted EBITDA is shown for comparative purposes to provide EBITDA after incorporating all non-cash items.

Financial Overview 5

Television Revenue May-2013: Cessation of Barclays Premier League broadcast rights 1,757 1,749 94 94 1,546 291 324 101 1,266 285 1,130 86 (HK$m) 71 259 244 1,364 1,338 1,160 922 815 i-CABLE Communications Limited 2011 2012 2013 2014 2015 CATV Air-time Sales Others¹ • Television revenue has decreased in recent years mainly attributable to a decrease in revenue related to Barclays Premier League (“BPL”) — Accompanied by a corresponding contraction in programming costs to sustain EBITDA • Proliferation of content-on-demand via OTT platforms both locally and internationally, as well as intense competition via existing players and new entrants, have continued to put pressure on subscription revenue and advertising income 1 Includes channel service fees, premises lease rental and other revenues. 6

Television Key Performance Indicators ARPU 245 244 231 208 208 (HK$/ month)¹ 461 Subscribers 434 388 ('000) 338 303 i-CABLE Communications Limited 2011 2012 2013 2014 2015 • Continued, but more gradual, contraction of subscription TV customer base, amidst stabilising ARPU as BPL impact is fully absorbed Note: The above key performance indicators include CATV subscribers with ARPU of HK$100 and above only. 7 1 Calculated as revenue divided by the average number of subscribers divided by 12, where average number of subscribers are calculated as the average of the number of subscribers on the first day of the year and on the last day of each month of the year.

Internet & Multimedia Revenue 365 348 348 340 338 46 38 43 49 73 (HK$m) 319 310 305 290 267 i-CABLE Communications Limited 2011 2012 2013 2014 2015 Broadband¹ Others² • Fibre-speed broadband migration and perception of “better speed equals better quality” have put pressure on Internet & Multimedia revenue • Internet & Multimedia revenue has remained relatively stable despite a contracting subscriber base as customer yield improves 1 Broadband revenue includes broadband access revenue and homeline telephony revenue (mainly generated as part of bundled services for broadband 8 customers). 2 Revenue from “Others” includes online advertising revenue, content / portal revenue, interconnect revenues and other revenues .

Internet & Multimedia Key Performance Indicators % of Total Revenue I&M ARPU 98 98 108 117 125 (HK$/month)¹ 257 239 Subscribers 231 219 194 ('000)² 2011 2012 2013 2014 2015 i-CABLE Communications Limited I&M Churn 1.7% 2.2% 1.8% 1.5% 1.8% Rate 3 • Active upselling to higher bandwidth plans upon contract renewal, and active rate adjustment in subscription plan to align with competition in a stabilised market, have led to an overall increase in blended ARPU • I&M subscribers include subscribers of broadband and/or telephony services 1 Based on annual broadband access and homeline telephony revenue divided by the average of the Internet & Multimedia subscribers, where average number of subscribers are calculated as the average of the number of subscribers on the first day of the year and on the last day of each month of the year. The number of subscribers is net of double counting of subscribers that subscribe to both broadband and telephony services. 9 2 Net of double counting of subscribers that subscribe to both broadband and telephony services. 3 Represents average of the monthly churn rate of the year. Monthly churn rate is calculated as the number of subscriber churn in a month divided by the opening number of subscribers for that month. The number of subscribers for churn rate calculation is based on a combined gross subscriber base for broadband and telephony and does not exclude double-counting of subscribers that subscribe to both broadband and telephony plans.

Others Revenue 35 37 6 32 15 32 2 21 33 17 22 27 (HK$m) 14 16 12 31 31 28 20 15 (20) (21) (25) (30) (35) 2011 2012 2013 2014 2015 iDL Sundream Others Inter-Segment Elimination i-CABLE Communications Limited • iDL monetises i- CABLE’s programme library through worldwide distribution • Sundream’s revenue has gained traction as it ramped up its film production and distribution capabilities — During 2015, Sundream theatrically released 20 films in Hong Kong and Macau • “Others” includes revenue for i- CABLE’s retail shops and unallocated revenue — i-CABLE has closed its last retail shop at the end of 2015 given its low cost effectiveness 10

Adjusted EBITDA Total Segmental Breakdown 2011 2012 2013 2014 2015 % of Total Revenue 7.9% 3.5% 12.6% 12.5% 7.2% Television EBITDA 69 (30) 125 34 (46) 243 209 Adjusted 149 59 210 133 53 EBITDA 94 166 (HK$m) Multimedia 121 108 Internet & 88 75 EBITDA 127 118 125 156 143 149 128 98 88 78 Other & Inter- Elimination Segment EBITDA (117) (110) (101) (103) (117) (19) (22) i-CABLE Communications Limited Adjusted 2011 2012 2013 2014 2015 EBITDA (110) (101) (92) (80) (88) Reported Adjustment • Adjusted EBITDA is calculated by adding amortisation of programming library and impairment losses on programming library to Reported EBITDA • These adjustments mainly relate to — Television EBITDA, which is adjusted by adding-back the abovementioned non-cash expenses from Programming / Content costs — EBITDA derived from Sundream, for which a small amount of non-cash expenses are added 11 back to EBITDA from “Other & inter-segment elimination ”