Q4 and Full-year 2013 Presentation Investor and Analyst Conference - PowerPoint PPT Presentation

Q4 and Full-year 2013 Presentation Investor and Analyst Conference Call February 14 , 2014

Disclaimer Disclosure Regarding Forward-Looking Statements This presentation includes forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology, including words such as “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will”, “could” or “should” or, in each case, their negative or other variations thereof or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include statements regarding, or based upon, our Management’s current intentions, beliefs or expectations concerning, among other things, our future results of operations, financial condition, liquidity, prospects, growth, strategies, potential acquisitions, or developments in the industry in which we operate. Forward-looking statements are based upon assumptions and estimates about future events or circumstances, and are subject to risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will materialize. Accordingly, our actual results may differ materially from those expressed or implied thereby. Unless otherwise specified, forward-looking statements herein speak only as of the date of this presentation. We undertake no obligation, and do not intend, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above. Readers are cautioned not to place undue reliance on any forward-looking statements. 2

Leadership Change As many of you know, Tomas Franzen is leaving Com Hem after 6 years as CEO Tomas Franzén Outgoing CEO Sincere thanks and best wishes to Tomas Franzén – our outgoing CEO 3

Agenda Business Strategy and Operational Results Andrew Barron Financial Results Joachim Jaginder Questions Andrew Barron, Joachim Jaginder Appendix 4

Com Hem Overview Revenue Development Com Hem Snap Shot ( SEK m)  Excellent upgraded network 4 562  Market-leading TiVo product 4 520 4 448* 4 318  Large customer base 4 087  Strong brand Digital TV Analog FiberCoax VOD FY 09 FY 10 FY 11 FY 12 FY 13 FiberLAN Telephony Broadband * TiVo launch delayed 5 months Adjusted EBITDA Development Strong Cash Conversion ( SEK m)  Good cost discipline  High bandwidth – clear path for future bandwidth upgrades 2 262 2 211  Parallel, non-conflicting services  Excellent margins 2 138 ADSL2+ 1 919  Strong cash generation 49,7% 49,6% 1 729 47,3% 44,4% Adjusted EBITDA 42,3% Adjusted EBITDA Margin (%) FY 09 FY 10 FY 11 FY 12 FY 13 5

Com Hem Priorities There are six strategic priorities that together will deliver sustained, profitable growth for Com Hem Grow DTV Subscribers and ARPU with TiVo 1 2 Continue to Grow Broadband subscribers and ARPU 3 Increase penetration of Dual & Triple Play Customers (Incl. Telephony) 4 Improve Customer Satisfaction (NPS) and Customer Churn 5 Launch B2B 6 Increase Homes Connected (and Upsell from Analogue to DTV) Sustained Profitable Growth 6

1. Grow DTV with TiVo Quarterly Development - Digital-TV Development DTV Revenue, RGU and ARPU Development Change Q4 2013 vs.Q4 2012 Q4 2013 vs. Q4 2012 • Market environment continues to be competitive  TiVo launched October 7 th 2013 EoP RGUs (’000) (2.5)%  Strengthen content (e.g. Netflix) Revenue (SEKm) (3.5)% • Declining trend in DTV revenue and ARPU reversed during Q4 2013 ARPU (SEK) (2.2)% Penetration 35.1% 35.0% 34.5% 34.1% 33.7% 32.8% Connected households TiVo subscriptions sold (’000) 38 6 RGU’s (’000) Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 7

Q4 2012 DTV Adds Q4 2013 TiVo Adds 1. Grow DTV with Tivo (Cont.) We can already see signs of that KPI growth in the Q4 2013 results: Increased cross-sell for adds after cancellation** TiVo penetration of DTV base after launch 30% 25% 33% 40% Single-Play 26% 18% 20% 12% 27% Double-Play 22% 6% 11% 4% 6% 6% 4% Triple-Play 1% 40% 38% 1% 1Q 2Q 3Q 4Q 5Q 6Q 7Q Q4 2012 Q4 2013 Com Hem VMED* Ono * To get comparable quartely figures, Virgin Media first quarter of TiVo sales ** Adds after cancellations (Gross adds less Cancellations) for the quarter includes for four months of TiVo sales (launch in December 2011). Securing base with longer binding periods TiVo Impact Q4 2013  Sold 38,000 TiVo subscriptions since launch 19  6% TiVo DTV penetration after one full quarter of TiVo sales 12  Q4 2012 DTV Adds Increased cross-selling and bundling opportunities with TiVo Q4 2013 TiVo Adds  Securing DTV base with longer binding periods for TiVo adds Q4 2012 Q4 2013 8

1. Grow DTV with TiVo (Cont.) We are pairing TiVo, the best TV platform in the market, with the best content line-up in the market to drive tier mix and ARPU Content Platform Changing DTV Tier Mix • Most comprehensive channel line-up on the market (Over 140 channels of which 79 in basic XL/Max 15% tiers, TiVo Max, vs 54 channels with closest Large/Plus 16% competitor); 82% • Medium/Mellan Majority of all basic channels with catch-up* 50% functionality and available on TiVoToGo; Small/Bas 6% 19% • Leading MSO in HD with HD integrated in basic 12% tiers. Most HD channels in the market, currently DTV Base Q4 2012 TiVo Base Q4 2013* 17 HD channels in basic tiers and growing; * Current DTV campaign offers customers to try on TiVo and Max package, with the option to downspin to Plus or Mellan package within the first three months • Comprehensive Play library included in each basic tier package; Development DTV ARPU • Leading MSO in integration of SVOD. Netflix 2.6% fully integrated in TiVo, unique in the Swedish 0.9% 0.1% market. Cirkus, VoD service with the most 0.1% (1.8)% Change popular British produced Drama series, available (3.1)% 236 Q-by-Q 234 on TiVo and TiVoToGo; 232 231 • In addition, over 4,000 movies from four 225 225 suppliers available for rent; • Full coverage of premium packages with the ARPU best series, movies and live sport from C More and Viasat. Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 * Catch-up enables a customer to view a program up to 7 days after original air time. 9

2. Broadband Growing Broadband subscribers hit a record high in Q4 2013, driven by continuing demand for higher speeds Revenue, RGU and ARPU Development Change Q4 2013 vs.Q4 2012 Q4 2013 vs. Q4 2012 • Revenue increase due to: 558 543 542 551 544 543 ‒ Higher RGUs 2.8% EoP RGUs (’000) ‒ Better tier mix 320 319 323 326 320 327 ‒ ARPU growth delayed by sign-up 2.2% 197 Revenue (SEKm) 198 197 198 199 197 discounts (e.g. three month free) • (0.4)% Customer demand for higher ARPU (SEK) speeds continues Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 ‒ As of December 31, 2013, 35% of customer base subscribed for Penetration upgraded 34.6% 34.4% 33.8% 33.9% 34.1% 33.5% 100 – 500 Mbit/s services households Increasing demand for higher broadband speeds Mbit/s 100 - 500 20 - 50 5 - 10 ≤ 2 10

3. Duals and Triples A substantial opportunity Development Com Hem’s Duals and Triples Com Hem’s Duals and Triples The Opportunity Triples • Com Hem’s bundle penetrations, especially triples, remains 29% 28% 31% 30% 33% 32% relatively low compared our European TiVo Peers Duals 20% 20% 18% 19% 17% 17% • Given the economic benefits of bundling for both customers and Com Hem, this is a substantial opportunity going forward Singles 51% 51% 51% 51% 51% 51% Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Development Ono – Duals and Triples Development Virgin Media – Duals and Triples Triples Triples 40% 40% 39% 39% 39% 65% 65% 65% 66% 66% Duals 46% 45% 46% 47% 47% Duals/Singles Singles 35% 35% 35% 34% 35% 15% 15% 14% 14% 14% Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 11

3. Duals and Triples (Cont.) Impact on Fixed Telephony Development Revenue, RGUs and ARPU Bundling is Key Change Q4 2013 vs.Q4 2012 Focus going forward • Key differentiators are DTV/TiVo 355 348 339 EoP RGUs (’000) 334 327 330 (5.9)% and broadband. • Current telephony usage and variable fees are declining Revenue (SEKm) (20.2)% 122 • 122 115 113 To address the gradual decline in 116 110 106 105 99 99 97 98 fixed telephony usage, bundling is ARPU (SEK) (15.2)% key, i.e. Duals and Triples Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Penetration upgraded 22.6% 22.0% 21.2% 20.8% 20.4% 19.6% households Breakdown Telephony ARPU ( Percentage ) Variable fees Fixed fees 12