United Group BO 2014 financial results presentation 29 April 2015 - PowerPoint PPT Presentation

United Group BO 2014 financial results presentation 29 April 2015

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. In addition, this presentation contains summary unaudited pro forma condensed combined financial information for Adria Midco B.V. and its subsidiaries for the year ended December 31, 2014, which represents the arithmetical addition of the financial information of Adria Midco for the year ended December 31, 2014 (which includes the financial results of Slovenia Broadband S.à r.l. and its subsidiaries from March 1, 2014) and the financial information of Slovenia Broadband S.à r.l. for the two months ended February 28, 2014, after applying certain intercompany eliminations and making certain pro forma adjustments to give effect to the acquisition by United Group B.V. of Slovenia Broadband S.à r.l. and its subsidiaries on March 6, 2014, as though it had occurred on January 1, 2014. This presentation also contains summary unaudited pro forma condensed combined financial information for Adria Midco B.V. and its subsidiaries for the year ended December 31, 2013, which represents the financial information of Slovenia Broadband S.à r.l. and its subsidiaries for the year ended December 31, 2013, after making certain pro forma adjustments to give effect to the acquisition by United Group B.V. of Slovenia Broadband S.à r.l. and its subsidiaries on March 6, 2014, as though it had occurred on January 1, 2013. The unaudited pro forma financial information for Adria Midco B.V. and its consolidated subsidiaries is presented for informational purposes only and is not intended to represent or be indicative of the results of operations or financial position that we would have reported had the acquisition by United Group B.V. of Slovenia Broadband S.à r.l. and its subsidiaries been completed as of the dates and for the periods presented herein and should not be taken as representative of our results of operations or financial condition following the completion of such transaction. 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 Tušmobil Appendices 3

Introduction to United Group South-East Europe’s leading provider of pay-TV and broadband  2020 Senior Notes services Issuer United Group B.V.  2.2 million cable and satellite TV, broadband, fixed-line and mobile Listed GEM, Irish Stock Exchange 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 broadband that is currently underpenetrated relative to other CEE and € 625 million Outstanding notes Western European markets Coupon 7.875%  Broad reach via cable and direct-to-home platforms across the region, Maturity 15 November 2020 and ethnically targeted over-the-top content platforms internationally Coupon dates 15 November & 15 May  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 Tušmobil Appendices 5

2014: operational highlights RGUs by service (k)  Healthy year-on-year RGU growth  815 across all services 805  driven predominantly by increased multi- 468 432 play subscribers +1% 424 400 +50% 250 +152% +43% +10% +8% 167 87 73 61 29  Homes passed up by 8% to 1,436k vs. 2013 due to Cable pay-TV DTH pay-TV OTT Broadband Fixed -line Other internet telephony services  expansion and investment in our network  acquisition of Broadband Montenegro 2013 2014  Blended cable ARPU up by 7% to € 17.9 vs. 2013 as a Homes passed (k) Blended cable ARPU ( € ) result of  successful execution of our strategy aimed at 17.9 1,436 selling more services to our cable subscribers +7%  increased revenue from cable network-based + +8% services 1,331 16.7  migration from lower-priced to higher-priced service packages  price increases in Serbia (March 2014) and 2013 2014 2013 2014 Slovenia (April 2014 )  low churn rates 6

2014: financial highlights Revenues ( € m)  Revenues up 17% year-on-year to € 283.7 million as a result of 283.7 +17%  organic growth and acquisitions  growing number of RGUs 243.0  price increases 2013 2014 Adjusted EBITDA ( € m)  Adjusted EBITDA up 22% year-on-year to € 133.5 million 133.5 +22% 109.1  Group Adjusted EBITDA growing faster than revenues  reflects ability to capitalise on customer relationships through sales of additional and higher margin products 2013 2014  Net Leverage down to 3.93x from 4.22x 4.30x 4.22x 4.05x * Annualised Last Two Quarter Adjusted EBITDA is calculated by 3.93x multiplying the Adjusted EBITDA for the two most recent quarters by two. Q4 2013 Q4 2014 * Gross leverage Net leverage 7

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

Network expansion Homes passed across key markets Key developments SBB Serbia Homes passed (k) +6%  Organic increase driven by investments 892 aimed at network extension and 843 modernisation in regions where a strong penetration rate is expected +2% +5% 301 296 Telemach Slovenia 198 188  Organic increase against 2013, with 5k additional homes passed 2013 2014 2013 2014 2013 2014 SBB Serbia Telemach Slovenia Telemach BH Telemach BH  Organic increase due to further network Telemach Podgorica expansion during the period  Additional growth on Group level due to acquisition of BBM (renamed to Telemach Podgorica), DTH platform in Montenegro, with 45k homes passed 9

Increasing subscribers and RGUs Key developments RGUs vs. Unique cable subscribers  Increasing cable subscribers as a Our 815k unique cable subscribers order on average between 1.5x and result of organic network growth 2.5x different services Faster growth in RGUs per unique  cable subscribers driving overall performance RGUs (k) Unique cable subs (k) SBB Serbia & Telemach BH 2,125 +13% 815 +1% Start of telephony liberalisation and  cross-selling multi-play offers to 1-Play 1,887 805 subs Telemach Slovenia 2013 2014 2013 2014 Cross-selling multi-play offers to ~27%  of 1-Play subscribers (3-Play)  Mobile offering to provide further boost RGUs vs. Unique cable subscribers 2013 2014 (4-Play) SBB Serbia 1.5x 1.7x Upgrading existing customers to more  Telemach Slovenia 2.4x 2.5x premium products Telemach BH 1.7x 1.9x 10