United Group BO 9M 2017 financial results presentation 28 November - PowerPoint PPT Presentation

United Group BO 9M 2017 financial results presentation 28 November 2017

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 reviewed condensed financial information for Adria Midco B.V. and its subsidiaries for the nine months ended September 30, 2017. The statement of financial position for Adria Midco B.V. and its subsidiaries as at 30 September 2017 and as at 30 September 2016, 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 United Group B.V. Senior Notes * South-East Europe’s leading provider of pay-TV and  Issuer United Group B.V. broadband services, with a strong presence in mobile telephony following the Tušmobil acquisition Listed International Stock Exchange (Channel Islands)  3.5 million cable and satellite TV, broadband, fixed-line Governing Law State of New York and mobile RGUs across the six countries of former 2022 Fixed Rate Notes Yugoslavia €575 million Outstanding notes  Operating in a market characterized by growing pay-TV and broadband that is currently underpenetrated relative Coupon 4.375% to other CEE and Western European markets Maturity 1-Jul-22  Broad reach via cable and direct-to-home platforms Coupon dates 15 January & 15 July across the region, and ethnically targeted over-the-top content platforms internationally 2024 Fixed Rate Notes €325 million Outstanding notes Reputation for providing the most attractive content in  our respective markets, available across all devices and Coupon 4.875% formats Maturity 1-Jul-24  Group strategy leverages established proven strengths Coupon dates 15 January & 15 July – extensive network, Floating Fixed Rate Notes differentiated content offerings, and – €450 million Outstanding notes – loyal customer base Coupon Three-month EURIBOR plus 4.375% to further strengthen market leadership in the region and to target the region’s expat community with best Maturity 1-Jul-23 in class local content delivered through the internet Coupon dates 15 October, 15 January, 15 April, 15 July Owned by funds affiliated with KKR, EBRD and the  * On June 30, 2017, we had in place a € 775 million bond that was issued under the 2013 indenture. These management notes were redeemed in full on July 27, 2017 ( € 817.5 million paid, including accrued and unpaid interest plus redemption costs). In addition, all outstanding borrowings under the RCF dated November 5, 2013 and the PIK facility agreement dated July 3, 2014 were paid 4

Agenda Introduction Highlights Operational review Financial review Mergers & Acquisitions Appendices 5

9M 2017: operational highlights  Healthy year-on-year RGU growth across all services – Driven predominantly by organic subscriber growth, increased multi-play subscribers and acquisitions of Ikom in Serbia with 161k RGUs  Homes passed up by 13% to 1,750k YoY due to – Expansion of and investment in our network – Acquisitions in Serbia  Blended cable ARPU up by 5% to € 20.2 YoY as a result of – Successful execution of our strategy aimed at selling more services to our cable subscribers – Homes passed (k) Increased revenue from cable network-based Blended cable ARPU ( € ) services 1,750 – Migration from lower-priced to higher-priced 20.2 1,553 19.3 +13% service packages +5% – Price increases in Serbia, Slovenia and Bosnia and Herzegovina 9M 2016 9M 2017 9M 2016 9M 2017 6

9M 2017: financial highlights Revenues ( € m) 382.6 336.4  Revenues up 14% YoY to € 382.6million as a result of +14%  Organic growth and acquisitions  Growing number of RGUs  Price increases  Adjusted EBITDA up 19% YoY to € 168.0 million 9M 2016 9M 2017  Driven by our focus on profitable growth Adjusted EBITDA ( € m) 168.0  Like-for-like margin improvements in both cable and mobile 140.9 +19% businesses  Net leverage* up to 5.12x from 3.98x  Gross leverage** up to 5.27x vs. H1 2017 due to issuance of new Bond notes with total face value of € 1.35 billion 9M 2016 9M 2017 * Annualized Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two times the amount of Leverage Consolidated Adjusted L2Q EBITDA plus two times 1 month 2017 Ikom adjusted EBITDA (Ikom was consolidated into United Group from May 1, 2017), plus € 1.6 million of expected synergies with Ikom 5.27x 5.12x 4.08x ** Gross indebtedness was reduced by € 200 million, which is the amount deposited on a special account 3.98x for the acquisition of CME assets in Slovenia and Croatia. The adjustment was made as CME EBITDA is not included in the Group EBITDA which is used in the leverage calculation H1 2017 9M 2017 Gross leverage Net leverage 7

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

Network expansion Homes passed across key markets Key developments Homes passed (k) SBB Serbia  Increase of 19% caused by organic 1,059 network expansion and acquisition of 19 % Ikom with 143.5k homes passed 892 Telemach Slovenia  Organic increase against 9M 2016, with 3.7k additional homes passed Telemach BH  Increase of 4% due to organic network expansion +1% +4% Telemach MNE 321 309 310 306  Increase of 33% caused by organic network expansion following the acquisition of M-Kabl + 33 % 60 45 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 SBB Serbia Telemach Slovenia Telemach BH Telemach MNE 9

Increasing subscribers and RGUs Key developments RGUs vs. Unique cable subscribers  Increasing cable subscribers as a Our 1,091k unique cable subscribers order on average between 1.7x result of organic network growth and and 2.6x different services acquisitions of Ikom with 93k unique cable subscribers Unique cable subs (k) RGUs (k)  Faster growth in RGUs per unique 3,498 cable subscriber driving overall 1,091 performance 958 +14% +14% SBB Serbia, Telemach BH & Telemach MNE 3,060 Cross-selling of multi-play offers to 1-  Play subscribers at both entities  RGU per subscriber growth in Serbia to 2.0x, in Bosnia 2.1x and in Montenegro 9M 2016 9M 2017 9M 2016 9M 2017 1.7x Telemach Slovenia  Cross-selling of 3-Play offers to 1-Play RGUs vs. Unique cable subscribers 9M 2016 9M 2017 subscribers SBB Serbia 1.9x 2.0x Telemach Slovenia 2.6x 2.6x – Mobile offering to accelerate take Telemach BH 2.0x 2.1x up of multi-play packages Telemach MNE 1.5x 1.7x  Upgrading existing customers to premium products 10