United Group BO FY 2018 financial results presentation 29 April 2019
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 audited condensed financial information for Adria Midco B.V. and its subsidiaries for the twelve months ended December 31, 2018. The statement of financial position for Adria Midco B.V. and its subsidiaries as at 31 December 2018 and as at 31 December 2017, 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 twelve months periods then ended have been audited by our independent auditors 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 Operational review Financial review Mergers & Acquisitions Appendices 3
Introduction to United Group United Group B.V. Senior Notes * Europe’s South-East leading multi-play Issuer United Group B.V. telecommunications and media provider Listed International Stock Exchange (Channel Islands) 3.8 million cable and satellite TV, broadband, fixed-line and mobile RGUs across the six countries of former Governing Law State of New York Yugoslavia 2022 Fixed Rate Notes Operating in a market characterized by growing pay-TV €575 million Outstanding notes and broadband that is currently underpenetrated relative to other CEE and Western European markets Coupon 4.375% Maturity 1-Jul-22 Broad reach via cable and direct-to-home platforms across the region, and ethnically targeted over-the-top Coupon dates 15 January & 15 July content platforms internationally 2024 Fixed Rate Notes Reputation for providing the most attractive content in €325 million Outstanding notes our respective markets, available across all devices and formats Coupon 4.875% Maturity 1-Jul-24 Group strategy leverages established proven strengths – extensive network, Coupon dates 15 January & 15 July – differentiated content offerings, and Floating Fixed Rate Notes loyal customer base – €450 million Outstanding notes to further strengthen market leadership in the region and Coupon Three-month EURIBOR plus 4.375% to target the region’s expat community with best in class local content delivered through the internet Maturity 1-Jul-23 Coupon dates 15 October, 15 January, 15 April, 15 July Owned by funds affiliated with BC Partners, KKR and the management 4
Agenda Introduction Operational review Financial review Mergers & Acquisitions Appendices 5
Network expansion Homes passed across key markets Key developments SBB Serbia Increase of 3% driven by organic network expansion Telemach Slovenia Additional 3k homes passed due to organic growth Telemach BH Increase of 3% due to organic network expansion Telemach MNE Additional 21k homes passed driven by organic growth 6
Increasing subscribers and RGUs Key developments RGUs vs. Unique cable subscribers Increasing cable subscribers as a Our 1,164k unique cable subscribers order on average between 2.1x result of organic network growth and 2.7x different services Faster growth in RGUs per unique cable subscriber driving overall performance SBB Serbia, Telemach BH & Telemach MNE Cross-selling of multi-play offers to 1- Play subscribers in all three entities RGU per subscriber growth in Serbia and Bosnia to 2.2x, and in Montenegro to 2.1x Telemach Slovenia Cross-selling of 3-Play offers to 1-Play subscribers – Mobile offering supporting take up RGUs vs. Unique cable subscribers 2017 2018 of multi-play packages SBB Serbia 2.1x 2.2x Upgrading existing customers to Telemach Slovenia 2.7x 2.7x premium products Telemach BH 2.1x 2.2x Telemach MNE 1.9x 2.1x 7
Increasing RGUs Key developments RGUs by service Healthy YoY RGU growth across almost all services Cable pay TV growth resulting from organic growth of our operations Broadband internet RGUs increased by 6% YoY, primarily attributable to an increase in multi-play subscriptions DTH pay-TV RGUs decreased by 8% YoY due to the sale of DTH operations in Croatia with 33k subscribers on January 12, 2018 OTT subscribers growth of 2% driven by organic growth Fixed line telephony RGUs up 17% YoY due to an increase in multi-play subscriptions Mobile services up 10% due to high organic growth at Telemach Slovenia Other service RGUs decreased by 1% mostly due to lower number of MMDS subscribers. 8
ARPU development Key developments Blended cable ARPU Group SBB Serbia Telemach Slovenia Telemach BH Telemach MNE Blended cable ARPU up 7% to €22.1 in FY in € 2017 2018 2017 2018 2017 2018 2017 2018 2018 as a result of positive trends across all Cable pay-TV 9.4 10.3 18.5 18.8 8.9 9.8 10.6 11.1 markets Broadband internet 9.7 10.2 17.3 17.8 9.2 9.6 8.5 8.3 Fixed-line telephony 4.4 4.0 3.7 3.3 8.4 7.4 5.1 3.3 SBB Serbia Blended cable ARPU 17.3 19.0 35.5 36.0 18.2 20.0 15.9 17.7 ARPU growth primarily a result of the continued positive impact of subscribers upgrading to multi-play packages and the price increase of the basic cable service starting from January 2018 Telemach Slovenia Blended cable ARPU increase of 1% driven by the growth in the number of our multi play subscribers. Price increase, effective as of February 2018, had a positive impact on pay-TV and Internet revenues Telemach BH Increase in blended cable ARPU per customer primarily due to a price increase in April 2018 and full year effect of a price increase from March 2017 Telemach MNE ARPU growth driven by increase in the number of our multi-play subscribers 9
Agenda Introduction Operational review Financial review Mergers & Acquisitions Appendices 10
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