United Group BO H1 2017 financial results presentation 29 August - PowerPoint PPT Presentation

United Group BO H1 2017 financial results presentation 29 August 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 unaudited condensed financial information for Adria Midco B.V. and its subsidiaries for the six months ended June 30, 2017. The statement of financial position for Adria Midco B.V. and its subsidiaries as at 30 June 2017 and as at 30 June 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 six 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. Data for the six months ended June 30, 2016 has been restated in this Presentation as this data in the H1 2016 presentation was based on management results and not reviewed by our auditors for the H1 2016 presentation. 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 Europe’s  South-East leading provider of pay-TV and United Group B.V. Senior Notes * broadband services, with a strong presence in mobile Issuer United Group B.V. telephony following the Tušmobil acquisition Listed International Stock Exchange (Channel Islands)  3.43 million cable and satellite TV, broadband, fixed-line and mobile RGUs across the six countries of former Yugoslavia Governing Law State of New York 2022 Fixed Rate Notes  Operating in a market characterized by growing pay-TV and broadband that is currently underpenetrated relative to other €575 million Outstanding notes CEE and Western European markets Coupon 4.375%  Broad reach via cable and direct-to-home platforms across Maturity 1-Jul-22 the region, and ethnically targeted over-the-top content platforms internationally Coupon dates 15 January & 15 July Reputation for providing the most attractive content in our 2024 Fixed Rate Notes  respective markets, available across all devices and formats €325 million Outstanding notes  Group strategy leverages established proven strengths Coupon 4.875% extensive network, – Maturity 1-Jul-24 – differentiated content offerings, and Coupon dates 15 January & 15 July loyal customer base – Floating Fixed Rate Notes to further strengthen market leadership in the region and to €450 million Outstanding notes target the region’s expat community with best in class local content delivered through the internet Coupon Three-month EURIBOR plus 4.375% Maturity 1-Jul-23  Owned by funds affiliated with KKR, EBRD and the management Coupon dates 15 October, 15 January, 15 April, 15 July * On July 30, 2017, we had in place a € 750 million bond that was issued under the 2013 indenture. These 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

H1 2017: operational highlights RGUs by service (k)  Healthy year-on-year RGU growth across all 1,079 services 928 – Driven predominantly by increased multi-play 704 subscribers and acquisitions of Ikom in Serbia with 161k RGUs and M-Kabl in Montenegro with 579 +16% 501 482 34k RGUs 474 430 382 361 +6% +7% +22% +1%  Homes passed up by 13% to 1,744k YoY due to +26% +19% 118 110 116 116 – Expansion of and investment in our network – Acquisitions in Serbia and Montenegro Cable pay- DTH pay-TV OTT Broadband Fixed -line Mobile Other TV internet telephony services services H1 2016 H1 2017  Blended cable ARPU up by 5% to € 20.1 YoY as a result of Homes passed (k) Blended cable ARPU (€) – Successful execution of our strategy aimed at 1,744 20.1 selling more services to our cable subscribers 19.1 1,542 +13% +5% – Increased revenue from cable network-based services – Migration from lower-priced to higher-priced service packages – Price increases in Serbia, Slovenia and Bosnia and Herzegovina H1 2016 H1 2017 H1 2016 H1 2017 6

H1 2017: financial highlights Revenues (€ m) 249.3  Revenues up 13% YoY to € 249.3million as a result of 220.3 +13%  Organic growth and acquisitions  Growing number of RGUs  Price increases H1 2016 H1 2017  Adjusted EBITDA up 18% YoY to € 108.8 million Adjusted EBITDA (€ m)  EBITDA growth ahead of revenue growth due to our focus on 108.8 profitable growth 92.6 +18%  Like-for-like margin improvements in both cable and mobile businesses  Net leverage* almost unchanged compared to Q1 2017 at 3.98x***  Gross leverage down to 4.08x vs. Q1 2017 due to Adjusted EBITDA growth and realized synergies following the Ikom acquisition H1 2016 H1 2017  Gross leverage includes funds drawn down to finance the Ikom Leverage acquisition, which closed on April 20, 2017 4.28x 4.08x * Annualized Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two times the amount of 3.98x 3.96x Consolidated Adjusted L2Q EBITDA plus two times 4 months 2017 Ikom adjusted EBITDA (Ikom was consolidated into United Group from May 1, 2017), plus € 3.1 million of expected synergies with Ikom ** Leverage data points are expressed pre refinancing and issuance of the new notes with total face value Q1 2017 H1 2017 of € 1.35 billion 7 Gross leverage Net leverage

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 1,057  Increase of 20% caused by organic network expansion and acquisition of 20% Ikom with 143.5k homes passed 884 Telemach Slovenia  Organic increase against H1 2016, with 3.5k additional homes passed Telemach BH  Increase of 4% due to organic +1% +4% network expansion 318 307 309 305 Telemach MNE  Increase of 33% caused by organic network expansion and acquisition of +33% M-Kabl 60 45 H1 2016 H1 2017 H1 2016 H1 2017 H1 2016 H1 2017 H1 2016 H1 2017 SBB Serbia Telemach Slovenia Telemach BH Telemach MNE 9