United Group BO H1 2018 financial results presentation 29 August - PowerPoint PPT Presentation

United Group BO H1 2018 financial results presentation 29 August 2018

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 2018. The statement of financial position for Adria Midco B.V. and its subsidiaries as at 30 June 2018 and as at 30 June 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 six months periods then ended have been prepared in accordance with IFRS, however have not been reviewed by our independent auditors. 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 * Europe’s  South-East leading multi-play Issuer United Group B.V. telecommunications and media provider Listed International Stock Exchange (Channel Islands) 3.67 million cable and satellite TV, broadband, fixed-line  and mobile RGUs across five 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 Coupon Three-month EURIBOR plus 4.375% and 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 KKR, EBRD and the management * On June 30, 2017, we had in place a € 775 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 ** In January 2018 the group sold Totalna Televizija in Croatia, however it is still present redemption costs). In addition, all outstanding borrowings under the RCF dated November 5, 2013 and the PIK in the country through its United Media subgroup facility agreement dated July 3, 2014 were paid 4

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

H1 2018: operational highlights  RGUs (k) Healthy year-on-year RGU growth across all 3,671 services +8% – Driven predominantly by organic subscriber growth, increased multi-play subscribers and acquisitions 3,413 – Serbia: Kabel Group 85 (RGUs: +4k) – Slovenia: Teleing (RGUs: +31k)  Homes passed up by 4% to 1,809k YoY due to – Expansion of and investment in our network H1 2017* H1 2018 – Acquisitions in Serbia and Slovenia  Blended cable ARPU up by 7% to € 22.0 YoY as a result of Blended cable ARPU (€) – Successful execution of our strategy aimed at 22.0 selling more services to our cable subscribers 20.4 – Increased revenue from cable network-based +7% services – Migration from lower-priced to higher-priced service packages – Price increases in Serbia, Slovenia and Bosnia and Herzegovina H1 2017* H1 2018 * 2017 restated – B2B subscribers reclassified from Other services RGU to Services RGU 6

H1 2018: financial highlights Revenues (€ m) 285.4 249.3  Revenues up 14% YoY to € 285.4 million as a result of +14%  Organic growth and acquisitions  Growing number of RGUs  Price increases H1 2017 H1 2018  Adjusted EBITDA up 16% YoY to € 126.7 million Adjusted EBITDA (€ m)  Driven by our focus on profitable growth 126.7 +16%  Like-for-like margin improvements in both cable and mobile 108.8 businesses  Net leverage* down to 4.79x from 5.15x  Gross leverage** down compared to Q1 2018 level in spite of cash outflow related to Notes interest payment in April H1 2017 H1 2018 * Annualized Adjusted Pro Forma EBITDA is calculated as two times (Q1 2018 + Q2 2018) Consolidated Leverage Adjusted EBITDA plus € 1.0 million of additional synergy effects ** Gross indebtedness was reduced by € 200 million, which is the amount deposited on a special account 5.29x for the acquisition of CME assets in Slovenia and Croatia. The adjustment was made as CME EBITDA is not 5.15x included in the Group EBITDA which is used in the leverage calculation 4.89x 4.79x Q1 2018 H1 2018 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 SBB Serbia  Increase of 10.1k HP driven by organic network expansion Telemach Slovenia  Additional 25.3k homes passed due to both organic growth and acquisition of Teleing (+19k) Telemach BH  Increase of 4% due to organic network expansion Telemach MNE  Increase of 29% driven by organic network expansion 9

Increasing subscribers and RGUs Key developments RGUs vs. Unique cable subscribers  Increasing cable subscribers as a Our 1,144k unique cable subscribers order on average between 2.0x result of organic network growth and and 2.7x different services acquisitions Kabel Group 85 +4k – Teleing +13.5k – Unique cable subs (k) RGUs (k) 3,671  Faster growth in RGUs per unique 1,144 1,098 cable subscriber driving overall +4% +8% performance SBB Serbia, Telemach BH & 3,413 Telemach MNE  Cross-selling of multi-play offers to 1- Play subscribers in all three entities RGU per subscriber growth in Serbia to  H1 2017* H1 2018 H1 2017* H1 2018 2.1x and Bosnia to 2.2x, and in Montenegro to 2.0x Telemach Slovenia RGUs vs. Unique cable subscribers H1 2017* H1 2018 Cross-selling of 3-Play offers to 1-Play  SBB Serbia 2.0x 2.1x subscribers Telemach Slovenia 2.7x 2.7x Telemach BH 2.0x 2.2x – Mobile offering supporting take up of multi-play packages Telemach MNE 1.7x 2.0x  Upgrading existing customers to premium products * 2017 restated – B2B subscribers reclassified from Other services RGU to Services RGU 10