United Group BO Q1 2017 financial results presentation 30 May 2017 - PowerPoint PPT Presentation

United Group BO Q1 2017 financial results presentation 30 May 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 three months ended March 31, 2017. The statement of financial position for Adria Midco B.V. and its subsidiaries as at 31 March 2017 and as at 31 March 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 three 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 South-East Europe’s leading provider of pay-TV and broadband  2020 Senior Notes services, with a strong presence in mobile telephony following the Issuer United Group B.V. Tušmobil acquisition Listed GEM, Irish Stock Exchange 3.21 million cable and satellite TV, broadband, fixed-line and mobile  RGUs across the six countries of former Yugoslavia Governing Law State of New York  Operating in a market characterized by growing pay-TV and € 775 million Outstanding notes broadband that is currently underpenetrated relative to other CEE Coupon 7.875% and Western European markets Maturity 15 November 2020 Broad reach via cable and direct-to-home platforms across the  region, and ethnically targeted over-the-top content platforms Coupon dates 15 November & 15 May internationally  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 Appendices 5

Q1 2017: operational highlights RGUs by service (k)  Healthy year-on-year RGU growth across all 973 services 922 – Driven predominantly by increased multi-play 637 subscribers and the acquisition of M-Kabl in 566 498 Montenegro 453 475 414 364 343 +5% +5% +7% +13% +4%  Homes passed up by 6% to 1,582k YoY due to +24% +21% 119 112 117 – Expansion of and investment in our network 110 – Acquisition in Montenegro Cable pay- DTH pay- OTT Broadband Fixed -line Mobile Other TV TV internet telephony services services  Blended cable ARPU up by 6% to € 20.0 YoY as a Q1 2016 Q1 2017 result of Blended cable ARPU ( € ) Homes passed (k) – Successful execution of our strategy aimed at selling more services to our cable subscribers 1,582 20.0 – 1,499 19.0 Increased revenue from cable network-based +6% +6% services – Migration from lower-priced to higher-priced service packages – Price increases in Serbia, Slovenia and Bosnia and Herzegovina Q1 2016 Q1 2017 Q1 2016 Q1 2017 6

Q1 2017: financial highlights Revenues ( € m)  Revenues up 11% YoY to € 121.4million as a result of 121.4 109.3 +11%  Organic growth and acquisitions  Growing number of RGUs  Price increases Q1 2016 Q1 2017  Adjusted EBITDA up 15% YoY to € 53.3 million Adjusted EBITDA ( € m) 53.3  EBITDA growth ahead of revenue growth due to our focus on 46.5 15% profitable growth  Like-for-like margin improvements in both cable and mobile businesses  Net leverage* down to 3.96x from 4.27x Q1 2016 Q1 2017  Both, Gross and Net leverage down compared to FY 2016 level; Leverage leverage decrease due to Adjusted EBITDA growth 4.34x 4.28x 4.27x  Gross leverage includes funds drawn for Ikom acquisition, which was closed on April 20th 2017 3.96x * Annualized Last Two Quarter Adjusted Pro Forma EBITDA is calculated as two times the amount of Consolidated Adjusted Pro Forma L2Q EBITDA FY 2016 Q1 2017 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 909  Increase of 7% caused by organic network expansion 846 7% Telemach Slovenia  Organic increase against Q1 2016, with 3.5k additional homes passed Telemach BH  Increase of 4% due to organic network expansion +1% +4% 315 308 303 Telemach MNE 305  Increase of 11% caused by acquisition of M-Kabl and network expansion +11% 50 45 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 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 973k unique cable subscribers order on average between 1.6x and result of organic network growth and 2.6x different services acquisitions  Faster growth in RGUs per unique Unique cable subs (k) RGUs (k) cable subscriber driving overall 3,210 performance 973 922 SBB Serbia & Telemach BH +5% +11%  Start of cross-selling of multi-play offers to 1-Play subscribers in both 2,893 entities RGU per subscriber growth in Serbia  and in Bosnia, both to 2.0x Q1 2016 Q1 2017 Q1 2016 Q1 2017 Telemach Slovenia  Cross-selling of 3-Play offers to 1-Play subscribers RGUs vs. Unique cable subscribers Q1 2016 Q1 2017 – Mobile offering to accelerate take SBB Serbia 1.9x 2.0x up of multi-play packages Telemach Slovenia 2.6x 2.6x Upgrading existing customers to  Telemach BH 1.9x 2.0x premium products Telemach MNE - 1.6x 10

Increasing RGUs Key developments RGUs by service  Healthy YoY RGU growth across all RGUs by service (k) services 973 922  Cable pay TV growth due to organic growth and M-Kabl acquisition 637 DTH pay-TV RGUs increased by 5%  566 498 compared to Q1 2016 due to 453 475 additional subscribers and lower churn 414 364 rate 343 +5% +5% +7% +13% +4% +24% +21% OTT RGUs increased by 7% driven by  119 117 112 110 organic growth Cable pay-TV DTH pay-TV OTT Broadband Fixed -line Mobile Other  Fixed line telephony RGUs up 24% internet telephony services services YoY due to continued growth of this service at SBB and Telemach Bosnia Q1 2016 Q1 2017 Mobile services up 21% due to  additional organic growth at Telemach Slovenia with around 34% share of gross adds in the market  Other service RGUs increased by 4% mostly due to organic growth of B2B subscribers 11