Slide 1: TPG Telecom & Vodafone Hutchison Australia: Merger of equals
TPG Telecom & Vodafone Hutchison Australia Merger of equals 30 August 2018
Slide 2: Recommended merger of equals of TPG Telecom and Vodafone Hutchison Australia
1) Transaction overview Recommended merger of equals of TPG Telecom and Vodafone Hutchison Australia TPG and VHA have agreed to a merger of equals to create Australia’s leading challenger full-service telecommunications provider TPG Telecom (“TPG”) and Vodafone Hutchison Australia (“VHA”) have agr
Slide 3: Summary of other key merger terms
1) Transaction overview Summary of other key merger terms TPG and VHA have entered into a Scheme Implementation Deed to effect the merger Merged Group Board and management TPG Board and shareholder support Key approvals and transaction timing Merged Group will be led by an experienced TPG’s Boar
Slide 4: Side-by-side comparison
1) Transaction overview Side-by-side comparison Merger will deliver increased scale to support future growth, and an enhanced ability to invest and innovate in a highly competitive telco market Merged Group pro forma enterprise value of approximately $15.0bn(1) Combined PF June 2018 revenue of $
Slide 5: Compelling strategic rationale
1) Transaction overview Compelling strategic rationale 1 Creating Australia’s leading challenger telecommunications operator Significant scale across Australia, with complementary fixed line and mobile networks to create a stronger challenger to Telstra and Optus Well positioned to capitalise on
Slide 6: Stronger and more diversified operations
2) Overview of the Merged Group Stronger and more diversified operations The Merged Group will have an enhanced network with highly complementary assets and a more diverse earnings base across fixed broadband and mobile TPG PF June 2018 VHA PF June 2018 Highly complementary owned network infrastruct
Slide 7: Merged group will be a stronger challenger to Telstra and Optus
3) Strategic rationale Merged group will be a stronger challenger to Telstra and Optus Merged Group will be a more effective competitor to challenge the major network operators by integrating fixed line and mobile businesses Major network Mobile virtual operators network operators With an enterpri
Slide 8: Highly complementary owned network infrastructure
3) Strategic rationale Highly complementary owned network infrastructure Combines innovative services including complementary fibre, 4G and Wi-Fi networks and allows the Merged Group to be well positioned to capitalise on 5G Vertical integration of highly complementary infrastructure assets across
Slide 9: Complementary products and distribution channels
3) Strategic rationale Complementary products and distribution channels Merged Group will provide a comprehensive telco product offering, catering to all customers, with access to TPG’s corporate distribution channels and VHA’s consumer retail presence Merged Group is expected to significantly enhan
Slide 10: Significant synergy potential
3) Strategic rationale Significant synergy potential Merger is expected to achieve significant synergies Both TPG and VHA have proven track records in delivering synergies and transformation Key synergy categories Leveraging the Highly complementary telecommunications network infrastructure provid
Slide 11: Increased financial scale and balance sheet strength
3) Strategic rationale Increased financial scale and balance sheet strength Strengthened combined balance sheet with ~2.2x Net Debt / EBITDA, strong cash flow generation and a combined enterprise value of $15.0bn Combined revenue of $6.0bn and EBITDA of over $1.8bn on a pro forma June 2018 LTM bas
Slide 12: Benefits for all shareholders
4) Summary of Merger benefits Benefits for all shareholders Merger of equals is expected to deliver significant benefits for all shareholders Exposure to an enhanced combined business profile with more diversified operations across fixed line, NBN and mobile ✔ Improved ability to invest in Australia
Slide 13: Spectrum Joint Venture
5) 3.6 GHz Spectrum Auction Spectrum Joint Venture TPG and VHA have formed a Joint Venture to secure spectrum and maximise its efficient use Joint Venture Agreement Scope Purpose In parallel to the merger agreement, TPG The Government is auctioning To secure long term spectrum for TPG and and VH
Slide 14: Potential TPG Cash Special Dividend
6) Cash Special Dividend Potential TPG Cash Special Dividend The Board of TPG intends to distribute a fully franked Cash Special Dividend to TPG shareholders prior to implementation of the Merger to the extent that TPG’s Net Debt balance is below the target Net Debt of $2,024m(1) ahead of implementa
Slide 15: Singapore mobile business to be separated
7) Singapore Separation Singapore mobile business to be separated Before implementation of the Merger, the Board of TPG Telecom also intends to separate its Singapore mobile business (“SingaporeCo”) by way of an in-specie distribution of shares to existing TPG Shareholders Singapore mobile business
Slide 16: TPG preliminary FY18 results
8) TPG trading performance TPG preliminary FY18 results TPG expects to report FY18 revenue of ~$2,490m and EBITDA of ~$840m, ahead of previous guidance, based on preliminary unaudited accounts to July 2018 FY18 preliminary results(1) Revenue ~$2,490m EBITDA ~$840m Net Debt balance(2) $1,266m Notes:
Slide 17: A Vodafone Hutchison Australia
APPENDIX A Vodafone Hutchison Australia
Slide 18: Overview of Vodafone Hutchison Australia
Appendix Overview of Vodafone Hutchison Australia VHA is Australia’s 3rd largest mobile network operator with 6 million customers and a 4G mobile network covering 22 million Australians 3rd largest Australian mobile network operator — Mobile customer base of approximately 6 million — 4G mobile net
Slide 19: Vodafone Hutchison Australia's key metrics
Appendix Vodafone Hutchison Australia’s key metrics In recent years, VHA has seen continued sustainable growth across its customer base, growth in EBITDA and has become Australia’s leading major MNO by NPS Continued growth in mobile network customers Sustained EBITDA growth Total network customers (
Slide 20: Glossary of key terms
Glossary of key terms Term Definition ACCC Australian Competition and Consumer Commission Capex Capital expenditure The potential cash special dividend by TPG, to the extent that TPG’s actual debt balance is below the agreed target Net Debt Cash Special Dividend balance ahead of implementation of th
Slide 21: Important notice and disclaimer
Important notice and disclaimer This presentation (Presentation) provides information in summary form and should be read in conjunction with the announcement in relation to the proposed merger of equals transaction between TPG Telecom Limited (TPG) and Vodafone Hutchison Australia Pty Limited (VHA)