Tpg Telecom Limited · ASX:TPG
Tpg Telecom — Merger or Acquisition (April 2017)
31 slides from Tpg Telecom's merger presentation, Apr 12, 2017
Slide 1: 700MHz Spectrum Auction Success and Entitlement Offer
For personal use only 700MHz SPECTRUM AUCTION SUCCESS AND ENTITLEMENT OFFER 12 APRIL 2017
Slide 2: Important notice and disclaimer
Important notice and disclaimer This investor presentation (Presentation) has been prepared by TPG Telecom Limited (ACN 093 Investment risk For personal use only 058 069) (TPG) in relation to an accelerated non-renounceable entitlement offer of new fully paid An investment in the New Shares in TPG i
Slide 3: Important notice and disclaimer
Important notice and disclaimer Future performance names and makes no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of this Presentation or the Offer. For personal use only This Presentation contains certain "forward-looking statements". Th
Slide 4: Introduction
For personal use only 01 Introduction Chief Financial Officer – Stephen Banfield 4 STRICTLY CONFIDENTIAL
Slide 5: Introduction
Introduction TPG is the successful bidder for 2x10MHz of spectrum in the 700MHz spectrum auction, and is raising $400 million to support its mobile strategy For personal use only – TPG is delighted to advise that it successfully bid for 2x10MHz of spectrum in the 700MHz band at the recent auction co
Slide 6: Corporate timeline
Corporate timeline TPG has a track record of successfully executing transformational changes to grow its business to maximise long term profitability For personal use only 1986: Founded 2014: Launch of Fibre- 2015: Vodafone Dark 2016-17: Singapore 2017: Mobile in Sydney, AUS to-the-Building product
Slide 7: TPG's Mobile Strategy
For personal use only TPG’s Mobile Strategy 02 Executive Chairman and Chief Executive Officer – David Teoh 7 STRICTLY CONFIDENTIAL
Slide 8: TPG's Mobile Strategy
TPG’s Mobile Strategy TPG has long recognised the importance of wireless connectivity to the future needs of Australian telecommunications consumers and believes its unique combination of existing For personal use only infrastructure, brands, customer base and experience positions the Group to be a
Slide 9: TPG's Mobile Strategy (cont.)
TPG’s Mobile Strategy (cont.) TPG’s portfolio of assets and experience, including its extensive carrier grade fixed network of owned infrastructure, will be heavily relied upon, resulting in the avoidance of significant capex For personal use only usually associated with a rollout, as well as opex s
Slide 10: TPG's Mobile Strategy (cont.)
TPG’s Mobile Strategy (cont.) TPG believes it is at a considerable competitive advantage relative to the incumbent operators For personal use only Key new entrant advantages Latest, more efficient Fewer sites required No legacy mobile networks No existing customer 21,000+ KM technology revenue to of
Slide 11: Executive Chairman quote on fibre network and mobile
For personal use only 01 A “ Insert divider title Insert divider title We are also delighted to now3 have the ability to maximise for our shareholders7 the value of the infrastructure that has been built with their investment over many years. That is because the same fibre network infrastructure tha
Slide 12: TPG's Mobile Strategy (cont.)
TPG’s Mobile Strategy (cont.) TPG’s mobile network rollout to occur incrementally over 2-3 years, with trials in selected areas being targeted for 2018 For personal use only Rollout plan Efficient deployment strategy – TPG expects to deploy equipment at approximately – Efficiencies driven by the fac
Slide 13: TPG's Mobile Strategy (cont.)
TPG’s Mobile Strategy (cont.) TPG is well prepared to deliver its planned mobile network in a cost and time efficient manner, leveraging components from its existing operations to achieve this For personal use only Key elements and status update Core network & Call centres and Fibre Multi-brand inte
Slide 14: MHz and the Auction
700 MHz and the Auction Beachfront Quality Spectrum in different bands has different benefits, 700 MHz spectrum is considered the premium spectrum currently in use For personal use only for mobile networks. – Excellent propagation, meaning fewer sites need to be deployed to cover larger distances. –
Slide 15: TPG's Mobile Strategy
TPG’s Mobile Strategy The opportunity is significant. TPG is confident and excited about the opportunity to enter the large and growing mobile market in Australia. For personal use only – There are at least 32.6 million mobile services in Australia,1 representing a 2.6% increase in 2016 over 2015 –
Slide 16: Financial Impact
For personal use only Financial Impact 3 Chief Financial Officer – Stephen Banfield 16 STRICTLY CONFIDENTIAL
Slide 17: Financial impact
Financial impact Capex of ~$1.9 billion for a fully operational Australian mobile network, comprising: For personal use only 1 Rollout capital expenditure of $600 million starting in 2018 TPG expects to deploy equipment at approximately 2,000 to 2,500 sites plus small cell sites across the country.
Slide 18: Financial impact
Financial impact TPG mobile strategy expected to be NPV accretive For personal use only – The addition of the mobile strategy, including spectrum acquisition and rollout cost, is expected to be NPV accretive – The Offer and spectrum acquisition have no impact on underlying FY17 EBITDA – TPG intends
Slide 19: Guidance
Guidance TPG reaffirms its FY17 guidance, which will not be impacted by the spectrum acquisition or the equity raising For personal use only FY17 Guidance A$m Underlying EBITDA Guidance 820 - 830 Australia Capital Expenditure 370 - 420 Singapore Capital Expenditure* 142 - 182 *Singapore Capital Expe
Slide 20: Equity Raising
For personal use only 04 Equity Raising 20 STRICTLY CONFIDENTIAL
Slide 21: Overview of funding
Overview of funding Spectrum purchase and network build expected to be funded through a combination of debt facilities, and operating cash flow For personal use only The immediate use of the Entitlement Offer proceeds will be to pay down debt, which will then be drawn as needed for capex and spectru
Slide 22: Capital raising: Key terms
Capital raising For personal use only Key terms Offer size and – 1 for 11.13 accelerated non-renounceable pro-rata entitlement offer to raise $400 million (the Entitlement structure Offer), consisting of: – an accelerated institutional component to be conducted from Wednesday, 12 April 2017 to Thurs
Slide 23: Capital raising: Timetable
Capital raising For personal use only Timetable Entitlement Offer announcement Wednesday, 12 April 2017 Institutional Entitlement Offer conducted Trading in TPG shares resumes on an ex-entitlement and ex-dividend basis Tuesday, 18 April 2017 Record date for determining entitlements for the Entitleme
Slide 24: Key risks
For personal use only 05 Key risks 24 STRICTLY CONFIDENTIAL
Slide 25: Key risks
Key risks Competitive environment and impact of the National technology for the delivery of the various services made a significant amount of customer, employee and third Broadband Network (“NBN”) available to customers and TPG has invested significantly party information, including through its data
Slide 26: Key risks
Key risks Risk of litigation, claims and disputes syndicate, if TPG is unable to raise such additional debt TPG’s mobile business will also operate in a competitive TPG may be subject to litigation and other claims and this may have a material adverse effect on the business, landscape alongside vari
Slide 27: Key risks
Key risks Bandwidth requirement the level of economic activity and inflation, interest rates, be underwritten by Macquarie Capital (Australia) Limited If there is excess customer demand for bandwidth exchange rates, government policy (including fiscal, (Underwriter), meaning that the Underwriter wil
Slide 28: Foreign selling jurisdictions
For personal use only 06 Foreign selling jurisdictions 28 STRICTLY CONFIDENTIAL
Slide 29: Foreign selling jurisdictions
Foreign selling jurisdictions International Offer Restrictions Board. Unless stated otherwise, all dollar amounts contained in transaction that gave rise to the cause of action. These rights are this document are in Australian dollars. in addition to and not in derogation from any other right the Th
Slide 30: Foreign selling jurisdictions
Foreign selling jurisdictions Hong Kong Regulations and the various resolutions and announcements The New Shares may not be offered or sold, directly or indirectly, issued pursuant thereto have been given in relation to the in Norway except to "professional clients" (as defined in Norwegian WARNING:
Slide 31: Foreign selling jurisdictions
Foreign selling jurisdictions Sweden services may be consummated within the United Arab Emirates. This document does not constitute and may not be used for the This document has not been, and will not be, registered with or purpose of an offer or invitation. No services relating to the New approved