Altice SA — Q2 2017 Earnings Presentation
32 slides from Altice SA's earnings presentation, Jul 28, 2017
Slide 1: Q2 2017 Results
Q2 2017 Results 28 July 2017
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, all statements other than statements of hi
Slide 3: Group Highlights
Group Highlights 3 Q2 2017 Results
Slide 4: Q2 2017 Key Takeaways
Q2 2017 Key Takeaways Continued strong execution on efficiencies, investment and M&A strategy 1 Altice Group: continued revenue growth and margin expansion; 2017 guidance reiterated 2 Altice Labs & Altice Technical Services: fastest deployment of state-of-the-art FTTH technology in Europe / US 3 Alt
Slide 5: Q2 2017 Altice Group Financial Profile
Q2 2017 Altice Group Financial Profile Continued revenue growth and efficiencies Q2-161 Q2-171 +2.7%2 Revenue Growth Reported -2.7% 40.4% Adjusted EBITDA Margin 38.8% 22.4% OpFCF Margin3 19.8% 1. Financials shown in this presentation are pro forma defined here as results of the Altice N.V. Group as
Slide 6: Continued Strong Group Performance
Continued Strong Group Performance All Altice major markets again contributing to revenue improvement Revenue YoY (%) Q2-16 Q2-17 -0.4% -4.4% +3.2% +2.2% +0.1% -3.0% +3.8% +1.5% Note: Segments presented on a standalone reporting basis and in local currency. SFR shown including media assets; “Optim
Slide 7: Fastest FTTH Rollout Planned in Europe / U.S.
Fastest FTTH Rollout Planned in Europe / U.S. Global fiber deployments across Altice Group Targeting run-rate of c.4-5 million fiber (FTTH) homes passed p.a. Nationwide FTTB / FTTH rollout Altice Labs: Global R&D center Pre-Altice End-2017 2025 FTTB / FTTH Pioneering fiber GPON technology 2006 targe
Slide 8: Media Strategy To Drive Growth
Altice Media Strategy To Drive Growth Investment in sport, news, cinema and series driving differentiation and advertising growth Content investment & Original creations Advertising & Data Analytics Altice Channel Factory Sport Europe Free-to-air (FTA) H1-17 YoY Revenue Growth 1-5 UEFA in 2018: News
Slide 9: Sales Channels Digitalization: Example of Efficiencies
Altice Sales Channels Digitalization: Example of Efficiencies Improving customer service and achieving sales & marketing efficiencies through digitalization 28.1% 41.6% 26.7% 25.1% 25.8% 21.1% 35.7% 34.9% 17.8% 15.7% 14.4% 27.9% 27.9% 27.2% 6.0% 6.1% 5.8% 4.3% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q1-
Slide 10: Benefits of Our Global Communications Group
Benefits of Our Global Communications Group Coherent global strategy with significant scale advantages Countries of presence Management expertise / best practice ▬ Altice Way Technology ▬ Home entertainment hub ▬ User interface ▬ Fiber ▬ Data analytics USA France Scale ▬ Altice Technical Servi
Slide 11: Business Review
Business Review 11 Q2 2017 Results
Slide 12: France Turnaround Since SFR Acquisition
Altice France Turnaround Since SFR Acquisition Revenue stabilization, mobile base return to growth, broadband base stabilizing Revenue YoY (%) 1 B2C mobile postpaid net adds YoY Broadband net adds YoY ('000) ('000) 34 (0.2%)2 (0.4%) (16) (224) (3.5%) (400) FY-15 Q2-17 FY-15 Q2-17 FY-15 Q2-17 Exclu
Slide 13: France Infrastructure Investments Paying-Off
Altice France Infrastructure Investments Paying-Off Accelerated investments in SFR’s 4G / 4G+ mobile and fiber networks Capital expenditures 4G coverage of the population1 Fiber homes passed (€bn) (%) 92% (m) N°1 2.4 91% 88% 10.0 1.9 70% 80% 69% 5.9 33% 30% 2014 Last Twelve Months Q2-14 Q4-14 Q2-15
Slide 14: France Nationwide Fiber Roll-out Plan
Altice France Nationwide Fiber Roll-out Plan Ambitious plan supported by Altice Infrastructure to support fixed business returning to growth Fiber homes passed (% of population covered) 100% Today: 10 millions fiber homes passed + c.2 to 3 million 2022: 80% territory coverage additional plugs ev
Slide 15: France B2C Mobile Business
Altice France B2C Mobile Business Sustained return to growth following significant investment and quality of service improvement B2C mobile postpaid net adds B2C mobile service revenue growth ('000) (%) 1.7% 1.5% 1.7% 68 34 33 (2.0%) (73) (6.3%) (199) Postpaid ARPU (€/Month) 25.0 26.1 25.8 25.5 25.2
Slide 16: France B2C Fixed Line Business
Altice France B2C Fixed Line Business Focus on churn reduction, network expansion and content investment Fiber vs. DSL net adds 1 DSL trends continue to improve 44 44 54 45 Fiber ('000) 35 – Churn reduction Total net adds (58) (75) (61) (35) (16) (Fiber + DSL) – Successful new pricing strategy F
Slide 17: Portugal Turnaround Since MEO Acquisition
Altice Portugal Turnaround Since MEO Acquisition Revenue stabilization and accelerated investments in MEO’s fiber network Revenue YoY (%) Capital expenditures Fiber homes passed B2C fiber net adds B2C mobile net adds (%) (€m) (m) (k) (k) 0.1% 168 454 3.5 33 331 2.0 20 (7.3%) (128) FY-15 Q2-17 FY-1
Slide 18: USA Business Dynamics
Altice USA Business Dynamics Accelerated revenue growth since Altice control Revenue YoY (%) 1 + Sustained revenue growth above levels before Altice took control Demand for higher broadband speed tiers 3.6% 3.2% + Further improved margins and cash flow 2.4% + Further improved customer service me
Slide 19: USA B2C Fixed Line Business
Altice USA B2C Fixed Line Business Continued positive customer and ARPU trends B2C customer relationships B2C customer relationships ('000) ('000) +0.2% +1.2% 2,882 2,879 2,887 2,889 1,661 2,873 1,649 1,648 1,628 1,636 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 ARPU ($) Per unique c
Slide 20: USA B2C Broadband Speeds
Altice USA B2C Broadband Speeds Focus on high speed broadband growth; Suddenlink was rated fastest ISP in US for 20173 % of customers ≥ 100 Mbps broadband speeds 1,2 42 52 93 Suddenlink Acquisition 79% Optimum Acquisition 66% 61% 48% 30% 22% 39% 15% 5% 9% 26% 21% 16% 9% 10% 12% 5% 6% Q2-15 Q3-15 Q4-
Slide 21: USA Margin Progression
Altice USA Margin Progression Substantially improved margins and cash flow Altice USA1 Adj. EBITDA margin 42.7% 38.3% 40.3% 40.8% Improved margins 36.1% 32.6% 32.1% 33.5% 31.0% 26.4% 32.9% Dynamic organization 16.6% 14.8% 16.6% 24.0% 28.7% 33.8% 23.3% More optimization potential 16.0% 16.2% 15
Slide 22: Financial Review
Financial Review 22 Q2 2017 Results
Slide 23: Altice N.V. Pro forma consolidated financials
Altice N.V. Pro forma consolidated financials 1 YoY Reported YoY Constant €m Q2-16 Q2-17 Growth Currency Growth France (SFR) 2,773 2,763 (0.4%) (0.4%) Altice USA 1,997 2,112 5.8% 3.2% Portugal 575 576 0.1% 0.1% Israel 235 266 13.2% 3.8% Revenue Dominican Republic 174 176 1.2% 1.8% French Overseas Te
Slide 24: Overview of Altice Group Debt Pro-Forma
Overview of Altice Group DEBT Pro-Forma (5) Diversified silos Altice Europe Altice Group Target Leverage Available Liquidity (Consolidated) (Consolidated) Gross Debt 30,211 50,580 Altice Europe: c. 4.0x Altice Group 1: €4.9 bn Altice US: c. 5.0-5.5x Net Debt7 29,575 49,226 LTM Adj. EBITDA 3 5,
Slide 25: USA Leverage Evolution
Altice USA Leverage Evolution Rapid de-leveraging to within target range Net debt / L2QA Adj. EBITDA 1 7.0x 7.1x 5.6x 2 Target 5.8x 5.3x 2 5.3x 2 2 5.3x 5.0x 5.0 – 5.5x 5.0x 5.0x 4.7x Q2-15 Q2-16 Q2-17 Q2-17 Suddenlink Optimum Suddenlink leverage Optimum leverage Excl. Dividends 3 1. Net debt and Ad
Slide 26: Overview of Altice Group Maturity Profile
Overview of Altice Group Maturity Profile1 Retain long-dated maturities following pro-active refinancing activity Altice maturity profile (€m) 1,173 1,659 558 1,695 4,101 9,839 5,213 3,125 13,808 7,905 1,148 Debt maturity summary: Altice Group WAL life of 6.3 years (including RCF drawn and CP issued
Slide 27: Q&A
27 Q&A Q2 2017 Results altice
Slide 28: Appendix
28 Appendix Q2 2017 Results altice
Slide 29: Altice USA, Inc. Numbers
Altice USA, Inc. Numbers Pro forma USD financials1 YoY constant $m Q2-16 Q2-17 currency growth Revenue 2,257 2,328 3.2% YoY growth (%) 2.2% 3.2% Adjusted EBITDA 816 994 21.9% Margin (%) 36.1% 42.7% Capital expenditures 274 228 (16.6%) Capex to sales (%) 12.1% 9.8% 1. “Optimum” financials exclude New
Slide 30: Altice N.V. Pro forma consolidated revenue
Altice N.V. Pro forma consolidated revenue 1 YoY reported YoY constant €m Q2-16 Q2-17 growth currency growth France 2,773 2,763 (0.4%) (0.4%) US (Optimum) 1,431 1,510 5.5% 2.9% US (Suddenlink) 566 602 6.4% 3.8% Portugal 575 576 0.1% 0.1% Israel 235 266 13.2% 3.8% Dominican Republic 174 176 1.2% 1.8%
Slide 31: Altice N.V. Pro Forma consolidated Adj. EBITDA
Altice N.V. (cont’d) Pro Forma consolidated Adj. EBITDA YoY reported YoY constant €m Q2-16 Q2-17 growth currency growth France 999 953 (4.6%) (4.6%) Margin (%) 36.0% 34.5% US (Optimum) 470 622 32.4% 29.1% Margin (%) 32.8% 41.2% US (Suddenlink) 258 290 12.4% 9.6% Margin (%) 45.6% 48.2% Portugal 279 2
Slide 32: Altice N.V. Pro forma consolidated capex
Altice N.V. (cont’d) Pro forma consolidated capex Q2-17 €m Q2-16 Q2-17 % capex to sales France 572 643 23.3% US (Optimum) 174 143 9.5% US (Suddenlink) 72 69 11.4% Portugal 90 111 19.2% Israel 112 65 24.3% Dominican Republic 34 29 16.5% French Overseas Territories 14 9 17.6% Others and eliminations 1