Telia Company Ab · OMXSTO:TELIA
Telia Company Ab — Merger or Acquisition (July 2018)
20 slides from Telia Company Ab's merger presentation, Jul 20, 2018
Slide 1: Pioneers in bringing true convergence to Nordic customers
PIONEERS IN BRINGING TRUE CONVERGENCE TO NORDIC CUSTOMERS 20 July, 2018
Slide 2: Transaction Summary
TRANSACTION SUMMARY STRATEGIC • By combining Bonnier Broadcasting’s competence and portfolio within domestic content and Telia’s award winning TV service and RATIONAL first class network we create a unique converged player in the Nordic region • SEK 9.2 billion on a cash and debt free basis with a a
Slide 3: Redefining the industry on customers' terms
REDEFINING THE INDUSTRY ON CUSTOMERS’ TERMS 1 • Telia Company leading the way in convergence and fulfilling customer demand CONVERGENCE BELIEVERS • With around 7.5 million B2C customers in Sweden and Finland we know what customers want and we can deliver AND CUSTOMER CHAMPIONS • Leverage brand and c
Slide 4: Value from owning content
VALUE FROM OWNING CONTENT SECURE KEY CONTENT, NOW AND FOR THE FUTURE ENHANCE CUSTOMER BE PART OF THE RESHAPING EXPERIENCE WITH DATA MONETIZE ON VIDEO MEDIA VALUE CHAIN ON OUR ANALYTICS INTO UNIQUE ACROSS THE ENTIRE TERMS OFFERINGS MARKET, NOT JUST OUR CUSTOMERS 4
Slide 5: Bonnier Broadcasting at a glance
BONNIER BROADCASTING AT A GLANCE COMPANY DESCRIPTION TOP FORMATS Number 1 commercial broadcaster in Sweden - CSOV*: 38% 2017** - Wide range of attractive quality content with key strength in domestic series, entertainment and news - Main brands: TV4, Sjuan and TV12 - TV4 Play: More registered users
Slide 6: Telia – a leading TV distributor
TELIA – A LEADING TV DISTRIBUTOR MOST SATISFIED TV CUSTOMERS GROWING TV CUSTOMER STOCK 2 000 1 800 1 600 1 400 1 200 (‘000) 1 000 800 600 400 200 0 • 1.8 million TV customers Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 TV customers • 100 channels • 1 app 6
Slide 7: TV4 in more detail
TV4 IN MORE DETAIL MOST ATTRACTIVE CONTENT TOTAL TV POLE POSITION COST CONTROL & LEVERAGE The most popular 20 1200 commercial TV shows Good track record of Revenues 15 5 +5.5% No of viewers (‘000) 1000 are all at TV4* growing ad revenues 10 SEK in billions 800 5 4 600 0 400 -5 3 200 -10 -15 TV4 ad r
Slide 8: C More in more detail
C MORE IN MORE DETAIL NEW STRATEGY SUCCESSFUL SVOD OUTPACES PAY TV MATERILIAZING ON REVENUES 2.0 Revenues Subscriptions 16% SEK in billions CAGR 2015-18 (%) 1.5 New strategy implemented 1.0 1% 0.5 SVOD market Pay TV market 2015 2016 2017 R12 Q1 2013 2014 2015 2016 2017 Q1 2018 2018 Source: MediaVisi
Slide 9: MTV in more detail
MTV IN MORE DETAIL TOUGHER AD MARKET SVOD GAINING MOMENTUM STRONGER TOGETHER 38% CAGR 2015-18 (%) 12% TEAM PASS LIIGA PASS GAME PASS CAGR 2015-18 (%) 1% SVOD market Pay TV market -2% AVOD ad market Linear TV ad market Source: MediaVision, Ficora Source: MediaVision, Ficora • Ad market lagging Sweden
Slide 10: Financial overview - Bonnier Broadcasting
FINANCIAL OVERVIEW - BONNIER BROADCASTING FINANCIAL OVERVIEW FINANCIAL BREAKDOWN OPERATIONAL CASH FLOW SEK in billions SEK in billions SEK in billions 7.5 7.4 7.4 2016 2017 2018 R12 Q1 0.3 0.3 NET SALES 7.4 7.4 7.5 - TV4 4.2 4.4 4.4 - C MORE 1.5 1.6 1.6 0.6 - MTV 1.8 1.7 1.7 0.4 - OTHER 0.0 -0.2 -0.
Slide 11: EBITDA synergies of SEK 0.6bn in 2022
EBITDA SYNERGIES OF SEK 0.6BN IN 2022 ENHANCING OUR CORE MORE OF CMORE/TV4 PLAY COSTS (SEK 350 MILLION) (SEK 150 MILLION) (SEK 100 MILLION) -5ppt ≈6.0 Common tech & development Insourcing Churn • Content ownership - BB TV+BB Other flexibility for packaging C More Telia • 5 ppt lower churn • State of
Slide 12: Sizeable synergies
SIZEABLE SYNERGIES SYNERGY S Y N E R GRUN-RATE Y RUN-RA TARGET OF TE TAR GET OF EBITDA SYNERGY DEVELOPMENT SEK S E0.6 K 0BILLION . 6 B I L L IN I O 2022 N IN 2022 In SEK billion, run-rate SEK 0.6 BILLION GRADUA GRADUAL L I N C R E IN INCREASE A SSYNERGIES E IN SYNERGIES 2020-2022 2020-2022 AGGREGATE
Slide 13: Financially accretive transaction
FINANCIALLY ACCRETIVE TRANSACTION BONNIER FULL RUN-RATE COMBINED 2017 (SEK BILLION) TELIA COMPANY** BROADCASTING SYNERGIES PRO FORMA Revenues 79.8 7.4 n.a >87.2 EBIT 14.8 (margin) 13.8 17.3% 0.4 5.2% 0.6 n.a EBITDA-CAPEX (cash conversion) 10.3 41.0% 0.4 82.4% 0.6 11.3 43.1% BONNIER FULL RUN-RA
Slide 14: Process ahead
PROCESS AHEAD Phase 1 investigation Potential phase 2 investigation ANNOUCEMENT & PHASE 1 DECISION PHASE 2 DECISION NOTIFICATION • Telia announces intention to acquire • Following discussions, EU Commission • EU Commission informs whether Bonnier Broadcasting informs whether merger is cleared or mer
Slide 15: Great value creative combination
GREAT VALUE CREATIVE COMBINATION CONVERGENCE BELIEVERS & STRONG STAND ALONE SIZEABLE SYNERGIES CUSTOMER CHAMPIONS • Strong combination • Superior Total-TV position with great • Sizeable synergies • Improved converged offerings domestic content • Enhancing our core incl churn • More personalized prod
Slide 16: Q&A
Q&A
Slide 17: Forward-looking statements
FORWARD-LOOKING STATEMENTS Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and
Slide 18: More to customers
MORE TO CUSTOMERS + TELIA COMPANY BONNIER BROADCASTING • Most satisfied TV customers and best network • Leading provider of attractive content • Large existing base to leverage • Strong brands and market position in both • Strong retail presence traditional TV and OTT • Leading brand • Best in class
Slide 19: Telia Company driving convergence
TELIA COMPANY DRIVING CONVERGENCE STAGE 1 STAGE 2 STAGE 3 SUPERIOR CONVERGENT OFFERING PURE OTT PLAYERS/ CONTENT OWNERS CONTENT NON-CONVERGENT FIXED PLAYERS TV & BROADBAND NON-CONVERGENT CONVERGENT MOBILE PLAYERS PLAYERS MOBILE 19
Slide 20: Conviction on value creation
CONVICTION ON VALUE CREATION OPERATIONAL VALUE SYNERGIES + + = LEVERAGE CREATION SEK 0.6 BILLION, THROUGH SEK 0.5 BILLION CASH FULL RUN RATE CASH FLOW 2022 FLOW CONTRIBUTION 2020 ACCRETION NO CHANGE TO CAPITAL ALLOCATION COMMITMENTS – DIVIDEND AND BUYBACKS 20