Altice SA — Q1 2017 Earnings Presentation
31 slides from Altice SA's earnings presentation, May 11, 2017
Slide 1: Q1 2017 Results
Q1 2017 Results May 11, 2017 1
Slide 2: Disclaimer
DISCLAIMER NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER can be no assurance that the expectation or belief will result or be achieved or TO PURCHASE SECURITIES accomplished. To the extent that statements in this press release are not recitations of This presentation does not constitute or form p
Slide 3: Group Highlights
Group Highlights Saltice
Slide 4: Q1 2017 Key Takeaways
Q1 2017 KEY TAKEAWAYS ALL MARKETS DRIVING CONTINUED PROFITABLE GROWTH 1 Altice Group: accelerated revenue growth, improved margins and cash conversion 2 France: revenue stabilization, market leading investment in 4G+ / fiber networks and content 3 Altice USA: continued revenue growth and improved
Slide 5: Q1 2017 Altice Group Financial Profile
Q1 2017 ALTICE GROUP FINANCIAL PROFILE1 STRONG CASHFLOW GROWTH Revenue growth +3.2% Adj. EBITDA growth +9.5% OpFCF growth +21.4% 1 Reported growth rates. OpFCF defined as Adj. EBITDA-capex 5
Slide 6: All Markets Back to Growth
ALL MARKETS BACK TO GROWTH ALTICE MODEL VALIDATED Revenue Growth (YoY) Q1-16 Q1-17 +0.6% -5.8% +3.8% +3.1% +0.2% -3.5% +4.4% -0.3% Note: Segments presented on a standalone reporting basis and in local currency. SFR shown including media assets (i.e. including NextRadioTV and Altice Media Group Franc
Slide 7: Significant Network Investments
SIGNIFICANT NETWORK INVESTMENTS LEADING FIBER OPERATORS IN EUROPE SFR Fiber Network Buildout MEO Fiber Network Buildout # Fiber Homes Passed # Fiber Homes Passed Fiber coverage Fiber coverage 2022 target 22m N°1 2020 target 5.3m N°1 c.11.0m c.4.0m 9.6m 3.2m 8.1m 2.4m 1.8m 6.7m 1.7m 5.6m Q1-14 Q1-15
Slide 8: USA FTTH Upgrades
ALTICE USA FTTH UPGRADES GENERATION GIGASPEED Pre-Altice 1 Q1-17 2022 101Mbps 350Mbps2 >10Gbps 150Mbps 1Gbps >50% c.60% Limited Focus Focus On Speeds, Optimum Network and On Speeds Network Upgrades Part of Suddenlink Ongoing Upgraded to FTTH 1 Q3-15 for Suddenlink and Q1-16 for Optimum 2 Up to 350 M
Slide 9: Business Review
Business Review Sattice
Slide 10: France Business Dynamics
ALTICE FRANCE BUSINESS DYNAMICS REVENUE STABILIZATION Revenue YoY (%)1 0.8% + Organic revenue stabilization 0.6% + Network and content investments paying off + Mobile customer base returned to growth + Fixed trends to continue to improve in 2017 + Completed 1st phase of company transformation (2.9
Slide 11: France B2C Revenue Trends
ALTICE FRANCE B2C REVENUE TRENDS B2C RETURN TO GROWTH B2C Revenue YoY (%)1 2.4% 1.3% 1.3% 0.4% (0.5%) (2.0%) (2.2%) (0.8%) (1.5%) (4.9%) (5.2%) (5.2%) (4.2%) (4.8%) (7.1%) Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Fixed Mobile Total B2C Continued fixed growth, driven by ARPU uplift; Mobile trend improving as
Slide 12: France Significant Network Investments
ALTICE FRANCE SIGNIFICANT NETWORK INVESTMENTS FASTEST 4G MOBILE ROLLOUT SIGNIFICANTLY IMPROVING NETWORK QUALITY Fastest 4G Network Roll-out 1 – 88% 4G Network Improvements Driving Faster Speeds Coverage and Higher Quality Connections # of 4G Sites nPerf Average Score in nPoints 2 11,642 11,122 Q4-16
Slide 13: France B2C Mobile Business
ALTICE FRANCE B2C MOBILE BUSINESS SUCCESS OF SFR FAMILY! OFFERS BOOSTING GROWTH OF MOBILE BASE B2C Mobile Postpaid Net Adds SFR FAMiLY! 4P Customer Base ('000) ('000) 1,259 68 33 468 799 (28) (73) 226 353 437 156 (199) 110 76 153 417 438 30 20 250 Postpaid ARPU (€/Month) - 103 - Q1-16 Q2-16 Q3-16 Q4
Slide 14: France B2C Fixed Line Business
ALTICE FRANCE B2C FIXED LINE BUSINESS FOCUS ON CHURN REDUCTION Fiber vs. DSL Net Adds1 66 54 45 Fiber ('000) 44 44 Total Subscriber Net Adds (61) (58) (75) (61) (35) (Fiber + DSL) (79) DSL ('000) (102) (119) (115) (127) Total Fixed ARPU 33.9 35.6 37.3 36.9 35.9 (€/Month) Q1-16 Q2-16 Q3-16 Q4-16 Q1-1
Slide 15: Timeline to Improve Fixed Customers Trends
TIMELINE TO IMPROVE FIXED CUSTOMERS TRENDS FIBER CONVERGENCE STRATEGY WITH IMPROVING CUSTOMER EXPERIENCE PLAY • New content • BFM Paris • New DSL • Reshaping • Accelerate • Converging • New FTTH bundles launch set top box RED DSL FTTH rollout VOD platforms wireless (including offers as FTTB across g
Slide 16: Portugal Business Dynamics
ALTICE PORTUGAL BUSINESS DYNAMICS REVENUE STABILIZATION Revenue YoY (%)1 + B2C – Focus on reducing customer losses: 0.9% Fiber growth still accelerating as a result of faster network build out, to offset higher DSL/DTH churn +0.2% Content bundling supporting ARPU (1.5%) Saturation of 4P and
Slide 17: 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 3.8% 3.6% + Improved margins and cash flow 3.1% + Improved customer service metrics + New home
Slide 18: USA B2C Fixed Line Business
ALTICE USA B2C FIXED LINE BUSINESS POSITIVE CUSTOMER AND ARPU TRENDS B2C Customer Relationships B2C Customer Relationships (‘000) (‘000) +0.7% +1.4% 1,661 2,887 1,649 2,882 2,879 1,638 1,636 2,873 1,628 2,866 3P 3P Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 ARPU ($) per unique custo
Slide 19: USA B2C Broadband
ALTICE USA B2C BROADBAND FOCUS ON HIGH SPEED BROADBAND GROWTH % of Customers ≥ 100 Mbps Broadband Speeds 1,2 38 49 70 66% Suddenlink Acquisition Optimum Acquisition 61% 48% 30% 22% 15% 26% 21% 10% 16% 5% 5% 12% 3% 9% 10% 5% 6% Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Average speed deliv
Slide 20: USA Margin Progression
ALTICE USA MARGIN PROGRESSION SUBSTANTIALLY IMPROVED MARGINS AND CASH FLOW 40.7% 41.4% Altice USA Adj. EBITDA Margin 36.5% 38.8% Improved margins 33.9% 32.9% 32.4% 31.7% 31.3% 26.7% Dynamic organization 16.7% 14.9% 16.8% 24.2% 29.0% 34.2% 18.3% 23.5% More optimization 16.4% potential 16.1% 15.
Slide 21: USA FTTH Upgrades
ALTICE USA FTTH UPGRADES ADVANCED NETWORK INFRASTRUCTURE + Upgrade within existing capex envelope Coax STB Extensive fiber already in place Current HFC/FTTB STB Architecture Coax c.80% of network aerial Power Supply PS CMTS Proprietary GPON / gateway technology Optical Coax Optical Fiber node
Slide 22: Financial Review
Financial Review Saltice
Slide 23: Pro Forma Consolidated Financials
ALTICE N.V. PRO FORMA CONSOLIDATED FINANCIALS1 YoY Reported YoY Constant €m Q1-16 Q1-17 Growth Currency Growth France (SFR) 2,690 2,705 0.6% 0.6% Altice USA 2,016 2,166 7.4% 3.8% Portugal 572 573 0.2% 0.2% Israel 231 262 13.2% 4.4% Revenue Dominican Republic 178 183 2.7% 2.0% French Overseas Territo
Slide 24: Overview of Altice Group Debt Pro-Forma
OVERVIEW OF ALTICE GROUP DEBT PRO-FORMA6 DIVERSIFIED SILOS Altice Europe Altice Group Target Leverage Available Liquidity (Consolidated) (Consolidated) • Altice Europe: c. 4.0x • Altice Group1: €5.2 bn Gross Debt 30,295 51,837 Net Debt 29,681 50,701 • Altice US: c. 5.0-5.5x LTM Adj. EBITDA 4 PF Cash
Slide 25: USA Leverage Evolution
ALTICE USA LEVERAGE EVOLUTION RAPID DE-LEVERAGING TOWARDS TARGET Net Debt / L2QA Adj. EBITDA1 7.1x 7.0x 6.6x 6.7x 6.5x 6.2x 6.0x 5.8x 5.6x 2 5.7x 5.6x 2 5.3x Target 5.0-5.5x Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Suddenlink Optimum 1 Net debt and Adj. EBITDA figures as per Altice reported f
Slide 26: Overview of Altice Group Maturity Profile
OVERVIEW OF ALTICE GROUP MATURITY PROFILE €7.3BN REFINANCED FROM JANUARY 1 GENERATING €134MLN OF INTEREST SAVINGS Altice Maturity Profile (€m) Debt maturity summary: Altice Group 9,903 WAL life of 6.5 years (including RCF drawn) WACD of 5.9% 14,730 1,053 1,761 1,997 1,552 2,772 5,316 3,115 7,994 1,2
Slide 27: Zaltice
Zaltice
Slide 28: Appendix
Appendix Saltice
Slide 29: Pro Forma Consolidated Revenue
ALTICE N.V. PRO FORMA CONSOLIDATED REVENUE1 YoY Reported YoY Constant €m Q1-16 Q1-17 Growth Currency Growth France 2,690 2,705 0.6% 0.6% US (Optimum) 1,446 1,545 6.8% 3.2% US (Suddenlink) 570 621 9.0% 5.3% Portugal 572 573 0.2% 0.2% Israel 231 262 13.2% 4.4% Dominican Republic 178 183 2.7% 2.0% Fren
Slide 30: Pro Forma Consolidated Adjusted EBITDA
ALTICE N.V. PRO FORMA CONSOLIDATED ADJUSTED EBITDA YoY Reported YoY Constant €m Q1-16 Q1-17 Growth Currency Growth France 864 820 (5.1%) (5.1%) Margin (%) 32.1% 30.3% US (Optimum) 441 597 35.3% 30.7% Margin (%) 30.5% 38.6% US (Suddenlink) 242 299 23.8% 19.6% Margin (%) 42.5% 48.2% Portugal 277 263 (
Slide 31: Pro Forma Consolidated Capex
ALTICE N.V. PRO FORMA CONSOLIDATED CAPEX Q1-17 €m Q1-16 Q1-17 % Capex to Sales France 441 486 18.0% US (Optimum) 141 111 7.2% US (Suddenlink) 68 46 7.4% Portugal 128 117 20.5% Israel 62 66 25.4% Dominican Republic 25 25 13.9% French Overseas Territories 15 7 13.1% Others and Eliminations1 15 (15) nm