Altice SA — Q1 2018 Earnings Presentation
29 slides from Altice SA's earnings presentation, May 17, 2018
Slide 1: Altice N.V. Q1 2018 Results
Altice N.V. Q1 2018 Results May 17, 2018
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this presentation, including, without limitatio
Slide 3: Q1 2018 Key Takeaways
Q1 2018 Key Takeaways Altice Europe reorganization and turnaround well on track 1 Differentiated strategy focused on investment in fiber and content paying off 2 Operational turnaround underway: best subscriber trends since Altice took control of SFR 3 New management team based on Altice founders an
Slide 4: Infrastructure and content investment strategy
Infrastructure and content investment strategy Leading network quality and content assets to deliver growth and enhanced profitability Altice France (Q1-18) Altice Portugal (Q1-18) Fiber homes passed 11.2m Fiber homes passed 4.2m Fiber churn (YoY) -27% Fiber churn (YoY) -46% + + Differentiated conte
Slide 5: All Markets Growing Subscribers
All Markets Growing Subscribers Better processes improving customer satisfaction, resulting in lower churn Q1-18 B2C Net Adds Fiber1 Mobile Postpaid (‘000) #1 for subscriber recruitment, regaining market share +96 +239 Record total fixed (+71k) and fiber net adds Record postpaid mobile net add
Slide 6: Update on Disposals of Non-core Assets and Reorganization
Update on Disposals of Non-core Assets and Reorganization All processes are on track French and Portuguese towers Dominican Republic Internal reorganization ▪ Process underway ▪ Process underway ✓ Altice Technical Services US and i24 transferred to Altice USA ✓ International wholesale voice: signed,
Slide 7: Altice Europe Dedicated Management Team
Altice Europe Dedicated Management Team Altice founders and dynamic managers driving enhanced focus and execution Patrick Drahi President of Board 1 Armando Pereira Alain Weill Dennis Okhuijsen Altice Europe COO Altice Europe CEO Altice Europe CFO Gerrit Jan Armando Pereira Alexandre Fonseca Tal Gra
Slide 8: Altice Europe Business Review
Altice Europe Business Review 8
Slide 9: Altice France Commercial Performance
Altice France Commercial Performance Best customer trends since Altice took control of SFR B2C fixed net adds B2C mobile postpaid net adds (‘000) (‘000) Fixed B2C base 6.0m B2C mobile postpaid base 12.8m Of which Fiber 39% +96 +239 +69 +71 +45 +44 +35 -16 -35 -25 +68 +80 -51 -45 +34 +16 -75 -79 -119
Slide 10: Performance Achieved by Operational Improvements
Performance Achieved by Operational Improvements New management and process improvements already showing results in Q1-18 Back to Altice basics Improving customer service and reducing churn Enhanced focus on improving fiber operational metrics: Q1-18 • Improvements in technical service operations: #
Slide 11: SFR New Commercial Offers
SFR New Commercial Offers Significant uptake of new content bundles, options strategy working Le Plus SPORT Le Plus CINE-SERIES Simplified telecom Other bundles + + PLAY VOD ILLIMITÉE + options1 (ex-content) Exclusive rights #1 European football PREMIUM POWER STARTER August launch under new brand Dr
Slide 12: Altice France Revenue Trends
Altice France Revenue Trends 2018 inflection year: operational improvements to improve financial performance Altice France revenue split1 Components of Q1 2018 YoY revenue trends (€m) -0.7% YoY ex VAT benefit / -1.1% YoY reported 2,698 • B2C: +0.5% YoY ex VAT benefit 2,627 2,599 161 155 173 • B2C se
Slide 13: Media and Advertising Revenue Trends
Media and Advertising Revenue Trends Fastest growing Altice assets Altice France Media YoY revenue trend Teads YoY revenue trend (€m) (€m) +11% 108 +39% 68 97 49 Q1-17 Q1-18 Q1-17 Q1-18 13
Slide 14: Altice Portugal Commercial Performance
Altice Portugal Commercial Performance Continued subscriber growth in both fixed and mobile segments B2C fixed net adds B2C mobile postpaid net adds (‘000) (‘000) Fixed B2C base 1.6m B2C mobile postpaid base 2.9m Of which Fiber 43% +61 +49 +43 +33 +35 +31 +33 +34 +6 +4 +15 -12 -11 -37 -28 -45 -45 -4
Slide 15: Performance Achieved by Operational Improvements
Performance Achieved by Operational Improvements Leading fiber infrastructure and process improvements showing results B2C fiber churn B2C postpaid mobile churn (%) (%) 13% 13% 9% 7% Q1-17 Q1-18 Q1-17 Q1-18 15
Slide 16: Altice Portugal Revenue Trends
Altice Portugal Revenue Trends Drag in Q1-18 from lower B2C subscriber base and B2B repricing Altice Portugal revenue split Components of Q1 2018 YoY revenue trends (€m) -4.5% YoY1 ex one-off / -6.5% YoY reported • B2C: -6.0% YoY ex one-off 1 542 527 507 • Loss of customers in 2017 32 42 41 32 42 •
Slide 17: Altice Israel Commercial Performance
Altice Israel Commercial Performance Fixed base stabilized and continued mobile growth Fixed net adds1 B2C mobile postpaid net adds (‘000) (‘000) Fixed base 1.0m B2C mobile postpaid base 1.2m +1 +24 +22 +16 -3 -4 -5 +8 +7 -5 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 1. Iincludes bo
Slide 18: Altice Israel Revenue Trends
Altice Israel Revenue Trends Intensified market competition putting pressure on fixed and mobile ARPU Altice Israel revenue split Components of Q1 2018 YoY revenue trends (NISm) -0.9% in local currency • Fixed: -4.1% YoY in local currency 1,037 1,064 • New low-end video competition 2 1,027 279 322 3
Slide 19: Financial Review
19 Financial Review altice
Slide 20: Altice N.V. (Altice Europe) Pro Forma Financials
Altice N.V. (Altice Europe) Pro Forma Financials Pro forma consolidated financials (IFRS 15)1 In million Euros Q1-17 Q1-18 YoY Reported Growth YoY Constant Currency Growth Revenue France 2,627 2,599 (1.1%) (1.1%) Portugal 542 507 (6.5%) (6.5%) Israel 261 242 (7.5%) (0.9%) Dominican Republic 164 133
Slide 21: Altice N.V. (Altice Europe) Pro Forma Debt Capital Structure
Altice N.V. (Altice Europe) Pro Forma Debt Capital Structure1 Altice USA cash dividend to partially pay down ACF facility and fund Altice TV division Altice N.V. Post Split (“Altice Europe”) TopCo Gross Debt €32,700m Net Debt €31,312m Gross Leverage 5.8x Net Leverage 5.5x Altice Luxembourg consolida
Slide 22: Altice N.V. (Altice Europe) Pro Forma Debt Maturity Profile
Altice N.V. (Altice Europe) Pro Forma Debt Maturity Profile1 Long-dated maturities Altice maturity profile (€bn) 0.3 0.1 0.1 2.4 8.3 2.7 2.6 5.3 10.1 - 0.7 Debt maturity summary: Altice N.V. (Altice Europe) • €3.0 bn available liquidity2 • WAL of 6.1 years • WACD of 5.5% • 84% fixed interest debt 20
Slide 23: Altice Europe 2018 Guidance Updated for IFRS 15
Altice Europe 2018 Guidance Updated for IFRS 15 Altice France 2018 OpFCF • c.€1.5 to 1.6bn Altice Europe (ex Altice TV) • c.€2.3 to 2.5bn 2018 OpFCF IFRS 15 accounting impact on Altice France and Altice Europe 2018 OpFCF expected to be -€50m to -€100m (impact of IFRS 15 on Altice Europe EBITDA in FY
Slide 24: Q&A
24 Q&A altice
Slide 25: Appendix
25 Appendix altice
Slide 26: Altice USA Separation Overview
Altice USA Separation Overview Altice USA to be structurally separated from Altice NV; both controlled by Patrick Drahi Spin-off of Altice NV’s 67.2% interest in Altice USA through a distribution in kind to Altice NV shareholders 1 Altice USA $1.5bn special cash dividend paid prior to separation
Slide 27: Reconciliation of non-GAAP performance measures to operating profit
Altice N.V. Reconciliation of non-GAAP performance measures to operating profit for the three months period ended March 31, 20181 For the three months ended In million Euros March 31, 2018 Revenues 3,599.1 Purchasing and subcontracting costs -1,116.6 Other operating expenses -862.9 Staff costs and e
Slide 28: Pro forma net leverage reconciliation as of March 31, 2018
Altice N.V. (Altice Europe) Pro forma net leverage reconciliation as of March 31, 2018 €m Altice NV (Post Split) Reconciliation to Swap Adjusted Debt Actual PF Total Debenture and Loans from Financial Institutions 32,781 32,781 Value of Debenture and Loans from Financial Institutions in Foreign Curr
Slide 29: Pro forma net leverage reconciliation as of March 31, 2018
Altice N.V. (Altice Europe) Pro forma net leverage reconciliation as of March 31, 2018 €m Altice Luxembourg Consolidated Altice Altice Altice NV Altice Altice Altice ACF ANV Altice Group (Pro Forma) Eliminations Luxembourg TV (Post-Split) France International Luxembourg Consolidated Gross Debt Conso