Altice SA — FY2017 Earnings Presentation
44 slides from Altice SA's earnings presentation, Mar 16, 2018
Slide 1: Altice N.V. Full Year and Q4 2017 Results
Altice N.V. Full Year and Q4 2017 Results March 16, 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: FY 2017 Key Takeaways
FY 2017 Key Takeaways Investment, reorganization and simplification to drive future growth 1 Revenue growth and margin expansion driven by strong Altice USA performance 2 Significant investment in infrastructure and innovative new services: FTTH, 4G networks, Altice One, Sofia 3 Rapid growth in medi
Slide 4: Altice Group Pre- and Post-Split Revenue Breakdown
Altice Group Pre- and Post-Split Revenue Breakdown Simplified group structure from H1 2018 Altice Group Pre-Split Altice International (1) Altice 7% TV 10% 26% 46% 35% Altice France USA 73% Altice Europe Post-Split 2 Altice USA Post-Split - Based on FY 2017 revenue split 1. Including Teads & rest of
Slide 5: Altice Europe Business Review
Altice Europe Business Review 5
Slide 6: Altice Europe Growth and De-leveraging Strategy
Altice Europe Growth and De-leveraging Strategy Return Europe to growth, monetize infrastructure and content investment, de-leverage 1 Operational and financial turnaround in France and Portugal 2 Intensifying operational focus to improve customer service and drive better subscriber KPIs 3 Continuin
Slide 7: Altice N.V. Financials: Pre- and Post-Split of Altice USA
Altice N.V. Financials: Pre- and Post-Split of Altice USA Strong asset base to execute turnaround Revenue OpFCF 2 Pre-Split (Altice N.V.) 1 Post-Split (Altice Europe) Pre-Split (Altice N.V.) Post-Split (Altice Europe) (€bn) (€bn) (€bn) (€bn) 23.4 23.4 5.2 4.6 14.8 14.7 2.5 2.5 FY-16 FY-17 FY-16 FY-1
Slide 8: Altice France Business Strategy
Altice France Business Strategy Focus on improving customer experience to drive lower churn Back to Altice basics Improving key customer experience metrics • Focus on improving operational metrics to 1. Pre-installation churn reduce churn and grow customer base 2. Time to install 3. Incident monitor
Slide 9: Altice France Financials (New Perimeter)
Altice France Financials (New Perimeter) 1 Reorganization and investment in future growth platform Revenue Adjusted EBITDA Capex 2 (€bn) (€bn) (€bn) 11.0 10.8 4.1 4.2 2.4 2.4 FY-16 FY-17 FY-16 FY-17 FY-16 FY-17 • New perimeter includes FOT and support services businesses, excludes newly created Alti
Slide 10: Altice France Revenue Trends (New Perimeter)
Altice France Revenue Trends (New Perimeter) Drag in Q4 2017 from B2B and low-margin wholesale & equipment declines (€m) (1.6%) Components of revenue trends 10,978 10,798 Total Altice France: -1.6% in FY 2017 (-4.5% in Q4-17) Other 1 560 (4.5%) 667 – -1.9% in FY 2017 (-5.4% in Q4-17) on old perime
Slide 11: Altice France Significant Network Investments
Altice France Significant Network Investments Leading network quality across mobile and fixed Fastest 4G network roll-out in 2017 Largest high speed broadband network # of 4G sites activated in FY 2017 1 Fiber homes passed 3 (m) as of Q4-17 4G coverage 2 Fiber coverage 3 95% #1 4,294 3,994 3,992 11.
Slide 12: Altice France B2C Mobile Business
Altice France B2C Mobile Business Transition from ARPU-led to customer-led revenue growth & content monetization B2C mobile postpaid trends B2C mobile revenue growth breakdown (%) 1.7% 1.5% 1.7% Mobile postpaid net adds (‘000) (0.3%) (1.0%) 80 33 (1.5%) (0.8%) (0.7%) (1.2%) (2.9%) Year over year mob
Slide 13: Altice France B2C Fixed Line Business
Altice France B2C Fixed Line Business Focus on churn reduction to return to customer growth Fiber vs. DSL net adds 1 69 54 Fiber ('000) Improved Q4-17 subscriber performance Total net adds Highest number of fiber net additions in (Fiber + DSL) (61) (45) two years Containing DSL losses DSL ('00
Slide 14: Focus on NextRadioTV
Focus on NextRadioTV 2017 a record year Audience market share Financial and operational highlights (%) Historic year for all NextRadioTV free-to- air channels: highest audience share growth in the free-to-air TV market +25% revenue growth in 2017 28.4% +44% EBITDA growth in 2017 27.7% 14.4% Re
Slide 15: Altice TV
Altice TV Monetize content investments in a separate subsidiary with its own P&L High-value content portfolio, enhanced with UEFA rights in 2018 SPORT New partnership SFR revenue share opportunities Etc…. Potential other revenue streams (e.g. OTT, advertising) A new business with strong initial inve
Slide 16: Altice Portugal Business Strategy
Altice Portugal Business Strategy Investment in networks and innovation, content, and better customer service 1 Focus on improving operational metrics: best-in-class churn and return to growth in customer base 2 Fiber investment leadership: rolling out nationwide FTTH coverage 3 Mobile investment le
Slide 17: Altice Portugal Revenue Trends (New Perimeter)
Altice Portugal Revenue Trends (New Perimeter) Drag in Q4 2017 from B2C and wholesale, B2B improving (€m) (1.1%) Components of revenue trends Total Altice Portugal: -1.1% in FY 2017 (-1.8% in Q4-17) 2,188 2,164 Other 116 (1.8%) – -2.7% in FY 2017 (-5.2% in Q4-17) on old perimeter 151 Wholesale 181
Slide 18: Altice Portugal Mobile B2C Business
Altice Portugal Mobile B2C Business Mobile network upgrades supporting growing mobile base B2C mobile postpaid net adds Mobile network evolution (‘000) Current Future Single-RAN: improve network 33 Multi-RAN quality of service and simplify network operations (12) Q4-16 Q4-17 4G technology Launch of
Slide 19: Altice Portugal Fixed B2C Business
Altice Portugal Fixed B2C Business Nationwide fiber deployment supporting record fixed customer growth Fiber (FTTH) vs. DSL / DTH net adds 1 Fiber (FTTH) homes passed 2 (m) (m) 43 29 5.3 Fiber ('000) Total net adds 4.0 (Fiber + DSL) (25) 6 3.1 2.4 DSL ('000) (37) (54) Total fixed 34.4 33.1 ARPU (€/M
Slide 20: Altice Portugal New Entertainment Platform: Sofia
Altice Portugal New Entertainment Platform: Sofia New user interface for all customers and new video set top box for fiber customers New user interface (UI) New video set top box Upgrading all existing customers’ Available for all fiber customers from video experience in March 2018 March 2018
Slide 21: Altice and Teads
Altice and Teads Combining unique data assets with digital advertising solutions Building the future of cross-screen advertising Leveraging data from Altice’s telecoms Marrying the power of businesses to deliver anonymous premium context with the people-based targeting power of data to reach the
Slide 22: Altice USA Business Review
Altice USA Business Review 22
Slide 23: Altice USA FY 2017 Key Takeaways
Altice USA FY 2017 Key Takeaways Growth, strong cash generation, investment, and better customer service 1 3.2% revenue growth and 25.8% growth in Operating FCF 1 in FY 2017 2 2.9% B2C revenue growth supported by customer relationship and ARPU trends 3 Solid 5.5% B2B revenue growth driven by superio
Slide 24: Altice USA Revenue Growth
Altice USA Revenue Growth Strong revenue growth across B2C, B2B, and Advertising ($m) Components of revenue growth +3.2% 9,039 9,327 Total Altice USA: +3.2% in FY 2017 (+2.6% in Q4-17) Other 42 33 392 Advertising 377 1,299 B2B 1,231 Residential (B2C): +2.9% in FY 2017 (+1.8% in Q4-17) +2.6% 2,36
Slide 25: Altice USA Margin Progression
Altice USA Margin Progression Substantially improved margins and cash flow Altice USA Adj. EBITDA margin 1 (%) 42.9% 44.1% Improved margins 40.3% 37.1% 31.8% 32.1% Dynamic and simplified organization 32.3% 34.5% 29.6% 17.3% 26.5% 18.5% Re-investments 14.5% 13.5% 10.6% 10.6% 10.7% 9.6% 2015 201
Slide 26: Financial Review
26 Financial Review altice
Slide 27: Altice N.V. (Altice Europe) Pro Forma Financials
Altice N.V. (Altice Europe) Pro Forma Financials Pro forma consolidated financials on new perimeter 1 YoY Reported YoY Constant YoY Reported YoY Constant €m FY-16 FY-17 Growth Currency Growth Q4-16 Q4-17 Growth Currency Growth France 10,978 10,798 (1.6%) (1.6%) 2,830 2,702 (4.5%) (4.5%) Portugal 2,1
Slide 28: Altice N.V. (Post-Split) Pro Forma Debt Capital Structure
Altice N.V. (Post-Split) Pro Forma Debt Capital Structure 1 Altice USA cash dividend to pay down ACF facility Altice N.V. Top Co (Consolidated) Gross Debt €32,540m Net Debt €30,850m Gross Leverage 5.6x Net Leverage 5.3x Altice Europe (Consolidated) 3.4% 5 Gross Debt €30,812m Altice Corporate Net Deb
Slide 29: Altice N.V. (Post-Split) Pro Forma Debt Maturity Profile
Altice N.V. (Post-Split) Pro Forma Debt Maturity Profile 1 Long-dated maturities Altice maturity profile (€bn) 0.3 0.1 0.3 1.9 8.3 2.7 2.6 5.4 10.2 - 0.7 Debt maturity summary: Altice N.V. (Altice Europe) • €3.6bn available liquidity 2 • WAL of 6.3 years • WACD of 5.5% • 85% fixed interest debt 2018
Slide 30: Update on Disposals of Non-core Assets
Update on Disposals of Non-core Assets Processes according to plan; signing in H1 2018, closing in H2 2018 Dominican Republic French and Portuguese Towers Other Sale process underway Sale process underway Green: closed in Q1-18 (€184m EV) Signing targeted in H1 2018 Signing targeted in H1
Slide 31: Altice Europe and Altice USA 2018 Guidance
Altice Europe and Altice USA 2018 Guidance Altice Europe1 Altice USA Altice France 2018 Revenue Growth 2018 OpFCF • c.€1.6 to 1.7bn (YOY) • c.2.5 to 3.0% Altice Europe (ex Altice TV) • c.€2.4 to 2.6bn 2018 Annual Capex • ~$1.3bn 2018 OpFCF Altice Europe and Altice USA reiterate plans to expand Adjus
Slide 32: Q&A
32 Q&A altice
Slide 33: Appendix
33 Appendix altice
Slide 34: Altice N.V. Financials on Old Perimeter
Altice N.V. Financials on Old Perimeter Pro forma consolidated financials 1 YoY Reported YoY Constant YoY Reported YoY Constant €m FY-16 FY-17 Growth Currency Growth Q4-16 Q4-17 Growth Currency Growth France (SFR) 11,087 10,874 (1.9%) (1.9%) 2,867 2,711 (5.4%) (5.4%) Altice USA 8,166 8,253 1.1% 3.2%
Slide 35: Separation Overview
Separation Overview Altice USA to be structurally separated from Altice N.V.; both controlled by Patrick Drahi Spin-off of Altice N.V.’s 67.2% interest in Altice USA through a distribution in kind to Altice N.V. shareholders that will take place out of Altice N.V.’s share premium reserve 1 Transac
Slide 36: Altice Europe Pro Forma Group Structure
Altice Europe Pro Forma Group Structure New perimeter with simplified corporate structure from H1 2018 Altice France Altice International 1 Altice TV 2 SFR Telecom Portugal (MEO) Altice Content division SFR Media (NextRadioTV 3 & Press) Israel (HOT) Major sports rights (Including Champio
Slide 37: Altice N.V. New vs. Old Perimeter: Revenue
Altice N.V. New vs. Old Perimeter: Revenue 1 Altice N.V. (“Altice Europe”) New Perimeter Altice N.V. Old Perimeter In million Euros Q1-17 Q2-17 Q3-17 Q4-17 FY-17 In million Euros Q1-17 Q2-17 Q3-17 Q4-17 FY-17 Telecom (SFR) 2,521.1 2,536.8 2,543.7 2,529.5 10,131.0 France - Telecom 2,582.5 2,622.0 2,6
Slide 38: Altice N.V. New vs. Old Perimeter: EBITDA
Altice N.V. New vs. Old Perimeter: EBITDA 1 Altice N.V. (“Altice Europe”) New Perimeter Altice N.V. Old Perimeter In million Euros Q1-17 Q2-17 Q3-17 Q4-17 FY-17 In million Euros Q1-17 Q2-17 Q3-17 Q4-17 FY-17 France - Telecom 803.8 929.6 965.7 927.3 3,626.4 France - Telecom 938.4 1,061.6 1,096.2 1,06
Slide 39: Altice N.V. New vs. Old Perimeter: Capex
Altice N.V. New vs. Old Perimeter: Capex Altice N.V. (“Altice Europe”) New Perimeter Altice N.V. Old Perimeter In million Euros Q1-17 Q2-17 Q3-17 Q4-17 FY-17 In million Euros Q1-17 Q2-17 Q3-17 Q4-17 FY-17 France - Telecom 470.6 626.1 505.7 670.1 2,272.6 France - Telecom 465.9 628.9 504.8 681.4 2,281
Slide 40: Altice USA, Inc. Numbers
Altice USA, Inc. Numbers Pro forma US GAAP financials (USD) 1 ($m) FY-16 FY-17 Growth YoY Q4-16 Q4-17 Growth YoY Optimum 6,466 6,665 3.1% 1,645 1,691 2.8% Suddenlink 2,573 2,665 3.6% 660 676 2.4% Eliminations - (3) - (2) Total Revenue 2 9,039 9,327 3.2% 2,306 2,365 2.6% YoY growth (%) 3.6% 3.2% 5.1%
Slide 41: Altice USA Debt Capital Structure
Altice USA Debt Capital Structure 1 Per Q4 2017 as adjusted for Altice USA special cash dividend Altice USA (Consolidated) 1 Gross Debt $22,516m Net Debt $22,243m LTM Adj. EBITDA GAAP 2 $4,036 Net Leverage 5.5x Net Leverage (ex - $1.5bn dividend) 5.1x Undrawn RCF (Consolidated) 3 $2,020m 100% 100% C
Slide 42: Altice USA Debt Maturity Profile
Altice USA Debt Maturity Profile 1 Long-dated maturities following pro-active refinancing activity Altice USA maturity profile ($bn) 0.6 0.6 1.6 2.8 0.7 3.0 0.8 12.5 Debt maturity summary: Altice USA • $2.3bn available liquidity • WAL of 6.3 years • WACD of 6.2% • 66% fixed interest debt 2018 2019 2
Slide 43: Altice N.V. Reconciliation of non-GAAP performance measures
Altice N.V. Reconciliation of non-GAAP performance measures to operating profit for the three and twelve months period ended December 31, 2017 €m Three Months ended Twelve Months ended Adjusted EBITDA December 31, 2017 December 31, 2017 As reported in press release 2,387 9,388 Pro forma adjustments
Slide 44: Altice N.V. Pro forma net leverage reconciliation
Altice N.V. Pro forma net leverage reconciliation as of December 31, 2017 €m Altice Group Reconciliation to Swap Adjusted Debt Actual Pro Forma Total Debenture and Loans from Financial Institutions 49,941 49,941 Value of Debenture and Loans from Financial Institutions in Foreign Currency converted a