Altice Europe — Q2 2018 Earnings Presentation
26 slides from Altice Europe's earnings presentation, Aug 2, 2018
Slide 1: Altice Europe N.V. Q2 2018 Results
Altice Europe N.V. Q2 2018 Results August 2, 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: Altice Europe Core Strategy Starting to Pay
Altice Europe Core Strategy Starting to Pay Three pillars to deliver growth and enhanced profitability 1 2 3 Invest in best- Focus on Leverage in-class customer unique content proprietary experience assets infrastructure Fiber 4G+/5G Revenue EBITDA margin OpFCF growth expansion generation 3
Slide 4: Q2 2018 Strong Achievements
Q2 2018 Strong Achievements Continued execution on Altice Europe turnaround and deleveraging 1 Differentiated strategy focused on investment in fiber and content continues paying off 2 Operational turnaround progressing: continued positive subscriber momentum in France and Portugal 3 Creation of one
Slide 5: Accelerated Positive Subscriber Momentum
Accelerated Positive Subscriber Momentum Better processes improving customer experience and resulting in lower churn Altice France Q2-18 B2C trends Altice Portugal Q2-18 B2C trends YoY YoY Fiber net adds1 +56k Fiber net adds +46k +60% +40% Fiber churn 16% Fiber churn 7% -25% Lowest level -20% Best-i
Slide 6: Creation of One of the Largest European TowerCos
Creation of One of the Largest European TowerCos Building on long-term partnerships to invest in leading infrastructure TowerCo highlights Transactions summary1 • Creates one of the largest European Towercos • c.€2.5bn total cash consideration • Incremental EBITDA generated from mutualizing the towe
Slide 7: Owner of The Leading Fixed Infrastructure in All Geographies
Owner of The Leading Fixed Infrastructure in All Geographies Very high-speed footprint across Altice Europe Fiber homes passed1 (m) N°1 N°1 N°1 11.6 10.3 4.3 4.2 1.8 1.8 9.8 2.1 8.5 6.8 2.8 1.5 4.7 6.5 4.7 0.3 0.0 0.0 Proprietary Rented 1. FTTH/FTTB homes passed as of Q2-18 for Altice Europe, latest
Slide 8: Successfully Extending its Maturity Profile
Altice Europe Successfully Extending its Maturity Profile Limited near term maturities following very successful refinancing activity Altice maturity profile Altice cumulative % of debt matured €8Bn of Debt Pushed to 2026 & Beyond 78% 53% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2018 2
Slide 9: Business Review
Altice Europe Business Review 9
Slide 10: Altice France Outstanding Commercial Performance
Altice France Outstanding Commercial Performance Continued strong customer trends B2C fixed net adds B2C mobile postpaid net adds (‘000) (‘000) Fixed B2C base 6.0m B2C mobile postpaid base 13.0m Of which Fiber 40% +96 +239 +211 +69 +72 +56 +45 +44 +13 +35 -16 Reducing +80 +68 -35 retention cost -45
Slide 11: Performance Driven by Further Operational Improvements
Performance Driven by Further Operational Improvements Structural changes enhancing customer experience Fixed customer complaints Mobile customer complaints -41% -50% Q2-17 Q2-18 Q2-17 Q2-18 Driving customer satisfaction and reducing opex 11
Slide 12: Best Quarter in Fiber Expansion Agreements Since 2014
Best Quarter in Fiber Expansion Agreements Since 2014 Less churn, better ARPU and bigger share of the fiber wholesale market Fiber (FTTB / FTTH) homes passed (m) +8 22 8 +1.9 - 2.2 Rented +2.7 0.2 - 0.5 +0.5 1.4 2.1 0.3 8.6 0.1 0.6 14 0.4 Owned FTTB Very dense AMII PIN Rented Total 2022 proprietary
Slide 13: SFR Launch of New Sport Offers
SFR Launch of New Sport Offers Continued uptake of new content bundles, options strategy working RMC Sport offering Le Plus SPORT option new pricing #1 for European football #1 for basketball, athletics and English rugby #1 for horse riding and extreme sports SFR customer €5 SFR customer €9 #1 for b
Slide 14: Altice France Revenue Trends
Altice France Revenue Trends 2018 inflection year: operational improvements to improve financial performance Altice France revenue split1 Components of Q2 2018 YoY revenue trends (€m) -4.6% YoY ex VAT benefit2 / -6.6% YoY reported • B2C: -4.1% YoY ex VAT benefit 2,695 2,599 2,516 • Full quarter impa
Slide 15: Altice Portugal Outstanding Commercial Performance
Altice Portugal Outstanding 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 46% +49 +43 +46 +33 +35 +38 +31 +33 +34 +6 +4 +6 1 +17 +15 -
Slide 16: Altice Portugal Revenue at Inflection Point
Altice Portugal Revenue at Inflection Point Improving sequentially across all segments Altice Portugal revenue split Components of Q2 2018 YoY revenue trends (€m) -5.4% YoY • B2C: +1.3% QoQ -6.5% YoY 542 546 • No rate increase supporting fixed ARPU YoY 507 516 32 47 • Fixed base growing YoY for the
Slide 17: Financial Review
17 Financial Review altice
Slide 18: Altice Europe N.V. Pro Forma Financials
Altice Europe N.V. Pro Forma Financials Pro forma consolidated financials (IFRS 15)1 In million Euros Q2-17 Q2-18 YoY Reported Growth YoY Constant Currency Growth Revenue France 2,695 2,516 (6.6%) (6.6%) Portugal 546 516 (5.4%) (5.4%) Israel 265 241 (9.1%) (1.9%) Dominican Republic 161 138 (14.3%) (
Slide 19: Altice Europe N.V. Pro Forma Debt Capital Structure
Altice Europe N.V. Pro Forma Debt Capital Structure1 Altice USA cash dividend to partially pay down ACF facility and fund Altice TV division Altice Europe N.V Gross Debt €32,965m Net Debt €31,858m Gross Leverage 6.0x Net Leverage 5.8x Altice Luxembourg consolidated 3.5% 5 Gross Debt €31,237m Altice
Slide 20: Altice Europe N.V. Pro Forma Debt Maturity Profile
Altice Europe N.V. Pro Forma Debt Maturity Profile1 Long-dated maturities Altice maturity profile (€bn) 0.3 0.1 0.3 1.6 4.3 3.2 2.6 5.4 11.9 2.3 0.7 Debt maturity summary: Altice Europe N.V. • €2.8 bn available liquidity2 • WAL of 6.4 years • WACD of 5.6% • 84% fixed interest debt 2018 2019 2020 202
Slide 21: Altice Europe 2018 Guidance (IFRS 15)
Altice Europe 2018 Guidance (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 Altice Europe reiterates plans to grow revenue, and expand Adjusted EBITDA and cash flow margins, over the medium- to long-term 21
Slide 22: Q&A
22 Q&A altice
Slide 23: Appendix
23 Appendix altice
Slide 24: Reconciliation of non-GAAP measures to operating profit
Altice Europe N.V. Reconciliation of non-GAAP performance measures to operating profit for the six months period ended June 30, 20181 For the six months ended In million Euros June 30, 2018 Revenue 7,147.8 Purchasing and subcontracting costs (2,183.8) Other operating expenses (1,663.0) Staff costs a
Slide 25: Pro forma net leverage reconciliation as of June 30, 2018
Altice Europe N.V. €m Pro forma net leverage reconciliation as of June 30, 2018 Altice Europe N.V Reconciliation to Swap Adjusted Debt Actual PF Total Debenture and Loans from Financial Institutions 33,885 33,885 Value of Debenture and Loans from Financial Institutions in Foreign Currency converted
Slide 26: Pro forma net leverage reconciliation by entity
Altice Europe N.V. Pro forma net leverage reconciliation as of June 30, 2018 New Organisation €m Altice Luxembourg Consolidated Altice Altice Europe Altice Altice Altice Lux Altice TV ACF Europe N.V Altice Europe N.V (Pro Forma) Altice France Eliminations N.V International Luxembourg Conso Consolida