Altice SA — FY2013 Earnings Presentation
40 slides from Altice SA's earnings presentation, Mar 18, 2014
Slide 1: Full Year 2013 Results
March 18, 2014 Full Year 2013 Results 1
Slide 2: An International Cable Operator in Attractive Markets
An International Cable Operator in Attractive Markets 9 Territories Belgium Luxembourg 14m Homes Passed Western Europe Switzerland France 3m Cable Customers Portugal 6.6m Cable RGUs Israel Dominican Republic Guadeloupe & Overseas Martinique Territories French Guiana Mayotte La Réunion Note:
Slide 3: Full Year Results - Highlights
Altice SA Full Year Results - Highlights Financials Recent Strategic Initiatives Liquidity & Capital Full-year pro forma1 revenue up 0.7% Successful IPO creates equity IPO raised c€750m primary proceeds to €3.2bn currency for future opportunities & created 26% free float • mainly driven by Isr
Slide 4: Key Operational Highlights
Altice S.A Key Operational Highlights Israel France Reorganization program finished 5% cable customer growth 3.6% ARPU growth driven by strong triple-play and high 2% ARPU growth speed broadband growth Strong shift to high-speed broadband Customer losses due to cost restructuring La Bo
Slide 5: Strategic Initiatives
Strategic Initiatives Acquisition of Tricom (Cable) and Orange (Mobile) in Dominican Republic 1 Leading Market 2013 Financials (€m) Creates leading 4P operator with #2 position Position with a Significant up-sell opportunity Orange Quadruple Play Approach Revamped and expanded B2B product offe
Slide 6: Further Opportunity to Increase Margins
Further Opportunity to Increase Margins Proven ability Further upside potential from operational efficiencies — Identify attractive targets — Track record of successful turnarounds Margin Expansion 2013 vs. 2012 (EBITDA Margin % pts) Current International1 EBITDA Margin is much Lower than Peers
Slide 7: Pro Forma Consolidated Financials (excluding Tricom and Mobius)
Altice SA Pro Forma Consolidated Financials (excluding Tricom and Mobius) €m 2012 2013 Growth France 1,300 1,314 1.1% Revenues International 1,900 1,907 0.4% Total 3,199 3,221 0.7% France 622 616 (1.0%) Margin (%) 47.8% 46.9% (0.9pp) International 661 744 13% EBITDA Margin (%) 34.8% 39.0% +4.2pp Tot
Slide 8: Pro Forma Consolidated Revenue
Altice SA Pro Forma Consolidated Revenue Constant Currency €m 2012 2013 Growth Growth Israel 850 882 3.7% 0.3% Dominican Republic - Orange 458 446 (2.5%) 7.3% French Overseas Territories 220 224 1.8% Portugal 235 210 (11%) Benelux 71 71 (1.3%) Other 65 75 15.5% Total International 1,900 1,907 0.4% 1
Slide 9: Pro Forma Consolidated EBITDA
Altice SA Pro Forma Consolidated EBITDA Constant Currency €m 2012 2013 Growth Growth Israel 305 363 18.9% 15.1% Dominican Republic - Orange 167 173 3.8% 14.2% French Overseas Territories 75 85 12.5% Portugal 48 58 21.3% Benelux 46 45 (1.3%) Other 20 20 (1.0%) Total International 661 744 12.5% 13.3%
Slide 10: Pro Forma Consolidated Capex
Altice SA Pro Forma Consolidated Capex €m 2012 2013 Growth Israel 295 209 (29%) Dominican Republic - Orange 73 59 (20%) French Overseas Territories 36 36 1% Portugal 31 24 (22%) Benelux 17 23 35% Other 19 22 18% Total International 471 373 (21%) France 286 320 12% Total 757 693 (8%) France capex u
Slide 11: France KPIs
France KPIs 2012 2013 Growth Cable Customers (‘000) 1,228 1,264 3% Cable RGUs (‘000) 3,094 3,218 4% Cable RGUs per Customer (x) 2.52 2.55 1% Cable Triple-play Penetration 79% 82% 3% pts B2C Revenue €833m €869m 4% Cable ARPU per Customer €40.70 €41.50 2% Cable customers grew due to success of La Bo
Slide 12: France Financials
France Financials Wholesale 1,300 1,314 201 B2B 211 B2C 313 Revenues 325 (€m) 833 869 2012 2013 EBITDA Margin 47.8% 46.9% 622 616 EBITDA (€m) 2012 2013 Operating (12)% Free Cash 336 296 Flow (€m) 2012 2013 Note: Revenue chart above does not break out intercompany elimination of €69m in both 2012 and
Slide 13: Israel KPIs
Israel KPIs 2012 2013 Growth Cable Customers (‘000) 1,198 1,127 (6)% Cable RGUs (‘000) 2,343 2,295 (2)% Cable RGUs per Customer (x) 1.96 2.04 4% Cable Triple-play Penetration 34% 40% 6pp Cable Revenue €678m €699m 3% Cable ARPU per Customer (€) €44.40 €47.60 7% iDEN Subs ('000) 325 218 (33)% UMTS Sub
Slide 14: Israel Mobile - UMTS subscriber growth outweighs iDEN decline
Israel Mobile - UMTS subscriber growth outweighs iDEN decline Subscribers (‘000) Revenue (NISm) 235 232 227 231 223 766 773 810 758 761 592 116 539 132 153 482 514 136 142 441 325 119 276 100 87 85 247 234 78 218 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 iDEN UM
Slide 15: Israel Financials (Local currency)
Israel Financials (Local currency) Cable 4,213 4,228 Mobile 855 913 Revenue (ILSm) 3,362 3,353 2012 2013 EBITDA Margin 35.9% 41.2% 1,741 1,511 EBITDA (ILSm) 2012 2013 739 Operating Free Cash Flow (ILSm) 49 2012 2013 Note: Total revenue above is after intercompany revenue deduction of ILS 38m in 2013
Slide 16: French Overseas Territories KPIs
French Overseas Territories KPIs 2012 2013 Growth Cable Customers (’000) 39 40 3% Cable RGUs per Customer (x) 1.62 1.85 14% Triple-play Penetration 31% 43% 12pp Cable Cable Revenue €88m €90m 2.1% Cable ARPU per Customer €48.30 €51.40 6.4% xDSL / Non Cable RGUs (’000) 140 133 (5)% Postpaid Subs 183 1
Slide 17: French Overseas Territories Financials
French Overseas Territories Financials Cable Mobile 220 224 Revenues 132 134 (€m) 88 90 2012 2013 EBITDA Margin 34.2% 37.8% 75 85 EBITDA (€m) 2012 2013 48 Operating 39 Free Cash Flow (€m) 2012 2013 17
Slide 18: Dominican Republic – Orange Dominicana KPIs
Dominican Republic – Orange Dominica KPIs 2012 2013 Growth Postpaid Subs 589 624 6% Prepaid Subs 2,504 2,647 6% Mobile Total Mobile Subs 3,093 3,271 6% Mobile Revenue (DOPbn) 19.4 20.5 5% Mobile ARPU per Customer (DOP) 533 533 - Strong mobile customer growth due to favourable market dynamics, incr
Slide 19: Dominican Republic – Orange Dominicana Financials
Dominican Republic – Orange Dominicana Financials (local currency) 22.8 24.4 Revenues (DOPbn) 2012 2013 EBITDA Margin 36.4% 38.8% 9.5 EBITDA 8.3 (DOPbn) 2012 2013 Operating 6.3 Free Cash 4.6 Flow (DOPbn) 2012 2013 19
Slide 20: Pro Forma Net Debt
Pro Forma1 Net Debt Altice SA Gross Debt: €6,554m Cash2: €384m Net Debt: €6,170m HoldCo Net Debt2: €103m Undrawn Revolver: €163m 40% 100% Numericable International / Altice VII Gross Debt: €2,660m Gross Debt: €3,570m Cash: €101m Cash: €62m Net Debt: €2,558m Net Debt: €3,509m Undrawn Revolver: €65m U
Slide 21: Guidance for 2014
Guidance for 2014 France: Numericable (standalone) Revenue growth of 2% to 5% Adjusted EBITDA growth rate superior to revenue growth International Group EBITDA margin to expand from 39% to the mid-40s Main drivers: Continued efficiency gains and additional revenue Israel: New network sha
Slide 22: Thank You
Thank You 22
Slide 23: Not an Offer to Sell or Solicitation of an Offer to Purchase Securities
NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO PURCHASE SECURITIES This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to sell securities of Altice S.A. or any of its affiliates (collectively the “Altice Issuers”) or the solicitation of
Slide 24: Appendix
APPENDIX 24
Slide 25: Numericable Group: The Future Begins Today
■Numericable Group Company presentation July 2013 “The Future Begins Today” Creating the French Champion in Very High Speed 17 March 2014 Fixed – Mobile Convergence
Slide 26: Disclaimer
Disclaimer ■ This presentation contains statements about future events, projections, forecasts and expectations that are forward- looking statements. Any statement in this presentation that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, un
Slide 27: Our Ambition: Create the French Champion in Very High Speed Fixed-Mobile Convergence
1 Our Ambition: Create the French Champion in Very High Speed Fixed-Mobile Convergence Fixed-Mobile Convergence is the New Paradigm for Our Customers We Benefit From Complementary Networks and Talents We Will Deliver Superior Growth Through Higher and Better Investment Strong Value Creation
Slide 28: Exponential Consumer Needs for Speed and Bandwidth
2 Exponential Consumer Needs for Speed and Bandwidth: Fixed-Mobile Convergence is a Must French Households Increasingly Connected… … Driving Exponential Needs for More Speed and Bandwidth Multi Screen Household with Fixed and Mobile Devices 2.6m Households are Overall need of ~80 Mbps equipped with
Slide 29: Numericable is the Clear Leader in Very High Speed Fixed Broadband in France
3 Numericable is the Clear Leader in Very High Speed Fixed Broadband in France # of Very High Speed Broadband Customers – as per ARCEP Definition (in Thousands) 1,041 363 319 197 n.a. Numericable Bouygues Telecom Orange SFR Iliad Through Numericable network Source: Companies, ARCEP 29
Slide 30: Numericable is the #1 Fiber Network in France
4 Numericable is the #1 Fiber Network in France Superior Coverage Advantage The Most Advanced Fiber Network in France Households as of Q4 13 (m) % Connectable Households (Departments) >40% (11) Lille 25-40% (17) 15-25% (19) 1-15% (22) Homes Homes <1% (29) Passed passed 9.9 Paris Strasbourg Triple Pl
Slide 31: Cable Delivers Superior Speed: A Future-Proof Technological Edge
5 Cable Delivers Superior Speed: A Future-Proof Technological Edge Numericable Ranks #1 in Independent Speed Tests Benchmarking Selected European Countries Download Speeds1 Average Download Speed by Country – As per Google MLAB (in Mbps) 60% #1 16.8 More cable-penetrated countries offer superior ave
Slide 32: Numericable – SFR: Perfect Complementarity of Premium Networks
6 Numericable – SFR: Perfect Complementarity of Premium Networks 10m homes passed in State-of-the-art 3G+/4G more than 1,300 cities mobile network (~40% of households) 1,200 cities covered by 4G 8.5m 3-Play homes1 (40% coverage) #1 fiber network in France ~57,000km fiber lines 5.2m fib
Slide 33: Offering Best Products and Value Proposition to Our Customers
7 Offering Best Products and Value Proposition to Our Customers Fastest Broadband Attractive Mobile Offering Premium Plans No-Frills Plans (Postpaid) (Postpaid) Broadband speeds up to Prepaid Offers 200Mbps Data Offers Leading Technology Richest Content 33
Slide 34: The Power of SFR Brand on Numericable Fiber Network
8 The Power of SFR Brand on Numericable Fiber Network Leveraging the Power of SFR Brand… …Through a Multi-Channel Distribution Network Strong Unique Distribution Fixed-Mobile Network Experience Service Client & Assistance Superior Simplified Offerings Customer Service 850+ Combined # of Shops 34
Slide 35: An Industrial Project Driving Sustainable Growth in All Market Segments
9 An Industrial Project Driving Sustainable Growth in All Market Segments Leading Pay-TV and 3P operator for residential customers with ~7 m subscribers Growth in Leverage fundamental network advantage to address growing demand for next generation B2C Fixed services (Very High Speed, convergence,
Slide 36: A Project Anchoring Strong Commitments to the French Government
10 A Project Anchoring Strong Commitments to the French Government Investment in networks and fiber is part of our DNA Investment 12m Fiber Homes by 2017 and 15m by 2020, delivering the French Government Very High Speed Plan Combination of complementary talents with no negative social impact E
Slide 37: Significant Industrial Synergies
11 A Combination Driving Strong Value Creation Through Significant Industrial Synergies Synergies Comments 2017 Run-Rate Synergies EBITDA Capex Transfer of 20-30% of SFR’s DSL customers onto Numericable network B2C Premium fiber / TV offered to SFR customers ~ €210 m ~ €90 m Commercial efforts
Slide 38: Clear Medium-Term Targets
12 We Will Drive Sustainable Growth With Clear Medium-Term Targets Medium-Term Growth Targets Fixed B2C: from 25% today to 45% (on our Very High Speed Broadband footprint) Market Share B2B: from ~20% today to 30% ARPU expansion driven by penetration of Very High Speed Broadband products ARPU
Slide 39: Summary Terms of the Transaction
13 Summary Terms of the Transaction €11.75 Bn in cash for Vivendi 32% ownership for Vivendi in the New Numericable – SFR Group Altice to retain control of the New Numericable – SFR Group New Numericable – SFR Group to remain based in Paris and listed on the Paris Euronext Stock Exchange 39
Slide 40: Numericable Group: The Future Begins Today
■Numericable Group Company presentation July 2013 “The Future Begins Today” Creating the French Champion in Very High Speed 17 March 2014 Fixed – Mobile Convergence