Altice SA — Q2 2013 Earnings Presentation
27 slides from Altice SA's earnings presentation, Aug 13, 2013
Slide 1: Investors Call Presentation 2nd Quarter 2013 Results
INVESTORS CALL PRESENTATION 2nd Quarter 2013 Results August 13th , 2013
Slide 2: Safe Harbor
“Safe Harbor” NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO PURCHASE SECURITIES This presenta9on does not cons9tute or form part of, and should not be construed as, an offer or invita9on to sell securi9es of Al9ce Finco S.A. or Al9ce Financing S.A. (collec9vely the “Al9ce Issuers”) or the solic
Slide 3: Highlights
Highlights OperaGons M&A & Strategy Liquidity & Capital o Con9nued EBITDA growth o OMT and ONI o Issuance of new senior HOT Q2 vs Q1 2013 Acquisi9ons have closed bonds (Euro 250mln) o Hot triple play post June 30th and term loan (USD o New management team 1034 mln) to refinance penetra9on con9nues to
Slide 4: Combined Entities Pro Forma Key Data
Combined EnGGes Pro Forma Key Data June 30, 2013 Homes Cable RGU Churn Pay Cable Service Cellular Subs Passed Customer TV ARPU Pay TV Broadband Telephony Israel 2,262,282 1,171,802 894,248 774,148 687,834 14.8% NIS 227 760,846 Western Europe Belgium & Luxembourg 233,111 116,352 131,329 55,659 53,310
Slide 5: Q2 2013 HOT Operating Performance
Q2 2013 HOT OperaGng Performance August 12 2013 Page 5
Slide 6: 2nd Quarter 2013 Dashboard – Cable
2nd Quarter 2013 Dashboard – Cable Q2 2013 Q1 2013 Q2 13 vs. Q1 13 Q2 2012 Q2 13 vs. Q2 12 Cable Customers 1,172 1,188 (1%) 1,224 (4%) Cable RGU ('000) 2,356 2,356 (0%) 2,340 1% Cable RGU per Customer 2.01 1.98 1% 1.91 5% Cable Revenue (mnis) ¹ 842 841 0.1% 843 (0.1%) Cable ARPU per Customer (nis) 2
Slide 7: Cable Growth in RGUs driven by Triple Play services
Cable Growth in RGUs driven by Triple Play services RGU (‘000) RGU per subscriber 4.6% 5.2% 2,343 2,356 2.01 2,294 38% 2,253 1.98 34% RGU 28% 1.96 24% 1.93 3play % 192.3 1.91 187.7 ARPU 183.6 184.7 2010 2011 2012 Q2-13 Q2-‐12 Q3-‐12 Q4-‐12 Q1-‐13 Q2-‐13 • Increase in ARPU is resul9ng from highe
Slide 8: Subscribers Net Adds by Product
Subscribers Net Adds by Product Cable RGUs(#) TV RGUs (#) 1,282 1,245 Market share 61% 1,198 1,172 891 891 896 894 -‐ 2 K 2010 2011 2012 Q2-13 2010 2011 2012 Q2-13 Telephony RGUs (#) Internet RGUs (#) Market share 20% Market share 50% ¹ 688 771 774 676 768 635 752 610 + 3 K +12 K 2010 2011 2012 Q2-
Slide 9: Cable – Internet Product Exploiting bandwidth advantage
Cable – Internet Product Exploi9ng bandwidth advantage More Speed Average Bandwidth (Mega) 6% 26.2 M 9% 16% 20.6 M 15.8 M 16.9 M 40% 23% 13.1 M 63% 43% 15.2 M 9.6 M 10.4 M 8.3 M 9.0 M 40% Q2-‐12 Q3-‐12 Q4-‐12 Q1-‐13 Q2-‐13 42% 16% HOT BEZEQ 43% 20% 22% 13% Q2-‐12 Q2-‐13 Q2-‐12 Q2-‐13 • Appr
Slide 10: Second Quarter 2013 Dashboard – Mobile
Second Quarter 2013 Dashboard – Mobile UMTS Successfully Launched Q2 2013 Q1 2013 Q2 13 vs. Q1 13 Q2 2012 Q2 13 vs. Q2 12 IDEN Subs ('000) 247 276 (10%) 421 (41%) UMTS Subs ('000) 514 482 7% 142 262% TOTAL Subs ('000) 761 758 0% 563 35% Mobile Revenue -‐ Services (mnis) 185 188 (1.7%) 152 21.3% Mob
Slide 11: Hot Mobile ARPU more stable
Hot Mobile ARPU more stable Subscribers (‘000) Revenue (mnis) 233 232 228 221 766 758 761 687 191 563 514 92 116 441 482 133 137 421 371 316 162 141 325 116 276 247 95 84 142 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 IDEN UMTS Total IDEN UMTS ARPU (nis) MOU (per month/subs.) 111 10
Slide 12: Other Current Operational Topics
Other Current OperaGonal Topics 1 Transfer HOT Mobile employees (480 people) to HOT Cable offices in Yakum 2 Movie channels renegoGaGon 3 InternaGonal bandwidth capacity, new contract underway 4 ConGnued analysis on naGonal roaming cost and mobile site sharing 5 ImplementaGon of the AlGce model in net
Slide 13: Q2 2013 HOT Financial Results Performance
Q2 2013 HOT Financial Results Performance August 12 2013 Page 13
Slide 14: HOT Revenues & EBITDA
HOT Revenues & EBITDA Revenues (mnis) ¹ EBITDA (mnis) ¹ 1,032 1,057 410 191 221 372 8 841 836 442 364 (32) Q2-‐12 Q2-‐13 Q2-‐12 Q2-‐13 Cable Mobile Cable Mobile • Total Revenue grew 2.4% Q2-‐13 vs Q2-‐12, EBITDA margin reached 39% in Q2-‐13 • UMTS revenue growth is higher than decline in IDEN
Slide 15: Quarterly EBITDA Progression
Quarterly EBITDA Progression (in mNIS) 36% 37% 39% • Total EBITDA margin 33% 33% increase to 39% during TOTAL 372 355 349 399 410 Q2 Q2-‐12 Q3-‐12 Q4-‐12 Q1-‐13 Q2-‐13 • Stable Cable EBITDA 51% 52% growth with NIS 17mln 43% 44% 44% increase during Q2 Cable 364 372 370 425 442 • Mobile EBITDA is
Slide 16: Capital Expenditures
Capital Expenditures CAPEX Accrued (mnis) & as a % of Revenue CAPEX Breakdown – Q2 2013 Capitalization Other 503 of sales 7% Infrastructures 17% commission 11% 297 211 210 Info. systems 177 and Software 14% Installation & 49% 20% 28% 17% 20% Network Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 29% End-‐user equip
Slide 17: Combined Pro Forma Results Altice Group
Combined Pro Forma Results AlGce Group August 12 2013 Page 17
Slide 18: ALTICE Group Reporting
ALTICE Group ReporGng • Al9ce VII became part of the Restricted Group on July 2nd • Full repor9ng on HOT incl full MD&A Q2 ReporGng • Full repor9ng on Al9ce Financing and Al9ce Finco • Summary pro forma financial informa9on of the new Restricted Group (other than ONI) • Al9ce VII consolidated account
Slide 19: Combined Entities Pro Forma Revenue
Combined EnGGes Pro Forma Revenue in Euro mln Pro Forma Combined Revenue 2012 Q2 2012 Q2 2013 Growth LQA² Israel 846.0 210.4 223.0 6.0% 892.0 Belgium & Luxembourg 74.2 18.1 17.8 (1.7%) 71.2 Portugal 117.9 29.8 28.0 (6.0%) 112.0 Switzerland 41.9 10.8 10.6 (1.9%) 42.4 Western Europe 234.0 58.7 56.4 (3
Slide 20: Combined Entities Pro Forma Adj EBITDA
Combined EnGGes Pro Forma Adj EBITDA in Euro mln Pro Forma Combined Adjusted EBITDA 2012 Q2 2012 Q2 2013 Growth LQA² Israel 296.2 75.8 86.5 14.1% 346.0 Belgium & Luxembourg 46.9 11.0 11.0 0.0% 44.0 Portugal 34.0 8.4 11.4 35.7% 45.6 Switzerland 12.2 3.3 3.0 (9.1%) 12.0 Western Europe 93.1 22.7 25.4 1
Slide 21: Selected Key Assets Adj EBITDA minus CAPEX
Selected Key Assets Adj EBITDA minus CAPEX in Euro Mln Key Selected Assets Adjusted EBITDA minus CAPEX 2012 Q2 2012 Q2 2013 Growth LQA² % of sales Israel 18.3 (25.2) 42.0 266.7% 168.0 18.8% Belgium and Luxembourg 36.3 6.0 6.0 0.2% 24.1 33.9% 15.9 4.3 6.5 26.0 23.2% Portugal (excl ONI) 51.7% 34.8 8.1
Slide 22: Belgium and Luxembourg KPIs and Financials Q2 2013
Belgium and Luxembourg KPIs and Financials Q2 2013 KPIs and Financials Comments Growth Key KPIs 2011A 2012A Q2 2012 Q1 2013 Q2 2013 Q1 vs Q2 Q2 vs Q2 • One off revenue B2B in Homes Passed ('000) 213 233 233 233 2012 relates to Police Customer Relationships ('000) 117 120 118 116 project approx. Euro
Slide 23: Cabovisao KPIs and Financials Q2 2013
Cabovisao KPIs and Financials Q2 2013 KPIs and Financials Comments Key KPIs 2011A 2012A Q2 2012 Q1 2013 Q2 2013 Growth Q1 vs Q2 Q2 vs Q2 • Impact of Macro Homes Passed ('000) 906 906 906 906 906 environment in H1 did Customer Relationships ('000) 264 255 266 249 243 affect subscriber TV 256 245 258 2
Slide 24: OMT FOT KPIs and Financials Q2 2013
OMT FOT KPIs and Financials Q2 2013 KPIs and Financials Comments o OMT acquisi9on closed in July; adding a strong entrepreneurial management team to manage the French Overseas Territories o Integra9on plan with Le Cable on track to deliver results in H2 o Con9nued conversion to post paid subscribers
Slide 25: Pro Forma Liquidity & Leverage June 30, 2013
Pro Forma Liquidity & Leverage June 30, 2013 in Euro mln Q1 2013 Q2 2013 L2QA Total Adjusted EBITDA excluding Pro Forma Synergies 128.1 132.6 519.4 Pro forma Synergies 12.5 Es9mated ONI Annualised EBITDA 16.0 Total L2QA EBITDA including Synergies and ONI 547.9 Debt Al9ce Financing SA 2012 Senior Sec
Slide 26: Q&A
Sattice Q&A
Slide 27: Thank you
Thank you Q3 2013 Results -‐ November 12, 2013