Optimum Communications, Inc. · NYSE:OPTU
Optimum Communications — Altice USA — IPO Roadshow (May 2018)
23 slides from Optimum Communications's IPO roadshow presentation, May 10, 2018
Slide 1: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, all statements other than statements of hi
Slide 2: Altice USA Q1 2018 Summary Review
Altice USA Q1 2018 Summary Review 1.2% revenue growth, 4.0% Adjusted EBITDA growth and 5.4% OpFCF1 growth Optimum Residential trends impacted by Starz dispute and multiple snowstorms; Suddenlink Residential trends strengthening, particularly video subscribers Solid 4.3% Business Services revenue gro
Slide 3: Revenue Growth
Revenue Growth Revenue growth across Residential, Business Services, and Advertising Q1-18 vs. Q1-17 Components of Q1 2018 revenue growth ($m) Altice USA: +1.2% YoY Optimum +0.6% YoY – impacted by Starz dispute, multiple storms & delay of rate event Suddenlink +3.4% YoY – improved customer trends +1
Slide 4: Residential Trends
Residential Trends Continued positive ARPU trends; Q1-18 Optimum customer headwinds Q1-18 vs. Q1-17 Components of Q1 2018 customer and ARPU trends Residential customer relationships ARPU per unique customer Altice USA unique Residential customer relationships stable YoY. Net additions of +8k QoQ in
Slide 5: Residential Trends: Suddenlink strengthening; Optimum impacted
Residential Trends Suddenlink strengthening; Optimum Starz dispute and storms impact in Q1-18 Residential pay TV net adds Key points ('000) Suddenlink trends improving driven by more focused marketing and improved content lineup with Viacom addition in Q4-17; all ahead of Altice One launch Optimum t
Slide 6: Altice One Successful Launch
Altice One Successful Launch Expanding Altice One entertainment service across Altice USA footprint “The Grand Central of Entertainment” Initial launch success Expanding rollout and successful features • Suddenlink soft launched Q2 2018, expanding across footprint during Q3 >100k • Ö Altice One cust
Slide 7: Business Services
Business Services Solid business services revenue growth Altice USA Business Services revenue growth Business Services highlights ($m) +4.3% YoY • Overall Business Services revenue growth +4.3% YoY boosted by strength in Enterprise & Carrier segment, partly offset by slower SMB growth with delay in
Slide 8: Network Upgrades to Enhance Broadband Service
Network Upgrades to Enhance Broadband Service Focus on quality of broadband service and cost efficiencies as well as boosting speeds Initial network upgrades completed and future upgrades underway New fiber (FTTH) all-IP network rollout underway • Digitalization of legacy cable network and plant / C
Slide 9: Differentiated Investment in Mobile and Billing System
Differentiated Investment in Mobile and Billing System Innovative new services, better customer service and further cost efficiencies Network preparation for full MVNO services commenced Integration of OSS / BSS platforms in 2H 2018 • • One fully integrated billing system with cost efficiencies Core
Slide 10: Advertising
Advertising Content and advertising initiatives contribute to Q1 growth Introducing : Next generation advertising platform Q1 2018 advertising and content highlights • • Targeted multi-screen platform 5.1% YoY revenue growth driven by dramatic growth in digital, offsetting softness in traditional li
Slide 11: Margin Progression
Margin Progression Substantially improved margins and cash flow Altice USA margins 1 (%) 31.0% • Continued YoY margin improvement 29.8% 23.9% • Dynamic and simplified organization with significant operating efficiencies • 42.1% 6.4% YoY increase in programming expense per video customer 41.0% 33.6%
Slide 12: Capex Profile
Capex Profile Significant investment in infrastructure and new customer premise equipment Altice USA cash capex Major capital projects continuing in 2018 ($m) • Network infrastructure capex to increase related to commencing fiber (FTTH) and MVNO network rollouts 257 258 Business Services 34 • 41 CPE
Slide 13: Free Cash Flow Generation
Free Cash Flow Generation FCF growth to accelerate with revenue growth Q1 2018 Free Cash Flow (FCF) and net change in cash bridge Strong FCF to drive deleveraging ($m) • $173m of FCF in Q1 2018 reducing net debt • Higher cash interest in Q1 and Q3 due to timing of coupon payments (lower in Q2 and Q4
Slide 14: Leverage, Maturity and Liquidity Analysis
1 Leverage, Maturity and Liquidity Analysis Rapid deleveraging with strong liquidity position Strong liquidity position Rapid deleveraging supporting shareholder returns Net Debt / LTM EBITDA • Reported net debt $20.6bn end-March 2018 ($22.1bn pro forma for cash dividend of $1.5bn); WACD of 6.3% 7.7
Slide 15: Debt Maturity Profile
1 Debt Maturity Profile Long-dated maturities following pro-active refinancing activity Altice USA maturity profile ($bn) 0.5 0.6 0.6 2.4 0.7 3.0 0.8 13.5 • • WAL of 6.4 years No material maturities at Suddenlink until 2021, and near-term maturities at Optimum covered by a $2.3bn revolving credit fa
Slide 16: Spin-Off Other Financial Impact and Accounting Changes
Spin-Off Other Financial Impact and Accounting Changes Corporate activity and accounting standard changes Transfer of ATS US and i24 and elimination of management fee Revenue recognition and pension expense accounting changes • • Historical figures have been adjusted following required GAAP accounti
Slide 17: FY 2018 and Medium-Term Outlook Reiterated
FY 2018 and Medium-Term Outlook Reiterated Continued revenue growth, margin expansion and cash flow growth 2018 Revenue Growth (YOY) 2018 Annual Capex Altice USA reiterates plan to expand its Adjusted EBITDA and cash flow margins over the medium-to long-term 18 • ~$1.3bn • c.2.5-3.0%
Slide 18: FY 2018 and Medium-Term Outlook Reiterated
comm EY 2018 and Medium-Term Outlook Reiterated Siaddendiinke Continued revenue growth, margin expansion and cash flow growth 2018 Reve Growth + 6.2.5:3.0% 2018 Annual Capex + ~$1.3bn Altice USA reiterates plan to expand its Adjusted EBITDA and cash flow margins over the medium- to long-term 18 alti
Slide 19: Q&A
Q&A 19 altice
Slide 20: Altice USA, Inc. Financials
Altice USA, Inc. Financials US GAAP financials (USD) 1 Optimum Suddenlink Eliminations Total Revenue 2 1,642 660 - 2,302 1,651 683 (4) 2,330 0.6% 3.4% 1.2% Optimum Suddenlink Adjusted EBITDA Margin (%) 629 315 944 41.0% 675 306 981 42.1% 7.4% (2.9%) 4.0% Optimum Suddenlink Capital expenditures Capex
Slide 21: Debt Capital Structure
1 Debt Capital Structure Per Q1 2018 pro foma for Altice USA special cash dividend Cablevision (Optimum) 1 Cequel (Suddenlink) (1) Pro forma for $1.5bn special cash dividend and refinancing of $1,050m 6.375% Senior Notes due 2020 at Suddenlink (2) Excluding management fees (3) Suddenlink RCF $350m u
Slide 22: Altice USA Separation Overview
Altice USA Separation Overview Altice USA to be structurally separated from Altice NV; both controlled by Patrick Drahi effective following completion of the separation (both approved by independent members of Altice USA Board) (1) The distribution will exclude shares indirectly owned by Altice NV t
Slide 23: Registration statement legend
Altice USA has filed a registration statement with the Securities and Exchange Commission (SEC) for the offering to which this communication relates. You should read the preliminary prospectus in that registration statement and other documents Altice USA has filed with the SEC for more complete info