Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Investor Presentation (March 2021)
26 slides from Shenandoah Telecommunications's investor presentation, March 2021
Slide 1: Shenandoah Telecommunications Company, March 2021
NASDAQ: SHEN Shenandoah Telecommunications Company March 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, regarding our business strategy, our prospects and our financial position. These statements can be
Slide 3: History of successful innovation
History of successful innovation REVENUE BY SERVICE OFFERING SHENT EL 4.0 ( ~2026) DUAL CABLE/TELCO INCUMBENT INCUMBENT CABLE COMMERCIAL FIBER 4% 23% TOW ERS 17% FTTH (GLO FIBER) 10% 3% F I XE D W I R E L E S S ( B E A M ) W IRELESS* SHENT EL 3.0 ( 2020) 43% SHENT EL 1.0 ( 1994) 2% 3% 67% 100% 23% 5
Slide 4: Integrated Fiber, Cable and Fixed Wireless Broadband Network
Integrated Fiber, Cable and Fixed Wireless Broadband Network 4
Slide 5: Unique network platform with high growth potential
Unique network platform with high growth potential TARGET PO SIT IO N Greenfield fixed wireless Incumbent Greenfield fiber overbuilder MARKET broadband overbuilder DYNAMIC MARKET Higher density tier III / IV Various, but mostly rural Low density rural T YPE markets 2020/2026 TARGET HOMES 209,000 / 2
Slide 6: Incumbent Cable metrics
Incumbent Cable metrics REVENUE GENERATING UNITS (RGUS IN THOUSANDS) BROADBAND DATA AVG REVENUE PER USER (ARPU) BROADBAND DATA PENETRATION BROADBAND DATA CHURN 6
Slide 7: Expanding competitive moat over DSL competition
Expanding competitive moat over DSL competition Recent investments and key initiatives… … have significantly improved customer experience while re-accelerating data subscriber trends NET W O RK INVEST M ENT S <25 Mbps 25 – 150 Mbps >150 Mbps $80m invested in $80 m cable network upgrade since 2017 17
Slide 8: Highly favorable competitive environment
Highly favorable competitive environment INCUM BENT CABLE FO O T PRINT DUAL - I N C UM BE NT FO O T PRINT Other None % OF INCUMBENT HOMES 33% 33% 17% 4% 4% 8% PASSED COMPETING TECHNOLGY DSL DSL DSL FTTH DSL N/A VOICE N/A DATA N/A VIDEO N/A COMPETITOR MAX MARKETED DATA 1
Slide 9: Glo Fiber metrics
Glo Fiber metrics REVENUE GENERATING UNITS (RGU) DATA AVERAGE REVENUE PER USER (ARPU) DATA PENETRATION DATA CHURN 9
Slide 10: Glo Fiber market update
Glo Fiber market update Passings Penetration Released to Target as of Sales Passings* Launch Date 12/31/2020 Harrisonburg VA 9,843 11,399 October 2019 18.6% Staunton VA 9,856 9,895 February 2020 13.8% Front Royal VA 4,237 4,933 March 2020 11.3% Winchester VA 4,716 9,957 March 2020 10.3% Salem VA 8,0
Slide 11: Beam extending broadband network reach
Beam extending broadband network reach HIG HLIG HT S 2020 O perat ing Result s since 10/5/2020 launch Exclusively licensed mid-band spectrum – Deep 2.5/3.5 GHz spectrum holdings: between 30-90MHz per market Existing relationships — with tower owners and backhaul providers due to in-house wireles
Slide 12: High growth commercial fiber business
High growth commercial fiber business PRO DUCT O VERVIEW ( % O F CO M M ERCIAL FIBER REVENUE) ANN U AL REVENUE ( $m) • Ethernet • Wave 84% • DIA • Dark Fiber • SIP • Switched 10% • VoIP LD • Managed • Bulk-Video 6% Services • Other M RR BY CUST O M ER T Y PE MID- MAR KET / ENT ERPRISE FT T T 22% 37%
Slide 13: Broadband financial highlights
Broadband financial highlights IN M ILLIO NS REVENUE ADJUSTED OIBIDA & MARGIN % 2 2 13
Slide 14: Tower financial highlights
Tower financial highlights REVENUE ADJUSTED OIBDA & MARGIN % MACRO TOWERS TENANTS See Appendix for reconciliation of Adjusted OIBDA to Operating Income. 14
Slide 15: Consolidated financial highlights
Consolidated financial highlights IN M ILLIO NS REVENUE CONSOLIDATED ADJUSTED OIBDA CAPEX SPENDING ADJUSTED OIBDA - CAPEX See Appendix for reconciliation of Adjusted OIBDA to Operating Income. 15
Slide 16: Pending Wireless Sale and Use of Proceeds Update
Pending Wireless Sale and Use of Proceeds Update T-Mobile exercised option to purchase Wireless assets operations Sales price of $1.95 billion determined through appraisal process and agreement with T-Mobile Expected timeline: Execute asset purchase agreement in the first quarter 2021 Obtain
Slide 17: Unique opportunity to invest in rural broadband with significant growth potential
Unique opportunity to invest in rural broadband with significant growth potential LEADING REG IO NAL RESIDENT IAL/S M B BRO ADBAND PRO VIDER CO NT INUED O PERAT ING HIG HLY MO MENT UM IN FAVO RABLE CO RE CO MPET IT VE RESIDENT IAL / ENVIRO NME NT SMB MARKET S EX PERIENCED MANAG EME NT AT T RACT IVE
Slide 18: Q&A
AQSHENTEL Q&A
Slide 19: Appendix
AQSHENTEL Appendix
Slide 20: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures that are not determined in accordance with US generally accepted accounting principles. These financial performance measures are not indicative of cash provided or used by operating activities an
Slide 21: 2018 Adjusted OIBDA by Segment
2018 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2018 Corporate & (in thousands) Broadband Tower Eliminations Consolidated Operating income $ 42,294 $ 5,399 $ (50,662) $ (2,969) Depreciation 35,816 2,406 5,992 44,214 Amortization 176 176 OIBDA 78,286 7,805 (44,670) 41,421 Share-based
Slide 22: 2019 Adjusted OIBDA by Segment
2019 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2019 Corporate & (in thousands) Broadband Tower Eliminations Consolidated Operating income $ 42,597 $ 6,295 $ (49,611) $ (719) Depreciation 38,093 1,976 6,244 46,313 Amortization 473 473 OIBDA 81,163 8,271 (43,367) 46,067 Share-based co
Slide 23: 2020 Adjusted OIBDA by Segment
2020 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2020 Corporate & (in thousands) Broadband Tower Eliminations Consolidated Operating income $ 40,360 $ 8,823 $ (50,330) $ (1,147) Depreciation 40,337 1,906 5,721 47,964 Amortization 739 — — 739 OIBDA 81,436 10,729 (44,609) 47,556 Share-b
Slide 24: 2021 Adjusted OIBDA Guidance
2021 Adjusted OIBDA Guidance Twelve Months Ended December 31, 2021 ($ in millions) Low High Operating income $ 7 $ 14 Depreciation and amortization 55 55 OIBDA 62 69 Share-based compensation expense 6 6 Restructuring and other 1 1 Adjusted OIBDA $ 69 $ 76 Total revenue $ 241 $ 248 Adjusted OIBDA mar
Slide 25: Adjusted OIBDA - CapEx
Adjusted OIBDA - CapEx ($ in thousands) 2018 2019 2020 2021 Guidance Adjusted OIBDA $46,166 $49,434 $57,243 $69,000 - $76,000 Less: Capital Expenditures* (56,631) (48,210) (61,321) (63,000) – (57,000) Adjusted OIBDA less incumbent CapEx (10,465) 1,224 (4,078) 6,000 – 19,000 Glo Fiber & Beam Capital
Slide 26: Broadband Average Revenue per User (ARPU)
Broadband Average Revenue per User (ARPU) Incumbent Cable 2018 2019 2020 Data Residential & SMB Revenue ($000’s) $68,019 $75,604 $85,127 Average Revenue Generating Units 71,643 80,035 90,983 Average Revenue per User (ARPU) $79.12 $78.72 $77.97 Glo Fiber 1Q20 2Q20 3Q20 4Q20 Data Residential & SMB Rev
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