Altice SA

Altice SA — Q1 2015 Earnings Presentation

37 slides from Altice SA's earnings presentation, May 12, 2015

  1. Slide 1: Q1 2015 Results

    Q1 2015 Results May 12, 2015 1

  2. Slide 2: Disclaimer

    DISCLAIMER NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER FINANCIAL MEASURES TO PURCHASE SECURITIES This presentation contains measures and ratios (the “Non-IFRS Measures”), including This presentation does not constitute or form part of, and should not be construed as, EBITDA and Operating Free C

  3. Slide 3: Speakers

    SPEAKERS ALTICE & NUMERICABLE-SFR Dexter Goei, Dennis Okhuijsen, Eric Denoyer, Thierry Lemaitre, CEO Altice CFO Altice CEO Numericable-SFR CFO Numericable-SFR 3

  4. Slide 4: Altice SA Q1 2015 Results - Highlights

    ALTICE SA Q1 2015 RESULTS - HIGHLIGHTS Pro forma Financials1 Recent Strategic Initiatives Liquidity & Capital Revenue down 3.3% to €3,263m split Approval received by the European Altice SA and Altice International between France down 4.7% and Commission on Acquisition by Altice €5.7bn debt issue com

  5. Slide 5: Key Operational Highlights

    ALTICE SA KEY OPERATIONAL HIGHLIGHTS Altice France / Numericable-SFR Altice International France Dominican Republic • Strong EBITDA growth of 48% and 11.9%pts EBITDA margin • Clear market leader in Fiber & accelerating investment in 4G+ expansion to 52.5% and Fiber • 11% post paid subscriber growth

  6. Slide 6: Operational Review

    GROUPE numericable:.. Operational Review BUSINESS TEAM letel i bor ® > telindus

  7. Slide 7: France Q1 2015 Highlights

    FRANCE Q1 2015 HIGHLIGHTS  Clear market leader in Fiber & accelerating investment in 4G+ and Fiber  Marketing focused on high end customers and 4P convergence  Growing Fixed ARPU  Postpaid Mobile ARPU Stabilisation  Synergies larger than announced  EBITDA Mid-term target 45%  Significant dele

  8. Slide 8: Clear Market Leader in Fiber

    CLEAR MARKET LEADER IN FIBER CONNECTABLE FIBER HOMES & FIBER CUSTOMERS Largest Fiber footprint (1) Largest Fiber customer base Fiber Homes Passed at end Q1 2015 (millions) Fiber Customer Base at end of Q1 2015 (000’s) 6.7 1595 3.9 638 378 1.5 0.8 95 (1) Source: Q4 2014 estimates for Free, Q4 2014 pu

  9. Slide 9: Our Leading National Infrastructure: Fiber & 4G Roll-out Momentum

    FRANCE OUR LEADING NATIONAL INFRASTRUCTURE : 100M FIBER & 4G ROLL-OUT MOMENTUM N°1 99% +0.3m in 15m +17%in Q1-15 Q1-15 90% 12m 70% 7.7m 50% 6.7m Q1-15 2015 2017 2020 Q1-15 2015 2017 2020 Clear leader in fiber with ambitious targets Runway for more fiber quadruple play customers 9

  10. Slide 10: Focusing on High End and Quadruple Play Convergence

    FRANCE FOCUSING ON HIGH END AND QUADRUPLE PLAY CONVERGENCE Fiber for Students / Low Content iStart RED Fibre 29€99 29€99 Fiber High End Starter Power Power + Starter Power Power + 39€99 48€99 57€99 39€99 48€99 57€99 Mobile* Starter Power Premium Starter Power Premium 9€99 33€99 69€99 9€99 33€99 69€9

  11. Slide 11: Strong Growth Momentum in Fiber Take-up

    FRANCE STRONG GROWTH MOMENTUM IN FIBER TAKE-UP Monthly Client Nets Adds (‘000) Fiber Net Adds since December 2014 : +58k (vs 15k in previous year) +19 +16 +13 +10 +5 +5 +4 +1 2014-12 2015-01 2015-02 2015-03 Numericable + SFR Numericable + SFR (previous year) Fiber Net Adds 4x higher than previous ye

  12. Slide 12: France B2C Fixed – Growing ARPU

    FRANCE B2C FIXED – GROWING ARPU Fixed Customers in 000’s ARPU in € ADSL Fiber Total FTTH Cable ADSL Total 34.0 34.0 34.3 0.9% (1.6%) 6,623 6,577 6,520 32.2 32.6 32.5 0.9% 1,494 1,547 1,595 6.7% 41.6 41.0 41.1 (1.2%) 5,129 5,030 4,925 (4.0%) 30.2 28.5 34.2 13% Q1-14 Q4-14 Q1-15 YoY Q1-14 Q4-14 Q1-15

  13. Slide 13: France B2C Mobile – Stabilisation in Postpaid

    FRANCE B2C MOBILE – STABILISATION IN POSTPAID Mobile Customers in 000’s ARPU in € Postpaid Prepaid Total Base Prepaid Postpaid Blended 16,769 (5.7%) 22.6 22.1 21.8 (3.5%) 16,238 15,816 3,627 3,234 26.9 25.9 25.5 (5.2%) 2,956 (19%) 13,141 13,004 12,860 (2.1%) 7.6 7.2 6.9 (9.2%) Q1-14 Q4-14 Q1-15 YoY

  14. Slide 14: Positive ARPU Dynamics from New Customers

    FRANCE POSITIVE ARPU DYNAMICS FROM NEW CUSTOMERS IN BOTH FIXED & MOBILE Postpaid Mobile Fixed 20.2€ ARPU 20.1€ ARPU 29.4€ ARPU 29.5€ ARPU Total(1) Total Total Total 25.9€ 25.5€ 34.0€ 34.3€ 30.8€ 19.3€ 20.0€ 29.7€ Q4-14 Q1-15 Q4-14 Q1-15 Customer Base Subscription ARPU Gross Adds Subscription ARPU (1

  15. Slide 15: B2B Mobile & White Label

    FRANCE B2B MOBILE & WHITE LABEL B2B Mobile subscribers in 000’s White Label fixed customers in 000’s M2M Total fiber Total 6,701 6,678 6.0% 999 1,001 990 (0.9%) 6,298 3,739 4,226 4,357 377 391 395 17% 4.7% Q1-14 Q4-14 Q1-15 Q1-14 Q4-14 Q1-15 Growth in B2B Mobile thanks to strong M2M Sales Solid Grow

  16. Slide 16: Financial Review

    GROUPE Financial Review BUSINESS TEAM completa A bor ® > telindus

  17. Slide 17: France Key Financials

    FRANCE KEY FINANCIALS Revenue Adjusted EBITDA 1 EBITDA (€m) B2C B2B Wholesale 34.0% Margin 26.8% (€m) 2,872 (4.6%) 2,740 321 21% 328 577 558 930 1975 1854 770 Q1-14 Q1-15 Q1-14 Q1-15 Capex as % of Revenue EBITDA - Capex (€m) 14.6% (€m) 11.0% 17% 530 316 400 454 Q1-14 Q1-15 Q1-14 Q1-15 1 Adjusted EBI

  18. Slide 18: France Revenue Split

    FRANCE REVENUE SPLIT Revenue by segment (€m) (3.3%) 577 558 321 2.3% 328 1975 1854 (6.1%) Q1-14 Q1-15 B2B Wholesale B2C  B2C Fixed revenue down 1.7% yoy due to decline in customer base  B2C Mobile revenue down 8.7% yoy due to declining customer base and ARPUs, but limited negative value effect due

  19. Slide 19: Synergies Larger than Announced

    FRANCE SYNERGIES LARGER THAN ANNOUNCED Synergies Comments Key items Q1 Results Simplify range of offers and brand strategy Reorganisation of B2C a c c Increase usage of fiber network distribution and branding a c c B2C strategy under review by Optimise client relationship management a a c employee r

  20. Slide 20: Significant 20% Deleveraging in Only Months of Altice Ownership

    FRANCE SIGNIFICANT 20% DELEVERAGING IN ONLY 4 MONTHS OF ALTICE OWNERSHIP Debt and leverage Outstand. Outstand. € Million Instrument Ccy Yield Euros Yield (inc. Hedging) (Inst. Ccy) (Closing €) Cash 1 050 1 050 Debt USD Notes 5,7% 4,9% 7 775 5 623 EUR Notes 5,5% 5,5% 2 250 2 250 USD Term Loans L3M+3.

  21. Slide 21: Q1 2015 Cash Flow Bridge

    FRANCE Q1 2015 CASH FLOW BRIDGE (in €m) +930 (400) (150) +124 + 504 EBITDA Capex Interests Other Change in cash (1) Other includes Taxes, Debt repayments and drawdowns and working capital improvements 21

  22. Slide 22: Altice International Operational Review

    Altice International Operational Review 22

  23. Slide 23: Israel – Cable

    ISRAEL – CABLE IMPROVING MIX AND CUSTOMER SERVICE QUALITY Customer losses back to H1 2014 levels Improving broadband mix Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Broadband subs: <30Mb -8 -9 -12 77% -20 -24 60% 39% Broadband subs: 30Mb+ (‘000s) Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Improving mix and c

  24. Slide 24: Israel – Mobile

    ISRAEL – MOBILE UMTS SERVICE REVENUE UP 6% Mobile subscriber growth Mobile revenue growth 1 058 215 4% 224 (‘000s) 25% (NISm) 848 124 6% 131 41% 901 641 62 (30%) 43 207 (24%) 157 29 73% 50 Q1-14 Q1-15 Q1-14 Q1-15 iDEN UMTS Handset iDEN service UMTS service Other Mobile ARPU under pressure Competitiv

  25. Slide 25: Israel – Financials

    ISRAEL – FINANCIALS INVESTING FOR FUTURE CASH FLOW GROWTH Revenue EBITDA & EBITDA margin 1 021 (2.1%) 47.9% 46.2% (NISm) 999 (NISm) Cable EBITDA Mobile Margin 813 (4.1%) 780 489 (5.6%) 461 4.8% 208 218 Q1-14 Q1-15 Q1-14 Q1-15 Capex as % of Revenue Improving Cost Base 21% 36%  EBITDA impacted by dec

  26. Slide 26: Dominican Republic – Operations

    DOMINICAN REPUBLIC – OPERATIONS STRONG POSTPAID AND CABLE SUBSCRIBER GROWTH Mobile postpaid sub growth 3P sub growth & 3P penetration (‘000s) 3 706 3 699 (‘000s) 9% 17% 667 11% 742 Postpaid 107% Including subs 3 039 base clean up 2 957 Prepaid 21 of 500k 10 Q1-14 Q1-15 Q1-14 Q1-15 Continued growth C

  27. Slide 27: Dominican Republic – Financials

    DOMINICAN REPUBLIC – FINANCIALS STRONG EBITDA GROWTH THROUGH COMMERCIAL PERFORMANCE & COST STREAMLINING Revenue growth Strong EBITDA and margin growth (DOPm) 8 589 1.0% 8 6651 (DOPm) 52.5% 1 237 (3.2%) 1 197 B2B 40.6% +11.9pts 1 281 4.1% 1 333 Cable EBITDA Margin Mobile 4 481 3 506 28% 6 071 1.0% 6

  28. Slide 28: Altice SA Financial Review

    Altice SA Financial Review 28

  29. Slide 29: Pro Forma Consolidated Financials

    ALTICE SA PRO FORMA CONSOLIDATED FINANCIALS Reported Constant €m Q1-14 Q1-15 Growth Currency Growth International 502 527 4.9% (3.0%) Revenue France 2 873 2 737 (4.7%) - Total 3 375 3 263 (3.3%) (4.5%) International 219 254 16% 7.0% Margin (%) 43.7% 48.1% +4.4pp - France 770 930 21% - EBITDA Margin

  30. Slide 30: Pro Forma Consolidated Revenue

    ALTICE SA PRO FORMA CONSOLIDATED REVENUE Reported Constant Currency €m Q1-14 Q1-15 Growth Growth France 2 873 2 737 (4.7%) - Israel 213 225 5.5% (2.1%) Dominican Republic 148 169 14% 1.0% French Overseas Territories 59 57 (3.8%) - Portugal 46 39 (15%) - Benelux 18 18 (3.8%) - Other 17 19 13% 3.6% To

  31. Slide 31: Pro Forma Consolidated EBITDA

    ALTICE SA PRO FORMA CONSOLIDATED EBITDA Reported Constant Currency €m Q1-14 Q1-15 Growth Growth France 770 930 21% - Israel 102 104 1.8% (5.6%) Dominican Republic 60 89 48% 28% French Overseas Territories 23 28 20% - Portugal 15 13 (10%) - Benelux 13 13 0.7% - Other 7 8 10% 2% Sub-Total 990 1 183 20

  32. Slide 32: Pro Forma Consolidated Capex

    ALTICE SA PRO FORMA CONSOLIDATED CAPEX €m Q1-14 Q1-15 % Capex to Sales France 316 400 15% Israel 46 82 36% Dominican Republic 12 23 14% French Overseas Territories 11 10 17% Portugal 5 6 16% Benelux 4 4 25% Other 12 7 34% Total 407 531 16% • Group capex driven by continued investment in fixed and mo

  33. Slide 33: Group Liquidity and Net Debt

    GROUP LIQUIDITY AND NET DEBT Q1-15 Actual Pro Forma for PT Altice SA Consolidated Altice SA Consolidated Gross Debt: €25.7bn Gross Debt: €25.9bn Total Cash: €6.9bn Total Cash: €1.3bn Total Net Debt: €18.8bn Total Net Debt: €24.5bn Undrawn RCF €1.9bn Undrawn RCF €2.1bn Altice SA Altice SA Gross Debt:

  34. Slide 34: Guidance & Outlook

    GUIDANCE & OUTLOOK 2015 Guidance 2015 Guidance for Numericable-SFR (1) for Altice International (2) 2015 Adj EBITDA 2015 Adj EBITDA growth > 20% > €2bn 2015 EBITDA - Capex 2015 Capex to Sales €1.9bn - €2.0bn high teens area Medium term Guidance Medium term Guidance Adj EBITDA margin >45% Adj EBITDA

  35. Slide 35: MCS pumericab

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  36. Slide 36: Appendix

    Appendix 36

  37. Slide 37: Altice SA Proforma Net Leverage Reconciliation

    ALTICE SA PROFORMA NET LEVERAGE RECONCILIATION PF PT Debt (EURm) LTM LQA Net Debt ASA Consolidated 24 523 24 523 LTM EBITDA ASA Consolidated 4 201 4 706 LTM Q3-14 EBITDA PT 997 997 LTM/LQA EBITDA inc. Synergies 5 199 5 704 Synergies PT 100 100 Synergies SFR 290 290 LTM EBITDA inc. Synergies 5 588 6

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