Altice SA — FY2014 Earnings Presentation
37 slides from Altice SA's earnings presentation, Mar 5, 2015
Slide 1: Full Year 2014 Results
Full Year 2014 Results March 5, 2015 1
Slide 2: Disclaimer
DISCLAIMER 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 Group”) or the solicit
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
Slide 4: FY & Q4 2014 Results - Highlights
Altice SA FY & Q4 2014 Results - Highlights Pro forma Financials1 Recent Strategic Initiatives Liquidity & Capital • Revenue down 4.6% to €13,464m • Closing of acquisition of SFR • Altice SA and Altice International primarily due to repricing of French €5.7bn debt issue completed to • Closing of acq
Slide 5: Key Operational Highlights
Altice SA Key Operational Highlights Altice International Altice France / Numericable-SFR Israel France • Strong triple-play and hi-speed broadband growth • Growing UMTS mobile service revenue • Synergies are already being implemented through 15 • Intense price competition continues in Mobile market
Slide 6: Acquisition of Portugal Telecom – a Leading Integrated Service Provider
Strategic Initiatives Acquisition of Portugal Telecom – a Leading Integrated Service Provider Portugal Telecom Acquisition Price / Funding • Enterprise value of €7.4bn on cash and debt-free basis with €500m earnout Residential Mobile B2B and €1.3bn purchase price adjustment • €5.6bn cash considerati
Slide 7: Enhancement of Altice's Geographic Mix
Enhancement of Altice’s Geographic Mix The acquisition of PT Portugal enhances Altice’s business profile through increased scale, higher exposure to Western Europe and the addition of high quality network infrastructure with cable-like characteristics 2014 Revenue Pre PT Portugal 2014 Revenue PF PT
Slide 8: 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 2014 vs. 2013 (EBITDA Margin % pts) 2014 Altice France EBITDA Margin is much Lower than Peers 10.1
Slide 9: Acquisition of 20% stake in Numericable-SFR from Vivendi
Strategic Initiatives Acquisition of 20% stake in Numericable-SFR from Vivendi Transaction Rationale Funding VIVENDI 20% STAKE • Transaction accretive for Numericable-SFR and Altice shareholders as purchase at €40 per share is made at significant discount to the market price • Removal of €750 millio
Slide 10: Operational Review
PIVULTOETI CQO Operational Review
Slide 11: France FY & Q4 2014 Highlights
France FY & Q4 2014 Highlights Synergies implementation plan on track through 15 dedicated projects Ambitious Fiber & 4G roll-out plan Strong momentum in Fiber since launch of Wholesale offer at SFR in November 2014 Mobile & Fixed Business update 11
Slide 12: Delivering the synergies through dedicated projects
France Delivering the synergies through 15 dedicated projects FIRST Synergies Comments LAUNCHED RESULTS COMPLETED Simplify range of offers and brand strategy a a c Increase usage of fiber network a a c B2C Optimise client relationship management a c c Improve reach of distribution network nationally
Slide 13: Fiber & 4G Roll-out Momentum
France Fiber & 4G Roll-out Momentum N°1 50% 6.4m 33% 5.6m 30% Q4-13 Q4-14 Q2-14 Q3-14 Q4-14 15% growth in Fiber Homes Passed in 2014 20% pts increase in 4G coverage in H2 2014 Clear leader in Fiber with 12m homes passed target by end 2017 and 15m by end 2020 13
Slide 14: Strong Growth Momentum in Fiber since November 2014
France Strong Growth Momentum in Fiber since November 2014 Weekly Client Gross Adds (‘000) 15 13 11 9 7 5 3 1 S 46 S 47 S 48 S 49 S 50 S 51 S 52 S1 S2 S3 S4 S5 S6 S7 Numericable + SFR Numericable (previous year) Numericable-SFR fiber Gross Adds are 2.5x higher than Numericable stand alone 14
Slide 15: France B2C Fixed
France B2C Fixed Fixed Customers in 000’s ARPU in € Total ADSL Cable + fiber Total ADSL Cable = 6,582 6,577 32.6 32.6 = 1,480 1,547 4.5% 41.3 41.0 (0.7%) 5,102 5,030 (1.4%) 34.3 34.1 (0.6%) Q4-13 Q4-14 FY 13 FY 14 45.2% MultiPack 50.2% Stable customer base and ARPU with growing cable/fiber compensat
Slide 16: France B2C Mobile
France B2C Mobile Mobile Customers in 000’s ARPU in € Total Base Postpaid Prepaid Blended Postpaid Prepaid 17,037 16,238 (4.7%) 29.0 26.6 (8.3%) 3,780 3,234 (14%) 8.0 7.4 (7.5%) 13,257 13,004 (1.9%) 23.9 22.5 (5.9%) Q4-13 Q4-14 FY 13 FY 14 77.8% Postpaid 80.1% B2C Mobile business declined in 2014 bu
Slide 17: France B2B Mobile & Wholesale
France B2B Mobile & Wholesale B2B Mobile subscribers in 000’s White Label customers in 000’s Total M2M Total fiber 6,701 8.3% 974 1,007 3.4% 6,190 3,615 4,226 363 364 17% 0.3% Q4-13 Q4-14 Q4-13 Q4-14 Growth in B2B Mobile thanks to strong M2M Sales and positive growth in White Label 17
Slide 18: Financial Review
PIVULTOETI CQO Financial Review
Slide 19: France Key Financials
France Key Financials Revenue Adjusted EBITDA EBITDA (€m) B2C B2B Wholesale 28.9% 27.1% Margin (€m) 12,039 11,436 1,418 1,325 2,365 2,223 3,485 3,100 8,256 7,888 FY-13 FY-14 FY-13 FY-14 Capex EBITDA - Capex (€m) (€m) 1930 1,555 1,319 1781 FY-13 FY-14 FY-13 FY-14 1 Proforma 2013 numbers previously re
Slide 20: France Financials – Proforma CAPEX
France Financials – Proforma CAPEX FY 2013 FY 2014 20% 21% 50% 51% 30% 28% 1,930 M€ 1,781 M€ 16.0 % of revenue 15.6 % of revenue Maintenance Customer Acquisition Network Upgrade Numericable-SFR spent half of its capex on network renovation and upgrade in 2013 & 2014 20
Slide 21: France Financials – Consolidated Debt
France Financials – Consolidated Debt Debt and leverage 2014 Net leverage (PF LTM EBITDA) 3.6x Net leverage (PF LTM EBITDA) including €350m of synergies 3.25x (1) With a 0.75% floor on both EURIBOR and LIBOR (2) Gross debt revaluation compensated by the MtoM of the FX elements of the current derivat
Slide 22: Altice International Operational Review
Altice International Operational Review 22
Slide 23: Israel – Cable
Israel – Cable Improving mix but customer growth affected by customer service Customer losses affected by customer service Improving broadband mix Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Broadband subs: <30Mb -8 -12 -17 73% -20 -24 52% 31% Broadband subs: 30Mb+ (‘000s) Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-1
Slide 24: Israel – Mobile
Israel – Mobile UMTS service revenue up 5% UMTS sub growth continues UMTS Service revenue growth (‘000s / YoY growth %) (NISm) 889 932 974 +20% 810 848 746 802 693 +35% 592 641 123 127 130 133 129 +5% 218 207 196 186 172 71 -21% 63 59 57 50 -30% 41 29 26 36 39 -5% Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q4-13
Slide 25: Israel – Financials
Israel – Financials EBITDA growth continues despite revenue pressure EBITDA growth Improving Cost Base • EBITDA growth impacted by : 45.9% • Decreasing costs mainly in headcount (reduced to 2,318 in Q4) and significant savings from new mobile +2.2 pts EBITDA roaming agreement Margin 43.7% • Increasi
Slide 26: Dominican Republic – Operations
Dominican Republic – Operations Strong postpaid and cable subscribers growth Strong Mobile postpaid sub growth Strong 3P sub growth (‘000s) (‘000s) 3 610 3 574 Postpai 643 +13% 728 d 100.7% 17 Prepaid 2 967 2 846 8 Q4-13 Q4-14 Q4-13 Q4-14 Continued growth Cable ARPU growth • Continued prepaid to pos
Slide 27: Dominican Republic – Financials
Dominican Republic – Financials Strong EBITDA growth through cost restructuring and synergies Revenue growth Strong EBITDA and margin growth 8 688 8 768 47.9% 1 213 5.4% 1 279 B2B +14.1pts EBITDA 1 259 1.6% 1 279 Margin 33.8% Cable Mobile 4 198 43% 6 216 (0.1%) 6 210 2 934 (DOPm) (DOPm) Q4-13 Q4-14
Slide 28: Altice SA Financial Review
Altice SA Financial Review 28
Slide 29: Pro Forma Consolidated Financials
Altice SA Pro Forma Consolidated Financials Reported Constant €m FY-13 FY-14 Growth Currency Growth International 2 070 2 028 (2.1%) (1.8%) Revenue France 12 039 11 436 (5.0%) - Total 14 109 13 464 (4.6%) (4.5%) International 803 936 17% 17% Margin (%) 38.8% 46.2% +7.4pp - France 3 485 3 098 (11%) -
Slide 30: Pro Forma Consolidated Revenue
Altice SA Pro Forma Consolidated Revenue Reported Constant Currency €m FY-13 FY-14 Growth Growth France 12 039 11 436 (5.0%) - Israel 882 857 (2.8%) (3.8%) Dominican Republic 609 607 (0.4%) 2.2% French Overseas Territories 224 234 4.5% - Portugal 210 183 (13%) - Benelux 71 76 7.1% - Other 75 71 (5.6
Slide 31: Pro Forma Consolidated EBITDA
Altice SA Pro Forma Consolidated EBITDA Reported Constant Currency €m FY-13 FY-14 Growth Growth France 3 485 3 098 (11%) - Israel 363 412 13% 12% Dominican Republic 223 283 27% 30% French Overseas Territories 85 106 25% - Portugal 58 58 (1.0%) - Benelux 45 51 14% - Other 29 26 (11%) - Sub-Total 4 28
Slide 32: Pro Forma Consolidated Capex
Altice SA Pro Forma Consolidated Capex Reported Constant Currency €m FY-13 FY-14 Growth Growth France 1 930 1 781 (7.7%) - Israel 209 225 7.6% 6.5% Dominican Republic 90 69 (23%) (21%) French Overseas Territories 36 49 36% - Portugal 24 24 1.5% - Benelux 23 19 (16%) - Other 22 37 67% 66% Total 2 334
Slide 33: Group Net Debt
Group Net Debt Q4-14 Actual Pro Forma for PT Altice SA Consolidated Altice SA Consolidated Gross Debt: €19.8bn Gross Debt: €25.5bn Total Cash €1.6bn Total Cash €1.6bn Total Net Debt: €18.2bn Total Net Debt: €24.0bn Undrawn RCF €1.4bn Undrawn RCF €1.6bn Altice SA Altice SA Gross Debt: €4.2bn Gross De
Slide 34: Guidance & Outlook
Guidance & Outlook 2015 Guidance will be disclosed at Q1 Results for both Altice and Numericable-SFR Q1 Results will be released on May 12th 2015 FY Accounts and notes will be available in next two weeks 34
Slide 35: Q&A
Q&A 35
Slide 36: Appendix
Appendix 36
Slide 37: Altice SA Proforma Net Leverage Reconciliation
Altice SA Proforma Net Leverage Reconciliation PF (EURm) PT Transaction Debt Net Debt ASA Consolidated 23 975 LTM EBITDA ASA Consolidated 4 009 LTM Q3-14 EBITDA PT 997 Synergies AI 8 Synergies PT 100 Synergies SFR 350 LTM EBITDA inc. Synergies 5 463 Net Leverage (LTM inc. Syn.) 4,4x 37