Q1 2021 Financial Results Presentation May 27, 2021
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Q1 2021 Financial Results Presentation May 27, 2021 Strictly Confidential Disclosure regarding forward-looking statements and the presentation of certain financial information This presentation contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words “targets”, “believes”, “expects”, “aims”, “intends”, “may”, “anticipates”, “estimates”, “would”, “will”, “could”, “should” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond our control that could cause our actual performance or achievements to be materially different from future performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future strategies and the environment in which we will operate in the future. These forward-looking statements speak only as at the date of this Presentation. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based. This Presentation contains summary unaudited condensed financial information for Adria Midco B.V. and its subsidiaries for the three months ended March 31, 2021 and 2020. The statement of financial position for Adria Midco B.V. and its subsidiaries as at March 31, 2021 and as at March 31, 2020, as well as the condensed consolidated interim statements of profit or loss and cash flows for Adria Midco B.V. and its subsidiaries for the three months periods then ended have been prepared in accordance with IFRS, but have not been reviewed by our independent auditors. As a consequence, the summary condensed financial information presented is subject to potential change. If in connection with any review there is any material change to such summary condensed financial information, we intend to present a supplemental report detailing such change. Certain financial measures and ratios related thereto in this Presentation, including EBITDA, Adjusted EBITDA, Adjusted EBITDA minus capital expenditure, RGUs and ARPU (collectively, the ‘‘Non-IFRS Measures’’) are not specifically defined under IFRS or any other generally accepted accounting principles. These measures are presented here because we believe that they and similar measures are widely used in our industry as a means of evaluating a company’s operating performance and financing structure. Our management believes this information, along with comparable IFRS measures, is useful to investors because it provides a basis for measuring the operating performance in the periods presented. These measures are used in the internal management of our business, along with the most directly comparable IFRS financial measures, in evaluating the operating performance. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, and you should not consider such items as alternatives to net income (loss), operating income or any other performance measures derived in accordance with IFRS, and they may be different from similarly titled measures used by other companies. Adria Midco B.V. is providing this information voluntarily, and the material contained in this announcement is presented solely for information purposes and is not to be construed as providing investment advice. As such, it has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. None of Adria Midco B.V., or any of its directors, officers, employees, affiliates, direct or indirect shareholders, advisors or agents, accepts any liability for any direct, indirect, consequential or other loss or damage suffered by any person as a result of relying on all or any part of this information, and any liability is expressly disclaimed. 2 Agenda 01 Introduction 02 Operational review 03 Financial review 04 Mergers & Acquisitions 05 Appendices 3 United Group: Proven cable growth and sustained leadership through media The leading multi-play communications and media provider in Revenue** by category (LTM Q1 2021) South-East Europe Other revenues . LTM Q1 2021 Revenues: €1,407m Cable Pay-TV . LTM Q1 2021 Adjusted EBITDA*: €576m 4% Sale of handset and material 14% 10% United Group is a well-diversified business with leading market positions in Serbia, Croatia, Slovenia, Bosnia and Herzegovina, Montenegro, Bulgaria and Greece Broadband Internet Media 14% 13% . 8.2m households watching United Group channels . Over 3.72m homes using broadband and telecoms services, attracted by superior service and range of offering 4% Telephony Fixed-line United Group operates in a market characterized by 7% continued growth in Pay-TV and broadband that remains DTH Pay-TV underpenetrated relative to other CEE and Western European 28% 6% markets Mobile service OTT and Out-of Footprint services The Group is expanding its mobile market through organic and inorganic growth (Telemach Croatia and Vivacom acquisitions) United Group has a reputation for providing the most attractive content in its respective markets, available across all devices and formats Led by a dynamic and entrepreneurial founder with an experienced home-grown management team Large and growing integrated media business well-positioned across the media value chain Regional platform delivers strategic scale for monetisation of content investments * Adj. EBITDA figure is presented post IFRS 16 effect. 4 ** External revenue (not including Inter-segment revenue) United Group: a strong track record of growth Revenue €1,928m CAGR €1,722m Compound annual growth rates from 2015- +25% €1,407m 2020 €1,161m . Revenue: 25% €636m €742m . Adjusted EBITDA: 24% €377m €459m €518m Completed more than 100 successful FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LTM Q1 L2QA* PF acquisitions since 2000 2021 Q1 2021 L2QA** Q1 2021 Owned by funds affiliated with BC Partners, Adjusted EBITDA*** EBRD and by management €763m €690m Biggest PE / FDI investment in South Eastern €576m Europe CAGR €481m +24% First regional company to raise foreign debt €316m €261m €190m €223m First to attract investment from the EBRD €161m FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LTM Q1 L2QA* PF 2021 Q1 L2QA** 2021 Q1 2021 Outstanding track record of growth resulting from organic development and acquisitions * As reported L2QA performance of United Group. ** Pro Forma L2QA Adjusted EBITDA and Revenues includes adjustment for Forthnet acquisition contribution (Oct20), adjustment for Nova BG acquisition contribution (Oct20-Jan21) and L2QA 5 contribution for other M&A companies. *** Adj. EBITDA, LTM, L2QA and PF L2QA figures are presented post IFRS 16 effect for the periods after the implementation of IFRS 16 standard (from FY 2019 onwards). United Group’s integrated business model is a key differentiator Pan regional platform Cable and Mobile Leading integrated #1 multi-play operator media platform Large, well-invested network . 48,000km of fiber optic cable . Fully upgraded to EuroDOCSIS 3.0, 91% DOCSIS 3.1 ready (43% of the footprint) . GPON on 25% of the footprint and growing fast . XGS 10/10 Gbps speed FTTH access network to be introduced throughout the Group in 2021 Virtuous . Market leading broadband speeds (~70% of network circle of gigabit-capable) Major local producer of quality content across genres in SEE: First in the region to offer OTT (2013) growth World first internally developed content management and . Supports growth, increased choice and innovation Provides predictable carriage fees distribution system EON TV, in partnership with Google . Differentiated by excellence in customer service reflected in: Independent news – CNN / N1 partnership and Newsmax TV affiliation . Consistently high customer satisfaction scores . Low customer churn of approximately 9-10% per annum Distribution partner of choice for premium third party content such as world class sports Distribution partner of choice for premium movies from Hollywood studios WARNER, SONY, MGM Differentiation 6 Agenda 01 Introduction 02 Operational review 03 Financial review 04 Mergers & Acquisitions 05 Appendices 7 Significant growth in total RGUs driven by acquisitions of Vivacom and Forthnet RGUs +122% 10.90m 10.89m CAGR +31% 4.90m 3.61m 3.79m 3.92m 2.85m 3.15m FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Q1 2020 Q1 2021 RGUs by service +199% 4.47m TM SLO 0.60m +26% +60% TM CRO +80% 0.92 +121% +1,310% 1.48m 1.50m 1.40m -1% 1.17m 1.27m 0.56 Vivacom 0.99m 1.16m 0.87m 0.70m 2.95m 0.45m 0.13m 0.13m 0.94 0.08m Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 Broadband Fixed-line Mobile Cable Pay-TV DTH pay-TV OTT Out-of Footprint internet telephony services Successful track record of up-selling and cross-selling multi-play