Post on 11-Jan-2017
TelenetGoldman Sachs - European Leveraged Finance ConferenceConference
Renaat Berckmoes, Chief Financial Officer
L d S t b 6 2012London - September 6, 2012
Safe Harbor DisclaimerSafe Harbor Disclaimer
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.
Various statements contained in this document constitute “forward-looking statements” as that term is definedunder the U.S. Private Securities Litigation Reform Act of 1995. Words like “believe,” “anticipate,” “should,”“intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” and similar expressionsidentify these forward-looking statements related to our financial and operational outlook, dividend policy andfuture growth prospects, which involve known and unknown risks, uncertainties and other factors that may causeg p p , , your actual results, performance or achievements or industry results to be materially different from thosecontemplated, projected, forecasted, estimated or budgeted whether expressed or implied, by these forward-looking statements. These factors include: potential adverse developments with respect to our liquidity or resultsof operations; potential adverse competitive, economic or regulatory developments; our significant debtpayments and other contractual commitments; our ability to fund and execute our business plan; our ability to
h ff d b d h fl h fgenerate cash sufficient to service our debt; interest rate and currency exchange rate fluctuations; the impact ofnew business opportunities requiring significant up-front investments; our ability to attract and retain customersand increase our overall market penetration; our ability to compete against other communications and contentdistribution businesses; our ability to maintain contracts that are critical to our operations; our ability to respondadequately to technological developments; our ability to develop and maintain back-up for our critical systems;our ability to continue to design networks install facilities obtain and maintain any required governmentalour ability to continue to design networks, install facilities, obtain and maintain any required governmentallicenses or approvals and finance construction and development, in a timely manner at reasonable costs and onsatisfactory terms and conditions; our ability to have an impact upon, or to respond effectively to, new ormodified laws or regulations, pending debt exchange transactions, our ability to make value-accretiveinvestments, and our ability to sustain or increase shareholder distributions in future periods. We assume noobligation to update these forward-looking statements contained herein to reflect actual results, changes ing p g , gassumptions or changes in factors affecting these statements.
Adjusted EBITDA and Free Cash Flow are non-GAAP measures as contemplated by the U.S. Securities andExchange Commission’s Regulation G. For related definitions and reconciliations, see the Investor Relationssection of the Liberty Global Inc website (http://www lgi com) Liberty Global Inc is our controlling
2
section of the Liberty Global, Inc. website (http://www.lgi.com). Liberty Global, Inc. is our controllingshareholder.
AgendaAgenda
Who we are1
Change to capital structure and shareholder 2 Change to capital structure and shareholder remuneration policy
2
Future growth drivers3
3
A cable company with a strong gtrack record...
F ll d d bi di ti l 600 MH t k Fully upgraded, bi-directional 600 MHz network Continuous stable level of investments Active node splitting to create next-gen network
Powerful networkPowerful network 1
EuroDocsis 3.0 powered broadband products Full interactive digital HDTV platform with true VOD Active beyond cable: WiFi and mobile
Product leadership
Product leadership 2
Customer Loyalty closely measured: management reward system based on customer satisfaction levels Leading service levels through efficiency
C ti l l l l f h l ti t
Service is keyService is key 3 Continuously low levels of churn relative to peers
Strong revenue growth and significant runway ahead Sustained focus on efficiency, disciplined cost control
V t j it f it l dit b dSolid financialsSolid financials
A strong brand
4 Vast majority of capital expenditures success-based Prudent, pro-active balance sheet management
Strong, diversified management team
4
4
Balance between long track record and outside experience Great company culture, promote from within
Our peopleOur people 5
...active in one of Europe’s most attractive cable markets...
Triple-play penetrationCable penetration per household
74%69%
(Q2 2012)(2011)
65%60%
52%48%
38%
47%
16%19%
BE UK DE PT NL TNET VMED KDG¹ ZON ZIGGO
(1) Excluding the effect of the TeleColumbus acquisition, as per March, 2012
Strong historical adoption of cable services
Substitution of basic cable TV by digital TV (cable, IPTV t llit DTT) till t d t ti l f
Triple‐play penetration of 38% at June 30, 2012
Significant potential to convert remaining 33% of i l l t t l di lti l l b dl
5
IPTV, satellite, DTT) ‐ still untapped potential for migration to higher ARPU digital TV platform
Legend: BE=Belgium, UK=United Kingdom, DE=Germany, PT=Portugal, NL=The NetherlandsSource: European Commission E-Communications Household Survey, Company data
single‐play customers to leading multiple‐play bundles
... in a region with national gcharacteristics
+ 1/3rd of Brussels
Legacy Telenet NetworkInterkabel Network = acquired Oct 1, 2008
Flanders is a cohesive footprint Our franchise area covers ~2.9 million Flanders is a cohesive footprint
… a focused, regional government
… a regional culture and language
Our franchise area covers 2.9 million households (61% of Belgium)
~2.8 million homes passed with cable = ~98% reach
… a regional media environment
… a strong and growing economy
… superior GDP per capita (23% above
98% reach
~2.2 million unique customers= ~75% cable penetration
In B2B we cover the whole of Belgium
6
p p p (EU average)
In B2B, we cover the whole of Belgium and Luxembourg
A strong national competitor gversus regional cable systems
Former telco incumbent is half state- Fragmented cable industry versus Former telco incumbent is half stateowned
>80% VDSL coverage
Fragmented cable industry versus nationwide DSL and mobile operators
All cable networks are adjacent
Numéricable active in part of Brussels Belgacom TV is top 3 IPTV platform
Fixed and mobile convergence
Numéricable active in part of Brussels (approx. 180,000 homes passed)
VOO active in Wallonia(approx 1 7 million homes passed)
More than 75% market share in B2B(approx. 1.7 million homes passed)
7
Leading the cable space in terms of g(multi-) product penetration
Digital TVDigital TV FixedTelephony
FixedTelephony
32% penetration
52% penetration
BroadbandInternet
BroadbandInternet Mobile
TelephonyMobile
Telephony47%
Basic Cable TV
Basic Cable TV
75% penetration
penetration
p
Penetration rates relate to total homes passed by the Telenet network 8
But still a challengerBut still a challenger
17%
€4.0 bn €3.8 bn €0.9 bnOthers
KPN/BASE 2%
7%17%KPN/BASE 2%
20%
24%
37%Mobistar
Telenet1% 56%
Belgacom 44%
1%
70%
19%
9
Mobile Fixed data & voice TV
Source: BIPT, 2011 – Market size and market shares are based on service revenues
Cable caters for unparalleled 1 Powerful networkpservice experience 1 Powerful network
Bandwidth shared over all services
Bandwidth shared over all services
Maximum download speed
# Product – April 2012
1 Telenet Fibernet 100
2 Telenet Fibernet 60
Dedicated bandwidth per
Maximum download speed up to 30 Mbps 3 Telenet Fibernet
4 VOO A La Folie
5 Telenet Comfortnetservice
Maximum download speedup to 120 Mbps
6 VOO Passionément
7 EDPnet Newer & Faster
8 Dommel CityConnecty
9 Belgacom Favorite
10 Belgacom Intense
Video and multiple devices will make high broadband speeds relevant
Added value of cable = simultaneous services into the house
10
New devices (tablet PCs) will require ample streaming capacitySource: www.ispmonitor.be
The ISP Monitor Speed Test is an independent source for bandwidth speed comparison. The results shown above are a summary of the test results gathered by the users of the ISP Monitor software.
Deeper fiberization to retain speed 1 Powerful network
leadership position
TODAY
1 Powerful network
Telenet Service Offering
~1,400homes/
node
Optical N d
Fiberloops
Node
2015
CMTSIP Backbone
~500homes/
nodeOptical Nodes
11FiberCoax HFC (Hybrid Fiber Coax Network)
Enhancing customer value 2 Product leadershipEnhancing customer value
Customer mix H1 2011 ARPU per customer Customer mix H1 2012
(in %) (in %) (in €/month)
2 Product leadership
39%34%
53.5
72.9profile
+61%33%
38%
27%
45.4 12.8
Q2'12 1P 2P 3P
29%
38%
Single-play Dual-play Triple-play
Q2 12 1P 2P 3P
(in 000) (in €/month)
Single-play Dual-play Triple-play
Triple-play subscribers
+9%
(in 000)ARPU per unique customer
+10%
(in €/month)
752819
41.045.1
13H1 2011 H1 2012 H1 2011 H1 2012
Constant innovation 2 Product leadershipConstant innovation 2 Product leadership
InternetInternet Fibernet – up to 120 Mbps
Digital TVDigital TV Sporting, Search & Recommend, GUI
Fixed TelephonyFixed Telephony FreePhone Mobile
MobileMobile Subsidies, Homespots, competitive and MobileMobileinnovative SIM-only rate plans
BusinessBusiness A-Desk14
Telenet internet starts where 2 Internetcompetition ends
Advertized download speeds (Mbps)Internet VDSL2
Up to 25 Mbps
2 Internet
Home Internet 12
Internet ADSLUp to 12 Mbps
€25.00
Up to 25 Mbps€35.00
Basic InternetUp to 30 Mbps
€24.95
Fibernet XLUp to 120 Mbps
€64.95Home Internet 12 Up to 12 Mbps
€40.000 1206030
//15
////// //
Internet BasicUp to 6 Mbps
€25.00I t t R l
FibernetUp to 60 Mbps
€44.95
StartUp to 30 Mbps
€24.95Internet RelaxUp to 16 Mbps
€30.00Home Internet 1
Up to 1 Mbps€25 00
ComfortUp to 30 Mbps
Internet MaxUp to 16 Mbps
€40.00
€25.00
Home Internet 4Up to 4 Mbps
Up to 30 Mbps€34.05
MaxiU t 30 Mb
15(*) Prices mentioned refer to stand-alone residential broadband internet products, in € (including 21% VAT) – temporary promotions have not been reflected – prices mentioned on company websites as per July 26, 2012
Up to 4 Mbps€30.00 Up to 30 Mbps
€44.94
Increased digitalization 2 Digital TVIncreased digitalization
Digitalization rate ARPU per customer Digitalization rate
(in %) (in %) (in €/month)
2 g
46%
Digitalization rate H1 2010 profile
32%
gH1 2012
x2
54%
46%
12 1Analog TV Digital TV
68%
Analog TV Digital TV
12.1
12.1
Analog TV Digital TV
Basic access VASAnalog TV Digital TV
(in 000) Accelerated digitalization fueled by Digital TV subscribers
+17%
g ysuccessful digital TV migration campaign;
116 700 net new subscribers to our
1,2621,473
116,700 net new subscribers to our higher ARPU interactive digital TV platform in H1 2012, of which 71,300 in Q2 2012;
16
H1 2011 H1 2012Q ;
68% of cable TV customers on digital.
Sporting Telenet 2 Digital TVSporting TelenetAddition of top Belgian football resulted in 48% increase in subscribers
2 Digital TV
~183,700subscribers~183,700
subscribers
Belgian football
3 top fixtures per week, exclusive and live in HD
The best sports now
€16.15 if 3-play
€21 55
+48%yoy
5 remaining fixtures on a non-exclusive basis
Top European footballsports nowexclusively
onSportingTelenet
€21.55 if 2-play
€26.95
p p
550 fixtures per season, live
Premier League, German, Italian, Dutch and French national leagues
Telenetif 1-play
NBA Basketball
NFL American Football
Also available onAll prices are retail prices per month and including 21% VAT
17
Golf
Fixed telephony remains a reliable 2 Fixed telephonyp ycheap voice solution
(in 000) i d l h k h (*)
2 Fixed telephony
880920
Fixed telephony subscribers(in 000) Fixed telephony market share(*)
Telenet Competition
455
548
629
741 815
71% 67% 64% 61%
364455
2005 2006 2007 2008 2009 2010 2011 H1 2012
29% 33% 36% 39%
2008 2009 2010 2011
(*) Adjusted for Telenet footprint only.Source: company data, adjusted based on own estimations.
Continued penetration(**) amongst our customer base, reaching 32.2% at the end of Q2 2012;
Net new subscriber growth driven by attractive flat-fee rate plans and multiple-play growth;Net new subscriber growth driven by attractive flat fee rate plans and multiple play growth;
Introduction of FreePhone Mobile in November 2011 is expected to drive incremental RGU growth;
Sustained market share gains despite mature and intensely competitive market;
(**) Penetration as a % of homes passed across the Combined Network. Combined Network includes both Telenet Network and Telenet Partner Network.
Reliability and cheap flat-fee plans remain key advantages over mobile.
18
FreePhone tariff plans 2 Fixed telephonyFreePhone tariff plans 2 Fixed telephony
Relevance of fixed line fuelled by free FreePhone Mobile optionRelevance of fixed line fuelled by free FreePhone Mobile option
FreePhoneEurope
MOU to mobile
€20
Europe
+ Free option:FreePhone Mobile
x4
per month Q1 2011 Q1 2012
Introduction of free option FreePhone Mobile
FreePhone Europe allows customers to make the following calls (per month):
U li it d ff k ll t fi d li i B l i Unlimited offpeak calls to fixed lines in Belgium
1,000 offpeak minutes to mobile numbers in Belgium
2,000 offpeak minutes to fixed lines in Europe + Turkey + Morocco
€10 option to place 24/7 calls to fixed lines in Belgium and Europe
19
€10 option to place 24/7 calls to fixed lines in Belgium and Europe
The convergent future: 2 MobilegWiFi + mobile
2 Mobile
+ Telenet MobileTelenet MobileTelenet Hotspots / WiFi homezoneTelenet Hotspots / WiFi homezone
Telenet Hotspots: >1,200 locations (airports, train stations, hotels, highway parkings)
International coverage: >140,000 locations in 95 countries through iPass
Telenet WiFi homezone via home gatewayhome gateway
20
Launch of competitive SIM-only 2 Mobilep yrate plans
Ki KP
2 Mobile
150 minutes
King
2,000 minutes
Kong
€0.15 /min
Pay as you go
10,000 SMS
500 MB
10,000 SMS
1 GB
€0.10 /SMS
€0.10 /MB 500 MB 1 GB€0.10 /MB
€0 €70€20Stand-alone
€50 €15 For Telenetcustomers €0
Simple, transparent
No fixed contract durationNo fixed contract duration
85% of mobile consumers will be able to save money21
Telenet for Business 2 BusinessTelenet for Business 2 Business
Integration of VAS + connectivity and SmallBiz + enterprise segments create foundation for unique service portfolio
Security Solutions Security Consulting Managed ServicesValue Added Services
c-cure
segments create foundation for unique service portfolio
Integrated Hosting Housing Applications
Unified Collaboration Cloud
Carrier OfferConnectivity
hostbasketproduct portfolio
Data Internet Voice Multi-TV
Service Levels: Securitisation & Back-up Options
Fiber Coax Copper Mobile WirelessTransport
Client segment
22
targets
Delivering a superior service 3 Service is keyg
experience to our customers
A unique service experience
3 Service is key
360° Experience A unique service experiencefor our customers
TelevisionInternet
Speed leadershipthrough Fibernet
OTT market
TelevisionInternet
Platform
Richest experience & convergence
Bundles
Maximize ARPU perunique customer
23
Enhance customer loyalty 3 Service is keyEnhance customer loyalty
(in %) Continued low churn levels for all
3 Service is key
10.3%
Annualized churn(in %) Continued low churn levels for all
services compared to peers and other cable operators;
7.1%
7.1%
Q1'10 Q3'10 Q1'11 Q3'11 Q1'12
Reflects Telenet’s continued investments in customer care and focus on customer experience;
Basic cable TV Broadband internetFixed telephony
Management incentive schemes to enhance customer loyalty.
Maximum fixed
New Telecom Act
N fi d t t
Telenet
Maximum fixed contract term limited to six months as of
October 1, 2012
No fixed contract term for all major
services as of October 1, 2012
24
, October 1, 2012
And reward accordingly 3 Service is key
TOP-150
And reward accordingly 3 Service is key
Customer Loyalty
TOP 150
15%
Managerial
Operational
gskills43%
Operational and financial performance
44%
CC
2007-2009 As of 2010
Customer satisfactionCustomer
satisfactionCustomer loyaltyCustomer loyalty
25
Strong stable cash flows and 4 Solid financialssignificant operating leverage 4
% of revenue
Adjusted EBITDA(in €m)(in €m)
Revenue
Solid financials
669
7231,197 1,299 1,376
+9%
j
(*)
608
2009 2010 20112009 2010 2011
+7% CAGR
9% CAGR
2009 2010 20112009 2010 201152.6%51.5%50.7%
Free cash flow(in €m)
Accrued capital expenditures(in €m)
162
254 24231
160
+22% CAGR
Free cash flowAccrued capital expenditures
162
2009 2010 2011
318259
310
2009 2010 2011
+9% yoy
CAGR(**)
(**)
26
00 0 0 022.5%22.0%26.5% 17.6%19.6%13.5%
(*) Including approximately €8.0 million of revenue on certain premium voice and SMS content sevices, which were no longer recognized as of January 01, 2011 following a change in Belgian legislation.
(**) Excluding DTT license in 2010, 4th 3G mobile spectrum license and Belgian football rights in 2011.
(**)(**) (**)
Experienced management team 5 Our peoplep gwith long tenor across the industry
N J i d T l P i i
5 Our people
Name Joined Telenet Position
Duco Sickinghe 2001 Chief Executive Officer and Managing Director
Jan Vorstermans 2003 Chief Operating Officer
Patrick Vincent 2004 Chief Commercial Officer
Renaat Berckmoes 2001 Chief Financial Officer
Luc Machtelinckx 1999 Executive Vice President and General Counsel
Claudia Poels 2008 Senior Vice President Human Resources
Inge Smidts 2009 Senior Vice President Residential Marketing
Herbert Vanhove 2010 Senior Vice President Product Managementg
Martine Tempels 2009 Senior Vice President Telenet for Business
Ann Caluwaerts 2011 Senior Vice President Public Affairs & Media Management
Senior Vice President Strategy Investor Relations and CorporateVincent Bruyneel 2004
Senior Vice President Strategy, Investor Relations and Corporate Communications
Promoting an environment that supports a dynamic and innovative culture
27
Regulation: Timeline of wholesale
N lEuropean
of cable services
Not to scale (DD/MM/YY)
max 3
European Commission
notification RO and retail‐minus
Contract negotiationsContract
negotiations
max 3 weeks9 months (**)
Approval ofreference offer
6 months
Implementation
6 months
Preparation & submission draftreference offer
6/2013
negotiationsnegotiationsreference offer
4/9/201231/1/20121/08/2011 1/09/2011 1/5/2013 21/4/20131/11/2012
reference offer
Court of Appeal :introduction of
Launch date
Annual review by VRM
Possible suspension(*)
introduction of suspension and annulment
Possible annulment at the earliest
(*) In case suspension would not be granted to Telenet, Telenet could incur additional accrued expenditures related to preparatory IT investments for wholesale.
(**) Due to the delayed decision on the suspension, which was initially expected by April 26, 2012, the envisioned 4 month period for approval of the reference offer will be extended which subsequently affects the start of the 6 months implementation timing. 28
AgendaAgenda
Who we are1
Change to capital structure and shareholder 2 Change to capital structure and shareholder remuneration policy
2
Future growth drivers3
29
Policy changes to enhance returns to shareholders
Target range of 3 5 4 5x Net Total Debt to EBITDA(*) Target range of 3.5-4.5x Net Total Debt to EBITDA( )
maintained Objective to move to around 4.5x from c.3.5x
Higher net leverage supported by:
Net leverage to higher end of target range
1Higher net leverage supported by:
Strong cash flow generation
Stable business profile
Solid future growthSolid future growth
No significant acquisitions in the foreseeable future
Underpins future growth potentialFuture shareholder remuneration
mainly via share repurchases
2
Underpins future growth potential
Tax neutral for shareholders if in form of program (if in form of self-tender, for Belgian retail shareholders and other investors that cannot benefit from exemption or reduction, rate of the Belgian withholding tax is 21%)
Enhances flexibility for shareholder distributionsand increases FCF per share potential
Inc ease of o ne ship pe centage fo emaining
30
Increase of ownership percentage for remaining shareholders as repurchased shares will be cancelled
(*) Net leverage ratio is calculated as per the Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters’ annualized EBITDA.
Immediate actionsImmediate actions
O t i ti ti t i dditi l d bt fi i Opportunistic time to raise additional debt financing
Further improvement of long-term capital structure
Proceeds of any additional debt are intended to be used to fund a share buy-back
Incurrence of additional debt1
to fund a share buy-back
Telenet is targeting a Net Total Debt to EBITDA ratio of around 4.5x (*)
(*) Net leverage ratio is calculated as per Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans capitalized elements of indebtedness under the clientele excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters’ annualized EBITDA
Share buy-back of Voluntary conditional tender offer
Share buy back of €656.4 million via self-tender offer
2 20,673,043 shares or up to 18.2% of the share capital(**)
Offer price of €35.0 per share (***)
Majority shareholder LGI will not tender its shares Majority shareholder LGI will not tender its shares
Current €50.0 million Share Repurchase Program 2012, of which 91% has been executed, has been terminated
31
(**) Total number of shares issued by the Company including own shares currently held by the Company. These treasury shares represent 0.76% of the total number of shares.
(***) To be adjusted downwards by the gross amount of any distributions prior to the closing of the tender offer (including the €3.25 per share to be paid on August 31, 2012 pursuant to the capital decrease approved by the extraordinary shareholders’ meeting on April 25, 2012).
Details about share repurchase plan via self-tender offer
Share buy-back enhances flexibility for shareholder distributions and increases FCF per share potential
However, shareholders with focus on cash only returns can opt for voluntary tender offer
Purpose
for voluntary tender offer
Self-tender in accordance with the Belgian tender offer rules for a Form
Self tender in accordance with the Belgian tender offer rules for a maximum of 20,673,043 shares, or 18.2% of the share capital of TGH NV (*), at a price of €35.0 per share (to be adjusted downwards by the gross amount of any distributions prior to the closing of the tender offer, including the €3.25 per share capital return to be paid on August 31, 2012)
LGI, Telenet’s majority shareholder, would not tender any shares in the tender offer, but reserves its position concerning tendering in possible future repurchase programs. (**)
Each shareholder would be able to tender approximately Each shareholder would be able to tender approximately 37% of the shares it owns and tender additional shares by way of a pro ration mechanism (to the extent the tender offer is under-subscribed)
32(*) Total number of shares issued by the Company including own shares currently held by the Company. These treasury shares represent 0.76% of the
total number of shares. (**) If the maximum number of shares is tendered and subsequently cancelled, LGI’s shareholding in Telenet would increase from 50.04% to 61.18%
of the share capital of Telenet and to 61.75% if treasury shares are not counted.
Leverage to higher end of range while i t i i t d l itmaintaining strong deleverage capacity
Leverage ratio (1)Pro Forma Net Total Debt/EBITDA (*) Pro Forma deleverage capacity (**)
4
5
66.25x 6.0x
Leverage threshold 3.5-4.5x 4
5
6
CONCEPTUAL
0
1
2
3
Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 120
1
2
3
2012 2013 2014 2015
-1.0x-1.5x
Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12
Senior Credit Facility EBITDA Covenant
Pro-forma2012 2013 2014 2015
Net Debt / L2QA EBITDA
Leverage ratio to increase to around 4.4x (pro-forma Q3’12) from 3.1x (Q2’12)
Reflects planned €3.25 per share capital reduction (€369.2 million in aggregate) and proposed €656.4 million share buy-back
Telenet maintains strong autonomous deleverage capacity Assuming all Free Cash Flow would be used for debt repayments, leverage would
decrease by ~1.0x by 2014 and by ~1.5x by 2015
33
(*) Calculated as per Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters’ annualized EBITDA.
(**) Conceptual, assuming that all FCF will be used to repay existing debt instruments. FCF based on Bloomberg consensus estimates as of Aug 7, 2012 that do not reflect management projections and are included for informational purposes. The Company takes no responsibility for the accuracy of such data.
Balanced debt profile remains unchangedBalanced debt profile remains unchanged
(in €m)Debt profile (committed)
(in €m)Pro-forma debt profile
(estimated amounts and maturities post transaction)
500
400799
500
400799
450500
100300
431175
158
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
TL M TL N TL O TL P TL Q TL R TL T Revolver
500
100300
431175
158 450250
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
TL M TL N TL O TL P TL Q TL R TL T Revolver New issuanceTL M TL N TL O TL P TL Q TL R TL T Revolver
New issuance of €700 million equivalent, of which €450 million 10Yr
Average maturity of ~7 years
No debt repayments before 2016 equivalent, of which €450 million 10Yr Senior Secured Notes at 6.25% and €250 million 12Yr Senior Secured Notes at 6.75%
Further extends average maturity
No debt repayments before 2016
34
Further extends average maturity
Enhanced shareholder return for 2012Enhanced shareholder return for 2012
Initial shareholder return 2012
€1 00 per share
Amended shareholder return 2012
€1 00 per shareRegular dividend
€1.00 per share
(paid May 10)
€1.00 per share
(paid May 10)
Capital reduction€3.25 per share
(to be paid Aug 31)
€3.25 per share
(paid on Aug 31)
Share buy back €50.0m in total €702.1m in total (*)
35
(*) Of which €45.7m under the Share Repurchase Program 2012 as announced on Feb 16, 2012 and terminated on August 11, 2012.
AgendaAgenda
Who we are1
Change to capital structure and shareholder 2 Change to capital structure and shareholder remuneration policy
2
Future growth drivers3
36
FY 2012 outlook reconfirmedFY 2012 outlook reconfirmedFY 2012 will be at least at top end of outlook
Revenue growth Top line and Adjusted EBITDA growth will
be higher in H1 relative to H2 2012; We will no longer benefit from favorable
5% – 6%
(~€1,445m – €1,459m)
Adjusted EBITDA growth
gimpact from price increases and launch of Sporting Telenet both happened in Q3 2011;
Strong continued underlying growth in H2 fueled by digital TV broadband and
( , , )
5% – 6%growth
Accrued
fueled by digital TV, broadband and mobile.
~76% success-based; Higher spending on set-top boxes and
(~€760m – €767m)
22% – 23%Accrued Capital Expenditures (1)
Higher spending on set top boxes and customer installations, in line with expected RGU growth, and Pulsar.
Solid and sustainable Free Cash Flow
(~€318m – €335m)
Free Cash Flow (2)
Solid and sustainable Free Cash Flowgeneration despite higher cash paymentsfor Belgian football rights and higher cash interest expenses,.
Stable
(1) Represents accrued capital expenditures. Accrued capital expenditures are defined as additions to property, equipment and intangible assets, including additions from capital leases and other financing arrangements, as reported in the Company’s statement of financial position on an accrued basis.
(2) Free Cash Flow is defined as net cash provided by the operating activities of Telenet’s continuing operations less (i) purchases of property and equipment and purchases of intangibles of its continuing operations, (ii) principal payments on vendor financing obligations, and (iii) principal payments on capital leases (exclusive of network-related leases), each as reported in the Company’s consolidated statement of cash flows. Free Cash Flow is an additional measure used by management to demonstrate the Company’s ability to service debt and fund new investment opportunities and should not replace the measures in accordance with EU GAAP as an indicator of the Company’s performance, but rather should be used in conjunction with the most directly comparable EU GAAP measure.
37
Future growth drivers
1 2Broadband penetration TV subscribers
Future growth drivers
Inter-Inter- Digital Digital 95%
Flanders
+19% 32%
TV subscribers
netnet TVTV80%
2011 2015 (Est)
68%
43
2011 2015 (Est)Digital Analog
Mobile SIMs per Business growth
B2BB2BM bilM bil
13%
Mobile SIMs per cable customer
Business growthopportunities
Legacy business SmallBizzB2BB2BMobileMobile
87%
Telenet Mobile Other mobile provider
HostingSecurity
Cloud Video services
Bizz
MLE
Telenet Mobile Other mobile provider
38
Strong fundamentals to deliver long-term h h ld l
Convert 62% of 1P and 2P Continued investments in
shareholder value
1 2customers to triple play
Repositioning in mobile and quadplay enhancing ARPU
Broadband market growth
Continued investments in fixed network (Pulsar node splitting project)
Maintain leadership position on broadband speed and Future
thFuture
th
Invest and maintain
Invest and maintain Broadband market growth
from c.80% now to c.95% by 2015
Convert 32% remaining analog TV base to digital
interactive digital TV platform
Strong focus on customer excellence and loyalty
growthgrowth leadership position
leadership position
Significant availability of Balanced revenue mix 43
Significant availability of cash at 4.5x leverage
Enhanced flexibility for long-term shareholder distributions
Balanced revenue mix underlines defensive characteristics
Solid EBITDA margins and Free Cash Flow generation
Strong share-Strong share-Sound
fi i l Sound
fi i l Stable leverage target of
~4.5x projects attractive and recurring shareholder distributions
Free Cash Flow generation
No debt maturities before 2016, average maturity around 7 years
Interest risks fully hedged
holder potential
holder potential
financial profile
financial profile
Interest risks fully hedged
39
And long-term strategy
L d hi
And long term strategy
Network Leading cable network
Fiber closer to the homes
Leadership
ff
Service Layer Aggregate services
All-IP
Differentiate
E ll
Customer Competitive, simple and rational
Top leadership commitment for
Excellence
40
ThankThankyouyou.
TelenetLiersesteenweg 42800 Mechelen Belgium
Vincent BruyneelSenior Vice President Strategy, Investor Relations and Corporate Communications
Rob GoyensDirector Investor Relationsand Strategic Planning2800 Mechelen, Belgium
investors.telenet.be
Relations and Corporate Communications + 32 (0)15 33 56 96vincent.bruyneel@staff.telenet.be
and Strategic Planning+ 32 (0)15 33 30 54rob.goyens@staff.telenet.be