Third quarter and nine month year to date FY 12/13 Results ...€¦ · Herb Hribar – CEO eircom...

Herb Hribar – CEO eircom Group

Richard Moat – CFO eircom Group

Third quarter and nine month

year to date FY 12/13

Results presentation

30th May 2013

© eircom

Disclaimer

This presentation contains information and documents which are for information purposes only. They do not constitute or form part of, and should not be construed

as an advertisement, an offer or an invitation to subscribe to or to purchase securities of eircom Finance Limited or any of its subsidiaries, holding companies and

subsidiaries of its holding companies (together the “Group”) nor are the information or documents contained thereon meant to serve as a basis for any kind of

contractual or other obligation. This presentation does not constitute a prospectus or a prospectus equivalent document.

The following information and documents are not directed at and may not be viewed or distributed to any person resident and/or domiciled in the United States of

America. By reviewing the information in this presentation you confirm that:

1. you not resident of nor domiciled in the United States of America; or

2. you are a qualified institutional buyer (“QIB”), in reliance on Rule 144A under the U.S. Securities Act of 1993, as amended ;

3. you will not distribute any of the information and documents contained thereon to any person resident and/or domiciled in the United States of America;

4. you are resident within a member state of the European Economic Area and are a qualified investor within the meaning of Directive 2003/71/EC, (the

‘‘Prospectus Directive’’) as implemented in Member States of the European Economic Area (“EEA”); and

5. you agree to the terms of this disclaimer.

This presentation is being presented to the recipient solely for informational purposes and should not be treated as giving investment advice. No specific investment

objectives, financial situation or particular needs of any recipient have been taken into consideration in connection with the preparation of this presentation.

This presentation is being presented to the recipient solely for informational purposes and should not be treated as giving investment advice. No specific investment

objectives, financial situation or particular needs of any recipient have been taken into consideration in connection with the preparation of this presentation.

2

© eircom

This presentation may include certain forward-looking statements regarding certain of the Group’s plans and its current goals, intentions, beliefs and expectations

concerning, among other things, the Group’s future results of operation, financial condition, liquidity, prospects, growth, strategies and the industries in which the

Group operates. These forward looking statements can be identified by the fact that they do not relate only to historical or current facts. Generally, but not always,

words such as ‘may,’ ‘could,’ ‘should,’ ‘will,’ ‘expect,’ ‘intend,’ ‘estimate,’ ‘anticipate,’ ‘assume,’ ‘believe,’ ‘plan,’ ‘seek,’ ‘continue,’ ‘target,’ ‘goal,’ ‘would’, or their

negative variations or similar expressions identify forward looking statements. By their nature, forward-looking statements are inherently subject to risks and

uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Group cautions you that forward-looking

statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industries

in which the Group operates may differ materially from those made in or suggested by the forward-looking statements contained in the presentation. In addition,

even if the Group’s results of operations, financial condition and liquidity and the development of the industries in which the Group operates are consistent with the

forward-looking statements contained in this presentation, those results of developments may not be indicative of results or developments in future periods.

The Group does not undertake any obligation to review, update or confirm expectations or estimates or to release publicly any revisions to any forward-looking

statements to reflect events that occur or circumstances that arise after the date of this presentation.

No warranty or representation of any kind, express or implied, is or will be made in relation to, and to the fullest extent permissible by law, no responsibility or

liability in contract, tort, or otherwise is or will be accepted by the Group any of the Group’s officers, employees, advisers or agents (together, the “Group

Representatives”) or any of their affiliates as to the accuracy, completeness or reasonableness of the information contained in this presentation, including any

opinions, forecasts or projections. Nothing in this presentation shall be deemed to constitute such a representation or warranty or to constitute a recommendation

to any person to acquire any Notes or to acquire any interest pursuant to the facilities agreement effective 11 June 2012. Any estimates and projections in this

presentation were developed solely for the use of the Group at the time at which they were prepared and for limited purposes which may not meet the

requirements or objectives of the recipient of this presentation. Nothing in this presentation should be considered to be a forecast of future profitability or financial

position and none of the information in this presentation is or is intended to be a profit forecast or profit estimate. The Group Representatives and their respective

affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage howsoever arising from any use of this presentation or

its contents or otherwise arising in connection therewith.

The Group and its advisers have not assumed any responsibility for independent verification of any of the information contained herein including, but not limited to,

any FORWARD LOOKING STATEMENTS MADE herein. In addition, the Group and its advisers assume no obligation to update or to correct any inaccuracies

which may become apparent in this presentation. Any forward looking statements speak only as at the date they are made. The Group does not undertake to

release publicly any revision to these forward looking statements to reflect events, circumstances or unanticipated events occurring after the date hereof. This

presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefings provided to the recipient by the Group and its

advisers. The recipient should be aware that any use they make of this presentation is entirely at their own risk.

This presentation has not been approved by any regulatory authority. This presentation has been prepared by, and is the sole responsibility of, the Company and

has not been independently verified.

3

Disclaimer cont.

© eircom

Highlights

Business Update

EBITDA stabilising & ahead of budget

Positive growth in mobile postpay

Managing competitor and DSP impact

eFibre launched & 4G rollout on track

Leveraging bundling opportunity

Cost transformation on track

Strengthening of senior management team

Sale of eircom PhoneWatch

High Yield Bond - €350M

Corporate Update

4

© eircom

Agenda

Business Update

Trading Q3 and 9 Months YTD FY 12/13

Corporate Update

Key Areas of Focus

Q&A

5

© eircom

We continue to invest in

a world-class network for Ireland

• State-of-the-art network

will allow the Company to

provide super-fast

broadband services

• 325,000 prem by mid May

• 600,000 prem by Dec 13

• 1.2m prem by mid-2015

– 60% of premises in

Ireland

• Spectrum acquired to

enable 4G rollout and

significant improvement to

3G coverage and speeds

• 4G launch by Sept 2013

• Vendor appointed for initial

deployment phase

• First LTE trial site live

• U900 coverage expanded

to 65% of the population

Wi-Fi

• Nationwide, and only

significant, Wi-Fi network

in Ireland, with 2,085

hotspots and a plan to

extend to

4,000 by July 14

• Offers ability to provide

customers with “Internet

Everywhere”

Mobile Fibre

6

© eircom

Superfast fibre products launched

• Commercial launch of retail and wholesale superfast fibre broadband, by An Taoiseach

• efibre offering uncongested speeds of up to 70Mb/s

• Over 325,000 premises passed

• Free upgrade for existing broadband customers

• efibre for new customers from €40 per month

Pictured above, at the eircom efibre launch, left to right; Padraig McManus (Chairman eircom), Herb Hribar (CEO eircom) and An Taoiseach Enda

Kenny (Irish Prime Minister)

7

© eircom

TV launch targeted for Autumn 2013

• TV proposition to launch in Sept 13 – combating competitive threat and making eircom the only Irish quad play provider

– eircom ambassador trials have commenced in parallel with system and end to end testing

– Customer trial in June 2013

• Service trials by eircom employees have informed proposition and pricing definition is close to completion following positive customer research

• eircom is negotiating content deals with 18 Content Providers

– 6 Content deals signed to date, negotiations on-going and on track for completion in advance of commercial launch

• A number of senior commercial roles have been appointed with experienced external recruits from the TV industry

8

© eircom

(51) (56)

(35)(24)

Dec 11 Jun 12 Dec 12 Mar 13

63%

38%

17%

France UK Ireland

(22.2)

(28.6) (28.4)

(19.2)(15.8)

Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13

No

. of A

ccess

Lo

sses '0

00

Stabilising broadband base helping

slow down fixed access churn

Broadband, 000’s of subscribers

eircom Retail broadband base stabilised in FY13...

Retail Access Lines, 000’s of subscribers (half-yearly basis)

...helping to slow down fixed access churn

eircom Wholesale broadband base continues to grow

1 Quarterly figure based on last 3 months. 2 Retail broadband and wholesale bitstream 3 Represents UPC approximate share 4 Company estimate

• Opportunity for the eircom Group to leverage bundling opportunities

Multi-play Potential: Triple-Play Penetration

of Fixed Line Broadband

1

eircom Group Broadband2, 000’s of subscribers

485 477 461 461 455

187 191 200 204 208

672 668 661 665 663

Jun 11 Dec 11 Jun 12 Dec 12 Mar 13

eircom retail eircom wholesale

9

485 477 461 461 455

224.8 255 283 304 316


eircom Cable Broadband3

4

© eircom

Key Lever Progress

Six key levers aimed

at reducing fixed line churn

4. Persistent re-contracting

• Consumer fixed broadband churn YoY rate reduction from 27% Mar 12 to 23.4%1 Mar

13

• 68.4% of our retail fixed broadband base in contract, up from 43% Mar 12

• Consumer fixed access churn YoY rate reduction from 21% to 18%

5. Retail pricing flexibility • Acceptable decisions issued by ComReg

• Retail price flexibility has enabled the use of improved value retention offers

6. Longer contracts • Longer contracts for customers on multi-product bundles launched Q3 FY13

1. Launch of efibre

• Commercial launch of high speed broadband on May 20th – speeds of up to 70mb/s

• Upgrade existing customers at no extra cost

• €40 price point for new retail customers

• Wholesale variant (VUA) starting from €17.50 standalone Broadband and €21 with voice2

2. Launch of FMC • Launched bundled proposition in Oct 12 (home phone + home broadband + mobile)

targeting fixed line base - starting from €55 per month

3. Launch of IPTV offering • eircom will launch a value-based TV bundle in Autumn 2013, establishing a unique

quad play offering in Ireland

1 Annualised rate based on YTD March 2013. 2 Subject to usage charges 10

© eircom

5146 45

4239

Jun11

Dec11

Jun12

Dec12

Mar13

49% 49% 50%55%

59%


29%

22% 23%

18%16%


2623 22

19 18

Jun11

Dec11

Jun12

Dec12

Mar13

Mobile: Strong shift to

higher postpay ARPU

Proportion of Customers on Postpay Increasing

at a Fast Rate, With Further Scope to Grow

ARPU2 in Both Segments has been Declining,

but is Showing Signs of Flattening

Postpay ARPU (€) Prepay ARPU (€)

1 Includes handsets and mobile broadband. Dec 11 and Dec 12 figures based on last six months, Jun 11 and Jun 12 figures based on full year. 2 ARPU includes mobile broadband.

Significant Improvements Achieved

in Reducing Postpay Churn...

Postpay Churn %1

...with Further Initiatives Under Way

to Improve Prepay Churn

Prepay Churn %1

% Customers on Postpay

11

19% 22%

25% 29% 31%


© eircom

Key Lever Progress

Six Key Themes Drive

Profitable Mobile Growth

1 Churn includes mobile broadband 2 soft Launch in Dec 12.

1. Shift in Customer Base to High

ARPU Postpay

• Postpay base share increased from 22% at Dec 11 to 31% at end of Mar 13

• Continuing trend of existing Customer migrations from Prepay to Postpay

• Strong Postpay customer base growth: 15k in Q3 FY13 (41k in H1 FY13)

3. Churn Reduction1

• Postpay churn 23% in Jun 12, 16% in Mar 131 (based on last three months)

• Invested to improve our churn propensity model, and our ability to then target

offers effectively

2. ARPU Stabilisation • Prepay price increases implemented in H1 FY13

• Programme of MTR reduction completes Jun 13

5. B2B Growth • Mobile launched for government / major corporates in Dec 122 to take advantage

of cross-selling opportunity

4. Fixed Mobile Convergence

(Bundles)

• Launched Oct 12 - 87% of customers new to emobile

• Further improvements: addition of fibre, TV and single billing

6. Network Enhancement

• 4G launch September 2013

• Significant improvements to 3G data speed and coverage in 2013

• 50% of UTMS 900 sites now integrated – balance will be completed by

end of June

12

© eircom

Progress

Leveraging ICT and MNS within the

eircom Business & Wholesale segments

B2B

• Successfully launched Cloud proposition

• Full launch of mobile into all B2B segments Mar

13

• Qualified for Government Mobile Procurement

Framework

• Qualified for GB Public Sector Network

Framework

Wholesale

• NGA Fibre launched on May 20th 2013

• WLR and Bitstream customer bases ahead

of plan

• Mosaic contract won and in delivery phase

13

© eircom

Cost Transformation process underway

Progress

• YoY opex savings of €24m achieved in nine months up to Mar 13

- ~€30m annualised pay savings expected from 489 exits in February 13

• Headcount reduction of 783 FTE to date

- Further 36 FTE expected before the year end

• Major Network and IT vendor support contract negotiations underway

• Outsourcing a portion of NGA installation activity

• Consolidating retail consumer and wholesale service management centres

• Significant cost savings included in recent RAN1

contract negotiation

Total savings targeted2

- €100M

1 Mobile Radio Access Network 2

Q4 FY14 run rate versus FY 12

14

© eircom

Business Update


Corporate Update

Key Areas of Focus

Q&A

15

© eircom

Trading Highlights

Q3 and 9 months YTD 2012/13

• Q3 EBITDA of €122m was €2m better

than Q2 and €5m better than forecast

• YTD EBITDA of €365m was €18m

ahead of budget

• Stabilising EBITDA – average €40.5m

in the quarter consistent with H1

average

• Strong cost control – €24m saving YTD

versus last year with full benefit of

February VL exits from April onwards

• Fixed Line losses averaging 6.5k per

month for 9 months YTD compared to

9k average last year – some uptick in

losses due to DSP and competition

• Strong growth in mobile postpay – 15k

net adds in quarter (56k YTD)

• Maintaining strong liquidity – closing

cash €243m

xx

16

© eircom

Group – Q3 Financial KPIs

• Q3 EBITDA of €122m was €2m better than previous quarter (Q2), €8m ahead of Budget and €5m ahead of Q1 Forecast

• Closing cash of €243m was €11m ahead of budget

1 Includes VL and interest charges

Based on unaudited management accounts for 3 months ended 31 March 2013

xx

17

Q3 v Budget v Budget v Prior Year v Prior Year

FY13A Better/(Worse) Better/(Worse) Better/(Worse) Better/(Worse)

€m €m % €m %

Fixed Revenue 267 (5) -2% (32) -11%

Mobile Revenue 83 (2) -2% (6) -6%

Eliminations (12) 0 0% 1 -6%

Group Revenue 338 (7) -2% (37) -10%

Cost of Sales (64) 8 11% 15 19%

Gross Profit 274 1 0% (22) 7%

% Margin 81.2%

Pay Costs (70) 4 6% 2 3%

Non Pay Costs (83) 3 4% 4 0

Operating Expenses (153) 8 5% 7 4%

Group EBITDA 122 8 7% (15) -11%

Fixed 116 7 6% (16) -12%

Mobile 6 2 47% 1 15%

Cash Capex (64) 13 17% 1 1.9%

EBITDA - Cash Capex 58 22 59% (14) -20%

Net Change in Cash1 16 43 60.9% 59 138%

Closing Cash Balance 243 11 5% (40) -14%

© eircom

Group – Year to date

March Financial KPIs

• EBITDA of €365m for the 9 months ended 31 March 2013 was €18m ahead of budget and €8m better than forecast

1 Includes VL and interest charges

Based on unaudited management accounts for 9 months ended 31 March 2013

xx

18

YTD Mar v Budget v Budget v Prior Year v Prior Year

FY13A Better/(Worse) Better/(Worse) Better/(Worse) Better/(Worse)

€m €m % €m %

Fixed Revenue 835 (7) -1% (69) -8%

Mobile Revenue 267 (3) -1% (15) -5%

Eliminations (40) 0 0% (1) 3%

Revenue 1,062 (10) -1% (86) -7%

Cost of Sales (226) 9 4% 22 9%

Gross Profit 835 (0) 0% (64) -7%

% Margin 78.7%

Pay Costs (216) 7 3% 9 4%

Non Pay Costs (254) 12 5% 15 6%

Operating Expenses (470) 19 4% 24 5%

EBITDA 365 18 5% (40) -10%

Fixed 356 13 4% (45) -11%

Mobile 9 6 189% 5 128%

Cash Capex (339) (41) -14% (190) -128%

EBITDA - Cash Capex 26 (23) -47% (230) -90%

Net Change in Cash1 (105) 12 10.1% 71 40.4%

Closing Cash Balance 243 11 4.9% (40) (14.1)%

© eircom

40 42 41 42 4036

4043 41

Jul 1

2

Aug

12

Sep

12

Oct 12

No

v 1

2

Dec 1

2

Jan 1

3

Feb

13

Mar

13

41 43 41 42 4037

40 39 42

Jul 1

2

Aug

12

Sep

12

Oct 12

No

v 1

2

Dec 1

2

Jan 1

3

Feb

13

Mar

13

56 53 51 52 51 54 5248

52

Jul 1

2

Aug

12

Sep

12

Oct 12

No

v 1

2

Dec 1

2

Jan 1

3

Feb

13

Mar

13

124 123 117 123 118 120 115107

116

Jul 1

2

Aug

12

Sep

12

Oct 12

No

v 1

2

Dec 1

2

Jan 1

3

Feb

13

Mar

13

Current Trading / Recent Developments

Commentary Actual Operating Costs (€m) Actual Revenue (€m)

• During Q3, the business has continued to

perform in line with management

expectations and trends in trading have

been broadly consistent with H1 FY13

• EBITDA has remained relatively constant

in the range €40-43m with the exception

of December (€37m) which was impacted

by seasonal mobile SAC and lower levels

of peak traffic

• For three months to March, EBITDA has

averaged €40.5 million per month -

consistent with average EBITDA of €40.5

million per month in H1

• Average Day adjusted EBITDA has

increased from €40.1m per month in H1

to 41.3m in Q3

• Continued focus on reducing operating

costs over the period – €24m savings for

9 months to Mar 13 compared with prior

year

1

Day Adjusted EBITDA2 (€m) Actual EBITDA (€m)

Average: €40.5m Average: €40.5m Average: €40.1m Average: €41.3m

1 Includes €2m corporate finance costs.

2 Day Adjusted data calculated by taking group monthly data and dividing by the number of actual days in the month and multiplying the quotient by 30.4 (which is 365

divided by 12). 19

© eircom

1,2121,106

999 964 940

496 485 461 461 455

FY10A FY11A FY12A H1 FY13 9M toMar 13

Retail Access Lines

Retail Broadband Lines7

,92

8

7,4

14 10

,15

7

11

,00

8

11

,46

3

9,3

72

7,5

13

6,1

21

7,9

01

5,1

33

4,1

80

6,3

34

5,2

99

6,0

93

7,8

12

9,1

36

De

c 1

1

Ja

n 1

2

Fe

b 1

2

Ma

r 1

2

Ap

r 1

2

Ma

y 1

2

Ju

n 1

2

Ju

l 12

Au

g 1

2

Se

p 1

2

Oct 1

2

No

v 1

2

De

c 1

2

Ja

n 1

3

Fe

b 1

3

Ma

r 1

3

Fixed Line KPIs

Commentary ARPU (€) Total Retail Lines (000’s)

Fixed Line Churn (%)

• Rate of retail fixed line losses

reduced to an average of 6,500

per month in nine months up to

Mar 13 compared to an

average of 9,000 per month in

FY11 and FY12

• Fixed line churn decreased in

H1 FY13 due to proactive

customer retention campaigns

and improved offers for existing

customers – in Q3 FY13 churn

increased due to DSP and

competitive impacts

• Retail BB share of 42% and

combined retail and wholesale

share of 66% provides solid

platform for launch of NGA in

May 2013

• ARPU has been marginally

improving since Dec 12,

contributing to relative stability

in Adjusted EBITDA

performance over the last three

months

Retail Access Line Losses1

1 Retail access line losses negatively affected over the last 3 months by government decision to reduce level of subsidy for Department of Social Protection (DSP)

customers, leading to an increase in monthly losses from this area.

40.9 41.4 39.8 38.0 38.0

18.9 18.8 17.9 16.1 16.6

FY10A FY11A FY12A H1 FY13 9M to Mar13

Retail PSTN Retail Broadband

23.3% 22.6% 21.3%

17.1% 18.3%

28.5 % 30.2 %

28.4 %

22.4% 23.4 %

FY10A FY11A FY12A H1 FY13 9M to Mar13

Consumer Access Churn (%)Consumer Broadband Churn (%)

20

© eircom

45.8 %49.0 % 49.6 %

54.7%56.4 %

30.3% 28.6%23.3%

18.3% 17.5%


Prepaid Postpaid

28.8 25.921.6 19.4 19.0

67.6

51.345.3 41.8 41.1


Prepaid Postpaid

858 789 763 735 703

143 183 249 288 303

42 59 64 63 601,043 1,031 1,076 1,076 1,066


Prepay Handsets Postpay Handsets

Mobile Broadband

Mobile KPIs

Commentary Prepaid vs. Postpaid ARPU (€) Total Handsets (000’s)

Mobile Churn (%)

• eircom has delivered market-

leading Postpay base growth in

each of the six quarters up to Dec

12

• As at end Mar 13, Postpaid

subscribers were at 303k, an

increase of 15k compared with

Dec 12, and 56k compared with

Jun 12

• Reduced rate of ARPU decline in

FY13 as MTR reductions start to

bottom out

• Postpay churn reduced

significantly due to improved

competitive offerings, focused

retention activity and improved

customer experience

• Prepay handset subscribers

declined over the period driven by

high levels of customer churn

• During quarter ended Dec 12,

eircom attained 50% of net

postpay subscriber growth in the

market

Net Postpay Subscriber Gains (000’s)1

15 1425

12 15 20 212

(13)

13

8 57 88

(8)

6

7 107 6

30

(2)

24

1 611 6

2

23

21

Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12

eircom Vodafone O2 3 Tesco Mobile

1 Derived from ComReg data December 2012. 21

© eircom

€341m €318m €296m

€146m€70m

€376m€345m €354m

€172m

€82m

€10m€727m

€663m €650m

€318m

€152m


Total Pay Costs Total Non Pay Costs Other¹

Opex Cost Breakdown FY10A - FY13

• Average monthly opex has decreased

from €54.1m in FY12 to €53.0m in H1

FY13 to €50.6m in 3 months to 31

Mar 13

• FY12 costs included c. €2.5m in

savings from 9 day fortnight which

was reversed in October 2013

• Non-pay costs decreased at (3.0)%

CAGR as overhead costs were

rationalised. Savings across Mosaic,

accommodation, sales and marketing

and bad debts and general

administration

• Headcount of 4,929 at end of Mar 13

compared with 5,444 at end of Dec 12

• Headcount reduction of 783 FTE at

year to date May (ex impact of 9DF)

• Focus on delivering accelerated cost

reductions - €100m target savings by

FY14

FY10A – FY12A CAGR: (5.4)%

1 Excludes Non Cash Pension Charge. 2 For indicative purposes includes impact of reversal of 9-day fortnight working arrangement in Oct 12 of ~450 FTE – Reported number for June 12 was 5,097 FTE

€60.5m €55.2m €54.1m

€53.0m €50.6m

Average Monthly Opex

Headcount

Total 9M to Mar 13:

€470m

2

Commentary

22

450

6,297 5,485 5,547 5,444 4,929

Jun 11 Dec 11 Jun 12 Dec 12 Mar 13FTE 9 day forthnight

© eircom

€150m

€227m

€111m

€71m

€145m

€150m

€227m

€256m

€71m

FY11A FY12A H1 FY13 3M toMar 13

Capex¹ Spectrum

Capex Breakdown FY11A - FY13

• Continued focus on growth

programmes in FY13 with acquisition

of spectrum licences (€145m), rollout

of the NGA fibre network (€62m) ,

IPTV (€7m) and Next Generation

billing (€8m)

• Capital investment programme for

FY13 is on plan, with capex of €327m

incurred for the nine months up to the

end of Mar 13 – on track to meet

capital investment targets for FY13

• FY13 and FY14 are peak years of

capex investment, with NGA rollout

and 4G largely complete by FY15.

8.9%

15.0%

35.4%

Capex % Sales2

1 Incurred capex. 2 Includes spectrum investments in H1 FY13.

Total 9M to Mar 13: €327m

21.0%

Commentary

23

© eircom

eircom Maintains Strong Cash Balance Net cash outflow of €105m in 9 months to Mar 13

Operating (€36m) Finance (€69m)

1 Other operating cashflow includes €3m WC and NCP, €(9)m deferred revenue, €(9)m tax, €9m restricted cash and €(4)m other.

31 Mar

Cash

€243m

30 June

Cash

€348m

Cash Capex

(194m)

EBITDA

+365m

Spectrum

(145m)

Interest

(61m)

Payments for

Provisions

(26m)

VL Costs

(26m)

Other

(10m)1

Debt

(8m)

24

© eircom

High Yield Bond - Transaction Overview

Sources and Uses

Pro Forma Capitalisation3

1Assumes a purchase price of €0.933 per €1.00 of €364 million in aggregate principal amount of repurchased debt. 2 Tetra debt “Other long term debt” (€23m) and “Current borrowings” (€8m) . Tetra debt amounts attributable to eircom’s 56% interest in Tetra. 3 For indicative purposes only – subject to changes

Sources €m Uses €m

Senior Secured Notes 350 Repurchase Senior Facilities Debt 339.3

Transaction Fees 10.7

Total 350 Total 350

€m Cum. % x Adjusted EBITDA Margin / Coupon Maturity

Cash (243) (11.3)%

Senior Facilities1 1,996 81.5% E + 300 bps cash

pay/100bps pik 5 years

Existing Tetra Debt2 31 83.6%

Senior Secured Notes 350 100.0% 9.25% 7 years

Net Total Debt 2,134 100.0% 4.2x

LTM Dec 2012 Adjusted EBITDA 514

26

© eircom

PhoneWatch Disposal

• Sale of PhoneWatch Business completed on 10th May 2013

• Residential monitored alarms business – non core to eircom Business

• 100% share capital acquired by Sector Alarm (private Norwegian Security Company)

• Proceeds can be used to re-invest in the business (within 12 months)

• eircom continues to provide services to PhoneWatch

27

© eircom

Key areas of Focus

• Continued improvements in customer

experience

• Fixed line churn - mitigate impacts of DSP

and the competition to stabilise broadband

base

• Pass 600,000 premises with NGA by

December 2013

• Leverage spectrum assets – 4G mobile

network in service by Sept 2013

• Leverage FMC; establish a unique quad play

in Ireland

• Maintain mobile postpay trading momentum

• Continued focus on prepay churn

• Continue cost transformation journey

29

Thank you

Third quarter and nine month year to date FY 12/13 Results ...€¦ · Herb Hribar – CEO eircom...

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