investor presentation august, 2017€¦ · businesses of grupo clarín (bcba/lse: gcla)....

Investor PresentationAugust, 2017

[email protected]

DisclaimerIn

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Forward Looking Statements

The information contained herein has been prepared by Cablevisión Holding S.A. (“CVH”) solely for use at this presentation. The

information herein is only a summary and does not purport to be complete. This presentation is strictly confidential and may not be

disclosed to any other person.

This presentation has been prepared solely for informational purposes and is not an offer to sell securities of CVH and we are not

soliciting offers to buy or sell securities of CVH in any jurisdiction. You are not authorized to rely on any statements included in this

presentation to purchase or sell securities of the company. Cablevision takes no responsibility in this regard. No representation or

warranty, either express or implied, is made as to the accuracy, reliability or completeness of the information presented herein. This

material should not be regarded by recipients as a substitute for their exercise of their own judgment.

Certain information included in this presentation may contain projections or other forward-looking statements regarding future

events or the future financial performance of Cablevision Holding SA. within the meaning of section 27A of the Securities Act of

1933 and section 21E of the Securities Exchange Act of 1934. You can identify forward-looking statements by terms such as

“expect”, “believe”, “anticipate”, “estimate”, “intend”, “will”, “could”, “may” or “might” the negative of such terms or other similar

expressions. These statements are only predictions and actual events or results may differ materially or they are not guarantees of

future performance. CVH does not undertake or intend to undertake any obligation to update these statements to reflect events and

circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the

actual results to differ materially from those contained in CVH’s projections or forward-looking statements, including, among others,

general economic conditions, CVH’s competitive environment, risks associated with operating in Argentina, rapid technological and

market change, and other factors specifically related to CVH and its operations.

This material does not constitute, in whole or in part, and offer. Neither this presentation nor anything contained herein shall form

the basis of any contract or commitment whatsoever.

While figures for 2011, 2012, 2013, 2014, 2015 and 2016 have been prepared in accordance with International Financial Reporting

Standards (“IFRS”), previous years figures were prepared in accordance with Argentine GAAP.2

AgendaIn

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Company Overview

Business Overview

Transaction Summary

Q & A

Appendix

4

Split-up

Company Overview

CVH was created as a new independent company by the split up of the Pay TV, Broadband and Mobilebusinesses of Grupo Clarín (BCBA/LSE: GCLA). Substantially all of its assets consist of its ownership interest inits subsidiary Cablevisión, which provides a wide range of cable television, data transmission, internet andmobile services

Cablevisión is the #1 Pay TV company in Argentina (3.5mm subs with 38% Market Share) & #1 broadbandprovider in Argentina (2.2mm subs with 31% Market Share)

CVH has requested admission to the public offering regime for shares in Argentina (BCBA) and in London (LSE)

The split up is targeted to be complete by Q3 2017, subject to certain regulatory approvals

60.0%

FintechMedia

40.0%

40.0%

60.0%

% Economic Rights% Voting Rights

100.0%

100.0%

99.7%

99.2%

100.0%

100.0%

100.0%

100.0%

OthersAGEA ARTEAR

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AgendaIn

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Company Overview

Business Overview

Transaction Summary

Q & A

Appendix

Market Size

(2017E)1

Pay-TV and

Broadband

Key

Metrics

(2016)

Argentina

fixed

Broadband

and Pay-TV

Subscribers

Evolution

(mm)

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Source:The Economist Intelligence Unit, INDEC, Red Compartida Report, Kagan, and GS ResearchNote: GDP size and GDP per Capita in nominal terms and PPP weighted. GDP growth reflects real GDP growth. CAGR figures are from 2007 to 20161 Information obtained from GS Research

Growth Industry Opportunity in Broadband, Premium and Digital TV

Argentina Brazil Mexico Colombia Chile Peru

GDP Size (US$bn)

GDP per Capita (US$mm)

GDP Growth (Y/Y)

Pay-TV Penetration (%)

Broadband Penetration (%)

# of Households (mm)

6

$ 202

4.0 %

$ 6,322

$ 1,188

3.2 %

$ 9,607

$ 272

2.5 %

$ 5,522

$ 240

2.4 %

$ 13,080

$ 1,895

1.1 %

$ 9,118

2.6 %

$ 545

$ 12,477

Broadband Subscribers Pay-TV Subscribers

Argentina Pay-Tv and Broadband Market

Regional Presence In

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High quality, high capacity network, covering a very attractive customer base

¹ All Internet subscribers are included for internet, as of June 2017.2 as of June 2017.(*) Taking into account only Cable TV and Internet subs.

Source: Company Information7

Services

Argentina & Uruguay

7.9MM homes-passed (79% 2-way)2

50,897 km2

43.4% CATV o/HHPP2

36.4% Internet o/HHPP 2W2

3,914,938 Unique Subs(*)

3,510,368 CATV2

2,254,778 Internet2

2,147,646 Digital2

614,031 Postpaid Mobile Subs

Coverage & Network

Subs

Penetration

Cable and Digital TV

Broadband

Exhibit 1: Geographic Footprint & Subs1

Thousands SubscribersOwnershipStructure

CATV: 144.2Internet: -

International

CATV: 510.9Internet: 261.7

Litoral


Centro


Buenos Aires

Fintech Media

60% 40%

CATV: 1,503.1Internet: 1,199.7

AMBA

Mobile Telephony

Financials

FY16 Sales: US$ 2,068FY16 Ebitda: US$ 740 2Q17 ARPU: US$ 48

ARPU: Revenues (excl Nextel) / Average Unique Customers / Average FX Rate

FX 2016: $14.79; 1Q17: $15.68; 1H17: $15.71; 2Q17: $15.75

79%

21%

81%

19%

72%

28%

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8

HighGrowth

Potential

% Broadband Subscribers

Exhibit 2: Pay-TV Market Share Exhibit 3: Broadband Market Share

% Households

Exhibit 4: Cablemodem Growth Potential

*Competition Areas, Argentina only.Source: Company Information, as of June 2017

1.7MM 1 Way

7.9MM Homes Passed*

Cablevisión is leader in Pay-TV and Fixed broadbandWe belive we have the best product to capture the growth of the broadband market

Expand Coverage of 2-Way TechnologyDocsis 3.0 technology

- Ultra Broadband- Downgrade: +30 Mbps

2 Increase Broadband Penetration

Migration from dial-up to broadband Bandwith Upgrade

1

Source: Dataxis, Nextvlatam, Company Information; Pay-TV refers to Cable TV Source: Dataxis, Nextvlatam, Company Information, as of June 2017.

% Pay-TV Subscribers

3.9MM Unique Clients

6.2 MM2 Way

0.8MM1 Way

3.1MM2 Way 2.3MM

CM Subs

0.9MM Only Pay TV

3.1MM Clients 2 Way

Cablevisión SA

Directv

Others

Cablevisión SAOthers

Telecom Telefónica

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9

Exhibit 5: Strong Growth Across Cablevisión Products

Source: Company Information, as of December 2016* Revenues (excl Nextel) / Average Unique Customers / Average FX Rate

Unique subscribers (‘000)

3,716 3,645 3,761 3,792 3,874 3,912

Exhibit 6: Revenue Breakdown FY16

Exhibit 8: Revenue Breakdown 6M17

Pay-TV

Broadband

Premium, digital & others

Mobile

4841

4540383938

4Q154Q12 4Q164Q14

+4%

4Q134Q11 2Q17

Exhibit 7: Total ARPU *

US$

Pay-TV

Broadband

Premium, digital & others

Mobile

3,915

Offering Attractive Cross-Selling Opportunities

Note FX 2007: $3.11; FX 2008: $3.16; FX 2009: $3.73; FX 2010: $3.91; FX 2011: $4.13; FX 2012: $4.55; FX 2013: $5.48; FX 2014: $8.12; FX 2015: $9.27; FX 2016: $14.79; FX LTM: $15.45; 1Q17: $15.68; 2Q17: $15.75

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Key figures

1 Figures for 2011, 2012 , 2013, 2014, 2015, 2016 and 2017 have been prepared in accordance with IFRS

Source: Company Information.

10

Exhibit 9: CATV Subscribers

Thousands

Exhibit 10: Broadband Subscribers

Thousands

Exhibit 11: Revenues1

US$ MM

Exhibit 12: EBITDA1

US$ MM

3,528

+2%

3,193

20082007

3,191

2009

3,022

2013

3,533

20122011 20142010

3,4913,358 3,4933,490 3,405

2015 2Q17

3,510

2016

977923726

2007 20092008 2012 20142013

1,489

2011 2016

1,119

2,180

1,343

+12% +8%

20152010

2,255

1,699 1,828

2Q17

2,018

840

2,302

1,081

2007 2008 LTM2013

+11%

201620152012

1,779

2,171 2,068

1,671

2011

1,476

2010

1,249

2009

1,131

2014

1,752848

739787

578520529475468407378286

2011

+11%

2016 LTM20132009 2010 20122008 201520142007

EBITDA Margin (%)

34.1

35.036.0

32.2

37.5 31.7

29.2

36.233.0

35.8

36.9

Consistent Subs and Financial Growth


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11

Our subsidiary Cablevisión SA (“CV”) has invested more than US$3,200 MM in Capex since 2007 mainly to generate growth and to improve margins

Exhibit 13: Network Capacity

Exhibit 15: 1Q17 CAPEX Breakdown

Exhibit 14: CAPEX

2W79%

DVB*5%

750MHz >16%

* Digital Technology for Lower Income Neighborhoods

Source: Company Information, Argentina Only as June 2017 Source: Company Information

US$ MM

CV CAPEX

Networks, New Technologies & others

28%

Installations49%

Maintenance23%

Source: Company InformationSource: Company Information

450

292324284341

224153

237164

0

200

400

600

800

0

5

10

15

20

25

30

20122009 2013

14%

2007

689

LTM

30%

589

20112010 2016

28%

18%

23%

20152008

21%

2014

17%18%22%

20%17%

Exhibit 16: EBITDA - CAPEX

US$ MM

159150

337

286

196235

158

244254

141122

2010 LTM201620122011 201520132008 20092007 2014

Capex/Sales

Capital Expenditure (CAPEX)


Financial Debt

Exhibit 17: Key Financial Ratios

Source: Company Information

12

Exhibit 18: CV Debt Profile as of June 30th, 2017

US$ MM, Balance Sheet 601

1

501

6204429

Total2020 202220192018 20212017

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Financial ratios 2009 2010 2011 2012 2013 2014 2015 2016 LTM

Net Debt/EBITDA 1,2x 0,8x 1,0x 0,8x 0,7x 0,4x 0,4x 0,6x 0,6x

Gross Debt/EBITDA 1,3x 1,1x 1,3x 1,2x 1,0x 0,8x 0,6x 0,8x 0,7x

EBITDA/Int. Expense 7,0x 12,0x 9,5x 11,1x 12,2x 15,0x 20,9x 22,4x 19,8x


AgendaIn

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Company Overview

Business Overview

Transaction Summary

Q & A

Appendix

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14

Call Option

Call Option for the acquisition of a direct or indirect participation equal to 13.51% of Telecom,

approximately 6% of the surviving entity.

Call Option exercise price of USD 634,275,282

The maximum term for the exercise of the call option is one year counted as from 7 July 2017.

Shareholders’

Agreement

Subject to the satisfaction of certain conditions CVH shall have the right to appoint a majority of the

members of the Board of Directors, Executive Committee, Audit Committee and Supervisory

Committee

Scheme of special majorities for the approval of certain matters by the Board of Directors and/or

the Shareholders

The Agreement provides far rights of first refusal, tag along and drag along subject to certain

requirements and conditions

Transaction OverviewLatest Events – CVH & Cablevisión SA

Preliminary

Merger

Agreement

Board of Directors of Cablevisión S.A has approved the “Pre-Merger Commitment” whereby

Cablevisión will merge into Telecom Argentina (“TEO”) subject to certain corporate and regulatory

approvals

Exchange ratio: 9,871.07005 new shares of Telecom Argentina to be issued in exchange for each

common share of Cablevisión with a nominal value of Ps. 10,000 per share

Telecom Argentina will issue 1,184,528,406 new common, book entry shares with a nominal value

of Ps. 1 and one vote per share, to be delivered to the shareholders of Cablevisión

General Ordinary and Extraordinary Shareholder’s Meeting to be held on 31 August 2017 (CV and

TEO)

15

Transaction Summary and Capital OwnershipIn

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Cablevisión S.A., in an all stock transaction, will be absorbed by Telecom Argentina

Cablevisión S.A. shareholders will receive1,184.5mm new shares of Telecom Argentina

All resulting company share classes will have equal economic and voting rights

Cablevisión shareholders will receive 55% of the combined company shares

Reference equity values of US$6.1bn for CV and US$5.0bn for TEO

Transaction Summary

Post-transaction1,2

FintechMedia

60.0% 40.0%

FintechTelecom3

FintechMedia 6 Float4, 5

33.0% 29.2%15.8%22.0%

Simplified ownership structures

Pre-transaction structure1

FintechTelecom3 Float5ANSeS

20.4% 19.0%

Former NortelPref. Stock

Class B

25.4%35.2%

Class B shares – Total Float

1Pre-transaction ownership structure of TEO after the reorganization of Telecom Argentina, Telecom Personal, Nortel Inversora and Sofora Telecomunicaciones2After the reorganization of Telecom Argentina and illustrates the ownership structure of the combined company3Only includes Fintech Telecom ownership through Sofora Telecomunicaciones4 Float includes former Nortel Preferred Class B shares and shares held by the ANSeS

5 The Float includes 6.0% pre-transaction direct holding of Fintech Advisory in TEO (equivalent to 2.7% post-transaction holding)

6 Total Post/transactionholding of Fintech willreach 40.5%

16

1 Proforma, unaudited. Combines the revenues and EBITDA figures reported by both Companies. Values in US$ calculated at a rate of P$15.45 = US$1.00, using as a reference the U.S. dollar ask rate published by the Banco de la Nación Argentina and calculated using the average of such FX rate of the last 12 months as of 2Q17.; 2 Considers the sum of number of clients reported by both companies.Source: Company filings

2.3

6,1

Telecom Cablevision Pro-forma

1.1 0.81.9

Telecom Cablevision Pro-forma

EBITDA margin

+ +

29.1% 32.0%36.8%

3.8

Fixed BB18%

Fixed Voice7%

Data & Others

4%

Mobile39%

Pay TV23%

Devices9%

Total revenues:US$5.9 Bn

3.9mmsubscribers

20.5mmsubscribers

3.5mmsubscribers

4.0mmsubscribers

Merger Key Figures (LTM 2Q17)

Exhibit 19: Revenues Exhibit 20: EBITDA

Exhibit 21: 1Q17 Combined revenues breakdown Exhibit 22: Combined clients by segment in Arg.

US$ BN US$ BN

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Call Option and Shareholder Agreement

Post-call option1,2

Pre- call option transaction structure1

Fintech Media+

Fintech Telecom 3

Float 5

33.0%

37.8%

Float 4 5

39.1%

31.7%

29.2%

29.2%

* Note: Fintech includes Fintech Media and Fintech Telecom

Subject to the satisfaction of certain conditions the CEO and other Key Employees (other than the CFO and the Internal Auditor) to be designated by the Board of the Company shall be a person proposed by CVH

Subject to the satisfaction of certain conditions the CFO and the Internal Auditor of the Company to be designated by the Board of the Company shall be a person proposed by Fintech Advisory

Shareholder Agreement

1Pre-transaction ownership structure of TEO after the reorganization of Telecom Argentina, Telecom Personal, Nortel Inversora and Sofora Telecomunicaciones2After the reorganization of Telecom Argentina and illustrates the ownership structure of the combined company3Only includes Fintech Telecom ownership through Sofora Telecomunicaciones4 Float includes former Nortel Preferred Class B shares and shares held by the ANSeS

5 The Float includes 6.0% pre-transaction direct holding of Fintech Advisory in TEO (equivalent to 2.7% post-transaction holding)

6 Total Post call optionholding of Fintech willreach 34.5%

Fintech Media+

Fintech Telecom 3 6

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AgendaIn

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Company Overview

Business Overview

Transaction Summary

Q & A

Appendix

20

Note: Total figures may not sum up due to rounding(1) Net of associated issuance expenses.

TEOCV Combined

Financial Assets

Financial Debt

Net Financial LeverageNet Financial Debt / EBITDA (A)/(B)

6,2

(6,0)

3,3

(3,0)(6,1)

IFC Loan – US$ 400mm

EBITDA LTM 1Q17 (B)

9,5

15,7

0,2x0,5x

11,9 27,6

0,3x

(1)

Notes/Bonds in US$US$ 78mm (TA) / US$ 500mm (CV)

Bank Loans in Ar$/US$/Guaranies

Notes in Ar$ - $ 1.442mm

Bank Overdrafts in Ar$

Interest + Derivatives + NPV

(1,2)

(1,4)

(7,7)

(0,4)

(0,1)

-

(1,7)

-

(6,0)

- (0,1)

(2,1)

(8,9)

(1,4)

(0,1)(0,1) (0,2)

Total Financial Debt (18,7)(9,2)(9,5)

(9,2)Net Financial Debt (A)

(1)

(1)

In Ar$ Bn

Combined Net Debt as of March 31, 2017In

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1Excludes 15,221,373 treasury shares; 2Determined only with the objective of adjusting the exchange ratioSource: Company filings

Telecom Argentina S.A. shares1 969,159,605

Telecom Argentina S.A. resulting ownership in combined entity 45%

New total shares outstanding 2,153,688,011

Shares to be given to Cablevisión S.A. shareholders 1,184,528,406

Total shares outstanding of Cablevisión S.A. 120,000

Agreed exchange ratio: Telecom Argentina S.A. shares for each Cablevisión S.A. share 9,871.07005

Reference Equity values2

Reference Equity Value of Telecom Argentina S.A. (US$mm) 5,000.0

Reference Equity Value per share for Telecom Argentina S.A. in US$ 5.15911

Reference Equity Value of Cablevisión S.A. (US$mm) 6,111.11

Reference Equity Value per share for Cablevisión S.A. in US$ 50,925.93

Calculation of Exchange RatioIn

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Ownership Structure

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Source: Company Information

Cablevisión Holding S.A.

% Economic Rights% Voting Rights

Post Split-up

Class A Shares Class B Shares

44.55%

21.65%

26.44%

64.25%

Class C Shares

8.75%

4.25%

20.26%

9.85%

Class B Shares

60.00%

60.00%

PrincipalShareholders

FloatGS

Unidos

PrincipalShareholders

FintechMedia

100.00%

100.00%

40.00%

40.00%

Investor PresentationAugust, 2017

[email protected]

investor presentation august, 2017€¦ · businesses of grupo clarín (bcba/lse: gcla)....

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