How To Be Successful In Germany

Transcription

1 Company Presentation Berlin, June 2015

2 Disclaimer This document has been prepared by Tele Columbus AG (the "Company") solely for informational purposes. This presentation may contain forward-looking statements. These statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. Such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on the forward-looking statements. This presentation may contain references to certain non-gaap financial measures, such as Normalized EBITDA and Capex, and operating measures, such as RGUs, ARPU, Homes connected and subscribers pro forma calculation. These supplemental financial and operating measures should not be viewed as alternatives to measures of Tele Columbus s financial condition, results of operations or cash flows as presented in accordance with IFRS in its financial statements. The non-gaap financial and operating measures used by Tele Columbus may differ from, and not be comparable to, similarly titled measures used by other companies. For further information please see in particular the financial statements. The presentation does not constitute or form part of, and should not be construed as, and offered to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire, securities of the Company, or an inducement to enter into investment activity in the United States. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. None of the Company, the companies in the Company's group or any of their respective directors, offices, employees, agents or any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of the presentation or its contents or otherwise arising in connection with the presentation. We disclaim any obligation to publicly update or revise any forward-looking statements or other information contained in this presentation. It is pointed out that the existing presentation may be incomplete or condensed, and it may not contain all material information concerning Tele Columbus AG or the Tele Columbus Group. All figures in this presentation are calculated based on exact numbers and results are rounded to appropriate accuracy. 2

3 Tele Columbus at a glance Footprint 1 c.20% c.80% Eastern Parts Distribution of homes connected Erkrath Rhineland- Palatinate Bremen North Rhine- Westfalia Lower Saxony Hesse Schleswig- Holstein Hamburg Mecklenburg- West Pommerania Hanover Saxony- Anhalt Thuringia Berlin- Brandenburg Berlin Saxony Dresden Highlights Sizeable cable player Third largest cable company in Germany in terms of number of subscribers Strong presence in regional markets Revenues FY2014: 213m 1 (Normalised total operating performance: 230m 1,2 ) Normalised EBITDA FY2014: 99m 1,2 (46.5% margin 1,3 ) Strong network assets 4 Homes connected: 1.67m Homes connected to own L3 network 5 : 1.19m Homes connected upgraded 6 in own L3 network 6 : 940k c.96% Docsis 3.0 penetration Highly attractive customer base for cross-and up-selling 4 Saarland Baden- Wuerttemberg Bavaria c.97% of our unique subscribers are tenants in premises of Housing Associations Unique subscribers: 1.26m RGUs/subscriber: 1.46x 7 Note: Normalised financials; 1) As of 31 December 2014; 2) Adjusted for certain non-recurring items; 3) Margin calculated as % of revenues; 4) As of 31 March 2015; 5) Own network may include leased lines; 6) Upgraded for two-way communication; 7) Including Premium TV RGUs 3

4 Tele Columbus was listed on 23 January 2015 Listing Shares Initial Public Offering on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange SDAX Index since 22 June 2015 Ordinary registered shares with no par value ( Namensaktien ) Number of shares 56,691,667 (share capital 56,691,667) Offer structure Issuance price Use of primary proceeds Lock-up Selection of largest shareholders (as of 5/2015) Primary offering (including greenshoe executed on 30 January 2015): 367 million gross proceeds Secondary offering and preferential allocation for ultimate pre-ipo shareholders 10 which was the midpoint of the price range of 8.0 to 12.0 per share Repayment of debt Liquidity for investment in network and other general corporate purposes 6 months for the Company and direct shareholders (Tele Columbus Management S.a.r.l.) ending on 23 July months for Management Board members + 2 Supervisory Board members 180 days for ultimate indirect pre-ipo shareholders if preferred allocated ending on 23 July 2015 York Capital Tele Columbus Management S.à.r.l. Capital Research and Management Davidson Kempner Blackrock 4

5 Share price performance since IPO 1 Broker targets Share price EUR 16.0 Volume 1,400,000 Broker Date Recomme n- dation Target price ( ) ,200,000 BoAML 18 May Buy ,000,000 Berenberg 1 June Hold ,000 Goldman Sachs 12 May Buy ,000 Hauck & Aufhaeuser 3 June Buy , Issue price 200,000 J.P. Morgan 12 May OW Jan 30 Jan 06 Feb 13 Feb 20 Feb 27 Feb 06 Mrz 13 Mrz 20 Mrz 27 Mrz 07 Apr 14 Apr 21 Apr 28 Apr 06 Mai 13 Mai 20 Mai 28 Mai 04 Jun 11 Jun 18 Jun 0 New Street Research 13 May Hold Av. target price ) Bloomberg as of 19 June

6 Tele Columbus net leverage reduced to 3.2x in Q Leverage update 1 Full capital structure refinancing completed on January 27 with maturities in 2020 and x 1 Significant deleveraging from 6.6x to 3.2x as of 31 March Improved average interest rates by approximately % p.a. 3.2x 1 Both, RCF and capex facility undrawn as of 31 March 2015 Net leverage of 2.9x excl. finance leases as of 31 March 2015 Net debt Dec-2014 / Norm. EBITDA FY 2014 Net debt Mar-2015 / Norm. EBITDA LTM Mar-2015 Note: 1) Leverage figures include finance leases 6

7 The Tele Columbus growth story Company repositioned for growthp P already evident in recent resultsp P with attractive further upside Attractive market opportunity Completion of Tele Columbus transformation Strong results from initial investments Clear strategy to generate growth and returns German cable growth No FTTH and little VDSL competition Norm. EBITDA +6.0% Norm. EBITDA +12.3% Accelerate growth Unique upside potential 1.44x RGU/sub 13.9 ARPU Robust results in despite several issues and company restructuring Accelerated growth momentum in 2014 Investment plans and continued focus on operational excellence Yesterday Today 1) CAGR growth rate 2) Year-on-year growth rate 7

8 Core management team Ronny Verhelst Frank Posnanski (CEO, 2011) Key responsibilities (CFO, 2011) Key responsibilities Selected experiences Group management M&A and Business development Customer management Training & quality management Customer service B2B Customer service B2C Customer operations Telenet (including the 2005 IPO), PWC, Anhyp, Belgacom, Belgian FA 26 years of Cable and TMT experience Stefan Beberweil Selected experiences Accounting & tax Group controlling & treasury Capex and project controlling Purchasing & content Legal, Personnel IT & data security Investor Relations Operational business improvement Digital Identification Solutions, Pulsion Medical, Kabel BW 6 years of Cable and TMT experience Reinhard Sauer (CCO, 2014) Key responsibilities (CTO, 2014) Key responsibilities B2B sales Key account management Housing industry B2C marketing and sales Product management B2C sales channels Marketing Technology Project management IP-Services Network operations Technical service Selected experiences Unitymedia, Kabel BW, Vodafone 12 years of Cable and TMT experience Selected experiences RFC, Bosch Breitbandnetze, Robert Bosch GmbH 24 years of Cable and TMT experience c. 70 years of Cable and TMT Experience 8

9 Supervisory board members Member Frank Donck Chairman Selected experiences Managing Director of 3D NV and Ibervest NV Past experience: Chairman of Telenet (12 years), Director of Zenitel NV and Director of KBC Academics: Master s in Law from University of Ghent, Master s in Finance from Vlerick Business School Robin Bienenstock Member Partner at Gladwyne Partners and Senior Research Analyst at Sanford C Bernstein Past experience: Associate Principal at McKinsey, investment banking at SG Warburg Academics: B.A in politics, philosophy and economics from University of Oxford, M.A in International Relations from University of Toronto Carsten Boeckhorst Member Andre Krause Member Partner at Pamplona Capital Management Past experience: Equity Analyst at York Capital, Partner at Sequoia Capital, M&A at Merrill Lynch, Loyens & Loeff Academics: MBA from the Kellogg School of Management, Master s in Dutch Law and Business Sciences from the Radboud University Nijmegen, and Bachelor s in Law from Universite Rene Descartes Chief Financial Officer at Sunrise Communications AG Past experience: CFO and VP of Strategy & Consulting at O2 Germany, McKinsey & Company, Arthur Andersen Academics: Studied business administration in Bielefeld and Budapest Yves Leterme Member Catherine Mühlemann Member Minister of State and President of IDEA Past experience: Prime Minister of Belgium, Minister of Foreign Affairs, Minister President of the Flemish Government, Vice President of OECD, Group Chairman and National Secretary and Chairman of the CD&V party, Deputy in the Chamber of Representatives Academics: Degrees in Law and Political Science from the University of Ghent Co-owner of Andmann Media Holding GmbH Past experience: Senior Manager at VIVA Media Group and MTV Central, Head of Programming and Programme Acquisition / On-Air Promotion for TV3 and Director of Media for Swiss TV station SF DRS Academics: Media Sciences and Constitutional Law in Berne and Marketing at the Management School St. Gallen 9

10 Key achievements 2014 M&A and other Products Financing Management & Supervisory Board IPO GBS Gesellschaft für Breitbandkabel- und Satellitenkommunikationstechnik mbh in North Rhine- Westfalia with 1,900 homes BIG Medienversorgung GmbH, Moenchengladbach with 12,700 homes in North Rhine-Westfalia, Baden-Wuerttemberg and Berlin Acquired the remaining shares in the joint venture company BMB GmbH & Co. KG, Essen ( BMB ) and BMB s general partner Moved Berlin headquarter to Goslarer Ufer Introduction of new Wifi Router in July 2014 Relaunch of product portfolio Internet & telephony with 16, 50, 100 and 150 Mbit/s in September 2014 Triple-play products introduced in November 2014 Effective February 2014, the existing credit facilities were extended to 2017 and 2018 respectively Preliminary ratings from Standard & Poors and Moody s in Oktober 2014 (B+ and B2 respectively with stable Outlook each) Full refinancing of the 2017/2018 credit facilities in parallel to the IPO with new bank facilities maturing 2020/2021 Stefan Beberweil was appointed as CCO Reinhard Sauer was appointed CTO Change in Supervisory Board with Frank Donck becoming Chairman Introduced Compliance management system, insider, ad-hoc guidelines Spin-off of the group to form the IPO vehicle in August 2014 Change the legal form into AG in September 2014 Preparation for Initial Public Offering on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange which was successfully accomplished in January

11 Tele Columbus has strong proximate relationships with HAs and leading market shares within footprint Product Providers 1 CATV Cable + DTAG competition only DT mainly focused on very large size HA wins Low level of proximity to vast and scattered HA market VOD DE / KDH integration as current strategic priority Particular focus in Saxony and Thuringia Smaller scale and financial resources Unity-KBW merger case still ongoing 2 Broadband/ Telephony Competition from DSL only Once the CATV contracts with HAs are signed (concession agreements) there is no competition from other cable operators in those homes Internet market share in Tele Columbus footprint 1 3% (incl. Alice) 9% 17% (incl. Arcor) Other 7% 26% 38% 3 Premium TV No direct competition Tele Columbus offers a wide choice of premium content to its clients Sky offering supports the up-sell of Premium TV packages to Tele Columbus customers Sky pays Tele Columbus a carriage fee based on the network reach and a commission for the sale of Premium TV packages that includes Sky s offering Source: Company information, IFF International/Delphi Research 1) Broadband market share based on survey from market research study conducted by Tele Columbus on 1,003 randomly selected homes within the Tele Columbus network; information as of August

12 Tele Columbus provides a compelling basic CATV and Premium TV offering F Description CATV 100 digital TV (free TV) channels including c.35 channels in HD quality and more than 70 digital radio channels 3 types of packages offered: 1.Standard Premium TV Extra HD: 30 channels incl. 10 HD channels Lifestyle HD: 11 channels incl. 6 HD channels 2. International: 8 languages 3. Sky Pricing Bulk Contract CATV individual pricing (as part of the bulk contract) Plus HD: 4.99 (individually marketed option) Single Contract CATV HD: Standard: Extra HD: Lifestyle HD: 6.99 International: TV: TV offering Note: TV services are offered through 3 types of CPEs; HD-Receiver ( 4.99 / month & one time), HD-Receiver + HDD ( 7.99 / month & one time), CI + Modul ( 4.99 / month & one time) 12

13 German cable market growth has been accelerating Cable is taking fixed broadband market share from DSLF (% of German market net adds, % market share) German cable Pay TV¹ subscribers (m) and penetration (%) 44% 89% 46% 47% 46% 45% 45% 80% 70% 50% 36% 43% 25% 20% 20% 42% Fand cable Pay TV market growth momentum is accelerating Pay TV penetration 12% 14% 15% 4.7 CAGR : +10% % 6.3 5% 11% 7% 20% 15% 13% 9% 11% 50% 30% 64% 75% 18% 20% 80% 80% Cable DSL Cable market share DT market share Cable is the winning technology in fixed Broadband and Pay TV in Germany Source: ANGA, DT company information, Solon Report ) Pay TV includes all services for which users pay a subscription to access the content; 2) DT disclosed market shares based on management estimates 13

14 Tele Columbus has recently launched new fixed Internet & Telephony offers F Recent developments Triple-play products 21 July 2014: Introduction of new Wifi router Triple-play 50 HD Triple-play 50 Extra HD Triple-play 50Sky Price (after promotion period) Download speed (Mbit/s) September 2014: Introduction of new product portfolio Upload speed (Mbit/s) Incl. Wifi extra 2.00 extra 2.00 extra 2.00 Private FreeTV HD channels November 2014: Introduction of triple-play products Number of channels (SD/HD) 63/33 63/33 63/33 Pay-TV HD (10 HD-/ 20 SDchannels) April 2015: Launch of new Internet offering comprising download speed of up to 400 Mbit/s in the city of Potsdam reaching c.40,000 homes connected Sky World + a theme package PVRready Bundle PVRready + HDD extra 4.99 extra 4.99 extra 4.99 extra 7.99 extra 7.99 extra 7.99 Core product of the new portfolio is now based on 50 Mbit/s download speed The 100 Mbit/s and 150 Mbit/s products introduced in September 2014 account for ~10% of gross adds 14

15 F with attractive pricing F Internet & Telephony bundle pricing 15

16 ... and 400 Mbit/s in the city of Potsdam Footprint Highlights Indicative map of homes connected - TC Homes connected -TC Network Product In April 2015 we launched our new Internet offering comprising download speed of up to 400 Mbit/s First operator to launch 400 Mbit/s Internet product in the German market which is twice the speed of what is currently offered in selected cities Products is available since April 2015 in the city of Potsdam reaching c.40,000 homes connected Pricing: per month Technology Current Wi-Fi cable gateways deployed support speeds of up to 1.3 Gbit/s Backbone connection 10 Gbit/s via own DWDM 1 over fiber infrastructure DOCSIS downstream capacity 1 Gbit/s per service group (20 channels) FTTB approach deployed 1) Dense Wavelength Division Multiplex The launch of new Internet product underpins the strength and capability of TC s network 16

17 Today Award winning products dtgv.de 1. PLATZ dtgv.de 1. PLATZ TARIFE ( kbit/s) Kabel-Internetanbieter Internetanbieter ANGEBOT, TARIFE, SERVICE ANGEBOT, TARIFE, SERVICE Test 11/2014 im Test: 4 Anbieter Teilkategorie im Test 11/2014 im Test: 12 Anbieter DSL & Kabel DtGV Deutsche Gesellschaft DtGV Deutsche Gesellschaft für Verbraucherstudien mbh für Verbraucherstudien mbh 17

18 Award winning service Fixed networkinternet providers Testsie ger Der große Hotlinetest 2015: Gesamtbeurteilung 15 DSL & Festnetz Provider Tele Columbus Unabhängige Tests seit 1978 CHIP 12/2014 TV- and VoD providers Testsieger Der großen Hotlinetest 2015: Gesamtbeurteilung 13 TV & VoD - Provider Tele Columbus Unabhängige Tests seit 1978 CHIP 12/

19 Multi-channel sales approach to drive frequency of customer touch points Tele Columbus shops Tele sales (IB + OB) Online Retail & Promotion Field sales (D2D) Customer service 17% 18% 29% 9% 14% 13% 38Tele Columbus shops Special inbound and Sales optimized Partnerships with large Dedicated field sales Up-and cross-selling outbound sales team webshop retail chains team activities Current status Pure franchise model Commission based Future plans Improving shop location from site C (commercially far-away place) to site B (walkable) New shop concept Current status c.25 agents One external call center Stable volume Increasing conversion rate and sales/rgu Quality calls and monitoring Future plans Sales score NBA (Next Best Activity) tool Rollout outbound tele sales Current status Google Affiliate Display marketing Future plans Expansion of selfservices Live service- and sales chat Expansion of the behavioral targeting based personalization criteria to increase conversion and customer satisfaction Current status c.70 retail partners 50 Saturn/ MediaMarkt Commission based Future plans Intensify MSD partnership Roll out premium partner concept Sale Mobile Current status c.80 self employed agents Commission based Sales steering inhouse Future plans Own team leads and external sales agents additional to agency Cooperation with B2B key accounts to be intensified Intensify pull channels as sales leads for door-2-door Current status c.220 agents Outsourced Commission based Future plans Aim to Increase sales from customer services Focus on up-selling and cross-selling % Share of IP-Sales 19

20 Yesterday Today Today Positive Internet & Telephony RGUs and blended APRU momentum in Q1 Homes connected 000 end of period Majority of lost contracts were nonupgradeable HCs c.18,000 HC acquired in April 2015 Growth: (2.5)% 1,710 1,704 1,720 1,697 1,667 RGU breakdown 000 end of period CATV Premium TV Internet Telephony Growth: 1.6% 1,808 1,814 1,846 1,843 1, YoY growth 13.5% 13.5% (2.5%) 1,306 1,302 1,320 1,311 1,293 (1.0%) Q Q Q Q Q Q Q Q Q Q ARPU /month for the quarter (3.2)% Re-allocation of late payment collection revenues (across TV and Internet & telephony) results in one-off adjustment in Q % 2.5% Internet penetration Internet RGUs within own network as a % of two-way homes upgraded within own network +1.7ppt % 19.5% 20.1% 20.5% 20.9% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 TV Internet & telephony Blended Q Q Q Q Q ) Late payment collection revenues previously only booked under TV, now allocated across TV and Internet & Telephony 20

21 Successful network upgrades continue progress and RGUs/sub heading towards 1.5x Two-way upgrade status Homes two-way upgraded - own network ( 000 end of period), as % of homes connected - own network Development of RGUs/sub and % of bundles end of period 60% 50% 40% 30% 20% 33% % % 51% % 56% % 1.26x 64% 1.30x 68% 1.34x 72% 1.40x 73% 73% 1.44x 1.46x 10% 0% 12.2% 13.7% 14.5% 18.5% 20.5% 20.9% -10% Q Internet penetration¹ Homes two-way upgraded - own network As % of homes connected Q RGUs/sub % of bundles² Operational results continue to confirm the success of our strategy 1) Calculated as RGUs on own network as % of two-way upgraded homes connected to own network 2) Based on subscribers segmented by bundles, only Internet and only Telephony 21

22 Q1 revenue and EBITDA driven by Internet & Telephony growth, migrations, reduced signal fees and improving product mix Revenues 1 m # Normalised total operating performance Growth: 2.2% NormalisedEBITDA 1 m % margin 41.6% 45.5% Growth: 11.7% Capex 3 m % of revenue Q Q Stable revenue growth of 2.2% in the quarter Customer Projects Network architecture Other % 11.5% 27.4% Growth: 144% Q Q Capex increased as strategic investment programme continued to be executed 2.8 OpFCF 1,2 m Q Q EBITDA margin uplift of 3.9ppt % conversion 72.5% 39.8% Growth: (38.7)% Q Q OpFCF lower due to investment strategy, with attractive expected future returns Note: Normalised financials; 1) Q revenue and Normalised EBITDA include RFC Radio-, Fernseh- u. Computertechnik GmbH which Tele Columbus repurchased in January 2015; 2) Defined as Normalised EBITDA Capex; 3) Other capex includes IT capex, OWC capex and other capex 22

23 Stable performance in TV while migration strategy continues to boost significant growth in Internet & Telephony TV performance review Today Internet & Telephony performance review Revenues ( m) Growth: (2.7)% Revenues ( m) Growth: 15.9% Q Q Q Q x Normalised Other income x Own work capitalised x Normalised total operating performance x Normalised Other income x Own work capitalised x Normalised total operating performance Contribution margin ( m) % of revenue Contribution margin ( m) % of revenue Growth: 7.2% Growth: 18.6% % 69.0% 83.4% 85.3% Q Q Q Q Note: Normalised financials; TV includes CATV and Premium TV 23

24 Key recent developments M&A Completed acquisition of WoWiSat, based in Duesseldorf, with 5.4k HCs in January 2015 Announced the acquisition of several smaller cable network operators with c.30,000 homes connected in April/May 2015 New product launches New Internet offering comprising download speed of up to 400 Mbit/s¹ ( 100 price per month) launched in Potsdam in April 2015 with strong initial customer interest 400 Mbit/s offering planned to be extended to a broader customer base in the future Update on product pipeline Advanced TV launch planned towards end of 2015 MVNO-based cooperation with Drillisch signed; further commercial details will be negotiated during the next month; mobile product launch expected in H Product portfolio improvements Customers transitioned to higher speed products (no longer offering <16MBit/s internet product) and from Telephony-only to Internet & Telephony contracts B2B tariffs launched for SMEs in May 2015 Ongoing strengthening of management New Head of B2B Sales from Kabel Deutschland joined in February 2015 New Head of M&A from Kabel Deutschland joined mid-march 2015 New Head of Product Development from Solon Management Consultants joined in April 2015 Further hiring initiatives in place to continue to attract talented hires to Tele Columbus 1) First roll-out in Potsdam reaching c.40,000 homes connected 24

25 Strategy 1.7:17:70 replicate European cable success story Key initiatives Ultimate targets Push migrations and leverage network 1 2 Reinforce and strengthen regional TV leadership Become internet leader in our region Leverage existing CATV subscriber base 3 Most attractive bundled offers Operational excellence 4 5 New products: VoD/Wifi/mobile Excellent customer service Strategy 1.7:17: RGUs/subscriber blended monthly ARPU 70 70% network migrated and upgraded 1 1) Upgraded for two-way communication 25

26 Tele Columbus has unique growth potential in European cable Broadband penetration 1 of European cable peers Broadband subscribers as % of unique cable subs as of 31 December 2014 Subscribers by broadband speed Subscriber split by broadband speed (% of total) as of 31 December Premium TV 3 penetration of European cable peers Subscription to Premium TV as % of basic CATV subscribers as of 31 December % 30% 41% 70% 70% 71% 90% 71% 29% 36% 64% 23% 77% 100% 18% 32% 31% 70% 75% TC KDH UM/KBW Com Hem Telenet Ziggo VMED TC German Cable operators 30 Mbit/s VMED 30 Mbit/s Telenet 6 TC KDH Ziggo 7 Com Hem 8 VMED RGUs/sub 4 of European cable peers ARPU 5 of European cable peers RGUs per unique subscriber (CATV, Premium TV, Internet, Telephony) as of 31 December 2014 Blended ARPU, /month as of 31 December x 1.7x 1.8x 1.9x 2.2x 2.3x 2.5x TC UM/ KBW Com Hem KDH Telenet Ziggo VMED TC KDH UM/ KBW Com Hem Ziggo Telenet VMED Source: Company information and cable peers reports 1) Tele Columbus Internet RGUs within own L3 network / Homes two-way upgraded within own L3 network; KDH, Com Hem Internet RGUs / Total unique subscribers; UM/KBW, Virgin Media Internet RGUs / Customer relationships; Ziggo Internet RGUs / Standard TV RGUs; Telenet Internet RGUs / Total Cable TV subscribers; 2) Indicative estimate for German cable operators, VMED as of Dec 31, 2013; 3) Premium TV defined as additional (paid) services available on top of basic CATV services; 4) RGUs do not include mobile subscriptions; 5) TC ARPUs are calculated by dividing total subscription revenues (based on combined financials; including discounts and credits and installation fees) generated from the provision of services during the relevant period by the sum of the monthly subscribers/rgus for the relevant period; 6) Telenet - 100% of base with speeds above 25Mbit/s; 7) Digital TV subscribers / total customers; 8) Digital TV subscribers/unique subscribers; 9) FX EUR/SEK 9.41; 10) FX GBP/

27 Tele Columbus advanced own network enables majority of future Capex to be purely success-driven Summary comparison of key network statistics Best within selected peers Today Own upgraded HCs Docsis3.0 enabled (%) c.96% c.95% 99%¹ 100% 100% c.100% c.50% Cable network capacity 862 MHz 630 MHz² 862 MHz 862 MHz 600 MHz 750 MHz 862 MHz Max download broadband speeds offered 150 Mbit/s (400 Mbit/s in city of Potsdam 4 ) 200 Mbit/s 500 Mbit/s 150 Mbit/s 150 Mbit/s 152 Mbit/s 200 Mbit/s HC per node (average) c.450 c.1,000 c.580 c.1,000 c.580 c.650 N/A 3 Future capex dynamics Highly driven by successbased projects Capacity investments No need for capacity investments Capacity investments Capacity investments Capacity investments Capacity investments Source: Public filings of the respective companies, Moody s Investors Service, broker reports 1) 99% Docsis 3.0 enabled in comparison to European cable operators definition. 92% of total footprint households have the full capability today 2) c.40% of KDH s network upgraded to 862 MHz 3) c.200 households per node on the c.50% upgraded network 4) Pilot project reaching c.40,000 homes connected 27

28 Significant broadband speed advantage versus competition In c.98% of Tele Columbus own upgraded 1 footprint xdslis the only competing infrastructure Two-way upgraded homes Competing fixed infrastructure on Tele Columbus Footprint² Broadband speeds (downstream/upstream) Tele Columbus Competition Competing infrastructure additional considerations Tele Columbus has an outright network advantage on c.98% of the L3 upgraded footprint c.98% c.54% 2 c.44% 3 c.0% DSL VDSL (FTTC) VDSL2 (vectoring) 150 Mbit/s (400 Mbit/s) / c.5 Mbit/s c.16 Mbit/s / c.1 Mbit/s up to 50 Mbit/s / c.10 Mbit/s up to 100 Mbit/s / c.40 Mbit/s c.2% 4 >150 Mbit/s / FTTH >150 Mbit/s Broadband speeds shared with TV delivery Technology does not allow meaningful increase in broadband speeds Delivered speed c.6 Mbit/s Broadband speeds shared with TV delivery Only c.44% of total German population coverage (planned to grow to 80% by 2018 according to Deutsche Telekom) Broadband speeds shared with TV delivery Discussion with regulator ongoing Limited fiber availability in Germany (c.2% coverage) DT currently focused on VDSL Source: Company information; Deutsche Telekom Capital Markets Day presentation 26/27 February 2015; (data as of December 2014) ANGA 1) Networks fully upgraded for two-way communication including last-mile into home outlet 2) Calculated as: 100% minus VDSL national coverage minus FTTH national coverage; assuming customer s choice made purely on speed basis 3) Based on national incumbent s statistics 4) National coverage; excludes HFC; based on c.500k FTTH homes announced by Deutsche Telekom on 18 May

29 Network migration enables us to offer the full range of fixed-line connectivity products Network Level 3 Network Level 4 Level 4 Network Providers Others Signal Uni-directional communication FROM CATV Achieved two-way upgraded own network of 56%as per 31 March 2015 TO Integrated Level 3 / Level 4 Own network Leased lines Partnership with City networks Signal Bi-directional communication Triple play CATV TELEPHONY INTERNET PREMIUM TV Mid term goal of 70% two-way upgraded own network 29

30 Tele Columbus is leapfrogging network technology: opportunity to efficiently move towards FTTB and FTTH networks, when needed Level 3 (Headend) Level 3 (Distribution network) Level 4 (In-house) % of owned upgraded HCs Hub optional HFC FTTC FN c.450 HC FN LA HA MMD Device LA LA MMD Device c.93% HE FN Splitter 1:16 c.450 HC (FN replaced by optical splitter) FTTB MN c.30 HC HA optional MMD Device c.7% Key network statistics 4,384km HFC network # of nodes c. 2,058 Fiber Nodes (average c.450 HC/Node) 1 c. 2,300 Micro Nodes (c.30 HC/Micro Node) 1 Splitter 1:16 c.450 HC (FN and MN replaced by optical splitter) Splitter 1:32 c.30 HC FTTH ONU 1 HC MMD Device c. 200 HCs as pilot programme Focus on investing in most flexible and advanced technology enabling seamless customer experience and minimizing future investment requirements Note: HE: Headend; FN: Fiber Node; MN: Micro Node; LA: Line Amplifier; HA: House Amplifier; MMD: Multimedia Wall Outlet; ONU: Optical Network Unit 1) As of December 2014; Networks upgraded for bi-directional communication (incl. Minorities) 30

31 New network upgrade initiatives underway Rationale A Project Empire II Migrate homes from 3 rd party KDH signal to own Level 3 infrastructure and upgrade Level 4 for IP services B Project Empire III Migrate homes from 3 rd party UM/KBW signal to own Level 3 infrastructure and upgrade Level 4 for IP services Keyobjectives Save signal fees and increase penetration of IP services Save signal fees and increase penetration of IP services Scope Migrate: 130k homes Migrate: 80k homes Cum. capex 1 44m 30m Annual signal fee savings c. 7.9m 2 c. 6.1m 2 Paybackperiod in c.3.9 years c.4.5 years years 3 Management will also consider the alternative of supplementary small network acquisitions to attain its envisaged network upgrade targets 1) Only network capex (i.e. excluding CPE, etc.) 2) To be achieved in 3 years after the launch 3) Payback calculation on full upgrade cost and capex (SAC, CPE) to increase penetration ratio; includes EBITDA upside 31

32 Migrations drive margin expansion CATV signal fee reduction from 2011 to Comments In m 37 CAGR : (8.1)% Impacted by KDH signal fee hike (c.30%) Households with 3 rd party signal ( 000) % of revenues % 17% 15% % Reduced number of homes through 3 rd party signals from 690k to 514k since 2011P Presulting in signal cost savings and a higher degree of control over the network Actual savings higher than recorded considering the avoided effect of c. 30% KDH signal fee hike from Savings of per subscriber / year (L3 signal delivery fees savings when migration has occurred) TC signed commercial agreement with Eutelsat/M7 on reduction of minimum signal fee guarantees by c. 1.5m (0.7% of 2014 revenues) Base for new, improved relationship and new consumer offers Option to increase independence through eventual investments in own transponders (to be decided in next two years) Migration programmes provide for immediate cost savings in signal fees Note: Normalised financials 1) Refers to basic CATV only 32

33 Strong market position in Eastern Germany with 97% of subscribers served through HA contracts Leading positions in core regions Contract structure German cable for CATV In 000 Market share Level 3 operators Berlin- Brandenburg 642 1,781 36% 0.51m HC to 3 rd party L3 network Signal delivery contract 1.18m HC to own L3 network Saxony Anhalt % Level 4 operators Saxony 274 1,062 26% c.97%of Tele Columbus contracts Thuringia % Concession agreements Housing Associations Cable HH per state Total: 35% Tele Columbus homes connected Individual contract CATV Bulk contract CATV Strong presence particularly in Berlin- Brandenburg, Saxony Anhalt, Saxony and Thuringia Regional market leadership through network cluster c.3% c.34% c.66% Unique subscribers Base for up-sell Internet, telephony and Premium TV Source: Company information as of 31 December 2014, Digitalisierungsbericht Media Authorities

34 Well diversified customer base, long-term relationships and high renewal rates provide Tele Columbus with strong visibility Low portion of contracts up for renewal each year with majority of contracts up for renewal successfully renegotiated resulting in low customer churn Well diversified customer base F... expected to be even further stabilised going forward % of homes connected by contract size, December 2014 ( 000s) Contract size >20,000 Approx. # of contracts % Financial constraints and KDH transaction caused exceptionally high HA churn in the pastf Sunrise 2008: previous management price hike by ~30% Stand-still agreement with Kabel Deutschland 2012/2013 Voluntary disconnections of non-profitable contracts Financial constraints limiting resources for network upgrades >1, % F new financial strength and investment programs to help reduce churn and increase new HA contract adds Additional financial resources post IPO for investments Trusted, closer HA partner with tailored solutions to HAs of all sizes >100 1, % Increased penetration levels of Internet & Telephony to further increase switching costs for HAs Limited competition from satellite providers given technical limitations to offer triple-play <100 42, % Organic new wins, cooperationsand potential M&A to offset churn and increase the number of HA contracts 34

35 Fixed broadband, telephony and TV product roadmap & strategy well under way 2015 and beyond Product Description Launched Introduced 400 Mbit/s offering First operator to launch 400 Mbit/s product Pilot project in the city of Potsdam reaching c.40,000 homes connected New 400 Mbit/s offering Wifi Community Wifi paired with campus Wifi to span Tele Columbus Wifi network for Tele Columbus fixed broadband customers Cloud services Wifi Mobile bundle In the pipeline Mobile bundle Cloud services Mobile telephony and data services (cooperation agreement with Drillisch signed) Online storage as up-selling offer for fixed broadband customers Next generation TV Next generation TV Digital recorder with in-house multimedia features like multi-device support or support of other media 35

36 Exciting short term TV product roadmap & strategy Product Next generation TV Wifi TV VoD Description Digital recorder with in-house multimedia features like multi-device support (Tablet, smartphone, 2 nd TV) or support of other media (USB, network) Support of linear and non-linear TV content on companion devices like Tablets, smartphones or 2 nd TV Video-on-Demand (VoD) service to enhance linear TV offering with non-linear videos and series Common interface across all devices including TV 36

37 Potential for further cable and telecom market consolidation > 1 million subs 1 Other German telco players Homes connected CATV Premium TV Internet 2 8.3m 7.1m 2.4m 2.4m 7.1m 6.6m n/a 2.8m 1.7m 1.3m 163k 197k < 1 million subs 3 Homes connected CATV Premium TV Internet + c.1.3m c. 0.6m n/a n/a n/a c.0.6m n/a n/a Multiple options on the M&A chessboard Source: Company information, Cable peers reports; 1) As of 30 Sept. 2014; 2) KDH homes connected based on unique subscribers; CATV RGUs excludes double-counting for Kabel Digital subscribers; 3) Latest available 37

38 Summary of the organic growth plan Replicate European cable success story 1.7 Grow RGUs/subscriber to 1.7 (from 1.46 in Q1 FY2015) Increase blended monthly ARPU to 17 (from 14.1 in Q1 FY2015) Migrate and upgrade for 2-way 70% of the network (from 56% in Q1 FY2015) 1 1 Simple German cable story 2 It has been done before 3 It s about execution 1) Upgraded for two-way communication 38

39 Appendix

40 Investor Relations contact Elmar Baur, Head of Investor Relations

41 Overview of key KPIs FY '11 FY '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 FY '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 FY '14 Q1 '15 Homes connected ('000) 1,963 1,856 1,814 1,760 1,750 1,749 1,749 1,710 1,704 1,720 1,697 1,697 1,667 Homes connected - own network - two-way upgraded ('000) Homes connected - own network - two-way upgraded / Homes connected 40% 48% 48% 49% 50% 51% 51% 53% 54% 54% 55% 55% 56% Unique subscribers 1,447 1,353 1,321 1,299 1,303 1,302 1,302 1,272 1,274 1,291 1,282 1,282 1,258 RGUs CATV ('000) 1,538 1,416 1,371 1,346 1,343 1,338 1,338 1,306 1,302 1,320 1,311 1,311 1,293 Premium TV ('000) Internet ('000) Telephony ('000) Total RGUs ('000) 1,881 1,816 1,788 1,779 1,794 1,822 1,822 1,808 1,814 1,846 1,843 1,843 1,837 RGU / Unique subscriber 1.30x 1.34x 1.35x 1.37x 1.38x 1.40x 1.40x 1.42x 1.42x 1.43x 1.44x 1.44x 1.46x Penetration Internet (RGUs on own network as % of two-way upgraded homes connected - own network) 13.7% 14.5% 15.9% 16.7% 17.6% 18.5% 18.5% 19.2% 19.5% 20.1% 20.5% 20.5% 20.9% % of bundles¹ 63.9% 68.2% 69.7% 70.6% 71.3% 71.9% 71.9% 72.6% 73.0% 73.0% 73.0% 73.0% 72.8% ARPU ( /month) 2 Blended TV ARPU (per RGU) Blended Internet & telephony ARPU (per internet RGU) Total blended ARPU ) Based on subscribers segmented by bundles, only Internet and only Telephony 2) Quarter-average ARPUs are calculated by dividing total subscription revenues (based on combined financials; including discounts and credits and installation fees) generated from the provision of services during the quarter by the sum of monthly RGUs for the quarter; Year-average ARPUs are calculated by dividing total subscription revenues (based on combined financials; including discounts and credits and installation fees) generated from the provision of services during the year by the sum of monthly RGUs for the year 41

42 Historic financials consolidated income statement 42

43 Historic financials consolidated balance sheet m FY '11 FY '12 FY '13 FY '14 Q1 '15 Non-current assets Property, plant and equipment Intangible assets and goodwill Investments in non-consolidated subsidiaries Investments in associates Receivables from related parties Other financial receivables Deferred expenses Deferred taxes Total non-current assets Current assets Inventories Trade receivables Receivables from related parties Other financial receivables Other receivables Income tax rebate claims Cash and cash equivalents Deferred expenses Total current assets Total assets Equity Net assets attributable to shareholders of Tele Columbus Group (107.5) (88.7) (68.2) (112.6) Non-controlling interests Total equity (101.8) (82.6) (61.535) (107.3) Non-current liabilities Pensions and other long-term employee benefits Other provisions Interest-bearing liabilities Liabilities to related parties Trade payables Deferred income Deferred taxes Total non-current liabilities Current liabilities Other provisions Interest-bearing liabilities Trade payables Liabilities to related parties Other financial liabilities Other payables Income tax liabilities Deferred income Total current liabilities Total equity and liabilities Net debt calculation Current interest-bearing liabilities Non-current interest-bearing liabilities Cash & cash equivalents Net debt Leverage¹ 7.2 x 6.8 x 6.3 x 6.3 x 2.9 x Current finance leases² Non-current finance leases³ Net debt (incl. finance leases) Leverage¹ 7.6 x 7.1 x 6.7 x 6.6 x 3.2 x Unsustainable debt Net debt (incl. finance leases and unsustainable debt) Leverage¹ 7.8 x 7.3 x 6.8 x 6.6 x 3.2 x 1) Leverage is calculated on LTM Normalised EBITDA; 2) Included in current trade payables; 3) Included in non-current trade payables 43

44 Historic financials consolidated cash flow statement m FY '11 FY '12 FY '13 FY '14 Q1 '14 Q1 '15 Cash flow from operating activities Operating Profit (EBIT) Depreciation and Amortization Losses/(gain) on sale of property, plant and equipment (1.4) (0.8) (1.3) (1.5) (0.2) (0.7) (Increase)/decrease in inventories, trade receivables and other assets not classified as investing or financing activities 30.8 (3.2) (5.5) (14.4) (6.5) (29.9) Increase/(decrease)in provisions, trade and other payables not classified as investing or financing activi-ties (23.9) (34.3) (4.5) (12.6) (12.0) (0.7) Income tax paid 2.5 (2.4) (7.5) (2.7) (1.0) (4.3) Net cash from operating activities (15.6) Cash flow from investing activities Proceeds from sale of property, plant and equipment Acquisition of property, plant and equipment (61.5) (48.8) (41.4) (35.9) (3.3) (9.0) Acquisition of intangible assets (5.9) (7.6) (6.7) (7.1) (1.2) (2.7) Acquisition of investment property (0.2) 0.0 (0.8) (10.6) 0.0 (2.0) Interest and similar received Net cash used in investing activities (64.6) (54.0) (44.0) (50.2) (3.9) (12.9) Cash flow from financing activities Withdrawals/deposits (1.7) (1.7) 0.0 Payment of financial lease liabilities 0.0 (3.0) (4.9) (6.1) (1.5) (1.5) Distributions of dividends (2.1) (2.5) (2.8) (3.1) Proceeds from loans, bonds or short-term or long-term borrowings from banks Repayment of borrowings and short-term or long-term borrowings (49.4) (1.8) (3.5) (2.9) (0.6) (640.6) Changes in capital and non-controlling interest (17.1) 0.0 (10.4) Interest paid (14.5) (29.8) (24.0) (18.4) (11.8) (3.6) Cash proceeds from issuing shares or other equity instruments Cash flow from (used in) financing activities (16.5) (31.5) 5.8 (49.2) (15.6) 85.6 Net increase/decrease in cash and cash equivalents 0.8 (8.4) 34.1 (46.5) (17.9) 57.2 Less/plus release of restricted cash and cash equivalents in the financial year 0.3 (15.1) (0.0) 44

45 Adjustments for IPO and refinancing costs in Q1 FY2015 Bridge to PF adjusted EBIT m Q Q Change Reported EBIT % IPO-Expenses (less reimbursement) Refinancing expenses Other employee expenses due to IPO Adjusted EBIT % Bridge to PF adjusted Cash flow m Cash flows as reported Q Q Change Cash flows from operating activities 1.6 (15.6) (17.2) - Cash flows from investing activities (3.9) (12.9) (9.0) 230.9% Cash flows from financing activities (15.6) Net increase/decrease in cash and cash equivalents as reported Cash flows adjusted (17.9) Cash flows from operating activities 1.6 (7.1) (8.7) - Cash flows from investing activities (3.9) (12.9) (9.0) 230.9% Cash flows from financing activities (15.6) Net increase/decrease in cash and cash equivalents (17.9) IPO costs in equity and net proceeds in Q1 m Comments Q Q Change IPO costs in equity 0 (11.0) (11.0) - IPO-/Refinancing proceeds net Normalized EBITDA of 24.4m (Q1 FY2014: 21.8m) as reported in Q1 FY2015 Includes legal and consultancy costs as well as proceeds from rechargeable IPO costs Adjusted EBIT of 21.1m (Q1 FY2014: 7.2m) Includes costs for the refinancing in January 2015 (repayment of old debt, new financing) Includes employee bonuses for the IPO Operational Cash flowdown by 17m yoydue to Increased receivables only partly compensated by stabilised payables 12.5m IPO costs expensed 11.0m IPO costs booked against equity 45