eircom Results Presentation

February 27, 2015

Second quarter and half year FY14/15 Results Presentation

Richard Moat

Steve Mitchell

© eircom

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Disclaimer

2

Agenda

Trading Q2 and YTD FY 14/15

Key business initiatives FY15

Q&A

Business update

Economic update

3

Business highlights

© eircom

Q2 business highlights

4

• QoQ revenue growth of 1%; fixed line stable,

third consecutive quarter of mobile revenue

growth. YoY rate of revenue decline

continues to fall.

• EBITDA of €112 million, in line with

expectations

• FTTC rollout on track with 1,100,000

premises passed and FTTH rollout underway

• Momentum on fibre, TV and 4G continues

• Valuable TV sports content secured

• Sustained postpay growth and strong

Christmas prepay performance

• Group broadband growth of 17,000 driven by

both Retail and Wholesale

• Continued focus on operating cost reductions

- benchmarking exercise complete

• On track at Q2 but challenges remain

© eircom

Agenda

Trading Q2 and YTD FY 14/15

Key business initiatives FY15

Q&A

Business update

Economic update

5

Business highlights

© eircom

Irish macro continues to improve

6

10%

11%

12%

13%

14%

15%

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Consumer and business confidence improving

91

52

50

(19)

Consumer

Business

Positive GDP growth expected in 2015

Source: ESRI, IBEC

+41 pts.

Sovereign yields in steady decline

Source: Bloomberg

GDP Growth Rate Irish 10 Year Sovereign Yields

+71 pts.

Dec-14 Dec-12

Unemployment fell by over 4 p.p. since Q1 2012

Source: Trading economics/IMF

1.2

1.7

2.2

2.7

3.2

3.7

4.2

Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

1.25%

10.6%

15%

Source: Deutsche Bank

3.3

2.7

1.9

1.7

1.2

1.0

0.9

0.8

0.8

0.3

0 1 2 3 4

Ireland

Greece

Spain

Netherlands

Portugal

Germany

France

Finland

Austria

Italy% YoY

© eircom

Agenda

Trading Q2 and YTD FY 14/15

Key business initiatives FY15

Q&A

Business update

Economic update

7

Business highlights

© eircom

FTTC rollout on track to reach 1,600,000 premises

and FTTH build underway

8

• Over €270 million invested in fibre

access network to date

• Approx. 70% of rollout now complete

offering speeds of up to 100 Mb/s

• On track to pass 1.6m premises by mid

2016 (>70% of Irish households)

• Rollout of FTTH offering speeds of up

to 1 Gb/s is underway

• Exchange launched VDSL now

available

• Demonstrates the flexibility and

scalability of our fibre network rollout

© eircom

3% 5% 7% 10% 14% 17% 20%

53% 52% 50% 49% 46% 44% 42%

44% 43% 42% 42% 40% 39% 38%

Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Mobile/TV bundles Dual Play Single Play

New capability is delivering increased RGUs per

customer…

9

Successfully driving the take up of triple and quad play1…

…resulting in RGU2 growth

1 Consumer market only – Mobile/TV bundles % include FMC bundles 2 RGUs exclude Standalone Postpay, Prepay & MBB

• Superior fixed and mobile network

underpins bundling strategy and RGU

momentum

• Currently the only provider of quad play

bundles in the market

• 20% of customers now availing of

TV/Mobile bundles

1.59 1.61

1.65

1.68

1.73

1.78

1.82

Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

© eircom

622 601 585 559 546

74 103 133 172 202

696 704 718 731748

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Non NGA NGA

3

10

21

28

32

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

41

51

63

76

89

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

5675

95

124140

18

28

38

48

62

74

103

133

172

202

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Retail Wholesale

10

…and positive growth in KPIs

Growing broadband

efibre customers ‘000 Group Broadband customers ‘000

% penetration of NGA

premises passed

Successfully penetrating

e-fibre with TV

TV customers ‘000

Continued FMC growth1 Strong e-fibre take-up

FMC ‘000

% penetration of

consumer NGA

customers

11%

13%

14%

17%

19%

6%

14%

24%

25%

25%

1. Now includes consumer and SMB

© eircom

63%

71%

Q2 14 Q2 15

€82m €79m €80m €82m €83m

€9m€4m €4m

€5m€8m

€90m

€83m €84m€87m

€91m

Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Service revenue Handset revenue

Mobile investment driving growth

Notes: 1 Revenue and EBITDA margin for Q2 has been adjusted for the MTR impact relating to Q1 ’14: Revenue €3.8m/EBITDA €1.5m

2 Smartphone penetration of consumer handset base only 3 Handset numbers relate to the consumer postpay market only

Revenue growth now evident but FY15

margin impacted by commercial

investment…

…to drive smartphone penetration2… …49% of customers on 4G handsets3

11%

EBITDA margin %

11

16% 9% 10%

• Third consecutive quarter of Mobile revenue growth; YoY revenue +1%

• H1 EBITDA margin +1.7ppt YoY to 9%

• Smartphone penetration +8ppt YoY to 71%

• 49% of customers now on 4G enabled device; +25ppt YoY

• 4G data usage 3x that of 3G

• 4G for prepay launched Nov 2014

4%

1

9% 9%

67%

42%

24%

49%

Q1 14 Q2 152G 3G 4G

© eircom

Headcount Evolution… Over €130m savings Operating Costs (€m)

5,097

450

5,547

4,705

3,632 3,400

FY12A FY13A FY14A FY15F

FTE 9 day fortnight

Notes 1 Includes €10m of one-off storm costs incurred in FY14 2 Net of €10m YoY storm cost saving

288 264 230

351 333

324

639 597 554

FY12A FY13A FY14A FY15F

Pay Costs Non Pay Costs

>€130m cost reduction

12

>2100 FTE reduction

On track to achieve c.€40m2 cost savings in FY15…with further scope from bench marking exercise

Continued focus on cost transformation

1

• Expect to deliver cost savings of c.€40m in FY15 driven by both pay and non pay savings

• AT Kearney global competitive benchmarking process completed in Dec-2014

- Indicated significant improvements since 2012

- But further scope for savings in the region of €50m-€80m in total

• Detailed cost plans for FY16-FY18 under preparation and expect to be complete by May 2015

IT rationalisation

Product rationalisation

Outsourcing

Sales efficiencies/brand

Procurement programme

Organisational design

Key areas in scope

Mobile network efficiencies

Customer care efficiencies

© eircom

Focus on improving customer experience

Making it simple for our customers to do business with us

Self Service Process

Improvements Improved Service

INITIATIVE OUTCOME

First call resolution

Reduced customer complaints

Reduced customer effort

Improved Net Promoter Score

• Consolidate contact centre queues

• Create systems and tools to

empower care agents

• Upskill & cross-skill agents

IMPROVED SERVICE

• Improve customer journeys

– Sales to activation

– Billing to cash

– Ticket to resolution

PROCESS IMPROVEMENTS

• Increased online capability

• Mobile App for Bundles

• IVR self service

• Strengthened webchat & social media

SELF SERVICE

Improved call centre operations

13

Customer self service

Progress

Q2 vs. Q1

© eircom

Agenda

Trading Q2 and YTD FY 14/15

Key business initiatives FY15

Q&A

Business update

Economic update

14

Business highlights

© eircom

Trading highlights

Q2 and 6 months to December 31, 2014

15 1 Includes share of Tetra EBITDA under proportional consolidation (€3m EBITDA)

• Q2 Revenues of €316m up 1% QoQ. Rate of YoY revenue

decline continues to fall

• Q2 EBITDA of €112m1 in line with expectations and

reflects seasonal investment in customer growth

• YTD EBITDA of €226m in line with expectations but 4%

down on the prior year

• Group broadband base grew 17,000 in the quarter driven

by investment in fibre and bundling

o Fibre connections at 202,000 – up 30,000 in Q2

o Continued growth in FMC bundles – up 13,000 in Q2

• Strong performance in mobile with 25,000 net adds in the

quarter driven by prepay and postpay. Third consecutive

quarter of mobile revenue growth.

• Cost transformation on plan – Operating costs in the

quarter reduced by €13m or 9% YoY

• On-going capital investment in growth programmes

• Maintaining strong liquidity – closing cash €173m

© eircom

Q2 H1 v Prior Year1 v Prior Year v Prior Year

1 v Prior Year

FY 15 FY 15 Better/(Worse) Better/(Worse) Better/(Worse) Better/(Worse)

€m €m €m % €m %

Fixed Revenue 236 474 (15) (6%) (25) (5%)

Mobile Revenue 91 178 (3) (3%) (2) (1%)

Eliminations (11) (23) (0) (0%) (1) (4%)

Group Revenue 316 629 (18) (5%) (28) (4%)

Cost of Sales (72) (141) 1 2% (4) (3%)

Gross Profit 244 489 (16) (6%) (31) (6%)

% Margin 77.3% 77.7%

Pay Costs (53) (104) 8 13% 19 16%

Non Pay Costs (79) (159) 5 6% 2 1%

Operating Expenses (132) (262) 13 9% 21 7%

Group EBITDA 112 226 (4) (3%) (10) (4%)

Fixed 103 209 (7) (7%) (13) (6%)

Mobile 9 17 4 74% 3 22%

Q2 Movement H1 Movement

1 The above table includes proportionate consolidation of Tetra Ireland at 56% for actual, budget and prior year 2 Operating expenses are pay and non pay costs before non-cash pension charge and lease fair value credits 3 Numbers in the above tables have been presented to the nearest million and therefore totals presented above may vary slightly from the actual arithmetic totals of such information 4 Prior year pay costs have been re-stated to exclude the non cash share incentive related provision of €1.5m, which has been reclassified as an exceptional item

Group EBITDA Q2 and 6 months to December 31, 2014

16

• Q2 Group revenue of €316m broadly in line with expectations but 5% down on Q2 ‘14 (post adjustment for MTR the decrease was 4%)

• YTD Group revenue of €629m broadly in line with expectations and 4% down year on year

• Q2 Group operating costs of €132m were €13m or 9% favourable YoY

• YTD costs of €262m were €21m or 7% favourable YoY. Cost savings year on year have primarily resulted from headcount reduction

• Q2 and YTD Group EBITDA was broadly in line with management expectations.

© eircom

330 329 323 333 315 311 313 316

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15Total Revenues

268 261 259 260 252 250 244 244

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

120 123 121 116121 121

114 112

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

149138 139 145

131 129 130 132

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Quarterly trading to December 31, 2014

17

Operating Costs3 (€m)

1 The above chart includes the proportionate consolidation of Tetra Ireland at 56% for actual, budget and prior year 2 The rate of revenue decline in the prior and current year has been adjusted to reflect the impact of the MTR adjustment made in Q2 FY14 3 Excludes €10 million of one-off storm costs incurred in Q3 FY14 and excludes non cash share incentive related provisions now classed as exceptional 4 FY 13 data presented above excludes results from Phonewatch up to the date of disposal in May 2013 5 Numbers in the above charts have been presented to the nearest million and therefore totals presented above may vary slightly from the actual arithmetic totals of such information

EBITDA (€m)

Revenue (€m) Gross Margin (€m)

• The rate of revenue decline

continues to slow

decreasing from 7% in prior

year to 3.8% in Q2 FY15

• Gross margin reduction

driven by changes in

revenue mix and impact of

one off items in prior year

• Q2 operating costs down

9% YoY reflecting

continued benefit from cost

saving programmes, in

particular from headcount

reductions

• QoQ operating costs

increased due to seasonal

customer acquisition costs

and lower capitalised

labour in the quarter

• Q2 FY15 EBITDA impacted

by seasonal investment in

customer acquisition

Qtr on qtr reduction compared to the PY

(7.0)%(2) (3.8)%(2)

© eircom

25%27% 27%

21%20%

18%21% 21%

20%22% 21%

19%21%

20% 21%22%

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Consumer Broadband Churn (%)

Consumer Access Churn (%)

37.8 37.6 37.2 36.6 36.7 36.2 35.1 34.5

17.3 16.6 16.1 14.8 15.6 15.7 15.6 14.3

46.1 45.7 45.1 44.1 44.8 44.5 43.6 42.5

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Retail core voice & access Retail broadband

Retail blended ARPU

940 917 896 878 859 844 831 814

455 451 447 451 452 456 458 460

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Retail Access Lines Retail Broadband Lines

Fixed line KPIs - Retail

18

Total Retail Lines (000’s) Fixed Line Churn (%)

Retail Line Movements (000’s)

ARPU1 (€)

• Continued growth in

underlying broadband base

in the quarter (+3,000),

driven by take up of high

speed broadband and

bundles

o Actual BB growth of

1,000 in the quarter

included 2,000 one-off

disconnections following

clean up of DSP base

• Underlying Retail line losses

of 11,000 in Q2 were

significantly lower than the

prior year period losses of

18,000

o Actual Retail access

losses of 17,000 included

6,000 one-off cessations

related to clean up of the

DSP base

• Q2 Retail ARPU impacted

by increased promotional

and retention discounts

1 ARPU’s have been re-stated to include all promotional discounts which have increased as a result of the introduction of new bundles including TV

ARPU’s include core voice, access rental and broadband rental revenues (less voice and bundle discounts) and exclude connection and other ancillary

revenues

(23)(21)

(18)(19)

(15)(13)

(11)(5) (4)

4

1

42

Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Access losses Broadband growth/(losses)

(17)

(6)

Access/BB DSP losses

(2)

3

1

© eircom

7

14

17 17

14

8 7

3 4

10

12

15

7

1011

16

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Wholesale access net growth Broadband net growth

23%

37%

53%

65%

77% 77%

70%

55%

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

18.3 17.3 17.0 17.0 16.7 16.4 16.6 16.7

29.9 29.5 28.7 29.1 29.4 28.3 29.0 29.3

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

WLR PSTN ARPU WLR PSTN & BITSTREAM ARPU

400 414 431 448 462 470 477 479

208 218 230 245 252 262 273 288

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Wholesale Access Lines Wholesale Broadband Lines

Fixed line KPIs - Wholesale

19

Wholesale Lines (000’s) ARPU1 (€)

Wholesale Growth (000’s)

Wholesale Pick Up Rate of Retail Access Losses –

Rolling LTM

• Continued growth in

Wholesale

o Broadband grew strongly

by 16,000 in Q2 and by

44,000 (18%) YoY

o Access lines grew by

3,000 in Q2 and by 31,000

or 7% YoY

o Wholesale ARPUs remain

stable driven by consistent

growth in both access and

broadband lines

• Wholesale growth equals

approximately 55% of Retail

losses (adjusted for the one

off base clean up) for LTM

compared to prior year rate of

65%

• Reduction in Wholesale pick

up of Retail access losses is

due to increased take up of

stand alone broadband (not

reported in access line

growth)

1Wholesale ARPU has been restated to include the impact of the WLR price reduction in Large Exchange Areas (LEA) which are fibre enabled

© eircom

(9)(4) (1) (5) (7) (7) (8)

58

19

8

14 13

Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15Group Access Losses Group Broadband Growth

(2)

(6)

(14)

Access/BB DSP losses

19

17

Group Broadband Market Share %

455 451 447 451 452 456 458 460

208 218 230 245 252 262 273 288

663 668 677 696 704 718 731 748

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Retail Broadband Lines Wholesale Broadband Lines

940 917 896 878 859 844 831 814

400 414 431 448 462 470 477 479

1,340 1,331 1,327 1,326 1,321 1,314 1,307 1,293

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Retail Access Lines Wholesale Access Lines

Group Access & Broadband movement (000’s)

Fixed line KPIs – Retail and Wholesale

20

Total Group Access Lines (000’s) Total Group Broadband Base (000’s)

• Group access lines

reduced by 8,000 in the

quarter (excluding one off

disconnections 6,000 DSP

connections)

• Group broadband base

continued to grow in Q2

increasing by 19,000

QoQ, same rate of growth

as prior year quarter

o Retail broadband

base up 3,000 in the

quarter (ex DSP)

o Wholesale

broadband lines

increased by16,000

• eircom maintaining a

combined share of the

fixed broadband market at

~66% at Sept, 2014

Source: ComReg Sept ‘14

66%

29%

5%

eircom

Cable

Other

© eircom

58.6 %57.5 % 59.0 % 57.7%

52.5 %

62.1 % 58.6 % 57.9 %

16.1% 15.7% 16.3% 17.0% 19.9% 19.2% 16.9%14.5%

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Prepay Postpay

15

2624

22

12 1214

19

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

331 357 381 403 415 427 441 460

735 702 676 675 657 629 624 630

1066 1059 1057 1,078 1072 1055 1065 1090

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Postpay Subscribers Prepay Subscribers

17.7 18.4 17.3 17.815.7 15.7 16.0 15.9

38.8 39.4 38.041.0

37.7 38.0 38.6 38.1

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Prepay Postpay

Mobile KPIs

21

1 Includes Mobile Broadband and M2M

Total Subscribers1 (000’s) Postpay Growth (000’s)

Annualised Mobile Churn (%) Prepay & Postpay ARPU1 (€)

• Strong growth in mobile base

in the quarter with net

additions of 25,000 customers

in the quarter

• Q2 postpay base of 460,000

customers increased by

58,000 YoY and 19,000 in the

quarter

• 42% of eircom subscribers

now on postpay contracts

compared to 37% as at

Dec’13

• Strong commercial

investment driving postpay

churn improvement to 14.5%

• New prepay proposition

driving stability in ARPU and

improvement in the base (up

6,000 compared to a 1,000

reduction in Q2 ‘14)

• 4G take-up driving continued

postpay ARPU stability

31% 34% 36% 37% 39% 40% 41% 42% 14.0% 14.8% 15.3% 15.8% 15.9% 16.2% 16.5%

Postpay market share - Q2 not yet available

% of postpay customers

© eircom

€84m €84m €79m

€71m€61m

€53m

€155m€145m

€132m

Q2 13 Q2 14 Q2 15

Non Pay Costs Pay Costs

5,444

3,765 3,458

Q2 13 Q2 14 Q2 15

FTE 9 day fortnight

Operating cost breakdown

Operating Costs1

FTE Headcount Evolution…

Notes 1 Opex includes indirect SAC but excludes cost of sales, non-cash pension charge, non-cash lease fair value credits, amortisation, depreciation, and exceptional items

FY13 excludes operating costs in relation to Phonewatch which was disposed of in May 2013

• Operating costs of €132 million are 9% lower than

same period last year and 15% down on Q2 ‘13

• Pay costs 13% lower year on year driven by

continued benefit from headcount reductions

• Non pay costs down 6% YoY

• Focus on delivering cost reduction target of €40m

in the current year

• FTE of 3,458 at end of Q2 compared to 5,444 as

at Dec ’12 – 36% reduction

• Surpassed target set over two years ago of 3,500

FTEs by December 2014

22

© eircom

€44m€54m

€46m €47m €49m

€87m

€39m €43m

€27m

€45m

€28m €28m €21m

€19m

€14m€14m

€71m

€99m

€73m €75m€70m

€107m

€53m€56m

Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15

Non-NGA NGA

Capex breakdown by quarter to December ‘14

23

Capex % Revenue

1 Table represents incurred capex

18%

21%

30%

23% 23% 22%

• Incurred capex of €56m

in Q2 represents 18%

of revenues

o NGA rollout on

track with

1,100,000

premises passed

o Expect run rate to

increase in Q3 and

Q4

• FY15 incurred capex

expected to be approx

21%-23% of Revenue

34%

17%

© eircom

Operating €45m

Financing -€71m

€155m

€10m €12m€5m

€65m €6m

€199m

€226m

€244m

€173m

0

50

100

150

200

250

300

350

400

450

June FY14Cash

EBITDA CashCapex

VL Costs Paymentprovisions

Other Cash beforefinancing

NetInterest

Financing Dec FY15Cash

Strong cash balance of €173m1 at

December 14 despite significant capex investment

24

Notes: 1 Includes eircom share of Tetra cash of €10.5m 2 Other of €5 million includes tax €(8)m, financial restructuring costs of €(3)m offset by working capital/restricted cash of +€5m. 3 Financing costs of €6 million relates to repayment of Tetra debt of €4.2m and Amend & Extend fees of €1.3m

Working capital initiatives commenced to drive improvements to operating cashflow

© eircom

Agenda

Trading Q2 and YTD FY 14/15

Key business initiatives FY15

Q&A

Business update

Economic update

25

Business highlights

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Key business initiatives FY15

• Continue investment in scalable, flexible network

• Execute bundling & convergence strategy

• Deliver improved customer experience

• Continue efficiency drive

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NETWORK

BUNDLING

CUSTOMER EXPERIENCE

EFFICIENCY

Q&A

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Appendix

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© eircom

YTD YTD YTD YTD YTD YTD

FY 14 FY 14 FY 14 FY 15 FY 15 FY 15

Fixed Revenue 499 (8) 491 474 (8) 466

Mobile Revenue 180 - 180 178 - 178

Eliminations (22) - (22) (23) - (23)

Total Revenue 657 (8) 649 629 (8) 621

Operating Costs incl. cost of sales (421) 3 (418) (403) 3 (400)

Adjusted EBITDA 236 (5) 231 226 (5) 221

Cash 246 (10) 236 173 (10) 163

Year to date

Reported

Management

Tetra

Adjustment Statutory

Reported

Management

Tetra

Adjustment Statutory

Q2 Q2 Q2 Q2 Q2 Q2

FY 14 FY 14 FY 14 FY 15 FY 15 FY 15

Fixed Revenue 251 (5) 246 236 (4) 232

Mobile Revenue 94 - 94 91 - 91

Eliminations (11) - (11) (11) - (11)

Total Revenue 334 (5) 329 316 (4) 312

Operating Costs incl. cost of sales (219) 2 (217) (204) 1 (203)

Adjusted EBITDA 115 (3) 112 112 (3) 109

Cash 246 (10) 236 173 (10) 163

Quarter 2

Change in Accounting Policy

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• The Management Accounts presented within this presentation include the proportionate consolidation of the Group’s share (56%) of the results of Tetra

Ireland Communications Limited (“Tetra”)

• On 1 July 2014, the Group adopted IFRS 11 which requires that the group’s joint venture s are incorporated into the consolidated financial statements using

the equity method of accounting rather than proportionate consolidation. Under the new standard the statutory financial statements are prepared using the

equity method of accounting and therefore now present the results of Tetra as an investment in a joint venture.

• In order to allow comparability of group financial information, the financial results of Tetra will continue to be consolidated on a proportionate basis within

investor presentations and within the management’s discussion and analysis section of the quarterly reports.

Thank you

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