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
Jun 11 Dec 11 Jun 12 Dec 12 Mar 13
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%
Jun 11 Dec 11 Jun 12 Dec 12 Mar 13
29%
22% 23%
18%16%
Jun 11 Dec 11 Jun 12 Dec 12 Mar 13
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%
Jun 11 Dec 11 Jun 12 Dec 12 Mar 13
© 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
Trading Q3 and 9 Months YTD FY 12/13
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%
FY10A FY11A FY12A H1 FY13 9M toMar 13
Prepaid Postpaid
28.8 25.921.6 19.4 19.0
67.6
51.345.3 41.8 41.1
FY10A FY11A FY12A H1 FY13 9M toMar 13
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
FY10A FY11A FY12A H1 FY13 9M toMar 13
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
FY10A FY11A FY12A H1 FY13 3M toMar 13
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
Business Update
Trading Q3 and 9 Months YTD FY 12/13
Corporate Update
Key Areas of Focus
Q&A
25
© 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
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© eircom
Business Update
Trading Q3 and 9 Months YTD FY 12/13
Corporate Update
Key Areas of Focus
Q&A
28
© 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
© eircom
Business Update
Trading Q3 and 9 Months YTD FY 12/13
Corporate Update
Key Areas of Focus
Q&A
30
Thank you