12/11/2015
  • Third quarter 2015 shows first consolidated results of the combined Tele Columbus and primacom Group
  • Consolidation effective from 1 August 2015 – with a two months primacom impact on the total results for Q3 2015
  • EUR 73.9 million of revenues, Normalised EBITDA of EUR 36.9 million resulting in a Normalised EBITDA margin of 49.9%
  • In the first 9 months 2015, Tele Columbus reached EUR 181.9 million of revenues, Normalised EBITDA of EUR 89.0 million (EBITDA margin of 48.9%)
  • Capital expenditures of EUR 21.0 million in the third quarter
  • 83 million homes connected with 57% of households connected to two-way upgraded networks and own signal at the end of Q3
  • 60 RGUs per subscriber and total blended ARPU of EUR 14.90

Berlin, 12 November 2015. Following the acquisition of PrimaCom Holding GmbH (“primacom”), Tele Columbus AG (“Tele Columbus” or “Company”), the third largest German cable network operator, has published for the first time consolidated results of the combined Tele Columbus and primacom Group. In the third quarter 2015, effected by the primacom results for August and September, Tele Columbus reached revenues of EUR 73.9 million. In the same period, Normalised EBITDA amounted to EUR 36.9 million, resulting in a Normalised EBITDA margin of 49.9%. In total, Tele Columbus Group spent EUR 21.0 million capital expenditures in the third quarter – mainly for network upgrades and customer projects. On 30 September 2015, the Company served 2.83 million homes connected of which 57% were fully two-way upgraded and available for the own TV, Internet and telephony product portfolio.

The combination of Tele Columbus and primacom represents a strong number three player in the German cable market and an important player in the telecommunications and multimedia industry: As of 30 September, the Company served 1.87 million customers with 1.89 million Cable TV RGUs (Revenue Generating Units) and 397k Premium TV RGUs. In addition, the Internet RGUs amounted to 363k and telephony RGUs reached 352k.

“With the first consolidated financials for the combined Tele Columbus and primacom business, we opened a new chapter in the history of the company and laid the basis for the combined future”, says Ronny Verhelst, CEO of Tele Columbus. “In the past months, we have driven the integration of the combined organisation as fast as possible to be able to proceed on our growth path at increased speed as well as bringing together the financial reporting of both companies. With the core management team and main organisational structure in place, we are now ready for the planned integration of pepcom GmbH (“pepcom”), to take the company’s development to the next level.”

On 13 September 2015, Tele Columbus signed an agreement to purchase pepcom, the fourth largest German cable operator at the time. After receiving shareholder’s approval of a capital increase of up to 100% of the share capital at an extraordinary general meeting on 14 September 2015 and a successful rights issue with gross proceeds of EUR 382.7 million (through issuance of new share capital equal to 125% of the share capital prior to the rights issue, out of Tele Columbus’ existing Authorised Capital 2015/I and the approved EGM share capital) in November, the closing of the transaction is now expected for end of November and consolidation of the pepcom business is planned from 1 December 2015.

On 3 September 2015, Tele Columbus rolled out its 400 Mbit/s internet offering to the city of Jena, bringing the fastest download speed available in the German consumer market to approximately 20,000 incremental homes connected and following the first launch of approximately 40,000 homes in Potsdam in April 2015.

On 1 September 2015, Tele Columbus launched a new mobile offering including a voice flatrate to all German networks and a data connection with LTE highspeed of up to 50 Megabits per seconds and 2 Gigabyte data volume per month. With the new mobile service, Tele Columbus has turned into a quadruple play operator offering an all-inclusive package and single-source service for communications and entertainment.

Recent developments

In October and November 2015, Tele Columbus continued its growth strategy through the acquisition of regional network operators adding another approximately 30,000 fully upgraded homes connected to the customer base in Tele Columbus core regions. As the strong number three player in the German cable market, Tele Columbus will continue to actively pursue further smaller acquisitions to strengthen its portfolio.

On 1 October 2015, Tele Columbus launched a new HDTV push campaign offering a free three months trial of the encrypted private HD programmes to its customers. Due to its success, the campaign has been extended until the end of December 2015.

On 14 October 2015, Tele Columbus announced the new core management consisting of nine members in total reflecting the bigger size of the combined group. Ronny Verhelst and Frank Posnanski will continue in their roles as CEO and CFO, respectively, and management board members (“Vorstandsmitglieder”) for the combined group.

On 15 October 2015, Tele Columbus announced that it had entered into a cooperation agreement with ProSiebenSat.1 Group for Video on Demand (VoD) services. Starting from mid-2016, maxdome subscription VoD will become an important layer of Tele Columbus’ planned Advanced TV platform. With its planned Advanced TV platform, Tele Columbus will enhance the customer experience by further innovative features such as interactive, time-shift and multi-screen TV usage. Through the integration of maxdome to its platform, Tele Columbus customers will have access to movies, series and documentaries out of Germany’s largest online video library.

On 29 October 2015, the Tele Columbus AG received a new rating from rating agency Standard & Poor’s (‘S&P’) following the financing of the pepcom acquisition announced in September 2015. Based on the final capital structure, S&P has as expected reduced the Corporate Family Rating of Tele Columbus Group from the current ‘B+’ rating with negative outlook to a new ‘B’ rating with stable outlook following the pepcom acquisition.

On 4 November 2015, Tele Columbus internally announced that the Hanover administrative functions will be moved to Berlin and Leipzig within two years.

On 6 November 2015, Tele Columbus successfully completed its rights offering with gross proceeds of approximately EUR 382.7 million resulting in net proceeds of circa EUR 363.3 million. Respectively, Tele Columbus’ registered number of shares increased by 70,864,584 from 56,691,667 to 127,556,251. On the same day, Tele Columbus successfully accomplished its syndication of a January 2021 EUR 320 million First Lien Term Loan B and a July 2022 EUR 117 million Second Lien Term Loan.

Next steps

 

  • The integration of pepcom, upon closing, will be aligned with the primacom integration process
  • The Company intends to hedge the Euribor interest risk for a large portion of First Lien TLB and 2nd Lien loans
  • Tele Columbus plans to hold a first Capital Markets Day in March/April 2016

On the back of investment requirements over the next years for both companies and in view of increased leverage, there will be no dividend for FY2015 as previously communicated.

The management team is fully committed to successfully executing on the growth and integration story of the Tele Columbus Group and to delivering on the medium term leverage targets of 3.0-4.0x.

 

Additional information:

Release of preliminary Q4/full year results 2015: 21 March 2016

First Capital Markets Day: March/April 2016

 

Summary table for Q3 FY2014 / Q3 FY2015 and 9M FY2014 / 9M FY2015 respectively (including primacom for two months):

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