17062013 general investor presentation

7/27/2019 17062013 General Investor Presentation

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STRICTLY CONFIDENTIAL

ASIAN PAY TELEVISION TRUSTMANAGEMENT PRESENTATION

JUNE 2013


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STRICTLY CONFIDENTIAL PAGE

This presentation and the information contained herein (the "Presentation") are for information purposes only and do not constitute or form part of any offer or invitation for sale or the subscription or solicitation of anyoffer or invitation to purchase or subscribe for, or any offer to underwrite or otherwise acquire any units ("Units") representing undivided interests in Asian Pay Television Trust ("APTT" or the "Trust"), nor shall any part ofthe Presentation or the fact of its distribution or communication form the basis of, or be relied on in connection with, any contract, commitment or investment decision whatsoever in relation thereto in Singapore, the United

States, Canada, J apan or any other jurisdiction.

Although care has been taken to ensure that the information in this P resentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change without notice, its accuracy is notguaranteed and it has not been independently verified, and the Presentation may not contain all material information concerning the Trust or its subsidiaries. None of the Trust, the Trustee-Manager, the Underwriters nor

any of their respective members, directors, officers, employees, affiliates, advisers or representatives nor any other person makes any representation or warranty (express or implied) regarding, and assumes anyresponsibility or liability for, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of, or any errors or omissions in, any information or opinions contained herein. None of the Trust, the

Trustee-Manager, the Underwriters or any of their respective members, directors, officers, employees, affiliates, advisers or representatives nor any other person accepts any responsibility or liability (in negligence, orotherwise) whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith. The information set out herein may be subject to updating, completion,

revision, verification and amendment and such information may change materially. In furnishing the Presentation, the Trust, the Trustee-Manager and the Underwriters have not undertaken to provide the recipient(s) with

access to any additional information or updates. The information contained in this Presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated toreflect material developments which may occur after the date of the Presentation.

This Presentation and any materials distributed in connection with this Presentation contains statements that constitute forward-looking statements which involve risks and uncertainties, as they relate to events anddepend on circumstances that may or may not occur in the future. These statements include descriptions regarding the intent, belief or current expectations of the Trustee-Manager or its officers with respect to, among

other things, the consolidated results of operations, financial condition, liquidity, prospects, growth and strategies and future events and plans of the Trust. These statements can be recognized by the use of words such as

expects, plans, will, estimates, projects, or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results of operations, financial condition and liquidity may

differ materially from those made in or suggested by the forward-looking statements contained in this P resentation as a result of various factors and assumptions. You are cautioned not to place undue reliance on theseforward looking statements, which are based on the current view of the Trustee-Manager on future events. No assurance can be given that future events will occur, that projections will be achieved, or that assumptions arecorrect. The Trustee-Manager does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise.

This Presentation is not for distribution, directly or indirectly, in or into the United States, Canada, Japan or any other jurisdiction where it is unlawful to do so. This Presentation is not an offer of securities for sale into theUnited States, Canada, J apan or any other jurisdiction where it is unlawful to do so. The Units have not been and will not be registered under the Securities Act, and may not be offered, sold or delivered within the United

States or to U.S. persons except pursuant to registration under or an applicable exemption from or in a transaction not subject to the registration requirements of the U.S . Securities Act. Accordingly, the Units will only be

offered and sold to non-U.S. persons outside the United States (including to institutional and other investors in Singapore) in reliance on Regulation S under the Securities Act and within the United States to qualifiedinstitutional buyers in reliance on Rule 144A under the Securities Act. No money, securities or other consideration is being solicited, and, if sent in response to this Presentation or the information contained herein, will not

be accepted. There will be no public offering of the Units in the United States.

By reviewing this Presentation, you are deemed to have represented and agreed that you and any persons you represent are either (a) qualified institutional buyers (within the meaning of Regulation 144A under theSecurities Act), or (b) not a U.S. person (as defined in Regulation S under the Securities Act) and are outside of the United States.

IMPORTANT NOTICE AND DISCLAIMER


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2

INTRODUCTION1


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STRICTLY CONFIDENTIAL PAGE

SNAPSHOT OF APTT

Macquarie APTTTrustee-Manager

Sponsor /Trustee-Manager

Trustee-Manager is a wholly-owned subsidiary of Macquarie Group, which manages global

infrastructure funds with A$97 billion of assets under management

Independent directors comprise majority of the Board of Directors (4 out of 6) Intends to distribute 100% of its Distributable Free Cash Flows

Anchor asset at li st ing was TBC Group, one of the leading, in tegrated cable operators

in Taiwan offering Cable TV and Broadband services

BasicCable TV

Core service of TBC Group with 751K RGUs1

Sole cable TV provider in 5 franchise areas covering ~1.1 million households

Up to 105 TV channels, including all of top 20 channels in Taiwan

PremiumDigital

Cable TV

110K RGUs and 15% Premium Digital Cable TV penetration1

Increasing take-up through promotional STB, in-line with Taiwan government objectives

Up to 73 additional channels, including 19 HD channels, through MPEG4 platform

Broadband

175K RGUs and 23% Broadband penetration1

100% DOCSIS 3.0 enabled HFC network

Offers 120 Mbps Broadband service, fastest residential service in Taiwan1

S$309 million of revenue 6 years of consistent growth

64.0% asset EBITDA margin2 superior profitability, 6 years of consistent margin increase

15.0% capex to revenue ratio network upgrade to 870MHz, expected to drop to 12.5% in 2014

Keyfinancials

(2012)

Source: TBC Group

1. As at 31 Dec 20122. Asset EBITDA margin is a non-IFRS measure. See footnote 1 on page 7
http://www.tbc.net.tw/en2/index.php


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TBC GROUPHIGHLIGHTS

2


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Sole provider of Cable TV services in highly attractive franchise areas

Growth potential from Broadband, Premium Digi tal Cable TV andChannel Leasing

Superior track record of product innovation and marketing

Resilient business model with efficient cost structure

Substantially invested, advanced HFC network with state-of-the-artdelivery platform

High barriers to entry

TAIWANS LEADING PAY-TV OPERATOR

1

2

4

6

3

5



TBC Group franchise areas

Source: TBC Group

1. As at 31 Dec 2012

SOLE PROVIDER OF CABLE TV SERVICES INHIGHLY ATTRACTIVE FRANCHISE AREAS

Sole cable TV provider in franchise areas with highlyattractive demographics

~1.1 million households; 68% penetration by TBC Group1

Limited competition from IPTV and DTH operators

TBC Group franchise area highlights

Include major railway and road transport arteries of Taiwan Proximity to Taiwan Taoyuan International Airport and Taipei

Growth of industrial parks and manufacturing facilities

Increasing population due to workforce seeking employment in

TBC Groups franchise areas

1

Number of households

CAGR (2007-2012)

TBC Groupfranchise areas

Taiwanaverage

2012 nominal GDP/capita

(NT$000)

TBC Groupfranchise areas

Taiwanaverage

31% higher

Source: IMF, Taiwans Department of Statistics, Media Partners Asia

Strong macroeconomic fundamentals i n Taiwan

Recovery of real GDP growth from 2013 onwards:

1.3% in 2012 vs. 3.9% in 2013E and 4.5% in 2014E

Young demographic driving pay-TV and broadband consumption:

69% of population is below 50 years old as of 2012

780 597 2.4% 1.6%



Source: TBC Group. Note: MIIF filings (figures for 2006 to 2009); assumes FX (NTD-S$) of 0.0422 from 2006-2009

1. Asset EBITDA and Asset EBITDA margins are non-IFRS financial measures. Asset EBITDA represents EBITDA plus the LTIP expenses, management fee expenses, off-shore holding company expenses

(which include the Pre-Listing LTIP expenses at Cable TV S.A., salaries for some members of management (for 2010 and 2011 only) pursuant to a reimbursement agreement, audit, legal, accounting andtax fees, and general administration costs), T rust expenses, Trustee-Manager fees and other operating income (loss), less bank charges (including bank service fees for subscription fee collection and bank

handling charges for money remittance or transfers). Asset EBITDA margin is calculated by dividing Asset EBITDA by revenue

RESILIENT BUSINESS MODEL WITH EFFICIENT COSTSTRUCTURE

Basic Cable TV RGUs (000)

Revenue (S$mm)

Consistent growth, competing effectively against alternativepay-TV platforms and withstanding economic downturns

Utility-like, subscription-based business model withsubstantially all payments made in advance

2006 12 Revenue CAGR: 3.4%

2006 12 Basic Cable TV RGU CAGR: 2.0%

2

Continuous asset EBITDA margin expansiondue to scalable and efficient cost structure

Asset EBITDA (S$mm) and Asset EBITDA margin 1

Key operating dri vers supporting cos t efficiency

Majority of popular channels are local inexpensive content

Lack of killer content resulting in strong negotiating position

Headroom in network capacity allowing provision of additionalservices at limited incremental cost

Decline in average churn rate from enhanced customerexperience and strong customer loyalty

Resilient business w ith 6 years of consistent YoYgrowth in Basic Cable TV RGUs and revenue

665689

713 725738 749 751

2006 2007 2008 2009 2010 2011 2012

252.0 259.8 270.4280.5 298.7

304.8 308.7

2006 2007 2008 2009 2010 2011 2012

146.6 155.0164.7 172.1

185.3 194.3197.7

105.3 104.8 105.8 108.4 113.4 110.5 111.0

58.2% 59.7%60.9% 61.4% 62.0%

63.7% 64.0%

2006 2007 2008 2009 2010 2011 2012

Asset EBITDA Total costs Asset EBITDA margin



29.4%

22.0%19.6%

16.3% 15.8% 15.0% 15.0% 13.0% 12.4% 12.1% 10.8%

Competitor

1

Competitor

2

Competitor

3

Competitor

4

Competitor

5

Competitor

6

Competitor

7

Competitor

8

Competitor

9

Competitor

10

Source: TBC Group, public corporate filings1. Includes certain one-off capital expenditures related to 870MHz network upgrade

2. Peers with mobile operations are adjusted for handset revenue and capitalized SAC

SUBSTANTIALLY INVESTED, ADVANCED HFC NETWORKWITH STATE-OF-THE-ART DELIVERY PLATFORM

Ownership of HFC network and fiber backbone allows TBCGroup to operate independently of third-party networks

Covers substantially all of 1.1 million households in TBCGroup's franchise areas

All three services are offered over one network

Advanced HFC Network

Approximately 98% of network operates at 750 MHz

Completion of upgrade to 870 MHz (from 750 MHz) by

end of 2014 for additional channel capacity and fasterBroadband service

100% DOCSIS 3.0 enabled, fully supporting 120MbpsBroadband services

MPEG4 delivery platform set up as early as 2009

Better video quality

Greater video transmission capacity

More efficient provision of value-added features such asHDTV and DVR services

TBC Group capital expenditureKey highlights

TBC Group has low capex spending2

Aver age capex as % of revenu e in 2010-2012

Aver age (ex-TBC Group): 16.9%

3

33.7 32.9

46.4

11.3% 10.8%

15.0%1

2010 2011 2012

Total Capex (S$m) Capex as a % of Revenue



Source: Media Partners Asia, AC Nielsen

HIGH BARRIERS TO ENTRY

Top 20 channels in Taiwan (2012)

4

Sanlih Taiwan Channel

Sanlih City Channel

TVBS-News

ETTV News

Formosa TV

Star Chinese Movies

Videoland Drama

Star Chinese Channel

Cti News

ET Movies

Sanlih E-Television News

ET Variety

Taiwan TV

Cti Variety

GTV Entertainment

YOYO TV

ET Western Movies

Videoland Sports

ERA News

GTV Drama

Cable TV will continue to be the dominant TV platform

Superior content portfolio at competitive pricing Affordable services

Adoption of superior technology by operators

Political, structural and technological disadvantages of

IPTV in Taiwan

Pay-TV subscription revenue share by platform

Barriers to entry against new cable entrants

Network roll-out requirements

Long relationships with subscribers; brand awareness

Strong understanding of Taiwan viewers preferences

Application process for a new license

CableTV89%

IPTV11%

DTH

1%

CableTV93%

IPTV

6%

DTH

1%

2012 2017E

Competitor 1Competitor 2


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Source: Media Partners Asia, TBC Group

GROWTH POTENTIAL FROM BROADBAND,PREMIUM DIGITAL CABLE TV AND CHANNEL LEASING

Channel leasing is the largest component of TBC Groups non-subscription Basic Cable TV revenue

Substantial leverage against networks in negotiating fees as the sole cable operator in its franchise areas

TBC Group will likely enjoy stronger than average growth in next few years as rates for home shopping channels become standardised

Non-subscription Basic Cable TV revenue is expected to grow at 2012-14E CAGR of 8.1%

5

Impact on non-subscription Basic Cable TV revenue

2,8203,144

3,4693,750

4,150

2010 2011 2012 2013E 2014E

Taiwan channel l easing market is rapidly growing (NT$mm)

2012 17 Taiwan ch annel leasin g revenue CAGR: 7.5%

Growth in home shopping industry

Increase in number of home shopping networks

Cable TV distribution is expected to remain vital for channelproviders and home shopping companies

Competition for limited number of attractive channel slots



56

91

110119

132

7.5%

12.1%

14.7%15.7%

17.2%

2010 2011 2012 2013E 2014E

Source: Media Partners Asia, TBC Group

1. As at 31 December 2012


5

Premium Dig ital Cable TV RGUs (000) and penetration

2010 14 Premium Dig ital Cable TV RGU CAGR: 24.2%

Cross-selling initiatives

Promotionalset-topboxes

Launched in March 2012

Digital STB penetration at 25.6% comparedto CNS (15.5%) and Kbro (19.4%)1

55% digital STB penetration target by 2014

Premiumdigital

channels

7 free channels, including 2 HD channels

Better video quality across channels

Incentivizes customers to get Premium

Digital TV to access up to 73 additionalchannels, including 19 HD channels

Sales fol lowup /bundling

Attractive bundling promotions

Educates subscribers on usage and benefitsof digital TV

DVR service

Offered as part of bundling package as wellas stand-alone service

Leverages external hard disk drives which ismore cost efficient

Creates stronger customer loyalty

Digital cable TV penetration in Taiwan lower than that of

Korea, Singapore and Hong Kong

Regulatory push by NCC and government proposed 50%

digitisation target by 2015

Consumer preference for better quality video and interactive

services; growing number of HD television sets in Taiwan

In 2009, TBC Group re-launched its Premium Digital Cable TV

service on MPEG4 platform



Source: TBC Group, NCC1. As of J anuary 2012, when TBCs 12 Mbps services were upgraded to 15 Mbps; Primary Competitor pricing based on NCC data


2010 14 Broadband RGU CAGR: 7.2%

Fixed broadband penetration in Taiwan is increasing due to

rapidly growing demand for data

Competitive pricing and bundling with Cable TV

DOCSIS 3.0 enabled network that meets consumer demand

for high-speed internet

Approximately 57% of Broadband RGUs subscribes to 15

Mbps and above1

Introduction of low-speed services

Launch of standalone service

TBC Group o ffers faster speed at competitive pricing 1

TBC Group 5Mbps 8Mbps 15Mbps 25Mbps 60Mbps 120Mbps

PrimaryCompetitor

4Mbps 8Mbps 12Mbps 20Mbps 50Mbps 100Mbps

5

Broadband RGUs (000) and penetration

NT$/month

153165

175188

20220.8%22.0%

23.3%24.8%

26.2%

2010 2011 2012 2013E 2014E

399

699

799 809 859

1,099

799743

899939

999

1,399

0

200

400

600

800

1,000

1,200

1,400

1,600TBC Primary Competitor

SUPERIOR TRACK RECORD FOR PRODUCT



Source: TBC Group, public corporate filings

1. As at 31 December 2012; 2. TBC Group churn includes deactivations caused by failure to make payments

SUPERIOR TRACK RECORD FOR PRODUCTINNOVATION AND MARKETING

First cable TV operator to offer DVR servicesin Taiwan

First to offer free Promotional STBs in Taiwan

Offers fastest residential broadband service inTaiwan (120 Mbps)1

Innovation

Active up-selling of Premium Digital Cable TVand Broadband services

Enhanced customer loyalty

Bundling

Over 300 sales and customer service staffs1

Two 24-hour call centres providing one-stop-

shop solution for all services

Same day customer service

Information analysis to track customerpreferences

Customerservice

Low monthly Basic Cable TV RGU churn (%)

2012 churn comparison (%)2

Total RGU / Basic Cable TV RGU

Sales channels include inbound sales, directsales, outbound telesales and retail outlets

Maximise subscriber interaction throughCustomer Life Cycle model

Sales

6

2.0% 1.8% 1.8%1.3% 1.3% 1.1%

0.8%

1.28x 1.34x 1.38x

2010 2011 2012

0.76%0.75%

0.76%

2010 2011 2012

Competitor1

Competitor2

Competitor3

Competitor4

Competitor5

Competitor6


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14

FINANCIAL OVERVIEW4


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STRICTLY CONFIDENTIAL PAGE1

SUMMARY OF KEY FINANCIALS

(S$mm) 2010 2011 2012Forecast Year

2013Projection Year

2014

Revenue1

298.7 304.8 308.7 310.8 323.8

Basic Cable TV 246.4 245.6 246.0 245.6 251.2

Premium Digital Cable TV 4.4 8.4 11.6 12.7 16.2

Broadband 47.7 50.6 50.9 52.5 56.4

Total costs 113.4 110.5 111.0 110.4 112.9

Asset EBITDA2 185.3 194.3 197.7 200.4 210.8

% margin2

62.0% 63.7% 64.0% 64.5% 65.1%

Capital expenditure 33.7 32.9 46.4 49.4 40.5

% of revenue 11.3% 10.8% 15.0% 15.9% 12.5%

Notes: Forecast numbers based on the exchange rate as at the Latest Practicable Date of S$1.00:NT$23.90581. Includes other revenue in 2010, 2011 and 2012

2. Asset EBITDA and Asset EBITDA margin are non-IFRS financial measures. S ee footnote 1 on page 7


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Notes: Based on the exchange rate as at the Latest Practicable Date of S$1.00:NT$23.90581. Asset EBITDA is a non-IFRS financial measure. See footnote 1 on page 7

2. EBITDA is a non-IFRS financial measure;

3. Comprises Net offering proceeds, (Repayment) of borrowings to financial institutions / borrowings from financial institutions, and Other financing related costs and fees (non-recurring); represents net proceeds fromfinancial institution borrowings and the offering offset by repayment of Subordinated Debt and extraordinary costs (both of which are paid with offering proceeds) as well as amortization of new senior onshore debt

4. Cash trapped in TBC Group due to excess cash flow calculations (onshore debt covenant) which does not include withholding tax refund and differences arising from timing of withholding tax payment

(S$mm, unless otherwise stated)Forecast Year

2013Projection Year

2014

Asset EBITDA1 200.4 210.8

Less: Off-shore holding company expenses, Trust expenses,

Trustee-Manager fees; add bank charges(5.2) (9.0)

EBITDA2 195.1 201.9

Less: Capital expenditure (49.4) (40.5)

Less: Taxes paid (20.1) (16.6)

Add: Prepaid withholding tax refund 6.1 5.1

Less: Interest paid (47.1) (42.1)

Less: Net borrowings from financial institutions3 27.8 17.4

Less: Distributions to non-controlling interests (0.4) (0.4)

Distribu table free cash flow available for the year 112.1 124.7

Less: Adjustments to distributions attributable to the year4 (7.3) (6.2)

Distributions attributable to the year 104.7 118.5

Add: Excess cash available for distribution at the time of the offering 23.6 -

Total distributions payable to Unitholders 128.3 118.5

APTT DISTRIBUTIONS


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TBC Group debt balances

Note:1. As at 31 December 2012

2. Based on 2012 Asset EBITDA

DEBT STRUCTURE

(S$m)Pre-

Refinancing1Post

Refinancing

Subordinated Debt 165 -

Senior Debt 884 931

Total debt (drawn ) 1,049 931

Total debt (drawn) / Asset EBITDA2 5.3x 4.7x

Revolving credit facility (undrawn) 55 199

Term 7 years

TBC Group has restructured its debt to deleverage and

reduce cost of capital

A part of the IPO offering proceeds were used to repayoffshore USD Subordinated Debt and settle related crosscurrency interest rate swap break costs

The existing onshore senior debt was refinanced

As part of refinancing, TBC Group has secured a new

revolving credit facility of S$199 million to fund growth capital

expenditure and one-off income tax settlement

Leverage post the refinancing is conservative compared to

Taiwan cable operators and in-line with global peers

Interest rate hedging policy to be implemented

(minimum of 50%)


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CONCLUSION

5


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THE ASIAN PAY TELEVISION TRUST STORY

Sole Cable TV service provider in highly attractive franchise areas

Resilient business model with efficient cost structure

Substantially invested, advanced HFC network with state-of-the-art delivery platform

Strong and experienced local management team

World-leading Sponsor with substantial assets and experience in infrastructure investment

Highly experienced Trustee-Manager team

Growth potential from Broadband, Premium Digital Cable TV and channel leasing

Superior track record of product innovation and marketing

High barriers to entry


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APPENDIX6


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1. TM has the option to elect for Base Fee, Performance Fee, Acquisition Fee and Divestment Fee to be paid in the form of cash and/ or Units out of the Trust Property

2. TM has elected to receive 100% of Base Fee in cash for Forecast Year 2013 and Projection Year 2014, and 100% of Performance Fee in cash for Projection Year 2014

3. Base DPU defined as FY2014 forecast DPU4. CPI Adjusted Base DPU is defined as Base DPU after adjusting upwards for the cumulative percentage increase in the Taiwan CP I following each financial year post Projection Year 2014

5. In the event where Excess DPU is less than zero, such deficit shall be brought forward to subsequent periods to be offset from any Excess DP U before any Performance Fee can be paid

TRUSTEE-MANAGER FEES AND CHARGES

Payable by the Trust to

Trustee-Manager (TM) Amount payable

Base fee1,2 Fixed fee of S$7.0m p.a., subject to % increase in line with Singapore CPI

With an upward adjustment if the Trust makes an acquisition

With a downward adjustment if the Trust makes a divestment

Performance fee1,2

* Forecast Year 2014, Excess DPU =Actual DPU less Base DPU3,5

* Years following Forecast Year 2014, Excess DPU =Actual DPU less CPI Adjusted Base DPU 4,5

Acquisi tion fee Where Sponsor has direct or indirect interests of >50.0% in any investments acquired by the Trust

0.5% (or such lower %) of EV of the investments

All other cases, 1.0% (or such lower %) of the EV of any investments

Divestment fee

0.5% (or such lower %) of the EV of any investments sold by the TrustTermination fee If TM is removed by an Extraordinary Resolution within five years from the Listing Date,

1 years Base Fee based on its effective date of its removal and without any further adjustment

Excess DPU tranche Fee on excess DPU tranche

1. 1st 25% of excess DPU* 3.0%

2. Next 25.0% of excess DPU* 6.0%

3. Subsequent 25% of excess DPU* 12.0%

4. excess DPU* >75% 18.0%

17062013 general investor presentation

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