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Credit Analysis of UPC Broadband
Credit Analysis of UPC Broadband
Executive Summary
• Cable television service provider UPC Holding operates in a relatively non-cyclical industry and has business
interests that are geographically diversified across Europe. This combination of diversity and low-cyclicality
should continue to provide a stable stream of revenues, earnings and cash flows.
• The markets in which UPC Holding operates are undergoing structural growth as consumers upgrade their TV
packages and sign-up for broadband internet, allowing the company to increase revenues and EBITDA over time.
With declining capital intensity of the business, the company should also experience growing free cash flow in
the coming years.
• UPC Holding has a consistent capital structure policy of maintaining net leverage between 4-5x EBITDA. The
clear communication of this strategy to debt and equity holders and the presence of maintenance and incurrence
financial covenants provides reinforcement of this policy.
• UPC Holding is part of a wider-group and parent company Liberty Global Inc currently has a $2.6bn liquidity
buffer which could potentially be invested in UPC Holding if necessary.
• The company has no near-term debt maturities and has recently proven its ability to refinance debt principal by
terming-out its debt in early 2009 when the credit markets were closed to most high-yield borrowers.
• With a current price of 464bps, the 5yr CDS trades at a premium to the iTraxx Crossover index (currently
387bps) and has exhibited significantly lower historical volatility.
• The main downside of investing in UPC Holding CDS is that no deleveraging is expected – all excess cash flow is
likely to be utilised for either acquisitions or dividends. In addition, in the event of a default recoveries to
unsecured creditors may be negatively impacted by the presence of senior-secured debt in the capital structure.
Given these factors, this paper recommends to SELL 5yr CDS protection on UPC Holding at the current price of 464bps.
Business Description
UPC Holding BV is the holding entity for a number of cable television and telecommunications networks, mainly located
in Europe but also in Chile. The company offers: multichannel television in analogue and digital formats - the latter also
including high-definition, video-on-demand, and personal-video-recorder services for premium subscribers; high-speed
broadband – up to 128Mbit/s across most of the network; and fixed-line telephony services. The company owns a
network which passes, in aggregate, 16.8m homes of which 9.9m are UPC subscribers. In FY10 UPC Holding
generated EBITDA of €1.8bn (+9.8% yoy) on revenue of €3.7bn (+8.3% yoy) at a margin of 47.5%. Figure 1.1, below,
shows how The Netherlands and Switzerland together contribute nearly half of group revenues, with Chile (80%-owned)
generating 16% and the remainder from a number of different European markets (including Ireland, Austria, Poland,
Hungary, Czech Republic and Slovakia). Although UPC Holding offers broadband and telephony services, the company
is primarily a cable television operator, with 92% of all subscribers purchasing either an analogue or digital TV package.
UPC Holding does not produce any proprietary television content, preferring instead to distribute the channels produced
by third parties.
22%
58%
22% 19%
17%
The Netherlands Switzerland Other Western
Europe
Central & VTR (Chile)
Eastern Single-play Double-play Triple-play
Europe
Figure 1.2, above, shows how the majority of customers purchase only one service – this is usually analogue television –
from UPC Holding BV. Management believe that by upgrading these customers to more expensive digital television and
selling them additional services (broadband and telephony), UPC Holding BV should be able to increase its revenues and
earnings. Figure 1.3, below, shows that this trend of selling additional services is already in progress, with UPC
customers purchasing – on average – 1.66 services each, compared to 1.37 services each in 2Q07. Figure 1.3 also
suggests this trend may have much further to run because Virgin Media currently sells 2.58 services to each subscriber 1.
This trend to purchase additional services has also positively impacted monthly ARPU, having increased to €32.6 at
present from €25.9 in 2Q07. Again, Virgin Media's current ARPU of €53.9 per month provides evidence that this trend
could continue for much longer.
Fig 1.3: Products per User Fig 1.4: M onthly Revenue per User
2.8 €60
2.6 €55
€50
2.4
€45
2.2
€40
2.0
€35
31.9 32.6
1.8 30.8
29.6
1.64 1.66 €30 27.3 28.1
28.3 28.0 28.1 28.3 29.0
1.60 1.62 25.9 26.0 26.7
27.1
1.56 1.58
1.6 1.49 1.52 1.53 1.55
1.44 1.46 1.48 €25
1.38 1.41
1.4
€20
1.2 €15
1.0 €10
3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 Virgin Media 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 Virgin Media
2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10
Evidence suggests that telecommunications services are relatively non-cyclical, with consumers viewing these as essentials.
Research from OFCOM, the UK telecommunications regulator, found that consumers across a number of countries are
Structure
As at FY10 UPC Holding BV had total gross leverage of 4.5x EBITDA, down from 4.8x a year earlier. Net leverage is
similar at 4.4x due to the low cash balance. However, the company does have access to additional liquidity in the form
of €820m of undrawn bank facilities. In-line with the parent company leverage target of 4-5x, UPC Holding BV has
historically maintained total net leverage in the range of 4.25-4.75x and this should be expected to continue in the
future. The company's capital structure is made up of a mix of unsecured bonds and senior-secured bank debt, with net
leverage through the senior debt currently at 3.5x (vs 3.8x at FY09). These leverage metrics compare to an enterprise
value of parent company Liberty Global Inc which is currently 6.6x EBITDA.
UPC Holding is subject to a number of covenants with respect to both the senior-secured bank debt and the unsecured
high yield bonds. With respect to the senior bank debt, UPC Holding is subject to financial covenants that require the
ratio of net senior debt to last half annualised EBITDA to be maintained below 4x at each quarter end and the ratio of
EBITDA to cash interest to be maintained above 3x. Any breaches of such covenants may be cured via the injection of
additional shareholder loans or equity. Although such covenants are not applicable to the unsecured debt, unsecured
lenders benefit from them indirectly to the extent that so long as the bank loans are outstanding UPC Holding is prevented
from deteriorating its credit metrics beyond the levels allowed by the covenants. With respect to the unsecured bonds,
UPC Holding is subject to covenants that limit debt incurrence to a maximum of 5x EBITDA, and prevent any shareholder
distributions should leverage rise above 5x.
UPC Holding hedges foreign exchange and interest rate risk using a combination of cross-currency interest rate swaps,
currency forwards, interest rate swaps and interest rate caps/collars. The company stated that as at Dec-10, all the debt
was directly or synthetically matched to the functional currencies of the underlying operations, effectively eliminating the
risk of leverage metrics being impacted due to changes in FX rates. The company also stated that its debt was hedged
such that 83% of interest expenses are currently in fixed rate format, with maturities on the swaps, caps and collars
generally corresponding to the maturity dates on the underlying floating rate debt. Consequently, the exposure of UPC
Holding's income statement and balance sheet to changes in FX and interest rates is likely to be relatively limited.
UPC Holding is a holding company within the group and therefore structurally subordinated from the operating assets. In
addition, the senior-secured bank debt is an obligation of operating entities and also benefits from contractual priority in
the event of default. Consequently, should UPC Holding default, the CDS recovery rate may be negatively impacted by
the priority afforded to senior-secured bank lenders. This risk is mitigated by the low probability of default given the
structural growth in the broadband and digital-TV markets and the significant geographic diversity of the business. In
addition, there is lack of near-term debt maturities – as shown in figure 1.6 - with no significant repayments falling due
until FY16. UPC Holding has also proved it has the ability to refinance its debt during challenging credit market
conditions, having in May 2009 extended the maturity on €1.2bn of bank debt from 2014 to 2017, a time when the
high yield markets were closed to many other borrowers. Finally, shareholder Liberty Global Inc has $2.6bn of
unencumbered cash held at the parent company level, which could be used to support UPC Holding BV (or its other
5 Fig 1.12, page 30, OFCOM International Communications Market Report 2010:
http://stakeholders.ofcom.org.uk/binaries/research/cmr/753567/icmr/ICMR_2010.pdf
subsidiaries) if necessary.
Fig 1.5: Historical Leverage Fig 1.6: Debt M aturity Profile
5.00x €3000m
4.75x
€2500m
4.50x
4.25x
€2000m
4.00x
3.75x €1500m
3.50x
€1000m
3.25x
3.00x
€500m
2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10
1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10
Net Net Senior €0m
Debt/EBITDA Debt/EBITDA
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Financials
In FY10 UPC Holding recorded revenue of €3.74bn, an increase of 8.3% from FY09. However, this number benefited
from FX translation effects, mainly due to the strength of the Swiss Franc and Chilean Peso. Adjusting for this impact,
revenue increased at a rate of 3.1% over the prior year. The major driver of this performance was The Netherlands unit,
where the company has seen significant traction in the market for its high-speed broadband and premium television
offerings, signing-up 140k and 102k new subscribers for each of these services. This consequently led to revenue growth
of 6.6% vs FY09. The weakest performer was the Central & Eastern Europe unit, which saw currency-adjusted revenue
growth of only 0.5% from FY09. This was due to competition as operators increased discounts on bundled products and
some down-trading as consumers selected lower-priced tiers of service. This revenue growth translated into EBITDA
growth of 9.8% to reach €1.77bn. After adjusting for FX effects, EBITDA increased by 2.3% vs FY09. Although – with
the exception of programming and interconnection expenses – costs for UPC Holding are relatively fixed, the company
failed to see any benefit of operating leverage when the results are viewed from a currency adjusted perspective. The key
reasons for this were: a new revenue tax in Hungary, the refurbishment of some customer premise equipment, and an
increase in marketing staff to support subscriber growth.
The company has not yet reported full financial statements for FY10; however, it is expected that UPC will report capital
expenditure of €881m, cash tax of €6m and a working capital inflow of €67m. Together with a number of other cash-
flow statement items reported in the first nine months, operating cash flow less capex is expected to equal €1041m. This
compares to forecast cash interest payments of €396m, giving an estimated debt service cover ratio of 2.6x. Note that
debt principal repayments have been excluded from this calculation as UPC Holding typically voluntarily refinances debt
well in advance of its maturity date, rather than waiting for the principal to fall due. This trend is expected to continue.
Fig 1.7: Debt Service Coverage Ratio FY06 FY07 FY08 FY09 FY10E FY11E FY12E FY13E FY14E
Cash from Operations (€m) 932.2 867.2 990.7 973.7 1520.3 1415.3 1457.8 1500.2 1552.1
Purchases of Property, Plant and Equipment (€m) -778.0 -891.1 -979.5 -853.9 -881.3 -890.1 -899.0 -908.0 -917.1
Cash Interest Paid (€m) 309.0 403.0 538.8 376.4 396.4 436.2 465.4 493.2 509.1
Cash Interest Received (€m) 10.1 46.3 23.2 16.0 6.0 0.4 1.5 2.8 4.0
Pre-debt Service Cash Flow (€m) 473.3 425.4 573.2 512.2 1041.4 961.7 1025.6 1088.1 1148.1
Cash Interest Paid (€m) -309.0 -403.0 -538.8 -376.4 -396.4 -436.2 -465.4 -493.2 -509.1
Debt Service Coverage Ratio 1.53x 1.06x 1.06x 1.36x 2.63x 2.20x 2.20x 2.21x 2.26x
For the financial forecasts revenue growth is modelled at 3.2% per annum. This is based upon the assumptions that the
company can: (1) limit the loss of analogue TV subscribers to 150k per annum; (2) add 450k new digital
TV/broadband/telephone subscribers each year; and (3) increase average revenue per user at a rate of 4.25% per
annum. Although UPC Holding is expected to have a lower number of customers, revenue is expected to be greater as
the remaining customers purchase more services (RGUs) each, and also more expensive services.
Fig 1.8 FY08 FY09 FY10E FY11E FY12E FY13E FY14E FY15E
Unique Customers 10.50 10.16 9.93 9.78 9.63 9.49 9.35 9.21
RGUs 15.92 16.05 16.43 16.88 17.33 17.78 18.23 18.68
RGUs/User 1.52 1.58 1.66 1.73 1.80 1.87 1.95 2.03
Monthly ARPU 27.93 28.12 31.23 32.88 34.44 36.08 37.79 39.59
Monthly Price/RGU 18.18 17.94 18.96 19.04 19.14 19.25 19.37 19.5
As shown in the figure 1.8, even in FY15 the subscriber metrics would still be substantially lower than that recorded in
FY10 by Virgin Media. With some of the cost increases seen in FY10 due to one-off step-changes, it is expected that
UPC Holding will again begin to experience the benefit of operating leverage, with EBITDA growth slightly outpacing that
of revenue over the coming years, at a rate of 3.6% per annum.
Given that in FY09 the company completed a major upgrade of its network to deliver high-speed broadband services it is
expected that the capex intensity of the business gradually declines over time, having already fallen from 28% of revenue
in FY08 to an expected 23% in FY10. This, along with rising EBITDA, should contribute to a stable debt service
coverage ratio during the coming years. However, this will partially be offset by increasing interest expense as the
company takes on additional indebtedness in order to maintain balance sheet leverage within the target range of 4-5x
EBITDA. The proceeds of such additional indebtedness are most likely to be used to finance shareholder distributions,
though the company may also make acquisitions.
Cash taxes paid are expected to remain relatively low due to the benefits of the interest shield and significant net
operating loss carry-forwards, while working capital ratios are expected to remain constant.
Historical and forecast financial statements and credit ratios are included as an appendix.
300
200
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v-1
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Feb
Feb
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Feb
Jun
Ma
Ma
No
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Figure 1.10 shows how UPC Holding has the second-highest CDS premium of the European cable television sector,
despite leverage metrics that are comparable to a number of other operators. In addition, only Unity Media, Telenet and
UPC Holding benefit from the $2.6bn liquidity buffer held at their parent company, Liberty Global Inc. Over time, given
that Telenet, Unity Media and UPC Holding are all part of the same group and therefore subject the same overall
leverage policy, it should be the case that in the long-term leverage ratios and credit spreads converge to similar levels.
Therefore, it appears advantageous to prefer UPC Holding over Telenet and Unity, as the former should be expected to
suffer from this convergence, while the latter has a lower CDS price despite higher leverage and less geographical
diversity.
Conclusion
In summary, UPC Holding is a well-diversified business which is operating in a non-cyclical but growing sector. The
competitive position of the firm should lead, over time, to growing revenues, earnings and cash flows, enabling the
company to service its debt load and deleverage (if made necessary by external circumstances). The key risk of investing
in UPC Holding is the subordinated nature of the unsecured debt, which would likely impact upon recovery rates in the
event of default. As a risk this is mitigated by the stable leverage policy, the lack of near-term debt maturities, and the
proven ability of the company to refinance in challenging credit market conditions, each of which make default a
relatively low probability event. In conclusion therefore, this paper recommends to SELL 5yr CDS protection on UPC
Holding BV at the current price of 464bps.
Income Statement FY06 FY07 FY08 FY09 FY10E FY11E FY12E FY13E FY14E FY15E
Revenue (€m) 3,087.1 3,297.2 3,472.9 3,453.9 3,739.9 3,858.5 3,981.1 4,107.7 4,238.2 4,373.0
% growth 6.8% 5.3% -0.5% 8.3% 3.2% 3.2% 3.2% 3.2% 3.2%
Operating Expenses (€m) -1,238.9 -1,298.4 -1,267.2 -1,251.0 -1,347.0 -1,383.5 -1,421.1 -1,459.7 -1,499.3 -1,539.8
Gross Profit (€m) 1,848.2 1,998.8 2,205.7 2,202.9 2,392.9 2,475.0 2,560.0 2,648.0 2,739.0 2,833.1
% growth 8.1% 10.4% -0.1% 8.6% 3.4% 3.4% 3.4% 3.4% 3.4%
Gross Margin (%) 59.9% 60.6% 63.5% 63.8% 64.0% 64.1% 64.3% 64.5% 64.6% 64.8%
Selling Expenses (€m) -668.7 -599.2 -587.2 -555.2 -605.2 -622.8 -641.0 -659.7 -679.0 -698.8
Admin Expenses (€m) 0.0 0.0 0.0 0.0 0.0
Other Expense (€m) 22.1 -49.2 -31.5 -30.6 -12.2 -9.6 -10.0 -10.3 -10.6 -10.9
EBITDA (€m) 1,201.6 1,350.4 1,587.0 1,617.1 1,775.5 1,842.5 1,909.0 1,978.0 2,049.4 2,123.3
% growth 12.4% 17.5% 1.9% 9.8% 3.8% 3.6% 3.6% 3.6% 3.6%
EBITDA Margin (%) 38.9% 41.0% 45.7% 46.8% 47.5% 47.8% 48.0% 48.2% 48.4% 48.6%
Depreciation & Amortisation (€m) -1,021.8 -1,062.8 -1,079.9 -1,048.5 -995.8 -1,005.8 -1,015.8 -1,026.0 -1,036.2 -1,046.6
Impairment, Restructuring & Other Charges (€m) -17.7 -20.8 -119.8 -89.2 -13.5 -52.2 -52.2 -52.2 -52.2 -52.2
Operating Profit (€m) 162.1 266.8 387.3 479.4 766.2 784.5 841.0 899.8 961.0 1,024.6
% growth 64.6% 45.2% 23.8% 59.8% 2.4% 7.2% 7.0% 6.8% 6.6%
Operating Margin (%) 5.3% 8.1% 11.2% 13.9% 20.5% 20.3% 21.1% 21.9% 22.7% 23.4%
Finance Income (€m) 10.1 46.3 23.2 16.0 6.0 0.4 1.5 2.8 4.0 3.4
Finance Costs (€m) -886.8 -967.4 -1,079.8 -951.1 -860.1 -863.5 -869.6 -873.2 -863.5 -845.9
Finance Costs - net (€m) -876.7 -921.1 -1,056.6 -935.1 -854.1 -863.1 -868.1 -870.5 -859.5 -842.5
Other (Losses)/Gains (€m) 874.7 22.5 -369.3 -557.9 -662.2 0.0 0.0 0.0 0.0 0.0
Profit Before Income Tax (€m) 160.1 -631.8 -1,038.6 -1,013.6 -750.1 -78.6 -27.1 29.4 101.5 182.1
% growth -494.6% 64.4% -2.4% -26.0% -89.5% -65.5% -208.2% 245.7% 79.4%
Income Tax Expense (€m) -8.3 -12.6 -62.0 124.8 -60.7 -5.5 -1.9 -2.1 -7.1 -12.8
Tax Rate (%) 5.2% -2.0% -6.0% 12.3% -8.1% -7.0% -7.0% 7.0% 7.0% 7.0%
Profit from Continuing Operations (€m) 151.8 -644.4 -1,100.6 -888.8 -810.8 -84.1 -29.0 27.3 94.3 169.3
% growth -524.5% 70.8% -19.2% -8.8% -89.6% -65.5% -194.0% 245.7% 79.4%
Profit from Discontinued Operations (€m) 5.4 9.8 11.3 17.9 0.0
Net Profit (€m) 157.2 -634.6 -1,089.3 -870.9 -810.8 -84.1 -29.0 27.3 94.3 169.3
Minority Interest (€m) -0.3 9.2 20.1 16.8 -21.6 -2.5 -0.9 0.8 2.8 5.1
Profit Attributable to Owners of the Parent (€m) 157.5 -643.8 -1,109.4 -887.7 -789.2 -81.6 -28.2 26.5 91.5 164.2
Balance Sheet FY06 FY07 FY08 FY09 FY10E FY11E FY12E FY13E FY14E FY15E
Assets
Non-current Assets
Property, Plant & Equipment (€m) 3,812.4 3,863.2 3,974.4 3,864.3 3,969.5 3,853.9 3,737.1 3,619.1 3,500.0 3,379.7
Intangible Assets (€m) 6,041.3 5,608.1 5,411.8 5,207.0 5,391.1 5,365.0 5,338.9 5,312.8 5,286.7 5,260.6
Investments in Associates (€m) 31.1 30.7 32.1 32.1 32.1 32.1 32.1 32.1
Available-for-sale Financial Assets (€m) 340.4 0.0 0.0 0.0 0.0 0.0
Other Assets (€m) 336.4 303.5 302.9 315.2 298.0 298.0 298.0 298.0 298.0 298.0
Restricted Cash (€m) 319.2 330.2 318.2 0.0 0.0 0.0 0.0 0.0 0.0
10,531 10,094 10,050 9,735 9,691 9,549 9,406 9,262 9,117 8,970
Current Assets
Trade & Other Receivables (€m) 572.4 461.1 435.1 393.1 255.8 263.9 272.3 281.0 289.9 299.1
Deferred Income Tax Assets (€m) 41.4 49.0 36.3 36.3 36.3 36.3 36.3 36.3
Derivative Financial Instruments (€m) 3.6 155.3 134.1 107.6 57.2 57.2 57.2 57.2 57.2 57.2
Other Current Assets (€m) 388.8 92.2 78.9 66.8 95.5 95.5 95.5 95.5 95.5 95.5
Cash & Cash Equivalents (€m) 616.1 153.6 108.6 159.7 71.3 296.6 556.7 803.5 688.7 787.8
1,580.9 862.2 798.1 776.2 516.1 749.5 1,018.0 1,273.4 1,167.6 1,275.9
Assets of Disposal Group classified as held-for-sale (€m) 0.0 0.0 0.0 0.0 0.0
1,580.9 862.2 798.1 776.2 516.1 749.5 1,018.0 1,273.4 1,167.6 1,275.9
Total Assets (€m) 12,111 10,956 10,849 10,512 10,207 10,299 10,424 10,535 10,284 10,246
Liabilities
Non-current Liabilities
Borrowings (€m) 5,345.5 6,637.2 7,775.1 8,202.7 7,951.7 8,501.5 9,051.3 9,553.2 9,649.4 9,908.7
Deferred Income Tax Liabilities (€m) 95.1 75.3 87.1 10.9 0.0 0.0 0.0 0.0 0.0 0.0
Provisions for Other Liabilities & Charges (€m) 326.6 531.4 671.5 841.5 1,513.4 1,513.4 1,513.4 1,513.4 1,513.4 1,513.4
5,767.2 7,243.9 8,533.7 9,055.1 9,465.1 10,015 10,565 11,067 11,163 11,422
Current Liabilities
Trade & Other Payables (€m) 1,379.0 1,331.1 1,219.0 1,103.8 1,033.4 1,061.4 1,090.3 1,119.9 1,150.2 1,181.4
Borrowings (€m) 332.7 5.7 12.7 14.4 1.9 1.9 1.9 1.9 1.9 1.9
Derivative Financial Instruments (€m) 24.8 73.8 274.8 415.7 366.3 366.3 366.3 366.3 366.3 366.3
1,736.5 1,410.6 1,506.5 1,533.9 1,401.6 1,429.6 1,458.5 1,488.1 1,518.4 1,549.6
Total Liabilities (€m) 7,504 8,655 10,040 10,589 10,867 11,445 12,023 12,555 12,681 12,972
Total Equity & Liabilities (€m) 12,111 10,956 10,849 10,512 10,207 10,299 10,424 10,535 10,284 10,246
Cash Flow Statement FY06 FY07 FY08 FY09 FY10E FY11E FY12E FY13E FY14E FY15E
Cash Generated from Operations
Net Loss (€m) 157.2 -634.6 -1,089.3 -870.9 -750.1 -78.6 -27.1 29.4 101.5 182.1
Depreciation & Amortisation (€m) 1,021.8 1,062.8 1,079.9 1,048.5 995.8 1,005.8 1,015.8 1,026.0 1,036.2 1,046.6
Non-Cash Impairment & Restructuring Charges (€m) 17.7 20.3 118.9 90.5 13.5 26.1 26.1 26.1 26.1 26.1
(Profit)/Loss on Disposal of Property, Plant & Equipment (€m) -892.6 0.0 0.0 0.0 0.0 0.0
Tax Charge (€m) 8.3 12.6 62.0 -124.8 60.7 0.0 0.0 0.0 0.0 0.0
Share-based Payment (€m) 19.6 20.0 27.6 15.1 19.5 20.7 21.7 22.6 23.6 24.7
Operating Cash from Discontinued Operations (€m) 65.5 0.0 0.0 0.0 0.0 0.0
Finance Costs - net (€m) 876.7 921.1 1,056.6 935.1 854.1 863.1 868.1 870.5 859.5 842.5
Share of loss/(profit) from associates (€m) -9.9 9.2 0.0 0.0 0.0 0.0 0.0
Losses/(gains) on Derivative Instruments (€m) 42.7 -39.3 369.3 540.2 662.2 0.0 0.0 0.0 0.0 0.0
Changes in Working Capital:
Trade & Other Recievables (€m) -87.9 111.1 92.9 275.2 137.3 -8.1 -8.4 -8.7 -8.9 -9.2
Trade & Other Payables (€m) 33.8 -203.3 -176.4 -552.3 -70.4 28.0 28.8 29.6 30.4 31.1
1,252.9 1,279.9 1,541.5 1,356.6 1,922.5 1,857.0 1,925.1 1,995.4 2,068.4 2,143.9
Cash Interest Paid (€m) -309.0 -403.0 -538.8 -376.4 -396.4 -436.2 -465.4 -493.2 -509.1 -518.5
Cash Tax Paid (€m) -11.7 -9.7 -12.0 -6.5 -5.8 -5.5 -1.9 -2.1 -7.1 -12.8
Net Cash Generated From Operating Activities (€m) 932.2 867.2 990.7 973.7 1,520.3 1,415.3 1,457.8 1,500.2 1,552.1 1,612.6
Turnover Ratios
Total Asset Turnover 0.3x 0.3x 0.3x 0.3x 0.4x 0.4x 0.4x 0.4x 0.4x 0.4x
Fixed Asset Turnover 0.8x 0.9x 0.9x 0.9x 0.9x 1.0x 1.1x 1.1x 1.2x 1.3x
Equity Turnover 0.7x 1.4x 4.3x -44.6x -5.7x -3.4x -2.5x -2.0x -1.8x -1.6x
Profit Margins
Gross Profit Margin 59.9% 60.6% 63.5% 63.8% 64.0% 64.1% 64.3% 64.5% 64.6% 64.8%
EBITDA Margin 38.9% 41.0% 45.7% 46.8% 47.5% 47.8% 48.0% 48.2% 48.4% 48.6%
Operating Profit Margin 5.3% 8.1% 11.2% 13.9% 20.5% 20.3% 21.1% 21.9% 22.7% 23.4%
Net Profit Margin 5.1% (19.2)% (31.4)% (25.2)% (21.7)% (2.2)% (0.7)% 0.7% 2.2% 3.9%
DuPont Analysis
Operating Profit Margin 5.3% 8.1% 11.2% 13.9% 20.5% 20.3% 21.1% 21.9% 22.7% 23.4%
Total Asset Turnover 0.3x 0.3x 0.3x 0.3x 0.4x 0.4x 0.4x 0.4x 0.4x 0.4x
Interest Expense Rate 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x
Financial Leverage Multiplier 2.6x 4.8x 13.4x -135.8x -15.5x -9.0x -6.5x -5.2x -4.3x -3.8x
Tax Retention Rate 94.8% 102.0% 106.0% 87.7% 108.1% 107.0% 107.0% 93.0% 93.0% 93.0%
Return on Equity (14.9)% (31.0)% (90.8)% 534.4% 15.4% 7.4% 1.9% (1.2)% (3.8)% (6.1)%
Leverage Ratios
Gross Debt to EBITDA 4.7x 4.9x 4.9x 5.1x 4.5x 4.6x 4.7x 4.8x 4.7x 4.7x
Net Senior Debt to EBITDA 3.7x 4.0x 3.8x 3.5x 3.5x 3.5x 3.5x 3.5x 3.4x
Net Debt to EBITDA 4.2x 4.8x 4.8x 5.0x 4.4x 4.5x 4.5x 4.4x 4.4x 4.3x
Net Debt to EBITDA-Capex 12.0x 14.1x 12.6x 10.6x 8.8x 8.6x 8.4x 8.2x 7.9x 7.6x
Other Ratios
Capex/Revenue 25.2% 27.0% 28.2% 24.7% 23.6% 23.1% 22.6% 22.1% 21.6% 21.2%