Delivering for customers
- Key content agreements with Sony, Constantin and ZDF Enterprises
- Sky Atlantic HD coming soon to Sky customers on Kabel Deutschland
- New Sky Go sport datacenter to be launched
- New Sky Starter pack to be introduced
- TÜV seal of approval for outstanding customer service
- Full year 2012 EBITDA expected to be significantly better than 2011. Fullyear 2013 EBITDA expected to be positive, and to grow strongly thereafter.
Unterföhring, 14 August 2012. Sky Deutschland delivered another quarter of strong operational growth and enhanced financial performance achieving a positive quarterly EBITDA of €23.0 million (Q2 2011: negative €23.4m). All key operating metrics continue to improve, reflecting the increasing demand across the entire product range.
Brian Sullivan, CEO of Sky Deutschland: “This has been an important quarter for Sky. We have achieved a number of major milestones across the business, including longtermagreements with key studios and sports rights partners, as well as the first positive EBITDA under the Sky brand. Demand for Sky’s expanded range of products andservices is accelerating as our absolute focus on customers delivers the high-qualitycontent, leading innovations and top service they deserve. While there is still more to do, both the momentum in our business and the potential in the market are stronger than ever.”
Gross additions saw a significant increase with a rise of 27% to 124,000 (Q2 2011: 97,800). This demonstrates the growing appeal and strong recommendation levels for Sky. Customer satisfaction levels remain at all time highs and led to an improvement inthe 12-month rolling churn rate which fell to 11.5% (Q2 2011: 12.4%) and a quarterly annualized churn rate of 9.9% (Q2 2011: 9.4%). As a consequence, net subscribergrowth increased by 42% to 47,100 (Q2 2011: 33,200).
Sky Premium HD attracted outstanding demand with the number of customers growing by 64% to 1,171,800 (Q2 2011: 714,200). More than 37% (Q2 2011: 26%) of all Sky subscribers now enjoy the Sky Premium HD service. With the recent launch of SkyAtlantic HD, Sport1+ HD, and TNT Serie HD, Sky customers can now receive up to 58 HD channels, which will be expanded to over 60 channels by the end of 2012.
Sky+, Sky’s fully integrated hard disk receiver, was another important driver for the business with the number of Sky+ subscribers increasing by more than 400% to 584,000 (Q2 2011: 116,100). Looking ahead Sky expects to significantly increase the penetration of Sky+. In addition, the device will be enhanced with new features including remote-recording and a two terabyte hard disk option, which will provide increased recording capacity together with a greatly expanded Sky Anytime service.
Sky Go, Germany and Austria’s largest over-the-top pay-TV platform, continued toresonate strongly with customers who enjoy the convenience and flexibility of beingable to access a wide selection of Sky’s content on various platforms. In Q2 2012, Sky recorded almost 6.9 million customer logins against 1.3 million for the same periodlast year.
In addition, the number of households with a second smartcard (Zweitkarte) increased considerably, up 166% to 248,300 compared with 93,500 for the same period last year. Sales benefited from upgrades associated with Sky+, and showed that more andmore families are looking to enjoy Sky’s outstanding entertainment line-up in differentrooms at the same time.
Strong financial performance
The financial performance of Sky Deutschland continued to improve strongly in Q2 2012 with the company delivering a positive EBITDA of €23.0 million (Q2 2011:negative €23.4m). Revenues increased by 18% to €326.7 million (Q2 2011: €276.3m), supported by the 14% increase in subscribers and an ARPU growth of €1.47 to €32.16 (Q2 2011: €30.69). Total costs excluding depreciation increased only 1% to €303.6million (Q2 2011: €299.7m). As highlighted in Sky’s Q1 2012 results, this includes a €11 million cost benefit from brought forward match days of the Bundesliga, UEFA Champions League, and UEFA Europa League. Consistent with the EBITDA improvement, EBIT increased to positive €5.9 million (Q2 2011: negative €37.4m). Net income improved to negative €13.8 million (Q2 2011: negative €53.6m). For the completion of the two-step funding process of €300 million Sky, together withits bank syndicate and News Corporation, has agreed to extend the deadline for raisingthe remaining €144 million from 30 September 2012 to 1 February 2013.
Most successful Bundesliga season ever for Sky
The quarter also saw Sky’s Bundesliga coverage achieve record audience levels. Sky secured up to 17% market share across men between 14 and 49 years and had over 5 million viewers tune in on the 23rd match day. Sky further enhanced its sportsleadership position earlier this year when it extended its live and exclusive Bundesliga match rights across all platforms through the 2016/17 season.
Sky continues to set the standard, recently winning the Sport Bild-Award 2012, andremaining the top source for sport news. Since 2 August, Sport1+ HD is available on Sky as the seventh HD sports channel on the platform.
For the upcoming Bundesliga season the German record national player Lothar Matthäus will join Sky’s on-screen expert commentary team. His experience as a world-class player and internationally recognized coach make him an ideal candidate for Sky’s panel of commentators.
Further key content agreements
As part of Sky Deutschland’s continued investment in outstanding movie entertainment, Sky recently concluded multi-year agreements with Sony Pictures Television and Constantin Film, Germany’s most successful independent movie production company. Both contracts comprise the exclusive pay-TV rights across linear channels and on-demand for Sky Select, Sky Anytime and Sky Go. Sky also extendedits agreement with ZDF Enterprises that will allow Sky customers to enjoy ZDF’s popular German crime thriller TV-series and films on the exclusive Sky Krimi channel, adding new on-demand rights.
Sky Atlantic HD coming soon to Sky customers on Kabel Deutschland
Sky Atlantic HD, the home of HBO, had a great start in May achieving outstanding customer satisfaction levels. The new channel also proved to be a big hit on Sky Go: Since launch more than a third of the fiction usage on Sky Go was attributed to Sky Atlantic HD’s compelling content. Furthermore, following the launch of Sky Atlantic HD,Sky has recently reached an agreement with Kabel Deutschland to introduce thechannel across its network, meaning Sky Atlantic HD will soon be available to all Sky customers.
Continued expansion of Sky’s multi platform-strategy
Sky is the first entertainment company in Germany and Austria to have alreadyimplemented a comprehensive multi-platform strategy. Since its launch in April 2011, Sky Go has provided customers with greater flexibility and convenience to watch liveand on-demand TV on various platforms such as the web, iPad, iPhone, iPod Touchand Xbox 360, with over 250 top blockbuster films, 350 series episodes and thousands of hours of live sport available, with more to come.
Since May the best series and films are also available on the iPhone and iPod Touch. In addition, new social elements were introduced on Sky Go on the iPad, enabling customers to interact with friends while simultaneously watching their favorite programmes. Sport on the Sky Go iPhone app also got a major expansion makingavailable Sky’s three high definition sport channels, Sky Sport HD 1, Sky Sport HD 2 andSky Sport HD Extra, via Wi-Fi and 3G.
New Sky Go sport datacenter
Right in time for the start of the upcoming Bundesliga season on 24 August, Sky hasc ompletely redesigned Germany and Austria’s first 360 degree sport news and dataservice on Sky Go. This fantastic new product, driven by Sky Sport News HD, is a musthave for football addicts and sport fans alike, focusing on the Bundesliga and 2nd Bundesliga as well as the UEFA Champions League, UEFA Europa League and other top sport. The new Sky Go sport datacenter will be fully interactive, allowing users to access an amazing and deep source of both live and archive information, and to customize their view in an exciting graphical interface, all while watching their favorite live sport.
New Sky Starter pack to be introduced
In order to tap an even larger potential for Sky, the company will introduce the Sky Starter pack in the second half of 2012. With a selection of 21 standard definition channels from the Sky Welt package, many exclusive to Sky, the new Starter pack will provide an entry-point for those not yet considering pay-TV. To access the incredible line-up of high definition and premium channels, customers of the Starter pack will need to first upgrade to the Sky Welt package.
TÜV seal of approval for outstanding customer service
After having been voted the “fairest premium TV provider” by Focus-Money magazine earlier this year, the TÜV Saarland, a German product certification body, awarded Sky their seal of approval for delivering top service. To respond to the strong demand for Sky’s products and to provide an even better customer experience, Sky will, together with its partners, open a new service center by the end of the year, creating over 100 new jobs.
Brian Sullivan: “The second half of 2012 will bring our customers a stunning slate of top blockbuster film and series premieres, as well as the new show of ‘Late Night King’ Harald Schmidt. We will also enhance our award-winning coverage of all matches of the Bundesliga, UEFA Champions League, UEFA Europa League and the DFB-Pokalwith new features and highlights, including commentary from the leading experts inthe field. In addition, we have a product and innovation pipeline bursting at the seams, many of which we will launch in the next few months. We couldn’t be more excited, and think our customers will be as well.”
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