Sky Deutschland Q1 2012 Results: Business accelerating, key rights secured

Strong performance (year-on-year)
- Revenue accelerated, up 18% to €318m 
- Net subscriber growth of 73,000 to reach a total of 3,085,000 customers
- Gross additions increased by 11% to 155,000 
- Churn rate (12-month rolling) decreased to 11.3%
- Subscription ARPU up €1.19 to €31.76
- EBITDA improved by 26% to negative €41m, including €11m phasing impact from brought-forward football match days

Product milestones 
- Sky+ grew strongly to over half a million subscribers (508,000)
- Sky Premium HD reached over a million customers (1,071,000)
- Sky Sport News HD attracted more than 3 million unique viewers since launch
- Sky Go delivered more than 6 million user sessions in Q1 2012

Strategic partnerships
- Extended live and exclusive Bundesliga rights across all platforms through 2016/17 
- Long-term cooperation agreement with Unitymedia and Kabel BW including Sky HD expansion
- Upcoming launch of Sky Atlantic HD, The Home of HBO

Confirming outlook 
- Full year 2012 EBITDA expected to be significantly better than 2011. Full year 2013 EBITDA expected to be positive, and to grow strongly thereafter.

Unterföhring, 15 May 2012. Sky Deutschland saw a strong start to 2012 with solid customer growth, accelerating demand, improved key metrics and the achievement of a number of milestones.

“These are once again excellent results for Sky Deutschland, and come at an exciting time for the company. Germany and Austria are amongst the highest potential markets for pay-TV across Europe, and the acceleration of demand across our full product range, as well as outstanding customer satisfaction and recommendation levels, underline the strong momentum in the business. The recent acquisition of the full Bundesliga rights, along with extended rights for other important sports competitions, major Hollywood studio renewals, the forthcoming launch of Sky Atlantic HD, and the milestone agreement with Unitymedia and Kabel BW, give Sky a unique long-term perspective and provide a significantly enhanced opportunity for growth and innovation” said Brian Sullivan, CEO of Sky Deutschland.

Strong growth across all key areas
In Q1 2012 revenues further accelerated by 18% (Q1 2011: 15%) to €318 million (Q1 2011: €269 million). The customer base grew by 73,000 (Q1 2011: 73,000) to 3,085,000, driven by an 11% year-on-year increase in gross additions to 155,000 (Q1 2011: 140,000), and the reduction of the 12-month rolling churn rate to 11.3% (Q1 2011: 13.8%). Along with the expanding customer base, the average revenue per user (ARPU) grew €1.19 to €31.76 (Q1 2011: €30.57). Total costs amounted to €375 million (Q1 2011: €337 million). Compared to Q1 2011 this included an €11 million phasing impact from brought-forward football match days of the Bundesliga, the UEFA Champions League and the UEFA Europa League. EBITDA improved 26% to negative €41 million (Q1 2011: negative €55 million). Net income for the first quarter amounted to negative €73 million (Q1 2011: negative €87 million).

Sky Premium HD breaking through the 1 million level
The demand for Sky HD continued to accelerate. In Q1 2012 a total of 97,000 customers chose to subscribe to Sky Premium HD, which is an increase of 37% compared to Q1 2011 (71,000). The total number of Sky Premium HD customers grew by 61% to 1,071,000 (Q1 2011: 664,000), meaning more than one in three of all Sky households now subscribe to the Sky Premium HD service. The launch of Sky Sport News HD and MTV Live HD, as well as the recent inclusion of 12 free-to-air HD channels following the analogue satellite switch-off, means that 55 High Definition channels are now available to Sky customers via satellite. The HD offering is expected to be extended to up to 60 channels this year. Next up, Sky Atlantic HD will launch on 23 May 2012 and TNT Serie HD will follow in June.

Sky+ net growth doubling
Another important business driver is Sky+, the integrated hard disk receiver. In Q1 2012 the growth of Sky+ customers (97,000) was more than twice as high as in Q1 2011 (42,000) and the total number of Sky+ customers increased to 508,000 at the end of the quarter (Q1 2011: 81,000).

Over the past months, Sky continued to expand Sky Anytime, its free video-on-demand service available via Sky+. Customers now have access to a selection of the newest hit series, exciting documentaries and most recently, also to selected children’s programming. Sky Anytime enhances the Sky+ hard disk receiver and gives customers even more choice and control by providing instant access to the best programming with a constantly updating library of high-quality content.

Strong demand for Sky Go
Sky Go – Germany and Austria’s largest over-the-top pay-TV platform - also continued its success story, growing strongly to exceed 6 million user sessions during Q1 2012. The launch of Sky Go in April 2011 set a new benchmark for innovation in the market, providing customers with greater flexibility and convenience to watch live and on-demand TV. The latest update for the innovative Sky Go service will launch on 23 May 2012. Beside the inclusion of Sky Atlantic HD, the upcoming Sky Go extension will enable film fans to enjoy the latest blockbusters on the iPhone and iPod Touch for the first time, adding to the existing access over Internet, iPad and Xbox 360.

The soon-to-be-launched Sky Go update will also add more interactive and social elements. An extended user interface will enable customers to stay connected with their friends to post comments, recommend programs, and chat via social networks while watching Sky and with no need to switch the device. Innovations like Sky Go change the way people watch TV, deliver great value for customers and contribute significantly to Sky customer satisfaction.

Sky Sport News HD a great success
Sky Sport News HD had a fantastic debut in December and continued to grow strongly in the quarter, doubling its market share in subscriber homes during that period. Since launch, over 3 million unique viewers have tuned-in with an average 200,000 viewers per day spending a daily average of 16 minutes watching the channel. Sky Sport News HD covers 93 different sports from 43 different countries on a monthly basis. Combined with steadily increasing customer satisfaction levels, these figures demonstrate the great appeal of Germany and Austria’s pioneering 24/7 sport news offering.

Bundesliga live rights renewed and extended
The highlight of the year to date was the acquisition of the extended Bundesliga rights through to 2017. The new deal comprises all games, live and in HD, across all platforms, adding IPTV and mobile to the existing rights for satellite, cable and web.

The extended Bundesliga rights package provides Sky with some fantastic new opportunities and supplements the recent football rights renewals with the UEFA Champions League, UEFA Europa League, and the DFB-Pokal. For example, customers of the innovative Sky Go service, who can already access Sky Sport and Sky Film via WiFi and 3G, will be able to watch all matches of their favourite team, including the Bundesliga, whenever and wherever they choose. Together, these rights extensions signify key milestones in Sky’s strategy of investment in high-quality exclusive content to constantly differentiate its proposition and deliver for customers. Sky’s outstanding football offering will further accelerate growth with the introduction of the new rights from the 2013/14 season.

Strategic partnership with Unitymedia and Kabel BW
The new agreement with Unitymedia and Kabel BW marks a key milestone in Sky’s distribution strategy. The deal extends Sky’s market leading HD service by giving almost 7 million cable customers access to a much larger world of exclusive high-quality content in brilliant High Definition, including from launch, the new Sky Atlantic HD channel. In the future, customers will be able to subscribe to Sky directly or via Unitymedia, as Kabel BW customers can already do today. Joint marketing campaigns are also part of the agreement which is expected to drive higher HD uptake as well as further subscriber growth.

New entertainment milestones: Sky Atlantic HD and Harald Schmidt Show
On 23 May, Sky Film HD customers can look forward to the launch of Sky Atlantic HD, the home of HBO. Sky Atlantic HD will deliver the best, high-quality programming from the most critically acclaimed television producers across the world. It is the first channel that brings together all HBO productions in HD, exclusively, and available with the full flexibility of Sky Anytime and Sky Go. This marks an entertainment milestone, providing Sky customers with even greater value by giving them the chance to watch the amazing selection of HBO series in brilliant HD quality before they are shown anywhere else in Germany and Austria. Once again, Sky customers will be at the forefront of entertainment.

Starting in autumn 2012, “Late Night King” Harald Schmidt will host his Harald Schmidt Show exclusively on Sky Atlantic HD and Sky Hits. His renowned daily late-night talk show will also be available through Sky Go and Sky Anytime. By signing Harald Schmidt, Sky has again demonstrated its commitment to exclusive high-quality entertainment.


Contact for media:
Dr. Jörg E. Allgäuer
Vice President Corporate Communications
Tel.: +49 89/99 58-63 77
joerg.allgaeuer@sky.de

Contact for investors and analysts:
Christine Scheil
Vice President Investor Relations
Tel.: +49 89/99 58-10 10
christine.scheil@sky.de

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