Q2 2011 Results: Fourth Consecutive Quarter of Continued Improvement
Strong operational performance
- Net growth of 33,000 subscribers (Q2 2010: 6,000), taking H1 net growth to over 100,000
- Total number of customers: 2.759 million (Q2 2010: 2.476 million)
- Quarterly annualized churn at 9.4 percent (Q2 2010: 16.3 percent), 12-month rolling churn at 12.4 percent (Q2 2010: 20.1 percent)
- ARPU of €30.69 (Q2 2010: €28.62)
- Sky HD households now over 1.2 million, including 714,000 Sky Premium HD (Q2 2010: 370,000)
Solid financial development
- Revenues increased by 17 percent to €276.7 million (Q2 2010: €236.1 million)
- EBITDA improved by 51 percent to negative €23.4 million (Q2 2010: negative €47.4 million)
Highlights
- Sky HD increasing to over 30 channels, including Fox HD, plus the exclusive Sky Sport HD Extra and Nat Geo Wild HD, with more to come
- Sky Anytime to be launched, giving Sky+ customers on-demand access to top films, sport and more, free as part of their core package
- New Sky Guide (EPG) rolling out progressively to all Sky HD receivers
- Expanded agreement with Kabel BW covering all aspects of sales, channels, and distribution
Outlook
- For the full year 2011 Sky expects net subscriber growth to be in the range of 300,000, and the 12-month rolling churn rate to move below 12 percent, together with a slight increase in ARPU
- Sky expects full year 2011 EBITDA to be between negative €145 to €175 million, and the positive operational and financial trends seen so far in 2011 to accelerate in 2012
Unterföhring, 12 August 2011. Sky Deutschland AG continued to deliver strong results during the second quarter of 2011, with improving trends across all key areas of the business. The customer base grew by 33,000 (Q2 2010: 6,000) to a total of 2,759,000 (Q2 2010: 2,476,000). Subscriber net growth over the first half of 2011 was 106,000, an increase of 100,000 compared to H1 2010. Gross additions for the quarter amounted to 98,000 (Q2 2010: 107,000), with underlying levels increasing after recent quality improvements. Quarterly annualized churn decreased to 9.4 percent (Q2 2010: 16.3 percent) and the 12-month rolling churn rate to 12.4 percent (Q2 2010: 20.1 percent) – in both cases the lowest figures in almost six years.
Sky HD continued its success story, with the number of customers able to watch the market leading High Definition service surpassing the 1.2 million mark. The number of customers with Premium Sky HD packages almost doubled year-on-year to 714,000 (Q2 2010: 370,000). The Premium Sky HD penetration rate increased to 25.9 percent (Q2 2010: 14.9 percent).
Brian Sullivan, CEO of Sky Deutschland AG: “We are pleased with our progress in the second quarter which is in line with our expectations. After four quarters of continued improvement, and having already grown by over 100,000 customers in the first half of this year, these solid results reinforce my confidence in our ability to build a successful pay-TV business. Our strategy to deliver for customers by focusing on the best program quality, exciting innovations and great service, is beginning to pay off.”
Improved financial performance in Q2 2011
The significant progress made across all key operating metrics has led to steady improvement in the company’s financial performance. In Q2 2011, revenues grew by 17.2 percent to €276.7 million (Q2 2010: €236.1 million) and total costs excluding depreciation increased by less than half that rate at just 5.9 percent to €300.1 million (Q2 2010: €283.5 million). In combination, these developments drove a 50.1 percent improvement in EBITDA to negative €23.4 million (Q2 2010: negative €47.4 million). Net income also improved to negative €53.6 million (Q2 2010: negative €81.9 million).
The key revenue driver continues to be core recurring subscription revenues which reached €252.5 million (Q2 2010: €212.4 million), supported by the year-on-year growth of 283,000 subscribers, as well as an increase in ARPU to €30.69 (Q2 2010: €28.62). Cost increases were mainly a result of additional investment in sales and marketing initiatives as well as in the ongoing HD expansion.
Sky HD grows to over 30 channels
With the addition of Fox HD, as well as the exclusive channels Sky Sport HD Extra and Nat Geo Wild HD, Sky customers are able to enjoy the best selection of High Definition programs available anywhere in Germany and Austria, with over 30 channels from which to choose and even more to come in the next few months.
Launching Sky Anytime
Sky Anytime combines the power of Sky+ and the exclusive choice of Sky. This new on-demand service will be free for all Sky+ customers, with access following their underlying package, giving them even more flexibility to watch their programs whenever they want. It is enabled by downloading new content automatically onto customers’ Sky+ receivers overnight. Sky Anytime does not require an internet connection, and comprises top-quality movies out of the Sky Film package as well as a selection of the best entertainment and sports programs. Sky+ subscribers can also order pay-per-view blockbusters on Sky Select and watch them straightaway.
Launching new Sky Guide
To unlock the great entertainment of Sky’s exclusive channels and services, the company will launch a new Sky Guide to all Sky HD receivers, a vastly improved version of Sky’s Electronic Program Guide (EPG). The new Sky Guide will make it easier and more convenient for customers to find and select their favorite programs, and gives Sky+ customers one-button access to recordings of single titles or full series, as well as the benefits of Sky Anytime and Sky Select.
Expanded agreement with Kabel BW
Building on the success of the existing partnership, Sky Deutschland and Kabel BW agreed in July to extend their cooperation across all products. As part of this agreement, in addition to the bespoke triple play bundle already available, Kabel BW will now offer the full range of Sky packages as a stand-alone option to all its customers, providing even more choice and flexibility. No matter whether customers choose Sky directly or through their Kabel BW service, they are guaranteed to get the best available entertainment on the market, including additional Sky HD channels coming over the next few months.
Brian Sullivan, CEO of Sky Deutschland AG: “With the launch of even more great Sky HD channels, as well as the innovative Sky Anytime and new Sky Guide, customers have all the more reason to unlock the great benefits offered by Sky. Soon, we will take the next step forward with Sky Go by extending our exclusive on-demand Sky movie service, already available on the web, and now to be included on the iPad as well. This means our customers can enjoy the best of Sky virtually anywhere and anytime – a unique service in Germany and Austria.”
Contact for press:
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
This press release contains statements regarding future developments that are based on current evaluations and are made to the best knowledge of the management of Sky Deutschland AG. Such statements with regard to future developments are subject to known and unknown risks, uncertainties and other factors that could cause the profit situation, profitability, value development or the performance of Sky Deutschland AG or the success of the media industry to diverge from the profit situation, profitability, value development or performance that are expressly or implicitly assumed or described in the statements concerned. In view of the risks and uncertainties and other factors, readers of this press release should not rely on such statements to a disproportionate extent. Sky Deutschland AG has no obligation to act in keeping with such statements regarding future developments or to alter its actions to accommodate future events and developments.
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