Sky Deutschland preliminary Q1 2014/15 results
Continued strong customer and EBITDA growth, positive Net Income


Key metrics
• Net growth: 96,000 (up 26% yoy); direct subscribers now over 3.9m
• Churn rate: quarterly annualized 8.6%; 12 month rolling 9.2%
• EBITDA: €54m, up 86% yoy
• Net income: €12m, up €27m yoy
• Revenues: €431m, up 10% yoy
• Sky Premium HD customers: up 75,000 to 2,311,000
• Sky+ customers: up 105,000 to 1,786,000
• Sky Go customer sessions: up 43% yoy to 26m

Highlights
• Sky Online launched: easy, flexible and instant access to the world of Sky
• Sky On Demand launching soon: extending Sky’s vast on-demand offering to the main TV via Sky+
• Snap by Sky: now for only €3.99 per month; new Snap Extra option to download movies and series
• HBO: exclusive partnership extended, Sky remains Home of HBO until the end of the decade
• Warner Bros: early extension of exclusive cooperation, including on-demand rights
• Turner: extension of 5 channel cooperation; including exclusive top first-run series
• Tele München Gruppe: exclusive cooperation extended, including top German box office hits
• “Babylon Berlin”: milestone cooperation with ARD, X Filme and Beta Film to launch the German original crime series with Tom Tykwer as showrunner
• “The Last Panthers”: joint production of new crime series with BSkyB and Canal+
• EHF Champions League: exclusive live rights to top-class handball
• Formula E: brand new and exclusive to Sky customers

Confirming outlook
• For the 2014/15 financial year, Sky expects subscriber net growth of 400,000 to 450,000 and full year EBITDA in the range of €80m to €110m, which will be supported by a continued strong increase in total revenues.
 

Brian Sullivan, CEO of Sky Deutschland: “This quarter marks a number of important milestones at Sky. We have once again delivered strong customer and EBITDA growth, as well as a positive net income, as more and more customers are enjoying our outstanding offering. High-quality exclusive content, continuous innovation and a great customer experience are the pillars of our sustained success. We’ve also just unveiled the next wave of exciting new services, Sky Online and Sky On Demand, which bring a whole new level of choice, flexibility and control to our existing and future customers. There has never been a better time to be a Sky customer.”

Unterföhring, 3 November 2014 – Sky Deutschland continued to deliver improved financial performance in Q1 2014/15. The strong subscriber growth led to total revenues rising 10% to €431 million (Q1 2013/14: €393 million). Subscription revenues were the key driver, up 10% to €394 million (Q1 2013/14: €357 million), with an average revenue per user (ARPU) of €34.00 (Q1 2013/14: €34.07). Total costs excluding depreciation went up by just 4% to €377 million (Q1 2013/14: €364 million). As a result, EBITDA for Q1 2014/15 saw an improvement of 86% to €54 million (Q1 2013/14: €29 million), and net income came in at positive €12 million (Q1 2013/14: negative €14 million).

Continued customer growth
The growing appeal of the expanding Sky offering attracts more and more customers. Net growth increased by 26% to 96,000 in Q1 2014/15 (Q1 2013/14: 76,000). The total number of direct subscribers reached 3,908,000 at the end of September (Q1 2013/14: 3,529,000). Gross additions were 179,000 (Q1 2013/14: 185,000). As a result of the actions taken to improve the quality of customer growth, and the take up of two year contracts, customer loyalty once again improved significantly with the quarterly annualized churn rate dropping to 8.6% (Q1 2013/14: 12.5%) and the 12-month rolling churn rate to 9.2% (Q1 2013/14: 11.8%).
Sky Premium HD continued to expand with the number of customers, inclusive of HD free-visions, growing by 75,000 in the quarter to 2,311,000 (Q1 2013/14: 1,869,000). As a result, 59% of all customers now enjoy the outstanding quality of Sky’s market leading HD offering (Q1 2013/14: 53%), which today includes up to 90 channels. The most recent additions were RTL Crime HD as well as the film channels Sky Cinema+1 HD and Sky Cinema+24 HD.

In Q1 2014/15, the number of Sky+ customers increased strongly by 105,000 to 1,786,000 (Q1 2013/14: 1,296,000). Today, 46% of Sky subscribers benefit from the convenience and flexibility of the award-winning Sky+ receiver (Q1 2013/14: 37%).

Sky Zweitkarte (second smartcard) enables customers to watch different Sky programs at home in different rooms at the same time, keeping the whole family entertained. A total of 461,000 customers, up from 410,000 a year ago, now subscribe to the Sky Zweitkarte.

An increasing number of customers chose Sky Go to watch content both in and out of home. Over the course of Q1 2014/15, the number of customer sessions grew by 43 percent year-on-year to 26 million, bringing the total number of customer sessions over the past twelve months to 100 million.

Sky Online – A new way to enjoy Sky
Building on its ever-growing popularity, Sky just launched Sky Online, a brand new, easy, and flexible way to get instant access to the world of Sky over the internet. It is available via the web and on iOS. More devices will be added soon, such as Samsung and LG Smart TVs, selected Android tablets and smartphones, the Xbox One, as well as the new Sky Online TV Box (powered by Roku). Sky Online is made for people who want to enjoy some of the best content from Sky in a flexible and innovative fashion – with a month-to-month contract – and immediate access to movie premieres, the latest top-quality series, as well as the full breadth and depth of Sky’s exclusive sport offering.

Two different programming packages are available, which include linear channels as well as a vast variety of on-demand highlights of more than 10,000 titles across the year. With the Sky Online Starter package customers can enjoy first-run series, entire series box sets, thrilling documentaries, classic movies, and top quality kids’ programs. The package also offers a diverse programming variety of nine linear channels, including Sky Sport News HD, Germany and Austria’s only 24/7 sport news channel, as well as full access to Snap, Sky’s great online video library. The Sky Online Film package delivers the year's biggest films and series of Sky Cinema, Sky Atlantic – the home of HBO – and Disney Cinemagic. It includes the most recent blockbuster films, including 20 TV premieres per month, all airing up to one year before their debut on free-to-air TV and other online subscription services, and without commercial breaks. And for those with the Starter or Film package who want to follow live sport action, the Supersport Day Ticket offers unlimited access to the full range of Sky’s up to 23 exclusive Bundesliga and Sky Sport channels.

Sky On Demand launching soon: Sky’s entire on-demand offering available via Sky+
Starting later this year, Sky+ customers will have access to the entire on-demand world of Sky – at the simple touch of a button on their Sky+ remote control. Sky On Demand will deliver the complete offering already available via Sky Go and Snap by Sky, straight to the main TV. From blockbuster movies and first run series – 12 months before free-TV and other subscription services – as well as documentaries, children’s programs and much more, all easily accessible via a brand new, intuitive customer interface. Already this year, the available content will be expanded six-fold. Sky On Demand is the evolution of Sky Anytime, the exclusive on-demand service on Sky+.

Snap for only €3.99 per month
Since August Snap by Sky is available for only €3.99 per month to both stand-alone and existing Sky customers, making it Germany and Austria’s best priced and best value online TV service. With the new Snap Extra option customers now have the ability to download movies and series to the iPad and iPhone, and access Snap on two devices simultaneously – all for a total price of just €6.99 per month. Snap currently offers more than 5,000 library titles, including box sets of critically acclaimed series such as “The Sopranos”, “Sex and the City”, “Breaking Bad” and “The Walking Dead”, as well as exclusive past season’s hits such as the award-winning series “Game of Thrones” and “Boardwalk Empire”.

Sky Atlantic, the Home of HBO – exclusive partnership extended
In September, Sky Deutschland and HBO extended their existing exclusive agreement until the end of the decade. This ensures that Sky continues to be the home of HBO in Germany and Austria, delivering all HBO premium new productions first and exclusive on Sky Atlantic as well as on Sky Go, Sky Anytime, and Sky Online. The agreement also ensures that fans of outstanding series such as “Game of Thrones”, “True Detective”, or “The Knick” can enjoy their favorite series as early as possible, simultaneous to the US start in the original language.

Warner Bros. – long-term extension of exclusive cooperation
Sky Deutschland and Warner Bros. recently agreed to an early extension of their exclusive cooperation which also includes non-linear services such as Sky Go and Sky Anytime. This means that customers can look forward to the most recent cinema blockbusters from Warner Bros. long before they air on free-TV and online subscription services – at home or on the go, and on-demand whenever they want. Sky also acquired exclusive pay-TV rights to a comprehensive package of high quality library films for all platforms and services.

In addition, Sky extended its exclusive cooperation with Tele München Gruppe to show their high-quality movies first and exclusively in Germany and Austria, including all on-demand services.

Also, together with Turner Broadcasting, Sky agreed to continue their successful partnership to present five Turner-channels as well as an expanded selection of exclusive on-demand programming.

“Babylon Berlin” – ground-breaking partnership with ARD
In a first for the market public broadcaster ARD is joining forces with Sky Deutschland as well as X Filme and Beta Film to launch the German original high-end crime series “Babylon Berlin”. It is Sky’s first participation in a major German production, and the first cooperation of a pay-TV company with a public broadcaster. Star director Tom Tykwer signed in as showrunner.
Furthermore, together with BSkyB and Canal+, Sky Deutschland announced the production of the new crime series “The Last Panthers”, which continues Sky Deutschland’s engagement in international premium series.

New channels for Sky Welt customers
In September “A&E” launched on Sky for all Sky Welt subscribers featuring a number of successful series, biographies, and reality television programming. Sky Welt further expanded on 1st October with the new music television channel Jukebox, which is available for satellite and IPTV customers as well as for selected cable networks.

New Bundesliga season setting viewership records
The Sky Bundesliga service began with a new season opening record: 4.1 million viewers (3+) tuned in to the live matches on Sky over the first Bundesliga weekend in their homes, underlining the growing appeal of the Sky live sport offering. This beats the previous record of 3.4 million (3+) set in 2011/2012.

New exclusive sport rights
In September, Sky concluded an agreement to present all races of the brand-new Formula E, the world's first fully electric racing series, live and exclusive. From September 2014 through to June 2015, the Championship competes in the heart of 10 great cities – including London, Beijing, Los Angeles, and Berlin on 30 May 2015 – racing around their iconic landmarks.

Furthermore, Sky Deutschland secured the exclusive live broadcasting rights of the world’s most important team handball club competition, the EHF Champions League, making it the only broadcaster of all games featuring German teams as well as of all four final matches over the next three seasons. In addition to exclusive TV broadcasting rights, the agreement includes internet, IPTV and mobile.

Acquisition by BSkyB
On 3 November 2014, the additional acceptance period of BSkyB’s voluntary takeover offer will expire, with the final result of the number of shares tendered being published soon thereafter. Sky Deutschland
expects the transaction to be closed around mid-November this year.

Combined investor/analyst and press call today at 9:30 am (CET).
Dial-in: Germany +49 69 58 999 0509; UK +44 207 1620 177; US +1 334 323 6203



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


Contakt for investors and analysts:

Christine Scheil
Senior Vice President Investor Relations
Tel.: +49 89/99 58-10 10
christine.scheil@sky.de



About Sky Deutschland:
Sky Deutschland AG is the leading pay-TV provider in Germany and Austria with more than 3.9 million subscribers and revenues amounting to 1.7 billion Euros. The MDAX-listed company offers subscription television as well as on-demand services for private and business customers.

The Sky platform comprises up to 80 exclusive channels, almost all of which are also available in HD. The program portfolio of Sky includes live sports together with the only German 24/7 sports news channel Sky Sport News HD, feature films, series, children's programs and documentaries. The Sky+ hard disk receiver allows for time-shifted television and the Sky Anytime on-demand service enables customers to enjoy hundreds of constantly changing titles. Sky Go, the leading online TV in Germany, provides access to Sky programming via mobile devices and PCs. Moreover, the online media library Snap by Sky offers thousands of titles – among them blockbusters, classic films, complete series box sets and children's programs.

Sky is the innovation leader in the German and Austrian television markets. In the past two decades, Sky has played a major role in establishing pay-TV as the third pillar of television entertainment alongside fee-financed and advertising-financed broadcasters. Sky has 2,500 employees and is based in Unterföhring near Munich.

 

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