Sky Deutschland AG announces results for Q2 2009

Q2 2009 key results:
• Revenues: €230.6m (Q2 2008: €252.1m*)
• EBITDA: negative €63.4m (Q2 2008: positive €11.6m)
• Net result: negative €365.8m, impacted by the write-off of the Premiere trademark with a negative net effect of €253.9m
• 2.364m subscribers as of 30 June, net growth of 23k monthly contract subscribers offset by reduction of 30k Flex subscribers
• ARPU increased to €25.20 from €24.85 in Q1 2009
• Outlook for 2009 and following years confirmed

Munich, 13 August 2009. In Q2 2009, Sky Deutschland AG generated total revenues of €230.6m (Q2 2008: €252.1m). Operating expenses rose to €294.0m (Q2 2008: €240.5m). EBITDA (earnings before interest, taxes, depreciation and amortization) was negative €63.4m (Q2 2008: positive €11.6m). The EBITDA decrease of €75.0m was a result of lower revenues due to the absence of one time license revenues from the sale of FIFA World Cup 2010 rights in Q2 2008 and increased costs in Q2 2009 – mainly for Bundesliga, for the DFB Cup, which was broadcast for the first time in August 2008, and for preparing the launch of the new Sky service. Following the decision to discontinue the use of the Premiere brand, the Premiere trademark was written off in Q2 2009 which had a negative net effect of €253.9m. Mainly due to this non-cash write-off, net result was negative €365.8m (Q2 2008: negative €37.8m).

Operating cash flow in Q2 2009 was negative €38.4m (Q2 2008: positive €10.8m). As of 30 June 2009, Sky had not drawn on existing debt facilities except for the Bundesliga guarantee and had a positive net cash balance of €5.3m (Q4 2008: negative €318.1m). 

Sky had a total of 2.364m direct subscribers at the end of Q2 2009, 7k less than in Q1 2009 (31 March 2009: 2.371m). The net growth of 23k monthly contract subscribers was offset by a reduction of 30k Flex subscribers. The number of Flex customers decreased during Q2 2009 to 38k. The churn rate for Q2 2009 remained unchanged versus Q1 2009 at 22.4 percent. Program ARPU increased from €24.85 in Q1 2009 to €25.20 in Q2 2009. Compared to Q2 2008, gross additions of monthly contract subscribers doubled to 117,000 in Q2 2009.
 
New Sky TV entertainment service successfully launched
Sky successfully launched its new TV entertainment service in Germany and Austria on 4 July with an enhanced programming offer, providing great value for subscribers. It comprises up to 40 general entertainment channels and a great movie line-up: in 2009, Sky will be airing film highlights like “Wall-E”, “Hancock” and “Indiana Jones and the Kingdom of the Crystal skull” for the first time in German TV - also in HD quality. Sky also offers the most comprehensive sports packages in Germany and Austria and is the true home for all football fans: Sky will be showing live all matches of the Bundesliga, the DFB Cup, the UEFA Champions League, as well as other top sport events like the UEFA Europa League, international football, Formula 1, golf, hockey, tennis, and of course the FIFA 2010 World Cup. A strong selling point is Sky HD, the first comprehensive HD package in Germany and Austria. So far, there has been no comprehensive HD service available for TV households in Germany and Austria. Currently seven high quality HD channels give viewers an outstanding TV experience with top-flight live sports, blockbuster movies and breathtaking documentaries.

To support subscriber and ARPU growth, Sky has launched a substantial marketing campaign and has boosted its retail sales network.  The number of points of sale will increase to 8,000 at the end of August. More than 2,000 installation field engineers will be available soon for making home visits to install, upgrade and repair equipment for a very reasonable charge. 

Mark Williams: “We are very pleased with progress since the successful launch of Sky on 4 July, with awareness of the Sky brand very quickly exceeding 50 per cent. In these first few weeks, we have seen a very positive reaction from both our existing customers upgrading to the new expanded range of Sky services, including our new comprehensive HD offer, as well as a strong increase in the rate of subscriber additions.”

Existing outlook for 2009 and following years confirmed
Sky confirms its targets for full year 2009 and the following years:
• Full year 2009 negative cash flow from operating business in the range of €250m to €275m and significant EBITDA loss expected
• EBITDA and cash flow break-even on a monthly basis targeted during Q4 2010 at an expected level of 3.0 to 3.4 millions subscribers
• Full year 2010 cash flow and EBITDA expected to be negative. 
• Full year net income and cash flow targeted to be positive for the year 2011 and onwards

* Revenues and expenses of discontinued operation Home of Hardware have been excluded. Q2 2008 figures in this press release are not comparable with figures provided in August 2008. 

Contact for press:
Dr. Hans Jόrgen Croissant
Senior Vice President Corporate Communications
Tel.: +49 89/99 58-63 97
hans-juergen.croissant@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 have been based on current evaluations and have been made to best of the 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 those profit situations, profitability, value development or performance results that are assumed expressly or implied or described in these statements regarding the future. Considering these risks, uncertainties and well as other factors, readers of these documents should not rely in an incommensurate manner on these statements dealing with future developments. Sky Deutschland AG has no obligation to behave in keeping with such statements regarding future developments or to alter its behavior to accommodate future events and developments.

Overview Key Figures

Key Figures and Press Release as pdf-file