Premiere announces results for Q3 2008

Q3 2008 key results:
• Revenues of EUR 244.6 million
• EBITDA negative EUR 27.2 million
• Net-loss of EUR 89.1 million
• 2.411m subscribers as of September 30 using revised classification

Full year 2008 outlook: 
• Revenues above EUR 1,015 million expected
• EBITDA expected in the range negative EUR 40 million to negative EUR 60 million

Business update:
• Premiere encryption system fully secure since 10th November
• Strategic review expected to be completed by year-end
• Pre-emptive waiver of upcoming covenant breach received from bank syndicate; discussions on debt restructuring are ongoing
• Strong programming line-up for Christmas

Munich, November 13, 2008.

Q3 2008 key results
In the third quarter 2008, Premiere posted total revenues of EUR 244.6 million (Q3 2007: EUR 247.5 million). Operating costs rose to EUR 271.8 million (Q3 2007: EUR 225.5 million) mainly due to higher expenses for transmission, hardware and selling expenses, and lower other operating income compared to Q3 2007. EBITDA (earnings before interest, taxes, depreciation and amortization) was negative EUR 27.2 million (Q3 2007: positive EUR 22.0 million). Net income was negative EUR 89.1 million (Q3 2007: positive EUR 0.1 million).

Operating cash-flow in the third quarter 2008 was negative EUR 63.2 million (Q3 2007: EUR 4.8 million positive) and net debt at the end of Q3 2008 was EUR 307 million (Q2 2008: EUR 224 million). Premiere has agreed a pre-emptive waiver of an upcoming debt covenant breach with its bank syndicate and is in ongoing discussions regarding a restructuring of existing debt facilities and Premiere’s overall funding needs. 

Premiere has adopted a revised subscriber classification method, which reflects the new strategic focus on monthly contract subscribers. The subscriber reporting now focuses on a lower number of direct subscribers but with a higher monthly ARPU compared to the previous approach. According to this new classification Premiere had a total of 2.411m direct subscribers at the end of Q3 2008 (Q3 2007: 2.535m) and a monthly program ARPU of EUR 23.92 during Q3 2008.  In addition, at the end of Q3 2008, Premiere had 704k wholesale subscribers.

Full year 2008 outlook
Premiere expects full year revenues above EUR 1,015 million and an EBITDA loss of between EUR 40 million and EUR 60 million.

Business update
Mark Williams, CEO of Premiere AG: “We are making good progress with our strategic review and have begun implementing some key changes. We are now focusing our subscriber acquisition activity exclusively on monthly contract subscribers and have terminated most other offers. A prerequisite to renewed growth was closing the security gap in early November. We are continuing to expand our programming offer for our customers and over the Christmas period we have a very strong line-up of great movies.”

Premiere has secured a very strong programming line-up for the Christmas season including the German TV premieres of “Shrek the Third”, “Harry Potter and the Order of the Phoenix” and “Keinohrhasen”. Besides Bundesliga, Champions League and DFB-Cup Premiere’s viewers can watch during the holidays international football highlights like FC Arsenal against FC Liverpool, Real Madrid against FC Valencia or Glasgow Rangers and Celtic Glasgow. In early 2009 the biggest highlight in German TV will be the seventh season of “24”, one of the most successful series of all time. For the first time ever, fans will have the opportunity to experience the seventh day in the ongoing saga of legendary secret agent Jack Bauer (Kiefer Sutherland) at the same time as the U.S. audience.

Contact for press:
Torsten Fricke
Vice President Corporate Communications
Tel.: +49 89/99 58-63 50

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

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 Premiere 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 Premiere 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. Premiere 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.

Key Figures

pdf-download of key figures and press release