Telecomunicazioni
Ziggo : Solid performance in unchanged market conditions
Utrecht, April 17, 2013
Ziggo N.V. Q1 Results
· New marketing campaigns launched in February; increased new All-in-1 sales
· Successful launch of our cloud-based video user interface; higher number of interactive set top boxes
· B2B continues to record double-digit organic revenue growth
· Completion of EUR1.1 billion debt refinancing; extending the maturity profile, reducing interest costs and increasing flexibility
Operational highlights Q1 2013
· All-in-1 bundle subscribers up 31,000 in Q1, resulting in 2.2% q-o-q growth and 8.3% y-o-y growth; All-in-1 bundle penetration reaches 52.2% of our consumer customer base
· Internet subscribers up 24,000 in Q1, representing 1.3% q-o-q growth and 5.0% y-o-y growth
· Telephony usage revenue up 3.1% q-o-q and down 5.8% y-o-y (down 1.1% excluding FTA rate reduction)
· Higher Digital Pay TV revenue, including Video on Demand, resulting in 0.4% q-o-q growth and 5.0% y-o-y growth
· B2B expands services through acquisition of Esprit Telecom, subject to approval by the Dutch Competition Authority (ACM)
Financial highlights Q1 2013
· Revenues up 0.2% y-o-y to EUR387.8 million; up 1.8% excluding 'Other Revenues', despite a 5.8% decline in telephony usage revenues
· Adjusted EBITDA EUR222.6 million, up 3.0% y-o-y
· Free cash flow EUR160.1 million, up 8.3% y-o-y
· Special tax treatment for innovation lowers effective tax rate
· Net profit increased to EUR92.6 million from a loss of EUR14.5 million in Q1 2012
· Earnings per share EUR0.46
· Leverage ratio down to 3.15x compared to 3.33x at year-end 2012
CEO Bernard Dijkhuizen:
"The first quarter of 2013 showed solid results with strong EBITDA margins in a continuing competitive environment. We have successfully stepped up our marketing activities in the consumer market with the launch of new sales campaigns in February. However churn remains high, so we will initiate new loyalty campaigns in the second quarter with a strong focus on customer retention. These should give support to our overall objective to reduce churn and create revenue momentum in the course of 2013. Meanwhile, we will focus on enhancing customer experience through new innovations and product enhancements. The recent launch of our cloud based user interface for set top boxes has resulted in a strong increase in the number of interactive receivers since its launch. With the roll-out of Ziggo WiFi Hotspots this year we will prepare and position ourselves for converged services by adding mobility for our customers.
Our B2B operations again showed double digit organic growth, driven by the sale of business bundles focusing on home offices and small businesses. With the acquisition of Esprit Telecom we will strengthen our propositions and services for the mid-market and benefit from operating leverage through a substantial increase in our customer base and reseller channel. Together with our state-of-the-art infrastructure, the acquisition of Esprit will bring new growth opportunities for our B2B operations in this segment."
Outlook
We reiterate our guidance for 2013 EBITDA which we expect to increase between 2.5% and 3.5%. Based on the first quarter operational results, including elevated churn, we anticipate 2013 revenue growth (excluding 'Other Revenues') to be around the low end of the EBITDA growth. We anticipate improved revenue momentum over the course of 2013 as our marketing and retention initiatives take effect. Our capital expenditure for 2013 is expected to be in the range of EUR320-EUR330 million.
In line with the dividend policy, Ziggo will pay a final dividend over 2012 of EUR180 million, or EUR0.90 per share, to its shareholders on April 29. On September 6, Ziggo expects to make a 2013 interim dividend payment of EUR190m.
CEO succession
On March 6, the Supervisory Board of Ziggo announced its intention to appoint René Obermann as the new CEO of Ziggo, effective January 1, 2014. René Obermann is currently CEO of Deutsche Telekom AG. This planned transition coincides with the previously disclosed retirement of the current CEO, Bernard Dijkhuizen, in January 2014, ensuring continued strong leadership of Ziggo in the future.
Acquisition Esprit Telecom
On March 14 , Ziggo announced it is further expanding its services for the business market through the acquisition of Esprit Telecom, a leading provider of voice and data services for the SME market in the Netherlands. The company has an active sales channel of dealers across the country. The acquisition includes Zoranet, an ICT service provider that focuses on the retail sector. The acquisition is subject to approval by the Dutch Competition Authority (ACM). In 2012, Esprit Telecom generated revenues of EUR37 million. The acquisition is valued at EUR18 million.
Important dates
This year, Ziggo expects to publish its quarterly results on the following dates:
Q2 2013 July 18, 2013
Q3 2013 October 18, 2013
The 2012 Annual General Meeting of Shareholders will be held on April 18, 2013.
April 18, 2013 AGM and final declaration of dividend
April 22, 2013 Ex-dividend (at opening)
April 24, 2013 Record date (after close)
April 29, 2013 Payment date
Interim dividend 2013:
September 3, 2013 Ex-dividend (at opening)
September 5, 2013 Record date (after close)
September 10, 2013 Payment date
Please note that the results published in this press release are the consolidated results of Ziggo N.V.
("Ziggo"), and not those of Ziggo Bond Company B.V., the entity that we reported on prior to Q1 2012.
As a consequence of the initial public offering of 25% of its ordinary shares on March 21, 2012, Ziggo is now
reporting quarterly results at the level of the entity that issued the ordinary shares at NYSE Euronext Amsterdam, referred to as "Ziggo". A reconciliation of the results for Ziggo N.V. to Ziggo Bond Company B.V. is attached as a separate schedule to this earnings release and an explanation of the most important reconciling items is provided at the end of this release. Ziggo was incorporated on April 1, 2011 and indirectly acquired all of the issued and outstanding shares of Ziggo Bond Company B.V. on March 20, 2012.
Definitions/Footnotes
(1) Adjusted EBITDA refers to EBITDA, adjusted to eliminate the effects of operating expenses incurred in connection with the initial public offering of ordinary shares of the company on March 21, 2012, which were EUR0.0 million for the quarter ended on March 31, 2013 and EUR39.7 million for the quarter ended on March 31, 2012 respectively.
(2) EBITDA represents operating income plus depreciation and amortization. Although EBITDA should not be considered a substitute for operating income and net cash flow from operating activities, we believe that it provides useful information regarding our ability to meet future debt service requirements.
(3) Operating data relating to our footprint and RGUs are presented as at the end of the period indicated.
(4) Digital television RGUs equals the total number of standard TV subscribers who have activated a smart card as at the end of the periods indicated. As a result, digital TV RGUs represents the number of subscribers who have access to our digital TV services. In any given period, not all of these digital TV RGUs will have subscribed to additional digital pay TV services. As at March 31, 2013, 909,000 of our total digital TV RGUs subscribed to one or more of our digital pay TV services.
(5) Total RGUs are calculated as the sum of t otal standard TV subscribers, digital pay TV subscribers, internet subscribers and telephony subscribers which are serviced by our coaxial products for both the consumer and the business markets. Total consumer RGUs excludes the subscriptions for our products Office Basis (29,388), Office Plus (1,075) and Internet Plus (9,311) targeted at SOHO and small businesses and our collective TV contracts TOM and TOMi (representing 82,000 RGUs), as these coaxial products are serviced by our business division and revenues generated through these products are recognized as business service revenues. These products represent 122,000 TV RGUs, 13,000 digital pay TV RGUs, 40,000 internet RGUs and 30,000 telephony RGUs.
(6) Besides 1,426,000 subscribers who subscribed to the All-in 1 bundle, 13,000 customers subscribed to standard TV, internet and telephony on an individual product basis instead of an All-in-1 bundle.
(7) RGUs per customer is the total number of consumer RGUs (6,891,000 as at March 31, 2013) divided by the total number of consumer standard TV subscribers (2,729,000 as at March 31, 2013).
(8) Average Revenue per User (ARPU) for the consumer market is calculated as the sum of total standard TV, digital pay television, internet, telephony (including call charges and interconnection revenue) and All-in-1 bundle subscription revenues generated in the consumer market for the period divided by the number of months used and divided by the period's average monthly total standard TV RGUs. It excludes revenue from other sources, including installation fees and set-top box sales.
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