Ziggo Q2 results: Further investments to improve revenue momentum
(Thomson Reuters ONE) -
Utrecht, July 18, 2013
Ziggo N.V. Q2 2013 Results
Further investments to improve revenue momentum
Investments focused on Ziggo WifiSpots, launch of mobile offerings and customer
retention
· Successful launch of our popular 'Ziggo WifiSpots' with 850,000
hotspots to be activated in August
· Ziggo prepares to launch an MVNO-based mobile offering in 2nd half of
2013
· Newly introduced campaigns in Q2 targeted on customer retention
· B2B continues to record strong organic revenue growth; first
contribution from acquisition of Esprit Telecom
· Revised outlook for full year 2013 due to higher investments
Operational highlights Q2 2013
· All-in-1 bundle subscribers up 20,000 in Q2, resulting in 1.4% q-o-q
growth and 7.1% y-o-y growth; All-in-1 bundle penetration reaches 53.7% of our
consumer customer base
· Internet subscribers up 20,000 in Q2, representing 1.1% q-o-q growth and
4.6% y-o-y growth
· Telephony usage revenue down 5.2% y-o-y (down 1.3% excluding FTA rate
reduction)
· Digital pay TV, including Video on Demand, up 1.0% y-o-y
· B2B adds over 3,500 subscriptions for its business bundles
· 150,000 set-top boxes made interactive through SGUI, supporting another
quarter of strong growth in Video-on-Demand transactions
Financial highlights Q2 2013
· Revenues up 1.4% y-o-y to ?391.9 million (down 0.2% excluding Esprit
Telecom). Underlying revenues excluding set-top box sales and other revenues up
0.6% organically, despite a 5.2% decline in telephony usage revenues.
· Adjusted EBITDA ?221.0 million, up 0.8% y-o-y. Excluding Esprit Telecom,
EBITDA up 0.3%
· Free cash flow ?95.0 million, down 40.1% y-o-y due to growth in capital
expenditure and acquisition of Esprit Telecom
· Net profit up to ?88.9 million, from ?64.4 million in Q2 2012
· Earnings per share ?0.44
· Leverage ratio down to 3.41x compared to 3.42x at year-end 2012
CEO Bernard Dijkhuizen:
"During the second quarter we experienced similar market dynamics as in the last
few quarters. Our sales campaigns for the All-in-1 bundle were successful and
continued to deliver good results, taking into account Q2 seasonality. At the
same time, churn levels continued to be relatively high historically,
particularly for lower spending customers, having an impact on revenue growth in
the consumer market. In order to reduce churn we have developed and launched
several programs during the second quarter targeting to improve customer
retention. Our focus on sales of All-in-1 bundles and retention had an adverse
effect on marketing initiatives for premium TV, contributing to a limited growth
in digital pay TV this quarter.
In addition to our loyalty campaigns, we prepared the increase of internet
speeds and started to roll out the popular Ziggo WifiSpots. Ziggo WifiSpots
creates through the public channel of the modems from all Ziggo internet
customers a large number of Wifi-hotspot access points in our footprint for
Ziggo customers. The roll out will result in over 850,000 hotspots by the end of
the third quarter and close to 1 million before the end of the year. This new
service strongly supports the appeal and attractiveness of our services to our
customers and the response by customers and media has been overwhelming.
To further leverage the benefits of the Ziggo WiFiSpots we will also launch an
MVNO-based mobile offering for existing customers in the second half of this
year. This proposition will offer an attractive price for a bundle of call
minutes/SMS and mobile data in combination with high quality internet access
through the Ziggo WifiSpots. This proposition will grow over time to a fully
converged mobile offering.
While in consumer markets RGUs and revenue growth came in below our
expectations, we were pleased to see continued strong organic revenue growth in
our B2B operations. On top of that we benefited from a first contribution from
our acquisition Esprit Telecom. This acquisition will stimulate organic revenue
growth in the SME market (small and medium-sized enterprises) going forward, in
addition to growth in the small and home offices market through our office
bundles."
Outlook
Following the decision to further step up our campaigns and investments in
customer retention, our Ziggo WifiSpots and the launch of our mobile offering,
and taking into consideration the higher than anticipated churn in the first
half year, our outlook for the full year 2013 will change. We now anticipate
2013 organic revenue growth (excluding 'revenues from other sources') to be
around 1%, whilst adjusted EBITDA is expected to be in line with last year. Our
capital expenditure for 2013 is expected to increase to a range of ?330-340
million primarily due to higher investment in customer premises and equipment to
support customer retention and investments for the launch of Ziggo mobile.
In line with the dividend policy, Ziggo intends to pay an interim dividend of
?190 million, equal to ?0.95 per share, in September 2013.
Important dates
This year, Ziggo expects to publish its quarterly results on the following
dates:
Q3 2013 October 18, 2013
FY and Q4 2013 January 23, 2014
Interim dividend 2013:
September 3, 2013 Ex-dividend (at opening)
September 5, 2013 Record date (after close)
September 10, 2013 Payment date
Note
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 ?0.0 million
respectively ?0.0 million for the quarter and half year ended June 30, 2013 and
?0.0 million respectively ?39.7 million for the quarter and half year ended June
30, 2012.
(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 June
30, 2013, 862,000 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 total 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 (31,909), Office Plus (1,291) and Internet Plus (10,143) targeted at SOHO
and small businesses and our collective TV contracts TOM and TOMi (representing
80,000 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 124,000 TV RGUs, 14,000 digital pay TV RGUs,
43,000 internet RGUs and 33,000 telephony RGUs.
(6) Besides 1,446,000 subscribers who subscribed to the All-in 1 bundle,
12,000 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 (6,845,000 as at
June 30, 2013) divided by the total number of consumer standard TV subscribers
(2,694,000 as at June 30, 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.
(9) We have changed the definition of net debt for the calculation of the
leverage. Net debt is defined as the outstanding balance of the principal amount
of our borrowings plus the accrued interest on these borrowings and the market-
to-market value of the derivative financial instruments, reduced by the balance
for cash and cash equivalents. Before the balance of accrued interest and the
market-to-market value of the derivative financial instruments was not included
in the calculation of net debt.
About Ziggo
Ziggo is a Dutch provider of entertainment, information and communication
through television, internet and telephony services. The company serves around
2.8 million households, with over 1.8 million internet subscribers, almost 2.3
million subscribers for digital television and 1.5 million telephony
subscribers. Business-to-business subscribers use services such as data
communication, telephony, television and internet. The company owns a next-
generation network capable of providing the bandwidth required for all future
services currently foreseen. More information on Ziggo can be found on:
www.ziggo.com.
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Not for publication
For more information please contact:
Press Analysts and Investors
Martijn Jonker Wouter van de Putte
Deputy Corporate Communications Corporate Finance & Investor Relations
Director Director
+31 (0)88 717 2419 | +31 (0)88 717 1799 |
Martijn.Jonker(at)office.ziggo.nl investorrelations(at)office.ziggo.nl
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Ziggo Q2 2013 Results:
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Datum: 18.07.2013 - 07:33 Uhr
Sprache: Deutsch
News-ID 279500
Anzahl Zeichen: 12786
contact information:
Town:
Utrecht
Kategorie:
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