Ziggo Q3 2013 results: Strong growth of internet and triple play
(Thomson Reuters ONE) -
Utrecht, October 18, 2013
Ziggo N.V. Q3 2013 Results
Strong growth of internet and triple play
Broadband internet: 46,000 net adds in Q3
· Successful innovations and increased efforts in sales and customer
retention result in strong growth of net adds for internet, telephony and triple
play
· Roll-out of popular WifiSpots and increased internet speeds support
strong growth of internet subscribers
· Over 1 million WifiSpots activated since launch with number of users
and data offloaded growing every day
· Ziggo Mobile launched successfully on September 16 with efficient MVNO
and offload model
· Churn in customer base shows a decline compared to previous quarters
· Continued organic revenue growth for B2B of 7.5% y-o-y
Operational highlights Q3 2013
· All-in-1 bundle subscribers up 37,000 in Q3, resulting in 2.5% q-o-q
growth and 8.2% y-o-y growth; All-in-1 bundle penetration reaches 53.9% of our
consumer customer base
· Strong growth in internet subscribers of 46,000 in Q3, representing 2.5%
q-o-q growth and 6.3% y-o-y growth
· Telephony usage revenue stabilized at 0.3% y-o-y; up 1.8% excl. FTA rate
reductions in 2012 and 2013
· Revenues for digital pay TV down 2.7% y-o-y with loss of pay-TV
subscribers partially offset by high growth of VoD transactions, up 43% y-o-y
· B2B achieves continued growth with 4,000 net adds for its business
bundles
Financial highlights Q3 2013
· Revenue up 2.9% y-o-y to ?391.1 million; organic revenue excl. set-top
box sales and 'revenue from other sources' up 0.9%
· Adjusted EBITDA ?220.4 million, down 2.9% y-o-y from the record quarter
Q3 2012.
Excluding Esprit Telecom, EBITDA down 3.6%
· Free cash flow ?136.3 million, down 25.7% y-o-y due to higher capital
expenditure and increased spending on sales and retention
· Net profit up 19.4% to ?86.5 million, from ?72.4 million in Q3 2012
· Earnings per share increased by 19.4% y-o-y to ?0.43
· Leverage ratio back up to 3.55x following payment of dividend, in line
with our stated leverage target of around 3.50x
CEO Bernard Dijkhuizen:
"We recorded a very strong quarter with the highest sequential growth in net
adds since 2010. The growth in customers subscribing to internet and All-in-1
bundles doubled compared to the previous quarter. Our investments in sales,
focus on customer retention and the successful roll-out of the highly popular
WifiSpots all contributed to this achievement in the third quarter, which
normally is a somewhat softer quarter due to seasonality.
Customer retention in particular has been the center of our focus. We
successfully developed and launched new campaigns and adopted a more targeted
marketing approach, on the one hand, while on the other we increased the
attractiveness of our products. The internet speed increase for our triple play
bundles and broadband internet products (today as high as 150Mbps) and, more
importantly, the successful roll-out of WifiSpots, have contributed to a strong
increase in the number of subscribers. Since its launch we have activated over
1 million WifiSpots, which quickly gained popularity as is demonstrated by an
increasing number of users and data offloaded every day. We will continue to
expand the coverage by adding more Wifispots in our footprint.
Another important step in Q3 was the launch of Ziggo Mobile, a cornerstone for
our converged strategy aimed at making content and information available
anywhere at any time. Using our MVNO agreement, we launched a simple and
straightforward Sim Only proposition, which is attractively positioned in terms
of price and value for money and is currently exclusively available for existing
Ziggo customers. It comprises a rich bundle of call minutes/SMS and mobile data,
supplemented by additional and unlimited access to 1 million WifiSpots. By
leveraging our existing assets, and based on our strong position and solid
reputation in the Dutch market, we believe Ziggo is very well positioned to
build a sound mobile franchise as a basis for offering fully converged services.
Even though this quarter was very successful in terms of growth of RGUs, we
believe that for the foreseeable future the market will remain as competitive as
we have seen in the last 6 quarters. At the same time, the high single digit
All-in-1 bundle and broadband internet RGU growth in Q3, strong momentum for B2B
in the SoHo- and SME-market and the successful launch of Ziggo Mobile will
position us strongly for 2014".
Outlook
We reiterate our previous revenue and EBITDA guidance for the full year 2013.
Organic revenue growth (excl. 'revenues from other sources') is expected to be
around 1%, whilst adjusted EBITDA (excl. acquisitions) is expected to be in line
with last year, including increased investment in sales and retention and
additional campaigns supporting our mobile launch.
Following the success of our campaigns in Q3, capital expenditure for 2013 will
be around ?340 million, the high-end of the ?330-?340 million range previously
given. This includes increased supply of interactive set-top boxes on the back
of success driven sales- and retention campaigns as well as higher demand for
Wifi-enabled modems and investments related to the launch of Ziggo Mobile.
In January 2014, Ziggo intends to propose the final dividend for the 2013
financial year. This final dividend is subject to shareholder approval and
refinancing of the existing senior unsecured notes that are callable as of May
2014.
Important dates
Ziggo expects to publish its coming quarterly results on the following dates:
FY and Q4 2013 January 23, 2014
Q1 2014 April 16, 2014
Q2 2014 July 17, 2014
Q3 2014 October 16, 2014
The 2014 AGM is scheduled for April 17, 2014.
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 almost 1.9 million internet subscribers, almost
2.3 million subscribers for digital television and 1.6 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.
--------------------------------------------------------------------------------
Not for publication
For more information please contact:
Press Analysts and Investors
Martijn Jonker Wouter van de Putte
Corporate Communications Director a.i. Corporate Finance & Investor Relations
+31 (0)88 717 2419 | Director
Martijn.Jonker(at)office.ziggo.nl +31 (0)88 717 1799 |
investorrelations(at)office.ziggo.nl
Caspar Bos
Manager Investor Relations
+31 (0)88 717 4619 |
investorrelations(at)office.ziggo.nl
--------------------------------------------------------------------------------
Q3 2013 Results:
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Source: Ziggo via Thomson Reuters ONE
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