20090506 1Q09 Final CA Eng
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1Q09 Earnings Announcement 1. Key Highlights of 1Q09 Results 3 2. Business Review 6 3. Consolidated Income Statement 11 4. CAPEX and Cash Flow 14 5. Consolidated Balance Sheet 16 6. Shareholder Remuneration 18 7. Disclaimer 19 8. Enquiries 19 ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. 2/19 1Q09 Earnings Announcement Lisbon, Portugal, 6 May 2009: today ZON announces its unaudited results for 1Q09. Operating Revenues +7.1% to €201.5 million EBITDA +9.1% to €64.3 million Net Income (6.7)% to €19.5 million Continued strong growth in Broadband and Voice 29% Triple Play penetration over cable customers in 1Q09 184 thousand ZON Boxes Blended ARPU grew by 3.5% to 32.7 euros Table 1. Key Financial Highlights (Millions of Euros) 1Q09 / 1Q08 1Q09 1Q08 Operating Revenues 188.1 201.5 7.1% EBITDA (1) 58.9 64.3 9.1% EBITDA margin 31.3% 31.9% 0.6pp Operating Profit (EBIT) (2) 30.7 18.4 (40.3%) Net Income 20.9 19.5 (6.7%) "Baseline" CAPEX 24.3 44.8 84.3% Net Financial Debt 77.9 524.9 n.a. (1) EBITDA = Income From Operations + Depreciation and Amortization; (2) EBIT = Income Before Financials and Income Taxes • Operating Revenues increased to 201.5 million euros in 1Q09 , representing y.o.y. growth of 7.1% with revenues from Pay TV, Broadband and Voice increasing by 9.2% to 181.8 million euros; • EBITDA increased to 64.3 million euros in 1Q09 , representing y.o.y growth of 9.1%; • EBITDA margin was 31.9% compared with 31.3% in 1Q08 and 28.2% in 4Q08 ; • Net Income recorded a decline of (6.7)% to 19.5 million euros compared with 1Q08 and an increase from negative (2.9) million euros in 4Q08; ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. 3/19 1Q09 Earnings Announcement • Operating Cash Flow increased to 40.3 million euros, compared with 2.5 million euros in 1Q08 and 11.7 million euros in 4Q08; • Baseline CAPEX of 44.8 million euros in 1Q09 , representing 22.2% of operating revenues, compared with 24.3 million euros in 1Q08. Excluding customer terminal equipment, CAPEX increased by 28.4% to 22.4 million euros; • Net Financial Debt at the end of 1Q09 was 524.9 million euros (2.1x Net Financial Debt / EBITDA) representing a reduction of 5% in comparison with 4Q08; Table 2. Key Operational Highlights ('000) 1Q09 / 1Q08 1Q09 1Q08 Net Addtions RGUs (1) 101.9 134.2 31.6% Triple Play Customers 38.6 64.5 67.0% Digital Extended Basic 17.7 43.7 146.5% Basic Subscribers (2) (3) 13.4 (18.2) n.a. Broadband Internet 15.7 27.0 72.6% Fixed Voice 55.1 72.8 32.1% Mobile Voice 0.0 8.8 n.a. End-of-Period RGUs 2,514.8 3,116.4 23.9% Triple Play Customers 107.3 339.8 216.7% Digital Extended Basic 399.8 539.6 35.0% Basic Subscribers 1,560.5 1,595.4 2.2% Broadband Internet 415.9 546.1 31.3% Fixed Voice 138.6 419.4 202.6% Mobile Voice 0.0 16.0 n.a. Blended ARPU 31.6 32.7 3.5% % Triple Play Cable Customers 10% 29% 19.1 pp (1) Revenue Generating Units correspond to the sum of Pay TV basic customers, plus Pay TV extended basic customers, plus broadband internet customers, plus fixed and mobile voice customers. (2) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and hotels), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels; (3) These figures include products in temporary promotions, such as "Try and Buy" promotions; NOTE: 1Q09 figures include the acquisitions of TVTel and Parfitel operations. • 3,116.4 thousand RGU’s, representing continued strong momentum in take-up of new services with net adds of 134.2 thousand in 1Q09, compared with 101.9 thousand in 1Q08; • 339.8 thousand customers subscribe to 3P services: 29% of cable customers, up from 10% in 1Q08 and 23% in 4Q08; ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. 4/19 1Q09 Earnings Announcement • RGUs per subscriber continued to increase to 1.94 compared with 1.61 in 1Q08 and 1.84 in 4Q08 (including the acquisition of TVTel and Parfitel operations); • ARPU growth of 3.5% to 32.7 euros led by the increasing number of RGUs/subscriber and 3P penetration; • 184 thousand ZON boxes installed , less than one year after launch, 93 thousand installed during 1Q09; • 43.7 thousand new “Funtastic” subscribers in 1Q09 representing 33.8% penetration of this higher value digital TV service, up from 25.6% in 1Q08; • Continued strong momentum in Broadband and Voice with net adds of 27 thousand and 72.8 thousand respectively in 1Q09. ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. 5/19 1Q09 Earnings Announcement Table 3. Business Indicators ('000) 1Q09 / 1Q08 1Q09 1Q08 Pay TV, Broadband and Voice Homes Passed 2,773.7 3,057.8 10.2% Basic Subscribers (1) (2) 1,560.5 1,595.4 2.2% of which Digital Extended Basic 399.8 539.6 35.0% Premium Pay TV 832.6 835.3 0.3% Broadband Internet 415.9 546.1 31.3% Fixed Voice 138.6 419.4 202.6% Mobile Voice 0.0 16.0 n.a. RGUs (3) 2,514.8 3,116.4 23.9% RGUs (3) per Subscriber (units) 1.61 1.94 20.1% Triple Play Customers 107.3 339.8 216.7% % Triple Play Cable Customers 10% 29% 19.1pp Blended ARPU 31.6 32.7 3.5% Net Additions Basic Subscribers 13.4 (18.2) n.a. Digital Extended Basic 17.7 43.7 146.5% Premium Pay TV (8.0) (1.9) (76.0%) Broadband Internet 15.7 27.0 72.6% Fixed Voice 55.1 72.8 32.1% Mobile Voice 0.0 8.8 n.a. RGUs 101.9 134.2 31.6% Triple Play Customers 38.6 64.5 67.0% Cinema Exhibition Revenue per Ticket (Euros) 4.1 4.3 4.9% Tickets Sold 2,199.5 1,950.1 (11.3%) Screens (units) 200 213 6.5% (1) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and hotels), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels; (2) These figures include products in temporary promotions, such as "Try and Buy" promotions; (3) Revenue Generating Units correspond to the sum of Pay TV basic customers, plus Pay TV extended basic customers, plus broadband internet customers, plus fixed and mobile voice customers. NOTE: 1Q09 figures include the acquisitions of TVTel and Parfitel operations. ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. 6/19 1Q09 Earnings Announcement Triple Play ZON continues to record strong growth in the number of customers that subscribe to Triple Play services. Stimulated by the attractive product combinations and higher value proposition of ZON bundles, by the end of 1Q09, ZON already had 339.8 thousand Triple Play customers, of which 64.5 thousand were like-for-like net-adds in the quarter. As a percentage of cable customers, Triple Play subscribers represented 29% compared with 10% at the end of 1Q08 and 23% at the end of 4Q08. 50% 400 TRIPLE PLAY SUBSCRIBERS 45%(thousands) and PENETRATION 339,8 350 40%(% of cable customers) 300 35% 258,0 30% 250 193,4 25% 29% 200 153,3 20% 23% 150 15% 107,3 18% 100 10% 14% 5% 10% 50 0% 0 1Q08 2Q08 3Q08 4Q08 1Q09 Note: these numbers include the acquisition of TVTel and Parfitel Operations from 4Q08. On average, by the end of 1Q09, each customer was subscribing to 1.94 services, compared with 1.61 services at the end of 1Q08. The growth in services subscribed was led by the continued uptake of broadband and voice services and of ZON’s digitally enhanced TV offer “Funtastic” and total RGUs increased by 23.9% to 3116.4 thousand in 1Q09 compared with 2514.8 thousand in 1Q08. RGU2,20 / Sub 2,00 1,94 1,84 1,80 1,75 1,68 1,61 1,60 1,40 1,20 1Q08 2Q08 3Q08 4Q08 1Q09 Note: these numbers include the acquisition of TVTel and Parfitel Operations from 4Q08. This continued strong growth momentum reinforces ZON’s position as the leading Triple Play operator in Portugal and is the driver of the additional revenues received from each customer. Average Revenue per Subscriber increased by 3.5% to 32.7 euros in 1Q09, compared with 31.6 euros in 1Q08. ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. 7/19 1Q09 Earnings Announcement As from 1Q09, ARPU is reported incorporating the effect of the acquisitions of the TVTel and Parfitel operations, which had a lower average blended ARPU than ZON stand-alone. Excluding the effect of these acquisitions, ZON’s stand-alone ARPU would have increased 5.1% from 31.6 euros in 1Q08 to 33.2 euros in 1Q09. Blended32,8 ARPU 32,7 * (Euros) 32,6 32,4 * 32,4 32,2 32 32 31,8 31,8 31,6 31,6 31,4 31,2 31 1Q08 2Q08 3Q08 4Q08 1Q09 * Excluding the acquisitions of TVTel and Parfitel operations, Blended ARPU would have been 32.7 euros in 4Q08 and 33.2 euros in 1Q09.