Kabel Deutschland reports over 16% EBITDA growth for the second quarter ended September 30, 2007 of its fiscal year March 31, 2008
Highlights for Kabel Deutschland’s consolidated second quarter ended
September 30, 2007 under IFRS:
- Total Revenue Generating Units (‘RGU’)(1) remain stable at 10,385.3 thousand on September 30, 2007 compared to 10,384.6 thousand on September 30, 2006. Total blended ARPU per RGU(2)) for all KDG products increases by over 7% to €8.23 during the reporting period from €7.67 in the same period last year.
- Total revenues grow by 7.3% to €294.1 million in the quarter ended September 30, 2007 compared to €274.2 in the prior year’s same period.
- Subscription based revenues grow by 8.5% and reach €257.6 million in the quarter ended September 30, 2007 (€237.4 million in the quarter ended September 30, 2006) representing 87.6% of total revenues during the reporting period (86.6% during the quarter ended September 30, 2006).
- Subscription based revenues from the Company’s pay TV and Internet and Phone services amount to €42.4 million and represent 16.5% of the Company’s overall subscription based revenues (€25.5 million representing 10.7% of the overall subscription based revenues in the quarter ended September 30, 2006).
- EBITDA as adjusted(3) increases by 16.3% and amounts to €110.7 million for the quarter ended September 30, 2007 compared to €95.2 million for the same period in the prior year. EBITDA margin(4) increases to 37.6% (34.7% in the quarter ended September 30, 2006).
- The Company posts a net profit for the quarter of €3.1 million (€9.8 million net loss in the previous year’s same quarter ended September 30).
Highlights for Kabel Deutschland’s consolidated six months ended
September 30, 2007 under IFRS:
- Total revenues grow by 8.1% to €583.8 million in the Company’s first six months ended September 30, 2007 compared to €539.9 in the same period in the prior year.
- Subscription based revenues grow by 9.5% to €511.9 million in the first six months of KDG’s fiscal year 2006/2007 (€467.4 for the six months ended September 30, 2006) and represent 87.7% of total revenues in this period (86.6% in the previous year).
- Subscription based revenues from pay TV and Internet and Phone amount to €81.3 million and represent 15.9% of the Company’s overall subscription based revenues (€45.4 million representing 9.7% of the overall subscription based revenues in the six months ended September 30, 2006).
- EBITDA as adjusted grows by 17.6% and amounts to €218.3 million for the first six months ended September 30, 2007 compared with €185.6 million for the first half year ended September 30, 2006. EBITDA margin increases to 37.4% (34.4% in the half year ended September 30, 2006).
- The Company posts a net loss for the six months of €1.1 million (22.9 million net loss in the previous year’s same period ended September 30).
Unterfoehring, November 29, 2007 – Kabel Deutschland (KDG), Germany’s largest cable operator, announced today its financial results for the quarter and six months ended September 30, 2007. These results impressively underline the successful development of the Company’s Internet and Phone products.
RGUs as of September 30, 2007 and ARPUs for the quarter ended September 30, 2007
With a total of 9,069.5 thousand subscribers, KDG served 10,385.3 thousand total RGUs on September 30, 2007 (10,384.6 thousand on September 30, 2006). The ratio of RGUs to subscribers increased to 1.15 on September 30, 2007 compared with 1.09 on September 30, 2006. During the quarter ended September 30, 2007 total blended ARPU per RGU for all KDG products increased by 7.3% to €8.23 from €7.67 in the same period last year. Total blended ARPU per subscriber(5) for all KDG product amounted to €9.37.
Kabel Anschluss RGUs served were 9,155.9 thousand at September 30, 2007 (9,571.5 thousand on September 30, 2006). Of the 9,155.9 thousand Kabel Anschluss RGUs 654.2 thousand were digital access RGUs (approximately 132.5 thousand at September 30, 2006). Monthly ARPU(6) for the Kabel Anschluss product amounted to €7.76 in the quarter ended September 30, 2007 compared to €7.39 in the previous year’s same period.
Kabel Digital pay TV RGUs increased by 21.6% to 731.4 thousand at September 30, 2007 from 601.3 thousand RGUs on the same date in the previous year. ARPU increased by 3.8% to €7.93 during the quarter ended September 30, 2007 (€7.64 during the previous year’s same period).
Kabel Internet and Phone RGUs more than doubled from 211.8 thousand (thereof 95.2 thousand Phone RGUs) at September 30, 2006 to 459.6 thousand (thereof 214.2 thousand Phone RGUs) at September 30, 2007. Monthly ARPU per RGU during the reporting period for Kabel Internet amounted to €14.46 (€16.96 in the quarter ended September 30, 2006) and €24.81 for Kabel Phone (€28.37).
KDG’s financial results for the six months ended September 30, 2007
Cash flow and liquidity
Cash flow from operations for the six months ended September 30, 2007 amounted to €94.6 million compared to €61.2 million in the previous year’s same period – an increase of 33.4 million or 54.6%.
Capital expenditures of €106.3 million recorded in the six months ended September 30, 2007 (€104.0 million in the previous year’s same period) included €83.2 million for the expansion and upgrade of the cable television network and €23.2 million in IT systems and other intangible assets. KDG’s Internet and Phone related capital expenditures amounted to €56.1 million in the reporting period ended September 30, 2007 compared to €48.1 million in the previous year. The Company also used €35.1 million for the investment in Primacom shares.
The overall positive cash flow from financing activities amounted to €5.8 million and results from drawings under the revolving credit facility in the net amount of €100.0 million and the payment of interest and transaction costs of €90.6 million for the six months ended September 30, 2007.
Balance sheet
Total interest bearing indebtedness as of September 30, 2007 amounted to €2,005.6 million nominal value. At September 30, 2007 the Company had €100.0 million outstandings under its existing €325.0 million revolving credit facility. Cash on September 30, 2007 amounted to €15.3 million.
Net debt on September 30, 2007 was €1,990.3 million resulting in a total net debt to adjusted annualized EBITDA (€442.8 million) ratio of approximately 4.5 times.
Significant events between July 1, 2007 and reporting date
- On July 9, 2007 KDG announced a “lifelong” free telephony product for subscribers in many cities in the Northern part of Germany, including the city of Hamburg and its suburbs.
- On July 19, 2007 the Company closed an agreement with its credit banks to increase the existing revolving credit facility from previously €200.0 million to €325.0 million effective immediately.
- On August 31, 2007 KDG increased its maximum download speed for its premium Internet product to 26Mbit/s.
- As of mid September 2007 the Company added another 2 million households in the region of Lower Saxony to its overall marketable base for Internet and telephony products.
- On September 20, 2007 KDG announced the acquisition of approximately 1.2 million cable subscribers from the Orion Group for €585 million. The cable assets are located in eight German federal states in the Company’s footprint. The closing is expected in spring 2008 after FCO clearance. At the same time, KDG also announced that it was to tender its Primacom shares into the Orion offer.
- On October 30, 2007 Kabel Deutschland signed a €650 million Senior Term Loan Facility to provide funding for the previously announced acquisition and potential additional acquisitions of cable assets.
- As of November 19, 2007 the Company has increased the maximum download speed for its premium Internet product “Deluxe” to 30 Mbit/s. At the same time, it doubled the upload speed from 1 Mbit/s. to 2 Mbit/s. KDG’s best selling double flat product “Comfort” now offers 20 Mbit/s download speed (previously 10 Mbit/s).
Financial calendar
The IFRS financials for the third quarter / first nine months (as of December 31, 2007) of KDG’s fiscal year 2007/2008 ending March 31, 2008 will be released at the end of February 2008. The Company intends to hold a management conference call with the financial community on that date.
Please refer to our website www.kabeldeutschland.com for further information. The complete financial statements as of September 30, 2007 as well as our updated Company Presentation will be available on our website as of tomorrow.
About Kabel Deutschland
Kabel Deutschland (KDG) operates cable networks in 13 German states and supplies its services to approximately 9 million connected TV households in Germany. Being Germany's largest cable network operator und biggest triple play provider, Kabel Deutschland develops and markets new triple play offers for digital TV, broadband Internet and telephone connection via cable. KDG offers an open digital TV platform for all program providers. The company operates the networks, markets cable connections and provides comprehensive services for all matters of cable connectivity. In fiscal year 2007/2008 (12 months ended March 31, 2008), Kabel Deutschland reported a total revenue of approx. EUR 1.2 billion, EBITDA amounted to EUR 457.8 million. The company has around 2,750 employees
Contact:
Investor Relations and Finance
Betastr. 6-8
85774 Unterfoehring
Germany
Insa Calsow
Director Investor Relations and Finance
Elmar Baur
Investor Relations Manager
Astrid Adamietz
Investor Relations and Finance Assistant
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Footnotes
(1) RGU (Revenue Generating Unit) is related to the sources of revenue, which may not always be the same as subscriber numbers. For example, one person may subscribe to two differ-ent services, thereby accounting for only one subscriber but for two RGUs.
(2) Total blended ARPU is calculated by dividing analog cable television, Kabel Digital, High-speed Internet and Phone subscription revenues for the relevant period by the average number of RGUs for that period and the number of months in the period.
(3) EBITDA as adjusted is defined as earnings before interest, taxes, depreciation, amortiza-tion and before MEP related expenses. EBITDA as adjusted is not a recognized accounting term and should not be used as a measure of liquidity. However, EBITDA as adjusted is a common term used to compare the operating activities of cable television companies.
(4)EBITDA margin is defined as EBITDA as defined above for the period divided by total reve-nues for the period.
(5) ARPU (Average revenue per unit) is calculated by dividing the subscription revenue (exclud-ing installation fees) for a period by the average number of RGU’s for that period and the number of months in that period.
This Investor Relations Release contains forward looking statements within the meaning of the U.S. federal securities laws regarding, among other things, the completion of the Exchange Offer. You can identify these statements by the fact that they use words such as “anticipate”, “estimate”, “project”, “intend”, “plan”, “believe” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or events. Factors that could affect whether the Exchange Offer is completed include, among other things, the risk that the conditions to the Exchange Offer are not satisfied. A further list and description of risks, uncertainties and other matters can be found in the prospectus for the Exchange Offer. We assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Investors and security holders are urged to read our quarterly report available on our website because it will contain important information. We disclaim any obligation to publicly update or revise any forward-looking information.