Kabel Deutschland Reports Highest RGU Growth From Premium Services Since Commercial Launch In 2006
Highlights for Kabel Deutschland’s consolidated third quarter ended
December 31, 2007 under IFRS:
- Total Revenue Generating Units (‘RGU’)(1) increase to 10,532.3 thousand. Internet and Phone RGUs increase by 145.1 thousand units in the quarter reaching 604.7 thousand, a 126.4% increase over prior year. Digital Pay TV RGUs increase by 32.0 thousand units in the reported quarter reaching 763.4 thousand on December 31, 2007, a 15.6% increase over last year. Premium services RGUs (digital access, pay TV, PVRs, Internet and Phone) now comprise 20.6% of total RGUs compared to 11.4% in the previous year. The shift towards premium services contribute to an increase in total blended ARPU per RGU(2) by almost 8% to €8.32 from €7.71.
- Total revenues grow by 10.2% to €301.3 million compared to €273.3 million on a same store basis.
- Subscription based revenues grow by 10.2% and reach €263.4 million (€239.0 million). They now account for 87.4% of total revenues.
- Subscription based revenues from the Company’s premium services amount to €49.5 million and represent 18.8% of the Company’s overall subscription based revenues (€30.0 million representing 12.5% of the overall subscription based revenues in the quarter ended December 31, 2006).
- RGU growth and a shift in product mix to premium services fuel EBITDA growth on a same store basis. EBITDA as adjusted(3) increases by 10.6% and amounts to €115.4 million compared to €104.3 million on a same store basis. EBITDA margin(4) remains stable at 38.3% (38.2%).
Highlights for Kabel Deutschland’s consolidated nine months ended
December 31, 2007 under IFRS:
- Total revenues grow by 8.8% to €885.1 million on a same store basis compared to €813.2 million.
- Subscription based revenues grow by 9.7% to €775.2 million (€706.4 million). They now account for 87.6% of total revenues.
- Subscription based revenues from the Company’s premium services amount to €130.8 million and represent 16.9% of the overall subscription based revenues (€75.3 million representing 10.7% in the nine months ended December 31, 2006).
- EBITDA as adjusted grows by 15.1% and amounts to €333.7 million compared to €290.0 million on a same store basis for the first nine months ended December 31, 2006. EBITDA margin increases to 37.7% (35.7%).
Kabel Deutschland (KDG), Germany’s largest cable based TV, Internet and Phone services provider, announced today its financial results for the quarter and nine months ended December 31, 2007. These results impressively underline the successful development of the Company’s premium services strategy.
RGUs as of December 31, 2007 and ARPUs for the quarter ended December 31, 2007
KDG served 10,532.3 thousand total RGUs on December 31, 2007. The average services taken by a customer increased to 1.17 compared to 1.10 in the previous year. During the reported quarter total blended ARPU per RGU for all KDG products increased by 7.9% to €8.32 from €7.71 in the same quarter last year. Total blended ARPU per subscriber(5) for all KDG products amounted to €9.62 and grew by 14.7% from €8.39.
Kabel Anschluss RGUs were 9,112.4 thousand (thereof 747.3 thousand digital cable access RGUs). Monthly ARPU(6) for the Kabel Anschluss product amounted to €7.76 in the quarter ended December 31, 2007.
Kabel Digital pay TV RGUs increased by 15.6% in the past year to 763.4 thousand at December 31, 2007. ARPU remained fairly flat at €7.54. On December 31, 2007 the number of digital RGUs amounted to 1,562.5 thousand (929.0 thousand in the pervious year). With that, KDG reached a digital TV RGU penetration of 14.8%. Including the Premiere subscribers in KDG’s footprint this digital TV penetration amounted to over 20%.
Kabel Internet and Phone RGUs increased by 126.4% to 604.7 thousand (thereof 285.0 thousand Phone RGUs) at December 31, 2007 from 267.1 thousand (thereof 121.2 thousand Phone RGUs) at December 31, 2006. The Internet and Phone RGU numbers are generated from to 340.8 thousand subscribers resulting in a RGU / subscriber ratio of 1.77. Monthly ARPU per RGU for Kabel Internet amounted to €14.51 (€16.15 in the quarter ended December 31, 2006) and €25.11 for Kabel Phone (€28.30). Blended monthly ARPU per subscriber for Internet and Phone yielded €34.43.
Premium services RGUs reached 20.6% of the Company’s overall RGU base compared to 11.4% in the previous year.
KDG’s financial results for the nine months ended December 31, 2007
Capital expenditures and liquidity
Overall capital expenditures (Capex) without acquisitions amounted to €195.4 million. Of this amount, approximately 55% were used for the network upgrade related to KDG’s Internet and Phone services. The comparable Capex in the previous year’s period amounted to €173.5 million of which 47% were spent for the network upgrade. The increase in Capex used for these activities underlines the Company’s commitment to expand its triple play business with more than 70% of the Company’s level 3 network upgraded at the end of December 2007.
December is typically the seasonal low point in the cash cycle. Cash on hand of €83.0 million coupled with revolver capacity yielded €253.0 million of liquidity on December 31, 2007.
Balance sheet
Total interest bearing indebtedness was at €2,060.6 million with net debt at €1,977.6 million on December 31, 2007 resulting in a net debt / annualized quarterly EBITDA (€461.6 million) ratio of approximately 4.3 times.
Outlook and financial calendar
The Company’s management confirms its previous Capex guidance for the current fiscal year 2007/2008 to reach up to €330 million and its EBITDA guidance of €440 – 445 million.
The audited IFRS financials for KDG’s full fiscal year 2007/2008 ending March 31, 2008 will be released at the end of July 2008.
Please refer to our website www.kabeldeutschland.com for further information. The complete financial statements as of December 31, 2007 will be available on our website as of tomorrow. The updated Company Presentation can be downloaded as of today.
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
Senior Vice President Corporate Communications and Investor Relations
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 different services, thereby accounting for only one subscriber but for two RGUs.
(2) Total blended ARPU per RGU is calculated by dividing Kabel Anschluss, Kabel Digital, Kabel Internet, Kabel Phone, KD+ (PVR) and TKS (cable TV) subscription revenues (excluding installation fees) 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, amortization and non-cash compensation, which consists primarily of expenses related to the Company’s Management Equity Participation Program (MEP) and non-cash restructuring 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 revenues for the period.
(5) Total blended ARPU per subscriber is calculated by dividing Kabel Anschluss, Kabel Digital, Kabel Internet, Kabel Phone, KD+ (PVR) and TKS (cable TV) subscription revenues (excluding installation fees) for the relevant period by the average number of subscribers for that period and the number of months in the period.
(6) ARPU (Average revenue per unit) is calculated by dividing the subscription revenue (excluding installation fees) for a period by the average number of RGU for that period and the number of months in that period.
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