SKY NETWORK TELEVISION ANNUAL RESULTS 2008
JOHN FELLET CEO
Subscribers
Subscriber Growth (42.1%)31.1 UHF Residential Total Subscribers Commercial/Other DBS Wholesale DBS (Satellite) Residential ‘ % % % %578.0 % Change2008
Total Net Gain
Moving Annual Churn
2008 Monthly Churn Split
Total Revenue
Total ARPU
ARPU
Additional Outlets
Big Mac Index
Sky’s Share of All Television Viewing is Growing. % Share of viewing in all NZ Homes Source: Nielsen TV Ratings, All New Zealanders 5+
Prime’s Share Source: Nielsen TV Ratings, All New Zealanders Peak
Advertising Revenue
Viewerhours generated by Subscriber per annum Source: Nielsen TV Ratings, All New Zealanders 5+/SKY TV
Programming Costs % Revenue
EBITDA
Satellite Impact Finance Lease Interest 0.80 Depreciation Operating lease (9 months in 2007)
Net Profit/(Loss)
DIVIDEND
The SKY Board has declared a fully imputed final dividend of 7.0 cps. Record date is 5 September Payment date is 12 September Total dividend for the year is 14.0 cps
JASON HOLLINGWORTH CFO
Capital Expenditure (excluding transponders and Prime assets)
Capital Expenditure Analysis $ NZ million %Change Subscriber Equipment % Studio Upgrade % Building % Other % Total Capital Expenditure %
DBS (Satellite) Install Costs $512 $719 $487 $454 $506 $439
Results Summary $NZ Million % Change Revenue % Operating Expenses % EBITDA % Depn & Amort (8.2%) EBIT % Interest (4.5%) Tax % Other0.2 0% Net Profit after Tax %
Revenue Analysis %476.3 Residential satellite subscriptions Total Revenue Other income Advertising Installation Other subscriptions $NZ million 6.5% % %66.5 (23%)16.1 (2.5%) 85.9 % Change2008
Expense Analysis $million % Change Programme rights % Programme operations % Subscriber management % Sales and marketing % Advertising % Broadcasting and infrastructure % Depreciation and amortisation (8.1%) Other administrative % Total Operating Expenses %
Cash Flow Analysis $NZ Million Capex % Debt reduction7930(62%) Dividend395233% Cash inc/(dec)(26)2(108%) Operating Cash Flow %
Prime Financials $NZ Million Revenue Rights Operations Program Costs Margin
Foreign Currency Hedging Sky’s hedging positions at 30 June % hedged for months $US 56% hedged for months $US 49% hedged for months $US 94% hedged for months $A 74% hedged for months $A 70% hedged for months $A average $US payment rate »for opex for year to June 08 = 69.0c June 07 = 63.5c
MYSKY HDi Financial Assumptions Our working assumptions for FY 08/09 are: Monthly box rental $15 or one-off $599 HD ticket $10/month Multiroom $25/month (including free HD ticket) Target 80,000 new MYSKY HDi boxes 15% upfront, 85% pay monthly 10% to new subscribers, 90% to existing subscribers 45% of MYSKY HDi take multiroom (to 103,000 boxes) 15% buy HD ticket (and no multiroom) MYSKY HDi gross churn rate of 7.4% MYSKY HDi cost is US$330 (vs standard decoder of US$122) MYSKY HDi ARPU $81 (vs $62 FY07)
Pro forma Impact FY09FY10 Capex$million Decoder Capex4043 MySKY HDi Installs1213 Depreciation Base depreciation7175 MySKY HDi P&L Impact MySKY HDi revenues1731 Incremental Opex810 EBITDA921 Depreciation719 EBIT22
MY SKY
JOHN FELLET CEO
GUIDANCE
Ratio Too Low Ratio Too High Ratio just Right Sky Network How appropriate is the level of gearing? Ross Carmichael Singer (NZ) Pty Limited, April 2008
SKY Highlights 1.6 new channels Crime & Investigation Vibe CNBC SKY Movies Greats SKY Sport Highlights Fashion TV 2.SKY Online launched 3.SKY Sport Magazine 4.Netball World Champs Nov Inaugural ANZ Championship 6.Screen Enterprises (Fatso, DVD Unlimited,Movieshack) 7.MYSKY HDi launch
Available now: 35 top Movies SKY Movies, MGM, Rialto Cartoon Network Discovery Channel The Box Air New Zealand Cup 200 sporting downloads Netball, Cricket, Rugby Live streaming and content download via broadband internet SKY Online
Net profit of $97.7m, up 26% Subscriber numbers up 5.3% to ARPU up 2.6% to $62.10, DBS ARPU up 1.9% to $66.12 Churn increased from 13.4% to 14.9% SKY share of total television viewing up from 25% to 28% 2008 Key Messages
SKY NETWORK TELEVISION ANNUAL RESULTS 2008