Ziggo: Q4 and Full Year 2013 Results

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Beleggingsadvies 24/01/2014 08:03
Continued RGU growth supported by broadband internet and business bundles
· Solid growth in internet and mobile telephony
· Customer churn down compared to last year
· Ziggo Mobile on track with 33,000 subscriptions by year-end 2013
· Successful B2B sales campaigns with 7,000 bundle net adds
· Further investments in marketing and retention, product development and network
· Discussions with Liberty Global on-going and progressing

Operational highlights Q4 2013
· Internet subscribers up 32,000 in Q4 to a total of 1.91 million, representing 1.7% sequential growth and 6.8% y-o-y growth
· All-in-1 bundle subscribers up 19,000 (incl. 7,000 triple play business bundles)[1] in Q4 to a total of 1.54 million, resulting in 1.2% q-o-q growth and 8.1% y-o-y growth
· All-in-1 penetration reaches 56.2% of our consumer customer base
· Telephony usage revenue is flat y-o-y and up 1.4% excluding FTA rate reduction
· Digital pay TV revenue decreased y-o-y owing to a 57,000 decline in subscribers, partly offset by an ARPU increase and a strong uptake in VOD
· Consumer ARPU for the quarter grew by 5.5% y-o-y to €42.73

Financial highlights Q4 2013
· Revenues up 2.8% y-o-y to €394.0 million; up 1.7% y-o-y excl. Esprit and 'other revenue'
· Adjusted EBITDA €222.8 million, up 2.1% y-o-y; up 1.4% y-o-y excl. Esprit
· Net result increased to €79.3 million from €70.4 million in Q4 last year
· Net debt amounts to €3.10 billion compared to €3.01 billion at year-end 2012
· Leverage ratio up to 3.5x compared to 3.4x at year-end 2012

Operational highlights FY 2013
· All-in-1 bundle subscribers up 115,0001 or 8.1% for FY 2013 (vs. 145,000 in 2012)
· Total internet subscribers up 122,000 or 6.8% for FY 2013 (vs. 103,000 in 2012)
· Strong increase of Wifi-coverage since launch in April, with over 1.1 million WifiSpots activated
· Rapid adoption of our interactive SGUI since launch in March with 310,000 users by year-end, covering already 40-50% of all VOD transactions

Financial highlights FY 2013
· Revenues up 1.8% y-o-y to €1,565 million; up 1.2% excl. Esprit and 'other revenue'
· B2B revenues up by 34.2% to €141.7 million; up 10.3% excl. Esprit
· Adjusted EBITDA up 0.7% y-o-y to €886.8 million; up 0.2% excl. Esprit
· Net result increased to €347.3 million in FY 2013 from €192.8 million in FY 2012
· Free cash flow down 25.1% to €470.9 million from €628.7million in FY 2012
· Earnings per share climb from €0.96 in 2012 to €1.74 in 2013

CEO Rene Obermann:
"Being new to Ziggo, I am impressed by the team and their achievements. The company has managed again to show growth in the most important service areas such as triple play and broadband internet. This was supported by a revised marketing strategy adopted early 2013 with higher investments in sales and promotions and particularly customer retention.

In a market with rapid technological changes, Ziggo managed to enhance and enforce its leading position through the addition of a range of new services. Whereas the launch of Ziggo mobile marked an important step into an increasingly converged world, the most innovative development clearly was the successful roll-out of Ziggo WifiSpots. Very quickly this concept has become very popular with free access to more than 1.1 million WifiSpots and more than 300 thousand unique users per week. These innovations are important steps into a future where all Ziggo customers have access to their personalized content wherever they are at any given time. Whilst we are aware that this strategic objective is a challenging one, I am confident that Ziggo is rightly positioned to get it done and continue its leading position in the market."

Outlook
Based on our strong network and appealing product offerings, we will continue to focus on our top-line in 2014. This will predominantly be facilitated by ongoing growth in broadband internet, Ziggo Mobile and our B2B activities.

As we anticipate no substantial change in the current competitiveness in the market, we intend to make further investments in sales and promotions, customer retention and product development to strengthen our position and improve our services. We expect these additional investments, which will be skewed towards the first half of the year, will result in a flat EBITDA for 2014 compared to last year. Following increased network investments to stay ahead of ever increasing customer demand for bandwidth, the investments in set top boxes to support customer experience and the continuation of investments to upgrade our IT systems to enable converged services, Capex will increase to around €370 million in 2014.

Statement on discussions with Liberty Global
Following our announcement on December 12, we have continued discussions with Liberty Global regarding a potential acquisition of the Company. These discussions have progressed. Further announcements will be made if and when relevant. There is no certainty that any agreement will be reached.

Statement on proposal for final dividend for financial year 2013
In view of on-going discussions with Liberty Global on a potential acquisition of our company, we cannot propose a final dividend for the financial year 2013 at this moment. We will announce a statement regarding any final dividend before the AGM.

Important dates
This year, Ziggo expects to publish its quarterly results on the following dates:
Q1 2014 April 16, 2014
Q2 2014 July 17, 2014
Q3 2014 October 16, 2014

The Annual General Meeting of Shareholders will be held on April 17, 2014.





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