Sky Network Television Ltd · NZX:SKT
Sky Network Television — H1 2008 Earnings Presentation
32 slides from Sky Network Television's earnings presentation, Feb 22, 2008
Slide 1: Sky Network Television Interim Results 2008
SKY NETWORK TELEVISION INTERIM RESULTS 2008 John Fellet – CEO Jason Hollingworth - CFO 22 February 2008
Slide 2: Subscribers
Subscribers 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 UHF Satellite Wholesale My SKY SKY Half Year Results February, 08
Slide 3: Net Gain as at December 31
Net Gain as at December 31 17,118 16,215 11,980 9,708 5,150 2003 2004 2005 2006 2007 SKY Half Year Results February, 08
Slide 4: Domestic Subscriber Volumes, 6 months to December
Domestic Subscriber 6 months to December Volumes 60,000 56,683 56,317 56,174 50,000 46,970 47,860 42,846 40,000 30,000 20,000 10,000 0 2003 2006 2007 SKY Half Year Results February, 08
Slide 5: Net Gain – Rugby World Cup Impact
Net Gain – Rugby World Cup Impact 4,000 3,000 2,000 1,000 0 -1,000 -2,000 p c l v t g Ju Oc De No Se Au 2003 2007 SKY Half Year Results February, 08
Slide 6: Churn – Rugby World Cup Impact
Churn – Rugby World Cup Impact 2.1% 1.6% 1.1% 0.6% 0.1% p c l v t g Ju Oc De No Se Au 2003 2007 SKY Half Year Results February, 08
Slide 7: Interest in SKY is increasing over time
Interest in SKY is increasing over time 80 76 71 72 60 59 57 55 43 45 40 41 29 28 24 20 15 11 10 11 10 7 0 Jul '04 Mar '05 Jan '06 Sep '06 Mar '07 Nov '07 % Not interested % Any interest in getting SKY % Strong interest (Very/Quite likely) SKY Half Year Results February, 08 Base: Don’t have SKY (443
Slide 8: UHF v Digital Churn
UHF v Digital Churn 2.50% 2.00% 1.50% 1.00% 0.50% ug p ov ec ct l Ju Se O D A N UHF Digital SKY Half Year Results February, 08
Slide 9: Subscriber Growth – Dec v Dec
Subscriber Growth – Dec v Dec ‘000 Dec Dec % Change 2006 2007 UHF Residential 58.2 46.4 (20.2%) DBS (Satellite) Residential 507.2 542.5 7.0% DBS Wholesale 105.6 118.2 11.9% Commercial 12.5 13.9 11.0% Total Subscribers 683.5 721.0 5.5% SKY Half Year Results February, 08
Slide 10: Moving Annual Churn
Moving Annual Churn 30% 25% 20% 15% 10% n-98 n-99 n-00 n-01 n-02 n-03 n-04 n-05 n-06 n-07 Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju SKY Half Year Results February, 08
Slide 11: Monthly Churn
Monthly Churn 2.50% 2.00% 1.50% 1.00% 0.50% ug ay p ov b n ec n ar pr ct l Ju Ju Se Ja Fe O M A M D A N 2004 2007 2008 SKY Half Year Results February, 08
Slide 12: Prime Financials
Prime Financials as at December 31 $NZ Million 2006 2007 % Change Revenue 11.8 14.3 21% Rights 4.7 5.7 21% Operations 2.6 2.4 (8%) Program Costs 7.3 8.1 11% SKY Half Year Results February, 08
Slide 13: Total ARPU
Total ARPU as at December 31 $61.96 $60.28 $58.38 $56.68 $54.61 2003 2004 2005 2006 2007 SKY Half Year Results February, 08
Slide 14: Additional Outlets
Additional Outlets as at December 31 2006 2007 % Change UHF 26,577 21,871 (17.7%) Satellite 40,966 56,959 39.0% 67,543 78,830 16.7% MY SKY Subscribers 24,638 58% with 2nd outlets SKY Half Year Results February, 08
Slide 15: Total Revenue
Total Revenue $NZ million $619 $549 $492 $441 $391 $303 $329 2003 2004 2005 2006 2007 First 1/2 2008 Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS, Prime included in 2006 full year and 2007 half year SKY Half Year Results February, 08
Slide 16: Advertising Revenue
Advertising Revenue $NZ million $63.4 $47.0 $35.6 $31.4 $33.9 $26.6 $19.6 2003 2004 2005 2006 2007 First 1/2 2008 Year End 30 June Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS, Prime included in 2006 full year and 2007 half year SKY Half Year Results February, 08
Slide 17: Programming Costs % Revenue
Programming Costs % Revenue 43% 40% 34% 33% 32% 31% 2003 2004 2005 2006 First 1/2 2007 First 1/2 2008 Year End 30 June Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS, Prime included in 2006 full year and 2007 half year SKY Half Year Results February, 08
Slide 18: EBITDA
EBITDA $NZ million $249.4 $247.7 $219.8 $187.2 $150.8 $137.5 $124.4 2003 2004 2005 2006 2007 First 1/2 2008 Year End 30 June Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS, Prime included in 2006 full year and 2007 half year SKY Half Year Results February, 08
Slide 19: EBITDA
EBITDA $NZ million Including total Satellite costs for the 6 months $247.7 $219.8 $187.2 $150.8 $137.5 $124.4 2003 2004 2005 2006 First 1/2 First 1/2 2007 2008 Year End 30 June Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS, Prime included in 2006 full year and 2007 h
Slide 20: Net Profit/(Loss)
Net Profit/(Loss) $NZ million $77.9 $74.5 $60.2 $51.2 $35.3 $36.50 $0.7 2003 2004 2005 2006 2007 First 1/2 2008 Year End 30 June Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS, Prime included in 2006 full year and 2007 half year SKY Half Year Results February, 08
Slide 21: Capital Expenditure (excluding transponders)
Capital Expenditure $NZ million $81.4 $86.1 $86.8 $76.0 $57.4 $54.1 $40.0 2003 2004 2005 2006 2007 First 1/2 2008 Year End 30 June (excluding transponders) SKY Half Year Results February, 08 Note: prior 2005, numbers are SKY only, 2005 & 2006 restated for merger & IFRS
Slide 22: Capital Expenditure Analysis
Capital Expenditure Analysis $ NZ million 2006 2007 %Change Subscriber Equipment 30.8 25.1 (18.5%) Digital Expansion 0.9 0 (100%) Studio Upgrade 4.1 21.5 424.4% Building Improvements 0.8 1.4 75.0% Other 3.4 6.1 79.4% Total Capital Expenditure 40.0 54.1 27.8% SKY Half Year Results February, 08
Slide 23: DBS (Satellite)/MY SKY Decoder Stock
DBS (Satellite)/MY SKY Decoder Stock Opening decoders 59,205 (including 21,433 broken) Add purchases 40,256 Less written off (2,729) Less installed at customer (25,101) Net movement for the year 12,426 Closing decoders 71,631 (including 18,824 broken) SKY Half Year Results February, 08
Slide 24: Results Summary
Results Summary $NZ Million 2006 2007 % Change Revenue 303.4 328.7 8.3% Operating Expenses 179.0 191.2 6.8% EBITDA 124.4 137.5 10.6% Depn & Amort 44.7 38.3 (14.4%) EBIT 79.6 99.2 24.6% Interest 25.0 22.6 (9.7%) Tax 18.1 25.4 (40.3%) Net Profit after Tax 36.5 51.2 40.3% SKY Half Year Results February
Slide 25: Revenue Analysis
Revenue Analysis $NZ million 2006 2007 % Change Residential satellite subscriptions 211.8 234.6 10.7% Other subscriptions 44.0 44.1 0.2% Installation 10.0 9.4 (6.2%) Advertising 31.4 33.9 7.8% Other income 6.1 6.7 10.2% Total Revenue 303.4 328.7 8.3% SKY Half Year Results February, 08
Slide 26: Expense Analysis
Expense Analysis $million 2006 2007 % Change Programme rights 82.1 83.5 1.7% Programme operations 19.0 18.1 (4.6%) Subscriber management 20.5 22.1 8.0% Sales and marketing 18.6 19.4 4.1% Advertising 9.1 10.0 9.9% Broadcasting and infrastructure 21.9 29.7 35.9% Depreciation and amortisation 44.7 38.3
Slide 27: Foreign Currency Hedging
Foreign Currency Hedging Q For USD exposures Q 87% hedged for 6 months to 30 June 2008 @ 0.6701 Q 73% hedged for June 2009 year @ 0.6579 Q 46% hedged for June 2010 year @ 0.6393 Q For AUD exposures Q 93% hedged for 6 months to 30 June 2008 @ 0.8763 Q 81% hedged for June 2009 year @ 0.8688 Q 72% hedg
Slide 28: SKY Highlights
SKY Highlights • 2 new basic channels • Crime & Investigation 1 Sept • Vibe 1 Oct • CNBC 15 Oct • Sky Movie Greats • Sky Sports Highlights • Sky 1 became ‘the Box’ • Sky Sport rebranding • Sky’s website launched Sept • Olympics 2012 • Vodafone extension to contract SKY Half Year Results February, 08
Slide 29: MY SKY Guidance 2008/09
High Enhanced 320gb 4 Tuners Launch date Definition EPG Hardrive July 2008 • 50,000 box installs in MYSKY Guidance 2008/09 • Monthly subscription charge SKY Half Year Results February, 08
Slide 30: 2007/08 Guidance
2007/08 Guidance Analyst Consensus Forecasts RANGE MEAN EBITDA 264 – 271 269 NPAT 90 - 101 96 Capex 103 -127 112 Subscribers 741 – 752 748 Sky’s guidance is within a reasonable range of analyst’s current mean forecasts SKY Half Year Results February, 08
Slide 31: Interim Dividend
Interim Dividend The Board has declared a fully imputed interim dividend of 7.0 cps to be paid (=$27.2m). Supplementary dividend of 1.2352 cps to non-residents. Record date is 07 March 2008. Payment date is 14 March 2008. SKY Half Year Results February, 08
Slide 32: Sky Network Television Interim Results 2008
SKY NETWORK TELEVISION INTERIM RESULTS 2008 John Fellet – CEO Jason Hollingworth - CFO 22 February 2008
Sky Network Television — H1 2008 Earnings Presentation on 6ix