Sky Network Television Ltd · NZX:SKT
Sky Network Television — FY2010 Earnings Presentation
45 slides from Sky Network Television's earnings presentation, 2010
Slide 1: Sky Network Television Annual Results 2010
SKY NETWORK TELEVISION ANNUAL RESULTS 2010
Slide 2: CEO John Fellet
CEO JOHN FELLET
Slide 3: Total Revenue
Total Revenue $742 $692 $659 $619 $549 7.2% 5% 2006 2007 2008 2009 2010
Slide 4: Revenue Drivers
Revenue Drivers New Subscribers High Definition Movie Tiers MY SKY Additional Outlets SKYWATCH Sport Tiers FATSO Pay Per View Rialto SKY Sport The Magazine Country 99 TV PRIME
Slide 5: Total Net Gain
Total Net Gain 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 6: Total Net Gain
Total Net Gain 12.00% 7.00% 2.00% -3.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Unemployment GDP (1 Yr lag) -8.00%
Slide 7: Propensity to Subscribe
Propensity to Subscribe 3% 4% 13% 78% 1% 1% 0% 20% 40% 60% 80% 100% Very likely Fairly likely Neither likely non unlikely Fairly unlikely Very unlikely Don't know Source: Digital Tracker QB9
Slide 8: Monthly Churn
Monthly Churn 2.50% 2.00% 1.50% 1.00% 0.50% c ct n r b n ov g ar p ay l Ju Ap De Fe Se Ja Ju Au O M M N 2009 2010
Slide 9: 2010 Monthly Churn Split
2010 Monthly Churn Split 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% ov pr ug p ec l ct n b n ar ay Ju Se Ja Fe Ju O A M N D A M DBS (Satellite) My Sky
Slide 10: Subscribers
Subscribers 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 UHF Satellite Wholesale MY SKY
Slide 11: Subscriber Growth
Subscriber Growth ‘000 2009 2010 % Change UHF Residential 22.8 0 (100%) DBS (Satellite) Residential 623.6 659.2 5.7% DBS Wholesale 111.3 118.4 6.4% Commercial/Other 21.3 24.8 16.4% Total Subscribers 779.0 802.4 3.0%
Slide 12: MY SKY Subscribers
MY SKY Subscribers 125,000 100,000 189,975 75,000 50,000 103,991 25,000 27,764 19,760 8,900 0 2006 2007 2008 2009 2010
Slide 13: Additional Outlets
Additional Outlets 127,703 125,000 103,974 84,770 100,000 73,751 75,000 58,309 50,000 25,000 0 2006 2007 2008 2009 2010 UHF Satellite
Slide 14: MY SKY/HDi Subscribers
MY SKY/ HDi Subscribers 125,000 100,000 170,248 75,000 84,002 50,000 25,000 27,764 19,727 19,760 19,989 8,900 0 2006 2007 2008 2009 2010
Slide 15: Total ARPU
Total ARPU $67.61 $64.00 $62.10 $60.50 $58.30 2006 2007 2008 2009 2010
Slide 16: MY SKY ARPU
MY SKY ARPU $84.61 $78.02 2009 2010
Slide 17: Advertising Revenue
Advertising Revenue $23 $27 $22 $7 $21 $40 $41 $40 $36 $33 2006 2007 2008 2009 2010 Year End 30 June SKY PRIME
Slide 18: Total Television Market Advertising Revenue
Total Television Market Advertising Revenue 8% 4% 3% -2% -4% -7% -10% -16% -18% Jun 08 Qtr Sep 08 Qtr Dec 08 Qtr Mar 09 Qtr Jun 09 Qtr Sep 09 Qtr Dec 09 Qtr Mar 10 Qtr Jun 10 Qtr
Slide 19: Programming Costs % Revenue
Programming Costs % Revenue 33% 33% 32% 33% 32% 2006 2007 2008 2009 2010
Slide 20: EBITDA
EBITDA $287.5 $266.6 $261.0 $247.7 $249.4 2006 2007 2008 2009 2010
Slide 21: Net Profit/(Loss)
Net Profit/(Loss) $97.7 $103.0 $88.1 $60.2 $77.9 2006 2007 2008 2009 2010
Slide 22: CFO Jason Hollingworth
CFO JASON HOLLINGWORTH
Slide 23: Results Summary
Results Summary $NZ Million 2009 2010 % Change Revenue 692.0 741.8 7.2% Operating Expenses 431.0 454.3 5.4% EBITDA 261.0 287.5 10.2% Depn & Amort 96.1 112.5 17.1% EBIT 164.9 175.0 6.1% Interest 36.6 31.0 (15.3%) Tax 37.7 43.5 15.4% Other 2.5 (2.5) (200%) Net Profit after Tax 88.1 103.0 16.9%
Slide 24: Revenue Analysis
Revenue Analysis $ NZ million 2009 2010 %Change Residential Satellite Subscriptions 535.0 594.9 11.2% Other Subscriptions 69.1 61.9 (10.4%) Installation 16.2 14.6 (9.9%) Advertising 57.7 53.7 (6.9%) Other Income 14.0 16.7 19.3% Total Revenue 692.0 741.8 7.2%
Slide 25: Expense Analysis
Expense Analysis $million 2009 2010 % Change Programme rights 179.3 195.8 9.2% Programme operations 50.7 50.4 (0.6%) Subscriber management 54.5 60.2 10.5% Sales and marketing 41.7 39.2 (6.0%) Advertising 17.2 16.9 (1.7%) Broadcasting and infrastructure 70.3 74.5 6.0% Depreciation and amortisation 96
Slide 26: Capital Expenditure Analysis
Capital Expenditure Analysis $ NZ million 2009 2010 %Change Subscriber Equipment 109.7 102.5 (6.6%) Studio Upgrade 8.6 14.7 70.9% 0.9 4.3 377.8% Building Other 13.0 17.5 34.6% Total Capital Expenditure 132.2 139.0 5.1%
Slide 27: DBS (Satellite) Install Costs
DBS (Satellite) Install Costs $454 $506 $439 $463 $445 2006 2007 2008 2009 2010 Decoder Material/Labour
Slide 28: MY SKY Install Costs
MY SKY Install Costs $854 $857 2009 2010 Decoder Material/Labour
Slide 29: Cash Flow Analysis
Cash Flow Analysis $NZ Million 2009 2010 Capex 146 139 (4.8%) Debt reduction 2 29 1350% Dividend 60 58 (3.3%) Cash inc/(dec) (4) 11 (375%) Operating Cash Flow 204 237 16.2%
Slide 30: Prime Financials
Prime Financials $NZ Million 2009 2010 Revenue 22.0 20.8 Rights 12.7 14.6 Operations 7.6 3.1 Program Costs 20.3 17.7 Margin 1.7 3.1
Slide 31: Foreign Currency Hedging
Foreign Currency Hedging • SKY’s hedging positions at 30 June 2010 • 91% hedged for 0 ‐12 months $US exposures @ .6623 • 73% hedged for 13‐24 months $US exposures @ .6842 • 10% hedged for 25‐36 months $US exposures @ .6670 • 91% hedged for 0 ‐12 months $A exposures @ .8532 • 19% hedged for 13‐24 mon
Slide 32: MY SKY HDi
MY SKY HDi % HDi HDi % % % % Churn Subs Net Gain New Multiroom HD Ticket Upfront June 09 9.9% 84,002 84,002 21% 41% 17% 12% June 10 11.4% 170,248 86,246 19% 29% 30% 6% (note from MY SKY HDi subscribers only)
Slide 33: CEO John Fellet
CEO JOHN FELLET
Slide 34: Impact of the OSB Acquisition
Impact of the OSB Acquisition $m Revenue 3.0 Programming Cost ‐ 11.3 Depreciation 6.5 STRATEGIC ISSUES Interest 1.8 Broadcasting & 6.0 •Security Infrastructure •Transition to 3D or Super HD (0.0) •Rugby World Cup •Extra event coverage
Slide 35: Online Media Platform
Online Media Platform * Crown Fibre Holdings
Slide 36: Online Media Platform: Homepage
Online Media Platform: Homepage
Slide 37: Growth on Media Platforms
Growth on Media Platforms % of US Cord-Cutting Homes Remains Stable as Cable and Broadband Homes Grow 70 60 Cable and 50 Broadband 40 30 20 Cable-NO and Broadband- YES 10 0 Jan-08 Jan-09 Jan-10
Slide 38: Online Media Platform: Phase 1
Online Media Platform • Phase #1 – Delivery to home or office computer – Open to SKY Subscribers only – Stream 3 Sport Channels – Movies Tier Subscribers will have the ability to view 100 different movie titles which are scheduled on the SKY Movies tier. – Viewers able to catch up on 10‐20 programme
Slide 39: Online Media Platform: Phase 2
Online Media Platform • Phase #2 – Delivery to Home or Office computer – Options for PPV charges to be put on SKY bill – Open to Non‐SKY Customers
Slide 40: Online Media Platform: Phase 3
Online Media Platform • Phase #3 – Selling content electronically – Delivery to 3rd Party platforms such as XBOX, IPAD, Play Stations and Internet enabled TV’s
Slide 41: Online Media Platform: Phase 4
Online Media Platform • Phase #4 – Delivery to the MY SKY Hard drive
Slide 42: SKY Highlights
SKY Highlights 1. Purchasing of the OSB Fleet 2. New Channels ‐ The Travel Channel ‐ May 2010 ‐ TVNZ Heartland ‐ June 2010 3. SKY Sports ‐ Winter Olympics ‐ Feb 2010 ‐ Tua v Cameron PPV ‐ Oct 2009 ‐ FIFA World Cup ‐ May 2010 ‐ SANZAR renewal ‐ May 2010 ‐ Commonwealth Games ‐ Oct 2010
Slide 43: 2010 Key Messages
2010 Key Messages – Net profit of $103.0m, up 16.9% – Subscriber numbers up 3% to 802k. – Just under 200,000 MY SKY Subscribers , up 83% – ARPU up 5.6% to $67.61, MY SKY ARPU up 8.4% to $84.61 – Churn decreased from 14.0% to 13.9%
Slide 44: Dividend
DIVIDEND • The SKY Board has declared a fully imputed final dividend of 7.0 cps. • Record date is 3 September 2010. • Payment date is 10 September 2010. • Total dividend for the year is 14.0 cps
Slide 45: Sky Network Television Annual Results 2010
SKY NETWORK TELEVISION ANNUAL RESULTS 2010
Sky Network Television — FY2010 Earnings Presentation on 6ix