This past few days the investor relations team from Sky Deutschland has been on a roadshow to the investment community, and this has prompted Berneberg Bank to issue an update to its clients.

Analyst Sarah Simon says the broadcaster’s roadshow left her “more confident” in both the near- and long-term growth potential of the broadcaster. “Management has spent the last few years rebuilding the service to enhance its appeal, and this is only now starting to show in numbers. Moreover, there are a number of product enhancements and refinements to come in 2014, which should strengthen further the customer proposition, and help Sky-D to monetise the existing customer base.”

She says that Sky-D’s management is “very confident” in its 400,000-450,000 customer net addition guidance for 2014, “and believes there is potential for growth to be even higher”.

“The drivers of this acceleration include underlying growth in demand and increased recommendation levels from existing customers, the transfer of LIGA total! customers to Sky packages, and an “almost guaranteed” reduction in churn. Management noted that 2015 will also be a strong year, with further churn reduction helping to offset the one-time LIGA total! migration.”

Berenberg’s report acknowledges that Sky-D’s management recognises that subscriber growth doesn’t come easily. But there is an upside, the bank suggests: “With household penetration of less than 10 per cent, this is far from being a mass-market product that sells itself through recommendation, since the product is still very much in the minority. As the number of customers rises, however, this will change, we think, and even assuming the level of recommendation does not change, the number of gross additions will continue to increase year on year.”

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