Advanced Television

KDH continued growth

February 22, 2011

Kabel Deutschland Holding AG (KDH), Germany’s biggest cable operator, has sustained its dynamic growth over the first nine months of its financial year 2010/2011 (April 1st through December 31st, 2010). “We are implementing our strategy on schedule and achieving our objectives. The trend towards Premium TV services is gaining momentum, and demand for high performance Internet and Phone products remains strong. Our attractive offerings enable us to reap the benefits of these developments,” notes Adrian v. Hammerstein.

The MDAX listed company again posted a meaningful increase in revenues and earnings in the first nine months of its fiscal year 2010/2011. Revenues were up 6.9 per cent to €1,191 million (previous year €1,114 million), and adjusted EBITDA rose 11.1 per cent to €540.4 million (previous year €486.3 million). The EBITDA margin improved to 45.4 per cent compared to 43.6 per cent in the previous year’s same period. The pre tax result for the first nine months of the fiscal year 2010/2011 amounted to a loss of €46.7 million (previous year minus €5.2 million). This figure included €47 million in non-recurring expenses in connection with the Company’s refinancing of its corporate bonds. The net loss for the period under review increased accordingly to €43.9 million (previous year minus €22.3 million). Adjusted for these non-recurring refinancing costs, the net result would have been positive for the first nine months of the fiscal year 2010/2011, marking a significant improvement over the previous year’s result.

Kabel Deutschland invested €226 million in the first nine months of its fiscal year 2010/2011 (previous year €233.2 million). Operating free cash flow (defined as EBITDA minus capex) increased significantly to €314.4 million (previous year €253.1 million). The operating free cash flow margin was 26.4 per cent (previous year 22.7 per cent).

The total number of Kabel Deutschland’s RGUs increased by 567 thousand to 12.495 million as of December 31, 2010 (previous year 11.927 million). Continued strong demand for new Premium TV, Internet and Phone services drove this growth. These services accounted for 3.565 million RGUs, which constitute a 28.5 per cent share of total RGUs (previous year 2.883 million RGUs, a share of 24.2 per cent). The Company served 8.792 million connected households on December 31, 2010.

The Internet and Phone offering contributed again considerably to Kabel Deutschland’s success. The number of Internet and Phone RGUs rose sharply to 2.343 million (previous year 1.844 million), whereby these subscriptions were taken out by 1.273 million customers. Accordingly, Kabel Deutschland has enjoyed 176 thousand Internet and Phone net adds in the first nine months of its current fiscal year. Most of the customers continue to opt for combined Internet and Phone services.

With the introduction of the new HD video recorder in September 2010 and six more HD channels in November 2010 helping to drive growth, the number of Premium TV RGUs increased by 183 thousand units over the previous year. Kabel Deutschland tallied 1.222 million Premium TV RGUs (previous year 1.039 million RGUs, plus 17.6 per cent) on December 31, 2010.

The Company increased the monthly ARPU to €13.32 in the third quarter of the fiscal year (previous year’s same period €12.30). On December 31, 2010, one Kabel Deutschland customer subscribed to 1.42 products on average, up from 1.33 products in the previous year.

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