Sky: “Exceptional year”
July 26, 2018
Sky Group Chief Executive Jeremy Darroch has declared the multiplay broadcaster’s Full Year to June 30th 2018 as “exceptional”, with financial and operating results showing a 5 per cent increase in like-for-like revenue to £13.6 billion (€15.3bn), an 11 per cent increase in Established Business EBITDA to £2.5 billion; 9 per cent increase in EBITDA, with an operating profit of £1.034 billion, up 7 per cent, and EPS of 47.5 pence, up 17 per cent.
“It’s been an exceptional year,” said Darroch. “We’ve delivered another set of strong results with like-for-like revenues up 5 per cent, Established Business EBITDA up 11 per cent and EPS up 10 per cent. Over half a million new customers joined Sky this year and we now have 63 million products in customer’s homes as they continue to choose Sky over other providers. As a consequence, we have extended our leadership position as Europe’s largest direct-to-consumer media and entertainment business.”
“Our strong performance reflects the execution of our strategy over an extended period of time, driving sustained growth in revenue, profits and shareholder returns. We do this by providing our customers more of the best content, world class innovation in products and services, combined with industry leading front-line service. Together with an increasingly agile and efficient organisation, we are able to deliver for shareholders whilst ensuring the customer experience is better than anywhere else.”
“Importantly, this strategy is now widely implemented across the Group. In the UK and Ireland, our largest market, we’ve delivered an excellent operational and financial performance whilst scaling our new initiatives. In Germany and Austria, we have comprehensively upgraded all our services as part of our plans for sustained long-term growth in what is Europe’s largest TV market. In Italy, we’ve had a ground-breaking year, opening up significant new growth opportunities for our business by offering new services over DTT and fibre, allowing us to reach new segments of the market.”
“Alongside this, we’ve put in place further building blocks for future growth. We’ve secured more exclusive coverage of major sports events for our customers and our investment in Sky original productions is being widely recognised by customers and critics alike. We’ve rolled out Sky Q to all our major territories meaning a growing number of customers can enjoy the benefits of Europe’s best home entertainment service, and our agreements with Netflix, Mediaset, BT and Spotify will further enhance and extend our customer offer.”
“We therefore enter the year ahead with good momentum. We have an excellent set of plans and we’re focused on executing them well. We are proud that Sky is recognised globally as an outstanding business and are confident we have the right assets and capabilities to continue creating long term growth opportunities and to capitalise on the strong position we’ve built.”
In revealing plans for 2018/19, Sky said that over the course of the next 12 months it will grow its original output which is increasingly focused on high quality local stories for local markets as a key differentiator to acquired content. Gross investment on original drama will increase by around 25 per cent and will be further monetised through its international sales arm, Sky Vision, which has hit its £200 million revenue target two years early, and the broadcaster will invest around four times more in Germany and Austria versus a year ago, where its original content strategy is least developed.
We will continue to transform the customer experience by delivering sustained world class innovation in our products and services. We want to make the Sky experience better for all customers and make it easier for them to enjoy the Sky experience on their terms.
It described Sky Q as Europe’s best home entertainment service and confirmed it will scale Sky Q’s growth and continually enhance the service with a strong pipeline of innovation ahead over the next 12 months:
- Developing a hands-free TV experience with its next-generation of voice control.
- Improve personalisation with addition of individual profiles, enhancing the platform’s data-driven recommendations.
- Introduce a kids mode, giving parents peace of mind over what their children can watch.
- Double the amount of Ultra-HD (UHD) content available, with HDR launching in 2019.
- Roll out Sky Soundbox to Germany and Italy, transforming the TV sound experience for customers in those markets.
- Launch Sky Q without the need for a satellite dish in Austria and Italy, opening up new growth opportunities with customers who cannot have a satellite dish.
Sky said it would further extend its position as Europe’s largest direct-to-consumer media and entertainment business by deploying Sky’s leading brand and platform more widely, having successfully launched new TV propositions into Spain and Switzerland. In the year ahead, it will continue to scale its presence in each of these markets:
- Firmly establish Sky Mobile as the customer choice for freedom and flexibility at the same time as growing its sales and distribution capability across all its routes to market.
- Execute our new deal with Telefonica, enabling it to deliver excellent value to customers at the same time as accessing new technologies such as 5G.
- Broaden our distribution in Spain, building on our new strategic partnership with Mas Movil that provides their customers with access to Sky.
- Extend our position in Switzerland by adding a broader range of sports to the Sports app, launching Sky Cinema on the Sky Show app, plus developing our relationships with the leading telco operators.
Paolo Pescatore, an independent Technology, Media & Telco Analyst suggested Sky’s results were “stellar” and “a great way to end its fiscal year”, suggesting that the company would be a prized asset for both Comcast and Disney (via 21st Century Fox), currently engaged in a bidding war. “Whoever comes out on top will ensure that Sky has the resources to be an even more formidable player in the rapidly-changing media landscape,” he added.
“The deals forged over the past few months, inclading a cross-channel sharing agreement with BT, Netflix and other leading online services indicate that Sky is positioning itself as an aggregator of content and services. Sky is the undisputed leader in bundling services in the UK and we now expect it to take the same approach in other markets. Content remains at the heart of the company.”