Discovery reports “exceptional year”
February 24, 2022
Discovery has reported financial results for the quarter and year ended December 31st 2021.
David Zaslav, President and Chief Executive Officer of Discovery, said: “2021 was by all measures an exceptional year for our company, in which we achieved significant operational, financial, and strategic objectives. We grew our global DTC paying subscribers to 22 million, a tailwind for our strong distribution revenue growth of 11 per cent, while global advertising revenues grew 10 per cent due to continued strength in our key markets and share gains. Additionally, we ended the year with nearly $4 billion (€3.58bn) of cash on hand and generated robust cash flows, supporting our ability to invest in growth initiatives.”
“Further, the successful recent broadcast of our second Winter Olympic Games across Europe, on the heels of our first broadcast of the Summer Olympic Games, underscores one of our key differentiators: in-language and locally relevant content. All of which position us well to take advantage of the remarkable opportunities ahead for Warner Bros Discovery, which we believe will be among the world’s most dynamic media companies,” he added.
“We, of course, are pleased to receive unconditional clearance from the European Commission, the expiration of the HSR waiting period, and clearance from other key international markets, and AT&T having received a favorable private letter ruling from the IRS. We also filed our merger proxy earlier this month and have scheduled our stockholder meeting for March 11th. Following the vote, and assuming the deal is approved by our stockholders, we expect to be on track to close in Q2,” concluded Zaslav.
Financial Highlights
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Q4 total revenues of $3,187 million increased 10 per cent, or increased 11 per cent ex-FX, compared to the prior year quarter.
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Q4 US advertising revenues increased 5 per cent and distribution revenues increased 17 per cent; and
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Q4 International advertising revenues increased 10 per cent, or 12 per cent ex-FX, and distribution revenues increased 2 per cent, or 5 per cent ex-FX.
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Net income available to Discovery was $38 million and $1,006 million in Q4 and the full year 2021, respectively.
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Total Adjusted OIBDA was $1,137 million and $3,817 million in Q4 and the full year 2021, respectively.
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Q4 cash provided by operating activities was $884 million and free cash flow was $784 million.
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Full year cash provided by operating activities was $2,798 million and free cash flow was $2,425 million, representing a 64 per cent Adjusted OIBDA to free cash flow conversion rate.
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Ended 2021 with $3.9 billion of cash and cash equivalents, gross debt of $15.4 billion, and net leverage of 3.0x.
Operational Highlights
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Ended 2021 with 22 million DTC Subscribers, an increase of 2 million subscribers since the end of Q3.
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Generated $450 million of Next Generation Revenues in Q4, and roughly $1.6 billion of Next Generation Revenues in 2021, growth of 80 per cent versus the prior year.
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Successfully transitioned the entirety of our discovery+ subscriber base across Europe onto the same technology platform as the US, which will deliver a more personalised content and viewing experience, and we expect will drive better consumer engagement and lower churn, as well as enabling an ad-lite advertising offering in key markets, beginning in March in the UK.
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Broadcast the Olympic Winter Games from Beijing and produced strong results across Discovery’s European television network and streaming products. discovery+ drove an increased number of new paid streaming subscribers, the total of which exceeded PyeongChang 2018 by almost 50 per cent. Additionally, well over half of all new Olympics subscribers engaged with discovery+’s entertainment content, reinforcing the increased depth and value of our offering.