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Ziggo: Ziggo Q1 2014 Results

Solid start of 2014 with continued growth in internet and business bundles
Higher investments in customer services, innovation and marketing affect Q1

· Continued growth in broadband internet and mobile telephony
· Customer churn continues to decline
· Strong growth in 2p offsets lower growth in 3p
· Ziggo Mobile records 30,000 new subscriptions in Q1 to reach a total of
· Successful B2B sales campaigns with almost 3,800 bundle net adds and double
digit organic revenue growth
· Outlook for 2014 unchanged

Operational highlights Q1 2014
· Total internet subscribers up 38,000 in Q1 to a total of 1.95 million,
representing 2.0% sequential growth and 7.5% y-o-y growth
· All-in-1 bundle subscribers up 20,000 (incl. 3,800 triple play business
bundles)[1]in Q1 to a total of 1.56 million, resulting in 1.3% sequential
growth and 7.0% y-o-y growth

· All-in-1 penetration reaches 57.1% of our consumer customer base
· Telephony usage revenue down 7.9% y-o-y and down 7.0% excluding FTA rate
· Digital pay TV revenue down 4.3% y-o-y due to a 16,000 decline in
subscribers, partly offset by an ARPU increase and an uptake in VOD
· Consumer ARPU for the quarter up 3.6% y-o-y to €43.07
· Price increase for consumer products and changes to the fixed telephony
offering effective as of April 1

Financial highlights Q1 2014
· Revenue up 1.7% y-o-y to €394.2 million; up 0.8% y-o-y excl. Esprit and
'other revenue'
· Adjusted EBITDA €213.1 million, down 4.3% y-o-y; down 4.7% y-o-y excl.
· Opex increase of €15.8m y-o-y and €13.4m or 14.1% excl. Esprit due to higher
investment in marketing&sales and higher cost for customer service
· Net result reduced to -€38.4 million from €92.7 million in Q1 last year due
to one-off costs of approximately €93 million net of taxes related to the
refinancing, intended acquisition and fair value losses on our hedges
· Net debt amounts to €3.1 billion, stable compared to year-end 2013
· Leverage ratio of 3.6x, slightly up compared to 3.5x at year-end 2013

CEO René Obermann:
"Clearly, the recommended offer on Ziggo from Liberty Global, which was
announced on January 27, was the most important event for the company during
the first quarter. We believe that the combination of the two Dutch cable
companies offers a great opportunity for all stakeholders as it allows us to
jointly invest and provide even better services to our customers.

When we focus on the operational developments in the quarter, we see a
continuation of the operational trends from the second half of 2013:
continued RGU growth for both consumer and B2B, particularly in broadband
internet. Similar to the last two quarters, growth in internet RGUs has
exceeded growth in triple play subscriptions following the success of our
double play TV and internet offering which particularly addresses the
'mobile-only' telephony households. The success of our internet is strongly
supported by WifiSpots as well as on-going speed increases of up to 180Mbit/s
as recently announced. We expect our announced speed increase to make us even
more competitive in broadband and support further growth in this area. For
Ziggo mobile we recorded 30,000 net adds in the first quarter, in line with
the previous quarter.

In the B2B segment, we see continuing positive trends. We are pleased to
announce another quarter of double digit organic revenue growth on the back
of our on-going success with the sales of business bundles.

Finally, as expected, telephony usage revenue has resumed its declining trend
in Q1 2014. With the change of our fixed line telephony offering as from
April 2014, we have taken a number of measures which we expect will mitigate
this trend going forward.

The decline in EBITDA in the first quarter came primarily from external
personnel hired which are needed to drive our ambitious innovation agenda
forward, including migrating some of our legacy IT-systems, and the
investment in customers services and sales and promotions.

Until if and when the merger closes, which is expected to happen in Q3/4, we
will run the company completely independent. Our management team is committed
to delivering the targeted financial results, whilst aiming to outperform our
Dutch peers on revenue growth at the same time."

Based on our strong network and appealing product offerings, we will continue
to focus on our top-line in 2014. This will predominantly be facilitated by
on-going growth in broadband internet, Ziggo Mobile and our B2B activities.

As we anticipate no easing of the current competitiveness in the market, we
will continue investments in sales and promotions, customer retention and
product development to strengthen our position and improve our services. We
expect these additional investments, which will be skewed towards the first
half of the year, to result in a flat EBITDA for 2014 compared to last year.
Following increased network investments to stay ahead of ever-increasing
customer demand for bandwidth, the investments in set top boxes to support
customer experience and the continuation of investments to upgrade our IT
systems to enable converged services, Capex will increase to around €370
million in 2014.

Recommended offer by Liberty Global
On January 27, Ziggo and Liberty Global jointly announced that a conditional
agreement had been reached on a recommended offer (the "Offer") pursuant to
which Liberty Global would acquire Ziggo in a stock and cash transaction.
Under the terms of the Offer and taking into account the Liberty Global stock
dividend, Ziggo shareholders will receive €11.00 in cash, 0.2282 Liberty
Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary
shares for each Ziggo share.

Discussion with the AFM on the valuation and presentation of the customer
Following our discussions with the AFM as a result of questions raised by the
AFM concerning how the company came to the conclusion that the useful life of
the customer relationships is indefinite, we plan to separate the asset in a
customer list with a definite life and the license to provide our
cable-related services in our footprint for an infinite period. Based on our
analysis, we came to the conclusion that the value of the customer list is
fully amortized assuming an amortization period for the customer list of five
years and that the remaining value represents the license to operate in our
footprint for an infinite period. Based on this analysis and to be more in
line with peers we intend to reclassify the remaining balance of
approximately €1.5 billion from customer relationship to goodwill in the 2014
accounts. This reclassification will also lower the deferred tax liability
and goodwill by an amount of the deferred tax liability relating to the value
allocated to the license. This reclassification does not have any impact on
net result nor shareholders' equity. Our discussion with the AFM is still

Statement on proposal for final dividend for financial year 2013
In view of the recommended offer for Ziggo, management proposes that the total
dividend for the financial year 2013 will be equal to the interim dividend
distributed in September 2013. Consequently, there will be no final dividend
distribution following the shareholder meeting on April 17, 2014.

Important dates
This year, Ziggo expects to publish its quarterly results on the following

Q2 2014 July 17, 2014
Q3 2014 October 16, 2014

The Annual General Meeting of Shareholders over the financial year 2013 will
be held on April 17, 2014.
---------------------------------------[1]All-in-1 bundle customers includes the triple play business bundles (office
basis and office plus) as from Q4 2013. Historic numbers have been restated
accordingly to facilitate comparison.

|About Ziggo |
| |
| |
|Ziggo is a Dutch provider of entertainment, information and communication |
|through television, internet and telephony services. The company serves |
|around 2.8 million households, with 1.9 million internet subscribers, almost |
|2.3 million subscribers to digital television and 1.6 million telephony |
|subscribers. Business-to-business subscribers use services such as data |
|communication, telephony, television and internet. The company owns a |
|next-generation network capable of providing the bandwidth required for all |
|future services currently foreseen. More information on Ziggo can be found on |
|www.ziggo.com. |

| |
| |
|Not for publication Analysts and Investors |
| |
| |
| Wouter van de Putte |
|For more information please contact: Director Treasury and Investor Relations |
|Press +31 (0)88 717 1799 | investorrelations@office.ziggo.nl |
| |
| Caspar Bos |
|Martijn Jonker Investor Relations Manager |
|Corporate Communications Director +31 (0)88 717 4619 | investorrelations@office.ziggo.nl |
|+31 (0)88 717 2419 | Martijn.Jonker@office.ziggo.nl |
| |

Ziggo Q1 2014 Results


This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporat...

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