Kabel Deutschland berichtet 6,3% Umsatzwachstum und 795 Millionen EBITDA für das Geschäftsjahr 2011/2012

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Kabel Deutschland Holding AG (‘Kabel Deutschland’, ‘KDH’ or ‘the Company’), Germany’s largest cable network operator, today released its consolidated financials for the fourth quarter and fiscal year 2011/2012 ended March 31, 2012 and its guidance for the fiscal year 2012/2013 ending March 31, 2013.

Highlights for the fiscal year ended March 31, 2012:

• Revenues increased by 6.3% to €1,699.7 million compared to €1,598.9 million in the previous fiscal year, within revenue guidance at the lower end of 6.25 to 6.75% growth
• Adjusted EBITDA (EBITDA)(1) grew by 9.1% to €795.5 million compared to €729.1 million in the last fiscal year, in the middle of the EBITDA guidance of €790.0 to 800.0 million. EBITDA margin(2) expanded by 1.2 bps to 46.8%, up from 45.6%
• The Company added 251.6 thousand Internet and Phone subscribers
• Premium TV(3) RGUs(4) grew by 32.8% or 415.2 thousand units year on year, of which 245.0 thousand were DVR RGUs
• Total blended monthly ARPU per subscriber(5) for the fiscal year reached €14.44 – up by €1.04 or 7.8% from the prior year
• The Company spent €391.2 million of Capex(6) (guidance range was €380.0 to 390.0 million), compared to €337.0 million in the previous year, representing 23.0% of revenues. The increase was largely driven by the market success of broadband products and DVRs
• Operating free cash flow(7) (EBITDA - Capex) amounted to €404.3 million (previous year: €392.1 million)
• The Company posted a net profit of €159.4 million or €1.78 per share (versus a net loss of €45.3 million in the previous fiscal year)
• As of March 31, 2012 the Total Net Debt(8) to EBITDA ratio has fallen to 3.4 times
  Kabel Deutschland’s Management and Supervisory Board propose a dividend payment of €1.50 per share for the fiscal year 2011/2012 to the Annual General Meeting on October 11, 2012

Highlights for the fourth quarter ended March 31, 2012:

• Revenues increased by 8.5% to €442.4 million from €407.8 million in the fourth quarter of the prior fiscal year
• Adjusted EBITDA grew by 8.9% to €205.6 million compared to €188.7 million in the prior year
• Total blended monthly ARPU per subscriber reached €15.05 – up by €1.27 or 9.2% from the prior year’s fourth quarter
• Capital expenditures (Capex) were €108.6 million (versus €111.0 million in the same period of the prior year)
• The Company added 71.1 thousand Internet and Phone subscribers, up 4.6% from December 31, 2011
• Premium TV RGUs up by 8.5% or 131.1 thousand units quarter on quarter, thereof 73.8 thousand DVR units

Operational Performance
With an annual revenue increase in the fourth quarter of 8.5%, Kabel Deutschland has shown an accelerating topline growth in the past quarters. The acceleration is fuelled by the continuously strong demand for the Company’s New Services as reflected by the subscriber and RGU inflow in the fourth quarter of fiscal year 2011/2012.

In the fourth quarter, Kabel Deutschland added 71.1 thousand new Internet and Phone subscribers, resulting in a total of 251.6 thousand net additions for the fiscal year 2011/2012. While the number of annual net adds remained at the same level than in previous years, this reflects a growing underlying gross add performance. To further enhance its Internet and Phone product portfolio, the Company, for instance, launched a rental model for higher-value devices (Wifi-Modem, Homebox), replaced its 6 Mbit/s with 8/16 Mbit/s products and introduced a mobile all-net-flat including handset in November 2011. In addition, KDH extended the market reach of its DOCSIS 3.0 superfast Internet products to 76.9% of its upgraded footprint (from 47% the year before).

In the fourth quarter, the total blended Internet and Phone ARPU grew by €0.36 to €28.41. This increase has been driven by the fixed ARPU component which recovered by €0.55 to €23.31 (from €22.76 in the third quarter). At the same time, variable ARPU component declined by €0.19 on a quarterly basis due to changed customers’ calling behaviour as expected.

With regard to Premium TV, Kabel Deutschland saw its most successful year ever. In the fourth quarter the demand for these products remained unabatedly high with a quarterly RGU increase of 8.5% or 131.1 thousand units. Thereof, DVRs accounted for 73.8 thousand units (previous quarter: 72.8 thousand), representing the fifth quarter in a row with increasing DVR net add growth. In total, the Company added the record number of 415.2 thousand Premium TV RGUs throughout the fiscal year. The sustainable upselling of Premium TV services into the customer base led to an increase of the total blended monthly TV ARPU per subscriber to €10.09 in the fourth quarter, up from €9.86 in the previous quarter.

The strong pull for Kabel Deutschland’s HD Private offering, launched on October 5, 2011, resulted in 501.5 thousand activated smartcards on March 31, 2012, driving digital usage in the Company’s customer base.

The Company’s direct subscriber base was up 35.1 thousand quarter on quarter at 7,536.0 thousand as of March 31, 2012 (7,540.0 thousand as of March 31, 2011). Total unique subscribers decreased by 106.3 thousand to 8,545.2 thousand quarter on quarter, predominantly resulting from further disconnects by Level 4 operators.

In total, the Company recorded 13.4 million RGUs on March 31, 2012, up 5.9% or 750.4 thousand from previous year. The continuous demand for the Company’s New Services lifted the RGU per subscriber ratio to 1.57 from 1.45 one year ago. The increasing penetration of the customer base with New Services is reflected by the steady increase of the total blended monthly ARPU per subscriber which reached €15.05 in the fourth quarter – up by €1.27 or 9.2% year on year.

Financial Results
In the fiscal year 2011/2012, revenues increased by 6.3% to €1,699.7 million compared to €1,598.9 million in the previous fiscal year. TV revenues increased by 2.2% to 1,158.4 million year on year; Internet and Phone revenues grew by 16.2% to €541.4 million.

EBITDA grew to €795.5 million compared to €729.0 million in the previous fiscal year (up 9.1%). EBITDA margin climbed to 46.8%, up from 45.6% in the prior year. The strong pull from customers for HD Private and the DVR resulted in higher call volume in customer service centers and thus, higher selling expenses in the second half of the fiscal year just ended.

Capex was €391.2 million in the period under review. Success-based Capex accounted for €274.8 million or 70% of total Capex. 

In the fiscal year 2011/2012, operating free cash flow (EBITDA - Capex) amounted to €404.3 million which translates into an operating free cash flow margin of 23.8% (24.5% in 2010/2011).

The Company posted a net profit of €159.4 million, representing earnings per share(14) of €1.78 (versus €45.3 million net loss in the same period last fiscal year).
Cash on hand of €133.8 million coupled with unused revolver capacity of €324.0 million provided €457.8 million of liquidity as of March 31, 2012. Total net debt declined to €2,690.0 million as of March 31, 2012 (previous year: €2,747.1 million). The Net Debt to EBITDA leverage ratio decreased from 3.8 times one year ago to 3.4 times, reaching the Company’s leverage target range of 3.0 to 3.5 times.

Outlook for the business (stand-alone)
The continued market opportunity in Premium TV as well as in Internet and Phone is evidenced by the revenue growth momentum of recent quarters. Hence, Kabel Deutschland expects for this fiscal year higher organic revenue growth resulting in a new ‘steady state’ revenue trajectory with higher absolute growth levels also for the following years. On the back of this, the Management announces the guidance for fiscal year 2012/2013 (on a stand-alone basis without considering Tele Columbus) as follows:

• Annual revenue growth between 7.5 and 8.5%,
• Adjusted EBITDA in the range of €855.0 and 870.0 million,
• Capex to sales ratio of approximately 25%, and
• Leverage within the target range of 3.0 to 3.5 times Net Debt to EBITDA by March 2013.

Together, success-based and non success-based Capex, should amount to approximately 23% of sales which represents the same ratio as in fiscal year 2011/2012. In addition, KDH has started to systematically deploy ‘Efficiency Capex’ to replace leased fiber with own fiber, improving scalability and margins of the business. Going forward, however, the overall Capex to sales ratio is anticipated to trend back towards 20% as revenues continue to grow.

Shareholder remuneration for fiscal years 2011/2012 and 2012/2013
For fiscal year 2011/2012, Kabel Deutschland’s Management and Supervisory Board propose a dividend payment of €1.50 per share for the fiscal year 2011/2012 to the Annual General Meeting on October 11, 2012. For fiscal year 2012/2013, Management intends to propose a dividend at the same level as for fiscal year 2011/2012. In light of the Tele Columbus acquisition, however, this is subject to having clear visibility on being in or close to the target leverage range after dividend payment in autumn 2013.

Recent developments

• On March 13, 2012 KDH retired 1,477,061 shares bought back between September and December 2011. Total number of shares outstanding now amounts to 88,522,939; share capital has been reduced to €88,522,939 accordingly.
• In April 2012, KDH’ 100% subsidiary KDVS filed a lawsuit against Deutsche Telekom GmbH to obtain a price reduction for the co-use of cable ducts. The lawsuit is based on the alleged abusive excessive pricing. KDVS expects the proceedings and the legal decision to take several years until effective.
• On May 21, 2012 Kabel Deutschland announced that it has entered into a purchase agreement with Tele Columbus GmbH to acquire the Tele Columbus Group with approximately 1.7 million customers. The purchase price amounts to €603 million plus accrued interest. The acquisition is subject to the approval of the German Federal Cartel Office. Closing is expected in the fourth quarter of the current fiscal year 2012/2013.

Additional information
The Company will host a conference call this afternoon at 4.00 pm CET for capital market participants.

The full financial report for the fiscal year 2011/2012 ending March 31, 2012 is available for download here.

The financials for Kabel Deutschland Holding AG’s first quarter of the fiscal year ending on March 31, 2013 will be released on August 14, 2012.

Please see the PDF below for the full IR Release.