Kabel Deutschland berichtet 7,7% Umsatzwachstum im ersten Quartal

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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 first quarter of its fiscal year 2012/13 ended June 30, 2012.

Highlights for the first quarter ended June 30, 2012:

• Revenues increased by 7.7% to €444 million compared to €412 million in the first quarter of previous fiscal year
• Internet and Phone subscribers grew by 65 thousand quarter on quarter; year on year Internet and Phone subscribers increased by 265 thousand or 18.5%
• Premium TV(1) RGUs(2) grew by 102 thousand versus the previous quarter; year on year Premium TV RGUs increased by 465 thousand or 35.3%
• Uptake of New Services(3) lifted the RGU per subscriber ratio from 1.47 to 1.60 over the past 12 months
• Total blended ARPU per subscriber(4) for the first quarter reached €15.38 – up by €1.40 or 10.0% from the prior year’s first quarter
• Adjusted EBITDA (EBITDA)(5) grew by 8.2% to €209 million compared to €193 million in the last fiscal year’s first quarter. EBITDA margin(6) increased to 47.1%, up from 46.9% in the first quarter last year
• The Company spent €116 million on Capex(7), representing a Capex to sales ratio of 26.1%; operating free cash flow(8) (EBITDA - Capex) amounted to €94 million
• The Company posted a net profit of €66 million or €0.74 per share (versus €8 million or €0.09 in the previous fiscal year’s first quarter)
• As of June 30, 2012, net leverage(9) fell from 3.8 times to 3.4 times year on year

Operational Performance
Kabel Deutschland started its fiscal year 2012/13 with a solid operational performance in the first quarter.

The Company added 65 thousand new Internet and Phone subscribers, compared to 52 net additions in the first quarter of last fiscal year, up by 18.5% year on year. The Company has now 1.7 million Internet and Phone subscribers. 

The total blended Internet and Phone ARPU for the quarter was stable at €28.44 (previous quarter: €28.41). The decline of the variable ARPU component to €4.73 (prior quarter: €5.10) was predominantly caused by reduced interconnection revenues for incoming calls and offset by further recovery of the fixed ARPU component to €23.72 from €23.31 last quarter.

In the first quarter, Premium TV RGUs grew by 102 thousand units (versus 53 thousand units in the first quarter of the prior fiscal year). Thereof, DVRs accounted for 56 thousand, and Pay TV for 47 thousand RGUs. Furthermore, on June 30, 2012, 688 thousand smartcards were activated for the HD Private offering (not counted as RGUs).

The total blended TV ARPU per subscriber increased to €10.20 in the first quarter, up by €0.50 or 5.2% from €9.70 in the previous year’s first quarter, as a result of continuous upselling of Premium TV products into the customer base.

With 7,546 thousand subscribers, the direct subscriber base was up by 10 thousand quarter on quarter and 23 thousand year on year as of June 30, 2012. The number of total unique subscribers remained stable quarter on quarter with 8,537 thousand (March 31, 2012: 8,545 thousand).

Total RGUs grew by 229 thousand quarter on quarter (compared to 137 thousand in the first quarter last fiscal year). Overall, the Company recorded 13.7 million RGUs on June 30, 2012, up 6.6% or 843 thousand from previous year. The continuous increase of subscribers taking more than one of Kabel Deutschland’s products lifted the RGU per subscriber ratio to 1.60 from 1.47 one year ago. The higher penetration of the customer base with New Services led to an increase of the total blended ARPU per subscriber to €15.38 in the first quarter of the current fiscal year – up by €1.40 or 10.0% year on year.

Financial Results
The growth opportunity for cable in the Internet and Phone and Premium TV market continues. Revenues for the quarter increased by 7.7% to €444 million. In comparison, in the first quarter of last year, revenues grew by 5.8% year on year. TV revenues increased by 3.5% to 294 million year on year, while Internet and Phone revenues grew by 17.1% to €150 million.

EBITDA for the first quarter stood at €209 million compared to €193 million in the previous year’s first quarter (up 8.2%). EBITDA margin climbed to 47.1%, up from 46.9% in the prior year’s first quarter.

Capex was €116 million in the period under review, of which 70.6% or €82 million were success-based. 

In the first quarter of fiscal year 2012/13, the Company generated €94 million of operating free cash flow (EBITDA - Capex) which translates into an operating free cash flow margin of 21.1%.

The Company posted a net profit of €66 million, representing earnings per share(14) of €0.74 (versus €8 million net profit and an EPS of €0.09 in the same period last fiscal year).

Following the issuance of €400 million Senior Notes on the Holding level in June 2012, cash on hand was €486 million. Taking into account unused revolver capacity of €324 million, liquidity as of June 30, 2012 amounted to €810 million. Total net debt declined to €2,738 million as of June 30, 2012 (previous year: €2,803 million). The net debt to EBITDA leverage ratio decreased from 3.8 times one year ago to 3.4 times, within the Company’s leverage target range of 3.0 to 3.5 times.

Outlook for the business (stand-alone)
The Management of Kabel Deutschland reiterates the guidance for the current fiscal year 2012/13 (announced on June 14, 2012 on a stand-alone basis without considering the Tele Columbus acquisition) expecting

• Annual revenue growth between 7.5 and 8.5%,
• Adjusted EBITDA in the range of €855 and 870 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.

For fiscal year 2012/13 the Management intends to propose a dividend at the same level as for fiscal year 2011/12 (€1.50 per share). 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 May 21, 2012 Kabel Deutschland announced that it has entered into a purchase agreement to acquire Tele Columbus with approximately 1.7 million customers. The purchase price amounts to €603 million plus accrued interest of €15 million as of December 31, 2011. 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 2012/13.
• On June 18, 2012 Kabel Deutschland Holding AG successfully placed €400 million of Senior Notes due 2017 with a 6.5% coupon at par. The net proceeds contributed to KDH’s operating subsidiary KDVS as a subordinated shareholder loan and were used to replace a portion of the €600 million bridge financing for the acquisition of Tele Columbus.
• On June 25, 2012 the public broadcasters ARD and ZDF terminated the feed-in contracts effective December 31, 2012.
• On June 27, 2012 Kabel Deutschland and Media Group RTL Germany announced that they reached an agreement on the distribution of their Free to Air TV, Pay TV and Video on Demand (VoD) content. As part of the contract, the distribution of the TV channels was agreed in analog, digital SD and digital High Definition (HD).
• On July 23, 2012 Kabel Deutschland successfully placed an additional nominal €200 million of its existing Senior Secured Notes due 2018 initially issued in June 2011 and carrying a coupon of 6.5%. The €200 million tap was placed at 106.75%. The proceeds replaced the remaining €200 million bridge financing for the acquisition of Tele Columbus which was then terminated accordingly.
• On August 1, 2012 Kabel Deutschland obtained the binding decision by the arbitral tribunal on the 2008 Tele Columbus acquisition purchase price litigation, stipulating Tele Columbus to pay back €44 million plus interest. However, stand-still is agreed in the SPA and therefore no payment is expected.
• On August 3, 2012 Kabel Deutschland acquired the operations of one of its regional suppliers of technical maintenance and installation services in Bavaria for an aggregate investment of approximately €3 million. The transaction was closed immediately.

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 first quarter of fiscal year 2012/13 ended June 30, 2012 is available for download here.

Kabel Deutschland will host its 8th Capital Markets Day on September 24, 2012 in Munich. Participants can register to the event by contacting the IR team of the Company.

The AGM will take place on October 11, 2012 in Munich. Further information will be posted on the Company’s website shortly.

The financials for Kabel Deutschland Holding AG’s second quarter and six months of the fiscal year ending on March 31, 2013 will be released on November 13, 2012.

Please see the PDF below for the full IR Release.