4Q11 RESULTS PRESENTATION

Transcription

1 4Q11 RESULTS PRESENTATION 1 MARCH

2 DISCLAIMER This presentation contains forward looking information, including statements which constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of These statements are based on the current beliefs and assumptions of our management and on information available to management only as of the date such statements were made. Forward-looking statements include (a) information concerning strategy, possible or assumed future results of our operations, earnings, industry conditions, demand and pricing for our products and other aspects of our business, possible or future payment of dividends and share buy back program; and (b) statements that are preceded by, followed by or include the words believes, expects, anticipates, intends, is confident, plans, estimates, may, might, could, would, and the negatives of such terms or similar expressions. These statements are not guarantees of future performance and are subject to factors, risks and uncertainties that could cause the assumptions and beliefs upon which the forwarding looking statements were based to substantially differ from the expectation predicted herein. These factors, risks and uncertainties include, but are not limited to, changes in demand for the company s services, technological changes, the effects of competition, telecommunications sector conditions, changes in regulation and economic conditions. Further, certain forward looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from the plans, strategy, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements. Additionally, some of these statements refer to board proposals to be submitted to ZON - Multimédia Serviços de Telecomunicações e Multimédia, SGPS, S.A. ( Multimedia or ZON ) AGM and subject to (i) its approval by Multimedia s shareholders, (ii) the market conditions and (iii) the ZON s financial and accounting position as revealed in the financial statements approved by Multimedia s AGM. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to provide reasons why actual results may differ. You are cautioned not to place undue reliance on any forward-looking statements. ZON Multimedia is exempt from filing periodic reports with the United States Securities and Exchange Commission ( SEC ) pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, as amended. The SEC file number for PT Multimedia s exemption is No Under this exemption, ZON Multimedia is required to post on its website English language translations, versions or summaries of certain information that it has made or is required to make public in Portugal, has filed or is required to file with the regulated market Eurolist by Euronext Lisbon or has distributed or is required to distribute to its security holders. This presentation is not an offer to sell or a solicitation of an offer to buy any securities. 2

3 % 130% 110% 90% 70% 50% 30% Leading in Triple Play with 60% penetration Growth in 3P customers / Penetration [Thousands, %] ZON cable customer profile 4Q11 [%] % 60.1% Single Play 24.2% 41.0% Double Play 15.7% Triple Play 60.1% 4Q09 4Q10 4Q11 3

4 4Q Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 90% 80% 70% 60% 50% 40% 30% 20% 10% 00% Resilience in ARPU supported by growth in core basic Triple Play revenues Blended ARPU, Triple Play Penetration [Euros, %] ARPU Evolution [4Q10 = Base 1] % Blended ARPU 3Play Penetration % Q10 1Q11 2Q11 3Q11 4Q11 Blended ARPU Basic ARPU Premium ARPU +4.4% +1.2% -13.2% Basic ARPU growth of 4.4% 4

5 Maintaining leadership in Pay TV Growth in Cable platform Pay TV Net Adds [Thousands] Relative size of Pay TV customer base 4Q11 [Thousands] , , Q10 1Q11 2Q11 3Q11 4Q Others Source: ZON, ANACOM, Company Reports 5

6 Maintaining leadership in Pay TV Leadership in Triple Play Pay TV Market Share Evolution [%] Triple Play Market Share 4Q11 [%] 2,976 2,775 2, % 2, % 10.2% 12.4% 13.7% 23.0% 29.9% 35.0% 72.3% 64.4% 57.9% 53.9% Others 54% ZON 46% ZON PT Cabovisão Others Source: ZON, ANACOM 6

7 Digital services still growing well ZON HD Boxes Installed [Thousands] +11.5% Q10 1Q11 2Q11 3Q11 4Q11 88% of ZON customers receive digital services, and the almost 987 thousand HD set top boxes installed (around 10% of which are IRIS-enabled) are driving the use of higher value services, such as VOD Recovery of average number of Premium subscribers vs. Previous quarter 7

8 Latest Launches: ZON Online & ZON Phone App ZON Online is a free service which allows IRIS customers access to ZON BOX features and functionalities on their laptop and ipad The ZON Phone APP enables customers to take their unlimited Fixed Voice tariff plans with them on their smartphone or tablet 8

9 Continuing quarterly sequential growth in BB reinforcing position as leading NGN operator Broadband customer mix Broadband Market and Market ZON@FON Hotspots and Usage [%] Shares [%] [Thousands, Millions of Minutes] ZON Fibra 29% 739k subs 2 Mbps 3% 6-15 Mbps 47% , % 12.3% 42.1% 1, % 9.1% 44.5% 2, % 6.6% 46.9% 2, % 5.4% 49.4% 2,500 2,000 1,500 1, Mbps 22% % 31.9% 32.5% 33.0% ZON PT Sonaecom Others 00 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Active Hotspots Usage: Minutes Broadband net adds of 14.2 thousand in 4Q11. Adjusting for network coverage ZON is either #1 or close to #1 in almost all its coverage areas Leadership in WiFi in Portugal Source: ZON, ANACOM 9

10 % 75% 70% 65% 60% 55% 50% 45% 40% Continued Fixed Voice subscriber growth Fixed Voice Subs and Penetration [Thousands, %] Fixed Voice Market and Market Shares [Thousands, %] Mobile Subscribers [Thousands] +13.7% +15.8% % % , % 18.0% 3, % 16.0% 3,664 3, % 11.5% 14.5% 14.0% % 55.5% 52.6% 51.6% % 16.8% 21.2% 22.8% M11 4Q10 4Q11 ZON PT Sonaecom Others 4Q10 4Q11 ZON is the only relevant operator growing in the Fixed Voice market, recording net adds of 40 thousand in 4Q11, the best quarter of the year Source: ZON, ANACOM 10

11 A good quarter in Cinemas, outperforming the market once more Cinema Tickets Sold and Average Revenue Per Ticket [Thousands, Euros] Gross Revenue & Attendance Performance 2011 [%] Share of cinema distribution revenues 2011 [%] 2,242 2,016 2, ,372 2, % -2.9% -3.9% -5.2% Castello Lopes 9.2% Others 10.7% ZON 52.0% 4Q10 1Q11 2Q11 3Q11 4Q11 Gross Revenue Attendance Columbia 28.1% Tickets Sold Avg. Revenue Per Ticket ZON Market 4Q11 an improvement YoY, with 2.26 million tickets sold Average revenue per ticket of 4.8 euros, +1.7% yoy Performance in Gross Revenues and Attendance well above the total market in 2011, according to data from the Institute For Cinema and Audiovisuals ZON Lusomundo distributed 5 of the top 10 movies in 2011, with its share of revenues reaching 52% Source: ZON, ICA [Portuguese Institute For Cinema and Audiovisuals] 11

12 ZAP posting good results in Angola ZAP Subscribers Number of ZAP stores Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 Increasing the pace of customer acquisition ARPU > 30 USD On track to reach operational break-even in 2012 Strong growth of commercial network: 10 ZAP stores in Angola and 3 in Mozambique 430 agent stores in Angola and 60 in Mozambique Door-to-door sales force with 200 people in Angola 12

13 Financial Review 13

14 Slight decline of Total Operating Revenues Consolidated Operating Revenues 4Q11 / 4Q10 [Millions of Euros] Consolidated Operating Revenues 2011 / 2010 [Millions of Euros] (2.5)% (2.0)% Q10 1Q11 2Q11 3Q11 4Q

15 Good performance of core Triple Play revenues excluding impact of Premium channel revenues, with qoq evolution recovery Pay TV, Broadband and Voice Revenues [Millions of Euros] ARPU Revenues Growth [4Q10 = Base 1] (2.8%) +1.2% Q10 1Q11 2Q11 3Q11 4Q Q10 1Q11 2Q11 3Q11 4Q11 Total Basic Premium +3.5% +0.3% -13.9% Flat qoq performance 15

16 Positive quarter in Audiovisuals and negative quarter in Cinemas yoy Cinema Revenues [Millions of Euros] Audiovisuals Revenues [Millions of Euros] (3.8)% +9.2% Q10 4Q11 4Q10 4Q11 (3.7)% (0.8)%

17 Cost savings materializing, with reduced levels of churn and commercial activity Operating Costs 4Q11 / 4Q10 [Millions of Euros] Operating Costs 2011 / 2010 [Millions of Euros] (3.9)% (4.6)% Q10 4Q Operating Costs (millions of euros) 2011 Δ % Drivers W&S (59.3) 1.7% Marginal increase in W&S of 1 million euros in 2011 Direct Costs (243.9) (3.1%) Commercial Costs (62.1) (17.0%) Other Operating Costs (178.3) (3.7%) Reduction resulting from a decrease in programming costs, due to lower average premium channel subscriptions and a reduction in the total costs in certain channels contracted; and also of lower interconnection and advertising shared revenue costs Significant decline in Commercial Costs linked to a less aggressive competitive and promotional environment, driving lower churn and lower sales related costs and to the lower level of commercial activity; and also to a more efficient use of available sales channels Other operating costs posted a 3.7% decline due to significant savings in customer service, maintenance and repair related costs as a result of the implementation of a number of efficiency improvement measures at the contact center level 17

18 % 43% 41% 39% 37% 35% 33% 31% 29% 27% % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Continued strong margin improvement EBITDA and EBITDA Margin 4Q11 / 4Q10 [Millions of Euros, %] EBITDA and EBITDA Margin 2011 / 2010 [Millions of Euros, %] EBITDA Margin q.o.q. [%] +1.0pp +2.9% % 37.1% 37.2% 35.3% 35.9% % 37.1% 37.2% % 36.4% 34.3% 31.7% 33.3% 34.1% 34.1% 33.2% 33.2% 34.1% 30.1% 4Q10 1Q11 2Q11 3Q11 4Q Q 2Q 3Q 4Q EBITDA Margin 2009 EBITDA Margin 2010 EBITDA Margin

19 Net Income growth in 4Q11 Net Income 4Q11 / 4Q10 [Millions of Euros] Net Income 2011 / 2010 [Millions of Euros] Net Income 2011 / 2010 without impact of Angolan operations [Millions of Euros] +46.4% (3.5)% +2.1% Q10 4Q (millions of euros) 2011 Δ % Drivers D&A (217.6) (0.9)% Level of Depreciation and Amortization is still relatively high due to the significant CAPEX of the previous three years Net Financial Expenses (43.0) 19.2% Net Interest charges and other financial expenses of 32.7 million euros Negative contribution in FY11 of the Equity Consolidation of Angolan operation in the amount of 10.2 million euros, decreasing from 2.8 million euros in 1Q11 to 2.3 million euros in 2Q11 and 2.0 million euros in 3Q11, with a hike to 3.1 million euros in 4Q11 due to subscriber growth which led to higher commercial and activation-related costs Income Taxes (14.8) 58.2% Normalized level of tax rate at 29.8% 19

20 Continued reduction of CAPEX to more normalized levels as forecast Total CAPEX 4Q11 / 4Q10 [Millions of Euros] Total CAPEX 2011 / 2010 [Millions of Euros] (48.4)% (39.6)% Q10 1Q11 2Q11 3Q11 4Q Baseline CAPEX Non-Recurrent CAPEX Baseline CAPEX Non-Recurrent CAPEX 20

21 Strong improvement in EBITDA CAPEX with the end of strong investment cycle EBITDA Total CAPEX & OCF After Investment [Millions of Euros] Free Cash Flow [Millions of Euros] Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q (2.0) (8.7) (7.0) (15.1) (35.5) 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 EBITDA- Total CAPEX OCF After Investment Very strong FCF generation momentum 21

22 Solid capital structure, 2.0x Net Financial Debt / EBITDA Change in Net Financial Debt [Millions of Euros] 2010 EBITDA-CAPEX Improvement led by solid EBITDA and decline in CAPEX Non-Cash Items and Working Capital Long Term Contracts Continued reversal of the Change in WK in 2H11 after a peak in 2010 due to accelerated CAPEX programme Net Interest Paid 21.3 Income Taxes Paid 16.5 Net Dividends Paid 49.4 Other Items x Net Financial Debt / EBITDA at the end of

23 Wrap-up 23

24 Wrap-up Despite the difficult macroeconomic environment, ZON continues to post good results in its domestic businesses Good operational performance of the core Triple Play business with good growth in cable base Despite slowdown of Premium subscriptions, optimization of cost structure has enabled continued EBITDA growth Strong FCF with very strong quarterly Cash Flow momentum. Positive FCF after dividend payments, allowing for reduction in Net Financial Debt; Excellent results of the Angolan business, on track for EBITDA breakeven in

25 Appendix Financial Highlights Operational Highlights 25

26 Financial Highlights (Millions of Euros) 4Q10 4Q11 y.o.y y.o.y. Operating Revenues (2.5%) (2.0%) Pay TV, Broadband and Voice (2.8%) (1.7%) Audiovisuals % (0.8%) Cinema Exhibition (3.8%) (3.7%) Other (11.9) (12.9) 8.2% (48.0) (49.2) 2.5% EBITDA % % Income from Operations % % Net Income % (3.5%) CAPEX (48.4%) (39.6%) EBITDA minus CAPEX (5.2) 33.1 n.a % Net Financial Debt (0.3%) (0.3%) EBITDA margin (%) 33.2% 34.1% 1.0pp 34.7% 36.4% 1.7pp CAPEX as % of Revenues 35.5% 18.8% (16.7pp) 28.4% 17.5% (10.9pp) Net Financial Debt / EBITDA [x] 2.1x 2.0x n.a. 2.1x 2.0x n.a. 26

27 Operational Highlights 27

28 Contacts José Pedro Pereira da Costa CFO Maria João Carrapato Head of Investor Relations ZON Multimedia Avenida 5 de Outubro, Lisboa, Portugal Tel.: Fax:

29 29