9M09 RESULTS ANNOUNCEMENT PRESENTATION

Transcription

1 9M09 RESULTS ANNOUNCEMENT PRESENTATION 18 NOVEMBER 2009

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.

3 TÍTULO E DATA DA APRESENTAÇÃO ARIAL 10pt Introduction

4 Another Quarter of Very Strong Operating Growth 3Q09 results reinforce our leadership position in Pay TV and Triple Play and continued strong growth momentum in BB and Voice. We also remain one of the fastest growing Triple Play providers in Europe Record Triple Play Penetration in 3Q09 09: 36.9%, 436 thousand Triple Play subscribers Confirmation of reversal of trend in Basic Subscribers with positive net adds, reinforcing leadership in Pay TV 68% market share, and the importance of ZON s strong HD offer Continued strong growth in Broadband and Voice services ZON has already achieved 600 thousand Broadband customers in the beginning of 4Q09 representing penetration of over 50% thousand Fixed Voice customers, penetration of 44.8% ARPU growth through enhanced features and additional services Blended ARPU growth of 6.2% in 3Q09 Y.o.y. growth in multiple service Cable ARPU of 11.8% in 3Q09 Leading in Roll-Out of Next Generation Services in Portugal Over 1.8 million homes already covered with Eurodocsis 3.0, 58% of the network Continuing to lead market innovation with launch of 100Mbps, 200Mbps and 1Gbps ZON Fibra bundles 4 4

5 Strong Operational Momentum Driving Superior Financial Performance Total Operating Revenues increased by 7.5% to million euros in 9M09 (+8.0% in 3Q09 09) Pay TV, Broadband and Voice Revenues up by 9.0% in 9M09 (9.8% in 3Q09 09) on the back of record Triple Play penetration, RGU and ARPU growth Operating Profitability, EBITDA, grew above Revenues, by 9% in 9M09 ( % in 3Q09 09) with improvement in Margin to 33.2%, due to strong RGU and ARPU performance Net Income of 41 million euros in 9M09 reflecting higher levels of depreciation due to customer related investment in terminal equipment. In 3Q09 09, Net Profits were 11.9 million euros, 21.8% higher y.o.y. 5 5

6 2. Continued Strong Operating Performance TÍTULO E DATA DA APRESENTAÇÃO ARIAL 10pt

7 Continued Strong Operational Momentum RGU Revenue Generating Units [thousands] +25.9% [Net Adds - thousands] RGU GROWTH REMAINS STRONG 7 7

8 3Play Penetration Over One Third of Cable Subscriber Base Triple Play Subscribers [thousands] Triple Play Subscribers Penetration of Cable Base % +19.3pp [Net Adds thousands] RGUs per Subscriber [units] +19.9% 2010 objective of 30% Triple Play Penetration achieved well ahead of schedule; ZON is the fastest growing Triple Play operator in Europe Each customer now subscribes to 2.10 services, on average, compared with 1.75 a year ago 8 8

9 Pay TV Improving Trends in 3Q09 Basic Subscribers [thousands] Cable Subscribers [thousands] DTH Subscribers [thousands] +3.6% +7.7% (6.6)% [Net Adds thousands] (17.9) (14.0) (18.2) (3.9) +3.3 (2.6) (15.3) (18.5) (18.4) (7.0) +0.8 Basic Customers showing reversal of trend of recent quarters with positive net adds of 3.3 thousand Cable base stable, and posting some growth Strong reduction in DTH disconnections in 2Q09, and positive net adds of 0.8 thousand in 3Q09 9 Note: 4Q08 Net Adds are adjusted for the impact of the acquisition of TVTel and Parfitel operations. 9

10 Strong Take-Up of Higher Value Digital Services Funtastic Digital Subscribers [thousands] ZON Boxes Installed [thousands] 50% without PVR +37.5% +7.9x [Net Adds thousands] Take-up of higher value digital services driving ARPU growth High penetration of HD ZON Boxes, enabling new TV viewing experiences VoD, HD, EPG, PVR, Pause live TV ZON today has the broadest range of HD channels which have been instrumental in containing churn in Pay TV 10 10

11 Broadband, Fixed Voice and Mobile Very Strong Momentum Maintained Broadband Subscribers [thousands] Fixed Voice Subscribers [thousands] Mobile Subscribers [thousands] +31.8% % +7.5x [Net Adds thousands] In Broadband, the pace of growth remains very strong at above 20k subs per quarter; ZON is the operator growing the most in terms of market share and is the leading operator in terms of traffic. Importantly, latest operating data reveals that 20% of gross adds are subscribing to ZON Fibra bundles in areas covered 50k net adds in Fixed Voice during 3Q09, taking the total to well over half a million subscribers The mobile business is increasing pace, with 20.5k net adds in the quarter, supported in particular by the take-up of mobile broadband connections 11 11

12 Driving ARPU Growth Blended ARPU [euros] Cable & DTH ARPU y.o.y. Growth in 3Q09 [%] +6.2% Premium between Cable and DTH ARPU [%] Multiple Service ARPU Differentiation [Single Play ARPU = 1] 12 12

13 3. Supported by Solid Financial Indicators TÍTULO E DATA DA APRESENTAÇÃO ARIAL 10pt

14 Revenues Driven by RGUs and ARPU Growth Operating Revenues 3Q09 / 3Q08 [millions of euros] Operating Revenues 9M09 / 9M08 [millions of euros] +8.0% +7.5% Pay TV, Broadband and Voice 3Q09 / 3Q08 [millions of euros] Pay TV, Broadband and Voice 9M09 / 9M08 [millions of euros] +9.8% +10.0% Excluding Advertising +9.0% +10.0% Excluding Advertising 14 14

15 Improving Sequential Trends in Audiovisuals and Cinema Revenues Audiovisuals 3Q08 / 3Q09 [millions of euros] Audiovisuals 9M08 / 9M09 [millions of euros] +2.7% (2.4)% Cinema 3Q09 / 3Q08 [millions of euros] Cinema 9M09 / 9M08 [millions of euros] +5.9% +9.2% 15 15

16 Operational Profitability Solid EBITDA Growth EBITDA and EBITDA Margin 3Q09 / 3Q08 [millions of euros; %] EBITDA and EBITDA Margin 9M09 / 9M08 [millions of euros; %] +11.3% +9.0% 33.2% 34.3% 32.7% 33.2% Operating Costs (millions of euros) 9M0 9 % Drivers W&S % Direct Costs (2.6%) Commercial Costs % Impact of acquisitions and internalization of several functions Impact of Share Plan Lower Programming Costs - impact of SIC and other content contracts renegotiation Increase in traffic and capacity-related costs partially compensating the reduction in Programming Costs Higher sales commission charges, due to high level of commercial activity driving RGU growth Increase in COGS due to growth of Mobile subscriber base and subsequent increase of handsets sold Other Operating Costs % Higher customer care, maintenance and repair costs, due to increasing number and complexity of services subscribed by customers 16

17 Net Income Net Income 3Q09 / 3Q08 [millions of euros] Net Income 9M09 / 9M08 [millions of euros] +21.8% (19.5)% Depreciation increased by 47.0% to million euros in 9M09, driven by higher investment in terminal equipment and long term contracts Net financial results were negative by 7.1 million euros, with net interest charges amounting to 20.4 million euros TOTAL NET RESULTS INCREASED BY 21.8% IN 3Q

18 Customer-Driven CAPEX y.o.y. Increase Total CAPEX [millions of euros] +33.8% Increase mostly due to upgrade to Eurodocsis 3.0 and cell splitting 9M08 9M09 Increase mostly due to the installation of a greater amount of terminal equipment 18 18

19 Sound Capital Structure and Adequate Debt Maturity Net Financial Debt [millions of euros] Net Financial Debt / EBITDA [x] 19 19

20 TÍTULO E DATA DA APRESENTAÇÃO ARIAL 10pt Wrap Up

21 Wrap Up Operational KPIs continue to show very strong performance: reversal of Pay TV trend with positive net adds, and Triple Play penetration now at 37% (2010 year-end end target was 30%) Still one of the highest growth companies of the peer group: +7.5% y.o.y. growth in Revenues, +9.0% in core Pay TV, Broadband and Voice business Leading roll-out out of Next Generation Networks and Services: 1.8 million homes covered, 200 Mbps Triple Play bundles Continued focus on profitable growth with EBITDA increasing above Revenues: +9.0% y.o.y. Rational investment strategy customer driven growth CAPEX to secure market share with attractive returns on investment, leveraging scalability of HFC network in place while leading in technological innovation 21 21

22 Appendix Financial Highlights Operational Highlights TÍTULO E DATA DA APRESENTAÇÃO ARIAL 10pt

23 Financial Highlights (Millions of Euros) 3Q08 3Q09 y.o.y. 9M08 9M09 y.o.y. Operating Revenues % % Pay TV, Broadband and Voice % % Audiovisuals % (2.4%) Cinema Exhibition % % Other (7.1) (9.5) 33.9% (18.3) (23.5) 28.1% EBITDA (1) % % Income from Operations (2) (24.5%) (28.9%) NET INCOME % (19.5 %) CAPEX % % EBITDA minus CAPEX (18.2%) (25.7%) Net Financial Debt % % EBITDA margin (%) 33.2% 34.3% 1.0 pp 32.7% 33.2% 0.5 pp CAPEX as % of Revenues 22.4% 26.1% 3.6pp 19.1% 23.8 % 4.7pp Net Financial Debt / EBITDA 1.5 x 2.4x n.a. 1.5 x 2.4x n.a. (1) EBITDA = income from operations + depreciation and amortisation. (2) Income from operations = income before financials and income taxes + work force reduction programme costs + impairment of goodwill + losses (gains) on disposal of fixed assets + other costs/income

24 Operational Highlights 3Q08 3Q09 y.o.y. 9M08 9M09 y.o.y. Pay TV, Broadband and Voice Homes Passed ('0 0 0 ) 2,8 21 3, % 2,8 21 3, % RGUs ('0 0 0 ) 2,690 3, % 2,690 3, % Basic Subscribers 1,539 1, % 1,539 1, % "Funtastic" Digital Subscribers % % Broadband Internet % % Fixed Voice % % Mobile - 54 n.a n.a. Net Adds RGUs ('0 0 0 ) % % Basic Subscribers (18 ) 3 (118.2%) (8) (19) 134.8% "Funtastic" Digital Subscribers % % Broadband Internet % % Fixed Voice % % Mobile - 21 n.a n.a. Blended ARPU ( ) % % Cinema Exhibition Revenues per ticket ( ) % % Tickets sold ('0 0 0 ) 2, ,229 (5.0 %) 6, ,90 8 (2.4%) 24 24

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