2Q11 RESULTS PRESENTATION 28 JULY 2011 � �
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 1995. 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. 82- 5059. 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. �
Good operational performance Triple Play Penetration already in excess of 58.6% (+9.6pp) RGU growth of 6.7% to around 3.213 million Cable customer base growth in 2Q11, +2.3 thousand customers 715 thousand Broadband subscribers: 62% penetration (+10.1k) 827 thousand Fixed Voice customers: 70% penetration (+19k) – the only operator in the market posting growth Continued growth in digital subscribers: 86% subscribers with digital Good yoy ARPU progression, growth of 0.5% in 2Q11 � 3
Solid financial performance Good performance of core Pay TV Revenues excluding Premium channel revenue: +1.1% in 2Q11 Decrease in Total Operating Revenues, affected by SportTV disconnections with ZON and the other operators Good EBITDA performance, with Margin growth of 1.9pp in 2Q11 to 37.1% Total CAPEX decreased significatively by 37% to 35.5 million euros Strong CF (EBITDA – CAPEX) improvement, +116.1% to 43.1 million euros, with significant CAPEX reduction � 4
Leading in Triple Play with 59% penetration ZON cable customer profile 2Q11 Growth in 3P customers / Penetration [%] [Thousands, %] Single Play 27.3% Triple Play Double 58.6% Play 14.1% � 5
Resilience in ARPU supported by growth in core basic Triple Play revenues Blended ARPU ARPU Growth YoY [Euros] [%] +0.5% � 6
Maintaining leadership in Pay TV Growth in Cable platform Relative size of Pay TV customer base [Thousands] Others (31 May 2011) (1Q11) (2Q11) (2Q11) Source: ZON, ANACOM, Company Reports � 7
Digital services still growing well ZON HD Boxes Installed VOD Performance [Thousands] [1Q10 = Base 1] +25.1% 3.5 3.3x 3.0 2.6x 2.5 2.0 1.5 1.0 0.5 0.0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 # Videos Revenues 86% of ZON customers receive digital services, and the almost 930 thousand HD set top boxes installed are driving the use of higher value services, such as VOD � 8
Continuing quarterly sequential growth in BB reinforcing position as leading NGN operator Broadband Market and Market Broadband customer mix NGN Market Shares Shares [%] [%] [%] 120% 2,500 1,634 2,075 2,107 1,865 100% 2,000 13.9% 13.7% 14.6% 14.1% 2 Mbps 6.0% 6.4% ZON 9.2% 12.5% 4% 80% Fibra Others 1,500 25% 715k 26% 60% 47.2% 46.8% 44.5% 41.6% subs 5 - 10 1,000 ZON 40% Mbps 74,2% 46% 20 - 30 500 20% 33.0% 33.1% 31.3% 32.2% Mbps 25% 00% 00 2008 2009 2010 1Q11 ZON PT Sonaecom Others Broadband net adds of 10.1 thousand in 2Q11. Adjusting for network coverage ZON is either #1 or close to #1 in almost all its coverage areas Source: ZON, ANACOM (High speed fixed networks study, 21 February 2011; http://www.anacom.pt/render.jsp?contentId=1072290) � 9
ZON@FON: over 400,000 hotspots in Portugal, comparing with 1,600 from largest competitor Number of Hotspots in Portugal 400,000 1,600 Incumbent Wifi network ZON@FON has by far the largest WiFi network in Portugal, with over 400,000 hotspots offering a very important free mobility complement for ZON Fixed Broadband customers Source: ZON, Company Reports �� 10
Continued Fixed Voice subscriber growth Fixed Voice Subs and Penetration Mobile Subscribers Fixed Voice Market and Market [Thousands, %] [Thousands] Shares [Thousands, %] +19.5% +3.7% +28.3% 1 2 0 % 0 0 3 7 3,546 3,676 1 0 % 12% 12% 5 0 3 6 14% 15% 8 0 % 0 0 3 6 6 0 % 52% 55% 3 5 0 4 0 % 0 0 3 5 2 0 % 22% 18% 0 % 3 4 5 0 1Q10 1Q11 ZON PT Sonaecom Others ZON is the only operator growing in the Fixed Voice market recording net adds of 19.3 thousand in 2Q11. Source: ZON, ANACOM �� 11
A quarter of recovery in Cinemas, with more blockbusters than in 1Q11 Gross Revenue & Attendance Performance Share of cinema distribution revenues 1H11 2Q11 [%] [%] Others 9.4% Castello Lopes 16.3% ZON 50.6% Columbia 23.7% More blockbusters in Performance in Gross ZON Lusomundo distributed 6 2Q11, 2.1 million tickets Revenues and Attendance of the top 10 movies in 1H11, well above the total market, sold, +22% yoy with its share of revenues according to data from the Average revenue per reaching 50.6% Institute For Cinema and ticket of 4.9 euros, +7.4% yoy Audiovisuals Source: ZON, ICA [Portuguese Institute For Cinema and Audiovisuals] �� �� 12
ZAP posting good results in Angola Over 90 thousand active customers by the end of 2Q11, ARPU above 35 USD Exclusive distribution of Portuguese Football League and other relevant Sports content Distribution network with 10 own stores, 350 agents’ points of sale and door-to-door sales force with 150 people �� �� 13
Financial Review ��
Slight decline of Total Operating Revenues Consolidated Operating Revenues Consolidated Operating Revenues 2Q11 / 2Q10 [Millions of Euros] 1H11 / 1H10 [Millions of Euros] (2.2)% (1.0)% �� �� 15
Good performance of core Triple Play revenues excluding impact of Premium channel revenues Pay TV, Broadband and Voice Revenues ARPU Revenues YoY Growth [Millions of Euros] [%] (3.0)% �� �� 16
A quarter of recovery in Cinemas Audiovisuals Revenues Cinema Revenues [Millions of Euros] [Millions of Euros] (6.7)% +18.9% +0.7% +0.9% �� �� 17
Cost savings materializing, with reduced levels of churn and commercial activity Operating Costs 2Q11 / 2Q10 Operating Costs 1H11 / 1H10 [Millions of Euros] [Millions of Euros] (4.5)% (5.0)% Operating Costs ∆ % 1H11 Drivers (millions of euros) W&S 29.1 1.0% Marginal increase in W&S Reduction resulting from a decrease in programming costs on the back of lower premium channel subscriptions, which more than offset Direct Costs 121.9 (1.6%) an increase in traffic and capacity costs due to higher brodband and voice usage Significant decline in Commercial Costs linked to a lower level of commercial activity and churn, and also to a more efficient use of Commercial Costs 27.4 (20.9%) available sales channels Other operating costs posted a 4% decline due to significant savings in customer service related costs and through cost control of Other Operating Costs 89.1 (4.0%) several G&A areas �� �� 18
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