annual results june 2002 15 august 2002. results summary $ million 20012002 % change revenue...

Annual ResultsAnnual Results

June 2002June 2002

15 August 200215 August 2002

Annual ResultsAnnual Results

June 2002June 2002

15 August 200215 August 2002

Results SummaryResults Summary

$ million$ million 20012001 20022002 % Change% Change

RevenueRevenue 300.4300.4 344.6344.6 15%15%

Operating ExpensesOperating Expenses 224.7224.7 236.4236.4 5%5%

EBITDAEBITDA 75.775.7 108.2108.2 43%43%

Depn & AmortDepn & Amort 95.495.4 113.0113.0 18%18%

EBITEBIT (19.7)(19.7) (4.8)(4.8) (76%)(76%)

InterestInterest 21.321.3 26.726.7 25%25%

OtherOther 1.31.3 (1.3)(1.3) (200%)(200%)

Net Loss after Net Loss after TaxTax (42.3)(42.3) (30.2)(30.2) (29%)(29%)

Subscriber GrowthSubscriber Growth

‘‘000000 20012001 20022002 % Change% Change

UHF ResidentialUHF Residential 159.8159.8 136.3136.3 (15%)(15%)

DBS ResidentialDBS Residential 264.2264.2 284.3284.3 8%8%

DBS WholesaleDBS Wholesale -- 75.475.4 --

CommercialCommercial 6.46.4 7.37.3 14%14%

Total SubscribersTotal Subscribers 430.4430.4 503.2503.2 17%17%

FullFull Year Subscribers Year Subscribers

0

100,000

200,000

300,000

400,000

500,000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

UHF Satellite Wholesale

Pay Television PenetrationPay Television Penetration

AustraliaAustralia 22%22%

FranceFrance 32%32%

New ZealandNew Zealand 36%36%

United KingdomUnited Kingdom 41%41%

FinlandFinland 45%45%

GermanyGermany 70%70%

United StatesUnited States 81%81%

SwitzerlandSwitzerland 83%83%

BeNeLuxBeNeLux 95%95%

Moving Annual Moving Annual Net ChurnNet Churn

10%12%14%16%18%20%22%24%26%28%30%32%

Dec-00

Feb-01

Apr-01

Jun-01

Aug-01

Oct-01

Dec-01

Feb-02

Apr-02

Jun-02

Moving Annual Moving Annual Gross ChurnGross Churn

10%12%14%16%18%20%22%24%26%28%30%32%

Jun-98

Sep-98

Dec-98

Mar-99

Jun-99

Sep-99

Dec-99

Mar-00

Jun-00

Sep-00

Dec-00

Mar-01

Jun-01

Sep-01

Dec-01

Mar-02

Jun-02

Total RevenueTotal Revenue

$164$188 $236

$263$300

$345

$0

$50

$100

$150

$200

$250

$300

$350

NZ

$ in

mil

lion

s

1997 1998 1999 2000 2001 2002Year End 30 June

CAGR 16%

CAGR 16%

Average Revenue per Unit (ARPU)Average Revenue per Unit (ARPU)

$48.47

$50.51

$47.00

$47.50

$48.00

$48.50

$49.00

$49.50

$50.00

$50.50

$51.00

NZ$

Total

2001 2002

Average Revenue per Unit (ARPU)Average Revenue per Unit (ARPU)

$54.35$55.46

$41.42$40.94

$18.43

$5.00

$15.00

$25.00

$35.00

$45.00

$55.00

NZ$

Satellite UHF Cable

2001 2002

Advertising RevenueAdvertising Revenue

$5.8

$8.6 $10.7$11.6 $12.6

$16.5

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

NZ

$ in

mil

lion

s

1997 1998 1999 2000 2001 2002Year End 30 June

CAGR 22%

CAGR 22%

Programming CostsProgramming Costsas a percentage of revenueas a percentage of revenue

42%

46%

43%

49%50%

48%

36%

38%

40%

42%

44%

46%

48%

50%

52%

% o

f Pro

gram

min

g

1997 1998 1999 2000 2001 2002

Year End 30 June

EBITDAEBITDA

$50.4 $48.3

$73.7$74.1

$75.7

$108.2

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

NZ

$ in

mill

ions

1997 1998 1999 2000 2001 2002

Year End 30 June

CAGR 16%

CAGR 16%

Capital Expenditure Capital Expenditure (excluding Transponders)(excluding Transponders)

$37.4

$13.7

$36.5

$16.9

$10.4$97.9

$13.5

$3.3

$93.6

$6.8$2.9

$130.7

$11.4$11.2

$85.7

$2.0

$20.2

$0

$20

$40

$60

$80

$100

$120

$140

$160

$NZ

(m

illi

ons)

1997 1998 1999 2000 2001 2002Year End 30 June

Decoders and Installation Digital Expansion Other

Net Profit/(Loss)Net Profit/(Loss)

-$9.3

$6.1$3.2

-$27.1

-$42.3

-$30.2

-$45.0

-$40.0

-$35.0

-$30.0

-$25.0

-$20.0

-$15.0

-$10.0

-$5.0

$0.0

$5.0

$10.0

NZ

$ in

mill

ions

1997 1998 1999 2000 2001 2002

Year End 30 June

Second Half ComparisonSecond Half Comparison

$ million$ million 22ndnd Half Half 0101

22ndnd Half Half 0202

% Change% Change

RevenueRevenue 155.9155.9 177.8177.8 14%14%

Operating ExpensesOperating Expenses 116.6116.6 121.7121.7 4%4%

EBITDAEBITDA 39.339.3 56.156.1 43%43%

Depn & AmortDepn & Amort 50.450.4 58.758.7 17%17%

EBITEBIT (11.1)(11.1) (2.6)(2.6) (77%)(77%)

InterestInterest 11.111.1 14.214.2 28%28%

OtherOther 0.60.6 0.20.2 (67%)(67%)

Net Loss after Net Loss after TaxTax (22.8)(22.8) (17.0)(17.0) (25%)(25%)

2002 Operating Cash Flow2002 Operating Cash Flow

$ million$ million 20012001 20022002 % Change% Change

Net Loss after TaxNet Loss after Tax (42.3)(42.3) (30.2)(30.2) (29%)(29%)ADDADD

Depn & AmortDepn & Amort 95.495.4 113.0113.0 18%18%

Loss on Football KingzLoss on Football Kingz 0.00.0 2.02.0 0%0%

Working Cap Dec/(Inc)Working Cap Dec/(Inc) (12.4)(12.4) (10.7)(10.7) (14%)(14%)

OtherOther 3.23.2 2.92.9 (34%)(34%)

Net Operating Cash Net Operating Cash FlowFlow 43.943.9 77.077.0 75%75%

Free Cash FlowFree Cash Flow

$ million$ million 20012001 20022002 % Change% Change

Net Operating Cash Net Operating Cash FlowFlow 43.943.9 77.077.0 75%75%

Net Investing Cash Net Investing Cash FlowsFlows (140.7)(140.7) (114.2)(114.2) (19%)(19%)

Free Cash FlowFree Cash Flow (96.8)(96.8) (37.2)(37.2) (62%)(62%)

Impact of Football KingzImpact of Football Kingz

$ million$ million

As As ReportedReported

Adjusted Adjusted for Kingzfor Kingz

Net Loss after TaxNet Loss after Tax (30.2)(30.2) (25.7)(25.7)

Net Operating Cash FlowNet Operating Cash Flow 77.077.0 78.878.8

$m$m

Kingz After Tax LossKingz After Tax Loss 1.81.8

Loss on DisposalLoss on Disposal 2.02.0

Goodwill AmortisedGoodwill Amortised 0.70.7

TotalTotal 4.54.5

FundingFunding

$111m of Capital Notes raised October 2001 @ $111m of Capital Notes raised October 2001 @ 9.3%. Election date October 20069.3%. Election date October 2006

Bank Facility $225m, drawn to $157m. Margin is Bank Facility $225m, drawn to $157m. Margin is 50bp50bp

Bank Facility repayable MarchBank Facility repayable March 20042004

TaxTax

Tax losses carried forward of $110mTax losses carried forward of $110m

Tax Asset not recognisedTax Asset not recognised

Approximately $58m of losses to be offset by INLApproximately $58m of losses to be offset by INL

INL to repay cash to SKY when tax is due INL to repay cash to SKY when tax is due

ie $58mie $58m x 33% = $19.1mx 33% = $19.1m

Foreign Currency HedgingForeign Currency Hedging

84% hedged for 2002/03 $US commitments 84% hedged for 2002/03 $US commitments @ .4343@ .4343

20% hedged for 2003/04 $US commitments@ .434220% hedged for 2003/04 $US commitments@ .4342

88% hedged for 2002/03 $Aud commitments 88% hedged for 2002/03 $Aud commitments @.8217@.8217

17% hedged for 2003/04 $Aud commitments 17% hedged for 2003/04 $Aud commitments @.8270@.8270

Expense AnalysisExpense Analysis

$ million$ million 20012001 20022002 % Change% Change

ProgrammingProgramming 151.5151.5 166.6166.6 10%10%

Subscriber ManagementSubscriber Management 9.39.3 12.712.7 37%37%

TransmissionTransmission 17.517.5 6.96.9 (61%)(61%)

Selling, General & Selling, General & AdministrationAdministration 43.643.6 43.443.4 (0.5%)(0.5%)

Depreciation & AmortisationDepreciation & Amortisation 94.694.6 112.3112.3 19%19%

Football KingzFootball Kingz 4.84.8 6.06.0 25%25%

Total Operating ExpensesTotal Operating Expenses 321.3321.3 347.9347.9 8%8%

Capital Expenditure AnalysisCapital Expenditure Analysis

$ million$ million 20012001 20022002 % Change% Change

Transponder LeaseTransponder Lease -- 17.517.5 100%100%

Subscriber EquipmentSubscriber Equipment 130.7130.7 85.785.7 (34%)(34%)

Digital ExpansionDigital Expansion 11.411.4 2.02.0 (82%)(82%)

Interactive ApplicationsInteractive Applications 2.02.0 3.03.0 50%50%

Right of renewalRight of renewal 4.54.5 10.710.7 138%138%

OtherOther 5.35.3 4.54.5 (15%)(15%)

Total Capital ExpenditureTotal Capital Expenditure 153.3153.3 123.4123.4 (20%)(20%)

Subscriber Acquisition Cost Subscriber Acquisition Cost (DBS)(DBS) $815$815 $680$680 (17%)(17%)

Industry Strategic ConsolidationIndustry Strategic Consolidation

TVNZ on SKY Digital PlatformTVNZ on SKY Digital Platform

TelstraClear wholesale distribution agreementTelstraClear wholesale distribution agreement SKY re-sold on TCL networkSKY re-sold on TCL network SKY exclusive procurer of TCL programmingSKY exclusive procurer of TCL programming 7 year term7 year term

Telecom Telecom Expires March 2003Expires March 2003

2002 Key Messages2002 Key Messages

Net loss reduced by 29% to $30mNet loss reduced by 29% to $30m

Operating cash flow up 75% to $77mOperating cash flow up 75% to $77m

Negative free cash flow reduced by $60m to $37mNegative free cash flow reduced by $60m to $37m

Subscriber numbers up 17% to 503k.Subscriber numbers up 17% to 503k.

ARPU up 4% to $50.51, DBS ARPU up 2% to $55.46ARPU up 4% to $50.51, DBS ARPU up 2% to $55.46

Churn down 16% to 11.7% (Net) Churn down 16% to 11.7% (Net)

Subscriber acquisition costs reduced by 17% to Subscriber acquisition costs reduced by 17% to $680$680