PRESS RELEASE TELENET 2005 FIRST HALF RESULTS

Transcription

1 PRESS RELEASE TELENET 2005 FIRST HALF RESULTS Belgium, August 23, 2005, Telenet Group Holding NV (the Company ), Belgium s largest provider of broadband cable services, announces its unaudited US GAAP consolidated results for the six month period ended June 30, Highlights are as follows: HIGHLIGHTS Total revenues increased 7% to million compared to the first half of 2004 o combined residential internet and telephony revenues increased 15% to million Total EBITDA increased 12% to million compared to the first half of 2004 Continued strong operational performance o 108,000 new broadband internet subscribers added, taking total residential internet subscribers to 559,000, an increase of 24% over the first half of 2004 o 58,000 new telephony subscribers added, taking total residential telephony subscribers to 333,000, an increase of 21% over the first half of 2004 Initial launch of our interactive Digital Television service ( idtv ) in Affligem Launch of Prime brand, replacing Canal+ Contracts signed to deploy Wi-Fi service with several partners with national presence Introduction of our first bundled entry level service FreeSurf Commenting on the results, Duco Sickinghe, Telenet s Chief Executive Officer, said: We are very pleased with the results for the first half of the year which show continued strong subscriber growth in residential broadband internet and telephony and a healthy improvement in EBITDA and EBITDA margin. We concluded the first six month of this year with the initial launch of our idtv service in Affligem and we now look forward to building on this hard work during the rest of the year as we roll out our idtv service to the rest of our analogue subscriber base.

2 Operational Highlights RGUs (in thousands) (1) June 30, 2004 June 30, 2005 % change Basic cable television 1,585 1,587 - Premium cable television % Residential broadband internet (2) % Residential telephony (2), (3) % Business services (4) % Total 2,479 2,642 7% Average monthly revenue per subscriber (in Euro) (5) June 30, 2004 June 30, 2005 % change Basic cable television (6) % Premium cable television (6) % Residential broadband internet % Residential telephony (7) % For footnotes see below Internet: Established as largest revenue contributor Telenet continued to record strong sales in the first half of 2005 which resulted in approximately 108,000 net additions to its residential and SoHo subscriber base. These results take Telenet s total residential and SoHo broadband internet subscribers up to 559,000 (compared to 451,000 at the end of June 2004), representing a growth rate of 24% compared to the end of June In addition a further 22,000 small businesses (compared to 21,000 at the end of June 2004), also receive this service, contributing to a total of 581,000 broadband Internet subscribers at the end of June In order to stimulate sales in additional target market segments, we now have a choice of five different internet products. These range from our entry level narrowband FreeSurf product, 2

3 which was launched as part of a bundled service with fixed voice telephony in July 2005 and priced at 1.00 (including VAT) offering a 64 Kbps downstream speed; to the 5 Mbps ExpressNet broadband product, priced at (including VAT) per month, which is our most popular product,and Expressnet Turbo, which is our premium product, priced at per month (including VAT), offering a 10 Mbps downstream speed. Telephony: New tariff plans boost subscriber growth At the end of June 2005, Telenet had 333,000 residential and SoHo telephony subscribers (including 10,000 CPS customers), compared to 275,000 at the end of June 2004, an overall increase of 21%. A further 6,000 small corporate customers also received this service at the end of June 2005, which stable on June 2004, contributing to a total of 339,000 telephony subscribers at the end of the first half A significant contributor to these net additions was the recent introduction of rate plans such as Freephone and Freephone Anytime which stimulated demand for our telephony products. These new products, providing unlimited off peak national fixed line calls, position us competitively in relation to the discounted pricing plans currently available in the market. Television: Introduction of idtv service in Affligem and launch of Prime brand name At the end of June 2005 Telenet had 1,587,000 basic cable TV subscribers and 135,000 premium cable TV subscribers. Our premium cable TV subscriber base decreased by 5% compared to the end of June 2004, in line with our expectations, primarily as a consequence of reduced marketing activities for this service ahead of the launch of our idtv service. On July 30, 2005, we launched our interactive digital television (idtv) service in Affligem, a city with 4,500 households in Flanders. In conjunction with this initial launch, we have migrated eight channels out of our analogue offering of 35 channels into our basic digital tier. Residents of Affligem are able to access our digital services by purchasing a Telenet Digibox set top box for 199 (including VAT). This device will enable reception of our basic digital tier at the same price as our existing basic analogue service, and in addition provide access to our enhanced interactive digital services. Initially, these additional services comprise premium sports and film content. Over time, we will add functionality and features which will all be accessible through the Digibox. 3

4 As part of the introduction of our idtv services, we have launched the new Prime brand, which forms the basis of the various premium packages such as Prime Sport and Prime Movies. Initially the Prime package customers represent our existing premium customers who are subscribers to the Canal + services which we took over following the Canal+ acquisition. As of September 2005 we will cease using the Canal + brand name and will market all premium services under the new Prime brand. Telenet Solutions: Strong competitive environment Despite continued strong competition and evolving end-user requirements in our business segment, Telenet Solutions managed to keep its customer base stable during the six months to the end of June This customer base includes 28,000 coax subscribers, consisting of 22,000 internet and 6,000 telephony subscribers. Financial Highlights June 30, 2004 June 30, 2005 % change Revenues (Euro million) % EBITDA (Euro million) % EBITDA margin 45.2% 47.4% - During the six months ended 30 June 2005, consolidated total operating revenues amounted to million; an increase of 7% compared to the first half of The growth was principally due to subscriber additions in the residential broadband internet and telephony businesses. Consolidated EBITDA (earnings before interest, taxes, dividends and amortization) was up by 12%, from million for the first half of 2004 to million for the first half of This increase ahead of revenue growth represents our efficient cost structure and operational gearing benefits. 4

5 Total cash from operations for the six months increased from million in 2004 to million in This primarily reflects the settlement of trade payables resulting from capital expenditures incurred in the fourth quarter of 2004, offsetting our EBITDA growth of 12%. Net loss for the first half of 2005 was 29.2 million compared to 38.0 million in Capital expenditure for the first half of 2004 increased from 57.1 million for the first half of 2004 to 67.2 million in the first six months of 2005, primarily driven by subscriber growth. The company closed the first half of 2005 with a positive cash balance of 74.3 million, after a 105 million partial prepayment of its senior credit facility. Footnotes (1) Each service subscribed to is counted as a revenue generating unit, or RGU. (2) Includes homes and SoHos that receive our broadband Internet and telephony services through a coaxial connection. (3) These statistics include approximately 14,000 and 10,000 RGUs who used our carrier preselection services at June 30, 2004 and June 30, 2005 respectively. (4) Consists of SME RGUs that receive our broadband Internet and telephony services through a coaxial connection, and SME RGUs and corporate RGUs that receive our services using a fibre connection, which RGUs are not included in the above RGU calculation. (5) Revenue earned for the period divided by the number of months in the period and divided by the average number of RGUs for the period. (6) Average monthly revenue per subscriber includes copyright fees and other revenue earned from carriage fees. (7) Average monthly revenue per subscriber excludes interconnection revenue and installation fees but includes revenue generated by RGUs who use our carrier preselection services. See footnote (3). (8) All figures presented are in US GAAP. 5

6 About Telenet Telenet is the largest provider of broadband cable services in Belgium. Its business comprises the provision of cable television, high speed Internet and telephony services, primarily to residential customers in Flanders. In addition, Telenet offers services to business customers all across Belgium and in Luxembourg under its brand Telenet Solutions. Telenet offers its residential services through a combination of its cable network, which passes some 1.6 million homes in Flanders, and through long term usage rights on cable networks which pass a further 0.8 million homes in Flanders. All the networks through which Telenet offers residential services in Flanders have been upgraded to a two way digital HFC (hybrid fiber coaxial) standard and Telenet has direct relationships with all of its Internet and telephony customers. Telenet Solutions offers voice, data and Internet services to its business customers through its state of the art fibre backbone which covers all Belgium and Luxembourg. Disclaimer This release contains certain statements which are forward-looking and are therefore subject to material risks and uncertainties. Specific factors which may cause these uncertainties include amongst others: future changes to Telenet s business plan, potential fluctuations in the company s operating results, the competitive environment, subscriber behaviour patterns, regulatory risks, technological developments and other risks. For further information about Telenet, please contact: Renaat Berckmoes Raquel Almira Group Treasurer Grupo Albion renaat.berckmoes@staff.telenet.be ralmira@grupoalbion.net Phone: Phone: