Ziggo Bond Company B.V. Annual Report 2013

Transcription

1 Ziggo Bond Company B.V. Annual Report 2013

2 Mission, trends and strategy At Ziggo, we want our customers to experience the highest level of convenience and pleasure in the field of information, communication and entertainment. We offer customers access to high-quality content and differentiating services, anywhere and at any time through our state-of-the-art network. In doing so, our mission is to be the preferred media and entertainment company. Ziggo is the largest Dutch cable operator with a network that covers approximately 56% of total homes passed in the Netherlands. Our service portfolio includes TV, broadband internet and (fixed and mobile) telephony services to consumers and businesses. Our strategy is to combine individual services in attractive packages, offering customers benefits in terms of convenience and cost while optimizing our network s utilization. Superior network and product offering Instrumental to the success of Ziggo s strategy is our fully-owned Hybrid Fibre Coaxial (HFC) network, which is very dense and brings high-capacity fibre very close (on average less than 300 metres) to the premises of our customers. As a result, we provide individual households in our service area with connections consisting for 98% out of fibre and a constant capacity of 3-4 Gbps. Our superior network enables us to offer our customers the bestvalue products and services now and in the foreseeable future. As DOCSIS 3.0 is completely rolled out, Ziggo chooses to deliver internet speeds up to 150 Mbps to all our homes passed today, whilst having the option to increase speeds to 400 Mbps at our discretion using our current technology. Furthermore, we focus on providing our customers with highly attractive propositions which differentiate us from our competitors in terms of content, speed, functionality and quality of service. Thanks to our network strength and differentiating service propositions, we have developed leading positions in triple-play, digital pay TV and broadband internet services within our service area. We will continue to leverage our network and proposition advantages to grow by increasing the product penetration of existing products and realizing our innovation roadmap. These topics will be discussed in the following paragraph. Innovation and growth opportunities Innovation is key to capturing new growth opportunities and strengthening our leading position in the dynamic Dutch telecom and media market. Our strategy is fully focused on providing customers access to high-quality content and services anywhere and anytime by leveraging and further improving our superior infrastructure and introducing new products and services. Our superior network enables us to offer our customers the best-value products and services now and in the foreseeable future. Ziggo continuously monitors the demand for bandwidth and increases the capacity of its network in order to deliver the best possible service to our customers. At the same time, since DOCSIS 3.1 has been defined as the next industry standard, we closely monitor the development of the next generation of corresponding hardware, so we can roll out DOCSIS 3.1 and gradually increase internet speeds to up to 10 Gbps as our customers need it. In doing so, Ziggo makes sure it maintains its superior network advantage in the longer run.

3 Ziggo believes that ubiquitous broadband connectivity will become increasingly important for end users and we are deploying a mix of technologies and infrastructures to cater to this need. In 2013, Ziggo successfully rolled out more than 1.1 million WifiSpots, using Ziggo wifi routers at the premises of our consumer and business customers as public hotspots for other Ziggo customers. Moreover, we have started pilots in 2013 to further expand the wifi coverage in the public space for our customers by installing public hotspots on Ziggo s existing street cabinets. The use of public hotspots using wifi routers and street cabinets implies a significant expansion of the accessibility of our high-capacity network for individual customers far beyond proximity of their homes. Finally, we further complement our fixed and wifi coverage with a range of mobile solutions and infrastructures, such as an MVNO (mobile virtual network operator) and our 2.6Ghz LTE license acquired in In September 2013, Ziggo successfully launched its first mobile propositions offering mobile voice and data to existing customers. The fact that Ziggo already has a continually expanding high-density wifi network in place means low-cost, high-speed connectivity to customers and low-cost benefits to Ziggo due to mobile data offloading. Taken together, these elements constitute important steps towards the realization of our connectivity strategy focused on providing ubiquitous broadband access to truly converged voice and video services. We continue to improve our TV proposition by offering interactive solutions. In 2013, we launched our cloud-based user interface offering an interactive TV experience through a high-end user interface on our customers noninteractive set top boxes. Furthermore, we have rolled out the Interactive CI+1.3 CAM module; combined with our cloud-base UI this enables us to offer interactive services on over 260 CI-certified television sets, which eliminates the use of set top boxes altogether. Both innovations will increase the penetration of Interactive Television amongst our customers and, combined with our ubiquitous connectivity, contribute to the realization of our TV Everywhere strategy enabling customers to watch interactive television on tablets and smartphones wherever they want, whenever they want. Customer services Increasing customer satisfaction is of crucial importance to Ziggo. About one-third of our workforce is active in direct customer service. We have invested and will continue to invest heavily in our customer services. The fact that a significant part of our employees and management performance bonuses are based on customer satisfaction criteria underscores the importance we attach to customer service. The increase of customer satisfaction and Net Promoter Score ratings exceeded our objectives in We continue to invest in improving our products and services in order to meet the highest standards of customer satisfaction. Business Clients Ziggo is traditionally a service provider to private households, but our superior network also enables us to deliver premium-quality services with attractive pricing in the business market. In recent years we have been gaining market share among home offices and small and medium-sized companies and we aim to further strengthen this position. At the same time, we aim to further grow in the business market by serving customers in the segments of medium and large companies. To this end, Ziggo acquired Esprit Telecom in 2013, providing access to their base in the medium and large segment, indirect sales channels and national DSL network. Furthermore, we continue to cater to the business market by developing tailored solutions to our business customers in selected industry verticals.

4 Performance Operational review Over the full year, Ziggo added 27,000 new subscriptions in the consumer market. At the end of December 2013, total consumer RGUs reached 6.94 million, an increase of 0.4% year on year. The number of subscribers to the Allin-1 bundle grew by 100,000 or 7.1% to million. The number of internet subscribers grew by 104,000 to a total of 1.86 million at year-end 2013 and by 6.0% compared to last year, driven by the growth in All-in-1 and the increase of the internet speeds and the roll-out of Ziggo WifiSpots. The number of digital TV subscribers increased to 2.25 million, representing a penetration of over 84.7% of our customer base. The number of TV-only subscribers decreased to a total of 747,000 at December 31, The decrease was mainly due to the upsell of the dual play and triple play bundle to our TV-only subscribers as well as churn. Among TV-only subscribers, churn came down compared to the end of last year and the first half of 2013, following higher investments in customer retention, the upsell to dual play and triple play and the investment in improved product propositions, like the increase of the internet speeds and the roll-out of Ziggo WifiSpots. However, we expect to continue to experience churn among our TV-only customers as a result of a market moving towards triple-play and a competitive environment. Churn on all other product lines, and for the All-in-1 bundle in particular, is significantly lower than churn among TV-only subscribers. Therefore, we will continue to focus on upgrading customers to our dual play and triple play bundles. The total number of consumer telephony subscribers rose to 1.56 million at year-end 2013, an increase of 6.9% compared to a year ago. This increase is mainly the result of the increase in All-in-1 subscriptions, partly mitigated by a number of customers who churn their fixed-line telephony subscription and switched from triple play to dual play. RGUs per customer grew to 2.56, up 4.6% compared to last year, following a growth in RGUs combined with a lower number of customers. Excluding digital Pay TV as a separate RGU, Ziggo recorded an average of 2.24 RGUs per customer or a 5.8% growth compared to the previous year. Marketing & Sales At the start of January, a campaign was launched to counter local FttH (Fiber to the Home) activities. The initiative emphasized the future-proof network of Ziggo, delivering high-speed internet (up to 150Mbps today), superb High Definition television channels and the best quality telephony, combined with a special offer. These targeted retention and win-back campaigns were supported by special retention offers granting a free interactive receiver or recorder, in combination with a twelve- or twenty-four month contract, respectively. The campaign was launched in areas where FttH initiatives are about to set off, and continued to run throughout In February we started several new sales and promotional campaigns focusing on triple play, dual play and upsell to interactive TV services. New subscribers to our All-in-1 bundle with a minimum twelve-month contract period were invited to choose their own special offer : either an introduction discount on their monthly subscription fee or a free set top box. The Android tablet was added in the second quarter. During the second quarter we also launched a number of new campaigns focusing on customer loyalty and customer retention, whereby existing customers can purchase an interactive HD receiver or an interactive HD recorder at an attractive discount.

5 In addition to the sales and retention campaigns that continued from the second quarter onwards, several new campaigns were launched in the third quarter. The successful sales campaign Overstapweken (switching weeks) ran throughout the summer period and invited new All-in-1 customers to choose their own promotional offer, varying from a discount on the subscription for the first six months, a free Android tablet, or a free interactive HD receiver to a one-off discount for an interactive HD recorder. In August, our new branding campaign was introduced, emphasizing the new Ziggo pay-off: connected for ever. Maintaining close contact plays an important role with the five characters in the campaign. In different settings, this new line of TV commercials focuses on the emotional connection people have. In September the HBO Series Nights and sales campaign started. The campaign had a two-phased approach. The first phase kicked off with a loyalty campaign for the existing Ziggo customers. On the free accessible Ziggo TV channel, several high-quality HBO series were broadcast for a full week. In the second phase of the campaign, a discount of 50% for four months was offered to new HBO subscribers. On September 16, the introduction of Ziggo Mobile was supported by a brand and promotional campaign through TV commercials, advertisements in daily newspapers and several direct mail campaigns, emphasizing the special offer for existing Ziggo customers and the additional access to our Ziggo WifiSpots for subscribers to Ziggo Mobile. The launch of Ziggo Mobile in the 2nd half of September was followed up by promotions through TV and radio commercials, online banners and direct mail campaigns. The two SIM-Only subscriptions for consumers and the two for business clients were well received. In December of 2013, a special campaign was launched called the Ziggo Decemberdagen. Besides the typical bundle promotional offers for new customers, existing customers were offered several free movies on our event channel and a live cooking workshop with Rudolf van Veen in cooperation with the 24Kitchen channel. During the broadcast, participants had the opportunity to ask advice and share photos of their home cooked meals via social media. Products & Services On March 15, Ziggo officially introduced the first fully cloud-based interactive DVB-C TV service in the world, as announced in the fourth quarter of By combining the IP protocol with the DVB-C television standard, even set top boxes without built-in hardware functionality for interactivity, are now able to utilize interactive services via cable. Part of this innovation is the migration of the new streaming graphical user interface (SGUI). The userfriendly GUI, which is based on HTML5, is streamed to the user over the DVB-C network using a temporary personal connection. This enables customers to access interactive services like Video on Demand or TV Gemist via a simple and basic digital receiver. By December 31, the number of activated decoders with this new SGUI had grown to over 310,000 (excl. CI+ 1.3). On December 31, we had over 566,000 customers with an interactive device, while those devices with streaming graphical user interface were already accounting for 40-50% of total VOD activity. At the end of April, we launched the roll-out of our WiFi Homezone concept in our footprint, called Ziggo WifiSpots, starting with the activation of 65,000 Ziggo WifiSpots in the city of The Hague. The wifi-hotspot concept utilizes the public channel of our wifi EuroDOCSIS 3.0 modems at the customer s premises, enabling all Ziggo internet customers to access high-speed internet in the vicinity of an activated Ziggo modem. The introduction was supported by a special communication campaign through television commercials, advertising and mailings to explain the concept and communicate the benefits for Ziggo customers: mobility and high-quality internet access on any device, anywhere in our footprint. Since its launch in April, 2013, Ziggo has activated over 1 million WifiSpots. Since the launch, we saw an anticipated strong increase in the number of active users of WifiSpots as well as in the size of data offloaded every day. In the municipality of The Hague we started with a pilot of adding 120 public, highquality WifiSpots in the public domain as part of a project between the city council of The Hague and Ziggo. On top of this public wifi initiative, we expect to expand the number of Ziggo WifiSpots in The Hague on streetcabinets

6 (non-public) to 450 by the end of December, enabling Ziggo customers to access the internet in the streets and city centre of The Hague. The implementation of WifiSpots, together with the internet speed increase, led to a significant increase in our Net Promoter Score in the third quarter. By the end of July, we finalized the internet speed increase for approximately 800,000 internet subscribers. The internet speed for basic internet subscriptions was raised from 8/1 MBit/s to 20/2 MBit/s and for All-in-1 Basis from 10/1 MBit/s to 20/2 MBit/s. The increase further widens the gap with DSL-based offerings, particularly when the actual speed delivered is considered. In addition, the highest internet speed for internet Z3 and All-in-1 Extra increased to 150/15 MBit/s and are on a par with FttH offered internet speeds. On September 15, Ziggo received an award from the International Broadcast Convention (IBC) in the Content Delivery category with the first fully cloud-based interactive DVB-C TV service in the world. By combining the IP protocol with the DVB-C television standard, even set top boxes without built-in hardware functionality for interactivity are able to provide interactive services via a cable. On September 16, Ziggo launched its mobile voice and data service on the back of the roll-out of our Ziggo WifiSpots: Ziggo Mobile. Ziggo Mobile has been specially created for existing Ziggo customers. Ziggo strives to offer the best possible access to its services everywhere, connecting customers wherever they are, at attractive rates. Ziggo Mobile plays an essential role in this respect. Ziggo Mobile has two SIM-Only subscription options for consumers and two for business clients. The basic consumer subscription is available for 15 per month (incl. VAT). This subscription offers 300 minutes call time/text messages, 1,000 MB data and unlimited access to more than 1 million Ziggo WifiSpots, a number that will continue to grow. There is an introductory subscription for business clients of 20 (excl. VAT) with 400 minutes call time/text messages, 1,000 MB data and unlimited access to the Ziggo WifiSpots. Both Ziggo Mobile propositions come with one-month notice periods, rather than the 1 or 2 years that is currently common in the market. The introduction of Ziggo Mobile was very well received by the media and customers. On November 5, we introduced the CI+ 1.3 module, enabling interactive services such as on-demand movies, television series or missed TV programmes, without the use of a set top box and using the remote control of the television set. Ziggo is the first in the world to enable interactive television via such a CI+ module. Since the beginning of 2013, an increasing number of televisions have been enabled for usage of this CI+ 1.3 module. Many Samsung, LG and Philips televisions have already been certified by Ziggo for this service and many more brands are to be expected in The CI+ 1.3 module makes use of the streaming graphical user interface (SGUI) which was deployed earlier in Other On March 2, the dance event Energy was held in the Ziggo Dome. A live broadcast was made available to all Ziggo customers via the Ziggo event channel, enabling them to experience the dance event live at home through our digital TV service. On June 16, a very popular live concert from the Ziggo Dome ( Holland Zingt Hazes ) was broadcasted for our customers via the Ziggo TV App and via the Ziggo Event Channel. The event was viewed by approximately 300,000 Ziggo customers. Later that month, the Ziggo Dome celebrated its first anniversary with a contest in which Ziggo customers could win golden seats, enabling them to attend all concerts in the Ziggo Dome for a whole year. Approximately one million people have attended a concert or event since the Ziggo Dome was opened in June On June 30, the ParkPop concert was broadcasted live via the Ziggo Event Channel. During this music festival in The Hague, Ziggo WifiSpots were placed in the concert area for the concertgoers, and a social media campaign was launched offering participants the chance to win backstage passes for the event.

7 In early November we presented the Ziggo MTV Music Week. In the week prior to the MTV EMA Awards ceremony, which was held in the Ziggo Dome, several artists gave small concerts which were broadcasted through our own Ziggo Event TV channel. In addition to this Music Week, Ziggo sponsored the MTV EMA Awards and live broadcasted the ceremony to its customers. At the Ziggo Congress of November 7, it was announced that Bits of Freedom had won the Ziggo Open Society Award Bits of Freedom is the Dutch digital rights organization focusing on privacy and communications freedom in the digital age. Bernard Dijkhuizen Ziggo s former CEO presented the award, a trophy and 15,000. The other finalists were NoXqs and Internet Protection Lab. According to the jury, both organizations fulfill an important role in Dutch (open) society. On November 21, Ziggo and the Ziggo Dome won a prestigious award at the SponsorRing event. The SponsorRing is a yearly event where the best sponsor promotions are rewarded in several categories. Ziggo and the Ziggo Dome were praised for the successful partnership and won the award in the innovation and entertainment categories. Business Market During 2013, almost 18,000 new subscribers signed up to our Office Basis, Office Plus and Internet Plus business bundles, bringing the total to more than 54,800 subscribers for our business bundles targeted at home offices and SME (Small and medium-sized) businesses. Relative growth in B2B was particularly strong with a total of 251,400 RGUs as at year-end compared to 193,800 RGUs in In the first quarter of 2013 Ziggo Zakelijk focused on specific sectors like social health care, educational institutes and recreation and several larger new contracts were won. In addition, new product innovations, including IP-VPN services with Quality of Service over both fiber and hybrid fiber coax (HFC), supporting multi-site services at cost efficient and attractive rates for our subscribers, were introduced, offering new areas of future growth for our business operations. On March 14, Ziggo announced the acquisition of Esprit Telecom, a leading provider of voice and data services for the SME market in the Netherlands, through which it can further expand its services to these segments. Esprit Telecom has an active sales channel of dealers across the country. The acquisition includes Zoranet, an ICT service provider that focuses on the retail sector. In 2012, Esprit Telecom generated revenues of 35 million. With this acquisition we have strengthened our propositions and services for the mid-market. We expect that Esprit Telecom, together with our state-of-the-art infrastructure, will bring new growth opportunities. Following the goahead from the Dutch Authority for Consumers and Markets (ACM), we finalized the acquisition of Esprit Telecom, which was consolidated as of May 1, 2013.

8 Financial review Financial performance Revenues We generated revenues of 1,564.8 million, an increase of 1.8% compared to 2012 ( 1,536.9 million). Excluding Other Revenues, revenues increased by 2.9% and by 1.2% excluding the revenue contribution from Esprit Telecom. Esprit Telecom was consolidated as of May 1, 2013 and has contributed 25.2 million in revenues since its consolidation. The main drivers of growth in revenues were continued growth in RGUs for internet and telephony, driven by a further uptake of our All-in-1 bundle, and revenues from business services. Revenues from business services were spurred by organic growth of 10.3% in the business market which, combined with a 25.2 million revenue contribution from Esprit Telecom, reported total revenue growth of 34.2%. Consumer market revenues declined by 0.6% to 1,423.1 million in 2013 (2012: 1,431.3 million). Excluding Other revenues, consumer revenues increased by 0.5%. This was driven primarily by a further uptake of our All-in-1 bundle during the year, with 100,000 net additions, or 7.1% year-on-year growth. This resulted in growth in both internet and telephony RGUs by 6.0% and 6.9%, respectively. In addition, the price increase effective February 1, 2013 contributed to the revenue growth by approximately 1.7%. Revenue growth was partly offset by a decline in revenues from digital pay TV by 0.4% and revenues from telephony usage by 2.8%. Revenues generated through our All-in-1 bundle increased by 8.3% from million in 2012 to million in 2013, representing 52.3% of total revenues from subscriptions and usage in the consumer market, versus 48.6% in Revenues from digital pay TV, including video on demand (VOD), declined by 0.4%, driven by a decline in the number of subscribers to digital pay TV from 917,000 at the end of 2012 to 853,000 at the end of 2013, which was partly offset by an increase in ARPU for digital pay TV by 7.1%, from in 2012 to in The ARPU increase was driven by a strong increase in the number of VOD transactions by 48%. The decline in RGUs for digital pay TV was driven by (a) depressed consumer confidence given the macro environment, (b) the growing popularity of VOD which does not count as an RGU, and (c) our marketing focus on customer retention and All-in-1, and the launch of Ziggo Mobile instead of premium pay TV. The growth in VOD transactions was negatively impacted by the price increase for watching live football per match from 6.95 to in the second half of In addition to the growing popularity of VOD, growth was also supported by the rise in the number of customers with an interactive set top box to 566,000 at the end of 2013, compared to 359,000 at the end of Revenues from telephony usage decreased by 2.8% from million in 2012 to million in Excluding interconnection revenues, revenues from telephony usage were flat. Interconnection rates were approximately 20.0% lower as at September 1, negatively affecting revenue by approximately 5 million. A 6.9% increase in the number of telephony subscribers was more than offset by a lower ARPU for telephony usage, as more subscribers selected a flat-fee subscription for calls within the Netherlands and several foreign countries. The lower ARPU for telephony was also attributable to a higher share of free on-net calls following growth in the number of telephony subscribers. When a Ziggo telephony customer makes a fixed-line call to another Ziggo telephony customer, the call qualifies as on-net, with no costs being charged as a result. Both trends resulted in a higher percentage of non-billable calling minutes compared with the previous year, as well as an overall decline in average usage per fixed-line telephony subscriber.

9 Financial highlights As per December 31 Amounts in million Change Subscriptions + usage 1, , % Other revenues (33.1%) Total consumer revenues 1, ,431.3 (0.6%) Business services revenues % Total revenues 1, , % Cost of goods sold (1.8%) Gross margin 1, , % % of total revenues 81.5% 80.8% Operating expenses % Marketing & Sales % Total operating expenses % % of total revenues 24.8% 23.5% EBITDA % % of total revenues 56.7% 57.3% Depreciation and amortization (0.7%) Operating income % Movement in provisions (4.1) (1.0) 310.0% Change in net working capital (215.9) 94.1 (329.4%) Cash flow from operating activities (31.5%) Capital expenditure (Capex) % % of total revenues 21.9% 18.2% Acquisition Interest received 0.0 (0.4) Change in financial assets Funding joint venture (38.8%) Free cash flow (55.8%) % of total revenues 19.3% 44.4% EBITDA - Capex (9.3%) % of total revenues 34.8% 39.1% Net result % 9

10 Total call minutes excluding interconnection decreased by 1.0% compared to On-net calling grew by 4.5%, with the number of billable minutes declining by almost 9.4% as a result of growth in on-net calling and growth in the number of flat-fee subscriptions by 13%. Average call minutes per subscriber declined by 8.4%. The gross margin on telephony usage improved by over 2.3%, supported by reduced FTA rates. Blended ARPU for consumers in 2013 was 42.10, up 2.36 (+5.9%) from This increase was driven by growth in the number of subscribers to our All-in-1 bundle and internet, which, combined with churn in TV-only subscribers, resulted in a 4.6% increase in RGUs per customer to 2.56 (based on a maximum of four RGUs per customer). Excluding digital pay TV as a separate RGU, Ziggo recorded an average of 2.24 RGUs per customer. Additionally, blended ARPU was positively affected by the price increase which became effective on February 1, Revenue from other sources, predominantly consisting of set top box sales, collection fees and revenues from service numbers, declined by 33.0% y-o-y to 31.8 million in Part of this decline was the result of accounting for costs of tablets, which are provided to new subscribers to All-in-1 or our dual-play proposition TV plus internet with a one-year contract. The costs of these tablets are deferred and allocated as a discount for the contract period to other revenues, rather than being expensed. This resulted in a discount as a result of deferred tablet costs of 3.2 million during Excluding this adjustment, revenues from other sources decreased by 12.5 million, or 26.2%. Although we shipped a higher number of set top boxes, we recorded a decline in revenues due to a lower average sales price per set top box and the capitalization of set top boxes covered by a subscription period of 12 months for which the ownership of the set top boxes remains with Ziggo Change Expensed Interactive recorders 140, ,742 (48,913) Interactive receivers 91,938-91,938 HD decoders - 89,024 (89,024) CI+ modules 16,374 25,138 (8,764) 249, ,904 (54,763) Capitalized Interactive recorders 82,380-82,380 Interactive receivers 34,106-34, , ,486 Total 365, ,904 61,723 Our business services activities generated revenues of million in 2013, up 34.2% from million in This was the result of strong growth in revenues from subscriptions to business bundles and the acquisition and consolidation of Esprit Telecom effective May 1, Excluding Esprit Telecom, revenues grew organically by 10.3%. In 2013, Ziggo added almost 18,000 new subscribers to its main B2B bundles products Internet Plus, Office Basis and Office Plus bundle, reaching a total of over 54,800 subscribers by December 31, Total revenues from coaxial products TOM and TOMi, our collective TV contracts, and business bundles for the year grew by over 37% compared to 2012 to 48.9 million, representing 42.0% of total B2B revenues ( %), excluding revenues from Esprit Telecom. 10

11 Cost of goods sold and gross margin Cost of goods sold includes the costs of materials and services directly related to revenues. It consists of copyrights, signal costs and royalties paid to procure our content, interconnection fees paid to other network operators, materials and logistics costs and costs of guarantees relating to the sale of set top boxes and other products and materials used to connect customers to our network. In 2013 cost of goods sold decreased slightly to million, down 1.8% from The gross margin for 2013 was 81.5% of revenue versus 80.8% in Excluding the acquisition of Esprit Telecom (2013 COGS of 15.5 million), which has been consolidated since May 1, cost of goods sold would have declined by 7.1% and the gross margin would have been 82.2%. Margin improvement was mainly the result of higher gross margins on internet, telephony and business services (excluding Esprit Telecom) and a lower negative margin contribution realized on the sale of set top boxes. The lower negative margin contribution from the sales of set top boxes is the result of a lower volume of set top boxes recognized as sales (233,000 in 2013 versus 279,000 in 2012, and 16,000 CI+ modules versus 25,000 in 2012) at a lower negative margin contribution per set top box. A lower average sales price during the year compared to 2012 was more than offset by a lower average purchase price. In addition, 116,000 set top boxes were capitalized, as these boxes were provided to customers as part of our sales and retention promotions covered by a one-year contract, with the ownership of the set top boxes remaining with Ziggo. These capitalized set top boxes represented a total value of 14.5 million in Our business services activities generated revenues of million in 2013, up 34.2% from million in Operating expenses (opex) Operating expenses increased by 26.4 million, or 7.3%, to million in 2013, from million in As a percentage of revenue, operating expenses increased from 23.5% to 24.8%, mainly as a result of a 27.1% increase in marketing and sales expenses from 60.5 million in 2012 to 76.9 million in The majority of marketing and sales expenses were spent on sales and customer retention campaigns, the Ziggo branding campaign and the launch of Ziggo Mobile. Excluding marketing and sales, operating expenses increased by 3.3%, or 10.0 million, compared to Excluding the acquisition of Esprit Telecom ( 5.4 million), operating expenses amounted to million, up 1.5% compared to This was mainly due to higher costs of contracted work driven by higher costs of our external call centres and costs of customer maintenance & visits. Personnel costs increased by 0.8% compared to Excluding Esprit Telecom ( 4.3 million), personnel costs decreased by 1.5%, or 2.7 million. Although headcount increased by 7.7%, excluding Esprit Telecom, and average salary costs by 3.3%, the resulting increase in personnel expenses was offset by higher capitalized personnel costs and a reduction of accrued bonuses by approximately 4.8 million as company targets were only partially achieved. The increase in average salary costs was driven by both discretionary individual salary increases and a general salary increase in line with the collective labour agreement, including an increased employer s contribution to the pension premium, which was partly offset by a decrease in employer charges for social securities. The increase in headcount was predominantly the result of an increase in the number of external resources, an increase that was more than offset by an increase in capitalized personnel costs of approximately 29.5 million, or 52%. The increased headcount is the result of an increase in external personnel hired for projects relating to investments in innovation and in our core infrastructure and service platforms, facilitating the addition of new services such as mobility and converged services and TV Everywhere. The personnel costs for the Management Board of Ziggo N.V. is recognized under Ziggo N.V. and therefore not recognized by the Company. At the end of 2013, our workforce totalled 3,350 FTEs. Excluding Esprit Telecom, we recorded 3,244 FTEs, compared to 3,014 FTEs at the end of Excluding external and temporary employees, we had 2,496 employees versus 2,498 in the previous year. The number of external resources increased from 278 FTEs at the end of 2012 to 521 at the end of The number of temporary call centre agents decreased slightly from 238 FTEs at the end of 2012 to 226 at the end of Costs of contracted work, excluding Esprit Telecom, increased by 12.8% compared to This increase was mainly driven by higher costs of our external call centres and costs of customer maintenance & visits. As a result of a strong growth in RGUs in the second half 11

12 of 2013 and the roll-out of Ziggo WifiSpots, call volumes rose by approximately 5% compared to In combination with an increase in the average handling time of approximately 23% and a relatively higher percentage of the call volume being outsourced, external call centre costs and costs of customer maintenance & visits rose by almost 30%. Consultancy costs and costs of maintenance of network and technology were stable. The higher costs of our external call centres and customer maintenance & visits was partly offset by lower consultancy costs. Costs of maintenance of our network and technology rose slightly compared to 2012 as a result of an increase in the capacity of our infrastructure, as well as rising maintenance costs following investments in our core infrastructure and systems facilitating the addition of new services, such as mobility and TV Everywhere. Office expenses, excluding Esprit Telecom, decreased by 2.0% compared to 2012 to 52.8 million. Costs of housing and sites increased by almost 1.6% as the result of the opening of a new data centre in the third quarter to support the new IT infrastructure and service platforms, facilitating the addition of new services such as mobility and converged services and TV Everywhere. Investments in innovations for our converged platform and business applications resulted in additional license and maintenance costs on top of recurring costs of existing IT business applications. The increase was more than offset by a refund of energy tax for prior years and an increase in coverage of office expenses and office IT as a result of the increase in the headcount and hours capitalized. Excluding the coverage of office expenses and the refund of energy tax, office expenses increased by 4.6%. Other operating expenses, excluding Esprit Telecom, increased by 59.3% to 8.1 million, mainly as a result of a release relating to the provision for bad debts in 2012 due to improved quality and ageing of our trade accounts receivable at the time. Other expenses also include the proceeds and gain of 6.9 million from the sale of our transmission towers and an impairment of 6.5 million. This impairment was due to our decision to replace certain components of a project to build our new video platform. Moreover we recognized more management fee by 1.2 million, which has been charged to Ziggo by Ziggo N.V. for services rendered by the members of the Board of Management of Ziggo N.V. as result of the fact that last year the management fee was charged from Q EBITDA and operating profit We achieved an EBITDA of million in 2013, up 0.8% versus The EBITDA margin was 56.7% compared to 57.3%. Excluding the EBITDA contribution of 4.3 million from Esprit Telecom, EBITDA increased by 0.3%, resulting in an EBITDA margin of 56.5% compared to an EBITDA margin of 57.3% in the prior year. Depreciation expenses and amortization of software in 2013 decreased by 1.9 million to million, from million in Excluding the acquisition of Esprit Telecom and excluding the amortization of other intangible fixed assets, depreciation expenses and amortization of software decreased by 3.4 million. This decrease is the result of high historical network and infrastructure investments as well as investments related to the merger of the three predecessor companies, which has led to relatively high depreciation expenses in recent years. However, with the current investment program in place in our core infrastructure and systems facilitating the addition of new services such as mobility and TV Everywhere, depreciation and amortization will increase in the future. In 2013, we recognized 0.8 million in amortization of other intangible assets, which is the result of the recognition of the amortization of the Esprit Telecom customer list. The Esprit Telecom customer list has been valued based on the allocation of the purchase price paid for the acquisition to the individual assets. Operating income (EBIT) in 2013 increased by 1.4% to million, compared to million in Excluding the acquisition of Esprit Telecom, operating income increased by 0.9% to million, due to the increase in EBITDA of 0.8% and lower depreciation and amortization expenses. Net income Interest costs decreased by 4.0% to million in 2013, compared to million in In 2013, 12.6 million was allocated as borrowing costs to work in progress, resulting in an interest credit, compared to 10.4 million in Excluding borrowing costs, interest costs decreased by 2.8% or 6.1 million. A reduction in our average debt by approximately 160 million lowered our interest expenses compared to The blended interest rate for 2013 was 6.9% versus approximately 6.8% for Banking and financing fees increased by 37.1% to 1.4 million in 2013, from 1.0 million in the previous year. This increase is mainly attributable to the new revolving credit facility of 400 million, which was put into place in March 2013, replacing a revolving credit facility of 50 million. 12

13 Amortization of funding costs increased by 37.8 million to 51.0 million in As a result of the refinancing of the old 1.1 billion senior credit facility in March 2013, we impaired the remaining balance of the capitalized financing costs of 42.7 million related to this old senior credit facility. The total financing fees of 12.7 million relating to (1) the new 750 million, 3.625% senior secured notes issue, (2) the new 150 million term loan A and (3) the new 400 million revolving credit facility, have been capitalized and will be amortized over the terms of the senior secured notes, the term loan and revolving credit facility. As Ziggo does not apply hedge accounting rules for interest rate swaps under IFRS, any change in fair value is recognized as financial income and expense. In 2013 Ziggo recorded a 29.1 million gain on other income, due to: (1) the periodic amortization of our negative hedge reserve of 4.6 million, (2) a fair value gain on IRS contracts of 33.7 million as a result of shortened expiration periods of underlying hedges and an increase in the underlying interest. In 2012, we reported a fair value loss of 10.8 million. A foreign exchange gain on US dollar-denominated purchases of 0.2 million is recognised in The 9.1 million net loss from joint ventures predominantly relates to our 50% share in the results of HBO NL, our joint venture with HBO. Investments in and results from the joint venture are accounted for using the equity method. Our share in the funding of this joint venture amounts to approximately 7.9 million in For 2013 Ziggo reported an income tax expense of 30.1 million, compared with an income tax expense of 92.3 million in Higher operating income, combined with reduced interest costs, partly offset by the impairment of capitalized financing costs, resulted in a strong increase in the result before income taxes to million, compared to million for the prior year. The result before income taxes of million would have led to a corporate income tax charge of 97.0 million at an effective tax rate of 25%. However, we formalized an agreement with the Dutch tax authorities in the first quarter of 2013 regarding the innovation box, which will reduce the effective tax rate going forward, as well as reducing it retrospectively for the period 2010 to The innovation box is a tax facility under Dutch corporate income tax law, which taxes profits attributable to innovation at an effective tax rate of 5% instead of the statutory rate of 25%. The application of the innovation box resulted in a one-off benefit of 35.1 million reflecting the period 2010 to 2012, as well as reducing corporate income tax charges for 2013 by 31.9 million. In 2013 Ziggo posted a net profit of million, versus a net profit of million in Adjusted for (1) amortization of financing fees and (2) changes in fair value on our interest rate hedges (all adjustments net of income taxes), the net result would have increased from approximately 285 million in 2012 to 366 million in 2013, representing an increase of 28%. 13

14 Working capital, cash flow and liquidity Working capital Net working capital excluding accrued interest and corporate income tax due increased by 99.6 million, from million negative at year-end 2012 to million negative at year-end In 2012 working capital decreased by million. The closing balance as at December 31, 2012 was adjusted for the opening balance of working capital of the acquisition of Esprit Telecom. The increase in working capital in 2013 is mainly due to (1) an increase in inventories of 12.0 million as higher inventories for network equipment and interactive recorders and receivers are kept to avoid shortages, (2) an increase in trade accounts receivable of 17.9 million as a result of a one-off delay of the collection of part of the December 2013 bill run, due to the implementation of Sepa in December, while in the prior year the billing of quarterly subscriptions was postponed from the end of December to the beginning of January; this reduced the balance for trade receivables at end-2012 by approximately 8 million, and (3) the balance deferred revenue by 9.2 million, and (4) a decrease in Other current liabilities of 11.2 million due to the relatively high capital expenditure in the last months of Working capital excludes corporate income tax due of 4.7 million as at December 31, This balance due is the result of an intragroup transaction as part of which certain assets were transferred in 2012 in order to renew part of Ziggo s tax loss carry-forward position so as to avoid expiry of these losses. One of its subsidiaries is required to report profit for tax purposes based on a percentage of the value of transferred assets, which cannot be offset against the remaining losses of the fiscal unit according to Dutch carryforward rules. The increase in working capital in the prior year was mainly attributable to VAT being payable on a quarterly rather than on a monthly basis (effective 2012), resulting in a reduction in net working capital of approximately 29 million and repayment of intracompany loan with Ziggo N.V. in order to pay dividend at Ziggo N.V. level. Cash flow from operating activities Cash flow from operating activities decreased by million, or 31.5%, to million versus million in Although EBITDA improved by 6.8 million, the cash outflow of million as a result of the increase in working capital in 2013 versus a 94.1 million cash inflow from a decrease in net working capital in 2012 and a 3.1 million higher cash outflow from a movement in provisions resulted in a decrease in cash flow from operating activities of million. Capital expenditure (capex) Capital expenditure and investments relate primarily to extending, upgrading and maintaining the network, installing new service equipment at customer premises, cost of modems and investments in the core infrastructure, service platforms and systems facilitating the addition of new services such as mobility and TV Everywhere. They also include increases in intangible assets, primarily expenditures on software, which are capitalized. Set top boxes are capitalized if these boxes are provided to customers covered by a 1- or 2-year subscription and ownership remains with Ziggo. In 2013 Ziggo recorded capital expenditures of million, an increase of 22.5% compared to 2012 ( million). The increase of 62.9 million compared to 2012 was mainly driven by investments in core infrastructure and systems to facilitate the addition of new services such as mobility and TV Everywhere, growth of access capacity and the capitalization of interactive recorders and receivers. million 2013 % of total Increase 2012 % of total Customer installation % 19.2% % Network growth % 22.4% % Maintenance and other % 24.8% % Total Capex % 22.5% % In 2013, 75.3 million (22%) of capital expenditure related to installations of service equipment, modem installations at customer premises and set top boxes covered by a one-year subscription with the ownership of the set top boxes remaining with Ziggo (compared to 63.2 million, or 23%, in 2012), whereas 43% (43% in 2012) related to new homes connected (new build) and growth of our network capacity to accommodate our increased subscriber base for internet and the continuously increasing internet speed and bandwidth requirements. 14

15 The increase in customer installations compared to 2012 is predominantly due to capitalization of set top boxes (which were not capitalized in the prior year), partly offset by a lower number of modems installed at customer premises. In 2013 Ziggo capitalized 82,400 interactive recorders and 34,100 interactive receivers, representing a total value of 14.5 million. More than 432,000 modems were shipped, versus 488,000 in 2012, reflecting a continuous upgrade of internet subscribers to a Wifi-enabled EuroDOCSIS 3.0 modem and growth in the number of internet subscribers. At the end of 2013, Ziggo had activated 1,566,000 EuroDOCSIS 3.0 modems at customer premises, of which 1,165,000 were Wifi-enabled, representing an increase of 343,000 compared to December 31, Network capacity grew by 26.9 million or 22.4% compared to 2012, mainly due to the additional required network and access capacity to process an approximately 41% increase in internet traffic, in line with the prior year (approximately 40%), as well as from the roll-out of Ziggo WifiSpot and the upgrading of our office IT systems and computer equipment of our employees. The remainder of our capital expenditure represents maintenance and replacement of network equipment and recurring investments in our IT platform and systems, as well as other investments in core infrastructure and systems to facilitate the addition of new services such as mobility and TV Everywhere. In 2013, investments in this category increased by 23.9 million, or 24.8%, to million (or 35% of total capital expenditure for the year) compared to 96.4 million for the previous year. In the fourth quarter of 2011, we had launched an investment programme for core infrastructure and systems facilitating the addition of new services such as mobility and TV Everywhere. This led to a step-up in capital investments in the category maintenance and other. Following increased network investments to stay ahead of ever-increasing customer demand for bandwidth, the investments in set top boxes to support customer experience and the continuation of investments to upgrade our IT systems to enable converged services and TV everywhere, Capex will increase to around 370 million in Operational free cash flow Operational free cash flow (OpFCF, or EBITDA minus capex) decreased by 9.3% to million as a result of an increase in capital expenditure of 63.0 million. Free cash flow and net cash used in financing activities In 2013 free cash flow (cash flow before financing activities) decreased by million to million, down 55.8% from Although EBITDA increased by 6.8 million, or 0.8%, compared to the previous year, the increase in capital expenditure of 63.0 million combined with the cash outflow from a change in working capital of million compared with a cash inflow from a change in working capital of 94.1 million in 2012, resulted in the decrease of the free cash flow. Net cash used in financing activities for the year comprises interest costs, banking and financing fees related to our loan facilities, prepayments on the senior credit facilities and drawings on the revolving credit facility. In 2013 we drew an amount of 90.2 million under our facilities. Cash interest paid in 2013 amounted to million, representing a 27.1 million drop from the previous year. The difference can be explained by a slightly lower average debt and a different timing of interest payments following the refinancing in March Our senior credit facility with interest payable on a monthly basis was partly replaced by a new senior secured note of 750 million with an annual interest payment. Interest on both the 6.125% senior secured and 8.0% senior unsecured notes is payable semi-annually, in May and November, and interest on the 3.625% senior secured note is payable annually in March. At the end of 2013, accrued interest on the senior secured and senior unsecured notes was 38.8 million, compared to 17.8 million at the end of The increase is due to a different timing of interest payments following the refinancing in March At the end of 2013, Ziggo held 77.2 million in cash and cash equivalents, compared to 92.4 million at the end of Ziggo has a revolving credit facility of million in place, expiring in March As at December 31, 2013, million had been drawn under this facility. Net debt and financing structure As at December 31, 2013, we carried a total debt balance of 3,073.5 million, including the principal amount, capitalized funding costs and discount on the issuance date. An amount of million is owed under our senior credit facility (term loan A and revolving credit facility), million was lent on by Ziggo Finance B.V. (term loan E), which had issued senior secured notes for a similar amount in 2010, million related to senior secured notes issued in March 2013 and 1,208.9 million related to senior unsecured notes issued in A summary of the capital structure with notional amounts outstanding as at December 31, 2013 is provided below. 15

16 million December 31, 2013 x LTM EBITDA Margin / Coupon Maturity Senior Credit Facility E % Mar % Senior Secured Notes % Nov % Senior Secured Notes % Mar 2020 Total Senior Secured Debt 1, % Senior Unsecured Notes 1, % May 2018 Total Debt 3, Accrued interest MtM SWAPS Cash and cash equivalents (77.2) (0.09) Total Net Debt 3, As at December 31, 2013, the outstanding balance of the senior credit facility and revolving credit facility amounted to million, including the principal amount ( million plus million drawn under the revolving credit facility of million) and capitalized financing fees. Financing fees for the senior credit facility and revolving credit facility amounted to 6.4 million, to be amortized over a period of five years. As at December 31, 2013, an amount of 0.9 million was amortized, resulting in capitalized financing fees of 5.4 million as at the end of Q As at December 31, 2013, senior unsecured notes (8.0%, May 2018) amounted to 1,187.4 million. This item is carried at amortized cost, including the principal amount ( 1,208.9 million), capitalized funding costs and discount on the issuance date. Financing fees for the notes issuance amounted to 25.8 million, to be amortized over a period of eight years. The capitalized discount upon issuance amounted to 8.8 million, to be amortized as interest expense over a period of eight years. As at December 31, 2013, an amount of 13.2 million was amortized, resulting in capitalized financing fees of 16.0 million and a capitalized discount of 5.5 million as at the end of Q The unsecured notes become callable on May 15, 2014 at a premium of 4.0% of the principal value. As at December 31, 2013, the balance of senior secured notes (6.125%, March 2017) amounted to million, stated at amortized cost, including the principal amount ( million) and capitalized funding costs. Financing fees for the senior secured notes issuance amounted to 10.6 million, to be amortized over a period of seven years. As at December 31, 2013, a total amount of 4.2 million had been amortized since issuance, resulting in capitalized financing fees of 6.4 million as at the end of Q The secured notes became callable on November 15, 2013 at a premium of 3.063% of the principal value. As at December 31, 2013, the balance of senior secured notes (3.625%, March 2020) amounted to million, stated at amortized cost, including the principal amount ( million), capitalized funding costs and capitalized discount. Financing fees for the notes issuance amounted to 6.4 million, to be amortized over a period of seven years. The capitalized discount upon issuance amounted to 1.5 million, to be amortized as interest expense over a period of seven years. As at December 31, 2013, an amount of 0.7 million was amortized, resulting in capitalized financing fees of 5.7 million and a capitalized discount of 1.4 million as at the end of These secured notes are non-callable. Interest on the 6.125% senior secured notes and 8.0% senior unsecured notes is due semi-annually. The coupon for the new 3.625% is due annually in March. As at December 31, 2013, an amount of 38.8 million was accrued under current liabilities (December 31, 2012: 17.8 million). As at December 31, 2013, the fair value of the interest rate swaps (IRS) amounted to 29.5 million negative, compared to 63.2 million negative as at December 31, Since the issuance of the senior secured notes on October 28, 2010, any change in fair value has been recognized as financial income and expense, as Ziggo does apply hedge accounting. Before the issuance of the senior secured notes, any changes in fair value were recorded in the hedge reserve as part of equity. As at December 31, 2013, the hedge reserve amounted to 0.9 million negative, which will be charged to profit or loss during the remaining term of the outstanding IRS. 16

17 In 2013 we entered into forward-starting interest rate swaps for the period May 2014 to May 2024 for an amount of 900 million. Using this instrument we have hedged the base interest rate and consequently reduced our interest rate exposure for the period , assuming we would call our unsecured notes ultimately at the first call date in May As a result of the intended public offer on all outstanding shares of Ziggo N.V. by Liberty Global on January 27, 2014 and the exchange offer launched for the unsecured notes in combination with the availability of the term loan B3 to refinance the remainder of the unsecured notes which are not tendered, these forward interest rate swaps were settled in February 2014 after the exchange offer was successfully completed and the interest exposure was no longer existing. As at December 31, 2013, our Net Debt to Adjusted LTM EBITDA leverage ratio was 3.50, up from 3.42x as at year-end The leverage of 3.50x is in line with our stated leverage target of around 3.5x. Net debt is defined as the outstanding balance of the principal amount of our borrowings, plus interest accrued on those borrowings ( 38.8 million as at December 31, 2013) and the market-to-market value of the interest rate swaps ( 29.5 million negative as at December 31, 2013), reduced by the balance of cash and cash equivalents. The average debt maturity was 4.7 years as at December 31, 2013, down from 4.9 years as at the end of December 31, The refinancing in March 2013 of our senior credit facility with a maturity in 2017 by a new senior secured note of 750 million with a maturity in March 2020 extended the average debt maturity. Intangible assets and goodwill and the acquisition of Esprit Telecom Following the acquisition of Esprit Telecom and the purchase price allocation, we allocated 5.1 million to the customer list of Esprit Telecom and recognized goodwill of 11.3 million. The customer list will be amortized in four and a half years. The cash paid amounted to 17.8 million and an earn-out of 0.5 million has been recognized under provisions. 17

18 Outlook Based on our strong network and appealing product offerings, we will continue to focus on our top line in This will predominantly be facilitated by ongoing growth in broadband internet, Ziggo Mobile and our B2B activities. As we anticipate no substantial change in the current competitiveness in the market, we intend to make further investments in sales and promotions, customer retention and product development to strengthen our position and improve our services. We expect these additional investments, which will be skewed towards the first half of the year, will result in a flat EBITDA for 2014 compared to Following increased network investments to stay ahead of ever-increasing customer demand for bandwidth, the investments in set top boxes to support customer experience and the continuation of investments to upgrade our IT systems to enable converged services, Capex will increase to around 370 million in We believe the investments we are making will help secure continued long-term earnings growth and generate new revenue streams for the business in the medium term. We will continue to exercise financial self-discipline, which underpins the financial flexibility we enjoy. Our strong cash generation enables us to invest in the future while also gradually increasing shareholder returns. 18

19 Corporate social responsibility Ziggo takes its responsibility as a provider of television, internet and telephony services very seriously. The high-quality, reliable products and services we deliver perform an important role in the lives of millions of people. Information, communication and entertainment support and enrich society and support social interaction. Ziggo and the Open Society Dutch society is one of the most open societies in the world. Ziggo believes that the quality, availability and accessibility of information, as well as the digitization required to facilitate it all, can play an important role in maintaining and advancing an Open Society. Ziggo wants to be actively involved in thinking about, and acting towards, an open society, from the perspective of computerization and digitization. Where are the barriers? How can we get more people involved? How can we ensure that everyone is able to participate? How will we maintain the high-quality and diversity levels of the information upon which people base their opinions and, in some cases, even their identities? Ziggo Open Society Award 2013 To address these issues Ziggo has established an annual prize: the Ziggo Open Society Award (de Ziggo Prijs voor de Open Samenleving). The prize is awarded to organizations or individuals who have clearly contributed through their ideas, initiatives or projects to an Open Society; a society in which everyone is included and has the opportunity to act, think and imagine, and in doing so, increases pluriformity and quality. In 2013, the Ziggo Open Society Award was won by Bits of Freedom, a Dutch digital rights organization that focuses on privacy and communications freedom in the digital age. The other finalists were NoXqs and Internet Protection Lab. According to the jury, the two runners-up also play an important role in Dutch (open) society. The focus that Bits of Freedom puts on protecting civil rights on the internet will continue to increase, and remain important, in the coming years. We hope that this award acts as both recognition and an additional incentive, the jury said following its decision. Bernard Dijkhuizen, Ziggo s CEO at the time, presented the award, a trophy and 15,000 to Tim Toornvliet of Bits of Freedom at the annual Ziggo Congres. Ziggo also plays an active role in government and industry initiatives and programmes that shape the present and future of our industry. As a vital member of the ECP (Electronic Commerce Platform), we participate in initiatives that promote internet safety and prevent abuse of the internet. Meldpunt Kinderporno The Meldpunt Kinderporno, (the Registration Centre for Child Pornography) is a foundation that fights against the distribution of child sex abuse on and through the internet. Ziggo financially supported the foundation in Unicef Kinderrechten Filmfestival Ziggo also supports the Unicef Rights of the Child Movie Festival (Unicef Kinderrechten Filmfestival), the biggest movie project for primary school children in the Netherlands. This project enables children, together with their school, to create their own movies on the 19

20 subject of the rights of children. Quality of content In 2013 we supported several initiatives that are aimed at enhancing the quality of content. A series of Debatlabb, a televised debate on Open Society topics hosted in Club Ziggo, was broadcast live via our event channel. As in 2012, we supported de Tegel (the most important annual award for Dutch journalism) together with the Nipkow-schijf. The Nipkow-schijf is an annual award given by Dutch media journalists to the best television programme, interview, radio broadcast and multimedia performance of the past season. DE TV-BEELDEN The Netherlands plays an important role in the international television industry. It is the third most successful country in terms of developing (successful) new TV formats, behind only the United Kingdom and the United States. Dutch television makers are known globally for the quality of their work, but in their own country these achievements are still under-exposed. DE TV-BEELDEN, a new Dutch television trade award through which industry producers and creators can honour each other s work annually, was established to redress this. Ziggo is a founding partner of DE TV-BEELDEN. Universiteit van Nederland In 2013 we joined forces with the University of the Netherlands (Universiteit van Nederland). This initiative, led by Alexander Klöpping and Marten Blankensteijn, provides the country s leading university professors with a platform to share their knowledge with a broader audience. The classes are free and are broadcast on Ziggo s events channel and over the internet. We believe these projects will not only stimulate the quality of broadcast content, but will also contribute to an Open Society. Our people Ziggo s direct sphere of influence is formed by its employees. Our employees enjoy a range of modern, flexible benefits, and are able to make choices that fit their personal priorities. Throughout the year the Company organizes internal meetings and events, both formal and informal, to exchange information and get together. Employees are increasingly taking the opportunity to do voluntary work, or to make donations to good causes. Ziggo is an inclusive employer, offering equal opportunities to everyone, irrespective of country of origin, beliefs, handicap, sexual orientation, gender or age. In 2013 we continued to invest in our people, ensuring our customers receive the best quality products and services and allowing our employees to lead rewarding and fulfilling lives, both at work and at home. Within the Company, employees have a personal budget that can be spent on items such as extra free days, a subscription to a gym or extra pension payments. In addition to the personal budget, we also offer opportunities for personal development through training courses and coaching programmes. Employee representation Ziggo is in frequent contact with its works council, targeting a level of transparency and cooperation beyond legal requirements. The relationship is constructive, professional and mutually beneficial. Ziggo supports Enactus, a non-profit platform for social entrepreneurialism and leadership development that is active in more than 1,500 schools and universities across 39 countries. Enactus and Ziggo aim to develop sustainable leadership among students by introducing them to social entrepreneurialism. Enactus students, together with key representatives from Ziggo, set up projects aimed at sustainably improving the living standards and circumstances of people less well off than themselves. At the end of 2013, Ziggo employees selected the Nationale Voedselbank (national food bank) as their charity of choice, donating 75,000. Sustainability Ziggo s approach to environmental sustainability rests on three pillars: energy conservation, material use and waste management. In the last quarter of 2012, we were the first company in the Netherlands to receive BREEAM-NL certification for one of our new data centres. BREEAM determines the sustainability performance of buildings, and the data centre was constructed to be environment friendly (all materials are reusable) and uses an optimal temperature management system. As a result, the new data centre consumes 40% less energy. In 2013, a total of seven data centres received BREEAM-NL certification. Ziggo is a member of The Green Grid. The Green Grid is a group of companies, government and educational institutions that aim to 20