British Sky Broadcasting Group plc Results for the Nine Months Ended March 31, 2001.Business Editors LONDON--(BUSINESS WIRE)--May 9, 2001 British Sky Broadcasting British Sky Broadcasting (BSkyB — formerly two companies, Sky Television and BSB) is a company that operates Sky Digital, a subscription television service in the UK and the Republic of Ireland. It produces TV content, and owns several TV channels. Group plc (NYSE NYSE See: New York Stock Exchange : BSY BSY Busy BSY British School of Yoga BSY Bit Sync BSY Busy Line ), the UK-based pay-television broadcasting group, today announced its results for the nine months ended March 31, 2001. Digital sales of 5.4 million to date 27% growth in revenues to (pound)1.7 billion ($2.4 billion) HIGHLIGHTS - Digital sales of 5.4 million to date - Record Q3 net DTH subscriber growth of 252,000 - Revenue increased by 27% to (pound)1.7 billion ($2.4 billion) - 95% of DTH subscribers now digital - EBITDA before exceptionals increases by 64% to(pound)140 million ($200 million) - Churn stable at less than 10% - BSkyB increases its stake in British Interactive Broadcasting Holdings to 80.1% Tony Ball, Chief Executive of British Sky Broadcasting Group plc, said: "The past three months have seen another strong performance from Sky digital, with subscribers, revenues and operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. all demonstrating significant year-on-year growth. Financially, as well as operationally, we continue to make real progress."
Enquiries:
Analysts/Investors:
Martin Stewart Tel: 020 7705 3000
Neil Chugani Tel: 020 7705 3837
James Cotton Tel: 020 7705 3718
E-mail: investor-relations@bskyb.com
Press:
Julian Eccles Tel: 020 7705 3267
Andrew Sholl Tel: 020 7705 3191
Vanessa Draper Tel: 020 7705 3090
E-mail: corporate.communications@bskyb.com
A conference call for US analysts will be held at 10:00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) today. Details of this call have been sent to US institutions and can be obtained from Patrick Lyon Lyon English Lyons City (pop., 1999: city, 445,452; metro. area, 1,348,932), east-central France. Located at the confluence of the Rhône and Saône rivers, it was founded as the Roman military colony Lugdunum in 43 BC (see at Taylor Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. Rafferty Rafferty or Rafferty's rules Noun, pl Austral & NZ slang no rules at all [origin unknown] on +1 212 889 4350. BSkyB BSkyB British Sky Broadcasting ADRs (each equal to six ordinary shares) trade on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol BSY. BSkyB ordinary shares are listed on the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. , and can be accessed on Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. under the symbol BSY.L, and on Quotron and Bloomberg Bloomberg A major global provider of 24-hour financial news and information including real-time and historic price data, financials data, trading news and analyst coverage, as well as general news and sports. under the symbol BSY. Additional information is available on BSkyB's home page:http://www.sky.com. BUSINESS REVIEW Operational At March 31, 2001 the total number of direct-to-home See DTH. ("DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. ") subscribers was 5,303,000 of which 95% were digital subscribers. A third quarter record net DTH subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. growth of 252,000 was achieved in the three months to March 31, 2001 ("the quarter"). Just 242,000 analog subscribers remain at March 31, 2001. Total subscribers to Sky's channels increased by 141,000 in the quarter to 9,891,000. The number of digital sales to May 8, 2001 was 5.4 million. The success of BSkyB's ("the Group's") program of transitioning analog customers means that the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the current analog service will occur, as previously announced, during the summer of 2001. Churn churn: see butter. for the year to date (annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. ) stands at 9.9%. Sky channels' share of viewing in all UK homes was 5.7%, up 12% on the nine months ended March 31, 2000 ("the comparable period"), in comparison to the 4% year-on-year fall in viewing of the core terrestrial Dealing with the earth. See terrestrial link. channels. Within digital satellite homes eight of the ten most popular non-terrestrial entertainment programs were broadcast on Sky One. Sky Movies' acquisition of the rights to the Star Wars films proved a popular success. On consecutive weeks, all four features attracted more than 1 million viewers VIEWERS. Persons appointed by the courts to see and examine certain matters, and make a report of the facts together with their opinion to the court. In practice they are usually appointed to lay out roads and the like. Vide Experts. each; the UK television premier of Star Wars: Episode One - The Phantom Menace MENACE. A threat; a declaration of an intention to cause evil to happen to another. 2. When menaces to do an injury to another have been made, the party making them may, in general, be held to bail to keep the peace; and, when followed by any inconvenience or drew an audience of more than 1.5 million individuals. Sky Sports continues to go from strength to strength. Recent rights acquisitions have included a new 5-year deal with the US PGA Tour The PGA Tour is an organization that operates the USA's main professional golf tours. It is headquartered in Ponte Vedra Beach, Florida, USA. Its name is officially rendered in all caps as “PGA TOUR". , which gives Sky Sports rights to live tour events until 2006, a new deal with Sports Network for live British and world boxing, and agreements for live coverage of England's next two overseas cricket cricket, sport cricket, ball-and-bat game played chiefly in Great Britain and the Commonwealth countries. Basic Rules Cricket is played by two teams of eleven on a level, closely cut oval "pitch" preferably measuring about 525 ft (160 m) tours. Financial Growth in the operating profitability of the Group continued to accelerate in the quarter. Operating profit before goodwill for the nine months ended March 31, 2001 ("the period") increased to (pound)97 million ($139 million), up 90% compared with (pound)51 million ($73 million) for the the comparable period. DTH revenues increased by (pound)270 million ($385 million) to (pound)1,114 million ($1,588 million) as a result of an increase of 31% in the average number of DTH subscribers, and growth in the average revenue per subscriber, excluding interactive revenue, from (pound)282 ($402) in the comparable period to (pound)289 ($412) for the nine months to March 31, 2001 (annualized). Higher wholesale prices and an increase in the average number of digital terrestrial ("DTT DTT Deloitte Touche Tohmatsu (Deloitte & Touch Global Operations) DTT Dithiothreitol (cytology reagent) DTT Digital Terrestrial Television DTT Discrete Trial Training ") subscribers were offset by a 5% decrease in average cable subscribers and the continued decline in the average number of premium channels taken by both cable and DTT subscribers. Consequently cable and DTT revenue declined slightly in the period to (pound)220 million ($314 million). The Group's advertising revenue remained, and continues to be, relatively buoyant Buoyant The term used to describe a commodities market where the prices generally rise with ease when there are considerable signals of strength. Notes: These types of markets can be very volatile as the prices are rapid to rise and fall with investor sentiment. , increasing by 16% on the comparable period to (pound)200 million ($285 million). This increase reflects the increased penetration The successful unauthorized breach of a security perimeter. See penetration test. of Sky's channels, which rose to 38% of UK TV homes, up from 33% in the comparable period. Interactive revenues for the period were (pound)60 million ($86 million), of which (pound)55 million ($78 million) related to betting, via the telephone, the PC and interactive television. Programming costs for the period increased by (pound)157 million ($224 million) to (pound)829 million ($1,182 million), principally as a result of higher movie costs due to the higher number of subscribers, but also due to an increase in the amount of original programming commissioned. Other operating costs operating costs npl → gastos mpl operacionales for the period increased by (pound)151 million ($215 million) to (pound)745 million ($1,062 million) with the first-time inclusion of (pound)80 million ($114 million) of costs related to interactive services (betting costs being the single largest element) and the increased cost of subscriber management reflecting the higher number of subscribers. Transmission costs remained approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. level for the third successive quarter as the cost savings of the approaching analog closure are realized. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the period before exceptional items increased by 64% from (pound)85 million ($121 million) to (pound)140 million ($200 million). The Group's share of the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of joint ventures increased significantly to (pound)175 million ($250 million) compared to (pound)83 million ($118 million) in the comparable period. The increase was almost wholly due to the inclusion of the Group's share of the operating losses of KirchPayTV ((pound)86 million) ($123 million) which were not accounted for in the comparable period. British Interactive Broadcasting Holdings Ltd's ("BiB") revenues for the period were (pound)56 million ($80 million) and operating expenditure was (pound)214 million ($305 million), of which (pound)110 million ($157 million) related to set top box subsidies. BiB's operating loss for the period was (pound)158 million ($225 million). The Group's share of the operating loss of BiB increased by (pound)11 million ($16 million) to (pound)86 million ($123 million) in the period as the Group accounted for BiB as a 32.5% joint venture until November November: see month. 1, 2000 from which date 100% of BiB's losses have been recognized. BiB figures are stated before the elimination of intercompany transactions Intercompany transaction Transaction carried out between two units of the same corporation. with BSkyB. These transactions will be eliminated following completion, when BiB will be consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: within the results of the Group. As part of a review of investments, the Group has made a general provision against its minority equity interests in new media companies. In the quarter this has led to a non-cash exceptional charge of (pound)16 million ($22 million) that is accounted for below operating profit. This takes the balance sheet carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Group's minority investments in new media companies to nil. After its share of the results of joint ventures, the Group made a loss before taxation of (pound)365 million ($521 million). The loss after tax in the period was (pound)367 million ($523 million). During the period there was a net cash outflow of (pound)416 million ($593 million) including (pound)118 million ($168 million) in relation to transitioning analog subscribers to digital, joint venture funding and capital expenditure of (pound)205 million ($292 million) and net interest payments of (pound)98 million ($140 million). Net debt at the end of the period was (pound)1,561 million ($2,225 million). Corporate On May 8, 2001 the Minister for Consumers and Corporate Affairs announced that he had accepted undertakings from the Group in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. a reference to the Competition Commission in respect of the Group's acquisition of the HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) , Matsushita and BT shareholdings in BiB. Regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel having now been obtained, BSkyB has completed the acquisition of the HSBC and Matsushita shareholdings in BiB. This takes BSkyB's stake in BiB to 80.1%. Following a strategic and efficiency review by BSkyB management, BSkyB will, in the quarter ending June June: see month. 30, 2001, take an exceptional restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of (pound)40 million and reduce Sky Interactive's ongoing cost base. A separate press release covering the completion of the BiB transaction has been issued this morning. On April 2, 2001 the Office of Fair Trading The Office of Fair Trading or OFT is a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator. notified the Group that after consideration it had concluded that BSkyB need not observe TO OBSERVE, civil law. To perform that which has been prescribed by some law or usage. Dig., 1, 3, 32. two undertakings it gave in 1996. The first undertaking was the need for Sky One to be on a rate card for wholesale purposes and the second was the need for BSkyB to provide and maintain separated wholesale and retail accounts. On April 30, 2001 Morton Morton, village (1990 pop. 13,799), Tazewell co., central Ill., in a grain-farming and livestock area; inc. 1877. Food is canned, and tractor parts, washing machines, and pottery are manufactured. Topfer resigned as a non-executive Director A non-executive director (NED, also NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. of the Group.
Appendix 1
Subscribers to Sky Channels
Prior Year
Q3 1999/00 Q1 2000/01 Q2 2000/01 Q3 2000/01
As at As at As at As at
31/3/00 30/9/00 31/12/00 31/3/01
DTH
Digital 2,751,000 4,083,000 4,669,000 5,061,000
Analog 1,405,000 640,000 382,000 242,000
---------- ---------- ---------- ----------
Total DTH 4,156,000 4,723,000 5,051,000 5,303,000
Cable 3,211,000 3,052,000 3,093,000 2,903,000
DTT 647,000 846,000 975,000 1,054,000
---------- ---------- ---------- ----------
Total UK 8,014,000 8,621,000 9,119,000 9,260,000
Cable - Eire 609,000 617,000 631,000 631,000
---------- ---------- ---------- ----------
Total UK & Eire 8,623,000 9,238,000 9,750,000 9,891,000
---------------
DTH Churn rate for
year-to-date 12.7% 9.8% 9.8% 9.9%
(annualized)
British Sky Broadcasting Group plc
Consolidated profit and loss account for the nine months ended March
31, 2001
Before 2000/2001
goodwill Goodwill Nine months
and and ended March
exceptional exceptional 31
items Items Total
$m(a) $m(a) $m(a)
Notes unaudited) (unaudited) (unaudited)
---------------------------------------
Revenue:
Group and
share of
joint
ventures 2,600.7 - 2,600.7
Less:
share of
joint
ventures'
revenue (218.5) - (218.5)
---------------------------------------
Group
revenue 1 2,382.2 - 2,382.2
Operating
expenses,
net 2 (2,243.6) (39.3) (2,282.9)
---------------------------------------
Operating
profit
(loss) 138.6 (39.3) 99.3
Share of
operating
results
of joint
ventures 3 (249.5) - (249.5)
Joint
ventures'
goodwill
amortization - (73.9) (73.9)
Loss on
sale of
fixed asset
investments - - -
Share of
joint
ventures'
loss on
sale of
fixed asset
investment - (99.1) (99.1)
Amounts
written off
investments - (57.0) (57.0)
---------------------------------------
Loss on
ordinary
activities
before
interest
and
taxation (110.9) (269.3) (380.2)
Interest
receivable
and similar
income 20.7 - 20.7
Interest
payable
and similar
charges (161.2) - (161.2)
---------------------------------------
Loss on
ordinary
activities before
taxation (251.4) (269.3) (520.7)
Taxation (2.1) - (2.1)
---------------------------------------
Loss on
ordinary
activities
after
taxation (253.5) (269.3) (522.8)
Equity
dividends -
paid and
proposed - - -
---------------------------------------
Retained
loss (253.5) (269.3) (522.8)
=======================================
Loss per
share -
basic and
diluted (13.8c) (14.5c) (28.4c)
Loss per
ADR -
basic and
diluted(b) (82.8c) (87.0c) (170.4c)
EBITDA
(before
exceptional
items) 199.6
Before 2000/2001 1999/2000 1999/2000
goodwill Goodwill Nine months Nine months Year
and and ended ended ended
exceptional exceptional March 31 March 31 June 30
items Items Total Total Total
(pound)m (pound)m (pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
------------------------------------------------------------
Revenue:
Group and
share of
joint
ventures 1,824.4 - 1,824.4 1,355.2 1,934.7
Less:
share of
joint
ventures'
revenue (153.3) - (153.3) (38.3) (87.7)
-----------------------------------------------------------
Group
revenue 1,671.1 - 1,671.1 1,316.9 1,847.0
Operating
expenses,
net (1,573.9) (27.6) (1,601.5) (1,265.8) (1,866.7)
-----------------------------------------------------------
Operating
profit
(loss) 97.2 (27.6) 69.6 51.1 (19.7)
Share of
operating
results
of joint
ventures (175.0) - (175.0) (82.5) (121.3)
Joint
ventures'
goodwill
amortization - (51.8) (51.8) - (14.4)
Loss on
sale of
fixed
asset
investments - - - (1.4) (1.4)
Share of
joint
ventures'
loss on
sale of
fixed
asset
investment - (69.5) (69.5) - (14.0)
Amounts
written
off
investments - (40.0) (40.0) - -
-----------------------------------------------------------
Loss on
ordinary
activities
before
interest
and
taxation (77.8) (188.9) (266.7) (32.8) (170.8)
Interest
receivable
and
similar
income 14.5 - 14.5 8.7 10.7
Interest
payable
and
similar
charges (113.1) - (113.1) (65.8) (102.6)
-----------------------------------------------------------
Loss on
ordinary
activities
before
taxation (176.4) (188.9) (365.3) (89.9) (262.7)
Taxation (1.5) - (1.5) 18.9 (8.8)
-----------------------------------------------------------
Loss on
ordinary
activities
after
taxation (177.9) (188.9) (366.8) (71.0) (271.5)
Equity
dividends -
paid and
proposed - - - - -
-----------------------------------------------------------
Retained
loss (177.9) (188.9) (366.8) (71.0) (271.5)
===========================================================
Loss per
share -
basic and
diluted (9.7p) (10.2p) (19.9p) (4.1p) (15.6p)
Loss per
ADR -
basic and
diluted(b) (58.2p) (61.2p) (119.4p) (24.6p) (93.6p)
EBITDA
(before
exceptional
items) 140.0 85.4 137.2
(a) US dollar equivalents are provided for reader convenience at the
March 30, 2001 exchange rate of (pound)1=$1.4255
(b) Each ADR represents six ordinary shares
British Sky Broadcasting Group plc
Consolidated profit and loss account for the three months ended March
31, 2001
2000/2001 2000/2001 1999/2000
Three months Three months Three months
ended March 31 ended March 31 ended March 31
Total Total Total
$m(a) (pound)m(a) (pound)m
(unaudited) (unaudited) (unaudited)
Revenue: Group and share
of joint ventures 907.2 636.4 480.6
Less: share of joint
ventures' turnover (73.1) (51.3) (13.4)
-----------------------------------------
Group revenue 834.1 585.1 467.2
Operating expenses, net (767.6) (538.5) (443.9)
-----------------------------------------
Operating profit before
goodwill 66.5 46.6 23.3
Goodwill amortization (13.8) (9.7) -
-----------------------------------------
Operating profit after
goodwill 52.7 36.9 23.3
Share of operating results
of joint ventures (108.9) (76.4) (30.6)
Joint ventures' goodwill
amortization (22.2) (15.6) -
Amounts written off
investments (22.1) (15.5) -
-----------------------------------------
Loss on ordinary activities
before interest and taxation (100.5) (70.6) (7.3)
Interest receivable and
similar income 6.4 4.5 3.3
Interest payable and
similar charges (55.6) (39.0) (24.4)
-----------------------------------------
Loss on ordinary activities
before taxation (149.7) (105.1) (28.4)
Taxation (2.3) (1.6) 6.0
-----------------------------------------
Loss on ordinary activities
after taxation (152.0) (106.7) (22.4)
Equity dividends
- paid and proposed - - -
-----------------------------------------
Retained loss (152.0) (106.7) (22.4)
-----------------------------------------
Loss per share
- basic and diluted (8.3c) (5.8p) (1.3p)
Loss per ADR
- basic and diluted(b) (49.6c) (34.8p) (7.8p)
(a) US dollar equivalents are provided for reader convenience at the
March 30, 2001 exchange rate of (pound)1: $1.4255
(b) Each ADR represents six ordinary shares
British Sky Broadcasting Group plc
1. Revenue
The Group's revenue, whilst deriving from one class of business, has
been analyzed as follows:
2000/2001 1999/2000 1999/2000
Nine months Nine months Year
ended ended ended
March 31 March 31 June 30
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
Direct-to-home subscribers 1,114.1 843.7 1,189.0
Cable and DTT subscribers 219.5 221.8 303.0
Advertising 200.1 172.3 242.3
Interactive(a) 60.2 3.0 4.6
Other 77.2 76.1 108.1
---------- ---------- ----------
1,671.1 1,316.9 1,847.0
========== ========== ==========
(a) Interactive includes income from internet, e-commerce, betting,
telephony and text services.
2. Operating expenses, net
2000/2001 1999/2000 1999/2000
Nine months Nine months Year
ended ended ended
March 31 March 31 June 30
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (audited)
Programming(b) 828.8 672.2 935.2
Transmission and related functions(b) 82.4 79.7 105.2
Marketing 287.7 266.3 381.3
Subscriber management 182.1 154.2 199.9
Administration 112.5 87.5 129.7
Interactive 80.4 5.9 10.4
---------- ---------- ----------
1,573.9 1,265.8 1,781.7
Goodwill amortization(c) 27.6 - -
Exceptional operating items - - 105.0
---------- ---------- ----------
1,601.5 1,265.8 1,866.7
========== ========== ==========
(b) The amounts shown are net of (pound)30.5 million (9 months ended
31 March 2000: (pound)29.8 million; full year (pound)51.3
million) receivable from the disposal of programming rights not
acquired for use by the Group, and (pound)43.8 million (9 months
ended 31 March 2000: (pound)47.2 million; full year (pound)61.3
million) in respect of the provision to third party broadcasters
of spare transponder capacity.
(c) Amortization of goodwill arising on the acquisition of Sports
Internet Group.
3. Share of operating results of joint ventures
This relates to the Group's equity share of the operating results of
joint ventures.
2000/2001 1999/2000 1999/2000
Nine months Nine months Year
ended ended ended
March 31 March 31 June 30
(pound)m (pound)m (pound)m
(unaudited) (unaudited) (unaudited)
KirchPayTV 85.9 - 11.0
British Interactive
Broadcasting ("BiB") 86.4 75.4 99.1
Programming joint ventures, net 2.7 7.1 11.2
---------- ---------- ----------
175.0 82.5 121.3
========== ========== ==========
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