Dutch cable operator Ziggo reported first-quarter revenues up 0.2 percent from the year before to EUR 387.8 million, despite a 5.8 percent decline in telephony revenues. Excluding 'other revenues', revenues advanced 1.8 percent. The consumer market pulled back (-0.6%) while the business market continued to grow (+11.7%).
CEO Bernard Dijkhuizen said churn remains high. Ziggo will therefore initiate new loyalty campaigns in Q2, with a strong focus on customer retention. The company will also focus on enhancing customer experience through new innovations and product enhancements. The roll-out of Ziggo WiFi Hotspots this year will enable converged services, adding mobility for customers.
Adjusted EBITDA lifted 3.0 percent to EUR 222.6 million, with the EBITDA margin up slightly to 57.4 percent, while the net profit increased to EUR 92.6 million or EUR 0.46 per share, from a loss of 14.5 million or 0.07 per share a year ago. The operating profit grew by 48 percent to EUR 155 million, partly on the back of no IPO costs this year. The net cash flow was up 8.3 percent from the year before to EUR 160.1 million. Ziggo said it completed its EUR 1.1 billion debt refinancing.
The number of All-in-1 bundle subscribers rose by 31,000 in the quarter, up 2.2 percent from Q4 and 8.3 percent year-on-year. Including the loss of 2,000 DIY triple place DIY customers, the company added 29,000 triple-play customers. All-in-1 bundle penetration reached 52.2 percent of Ziggo’s consumer customer base.
The cable operator added 24,000 internet subscribers, up 1.3 percent from Q4 and 5.0 percent from the year before, to a total 1.525 million. The number of digital subscribers went up by 4,000 to 2.260 million. Digital pay-TV revenue, including VoD, lifted 5.0 percent from the year earlier, despite the operator losing 20,000 customers in the quarter, to a total 909,000. It added 33,000 telephony customers for a total 1.525 million.
B2B operations expanded with the acquisition of Esprit Telecom but also recorded double-digit organic revenue growth, driven by the sale of business bundles focused on home offices and small businesses. Esprit Telecom generated revenues of EUR 37 million, with the acquisition valued at EUR 18 million. The takeover still has to get the approval of the Dutch Competition Authority (ACM).
In total, the number of RGUs reached 7.097 million, a rise of 5,000 (-17,000 on the consumer market, +11,000 on the business market). ARPU for the consumer market went higher by EUR 1.13 to EUR 42.34.
Ziggo reiterated its guidance for 2013 EBITDA up 2.5-3.5 percent, but cut the revenue outlook, saying it now expects revenue growth, excluding ‘other revenues', at the low end of EBITDA growth. It previously expected revenues to grow slightly faster than EBITDA. The company expects improved revenue momentum over the course of the year as marketing and retention initiatives take effect. Capex is expected at EUR 320-330 million. The operator will pay a final dividend over 2012 of EUR 180 million or EUR 0.90 per share and expects to make a 2013 interim dividend payment of EUR 190 million.
