VodafoneZiggo has published its first quarter preliminary results. The full report will be published before the end of May. The revenues in the first quarter of 2017 dropped by 2 percent to EUR 1.018 billion, on a pro forma basis. The operating result dropped by 4.8 percent and the operating income by 30 percent. The numbers correspond mostly with earlier results published by Ziggo and Vodafone NL, with some exceptions (e.g. in postpaid numbers). In the fixed segment they lost 18,300 customers, ending with 3.960 million, while in mobile they lost 52,200 customers ending with 5.073 million.
Fixed revenues were unchanged, while those from mobile (consumer and SOHO) dropped by 7 percent. Business revenues from fixed and mobile increased by 1 percent. Regulation caused a loss of EUR 6 million, on a total annual loss of EUR 24 million. Management also sees competition as a reason for the declines and expects that to continue in the coming quarters.
The outlook for 2017 contains an operating result (OCF or EBITDA) of EUR 1.65 billion, after paying shareholders and integration costs of EUR 30 million. The ratio between investments (capex) and revenue should be a percentage “in the low twenties”. The shareholder payment has been budgeted at a minimum of EUR 500 million. Expected cost savings remain at EUR 210 million per year, of which OPEX should accounts for EUR 180 million. Management said they had a “fast start” with the cost savings and intends to speed it up. The original aim was in 2021.
Fixed
The most important statistics on the fixed side continue on those of the old Ziggo. Below are the growth figures for the first quarter:
- Homes passed: an increase of 13,200 to 7.103 million
- Customers: a drop of 18,300 to 3.960 million. ARPU came to EUR 46.09 per month (last year EUR 44.88 but last quarter EUR 46.18)
- RGUs: a decline of 4,800 to 9.685 million. This equates to 2.45 per customer (last year 2.39)
- Basic video (analogue TV only): a decrease of 18,100 to 619,300
- Enhanced video (digital and analogue TV): an increase of 200 to 3.338 million. The number of Horizon boxes grew by 80,000 to 1.134 million and the number of Horizon Go users increased by 57,000 to 2.539 million
- Internet: a growth of 10,400 to 3.189 million
- Fixed telephony: grew by 2,700 to 2.539 million
Mobile
The mobile statistics mostly match those of its predecessors Vodafone NL and Ziggo Mobiel, a MVNO on Vodafone’s network. The total number of mobile customers decreased by 52,000 to 5.073 million.- Postpaid: a growth of 7,600 to 4.067 million. ARPU dropped to EUR 27.45 (last year EUR 29.30). According to management the growth was impaired by the sale of Vodafone Thuis (“as bundled customers are able to migrate to a new provider”), otherwise there would have been an increase of 16,000 customers.
- Prepaid: a drop of 59,800 to 1.006 million. ARPU declined to EUR 3.18 (last year EUR 4.05).
Financials
Lastly, the financial details:
- Revenues: -2.3 percent to EUR 1.018 billion, of which cable at EUR 548 million and mobile -7.1 percent at EUR 302 million. Business revenues increased by 0.9 percent to EUR 108 million, other revenues declined by 2.5 percent to EUR 59.7 million.
- EBITDA (or OCF) came to EUR 431 million (-5.9%)
- Operating income (EBIT) came to EUR 53.2 million (-30%)
- Capex was down by 38 percent to EUR 156 million. It was mostly spent on CPE (such as the Horizon box) and capacity expansion, both at around EUR 71.5 million
- Free cash flow (defined as Ebitda minus capex) stood at EUR 275 million, compared to EUR 208 a year ago
- Total borrowed capital stood at EUR 10.335 billion on 31st March 2017, a drop of EUR 206 million compared to the end of 2016
