-- EBITDA increases from minus EUR 1.8 Million to EUR 22.7
million
-- EBITDA of EUR 32 million before one-off costs for IPO
-- Total revenue grows by 10.3 percent to EUR 247.4 million
-- Revenue in core business with program subscriptions rises
18.2 percent
-- Number of subscribers climbs to 3.3 million -- an increase of
11.6 percent year on year
-- Balance sheet substantially improved: net debt decreases to
EUR 84 million, ratio of equity to total assets rises to 58
percent
-- Kofler: "All operating targets achieved -- focus on innovation
and growth in the 2nd half of 2005"
MUNICH, Germany, May 19, 2005 (PRIMEZONE) -- In the first quarter of 2005 Premiere (Other OTC:PMREF) achieved strong growth in revenue and earnings. The German Pay-TV-operator was able to show revenue growth of 10.3 percent -- from EUR 224.2 million in the first quarter of 2004 to EUR 247.4 million in the first quarter of 2005. Revenue from the core business of program subscriptions rose by 18.2 percent to EUR 221.4 million (first quarter of 2004: EUR 187.3 million). The operating costs remained stable in the reporting period at EUR 224.7 million (EUR 226.0 million), despite the increase in subscribers. The EBITDA (earnings before interest, taxes, depreciation and amortization) improved from minus EUR 1.8 million to EUR 22.7 million. Without one-off costs of EUR 9 million for the IPO, Premiere achieved an adjusted EBITDA of EUR 32 million in first quarter of 2005.
The number of subscribers rose in the first three months of 2005 by 51,508 to 3,298,680. In a year-on-year comparison (March 31), Premiere increased its total of subscribers by 343,421 -- representing an increase of 11.6 percent.
Dr. Georg Kofler, CEO of Premiere AG: "Premiere has achieved all its operative targets in the first quarter of 2005. The growth in revenue of 10 percent is well above the average for the German media sector, which is mostly reporting stagnating or falling revenue trends. The strong growth of 18 percent in the core business of program subscriptions is especially encouraging, because this is where the greatest margin potentials are to be found. The adjusted EBITDA of EUR 32 million shows that Premiere is becoming increasingly profitable."
18 percent growth in the core business
-- Total revenue grows by 10.3 percent to EUR 247.4 million
-- Revenues from program subscriptions rise to EUR 221.4
million -- up 18.2 percent
-- Pay-per-view revenues climb by 52.8 percent
-- ARPU in the core business rises by 5.9 percent
The core business of program subscriptions, pay-per-view and advertising are increasingly dominating Premiere's revenue mix. Overall revenue grew in the first quarter of 2005 by 10.3 percent to EUR 247.4 million (EUR 224.2 million). Revenues in the core business increased by 18.2 percent to EUR 235.1 million (EUR 198.9 million). As a result, Premiere earned 95 percent of its total revenue in its core business. In the same period in prior year, the core business accounted for 89 percent, and in the first quarter of 2003 for just 74 percent of total revenues.
Revenues from program subscriptions climbed by 18.2 percent to EUR 221.4 million (EUR 187.3 million). The pay-per-view business increased by 52.8 percent to EUR 8.3 million (EUR 5.4 million). Revenues from advertising remained almost unchanged quarter on quarter at EUR 5.5 million (EUR 6.2 million), although revenues from print advertising disappeared altogether with the discontinuation of Premiere's own TV guide in spring 2004. This sales shortfall was, however, almost completely offset by increased revenues from TV advertising and direct marketing.
The average annual revenue per user (ARPU) rose to EUR 287 in the first quarter of 2005 in the core business. This is EUR 16 (5.9 percent) more than in the first quarter of the previous year (EUR 271).
Revenues from the hardware segment, which is not part of the core business, continued to decline as planned. Income from rentals and sales of receivers fell by 42.4 percent to EUR 10.3 million (EUR 17.9 million).
The strategic withdrawal from the technology sector was completed at the end of the 2004 with the sale of the subsidiary DPC Digital Playout Center GmbH. Other revenues fell accordingly to EUR 2.0 million (EUR 7.4 million).
Healthy cost structure
-- Overall operating costs at a stable level -- Higher programming expenditure offset by savings in other areas
Premiere's cost structure remained stable overall in the first quarter of 2005 at EUR 224.7 million (EUR 226.0 million). There was, however, an increase in program expenditure of about EUR 15 million from EUR 119.2 million to EUR 135.7 million which was largely due to the new contracts signed with the soccer leagues in Germany and Austria last year. On the other hand, considerable cost reductions were made with the discontinuation of Premiere's own TV guide magazine and through efficiency gains in customer management. These made it possible to offset the increase in programming costs. Transmission costs and expenses on receivers remained stable.
Marketing and sales expenses fell due to a change in the mix of sales channels and marketing focus by EUR 5.1 million to EUR 25.7 million (EUR 30.8 million). The subscriber acquisition cost (SAC) was EUR 169 per subscriber, 8 percent below the SAC average for 2004 (EUR 184).
The deprecation on operating assets decreased from EUR 8.2 million to EUR 7.0 million. Amortization of intangible assets was EUR 12.1 million, as in the previous year.
Results improved at all reporting levels
-- EBITDA jumps from minus EUR 1.8 million to EUR 22.7 million -- EBITDA before IPO costs at EUR 32 million -- EBIT increases from negative EUR 22 million to EUR 3.7 million -- Interest expense reduced from EUR 19.1 million to EUR 12.3 million
Following small EBITDA loss in the same quarter last year, Premiere's operating business is now posting profits. In the first quarter of 2005, EBITDA reached EUR 22.7 million, an improvement of EUR 24.6 million over the previous year's time period (minus EUR 1.8 million). Adjusted for the one-off costs for IPO totaling EUR 9 million, EBITDA amounted to EUR 32 million. Premiere's EBIT also turned positive. After depreciation and before interest and taxes, the company generated a positive EBIT of EUR 3.7 million. In the same quarter last year, EBIT losses amounted to EUR 22 million. Interest expense fell by 35.5 percent from EUR 19.1 to EUR 12.3 million. Following the reduction in financial debt in March 2005, the Company expects further reductions in interest expense in the coming quarters.
Premiere's net result for the first quarter is minus EUR 3.4 million (minus EUR 41.4 million). Based on the profit and loss statement, the result per share amounts to minus EUR 0.05. This is an improvement on first quarter previous year of 94.7 percent (minus EUR 0.94).
Strong balance sheet following successful IPO
-- Equity to total assets rises to 58 percent -- Net debt reduced to EUR 84 million
Premiere AG's balance sheet has improved substantially following its successful IPO and its new financing. The capital increase has pushed the share capital up by EUR 326.6 million to EUR 745.5 million (December 31, 2004: EUR 418.9 million). As at December 31, 2005, the equity to total assets stood at 58.1 percent (32.3 percent).
The IPO saw a complete refinancing on more favorable terms. Existing loans were repaid using the IPO proceeds and the drawdown of the new loan facility. Overall the net debt decreased from EUR 370.2 to EUR 83.6 million between December 31, 2004 and March 31, 2005.
Increasing acceptance of Premiere's programming
-- Audience share in subscriber households increases to 24.3% -- Programming appeal further enhanced
In the first quarter, Premiere's audience share in TV households with Premiere subscriptions rose to 24.3 percent (24.0%). With the start of DISCOVERY GESCHICHTE on March 31, 2005, Premiere launched a new history documentary channel. In the area of sports, Premiere acquired a rights package for the Spanish Primera division in the first quarter. Until the end of the 2005/2006 season, Premiere will show at least one match a week from Spain's top soccer division live and exclusive on German television. Also new is the live reporting on the Deutsche Tourenwagen Masters (DTM -- German Touring Cars). The "Big Brother" channel, which was successfully launched in the first quarter of last year, will also be continued. On the pay-per-view side, Premiere expanded the adult entertainment programming for its independent BLUE MOVIE brand.
2005 outlook: Premiere continues on track for growth
-- New sport portal starting in June
-- Premiere digital recorder (PDR) with video-on-demand service
starting in July
-- HDTV programming starting in November
-- Marketing for premium subscriptions concentrated in the second
half of 2005
Premiere will continue its positive business performance through 2005. Growth will pick up momentum in the second half-year of 2005, especially in the fourth quarter. With a series of innovations, Premiere will further consolidate its unique position in the German TV market.
Starting on June 4, Premiere will break new ground in digital sports television: the PREMIERE SPORT portal will give sports fans a one-of-a-kind TV experience. Subscribers will be able to view all of Premiere's sports programs on a single gateway page. The PREMIERE SPORT portal with its modern picture-in-picture format will give viewers a clear overview of all sporting events currently on-air. Premiere will be able to broadcast up to 15 sports events parallel, which has never been seen before on German television.
In July, PREMIERE DIREKT+ will be launched, a new video-on-demand service available using a normal TV set in your living room. The service offers Premiere subscribers a choice of up to 30 films, from current blockbusters to adult entertainment, updated weekly. The films are loaded onto the hard drive of a Premiere digital recorder (PDR) overnight and stored in several, easy to understand categories. From this home-based Premiere video library, viewers can for a fee directly order the film of their choice and watch it immediately. Initially, PREMIERE DIREKT+ and the new PDR will only be available for subscribers with satellite reception.
The first program package to be broadcast in high-resolution HDTV format is scheduled to be launched in November 2005. Premiere subscribers will be able to watch films, documentaries and live sporting events on three channels in unprecedented picture quality. The programs will be digitally broadcast via ASTRA satellite. Premiere also has plans to transmit its HDTV programming by cable.
Kofler: "In 2005, Premiere will further enhance the USPs that differentiate it against free-to-air broadcasters. We will bring life to the Premiere brand with its new positioning as 'First Class Television'. We are launching an innovation campaign that will leave its mark in the second half of 2005. This will generate additional interest in digital television and in Premiere. All our innovations will enhance Premiere's image as the leading TV brand for premium entertainment. We believe the most convincing products are those can be understood at first glance. The PREMIERE SPORT portal, PREMIERE DIREKT+ and HDTV all fulfill this requirement. They are going to be eye-catchers, saving abstract arguments about the advantages of digital television. Due to this innovation strategy, we will concentrate our marketing and sales activities in the second half of 2005, where the marketing focus will be on premium subscriptions."
Key figures 1st quarter 2005
http://www.directnews.de/servlets/LoadBinaryServlet/669641/key_figures.pdf
This press release is available on the Internet at info.premiere.de.
This press release contains forward-looking statements based on the currently held beliefs and assumptions of the management of Premiere AG, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of Premiere AG, or media industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. Premiere AG disclaims any obligation to update these forward-looking statements to reflect future events or developments.