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Kabel Deutschland announces record results for fiscal 2009/2010

Kabel Deutschland Holding AG (KDG), Germany’s largest cable operator, posted further strong growth in revenue generating units (RGU), revenues and earnings in fiscal 2009/2010 (April 1, 2009 through March 31, 2010).

Sharp rise in revenues, earnings and cash flow

Against a difficult economic environment the Company, which completed its IPO on March 22, 2010, reported a sharp rise in revenues and earnings. Revenues were up nearly 10% to €1,502 million (previous year €1,370 million) and adjusted EBITDA rose 15.4% to €659.1 million (previous year €570.6 million). The company continued to make significant investments (capex) in its kabel internet and customer acquisition, spending a total of €327.2 million, compared to €373 million the previous year. Operating free cash flow (EBITDA minus capex) was €331.9 million, up 68% from the previous year’s €197.6 million. Net result for the year amounted to a loss of €45.3 million, a significant improvement on the previous year’s loss of €144.3 million.

Internet and Phone as growth drivers

Kabel Deutschland saw particularly good growth in Internet and Phone products. The number of Internet and phone RGUs rose almost 40% to 1,973,000 (previous year: 1,418,000). These subscriptions were taken out by 1,097,000 subscribers (previous year 806,000), an increase of 36.1%. Internet and Phone products contributed considerably to the Company’s success. The number of Premium TV RGUs increased by 11.5% to 1,073,000 units (previous year 963,000 RGUs).

Kabel Deutschland Recent Developments

Kabel Deutschland Recent Developments

Total number of RGUs up by 421,000

The total number of RGUs rose to 12.05 million, from 11.63 million the previous year. The profitable Premium TV, Internet and Phone products accounted for 25.3% of these, up from the previous year’s 20.5%. At the end of the fiscal year on March 31, 2010, the company had a total of 8.9 million customers. “The steady growth story at Kabel Deutschland continues. The investments in past years are paying off. Customer demand for our competitive products remains strong. This is reflected in the record figures we have announced today. We are delighted to be reporting numbers like this less than three months after our successful IPO. Joining the MDAX confirms the strong position we enjoy in the capital markets,” said CEO Dr. Adrian v. Hammerstein. On June 4, 2010 Deutsche Börse decided that Kabel Deutschland will join the MDAX as of June 21, 2010.

Monthly ARPU rises again

Total blended monthly ARPU per subscriber (ARPU) was up significantly to €12.13 in fiscal year 2009/2010, from €11.06 the previous year. The percentage of customers subscribing to more than one Kabel Deutschland product also increased again: at the end of fiscal year 2009/2010 the average subscriber booked 1.35 RGUs (previous year 1.27). In the fourth quarter of the fiscal year, total blended monthly ARPU per subscriber hit €12.64, compared to €11.43 the previous year.

Leverage ratio falls sharply

Kabel Deutschland cut net debt to €2,866 million in the fiscal year just ended resulting in a leverage ratio of 4.3x EBITDA for 2009/2010. In the previous year net debt was €3,020 million resulting in a leverage ratio of 5.3x EBITDA for fiscal 2008/2009.
Outlook. In the current fiscal year 2010/2011 the Management Board has decided to concentrate on innovative product offerings, customer focus and cost control. For the current fiscal year 2010/2011 the Management Board is expecting revenue growth of 6.5-7% and an adjusted EBITDA of €715-725 million. Capex is anticipated to be between €350 and €360 million. The leverage ratio is forecasted to be below 4x EBITDA by the end of the fiscal year.

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