YouSee

YouSee

Operating review

YouSee continued its strong performance with double-digit growth rates in revenue and EBITDA of 11.5% and 18.6%, respectively. This was achieved primarily through an increased number of RGUs within all product groups in 2010 - TV, broadband and telephony - and increased ARPU in most product groups, while costs were contained.

The increased ARPU for YouSee Clear is due to higher prices, while increased broadband ARPU is due to customers subscribing to higher bandwidths on average. The overall ARPU was significantly affected by customers' increased access to digital add-on services through the products YouSee Plus and Web-TV which has led to strong growth in usage of add-on TV services (e.g. video-on-demand). More than 420,000 movies were rented by YouSee's customers in 2010, five times more than in 2009.

KPI development 2009-2010

YouSee had 1,818,000 RGUs at the end of 2010, up 3.0% compared with the end of 2009 [1].

  • The number of Pay-TV RGUs increased by 2.8%, while ARPU from YouSee Clear and YouSee Plus increased from DKK 177 to DKK 188 per month and DKK 100 to DKK 103 per month from 2009 to 2010, respectively, due mainly to customers' increased demand for content offered and add-on products.
  • Landline voice RGUs grew by 7.0%, due mainly to customers migrating from traditional landline telephony to VoIP. Since 91% of YouSee's landline voice RGUs subscribe to VoIP and only 9% to PSTN, the migration trend results in RGU growth in YouSee.
  • Broadband RGUs grew by 2.5%, resulting from both organic growth and the acquisition of Nordit, while ARPU increased slightly from DKK 167 per month in 2009 to DKK 169 in 2010.

Financial review

Revenue

2009-2010

Revenue in YouSee rose by DKK 415m, or 11.5%, to DKK 4,012m.

  • Revenue from YouSee Clear increased by DKK 213m, or 8.8%, while revenue from YouSee Plus rose by DKK 47m, or 31.3%. Both related primarily to more RGUs and higher ARPU.
  • Revenue from internet services and landline telephony soared by DKK 92m, or 12.7% and DKK 26m, or 36.1%, respectively, as a consequence of more RGUs.
  • Other revenue in YouSee increased by DKK 37m, or 17.1%, primarily as a result of increased intra-group revenue from Consumer due to the popularity of TDC TV, which was only partly offset by decreased revenue from YouSee's installation services.

2008-2009

In 2009, YouSee's revenue rose by DKK 409m, or 12.8%, to DKK 3,597m.

  • Revenue from YouSee Clear increased by DKK 222m or 10.0%, while revenue from YouSee Plus increased by DKK 50m, or 50.0%. Both related primarily to more RGUs and higher ARPU. The partial divestment of Connect Partner affected revenue negatively.
  • Revenue from internet services and landline telephony increased by DKK 85m, or 13.3% and DKK 18m, or 33.3%, respectively, which resulted primarily from more RGUs, which was due mainly to the acquisition of A+.
  • YouSee's Other revenue increased by DKK 34m, or 18.6%, which was due to increased intra-group revenue related to TDC TV that was partly offset by decreased revenue from YouSee's installation services.

Gross profit

2009-2010

Gross profit in YouSee was DKK 2,357m, up by DKK 285m, or 13.8%.

  • The growth related primarily to the increased activity in all product areas including the acquisition of A+, as well as the higher margin per YouSee Clear customer.
  • The gross profit margin in YouSee increased from 57.6% in 2009 to 58.7% in 2010.

2008-2009

In 2009, YouSee's gross profit rose by DKK 228m, or 12.4%, to DKK 2,072m.

  • The increase was due to increased activity in all product areas, incl. the acquisition of A+, and a higher margin per YouSee Clear customer.
  • YouSee's gross profit margin remained stable (at 57.8% in 2008 compared with 57.6% in 2009), reflecting the increase in revenue being offset by higher programme content costs.

EBITDA

2009-2010

EBITDA in YouSee rose by DKK 212m, or 18.6%, to DKK 1,353m. The EBITDA margin increased from 31.7% in 2009 to 33.7% in 2010.

  • The EBITDA increase was due mainly to the increase in gross profit, which was only partly offset by increased wages, salaries and pension costs related to a rise in the average wage per full-time employee equivalent, as well as higher property costs, increased marketing spending and higher provisions for bad debts.

2008-2009

In 2009, YouSee's EBITDA increased by DKK 187m, or 19.6%, to DKK 1,141m. YouSee's EBITDA margin increased from 29.9% in 2008 to 31.7% in 2009.

  • The increase in EBITDA reflected the rise in gross profit, but was partly offset by higher wages, salaries and pension costs resulting from the acquisition of A+.
    Selected financial and operational data Excluding special items
    YouSee 2010 2009 2008 Change in % 2010 vs. 2009 Change in % 2009 vs. 2008
    DKKm
    Revenue 4,012 3,597 3,188 11.5 12.8
       YouSee Clear 2,646 2,433 2,211 8.8 10.0
       YouSee Plus 197 150 100 31.3 50.0
       Internet services 817 725 640 12.7 13.3
       Landline telephony 98 72 54 36.1 33.3
       Other¹ 254 217 183 17.1 18.6
    Transmission costs and cost of goods sold (1,655) (1,525) (1,344) (8.5) (13.5)
    Gross profit 2,357 2,072 1,844 13.8 12.4
    Other external expenses (467) (429) (430) (8.9) 0.2
    Wages, salaries and pension costs (538) (503) (467) (7.0) (7.7)
    Other income and expenses 1 1 7 - (85.7)
    EBITDA 1,353 1,141 954 18.6 19.6
    Gross profit margin % 58.7 57.6 57.8 - -
    EBITDA margin % 33.7 31.7 29.9 - -
    Adjusted revenue² DKKm 4,012 3,685 3,338 8.9 10.4
    Adjusted EBITDA³ DKKm 1,353 1,149 957 17.8 20.1
    RGU base ('000)
    TV 1,336 1,299 1,218 2.8 6.7
       - YouSee Clear 1,176 1,153 1,113 2.0 3.6
       - YouSee Plus4 160 146 105 9.6 39.0
    Internet 403 393 323 2.5 21.7
    Landline 76 71 47 7.0 51.1
    Mobile broadband 3 2 - 50.0 -
    RGU base, total 1,818 1,765 1,588 3.0 11.1
    ARPU (year-average) DKK / month
    Landline internet 169 167 168 1.2 (0.6)
    TV, total 202 188 173 7.4 8.7
       YouSee Clear 188 177 166 6.2 6.6
       YouSee Plus 103 100 89 3.0 12.4
    Total ARPU 268 248 227 8.1 9.3
    Other KPIs
    Homes passed ('000) 1,454 1,401 1,333 3.8 5.1
    Penetration % 81 81 84 - -
    RGU per subscriber # 1.54 1.53 1.43 - -
    FTEs
    Number of FTEs (EoY) 1,231 1,265 1,174 (2.7) 7.8
    Average number of FTEs (YTD) 1,245 1,217 1,158 2.3 5.1
    1. Includes installation fees and TDC TV.
    2. Revenue for 2009-2010 has been adjusted for the acquisitions of A+ and Nordit. Revenue for 2008-2009 was adjusted for the acquisition of A+ and the partial divestment of Connect Partners.
    3. EBITDA for 2009-2010 has been adjusted for the acquisition of A+. EBITDA for 2008-2009 was adjusted for the acquisitions of A+ and Køge City Net and the partial divestment of Connect Partners.
    4. Digital add-on product
  1. At the end of 2010, YouSee's subsidiary, FastTV, and a total of 10,000 RGUs, were transferred to Consumer.
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