1Q12 RESULTS PRESENTATION 10 MAY 2012
Disclaimer This presentation contains forward looking information, including statements which constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and assumptions of our management and on information available to management only as of the date such statements were made. Forward-looking statements include (a) information concerning strategy, possible or assumed future results of our operations, earnings, industry conditions, demand and pricing for our products and other aspects of our business, possible or future payment of dividends and share buy back program; and (b) statements that are preceded by, followed by or include the words “ believes ” , “ expects ” , “ anticipates ” , “ intends ” , “ is confident ” , “ plans ” , “ estimates ” , “ may ” , “ might ” , “ could ” , “ would ” , and the negatives of such terms or similar expressions. These statements are not guarantees of future performance and are subject to factors, risks and uncertainties that could cause the assumptions and beliefs upon which the forwarding looking statements were based to substantially differ from the expectation predicted herein. These factors, risks and uncertainties include, but are not limited to, changes in demand for the company ’ s services, technological changes, the effects of competition, telecommunications sector conditions, changes in regulation and economic conditions. Further, certain forward looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from the plans, strategy, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements. Additionally, some of these statements refer to board proposals to be submitted to ZON - Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. ( “ Multimedia ” or “ ZON ” ) AGM and subject to (i) its approval by Multimedia ’ s shareholders, (ii) the market conditions and (iii) the ZON ’ s financial and accounting position as revealed in the financial statements approved by Multimedia ’ s AGM. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to provide reasons why actual results may differ. You are cautioned not to place undue reliance on any forward-looking statements. ZON Multimedia is exempt from filing periodic reports with the United States Securities and Exchange Commission ( “ SEC ” ) pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, as amended. The SEC file number for PT Multimedia ’ s exemption is No. 82-5059. Under this exemption, ZON Multimedia is required to post on its website English language translations, versions or summaries of certain information that it has made or is required to make public in Portugal, has filed or is required to file with the regulated market Eurolist by Euronext Lisbon or has distributed or is required to distribute to its security holders. This presentation is not an offer to sell or a solicitation of an offer to buy any securities.
1Q12 Highlights Very resillient core Triple Play business despite tough macro headwinds Efforts to contain costs and CAPEX are evident in solid financial performance New growth options beginning to show interesting results 3
Very encouraging RGU growth Pay TV – Cable Net Adds RGU Net Adds [Thousands] [Thousands] 65.8 +30 58.5 +20 43.8 33.9 +10 31.5 +0 -10 -20 1Q11 2Q11 3Q11 4Q11 1Q12 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Strongest quarter since 2010 in RGU Record growth in cable with 26 growth with 65.8 thousand net adds thousand net adds 4
Good take-up of high-end IRIS bundles and entry-level offers Triple Play Customers [Thousands] 716 thousand Triple Play customers, up 715.7 77 0 666.0 15 0% 67 0 7.5% yoy 536.7 59.4% 13 0% 57 0 57.6% 11 0% 47 0 120 thousand IRIS customers, 10% of 37 0 90 % 45.6% cable customer base 27 0 70 % 17 0 50 % 70 Strong take-up of entry-level bundles with - 30 30 % 1Q10 1Q11 1Q12 analogue switch-off 5
Robust net additions in Broadband and Fixed Voice Broadband Subscribers Fixed Voice Subscribers [Thousands, % of Penetration of Cable Base] [Thousands; % of Penetration of Cable Base] 748.6 921.4 80 70 % 1, 00 0 85 % 704.7 807.5 90 0 80 % 65 % 635.4 70 80 0 75 % 646.1 60 % 62.1% 61.0% 70 0 74.9% 60 70 % 55 % 60 0 68.2% 65 % 54.0% 50 50 % 50 0 60 % 40 0 45 % 40 55 % 30 0 40 % 54.3% 50 % 20 0 30 35 % 45 % 10 0 20 30 % 00 40 % 1Q10 1Q11 1Q12 1Q10 1Q11 1Q12 Broadband Net Adds of 9.4 thousand Fixed Voice Net Adds of 37.5 to 749 thousand subs thousand to 921.4 thousand subs 62.1% penetration of customer base 74.9% penetration of customer base 53% offers greater than 20 Mbps Huge success of new fixed voice app and 32% higher or equal to 30 Mbps for free fixed line calls out of the ZON Online #1 in Portuguese App home 6 store
Resilience of Basic ARPU Basic, Premium and Blended ARPU [1Q11 = Base 1] Basic ARPU from core TV, BB and Voice services increased 0.6% yoy 1.10 1.05 +0.6% Adjusting for the impact of entry level 1.00 offers, basic ARPU would have increased 0.95 -2.2% by 2.4%. 0.90 -15.3% 0.85 Success of lower ARPU, entry level, 0.80 offers and continued pressure from 1Q11 2Q11 3Q11 4Q11 1Q12 discretionary premium ARPU (-15.3%) led Blended ARPU Basic ARPU Premium ARPU to decline in Blended ARPU of 2.2% 7
Cinema Exhibition: Outperforming the market in a tough year Cinema tickets sold and revenue per ticket 1Q12 Performance of Gross Revenues and Attendance [Thousands, Euros] [%] 30 00 07 2,372 2,260 07 25 00 2,094 2,016 06 1,725 200 06 15 00 05 5.1 4.9 4.8 05 4.8 4.7 10 00 -12.8% 04 -14.5% -14.6% -14.9% 50 0 04 0 03 1Q11 2Q11 3Q11 4Q11 1Q12 Gross Revenue Attendance Tickets Sold Avg. Revenue Per Ticket ZON Market Average revenue per ticket: + 2.1% in 1Q12 Cinema Exhibition gross revenues were down 12.8% in 1Q12, with the market as a whole falling by 14.6% yoy 8 Source: ZON, ICA – Gross Revenue Data adjusted for VAT rate change in cinema tickets.
Audiovisuals: Maintaining clear leadership Cinema Distribution gross revenues market share 1Q12 [%] ZON distributed 4 of the Top 10 movies Others shown in cinemas in Portugal in 1Q12 13.3% Big 46% market share of cinema distribution Picture 2 ZON gross revenues 16.4% 46.0% New distribution agreements established with Universal for home video and with MGM Studios for both theatrical and Columbia 24.3% home video distribution 9 9 Source: ZON, ICA
ZAP – posting good results in Angola ZAP Stores ZAP Subscribers [Thousands] 13 12 8 2 1Q11 2Q11 3Q11 4Q11 1Q12 June December June December 2010 2010 2011 2011 ZAP – the most Growing distribution network Very strong operational recognized brand in the performance 13 own stores market Over 500 agents / points EBITDA breakeven reached of sale Strong focus on in 1Q12 Door-to-door sales force Portuguese Language of 200 people in Angola content 10
Solid revenue performance Consolidated Operating Revenues Yoy change in Pay TV, BB and Voice Revenues [Millions of Euros] [%] +0.0% 2% 1.5% 214.2 214.1 1% 0% -1% -1.9% -2% -2.5% -3% -2.8% -3.0% -4% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 1Q12 Flat consolidated revenue performance yoy Proportionate consolidation of Angola JV in 1Q12 (6.4 million euros) Slowdown in pace of decline of Triple Play revenues 11 11
Growth in underlying core ARPU revenues ARPU Revenues Growth ARPU Revenues split [1Q11 = Base 1] [%] 1.05 +1.8% 1.00 -1.0% 15% 17% 0.95 0.90 85% 83% -14.3% 0.85 0.80 1Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Basic Revenues Premium Revenues Total Basic Premium Basic ARPU revenue growth of 1.8% Premium revenues down 14.3% yoy putting pressure on total revenues Premium revenues now represent 15% of ARPU revenues down from 17% in 1Q11 12 12
Solid Audiovisuals revenues; pressure on Cinema revenues Cinema Revenues Audiovisuals Revenues [Millions of Euros] [Millions of Euros] (13.7)% +0.5% 17.1 17.1 13.6 11.8 1Q11 1Q12 1Q11 1Q12 Cinema revenues affected by combination of: • Macro pressure and consumer environment • VAT increase (6% to 13%) on cinema tickets • Fewer blockbuster and 3D movies 13 13
Costs savings materializing Consolidated Operating Costs Excluding Consolidated Operating Costs [Millions of Euros] Angolan Operation [Millions of Euros] (0.1)% (3.9)% 134.6 129.3 134.6 134.5 1Q11 1Q12 1Q11 1Q12 Excluding proportionate consolidation of Angolan JV, OPEX fell by 3.9% to 129.3 million euros 14 14
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