+ 3.1bn bn bn bn. Organic revenue ( m) 8,371 7,820 7,377 7,018 6,627 6,496 5,854 5,275 4,908 4,504 4,111 3,810

Transcription

1 Jeremy Darroch

2 This document contains certain forward looking statements with respect to the Group s financial condition, results of operations and business, and our strategy, plans and objectives for the Group. These statements include, without limitation, those that express forecasts, expectations and projections, such as forecasts, expectations and projections in relation to new products and services, the potential for growth of free-to-air and pay television, fixed line telephony, broadband and bandwidth requirements, advertising growth, DTH and OTT customer growth, On Demand, NOW TV, Sky Go, Sky Go Extra, Sky+ HD, Sky Q, Sky Store, Sky Online, mobile, Multiscreen and other services penetration, revenue, administration costs and other costs, advertising growth, churn, profit, cash flow, products and our broadband network footprint, content, wholesale, marketing, synergies and integration, and capital expenditure. These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from those expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a highly competitive environment and faces competition from a broad range of organisations, the effects of laws and government regulation upon the Group's activities, the fact that the Group s business is based on a subscription model and its future success relies on building long-term relationships with its customers, its reliance on a complex technical infrastructure which is subject to risk of failure, change and development, failure of key suppliers, the Group s exposure to financial market risks, the fact that the Group must protect its customer and corporate data and prevent breaches of security, risks inherent in the implementation of large-scale capital expenditure projects, the fact that the Group relies on intellectual property and proprietary rights which may not be adequately protected under current laws or which may be subject to unauthorised use and the fact that people at Sky are critical to the Group s ability to meet the needs of its customers and achieve its goals as a business. Information on the significant risks and uncertainties is provided in the Principal risks and uncertainties section of Sky s Annual Report for the full year ended 30 June Copies of the Annual Report are available from the Sky plc web page at and in hard copy from the Company Secretary, Sky plc, Grant Way, Isleworth, Middlesex TW7 5QD. All forward looking statements in this document are based on information known to the Group on the date hereof. The Group undertakes no obligation publicly to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. 2

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5 Organic revenue ( m) + 0.8bn 1, bn 3,465 3,069 2,681 2,231 1,847 1,545 1,249 1, bn 5,854 5,275 4,908 4,504 4,111 3, bn 7,820 7,377 7,018 6,627 6, ,371 UK and Ireland revenue excluding Sky Bet 5

6 Customers Revenue EPS 21.8m 12bn 63.1p +12.8m + 7bn +38.2p 9.0m 5bn 24.9p TV subscription revenue Other revenue Products and customers as at 30 June and financials are 12 months to 30 June (2016 includes the 53rd week) is UK and Ireland only and 2016 is UK, Ireland, Germany, Austria and Italy.

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8 Pay TV broadcaster Sports and movies centric High reliance on big bundle Exclusively DTH Main TV in living room Single play Customer service on the phone Broader, consumer-led business Entertainment for everyone Broad range of packages DTH, IPTV, OTT, Mobile Every screen, everywhere Triple play/quad play Service to suit customers needs 8

9 Reaching 56m households - free and pay TV No. 1 pay TV channel portfolio - 50% share of pay viewing Europe s biggest investor in content - over 5bn p.a. Top brands Best partner for rights holders Own production capability Broad distribution - all major networks Hooten & the Lady Note: Pay viewing to Sky wholly owned channels and JVs 9

10 Sky Player OTT streaming Sky Go Sky Store Sky Go Extra Sky+ gets biggest overhaul since launch Sky Q VR Interactive Mobile TV first introduced Sky Anytime 3D Catch up TV rolls out Box sets Buy and Keep Sky Advance UHD Sky+ Sky+HD Sky+ app On demand NOW TV NOW TV Box Sky Adsmart NOW TV hybrid box Sky Kids App

11 Which of these brands is the leader in Entertainment? 1st 1st 53% 28% agree 2nd 13% agree 1st agree 2nd 17% agree 56% agree 2nd 20% agree Source: Kantar research 7-10 October 2016 Base: 8,793 Question: Which one of these companies do you consider to be the leading TV entertainment company? 11

12 Customer satisfaction Sky UK & Ireland product growth 84% 84% 92% Broadband HD Multi-screen Sky Go Extra UK & Ireland Germany & Austria Italy Launch After 10 years Source: Kantar research 7-10 October 2016 Base: 8, Question: on a scale of 1-10 where 1 is not at all satisfied and 10 is extremely satisfied, how satisfied are you with your main home TV entertainment provider? Score are 6-10

13 Original Direct To Consumer TV entertainment company Deep insights 6 hours per day in Sky universe 20,000 strong panel Data from millions of boxes Advanced analytics Specialist analysis Machine learning Combination drives performance and competitive advantage 13

14 Content origination and acquisition Content curation Propositions, pricing and bundles Viewing experience and technology Sales and retention Customer care 14

15 Sustained operating cost improvement Provides fuel to invest and deliver higher profits Highly effective and productive model Powerful application across markets Reduces costs as a percentage of sales whilst improving the customer experience 15

16 TV Efficiency HD TV products Advertising Home communications Programme sales Customers Transactional, Rent and Buy Channel sales Mobile 16

17 CAGR Revenues Programming investment 6% 6% 2% 15% Other operating costs EBIT Numbers are based on Group like-for-like 17

18 Winning content portfolio Delivering direct to consumers at scale Clear brand leadership and happy customers Best in class sales capability Deep customer insights providing advantage Efficient and effective operations provides fuel to invest Financial model converts revenue growth into profit growth Westworld 18

19 29bn + 11bn + 3bn + 2bn + 15bn = 60bn 35% share Pay TV & comms 27% share 7% share 7% share Advertising Transactional Programme & channel sales UK Mobile 20% share Total opportunity For illustrative purposes only. Source: OFCOM communications report 2016; Company Results: IHS Trax Television Intelligence Programme and Channel Sales opportunity includes UK wholesale market for Sky channels and the size of UK TV 19 exports globally. Sky's other total revenue opportunities are the current market sizes for each of those revenue streams as sourced from various third parties.

20 UK and Ireland Germany & Austria Italy Maximise customer lifetime value and drive profit growth Customer growth and market penetration Diversified revenue growth and strong operating leverage Drive efficient and effective operating model Invest where customers see value 20

21 Mid to high single digit revenue growth Structured approach to costs Grow programming in line with revenues Positive and growing contribution from comms Drive hard on operating cost efficiency Operating profit growth ahead of revenue growth EPS and FCF growth Strong & growing dividend 21

22 Growing EPS and free cash flow Strong and progressive dividend Supplemented by capital returns 22

23 Europe's number 1 entertainment business and growing Track record of growth in all conditions Best in class capabilities built around deep customer understanding Significant opportunity for growth in all our markets, well aware of the challenges Management capability to move quickly at scale and win in dynamic markets Clear strategies to grow revenues, manage costs; to deliver sustained growth in earnings and shareholder returns 23