SkyDeutschland preliminary results
Strong growth and financial performance, record retention levels
Tender offer to Sky Deutschland's shareholders by BSkyB

Q2 2014 key metrics
• Direct subscribers: up 82,000 to 3,813,000
• Churn rate: quarterly annualized 7.7%; 12 month rolling 10.1%
• Sky Premium HD customers: up 130,000 to 2,236,000
• Sky+ customers: up 106,000 to 1,681,000

Q2 2014 financials
• EBITDA: €45m, up 23% yoy
• Revenues: €428m, up 14% yoy
• ARPU: €34.59, up €0.85 yoy

Full year 2013/14 financials*
• EBITDA: €29m, up 127% yoy
• Revenues: €1,655m, up 16% yoy
• ARPU: €34.52, up €1.28 yoy

The best content: many first and exclusive to Sky and Sky Go
• Over 5,000 movies, uncut and commercial-free
• More than 270 movie premieres - all exclusive to Sky - at least 12 months before free-to-air and other online TV services
• Over 120 series premieres in 2014, representing over 1,400 episodes - at least 12 months before free-to-air and other online TV services
• "Die Liga der Weltmeister": The Bundesliga - league of the world champions - returns to action
• "Road to Berlin": Four German teams competing in the UEFA Champions League

The best online TV service: Sky Go
• The new Sky Go: complete redesign for more simplicity and ease of use
• Significant expansion with over 3,000 additional hours of great series and documentaries
• New features: "Bookmarking" and "Recently Watched" on Sky Go and Snap by Sky
• Integration of the award-winning Snap service within Sky Go for easy access
• Sky Go customer sessions up 72% to 28.7m yoy; record 2.3m views for "Game of Thrones"
• Sky Go now free for all Sky customers

Outlook
• For the new 2014/15 financial year, Sky expects subscriber net growth of 400 to 450k, and full year EBITDA in the range of €80m to €110m, which will be supported by a continued strong increase in total revenues.

* Sky has changed its reporting period to run from July to June. For comparative reasons, the financials represent the twelve months 2013/14 trading period.


Brian Sullivan, CEO of Sky Deutschland: "Having recently marked the fifth anniversary of Sky Deutschland, in what was not too long ago a dormant pay-TV market, we have now seen 20 consecutive quarters of continuous growth, and we think the potential is just starting to be tapped. In the past quarter net subscriber growth increased strongly, and customer loyalty hit new record levels with churn rates that are the best in our company's history. Many exclusive premieres of outstanding series and blockbuster movies in the quarter - every single one also available on-demand via the new Sky Go, which is now free for all Sky customers - confirm that Sky is the clear market leader across all platforms and genres. And with the return of action in the Bundesliga and Champions League following on from the incredible performance of the German National Team in the World Cup, we couldn't be more excited about the year ahead."

Unterföhring, 6 August 2014 - In Q2 2014 (April-June), Sky Deutschland delivered strong net growth, new record-level churn rates and continued improvement across all key operating metrics. Net growth increased by 71% year-on-year to 82,000 (Q2 2013: 48,000) with 3,813,000 direct subscribers at the end of the quarter (Q2 2013: 3,453,000).

Gross additions grew by 17% year-on-year to 154,000 (Q2 2013: 131,000). The continued subscriber growth reflects both strong underlying demand - particularly when considering that last year benefited from the exclusive games of German teams through the UEFA Champions League semi-finals - as well as this quarter's earlier-than-expected migration of Deutsche Telekom's former Ligatotal customers.

As a result of the actions taken last year to improve the quality of customer growth, and the increasing level of two year contracts, customer loyalty has improved significantly with the quarterly annualized churn rate decreasing to 7.7% (Q2 2013: 9.7%) and the 12-month rolling churn rate to 10.1% (Q2 2013: 12.0%). Both represent the lowest rates in the company's history.

The total number of Sky Premium HD customers, inclusive of HD free-visions, grew by 130,000 in the quarter to 2,236,000 (Q2 2013: 1,760,000). As a result, 59% of all customers now enjoy the outstanding quality of Sky's market leading HD offering (Q2 2013: 51%), which today includes up to 88 channels.

Sky+ continued to grow strongly with the number of customers increasing by 106,000 in the quarter to 1,681,000 (Q2 2013: 1,171,000). Today, 44% of Sky subscribers benefit from the convenience and flexibility of the award-winning Sky+ receiver (Q2 2013: 34%).

A total of 451,000 customers, up from 393,000 a year ago, subscribed to the Sky Zweitkarte (second smartcard), demonstrating that a steadily growing number of customers enjoy Sky's great entertainment line-up simultaneously on multiple TV sets in their home.

Strong financial performance
In Q2 2014 EBITDA increased by 23% to positive €45 million (Q2 2013: €37 million). The continued growth of both subscribers as well as average revenue per user (ARPU) led to total revenues rising 14% to €428 million (Q2 2013: €375 million). Subscription revenues continued to be the key driver, up 13% to €391 million (Q2 2013: €347 million). ARPU increased by €0.85 to €34.59 (Q2 2013: €33.74). Total costs excluding depreciation were €382 million (Q2 2013: €339 million).

When looked at from the perspective of the new financial year, EBITDA in 2013/14 (July 2013-June 2014) more than doubled (+127% yoy) to positive €29 million (2012/13: €13 million), total revenues went up by 16% to €1,655 million (2012/13: €1,428 million), and ARPU increased by €1.28 to €34.52 (2012/13: €33.24).

The best content: many first and exclusive to Sky and Sky Go
Just last week and in addition to existing agreements with all major Hollywood studios, Sky concluded new licensing deals with eight independent distributors securing exclusive multi-platform pay-TV and on-demand rights for a wide range of additional top movies. Among them are blockbusters such as "The Expendables 3", "Sin City 2", "Scary Movie 5", as well as Oscar winner "The Great Beauty". In total, with over 5,000 movies - including over 270 premieres, more than any other offering in Germany and Austria and most available across every platform and on-demand - Sky guarantees the best and most exclusive entertainment, confirming its position as the true home for all film fans.

In the second quarter 2014, Sky customers enjoyed a unique selection of exclusive premieres of the world's best series. Among them were the most recent episodes of "Game of Thrones", "True Detective", "House of Cards", "Dexter", "Downton Abbey", "Peaky Blinders - Gangs of Birmingham", and "Banshee: Small Town. Big Secrets", as well as the world premiere of "24: Live Another Day", broadcast in both English and German simultaneously with the US. With more than 120 series premieres over the course of 2014 - every one of them long before free TV and other online video services - Sky underscores its leadership position in premium content. This is also acknowledged by the readers of the Auerbach Verlag, who recently named Sky the "Best Pay-TV Provider in Germany", the fourth consecutive award for Sky.

"Die Liga der Weltmeister"
With the Bundesliga - the league of the world champions - returning to action, and four German teams in the UEFA Champions League, the new seasons will deliver even more exciting live sport entertainment to Sky customers. Only on Sky can sport fans follow all matches of their favorite teams live and in HD.

The best online TV service: Sky Go
Since April of this year, Sky Go has been available free to all Sky customers, beginning with the Sky Welt and Sky Starter packages, with more customers than ever choosing Sky Go to watch content both in and out of home. Over the course of Q2 2014, the number of customer sessions grew significantly by 72% year-on-year to 28.7 million, with the number of series watched on Sky Go doubling from Q1 to Q2. A large part of this success is the award-winning HBO series "Game of Thrones". Between April and July the show was streamed more than 2.3 million times, which is an impressive rise from a year ago when Game of Thrones set a previous benchmark of over one million views.

The new Sky Go
In June, Sky launched the new Sky Go for an even better, unified user experience. Customers now enjoy a greater ease of use and quicker access to the great breadth and depth of programs. And, it wasn't just the look. Adding to the already extensive range of first-run, high quality, and exclusive programs - a broad range of fascinating documentaries from Discovery Channel, Spiegel Geschichte, History, A&E, National Geographic Channel, and NatGeo Wild are now available, completely flexible and on-demand. In addition, Sky Go has been extended to include even more series and shows from Fox, TNT Serie, TNT Glitz, RTL Crime, 13th Street, SyFy, Universal Channel, Animax, AXN and Motorvision TV. This significant expansion added over 3,000 additional hours of high quality content, confirming Sky Go as the leading premium online TV service in Germany and Austria.

For sport fans, the redesign offers an expanded overview with up-to-date sport news and clips, as well as recent statistics, live tweets and tickers from Sky Sport News HD, including a preview of current and upcoming live sporting events.

Snap by Sky: now accessible within Sky Go
As part of the redesigned user interface, the entire Snap by Sky catalogue is now also available within
Sky Go for Sky customers with a Snap subscription, enabling them to watch all Sky Go and Snap content directly in one app. Snap by Sky is a standalone service as well as a perfect addition to Sky's market-leading TV offering. Thousands of titles, including complete box sets of award-winning series, hits from HBO, top movies and a broad selection of children's programming guarantee great entertainment, and extensive cooperations with Hollywood studios and numerous independents ensure a range of content that is completely unique for the German market.

Across the last year Sky Go delivered over 17,000 hours of unique content, including more than 1,000 blockbuster films, over 3,400 live sporting events, more than 1,100 children's programs, and 140 complete series box sets containing over 1,500 episodes - most exclusive to Sky and every one of them long before free TV and other online video services. Over the next 12 months, the new Sky Go and Snap by Sky will offer more than 25,000 hours of high-quality content - many first and exclusive to Sky customers - with more to come.

New features on Sky Go and Snap: "Bookmarking" and "Recently Watched"
Sky Go and Snap are continually evolving to make their services more convenient and personalized. Just this week Sky introduced two great new features. "Bookmarking" ensures that if customers with an iPad, iPhone or iPod touch are interrupted while watching their favorite program, they can continue exactly at the point where they left off. The "Recently Watched" list allows customers the option to see the last 50 shows watched at a glance, which, when combined with the already existing youth protection features, gives even more peace of mind to parents.

Tender offer to Sky Deutschland's shareholders
On 25 July 2014, 21st Century Fox announced its intention to combine its European satellite television holdings. As part of this proposed transaction BSkyB has agreed to acquire the 21st Century Fox 57.4% equity stake (fully diluted) in Sky Deutschland, and has announced its plan to launch a voluntary cash offer for 100% of the outstanding share capital of Sky Deutschland at a price of €6.75 per share. The Management and Supervisory Boards of Sky Deutschland will evaluate the offer of BSkyB with the support of both financial and legal advisors. After publication and review of the tender offer, the Boards will issue an official statement as required under German Law.


Combined investor/analyst and press call today at 9:30 am (CET).

Dial-in: Germany +49 69 58 999 0509; UK +44 207 1620 177; US +1 334 323 6203

Contact for media:
Dr. Jörg E. Allgäuer
Vice President Corporate Communications
Tel.: +49 89/99 58-63 77
joerg.allgaeuer@sky.de

Contact for investors and analysts:
Christine Scheil
Senior Vice President Investor Relations
Tel.: +49 89/99 58-10 10
christine.scheil@sky.de


About Sky Deutschland:
Sky Deutschland AG is the leading pay-TV company in Germany and Austria with more than 3.8 million subscribers and revenues amounting to 1.7 billion Euros. The MDAX-listed company offers subscription TV as well as on-demand services for private and business customers.

The Sky platform comprises more than 70 exclusive TV channels, almost all of which are also available in HD. Sky's program portfolio includes live sports together with the only German 24/7 sports news channel Sky Sport News HD, feature films, TV series, children's programs, and documentaries. The Sky+ hard disk receiver allows for time-shifted TV, and the Sky Anytime on-demand service enables customers to enjoy hundreds of constantly changing titles. Sky Go, the best online TV in Germany, provides access to Sky programming via mobile devices and PCs. Moreover, the online media library Snap by Sky offers thousands of titles - among them blockbusters, classic films, complete series box sets, and children's programs.

Sky is the innovation leader in the German and Austrian TV markets. In the past two decades, Sky has played a major role in establishing pay-TV as the third pillar of TV entertainment alongside fee-financed and advertising-financed broadcasters. Sky has 2,500 employees and is based in Unterföhring near Munich.

This release contains statements regarding future developments that are based on current evaluations and are made to the best knowledge of the management of Sky Deutschland AG. Such statements with regard to future developments are subject to known and unknown risks, uncertainties and other factors that could cause the profit situation, profitability, value development or the performance of Sky Deutschland AG or the success of the media industry to diverge from the profit situation, profitability, value development or performance that are expressly or implicitly assumed or described in the statements concerned. In view of the risks and uncertainties and other factors, readers of this media release should not rely on such statements to a disproportionate extent. Sky Deutschland AG has no obligation to act in keeping with such statements regarding future developments or to alter its actions to accommodate future events and developments.
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