AdSmart Continues to Drive Sky’s Ad Revenue Growth


Sky’s investment in Sky AdSmart is continuing to drive the company’s advertising revenue growth. In the company’s annual results — in all likelihood the last set of results Sky will publish as an independent company —  for the year up to June 2018, AdSmart’s revenues increased 29 percent versus the previous year, an impressive feat against a backdrop of either flat or declining TV ad sales. Overall ad revenue grew 10 percent to £917 million. up from £835 million the previous year.

Sky say they outperformed the market in the UK, Germany and Italy. In Italy, Sky’s advertising revenue grew by 13 percent, which  the the company’s free-to-air and digital channels, but Germany was the standout performer with 23 percent growth.

The company’s direct to consumer business grew three percent overall, totalling £11.83 billion, whilst the company’s content business grew by 15 percent to £838 million, courtesy of growing international sales of Sky originals. Sky say that Sky Vision, the company’s production and distribution arm, hit its £200 million per annum target two years earlier than expected.

Sky’s shares have seen healthy increases not only because of their results but also due to the bidding war between 21st Century Fox and Comcast. An investor who bought Sky shares on 25th November 2016 /11/16 at £767.50 per share would have almost exactly doubled their money had they cashed out just over 18 months later 13th August 2018 at £1535 per share.

Sky Share Price PerformanceJeremy Darroch, Sky’s CEO, commented, “It’s been an exceptional year. We’ve delivered another set of strong results with like-for-like revenues up 5 percent, Established Business EBITDA up 11 percent and EPS up 10 percent. Over half a million new customers joined Sky this year and we now have 63 million products in customer’s homes as they continue to choose Sky over other providers. As a consequence, we have extended our leadership position as Europe’s largest direct-to-consumer media and entertainment business.

“Our strong performance reflects the execution of our strategy over an extended period of time, driving sustained growth in revenue, profits and shareholder returns. We do this by providing our customers more of the best content, world class innovation in products and services, combined with industry leading front-line service. Together with an increasingly agile and efficient organisation, we are able to deliver for shareholders whilst ensuring the customer experience is better than anywhere else.

Darroch also pointed to the “building blocks” for future growth. “We’ve secured more exclusive coverage of major sports events for our customers and our investment in Sky original productions is being widely recognised by customers and critics alike. We’ve rolled out Sky Q to all our major territories meaning a growing number of customers can enjoy the benefits of Europe’s best home entertainment service, and our agreements with Netflix, Mediaset, BT and Spotify will further enhance and extend our customer offer.”

 

 

 

 

 

 

 

Results for the twelve months ended 30 June 2018

Results for the twelve months ended 30 June 2018
EXCELLENT RESULTS; STRONG PLANS IN PLACE FOR THE FUTURE
Excellent financial and operating results
 5% increase in like-for-like revenue to £13.6 billion
 11% increase in Established Business EBITDA to £2.5 billion; 9% increase in EBITDA
 Operating costs down 70 basis points as a percentage of revenue
 Earnings per share (EPS) up 10% to 67.3 pence
 Statutory results: operating profit of £1,034 million, up 7%, and EPS of 47.5 pence, up 17%
 Sky Q in 3.6 million homes, up 2.3 million year on year
 Q4 customer growth up 39%; over 23 million European households enjoying Sky
 Q4 product growth up 81%; 63 million products now in Sky homes
Extending our leadership in content
 Put in place major new partnerships; Netflix, BT Sport, Mediaset Premium, Spotify
 Secured significant exclusive rights; Serie A, Premier League, Austrian Bundesliga, Formula 1
 Investment in home grown content paying off; continued increase in the commercial success of
Sky original productions
Delivering greater value to our customers across the Group
 Excellent year for UK business with strong customer demand for Sky Q, Sky Fibre and Sky Mobile
 Comprehensively upgraded service in Germany, kick-starting next leg of growth in this market
 Transforming Italy into a diversified, multiplatform business; launched Sky over DTT and over fibre,
plans for triple-play in 2019
Strong set of plans in place for future growth

EXCELLENT RESULTS; STRONG PLANS IN PLACE FOR THE FUTURE

plans for triple-play in 2019

Strong set of plans in place for future growth

Jeremy Darroch, Group Chief Executive, commented, “It’s been an exceptional year. We’ve delivered another set of strong results with like-for-like revenues up 5%, Established Business EBITDA up 11% and EPS up 10%. Over half a million new customers joined Sky this year and we now have 63 million products in customer’s homes as they continue to choose Sky over other providers. As a consequence, we have extended our leadership position as Europe’s largest direct-to-consumer media and entertainment business.

“Our strong performance reflects the execution of our strategy over an extended period of time, driving sustained growth in revenue, profits and shareholder returns. We do this by providing our customers more of the best content, world class innovation in products and services, combined with industry leading front-line service. Together with an increasingly agile and efficient organisation, we are able to deliver for shareholders whilst ensuring the customer experience is better than anywhere else.

“Importantly, this strategy is now widely implemented across the Group. In the UK and Ireland, our largest market, we’ve delivered an excellent operational and financial performance whilst scaling our new initiatives. In Germany and Austria, we have comprehensively upgraded all our services as part of our plans for sustained long-term growth in what is Europe’s largest TV market. In Italy, we’ve had a ground-breaking year, opening up significant new growth opportunities for our business by offering new services over DTT and fibre, allowing us to reach new segments of the market.

“Alongside this, we’ve put in place further building blocks for future growth. We’ve secured more exclusive coverage of major sports events for our customers and our investment in Sky original productions is being widely recognised by customers and critics alike. We’ve rolled out Sky Q to all our major territories meaning a growing number of customers can enjoy the benefits of Europe’s best home entertainment service, and our agreements with Netflix, Mediaset, BT and Spotify will further enhance and extend our customer offer.

“We therefore enter the year ahead with good momentum. We have an excellent set of plans and we’re focused on executing them well. We are proud that Sky is recognised globally as an outstanding business and are confident we have the right assets and capabilities to continue creating long term growth opportunities and to capitalise on the strong position we’ve built.”


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