Quarter 3, 2001 versus Quarter 3, 2000
Total revenue for Q3, 2001 increased 33% from EUR 258m for Q3, 2000 to EUR 342m
Total revenue generating units (RGUs)1 increased by more than 1 million during the year, to 8,534,000 as at September 30, 2001
New Services2 revenues for Q3, 2001 grew 73% from EUR 55m for Q3, 2000 to EUR 94m
New Services RGUs increased by 67% from 582,000 as at September 30, 2000 to 971,000 as at September 30, 2001
Average revenue per RGU per month3 (ARPU) for Q3, 2001 increased by 17% from EUR 10.514 for Q3, 2000 to EUR 12.29 despite the expected seasonality experienced in the summer months Total UPC Distribution5 Adjusted EBITDA for Q3 increased 125% from EUR 23m in Q3, 2000 to EUR 53m in Q3, 2001
UPC Group Adjusted EBITDA6 for Q3, 2001 improved 62% from EUR (97)m for Q3, 2000 to EUR (37)m
Total UPC Distribution5 revenue for Q3, 2001 increased 3%, in line with guidance from EUR 275m for Q2, 2001 to EUR 283m
New Services RGUs increased by 60,000 in Q3, 2001, to 971,000 as at September 30, 2001
UPC Group Adjusted EBITDA for Q3, 2001 improved 31% from EUR (54)m for Q2, 2001 to EUR (37)m
Net Loss of EUR 711m in the quarter, (including EUR 38m of impairment charges and EUR 376m in a revaluation of our stakes in PrimaCom and SBS), improving from EUR 863m in Q2, 2001
Commenting on UPC’s third quarter 2001 results, John F. Riordan, President and CEO of UPC, said:
As President of UPC I am delighted to have been asked to take on the role of CEO of the company. I have enormous admiration for what has been achieved at UPC by both management and staff. I believe UPC has the pan-European scale necessary in this industry to drive revenue growth, reduce costs and improve margins. These are turbulent times but UPC has strong foundations upon which we can continue to build our triple-play businesses of television, internet and telephony.
Since my appointment in September I have been focusing my efforts on three key tasks. Firstly I am undertaking a review of UPC’s balance sheet and capital structure and we have appointed advisors for this purpose. We expect to announce a definitive plan for restructuring UPC’s balance sheet in the near future.
Secondly, we have initiated a strategic review of UPC’s long-range plan. The strategic review will be completed by the year-end and presented along with our 2002 guidance in the first quarter of 2002.
Through a combined focus on profitable customer growth and operating cost reductions, the revised plan will seek to optimise near-term EBITDA and cashflow generation while delivering long-term capital returns.
Thirdly, I am focusing on operational efficiencies to maximise the technology integration opportunities to bring cost savings across Europe. Cost consciousness has become the norm within the company.
We continue our reorganisation efforts, centralising more functions and removing layers of management where possible. As a general rule our benchmark is to ensure that all customers create a positive Net Present Value (NPV) to UPC. A rapid payback of any investment needs to be assured, and all systems are required to produce higher margins from a lower cost base.
Working with UPC’s experienced management team, I have added a new emphasis in the past months on the company’s technology operations, its customer focus, and its regulatory and government relations. Our priority is to intensify the engagement with public authorities and our peers in the industry on such important issues as government support for digitisation, customer choice and common technology standards for digital video and Iprelated services.
As we stated we would do, we have completed a successful IPO of our Priority division in the third quarter of this year. This enables Priority to maintain a dedicated focus on the high margin business telecom market, while leveraging off UPC’s pan-European fibre and coax networks. We have great confidence in Priority’s leadership and its mission to maximise the value for all shareholders in Priority.
And finally, we have announced the merger of our Polish DTH business with Canal+, which has gained regulatory approval in Poland and is on track to close in the fourth quarter of this year. Priority and the Canal+ transactions are just two examples of where we have acted to improve the focus on our core triple-play business. This tripleplay focus is what I intend to drive forward and you should expect to see more initiatives like these.
