ZON Multimédia Serviços de Telecomunicações e ......ZON Multimédia – Serviços de...
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ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1/78 1H12 Consolidated Management Report
2/78 1H12 Consolidated Management Report
TABLE
OF
CONTENTS
1H12 Consolidated Management Report 3/78
01 ZON IN NUMBERS 4
02 HIGHLIGHTS - FIRST HALF 2012 7
03 GOVERNING BODIES 9
04 MANAGEMENT REPORT 10
4.1. Events in 1H12 and Recent Developments 10 4.2. Capital Markets 11 4.3. Governing Bodies Shareholdings 14 4.4. Qualified Shareholdings 15 4.5. Transactions of Own Shares 18 4.6. Business Review 19 4.7. Consolidated Financial Review 25 4.8. Risks and Uncertainties for Future Periods 33
05 CONSOLIDATED FINANCIAL STATEMENTS 34
5.1. Report and Opinion of the Statutory Auditor 73
5.2. Limited Review Report Prepared by Auditor Registered in CMVM 74
06 STATEMENT UNDER THE TERMS OF ARTICLE 246,
PARAGRAPH 1, C), OF THE SECURITIES CODE 76
4/78 1H12 Consolidated Management Report
01
ZON in Numbers
Business Indicators (in thousands):
Triple Play Subscribers: Triple Play Penetration in Cable Customer Base (%):
678.5 688.8708.7 715.7
730.9
2Q11 3Q11 4Q11 1Q12 2Q12
+7.7%
58.6% 59.3% 60.1% 59.4% 60.4%
2Q11 3Q11 4Q11 1Q12 2Q12
+1.8pp
RGUs: RGUs per Subscriber (units):
3,212.8 3,256.63,315.1
3,381.0 3,414.1
2Q11 3Q11 4Q11 1Q12 2Q12
+6.3%
2.31 2.33 2.36 2.37 2.39
2Q11 3Q11 4Q11 1Q12 2Q12
+3.2%
Basic Subscribers: Broadband Subscribers:
1,552.8 1,554.2 1,567.1 1,586.8 1,586.3
2Q11 3Q11 4Q11 1Q12 2Q12
+2.2%
714.8 725.0 739.2 748.6 751.5
2Q11 3Q11 4Q11 1Q12 2Q12
+5.1%
1H12 Consolidated Management Report 5/78
Voice Subscribers: Mobile:
826.8 844.0883.9
921.4 947.0
2Q11 3Q11 4Q11 1Q12 2Q12
+14.5%
118.4133.4
125.0 124.1 129.4
2Q11 3Q11 4Q11 1Q12 2Q12
+9.2%
Blended ARPU (Euros):
35.8 36.035.5
35.034.7
2Q11 3Q11 4Q11 1Q12 2Q12
(3.2)%
6/78 1H12 Consolidated Management Report
Financial Indicators (in millions of Euros):
Operating Revenues: EBITDA (EBITDA margin as % of Revenues):
425.6 428.6
1H11 1H12
+0.7%
158.0 158.5
37.1%37.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
140
160
180
1H11 1H12
+0.3%
Consolidated Net Income: CAPEX:
19.4 20.0
1H11 1H12
+3.3%
69.657.3
4.6
74.3
57.3
1H11 1H12
Baseline CAPEX Non Recurrent CAPEX
(22.8)%
Net Financial Debt: Net Financial Debt / EBITDA [x]:
706.8660.4
1H11 1H12
(6.6)%
2.3x2.1x
1H11 1H12
1H12 Consolidated Management Report 7/78
02
Highlights - First Half 2012
Operational ('000)
RGUs (1)3,212.8 3,414.1 6.3% 3,212.8 3,414.1 6.3%
Triple Play Customers 678.5 730.9 7.7% 678.5 730.9 7.7%
Basic Subscribers 1,552.8 1,586.3 2.2% 1,552.8 1,586.3 2.2%
Broadband Subscribers 714.8 751.5 5.1% 714.8 751.5 5.1%
Fixed Voice Subscribers 826.8 947.0 14.5% 826.8 947.0 14.5%
Blended ARPU (Euros) 35.8 34.7 (3.2%) 35.8 34.9 (2.5%)
Financial (Millions of Euros)
Operating Revenues 211.5 214.4 1.4% 425.6 428.6 0.7%
Pay TV, Broadband and Voice 191.6 191.0 (0.3%) 387.2 382.8 (1.1%)
EBITDA 78.5 78.8 0.4% 158.0 158.5 0.3%
EBITDA Margin 37.1% 36.8% (0.4pp) 37.1% 37.0% (0.2pp)
Net Income 9.2 9.7 5.0% 19.4 20.0 3.3%
CAPEX 35.5 27.7 (21.8%) 74.3 57.3 (22.8%)
Free Cash Flow (15.1) 33.6 n.a. (17.2) 49.9 n.a.
1H12 / 1H11
(1) Total RGUs reported ref lect the sum of Pay TV, Broadband, Fixed Voice and M obile subscribers.
Highlights of 1H12 Results 2Q11 2Q12 2Q12 / 2Q11 1H11 1H12
FINANCIAL HIGHLIGHTS
o Growth in Consolidated Revenues of 0.7% yoy to 428.6 million euros;
o Pay TV, Broadband and Voice revenues with a slight decrease (-1.1%) to 382.8 million euros
with 2Q12 representing a significant recovery in the pace of yoy performance compared with
previous quarters (-0.3%);
o Revenues from the Audiovisuals business posted a marginally negative yoy performance of
0.1% however Cinema Exhibition revenues did post a relevant fall yoy of 15.5%, reflecting the
pressures of the challenging economic environment;
o The African DTH operation “ZAP” continues to post very encouraging growth in sales every
quarter, recording 24.2 million euros (100%) in 2Q12, compared with 21.4 million euros in
1Q12, representing an accumulated figure of 45.6 million euros for 1H12;
o Pay TV, Broadband and Voice EBITDA grew by 2.0% to 150 million euros allowing for flat
Consolidated EBITDA;
o As expected, Consolidated FCF posted very strong yoy growth to 49.9 million euros, up from
negative 17.2 million in 1H11, fully covering the dividend paid in May 2012.
8/78 1H12 Consolidated Management Report
OPERATIONAL HIGHLIGHTS
o Solid RGU performance up 6.3% yoy to 3.4 million services:
o Stable Pay TV base with cable net adds of 6.3 thousand cable customers offset by a
decline in DTH subscribers in 2Q12. In 1H12, the Pay TV customer base posted net
growth of 19.3 thousand subscribers;
o Continued strong uptake of high-end Triple Play package “IRIS” with an additional
42.5 thousand subscribers in 2Q12;
o Voice customers grew by 63 thousand subscribers, 28.3% above the net adds
recorded in 1H11;
o Additional Broadband customers of 12.3 thousand in 1H12, taking the total customer
base to 751.5 thousand subscribers, representing penetration of 62% of the cable
TV base;
o Triple Play customers increased 7.7% y.o.y. in 1H12 to 730.9 thousand with net adds of
15.2 thousand in 2Q12. Penetration of Triple Play services stood at 60.4% by the end of
1H12;
o Blended ARPU recorded a yoy decline of 2.5% to 34.9 euros in 1H12, reflecting a
combination of entry level bundles in the customer mix, the still challenged performance
of premium channel revenues, which was somewhat offset by the very good uptake of
higher-end Triple Play bundles, “IRIS”;
o ARPU from basic Triple Play services, excluding the impact of premium channel
subscriptions decreased by 0.1% in 1H12, a reflection of the resilient nature of the basic
TV, Internet ad Voice bundles;
o Weak performance of the Cinema exhibition business with a sector-wide decline in box-
office sales and revenues, a sign of the challenging consumer environment felt in
Portugal – families are clearly cutting back on spending of a more discretionary nature.
1H12 Consolidated Management Report 9/78
03
Governing Bodies
As of the 30 June 2012, the Governing Bodies of ZON had the following composition:
Board of Directors
Chairman of the Board of Directors
Daniel Proença de Carvalho
Chairman of the Executive Committee
Members of the Executive Committee
Rodrigo Jorge de Araújo Costa
José Pedro Faria Pereira da Costa
Luis Miguel Gonçalves Lopes
Duarte Maria de Almeida e Vasconcelos Calheiros
Members
Chairman of the Audit Committee
Members of the Audit Committee
Fernando Fortuny Martorell António Domingues László Istvan Hubay Cebrian Jorge Telmo Maria Freire Cardoso Norberto Emílio Sequeira da Rosa Luís Bordalo Silva Joaquim Francisco Alves Ferreira de Oliveira Mário Filipe Moreira Leite da Silva
Vitor Fernando da Conceição Gonçalves
Nuno João Francisco Soares de Oliveira Sílvério Marques
Paulo Cardoso Correia da Mota Pinto
Officials of the General Meeting of Shareholders
President Júlio de Castro Caldas
Secretary Maria Fernanda Carqueija Alves de Ribeirinho Beato
Statutory Auditor
In Office Oliveira, Reis & Associados, SROC, Lda., represented by
José Vieira dos Reis
Alternate Fernando Marques Oliveira
10/78 1H12 Consolidated Management Report
04
Management Report
4.1. Events in 1H12 and Recent Developments
SHAREHOLDER REMUNERATION IN 2012
ZON is committed to delivering attractive shareholder remuneration relative to its peers. On 27 April
2012, the Shareholders’ Meeting of ZON approved a 16 cents per share dividend, 49.5 million euros
in total, which was paid on 25 May 2012.
GOVERNING BODIES
On 30 July 2012, ZON disclosed that Norberto Emílio Sequeira da Rosa, Luís Bordalo Silva and
Jorge Telmo Maria Freire Cardoso had resigned as Members of the ZON Multimédia’s Board of
Directors.
1H12 Consolidated Management Report 11/78
4.2. Capital Markets
ZON’S SHARE PERFORMANCE
On 29 June 2012, ZON Multimedia’s shares’ closing price was 2.337 euros, which represents a
0.65% increase since the beginning of the year, compared with a 14.49% decrease from the main
Portuguese stock market index, PSI20.
In May, ZON distributed a dividend in the amount of 16 cents per share, representing a Total
Shareholder Return, for 1H12, of 7.54%.
In 1H12, a total of more than 48.8 million ZON Multimedia shares were traded, amounting to a daily
average volume of 382 thousand shares per market session. This average daily volume represents
0.12% of the total number of ZON shares.
ZON Share 1H12 Performance
-8,200,000
-6,200,000
-4,200,000
-2,200,000
-200,000
1,800,000
3,800,000
5,800,000
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
30-1
2-2
01
1
06-0
1-2
01
2
13-0
1-2
01
2
20-0
1-2
01
2
27-0
1-2
01
2
03-0
2-2
01
2
10-0
2-2
01
2
17-0
2-2
01
2
24-0
2-2
01
2
02-0
3-2
01
2
09-0
3-2
01
2
16-0
3-2
01
2
23-0
3-2
01
2
30-0
3-2
01
2
06-0
4-2
01
2
13-0
4-2
01
2
20-0
4-2
01
2
27-0
4-2
01
2
04-0
5-2
01
2
11-0
5-2
01
2
18-0
5-2
01
2
25-0
5-2
01
2
01-0
6-2
01
2
08-0
6-2
01
2
15-0
6-2
01
2
22-0
6-2
01
2
29-0
6-2
01
2
ZON Volume ZON Share Price PSI20
12/78 1H12 Consolidated Management Report
Main Announcements in 2012
Date Announcement
30-01-2012 ZON informs on deliberations of General Shareholders Meeting
13-02-2012 ZON informs on financing
01-03-2012 ZON announces Full Year 2011 Consolidated Results
22-03-2012 ZON informs on Qualified Shareholding of Telefónica, S.A.
26-03-2012 ZON informs on dividend proposal relative to year 2011
28-03-2012 ZON informs on General Shareholders Meeting
28-03-2012 ZON informs on 2011 Consolidated Management Report
29-03-2012 ZON informs on Amendment to General Shareholders Meeting Notice to Conveene
29-03-2012
ZON informs on complementary information to the Announcement of Reduction of Qualified Shareholding by Telefónica, S.A.
30-03-2012 ZON informs on "ZON MULTIMEDIA 2009-2012" Bonds Interest Payment
27-04-2012 ZON informs on calendar for dividend payment
27-04-2012 ZON informs on deliberations of General Shareholders Meeting
08-05-2012 ZON informs on Qualified Shareholding of Jadeium,B.V.
09-05-2012 ZON informs on Qualified Shareholding of Telefónica, S.A.
10-05-2012 ZON announces 1Q12 Consolidated Results
18-05-2012 ZON informs on Qualified Shareholding of Jadeium,B.V.
19-05-2012 ZON informs on 1Q12 Consolidated Management Report
23-05-2012 ZON informs on public offering of bonds
01-06-2012 ZON informs on "ZON MULTIMEDIA 2010-2014" Bonds Interest Payment
06-06-2012 ZON informs on increase of retail bond issue
08-06-2012 ZON informs on Qualified Shareholding of Cinveste, SGPS, S.A.
11-06-2012 ZON informs on "ZON MULTIMEDIA 2009-2012" Bonds Interest Payment
12-06-2012 ZON informs on Qualified Shareholding of Banco Espírito Santo, S.A.
13-06-2012 ZON informs on Qualified Shareholding of Jadeium, BV
15-06-2012 ZON informs on Results Announcement of the Public Bond Offer
19-06-2012 ZON informs on Qualified Shareholding of Cinveste, SGPS, SA
04-07-2012 ZON announces 1H12 Consolidated Results
05-07-2012 ZON informs on the Qualified Shareholding of Jadeium, B.V.
27-07-2012 ZON informs on Qualified Shareholding of Caixa Geral de Depósitos, S.A.
30-07-2012 ZON informs on resignation of Board Member
Below we present the major Investor Relation Events which took place in 1H12. The activity
developed by the Investor Relations Office also provides permanent and updated information to the
financial community about the activities of ZON Multimedia, through regular press releases,
presentations and communications on the quarterly, half-yearly and annual results, as well as any
other relevant events that may occur. It also provides all clarifications to the financial community in
general - shareholders, investors (both institutional and retail) and analysts, also assisting and
supporting the exercise of the shareholders rights. The Investor Relations Office promotes regular
meetings of the executive management team with the financial community through the participation
in specialized conferences, roadshows, both in Portugal or in major international financial centers,
and often meets with investors who visit Portugal.
1H12 Consolidated Management Report 13/78
Date Event Location
17 January Espírito Santo Iberian Conference London
18 January Roadshow London
05 March Roadshow Lisbon
13 March Roadshow NY
14 March
20 March Citigroup Telecom Conference London
21 March
28 March CSFB Cable Conference London
2 April Reverse Roadshow ZON's Head Offices
10 May Roadshow Lisboa
11 May
22 May Roadshow
Frankfurt
23 May/ Paris
15 June Goldman Sachs European Cable Conference London
18 June
Roadshow London 19 June
20 June
22 June XIX Santander Annual Telecoms Conference Marbella - Malaga
26 June
Roadshow
Boston
27 June NY
28 June
ZON Multimédia’s legal representative for Capital Markets is Maria João Carrapato.
Any interested parties are invited to request information from the Investor Relations Office, using the
following contacts:
Avenida 5 de Outubro, n.º 208
1069 - 203 Lisboa (Portugal)
Tel. / Fax: +(351) 21 7824725 / +(351) 21 7824735
E-mail: [email protected]
14/78 1H12 Consolidated Management Report
4.3. Governing Bodies Shareholdings
Under the terms and for the purposes of Article 9, Paragraph a) and numbers 6 and 7 of Article 14 of
CMVM Regulation 5/2008, and according to the information provided to the Company by the
Governing Bodies, ZON Multimedia hereby informs on the shareholdings of the members of its
Governing Bodies, including the Audit Committee and the Alternate and In Office Statutory Auditors,
at 30 June 2012:
Name PositionShares held at 31-
12-2011
Shares held at 30-
06-2012Purchased Disposed Price Per Share Date
Daniel Proença de Carvalho Chairman of the Board of Directors 0 - - - - 0
Spouse 28 - - - - 28
5,469 2.438 € 31-01-2012
1,823 2.462 € 16-04-2012
3,186 2.438 € 31-01-2012
1,062 2.462 € 16-04-2012
3,186 2.438 € 31-01-2012
1,062 2.462 € 16-04-2012
3,957 1.895 € 22-06-2012
2,754 2.438 € 31-01-2012
918 2.462 € 16-04-2012
António Domingues (1)
0 - - - - 0
Grupo BPI 23,344,798 11,104 11,104 - - 23,344,798
Luís João Bordallo da Silva (2)
0 - - - - 0
Grupo Cinveste 8,707,136 - 8,707,136 - 18-06-2012 0
Norberto Emílio Sequeira da Rosa (3)
0 - - - - 0
Grupo CGD 33,621,914 499,244 236,753 - - 33,884,405
Jorge Telmo Maria Freire Cardoso (4)
0 - - - - 0
Caixa Banco de Investimento 0 - - - - 0
Joaquim Francisco Alves Ferreira de Oliveira (5) 0 - - - - 0
Controlinveste International, Sarl 7,965,980 - - - - 7,965,980
Gripcom, SGPS, SA. 6,989,704 - - - - 6,989,704
Mário Filipe Moreira Leite da Silva(6)
0 - - - - 0
Kento Holding Limited 30,909,683 - - - - 30,909,683
José Vieira dos Reis (7)
Statutory Auditor 0 - - - - 0
Metalgest - Sociedade de Gestão, SGPS, SA 3,985,488 - - - - 3,985,488
Fernando Marques Oliveira (8)
Alternate Statutory Auditor 0 - - - - 0
Metalgest - Sociedade de Gestão, SGPS, SA 3,985,488 - - - - 3,985,488
1,919 2.438 € 31-01-2012
660 2.462 € 16-04-2012
1,455 2.438 € 31-01-2012
1,500 1.895 € 25-06-2012
1,530 2.438 € 31-01-2012
600 2.462 € 16-04-2012
1,188 2.438 € 31-01-2012
600 2.462 € 16-04-2012
300 2.438 € 31-01-2012
600 2.462 € 16-04-2012
1,980 - 2.438 € 31-01-2012
660 - 2.462 € 16-04-2012
3,957 - 1.895 € 22-06-2012
- 6,520 2.290 € 22-06-2012
- 1,395 2.300 € 22-06-2012
1,574 2.44 € 31-01-2012
600 2.46 € 16-04-2012
3,957 1.90 € 22-06-2012
(6) Mário Filipe Moreira da Silva is a member of the Board of Directors of Kento Holding Limited, which held, as of 30 June 2012, 30,909,683 ZON Multimédia shares.
Transactions in 1H12
Rodrigo Jorge de Araújo Costa Chief Executive Officer 590,428 - 597,720
José Pedro Faria Pereira da Costa Member of the Executive Committee 93,372 - 97,620
Luís Miguel Gonçalves Lopes Member of the Executive Committee 92,372 - 100,577
Duarte Maria de Almeida e Vasconcelos Calheiros Member of the Executive Committee 44,503 - 48,175
Fernando Fortuny Martorell Member of the Board of Directors 0 - - - - 0
László Istvan Hubay Cebrian Member of the Board of Directors 0 - - - - 0
Vítor Fernando da Conceição Gonçalves Chairman of the Audit Committee 0 - - - - 0
Nuno João Francisco Soares de Oliveira Silvério Marques Member of the Audit Committee 0 - - - - 0
Paulo Cardoso Correia da Mota Pinto Member of the Audit Committee 0 - - - - 0
Adriano José de Seabra Duarte Neves Manager in the terms of CVM article 248-B 25,819 - 28,398
Nuno Miguel Pereira Domingues de Figueiredo Carvalhosa Manager in the terms of CVM article 248-B 6,832 - 9,787
Paulo Manuel Moura Ribeiro Manager in the terms of CVM article 248-B 9,163 - 11,293
Jorge Filipe Santos Graça Manager in the terms of CVM article 248-B 6,464 - 8,252
12,450 - 18,581
André Nuno Malheiro dos Santos Almeida Manager in the terms of CVM article 248-B 300 -
(4) Jorge Telmo Maria Freire Cardoso is a member of the Board of Directors of Caixa Banco de Investimento, SA.
(5) Joaquim Francisco Alves Ferreira de Oliveira indirectly holds more than half of the share capital of Controlinveste International, Sarl, which held, as of 30 June 2012, a total of 7,965,980 ZON Multimédia shares. Joaquim Francisco Alves Ferreira de Oliveira indirectly holds more than half of the share capital of Gripcom - SGPS, S.A., which held, as of 30
June de 2012, a total of 6,989,704 ZON Multimédia shares.
(7) José Vieira dos Reis is the Alternate Statutory Sole Supervisor of Metalgest - Sociedade de Gestão, SGPS, SA, which held, as of 30 June 2012, 3,985,488 ZON Multimédia shares.
1,200
Tomás Maria de Morais Sarmento Pinto Gonçalves Manager in the terms of CVM article 248-B 25,179 23,861
Miguel Augusto Chambel Rodrigues Manager in the terms of CVM article 248-B
(8) Fernando Marques Oliveira is, in representation of Sociedade Oliveirea, Reis & Associados, SROC, Lda, the Statutory Sole Supervisor of Metalgest - Sociedade de Gestão, SGPS, SA, which held, as of 30 June 2012, 3,985,488 ZON Multimédia shares.
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
(1) António Domingues is a member of the Boarsd of Directors of companies which are a part of Grupo BPI which, as of 30 June 2012, held 23,344,798 ZON Multimédia shares.
(2) Luís João Bordallo da Silva is a member of the Board of Directors and a Manager of companies which are a part of Grupo Cinveste
(3) Norberto Emílio Sequeira da Rosa is a member of the Board of Directors of Caixa Geral de Depósitos, SA, which, as of 30 June 2012, held, directly and indirectly 33.884.405 ZON Multimédia shares.
1H12 Consolidated Management Report 15/78
4.4. Qualified Shareholdings
Under the terms of paragraph c) of number 1 of article 9 of the Regulation 5/2008 of the Portuguese
Securities Committee (CMVM), ZON Multimedia hereby informs on its qualified shareholdings held
by third parties, which have been reported to the Company.
The structure of ZON Multimedia’s Social Qualified Shareholdings disclosed to the company, was, in
30 June 2012, as follows:
Caixa Geral de Depósitos, SA 33,884,405 10.96%
Kento Holding Limited (1)
30,909,683 10.00%
Jadeium, B.V. (1)
24,222,563 7.84%
Banco BPI, SA 23,344,798 7.55%
Espírito Santo Irmãos, SGPS, SA (2)
15,455,000 5.00%
Banco Espírito Santo, SA 15,054,254 4.87%
Joaquim Alves Ferreira de Oliveira (3)
14,955,684 4.84%
Fundação José Berardo (4)
13,408,982 4.34%
Ongoing Strategy Investments, SGPS, SA (5)
10,162,250 3.29%
Estêvão Neves - SGPS, SA (6)
9,075,782 2.94%
Grupo Visabeira, SGPS, SA (7)
6,641,930 2.15%
Norges Bank 6,379,164 2.06%
SGC, SGPS, SA (8)
6,182,000 2.00%
ESAF - Espírito Santo Fundos de Investimento Mobiliário, SA 6,088,616 1.97%
BES Vida - Companhia de Seguros, S. A. 5,721,695 1.85%
Metalgest - Sociedade de Gestão, SGPS, SA (4)
3,985,488 1.29%
Total 225,472,294 72.95%
(7) Visabeira Investimentos Financeiros,SGPS,SA holds 0.99% of ZON Multimedia's share capital. 1.16% are held directly by Grupo Visabeira,
SGPS, SA. Visabeira Investimentos Financeiros,SGPS,SA is 100% held by Visabeira Estudos e Investimentos,SA, which is 100% held by
Visabeira Serviços,SGPS,SA, which is owned by Grupo Visabeira,SGPS,SA. The latter is 74.0104% held by Mr. Fernando Campos Nunes.
(8) SGC, SGPS, SA's holding is attributed to its majority shareholder, Mr. João Pereira Coutinho.
Note:The shareholdings of Caixa Geral de Depósitos, S.A., Banco BPI, S.A. and Banco Espírito Santo, S.A. were updated as of 30 June 2012,
based on information provided for the purposes of this Management Report.
(6) The Qualified Shareholding of Estêvão Neves - SGPS, SA is attributable to Mr. José Estêvão Fernandes Neves, who owns the majority of
Shareholders as of 30-06-2012 Nr. Of Shares % Voting Rights
(1) According to Articles 20(1)(b) and 21 of the Cód.VM the qualified holding is attributable to Ms. Isabel dos Santos, in her capacity of
shareholder of KENTO and Jadeium, B.V. The calculation of the qualified shareholding of Jadeium, B.V. includes 8,707,136 shares disposed of
by Cinveste, SGPS, SA, as disclosed to the market on 08-06-2012. On this date no announcement was made by Jadeium, B.V. given that the
aforementioned transaction did not take its shareholding above the legal threshold which would require it to do so.(2) Espírito Santo Irmãos, SGPS, SA's voting rights are attributed to Espírito Santo Industrial, SA, Espírito Santo Resources Limited, and
Espírito Santo Internacional, SA, companies which dominate Espírito Santo Irmãos, in that order.
(3) Mr. Joaquim Francisco Alves Ferreira de Oliveira is attributed the voting rights corresponding to 4.84% of the share capital since he controls
GRIPCOM, SGPS, SA, and Controlinveste International S.à.r.l., who hold respectively 2.26% and 2.58% of ZON Multimedia's share capital.
(4) Fundação José Berardo's shareholding and voting rights are reciprocal with the shareholding and voting rights of Metalgest - Sociedade de
Gestão, SGPS, SA.
(5) The voting rights of Ongoing Strategy Investments, SGPS S.A., are attributable to RS Holding, SGPS, S.A., as its majority shareholder, and
to Mrs. Isabel Maria Alves Rocha dos Santos, as majority shareholder of RS Holding, SGPS, S.A.
The following table presents the qualified holding of Caixa Geral de Depósitos, SA (“CGD”)
calculated under the terms of number 1 of article 20 of the Portuguese Securities Code.
Caixa Geral de Depósitos, SA 33,181,144 10.73%
Fidelidade - Companhia de Seguros, SA 219,874 0.07%
Fundo de Pensões da CGD 483,387 0.16%
Total 33,884,405 10.96%
Nr. Of Shares % Voting RightsShareholders
16/78 1H12 Consolidated Management Report
The following table presents the qualified holding of Banco Português de Investimento, SA (“BPI”)
calculated under the terms of number 1 of article 20 of the Portuguese Securities Code.
Fundo de Pensões do Banco BPI 23,287,499 7.53%
BPI Vida - Companhia de Seguros de Vida, SA 57,299 0.02%
Total 23,344,798 7.55%
Shareholders Nr. Of Shares % Voting Rights
The following table presents the qualified holding of Joaquim Alves Ferreira de Oliveira, calculated
under the terms of number 1 of article 20 of the Portuguese Securities Code.
Gripcom, SGPS, SA 6,989,704 2.26%
Controlinveste International, S.à.r.l. 7,965,980 2.58%
Total 14,955,684 4.84%
Shareholders Nr. Of Shares % Voting Rights
The following table presents the qualified holding of Ongoing, Strategic Investments, SGPS, SA,
calculated under the terms of number 1 of article 20 of the Portuguese Securities Code.
Insight Strategic Investments, SGPS, SA 5,688,106 1.84%
Ongoing Strategy Investments, SGPS, SA 4,419,513 1.43%
Investoffice - Investimentos e Consultoria Financeira, SA 50,000 0.02%
Nuno Vasconcellos 4,631 0.00%
Total 10,162,250 3.29%
Shareholders Nr. Of Shares % Voting Rights
The following table presents the qualified holding of Estêvão Neves – SGPS, SA, calculated under
the terms of number 1 of article 20 of the Portuguese Securities Code.
Estêvão Neves - SGPS, SA 6,991,113 2.26%
Enotel - SGPS, SA 1,785,580 0.58%
José Estêvão Fernandes Neves 299,089 0.10%
Total 9,075,782 2.94%
Shareholders Nr. Of Shares % Voting Rights
The following table presents the qualified holding of Grupo Visabeira, SGPS, SA, calculated under
the terms of number 1 of article 20 of the Portuguese Securities Code.
Grupo Visabeira, SGPS, SA 3,574,575 1.16%
Visabeira Investimentos Financeiros, SGPS, SA 3,067,355 0.99%
Total 6,641,930 2.15%
Shareholders Nr. Of Shares % Voting Rights
1H12 Consolidated Management Report 17/78
The following table presents the qualified holding of Banco Espírito Santo, SA (“BES”) calculated
under the terms of number 1 of article 20 of the Portuguese Securities Code.
Banco Espírito Santo, SA 3,002,737 0.97%
Members of the Corporate Bodies 1,517 0.00%
Companies within a control or Group relationship with BES 12,050,000 3.90%
Total 15,054,254 4.87%
Shareholders % Voting RightsNr. Of Shares
On 4 and 5 July 2012, Jadeium, B.V. and Caixa Geral de Depósitos, S.A., have disclosed to ZON Multimédia
changes in their Qualified Shareholdings. As such, the structure of ZON Multimedia’s Social Qualified
Shareholdings disclosed to the company as of the date of this report is as follows:
Jadeium, B.V. (1)
58,102,094 18.80%
Kento Holding Limited (1)
30,909,683 10.00%
Banco BPI, SA 23,344,798 7.55%
Espírito Santo Irmãos, SGPS, SA (2)
15,455,000 5.00%
Banco Espírito Santo, SA 15,054,254 4.87%
Joaquim Alves Ferreira de Oliveira (3)
14,955,684 4.84%
Fundação José Berardo (4)
13,408,982 4.34%
Ongoing Strategy Investments, SGPS, SA (5)
10,162,250 3.29%
Estêvão Neves - SGPS, SA (6)
9,075,782 2.94%
Grupo Visabeira, SGPS, SA (7)
6,641,930 2.15%
Norges Bank 6,379,164 2.06%
SGC, SGPS, SA (8)
6,182,000 2.00%
ESAF - Espírito Santo Fundos de Investimento Mobiliário, SA 6,088,616 1.97%
BES Vida - Companhia de Seguros, S. A. 5,721,695 1.85%
Metalgest - Sociedade de Gestão, SGPS, SA (4)
3,985,488 1.29%
Total 225,467,420 72.94%
(1) According to Articles 20(1)(b) and 21 of the Cód.VM the qualified holding is attributable to Ms. Isabel dos Santos, in her capacity of
shareholder of KENTO and Jadeium, B.V.
(2) Espírito Santo Irmãos, SGPS, SA's voting rights are attributed to Espírito Santo Industrial, SA, Espírito Santo Resources Limited, and
Espírito Santo Internacional, SA, companies which dominate Espírito Santo Irmãos, in that order.
(3) Mr. Joaquim Francisco Alves Ferreira de Oliveira is attributed the voting rights corresponding to 4.84% of the share capital since he controls
GRIPCOM, SGPS, SA, and Controlinveste International S.à.r.l., who hold respectively 2.26% and 2.58% of ZON Multimedia's share capital.
(4) Fundação José Berardo's shareholding and voting rights are reciprocal with the shareholding and voting rights of Metalgest - Sociedade de
(5) The voting rights of Ongoing Strategy Investments, SGPS S.A., are attributable to RS Holding, SGPS, S.A., as its majority shareholder, and
to Mrs. Isabel Maria Alves Rocha dos Santos, as majority shareholder of RS Holding, SGPS, S.A.
(6) The Qualified Shareholding of Estêvão Neves - SGPS, SA is attributable to Mr. José Estêvão Fernandes Neves, who owns the majority of
(7) Visabeira Investimentos Financeiros,SGPS,SA holds 0.99% of ZON Multimedia's share capital. 1.16% are held directly by Grupo Visabeira,
SGPS, SA. Visabeira Investimentos Financeiros,SGPS,SA is 100% held by Visabeira Estudos e Investimentos,SA, which is 100% held by
Visabeira Serviços,SGPS,SA, which is owned by Grupo Visabeira,SGPS,SA. The latter is 74.0104% held by Mr. Fernando Campos Nunes.
(8) SGC, SGPS, SA's holding is attributed to its majority shareholder, Mr. João Pereira Coutinho.
Note:The shareholdings of Banco BPI, S.A. and Banco Espírito Santo, S.A. were updated as of 30 June 2012, based on information provided
for the purposes of this Management Report.
Shareholders as of 23-08-2012 Nr. Of Shares % Voting Rights
A detailed record of the qualified shareholdings’ communications can be found at ZON Multimedia’s
corporate website, at www.zon.pt/ir.
18/78 1H12 Consolidated Management Report
4.5. Transactions of Own Shares
By the end of 1H12, within the scope of its Employee Share Plan and Share Savings Plan, aimed at
its employees, ZON Multimédia held a total of 322,683 own shares.
The table below illustrates the transactions of ZON Multimédia’s own shares which took place in
1H12, within the scope of the above mentioned Share Plans:
Description Nr. Of Shares
Balance as of 01-01-2012 265,612
Acquisitions (Employee Share Plan) 310,517
Disposals (Employee Share Plan) 253,446
Balance as of 30-06-2012 322,683
1H12 Consolidated Management Report 19/78
4.6. Business Review
Pay TV, Broadband and Voice
Homes Passed (1)
3,223.3 3,204.5 (0.6%) 3,223.3 3,204.5 (0.6%)
RGUs (2)
3,212.8 3,414.1 6.3% 3,212.8 3,414.1 6.3%
Cable RGUs per Subscriber (units) (3)
2.31 2.39 3.2% 2.31 2.39 3.2%
Basic Subscribers (4)1,552.8 1,586.3 2.2% 1,552.8 1,586.3 2.2%
o.w. Cable Subscribers 1,157.8 1,210.8 4.6% 1,157.8 1,210.8 4.6%
Triple Play Customers 678.5 730.9 7.7% 678.5 730.9 7.7%
% Triple Play Cable Customers 58.6% 60.4% 1.8pp 58.6% 60.4% 1.8pp
o.w. DTH Subscribers 395.0 375.5 (4.9%) 395.0 375.5 (4.9%)
Broadband Subscribers 714.8 751.5 5.1% 714.8 751.5 5.1%
Fixed Voice Subscribers 826.8 947.0 14.5% 826.8 947.0 14.5%
Mobile Subscribers 118.4 129.4 9.2% 118.4 129.4 9.2%
Blended ARPU ( Euros ) 35.8 34.7 (3.2%) 35.8 34.9 (2.5%)
Cinema (5)
Revenue per Ticket (Euros) 4.9 4.9 (1.0%) 4.8 4.8 0.4%
Tickets Sold 2,093.6 1,714.1 (18.1%) 4,110.0 3,439.0 (16.3%)
Screens (units) 217 210 (3.2%) 217 210 (3.2%)
(5) Portuguese operations.
1H12
(1) The number of homes passed was corrected in 3Q11, consisting of a database cleanup of around 86.5 thousand homes. Data for the previous quarters was not restated.
(3) Cable RGUs per Subscriber correspond to the sum of Cable Pay TV, Broadband and Voice Subscribers, divided by the number of Cable Pay TV Customers.
(4) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market
segments (residential, real estate and corporate), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels.
2Q11 1H12 / 1H11
(2) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile subscribers.
1H112Q12 2Q12 / 2Q11Business Indicators ('000)
The core Triple Play business remains very sound and resilient to the general macroeconomic strain. Customers are retaining their core Triple Play bundles however efforts to manage monthly spend are still being felt, with the disconnection of more discretionary services such as add-on premium channel subscriptions. At the high end of the customer spectrum, we continue to see very enthusiastic uptake of our our high-end “IRIS” Triple Play bundles, which help offset the ARPU dilution due to the decline in premium channel subscriptions.
Solid RGU growth, +99 thousand services in 1H12
ZON recorded another good semester in terms of RGU growth with 99 thousand net adds, reaching a total of 3,414 thousand services, representing 2.39 services per cable customer.
Pay TV base stable
The Pay TV subscriber base remained stable at 1,586 thousand subscribers, with net adds of 32.5 in the cable base, more than offsetting a 13.2 thousand subscriber decline in the DTH subscriber base. The analogue switch-off was concluded in May 2012, thus leading to a decline in the pace of acquisition of entry-level bundles designed to address homes choosing to take low end Pay TV solutions rather than migrate to DTT.
20/78 1H12 Consolidated Management Report
1H12 Consolidated Management Report 21/78
Over 161 thousand IRIS customers, 13% of cable base
At the other extreme of the customer mix, take-up of our high-end IRIS bundles remains high with 161.4 thousand subscribers at the end of 1H12, 13% of the cable customer base. The continued consumer enthusiasm with our IRIS service is related both to the very appealing combination of high-end TV, fibre Broadband and Fixed Voice offers and to the continuous innovation of the features offered. In 4Q11, ZON launched a very successful feature, Restart TV, whereby users of IRIS could go back to the beginning of a programme that was being broadcast. The new software version released to the market in July 2012 enables the viewer to go back to any programme that finished in the last two hours. Given the success of the service and the technical feasibility, the tendency is for this window of time to increase further. In addition, the IRIS user interface has been expanded and fine-tuned based on the users’ feedback. It now offers an even faster navigation experience and both a vertical and an horizontal electronic programming guide. Additional features have been rolled out, the most unique and innovative being the full integration of Facebook with the user interface. With Facebook on IRIS, customers can share likes, recommendations, view opinions, make status posts, amongst others, all within the IRIS interface, without accessing an external app. The ZON Online platform, which replicates the IRIS interface over laptops and tablets, was extended to smartphones, with the launch of its iPhone app in May. It has become a major incentive for customers to upgrade to the IRIS bundle. Finally the IRIS bundles’ value proposition has been reinforced with an upgrade of broadband speeds offered to 100 Mbps.
Continued growth in Broadband
ZON had a solid semester in terms of Broadband and Voice net adds. The proportion of cable customers that now take Broadband services was 62.1% at the end of 1H12, 751 thousand customers. Of these, the proportion of customers that are subscribing to speeds equal to or higher than 30 Mbps services continues to grow, having increased from 29% at the end of 2011 to 35% in 2Q12, bearing witness to ZON’s superior competitive position in the Broadband market, both in terms of speed offered (up to 360 Mbps) and coverage (3.2 million homes).
The largest WiFi network in Portugal: around 500 thousand hotspots, 971 million minutes of use
An additional feature that is providing a very strong anchor for ZON’s Double and Triple Play offers is the free access provided to the largest WiFi network in Portugal, “ZON@FON”, which by the end of 1H12 had already reached around 500 thousand hotspots with very high coverage density in the main urban centres, providing almost seamless online connectivity whilst on the go. To leverage the very strong value proposition of ZON@FON, ZON launched a campaign leading up to the summer months, not only promoting free access for ZON customers, but also promoting the network to other users and visitors to Portugal, at very competitive prices. In addition, hotspots were deployed on some of the most popular beach resorts in Portugal, to further raise awareness to this very appealing service.
Solid Fixed Voice Performance
22/78 1H12 Consolidated Management Report
Growth in Fixed Voice services remained very positive with net-adds of 63 thousand in 1H12. Total Fixed Voice customers are now 947.0 thousand, representing 76.2% of the cable customer base. The ZON Phone application, which allows customers to use their smartphones to make calls using their home phone number and tariffs wherever they are, is proving to be a huge success, providing customers with a unique way to save on their monthly telecom spend by replacing spend on mobile communications, domestic and roaming, with an IP based voice service. The customer only needs to secure access to a WiFi network, another of the advantages of having free access to the ZON@FON network as explained above.
731 thousand Triple Play customers
Triple Play customers across ZON’s customer base grew to 730.9 thousand in 1H12, up 7.7% yoy. Penetration of Triple Play customers as a percentage of the cable base increased again to 60.4%, and the proportion of customers taking two services, TV+BB or TV+Voice increased by 3.4 percentage points yoy to 17.6%.
Resilience of Basic Triple Play ARPU
Adjusting for the effect of lower discretionary premium channel revenues, basic ARPU continued to show resilience with a yoy decrease of 0.1% in 1H12 (-1% in 2Q12), supported by the stability of Triple Play services and growth in RGUs, the price increase which took place in January 2012 albeit with some dilution felt from entry level bundles. Adjusting for this dilution effect, basic ARPU would have grown by 0.9% in 2Q12 and by 1.6% in 1H12. Blended ARPU continued to be affected by pressure on premium channel revenues, and also by the dilution effect of entry level bundles, posting a decline of 2.5% to 34.9 euros.
Basic, Premium and Blended ARPU evolution (2Q11 = Base 1)
-3.2%
-1.0%
-14.2%
0.80
0.85
0.90
0.95
1.00
1.05
1.10
2Q11 3Q11 4Q11 1Q12 2Q12
Blended ARPU Basic ARPU Premium ARPU
#1 in TV Customer Satisfaction
ZON was recognized #1 in customer service satisfaction for TV in the Customer Satisfaction Survey run by leading market research agencies in Portugal. In all relevant indicators, ZON came out first. The results achieved have been improving every year which is particularly relevant given the much higher level of sophistication of the services provided, both in terms of user interface, features and set top boxes. This award is the result of all the hard work in this area to achieve excellence in customer service at all levels, whilst at the same time improving support systems and processes. Some of the key action areas have been the unification of customer support software platforms, innovative training and incentive based programmes for operators in addition to a strong focus on the quality of the facilities
1H12 Consolidated Management Report 23/78
and work-tools provided. These have led not only to easier and more efficient work flows, but to significant reductions in terms of the time taken to respond to customers and much higher success rates in first line calls. In addition to the obvious benefits in terms of customer satisfaction and loyalty, improvements in customer related support and technical processes translated into significant cost savings materialized in the need for less staffing of call centres, technical installation and repair teams.
Cinemas and Audiovisuals
In 1H12, ZON’s Cinema ticket sales declined by 16.3%, however the average revenue per ticket sold remained practically flat at 4.8 euros, with a marginal increase of 0.4%. Total Cinema revenues declined by 15.5% yoy in 1H12. In addition to the difficult macroeconomic environment, cinema box-office sales were negatively impacted by the increase in VAT on Cinema ticket sales from 6% to 13%, which came into effect as from the beginning of 2012. Revenues were also affected by comparatively lower 3D movie releases and subsequently box-office sales. Revenues from the sale of 3D movie tickets represented 23% of total box-office sales in 1H12, whereas they had represented around 29% in 1H11.
However, this represented a slightly better performance than the remainder of the market. As a whole, the market experienced a drop in tickets sold of 17.4% in 1H12, according to recently published data from the Portuguese Institute for Cinema and Audiovisuals, ICA. ZON’s share of tickets sold therefore increased to 56.1% during 1H12. As regards Cinema gross revenues performance, ZON’s relative performance was also stronger in comparison with the rest of the market, posting a 10.4% decrease in 1H12 whilst the total market’s gross revenues fell by 12.5%. The most successful films shown in 1H12 were “American Reunion”, “The Avengers”, “Sherlock Holmes: A Game of Shadows”, “Dr Seuss’ The Lorax”, and “The Descendants”. In 1H12, revenues in the Audiovisuals division slightly declined yoy by 0.1%. ZON Audiovisuais maintained its leading position in the distribution of movies for cinema exhibition, content and VoD distribution and sale of homevideo content in Portugal. Also affected by the downturn in cinema exhibition revenues in the market, ZON Audiovisuais was also affected by the decline in revenues from the sale of content rights to FTA channels that, due to the significantly lower level of advertising activity, are cutting back on the number of films exhibited in their programming grid. As regards movie distribution in 1H12, from the top 10 movies, ZON Lusomundo distributed 8, “American Reunion”, “The Avengers”, “Dr Seuss’ The Lorax”, “Hugo”, “The Dictator”, “Intouchables” “Snow White and the Huntsman” and “The Muppets”. According to ICA, in 1H12, ZON’s gross revenues in terms of Cinema Distribution declined by 8.9%, while the market as a whole experienced a drop of 12.5%. Reflecting this outperformance, ZON’s share of gross revenues in terms of cinema distribution in 1H12 stood at 52.7%.
International Growth - Africa
The operational performance of “ZAP”, ZON’s Pay TV Joint Venture in Angola and Mozambique, continues to be very strong and well above expectations in terms of subscriber growth. ZAP continues to be one of the top 5 advertisers in Angola, alongside Angola’s largest companies, transforming it into one of the most recognized brands in the territories where it is present. Backed by a very strong distribution and sales network with 13 own stores, over 700 other points of sale and a door-to-door sales force of 200, ZAP continued its successful marketing strategy, with results well above expectations in terms of customer uptake.
24/78 1H12 Consolidated Management Report
As from 1Q12, ZON started to proportionately consolidate its 30% stake in ZAP. In 2Q12, ZAP generated 24.2 million euros of revenues (7.3 million representing ZON’s stake in 2Q12 and 13.7 million euros in 1H12) and, having achieved EBITDA breakeven in 1Q12, in 2Q12 the company generated 1.9 million euros of EBITDA (of which ZON’s share was 0.6 million euros in 2Q12 and 0.7 million euros in 1H12). Although ZAP’s contribution to Net Income is still negative, it is rapidly coming close to breakeven, coming down from (2.3) million euros in 2Q11 to (0.6) million euros in 2Q12, with a cumulative effect of (1.9) million euros in 1H12.
1H12 Consolidated Management Report 25/78
4.7. Consolidated Financial Review
As from 1Q12, ZON’s 30% stake in its Angolan Pay TV joint-venture is being consolidated proportionately. Previously the operation was being consolidated through the equity method in financial results.
Operating Revenues 211.5 214.4 1.4% 425.6 428.6 0.7%
Pay TV, Broadband and Voice 191.6 191.0 (0.3%) 387.2 382.8 (1.1%)
Audiovisuals 17.7 17.6 (0.6%) 34.7 34.7 (0.1%)
Cinema 14.4 11.9 (17.2%) 28.0 23.7 (15.5%)
International 0.0 7.3 n.a. 0.0 13.7 n.a.
Others and Eliminations (12.2) (13.3) 8.8% (24.3) (26.3) 8.1%
Operating Costs Excluding D&A (132.9) (135.6) 2.0% (267.5) (270.1) 1.0%
W&S (14.4) (15.1) 4.9% (29.1) (29.4) 0.9%
Direct Costs (60.9) (59.3) (2.5%) (121.9) (117.7) (3.4%)
Commercial Costs (1) (12.1) (17.0) 40.1% (27.4) (33.2) 21.2%
Other Operating Costs (45.5) (44.1) (3.0%) (89.1) (89.8) 0.8%
EBITDA (2) 78.5 78.8 0.4% 158.0 158.5 0.3%
EBITDA Margin 37.1% 36.8% (0.4pp) 37.1% 37.0% (0.2pp)
Pay TV, Broadband and Voice 73.7 74.5 1.1% 147.1 150.0 2.0%
EBITDA Margin 38.5% 39.0% 0.5pp 38.0% 39.2% 1.2pp
Audiovisuals and Cinema Exhibition 4.8 3.8 (21.0%) 10.9 7.8 (29.1%)
EBITDA Margin 15.0% 12.9% (2.1pp) 17.4% 13.3% (4.2pp)
International 0.0 0.6 n.a. 0.0 0.7 n.a.
EBITDA Margin n.a. 7.8% n.a. n.a. 5.4% n.a.
Depreciation and Amortization (53.3) (51.5) (3.3%) (108.8) (107.5) (1.3%)
Income From Operations (3) 25.3 27.3 8.2% 49.2 51.0 3.7%
(Other Expenses) / Income (0.9) (0.9) (7.3%) (0.6) (0.9) 52.2%
Operating Profit (EBIT) (4) 24.3 26.5 8.8% 48.6 50.1 3.1%
(Financial Expenses) / Income (10.5) (10.7) 2.1% (20.8) (19.0) (8.4%)
Income Before Income Taxes 13.9 15.8 13.8% 27.8 31.1 11.7%
Income Taxes (4.6) (5.8) 25.7% (8.2) (10.5) 27.3%
Income From Continued Operations 9.2 10.0 7.8% 19.6 20.7 5.2%
o.w. Attributable to Non-Controlling Interests (0.0) (0.3) n.a. (0.2) (0.6) 175.7%
Net Income 9.2 9.7 5.0% 19.4 20.0 3.3%(1) Commercial costs include commissions, market ing and publicity expenses and costs of equipment sold.
(2) EBITDA = Income From Operat ions + Depreciat ion and Amort izat ion.
(4) EBIT = Income Before Financials and Income Taxes.
1H122Q12 / 2Q11Profit and Loss Statement
(Millions of Euros)2Q11 2Q12 1H12 / 1H111H11
(3) Income From Operat ions = Income Before Financials and Income Taxes + work force reduct ion programme costs + impairment of goodwill + Losses/Gains on disposal of f ixed assets + Other costs/ income.
Operating Revenues
Consolidated Operating Revenues increased in 1H12 yoy by 0.7% to 428.6 million euros. Performance of core Pay TV, BB and Voice Revenues was almost flat (-1.1%) reaching 382.8 million
26/78 1H12 Consolidated Management Report
euros. 2Q12 marked a significant improvement in the yoy pace of decline of these revenues, in comparison with previous quarters, as can be seen in the chart below.
Pay TV, Broadband and Voice Revenue YoY growth (%)
-3.0%-2.5%
-2.8%
-1.9%
-0.3%
-4%
-3%
-2%
-1%
0%
2Q11 3Q11 4Q11 1Q12 2Q12
Although the basic monthly ARPU revenues remain solid, subscription to add-on premium channels is still a source of pressure to revenues. Total ARPU revenues declined by 1% in 1H12 yoy, whereas ARPU revenues excluding premium channel revenues increased by 1.5%, thus offsetting a decline in premium channel revenues of 13.4%.
ARPU Revenues YoY growth (%)
+1.0%
-12.5%
0.80
0.85
0.90
0.95
1.00
1.05
2Q11 3Q11 4Q11 1Q12 2Q12
ARPU Revenues ex Premium Premium ARPU Revenues
Revenues from the Audiovisuals business posted a marginal decline of 0.1% however the Cinema exhibition business suffered a relevant decline of 15.5% yoy, explained by the weak attendance already described. As in previous quarters, this reduction was in fact slightly lower than the decline felt in global market revenues for cinema box office sale. It is becoming clear that the economic environment is taking its toll on cinema going as a form of entertainment, together with increase in VAT at the beginning of the year. ZON’s 30% stake in its international Pay TV operation in Angola and Mozambique rendered sales of 13.7 million euros in 1H12, with 2Q12 up to 7.3 million euros, from 6.4 million euros in 1Q12. The business is going extremely well with continued strong expansion of the subscriber base every month whilst maintaining a healthy level of ARPU.
1H12 Consolidated Management Report 27/78
EBITDA
Consolidated EBITDA grew by 0.3% in 1H12 to 158.5 million euros, generating an EBITDA margin of 37%. Core Pay TV, BB and Voice EBITDA reached 150 million euros in 1H12, representing an increase of 2% yoy. EBITDA margin measured as a percentage of revenues increased by 1.2 percentage points to 39.2%.
EBITDA Margins (%)
35.4%
39.0%
34.3%
36.8%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
Pay TV, Broadband and Voice Group
The Audiovisuals and Cinema business generated in 1H12 a lower EBITDA Margin of 13.3% (7.8 million euros), down 4.2pp from 17.4% in 1H1, and therefore contributed to a dilution in consolidated margin. Finally, the African JV is going very well, with EBITDA breakeven being achieved in 1Q12 after just 18 months of commercial operations, already contributing with EBITDA of 0.6 million euros in 2Q12 (7.8% EBITDA Margin). In 1H12, the African operation posted an EBITDA contribution of 0.7 million euros, with an EBITDA Margin of 5.4%.
Consolidated Operating Costs
Consolidated Operating Costs increased by 1% yoy to 270.1 million euros, however they are not directly comparable due to the consolidation of the African operation as from 1Q12. Excluding the impact of the African operation, total operating costs would have fallen by around 3% to 259.5 million euros. Wages and Salaries increased by 0.9% in 1H12 to 29.4 million euros when compared with 1H11, an increase yoy explained almost entirely by the proportionate consolidation of the operation of ZAP as from 1Q12. Excluding this effect, Wages and Salaries like for like would have decreased by 3.5%.
Direct Costs declined by 3.4% to 117.7 million euros, reflecting a combination of lower programming costs due to the lower level of premium channel subscriptions, which was somewhat offset by higher traffic related costs due to higher Broadband and Voice activity than last year. Excluding the impact of the consolidation of the African Operation, like for like direct costs would have fallen by 4.9%. Commercial Costs were up 21.2% yoy to 33.2 million euros, an increase explained mostly by the increase in COGS (Cost of Goods Sold) due to the fact that set top boxes at the ZAP operation are sold to customers, rather than rented as they are in the Portuguese operation, and therefore are expensed in the period they are sold. Excluding the impact of the African Operation, commercial costs would have decreased by 0.4%, on the back of stronger commercial activity for the entry level segment.
28/78 1H12 Consolidated Management Report
Other Operating Costs recorded a 0.8% increase yoy to 89.8 million euros in comparison with 1H11. Excluding the costs from consolidation of the African JV, other operating costs fell by 1.2% yoy. Relevant savings were achieved in core areas of the domestic business such as support services, as a result of the implementation of a number of efficiency improvement measures at the contact center level, maintenance and repairs and other SGA.
Net Income
Net Income was 20 million euros in 1H12, 3.3% higher than in 1H11. Depreciation and Amortization was somewhat lower at 107.5 million euros, compared with 108.8 million euros in 1H11 although D&A is still relatively high due to the significant accelerated CAPEX of the 2008-2010 investment cycle. Other Expenses in 1H12 were 0.9 million euros, reflecting mainly curtailment charges incurred in related to the implementation of redundancy programmes affecting 24 employees that will enable savings in W&S of 1 million euros on an annual basis. Net Financial Expenses decreased by 8.4% to 19 million euros in 1H12 however the two figures are not directly comparable given the change in consolidation method of the African operation expressed at the beginning of this section. Net Interest costs and other financial charges registered an increase of 16.5% led by a combination of higher average cost of debt and financing charges as a result of refinancing secured. This aggregate was also impacted by one-off effects relating to an impairment charge of the audiovisuals and cinema fund ”FICA”. In 1H11 ZON had a negative contribution from the consolidation of the African Operation of 5.1 million euros, which does not appear in this line anymore. For comparative purposes, the equivalent impact for 1H12 was a negative contribution at the EBT level of 1.8 million euros, therefore reflecting a considerable reduction from the negative impact in 2011. Income Taxes in 1H12 were 10.5 million euros representing an effective P&L tax rate of 34%, well above the general corporate tax rate of 29.5%. In 2Q12, the tax line reflected a couple of one-off effects, namely a correction in prior year tax incentive schemes accounted for and the aforementioned impairment charge which is not deducted for tax purposes.
CAPEX
In line with the trend of previous periods, CAPEX is consistently at lower levels than in previous years. In 1H12, CAPEX was 57.3 million euros, down 22.8% from 1H11. Terminal equipment still represented 29% of total CAPEX in 1H12, 16.8 million euros, albeit much lower than levels recorded in previous years. The decline is due to a combination of lower commercial activity and subsequent need for customer CAPEX and to the success of the equipment refurbishment process. Total CAPEX represented 15% of Pay TV, BB and Voice revenues, similar to the run-rate investment level of the sector, reflecting necessary maintenance investments and still some growth related investment. Excluding the impact of the consolidation of the African Operation, Total CAPEX would have been 23.4% lower than in 1H11.
1H12 Consolidated Management Report 29/78
Total CAPEX (Millions of Euros)
41.5 41.6 45.235.9 33.8 31.7
39.229.6 27.7
14.917.8
33.3
2.91.7 3.4
1.3
56.3 59.4
78.5
38.8 35.5 35.140.5
29.6 27.7
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
Baseline CAPEX Non-Recurrent CAPEX
Operating Cash Flow
EBITDA 78.5 78.8 0.4% 158.0 158.5 0.3%
CAPEX (35.5) (27.7) (21.8%) (74.3) (57.3) (22.8%)
Baseline CAPEX (33.8) (27.7) (17.9%) (69.6) (57.3) (17.7%)
Non-Recurrent CAPEX (1.7) 0.0 (100.0%) (4.6) 0.0 (100.0%)
Non-Cash Items Included in EBITDA-CAPEX(1)
and Change in Working Capital (13.9) 0.0 n.a. (48.9) (12.7) (74.1%)
Operating Cash Flow After Investment 29.2 51.1 75.4% 34.9 88.5 153.8%
Long Term Contracts (27.6) (5.4) (80.6%) (41.8) (18.2) (56.3%)
Net Interest Paid and Other Financial Charges (12.1) (8.8) (27.7%) (10.2) (16.3) 59.7%
Income Taxes Paid (3.9) (2.4) (36.5%) (4.5) (4.8) 6.5%
Disposals 0.0 0.0 n.a. 6.7 0.8 (88.0%)
Other Cash Movements (0.7) (1.0) n.a. (2.2) (0.1) (97.2%)
Free Cash-Flow (15.1) 33.6 n.a. (17.2) 49.9 n.a.
1H12 / 1H11
(1) This capt ion includes non-cash provisions included in EBITDA and non-cash CAPEX related to the upfront capitalizat ion of long term contracts.
Cash Flow (Millions of Euros) 2Q11 2Q12 2Q12 / 2Q11 1H11 1H12
EBITDA-CAPEX increased by 20.8% in 1H12 to 101.2 million euros primarily as a result of the aforementioned reduction in CAPEX and the stable yoy performance of EBITDA. Operating Cash Flow after Investment recorded a very strong increase yoy from 34.9 million euros in 1H11 to 88.5 million euros in 1H12. In 2Q12, Net Working Capital investment and other EBITDA non-cash adjustments were flat, therefore the strong Operating Cash Flow performance in 2Q12, in addition to the 8 million euros increase in EBITDA-CAPEX, reflects a significant yoy reduction in investment in working capital.
30/78 1H12 Consolidated Management Report
EBITDA - Total CAPEX and OCF After Investment (Millions of Euros)
51.1
51.1
-100
1020304050607080
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
EBITDA- Total CAPEX OCF After Investment
Free Cash Flow
Total FCF in 1H12 increased to 49.9 million euros, compared with negative 17.2 million euros in 1H11. In addition to the strong operating FCF momentum discussed above, the main item affecting FCF performance was a 56% decrease in Long Term Contract payments (-23.5 million euros). The accumulated FCF generated in 1H12 of 49.9 million euros is already fully covering the yearly dividend paid in 2012 of 49.5 million euros.
Free Cash Flow (Millions of Euros)
(8.7)
3.4
(7.0)(2.0)
(15.1)
37.930.8
16.3
33.6
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
1H12 Consolidated Management Report 31/78
Consolidated Balance Sheet
Current Assets 708.9 733.3
Cash and Equivalents 407.4 438.4
Accounts Receivable, Net 237.8 226.3
Inventories, Net 46.7 49.0
Taxes Receivable 5.1 4.5
Prepaid Expenses and Other Current Assets 11.9 15.0
Non-current Assets 1,076.7 1,038.2
Investments in Group Companies 0.5 0.3
Intangible Assets, Net 314.7 279.3
Fixed Assets, Net 647.1 639.5
Deferred Taxes 49.9 50.3
Other Non-current Assets 64.5 68.9
Total Assets 1,785.6 1,771.5
Current Liabilities 789.1 683.2
Short Term Debt 500.0 398.2
Accounts Payable 207.1 200.3
Accrued Expenses 56.5 57.1
Deferred Income 3.8 6.2
Taxes Payable 17.2 21.4
Current Provisions and Other Liabilities 4.6 0.1
Non-current Liabilities 761.5 884.4
Medium and Long Term Debt 729.4 864.6
Non-current Provisions and Other Liabilities 32.1 19.8
Total Liabilities 1,550.6 1,567.6
Equity Before Non-Controlling Interests 225.0 193.6
Share Capital 3.1 3.1
Own Shares (0.6) (0.7)
Reserves, Retained Earnings and Other 188.3 171.2
Net Income 34.2 20.0
Non-Controlling Interests 10.0 10.3
Total Shareholders' Equity 235.0 203.9
Total Liabilities and Shareholders' Equity 1,785.6 1,771.5
Balance Sheet (Millions of Euros) 2011 1H12
32/78 1H12 Consolidated Management Report
Capital Structure
At the end of June 2012, Net Financial Debt stood at 660.4 million euros, an increase of 22.8 million compared with the end of 2011. The increase in Net Debt is explained primarily by the positive FCF generation of 49.9 million euros previously explained, which was more than offset by the dividend payment of 49.5 million euros, which took place in 2Q12, and by the proportional consolidation in 2Q12 of the Net Debt of the International Business in the amount of 23.4 million euros. In 28 May 2012, ZON launched a public offering of fixed-rate bonds for the Portuguese retail market, with an initial amount of up to 100 million euros. The bonds bear interest at a fixed rate of 6.85%, with half-yearly interest payments in arrears, with a 3 year maturity. On 6 June, ZON announced that it had doubled the original size of the aforementioned bond issue from 100 to 200 million euros, due to overwhelming demand. This bond offer therefore met with great success from retail investors, the results being announced on 15 June showing a demand / issued bonds ratio of 158.83%, one of the highest in recent retail bond deals announced in the Portuguese market. The bonds were listed for trading on 19 June 2012. This success is a demonstration of ZON’s leading position and solid reputation in Portugal, and ensures that the company is fully financed until the end of 2014, having increased the average maturity of its Net Financial Debt to 2.26 years. The total interest rate hedging operations in place at the end of 1H12 was 257.5 million euros. Taking into account the aforementioned bonds of 200 million euros that bear interest at a fixed rate of 6.85%, the proportion of ZON’s Net Financial Debt that is protected against variations in interest rates is 69%. Total financial debt at the end of 1H12 amounted to 1,155.6 million euros, which was offset with a cash and short-term investments position on the balance sheet of 495.3 million euros. The all-in average cost of ZON’s Net Financial Debt was 4.56% for 1H12. Net Financial Gearing increased to 76.4% at the end of 1H12 compared with 73.1% at the end of 2011, and Net Financial Debt / EBITDA (last 4 quarters) stands at 2.1x. Total Net Debt of 768.3 million euros also includes commitments with Long Term Contracts recorded as liabilities on the Balance Sheet, of which the most relevant are long-term transponder, telecoms and content contracts.
Short Term 467.4 370.6 (20.7%)
Bank and Other Loans 462.4 364.1 (21.3%)
Financial Leases 5.0 6.5 30.8%
Medium and Long Term 640.4 785.0 22.6%
Bank Loans 628.6 775.6 23.4%
Financial Leases 11.7 9.4 (19.8%)
Total Debt 1,107.8 1,155.6 4.3%
Cash, Short Term Investments and Intercompany Loans 470.3 495.3 5.3%
Net Financial Debt 637.5 660.4 3.6%
Net Financial Gearing (1) 73.1% 76.4% 3.3pp
Net Financial Debt / EBITDA 2.0x 2.1x n.a.(1) Net Financial Gearing = Net Financial Debt / (Net Financial Debt + Total Shareholders' Equity).
Net Financial Debt (Millions of Euros) 2011 1H12 / 20111H12
1H12 Consolidated Management Report 33/78
4.8. Risks and Uncertainties for Future Periods
The implementation of ZON’s strategy is subject to the normal risks of a company which is operating
in a very competitive industry and which is exposed to the rapid pace of technological development.
ZON’s success depends on its ability to respond to the competitive market challenges; to continue to
innovate in its offer and in the technological development of its communications network and to
continue to deserve the preference of its subscribers, as the best and most stable Pay TV,
telecommunications and entertainment services operator.
An excessive increase in the market’s commercial aggressiveness may adversely affect ZON’s
ability to achieve its business objectives, particularly with regard to the subsidization and promotion
levels carried out by the market in order to capture new customers and, to the possible reduction of
the pricing level of services sold.
Operating in a sector with a strong technological nature it’s very important that ZON maintains its
innovative ability to launch new products and services and also the technological development of its
telecommunications network, supporting the development of these new offers and, at the same time,
ensuring excellence in customer service quality.
ZON has been investing in the technological development of its HFC network and has currently a
state-of-the-art platform, allowing it to successfully implement its future strategy. Naturally, it will
have to take into consideration competing technologies, which may provide Pay TV services like
IPTV and DTH. The emergence of large scale investment projects in fibre optic networks, may also
present itself as an alternative to offer integrated services: TV, Internet and Voice.
ZON defends the development of a competitive market, however safeguarding profitability levels
necessary to ensure continued investment of the operators in the quality of their telecommunications
network; development of new services and new content functionalities, thus providing subscribers
the best telecommunications and multimedia experiences, whilst guaranteeing an adequate return to
shareholders.
These risks and uncertainties include, among others, the continued and increasing customer use of
the Company’s services; technological changes; impacts of competition; outlook for the
telecommunications sector; changes in regulation and macroeconomic outlook.
Besides offering Pay TV, Broadband and Voice services in Portugal, through its HFC and DTH
network, ZON is also a partner (holds 30%) in a satellite Pay TV operation, “ZAP”, for the Angolan
and Mozambican markets.
Lisbon, 23 August 2012
The Board of Directors
34/78 1H12 Consolidated Management Report
05
Consolidated Financial Statements
1H12 Consolidated Management Report 35/78
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Consolidated Statement of Comprehensive Income for the Half Years ended on 30 June 2011 and 2012
(Amounts stated in thousands of euros)
Notes 2º Quarter 11 6M 11 2º Quarter 12 6M 12
( U naud it ) ( a) ( U naud it ) ( a)
REVENUES:
Services rendered 204 818 411 326 204 718 410 054
Sales 5 559 12 072 8 142 15 664
Other operating revenues 1 075 2 167 1 562 2 877
5 211 453 425 565 214 422 428 595
COSTS, LOSSES AND GAINS:
Wages and salaries 14 416 29 127 15 129 29 389
Direct costs 60 855 121 923 59 310 117 725
Costs of products sold ( 101) 2 123 4 098 8 179
Marketing and advertising 4 822 9 748 6 426 11 490
Support services 16 029 34 971 15 171 30 689
Supplies and external services 33 810 67 447 31 717 64 569
Other operational costs 131 376 142 584
Taxes 1 260 2 679 1 136 2 886
Provisions and adjustments 6 1 713 ( 866) 2 460 4 579
Depreciation, amortisation and impairment losses 7 53 261 108 827 51 509 107 455
Reestructuring costs 888 1 039 896 981
Losses/(gains) on sale of assets, net 32 ( 526) ( 156) ( 229)
Other losses/(gains), net ( 3) 93 110 171
187 112 376 962 187 948 378 469
Income before financial results and taxes 24 341 48 604 26 474 50 126
Financial costs 8 6 065 12 122 5 675 11 719
Net foreign exchange losses/(gains), net ( 136) ( 157) ( 19) ( 128)
Net losses/(gains) on financial assets, net - - 1 192 601
Equity in earnings of affiliated companies, net 9 2 318 5 148 80 165
Net other financial expenses/(income) 8 2 213 3 655 3 750 6 663
10 460 20 767 10 679 19 020
Income before taxes 13 881 27 837 15 795 31 106
Income taxes 10 4 635 8 212 5 827 10 451
Net consolidated income 9 246 19 625 9 968 20 654
Attributable to:
Non-controlled interests 3 223 266 615
Zon Multimédia Group shareholders 9 243 19 402 9 702 20 039
Earnings per share
Basic - euros 11 0,03 0,06 0,03 0,06
Diluted - euros 11 0,03 0,06 0,03 0,06
(a) As standard practice, only the half-year and annual accounts are audited; the half-yearly results are not audited separately.
The Notes to the Financial Statements form an integral part of the consolidated statement of comprehensive income for the
half year ended on 30 June 2012.
Accountant The Board of Directors
36/78 1H12 Consolidated Management Report
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Consolidated Statement of Comprehensive Income for the Half Years ended on 30 June 2011 and 2012
(Amounts stated in thousands of euros)
6M 11 6M 12
Net income for the year 19 625 20 654
Fair value of interest rate swap (Note 17) 1 625 ( 1 606)
Fair value of exchange rate forward (Note 17) ( 41) ( 242)
Currency translation differences ( 1) ( 142)
Other movements 47 -
Other comprehensive income 1 630 ( 1 991)
Total comprehensive income for the year 21 255 18 664
Attributable to:
Share owners of the company 21 033 18 049
Non-controlling interests 223 615
21 256 18 664
The Notes to the Financial Statements form an integral part of the consolidated statement of comprehensive income for the
half year ended on 30 June 2012.
Accountant The Board of Directors
1H12 Consolidated Management Report 37/78
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Consolidated Statement of Financial Position at 31 December 2011 and 30 June 2012
(Amounts stated in thousands of euros)
Notes 31-12-2011 30-06-2012
Assets
Current assets:
Cash and cash equivalents 13 407 362 438 419
Accounts receivable - trade 124 757 122 628
Accounts receivable - other 113 060 103 707
Inventories 46 741 49 015
Taxes receivable 5 081 4 506
Non-current assets held-for-sale 876 678
Prepaid expenses 10 530 14 121
Derivative financial instruments 17 532 190
Total current assets 708 939 733 264
Non-current assets:
Accounts receivable - other 21 317 25 399
Investments in participated companies 470 286
Investments held-to-matutrity 20 489 21 959
Available-for-sale financial assets 21 823 20 629
Intangible assets 314 666 279 281
Tangible assets 647 126 639 505
Investment property 886 863
Deferred income tax assets 10 49 895 50 286
Total non-current assets 1 076 672 1 038 207
Total assets 1 785 611 1 771 472
Liabilities
Current liabilities:
Borrowings 14 499 961 398 149
Accounts payable-trade 153 108 157 510
Accounts payable-other 54 005 42 793
Accrued expenses 56 477 57 130
Deferred income 3 775 6 166
Taxes payable 17 156 21 351
Provisions for other liabilities and charges 15 4 234 120
Derivative financial instruments 17 350 -
Total current liabilities 789 066 683 219
Non-current liabilities:
Borrowings 14 729 424 864 606
Accounts payable-other 786 831
Defered income 1 881 1 617
Provisions for other liabilities and charges 15 23 006 9 055
Deferred income tax liabilities 10 4 207 3 522
Derivative financial instruments 17 2 227 4 761
Total non-current liabilities 761 531 884 392
Total liabilities 1 550 597 1 567 611
Shareholder's equity
Share capital 16.1 3 091 3 091
Treasury shares 16.2 ( 554) ( 730)
Legal reserve 16.3 3 556 3 556
Other reserves 16.3 162 919 164 340
Retained earnings 56 018 23 334
Equity before non-controlled interests 225 030 193 591
Non-controlled interests 9 984 10 269
Total equity 235 014 203 860
Total liabilities and shareholder's equity 1 785 611 1 771 472
The Notes to the Financial Statements form an integral part of the consolidated statement of financial position as at 30 June
2012.
Accountant The Board of Directors
38/78 1H12 Consolidated Management Report
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Consolidated Statement of Changes in Shareholders' Equity for the Half Years ended on 30 June 2011 and 2012
(Amounts stated in thousands of euros)
Notes Share capital
Capital
issued
premium
Treasury
shares
Legal
reserve
Other
reserves
Accumulated
earnings
Non-controlled
interests Total
Balance as at 1 January 2011 3 091 ( 17) ( 0) 3 556 155 146 78 517 9 891 250 183
Dividends attributed to non-controlled interests 12 - - - - - - ( 542) ( 542)
Dividends paid 12 - - - - ( 14 277) ( 35 178) - ( 49 455)
Aquisition of treasury shares 16.3 - ( 677) ( 2) - - - - ( 679)
Distribuition of treasury shares 16.3 - 652 2 - ( 653) - - -
Share Plan 16.3 - - - - 2 282 ( 1 372) - 910
Comprehensive income for the period - - - - 1 630 19 402 223 21 256
Consolidation differences - - - - ( 324) ( 78) ( 9) ( 412)
Balance as at 30 June 2011 3 091 ( 43) - 3 556 143 804 61 291 9 562 221 261
Balance as at 1 January 2012 3 091 ( 552) ( 3) 3 556 162 919 56 018 9 984 235 014
Dividends attributed to minority interests 12 - - - - - - ( 329) ( 329)
Dividends paid 12 - - - - ( 14 730) ( 34 708) - ( 49 438)
Undistributed profit - - - - 18 016 ( 18 016) - -
Aquisition of treasury shares 16.3 - ( 713) ( 3) - - - - ( 716)
Distribuition of treasury shares 16.3 - 538 3 - ( 540) - - -
Share Plan 16.3 - - - - 1 005 - - 1 005
Comprehensive income for the period - - - - ( 1 991) 20 039 615 18 664
Consolidation differences - - - - ( 339) - - ( 339)
Balance as at 30 June 2012 3 091 ( 727) ( 3) 3 556 164 340 23 334 10 269 203 860
The Notes to the Financial Statements form an integral part of the consolidated statement of changes in shareholders' equity
for the half year ended on 30 June 2012.
Accountant The Board of Directors
1H12 Consolidated Management Report 39/78
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Consolidated Statement of Cash Flows for the Half Years ended on 30 June 2011 and 2012
(Amounts stated in thousands of euros)
Notes 6M 11 6M 12
OPERATING ACTIVITIES
Collections from clients 513 423 530 768
Payments to suppliers ( 331 981) ( 309 213)
Payments to employees ( 30 369) ( 29 302)
Payments relating to income taxes ( 4 531) ( 4 825)
Other cash receipts / payments related with operating activities ( 13 999) ( 48 923)
Cash flow from operating activities (1) 132 544 138 504
INVESTING ACTIVITIES
Cash receipts resulting from
Financial investments 6 667 -
Tangible fixed assets 32 1 269
Loans granted 3 450 2 415
Interest and related income 8 100 9 053
18 250 12 737
Payments resulting from
Financial investments ( 10) ( 6)
Tangible fixed assets ( 100 030) ( 48 642)
Intangible assets ( 989) ( 2 089)
Loans granted ( 15 448) ( 6 313)
( 116 478) ( 57 049)
Cash flow from investing activities (2) ( 98 228) ( 44 312)
FINANCING ACTIVITIES
Cash receipts resulting from
Loans obtained 736 500 1 521 737
736 500 1 521 737
Payments resulting from
Loans obtained ( 541 000) ( 1 479 783)
Lease rentals (principal) ( 42 689) ( 23 230)
Interest and related expenses ( 21 935) ( 36 807)
Dividends ( 49 996) ( 49 767)
Acquisition of treasury shares ( 679) ( 716)
Other ivestment activities - ( 100)
( 656 299) ( 1 590 403)
Cash flow from financing activities (3) 80 201 ( 68 666)
Change in cash and cash equivalents (4)=(1)+(2)+(3) 114 517 25 527
Effect of exchange differences ( 742) 188
Cash and cash equivalents at the beginning of the period 264 646 407 362
Changes in the consolidated scope - 2 491
Cash and cash equivalents at the end of the period 13 378 421 435 569
The Notes to the Financial Statements form an integral part of the consolidated statement of cash flows for the half year
ended on 30 June 2012.
Accountant The Board of Directors
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
40/78 1H12 Consolidated Management Report
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Notes to the Consolidated Financial Statements at 30 June 2012
Index of notes to the consolidated financial statements
1. Introductory Note 41
2. Accounting Policies 42
3. Judgements and estimates 42
4. Changes in the consolidation perimeter 42
5. Segment Reporting 43
6. Provisions and adjustments 45
7. Depreciation, amortisation and impairment losses 46
8. Finance costs and other net financial costs/(income) 46
9. Losses/(gains) in associated companies 47
10. Income tax expense 47
11. Earnings per share 50
12. Dividends 51
13. Cash and cash equivalents 51
14. Borrowings and loans 52
15. Provisions 54
16. Shareholder's equity 56
17. Derivative financial instruments 58
18. Guarantees and financial undertakings 59
19. Related Parties 61
20. Legal actions 65
21. Share incentive scheme 68
22. Subsequent events 69
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 41/78
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
Notes to the Consolidated Financial Statements at 30 June 2012
(Amounts stated in thousands of euros)
1. Introductory Note
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. (“ZON Multimédia” or “the
Company”) was set up by Portugal Telecom, SGPS, S.A. (“Portugal Telecom”) on 15 July 1999 with the
purpose of developing its strategy for the multimedia business.
During the 2007 financial year, Portugal Telecom proceeded with the spin-off of ZON Multimédia through
the attribution of its shares in this company to its shareholders, which then became fully independent from
Portugal Telecom.
The multimedia business operated by ZON Multimédia and the associated companies comprising its
portfolio of companies (“ZON Group” or “Group”) includes cable and satellite television services, voice and
internet access services, video production and sale, Pay TV channel advertising, cinema exhibition and
distribution, and the production of channels for Pay TV.
ZON Multimédia shares are listed on the Euronext Lisbon market.
The cable and satellite television service is supplied by ZON TV Cabo Portugal, S.A. (“ZON TV Cabo”) and
its subsidiaries ZON TV Cabo Açoreana, S.A. (“ZON TV Cabo Açoreana”), ZON TV Cabo Madeirense, S.A.
(“ZON TV Cabo Madeirense”) and also by Finstar - Sociedade de Investimentos e Participações S.A.
(“Finstar”) and Mstar, S.A. (“Mstar”). The activities of these companies include: a) cable and satellite
television distribution; b) the operation of electronic communications services, including data and
multimedia communication services in general; c) IP voice services (“VOIP” – Voice over IP); d) mobile
virtual network operator (MVNO); and e) the provision of consultancy and similar services directly or
indirectly related to the above mentioned activities and services. The business of ZON TV Cabo, ZON TV
Cabo Açoreana and ZON TV Cabo Madeirense is regulated by Law 5/2004 (Electronic Communications
Law), which establishes the legal regime governing electronic communications networks and services.
ZON Conteúdos – Atividade de Televisão e de Produção de Conteúdos, S.A. (“ZON Conteúdos”), ZON
Lusomundo TV, Lda. (“ZON Lusomundo TV”), Sport TV Portugal, S.A. (“Sport TV”) and Dreamia – Serviços
de Televisão, S.A. (“Dreamia SA”) operate in the television and content production business, and currently
produce movie, series, sport and children’s channels which are distributed by ZON TV Cabo and its
subsidiaries, as well as by other operators. ZON Conteúdos also manages the advertising space on Pay TV
channels and in the cinemas of ZON Lusomundo Cinemas, S.A. (“ZON LM Cinemas”).
ZON Lusomundo Audiovisuais, S.A. (“ZON LM Audiovisuais”) and ZON LM Cinemas and their subsidiaries
operate in the audiovisual sector, which includes video production and sale, cinema distribution and
exhibition, and the acquisition/negotiation of Pay TV and VOD (video-on-demand) rights.
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
42/78 1H12 Consolidated Management Report
The notes in these Notes to the Consolidated Financial Statements follow the order in which the items are
shown in the consolidated financial statements.
The consolidated financial statements for the financial year ended on 30 June 2012 were approved by the
Board of Directors and their issue authorised on 23 August 2012.
2. Accounting Policies
The consolidated financial statements were prepared on a going concern basis from the books and
accounting records of the companies included in the consolidation (Annex I), using the historical cost
convention, adjusted where applicable by the valuation of financial assets and liabilities (including
derivatives) at fair value.
The accounting policies adopted, including the financial risk management policies, are consistent with those
used in the preparation of the financial statements for the financial year ended on 31 December 2011.
2.1. Principles of presentation
The consolidated financial statements of ZON Multimédia were prepared using accounting policies
consistent with International Financial Reporting Standards (“IAS/IFRS”), as adopted in the European Union
on 1 January 2012, and in accordance with IAS 34 - Interim Financial Reporting.
3. Judgements and estimates
During the half year ended on 30 June 2012, no significant changes occurred in the accounting estimates
compared with those used in the preparation of the financial statements for the year ended on 31 December
2011, nor were any material errors relating to previous financial years recognised.
4. Changes in the consolidation perimeter
In the fourth quarter of 2011, ZON Finance B.V. (“ZON Finance”), 100% owned by the Group, was included
in the consolidation perimeter.
In 2012 two new companies were included in the consolidation perimeter: Finstar, which is 30% owned by
Teliz, and Upstar Comunicações S.A. (“Upstar”), which is 30% owned by ZON Multimédia (see Annex I c)).
The holdings in these two companies were stated in 2011 by the equity method (Note 9).
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The impact on the statement of comprehensive income and on the financial position at 30 June 2012 is
shown below:
Statement of Comprehensive Income Finstar Upstar ZON Finance BV Total
Revenue 12 942 ( 1 580) - 11 362
Costs 8 353 2 893 7 11 252
Operating income 4 589 ( 4 473) ( 7) 110
Financial results 1 189 ( 786) ( 4) 399
Other (intercompany) ( 5 779) 5 261 - ( 518)
Income before taxes ( 0) 3 ( 11) ( 8)
Income taxes - ( 3) - ( 3)
Net income ( 0) ( 0) ( 11) ( 11)
Statement of Financial Position Mstar Upstar ZON Finance BV Total
Asset 6 605 ( 7 572) 27 ( 939)
Liability 10 996 13 325 9 24 330
( 4 391) ( 20 897) 18 ( 25 269)
5. Segment Reporting
5.1. Main report format – business segments
The business segments are as follows:
Pay TV, broadband and voice relates mainly to the supply of TV, Internet (fixed and mobile) and
voice (fixed and mobile) services and includes the following companies: ZON Multimédia, ZON
Televisão por Cabo, SGPS, S.A. (“ZON Televisão por Cabo”), ZON TV Cabo, ZON TV Cabo
Açoreana, ZON TV Cabo Madeirense, ZON Conteúdos, ZON Lusomundo TV, Teliz Holding B.V.,
ZON Finance and the joint ventures in Sport TV, Mstar, Upstar and Finstar.
Audiovisuals relates to the supply of video production services and video sales, cinema distribution
and cinema exhibition services and the acquisition/negotiation of Pay TV and VOD (video-on-
demand) rights and includes the following companies: ZON Audiovisuais, SGPS, S.A. (“ZON
Audivisuais SGPS”), ZON Cinemas, SGPS, S.A. (“ZON Cinemas SGPS”), ZON LM Audiovisuais,
ZON LM Cinemas, Lusomundo Moçambique, Lda. (“Lusomundo Moçambique”), Lusomundo
España, SL (“Lusomundo España”), Grafilme – Sociedade Impressora de Legendas, Lda.
(“Grafilme”), Lusomundo Imobiliária 2, S.A. (“Lusomundo Imobiliária 2“), Lusomundo Sociedade de
Investimentos Imobiliários, SGPS, S.A. (“Lusomundo SII”), Empracine – Empresa Promotora de
Actividades Cinematográficas, Lda. (“Empracine”) and the joint venture in Dreamia B.V. and
Dreamia S.A.
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The results by segment for the half years ended on 30 June 2011 and 2012 are shown below:
2º Quarter 11 6M 11 2º Quarter 11 6M 11 2º Quarter 11 6M 11
Total segment revenue 192 520 389 001 29 230 57 737 221 750 446 737
Inter-segment revenue ( 4 321) ( 8 871) ( 5 975) ( 12 301) ( 10 297) ( 21 172)
Sales and services rendered 188 198 380 129 23 255 45 436 211 453 425 565
Operational income by segment 22 405 42 481 1 936 6 122 24 341 48 604
Net interest expense and other 7 661 14 735 482 884 8 143 15 619
Loss / (Gains) in financial assets - - - - - -
Share of loss/(profit) from associates 2 302 5 109 16 39 2 318 5 148
Income before taxes 12 442 22 637 1 438 5 200 13 881 27 837
Income tax expense 4 141 6 795 494 1 417 4 635 8 212
Net income 8 301 15 842 945 3 783 9 246 19 625
Other costs:
Depreciation, amortisation and impairment 51 898 105 980 1 363 2 847 53 261 108 827
Provisions and adjustments 1 736 ( 946) ( 23) 80 1 713 ( 866)
Costs / (revenues) non-recurrent 244 ( 68) 673 675 917 607
GroupPay TV, broadband and voice Audiovisuals
2º Quarter 12 6M 12 2º Quarter 12 6M 12 2º Quarter 12 6M 12
Total segment revenue 197 924 396 126 27 021 54 041 224 945 450 167
Inter-segment revenue ( 4 721) ( 9 632) ( 5 804) ( 11 941) ( 10 524) ( 21 572)
Sales and services rendered 193 203 386 494 21 217 42 101 214 422 428 595
Operational income by segment 24 318 45 647 2 157 4 478 26 475 50 126
Net interest expense and other 9 380 17 724 27 531 9 407 18 254
Loss / (Gains) in financial assets 1 182 1 182 10 ( 582) 1 192 601
Share of loss/(profit) from associates - - 80 165 80 165
Income before taxes 13 755 26 741 2 040 4 365 15 795 31 106
Income tax expense 5 419 9 309 408 1 143 5 827 10 451
Net income 8 336 17 432 1 632 3 222 9 968 20 654
Other costs:
Depreciation, amortisation and impairment 50 236 104 858 1 272 2 598 51 508 107 455
Provisions and adjustments 2 220 4 126 240 453 2 460 4 579
Costs / (revenues) non-recurrent 801 868 49 55 850 923
GroupPay TV, broadband and voice Audiovisuals
Inter-segment transactions are effected on market terms and conditions in a comparable way to
transactions effected with third parties.
Assets and liabilities by segment, and investments in tangible fixed assets at 31 December 2011, are
shown below:
Pay TV, broadband
and voice Audiovisuals Eliminations Not allocated Group
Assets 1 671 101 148 062 ( 128 057) 94 035 1 785 141
Investment in associated companies 132 338 - - 470
Total assets 1 671 233 148 400 ( 128 057) 94 035 1 785 611
Liabilities 326 930 117 210 ( 128 057) 1 234 514 1 550 597
Investment in tangible assets 142 922 3 173 - - 146 095
Investment in intangible assets 54 103 3 - - 54 106
Assets and liabilities not allocated to segments are reconciled with total assets and liabilities as follows:
Assets Liabilities
Not allocated:
Deferred tax (Note 10) 49 895 4 207
Income tax expense 66 922
Borrowings - current (Note 14) - 499 961
Borrowings - non current (Note 14) - 729 424
Available-for-sale financial assets 21 823 -
Non-current assets held-for-sale 876 -
Investments held-to-maturity 20 489 -
Investment property 886 -
94 035 1 234 514
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Assets and liabilities by segment, and investments in tangible fixed assets at 30 June 2012, are shown
below:
Pay TV, broadband
and voice Audiovisuals Eliminations Not allocated Group
Assets 1 666 884 152 331 ( 142 878) 94 848 1 771 186
Investment in associated companies 105 181 - - 286
Total assets 1 666 989 152 512 ( 142 878) 94 848 1 771 472
Liabilities 309 699 127 205 ( 142 878) 1 273 585 1 567 611
Investment in tangible assets 54 527 1 437 - - 55 964
Investment in intangible assets 716 - - - 717
Assets and liabilities not allocated to segments are reconciled with total assets and liabilities as follows:
Assets Liabilities
Not allocated:
Deferred tax (Note 10) 50 286 3 522
Income tax expense 433 7 308
Borrowings - current (Note 14) - 398 149
Borrowings - non current (Note 14) - 864 606
Available-for-sale financial assets 20 629 -
Non-current assets held-for-sale 678 -
Investments held-to-maturity 21 959 -
Investment property 863 -
94 848 1 273 585
6. Provisions and adjustments
In the half years ended on 30 June 2011 and 2012, provisions and adjustments were composed as follows:
2º Quarter 11 6M 11 2º Quarter 12 6M 12
Provisions (Note 15) ( 456) ( 5 975) - -
Provision for impairment of trade receivable 2 175 5 117 2 462 4 583
Provision for impairment of other receivable - - - -
Debts recovery ( 7) ( 7) ( 1) ( 4)
1 713 ( 866) 2 460 4 579
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7. Depreciation, amortisation and impairment losses
In the half years ended on 30 June 2011 and 2012, depreciation, amortisation and impairment losses were
composed as follows:
2º Quarter 11 6M 11 2º Quarter 12 6M 12
Intangible assets:
Industrial property and other rights 17 322 36 004 18 642 37 865
Other intangible assets 572 1 173 496 994
17 894 37 177 19 138 38 860
Tangible assets:
Buildings and other constructions 930 1 887 817 1 714
Basic equipment 28 657 58 536 24 014 53 131
Transportation equipment 487 958 436 896
Tools and dies 2 4 1 2
Administrative equipment 4 714 8 994 3 324 7 729
Other tangible assets 529 1 100 609 1 286
35 318 71 480 29 201 64 758
Depreciation and amortisation 53 212 108 657 48 339 103 617
Impairment losses 49 170 3 170 3 838
53 261 108 827 51 509 107 455
The variation in depreciation, amortisation and impairment losses is attributable to the impact of
approximately 4.8 million euros resulting from the review of the useful lives of tangible assets undertaken in
2012.
8. Finance costs and other net financial costs/(income)
In the half years ended on 30 June 2011 and 2012, finance costs and other financial costs/ (income) were
composed as follows:
2º Quarter 11 6M 11 2º Quarter 12 6M 12
Interest expense:
Borrowings 9 770 17 445 9 686 20 179
Finance leases 1 161 2 695 834 1 906
Other 100 200 69 138
11 032 20 340 10 590 22 224
Interest earned ( 4 967) ( 8 218) ( 4 914) ( 10 504)
6 065 12 122 5 675 11 719
Other financial costs:
Comissions and guarantees 2 836 4 905 2 797 6 054
Prompt payment discount 1 3 1 2
Other 226 384 1 594 2 106
3 063 5 292 4 391 8 162
Other financial income:
Prompt payment discount ( 849) ( 1 638) ( 641) ( 1 499)
2 213 3 655 3 750 6 663
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9. Losses/(gains) in associated companies
In the half years ended on 30 June 2011 and 2012 this item was composed as follows:
2º Quarter 11 6M 11 2º Quarter 12 6M 12
Equity accounting:
Distodo 16 39 72 158
Canal 20 TV 1 1 - -
Upstar (note 4) 8 ( 5) - -
Finstar (note 4) 2 293 5 112 - -
Big Picture 2 Films - - 8 7
2 318 5 148 80 165
10. Income tax expense
ZON Multimédia and its associated companies are subject to IRC - Corporate Income Tax - at the rate of
25% (17.5% in the case of ZON TV Cabo Açoreana), plus IRC surcharge at the maximum rate of 1.5% on
taxable profit, giving an aggregate rate of approximately 26.5%. Following the introduction of the austerity
measures approved by Law 12-A/2010 of 30 September and subsequently in the 2012 State Budget,
approved by Law 64-B/2011 of 30 December, this rate was raised to 3% on the amount of a company’s
taxable profit between 1.5 million euros and 10 million euros, and to 5% on the amount of a company’s
taxable profit exceeding 10 million euros. In the calculation of taxable income, to which the above tax rates
apply, amounts which are not fiscally allowable are added to and subtracted from the book results. These
differences between accounting income and taxable income may be of a temporary or permanent nature.
ZON Multimédia is taxed in accordance with the special taxation regime for groups of companies (RETGS),
which covers the companies in which it directly or indirectly holds at least 90% of their share capital and
which fulfil the requirements of Article 69 of the IRC Code.
The companies covered by the RETGS in 2012 are:
ZON Multimédia
ZON Lusomundo TV
Empracine
Lusomundo SII
ZON Cinemas SGPS
ZON Audiovisuais SGPS
ZON TV Cabo
ZON Televisão por Cabo
Lusomundo Imobiliária 2
ZON LM Audiovisuais
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ZON LM Cinemas
ZON Conteúdos
Upstar
Under current legislation, tax declarations are subject to review and correction by the tax authorities for a
period of four years (five years in the case of Social Security), except where tax losses have occurred
(where the period is five or six years) or tax benefits have been obtained or inspections, appeals or disputes
are in progress, in which case, depending on the circumstances, the periods are extended or suspended.
The Board of Directors of ZON Multimédia, based on information from its tax advisers, believes that these
and any other revisions and corrections to these tax declarations, as well as other contingencies of a fiscal
nature, will not have a significant effect on the consolidated financial statements as at 30 June 2012, except
for situations which were the subject of provisions (Note 15).
a) Deferred tax
ZON Multimédia and its associated companies have reported deferred tax relating to temporary differences
between the taxable basis and the book amounts of assets and liabilities, and tax losses carried forward at
the date of the statement of financial position.
The movements in deferred tax assets and liabilities for the half years ended on 30 June 2011 and 2012
were as follows:
Equity
31-12-2010
Deferred taxes of
the period
Deferred taxes of
the period Other movements 30-06-2011
Deferred income tax assets:
Provisions and impairments:
Doubtful accounts receivable 7 696 ( 225) - ( 392) 7 080
Inventories 1 443 ( 45) - - 1 398
Other 19 890 1 461 - 97 21 448
Intragroup gains 20 529 ( 1 162) - - 19 367
Derivatives 660 - ( 560) - 100
Tax losses carried forward 818 - - - 818
51 037 28 ( 560) ( 295) 50 211
Deferred income tax liabilities:
Reavaluation of fixed assets 5 259 (607) - - 4.652
Derivatives - - 15 - 15
Other provision and adjustments - 1 998 - - 1 998
5 259 1 391 15 - 6 665
Net deferred tax 45 778 ( 1 363) ( 575) ( 295) 43 546
Income (note b))
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Equity
31-12-2011
Deferred taxes of
the period
Deferred taxes of
the period 30-06-2012
Deferred income tax assets:
Provisions and impairments:
Doubtful accounts receivable 7 096 ( 127) - 6 969
Inventories 1 508 22 - 1 530
Other provisions and adjustments 21 584 1 080 - 22 664
Intragroup gains 18 205 ( 1 162) - 17 043
Derivatives 683 - 578 1 262
Tax losses carried forward 818 - - 818
49 895 ( 188) 578 50 286
Deferred income tax liabilities:
Reavaluation of fixed assets 4 052 ( 585) - 3 467
Derivatives 154 - ( 99) 55
4 207 ( 585) ( 99) 3 522
Net deferred tax 45 689 397 677 46 764
Income (note b))
At 30 June 2012, the deferred tax liability relating to the revaluation of tangible fixed assets results from the
difference in the acquisition at fair value of the assets (customer portfolio and network) of TVTel and the
companies of the Parfitel Group (Bragatel, Pluricanal Leiria and Pluricanal Santarém).
Deferred tax assets were recognised where it is probable that taxable profits will occur in future that may be
used to absorb tax losses or deductible tax differences. This assessment was based on the business plans
of the Group’s companies, which are regularly revised and updated.
Under the terms of current legislation in Portugal, tax losses generated up to 2009, or in 2010 and 2011,
and from 2012 onwards may be carried forward for a period of six years, four years and five years,
respectively, after their occurrence and may be deducted from taxable profits generated during that period.
At 30 June 2012 and 30 June 2011, ZON Multimédia’s tax losses carried forward, totalling 3.273 million
euros, expire in 2014. This amount derives from the companies acquired in 2008 or the subject of mergers
in 2009.
The Company reported deferred income tax assets and requested permission from the Tax Authorities to
use them in the tax consolidation.
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50/78 1H12 Consolidated Management Report
b) Tax rate reconciliation
In the half years ended on 30 June 2011 and 2012, the reconciliation between the nominal and effective tax
rates was as follows:
6M 11 6M 12
Income before taxes 27 837 31 106
Statutory tax rate 26,5% 26,50%
Estimated tax 7 377 8 243
Permanent differences i) 400 131
Differences in tax rate of Açores and Madeira ( 368) ( 78)
Underestimated/ (Overestimated) corporate tax 274 107
Fiscal benefits ( 1 292) ( 947)
Changes in the deferred income tax rate 371 946
Autonomous taxation 388 438
Effective Income tax rate adjusment (IAS 34) 765 1 689
Others 296 ( 80)
Income tax 8 212 10 451
Effective Income tax rate for the period 29,50% 33,60%
Income tax 6 849 10 849
Deferred tax 1 363 ( 397)
8 212 10 451
i) At 30 June 2011 and 2012 the permanent differences were composed as follows:
6M 11 6M 12
Provisions ( 5 352) -
Depreciations and amortizations 927 962
Equity method (Note 9) 5 148 165
Other 785 ( 633)
1 508 494
26,50% 26,50%
400 131
11. Earnings per share
Earnings per share in the half years ended on 30 June 2011 and 2012 were calculated as follows:
2º Quarter 11 6M 11 2º Quarter 12 6M 12
Net income attributable to equity holders of the parent 9 243 19 402 9 702 20 039
Weighted average number of ordinary shares in issue 309 085 004 309 084 760 308 906 528 308 914 794
Basic earnings per share - euros 0,03 0,06 0,03 0,06
Diluted earnings per share - euros 0,03 0,06 0,03 0,06
At 30 June 2011 and 2012, as there were no diluting effects on the net earnings per share, the diluted
earnings per share is equal to the basic earnings per share.
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12. Dividends
The General Meeting of Shareholders held on 27 April 2012 approved a proposal by the Board of Directors
for payment of an ordinary dividend per share of 0.16 euros, totalling 49.455 million euros, relating to the
net profit for the year ended on 31 December 2011 of 34.726 million euros plus free reserves totalling
14.730 million euros. The dividend attributable to own shares, totalling 17 000 Euros, was transferred to
retained earnings.
Dividends paid ( 49 455)
Dividends paid to treasury shares 17
( 49 438)
Dividends totalling 329 000 euros were also paid in the first half of 2012 to the minority shareholders of TV
Cabo Madeirense.
The General Meeting of Shareholders held on 15 April 2011 approved a proposal by the Board of Directors
for payment of an ordinary dividend per share of 0.16 euros, totalling 49.455 million euros, relating to the
net profit for the year ended on 31 December 2010 of 35.178 million euros plus free reserves totalling
14.277 million euros.
Dividends totalling 542 000 euros were also paid in the first half of 2011 to the minority shareholders of
ZON TV Cabo Madeirense, ZON TV Cabo Açoreana and Grafilme.
13. Cash and cash equivalents
At 31 December 2011 and 30 June 2012, this item was composed as follows:
31-12-2011 30-06-2012
Cash 1 691 2 113
Deposits 77 301 27 127
Term deposits i) 328 370 409 179
407 362 438 419
i) At 30 June 2012, term deposits have short-term maturities, with approximately 307 million euros
maturing in the second quarter of 2012 and the balance in the first quarter of 2013. The term deposits
bear interest at normal market rates.
The difference between the amounts of Cash and Cash Equivalents stated in the Consolidated Statement
of Financial Position and the Statement of Cash Flows is 2.850 million euros relating to bank overdrafts
(see Note 14).
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14. Borrowings and loans
At 31 December 2011 and 30 June 2012, the composition of borrowings was as follows:
Current Non Current Current Non Current
Loans:
Internal loans 41 305 18 453 58 423 -
Bank overdrafts - - 2 850 -
Foreign loans - 97 694 7 356 98 003
Commercial paper 350 760 354 821 226 743 324 279
Debenture loan 70 341 156 891 68 727 352 492
Financial Leases:
Long Term Contracts 32 568 89 818 27 526 80 417
Other 4 987 11 747 6 524 9 415
499 961 729 424 398 149 864 606
30-06-201231-12-2011
14.1. Internal loans
These include the Group’s share of the loan obtained by Sport TV in the amount of 48.500 million euros,
with quarterly repayments and maturing in 2013, and Upstar’s secured current account totalling 6.000
million euros.
These loans also include the amount of 3.568 million euros relating to the request by Sport TV, as a
supplier of the Group, for advance payment of invoices under the suppliers’ confirmed payments contract
with ZON Multimédia.
The net amount of 355 000 euros, corresponding to interest and commissions, was added to this amount.
14.2. Foreign loans
In September 2009 ZON Multimédia and ZON TV Cabo signed a Next Generation Network Project Finance
Contract with the European Investment Bank totalling 100 million euros. This contract matures in
September 2015 and is intended for investments relating to the implementation of the next generation
network. An amount of 1.958 million euros was deducted from this finance, corresponding to the benefit
associated with the fact that the loan is at a subsidised rate, constituting an investment subsidy, and is
therefore stated as deferred income.
FINSTAR obtained finance totalling 7.387 million euros from Banco Caixa Totta and Banco BIC.
MSTAR obtained finance totalling 105 000 euros from Banco Internacional de Moçambique.
An amount of 174 000 euros, corresponding to interest and commissions, was deducted from this amount.
14.3. Commercial Paper
The Company has borrowings of 555 million euros in the form of commercial paper contracted with seven
banks, corresponding to seven programmes bearing interest at market rates. Four grouped programmes of
commercial paper with maturities over 1 year totalling 325 million euros are classed as non-current since
the Company has the ability to unilaterally renew the current issues on or before the programmes’ maturity
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dates and because they are underwritten by the organiser. The amount concerned, although having current
maturity, is therefore classified as non-current for the purposes of presentation in the statement of financial
position. The remaining programmes are classified as current.
An amount of 3.978 million euros, corresponding to interest and commissions, was deducted from this
amount.
14.4. Debenture loans
The Company has bonds issued via three banks totalling 227.5 million euros with an average maturity of 2
years, half-yearly payment of interest and repayment at par at the end of the contracts.
In June 2012, ZON Multimédia launched a Public Offer for Subscription of Bonds for the general public,
called "ZON Multimédia Bonds 2012-2015”, under which it issued 200 million euros with a maturity of three
years and half yearly payment at a fixed rate.
An amount of 6.281 million euros, corresponding to interest and commissions, was deducted from this
amount.
14.5. Finance Leases
At 31 December 2011 and 30 June 2012, the item “Long Term Contracts” relates to contracts entered into
by ZON TV Cabo and Upstar for the exclusive acquisition of satellite capacity and the acquisition of
distribution network capacity utilisation rights, and the acquisition of broadcasting rights for the current
season’s professional football matches of the Liga ZON Sagres and Liga Orangina by Sport TV, and the
purchase of digital equipment for the cinemas of ZON LM Cinemas.
Finance Leases
31-12-2011 30-06-2012
Financial leases - payments:
Until 1 year 43 925 39 704
Between 1 and 5 years 103 562 91 180
Over 5 years 8 860 8 667
156 347 139 551
Future financial costs ( 17 229) ( 15 669)
Present value of finance lease liabilities 139 119 123 882
31-12-2011 30-06-2012
The present value of the finance lease liabilities:
Until 1 year 37 555 34 050
Between 1 and 5 years 93 972 82 400
Over 5 years 7 591 7 432
139 119 123 882
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Maturity of loans
The maturities of the loans obtained are as follows:
Until 1 year
Between 1 and 5
years Over 5 years Until 1 year
Between 1 and 5
years Over 5 years
Internal loans 41 305 18 453 - 58 423 - -
Foreign loans - 97 694 - 7 356 98 003 -
Commercial paper 350 760 354 821 - 226 743 324 279 -
Debenture loan 70 341 156 891 - 68 727 352 492 -
Financial Leases 37 555 93 972 7 591 34 050 82 400 7 432
499 961 721 832 7 591 398 149 857 174 7 432
30-06-201231-12-2011
Management regularly monitors the forecasts of the Group’s liquidity reserves, including the amounts of
unused credit lines and the amounts of cash and cash equivalents, on the basis of estimated cash flows
and compliance with any covenants normally associated with borrowings.
Of the loans obtained (excluding finance leases), in addition to being subject to the Group complying with its
operating, legal and fiscal obligations, 91.57% are subject to cross-default clauses, 54.74% to pari passu
clauses, 49.85% to ownership clauses, and 62.92% to negative pledge clauses.
In addition, approximately 42.77% of the total loans obtained require that the consolidated net financial debt
does not exceed 4 times consolidated EBITDA, respectively, and approximately 8.43% of the total loans
obtained require that net interest does not exceed 20% of consolidated EBITDA.
15. Provisions
At 31 December 2011 and 30 June 2012, the breakdown of provisions between current and non-current
was as follows:
31-12-2011 30-06-2012
Current provision
Taxes 563 -
Litigation 2 258 120
Other 1 413 -
4 234 120
Non-current provision
Taxes - 563
Litigation - 2 138
Other 23 006 6 354
23 006 9 055
27 240 9 175
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During the half years ended on 30 June 2011 and 30 June 2012, the movements in provisions were as
follows:
31-12-2010 Increases Decreases Other 30-06-2011
Taxes 563 - - - 563
Legal actions 2 258 - - - 2 258
Other risks 20 176 5 190 ( 5 975) ( 95) 19 295
22 997 5 190 ( 5 975) ( 95) 22 116
31-12-2011 Increases Decreases Other 30-06-2012
Taxes 563 - - - 563
Legal actions 2 258 - - - 2 258
Other risks 24 419 190 ( 10) ( 18 245) 6 354
27 240 190 ( 10) ( 18 245) 9 175
The net movements for the half years ended on 30 June 2011 and 30 June 2012 reflected in the statement
of comprehensive income under “Provisions” are composed as follows:
6M 11 6M 12
Other liabilities and charges ( 5 975) -
Provisions (Note 6) ( 5 975) -
Interest paid 78 82
Investments in participated companies (Note 9) 5 112 7
Other - 91
5 190 180
Provision for other liabilities and charges ( 785) 180
The balance in the item “Other risks and contingencies” at 31 December 2011 and 30 June 2012 is
composed as follows:
31-12-2011 30-06-2012
Investments in participated companies i) 18 249 11
Asset retirement obligation 4 758 4 839
Contigencies - other ii) 1 412 1 504
24 419 6 354
i) The variation in the item “Financial investments” is attributable to the fact that in 2011 the
shareholding in Finstar was stated by the equity method and in 2012 it was included in the
consolidation perimeter of the Group (see Note 4).
ii) The amount shown under “Miscellaneous contingencies” relates to provisions for risks and
contingencies relating to miscellaneous events/disputes, mainly of a fiscal nature with the exception
of income taxes, the settlement of which could result in outflows of cash.
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16. Shareholder's equity
16.1. Share capital
At 30 June 2012, the share capital of ZON Multimédia was 3 090 968 euros, represented by 309 096 828
registered book-entry shares with a nominal value of 1 Euro cent per share.
The principal shareholders at 31 December 2011 and 30 June 2012 are:
NO.Of Shares
% Voting
Rights NO.Of Shares
% Voting
Rights
Caixa Geral de Depósitos, SA 33 621 426 10,88% 33 884 405 10,96%
Kento Holding Limited i) 30 909 683 10,00% 30 909 683 10,00%
Jadeium, B.V.i) - - 24 222 563 7,84%
Banco BPI, SA 23 344 798 7,55% 23 344 798 7,55%
Telefónica, SA 16 879 406 5,46% - -
Espírito Santo Irmãos, SGPS, SA ii) 15 455 000 5,00% 15 455 000 5,00%
Joaquim Alves Ferreira de Oliveira iii) 14 955 684 4,84% 14 955 684 4,84%
Fundação José Berardo iv) 13 408 982 4,34% 13 408 982 4,34%
Ongoing Strategy Investments, SGPS, SA v) 10 162 250 3,29% 10 162 250 3,29%
Estêvão Neves - SGPS, SA vi) 9 075 782 2,94% 9 075 782 2,94%
Cinveste, SGPS, SA 8 707 136 2,82% - -
Grupo Visabeira, SGPS, SA vii) 6 641 930 2,15% 6 641 930 2,15%
Norges Bank 6 379 164 2,06% 6 379 164 2,06%
Banco Espírito Santo, SA 11 861 240 3,84% 15 054 254 4,87%
SGC, SGPS, SA viii) 6 182 000 2,00% 6 182 000 2,00%
ESAF - Espírito Santo Fundos de Investimento Mobiliário, SA 6 088 616 1,97% 6 088 616 1,97%
BES Vida - Companhia de Seguros, S. A. 5 721 695 1,85% 5 721 695 1,85%
Metalgest - Sociedade de Gestão, SGPS, SA iv) 3 985 488 1,29% 3 985 488 1,29%
ZON Multimédia (Own Shares) 265 612 0,09% 322 683 0,10%
Total 223 645 892 72,35% 225 794 977 73,05%
31.12.2011 30.06.2012
Shareholder
i) Under the terms of Article 20, paragraph 1 b) and Article 21 of the Securities Code, the above
qualifying shareholding is attributable to Isabel José dos Santos, in her capacity as a shareholder of
Kento Holding Limited and controlling shareholder of Jadeium B.V.
ii) The voting rights corresponding to Espírito Santo Irmãos, SGPS, SA are attributable to Espírito Santo
Industrial, SA, Espírito Santo Resources Limited, and Espírito Santo Internacional, SA, companies
that control Espírito Santo Irmãos in that order.
iii) The voting rights corresponding to 4.84% of the share capital are attributed to Joaquim Francisco
Alves Ferreira de Oliveira, as he controls GRIPCOM, SGPS, S.A., and Controlinveste International
SARL, which own, respectively, 2.26% and 2.58% of the share capital of ZON Multimédia.
iv) The position of the Fundação José Berardo is reciprocally attributed to Metalgest - Sociedade de
Gestão, SGPS, S.A.
v) The voting rights of Ongoing Strategy Investments, SGPS, S.A. are attributable to RS Holding,
SGPS, S.A. as its majority shareholder and to Isabel Maria Alves Rocha dos Santos as the majority
shareholder of RS Holding, SGPS, S.A.
vi) The qualifying shareholding of Estêvão Neves – SGPS, SA is attributable to its majority shareholder,
José Estêvão Fernandes Neves.
vii) Visabeira Investimentos Financeiros, SGPS, S.A. holds 0.99% of the share capital and voting rights
in ZON Multimédia, with 1.16% being directly held by Grupo Visabeira, SGPS, SA. Visabeira
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 57/78
Investimentos Financeiros, SGPS, S.A. is 100% owned by Visabeira Estudos e Investimentos, SA,
which is 100% owned by Visabeira Serviços, SGPS, SA, which in turn is owned by Grupo Visabeira,
SGPS, SA. 74.0104% of the latter is held by Fernando Campos Nunes.
viii) The shareholding of SGC, SGPS, S.A. is attributed to its majority shareholder, Dr. João Pereira
Coutinho.
16.2. Own shares
Company law regarding own shares requires the establishment of a non-distributable reserve in an amount
equal to the purchase price of such shares, which is frozen while the shares continue to be owned by the
company. In addition, the applicable accounting rules determine that gains or losses on the disposal of own
shares are stated in reserves.
At 30 June 2012 there were 322 683 own shares, representing 0.1044% of the share capital (30 June 2011:
11 502 own shares, representing 0.00372% of the share capital).
The transactions which occurred during the half years ended 30 June 2011 and 2012 were as follows:
Quantity Value
Balance as at 1 January 2011 5 486 17
Acquisition of treasury shares 206 321 679
Distribution of treasury shares ( 200 305) ( 653)
Balance as at 30 June 2011 11 502 43
Balance as at 1 January 2012 265 612 554
Acquisition of treasury shares 310 517 716
Distribution of treasury shares ( 253 446) ( 540)
Balance as at 30 June 2012 322 683 730
16.3. Reserves
Legal reserve
Company law and ZON Multimédia’s Articles of Association establish that at least 5% of the Company’s
annual net profit must be used to build up the legal reserve until it corresponds to 20% of the share capital.
This reserve cannot be distributed except in the event of liquidation of the Company, but it may be used to
absorb losses after all other reserves have been exhausted, or for incorporation in the share capital.
Other reserves
Movements in the half years ended on 30 June 2011 and 2012 and the composition of “Other reserves” are
as follows:
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58/78 1H12 Consolidated Management Report
Free reserves Other reserves Total
Balance as at 1 January 2011 144 408 10 738 155 146
Distribuition of treasury shares 653 ( 1 307) ( 653)
Aquisition of treasury shares ( 679) 679 -
Dividends (Note 12) ( 14 277) - ( 14 277)
Share plan 1 372 910 2 282
Interest rate derivatives - 1 625 1 625
Exchange rate derivatives - ( 41) ( 41)
Other - ( 278) ( 278)
Balance as at 30 June 2011 131 477 12 327 143 803
Balance as at 1 January 2012 134 621 28 298 162 919
Distribuition of treasury shares 540 ( 1 080) ( 540)
Aquisition of treasury shares ( 716) 716 -
Dividends (Note 12) ( 14 730) - ( 14 730)
Undistributed profit - 18 016 18 016
Share plan - 1 005 1 005
Interest rate derivatives - ( 1 606) ( 1 606)
Exchange rate derivatives - ( 242) ( 242)
Other - ( 482) ( 482)
Balance as at 30 June 2012 119 716 44 624 164 340
17. Derivative financial instruments
17.1. Exchange rate derivatives
Exchange rate risk is mainly related to exposure resulting from payments made to certain producers of
audiovisual content and suppliers of equipment for the Pay TV, broadband and voice business. Business
transactions between the ZON Group and these organisations are mainly denominated in US dollars.
Depending on the balance of accounts payable resulting from transactions denominated in a currency other
than the Group’s operating currency, the ZON Group may contract financial instruments, namely short-term
foreign currency forwards, in order to hedge the risk associated with these balances. At the date of the
statement of financial position there were foreign currency forwards open for 5.317 million dollars (31
December 2011: 10.724 million dollars), the fair value of which is approximately 190 000 euros (31
December 2011: 532 000 euros) which is stated in assets with a contra entry in shareholders’ equity.
17.2. Interest rate derivatives
At 30 June 2012, ZON had contracted three interest rate swaps totalling 257.500 million euros (31
December 2011: 407.500 million euros), with maturities at two years from the reference date. The fair value
of the interest rate swaps, totalling -4.761 million euros (31 December 2011: -2.577 million euros) is stated
in liabilities, with a contra entry for this amount stated in shareholders’ equity.
Notional Current Non Current Current Non Current
Derivative Financial instruments
Interest rate swaps 434 250 - - 350 2 227
Exchange rate forward 8 288 532 - - -
442 538 532 - 350 2 227
31-12-2011
Asset Liability
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 59/78
Notional Current Non Current Current Non Current
Derivative Financial instruments
Interest rate swaps 257 500 - - - 4 761
Exchange rate forward 4 223 190 - - -
261 723 190 - - 4 761
LiabilityAsset
30-06-2012
Movements during the first half of 2012 were as follows:
31-12-2011 Result Equity 30-06-2012
Fair value interest rate swaps ( 2 577) - ( 2 184) ( 4 761)
Fair value exchange rate forward 532 - ( 341) 190
Cashflow hedge derivatives ( 2 045) - ( 2 526) ( 4 571)
Deferred income tax liabilities (Note 10a)) ( 154) - 99 ( 55)
Deferred income tax assets (Note 10a)) 683 - 578 1 262
529 - 677 ( 55)
( 1 516) - ( 1 848) ( 4 626)
18. Guarantees and financial undertakings
18.1. Guarantees
At 31 December 2011 and 30 June 2012, the Group had furnished sureties, guarantees and comfort letters
in favour of third parties corresponding to the following situations:
31-12-2011 30-06-2012
Bank guarantees given to other entities:
Financial instituitions i) 100 492 100 300
Tax authorities ii) 23 076 25 795
Suppliers iii) 13 362 13 007
Other iv) 11 897 11 271
148 827 150 373
Promissories v) 20 000 20 000
Confort letters vi) 8 811 9 055
i) At 30 June 2012, this amount relates mainly to guarantees furnished by ZON Multimédia in
connection with the loan from the EIB (Note 14).
ii) At 30 June 2012, this amount relates to guarantees sought by the Tax Authorities in connection with
tax proceedings contested by the Company and its associated companies (Note 20).
iii) At 30 June 2012, this amount mainly includes 3.891 million euros relating to bank guarantees
provided to cinema lessors and 5.128 million euros relating to a bank guarantee provided to Multi38
under the terms of a promissory lease for the new building.
iv) At 30 June 2012, this amount mainly relates to guarantees provided in connection with Municipal
Wayleave Tax proceedings (Note 20).
v) At 30 June 2012, in connection with the finance obtained by Upstar from BES, totalling 20 million
euros, ZON Multimédia signed a promissory note for the total amount of the loan.
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
60/78 1H12 Consolidated Management Report
vi) In connection with the finance obtained by Finstar from Banco Caixa Totta and Banco BIC, totalling
38 million USD, ZON Multimédia signed two comfort letters accepting liability for up to 30% of the
total amount of the loan.
The following guarantees were furnished in connection with the finance obtained by Sport TV totalling 97
million euros: a security financial collateral arrangement in respect of the shares and new shares held by
ZON Multimédia and Sportinveste, SGPS, S.A., a mortgage on the Sport TV building, a lien on rights arising
from Sport TV contracts, 5 promissory notes and assignment of credits in guarantee.
18.2. Operating leases
The rentals due on operating leases have the following maturities:
Less than 1
year
Between 1 and
5 years
More than 5
years
Less than 1
year
Between 1 and
5 years
More than 5
years
Stores, movie theatre and other buildings 25 361 72 065 53 313 24 546 78 280 74 137
Equipment 77 179 - 100 131 -
Vehicles 123 145 - 87 38 -
25 561 72 389 53 313 24 734 78 449 74 137
30-06-201230-06-2011
18.3. Other undertakings
In July 2010, ZON TV Cabo Portugal signed a contract with the Portuguese Professional Football League
as co-sponsor with the brewing company Sociedade Central de Cervejas, covering four football seasons
(2010/2011 to 2013/2014) of the first and second division competitions, to be known henceforth as the
“LIGA ZON SAGRES” [ZON SAGRES LEAGUE] (formerly the “LIGA SAGRES”) and the “LIGA
ORANGINA” [ORANGINA LEAGUE] (formerly the “LIGA VITALIS”).
At 30 June 2012, Sport TV had secured television broadcasting rights for various sporting events in future
seasons. These rights include matches of the Portuguese Football League, the major European Football
Leagues, the UEFA Champions League and Europa League, and the Formula 1 World Championship.
On 21 November 2008, the Competition Authority approved the acquisition by ZON TV Cabo of exclusive
control of TVTel, Bragatel, Pluricanal Leiria and Pluricanal Santarém, subject to a series of undertakings, of
which the following are the most significant:
An undertaking to vacate the areas in secondary and tertiary network infrastructures by removing or
selling integrated cables in network cells that are not included in the previous undertaking, or that
have not been disposed of under the terms of the previous undertaking;
An undertaking to provide a wholesale national coverage satellite television offer by means of which
any third party can offer Pay TV services nationwide via satellite platforms without the need for
network infrastructures.
The EIB loan totalling 100 million euros with a maturity of 5 years is intended exclusively to finance the next
generation network investment project. This amount may not in any circumstances exceed 50% of the total
cost of the project.
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 61/78
19. Related Parties
19.1. Summary list of Related Parties
Detailed summary of Related Parties as at 30 June 2012:
Related Parties
Caixa Geral de Depósitos, SA
Kento Holding Limited
Jadeium, B.V.
Banco BPI, SA
Telefónica, SA
Espírito Santo Irmãos, SGPS, SA
Joaquim Alves Ferreira de Oliveira
Fundação José Berardo
Ongoing Strategy Investments, SGPS, SA
Estêvão Neves - SGPS, SA
Cinveste, SGPS, SA
Grupo Visabeira, SGPS, SA
Norges Bank
Banco Espírito Santo, SA
SGC, SGPS, SA
ESAF - Espírito Santo Fundos de Investimento Mobiliário, SA
BES Vida - Companhia de Seguros, S. A.
Metalgest - Sociedade de Gestão, SGPS, SA
Sport TV
Dreamia Holding BV
Dreamia - Serviços de Televisão, SA
Mstar, SA
Upstar Comunicações SA
FINSTAR - Sociedade de Investimentos e Participações, SA
ZON II - Serviços de Televisão SA
ZON III - Comunicações electrónicas S.A.
Big Picture 2 Films, SA
Distodo, Lda
Canal 20 TV
Fundo Investimento para Cinema e Audiovisual
Gesgráfica - Projectos Gráficos, Lda
Caixanet – Telecomunicações e Telemática, SA
Apor - Agência para a Modernização do Porto
Lusitânia Vida - Companhia de Seguros, SA
Lusitânia - Companhia de Seguros, SA
Turismo da Samba (Tusal), SARL
Filmes Mundáfrica, SARL
Companhia de Pesca e Comércio de Angola (Cosal), SARL
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
62/78 1H12 Consolidated Management Report
19.2. Balances and transactions between related parties
a) Transactions and balances between ZON Multimédia and companies of the ZON Group were
eliminated in the consolidation process and are not the subject of disclosure in this Note.
The balances at 31 December 2011 and 30 June 2012 and the transactions in the half years ended on 30
June 2011 and 30 June 2012 between the ZON Multimédia Group and its associated companies, joint
ventures and other related parties were as follows:
2011:
Balances
Accounts
receivable -
trade
Accounts
receivable -
other
Accounts
payable - trade
Accounts
payable - other
Accruals and
deferred assets
Accruals and
deferred
liabilities
Caixa Geral de Depósitos - - 1 - - -
Metalgest 451 - - - - -
Sport TV 3 176 7 477 - 18 2 445
Dreamia Holding BV 292 808 - - - -
Dreamia SA 387 269 266 - 8 12
Mstar SA 96 599 - - - -
Upstar Comunicações 1 403 41 643 1 091 - - 315
Finstar 3 023 - 33 - - -
Distodo 1 - 20 - - -
Big Picture 2 Films, SA - - 144 - - 333
Fundo Investimento para Cinema e Audiovisual - - - 17 479 - -
Canal 20 TV, SA - - 1 - - -
5 656 43 495 9 033 17 479 26 3 105
Balances Loan obtained
Other financial
aplications
Derivatives
assets
Derivative
Liabilities
Financial
Leases
Caixa Geral de Depósitos 145 585 - - 586 3
Banco Espírito Santo 372 663 256 362 332 6 5 183
Banco BPI 139 951 1 050 - 222 569
658 199 257 412 332 814 5 755
Transactions
Sales and
services
rendered
Expenses and
services
obtained Interest income
Interest
expenses
Caixa Geral de Depósitos 15 - 1 3 613
Banco Espírito Santo 1 1 125 5 038 7 271
Banco BPI - 369 1 211 4 763
Sport TV 4 18 046 - -
Dreamia Holding BV 101 - 33 -
Dreamia SA 1 144 212 - -
Mstar SA - - 3 -
Upstar Comunicações 4 170 - 352 -
Finstar 354 - - -
Distodo 1 381 - -
Canal 20 TV, SA - 1 - -
Fundo Investimento para Cinema e Audiovisual - - - 119
5 789 20 134 6 637 15 766
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 63/78
2012:
Balances
Accounts
receivable -
trade
Accounts
receivable -
other
Accounts
payable - trade
Accounts
payable - other
Accruals and
deferred assets
Accruals and
deferred
liabilities
Caixa Geral de Depósitos - - 1 - - -
Metalgest 451 - - - - -
Sport TV 31 ( 14) 7 233 ( 8) - 2 093
Dreamia Holding BV 387 869 - - - -
Dreamia SA 495 814 589 - - 129
Upstar 2 187 34 237 493 - - 172
Finstar 3 862 - 0 - - -
Distodo 1 0 148 - - -
Fundo Investimento para Cinema e Audiovisual - - - 17 500 - -
Mstar 78 601 - - - -
Big Picture 2 Films 5 - 208 - - 188
Canal 20 TV - - 1 - - -
7 495 36 509 8 673 17 492 - 2 582
Balances Loan obtained
Other financial
aplications
Derivatives
assets
Derivative
Liabilities Financial leases
Banco Espírito Santo 270 061 210 416 190 - 4 182
Caixa Geral de Depósitos 115 546 - - 721 5
Banco BPI 134 606 31 531 - 712 283
520 213 241 947 190 1 433 4 470
Transactions
Sales and
services
rendered
Expenses and
services
obtained Interest income
Interest
expenses
Caixa Geral de Depósitos 15 - 31 3 817
Banco BPI 1 221 46 3 455
Banco Espírito Santo - 912 5 684 10 089
Sport TV 32 16 586 - -
Dreamia Holding BV 111 - 45 -
Dreamia SA 1 103 388 - -
Upstar 3 108 - 1 014 -
Distodo 1 305 - -
Fundo Investimento para Cinema e Audiovisual - - - 21
Big Picture 2 Films 9 1 291 - -
4 380 19 703 6 819 17 382
The Company regularly performs transactions and signs contracts with several parties within the ZON
Group. Such transactions were performed on normal market terms for similar transactions, as part of the
current business of the contracting companies.
The Company also regularly performs transactions and enters into financial contracts with various credit
institutions which hold qualifying shareholdings in the Company. However, these are performed on normal
market terms for similar transactions, as part of the current business of the contracting companies.
b) The remuneration paid to the directors of ZON Multimédia in the half years ended on 30 June 2011
and 2012 was as follows:
Fixed
RemunerationBonus
Share-based
compensation
plans
Fixed
RemunerationBonus
Share-based
compensation
plans
Executive management 928 450 227 928 405 298
Non executive management 413 - - 391 - -
1 340 450 227 1 319 405 298
06M11 06M 12
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64/78 1H12 Consolidated Management Report
The remuneration paid to senior executives of the Group in the years ended on 30 June 2011 and 2012
was as follows:
06M2011 06M2012
Fixed Remunerations 3 164 2 848
Bonus 665 667
Share-based compensation plans 460 582
4 290 4 097
The average number of senior executives of the Group is 36 (06M2011:44).
The variable remuneration stated above corresponds to the value of accrued performance bonuses for
2012 which are payable in 2013.
All remuneration and bonuses are short term. The share incentive scheme includes a medium and long
term amount of 350 000 euros.
19.3. Joint Ventures
The ZON Group has a 50% interest in the following joint ventures: Sport TV, whose business is the
television broadcasting of the Sport TV channels; Dreamia B.V., a holding company; and Dreamia S.A.,
whose business is the television broadcasting of the MOV, Hollywood, Panda and Panda Biggs channels.
It also has a 30% stake in the Mstar and Finstar joint ventures whose business is the distribution of satellite
TV and the operation and supply of telecommunications services, and in Upstar whose business is
electronic communications services and the production, commercialisation, broadcasting and distribution of
audiovisual content and consultancy.
The consolidation of these subsidiaries by the proportional consolidation method had the following impact
on the consolidated statement of financial position at 30 June 2012 and on the consolidated statement of
comprehensive income for the half year ended on 30 June 2012:
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 65/78
Company (a) Eliminations(b) Contribution (c)
Current assets 126 742 ( 51 976) 74 766
Non-current assets 25 762 ( 1 523) 24 239
Accounts receivable - trade 21 - 21
Accounts receivable - other 1 498 ( 1 498) -
Investments in group companies 25 ( 25) -
Intangible assets 9 997 - 9 997
Tangible assets 14 085 - 14 085
Deferred tax assets 136 - 136
Total assets 152 504 ( 53 498) 99 005
Current liabilities 128 485 ( 51 169) 77 317
Non- current liabilities 8 136 ( 2 330) 5 806
Borrowings 4 263 - 4 263
Accounts payable-other 3 115 ( 2 285) 831
Accrued expenses 45 ( 45) -
Provisions for other liabilities and charges 713 - 713
Total liabilities 136 621 ( 53 498) 83 123
Company (a) Eliminations(b) Contribution (c)
Total revenue 61 329 ( 26 728) 34 601
Total expense 60 472 ( 26 728) 33 744
Net income 857 ( 1) 857
30-06-2012
30-06-2012
a) Percentage interest in the individual accounts of the companies at the date stated;
b) Inter-company eliminations;
c) Amounts included in the consolidated statement of financial position at 30 June 2012, and in the
consolidated statement of comprehensive income for the half year ended on 30 June 2012 as a
result of consolidation by the proportional method.
20. Legal actions
20.1. Municipal Wayleave Tax (TMDP) Proceedings
In February 2004, pursuant to Article 13 of the Authorisation Directive (Directive 2002/20/EC of 7 June),
Law 5/2004 of 10 February (Electronic Communications Law) established in its Article 106 the Municipal
Wayleave Tax (TMDP) as consideration for the “rights and costs of the installation, passage and crossing,
in a determined area, of the public and private municipal domain" by the systems, equipment and other
resources of companies offering public electronic communications networks and services. The TMDP
charge is levied on “each invoice issued by the companies offering public electronic communications
networks and services at a fixed location to all end customers within the respective municipality", and is
calculated as a maximum percentage of 0.25% of the amount of each invoice. Some municipalities, despite
approving the TMDP, have continued to collect Occupancy Taxes, while others have opted to maintain the
latter taxes rather than approving the TMDP.
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66/78 1H12 Consolidated Management Report
In the light of legal advice on the matter, the Group is of the view that the TMDP is the only tax that should
be collected as consideration for the above mentioned rights, namely the right of installation, for which
reason it has challenged the public highway Occupancy Taxes charged to it by municipalities, since it
deems such taxes illegal. It must also be highlighted that under the scope of an administrative complaint, a
decision has been made by some municipalities, which have either subscribed to the Group's interpretation
or decided that they may only opt for one rate or the other, as it is not possible for the TMDP and public
road Occupancy Rates to overlap.
Meanwhile, various judicial judgments have been issued on the substantive issue, including by the
Supreme Administrative Court, that uphold the position and understanding of ZON TV Cabo, with the result
that there are good prospects that this dispute will be definitively resolved in favour of ZON TV Cabo by the
majority of municipalities.
With the entry into force of Decree-Law 123/2009, this matter has been definitively resolved for the future.
This law clearly states (in line with ZON’s interpretation of the previous legislation) that the TMDP is payable
for the use and usufruct of property in the public or private municipal domain which involves the
construction or installation, by companies that offer public electronic communications networks and
services, of infrastructures for housing electronic communications in accordance with the terms of the
Electronic Communications Law, and that no other taxes, official fees or consideration are due.
20.2. Legal actions with regulators
On 8 July 2009, ZON TV Cabo was notified by the Competition Authority (AdC) in connection with
administrative offence proceedings relating to the ZON triple-play offer, requesting ZON TV Cabo to
comment on the content of the notification, which it did in good time. The case is currently at the
fact-finding stage in AdC and various information has been requested, to which ZON has
responded. If it is concluded that an infringement has occurred, the AdC may levy a fine not
exceeding 10% of the company’s turnover in last year of infringement.
ICP-ANACOM instituted regulatory infringement proceedings against ZON TV Cabo, as it did
against the majority of Portuguese electronic communications operators, for infringement of the
portability regulations. ZON TV Cabo brought an action for judicial review of a decision by Anacom
ordering it to pay a fine, and the court ruled that Anacom’s decision was null and void.
ZON TV Cabo Portugal, ZON TV Cabo Açoreana and ZON TV Cabo Madeirense brought actions
for judicial review of ICP-ANACOM’s decisions in respect of the payment of the Annual Fee (for
2009, 2010 and 2011) for carrying on the business of Electronic Communications Services
Networks Supplier in the amounts, respectively, of 1.087 million euros, 2.325 million euros, and
3.580 million euros; 42 000 euros, 79 000 euros, and 123 000 euros; 55 euros, 109 000 euros and
169 000 euros, and seeking reimbursement of the amounts meanwhile paid in connection with the
enforcement proceedings. This fee is a percentage decided annually by ANACOM (in 2009 it was
0.5826%) of operators’ electronic communications revenues. The scheme is being introduced
gradually: 1/3rd in the first year, 2/3rds in the second year and 100% in the third year. ZON TV
ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A.
1H12 Consolidated Management Report 67/78
Cabo, ZON TV Cabo Açoreana and ZON TV Cabo Madeirense claim, in addition to defects of
unconstitutionality and illegality, that only revenues from the electronic communications business
per se, subject to regulation by ANACOM, should be considered for the purposes of the application
of the percentage and the calculation of the fee payable, and that revenues from television content
should be excluded.
ZON tendered in an auction for licences for a nationwide freeview generalist programme service, to
be broadcast via terrestrial television. The Regulator of Social Communication decided on 23 March
2009 to disqualify ZON’s bid, along with that of another bidder. ZON has applied for judicial review
of the decision. The outcome of these proceedings is awaited.
20.3. Tax authorities
During the course of the 2005 to 2010 financial years, certain companies of the ZON Group were the
subject of tax inspections for the 2002 and 2005 to 2009 financial years. Following these inspections, ZON
Multimédia, as the controlling company of the Tax Group, was notified of the corrections made to the
Group's tax losses by the Tax Inspection Service. The Company considered that the corrections were
unfounded, and appealed against the amounts mentioned. ZON Multimédia brought an action for judicial
review of those corrections.
During the course of the 2007 to 2011 financial years, ZON Multimédia, ZON TV Cabo, ZON Conteúdos
and ZON TV Cabo SGPS were the subject of tax inspections for the 2004 to 2010 financial years. Following
these inspections, the companies were notified to make payments corresponding to the corrections made
by the Tax Inspection Service to those financial years. The Company considered that the corrections were
unfounded, and contested the amounts mentioned. The Group provided the bank guarantees demanded by
the Tax Authorities in connection with these proceedings, as stated in Note 18.
The following proceedings are in progress:
Year Company Revised Years Notification Value
2007 ZON Multimédia 2004 109
2007 ZON Multimédia 2005 446
2010 ZON Multimédia 2008 660
2011 ZON Multimédia 2009 852
2007 ZON TV Cabo 2004 2 024
2007 ZON TV Cabo 2005 1 694
2008 ZON TV Cabo 2006 2 048
2009 ZON TV Cabo 2007 4 012
2010 ZON TV Cabo 2008 2 062
2010 ZON TV Cabo 2009 2 077
2011 ZON Conteúdos 2009 141
2011 ZON TV Cabo SGPS 2009 407
2011 ZON TV Cabo SGPS 2010 1 022
17 554
The Board of Directors of ZON Multimédia, based on information from its tax advisers, believes that these
and any other revisions and corrections to the tax declarations for the financial years in the period under
review, as well as any other contingencies of a fiscal nature, will not have a significant effect on the
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consolidated financial statements as at 30 June 2012, except for those situations which have been the
subject of provisions (Note 15).
20.4. Actions brought by PT against ZON TV Cabo Madeirense and ZON TV Cabo Açoreana
PT brought two actions in Funchal Judicial Court and Ponta Delgada Judicial Court, one against ZON TV
Cabo Madeirense and the other against ZON TV Cabo Açoreana, claiming payment of 1.608 million euros
and 925 000 euros, respectively, plus accrued interest until the date of full settlement, for the alleged use of
ducts, supply of the MID service and supply of video and audio channels. In the case of ZON TV Cabo
Madeirense, the suit also involves the operating, maintenance and management costs of the Madeira/Porto
Santo undersea cable and the use of two fibre optic circuits.
The two companies contested the action, in particular the prices concerned, the services and PT’s legal
capacity in respect of the ducts. The outcome of the proceedings is awaited.
In a decision handed down on 19 July, the court found for ZON TV Cabo Açoreana. PT has not appealed
the decision.
However, following that decision, in April 2012 PT brought two new actions against ZON Açoreana, one
relating to the MID service and the other to the supply of video and audio channels, claiming payment of
222 000 euros and 316 000 euros respectively, plus interest. The time limit for contesting the claim in both
actions has not yet expired.
The action against ZON TV Cabo Madeirense is currently at the judgment stage.
21. Share incentive scheme
The Share Incentive Schemes approved by the General Meetings of Shareholders on 27 April 2008 and 19
April 2010 with the aim of promoting employee loyalty, aligning their interests with the Company’s objectives
and creating more favourable conditions for the recruitment of staff of high strategic value, have been
implemented in accordance with the principles agreed at those meetings.
These incentives plans comprise a Standard Plan and a Senior Executive Plan. The Standard Plan is aimed
at eligible members selected by the responsible bodies, regardless of the roles they perform. In this plan the
vesting period for the assigned shares is five years, starting twelve months after the period to which the
respective assignment relates, at a rate of 20% a year. The Senior Executive Plan is aimed at eligible
members classed as Senior Executives, also selected by the responsible bodies. The Senior Executive
Plan, implemented following approval by the General Meeting of Shareholders in April 2010, has a vesting
period of 3 years following the attribution of the shares.
The maximum number of shares assigned each year to these plans is approved by the Board of Directors
and depends exclusively on fulfilment of the performance objectives established for ZON and on the
assessment of the individual’s performance.
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1H12 Consolidated Management Report 69/78
The number of shares vested in 2012 under the Share Plans approved in 2008, 2009, 2010 and 2011 was
253 446 shares.
In addition, the Group recognised liabilities in respect of the 2008, 2009, 2010, 2011 and 2012 Plans, which
extend until 2016, totalling 7.830 million euros – 1.951 million euros in 2008, 1.592 million euros in 2009,
1.401 million euros in 2010, 1.862 million euros in 2011 and 1.005 million euros in 2012.
In addition, in the first half of 2012 ZON implemented the Share Savings Plan, also established in the By-
Law approved by the General Meeting of Shareholders. This plan is open to all employees who, if they
meet internally decided criteria, may invest up to 10% of their annual salary in this plan, up to a maximum of
€7500 per annum, with the benefit of purchasing shares at a 10% discount.
Under the Share Savings Plan, which was launched in 2012, ZON employees bought 45 493 shares.
22. Subsequent events
On 2 July 2012 and following the conclusion of a fixed-term sale and purchase agreement disclosed on 12
June 2012, Jadeium B.V., a Dutch company headquartered in Amsterdam, has completed the acquisition of
title of 33,879,531 shares, owned by Caixa Geral de Depósitos, S.A. (“CGD”), representing 10.96% of the
share capital and the voting rights of ZON Multimédia.
After this operation, the qualified participation in ZON share capital and voting rights of Jadeium B.V. is
18.18% and of CGD is 0.0016%.
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ANNEX I
a) Companies included in the consolidation by the full consolidation method
b) Associated companies
c) Jointly controlled companies
d) Companies recorded at cost
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ANNEXED TABLES
a) Companies included in the consolidation by the full consolidation method
Effective Direct Effective
31-12-2011 30-06-2012 30-06-2012
ZON Multimédia - Serviços de
Telecomunicações e Multimédia, SGPS, S.A.
Lisbon Management of investments
ZON TV Cabo Portugal, S.A. Lisbon Distribution of television by cable and satellite and operation of
telecommunications services
100,00% ZON Multimédia (100%) 100,00%
ZON TV Cabo Açoreana, S.A. Ponta
Delgada
Distribution of television by cable and satellite and operation of
telecommunications services in the Azores area
83,82% ZON TV Cabo (83,82%) 83,82%
ZON TV Cabo Madeirense, S.A. Funchal Distribution of television by cable and satellite and operation of
telecommunications services in the Madeira area
77,95% ZON TV Cabo (77,95%) 77,95%
ZON Televisão por Cabo, SGPS, S.A. Lisbon Management of investments 100,00% ZON TV Cabo (100%) 100,00%
ZON Conteúdos - Actividade de Televisão e de
Produção de Conteúdos, S.A.
Lisbon Comercialization of cable tv contents 100,00% ZON Televisão por Cabo
(100%)
100,00%
ZON Lusomundo Audiovisuais, S.A. Lisbon Import, distribution, commercialization and production of audiovisual products 100,00% ZON Multimédia (100%) 100,00%
Grafilme - Sociedade Impressora de Legendas,
Lda.
Lisbon Providing services on audiovisual subtitling 55,56% ZON LM Audiovisuais
(55,56%)
55,56%
ZON Audiovisuais, SGPS S.A. Lisbon Management of investments 100,00% ZON LM Audiovisuais
(100%)
100,00%
ZON Lusomundo TV, Lda. Lisbon Movies distribution, editing, distribution, commercialization and production of
audiovisual products
100,00% ZON Audiovisuais SGPS
S.A. (100%)
100,00%
ZON Lusomundo Cinemas , S.A. Lisbon Movies exhibition and commercialization of other public events 100,00% ZON Multimédia (100%) 100,00%
Lusomundo Moçambique, Lda. Maputo Movies exhibition and commercialization of other public events 100,00% ZON LM Cinemas (100%) 100,00%
ZON Cinemas, SGPS S.A. Lisbon Management of investments 100,00% ZON LM Cinemas (100%) 100,00%
Lusomundo - Sociedade de investimentos
imobiliários SGPS, SA
Lisbon Management of Real Estate 99,87% ZON Multimédia (99,87%) 99,87%
Empracine - Empresa Promotora de Atividades
Cinematográficas, Lda.
Lisbon Movies exhibition 99,87% Lusomundo SII (100%) 99,87%
Lusomundo Imobiliária 2, S.A. Lisbon Management of Real Estate 99,68% Lusomundo SII (99,8%) 99,68%
Lusomundo España, SL Madrid Management of investments relating to activities in Spain in the audiovisuals
business
100,00% ZON Multimédia (100%) 100,00%
Teliz Holding B.V. Amstelveen Management of investments 100,00% ZON Multimédia (100%) 100,00%
ZON FINANCE B.V. Amsterdam Management of group financing activities 100,00% ZON Multimédia (50%);
ZON TV Cabo (50%)
100,00%
Company Head Office Activity
Percentage of Ownership
b) Associated companies
Effective Direct Effective
31-12-2011 30-06-2012 30-06-2012
Distodo - Distribuição e Logística, Lda.
("Distodo")
Lisbon Stocking, sale and distribution of audiovisual material 50,00% ZON LM Audiovisuais (50%) 50,00%
Canal 20 TV, S.A. Madrid Production, distribution and sale of contens rights for television films 50,00% ZON Multimédia (50%) 50,00%
ZON II - Serviços de Televisão S.A. (a) Lisbon Conception, production, realization and commercialization of audiovisual
contents and provision of publicity services
100,00% ZON Multimédia (100%) 100,00%
Big Picture 2 Films, S.A. Lisbon Import, distribution, commercialization and production of audiovisual
products
20,00% ZON Audiovisuais SGPS
S.A. (20%)
20,00%
ZON III - Comunicações electrónicas S.A.
(a)
Lisbon Network operator and provider of electronic communications services 100,00% ZON Multimédia (100%) 100,00%
Company Head Office Activity
Percentage of Ownership
(a) Inactive company.
c) Jointly controlled companies
Effective Direct Effective
31-12-2011 30-06-2012 30-06-2012
Sport TV Portugal Lisbon Conception, production, realization and commercialization of sports
programs for telebroadcasting, purchase and resale of the rights to
broadcast sports programs for television and provision of publicity
services
50,00% ZON Multimédia (50%) 50,00%
Dreamia - Serviços de Televisão, S.A. Lisbon Conception, production, realization and commercialization of audiovisual
contents and provision of publicity services
50,00% Dreamia Holding BV
(100%)
50,00%
Dreamia Holding B.V. Amsterdam Management of investments 50,00% ZON Audiovisuais SGPS
S.A. (50%)
50,00%
MSTAR, SA Maputo Distribution of television by satellite, operation of telecommunications
services
30,00% ZON Multimédia (30%) 30,00%
Upstar Comunicações S.A. Vendas
Novas
Electronic communications services provider, production,
commercialization, broadcasting and distribution of audiovisual contents
30,00% ZON Multimédia (30%) 30,00%
FINSTAR - Sociedade de Investimentos e
Participações, S.A.
Luanda Distribution of television by satellite, operation of telecommunications
services
30,00% Teliz Holding B.V. (30%) 30,00%
Company Head Office Activity
Percentage of Ownership
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72/78 1H12 Consolidated Management Report
d) Companies recorded at cost
Effective Direct Effective
31-12-2011 30-06-2012 30-06-2012
Turismo da Samba (Tusal), SARL (a) Luanda n.a. 30,00% ZON Multimédia (30%) 30,00%
Filmes Mundáfrica, SARL (a) Luanda Movies exhibition 23,91% ZON Multimédia (23,91%) 23,91%
Companhia de Pesca e Comércio de
Angola (Cosal), SARL (a)
Luanda n.a. 15,76% ZON Multimédia (15,76%) 15,76%
Caixanet – Telecomunicações e
Telemática, S.A.
Lisbon Telecommunication services 5,00% ZON Multimédia (5%) 5,00%
Apor - Agência para a Modernização do
Porto
Porto Development of modernizing projects in Oporto 3,98% ZON Multimédia (3,98%) 3,98%
Lusitânia Vida - Companhia de Seguros,
S.A ("Lusitânia Vida")
Lisbon Insurance services 0,03% ZON Multimédia (0,03%) 0,03%
Lusitânia - Companhia de Seguros, S.A
("Lusitânia Seguros")
Lisbon Insurance services 0,04% ZON Multimédia (0,04%) 0,04%
Company Head Office Activity
Percentage of Ownership
(a) The financial investments in these companies are fully provisioned.
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5.1. Report and Opinion of the Statutory Auditor
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5.2. Limited Review Report Prepared by Auditor Registered in CMVM
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06
Statement under the terms of Article 246,
paragraph 1, c), of the Securities Code
In accordance with Article 246, paragraph 1, c) of the Securities Code, the Board of Directors of ZON
Multimédia - Serviços de Telecomunicações e Multimédia, SGPS, SA, whose name and roles are listed
below, declare that, to their knowledge:
a) The first half 2012 accounts, were elaborated in compliance with the applicable accounting standards,
accurately and truthfully portraying the assets and liabilities, the company’s financial situation and results,
as well as those of the companies included in its consolidation perimeter;
b) The management report faithfully portrays the important events occurred in First Half 2012 and its impact
on the accounts and, when applicable, contains a description of the main risks and uncertainties for the
following six months.
Daniel Proença de Carvalho
(Chairman of the Board of Directors)
Rodrigo Jorge de Araújo Costa
(Chief Executive Officer)
José Pedro Faria Pereira da Costa
(Executive Member of the Board of Directors)
Duarte Maria de Almeida e Vasconcelos Calheiros
(Executive Member of the Board of Directors)
Luís Miguel Gonçalves Lopes
(Executive Member of the Board of Directors)
António Domingues
(Member of the Board of Directors)
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1H12 Consolidated Management Report 77/78
Fernando Fortuny Martorell
(Member of the Board of Directors)
László Hubay Cebrian
(Member of the Board of Directors)
Vítor Fernando da Conceição Gonçalves
(Chairman of the Audit Committee)
Nuno João Francisco Soares de Oliveira Silvério Marques
(Member of the Audit Committee)
Paulo Cardoso Correia da Mota Pinto
(Member of the Audit Committee)
Norberto Emílio Sequeira da Rosa
(Member of the Board of Directors)
Luís Bordalo Silva
(Member of the Board of Directors)
Jorge Telmo Maria Freire Cardoso
(Member of the Board of Directors)
Joaquim Francisco Alves Ferreira de Oliveira
(Member of the Board of Directors)
Mário Filipe Moreira Leite da Silva
(Member of the Board of Directors)
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