1

Full Year Results 2012

Jeremy Darroch

Chief Executive

2

Forward Looking Statements

This document contains certain forward looking statements with respect to the Group’s financial condition, results of operations and business and

management’s strategy, plans and objectives for the Group. These statements include, without limitation, those that express forecasts, expectations and

projections, such as forecasts, expectations and projections in relation to new products and services, the potential for growth of free-to-air and pay television,

fixed line telephony, broadband and bandwidth requirements, advertising growth, DTH and OTT customer growth, Multiroom, Sky Anytime+, NOW TV, Sky Go,

Sky+HD and other services penetration, revenue, administration costs and other costs, advertising growth, churn, profit, cash flow, product penetration, our

broadband network footprint, content, wholesale, marketing and capital expenditure and proposals for returning capital to shareholders.

These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks,

uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from

those expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a

highly competitive environment that is subject to rapid change, the effects of laws and government regulation upon the Group's activities, its reliance on

technology which is subject to risk of failure, change and development, the fact that the Group is reliant on encryption and other technologies to restrict

unauthorised access to its services, failure of key suppliers, risks inherent in the implementation of large-scale capital expenditure projects, the fact that the

Group relies on intellectual property and proprietary rights which may not be adequately protected under current laws or which may be subject to unauthorised

use, the risks associated with the Group generating wholesale revenue principally from one customer, the risks associated with the Group being subject to a

number of medium and long-term obligations and the Group’s exposure to the European financial crisis.

Information on the significant risks and uncertainties are described in the "Principal risks and uncertainties" section of Sky's Annual Report for the full year

ended 30 June 2011 and Interim Report for the half year ended 31 December 2011. Copies of the Annual Report and Interim Report are available from the British

Sky Broadcasting Group plc web page at www.sky.com/corporate. All forward-looking statements in this presentation are based on information known to the

Group on the date hereof. The Group undertakes no obligation publicly to update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise.

3

Strong operational performance

Another excellent year for Sky

Extended leadership on screen

Leading product innovation

Improved efficiency of our operating model

Record financial results

4

Strong operational performance

2012 Change

Total products 28.4m +3.0m

Total households 10.6m +312,000

Triple play penetration 32% +5p.p.

Churn 10.2% -0.2p.p.

ARPU1 £548 +£10

1 Quarterly annualised

5

Record financial results

2012 Change

Revenue1 £6.8bn +4.5%

Operating profit £1,223m +14%

Operating margin 18.0% +170bps

Free cash flow2 £992m +14%

EPS 50.8p +22%

Dividend 25.4p +9%

1 £100m excluded from 2011 to reflect the additional week of trading.

2 Excluding payment of deposit of £82m for Premier League rights for 2013-16 seasons.

Twelve months ended 30 June. Adjusted for exceptional items and from continuing operations

6

Successfully transitioned to multi-product strategy

As at 30 June. All figures in millions

Customers and products HD customers Broadband customers

2008 2010 2012 2008 2010 2012 2008 2010 2012

9.0 9.9 10.6

21.6

28.4

14.1 2.9

4.3

0.5

2.6

1.6

4.0

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Transformed financial performance

For the 12 months to 30 June. Adjusted for exceptional items. 1 Excluding payment of deposit of £82m for Premier League rights for 2013-16 seasons.

Revenue Earnings per share Free cash flow1

+£2bn 2.5x Doubled

2008 2010 2012 2008 2010 2012 2008 2010 2012

8

A consistent approach

Broadly based growth

– Multi-product strategy

– Widening distribution of content

Investing in the customer experience

– Getting better on-screen

– Product innovation

Improving efficiency of our operations

Growing revenue,

earnings and

cashflow

9

2012/13

• Economy will remain tough

• Uncertain impact of Olympics in Q1

• Strong plans for year ahead

• Well placed; consistent approach

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Investing in the customer experience: on-screen

• Continue building in sport, movies and news

• Delivering step-change in entertainment

• Big focus on UK commissions

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Premier League

• Good outcome on renewal

• 116 live matches

• Best match picks, best head-to-heads

• Flexibility to absorb higher costs

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Tennis image

ATP masters US Open

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• Enhancing content offering – entire Bond

series

• Adding more value for customers – on

demand and on the go

• Extending reach of Sky Movies – NOW TV

and Sky Store

• Resulting in increased viewing and

highest ever satisfaction

Outstanding movies service

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Strong portfolio of entertainment channels

Brilliant entertainment

for the whole family World-class cinematic TV

UK’s only dedicated arts

entertainment channel

Incredible TV that

women love

15

Delivering a step change in entertainment content

Retain best of US More original drama

and comedy Working with top talent Extending into new genres

17

• Best in-home

entertainment experience

• Easy access to content

on the go

• Enhance value of

subscription with

companion apps

Investing in the customer experience: product innovation

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The best in home entertainment experience

19 19

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Richer customer experience with apps

• Sky Go

– 2.7 million unique users1

– Live and on demand

– 8 kids’ channels available from today

• Companion apps

– New Sky+ planner functionality

on the go

1 For the quarter ending 30 June 2012.

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Broadly based growth: widening distribution

Working with wholesale partners Retailing across new platforms

Entertainment

2013

Home Genres Collections Live TV Help & Community

Movies

Now

Sport

My Movies

By end 2012 22

Home Genres Collections Live TV Help & Community My Movies

LATEST MOVIES ON ANY DEVICE MONTHLY PASS PAY AND PLAY HOW IT WORKS

Rio Now showing

PASS

NOW TV opportunity

• Strong take-up of connected devices

• Growing consumption of online video

• 6 million Freeview homes already

pay for content

• Sky content resonates strongly

Distinctive, complementary brands

Exclusive content | Quality | Innovative technology

Shared attributes: “Powered by Sky”

Dynamic new service

Spontaneous & transactional

Personalised

Range of payment choices

Quality fast streaming

Trusted market leader

Peace of mind fixed bill

Unrivalled breadth of choice

All you can eat products

Best TV experience (HD/3D)

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25

Fastest growing triple-play provider (m)

2008

0.9

2009

1.5

2010

2.0

2011

2.8

2012

3.4

Broadly based growth: home communications

26

Remain market

leader in value

Broaden product

range (Fibre, WiFi) Extend UK network Launch in Ireland

Better broadband for more people

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2009 2011 2012 2010

Customer Service

Satisfaction

2011

No.1 Reduced cost to serve and increased satisfaction

Efficient service = Good service

Improving efficiency of operations: service

Monthly service cost per product Customer service satisfaction

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• Doubled ordinary dividend since 2006; eighth consecutive year of increase

• £750m buyback in progress

• Additional £500m buyback for approval at AGM

Increasing returns for shareholders

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Full year results 2012

Andrew Griffith

Chief Financial Officer

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Excellent Financial Performance

¹ £100m excluded from 2011 to reflect the additional week of trading.

2 excluding payment of deposit of £82m for Premier League rights for 2013-16 seasons.

Twelve months ended 30 June. Adjusted for exceptional items and from continuing operations

2011 2012 Change

Revenue1 £6.5bn £6.8bn +4.5%

Operating profit £1,073m £1,223m +14%

Operating margin 16.3% 18.0% +170bps

Free cash flow2 £869m £992m +14%

Earnings per share 41.6p 50.8p +22%

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Strong revenue growth

¹£100m excluded from 2011 to reflect the additional week of trading

Twelve months ended 30 June. From continuing operations.

£m 2011 2012 Change

Retail subscription1 5,371 5,593 +4.1%

Wholesale 323 351 +8.7%

Advertising 458 440 (3.9%)

Sky Bet 79 113 +43.0%

Other 266 294 +10.5%

Total 6,497 6,791 +4.5%

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Strong revenue growth

¹£100m excluded from 2011 to reflect the additional week of trading

Twelve months ended 30 June. From continuing operations.

£m 2011 2012 Change

Retail subscription1 5,371 5,593 +4.1%

Wholesale 323 351 +8.7%

Advertising 458 440 (3.9%)

Sky Bet 79 113 +43.0%

Other 266 294 +10.5%

Total 6,497 6,791 +4.5%

• ARPU up £10 to £548

• ARPU increased by one

third in last 5 years

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Strong revenue growth

¹£100m excluded from 2011 to reflect the additional week of trading

Twelve months ended 30 June. From continuing operations.

£m 2011 2012 Change

Retail subscription¹ 5,371 5,593 +4.1%

Wholesale 323 351 +8.7%

Advertising 458 440 (3.9%)

Sky Bet 79 113 +43.0%

Other 266 294 +10.5%

Total 6,497 6,791 +4.5%

• Higher take-up of

premium channels

• More HD subscribers

• Launch of Formula 1

channel

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Strong revenue growth

¹£100m excluded from 2011 to reflect the additional week of trading

Twelve months ended 30 June. From continuing operations.

£m 2011 2012 Change

Retail subscription¹ 5,371 5,593 +4.1%

Wholesale 323 351 +8.7%

Advertising 458 440 (3.9%)

Sky Bet 79 113 +43.0%

Other 266 294 +10.5%

Total 6,497 6,791 +4.5%

• Growing scale and market

share of Sky Media

• Outlook for TV

advertising remains

uncertain

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Strong revenue growth

¹£100m excluded from 2011 to reflect the additional week of trading

Twelve months ended 30 June. From continuing operations.

£m 2011 2012 Change

Retail subscription¹ 5,371 5,593 +4.1%

Wholesale 323 351 +8.7%

Advertising 458 440 (3.9%)

Sky Bet 79 113 +43.0%

Other 266 294 +10.5%

Total 6,497 6,791 +4.5%

• Sky Bet users up >100%

• Rapid growth in mobile

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Programming costs

Twelve months ended 30 June

2011

£2,188m

Ashes/

Ryder Cup

in prior year

Rights

inflation

Subscriber

volume

related

Growth in

HD

channels

Increased

investment

in British

content

Full year

impact of Sky

Atlantic

2012

£2,298m

First season

of Formula 1

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Direct network cost growth

MPF base Off-net base SMPF base Direct network cost growth

41%

50%

33%

16%

9% 5%

65%

30%

2012 2011

• Lowest rate of cost

growth since launch

• Improving broadband

mix 94% on net

• Two thirds of base

fully unbundled

Direct Network Costs

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Attractive Broadband Economics

1 Based on published tariff of customer taking Broadband Unlimited, Talk Unlimited and Line rental plus chargeable calls. 2 Revenue less directly attributable costs (including regulated charges)

SMPF MPF Fibre (40mb) Fibre

(80mb)

£26 £26

£16

£37

£19

£45

£11

£24

Monthly Revenue1 Monthly Contribution2

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Improving efficiency of our operations

• Fundamental to our approach

• Allows continued investment in

customer experience

• Growing profits and returns

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2008 2012

Investing in customer experience 39.4% 43.8%

– Direct Costs

Improving efficiency of our operations 45.4% 38.2%

– Operating Costs

Operating margins 15.2% 18.0%

Improving efficiency of our operations

Costs shown as % of revenues

-7.2%

+4.4%

+2.8%

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Fewer calls Fewer service visits Lower commissions

•Up to £100 saving in

commission per online sale

• 2/3 customers with Sky+ HD box

• Service visits down by 1/3, saving

£20m pa

• Calls per customer down 30%

over 2 years - saving of £50m pa

2008

Average inbound calls Monthly Service Visits Online sales/upgrades

2009 2010 2011 2012 09/10 10/11 11/12 2008 2010 2012

New Sales Upgrades

13% 15%

28%

7%

22%

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Technology and Administration Costs

• Change in IT resourcing model

• Streamlining of suppliers

• Move to tapeless workflow system

• New single shared service centre for

Finance, HR and IT

500 FTEs from other

Livingston sites

100 FTEs from

London sites

400 FTEs from

Dunfermline site

Watermark Service

Centre, Livingston

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Group profit, earnings and cashflow

£m 2011 2012 Change

Operating Profit 1,073 1,223 +14%

Profit After Tax 725 875 +21%

EPS 41.6p 50.8p +22%

Free cash flow1 869 992 +14%

Free cash flow per share1 49.9p 57.6p +15%

Adjusted for exceptional items. Twelve months ended 30 June. From continuing operations.

Weighted average share count – 2011: 1,743m; 2012: 1,721m

1 excluding payment of deposit of £82m for Premier League rights for 2013-16 seasons.

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Regular dividends

• Unbroken track record of growth

• Final dividend up 11% to 16.2p

• Consistent 50% payout ratio

Twelve months ended 30 June. Dividends paid in respect of the fiscal year

Dividends (£m)

272 291 307

339

405 426

2012 2007 2008 2009 2010 2011

57% growth

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Underpinned by financial flexibility

Clear and consistent priorities for use of capital

• Organic growth “highly accretive, low risk”

• Regular dividends “clear dividend policy, valued by shareholders”

• Selective acquisitions “disciplined approach, track record of returns”

• Share repurchases “balance sheet efficiency”

46

Capital Returns

• New share buy-back announced

today of £500m

• £1.1bn returned to shareholders

• Pro forma net debt/ EBITDA1

increased to 1.6x

1 S&P adjusted and pro forma for 2011 and 2012 share buyback programmes. See appendix for detailed calculation

2 Portion of £750m buy-back to be completed during calendar 2012 (£663m)

Total cash returns in calendar 2012

£m

Interim dividend 2011-12 157

Final dividend 2011-12 269

Share repurchases2

663

Total returns 1,089

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Summary

Jeremy Darroch

Chief Executive

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Broader Contribution

• Team Sky victory, historic

achievement for British sport

• Broad partnership with cycling

• Wider contribution, building

brand and reputation

• Sky's success is good for

customers, shareholders

and the UK

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• Record financial results

– Generating £6.8bn of revenue and £1.2bn operating profit

– Doubled EPS in four years, c£1bn free cashflow

• Transitioned to broadly based growth

• Dealing well with difficult economic backdrop

• Increasing returns for shareholders

2011/12

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• Investing in the customer experience

– Renewed key sports rights with La Liga and Lions Tour

– Adding Demand5 to on-demand line-up

– Adding kids channels to Sky Go service

• Broadly based growth

– New wholesale distribution agreement with TalkTalk

– Partnership with Roku increasing distribution opportunities for NOW TV

– Launching Sky Broadband and Talk in Ireland

Continued momentum

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• Great set of products

• Headroom to add new customers

• Headroom to sell more products to existing customers

• New distribution opportunities

Attractive opportunity ahead

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Q&A

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APPENDIX

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2013 Comment

Tax rate 24%

Corporation tax rate reducing to 23% on 1st

April 2013. £26m tax loss utilisation benefit

in 2012 not repeated

Interest flat No gross debt redeemed until 2015. Average

cash balances lower than in 2012

Capex as % of sales 6.5 – 7.0%

No change to medium term guidance of 6.5%

sales. Accelerated progress in some projects;

NowTV launch; BB launch in ROI and

exchange build-out to 90% of UK.

Dividend payout as % of adjusted earnings 50% No change to guidance given in January 2011

2013 Guidance

55

2011 2012

Profit for the year from continuing operations 758 906

(Net recovery of) costs in relation to News Corporation proposal 15 (31)

Costs relating to restructuring exercise - 11

Living TV restructuring costs 26 -

Recovery of import duty on set-top boxes (41) -

RCF fee write-off - 5

Remeasurement of all derivative financial instruments not qualifying for hedge accounting and

hedge ineffectiveness (18) (19)

Profit on disposal of joint venture - (7)

Profit on disposal of available-for-sale investment (9) -

Tax credit on settlement of liability (15) -

Tax effect of above items 9 10

Adjusted profit for the year from continuing operations 725 875

Reconciliation from reported to adjusted profit

56

£m 2011 2012

Adjusted EBITDA 1,405 1,567

Operating leases 55 57 Transponder capacity commitments and property leases

Share-based compensation expense 69 66 Reversal of non-cash compensation expense

Other 29 33 Dividends from equity investments

S&P Adjusted EBITDA 1,558 1,723

Reported Net Debt 750 876

Operating Leases 714 706 Conservative approach in respect of transponder commitments and

property leases

Accrued interest on debt 47 43 Difference between interest on fixed term debt and interest paid

Add back: FV of derivative asset 232 356 Reversal of FV gain on US$ debt hedging

Deduct US$ debt adjustment (160) (234) Excess of accounting value of US$ debt over hedged sterling value

S&P Adjusted Net Debt 1,583 1,747

S&P Adjusted Net Debt / EBITDA 1.0x 1.0x

S&P Adjusted Net Debt/ EBITDA ratio

57

£m 2012

S&P Adjusted Net Debt 1,747

Buyback adjustment: July 2011 announced 207 Portion of £750m July 2011 Buyback remaining

Buyback adjustment: July 2012 announced 500 Buyback announced at July 2012

Final dividend FY12 269

Pro forma S&P Adjusted Net Debt 2,723

Pro forma S&P Adjusted Net Debt/ EBITDA 1.6x

Pro forma S&P Adjusted Net Debt/ EBITDA ratio