Chief Executive's statement

Our goal is long-term, sustainable success that creates value for shareholders and has a positive impact on the communities in which we operate. We believe that the most durable businesses stand out for their commitment to continuous improvement. They constantly seek to adapt so that they stay relevant tomorrow and into the future. That is why Sky's story has always involved constant renewal. We know that to remain successful, we can't stand still.

To satisfy our existing customers and to attract more people to Sky, we need to keep moving forward and improving what we offer. That means getting better on screen, providing great entertainment that is worth paying for. It means making it easy for our customers to access Sky content, easy to watch it when and where it suits them, and easy to get more value from their subscription. And it means expanding our range of services so we offer a set of entertainment and communications products that meet customers' needs better than anyone else.

Looking back on 2012, we've continued our consistent approach to growth and returns. We've combined investment where it matters most to customers with a strong focus on driving greater efficiency across our operations. We believe this is the best formula to achieve sustainable growth in revenue, profit and cash flow over time.

Our results show that this approach is working well. Despite what continues to be a tough economic environment, more customers are choosing Sky for a wider range of products than ever and our rates of customer loyalty remain very strong. During the year, we added almost three million subscription products to reach a total of more than 28 million and more than 300,000 net new households joined us. This means that Sky is now the choice of around 40% of UK households and a growing proportion of those customers choose Sky for home communications as well as for television.

This year's strong operational growth builds further on the progress that we've made over recent years. We've successfully transitioned the business to a multi-product strategy, doubling our total product base since 2008, while adding 1.6 million new customers as well. Importantly, we've achieved this growth while delivering an increasingly strong financial performance. Over the same period, we've added almost £2 billion to revenue and doubled adjusted basic earnings per share, which exceeded 50 pence for the first time this year.

Positive impact on the UK economy

As Sky has evolved, so has the positive impact that our business has on our industry and the wider economy. For example, we are now the UK's biggest investor in television programming, working with more than 100 independent producers for our entertainment channels alone. And we provide support and investment for British sport at all levels from the elite to the grassroots.

To measure and explain the scale of our wider economic impact on the UK, this year we commissioned a report from independent consultants Oxford Economics. It found that Sky contributes over £5 billion a year to UK GDP, supports nearly 120,000 jobs and generates £2.3 billion of tax revenues.

We hope that our story provides a good example of the important contribution that a successful British company can make, particularly at a time when economic growth is harder to come by. Our appetite to do more remains strong and we hope to contribute even more in the future.


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Jeremy DarrochChief Executive

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