BSkyB AGM 2011 Chairman's Statement

BSkyB ANNUAL GENERAL MEETING 2011

Chairman's Statement

29th November 2011

Good morning everyone and welcome to the 23rd Annual General Meeting of British Sky Broadcasting.

Thank you all for coming.

As is the custom, I will begin by introducing your Board of Directors.

On my right is Nicholas Ferguson , and to his right in turn are Jeremy Darroch, Andrew Griffith, Andrew Higginson, David Evans, Arthur Siskind and Allan Leighton.

On my left is David Gormley, the Company Secretary, and to his left are Jac Nasser, Tom Mockridge, Lord Wilson of Dinton, David DeVoe and Gail Rebuck.

Due to a family illness, Danny Rimer is unable to attend this morning's meeting and has asked me to pass on his apologies.

On behalf of the Board and shareholders, I want to pay tribute to Allan Leighton and David Evans, both of whom are stepping down after today's meeting as non-executive directors -- after giving a combined 22 years' service. It had been anticipated that Allan and David would retire at last year's AGM in line with best practice. However, the Board asked them to stay on in order to ensure continuity during the offer period which came to an end in July. During their time on the Board, Allan and David have played significant roles in what has been a period of sustained success for our company and we are immensely grateful to them for their contributions.

As announced earlier this month, the Board intends to appoint two new, non-executive directors to succeed Allan and David. It is proposed that Martin Gilbert, Chief Executive of Aberdeen Asset Management plc, and Matthieu Pigasse, CEO of Lazard France, will join the Board immediately after this meeting. They will bring wide-ranging expertise, complementing and adding to the existing skills of our Board. We look forward to welcoming them to BSkyB.

Before we move on to the formal business of today's meeting, I would like to spend a few minutes reflecting on the progress that the business has made.

As you know, the environment for consumer businesses has continued to be challenging over the last year. As families face increasing pressure on their household budgets, the consequences have been felt widely across all sectors of the consumer economy, including those in which Sky operates.

Against that backdrop, we can be pleased with our company's excellent operational and financial performance. This has been a year of delivery for both customers and shareholders, for which the entire team at Sky deserves credit.

As you'll be aware, we passed our long-term target of 10 million TV customers last year. This was a significant achievement. But more important than any single target is the way that our business has been transformed through a constant appetite for change and a strong culture of continuous improvement.

We have opened up a wider growth opportunity by continuing to develop our diverse set of entertainment and communications products.

We have continued to invest in our programming offering and set the pace of innovation across the industry.

And we continued to strengthen the capabilities of our organisation so that we are better equipped for long-term success.

Our results for the last year show that the business is benefiting from more broadly based growth. We added more than 10,000 subscription products a day - taking the total to more than 25 million - as customers responded to the quality, choice and value that we offer.

Combined with a continued focus on efficiency, this level of customer demand has translated into good financial results.

Once again, we've seen double-digit growth across the board, with group revenue up 16% to £6.6 billion and adjusted operating profit up 23% to £1.1 billion.

This performance has allowed us to increase returns to shareholders by proposing a 20% increase in the full year dividend and a £750 million share buy-back programme, which shareholders will be asked to approve today.

The Board and the management have significant confidence in the opportunity ahead, but we must not be complacent. As we have entered newer, larger segments, like residential communications or original production, we face new and important competition. And our success in creating and retailing incredible television, is in itself a magnet to new entrants, small and large.

Recent developments in online distribution of content, a field that Sky has been very active in, only highlight the shifting nature of the terrain on which we stand. It is our challenge, as your Board, to help the company continue to define its own success and to set the pace for the market. It is a credit to the business, to the leadership, and to you, the shareholders, that the company has sustained its appetite for change, and for challenge. We believe it will continue to serve us well as we invest and grow in the future.

Our goal at Sky is to build a successful and sustainable business for the long-term. We recognise that our ability to do so depends on our relationships with millions of families. As we look to deepen and strengthen these relationships, we recognise the importance of making a positive contribution to UK and Irish life.

As well as doing the right thing in our day-to-day business, we have made further progress over the past year in the three areas where we believe that we can use our strengths to make a difference.

On the environment, our new broadcasting and production facility, Sky Studios, will help us meet our challenging targets to cut carbon emissions. And Sky Rainforest Rescue, our partnership with WWF, is on track to meet its target of raising £4 million to help save a billion trees in the Amazon rainforest.

In sport, we attracted a record number of cyclists to take part in our mass participation Sky Ride events in towns and cities across the UK and Ireland.

And in the arts, we strengthened our investment in the cultural landscape of the UK and Ireland by launching the Sky Arts Ignition Series, which will bring new funding to arts organisations and emerging artists.

Finally, as shareholders are aware, in July, News Corporation - where I am an Executive Director - withdrew its proposal to acquire the shares in Sky that it does not already own.

In doing so, News Corporation stated that it remains a committed, long-term shareholder in Sky, proud of the success that the Company has achieved over many years, and of News Corporation's contribution to it. I would simply reiterate that commitment today.

I would like to conclude by taking the opportunity to thank all our talented colleagues at Sky for the passion, focus and commitment they have shown over the past year.

Similarly, I would also like to thank all of you - our shareholders - for your continued support.