DNA PLC STOCK EXCHANGE RELEASE 2 FEBRUARY 2018 AT 8:30 AM EET
DNA arranges two news conferences today. News conference for media and analysts is held at 10:00 am Finnish time at DNA House. Conference call for analysts and institutional investors is at 2:00 pm Finnish time. Details of the events can be found at the end of this release.
This is a summary of DNA's Financial Statements Bulletin 2017. The complete report is attached to this release and is also available at www.dna.fi/investors.
Summary
Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year (reference period).
October-December 2017
- Net sales increased 4.2% and amounted to EUR 234.6 million (225.2 million).
- EBITDA increased 28.1% to EUR 65.7 million (51.3 million), or 28.0% (22.8%) of net sales.
- Comparable EBITDA was EUR 65.7 million (57.5 million).
- The operating result increased 85.2% and was EUR 26.9 million (14.5 million). Operating result as a percentage of net sales increased and was 11.5% (6.4%).
- The comparable operating result amounted to EUR 29.9 million (20.8 million).
- Revenue per user (ARPU) for mobile communications amounted to EUR 19.0 (17.5).
- The mobile communication subscription turnover rate (CHURN) was 18.1% (17.8%).
January-December 2017
- Net sales increased 3.2% and amounted to EUR 886.1 million (858.9 million).
- EBITDA increased 15.0% to EUR 271.8 million (236.3 million), or 30.7% (27.5%) of net sales.
- Comparable EBITDA was EUR 271.8 million (247.1 million).
- The operating result increased 35.4% and was EUR 123.5 million (91.2 million). Operating result as a percentage of net sales increased and was 13.9% (10.6%).
- The comparable operating result amounted to EUR 126.6 million (102.1 million).
- The mobile communication subscription base grew 2.5%, totalling 2,811,000 (2,742,000).
- Revenue per user (ARPU) for mobile communications amounted to EUR 18.4 (17.1).
- The mobile communication subscription turnover rate (CHURN) was 18.3% (16.1%).
- The fixed-network subscription base (voice, broadband and cable television) grew and was 1,130,000 subscriptions at the end of the year (1,113,000).
Board of Directors' proposal for distributable funds
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.46 per share and a capital payment of EUR 0.17 per share from the reserve for invested unrestricted equity, in total EUR 0.63 per share, be distributed for the financial period ending 31 December 2017. The Board also proposes that an extra capital payment of EUR 0.47 per share be distributed from the reserve for invested unrestricted equity. In total, the Board's proposal is to distribute EUR 1.10 per share.
DNA's guidance for 2018
DNA's net sales and comparable operating result are expected to remain at the same level as in 2017. The Group's financial position and liquidity are expected to remain at a healthy level.
Key figures
Figures are unaudited.
| EUR million | 10-12/2017 | 10-12/2016 | Change, % | 1-12/2017 | 1-12/2016 | Change, % |
| Net sales | 234.6 | 225.2 | 4.2 % | 886.1 | 858.9 | 3.2 % |
| EBITDA | 65.7 | 51.3 | 28.1 % | 271.8 | 236.3 | 15.0 % |
| - % of net sales | 28.0 % | 22.8 % | 30.7 % | 27.5 % | ||
| Comparable EBITDA * | 65.7 | 57.5 | 14.2 % | 271.8 | 247.1 | 10.0 % |
| - % of net sales | 28.0 % | 25.5 % | 30.7 % | 28.8 % | ||
| Depreciation, amortisation and impairment | 38.8 | 36.7 | 148.2 | 145.0 | ||
| Operating result, EBIT | 26.9 | 14.5 | 85.2 % | 123.5 | 91.2 | 35.4 % |
| - % of net sales | 11.5 % | 6.4 % | 13.9 % | 10.6 % | ||
| Comparable operating result* | 29.9 | 20.8 | 44.2 % | 126.6 | 102.1 | 24.0 % |
| - % of net sales | 12.8 % | 9.2 % | 14.3 % | 11.9 % | ||
| Net result before tax | 24.6 | 12.2 | 102.3 % | 114.2 | 81.7 | 39.8 % |
| Net result for the period | 21.6 | 9.6 | 123.8 % | 93.1 | 65.2 | 42.8 % |
| Return on investment (ROI), % | 11.5 | 6.1 | 13.1 | 9.6 | ||
| Return on equity (ROE), % | 14.5 | 6.8 | 15.5 | 11.6 | ||
| Capital expenditure | 74.1 | 58.7 | 26.1 % | 144.0 | 143.6 | 0.3 % |
| Cash flow after investing activities | -2.1 | 3.8 | 107.7 | 83.5 | ||
| Free cash flow to equity | 118.8 | 92.6 | ||||
| Net debt, EUR million | 304.3 | 321.7 | ||||
| Net debt/EBITDA | 1.16 | 1.57 | 1.12 | 1.36 | ||
| Net gearing, % | 50.3 | 53.9 | ||||
| Equity ratio, % | 50.6 | 48.4 | ||||
| Basic earnings per share, EUR | 0.16 | 0.07 | 0.69 | 0.51 | ||
| Diluted earnings per share, EUR | 0.16 | 0.07 | 0.69 | 0.51 | ||
| Personnel at the end of period | 1 601 | 1 668 |
*Group key figures
CEO's review
DNA's first year as a listed company has been successful in terms of achieving our strategic and financial objectives. DNA's net sales and operating result reached record levels in 2017. The growth of our mobile subscription base and favourable mobile billing gave our mobile service revenue a significant boost of 12.1 %.
In 2017, our net sales increased 3.2% to EUR 886.1 million, fuelled by the growth in service revenue. Mobile device sales were up considerably from 2016. Our comparable operating result grew 24% and was EUR 126.6 million, or 14.3% of net sales (11.9%). As planned, our operative capital expenditure remained at a lower level year-on-year.
DNA's operative free cash flow increased 26% to EUR 138.9 million from 2016. DNA has a strong balance sheet which gives us the opportunity to engage in new potential business opportunities also after the Board of Director's proposal for distributable funds.
Our mobile communication network subscription volumes were up 69,000 from 2016. DNA's revenue per user (ARPU) improved and was EUR 18.4 in 2017, compared to EUR 17.1 in 2016. Our ARPU was strengthened by 3G subscribers switching to high-speed 4G subscriptions. Competition remained intense throughout 2017, affecting our CHURN rate which increased to 18.3% from 16.1% in 2016. Our broadband and cable television subscriptions increased in total by 29,000 in 2017.
According to a report released by telecommunications analysis and consulting company Tefficient in December 2017, DNA's customers had the highest mobile data usage in the world per subscription in the first half of 2017: DNA's data volumes per subscription averaged 14.7 gigabytes (GB) per month. During the third quarter of 2017, the volume had reached 16.5 gigabytes. Finland is among the top countries in the world in mobile data usage per subscription. This is due to high-quality connections, pricing models that include unlimited data transfer as well as low price of mobile data.
In recent years, we have made significant investments in our personnel's know-how, data systems and analytics tools to create omnichannel customer experience. This has produced positive results: in November 2017, DNA won the title of Digital Leader 2018 in the study measuring digital maturity in the Nordic countries*.
Our customer satisfaction improved further in 2017. DNA's Net Promoter Score (NPS), which measures customer satisfaction by the likelihood that a customer would recommend the product or service, improved further. Our personnel satisfaction continued to improve, too, for a third consecutive year. DNA received the Great Place to Work® certificate as proof of high job satisfaction. Satisfied and motivated employees are a crucial foundation for our ability to provide an excellent customer experience now and in the future.
We expect both DNA's net sales and comparable operating result in 2018 to remain at the same level as in 2017. The Group's financial position and liquidity is expected to remain at a healthy level.
Jukka Leinonen
President and CEO
*Digital Leaders study by BearingPoint: http://digitalleaders.bearingpoint.com/finland
DNA's AGM and financial publications in 2018:
- 1 March 2018: Annual Report 2017
- 22 March 2018: Annual General Meeting
- 19 April 2018: Interim Report 1-3/2018
- 19 July 2018: Half Year Financial Report 1-6/2018
- 19 October 2018: Interim Report 1-9/2018
News conferences
DNA will arrange a news conference for media and analysts in Finnish at 10:00 am EET. The event will take place at DNA House, Läkkisepäntie 21, Helsinki. Registration for the event is requested by email to communications@dna.fi. The news conference will also be webcasted live on www.dna.fi/investors.
Conference call for analysts and institutional investors in English at 2:00 pm EET
The audience is welcome to participate and ask questions through a conference call. Participants are requested to dial in a couple of minutes before the scheduled time;
- Finland: +358 (0)9 7479 0360
- UK: +44 (0)330 336 9104
- USA: +1 323 794 2095
- Participant Passcode: 736 430
The result bulletin and presentation materials as well as a link to the webcast will be available on DNA's website before the event: www.dna.fi/investors.
Recordings of the both events will be available on DNA's website, www.dna.fi/investors, later during the day.
Additional information:
Jukka Leinonen, CEO, DNA Plc, tel. +358 44 044 1000, jukka.leinonen(at)dna.fi
Timo Karppinen, CFO, DNA Plc, tel. +358 44 044 5007, timo.karppinen(at)dna.fi
Marja Mäkinen, Head of IR, DNA Plc, tel. +358 44 044 1262, marja.makinen(at)dna.fi
DNA Corporate Communications, tel. +358 44 044 8000, viestinta(at)dna.fi
DNA Plc is a Finnish telecommunications group providing high-quality voice, data and TV services for communication, entertainment and working. DNA is Finland's largest cable operator and the leading pay TV provider in both cable and terrestrial networks. For DNA, the key area for growth in corporate business is the new way of working, independent of time and place, facilitated by smart terminal devices, diverse communications services and rapid connections. In 2017, DNA recorded net sales of EUR 886 million and an operating profit of EUR 124 million. DNA has more than 3.9 million subscriptions in its fixed and mobile communications networks. The Group also includes DNA Store, Finland's largest retail chain selling mobile phones. DNA shares are listed on Nasdaq Helsinki Ltd. For further information, visit www.dna.fi or follow us on Twitter @DNA_fi and Facebook.
