DNA PLC STOCK EXCHANGE RELEASE 19 APRIL 2018, 8:30 AM EEST
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 Q1 2018 Interim Report. 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). Figures are unaudited. For 2018, as required by the IFRS standards, the financial tables contain figures reported according to the IFRS 15 and IFRS 9 standards adopted on 1 January 2018 and, as required by IFRS 15, figures adjusted and disclosed as if they were prepared under 2017 revenue guidance. The comparative analysis in the report section is disclosed as if the figures were prepared under 2017 revenue guidance. More information: Note 11.
January-March 2018
- Net sales increased 4.2% and amounted to EUR 222.3 million (213.4 million).
- EBITDA increased 9.6% to EUR 72.3 million (65.9 million), or 32.5% (30.9%) of net sales.
- There were no items affecting the comparability of EBTIDA or operating result in the review or reference period.
- Operating result increased 23.3% and was EUR 35.6 million (28.9 million). Operating result as a percentage of net sales was 16.0% (13.5%).
- Operating free cash flow grew 14.7% to EUR 56.4 million (49.2 million).
- Earnings per share increased and was EUR 0.19 (0.16).
- The mobile communication subscription base grew 2.9%, totalling 2,811,000 (2,732,000).
- Revenue per user (ARPU) for mobile communications amounted to EUR 19.0 (17.8).
- The mobile communication subscription turnover rate (CHURN) was 18.9% (21.0%).
- The fixed-network subscription base (voice, broadband and cable television) had 1,138,000 subscriptions (1,120,000).
DNA's guidance for 2018 remains unchanged
DNA's net sales and comparable operating result are expected 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.
DNA's guidance for 2018 is disclosed as it was prepared under 2017 revenue guidance and does not currently incorporate the potential impact from the adoption of IFRS 15 as of 1 January 2018.
Key figures
Figures are unaudited.
| EUR million | 1-3/2018 Reported | 1-3/2018 Adjusted* | 1-3/2017 Reported | Change -% | 1-12/2017 Reported |
| Net sales | 222.3 | 222.3 | 213.4 | 4.2 % | 886.1 |
| EBITDA | 70.7 | 72.3 | 65.9 | 9.6 % | 271.8 |
| - % of net sales | 31.8 % | 32.5 % | 30.9 % | 30.7 % | |
| Comparable EBITDA ** | 70.7 | 72.3 | 65.9 | 9.6 % | 271.8 |
| - % of net sales | 31.8 % | 32.5 % | 30.9 % | 30.7 % | |
| Depreciation, amortisation and impairment | 35.4 | 36.7 | 37.1 | 148.2 | |
| Operating result, EBIT | 35.2 | 35.6 | 28.9 | 23.3 % | 123.5 |
| - % of net sales | 15.8 % | 16.0 % | 13.5 % | 13.9 % | |
| Comparable operating result** | 35.2 | 35.6 | 28.9 | 23.3 % | 126.6 |
| - % of net sales | 15.8 % | 16.0 % | 13.5 % | 14.3 % | |
| Net result before tax | 30.6 | 31,0 | 26.6 | 16.3 % | 114.2 |
| Net result for the period | 24.4 | 24.7 | 21.2 | 16.6 % | 93.1 |
| Return on investment (ROI), % | 14.4 | 15.2 | 12.5 | 13.1 | |
| Return on equity (ROE), % | 16.7 | 18.2 | 14.9 | 15.5 | |
| Capital expenditure | 19.9 | 20.3 | 21.2 | -4.3 % | 144.0 |
| Cash flow after investing activities | -7.9 | -7.9 | 10.3 | 107.7 | |
| Free cash flow to equity | -3.5 | -3.5 | 14.7 | 118.8 | |
| Net debt | 304.0 | 304.0 | 314.3 | 304.3 | |
| Net debt/EBITDA | 1.08 | 1.05 | 1.19 | 1.12 | |
| Net gearing, % | 57.9 | 62.9 | 57.6 | 50.3 | |
| Equity ratio, % | 38.8 | 37.2 | 45.3 | 50.6 | |
| Basic earnings per share, EUR | 0.19 | 0.19 | 0.16 | 0.71 | |
| Diluted earnings per share, EUR | 0.19 | 0.19 | 0.16 | 0.71 | |
| Personnel at the end of period | 1 599 | 1 599 | 1 684 | 1 601 |
*Adjusted figures are presented according to the revenue standard applied in 2017 excluding the impact of the IFRS 15 standard applicable as of 1 January 2018.
**Group key figures
CEO's review
DNA's year 2018 is off to a strong start. Our net sales increased 4.2% to EUR 222.3 million, and our operating result 23.3% to EUR 35.6 million. The positive development was fuelled by the growth in service revenue, which was boosted in particular by the growth of our mobile subscription base and increased share of 4G subscriptions. Mobile device sales were also at a good level. Typically, operative capital expenditure remained low in the first quarter, and also slightly lower year-on-year.
Our mobile communication network subscription volumes were up 79,000 from the reference period. DNA's revenue per user (ARPU) for mobile communications improved and was EUR 19.0 in the first quarter, compared to 17.8 a year ago. Among other things, our ARPU was strengthened by 3G subscribers switching to high-speed 4G subscriptions. Competition remained intense also in the first quarter of 2018. Our mobile communication subscription turnover rate (CHURN) was lower than in the reference period, but slightly higher than at the end of 2017. Our fixed-network broadband and cable television subscription base increased by 29,000 from the reference period.
In the first quarter, our fibre optic connections became available to housing companies and corporate customers in the city of Jyväskylä. Demand for higher connection speeds keeps increasing as the number of connected devices grows in Finnish households.
In addition to providing excellent customer experience and achieving profitable and faster than average market growth, our key strategic objectives include being a great place to work. Satisfied and motivated employees are a crucial foundation for our ability to provide an excellent customer experience now and in the future. Our consistent work to improve employee satisfaction received external recognition in February 2018: the survey conducted by the Great Place to Work Institute ranked DNA second in the category of large organisations.
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. Our measures to improve customer experience will continue in 2018, with the aim of further developing and diversifying the competence of our personnel.
Jukka Leinonen
President and CEO
DNA's financial publications in 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 EEST. 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 EEST
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 036
- United Kingdom: +44 (0)330 336 9104
- United States: +1 929-477-0338
- Participant Passcode: 225394
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.
