DNA PLC STOCK EXCHANGE RELEASE 1 February 2019 8:35am (EET)
DNA has updated its medium-term financial goals with respect to EBITDA margin and profit distribution policy. In setting the EBITDA target, account has been taken of the IFRS16 standard, adopted at the beginning of 2019, which is estimated to have a positive effect of approximately EUR 17 million on EBITDA in 2019. The impact of IFRS 16 on operating result (EBIT) is insignificant.
DNA's medium-term financial goals are:
- net sales growth faster than average market growth
- EBITDA margin at least 34% (earlier goal: at least 32%).
- operative capital expenditure less than 15% of net sales (excluding capitalized spectrum licence payements and the effect of IFRS16, which is estimated to increase capital expenditure in 2019 by approximately EUR 8 million)
- net debt/EBITDA ratio of less than 2.0, which may temporarily be exceeded if DNA finds attractive opportunities that allow the company to complement its offering in existing markets.
DNA's profit distribution policy: DNA's goal is to pay a growing dividend to its shareholders or by other means to return capital equalling 80-100 percent of the net profit for the period. In addition, the Board of Directors may consider the distribution of excess profit to shareholders for a specific financial period. When making the profit distribution decision, the Board of Directors will take into account the company's financial status and financial position as well as future funding needs and financial goals.
Previous profit distribution policy: DNA aims for a pay-out ratio of some 70-90% of the company's free cash flow to equity for the financial year.
"The updated EBITDA margin target reflects DNA's ambition to continuously improve profitability through growth and maintaining strong operational efficiency. The steady increase in EBITDA has been primarily influenced by the long-term positive development of mobile service revenue and the continuously improved operational efficiency. In 2018, our operative capital expenditure amounted to 14.7% of net sales, and we estimate that operative capital expenditure in proportion to net sales will remain at the level of the previous year in 2019. Net debt/EBITDA ratio was 1.33 at the end of 2018. The new profit distribution policy is tied to the company's financial result, which will in future give a more stable estimate of the dividend trend," comments Jukka Leinonen, CEO of DNA.
Further information:
Jukka Leinonen, CEO, DNA Plc, tel. +358 44 044 1000, jukka.leinonen(at)dna.fi
Timo Karppinen, CFO, DNA Plc, +358 44 044 5007, timo.karppinen(at)dna.fi
Marja Mäkinen, Head of IR, DNA Plc, +358 44 044 1262, marja.makinen(at)dna.fi
DNA Corporate Communications, +358 44 044 8000, viestinta@dna.fi
DNA 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. Our mission is to provide products and services that make our private and corporate customers' lives simple. As a telecommunications operator, DNA plays an important role in society by providing important communication connections and by enabling digital development. In 2018, our net sales were EUR 912 million and our operating profit EUR 139 million. DNA has more than 4 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.