DNA PLC STOCK EXCHANGE RELEASE 25 APRIL 2019, 8:30 AM EEST
DNA arranges two news conferences today. News conference for media and analysts is held at 10:00 am Finnish time. Conference call for analysts and institutional investors is at 1:00 pm Finnish time. Details of the events can be found at the end of this release.
This is a summary DNA’s Interim Report January-March 2019. The complete report is attached to this release and 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.
The first quarter of 2019 in brief
- Net sales increased 2.9% and amounted to EUR 228.9 million (222.3 million).
- Mobile service revenue grew 5.5% and was EUR 118.3 million (112.2 million).
- EBITDA increased 7.7% to EUR 76.1 million (70.7 million), or 33,2% of net sales (31.8%).
- Operating result decreased 1.2% and was EUR 34.8 million (35.2 million). Operating result as a percentage of net sales was 15.2% (15.8%).
- IFRS 16 had a positive impact on EBITDA in the review period and insignificant impact on operating result (Note 12).
- Operating free cash flow increased 4.7% and was EUR 57.7 million (55.2 million).
- Earnings per share was EUR 0.19 (0.19).
- The mobile communication subscription base grew 1.4%, totalling 2,851,000 (2,811,000).
- Revenue per user (ARPU) for mobile communications decreased 3.1% and was EUR 18.3 (18.9).
- The mobile communication subscription turnover rate (CHURN) decreased and was 17.2% (18.9%).
- The fixed-network subscription base (voice, broadband and cable television) grew to 1,154,000 subscriptions (1,138,000).
DNA’s guidance for 2019 remains unchanged
DNA’s net sales in 2019 is expected to remain at the same level as in 2018, and EBITDA in 2019 is expected to increase substantially from 2018. DNA’s financial position and liquidity are expected to remain at a healthy level.
DNA’s guidance for 2019 is disclosed with consideration to the impact of the adoption of IFRS 16. The adoption of IFRS 16 from the beginning of 2019 is estimated to have a positive impact of approximately EUR 17 million in EBITDA in 2019. The impact of IFRS 16 on operating result (EBIT) is insignificant.
Key figures
Figures are unaudited.
The impact of IFRS 16 on the statement of financial position and income statement is presented in note 12.
| EUR million | 1–3/2019 | 1–3/2018 | Change-% | 1–12/2018 |
| Net sales | 228.9 | 222.3 | 2.9 | 911.8 |
| EBITDA | 76.1 | 70.7 | 7.7 | 284.9 |
| % of net sales | 33.2 | 31.8 | 31.2 | |
| Depreciation, amortisation and impairment | 41.3 | 35.4 | 146.0 | |
| Operating result, EBIT | 34.8 | 35.2 | –1.2 | 138.9 |
| % of net sales | 15.2 | 15.8 | 15.2 | |
| Net result before tax | 32.2 | 30.6 | 5.1 | 127.7 |
| Net result for the period | 25.3 | 24.4 | 3.4 | 102.2 |
| Return on investment (ROI), % | 13.5 | 14.4 | 14.1 | |
| Return on equity (ROE), % | 18.6 | 16.7 | 16.4 | |
| Capital expenditure | 32.1 | 19.9 | 61.5 | 138.3 |
| Cash flow after investing activities | –0.9 | –7.9 | 63.4 | |
| Free cash flow to equity | 14.8 | –3.5 | 72.0 | |
| Net debt | 469.6 | 304.0 | 379.3 | |
| Net debt/EBITDA | 1.54 | 1.08 | 1.33 | |
| Net gearing, % | 96.7 | 57.9 | 62.7 | |
| Equity ratio, % | 35.5 | 38.8 | 46.9 | |
| Basic earnings per share, EUR | 0.19 | 0.19 | 0.77 | |
| Diluted earnings per share, EUR | 0.19 | 0.19 | 0.77 | |
| Personnel at the end of period | 1,605 | 1,599 | 1,590 |
CEO’s review
DNA’s year 2019 is off to a good start. Our net sales increased 2.9% to EUR 228.9 million in comparison to the first quarter of 2018. The increase was fuelled by the growth of mobile device sales and mobile service revenue, which was boosted in particular by the positive development of our subscription base. Mobile service revenue was up 5.5% and mobile device sales 17.1% from the reference period. Our EBITDA grew 7.7% to EUR 76.1 million, or 33.2% of net sales.
Our mobile communication subscription base grew by 40,000 from the reference period, totalling 2,851,000 at the end of March. Our fixed-network broadband subscription base grew by 18,000 and our cable television subscription base by 11,000 subscriptions. Revenue per user (ARPU) for mobile communications decreased from the reference period and was EUR 18.3 (18.9). This is mostly due to the decrease in interconnection charges in December 2018. Our mobile communication subscription turnover rate (CHURN) was 17.2% (18.9%).
We prepared our network for 5G deployment with the introduction of 5G-capable technology and increased network capacity. The upgrade of our 4G network that got under way in the autumn of 2018 was completed during the first quarter in cities including Helsinki, Tampere and Turku. In some areas, the network updates have more than doubled the 4G data transfer speeds. We will expand our 5G network swiftly once 5G-capable mobile devices become widely available.
According to the report published by Tefficient in March, DNA’s customers had the second-highest mobile data usage per subscription in the world, averaging 20.8 gigabytes per month. In 2018, the average figure was 15.9 gigabytes.
One of our strategic objectives alongside customer satisfaction and financial development is being a great place to work. Our long-term work to improve our corporate culture further received a great accolade in February 2019 when DNA was chosen the best workplace in Finland by the Great Place to Work institute in the category of large organisations.
At the heart of DNA is to operate as a reliable and responsible corporate citizen. We have four key areas in our updated responsibility strategy: digital inclusion, being a great place to work, climate-friendly operations and good governance. Our climate objective is to reduce energy indirect greenhouse gas emissions by 100% by 2023 from the level reported in 2014.
After the review period, on 9 April 2019, Norwegian telecommunications Group Telenor announced that it will acquire 54% of the shares of DNA from our two largest shareholders, Finda Telecoms Oy and PHP Holding Oy. The transaction is subject to certain conditions, including the approval by the general meetings of the seller entities and required regulatory approvals.
We will continue to develop our business according to our strategic objectives, focusing on customer experience, personnel satisfaction and profitable growth. DNA’s net sales in 2019 is expected to remain at the same level as in 2018. With consideration to the impact of IFRS 16, EBITDA in 2019 is expected to increase substantially from 2018. DNA’s financial position and liquidity are expected to remain at a healthy level.
Jukka Leinonen
CEO
DNA’s financial publications in 2019:
- Half-year financial report (January-June), 19 July 2019
- Interim Report January-September 2019, 22 October 2019
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 https://corporate.dna.fi/reports-and-presentations#tulostiedotustilaisuudet.
Conference call for analysts and investors at 1:00 pm EEST, 12:00 (noon) CEST, 11:00 am BST
The audience is welcome to participate and ask questions through a conference call by dialing in a couple of minutes before the scheduled time;
- Finland: +358 9 8171 0310
- United Kingdom: +44 333 300 0804
- United States: +1 631 913 1422
- Participant Passcode: 6650 2654#
The result bulletin, presentation materials as well as a link to the webcast and audiocast will be available on DNA’s website before the event: https://corporate.dna.fi/reports-and-presentations#tulostiedotustilaisuudet. Recordings of the both events will also be available on the same website later during the result 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, communications(at)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. DNA was ranked as Finland's best place to work in 2019 in the Great Place to Work survey's large companies category. 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.
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