Síminn — Investor Presentation 2018

Apr 24, 2018

Q1 2018 Results

Orri Hauksson og Oskar Hauksson
25. april 2018

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Highlights in Q1 2018

FINANCE

| EBITDA
2.231 m.kr. | EBITDA ratio
32,5% | Cash
805 m.kr. |
| --- | --- | --- |
| Net debt / EBITDA*
1,93 | CAPEX
1.182 m.kr. | Equity ratio
61,4% |

*EBITDA trailing twelve months

HIGHLIGHTS

• Revenue increases YoY and mobile revenue show signs of rebound
• Inbound roaming revenue are unchanged YoY in spite of RLH
• Cost reduction remains a focus area
• Homes connected to Míla fiber continue to grow – Homes passed are now close to 54.000, an increase of 3.000 in Q1

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Q1 2018 - Results

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Income statement Q1 2018

	Q1 2018	Q1 2017	Change	Change in %
Net sales	6.756	6.602	154	2,3%
Cost of sales	(3.302)	(3.246)	(56)	1,7%
Gross profit	3.454	3.356	98	2,9%
Gross profit ratio	51,1%	50,8%
Other operating income	118	121	(3)	-2,5%
Operating expenses	(2.275)	(2.290)	15	-0,7%
Operating profit	1.297	1.187	110	9,3%
Operating profit/Net sales	19,2%	18,0%
Finance income	52	135	(83)	-61,5%
Finance cost	(241)	(352)	111	-31,5%
Net exchange rate differences	7	10	(3)	-30,0%
Net financial items	(182)	(207)	25	-12,1%
Income tax	(228)	(206)	(22)	10,7%
Net profit	887	774	113	14,6%
Depreciation and amortisation	(934)	(912)	(22)	2,4%
EBITDA	2.231	2.099	132	6,3%
EBITDA ratio	32,5%	31,2%
EBIT	1.297	1.187	110	9,3%
EBIT ratio	18,9%	17,7%

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Revenue by segments Q1 2018

	Q1 2018	Q1 2017	Change	Change %
Mobile	1.541	1.582	(41)	-2,6%
Fixed voice	498	546	(48)	-8,8%
Internet & network	2.260	2.072	188	9,1%
TV	1.167	1.006	161	16,0%
IT services	702	900	(198)	-22,0%
Equipment sales	427	371	56	15,1%
Other revenue	279	246	33	13,4%
Total revenue	6.874	6.723	151	2,2%
Adjusted for disc. operations *	6.874	6.633	241	3,6%

*Sensa DK Aps was sold in end of 2017

• Other revenue
• Equipment sales
• IT services
• TV
• Internet & network
• Fixed voice
• Mobile

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Balance sheet

	31.3.2018	31.12.2017
Assets
Non-current assets
Property, plant and equipment	17.247	17.024
Goodwill	31.435	31.435
Intangible assets	3.252	3.226
Other non-current assets	577	658
Non-current assets	52.511	52.343
Current assets
Inventories	2.348	2.345
Accounts receivables	4.086	4.470
Other current assets	804	736
Cash and cash equivalents	805	718
Current assets	8.043	8.269
Total assets	60.554	60.612
Equity and liabilities
Equity
Total equity	37.174	36.281
Non-current liabilities
Borrowings	16.493	16.781
Deferred tax liabilities	803	817
Non-current liabilities	17.296	17.598
Current liabilities
Bank loans	0	500
Accounts payables	2.870	2.950
Current maturities of borrowings	1.150	1.150
Other current liabilities	2.064	2.133
Current liabilities	6.084	6.733
Total equity and liabilities	60.554	60.612

Equity ratio

Equity ratio

Net interest bearing debt

Net debt to EBITDA

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Cash flow Q1 2018

	Q1 2018	Q1 2017
Cash flow from operating activities
Operating profit	1.297	1.187
Operational items not affecting cash flow:
Depreciation and amortisation	934	912
Other items not affecting cash flow	6	9
	2.237	2.108
Changes in current assets and liabilities	153	319
Cash generated by operation	2.390	2.427
Net interest expenses paid during the period	(191)	(322)
Payments of taxes during the period	(156)	(9)
Net cash from operating activities	2.043	2.096
Investing activities
Net investment in property, plant and equipments	(1.182)	(1.047)
Other investment	28	7
Investing activities	(1.154)	(1.040)
Financing activities
Net Financing activities	(787)	(458)
Financing activities	(787)	(458)
Increase (decrease) in cash and cash equivalents	102	598
Translation effects on cash	(15)	0
Cash and cash equivalents at the beginning of the year	718	3.667
Cash and cash equivalents at the end of the year	805	4.265

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CAPEX development

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CAPEX Míla

• Homes passed are reaching 60.000, both the capital area and the rural area.
• The agreement with Gagnaveita Reykjavíkur creates opportunity to roll-out fiber faster than previously planned. This applies both to the capital and the rural area.
• The aim is to avoid double cost, decrease project time, decrease environmental impact and effects for home owners.
• In parallel to fiber rollout in the capital area the rural area will get increased focus
• Míla has infrastructure in i.e. Akureyri, Selfoss and Reykjanesbæ
• Míla will own and operate new fiber networks in Snæfellsbær, Rangárþing Eystra and in Grímsnes- and Grafningshreppur following a tender from the municipalities.

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Operations in Q1 2018

Improved operations

• Revenue from data and TV services grow YoY
• The TV business model introduced in the fall of 2015 has been a success
• Mobile subscriptions increase
• Strong growth in Prenna in recent months
• Lower revenue decrease in mobile
• Inbound roaming revenue unchanged YoY in spite of RLH
• Sale of hardware decline at Sensa but service revenue are strong
• Agreement with Verne for hosting- and networking is in operation
• Cost reduction still a focus area
• The average number of FTE decreases YoY

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Guidance for 2018

Unchanged guidance

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Highlights

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Mila can service 53.600 homes with fiber in the capital area

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sensa

The transfer of data centers to Verne is progressing well

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Available on the

App Store

Get it on

Google play

Updated TV portal and Síminn TV app

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GUDJOHNSEN

STRÜKTÜR

KOKKAFLAKK

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Linear view – Minutes per. month

Source: Gallup

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Trend in TV subscriptions

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VOD development in Síminn Premium TV

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Tourists triple data usage

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DRENNA

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C

Pay

Co-operation with Verifone

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Appendix

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Business segments

• Mobile: Revenue from mobile services in Iceland and abroad, whether traditional GSM service, satellite service, wholesale mobile service or other mobile service.
• Fixed voice: Revenue from fixed voice service (fees and traffic) both retail and wholesale.
• Internet & network: Revenue from data service both wholesale and retail, incl. xDSL service, GPON, Internet, IP net, core network, local loop and access network.
• TV: Revenues from TV broadcast and distribution and Síminn TV (fees, traffic and advertisement).
• IT services: Revenue from hosting and operations, advisor fees and sold service and IT related hardware sales.
• Equipment sales: Revenue from sale of telco equipment.
• Other revenue: Revenue from i.e. sold telco service and hosting.

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Disclaimer

Information contained in this presentation is based on sources that Síminn hf. ("Síminn" or the "company") considers reliable at each time. Its accuracy or completeness can however not be guaranteed. This report contains forward-looking statements that reflect the management's current views with respect to certain future events and potential financial performance. Although the management believe that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The forward looking information contained in this presentation applies only as at the date of this presentation.

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