Syn — Earnings Release 2018

Nov 1, 2018

Reykjavík, November 1st 2018.

SÝN - Lower EBITDA guidance for 2018

In light of preliminary results of Q3 and updated forecast for Q4, the result is that the EBITDA outlook for 2018 is lower than anticipated. Previous outlook had been expressed around the lower end of the published guidance (ISK 4,000m of regular operations). The draft of the Q3 results indicates EBITDA of ISK 1,032m, which is 21% increase from the Q3 in 2017. Despite this growth in EBITDA, the quarter is delivering under expectations especially due to large projects related to integration of systems and transfer of units and employees, that have resulted in strain of resources and in some cases interruptions of operations. Now it is clear the dynamics of still ongoing projects, as the transfer of TV studios in the Q4, as well as the weakening of the ISK recently will as well contribute to a negative effect on the outlook for the Q4.

Financial report for the Q3 2018 will be published after the close of market on November 7th. According to new internal 2018 outlook for SYN, the company will deliver around EBITDA ISK 3,600 m on regular operations, given ISK 150m of specified one off cost that were especially apparent during the first half of the year regarding the acquisitions of specified assets and operations from 365 media.

The merger has as well required more level of investment than expected. Due to the transfer of new TV studios that will take place around new year it is now clear that the CAPEX ratio will be around 11%, but the company had expressed to the market that it would be around the upper limit of the guidance, or 10%.

In general terms the changes of the guidance are related to more costs and investments than plans anticipated in relation to the merger as well as the weakening of the ISK recently. Good progress has however been achieved in integration of the acquired units that will deliver the company both synergies and value in the future, as is starting to materialize in Q3. Synergy projects have been delivering as planned but the overall costs and resource strain of the company is higher than anticipated.

The management has assessed the guidance for 2019 and 2020 and do not find that there are premises for changing the outlook due to specific actions that will affect the outcome as well as macro-economic uncertainties, namely currency fluctuations and pending collective agreements.

Further information on the Q3 results and guidance will be delivered at the company's investor meeting on November 8th.

Summary on the new outlook for the current consolidated operations*

EBITDA 2018. Approximately ISK 3,600m. of regular operations (150m of specified one off items)

CAPEX ratio 2018 Approximately 11%
EBITDA 2019 ISK 4,600m - 5,000m
CAPEX ratio 2019 8-9%
EBITDA 2020 Above ISK 5bn
CAPEX ratio 2020 Approximately 8%

*The current level of foreign exchange is used as the basis for the company's guidance for 2018 and 2019.

sýn

Sýn hf. • Suðurlandsbraut 8 • 108 Reykjavík • Kt. 4709051740 • syn.is

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The current guidance is including the continued consolidation of the Icelandic operations and Hey in the Faroes. It has been announced that an agreement has been made on heads of terms in a merger of Hey a subsidiary of SYN and the Faroese IT company Nema. The transaction results in SYN owning 49.9% in the merged company thereby removing Faroese options from SYN's consolidated account. SYN stake in the company will be accounted for using the equity method. The transaction is subject to regular prerequisites but if transaction will materialize and the Faroese business subsequently not consolidated it would thus mean a change to the guidance of SYN. The part of the EBITDA of Hey in the published outlook is approximately DKK 14m or ISK 258m on today's exchange rate. The effect on the CAPEX ratio guidance would however be none and the effect on free cash flow immaterial.

Further information:

☑ Mr. Guðfinnur Sigurvinsson, Sýn's communications director, can be contacted via email, fjarfestatengsl@syn.is or by telephone +354-669-9330.

sýn

Sýn hf. • Suðurlandsbraut 8 • 108 Reykjavík • Kt. 4709051740 • syn.is