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Syn Investor Presentation 2019
2210_rns_2019-05-15_904aca7a-d78e-442a-adeb-6a0292fb5933.pdf
Investor Presentation
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sýn
Key Financial Results Q1 2019
Revenue
4,975 m IKR
1% decrease from 2018
EBITDA
1,260 m IKR
5% increase from 2017
Net Profit
670 m IKR
51 m IKR profit on Q1 2018
Equity Ratio
36.7%
Was 39.6% in end of 2018
Key factors that affect Q1 2019
- The merger of P/F Hey, Sýn’s subsidiary in the Faroe Islands and Nema, a subsidiary of Tjaldur, was finalized in Q1 2019. After the merger, Sýn owns 49,9% of the merged company and will be accounted for with an equity method.
- Television content rights are now accounted for as part of intangible assets instead of inventories, comparative figures in 2018 have been updated accordingly.
- New accounting standard IFRS 16 was implemented on January 1, 2019. Comparative figures for Q1 2018 are not updated.
- One-off items related to termination of several managers contracts on Q1 2019 amounts to ISK 137 million. The effect of one-off items on Q1 2018 amounted to ISK 115 million.
- Unfavorable exchange rate developments in Q1 2019 amounted to ISK 91 million compared to the same period last year.
- WOW's bankruptcy and labor agreements had a negative impact on advertising revenue on Q1 2019.
- Estimated effects of collective agreements amount to ISK 115 million in 2019
Q4 Highlights
| ISK m | Q1 2019 | Q1 2018 | Change | % change |
|---|---|---|---|---|
| Revenue | 4,975 | 5,030 | -55 | -1% |
| Cost of Sales | -3,068 | -3,005 | -63 | 2% |
| Gross Profit | 1,907 | 2,025 | -118 | -6% |
| Operating costs | -1,822 | -1,821 | -1 | 0% |
| EBITDA* | 1,260 | 1,201 | 59 | 5% |
| EBIT | 85 | 204 | -119 | -58% |
| Net Financials | -258 | -134 | -124 | - |
| Impact from affinities | 820 | -4 | 824 | - |
| Income tax | 23 | -15 | 38 | - |
| Net Profit | 670 | 51 | 619 | - |
| Gross Margin (%) | 38.3% | 40.3% | ||
| EBITDA % | 25.3% | 23.9% | ||
| EBIT % | 1.7% | 4.1% | ||
| Impact of IFRS 16 on operations | Q1 2019 | |||
| --- | --- | |||
| Cost of sales | 80 | |||
| Operating costs | 63 | |||
| EBITDA | 143 | |||
| Net financials | -33 | |||
| Depreciation | -104 | |||
| Profit (loss) for the period | 6 |
*EBITDA 2018 adjusted retroactively to changed presentation of content rights
Revenue sources on Q1
| ISK m | Q1 2019 | Q1 2018* | Chg. | % chg. |
|---|---|---|---|---|
| Media | 2,172 | 2,199 | -27 | -1% |
| Broadband | 1,206 | 1,079 | 127 | 12% |
| Mobile | 892 | 915 | -23 | -3% |
| Fixed Line | 242 | 319 | -77 | -24% |
| Retail Sales | 246 | 261 | -15 | -6% |
| Other Revenue | 217 | 257 | -40 | -16% |
| Total Revenue | 4,975 | 5,030 | -55 | -1% |
*Updated comparative figures for the sale of P/F Hey
Q1 Cash flow
| ISK m | Q1 2019 | Q1 2018* | Change | % chg. |
|---|---|---|---|---|
| Cash generated by operations | 819 | 1,198 | -379 | -32% |
| Investing activities | -1,027 | -1,285 | 258 | -20% |
| Financing activities | -5 | 36 | -41 | -114% |
| Change in cash | -214 | -51 | -163 | 320% |
| Effect of exchange rate | 0 | 1 | -1 | 0% |
| Cash at beginning of period | 356 | 329 | 27 | 8% |
| Cash classified as for sale | 0 | -38 | 38 | - |
| Cash at the end of period | 142 | 241 | -99 | -41% |
| Free Cash Flow | -11 | 102 | -113 | -111% |
Q1 2019 Cash Flow changes
*Updated comparative figures for the sale of P/F Hey and TV content rights
Balance sheet 31.03.2019
| 31.03.19 | 31.12.18* | Change | % | |
|---|---|---|---|---|
| Operational assets | 4,960 | 4,785 | 175 | 4% |
| Righ-of-use assets | 3,054 | 0 | 3,054 | - |
| Intangible assets | 16,786 | 16,999 | -213 | -1% |
| Shares in other companies | 1,265 | 48 | 1,217 | 2535% |
| Fixed assets | 26,066 | 21,832 | 4,234 | 19% |
| Other current assets | 4,112 | 3,767 | 345 | 9% |
| Cash and cash equivalents | 142 | 356 | -214 | -60% |
| Assets classified for sale | 0 | 1,056 | -1,056 | - |
| Current assets | 4,254 | 5,179 | -925 | -18% |
| Total assets | 30,320 | 27,011 | 3,309 | 12% |
Impact of IFRS 16 on assets 31.03.19
*Updated comparative figures for the sale of P/F Hey and TV content rights
Figures are in ISK million
Balance sheet 31.03.2019
| 31.03.19 | 31.12.18* | Change | % | |
|---|---|---|---|---|
| Equity | 11,127 | 10,707 | 420 | 4% |
| Interest bearing debt | 10,922 | 10,874 | 48 | 0% |
| Lease liabilities | 2,933 | 0 | 2,933 | - |
| Deferred tax liabilities | 116 | 138 | -22 | -16% |
| Non-current liabilities | 13,971 | 11,012 | 2,959 | 27% |
| Interest bearing debt | 692 | 687 | 5 | 1% |
| Lease liabilities | 423 | 0 | 423 | - |
| Other current liabilities | 4,107 | 4,167 | -60 | -1% |
| Liabilities connected to assets classified for sale | 0 | 438 | -438 | - |
| Current liabilities | 5,222 | 5,292 | -70 | -1% |
| Total equity and liabilities | 30,320 | 27,011 | 3,309 | 12% |
| Interest bearing debt | 14,970 | 11,561 | ||
| Net interest bearing debt | 14,828 | 11,205 | ||
| Equity ratio | 36.7% | 39.6% |
*Updated comparative figures for the sale of P/F Hey and TV content rights
Impact of IFRS 16 on equity and liabilities
31.03.19
Figures are in ISK million
Key ratios
Equity Ratio
Current Ratio*
Net interest bearing debt
Updated comparative figures for the sale of P/F Hey.
*Current ratio = current assets / short term liabilities - interest bearing debt and lease liabilities
Estimated synergy
Estimated development of syngery published on Q3 20018
Estimated development of syngery updated for Q1 2019
Figures are in ISK million
Outlook 2019
Other matters
- Two new managers have been recruited and will commence their work by 1 June 2019
- Þórhallur Gunnarsson will be managing the Media part of the operations
- Signý Magnúsdóttir will be the CFO
- Strategic plans are underway and will be finalised in Q2
- Extensive presentations with Q2 results
.
Revenue sources
- Mobile - Revenue for use of cell phones, including data transfer with in the mobile network, subscription revenue from individuals, prepaid sim cards, roaming revenue from travelers, interconnection revenues etc.
- Broadband - Revenue from internet service in fixed-line networks, including fiber optic cables, xDSL service and other data connections.
- Media - Revenue from the operation of broadcast media, TV subscriptions, advertisement, distribution systems, set-top boxes, TVOD, SVOD and PPV.
- Fixed line - Revenue from home phone usage and corporate fixed line usage, interconnection revenue from fixed line.
- Retail sale - Revenue from sale of telecommunications equipment and accessories.
- Other revenue - Service revenues and rental of terminal equipment
Disclaimer
The information in this presentation are based on sources that Sýn hf. deem reliable at the time of publication. However, it is not possible to secure fully that they are completely faultless.
All information in the presentation are the property of Sýn hf. It is prohibited to copy, amend or distribute in any manner, partly or fully, the presentation and the information therein.
The presentation is only for information purposes and not to be used as basis for decision making on part of recipients. Recipients shall not in any manner interpret the content therein as promise or guidance. Sýn hf. is not obliged to provide the recipients with further information nor to amend or correct should the information it is based on change.
Any statement in this presentation that cites future prospects is solely for guidance purposes, based on current evolution, information and projections. Future guidance of the company are subject to numerous risk and uncertainties that can result in being substantially different from the content of this presentation. External factors, such as access to finance, legislation, regulatory actions and otherwise can thus have substantial effects.
Sýn hf. will not update future guidance of the company due to situations that will occur afterwards. Sýn hf. suggest that recipients of the presentation should not trust statements therein at a later stage as they are only relevant at the day of the publication. Subject to this proviso, all guidance on future prospects are fully reliable.
The recipients of the presentation acknowledge that they are subject to aforementioned disclaimers and limitations.