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Syn Investor Presentation 2020
2210_rns_2020-05-13_b3695e06-d7c4-4c5f-abe8-25f0e7845155.pdf
Investor Presentation
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Key factors affecting Q1 2020
- On October 18th 2019 Sýn acquired all the shares in Endor ehf.
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Competition authorities approved the acquisition on December 1st 2019. Endor’s operation is included in Q1 2020.
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Effects of prices and content changes in Stöð 2 Sport resulted in revenue decline of 175 m IKR compared to Q1 2019.
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Price reduction executed in July 2019 on Risapakkinn and Stöð 2 Sport.
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One-time expenses due to termination settlements amount to 70 m IKR in Q1 2020.
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Main effects of COVID-19 in Q1 2020 are as follows:
- Decline in advertisement revenue by 55 m IKR compared to same quarter last year.
- Decline in roaming revenue by 15 m IKR but gross profit on par approx.
- Less live coverage of sport events but increased inhouse productions of sport material along side other Icelandic production.
- Negative exchange rate differences in Q1 2020 amount to 230 m IKR compared to 47 m IKR in Q1 2019.
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Key factors affecting Q1 2020
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Media
- Subscription sales of Skemmtipakkinn and Marabon have been stable since year-end and maintenance of subscriptions since December, which is the biggest month of the year, have been successful.
- Subscription churn for Stöð 2 Sport have been insignificant in Q1 2020. Increase in churn rate started to be visible in Q2 2020. Negotiations have been started in relation to recovery of paid right-of-use licenses.
Internet, mobile and fixed line
- Internet:
- Reduction in revenues in the retail market between quarters, but stable corporate market.
- Mobile:
- Revenues stable between quarters in spite of decline in roaming revenues.
- Fixed line:
- Continuing reduction as expected. Reduction due to fewer landline users. Corporate market stable.
Cost of sales
- Increased cost of sales in Q1 2019 is due to Endor's operations. Endor's effects on cost of sales amount to 326 m IKR. Expenses due to termination settlements amount to 40 m IKR in Q1 2020. Decrease in salaries between quarters amount to 23 m IKR (excluding termination settlements).
Operating costs
- Endor's effect on operating costs are insignificant.
- Reduction in most nature of expense since Q1 2019. Reduced salary expense is 70 m IKR since Q1 2019 (excluding termination settlements).
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COVID-19 impact
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Current status
- Daily business has gone well and operational adjustment has exceeded expectations.
- Large portion of employees work from home and will continue to do so until restrictions are lifted.
- Service and sales departments have adapted well.
- Outlets in Kringlan and Småralind were temporarily closed. Småralind has since reopened and Kringlan will be reopened after improvements.
- Increased strain on news media.
- Endor operations in line with expectations in Q1, insignificant effects on COVID-19 in the quarter.
Countermeasures
- Ongoing work in relation to cost reduction.
- Work on digital development and scalability has begun and will reduce cost in the long term.
Operational effects
- Revenue from roaming is expected to decline from last years. Possible effect on this year's gross profit amounts to 200 m IKR.
- Reduction in advertisement sales. Continuing development uncertain but decline in revenue is expected between years.
- Uncertainty concerning subscriptions to Stöd 2 Sport due to uncertainty in sport broadcasting and increased concentration of material over a shorter period. UEFA Euro 2020 postponed for a year.
- Transition of customers between corporate and retail market expected.
- Certain Endor-projects delayed due to COVID-19.
- Weakening of the IKR has significant effects on cost in foreign currency but work has commenced on lowering said effects with revised purchasing policies.
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FM957
Key financial results Q1 2020
Revenue
4,995 m IKR
EBITDA
1,355 m IKR
Results
350 m IKR loss
Equity ratio
26.8%
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Income statement Q1 highlights
| ISK m | Q1 2020 | Q1 2019 | Change | % change |
|---|---|---|---|---|
| Revenue | 4,995 | 4,975 | 20 | 0% |
| Cost of Sales | -3,350 | -3,068 | -282 | 9% |
| Gross Profit | 1,645 | 1,907 | -262 | -14% |
| Operating expense | -1,666 | -1,822 | 156 | -9% |
| EBITDA | 1,355 | 1,260 | 95 | 8% |
| EBIT | -21 | 85 | -106 | -125% |
| Net financial expense | -441 | -258 | -183 | 71% |
| Effect of associates | 20 | 820 | -800 | -98% |
| Income tax | 92 | 23 | 69 | 300% |
| Loss / profit | -350 | 670 | -1,020 | -152% |
| Gross Margin | 32.9% | 38.3% | ||
| EBITDA | 27.1% | 25.3% | ||
| EBIT | -0.4% | 1.7% |
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Revenue Q1 2020
| ISK m | Q1 2020 | Q1 2019 | Chg. | % Chg. |
|---|---|---|---|---|
| Media | 1,943 | 2,172 | -229 | -11% |
| Broadband | 1,160 | 1,206 | -46 | -4% |
| Mobile | 911 | 913 | -2 | 0% |
| Fixed Line | 167 | 221 | -54 | -24% |
| Hosting and operating solutions | 371 | 0 | 371 | - |
| Retail Sales | 235 | 246 | -11 | -5% |
| Other Revenue | 208 | 217 | -9 | -4% |
| Total Revenue | 4,995 | 4,975 | 20 | 0% |
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Statement of Financial Position March 31st 2020
| ISK m | 31.3.2020 | 31.12.2019 | Change | % |
|---|---|---|---|---|
| Right-of-use assets | 5,918 | 5,828 | 90 | 2% |
| Property, plant and equipment | 4,605 | 4,793 | -188 | -4% |
| Goodwill | 8,832 | 8,787 | 45 | 1% |
| Other intangible assets | 4,610 | 4,648 | -38 | -1% |
| Shares in other companies | 1,403 | 1,383 | 20 | 1% |
| Deferred tax asset | 190 | 97 | 93 | 96% |
| Fixed assets | 25,558 | 25,536 | 22 | 0% |
| Broadcasting license rights | 1,709 | 1,814 | -105 | -6% |
| Inventories | 405 | 427 | -22 | -5% |
| Accounts receivables and other short term liabilities | 3,466 | 3,567 | -101 | -3% |
| Cash and cash equivalents | 385 | 634 | -249 | -39% |
| Current assets | 5,965 | 6,442 | -477 | -7% |
| Total assets | 31,523 | 31,978 | -455 | -1% |
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Statement of Financial Position March 31st 2020
| ISK m | 31.3.2020 | 31.12.2019 | Change | % |
|---|---|---|---|---|
| Equity | 8,446 | 8,798 | -352 | -4% |
| Interest bearing debt | 10,280 | 10,898 | -618 | -6% |
| Lease liabilities | 5,225 | 5,390 | -165 | -3% |
| Deferred tax liabilities | 152 | 252 | -100 | -40% |
| Other long term liabilities | 14 | 9 | 5 | 57% |
| Non-current liabilities | 15,671 | 16,549 | -878 | -5% |
| Interest bearing debt | 990 | 689 | 301 | 44% |
| Lease liabilities | 1,235 | 938 | 297 | 32% |
| Other current liabilities | 5,181 | 5,004 | 177 | 4% |
| Current liabilities | 7,406 | 6,631 | 775 | 12% |
| Total equity and liabilities | 31,523 | 31,978 | -455 | -1% |
| Interest bearing debt | 17,730 | 17,915 | ||
| Net interest bearing debt | 17,345 | 17,281 | ||
| Equity ratio | 26.8% | 27.5% |
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Cash flow Q1 2020
| ISK m | Q1 2020 | Q1 2019 | Change | % chg. |
|---|---|---|---|---|
| Cash generated by operations | 1,053 | 819 | 234 | 29% |
| Investing activities | -738 | -1,028 | 290 | -28% |
| Financing activities | -590 | -5 | -585 | - |
| Change in cash | -275 | -214 | -61 | 28% |
| Cash at beginning of period | 634 | 356 | 278 | 78% |
| Effect of exchange rate | 26 | 0 | 26 | - |
| Cash at the end of period | 385 | 142 | 243 | 171% |
| Cash generated by operations before interest and tax | 1,260 | 1,023 | 237 | 23% |
| Investment activities* | -738 | -1,034 | 296 | -29% |
| Free Cash Flow | 522 | -11 | 533 | - |
- Excluding net investment in share in other companies
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Statement of Financial Position - Key ratios
Equity Ratio
Current Ratio*
Net interest bearing debt
Updated comparative figures 31.12.2018 of the sale of P/F Hey.
*Current ratio = Current assets - Assets classified for sale / Other short term liabilities
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The data center at Korputorg has been put into operation
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2015
2015
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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 provision, all guidance on future prospects are fully reliable.
The recipients of the presentation acknowledge that they are subject to aforementioned disclaimers and limitations.
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