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Syn Investor Presentation 2023
2210_rns_2023-02-15_1a1b3501-7753-44cc-bae5-b75fd6940e42.pdf
Investor Presentation
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16th February, 2023
Improved operations, improved future outlook
Full year 2022 and Q4 2022
vodafone
visir
SPORT
BYLGJAN
ENDOR
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Strong result in 2022
- Operational turnaround continues with solid results for the year. Operating profit (EBIT) for the year 2022 amounts to ISK 1.592 million and profit after tax amounts to ISK 888 million.
- Strategic streamlining in Q4 2022 will come into full effect in 2023. Continued focus on responsible operations.
- Good operating income in Q4 despite non-recurring cost due to streamlining (ISK 150 million) and a back dated salary increase related to recent job market agreements (ISK 50 million).
- EBIT for Q4 amounts to ISK 383 million and profit after tax ISK 434 million. EBIT adjusted for the cost of strategic streamlining was ISK 533 million.
- Organizational changes in November 2022 will increase the visibility of individual business units with focus on operational independence.
- Projected EBIT for 2023 is estimated to be from ISK 2.200 million to ISK 2.500 million. The profit from the sale of core network is not calculated in the projected EBIT.
- The board will propose to the annual general meeting that ISK 300 million will be paid in dividends to shareholders for the 2022 financial year.
Improved operations, improved future outlook
Full year 2022 and Q4 2022
A successful year in many areas
- Substantial revenue growth for Vísir.
- Continued effort on simplifying and developing our product range.
- 5G rollout went according to plan.
- IoT continues to gain further interest (Internet of Things).
- Transfer of IT operations and user services to Endor was completed.
- An important agreement on the sale of the core network to Ljósléáninn was completed in December.
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Sale of Core Network
- Purchase agreement signed for Ljósléánin's purchase of Sýn's core network.
- 12-year service agreement between the companies.
- The purchase price is ISK 3.000 million. The capital gain from the sale is approximately ISK 2.400 million.
- The sale will result in streamlining, reducing staff, simplifying services and phasing out older technology.
- Taken into account the service agreement, annual investment requirement decreases by ISK 120 million and annual operating cost decreases by more than ISK 100 million.
- No rental obligation.
- The sale will result in higher quality telecommunications network that will be beneficial for customers.
- Decision from The Icelandic Competition Authorities is anticipated in Q2 this year.
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Key financial results
Financial statement 2022
Revenue +5,6% ISK 22.983M
2021
ISK 21.765M
EBIT +116,9% ISK 1.592M
2021
ISK 734M
Earnings ISK 888M
2021²
ISK -273M
FCF
ISK 2.493M
2021³
ISK 1.824M
- Adjusted EBIT for the sale of infrastructure. The profit for the sale in 2021 was ISK 2.552M.
- Adjusted Earnings for the sale of infrastructure and sale of affiliate Hey. Impact on earnings amounts to ISK 2.373M before tax.
- FCF has been adjusted for the sale of infrastructure and sale of affiliate Hey. Cash inflows due to the sales was ISK 8.011M in 2021.
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Income statement
| Q4 2022 | Q4 2021 | % ch. | 2022 | 2021 | % ch. | |
|---|---|---|---|---|---|---|
| Revenues | 5.791 | 5.943 | -2.6% | 22.983 | 21.765 | 5.6% |
| Cost of sales | -3.696 | -3.884 | -4.8% | -14.966 | -14.672 | 2.0% |
| Gross profit | 2.095 | 2.059 | 1.7% | 8.017 | 7.093 | 13.0% |
| Sale profit | - | 2.552 | - | - | 2.552 | - |
| Operating expense | -1.712 | -1.731 | -1.1% | -6.425 | -6.359 | 1.0% |
| EBITDA* | 1.528 | 1.670 | -8.5% | 6.644 | 6.432 | 3.3% |
| EBIT* | 383 | 328 | 16.8% | 1.592 | 734 | 116.9% |
| Net financial expense | -206 | -152 | - | -846 | -573 | - |
| Effect of associates** | 0 | -78 | - | 0 | -72 | - |
| Income tax*** | 257 | -374 | - | 142 | -362 | - |
| Profit / (Loss)* | 434 | -276 | - | 888 | -273 | - |
| Gross Margin | 36.2% | 34.6% | 34.9% | 32.6% | ||
| EBITDA (non-adjusted) | 1.528 | 4.222 | 6.644 | 8.984 | ||
| EBIT (non-adjusted) | 383 | 2.880 | 1.592 | 3.286 | ||
| Adjusted EBITDA % | 26.4% | 28.1% | 28.9% | 29.6% | ||
| Adjusted EBIT % | 6.6% | 5.5% | 6.9% | 3.4% |
- Amounts are in ISK million
- Adjusted for the sale of infrastructure in 2021.
**Adjusted for the sale of affiliate Hey, a loss of ISK 179 million in Q1 2021.
*** Income tax has not been adjusted for the sale of infrastructure and the sale of affiliate Hey but the estimated impact is a decrease of ISK 450 million.
Key factors impacting Q4 and 2022
- Revenues for 2022 are ISK 22.983 million and increase by 5.6% from 2021.
- Revenues from subsidiary Endor increase by 35%. Endor's gross margin is below 10%, yet the group's gross margin is increasing.
- Cost of strategic streamlining was ISK 150 million in Q4.
- Operating profit (EBIT) was ISK 1.592 million for 2022.
- Changes in fair value of ISK 102 million on equity stake in Controlant results in a reduction in net interest expenses.
- Interest expenses increase by ISK 385 million mainly due to higher rental obligations as a result of the sale of infrastructure.
- The income tax for 2022 is positive, mainly because of tax write-off of goodwill that was generated due to the purchase of 365 media assets.
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Revenues
| Q4 2022 | Q4 2021 | % ch. | 2022 | 2021 | % ch. | |
|---|---|---|---|---|---|---|
| Media | 2.254 | 2.178 | 3% | 8.607 | 8.372 | 3% |
| Broadband | 1.094 | 1.097 | 0% | 4.422 | 4.463 | -1% |
| Mobile | 1.219 | 1.364 | -11% | 5.165 | 4.616 | 12% |
| Fixed Line | 114 | 128 | -11% | 484 | 535 | -10% |
| Hosting and operating solutions | 546 | 601 | -9% | 2.261 | 1.676 | 35% |
| Retail sale | 363 | 371 | -2% | 1.267 | 1.267 | 0% |
| Other revenue | 201 | 204 | -1% | 777 | 836 | -7% |
| Total Revenue | 5.791 | 5.943 | -3% | 22.983 | 21.765 | 6% |
Media
Both advertising and subscription revenues increase between years. Record breaking month in number of Stöð 2+ subscribers in December.
Broadband
Sale of corporate connections increase by 9% between years. Revenue from home connections decrease between years because of lower average price to costumers.
Mobile
Growth between years is driven by a good IoT revenue growth and an increase in roaming revenue. Decrease between quarters is explained by non-recurring revenues related to IoT as sales in IoT fluctuate between periods.
Hosting and operating solutions
Endor's revenue growth occurs in 1H 2022. Large equipment sales create fluctuations in Endor's income and have affect on gross margin ratio, which decreases between years.
*Amounts are in ISK millions
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Balance sheet
Assets
| ISK m | 31.12.2022 | 31.12.2021 | Ch. | % ch. |
|---|---|---|---|---|
| Fixed assets | ||||
| Right-of-use asset | 8.620 | 8.049 | 571 | 7% |
| Property, plant and equipment | 2.866 | 3.212 | -346 | -11% |
| Goodwill | 8.906 | 8.888 | 18 | 0% |
| Other intangible assets | 4.389 | 4.469 | -80 | -2% |
| Shares in other companies | 185 | 62 | 123 | 198% |
| Long term lease receivables | 157 | 166 | -9 | -5% |
| Deferred tax asset | 158 | 26 | 132 | 508% |
| Fixed assets | 25.281 | 24.872 | 409 | 2% |
| Current assets | ||||
| Broadcasting license rights | 1.809 | 1.762 | 47 | 3% |
| Inventories | 559 | 356 | 203 | 57% |
| Trade receivables and other short term receivables | 3.650 | 5.297 | -1.647 | -31% |
| Cash and cash equivalents | 2.063 | 4.214 | -2.151 | -51% |
| Current assets | 8.081 | 11.629 | -3.548 | -31% |
| Assets available for sale | 564 | - | 564 | |
| Total assets | 33.926 | 36.501 | -2.575 | -7% |
Liabilities and equity
| ISK m | 31.12.2022 | 31.12.2021 | Ch. | % ch. |
|---|---|---|---|---|
| Equity | 9.469 | 10.535 | -1.066 | -10% |
| Long term liabilities | ||||
| Interest bearing debt | 4.801 | 4.965 | -164 | -3% |
| Lease liabilities | 11.820 | 11.393 | 427 | 4% |
| Other liabilities | 0 | 180 | -180 | -100% |
| Deferred tax liabilities | 0 | 19 | -19 | -100% |
| Long term liabilities | 16.621 | 16.557 | 64 | 0% |
| Current liabilities | ||||
| Interest bearing debt | 373 | 723 | -350 | -48% |
| Lease liabilities | 1.295 | 1.206 | 89 | 7% |
| Accounts payable and other current liabilities | 6.168 | 7.480 | -1.312 | -18% |
| Current liabilities | 7.836 | 9.409 | -1.573 | -17% |
| Total equity and liabilities | 33.926 | 36.501 | -2.575 | -7% |
| Interest bearing debt | 18.289 | 18.287 | ||
| Net interest bearing debt | 16.226 | 14.073 | ||
| Equity ratio | 27.9% | 28.9% |
Amounts in ISK millions
Amounts have not been adjusted
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Cashflow
| Q4 2022 | Q4 2021 | % ch. | 2022 | 2021 | % ch. | |
|---|---|---|---|---|---|---|
| Cash generated by operations before interest and tax | 1.881 | 1.450 | 30% | 6.485 | 5.597 | 16% |
| Investment activities* | -1.321 | -1.021 | 29% | -3.992 | -3.773 | 6% |
| Free cash flow | 560 | 429 | 31% | 2.493 | 1.824 | 37% |
*Adjusted for the sale of infrastructure and the sale of affiliate Hey in 2021
Amounts in ISK millions
Improved operations, improved future outlook
Full year 2022 and Q4 2022
^{}[]
Balance sheet - Key indicators
Equity Ratio
In the beginning of 2022 the board decided to repurchase shares of ISK 1,860 million. When adjusted for this the equity ratio on the 31.12.2021 is 24.8% and the current rate 1,31.
Current Ratio*
Net interest bearing debt
Current assets / payables and other short term liabilities
Improved operations, improved future outlook
Full voor AIVA and Q4 2022
Business units
vodatoje visir SPORT BYLGJAN ERDEK
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Board
^{}[]
Four business units
Vodafone
Vodafone - telecom
Sesselía Birgisdóttir
Telecommunication services for home and business
IoT (Internet of Things)
TV-services
Stores
Media
Pórhallur Gunnarsson
Stöð 2 og
Stöð 2+
Stöð 2 Sport
Bylgjan, FM957
og X-ið
Vísir, Innherji
and Tal
Sýn - infrastructure
Sigurbjörn Eiríksson
Mobile network
Fixed network
Backbone network
TV Broadcast
Radio Broadcast
Roaming and
Interconnect
Wholesale
ENDOR
Endor ehf.
Gunnar Guðjónsson
Energy-intensive
Information
technology
Cloud and
operational
solutions
Equipment and
basic system
soulitions
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Board
CEO
Yngvi Halldórsson
Four business units
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Insight into business units
vodafone
- Positive revenue growth in the corporate market
- Emphasis on simplifying product offerings and offer product "bundling" beneficial to customers.
- Increase focus on digital services.
- Continue building on strong IOT position and continued cooperation with Vodafone Group
- 74.5% of the nation use Sýn's media daily and 94.9% weekly according to Gallup.
- "Idol" was successful. Over 50.000 viewers for every episode.
- Record number of subscribers on Stöð +.
- Channel "Stöð 2 Sport" showed all top division games in men's and women's football in 2022 live.
- A lot of innovation at Vísir
- Tal podcast services
- "Innherji" behind a paywall
- Upgrading the mobile network to 5G is progressing and the phasing out of 2G and 3G has begun.
- By the end of 2022 we have made 60 agreements for 5G roaming in 45 countries
- Development and implementation of new mobile solutions in progress.
- NB-IoT is becoming wide spread.
ENDOR
- Increase of 300% in domestic customers for the last 18 months.
- Good reception related to sales of cloud and operational solutions to many of the largest companies in the country.
- Large and complex "supercomputing" international projects ahead
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Outlook for 2023
- Projections for 2023 assume EBIT will be around ISK 2.200 million to ISK 2.500 million apart from the non-recurring profit from the sale of the core network.
- Moderate revenue growth is projected with strong focus on improvements in all business units.
- Strategic streamlining in Q4 2022 will come into full effect in 2023. Reduction in labor cost and improved contracts with suppliers.
- Continued optimization in purchase of foreign broadcasting rights as focus will be on domestic production.
- Emphasis on sharpening the distinction between business units and increase transparency in information provided to the market.
- The aim is to distribute funds from improved operations and asset sales to shareholders
vodafone
BYLGJAN 989
FM957
visir
ENDOR
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Questions?
Inquiries should be directed to
[email protected]
vodafone
visir
SPORT
BYLGJAN
989
inje
X
INDOR
Improved operations, improved future outlook
Full year 2022 and Q4 2022
Disclaimer
The information in this presentation is 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.