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Syn Investor Presentation 2024
2210_rns_2024-02-27_4f7e625c-f890-4762-bc46-9cb8ee9b6f16.pdf
Investor Presentation
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27th February, 2024
syna
Productive year
Q4 and full year 2023
vodafone
visir
SPORT
ja
BYLGJAN
989
FM957
X
ENDOR
HIGHLIGHTS FROM OPERATIONS
FINANCIAL RESULTS
BUSINESS UNITS AND YEAR 2024
YEAR 2023
- Good overall result for the year. Operating profit (EBIT) for the year 2023 amounted to ISK 3,544 million and profit after tax ISK 2,109 million. Previously disclosed sale of Sýn's core network and specific one-off items in the amount of ISK 837 affect the results of 2023. Adjusted for these items, EBIT amounts to ISK 1.945 million
- Good revenue increase from advertising and Endor. Advertising revenue increases by 13%. Revenue from Endor's core business increases by 44%
-
Delivery of the core network to Ljóslnarinn took place in Q4. ISK 1,000 million has been paid and ISK 2,000 million will be paid this year
-
Já entered Sýn's operations in Q4. The integration of Já with Online media & Ratio has started. The purchase price was fully paid in 2023
- The future ownership of Online media & Radio is under review with further news expected in the spring
- Operating cost remains stable despite challenges in the external environment
- Emphasis on re-negotiations with foreign suppliers in TV, results among others things in reduction of trade payables. Continued emphasis on optimization in purchases of foreign broadcasting rights
- ISK 1,288 million returned to shareholders in the form of buybacks and dividend payment in 2023
DEVIATION FROM GUIDANCE
- Foreign broadcasting rights
- Change in amortization period and correction from previous years
- Deregistration of assets
- Especially within the Infrastructure unit
- Paid notice periods
- Settlements with former CEO and cost of strategic streamlining
C
HIGHLIGHTS FROM OPERATIONS
FINANCIAL RESULTS
BUSINESS UNITS AND YEAR 2024
KEY FINANCIAL RESULTS
YEAR 2023
EBIT ISK 3,544M
122,7%
Earnings ISK 2,109M
137,5%
INCOME STATEMENT
| Q4 2023 | Q4 2022 | % ch. | 2023 | 2022 | % ch. | |
|---|---|---|---|---|---|---|
| Revenues | 6.253 | 5.791 | 8,0% | 23.475 | 22.983 | 2,1% |
| Cost of sales | -4.736 | -3.696 | 28,2% | -15.661 | -14.966 | 4,6% |
| Gross profit | 1.517 | 2.095 | -27,6% | 7.814 | 8.017 | -2,5% |
| Sale profit | 2.436 | - | - | 2.436 | - | - |
| Operating expense | -2.002 | -1.712 | 17,0% | -6.706 | -6.425 | 4,4% |
| EBITDA | 3.537 | 1.528 | 131,5% | 8.285 | 6.644 | 24,7% |
| EBIT | 1.950 | 383 | 409,2% | 3.544 | 1.592 | 122,6% |
| Net financial expense | -363 | -206 | 76,2% | -1.134 | -846 | 34,0% |
| Income tax | -281 | 257 | -209,3% | -301 | 142 | -312,0% |
| Profit (loss) | 1.306 | 434 | 201,0% | 2.109 | 888 | 137,5% |
| Gross Margin | 24,3% | 36,2% | 33,3% | 34,9% | ||
| Adjusted EBITDA* | 1.101 | 1.528 | 5.849 | 6.644 | ||
| Adjusted EBIT* | -486 | 383 | 1.108 | 1.592 | ||
| Adjusted EBITDA % | 17,6% | 26,4% | 24,9% | 28,9% | ||
| Adjusted EBIT % | -7,8% | 6,6% | 4,7% | 6,9% |
Amounts are in ISK millions
Key factors impacting Q4 and 2023
- Revenue growth of over 2% for the year, primarily attributed to the growth in advertising sales and within the subsidiary Endor. Additionally, revenue from Jå's operations is included in the fourth quarter
- Cost of sales increases by nearly 5% in 2023, mainly due to one-off items in connection with the change in amortization of foreign broadcasting rights together with additional depreciation related to Infrastructure assets. Additionally, there are added costs from Viaplay (subscriptions and production costs), along with costs from Jå, which occur in the fourth quarter
- Operating expense increases by over 4% in 2023, which is below the inflation rate. The year-on-year increase is entirely accounted for in Q4, mostly explained by settlements related to the CEO's retirement and paid notice periods in connection with strategic streamlining, along with other one-off costs. Additionally, operating expenses from Jå occur in the fourth quarter
- Endor's performance was strong in 2023 with significant revenue growth from previous year
- Operating profit (EBIT) for the year 2023 amounts to ISK 3,544 million and profit after tax amounts to ISK 2,109 million. Previously disclosed sale of Syn's core network and specific one-off items in the amount of ISK 837 million affect the results of 2023. Adjusted for these items, EBIT amounts to ISK 1.945 million
-
Net financial expenses increase in line with rising financial costs
-
Adjusted for the sale of core network, ISK 2,436M
REVENUES
| Q4 2023 | Q4 2022 | % ch. | 2023 | 2022 | % ch. | |
|---|---|---|---|---|---|---|
| Media | 2.386 | 2.254 | 6% | 9.000 | 8.607 | 5% |
| Broadband | 1.109 | 1.094 | 1% | 4.405 | 4.422 | 0% |
| Mobile | 1.131 | 1.219 | -7% | 4.863 | 5.165 | -6% |
| Fixed Line | 108 | 114 | -5% | 446 | 484 | -8% |
| Hosting and operating solutions | 776 | 546 | 42% | 2.537 | 2.261 | 12% |
| - adjusted for irregular items | 2.537 | 1.758 | 44% | |||
| Retail sale | 359 | 363 | -1% | 1.236 | 1.267 | -2% |
| Other revenue | 383 | 201 | 91% | 988 | 777 | 27% |
| Total Revenue | 6.253 | 5.791 | 8% | 23.475 | 22.983 | 2% |
| - adjusted for irregular items | 23.475 | 22.480 | 4% |
Media
Continued growth in advertising revenues across all media, with a 13% increase in 2023. Increased focus on advertisements in television, which increase by 46% in Q4. Other media revenues remain stable between years
Broadband
Revenues in broadband remain stable in 2023. Positive trend in the number of home internet subscriptions month after month in the fourth quarter
Mobile
Mobile revenues decrease by 6% in 2023, mainly explained by a reduction in IoT revenues. Revenues from roaming services have increased by 32% compared to last year
Hosting and operating solutions
Strong revenue growth during the year within Endor, as revenues increase by 44%, adjusted for passthrough revenues from foreign projects in 2022
- Amounts are in ISK millions
BALANCE SHEET
Assets
| ISK m | 31.12.2023 | 31.12.2022 | % ch. |
|---|---|---|---|
| Fixed assets | |||
| Right-of-use asset | 8.420 | 8.620 | -2% |
| Property, plant and equipment | 3.290 | 2.866 | 15% |
| Goodwill | 9.097 | 8.906 | 2% |
| Other intangible assets | 4.976 | 4.389 | 13% |
| Long term lease receivables | 141 | 157 | -10% |
| Shares in other companies | 174 | 185 | -6% |
| Deferred tax asset | 0 | 158 | -100% |
| Fixed assets | 26.098 | 25.281 | 3% |
| Current assets | |||
| Broadcasting license rights | 2.008 | 1.809 | 11% |
| Inventories | 628 | 559 | 12% |
| Trade receivables and other short term receivables | 5.576 | 3.650 | 53% |
| Cash and cash equivalents | 624 | 2.063 | -70% |
| Current assets | 8.837 | 8.081 | 9% |
| Assets classified for sale | 0 | 564 | -100% |
| Total assets | 34.935 | 33.926 | 3% |
Liabilities and equity
| ISK m | 31.12.2023 | 31.12.2022 | % ch. |
|---|---|---|---|
| Equity | 10.288 | 9.469 | 9% |
| Long term liabilities | |||
| Interest bearing debt | 4.461 | 4.801 | -7% |
| Lease liabilities | 11.964 | 11.820 | 1% |
| Deferred tax liabilities | 152 | 0 | - |
| Long term liabilities | 16.577 | 16.621 | 0% |
| Current liabilities | |||
| Interest bearing debt | 1.779 | 373 | 377% |
| Lease liabilities | 1.016 | 1.295 | -22% |
| Accounts payable and other current liabilities | 5.275 | 6.168 | -14% |
| Current liabilities | 8.069 | 7.836 | 3% |
| Total equity and liabilities | 34.935 | 33.926 | 3% |
| Interest bearing debt | 19.220 | 18.289 | |
| Net interest bearing debt | 18.595 | 16.226 | |
| Equity ratio | 29,4% | 27,9% |
- Amounts are in ISK millions
CASHFLOW
^{}[]
Main factors in the change in Free cash flow between years:
- Favorable one-off contracts with key suppliers that deliver efficiencies. One-off items impacting cash flow in 2023 that will not have an impact in 2024
- Purchase of Já. Purchase price paid in full in 2023.
- Heavy investments in property, plant and equipment and other intangible assets.
| Q4 2023 | Q4 2022 | % ch. | 2023 | 2022 | % ch. | |
|---|---|---|---|---|---|---|
| Cash generated by operations before interest and tax | 1.819 | 1.881 | -3% | 5.680 | 6.485 | -12% |
| Investment activities | -1.512 | -1.319 | 15% | -4.678 | -3.992 | 17% |
| Free cash flow | 306 | 562 | -46% | 1.002 | 2.493 | -60% |
- Amounts are in ISK millions
BALANCE SHEET - KEY INDICATORS
Equity Ratio
Current Ratio *
*Current assets / trade payables and other short-term liabilities
Net interest-bearing debt
Net interest-bearing liabilities
Leasing liabilities
HIGHLIGHTS FROM OPERATIONS
FINANCIAL RESULTS
BUSINESS UNITS AND YEAR 2024
INSIGHTS INTO BUSINESS UNITS
BUSINESS UNITS
^{}[]
Vodafone
vodafone
Telecommunication services for home and business
IoT (Internet of Things)
TV-services
Retail
Stöð 2
Domestic programming
Sports production
Streaming services
News
Online Media & Radio
Radio
Online media
Advertising sales
Product search
News
Infrastructure
Network system
Fixed-line system
Access network
TV Broadcast
Radio Broadcast
Roaming and Interconnect
Wholesale
NQC
Endor ehf.
IT Outsourcing Services
Cloud and managed Services
Solution Selling
Data Center Services
6
vodafone
NEW PRODUCTS FOR HOUSEHOLD
vodafone
Number of households connected
- In 2023, Vodafone connected over 38,000 households nationwide, and customers spoke for over 225 million minutes on the phone
New products are well-received
- New sales of broadband to households increased by 41% in Q4 compared to last year. New subscription packages and emphasis in marketing and sales, along with the new partnership with Viaplay, contribute to this growth
- Smart visit for households have been very popular. Hundreds of households have had a visit in the last months
- Smart visit for businesses was recently introduced, and there are plans to offer the service in Akureyri in the coming weeks
NEW VODAFONE STORE IN AKUREYRI
New store opened at Glerártorg in Akureyri
- The new store serves as a model for future of Vodafone stores, where experience and sustainability are at the forefront
- All design and presentation of products related to telecommunications, home and entertainment were conceived based on customer feedback
- Offices for sales representatives, TV-services and the business division of Vodafone in Akureyri are located on the floor above the store
6
SUCCESSFUL IDOL
24 24 24 SPORT viaplay
- The new season of Idol aired, setting records in both viewership and telephone voting
- Significant increase in linear viewership from 2022 Idol
- The popularity of „Kviss“ has been steadily growing year after year
- First „Kviss of the year“ was aired
- „Kryddsild“ aired on New Year’s Eve as usual
- Pay-per-view offered to customers, which was a success
- The year of sports summarized on New Year’s Eve „Sportsíldin“
- Residents of Grindavík offered free subscriptions to Stöð 2 and Stöð 2+ to ensure access to Stöð 2 news and other entertainment
6
DEVELOPMENT OF VALUABLE INFRASTRUCTURE
A
The delivery of the core network to Ljóslnarinn has been successful
- Purchase price paid in instalments, ISK 1,000 has been paid
- Sýn's capacity for data transmission throughout the country will increase tenfold by the end of 2024 in collaboration with Ljóslnarinn
The 5G rollout continues
- 140 5G transmitters have been installed in 55 different towns
- The goal is to reach a total of 200 5G transmitters by the end of 2024
- Sýn is a leader in the Icelandic market for 5G services, both domestically and internationally
6
ENDOR
ENDOR'S BEST OPERATING YEAR
ENDOR
- The year 2023 was overall the best operational year for Endor
- Infrastructure sales to domestic customers looks promising for 2024
- Continued implementation of smaller and larger clients for IT outsourcing services
- Emphasis on expanding services related to cyber security and Microsoft core solutions
ONLINE MEDIA AND RADIO
TAL BLAND Spara
NEW BUSINESS UNIT IN OPERATION
jQ
VISIR
X
VISIR
BYLGJAN
503
- Vísir is the most popular website in Iceland for the third consecutive year*
- The TV segment of Vísir has never been more popular
- The podcast service, Tal continues to thrive
- A new type of advertisement has been launched that is broadcasted on various different podcasts
- New 360° street-view captures were released on Já.is last November
- Bylgjan is the most popular radio station among the age of 18-49 according to Gallup
- Growth in advertising sales of 13%
- November a record month
- Revenues for Online media & Radio are approximately ISK 840 million in the fourth quarter of 2023
*Weekly users according to Gallup's online media survey
YEAR 2024
- New CEO came in mid-January
- Future ownership of the new business unit, “Online media & Radio” is under ongoing review
- Emphasis on debt reduction and cost containment during the year, while maintaining revenues from the core business
- Strategic planning is underway for the linear part of Stöð 2
- No dividends will be paid for the year 2023.
- Considering that the future ownership of “Online media & Radio” is under review and current is emphasis on optimization, no guidance will be published this year
vodafone
BYLGJAN
visir
Questions?
Inquiries should be directed to [email protected]
© Syn 2023
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 that they are completely faultless.
All information in this presentation are 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