DNA PLC STOCK EXCHANGE RELEASE 19 JULY 2019, 8:30 AM EEST

DNA arranges two news conferences today. News conference for media and analysts is held at 10:00 am Finnish time. Conference call for analysts and institutional investors is at 1:00 pm Finnish time. Details of the events can be found at the end of this release.

This is a summary DNA’s Half-Year Financial Report, January-June 2019. The complete report is attached to this release and also available at www.dna.fi/investors.

Summary

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year (reference period).

Figures are unaudited.

April–June 2019

• Net sales increased 3.1% and amounted to EUR 232.0 million (225.0 million).
• Mobile service revenue grew 8.1% and was EUR 120.6 million (111.5 million).
• EBITDA increased 7.2% to EUR 77.8 million (72.6 million), or 33.6% (32.3%) of net sales.
• Operating result decreased 0.8% and was EUR 35.7 million (36.0 million). Operating result as a percentage of net sales was 15.4% (16.0%).
• IFRS 16 had a positive effect on EBITDA in the review period and an insignificant impact on operating result (Note 12).
• Earnings per share was EUR 0.19 (0.20).
• Revenue per user (ARPU) for mobile communications increased 1.1% and was EUR 18.6 (18.4).
• The mobile communication subscription turnover rate (CHURN) decreased and was 13.7% (15.4%)

January–June 2019

• Net sales increased 3.0% and amounted to EUR 460.9 million (447.3 million).
• Mobile service revenue grew 6.7% and was EUR 238.8 million (223.7 million).
• EBITDA increased 7.4% and was EUR 153.9 million (143.3 million), or 33.4% (32.0%) of net sales.
• There were no items affecting the comparability of EBITDA or operating result in the review or reference periods.
• Operating result decreased 1.0% and was EUR 70.5 million (71.2 million). Operating result as a percentage of net sales was 15.3% (15.9%).
• IFRS 16 had a positive effect on EBITDA in the review period and an insignificant impact on operating result (Note 12).
• Operating free cash flow increased 15.3% and was EUR 111.9 million (97.1 million).
• Earnings per share was EUR 0.39 (0.39).
• The mobile communication subscription base decreased by 0.7%, totalling 2,807,000 (2,827,000).
• Revenue per user (ARPU) for mobile communications decline somewhat and was EUR 18.5 (18.7).
• The mobile communication subscription turnover rate (CHURN) decline and was 15.5% (17.1%).
• The fixed-network subscription base (voice, broadband and cable television) grew to 1,227,000 subscriptions (1,137,000).

DNA’s guidance for 2019 remains unchanged

DNA’s net sales in 2019 is expected to remain at the same level as in 2018, and EBITDA in 2019 is expected to increase substantially from 2018. DNA’s financial position and liquidity are expected to remain at a healthy level.

DNA’s guidance for 2019 is disclosed with consideration to the impact of the adoption of IFRS 16. The adoption of IFRS 16 from the beginning of 2019 is estimated to have a positive impact of approximately EUR 17 million in EBITDA in 2019. The impact of IFRS 16 on operating result (EBIT) is insignificant.

Key figures

Figures are unaudited.

The impact of IFRS 16 on the statement of financial position and income statement is presented in Note 12.

CEO’s review

DNA had a very good first half of the year. Our net sales increased 3.0% year-on-year to EUR 460.9 million. The increase was fuelled by the growth of mobile device sales and mobile service revenue, which was boosted by the positive development of our subscription base, mobile broadband services and average billing per customer. In the January-June period, our mobile service revenue grew 6.7% and mobile device sales 15.1%. Our EBITDA grew 7.4% to EUR 153.9 million, or 33.4% of net sales.

Our mobile communication subscription base decreased by 20,000 year-on-year in the second quarter, due to a decrease in prepaid subscriptions. However, our postpaid subscription base increased by 65,000 from the reference period. Revenue per user (ARPU) for mobile communications in April–June increased and was EUR 18.6 (18.4). Our customer CHURN rate, which remained at a very low level of 13.7% (15.4%) in the second quarter, is an indication of high customer satisfaction. Our fixed-network subscription base grew by 90,000 subscriptions.

In May, we strengthened our market position in the Tampere region by acquiring the fibre optic network infrastructure and consumer business of ICT Elmo Oy (formerly Tampere homes Puhelin). DNA gained more than 30,000 new fixed-line broadband customers and almost 25,000 new cable TV customers. The extensive fibre-optic network infrastructure will facilitate the introduction of 5G and boosts our competitiveness in the Pirkanmaa region.

We continued to prepare our network for 5G deployment with the introduction of 5G-capable technology and increased network capacity. We also built a 5G network for the SuomiAreena event in Pori where we are showcasing the DNA Smart Home. Outside Pori, DNA’s 5G network is already available in Helsinki city centre, and we are expanding the network to other major cities in Finland. Since last autumn, we have also tested a fixed 5G broadband service and started using the actual 5G frequency in the second quarter of 2019. Fixed 5G, or high-speed broadband for detached homes, will be one of DNA’s first commercial services provided with the 5G technology. It allows us to bring high-speed broadband connections to detached in areas without access to optical fibre connections. Consumers will be able to use 5G services as soon as more technologically mature 5G-capable mobile devices become available at reasonable price points, which is expected to happen in early 2020.

In April, DNA was awarded as the most responsible company in its industry in Finland according to the Sustainable Brand Index study. In total, 10,300 consumers responded to the study in Finland. The annual study is based on the principles of responsibility and the objectives of sustainable development of the UN Global Compact, and it is the largest independent study in its field in the Nordic countries.

We will continue the long-term development of our business, focusing on customer experience, personnel satisfaction and the resulting profitable growth. DNA’s guidance for 2019 remains unchanged. DNA’s net sales in 2019 is expected to remain at the same level as in 2018. With consideration to the impact of IFRS 16, EBITDA in 2019 is expected to increase substantially from 2018. DNA’s financial position and liquidity are expected to remain at a healthy level.

Jukka Leinonen
CEO

DNA’s financial publications and Capital Market Day in 2019:

• Interim Report January-September 2019, 22 October 2019
• Capital Markets Day in Helsinki, 26 November 2019

News conferences

DNA will arrange a news conference for media and analysts in Finnish at 10:00 am EEST. The event is broadcasted exceptionally in Pori’s SuomiAreena. News conference can be participated, and questions asked through live webcast on: https://corporate.dna.fi/reports-and-presentations#tulostiedotustilaisuudet.

Conference call for analysts and investors at 1:00 pm EEST, 12:00 (noon) CEST, 11:00 am BST
The audience is welcome to participate and ask questions through a conference call by dialing in a couple of minutes before the scheduled time;

• Finland: +358 981 710 310
• United Kingdom: +44 333 300 08 04
• United States: +1 631 913 14 22
• Participant passcode: 8782 4505#

Conference call can also be participated and questions asked by live audiocast from: https://corporate.dna.fi/reports-and-presentations#tulostiedotustilaisuudet

The result bulletin, presentation materials as well as a link to the webcast and audiocast will be available on DNA’s website before the event: https://corporate.dna.fi/reports-and-presentations#tulostiedotustilaisuudet. Recordings of the both events will also be available on the same website later during the result day.

Additional information:

Jukka Leinonen, CEO, DNA Plc, tel. +358 44 044 1000, jukka.leinonen(at)dna.fi
Timo Karppinen, CFO, DNA Plc, tel. +358 44 044 5007, timo.karppinen(at)dna.fi
Marja Mäkinen, Head of IR, DNA Plc, tel. +358 44 044 1262, marja.makinen(at)dna.fi
DNA Corporate Communications, tel. +358 44 044 8000, communications(at)dna.fi

DNA is a Finnish telecommunications group providing high-quality voice, data and TV services for communication, entertainment and working. DNA is Finland’s largest cable operator and the leading pay TV provider in both cable and terrestrial networks. Our mission is to provide products and services that make our private and corporate customers’ lives simple. As a telecommunications operator, DNA plays an important role in society by providing important communication connections and by enabling digital development. DNA was ranked as Finland’s best place to work in 2019 in the Great Place to Work survey’s large companies category. In 2018, our net sales were EUR 912 million and our operating profit EUR 139 million. DNA has more than 4 million subscriptions in its fixed and mobile communications networks. The Group also includes DNA Store, Finland’s largest retail chain selling mobile phones. DNA shares are listed on Nasdaq Helsinki Ltd. For further information, visit www.dna.fi or follow us on Twitter @DNA_fi and Facebook.

Attachment

• DNA’s Half-Year Financial Report, January-June 2019