Telio Holding ASA 1 st quarter report 2014

Transcription

1 Telio Holding ASA 1 st quarter report 2014

2 Telio Holding ASA 1 st Quarter 2014 Report Summary Telio completed a successful debt refinancing during first quarter. The early redemption of the bond has a one-off negative financial impact, but this will be more than offset by significantly lower financial expenses going forward. The new financial structure gives Telio sufficient flexibility to continue its shareholder friendly dividend policy. The financial performance in the first quarter shows that the Telio Group is well positioned to achieve its key financial targets for Market development As announced previously, the Telio companies have reduced customer intake in favor of increased profitability. Total net customer intake in Q1 was a net loss of 5,612 customers *). Norway had a net decline of 2,118 VoIP customers, partly offset by 275 new mobile and broadband customers. While the Dutch market has contributed substantially to the Group s net customer growth, the white label business in the Netherlands had a net decline of 3,785 customers in Q1. As announced previously, the company has expected a slow-down in customer intake due to changes within the largest white label partner. In January,Telio announced a new contract to provide VoIP services to M7 customers in the Netherlands. M7 operates in the Netherlands with a.o. the brand Canal Digitaal. During 2014, Telio Netherlands will start providing all VoIP services for their Dutch customers. This includes the migration of the voice services of all existing customers (currently approximately 120,000 customers). An intention has been expressed by both M7 and Telio to also look into providing VoIP services to other M7 customers across Europe. NextGenTel had a stable customer base during Q1 and had 204,000 customers at the end of March. The Telio Group had 425,000 customers at the end of March. *) Customers defined as revenue generating units, not unique customers Key figures (Figures in NOK million) Q Q Revenues Gross profit Gross margin 52.9% 53.9% EBITDA EBIT Note: Q figures include NextGenTel from 1 February. EBITDA/EBIT are adjusted for non-recurring items and EBIT is adjusted for amortization cost related to the acquisition of NextGenTel Group financials Q (2013 figures in brackets) Revenues in Q1 were NOK million (260.7). Gross profit was NOK million 52.9% ( %). EBITDA adjusted for non-recurring items was NOK 76.8 million 23.8 % ( %). Operating profit adjusted for non-recurring items was NOK 47.1 million (27.6). Profit after tax was NOK (3.5) million (profit of 8.9). The loss for the period is due to the early redemption of the bond in connection with the financial restructuring. For further details, reference is made to note 8 to the financial statements. The Q financial statements include NOK 9.6 million in amortization cost related to the acquisition of NextGenTel AS. Cash and cash equivalents were NOK 80.8 million at 31 March 2014 (excluding a NOK 75 million overdraft facility). Investments Investments in Q were NOK 30.6 million, including leased equipment (see notes 6 and 7 for details). Capex /sales ratio was 9.5% in Q1. Related party transactions There have been no transactions by related parties that have had a material effect on the Group s financial position or results in the period.

3 NextGenTel The major restructuring of NextGenTel was finalized during Q Minor adjustments and optimization of the organization will continue in Shareholder information The total number of registered shares outstanding at the end of Q was 23,283,180 (23,283,180 at the end of Q4 2013) out of which 329,201 shares were owned by Telio Holding ASA (229,201 shares at the end of Q4 2013). The total number of shareholders was 532 (524 at the end of Q4 2013) and 37.8% of the shares were registered abroad (37.6% at the end of Q4 2013). Total outstanding options at the end of Q was 533,100 (533,100 at the end of Q4 2013) with a weighted average strike price of NOK (NOK at the end Q4 2013). The stock price moved from NOK to NOK (+8.5%) during Q1. Financial debt In a bondholders meeting on 5 February 2014, an early redemption of the bond was approved. The NOK 300 million bond was repaid at % of par value plus accrued interest on 7 March The company has agreed on new loan facilities with Nordea. The new financing comprises a five year term loan of NOK 250 million and a NOK 75 million overdraft facility, replacing the current bank loan of NOK 175 million. The reduced financial expenses following the new loan facilities will offset the call premium for the bond within approximately 24 months and the new financing reduces financial expenses by approximately 60% (NOK 56 million) over the loan term. Altogether, this financial restructuring including less strict financial covenants makes it possible for Telio to pay dividend already in 2014 based on the 2013 annual accounts. The board has proposed a dividend of NOK 2 per share. There are financial covenants related to the loan facilities and the company s performance is in compliance with the financial covenants as of 31 March Net interest bearing debt was NOK 173 million at 31 March Risks The Dutch wholesale business increases the company s risk since one distributor represents a majority of the customers. Future market developments The board expects no significant short term changes in the markets and business environment in which the Telio Group operates. Oslo, 7 May 2014 Board of Directors Telio Holding ASA Ellen Hanetho Erik Osmundsen Aril Resen (sign.) Chairman of the Board (sign.) (sign.) Silje Veen Snorre Kjesbu Eirik Lunde (sign.) (sign.) CEO (sign.)

4 Condensed consolidated interim balance sheet (unaudited) (Figures in NOK 1000) Note ASSETS Non-current assets Property, plant and equipment Intangible assets Goodwill Deferred tax assets Current assets Inventory Trade and other receivables Cash and cash equivalents Total assets EQUITY Share capital Premium paid-in capital Other reserves Retained earnings Total equity LIABILITIES Non-current liabilities Long-term interest-bearing debt Deferred tax liabilities Current liabilities Trade and other payables Current income tax liabilities Short-term interest-bearing debt Deferred income Total liabilities Total equity and liabilities Oslo, 7 May 2014 Board of Directors Telio Holding ASA Ellen Hanetho Erik Osmundsen Aril Resen (sign.) Chairman of the Board (sign.) (sign.) Silje Veen Snorre Kjesbu Eirik Lunde (sign.) (sign.) CEO (sign.)

5 Condensed consolidated interim income statement (unaudited) (Figures in NOK 1000) Note Q Q Jan-Dec 2013 Total revenues Cost of connection and traffic charges Salaries and personnel costs Selling and marketing costs Other costs Depreciation and amortization 6, Operating profit Finance Profit before income tax Income tax Profit Attributable to: Equity holders of the parent company Other comprehensive income Q Q Jan-Dec 2013 Translation differences Other income and expenses during the period (after tax) Comprehensive profit for the period Profit attributable to: Equity holders of the parent company Earnings per share Earnings per share Diluted earnings per share

6 Condensed consolidated interim statement of changes in equity (unaudited) (Figures in NOK 1000) Share capital Treasury shares Premium paidin equity Translation differences Retained earnings Total equity Equity as at 1 January Comprehensive profit/loss for the period Profit/Loss Other income and expenses - Translation differences Total other revenues and expenses Comprehensive profit/loss for the period Transactions with owners, recorded directly against equity - Receipts from and distributions to owners - Share-based payment transactions Share issue Share options exercised Total receipts from and distributions to owners Equity as at 31 December Equity as at 1 January Comprehensive profit/loss for the period Profit/Loss Other income and expenses Translation differences Total other revenues and expenses Comprehensive profit/loss for the period Transactions with owners, recorded directly against equity Receipts from and distributions to owners Purchase of treasury shares Dividends to owners Share-based payment transactions Share options exercised Total receipts from and distributions to owners Equity as at 31 March

7 Condensed consolidated interim statement of cash flows (unaudited) Cash flows from operations Q Q Jan-Dec 2013 Profit/loss for the year before tax Adjustment for: - Net financial items Interest paid Interest received Realized foreign exchange gain/(loss) Taxes paid Depreciation Amortisation Non-cash transactions related to option costs Changes in inventory Changes in trade accounts payable and other liabilities Changes in trade accounts and other receivables Change in deferred revenue Net cash flow from operations Cash flows from investment activities Purchase of property, plant and equipment (tangible fixed assets) Purchase of other investments (intangible assets) Acquisition of subsidiary, net of cash acquired Proceeds from sale of subsidiary Net cash flows used in investment activities Cash flows from financing activities Proceeds from share issues Proceeds for shares issued to employees Purchase of treasury shares Proceeds/(payments) long term debt Payment of liabilities related to financial leasing Dividends paid Net cash flows used in financing activities Change in cash and cash equivalents Cash and cash equivalents and credit facilities utilised as at beginning of period Effect of exchange rate fluctuations on cash and cash equivalents Cash and cash equivalents as at end of period

8 Telio Holding ASA Notes to the condensed consolidated interim financial statements (unaudited) Note 1: Reporting entity Telio Holding ASA (the Company ) is a company domiciled in Oslo, Norway. These March 2014 condensed consolidated interim financial statements of Telio Holding ASA and its subsidiaries (together the Group ) are for the three months ended 31 March The consolidated financial statements of the Group as at and for the year ended 31 December 2013 are available upon request from the Company s registered office at Harbitzalleen 2A, Oslo, or at Note 2: Statement of compliance These condensed consolidated interim financial statements of Telio Holding ASA Group have been prepared in accordance with rules and regulations from Oslo Stock Exchange and International Financial Reporting Standard (IFRS) IAS 34, Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December These condensed consolidated interim financial statements were approved by the Board of Directors on 7 May Note 3: Significant accounting policies These condensed consolidated interim financial statements have been prepared under the historical cost convention. They have been prepared under the same accounting principles as those set out in the consolidated financial statements of the Group as at and for the year ended 31 December Note 4: Estimates The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2013.

9 Note 5: Segment information The group has defined and presented operating segments based on information that is provided to the Board of Directors and CEO, which collectively represent the group's highest decision-making body. The operating segments are defined based on where the customers are domiciled. The following four operating segments have been defined: Norway, Denmark, Switzerland and the Netherlands. For information purposes, the Norway segment is split in Telio and the acquired company NextGenTel AS. The acquisition of NextGenTel AS has not had any impact on the assessment of operating segments. The risk and return are influenced by the geographic location of the operations, in addition to the market. Transactions between the segments are eliminated. Geographical segments (Figures in NOK 1000) Q Total Telio NextGenTel Profit and loss by segment Norway Norway Norway Denmark Netherlands Switzerland Other 1) Group Total revenues Intra-group revenues Net revenues Total costs of sales Intra-group cost of sales Net cost of sales Gross profit/loss Gross margin 53 % 58 % 51 % 63 % 57 % 45 % 0 % 53 % Total operating expenses Intra-group operating expenses Net operating expenses Operating profit/loss Q Total Telio NextGenTel Profit and loss by segment Norway Norway Norway Denmark Netherlands Switzerland Other 1) Group Total revenues Intra-group revenues Net revenues Total costs of sales Intra-group cost of sales Net cost of sales Gross profit/loss Gross margin 54 % 57 % 53 % 56 % 50 % 38 % 0 % 54 % Total operating expenses Intra-group operating expenses Net operating expenses Operating profit/loss

10 Total Telio NextGenTel Balance sheet Norway Norway Norway Denmark Netherlands Switzerland Other 1) Eliminations Group Assets Liabilities Equity capital Total Telio NextGenTel Balance sheet Norway Norway Norway Denmark Netherlands Switzerland Other 1) Eliminations Group Assets Liabilities Equity capital ) Other items include the parent company Telio Holding ASA and Group adjustments (Q includes amortization of NOK 9.6 million related to the acquisition of NextGenTel AS). Note 6: Property, plant and equipment (Figures in NOK 1000) Q Q Jan-Dec 2013 Equipment Book value beg. of period Acquisitions - new companies Additions Depreciation Disposals Property, plant and equipment Note 7: Intangible assets and goodwill (Figures in NOK 1000) Q Q Jan-Dec 2013 Intangible assets Book value beg. of period Acquisitions - new companies Additions Amortization Book value end of period Goodwill Book value beg. of period Additions Revaluation Book value end of period Intangible assets and goodwill Amortization of intangible assets include amortization of excess values related to the acquisition of NextGenTel AS (Q1 14: NOK 9.6 million).

11 Note 8: Finance Q Q Jan-Dec 2013 Interest income Interest expense Foreign currency gain/(loss) Other financial income/(expenses) Net finance The Q figures include the following non-recurring items related to refinancing: Other financial income/(expenses): Call premium related to early redemption of bond Remaining cost related to the original loan facilities established in Q (no cash effect) Other Note 9: Interest-bearing debt Term loan bank Bond Long term financial lease Total long-term debt Current part of term loan bank Short term financial lease Total short-term debt Total interest-bearing debt

12 Company Facts Telio Holding ASA Harbitzalleen 2A P.O. Box 54 Skøyen 0212 Oslo Telephone: Homepage: Company reg. number: Founded: 12 August 2003 Board of Directors Erik Osmundsen (Chairman) Aril Resen Ellen Hanetho Silje Veen Snorre Kjesbu Group Management Eirik Lunde, Chief Executive Officer Tom Nøttveit, Chief Financial Officer Sven Ole Skrivervik, Chief Technology Officer Jens Hetland, Sales & Marketing Director Nina Forsberg Mathiesen, Customer Services Director Erik Trondsen, Product Director Investor Relations Tom Nøttveit, Chief Financial Officer Telephone: address: Web: Financial Calendar 1 st quarter 2014: 8 May at 09:00 2 nd quarter 2014: 21 August at 09:00 3 rd quarter 2014: 28 October at 09:00 Annual general meeting: 8 May at 14:00 Equity Research Coverage Company Contact Phone SEB Enskilda Peder Strand Norne Securities Leonas Bauzys Indep Research LTD Ola Sekkesæter