Telio Holding ASA. 4th QUARTER REPORT 2012

Transcription

1 Telio Holding ASA 4th QUARTER REPORT 2012

2 Telio Holding ASA 4 th Quarter Report 2012 Summary The fourth quarter had a record high customer intake of 15,678 net new customers and organic revenue growth of 17% for the Telio Group (adjusted for currency effects). A major event in the quarter was sign-off of the agreement to acquire 100% of the shares in NextGenTel AS from TeliaSonera. The acquisition was completed on 31 January Market development The Telio Group continued a very strong customer growth in the fourth quarter. Total net customer intake was 15,678. Norway had a net decline of 1,823 VoIP customers, offset by 6,353 new mobile customers (residential and business) and 830 residential broadband lines. The Swiss operation added 341 net new customers in the quarter while Denmark had a net decline of 154 customers. The Dutch operation through its white label agreements showed a record high customer intake adding 10,131 new customers. Success from new services Telio introduced fixed and mobile broadband services in the beginning of With these new services in addition to a new MVNO agreement, Telio provides a complete and competitive service offering to both the residential and the business segment. The offering now comprises broadband telephony, fixed broadband, mobile, mobile broadband and web based switchboard. These new services have contributed significantly to the increased growth in the customer base in 2012 and the Telio Group passed 220,000 customers at the end of the fourth quarter. Key figures (Figures in NOK million) Q Revenues Gross profit 58.9 Gross margin 53.1% EBITDA 11.0 EBIT 0.2 Financials Q (2011 figures in brackets) Revenues in Q4 were NOK million (95.9). Gross profit was NOK 58.9 million 53.1% ( %). EBITDA was NOK 11.0 million 10.0 % ( %). Operating profit was NOK 0.2 million (0.2%). (Q figures adjusted for non-recurring VAT expense). Profit after tax was a loss of NOK 1.6 million (loss of 21.8). The Q figures include NOK 5 million in non-recurring advisory fees related to the acquisition of NextGenTel AS. The company has in Q4 experienced a decline in gross margin. This decline comes from decline in the mobile gross margin in addition to VoIP margin being depressed by significant cost increases to major destinations (Turkey and Pakistan). The company has put in place measures to mitigate this situation and expects to see improvements during Q The increase in operating expenses compared to the same quarter last year is in line with the company s growth strategy. The cost increase is primarily related to increased sales and support staffing and customer acquisition. A majority of the costs are variable and directly linked to actual sales. Given the acquisition of NextGenTel AS, the company has reconsidered its growth strategy to balance growth and focus on optimizing profitability going forward. *) Customers defined as product sales, not unique customers

3 Cash flow from operations was NOK17.0 million in Q Cash and cash equivalents were NOK 52.5 million at 31 December. Investments Investments in Q were NOK 11.8 million, including leased equipment (see notes 6 and 7 for details). Acquisition of NextGenTel On 19 December 2012, Telio Holding ASA and TeliaSonera Norge Holding AB signed an agreement whereby Telio shall acquire TeliaSonera s wholly owned subsidiary NextGenTel AS. Through the acquisition, Telio will become the number three provider of fixed broadband in the Norwegian market and the number two provider of xdsl broadband. The acquisition price is NOK 601 million on an enterprise value basis without any interest-bearing debt, but with cash holdings of NOK 30 million at closing of the acquisition. The acquisition is financed through senior loan facilities from Nordea totaling NOK 500 million and NOK 100 million in new shares. The acquisition represents a step-change for Telio as the company more than doubles its size and significantly broadens its product offering in its core Norwegian market. The acquisition was completed on 31 January For more detailed information, reference is made to the stock exchange notice published on 20 December Shareholder information The total number of registered shares outstanding at the end of Q was 19,392,700 (19,392,700 at the end of Q3 2012) out of which 275,001 shares were owned by Telio Holding ASA (275,001 shares at the end of Q3 2012). The total number of shareholders was 494 (497 at the end of Q3 2012) and 30.2% of the shares were registered abroad (30.7% at the end of Q3 2012). Total outstanding options at the end of Q was 538,900 (538,900 at the end of Q3 2012) with a weighted average strike price of NOK (NOK at the end Q3 2012). The stock price moved from NOK to NOK (-3.8%) during Q4. 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. Future market developments The board expects no significant short term changes in the markets and business environment in which Telio operates. Oslo, 11 February 2012 Board of Directors Telio Holding ASA Liv Bergtorsdottir Erik Osmundsen Aril Resen (sign.) Chairman of the Board (sign.) (sign.) Arnhild Schia Haakon Dyrnes 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 Deferred tax assets Current assets Inventory Trade and other receivables Cash and cash equivalents Total assets EQUITY Share capital Other reserves Retained earnings Total equity LIABILITIES Non-current liabilities Borrowings Current liabilities Trade and other payables Current income tax liabilities Borrowings Deferred income Accrued liabilities Total liabilities Total equity and liabilities Oslo, 11 February 2013 Board of Directors Telio Holding ASA Liv Bergtorsdottir Erik Osmundsen Aril Resen (sign.) Chairman of the Board (sign.) (sign.) Arnhild Schia Haakon Dyrnes Eirik Lunde (sign.) (sign.) CEO

5 Condensed consolidated interim income statement (unaudited) (Figures in NOK 1000) Note Q Q Jan-Dec 2012 Jan-Dec 2011 Sales Other revenues Total revenues Cost of connection and traffic charges Salaries and personnel costs Selling and marketing costs Other costs Depreciation and amortization 6, VAT expense for previous years 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 2012 Jan-Dec 2011 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 (0.08) (1.15) Diluted earnings per share (0.08) (1.13)

6 Condensed consolidated interim statement of changes in equity (unaudited) (Figures in NOK 1000) Share capital Treasury shares Share premium reserve Other paid-in 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 - 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 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 December

7 Condensed consolidated interim statement of cash flows (unaudited) Cash flows from operations Q Q Jan-Dec 2012 Jan-Dec 2011 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 PPE through financial lease Purchase of other investments (intangible assets) *) Net cash flows used in investment activities Cash flows from financing activities (Purchase)/sale of treasury shares Proceeds for shares issued to employees New borrowings (financial lease) 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 *) Includes capitalised expenses related to the development of a proprietary technical platform and capitalised customer acquisition costs

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 December 2012 condensed consolidated interim financial statements of Telio Holding ASA and its subsidiaries (together the Group ) are for the twelve months ended 31 December The consolidated financial statements of the Group as at and for the year ended 31 December 2011 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 11 February 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 2011.

9 Telio Holding ASA Notes to the condensed consolidated interim financial statements (unaudited) Note 5: Segment information IFRS 8 requires segment reporting for operative segments. Telio is a niche company that specialises in the development, marketing and sales of IP-based services and communication solutions, and it operates only in this one business segment. The following geographic segments have been defined based on where the customer is domiciled: Norway, Denmark, the Netherlands and Switzerland. The risk and return are influenced by the geographic location of the operations, in addition to the market. Telio's definition of the geographic segment is based on the location and customer segment in these markets. Transactions between the segments are eliminated. The company's highest decision-making body is the company's Board of Directors and management. Geographical segments (Figures in NOK 1000) Q Profit and loss by segment Norway Denmark Netherlands Switzerland Others 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 % 59 % 45 % 40 % 0 % 53 % Total operating expenses Intra-group operating expenses Net operating expenses Operating profit/loss Q Profit and loss by segment Norway Denmark Netherlands Switzerland Others 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 68 % 61 % 43 % 59 % 0 % 64 % Total operating expenses Intra-group operating expenses Net operating expenses 2) Operating profit/loss

10 Telio Holding ASA Notes to the condensed consolidated interim financial statements (unaudited) Jan-Dec 2012 Profit and loss by segment Norway Denmark Netherlands Switzerland Others 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 63 % 60 % 45 % 47 % 0 % 61 % Total operating expenses Intra-group operating expenses Net operating expenses Operating profit/loss Jan-Dec 2011 Profit and loss by segment Norway Denmark Netherlands Switzerland Others 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 68 % 62 % 40 % 51 % 0 % 64 % Total operating expenses Intra-group operating expenses Net operating expenses 2) Operating profit/loss Balance sheet Norway Denmark Netherlands Switzerland Others 1) Eliminations Group Assets Liabilities Equity capital Investments Balance sheet Norway Denmark Netherlands Switzerland Others 1) Eliminations Group Assets Liabilities Equity capital Investments ) Other items include the parent company Telio Holding ASA and the subsidiary Teliofoni AB in Sweden (dormant) 2) 2011 figures include non-recurring VAT expense for previous years of NOK 50 million

11 Telio Holding ASA Notes to the condensed consolidated interim financial statements (unaudited) Note 6: Tangible fixed assets (Figures in NOK 1000) Q Q Jan-Dec 2012 Jan-Dec 2011 Adapters Book value beg. of period Additions Depreciation Book value end of period Other equipment Book value beg. of period Additions Depreciation Book value end of period Total tangible fixed assets Note 7: Intangible assets (Figures in NOK 1000) Q Q Jan-Dec 2012 Jan-Dec 2011 Customer acquisition costs Book value beg. of period Additions Depreciation Book value end of period Technology platform Book value beg. of period Additions Depreciation Book value end of period Other intangible assets Book value beg. of period Additions Depreciation Book value end of period Total intangible assets Note 8: Finance Net finance of NOK 1.2 million in Q (YTD 2012: NOK million) includes net unrealized foreign exchange gain of NOK 1.2 million (YTD 2012: NOK -2.2 million) related to inter-company loans. Note 9: Inventory Inventory relates to hardware terminals for sale to customers. The terminals are financed through a financial lease.

12 Financial information Q Telio reports revenues of NOK million in 4th quarter EBITDA was NOK 16.0 million (EBITDA margin of 14.5%) and EBIT was NOK 5.2 million adjusted for nonrecurring advisory fees of NOK 5 million related to the acquisition of NextGenTel AS. Total gross profit in Q4 12 was NOK 58.9 million (53.1% margin) compared to NOK 61.8 million (64.4% margin) in Q4 11. Average monthly revenue per customer (VoIP Norway) during Q4 12 was NOK 198 compared to NOK 198 in the previous quarter. Average monthly gross profit per customer for Norwegian VoIP customers was NOK 150 during the quarter compared to NOK 150 in the previous quarter. Salaries and personnel costs were NOK 21.7 million in Q4 12 (19.5% of revenues). The company capitalized NOK 3.1 million in development costs during the quarter. Selling and marketing costs were NOK6.5 million in Q4 12 (5.9% of revenues). The company capitalized customer acquisition costs of NOK 6.5 million during the quarter. Cash flow from operations was NOK 17.0 million in the quarter. Cash and cash equivalents were NOK 52.5 million at 31 December. Consolidated equity was NOK 13.6 million (equity ratio of 9%) compared to NOK 21.9 million (10%) at the end of Q Deferred revenues (current liabilities) increased by NOK 1.4 million during the quarter. Deferred revenues at the end of Q4 12 were NOK 26.3 million of which NOK 2.3 million has been collected and is nonrefundable. Total financial lease debt was NOK 7.5 million at the end of the quarter which is NOK 1.3 million below the end of the previous quarter (NOK 8.8 million). Of the total financial lease debt, NOK 6.2 million was classified as current liabilities (payable within one year from the balance sheet date). (Figures in NOK 000) 4 th quarter rd quarter nd quarter st quarter th quarter rd quarter nd quarter st quarter 2011 Total revenue 110, ,907 99,445 98,475 95,850 94,048 97,236 98,083 Gross margin (%) 53% 61% 65% 64% 64% 63% 65% 64% Operating profit *) 5,164 13,411 20,860 18,210 18,038 20,506 23,509 23,030 Operating margin (%) 4.7% 13% 21% 19% 19% 22% 24% 24% EBITDA *) 16,042 23,979 31,363 28,101 27,576 29,624 33,229 33,290 EBITDA margin (%) 15% 24% 32% 29% 29% 32% 34% 34% EPS (NOK) (0.08) (1.18) EPS (NOK) fully diluted (0.08) (1.16) *) Q and Q figures are before non-recurring items

13 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 Liv Bergtorsdottir Arnhild Schia Haakon Dyrnes Group Management Eirik Lunde, Chief Executive Officer Tom Nøttveit, Chief Financial Officer Sven Ole Skrivervik, Chief Technology Officer Jens Hetland, Sales & Marketing Director (Residential) Nina Forsberg Mathiesen, Director Customer Services Thomas Gunleiksrud, Sales & Marketing Director (Business) Erik Trondsen, Product Director Investor Relations Tom Nøttveit, Chief Financial Officer Telephone: address: Web: Financial Calendar 1 st quarter 2013: 24 April at 09:00 2 nd quarter 2013: 21 August at 09:00 3 rd quarter 2013: 29 October at 09:00 Annual General Meeting: 12 April 2013 at 11:00 Equity Research Coverage Company Contact Phone Carnegie Espen Torgersen SEB Enskilda Peder Strand