Q4 217 presentation Oslo / 6 March 218 Eirik Lunde, CEO Gaute W. Krekling, CFO
Q4 217 financials in brief CUSTOMERS at 31 Dec 315,8 RGUs Revenue generating units REVENUES 316 Q4 17 NOK MILLION 11 74,3 Norway 4,7 2,8 consumers Norway businesses International 127 178 2 / Q4 217
Q4 217 financials in brief REVENUES 316.2 NOK MILLION CASH 11.5 NOK MILLION EBITDA 34.4 NOK MILLION EQUITY RATIO 14.4% EBIT -15.4 NOK MILLION NET DEBT /EBITDA 1.4 3 / Q4 217
Highlights Q4 REVENUE DEVELOPMENT COST REDUCTION STRUCTURAL CHANGES Stable revenue and gross margin development from Q3 to Q4 Price increases with positive effect on ARPU in consumer broadband and TV The previously announced cost reduction plan (NOK 4 million annually) is on track Consumer Mobile portfolio sold to Telia during Q4. First payment of 75 MNOK received in January Demerger of NextGenTel AS from 1 November to establish Proximo Norge as a separate legal entity to focus on end-user corporate segment 4 / Q4 217
Financial results (Figures in NOKm) Q4 217 Q3 217 Q4 216 Revenues 316.2 317.4 33. Gross margin 41.6% 41.4% 46.8% EBITDA 34.4 35.9 53.9 EBIT (15.4) (7.8) 1. Cash flow from operations 2.3 64.6 38.5 Free cash flow per share (.82) 2.2.51 Cash and cash equivalents at end of quarter 11.5 24.4 66.6 Stable revenue and gross margin development in Q4 EBITDA negatively affected by restructuring cost in Q4 De-merger of NextGenTel AS to establish Proximo as a separate legal entity One-off depreciations related to reclassification of leasing agreements affect EBIT negatively with 6.3 MNOK Cash flow from operations mainly affected by tax payments in Q4 and fluctuations in working capital 5 / Q4 217
NOKm CAPEX development Lower capex key to improve cash flow Positive trend 35 3 25 2 15 8,7 % 29 8, % 25 7,6 % 24 5,8 % 19 6,9 % 22 1% 9% 8% 7% 6% 5% 4% Capex reduction ahead of ambition to reach 8% capex/sales for 217. Total capex/sales for FY 17 of 7.1% 1 3% 5 2% 1% % CAPEX CAPEX/sales Note: Capex in Q2 17 do not include the acquisition of Bayonette customer base (4.5 mnok) 6 / Q4 217
Product mix share of revenues Q4 217 Q4 216,9 % 1,5 % 1, % 2,1 % 19,1 % 14,1 % VoIP/fixed Mobile 14,5 % 15, % 64,4 % Broadband (incl TV) Wholesale 67,3 % Other 7 / Q4 217
Consumer broadband Revenue growth on fiber based broadband compensate for the decline in xdsl revenues in Q4 Improved Vula Fiber margin in Q4 and potential further cost reductions announced (through regulations) Implemented price increases with positive effect on ARPU in Q4 SUBSCRIPTIONS ( ) REVENUES (MNOK) ARPU (NOK/MONTH) 15 15 14 13 125 12 129 123 123 11 12 116 115 117 117 112 1 18 1 9 8 75 7 6 5 5 Note: Historical subscription figures updated due to implementation of new BSS revealing an error in historical figures 8 / Q4 217 45 4 35 3 25 2 15 1 5 344 344 346 345 356
Consumer TV TV subscribers represent a smaller share of the broadband customer base Growth in high-speed broadband will facilitate upselling of TV services Price increase in Q4 with positive effect on ARPU SUBSCRIPTIONS ( ) REVENUES (MNOK) ARPU (NOK/MONTH) 25 2 15 1 18, 18,3 18,3 17,7 17,7 2 15 1 16,1 16,3 16,5 16, 17,9 4 3 2 31 299 3 297 338 5 5 1 - Note: Historical subscription figures updated due to implementation of new BSS revealing an error in historical figures 9 / Q4 217
Consumer mobile Negative effect on ARPU from EU regulation and introduction of data rollover All consumer mobile customers will be ported to Telia during March 218 SUBSCRIPTIONS ( ) REVENUES (MNOK) ARPU (NOK/MONTH) 5 35 3 4 3 4,2 39, 38,5 38,1 36,5 3 25 2 29,5 28,2 28,4 27,2 25,4 2 242 237 244 236 227 2 1 15 1 5 1 1 / Q4 217
Consumer VoIP Subscriber base following the long term trend of VoIP being replaced by mobile Stable ARPU SUBSCRIPTIONS ( ) REVENUES (MNOK) ARPU (NOK/MONTH) 75 3 2 5 53,1 48,6 44,3 42,6 39,1 2 23,1 21,4 19,8 17,9 16,8 15 1 141 141 142 137 137 25 1 5-11 / Q4 217
Business datacom Within the SMB segment, customers of Internet access over xdsl churn in favor of fiber or mobile broadband. Within Retail, xdsl is still the preferred access technology Stable revenues supported by ARPU increase in Q4 SUBSCRIPTIONS ( ) REVENUES (MNOK) ARPU (NOK/MONTH) 25 2 15 1,9,7,8 6,8 6,8 6,8,7,6 6,7 6,6 6 5 4 3 2 1,9 1,7 1,6 1,6 1,4 23,2 23, 23,1 22,9 23, 1 2 1 8 6 4 1 134 1 13 1 131 1 131 1 154 665 694 732 74 739 598 567 562 553 63 5 1,1 1, 9,9 9,1 9, 1 18,1 17,1 16,7 15,8 [VALUE] 2-12 / Q4 217 Internet Datanet Ethernet
Business mobile ARPU development from Q3 affected by EU regulation and data rollover Price increases made during Q1 218 SUBSCRIPTIONS ( ) REVENUES (MNOK) ARPU (NOK/MONTH) 18 16 14 12 16,4 16,6 16,6 16,4 16, 18 16 14 12 16,8 16,8 17,2 15,4 15, 4 3 354 34 345 311 39 1 8 1 8 2 6 4 6 4 1 2 2 13 / Q4 217
Subscriptions ( ) Pro forma financial results NextGenTel (B2C) (Figures in NOKm) Q4 217 Q3 217 FY 217 Revenues 189 191 779 Gross margin 4.6% 4.4% 41.% 25 2 15 1 53 4 18 123 49 44 43 39 39 39 38 36 18 18 18 18 116 115 112 18 EBITDA 23 18 91 5 Pro forma figures are based on certain assumptions and may vary from future actual figures after completion of the demerger Broadband TV Mobile VoIP 14 / Q4 217
Subscriptions Proximo ( ) Pro forma financial results Fiber Norge (B2B) (Figures in NOKm) Q4 217 Q3 217 FY 217 Revenues 129 126 49 Gross margin 38.8% 39.1% 42.2% EBITDA 11 14 57 Pro forma figures are based on certain assumptions and may vary from future actual figures after completion of the demerger 5 45 4 35 3 25 2 15 1 5 1 1 9 9 9 16 17 17 16 16,9,7,8,7,6 7 7 7 7 7 1 1 1 9 9 Internet Std. DataNet Ethernet Mobile VoIP In addition comes approximately 6, RGUs in Kvantel as of Q4 17 15 / Q4 217
Break-down pro forma EBITDA (Figures in NOKm) Fiber Norge (B2B) NextGenTel (B2C) Q4 217 Q3 217 FY 217 11 14 56 23 18 91 Int l markets 6 6 24 Eliminations -6-2 -1 EBITDA Group 34 36 161 Pro forma figures are based on certain assumptions and may vary from future actual figures after completion of the demerger 16 / Q4 217
Financial calendar 218 Q4 216 Q1 217 Q1 218 Thursday 4 May at 9: Wednesday 15 February at 9: Q2 217 Wednesday 16 August at 9: Thursday 26 April 218 at 9: 17 / Q4 217
18 / Q4 217 Thank you!
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