DNA Oyj - Interim report (Q1 and Q3)

DNA Plc's Interim Report January-March 2017: DNA's year started strongly - net sales and operating result grew in the first quarter

DNA PLC STOCK EXCHANGE RELEASE 21 April 2017 at 8:00 AM EET

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

January-March 2017

  * Net sales increased 5.7% and amounted to EUR 213.4 million (202.0 million).
  * EBITDA increased 9.7% to EUR 65.9 million (60.1 million) or 30.9% (29.8%) of
    net sales.
  * The operating result increased 14.9% and was EUR 28.9 million (25.1 million)
    or 13.5% (12.4%) of net sales.
  * The mobile communication subscription base grew 3.8%, totalling 2,732,000
    (2,632,000).
  * Revenue per user (ARPU) for mobile communications amounted to EUR 17.8
    (16.4).
  * The mobile communication subscription turnover rate (CHURN) was 21.0%
    (13.6%).
  * The fixed-network subscription base (voice, broadband and cable television)
    grew slightly and was 1,120,000 subscriptions at the end of March
    (1,112,000).

DNA's outlook for 2017 remains unchanged

DNA's net sales are expected to remain at the same level and the comparable
operating result is expected to improve somewhat in 2017 compared to 2016. The
Group's financial position and liquidity is expected to remain at a healthy
level.

Key figures

+----------------------------------------+--------+--------+---------+---------+
|EUR million                             |1-3/2017|1-3/2016|Change, %|1-12/2016|
+----------------------------------------+--------+--------+---------+---------+
|Net sales                               |   213.4|   202.0|     5.7%|    858.9|
+----------------------------------------+--------+--------+---------+---------+
|EBITDA                                  |    65.9|    60.1|     9.7%|    236.3|
+----------------------------------------+--------+--------+---------+---------+
|  % of net sales                        |   30.9%|   29.8%|         |    27.5%|
+----------------------------------------+--------+--------+---------+---------+
|Comparable EBITDA*                      |    65.9|    60.1|     9.7%|    247.1|
+----------------------------------------+--------+--------+---------+---------+
|  % of net sales                        |   30.9%|   29.8%|         |    28.8%|
+----------------------------------------+--------+--------+---------+---------+
|Depreciation, amortisation and          |        |        |         |         |
|impairment                              |    37.1|    35.0|         |    145.0|
+----------------------------------------+--------+--------+---------+---------+
|Operating result, EBIT                  |    28.9|    25.1|    14.9%|     91.2|
+----------------------------------------+--------+--------+---------+---------+
|  % of net sales                        |   13.5%|   12.4%|         |    10.6%|
+----------------------------------------+--------+--------+---------+---------+
|Comparable operating result*            |    28.9|    25.1|    14.9%|    102.1|
+----------------------------------------+--------+--------+---------+---------+
|  % of net sales                        |   13.5%|   12.4%|         |    11.9%|
+----------------------------------------+--------+--------+---------+---------+
|Net result before tax                   |    26.6|    22.7|    17.2%|     81.7|
+----------------------------------------+--------+--------+---------+---------+
|Net result for the period               |    21.2|    18.2|    16.7%|     65.2|
+----------------------------------------+--------+--------+---------+---------+
|Return on investment (ROI), %           |    12.5|    10.7|         |      9.6|
+----------------------------------------+--------+--------+---------+---------+
|Return on equity (ROE), %               |    14.9|    14.1|         |     11.6|
+----------------------------------------+--------+--------+---------+---------+
|Capital expenditure                     |    21.2|    20.8|     1.8%|    143.6|
+----------------------------------------+--------+--------+---------+---------+
|Cash flow after investing activities    |    10.3|    29.1|         |     83.5|
+----------------------------------------+--------+--------+---------+---------+
|Net debt, EUR million                   |   314.3|   383.4|         |    321.7|
+----------------------------------------+--------+--------+---------+---------+
|Net debt/EBITDA                         |    1.19|    1.59|         |     1.36|
+----------------------------------------+--------+--------+---------+---------+
|Net gearing, %                          |    57.6|    76.2|         |     53.9|
+----------------------------------------+--------+--------+---------+---------+
|Equity ratio, %                         |    45.3|    42.6|         |     48.4|
+----------------------------------------+--------+--------+---------+---------+
|Basic earnings per share, EUR           |    0.16|    0.14|         |     0.51|
+----------------------------------------+--------+--------+---------+---------+
|Diluted earnings per share, EUR         |    0.16|    0.14|         |     0.51|
+----------------------------------------+--------+--------+---------+---------+
|Personnel at the end of period          |   1,684|   1,683|         |    1,668|
+----------------------------------------+--------+--------+---------+---------+

*Group key figures

CEO's review

DNA's year 2017 is off to a strong start as expected. Our net sales increased
5.7% to EUR 213.4 million. Strong growth of service revenue (net sales less
sales of devices and interconnection charges) continued, and good development of
mobile device sales also had a positive effect on net sales. Service revenue was
boosted in particular by the positive development of the mobile subscription
base and growing use of mobile data as 4G subscriptions become more common. Our
profitability improved and our operating result grew 14.9% and was EUR 28.9
million, or 13.5% of net sales (12.4%).

Mobile communication network subscription volumes were up 100,000 from the
reference period. There was a clear improvement in DNA's revenue per user (ARPU)
for mobile communications from the comparison period. Price increases in certain
older DNA subscription types increased DNA's subscription turnover rate (CHURN)
in the first quarter. Our fixed-network subscription base (fixed voice, fixed
broadband and cable television) increased by 8,000 subscriptions from the
reference period, even though our customers kept moving away from using of
fixed-voice subscriptions. At the same time, fixed-network broadband and cable
television subscriptions increased in total by 20,000.

In 2017, the focus of our network investments has shifted from network coverage
expansion to capacity expansion. At the end of 2016, our 4G network reached
99.6 per cent of the population in mainland Finland as the shared network was
completed in Eastern and Northern Finland. Due to the improved coverage, DNA has
gained new consumer and corporate customers in the area. For example, the
University of Lapland selected DNA as its mobile service provider. The agreement
between DNA and the University of Lapland covers mobile voice and data
connections for hundreds of users. When selecting the service provider, the
University of Lapland placed emphasis on coverage.

The DNA Valokuitu Plus (DNA Fibre Optic Plus) network enables broadband speeds
of a Gigabit class per second without any changes to the housing company's
internal network. In the first quarter, the Gigabit class speed became available
to all 600,000 households in the DNA Valokuitu Plus network across Finland. DNA
is among the first operators globally that is capable of providing Gigabit class
broadband speeds in the entire network.

In the first quarter, we tested the potential of the new 5G radio technology
with Ericsson. A transmission speed of some 25 Gbps and a delay of less than 3
ms were achieved in the radio connection in the 5G test, which is a strong
demonstration of the progress of 5G development. There are three important
targets for 5G in the future: to enable a large-scale Internet of Things, to
support highly reliable delay-critical connections, and to further increase the
speed and efficiency of mobile broadband connections.

In the first quarter, we became the first company in Finland to introduce
grandparental leave, entitling grandparents to a one week's paid leave.

Competition is expected to remain intense for the rest of the year and our
outlook for 2017 remains unchanged. According to our strategy, we will continue
measures to improve our customer experience further, and we will also continue
to focus on employee well-being and professional development.

Jukka Leinonen
President and CEO

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's financial publications in 2017:

  * Half Year Financial Report, 18 July 2017 at 8:30 AM
  * Interim Report January-September, 20 October 2017 at 8:30 AM

Distribution:
Nasdaq Helsinki
Key media
www.dna.fi




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DNA Plc s Interim Report January−March 2017 (pdf).pdf