DNA Financial Statements 2009 

Press release 19 February 2010

High demand for mobile services promoted growth of net sales and improved profitability

2009 financial performance in brief
• DNA net sales amounted to EUR 652 million (1-12/2008: EUR 647 million), a 0.8 per cent increase year-on-year.
• EBITDA, excluding nonrecurring items, came to EUR 179 million, accounting for 27.5 per cent of net sales (1–12/2008: 166 million, 25.6 per cent).
• EBITDA for January to December amounted to EUR 167 million (1–12/2008: EUR 166 million).
• EBIT excluding nonrecurring items came to EUR 63 million, accounting for 9.7 per cent of net sales (1–12/2008: 69 million, 10.6 per cent).
• EBIT amounted to EUR –44 million, (1–12/2008: EUR 69 million). EBIT includes a non-recurring EUR 94.9 million goodwill write-down on the fixed network, provisions for the restructuring of operations, and sales profit for long-term investments in shares. The write-down was performed for Q4/2009.
• Profit before taxes, excluding nonrecurring items was EUR 62 million (1–12/2008: EUR 67 million).
• Profit before taxes was EUR –43 million (1–12/2008: 64 million).

Summary of Q4
• DNA's net sales for October–December amounted to EUR 165 million (10–12/2008: EUR 170 million).
• EBITDA adjusted for nonrecurring items came to EUR 45 million, accounting for 27.1 per cent of net sales (10–12/2008: EUR 38 million, 22.3 per cent).
• EBITDA amounted to EUR 49 million (10–12/2008: EUR 38 million).
• EBIT adjusted for nonrecurring items came to EUR 15 million, accounting for 9.1 per cent of net sales (10–12/2008: EUR 15 million, 9.0 per cent).
• EBIT amounted to EUR –76 million, (10–12/2008: EUR 15 million). EBIT includes a non-recurring EUR 94.9 million goodwill write-down on the fixed network.
• Profit before taxes, excluding nonrecurring items was EUR 14 million (10–12/2008: EUR 14 million).
• Profit before taxes was EUR –76 million (10–12/2008: 10 million).

• The DNA mobile communication subscription base (including mobile broadband) grew in Q4 by 56,000 subscriptions, reaching 1,947,000 in total (12/2008: 1,663,000; 9/2009: 1,891,000).
• The revenue per user for mobile communications amounted to EUR 21.9 (10−12/2008: 24.5; 7−9/2009: 22.3).
• Subscription turnover rate (churn) increased in contrast to the previous quarter, reaching 14.8 per cent (10–12/2008: 12.5 per cent; 7–9/2009: 14.5 per cent).

Figures are unaudited.

Key figures

Riitta Tiuraniemi, President and CEO:

“We overcame the economic turmoil of 2009 well: our net sales continued to grow while profit met our expectations."

The global economic upheaval, characterising 2009, did not have a significant negative impact on DNA's business operations. Our net sales grew from the previous year’s EUR 647 million to EUR 652 million. Our EBITDA remained at the previous year’s level while EBITDA per cent amounted to 26 per cent. Our operating profit has retained a healthy level, meeting our expectations.

Our figures are negatively impacted by the nonrecurring EUR 94.9 million goodwill write-down on the fixed network, carried out in Q4. The factors impacting on the goodwill decrease were the faster-than-expected decrease in fixed-network call minutes, the transition from fixed-line broadband to mobile broadband, and decreasing sales of operator services.

Development of the number of mobile communication subscriptions continued apace in both the corporate and consumer sectors. In 2009, the number of subscriptions grew by 284,000 subscriptions, reaching 1,947,000 in total. In the fixed-line network, the number of both broadband and voice subscriptions fell in 2009. At the end of the period, DNA had a total of 647,000 broadband, cable TV and telephone subscriptions.

At the end of the year, Finnish interests assumed full ownership of DNA. In December 2009, Lännen Teletieto Ltd, Oulun Puhelin Holding Plc, and Ilmarinen Mutual Pension Insurance Company acquired its 13 per cent stake from the private equity company 3i.
 
One of our major achievements in 2009 was the fact that our market share of the mobile broadband market, currently enjoying rapid growth, increased to a third of the market. With a potential coverage of almost 90 per cent of Finns, our 3G network is currently the most extensive in Finland. The 4G frequencies, granted to DNA in the auction organised by FICORA in the autumn, ensure our capacity for long-term service development far into the future.
 
In the coming years, we will seek growth in particular in TV operations. We launched mobile TV operations in October, and in the summer we obtained two HDTV network licences for the terrestrial antenna network. Our goal is to launch HDTV services in the market at the end of 2010, while acting as both a network operator and pay TV service provider. Our long-term goal is to become the leading nationwide TV operator in Finland.

At the end of 2009, 10 December, the Union of Salaried Employees started an illegal strike which ended on 31 January 2010. One fifth of DNA Ltd’s employees took part in the strike. The Labour Court ruled the strike as illegal eleven times, imposing a total of some EUR 200,000 in penalties on the Union of Salaried Employees.
 
In 2010, we will continue our transformation process, the objective of which is to turn DNA, in the aftermath of numerous corporate mergers, into a company characterised by clear and lucid processes and a strong uniform corporate culture. Moreover, the strong cash flow from our operations provides us with ample assets to make new investments in networks, services and business innovations, simultaneously enabling profitable growth.

Outlook for 2010
General economic conditions in Finland are expected to remain unstable, with unemployment rising slightly in 2010. In addition, the telecommunications service sector has exhibited clear “post-cyclical” tendencies during previous economic downturns.

Due to these general market developments, we do not expect to see significant growth in DNA’s total net sales. We instead predict that they will remain at 2009 levels. The drop in termination charges, coming into effect in December 2009, and the decrease in the number of fixed-line telephone subscriptions also ate into the growth of DNA’s total net sales.

During 2010, DNA will launch new TV business activities in the nationwide antenna network - these will not start generating actual turnover until 2011. However, due to the efficiency-enhancement measures undertaken in 2009, EBIT and EBITDA are forecast to remain at the 2009 level.

DNA Financial Statements 2009 >>

Further information from 11 am:
Riitta Tiuraniemi, President and CEO, tel. +358 290 996 201, riitta.tiuraniemi@dna.fi
Ilkka Pitkänen, CFO, tel. +358 44 044 4001, ilkka.pitkanen@dna.fi
Vilhelmiina Wahlbeck, Vice President, Corporate Communications, tel. +358 44 040 1671, vilhelmiina.wahlbeck@dna.fi