results 2019 21 August 2019 Eivind Helgaker (CEO) and Henning - - PowerPoint PPT Presentation

16th June 2017

Second quarter and half-year results 2019

21 August 2019 Eivind Helgaker (CEO) and Henning Karlsrud (CFO)

Financials

Henning Karlsrud

Chief financial officer

2

Agenda

Introduction

Eivind Helgaker

Chief executive officer

Summary &

• utlook

Eivind Helgaker

Chief executive officer

1 2 3

Attractive position Revenue mix H1 2019

Ice Group in brief

Brands Smartphone + mobile broadband

Mobile broadband

▪ Pure 4G (5G ready) Nokia network ▪ Attractive spectrum portfolio ▪ Low cost base ▪ Government support for 3rd network

96,5% 2.5% Norway Sweden 79% 21% Smartphone Mobile broadband

1

3

Denmark 1%

Summarised:

Ice Group’s strategy

Continued network roll-out to achieve economics of scale

▪ Build approx. 1,500 – 2,000 Nokia base stations by end-2020 ▪ Expand smartphone network to 95% population coverage ▪ Transmit >90% of data traffic through own 4G network

Build a trusted and customer-focused brand

▪ Become Norway’s most recommended mobile tele- communications company to buy services from and work for

Leverage multiple growth and margin levers

▪ Further increase market share and ARPU ▪ Increased focus on higher data usage segments

1 2 3 4

Highlights in Q2 2019: ▪ 16% year-on-year increase in smartphone service revenues ▪ 79k smartphone subscription growth in quarter ▪ New frequency licenses in 450, 700 and 2,100 MHz bands, at attractive prices ▪ Oslo Axess listing ▪ Launch of the disruptive freemium “ice junior” subscription ▪ Ice ranked 2nd in telco category of BI Norwegian Business School’s annual customer satisfaction survey “Norsk kundebarometer”, and climbed from 65th to 25th place across all industry sectors

5

Second quarter highlights and main developments

Photos: Oslo Børs (top), ice (bottom)

50 100 150 200 250 300 350 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

Smartphone service revenues (mnok)

6

Q2 2019 | Key figures: smartphone development

536 thousand

Smartphone subscriptions

+27

% vs. Q2 2018

Smartphone service revenue

319 mnok +16

% vs. Q2 2018

100 200 300 400 500 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

• No. of smartphone subscriptions (thousand)

10 20 30 40 50 60 70 80 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

• •Average data on-net share (%) •Average VoLTE share (%)

200 400 600 800 1000 1200 1400 1600 1800 2000 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

Operational smartphone sites

7

Q2 2019 | Key figures: network development

1,987

Operational smartphone sites*

+374

vs. Q2 2018

On-net data and VoLTE traffic

72 19

% average VoLTE share

*In 800, 900, 1,800 or 2,100 MHz frequency bands

base stations % average data

• n-net share

8

Customer-friendly products/services launched in Q2 2019

ice junior

▪ Strengthens position in attractive high-ARPU family segment ▪ Long-term contributor to ARPU growth ▪ Well received by customers

HD voice

▪ Available to all ice customers ▪ First operator in Norway to introduce HD voice when calling customers at other operators:

▪ Telia (100% of customers) ▪ Telenor (~40% of customers)

Financials

Henning Karlsrud

Chief financial officer

9

Agenda

Introduction

Eivind Helgaker

Chief executive officer

Summary &

• utlook

Eivind Helgaker

Chief executive officer

1 2 3

Q1 18 Q2 18 Q3 18 Q4 18 Q1 19* Q2 19*

• 50%
• 40%
• 30%
• 20%
• 10%

0%

• 100
• 90
• 80
• 70
• 60
• 50
• 40
• 30
• 20
• 10

EBITDA** Margin % 50 100 150 200 250 300 350 400 450 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19* Q2 19* Total service revenues Smartphone service revenues

10

Service revenues and EBITDA

394

Service revenues*

319

mnok smartphone service revenues

EBITDA**

• 46
• 11 % in Q2 2019

mnok total service revenues mnok in Q2 2019

*Numbers from the divested Swedish operation are included in the 2018 figures for Total service revenues and EBITDA, while only two for months in 2019. **Ice Group defines EBITDA as operating profit after adjustment of operating expenses for depreciation, amortisation, impairment network upgrades, share based compensation expense, non-recurring and other non-operational items. Any effects from business combinations are not included. For details, see the section on Alternative Performance Measures and definitions

50 100 150 200 250 300 350 400 450 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19* Q2 19* Smartphone service revenues Total service revenues continuing operations (NO+DK) Total service revenues

11

Income statement*

mnok Q2 2019 Q2 2018 H1 2019 H1 2018 FY 2018

Service revenue 394 383 769 744 1,539 Other operating revenue 27 21 109 42 121 Total operating revenue 421 404 879 786 1,660 National roaming expenses

• 109
• 113
• 206
• 230
• 434

Other operating expenses

• 378
• 341
• 784
• 698
• 1,461

Depreciation and amortisation

• 116
• 104
• 218
• 208
• 465

Operating result (EBIT)

• 182
• 154
• 330
• 350
• 701

Net financial income/expenses

• 115
• 42
• 244
• 154
• 352

Profit/loss before tax

• 298
• 196
• 574
• 504
• 1,052

Income taxes 1

• 1
• 3
• 8

Net result from continuing operations

• 297
• 196
• 573
• 506
• 1,060

Net result from discontinued operations

• 302
• 294
• 171

Net result for the period

• 297

162

• 573
• 213
• 1,231

EBITDA**

• 46
• 35
• 111
• 123
• 180

Earnings per share (NOK)

• Basic from continuing operations
• 1.68
• 2.45
• 2.84
• 4.00
• 8.37
• Diluted from continuing operations
• 1.66
• 2.39
• 2.80
• 3.89
• 8.23

*Numbers from the divested Swedish operation are included in the 2018 figures, while only for two months in 2019. **Ice Group defines EBITDA as operating profit after adjustment of operating expenses for depreciation, amortisation, impairment network upgrades, share based compensation expense, non-recurring and other non-

• perational items. Any effects from business combinations

are not included. For details, see the section on Alternative Performance Measures and definitions.

12

The increasing on-net share driving the declining trend in NRA costs despite growth in subscribers and data consumption

20 40 60 80 100 120 140 100 200 300 400 500 600 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

• Avg. data on-net share

Smartphone subscriptions NRA expenses

Smartphone subscriptions (thousand) NRA cost (mnok)

• Avg. data on-net share (%)

NRA cost development vs on-net share / # of subscriptions

13

Balance sheet*

mnok 30.06.2019 30.06.2018 31.12.2018 ASSETS Intangible assets 1,700 2,646 1,344 Tangible assets 2,249 2,671 2,603 Other non-current assets 331 494 335 Deferred tax assets

• 1

Total non-current assets 4,280 5,812 4,282 Inventory 6 45 20 Trade receivables 130 102 127 Other receivables 21 112 31 Prepaid expenses and accrued income 32 64 63 Cash and cash equivalents 1,164 775 275 Total current assets 1,353 1,097 516 TOTAL ASSETS 5,633 6,918 4,799 mnok 30.06.2019 30.06.2018 31.12.2018 EQUITY AND LIABILITIES Equity attributable to parent company shareholders

• 314

531

• 1,258

Equity attributable to non-controlling interests

• 448

TOTAL EQUITY

• 314

979

• 1,258

Borrowings 3,604 3,020 3,672 Non-current liabilities 1,522 1,608 1,625 Provisions for deferred tax 8 322 10 Total non-current liabilities 5,135 4,951 5,307 Trade payables 232 300 242 Current lease liabilities 62 64 66 Other liabilities 20 79 20 Accrued expenses & deferred income 498 515 421 Total current liabilities 812 987 750 TOTAL LIABILITIES 5,947 5,938 6,057 TOTAL EQUITY AND LIABILITIES 5,633 6,918 4,799

*Numbers from the divested Swedish operation are included in the 2018 figures.

14

Cash flow*

mnok Q2 2019 Q2 2018 H1 2019 H1 2018 FY 2018

Cash flow before changes in working capital

• 79
• 59
• 110
• 171
• 202

Cash flow from changes in working capital 222 103 38 29

• 55

…from costs to obtain/fulfil customer contracts

• 67
• 72
• 105
• 118
• 187

…from discontinued operations

• 59
• 54

55 Net cash flow from operating activities 76 31

• 177
• 206
• 389

Cash flow from investing activities

• 307
• 122
• 434
• 262
• 460

…from divestment of Sweden

• 166
• …from divestment of Nextel Brazil
• 563
• 563

563 …from discontinued operations

• 173
• 72
• 72

Net cash flow from investing activities

• 307

268

• 268

229 31 Cash flow from financing activities

• 100
• 31

1,335

• 62
• 144

…from discontinued operations

• 75
• 67
• 106

Net cash flow from financing activities

• 100

44 1,335

• 129
• 250

Net change in cash and bank deposits

• 331

342 890

• 106
• 607

*Numbers from the divested Swedish operation are included in the 2018 figures, while only two for months in 2019.

15

IFRS 16 impact

NOK million

Reported Change IFRS 16 Restated Reported Change IFRS 16 Restated Reported Change IFRS 16 Restated

Statement of financial positions Closing balance H1 2018 Closing balance FY 2018 Opening balance 2018 Total assets 5,438 1,479 6,918 3,279 1,520 4,799 5,655 1,593 7,248 Equity 1,225

• 246

979

• 992
• 266
• 1,258

1,358

• 241

1,117 Liabilities 5,438 1,479 6,918 3,279 1,520 4,799 5,655 1,593 7,248 Statement of income Q2 2018 H1 2018 Full-year 2018 Total revenue 404

• 404

786

• 786

1,660

• 1,660

Total operating expenses

• 506

52

• 454
• 1,032

104

• 928
• 2,103

208

• 1,895

Depreciation, amortisation

• 80
• 24
• 104
• 160
• 48
• 208
• 369
• 96
• 465

Operating result

• 181

28

• 154
• 406

56

• 350
• 813

112

• 701

Net financial items, tax

• 8
• 35
• 42
• 87
• 70
• 157
• 213
• 139
• 352

Net result, continuing operations

• 190
• 7
• 196
• 492
• 14
• 506
• 1,033
• 27
• 1,060

EBITDA

• 87

52

• 35
• 227

104

• 123
• 388

208

• 180

16

Company has worked to reduce capital requirements since the delayed IPO in December 2018

~350 mnok ▪ Savings on associated transaction costs + deferral of loan payments as offering was conducted with Oslo Axess listing 180 msek ▪ Divestment of Swedish operation TBC ▪ Fewer base stations required to reach 95% population coverage as result of 700 MHz auction plus postponement of least profitable sites ~300 mnok ▪ 700 MHz frequency auction: postponed payment of 90 percent of final assignment price until 1 November 2021 Ice Group’s BoD and executive management currently exploring a broad range of options

• n how to cover the company’s remaining financing requirements

Financials

Henning Karlsrud

Chief financial officer

17

Agenda

Introduction

Eivind Helgaker

Chief executive officer

Summary &

• utlook

Eivind Helgaker

Chief executive officer

1 2 3

18 18

Our path to medium-term and long-term value creation

>20% subscriber share1 >25% ~NOK300 ARPU1,2 2.5% p.a. LT growth mid 30s % EBITDA margin mid 40s % ~10% capex / sales ~10%

Our 4 medium-term and long-term targets

Source: Company information (1) Target for smartphone subscriptions in Norway (2) Average Revenue Per User

MT LT

Guidance & outlook

▪ Smartphone network build-out key to Ice Group’s business plan:

▪ On track to introduce between 400 and 600 new base stations by the end of 2019 ▪ By the end of 2020: objective is to have increased the total amount by between 1,500 and 2,000 live base stations from 1 January 2019 onwards

▪ NRA cost in 2019 of approximately NOK 400

• 450 million

▪ Capital expenditure of NOK 700-800 million in 2019, excluding the delayed payment on the 700 / 2100 MHz frequency acquisition (equal to NOK 303 million) ▪ Expect continued smartphone subscription growth in coming quarters

19

Summary Q2 2019

▪ Significantly strengthened long-term frequency portfolio ▪ Strong growth in smartphone customer base and service revenues ▪ Successful Oslo Axess listing ▪ On track to realise 3rd nationwide smartphone network and to create a more consumer-friendly telecom market in Norway

20

21

Disclaimer

By reading this company presentation (the “Presentation”), or attending any meeting or oral presentation held in relation thereto, you (the “Recipient”) agree to be bound by the following terms, conditions and limitations. The Presentation has been produced by Ice Group ASA (the “Company”) for information purposes only and does not in itself constitute, and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction. The distribution of this Presentation may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction. The Recipient acknowledge that it will be solely responsible for its own assessment of the Company, the market and the market position of the Company and that it will conduct its

• wn analysis and be solely responsible for forming its own view of the potential future performance of the Company’s business. The Company shall not have any liability whatsoever

(in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its contents, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation, or violation of distribution restrictions. An investment in the Company involves significant risk, and several factors could adversely affect the business, legal or financial position of the Company or the value of its securities. For a description of relevant risk factors we refer to the Company’s annual report for 2018 and the prospectus dated 16 May 2019, available on the Company’s website www.icegroup.com. Should one or more of these or other risks and uncertainties materialize, actual results may vary significantly from those described in this Presentation. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment. This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Company and the industry in which it

• perates. Any forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely
• pinions and forecasts and are subject to risks, uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by

the forward-looking statements. The Company cannot provide any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments. This Presentation speaks as at the date set out on herein. Neither the delivery of this Presentation nor any further discussions of the Company shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not assume any obligation to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation (including in relation to forward-looking statements). This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.