Eiríkur S. Jóhannsson Gunnar Smári Egilsson Viðar Þorkelsson Interim financial statement of Og fjarskipta hf. Second quarter of 2005 Eiríkur S. Jóhannsson Gunnar Smári Egilsson Viðar Þorkelsson
Agenda Consolidated financial overview An interim consolidated financial statement June 30th, 2005 Analysis of each entity of the corporation by sector – telecommunication and media Principal tasks for Og Vodafone - the telecommuncation sector Principal tasks for 365 - media - the media sector Reorganization – a new organization chart Updated forecast for 2005 and the future
Consolidated financial overview – 1H 2005 Profit before income tax ISK 401 mill. Net profit ISK 321 mill. Consolidated EBITDA of ISK 1.480 mill. or 21,1% of total revenues Sales of ISK 7.011 mill. Growth in sales of 113% from 1H 2004 By including revenues from the media sector in 1H 2004 then the growth in sales is ISK 1.085 mill or 18% Cash from operations excluding interest is ISK 1.247 mill Investments in fixed assets is ISK 563 mill Financial outcome is in accord with budget
Consolidated financial statement June 30th, 2005
Consolidated Income statement Growth in Income Revenues increase by 113% between 1H04 and 1H05 18% increase when the media sector is taken into account in H1 2004 Cost of services sold An increase of 130% Contribution margin The contribution margin is 39% the first 6 months of 2005 compared to 44% the first 6 months of 2004. Operating expenses An increase of 97% In thousands ISK 6 months 2005 6 months 2004 Variance Sales 7.010.716 3.288.496 3.722.220 Cost of services sold -4.242.059 -1.839.826 -2.402.233 Contribution margin 2.768.657 1.448.670 1.319.987 Other operating revenues 48.862 77.524 -28.662 Operating expenses -2.059.002 -1.042.874 -1.016.128 Operating income (-loss) 758.517 483.320 275.197 Financial income (– expense) -326.118 -212.867 -113.251 Share of loss of affiliated companies -31.532 Profit (-loss) before income tax 400.867 270.453 130.414 Income tax -79.604 -48.682 -30.922 Net profit (-loss) 321.263 221.771 99.492
Consolidated Balance Sheet In thousands ISK 30.06.05 31.12.04 Variance Assets Fixed assets 17.404.643 17.485.435 -80.792 Current assets 3.849.695 3.365.216 484.479 Accounts receivable 1.477.923 1.478.728 -805 Non- entered services 438.723 349.390 89.333 Total assets 21.254.338 20.850.651 403.687 Fixed assets Decrease slightly due to the depreciation of fixed assets Accounts Receivable No changes between periods
Consolidated Balance Sheet Stockholders´ equity Increases due to increase in retained earnings Current liablities Have decreased since the refinancing was concluded in the beginning of 2005 Interest bearing debt less cash and cash equivalent Amounts to ISK 8.925 mill. Current Ratio 0,92 and has increased from year-end 2004 when it was 0,66 In thousands ISK 30.06.05 31.12.04 Variance Liablilities and Stockholders´ Equity Stockholders´ equity 7.890.839 7.562.531 328.308 Liabilities Long term liabilities 9.194.476 8.160.250 1.034.226 Current liabilities 4.169.023 5.127.870 -958.847 Total Liabilities 13.363.499 13.288.120 75.379 TOTAL LIABILITIES AND STOCKHOLDERS´ EQUITY 21.254.338 20.850.651 403.687
Consolidated Cash Flow In thousands ISK 6 months 2005 6 months 2004 Net earnings (-loss) according to Income Statement 758.517 483.320 Adjustments for non-cash items Depreciation / amortization 721.130 505.418 Gain on the sale of fixed assets -40.669 -66.082 Changes in operating assets and liabilities -192.328 -233.164 CASH PROVIDED FROM OPERATION EXCLUDING FINANCIAL ITEMS 1.246.650 689.492 Received interest revenues 86.028 38.238 Paid interest expense -499.908 -145.329 NET CASH PROVIDED FROM OPERATION 832.770 582.401 INVESTING ACTIVITIES -1.044.480 -292.394 FINANCING ACTIVITIES 357.216 35.676 Cash and cash equivalent at the end of the period 311.987 448.831 CASH PROVIDED FROM OPERATIONS Amounted to ISK 1.247 mill or an increase of ISK 557 mill between years INVESTMENT ACTIVITIES Investments in fixed assets of ISK 563 mill. Investments in intangibles are ISK 93 mill.of which ISK 68 mill are due to vegna licensing
Sales itemized by services H1 2005
EBITDA - consolidated Irregular revenues and cost are exempt in this presentation. EBITDA grows by 64% from Q2 2004 to Q2 2005 528
Net profits – devlopment in million ISK
Segment reporting – H1 2005 Og Vodafone 365 media Elimination Consolidated Sales 3.763.788 3.307.679 -60.751 7.010.716 Cost of services sold -2.080.184 -2.161.875 -4.242.059 Contribution margin 1.683.604 1.145.804 2.768.657 Other operating revenue 48.489 373 48.862 Operating expenses -1.207.498 -912.255 60.751 -2.059.002 Operating profit before inerests and taxes (EBIT) 524.595 233.922 758.517
Og Vodafone Telecommunication sector
Overview Telecommunication Sales are recorded at ISK 3.764 mill. in H1 2005 A 14,5% increase in sales from H1 2004 or ISK 464 mill. EBITDA in H1 2005 is ISK 1.027 mill. and increases by 19% for the same period last year EBITDA ratio is 27% of total revenues in H1 2005 compared to 26% in H1 2004 Investments in fixed assets is ISK 382 mill. Sales are recorded at ISK 1.946 mill. in Q2 2005 A 14,5% increase in sales from Q2 2004 or ISK 246 mill. EBITDA in Q2 2005 er 526 mill. and increases by 14,6% from Q2 2004 EBITDA ratio is 26,7% of total revenues in Q2 2005 compared to 26,9% in Q2 2004
Sales itemized by services - H1 2005
Quarterly revenues itemized by services – Og Vodafone Mobile 11% increase Fixed line -0,1% decrease Data transfer 50% increase
Cost of services sold – as percentage of sales
Contribution margin – as percentage of sales
Operating expenses – as percentage of sales
Salaries and related expenses* - as a percentage of sales * Irregular one-time expense is exluded in Q3 2004
EBITDA – as a percentage of total revenues Note Irregular revenues and costs are excluded in this presentation of EBITDA. EBITDA EBITDA decreases slightly between years or from 26,9% in Q2 2004 to 26,7% in Q2 2005. 459 m.kr. 526 m.kr. 459 m.kr.
365 media The media sector
Overview Media Total sales in H1 2005 were ISK 3.308 mill. Increase in revenues is 25,5% from H1 2004 to H1 2005 Print 49% Broadcasting 13% EBITDA H1 2005 is ISK 453 mill. EBITDA ratio in H1 2005 was 14% Investments in fixed assets is ISK 181 mill in H1 2005 Total sales in Q2 2005 were ISK 1.688 mill. and increased by ISK 356 mill. from Q2 2004 or 27% EBITDA in Q2 2005 was ISK 226 mill. but was ISK 227 in Q1 EBITDA ratio in Q2 2005 was 13,7% but was 14,2% in Q1 2005
365 broadcasting – sales trendline Growth in sales An increase of 13% Q2 2005 and Q2 2004
365 print – sales trendline Growth in sales An increase of 49% Q2 2005 and Q2 2004
Cost of services sold – as a percentage of sales
Contribution margin – as a percentage of sales
Operating expenses – as a percentage of sales
EBITDA – as a percentage of total revenues Note Irregular revenues and cost are excluded in this presentation of EBITDA. EBITDA EBITDA remains constant between quarters, 1Q05 vs 2Q05
Main projects in Q2 – 2005 Media New financial weekly periodical – “Markaðurinn” (the market) WebTV Sirkus – new “concept” for media Re-organization of the news department in broadcasting New News channel The acquisition of the production company Saga Film
Main projects in Q2 – 2005 Og Vodafone The acquisition of P/F Kall in the Faroe Islands Marketing of a new comprehensive service Og1 New data network – Metro net in cooperation with OR “Mobile Connect Card” from Vodafone Group a data card for laptops Implementation of a new prepaid system Continuous build up of the mobile network GPRS national roaming agreement with Síminn Additional international roaming agreements – f.ex. Camel agreements Upgrading of the ADSL network
Organizational changes
Dagsbrún hf. Dagsbrún will own and operate entities that compete in the telecommunication, news and entertainment sectors The parent company will put more emphasis on expansion and growth both domestically and abroad Dagsbrún aims to be an international telecommunication and media corporation The company aims to double its operational activities in the next 18-24 months Finance and financing activities will be carried out in the parent company servicing the subsidiaries The new organizational chart is intended to add value for shareholders, customers and employees
Financial forecast and the future
Updated forecasted financial outcome 2005 Consolidated Turnover for 2005 has been updated and is predicted to be ISK 14.500 – 14.600 mill. EBITDA for the year 2005 is expected to fall in the range ISK 3.000 to 3.100 mill. An additional investment in a new data network (EDGE) is planned ISK 250 mill. The company aims to double its operational activities in the next 18-24 months