Com Hem reports fourth quarter and full year results 2015

Fourth quarter summary 2015

• Revenue totalled SEK 1,271m (LY 1,229), up 3.4 per cent.
• Underlying EBITDA increased by 3.3 per cent to SEK 595m.
• Operating free cash flow increased by 42.4 per cent reaching SEK 336m (236) as a result of improved Underlying EBITDA and lower investments compared to last year.
• Net result for the period improved to negative SEK 41m (negative 164) including one off costs of SEK 97m (377) related to refinancing activities. Excluding these one off costs net result for the period was positive SEK 56m.
• Earnings per share improved to negative SEK 0.21 (negative 0.79).
• Our consumer growth continues steadily:
         -The number of unique consumer subscribers rose 8,000 to a total of  911,000.
         -The record-low churn rate of 12.9 per cent remained at the same level as in the third quarter.
         -Continued volume growth in broadband, up 11,000 to 658,000 RGUs.
         -Growth in digital TV remained stable, and rose 4,000 to 635,000 RGUs.
         -The number of TiVo customers rose slightly more than 10,000 to 224,000 (a penetration rate of 35 per cent).
• In November Com Hem redeemed its 187 MEUR Notes which is expected to save the company more than SEK 100m in annual interest expenses.
• During the fourth quarter, Com Hem repurchased 1.9 per cent of the total number of shares, for SEK 294m.

Full year summary 2015
• Revenue increased by 5.0 per cent to SEK 5,000m (4,761) for the full year, of which 3.6 per cent was organic growth.
• Underlying EBITDA increased by 3.7 per cent totalling SEK 2,346m.
• Operating free cash flow increased by 11.8 per cent to SEK 1,355m (1,211).
• Net profit for the year increased to SEK 92m (negative 1,051), which equals SEK 0.45 (negative 6.67) per share. The exceptional improvement is explained by both higher operating profit and significantly lower net financial expenses.
• During the period May to December, Com Hem remunerated shareholders through a cash dividend, share redemption and share repurchases totaling SEK 983m, representing 6.5 per cent of market capitalisation at 31 December.
• The Board of Directors proposes to the AGM in May a cash dividend of SEK 1.50 per share, an increase of 50 per cent (last year SEK 1), and a renewed mandate to repurchase up to 10 per cent of the share capital.

Comment from Anders Nilsson, CEO, Com Hem
Our final quarter of 2015 was another consistent quarter, with steady execution on our growth drivers delivering a sound foundation for the execution of our 2016 plan.

We grew our consumer base to a record of 911,000 unique subscribers, with net additions in broadband of 11,000 and net additions in digital TV of 4,000. Consumer churn remained at a record low level, unchanged from Q3 at 12.9 per cent. Consumer ARPU was flat at SEK 363 in advance of our 2016 price rise activity.

Demand for our high speed broadband continues to be strong, with more than 82 per cent of new subscribers in Q4 choosing speeds of 100 Mbit/s and above, a new high. This took average speed in the base up to 115 Mbit/s – also a new high. Our focus on broadband quality of service is paying off; we continue to lead both the Netflix speed index and the recently launched Google Video index. At the same time we outperform our competitors’ in the quality of wifi.
    TiVo attracted 10,000 new customers. TiVo customers are significantly more engaged in digital TV than the rest of the population, and we continue to promote the uptake of the exceptional range of features offered to Com Hem TV customers; a quarter after the launch of Com Hem Play, we have seen streaming uptake grow by 45 per cent and usage of TV Everywhere growing by 7 per cent.
    The focus in our B2B business continues to be on the transformation from an Off-Net legacy fixed telco business to the fast-growing On-Net business. B2B revenue grew by 4.1 per cent in the quarter.

We propose to continue to remunerate our shareholders through a mix of cash dividend and share buy backs. The Board of Directors is proposing to the AGM in May a cash dividend of SEK 1.50 per share, an increase of 50 per cent compared to last year, and a renewed mandate to repurchase up to 10 per cent of the share capital.
    For 2016, we reiterate our aim to grow revenue by mid-single-digits for the full year. With our changed growth profile, from volume driven to a balance between volume and price led growth, we are changing our guidance on Underlying EBITDA margin to be at a stable level compared to the 46.9 per cent we recorded in 2015. We expect CAPEX to be in the range of SEK 1.0-1.1bn in 2016 and our leverage target remains unchanged.
    The Com Hem team and I take substantial pride in our achievements in 2015, which have seen continued transformation in the quality of Com Hem’s customer experience, and of its product portfolio. As a consequence, we have been able to deliver strong shareholder returns; we look forward to the next phase of our growth in 2016 with confidence.

Notes to the editors:
You find the complete report with tables in the attached PDF or at:
http://www.comhemgroup.se/interimreport-q4-2015/

Conference Call on February 9
Management will host a conference call for the financial community at 10.00 am CET today. The presentation will be held in English and the presentation material can be accessed on www.comhemgroup.com. An on-demand version is also available after the presentation.

Please use the following dial-in numbers to participate:
Sweden: +46 8 5052 0110
UK: +44 20 7162 0077
USA: +1 334 323 6201

To ensure that you are connected to the conference call, please dial in a few minutes ahead of the conference call to register your attendance.

Other information
Com Hem Holding AB’s subsidiary NorCell Sweden Holding 2 AB (publ) is the reporting entity of the Senior Secured Notes. NorCell Sweden Holding 2 AB’s (publ) year-end report for 2015 is as of today also available on http://www.comhemgroup.se/en/investors/debt-financing/financial-reports-presentations/

For queries, please contact:
Investors:
Petra von Rohr, Director IR & Corporate Communications 
Tel: +46(0)734 39 06 54

Caroline Tivéus, IR-Manager
Tel: +46(0)734 39 08 67
Investor.relations@comhem.com

Media:
Fredrik Hallstan, Head of PR
Tel: +46(0)761 15 38 30
press@comhem.com

Com Hem Holding AB discloses the information provided herein pursuant to the Swedish Securities Markets Act (2007:528) and/or the Swedish Financial Instruments Trading Act (1991:980). The information was submitted for publication at 07.30 CET on February 9, 2016.

About Com Hem
Com Hem is one of Sweden’s leading suppliers of high-speed broadband, television and fixed-telephony. Approximately 40% of Sweden’s households are connected to Com Hem’s network, with access to the market’s broadest range of television services. Com Hem offers broadband speeds up to 500 Mbps to 2 million households which is more than any other operator. Since 2013 Com Hem has a competitive B2B-offer of broadband and telephony services. Com Hem was founded in 1983, has approximately 1,200 employees and its head office is in Stockholm. Operations are run through three subsidiaries; Com Hem AB, Phonera Företag AB and iTUX Communication AB. Com Hem’s shares are listed on Nasdaq Stockholm. For more information, visit: www.comhemgroup.com.

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