Download - Q4/Annual Results 2003
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Press ConferenceFebruary 19th 2004Oslo Børs 1
Q4/Annual Results 2003
abc
Press ConferenceFebruary 19th 2004Oslo Børs 2
Q4/Annual Results 2003
Olav StokkeCEO
3 Press ConferenceFebruary 19th 2004Oslo Børs
Highlights Q4 2003 / FY 2003
• Strong growth compared to 2002– 102 % organic growth in revenue– 81 % growth in lines in operation– Strong improvements in gross margin,
54.1 % in Q4 2003.– Strong improvement in EBITDA, 18.1 %
EBITDA ratio in Q4 2003.
• Financially strengthened as part of the IPO-process 19th December
• The Company continues its progress towards positive EBIT.
• Strong player in the Norwegian broadband market, both for residential and corporate customers.– Sustained #2 market position (broadband no. of
lines)
4 Press ConferenceFebruary 19th 2004Oslo Børs
Results 2003 (mNOK)
Q4-03 Q4-02 2003 2002
Revenue 89.4 51.4 297.5 147.5
Growth (YoY) 74% 102%
Gross Margin 54.1% 48.6% 52.4% 47.9%
EBITDA 16.1 1.7 50.4 -29.1
EBIT -8.9 -11.9 -40.8 -76.6
EBT -18.6 -18.7 -76.1 -97.6
ARPU(subscription only)
405 445 418 447
Customers(New/Total)
8,300 (N)
9,100(N)
63,300(T)
35,000(T)
Market share vs. Telenor
26.3% 27.1%
5 Press ConferenceFebruary 19th 2004Oslo Børs
Balance Sheet significantly strengthened• Moderate growth in fixed assets• Current assets increased
– Financially strengthened due to IPO– Free cash at year end was mNOK 80.– Continuous improvements in DSO (22 days at year-end)
• Long term debt reduced as instalments exceeds new loans.• Net growth in current liabilities due to growth in accruals of
income– Significant reduction in trade payables.
• Equity ratio of 36 %.
Balance sheetAll figures in NOK 1.000 2003 2002
ASSETS
Total fixed assets 436 023 397 638Total current assets 140 973 46 301
Total assets 576 996 443 939
EQUITY AND LIABILITIESTotal equity 207 410 87 612Total non-current liabilities 220 543 234 801Total current liabilities 149 043 121 526
Total equity and liabilities 576 996 443 939
6 Press ConferenceFebruary 19th 2004Oslo Børs
Financing / covenants per February 2004
• NextGenTel has financial covenants related to the balance sheet and performance. The financial covenants are:– Interest bearing debt less free cash divided on 2004 EBITDA less
than 3 (measured at 31.12 2004)– Minimum equity ratio of 27.5% (CSFI 25%) to be measured at
June 30th and Dec. 31st
– Minimum cash balance of mNOK 17 (CSFI only) – Covenants to be measured at Group level
• In NextGenTel’s view the current covenants will not limit the company’s business opportunities/options.
• Current available unused loan/lease frames for long term financing is mNOK 115. In addition there is an available free cash position and a credit line of approximately mNOK 100.
7 Press ConferenceFebruary 19th 2004Oslo Børs
Trade receivables, customer payments and DSO
• Effective management of debtors– High degree of
automation
• Trade receivables growing slower than the increase in revenue– improving cash flow
from operations
• Recurring Business– customer payments
increasing month by month
• Marginal losses on receivables
Monthly payments from customers - status pr December 31st 2003
-
5 000 000
10 000 000
15 000 000
20 000 000
25 000 000
30 000 000
35 000 000
40 000 000
Jan
uar
y 20
03
Feb
ruar
y20
03
Mar
ch 2
003
Ap
ril 2
003
May
200
3
Jun
e 20
03
July
200
3
Au
gu
st 2
003
Sep
tem
ber
2003
Oct
ob
er20
03
No
vem
ber
2003
Dec
emb
er20
03
NO
K
0
5000
10000
15000
20000
25000
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35000
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# o
f p
aym
ents
rec
eive
d
NOK # payments
Days of Sales Outstanding (DSO) and Trade Receivables
0
10
20
30
40
50
60
70
2002
.01
2002
.06
2002
.11
2002
.16
2002
.21
2002
.26
2002
.31
2002
.36
2002
.41
2002
.46
2002
.51
2003
.04
2003
.09
2003
.14
2003
.19
2003
.24
2003
.29
2003
.34
2003
.39
2003
.44
2003
.49
050001000015000200002500030000350004000045000Receivables DSO
8 Press ConferenceFebruary 19th 2004Oslo Børs
Cash-flow / Investments 2003
• Investments reduced compared to 2002– mNOK 100,8 invested in 2003 vs. mNOK 238,2 in 2002.
• Long term loans reduced in 2003. – Instalments on loans mNOK 93,6 in 2003– New loans in 2003 of MNOK 79,3 compared to new loans in 2002 of mNOK 204,9.
• Simplified cash flow: (Cash Flow = EBITDA – CapEx)– mNOK -50,4 for 2003 – mNOK –11,9 for Q4-2003.
Cash flow statementAll figures in NOK 1.000 Q4 2003 Q4 2002 2003 2002
Ordinary profit before tax (18 615) (18 731) (76 105) (97 647)
Ordinary depreciation and amortizations 25 090 13 614 91 207 47 460 Changes in receivables (6 900) (3 630) (18 778) (14 831) Changes in short term debt (35 514) 27 180 (40 043) 61 569 **Other changes to cash flow 11 374 (12 276) 52 345 4 194 Net cash flow from operating activities (24 565) 6 157 8 626 745
Net cash flow from investing activities (28 009) (85 614) (100 834) (238 152)
Net cash flow from financial activities 130 622 72 677 169 353 235 305
Netto kontantstrøm / Net cash flow 78 048 (6 780) 77 145 (2 102)
Cash at position at end of period 80 152 3 007 80 152 3 007
9 Press ConferenceFebruary 19th 2004Oslo Børs
Scalability development
Monthly ARPU vs. Cost elements per subscriber
(50)
150
350
550
750
950
1 150
1 350
1 550
1 750
Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003
NO
K p
er
su
bs
cri
be
r p
r. m
on
tn
Net financial items
Depreciation andamortisation
Other operatingexpenses
Salaries andpersonnel expenses
Copper, Fibre,Access, LEO etc
TAC ( 12 monthaverage SALE)
TAC ( 12 monthaverage INST)
ARPU Real
10 Press ConferenceFebruary 19th 2004Oslo Børs
Market growth/share vs. Telenor
• Seasonal market development
• Steady market share vs. Telenor 26-27%
• Overall broadband (all technologies) market share of 18 % (July 2003, according to NPT)
• xDSL is the fastest growing broadband technology
NextGenTel lines in operation
0
10000
20000
30000
40000
50000
60000
70000
# of lines
Market share Telenor vs NextGenTel
0 %
20 %
40 %
60 %
80 %
100 %
Q1
2001
Q2
2001
Q3
2001
Q4
2001
Q1
2002
Q2
2002
Q3
2002
Q4
2002
Q1
2003
Q2
2003
Q3
2003
Q4
2003
NextGenTel
Telenor
Quarterly growth, lines in operation NextGenTel
0
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Q1 Q2 Q3 Q4
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2003
11 Press ConferenceFebruary 19th 2004Oslo Børs
2003 final comments• Well positioned in a
fast growing strong mass market
• Recurring revenue
• Stable ARPU
• Growing Margin– Economics of scale– Scalable business model
• Reduced depreciation per line due to reduced marginal investments
• High financial costs– to be reduced due to
strengthened balance sheet and reduced interest rates
Total Operating quarterly revenues 2001- 2003
-
10 000 000
20 000 000
30 000 000
40 000 000
50 000 000
60 000 000
70 000 000
80 000 000
90 000 000
100 000 000
Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03
Revenue, 12 months running avg. revenue
3 104 264
3 732 443
4 482 339
5 159 968
5 844 491
6 637 967
7 429 968
8 229 042
9 139 083
10 143 242
11 195 712
12 292 435
13 206 308
14 195 275
15 246 517
16 307 944
17 517 344
18 601 401
19 616 269
20 685 455
21 754 393
22 739 942
23 836 028
24 908 875
- 5 000000
10 000000
15 000000
20 000000
25 000000
30 000000
2002.01
2002.03
2002.05
2002.07
2002.09
2002.11
2003.01
2003.03
2003.05
2003.07
2003.09
2003.11
Total Gross Margin 2001- 2003
(10 000 000)
-
10 000 000
20 000 000
30 000 000
40 000 000
50 000 000
60 000 000
Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03
Total quarterly EBITDA 2001- 2003
(35 000 000)
(30 000 000)
(25 000 000)
(20 000 000)
(15 000 000)
(10 000 000)
(5 000 000)
-
5 000 000
10 000 000
15 000 000
20 000 000
Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03
12 Press ConferenceFebruary 19th 2004Oslo Børs
Largest shareholders registered per February 16th 2004
• 20 largest shareholders hold 82.5 %• 2 largest shareholders hold 47.17 %• Currently 496 shareholders, reduced from 865 at December 19th
2003.
First name Shareholder Shares Ownership1 GEOCAPITAL (5 entities) 6 363 164 25,76 %2 NORTHZONE (3 entities) 5 287 237 21,41 %3 BOREA AS 1 941 254 7,86 %4 VITAL FORSIKRING ASA 1 273 042 5,15 %5 NORDEA LIV ASA 544 277 2,20 %6 TV 2 INVEST AS 533 161 2,16 %7 DELPHI NORGE 473 500 1,92 %8 FRITZ T RIEBER 405 960 1,64 %9 PRISM CAPITAL 5, LP 386 000 1,56 %
10 STOREBRAND LIVSFORSIKRING AS 352 000 1,43 %11 OLAV STOKKE 348 890 1,41 %12 LARS ERIK LARSSEN 327 904 1,33 %13 VIKERUD VENTURE AS 317 268 1,28 %14 ODD K. HØYDALSVIK 298 799 1,21 %15 BJØRN NILSEN 298 799 1,21 %16 MORTEN ÅGNES 298 799 1,21 %17 LGT CAPITAL INVEST LTD 264 630 1,07 %18 AKSJEFONDET NORDEA VEKST 253 795 1,03 %19 NGT MANAGEMENT INVEST AS 204 157 0,83 %20 NGT MANAGEMENT INVEST II AS 201 466 0,82 %
20 largest 20 374 102 82,49 %Total number of shares 24 700 000 100 %Total number of shareholders 496
abc
Press ConferenceFebruary 19th 2004Oslo Børs 13
2004
14 Press ConferenceFebruary 19th 2004Oslo Børs
2004 status
• 66,000 total subscriber lines per end January 2004– 2,700 net new subscriber lines in January
• Strengthened financial position– Additional/new financing frames
• Marginal investments per new subscriber line dropping significantly to a level below NOK 1,000 per line (previously disclosed approx. 1,600 per line in the Prospectus)
• More focus on wireless solutions in the residential market
• Reduced prices on the high bandwidth products creating more interest for bandwidth consuming content from e.g. NRK and TV2
15 Press ConferenceFebruary 19th 2004Oslo Børs
Market assumptions and expectations
• Approx. 290,000 DSL subscriber lines per December 31st 2003 (assessed from Telenor figures)
• Approx. 140,000 new lines in 2003 (97% DSL growth)
• Gallup research (Dec. 2003 for NextGenTel) shows a potential of approx. 150,000 new lines next 6 months …
• NextGenTel assumes between 175,000 and 225,000 new lines (DSL) in total in 2004
0
100000
200000
300000
400000
500000
600000
1999 2000 2001 2002 2003(est.)
2004(est.)
WLL/WLAN
Fixed access
Cable
xDSL
Do you plan to install broadband the next six months?
0 10 20 30 40 50 60 70
Not decided
No
Yes
Already on
% Respondents
16 Press ConferenceFebruary 19th 2004Oslo Børs
2004 Strategic Focus
• Steady continuous improvements towards profitability
– Maintain and increase scalability– Aim to reduce overall size of balance
during the year
• Further sustain the #2 market position• Grow the position in the SME segment
– VDSL– Efficient, scaleable and automated hosting services
• Continue focus on market leading and competitive high bandwidth solutions and content
• Launch commercial public telephony services (based on IP)
– Increase ARPU
• Improve Customer Services (modern CallCentre put in operation in January 2004)
17 Press ConferenceFebruary 19th 2004Oslo Børs
Q & A session