DNA Ltd's Financial Statements release 2010

DNA GROWS NET SALES AGAIN

October-December: Net sales grew by 10 per cent

- DNA's net sales amounted to EUR 182.0 million (10-12/2009: 165.2 million). From 1 July onwards, net sales growth was fuelled by the Welho business's incorporation in particular.
- EBITDA totalled EUR 39.9 million, or 21.9 per cent of net sales (10-12/2009: EUR 49.0 million and 29.6 per cent). Excluding non-recurring items, EBITDA came to EUR 44.2 million (44.7 million). EBITDA and EBIT were affected by the total cost of the extensive renewal of the customer information system, actions in response to intensifying competition and a non-recurring provision recognised in December due to cooperation negotiations.
- EBIT improved to EUR 7.5 million (7-9/2009: -75.6 million). EBIT for the comparable period was affected by a non-recurring EUR 94.9 goodwill write-down on the fixed network. EBIT excluding non-recurring items decreased to EUR 11.8 million (10-12/2009: 15.0 million). Profit before tax was EUR 6.6 million (10-12/2009: -76.3 million).
- Cash flow after investments was EUR -2.7 million (10-12/2009: 14.3 million).

- The DNA mobile communication subscription base (including mobile broadband) grew in the last quarter of the year, reaching 2,108,000 in total (12/2009: 1,947,000 and 9/2010: 2,078,000).
- Revenue per user (ARPU*) for mobile communications amounted to EUR 21.4 (10-12/2009: 21.9 and 7-9/2010: 21.4).
- Intensifying competition increased the mobile communication subscription turnover rate (CHURN*) to 19.4 per cent (10-12/2009: 14.8 per cent and 7-9/2010: 16.3 per cent).
- At the end of December, DNA's fixed-line network had 1,060,000 telephone, broadband and cable TV subscriptions (12/2009: 647,000 and 9/2010: 1,059,000).
*figures include postpaid subscriptions only

January-December: Net sales grew by 6 per cent

- DNA's net sales amounted to EUR 690.5 million (1-12/2009: 652.2 million). This increase was due to strong demand for mobile communication services and the Welho business' incorporation into DNA as of 1 July.
- EBITDA increased to EUR 182.1 million, or 26.4 per cent of net sales (1-12/2009: 167.2 million and 25.6 per cent). EBITDA excluding non-recurring items increased to EUR 187.0 million (179.5 million).
- EBIT improved to EUR 65.2 million (1-12/2009: -43.8 million). EBIT for the comparable period was affected by a non-recurring EUR 94.9 goodwill write-down on the fixed network in the last quarter of 2009. EBIT excluding non-recurring items increased to EUR 70.2 million (1-12/2009: 63.4 million).
- Profit before tax was EUR 60.6 million (1-12/2009: -42.8 million).
- Cash flow after investments improved to EUR 71.8 million (1-12/2009: 52.5 million).

Riitta Tiuraniemi, President and CEO:

"Our growth remained strong."

In the last quarter of the year, our net sales grew by 10.2 per cent year-on-year, and our net sales for 2010 amounted to EUR 690.5 million (652.2 million).

EBITDA excluding non-recurring items in 2010 improved by 4.2 per cent and came to EUR 187.0 million, accounting for 27.1 per cent of net sales (27.5 per cent). EBIT excluding non-recurring items increased by 10.7 per cent to EUR 70.2 million. EBITDA excluding non-recurring items for the last quarter remained at last year's level. EBITDA and EBIT for the October-December period were burdened by the increase in material costs towards the end of the year, the total cost of extensively renewing the customer information system, actions necessitated by intensifying competition and a non-recurring provision recognised in December due to cooperation negotiations.

In October-December, our mobile communication subscription base grew by 30,000 on the previous quarter, reaching a total of 2,108,000 subscriptions. The year-on-year increase was 161,000 subscriptions. Intensifying competition clearly increased the subscription turnover rate (CHURN) in the last quarter, but revenue per user (ARPU) remained solid. Due to the Welho acquisition, the number of fixed-line subscriptions grew from last year.

Cash flow remained good, and our financial position was further strengthened: gearing decreased and our net debt/EBITDA ratio improved notably, coming to 0.56 (0.88).

The extensive renewal of our customer information system in October affected our performance in the second half of 2010, causing temporary service disruptions towards the end of the year. Having successfully migrated to the new system, we can now focus on serving our customers and taking advantage of the versatile system features. We also established new service centers in new locations during the second half of 2010. We will continue to make similar significant investments in customer relations in 2011.

At the end of the year, we announced the merger of DNA and the Welho business. The rationale behind the merger is to establish a nationwide broadband and television service offering, and to make use of synergy benefits. Due to the business restructuring, cooperative negotiations began with DNA and Welho staff on 3 January 2011.

We also launched terrestrial HDTV business operations in December. Pay-TV services will become available in the new network during this spring. DNA's terrestrial network business significantly increases the coverage of our TV network, making us a genuine nationwide TV operator. By the end of 2010, our HDTV broadcasting was available for two million Finns, and we will continue to expand the network.

At the turn of the year, we signed an agreement that brings 4G technology into our network. We will launch 4G commercial services in the largest cities during 2011. We have also invested in new product features in our core and trunk network. With these new technologies, we can not only improve the speed and quality of our mobile broadband products, but also move towards a product structure that is based on data transfer. This will open up new possibilities to improve our profitability further.

A key challenge in 2011 will arise in the change to the Telecommunications Act, entering into effect on 25 May 2011 and making number porting possible in fixed-term contracts. This will further increase competition between teleoperators. However, thanks to DNA's cost-effective operating model, we are well-equipped to respond.

The Group's financial position is expected to remain good in 2011, and net sales to grow, mainly due to the integration of the Welho business. EBITDA and EBIT excluding non-recurring items are estimated to remain at the same level as in 2010, or improve slightly.

Further information (from 11 am onwards):
Riitta Tiuraniemi, President and CEO, tel. +358 44 044 1000, riitta.tiuraniemi@dna.fi
Ilkka Pitkänen, Vice President, Corporate Finance & Administration, tel. +358 44 044 4001, ilkka.pitkanen@dna.fi
Minna Robertson, Financial Communications Manager, tel. +358 44 044 9877, minna.robertson@dna.fi

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APPENDIX: DNA's Financial Statements Release for 2010