DNA Ltd Interim Report January–September 2013. DNA’s net sales remained steady in the third quarter − PlusTV becomes part of DNA

• Fixed line subscription base (voice, broadband and cable television) decreased to 1,012,000 subscriptions at the end of the review period (1,038,000). The decrease is due to a drop in the number of fixed line voice subscriptions.

DNA’s outlook for 2013 has changed

Net sales is expected to decrease slightly and operating profit to weaken due to non-recurring items in 2013. The Group’s financial position is expected to remain at the same healthy level.

In the second quarter, net sales and operating profit were expected to decrease slightly in 2013. The Group’s financial position was expected to remain at the same healthy level.

Key figures

Figures are unaudited.

EUR million	7–9/2013	7–9/2012	Change, %	1–9/2013	1–9/2012	Change, %	1–12/2012
Net sales	191.5	189.2	1.2%	561.0	567.4	-1.1%	769.2
EBITDA***	48.8	53.0	-7.9%	143.9	141.1	2.0%	190.8
- % of net sales	25.5%	28.0%		25.7%	24.9%		24.8
Depreciation	36.8	33.3		108.4	96.9		134.6
Operating profit***	12.0	19.7	-38.9%	35.5	44.2	-19.8%	56.2
- % of net sales	6.3%	10.4%		6.3%	7.8%		7.3
Profit before tax	10.8	17.5		32.3	38.2		48.3
Profit for the financial period	7.5	12.7		23.3	28.8		36.1
Return on investment (ROI), %*	5.9	10.1		5.9	7.6		7.2
Return on equity (ROE), %*	5.9	9.9		6.0	6.7		6.3
Investments	31.7	34.2		87.9	93.3		136.3
Cash flow after investments**	-32.6	8.8		-25.4	21.5		28.9
Interest bearing net debt, EUR million	318.5	264.0		318.5	264.0		257.7
Interest bearing net debt/EBITDA	1.63	1.25		1.66	1.40		1.35
Net gearing, %	61.7	50.7		61.7	50.7		48.8
Equity ratio, %	51.3	54.1		51.3	54.1		54.0
Personnel at the end of period	1,530	1,426		1,530	1,426		1,427

* rolling 12 months
** includes business combinations and business transfers (Note 10)
*** non-recurring items,
Non-recurring items for the July–September 2013 period EUR 3.5 million
Non-recurring items for the January–September 2013 period EUR 4.3 million

CEO’s review

DNA’s net sales remained steady in the third quarter − PlusTV becomes part of DNA

Our business remained steady during the third quarter of 2013. Net sales increased slightly in particular due to the PlusTV acquisition. EBITDA decreased somewhat due to non-recurring items, but our operational profitability remained unchanged year-on-year. Investments were down slightly. Our financial position remained good and net gearing increased slightly.

All in all, our net sales for the January–September period remained unchanged year-on-year, despite the reduction in interconnection prices. Net sales were boosted mainly by the positive development of mobile broadband sales and the PlusTV acquisition. EBITDA increased slightly despite the non-recurring items. Our operating profit decreased due to increase in depreciations and non-recurring items. The overall economic situation is a challenge to our industry, causing both consumers and businesses to be more cautious with their spending.

In consumer business, mobile broadband sales in particular grew during the third quarter. The sales of fixed mobile broadband subscriptions also grew during the period. Corporate business remained sluggish in the third quarter because companies are reluctant to make investments due to the overall economic situation. Competition in the corporate market is expected to remain tight.

PlusTV becomes part of DNA

The Finnish Competition and Consumer Authority approved the acquisition of PlusTV on 29 August 2013 and PlusTV became a DNA subsidiary in September. As a result, DNA gained more than 200,000 new pay-TV customers. The acquisition strengthens the nationwide sales, marketing and R&D functions of DNA’s entertainment services. Pay-TV is an important business segment now and in the years to come, and DNA is a clear market leader.

New products and services

We introduced several new services and products to the market during the third quarter of 2013. In July, we launched the DNA Rajaton 4G subscription, the first mobile subscription in Finland that provides unlimited 4G data use and an unlimited number of calls, text messages and multimedia messages to any normal-priced domestic subscription for a fixed monthly fee. DNA Rajaton 4G is DNA’s answer to a shift in smart phone use, whereby new data-based services are increasingly important to consumers.

In August, DNA and Samsung launched a new kind of Samsung Experience Store in Helsinki city centre. The store showcases the latest Samsung mobile products and innovations to consumers. DNA provides subscription services for all the products available at the store.

As payment and consumer behaviour transform, DNA aims to use new technology to create solutions that make everyday life easier. On 1 October 2013, DNA launched DNA Täpäkkä Credit, a new contactless mobile payment method which utilises a phone sticker and allows no-PIN transactions. DNA Täpäkkä Credit is paving the way toward the future of mobile shopping, where traditional payment services are available directly from your mobile phone.

DNA’s 4G LTE network is available in more than 40 cities

We continue to expand our 3G and 4G networks all over Finland. Since the start of 2013, we have added more than 1,500 new base stations across Finland: about 1,000 to the 4G LTE network and some 500 to the 3G network. DNA’s 4G-grade speeds are currently available in more than 220 Finnish municipalities. DNA’s 4G LTE network is available in more than 40 cities and reaches over two million Finns.

In the quickly changing telecommunications business, DNA’s growth relies on our ability to create unique user experiences for our consumer and corporate customers, leading the way in creating innovations and investing in the speed and coverage of our network. Cooperation with dynamic and innovative partners is a key factor in this development.

Jukka Leinonen
Acting President and CEO

DNA’s financial publications in 2014:
7 February 2014 DNA Ltd’s Financial Statements 2013

25 April 2014 Interim Report January–March
18 July 2014 Interim Report January–June
24 October 2014 Interim Report January–September

Additional information:

Jukka Leinonen, Acting CEO, DNA Ltd, tel. +358 44 044 3533, jukka.leinonen@dna.fi
Timo Karppinen, CFO, DNA Ltd, tel. +358 44 044 5007, timo.karppinen@dna.fi

DNA Corporate Communications, tel. +358 44 044 8000, viestinta@dna.fi

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DNA Ltd Interim Report January-September 2013

DNA Ltd is a Finnish telecommunications company providing high-quality, state-of-the-art voice, data, and TV services to private customers and corporations. DNA’s 3G network reaches five million Finns and is constantly expanding, and the 4G networks are reaching new cities and urban areas all the time. In 2012, DNA recorded a turnover of EUR 769 million and an operating profit of EUR 56 million. DNA Ltd has more than 3 million mobile communications and fixed network customers. DNA and WELHO are registered trademarks of DNA Ltd. For more information, please visit www.dna.fi.