Bulletin
Revised Netia guidance for FY2009 and medium term outlook (28/2009)
The Management Board of Netia SA (hereinafter the “Company” or “Netia”) is today raising its guidance for Adjusted EBITDA (excluding one-off restructuring cost) for FY2009 from PLN 260 million to PLN 290 million. This update in the earnings outlook follows further strong progress on Company’s profitability in the first quarter.
Following extensive preparatory work over the past two quarters, the Management has now begun implementation of a comprehensive cost reduction project with the objective of eliminating PLN 100 million of operating expenses from the cost base for FY2010. One-off costs of reorganization associated with this project during FY2009 are expected to total up to PLN 25 million. Accordingly, EBITDA for FY 2009, net of reorganization expenses, is forecasted at PLN 265 million.
The following table presents the Company’s current estimates of all elements of the 2009 guidance in comparison to the guidance published previously (see Netia’s current report No. 8.2009 dated February 10, 2009):
| 2009 Guidance | Previous | Updated |
|---|---|---|
| Number of broadband service clients (excl. Ethernet acquisitions) | 525,000 | 525,000 |
| Number of voice service clients (own network and WLR) | 1,150,000 | 1,150,000 |
| Unbundled local loop (LLU) nodes | 300 | 300 |
Revenues (PLN m) | 1,520 | 1,520 |
| Adjusted EBITDA (PLN m) (excl. restructuring cost of PLN 25 m) | 260 | 290 |
EBITDA (PLN m) (incl. restructuring cost of PLN 25 m) | 260 | 265 |
Investment outlays (excl. M&A) (PLN m) | 260 | 260 |
Subscriber guidance does not include potential Ethernet network acquisitions, which remain important to Netia’s strategy, but are difficult to forecast in terms of timing and scale.
The implementation of a cost saving project during FY2009 had been factored into earlier medium term guidance. However, the project under implementation is more ambitious than provisionally planned by approximately PLN 40 million on an annualized basis. As a result, Netia is raising its medium term EBITDA margin guidance for FY2010 and FY2012 by 3 percentage points to 23% and 28%, respectively.
The following table presents the Company’s current estimates of all elements of the medium term outlook for Netia Group in comparison to the guidance published previously (see Netia’s current report No. 8.2009 dated February 10, 2009):
| Medium term outlook for 2010-2012 | Previous | Updated |
|---|---|---|
| Revenue growth (CAGR) | 5% - 10% | 5% - 10% |
| EBITDA margin in 2010 (%) EBITDA margin in 2012 (%) | 20% | 23% |
| Net profit by | 2010 | 2010 |
| Free cash flow positive by | 2010 | 2010 |
| Capex to sales down to 15% by | 2011 | 2011 |
| 1 million broadband subscribers | 2012 | 2012 |
Due to the fact that the 2009 Adjusted EBITDA guidance is being changed by more than 10% in comparison to the previous guidance (see Netia’s current report No. 8/2009 dated February 10, 2009), the Company publishes this report.
Netia announces that it will continue to monitor the possibilities of achieving the forecast results on a quarterly basis. The achievement of the forecast results will be assessed, and any necessary adjustments introduced, after the end of a given quarter of the financial year based on an analysis of sales revenues, investment expenditure, numbers of customers and any other factors it may consider relevant.
Disclaimer:
None of the information contained in this press release is a recommendation to purchase or sell financial instruments within the meaning of the Regulation of the Minister of Finance on information constituting recommendations regarding financial instruments or their issuers, dated 19 October 2005 (Polish Journal of Laws (Dz. U.) of 2005, No. 206, item 1715). For a more detailed description of the risks involved in investing in Netia’s securities, please see Netia’s 2007 annual financial report. Subject to the obligations referred to herein, Netia is not required to publicly update or revise any of its forecasts and assumptions of the strategic objectives.