Com Hem reports fourth quarter and full year results 2014 - Strong growth in revenue and operating free cash flow

Fourth quarter summary

  · Revenue totaled SEK 1,229m (1,114), an increase of 10.4% over the fourth
quarter of 2013, representing organic growth of 4.3%.
  · Underlying EBITDA was SEK 576m (540), an increase of 6.6% over the fourth
quarter of 2013.
  · Operating free cash flow was SEK 236m (142), an increase of 66.1% over the
fourth quarter of 2013.
  · Net result for the period was SEK -164m (-422).
  · Earnings per share were SEK -0.79 (-4.22). Pro forma earnings per share[1]
were SEK 0.63 (-2.03).
  · Strong momentum in customer intake and churn reduction compared with the
third quarter 2014:
-    The unique consumer subscriber base grew by 16,000 to a total of 876,000
-    Churn improvement continued, declining from 14.8% to 14.2%
-    Continued strong volume growth in broadband, increasing by 17,000 to
612,000 RGUs
-    Growth in digital television continued, increasing by 10,000 to 618,000
RGUs
-    The number of TiVo customers grew by over 32,000 to 164,000 customers (27%
penetration)
-    The fixed-telephony subscriber base grew by 8,000 RGUs
  · The refinancing of the SEK 3,492 million Senior Secured Notes was completed
on November 12, resulting in additional cash interest savings of approximately
SEK 100 million per annum.
  · On February 10, the Board of Directors announced a proposed capital return
programme consisting of three parts:
-     A one-time share redemption programme of approximately SEK 500m
-     An annual share buy-back programme of up to SEK 1,000m
-     A dividend of SEK 1 per share
  · On February 10, it was announced that Mikael Larsson has been appointed as
new CFO of Com Hem and assumes his duties on June 1. Mikael Larsson has held the
position as CFO of Investment AB Kinnevik since 2001.

Comment from Anders Nilsson, CEO, Com Hem

“Strong growth in revenue and operating cash flow”

The fourth quarter of 2014 was another high quality quarter with strong results
across the board. We are particularly pleased by the continued reduction in
customer churn. Down from 16.4% in the second quarter to 14.8% in the third
quarter and 14.2% in the fourth quarter. The pace of improvement reflects early
successes for our intensive focus on improving our customers’ experience.
Significant returns were delivered on our broadband investment, with another
quarter of strong volume growth and continued shifts to higher speed tiers.

Similarly, accelerated growth in digital television was driven by our leading
TiVo offering and TiVo penetration increased from 22% to 27%. We also saw
material progress in our business-to-business operations as the number of
customers in our network grew as a consequence of focused sales activities
servicing existing demand.

These improvements combined have resulted in increased momentum in revenue
growth, with total revenue up 10.4%, of which the organic growth was up 4.3%
compared with the corresponding quarter last year. Underlying EBITDA increased
by 6.6%.

Growing underlying EBITDA together with lower capex requirements significantly
strengthened our operating free cash flow by more than 66%.

When considering the full year, we have reduced debt by SEK 5.7bn while the
average interest rate has been reduced by 4 p.p., lowering our cash interest
payments by approximately SEK 0.5bn per year going forward. On the back of a
strong operational performance and a transformed balance sheet, the Board of
Directors proposes a number of measures aimed at increasing shareholder returns.
This can be achieved whilst continuing to invest to deliver our operational plan
and remain within our leverage target. Going forward, our strategy and
priorities remain the same. We are committed to successfully executing on our
strategy for sustainable growth and hence generating steady, strong cash flow
for our shareholders.

Notes to the editors:
You find the complete report with tables in the attached PDF or at:
http://www.comhemgroup.se/en/interim-report-q4
-2014  (http://www.comhemgroup.se/en/interim-report-q4-2014%20)

Conference Call on February 10
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.

For queries, please contact:

Investors:
Tomas Kihlstrand, Interim CFO
+46 725 45 99 16

Carolina Haglund Strömlid, Head of Investor Relations
+ 46 708 80 71 73
E-mail: investor.relations@comhem.com

Press:
Fredrik Hallstan, Head of PR
Tel: +46 761 15 38 30
press@comhem.com

Com Hem Holding AB discloses the information provided herein pursuant to the
Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading
Act. The information was submitted for publication at 07:30 CET on February 10,
2015.

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 1.6 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 1,100 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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[1] Net result for the period excluding one-off costs associated with the IPO
and refinancing of debt, adjusted for income tax, divided by the number of
shares after the issuance of new shares and exercise of the over-allotment
option. See Pro forma earnings per share on page 11 in the report.