Swedish telco Com Hem has reported its Q2 2015 numbers. Commenting on the results,
Anders Nilsson, CEO at Com Hem, said: “Overall, the business has delivered a strong set of results during the second quarter of 2015. Revenue grew by 4 per cent compared to the corresponding quarter last year with underlying EBITDA growing by 3.1 per cent on the same basis. The leverage ratio stayed at 3.8x which is well within our target of 3.5-4.0x underlying EBITDA while remunerating shareholders by a total of SEK 412 million (€373m) during the quarter including a cash dividend as well as buying back shares and redemption of shares.””Our operational focus has remained on improving customer satisfaction, while shifting our balance of growth from volume towards a combination of volume and price-led growth. During Q1 and Q2, we implemented price changes – primarily discount reductions – affecting approximately half of our customer base including a 10 SEK per month list-price increase on our 50 and 100 Mbit/s broadband services. Churn impact has been lower than expected, with an increase of 0.4 p.p. for the quarter to 13.7 per cent. During the corresponding quarter last year, churn increased by 1.2 p.p as a consequence of price changes touching roughly half the number of customers compared to our 2015 price changes. This shows an improved ability to price successfully and underlines our opportunity for further price changes going forward. Consumer ARPU rose to 361 SEK (Q1 358) with the full pricing impact on consumer ARPU from Q3 and onwards.””We continue to deliver customer growth at – as planned – a slower pace than previous quarters. Our unique consumer subscriber base increased by 6,000 to 894,000 unique consumer customers, reflecting reduced marketing and sales activity.”
“Our broadband business grew by 8,000 net additions, resulting in 637,000 broadband RGUs – another all-time high in Com Hem’s history – with the mix of new customers on 100 Mbit/s or above rising to 76 per cent (74 per cent in Q1).”
“The digital television customer base grew by 2,000 customers and our TiVo base by over 14,000 as we focused on broadband marketing and temporarily reduced our direct sales effort focused on TiVo. Today, TiVo is a part of over 200,000 Swedish homes, representing 33 per cent of our digital-TV customer base just 21 months after launch.”
“In business to business, we continue the transformation of the Phonera business to focus on higher margin OnNet sales with Phonera adding 3,000 OnNet subscribers during the quarter and growing overall revenue. As we build momentum in Phonera’s OnNet business, Phonera’s legacy business, notably voice telephony, continue to offset business to business top-line growth.”
“I am delighted by the progress we have made in the transformation that has taken place in Com Hem since our IPO in June 2014. Critically, our customers’ positive response to our discount reductions is a measure of the exceptionally rapid progress we have made in improving customers’ perception of Com Hem, and hence their willingness to absorb moderate price growth. As a consequence, we have increased confidence in our ability to execute on our plan for sustainable growth and thereby generate steady, strong cash flow for our shareholders.”
