#1DNA DNA PIC Stronger bolder and more straightforward DNA Investor presentation February 2019#2DNA Forward looking statement This presentation contains, or may be deemed to contain, statements that are not historical facts but forward-looking statements. Such forward-looking statements are based on the current plans, estimates and expectations of DNA's management based on information available to it on the date of this presentation. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. Future results of DNA may vary from the results expressed in, or implied by, the forward-looking statements, possibly to a material degree. DNA undertakes no obligation to update this presentation after the date hereof. DNA's Investor presentation, February 2019 2#3DNA DNA in brief Business review Q4 and January-December 2018 business review: ☐ ☐ Highlights of the last quarter of 2018 and year 2018 Key operational KPIs and development of subscription base Financial review ☐ Key figures' development Strategy and outlook ☐ DNA's strategic targets and market outlook for 2019 Financial targets and dividend policy Appendices DNA's Investor presentation, February 2019 3#4DNA DNA in brief DNA offers high-quality voice, data and TV services for communication, entertainment and work#5DNA DNA is one of the leading Finnish telecommunications groups ■ Cost-efficient ■ Streamlined Agile ■ Innovative OUR VALUES FAST DNA's customers receive quick and helpful service STRAIGHTFORWARD DNA's approach is clear and responsible BOLD We are direct, open-minded and ready for change Over 4 million Mobile communications and fixed network subscriptions EUR 912 million Net sales in 2018 1,590 At the end of 2018, 1,590 employees working at DNA Customer is in the center of DNA's strategy DNA became a listed company on November 2016 TV Finland's largest cable operator and the leading pay TV provider EUR 139 million Operating result in 2018 62 DNA stores Finland's most extensive retailer of mobile phones, other mobile devices and mobile subscriptions Strong employee satisfaction DNA was awarded as the second best workplace in Finland in the category of large organisations Great (Great Place to Work® survey) Place Suomen parhaat työpaikat To WorkⓇ Finland 2018 DNA's Investor presentation, February 2019 5#6DNA From a mobile start-up to a strong player -Both B2C and B2B with a challenger mindset DNA's net sales have increased steadily EUR million 397 397 371 912 886 832 859 829 769 765 728 691 652 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 '01: DNA launches mobile services '03: DNA acquires Telia Mobile Finland DNA's Investor presentation, February 2019 '07: 6 local fixed line operators merged to DNA '10: DNA acquires Welho, the leading cable company in Finland '11: DNA acquires Forte Netservices '13: DNA acquires PlusTV, the leading pay-TV operator '14: DNA acquires TDC's Finnish operations & Finnish Shared Networks Ltd is founded 15: All DNA business operations under a single brand '16: DNA becomes a listed company B2B 25 B2C 75 '17: DNA's net sales and operating result reach record levels '18: DNA's mobile and fixed network subscriptions reached 4 million subscriptions milestone 6#7DNA DNA had an excellent start as a listed company Ownership structure Trading in the DNA share began on the Nasdaq Helsinki Stock Exchange on November 2016 DNA has today over 14,000 shareholders Market cap is EUR -2.4 billion (31 January 2019) 4% 27% Largest shareholders, 31 January 2019 % of shares 30% Finda Telecoms Ltd 28.3 PHP Holding Ltd 25.8 Ilmarinen Mutual Pension Insurance Company 3.9 Lohjan Puhelin Ltd 1.7 Elo Pension Company 1.4 40% 31 January 2019 Mandatum Life Insurance Company Ltd 1.1 Viria Plc 0.8 The State Pension Fund of Finland 0.7 ■ Households ■Financial and insurance institutions ■ Other Finnish institutions ■ Nominee registered and non-Finnish holders DNA's Investor presentation, February 2019 7#8DNA Strong development in DNA's business 2013 2018 Mobile communications market share 24 % 27% Growth in market shares Fixed broadband market share 21 % 28 % Net sales EUR 765 million EUR 912 million Financial growth 25.5 % 31.2 % Strong operational KPI's Business acquisitions DNA's Investor presentation, February 2019 Comparable EBITDA Subscriptions (mobile and fixed network) 3.47 million 4.03 million 4G coverage in Finland 42 % Revenue per user (ARPU) 18.2 € < 99 % 18.8 € WELHO FORTE netservices 2010 2011 •plusTV 2013 2014 TDC Finland YHTEIS VERKKO ΜΟΙ 2019 8#9DNA Telecommunications market in transition Telecommunications industry's service revenue is growing as digital services give a significant boost to the demand for mobile data. The emerging Industrial Internet applications will further expand the volume of data traffic, providing new kinds of growth opportunities. Täynnä 15.06 to 14 syyskuuta קסה Trend 1 The demand for faster and better-quality connections is growing at an increasing pace - mobile broadband traffic volumes are fuelled by the growing number of smart phones and other smart devices. Trend 2 Customers live increasingly digital lives and want a seamless experience regardless of the service channel. Trend 3 The strong growth of the variety of services and smart devices continues - the best global services will gain a stronger foothold. Trend 4 Mobile working, digitisation and the Internet of Things will make business more flexible and productive.#10DNA DNA wins 5G frequency band - 5G will multiply data transfer speeds " DNA has been preparing its mobile network for the 5G era since 2016 and 5G services will be provided to customers during next year, enabling connection speeds of over 1 gigabit per second On 1st of October DNA won 5G frequency band in the Finnish Communications Regulatory Authority's frequency auction for a price of EUR 21 million In first phase, 5G will enable fast and stable connections in many properties that cannot get an optical fibre connection Joint 5G technology test by DNA and Ericsson in February 2017 5G launch commercially 5G technology in the 4G network as a layer of capacity Core functions of mobile broadband 2017 2018 2019 " Nationwide 5G network ■ Advanced network functionalities in general use New loT functionalities 2020 Advanced network virtualisation 2025 Pilot tests on 5G technology in our production network on a 3.5 GHz frequency band The auction for the 5G frequencies ended on 1 October 2018 and 5G license will come into force on 1 January 2019 26 GHz frequency band introduced, enabling ultra-high local connection speeds 5G coverage expands from urban to rural areas through the shared use of frequencies 5G functionalities develop in stages as the technology matures DNA's Investor presentation, February 2019 10#11DNA Strong foothold in the growth markets Growth markets Established markets Mobile communications (voice and broadband) Cable TV and IPTV 27% DNA 34% Elisa 27% Telia Finland Others 38% Fixed voice 13% 20% DNA Elisa Telia Finland 23% 44% Finnet, others DNA's Investor presentation, February 2019 Market shares in the end of June 2018, except Cable TV in the end of 2017 Source: Finnish Communications Regulatory Authority 11% 27% DNA 35% Elisa Fixed broadband 27% Telia Finland Others 10% 28% DNA Elisa 35% Telia Finland Finnet, others 11#12DNA DNA's strategy summary - The cornerstone of DNA's strategy is customer satisfaction Main assumptions behind our strategy Our vision and mission Aspired differentiation 1 Growing demand for faster, good quality mobile connections accelerates 2 Seamless, multi-channel customer experience and personal customer relationship - digitalization and physical channels unites THE MOST SATISFIED CUSTOMERS 3 4 The best ecosystems and end-customer solutions globally, gets stronger foothold B2B: Mobile work, digitalization, IoT, and centralized ICT sourcing We want to make our customers' lives more inspiring, productive and entertaining. We provide connections, services and devices - in a clear, easy and cost-effective manner. Customer experience - especially in essential interaction with DNA Attitude Service minded attitude according to our values - Positive memory trace as a goal-in every customer meeting Our values Fast Straightforward - Bold The most satisfied consumer and corporate customers Industry-leading financial development Faster than average market growth Becoming one of the most desired employers in Finland 1. Our strategic 2. goals 3. 4. DNA's Investor presentation, February 2019 12#13DNA DNA's footprint in society DNA Value Creation What We Build On A Team of Top Professionals Motivated employees all over Finland ■Committed partners Fast High-Quality Connections Excellent mobile and fixed network Modern high-quality TV networks Service platforms, cloud services and data centre services Intangible Assets ■Good reputation and strong brand Trust of customers ■Sustainable operations Financial Resources ■Nation-wide store network ■Own mobile network and fixed network ■Mobile network licences ■Strong financial position and investment capacity The DNA Way Offering Products and services develop with the customers' needs Know-how Skilled workforce enables high-quality customer experience Understanding Understanding the changing service needs of customers Understanding of customer behaviour based on data and analytics Our Values Fast, bold, straightforward Our Vision The most satisfied customers in the market What We Produce Private Customers ■Voice and data services in mobile networks Voice and broadband services in fixed networks Entertainment and television services Device sales Corporate Customers ■Mobile and communications solutions Corporate network solutions Corporate data security services ■■■Value added services for corporate networks ■Device sales Wholesale and virtual operator services The DNA Footprint Societal ■Building and developing the infrasturcture necessary for the society: 4G networks cover 99.7% of the population, over 3.9 million mobile and fixed network subscriptions ■Digital connections and devices for consumers' everyday life Improving the competitiveness of corporate customers Social Direct and indirect employment: About 1,600 own employees High employee satisfaction: 83% of employees consider DNA a great place to work (Great Place to Work® survey) ■Family-friendly workplace ■Development of employees' skills Excellent customer experience Economic ■■Profitability: Operating result EUR 124 million Investments: EUR 144 million Earning per share: Dividend payout ratio about 70-90% of free cash flow to equity ■Salaries and benefits: EUR 111 million ■Taxes and tax-like payments: EUR 176 million ■■Purchases from suppliers: EUR 507 million Environmental Direct and indirect CO2 emissions: 208,000 +CO₂ (Scope 1, 2 and 3) ■Development of the network's energy efficiency Reducing customers' CO2 emissions with DNA solutions Recycling of terminal equipment at DNA Stores DNA's Investor presentation, February 2019 13#14We make sustainable business Efforts to improve digital inclusion Record high job satisfaction DNA promotes digital inclusion in Finland by investing in a high-quality, extensive network, fast connections, easy-to-use products and services, and an excellent customer service. In 2019, DNA will launch a corporate responsibility programme to tackle digital inequality among senior citizens, children and youth, and disadvantaged families, in cooperation with prominent Finnish charitable organisations. DNA aims to be one of the most desired employers in Finland. In 2018, in the Great Place to WorkⓇ research, DNA was awarded as the second best workplace in Finland in the category of large organisations. In addition, DNA was the first publicly listed company - and the first large company in Finland - to be recognised as a Family Friendly Workplace by the Family Federation of Finland. Reducing climate impact DNA has signed up to Society's Commitment to Sustainable Development with a commitment to reduce the company's climate impact. DNA's objective is to reduce indirect greenhouse gas emissions from the use of energy (Scope 2) by 100% by 2023. The reduction will be achieved by using renewable energy and improving energy efficiency.#15DNA DNA Business Review UMB 12 RE FULL COVER REMUM TEMPERED PREMUM GLASS FULL COVER PREMUN REEND Tervetuloa Miten piipahtamaan! voimme palvella? горм#16DNA Q4/2018: Net sales increased, quarter's profitability was decreased due to higher sales and marketing costs For 2018, as required by the IFRS standards, the graphs and tables contain figures reported according to the IFRS 15 and IFRS 9 standards adopted on 1 January 2018 and, as required by IFRS 15, figures adjusted are disclosed as if they were prepared under 2017 revenue guidance. The comparative analysis in the presentation is disclosed as if the figures were prepared under 2017 revenue guidance. Net sales increased 1.2% and amounted to EUR 237.5 million (234.6) Mobile device sales and mobile service revenue were at a record high level Growth in mobile service revenue* +4.6% was due to the growth of the mobile subscription base Mobile device sales were up 7.3% from the reference period Profitability in the last quarter was affected by higher sales and marketing costs ◉ EBITDA decreased 4.5% and was EUR 62.7 million (65.7); share of net sales was 26.4% (28.0%) ■ ■ Sales and marketing costs increased mainly due to the successful actions to secure our current customer base and to increase share of more valuable subscriptions The operating result decreased and was EUR 25.1 million (26.9), share of net sales was 10.6% (11.5%) Strong momentum of operational KPI's " ■ Notes Revenue per user for mobile communications (ARPU) remained almost at the reference period level; EUR 18.9 (EUR 19.0) Efforts to protect DNA's customer base were successful, CHURN decreased and was 14.8% (18.1%) Mobile subscription base grew +66 000 y-on-y and was in total 2,877,000. Growth from the end of September 2018 +22 000 subscriptions Subscription base for fixed broadband increased by +23,000 and cable-TV subscriptions increased by +11,000 *Mobile service revenue revenue generated by mobile subscriptions. Consumer and corporate mobile communication and mobile broadband services, corporate M2M services and corporate mobile virtual network operator (MVNO) services. DNA's Investor presentation, February 2019 16#17DNA Q4 2018 - Strong mobile device sales in the last quarter Growth of mobile service revenue (+4.6%) and strong mobile device sales (+7.3%) boosted quarters' net sales EUR million y-on-y+1.2% in Q4/2018 235 213 219 219 222 222 225 225 228 228 237 237 EBITDA¹ declined 4.5% from the reference period and margin was +26.4% EUR million y-on-y -4.5% in Q4/2018 73 72 71 72 73 66 68 66 76 76 33.5% 63 65 33.2% 32.5% 32.0% 30.9% 30.8% 28.0% 27.6% 31.8% 32.3% 33.5% 26.4% Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2017 Net sales Net sales (IFRS 15) Q2/2017 Q3/2017 Q4/2017 Comparable EBITDA as a % of Revenue Comparable EBITDA Q1/2018 Q2/2018 Q3/2018 Comparable EBITDA (IFRS 15) Q4/2018 Operative capex² decreased year-on-year, investments were distributed more evenly in 2018 Operative free cash flow³ increased from the reference period EUR million y-on-y-20.1% in Q4/2018 EUR million 49 67 28.7% 24 24 17 11.1% 11.2% 7.9% Q1/2017 Q2/2017 Q3/2017 48 54 54 31 31 16 15 13.7% 7.1% 7.0% 34 34 22.7% 14.9% 22.7% 13.6% 15.0% Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 23.0% 43 19.7% 22.0% 56 55 25.4% 41 42 42 42 18.3% 18.6% 24.8% 18.7% -0.7% 18.6% 9 12 3.7% 4.9% Q1/2017 Q2/2017 -2 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Operative Capex as a % of Revenue Operative Capex DNA's Investor presentation, February 2019 Operative Capex (IFRS 15) Operating Free Cash Flow (IFRS 15) Notes Operating FCF as a % of Revenue Operating Free Cash Flow 1. EBITDA excluding items affecting comparability 2. Operative capex excluding spectrum license payments 3. Operating free cash flow defined as comparable EBITDA minus operative capex 17#18DNA January-December 2018: Net sales and profitability record high EUR 913.5 million +3.1% 1 EUR 283.6 million +4.4% 1 Net sales EBITDA 2,877,000 Mobile communications subscriptions +66 0001 EUR 447.8 million Mobile service revenue +6.6% EUR 149.0 million 7.3% 1 Operative free cash flow 16.2% Mobile CHURN for postpaid subscriptions EUR 379.3 million Net debt Notes 1.34 Net debt/ EBITDA 1. Compared to January-December 2017 CHURN Customer turnover rate DNA's Investor presentation, February 2019 1,111,000 Fixed broadband and cable TV subscriptions +34,0001 18#19DNA DNA's net sales and profitability have grown steadily during the last few years Net sales have increased steadily, +3.1% from year 2017 EUR million +3.1% EBITDA growth was driven by growth in mobile service revenue and improved operational efficiency EUR, million +4.4% 832 829 859 886 914 2014 2015 2016 2017 2018 Operative capex2 remained almost at the same level year-on-year, % of net sales was under 15% EUR million +1.3% 143 148 137 133 135 17.2% 17.9% 15.9% 15.0% 14.7% 2014 2015 Operative Capex as a % of Revenue 2016 2017 2018 Operative Capex DNA's Investor presentation, February 2019 272 247 227 211 284 30.7% 31.0% 28.8% 27.3% 25.4% 2014 2015 2016 Comparable EBITDA as a % of Revenue Operative free cash flow 3 increased year-on-year EUR million 2017 Comparable EBITDA 2018 +7.3% 149 139 110 79 68 15.7% 16.3% 12.8% 9.5% 8.2% 2014 2015 Operating FCF as a % of Revenue 2016 2017 2018 Operating Free Cash Flow Notes 1. EBITDA excluding items affecting comparability 2. Operative capex excluding spectrum license payments 3. Operating free cash flow defined as comparable EBITDA minus operative capex 19#20DNA Mobile network and fixed network subscription base grew Mobile communication network subscription volumes up by 66,000 y-on-y, + 22,000 subscriptions from the end of Q3 Our customers kept moving away from using fixed-voice subscriptions '000 subscriptions '000 subscriptions -10 22 36 21 0 16 28 22 +2.3% -22.6% 62 59 57 53 51 45 43 41 2,732 399 2,754 380 2,790 392 2,811 392 2,811 386 2,827 386 2,855 399 2,877 397 2,333 2,374 2,398 2,418 2,425 2,441 2,456 2,480 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Fixed voice subscriptions Mobile Prepaid Subscriptions Mobile Postpaid Subscriptions Net adds Fixed network broadband subscription base increased by 23,000 subscriptions '000 subscriptions +5.0% 444 36, 449 454 458 467 470 478 481 36 36, 36. 36 35, 35 34 407 413 418 423 431 435 443 447 Cable TV subscriptions increased by 11,000 '000 subscriptions +1.8% 614 617 619 619 620 622 627 630 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Corporate Subscriptions Consumer Subscriptions Q1/2017 Cable TV subscriptions Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 DNA's Investor presentation, February 2019 20#21DNA Steady growth in 4G subscription base and smartphone penetration 4G subscription base and smartphone penetration Key highlights in October-December 2018 Notes 77% 77% 73% 74% 75% 69% 70% 72% 61% 60% 58% 56% 54% 52% 51% 48% Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 4G subscription base Smartphone penetration 1. Share of mobile postpaid handset subscriptions in Consumer business, includes subscriptions with data transfer of 50 megabits per second or more 2. iOS (iPhone)-, Bada-, MeeGo-, Android-, Blackberry-, Symbian 3^- and Windows phones of the total phone base DNA's Investor presentation, February 2019 4G subscription base penetration increased in Q4 and was 61.4% Smartphone penetration remained steady and was 77% Practically all phones sold in the market were smart phones and mostly 4G models 21#22DNA About 92% of all mobile data usage was transferred in 4G network Mobile data traffic (GB, '000) grew over 30% Key highlights in October-December 2018 149,366 +30.8% 195,417 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Mobile data traffic (GB, '000) 709,022 529,441 344,602 194,853 103,992 34,575 56,577 2012 2013 2014 2015 2016 2017 2018 DNA's 4G mobile data traffic increased in the last quarter 37% from the reference period DNA's total data traffic volume in the mobile communications network increased by 31% In 2018, DNA's mobile data usage was 20.8 gigabytes/ month / subscription and in 2017 the number was about 15.9 gigabytes In the past two years, the quantity of data transferred in DNA's mobile communication network has over doubled and the trend is expected to continue with the expansion of 5G DNA's Investor presentation, February 2019 22#23DNA In Q4/2018, the subscription turnover rate (CHURN) was low; 14.8% Mobile postpaid ARPU remained almost in the reference year's level EUR 17.8 19.0 18.5 18.5 19.0 18.9 18.5 18.4 18.9 18.8 18.9 18.9 Q1/2017 ARPU Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 ARPU (IFRS 15) Mobile communication CHURN (postpaid) decreased to a low level % 21.0% 19.1% 18.9% 18.1% 15.4% 15.4% 15.8% 14.8% Key highlights in October-December 2018 Demand of 4G subscriptions continued to grow steadily 4G subscription base has increased 7.1 %-points year-on-year and its' share of mobile subscriptions was 61.4%¹ (54.3%) ARPU was impacted by lower interconnection charges from the beginning of December High customer satisfaction and DNA's ability to react fast to competitors' campaigns decreased CHURN ■ CHURN was 14.8% (18.1%) ■ CHURN decreased from the previous quarter (Q3 2018: 15.8%) Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Notes 1. Share of mobile postpaid handset subscriptions in Consumer business, includes subscriptions with data transfer of 50 megabits per second or more ARPU Average revenue per user CHURN Subscription turnover rate DNA's Investor presentation, February 2019 23#24DNA Financial review#25DNA Positive development in full year financial KPI's EUR, million Net sales Q4/2018* 236.9 Q4/2018 adjusted 237.5 Q4/2017 Change % 1-12/2018* 234.6 1.2% 911.8 1-12/2018 adjusted 913.5 1-12/2017 Change % 886.1 3.1% Comparable EBITDA 65.4 62.7 65.7 -4.5% 284.9 283.6 271.8 4.4% % of Net Sales 27.6% 26.4% 28.0% 31.2% 31.0% 30.7% Comparable Operating Result 28.4 25.1 29.9 -16.1% 138.9 133.8 126.6 5.7% % of Net Sales 12.0% 10.6% 12.8% 15.2% 14.6% 14.3% Net Result 21.2 18.5 21.6 -14.1% 102.2 98.1 93.1 5.4% % of Net Sales 8.9% 7.8% 9.2% 11.2% 10.7% 10.5% Operative Capex 53.7 53.8 67.3 -20.1% 133.9 134.7 132.9 1.3% % of Net Sales 22.7% 22.7% 28.7% 14.7% 14.7% 15.0% Operating FCF 11.7 8.9 -1.7 151.0 149.0 138.9 7.3% Net Debt 379.3 379.3 304.3 1.33 1.34 1.12 Net Debt/EBITDA Notes 1. Operating free cash flow defined as comparable EBITDA minus operative capex Figures adjusted are disclosed as if they were prepared under 2017 revenue guidance, excluding the impact of IFRS 15 standard adopted on 1 January 2018. *Including IFRS 15 DNA's Investor presentation, February 2019 25#26DNA Q4/2018: Mobile service revenue increased 4.6% year-on-year Net sales for the quarter were supported by strong growth in mobile equipment sales and mobile services EUR million 4Q/2018 Y-o-Y growth 235 7 237 237 1.2% 222 225 228 6 5 6 6 Fixed voice 64 62 67 63 Fixed non- 63 65 voice 12 12 Mobile 13 13 interconnecti 13 13 -13.1% on & inbound 41 41 38 28 31 34 roaming Mobile equipment -4.4% -8.3% 7.3% Mobile 4.6% service 109 111 110 113 114 116 Key highlights in October-December 2018 Mobile service revenue grew 4.6% from the reference period " The growth was fuelled particularly by the growth in mobile subscriptions base and in average billing per user Average revenue per user (ARPU) was EUR 18.9 (19,0) Mobile equipment sales were strong and increased by 7.3% Revenue from fixed voice continued to decline as expected Mobile interconnection decreased slightly from the reference period due to the decrease in interconnection prices Fixed non-voice has been impacted in particular by declined sales of pay TV Notes *Including IFRS 15 Q4/2017 Q1/2018 Q2/2018 Q3/2018. Q4/2018 Q4/2018* DNA's Investor presentation, February 2019 26#27DNA Q4/2018 net sales grew in Consumer business and decreased slightly in Corporate business Consumer business in Q4 Net sales EUR 180.0 million (+2.6%) + Net sales were driven by the growth in mobile service revenue and mobile device sales + Revenue per user (ARPU)1 remained steady and was EUR 20.5 (20.4) EBITDA EUR 47.4 million (+1.5%) + The increase was fuelled by the positive development of mobile service revenue but higher sales and marketing costs impacted EBITDA negatively Net sales, EUR million Corporate business in Q4 Net sales EUR 57.5 million (-2.9%) - Net sales were affected by a decrease in the demand for fixed voice services and lower sales of equipment + Corporate customers' mobile ARPU decreased from the reference period and was EUR 13.6 (14.0), mainly due to lower interconnection charges EBITDA EUR 15.3 million (-19.2%) EBITDA was weakened by an increase in fixed costs due to activities including development of new services Comparable EBITDA, EUR million EUR million 886 914 Change in 2018 Y-o-Y Growth EUR million 859 3.1% 226 227 228 -0.4% Change in 2018 Y-o-Y Growth 284 272 4.4% 247 66 72 -8.1% 72 4.3% 8.9% Corporate 631 659 687 235 237 237 59 57 57 1.2% -2.9% Corporate 217 200 175 Consumer 175 180 179 2.6% Consumer 2016 2017 2018 4Q/2017 4Q/2018 4Q/2018* -4.5% 66 63 65 19 15. 15, -19.2% 47 47 50 1.5% 2016 2017 2018 4Q/2017 4Q/2018 4Q/2018* DNA's Investor presentation, February 2019 Notes 1. Consumer mobile postpaid handset subscription ARPU *Including IFRS 15 27#28DNA Operative CAPEX in 2018 in the reference year level Operative capex 1 was 22.7% of net sales in October-December EUR million 137 133 135 28.7% 22.7% 15.9% 15.0% 14.7% 67 54 2016 2017 2018 Operative Capex as a % of Revenue 22.7% 54 Key highlights in October-December 2018 & FY2018 ☐ Operative capital expenditure decreased from the reference period and was EUR 53.8 million (67.3), or 22.7% of net sales (28.7%) Operative Capex in 2018 remained at a similar level than in 2017 and was 14.7% of net sales ■ Capital expenditures was distributed more evenly throughout the year in 2018 Major individual items included in capital expenditure in the review period are 4G network capacity expansion, fibre optics networks and transmission systems 4Q/2017 4Q/2018 4Q/2018* Operative Capex Notes 1. Operative capital expenditure is reported capital expenditure excluding cash instalments for spectrum licenses capitalized. *Including IFRS 15 DNA's Investor presentation, February 2019 28#29DNA Operating free cash flow at a good level Cash flow summary EUR million 2015 2016 2017 2018 2018* Key highlights in 2018 Operating free cash flow at a good level + EBITDA significantly higher year-on-year +Operating FCF increased 7.3% from the reference year Free cash flow to equity EUR 72 million (end of September 2018: EUR 57 million) The higher costs resulting from the re-financing of bonds in the first quarter weakened cash flow Net working capital related to trade payables increased due to the payment of previous year's high investments. Also increase in sales receivables due to high equipment sales impacted NWC negatively. - Investments distributed more evenly this year Comparable EBITDA 227 247 272 284 285 Operative Capex (148) (137) (133) (135) (134) Operating FCF 79 110 139 149 151 Margin % 9.5% 12.8% 15.7% 16.3% 16.6% Cash Conversion % 34.7% 44.6% 51.1% 52.5% 53.0% Interest paid, net (8) (9) (9) (17) (17) - Income taxes, paid 2 (5) (26) (12) (12) Adjusted Change in NWC 38 (1) 19 (46) (48) Change in Provisions (9) (2) (5) (2) (2) FCFE 101 93 119 72 72 Margin % 12.2% 10.8% 13.4% 7.9% 7.9% Notes *Including IFRS 15 DNA's Investor presentation, February 2019 29 29#30DNA Low cost capital structure Weighted average cost of debt: 1.34% (Q3/2018: 1.62%) Maturity Nominal Amount EUR million Book Value EUR million Cost of Debt Unsecured € Bond 1.375% Mar-2025 250 242 1.43% Coupon Unsecured € Bond 2.875% Mar-2021 60 60 2.93% Coupon Bank Loans and Commercial Paper Total 40 100 100 0.17% 410 402 1.34% Cash & Cash Equivalents -23 Net Debt Net Debt/EBITDA1 In March 2018, DNA got a long-term credit rating Assigned Rating Outlook BBB (S&P) Stable 379 1.34 Notes 1. Defined as net debt divided by comparable EBITDA from the beginning of year (adjusted), excluding IFRS 15 impact DNA's Investor presentation, February 2019 Debt maturity schedule, EUR million EUR 150 million fully undrawn RCF providing additional liquidity and financial flexibility 68 258 250 60 4 8 60 8 8 8 2019 2020 2021 2022 2023 2024 2025 ■Bank Loans ■Bonds 30#31Strategic cornerstones, market outlook and financial objectives 31#32DNA DNA acquired Moi Mobiili Moi Mobiili provides mobile services to private and corporate customers Moi has operated since 2016 as a service operator in DNA's mobile network Moi will continue to serve its customers under its own brand separately from DNA Moi have some 10 employees who will continue in the service of the company The acquired business operations will be consolidated into DNA's figures from the first quarter of 2019 onwards The transaction is not expected to have a significant impact on DNA's net sales or EBITDA for 2019 DNA's Financial Statements Bulletin 2018 Moi 32#33DNA DNA's highlights in 2018 " DNA launched a 5G network in Helsinki in the end of the year Initially, the network will cover the very centre of the city, but will be expanded once 5G-capable mobile devices become widely available DNA is piloting 5G Fixed Wireless Access (FWA) technology in the city of Vantaa 4G network's mobile data traffic continued its strong growth and 4G remains the primary mobile communication network technology for long time still DNA's employees are even more satiffied with their employer " " DNA received the Great Place to Work® certificate in November 2018 for the second consecutive year and DNA is taking part in GPTW Finland 2018 survey DNA's personnel satisfaction has improved for four consecutive years DNA is steering its management culture towards leadership by coaching DNA's subscription base exceeded four million DNA's mobile and fixed network subscriptions increased also in 2018 and DNA reached 4 million subscriptions milestone in the third quarter DNA became the second-largest fixed broadband service provider in Finland when during summer 2018 DNA increased its' share of the fixed broadband market to 28% DNA developed its' loT expertise and services " DNA introduced new DNA Connectivity IoT service The service is developed with Cisco Jasper, and with the service DNA's customers can develop and increase their loT services businesses across both national and international markets DNA's objective is to become a significant operator in the loT market DNA's Investor presentation, February 2019 DNA Tervet piipah 33#34DNA In 2018 our customer satisfaction continued to increase ☐ ■ In Consumer Business, NPS improved in all product categories and the total satisfaction rNPS* improved by 2 points In Corporate Business, rNPS improved by 3 points Having already high NPS records, DNA Stores reached yet again a new record level +2 Consumer Business +3 Corporate Business *rNPS = relationship Net Promoter Score measures loyalty of customer relationships DNA's Investor presentation, February 2019 Record DNA Store 34#35DNA We are on track to achieve our strategic objectives masta DNA's Investor presentation, February 2019 The most satisfied consumer and corporate customers DNA is a great place to work: DNA aims to be one of the most desired employers in Finland Industry-leading financial development Faster than average market growth 35#36DNA Market outlook for 2019 While Finland's economic growth is expected to slow down, the Bank of Finland forecasts GDP growth to remain moderate. Demand for broadband and entertainment services is expected to increase due to to the increase in video content usage. We expect the mobile network service market growth to moderate and competition to remain intense for mobile communication services. The market for fixed- network voice services is expected to continue declining. The demand for traditional pay-TV services is expected to decline further. The number of high- speed 4G subscriptions continues to grow and mobile data usage per subscription increases. The demand for Industrial Internet solutions, and subsequently for M2M subscriptions, is expected to grow. The SMS and voice revenue in the mobile communication network is forecasted to decrease somewhat. First to benefit from the 5G network are detached-home residents and businesses without access to a fibre optic connection. 5G devices are expected during 2019. DNA's Investor presentation, February 2019. 36#37DNA Board of Director's proposal for distributable funds in 2018 Dividend EUR 0.70/share EUR 1,2 1.10 1.10 1 Extra dividend In total: EUR 0.40/share 0.47 0.40 0,8 0,6 0.55 EUR 1.10/share 0,4 0.63 0.70 0.55 0,2 ■ Dividend + extra dividend in total EUR 1.10 per share: payout ratio 6.4%1 0 2017 2018 2019* ■ Dividend of EUR 0.70 is 129% of DNA's free cash flow to equity ■ Total dividend payout for shareholders is EUR 145.3 million Notes 1.December 30, 2018 share price * Board's proposal for AGM 2019 DNA's Investor presentation, February 2019 Dividend Extra dividend 37#38DNA We updated our financial targets; EBITDA margin 34% DNA has updated its' mid-term financial targets in part of EBITDA margin and dividend policy. Target 2018 2017 2016 Net sales growth - faster than average market growth EBITDA margin of at least 34% 31.2% 30.7% 27.5% (earlier target 32%, new target includes IFRS16 impact¹) Operative capital expenditure less than 15% of sales 14.7% 15.0% 15.9% (excluding IFRS16 impact²) Net debt/EBITDA less than 2.0 (can be temporarily exceeded in case of potential attractive bolt-on in-market M&A opportunities)³ 1.33x 1.12x 1.36x DNA's profit distribution policy: DNA's goal is to pay a growing dividend to its shareholders or by other means to return capital equaling 80-100 percent of the net profit of fiscal year. In addition, the Board of Directors may consider the distribution of excess profit to shareholders for a specific financial period. When making the profit distribution decision, the Board of Directors will take into account the company's financial status and financial position as well as future funding needs and financial goals. IFRS 16 standard was adopted at the beginning of 2019, and it's estimated to have an impact in 2019 to our 1. EBITDA, of approximately EUR +17 million 2. Investments, of approximately EUR +8 million. Operative capital expenditure are investments excluding capitalized spectrum license payments. 3. Net debt to EBITDA, of approximately +0,2 DNA's Investor presentation, February 2019 38#39DNA IFRS 16 impact on DNA's Income Statement and Balance Sheet in 2019 Impact of IFRS 16 is mainly coming from long-term leasing contracts of premises, equipment facilities and leasing cars → Instead of leasing expenses, depreciation and interests will be recorded into the income statement: " " Liabilities increase about EUR 81 million and property, plant and equipment about EUR 84 million EBITDA, positive impact of about EUR 17 million Depreciation increase about EUR 17 million Finance expenses increase about EUR 1 million Net debt/EBITDA ratio will deteriorate about 0.2 Investments will increase about EUR 8 million. IFRS 16 won't have an impact on operative capex. EUR, million Net sales 2019 Other operating expenses -17 EBITDA 17 Depreciation, amortisation and impairments 17 Operating result, EBIT 0 Financial expenses 1 -1 Net result before income tax DNA's Financial Statements Bulletin 2018 39#40DNA Financial objectives and dividend policy DNA financial guidance¹ for 2019 Mid-term financial targets DNA's net sales are expected to remain at the same level as in 2018, and EBITDA is expected to increase substantially from 2018. DNA's financial position and liquidity are expected to remain at a healthy level. The adoption of IFRS 16 from the beginning of 2019, is estimated to have a 17 million euros positive impact in EBITDA in 2019. The impact of IFRS 16 on operating result (EBIT) is insignificant. Net sales growth - faster than average market growth EBITDA margin of at least 34% (previous target was 32%), including IFRS16 impact Operative capital expenditure² less than 15% of sales Leverage policy Board's proposal for dividend for 2019 AGM Net debt/EBITDA less than 2.0 Can be temporarily exceeded in case of potential attractive bolt-on in-market M&A opportunities Board's dividend proposal for the 2018 financial year: EUR 0.70 per share and an extra dividend of EUR 0.40 per share In total EUR 1.10 per share, 6.4% payout ratio (as of 31 Dec 2018) Total payout of dividend and extra dividend EUR 145.3 million Notes 1. DNA's guidance for 2019 is disclosed includes the impact of adoption IFRS16 as of 1 January 2019. 2. Operative capex is capital expenditure excluding spectrum license payments and IFRS16 impact. DNA's Investor presentation, February 2019 40#41DNA DNA DNA's Annual General Meeting will take place at the Finlandia Hall in Helsinki on 28 March 2019 at 1pm Important dates related to AGM: Ex-dividend date 23 March, 2019 Record date for dividend payment 1 April, 2019 Proposed dividend payment date 10 April, 2019#42DПA Thank you! More information: DNA's Investor Relations Marja Mäkinen +358 44 044 1262, [email protected] W17#43Appendices Operational and financial KPI's Subscription prices Introduction for Consumer business Introduction for Corporate business ✓ Corporate responsibility and sustainability ✓ IR contact information#44DNA KPI Overview Mobile KPIs Fixed KPIs 2016 2017 2018 4Q/2017 4Q/2018 4Q/2018* 2016 2017 2018 4Q/2017 4Q/2018 4Q/2018* Mobile Revenue (EUR million) 539 586 634 161 168 169 Fixed Revenue (EUR Million) 320 300 280 74 70 68 Service 375 420 448 109 114 116 Non-Voice Revenues 288 273 256 67 64 62 Voice Revenues 32 28 24 7 6 6 Equipment Sales 111 114 135 38 41 41 Interconnection & Inbound Roaming 53 52 62 51 13 12 12 Fixed Broadband Subscriptions (000s) 440 458 481 458 481 481 Consumer 403 423 447 423 447 447 Mobile Subscriptions (000s)' 2 742 2 811 2 877 2 811 2 877 2 877 Corporate 37 36 34 36 34 34 Postpaid 2 338 2 418 2 480 2 418 2 480 2 480 Fixed Voice Subscriptions (000s) 65 53 41 53 41 41 Prepaid 404 392 397 392 397 397 Consumer 30 25 21 25 21 21 Consumer 2 262 2 252 2 287 2 252 2 287 2 287 Corporate 35 29 20 29 20 20 Corporate 480 559 590 559 590 590 Cable-TV Subscriptions (000s) 608 619 630 619 630 630 ARPU, Mobile Handset Subscriptions (EUR/month)² Notes Postpaid 17.1 18.4 18.8 19.0 18.9 18.9 1. Excludes M2M subscriptions 2. Includes interconnection revenues Prepaid 3.8 3.8 3.9 4.0 3.9 3.9 *Including IFRS 15 Consumer (postpaid) 18.0 19.6 20.4 20.4 20.5 20.4 Corporate (postpaid) 13.9 13.8 13.2 14.0 13.6 13.6 Annualised Mobile Handset Subscriptions Churn (%) Postpaid DNA's Investor presentation, February 2019 16.1% 18.3% 16.2% 18.1% 14.8% 14.8% 44#45DNA Examples of DNA subscription prices DNA Rajaton Monthly fee Data transfer speed EU-data package Domestic calls Domestic text & multimedia messages EUR 24,90/month 1 Mbits/s 10 Gt/month unlimited unlimited DNA Nopea 4G -subscriptions - Unlimited 100 Mbit/s 4G-internet at home and 10 Gt/month EU data package. Unlimited package or / per usages calls and text messages. DNA Paketti Monthly fee Data transfer speed EU-data package Domestic calls Domestic text & multimedia messages DNA Jämpti Monthly fee Data transfer speed EU-data package Domestic calls Domestic text messages DNA Puhe Monthly fee Data transfer speed EUR 17,90/month 1 Mbit/s 5 Gt/month in EU/ETA area 200 minutes 200 pcs EUR 12,90 /month 1 Mbit/s 5Gt/kk EUR 0.07 min EUR 0.07 / pc EUR 4,90/month EU-data package Domestic & in EU /ETA area calls Domestic & in EU /ETA area text & multimedia messages EUR 0.07 min EUR 0.07 / pc DNA Max 4G Rajaton Monthly fee Data transfer speed Domestic data EU-data package EUR 49.90/month 4G maxim speed in Finland unlimited 20 Gt/month in EU/ETA area Domestic & EU/ETA area calls, text & multimedia messages unlimited (wi-fi calls included) DNA Super 4G Rajaton Monthly fee Data transfer speed Domestic data EU-data package EUR 39.90/month 300 Mbit/s (4G in Finland) unlimited 15 Gt/month in EU /ETA area Domestic & EU/ETA area calls, text & multimedia messages unlimited (wi-fi calls included) DNA Nopea 4G Rajaton Monthly fee Data transfer speed Domestic data EU-data package EUR 34.90/month 100 Mbit/s (4G in Finland) unlimited 10 Gt/month in EU /ETA area Domestic & EU/ETA area calls, text & multimedia messages unlimited (wi-fi calls included) DNA Nopea 4G Jämpti Monthly fee Data transfer speed Domestic data EU-data package Domestic & in EU /ETA area calls Domestic & in EU /ETA area text & multimedia messages EUR 26.90/month 100 Mbit/s (4G in Finland) unlimited 10 Gt/month in EU/ETA area / EUR 0.07 min EUR 0.07/pc DNA's Investor presentation, February 2019 45#46DNA Consumer Business (75% OF NET SALES IN 2018) DNA provides its consumer customers with diverse services for communication and entertainment: smart phones, tablets and accessories; voice services in mobile and fixed networks; broadband services in mobile and fixed networks; and diverse entertainment services in cable, terrestrial and broadband networks. STRENGTHS Strong retail and online store sales We aim to provide straightforward, high- quality service in every channel, every time Clear and competitive product-service combinations for customers Smart phones and subscriptions Broadband subscriptions (mobile and fixed) Modern entertainment services DNA's Investor presentation, February 2019 ☐ GROWTH DRIVERS TV and entertainment business The increased adoption of smart phones, tablets and other smart devices as well as the wider availability of 4G speeds significantly boosts data transfer volumes 46#47DNA DNA's Consumer Business in brief Customer satisfaction is the key Mobile communications Entertainment Business Fixed broadband We improve the quality of our customer service and the efficiency of our operations systematically, introduce easy-to-use services needed by customers. Our customer service metrics have shown positive development in 2018 and DNA Store received record-high scores in NPS. Our extensive and fast 4G network makes us well-equipped to provide our customers with increasingly faster, high-quality connections. Our ARPU has strengthened in particular because DNA's customers switch to faster 4G subscriptions. We will start to offer 5G services during 2019 when 5G devices become to the market. We want it to be easy for everyone to find the entertainment content they want, regardless of the technology or devices. While traditional TV viewing minutes decreased, the use of streaming and on-demand video services continued to grow. Households are increasingly using both fixed-network and mobile broadband. DNA's fixed-network broadband subscription base grows steadily and the base increased by 23 000 subscriptions in 2018. Growth drivers Increasingly networked lifestyles, new TV and home entertainment services and growth of mobile data volumes are trends boosting operators' business. Net sales increased Net sales of our Consumer Business in 2018, amounting to EUR 685 million. Net sales were driven by the increasing demand for mobile services as well as good mobile device sales.#48DNA Corporate Business (25% OF NET SALES IN 2018) DNA provides easily deployable and high-quality mobile and fixed network communications and network services for companies and communities. STRENGTHS Extensive own fibre, backbone and distribution networks Mobile Network and Communications Services Enterprise Network Services Extensive mobile network, largely with IPv6 protocol Strong regional presence strategic priority Excellent price-quality ratio and customer-oriented product development Enterprise Network Security Enterprise Network Solution IoT - Smart Connectivity GROWTH DRIVERS The digitalisation of businesses and increasing use of cloud services require fast and high-quality network services The Industrial Internet and loT require more intelligent controlling and new technologies DNA's Investor presentation, February 2019 48#49DNA DNA's Corporate Business in brief Customer satisfaction is the key Comprehensive, fast and reliable network Pioneer in new ways of working Strong partner for companies, public corporations and integrators. Good services and expert customer service. High-quality networks are playing increasingly important role in the ecosystem of machines, information and people as the volume of data traffic is increasing. The network must be reliable and suited to the company's needs. Digitalisation is speeding up change in the working culture. We are creating new ways of working with the help of innovative tools, fast connections and reliable network services. Industrial Internet DNA introduced new DNA Connectivity IoT service developed with Cisco Jasper. With the service DNA's customers can develop and increase their loT services businesses across both national and international markets. Net sales remained steady Net sales in 2018 remained at a similar level year-on-year, amounting to EUR 227 million.#50DNA Significant new agreements and extensions to existing contracts with enterprises and the public sector City of Vantaa Large listed Finnish industrial corporation Finnish University and Research Network Funet A three-year extension agreement on the delivery of an even larger set of telecommunications services The solution includes all connections of the city, the LANS and WLANSs of offices, firewall services and the Internet connections, online authorisation solutions and optionally a cyber security service Contract period initially three years, after which continues until further notice The total value for the first three years is over EUR 8 million " A three-year agreement on the delivery of WAN network in Finland, mobile call centre and over 1,000 mobile subscriptions The total value of the agreement is over EUR 2 million CSC IT Center for Science and DNA Plc have agreed on the delivery of fibre optic connections for the Finnish University and Research Network Funet With the agreement, the number of fibre optic connections provided by DNA for the nationwide Funet data communications network increases significantly. Furthermore, the Funet network will be expanded across Finland with several new connections provided by DNA DNA's Investor presentation, February 2019 50#51DNA Additional information on corporate responsibility and sustainability DNA's corporate responsibility reporting is conducted in accordance with the Global Reporting Initiative (GRI) framework and published annually with the Annual Report DNA's Corporate Responsibility Reports are available on our investor website: https://corporate.dna.fi/reporting DNA's Corporate Responsibility Report has been assured by an independent external party DNA also reports to the CDP survey in terms of climate performance DNA's Investor presentation, February 2019 51#52DNA DNA Investor Relations Timo Karppinen CFO [email protected] +358 44 044 5007 Marja Mäkinen Head of IR [email protected] +358 44 044 1262 Meeting requests: Kirsi Kurki Executive Assistant [email protected] +358 44 044 2696 Follow us on: www.dna.fi/investors www.twitter.com/DNA_fi in www.linkedin.com/company/dna-ltd/ DNA's Investor presentation, February 2019 fwww.facebook.com/dna.fi www.instagram.com/dna_fi/ Next events: ✓ March 28, 2019: AGM 2019 ✓ April 25, 2019: Q1/2019 results 52