Post on 16-Jun-2015
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Q1 2007FINANCIAL REPORT
Lars-Johan JarnheimerPresident and CEO
2
TELE2: Q1 2007 RESULTS
• Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2billion
• Strong broadband intake during Q1 2007, adding a total of 254,000new broadband customers
• Fixed telephony EBITDA margin improved to 14 percent in Q1 2007
SEK MILLION 2007 2006Q1 Q1
Continuing operationsOperating revenue 12,837 12,243Net customer intake (thousands) 281 617EBITDA 1,488 1,221
3
UP DATE ON THE CURRENT STRATEGICREVIEW• We will see result of the current strategic review in the
second quarter• The first transaction is likely in the next couple of weeks• The transaction between Tele2 and SFR will receive a
preliminary indication from the EU competition authoritiesin May
• There is now a firm action plan for the MVNO businesses
CurrentStrategicReview isprogressingaccording toplan
4
CONTINUED SHIFT TOWARDSINFRASTRUCTURE BASED SERVICES
Sales - Q1 2007
42%
19%
39%
Sales - Q1 2006
35%
14%
51%
Sales - Q1 2007
42%
19%
39%
Mobile Broadband (resale & direct access) Fixed telephony resale
Sales - Q1 2006
35%
14%
51%
Mobile Broadband (resale & direct access) Fixed telephony resale
5
EBITDA CONTRIBUTION WILL FOLLOWEBITDA contribution per segment
-500
0
500
1000
1500
2000
Q1 2007 Q1 2006
(SEK)
Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
6
SEK MILLION 2007 2006Q1 Q1
Mobile TelephonyOperating revenue 5,219 4,038Net customer intake (thousands) 747 909EBITDA 1,088 746
CONTINUED STRONG PERFORMANCEIN MOBILE TELEPHONY
• Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2billion
• Russia and Baltic developing above expectations.Total customer base for the market areain excess of 10.8 million
• Mixed development in MVNO.• Clean up of customer base in the Nordic market area by
approximately 900,000 in Q2 2007
7
SEK MILLION 2007 2006Q1 Q1
Broadband resale, DA/LLUBOperating revenue 2,276 1,602Net customer intake (thousands) 255 144EBITDA -361 -295
STRONG BROADBAND INTAKE
• Strong broadband intake during Q1 2007, adding a total of254,000 new broadband customers
• Broadband is being evaluated market by market.– Italy showing strong gross margin development in the
quarter
8
TELE2 ITALY: DIRECT ACCESS
• Coverage improved to 40 % of Italian households.• Tele2 looks to expand beyond 50 %
• Up-selling from single to dual play services• Larger customer base leading to scale effects
ITALY DA
Q3 -06 Q4 -06 Q1 -07
Net Intake
ITALY DA
-120%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Q3 -06 Q4 -06 Q1 -07
Gross Margin 2
52 %
9
STABLE MARGIN – INCREASEDCOMPETITION
• Fixed telephony EBITDA margin improved to 14 percent in Q12007
• Higher level of competition from primarily mobile operators– Larger net customer outflow– Stronger ARPU decline than expected
• Cross selling still an important opportunity
SEK MILLION 2007 2006Q1 Q1
Fixed telephony resaleOperating revenue 4,796 6,017Net customer intake (thousands) -720 -436EBITDA 649 662
10
Q1 2007 SUMMERIZED
• Strong development in MobileTelephony, with a revenue growthof 29 % in Q1
• Continued strong broadbandintake during Q1 2007, adding254,000 new broadbandcustomers
• Improving EBITDA margins infixed line. However, competition isincreasing
– Important for Tele2 to moveswiftly into more infrastructurebased operations
Operating revenue*EBITDA*
Net intake (‘000)
TELE2: CONTINUED OPERATIONS
12,837
1,488281
12,243
1,221617
+5 %
+22 %-54 %
Q1 2007 Q1 2006MSEK
*Excluding non-recurring items
11
NO CHANGE TO FINANCIAL GUIDENCE ON 2007
• Outlook for 2007 remains unchanged:
“We expect significantly higher EBITDA and higher organicgrowth compared to 2006”
Q1 2007FINANCIAL REPORT
Donna CordnerEVP Corporate Finance & Treasury
13
FINANCIAL OVERVIEW FOR Q1 2007 –CONTINUING OPERATIONS
3 0%1,181CAPEX (MSEK)
-336 -54%281Customer Net Additions (thousands)
267 22%
594 5%
1,488EBITDA (MSEK)
12,837Revenues (MSEK)
Difference to Q1 2007Q1 2007
14
OPERATING REVENUE PER SEGMENTMOBILE
0
1 500
3 000
4 500
6 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
(MSEK) FIXED TELEPHONY RESALE
0
2 000
4 000
6 000
8 000
10 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
(MSEK)
BROADBAND RESALE
0
100
200
300
400
500
600
700
800
900
1 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
(MSEK)
DIRECT ACCESS & LLUB
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
(MSEK)
15
EBITDA AND NET INTAKE PER SEGMENTMOBILE
0
200
400
600
800
1 000
1 200
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
0
200
400
600
800
1 000
1 200
1 400
1 600
'000
EBITDA Net intake
FIXED TELEPHONY RESALE
0
200
400
600
800
1 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
-1 200
-1 000
-800
-600
-400
-200
0
200
400
600'000
EBITDA Net intake
BROADBAND RESALE
-300
-250
-200
-150
-100
-50
0
50
100
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
-100
-50
0
50
100
'000
EBITDA Net intake
DIRECT ACCESS & LLUB
-200
-150
-100
-50
0
50
100
150
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
-40
10
60
110
160
210
'000
EBITDA Net intake
16
P&L IMPACT FROM BROADBAND GROWTH
1,300 Direct access and LLUB (SEK)
NET INTAKE
335P&L impact from Broadband growth (MSEK)
42Broadband resale (’000)
211Direct access and LLUB (’000)
ACQUISITION COST1,450 Broadband resale (SEK)
1,500
250Q1 2007
39
113
2,050
Q3 2006Q4 2006
1,800
445
44
210
1,550
• Italy showing stronger intake of DA/ULL customers directly,rather than migrating customers from existing broadbandresale base
• Launch of broadband services in Portugal affecting SACnegatively.
17
MOBILE SALES +29 %MOBILE
0
1 500
3 000
4 500
6 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
(MSEK)
Sales
MOBILE
0
200
400
600
800
1 000
1 200
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
0
200
400
600
800
1 000
1 200
1 400
1 600
'000
EBITDA Net intake
18
RUSSIA SALES +135 %
• Net intake of 644,000 customers to a total of 7,1 million customers
• ARPU of 52 SEK in Q1 2007 compared to 42 SEK in Q1 2006
• EBITDA margin 28 %
Russia Mobile
0
200
400
600
800
1 000
1 200
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
Sales
Russia Mobile
-50
0
50
100
150
200
250
300
350
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
0
200
400
600
800
1 000
1 200'000
EBITDA Net intake
19
BALTIC MOBILE SALES +18 %Baltic Mobile
200
400
600
800
1 000
1 200
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
Sales
Baltic Mobile
0
50
100
150
200
250
300
350
400
450
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
0
50
100
150
200
250'000
EBITDA Net intake
• Revenue growth for the Baltic region was strong at 19 percent
– All 3 countries had double digit sales growth
• EBITDA for the Baltic region grew 25 percent
• In Lithuania Tele2 has been able to capture 11 percentof the corporate market
20
SWEDEN MOBILE SALES +8 %
• EBITDA-margin effected by higher marketing costs in Q1 2007• More than 48 000 post-paid net adds in Q1
Sweden Mobile
0
500
1 000
1 500
2 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
Sales
Sweden Mobile
0
200
400
600
800
1 000
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
-60
-40
-20
0
20
40
60
80'000
EBITDA Net intake
21
NORDIC EXCL. SWEDENMOBILE SALES +30 %
Nordic excl. Sweden - Mobile
0
200
400
600
800
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
Sales
Nordic excl. Sweden - Mobile
-60
-40
-20
0
20
40
60
80
Q4 Q1 Q2 Q3 Q4 Q1
2006 2007
MSEK
-60
-40
-20
0
20
40
60
80
100
'000
EBITDA Net intake
22
NET DEBTNet debt
0
3 000
6 000
9 000
12 000
15 000
18 000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2005 2006 2007
MSEK
0,0
0,4
0,8
1,2
1,6
2,0
2,4
2,8
3,2
3,6
Net Debt Net Debt to EBITDA
23
DO NOT FORGET
• Conference call todayat 15.00 CETWeb-cast at www.tele2.com
• Q2 2007: 25 July 2007
Visit www.tele2.comContactsLars-Johan JarnheimerTelephone: + 46 (0)8 562 640 00President and CEO, Tele2 AB
Lars TorstenssonTelephone: + 46 (0) 702 73 48 79IR Director, Tele2 AB