Quarterly report (Q1) 2008
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This document provides a summary of Tele2's financial and operational performance in Q1 2008. [1] Mobile services saw strong growth with EBITDA up 27% and 416,000 new customers. [2] Fixed broadband revenue increased 10% driven by Sweden and Netherlands. [3] Tele2 is pursuing a realignment while continuing to invest in core operations and potential acquisitions, with a target net debt to EBITDA ratio in line with peers.
Quarterly report (Q1) 2008
- 2. OUR MISSION
- 3. Our mission ”TO PROVIDE PRICE LEADING AND EASY-TO-USE TELECOM SERVICES”
- 4. CORE SERVICE
- 5. OUR CORE SERVICES ARE MOBILE SERVICES ON OWN INFRASTRUCTURE COMPLEMENTED BY FIXED BROADBAND
- 6. Q1 2008
- 7. Q1 2008 25 million customers in 15 countries
- 8. Q1 2008 MOBILE: Strong operational perf. – EBITDA increased by 27 percent to SEK 1,392 million FIXED BROADBAND: 11 percent revenue growth – focus on increased profitability FIXED TELEPHONY: Maintaining EBITDA contribution
- 9. Q1 2008 SUMMARY SEK million Q1-08 Q1-07 Growth % Operating revenue 10,378 9.551 8,7% EBITDA 1,764 1,558 13,2% EBIT 786 674 16,6%
- 10. OPERATING REVENUE 10000 9000 8000 7000 6000 Fixed broadband 5000 Fixed telephony 4000 Mobile 3000 2000 1000 0 Q1 2007 Q1 2008
- 11. EBITDA 2000 1500 Fixed broadband Fixed telephony 1000 Mobile 500 0 Q1 2007 Q1 2008 -500
- 12. MOBILE SERVICE CUSTOMERS: Robust intake of 416,000 customer EBITDA: 35 percent margin in Sweden, Russia and Baltic region MVNO agreements: Tele2 Norway and France
- 13. FIXED BROADBAND REVENUE: 10 percent growth driven by Sweden and Netherlands EBITDA: Fixed broadband must be able to compete with mobile services over time GERMANY: Careful marketing leading to less losses
- 14. FIXED TELEPHONY CUSTOMERS: Calculation of call-by-call customers effecting overall base EBITDA: Focus on maintaining contribution
- 15. SUMMARY MOBILE: Develop core mobile business – looking eastwards FIXED BROADBAND: Significantly improve profitability during 2008 FIXED TELEPHONY: Focus on maintaining EBITDA contribution
- 16. LARS NILSSON CFO
- 17. PROFIT & LOSS (All figures in MSEK) Q1-08 Q1-07 Continuing operations, Revenue 10,402 10,926 EBITDA 1,758 1,591 - EBITDA margin (%) 16,9% 14,6% Depreciation -915 -927 Sale of operations, net 83 -5 Associated comp. -64 -57 EBIT 862 602 - Normalized EBIT margin (%) 7,5% 5,6% Financial items -26 -279 Taxes -86 -22 Net Result 750 301
- 18. CASH FLOW (All figures in MSEK) Q1-08 Q1-07 (1) CF from continuing operations 1,425 652 Change in WC 82 -250 Cash flow from operating activities 1,507 402 CAPEX -999 -1,173 Acquisition/sale of shares -466 88 Change in long-term receivables 156 67 Cash Flow after investing activities 198 -616 (1) Including taxes paid -320 -682
- 19. NET DEBT TO EBITDA 3 2,5 2 1,5 1 0,5 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
- 20. FINANCIAL COMMENTS Tele2’s longer term financial leverage should reflect: - The status of its operations - The future strategic possibilities and obligations.
- 21. FINANCIAL COMMENTS cont. Tele2 is still pursuing its realignment process The company will also continue to invest in its core operations and also consider potential acquisitions.
- 22. FINANCIAL COMMENTS cont. Tele2’s view on a longer term target for financial leverage, defined as net debt/EBITDA ratio, is that it should be in line with the industry and the markets in which it operates.
- 23. NET INTAKE BY SEGMENT 1200 1000 800 600 Fixed broadband 400 Fixed telephony Mobile 200 0 -200 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 -400 -600
- 24. REVENUE BY SEGMENT 10000 9000 8000 7000 6000 5000 Fixed broadband 4000 Fixed telephony 3000 Mobile 2000 1000 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
- 25. EBITDA BY SEGMENT 2000 1500 Fixed broadband 1000 Fixed telephony Mobile 500 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 -500
- 26. EBIT BY SEGMENT 1500 1000 Fixed broadband 500 Fixed telephony Mobile 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 -500 -1000
- 27. CAPEX BY SEGMENT 1400 1200 1000 800 Fixed broadband 600 Mobile Other 400 200 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08
- 28. FINANCIAL COMMENTS: RUSSIA Financial impact of the 17 new licenses 2008: The operational expenditures are estimated to SEK 50–75 million and the capital expenditures are estimated to SEK 500–600 million 2009: the operational expenditures are estimated to SEK 175–200 million and capital expenditures are estimated to SEK 800–1,000 million
- 29. FINANCIAL COMMENTS: RUSSIA Financial impact of the 17 new licenses Four regions will have been launched as of 1H 2009 and five regions as of 2H 2009. New operations should be able to reach an EBITDA break-even three years after commercial launch date The longer term market share in the 17 new regions should not deviate significantly from the historic market share of Tele2 Russia
- 30. QUESTIONS?