Quarterly report (Q1) 2007

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Presentation Tele2s Quarterly report, 2007 (Q1)

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  • 1. Q 1 2007IAL RE PORT F INANCLars-Johan Jarnheimer President and CEO

2. TELE2: Q1 2007 RESULTS SEK MILLION20072006Q1Q1 Continuing operations Operating revenue12,837 12,243 Net customer intake (thousands) 281617 EBITDA1,4881,221 Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2 billion Strong broadband intake during Q1 2007, adding a total of 254,000 new broadband customers Fixed telephony EBITDA margin improved to 14 percent in Q1 2007 2 3. UP DATE ON THE CURRENT STRATEGIC REVIEW 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 authorities in May There is now a firm action plan for the MVNO businesses Current Strategic Review is progressing according to plan3 4. CONTINUED SHIFT TOWARDS INFRASTRUCTURE BASED SERVICESSales - Q1 2007Sales - Q1 200635%39% 42%51% 14% 19%Mobile MobileBroadband (resale & direct access) Broadband (resale & direct access) Fixed telephony resale Fixed telephony resale 4 5. EBITDA CONTRIBUTION WILL FOLLOWEBITDA contribution per segment(SEK) 2000 1500 10005000Q1 2007Q1 2006 -500 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)5 6. CONTINUED STRONG PERFORMANCE IN MOBILE TELEPHONY SEK MILLION2007 2006Q1 Q1 Mobile Telephony Operating revenue 5,219 4,038 Net customer intake (thousands) 747 909 EBITDA1,088 746 Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2 billion Russia and Baltic developing above expectations. Total customer base for the market area in 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 6 7. STRONG BROADBAND INTAKE SEK MILLION 2007 2006 Q1 Q1 Broadband resale, DA/LLUB Operating revenue2,276 1,602 Net customer intake (thousands)255 144 EBITDA-361-295 Strong broadband intake during Q1 2007, adding a total of 254,000 new broadband customers Broadband is being evaluated market by market. Italy showing strong gross margin development in the quarter7 8. TELE2 ITALY: DIRECT ACCESS ITA DLY AITA D LY A60% 52 %40% 20% 0%Q -06 3Q -06 4Q -07 1-20% -40% -60% -80%-100% Q -063Q -064Q -071 -120% N Intakeet Gross Margin 2 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 effects8 9. STABLE MARGIN INCREASED COMPETITION SEK MILLION20072006Q1Q1 Fixed telephony resale Operating revenue4,796 6,017 Net customer intake (thousands) -720-436 EBITDA 649 662 Fixed telephony EBITDA margin improved to 14 percent in Q1 2007 Higher level of competition from primarily mobile operators Larger net customer outflow Stronger ARPU decline than expected Cross selling still an important opportunity 9 10. Q1 2007 SUMMERIZED Strong development in Mobile Telephony, with a revenue growth of 29 % in Q1 Continued strong broadband intake during Q1 2007, adding 254,000 new broadband customers Improving EBITDA margins in fixed line. However, competition is increasingTELE2: CONTINUED OPERATIONS Important for Tele2 to moveswiftly into more infrastructureMSEK Q1 2007 Q1 2006based operationsOperating revenue* 12,837 12,243 +5 %EBITDA* 1,4881,221 +22 %Net intake (000)281617 -54 % *Excluding non-recurring items10 11. NO CHANGE TO FINANCIAL GUIDENCE ON 2007 Outlook for 2007 remains unchanged:We expect significantly higher EBITDA and higher organic growth compared to 2006 11 12. Q 1 2007IAL RE PORT F INANC Donna CordnerEVP Corporate Finance & Treasury 13. FINANCIAL OVERVIEW FOR Q1 2007 CONTINUING OPERATIONS Q1 2007 Difference to Q1 2007 Revenues (MSEK)12,837594 5%EBITDA (MSEK) 1,488267 22%CAPEX (MSEK)1,1813 0%Customer Net Additions (thousands) 281 -336 -54%13 14. OPERATING REVENUE PER SEGMENTMOBILE(MSEK) (MSEK)FIXED TELEPHONY RESALE6 00010 000 8 0004 5006 000 3 000 4 0001 5002 00000Q4Q1 Q2Q3 Q4 Q1 Q4 Q1Q2Q3 Q4 Q12006 2007 2006 2007BROADBAND RESALEDIRECT ACCESS & LLUB(MSEK)(MSEK) 1 000 1 800 9001 600800 1 400700 1 200600 1 000500800400 300 600 200 400 100 200 0 0 Q4 Q1Q2Q3 Q4 Q114 Q4 Q1 Q2Q3 Q4 Q1 20062007 2006 2007 15. EBITDA AND NET INTAKE PER SEGMENTMOBILEFIXED TELEPHONY RESALE MSEK'000MSEK '0001 6001 000 600 1 2001 400400 800200 1 0001 200 0800 1 000600 -200800600 -400600 400400-600400 -800200200200 -1 0000 00-1 200Q4 Q1 Q2 Q3Q4Q1Q4 Q1Q2Q3Q4Q1 2006 20072006 2007 EBITDA Net intakeEBITDANet intakeBROADBAND RESALE DIRECT ACCESS & LLUB MSEK '000 MSEK'000150100 100 50100 2100 50 50 -50 160 -100 0 0Q4 Q1Q2 Q3Q4Q1 110-150 -50 20062007-200 -50 60-250-100 -300 -10010-150Q4 Q1Q2 Q3 Q4 Q12006 2007EBITDANet intake-200 -40EBITDA Net intake15 16. P&L IMPACT FROM BROADBAND GROWTHQ1 2007Q4 2006 Q3 2006 P&L impact from Broadband growth (MSEK)445335 250 NET INTAKE Broadband resale (000) 444239 Direct access and LLUB (000)210 211 113 ACQUISITION COST Broadband resale (SEK)1,550 1,450 2,050 Direct access and LLUB (SEK)1,800 1,300 1,500 Italy showing stronger intake of DA/ULL customers directly, rather than migrating customers from existing broadband resale base Launch of broadband services in Portugal affecting SAC negatively. 16 17. MOBILE SALES +29 % MOBILE MOBILE (MSEK) MSEK'000 6 000 1 600 1 200 1 4004 500 1 000 1 200 8001 0003 000 800600 600400 1 500 400 200 200 0 00Q4Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2Q3 Q4 Q1 200620072006 2007SalesEBITDANet intake 17 18. RUSSIA SALES +135 %Russia Mobile Russia Mobile MSEK MSEK'000 1 200350 1 200 300 1 0001 000250800 800200 600 150 600400 100400 5020020000-50 0Q4 Q1Q2 Q3 Q4 Q1 Q4 Q1 Q2Q3 Q4 Q1200620072006 2007Sales EBITDA Net intake 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 % 18 19. BALTIC MOBILE SALES +18 %Baltic Mobile Baltic MobileMSEK MSEK '0001 200450 250400 1 000200 350300 800 150 250200 600 100 150 400 100 50 50200 0 0 Q4Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q12006200720062007 SalesEBITDA 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 percent of the corporate market 19 20. SWEDEN MOBILE SALES +8 %Sweden Mobile Sweden MobileMSEK MSEK'000 1 000802 0006080040 1 50060020 1 0000400 -20 500 200-400 -600Q4 Q1 Q2 Q3Q4 Q1 Q4Q1Q2 Q3 Q4 Q1 2006 200720062007Sales EBITDANet intake EBITDA-margin effected by higher marketing costs in Q1 2007 More than 48 000 post-paid net adds in Q1 20 21. NORDIC EXCL. SWEDENMOBILE SALES +30 %Nordic excl. Sweden - Mobile Nordic excl. Sweden - Mobile MSEK MSEK'000 8008010060806006040 40 4002020 0 Q4 Q1Q2 Q3 Q4 Q1 0 200-2020062007-20 -40 0-40Q4 Q1 Q2 Q3Q4 Q1-60 -60 2006 2007 SalesEBITDA Net intake 21 22. NET DEBTNet debtMSEK 18 000 3,6 3,2 15 0002,812 000 2,4 2,09 0001,6 6 000 1,2 0,83 0000,400,0 Q1 Q2Q3Q4Q1 Q2Q3 Q4 Q12005 2006 2007 Net DebtNet Debt to EBITDA 22 23. DO NOT FORGET ContactsVisit www.tele2.comLars-Johan Jarnheimer Telephone: + 46 (0)8 562 640 00 Conference call today President and CEO, Tele2 ABat 15.00 CETWeb-cast at www.tele2.comLars Torstensson Telephone: + 46 (0) 702 73 48 79 Q2 2007: 25 July 2007IR Director, Tele2 AB23