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Quarterly report (Q4) 2007

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Presentation Tele2s Quarterly report 2007 (Q4)

Presentation Tele2s Quarterly report 2007 (Q4)


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  • 1. Tele2 Q4 2007 12 February 2008 Lars-Johan Jarnheimer President & CEO
  • 2. 2007 – an eventful year REALIGNMENT PROCESS IMPROVED PROFITABILITY Divestment of non-core Investment in core operations Limit scale and scope to areas where we get superior return INCREASED OPERATIONAL FOCUS Mobile services on own 2 infrastructure
  • 3. Q4 2007 Summary Continued investments in mobile operations Completed divestments of Italy, Spain, Belgium and Hungary Announced divestment of Austrian MVNO operation Increased ownership in Tele2 Netherlands Holding (former Versatel) to 99 percent 3
  • 4. Q4 2007 Summary SEK million Q4-07 Q4-06 Growth % Operations less divested companies Operating revenue 10,447 9,731 +7.4 - Mobile 5,981 5,022 +19.1 - Broadband 1,590 1,343 +18.4 - Fixed telephony 2,472 2,971 -16.8 EBITDA 1,564 1,506 +3.9 EBIT 247 708 -65.1 Board of Directors proposes an ordinary dividend of SEK 3.15 (1.85) per share, a special dividend of SEK 4.70 per share and the authorisation to purchase up to 10% of own shares 4
  • 5. Operational Shift Sales EBITDA 40 000 7 000 -19% 10 365 1 725 30 000 12 751 5 000 2 037 5 803 +20% 20 000 4 853 3 000 +24% 5 260 3 829 10 000 22 503 1 000 18 159 -374 -639 0 -1 000 FY 2006 FY 2007 FY 2006 FY 2007 Mobile Broadband Fixed telephony Mobile Broadband Fixed telephony 5
  • 6. Mobile Telephony Q4 2007 Mobile revenue grew 19% y-o-y to MSEK 5,981 = 57% of Group revenue Network EBITDA grew 30% to MSEK 1,305 = MVNO 83% of Group EBITDA Net customer intake 714,000 92,000 in Sweden 554,000 in Russia 6
  • 7. Mobile – Sweden Strong intake of post-paid and mobile broadband customers 10% Revenue growth 35% EBITDA margin Continued growth in mobile broadband 48,000 new mobile broadband customers in Q4 - total customer base 93,000 Strong growth to continue in 2008 resulting in higher acquisition cost Mobile Broadband Customers 100 000 80 000 60 000 40 000 20 000 0 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 7 Mobile Broadband Customers
  • 8. Mobile – Norway Slower customer intake (+1,000) due to migration process to Netcom network New MVNO agreement with Netcom effective as of Q2 2008 will significantly improve underlying profitability 6% EBITDA margin in Q4 2007 Revenue growth 19% 8
  • 9. Mobile – Russia Customer intake of 554,000 in line with business plan Revenue growth 54% EBITDA margin 31% (26%) 17 new regional GSM 1800 licenses awarded in Q4 ARPU increased to SEK 58 in Q4 2007 vs SEK 55 in Q4 2006 9
  • 10. Mobile – Baltic & Croatia BALTIC COUNTRIES Strong customer intake in Lithuania (+43,000) and Estonia (+3,000), Latvia (-6,000) slowing down Double-digit revenue growth in Estonia and Lithuania EBITDA decline in Lithuania and Latvia mainly due to increased marketing in corporate segment Baltic economies cooling down CROATIA Significantly improved roaming agreement in Croatia effective June 2008 Awarded 900 MHz frequency meaning more efficient build out 56% revenue growth with improving EBITDA 10
  • 11. Broadband Q4 2007 Direct Access & LLUB sales growth 18% DA & LLUB net intake 77,000; resold broadband -8,000 Network Migration of resold customers onto DA & LLUB Resold particularly in Norway, Sweden and Austria Solid growth in DA & LLUB in Austria with lower EBITDA due to increased marketing spend Success in Netherlands in Corporate segment 11
  • 12. Broadband Q4 2007, cont Germany EBITDA decrease Still tough competition Direct Access & LLUB customer intake of 15,000 Fixed fee to Plusnet burden EBITDA in Q4 2007 Broadband profitability improvement is key in 2008 12
  • 13. Fixed Telephony Q4 2007 EBITDA margin 18.5% (18.6%) Revenue decline continues, –17% y-o-y Customer net loss –204,000 We will maximize value of declining fixed customer base through continued cost consciousness 13
  • 14. Summary In 2008… Core businesses – mobile Develop core businesses to services on own stay best in class infrastructure complemented by broadband: Increased management Good revenue growth focus on core areas Strong customer intake Solid profitability Improved margins and cash flow, focus on ROCE 14
  • 15. Tele2 Q4 2007 12 February 2008 Lars Nilsson CFO
  • 16. Q4 2007 Key Figures less Divested Operations (All figures in MSEK) Q4 2007 Q4 2006 FY 2007 FY 2006 Revenues 10,447 9,731 40,313 37,113 EBITDA 1,564 1,506 6,636 5,782 EBITDA % 15.0 15.5 16.5 15.6 EBIT 247 708 1,285 299 EBIT % 2.4 7.3 3.2 0.8 16
  • 17. Q4 2007 Continuing Operations (All figures in MSEK) Q4 2007 Q4 2006 FY 2007 FY 2006 Revenues 10,453 11,152 43,420 43,098 EBITDA 1,500 1,556 6,647 5,776 EBITDA % 14.3 14.0 15.3 13.4 One-off items -324 50 -324 93 Depreciation -945 -872 -4,028 -3,413 Write-down of goodwill -5 - -1,315 -2,457 Sale of operations -88 -17 739 30 Associated comp. -60 -42 -234 -135 EBIT 78 675 1,485 -106 EBIT % 0.7 6.1 3.4 -0.2 Financial items -103 -160 -726 -562 Taxes -143 -265 -1,061 -335 Net result -168 250 -302 -1,003 17
  • 18. Cash Flow* (All figures in MSEK) Q4 2007 Q4 2006 FY 2007 FY 2006 CF from operations 1,339 1,048 4,488 4,979 Change in WC -367 -452 -138 -1,132 Cash Flow from operating activities 972 596 4,350 3,847 CAPEX -1,315 -1,422 -5,169 -5,520 Acquisition/sale of shares 6,351 -49 11,777 -1,315 Change in long-term receivables 161 -260 -6 -101 Cash Flow after investing activities 6,169 -1,135 10,952 -3,089 CAPEX Continuing operations -1,220 - 1,210 - 4,269 -4,316 *Including discontinued operations 18
  • 19. Cash Flow Effect from Realignment Process Acquisitions (All figures in MSEK) FY 2007 Versatel, minority interest -871 Telecom Eurasia, Russia -105 Mobile Norway, JV -203 Tele2 Syd, minority interest -135 Other -7 Total Cash Flow effect -1,321 19
  • 20. Cash Flow Effect from Realignment Process Divestments (All figures in MSEK) FY 2007 Italy + Spain 6,739 Belgium 862 Portugal 125 Irkutsk, Russia 1,570 France 2,874 Denmark 743 Hungary 36 Other 257 Total Cash Flow effect 13,206 20
  • 21. Net Debt to EBITDA Net Debt and Net Debt/EBITDA 20 000 3,0 18 000 16 000 2,5 14 000 2,0 12 000 10 000 1,5 8 000 6 000 1,0 4 000 0,5 2 000 0 0,0 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Continuing operations 21
  • 22. Net Intake by Segment ('000) 1 400 1 200 1 000 800 600 400 200 0 -200 -400 -600 -800 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Mobile telephony Fixed telephony Broadband (resale, direct & LLUB) Net customer intake Continuing operations 22
  • 23. Revenue by Segment (MSEK) 12 000 10 000 8 000 6 000 4 000 2 000 0 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Mobile telephony Fixed telephony (resale) Broadband (resale, direct & Continuing operations 23
  • 24. EBITDA by Segment (MSEK) 2 000 1 500 1 000 500 0 -500 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Mobile telephony Fixed telephony (resale) Broadband (resale, direct & LLUB) Continuing operations 24
  • 25. EBIT* by Segment (MSEK) 1 500 1 000 500 0 -500 -1 000 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Mobile telephony Fixed telephony (resale) Broadband (resale, direct & LLUB) * Excl. non-recurring items Continuing operations 25
  • 26. Questions? 26
  • 27. Investor Relations: Lars Torstensson Telephone: + 46 702 73 48 79 Visit www.tele2.com Q1 08: 23 April 2008 AGM: 14 May 2008 27
  • 28. Appendix
  • 29. Russia (MSE Sales (MSEK) EBITDA vs Net Intake '000 K) 1600 500 1000 1400 1200 400 800 1000 300 600 800 600 200 400 400 100 200 200 0 0 0 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Continuing operations EBITDA Net Intake Revenue growth 54% year-on-year EBITDA margin 31% 8.6 million customers 29
  • 30. Sweden Mobile Sales (MSEK) '000 (MSEK) EBITDA vs Net Intake 2000 1000 120 800 100 1500 80 600 1000 60 400 40 500 200 20 0 0 0 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 EBITDA Net Intake Revenue growth 10% year-on-year EBITDA margin 35% 30