Quarterly report (Q1) 2010
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Quarterly report (Q1) 2010

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Tele2, Quarterly report (Q1) 2010

Tele2, Quarterly report (Q1) 2010

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  • 1. FIRST QUARTER 2010 21 April 2010
  • 2. AGENDA About Q1 2010 Financial review Concluding remarks 2 2010-04-21 First quarter 2010
  • 3. HIGHLIGHTS Q1 Robust operational result • Nordic – Sweden mobile revenue grew by 3 percent – Mobile margin Sweden 35 percent • Russia – Highest ever EBITDA contribution • EBITDA amounted to 719 SEK million – 949 000 new customers • Central Europe & Eurasia – Sustained cash flow contribution – Welcoming Kazakhstan, our newest member in the Tele2 group • Western Europe – Further success in corporate segment 3 2010-04-21 First quarter 2010
  • 4. HIGHLIGHTS TELE2 SWEDEN • Adding 29 000 new postpaid • New accounting treatment for customers, of which: handsets sold with monthly – 15 000 mobile internet instalments – 14 000 mobile voice EBITDA margin - New accounting standard • Continued revenue growth 36% EBITDA margin - Old accounting standard – Driven by mobile 35% 34% • EBITDA amounted to 794 SEK 33% million 32% 31% 30% • Continued focus on growth in postpaid segment 29% 28% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 4 2010-04-21 First quarter 2010
  • 5. HIGHLIGHTS TELE2 RUSSIA Net Intake - New regions Net Intake - Old regions EBITDA margin 1400 38% 36% 1200 34% 1000 32% (In thousands) 800 30% 600 28% 26% 400 24% 200 22% 0 20% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 5 2010-04-21 First quarter 2010
  • 6. HIGHLIGHTS TELE2 NETHERLANDS • Gold standard for the group in the corporate segment – Successful Best Deal strategy • EBITDA increased to SEK 611 (594) million in the quarter 6 2010-04-21 First quarter 2010
  • 7. HIGHLIGHTS TELE2 BALTIC REGION EBITDA CAPEX EBITDA - CAPEX 500 400 300 (SEK million) 200 100 0 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 -100 -200 7 2010-04-21 First quarter 2010
  • 8. AGENDA About Q1 2010 Financial review Concluding remarks 8 2010-04-21 First quarter 2010
  • 9. Q1 2010 GROUP RESULTS SEK million Q1 10 Q1 09 Change % Continuing operations, Net Sales 9,535 9,828 -3% EBITDA 2,358 2,244 5% - EBITDA margin (%) 24,7% 22,8% Depreciation and joint venture -809 -893 - Depreciation of net sales (%) 8,5% 9,1% One-off items -3 -4 EBIT 1,549 1,351 Normalized EBIT 1,546 1,347 - Normalized EBIT margin (%) 16,2% 13,7% Financial items 42 -592 Taxes -339 -281 Net result, continuing operations 1,249 474 Net result, discontinued operations 19 197 Net result 1,268 671 9 2010-04-21 First quarter 2010
  • 10. TAXES Taxes in income statement (MSEK) One-Off Normal Reported Q1 - -339 -339 Taxes in cash flow statement (MSEK) One-Off Normal Reported Q1 - -233 -233 In 2010: Tele2 forecast a corporate tax rate of approximately 22 (earlier 20) percent excluding one-off items. The tax payment will affect cash flow by approximately SEK 800 (earlier 700) million due to better than expected operational performance in Tele2 Russia. 10 2010-04-21 First quarter 2010
  • 11. CASH FLOW FOR Q1 2010 SEK million Q1 10 Q1 09 OPERATING ACTIVITIES Cash flow from operations, less paid taxes 2,341 1,923 Taxes paid -233 -456 Changes in working capital 183 364 CASH FLOW FROM OPERATING ACTIVITIES 2,291 1,831 INVESTING ACTIVITIES CAPEX -608 -1,149 Cash Flow after CAPEX 1,683 682 Acquisition and sale of shares and participations, net -819 -97 864 585 11 2010-04-21 First quarter 2010
  • 12. ROCE 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2007 2008 2009 2010 12 2010-04-21 First quarter 2010
  • 13. GROUP FINANCIAL PROFILE Net debt Net debt incl. JV Net debt/ EBITDA 2009 Net debt incl. JV/ EBITDA 2009 25 000 2,5 20 000 2 (SEK million) 15 000 1,5 10 000 1 5 000 0,5 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 07 07 07 08 08 08 08 09 09 09 09 10 13 2010-04-21 First quarter 2010
  • 14. GROUP NET INTAKE PER SEGMENT Mobile Fixed broadband Fixed telephony 1 400 1 200 1 000 (In thousands) 800 600 400 200 0 -200 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 -400 14 2010-04-21 First quarter 2010
  • 15. GROUP CUSTOMER STOCK Group Customer Stock Group Mobile Customer Stock Mobile Fixed Broadband Fixed Telephony Prepaid voice Postpaid voice Mobile Internet 25 000 30 000 25 000 20 000 (In thousands) (In thousands) 20 000 15 000 15 000 10 000 10 000 5 000 5 000 0 0 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 • Strong intake in the mobile segment – Driven by Russia adding 949 000 new customers 15 2010-04-21 First quarter 2010
  • 16. GROUP EBITDA Mobile Fixed broadband Fixed telephony Other Group EBITDA margin 3 000 26% 2 500 2 000 (SEK million) 24% 1 500 1 000 22% 500 0 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 -500 20% 16 2010-04-21 First quarter 2010
  • 17. GROUP MOBILE EBITDA Mobile EBITDA on own infrastructure Mobile EBITDA (MVNO) Mobile EBITDA margin on own infratsructure Total mobile EBITDA margin 1 800 34% 1 750 1 700 32% 1 650 (SEK million) 30% 1 600 28% 1 550 1 500 26% 1 450 24% 1 400 1 350 22% 1 300 20% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 17 2010-04-21 First quarter 2010
  • 18. MoU AND ARPU DEVELOPMENT Sweden Russia 220 260 60 240 240 50 220 200 SEK SEK 220 180 40 200 200 160 180 30 180 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 ARPU MoU ARPU MoU • Relatively stable development – Swedish ARPU being diluted by an increasing customer base in Mobile Internet and softness in corporate customer MoU 18 2010-04-21 First quarter 2010
  • 19. TELE2 GOING FORWARD • Best Deal position – Perceived price leader – Expected quality • Targeting a long term mobile EBITDA margin on own infrastructure at least 35 percent • All operations should have the ambition of reaching ROCE of at least 20 percent • The capability to reach a top 2 position, in terms of customer market share, in an individual country or region 19 2010-04-21 First quarter 2010
  • 20. SWEDEN OUTLOOK • Tele2 will continue to target the postpaid segment, which in the longer term will lead to: – Increased ARPU – Lower churn • In the short term, this strategy will lead to higher total acquisition costs resulting in: – A full year EBITDA margin in the range of 33-35 percent depending on customer intake 20 2010-04-21 First quarter 2010
  • 21. RUSSIA OUTLOOK • Subscriber base should be able to reach 19-20 million by YE 2011 • Maintain ARPU growth at 5 percent by 2011 • EBITDA 2010-2011 – Old regions’ EBITDA margin should stabilize at 45 percent – New regions’ EBITDA margin should break even 2 years from launch – EBITDA contribution from new regions should be in the range of SEK -600 to -800 million – Russia’s total EBITDA margin should develop in the range of 27-32 percent • Capex 2010-2011 – Accumulated Capex in Russia should be in the range of SEK 4.5-5.0 billion • Selected acquisitions – when available and under right conditions 21 2010-04-21 First quarter 2010
  • 22. CROATIA OUTLOOK ”WE WILL REACH EBITDA BREAK EVEN DURING 2H 2010” 22 2010-04-21 First quarter 2010
  • 23. AGENDA About Q1 2010 Financial review Concluding remarks 23 2010-04-21 First quarter 2010
  • 24. CONCLUDING REMARKS Nordic 2010 an investment year • Continued revenue growth • Russia Russia • Kazakhstan • Record high EBITDA • 4G Sweden Central Europe and Eurasia • 3G Norway • Stable cash flow contribution Western Europe • Solid operational performance 24 2010-04-21 First quarter 2010
  • 25. Q&A 25 2010-04-21 First quarter 2010
  • 26. Appendix A 26 2010-04-21 First quarter 2010
  • 27. TELE2 SWEDEN MOBILE Mobile subscribers Net intake 3 500 120 3 400 100 3 300 80 (In thousands) (In thousands) 3 200 60 3 100 40 3 000 2 900 20 2 800 0 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 27 2010-04-21 First quarter 2010
  • 28. TELE2 SWEDEN MOBILE (contd) Mobile net sales EBITDA marg. EBIT marg. 2 050 40% 2 000 1 950 36% 1 900 (SEK million) 32% 1 850 1 800 28% 1 750 1 700 24% 1 650 1 600 20% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 28 2010-04-21 First quarter 2010
  • 29. TELE2 SWEDEN MOBILE (contd) Postpaid voice Prepaid voice Mobile Internet 4 000 3 500 3 000 (In thousands) 2 500 2 000 1 500 1 000 500 0 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 29 2010-04-21 First quarter 2010
  • 30. TELE2 NORWAY MOBILE Mobile subscribers Net intake 480 25 460 20 15 440 (In thousands) (In thousands) 10 420 5 400 0 380 -5 360 -10 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 30 2010-04-21 First quarter 2010
  • 31. TELE2 NORWAY MOBILE (contd) Mobile net sales EBITDA marg. 700 10% 9% 650 8% 7% (SEK million) 600 6% 5% 550 4% 3% 500 2% 1% 450 0% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 31 2010-04-21 First quarter 2010
  • 32. TELE2 RUSSIA MOBILE Mobile subscribers Net intake 18 000 1 400 16 000 1 200 14 000 1 000 12 000 (In thousands) (In thousands) 10 000 800 8 000 600 6 000 400 4 000 200 2 000 0 0 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 32 2010-04-21 First quarter 2010
  • 33. TELE2 RUSSIA MOBILE (contd) Mobile net sales EBITDA marg. 2 500 36% 35% 2 000 34% (SEK million) 1 500 33% 1 000 32% 31% 500 30% 0 29% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 33 2010-04-21 First quarter 2010
  • 34. TELE2 BALTIC MOBILE Mobile subscribers Net intake 4 000 40 3 600 20 3 200 2 800 0 (In thousands) (In thousands) 2 400 -20 2 000 -40 1 600 1 200 -60 800 -80 400 0 -100 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 34 2010-04-21 First quarter 2010
  • 35. TELE2 BALTIC MOBILE (contd) Estonia net sales Lithuania net sales Latvia net sales EBITDA marg. 1200 40% 1000 800 35% (SEK million) 600 400 30% 200 0 25% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 35 2010-04-21 First quarter 2010
  • 36. TELE2 CROATIA MOBILE Mobile subscribers Net intake 850 100 750 80 60 650 (In thousands) (In thousands) 40 550 20 450 0 350 -20 250 -40 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 36 2010-04-21 First quarter 2010
  • 37. TELE2 CROATIA MOBILE (contd) Mobile net sales EBITDA marg. 400 0% 350 -5% -10% 300 -15% (SEK million) 250 -20% 200 -25% 150 -30% 100 -35% 50 -40% 0 -45% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 37 2010-04-21 First quarter 2010
  • 38. Appendix B 38 2010-04-21 First quarter 2010
  • 39. NET DEBT AND DIVIDEND TARGETS • Shareholder remuneration – “Tele2’s intention over the medium term is to pay a progressively increasing ordinary dividend” • Long-term financial leverage – “Tele2’s longer-term financial leverage, defined as the net debt /EBITDA ratio, should be in line with the industry and the markets in which it operates” • Short-term consideration – “The company needs to take the uncertainties in the financial markets into consideration and act accordingly” 39 2010-04-21 First quarter 2010
  • 40. Appendix C 40 2010-04-21 First quarter 2010
  • 41. FINANCIAL ITEMS Q1 2010 SEK million Q1 10 Q1 09 Change External Net interest expenses -77 -139 62 Exchange rate differences, external -11 -166 155 Other financial items -2 -20 18 -90 -325 235 Exchange rate differences, intragroup 132 -267 399 Financial items 42 -592 634 41 2010-04-21 First quarter 2010
  • 42. “OUR” CURRENCIES YTD Average Fixing rate Currency 10 vs. 09 Mar 10 vs. Mar 09 EUR / EUR pegged -9,1 % - 11,3 % RUB -2,2 % 0,4 % USD -14,4 % - 12,4 % 42 2010-04-21 First quarter 2010
  • 43. NET ASSETS IN FOREIGN CURRENCIES EUR EUR pegged RUB KZT Other 0,9 30 1,6 2,7 (SEK billion) 8,6 8,8 20 7,1 6,6 10 12,5 11,1 0 Year-end 2009 Q1 2010 Total 29.9 bSEK Total 30.2 bSEK 43 2010-04-21 First quarter 2010
  • 44. CASH FLOW DEVELOPMENT Cash flow after CAPEX Cash flow from operating activities 2 800 2 400 2 000 (SEK million) 1 600 1 200 800 400 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 44 2010-04-21 First quarter 2010
  • 45. GROUP FIXED BROADBAND EBITDA Fixed broadband Fixed broadband EBITDA margin 400 25% 20% 300 (SEK million) 15% 200 10% 100 5% 0 0% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 45 2010-04-21 First quarter 2010
  • 46. GROUP FIXED TELEPHONY EBITDA Fixed telephony Fixed telephony EBITDA margin 500 30% 400 29% (SEK million) 300 28% 200 27% 100 26% 0 25% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 46 2010-04-21 First quarter 2010
  • 47. GROUP EBIT Mobile Fixed broadband Fixed telephony Other Group EBIT margin 2 000 18% 16% 1 500 14% (SEK million) 1 000 12% 10% 500 8% 0 6% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 4% -500 2% -1 000 0% 47 2010-04-21 First quarter 2010
  • 48. GROUP CAPEX Mobile Fixed broadband Fixed telephony Other Capex/sales 1400 14% 1200 12% (SEK million) 1000 10% 800 8% 600 6% 400 4% 200 2% 0 0% Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 In 2010: Tele2 forecasts a CAPEX level in the range of SEK 4,600 – 4,800 million 48 2010-04-21 First quarter 2010
  • 49. 49 2010-04-21 First quarter 2010