FOURTH QUARTER AND
FULL-YEAR RESULTS 2008
10 February 2008
AGENDA

    CEO review                                        Harri Koponen

    Financial review                         ...
HIGHLIGHTS Q4 AND FY 2008
    •      Robust fourth quarter and full year results
    •      Russia
            –    Passin...
ECONOMIC IMPACT
    •      Robust Q4 and FY 2008 results, with little or no impact
           from economic downturn
     ...
FINANCIAL HIGHLIGHTS Q4 2008
    •      Robust financial performance in Q4 2008
            –    Revenue of SEK 10,313 mil...
AGENDA

    CEO review                                        Harri Koponen

    Financial review                         ...
Q4 2008 GROUP RESULTS
    SEK million                                         Q4 08     Q4 07    Change %
    Continuing o...
FY 2008 GROUP RESULTS
    SEK million                                          FY 08      FY 07     Change %
    Continuin...
OTHER FINANCIAL ITEMS

                                                                                                   ...
TAX EXPECTATION
     •      Reported tax for 2008 amounted to SEK -120 million. Tax payment affecting
            cash flo...
CASH FLOW FOR Q4 2008
     SEK million                                       Q4 08    Q4 07
     Operating activities, exc...
CASH FLOW FOR FY 2008
     SEK million                                       FY 08    FY 07
     Operating activities, exc...
DIVIDEND PROPOSAL

     • Tele2’s intention over the medium term is to pay
       a progressive ordinary dividend to its
 ...
GROUP FINANCIAL PROFILE
         20 000                                            3
         18 000                      ...
NEW CREDIT FACILITY
     •      3-year revolving credit facility agreement of SEK 12 billion

     •      The deal was suc...
GROUP Q4 2008 NET SALES
         12 000
         10 000
           8 000                                                  ...
GROUP Q4 2008 EBITDA
         2 500                                                25,00%
                                ...
MOBILE Q4 2008 EBITDA
         2 000                                              30,00%
         1 800
         1 600    ...
FIXED BROADBAND Q4 2008 EBITDA
          100                                            8,00%
                            ...
FIXED TELEPHONY Q4 2008 EBITDA
         500                                              30,00%
         450
         400 ...
GROUP Q4 2008 EBIT
          2 000                                             16,00%
                                    ...
GROUP Q4 2008 CAPEX
         1600                                               16,00%
         1400                      ...
FINANCIAL SUMMARY

     •      Overall solid operational performance
             – No or little impact from difficult eco...
AGENDA

     CEO review                                        Harri Koponen

     Financial review                       ...
GENERAL MARKET TRENDS IN MOBILE
     •      Customer intake still robust
             –    More price sensitive and intere...
TELE2 SWEDEN MOBILE
     3 400                                                           140


     3 300
                ...
TELE2 NORWAY MOBILE
     465                                                                25

     460                  ...
TELE2 RUSSIA MOBILE
     12 000                                                          700

                            ...
TELE2 BALTIC MOBILE
     3 600                                                           60
                              ...
TELE2 CROATIA MOBILE
     800                                                                80
                          ...
REGULATION
     Important topics for Tele2

     •      Interconnect

     •      Access to fiber (extension of current UL...
AGENDA

     CEO review                                        Harri Koponen

     Financial review                       ...
CONCLUDING REMARKS
     •      Robust fourth quarter and full year results

     •      Improved total dividend amounting ...
Q&A




34   2009-02-10   Fourth quarter and full-year 2008
Upcoming SlideShare
Loading in …5
×

Quarterly report (Q4) 2008

874 views

Published on

Quarterly report (Q4) 2008

Published in: News & Politics, Sports
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
874
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Quarterly report (Q4) 2008

  1. 1. FOURTH QUARTER AND FULL-YEAR RESULTS 2008 10 February 2008
  2. 2. AGENDA CEO review Harri Koponen Financial review Lars Nilsson Operating review of Mobile Harri Koponen Concluding remarks Harri Koponen 2 2009-02-10 Fourth quarter and full-year 2008
  3. 3. HIGHLIGHTS Q4 AND FY 2008 • Robust fourth quarter and full year results • Russia – Passing 10.4 million customers – Roll-out of new regions on track • Central Europe – Stable operational development in the Baltic region despite difficult economic environment – Croatia adding more than 230,000 customers in 2008 • Nordic – Stable full year EBIT contribution from Swedish mobile operations – Norway regaining price leadership. Strong net adds • Western Europe – Delivering on its new strategy focusing on profitability – Robust performance in the Netherlands and Germany. – Restructuring of Tele2 Austria • Proposed total dividend SEK 5 • Solid liquidity profile after Q1 2009 refinancing 3 2009-02-10 Fourth quarter and full-year 2008
  4. 4. ECONOMIC IMPACT • Robust Q4 and FY 2008 results, with little or no impact from economic downturn – Difficult to predict to what extent consumer telecom spending will be affected in 2009 • Tele2 is well prepared, both financially as well as operationally, to deal with various scenarios • Economic downturn potentially an opportunity • Contingency plans in place to make sure cash flow generation is preserved 4 2009-02-10 Fourth quarter and full-year 2008
  5. 5. FINANCIAL HIGHLIGHTS Q4 2008 • Robust financial performance in Q4 2008 – Revenue of SEK 10,313 million, up 7 percent – EBITDA of SEK 2,173 million, up 47 percent – Cash flow after capex SEK 704 (-343) million • Low financial gearing with net debt to EBITDA 0.9 times*) • Progressive view on dividend – Proposed total dividend SEK 5 • New credit facility of SEK 12,000 million *) Including obligations to JV 5 2009-02-10 Fourth quarter and full-year 2008
  6. 6. AGENDA CEO review Harri Koponen Financial review Lars Nilsson Operating review of Mobile Harri Koponen Concluding remarks Harri Koponen 6 2009-02-10 Fourth quarter and full-year 2008
  7. 7. Q4 2008 GROUP RESULTS SEK million Q4 08 Q4 07 Change % Continuing operations, Net Sales 10,313 9,599 7% EBITDA 2,168 1,418 53% - EBITDA margin (%) 21% 15% Depreciation and joint venture -964 -960 - Depreciation of net sales (%) 9% 10% One-off items -19 -417 EBIT 1,185 41 Normalized EBIT 1,251 369 - Normalized EBIT margin (%) 12% 4% Financial items -593 -105 Taxes 104 -75 Net result, continuing operations 696 -139 Net result, discontinued operations 198 110 Net result 894 -129 7 2009-02-10 Fourth quarter and full-year 2008
  8. 8. FY 2008 GROUP RESULTS SEK million FY 08 FY 07 Change % Continuing operations, Net Sales 39,505 40,056 -1% EBITDA 8,175 6,320 29% - EBITDA margin (%) 21% 16% Depreciation and joint venture -3,682 -3,799 - Depreciation of net sales (%) 9% 9% One-off items -1,642 -1,184 EBIT 2,851 1,337 Normalized EBIT 4,605 2,984 - Normalized EBIT margin (%) 12% 7% Financial items -1,013 -731 Taxes -120 -988 Net result, continuing operations -1,718 -382 Net result, discontinued operations 715 -1,387 Net result 2,433 1,769 8 2009-02-10 Fourth quarter and full-year 2008
  9. 9. OTHER FINANCIAL ITEMS 2008 Full Year 2008 Q4 External fx -110 -171 Intergroup fx -441 -345 Other net -62 9 Total: Other financial items -613 -507 2008 Full Year 2008 Q4 Exchage rate differencies* 3,146 2,491 * recognized directly in shareholders equity 9 2009-02-10 Fourth quarter and full-year 2008
  10. 10. TAX EXPECTATION • Reported tax for 2008 amounted to SEK -120 million. Tax payment affecting cash flow amounted to SEK -377 million • In 2009 Tele2 forecast a corporate tax rate of approximately 20 percent excluding one-off items • The tax payment will affect 2009 cash flow by approximately SEK 700-800 million • Tax dispute – In Q1 2009, Tele2 announced that the company has not been allowed to deduct a capital loss of SEK 13.9 billion, which was associated with the liquidation of S.E.C. S.A. in 2001 – Tele2 will appeal the decision made by the County Administrative Court – Tele2 is of the opinion that the dispute will be settled in Tele2’s favor and have not provisioned any cost associated with the verdict. 10 2009-02-10 Fourth quarter and full-year 2008
  11. 11. CASH FLOW FOR Q4 2008 SEK million Q4 08 Q4 07 Operating activities, excl taxes paid 1,930 1,528 Taxes paid -120 -189 Change in WC 127 -367 Cash flow from operating activities 1,937 972 CAPEX -1,223 -1,315 Cash Flow after CAPEX 704 -343 11 2009-02-10 Fourth quarter and full-year 2008
  12. 12. CASH FLOW FOR FY 2008 SEK million FY 08 FY 07 Operating activities, excl taxes paid 8,166 6018 Taxes paid -377 -1,530 Change in WC 107 -138 Cash flow from operating activities 7,896 4,350 CAPEX -4,608 -5,169 Cash Flow after CAPEX 3,288 -819 12 2009-02-10 Fourth quarter and full-year 2008
  13. 13. DIVIDEND PROPOSAL • Tele2’s intention over the medium term is to pay a progressive ordinary dividend to its shareholders • The board of Tele2 AB has decided to recommend an increase of the ordinary dividend by 11 percent to SEK 3.50 (3.15) per share • The board has also decided to recommend a special dividend of SEK 1.50 (4.70) per share to the AGM. 13 2009-02-10 Fourth quarter and full-year 2008
  14. 14. GROUP FINANCIAL PROFILE 20 000 3 18 000 Net debt incl. JV 16 000 2,5 14 000 2 Net debt 12 000 10 000 1,5 8 000 Net debt/ 6 000 1 EBITDA incl. JV 4 000 0,5 Net debt/ 2 000 EBITDA 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 07 07 07 07 08 08 08 08 • Net debt amounted to SEK 4,952 (5,198) million – 0.6 times FY 2008 EBITDA – 0.9 times FY 2008 EBITDA including guarantees to JV • New credit facility agreement of SEK 12,000 million 14 2009-02-10 Fourth quarter and full-year 2008
  15. 15. NEW CREDIT FACILITY • 3-year revolving credit facility agreement of SEK 12 billion • The deal was successfully oversubscribed • Tele2 will use this facility to: – Develop its business organically – Refinance its existing revolving credit facilities maturing in November 2009 – Keep an optimal capital structure within the financial disciplines announced 15 2009-02-10 Fourth quarter and full-year 2008
  16. 16. GROUP Q4 2008 NET SALES 12 000 10 000 8 000 Other Fixed broadband 6 000 Fixed telephony 4 000 Mobile 2 000 0 Q3 Q4 Q1 Q2 Q3 Q4 07 07 08 08 08 08 • Mobile net sales SEK 6,502 million, up 14 percent – Russia the main growth driver, up 40 percent • Fixed Broadband net sales SEK 1,637 million, up 8 percent – Less emphasis on market share and more on profitability leading to negative customer development 16 2009-02-10 Fourth quarter and full-year 2008
  17. 17. GROUP Q4 2008 EBITDA 2 500 25,00% Other 2 000 20,00% Fixed broadband 1 500 15,00% 1 000 Fixed telephony 10,00% 500 Mobile 0 5,00% Group EBITDA Q3 Q4 Q1 Q2 Q3 Q4 margin -500 0,00% 07 07 08 08 08 08 • Group EBITDA margin 21 percent – Normal seasonality affecting Q4 2008 – Estonia and Norway affected by one-off costs • Improved cost control in fixed broadband and fixed telephony showing the greatest relative improvement 17 2009-02-10 Fourth quarter and full-year 2008
  18. 18. MOBILE Q4 2008 EBITDA 2 000 30,00% 1 800 1 600 25,00% 1 400 20,00% Mobile 1 200 1 000 15,00% 800 Mobile EBITDA 600 10,00% margin 400 5,00% 200 0 0,00% Q3 Q4 Q1 Q2 Q3 Q4 07 07 08 08 08 08 • Mobile EBITDA margin 25 percent – Normal seasonal pattern in Q4 2008 mainly driven by Christmas campaigns – One-off costs in Estonia and Norway – Launch costs in Russia affecting the quarter. FY 2009 expecting opex of SEK 500-700 million related to the roll-out of the 17 new licenses – Marketing push in Croatia weighing on the EBITDA result 18 2009-02-10 Fourth quarter and full-year 2008
  19. 19. FIXED BROADBAND Q4 2008 EBITDA 100 8,00% 6,00% 50 4,00% 0 2,00% Q3 Q4 Q1 Q2 Q3 Q4 0,00% Fixed broadband -50 -2,00% 07 07 08 08 08 08 -100 -4,00% Fixed broadband -6,00% EBITDA margin -150 -8,00% -10,00% -200 -12,00% -250 -14,00% • Fixed broadband EBITDA margin 5 percent – Less emphasis on market share leading to improved cost control. However, further improvement needed – Focus on ULL rather than resold products 19 2009-02-10 Fourth quarter and full-year 2008
  20. 20. FIXED TELEPHONY Q4 2008 EBITDA 500 30,00% 450 400 25,00% 350 20,00% Fixed Telephony 300 250 15,00% 200 Fixed telephony 150 10,00% EBITDA margin 100 5,00% 50 0 0,00% Q3 Q4 Q1 Q2 Q3 Q4 07 07 08 08 08 08 • Fixed telephony EBITDA margin 27 percent – Focus on maintaining relative performance – Improve operations in Austria 20 2009-02-10 Fourth quarter and full-year 2008
  21. 21. GROUP Q4 2008 EBIT 2 000 16,00% 14,00% Other 1 500 12,00% Fixed broadband 1 000 10,00% 500 8,00% Fixed telephony 6,00% Mobile 0 Q3 Q4 Q1 Q2 Q3 Q4 4,00% -500 Group EBIT 07 07 08 08 08 08 2,00% margin -1 000 0,00% • Group EBIT margin 12 percent excluding one-off items • Improved operational performance in fixed broadband and fixed telephony lifting EBIT performance – Benefits with SUNAB giving stable EBIT contribution from Sweden mobile 21 2009-02-10 Fourth quarter and full-year 2008
  22. 22. GROUP Q4 2008 CAPEX 1600 16,00% 1400 14,00% 1200 12,00% Other 1000 10,00% Fixed broadband 800 8,00% Fixed telephony 600 6,00% Mobile 400 4,00% Capex/sales 200 2,00% 0 0,00% Q3 Q4 Q1 Q2 Q3 Q4 07 07 08 08 08 08 • Group Capex SEK 1,328 million or 13 percent of net sales – FY 2008 capex/sales ratio 11 percent – FY 2009 expectation in the range of SEK 4,500-4,700 million • Expansion in Russia the main driver – FY 2009 expectation in the range of SEK 1,100-1,300 million related to roll-out of new licenses 22 2009-02-10 Fourth quarter and full-year 2008
  23. 23. FINANCIAL SUMMARY • Overall solid operational performance – No or little impact from difficult economic environment • Mobile and fixed telephony the main profit drivers – Russia developing well, with roll-out of new regions following plan • Fixed broadband seeing good improvement – Still need for further improvement to meet set hurdles • Capex development expected to stay fairly flat in 2009 • Total dividend SEK 5 • Robust liquidity profile after Q1 2009 refinancing • Contingency plans in place to make sure cash flow generation is preserved 23 2009-02-10 Fourth quarter and full-year 2008
  24. 24. AGENDA CEO review Harri Koponen Financial review Lars Nilsson Operating review of Mobile Harri Koponen Concluding remarks Harri Koponen 24 2009-02-10 Fourth quarter and full-year 2008
  25. 25. GENERAL MARKET TRENDS IN MOBILE • Customer intake still robust – More price sensitive and interested in SIM only offers • MoU still growing, with mobile traffic taking a larger share of total minutes carried • Pricing environment for basic voice fairly stable • Good interest in mobile internet services • Operators having better pricing power 25 2009-02-10 Fourth quarter and full-year 2008
  26. 26. TELE2 SWEDEN MOBILE 3 400 140 3 300 120 • Revenue growth of 6.5 percent 100 • Slowing customer activity in 3 200 voice services 80 3 100 Mobile subscriber – Lower pre-paid intake Net intake 60 – Renewed interest in SIM only 3 000 40 • 15.000 new mobile internet 2 900 20 user – Total base 170,000 2 800 0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 • MoU continue to grow, both 2 000 40,00% voice and VAS 35,00% • More traffic being carried by the 1 950 30,00% SUNAB JV 1 900 – Most cost efficient 3G carrier in 25,00% Mobile net sales Sweden 1 850 20,00% EBIT marg. – Opex approximately SEK 450 EBITDA marg. 15,00% million YTD 1 800 10,00% 1 750 5,00% 1 700 0,00% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 26 2009-02-10 Fourth quarter and full-year 2008
  27. 27. TELE2 NORWAY MOBILE 465 25 460 20 455 • Reconfirmed price position 15 450 • Strong net intake adding 10 445 Mobile subscriber 19,000 customers Net intake 440 5 • Tough competition negatively 435 0 affecting ARPU 430 -5 • EBITDA contribution negatively affected by increased sales and 425 -10 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 marketing as well as currency movement 700 12,00% • Network Norway JV affecting 680 10,00% EBIT by SEK -16 million 8,00% 660 6,00% 640 Mobile net sales 4,00% 620 EBITDA marg. 2,00% 600 0,00% 580 -2,00% 560 -4,00% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 27 2009-02-10 Fourth quarter and full-year 2008
  28. 28. TELE2 RUSSIA MOBILE 12 000 700 600 • Revenue growth of 40 percent 10 000 • More than 10.4 million 500 8 000 customers 6 000 400 Mobile subscriber • Robust ARPU development Net intake 300 • Successful launch of Krasnodar 4 000 200 region 2 000 100 • Roll-out of new GSM licenses on track 0 0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 – Opex costs affecting total EBITDA in Q4 2008 2 500 37,00% • Acquisition of operations in 36,00% 2 000 Kaliningrad 35,00% 34,00% • Improved network quality 1 500 33,00% through the introduction of Mobile net sales EBITDA marg. EDGE 32,00% 1 000 31,00% 500 30,00% 29,00% 0 28,00% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 28 2009-02-10 Fourth quarter and full-year 2008
  29. 29. TELE2 BALTIC MOBILE 3 600 60 • Challenging economic 50 3 550 environment 40 3 500 • Robust revenue 30 3 450 Mobile subscriber development despite 20 3 400 Net intake current economic climate 10 3 350 – Positive currency effect 0 3 300 -10 • Price leadership creating opportunities 3 250 -20 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 – Focus on enterprise 1400 40,00% customers 1200 35,00% – Estonia 21 percent market 30,00% share in the business 1000 segment 25,00% Latvia net sales 800 Lithuania net sales 20,00% 600 Estonia net sales 15,00% EBITDA marg. 400 10,00% 200 5,00% 0 0,00% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 29 2009-02-10 Fourth quarter and full-year 2008
  30. 30. TELE2 CROATIA MOBILE 800 80 • Total customer base more 700 70 than doubled in 2008 600 60 – Improved marketing 500 50 strategy Mobile subscriber 400 40 Net intake – Better quality of service 300 30 – Net adds Q4 2008 200 20 amounting to 76,000 100 10 • Opex affected by higher 0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 0 marketing spend and 300 0,00% acquisition costs 250 -10,00% -20,00% 200 -30,00% Mobile net sales 150 -40,00% EBITDA marg. 100 -50,00% 50 -60,00% 0 -70,00% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 30 2009-02-10 Fourth quarter and full-year 2008
  31. 31. REGULATION Important topics for Tele2 • Interconnect • Access to fiber (extension of current ULL legislation) • Frequency re-farming 31 2009-02-10 Fourth quarter and full-year 2008
  32. 32. AGENDA CEO review Harri Koponen Financial review Lars Nilsson Operating review of Mobile Harri Koponen Concluding remarks Harri Koponen 32 2009-02-10 Fourth quarter and full-year 2008
  33. 33. CONCLUDING REMARKS • Robust fourth quarter and full year results • Improved total dividend amounting to SEK 5 • Solid liquidity profile after Q1 2009 refinancing • Top priorities in 2009 – Tele2 will continue to focus on cost discipline in all parts of the organization • Tele2 should use its cost advantage to carefully move its position forward – Roll-out of new regions in Russia – Develop our mobile operations • compose a product portfolio that goes in line with the needs of our customers – Tele2 will work harder in the corporate segment In both the Nordic and Western European regions 33 2009-02-10 Fourth quarter and full-year 2008
  34. 34. Q&A 34 2009-02-10 Fourth quarter and full-year 2008

×