TELE2 FULL YEAR REPORT 2005

- Q4 2005 EBITDA amounted to MSEK 1,602 (1,772)*

- Swedish mobile telephony reported an EBITDA increase of 17% to MSEK 755 (648) for Q4 2005

- Russian operating revenue grew by 126% to MSEK 379 (168) in Q4 2005

- Operating revenue for the full year 2005 increased by 16% to MSEK 49,943 (43,033)

- Profit for the year amounted to MSEK 2,341 (3,428)
- Earnings per share for the full year amounted to SEK 5.29 (7.73)
- Broadband customers more than doubled in 2005 to 1.2 million, while broadband revenues in the same period increased by 80% to over SEK 3 billion
- The Board proposes an increase in the dividend to SEK 1.75 (1.67) 

* EBITDA for Q4 2005 and Q4 2004 includes non recurring items of MSEK 137 and MSEK 300 respectively (see Note 1, 2)

 

 

Lars-Johan Jarnheimer, President and CEO
of Tele2 AB commented:

"2005 was a year of significant change for Tele2. We continued to produce good growth, with revenues rising by 16% to nearly SEK 50 billion. Even with an aggressive broadband and mobile strategy during 2005, we are able to report an unchanged EBITDA. At the same time, our business model has evolved, due to acquisitions, increasing backward integration, the launching of new products and increasing focus on cross selling, ensuring that we are able to strengthen our position as Europe's leading alternative telecoms operator.

We have set out our strategy for broadband deployment: wholesale; buy; build; and infrastructure cooperation. We are successfully implementing this, to the point where we now provide broadband in 13 European countries, to 1.2 million customers, an increase of more than 100% over the year.

We expanded our product offering, most notably with wholesale line rental in Sweden, which has reduced Swedish churn, and mobile in France. Churn development in Continental Europe is not satisfactory, although measures such as wholesale line rental and increased cross selling are expected to help stabilise it. We also announced withdrawals from the fixed line businesses in Finland, UK, Ireland and the Baltic States, as we believe this money can be put to better use elsewhere.

In Q4 2005, we had an outstanding intake of customers in Baltic & Russia, including Croatia, at more than 1 million and these businesses continue to perform well, in all aspects. Central Europe continued to produce good results with EBITDA up 100%, compared to Q4 2004. The French MVNO had over 110,000 customers at the end of the quarter and we are hopeful of further MVNOs in Europe during 2006. The financial targets and synergies expected from the integration of Versatel and Comunitel are being realised according to plan and we intend to use the acquired knowledge in the businesses across our footprint. In Q4 2005 in addition to divesting the UK fixed line business, we have taken an impairment charge of MSEK 263 at Alpha Telecom effecting EBIT, which relates to the competitive environment in which Alpha operates.

Tele2 started building out broadband in Italy during the autumn. Progress has been better than expected and we are very optimistic about our Italian broadband operations. The broadband push in France has, on the other hand, been delayed, due to the unforseen technical complexity of implementation. We have taken steps to counter these problems and we expect to launch our French campaigns, at the earliest, in Q2 2006.

In this quarterly report we have taken further steps to increase the transparency and understanding of our company, reporting Russia separately as well as broadband per market area.

 

The Board, in proposing to increase the dividend by 5% to 1.75 SEK, continues to view Tele2 as a growth company, while at the same time wishing to maintain a balance between this goal and that of cash flow and profitability."

 

 

CONTACTS

Lars-Johan Jarnheimer, Telephone: + 46 (0)8 562 640 00
President and CEO, Tele2 AB

Håkan Zadler, Telephone: + 46 (0)8 562 640 00
CFO, Tele2 AB

Dwayne Taylor, Telephone: + 44 (0)20 7321 5038
Lena Krauss, Telephone: + 46 (0)8 562 000 45
Investor enquiries

Visit us at our homepage: www.tele2.com