game day
interim report
jan-dec 2014

 

game day
interim report
jan-dec 2014

 

game day
interim report
jan-dec 2014

 

We remain confident in our strategy and our ability to monetize a great customer experience throughout our footprint.

2014 was a year where we delivered on our commitments, despite the uncertainty in Norway and the significant transition from fixed to mobile in the Netherlands. Q4 2014 was no exception and we produced our 14th consecutive quarter of mobile growth, with end-user service revenue growing 7 percent as a result of a continued ability to monetize our customers’ increasing need for mobile data. The catalyst has been LTE/4G services and a range of customer propositions that provide great value and a great experience.

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Presentation

January - December 2014
2015-01-30 10:00 CET

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102.80 SEK

+/-: +2.49%

Q4 2014 HIGHLIGHTS

Strong mobile end-user service revenue growth for the Group

Mobile end user service revenue grew by 7 percent amounting to SEK 3,205 (3,006) million, driven by improved monetization of mobile data. Mobile strength fuelled a quarter where total net sales grew by 4 percent to 6,876 (6,585) million, and EBITDA amounted to SEK 1,412 (1,490) million. In the quarter EBITDA was impacted by marketing investments in Sweden behind Value Champion and iPhone 6 launches. Additionally, EBITDA was impacted negatively by a data center fire in Sweden and positively by a license sale in Estonia.

Healthy top and bottom line progress in Tele2 Sweden

Mobile end-user service revenue in Sweden grew by 5 percent in Q4 2014 and EBITDA increased to SEK 792 (722) million, both positively impacted by accelerated data usage in predominantly the postpaid segment. Equipment sales were strong in the quarter amounting to SEK 759 (449) million, as a result of the iPhone 6 launch, of which SEK 180 (0) million was from sales to distributors.

Maintained positive customer intake within mobile for Tele2 Netherlands

Tele2 Netherlands continued to gain market share by adding 22,000 (62,000) customers and taking the total mobile customer base to 813,000 (694,000). Mobile end-user service revenue amounted to SEK 301 (261) million, growing by 15 percent in Q4 2014.

Improved customer intake for Tele2 Kazakhstan

Customer intake increased to 205,000 (-393,000) in Q4 2014, partly because of the new commission structure and partly due to new price plans as a reaction to increased competition. Improved quality of customer intake and increasing data consumption supported the operational development. As a result, Mobile end-user service revenue grew by 12 percent in Q4 2014, amounting to SEK 280 (251) million despite being impacted by devaluation of the local currency and increased competitive pressure. Through improved operational scale and lower interconnect levels, EBITDA amounted to SEK 17 (-7) million.

Sale of Tele2 Norway

On December 1, 2014, the competition authority in Norway preliminary rejected the transaction. To be able to complete the transaction, the parties have presented a new proposal to the authority. The sale will be completed after approval by regulatory authorities, which is expected in Q1 2015.

Challenger program

A group-wide program focused on increasing productivity was launched in the quarter. The program will build over the next 3 years and reap full benefits of SEK 1 billion per annum starting in 2018. The investment required will be SEK 1 billion, phased over the next 3 years. In the quarter EBIT was impacted by SEK -10 million by the program (Note 2).

The Board of Directors recommend a dividend for 2014 amounting to SEK 4.85

The Board has decided to amend the progressive dividend policy to an annual 10 percent dividend

growth for the coming 3 years. The Board therefore recommends an ordinary dividend of SEK 4.85 (4.40) per share in respect of the financial year 2014.

Financial guidance for 2015

The financial guidance for the group is provided on p. 5

Significant events Q4

■ Tele2 announced the Challenger program - a program to step change productivity in the Tele2 Group

■ Tele2 signed 4G Long-Term Evolution (LTE) roaming agreements with a number of international partners

■ Tele2 and iBasis announced IPX Peering Agreement

■ Tele2 AB hosted an analyst and journalist briefing in London on December 12, 2014

■ Tele2 and Telit announced M2M/IoT cooperation

■ Tele2 entered into a partnership with MTG’s online streaming service Viaplay

■ The Norwegian Competition Authority gave its preliminary view through a statement of objection to TeliaSonera/NetCom’s acquisition of Tele2 Norway

■ ICE Communication Norge AS and Tele2 Norway signed an agreement on frequency lease and purchase of infrastructure

■ Tele2 and L&T Technology Services announced strategic M2M/IoT partnership, addressing the transportation industry

Significant subsequent events

■ Tele2 presented a White Paper on its operations in Kazakhstan to increase transparency

■ A new proposal on remedies was presented to the Norwegian competition authorities

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Stina Andersson

EVP Strategy & Business Development

+46 70 273 4879

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James Maclaurin

Acting Group CFO

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Disclaimer

In the event of differences between this online version and the legal PDF-version of Tele2's annual report, the PDF version is held to be correct.