Financial overview
With 31 million customers in 11 countries, Tele2 is one of Europe’s leading telecom operators. Ever since Tele2 was founded in 1993, it has been a tough challenger to incumbents and other established providers. Tele2 offers mobile communication services, fixed broadband and telephony, data network services, cable TV and content services. Mobile communication is our primary focus area and it is our most important growth segment. In some countries, Tele2 also offers fixed communication services. Mobile telephony currently accounts for more than 68 percent of Tele2’s net sales.
The cornerstone of Tele2’s concept is to always offer the Best Deal on the market. We do this by continuously listening to our customers’ needs while keeping costs under tight control. Tele2 has steadily increased market shares, while maintaining a healthy return on capital employed. We will make every effort to ensure that this positive development continues and that more people cut the cord and become truly mobile.
In 2010, the company generated net sales of SEK 40.2 billion and reported an operating profit (EBITDA) of SEK 10.3 billion.
Comments below relate to Tele2’s continuing operations unless otherwise stated.
Net customer intake
In 2010, the total customer base increased to 30,883,000 (26,579,000). Net customer intake, excluding acquired and divested companies, was 3,932,000 customers compared with 2,327,000 customers the previous year. The customer intake in mobile services increased by 42 percent to 4,443,000 (3,139,000), of which 128,000 (142,000) were mobile broadband users. The good intake in mobile services resulted from a solid performance mainly in Tele2 Russia, Tele2 Sweden and Tele2 Croatia. In 2010, Tele2 Russia had a total customer intake of 3,987,000 (2,947,000) of which 2,489,000 (1,898,000) were derived from new operations. Fixed broadband added 32,000 (-11,000) customers in 2010, thanks to an improved demand for dual and triple play offerings throughout the Tele2 footprint. Fixed telephony had an expected outflow of customers during the year.
Net sales
Tele2’s net sales amounted to SEK 40,164 (39,436) million. The positive revenue development was driven by good trends in core mobile services and fixed broadband services.
EBITDA
EBITDA was SEK 10,284 (9,394) million, with an EBITDA margin of 26 (24) percent. EBITDA was positively affected by strong operational development in mobile services, particularly driven by Tele2’s operations in Russia.
EBIT
Operating profit, EBIT, was SEK 7,088 (5,736) million, which includes one-off items of SEK 384 (-11) million. The EBIT margin amounted to 18 (15) percent.
Profit before tax
Net interest expense and other financial items totalled SEK -353 (-500) million. Exchange differences of SEK 282 (-77) million were reported under other financial items. The average interest rate on outstanding liabilities was 10.0 (6.9) percent. Profit after financial items, EBT, amounted to SEK 6,735 (5,236) million.
Net profit
Profit after tax was SEK 6,481 (4,755) million. Earnings per share amounted to SEK 14.63 (10.70) after dilution. Tax on profit for the year was SEK -254 (-481) million.
Cash flow
Cash flow from operating activities, including discontinued operations, amounted to SEK 9,610 (9,118) million and cash flow after CAPEX amounted to SEK 6,007 (4,778) million.
CAPEX
During 2010, Tele2 made investments of SEK 3,651 (4,439) million in tangible assets and intangible assets, mainly driven by expansion in Russia.
Net debt
Net debt amounted to SEK 1,691 (2,171) million at December 31, 2010, or 0.16 times EBITDA in 2010. Including guarantees to joint ventures, the net debt to EBITDA in 2010 amounted to 0.33 times. Tele2’s available liquidity amounted to SEK 12,814 (12,410) million.