Financial guidance
Tele2’s objective is to maintain a healthy balance between growth regions and more mature markets and to be established in Europe and Eurasia. The group will secure licences through strong local connections within the business and political communities in all its markets. Tele2’s core markets are characterized by:
- An established Best Deal position.
- The capability to reach a top 2 position in terms of customer market share, in an individual country or region.
- A mobile operation based on own infrastructure should return at least 35 percent EBITDA margin.
- All operations in the group should return at least 24 percent return on capital employed (ROCE).
Tele2 Group forward looking statement
The following assumptions should be taken into account when estimating 2011 results for the group:
- Tele2 forecasts a corporate tax rate in the range of 26-27 percent excluding one-off items. The tax payment will affect cash flow by approximately SEK 1,000 million.
- Tele2 forecasts a capex level that will not exceed SEK 5,000 (earlier SEK 5,500) million, excluding licence payments.
Tele2 Sweden forward looking statement
The following assumptions should be taken into account when estimating results for the Swedish mobile operations in 2011:
- Tele2 expects mobile service revenue to grow with mid single digits.
- Tele2 expects a similar EBITDA contribution in 2011 as in 2010 due to instalments and start up costs related to joint venture Net4Mobility.
Tele2 Norway forward looking statement
In Q4 2011, Tele2 Norway will fully consolidate Network Norway and will return with new guidance when reporting the full year 2011 interim report.
Tele2 Russia forward looking statement
The following assumptions should be taken into account when estimating the operational performance of the total operations in Russia in 2011:
- Tele2 expects the subscriber base to reach 21 million by year-end 2011.
- Tele2 expects ARPU to remain stable in local currency.
- Tele2 expects total EBITDA margin to evolve in the range of 38-40 percent.
- Tele2 expects capex to be approximately SEK 2,000 million by year-end 2011.
Tele2 Kazakhstan forward looking statement
The following assumptions should be taken into account when estimating the operational performance of the total operations in Kazakhstan:
- Tele2 expects the subscriber base to reach 2.3-2.5 million by year-end 2012.
- Tele2 expects an EBITDA contribution in 2011 of approximately SEK -400 (earlier -500) million.
- Tele2 expects capex to be approximately SEK 1,000 million (earlier in the range of SEK 1,200-1,400 million) by year-end 2011.
- Tele2 expects to reach EBITDA break-even by 2H 2013 (earlier expected to reach break-even within two years from the commercial launch).
- Tele2 expects to reach a long-term mobile customer market share of 30 percent.
Tele2 Croatia forward looking statement
The following assumptions should be taken into account when estimating the Croatian mobile operations in 2011:
- Tele2 expects Croatia to reach an EBITDA margin of 20 percent by Q3 2013 (earlier free cash flow break-even by 2H 2011).
Shareholder remuneration
Tele2 will seek to pay a progressive ordinary dividend of 50 percent or more of net income excluding one-off items. Extraordinary dividends and the authority to purchase Tele2’s own shares will be sought when the anticipated total return to shareholders is deemed to be greater than the achievable returns from the deployment of the capital within the group’s operating segments or the acquisition of assets within Tele2’s economic requirements.
Balance sheet
Tele2 has a target net debt to EBITDA ratio of between 1.25 and 1.75 times over the medium term. The group’s longer term financial leverage should be in line with the industry and the markets in which it operates, and reflect the status of its operations, future strategic opportunities and contingent liabilities.
| SEK million | Q3 2011 | Q3 2010 | 9M 2011 | 9M 2010 | FY 2010 |
| Mobile1) | |||||
| Net customer intake (thousands) | 1,325 | 1,404 | 3,067 | 3,584 | 4,443 |
| Net sales | 7,539 | 7,020 | 21,320 | 20,032 | 26,985 |
| EBITDA | 2,156 | 2,034 | 6,003 | 5,716 | 7,532 |
| EBIT | 1,546 | 1,503 | 4,244 | 4,205 | 5,451 |
| CAPEX | 897 | 552 | 2,584 | 1,252 | 2,223 |
| Fixed broadband1) | |||||
| Net customer intake (thousands) | -34 | 15 | -53 | 22 | 32 |
| Net sales | 1,503 | 1,471 | 4,530 | 4,524 | 6,120 |
| EBITDA | 395 | 264 | 1,088 | 828 | 1,131 |
| EBIT | 170 | 21 | 397 | 62 | 99 |
| CAPEX | 141 | 215 | 466 | 537 | 722 |
| Fixed telephony1) | |||||
| Net customer intake (thousands) | -75 | -122 | -347 | -402 | -543 |
| Net sales | 890 | 1,129 | 2,801 | 3,651 | 4,741 |
| EBITDA | 270 | 372 | 814 | 1,097 | 1,400 |
| EBIT | 223 | 325 | 676 | 944 | 1,196 |
| CAPEX | 17 | 23 | 47 | 70 | 94 |
| Total | |||||
| Net customer intake (thousands) | 1,216 | 1,297 | 2,667 | 3,204 | 3,932 |
| Net sales2) | 10,340 | 9,989 | 29,911 | 30,055 | 40,164 |
| EBITDA | 2,893 | 2,751 | 8,061 | 7,796 | 10,284 |
| EBIT3) | 1,950 | 1,892 | 5,328 | 5,732 | 7,088 |
| CAPEX | 1,199 | 956 | 3,600 | 2,331 | 3,651 |
| EBT | 1,687 | 1,876 | 4,789 | 5,534 | 6,735 |
| Net profit | 1,259 | 2,484 | 3,593 | 5,382 | 6,481 |
| Cash flow from operating activities | 2,675 | 2,620 | 6,933 | 7,833 | 9,610 |
| Cash flow after CAPEX | 1,602 | 1,697 | 3,666 | 5,393 | 6,007 |
1) Less one-off items (see sections Net sales and EBIT).
2) Including one-off items (see Note 1).
3) Total EBIT includes result from sale of operations and other one-off items stated under the segment reporting section of EBIT.
Significant events in the quarter
- Thomas Ekman was appointed Market Area Director Nordic and CEO of Tele2 Sweden.
- Tele2 AB held its Capital Markets Day in Stockholm, updating its view on future operational performance.
Significant subsequent events
- On October 3, 2011 Tele2 Sverige AB acquired Network Norway (see Note 9).
- Tele2 Sweden was awarded a mobile license of 2x10 MHz in the 1800 MHz frequency band through the network company Net4Mobility for approximately SEK 430 million.