Europolitan Holdings AB Reports Quarterly Results.Business Editors STOCKHOLM Stockholm (stŏk`hôlm'), city (1995 pop. 692,954), capital of Sweden and of Stockholm co., E Sweden, situated where Lake Mälaren flows into the Baltic Sea. , Sweden--(BUSINESS WIRE)--July 17, 2001 Europolitan Holdings AB With Pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta Income of SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 468 Million -- Net income of SEK 337 million -- 27,000 net customer additions -- Net sales of SEK 1,459 million -- EBITDA of SEK 616 million -- Continued success for The Wireless Office - customers doubled in one year -- Joint venture agreement with HI3G Access AB regarding 3G build out First Quarter Report 2001/2002 Customer Growth Europolitan Vodafone's customer base increased to 1 040 000 as of 30 June June: see month. 2001, including 248,000 Europolitan Vodafone Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84.7 billion (July 2007). prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. cards.
During the first quarter 27,000 (56,000) customers were added, being 16
000 contract customers (28,000) and 11,000 prepaid cards (28,000).The proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. number of prepaid customers in the customer base increased during the first quarter to 24% (21%). Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight Europolitan Vodafone's consolidated net sales for the quarter increased 12% to SEK 1,459 million compared with the equivalent period last year (SEK 1,302 million). Average monthly revenue per customer, excluding prepaid cards, was SEK 570 (SEK 551). This increase reflects relatively stable prices and increased usage per customer during the quarter, offset partly by the impact of lower termination rates Termination rates are the charges which one telecommunications operator will charge another in order to terminate calls on their network. For example, a customer of T-Mobile wishes to call a friend who has a Vodafone mobile. . Average monthly revenue per customer, including prepaid cards, increased 1% to SEK 455 (SEK449). Cost of Sales, Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and Net Income Cost of sales and operating expenses increased by 13% to SEK 998 million (SEK 886 million) in the first quarter. The change was largely due to: -- Customer related costs and depreciation -- Continuing investment in new business areas (Mobile Internet Refers to gaining access to the Internet using a lightweight, handheld device. See Mobile IP, PDA, smartphone and mobile TV. , Service Provision and Telematics) and preparation for the 3G rollout. After net financial income of SEK 7 million (SEK 1 million), income before taxes was SEK 468 million (SEK 417 million). After tax expense of SEK 132 million (SEK 117 million) and minority share of SEK 1 million (nil), net income was SEK 337 million (SEK 300 million). Capital Expenditures Capital expenditures for the first quarter amounted to SEK 248 million (SEK 216 million). This reflects the company's continued investment in its GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. network, now enhanced with GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. technology, to ensure that both the highest quality and most advanced technology are available to its customers. In addition, investment in 3G was initiated during the quarter, although this did not represent a significant part of the total investment for the quarter. Liquidity and Financing EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become amounted to SEK 616 million (SEK 542 million) during the quarter, an increase of 14%. Cash flow after investments (free cash flow) increased by 7%, despite increased investment in capital expenditures and higher working capital. Parent company results The Group's parent company, Europolitan Holdings AB, had revenues in the first quarter of SEK 9 million (SEK 6 million) and posted income before taxes of SEK 2 million (kSEK KSEK may refer to the following radio stations in Southeast Kansas:
In 1997, Europolitan Holdings AB issued three debentures (issue Nos. 1, 2 and 3) each with detachable warrants Detachable warrant A warrant entitles the holder to buy a given number of shares of stock at a stipulated price. A detachable warrant is one that may be sold separately from the package it may have originally been issued with (usually a bond). with a right to subscribe to Verb 1. subscribe to - receive or obtain regularly; "We take the Times every day" subscribe, take buy, purchase - obtain by purchase; acquire by means of a financial transaction; "The family purchased a new car"; "The conglomerate acquired a new company"; new shares. Warrants were detached de·tached adj. 1. Separated; disconnected. 2. Standing apart from others; separate. and transferred to senior management of the Europolitan Group. The exercise period according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the warrants connected to issue No. 2 is 1 June to 1 December December: see month. 2001. Subscriptions for new shares with exercise of a part of the warrants connected to issue No. 2 have been made which increased share capital by SEK 26,390 to SEK 102,321,935 and increased the number of shares by 105,560 to 409,287,740 since 31 March 2001. 3G Early this year certain unsuccessful licence applicants appealed the award of the four licences by the PTS PTS put to sleep; a common euphemism for euthanasia, but also used to describe general anesthesia. . The administrative court's decision was announced on 27 June 2001 and it rejected their demands for a review. The court process has not affected Europolitan Vodafone's preparations for 3G. A number of existing sites have now been prepared for the 3G installation with antennas that can manage frequency bands for both GSM and 3G. In January January: see month. 2001, Europolitan Vodafone and HI3G Access AB signed a letter of intent to form a joint venture to build and operate 3G infrastructure. The letter of intent resulted in May in the formation of a joint infrastructure company, 3G Infrastructure Services AB (3GIS (1) (Geographic Information System) An information system that deals with spatial information. Often called "mapping software," it links attributes and characteristics of an area to its geographic location. ). The company will build and operate shared 3G infrastructure covering up to 70 percent of the population to both parties. Orange signed a letter of intent in May with Europolitan Vodafone and HI3G Access AB to co-operate on the 3G rollout. The letter of intent offers Orange co-ownership co-ownership n → co-propiedad f co-ownership n → copropriété f co-ownership n → comproprietà in 3GIS on the same terms. During August, the company is expecting to finalise Verb 1. finalise - make final; put the last touches on; put into final form; "let's finalize the proposal" finalize, nail down, settle terminate, end - bring to an end or halt; "She ended their friendship when she found out that he had once been convicted of negotiations with infrastructure suppliers both for its own 3G network rollout and also the shared 3G network in 3GIS. Europolitan Vodafone expects to conclude discussions on the ownership structure of 3GIS in the same timeframe. Further financial information about the cost implications of these discussions will be provided in due course. Market overview Customers The growth in the customer base in the first quarter of the financial period was lower than the growth experienced in the same calendar quarter of 2000 due to the higher penetration in Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. . Europolitan Vodafone continues to seek growth in its customer base only when it makes strong financial sense to do so, whilst also focusing on services for its existing customers. In line with its previous announcements, the company sought to reduce commission levels, which contributed to the modest growth during the quarter. Of its total customer base at 30 June 2001, Europolitan Vodafone had an active customer base of 89%. The proportion of active contract customers amounted to 92% and prepaid customers 80%. Active customers are defined as those who have made a chargeable outgoing call in the last three months. During the quarter, a new concept was launched based on simplicity for the customer. The concept is called Easy, and is geared to private customers and subdivided into four tariffs This is a list of tariffs and trade legislation:
(2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. , number display and Europolitan Vodafone's data service at no additional cost. In May 2001, Europolitan Vodafone launched a youth concept initiative - the prepaid card CU. The prepaid card offers both prices and services adapted to the lifestyle and needs of young people. The CU concept also includes a web site - www.wannacu.com, and the aim is for it to develop into a community for young people. Services During the quarter Europolitan Vodafone extended its mobile service offerings with over 100 new WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. and SMS services. Its customers now have access to among other things, sports results directly to their mobile phone in addition to news, weather and share prices. Europolitan Vodafone's WAP portal has also been extended with new WAP services including entertainment, music, and a variety of other information. Europolitan Vodafone's three-year initiative The Wireless Office concept has seen the number of companies with wireless offices doubled in one year. Its Wireless Office service gives companies a single wireless telephony telephony without wires, usually employing electric waves of high frequency emitted from an oscillator or generator, as in wireless telegraphy. A telephone transmitter causes fluctuations in these waves, it being the fluctuations only which affect the receiver. See also: Wireless solution that replaces all previous corporate subscriptions. The result is that telephone users are no longer tied to their workplace. Staff can access the same types of switching functions as in a fixed network, e.g. short numbers, call transfer, voice mailbox A simulated mailbox in the computer that holds e-mail messages. Mailboxes are stored on disk as a file of messages, a database of messages or as an individual file for each message. The standard mailboxes are usually In, Out, Trash and Junk (Spam). and conference calls, with their mobile phones. Furthermore, users have access to a range of mobile services such as sending and receiving text messages, mobile fax and mobile data. Service Provider Agreements During the first quarter Europolitan Vodafone and LunarWorks formed a jointly owned company, LunarMobil Sverige AB. LunarMobil Sverige AB is 51 per cent owned by Europolitan Holdings AB and 49 per cent by LunarWorks AB. LunarWorks is currently managing an on-line meeting place for young people - Lunar LUNAR. That which belongs to the moon; relating to the moon as a lunar month. See Month. Storm - with more than half a million active members. The collaboration Working together on a project. See collaborative software. is designed to help LunarWorks' youth portal to go mobile. The mobile services and concepts will be marketed and sold under the LunarMobil brand name. Telenor Telenor (OSE: TEL, NASDAQ: TELN) is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia. Mobil Communications has through its subsidiary Zalto Communications AS signed an agreement with Europolitan Vodafone whereby Zalto will use the company's network to sell mobile services to the Swedish market with the brand "djuice djuice (short of digital juice) is a youth based mobile phone plan from Telenor. It is currently available in Bangladesh, Hungary, Norway, Pakistan, Sweden and Ukraine. ". First Quarter Highlights -- On April 5, Europolitan Vodafone announced that it had extended its mobile service offerings with over 100 new WAP and SMS services. The customers now have access to among other things, sports results directly to their mobile phone in addition to news, weather and share prices. (Press Release 2001-04-05). -- On April 18, Europolitan Vodafone and LunarWorks announced that they had formed a jointly owned company, LunarMobil Sverige AB. LunarWorks is currently managing an on-line meeting place for young people - Lunar Storm - with more than half a million active members. The collaboration is designed to help LunarWorks' youth portal to go mobile. (Press Release 2001-04-18). -- Europolitan Vodafone's concept The Wireless Office has become a success. The number of companies with wireless offices has doubled in one year. At the end of the first quarter, nearly 50 companies within industry, the public sector and the IT, pharmaceutical and haulier industries currently have wireless office agreements. (Press Release 2001-04-24). -- Reuters Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. and Europolitan Vodafone have signed a collaboration agreement that will make Europolitan Vodafone the first mobile operator in Sweden to offer its customers Reuters' financial news directly to their mobile phones. (Press Release 2001-05-02). -- Europolitan Vodafone announced that a wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. solution for parking fees had been developed with Parking Partners. Europolitan Vodafone's customers can now easily pay parking fees with their mobile phone via SMS, WAP, and GPRS or by calling a special phone number. (Press Releases 2001-05-08 and 2001-05-30). -- On May 14, Europolitan Vodafone and HI3G Access AB announced that they had founded a 50:50 owned joint venture company - 3G Infrastructure Services AB - that will provide the two companies with 3G infrastructure covering up to 70% of the population. (Press Release 2001- 05-14). -- Europolitan Vodafone launched a new subscription concept for private customers on May 14. The concept is called Easy, and is subdivided into four tariffs for different needs: Easy Kontant, Easy Fritid, Easy SMS and Easy Alltid. (Press Release 2001-05-14). -- Orange signed a Letter of Intent with Europolitan Vodafone and HI3G Access AB regarding infrastructure co-operation. (Press Release 2001-05-16). -- Europolitan Vodafone launched a new prepaid card, CU that is specially designed for young people in the 15-25 age group. (Press Release 2001-05-22). -- Europolitan Vodafone applied for a licence to provide fixed radio access. Fixed radio access is a wireless broadband High-speed wireless transmission of data. What is "high" speed is always a changing number. Wireless systems are typically slower than land-based, wireline networks. In the past, wireless broadband started at 250 Kbps, whereas land-based broadband was generally considered to start at T1 variant variant /var·i·ant/ (var´e-ant) 1. something that differs in some characteristic from the class to which it belongs. 2. exhibiting such variation. var·i·ant adj. . (Press Release 2001-05-29). -- In June Europolitan Vodafone announced that it had signed a service provider agreement with Zalto Communications AS, a subsidiary of Telenor Mobile Communications whereby Zalto will use Europolitan Vodafone's network to sell mobile services to the Swedish market. (Press Release 2001-06-18). -- Ericsson Er·ics·son , John 1803-1889. American engineer and inventor who built the first ironclad warship, the Monitor (1862), which engaged the Confederate Merrimack in a famous naval battle of the Civil War (March 9, 1862). and Europolitan Vodafone announced in June that a working partnership was initiated relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Ericsson's new digital pen - Chatpen - which enables direct communication via mobile phones, computers and the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . (Press Release 2001-06-18). Regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. Update Interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. Tariffs On May 29, 2001, Telia Mobile was ordered by the Swedish National Post and Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Agency (PTS) to reduce its interconnection charge from fixed to mobile in the mobile network from SEK 1.18 per minute to SEK 0.98 per minute. Telia Mobile appealed against this decision with the administrative court. On 31 May, the court granted an injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity, is used especially where money damages would not satisfy a plaintiff's claim, or to to stop the reduction until such time as the appeals process has been completed. Telia Mobile's termination charge therefore remains at SEK 1.18. This report has not been audited. The same accounting principles and calculation methods have been applied in the quarterly report as in the full year report to March 31, 2001. Europolitan Holdings AB is the holding company of the mobile operator Europolitan Vodafone. The group operates a GSM network in Sweden and has a licence to build a 3G mobile telecoms network. Europolitan Vodafone employs some 1 400 people. Europolitan Holdings AB is listed on the O- list of the Stockholm Stock Exchange's Attract 40. The company's principal owner is Vodafone, with 71 per cent of Europolitan Holdings AB. The remaining 29 per cent is owned by approximately 30,000 private shareholders, unit trust funds and insurance companies. The Vodafone group is represented on 5 continents and has around 93 million customers (proportionate customers). For more information, please visit www.europolitan.se and www.vodafone.com.
KEY FINANCIAL DATA Three Months Change Percen
t
FIRST QUARTER 30 June 2001 30 June 2000
Number of customers end of 1 040 000 941 000 99 000 11%
period
Net customer additions 27 000 56 000 -29 000 -52%
Average monthly revenue per 455 449 6 1%
customer * (SEK)
Average monthly revenue per 570 551 19 3%
subscriber *
(excluding prepaid EASY
cards) (SEK)
Net sales (SEK mil) 1 459 1 302 157 12%
EBITDA** (SEK mil) 616 542 74 14%
EBITDA margin (%) 42% 42% - -
Income before taxes (SEK 468 417 51 12%
mil)
Capital expenditures (SEK 248 216 32 15%
mil)
Free cash flow*** (SEK mil) 111 104 7 7%
Share price (end of period) 67 112 -45 -40%
(SEK)
Number of shares outstanding 409 287 740 408 660 000 627 740 0.2%
- undiluted
Number of shares outstanding 409 871 935 409 884 948 -13 013 -
- diluted
Number of shares outstanding 409 205 685 408 660 000 545 685 0.1%
(weighted average)
undiluted
Number of shares outstanding 409 789 881 409 884 948 -95 067 -
(weighted average)
diluted
* Europolitan AB Revenue ** Earnings before interest, taxes,
(net sales) depreciation and amortisation
*** Cash flow after
investing activities
Of its total customer base at 30 June 2001, Europolitan Vodafone had an
active customer base of 89%. The proportion of active contract customers
amounted to 92% and prepaid customers 80%. Active customers are defined
as those who have made a chargeable outgoing call in the last three
months.
Consolidated
Income Statements
Amounts in SEK millions 2001- 2000-
04-01- 04-01-
2001- 2000-
06-30 06-30
(3 (3
months months
) )
Net sales 1 459 1 302
Cost of sales -741 -720
Gross profit 718 582
Selling expenses -153 -97
Administrative expenses -108 -73
Other operating income 6 8
Other operating expenses -2 -4
Operating income before 461 416
financial items
Financial income 9 3
Financial expense -2 -2
Income before taxes 468 417
Taxes -132 -117
Minority interests 1 0
Net income 337 300
Weighted average 0.82 0.73
undiluted net income per
share (SEK)
Weighted average diluted 0.82 0.73
net income per share
(SEK)
The financial statements have been presented with costs classified
on a "functional basis" in order to provide a more meaningful analysis
to readers. Prior year amounts have been restated to conform to the
2001 presentation.
Consolidated
Balance Sheets
Amounts in SEK millions 2001-06- 2001-03- 2000-06-
30 31 30
ASSETS
Intangible fixed assets 54 58 69
Tangible fixed assets 3 027 2 918 2 628
Construction-in-progress 289 303 235
Financial fixed assets 3 3 0
Total fixed assets 3 373 3 282 2 932
Inventories 46 32 86
Accounts receivable 520 440 423
Other current assets 516 465 467
Short-term loan to majority 910 760 0
owner
Cash and bank deposits 53 58 61
Total current assets 2 045 1 755 1 037
Total assets 5 418 5 037 3 969
SHAREHOLDERS' EQUITY,
PROVISIONS AND LIABILITIES
Restricted equity 1 881 1 759 1 430
Unrestricted equity 1 528 1 310 665
Total shareholders' equity 3 409 3 069 2 095
Minority interests 4 4 0
Allocation to pension fund 25 21 15
reserve (FPG/PRI)
Deferred taxes 683 636 512
Other provisions 8 9 0
Total provisions 716 666 527
Long-term liabilities to 93 57 8
financial institutions
Total long term liabilities 93 57 8
Short-term liability to 0 0 210
majority owner
Short-term liabilities to 4 9 18
financial institutions
Accounts payable 277 258 209
Tax liabilities 296 283 272
Other liabilities 619 691 630
Total current liabilities 1 196 1 241 1 339
Total shareholders' equity, 5 418 5 037 3 969
provisions and liabilities
Consolidated
Statements of Cash Flows
2001- 2000-
04-01- 04-01-
Amounts in SEK millions 2001- 2000-
06-30 06-30
(3 (3
months months
) )
Income before taxes 468 417
Depreciation and 155 126
amortisation
Other items 9 5
Taxes paid -72 -75
Cash provided by operations 560
before changes in working 473
capital
Changes in working capital -201 -153
Cash flows from operating 359 320
activities
Investments in tangible -248 -216
assets
Cash flows after investing 111 104
activities
Advances from majority 0 210
shareholder
Proceeds from long-term 36 0
borrowings
Repayment of loan -5 -19
Exercise of options 3 0
Dividends paid 0 -450
Cash flows from financing 34 -259
activities
Change in cash and cash 145 -155
equivalents
Cash and cash equivalents - 818 216
opening balance
Cash and cash equivalents - 963 61
closing balance
Statements of changes in shareholders' equity
Total Total
Share Restric restric Unrestri sharehol
Amounts in SEK capit ted ted cted ders'
millions al reserve equity equity equity
s
Balance at 31 March 102 1 220 1 322 923 2 245
2000
Reclassification 0 108
between restricted
and unrestricted 108 -108 0
reserves
Dividends paid 0 0 0 -449 -449
Net income 3 months 0 0 0 299 299
Balance at 30 June 102 1 328 1 430 665 2 095
2000
Exercise of options 0 13 13 0 13
Reclassification 0
between restricted
and unrestricted 316 316 -316 0
reserves
Net income 9 months 0 0 0 961 961
Balance at 31 March 102 1 657 1 759 1 310 3 069
2001
Exercise of options 0 3 3 0 3
Reclassification 0 119 -119
between restricted
and unrestricted 119 0
reserves
Net income 3 months 0 0 0 337 337
Balance at 30 June 102 1 779 1 881 1 528 3 409
2001
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