Telenor ASA · OSL:TEL
Telenor ASA — Q2 2001 Earnings Presentation
42 slides from Telenor ASA's earnings presentation, July 2001
Slide 1: Telenor - Second Quarter 2001
Telenor - Second Quarter 2001
Slide 2: Group Overview
Group Overview Tormod Hermansen CEO
Slide 3: Highlights
Highlights ! Strong growth and profitability in Telecom and Mobile ! Net debt reduced by NOK 29,6 billion to NOK 10,9 billion ! Pre-tax profit of NOK 10.7 billion from sale of Esat Digifone stake ! Signed Heads of Terms with KPN, Sonera and TDC to acquire all outstanding shares in Pannon ! Signed ac
Slide 4: Reported Key Figures
Financial Overview Reported Key Figures NOKm Growth H1-01 H1-00 00-01 Revenue 20 148 17 838 13% EBITDA 4 797 4 701 2% Profit before tax 12 094 1 657 630%
Slide 5: Strong growth H1 2000 – H1 2001
Strong growth H1 2000 – H1 2001 Mobile Telecom Internet Broadband Pro forma * Revenue Growth 25% 4% 76% 19% Pro forma * EBITDA Growth 34% 7% nm -30% * Pro forma figures excludes all sales gains and losses 5
Slide 6: Mobile Communications
Mobile Communications
Slide 7: Executing our international mobile strategy
Executing our international mobile strategy ! We have: " Divested our minority stakes in: • VIAG Interkom • Esat Digifone • North-West GSM " Increased our stakes into consolidating and controlling positions in: • Pannon GSM • DiGi.com
Slide 8: Mobile Communications
Mobile Communications ! mNorway shows a strong EBITDA margin of 36% first six months ! Continued strong growth in revenues and EBITDA (Proforma) – Revenue growth 25% from 1st H – 2000 – EBITDA growth 34% from 1st H 2000 ! Pre-tax profit of NOK 10.7 billion from sale of Esat Digifone stake ! Improved
Slide 9: Proportionate Subscribers, Quarterly
Proportionate Subscribers, Quarterly (incl Zalto, excluding other SP) Esat Digifone 5,628 5,720 5,730 5,091 491 VIAG 455 Interkom 305 383 230 3,795 Other 3,415 3,040 3,497 mHorizon 329 174 295 130 2,669 1,189 2,344 978 mNorway 2,134 2,199 2,189 2,233 2,012 2,103 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 20
Slide 10: mNorway Average Revenue Per User
mNorway Average Revenue Per User 400 342 * 337 350 334 306 300 250 NOK 200 150 100 50 0 Q1 Q1 Q2 Q2 2000 2001 2000 2001 Note: ARPU based on new method for counting prepaid * Q2 2000 : NOK 12 higher ARPU due to one-off effect of NOK 66 million
Slide 11: Telecom
Telecom Telecom Solutions Business Solutions
Slide 12: Telecom
Telecom ! Improved underlying EBITDA due to cost reductions ! Continued stable fixed line market share of 73% since the end of last year ! A more challenging ASP-market in Q2 vs Q1
Slide 13: Market Share – Fixed Line
Market Share – Fixed Line Market Share - Traffic 90 Traffic (billion minutes) 82% 85 79% 78% 80 I 4% 75 I 73% 70 65 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Note: 4% dip due to preselection phase 2 13
Slide 14: Internet
Internet
Slide 15: Internet
Internet ! Strong revenue growth of 76% compared to 1H-2000 ! Changed our International CSP strategy ! EBITDA deficit is expected to be higher than last year ! Write-down of NOK 544 million in Q2
Slide 16: Broadband Services
Broadband Services
Slide 17: Broadband
Broadband • Revenue growth of 19% from 1.H 2000 • Underlying growth in subscribers was 7% from year end • Signed acquisition agreement of Canal Digital • Decided to wind-up the business in Coloursat and Satellite Tracking
Slide 18: Group Financial Overview Q2 2001
Group Financial Overview Q2 2001 Torstein Moland Chief Financial Officer
Slide 19: Subscriber growth
Financial Overview Subscriber growth Growth 6 Months to Measure 1999/2000 30/06/01 Subscribers Norway 13% 2% Mobile Proportionate subscribers mHorizon 1) 225% 31% Broadband Pay-TV subscribers 2) 18% 7% Internet ISP customers (including Frisurf) 56% 15% Telecom ISDN/PSTN lines 4% 0% 1) 31% growth adj
Slide 20: Reported Key Figures
Financial Overview Reported Key Figures NOKm Growth H1 H1 Growth 1999 2000 (%) 2000 2001 (%) Revenue 33 567 37 644 12 % 17 838 20 148 13 % EBITDA 9 049 9 563 6% 4 701 4 797 2% EBIT 4 002 3 629 -9 % 1 983 677 -66 % Result of associated companies (1 239) (692) NM (272) 12 251 NM Net Financial Items 55
Slide 21: Reported Key Figures by Quarter
Financial Overview Reported Key Figures by Quarter 2Q 3Q 4Q 1Q 2Q NOKm 2000 2000 2000 2001 2001 Revenue 9 138 9 479 10 326 10 047 10 101 EBITDA 2 234 2 755 2 107 2 597 2 200 EBIT 817 1 234 411 986 (309) Result of associated (43) (495) 75 10 188 2 063 companies Net Financial Items (25) (425) (455) (5
Slide 22: Proforma Revenue and EBITDA
Financial Overview Proforma Revenue and EBITDA NOKm H1 H1 1999 2000 2000 2001 Revenue 33 567 37 644 17 838 20 148 - Gain on sales 783 1 042 427 342 ProForma Revenue 32 784 36 602 17 411 19 806 Growth 14 % 12 % 8% 14 % Reported EBITDA 9 049 9 563 4 701 4 797 - Gain on sales 783 1 042 427 342 - Loss o
Slide 23: Proportionate, and Proforma Figures
Financial Overview Proportionate, and Proforma Figures Proportionate proforma Revenues Proportionate proforma EBITDA NOKm NOKm 5,830 28,724 4,501 20,714 H1 2000 H1 2001 H1 2000 H1 2001 Growth: 39% Growth: 30%
Slide 24: Revenues by Business Area – Pro Forma
Financial Overview Revenues by Business Area – Pro Forma by separate quarter 2Q 3Q 4Q 1Q 2Q NOKm 2000 2000 2000 2001 2001 Telecom 4 515 4 475 4 712 4 677 4 657 % Change YoY 8% 0% 21 % 6% 3% Mobile 2 405 2 579 2 683 2 748 2 867 % Change YoY 22 % 23 % 24 % 32 % 19 % Internet 250 274 363 407 454 % Chan
Slide 25: EBITDA by Business Area – Pro Forma
Financial Overview EBITDA by Business Area – Pro Forma by separate quarter 2Q 3Q 4Q 1Q 2Q NOKm 2000 2000 2000 2001 2001 Telecom 1 343 1 463 1 357 1 404 1 386 % Margin 30 % 33 % 29 % 30 % 30 % Mobile 614 863 611 818 825 % Margin 26 % 33 % 23 % 30 % 29 % Internet (135) (169) (349) (297) (260) % Margin
Slide 26: mNorway
mNorway Revenues and EBITDA ARPU (NOK) SMS Revenues (NOKm) Margins EBITDA-margin Revenues (NOKm) 496 501 4,920 460 4,213 312 33% 36% 149 138 H1 H1 H1 H1 H1 H1 2000 2001 2000 2001 2000 2001 Post Paid Pre Paid Note: ARPU based on new method for counting prepaid subscribers. In addition prepaid ARPU in
Slide 27: Mobile operations outside Norway
Mobile operations outside Norway Proportionate Proportionate Proportionate Turnover (NOKm) EBITDA (NOKm) Net result (NOKm) Other Sonofon Viag & Esat 5,759 83 546 1,589 44 168 40 -1 995 NOK million 237 -34 3,273 1,304 1,184 4,218 -253 372 1,969 430 -287 -58 H1 H1 H1 H1 H1 H1 2000 2001 2000 2001 2000
Slide 28: Telenor Telecom proforma
Telenor Telecom proforma Telecom Solution Business Solution NOKm 8628 8534 1157 783 2711 2779 31,4 32,6 % % 11 -101 H1 H1 2000 2001 H1 H1 2000 2001 Revenue EBITDA
Slide 29: Telenor Internet
Telenor Internet Revenue 454 407 EBITDA 363 NOKm 251 274 239 -91 -136 -169 -260 -297 -349 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2002
Slide 30: Result of Associated Companies in H1
Financial Overview Result of Associated Companies in H1 Result a. Tax Net exc.val. Gain on sale Total NOKm in Companies Telenor Telenor result Sonofon 40 (7,952) (7,912) Connect Austria (107) (107) Pannon GSM 72 (20) 52 Esat Digifone 44 (10) 10,728 10,762 Viag Interkom 10,707 10,707 Telenordia (58)
Slide 31: Write-downs in Q2
Financial Overview Write-downs in Q2 Associated Total EBIT Net finance NOKm companies result Sonofon 7,500 7,500 Nextra 544 544 Telenordia 665 665 Other 144 333 477 Total 688 8,165 333 9,186
Slide 32: Cash Flow
Financial Overview Cash Flow NOKm 2000 H1 2000 H1 2001 Operating activities + Profit before taxes 2 003 1 657 12 094 + D&A, associated companies 6 625 2 990 (8 131) + Other (2 269) (2 196) (573) Cash flow from operating activities 6 359 2 451 3 390 Cash from from investing activities (47 752) (9 636
Slide 33: Balance Sheet
Financial Overview Balance Sheet NOKm 31 Dec 2000 30 Jun 2001 Fixed Assets 80.881 63.578 Current Assets 12.804 22.477 Total Assets 93.685 86.055 Shareholders' Equity 35.474 41.367 Minority Interests 2.706 2.922 Liabilities Interest-bearing liabilities 42.812 22.953 Non-interest-bearing liabilities 1
Slide 34: Sonofon, Pannon, Digi
Sonofon, Pannon, Digi
Slide 35: SONOFON – Q2 2001
SONOFON – Q2 2001 Revenues and EBITDA Margins EBITDA margin Revenues (DKKm) 887 821 851 800 759 25% 23% 22% 20% 21% Q200 Q300 Q400 Q101 Q201
Slide 36: Sonofon Development Post-paid Subscribers
Sonofon Development Post-paid Subscribers 707 700 600 500 '000 subscribers 400 300 200 100 0 Q498 Q199 Q299 Q399 Q499 Q100 Q200 Q300 Q400 Q101 Q201
Slide 37: Quarterly Figures for Pannon
Quarterly Figures for Pannon Revenues (NOKm) EBITDA (NOKm) Subscribers (‘000) 1 001 1 556 893 873 826 1 369 719 1 217 632 988 842 751 338 290 307 206 226 250 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2000 2000 2000 2000 2001 2001 2000 2000 2000 2000 2001 2001 2000 2000 2000 2000 2001 200
Slide 38: Quarterly Figures for DiGi
Quarterly Figures for DiGi Revenues (NOKm) EBITDA (NOKm) Subscribers 625 564 517 1 000 458 932 427 234 212 798 195 707 630 161 137 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 FY00 FY01 FY01 FY01 FY01 FY00 FY01 FY01 FY01 FY01 FY00 FY01 FY01 FY01 FY01* Note: Quarterly figures represent DiGi’s Financi
Slide 39: Major acquisitions
Major acquisitions Investments Consolidated from NOKm (date) Pannon Appr. 8,100 Q4-01 or Q1-02 Digi Appr. 3,400 Q3-01 or Q4-01 Canal Digital 1,900 Estimate; Q1/Q2 2002 Comsat 1,200 Estimate; Q4 2001 Telenordia 128 Q4-01 or Q1-02
Slide 40: Outlook
Outlook Torstein Moland Chief Financial Officer
Slide 41: Outlook - 2001
Outlook - 2001 ! Continued improvement in EBITDA compared with last year (adjusted for sales gains and one-offs) – EBITDA growth in Mobile – Telecom – Continued high market share and focus on cost efficiency – Internet - EBITDA deficit higher than last year – Broadband – Increased costs associated w
Slide 42: Summary
Summary ! Strong performance in both fixed- and mobile operations in Norway ! The international mobile portfolio is positioned for strong growth ! We execute our strategy - taking operational controle or exit ! We have trimmed the balance sheet through write downs and changed strategy for our intern