3 May 2011
Improving growth and record earnings
- Net sales decreased 1.1 percent to SEK 26,754 million (27,053). Net sales in local currencies and excluding acquisitions increased 4.3 percent.
- The addressable cost base was flat at SEK 7,449 million (7,468). In local currencies and excluding acquisitions the addressable cost base increased 5.3 percent.
- EBITDA, excluding non-recurring items, increased 0.1 percent to SEK 9,776 million (9,763) and the margin increased to 36.5 percent (36.1). The increase in local currencies and excluding acquisitions was 4.0 percent.
- Operating income, excluding non-recurring items, increased to SEK 8,619 million (8,453).
- Net income attributable to owners of the parent company increased to SEK 5,988 million (5,043) and earnings per share to SEK 1.33 (1.12).
- Free cash flow decreased 37.4 percent to SEK 3,857 million (6,160) due to lower dividends from associated companies and higher paid taxes.
- During the quarter the number of subscriptions grew by 4.2 million, of which 2.0 million new subscriptions in the consolidated operations and 2.2 million in the associated companies, totaling 156.6 million.
- Group outlook for 2010 has been revised.
- Net sales decreased 2.2 percent to SEK 79,808 million (81,612). In local currencies and excluding acquisitions net sales increased 3.4 percent.
- Net income attributable to owners of the parent company increased to SEK 15,948 million (13,952).
- Free cash flow decreased to SEK 11,159 million (12,525).
Comments by Lars Nyberg, President and CEO
“It is encouraging to see that the organic growth rate improved further in the third quarter and that the growth is coming from many parts within our group. Both Mobility Services and Eurasia are seeing accelerated growth compared to previous quarters, the former driven by mobile data and equipment sales and the latter by macroeconomic recovery and higher mobile penetration. More importantly, we are delivering profitable growth and the EBITDA, excluding non-recurring items, in the third quarter was the highest in the company’s history.
In the Nordic region, the uptake of smart phones is boosting our mobile data revenues and equipment sales. Today, seven out of ten customers in Sweden are buying a smart phone with higher usage and average revenue per user as a result. The new iPhone 4 has been very well received by our customers and we can now see that other smart phone models based on Android and Symbian platforms are also getting a lot of traction. Our Spanish operator, Yoigo, recorded an all time-high customer intake and reached close to four percent market share and we remain confident that the operation will become EBITDA positive in the fourth quarter of 2010.
In Eurasia, we have invested significant amounts in building high-quality mobile networks in Uzbekistan and Nepal since we acquired the operations in 2007 and 2008. We can now see the result of these efforts. Both Ucell and Ncell are delivering record-high subscriber intake and we are closing the gap to the market leader in both countries. At the same time Kazakhstan, our largest market in Eurasia, continued to grow with growth in local currency exceeding 20 percent in the third quarter.
In Broadband Services, the on-going transition from traditional fixed telephony services to rich content services such as IPTV and Video on Demand is gaining momentum. This strengthens our firm belief that our fixed network is a crucial and differentiating asset for the future. At the same time it poses a short term challenge as we upgrade ADSL to VDSL and provide more households and businesses with fiber connections. We believe we can manage this difficult transition while protecting healthy margins. We are also encouraged that we now have more than 350,000 fiber/LAN customers which give us an opportunity to sell more services to our existing customers.
We have again raised our net sales outlook for the full year and we now believe our EBITDA margin will be higher in 2010 compared to last year.”
Questions regarding the reports:
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