Half Year* Results 2001/2002
Europolitan Holdings AB reports Half Year* results with pre-tax income
of SEK 968 million
· Net income of SEK 695 million
· 59 000 net customer additions
· Net Sales of SEK 2 923 million
· EBITDA of SEK 1 269 million
· Launch of Wireless Office for smaller companies
* Accounting year to 31 March
Europolitan Vodafone's customer base increased to 1 072 000 as of 30
September 2001, including 263 000 (209 000) active Europolitan Vodafone
prepaid cards. A total of 59 000 (78 000) customers was added in the
first half, being 33 000 contract customers (40 000) and 26 000 prepaid
cards (38 000). During the second quarter 32 000 (22 000) customers were
added, including 17 000 (12 000) contract customers and 15 000 prepaid
cards (10 000).
Europolitan Vodafone's consolidated first half net sales increased 11%
to SEK 2 923 million compared with the same period last year (SEK 2 627
Average monthly revenue per customer, excluding prepaid cards, was SEK
569 (SEK 550). The 3% increase reflects continuing stable market
conditions, in terms of both price and steady growth in minutes of use
Average monthly revenue per customer, including prepaid cards increased
1% to SEK 453 (SEK 449).
Cost of Sales, Operating Expenses and Profit
Cost of sales and operating expenses, increased 14% to SEK 1 993 million
(SEK 1 755 million) in the first half. The increase was due to:
· Customer related costs - increased level of marketing
activities, partly offset by reduced commission levels
· Depreciation on increased capital investments
· Continuing investment in new business areas (Mobile Internet,
Service Provision and Telematics) and the 3G rollout.
After net financial income of SEK 18 million (SEK 1 million), profit
after financial items was SEK 968 million (SEK 887 million). After tax
expense of SEK 277 million (SEK 250 million) and minority interest of
SEK 4 million (nil), net profit was SEK 695 million (SEK 637 million).
Capital expenditure in the first half amounted to SEK 474 million (SEK
391 million). Europolitan Vodafone continues to ensure that its
customers have access to a network of the highest quality and with the
most advanced technical features. In addition, the company's investment
in 3G continued during the second quarter, although this did not
represent a significant part of the total investment for the half-year.
Liquidity and Financing
EBITDA amounted to SEK 1 269 million (SEK 1 145 million) during the half
year, an increase of 11%. Cash flow after investments (free cash flow)
increased by 14%, despite increased investment in capital expenditures
and higher working capital. The company has made a short-term loan to
Vodafone Group Plc of SEK 1 266 million (SEK 205 million) with market
rate terms and interest.
Parent Company Results
The Group's parent company, Europolitan Holdings AB, had revenue in the
first half of SEK 17.7 million (SEK 12.3 million) and posted a profit
after financial items of SEK 1.6 million (loss SEK 81 000). There was no
change in the parent company's cash (nil).
In 1997, Europolitan Holdings AB issued three debentures (issue Nos. 1,
2 and 3) each with detachable warrants with a right to subscribe to new
shares. Warrants were detached and transferred to senior management of
the Europolitan Group. The exercise period according to the warrants
connected to issue No. 2 is 1 June to 1 December 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 20,835 to SEK
102,342,770 and increased the number of shares by 83,340 to 409,371,080
since 30 June 2001.
At the end of August Europolitan Vodafone announced that Nokia and the
company had signed an agreement regarding the delivery of UMTS network
equipment. Nokia was chosen as the systems supplier for both the core
network and radio access, and will also deliver implementation and
technical maintenance services. Deliveries started in August 2001 and
the launch of commercial service is scheduled for 2002. The agreement
covers equipment for the infrastructure that Europolitan Vodafone is
building in Stockholm, Gothenburg, Malmö and Karlskrona (providing at
least 30 per cent of the population coverage).
Europolitan Vodafone estimates that costs for the company's UMTS
initiative will total around SEK 10 billion. This total includes costs
for infrastructure, systems, marketing and product management. These
include the company's own UMTS network, which is being built in
Stockholm, Gothenburg, Malmö and Karlskrona and Europolitan Vodafone's
50% share of the infrastructure being built by 3G Infrastructure
Services AB for the remaining UMTS coverage.
Collaboration agreement with the Vodafone Group
Europolitan Vodafone has signed an agreement with the Vodafone Group
designed to increase their joint economies of scale in a number of
different areas. The agreement covers collaboration in the areas of
product management and innovation, IT and technology management, supply
chain management, brand management and multinational account management.
Product management and innovation relates to the joint development of
new services, such as mobile payment services and multimedia services.
As part of an international group, Europolitan Vodafone will be able to
offer its customers advanced services that will work across the entire
Vodafone Group. Europolitan Vodafone participates actively in the
ongoing UMTS product development within the Vodafone Group.
The growth in the customer base in the second quarter of the financial
period was higher than the growth experienced in the same period last
year due the company's successful strategy of offering its customers
high quality network and services combined with high customer service
levels. Subscriber acquisition costs have been stable and at the same
level as the previous quarter.
Of its total customer base at 30 September 2001, Europolitan Vodafone
had an active customer base of 89%. The proportion of active contract
customers amounted to 91% and prepaid customers 82%. Active customers
are defined as those who have made a chargeable outgoing call in the
last three months.
During the first half, campaigns to increase awareness of the dual brand
were successfully launched, together with activities supporting the
first Pan-European products available in Sweden.
Mobile Number Portability was launched in Sweden on 1 September.
Europolitan Vodafone offered other network operators' mobile customers
the opportunity to port their numbers to Europolitan Vodafone from that
date, in line with regulatory requirements. To date, volumes of
customers choosing to port in the Swedish market have been modest, but
follow the expected trend.
During the second quarter Europolitan Vodafone continued to extend its
mobile service offerings with over 100 new WAP 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. The company's voice portal was enhanced with further
services during the quarter.
The Wireless Office is now available to everyone, opening up tremendous
opportunities to all companies that currently have to carry substantial
maintenance costs for switches and double telephones for their
employees. The new Wireless Office allows small companies to construct
their own office switch functionality without requiring switch
equipment. The service is a wireless all-in-one solution that is
designed to replace all fixed corporate telephony.
The new Wireless Office for small companies targets firms with up to 75
employees and is the latest subscription form in Europolitan Vodafone's
Wireless Office for All corporate concept. The concept includes other
services, such as the Wireless Office for large companies with or
without in-house switches.
During the summer Europolitan Vodafone has performed tests on the new
Multimedia Messaging Service (MMS) investigating the possibility of
sending and receiving multimedia message combining text and pictures.
The purpose of the test is to identify popular MMS services, study user
behaviour and evaluate various payment models.
During the half-year new telematics services were developed in the area
of mobile alarm services. Tests have been performed during the summer
and the first products will be launched later in the autumn.
Second Quarter Highlights
· Europolitan Vodafone announced that Sweden's most popular
Internet meeting place for young people, LunarStorm, with over 800,000
members, has launched its own prepaid card. LunarMobil's prepaid card
injects mobility into the youth portal, making its mobile services
constantly available to members. Press Release 2001-07-02.
· Europolitan Vodafone announced that Nokia and the company have
signed an agreement regarding the delivery of UMTS (Universal Mobile
Telecommunications System) networks for Europolitan Vodafone. Nokia will
be the systems suppliers for both the core network and radio access, and
will also deliver implementation and technical maintenance services.
Press Release 2001-08-30.
· In August, Europolitan Vodafone announced that it had chosen
Ericsson to supply transmission equipment for its 3G network. The
agreement entails the supply of transmission nodes for Europolitan
Vodafone's 3G network in Stockholm, Gothenburg, Malmö and Karlskrona.
Press Release 2001-08-30.
· Europolitan Vodafone and Comverse, a company developing network
based multimedia systems, have performed tests on the new Multimedia
Messaging Service (MMS). The purpose of the test is to identify popular
MMS services, study user behaviour and evaluate various payment models.
Press Release 2001-09-04.
· On 10 September, GPRS was made available to users of all
Europolitan Vodafone fixed subscription forms. Customers can use mobile
data services to check their e-mails or retrieve information from the
Internet and databases in a more convenient and cost-efficient manner.
Press Release 2001-09-10.
· Europolitan Vodafone announced in September that costs for the
company's UMTS initiative is estimated to around SEK 10 billion. This
total includes costs for infrastructure, systems, marketing and product
management. Europolitan Vodafone has also signed a collaboration
agreement with the Vodafone Group that will lead, amongst other things,
to substantial cost savings in product management and innovation and
supply chain management. Press Release 2001-09-11.
· Europolitan Vodafone announced that a new version of its
Wireless Office is now available to small companies, enabling them to
get rid of their fixed telephones. The new Wireless Office will be
simpler and more cost effective, since companies avoid the cost of
purchasing and operating switch equipment. Press Release 2001-09-18.
· In September, Europolitan Vodafone announced that SOS Alarm AB
and the company together have developed a new mobile alarm service. It
will initially only be offered to companies and organisations whose
staff work alone in exposed conditions, such as professional drivers,
social workers or forestry workers, people who need a simple and
efficient mobile alarm service. Press Release 2001-09-24.
· Europolitan Vodafone announced in September that the company
had signed an agreement with Nordic Alarm AB whereby the companies will
jointly develop wireless alarm communication solutions. Press Release
· On 26 September, Europolitan Vodafone launched mobile football
games. The games are called ManagerZone and Hattrick. ManagerZone is a
new and specially developed game with a clear focus on mobility, while
Hattrick is an established game with a steadily growing user base that
has now added mobile functionality to its features. Press Release 2001-
· On 28 September, Europolitan Vodafone announced that customers
now can use their own voices to listen to and download the most popular
ring signals directly from Europolitan Vodafone's Voice Portal. Press
· Europolitan Vodafone announced that the company's customer care
had been selected as the winner in the prestigious annual international
competition "Grand Prix Customer Service Awards" for telecom companies.
Press Release 2001-09-28.
Europolitan Vodafone's Third Quarter Report will be published by 25
Stockholm, 25 October 2001
The Board of Directors - Europolitan Holdings AB (publ)
For further information, please contact:
Jon Risfelt, President and CEO, tel: +46 708 33 10 01
Mark Carey, CFO, tel: +46 708 33 18 03
Monica Enderstein, Investor Relations, tel: +46 708 33 18 02
Tel: +46 (0)8 678 09 50
Previous financial reports and additional information regarding
Europolitan Vodafone can also be obtained on the internet at
This report has not been audited. The same accounting principles and
calculation methods have been applied in this report as in the full year
report to 31 March 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 1 500 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 95 million customers
(proportionate customers). For more information, please visit
www.europolitan.se and www.vodafone.com.