1999 First Quarter Report

Europolitan reports solid first quarter results, with pre-tax income up 75% to SEK 291 million * 42,000 net customer additions * Revenue of SEK 923 million * Operating cash flow up 52% to SEK 398 million * New wireless office customers 1999 First Quarter Report Market Overview Europolitan increased its total customer base to 666,000 as of March 31, 1999, including 115,000 active Europolitan EASY prepaid cards. A total of 42,000 (50,000) new customers were added in the first quarter, including 20,000 EASY prepaid cards. Europolitan continued to be active in the market through its various distribution channels. Europolitan Stores opened a new outlet in Stockholm, raising the total number of stores to 25. The continued success of Europolitan's wireless office was marked by the signing of three new customers in March, Saab, Ericsson Radio Systems and Enea Data. Together these agreements cover initially 4,200 new users who are switching their fixed telephone calling to Europolitan's GSM system. Awareness of and interest in the wireless office solution among companies in Sweden is growing. The second phase of the wireless office, featuring Europolitan's intranet office, to be introduced before the end of the year, is expected to generate further momentum toward using mobile telephony for a wider range of telecommunications needs. Since the beginning of the year Europolitan has announced several initiatives which bring even greater value to mobility through advanced products and services over GSM. These include Nordic Centrex service (Press Release January 28); a new mobile banking service known as "Mobilt ePostgiro" (Press Release March 8); a WAP-based share-trading service (Press Release March 15); a positioning service using GSM (Press Release March 22); and a successful trial of faster data transmission over GSM, to be launched in the summer (Press Release April 13). Revenue Europolitan's consolidated net sales plus other income for the three months ending March 31,1999 was SEK 923 million, an increase of 34% compared with the same period last year (SEK 688 million). Average monthly revenue per subscriber, excluding prepaid EASY cards, increased a strong 8% to SEK 541 (SEK 500), due to continued growth in traffic per user and other services. With prepaid EASY customers included, average monthly revenue per customer declined 5% to SEK 465 (SEK 488), reflecting the larger proportionate share of prepaid users in the customer base and their lower average usage compared with subscription customers. Operating Expenses and Profit With first-quarter operating expenses of SEK 625 million (SEK 507 million), excluding capitalized expenses for own use, and net financial expense of SEK 7 million (SEK 15 million), profit after financial items increased 75% to SEK 291 million (SEK 166 million), reflecting further gains in operating efficiency. After tax expense of SEK 81 million (SEK 0), net profit of SEK 210 million (SEK 166 million) resulted. Capital Expenditures Capital expenditures in the first three months of 1999 increased moderately to SEK 178 million, compared with SEK 170 million in the previous year. Investments continued to be focused on increasing capacity, coverage and quality of the GSM network, using both the 900 and 1800 MHz frequency bands, as well as developing new services. Liquidity and Financing Free cash flow (cash flow after investing activities) rose sharply to SEK 194 million (SEK 41 million), up 370% compared with the same period last year. Debt to financial institutions declined to SEK 677 million (SEK 1,280 million). Available borrowing facilities as of March 31, 1999 were SEK 984 million (SEK 400 million). Parent Company Results The Group's parent company, Europolitan Holdings AB, had revenue in the first quarter of SEK 5.1 million (SEK 4.2 million) and profit after financial items of SEK 958 thousand (SEK 44 thousand). Investments were SEK 0 (SEK 15 thousand). The parent company's change in cash was SEK 2 million (SEK -1.4 million), while external financing decreased by SEK 190 million (increase of SEK 540 million). Dividend and Share Split As previously announced, the Board of Directors proposes a dividend of SEK 9 per share and a split of each existing common share of Europolitan Holdings AB into ten new common shares. Annual General Meeting The Annual General Meeting of Europolitan Holdings AB will be held on April 28, 1999 at 6:00 p.m. at Salén Konferens och Matsalar, Norrlandsgatan 15 in Stockholm. Annual Report Europolitan Holdings' Annual Report was distributed on April 14, 1999. Half Year Report The Company's Half Year Report will be released on July 14, 1999. Stockholm, April 20, 1999 The Board of Directors - Europolitan Holdings AB (publ) For further information, please contact: Tomas Isaksson, President and CEO Devin Brougham, CFO Monica Enderstein, Investor Relations Tel: +46 (0)8 678 09 50 Previous financial reports and additional information regarding Europolitan can also be obtained on the Internet at www.europolitan.se. [REMOVED GRAPHICS] COMPARISON OF KEY FIGURES Three Months THREE MONTHS - First Quarter Change Percent Ended Mar 31, Mar 31, 1999 1998 192,00 Customers (End of Period) 666,000 474,000 41% 0 Net Customer Additions 42,000 50,000 -8,000 -16% Average Monthly Revenue per (SEK) 465 488 -23 -5% Customer * Average Monthly Revenue per (SEK) 541 500 41 8% Subscriber * (excluding prepaid EASY cards) Net sales plus other income (SEK mil) 923 688 235 34% Operating Cash Flow ** (SEK mil) 398 262 136 52% Operating Cash Flow Margin (%) 43% 38% 5% 13% Pre-Tax Income (SEK mil) 291 166 125 75% Capital Expenditures (SEK mil) 178 170 8 5% Free Cash Flow *** (SEK mil) 194 41 153 373% * Europolitan AB Revenue (net sales plus other operating income) ** Cash Supplied from Operations before Changes in Working Capital, excluding financial items *** Cash Flow after Investing Activities CONSOLIDATED INCOME STATEMENT (Unaudited - SEK million) Three Months Ended March 31, 1999 1998 Net Sales plus other operating income 923 688 Capitalized expenses for own use 8 7 Total Operating Revenue 931 695 Operating Expenses - 633 - 514 Operating Profit before Financial Items 298 181 Financial Items, Net - 7 - 15 Profit after Financial Items 291 166 Taxes - 81 0 Net Profit 210 166 Net Profit per Share (SEK) 5.12 4.00 (fully diluted, adjusted for preference share dividends) CONSOLIDATED BALANCE SHEET (Unaudited - SEK million) March 31, 1999 1998 ASSETS Fixed Assets 2 232 1 918 Construction in Progress 146 170 Total Fixed Assets 2 378 2 088 Inventory 40 33 Accounts Receivable 178 136 Other Current Assets 289 232 Cash and Bank Deposits 19 17 Total Current Assets 526 418 TOTAL ASSETS 2 904 2 506 SHAREHOLDERS' EQUITY AND LIABILITIES Total Shareholders' Equity 1 457 842 Allocation to pension fund reserve 8 4 Deferred taxes 309 0 Total Provisions 317 4 Long-term liabilities to financial institutions 650 1 250 Short-term liabilities to financial 27 30 institutions Total Liabilities to Financial 677 1 280 Institutions Accounts Payable 128 116 Other Liabilities 325 264 Total Current Liabilities 453 380 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 2 904 2 506 CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited - SEK million) Three Months Ended March 31, 1999 1998 Profit after financial items 291 166 Depreciation and amortization 95 76 Other items - 6 14 Cash Supplied from Operations before 380 256 Changes in Working Capital Changes in Working Capital - 8 - 45 Cash Flow from Operating Activities 372 211 Capital Expenditures - 178 - 170 Cash Flow after Investing Activities 194 41 Proceeds from long-term borrowings 0 528 Finance lease principal payments - 200 - 38 Redemption of preference shares 0 - 536 Cash Flow from Financing Activities - 200 - 46 Change in Cash - 6 - 5 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/04/20/19990420BIT00070/bit0001.pdf http://www.bit.se/bitonline/1999/04/20/19990420BIT00070/bit0002.doc