Europolitan Holdings AB reports nine months results with pre-tax income of SEK 1 439 million

Europolitan Holdings AB reports nine months results* with pre-tax income of SEK 1 439 million Net income of SEK 1 034 million 96 000 net customer additions Net sales of SEK 4 409 million EBITDA of SEK 1 899 million Pre-tax income for third quarter of SEK 471 million Launch of GPRS e-mail service First licence condition met - 3G network operational * Accounting year to 31 March Nine months results 2001/2002 Customer Growth Europolitan Vodafone's customer base increased to 1 109 000 as of 31 December 2001, including 294 000 (209 000) Europolitan Vodafone prepaid customers. A total of 96 000 new customers were added in the nine months (109 000), of which 39 000 were contract customers (52 000) and 57 000 (57 000) were prepaid customers. During the third quarter 37 000 (31 000) customers were added, including 31 000 prepaid customers (19 000). Net Sales Europolitan Vodafone's consolidated nine months net sales increased 11% to SEK 4 409 million compared with the same period last year (SEK 3 971 million). Average monthly revenue per customer, excluding prepaid customers, was SEK 565 (SEK 551). The 3% increase compared to the same period last year reflects continuing stability in market conditions, in terms of both price and steady growth in minutes of use per customer. Average monthly revenue per customer, including prepaid customers was SEK 448 (SEK 449). Cost of Sales, Operating Expenses and Income Cost of sales and operating expenses in the nine months ended 31 December 2001 increased 14% to SEK 3 028 million (SEK 2 649 million) compared to the same period last year. The increase was due to: · Increases in costs which are directly related to the increased number of customers and their usage. · Depreciation on increased capital investments. · Continuing investment in new business areas and the 3G rollout. After net financial income of SEK 30 million (SEK 4 million), income before taxes was SEK 1 439 million (SEK 1 345 million). After tax expense of SEK 412 million (SEK 378 million) and minority interest of SEK 7 million (nil), net income was SEK 1 034 million (SEK 967 million). Capital Expenditures Capital expenditures in the nine months amounted to SEK 925 million (SEK 687 million). This included the company's increasing investment in its 3G rollout, as well as ongoing investment in its GSM / GPRS network and in service development. Liquidity and Financing EBITDA amounted to SEK 1 899 million (SEK 1 738 million) during the nine months ended 31 December 2001, an increase of 9%. Cash flow after investments (free cash flow) decreased by 9%, due to increased investment in capital expenditures and higher working capital at the calendar year end. Europolitan AB has made a short-term loan to Vodafone Group Plc of SEK 1 255 million (SEK 500 million) on market terms. Option Programs 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 was 1 June to 1 December 2001. Subscriptions for new shares with exercise of the warrants connected to issue No. 2 have been made. During December 2001, the company undertook a program to repurchase 1.3m of its own shares, in accordance with the decision taken at the shareholders' meeting on 26 June 2001, in order to give the company increased possibilities to handle the share option program approved at the same meeting. This repurchase program, previously announced was finalised during December 2001. As a result of the above events the share capital at 31 December 2001 was SEK 102 426 103 and the number of shares was 408 384 410. Market Overview 3G Europolitan Vodafone announced on 15 January 2002 that Orange Sverige AB (Orange) had joined 3G Infrastructure Services AB (3GIS), the established 3G-infrastructure joint venture between Europolitan Vodafone and Hi3G. 3GIS's objective is to build and operate 3G-infrastructure covering up to 70 per cent of the total population in Sweden. 3GIS is a co-operation between three equal partners, which is fully in line with the regulations and licence conditions set out by The Swedish National Post and Telecom Agency. The cooperation is subject to approval from the Competition Authority. The participation of Orange in the joint venture will decrease Europolitan Vodafone's network rollout investment costs for the 3G initiative outside the three major cities of Stockholm, Malmö and Göteborg by one third. It will also reduce the total number of masts required, in turn minimising the impact on the environment. On 20 December 2001, Europolitan Vodafone opened its 3G network in Karlskrona, thereby meeting the deadline set by PTS as regards public access to 3G networks from 1 January 2002. Brand name During the nine-month period, campaigns were successfully launched to increase awareness of the dual brand, Europolitan Vodafone. In April 2002, the brand name will change to Vodafone. This step is intended to underline the fact that the company is part of the world's largest mobile telecoms group. New Year's Day 2002 saw the start of a comprehensive brand campaign. The aim of the campaign is to increase awareness of the Vodafone brand and demonstrate how Vodafone can bring together people from all over the world - from football fans to business people. Customers Growth in the customer base in the third quarter of the financial period was higher than the growth experienced in the same period last year. The number of prepaid connections was higher than contract additions principally due to seasonal factors and the market trend towards prepay connections during the final quarter of 2001. Subscriber acquisition costs have been stable at the same level as the previous quarter. Of Europolitan Vodafone's total customer base at 31 December 2001, 89% were active. The proportion of active contract customers amounted to 91% and the proportion of active prepaid customers amounted to 84%. Active customers are defined as those who have made a chargeable outgoing call in the last three months. Customer satisfaction In January 2002, Svenskt Kvalitetsindex published the results of its annual survey which sought to measure customer satisfaction and quality improvement in, among others, the fixed and mobile telephony sectors. As with previous surveys, Europolitan Vodafone stood out as the leader in terms of customer satisfaction in both the private and business customer segments of the mobile telecommunications sector. Services In November 2001 Europolitan Vodafone launched an e-mail service for GPRS customers enabling them to download new e-mail messages automatically at intervals set by the customer. In addition to this e- mail functionality, Europolitan Vodafone also adapted its GPRS price structure to suit all its customers. Europolitan Vodafone launched InfoManager in November 2001 as part of the Wireless Office concept that enables the staff of Europolitan Vodafone's corporate customers to get quick access to important internal information while they are out of the office. InfoManager can also help businesses to improve relationships with their customers by enabling them to offer services such as booking, balance information or product offers. This information is accessed via text messages or WAP directly from a mobile phone. Vodafone Group Plc announced in January 2002 that it had signed a global agreement with Ericsson to supply multimedia-messaging software (MMS). MMS is an evolution of today's successful SMS service, which will allow customers to compose, send and receive messages using all forms of media including text, pictures, audio and video clips. Europolitan Vodafone will adopt Ericsson's platform and is planning to launch MMS services during 2002. Service Provider Agreements Service provider agreements were signed with Campuz Mobile and Universal Telecom (Unitelco) during the third quarter. Campuz Mobile is a virtual mobile operator selling mobile phone services and subscriptions to students at Swedish universities and Unitelco will offer mobile services principally to its existing fixed line customers across a number of specific market segments. Third Quarter Highlights In October Europolitan Vodafone announced that the construction company Peab had signed an agreement for the provision of mobile services. The agreement covers around 3 500 employees. (Press Release 2001-10-23). Europolitan Vodafone announced a new pricing structure for GPRS and an e- mail service whereby e-mails are automatically sent to the customer's GPRS-enabled mobile phone. (Press Release 2001-10-24). On 6 November Europolitan Vodafone launched InfoManager, a service part of the Wireless Office concept that enables the staff of its corporate customers to get quick access to important internal information while they are out of the office. (Press Release 2001-11-06). Europolitan Vodafone and TietoEnator announced that they will develop a virtual payment card together. (Press Release 2001-11-28). Europolitan Holdings AB announced that it had undertaken a program to repurchase its own shares. (Press Release 2001-11-29). Europolitan Vodafone will change its brand name to Vodafone in April 2002. (Press Release 2001-12-19). Europolitan Vodafone offered mobile services in connection with the launch of the film "The Lord of the Rings, the Fellowship of the Ring". (Press Release 2001-12-10). On 20 December Europolitan Vodafone met PTS (Swedish Post and Telecom Agency) first licence condition and opened its 3G network in Karlskrona ahead of 1 January 2002. (Press Release 2001-12-20). Significant events after the quarter end Regulatory The Swedish National Post and Telecom Agency (PTS) is investigating whether Europolitan Vodafone and Tele2 have significant market power on the mobile and/or interconnect markets. Europolitan Vodafone does not consider itself to have significant market power on either market and particularly not in the interconnect market. If an operator does have significant market power on the mobile market, it can be obliged by PTS to offer interconnect tariffs on equal market terms and conditions to all operators. If an operator has significant market power on the interconnect market, it can be obliged to offer cost-based interconnect tariffs. Significant market power on either the mobile or the interconnect market will only affect interconnect tariffs, as highlighted above. Quarterly Report Europolitan Vodafone's Final Report will be published on 30 April 2002. Stockholm, 25 January 2002 The Board of Directors - Europolitan Holdings AB (publ) For further information, please contact: Jon Risfelt, President and CEO, +46 708 33 10 01 Mark Carey, CFO, +46 708 33 18 03 Monica Enderstein, Investor Relations Manager, +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 www.europolitan.se 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 for the financial year ended 31 March 2001. Europolitan Holdings AB is the holding company of the mobile operator Europolitan AB, which trades as 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. Vodafone Group Plc is represented on 5 continents and has over 100 million customers (proportionate customers). For more information, please visit www.europolitan.se and www.vodafone.com. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/01/25/20020125BIT00040/bit0001.doc Full report http://www.waymaker.net/bitonline/2002/01/25/20020125BIT00040/bit0001.pdf Full Report