Restated Quarterly Report January - September 1999

FOR IMMEDIATE RELEASE Wednesday, November 17, 1999 NETCOM AB SUPPLEMENTS PREVIOUSLY RELEASED RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 1999 TO INCLUDE RESULTS FROM ASSOCIATE, NETCOM ASA RESTATED QUARTERLY REPORT JANUARY - SEPTEMBER 1999 New York and Stockholm - November 17, 1999 - NetCom AB ("NetCom", "the Group") (Nasdaq Stock Market: NECS), a leading provider of telecommunication services in the Nordic countries, the Baltic region and Poland, today restated its consolidated results for the quarter ended September 30, 1999 to incorporate the results of its associate company NetCom ASA for the same period. NetCom ASA published its third quarter results on November 15, 1999. NetCom AB is restating its third quarter report released on October 27, 1999 as at that time NetCom ASA in which NetCom AB has a 25% proportional interest had not published its results. It was therefore necessary for accounting purposes to derive a notional contribution from NetCom ASA for the three months ended September 30, 1999 by assuming the same result as for three months ended June 30, 1999. Restated Financial Summary for the Nine Months ended September 30, 1999 (in MSEK) 1999 1998 % Change Operating Revenue 5,825 4,305 +35 Operating Profit Before depreciation and amortization (i) 1,547 1,001 +55 after depreciation and amortization (ii) 851 491 +73 Profit after financial items 715 289 +147 Profit after taxes 410 133 +208 Earnings per share (SEK) (iii) 3.94 1.28 +208 (i) EBITDA (ii) EBIT (iii) Earnings per share figures are after tax and full conversion. (iv) The impact on NetCom's consolidated accounts of incorporating NetCom ASA's financial results for the nine months ended September 30, 1999 was a MSEK 9 increase in the share of profits from associated companies for a total of MSEK 50 and an increase in net profit contributed by associated companies of MSEK 7. The share of profits from associated companies increased by 32% sequentially from MSEK 19 in the second quarter of 1999 to MSEK 25 in the third quarter of 1999. NETCOM ASA Total subscribers for the nine months ended September 30, 1999 totaled 700,326 an increase of 7% over the 657,376 subscribers reported three months earlier. At the end of September 1999, NetCom ASA reported 317,316 prepaid customers, an increase of 14% over the 278,542 prepaid customers reported in the second quarter. Subscriber growth was driven by the success of NetCom ASA's prepaid offering and by initiatives to strengthen its share of the strategic business segment during the period through new contracts with large business customers to provide mobile and fixed line services. NetCom ASA currently has approximately one third of Norway's mobile phone market. NetCom ASA has also strengthened its distribution network through a major contract with Posten (Norwegian Post Offices) to sell prepaid cards which has increased the distribution network to more than 3,600 outlets. The average revenue per customer per month (ARPU), excluding prepaid subscribers, was NOK 486 in the third quarter of 1999, compared with NOK 443 for the second quarter of 1999. This 10% growth was driven by increased call volumes and an increase in usage of value added services, such as SMS traffic. The average minutes of use per customer per month, inclusive of prepaid subscribers, in the third quarter of 1999 totaled 146 compared with 151 in the same period in 1998. NetCom AB, formed in 1993, is a leading telecommunications company in the Nordic countries, the Baltic region and Poland. It has GSM cellular operations in Sweden (Comviq and Tele2Mobil), in Norway through NetCom ASA and in Estonia through Ritabell (Q GSM). In the areas of public telecommunications, data communication services and Internet, NetCom operates Tele2 in Sweden, Tele2 A/S in Denmark and Tele2 Norge AS in Norway. NetCom also operates NätTeknik and Datametrix, specializing in systems integration, 4T Solutions and Optimal Telecom in addition to Kabelvision, a Swedish cable TV services company. NetCom is listed both on the Stockholm Stock Exchange under the symbols NCOMA and NCOMB and on the Nasdaq Stock Market under the symbol NECS. Contacts: Lars-Johan Jarnheimer Telephone: + 46 8 562 640 00 President and CEO, NetCom AB, Sweden Jörgen Latte Telephone: + 46 8 562 640 00 CFO, NetCom AB, Sweden Visit us at our homepage: http://www.netcom.se APPENDICES CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 CONSOLIDATED BALANCE SHEET FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 FIVE YEAR SUMMARY CONSOLIDATED INCOME STATEMENT (MSEK) 1999 1998 1998 Jan 1 - Sep 30 Jan 1 - Sep 30 Full Year Operating revenue 5,825 4,305 5,969 Operating expenses -5,140 -3,893 -5,564 Option to Management 12 -37 -67 Other revenues 155 125 190 Other expenses -1 -9 -10 Operating Profit 851 491 518 Share of profit (loss) from 50 1 -10 associated companies Net interest and other financial -186 -203 -276 expenses Profit after financial items 715 289 232 Taxes -306 -156 -165 Minority Interests 1 - - Profit after taxes 410 133 67 Earnings per share after tax 3.94 kr 1.29 kr 0.64 kr Earnings per share after tax and after full conversion Tele2 Norway -0.91 kr -1.09 kr -1.24 kr Tele2 Denmark -1.16 kr -1.09 kr -1.69 kr Associated companies 0.19 kr -0.05 kr -0.14 kr Tele2 Sweden and other operations 5.82 kr 3.51 kr 3.71 kr Total 3.94 kr 1.28 kr 0.64 kr CONSOLIDATED BALANCE SHEET (MSEK) 1999 1998 1998 Sep 30 Sep 30 Dec 31 ASSETS Fixed assets Intangible assets* 2,350 1,698 1,687 Tangible assets 6,165 5,305 5,604 Long-term financial assets* 213 419 786 8,728 7,422 8,077 Current assets Materials and supplies 17 24 31 Current receivables 2,214 1,305 1,648 Cash and cash equivalents 303 113 433 2,534 1,442 2,112 Total assets 11,262 8,864 10,189 EQUITY AND LIABILITIES Shareholders' Equity Restricted equity 3,944 4,233 4,221 Non-restricted equity -318 -912 -952 3,626 3,321 3,269 Minority interest - 2 2 Provisions Deferred tax liabilities 29 - - Options issued 90 72 102 Provisions 119 72 102 Long-term liabilities Interest-bearing liabilities 5,354 3,967 4,801 Non interest-bearing 1 - 1 liabilities 5,355 3,967 4,802 Short-term liabilities Interest-bearing liabilities 98 - 239 Non interest-bearing 2,064 1,502 1,775 liabilities 2,162 1,502 2,014 Total equity and liabilities 11,262 8,864 10,189 * The figures for long-term financial assets include deferred tax relating to subsidiaries for the periods ended September 30, 1998 and December 31, 1998 of MSEK 245 and MSEK 232 respectively. From February 1, 1999, Ritabell was accounted for as a subsidiary and the goodwill of MSEK 390 arising from its purchase in 1998 is reclassified from financial fixed assets (shares in associated companies) to intangible assets (goodwill). FIVE YEAR SUMMARY 1999 1998 1998 1997 1996 1995* 9 months 9 months Income Statement and Balance Sheet (MSEK) Operating revenue 5,825 4,305 5,969 4,036 2,872 1,953 Operating profit before 1,547 1,001 1,223 1,000 651 -431 depreciation Operating profit after 851 491 518 392 254 -728 depreciation Profit/loss after 715 289 232 -37 29 -1,456 financial items Shareholders' equity 3,626 3,321 3,269 3,156 2,276 -910 Shareholders' equity, 3,626 3,321 3,269 3,193 2,923 -910 after full conversion Total assets 11,262 8,864 10,189 8,684 7,527 4,831 Cash flow provided by 1,032 925 990 411 610 -759 operating activities Liquidity 751 1,293 821 1,499 819 189 Net borrowing 5,148 3,854 4,600 3,579 3,894 4,555 Net borrowing, after full 5,148 3,854 4,600 3,542 3,247 4,555 conversion Investments including 1,445 1,212 1,959 1,117 1,016 1,006 financial lease** Key ratio (%) Solidity 32% 38% 32% 36% 30% -19% Solidity, after full 32% 38% 32% 37% 39% -19% conversion Return on shareholders' 11.9% 4.1% 2.1% 3.2% -10% N/A*** equity Return on shareholders' 11.9% 4.1% 2.1% 3.2% -3.3% N/A*** equity, after full conversion Return on capital employed 10.6% 6.9% 6.7% 4.8% 1.3% -24.5% Average interest rate 4.8% 6.7% 6.6% 7.1% 8.9% 11.5% Average interest rate, 4.8% 6.7% 6.6% 7.1% 8.6% 11.5% after full conversion Value per share**** (SEK) Profit/loss 3.94 1.29 0.64 0.50 2.80 -44,107.40 Profit/loss, after full 3.94 1.28 0.64 0.57 2.78 -44,107.40 conversion -of which Tele2 Norway -0.91 -1.09 -1.24 -0.46 -0.12 -28.15 -of which Tele2 Denmark -1.16 -1.09 -1.69 -0.79 -0.16 - -of which associated 0.19 -0.05 -0.14 -0.85 2.52 -20,005.20 companies -of which Tele2 Sweden 5.82 3.51 3.71 2.67 0.54 -24,074.05 and other operations Shareholders' equity 34.92 32.08 31.55 32.18 25.78 -45,520.00 Shareholders' equity, 34.92 31.97 31.48 30.86 28.70 -45,520.00 after full conversion Cash flow 9.94 8.93 9.56 4.19 6.91 -37,965.70 Cash flow, after full 9.94 8.90 9.53 3.97 5.99 -37,965.70 conversion Dividend 0.00 0.00 0.00 0.00 0.00 0.00 Market value at closing 304.00 263.00 330.00 170.50 110.50 N/A* day P/E-ratio 57.93 153.07 512.92 344.43 39.40 N/A* P/E-ratio, after full 57.93 153.57 514.17 298.12 39.81 N/A* conversion * The NetCom group was, until market flotation in 1996, a wholly owned subsidiary of Industriförvaltnings AB Kinnevik. ** Finance leases are included from January 1, 1997. *** Not applicable because of negative shareholders' equity **** The weighted number of A and B shares outstanding at September 30, 1999, was 103,850,246. For definitions please see the 1998 Annual Report. Cash flow per share is based on cash flow from operating activities before investing and financing activities. Dividend per share refers to the decided or suggested dividend for each year. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/11/17/19991117BIT00050/bit0001.doc http://www.bit.se/bitonline/1999/11/17/19991117BIT00050/bit0002.pdf