2007 6 months results

RESULTS FOR THE FIRST SIX MONTHS OF 2007 : RESULTS FOR THE FIRST SIX MONTHS OF 2007 TEO LT, AB


HIGHLIGHTS – SIX MONTHS OF 2007 : HIGHLIGHTS – SIX MONTHS OF 2007 Number of telephone lines and broadband internet connections continued to grow Number IP TV users exceeded 11 thousand Started provision of new IT services Number of IT services users reached 276 Introduces charges for wireless internet service Revenue and net profit continued to grow LTL 202 million dividends paid to the shareholders Elected a new Board Sold OOO Comliet-Kaliningrad


Slide3 : TEO GROUP TEO LT, AB (voice, internet, wholesales, data communication, digital TV services; Internet portal Zebra) UAB Lintel (directory inquiry 118, contact center services, treasury stocks) UAB Baltic Data Center (IT infrastructure services) UAB Voicecom (NMT-450 network) UAB Kompetencijos Ugdymo Centras (training and consultancy) 100% 100% 100% 100% In February 2007 a 100% stake in OOO Comliet-Kaliningrad (Russian Federation) was sold by TEO From 1 June 2007 fitness club ZEBRA SPORT operated by TEO Sportas is closed UAB Baltic Data Center has a subsidiary in Latvia Baltic Data Center SIA VšĮ TEO Sportas (women’s basketball team TEO) 100%


VOICE TELEPHONY SERVICES : VOICE TELEPHONY SERVICES Net telephone lines increase during January-June 2007: 2.8 thousand 28.2 thousand new lines installed and 25.4 thousand disconnected Total traffic (y-o-y): -3.8% Number of flat rate payment plans: 611 thousand Number of alternative operators customers: 55 thousand (end of March 2007)


INTERNET SERVICES : INTERNET SERVICES 32 thousand new broadband connections during January-June 2007: Out of total 212.6 thousand connections: - 204 thousand retail DSL, - 3.8 thousand LAN connections - 2.5 thousand via WiFi - 2.3 thousand wholesales DSL 1,538 ZEBRA VoIP users 1,750 WiFi hot-spots WiFi roaming services from July


OTHER SERVICES : OTHER SERVICES New IT service for business customers: - rent and sale of computers - online backup service Number IT services users: 276 Virtual cinema theatre and games on TV added to IP TV service Number of IP TV users: 11,382 Signed agreement with TV programs re-broadcaster that uses TEO DVB-T network


TELECOMMUNICATIONS MARKET IN LITHUANIA (Q1 2007) : TELECOMMUNICATIONS MARKET IN LITHUANIA (Q1 2007) Total revenue: LTL 698 million (Q1 2006: LTL 626 million) Growth: 11.4 % (y-o-y) Penetration per 100 residents: fixed voice: 23.6 mobile voice: 139.9 internet: 13.9 broadband: 12.1 Investments: LTL 116 million Source: Report of Communications Regulatory Authority


TEO COMPETES IN ALL AREAS EXCEPT MOBILE VOICE : TEO COMPETES IN ALL AREAS EXCEPT MOBILE VOICE CATV market is very fragmented: 51 players, market revenue LTL 17.6 million, only 2 operators with market share above 10%. TV program transmission is dominated by one player. Market revenue LTL 4.6 million. Source: Report of Communications Regulatory Authority


FIXED VOICE TELEPHONY MARKET IN LITHUANIA (Q1 2007) : FIXED VOICE TELEPHONY MARKET IN LITHUANIA (Q1 2007) Total revenue: LTL 105 million (Q1 2006: LTL 108 million) 53 companies are providing fixed voice services: 27 provide national and international calls, 19 only international, 6 only wholesales (transit) and one only call center services 27 companies are using IP network, 13 of them CATV networks Total fixed voice traffic (y-o-y): -3.0% TEO market share in terms of: - total number of customers: 93.5% - total traffic: 96.9% - revenue from local calls: 99.4% - revenue from domestic long distance calls: 91.4% - revenue from international calls: 78.1% Source: Report of Communications Regulatory Authority


INTERNET ACCESS MARKET IN LITHUANIA (Q1 2007) : INTERNET ACCESS MARKET IN LITHUANIA (Q1 2007) Total revenue: LTL 70 million (Q1 2006 LTL 64 million) TEO share of broadband internet market in terms of revenue – 46.8% 113 internet service providers 459 thousand internet users: - DSL: 198 thousand - via CATV networks: 70 thousand - wireless access: 29 thousand - LAN: 52 thousand - via mobile network: 41 thousand - fiber optics (FTTH): 60 thousand - dial-up: 9 thousand Source: Report of Communications Regulatory Authority


MAJOR FINANCIAL INDICATORS : MAJOR FINANCIAL INDICATORS H1 2007 vs H1 2006: - revenue: +4.6% - expenses: +16.9% - EBITDA: -7.1% - EBITDA margin: 45.5% (51.2%) - EBIT: +8.9% - net profit: +18.4% - net profit margin: 20.3% (18.0%) - investments: LTL 81 million Revenue, EBITDA and Net Profit (LTL million)


REVENUE : REVENUE Revenue from TV services: LTL 1.4 million in H1 2007.


EMPLOYEES : EMPLOYEES


BALANCE SHEET AND CASH FLOW(H1 2007) : BALANCE SHEET AND CASH FLOW (H1 2007) Total assets: LTL 1,097 million Cash and short term financial investments: LTL 317 million Paid dividends: LTL 202 million Borrowings: LTL 8 million Net debt: LTL – 309 million Gearing ratio: – 31.4% Equity to assets ratio: 89.8% ROA: 14.0% ROE: 13.4% TeliaSonera repaid LTL 150 million loan


DIVIDEND PAYOUT : DIVIDEND PAYOUT Following the Lithuanian Law on Company dividends should be paid from the Parent company’s retained earnings TEO LT, AB retained earnings 2006: LTL 211 million Consolidated TEO Group retained earnings 2006 : LTL 333 million The Annual Meeting of Shareholders held on 26 April 2007 decided to pay from distributable profit LTL 202 million of dividends for the year 2006 Dividends were paid in May


SHAREHOLDERS OF TEO : SHAREHOLDERS OF TEO Amber Teleholding A/S is a subsidiary of TeliaSonera AB, Sweden. During H1 2007 State of Lithuania reduced its stake from 1.66% to 1.58%. The last (eight) stage of State of Lithuania giving TEO shares to the citizens of Lithuania as a compensation for realty redeemable by (realty seized during the Soviet times) started in February 2007 UAB Lintel, a member of TEO Group, holds the treasury stocks. Total number of shareholders: 13 thousand


Slide17 : TEO Market Capitalisation at the end of period (LTL million) TEO MARKET CAPITALISATION Shares listed on Vilnius Stock Exchange (VSE ticker: TEO1L) 9.34% of shares are represented by GDRs (1 GDR = 10 shares) GDRs are listed on London Stock Exchange (LSE ticker: TEOL). Share price on VSE (in LTL) - start of H1 2007: 2.77 - H1 2007 low: 2.28 - H1 2007 high: 3.04 - end of H1 2007: 2.34 Turnover on VSE in H1 2007: 115.9 million shares or LTL 308.4 million


Slide18 : Jörgen Latte, TeliaSonera AB Anders Gylder, TeliaSonera AB Matti Hyyrynen, EBRD, Head of Vilnius and Riga office Ove Alm, TeliaSonera AB Gert Tiivas, East Capital Asset Management AB Joakim Sundström, TeliaSonera AB Björn Lindegren, TeliaSonera AB NEW BOARD OF TEO


Slide19 : THANK YOU FOR YOUR ATTENTION WWW.TEO.LT