q4/annual results 2003

abc

Press ConferenceFebruary 19th 2004Oslo Børs 1

Q4/Annual Results 2003

abc


Q4/Annual Results 2003

Olav StokkeCEO

3 Press ConferenceFebruary 19th 2004Oslo Børs

Highlights Q4 2003 / FY 2003

• Strong growth compared to 2002– 102 % organic growth in revenue– 81 % growth in lines in operation– Strong improvements in gross margin,

54.1 % in Q4 2003.– Strong improvement in EBITDA, 18.1 %

EBITDA ratio in Q4 2003.

• Financially strengthened as part of the IPO-process 19th December

• The Company continues its progress towards positive EBIT.

• Strong player in the Norwegian broadband market, both for residential and corporate customers.– Sustained #2 market position (broadband no. of

lines)


Results 2003 (mNOK)

Q4-03 Q4-02 2003 2002

Revenue 89.4 51.4 297.5 147.5

Growth (YoY) 74% 102%

Gross Margin 54.1% 48.6% 52.4% 47.9%

EBITDA 16.1 1.7 50.4 -29.1

EBIT -8.9 -11.9 -40.8 -76.6

EBT -18.6 -18.7 -76.1 -97.6

ARPU(subscription only)

405 445 418 447

Customers(New/Total)

8,300 (N)

9,100(N)

63,300(T)

35,000(T)

Market share vs. Telenor

26.3% 27.1%


Balance Sheet significantly strengthened• Moderate growth in fixed assets• Current assets increased

– Financially strengthened due to IPO– Free cash at year end was mNOK 80.– Continuous improvements in DSO (22 days at year-end)

• Long term debt reduced as instalments exceeds new loans.• Net growth in current liabilities due to growth in accruals of

income– Significant reduction in trade payables.

• Equity ratio of 36 %.

Balance sheetAll figures in NOK 1.000 2003 2002

ASSETS

Total fixed assets 436 023 397 638Total current assets 140 973 46 301

Total assets 576 996 443 939

EQUITY AND LIABILITIESTotal equity 207 410 87 612Total non-current liabilities 220 543 234 801Total current liabilities 149 043 121 526

Total equity and liabilities 576 996 443 939


Financing / covenants per February 2004

• NextGenTel has financial covenants related to the balance sheet and performance. The financial covenants are:– Interest bearing debt less free cash divided on 2004 EBITDA less

than 3 (measured at 31.12 2004)– Minimum equity ratio of 27.5% (CSFI 25%) to be measured at

June 30th and Dec. 31st

– Minimum cash balance of mNOK 17 (CSFI only) – Covenants to be measured at Group level

• In NextGenTel’s view the current covenants will not limit the company’s business opportunities/options.

• Current available unused loan/lease frames for long term financing is mNOK 115. In addition there is an available free cash position and a credit line of approximately mNOK 100.


Trade receivables, customer payments and DSO

• Effective management of debtors– High degree of

automation

• Trade receivables growing slower than the increase in revenue– improving cash flow

from operations

• Recurring Business– customer payments

increasing month by month

• Marginal losses on receivables

Monthly payments from customers - status pr December 31st 2003

-

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

30 000 000

35 000 000

40 000 000

Jan

uar

y 20

03

Feb

ruar

y20

03

Mar

ch 2

003

Ap

ril 2

003

May

200

3

Jun

e 20

03

July

200

3

Au

gu

st 2

003

Sep

tem

ber

2003

Oct

ob

er20

03

No

vem

ber

2003

Dec

emb

er20

03

NO

K

0

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10000

15000

20000

25000

30000

35000

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45000

50000

# o

f p

aym

ents

rec

eive

d

NOK # payments

Days of Sales Outstanding (DSO) and Trade Receivables

0

10

20

30

40

50

60

70

2002

.01

2002

.06

2002

.11

2002

.16

2002

.21

2002

.26

2002

.31

2002

.36

2002

.41

2002

.46

2002

.51

2003

.04

2003

.09

2003

.14

2003

.19

2003

.24

2003

.29

2003

.34

2003

.39

2003

.44

2003

.49

050001000015000200002500030000350004000045000Receivables DSO


Cash-flow / Investments 2003

• Investments reduced compared to 2002– mNOK 100,8 invested in 2003 vs. mNOK 238,2 in 2002.

• Long term loans reduced in 2003. – Instalments on loans mNOK 93,6 in 2003– New loans in 2003 of MNOK 79,3 compared to new loans in 2002 of mNOK 204,9.

• Simplified cash flow: (Cash Flow = EBITDA – CapEx)– mNOK -50,4 for 2003 – mNOK –11,9 for Q4-2003.

Cash flow statementAll figures in NOK 1.000 Q4 2003 Q4 2002 2003 2002

Ordinary profit before tax (18 615) (18 731) (76 105) (97 647)

Ordinary depreciation and amortizations 25 090 13 614 91 207 47 460 Changes in receivables (6 900) (3 630) (18 778) (14 831) Changes in short term debt (35 514) 27 180 (40 043) 61 569 **Other changes to cash flow 11 374 (12 276) 52 345 4 194 Net cash flow from operating activities (24 565) 6 157 8 626 745

Net cash flow from investing activities (28 009) (85 614) (100 834) (238 152)

Net cash flow from financial activities 130 622 72 677 169 353 235 305

Netto kontantstrøm / Net cash flow 78 048 (6 780) 77 145 (2 102)

Cash at position at end of period 80 152 3 007 80 152 3 007


Scalability development

Monthly ARPU vs. Cost elements per subscriber

(50)

150

350

550

750

950

1 150

1 350

1 550

1 750

Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003

NO

K p

er

su

bs

cri

be

r p

r. m

on

tn

Net financial items

Depreciation andamortisation

Other operatingexpenses

Salaries andpersonnel expenses

Copper, Fibre,Access, LEO etc

TAC ( 12 monthaverage SALE)

TAC ( 12 monthaverage INST)

ARPU Real


Market growth/share vs. Telenor

• Seasonal market development

• Steady market share vs. Telenor 26-27%

• Overall broadband (all technologies) market share of 18 % (July 2003, according to NPT)

• xDSL is the fastest growing broadband technology

NextGenTel lines in operation

0

10000

20000

30000

40000

50000

60000

70000

# of lines

Market share Telenor vs NextGenTel

0 %

20 %

40 %

60 %

80 %

100 %

Q1

2001

Q2

2001

Q3

2001

Q4

2001

Q1

2002

Q2

2002

Q3

2002

Q4

2002

Q1

2003

Q2

2003

Q3

2003

Q4

2003

NextGenTel

Telenor

Quarterly growth, lines in operation NextGenTel

0

2000

4000

6000

8000

10000

Q1 Q2 Q3 Q4

2001

2002

2003


2003 final comments• Well positioned in a

fast growing strong mass market

• Recurring revenue

• Stable ARPU

• Growing Margin– Economics of scale– Scalable business model

• Reduced depreciation per line due to reduced marginal investments

• High financial costs– to be reduced due to

strengthened balance sheet and reduced interest rates

Total Operating quarterly revenues 2001- 2003

-

10 000 000

20 000 000

30 000 000

40 000 000

50 000 000

60 000 000

70 000 000

80 000 000

90 000 000

100 000 000

Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03

Revenue, 12 months running avg. revenue

3 104 264

3 732 443

4 482 339

5 159 968

5 844 491

6 637 967

7 429 968

8 229 042

9 139 083

10 143 242

11 195 712

12 292 435

13 206 308

14 195 275

15 246 517

16 307 944

17 517 344

18 601 401

19 616 269

20 685 455

21 754 393

22 739 942

23 836 028

24 908 875

- 5 000000

10 000000

15 000000

20 000000

25 000000

30 000000

2002.01

2002.03

2002.05

2002.07

2002.09

2002.11

2003.01

2003.03

2003.05

2003.07

2003.09

2003.11

Total Gross Margin 2001- 2003

(10 000 000)

-

10 000 000

20 000 000

30 000 000

40 000 000

50 000 000

60 000 000

Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03

Total quarterly EBITDA 2001- 2003

(35 000 000)

(30 000 000)

(25 000 000)

(20 000 000)

(15 000 000)

(10 000 000)

(5 000 000)

-

5 000 000

10 000 000

15 000 000

20 000 000

Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03


Largest shareholders registered per February 16th 2004

• 20 largest shareholders hold 82.5 %• 2 largest shareholders hold 47.17 %• Currently 496 shareholders, reduced from 865 at December 19th

2003.

First name Shareholder Shares Ownership1 GEOCAPITAL (5 entities) 6 363 164 25,76 %2 NORTHZONE (3 entities) 5 287 237 21,41 %3 BOREA AS 1 941 254 7,86 %4 VITAL FORSIKRING ASA 1 273 042 5,15 %5 NORDEA LIV ASA 544 277 2,20 %6 TV 2 INVEST AS 533 161 2,16 %7 DELPHI NORGE 473 500 1,92 %8 FRITZ T RIEBER 405 960 1,64 %9 PRISM CAPITAL 5, LP 386 000 1,56 %

10 STOREBRAND LIVSFORSIKRING AS 352 000 1,43 %11 OLAV STOKKE 348 890 1,41 %12 LARS ERIK LARSSEN 327 904 1,33 %13 VIKERUD VENTURE AS 317 268 1,28 %14 ODD K. HØYDALSVIK 298 799 1,21 %15 BJØRN NILSEN 298 799 1,21 %16 MORTEN ÅGNES 298 799 1,21 %17 LGT CAPITAL INVEST LTD 264 630 1,07 %18 AKSJEFONDET NORDEA VEKST 253 795 1,03 %19 NGT MANAGEMENT INVEST AS 204 157 0,83 %20 NGT MANAGEMENT INVEST II AS 201 466 0,82 %

20 largest 20 374 102 82,49 %Total number of shares 24 700 000 100 %Total number of shareholders 496

abc


2004


2004 status

• 66,000 total subscriber lines per end January 2004– 2,700 net new subscriber lines in January

• Strengthened financial position– Additional/new financing frames

• Marginal investments per new subscriber line dropping significantly to a level below NOK 1,000 per line (previously disclosed approx. 1,600 per line in the Prospectus)

• More focus on wireless solutions in the residential market

• Reduced prices on the high bandwidth products creating more interest for bandwidth consuming content from e.g. NRK and TV2


Market assumptions and expectations

• Approx. 290,000 DSL subscriber lines per December 31st 2003 (assessed from Telenor figures)

• Approx. 140,000 new lines in 2003 (97% DSL growth)

• Gallup research (Dec. 2003 for NextGenTel) shows a potential of approx. 150,000 new lines next 6 months …

• NextGenTel assumes between 175,000 and 225,000 new lines (DSL) in total in 2004

0

100000

200000

300000

400000

500000

600000

1999 2000 2001 2002 2003(est.)

2004(est.)

WLL/WLAN

Fixed access

Cable

xDSL

Do you plan to install broadband the next six months?

0 10 20 30 40 50 60 70

Not decided

No

Yes

Already on

% Respondents


2004 Strategic Focus

• Steady continuous improvements towards profitability

– Maintain and increase scalability– Aim to reduce overall size of balance

during the year

• Further sustain the #2 market position• Grow the position in the SME segment

– VDSL– Efficient, scaleable and automated hosting services

• Continue focus on market leading and competitive high bandwidth solutions and content

• Launch commercial public telephony services (based on IP)

– Increase ARPU

• Improve Customer Services (modern CallCentre put in operation in January 2004)


Q & A session

q4/annual results 2003

Documents

loans mnok

stminimum cash balance

strong growth

market position broadband

revenueimproving cash

simplified cash flow

ipofree cash

current covenants