¤ First-half performance (1):

• Customer base grew 17% to 25.7 million (2004: 22.0 million)
• Group turnover grew 12% to £3,615 million (2004: £3,227 million)
• EBITDA grew 15% to £975 million (2004: £850 million)
• Group operating profit(2) increased to £463 million (2004: £400 million)

¤ Basic earnings per share increased to 4.0 pence (2004: 3.9 pence)
¤ Underlying earnings per share(2) increased to 5.4 pence (2004: 4.5 pence)
¤ Group net cash balance £141 million (2004: net debt £237 million)
¤ Interim dividend 1.54 pence

(1) Comparative period is 6 months ended 30 September 2004.

(2) Before UMTS licence amortisation and exceptional items.

Sir David Arculus, Chairman of O2 plc, commented:
“The first half saw another good performance across the group, with strong growth in revenue, EBITDA and operating profit(1). Over the last year group cash flow has strengthened, and underlying earnings have increased by 21%.  The Board is pleased to confirm that we will pay an interim dividend of 1.54 pence on 2 December.”

Financial highlights

Peter Erskine, Chief Executive of O2 plc, commented:
“Despite intense competition in all our markets, in the first half the group delivered 17% growth in the customer base, 12% growth in revenues, 15% growth in EBITDA and 16% growth in operating profit before UMTS licence amortisation and exceptional items.

All our mobile businesses delivered strong, high quality customer growth in the first half. In the UK, our customer plan was successful in both retaining existing customers and acquiring new customers. The recent launch of i-mode, along with the opening of our new call centre in Glasgow, will help us continue to differentiate our brand and service.

In Germany, we are seeing continued strong growth in a competitive market.  We added almost 1 million customers in the first half, 41% ahead of last year, driven by our strong brand, new propositions and tariffs, and our Tchibo Mobile joint venture.

O2 Airwave is now a valuable cash generator for the group, and in the first half secured the contract for the English Ambulance Trusts.  More recently, O2 Airwave has won the National Fallback Service (NFS) contract, and has also just been selected as the preferred bidder for the nationwide Fire and Rescue Service contract.  O2 Airwave continues to bid for additional contracts with new and existing customers.”

Performance highlights – First Half (1)

O2 UK
• Total customer base grew by 8.9% to 15.09 million
• Service revenue grew by 3.5% to £1,848 million
• EBITDA grew by 2.9% to £598 million
• EBITDA margin 28.5% (2004: 29.4%)

O2 Germany
• Total customer base grew by 34% to 8.95 million
• At constant exchange rates, service revenue grew by 23%
• EBITDA grew by 51% to £246 million
• EBITDA margin increased to 22.8% (2004: 18.6%)

O2 Ireland
• Total customer base grew by 10.2% to 1.57 million
• At constant exchange rates, service revenue grew by 12.5%
• EBITDA grew by 14.2% to £121 million
• EBITDA margin 37.5% (2004: 37.9%)

O2 Airwave
• Revenue grew to £103 million (2004 : £76 million)
• EBITDA grew to £40 million (2004 : £24 million)

 (1) Comparative period: 6 months ended 30 September 2004.

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