Press release

Interim results - download PDF

• Good first-half performance delivered across the Group(1):
  - Customer base grew 13% to 19.2 million (2002 : 17.0 million);
  - Total revenue grew 21% to £2,680 million (2002 : £2,214 million);
  - EBITDA before exceptionals grew to £621 million (2002 : £387 million);
  - Operating profit(2) grew to £167 million (2002 : £8 million);
• Group reported its first pre-tax profit, of £26 million (2002 : £(259) million).
• Group net debt was reduced by £55 million, to £494 million.

(1) Continuing operations. Comparative period is 6 months to 30 September 2002. (2) Before goodwill and exceptional items.

Peter Erskine, Chief Executive of mmO2 plc, commented:
"In the first half, mmO2 delivered further revenue and profit growth, across all our businesses. Our 15% service revenue growth in the UK and 15% EBITDA margin in Germany were the highlights of a good all-round operational performance, which reflected the success of O2's compelling, brand-driven, customer propositions.

"We are pleased to report our first pre-tax profit, almost exactly two years after the demerger, and to again deliver positive cash-flow and a reduction in our net debt. This reflects the single-minded focus on profitable growth, operational improvement, and financial discipline that we committed to at the time of the demerger.

"In the second half we expect intense competition in our two main markets, but we are aiming to build on what we achieved in the first half, and deliver our full-year growth and margin targets. Initiatives such as Airwave, the Tesco Mobile joint-venture, the new pan-European mobile alliance, and the restructuring of our central functions, will help us to maintain our operational and financial momentum across the Group"

(3) Continuing operations.

PERFORMANCE HIGHLIGHTS - FIRST HALF
(Comparative period: 6 months to 30 Sept. 2002)

O2 UK:

• Total customer base grew by 10% to 12.6 million
• Service revenue grew by 15% to £1,534 million
• EBITDA before exceptionals grew by 23% to £482 million
• EBITDA margin increased to 29.2% (2002 : 26.6%)
• Capital expenditure increased to £217 million (2002 : £148 million)

O2 Germany:

• Total customer base grew by 22% to 5.25 million, of which 57% post-pay
• At constant exchange rates, service revenue grew by 33%
• EBITDA before exceptionals increased to £109 million (2002 : £1 million)
• EBITDA margin improved to 15.1% (2002 : 0%)
• Capital expenditure increased to £132 million (2002 : £57 million)

O2 Ireland:

• At constant exchange rates, service revenue grew by 10%
• EBITDA before exceptionals increased to £103 million (2002 : £72 million)
• EBITDA margin improved to 39.6% (2002 : 33.5%)

Airwave:

• Roll-out on track, with service delivered to more than 50% of UK's police forces
• Capital expenditure increased to £158 million (2002 : £69 million)
• Revenue more than doubled to £25 million

OPERATIONAL HIGHLIGHTS - SECOND QUARTER

Group:

• Customer base grew by 3% quarter-on-quarter, to 19.2 million
• 535,000 net new customers added (Q1 : 504,000), of which 63% post-pay

O2 UK:

• 315,000 net new customers added (Q1 : 258,000), of which 147,000 post-pay
• Blended ARPU was £259, 4.9% higher than at the start of the year
• Contract churn reduced to 26% (Q1 : 27%)

O2 Germany:

• 214,000 net new customers added (Q1 : 225,000), of which 186,000 post-pay
• Blended ARPU was €354, 4.1% higher than at the start of the year

O2 Ireland:

• Customer base stable at 1.27 million
• Blended ARPU was €551 (Q1 : €545)

Mobile data:

• Data as a proportion of service revenue 19.2% (Q1 : 18.1%)
• Total SMS sent grew by 6.4% in the quarter to 2.577 billion
• Total number of GPRS revenue generating connections increased to 1.16 million

Interim results - download PDF

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