Bulletin
Netia updates guidance for 2008 and its medium-term outlook for 2009-2012 (58/2008)
The Management Board of Netia S.A. (the “Company” or “Netia”) today announces updates to its guidance for 2008 and its medium-term outlook for 2009-2012 following completion of its transformational acquisition of Tele2 Polska Sp. z o.o. (“Tele2”).
Having completed the acquisition of Tele2 on 15 September 2008, the New Netia Group has commenced a comprehensive integration project that is expected to deliver extensive operational synergies and has updated the financial plans for the New Netia Group. Consequently, Netia is increasing its 2008 guidance as follows:
| 2008 Guidance | Previous | Updated |
| Number of broadband service clients | > 400,000 | > 400,000 |
| Number of voice service clients (own network and WLR) | > 580,000 | > 1,080,000 |
| Unbundled local loop (LLU) nodes | 125 | 125 |
| Revenues (PLN m) | 960 – 975 | 1,100 |
| EBITDA (PLN m) | 125 | 145 |
| Investment outlays (excl. M&A) (PLN m) | 240 | 240 |
| M&A investment in Ethernet networks (PLN m) | 60 | 30 |
Netia confirms its earlier estimates of at least PLN 30 million of annual synergies to be achieved from a merger with Tele2 and continues to expect almost all synergies to be delivered within the first 12 months of the acquisition date.
Management’s current outlook for 2009 is summarized in the table below.
| 2009 Guidance | |
| Revenues (PLN m) | 1,500 |
| EBITDA (PLN m) | 225 |
| Investment outlays (excl. M&A) (PLN m) | 280 |
| M&A investment in Ethernet networks (PLN m) | 75 |
Netia’s substantially improved market share position following the Tele2 acquisition enables Management to rebalance their broadband driven growth strategy to increase the focus on accelerating improvements in profitability.
As a result, the medium term outlook is being updated as follows:
| Medium term outlook | Previous | Updated |
| Revenue growth (CAGR) | 15% - 20% | 5% - 10% |
| EBITDA margings at 20% at 25% |
|
|
| Net profit by | 2011 | 2010 |
| Free cash flow positive by | 2011 | 2010 |
| Capex to sales down to 15% by | --- | 2011 |
| 1 million broadband subscribers | 2010 | 2012 |
Netia also announces that it will continue to monitor the possibilities of achieving the forecast results on a quarterly basis. The achievement of the forecast results will be assessed, and any necessary adjustments introduced, after the end of a given quarter of the financial year based on an analysis of sales revenues, investment expenditure, numbers of customers and any other factors it may consider relevant.
Disclaimer:
None of the information contained in this press release is a recommendation to purchase or sell financial instruments within the meaning of the Regulation of the Minister of Finance on information constituting recommendations regarding financial instruments or their issuers, dated 19 October 2005 (Polish Journal of Laws (Dz. U.) of 2005, No. 206, item 1715). For a more detailed description of the risks involved in investing in Netia’s securities, please see Netia’s 2007 annual financial report. Subject to the obligations referred to herein, Netia is not required to publicly update or revise any of its forecasts and assumptions of the strategic objectives.
Conference call on the Netia/Tele2 Polska merger update
Netia senior management will host a conference call at 10:00 am (CET) / 9:00 am (BST) / 4:00 am (Eastern) on Tuesday, 10 October 2008 to update followers on the progress of creating a new, stronger Netia one month after the completion of the Tele2 Polska acquisition. The conference call may be accessed by dialing (UK) +44 20 8515 2302 / US +1 480 629 1990. A telephone replay will be available shortly after the call at (UK) +44 207 154 2833 / US +1 303 590 3030, passcode 3929343#. A replay of the conference call will be available on Netia’s website at www.investor.netia.pl.
In addition, a presentation on the above is available on Netia’s website at www.investor.netia.pl.