EE results

Today EE releases its results for the year ended 31 December 2012.

Initial signs are positive for EE. Full Year service revenue, excluding regulation, is up 2.7% yoy. Adjusted EBITDA margin improvement has been delivered, with H2 2012 margin at 22%. 83% of £445m annual cost saving target by 2014 already achieved.

Olaf Swantee, Chief Executive Officer of EE, commented: “In the past year, we delivered solid financial performance, underpinned by good progress integrating the business and success in attracting high value customers. At the same time, we built a strong platform for growth, launching a new company, new network, new customer brand, new retail estate and being the first to provide UK consumers and businesses with 4G mobile services alongside fibre broadband.”

On the future the report stated “We continue to pursue our growth strategy of increasing smartphone penetration and growing data revenues. The percent of postpaid customers using smartphones rose 9 ppts during the year to 78%. Non-voice revenues (data and messaging) rose rapidly, reaching 50% in Q4, against 43% in Q4 2011, with non-messaging data revenue up to 34% against 24% in Q4 2011.

We are seeing solid early 4G momentum migrating Orange and T-Mobile customers to higher value EE 4G price plans in areas where 4G coverage is available. Early Orange and T-Mobile customers migrating to 4G on EE are showing increases of approximately 10% in ARPU, demonstrating data monetisation.

For our EE customers using 4G, we introduced new data services such as EE Film and Clone Phone, a cloud-based data backup service. We saw 4G customers increase their online shopping and mobile banking, streaming video and video calling, and using Satellite Navigation.

We are also seeing early 4G momentum with business customers from diverse industry sectors and of all sizes. More than 10% of our corporate customers are trialling or using 4G including Gatwick Airport, Kier, Microsoft, Morrisons, Saatchi & Saatchi Fallon Group, Sony Music and TNT Post. One in four new SME customers are now selecting 4G services.

We continued to rollout 4G rapidly in the UK, announcing plans to cover 65 towns and cities and 55% of the population by June 2013. Our ability to offer this service is increasing our competitive differentiation and creates the opportunity to further enhance the value of our customer base.

In our emerging growth segments, our fixed broadband business achieved double digit yoy growth in revenues, and we saw a nearly 40% yoy increase in our machine-to-machine base to nearly 1.4m.”

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