| Key figures | 2006 | 2005 | Variation |
| Total active customers (mobile telephony)1 | 3,139,224 | 2,912,806 | +7.8 % |
| Total turnover (Mio € ) | 1,546.8 | 1,451.1 | +6.6 % |
| Total service revenues (Mio € ) | 1,496.1 | 1,404.3 | +6.5 % |
| ARPU2 (€ /month) | 38.75 | 38.02 | +1.9 % |
| EBITDA (Mio € ) | 614.6 | 575.1 | +6.9 % |
| Consolidated net profit (Mio € ) | 299.5 | 270.3 | +10.8 % |
| Net profit per ordinary share (€ ) | 4.73 | 4.28 | +10.5 % |
| Net investments (Mio € ) | 165.2 | 198.6 | -16.8 % |
(1) The number of active customers does not include 'machine-to-machine' cards, nor MVNO cards. The customer base, including MVNO cards, amounts to 3,152,455 customers.
(2) Monthly Average Revenue per User (rolling average of the preceding 12 months).
Brussels, 7 February 2007 - Today, Mobistar (Euronext Brussels: MOBB) has published its results for the fiscal year 2006. Despite increased competition, Mobistar can present a strong commercial result. As at 31 December 2006, Mobistar had a total of 3,139,224 active customers(1) , which represents an increase of 226,418 versus the end of 2005, or a net growth of 7.8 %. This net growth is mainly the result of an increase in the number of postpaid customers, which has continued to grow as a proportion of the customer base to reach 51.4 %. This growth has enabled Mobistar to increase its monthly Average Revenue Per User by 1.9 % (ARPU(2) ) to 38.75 euros. As a result of the strong growth in the number of customers and the rise in the ARPU, consolidated turnover has increased by 6.6 % to 1,546.8 million euros. Cost saving initiatives and the optimisation of the organisation have enabled Mobistar to make a noticeable improvement in the EBITDA, which has reached 614.6 million euros, an increase of 6.9 %. Net profit has risen by 10.8 % to 299.5 million euros, or 4.73 euros per share. The Board will recommend a cash payment of 4.50 euros per share, consisting of an ordinary dividend of 2.70 euros and an extraordinary dividend of 1.80 euro.
A major commercial success due to a stronger focus on the customer, innovative products and sound partnerships
Mobistar began 2006 with the launch of a series of new products tailored to the needs of consumers. In a particularly competitive market, in which the penetration rate of mobile telephony has already reached 89 %, Mobistar has managed to attract 226,418 net new customers as a result of his innovative products.
The convincing success of products such as BestDeal and Tempo Music in the residential market, together with increased commercial dynamism in the business market, explain this strong growth in the customer base.
A significant number of new customers opted for BestDeal, a subscription of 5 euros which they can cancel at any time. BestDeal combines the freedom of a prepaid card with the price advantages and the convenience of a subscription. These are the two main reasons why many prepaid customers moved to a BestDeal subscription. In the prepaid card segment, Tempo Music, which emphasises on the access to music and offers 300 free SMS on every reload, has known considerable success among young people.
Mobistar has also excelled in the business segment during the past year. In the corporate segment, Mobistar succeeded in concluding a number of major new contracts while its market share in the SME and SOHO segments increased as a result of the success of Mobistar Professional, a new product tailored to the customer's needs.
In addition to the launch of innovative tariff plans, Mobistar successfully concluded a series of partnerships. In February 2006, Mobistar announced its MVNO (Mobile Virtual Network Operator) agreement with Telenet. This enables both parties to expand their commercial offers: WiFi hotspots for Mobistar and mobile telephony for Telenet. At the end of 2006, Mobistar had more than 10,000 mobile cards in its MVNO activity. The partnership between Universal Music Mobile and Mobistar enabled a combination of mobile telephony and music. Tempo Music was the result of this productive collaboration. The partnership with Delhaize, a joint marketing initiative with an offer called Mobile Plus, enabled Mobistar to further expand its offers and to strengthen its position in the mass market. Finally, Mobistar has deepened its collaboration with Euphony, a mobile telephony reseller, with whom it has developed a new tariff plan, Eulike-it.
Evolution of the customer base: proportion of post-paid customers exceeds the 50 % threshold
At the end of 2006, Mobistar had 3,139,224 active customers, 226,418 more than the 2,912,806 customers as at the end of 2005, a growth of 7.8 %.
The fiscal year 2006 was characterised by strong growth in the number of subscribers, resulting in a further improvement of the prepaid/postpaid ratio in the customer base. The number of postpaid customers increased by 341,881 new customers, or 26.9 % more compared to 2005. As a result, the proportion of postpaid customers in the customer base reached 51.4 %, whereas it was only 43.6 % as at the end of 2005.
At the year-end 2006, Mobistar had 22,545 ADSL customers, of whom 8,778 were new customers acquired during the 4th quarter. This trend can be explained by the promotion of ADSL within the framework of 10 years anniversary of Mobistar (one year of ADSL at half-price). Most customers chose ADSL Connect, an internet service without a fix line subscription at the incumbent operator. On the other hand, surveys show that Mobistar ADSL customers are satisfied with the offer and the customer service.
Continuous growth in average revenue per user (ARPU)
Despite strong pressure on prices, increased competition between operators and the reduction in Mobile Terminating Rates (MTR) last November, the Average Revenue Per User (ARPU) increased by 1.9 % in 2006, from 38.02 euros as at the end of 2005 to 38.75 euros one year later. This growth is primarily due to the increase in the number of postpaid customers in the customer base and increased use of the services. In 2006, the average use per customer (minutes/SMS) increased by 16.8 %(3) , compared with the preceding year, to 219.2 minutes/SMS per month in 2006, as against 188 in 2005.
The reduction shown in the prepaid customer base had no effect on the ARPU, which remained stable at 17.50 euros as a result of the success of a series of innovative prepaid products, which offered customers additional benefits when they made a regular reload (Tempo Music, Tempo Essential).
The profile of the 341,881 new postpaid customers, some of whom migrated from the prepaid customer base, and the strong pressure on prices in the business segment reduced the postpaid ARPU, which fell from 62.66 euros as at the end of 2005 to 57.53 euros as at 31 December 2006.
(3)Includes incoming and outgoing traffic for both voice minutes and SMS
Growth in service revenues
Service revenues recorded a growth of 6.5 % to a total of 1,496.1 million euros as at 31 December 2006, versus 1,404.3 million euros for the previous financial year.
The mobile activity has seen even stronger growth. Mobile service revenues have increased by 7.4 % to 1,411.6 million euros, as against 1,314.1 million euros realised during the preceding year.
The service revenues of the fix activity went from 90.2 million euros in 2005 to 84.5 million euros in 2006. This reduction is primarily associated with the lower revenue from fixed voice reselling.
The consolidated turnover, which includes the sale of mobile phones, increased to 1,546.8 million euros in the 2006 fiscal year, an increase of 6.6 % compared with 1,451.1 million euros in 2005.
Evolution of the profitability
Mobistar has succeeded in converting the growth in turnover into increased profitability. In the course of 2006, Mobistar recorded a growth of 6.9 % in the consolidated EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation). It rose to 614.6 million euros for the fiscal year 2006, against 575.1 million euros in 2005. Strong revenue growth combined with effective cost control in all business areas contributed to this rise. As a result, Mobistar recorded a stable EBITDA margin of 41.1 % of the service revenues in 2006, against 41.0 % in the preceding year.
The EBITDA of mobile activity rose in 2006 to 620.9 million euros, compared with 570.8 million euros one year before, a margin of 44.0 % against 43.4 % in 2005.
The costs of launching ADSL had a negative impact on the EBITDA of the fix telephony activities. It amounted to -6.3 million euros in 2006, compared to 4.3 million euros in 2005, or -7.5 % of the turnover, compared to 4.8 % during the previous year. The gross margin(4) of the fix activity amounted to 20.5 million euros during 2006, representing 24.3 % of the service revenues of the fix activity.
As a result of effective cost control, net profit increased more than turnover. During 2006, net profit rose to 299.5 million euros, an increase of 10.8 % compared with 270.3 million euros for the previous year. This represents a net profit per ordinary share of 4.73 euros, against 4.28 euros in 2005.
(4)Total turnover - interconnection costs - costs of equipment and goods sold
Investments: optimisation of the 2G network and roll-out of 3G using HSDPA technology
In 2006, Mobistar returned to a normal level of investment, which amounted to 165.2 million euros, or 10.7 % of turnover. The principal investments relate to the optimisation of quality and the coverage extension of the GSM network, together with a further roll-out of the 3G network, which was simultaneously equipped with HSDPA technology. By the end of 2006, Mobistar had exceeded the requirements of the 3G licence, which required 40 % coverage. The 3G/HSDPA network now covers 45 % of the population of Belgium.
In order to control distribution more effectively and to optimise acquisition costs, Mobistar has pursued its investments in the development of its own distribution channel which, at the end of 2006, consisted of 12 Mobistar Center in ownership. Mobistar also invested in the relooking of 70 Mobistar Center across Belgium.
Trends
In 2007, Mobistar will continue to expand its simple and innovative range of products and services in order to remain even more responsive to the needs of its customers. Mobistar intends to consolidate its reputation as a highly commercial and innovative operator. In this context, Mobistar completely refreshed its brand, a process which started at the beginning of the year.
The operator also wants to further pursue its cost control objectives. On 6 February, the Board decided to sub-contract part of its network activities to Ericsson in the course of 2007. A collective agreement, guaranteeing the terms and conditions of employees transferred, has been concluded between unions and management. New measures will also be taken in order to reduce costs in all areas of business activity.
In a difficult market situation with unfavourable access conditions, Mobistar intends to maintain a qualitative ADSL offer for its customers. Various initiatives are envisaged in order to make an important improvement in the profitability of this activity in 2007.
The progress realized in 2006 by Mobistar on the Belgian market will continue in 2007 in all activities (residential and business). Mobistar should still increase its value share mainly because of its performance in the postpaid segment. Nevertheless, the significant reduction in Mobile Terminating Rates that are imposed by the regulator (-36 % in 6 months) as well as the progressive decrease in roaming tariffs will penalize the evolution of the service revenues and of the net profit. In this context, while progressing significantly on its market, Mobistar remains cautious and foresees for 2007 service revenues and net profit down by 2 to 4% compared to 2006.
Shareholders' remuneration
The Board will recommend to the General Assembly of shareholders on 2 May 2007 a cash payment of 4.50 euros per share, equivalent to a total of 285 million euros. This payment will consist of an ordinary dividend of 2.70 euros and an extraordinary dividend of 1.80 euro, which will respectively take place on 9 May and 6 June 2007.
Statutory auditor's report
The statutory auditor has confirmed that the audit procedures on the consolidated financial statements have been completed substantially and that no significant corrections have been identified that should have been adjusted in the financial information included in the press release.
Brussels, 5 February 2007
Ernst & Young Reviseurs d'Entreprises S.C.C. (B 160)
represented by Herman Van den Abeele
Statutory Auditor