Strong adj. EBITDA margin improvement: Full year adj. EBITDA improved +10.1% year-on-year (yoy) to £1,574m, a 24.3% (FY 2012: 21.5%) margin. H2 adj. EBITDA margin of 25.3% (H2 2012: 22.4%).
Excellent progress delivering post-merger synergy savings: £457m (103%) of £445m target of annual gross opex merger synergies realised through relentless focus and successful execution of network, retail and supplier optimisation programmes.
Improving commercial momentum driven by strong 4G demand: Full year service revenue stable at 0.0% yoy excluding regulatory cuts and -3.7% including regulatory impacts. Q4 service revenue +1.1% yoy excluding regulatory cuts and -1.5% including regulatory impact. High value postpaid base +756k (+5.6%) yoy. 4G customer base surpassed 2m in early January 2014.
Strengthening brand awareness and clear network leadership driving growth areas: Independent recognition as the UK’s biggest and fastest network, with 70% 4G population coverage, underpinned improved performance: in B2B, winning big UK businesses including Hoover, National Grid, Tate & Lyle Sugars and in 2014, Sky; in wholesale, secured Mobile Virtual Network Operator (MVNO) agreements with Asda, Phones 4u and Virgin Mobile; and in Fixed Broadband, grew revenues +10% yoy and customer base +4.6% yoy.
4G customer base surges 816k to c. 2m: 4G customer base grew +68% from Q3 to Q4 to reach 1.996m, with 4,100+ corporate customers, putting EE’s 4G adoption rate on par with the world’s fastest.
Successfully acquiring and retaining high value customers: 194k postpaid net adds; 58% (Q4 2012: 52%) of base now postpaid, excluding machine-to-machine (M2M), delivering 6x more ARPU than prepaid. Prepaid base reduced 543k; prepaid revenue trend in line with industry shift towards postpaid. Effectively retaining postpaid customers, with churn of 1.2%, the 11th quarter in a row at 1.2% or below.
Further data revenue growth: Data/text revenue +6ppts yoy to 56% (Q4 2012: 50%) of ARPU. Data (non-text) revenue +10ppts yoy to 44% (Q4 2012: 34%) of ARPU.
Olaf Swantee, Chief Executive Officer of EE, commented: “We successfully executed our strategy, growing our pay monthly base, delivering our targeted cost savings and achieving our best margin yet, all while cementing EE’s position as the UK’s best network for consumers and businesses alike. 2013 was the year of 4G, with two million customers enjoying the benefits of superfast connectivity on Britain’s most awarded network.”
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