TEO LT, AB - Interim information

Results for the first nine months of 2016

On 20 October 2016, the Board of TEO LT, AB (hereinafter – “Teo” or “the
Company”) approved unaudited TEO LT, AB Consolidated Interim Financial
Statements, prepared according to International Financial Reporting Standards
as adopted by the European Union, for the nine months period ended 30 September
2016. 

Teo and Omnitel synergy leads to continued revenue growth

Third quarter of 2016*:
- Total consolidated revenue amounted to EUR 86.8 million, up by 3.6 per cent
over the comparable combined revenue of EUR 83.8 million in Q3 2015. This is
the best quarterly result of Teo and Omnitel operating together. 
- Consolidated EBITDA, excluding non-recurring items, reached EUR 30.3 million,
up by 4.7 per cent over the comparable combined EBITDA, excluding non-recurring
items, of EUR 29 million in Q3 2015. 

First nine months of 2016*:
- Total consolidated revenue amounted to EUR 253.5 million, up by 3.1 per cent
over the comparable combined revenue of EUR 246 million for 9 months of 2015. 
- Consolidated EBITDA, excluding non-recurring items, reached EUR 88.6 million,
up by 8.8 per cent over comparable combined EBITDA, excluding non-recurring
items, of EUR 81.5 million for 9 months of 2015. 
- Free cash flow amounted to EUR 36.7 million and was 1.7 times higher than a
year ago. 

Management comment:
The third quarter of 2016 was marked with accelerating Teo and Omnitel
integration, implementation of big IT projects, continued investments into
network development and preparation of new offers to customers. 

Continued intake of new customers has led to two milestones:
- number of fixed broadband Internet customers exceeded 400 thousand,
- number of post-paid mobile service subscriptions exceeded 1 million.

Number of IPTV customers shows a yearly double-digit growth (19.4%) as well as
revenue from TV services (20.2%), followed by revenue from IT services (7.8%),
mobile services (9.2%) and Internet services (5.5%). 

Revenue growth combined with lower operating expenses (excl. non-recurring
items) resulted in 35% EBITDA margin (excl. non-recurring items) for the first
9 months of 2016. 

As a next step in the Teo and Omnitel integration, in August a joint retail
outlet of a new concept was opened in Kaunas and from September the integration
and optimization of customer care retail outlets started. 

In July, Teo successfully completed consolidation of IT infrastructure of
Lietuvos Draudimas and companies belonging to PZU Group in the Baltic States at
the two data centers of Teo. During the migration, more than 250 servers were
moved from five data centers in Latvia, Estonia and Sweden to Lithuania. 

The first contract involving Teo and Telia Group companies in Latvia and
Estonia for providing pan-Baltic IT system support and telecommunication
services was signed with Coca-Cola Hellenic Bottling Company Baltic. 

Omnitel continued expansion of its 4G network and was the first in Lithuania to
implement a next-generation voice transmission technology VoLTE (Voice over
LTE) in its 4G network. An amount of EUR 9.7 million was allocated to the
development of the mobile network, while the total combined investments
amounted to EUR 36.6 million during the first 9 months of 2016 (EUR 30.9
million in 2015). 

Development of fiber-optic access network allowed Teo to offer new Internet
payment plans of higher browsing speed to business customers. New plans also
have an integrated IT system protection. 

As a contribution to the development of digital society, Teo together with its
partners installed 10 smart classrooms in Kaunas at the start of the new school
year. In addition, Teo and Omnitel have provided connectivity for the Internet
of things e-health project CARRE implemented by Vilnius University Hospital
Santariškių Klinikos. 

Note: * As on 4 January 2016, TEO LT, AB acquired a 100 per cent stake in
Omnitel, financial data of Teo Group for the third quarter and the first nine
months of 2016 presented herein is the consolidated data of TEO LT, AB and its
subsidiaries including Omnitel. Comparable data of financial statements for the
third quarter and the first nine months of 2015 is the actual reported data of
Teo Group for those periods. In order to present an approximate measure of the
performance of the combined group, the comparable combined data of
comprehensive income statement, as it is used in the Management Report of
Consolidated Financial Statements for the third quarter and the first nine
months of 2015, is data combined by simple aggregation after elimination of
intragroup transactions as if Omnitel was at the time part of the Teo Group. 



ENCL.:
- TEO LT, AB Consolidated Interim Financial Statements and Consolidated Interim
Report for the nine months period ended 30 September 2016. 
- Presentation of TEO LT, AB Group results for the first 9 months of 2016.




         Darius Džiaugys,
         Head of Investor Relations,
         tel. +370 5 236 7878

Attachments:

2016_9_months_results.pdf

2016_9_months_report.pdf