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COLT Telecom Group S.A. announces results for the quarter ended 31 March 2009

Q1 FINANCIAL RESULTS 

Compared to Q1 2008

• Revenue increased by 1.3% to €416.2m and increased by 4.5% on a constant currency basis
• Data revenue grew by 3.7% to €199.7m and grew by 7.5% on a constant currency basis
• Managed Services revenue grew by 32.7% to €37.3m and grew by 38.8% on a constant currency basis
• Gross margin before depreciation remained constant at 38.9% 
• EBITDA(1) increased by €6.8m or 9.4% to €78.9m
• Profit before tax and exceptional items increased by €8.5m to €17.1m
• Free cash outflow(2) decreased from €16.5m to €11.1m
• Capital expenditure decreased from €67.5m to €49.6m

The Group's financial position has improved significantly, with cash and cash equivalents of €458.1m and net funds of €195.9m at the end of the quarter, including proceeds of €199.1m from the Q1 Open Offer.

Commenting on the results, Rakesh Bhasin, Chief Executive Officer, said: 

'Despite ongoing tough trading conditions, I am pleased to report another solid quarter of progress reflecting the resilience in COLT's business model.

'With the proceeds of the Open Offer, COLT now has a significantly improved financial position and we were able to repay all of our outstanding debt in April.

'We will continue to manage our business tightly through the challenging trading conditions that are forecast for the business environment as a whole in 2009.'

(1) EBITDA is earnings before net finance costs, tax, depreciation, amortisation, foreign exchange, and exceptional items.

(2) Free cash flow is net cash generated from operating activities less net cash used in investing activities and net finance costs paid.

This Press Release is also available via the COLT website at www.colt.net. 

FINANCIAL REVIEW 

Unless indicated otherwise, the following commentary is based on nominal variances including exchange rate movements. Certain key financial metrics are also provided at constant currency, converting Q1 2009 non-Euro currency measures at Q1 2008 exchange rates. Constant currency revenue metrics are included in Appendix 2.

All comparatives are against the equivalent period of the prior year.

Managed Services revenue has been separately disclosed for the first time in Q1 2009. This revenue was previously reported within Data revenue. COLT's Managed Services comprise application hosting, infrastructure management, IT services, network and facilities management, including the provision of hardware to support these services but excluding any associated Telecoms related revenue which remains within Data revenue.

Issue of shares by Open Offer

COLT announced and completed an Open Offer issue of shares during Q1 2009. Total proceeds from this sterling denominated share issue converted at the spot rate were €189.4m or €186.6m net of €2.8m of issue costs. COLT had entered into forward contracts at the time of the initial Open Offer announcement to convert the majority of Sterling receipts into Euros. The forward contract rates were favourable to the spot rate at maturity and accordingly COLT realised an exceptional €9.7m exchange gain within the income statement. Gross proceeds of the Open Offer including the €9.7m exchange gain were €199.1m.

As part of the Open Offer process, the shareholders approved a reduction in the nominal value of the Ordinary shares from €1.25 per share to €0.50 per share. Accordingly, the amount of the Group's issued share capital in relation to the 680 million of existing shares at that time was reduced by €510.4m and transferred to distributable reserves. The Open Offer shares were also issued at a nominal value of €0.50 per share.

 

Post balance sheet event - repayment of debt

COLT repaid the existing €262.2m non-convertible debt on 17 April 2009 together with €6.8m of accrued interest.

Total revenue

Revenue for the quarter increased by €5.3m, or 1.3%, to €416.2m, and increased by 4.5% on a constant currency basis. After excluding the impact of reductions in fixed to mobile prices, total revenue increased by 2.1%.

Data revenue grew by €7.1m or 3.7%, and increased by 7.5% on a constant currency basis. The easing in the Data revenue growth rate from 8.3% at constant currency in Q4 2008 reflects a slow down in orders as customers, particularly larger corporate customers in the Major Enterprise division, review their planned expenditure in response to the current economic environment. The main growth in Data revenue continues to come from Ethernet products.

Managed Services revenue grew by €9.2m or 32.7%, and increased by 38.8% on a constant currency basis.

Corporate and Reseller Voice reduced by €13.6m or 10%, mainly in Germany and the UK. At 8.2% on a constant currency basis, the rate of decline was lower than the 9.5% reduction experienced in the previous quarter. 

 

Carrier Voice revenue grew by €2.6m or 4.8%, and increased by 7.9% on a constant currency basis. 

Total Voice revenue declined by 5.8%. After excluding the impact of reductions in fixed to mobile prices, Voice revenue declined by 4.1%.  

At 31 March 2009 deferred revenue (which mainly relates to Data revenue) was €187.8m (31 March 2008: €185.2m), a year on year increase of €2.6m. The increase during Q1 2009 was €2.7m (31 December 2008: €185.1m). An analysis of deferred revenue between Data and Managed Services is presented in Appendix 3.

Major Enterprise revenue

Total revenue for the Major Enterprise division increased by €4.0m to €172.3m (2008: €168.3m).

Data revenue from Major Enterprise customers decreased by 0.5% to €103.2m (2008: €103.7m) but on a constant currency basis increased by 3.4%, mainly driven by Ethernet products.

Managed Services revenue from Major Enterprise customers increased by 39.4% to €30.1m (2008: €21.6m), largely reflecting new long term Data Centre contracts with global financial services customers.

Voice revenue from Major Enterprise customers decreased by 9.3% to €39.0m (2008: €43.0m). Of the decline, 4.4pp arose in Germany due to continuing competitive pressures across the Voice market and 4.2pp arose in the UK due to the strengthening of the Euro against Sterling.

SME revenue

Total revenue for the SME division decreased by €5.3m to €115.1m (2008: €120.4m).

Data revenue from SME customers increased by 5.6% to €45.0m (2008: €42.6m), driven by growth in COLT Total, our combined Voice/Data product for this market, and Ethernet. 

Managed Services revenue from SME customers increased by 11.1% to €6.0m (2008: €5.4m), driven by growth in Facilities Management services.

Voice revenue from SME customers for the quarter decreased by 11.5% to €64.1m (2008: €72.4m), of which 8.0pp related to Germany driven by the continued decline in our legacy Carrier Pre-Select (CPS) product particularly in the consumer and micro-business (typically less than 30 employees) markets. A further 1.9pp related to the UK largely due to the strengthening of the Euro against Sterling.

 

Wholesale revenue

Total revenue for the Wholesale division increased by €6.6m to €128.8m (2008: €122.2m).

Data revenue from Wholesale customers increased by 11.2% to €51.5m (2008: €46.3m), driven by continued demand from our larger customers for Ethernet products. 

Managed Services revenue from Wholesale customers increased by 9.1% to €1.2m (2008: €1.1m).

Carrier Voice revenue from Wholesale customers for the quarter increased by 4.8% to €57.3m (2008: €54.7m) largely in the UK due to investment in new interconnects and traders.

Corporate and Reseller Voice revenue from Wholesale customers for the quarter decreased by 6.5% to €18.8m (2008: €20.1m) due to continued competitive price pressures.

Cost of sales and Gross profit

Cost of sales for the quarter increased by 0.5% to €302.9m (2008: €301.3m). Within cost of sales, interconnect and network costs increased by 1.2% to €254.2m (2008: €251.1m) driven by the increased revenue and some direct cost increases. Network depreciation for the quarter decreased by 3.0% to €48.7m (2008: €50.2m).

Gross profit percentage before depreciation remained constant at 38.9%. The benefits from the improved mix of higher margin Data and Managed Services revenue were offset by: lower voice margins due to the increased mix of Carrier Voice; a change in transaction mix particularly within Managed Services; and the increases in costs noted above.

Operating expenses

Operating expenses for the quarter decreased by €4.1m to €91.4m (2008: €95.5m). 

Selling, general and administrative ('SG&A') expenses for the quarter decreased by 5.2% to €83.1m (2008: €87.7m). However on a constant currency basis expenses for the quarter increased by 2.2% to €89.6m. The controlled increase mainly reflects additional resource in customer-facing divisions to support revenue growth. 

Other depreciation for the quarter increased by €0.5m to €8.3m (2008: €7.8m).

EBITDA

EBITDA for the quarter increased by €6.8m or 9.4% to €78.9m, (2008: €72.1m). On a constant currency basis EBITDA increased by €4.4m or 6.1%, with the benefit of the increased revenue partially offset by the increase in SG&A expenses.

Operating profit

The operating profit for the quarter increased by €7.8m to €21.9m (2008: €14.1m). On a constant currency basis operating profit increased by €2.2m reflecting the increased EBITDA and decreased depreciation during the quarter. 

Operating profit for the Major Enterprise division for the quarter increased by €7.0m to €11.9m (2008: €4.9m) driven by increased higher margin Managed Services revenue and reduced costs.

Operating loss for the SME division for the quarter increased by €0.8m to €3.0m (2008: €2.2m) as the decrease in overall SME revenue more than offset gains from the improved mix of higher margin Data and Managed Services revenue. 

Operating profit for the Wholesale division increased by €1.6m to €13.0m (2008 €11.4m), due to the increase in total revenue and improved mix of higher margin Data and Managed Services revenue.

Finance income and finance costs and similar charges

Finance income for the quarter increased by €1.0m to €2.0m (2008: €1.0m) reflecting improved cash management and higher cash balances, partly as a result of the share issue. Finance costs and similar charges for the quarter remained constant at €5.7m. 

Exceptional item

COLT realised an exceptional foreign exchange gain of €9.7m on forward contracts relating to the Open Offer proceeds during the quarter.

Taxation

COLT had no profits on which tax was payable during the quarter (2008: €nil).

Profit after taxation

Profit after taxation and exceptional foreign exchange gains increased by €18.2m to €26.8m (2008: €8.6m). 

 

Cash flow and net debt

Free cash outflow improved by €5.4m to an outflow of €11.1m (2008: outflow of €16.5m) reflecting the increase in EBITDA and lower capital expenditure offset by increased outflows from working capital. The cash outflow in working capital was entirely due to payment of liabilities, with trade receivables neutral to cash flow as we maintained the strong collections seen in Q4. The outflow from liabilities is seasonal and occurs in the first quarter of each year due to annual bonus payments and annual payments-in-advance to suppliers. The increased outflow from payables compared with 2008 is due to movements in deferred revenue, reflecting the billing of a major financial customer installation in Q1 2008. 

Capital expenditure decreased by €17.9m to €49.6m. Lower customer installations, reduced spend on network and data centre infrastructure, the timing of expenditure on larger internal IT projects and exchange rate movements all contributed to the decrease. Additional information on capital expenditure is provided in Appendix 2.

The net movement in cash and cash equivalents for the quarter was an inflow of €185.2m (2008: outflow of €16.1m) due primarily to proceeds of €199.1m from the Q1 Open Offer. At 31 March 2009 cash and cash equivalents increased to €458.1m (2008: €213.0m). Net funds at 31 March 2009 were €195.9m (2008: net debt of €49.2m). 

Financial Information

Consolidated income statement

	Three months ended
	31 March
	2009	2009	2009
€m	Before exceptional items	Exceptional items	After exceptional items	2008
Revenue	416.2	--	416.2	410.9
Cost of sales
Interconnect and network	(254.2)	--	(254.2)	(251.1)
Network depreciation	(48.7)	--	(48.7)	(50.2)
	(302.9)	--	(302.9)	(301.3)
Gross profit	113.3	--	113.3	109.6
Operating expenses
Selling, general and administrative	(83.1)	--	(83.1)	(87.7)
Other depreciation and amortisation	(8.3)	--	(8.3)	(7.8)
	(91.4)	--	(91.4)	(95.5)
Operating profit	21.9	--	21.9	14.1
Other income (expense)
Finance income	2.0	--	2.0	1.0
Finance costs and similar charges	(5.7)	--	(5.7)	(5.7)
Exchange (loss) gain	(1.1)	9.7	8.6	(0.8)
	(4.8)	9.7	4.9	(5.5)
Profit before taxation	17.1	9.7	26.8	8.6
Taxation	--	--	--	--
Profit for the period	17.1	9.7	26.8	8.6
Basic earnings per share	€0.02		€0.04	€0.01
Diluted earnings per share	€0.02		€0.04	€0.01

The basis on which this information has been prepared is described in Note 1 to this financial information.

Consolidated balance sheet

€m	At 31 March	At 31 December	At 31 March
	2009	2008	2008
ASSETS
Non-current assets
Intangible assets	73.0	66.2	69.0
Property, plant and equipment	1,190.4	1,194.4	1,191.6
Total non-current assets	1,263.4	1,260.6	1,260.6
Current assets
Trade receivables	220.6	220.2	243.1
Prepaid expenses and other debtors	64.1	47.8	78.7
Cash and cash equivalents	458.1	273.6	213.0
Total current assets	742.8	541.6	534.8
Total assets	2,006.2	1,802.2	1,795.4
EQUITY
Capital and reserves
Share capital	1,402.9	1,723.9	1,723.7
Other reserves	(245.3)	(762.5)	(718.5)
Retained profit (losses)	7.7	(19.1)	(75.9)
Total equity	1,165.3	942.3	929.3
LIABILITIES
Non-current liabilities
Non-convertible debt	--	--	262.2
Provisions for liabilities and charges	39.8	40.5	42.8
Retirement benefit obligations	6.1	6.2	--
Total non-current liabilities	45.9	46.7	305.0
Current liabilities
Trade and other payables	532.8	551.0	561.1
Non-convertible debt	262.2	262.2	--
Total current liabilities	795.0	813.2	561.1
Total liabilities	840.9	859.9	866.1
Total equity and liabilities	2,006.2	1,802.2	1,795.4

Consolidated statement of recognised income and expense

	Three months ended
€m	31 March
	2009	2008
Profit for the period	26.8	8.6
Net exchange adjustments offset in reserves	9.8	(16.4)
Total recognised gain (loss) for the period	36.6	(7.8)

Consolidated reconciliation of changes in equity

	Three months ended
€m	31 March
	2009	2008
Profit for the period	26.8	8.6
Issue of ordinary shares	--	0.4
Shares to be issued under share option plans	(0.2)	--
Open Offer shares issued	186.6	--
Net exchange adjustments offset in reserves	9.8	(16.4)
Net change in equity	223.0	(7.4)
Opening equity	942.3	936.7
Closing equity	1,165.3	929.3

Consolidated cash flow statement

	Three months ended
€m	31 March
	2009	2008
Net cash generated from operating activities	36.5	50.1
Cash flows from investing activities:
Purchase of non-current assets	(49.7)	(67.6)
Disposal of non-current assets	0.1	0.1
Net cash used in investing activities	(49.6)	(67.5)
Cash flows from financing activities:
Finance income received	2.3	0.9
Finance costs	(0.3)	--
Issue of ordinary shares	--	0.4
Open Offer proceeds net of costs recognised directly in equity	186.6	--
Exceptional foreign exchange gain on Open Offer proceeds	9.7	--
Net cash used in financing activities	198.3	1.3
Net movement in cash and cash equivalents	185.2	(16.1)
Cash and cash equivalents at beginning of period	273.6	231.1
Effect of exchange rate changes on cash and cash equivalents	(0.7)	(2.0)
Cash and cash equivalents at end of period	458.1	213.0

Free cash flow reconciliation

	Three months ended
€m	31 March
	2009	2008
EBITDA (1)	78.9	72.1
Movement in receivables	(14.9)	(4.6)
Movement in payables (excluding deferred revenue)	(24.4)	(22.5)
Movement in deferred revenue	(0.8)	7.3
Movement in provisions	(1.3)	(1.4)
Other non-cash items	(1.0)	(0.8)
Finance income received	2.3	0.9
Finance costs	(0.3)	--
Net cash used in investing activities (capital expenditure)	(49.6)	(67.5)
Free cash outflow (2)	(11.1)	(16.5)

(1) EBITDA is earnings before net finance costs, tax, depreciation, amortisation, foreign exchange, and exceptional items.

(2) Free cash flow is net cash generated from operating activities less net cash used in investing activities and net finance costs paid.

Notes to the Financial Information

1. Basis of preparation and principal accounting policies

COLT Telecom Group S.A., together with its subsidiaries, is referred to as 'the Group'. Consolidated financial information has been presented for the Group for the three months ended 31 March 2009 and 31 March 2008. 

The financial information for the three months ended 31 March 2009 and 31 March 2008 is unaudited and does not constitute consolidated financial statements within the meaning of Luxembourg company law of 19 December 2002.

The financial information has been prepared in accordance with International Accounting Standard 34 (IAS 34) 'Interim Financial Reporting'. The financial information should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2008. The accounting policies applied and the presentation of the financial information are consistent with the Group's 2008 annual consolidated financial statements.  

The Group's operations are not generally subject to significant seasonal or cyclical variations.

IAS 23 Borrowing costs was amended, effective from 1 January 2009, removing the option previously applied by COLT to expense interest costs that relate to borrowings which finance expenditure on non-current assets. Instead, applicable borrowing costs are now required to be capitalised. COLT has elected to continue with its previous treatment of expensing such costs on the basis that the amounts that would be capitalised under the amended standard are immaterial, particularly as the Group's external borrowings were repaid on 17 April 2009.

2. Segmental information

The Group is managed around its three customer facing Business Divisions: Major Enterprise, Small and Medium Enterprises (SME) and Wholesale (including Carrier Voice operations), supported by six Service Divisions. COLT's three Business Divisions correspond to its reportable segments in line with the information reported to its chief operating decision maker, the Executive Board.

Divisional revenue has been classified as Voice, Data and Managed Services to provide an analysis of products and services that they provide. Voice revenue comprises services including the transmission of Voice, Data or video through a switching centre. Voice revenue has been further split between Carrier Voice and Corporate and Reseller Voice. Carrier Voice revenue includes Voice services provided wholesale to other licensed operators, and Corporate and Reseller Voice revenue is all other Voice revenue. Data revenue includes non-managed network services, bandwidth services and Voice traffic which is delivered in a digital form (IP Voice). Managed Services revenue comprises managed network services.

Managed Services revenue, which was previously included within Data revenue, has been reported separately for the first time in Q1 2009 as it approaches materiality in relation to total COLT revenue.

The divisional operating results include all costs directly attributable to the divisions and the recharge of all shared network and other Service Division operating costs, including depreciation. The bases used to recharge these costs may be further refined in the future. 

The Divisions use a shared network which is not divisible and is therefore classified as an unallocated corporate asset. As such, all capital expenditure and depreciation are also classified as corporate, although depreciation is recharged. Other unallocated corporate assets include cash and debt.

Due to the reclassification of certain customers between divisions in 2009 as a result of changes to divisional customer revenue thresholds, prior year segmental comparatives have been restated. Restated comparative information including separate Managed Services revenue disclosure covering all quarters of 2008 is available via the COLT website at www.colt.net. 

The Group has a large customer base and no undue reliance on any one major customer therefore no such related revenue is required to be disclosed.

For the three months ended 31 March 2009 and 31 March 2008 revenue and result by reportable segment were as follows:

	Three months ended 31 March 2009
€m	Major Enterprise	SME	Wholesale	Total
Carrier Voice	--	--	57.3	57.3
Corporate and Reseller Voice	39.0	64.1	18.8	121.9
Total Voice revenue	39.0	64.1	76.1	179.2
Data revenue	103.2	45.0	51.5	199.7
Managed Services revenue	30.1	6.0	1.2	37.3
Total revenue	172.3	115.1	128.8	416.2
Operating result by segment	11.9	(3.0)	13.0	21.9

    

	Three months ended 31 March 2008 (restated)
€m	Major Enterprise	SME	Wholesale	Total
Carrier Voice	--	--	54.7	54.7
Corporate and Reseller Voice	43.0	72.4	20.1	135.5
Total Voice revenue	43.0	72.4	74.8	190.2
Data revenue	103.7	42.6	46.3	192.6
Managed Services revenue	21.6	5.4	1.1	28.1
Total revenue	168.3	120.4	122.2	410.9
Operating result by segment	4.9	(2.2)	11.4	14.1

Total assets by reportable segment were as follows:

Segment assets
€m		Major Enterprise	SME	Wholesale	Corporate and eliminations	Total
31 March 2009		93.3	60.5	114.9	1,737.5	2,006.2
31 December 2008		83.2	52.8	115.8	1,550.4	1,802.2
31 March 2008		123.1	66.8	113.3	1,492.2	1,795.4

3. Earnings per share

	Three months ended
	31 March
	2009	2008
Basic weighted average number of ordinary shares (m)	701.6	680.3
Dilutive ordinary shares from share options (m)	0.4	0.3
Diluted weighted average number of ordinary shares (m)	702.0	680.6
Profit for the period (€m)	26.8	8.6
Basic earnings per share (€)	0.04	0.01
Diluted earnings per share (€)	0.04	0.01

4.  Reconciliation of profit for the period to cash generated from operations 

	Three months ended
€m	31 March
	2009	2008
Profit for the period	26.8	8.6
Finance costs and similar charges	5.7	5.7
Finance income	(2.0)	(1.0)
Exchange gain (loss)	(8.6)	0.8
Depreciation	57.0	58.0
Other non-cash items	(1.0)	(0.8)
Movement in receivables	(14.9)	(4.6)
Movement in payables	(25.2)	(15.2)
Movement in provisions	(1.3)	(1.4)
Net cash generated from operations	36.5	50.1

5. EBITDA reconciliation

	Three months ended
€m	31 March
	2009	2008
Net cash generated from operations	36.5	50.1
Movement in receivables	14.9	4.6
Movement in payables	25.2	15.2
Movement in provisions	1.3	1.4
Other non-cash items	1.0	0.8
EBITDA	78.9	72.1

6. Analysis of net funds/(debt)

	Three months ended
€m	31 March
	2009	2008
Net movement in cash and cash equivalents	185.2	(16.1)
Other non-cash movements	(0.7)	(2.0)
Net movement in net funds/(debt)	184.5	(18.1)
Opening net funds/(debt)	11.4	(31.1)
Closing net funds/(debt)	195.9	(49.2)
Represented on the balance sheet by:
Cash and cash equivalents	458.1	213.0
Non-current financial liabilities	--	(262.2)
Current financial liabilities	(262.2)	--
Closing net funds/(debt)	195.9	(49.2)

7.  Reconciliation of movement in shareholders' equity

€m	Share capital	Other reserves	Retained (losses) profit	Total equity
At 31 December 2008	1,723.9	(762.5)	(19.1)	942.3
Reduction in nominal share capital	(510.4)	510.4	--	--
Issue of shares by Open Offer	189.4	--	--	189.4
Open Offer costs recognised directly in equity	--	(2.8)	--	(2.8)
Exchange movements offset in reserves	--	9.8	--	9.8
Share scheme charge	--	(0.2)	--	(0.2)
Profit for the quarter	--	--	26.8	26.8
At 31 March 2009	1,402.9	(245.3)	7.7	1,165.3

Following the announcement of the Open Offer on 20 February, in March COLT issued 210,963,549 of Ordinary shares. Total proceeds from this sterling denominated share issue converted at the spot rate were €189.4m or €186.6m net of €2.8m of issue costs. COLT had entered into forward contracts at the time of the initial Open Offer announcement to convert the majority of Sterling receipts into Euros, with the remaining receipts used to finance COLT's UK-based operations. The forward contract rates were favourable to the spot rate at maturity therefore COLT realised an exceptional €9.7m exchange gain within the income statement. Gross proceeds of the Open Offer including the €9.7m cash gain were €199.1m. 

As part of the Open Offer process, the shareholders approved a reduction in the nominal value of the Ordinary shares from €1.25 per share to €0.50 per share. Accordingly, the amount of the Group's issued share capital in relation to the 680 million of existing shares at that time was reduced by €510.4m and transferred to distributable reserves. The Open Offer shares were also issued at a nominal value of €0.50 per share.

8.  Post balance sheet event - repayment of non-convertible debt

COLT repaid the existing €262.2m non-convertible debt on 17 April 2009 together with €6.8m of accrued interest.

APPENDIX 1 - Constant currency analysis

An analysis of turnover for the three months ended 31 March 2009, compared to the three months ended 31 March 2008 after excluding the impact of foreign exchange, is shown below:

		Three months to 31 March
		2009	2008	% Movement
REVENUE		€m	€m	Actual	Business	Foreign exchange Impact
Major Enterprise
Corporate and Reseller Voice		39.0	43.0	(9.3%)	(5.7%)	(3.6%)
Data revenue		103.2	103.7	(0.5%)	3.4%	(3.9%)
Managed Services revenue		30.1	21.6	39.4%	46.2%	(6.8%)
Total revenue		172.3	168.3	2.4%	6.6%	(4.2%)
SME
Corporate and Reseller Voice		64.1	72.4	(11.5%)	(10.2%)	(1.3%)
Data revenue		45.0	42.6	5.6%	8.2%	(2.6%)
Managed Services revenue		6.0	5.4	11.1%	15.2%	(4.1%)
Total revenue		115.1	120.4	(4.4%)	(2.5%)	(1.9%)
Wholesale
Carrier Voice		57.3	54.7	4.8%	7.9%	(3.1%)
Corporate and Reseller Voice		18.8	20.1	(6.5%)	(6.5%)	--
Total Voice revenue		76.1	74.8	1.7%	4.0%	(2.3%)
Data revenue		51.5	46.3	11.2%	16.0%	(4.8%)
Managed Services revenue		1.2	1.1	9.1%	9.4%	(0.3%)
Total revenue		128.8	122.2	5.4%	8.6%	(3.2%)
Total
Carrier Voice		57.3	54.7	4.8%	7.9%	(3.1%)
Corporate and Reseller Voice		121.9	135.5	(10.0%)	(8.2%)	(1.8%)
Total Voice revenue		179.2	190.2	(5.8%)	(3.6%)	(2.2%)
Data revenue		199.7	192.6	3.7%	7.5%	(3.8%)
Managed Services revenue		37.3	28.1	32.7%	38.8%	(6.1%)
Total revenue		416.2	410.9	1.3%	4.5%	(3.2%)

The foreign exchange impact has been calculated by retranslating non Euro revenue in the current period at the prior period average exchange rate. The most significant exchange impact on the reported results comes from the 20% strengthening of the Euro against Sterling compared to Q1 2008.  

APPENDIX 2 - Analysis of cash used in investing activities (capital expenditure)

An analysis of cash capital expenditure within the Group's consolidated cash flow statement for the three months ended 31 March 2009, compared to the three months ended 31 March 2008, is shown below:

		Three months ended 31 March
€m		2009	2008
Success driven capital expenditure primarily related to :
Data revenues*		36.0	45.1
Managed Services revenues*		5.0	6.8
Other*		8.6	15.6
Total capital expenditure		49.6	67.5

*This analysis is estimated based on the proportion of fixed asset additions.

Data revenue related capital expenditure primarily relates to new equipment both on customer premises and elsewhere in the network to support the acquisition of new Data revenue customer contracts. 

Managed Services related capital expenditure primarily relates to the build out of Data Centres and customer specific capital expenditure within Data centres. 

Other capital expenditure represents non-customer specific core network and office infrastructure, internal IT projects and network inventory. 

APPENDIX 3 - Deferred Revenue analysis

An analysis of Deferred Revenue as at 31 March 2009, compared to the position as at 31 March 2008 after excluding the impact of foreign exchange, is shown below:

	Three months to 31 March
	2009	2008	% Movement
DEFERRED REVENUE	€m	€m	Actual	Business	Foreign exchange Impact*
Data **	133.2	134.5	(1.0%)	4.3%	(5.3%)
Managed Services **	54.6	50.7	7.7%	18.3%	(10.6%)
Total Deferred Revenue	187.8	185.2	1.4%	8.2%	(6.8%)

* -The foreign exchange impact has been calculated by retranslating non Euro Deferred Revenue as at 31 March 2009 at the prior period end exchange rate. The most significant exchange impact on the reported balances comes from the 20% strengthening of the Euro against Sterling compared to Q1 2008.  

** - The allocation of certain older deferred revenue balances between Data and Managed services was based upon management estimates.

Forward Looking Statements

This report contains 'forward looking statements' including statements concerning plans, future events or performance and underlying assumptions and other statements which are other than statements of historical fact. COLT Telecom Group S.A. wishes to caution readers that any such forward looking statements are not guarantees of future performance and certain important factors could in the future affect the Group's actual results and could cause the Group's actual results for future periods to differ materially from those expressed in any forward looking statement made by or on behalf of the Group. These include, among others, the following: (i) any adverse change in regulations and technology within the telecommunications industry, (ii) the Group's ability to manage its growth, (iii) the nature of the competition that the Group will encounter and wider economic conditions including economic downturns, (iv) unforeseen operational or technical problems and (v) the Group's ability to raise capital. The Group undertakes no obligation to release publicly the results of any revision to these forward looking statements that may be made to reflect errors or circumstances that occur after the date hereof.

Enquiries:

Gill Maclean
Email: gill.maclean@colt.net
Tel: +44 (0) 20 7863 5314

Mark Savage
Email: mark.savage@colt.net
Tel: +44 (0) 20 7390 3098

Group Communications
Beaufort House
15 St Botolph Street
LONDON
EC3A 7QN

www.colt.net

COLT Telecom Group S.A., Sociéte Anonyme, incorporated and registered in Luxembourg, No. R.C.S. Luxembourg B115679

(Registered Office: K2 Building, Forte 1, 2a rue Albert Borschette, L-1246 Luxembourg).

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