Slide 1: Fourth Quarter 2016
FOURTH QUARTER 2016 January 26, 2017 Tele2 AB
Slide 2: Group highlights – Q4 2016
Group highlights – Q4 2016 % Change % Change Q4 2016 Reported LFL Mobile end-user service revenue 3.71 +14% +6% (SEK billion) Net sales (SEK billion) 8.22 +18% +2% EBITDA (SEK billion) 1.46 +9% +4% 2 LFL is constant currencies and pro forma for Altel and TDC Sweden
Slide 3: Delivering on our long term strategy
Delivering on our long term strategy • Sweden mobile end-user service revenue up 4%, excluding TDC Value • Baltics mobile end-user service revenue up 12% Champion • Netherlands mobile customer base surpasses 1 million Focused • Swedish and Baltics 4G population coverage above 99% Technology • Nether
Slide 4: Sweden – Financials
Sweden – Financials Net sales Mobile end-user service EBITDA and EBITDA margin (SEK million) Revenue (SEK million) (SEK million) +22% +7% +9% 50% 4 029 45% 3 299 1 200 1 068 1 028 3 053 3 018 3 095 TDC 1 928 946 894 846 40% 1 801 1 758 1 778 1 885 3 294 35% 941 35% 700 1 872 30% 29% 29% 28% 26% 25%
Slide 5: Sweden – Continuing momentum
Sweden – Continuing momentum Consumer postpaid mobile end- Share of sales with bundle Geographic coverage user service revenue >0.5GB 2G/4G +7% 86% 86% 89% 71% Q4 15 Q4 16 Q4 15 Q4 16 Q4 15 Q4 16 Q4 Highlights – Consumer postpaid mobile end-user service revenue up 7% driven by increased data monetiz
Slide 6: Baltics – Financials
Baltics – Financials Net sales Mobile end-user service EBITDA and EBITDA margin (SEK million) revenue (SEK million) (SEK million) +15% +12% +3% 884 935 533 1 000 815 600 521 350 287 60% 900 770 787 476 468 477 264 800 500 300 257 246 256 50% 700 250 400 40% 600 200 500 300 32% 32% 33% 32% 30% 400 15
Slide 7: Baltics – Data monetization continues
Baltics – Data monetization continues ASPU development Share of 4G capable 4G population coverage smartphones in base +7% 99% 37% 88% 20% Q4 15 Q4 16 Q4 15 Q4 16 Q4 15 Q4 16 Q4 Highlights – Strong data monetization driven by ongoing prepaid to postpaid transition and data centric pricing – Strong AS
Slide 8: Netherlands – Financials
Netherlands – Financials Net sales Mobile end-user service EBITDA (SEK million) revenue (SEK million) (SEK million) +5% +9% -166% 1 800 1 512 1 583 500 419 438 1 600 1 441 1 452 1 478 450 403 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 1 400 400 322 336 100 350 1 200 300 1 000 250 50 35 800 200 600 150 0 400 100
Slide 9: Netherlands – Continuing momentum
Netherlands – Continuing momentum Spontaneous brand awareness Share of total new postpaid Data usage on own network & brand consideration (Memo2) (GfK) 19% 82% 52% 12% 41% 40% 34% 27% Pre-launch Dec 16 Pre-launch Q4 16 Pre-launch Dec 16 Oct 15 4G Awareness Consideration Q4 Highlights – Awareness and
Slide 10: Kazakhstan – Financials
Kazakhstan – Financials Net sales, LFL Mobile end-user service EBITDA and EBITDA margin, LFL (SEK million) revenue, LFL (SEK million) (SEK million) 0% +16% +343% 457 470 160 20% 800 706 702 500 418 433 700 611 450 404 14% 13% 545 574 400 8% 10% 600 350 110 3% 84 92 0% 500 300 400 250 -5% -10% 300 20
Slide 11: Kazakhstan – Strong performance
Kazakhstan – Strong performance Customer base, LFL ASPU development, LFL Integration (thousands) +5% +8% 6 114 6 440 ~500 sites merged Q4 15 Q4 16 Q4 15 Q4 16 Q4 Highlights – Customer base continues to grow year-on-year, despite competitive pressure – Strong ASPU growth driven by our continued focus
Slide 12: Challenger program on track
Challenger program on track Baseline 2016 target 2018 target Key progress areas 40% ✔ Simplify % of products harmonized 30% 60% Product simplification initiative progressing. 950 products closed year to date on shared platforms Further progress made on consolidating key cost 75% ✔ Discipline cat
Slide 13: Financial Overview
Financial Overview TELE2
Slide 14: Mobile end-user service revenue
Mobile end-user service revenue Tele2 Group Development per market (SEK million) (SEK million) +14% 3 711 24 3 711 3 598 217 9 3 242 3 307 3 129 35 57 127 3 242 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q4 15 Sweden Baltics NL KZ RoW Oth Q4 16 14
Slide 15: EBITDA
EBITDA Tele2 Group Development per market (SEK million) (SEK million) +9% 1 830 60,0% 1 630 1600 1 562 1 459 50,0% 97 17 1 459 82 7 1400 1 337 1 430 -23 1 337 -58 40,0% 1 226 1 230 1200 1 087 30,0% 1000 22,4% 1 030 19,3% 19,0% 17,8% 20,0% 16,3% 800 830 10,0% 600 0,0% 630 Q4 15 Q1 16 Q2 16 Q3 16 Q4 1
Slide 16: CAPEX
CAPEX Tele2 Group Development per market (SEK million) (SEK million) -12% 1 350 108 1400 60,0% 1 223 -36 1 223 1 154 1200 41 1 078 1 150 50,0% 39 1 078 1000 -208 40,0% -89 820 950 800 779 30,0% 600 750 20,0% 400 17,6% 17,9% 12,3% 11,2% 13,1% 10,0% 550 200 0 0,0% 350 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q4
Slide 17: Free cash flow
Free cash flow Total operations Tele2 Group Development (SEK million) (SEK million) +235% Working One-off Q4 15 EBITDA Interest etc Taxes capital CAPEX items Q4 16 900 838 600 500 700 130 0 394 400 500 394 300 501 300 200 139 100 100 Q4 15 Q1 16 Q1 16 0 -100 Q3 15 Q2 16 Q3 16 Q4 16 -100 -154 122 -20
Slide 18: Cash generation in established markets
Cash generation in established markets 83% 80% 77% 79% 77% 74% 69% 66% 65% 2014 2015 2016 SE Baltics Established Note: Cash generation defined as (EBITDA-CAPEX)/EBITDA, 18 Established markets defined as Sweden and Baltics
Slide 19: Debt position and financial leverage
Debt position and financial leverage Economic net debt to EBITDA 12 m rolling SEK billion Leverage 12,5 2,5 2,6 10,0 2,0 1,88 1,88 1,88 7,5 1,5 11,7 11,0 5,0 9,9 10,4 1,0 9,4 2,5 0,5 0,0 0,0 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Economic net debt Dividend, announced Economic net debt to EBITD
Slide 20: SEK 16 billion of debt refinanced
SEK 16 billion of debt refinanced Maturity profile in Q4 2015 Maturity profile in Q4 2016 (SEK billion) (SEK billion) 10,0 12,0 9,0 10,0 8,0 7,0 8,0 6,0 8,8 5,0 6,0 7,6 4,0 4,0 3,0 2,0 4,8 5,1 3,5 2,0 1,0 0 2,9 0 2,4 0,0 1,0 0,0 0-1 1-2 2-5 5+ years 0-1 1-2 2-5 5+ years Utilized Unutilized Utilized
Slide 21: Financial guidance 2017
Financial guidance 2017 Mobile end-user EBITDA Dividend policy service revenue (SEK billion) Mid-single digit % growth* 5.9 – 6.2 2017: 4 SEK / share Covered by eFCF from 2019 Net sales CAPEX Financial leverage (SEK billion) (SEK billion) 31 – 32 3.8 – 4.1 2.0 - 2.5 *Based on LFL which is constant c
Slide 22: Summary
Summary TELE2
Slide 23: Key priorities moving forward
Key priorities moving forward Growth from continued data monetization Sustain momentum in Sweden and Baltics Integration of TDC Further leverage our challenger strategy in Netherlands and Kazakhstan Execute on Challenger and synergy programs Focused Winning Value Step-Change Technology Peo
Slide 24: Tele2's Way2Win
Tele2’s Way2Win Vision We will be champions of customer value in everything we do Mission We are challengers, fast-movers and will always offer our customers what they need for less Where we play How we win Focused Winning Mobile Our current Residential Value Step-Change IoT Technology People & acce
Slide 25: The End
THE END