Slide 1: Q4 2006 Financial Report
Q4 2 00 6 L R E P O RT FI NA N C I A Lars-Johan Jarnheimer President and CEO
Slide 2: Tele2: Q4 2006 Results
TELE2: Q4 2006 RESULTS SEK MILLION 2006 2005 2006 2005 Q4 Q4 Full Year Full Year Continuing operations Operating revenue 12,952 12,635 50,306 44,457 Net customer intake (thousands) 953 1,205 2,778 3,621 EBITDA 1,466 1,415 5,652 5,772 • Mobile revenues in Q4 increased by 28 % to SEK 5.2 billion • Str
Slide 3: Concentrations of Scale and Scope
CONCENTRATIONS OF SCALE AND SCOPE Today Tomorrow • 22 Countries • Continue the strategic review to • Mobile/MVNO in 14 create geographic concentration countries • Focus on Mobile success – use the • Broadband in 12 countries fixed line base to cross sell • Fixed in 15 countries broadband • Create ne
Slide 4: Shift in Revenue Mix – The Trend Is Clear
SHIFT IN REVENUE MIX – THE TREND IS CLEAR Sales - Q4 2006 Sales - Q4 2005 17% 12% 42% 33% 41% 55% Broadband (resale & direct access) Fixed telephony resale Mobile
Slide 5: Excellent Performance in Mobile Telephony
EXCELLENT PERFORMANCE IN MOBILE TELEPHONY SEK MILLION 2006 2005 2006 2005 Q4 Q4 Full Year Full Year Mobile Telephony Operating revenue 5,245 4,094 19,052 14,672 Net customer intake (thousands) 1,146 1,281 4,017 3,261 EBITDA 1,009 693 3,856 3,630 • Strong position in Mobile. Mobile Revenues in Q4 inc
Slide 6: Tele2's Share of Net Adds in Russia (%)
TELE2s SHARE OF NET ADDS IN RUSSIA (%) 9% 14% 10% 19% Source: ACM • Record net intake of 933,000 customers • Revenue improved by 161 % to SEK 988 million • Despite record high customer intake, EBITDA margin at 27 % in Q4
Slide 7: Strong Push in Broadband Resale, Direct Access and LLUB
STRONG PUSH IN BROADBAND RESALE, DIRECT ACCESS AND LLUB SEK MILLION 2006 2005 2006 2005 Q4 Q4 Full Year Full Year Broadband resale, DA/LLUB Operating revenue 2,102 1,492 7,290 3,577 Net customer intake (thousands) 253 98 682 716 EBITDA -284 -173 -1,086 -390 • Fourth quarter added a total of 253,000
Slide 8: Rate of Decline in the Customer Base Is Slowing
RATE OF DECLINE IN THE CUSTOMER BASE IS SLOWING SEK MILLION 2006 2005 2006 2005 Q4 Q4 Full Year Full Year Fixed telephony resale Operating revenue 5,080 6,657 21,787 25,207 Net customer intake (thousands) -446 -174 -1,917 99 EBITDA 636 703 2,401 2,111 • Fixed line resale revenue down 1 %, which repr
Slide 9: Q4 2006 Summarized
Q4 2006 SUMMERIZED • Excellent development in Mobile Telephony, with a revenue growth of 28 % in Q4 • Strong learning curve in Broadband/Direct Access with net adds of 253,000 • Churn management in Fixed Line TELE2: CONTINUED OPERATIONS Telephony leading to a more stable decline in the customer base
Slide 10: Financial Comments on 2007
FINANCIAL COMMENTS ON 2007 • Our previous outlook for 2007 remains unchanged: “We expect significantly higher EBITDA and higher organic growth compared to 2006”
Slide 11: Q4 Financial Report – Lars Torstensson
Q4 2 00 6 L R E P O RT FI NA N C I A Lars Torstensson Investor Relations Director
Slide 12: Financial Overview for Q4 2006 – Continuing Operations
FINANCIAL OVERVIEW FOR Q4 2006 – CONTINUING OPERATIONS Q4 2006 Difference to Q4 2005 Revenues (MSEK) 12,952 317 3% EBITDA (MSEK)* 1,466 51 CAPEX (MSEK) 1,422 -19 Customer Net Additions 953 -252 (thousands) *Incl. one-off items
Slide 13: Financial Overview for Q4 2006 – Discontinued Operations
FINANCIAL OVERVIEW FOR Q4 2006 – DISCONTINUED OPERATIONS Q4 2006 Difference to Q4 2005 Revenues (MSEK) 995 -310 -24% EBITDA (MSEK) -1 -188 CAPEX (MSEK) 60 46 Customer Net Additions -201 -153 (thousands) • Negative EBITDA because of marketing efforts in broadband • Customer loss in fixed line telepho
Slide 14: Operating Revenue per Segment
OPERATING REVENUE PER SEGMENT (MSEK) MOBILE FIXED TELEPHONY RESALE (MSEK) 6 000 8 000 4 500 6 000 3 000 4 000 1 500 2 000 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 BROADBAND RESALE DIRECT ACCESS & LLUB (MSEK) (MSEK) 800 1 800 1 600 700 1 400 600 1 200 500 1 000 400 800 300 600 200 400 100 20
Slide 15: ARPU per Segment/Group
ARPU PER SEGMENT/GROUP (SEK) Q4 2006 Q4 2005 Mobile 114 124 Fixed telephony 139 151 Broadband resale 225 264 Direct access & LLUB 591 662 (SEK) Q4 2006 Q4 2005 Group 142 153 • ARPU slightly down at 142 (153) • Dilution from high growth in low ARPU regions, particularly Russia, offset by increased in
Slide 16: EBITDA and Net Intake per Segment
EBITDA AND NET INTAKE PER SEGMENT (MSEK) MOBILE ('000) (MSEK) FIXED TELEPHONY RESALE ('000) 1 600 1 000 600 1 200 1 400 400 800 200 1 000 1 200 0 800 1 000 600 -200 800 600 -400 600 400 400 -600 400 200 -800 200 200 -1 000 0 0 0 -1 200 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 EBITDA Net intake
Slide 17: P&L Impact from Broadband Growth
P&L IMPACT FROM BROADBAND GROWTH Q4 2006 Q3 2006 Q2 2006 P&L impact from Broadband growth (MSEK) 335 250 300 NET INTAKE Broadband resale (’000) 42 39 72 Direct access and LLUB (’000) 211 113 57 ACQUISITION COST Broadband resale (SEK) 1,450 2,050 1,500 Direct access and LLUB (SEK) 1,300 1,500 3,600
Slide 18: Mobile Sales +28 %
MOBILE SALES +28 % MOBILE (MSEK) MOBILE ('000) (MSEK) 1 600 6 000 1 200 1 400 1 000 1 200 4 500 800 1 000 3 000 800 600 600 400 1 500 400 200 200 0 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 EBITDA Net intake 2006 Q1 Sales EBITDA IMPACT FROM FRANCE & CROATIA: -317 MSEK in Q4 2006 -19 MSEK com
Slide 19: Russia Sales +161 %
RUSSIA SALES +161 % Russia Mobile Russia Mobile (MSEK) (MSEK) ('000) 1 200 300 1 200 250 1 000 1 000 200 800 800 150 600 600 100 400 400 50 200 0 200 0 -50 0 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 Sales EBITDA Net intake • Net intake of 933,000 customers to a total of 6,453,000 customers • AR
Slide 20: Baltic & Croatia Mobile Sales +15 %
BALTIC & CROATIA MOBILE SALES +15 % Baltic & Croatia Baltic & Croatia (MSEK) Mobile (MSEK) Mobile ('000) 1 200 400 350 350 300 1 000 300 250 250 800 200 200 150 600 150 100 100 400 50 50 0 0 200 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 Sales EBITDA Net intake Mobile roll-out in Croatia - 114 MS
Slide 21: Sweden Mobile Sales +1 %
SWEDEN MOBILE SALES +1 % Sweden Mobile Sweden Mobile (MSEK) (MSEK) ('000) 1 000 80 2 000 60 800 40 1 500 600 20 1 000 0 400 -20 500 200 -40 0 -60 0 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 Sales EBITDA Net intake • EBITDA-margin effected by higher marketing costs in Q4 • More than 40 000 post-p
Slide 22: Nordic excl. Sweden Mobile Sales +30 %
NORDIC EXCL. SWEDEN MOBILE SALES +30 % Nordic excl. Sweden - Mobile Nordic excl. Sweden - Mobile (MSEK) (MSEK) ('000) 800 80 100 60 80 600 60 40 40 400 20 20 0 200 Q3 Q4 Q1 Q2 Q3 Q4 0 -20 2006 -20 0 -40 -40 Q3 Q4 Q1 Q2 Q3 Q4 2006 -60 -60 Sales EBITDA Net intake Adjusted for Tele2/Telenor MVNO accoun
Slide 23: Southern Europe Mobile Sales
SOUTHERN EUROPE MOBILE SALES Southern Europe - Mobile Southern Europe - Mobile (MSEK) (MSEK) ('000) 50 120 350 300 0 100 250 -50 80 200 -100 60 150 -150 40 100 -200 20 50 0 -250 0 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 Sales EBITDA Net intake • More than 400,000 MVNO customers in France vs. 3
Slide 24: UK & Benelux Mobile Sales -1 %
UK & BENELUX MOBILE SALES -1 % UK & Benelux - Mobile UK & Benelux - Mobile (MSEK) (MSEK) ('000) 600 140 50 40 500 110 30 400 80 20 300 10 50 0 200 -10 20 100 -20 0 -10 -30 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 2006 2006 Sales EBITDA Net intake
Slide 25: Net Debt
NET DEBT (MSEK) Net debt 18 000 3,6 3,2 15 000 2,8 12 000 2,4 2,0 9 000 1,6 6 000 1,2 0,8 3 000 0,4 0 0,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 Net Debt Net Debt to EBITDA • Q4 2006 excludes proceeds from divested operations in France, which will have a Net Debt effect of 3,3 billion SEK
Slide 26: Do Not Forget
DO NOT FORGET Contacts Visit www.tele2.com Lars-Johan Jarnheimer Telephone: + 46 (0)8 562 640 00 • Conference call today President and CEO, Tele2 AB at 16.00 CET Web-cast at Lars Torstensson www.tele2.com Telephone: + 46 (0) 702 73 48 79 IR Director, Tele2 AB • Q1 2007: 25 April 2007