Tele2 Ab Class A · OMXSTO:TEL2_A

Tele2 Ab Class A — Q1 2017 Earnings Presentation

28 slides from Tele2 Ab Class A's earnings presentation, Apr 24, 2017

  1. Slide 1: First Quarter 2017

    FIRST QUARTER 2017 April 24, 2017 Tele2 AB

  2. Slide 2: Group highlights – Q1 2017

    Group highlights – Q1 2017 % Change % Change SEK billion Q1 2017 Reported LFL Mobile end-user service revenue 3.7 +19% +10% Net sales 7.9 +22% +3% EBITDA 1.7 +41% +28% 2 LFL is constant currencies and pro forma for Altel and TDC Sweden

  3. Slide 3: Tele2's Way2Win

    Tele2’s Way2Win Our Purpose We fearlessly liberate people to live a more connected life Where We Play How We Win Baltic Sea Investment IoT Cash Positively Connecting Digital First Challenger Challenger Markets Generators Fearless Things our Customer Cost Brands Customers Experience Structure Love Re

  4. Slide 4: Delivering on our long term strategy

    Delivering on our long term strategy • Sweden mobile end-user service revenue up 5% and Baltics up 12% Baltic Sea • Sweden EBITDA up 10% and Baltics up 16% Challenger • Operating cash flow grew by 16% in Sweden and Baltics • Netherlands mobile end-user service revenue up 40% Investment • Dutch data

  5. Slide 5: Baltic Sea Challenger

    Baltic Sea Challenger TELE2

  6. Slide 6: Sweden – Financials

    Sweden – Financials Net sales, LFL Mobile end-user service EBITDA and EBITDA margin, (SEK million) revenue, LFL (SEK million) LFL (SEK million) 0% +5% +10% 50% 4 332 1 191 3 935 3 877 3 900 3 932 1 831 1 865 1 969 1 959 1 922 1 091 45% 1 200 993 1 045 4 029 927 40% TDC 1 885 1 928 1 068 1 758 1 778

  7. Slide 7: Sweden Consumer – Momentum continues

    Sweden Consumer – Momentum continues Consumer mobile end-user Share of postpaid sales with Customer satisfaction service revenue bundle >3GB (Tele2 Media & Insight) +5% 87% 86% 84% 78% 69% 51% Q1 16 Q1 17 Q1 16 Q1 17 Q1 16 Q1 17 Tele2 Comviq Q1 Highlights – Consumer mobile end-user service revenue u

  8. Slide 8: Sweden B2B – Synergies materializing

    Sweden B2B – Synergies materializing B2B net sales, LFL B2B Large net sales, LFL Integration synergies (SEK million) (SEK million) +1% +3% SEK 19 million 0 Q1 16 Q1 17 Q1 16 Q1 17 Q1 17 Q1 Highlights – B2B sales stable in both Tele2 Business segment and former TDC Sweden – B2B Large net sales up due

  9. Slide 9: Baltics – Financials

    Baltics – Financials Net sales Mobile end-user service EBITDA and EBITDA margin (SEK million) revenue (SEK million) (SEK million) +12% +12% +16% 884 935 533 1 000 859 600 521 522 350 287 286 60% 900 770 787 468 477 264 800 500 300 246 256 50% 700 250 400 40% 600 200 500 300 32% 33% 32% 33% 30% 400 1

  10. Slide 10: Baltics – Data monetization continues

    Baltics – Data monetization continues ASPU development Share of 4G capable MBB end-user service revenue smartphones in base +9% +52% 39% 24% Q1 16 Q1 17 Q1 16 Q1 17 Q1 16 Q1 17 Q1 Highlights – Strong ASPU growth driven by increasing postpaid share and migration to larger buckets – Continued strong i

  11. Slide 11: Investment Markets

    Investment Markets TELE2

  12. Slide 12: Netherlands – Financials

    Netherlands – Financials Net sales Mobile end-user service EBITDA (SEK million) revenue (SEK million) (SEK million) +9% +40% 587% 1 800 1 583 1 577 500 438 451 1 600 1 441 1 452 1 478 450 419 400 336 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 1 400 350 322 1 200 200 1 000 300 151 250 150 800 200 600 100 150 400

  13. Slide 13: Netherlands – Momentum despite pressure

    Netherlands – Momentum despite pressure Spontaneous brand awareness Share of total new postpaid Usage on own network & brand consideration (Memo2) (GfK) 87% 20% 52% 17% 57% 41% 42% 40% 34% 0% Q1 16 Q1 17 Feb 16 Feb 17 Mar 16 Mar 17 Awareness Consideration Voice Data Q1 Highlights – Maintaining a dec

  14. Slide 14: Kazakhstan – Financials

    Kazakhstan – Financials Net sales, LFL Mobile end-user service EBITDA and EBITDA margin, LFL (SEK million) revenue, LFL (SEK million) (SEK million) +14% +14% +713% 800 734 600 170 19% 20% 639 649 474 488 495 14% 13% 700 569 600 500 433 449 8% 122 10% 600 3% 500 400 120 89 97 0% -10% 400 300 300 70 5

  15. Slide 15: Kazakhstan – Continued strong performance

    Kazakhstan – Continued strong performance Customer base, LFL ASPU development, LFL Integration (thousands) +3% +9% 6 298 6 514 ~630 sites merged Q1 16 Q1 17 Q1 16 Q1 17 Q1 Highlights – Customer base continues to grow year-on-year – Strong ASPU driven by continued focus on improving data monetization

  16. Slide 16: Challenger program on track

    Challenger program on track Baseline 2016 actual 2018 target Key progress areas since inception Simplify % of products harmonized 30% 40% 60%  New revenue streams on shared platforms  Sales & marketing efficiency Discipline % of spend strategically 40% 75% 80%  Network & IT consolidation sourced

  17. Slide 17: Financial Overview

    Financial Overview TELE2

  18. Slide 18: Mobile end-user service revenue

    Mobile end-user service revenue Tele2 Group Development per market (SEK million) (SEK million) +19% 19 3 725 230 0 3 711 3 725 3 598 129 3 307 54 3 129 164 3 129 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q1 16 Sweden Baltics NL KZ RoW Oth Q1 17 18

  19. Slide 19: EBITDA

    EBITDA Tele2 Group Development per market (SEK million) (SEK million) +41% 1 900 116 3 1 723 1 700 182 1900 1 723 60,0% -41 1700 1 562 1 500 40 1 459 50,0% 197 1500 1300 1 226 40,0% 1 300 1 226 1100 1 087 30,0% 1 100 900 700 22,4% 21,9% 900 19,0% 20,0% 16,3% 17,8% 500 10,0% 700 300 100 0,0% 500 Q1 1

  20. Slide 20: CAPEX

    CAPEX Tele2 Group Development per market (SEK million) (SEK million) -46% 1400 60,0% 1 400 1200 1 154 1 200 1 154 1 078 50,0% 1000 1 000 -79 820 40,0% 779 -136 800 800 50 627 30,0% 627 600 600 -288 -47 -27 20,0% 400 17,9% 400 12,3% 11,2% 13,1% 10,0% 200 8,0% 200 0 0,0% 0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 1

  21. Slide 21: Free cash flow

    Free cash flow Total operations Tele2 Group Development (SEK million) (SEK million) +216% Working One-off Q1 16 EBITDA Interest etc Taxes capital CAPEX items Q1 17 900 838 600 500 700 400 41 497 500 394 300 -39 260 300 200 178 178 139 100 -70 100 Q1 16 Q1 16 0 Q3 15 Q2 16 Q3 16 Q4 16 Q1 17 -100 -100

  22. Slide 22: Operating cash flow

    Operating cash flow EBITDA less CAPEX 12 m rolling, SEK million 3 871 3 491 3 456 3 423 3 470 3 335 3 402 3 432 3 437 -1 178 -1 504 -1 344 -1 625 -1 940 -1 934 -2 223 -2 282 -2 196 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Baltic Sea Challenger & Rest of Group Investment Markets 22

  23. Slide 23: Debt position and financial leverage

    Debt position and financial leverage Economic net debt to EBITDA 12 m rolling SEK billion Leverage 2,5 12,5 2,6 2,6 2,0 10,0 1,88 1,75 1,5 7,5 11,7 11,0 10,4 1,0 5,0 10,3 9,4 2,5 0,5 0,0 0,0 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Mar 2017 Economic net debt Dividend, announced Economic net debt to EBITD

  24. Slide 24: Financial guidance 2017 - Reconfirmed

    Financial guidance 2017 - Reconfirmed Mobile end-user Mid-single digit service revenue % growth* Net sales (SEK billion) 31 – 32 EBITDA (SEK billion) 5.9 – 6.2 CAPEX (SEK billion) 3.8 – 4.1 24 * Based on LFL which is constant currencies and pro forma for Altel and TDC Sweden

  25. Slide 25: Summary

    Summary TELE2

  26. Slide 26: Key priorities moving forward

    Key priorities moving forward  Become the customer champion of connectivity  Growth from continued data monetization, despite RLAH  Sustain momentum in Sweden and Baltics  Further leverage our challenger strategy in Netherlands and Kazakhstan  Execute on Challenger and synergy programs Positive

  27. Slide 27: Tele2's Way2Win

    Tele2’s Way2Win Our Purpose We fearlessly liberate people to live a more connected life Where We Play How We Win Baltic Sea Investment IoT Cash Positively Connecting Digital First Challenger Challenger Markets Generators Fearless Things our Customer Cost Brands Customers Experience Structure Love Re

  28. Slide 28: The End

    THE END

Tele2 — Q1 2017 Earnings Presentation on 6ix