Slide 1: First Quarter 2015
FIRST QUARTER 2015 April 21st, 2015 Tele2 AB
Slide 2: Highlights from the quarter
Highlights from the quarter Value • Data monetization continues in Sweden following launch of Tele2.0. Champion • Substantial increase in GB data offer, driving increased ASPU. Focused • 4G network in the Netherlands now at 70 percent population coverage. Technology • Network swap project announced
Slide 3: Monetization of data continues
Monetization of data continues Year-on-year growth, Tele2 Group Mobile end-user service Average data usage Mobile EBITDA revenue per subscriber +10% +10% ~40% 3
Slide 4: Continuous momentum in mobile end-user service revenue
Continuous momentum in mobile end-user service revenue Year-on-year growth for mobile end-user service revenue, Tele2 Group CAGR: 6.5% 9.6% 8.7% 7.9% 8.1% 6.5% 6.5% 6.7% 6.7% 6.6% 5.7% Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 4
Slide 5: Market year-on-year development
Market year-on-year development Mobile end-user service revenue Data growth (MNO networks) Sweden: ~50% +5% Estonia: +7% KZ Germany: Kazakhstan: +12% +46% Latvia: +7% CEE KZ Netherlands: +12% CEE Lithuania: +7% Austria: +3%* SE SE Croatia: +8% Q1 14 Q1 15 5 * Total net sales
Slide 6: Tele2 Sweden
Tele2 Sweden Net sales EBITDA and EBITDA margin Strong mobile YoY development (SEK million) (SEK million) 4,000 3,000 3,021 +4% 3,130 1,200 900 825 +18% 976 90% 70% +5% Mobile end-user 50% 600 service revenue 2,000 27% 31% 30% 1,000 0 Q1 14 Q1 15 300 0 Q1 14 Q1 15 10% -10% +20% Mobile EBITDA Q1 High
Slide 7: Increasing ASPU
Increasing ASPU Top-ups continue in our customer base… …which together with ‘Big Buckets’ continue to drive ASPU growth Top-up development Tele2 Residential Intake mix (Revenue, SEK million) Tele2 Residential Postpaid (small screen) >5GB: 30% 44 40 38 27 ASPU development 20 Tele2 Residential Postpai
Slide 8: Tele2 Baltics
Tele2 Baltics Net sales EBITDA and EBITDA margin Mobile end-user service revenue (SEK million) (SEK million) (SEK million) +7% +11% +7% 350 800 719 60080% 671 300 474 231 500 415 444 447 444 250 209 600 400 60% 200 400 150 30040% 31% 32% 200 100 200 20% 50 100 0 0 00% Q1 14 Q1 15 Q1 14 Q1 15 Q1 14 Q
Slide 9: Tele2 Netherlands
Tele2 Netherlands Net sales EBITDA and EBITDA margin Mobile customers Tele2 NL (SEK million) (SEK million) (Thousands) +6% -45% 860 1,402 300 257 60% 840 1,500 1,320 250 820 50% 1,250 800 200 40% 1,000 141 780 750 150 30% 760 100 19% 740 20% 500 720 250 50 10% 10% 700 0 0 0% 680 Q1 14 Q1 15 Q1 14 Q1
Slide 10: Tele2 outdoor 4G coverage, April 1st 2015
Tele2 outdoor 4G coverage, April 1st 2015 – Transfer of existing customers onto the 4G network well underway. – Current outdoor population coverage estimated to be over 70%. – Remain on-track for nationwide outdoor population coverage by Q1 2016. 10
Slide 11: Tele2 Kazakhstan
Tele2 Kazakhstan Net sales EBITDA and EBITDA margin Customer development (SEK million) (SEK million) 180 35% +36% 160 500 700% 140 30% 399 400 600% 120 294 500% 25% 100 300 400% 80 20% 200 60 300% 40 200% 15% 100 1 0 20 100% 0 10% 0 0 0% 0% 0% Jul Aug Sep Oct Nov Dec Jan Feb Mar Q1 14 Q1 15 Q1 14 Q1
Slide 12: Financial Overview
Financial Overview TELE2
Slide 13: Financial highlights
Financial highlights Q1 2014 Q1 2015 Trend Net sales (SEK billion) 6.15 6.51 +6% Mobile end-user service revenue 2.90 3.18 +10% (SEK billion) EBITDA (SEK billion) 1.36 1.43 +5% CAPEX (SEK billion) 0.71 0.94 +32% 13
Slide 14: Mobile end-user service revenue
Mobile end-user service revenue Tele2 Group Development per market (SEK million) (SEK million) 3,300 +10% 3,200 27 3,252 3,205 3,184 3,094 99 3,205 2,904 3,184 3,000 3,100 32 29 93 2,000 3,000 2,900 2,904 1,000 2,800 0 2,700 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q1 14 Sweden Baltics Netherlands Kazahkstan R
Slide 15: EBITDA
EBITDA Tele2 Group Development per market (SEK million) (SEK million) 1,600 +5% 1,550 22 2,000 44% 151 1,800 1,682 42% 1,500 40% 1,600 1,470 38% 1,412 1,428 1,450 36% 1,362 10 1,400 34% 32% 1,428 1,200 1,400 -116 -1 30% 1,000 28% 1,412 25.5% 26% 1,350 800 24% 1,362 23.2% 22.1% 21.9% 22% 600 20.5% 1,
Slide 16: CAPEX
CAPEX Tele2 Group Development per market (SEK million) (SEK million) 1,200 +32% 1,400 1,100 29% 1,200 27% 1,000 1,030 25% 18 938 23% 53 1,000 850 861 900 142 938 21% 800 709 19% 17% 800 39 600 15.0% 15% 14.4% 13.4% 13.1% 13% 700 -23 400 709 11.5% 11% 200 9% 600 7% 0 5% 500 Q1 14 Q2 14 Q3 14 Q4 14 Q1
Slide 17: Free cash flow
Free cash flow Total operations Tele2 Group Development (SEK million) (SEK million) +83% 600 44% 475 42% 400 40% 38% 274 36% 238 200 34% 32% Working 30% Q1 14 EBITDA Financing Taxes capital CAPEX Q1 15 0 28% 0 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 26% 77 -96 -100 480 -96 24% -200 -200 22% 20% -300 18% -400
Slide 18: Debt position and ratio
Debt position and ratio Pro forma net debt / EBITDA 12 m rolling SEK billion / Ratio 15.0 2.00 1.75 12.5 1.50 10.0 0.0 0.0 6.6 1.25 0.0 7.5 8.3 7.9 1.00 7.9 6.8 0.75 5.0 0.50 2.5 3.3 0.25 0.0 0.00 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Pro forma net debt Dividend, proposed Pro forma net debt t
Slide 19: The Challenger Program
The Challenger Program Ramp-up of indicative* costs and Productivity improvement: 1 BSEK (5%) benefits over 4 years *Indicative program benefits and costs. Analysis phase will identify and validate total 19 Opex, Capex and Revenue benefits. Baseline: Forecast FY 2014
Slide 20: Momentum is building up
Momentum is building up We will come back to the market with more details at Q2 reporting on July 21st 2015. From then on we will report on progress quarterly until full benefits have been realized 2014 2015 2016 2017 2018 Investment phase Benefits phase Q1 Q2 20
Slide 21: Q1 2015 Summary
Q1 2015 Summary TELE2
Slide 22: Q1 2015 in short and key priorities moving forward
Q1 2015 in short and key priorities moving forward - Continued data monetization - Getting ready for 4G launch in Netherlands and Baltics - Executing on the Challenger Program Focused Value Step-Change Winning People Technology Champion Productivity & Culture Choices 22
Slide 23: 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 focus How we win Europe and Focused Winning Mobile access is Residential and Value Step-Change Eurasia are ou
Slide 24: The End
THE END