Slide 1: Tele2 Q3 2007
Tele2 Q3 2007 24 October 2007 Lars-Johan Jarnheimer President & CEO
Slide 2: Q3 2007 Summary
Q3 2007 Summary SEK million Q3-07 Q3-06 Growth % Continuing operations Operating revenue 10,909 11,014 -1.0 EBITDA 1,844 1,700 +8.5 EBIT 609 -2,061 n.m. • Revenue growth, on a comparable basis (excluding divested and acquired entities), was 7 % vs Q3 2006 • EBITDA, on a comparable basis, improved by
Slide 3: Q3 2007 Summary
Q3 2007 Summary • Strong performance in core mobile operations across the group • Active execution of realigment process July to date – Divestments of Hungary, Irkutsk, Belgium and 3C – Acquisition of Telecom Eurasia in Krasnodar (Russia) – Divestment of operations in Italy & Spain and Austrian MVNO
Slide 4: Mobile Telephony
Mobile Telephony Mobile revenue growth 17%, EBITDA up 29% y-o-y Net customer intake 865,000 Sweden: net customer intake of 100,000 Network MVNO Russia: net intake of 647,000 – Revenue growth 62% – Maintained EBITDA margin of 33% Baltic & Croatia: Continued double-digit growth in all countries Norway
Slide 5: Mobile Telephony – Sweden
Mobile Telephony – Sweden Strong take-off of mobile broadband services – 45,000 mobile broadband customers in Sweden at end-Q3 – Further acceleration expected in Q4 2007 Mobile Broadband Customers 40 000 30 000 20 000 10 000 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
Slide 6: Mobile Data – Sweden
Mobile Data – Sweden 3G and content services picking up, 3G Number of SMS increased 230% in data (MB) up >650% in 9 months 12 months, and 340% in 24 months – However, from a low level 3G Data* SMS* jan-07 feb-07 mar-07 apr-07 maj-07 jun-07 jul-07 aug-07 sep-07 * MB monthly * Weekly, customers paying
Slide 7: Broadband
Broadband Direct Access & LLUB sales growth 12% DA & LLUB net intake 77,000 in Q3; resold broadband -10,000 Network – Migration of resold customers onto DA & Resold LLUB particularly in Norway, Sweden and Austria Continued demanding situation in Germany – we are monitoring our business plan Several
Slide 8: Fixed Telephony
Fixed Telephony EBITDA margin stable at 13% Fixed telephony revenue continues as expected to decline Customer net loss 441,000 – But increased market share in Sweden and Norway Revenue and profitability in Poland positively affected by wholesale line rental Fixed-to-mobile trend particularly visible
Slide 9: Corporate Segment
Corporate Segment • Corporate market generates app. 18% of group revenue • Increased internal focus on corporate market, mainly SME – Visible corporate position in Sweden, Netherlands and Austria • Growing market opportunities for SME in Baltic and Russia
Slide 10: A Company in Change
A Company in Change Geographic Realignment The New Tele2 Expansion of Tele2 of Tele2 1997-2005 2007 2008- • Present in 25 • Present in 15 • Smaller geographic countries countries footprint • Mobile in 9 • Mobile in 8 • Focused operations countries countries - mobile and broadband • MVNO in 6 • MVNO
Slide 11: Beyond the Realignment Process
Beyond the Realignment Process • Organic growth and strategic acquisitions – Infrastructure investments where it generates superior returns Dec Oct 2007 2006 • Develop core businesses to stay best in class • Increased management focus on core areas • Improved margins and cash flow, focus on ROCE
Slide 12: Tele2 Q3 2007
Tele2 Q3 2007 24 October 2007 Lars Nilsson CFO
Slide 13: Financial Overview Q3 2007 - Continued Operations
Financial Overview Q3 2007 - Continued Operations (All figures in MSEK) Q3 2007 Q3 2006 YTD 2007 YTD 2006 Revenues 10,909 11,014 32,967 31,946 EBITDA 1,844 1,700 5,147 4,263 EBITDA % 16.9 15.4 15.6 13.3 Depreciation 1,222 * -879 -3,083 * -2,541 Write-down of goodwill -1,310 -2,457 -1,310 -2,457 Sale
Slide 14: Clean EBIT Q3 2007
Clean EBIT Q3 2007 (MSEK) 2500 2000 284 Corresponding to a 1500 -1352 7.8% EBIT-margin 1310 1000 500 851 609 0 IT IT . s op ill* em EB EB dw of st d N rte sy oo le EA sa T- G po CL tI of fit Re en ro t en tP irm irm Ne pa pa Im Im *Germany (570), Austria (290), Belgium (275), Netherlands (175)
Slide 15: Clean EBIT Y-t-d 2007
Clean EBIT Y-t-d 2007 (MSEK) 3500 3000 284 Corresponding to a 2500 -827 6,6% EBIT-margin 2000 1310 1500 1000 2174 1407 500 0 s . IT IT ill* op em EB EB dw of st N oo d sy le te EA fG T- sa or CL tI ep to it en of R en Pr irm irm et pa pa N Im Im *Germany (570), Austria (290), Belgium (275), Netherla
Slide 16: Cash Flow
Cash Flow (All figures in MSEK) Q3 2007 Q3 2006 YTD 2007 YTD 2006 CF from operations 1,208 1,511 3,149 3,931 Change in WC 615 67 229 -680 Cash Flow from operating activities 1,823 1,578 3,251 CAPEX -1,188 -1,420 -4,098 Acquisition/sale of shares 5,478 -1,181 -1,266 Change in long-term receivables -3
Slide 17: Cash Flow Effects from Realignment Process until Q3 2007
Cash Flow Effects from Realignment Process until Q3 2007 (All figures in MSEK) 1 Jan-30 Sep 2007 Tele2 Portugal 122 Tele2 Irkutsk, Russia 1,570 Tele2 France 2,937 Tele2 Denmark 752 Other 45 Total Cash Flow effect until Q3 2007 5,426
Slide 18: Cash Flow Effects from Realignment Process after Q3 2007
Cash Flow Effects from Realignment Process after Q3 2007 (All figures in MSEK) Announced Tele2 Italy / Spain 7,100 Tele2 Belgium 890 Tele2 Hungary 40 Tele2 Austria MVNO 65 Telecom Eurasia -160 Total Cash Flow effect after Q3 2007 7,935
Slide 19: Net Debt to EBITDA
Net Debt to EBITDA Net Debt and Net Debt/EBITDA 20000 3,0 18000 2,5 16000 14000 2,0 12000 MSEK 7,935 from disposals 10000 1,5 8000 1,0 6000 4000 0,5 2000 0 0,0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
Slide 20: Net Intake by Segment
Net Intake by Segment ('000) 1 400 1 200 1 000 800 600 400 200 0 -200 -400 -600 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
Slide 21: Revenue by Segment
Revenue by Segment (MSEK) 12 000 10 000 8 000 6 000 4 000 2 000 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
Slide 22: EBITDA by Segment
EBITDA by Segment (MSEK) 2 000 1 500 1 000 500 0 -500 -1 000 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
Slide 23: EBIT* by Segment
EBIT* by Segment (MSEK) 2 000 1 500 1 000 500 0 -500 -1 000 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB) * Excl. non-recurring items
Slide 24: Russia
Russia (MSEK) Sales 1400 (MSEK) EBITDA vs Net Intake '000 1400 1000 1200 900 1200 1000 800 1000 700 800 600 800 500 600 600 400 400 400 300 200 200 200 100 0 0 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Revenue growth 62% year-on-year EBITDA margin 33% 8 million cu
Slide 25: Sweden Mobile
Sweden Mobile (MSEK) Sales EBITDA vs Net Intake (MSEK) '000 2000 2000 120 1500 100 1500 80 1000 1000 60 40 500 500 20 0 0 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Growth 9% year-on-year Strong net intake affected EBITDA margin slightly in Q3
Slide 26: Baltic
Baltic (MSEK) Sales (MSEK) EBITDA vs Net Intake '000 1200 1200 120 1000 1000 100 800 800 80 600 600 60 400 400 40 200 200 20 0 0 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Growth 14% year-on-year Continuing strong net intake EBITDA margin 38%
Slide 27: Questions?
Questions?
Slide 28: Investor Relations: Visit www.tele2.com
Investor Relations: Lars Torstensson Telephone: + 46 (0) 702 73 48 79 Lena Krauss Telephone:+46 (0)8 562 000 45 Visit www.tele2.com • Q4 2007: 12 Februar 2008