Tele2 Ab Class A · OMXSTO:TEL2_A
Tele2 Ab Class A — Merger or Acquisition (January 2018)
28 slides from Tele2 Ab Class A's merger presentation, Jan 11, 2018
Slide 1: Important information
Important information For the purposes of this disclaimer, "this presentation" means these slides, their contents or any part of them, any oral presentation, any question and answer session and any written or oral materials discussed or distributed during the presentation meeting. This presentation
Slide 2: Today's presenters
Today's presenters Allison Kirkby President and CEO of Tele2 Lars Nordmark CFO of Tele2 Anders Nilsson CEO of Com Hem
Slide 3: Creating a leading integrated connectivity provider
TELE2 COM HEM Creating a leading integrated connectivity provider
Slide 4: Tele2 Com Hem: summary of the combination
Tele2 Com Hem: summary of the combination Structure The combination will be implemented by way of a statutory merger whereby Com Hem will be merged into Tele2 Com Hem's shareholders will receive as merger consideration SEK 37.02 in cash plus 1.0374x new B shares in Tele2 to be issued for each share
Slide 5: Tele2 Com Hem: strategic rationale
Tele2 Com Hem: strategic rationale 1 Combination of two highly complementary businesses Creating a leading integrated operator in Sweden by combining an award-winning mobile network with the fastest national fixed network and the widest range of content in the market Mobile and fixed broadband #2 an
Slide 6: Com Hem is a highly attractive Swedish asset
1 Com Hem is a highly attractive Swedish asset Solid financial track record with outstanding cash flow generation SEKbn 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2013 2014 2015 2016 Q3 2017 LTM 90% 75% 60% 45% 30% 15% 0% Underlying EBITDA (LHS) OCF (LHS)(2) Cash conversion (RHS)(3) Underlying EBITDA CAGR(1) 7.6%
Slide 7: Sweden at the core of Tele2's Baltic Sea Challenger position
1 Sweden at the core of Tele2's Baltic Sea Challenger position Solid financial track record with superior cash flow generation SEKbn 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2013 2014 2015 2016 Q3 2017 LTM 0% 15% 30% 45% 60% 75% 90% EBITDA CAGR(1) 72% 83% 80% 77% 81% 5.9% 3.4 3.6 3.8 3.8 4.3 2.5 3.0 3.1 2.9 3.4
Slide 8: Creating a leading integrated connectivity provider in Sweden
1 Creating a leading integrated connectivity provider in Sweden Key financial metrics Sweden, SEKbn LTM(1) TELE2 SEKbn Net sales 15.7 EBITDA 4.3 OCF(2) 3.4 COM HEM SEKbn Net sales 7.1 Underlying EBITDA 2.9 OCF(2) 1.8 TELE2 COM HEM SEKbn Net sales 22.8 EBITDA 7.2 OCF(2) 5.2 Revenue split Sweden, LTM(
Slide 9: Enabling a superior customer offering meeting the demands of tomorrow
2 Enabling a superior customer offering meeting the demands of tomorrow Ubiquitous high-quality connectivity Call and surf abroad Connect the home Remotely manage the home Connect gadgets Connect the car Watch digital TV at home or when on the move Watch OTT on my TV at home or when on the move Game
Slide 10: Well-positioned to act as a customer champion in an integrated world
2 Well-positioned to act as a customer champion in an integrated world Service area Market share Sweden(1) Market position(1) At a glance # of customers /RGUs(3) Mobile 28% #2 Award-winning network 99.9% 4G population coverage 5G network agreement in place 3.9m Fixed broadband 22% #2 Powerful broadb
Slide 11: Strengthening and diversification of the Swedish operations
3 Strengthening and diversification of the Swedish operations Creating a strong #2 integrated operator in Sweden Revenue split Sweden(1) (LTM(2), SEKbn) Telia 36.8 Tele 2 COM HEM 22.8 Telenor 12.8 3 7.6 Mobile Fixed connectivity Other EBITDA Sweden (LTM(2), SEKbn) Telia 13.9 Tele 2 COM HEM 7.2(3) Te
Slide 12: Unlocking meaningful value from synergies
4 Unlocking meaningful value from synergies Key categories Description Run-rate (SEK million)(1) Opex and capex synergies Estimated opex synergies arising primarily from network, IT and infrastructure efficiencies, optimization of customer care, sales and marketing as well as management and administ
Slide 13: Enhanced cash flow characteristics
5 Enhanced cash flow characteristics Combination of very stable and cash generative assets EBITDA over time in Sweden (SEKbn) 33% 34% 35% 34% 31% 6.6% 5.6 5.9 6.2 6.4 7.2 2.2 2.3 2.3 2.5 2.9 3.4 3.6 3.8 3.8 4.3 2013 2014 2015 2016 Q3 2017 LTM CAGR(2) EBITDA Tele2 Sweden Underlying EBITDA Com Hem Com
Slide 14: Combination with superior cash conversion compared to peers
5 Combination with superior cash conversion compared to peers Cash conversion over time in Sweden(1) 72% 83% 80% 77% 81% TELE2 64% 72% 71% 72% 73% TELE2 COM HEM 52% 54% 58% 65% 61% COM HEM 58% 57% 64% 56% 55% telenor 70% 66% 57% 51% 52% Telia 61% 67% 51% 55% 3 2013 2014 2015 2016 Q3 2017 LTM Tele2 S
Slide 15: Maintained financial strength and flexibility
5 Maintained financial strength and flexibility Comments Preliminary combined economic net debt at 30 September 2017 of SEK 25.5 billion 2.8x combined EBITDA LTM, as of Q3 2017, post deconsolidation of Tele2 Netherlands and Austria Committed to a credit profile consistent with an investment grade cr
Slide 16: Preliminary financial targets and shareholder remuneration framework
5 Preliminary financial targets and shareholder remuneration framework Financial target framework The Board of Directors of Tele2, together with Tele2 management, have considered appropriate financial targets for Enlarged Tele2 and agreed on the below framework Subsequent to the completion of the me
Slide 17: Preliminary financial targets and shareholder remuneration framework
Cs] Preliminary financial targets and shareholder remuneration framework Financial target framework Shareholder remuneration Capital structure ‘The Board of Directors of Tele2, together with Tele2 management, have considered appropriate financial targets for Enlarged Tele2 and agreed on the below fr
Slide 18: Transaction overview
Transaction overview Com Hem shareholders to receive SEK 37.02 and 1.0374x newly issued Tele2 B shares for each Com Hem share Merger consideration For each Com Hem share 37.02 SEK in cash + 1.0374x B shares in Tele2 Ownership structure in merged company Tele2 shareholders (Economic ownership) Com He
Slide 19: Illustrative post transaction shareholder structure
Illustrative post transaction shareholder structure Top 5 shareholders in the combined company Shareholder % Capital % Votes Kinnevik 27.3% 41.9% Norges Bank 2.9% 2.3% MFS Investment Management 2.9% 2.2% Nordea Fonder 2.4% 1.9% Capital Group 2.3% 1.8% Top 5 shareholders 37.8% 50.0% Other shareholder
Slide 20: Governance
Governance Chairman of the Board Georgi Ganev, proposed new Chairman of Tele2 will chair the BoD of Enlarged Tele2 Board representation Andrew Barron and at least one additional Com Hem Board Director will join the Board of Directors of Tele2 upon completion of the Merger CEO Anders Nilsson will bec
Slide 21: Regulatory process
Regulatory process Approvals required European Commission under the EU Merger Regulation One stop shop: no filings with national competition authorities in the EEA required Process The Parties will prepare a draft notification and enter into customary pre-notification discussions with the Commission
Slide 22: Indicative timeline
Indicative timeline January 10, 2018 The merger plan is announced and made available to the companies' shareholders H2 2018 Swedish merger document and US Form F-4 are made public EGMs in Tele2 and Com Hem The Swedish Companies Registrations Office registers the Merger (subject to approval by the re
Slide 23: Better together
Better together TELE2 COM HEM Creating a strong integrated connectivity provider in Sweden Highly complementary businesses enabling a superior customer offering and greater scale Value accretive to all shareholders Supported by main shareholder
Slide 24: Better together
Better together TELE comyem tivity prov
Slide 25: Appendix
APPENDIX
Slide 26: Preliminary combined key figures
Preliminary combined key figures SEK million, unless otherwise noted 1 Jan - 30 Sep 2017 Tele2 Com Hem Combined 1 Oct 2016 - 30 Sep 2017 Tele2 Com Hem Combined Full year 2016 Tele2 Com Hem Combined Net sales 18,382 5,331 23,713 24,722 7,111 31,833 21,190 5,665 26,855 EBITDA(1) 4,880 2,204 7,084 6,34
Slide 27: Preliminary combined key figures
Preliminary combined key figures Jan-30Sep 2017. 10ct 2016-30 Sep 2017 Fullyear 2016 |SEK million, unless otherwisenoted Net sales 18,382 5,331 23,713 2a7e2 7A 31,833 21,190 5,665 26,855 EBITDA” 4,880 2,204 7,084 6,341 2,900 9,241 5,408 2,547 7,988 EBITDA margin 26.5% 41.3% 29.9% 25.6% 408% 29.0% 25
Slide 28: Thank you
THANK