Slide 1: First Quarter 2014
FIRST QUARTER 2014 25" of April 2014 Tele2 AB TELE
Slide 2: Q1 2014 in brief
Q1 2014 in brief TELE2
Slide 3: Q1 Financial Highlights
Net sales EBITDA EBITDA margin CAPEX (SEK billion) (SEK billion) (percent) (SEK billion) 7.11 1.38 19 0.96 (7.30*) (1.49*) (20*) (2.12*) Q1 Financial Highlights – Group financial performance in line with 2014 guidance – Mobile end-user service revenue growth of 3.0% for the Group – Group Mobile Net
Slide 4: Mobile end-user service revenue by country
Sweden Norway (SEK million) (SEK million) 1,662 1,746 1,767 1,775 1,716 775 774 761 718 696 Tele2 Group (SEK million) 3.0% 3,674 3,769 3,724 3,600 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 3,496 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Netherlands Kazakhstan (SEK million) (SEK million) 259 261 273 240 251 227 223 216 197
Slide 5: Network roll-out and strategic review highlights
Decision made to build out the 2G/4G network during 2014-2016 and thereby increase the geographical coverage from today’s 70% to 90% Network roll-out achieving important milestones Initiated strategic review following the auction process First EBITDA-positive quarter since commercial launch and Net
Slide 6: Country Performance
Country Performance TELE2
Slide 7: Sweden
Net sales EBITDA Tele2 Sweden has the best 4G (SEK million) (SEK million) network in the world* -1.9% 3,080 3,139 3,078 3,156 3,021 834 856 900 858 825 93 91 90 86 85 85 Time on LTE (%) 77 29% 27% 27% 27% 27% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Mobile Fixed broadband Mobile F
Slide 8: Netherlands
Net sales EBITDA Quarterly Net adds* (SEK million) (SEK million) (x1000) -0.8% 674 100 1,331 1,349 1,383 1,372 1,320 317 321 342 271 257 0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 24% 24% 25% 19% -100 20% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 -200 -701 Mobile Fixed broadband Mobile Fixed
Slide 9: Norway
Net sales EBITDA One Call customer growth (SEK million) (SEK million) development -9% 423,000 55 1,050 1,052 1,029 39 44 983 956 22 5% 4% 4% 2% -2% -17 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Mobile Fixed telephony Other Mobile Fixed telephony Other EBITDA Margin Q1 Highlights –
Slide 10: Kazakhstan
Net sales EBITDA Net intake (SEK million) (SEK million) (thousands) 1.7% 357 365 309 333 252 289 294 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 1 0% 20 -10% -2% -16% -16% -7 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 -34 -14 -45 -52 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Mobile Mobile EBITDA Margin -393 Q1 Highlights – Steadily growi
Slide 11: Croatia and Lithuania
Croatia Net sales Croatia EBITDA Croatia Q1 Highlights (SEK million) (SEK million) 372 396 48 – Net intake of 6,000 customers, still 333 296 299 growing despite a declining market 22 22 25 – Revenue market share above 20% 13% – Won the Best Buy Award 2014, 3 7% 6% 8% awarded by ICERTIAS (prepaid 1%
Slide 12: Latvia and Estonia
Latvia Net sales Latvia EBITDA Latvia Q1 Highlights (SEK million) (SEK million) 79 – Customers transitioning from prepaid 236 219 230 230 69 72 72 213 62 to postpaid – EBITDA margin at 29% affected by 33% 32% 31% 31% 29% price pressure in the market – Self-service initiatives, billing improvements a
Slide 13: Austria and Germany
Austria Net sales Austria EBITDA Austria Q1 Highlights (SEK million) (SEK million) 314 311 313 306 291 89 77 77 – Focus on growing the B2B customer 65 base 49 28% – Growth program with increased 25% 25% marketing and sales activities is being 21% 17% initiated to improve net intake Q1 13 Q2 13 Q3 13
Slide 14: Financial Overview
Financial Overview TELE2
Slide 15: Income statement summary
SEK million YTD 2014 YTD 2013 FY 2013 ▲% Net sales 7,108 7,298 29,871 -2.6% EBITDA 1,381 1,488 5,990 -7.2% EBITDA margin (%) 19.4% 20.4% 20.1% -1.0% Depreciation & associated companies -769 -820 -3,364 -6.2% Depreciation of net sales (%) -10.8% -11.1% -11.2% 0.3% One-off items 242 2 -434 EBIT 854 67
Slide 16: Depreciation and depreciation as a percentage of net sales
Depreciation and Depreciation as a percentage of net sales SEK million 1,200 14.0% 900 13.0% 600 12.0% 300 11.0% 0 10.0% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Depreciation Depreciation of net sales (%)
Slide 17: Financial items
SEK million Financial items, expensed YTD 2014 YTD 2013 FY 2013 Interst income/costs -89 -130 -391 Exchange rate differences, external -20 15 -35 Exchange rate differences, intragroup -2 37 -33 Other financial items -31 -39 -155 Total -142 -117 -614 Financial items, paid YTD 2014 YTD 2013 FY 2013 Ex
Slide 18: Taxes
SEK million Taxes, expensed YTD 2014 YTD 2013 FY 2013 Normal -237 -200 -920 One-off - - -3 Total -237 -200 -923 Taxes, paid YTD 2014 YTD 2013 FY 2013 Excluding Russia Normal -125 -155 -302 One-off - - - -125 -155 -302 Discontinued operations Russia - -177 -177 Total -125 -332 -479 • Deferred tax ass
Slide 19: Cash flow including Russia
SEK million YTD 2014 YTD 2013 FY 2013 OPERATING ACTIVITIES Cash flow from operations, excl taxes and interest 1,395 2,748 7,117 Interest paid -64 -174 -374 Taxes paid -125 -332 -479 Change in working capital -699 -667 -451 Cash flow from operating activities 507 1,575 5,813 INVESTING ACTIVITIES CAPE
Slide 20: Cash flow excluding Russia
SEK million YTD 2014 YTD 2013 FY 2013 OPERATING ACTIVITIES Cash flow from operations, excl taxes and interest 1,395 1,563 5,932 Interest paid -64 -105 -305 Taxes paid -125 -155 -302 Change in working capital -699 -451 -235 Cash flow from operating activities 507 852 5,090 INVESTING ACTIVITIES CAPEX
Slide 21: Pro forma net debt / EBITDA
Pro forma net debt/ EBITDA 12 m rolling SEK billion / Ratio 20.0 2.00 17.5 1.75 0.0 15.0 1.50 12.5 1.25 10.0 1.00 0.0 0.0 2.0 7.5 15.8 2.0 0.75 5.0 0.50 8.1 7.6 7.2 6.8 2.5 0.25 0.0 0.00 Mar 2013 Jun 2013 Sep 2013 Dec 2013 Mar 2014 Ordinary dividend, proposed/paid Pro forma net debt Pro forma net de
Slide 22: Conclusion
Conclusion TELE2
Slide 23: Summary and Priorities
Summary – The Group continues to grow within mobile; End-user service revenue is increasing fast in the Netherlands and in Kazakhstan and at a steady rate in Sweden – Positive Net intake in Kazakhstan and the trend is expected to continue – Croatia continued operational improvement – 2014 guidance u
Slide 24: Q&A
Q&A TELE2
Slide 25: The End