Slide 1: Fourth Quarter 2013
FOURTH QUARTER 2013 7th of February 2014 Tele2 AB
Slide 2: Q4 2013 in brief
Q4 2013 in brief TELE2
Slide 3: Q4 Financial Highlights
Net Sales EBITDA EBITDA Margin CAPEX (SEK billion) (SEK billion) (percent) (SEK billion) 7.57 1.46 19 1.26 (7.87) (1.44) (18) (1.08) Q4 Financial Highlights – Stable performance – Mobile end-user service revenue growth of 5.3% for the Group Note: Numbers in parenthesis are Q4 2012 numbers
Slide 4: Mobile end-user service revenue by country
Sweden Norway (SEK million) (SEK million) 1,716 1,662 1,746 1,767 1,775 771 775 774 761 718 Tele2 Group (SEK million) 5.3% 3,674 3,769 3,724 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 3,536 3,496 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Netherlands Kazakhstan (SEK million) (SEK million) 259 261 240 251 227 223 197 189 195
Slide 5: Key events in the quarter
– All Tele2 Companies in the Baltics secured 800 MHz LTE licenses – Tele2 Norway did not obtain any licenses in the multiband frequency auction held on December 2nd 2013 – Tele2 Sweden reached an agreement with Telenor to sell its residential cable and fiber operations – MNO roll out on track – Tele
Slide 6: Country Performance
Country Performance TELE2
Slide 7: Sweden: Net Sales, EBITDA and data volume
Net Sales EBITDA Total data volume, 3G and 4G (SEK million) (SEK million) -2.3% x3 3,229 3,080 3,139 3,078 3,156 859 856 900 858 834 29% 27% 27% 27% 27% Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 2011 2012 2013 Mobile Fixed broadband Mobile Fixed broadband Fixed telephony Other Fixe
Slide 8: Norway: Net Sales, EBITDA and network
Net Sales EBITDA Traffic on own Network and (SEK million) (SEK million) Population Coverage -19.6% 43% 37% 36% 1,222 55 30% 33% 44 23% 25% 26% 1,050 1,052 1,029 983 39 5% 4% 4% -1% -2% 75% -17 71% 72% -16 69% 62% Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Mobile Fixed telephony Othe
Slide 9: Netherlands: Net Sales, EBITDA and roll-out
Net Sales EBITDA Roll out development (SEK million) (SEK million) 3.2% 1,330 1,331 1,349 1,383 1,372 361 317 321 342 271 27% 25% 24% 24% 20% Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 13-40 13-42 13-44 13-46 13-48 13-50 13-52 Mobile Fixed broadband Mobile Fixed broadband Sites acqui
Slide 10: Kazakhstan: Net Sales, EBITDA and roll-out
Net Sales EBITDA Roll out development (SEK million) (SEK million) 24.1% 357 365 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 333 -2% 294 289 -10% -16% -16% -7 -28% -34 -45 -52 J-13 J-13 J-13 J-14 M-13 M-13 A-13 A-13 S-13 O-13 F-13 N-13 D-13 -83 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Mobile Mobile EBITDA Margin Sites On Air
Slide 11: Estonia and Latvia
Estonia Net Sales Estonia EBITDA Estonia Q4 Highlights (SEK million) (SEK million) 228 54 – 800 MHz LTE license secured, 164 182 172 45 43 network roll out will start during 2014 156 36 37 – Intensive price competition resulted in 29% a low EBITDA margin 24% 22% 24% 22% – Key focus is to increase sa
Slide 12: Lithuania and Croatia
Lithuania Net Sales Lithuania EBITDA Lithuania Q4 Highlights (SEK million) (SEK million) 326 334 327 117 133 – 800 MHz LTE license secured, 304 293 109 102 network roll out will start during 2014 87 40% 41% – Net Sales growth of 7.6% 33% 31% 29% – The competitive environment was intense during the q
Slide 13: Germany and Austria
Germany Net Sales Germany EBITDA Germany Q4 Highlights (SEK million) (SEK million) 225 214 214 213 226 41 51 37 18 – Continued growth of mobile customer 32 base now reaching 176,000* 24% 18% 17% 14% – Stable Net Sales development 8% supported by mobile Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q4 12 Q1 13 Q2 13
Slide 14: Financial Overview
Financial Overview TELE2
Slide 15: Q4 2013 income statement
SEK million Q4 2013 Q4 2012 ▲% Net sales 7,568 7,873 -3.9% EBITDA 1,461 1,444 1.2% EBITDA margin (%) 19.3% 18.3% 1.0% Depreciation & associated companies -886 -865 2.4% Depreciation of net sales (%) -11.7% -10.9% -0.7% One-off items 11 -3 EBIT 586 576 1.7% Normalized EBIT 575 579 -0.7% Normalized EB
Slide 16: Full year 2013 income statement
SEK million FY 2013 FY 2012 ▲% Net sales 29,871 30,742 -2.8% EBITDA 5,990 6,240 -4.0% EBITDA margin (%) 20.1% 20.3% -0.2% Depreciation & associated companies -3,364 -3,707 -9.3% Depreciation of net sales (%) -11.2% -12.0% 0.8% One-off items -434 -558 EBIT 2,192 1,975 11.0% Normalized EBIT 2,626 2,53
Slide 17: 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% Q4'12 Q1'13 Q2'13 Q3'13 Q4 2013 Depreciation Depreciation of net sales (%) • Write-down of former billing system etc in Kazakhstan of SEK 89 million
Slide 18: Financial items
SEK million Financial items, expensed Q4 2013 Q4 2012 FY 2013 FY 2012 Interst income/costs -90 -120 -391 -494 Exchange rate differences, external -43 5 -35 -20 Exchange rate differences, intragroup 3 -42 -33 116 Other financial items -32 -38 -155 -155 Total -162 -195 -614 -553 Financial items, paid
Slide 19: Taxes
SEK million Taxes, expensed Q4 2013 Q4 2012 FY 2013 FY 2012 Normal -252 -66 -920 -609 One-off -3 -99 -3 163 Total -255 -165 -923 -446 Taxes, paid Q4 2013 Q4 2012 FY 2013 FY 2012 Excluding Russia Normal -109 -43 -302 -110 One-off - - - - -109 -43 -302 -110 Discontinued operations Russia - -454 -177 -
Slide 20: Cash flow including discontinued operations
SEK million Q4 2013 Q4 2012 FY 2013 FY 2012 OPERATING ACTIVITIES Cash flow from operations, excl taxes and interest 1,387 2,595 7,117 10,794 Interest paid -51 -280 -374 -668 Taxes paid -109 -497 -479 -989 Change in working capital 293 -3 -451 -458 Cash flow from operating activities 1,520 1,815 5,81
Slide 21: Cash flow excluding Russia
SEK million Q4 2013 Q4 2012 FY 2013 FY 2012 OPERATING ACTIVITIES Cash flow from operations, excl taxes and interest 1,387 1,369 5,932 6,065 Interest paid -51 -105 -305 -292 Taxes paid -109 -43 -302 -110 Change in working capital 293 -211 -235 -696 Cash flow from operating activities 1,520 1,010 5,09
Slide 22: 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 0.0 15.0 1.50 12.5 1.25 10.0 1.00 0.0 0.0 15.8 2.0 7.5 14.9 0.75 5.0 0.50 8.1 7.6 7.2 2.5 0.25 0.0 0.00 Dec 2012 Mar 2013 Jun 2013 Sep 2013 Dec 2013 Ordinary dividend, proposed/paid Pro forma net debt Pro forma net d
Slide 23: Conclusion
Conclusion TELE2
Slide 24: 2014 guidance: Net Sales, EBITDA, CAPEX
Net Sales EBITDA CAPEX (SEK billion) (SEK billion) (SEK billion) 30.0 6.0 4.5 Rationale “The two year financial guidance for 2014 and 2015 that Tele2 provided in April 2013 was undertaken in connection with the disposal of our Russian business, which generated a one-time gain of SEK 13.9 billion and
Slide 25: Summary and Priorities
Summary – Encouraging mobile end-user service revenue growth in Sweden, the Netherlands and Kazakhstan – Fixed operations in Netherlands showing sign of stabilization – Shift from pay-as-you go to bucket price plans in Sweden continues Priorities – Norway will be addressed in a way that maximizes va
Slide 26: Q&A
Q&A TELE2
Slide 27: The End
THE END