Slide 1: Third Quarter 2016
THIRD QUARTER 2016 October 20, 2016 Tele2 AB
Slide 2: Delivering on our long term strategy
Delivering on our long term strategy • Group mobile end-user service revenue up 6% Value • Sweden mobile end-user service revenue growth of 2% Champion • Netherlands mobile end-user service revenue up 15% Focused • Swedish 4G geographic coverage reaches 88% Technology • Baltics 4G population coverag
Slide 3: Group highlights – Q3 2016
Group highlights – Q3 2016 % Change % Change Q3 2016 Reported LFL Mobile end-user service revenue 3.64 +6% +6% (SEK billion) Net sales (SEK billion) 6.96 +3% +1% EBITDA (SEK billion) 1.56 -2% -1% 3 LFL is constant currencies and pro forma for Altel
Slide 4: Sweden – Financials
Sweden – Financials Net sales Mobile end-user service EBITDA and EBITDA margin (SEK million) revenue (SEK million) (SEK million) 0% +2% +5% 3 100 3 299 1 068 3 500 3 053 3 018 3 095 2 500 1 200 1 014 60% 1 889 1 841 1 928 946 894 3 000 2 000 1 797 1 821 1 000 846 50% 2 500 800 40% 2 000 1 500 33% 35
Slide 5: Sweden – Improving trends
Sweden – Improving trends Consumer postpaid mobile end- Share of sales with bundle Geographic coverage user service revenue >0.5GB 2G/4G +7% 88% 84% 85% 73% 83% Q3 15 Q3 16 Q1 16 Q2 16 Q3 16 Q3 15 Q3 16 Q3 Highlights – Consumer postpaid mobile end-user service revenue up 7% driven by increased data
Slide 6: Baltics – Financials
Baltics – Financials Net sales Mobile end-user service EBITDA and EBITDA margin (SEK million) revenue (SEK million) (SEK million) +6% +7% +9% 1 000 832 884 600 521 350 60% 900 815 770 787 488 476 468 477 287 800 500 300 263 257 246 256 50% 700 250 400 40% 600 200 500 300 32% 32% 32% 33% 32% 30% 150
Slide 7: Baltics – Data monetization continues
Baltics – Data monetization continues ASPU development Share of 4G capable 4G population coverage smartphones in base +7% 32% 99% 82% 17% Q3 15 Q3 16 Q3 15 Q3 16 Q3 15 Q3 16 Q3 Highlights – Strong data monetization driven by prepaid to postpaid transition and data centric pricing – Data consumption
Slide 8: Netherlands – Financials
Netherlands – Financials Net sales Mobile end-user service EBITDA (SEK million) revenue (SEK million) (SEK million) +3% +15% -102% 1 600 1 440 1 512 1 441 1 452 1 478 450 403 419 364 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 1 400 400 322 336 350 1 200 150 122 300 1 000 250 100 800 600 200 50 35 150 400 100 0 2
Slide 9: Netherlands – Continuing momentum
Netherlands – Continuing momentum Spontaneous brand awareness Share of total new postpaid Data usage on own network & brand consideration (Memo2) (GfK) 19% 56% 77% 12% 43% 41% 34% 27% Pre-launch Sep 16 Pre-launch Aug 16 Pre-launch Sep 16 Oct 15 4G Awareness Consideration Q3 Highlights – Awareness an
Slide 10: Kazakhstan – Financials
Kazakhstan – Financials Net sales, LFL Mobile end-user service EBITDA and EBITDA margin, LFL (SEK million) revenue, LFL (SEK million) (SEK million) -1% +20% +204% 140 20% 664 404 428 120 14% 700 583 575 450 377 390 10% 540 400 358 100 8% 600 513 4% 3% 79 350 0% 80 500 300 -5% 400 250 60 44 -10% 300
Slide 11: Kazakhstan – Strong performance
Kazakhstan – Strong performance Customer base, LFL 4G outdoor population coverage JV integration (thousands) Plan Progress +11% Tele2 80% 80% 70% 6 384 5 767 Kcell / Beeline 30% Q3 15 Q3 16 Q4 16 E Q3 15 Closing Q1 16 Q2 16 Q3 16 Q3 Highlights – 4G outdoor population coverage remains a competitive a
Slide 12: Challenger program on track
Challenger program on track Baseline 2016 target 2018 target Key progress areas in the quarter Simplify 30% 40% 60% Product simplification initiative progressing. % of products harmonized More than 900 products closed year-to-date on shared platforms Discipline 40% 75% 80% Data analytics and opt
Slide 13: Financial Overview
Financial Overview TELE2
Slide 14: Mobile end-user service revenue
Mobile end-user service revenue Tele2 Group Development per market (SEK million) (SEK million) +6% 21 3 641 3 641 3 422 78 3 350 3 282 3 168 -7 55 33 39 3 422 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Sweden Baltics NL KZ RoW Oth Q3 16 14
Slide 15: EBITDA
EBITDA Tele2 Group Development per market (SEK million) (SEK million) -2% 54 24 1 599 1 562 60,0% 1 599 1600 29 12 1 562 1 337 -32 -124 50,0% 1400 1 226 1200 1 087 40,0% 1000 30,0% 800 600 23,5% 22,4% 19,3% 19,0% 20,0% 400 16,3% 10,0% 200 0 0,0% Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Sweden Baltics NL
Slide 16: CAPEX
CAPEX Tele2 Group Development per market (SEK million) (SEK million) -16% 51 932 -15 1 223 11 1200 1 154 60,0% 2 -139 779 932 50,0% 1000 -63 820 779 40,0% 800 30,0% 600 20,0% 400 17,6% 17,9% 13,7% 12,3% 200 11,2% 10,0% 0 0,0% Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q3 15 Sweden Baltics NL KZ RoW Oth Q3 16 CAP
Slide 17: Free cash flow
Free cash flow Total operations Tele2 Group Development (SEK million) (SEK million) Working One-off +396% Q3 15 EBITDA Interest etc Taxes capital CAPEX items Q3 16 900 838 49 838 706 -54 700 500 300 169 169 51 139 100 -37 -46 Q4 15 Q1 16 Q3 15 Q2 16 Q3 16 -100 139 -154 -300 -291 17 Free cash flow =
Slide 18: Debt position and financial leverage
Debt position and financial leverage Economic net debt to EBITDA 12 m rolling SEK billion Leverage 12,5 2,13 2,25 2,00 10,0 1,75 1,50 7,5 1,25 11,7 11,0 1,00 5,0 9,8 9,9 9,4 0,75 2,5 0,50 0,25 0,0 0,00 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Economic net debt Economic net debt to EBITDA 18 Econ
Slide 19: Rights Issue
Rights Issue • Acquisition of TDC Sweden announced on 21st June to strengthen our B2B position in Sweden (not conditional upon equity financing) Background • In conjunction, the company announced the intention to raise equity through a Rights issue • EGM to be held on 27th October • Financing throug
Slide 20: Financial guidance 2016
Financial guidance 2016 Mobile end-user Mid-single digit service revenue % growth* Net sales (SEK billion) 26 – 27 EBITDA (SEK billion) 4.6 – 5.0 CAPEX (SEK billion) 3.7 – 4.1 20 * Based on LFL which is constant currencies and pro forma for Altel
Slide 21: Summary
Summary TELE2
Slide 22: Key priorities moving forward
Key priorities moving forward Sustain momentum in Sweden Continue to monetize 4G investments Continued integration of Altel in Kazakhstan Execute on Challenger Program Closing of TDC Focused Winning Value Step-Change Technology People & Champion Productivity Choices Culture 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 play How we win Focused Winning Mobile Our current Residential Value Step-Change IoT Technology People & acce
Slide 24: The End
THE END