Tele2 Ab Class A · OMXSTO:TEL2_A
Tele2 Ab Class A — Q1 2019 Earnings Presentation
31 slides from Tele2 Ab Class A's earnings presentation, Apr 29, 2019
Slide 1: Q1 2019 Highlights
Q1 2019 Highlights ● Revenue of SEK 7.2 billion, representing organic decline of –1 percent ● End-user service revenue of SEK 5.3 billion, stable on an organic basis ● Organic growth of 8 percent in underlying EBITDA excluding IFRS 16 for the Group ● Organic growth of 5 percent in underlying EBITDA
Slide 2: Q1 2019 summary
“We aim to combine the disciplined and predictable pricing of the fixed market with the agile, customer-friendly mobile market to capitalize on the demand for household connectivity” Q1 2019 summary Group organic end-user service revenue (EUSR) was flat in the quarter with the Baltics growing 7 perc
Slide 3: Revenue | End-user service revenue
[Revenue | End-user service revenue 10,000
Slide 4: Analysis of cash flows
Tele2 - Interim Report January-March 2019 3 (35) Analysis of cash flows SEK million, total operations 2019 Q1 IFRS 16 2018 Q1 IAS 17 2018 Full year IAS 17 Underlying EBITDA, continuing operations 2,659 1,460 6,633 Items affecting comparability, continuing operations –262 –65 –595 EBITDA continuing o
Slide 5: Revenue split by segment
mi Sweden Consumer 60% Estonia 20% i Sweden Business 18% Ti Groatia 5%
Slide 6: Financial guidance
organic % -2% –1% –2% 5% 6% 0% % 1.3% –0.1% 1.8% –2.0% –1.3% 1.1% 0% 2% –7% –2% 8% –6% –1% –11% –17% –4% –1% –1% 6% % –5.5% 1% –9% 1% –2% –2% 0% Net intake RGU base organic % 6% 6% 4% 8% organic % 3% –3% –8% 1% Q1 2019 PRESENTATION Contacts Appendices Note 2 3 3 3 3 5 4 11 8 8 8 8 Note 11 11 11 11 N
Slide 7: Slide 7
Slide 8: First Quarter 2019
FIRST QUARTER 2019 April 24, 2019 Tele2 AB
Slide 9: Group highlights - Q1 2019
Group highlights - Q1 2019 SEK billion Q1 2019 % change organic Revenue 7.2 -1% End-user service revenue 5.3 0% Underlying EBITDA ex. IFRS 16 2.3 +8% Capex ex. spectrum and leases 0.6 2 Organic is constant currencies and including Com Hem pro forma Comments o Organic growth of end-user service reven
Slide 10: Tele2 is becoming a true integrated challenger
Tele2 is becoming a true integrated challenger Drive FMC in Sweden B2C o Launch of Com Hem mobile in February o Increasing penetration of FMC bundle benefits Sweden B2B turnaround o Continued customer growth o Setting up B2B management and sales incentive structure to align with strategy o Continued
Slide 11: Growth and cost initiatives drive cash flow
Slide 4 Growth and cost initiatives drive cash flow 1 Low-single digit end-user service revenue growth - SEK 450m of revenue synergies Expected to be flat in 2019, which is a transition year, and low-single digit growth in the mid-term driven by strategy initiatives 2 Mid-single digit growth in unde
Slide 12: Sweden
Slide 5 Sweden TELE2
Slide 13: Sweden Consumer - Operational highlights
Sweden Consumer - Operational highlights RGUs & net adds - core and legacy services (thousands, pro forma) +3 652 -2 790 +12 1,796 -7 -74 381 432 1,180 +10 654 +1 801 +11 1,794 -2 -31 369 420 1,173 +24 655 +1 814 +13 1,804 +10 -25 351 411 1,175 +29 658 +3 827 +13 1,817 +13 -84 324 399 1,130 +20 661
Slide 14: Sweden Consumer segment - Financials
Sweden Consumer segment - Financials End-user service revenue (SEK million, pro forma, year-on-year growth %) +6% 472 +1% 571 +14% 1,152 +4% 128 384 300 +6% 479 +1% 595 +12% 1,168 +4% 124 377 294 +4% 476 +1 600 +11% 1,189 +3% 117 365 300 +5% 474 +0% 614 +10% 1,189 +4% 115 352 289 +3% 466 -1% 618 +8%
Slide 15: Sweden Business - Operational highlights
Sweden Business - Operational highlights Mobile RGUs (thousands, pro forma) +5% 855 868 881 889 896 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Mobile ASPU (SEK, pro forma) -6% 188 184 180 183 177 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 End-user service revenue (SEK million, pro forma, year-on-year growth %) -7%
Slide 16: Sweden Business segment - Financials
Sweden Business segment - Financials Revenue (SEK million, pro forma) -2% 145 467 1,058 140 421 1,048 152 352 1,025 136 504 1,063 167 446 1,034 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 End-user Equipment Wholesale Operator Underlying EBITDA ex. IFRS16 and margin (SEK million, pro forma) +1% 372 308 294 28
Slide 17: Sweden overview
Sweden overview Total end-user service revenue (SEK million, pro forma) -1% 4,249 4,269 4,249 4,273 4,189 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDA ex. IFRS 16 and margin (SEK million, pro forma) +5% 1,761 1,732 1,946 1,775 1,843 32% 31% 36% 30% 34% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Unde
Slide 18: International
International TELE2
Slide 19: Baltics - Operational highlights
Baltics - Operational highlights Mobile RGUs +1% Q1 '18 Q1 '19 ASPU development +6% Q1 '18 Q1 '19 Brand campaign TELE2 POWER PACK Daugiau vertes, todel uztenka vieno NAUIAUSIA IRANGA GB+ NERIBOTI POKALBIAI TELE2 LAISVAS INTERNETAS ISMANUS SKAMBUCIU Q1 highlights - ASPU growth in all three markets le
Slide 20: Baltics - Financials
Baltics - Financials Mobile end-user service revenue (SEK million) +7% 585 639 650 654 655 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDA ex. IFRS 16 and margin (SEK million) +16% 316 366 402 374 386 31% 33% 35% 31% 35% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDAaL - Capex* and cash c
Slide 21: Kazakhstan (discontinued) - Financials
Kazakhstan (discontinued) - Financials Mobile end-user service revenue (SEK million) +22% 534 613 628 650 632 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDA ex. IFRS 16 and margin (SEK million) +60% 202 264 273 314 312 29% 34% 34% 39% 40% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDAaL
Slide 22: Financial Overview
Financial Overview TELE2
Slide 23: Accounting changes
Accounting changes Somewhat increased scope of Items affecting comparability to make Underlying EBITDA cleaner We add "reported" EBITDA to align with the industry P & L with IFRS 16 Revenue Underlying EBITDA +/- Items affecting comparability = EBITDA - Depreciation & Amortization of which RoU asset
Slide 24: Group results Q1 2019
Group results Q1 2019 SEK million 1 Q1 2019 Q1 2018 Revenue 7,217 5,425 Underlying EBITDA 2,659 1,460 Margin (%) 32% 27% Items affecting comparability 2 -262 -65 D&A 3 -1,303 -509 JVs and associated companies 4 10 14 Operating profit 1,104 900 Interest income/expenses -109 -69 Other financial items
Slide 25: Group cash flow Q1 2019
Group cash flow Q1 2019 SEK million 1 Q1 2019 Q1 2018 Underlying EBITDA, continuing op. 2,659 1,460 Items affecting comp., continuing op. 2 -262 -65 EBITDA continuing operations 2,397 1,395 EBITDA discontinued operations 434 190 Amortization of lease liabilities 3 -382 - Capex paid 4 -1,671 -840 Cha
Slide 26: Synergy update
Synergy update Benefit in quarter Run-rate Target (Annualized at end of quarter) (Run-rate at end of year 3) Cost synergies 50 300 900 (SEK million) Revenue synergies Important first steps taken towards target of SEK 450m in 5 years, including Com Hem mobile launch and FMC benefits Drivers - Cost sy
Slide 27: Financial guidance - unchanged
Financial guidance - unchanged End-user service revenue Underlying EBITDAaL CAPEX (SEK bn excl. spectrum and leased assets) Mid-term ambition Low-single digit growth Mid-single digit growth 3.0-3.5 2019 Around 2018 level Mid-single digit growth* 2.9-3.2 o Ramp-up of initiatives in 2019 in a low-grow
Slide 28: Leverage at 2.6x
Leverage at 2.6x Economic net debt to underlying EBITDAaL (SEK billion, as of 31 March 2019) Leverage 2.6x 2.8x 2.6x Net debt 25.1 6.5 1.0 32.6 -2.6 30.0 Economic net debt Lease debt Kazakhstan debt Net debt Uncommitted lease debt Net debt ex. uncommitted lease debt EBITDA rolling 12 months 9.8 1.4
Slide 29: To conclude...
To conclude... TELE2
Slide 30: Key priorities moving forward
Key priorities moving forward Reignite EuS Revenue growth in Sweden o B2C: Com Hem Mobile and FMC penetration in the customer base o B2B: High margin OnNet growth Structural cost savings o Cost synergies of SEK 900m within 3 years o Investigate further initiatives Build on the momentum in the Baltic
Slide 31: Thank you!
THANK YOU! TELE2 87 85 82 83 78 80 77 75 73 72 68 67 64 60 58 56 52 49 122 0 0 1 0 0 1 0 1 0 0 0 0 0 0 0 <-- IAS 17 IFRS 16 --> 62 61 67 75 60 66 65 58 56 0 0 0 0 0 0 0 0 0 137 134 130 126 122 Income statement 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2016 2017 2018 2019 SEK millio