Tele2 Ab Class A · OMXSTO:TEL2_A
Tele2 Ab Class A — Q3 2014 Earnings Presentation
24 slides from Tele2 Ab Class A's earnings presentation, Oct 23, 2014
Slide 1: Third Quarter 2014
THIRD QUARTER 2014 23" of October 2014 is Tele2 AB TELE2
Slide 2: Q3 2014 in brief
Q3 2014 in brief TELE2
Slide 3: Q3 Financial Highlights
Net sales EBITDA EBITDA margin CAPEX (SEK billion) (SEK billion) (percent) (SEK billion) (6.50) (1.47) (23) (0.66) Q3 Financial Highlights – Strong quarter with mobile end-user service revenue growth of 8% – EBITDA year-on-year growth of 14% – Growth in CAPEX driven by progress in the Netherlands ro
Slide 4: Mobile end-user service revenue by country
Sweden 6% Baltics 3% (SEK million) (SEK million) 1,767 1,775 1,716 1,815 1,865 462 444 474 431 415 Tele2 Group (SEK million) 8% 3,094 3,252 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 3,008 3,006 2,904 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Netherlands Kazakhstan 7% (SEK million) 24% (SEK million) (21%*) 308 321 Q3 13 Q4
Slide 5: Year-on-year growth for mobile end-user service revenue, Tele2 Group
Year-on-year growth for mobile end-user service revenue, Tele2 Group Q3 14 Q2 14 Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 CAGR 7.3% 5
Slide 6: Country highlights summary
Strong quarter with mobile end-user service revenue growth of 6% fueled by continued strong data usage Consumer broadband turnaround continues. The MNO roll out remains on plan, the service is currently being tested by friendly users Positive net intake at 108,000 and EBITDA momentum continues Conti
Slide 7: Country Performance
Country Performance TELE2
Slide 8: Sweden: Net sales, EBITDA, Q3 Highlights
Net sales EBITDA A strong quarter with many new and (SEK million) (SEK million) extended business contracts 1,025 60% 3,500 3,078 3,156 3,021 3,111 3,124 1,000 900 858 882 50% 3,000 825 2,500 800 40% 2,000 600 33% 30% 29% 27% 27% 28% 1,500 400 20% 1,000 500 200 10% 0 - 0% Q3 13 Q4 - 13 Q1 14 Q2 14 Q
Slide 9: Netherlands: Net sales, EBITDA, CAPEX
Net sales EBITDA CAPEX (SEK million) (SEK million) (SEK million) 445 342 60% 401 1,600 360 372 1,383 1,372 1,320 1,318 1,369 310 271 257 267 50% 1,400 260 206 1,200 40% 259 1,000 210 800 160 30% 25% 120 600 110 20% 19% 20% 20% 400 60 15% 200 10 10% 0 -40 0% Q3 13 Q4 - 13 Q1 14 Q2 14 Q3 14 Q3 13 Q4 1
Slide 10: Kazakhstan: Net sales, EBITDA, average usage per subscriber
Net sales EBITDA Average usage per subscriber (SEK million) (SEK million) (MB, four month rolling average) Interconnect cut and currency devaluation x7 22 15% 400 357 365 20 3 349 10% 350 309 10 294 1 1% 6% 5% 300 250 0 0% 200 -10 0% -5% -2% -10% 150 -20 100 -10% -7 -15% 50 -30 -20% - -40 -34 -25% Q
Slide 11: Croatia and Lithuania
Croatia Net sales Croatia EBITDA Croatia Q3 Highlights (SEK million) (SEK million) 500 80 72 – Continued growth achieving a net 372 396 390 40% 400 329 intake of 33,000 customers. 299 60 300 48 30% 40 33 20% – Strong financials due to increased 200 22 25 18% 100 20 13% 10% 10% roaming revenues durin
Slide 12: Latvia and Estonia
Latvia Net sales Latvia EBITDA Latvia Q3 Highlights (SEK million) (SEK million) 250 230 230 213 223 235 100 83 – Launched roaming data buckets in EU 60% 200 80 72 72 62 67 countries to enable customers to use 150 60 40% more data abroad. 31% 31% 35% 100 40 29% 30% 50 20 20% – Introduced new tariff p
Slide 13: Austria and Germany
Austria Net sales Austria EBITDA Austria Q3 Highlights (SEK million) (SEK million) 100 – Focus on growing B2B customer base 313 308 77 60% 306 291 299 80 65 62 and improving Tele2 brand 300 58 60 49 40% awareness. 200 40 25% 20 21% 17% 19% 20% 20% – Successful up-sell of high speed 100 packages with
Slide 14: Financial Overview
Financial Overview TELE2
Slide 15: Q3 2014 income statement
SEK million Q3 2014 Q3 2013 ▲% Net sales 6,584 6,500 1.3% EBITDA 1,682 1,471 14.3% EBITDA margin (%) 25.5% 22.6% 2.9% Depreciation & associated companies -678 -724 -6.4% Depreciation of net sales (%) -10.3% -11.1% 0.8% One-off items - -450 EBIT 1,004 297 238.0% Normalized EBIT 1,004 747 34.4% Normal
Slide 16: YTD 2014 income statement
SEK million YTD 2014 YTD 2013 FY 2013 ▲% Net sales 19,079 19,172 25,757 -0.5% EBITDA 4,514 4,401 5,891 2.6% EBITDA margin (%) 23.7% 23.0% 22.9% 0.7% Depreciation & associated companies -2,002 -2,144 -2,909 -6.6% Depreciation of net sales (%) -10.4% -11.1% -11.2% 0.7% One-off items 243 -445 -434 EBIT
Slide 17: Cash flow Q3 2014
SEK million Q3 2014 Q3 2013 YTD 2014 YTD 2013 FY 2013 OPERATING ACTIVITIES Cash flow from operations, excl taxes and interest 1,660 1,501 4,514 5,730 7,117 Interest paid -62 -99 -222 -323 -374 Taxes paid -63 -31 -234 -370 -479 Change in working capital -92 -14 -802 -744 -451 Cash flow from operating
Slide 18: Cash flow excluding Norway
SEK million Q3 2014 Q3 2013 YTD 2014 YTD 2013 FY 2013 OPERATING ACTIVITIES Cash flow from operations, excl taxes and interest 1,635 1,449 4,463 4,417 5,832 Interest paid -65 -96 -228 -246 -298 Taxes paid -63 -31 -234 -193 -302 Change in working capital -25 11 -657 -469 -249 Cash flow from operating
Slide 19: Pro forma net debt / EBITDA
Pro forma net debt / EBITDA 12 m rolling SEK billion / Ratio 20.0 2.00 17.5 1.75 15.0 1.50 12.5 1.25 10.0 1.00 7.5 0.75 5.0 0.50 7.6 7.2 8.3 7.9 6.8 2.5 0.25 0.0 0.00 Sep 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014 Pro forma net debt Pro forma net debt to EBITDA 19
Slide 20: Guidance: Net sales, EBITDA, CAPEX
Net sales EBITDA CAPEX (SEK billion) (SEK billion) (SEK billion) 20 Note: Guidance excludes Tele2 Norway
Slide 21: Conclusion
Conclusion TELE2
Slide 22: Summary and Priorities
Summary – High quality quarter with strong results delivered across the board – Sweden particularly strong, mobile end-user service revenue growth of 6% – The 4G roll out in the Netherlands shows continued progress and investment on track – Focus on quality customer intake in Kazakhstan has been pay
Slide 23: Q&A
Q&A TELE2
Slide 24: The End