Slide 1: First Quarter 2024
• First Quarter 2024 April 18, 2024 Information Classification: Internal
Slide 2: Highlights
• 2 Highlights 4% organic growth in end-user service revenue • 2% organic growth in underlying EBITDAaL as end-user service revenue growth exceeds cost inflation • Solid equity free cash flow. Leverage at 2.3x • Strategy Execution Program (SEP) kicked off • Tele2 on CDP’s ‘A List’ for climate change
Slide 3: Solid start to the year
• Solid start to the year Sweden B2C in Q1 • EUSR growth accelerating to 4% driven by Fixed broadband at 9% and Mobile postpaid at 7% • Strong ASPU growth in Fixed broadband and Mobile postpaid supported by pricing Sweden B2B in Q1 • Continued solid overall EUSR growth • EUSR growth of 8% in Mobile
Slide 4: Sweden
• sweden Information Classification: Internal
Slide 5: Sweden consumer: Strong value growth
• Mobile postpaid RGUs Fixed broadband RGU & ASPU* Thousand QoQ and YoY growth % Digital TV Cable & Fiber RGU & ASPU* Thousand QoQ and YoY growth % ASPU growth YoY Fixed broadband RGUs Digital TV Cable & Fiber RGUs Sweden consumer: Strong value growth Mobile postpaid RGU & ASPU Thousand QoQ and YoY
Slide 6: Sweden consumer: Strong EUSR growth in connectivity
• Mobile prepaid Fixed broadband EUSR SEK million, YoY growth % Digital TV EUSR SEK million, YoY growth % Mobile postpaid Fixed Broadband Digital TV Cable & Fiber DTT TV Sweden consumer: Strong EUSR growth in connectivity Mobile EUSR SEK million, YoY growth % Q1 highlights • Mobile EUSR grew 5% due
Slide 7: Sweden business: Continued solid topline growth
• Fixed Solutions Mobile Mobile ASPU YoY growth % End-user service revenue SEK million, YoY growth % Sweden business: Continued solid topline growth Mobile RGU & net intake Thousand QoQ and YoY growth % Q1 highlights • EUSR growth of 3%. Adjusted for a one-off deal in Fixed in Q1 2023, growth was 4%
Slide 8: Business Sweden financials: Continued EBITDAaL growth
• Consumer Underlying EBITDAaL & margin SEK million, YoY growth % Operating cash flow and cash conversion, LTM, SEK million Business Sweden financials: Continued EBITDAaL growth End-user service revenue SEK million, YoY growth % Q1 highlights • EUSR grew by 4% driven by solid performance in both B2C
Slide 9: Baltics
• Baltics Information Classification: Internal
Slide 10: Baltics operational highlights: Solid overall ASPU growth
• Mobile RGUs Latvia – Mobile RGU & ASPU Thousand QoQ and YoY growth % ASPU growth YoY Baltics operational highlights: Solid overall ASPU growth Estonia – Mobile RGU & ASPU Thousand QoQ and YoY growth % Q1 highlights • The overall Baltic mobile postpaid customer base continued to increase supported
Slide 11: Baltics financials: Continued strong performance
• Estonia Underlying EBITDAaL & margin SEK million, YoY growth % Operating cash flow and cash conversion, LTM, SEK million Latvia Baltics financials: Continued strong performance End-user service revenue SEK million, YoY growth % Lithuania Q1 highlights • Continued strong EUSR growth of 7% led by Li
Slide 12: Financial overview
• Financial overview Information Classification: Internal
Slide 13: Group results
Group results • Group results Comments • Items affecting comparability increased due to restructuring costs related to the Strategy Execution Program • Net interest and other financial items increased due to higher financing costs for outstanding debt 1 13 2 Information Classification: Internal
Slide 14: Group cash flow
Group cash flow • Group cash flow Comments • Capex remains high due to continued intense investments and increased mainly due to timing of payments • Changes in working capital in the quarter were mainly impacted by a reduction in equipment receivables and increased provisions for restructuring cost
Slide 15: Leverage at 2.3x
Leverage at 2.3x • Leverage at 2.3x Comments • Economic net debt declined compared to year-end 2023 due to the cash generated in the business • Leverage of 2.3x was below the lower end of the target range of 2.5-3.0x • Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Economic net debt to underlying EBITDAaL LTM E
Slide 16: Ready for Next Phase of Strategy Execution
• IT Migration CX & Go to Market 3rd Party Retail Own (Digital) Channels Volume Value Legacy platforms Digital capabilities 2020 Q1 2024 2026 16 Ready for Next Phase of Strategy Execution Information Classification: Internal
Slide 17: Strategy Execution Program (SEP) update
• 17 • Radical improvements in customer experience and value will generate operational efficiency Creating customer value in Q1 • Consumer • - Strengthened focus and investment in own channels • - Major migration relating to Customer Service capabilities • Business • - Digitalisation and Automation
Slide 18: Strategy Execution Program (SEP) update: run-rate savings
• 18 • Radical improvements in customer experience and value will generate operational efficiency Strategy Execution Program (SEP) update Annualised run-rate • Q1 2024 Realised in • Q1 2024 80 10 Annualised run-rate target YE 2026 600 OPEX reduction • (SEK million) • - Mainly driven by organisationa
Slide 19: Most energy efficient operator in Sweden
• Our operating model and sustainability focus make Tele2 the most energy efficient operator in Sweden Network sharing makes us • cost-efficient Automation to optimize processes Simplifying our assets Continuously Improving our Operating Model Source: Company reported figures, Internal analysis Reca
Slide 20: Our Tech Journey
• Our Tech Journey 2021 2024 2022 2023 Datacenter transformation • & IT migration Swap fully complete, with AI • compatible hardware Planning the 2G & 3G • switch-off for 2025 >40% reduced Capex to revenue • (ex. 5G rollout) High 5G focus through 2024 2025 Improving our customer experience Data Con
Slide 21: Our stack evolution
• Our stack evolution • Improving customer & employee experience Cloud compatible & secure-by-design architecture requiring full sovereignty (regulatory) Legacy platforms Digital capabilities 21 Information Classification: Internal
Slide 22: Our mobile network structure
• Our mobile network structure • 2 JV’s 1 JV ~12k sites Starting point >9k sites optimized • EoY 2025 2-5x throughput per site • Best-in-class Capex efficiency • Trouble shooting time reduced • In-house field service • AI enabled across • 2/3G switch-off • >10% of energy consumed for • <1% of data
Slide 23: The IT landscape
• The IT landscape • 6 stacks 2 stacks Simplified target systems Cloud compatible & secure- by-design architecture requiring full sovereignty (regulatory) 2 IT stacks • 2024 >6 different IT stacks • 2021 >3 IT stacks • Today 100% digital enabled • >40% fewer incidents across • Faster time-to-market
Slide 24: Tele2 2024 Key Customer Priorities
• Tele2 2024 • Key Customer Priorities • “Operations first” • Swap complete (90% pop. cov.) • 5G Security completion • Carbon emissions reduction Comviq & trouble ticketing completion • B2B next step design and plan • B2C digitalization execution Excellent fixed • & own TV tech Best 5G Own IT for •
Slide 25: Financial outlook (unchanged)
Financial outlook (unchanged) • Financial outlook (unchanged) Underlying EBITDAaL1 End-user service revenue1 1-3% 3-4% Capex to sales2 13-14% 25 2024 guidance Mid-term outlook Low to mid- single-digit Mid-single-digit 10-12% 1) Organic growth rate • 2) Excluding spectrum and leases Capex to sales of
Slide 26: Enabling a society of unlimited possibilities
• Enabling a society of unlimited possibilities Each era brings its own limitations. Breaking them means breaking new ground. We have always challenged limitations to realize new possibilities for our customers and society at large. • Today, we are deeply connected to the digital lifestyle of societ