Slide 1: First Quarter 2016
FIRST QUARTER 2016 April 21st, 2016 Tele2 AB
Slide 2: Delivering on our long term strategy
Delivering on our long term strategy • Mid-single digit mobile end-user service revenue growth Value • Sweden Consumer continues to grow Champion • Strong performance in the Baltic region Focused • 4G available across our footprint Technology • 4G customer base significantly increased in Netherlands
Slide 3: Group highlights – Q1 2016
Group highlights – Q1 2016 % Change % Change Q1 2016 Reported LFL Mobile end-user service revenue 3.17 -1% +4% (SEK billion) Net sales (SEK billion) 6.45 -1% +2% EBITDA (SEK billion) 1.23 -14% -14% 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) -2% -1% -8% 3 130 3 299 1 809 1 829 1 889 1 841 1 797 3,500 3 101 3 100 3 053 2,000 1,200 1 014 60% 1,800 976 908 946 3,000 1,600 1,000 894 50% 2,500 1,400 800 40% 1,200 2
Slide 5: Sweden – Continuing growth in Consumer
Sweden – Continuing growth in Consumer Consumer postpaid end-user Share of Tele2 intake with Geographic coverage services revenue bundle >0.5GB 2G/4G +1.3% 77% 86% 72% 77% 70% Q1 15 Q1 16 Jan Feb Mar Q1 15 Q1 16 Q1 Highlights – Total Consumer grew 3% driven by strength in prepaid and successful exec
Slide 6: Baltics – Financials
Baltics – Financials Net sales Mobile end-user service EBITDA and EBITDA margin (SEK million) revenue (SEK million) (SEK million) +7% +5% +6% 900 832 815 600 300 263 60% 767 770 488 257 246 800 719 470 476 468 231 238 500 444 250 50% 700 600 400 200 40% 500 300 150 32% 31% 32% 32% 32% 30% 400 300 20
Slide 7: Baltics – Strong performance
Baltics – Strong performance ASPU development Share of 4G capable 4G population coverage smartphones in base +8% 25% 95% 56% 10% Q1 15 Q1 16 Q1 15 Q1 16 Q1 15 Q1 16 Q1 Highlights – Strong data monetization driven by prepaid to postpaid transition, increasing penetration of 4G handsets, and data cent
Slide 8: Netherlands – Financials
Netherlands – Financials Net sales Mobile end-user service EBITDA (SEK million) revenue (SEK million) (SEK million) +3% +6% -122% 1 440 1 512 1 441 403 1,600 1 402 1 390 450 400 364 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 1,400 332 322 147 1,200 350 305 165 141 1,000 300 145 122 125 250 800 105 200 85 600 150
Slide 9: Netherlands – Gaining momentum
Netherlands – Gaining momentum Spontaneous brand awareness Share of total postpaid new Data usage on own network & Brand consideration (Memo2) (GfK) 52% 25% 61% 41% 40% 34% 12% 27% Pre-launch Mar 16 Pre-launch Mar 16 Pre-launch Mar 16 Oct 15 4G Awareness Consideration Q1 Highlights – Brand Awareness
Slide 10: Kazakhstan – Financials
Kazakhstan – Financials Net sales, LFL Mobile end-user service EBITDA, LFL (SEK million) revenue, LFL (SEK million) (SEK million) +26% +31% 700 632 400 359 371 324 342 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 600 557 350 480 487 284 35 500 300 25 386 25 400 250 15 14 12 200 300 150 5 200 100 -5 100 50 -15 0 0
Slide 11: Kazakhstan – JV integration progressing
Kazakhstan – JV integration progressing 4G coverage Tele2 customers Customer base, LFL Average Price/GB development (thousands) 6 298 4 737 75 168 77% KZT KZT Q1 15 Q1 16 Unlimited New tariffs tariff plans Q1 Highlights – National roaming agreement between Altel and Tele2 in place, 4G and greater co
Slide 12: Challenger Program progressing
Challenger Program progressing Baseline 2016 target 2018 target Progress in the quarter Simplify % of products harmonized on 30% 40% 60% Good progress in Estonia and Croatia on product portfolio simplification shared platforms Discipline Handset Optimization Program is delivering % of spend stra
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) -1% 17 24 13 3 422 3 184 -12 -50 3 324 3 282 -8 3 168 3 184 3 168 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q1 15 Sweden Baltics NL KZ RoW Oth Q1 16 14
Slide 15: EBITDA
EBITDA Tele2 Group Development per market (SEK million) (SEK million) 1800 90.00% -14% 80.00% 1 599 1600 70.00% 1 428 1 393 15 1400 60.00% 1 337 -82 1 428 32 1 226 50.00% 6 1200 -1 40.00% -172 1 226 1000 30.00% 21.9% 23.5% 21.1% 19.3% 19.0% 20.00% 800 10.00% 600 0.00% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q
Slide 16: CAPEX
CAPEX Tele2 Group Development per market (SEK million) (SEK million) +23% 90.00% 118 0 1,300 1 223 80.00% -40 1 154 107 -28 1 134 70.00% 1 154 1,100 60.00% 938 932 59 900 50.00% 40.00% 700 938 30.00% 20.00% 500 14.4% 17.6% 17.9% 17.2% 13.7% 10.00% 300 0.00% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q1 15 Sweden
Slide 17: Free cash flow
Free cash flow Total operations Tele2 Group 600 Development (SEK million) (SEK million) 500 400 -60% 300 200 169 100 158 0 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 -100 -96 -96 48 -137 -154 135 -25 -200 -154 -35 -300 -268 -291 -400 -202 Q1 15 EBITDA Interest etc Taxes Working capital CAPEX One-off items Discon
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 2.25 2.00 10.0 1.70 1.75 10.3 9.8 9.9 1.50 9.4 7.5 1.25 1.00 5.0 0.75 2.5 3.5 0.50 0.25 0.0 0.00 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Economic net debt Dividend, announced Economic net deb
Slide 19: 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 19
Slide 20: Summary
Summary TELE2
Slide 21: Key priorities moving forward
Key priorities moving forward Regain momentum in Sweden Commercialize and monetize 4G investments in Baltics/Croatia Accelerate growth in Netherlands Successful integration of Altel and pricing discipline Execute on Challenger Program Focused Winning Value Step-Change Technology People & C
Slide 22: 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 M2M & IoT Technology People
Slide 23: The End
THE END