Slide 1: Fourth Quarter
FOURTH QUARTER February 3, 2020
Slide 2: Group highlights
Group highlights SEK billion (YoY organic growth) Q4 2019 Jan-Dec 2019 Guidance End-user service revenue 5.0 (0%) 19.9 (0%) ~0% Underlying EBITDA ex. IFRS 16 2.4 (10%) 9.3 (6%) Mid-single digit Capex ex. spectrum and leases 0.7 2.4 2.3-2.6 2 Growth numbers based on constant currencies and including
Slide 3: Phase 1 completed: Tele2 is now an integrated operator
Phase 1 completed: Tele2 is now an integrated operator — Launched FMC more-for-more strategy across all brands - 219k customers now on benefits — Rebranded Tele2, introduced new family plans and made first ever frontbook price adjustment Sweden B2C — Launched Com Hem mobile brand — First year of pos
Slide 4: Smartest telco in the world creating a society of unlimited possibilities
Smartest telco in the world creating a society of unlimited possibilities 4
Slide 5: Phase 2 initiated: become the smartest telco in the world
Phase 2 initiated: become the smartest telco in the world — Continue more-for-more FMC strategy to reduce churn and build pricing power — Two new growth drivers – launching standalone OTT service and new digital FMC brand Sweden B2C — Backbook pricing to be initiated in Q1 2020 — Optimize brand port
Slide 6: Sweden
SWEDEN TELE?
Slide 7: Sweden Consumer
Sweden Consumer RGUs & net intake - core and legacy services ASPU year-on-year growth End-user service revenue* (thousands, proforma) (% proforma) (SEK million, proforma, year-on-year growth %) 5% +34 +35 +23 +4% +3% +2% +3% +2% +28 +20 664 665 3% 454 451 658 661 663 474 466 464 +3 +2 +1 +1 -3% -4%
Slide 8: Penny: The only FMC-offer in the digital no-frills segment
Penny: The only FMC-offer in the digital no-frills segment A future telco supported by a unique FMC-offering Launching a digitally disruptive FMC brand to grab a fair share of the growing no-frills segment. Proposition — For the modern Swede who’s adopted Spotify, Airbnb, who swish, swipe and doesn’
Slide 9: Comhem Play+: Launching our own streaming service
Comhem Play+: Launching our own streaming service Taking the next step to solidify our leadership in the TV market Entering the rapidly growing SVOD segment by leveraging our platform, content agreements, and the entire Tele2 Sweden customer base. A natural next step in our TV transformation and a p
Slide 10: Sweden Business
Sweden Business Mobile RGUs & net intake Mobile ASPU End-user service revenue* (thousands, proforma) (SEK, proforma) (SEK million, proforma, year-on-year growth %) 200 -1% -2% -2% -3% -3% 190 +7 +17 +4 +3 276 +8 264 282 257 288 180 +3% +0% +4% +6% +4% 170 163 296 295 276 271 271 160 -12% -9% -11% -1
Slide 11: Sweden overview
Sweden overview End-user service revenue Underlying EBITDA ex. IFRS 16 and margin Underlying EBITDAaL - Capex* and cash (SEK million, proforma, year-on-year growth %) (SEK million, proforma) conversion, rolling 12m (SEK million, proforma) +11% 5,480 5,216 5,200 5,212 5,251 -1% -1% -2% 0% -1% 2,032 1
Slide 12: Baltics
BALTICS
Slide 13: Baltics – Operational highlights
Baltics – Operational highlights RGUs & net intake – mobile services ASPU year-on-year growth (thousands) (%) -35 -14 +41 +28 -18 +11% 8% +7% 1,902 +6% 1,861 1,857 1,875 1,895 3% -2% 951 946 961 963 954 437 431 439 440 437 -7% Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q4 ’19 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q4 ’19 Est
Slide 14: Baltics – Financials
Baltics – Financials End-User service revenue Underlying EBITDA ex. IFRS 16 and margin Underlying EBITDAaL - Capex* and cash (SEK million, year-on-year growth %) (SEK million) conversion, rolling 12m (SEK million) +10% +8% +9% 1,400 1,295 100% +6% 1,255 +7% +7% 1,165 1,205 500 1,200 80% 1,115 90% 43
Slide 15: Financial Overview
FINANCIAL OVERVIEW
Slide 16: Group results Q4 2019
Group results Q4 2019 SEK million Q4 2019 Q4 2018* Comments Revenue 7,270 6,606 1 Items affecting comparability mainly include cost related to Underlying EBITDA 2,695 1,875 the integration with Com Hem Margin (%) 37% 28% 2 D&A includes SEK 305m amortization of surplus value from Items affecting comp
Slide 17: Group cash flow Q4 2019
Group cash flow Q4 2019 Q4 Q4 FY Comments SEK million 2019 2018 2019 1 EBITDA from discontinued operations impacted by positive Underlying EBITDA, continuing effect from earnout related to the sale of Tele2 Austria 2,695 1,875 10,525 operations Items affecting comp., continuing -104 -347 -711 2 Cape
Slide 18: Leverage at 2.5x
Leverage at 2.5x Economic net debt to underlying EBITDAaL* Comments (SEK billion) – Economic net debt reduced by SEK 3.1 billion compared to 2.8 December 2018 as SEK 7.2 billion in shareholder 27.8 2.8 remuneration was covered by cash flow generation, 2.8 proceeds from divestments and repayment of t
Slide 19: Com Hem synergy update – cost program completed
Com Hem synergy update – cost program completed Realized in Q4 2019 Realized in 2019 Run-rate (Annualized at end of 2019) Opex synergies (SEK million) 200 500 800 Almost 3/4 of overlapping customer base on FMC benefits Revenue New FMC brand in the digital no frills segment to be launched in 2020 syn
Slide 20: New business transformation program to become the smartest telco in the world
New business transformation program to become the smartest telco in the world At least SEK 1 billion of cost reduction in three years — In addition to the run-rate of SEK 800 million already achieved in 2019 — Executed in 2020-2022, with back-end loaded delivery of cost reduction Aiming for radical
Slide 21: Guidance for 2020 and the mid-term
Guidance for 2020 and the mid-term End-user service revenue Underlying EBITDAaL CAPEX1 unchanged unchanged 2020, updated Mid-term Low-single digit Mid-single digit 2.8-3.3 ambition growth growth Low-single digit Mid-single digit 2020 2.5-3.0 growth growth – Gradually ramping up through – Driven by a
Slide 22: To conclude...
TO CONCLUDE...
Slide 23: Key priorities going forward
Key priorities going forward Reignite end-user service revenue growth in Sweden B2C: Win the Swedish household through FMC — Execute launch of two new growth drivers: the standalone OTT service Comhem Play+, and the new digital FMC brand PENNY — Address remaining overlap and monetize increased custo
Slide 24: Thank you!
THANK YOU! TELE?
Slide 25: Tele2
TELE