Slide 1: Q1 2007 Financial Report
Q 1 2 0 07 L R E PO R T F I N A N C I A Lars-Johan Jarnheimer President and CEO
Slide 2: Tele2: Q1 2007 Results
TELE2: Q1 2007 RESULTS SEK MILLION 2007 2006 Q1 Q1 Continuing operations Operating revenue 12,837 12,243 Net customer intake (thousands) 281 617 EBITDA 1,488 1,221 • Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2 billion • Strong broadband intake during Q1 2007, adding a total of 254,
Slide 3: Update on the Current Strategic Review
UP DATE ON THE CURRENT STRATEGIC REVIEW • We will see result of the current strategic review in the second quarter • The first transaction is likely in the next couple of weeks • The transaction between Tele2 and SFR will receive a preliminary indication from the EU competition authorities in May •
Slide 4: Continued Shift Towards Infrastructure Based Services
CONTINUED SHIFT TOWARDS INFRASTRUCTURE BASED SERVICES Sales - Q1 2007 Sales - Q1 2006 35% 39% 42% 51% 14% 19% Mobile Mobile Broadband (resale & direct access) Broadband (resale & direct access) Fixed telephony resale Fixed telephony resale 4
Slide 5: EBITDA Contribution Will Follow
EBITDA CONTRIBUTION WILL FOLLOW EBITDA contribution per segment (SEK) 2000 1500 1000 500 0 Q1 2007 Q1 2006 -500 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB) 5
Slide 6: Continued Strong Performance in Mobile Telephony
CONTINUED STRONG PERFORMANCE IN MOBILE TELEPHONY SEK MILLION 2007 2006 Q1 Q1 Mobile Telephony Operating revenue 5,219 4,038 Net customer intake (thousands) 747 909 EBITDA 1,088 746 • Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2 billion • Russia and Baltic developing above expectatio
Slide 7: Strong Broadband Intake
STRONG BROADBAND INTAKE SEK MILLION 2007 2006 Q1 Q1 Broadband resale, DA/LLUB Operating revenue 2,276 1,602 Net customer intake (thousands) 255 144 EBITDA -361 -295 • Strong broadband intake during Q1 2007, adding a total of 254,000 new broadband customers • Broadband is being evaluated market by ma
Slide 8: Tele2 Italy: Direct Access
TELE2 ITALY: DIRECT ACCESS ITALY DA ITALY DA 60% 52 % 40% 20% 0% Q3 -06 Q4 -06 Q1 -07 -20% -40% -60% -80% -100% Q3 -06 Q4 -06 Q1 -07 -120% Net Intake Gross Margin 2 • Coverage improved to 40 % of Italian households. • Tele2 looks to expand beyond 50 % • Up-selling from single to dual play services •
Slide 9: Stable Margin – Increased Competition
STABLE MARGIN – INCREASED COMPETITION SEK MILLION 2007 2006 Q1 Q1 Fixed telephony resale Operating revenue 4,796 6,017 Net customer intake (thousands) -720 -436 EBITDA 649 662 • Fixed telephony EBITDA margin improved to 14 percent in Q1 2007 • Higher level of competition from primarily mobile operat
Slide 10: Q1 2007 Summarized
Q1 2007 SUMMERIZED • Strong development in Mobile Telephony, with a revenue growth of 29 % in Q1 • Continued strong broadband intake during Q1 2007, adding 254,000 new broadband customers • Improving EBITDA margins in fixed line. However, competition is increasing TELE2: CONTINUED OPERATIONS – Impor
Slide 11: No Change to Financial Guidance on 2007
NO CHANGE TO FINANCIAL GUIDENCE ON 2007 • Outlook for 2007 remains unchanged: “We expect significantly higher EBITDA and higher organic growth compared to 2006” 11
Slide 12: Financial Report – Donna Cordner
Q 1 2 0 07 L R E PO R T F I N A N C I A Donna Cordner EVP Corporate Finance & Treasury
Slide 13: Financial Overview for Q1 2007 – Continuing Operations
FINANCIAL OVERVIEW FOR Q1 2007 – CONTINUING OPERATIONS Q1 2007 Difference to Q1 2007 Revenues (MSEK) 12,837 594 5% EBITDA (MSEK) 1,488 267 22% CAPEX (MSEK) 1,181 3 0% Customer Net Additions (thousands) 281 -336 -54% 13
Slide 14: Operating Revenue per Segment
OPERATING REVENUE PER SEGMENT MOBILE (MSEK) (MSEK) FIXED TELEPHONY RESALE 6 000 10 000 8 000 4 500 6 000 3 000 4 000 1 500 2 000 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 BROADBAND RESALE DIRECT ACCESS & LLUB (MSEK) (MSEK) 1 000 1 800 900 1 600 800 1 400 700 1 200 600 1 000 500 800
Slide 15: EBITDA and Net Intake per Segment
EBITDA AND NET INTAKE PER SEGMENT MOBILE FIXED TELEPHONY RESALE MSEK '000 MSEK '000 1 600 1 000 600 1 200 1 400 400 800 1 000 200 1 200 0 800 1 000 600 -200 800 600 -400 600 400 400 -600 400 -800 200 200 200 -1 000 0 0 0 -1 200 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 EBITDA Net intak
Slide 16: P&L Impact from Broadband Growth
P&L IMPACT FROM BROADBAND GROWTH Q1 2007 Q4 2006 Q3 2006 P&L impact from Broadband growth (MSEK) 445 335 250 NET INTAKE Broadband resale (’000) 44 42 39 Direct access and LLUB (’000) 210 211 113 ACQUISITION COST Broadband resale (SEK) 1,550 1,450 2,050 Direct access and LLUB (SEK) 1,800 1,300 1,500
Slide 17: Mobile Sales +29%
MOBILE SALES +29 % MOBILE MOBILE (MSEK) MSEK '000 6 000 1 600 1 200 1 400 4 500 1 000 1 200 800 1 000 3 000 800 600 600 400 1 500 400 200 200 0 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake 17
Slide 18: Russia Sales +135%
RUSSIA SALES +135 % Russia Mobile Russia Mobile MSEK MSEK '000 1 200 350 1 200 300 1 000 1 000 250 800 800 200 600 150 600 400 100 400 50 200 200 0 0 -50 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake • Net intake of 644,000 customers to a total of 7,1 million cust
Slide 19: Baltic Mobile Sales +18%
BALTIC MOBILE SALES +18 % Baltic Mobile Baltic Mobile MSEK MSEK '000 1 200 450 250 400 1 000 350 200 300 800 150 250 200 600 100 150 400 100 50 50 200 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake • Revenue growth for the Baltic region was strong at 19 percent –
Slide 20: Sweden Mobile Sales +8%
SWEDEN MOBILE SALES +8 % Sweden Mobile Sweden Mobile MSEK MSEK '000 1 000 80 2 000 60 800 40 1 500 600 20 1 000 0 400 -20 500 200 -40 0 -60 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake • EBITDA-margin effected by higher marketing costs in Q1 2007 • More than 48 0
Slide 21: Nordic excl. Sweden Mobile Sales +30%
NORDIC EXCL. SWEDEN MOBILE SALES +30 % Nordic excl. Sweden - Mobile Nordic excl. Sweden - Mobile MSEK MSEK '000 800 80 100 80 60 600 60 40 40 400 20 20 0 Q4 Q1 Q2 Q3 Q4 Q1 0 200 -20 2006 2007 -20 -40 0 -40 Q4 Q1 Q2 Q3 Q4 Q1 -60 -60 2006 2007 Sales EBITDA Net intake 21
Slide 22: Net Debt
NET DEBT Net debt MSEK 18 000 3,6 3,2 15 000 2,8 12 000 2,4 2,0 9 000 1,6 6 000 1,2 0,8 3 000 0,4 0 0,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 2006 2007 Net Debt Net Debt to EBITDA 22
Slide 23: Do Not Forget
DO NOT FORGET Contacts Visit www.tele2.com Lars-Johan Jarnheimer Telephone: + 46 (0)8 562 640 00 • Conference call today President and CEO, Tele2 AB at 15.00 CET Web-cast at www.tele2.com Lars Torstensson Telephone: + 46 (0) 702 73 48 79 • Q2 2007: 25 July 2007 IR Director, Tele2 AB 23