Slide 1: Fourth Quarter 2018
FOURTH UARTER 018 February 13, 2019 Tele2 AB TELE
Slide 2: Group highlights — Q4 2018
Group highlights — Q4 2018 Q4 2018 % change SEK billion Pro forma organic Revenue 7.8 3% End-user service revenue 1% 11%* Adjusted EBITDA Operating cash flow, rolling 12m *Including non-underlying items, see comments 2 Organic is constant currencies and including Com Hem pro forma Operating cash flo
Slide 3: Tele2 is becoming a true integrated challenger
Tele2 is becoming a true integrated challenger Drive FMC in Sweden B2C Sweden B2B turnaround Build on the momentum in the Baltics FMC through more-for-more, and increase customer satisfaction to drive superior growth versus the overall market FMC benefits in existing base — drive customer satisfacti
Slide 4: Growth and cost initiatives drive cash flow
Growth and cost initiatives drive cash flow e Low-single digit end-user service revenue growth — SEK 450m of revenue synergies Expected to be flat in 2019, which is a transition year, and low-single digit growth in the mid- term driven by strategy initiatives 2.) Mid-single digit adjusted EBITDA gro
Slide 5: Sweden
Sweden TELE2
Slide 6: Sweden Consumer — Strategy focused on FMC
Sweden Consumer — Strategy focused on FMC Mobile prepaid Convert to mobile postpaid Fixed tele & DSL Convert DSL to cable & fiber broadband. Opportunistically adjust price on fixed telephony DIT Convert churning DTT base into IPTV and upsell fiber broadband Mobile Postpaid Current position Strong #2
Slide 7: Sweden Consumer — Operational highlights
Sweden Consumer — Operational highlights RGUs & net adds — core and legacy services ASPU year-on-year growth (thousands, pro forma) (%, pro forma) 5% 4% 3% 3.4% ° 2.8% 2% 1% 0% — ° — ~0.1% -1% a =2% 04°17 Q1'18 Q2 18 Q3 18 Q4 18 Q1 18 Q2 18 Q3 18 Q4'18 Core: [Mi Mobile Postpaid MllFixed Broadband IM
Slide 8: Sweden Consumer segment — Financials
Sweden Consumer segment — Financials End-user service revenue (SEK million, pro forma, year-on-year growth %) Adjusted EBITDA and margin (SEK million, pro forma) +6% +6% i +3% 472. zn 1398 1,380 1,437 1,493 1,381 Q4°17 Q1 18 Q2 18 Q4'18 Q4'17 Q1'18 Q2 18 Q3 18 Q4'18 Core: [i Mobile Postpaid Mi Fixed
Slide 9: Mobile Fixed Solutions
269 261 264 280 246 335 325 309 306 298 468 472 475 473 485 Mobile Fixed Solutions – – –
Slide 10: Sweden Business segment — Financials
Sweden Business segment — Financials Revenue Adjusted EBITDA and margin (SEK million, pro forma) (SEK million, pro forma) [ v 151 145 = 504 f 421 352 1,058 1,048 1,025 1,063} Q4'17 Q1'18 Q2 18 Q3 18 Q4'18 Q4'17 Q1'18 Q2 18 Q3 18 Q4'18 = End-user = Equipment = Wholesale Operator mms EBITDA EBITDA ex.
Slide 11: Sweden overview
Sweden overview Total end-user service revenue Adjusted EBITDA and margin OCF and cash conversion, rolling 12m (SEK million, pro forma) (SEK million, pro forma) (SEK million, pro forma) 4297 4,249 4269 4,249 4,273 1,927 5,402 5,2d7 5,298 5,381 4,531 I : : : I Hi Q4'17- Q1'18— Q2'18— Q3'18 = Q4'18 Q4
Slide 12: International
International
Slide 13: Baltics — Operational highlights
Baltics — Operational highlights ASPU development Mobile RGUs Brand campaigns 3a, #24 - 3, (TELE LHISVAS. BEPERRETAS Q4'17 Q4'18 Q4'17 Q4'18 04 highlights — ASPU growth driven by continued migration to postpaid and successful pricing, including backbook price increases in Lithuania — Customer growth
Slide 14: Baltics — Financials
Baltics — Financials Mobile end-user service revenue Adjusted EBITDA and margin OCF and cash conversion, rolling 12m (SEK million) (SEK million) (SEK million) v I v 1077-1113 639 650 654 403 374 1006 1042 : ; I Q417 QU18 = Q2'18 = Q3'18 = Q4'18 Q4'17 QL18 §=Q218 §=Q818 =Q4'18 Q4'17 Q118 = Q218 = Q83
Slide 15: Kazakhstan (discontinued) — Financials
Kazakhstan (discontinued) — Financials Mobile end-user service revenue Adjusted EBITDA and margin OCF and cash conversion, rolling 12m (SEK million) (SEK million) (SEK million) [ +20% 7 613 628 650 : : I Q417 QU18 = Q2'18 = Q3'18 = Q4'18 Q4'17 QU18 = Q2'18—Q3'18 = Q4'18 Q4'17 Q118 = Q218 QB 18 = Q4'
Slide 16: Financial Overview
Financial Overview TELE2
Slide 17: Group results Q4 2018
Group results Q4 2018 Revenue 7,122 5,714 @ Legal basis, with Com Hem included from 5 Nov, 2018 Adjusted EBITDA 1,956 1,315 . eye: : . @ Items affecting comparability includes SEK 243m of costs Adjusted EBITDA margin (%) 27.5% 23.0% relating to the Com Hem merger, and SEK 149m positive Items affecti
Slide 18: Group cash flow Q4 2018
Group cash flow Q4 2018 SEK million Adjusted EBITDA, continuing operations Adjusted EBITDA, discontinued operations Financial items paid/received Taxes paid Changes in working capital Capex paid Other cash items Equity free cash flow, total operations Of which equity free cash flow, discontinued ope
Slide 19: Full year 2018 vs. Guidance
Full year 2018 vs. Guidance Tele2 Com Hem SEK billion, including Kazakhstan SEK billion, previous accounting principles Guidance Actual Guidance Actual Mobile EuS Mid-single digit growth 5% Underlying RiiRstratrars ts) 7.2 EBITDA growth 4 % 19 TELE2 Adjusted EBITDA 7.0-7.2 Capex ex. spectrum SEUSS
Slide 20: Synergy update
Synergy update Revenue Old target | SEK450m Updated target SEK 1,350m | SEK900m Change +50% — Total synergies upgraded by 50% with cost synergies up 100% — Timing of cost synergies upgraded from 5 to 3 years with 50% run-rate by end of 2019 — Restructuring cost of SEK 1.0 billion, up from SEK 600 mi
Slide 21: Financial guidance
Financial guidance Not including effects from IFRS16 Mid-term ambition 2019 21 End-user service revenue Ramp-up of initiatives in 2019 in a low-growth environment FMC cross-sell and monetization of customer satisfaction to drive growth in mid-term Adjusted EBITDA Growth in 2019 mainly driven by cost
Slide 22: Leading capex efficiency
Leading capex efficiency Tele2 capex/revenue in Sweden — phasing Capex / revenue — vs. European peers (Pro forma, excluding spectrum) (Group, excluding spectrum LTM) 30% 14% 12% 9 10% 20% 8% 15% 9 6% 10% 4% 2% 5% I 0% 0% 2011 2012 2013 2014 2015 2016 2017 2018 Ss &$ 3° SSMS Oy SKS Seg SS SES SE, & &
Slide 23: Shareholder remuneration and leverage
Shareholder remuneration and leverage Economic net debt to adjusted EBITDA, total operations (SEK billion) 17.8 2.0 EO -18 Dec 2017 EFCF Shareholder M&A and other Dec 2018 23 remuneration Dividend to be paid 2019 IFRS 16 * SEK 4.4 / share, total SEK 3.0bn * Two equal tranches, May and Oct + Distribu
Slide 24: To conclude...
To conclude... TELE2
Slide 25: Key priorities moving forward
Key priorities moving forward Reignite EuS Revenue growth in Sweden * B2C: Com Hem Mobile, launch FMC on the customer base * B2B: High margin OnNet growth Structural cost savings * Cost synergies of 900m within 3 years + Investigate further initiatives Build on the momentum in the Baltics Close the
Slide 26: Thank You!
THANK YOU!