Tele2 Ab Class A · OMXSTO:TEL2_A
Tele2 Ab Class A — Merger or Acquisition (November 2015)
15 slides from Tele2 Ab Class A's merger presentation, Nov 4, 2015
Slide 1: Way2Win in Kazakhstan
WAY2WIN IN KAZAKHSTAN November 4th, 2015 Tele2 AB
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation contains certain forward-looking statements that reflect the Company’s current views or expectations with respect to future events and financial and operational performance. The words “intend”, “estimate”, “expect”, “may”, “plan”, “anticipate”
Slide 3: 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 4: Transaction Highlights
Transaction Highlights Kazakhtelecom and Tele2 to combine in a JV their Kazakh mobile businesses, Altel and T2KZ 51/49 economic ownership, 49/51 voting rights respectively Tele2 will retain management control and consolidate the JV Key Tele2 to have a put option after year 3 on its 49% stake
Slide 5: Strategic Rationale
Strategic Rationale Robust platform to challenge the incumbents Data monetization potential Significant synergy opportunity Strong corporate governance
Slide 6: Robust platform to challenge the incumbents
Robust platform to challenge the incumbents H1 15 subscribers H1 15 service revenue H1 15 EBITDA (millions) (KZT billion) (KZT billion) 1.4 5.6 10.6 29.7 0.2 4.2 19.1 (0.3) (0.1) T2KZ Altel JV T2KZ Altel JV T2KZ Altel JV Combined market share: 22% Combined market share: 18% Stronger competitive po
Slide 7: Data monetization potential
Data monetization potential H1 15 service revenue market share H1 15 data volume market share JV Beeline 18% 12% Beeline Kcell 33% 12% Kcell JV 49% 76% Significant opportunity to leverage data leadership Source: Company data
Slide 8: Significant synergy opportunity
Significant synergy opportunity Migration of IT systems to common platforms Opex Reduction in SG&A costs ~4-6% of combined costs synergies Rationalisation of processes 1-2 years Consolidation and rationalisation of existing radio networks Capex Rollout of common 2G / 3G / LTE network
Slide 9: Strong Corporate Governance
Strong Corporate Governance T2KZ existing CEO will become JV CEO Kazakhtelecom to nominate CFO Tele2 Tele2 to nominate all other management roles management Operational control to remain with Tele2 control Tele2 to consolidate the JV JV operated on an arms-length basis by the partners Bo
Slide 10: Strong Corporate Governance
Strong Corporate Governance Zero tolerance on corruption - Code of Conduct (CoC) and Business Partner CoC Ability to exit if there is a material breach of the CoC Corruption Fairness opinion confirms fair market price Transparency regarding bank accounts Warranty on use of proceeds Ownersh
Slide 11: Summary
Summary In-market consolidation offers attractive opportunity Synergy benefits Improved scale Data monetization Balanced partnership between Tele2 and Kazakhtelecom Strong corporate governance JV operated on an arms length basis Put/call in year 3 Fully funded JV Future funding via ban
Slide 12: Appendix
Appendix TELE2
Slide 13: Transaction structure
Transaction structure Tele2 Kazakhtelecom 49% economic interest1 / 51% economic interest / 51 % voting rights 49 % voting rights Khan Tengri Holding B.V. 100% 100% T2KZ Altel 1) 31% economic interest on a fully diluted basis (taking account of Asianet’s future 18% earn out)
Slide 14: Financial profile of the JV
Financial profile of the JV FY14 Q1 15 Q2 15 T2KZ 3.3 3.7 4.2 Subscribers Altel 0.9 1.2 1.4 (million) Pro Forma 4.2 5.0 5.6 T2KZ 34.8 8.8 10.5 Revenue Altel 19.8 7.4 9.7 (KZT billion) Pro Forma 54.7 16.2 20.2 T2KZ 1.1 0.0 0.2 EBITDA Altel (3.5) 0.6 (0.8) (KZT billion) Pro Forma (2.4) 0.7 (0.8) T2KZ
Slide 15: The Beginning
THE BEGINNING