Tele2 4q2012
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Tele2 AB report 4q2013

Tele2 AB report 4q2013
More about Tele2 http://www.mforum.ru/news/article/096339.htm

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Tele2 4q2012 Presentation Transcript

  • 1. FOURTH QUARTER 2012Tele2 ABFebruary 5, 2013
  • 2. Agenda • About Q4 2012 • Financial review • Concluding remarks2
  • 3. Tele2 Group Q4 Highlights • Net mobile customer intake of 0.7 million leading to a total customer base of 38.2 million • Net sales growth for the Group amounted to 6%, corresponding to SEK 11,275 million • EBITDA amounted to SEK 2,672 million, equivalent to a margin of 24% • CAPEX amounted to SEK 1,478 million3
  • 4. Market Area Russia: Overview Population Appr. 143 million Tele2 Russia  43 regions of Russian Federation  22.7 million subscribers  Mobile operator #4 in Russia in terms of subscribers and revenue Represents 30% of total net sales in Q4 2012 Focus  Continue to grow customer base and maximize the 2G opportunity  Evaluate possibilities to expand carefully through new licenses as well as by complementary acquisitions  Make progress on technology neutrality4
  • 5. Q4 Highlights Russia • Strong customer net intake of 373,000 • Stable EBITDA margin, amounting to 37% • ARPU grew by 4% YoY, and MoU by 7% YoYCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million24,000 800 4,000 20% 1,600 40%22,000 600 3,000 15% 1,200 38%20,000 400 2,000 10% 800 35%18,000 200 1,000 5% 400 33%16,000 0 0 0% 0 30% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Net sales (left) EBITDA (left) 5 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 6. The Russian mobile market overviewTELE2 SUBSCRIBERS AS PART OF TOTAL RUSSIAN NET ADDITIONSMOBILE MARKET Thousands of subscribersMillion subscribers 9% 10% 170% 5,000250 8% 4,000200 160% 158% 161% 3,000 154%150 153% 150% 148% 2,000 144%100 140% 1,000 134% 50 130% 0 -1,000 0 120% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 -2,000 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 -3,000 subbase ex-Tele2 Tele2 penetration %ARPU DEVELOPMENT APPM RUB 1/100 USD400 5.5350 5.0300250 220 223 218 229 234 235 4.5 201200 4.0150 3.5100 50 3.0 0 2.5 2009 2010 2011 Q1-12 Q2-12 Q3-12 Q4-12 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Source: Company data, AC&M Consulting Tele2 MegaFon6 Vimpelcom MTS
  • 7. Customer statistics Quarterly Churn19%17% • Tele2’s churn level is the lowest in the industry,15% showing normal seasonality development13%11% 9% 7% 9% 7% 8% 7% 8% 8% 7% 8% 9% 5% 7% 7% CUSTOMER SERVICE SATISFACTION OVERALL Top-3 on 10 point scale • Tele2’s own call centers show the highest 86% 88% 89% 85% 87% customer satisfaction in Russia combined with decreasing costs per contact Q411 Q112 Q212 Q312 Q412 -3% -1% -2% -2% -2% Bottom-3 on 10 point scale Source: Company data, AC&M Consulting Tele2 MegaFon7 Vimpelcom MTS
  • 8. Cost efficiency Tele2 Russia SALES and MARKETING COSTS / REVENUE CUSTOMERS per EMPLOYEE 120% Base level 2009 Tele2 100% -15% 80% Beeline 60% Megafon 40% 20% MTS 0% 2009 2010 2011 2012 0% 20% 40% 60% 80% 100% 120% ADMINISTRATIVE COSTS / REVENUE 120% Base level 2009 100% 80% 60% -36% Continued focus on 40% cost efficiency 20% 0% 2009 2010 2011 20128
  • 9. Q4 Revenue Source Development VOICE & OTHER and DATA REVENUE SPLIT DEVELOPMENT SEK millions 4,000 8% 9% 8% 3,000 9% 8% 2,000 92% 92% 91% 92% 91% 1,000 0 Q411 Q112 Q212 Q312 Q412 Voice & other Data access Voice and data demonstrate 8% and 15% YoY growth respectively Source: Company data9
  • 10. Regulatory update: significant developments Technology neutrality The mobile operators shall jointly conduct LTE trials on 1,800 MHz, with trial report to be submitted by June1, 2013. A decision is pending before end of 2013. On Dec. 28, 2012 the Prime Minister approved a roadmap for "Development of Competition and Improvement of Antimonopoly Policy” listing a number of issues impeding the development of the telecom market. Lack of TN is regarded as the main obstacle to the development of competition in the Russian telecom market, concluding that it is necessary to introduce TN by the end of 2013 MNP MNP launch is due on Dec. 1, 2013. Customer fee for porting shall not exceed 100 Rub. Details of MNP implementation such as regional or national porting, MNP database set-up, charges incurred for porting subs and MNP database administration etc. shall be defined by the Regulator by Q2, 2013 New GSM licenses GKRCH approved distribution of 9 regional GSM licenses (1800 MHz band) via auctions. Roscomnadzor is expected to work out the auctions terms and conditions as well as timing during Q1 2013 * GKRCh – State Commission on Radio Frequencies10
  • 11. Tele2 Russia forward looking statement The following assumptions should be taken into account when estimating the operational performance of the Russian mobile operations in 2013: • Tele2 expects total revenue of between SEK 13,700 - 13,800 million. • Tele2 expects EBITDA of between SEK 4,800 - 4,900 million.11
  • 12. Market Area Nordic: Overview Population 14.4 million Tele2 Sweden and Tele2 Norway Home market and test bed for new services Represents 40% of total net sales in Q4 2012 Sweden 29%; Norway 11% Focus  Sweden: Build on mobile growth and 4G roll-out coupled with household / corporate fiber strategy  Norway: Roll out own network and focus on bucket-price subscriptions12
  • 13. Q4 Highlights Tele2 Sweden • Net sales amounted to SEK 3,229 million and EBITDA amounted to SEK 859 million • Mobile service revenue growth of 5% YoY • Mobile EBITDA margin of 29%, affected by high expansion costs such as handset subsidies and higher than expected intake for Comviq postpaidMOBILE CUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million4,000 80 4,000 4% 1,000 40%3,750 40 3,000 2% 750 30%3,500 0 2,000 0% 500 20%3,250 -40 1,000 -2% 250 10%3,000 -80 0 -4% 0 0% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 13 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 14. Strong underlying revenue growth despite continued prepaid decline UNDERLYING MOBILE REVENUE GROWTH 6% 5% 4% 3% 2% 1% 0% Q1 2012 Q2 2012 Q3 2012 Q4 201214 * Underlying revenue excludes handsets and operator revenue
  • 15. Postpaid growth key to mitigate our strong position in a declining prepaid market PREPAID SHARE OF CUSTOMER STOCK TELE2 SWEDEN CUSTOMER CHURN PATTERN 60% 50% 40% 30% 20% 10% 0% 2H 2010 1H 2011 2H 2011 1H 2012 • External churn down 20% during Q3 and Q4 Market average Tele2 Sweden • Cannibalization between TELE2 SWEDEN MOBILE CUSTOMER STOCK brands on postpaid Thousands offerings lower than 2,400 expected 2,200 2,000 1,800 1,600 1,400 1,200 1,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2011 2011 2011 2012 2012 2012 2012 Postpaid Prepaid15
  • 16. Smartphone market development SALES of TOP TEN MOBILE PHONES SMARTPHONE INSTALLED BASE TELE2 SWEDEN (Q4 2012) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1201 1202 1203 1204 1205 1206 1207 1208 1209 1210 1211 1212 Regular handset Smartphone Note: Postpaid residential, quantity of handsets16
  • 17. Change in strategy already commenced17
  • 18. New distribution concept and prepaid product under Comviq brand18
  • 19. 4G main source of data growth in Sweden 3G and 4G DATA USAGE 4G NETWORK ROLL-OUT DEVELOPMENT MB Jun-11 Jan-12 Jun-12 Dec-12 3G 4G 99% population coverage end of Q119
  • 20. Continued pursuit of growth in line with new strategy Bucket price plans to handle voice to data transition Launching platform for upsale of data Augmenting Billing system and data warehouse, leading to a better understanding of our customers Continued roll-out of 4G network along with 4G handset push VoLTE implementation to improve network efficiency and voice quality Continued roll-out of Comviq distribution concept together with Reitan Continued roll-out of Tele2 stores Increased focus on B2B20
  • 21. Tele2 Sweden forward looking statement The following assumptions should be taken into account when estimating the operational performance of the Swedish mobile operations in 2013: • Tele2 expects total revenue of between SEK 10,100 - 10,300 million. • Tele2 expects EBITDA of between SEK 2,900 - 3,100 million.21
  • 22. Q4 Highlights Tele2 Norway • Strong focus on network roll-out • Satisfactory net intake of 15,000 mobile customers • Tele2 Norway reported total external revenue of SEK 1,222 million, of which SEK 1,153 million was mobile revenue • Mobile EBITDA negative, affected by high sales and marketing costs as well as handset subsidiesCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1,600 30 1,600 150 15% 100 10%1,200 15 1,200 50 5% 800 0 800 0 0% 400 -15 400 -50 -5% 0 -30 0 -100 -10% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 22 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 23. Tele2 Norway forward looking statement The following assumptions should be taken into account when estimating the operational performance of the Norwegian mobile operations in 2013: • Tele2 expects total revenue of between SEK 4,200 - 4,300 million. • Tele2 expects EBITDA of between SEK 70 - 80 million. • Tele2 expects capex of between SEK 900 -1,000 million.23
  • 24. Market Area Western Europe: Overview Population 108 million Leading the group in business to business services and consumer fixed broadband Represents 17% of total net sales in Q4 2012 Netherlands 12%; Germany 2%; Austria 3% Focus  Netherlands Build a full service MNO, while growing existing business  Austria B2B & continuous integration of Silver Server  Germany Grow Fixed Via Mobile product24
  • 25. Q4 Highlights Tele2 Netherlands • Successfully secured mobile licenses. Roll out of 4G network will make Tele2 the fourth mobile operator • Mobile intake continues at previous quarter levels, significant part in the high value mobile postpaid segment • EBITDA affected by high mobile acquisition costsCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1,200 40 1,600 10% 800 40% 5% 600 30% 900 20 1,200 0% 400 20% 600 0 800 -5% 200 10% 300 -20 400 -10% 0 0% 0 -40 0 -15% -200 -10% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 25 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 26. Dutch regulatory requirements • All frequencies are technology neutral • License duration: 17 years, valid until 2030 in sync with 2,600 MHz licenses • 11,000 existing sites, of which an increasing number are independent due to MNO’s selling off sites • MNOs have an obligation to share sites in towers, and to cooperate on roof top sites26
  • 27. MNO building blocks • Tele2 is well positioned • Many building blocks are already available • Most importantly our own fiber optic nation wide network = Tele2’s current Fiber optic Network27
  • 28. Dutch 4G launch 2x 10 MHz 800MHz band licenses activated on January 1st 2013 We will start rolling out our own out 4G Network in 2013 Ambition to launch as soon as possible with 4G propositions 4G technique will offer new experience to Dutch consumers Tele2 Netherlands has a growing mobile customer base (MVNO)28
  • 29. Tele2 Netherlands forward looking statement The following assumptions should be taken into account when estimating the operational performance of the Dutch mobile operations in 2013: • Tele2 expects total revenue of between SEK 1,600 – 1,700 million. • Tele2 expects EBITDA of between SEK -50 to -75 million. • Tele2 expects capex of between SEK 2,000 – 2,500 million, whereof licences for 4G/LTE SEK 1,400 million. • The mobile operations should reach EBITDA break-even 3 years after commercial launch of 4G/LTE services.29
  • 30. Q4 Highlights Tele2 Germany and Tele2 Austria • Tele2 Germany: Fixed via Mobile (FVM) partly compensates the decline in fixed, EBITDA margin affected by high acquisition costs on FVM • Tele2 Austria: Focus on growing the B2B segment resulted in an increased net intake TELE2 GERMANY TELE2 AUSTRIA EBITDA and EBITDA MARGIN EBITDA and EBITDA MARGIN SEK Million SEK Million 120 40% 120 40% 90 30% 90 30% 60 20% 60 20% 30 10% 30 10% 0 0% 0 0% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 EBITDA (left) EBITDA (left)30 EBITDA EBITDA margin (right) margin (right)
  • 31. Market Area Central Europe and Eurasia: Overview Population 28 million Represents 13% of total net sales in Q4 2012 Estonia 2%; Latvia 2%; Lithuania 3%; Croatia 3%; Kazakhstan 3% Focus  Continued rapid market share growth in Kazakhstan  Efficiency improvements in Baltics  Improvements in market share growth in Croatia31
  • 32. Q4 Highlights Tele2 Estonia • Commercial launch of 4G in November • Modernization of network currently ongoing • Focus on efficiency improvements, EBITDA affected by price war in the postpaid segmentMOBILE CUSTOMER BASE NET SALES and EBITDA andand CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million600 15 300 12% 80 40%450 8 225 9% 60 30%300 0 150 6% 40 20%150 -8 75 3% 20 10% 0 -15 0 0% 0 0% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Mobile customer base (left) Net sales (left) EBITDA (left) 32 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 33. Q4 Highlights Tele2 Latvia • Tele2 Latvia maintains high efficiency in a competitive market • EBITDA margin amounted to 32% • Rolling out 4G when commercially attractiveCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1,200 40 400 10% 120 40% 900 20 300 5% 90 30% 600 0 200 0% 60 20% 300 -20 100 -5% 30 10% 0 -40 0 -10% 0 0% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Net sales (left) EBITDA (left) 33 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 34. Q4 Highlights Tele2 Lithuania • EBITDA margin amounted to 29%, affected by high sales and marketing costs in the quarter due to strong competition on handset pricing leading to increased subsidiesMOBILE CUSTOMER BASE NET SALES and EBITDA andand CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million2,000 55 400 5% 160 50%1,500 40 300 0% 120 40%1,000 25 200 -5% 80 30% 500 10 100 -10% 40 20% 0 -5 0 -15% 0 10% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Mobile customer base (left) Net sales (left) EBITDA (left) 34 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 35. Q4 Highlights Tele2 Croatia • Strong sales growth of 13% YoY • Continuing to improve market position • Cash flow positive in Q4 and full year CUSTOMER BASE and NET SALES and EBITDA and CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGIN Thousands of customers SEK Million SEK Million1,000 90 500 20% 60 12% 750 30 375 13% 45 9% 500 -30 250 5% 30 6% 250 -90 125 -3% 15 3% 0 -150 0 -10% 0 0% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Net sales (left) EBITDA (left) 35 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 36. Q4 Highlights Tele2 Kazakhstan • Continuing strong net intake of 361,000 customers • Total number of customers amounted to 3.4 million • Continuing rapid roll-out of new base stations for increased coverageCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million3,750 1,000 300 500% 160 0%3,000 800 225 375% 80 -25%2,250 600 150 250% 0 -50%1,500 400 75 125% -80 -75% 750 200 0 0 0 0% -160 -100% Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Customer base (left) Net sales (left) EBITDA (left) 36 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  • 37. Overview of the Kazakh mobile market MOBILE SUBSCRIBERS – MARKET SHARE NET ADDITIONS Thousands of subscribers 5.5% 12.1% 100% 2,000,000 80% 1,600,000 1,200,000 60% 800,000 40% 400,000 20% 0 0% -400,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4* 10 11 11 11 11 12 12 12 10 11 11 11 11 12 12 12 12 Tele2 Kcell/Activ Tele2 Kcell/Activ Dalacom/Pathword Beeline Dalacom/Pathword Beeline37 * Q4 12 only Tele2 net additions
  • 38. Tele2 Kazakhstan forward-looking statement The following assumptions should be taken into account when estimating the operational performance of the Kazakh mobile operations in 2013: • Tele2 expects total revenue of between SEK 1,700 - 1,800 million. • Tele2 expects EBITDA of between SEK -100 to -200 million. • Tele2 expects capex of between SEK 550 – 650 million. • Tele2 expects to reach a long-term mobile customer market share of 30 percent.38
  • 39. Agenda • About Q4 2012 • Financial review • Concluding remarks39
  • 40. Group result Q4 SEK million Q4 2012 Q4 2011 ▲% Net sales 11,275 10,852 3.9% EBITDA 2,672 2,873 -7.0% EBITDA margin (%) 23.7% 26.5% -2.8% Depreciation & associated companies -1,145 -1,184 -3.3% • Net sales include equipment Depreciation of net sales (%) -10.1% -10.9% 0.8% sales of SEK 909 million One-off items -3 -26 (728) +25% EBIT 1,524 1,663 -8.4% Normalized EBIT 1,527 1,689 -9.6% • EBITDA margin development Normalized EBIT margin (%) 13.5% 15.6% -2.0% explained by higher expansion costs Financial items -360 -83 Taxes -599 -270 Net profit from continuing operations 565 1,310 -56.9% Discontinued operations - - Net profit 565 1,310 -56.9%40
  • 41. Group result full-year SEK million FY 2012 FY 2011 ▲% Net sales 43,726 41,001 6.6% EBITDA 10,960 11,212 -2.2% EBITDA margin (%) 25.1% 27.3% -2.3% Depreciation & associated companies -4,749 -4,158 14.2% Depreciation of net sales (%) -10.8% -10.1% -0.7% One-off items -558 -4 • Net sales include equipment EBIT 5,653 7,050 -19.8% sales of SEK 2,875 million Normalized EBIT 6,211 7,054 -12.0% (2,272) +27% Normalized EBIT margin (%) 14.2% 17.2% -3.0% Financial items -1,078 -674 Taxes -1,311 -1,625 Net profit from continuing operations 3,264 4,751 -31.3% Discontinued operations - -7 Net profit 3,264 4,744 -31.2%41
  • 42. Currency movements full-year 2% 1% 0% -1% -2% -3% -4% -5% -6% -7% -8% EUR RUB NOK KZT Average FY 2012 vs. average FY 2011 Fixing rate Dec 31, 2012 vs Dec 31, 2011 EUR/EUR pegged and RUB currencies represent 57% of external sales and 73% of EBITDA42
  • 43. Depreciation Depreciation and Depreciation as a percentage of net sales SEK million 1,400 12.5% 12.0% Change year-on-year for Q4 1,200 1,000 11.5% • Acquisition of Network Norway: 11.0% SEK 49 million 800 10.5% • Upgrade/replacement of networks in 600 10.0% the Baltics: SEK 52 million 400 9.5% • Reduction in Sweden: SEK -79 million 9.0% • Growth in Russia: SEK 41 million 200 8.5% 0 8.0% Q411 Q112 Q212 Q312 Q412 Depreciation Depreciation of net sales (%)43
  • 44. Financial items SEK million Financial items in income statement Q4 2012 Q4 2011 FY 2012 FY 2011 Interest income/costs -247 -175 -957 -483 Exchange rate differences, external 5 29 -14 -24 Exchange rate differences, intragroup -76 105 59 13 Other financial items -42 -42 -166 -180 Total -360 -83 -1,078 -674 Financial items in cash flow statement Q4 2012 Q4 2011 FY 2012 FY 2011 Interest paid -280 -216 -668 -36644
  • 45. Taxes SEK million Taxes in income statement Q4 2012 Q4 2011 FY 2012 FY 2011 Normal -500 -378 -1,474 -1,733 One-off -99 108 163 108 Total -599 -270 -1,311 -1,625 Taxes in cash flow statement Q4 2012 Q4 2011 FY 2012 FY 2011 Normal -497 -163 -989 -948 One-off - - - - Total -497 -163 -989 -948 • Net taxes were negatively affected by SEK -127 million due to decreased tax rate in Sweden from January 1, 2013 • Cash flow taxes 2013 expected to be SEK -1,000 million45
  • 46. Taxes Closing balances SEK million 5,000 4,000 4,263 3,000 3,296 2,977 2,000 1,000 0 -851 -933 -1,000 -1,114 -2,000 2010 2011 2012 Deferred Tax Assets Deferred Tax Liabilities46
  • 47. Cash flow SEK million Q4 2012 Q4 2011 FY 2012 FY 2011 OPERATING ACTIVITIES Cash flow from operations, excl. taxes and interest 2,579 2,859 10,744 11,261 Interest paid -280 -216 -668 -366 Taxes paid -497 -163 -989 -948 Change in working capital 13 -52 -408 -257 Cash flow from operating activities 1,815 2,428 8,679 9,690 INVESTING ACTIVITIES CAPEX -1,286 -1,753 -4,609 -5,572 Cash flow after CAPEX 529 675 4,070 4,118 Shares and other financial assets -15 -1,560 -215 -1,563 Cash flow after investing activities 514 -885 3,855 2,555 • Full-year 2012 CAPEX according to balance sheet SEK 5,336 million (6,105) • CAPEX for 2013 expected to reach SEK 6,000 million (incl. Dutch LTE license)47
  • 48. Pro forma financial debt profile Sources of funding SEK billion 20.0 16.9 17.5 14.9 15.2 15.0 12.8 12.1 12.5 10.0 7.5 5.0 2.5 0.0 -2.5 Q411 Q112 Q212 Q312 Q412 Revolving Credit Facility Russian bond Commercial paper Swedish bond Norwegian bond Other financing Put option Kazakhstan Cash Pro forma net debt48
  • 49. Debt maturity and currency profile Debt maturity profile Debt currency profile Gross debt SEK 16.6 billion (incl. unutilized SEK 27.3 billion) Gross debt SEK 16.6 billion 16 0.1 1.5 14 12 4.6 2.5 10 8 6 3.8 4.2 2.2 4 2.9 3.1 2.1 2 0.5 5.7 0 2013 2014 2015 2016 2017 2018< Bonds Commercial papers SEK incl. FX swap RUB Other bank loans Put option, fin.lease and other EUR incl. FX swap NOK Unutilized KZT USD49
  • 50. Tele2 in Debt Capital Markets Instrument Date of issue Maturity date Volume in MSEK* RUB Bond 5yr 2011-06-24 2016-06-24 13,000 MRUB 2,791 RUB Bond 3yr 2012-04-13 2015-04-18 6,000 MRUB 1,288 RUB Bond 2yr 2012-02-09 2014-02-14 7,000 MRUB 1,503 NOK Bond 5yr 2012-02-20 2017-02-24 1,000 MNOK 1,167 NOK Bond 3yr 2012-02-20 2015-02-24 300 MNOK 350 SEK Bond 2012-05-08 2017-05-17 1,500 MSEK 1,500 SEK Bond 2012-05-08 2017-05-15 800 MSEK 800 SEK PP Bond 2012-09-27 2014-03-27 500 MSEK 500 SEK PP Bond 2012-12-06 2015-03-06 750 MSEK 750 SEK PP Bond 2013-01-03 3 months rolling 500 MSEK 500 SEK CP on-going within 1yr 2,390 MSEK 2,390 Total 13,540 * Fixing rate 31 Dec, 201250
  • 51. Debt position and ratio Pro forma net debt / EBITDA 12 m rolling SEK billion / Ratio 20.0 2.00 17.5 1.75 2.9 2.9 3.2 15.0 1.50 2.9 2.9 12.5 1.25 10.0 1.00 16.9 7.5 15.2 14.9 0.75 12.8 12.1 5.0 0.50 2.5 0.25 0.0 0.00 Q411 Q112 Q212 Q312 Q412 Pro forma net debt Ordinary dividend, proposed/paid Extraordinary dividend, proposed/paid Leverage net (net debt to EBITDA, pro forma)51
  • 52. Debt position and ratio incl. NL LTE Pro forma net debt / EBITDA 12 m rolling SEK billion / Ratio 20.0 2.00 Leverage gross (1.78) 1.4 17.5 1.75 2.9 2.9 3.2 15.0 1.50 2.9 2.9 12.5 1.25 10.0 1.00 16.9 7.5 15.2 14.9 0.75 12.8 12.1 5.0 0.50 2.5 0.25 0.0 0.00 Q411 Q112 Q212 Q312 Q412 Pro forma net debt Ordinary dividend (paid May 2012) Extraordinary dividend (paid May 2012) Proposed ordinary dividend (to be paid May 2013) NL LTE license (paid January 2013) Leverage net52
  • 53. Group financials ● Mobile ● Fixed telephony ● Fixed broadband ● Other operations Group EBITDA and Group EBITDA margin Group Net Sales SEK million Group EBITDA margin SEK million 3,500 30.0% 12,000 3,000 28.0% 9,000 2,500 2,000 26.0% 6,000 1,500 24.0% 1,000 3,000 22.0% 500 0 20.0% 0 Q411 Q112 Q212 Q312 Q412 Q411 Q112 Q212 Q312 Q412 Group CAPEX (BS) and CAPEX/Sales ROCE (Normalized) SEK million CAPEX/Sales Percent 2,000 30.0% 25% 21% 20% 19% 1,500 22.5% 17% 15% 16% 16% 1,000 15.0% 10% 500 7.5% 5% 0 0.0% 0% Q411 Q112 Q212 Q312 Q412 Q411 Q112 Q212 Q312 Q41253
  • 54. Sweden – Mobile External revenue excl. equipment sales and Equipment sales Expansion costs SEK million SEK million 3,000 0 2,500 -100 2,000 -200 1,500 -300 1,000 -400 500 -500 0 -600 Q411 Q112 Q212 Q312 Q412 Q411 Q112 Q212 Q312 Q412 EBITDA SEK million 800 Change year-on-year for Q4 600 • Year-on-year revenue growth excl. equipment sales of 6% 400 • Year-on-year expansion costs increased by 200 SEK 122 million (33%) 0 Q411 Q112 Q212 Q312 Q41254
  • 55. Agenda • About Q4 2012 • Financial review • Concluding remarks55
  • 56. Concluding remarks Continue to grow as an operator Manage the shift from voice to data Continue to migrate from prepaid to postpaid Invest in new growth initiatives56
  • 57. Q&A57