Tele2 Россия / VTB deal

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Презентация для прессы и инвесторов. На тему покупки Tele2 группой ВТБ, предположительно в интересах Ростелеком.

Презентация для прессы и инвесторов. На тему покупки Tele2 группой ВТБ, предположительно в интересах Ростелеком.

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  • 1. SALE OF TELE2 RUSSIAPress and Analyst PresentationMarch 27, 2013Mats Granryd
  • 2. 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” or similar expressions regarding indications or forecasts of future developments or trends, which are not statements based on historical facts, constitute forward-looking information. Although the Company believes that these statements are based on reasonable assumptions and expectations, the Company cannot give any assurances that such statements will materialize. Because these forward-looking statements involve known and unknown risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statement. The forward-looking statements included in this presentation apply only to the date of the presentation. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. Any subsequent forward-looking information that can be ascribed to the Company and the Group or persons acting on the Company’s behalf is subject to the reservations in or referred to in this section.3
  • 3. Tele2 has Agreed to Sell Tele2 Russia to VTB Group • A cash transaction comprising $2.40 billion (approximately SEK 15.6 billion) in equity value and $1.15 million (approximately SEK 7.5 billion) in Net Debt Attractive Value • AV/EBITDA 2012 4.9x • Capital gain of SEK 15.6 billion • Monetisation of Tele2’s 12 years of investing and building a successful business in Successful the Russian market. Total investments amount to SEK 15.4 billion and total return, Monetisation & including proceeds from sale, amount to SEK 31.9 billion Shareholder Returns • Following the closing of the transaction, Tele2 is proposing to distribute SEK 28 per share, in total SEK 12.5 billion by means of a share redemption program Transformed • Attractive and diversified market mix and a strong spectrum portfolio driving growth Tele2 Poised for Continued • Strong balance sheet will enable Tele2’s strategic flexibility and possibilities of Success maintaining an attractive shareholder remuneration policy Notes 1. All values converted from USD using current SEK/USD FX rate of 6.484
  • 4. VTB Group • Created as a Russian foreign trade company in 1990, VTB Group has grown to become a listed international Group of companies active mainly in Russia, Europe and the CIS • The Private Equity arm, VTB Capital, was formed in 2008 and has since made over a dozen History investments and attracted significant co-investments from leading international investors. The combined market equity value of the companies that VTB Capital and its co-investors control is estimated at over five billion USD • VTB Capital was voted the best PE firm in Russia in 2012* • The current portfolio of private equity investments is comprised of companies operating Investment across a variety of industries, including TMT and Media focus • Such investments include IT services companies EPAM and Luxoft, advertising company Russ Outdoor, integrated telecoms operator Vivacom and others • VTB Capital’s holding period is normally 3-5 years after which it sells its investments through public listings or trade sales • During the investment holding period, VTB Capital plays an active part in the governance of Investment portfolio companies, by helping develop growth strategies, creating consolidation holding period opportunities and improving efficiencies and governance • VTB Capital has established a strong track record in exciting investments, both to private investors and via public markets, such as EPAMs New York listing last year, which was the first IPO of a CIS company on the NYSE in over eight years5 *by Private Equity International Magazine
  • 5. Background of the Transaction Value maximisation for Tele2 and its shareholders Deal certainty, particularly with regards to financing and regulatory considerations Expeditious process with minimal disruption to the operations of Tele2 Russia Strong balance sheet for Tele2 Group, SEK 12.5 billion distribution to shareholders, while maintaining flexibility to pursue growth opportunities beyond current footprint6
  • 6. Tele2 Russia has Shown Stellar Growth Since its Entry into the Market Subscribers ‘000s Phase 1 Phase 2 Phase 3 Initial Launch Market Penetration Market Expansion 2001- 2004 2005-2006 2007-2012 28 000 • Tele2 enters Russian market via acquisition of 12 regional • launches a GSM network in • Acquisition of Teleset’s mobile network in the region of Kaliningrad mobile operators Voronezh Region and • Launch of network in the Krasnodar Region and Adygei Republic • Launch of GSM networks in Russia acquires a cellular operator in • The company continues to invest in rollout, despite challenging economic conditions Lipetsk 22 716 • Acquires a cellular operator in Voronezh Region • Acquires four GSM operators in Arkhangelsk, Murmansk 20 636 21 000 and Novgorod Regions and in the Komi Republic 18 438 • Lipetsk Region and Komi Republic relaunched under Tele2 brand 14 451 14 000 10 422 8 560 7 000 6 453 3 274 1 344 208 486 174 0 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A Revenue (1) 1.2 1.2 1.2 2.1 4.1 10.3 18.1 25.3 29.4 42.7 51.9 59.5 (RUB Bn) YoY Growth n.a. 4% (2%) 80% 71% 151% 76% 40% 16% 45% 22% 11% EBITDA (1) 0.3 0.3 (0.2) (0.7) (0.6) 2.1 5.8 8.6 9.7 14.9 20.3 21.7 (RUB Bn) % Margin 25% 25% (11%) (35%) (15.%) 20% 32% 34% 33% 35% 39% 37% Source: Company Information Notes7 1. For reference current RUB/SEK FX rate of 0.20942
  • 7. Transformed Tele2 Group2012 Full Year Financials(SEKm) SE NL NO KZ HRRank 2/4 4/4 3/3 3/4 3/3 12,699 5,267 4,749 957 1,321Sales (41%) (17%) (15%) (2%) (4%) 3,365 1,549 214 -387 60EBITDA (54%) (25%) (3%) (n/a) (1%)Nr. of FTEs 1,576 1,016 437 663 133Nr. of Subs 4.6 1.0 1.2 3.4 0.8(millions)(SEKm) LAT LIT EST GER AUSRank 2/3 1/3 2/3 n/a n/a 1,036 1,206 886 946 1,353Sales (4%) (4%) (3%) (3%) (4%) 358 433 236 278 333EBITDA (6%) (7%) (4%) (4%) (5%)Nr. of FTEs 275 103 272 82 355Nr. of Subs 1.0 1.8 0.5 0.8 0.3(millions)8
  • 8. Tele2 Well-Positioned for Future Growth Leading Infrastructure-Based Challenger Uniquely Positioned to Capitalize on Mobile 1 with an Attractive Market Mix 2 Data and Internet Growth Strong Opportunities for Enhanced Cost 3 Efficiency 4 Unique Position for Continued Growth9
  • 9. Leading Infrastructure-Based Challenger with an Attractive Market Mix Strong Spectrum Portfolio Best Commercial Offer in the Market Price Perception – Postpaid Sweden Percent of respondants 30% 25% Telia Tele2 Telenor 20% Tele2 Telia 15% 3 10% Comviq (Tele2) 5% Halebop 0% Q2-08 Q2-09 Q2-10 Q2-11 Q2-12 Attractive Market Mix Infrastructure-based challenger Attractive macroeconomic footprint Best commercial offer in the market Uniquely positioned to gain market share from incumbents10
  • 10. Uniquely Positioned to Capitalise on Mobile Data and Internet Growth Demand Growth – European Mobile Data Usage Tele2 Sweden - Mb/week Pb 10,0 8,0 6,0 4,0 2,0 0,0 2009 2010 2011 2012 2013e 2014e 2015e 2016e Aug 2011 May 2012 Jan 2013 Smartphone 3G Tablets and dongles 3G Smartphone LTE Tablets and dongles LTE 3G 4G MBB Penetration (“Large Screen Data Only”) Tele2 Kazakhstan – Mb/week EUR/Sub/month • GermanyNetherlands Spain France Italy UK Finland Sweden Austria 0% 5% 10% 15% 20% 25% 30% 35% 2012-1 2012-13 2012-25 2012-37 2012-49 2013-911 Source: Internal company information, Arthur D little , BNP Paribas and Analysys Mason
  • 11. Strong Opportunities for Enhanced Cost Efficiency Cost Leadership Reduction in Network Cost AT Kearney cost benchmark Principle of JV Saving CAPEX & OPEX 33.1% -0.9% 30.8% 28.0% 27.1% 25.8% 25.6% 23.2% 23.1% 22.3% 100% 21.7% 40% 90% Tele2 saving JVs Capex If Tele2 would 50% build own & Opex Tele2 share network of JVs Capex Capex & Opex T2 2010 T2 2011 & Opex Best practice in Swedish network JV structure Cost Leadership Significant mobile network capex and opex Tele2 continues to reduce the cost gap but savings is still second best Netherlands Opportunities to co-build due to obligation to share sites and towers12
  • 12. Unique Position for Continued Growth Revenue Tele2 Group ex. Russia SEK Bn • Tele2 expects to achieve compounded 40 annual revenue growth for the Group of between 5 – 7 percent until year 2015, 30 reaching at least SEK 35.6 billion. 20 29,9 29,5 30,7 • Tele2 expects to achieve compounded 10 annual EBITDA growth for the Group of between 10 – 12 percent until year 2015, 0 2010A 2011A 2012A 2015E reaching at least SEK 8.3 billion. EBITDA Tele2 Group ex. Russia • All operations in the Group should have at SEK Bn least 20 (earlier 24) percent return on 10 capital employed (ROCE). 7,5 • The positive operational development over the next three years will predominantly be 5 driven by strong mobile development in 5,8 6,7 6,2 Sweden, the Netherlands, Norway and 2,5 Kazakhstan. 0 2010A 2011A 2012A 2015E13
  • 13. Tele2’s Strengths Tele2 – a European mobile operator ‒ Mobile is our strategy We will be the champions of customer value in everything we do ‒ We will excel in our core assets, the customer relationship and mobile access ‒ We will be the operator of choice ‒ We will continue to innovate in products, price and packaging ‒ Through operational excellence, we will lead on cost and price ‒ We do the unexpected, putting our edge to use ‒ We are fast and react quickly with a time to market beating the competition We always provide our customers what they need, for less14
  • 14. Net debt development scenario SEK billion 1.75x EBITDA 2012 16.3 1.25x EBITDA 2012 -23.0 9.0 12.5 3.2 Pro forma net debt Proceeds from sale Ordinary dividend Extraordinary Net debt excl. Net debt excl. Tele2 Q412 incl. Dutch dividend Tele2 Russia Russia LTE license15
  • 15. Tele2 to Return SEK 15.7 Bn to its Shareholders • The Tele2 Group will maintain its balance sheet target of a net debt to EBITDA Target ratio of between 1.25 and 1.75 times over the medium term to cater for an Leverage efficient capital structure • To reach its targeted level for an efficient capital structure following the closing of the transaction, Tele2’s Board of Directors proposes to distribute SEK 28 SEK 12.5 Bn per share, totaling SEK 12.5 billion, by means of a redemption of shares Share • The redemption of shares will be subject to approval at the Extra General Redemption Meeting, which will be called by the Board of Directors upon closing of the Program transaction • The dividend for 2012 of SEK 7.10 per share, totaling SEK 3.2 billion, will be paid as previously announced16
  • 16. Transaction Timetable • 27 March 2013: Agreement with VTB Group to sell Tele2 Russia announced • The transaction is expected to close shortly • Following closing of the transaction the Board of Directors will call an EGM to propose the SEK 12.5 billion capital distribution through the redemption of shares17
  • 17. Summary Compelling offer and transaction structure, crystallizing our success in Russia The transformed Tele2 Group offers a convincing investment story Strong balance sheet enabling operational flexibility and attractive shareholder remuneration policy18
  • 18. 19