The document provides an overview of Tele2's business for investors. It discusses Tele2's operations across multiple markets in Europe and Eurasia, with a focus on its growth in Russia and the Nordic region. Financial highlights from Q1 2010 show increased EBITDA and normalized EBIT margins year-over-year. Tele2 reiterates its goals of achieving price leadership, high network quality, and targeting a top 2 market share position in individual countries.

1. NEW YORK & TORONTO
ROADSHOW
28-30 June 2010

2. AGENDA
Tele2 in Brief
Market Area Update
Financial review
Fi i l i
Concluding remarks
2

3. TELE2 MOBILE EASTERN EUROPEAN
GROWTH MACHINE
• 28 million customers in 11 countries
• We have grown our mobile footprint, today covering more than 100
million people with controlled li
illi l ith t ll d licenses
Mobile Fixed broadband Fixed telephony Other operations
6%
15%
17%
62%
Percentage of sales, 2009
3

4. TELE2 FOOTPRINT
RUSSIA
Mobile
SWEDEN
Full product suite
NORWAY
Mobile, Fixed telephone
ESTONIA
Mobile, Fixed telephone
LATVIA
Mobile, Fixed telephone
M bil Fi d t l h
LITHUANIA
Full product suite
NETHERLANDS
Full product suite
GERMANY
Fixed broadband,
fixed telephony KAZAKHSTAN
Mobile
AUSTRIA Croatia
Fixed broadband, Mobile
fixed telephony
4

5. TELE2 ALWAYS PROVIDES THE
• P i l d hi
Price leadership
through best in
class cost control
• Price winning
g
quality network
• Standardized
product portfolio
5

6. AGENDA
Tele2 in Brief
Market Area Update
Financial review
Fi i l i
Concluding remarks
6

7. MARKET AREA NORDICS
Mobile
• Positive revenue growth
• Solid customer intake in postpaid
• Secured No1 market share position in
prepaid mobile internet in Sweden
• Roll-out of 4G in Sweden and 3G in Norway
Market strategy
• Further develop and calibrate our increased
focus on mobile postpaid segment
7

8. SHIFT TOWARDS SMART PHONES
Smartphones 2010 Smartphones 2008
LOW HIGH
ARP ARPU
U Tele2/Comviq
target segment
• Smart Phones are becoming mass market, mainly driven by iPhone
- Smartphone prices are coming down which will drive the shift even faster
• Demand for mobile data is increasing, also for handset customers
- Data represented 40% of the revenue growth in the residential mobile market 2009
• Fixed to Mobile substitution
- 14% of Swedish population have actively substituted their fixed phone with a mobile
only service
• Prepaid market value is declining in relation to Postpaid
- Prepaid has gone from 35% of total market value in 2005 to 29% in 2009. We
predict that it will drop further down to 20% in 2015
8

9. MARKET AREA RUSSIA
Mobile
• Record high EBITDA margin in mature
regions in Q1 2010
• Record high net intake in Q1 2010
– Adding 949 000 customers
– 16.1 million customers as of May 2010
Market strategy
• Continue unique distribution strategy
• Increase customer life time value in the old
regions
i
• Focus on customer intake in the new
regions
i
9

10. RUSSIAN TELECOM MARKET
Player License Cover, # Regions May 2010
MTS 82 regions 69 845 174
g
MegaFon 83 regions
g 52 665 805
Vimpelcom 80 regions 50 950 904
TELE2 37 regions 16 102 000
*Source: ACM
10

11. MOBILE SUBSCRIBER PENETRATION
Penetration levels in Tele2 licensed areas
• Market penetration: 146%*
• Active SIM penetration: 95%**
• Estimated human penetration: 82%***
* & ** Source: ACM* and internal TELE2 research**
11

12. TELE2 RUSSIA IS EXPANDING
• 37 regions with a population coverage of 61 million
• Over 16 million customers
- 339 000 in May
- 363 000 in April
12

13. HIGHLIGHTS TELE2 RUSSIA
Net Intake - New regions Net Intake - Old regions EBITDA margin
1400 38%
36%
1200
34%
1000
32%
nds)
800
(In thousan
30%
600 28%
26%
(
400
24%
200
22%
0 20%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
13

14. CLEAR BUSINESS GOALS THROUGH
EVOLUTION
Perceived pric leadership Subscriber base
Defender 17 REGIONS
Challenger Retention
ARPU protection
p/
Subscribers acquisition
Newcomer
ARPU protection
Retention
ce
Subscribers acquisition
S b ib i iti 20 REGIONS
P
1,5 – 2 years 2,5 – 3 years >3 years
14

15. TELE2 RUSSIA – OLD REGIONS
15

16. TELE2 IS NUMBER ONE
IN 14 OF 17 OLD REGIONS
Tele2 share Beeline Share MTS Share Megafon Share Other Share
40%
rket share in existing regions, %.
%
37%
35%
30%
25%
21% 21%
20% 18%
i
15%
10%
3%
5%
Mar
0%
Source: Internal Tele2 research
As of January 2010
16

17. TELE2 RUSSIA NEW REGIONS
KALININGRAD
PETROZAVODSK
PSKOV
TVER NARYAN-MAR
VOLOGDA
BRYANSK KALUGA
KOSTROMA
OREL TULA
VLADIMIR
RYAZAN
KIROV
TAMBOV
KRASNODAR
TURA
ADYGEI
TOMSK
NOVOSIBIRSK
17

18. MARKET AREA CENTRAL EUROPE
AND EURASIA
Mobile
• Defend market share and expand when
possible
• First signs of economic recovery in the Baltic
states
Market strategy
• Economic turmoil creates opportunities for a
price leader in the Baltic states
• Reach break even in Croatia 2H 2010
18

19. HIGHLIGHTS TELE2 BALTIC REGION
EBITDA CAPEX EBITDA - CAPEX
500
400
300
lion)
200
(SEK mill
100
0
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
-100
-200
19

20. KAZAKHSTAN
• Market entrance in line with expansion strategy in
Eurasia
• New CEO in place
• Operate under the brand name NEO
nder
- Re-launch H2 2010
• Network roll-out
20

21. MARKET AREA WESTERN EUROPE
Corporate segment
p g
• Gold standard for the group in the
Netherlands
Market strategy
• Investing for the future in the Netherlands
g
• Further restructuring in Austria
• Cash flow focus in Germany y
21

22. AGENDA
Tele2 in Brief
Market Area Update
Financial review
Fi i l i
Concluding remarks
22

23. Q1 2010 GROUP RESULTS
SEK million Q1 10 Q1 09 Change %
Continuing operations, Net Sales 9,535 9,828 -3%
EBITDA 2,358 2,244 5%
- EBITDA margin (%) 24,7%
24 7% 22,8%
22 8%
Depreciation and joint venture -809 -893
- Depreciation of net sales (%) 8,5% 9,1%
One-off items
O ff it -3 -4
EBIT 1,549 1,351
Normalized EBIT 1,546 1,347
- Normalized EBIT margin (%) 16,2% 13,7%
Financial items 42 -592
Taxes 339
-339 -281
281
Net result, continuing operations 1,249 474
Net result, discontinued operations 19 197
Net result 1,268
1 268 671
23

24. CASH FLOW FOR Q1 2010
SEK million Q1 10 Q1 09
OPERATING ACTIVITIES
Cash flow from operations, less paid taxes 2,341 1,923
Taxes paid -233 -456
Changes in working capital 183 364
CASH FLOW FROM OPERATING ACTIVITIES 2,291 1,831
INVESTING ACTIVITIES
CAPEX -608 -1,149
Cash Flow after CAPEX 1,683 682
Acquisition and sale of shares and participations, net -819 -97
864 585
24

25. ROCE
20%
19%
18%
17%
16%
15%
14%
13%
12%
11%
10%
9%
8%
7%
6%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2007 2008 2009 2010
25

26. GROUP FINANCIAL PROFILE
Net debt Net debt incl JV
incl.
Net debt/ EBITDA 2009 Net debt incl. JV/ EBITDA 2009
25 000 2,5
20 000 2
on)
SEK millio
15 000 1,5
10 000 1
(S
5 000 0,5
0 0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
07 07 07 08 08 08 08 09 09 09 09 10
26

27. TELE2 GOING FORWARD
• B t Deal position
Best D l iti
– Perceived price leader
– Expected quality
• Targeting a long term mobile EBITDA margin on
own infrastructure at least 35 percent
p
• All operations should have the ambition of
reaching ROCE of at least 20 percent
• The capability to reach a top 2 position, in terms of
customer market share, in an individual country or
region
27

28. SWEDEN OUTLOOK
• Tele2 will continue to target the p p
g postpaid segment, which in the longer
g , g
term will lead to:
– Increased ARPU
– Lower churn
• In the short term, this strategy will lead to higher total acquisition costs
, gy g q
resulting in:
– A full year EBITDA margin in the range of 33-35 percent depending on
customer intake
28

29. RUSSIA OUTLOOK
• Subscriber base should be able to reach 19-20 million by YE 2011
y
• Maintain ARPU growth at 5 percent by 2011
• EBITDA 2010-2011
– Old regions’ EBITDA margin should stabilize at 45 percent
regions
– New regions’ EBITDA margin should break even 2 years from launch
– EBITDA contribution from new regions should be in the range of SEK -600
to -800 million
800
– Russia’s total EBITDA margin should develop in the range of 27-32
percent
• Capex 2010-2011
2010 2011
– Accumulated Capex in Russia should be in the range of SEK 4.5-5.0
billion
• Selected acquisitions – when available and under right conditions
29

30. CROATIA OUTLOOK
”WE WILL REACH
EBITDA BREAK
EVEN DURING
2H 2010”
30

31. NET DEBT AND DIVIDEND TARGETS
• Shareholder remuneration
– “Tele2’s intention over the medium term is to pay a progressively
increasing ordinary dividend”
• Long-term financial leverage
– “Tele2’s longer-term financial leverage, defined as the
net debt /EBITDA ratio, should be in line with the industry and the
markets in which it operates”
• Short-term consideration
– “The company needs to take the uncertainties in the financial
markets into consideration and act accordingly”
accordingly
31

32. AGENDA
Tele2 in Brief
About Q1 2010
Russian f
R i focus
Financial review
Concluding remarks
32

33. CONCLUDING REMARKS
Nordic
N di 2010 an i
investment year
t t
• Continued revenue growth • Russia
Russia • Kazakhstan
• Record high EBITDA • 4G Sweden
Central Europe and Eurasia • 3G Norway
• Stable cash flow contribution
Western Europe
• Solid operational performance
33

34. MATS GRANRYD
Appointed President and CEO of Tele2
• Excellent understanding of emerging markets, technologies and consumer
implementation
Background
• Head of Northern Europe and Central Asia for Ericsson, AB
• Head of MU North Western Europe and Head of Global Customer Account
Vodafone (2009 - 2010)
• Head of MU-India/Sri Lanka (2005 - 2009)
( )
• Head of Business Unit CDMA, Senior Vice President Ericsson (2003 -
2005)
• Head of Market Unit North Africa and President Ericsson Egypt (2001 -
2003)
• Vice President Ericsson S d (1997 - 2001)
Vi P id t E i Sweden
• Manager Production, Nynäshamns factory (1995 - 1997)
• ARRIGO Consultants (1991-1995)
• Andersen Consulting (1988-1991)
• Royal Institute of Technology, Stockholm
– Master of Science in Mechanical Engineering
34

35. APPENDIX
35

36. TAXES
Taxes in income statement (MSEK) One-Off Normal Reported
Q1 - -339 -339
Taxes in cash flow statement (MSEK) One-Off Normal Reported
Q1 - -233 -233
In 2010: Tele2 forecast a corporate tax rate of approximately 22 (earlier 20)
percent excluding one-off items. The tax payment will affect cash flow by
approximately SEK 800 (earlier 700) million due to better than expected
operational performance in Tele2 Russia.
36

37. GROUP NET INTAKE PER SEGMENT
Mobile
M bil Fixed broadband
Fi d b db d Fixed telephony
Fi d t l h
1 400
1 200
1 000
(In thousands)
800
600
400
200
0
-200
200 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
-400
37

38. GROUP CUSTOMER STOCK
Group Customer Stock Group Mobile Customer Stock
Mobile Fixed Broadband Fixed Telephony Prepaid voice Postpaid voice Mobile Internet
25 000
30 000
25 000 20 000
(In thousands)
)
(I thousands)
20 000 15 000
15 000
10 000
10 000
In
(
5 000 5 000
0 0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
• Strong intake in the mobile segment
– Driven by Russia adding 949 000 new customers
38

39. GROUP EBITDA
Mobile Fixed broadband Fixed telephony
p y
Other Group EBITDA margin
3 000 26%
2 500
2 000
on)
24%
%
SEK millio
1 500
1 000
22%
(S
500
0
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
-500 20%
39

40. GROUP MOBILE EBITDA
Mobile EBITDA on own infrastructure Mobile EBITDA (MVNO)
Mobile EBITDA margin on own infratsructure Total mobile EBITDA margin
1 800
34%
1 750
1 700 32%
1 650
n)
30%
(SEK million
1 600
28%
1 550
1 500 26%
1 450 24%
1 400
1 350 22%
1 300 20%
Q4
Q 08 Q1
Q 09 Q2
Q 09 Q3
Q 09 Q4
Q 09 Q1
Q 10
40

41. MoU AND ARPU DEVELOPMENT
Sweden
Russia
60 240
220 260
240 50 220
200
SEK
SEK
220
S
180 40 200
200
160 180 30 180
Q
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
Q Q Q Q Q1 09 Q2 09 Q3 09 Q4 09 Q1 10
ARPU MoU ARPU MoU
• Relatively stable development
– Swedish ARPU being diluted by an increasing customer base in Mobile Internet and
g y g
softness in corporate customer MoU
41

42. 42