Total customer base amounted to more than 32 million customers. Net customer intake for the group in Q2 was 1,052,000 (1,096,000).
Net sales grew by 6 percent (currency-adjusted), driven by mobile sales.
EBITDA grew by 7 percent (currency-adjusted).
EBITDA margin amounted to 27 (27) percent (currency-adjusted).
Highlights Tele2 Russia
720,000 (1,113,000) new customers
in Q2 2011.
Net sales grew by 23 percent (currency-adjusted).
Moscow 2011 guidance EBITDA 12’M ROLLING AND EBITDA MARGIN 12’M ROLLING SEK Million Percent
Mobile market overview Russia QUARTERLY CHURN TELE2 RUSSIAPercent NET INTAKE TELE2 RUSSIAThousands MoU AND ARPU RUSSIA Percent Min RUB Mobile TeleSystems Vimpelcom Megafon Tele2 Source: AC&M – 1Q11 Report, Analysys Mason – Russia Country report, Dec 2010 *Preliminary estimate
Tele2 Russia’s performance vs. competitors REVENUE GROWTH YoY, 1Q11 EBITDA MARGINPercent SUBSCRIBER BASE GROWTH YoY, 1Q11 Mobile TeleSystems Vimpelcom Megafon Tele2
Best in the market growth rates
Price/quality balance – a primary reason for growth
Improving EBITDA margin despite of subscriber base growth
Source: AC&M Consulting 1Q11 Report; Company data
Tele2’s regional expansion opportunities COVERAGE MAP Moscow The results of the first GSM tender: Tele2 got licences in 6 new regions in the Far East
Highlights Tele2 Sweden
Increased mobile revenue growth of 10 percent.
32,000 (45,000) mobile postpaid customers added.
Mobile EBITDA margin amounted to 32 (34) percent.
MOBILE EBITDA 12’M ROLLING AND MOBILE EBITDA MARGIN 12’M ROLLING SEK Million Percent Percent SEK Million
Smartphones are taking over the scene SHIPMENT OF HANDSETS TELE2 SWEDEN Percentage of total shipments INSTALL BASE TELE2 SWEDEN (POSTPAID) Percentage of total installed base Regular Smartphone Smartphones corresponded to 88% of Tele2’s total shipments of handsets in June 2011.
Smartphones are driving data consumption USERS AND DATA CONSUMPTION: ANDROID vs iOS (TELE2 SWEDEN) SALES OF HANDSETS BY BRAND(TELE2 SWEDEN, OWN SALES CHANNELS) Users Percent MB Apple Samsung HTC Sony Ericsson ZTE Nokia LG Motorola BlackBerry Rim In June 2011, the average Tele2 iOS user consumed 91% more data than the average Tele2 Android user. Approximately 50% of all smartphones sold were Apple-branded.
The 4G roll-out continues
Next generation’s mobile broadband already launched.
We see 4G handsets and tablets coming in 2H 2011.
99%* 4Gcoverage End of 2012 2011 *Percentage of the population 4G roll out status Q2 2011: Roll out completed in 14 cities covering 40% of the population
Highlights Tele2 Western Europe
BBned integration fully completed.
Restructuring cost of SEK 48 million in Q2 affecting EBITDA.
Maintained leading position in the CPS segment. Improved EBITDA contribution to 38.6% in Q2.
Positive EBITDA contribution in fixed broadband due to wholesale agreement.
The focus on expanding the B2B segment resulted in several major customer contracts.
Financial development continued to improve versus last year.
Licence Renewal / Frequency Auction
In Q1 2012, all existing spectrum in the 900 and 1.800 MHz bands will be redistributed.
All spectrum licenses are 'technology neutral‘.
A new block of 2x30 MHz spectrum in the 800 MHz 'Digital Dividend' band will be auctioned with a block exclusively reserved for newcomers to bid on.
Auction early 2012 Auction 2015 Auctioned 2010
Highlights Tele2 Baltic Region
Stabilizing economy leading to better operational
Positive net customer intake of 75,000 customers in
the Baltic region in Q2.
Strong EBITDA margin of 33% in the Baltic region.
Highlights Tele2 Croatia
Goal to deliver positive free cash flow 2H 2011.
Solid net intake of 27,000 customers in Q2.
Tele2 brand re-launched with new communication
platform. EBITDA – CAPEXSEK Million Thousands Thousands Customer stock (left) Net intake (right)
Highlights Tele2 in Kazakhstan
Commercial launch of the Tele2 brand in five regions.
Strong net intake of 355,000 (-48,000) customers.
CUSTOMER STOCK AND NET INTAKE Thousands Thousands
About Q2 2011
Guidance and concluding remarks
Q2 2011 Group results One-off item of 527 affecting Q210 EBIT
Currency movements (vs. SEK) EUR/EUR pegged and RUB currencies approximately 2/3 of sales and EBITDA
Currency-adjusted Sales and EBITDA (excl. one-off) CURRENCY-ADJUSTED EBITDA, TOTAL +7 %SEK Million CURRENCY-ADJUSTED SALES, TOTAL +6.3 %SEK Million +23% +32% +3% +2% +1% -1% +1% -2% c c c MA Western Europe MA Central Europe Kazakhstan MA Russia MA Nordic
Cash flow for Q2 2011 Negative change in working capital affected by increased instalment sales of handsets
Group financial profile PROFORMA NET DEBT INCL. JV / EBITDA 12’M ROLLING SEK Billion Ratio Upper limit Lower limit Ordinary dividend Extraordinary dividend
Bal. sheet consideration / Fin. leverage When available, invest in value accretive M&A or new business opportunities meeting Tele2’s strict financial hurdles CASH GENERATION M&A / New growth opportunities Shareholder remuneration Enhance shareholder value by distributing recurring cash to shareholders Cash / Buffer Retain financial buffer Prudent assessment based on (a) status of operations, (b) future strategic opportunities, (c) competitive landscape and (d) general macroeconomic status
Net debt and dividend targets Shareholder remuneration “Tele2 will seek to pay a progressive ordinary dividend of no less than 50 percent of net income excluding one-off items. Extraordinary dividends and the authority to purchase Tele2’s own shares will be recommended or sought when the anticipated total return to shareholders is deemed to be greater than the achievable returns from the deployment of the capital within the group's operating segments or the acquisition of assets within Tele2’s economic requirements.” Balance sheet “Tele2 has a target net debt to EBITDA ratio of between 1.25 and 1.75 times over the medium term. The company’s longer term financial leverage should be in line with the industry and the markets in which it operates and reflect the status of its operations, future strategic opportunities and contingent.”
Debt profile June 2011 8.8 bn 0.9 bn 2.9 bn 2.4 bn Gross debt position SEK 15.0 bn Net debt amounts to 12.9 bn
Tele2 Russia Prices in Line with Much Larger Russian Peers Fairly adjusting for differences in maturity, the placement was executed at a yield 5bps tighter than Vimpelcom and 12bps wider than MTS Sources: Raiffeisenbank. Calculated by adding “fair” spread differential of 40bps to nearest Vimpelcom and MTS bond yields to account for difference in maturity compared to Tele2 Russia bonds.
Group EBITDA, Sales and Capex Fixed telephony Fixed broadband Other Mobile Mobile Fixed telephony Other Fixed broadband Mobile Fixed telephony Fixed broadband Other
Group mobile EBITDA
Sweden mobile revenue explained
Sweden mobile EBITDA explained
About Q2 2011
Guidance and concluding remarks
Tele2’s general group targets Maintain Best Deal position. Targeting a long-term mobile EBITDA margin on own infrastructure of at least 35 percent.
All operations should have the ambition
of reaching a 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.
The following assumptions should be taken into account when estimating results for the Swedish mobile operations in 2011:
Tele2 expects mobile service revenue to grow with mid single digits (earlier high single digits for mobile revenue)
Tele2 expects a similar EBITDA contribution in 2011 as in 2010 due to instalments and start up costs related to joint venture Net4Mobility.
Sweden outlook (changed)
Tele2 has GSM licences in 43 regions in Russia covering approximately 62 million inhabitants. The following assumptions should be taken into account when estimating the operational performance of the total operations in Russia in 2011:
Tele2 expects the subscriber base to reach 21 million (earlier 20-21 million) by year-end 2011.
Tele2 expects ARPU to remain stable in local currency.
Tele2 expects Russia’s total EBITDA margin to evolve in the range of 38-40 (earlier 36-39) percent.
Tele2 expects capex in Russia to be approximately SEK 2,000 million by year-end 2011.
Russia outlook (changed)
Concluding remarks 2011: Also an investment year
Russia Record EBITDA contribution. Nordic Robust mobile revenue growth. Western Europe Tele2 Netherlands finalized the integrationof BBned. Central Europe & Eurasia Successful launch of Tele2’s operations in Kazakhstan led to record customer intake. In short, all our markets are doing well.
Mobile market overview Russia Mobile TeleSystems Vimpelcom Megafon Tele2 Average TELE2 share (all Russia): 8.6% Average TELE2 share (old regions): 41%* Average TELE2 share (new regions): 17%* Average TELE2 share (total 37): 31%* * FDP Group, 1Q2011 Source: AC&M Consulting – 1Q11 Report
EDGE enabled mobile network
Great price and smart packaging
Large difference between major cities vs. rural areas
Samma text som Q1 Source: Tele2 regions internal data; J’son & Partners 2011, AC&M Consulting 1Q11 Report;
Newly introduced cheap smartphones and feature phones suit our customers Handset trends Smartphones are dominating sales. 50% of the sales of the cheap smartphone ZTE Blade are to prepaid customers. iOS has the highest share of sales, but Android still represents the largest share of our smartphone customer stock. In total, 9 out of 10 sold phones are smartphones
Swedish telecom market trends Mobile data is increasing, driven by smartphones and mobile broadband Sources: Parella Weinberg Partners , Analysys Mason, PTS
Smartphones change the customers’ behaviour The Swedish mobile market Tele2 customers’ demand for data solutions is increasing rapidly 400% More than 60 percent of Tele2’s prepaid customers converting to postpaid change to a smartphone Sources: Analysys Mason; internal company data