SECOND QUARTER 2012Tele2 AB19 July 2012
Agenda             • About Q2 2012             • Financial review             • Concluding remarks2
Tele2 Group Q2 Highlights    • Net customer intake of 1.5 million leading to a total customer base of      36.3 million   ...
Market Area Russia: Overview        Population        Appr. 140 million        Tele2 Russia         43 regions of Russian...
Q2 Highlights Russia     •    Strong customer net intake of 693,000     •    Increased EBITDA margin of 37% due to less   ...
The Russian mobile market overviewTELE2 SUBSCRIBERS AS PART OF TOTAL RUSSIANMOBILE MARKET                                 ...
Revenue source development    VOICE and DATA REVENUE SPLIT DEVELOPMENT                  RUB millions                  16,0...
Regulatory update: significant developments    LTE license tender                                  Regional LTE allocation...
Tele2 Russia forward looking statement     The following assumptions should     be taken into account when     estimating ...
Market Area Nordic: Overview     Population     14.4 million     Tele2 Sweden and Tele2 Norway     Home market and test be...
Q2 Highlights Tele2 Sweden        •     Net sales amounted to SEK 3,209 million and              EBITDA amounted to SEK 76...
New tariff models         Volym Låg         Volym Mellan       Volym Hög         •   300 min                 minutes   •  ...
Innovative packages and products                                       Prepaid                           Roaming      WyWa...
Smartphone market development                                       SMARTPHONE INSTALLED BASE*                            ...
Mobile EBITDA development       300             35%                                                       34%     40%     ...
Tele2 Sweden forward looking statement      The following assumptions should      be taken into account when      estimati...
Q2 Highlights Tele2 Norway          •     Integration of Tele2 Norway completed          •     Good net intake of 23,000 m...
Tele2 Norway forward looking statement      The following assumptions should      be taken into account when      estimati...
Market Area Western Europe:     Overview     Population     106 million     Leading the group in business to business serv...
Q2 Highlights Tele2 Netherlands          •     Stable financial performance despite tough market                conditions...
Q2 Highlights Tele2 Germany     and Tele2 Austria     •     Both Austria and Germany show stable profitabilty     •     Te...
Market Area Central Europe and     Eurasia: Overview     Population     28 million     Represents 12% of total net sales Q...
Q2 Highlights Tele2 Estonia      •   Stable financial performance and profitability in a          competitive market      ...
Q2 Highlights Tele2 Latvia      •   Tele2 Latvia maintains a high efficiency in a competitive market      •   EBITDA margi...
Q2 Highlights Tele2 Lithuania      •       Significant intake of 20,000 mobile customers      •       EBITDA margin amount...
Tele2 Lithuania – a success story     MARKET SHARE DEVELOPMENT                               MARKET SHARE DEVELOPMENT     ...
Q2 Highlights Tele2 Croatia       •    Significant intake of 43,000 mobile customers       •    New CEO started in June CU...
Tele2 Croatia forward looking     statement      The following assumption should      be taken into account when      esti...
Q2 Highlights Tele2 Kazakhstan        •     Commercial launch of Tele2 brand completed in all regions of              Kaza...
The Kazakhstan mobile market overview     MOBILE SUBSCRIBERS – MARKET SHARE                NET ADDITIONS                  ...
Tele2 Kazakhstan forward-looking statement      The following assumptions should be      taken into account when estimatin...
Agenda              • About Q2 2012              • Financial review              • Concluding remarks32
Group results     SEK million                           Q2 2012    Q2 2011       %     YTD 2012    YTD 2011    FY 2011    ...
Currency movements Q2 2012          3%          2%          1%          0%          -1%          -2%          -3%         ...
Depreciation     DEPRECIATION and     DEPRECIATION % OF NET SALES                                                         ...
Financial items     Financial items                         Q2 2012   Q2 2011   YTD 2012   YTD 2011   FY 2011     Interest...
Taxes     Taxes in income statement         Q2 2012    Q2 2011     YTD 2012     YTD 2011   FY 2011     Normal             ...
Cash flow     SEK million                         Q2 2012    Q2 2011    YTD 2012    YTD 2011    FY 2011     OPERATING ACTI...
Proforma financial debt profile     SOURCES OF FUNDING     SEK Billion     20.0                                           ...
Debt position and ratio     PROFORMA NET DEBT / EBITDA 12M ROLLING     SEK Billion / Ratio     20.0                       ...
Mobile     Fixed broadband        Fixed telephony      Other     Group financials     GROUP EBITDA and                    ...
Agenda              • About Q2 2012              • Financial review              • Concluding remarks42
Concluding remarks      Manage the shift from voice to data      • Package services to increase attractiveness of        d...
Q&A44
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Tele2 Second quarter 2012

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Tele2 Second quarter 2012

  1. 1. SECOND QUARTER 2012Tele2 AB19 July 2012
  2. 2. Agenda • About Q2 2012 • Financial review • Concluding remarks2
  3. 3. Tele2 Group Q2 Highlights • Net customer intake of 1.5 million leading to a total customer base of 36.3 million • Revenue growth of 10%, amounting to SEK 11,064 (10,078) million • EBITDA amounted to SEK 2,715 million, equivalent to a margin of 25% • CAPEX amounted to SEK 1,586 million3
  4. 4. Market Area Russia: Overview Population Appr. 140 million Tele2 Russia  43 regions of Russian Federation  21.6 million subscribers  Mobile operator #4 in Russia in terms of subscribers and revenue Represents 30% of total net sales Q2 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. 5. Q2 Highlights Russia • Strong customer net intake of 693,000 • Increased EBITDA margin of 37% due to less marketing spend • Robust ARPU development, showing a growth of 5%CUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million22,000 800 4,000 20% 1,600 42% 3,000 15% 40%21,000 600 1,200 38%20,000 400 2,000 10% 800 36%19,000 200 1,000 5% 400 34%18,000 0 0 0% 0 32% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Customer base (left) Net sales (left) EBITDA (left) 5 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  6. 6. The Russian mobile market overviewTELE2 SUBSCRIBERS AS PART OF TOTAL RUSSIANMOBILE MARKET NET ADDITIONS Tele2 MegaFon Vimpelcom MTS Tele2Million subscribers Thousands of subscribers250 8.6% 9.3% 8,000 5.6% 5.6% 7.3% 6,000200 4,000150 2,000 0100 -2,000 50 -4,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 09 09 09 09 10 10 10 10 11 11 11 11 12 09 09 10 10 10 10 11 11 11 11 12 12ARPU DEVELOPMENT Tele2 MegaFon TELE2 RUSSIA EBITDA MARGIN RUB Vimpelcom MTS400 2010 2011 2012 44%300 5% growth 229 40%200 36%100 32% 0 28% 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 11 11 11 11 12 126 Source: Company data, AC&M Consulting
  7. 7. Revenue source development VOICE and DATA REVENUE SPLIT DEVELOPMENT RUB millions 16,000 8% 8% 8% 9% 12,000 8% 8,000 92% 92% 92% 92% 91% 4,000 0 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Data access Voice revenue revenue Data and voice revenues demonstrate 8% and 15% YoY growth respectively7
  8. 8. Regulatory update: significant developments LTE license tender Regional LTE allocations Roscomnadzor held tender on LTE for 4 The Regulator officials have recently verbally federal lots, each 2x7.5 MHz in 800 MHz and stated that they plan to distribute 10 regional 2x10 MHz in 2.5-2.7 GHz. Tele2 submitted two TDD LTE licenses in 2600 Mhz. According to bids. However, Tele2 did not win due to tender the Ministry representative this decision may conditions favoring federal operators. be taken at the forthcoming GKRCh** meeting. Technology neutrality MNP Consultations Report from NIIR* ready confirming LTE and The Prime Minister assigned the direction for GSM can co-exist on the same band. discussions on the MNP introduction. Tele2 According to the Telecom Ministry delivered proposals on the draft bill and representative LTE 1800 should be included in participated in the working group on the the agenda for the next GKRCh** meeting technical solution. The expected deadline for MNP introduction is Jan, 2014 * NIIR – Radio Research and Development Institute8 ** GKRCh – State Commission on Radio Frequencies
  9. 9. Tele2 Russia forward looking statement The following assumptions should be taken into account when estimating the operational performance of the total operations in Russia in 2012: • Tele2 expects the subscriber base to reach approx. 22 (earlier 21.5-22) million. • Tele2 expects ARPU to grow by 3-5 (earlier in low single digits) percent in local currency. • Tele2 expects an EBITDA margin of between 37-39 percent. • Tele2 expects capex of between SEK 1,300 - 1,500 million.9
  10. 10. 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 Q2 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 subscriptions10
  11. 11. Q2 Highlights Tele2 Sweden • Net sales amounted to SEK 3,209 million and EBITDA amounted to SEK 766 million • Mobile revenue grew by 6% and service revenue grew by 2.3% • Net intake in Q2 boosted by temporary campaign on postpaid subscriptions • Affecting EBITDA negatively during the quarter • New, more diversified pricing plans and innovative productsCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million4,900 80 4,000 4% 1,000 40%4,800 40 3,000 2% 750 30%4,700 0 2,000 0% 500 20%4,600 -40 1,000 -2% 250 10%4,500 -80 0 -4% 0 0% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 11 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  12. 12. New tariff models Volym Låg Volym Mellan Volym Hög • 300 min minutes • 1000 minutes • 3000 minutes • 300 SMS & • 1000 SMS & • 3000 SMS & MMS MMS MMS • 1 GB data • 3 GB data • 5 GB data12
  13. 13. Innovative packages and products Prepaid Roaming WyWallet +46 app smartphone buckets campaigns13
  14. 14. Smartphone market development SMARTPHONE INSTALLED BASE* 100% Sales of top ten mobile phones 90% Tele2 Sweden (Q2 2012) 80% 70% 60% 1. iPhone 4S 16GB 50% 2. Samsung Galaxy Gio 40% 3. HTC One X 30% 20% 4. Sony Xperia S 10% 5. Samsung Galaxy S2 0% 1106 1107 1108 1109 1110 1111 1112 1201 1202 1203 1204 1205 1206 6. Samsung Galaxy S3 Regular handset Smartphone 7. Samsung Galaxy S2 LTE 8. Samsung Galaxy Ace 9. Samsung E1080 10. iPhone 4S 32GB * Postpaid residential, quantity of handsets14
  15. 15. Mobile EBITDA development 300 35% 34% 40% 33% 29% 30% 200 17% 16% 20% 100 10% 0 0% Jan AC Feb AC Mar AC Apr AC Maj AC Jun AC EBITDA EBITDA margin adjusted (secondary axis)15
  16. 16. Tele2 Sweden forward looking statement The following assumptions should be taken into account when estimating the operational performance of the Swedish mobile operations in 2012: • Tele2 expects service revenue to grow by approximately 3-4 (earlier 3-5) percent. • Tele2 expects an EBITDA margin of between 30-32 percent assuming a stable market environment.16
  17. 17. Q2 Highlights Tele2 Norway • Integration of Tele2 Norway completed • Good net intake of 23,000 mobile customers • Tele2 Norway reported net sales of SEK 1,208 million, of which SEK 1,137 million was mobile revenue • Mobile EBITDA contribution was SEK 81 (15) million • Interconnect was lowered by July 1 to NOK 0.25 (0.40) and NOK 0.60 (0.70) for Tele2 Norway and Network Norway respectivelyCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1,600 20 1,600 80% 100 10%1,200 10 1,200 50% 50 5% 800 0 800 20% 0 0% 400 -10 400 -10% -50 -5% 0 -20 0 -40% -100 -10% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 17 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  18. 18. Tele2 Norway forward looking statement The following assumptions should be taken into account when estimating the operational performance of the total operations in Norway in 2012: • Tele2 expects a total revenue of between SEK 4,800-5,000 (earlier 5,000-5,200) million. • Tele2 expects an EBITDA margin of between 2-3 percent. • Tele2 expects capex of between SEK 850-950 million.18
  19. 19. Market Area Western Europe: Overview Population 106 million Leading the group in business to business services and consumer fixed broadband Represents 17% of total net sales Q2 2012 Netherlands 12%; Germany 2%; Austria 3% Focus  Netherlands Grow in mobile and B2B  Austria B2B & Integration of Silver Server  Germany Grow Fixed Via Mobile product19
  20. 20. Q2 Highlights Tele2 Netherlands • Stable financial performance despite tough market conditions • Back to growth in total customer base • Net intake of 32,000 customers in mobile − Significant portion in high-value mobile post- paid segment • Strong intake in the B2B segmentCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1200 20 1,600 10% 800 40% 900 5 1,200 5% 600 30% 400 20% 600 -10 800 0% 200 10% 300 -25 400 -5% 0 0% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 0 -40 0 -10% -200 -10% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 20 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  21. 21. Q2 Highlights Tele2 Germany and Tele2 Austria • Both Austria and Germany show stable profitabilty • Tele2 Germany: High-value Fixed via Mobile product still showing steady growth • Tele2 Austria: Integration of Silver Server on track. Solid performance in the B2B segment 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% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 EBITDA (left) EBITDA (left)21 EBITDA EBITDA margin (right) margin (right)
  22. 22. Market Area Central Europe and Eurasia: Overview Population 28 million Represents 12% of total net sales Q2 2012 Estonia 2%; Latvia 2%; Lithuania 3%; Croatia 3%; Kazakhstan 2% Focus  Continue to grow rapidly in Kazakhstan  Efficiency improvements in Baltics  Drive improvement in revenue, profits and market share in Croatia22
  23. 23. Q2 Highlights Tele2 Estonia • Stable financial performance and profitability in a competitive market • Tele2 Estonia maintains a positive net intake of mobile customers • Successful integration of Televörgu completed • Modernization and 4G roll-out currently ongoingMOBILE CUSTOMER BASE NET SALES and EBITDA andand CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million 600 30 300 20% 80 40% 450 20 225 10% 60 30% 300 10 150 0% 40 20% 150 0 75 -10% 20 10% 0 -10 0 -20% 0 0% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Mobile customer base (left) Net sales (left) EBITDA (left) 23 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  24. 24. Q2 Highlights Tele2 Latvia • Tele2 Latvia maintains a high efficiency in a competitive market • EBITDA margin amounted to 36% • Customer intake of 11,000 • 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 -5% 120 40% 900 20 300 -10% 90 38% 600 0 200 -15% 60 36% 300 -20 100 -20% 30 34% 0 -40 0 -25% 0 32% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Customer base (left) Net sales (left) EBITDA (left) 24 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  25. 25. Q2 Highlights Tele2 Lithuania • Significant intake of 20,000 mobile customers • EBITDA margin amounted to 38% • Strong performance since inception in 2000MOBILE CUSTOMER BASE NET SALES and EBITDA andand CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million2,000 35 400 5% 160 50%1,500 25 300 0% 120 40%1,000 15 200 -5% 80 30% 500 5 100 -10% 40 20% 0 -5 0 -15% 0 10% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Mobile customer base (left) Net sales (left) EBITDA (left) 25 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  26. 26. Tele2 Lithuania – a success story MARKET SHARE DEVELOPMENT MARKET SHARE DEVELOPMENT (revenue; 100% of the market) (EBITDA; 100% of the market) 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Q12007 Q22008 Q3-2009 Q4-2010 Q1-2012 Q12007 Q22008 Q3-2009 Q4-2010 Q1-2012 Tele2 Company A Company B Tele2 Company A Company B Tele2 Lithuania has caught up with its competitors in terms of Revenue market share, and surpasses them in terms of EBITDA market share26
  27. 27. Q2 Highlights Tele2 Croatia • Significant intake of 43,000 mobile customers • New CEO started in June CUSTOMER BASE and NET SALES and EBITDA and EBITDA-CAPEX CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGIN Thousands of customers SEK Million SEK Million SEK Million1,000 90 500 5% 60 12% 50 750 30 375 0% 45 9% 25 500 -30 250 -5% 30 6% 0 250 -90 125 -10% 15 3% -25 0 -150 0 -15% 0 0% -50 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 11 11 11 12 12 11 11 11 12 12 11 11 11 12 12 11 11 11 12 12 EBITDA Customer base (left) Net sales (left) EBITDA (left) 27 CAPEX Customer net YoY net sales EBITDA intake (right) growth (right) margin (right) EBITDA-CAPEX
  28. 28. Tele2 Croatia forward looking statement The following assumption should be taken into account when estimating the operational performance of the Croatian mobile operations in 2012: • Tele2 expects Croatia to reach an EBITDA margin of between 4-6 (earlier 20 percent by Q3 2013) percent in 2012.28
  29. 29. Q2 Highlights Tele2 Kazakhstan • Commercial launch of Tele2 brand completed in all regions of Kazakhstan • Strong net intake of 759,000 customers • Total number of customers amounted to 2.5 million CUSTOMER BASE and NET SALES and EBITDA and CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGIN Thousands of customers SEK Million SEK Million 160 0%2,500 1,000 300 550%2,000 800 80 -100% 225 400%1,500 600 0 -200% 150 250%1,000 400 -80 -300% 75 100% 500 200 -160 -400% 0 0 0 -50% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Customer base (left) Net sales (left) EBITDA (left) 29 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  30. 30. The Kazakhstan mobile market overview MOBILE SUBSCRIBERS – MARKET SHARE NET ADDITIONS Thousands of subscribers 1.8% 7.7% 100% 2,000 80% 1,500 60% 1,000 40% 500 20% 0 0% -500 Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- 2010 2010 2011 2011 2011 2011 2012 2012 Tele2 Kcell/Activ Tele2 Kcell/Activ Dalacom/Pathword Beeline Dalacom/Pathword Beeline30
  31. 31. Tele2 Kazakhstan forward-looking statement The following assumptions should be taken into account when estimating the operational performance of the total operations in Kazakhstan in 2012: • Tele2 expects the subscriber base to reach up to 3.0 million (earlier 2.5-2.7) • Tele2 expects an EBITDA contribution of between SEK -350 to -400 • Tele2 expects capex of between SEK 550-600 million. • Tele2 expects to reach EBITDA break-even by 2H 2013. • Tele2 expects to reach a long-term mobile customer market share of 30 percent.31
  32. 32. Agenda • About Q2 2012 • Financial review • Concluding remarks32
  33. 33. Group results SEK million Q2 2012 Q2 2011 % YTD 2012 YTD 2011 FY 2011 % Net sales 11,064 10,078 9.8% 21,545 19,720 41,001 9.3% EBITDA 2,715 2,809 -3.3% 5,286 5,353 11,212 -1.3% EBITDA margin (%) 24.5% 27.9% -3.3% 24.5% 27.1% 27.3% -2.6% Depreciation & associated companies -1,268 -1,015 24.9% -2,457 -1,985 -4,158 23.8% Depreciation of net sales (%) -11.5% -10.1% -1.4% -11.4% -10.1% -10.1% -1.3% One-off items -20 -57 -19 42 -4 EBIT 1,427 1,737 -17.8% 2,810 3,410 7,050 -17.6% Normalized EBIT 1,447 1,794 -19.3% 2,829 3,368 7,054 -16.0% Normalized EBIT margin (%) 13.1% 17.8% -4.7% 13.1% 17.1% 17.2% -3.9% Financial items -321 -230 39.6% -499 -304 -674 64.1% Taxes -257 -399 -35.6% -593 -772 -1,472 -23.2% Net profit 849 1,108 -23.4% 1,718 2,334 4,904 -26.4% Discontinued operations 1 5 -80.0% 1 -8 -7 -112.5% Net profit 850 1,113 -23.6% 1,719 2,326 4,897 -26.1%33
  34. 34. Currency movements Q2 2012 3% 2% 1% 0% -1% -2% -3% EUR RUB NOK Average YTD Q2 2012 vs. YTD Q2 2011 Fixing rate Jun 2012 vs. Dec 2011 EUR/EUR pegged and RUB currencies represent 54% of external sales and 74% of EBITDA34
  35. 35. Depreciation DEPRECIATION and DEPRECIATION % OF NET SALES Change Y-on-Y for Q2 SEK Million • Acquisition of Network 1,500 12.5% Norway (SEK 85 million) 12.0% of which surplus depreciation and 1,200 amortization of SEK 63 million 11.5% 11.0% 900 • Upgrade/replacement of 10.5% networks in the Baltics during 600 10.0% 2012 - 2013 (SEK 72 million) 9.5% 300 9.0% • Russia SEK 57 million 0 8.5% Q211 Q311 Q411 Q112 Q212 • Kazakhstan SEK 22 million Depreciation Depreciation of net sales (%)35
  36. 36. Financial items Financial items Q2 2012 Q2 2011 YTD 2012 YTD 2011 FY 2011 Interest income/costs -268 -87 -446 -128 -483 Exchange rate differences, external 6 -33 -7 -42 -24 Exchange rate differences, intragroup -11 -56 42 -39 13 Other financial items -48 -54 -88 -95 -180 Total -321 -230 -499 -304 -67436
  37. 37. Taxes Taxes in income statement Q2 2012 Q2 2011 YTD 2012 YTD 2011 FY 2011 Normal -257 -399 -593 -772 -1,580 One off - - - - 108 Total -257 -399 -593 -772 -1,472 Taxes in cash flow statement Q2 2012 Q2 2011 YTD 2012 YTD 2011 FY 2011 Normal -112 -325 -314 -550 -948 One off - - - - - Total -112 -325 -314 -550 -948 • Deferred tax assets at year to date amounted to SEK 2.5 (Dec 2011: 3) billion • The 2012 tax payment will affect the cash flow with SEK 1,000 (earlier 1,200) million37
  38. 38. Cash flow SEK million Q2 2012 Q2 2011 YTD 2012 YTD 2011 FY 2011 OPERATING ACTIVITIES Before paid tax 2,548 2,686 5,065 5,350 10,895 Paid taxes -112 -325 -314 -550 -948 Change in working capital -246 -7 -665 -264 -257 CF from operating activities 2,190 2,354 4,086 4,536 9,690 INVESTING ACTIVITIES CAPEX -1,417 -1,661 -2,247 -2,677 -5,572 CF after CAPEX 773 693 1,839 1,859 4,118 Shares and other financial assets -5 -57 -203 -54 -1,563 CF after investing activities 768 636 1,636 1,805 2,55538
  39. 39. Proforma financial debt profile SOURCES OF FUNDING SEK Billion 20.0 16.9 17.5 15.0 12.8 12.1 12.5 10.0 7.5 5.0 2.5 0.0 -2.5 Q4 11 Q1 12 Q2 12 Revolving credit facility Russia bond Other financing Commercial paper Norwegian bond Swedish Bond Off BS items Cash Proforma net debt39
  40. 40. Debt position and ratio PROFORMA NET DEBT / EBITDA 12M ROLLING SEK Billion / Ratio 20.0 2.00 17.5 1.75 Upper limit 2.9 2.9 15.0 1.50 2.9 2.9 12.5 1.25 Lower limit 16.9 10.0 1.00 12.8 12.1 7.5 0.75 5.0 0.50 2.5 0.25 0.0 0.0 0.0 0.00 Q4 11 Q1 12 Q2 12 Proforma Net Debt Ordinary dividend (paid May 2012) Extraordinary dividend (paid May 2012) Leverage Net40
  41. 41. Mobile Fixed broadband Fixed telephony Other Group financials GROUP EBITDA and GROUP NET SALES Group EBITDA GROUP EBITDA MARGIN margin SEK Million SEK Million 4,000 30% 12,000 28% 3,000 9,000 26% 2,000 6,000 24% 1,000 3,000 22% 0 20% 0 Q211 Q311 Q411 Q112 Q212 Q211 Q311 Q411 Q112 Q212 GROUP CAPEX (BS) and CAPEX/SALES ROCE (NORMALISED) SEK Million CAPEX/Sales Percent 2,000 30% 25% 19% 20% 21% 22% 1,500 23% 19% 16% 16% 15% 1,000 15% 10% 500 8% 5% 0 0% 0% Q211 Q311 Q411 Q112 Q212 Q1 Q2 Q3 Q4 Q1 Q241
  42. 42. Agenda • About Q2 2012 • Financial review • Concluding remarks42
  43. 43. Concluding remarks Manage the shift from voice to data • Package services to increase attractiveness of data • Exploit 4G services to make it a commercial success Exploit new services and opportunities by offering our customers what they need for less • WyWallet • +46 app • Roaming buckets Growth • Through emerging markets such as Russia and Kazakhstan • Through evolution of multiple devices43
  44. 44. Q&A44
  45. 45. 45

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