Quarterly report (Q1) 2007

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Presentation Tele2s Quarterly report, 2007 (Q1)

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Quarterly report (Q1) 2007

  1. 1. Q 1 2007 IAL RE PORT F INANC Lars-Johan Jarnheimer President and CEO
  2. 2. TELE2: Q1 2007 RESULTS SEK MILLION 2007 2006 Q1 Q1 Continuing operations Operating revenue 12,837 12,243 Net customer intake (thousands) 281 617 EBITDA 1,488 1,221 • Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2 billion • Strong broadband intake during Q1 2007, adding a total of 254,000 new broadband customers • Fixed telephony EBITDA margin improved to 14 percent in Q1 2007 2
  3. 3. UP DATE ON THE CURRENT STRATEGIC REVIEW • We will see result of the current strategic review in the second quarter • The first transaction is likely in the next couple of weeks • The transaction between Tele2 and SFR will receive a preliminary indication from the EU competition authorities in May • There is now a firm action plan for the MVNO businesses Current Strategic Review is progressing according to plan 3
  4. 4. CONTINUED SHIFT TOWARDS INFRASTRUCTURE BASED SERVICES Sales - Q1 2007 Sales - Q1 2006 35% 39% 42% 51% 14% 19% Mobile Mobile Broadband (resale & direct access) Broadband (resale & direct access) Fixed telephony resale Fixed telephony resale 4
  5. 5. EBITDA CONTRIBUTION WILL FOLLOW EBITDA contribution per segment (SEK) 2000 1500 1000 500 0 Q1 2007 Q1 2006 -500 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB) 5
  6. 6. CONTINUED STRONG PERFORMANCE IN MOBILE TELEPHONY SEK MILLION 2007 2006 Q1 Q1 Mobile Telephony Operating revenue 5,219 4,038 Net customer intake (thousands) 747 909 EBITDA 1,088 746 • Mobile revenues in Q1 2007 increased by 29 percent to SEK 5.2 billion • Russia and Baltic developing above expectations. Total customer base for the market area in excess of 10.8 million • Mixed development in MVNO. • Clean up of customer base in the Nordic market area by approximately 900,000 in Q2 2007 6
  7. 7. STRONG BROADBAND INTAKE SEK MILLION 2007 2006 Q1 Q1 Broadband resale, DA/LLUB Operating revenue 2,276 1,602 Net customer intake (thousands) 255 144 EBITDA -361 -295 • Strong broadband intake during Q1 2007, adding a total of 254,000 new broadband customers • Broadband is being evaluated market by market. – Italy showing strong gross margin development in the quarter 7
  8. 8. TELE2 ITALY: DIRECT ACCESS ITA D LY A ITA D LY A 60% 52 % 40% 20% 0% Q -06 3 Q -06 4 Q -07 1 -20% -40% -60% -80% -100% Q -06 3 Q -06 4 Q -07 1 -120% N Intake et Gross Margin 2 • Coverage improved to 40 % of Italian households. • Tele2 looks to expand beyond 50 % • Up-selling from single to dual play services • Larger customer base leading to scale effects 8
  9. 9. STABLE MARGIN – INCREASED COMPETITION SEK MILLION 2007 2006 Q1 Q1 Fixed telephony resale Operating revenue 4,796 6,017 Net customer intake (thousands) -720 -436 EBITDA 649 662 • Fixed telephony EBITDA margin improved to 14 percent in Q1 2007 • Higher level of competition from primarily mobile operators – Larger net customer outflow – Stronger ARPU decline than expected • Cross selling still an important opportunity 9
  10. 10. Q1 2007 SUMMERIZED • Strong development in Mobile Telephony, with a revenue growth of 29 % in Q1 • Continued strong broadband intake during Q1 2007, adding 254,000 new broadband customers • Improving EBITDA margins in fixed line. However, competition is increasing TELE2: CONTINUED OPERATIONS – Important for Tele2 to move swiftly into more infrastructure MSEK Q1 2007 Q1 2006 based operations Operating revenue* 12,837 12,243 +5 % EBITDA* 1,488 1,221 +22 % Net intake (‘000) 281 617 -54 % *Excluding non-recurring items 10
  11. 11. NO CHANGE TO FINANCIAL GUIDENCE ON 2007 • Outlook for 2007 remains unchanged: “We expect significantly higher EBITDA and higher organic growth compared to 2006” 11
  12. 12. Q 1 2007 IAL RE PORT F INANC Donna Cordner EVP Corporate Finance & Treasury
  13. 13. FINANCIAL OVERVIEW FOR Q1 2007 – CONTINUING OPERATIONS Q1 2007 Difference to Q1 2007 Revenues (MSEK) 12,837 594 5% EBITDA (MSEK) 1,488 267 22% CAPEX (MSEK) 1,181 3 0% Customer Net Additions (thousands) 281 -336 -54% 13
  14. 14. OPERATING REVENUE PER SEGMENT MOBILE (MSEK) (MSEK) FIXED TELEPHONY RESALE 6 000 10 000 8 000 4 500 6 000 3 000 4 000 1 500 2 000 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 BROADBAND RESALE DIRECT ACCESS & LLUB (MSEK) (MSEK) 1 000 1 800 900 1 600 800 1 400 700 1 200 600 1 000 500 800 400 300 600 200 400 100 200 0 0 Q4 Q1 Q2 Q3 Q4 Q1 14 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007
  15. 15. EBITDA AND NET INTAKE PER SEGMENT MOBILE FIXED TELEPHONY RESALE MSEK '000 MSEK '000 1 600 1 000 600 1 200 1 400 400 800 200 1 000 1 200 0 800 1 000 600 -200 800 600 -400 600 400 400 -600 400 -800 200 200 200 -1 000 0 0 0 -1 200 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 EBITDA Net intake EBITDA Net intake BROADBAND RESALE DIRECT ACCESS & LLUB MSEK '000 MSEK '000 150 100 100 50 100 210 0 50 50 -50 160 -100 0 0 Q4 Q1 Q2 Q3 Q4 Q1 110 -150 -50 2006 2007 -200 -50 60 -250 -100 -300 -100 10 -150 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 EBITDA Net intake -200 -40 EBITDA Net intake 15
  16. 16. P&L IMPACT FROM BROADBAND GROWTH Q1 2007 Q4 2006 Q3 2006 P&L impact from Broadband growth (MSEK) 445 335 250 NET INTAKE Broadband resale (’000) 44 42 39 Direct access and LLUB (’000) 210 211 113 ACQUISITION COST Broadband resale (SEK) 1,550 1,450 2,050 Direct access and LLUB (SEK) 1,800 1,300 1,500 • Italy showing stronger intake of DA/ULL customers directly, rather than migrating customers from existing broadband resale base • Launch of broadband services in Portugal affecting SAC negatively. 16
  17. 17. MOBILE SALES +29 % MOBILE MOBILE (MSEK) MSEK '000 6 000 1 600 1 200 1 400 4 500 1 000 1 200 800 1 000 3 000 800 600 600 400 1 500 400 200 200 0 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake 17
  18. 18. RUSSIA SALES +135 % Russia Mobile Russia Mobile MSEK MSEK '000 1 200 350 1 200 300 1 000 1 000 250 800 800 200 600 150 600 400 100 400 50 200 200 0 0 -50 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake • Net intake of 644,000 customers to a total of 7,1 million customers • ARPU of 52 SEK in Q1 2007 compared to 42 SEK in Q1 2006 • EBITDA margin 28 % 18
  19. 19. BALTIC MOBILE SALES +18 % Baltic Mobile Baltic Mobile MSEK MSEK '000 1 200 450 250 400 1 000 200 350 300 800 150 250 200 600 100 150 400 100 50 50 200 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake • Revenue growth for the Baltic region was strong at 19 percent – All 3 countries had double digit sales growth • EBITDA for the Baltic region grew 25 percent • In Lithuania Tele2 has been able to capture 11 percent of the corporate market 19
  20. 20. SWEDEN MOBILE SALES +8 % Sweden Mobile Sweden Mobile MSEK MSEK '000 1 000 80 2 000 60 800 40 1 500 600 20 1 000 0 400 -20 500 200 -40 0 -60 0 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Sales EBITDA Net intake • EBITDA-margin effected by higher marketing costs in Q1 2007 • More than 48 000 post-paid net adds in Q1 20
  21. 21. NORDIC EXCL. SWEDEN MOBILE SALES +30 % Nordic excl. Sweden - Mobile Nordic excl. Sweden - Mobile MSEK MSEK '000 800 80 100 60 80 600 60 40 40 400 20 20 0 Q4 Q1 Q2 Q3 Q4 Q1 0 200 -20 2006 2007 -20 -40 0 -40 Q4 Q1 Q2 Q3 Q4 Q1 -60 -60 2006 2007 Sales EBITDA Net intake 21
  22. 22. NET DEBT Net debt MSEK 18 000 3,6 3,2 15 000 2,8 12 000 2,4 2,0 9 000 1,6 6 000 1,2 0,8 3 000 0,4 0 0,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 2006 2007 Net Debt Net Debt to EBITDA 22
  23. 23. DO NOT FORGET Contacts Visit www.tele2.com Lars-Johan Jarnheimer Telephone: + 46 (0)8 562 640 00 • Conference call today President and CEO, Tele2 AB at 15.00 CET Web-cast at www.tele2.com Lars Torstensson Telephone: + 46 (0) 702 73 48 79 • Q2 2007: 25 July 2007 IR Director, Tele2 AB 23

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