Tele2 Q3 2007
24 October 2007

Lars-Johan Jarnheimer
President & CEO
Q3 2007 Summary
    SEK million                 Q3-07        Q3-06       Growth %
    Continuing operations
    Operating ...
Q3 2007 Summary
•   Strong performance in core mobile operations across the group

•   Active execution of realigment proc...
Mobile Telephony
 Mobile revenue growth 17%, EBITDA up
 29% y-o-y
 Net customer intake 865,000

 Sweden: net customer inta...
Mobile Telephony – Sweden
  Strong take-off of mobile broadband services
    – 45,000 mobile broadband customers in Sweden...
Mobile Data – Sweden
           3G and content services picking up, 3G                                      Number of SMS ...
Broadband
 Direct Access & LLUB sales growth 12%

 DA & LLUB net intake 77,000 in Q3;
 resold broadband -10,000
          ...
Fixed Telephony
 EBITDA margin stable at 13%

 Fixed telephony revenue continues as
 expected to decline

 Customer net lo...
Corporate Segment
•   Corporate market generates app. 18% of group
    revenue
•   Increased internal focus on corporate m...
A Company in Change
    Geographic                Realignment        The New Tele2
    Expansion of Tele2          of Tele...
Beyond the Realignment Process
•   Organic growth and strategic
    acquisitions
     – Infrastructure investments where i...
Tele2 Q3 2007
24 October 2007

Lars Nilsson
CFO
Financial Overview Q3 2007 - Continued Operations
  (All figures in MSEK)                                       Q3 2007   ...
Clean EBIT Q3 2007
(MSEK)
2500
2000                                                          284
                         ...
Clean EBIT Y-t-d 2007
 (MSEK)

  3500
  3000
                                                              284            ...
Cash Flow
(All figures in MSEK)                  Q3 2007   Q3 2006    YTD 2007   YTD 2006

CF from operations             ...
Cash Flow Effects from Realignment Process
until Q3 2007

   (All figures in MSEK)                  1 Jan-30 Sep
         ...
Cash Flow Effects from Realignment Process
after Q3 2007

   (All figures in MSEK)                  Announced

   Tele2 It...
Net Debt to EBITDA
                   Net Debt and Net Debt/EBITDA
  20000                                                ...
Net Intake by Segment
          ('000)
  1 400

  1 200

  1 000
   800
   600

   400

   200
      0
   -200

   -400

 ...
Revenue by Segment
(MSEK)
12 000
10 000
 8 000
 6 000
 4 000
 2 000
      0
              Q3 -06            Q4 -06        ...
EBITDA by Segment
     (MSEK)
 2 000


 1 500


 1 000


   500


      0


  -500


 -1 000
              Q3 -06         ...
EBIT* by Segment
       (MSEK)
   2 000


   1 500


   1 000


     500


        0


    -500


  -1 000
               ...
Russia

(MSEK)                          Sales
1400                                                          (MSEK)        ...
Sweden Mobile

(MSEK)                       Sales                                            EBITDA vs Net Intake
        ...
Baltic

  (MSEK)                      Sales                         (MSEK)             EBITDA vs Net Intake
              ...
Questions?
Investor Relations:
                             Lars Torstensson
                             Telephone: + 46 (0) 702 73 ...
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Quarterly report (Q3) 2007

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Quarterly report (Q3) 2007

  1. 1. Tele2 Q3 2007 24 October 2007 Lars-Johan Jarnheimer President & CEO
  2. 2. Q3 2007 Summary SEK million Q3-07 Q3-06 Growth % Continuing operations Operating revenue 10,909 11,014 -1.0 EBITDA 1,844 1,700 +8.5 EBIT 609 -2,061 n.m. • Revenue growth, on a comparable basis (excluding divested and acquired entities), was 7 % vs Q3 2006 • EBITDA, on a comparable basis, improved by 15 % vs Q3 2006
  3. 3. Q3 2007 Summary • Strong performance in core mobile operations across the group • Active execution of realigment process July to date – Divestments of Hungary, Irkutsk, Belgium and 3C – Acquisition of Telecom Eurasia in Krasnodar (Russia) – Divestment of operations in Italy & Spain and Austrian MVNO • National Roaming Agreement in Russia • Mobile network JV in Norway
  4. 4. Mobile Telephony Mobile revenue growth 17%, EBITDA up 29% y-o-y Net customer intake 865,000 Sweden: net customer intake of 100,000 Network MVNO Russia: net intake of 647,000 – Revenue growth 62% – Maintained EBITDA margin of 33% Baltic & Croatia: Continued double-digit growth in all countries Norway: Revenue growth 21% – Network JV with Network Norway improves profitability and increases flexibility
  5. 5. Mobile Telephony – Sweden Strong take-off of mobile broadband services – 45,000 mobile broadband customers in Sweden at end-Q3 – Further acceleration expected in Q4 2007 Mobile Broadband Customers 40 000 30 000 20 000 10 000 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
  6. 6. Mobile Data – Sweden 3G and content services picking up, 3G Number of SMS increased 230% in data (MB) up >650% in 9 months 12 months, and 340% in 24 months – However, from a low level 3G Data* SMS* jan-07 feb-07 mar-07 apr-07 maj-07 jun-07 jul-07 aug-07 sep-07 * MB monthly * Weekly, customers paying per SMS (bucket plans not included)
  7. 7. Broadband Direct Access & LLUB sales growth 12% DA & LLUB net intake 77,000 in Q3; resold broadband -10,000 Network – Migration of resold customers onto DA & Resold LLUB particularly in Norway, Sweden and Austria Continued demanding situation in Germany – we are monitoring our business plan Several large Cable TV and Triple Play contracts in Sweden
  8. 8. Fixed Telephony EBITDA margin stable at 13% Fixed telephony revenue continues as expected to decline Customer net loss 441,000 – But increased market share in Sweden and Norway Revenue and profitability in Poland positively affected by wholesale line rental Fixed-to-mobile trend particularly visible in Germany and Austria
  9. 9. Corporate Segment • Corporate market generates app. 18% of group revenue • Increased internal focus on corporate market, mainly SME – Visible corporate position in Sweden, Netherlands and Austria • Growing market opportunities for SME in Baltic and Russia
  10. 10. A Company in Change Geographic Realignment The New Tele2 Expansion of Tele2 of Tele2 1997-2005 2007 2008- • Present in 25 • Present in 15 • Smaller geographic countries countries footprint • Mobile in 9 • Mobile in 8 • Focused operations countries countries - mobile and broadband • MVNO in 6 • MVNO in 3 services countries countries • Operational scale on own • Broadband in 18 • Broadband in infrastructure countries 9 countries • Fixed in 23 • Fixed in 9 countries countries
  11. 11. Beyond the Realignment Process • Organic growth and strategic acquisitions – Infrastructure investments where it generates superior returns Dec 2007 Oct 2006 • Develop core businesses to stay best in class • Increased management focus on core areas • Improved margins and cash flow, focus on ROCE
  12. 12. Tele2 Q3 2007 24 October 2007 Lars Nilsson CFO
  13. 13. Financial Overview Q3 2007 - Continued Operations (All figures in MSEK) Q3 2007 Q3 2006 YTD 2007 YTD 2006 Revenues 10,909 11,014 32,967 31,946 EBITDA 1,844 1,700 5,147 4,263 EBITDA % 16.9 15.4 15.6 13.3 Depreciation 1,222 * -879 -3,083 * -2,541 Write-down of goodwill -1,310 -2,457 -1,310 -2,457 Sale of operations 1,352 -2 827 47 Associated comp. -55 -22 -174 -93 EBIT 609 -1,660 1,407 -781 EBIT % 5.6 -15.1 4.3 -2.4 Financial items -181 -147 -623 -402 Taxes -566 ** -38 -918 ** -70 Net result -138 -1,769 -134 -1,253 * Including writedown of IT systems (MSEK -284) ** Including impairment of deferred tax assets (MSEK -599)
  14. 14. Clean EBIT Q3 2007 (MSEK) 2500 2000 284 Corresponding to a 1500 -1352 7.8% EBIT-margin 1310 1000 500 851 609 0 IT IT . s op ill* em EB EB dw of st d N rte sy oo le EA sa T- G po CL tI of fit Re en ro t en tP irm irm Ne pa pa Im Im *Germany (570), Austria (290), Belgium (275), Netherlands (175)
  15. 15. Clean EBIT Y-t-d 2007 (MSEK) 3500 3000 284 Corresponding to a 2500 -827 6,6% EBIT-margin 2000 1310 1500 1000 2174 1407 500 0 s . IT IT ill* op em EB EB dw of st N oo d sy le te EA fG T- sa or CL tI ep to it en of R en Pr irm irm et pa pa N Im Im *Germany (570), Austria (290), Belgium (275), Netherlands (175)
  16. 16. Cash Flow (All figures in MSEK) Q3 2007 Q3 2006 YTD 2007 YTD 2006 CF from operations 1,208 1,511 3,149 3,931 Change in WC 615 67 229 -680 Cash Flow from operating activities 1,823 1,578 3,251 CAPEX -1,188 -1,420 -4,098 Acquisition/sale of shares 5,478 -1,181 -1,266 Change in long-term receivables -356 17 159 Cash Flow after investing activities 5,757 -1,006 -1,954 CAPEX Continuing operations - 943 - 964 - 3,106
  17. 17. Cash Flow Effects from Realignment Process until Q3 2007 (All figures in MSEK) 1 Jan-30 Sep 2007 Tele2 Portugal 122 Tele2 Irkutsk, Russia 1,570 Tele2 France 2,937 Tele2 Denmark 752 Other 45 Total Cash Flow effect until Q3 2007 5,426
  18. 18. Cash Flow Effects from Realignment Process after Q3 2007 (All figures in MSEK) Announced Tele2 Italy / Spain 7,100 Tele2 Belgium 890 Tele2 Hungary 40 Tele2 Austria MVNO 65 Telecom Eurasia -160 Total Cash Flow effect after Q3 2007 7,935
  19. 19. Net Debt to EBITDA Net Debt and Net Debt/EBITDA 20000 3,0 18000 2,5 16000 14000 2,0 12000 MSEK 7,935 from disposals 10000 1,5 8000 1,0 6000 4000 0,5 2000 0 0,0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
  20. 20. Net Intake by Segment ('000) 1 400 1 200 1 000 800 600 400 200 0 -200 -400 -600 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
  21. 21. Revenue by Segment (MSEK) 12 000 10 000 8 000 6 000 4 000 2 000 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
  22. 22. EBITDA by Segment (MSEK) 2 000 1 500 1 000 500 0 -500 -1 000 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
  23. 23. EBIT* by Segment (MSEK) 2 000 1 500 1 000 500 0 -500 -1 000 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB) * Excl. non-recurring items
  24. 24. Russia (MSEK) Sales 1400 (MSEK) EBITDA vs Net Intake '000 1400 1000 1200 900 1200 1000 800 1000 700 800 600 800 500 600 600 400 400 400 300 200 200 200 100 0 0 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07  Revenue growth 62% year-on-year  EBITDA margin 33%  8 million customers
  25. 25. Sweden Mobile (MSEK) Sales EBITDA vs Net Intake (MSEK) '000 2000 2000 120 1500 100 1500 80 1000 1000 60 40 500 500 20 0 0 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07  Growth 9% year-on-year  Strong net intake affected EBITDA margin slightly in Q3
  26. 26. Baltic (MSEK) Sales (MSEK) EBITDA vs Net Intake '000 1200 1200 120 1000 1000 100 800 800 80 600 600 60 400 400 40 200 200 20 0 0 0 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07 Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07  Growth 14% year-on-year  Continuing strong net intake  EBITDA margin 38%
  27. 27. Questions?
  28. 28. Investor Relations: Lars Torstensson Telephone: + 46 (0) 702 73 48 79 Lena Krauss Telephone:+46 (0)8 562 000 45 Visit www.tele2.com • Q4 2007: 12 Februar 2008

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