Quarterly report (Q4) 2009

1. FOURTH QUARTER 2009
9 February 2010

2. AGENDA
CEO review Harri Koponen
Financial review Lars Nilsson
Concluding remarks Harri Koponen
2 2010-02-09 Fourth quarter 2009

3. HIGHLIGHTS Q4
• Solid operational result
• Nordic
– Nordic mobile is returning to revenue growth
• Push in postpaid segment according to plan
• Russia
– Roll-out better than plan
– 1 149 000 new customers
• Central Europe
– Focus on maintaining market share in the Baltic region and
cash flow contribution
• Western Europe
– All countries delivering healthy EBITDA contribution
– Strong performance in The Netherlands and Austria
3 2010-02-09 Fourth quarter 2009

4. MARKET AREA NORDICS
Mobile
• Positive revenue growth
• Solid customer intake in postpaid
• Secured No1 market share position in
prepaid mobile internet in Sweden
Market strategy
• Further develop and calibrate our increased
focus on mobile postpaid
4 2010-02-09 Fourth quarter 2009

5. MARKET AREA RUSSIA
Mobile
• Record high EBITDA margin in mature
regions
• Record high net intake
– New regions adding 944 000 customers
Market strategy
• Making the roll-out an efficient machinery
• Continue unique distribution strategy
5 2010-02-09 Fourth quarter 2009

6. NET INTAKE RUSSIA
New regions Old regions
(In thousands)
1 400
1 200
205
1 000 359
800
600
944
400 742
379 350
200 449
136
105 84 128
0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
6 2010-02-09 Fourth quarter 2009

7. CLEAR BUSINESS GOALS
THROUGH EVOLUTION
Perceived price leadership/ Subscriber base
Defender 17 REGIONS
Challenger Retention
ARPU protection
Customer acquisition
Newcomer ARPU development
Retention
Customer acquisition 20 REGIONS
1,5 – 2 years 2,5 – 3 years >3 years
7 2010-02-09 Fourth quarter 2009

8. MARKET AREA WESTERN EUROPE
Corporate segment
• Important contract wins
Market strategy
• Investing for the future
• New mobile offering in the Netherlands
– Full portfolio of mobile services
• Combination package “Internet Home & Away”
8 2010-02-09 Fourth quarter 2009

9. MARKET AREA CENTRAL EUROPE
Mobile
• Defend market share and expand when
possible
• Mobile internet service launched in Lithuania
Market strategy
• Economic turmoil creates opportunities for a
price leader
9 2010-02-09 Fourth quarter 2009

10. TELE2 ALWAYS PROVIDES
THE
BEST
10
DEAL
2010-02-09 Fourth quarter 2009

11. AGENDA
CEO review Harri Koponen
Financial review Lars Nilsson
Concluding remarks Harri Koponen
11 2010-02-09 Fourth quarter 2009

12. Q4 2009 GROUP RESULTS
SEK million Q4 09 Q4 08 Change %
Continuing operations, Net Sales 9,889 9,986 -1%
EBITDA 2,188 2,162 1%
- EBITDA margin (%) 22.1% 21.7%
Depreciation and joint venture -888 -964
- Depreciation of net sales (%) 9.0% 9.7%
One-off items -64 -19
EBIT 1,236 1,179
Normalized EBIT 1,300 1,198
- Normalized EBIT margin (%) 13,1% 12,0%
Financial items -124 -593
Taxes -247 104
Net result, continuing operations 865 690
Net result, discontinued operations 184 204
Net result 1,049 894
12 2010-02-09 Fourth quarter 2009

13. 2009 FULL YEAR GROUP RESULTS
SEK million 2009 2008 Change %
Continuing operations, Net Sales 39,265 38,272 3%
EBITDA 9,185 8,169 12%
- EBITDA margin (%) 23,4% 21,3%
Depreciation and joint venture -3,647 -3,679
- Depreciation of net sales (%) 9,3% 9,6%
One-off items -11 -1 642
EBIT 5,527 2,848
Normalized EBIT 5,538 4,490
- Normalized EBIT margin (%) 14,1% 11,7%
Financial items -500 -1,013
Taxes -426 -120
Net result, continuing operations 4,601 1,715
Net result, discontinued operations -46 718
Net result 4,555 2,433
13 2010-02-09 Fourth quarter 2009

14. TAXES
Taxes in income statement (MSEK) One-Off Normal Reported
Q1 -196 -77 -273
Q2 - -324 -324
Q3 862 -444 418
Q4 20 -267 -247
686 -1,112 -426
Taxes in cash flow statement (MSEK) One-Off Normal Reported
Q1 -359 -97 -456
Q2 - -124 -124
Q3 - -98 -98
Q4 -52 -153 -205
-411 -472 -883
In 2010: Tele2 forecast a corporate tax rate of approximately 20 percent
excluding one-off items
14 2010-02-09 Fourth quarter 2009

15. “OUR” CURRENCIES
YTD Average Fixing rate
Currency 09 vs. 08 Dec 09 vs Dec 08
EUR / EUR pegged 10,6 % - 5,3 %
RUB - 8,9 % - 9,4 %
USD 16,2 % - 7,0 %
15 2010-02-09 Fourth quarter 2009

16. NET ASSETS IN FOREIGN CURRENCIES
EUR EUR pegged RUB Other
30
1,1 1,0
(SEK billion)
6,2
20 7,2
5,9
6,2
10
12,1
9,6
0
Year-end 2008 Q4 2009
Total 25.3 bSEK Total 24.0 bSEK
16 2010-02-09 Fourth quarter 2009

17. CASH FLOW FOR Q4 2009
SEK million Q4 09 Q4 08
OPERATING ACTIVITIES
Cash flow from operations, other 2,485 1,930
Taxes paid -205 -120
Changes in working capital 421 127
CASH FLOW FROM OPERATING ACTIVITIES 2,701 1 937
INVESTING ACTIVITIES
CAPEX -1,048 -1,233
Cash Flow after CAPEX 1,653 704
Acquisition and sale of shares and participations, net 344 106
1,997 810
17 2010-02-09 Fourth quarter 2009

18. CASH FLOW FOR FULL YEAR 2009
SEK million 2009 2008
OPERATING ACTIVITIES
Cash flow from operations, other 8,870 8 166
Taxes paid -883 -377
Changes in working capital 1 131 107
CASH FLOW FROM OPERATING ACTIVITIES 9,118 7,896
INVESTING ACTIVITIES
CAPEX -4,340 -4,608
Cash Flow after CAPEX 4,778 3,288
Acquisition and sale of shares and participations, net 3 1,597
4,781 4,885
18 2010-02-09 Fourth quarter 2009

19. CASH FLOW DEVELOPMENT
Cash flow after CAPEX Cash flow from operating activities
2 800
2 400
2 000
(SEK million)
1 600
1 200
800
400
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
19 2010-02-09 Fourth quarter 2009

20. GROUP FINANCIAL PROFILE
Net debt Net debt incl. JV
Net debt/ EBITDA 2009 Net debt incl. JV/ EBITDA 2009
25 000 2,5
20 000 2
(SEK million)
15 000 1,5
10 000 1
5 000 0,5
0 0
Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
20 2010-02-09 Fourth quarter 2009

21. ROCE
19,0%
18,0%
17,0%
16,0%
15,0%
14,0%
13,0%
12,0%
11,0%
10,0%
9,0%
8,0%
7,0%
6,0%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2007 2008 2009
21 2010-02-09 Fourth quarter 2009

22. NET INTAKE PER SEGMENT
Mobile Fixed broadband Fixed telephony
1 400
1 200
1 000
(In thousands)
800
600
400
200
0
-200 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
-400
22 2010-02-09 Fourth quarter 2009

23. GROUP CUSTOMER STOCK
Group Customer Stock Group Mobile Customer Stock
Mobile Fixed Broadband Fixed Telephony Prepaid voice Postpaid voice Mobile Internet
30 000 25 000
25 000 20 000
20 000
15 000
15 000
10 000
10 000
5 000 5 000
0 0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
• Strong intake in the Mobile segment
– Driven by Russia adding 1 149 000 new customers
23 2010-02-09 Fourth quarter 2009

24. GROUP Q4 2009 NET SALES
Mobile Fixed broadband Fixed telephony Other
12 000
10 000
(SEK million)
8 000
6 000
4 000
2 000
0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
24 2010-02-09 Fourth quarter 2009

25. GROUP Q4 2009 EBITDA
Mobile Fixed broadband Fixed telephony
Other Group EBITDA margin
3 000 25%
2 500 24%
2 000
(SEK million)
23%
1 500
22%
1 000
21%
500
0 20%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
-500 19%
25 2010-02-09 Fourth quarter 2009

26. MOBILE Q4 2009 EBITDA
Mobile Mobile EBITDA margin
1 800 30%
1 750
1 700 25%
(SEK million)
1 650 20%
1 600
1 550 15%
1 500
1 450 10%
1 400 5%
1 350
1 300 0%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
26 2010-02-09 Fourth quarter 2009

27. SWEDISH MOBILE MARGIN
Temporary negatively affected by increased costs for hardware related to post-
paid customers
38%
36%
34%
32%
30%
28%
Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
Today, cost upfront If we had matched the cost for hardware with instalments from customers
27 2010-02-09 Fourth quarter 2009

28. MoU AND ARPU DEVELOPMENT
Russia
Sweden 70 240
240 240 60
220
SEK
220 220 50
SEK
200
200 200 40
180 180 30 180
Q1 08Q2 08Q3 08Q4 08Q1 09Q2 09Q3 09Q4 09
Q1 Q2 Q3 Q4 Q2 Q3 Q4
08 08 08 08 09 09 09 ARPU MoU
ARPU MoU
• Relatively strong development despite challenging economical times
– Swedish ARPU being driven down by an increasing customer base in Mobile Internet and
softness in corporate customer MoU
28 2010-02-09 Fourth quarter 2009

29. FIXED BROADBAND Q4 2009 EBITDA
Fixed broadband Fixed broadband EBITDA margin
400 25%
20%
300
(SEK million)
15%
200
10%
100
5%
0 0%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
29 2010-02-09 Fourth quarter 2009

30. FIXED TELEPHONY Q4 2009 EBITDA
Fixed Telephony Fixed telephony EBITDA margin
500 30%
29%
400 29%
(SEK million)
28%
300 28%
27%
200 27%
26%
100 26%
25%
0 25%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
30 2010-02-09 Fourth quarter 2009

31. GROUP Q4 2009 EBIT
Mobile Fixed broadband Fixed telephony
Other Group EBIT margin
2 000 16%
14%
1 500
12%
(SEK million)
1 000
10%
500 8%
6%
0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 4%
-500
2%
-1 000 0%
31 2010-02-09 Fourth quarter 2009

32. GROUP Q4 2009 CAPEX
Mobile Fixed broadband Fixed telephony
Other Capex/sales
1400 14%
1200 12%
(SEK million)
1000 10%
800 8%
600 6%
400 4%
200 2%
0 0%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
In 2010: Tele2 forecast a CAPEX level in the range of SEK 4,600 – 4,800 million
32 2010-02-09 Fourth quarter 2009

33. AGENDA
CEO review Harri Koponen
Financial review Lars Nilsson
Concluding remarks Harri Koponen
33 2010-02-09 Fourth quarter 2009

34. CONCLUDING REMARKS
Top priorities 2010
• Investment year
• Targeting a long term mobile EBITDA
margin on own infrastructure at least 35
percent
• Best Deal
– Expected quality
– Perceived price leader
34 2010-02-09 Fourth quarter 2009

35. Q&A
35 2010-02-09 Fourth quarter 2009

36. Appendix A
36 2010-02-09 Fourth quarter 2009

37. TELE2 SWEDEN MOBILE
Mobile subscriber Net intake
3 500 140
3 400 120
3 300 100
(In thousands)
3 200 80
3 100 60
3 000 40
2 900 20
2 800 0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
37 2010-02-09 Fourth quarter 2009

38. TELE2 SWEDEN MOBILE (contd)
Mobile net sales EBITDA marg. EBIT marg.
2 000 40%
1 950 35%
1 900 30%
(SEK million)
1 850 25%
1 800 20%
1 750 15%
1 700 10%
1 650 5%
1 600 0%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
38 2010-02-09 Fourth quarter 2009

39. TELE2 SWEDEN MOBILE (contd)
Postpaid voice Prepaid voice Mobile Internet
4 000
3 500
3 000
(In thousands)
2 500
2 000
1 500
1 000
500
0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
39 2010-02-09 Fourth quarter 2009

40. TELE2 NORWAY MOBILE
Mobile subscriber Net intake
480 25
460 20
15
440
(In thousands)
10
420
5
400
0
380 -5
360 -10
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
40 2010-02-09 Fourth quarter 2009

41. TELE2 NORWAY MOBILE (contd)
Mobile net sales EBITDA marg.
700 12%
10%
650
8%
(SEK million)
600
6%
550
4%
500
2%
450 0%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
41 2010-02-09 Fourth quarter 2009

42. TELE2 RUSSIA MOBILE
Mobile subscriber Net intake
16 000 1 400
14 000 1 200
12 000
1 000
(In thousands)
10 000
800
8 000
600
6 000
400
4 000
2 000 200
0 0
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
42 2010-02-09 Fourth quarter 2009

43. TELE2 RUSSIA MOBILE (contd)
Mobile net sales EBITDA marg.
2 500 37%
36%
2 000 35%
(SEK million)
34%
1 500
33%
32%
1 000
31%
500 30%
29%
0 28%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
43 2010-02-09 Fourth quarter 2009

44. TELE2 BALTIC MOBILE
Mobile subscriber Net intake
3 800 80
3 600 60
3 400 40
3 200 20
(In thousands)
3 000 0
2 800 -20
2 600 -40
2 400 -60
2 200 -80
2 000 -100
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
44 2010-02-09 Fourth quarter 2009

45. TELE2 BALTIC MOBILE (contd)
Estonia net sales Lithuania net sales Latvia net sales EBITDA marg.
1200 40%
1000
800 35%
(SEK million)
600
400 30%
200
0 25%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
45 2010-02-09 Fourth quarter 2009

46. TELE2 CROATIA MOBILE
Mobile subscriber Net intake
850 100
750 80
60
650
(In thousands)
40
550
20
450
0
350 -20
250 -40
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
46 2010-02-09 Fourth quarter 2009

47. TELE2 CROATIA MOBILE (contd)
Mobile net sales EBITDA marg.
400 0%
-5%
350
-10%
300 -15%
(SEK million)
-20%
250
-25%
200 -30%
-35%
150
-40%
100 -45%
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
47 2010-02-09 Fourth quarter 2009

48. Appendix B
48 2010-02-09 Fourth quarter 2009

49. SWEDEN OUTLOOK
• Tele2 will continue to target higher market share in the postpaid
segment, which in the longer term will lead to:
– Higher customer intake
– Improved ARPU
– Lower churn
Resulting in
– Higher customer lifetime value
• In the short term, this strategy will lead to higher total acquisition costs
Resulting in
– EBITDA margin towards 30 percent in 2010
49 2010-02-09 Fourth quarter 2009

50. RUSSIA OUTLOOK
• Subscriber base should be able to reach18-19 million by YE 2011
• Maintain ARPU growth at 5% by 2011
• EBITDA 2010-2011
– Old regions’ EBITDA margin should evolve in the range of 40-45 percent
– New regions’ EBITDA margin should break even 2 years from launch
– EBITDA contribution from new regions should be in the range of SEK -700
to -900 million
– Russia’s total EBITDA margin should develop in the range of 25-30
percent
• Capex 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
50 2010-02-09 Fourth quarter 2009

51. 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”
51 2010-02-09 Fourth quarter 2009

52. FINANCIAL ITEMS Q4
SEK million Q4 09 Q4 08 Change
External
Net interest expenses -9 -86 77
Exchange rate differences, external -61 -251 190
Other financial items -24 8 -32
-94 -329 235
Exchange rate differences, intragroup -30 -264 234
Financial items -124 -593 469
52 2010-02-09 Fourth quarter 2009

53. FINANCIAL ITEMS 2009
SEK million 2009 2008 Change
External
Net interest expenses -358 -400 42
Exchange rate differences, external 3 -344 347
Other financial items -65 -63 -2
-420 -807 387
Exchange rate differences, intragroup -80 -206 126
Financial items -500 -1,013 513
53 2010-02-09 Fourth quarter 2009

54. THE BEST DEAL
54 2010-02-09 Fourth quarter 2009