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July 19th, 2017
Tele2AB
2
Q2 2017
% Change
Reported
LFL is constant currencies and pro forma for TDC Sweden
% Change
LFL
Mobile end-user
service r...
3
•
•
•
•
•
•
•
•
•
4
•
•
•
4
LFL is constant currencies and pro forma for TDC Sweden
Operating cash flow is EBITDA - CAPEX,...
3,018 3,095
4,029
3,877 3,900
4,332
3,932 3,921
Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
TDC
Net sales, LFL
(SEK million)
Mobile end-...
87% 85%83% 84%
Q2 16 Q2 17
Tele2 Comviq
Consumer mobile end-user
service revenue
Share of sales with bundle
>3GB
Q2 Highli...
Q2 16 Q2 17 Q2 16 Q2 17
B2B net sales, LFL
(SEK million)
B2B Large net sales, LFL
(SEK million)
Q2 Highlights
YTD integrat...
Q2 Highlights
9
Net sales
(SEK million)
EBITDA and EBITDA margin
(SEK million)
Mobile end-user service
revenue (SEK millio...
10
ASPU development Share of 4G capable
smartphones in base
Q2 Highlights
MBB end-user service revenue
– Strong ASPU growt...
Q2 Highlights
– Net sales increase driven by higher mobile service revenue, offset by lower equipment sales and lower fixe...
Spontaneous brand awareness
& brand consideration (Memo2)
Share of total new postpaid
(GfK)
Usage on own network
Q2 Highli...
44
79
92
122
160
8%
14% 13%
19%
22%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Q2 16 Q3 16 Q4 16 Q1 17 Q2 17-30
20
70
120
1...
6,402 6,753
Q2 16 Q2 17
ASPU development Integration
Q2 Highlights
15
Customer base
(thousands)
– Dual brand strategy driv...
16
Key progress areas since inception
 Sales & marketing efficiency
 Network & IT consolidation
 Procurement scope incr...
Tele2 Group
(SEK million)
18
3,307
3,598
3,711 3,725
3,908
Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
Development per market
(SEK milli...
Tele2 Group
(SEK million)
19
Development per market
(SEK million)
1,087
1,562
1,459
1,723
1,631
16.3%
22.4%
17.8%
21.9% 20...
Tele2 Group
(SEK million)
20
Development per market
(SEK million)
820 779
1,078
627
770
12.3% 11.2%
13.1%
8.0%
9.6%
0.0%
1...
Total operations
Tele2 Group
(SEK million)
Development
(SEK million)
Free cash flow = Cash flow from operating activities ...
22
EBITDA less CAPEX 12 m rolling, SEK million
3,491 3,456 3,423 3,470 3,335 3,402 3,432 3,437
3,871 4,136
-1,178 -1,504 -...
Economic net debt to EBITDA 12 m rolling
23 Economic net debt excludes debt and earn out liabilities related to Kazakhstan...
* Based on LFL which is constant currencies and pro forma for Altel and TDC Sweden24
Net sales
(SEK billion)
EBITDA
(SEK b...
26
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27
Tele2 Q2 2017 Presentation
Tele2 Q2 2017 Presentation
Tele2 Q2 2017 Presentation
Tele2 Q2 2017 Presentation
Tele2 Q2 2017 Presentation
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Tele2 Q2 2017 Presentation

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Tele2 Q2 2017 Presentation

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Tele2 Q2 2017 Presentation

  1. 1. July 19th, 2017 Tele2AB
  2. 2. 2 Q2 2017 % Change Reported LFL is constant currencies and pro forma for TDC Sweden % Change LFL Mobile end-user service revenue EBITDA Net sales SEK billion
  3. 3. 3
  4. 4. • • • • • • • • • 4 • • • 4 LFL is constant currencies and pro forma for TDC Sweden Operating cash flow is EBITDA - CAPEX, 12 m rolling
  5. 5. 3,018 3,095 4,029 3,877 3,900 4,332 3,932 3,921 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 TDC Net sales, LFL (SEK million) Mobile end-user service revenue, LFL (SEK million) Q2 Highlights EBITDA and EBITDA margin, LFL (SEK million) 6 1,778 1,885 1,928 1,865 1,969 1,959 1,922 1,930 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 846 1,068 1,028 927 1,191 1,045 1,091 1,040 24% 31% 24% 28% 27% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 – Net sales growth driven by mobile, offset by declines in fixed segments – Mobile end-user service revenue growth driven by consumer segment partly offset by declines in B2B Large – EBITDA growth driven by higher service revenue, benefits from Challenger Program and TDC synergies +1% +3% +12% LFL is pro forma for TDC Sweden
  6. 6. 87% 85%83% 84% Q2 16 Q2 17 Tele2 Comviq Consumer mobile end-user service revenue Share of sales with bundle >3GB Q2 Highlights Customer satisfaction (Tele2 Media & Insight) 7 – New Tele2 campaign and product portfolio launched in April with early positive consumer response – Consumer mobile end-user service revenue up 8% (5% excl. Q2 16 non-recurring item) driven by continued success of Comviq postpaid – Continued strong demand for more data across both brands, with 66% of customers opting for more than 3GB – Customer satisfaction stable at high levels for both brands 60% 66% Q2 16 Q2 17Q2 16 Q2 17 +8%
  7. 7. Q2 16 Q2 17 Q2 16 Q2 17 B2B net sales, LFL (SEK million) B2B Large net sales, LFL (SEK million) Q2 Highlights YTD integration synergies 8 – Net sales down slightly due to increased price competition in Large Enterprise, partly offset by growth in SME – TDC integration and synergies ahead of plan, with SEK 53m achieved in the quarter, mainly from MVNO migration – Significant contract wins in Q2 included three municipalities in the Skåne region, WSP Sverige AB and Postnord Sverige AB LFL is pro forma for TDC Sweden -1% -2%
  8. 8. Q2 Highlights 9 Net sales (SEK million) EBITDA and EBITDA margin (SEK million) Mobile end-user service revenue (SEK million) 477 521 533 522 564 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 100 200 300 400 500 600 256 287 264 286 314 33% 32% 28% 33% 33% 0% 10% 20% 30% 40% 50% 60% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 50 100 150 200 250 300 350 787 884 935 859 949 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 100 200 300 400 500 600 700 800 900 1,000 – Net sales growth driven by increase in both mobile end-user service revenue and equipment sales – Mobile end-user service revenue growth accelerated due to data monetization, growth in mobile broadband and FX benefits – Strong EBITDA performance driven by higher service revenue and Challenger Program benefits +18% +23%+21%
  9. 9. 10 ASPU development Share of 4G capable smartphones in base Q2 Highlights MBB end-user service revenue – Strong ASPU growth driven by continued prepaid to postpaid migration and larger buckets – Strong increase in smartphone penetration, with room for further growth – Rapid mobile broadband growth on the back of investments in previous quarters Q2 16 Q2 17 28% 41% Q2 16 Q2 17 Q2 16 Q2 17 +13% +51%
  10. 10. Q2 Highlights – Net sales increase driven by higher mobile service revenue, offset by lower equipment sales and lower fixed revenue – Mobile end-user service revenue growth driven by 19% increase in customer base, ASPU growth of 21% and FX benefits – EBITDA positively impacted by higher mobile service revenue and lower expansion costs – Fixed broadband EBITDA negatively affected by a SEK 64m provision related to a legal dispute regarding historical copper line rental fees 12 Net sales (SEK million) EBITDA (SEK million) Mobile end-user service revenue (SEK million) 336 419 438 451 509 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 100 200 300 400 500 600 -116 -2 -23 151 18 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 -150 -100 -50 0 50 100 150 200 1,452 1,478 1,583 1,577 1,489 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 +51%+3% +134m
  11. 11. Spontaneous brand awareness & brand consideration (Memo2) Share of total new postpaid (GfK) Usage on own network Q2 Highlights – New campaign and new propositions launched on May 17th contributed to strong mobile intake of 51k and a doubling of SIM only intake share – Unlimited proposition has ~70k subscribers within six weeks of launch – Data on-loading at 91% and voice on-loading at 50% with ~500k active VoLTE customers – Network rollout continued now at 99.6% outdoor and 91.7% indoor population coverage 13 41% 40% 49% 52% Q2 16 Q2 17 Awareness Consideration 0% 50% 67% 91% June 16 June 17 Voice Data 27% 28% 10% 15% May 16 May 17 Handset SIM only
  12. 12. 44 79 92 122 160 8% 14% 13% 19% 22% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17-30 20 70 120 170 220 – Continuing strong momentum as JV executes on its integration and go-to-market strategies – Mobile end-user service revenue growth driven by increased customer base to 6.7m customers, higher ASPU bundles and FX benefits – EBITDA margin expanded to over 22% as revenue growth drove scale benefits alongside integration synergies 14 Q2 Highlights Net sales (SEK million) EBITDA and EBITDA margin (SEK million) Mobile end-user service revenue (SEK million) 394 426 470 495 547 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 100 200 300 400 500 600 527 573 702 649 713 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 0 100 200 300 400 500 600 700 800 +35% +39% +264%
  13. 13. 6,402 6,753 Q2 16 Q2 17 ASPU development Integration Q2 Highlights 15 Customer base (thousands) – Dual brand strategy driving customer growth – Altel brand re-launched in April to strengthen its premium position in the market – Larger data buckets are driving data monetization – Network integration accelerated, with a further 800 base stations merged Q2 16 Q2 17 +16%+5%
  14. 14. 16 Key progress areas since inception  Sales & marketing efficiency  Network & IT consolidation  Procurement scope increase  Customer service optimization  Administration efficiency  New revenue streams Simplify % of products harmonized on shared platforms Discipline % of spend strategically sourced & procured Consolidate % of reduction in IT OpEx as share of revenue Transform % of staff in Shared Operations 2016 actual 2018 targetBaseline
  15. 15. Tele2 Group (SEK million) 18 3,307 3,598 3,711 3,725 3,908 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Development per market (SEK million) 3,307 3,908 152 87 173 153 13 23 Q2 16 Sweden Baltics NL KZ RoW Oth Q2 17 +18%
  16. 16. Tele2 Group (SEK million) 19 Development per market (SEK million) 1,087 1,562 1,459 1,723 1,631 16.3% 22.4% 17.8% 21.9% 20.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 100 300 500 700 900 1100 1300 1500 1700 1900 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 EBITDA margin 1,087 1,631 194 58 134 116 24 18 500 700 900 1,100 1,300 1,500 1,700 1,900 Q2 16 Sweden Baltics NL KZ RoW Oth Q2 17 +50%
  17. 17. Tele2 Group (SEK million) 20 Development per market (SEK million) 820 779 1,078 627 770 12.3% 11.2% 13.1% 8.0% 9.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 0 200 400 600 800 1000 1200 1400 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 CAPEX / Net sales 820 770 60 -125 -13 -34 62 Q2 16 SE Baltics NL KZ RoW Other Q2 17 0 -6%
  18. 18. Total operations Tele2 Group (SEK million) Development (SEK million) Free cash flow = Cash flow from operating activities and CAPEX paid21 139 838 394 178 820 Q3 16 Q1 16 Q1 17 Q2 17Q2 16 Q4 16 139 820 544 -82 3 196 20 Q2 16 EBITDA Interest etc. Taxes Working Capital CAPEX One-off item Q2 17 +490% 0
  19. 19. 22 EBITDA less CAPEX 12 m rolling, SEK million 3,491 3,456 3,423 3,470 3,335 3,402 3,432 3,437 3,871 4,136 -1,178 -1,504 -1,625 -1,940 -2,223 -2,282 -2,196 -1,934 -1,344 -1,015 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Baltic Sea Challenger & Rest of Group Investment Markets
  20. 20. Economic net debt to EBITDA 12 m rolling 23 Economic net debt excludes debt and earn out liabilities related to Kazakhstan 1,88 LeverageSEK billion 11.7 11.0 10.4 10.3 12.0 0.0 0.5 1.0 1.5 2.0 2.5 0.0 2.5 5.0 7.5 10.0 12.5 Jun 2016 Sep 2016 Dec 2016 Mar 2017 Jun 2017 Economic net debt Economic net debt to EBITDA 1.91
  21. 21. * Based on LFL which is constant currencies and pro forma for Altel and TDC Sweden24 Net sales (SEK billion) EBITDA (SEK billion) CAPEX (SEK billion) Mobile end-user service revenue
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