THIRD QUARTER 2012Tele2 ABOctober 18, 2012
Agenda             • About Q3 2012             • Financial review             • Concluding remarks2
Tele2 Group Q3 Highlights    • Net mobile customer intake of 1.5 million leading to a total customer      base of 37.7 mil...
Market Area Russia: Overview    Population    Appr. 143 million    Tele2 Russia     43 regions of Russian Federation    ...
Q3 Highlights Russia     •    Strong customer net intake of 710,000     •    Increased EBITDA margin, amounting to 38%    ...
The Russian mobile market overviewTELE2 SUBSCRIBERS AS PART OF TOTAL RUSSIAN                    NET ADDITIONSMOBILE MARKET...
Q3 Revenue Source Development    VOICE & OTHER and DATA REVENUE SPLIT DEVELOPMENT                 SEK millions            ...
Regulatory update: significant developments      Technology neutrality      On October 2, GKRCh* requested the Telecom Min...
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...
Q3 Highlights Tele2 Sweden      •    Net sales amounted to SEK 3,189 million and           EBITDA amounted to SEK 966 mill...
Bucket price plans      Launch of new Comviq price   Continued demand for fixed                 plan                    fe...
2G and 4G network roll-out     4G        80% population coverage                           Shared network activated on Got...
Smartphone market development                                       SMARTPHONE INSTALLED BASE*                            ...
Tele2 Sweden forward looking statement      The following assumptions should      be taken into account when      estimati...
Q3 Highlights Tele2 Norway          •     Strong focus on network roll-out          •     Satisfactory net intake of 14,00...
Tele2 Norway forward looking statement      The following assumptions should      be taken into account when      estimati...
Market Area Western Europe:     Overview     Population     108 million     Leading the group in business to business serv...
Q3 Highlights Tele2 Netherlands          •     Financial performance continues to be stable          •     Mobile intake a...
Q3 Highlights Tele2 Germany         and Tele2 Austria     •   Austria and Germany continue to show stable         profitab...
Market Area Central Europe and     Eurasia: Overview     Population     28 million     Represents 13% of total net sales i...
Q3 Highlights Tele2 Estonia      •    Stable financial performance and profitability in a           competitive market    ...
Q3 Highlights Tele2 Latvia      •   Tele2 Latvia maintains high efficiency in a competitive market      •   EBITDA margin ...
Q3 Highlights Tele2 Lithuania      •       Significant intake of 38,000 mobile customers      •       EBITDA margin amount...
Tele2 Lithuania – a success story     MARKET SHARE DEVELOPMENT                MARKET SHARE DEVELOPMENT     (revenue; 100% ...
Q3 Highlights Tele2 Croatia       •   Positive net intake of 33,000 customers       •   Focus on maintaining a positive ca...
Tele2 Croatia forward looking     statement      The following assumption should      be taken into account when      esti...
Q3 Highlights Tele2 Kazakhstan  •       Continuing strong net intake of 589,000 customers  •       Total number of custome...
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 Q3 2012              • Financial review              • Concluding remarks31
Group results Q3     SEK million                             Q3 2012    Q3 2011    ∆%     Net sales                       ...
Group results YTD     SEK million                             YTD 2012 YTD 2011   FY 2011     ∆%     Net sales            ...
Currency movements YTD          1%          0%          -1%          -2%          -3%          -4%          -5%          -...
Depreciation     Depreciation and     Depreciation as a percentage of net sales     SEK million                           ...
Financial items     Financial items in income statement      Q3 2012   Q3 2011   YTD 2012   YTD 2011   FY 2011     Interes...
Taxes     Taxes in income statement               Q3 2012    Q3 2011      YTD 2012    YTD 2011    FY 2011     Normal      ...
Cash flow     SEK million                                           Q3 2012   Q3 2011   YTD 2012   YTD 2011   FY 2011     ...
Pro forma financial debt profile     Sources of funding     SEK billion      20.0                                         ...
Debt position and ratio     Pro forma net debt / EBITDA 12 m rolling     SEK billion / Ratio      20.0                    ...
Group financials                                              ►                                                           ...
Agenda              • About Q3 2012              • Financial review              • Concluding remarks42
Concluding remarks      Continue to grow as an operator      Manage the shift from voice to data      Continue to migrate ...
Q&A44
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Tele2 Third quarter 2012

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Tele2 Third quarter 2012

  1. 1. THIRD QUARTER 2012Tele2 ABOctober 18, 2012
  2. 2. Agenda • About Q3 2012 • Financial review • Concluding remarks2
  3. 3. Tele2 Group Q3 Highlights • Net mobile customer intake of 1.5 million leading to a total customer base of 37.7 million • Net sales growth for the Group amounted to 9% excluding exchange rate differences, corresponding to SEK 10,906 million • EBITDA amounted to SEK 3,002 million, equivalent to a margin of 28% • CAPEX amounted to SEK 1,229 million3
  4. 4. Market Area Russia: Overview Population Appr. 143 million Tele2 Russia  43 regions of Russian Federation  22.3 million subscribers  Mobile operator #4 in Russia in terms of subscribers and revenue Represents 30% of total net sales in Q3 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. Q3 Highlights Russia • Strong customer net intake of 710,000 • Increased EBITDA margin, amounting to 38% • ARPU continues to grow, showing a growth of 4% YoYCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million24,000 800 4,000 20% 1,600 42%22,000 600 3,000 40% 15% 1,200 38%20,000 400 2,000 10% 800 36%18,000 200 1,000 5% 400 34%16,000 0 0 0% 0 32% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 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 RUSSIAN NET ADDITIONSMOBILE MARKET Tele2 MegaFonMillion subscribers Thousands of subscribers Tele2 Vimpelcom MTS 8 000250 8.8% 9.5% 6.5% 7.7% 6 000200 4 000150 2 000100 0 50 -2 000 0 -4 000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 09 09 09 09 10 10 10 10 11 11 11 11 12 12ARPU DEVELOPMENT Tele2 MegaFon ANNUALIZED CHURN RATE Tele2 MegaFon Vimpelcom MTS Vimpelcom MTS RUB400 80% 4% growth300 60% 234200 40%100 20% 0 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 09 09 10 10 10 10 11 11 11 11 12 12 126 Source: Company data, AC&M Consulting
  7. 7. Q3 Revenue Source Development VOICE & OTHER and DATA REVENUE SPLIT DEVELOPMENT SEK millions 4,000 8% 8% 3,000 9% 8% 8% 2,000 92% 92% 92% 92% 91% 1,000 0 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Voice & other Data access Voice and data demonstrate 8% and 12% YoY growth respectively7
  8. 8. Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies about using 900 MHz band for UMTS and 1800 MHz for LTE by December 1. Tele2 will further contribute to the discussion on LTE1800. The next GKRCh meeting is tentatively scheduled for December 7, 2012 New regional licenses On October 2, the GKRCh meeting agenda included the discussion of 9 GSM1800 license distributions. According to the statements of Ministry officials, the current plan is to distribute them via auctions although the auctions timing and the conditions have not yet been announced. Tele2’s participation in the auctions will depend on their terms and conditions. * GKRCh – State Commission on Radio Frequencies8
  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 approximately 22.5 (earlier 22) million. • Tele2 expects ARPU to grow by 3-5 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 in Q3 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. Q3 Highlights Tele2 Sweden • Net sales amounted to SEK 3,189 million and EBITDA amounted to SEK 966 million • Mobile service revenue growth of 4% YoY excluding interconnect, and 2% including interconnect • Mobile EBITDA margin of 33%, affected by the introduction of iPhone 5CUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million4,900 80 4,000 2% 1,000 40%4,800 40 3,000 750 30% 0%4,700 0 2,000 500 20% -2%4,600 -40 1,000 250 10%4,500 -80 0 -4% 0 0% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 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. Bucket price plans Launch of new Comviq price Continued demand for fixed plan fee price plans12
  13. 13. 2G and 4G network roll-out 4G 80% population coverage Shared network activated on Gotland and 2G on the West Coast of Sweden13
  14. 14. Smartphone market development SMARTPHONE INSTALLED BASE* 100% Sales of top ten mobile phones 90% Tele2 Sweden (Q32012) 80% 70% 60% 1. iPhone 4S 50% 2. Samsung Galaxy SIII 40% 30% 3. iPhone 5 20% 4. iPhone 4 10% 5. Samsung Galaxy Ace 0% 1111 1112 1201 1202 1203 1204 1205 1206 1207 1208 1209 6. Samsung Galaxy SII Regular handset Smartphone 7. HTC Desire C 8. Samsung Galaxy Gio 9. Sony Xperia Acro S 10. Samsung E1080 * Postpaid residential, quantity of handsets14
  15. 15. 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 mobile service revenue to grow by approximately 3-4 percent. • Tele2 expects an EBITDA margin of between 30-32 percent, assuming that the market environment will remain stable.15
  16. 16. Q3 Highlights Tele2 Norway • Strong focus on network roll-out • Satisfactory net intake of 14,000 mobile customers • Tele2 Norway reported total external revenue of SEK 1,184 million, of which SEK 1,117 million was mobile revenue • Mobile EBITDA contribution was SEK 101 millionCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1,600 30 1,600 80% 150 10% 1001,200 15 1,200 5% 50% 50 800 0 800 0% 0 20% 400 -15 400 -5% -50 0 -30 0 -10% -100 -10% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 16 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  17. 17. 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 million. • Tele2 expects an EBITDA margin of between 4-6 (earlier 2-3) percent. • Tele2 expects capex of between SEK 450-550 (earlier 850-950) million.17
  18. 18. Market Area Western Europe: Overview Population 108 million Leading the group in business to business services and consumer fixed broadband Represents 16% of total net sales in Q3 2012 Netherlands 11%; Germany 2%; Austria 3% Focus  Netherlands Growth in mobile and B2B  Austria B2B & continuous integration of Silver Server  Germany Grow Fixed Via Mobile product18
  19. 19. Q3 Highlights Tele2 Netherlands • Financial performance continues to be stable • Mobile intake above plan – net intake of 51,000 customers in Q3 and 96,000 YTD, with a significant part in the high value mobile postpaid segment • Several successful large corporate contracts signed push intake in B2BCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million1,200 40 1,600 10% 800 40% 5% 600 30% 900 20 1,200 0% 400 20% 600 0 800 -5% 200 10% 300 -20 400 -10% 0 0% 0 -40 0 -15% -200 -10% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Customer base (left) Mobile Fixed broadband Fixed telephony Other 19 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  20. 20. Q3 Highlights Tele2 Germany and Tele2 Austria • Austria and Germany continue to show stable profitability • Tele2 Germany: Fixed via Mobile partly compensates the decline in fixed • Tele2 Austria: B2B data intake remains steady throughout the quarter, delivering stable financial performance • Successful integration of Silver Server almost finalized 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% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 EBITDA (left) EBITDA (left)20 EBITDA EBITDA margin (right) margin (right)
  21. 21. Market Area Central Europe and Eurasia: Overview Population 28 million Represents 13% of total net sales in Q3 2012 Estonia 2%; Latvia 2%; Lithuania 3%; Croatia 3%; Kazakhstan 3% Focus  Continued rapid market share growth in Kazakhstan  Efficiency improvements in Baltics  Improvements in market share growth in Croatia21
  22. 22. Q3 Highlights Tele2 Estonia • Stable financial performance and profitability in a competitive market • Tele2 Estonia maintains a positive net intake of mobile customers • Modernization of network 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 Million600 30 300 12% 80 40%450 20 225 9% 60 30%300 10 150 6% 40 20%150 0 75 3% 20 10% 0 -10 0 0% 0 0% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Mobile customer base (left) Net sales (left) EBITDA (left) 22 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  23. 23. Q3 Highlights Tele2 Latvia • Tele2 Latvia maintains high efficiency in a competitive market • EBITDA margin amounted to 34% • Net customer intake of 21,000 • 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% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Customer base (left) Net sales (left) EBITDA (left) 23 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  24. 24. Q3 Highlights Tele2 Lithuania • Significant intake of 38,000 mobile customers • EBITDA margin amounted to 35% • Continuing strong performanceMOBILE CUSTOMER BASE NET SALES and EBITDA andand CUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million2,000 55 400 5% 160 50%1,500 40 300 0% 120 40%1,000 25 200 -5% 80 30% 500 10 100 -10% 40 20% 0 -5 0 -15% 0 10% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Mobile customer base (left) Net sales (left) EBITDA (left) 24 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  25. 25. 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% Tele2 Company A Company B Tele2 Company A Company B Tele2 Lithuania continues to outperform its competitors in terms of Revenue market share growth and EBITDA market share. Tele2 has the highest service revenue among all competitors25
  26. 26. Q3 Highlights Tele2 Croatia • Positive net intake of 33,000 customers • Focus on maintaining a positive cash flow • An impairment of goodwill and other fixed assets amounting to SEK 250 million was done in the quarterCUSTOMER BASE and NET SALES and EBITDA and EBITDA-CAPEXCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands 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 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 11 11 12 12 12 11 11 12 12 12 11 11 12 12 12 11 11 12 12 12 EBITDA Customer base (left) Net sales (left) EBITDA (left) 26 CAPEX Customer net YoY net sales EBITDA intake (right) growth (right) margin (right) EBITDA-CAPEX
  27. 27. 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 percent.27
  28. 28. Q3 Highlights Tele2 Kazakhstan • Continuing strong net intake of 589,000 customers • Total number of customers amounted to 3.1 million • Continuing rapid roll-out of new base stations for increased coverageCUSTOMER BASE and NET SALES and EBITDA andCUSTOMER INTAKE YoY NET SALES GROWTH EBITDA MARGINThousands of customers SEK Million SEK Million3,750 1,000 300 600% 160 0%3,000 800 225 450% 80 -25%2,250 600 150 300% 0 -50%1,500 400 75 150% -80 -75% 750 200 0 0 0 0% -160 -100% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Customer base (left) Net sales (left) EBITDA (left) 28 Customer net YoY net sales EBITDA intake (right) growth (right) margin (right)
  29. 29. The Kazakhstan mobile market overview MOBILE SUBSCRIBERS – MARKET SHARE NET ADDITIONS Thousands of subscribers 3.5% 10.5% 100% 2,000 1,500 75% 1,000 50% 500 25% 0 0% -500 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 10 10 11 11 11 11 12 12 10 10 11 11 11 11 12 12 12 Tele2 Kcell/Activ Tele2 Kcell/Activ Dalacom/Pathword Beeline Dalacom/Pathword Beeline Tele2 Kazakhstan has reached more than 3 million customers within 18 months of operations29
  30. 30. 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 approximately 3.4 (earlier 3.0) million. • Tele2 expects an EBITDA contribution of between SEK -350 to -400 million • Tele2 expects capex of between SEK 450-500 (earlier 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.30
  31. 31. Agenda • About Q3 2012 • Financial review • Concluding remarks31
  32. 32. Group results Q3 SEK million Q3 2012 Q3 2011 ∆% Net sales 10,906 10,429 4.6% EBITDA 3,002 2,986 0.5% EBITDA margin (%) 27.5% 28.6% -1.1% Depreciation & associated companies -1,147 -989 16.0% • During the quarter one-off Depreciation of net sales (%) -10.5% -9.5% -1.0% items of SEK -538 million One-off items -538 -20 affected the EBIT result EBIT 1,317 1,977 -33.4% Normalized EBIT 1,855 1,997 -7.1% • One-off tax items Normalized EBIT margin (%) 17.0% 19.1% -2.1% amounted to SEK +262 million Financial items -219 -287 Taxes -118 -431 Net profit from continuing operations 980 1,259 -22.2% Discountinued operations - 1 Net profit 980 1,260 -22.2%32
  33. 33. Group results YTD SEK million YTD 2012 YTD 2011 FY 2011 ∆% Net sales 32,451 30,149 41,001 7.6% EBITDA 8,288 8,339 11,212 -0.6% EBITDA margin (%) 25.5% 27.7% 27.3% -2.1% Depreciation & associated companies -3,604 -2,974 -4,158 21.2% Depreciation of net sales (%) -11.1% -9.9% -10.1% -1.2% One-off items -555 22 -4 EBIT 4,129 5,387 7,050 -23.4% Normalized EBIT 4,684 5,365 7,054 -12.7% Normalized EBIT margin (%) 14.4% 17.8% 17.2% -3.4% Financial items -718 -591 -674 Taxes -712 -1,203 -1,472 Net profit from continuing operations 2,699 3,593 4,904 -24.9% Discountinued operations - -7 -7 Net profit 2,699 3,586 4,897 -24.7%33
  34. 34. Currency movements YTD 1% 0% -1% -2% -3% -4% -5% -6% EUR RUB NOK Average YTD Sept 2012 vs. YTD Sept 2011 Fixing rate Sept 2012 vs. Dec 2011 EUR/EUR pegged and RUB currencies represent 57 % of external sales and 73 % of EBITDA34
  35. 35. Depreciation Depreciation and Depreciation as a percentage of net sales SEK million Change year-on-year for Q3 1,400 12.5% • Acquisition of Network 12.0% 1,200 Norway: SEK 80 million 11.5% 1,000 11.0% • Upgrade/replacement of 800 10.5% networks in the Baltics: 600 10.0% SEK 65 million 400 9.5% • Reduction in Sweden: 9.0% 200 SEK -55 million 8.5% 0 8.0% • Growth Russia and Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Kazakhstan: SEK 61 million Depreciation Depreciation of net sales (%)35
  36. 36. Financial items Financial items in income statement Q3 2012 Q3 2011 YTD 2012 YTD 2011 FY 2011 Interest income/costs -259 -180 -710 -308 -483 Exchange rate differences, external -12 -11 -19 -53 -24 Exchange rate differences, intragroup 88 -53 135 -92 13 Other financial items -36 -43 -124 -138 -180 Total -219 -287 -718 -591 -674 Financial items in cash flow statement Q3 2012 Q3 2011 YTD 2012 YTD 2011 FY 2011 Interest paid -154 -76 -388 -150 -36636
  37. 37. Taxes Taxes in income statement Q3 2012 Q3 2011 YTD 2012 YTD 2011 FY 2011 Normal -380 -431 -974 -1,203 -1,580 One-off 262 - 262 - 108 Total -118 -431 -712 -1,203 -1,472 Taxes in cash flow statement Q3 2012 Q3 2011 YTD 2012 YTD 2011 FY 2011 Normal -178 -235 -492 -785 -948 One-off - - - - - Total -178 -235 -492 -785 -948 • One time valuation of deferred tax assets in Austria SEK +262 million • Deferred tax assets at year to date amounted to SEK 2.5 billion (Dec 2011: SEK 3 billion)37
  38. 38. Cash flow SEK million Q3 2012 Q3 2011 YTD 2012 YTD 2011 FY 2011 OPERATING ACTIVITIES Cash flow from operations, excl. taxes and interest 2,866 2,978 8,165 8,402 11,261 Interest paid -154 -76 -388 -150 -366 Taxes paid -178 -235 -492 -785 -948 Change in working capital 244 59 -421 -205 -257 Cash flow from operating activities 2,778 2,726 6,864 7,262 9,690 INVESTING ACTIVITIES CAPEX -1,076 -1,142 -3,323 -3,819 -5,572 Cash flow after CAPEX 1,702 1,584 3,541 3,443 4,118 Shares and other financial assets 3 51 -200 -3 -1,563 Cash flow after investing activities 1,705 1,635 3,341 3,440 2,55538
  39. 39. Pro forma financial debt profile Sources of funding SEK billion 20.0 16.9 17.5 15.2 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 Q3 12 Revolving Credit Facility Russian bond Commercial paper Swedish bond Norwegian bond Other financing Put option Kazakhstan Cash Pro forma net debt39
  40. 40. Debt position and ratio Pro forma net debt / EBITDA 12 m rolling SEK billion / Ratio 20.0 2.00 17.5 1.75 2.9 2.9 15.0 1.50 2.9 2.9 12.5 1.25 10.0 1.00 16.9 7.5 15.2 0.75 12.8 12.1 5.0 0.50 2.5 0.25 0.0 0.00 Q4 11 Q1 12 Q2 12 Q3 12 Pro forma net debt Ordinary dividend (paid May 2012) Extraordinary dividend (paid May 2012) Leverage net40
  41. 41. Group financials ► ► Mobile Fixed telephony ► ► Fixed broadband Other operations Group EBITDA and Group EBITDA margin Group Net Sales SEK million Group EBITDA margin SEK million 3,500 30% 12,000 3,000 10,000 28% 2,500 8,000 2,000 26% 6,000 1,500 24% 4,000 1,000 22% 500 2,000 0 20% 0 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Group CAPEX (BS) and CAPEX/Sales ROCE (Normalized) SEK million CAPEX/Sales Percent 2,000 30% 25% 22% 21% 19% 20% 1,500 23% 16% 16% 15% 1,000 15% 10% 500 8% 5% 0 0% 0% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 1241
  42. 42. Agenda • About Q3 2012 • Financial review • Concluding remarks42
  43. 43. Concluding remarks Continue to grow as an operator Manage the shift from voice to data Continue to migrate from prepaid to postpaid Exploit new services and opportunities by offering our customers what they need for less43
  44. 44. Q&A44
  45. 45. 45

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