Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Tele2 Q4 2016 Presentation

12,202 views

Published on

Tele2 Q4 2016 Presentation

Published in: Technology
  • Be the first to comment

Tele2 Q4 2016 Presentation

  1. 1. FOURTH QUARTER 2016 January 26, 2017 Tele2AB
  2. 2. Group highlights – Q4 2016 2 Q4 2016 % Change Reported LFL is constant currencies and pro forma for Altel and TDC Sweden % Change LFL Mobile end-user service revenue (SEK billion) 3.71 +14% +6% EBITDA (SEK billion) 1.46 +9% +4% Net sales (SEK billion) 8.22 +18% +2%
  3. 3. Delivering on our long term strategy 3 Winning People & Culture Value Champion Step-Change Productivity Focused Technology Choices • Swedish and Baltics 4G population coverage above 99% • Netherlands population coverage now >99% outdoor, >90% indoor • Netherlands data on-loading on own network at 82% • Sweden mobile end-user service revenue up 4%, excluding TDC • Baltics mobile end-user service revenue up 12% • Netherlands mobile customer base surpasses 1 million • Strong cash contribution from Sweden and Baltics • Kazakhstan JV synergy progressing well, material EBITDA contribution • Challenger program delivering, annual run-rate benefits of SEK >600 million • TDC Sweden acquisition completed October 31, welcoming 800 colleagues • Awarded BCG Global Child Forum prize and Allbright equality award • Moved to new, activity-based and open-plan HQ
  4. 4. 3 299 3 053 3 018 3 095 4 029 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Sweden – Financials Net sales (SEK million) Mobile end-user service Revenue (SEK million) Q4 Highlights EBITDA and EBITDA margin (SEK million) 4 1 801 1 758 1 778 1 885 1 928 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 946 894 846 1 068 1 028 29% 29% 28% 35% 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% -800 -300 200 700 1 200 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 TDC – TDC Sweden consolidated as of October 31, 2016 – Net sales flat (excl. TDC) due to the higher mobile growth being offset by lower fixed telephony and wholesale revenues – Continued strong mobile end-user service revenue growth of 4%, excl. TDC, driven by consumer postpaid and large enterprise segment – EBITDA, excl. TDC, flat year-on-year due to higher marketing spend +22% +7% +9% 3 294 1 872 941
  5. 5. Sweden – Continuing momentum Consumer postpaid mobile end- user service revenue Share of sales with bundle >0.5GB Q4 Highlights Geographic coverage 2G/4G Q4 15 Q4 16 5 71% 86% Q4 15 Q4 16 86% 89% Q4 15 Q4 16 – Consumer postpaid mobile end-user service revenue up 7% driven by increased data monetization and strong Comviq customer growth – Tele2 increasingly taking share of premium value buckets – Highest sales for the Comviq Christmas campaign – Strong revenue and EBITDA growth within the large enterprise segment with record profit levels in TDC +7%
  6. 6. Baltics – Financials Q4 Highlights 6 Net sales (SEK million) EBITDA and EBITDA margin (SEK million) Mobile end-user service revenue (SEK million) 476 468 477 521 533 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 100 200 300 400 500 600 257 246 256 287 264 32% 32% 33% 32% 28% 0% 10% 20% 30% 40% 50% 60% Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 50 100 150 200 250 300 350 815 770 787 884 935 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 100 200 300 400 500 600 700 800 900 1 000 – Net sales growth driven by continued demand for data services and equipment sales – Mobile end-user service revenue growth driven by prepaid to postpaid migration, data monetization and growth in mobile broadband – EBITDA growth despite increased marketing investment into the mobile broadband segment in Lithuania +15% +3%+12%
  7. 7. Baltics – Data monetization continues 7 ASPU development Share of 4G capable smartphones in base Q4 Highlights 4G population coverage – Strong data monetization driven by ongoing prepaid to postpaid transition and data centric pricing – Strong ASPU growth, especially in Lithuania, driven by mobile broadband and consumer postpaid – 4G handset penetration continues to drive data consumption – 99% network coverage drives higher data usage and purchase of top-up data buckets 88% 99% Q4 15 Q4 16Q4 15 Q4 16 20% 37% Q4 15 Q4 16 +7%
  8. 8. Netherlands – Financials Q4 Highlights – Net sales up due to strong mobile momentum, slightly offset by decline in fixed – Strong mobile end-user service revenue driven by 24% increase in customer base and solid ASPU development – Excluding last year’s VAT adjustment of SEK 90 million, underlying mobile end-user service revenue grew 40% – EBITDA impacted by investments related to mobile launch and benefit of VAT adjustment in Q4 2015 8 Net sales (SEK million) EBITDA (SEK million) Mobile end-user service revenue (SEK million) 403 322 336 419 438 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 50 100 150 200 250 300 350 400 450 500 35 -31 -116 -2 -23 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 -150 -100 -50 0 50 100 1 512 1 441 1 452 1 478 1 583 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 +5% -166%+9%
  9. 9. Netherlands – Continuing momentum Spontaneous brand awareness & brand consideration (Memo2) Share of total new postpaid (GfK) Data usage on own network Q4 Highlights – Awareness and consideration remain at high levels supported by our ongoing innovative “Fun Rebel Campaign” – Maintaining a solid market share of new postpaid contracts, 58k net intake in the quarter, despite increased competitive pressure – Good progress in data on-loading on own network driven by network rollout now at >99% outdoor and >90% indoor coverage – Doubled our 4G customer base year-on-year to >800k, of which >600k are provisioned for VoLTE and 170k active 9 27% 82% Pre-launch Dec 16 4G 34% 40%41% 52% Pre-launch Dec 16 Awareness Consideration 12% 19% Pre-launch Oct 15 Q4 16
  10. 10. -38 14 47 84 92 -5% 3% 8% 14% 13% -50% -40% -30% -20% -10% 0% 10% 20% Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 -40 10 60 110 160 – Net sales stable due to a heavy Altel equipment sales campaign in Q4 2015 – Significant mobile end-user service revenue growth due to higher ASPU and an increasing customer base – Positive EBITDA development driven by revenue growth, improved operating leverage and synergies from JV integration Kazakhstan – Financials 10 Q4 Highlights LFL is constant currency and pro forma for Altel Net sales, LFL (SEK million) EBITDA and EBITDA margin, LFL (SEK million) Mobile end-user service revenue, LFL (SEK million) 404 418 433 457 470 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 50 100 150 200 250 300 350 400 450 500706 545 574 611 702 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 0 100 200 300 400 500 600 700 800 +343%+16%0%
  11. 11. 6 114 6 440 Q4 15 Q4 16 +5% Q4 15 Q4 16 Kazakhstan – Strong performance ASPU development, LFL Integration Q4 Highlights 11 Customer base, LFL (thousands) LFL is pro forma for Altel – Customer base continues to grow year-on-year, despite competitive pressure – Strong ASPU growth driven by our continued focus on improving data monetization – JV integration well on track with all 2016 integration KPI targets met. ~500 base station sites merged as integration progresses into 2017 – New Altel campaign launched to promote speed, data usage and improved brand consideration +8% ~500 sites merged
  12. 12. Challenger program on track 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 target 2018 targetBaseline 30% 40% 60% 40% 75% 80% 0% 5% 20% 12% 18% 25% Key progress areas  Further progress made on consolidating key cost categories into strategic sourcing, reaching level above 75% by year end  Continued consolidation of Network & IT organizations into Shared Operations, with Baltics and Croatia joining in Q4 2016, enabling further economies of scale  Productivity improvement program implemented in Sweden, reducing more than 200 FTEs  Announced reduction of additional 75 FTEs in Netherlands  Product simplification initiative progressing. 950 products closed year to date 12 ✔ ✔ ✔ ✔
  13. 13. Financial Overview 13
  14. 14. 3 242 3 711 127 57 35 217 9 24 Q4 15 Sweden Baltics NL KZ RoW Oth Q4 16 Mobile end-user service revenue Tele2 Group (SEK million) 14 3 242 3 129 3 307 3 598 3 711 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 +14% Development per market (SEK million)
  15. 15. EBITDA Tele2 Group (SEK million) 15 Development per market (SEK million) 1 337 1 226 1 087 1 562 1 459 19,3% 19,0% 16,3% 22,4% 17,8% 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 600 800 1000 1200 1400 1600 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 EBITDA margin +9% 1 337 1 45982 7 -58 97 17 -23 630 830 1 030 1 230 1 430 1 630 1 830 Q4 15 Sweden Baltics NL KZ RoW Oth Q4 16
  16. 16. CAPEX Tele2 Group (SEK million) 16 Development per market (SEK million) 1 223 1 078 108 -36 -208 41 -89 39 350 550 750 950 1 150 1 350 Q4 15 Sweden Baltics NL KZ RoW Oth Q4 16 1 223 1 154 820 779 1 078 17,6% 17,9% 12,3% 11,2% 13,1% 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 0 200 400 600 800 1000 1200 1400 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 CAPEX / Net sales -12%
  17. 17. Free cash flow Total operations Tele2 Group (SEK million) Development (SEK million) Free cash flow = Cash flow from operating activities and CAPEX paid17 -291 -154 139 838 394 -500 -300 -100 100 300 500 700 900 Q3 15 Q1 16 Q1 16 Q3 16 Q4 16 Q4 15 Q2 16 -291 394 122 -44 -24 130 0 -300 -200 -100 0 100 200 300 400 500 600 Q4 15 EBITDA Interest etc Taxes Working capital CAPEX One-off items Q4 16 +235% 501
  18. 18. Cash generation in established markets 18 Note: Cash generation defined as (EBITDA-CAPEX)/EBITDA, Established markets defined as Sweden and Baltics 83% 80% 77% 66% 69% 65% 79% 77% 74% 2014 2015 2016 SE Baltics Established
  19. 19. Debt position and financial leverage Economic net debt to EBITDA 12 m rolling 19 Economic net debt is defined as net debt excluding liabilities from Kazakhtelecom and liabilities guaranteed by Kazakhtelecom 1,88 LeverageSEK billion 9,9 9,4 11,7 11,0 10,4 2,6 1,88 0,0 0,5 1,0 1,5 2,0 2,5 0,0 2,5 5,0 7,5 10,0 12,5 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Economic net debt Dividend, announced Economic net debt to EBITDA 1,88
  20. 20. SEK 16 billion of debt refinanced 20 4,8 3,5 1,0 0 7,6 0-1 1-2 2-5 5+ years 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 Utilized Unutilized Maturity profile in Q4 2015 (SEK billion) Maturity profile in Q4 2016 (SEK billion) 2,9 0 5,1 2,4 8,8 0-1 1-2 2-5 5+ years 0,0 2,0 4,0 6,0 8,0 10,0 12,0 Utilized Unutilized Average maturity of net financial debt 1,6 years Average maturity of net financial debt >5 years
  21. 21. Financial guidance 2017 *Based on LFL which is constant currencies and pro forma for Altel and TDC Sweden Dividend policy: 2017 dividend to be paid in 201821 Net sales (SEK billion) EBITDA (SEK billion) 31 – 32 5.9 – 6.2 CAPEX (SEK billion) 3.8 – 4.1 Mobile end-user service revenue Mid-single digit % growth* Dividend policy Financial leverage 2017: 4 SEK / share Covered by eFCF from 2019 2.0 - 2.5
  22. 22. Summary 22
  23. 23. Key priorities moving forward  Growth from continued data monetization  Sustain momentum in Sweden and Baltics  Integration of TDC  Further leverage our challenger strategy in Netherlands and Kazakhstan  Execute on Challenger and synergy programs 23 Winning People & Culture Value Champion Step-Change Productivity Focused Technology Choices
  24. 24. Tele2’s Way2Win The Tele2 Way We are challengers, fast-movers and will always offer our customers what they need for less We will be champions of customer value in everything we do How we win Focused Technology Choices Value Champion Step-Change Productivity Winning People & Culture Vision Mission Where we play Mobile access Our current footprint Residential and Business IoT Responsible Challenger 23
  25. 25. THE END

×