ice group: the disruptive challenger · 7 ice group: the disruptive challenger Norway: favourable...
Transcript of ice group: the disruptive challenger · 7 ice group: the disruptive challenger Norway: favourable...
ice group: the disruptive challenger
2
Disclaimer No representation or warranty, express or implied, is given by or on behalf of ice group AS (the “Company”) or any of its parent or subsidiary undertakings or any of such person’s respective directors, officers, employees, agents or affiliates (together, the “Group”) or any party who has
provided input to the information herein or their respective directors, officers, employees, agents, affiliates or advisers, as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein nor as to the
reasonableness of any information contained herein and no responsibility or liability (including in respect of direct, indirect or consequential loss or damage) is assumed by any such persons for such information or opinions or for any errors or omissions.
Except where otherwise indicated , the information provided herein is based on matters as they exist at the date hereof and not as of any future date and will be subject to updating, revision, verification and amendment without notice and such information may change materially. The views
expressed herein are subject to change based upon a number of factors, including, without limitation, macroeconomic and equity market conditions, investor attitude and demand, the business prospects of the Group and other specific issues. Any statement, estimate or projection included
in these materials (or upon which any of the conclusions contained herein are based) with respect to anticipated future performance are based upon assumptions and may prove not to be correct and speak only as of the date hereof. Neither the Company nor any other member of the
Group is under an obligation to update or keep current the information contained herein. Nothing contained herein is or should be relied upon as a promise or representation as to the future. Neither the Company nor any of its affiliates has verified the achievability of any estimate or forecast
of future financial performance contained herein, nor of any of the methods underlying the preparation of any such estimate or forecast. This document has not been reviewed or approved by any regulatory or supervisory authority.
The information herein includes statements that are, or may be deemed to be, “forward looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “plans”,
“may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places and include, but are not limited to, statements regarding the Group’s
intentions, beliefs, opinions or current expectations concerning, amongst other things, results of operations, financial condition, liquidity, prospects, growth and strategies. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and the actual results of operations, financial condition and liquidity, and the development of the industry in which the Group operates, may differ materially from
those made in or suggested by the forward-looking statements set out herein. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. There are a number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these statements and forecasts. Past performance of members of the Group cannot be relied on as a guide to future performance. Forward-looking statements speak only as at the date hereof and the Group expressly disclaims any
obligations or undertaking to release any update of, or revisions to, any forward-looking statements herein. No statement herein is intended to be a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. In addition, even if the
results of operations, financial condition and liquidity of the Group, and the development of the industry in which the Group operates, are consistent with the forward-looking statements set out herein, those results or developments may not be indicative of results or developments in
subsequent periods.
The information set out herein has been prepared on the basis of information held by the Group and also from publicly available information. This information, which does not purport to be comprehensive, has not been independently verified by or on behalf of the Group. These materials do
not purport to contain a complete description of the Group or the markets in which the Group operates, nor do they provide a valuation of the Company. The analyses contained in these materials are not, and do not purport to be, appraisals of the assets, securities or business of the Group
or any other person. The information herein does not constitute an audit or due diligence review and should not be construed as such.
These materials do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any
contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. The distribution of this document may be restricted by law and persons into whose possession this document comes should inform themselves
about, and observe, any such restrictions.
3
Highly experienced management team with proven track record
Source: Company information
JD FOUCHARD
CEO
JOHAN MICHELSEN
Deputy CEO
MURAT ERDEN
CFO
EIVIND HELGAKER
CEO | Norway
JEAN-MARC ENGELS
CTIO
Medici
Corporate
Company to provide
Strong combination of financial and operational
expertise and experience
Operational experience from developed and emerging
markets, combining growth and scalability
Track record of successful acquisitions
Experience with blue-chip large and listed companies
Majority of executives are also shareholders
354 551
699
2014 2015 2016
55.1 68.2 76.2 95.0 142.4 197.3 233.8 268.5 293.1
Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
4
ice.net – growing pure 4G mobile data challenger
• Norway's #3 network operator
• Successfully transformed from MBB provider to a mobile challenger
• Mobile data, 4G-only network
• Customer centric approach
• Significant cost advantage and innovative
• Increased mobile market share to 5.1%2 as of Jun-17 since launch of
smartphone offering in June 2015
Service revenue for ice.net - Norway (NOKm)
…with consistent growth
Proven market challenger in Norway…
Aim to
replicate
Norway's
success in
highly
attractive
markets
Strong growth levers with footprint in
markets with ~587m people
Country4 Population5
(million)
2016A-2021E
Service Entry
year
(100%)
5.3
5.5
Smartphone +
MBB 2009
(30%)6
206.1
213.4
Smartphone +
MBB 2017
(51%)
258.2
269.8 MBB 2015
(52%)
102.3
110.0 MBB 2015
(100% / 92%)
10.0 / 5.7
10.7 / 5.8 MBB 2009
ice.net B2B and B2C smartphone subscribers development (k) and market share (%)2
Source: ice group Scandinavia Holdings AS' quarterly and annual reports, NKOM
(1) ice.net refers to subsidiaries in Norway: Ice communication Norge AS and ice Norge AS
(2) Figures for smartphone subscribers include other mobile telephony devices. Market share figures: Q4-16 source: NKOM (most recent imported data),
Q2-17 source: company's estimate, taking into account the acquisition of Hello AS in Jul-2017
(3) Range of figures indicated by dashed lines pro forma for the acquisition of Hello AS, completed in Jul-17. Migration to be completed by year end 2017
Subscribers (000') Market share (%)
79.3% 26.9% 55.5% na
YoY growth
Smartphone
launched in
Jun-15
4.1%2
328.1 - 333.13
133
239
Q1-16 Q1-17
1
1
(4) Percentages represent ice group Holdings AB's ownership stake
(5) Source: EIU. 2021 figures are estimates
(6) Option to increase the ownership to 60% for US$150m investment by 15-
Nov-2017
5.1%2
5
Strong track record of challenging industry norms
Access Industries acquires ice group as a focused 450MHz MBB player in
Norway, Sweden and Denmark
FOCUS ON MOBILE DATA ENTERING SMARTPHONE IN NORWAY INTERNATIONAL EXPANSION
Aim to
replicate
Norway's
success in
highly
attractive
markets
Feb-2009
ice.net wins 1/3 of 4G frequencies
in license
auction Dec-2013
ice.net secures substantial remedy package (Tele2’s network, NRA2 and
NwN2) 3Q14/1Q15
Soft launch of mobile telephony
offering in Norway Jun-2015
Finalized MBB network
upgrade from 3G to 4G Oct-2015
Launch of data rollover
Acquisition of Hello AS customer base
On-net share from 0 to 24% (Jun-17)4
328 -333k smartphone users (Jul-17)5
2Q/3Q-2017
Market entries done at attractive price groups Focus on mobile data Low risk approach and cost advantages with sub 1GHz frequencies
US$/MHz/
Pop 0.23
Entry in Indonesia in
partnership with PSTI Nov-2015 US$/MHz/
Pop <0.026
Entry in the Philippines in
partnership with Citadel
Dec-2015 US$/MHz/
Pop <0.02
Entry in data centric
4G business
Brazil Nextel
Jun-2017 US$/MHz/
Pop <0.106
Refocus from voice group to data over 450MHz on 3G technology
ahead of competition 2009
Source: Company's information, BMI Research figures issued in 2017, We are Social in partnership with Hootsuite in Jan 2017
(1) EBITDA margin % refers to ice.net. ice.net refers to subsidiaries in Norway: Ice communication Norge AS and ice Norge AS
(2) NRA stands for National roaming agreement. NwN stands for Network Norway
(3) Broadband penetration (source: BMI Research) includes blended mobile and fixed broadband, calculated as the number of
connections divided by population. Mobile social media penetration (source: We are Social in partnership with Hootsuite) calculated as the
number of active accounts on the top social media network in each country accessed via mobile compared to the population
(4) On-net traffic figure for blended B2B and B2C
Strategic focus on mobile data 8 years ago Increasing applicable market with >10x Relatively underserved large markets3
Growth, turnaround, scalability, network swaps 2009 - 2013
Jan. – Dec. 2016
Cost scalability demonstrated in Norway1
FY 2010 FY 2011 FY 2012 FY 2013 Run rateQ3 2014
EBITDA %
3.5%
11.5% 13.0%
35.2% 35.0%
52.0% 52.0% 57.5%
Indonesia Philippines Brazil North America
BB penetration Mobile social media penetration
(5) Figure pro forma for the acquisition of Hello AS, completed in Jul-17. Migration to be completed by year end 2017
(6) Based on enterprise value
(7) Source: Nkom "Ekomstatistikken 2016"
EBITDA margin (%)
4% 58%
MBB7 MBB +
Smartphone7
6
ice group corporate structure
Source: Company information
(1) Name change is underway (AINMT Holdings AB to become ice group Holdings AB, AINMT Scandinavia Holdings AS to become ice group Scandinavia Holdings AS, AINMT International Holdings
BV to become ice group International Holdings BV)
(2) PT Sampoerna Telekomnikasi Indonesia
Ownership is 100% unless otherwise noted
Transaction perimeter
ice group Holdings AB1
90.32%
PT STI2
35% held by PT Sampoerna
Telekomnikasi Indonesia
Broadband Everywhere
48% held by Citadel
51%
Nextel
70% held by NII
Access Industries Holdings ice group AS
~61% direct ownership
~65% total ownership
ice group International Holdings BV1 ice group Scandinavia Holdings AS1
30%
52%
Ice Communication
Ice Norge
Netett Sverige
Ice Danmark
~39%
~11%
7
ice group: the disruptive challenger
Norway: favourable market structure and strong mobile data growth
Pure focus on 4G with no legacy technology
Superior customer focus and experience
Emerging markets: opportunity believed to have the potential to drive a step-change in growth and value
Track record of significant growth and attractive economics with expected significant upside
5
6
8
Best-in-class management and blue-chip lead shareholder base 7
Large spectrum portfolio and secured nationwide coverage
Lean cost structure expected to provide significant cost advantages
1
2
3
4
21.8
9.4 9.9 8.5 7.5 10.3 10.8 11.1
77% 74% 59% 74%
37% 57%
47% 49%
Norway: favourable market structure and strong mobile data growth
…with a telecom market structure that is expected to have room for a
growing challenger
Top 3 players' Dec-16 mobile subscriber market share1
…with significant expected upside from data consumption
(1) Source: Ovum
(2) Western Europe avg includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden and UK
(3) Source: Analysys Mason. 4G penetration defined as 4G handset connections divided by total handset connections
(4) PP = percentage point
The highest ARPU market in Western Europe2…
2016 Mobile data ARPU (US$/month)1
The highest 4G penetration in Western Europe…
2016 4G penetration (%)3
WE
average2
2016A - 2021E CAGR Number of MNOs #1/#2 #3
3 4 3 4 4 3 4
2.0 3.6 3.8
8.0
0.7 1.5 1.2 2.0
WE
average2
21.4% 15.8% 46.7% 28.6% 40.1% 35.8% 34.7% 19.7%
WE
average2
2016A - 2021E CAGR
2016 average mobile data consumption/connection (GB/month)3
25.3% 21.9% 35.2% 26.7% 30.8% 25.4% 22.0% 16.2%
5.4% 6.7% 2.7% 2.9% 1.2% 8.0% 8.2% 3.6%
8
1
2016A - 2021E ∆ penetration pp4
96% 64% 68% 73% 74% 67% 66%
4%
21% 18% 27% 26% 23% 17%
23.7%
5.1%
LTE frequencies sub 2.1GHz Total subscribers
3G historical offering Swap to 4G Auction (Dec-13) New sites
9
Large spectrum portfolio and secured nationwide coverage A large spectrum portfolio acquired at competitive terms
Helping to enable ice.net to increase traffic significantly
ice.net believes it is in a unique position to take advantage of attractive
frequency portfolio
Competitive spectrum position acquired at very competitive terms due
to sealed bid auction format (Dec. 2013)
Yearly quantum of spectrum awarded in Norway
Advantageous auction, crucial for a data-only mobile operator
MHz
No new entrant
expected in
foreseeable future
# Gbits produced (illustrative)
New frequencies enable more than 100x Gbit/s produced with a 3-4x cost
2
Source: Company information
(1) Includes NOK65.8m of license fee, NOK3.8m of annual administrative charges and NOK1.5m of telecom fee
(2) Based on spectrum estimated by company being most appropriate for mobile smartphone as of Q2-17
(3) Total subscriber figures for B2B and B2C smartphone subscribers as of Q2-17. Source: company's estimate
Dec-15 Jan-15 Dec - 13 Oct - 12 May - 10 Dec - 08 Jun-04
800
900
1800
Total
Price paid
(NOKm)
2x10
2x5
2x20
2x35
705
Frequency
band (MHz)
• ice.net awarded 41% of all frequencies in 2013
Norwegian auction
• #3 player, Tele2 forced to exit the market
• Licenses with 20 years duration
• 40% population coverage obligation already met, 2
years ahead of schedule
• Annual licenses fee of NOK71.1m1
• USD/MHz/pop of 0.2
• Subsequently, ice.net secured 2x5 in 2.1GHz band
ice.net market share (%)
4x 8x 4x 32x >100x
From 500 to 2,000 4G sites
2 x 85
2 3
Large spectrum portfolio and secured nationwide coverage
40%
80%
Today Target
40%
80%
60%
20%
Today Target
10
2
Target of 70% of all data traffic on own network in Norway
Population coverage obligation in Norway already met and aiming to
achieve 80% target
Source: Company information, Omnitele technical due diligence
(1) Omnitele has completed over 1,000 projects in over 80 countries around the globe, providing consulting and expert services for telecom operators and regulators in network strategy, design and quality
assurance
(2) As of Q4 2016
(3) On-net traffic figure for blended B2B and B2C
Attractive long-term national roaming agreement with Telia helping to
secure nationwide coverage while ice.net builds its own network
• 6 year term, helping to enable the optimisation of own network prior to
taking traffic on-net
• Possibility for exclusion areas
• Access to all network improvements Telia might introduce
• Allows legacy 3G/2G and 4G voice group users on Telia's network while
pure 4G data through own network
ice.net's network is future-ready
• "Current ice group network
[...] are future proof and the
design and deployment are
in line with proven industry
practice group to enable
high service availability
and quality"
• Increasing on-net share is
expected to improve gross margins
• ~80% population coverage target
by Q4-17/ Q2-18
• Limited capex requirement after
roll-out completion
• All voice on NRA
• From 0% to ~24% on–net
traffic3 in Q2 2017
• Network optimisation is
expected to increase on-net
traffic to ~70%, further driving
margins
Population coverage (%)
ice.net NRA
Omnitele key takeaways1
Attractive long-term national roaming complements fast growing own network
• Modern high capacity networks
(4.5G ready), supporting voice
group over 4G (VoLTE) with no
legacy technology
• 100% resilient/redundant, high
availability, all-IP Core, helping
evolution to 5G
• Seamless connection with Telia's
Radio Access networks (2G/3G/4G)
24%
70%
ice.net pop coverage ice.net on-net traffic
2
2
11
Pure focus on 4G with no legacy technology Supported by a legacy-free 4G LTE only network in Norway, ice.net is able to achieve 4x larger data output at a lower cost
3
Multiband increases output and contributes to economies of scale
State of the art IT
Enables disruptive product offerings
450MHz
MBB
450, 800, 900, 1800MHz
MBB + SMARTPHONE
• Capacity
amount:10 Mhz
• Technology: 3G
• Max speeds: 9.1
Mbs
• Applicable 2016
market3: 4%
• Capacity
amount:80 Mhz
• Technology: 4G
• Max speeds: 290
Mbs
• Applicable 2016
market3: 58%
Significant cost advantages with lean operating model1
Less BTS
(Pure 4G, low
frequencies)
Less FTEs
(Pure 4G, state of
art IT)
One technology
(IT)
4G 3G 2G
4G 3G 2G
• In June 2016, ice.net launched bit's Business Support Solution platform,
including a new billing system
• A customer-centric system, designed to support business intelligence, self-
service and customer service portals. Information is then fed into "big data"
aware services in order to tailor communication to individual customers
• Rollover in Q2-17 took 4 weeks to implement, test and launch, supported
by a rapid and incremental development strategy
Live trial with Nokia in Oct-17 to achieve 3GB/s
Source: Company's information, Telia's and Telenor's reports
(1) The figures refer to the Norway entity, ice.net. ice.net refers to subsidiaries in Norway: ice communication Norge AS and ice Norge AS
(2) ice.net also has access to additional BTS through the NRA
(3) Source: Nkom "Ekomstatistikken 2016"
• A pure 4G operation and new support systems reduces the complexity and makes it possible to run with less FTEs and using less BTSs
• One technology (4G) with better spectrum efficiency at low frequency resulting in less BTS2
• One technology (4G) with no legacy requiring less FTE's to operate
38%
34%
17%
10% 2%
Retail Websales Inbound Outbound Other
Lean cost structure expected to provide significant cost advantages
Advantageous business model focused on creating a cost leader
Supported by a cost effective distribution strategy …
… and media spend per sale at a very attractive level
12
4
• No legacy retail distribution
network
• Increasing focus on digital
technology is an efficient and
cost effective way of:
• upselling to higher
subscriptions
• cross-selling MBB with
voice group services
Sales channel breakdown1 – H1 17 Cost per GB produced (illustrative index)
2G Edge 3G 4G @ 10 MHz 4G @ 80 MHz
4G is the most cost efficient technology when producing data…
3 3
3 3 3 3
3 3 3 3
Ice.net is the only
100% pure 4G
network operator
in Norway
Media spend per sale - NOK
314
717
1,263
309
659
342
117
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
Source: Company information
(1) Breakdown as a % of volume of sales
Superior customer focus and experience ice.net has embarked on a new program: creating one of the most customer-centric communications company in Norway
Customer centric approach …strong brand awareness, at par with the big players
within record time…
% who would consider to switch to the brand
Base: Not a customer of the brand, but has brand awareness1
… with a focus on NPS…
ice.net's smartphone NPS score2 (%)
5
…and lower churn than expected
Annualized churn B2C3 (%)
ice.net is the Customer Company in the business of customer experiences: "We
operate our business from the customers' point of view in line with our values"
Bold Trust
Share Fair
Customer
centric
Trust: Clear, transparent, direct and simple service
Data is kept safe and not abused
Fair: Considerate, considered, straightforward, open and accessible treatment
We ensure that customers keep
what they've paid for
Bold: Confident, empowering, positive and focused strategy
With competition copying our
Rollover launch, we quickly added
MBB and B2B
Share: Understanding, welcoming, warm and empathetic service
Existing customers got Rollover news first, then the market
12
20
9
3
-1
9 12
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
21% 17%
23% 20%
30% 30%
23%
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
Sources: Company information, Telia's 2016 annual report
(1) Source: Company information
(2) Net Promoter Score (NPS) is based on the scale from 0-10, with 0-6 being detractors, 7-8 neutral and 9-10 promotors
(3) Churn is defined as the percentage of subscribers who move their subscription from one operator to another
13
10.1
7.3 6.8 7.8 8.4
8.8 9.9 9.8
8.7 7.9
8.0 9.8 9.7
11.2 9.9
8.8
8.6 9.1 9.6 8.2 7.7
8.5
12.1
14.9 14.0 14.3
11.6 12.4
13.8 14.4
13.3 11.6
10.1
Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17ice.net Telia Telenor
NPS decrease in
response to
increasing prices
• Strong development in orders for new subscriptions
• All sales channels are delivering increased sales and conversion rates
• Awards received H1 16 as illustration of reception in the market
• High customer satisfaction with the aim of creating a “snowball effect”
14
ice.net is an attractive mobile network operator for customers, well
received by customers Successful introduction of higher price group plan improving ARPU
Award-winning growth story and market perception translating in increased customer share and brand loyalty
Ap
r-15
Ma
y-1
5
Jun
-15
Jul-
15
Au
g-1
5
Se
p-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Ap
r-16
Ma
y-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
Nov-1
6
Dec-1
6
Jan
-17
Fe
b-1
7
Ma
r-1
7
Ap
r-17
Ma
y-1
7
Jun
-17
Jul-
17
Consumer subscriber development (#)
April 2016
3 x test1
winner
April 2017
2 x “Best
customer
care” 2
Apr, May, Jun,
Jul 2017
“Best Mobile
Subscription”3
(1) The tests are: TV2 Hjelper deg (source: TV2, April 2016), TEK – Besti test (source: TEK.no, April 2016) and Dinside.no – Besti test (source: Dinside, April 2016)
(2) Source: Seeyou, 2017
(3) Test: TEK – Besti test (source: TEK.no, April – July 2017)
(4) Percentages of new sales for the given month
Current trend towards higher price plans
• Seeking to converge with incumbents' ARPU level through:
• Conversion of low-ARPU price group plans in existing subscriber plans
• Increase new sales share of high-ARPU price group plans
• As mobile data requires more capacity in the network than voice,
incumbent mobile network operators are expected to make large capital
expenditures which is expected to drive a desire to grow ARPU in order to
support a return on capital
2% 4% 2%
22% 8%
15%
5%
19% 84%
23%
17%
Jan-16 Jul-17
0.5 GB
1 GB
2 GB
5/6 GB
3/4 GB
10/12 GB
B2C price plan development4
Superior customer focus and experience 5
26.0% 17.6%
Emerging markets: opportunity believed to have the potential to drive a step-change in growth and value
(1) Source: EIU. Emerging APAC avg includes: Bangladesh, Indonesia, Malaysia, Myanmar, Philippines, Sri Lanka, Thailand and Vietnam. LatAm average includes; Argentina, Bolivia, Brazil, Colombia, Chile, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala,
Honduras, Jamaica, Mexico, Nicaragua, Peru, Paraguay, Panama, Trinidad & Tobago, Uruguay, Venezuela
(2) Source: Analysys Mason. Emerging APAC avg includes: Bangladesh, Indonesia, Malaysia, Myanmar, Philippines, Sri Lanka, Thailand and Vietnam. 4G penetration defined as 4G handset connections divided by total handset connections
(3) Source: Ovum. LatAm average includes: Anguilla, Antigua and Barbuda, Argentina, Brazil, Honduras, Jamaica, Mexico, Montserrat, Netherland Antilles, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Saint Kitts and Nevis, Saint Lucia, Saint Vincent & the Grenadines,
Suriname, Trinidad & Tobago, Turks & Caicos Islands, U.S Virgin Islands, Uruguay and Venezuela
(4) Source: Cisco VNI Global Traffic Forecast. LatAm average includes the same countries as Ovum data along with: Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Falkland Islands, French Guinea, Grenada, Guadeloupe, Guatemala, Haiti, Martinique,
Saint Pierre & Miquelon and U.S Virgin Islands. Avg data consumption/connection is the average of smartphone and mobile connected tablets and laptops
(5) PP = percentage point
15
6
2.7 2.4
…high expected growth in 4G penetration… …and upside expected from increasing data
consumption
2016 penetration (%)3 2016 avg. data consumption/connection (GB/m)4
LatAm
average
LatAm
average
54.1% 44.9% 20.9% 21.2%
8.71 8.67
Fast-growing economy…
2016 nominal GDP/capita (US$ '000) 1
3.1% 2.2%
LatAm
average
Bra
zil
2016A-2021E avg. nominal GDP growth 2016A - 2021E ∆ penetration pp5 2016A - 2021E CAGR
…in healthy, growing economies… Significantly underpenetrated wireless and
fixed broadband infrastructure…
…and upside expected from increasing data
consumption
2016 nominal GDP/capita (US$ '000)1 2016 penetration (%)2 2016 avg. data consumption/connection (GB/m) 2
3.6 2.9
3.8
8.6% 5.6% 6.4%
2016A-2021E avg. nominal GDP growth
Emerging APAC
average
Emerging APAC
average Emerging APAC
average
4G Fixed broadband 2016A - 2021ECAGR
43.3% 43.4% 43.0% 3.1% 39.0% 3.3% 21.0% 1.6% 26.9%
Ind
on
es
ia &
th
e P
hilip
pin
es
3.0%
6.0% 6.7%
2.6%
7.3% 5.6%
2016A - 2021E CAGR
0.5 0.3
0.5
Best-in-class management and blue-chip shareholder base 7
16
JD Fouchard
CEO
7
Johan Michelsen
Deputy CEO
Murat Erden
CFO
x Years at ice group
5 -
Linus Jönsson
CEO Sweden
6
Jean-Marc Engels
CTIO
René Kappelgård
CEO Denmark
5
8
Larry Ridwan
CEO Indonesia
2
Eivind Helgaker
CEO Norway
Tirso Antiporda Jr
CEO The Philippines
9
2
Roberto Rittes
CEO Brazil Nextel
Best-in-class management team with extensive experience across blue-chip telecom companies...
...supported by a shareholder with a track record of investing in
disruptive companies
Stan Miller
Chairman
Managing Director at Leaderman and
Director at MTS Russia;
former CEO of KPN International
Jorg Mohaupt2
Non-Executive Director
Director at Deezer, Gettaxi, Perform
Group and WMG
Source: Company information
(1) 9 board members in total
(2) Present on the board of ice group AS
-
ice group Holdings AB selected board representatives1
Hans-Holger Albrecht
Non-Executive Director
CEO of Deezer
Former CEO of Millicom International
Phil Hewinson
Non-Executive Director
Head of partnerships at Monzo Bank
Former strategic partner manager and
other roles at Facebook
Track record of significant growth and attractive economics with expected significant upside
2.19
1.55
0.66 0.55
0.23 0.05 0.01 <0.02
17
Jan 2015 Dec 2015 Dec 2015 Nov 2015 Dec 2013 ice group
Entry Nov 2013 Dec 2013
1700 /
1800 MHz 900 MHz 1800 MHz 1800 MHz
800 / 900 /
1800 MHz
800 / 1800 /
2100 MHz 450MHz 450MHz
Acquiring attractive spectrum positions at very attractive terms1
Country
USD/MHz/pop
Year
Frequency
Band
Significant license capex inflation: 450MHz could prove valuable given advancements of technological ecosystems
0.18
0.56
1.58
2012:
3 bidders,
3 licenses
Nov/Dec'15;
4 bidders,
2 licenses 3x
• China Unicom, for instance, holds the only 450MHz block in
China and has initiated a process to use the 450MHz license on
4G/LTE mobile data
• Significant expected advantages for ice group: lower
equipment price groups and increased likelihood of
smartphone integration
• Infrastructure equipment for LTE over 450MHz already available
from large suppliers, such as Huawei and Alcatel-Lucent
• Both Qualcomm3 and Altair Semiconductor have the technology
to deliver chipsets with support for 450MHz, although not
integrated into handsets as of today
Current 450MHz alliance members
Case study: Overview of Thai telecom auction 2012-15
USD/MHz/pop
Integration of LTE450 in smartphones would help ice group benefit from significant expected increase in valuation of 450MHz frequencies
Source: Company information
(1) Not adjusted for spectrum lifetime or frequency costs. For Brazil and Indonesia, figures are based on the enterprise value
(2) Dashed line indicates auctions in which ice group participated
(3) Qualcomm is one of the global leaders in LTE baseband chipsets and had its first chipsets ready for LTE 450MHz in February 2014
8
Expected upside reinforced by attractive entry terms
2
0.01 <0.10 <0.02
Track record of significant growth and attractive economics with expected significant upside
19
455 461
2014 2015 2016
229 437 385 397
335
2014 2015 2016
18 Source: ice group Scandinavia Holdings AS' annual and quarterly reports and ice Communications Norway AS' annual report
(1) Smartphone accounted only for 7 months in 2015
(2) Assuming transmission is defined as a fixed cost
Total revenues (NOKm)
EBITDA (NOKm)
Key takeaways
• ice.net entered the smartphone market in June 2015, which has
required large investments and increased the cost base, hence
the expected positive effect on financials has been delayed
• Smartphone share of revenues sharply increased from 37%
in 2015 to 57% in 2016
• In parallel, the number of base stations has increased from 551
in 2014 to 1,200 in 4Q 2016
• However, a large portion of cost base is fixed2 (96%), helping
to enable increased EBITDA margins along with the uptake in
scale
• Income from B2C revenue streams is growing faster than the
company average
• Capex mainly related to the acquisition of sites and LTE swap
completed in 2015/2016
• The majority of expansion capex has already been made in the
past three years
• A completely new and pure 4G network implies limited expected
capex going forward
• c.1,200 sites were 4G equipped in 2016, additional 650
needed in order to achieve 80% population coverage. It is
estimated that NOK200m of capex will be required for these
additional sites
YoY growth total /smartphone (%)
EBITDA margin (%)
Smartphone
launched in
Jun-15
Smartphone share(%) Other
revenue
Smartphone1
related revenue
15%
na
63%
37%
23%
57%
(4.2%)
51%
83%
69%
EBITDA
25% 5% (38%) (19%) (41%)
Smartphone
launched in
Jun-15
70 173 67
78
Q1-16 Q1-17
95 32
(297)
2014 2015 2016
(26)
(104)
Q1-16 Q1-17
385
626 772 137
251
Total revenue
Capex (NOKm)
Capex as % of revenues Capex
5% 73% 60% 71% 71% Smartphone
launched in
Jun-15
97 178
Q1-16 Q1-17
91% 147%
8
ice group in a nutshell
What are the differentiating factors?
• Fewer base stations required
• Expected lower risk deployment: build as you grow
• Significant coverage
• Strong brand awareness
• Low churn and high NPS
• Seeking to continue to increase in ARPU
• More efficient mobile data technology
• Less complexity and no legacy
• Data is the fastest growing segment of telecom
• Diversified between wealthy developed markets and high growth large emerging markets
• Favourable benign market structure
Large spectrum
portfolio
Superior customer
focus
4G only
19
Attractive asset base
Significant cost advantages / lowest
cost per GB produced
Able to compete on price group and
product at par with big players
Small dynamic organization with
customer centric culture
Several value levers
What are the benefits?
Higher ARPU
Lower churn
Higher NPS
Higher growth
• Cost-efficient 4G data technology
• Digital focused distribution network that facilitates cross-selling
• Low media spend per sale
Lean cost structure
Markets
• Management experience across blue-chip telecom companies
• Shareholders with track record of investing in similar companies
Management and
shareholder base Well-positioned to capitalize on
opportunities
What are the
future goals?
Appendix
Assets
NOK (m) 2015 2016 Q1-162 Q1-172
Investments in associated
companies 1,001.8 2,271.2 1,075.1 2,261.8
Loans to associated companies 359.7 353.3 357.5 363.8
Total non-current assets 1,361.5 2,624.4 1,432.6 2,625.6
Cash and Cash equivalents 4.7 3.9 4.3 3.4
Total current assets 4.7 3.9 4.3 3.4
Total assets 1,366.2 2,628.3 1,436.9 2,629.0
Equity and liabilities
Share capital 23.5 42.8 24.8 42.8
Other contributed capital 995.5 2,283.3 1,072.2 2,283.3
Retained earnings (12.5) (211.7) (47.5) (274.9)
Total equity 1,006.5 2,114.5 1,049.5 2,051.3
Derivative 58.7 197.8 72.6 -
Convertible debt 301.0 315.3 314.9 327.9
Total long-term liabilities 359.7 513.1 387.4 577.2
Trade payables 0.0 0.7 0.0 0.6
Total current liabilities 0.0 0.7 0.0 0.6
Total equity and liabilities 1,366.2 2,628.3 1,436.9 2,629.0
21
ice group AS – P&L and Balance Sheet Profit and loss Balance sheet
Source: ice group AS' annual and quarterly reports
(1) Financial year 2015 accounted from 24 March 2015 to 31 December 2015
(2) Q1 figures are unaudited
NOK (m) 20151 2016 Q1-162 Q1-172
Operating Revenue 0 0 0 0
Fees and other expenses (0.8) (1.4) (0.4) (0.1)
Share of result in associated
companies (12.2) (37.9) (9.4) (4.8)
Operating loss (12.9) (39.3) (9.8) (4.9)
Financial income 4.3 27.1 28.8 21.1
Financial expenses (3.9) (187.0) (82.3) (51.2)
Net financial items 0.4 (159.9) (53.5) (30.1)
Income before tax (12.5) (199.2) (63.2) (35.0)
Income tax 0 0 0 0
Net income for the year (12.5) (199.2) (63.2) (35.0)
Total comprehensive income (12.5) (199.2) (63.2) (35.0)
22
Excellent 4G coverage, at par with the incumbent, can be achieved by
exploiting 450 MHz
Source: Company information and Telenor website
(1) Includes external antenna
(2) Source: Company information
(3) Source: Telenor Norway website is www.telenor.no
Low frequencies have multiple advantages
3 4 10 12
20
800 MHz 900 MHz 1800 MHz 2100 MHz 2600 MHz
• Lower average capex and annual opex per base station
• Ideal for challenger and for underserved markets
• Higher frequencies can be added to existing sites to increase capacity,
without any additional costs
800 MHz
900 MHz
1,800 MHz 2,100 MHz
2,600 MHz
2. Fewer base stations required to cover the same area
3. Lower costs
4. Propagation characteristics–enhanced indoor coverage
5. Expect to help enable a lower risk "build as you grow" strategy
Illustrative
Advantageous frequencies
When compared to area covered by one 450MHz station
ice.net 4G – MBB coverage1 Telenor 4G – basic coverage -110 dBm3 -117 dBm2 1. Longer geographic reach
Large spectrum portfolio and secured nationwide coverage
23
Highly experienced management team with proven track record
Source: Company information
• 10 years’ telecom
experience
• CEO of ice group since
2011
• BoD of ice group since
2009
• Access Industries
2007-2011
• UBS telecom
investment banking
group
• Morgan Stanley
Capital Partners
• 18 years’ telecom
investment experience
• Deputy CEO
from 2017
• CFO of ice group from
2013-2017
• Partner at Pareto
Securities 2009-2012
• Founder of Medici
Corporate
• Rated best telecom
equity analyst in
Norway 2001-2005
• 16 years' telecom
experience
• CFO since 2017
• Group CFO, numerous
BoD positions and
group director of
treasury, risk
management &
procurement at Turkcell
over 15 years
• Founder Turkcell’s
consumer finance
company
• Deutsche Bank
• Bankers Trust
• 17 years’ operational
telecom experience
• Managing director of
ice group since 2009
• Canal+ Norway:
country manager 2007-
2009
• Seven years with
Tele2:
• Marketing director
• Product manager
fixed / Voip / ADSL:
Tele2 Versatel
• Product manager
Internet
• 25 years’ international
telecom experience
• ice group since 2013
• Isco International
• Ericsson Belgium &
Luxembourg:
• President
2004-2011
• VP 2000-2004
• Ericsson Japan 1995-
2000
• Ericsson China,
service director, 1992-
1995
JD FOUCHARD
CEO
JOHAN MICHELSEN
Deputy CEO
MURAT ERDEN
CFO
EIVIND HELGAKER
CEO | Norway
JEAN-MARC ENGELS
CTIO