Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology...

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THIRD QUARTER 2012 Tele2 AB October 18, 2012

Transcript of Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology...

Page 1: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

THIRD QUARTER 2012

Tele2 AB

October 18, 2012

Page 2: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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Agenda

• About Q3 2012

• Financial review

• Concluding remarks

Page 3: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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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 million

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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 neutrality

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

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0%

5%

10%

15%

20%

0

1,000

2,000

3,000

4,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 1232%

34%

36%

38%

40%

42%

0

400

800

1,200

1,600

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Q3 Highlights Russia

EBITDA and

EBITDA MARGIN

NET SALES and

YoY NET SALES GROWTH

CUSTOMER BASE and

CUSTOMER INTAKE

SEK Million

YoY net sales

growth (right)

Net sales (left)

EBITDA

margin (right)

EBITDA (left) Customer base (left)

Customer net

intake (right)

Thousands of customers SEK Million

• Strong customer net intake of 710,000

• Increased EBITDA margin, amounting to 38%

• ARPU continues to grow, showing a growth of

4% YoY

0

200

400

600

800

16,000

18,000

20,000

22,000

24,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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NET ADDITIONS

Thousands of subscribers

TELE2 SUBSCRIBERS AS PART OF TOTAL RUSSIAN

MOBILE MARKET

The Russian mobile market overview

Million subscribers

ANNUALIZED CHURN RATE

Source: Company data, AC&M Consulting

ARPU DEVELOPMENT

RUB

Tele2

Tele2

Vimpelcom

MegaFon

MTS

Tele2

Vimpelcom

MegaFon

MTS

234

0

100

200

300

400

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

0

50

100

150

200

250

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

9.5% 6.5% 7.7% 8.8%

4% growth

Tele2

Vimpelcom

MegaFon

MTS

-4 000

-2 000

0

2 000

4 000

6 000

8 000

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

0%

20%

40%

60%

80%

Q3-11 Q4-11 Q1-12 Q2-12 Q3-12

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92% 92% 91% 92% 92%

8% 8% 9% 8% 8%

0

1,000

2,000

3,000

4,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Q3 Revenue Source Development

Voice and data demonstrate 8% and 12% YoY growth

respectively

VOICE & OTHER and DATA REVENUE SPLIT DEVELOPMENT

Data access Voice & other

SEK millions

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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

* GKRCh – State Commission on Radio Frequencies

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.

Page 9: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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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.

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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 subscriptions

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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 5

Mobile Fixed telephony Fixed broadband Other Customer base (left)

Customer net

intake (right) EBITDA

margin (right)

YoY net sales

growth (right)

SEK Million SEK Million Thousands of customers

EBITDA and

EBITDA MARGIN

NET SALES and

YoY NET SALES GROWTH

CUSTOMER BASE and

CUSTOMER INTAKE

-4%

-2%

0%

2%

0

1,000

2,000

3,000

4,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

0%

10%

20%

30%

40%

0

250

500

750

1,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12-80

-40

0

40

80

4,500

4,600

4,700

4,800

4,900

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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Bucket price plans

Launch of new Comviq price

plan

Continued demand for fixed

fee price plans

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2G and 4G network roll-out

2G

4G 80% population coverage

Shared network activated on Gotland and

on the West Coast of Sweden

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Smartphone market development

Sales of top ten mobile phones

Tele2 Sweden (Q32012)

1. iPhone 4S

2. Samsung Galaxy SIII

3. iPhone 5

4. iPhone 4

5. Samsung Galaxy Ace

6. Samsung Galaxy SII

7. HTC Desire C

8. Samsung Galaxy Gio

9. Sony Xperia Acro S

10.Samsung E1080

Regular handset Smartphone

* Postpaid residential, quantity of handsets

SMARTPHONE INSTALLED BASE*

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1111 1112 1201 1202 1203 1204 1205 1206 1207 1208 1209

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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.

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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 million

Mobile Fixed telephony Fixed broadband Other Customer base (left)

Customer net

intake (right) EBITDA

margin (right)

YoY net sales

growth (right)

SEK Million SEK Million Thousands of customers

EBITDA and

EBITDA MARGIN

NET SALES and

YoY NET SALES GROWTH

CUSTOMER BASE and

CUSTOMER INTAKE

-10%

20%

50%

80%

0

400

800

1,200

1,600

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

-10%

-5%

0%

5%

10%

-100

-50

0

50

100

150

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12-30

-15

0

15

30

0

400

800

1,200

1,600

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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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.

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Market Area Western Europe:

Overview

Focus

Netherlands Growth in mobile and B2B

Austria B2B & continuous integration of Silver Server

Germany Grow Fixed Via Mobile product

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%

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Q3 Highlights Tele2 Netherlands

SEK Million SEK Million Thousands of customers

• 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 B2B

Mobile Fixed telephony Fixed broadband Other Customer base (left)

Customer net

intake (right) EBITDA

margin (right)

YoY net sales

growth (right)

EBITDA and

EBITDA MARGIN

NET SALES and

YoY NET SALES GROWTH

CUSTOMER BASE and

CUSTOMER INTAKE

-15%

-10%

-5%

0%

5%

10%

0

400

800

1,200

1,600

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

-10%

0%

10%

20%

30%

40%

-200

0

200

400

600

800

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12-40

-20

0

20

40

0

300

600

900

1,200

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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Q3 Highlights Tele2 Germany

and Tele2 Austria

TELE2 GERMANY

EBITDA and EBITDA MARGIN

TELE2 AUSTRIA

EBITDA and EBITDA MARGIN

EBITDA

margin (right)

EBITDA (left) EBITDA

margin (right)

EBITDA (left)

SEK Million SEK Million

• 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

0%

10%

20%

30%

40%

0

30

60

90

120

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

0%

10%

20%

30%

40%

0

30

60

90

120

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Page 21: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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Focus

Continued rapid market share growth in Kazakhstan

Efficiency improvements in Baltics

Improvements in market share growth in Croatia

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%

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• 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 ongoing

Q3 Highlights Tele2 Estonia

MOBILE CUSTOMER BASE

and CUSTOMER INTAKE

Thousands of customers

Mobile customer base (left)

Customer net

intake (right)

SEK Million

NET SALES and

YoY NET SALES GROWTH

YoY net sales

growth (right)

Net sales (left)

EBITDA and

EBITDA MARGIN

EBITDA

margin (right)

EBITDA (left)

SEK Million

0%

10%

20%

30%

40%

0

20

40

60

80

Q3 11 Q4 11 Q1 12 Q2 12 Q3 120%

3%

6%

9%

12%

0

75

150

225

300

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12-10

0

10

20

30

0

150

300

450

600

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Page 23: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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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 attractive

CUSTOMER BASE and

CUSTOMER INTAKE

Thousands of customers

Customer base (left)

Customer net

intake (right)

SEK Million

NET SALES and

YoY NET SALES GROWTH

YoY net sales

growth (right)

Net sales (left)

EBITDA and

EBITDA MARGIN

SEK Million

EBITDA

margin (right)

EBITDA (left)

-40

-20

0

20

40

0

300

600

900

1,200

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

-25%

-20%

-15%

-10%

-5%

0

100

200

300

400

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

32%

34%

36%

38%

40%

0

30

60

90

120

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Page 24: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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Q3 Highlights Tele2 Lithuania

• Significant intake of 38,000 mobile customers

• EBITDA margin amounted to 35%

• Continuing strong performance

MOBILE CUSTOMER BASE

and CUSTOMER INTAKE

Thousands of customers

Mobile customer base (left)

Customer net

intake (right)

SEK Million

NET SALES and

YoY NET SALES GROWTH

YoY net sales

growth (right)

Net sales (left)

EBITDA and

EBITDA MARGIN

SEK Million

EBITDA

margin (right)

EBITDA (left)

-15%

-10%

-5%

0%

5%

0

100

200

300

400

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

10%

20%

30%

40%

50%

0

40

80

120

160

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12-5

10

25

40

55

0

500

1,000

1,500

2,000

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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MARKET SHARE DEVELOPMENT

(revenue; 100% of the market)

MARKET SHARE DEVELOPMENT

(EBITDA; 100% of the market)

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 competitors

Tele2 Lithuania – a success story

0%

10%

20%

30%

40%

50%

60%

Tele2 Company A Company B

0%

10%

20%

30%

40%

50%

60%

Tele2 Company A Company B

Page 26: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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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 quarter

CAPEX

EBITDA-CAPEX

SEK Million

CUSTOMER BASE and

CUSTOMER INTAKE

Thousands of customers

Customer base (left)

Customer net

intake (right)

SEK Million

NET SALES and

YoY NET SALES GROWTH

YoY net sales

growth (right)

Net sales (left)

EBITDA and

EBITDA MARGIN

SEK Million

EBITDA

margin (right)

EBITDA (left) EBITDA

EBITDA-CAPEX

-150

-90

-30

30

90

0

250

500

750

1,000

Q311

Q411

Q112

Q212

Q312

-15%

-10%

-5%

0%

5%

0

125

250

375

500

Q311

Q411

Q112

Q212

Q312

0%

3%

6%

9%

12%

0

15

30

45

60

Q311

Q411

Q112

Q212

Q312

-50

-25

0

25

50

Q311

Q411

Q112

Q212

Q312

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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.

Page 28: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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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

coverage

CUSTOMER BASE and

CUSTOMER INTAKE Thousands of customers

Customer base (left)

Customer net

intake (right)

SEK Million

NET SALES and

YoY NET SALES GROWTH

YoY net sales

growth (right)

Net sales (left)

EBITDA and

EBITDA MARGIN SEK Million

EBITDA

margin (right)

EBITDA (left)

-100%

-75%

-50%

-25%

0%

-160

-80

0

80

160

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

0

200

400

600

800

1,000

0

750

1,500

2,250

3,000

3,750

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

0%

150%

300%

450%

600%

0

75

150

225

300

Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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-500

0

500

1,000

1,500

2,000

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

The Kazakhstan mobile market overview

MOBILE SUBSCRIBERS – MARKET SHARE NET ADDITIONS Thousands of subscribers

10.5%

Dalacom/Pathword

Tele2 Kcell/Activ

Beeline Dalacom/Pathword

Tele2 Kcell/Activ

Beeline

3.5%

Tele2 Kazakhstan has reached more than 3 million customers within 18

months of operations

0%

25%

50%

75%

100%

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

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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.

Page 31: Tele2 AB October 18, 2012 · 2018-06-05 · Regulatory update: significant developments Technology neutrality On October 2, GKRCh* requested the Telecom Ministry to analyze the studies

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Agenda

• About Q3 2012

• Financial review

• Concluding remarks

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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%

Depreciation of net sales (%) -10.5% -9.5% -1.0%

One-off items -538 -20

EBIT 1,317 1,977 -33.4%

Normalized EBIT 1,855 1,997 -7.1%

Normalized EBIT margin (%) 17.0% 19.1% -2.1%

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%

Group results Q3

• During the quarter one-off

items of SEK -538 million

affected the EBIT result

• One-off tax items

amounted to SEK +262

million

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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%

Group results YTD

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-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

EUR RUB NOK

Average YTD Sept 2012 vs. YTD Sept 2011 Fixing rate Sept 2012 vs. Dec 2011

Currency movements YTD

EUR/EUR pegged and RUB currencies represent 57 % of

external sales and 73 % of EBITDA

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8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

0

200

400

600

800

1,000

1,200

1,400

Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12

Depreciation Depreciation of net sales (%)

Depreciation

Depreciation and

Depreciation as a percentage of net sales Change year-on-year for Q3

• Acquisition of Network

Norway: SEK 80 million

• Upgrade/replacement of

networks in the Baltics:

SEK 65 million

• Reduction in Sweden:

SEK -55 million

• Growth Russia and

Kazakhstan: SEK 61 million

SEK million

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Financial items in cash flow statement Q3 2012 Q3 2011 YTD 2012 YTD 2011 FY 2011

Interest paid -154 -76 -388 -150 -366

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

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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

Taxes

• 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)

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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 2,555

Cash flow

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-2.5

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

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 debt

Pro forma financial debt profile Sources of funding

SEK billion

12.8

12.1

16.9

15.2

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12.812.1

16.9

15.2

2.9

2.9

2.9 2.9

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

Q4 '11 Q1 '12 Q2 '12 Q3 '12

Pro forma net debt Ordinary dividend (paid May 2012)

Extraordinary dividend (paid May 2012) Leverage net

Debt position and ratio Pro forma net debt / EBITDA 12 m rolling SEK billion / Ratio

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0%

8%

15%

23%

30%

0

500

1,000

1,500

2,000

Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12

22%

19%

16%16%

21%

0%

5%

10%

15%

20%

25%

Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12

0

2,000

4,000

6,000

8,000

10,000

12,000

Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12

20%

22%

24%

26%

28%

30%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12

Group financials Group EBITDA and

Group EBITDA margin

Group CAPEX (BS) and CAPEX/Sales ROCE (Normalized)

Group Net Sales SEK million SEK million

SEK million Percent

Group EBITDA margin

CAPEX/Sales

► Mobile

► Fixed telephony

► Fixed broadband

► Other operations

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Agenda

• About Q3 2012

• Financial review

• Concluding remarks

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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

less

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Q&A

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