quarterly report (q3) 2007
DESCRIPTION
Presentation Tele2s Quarterly report 2007 (Q3)TRANSCRIPT
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Tele2 Q3 200724 October 2007
Lars-Johan JarnheimerPresident & CEO
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Q3 2007 Summary
• Revenue growth, on a comparable basis (excluding divested andacquired entities), was 7 % vs Q3 2006
• EBITDA, on a comparable basis, improved by 15 % vs Q3 2006
-1.011,01410,909Operating revenue
n.m.-2,061609EBIT
+8.51,7001,844EBITDA
Continuing operations
Growth %Q3-06Q3-07SEK million
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Q3 2007 Summary• Strong performance in core mobile operations across the group
• Active execution of realigment process July to date– Divestments of Hungary, Irkutsk, Belgium and 3C– Acquisition of Telecom Eurasia in Krasnodar (Russia)– Divestment of operations in Italy & Spain and Austrian MVNO
• National Roaming Agreement in Russia
• Mobile network JV in Norway
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NetworkMVNO
Mobile TelephonyMobile revenue growth 17%, EBITDA up29% y-o-yNet customer intake 865,000
Sweden: net customer intake of 100,000
Russia: net intake of 647,000– Revenue growth 62%– Maintained EBITDA margin of 33%
Baltic & Croatia: Continued double-digitgrowth in all countries
Norway: Revenue growth 21%– Network JV with Network Norway improves
profitability and increases flexibility
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Mobile Telephony – SwedenStrong take-off of mobile broadband services– 45,000 mobile broadband customers in Sweden
at end-Q3– Further acceleration expected in Q4 2007
10 000
20 000
30 000
40 000
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
Mobile Broadband Customers
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Mobile Data – Sweden3G and content services picking up, 3Gdata (MB) up >650% in 9 months
– However, from a low level3G Data* SMS*
* Weekly, customers paying per SMS(bucket plans not included)
Number of SMS increased 230% in12 months, and 340% in 24 months
* MB monthly
jan-07 feb-07 mar-07 apr-07 maj-07 jun-07 jul-07 aug-07 sep-07
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BroadbandDirect Access & LLUB sales growth 12%
DA & LLUB net intake 77,000 in Q3;resold broadband -10,000– Migration of resold customers onto DA &
LLUB particularly in Norway, Sweden andAustria
Continued demanding situation inGermany – we are monitoring ourbusiness plan
Several large Cable TV and Triple Playcontracts in Sweden
NetworkResold
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Fixed TelephonyEBITDA margin stable at 13%
Fixed telephony revenue continues asexpected to decline
Customer net loss 441,000– But increased market share in Sweden and
Norway
Revenue and profitability in Poland positivelyaffected by wholesale line rental
Fixed-to-mobile trend particularly visible inGermany and Austria
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Corporate Segment
• Corporate market generates app. 18% of grouprevenue
• Increased internal focus on corporate market,mainly SME– Visible corporate position in Sweden, Netherlands
and Austria
• Growing market opportunities for SME in Balticand Russia
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A Company in ChangeGeographicExpansion of Tele21997-2005
Realignment of Tele2
2007
• Present in 25countries
• Mobile in 9countries
• MVNO in 6countries
• Broadband in 18countries
• Fixed in 23countries
The New Tele2
2008-
• Present in 15countries
• Mobile in 8countries
• MVNO in 3countries
• Broadband in9 countries
• Fixed in 9countries
• Smaller geographicfootprint
• Focused operations- mobile and broadbandservices
• Operational scale on owninfrastructure
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Beyond the Realignment Process• Organic growth and strategic
acquisitions– Infrastructure investments where it
generates superior returns• Develop core businesses to stay best
in class• Increased management focus on core
areas• Improved margins and cash flow,
focus on ROCE
Dec 2006Oct 2007
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Tele2 Q3 200724 October 2007
Lars NilssonCFO
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Financial Overview Q3 2007 - Continued Operations(All figures in MSEK) YTD 2007 YTD 2006Q3 2007
RevenuesEBITDAEBITDA %
DepreciationWrite-down of goodwillSale of operationsAssociated comp.
EBITEBIT %
Financial itemsTaxes
Net result
32,9675,147
15.6
-3,083-1,310
827-174
1,407 4.3
-623-918
-134
31,9464,263
13.3
-2,541-2,457
47-93
-781 -2.4
-402-70
-1,253
10,9091,844
16.9
1,222-1,3101,352
-55
609 5.6
-181-566
-138
11,0141,700
15.4
-879-2,457
-2-22
-1,660 -15.1
-147-38
-1,769
Q3 2006
* Including writedown of IT systems (MSEK -284)** Including impairment of deferred tax assets (MSEK -599)
****
* *
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Clean EBIT Q3 2007
*Germany (570), Austria (290), Belgium (275), Netherlands (175)
609
1310
284
851
-1352
0
500
1000
1500
2000
2500
Rep
orte
d EBIT
Impa
irmen
t of G
oodw
ill*
Impa
irmen
t IT-s
yste
ms
Net
Pro
fit sale
of o
p.
CLE
AN E
BIT
(MSEK)
Corresponding to a7.8% EBIT-margin
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Clean EBIT Y-t-d 2007
*Germany (570), Austria (290), Belgium (275), Netherlands (175)
1407
1310
284
2174
-827
0
500
1000
1500
2000
2500
3000
3500
Repor
ted
EBIT
Impa
irmen
t of G
oodw
ill*
Impa
irmen
t IT-s
yste
ms
Net
Pro
fit s
ale
of o
p.
CLEAN E
BIT
(MSEK)
Corresponding to a6,6% EBIT-margin
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Cash Flow(All figures in MSEK) YTD 2007 YTD 2006Q3 2007
CF from operationsChange in WC
Cash Flow from operating activities
CAPEXAcquisition/sale of sharesChange in long-term receivablesCash Flow after investing activities
CAPEX Continuing operations
Q3 2006
1,208615
1,823
-1,1885,478-356
5,757
- 943
1,51167
1,578
-1,420-1,181
17-1,006
- 964
3,149229
3,378
-3,8545,426-167
4,783
- 3, 049
3,931-680
3,251
-4,098-1,266
159-1,954
- 3,106
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Cash Flow Effects from Realignment Processuntil Q3 2007
(All figures in MSEK) 1 Jan-30 Sep2007
Tele2 PortugalTele2 Irkutsk, RussiaTele2 FranceTele2 DenmarkOther
Total Cash Flow effect until Q3 2007
1221,5702,937
75245
5,426
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Cash Flow Effects from Realignment Processafter Q3 2007
(All figures in MSEK) Announced
Tele2 Italy / SpainTele2 BelgiumTele2 HungaryTele2 Austria MVNOTelecom Eurasia
Total Cash Flow effect after Q3 2007
7,1008904065
-160
7,935
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Net Debt to EBITDANet Debt and Net Debt/EBITDA
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
0,0
0,5
1,0
1,5
2,0
2,5
3,0
MSEK 7,935from disposals
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Net Intake by Segment
-600
-400
-200
0
200
400
600
800
1 000
1 200
1 400
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
('000)
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Revenue by Segment
0
2 000
4 000
6 000
8 000
10 000
12 000
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
(MSEK)
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EBITDA by Segment
-1 000
-500
0
500
1 000
1 500
2 000
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
(MSEK)
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EBIT* by Segment
-1 000
-500
0
500
1 000
1 500
2 000
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
Mobile telephony Fixed telephony (resale & dial-up) Broadband (resale, direct & LLUB)
(MSEK)
* Excl. non-recurring items
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Russia
Revenue growth 62% year-on-year
EBITDA margin 33%
8 million customers
Sales
0
200
400
600
800
1000
1200
1400
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
(MSEK)EBITDA vs Net Intake
0
200
400
600
800
1000
1200
1400
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
0
100
200
300
400
500
600
700
800
900
1000
(MSEK) '000
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Sweden Mobile
Growth 9% year-on-year
Strong net intake affected EBITDA margin slightly in Q3
Sales
0
500
1000
1500
2000
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
(MSEK) EBITDA vs Net Intake
0
500
1000
1500
2000
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
0
20
40
60
80
100
120
(MSEK) '000
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Baltic
Growth 14% year-on-year
Continuing strong net intake
EBITDA margin 38%
Sales
0
200
400
600
800
1000
1200
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
(MSEK) EBITDA vs Net Intake
0
200
400
600
800
1000
1200
Q3 -06 Q4 -06 Q1 -07 Q2 -07 Q3 -07
0
20
40
60
80
100
120
(MSEK) '000
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Questions?
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• Q4 2007: 12 Februar 2008
Visit www.tele2.com
Investor Relations:Lars TorstenssonTelephone: + 46 (0) 702 73 48 79
Lena KraussTelephone:+46 (0)8 562 000 45