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Capital Markets Day 2011
Market Area Central Europe and EurasiaNiklas Sonkin
Sep 20112 Capital Markets Day 2011
July 2011
Current Focus1. Stability and improvements in Baltics2. Growth in revenue, profits and market share in Croatia3. Establish Tele2 in all regions and continue to grow rapidly in Kazakhstan4. Explore geographical expansion opportunities in Central Europe and
Eurasia
Market Area OverviewPopulation appr. 28 million
Tele2 Customer Base
appr. 5 million or 18 % of population
Represents 11% of total net sales Q2 2011:
Latvia: 3% Croatia: 3%
Lithuania: 3% Kazakhstan: 0%
Estonia: 2%
Sep 20113 Capital Markets Day 2011
Baltics
Sep 20114 Capital Markets Day 2011
2006 2007 2008 2009 2010 2011 2012-20%
-15%
-10%
-5%
0%
5%
10%
15%
Estonia Latvia Lithuania
GDP
2006 2007 2008 2009 2010 2011 2012-30%
-20%
-10%
0%
10%
20%
30%
Estonia Latvia Lithuania
Retail Sales
2006 2007 2008 2009 2010 2011 2012-4%
0%
4%
8%
12%
16%
Estonia Latvia Lithuania
CPI Inflation
2006 2007 2008 2009 2010 2011 20120%
4%
8%
12%
16%
20%
Estonia Latvia Lithuania
Unemployment
Sou
rces
: Cen
tra
l Ba
nk o
f Est
oni
a,S
EB
Sw
ede
n, C
ent
ral
Bur
eau
of S
tatic
tics
Lat
via,
SE
B L
ithua
nia
Macroeconomic KPIs
Sep 20115 Capital Markets Day 2011
Estonia – Market FactsRevenue Market Share EBITDA Market Share
Customer Market Share
2008 2009 2010 1H 110%
10%
20%
30%
40%
50%
60%
70%
20%
22% 22% 23%
59% 57% 59% 58%
22%
21% 19% 20%
Tele2 EMT Elisa
2008 2009 2010 1H 110%
10%
20%
30%
40%
50%
60%
27% 28% 28% 28%
49% 49% 48% 47%
23% 23% 24% 25%
Tele2 EMT Elisa
2008 2009 2010 1H 1110%
20%
30%
40%
50%
34% 33% 34% 35%
45% 45% 44%40%
21% 22% 22%26%
Tele2 EMT Elisa
Key topics CEO and management change in 2011 4G roll-out starts 2012 Technical upgrade (radio, core swap) Increase of efficiency going forward Focus on Smartphones and Data MTR reductions in 2012
Sep 20116 Capital Markets Day 2011
2008 2009 2010 1H 20110%
10%
20%
30%
40%
50%
60%
38% 39% 37% 36%
57%53% 52% 53%
5%8% 10% 12%
Tele2 LMT Bite
2008 2009 2010 1H 2011-10%
0%10%20%30%40%50%60%70%80%
40% 39% 37% 39%
70% 69% 66%61%
-9% -7%-3% 0%
Tele2 LMT Bite
2008 2009 2010 1H 20110%
10%
20%
30%
40%
50%
60%48% 46% 43% 43%
46% 46% 43% 42%
5% 8%14% 15%
Tele2 LMT Bite
Latvia – Market FactsRevenue Market Share EBITDA Market Share
Customer Market Share
Key topics Auction for LTE frequencies (2012) Technical upgrade (radio, core
swap) Maintain high efficiency Focus on Smartphones and Data MTR reductions in 2012
Sep 20117 Capital Markets Day 2011
2008 2009 2010 1H 201120%
25%
30%
35%
40%
45%
26%
30% 31%
32%
43%
39% 38% 37%
31% 31% 32%
31%
Tele2 Omnitel Bite
2008 2009 2010 1H 201110%
20%
30%
40%
50%
60%
26%
33% 32% 35%
50%
42%39%
33%
25% 25%29% 33%
Tele2 Omnitel Bite
2008 2009 2010 1H 201110%15%20%25%30%35%40%45%50%55%
45% 45%48% 49%
31% 30% 28% 28%
21%24% 23% 21%
Tele2 Omnitel Bite
Lithuania – Market FactsRevenue Market Share EBITDA Market Share
Customer Market Share
Key topics Maintain market leadership position Increase focus on B2B segment Technical upgrade (radio, core swap) Maintain high efficiency Focus on Smartphones and Data MTR reductions in 2012
Sep 20118 Capital Markets Day 2011
Croatia
Sep 20119 Capital Markets Day 2011
2006 2007 2008 2009 2010 2011 2012-8%
-6%
-4%
-2%
0%
2%
4%
6% 5% 5%
2%
-6%
-1%
1%2%
2006 2007 2008 2009 2010 2011 20120%
1%
2%
3%
4%
5%
6%
7%
3%3%
6%
2%
1%
3%
4%
2006 2007 2008 2009 2010 2011 20126%
7%
8%
9%
10%
11%
12%
13%
11%
10%
8%
9%
12% 12%
11%
Eur
ost
at,C
roat
ian
bure
au
of s
tatic
tics
GDP Retail Sales
CPI Inflation Unemployment
Macroeconomic KPIs
2006 2007 2008 2009 2010 2011-20%
-15%
-10%
-5%
0%
5%
10%
5%
8%
5%
-14%
-1%
4%
Sep 201110 Capital Markets Day 2011
2008 2009 2010 1H 2011-10%
10%
30%
50%
70%
-9% -6%-1% 1%
62% 63% 60% 63%
46% 43% 41%36%
Tele2 T-Mobile VIPnet
2008 2009 2010 1H 20110%
10%
20%
30%
40%
50%
60%
7%11% 13% 14%
50% 48% 46% 46%
43% 42% 41% 40%
Tele2 T-Mobile VIPnet
0%
10%
20%
30%
40%
50%
60%
9% 9% 10% 10% 11% 13%17% 18%
51% 53% 53% 53% 51% 52%48% 48%
40% 38% 36% 35% 38% 35%35% 34%
Tele2 T-Mobile VIPnet
Revenue Market Share EBITDA Market Share
Customer Market Share
Croatia – Market Facts
Sep 201111 Capital Markets Day 2011
EBITDAHRK Million
Free Cash FlowHRK Million
Estimate Estimate
Croatia – Market Facts and New Guidence
• Tele2 Croatia is cash flow positive (EBITDA-CAPEX-Change in WC) on quarterly basis from now on
• The EBITDA margin for Tele2 Croatia’s operation should reach 20 percent by Q3 2013.
• Tele2 Croatia is cash flow positive (EBITDA-CAPEX-Change in WC) on quarterly basis from now on
• The EBITDA margin for Tele2 Croatia’s operation should reach 20 percent by Q3 2013.
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
-80
-60
-40
-20
0
20
40
60
-61
-39-31
-37-30
210
3 19
36
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
-160
-120
-80
-40
0
40
80
-131
-85
-46
-20
-109
27
0
-41
-142
-17
37
Sep 201112 Capital Markets Day 2011
Way Forward
Q1 2010: Transformation program commenced
Q2 2010: EBITDA break ahead of plan
Q2 2011: New marketing strategy launched
Q3 2011: Free cash flow milestone achieved
Continue revenue market share growth
Continue to improve gross margins
Continue to protect the cost leadership and price leadership positions
Key achievements
Operational Highlights and Way Forward
Operational Highlights
Sep 201113 Capital Markets Day 2011
Key Achievements
The New Brand Platform – I ovce i novce
A New Product Plan – Higher Value Smart Phone Users
New Store Concept
Sep 201114 Capital Markets Day 2011
Summary KPI Performance
Sou
rce
- H
end
al R
ese
arch
Cro
atia
Various KPIs have contributed to our revenue market share and EBITDA growth performance
Various KPIs have contributed to our revenue market share and EBITDA growth performance
2010 July 2011
Price Leadership Position 19% 25% pQuality Perception 19% 30% pAd Awareness 15% 45% pBrand Awareness (Top of Mind) 10% 16% pBrand consideration 13% 25% p
Q4 2009 Q2 2011
Gross Margin 39% 56% pQ2 2010 Q2 2011
Total Market EBITDA 830 MSEK 700 MSEK q
Sep 201115 Capital Markets Day 2011
Kazakhstan
Sep 201116 Capital Markets Day 2011
Kazakhstan
Sep 201117 Capital Markets Day 2011
2006 2007 2008 2009 2010 2011 20120%
2%
4%
6%
8%
10%
12% 11%
9%
3%
1%
7% 7% 7%
GDP
CPI Inflation Unemployment
Retail Sales
2006 2007 2008 2009 2010 2011 20120%
5%
10%
15%
20%
25%
30%
23%21%
17%
4%
25%
22% 21%
2006 2007 2008 2009 2010 2011 20120%
2%
4%
6%
8%
10%
12%
14%
16%
18%
9%
11%
17%
7% 7%8%
6%
2006 2007 2008 2009 2010 2011 20120%
1%
2%
3%
4%
5%
6%
7%
8%
9%8%
7%7% 7%
6%5% 5%
Sou
rce:
IH
S G
lob
al I
nsig
ht,
Sta
tistic
Age
ncy
of K
aza
khst
an
Macroeconomic KPIs
Sep 201118 Capital Markets Day 2011
Kazakhstan Mobile Market Overview
Strong growth of the mobile market
High transmission prices
UMTS2100 licenses were issued to the existing GSM operators at a price of 25 MEUR each on January 2011
The fixed line market is dominated by Kazakh Telecom with 3.3 million lines
Relatively low MoU (around 100 min.), compared to neighboring countries, suggests there is room for market competition in Kazakhstan
Sep 201119 Capital Markets Day 2011
Frequency band Channel Technology
900 11 MHz GSM/UMTS
1800 5 MHz GSM
2100 20 MHz UMTS
Tele2 Kz
Tele2 Sweden
51% 49%
Tele2 Kazakhstan Company Overview
Asianet Holding
Sep 201121 Capital Markets Day 2011
Almaty
Karagandy
Astana
Aktobe
Oral
Aktau
Kyzyl-Orda
Kostanay
Petropavl
Pavlodar
Shymkent
Taraz
Semey
Oskemen
All Regions Launched by Year-End
Sep 201122 Capital Markets Day 2011
Memorandum between the operators to make 20% MTR reduction as of Jan 1, 2011
• TELE2 KZ reduced MTR with Kcell by 20%, from Nov 15, 2010• TELE2 KZ reduced MTR with Beeline by 15%, from Jan 1, 2011
MTRs will be reduced consequently on a yearly basis
Russia Kazakhstan0
0.02
0.04
0.06
0.08
0.1
0.12
MTR
Average MTR in Russia and KazakhstanUSD
Sep 201123 Capital Markets Day 2011
2010
/12/
01
2011
/01/
01
2011
/02/
01
2011
/03/
01
2011
/04/
01
2011
/05/
01
2011
/06/
01
2011
/07/
01
2011
/08/
01
2011
/09/
010
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 20110
1
2
3
4
5
6
7
0
10
20
30
40
50
60
70
80
90
ARPU USD MOU
ARPUMoUMin
Number of subscribers
Customer Base MOU and ARPUUSD
Sep 201124 Capital Markets Day 2011
Tele2 expects its customer base in Kazakhstan to be able to reach the range of 2.3-2.5 million by year-end 2012.
The EBITDA margin for Tele2 Kazakhstan’s operation should reach break-even by 2H 2013.
Tele2 Kazakhstan is targeting a long-term mobile customer market share of 30 percent.
Long term profitability and ROCE are estimated to be in line with Tele2 Group targets.
Long Term Guidance
Sep 201125 Capital Markets Day 2011
Sep 201126 Capital Markets Day 2011
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