TELENOR GROUP FIRST QUARTER Sigve Brekke, CEO DISCLAIMER The - PowerPoint PPT Presentation

TELENOR GROUP – FIRST QUARTER Sigve Brekke, CEO

DISCLAIMER The following presentation is being made only to, and is only This presentation contains statements regarding the future in connection with the Telenor Group’s growth initiatives, profit directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a figures, outlook, strategies and objectives. In particular, the slide “Outlook for 2016” contains forward -looking statements regarding relevant person should not act or rely on this presentation or any the Telenor Group’s expectations. All statements regarding the of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold future are subject to inherent risks and uncertainties, and many in the past or the yield on such investments cannot be relied upon factors can lead to actual profits and developments deviating as a guide to the future performance of such investments. substantially from what has been expressed or implied in such statements. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Telenor Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. 2

HIGHLIGHTS Q1 2016 A SOLID START TO THE YEAR • 5.4 million new mobile subscribers • 6% organic growth in mobile subscription and traffic revenues • 5% organic EBITDA growth • Operating cash flow of NOK 6.1 billion 3

Q1 2016 REVENUE GROWTH IN NORWAY IMPACTED BY LOWER HANDSET SALES AND DECLINING FIXED LEGACY REVENUES MOBILE FIXED • 1% organic growth in mobile subscription and traffic • 6% revenue decline, primarily driven by telephony, ADSL revenues and wholesale • Lower handset sales volumes • 12k new high-speed internet subscribers, compensating for ADSL decline • New tariffs launched - includes EU roaming Mobile ARPU (NOK) Revenues (NOK m) Mobile Fixed Domestic Roaming Interconnect 34 26 22 22 24 24 2 999 2 875 2 937 2 813 2 836 2 749 -4% 281 274 276 278 264 265 3 730 3 787 3 752 3 857 3 685 3 581 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and Organic revenue growth 4 disposals. EBITDA margin before other items.

Q1 2016 SOLID PROFITABILITY IN NORWAY, PROGRESS ON LONG TERM EFFICIENCY INITIATIVES 44% EBITDA MARGIN LONG TERM EFFICIENCY INITIATIVES • Mobile gross profit stable despite lower roaming and • Reduce complexity of products, processes and IT systems wholesale contribution • Scope extended to include cable operation • Opex impacted by lower commissions and operation & • Net positive effect from 2017 maintenance costs EBITDA development YoY (NOK m) Long term efficiency programme (NOK m) ~900 Opex savings Thousands Project cost 2 772 2 792 168 -188 (200) (350) (380) Q1 15 Gross profit Opex Q1 16 2014 2015 2016 2017 2018 2019 2020 5 EBITDA margin before other items.

Q1 2016 CONTINUED GROWTH IN CONSUMER MOBILE IN SWEDEN MOBILE FIXED • 2% organic growth in mobile subscription and traffic • 11k new high-speed internet subscribers revenues driven by consumer • Aiming to cover 500k new single dwelling households by • 3k net subscriber growth 2020 • Total mobile revenues impacted by handset sales Mobile organic subscription & traffic revenue growth Revenues (NOK m) and EBITDA margin (%) 2.5 % 2.1 % 3 409 3 188 3 114 3 121 2 984 2 996 1.7 % 1.6 % -5% 0.2 % 32% 29% 28% 28% 29% 25% -0.1 % Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and Organic revenue growth 6 disposals. EBITDA margin before other items.

Q1 2016 CONTINUATION OF TRENDS IN OTHER EUROPEAN MARKETS DENMARK Revenues (NOK m) and EBITDA margin (%) • Continued intense competition Denmark Hungary • Launch of new business support system 1 256 1 256 1 117 1 098 HUNGARY • Solid trends in postpaid consumer segment, offset by -8% -6% pressure in prepaid and SME 17% 32% 32% 13% MONTENEGRO AND SERBIA Q1 15 Q1 16 Q1 15 Q1 16 • 6% organic ARPU growth from increased IC revenues and higher postpaid share MNE & Serbia Bulgaria BULGARIA 952 853 758 685 • Cost control supporting EBITDA margin 3% 1% 38% 37% 33% 31% Q1 15 Q1 16 Q1 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and Organic revenue growth 7 disposals. EBITDA margin before other items.

Q1 2016 SUBSCRIBER GROWTH AMIDST INTENSE COMPETITION IN THAILAND • 225k net subscriber growth • 2% organic decline in subscription and traffic revenues • EBITDA margin improvement from lower device subsidies • 3G population coverage at 94%, 4G now in all 77 Revenues (NOK m) and EBITDA margin (%) provinces 5 533 5 443 5 265 5 260 5 112 4 600 • Solid spectrum portfolio until concession expiry in -5% September 2018 36% 34% 32% 31% 29% 27% Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and Organic revenue growth 8 disposals. EBITDA margin before other items.

Q1 2016 SOLID POSTPAID PERFORMANCE IN MALAYSIA Postpaid subscribers (‘000) • 221k net subscriber growth and maintained market share 1 902 1 840 1 771 1 776 1 758 1 721 in highly competitive market • 2% organic decline in subscription and traffic revenues • 7% organic growth in postpaid service revenues and Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 stable postpaid ARPU* Revenues (NOK m) and EBITDA margin (%) • 3G/4G population coverage at 88%/73% 3 837 3 667 3 649 3 430 3 390 3 405 • EBITDA continues to be impacted by margin pressure on -8% international traffic 45% 45% 44% 44% 42% 40% Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and disposals. Organic revenue growth 9 EBITDA margin before other items. *) Service revenues according to local definition.

Q1 2016 STRONG PERFORMANCE IN BANGLADESH AND PAKISTAN BANGLADESH (GRAMEENPHONE) PAKISTAN • 12% organic subscription and traffic revenue growth • 2.2 million net subscriber growth • 55% EBITDA margin • 2% organic subscription and traffic revenue growth • SIM re-registration >50% completed • 40% EBITDA margin Revenues (NOK m) and EBITDA margin (%) Revenues (NOK m) and EBITDA margin (%) 3 045 2 924 2 144 2 811 2 049 1 988 2 630 1 900 2 516 1 829 2 306 9% 1 581 9% 55% 54% 55% 54% 51% 50% 46% 43% 42% 40% 32% 31% Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and Organic revenue growth 10 disposals. EBITDA margin before other items.

Q1 2016 FIRST QUARTER WITH POSITIVE OPERATING CASH FLOW IN MYANMAR CONTINUED SUBSCRIBER GROWTH Revenues (NOK m) and EBITDA margin • 1.8 million net subscriber growth 1 722 1 496 1 433 • 52% active data users 1 142 • SIM market share estimated at 38% 768 48% 42% 43% 42% 287 20% STRONG FINANCIAL PERFORMANCE • 42% EBITDA margin Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 • 10% operating cash flow margin Subscribers (m) NETWORK ROLLOUT ACCORDING TO PLAN 15.5 • 5,000 network sites on air 13.7 11.8 • 62% population coverage 9.5 6.4 • Aiming for around 9,000 sites 3.4 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and 11 disposals. EBITDA margin before other items.

Q1 2016 CONTINUED SUBSCRIBER AND REVENUE GROWTH IN INDIA Revenues (NOK m) • 1.5 million subscriber growth (+15% YoY) 1 520 1 436 1 411 • Total subscriber base of 44 million 1 383 1 362 1 187 7% • ARPU remains under pressure, with 8% decline YoY Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 • 9% organic growth in subscription and traffic revenues EBITDA (NOK m) 41 35 24 -54 -58 -97 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and Organic revenue growth 12 disposals. EBITDA margin before other items.

CAPITAL MARKETS DAY Date: 22 September 2016 Venue: London SAVE THE DATE 13

TELENOR GROUP – FIRST QUARTER Morten Karlsen Sørby, Acting CFO

Q1 2016 FINANCIAL HIGHLIGHTS • 6% organic growth in mobile subscription & traffic YTD revenues Organic revenue growth 1.5% • 35% EBITDA margin and 5% organic growth in EBITDA EBITDA margin 35.4% • Operating cash flow of NOK 6.1 billion Capex / sales 16.8% • Outlook for 2016 maintained Revenues (NOK bn) EBITDA (NOK bn) 33.0 31.4 11.7 10.8 Q1 15 Q1 16 Q1 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and 15 disposals. EBITDA before other items. Capex excl. spectrum and licence fees.