Telenor Group Richard Aa, Group CFO BAML TMT Conference 4 June 2014
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. 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. This presentation contains statements regarding the future in connection with the Telenor Group’s growth initiatives, profit figures, outlook, strategies and objectives. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.
Telenor Group 172 million consolidated mobile subscribers Revenues in 2013: NOK 104 bn (USD 17 bn) Market cap: NOK 219 bn (USD 36 bn) Europe Norway Asia Sweden Thailand Denmark Malaysia Hungary Bangladesh Serbia Montenegro Pakistan VimpelCom Ltd. Bulgaria India Telenor Group holds 33.0% economic and 43.0% voting stake in VimpelCom Ltd. Myanmar 3
Increasing cash flow and payout to shareholders Operating cash flow (NOK bn) Dividend per share (NOK) 21.3 20.5 7.0 19.1 17.6 6.0 5.0 3.8 2010 2011 2012 2013 2010 2011 2012 2013 • • Revenue growth and improved efficiency Average YoY DPS growth of 23% in 2010-2013 • Significant network investments Operating cash flow defined as EBITDA before other items, less capex excl spectrum fees
A solid start to 2014 • 6 million new mobile subscribers • 5% underlying mobile service revenue growth • 5% organic growth in EBITDA • Revenue growth and implemented cost initiatives in Norway • Regulatory cost savings in Thailand • Strong growth momentum in India Revenues (NOK bn) EBITDA (NOK bn) 26.5 24.7 9.3 8.4 Q1 13 Q1 14 Q1 13 Q1 14 5
Robust underlying mobile service revenue growth driving growth in gross profit Organic mobile subs. & traffic revenue growth Gross profit (NOK bn) 16% 77.0 14% 12% 75.6 10% 8% 72.5 6% 71.0 4% 2% 0% Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q1 14 -2% -4% 2011 2012 2013 LTM Norway Europe Asia Group Organic revenue growth in fixed currency, adj. for acquisitions and disposals. 6 Organic growth in Sweden adjusted for handset-related discount
Good progress on NOK 5 bn gross cost saving target Gross cost saving programme in Norway Regulatory cost savings in Thailand Annual targets in NOKm Regulatory cost as % of service revenues (excl IC) Implemented / decided initiatives 800 31% 26% 650 550 ~15% 2013 2014 2015 Q1 2013 Q1 2014 Target 2016 7
Capex expected to come down after significant network investments in 2013-2014 • 2.1 GHz network rollout in Thailand 12m rolling capex/sales • 4G and FTTH investments in Norway 20% 18% Norway • dtac Networks swaps completed in most markets 16% – Bulgaria during 2014-2015 14% Sweden 12% • Satellite launch in 2H 2014 DiGi 10% Denmark • 8% Underlying mobile capex/sales around 10% Hungary 6% 4% 2% 0% Q4 10 Q1 14 Capex and capex/sales ratio excl licence fees. 8
Strong growth momentum in India • Strong subscriber and revenue growth in Q1 Operating cash flow (NOK bn) • 2.5 million new subscribers 2009 2010 2011 2012 2013 • 13% organic ARPU growth • -0.8 44% organic revenue growth • Acquisition of supplementary spectrum in -2.1 February, incl new circle Assam • Promising move into data services -4.4 -4.6 • Offset of 2008 entry fee confirmed by Indian -5.9 authorities • Redeployment of 5,000 sites during 2014 Operating cash flow defined as EBITDA before other items, less capex excl spectrum fees 9
Targeting service launch in Myanmar in 2H 2014 • Licence awarded in February 2014 • Strategy based on mass market approach and low cost operations • Reuse of concepts from other Asian markets • First call made on 7 April Financial targets • EBITDA breakeven 3 years after licence award • Peak funding of around USD 1 billion incl licence fee of USD 500 million Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA and EBITDA margin before other items. Capex excl licence fees
The Internet for All opportunity • 1.2 billion people within footprint • 172 million subscribers • 36 million active data users Telenor mobile subscribers (million) Million 154 Not data users Data users Analyst & investor seminar 18 The Grange St Paul, London 6 June Europe Asia
Summing up • 5% underlying mobile service revenue growth • Good progress on cost saving programmes • Significant investment in infrastructure 2013-2014 • NOK 28-30 bn operating cash flow target Revenues (NOK bn) EBITDA (NOK bn) for 2015 achievable 26.5 24.7 9.3 8.4 Q1 13 Q1 14 Q1 13 Q1 14 EBITDA before other items 12
Telenor Group Richard Aa, Group CFO BAML TMT Conference 4 June 2014
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