THIRD QUARTER October 17, 2019 Group highlights Q3 2019 Jan-Sep - PowerPoint PPT Presentation

THIRD QUARTER October 17, 2019

Group highlights Q3 2019 Jan-Sep 2019 Guidance SEK billion (YoY growth) End-user 5.1 (0%) 15.2 (0%) ~0% service revenue Underlying EBITDA 2.5 (5%) 7.0 (4%) Mid-single digit ex. IFRS 16 Capex ex. spectrum and 2.3-2.6 0.5 1.7 leases Changed 2 Organic is constant currencies and including Com Hem proforma

Tele2 is becoming a true integrated challenger — Increasing penetration of FMC bundle benefits, now reaching 141k FMC-customers Win Swedish household — Mobile pricing as a new growth driver – first step taken with frontbook adjustment through FMC — Executing more-for-more strategy with Tele2 rebranding, family offer and new data buckets — Work in progress as market price pressure continues Sweden B2B — LE: focus on private sector, take high-margin contracts and cut cost turnaround — SME: take market share, reduce churn, improve mobile offering and leverage FMC Build on the — Sustained momentum with 10% growth in end-user service revenue and 6% in underlying momentum in EBITDA excluding IFRS 16 the Baltics — Continued delivery on cost synergies with an impact of SEK 150m in Q3 (SEK 300m YTD) Cost — Annualized run-rate of SEK 650m at the end of Q3 2019 transformation — Year-end target raised to run-rate of SEK 750m 3

Growth and cost initiatives drive cash flow FY201 018 8 Start rting Point – pr profo forma ma* 1 Lo Low-sin ingle dig igit it end-us user serv rvice ce revenue gro growth – SE SEK 45 450m of of re revenue synergies End-user service revenue: SEK 20.3bn Expected to be flat in 2019, which is a transition year, and low-single digit growth in the mid-term driven by strategy initiatives 2 Mid id-sin ingle dig igit it growt wth in in un underly lying EB EBITD TDA exclud luding IFRS FRS 16 16 – SE SEK 900 00m of of cost Underlying EBITDA excluding IFRS 16: synergies SEK 8.8bn Driven by front-loaded synergies in 2019 and a mix of cost reduction and revenue growth mid-term 3 Ca Capex – Lo Low cap apital inte tensity ty comp ompared to to indu dustry ov over er inves estme ment cycl cle Capex: SEK 2.6bn excluding spectrum SEK 2.3-2.6bn in 2019 (2.6-2.9bn previously), and SEK 2.8-3.3bn/year in the mid-term, excluding and leases spectrum and leases, as we roll out 5G and Remote-PHY 4 Main intain in levera rage ge at 2.5-3.0x Leverage: 2.8x economic net debt / Growth in underlying EBITDAaL and cash from asset sales create room to re-lever and distribute underlying EBITDAaL additional cash to shareholders Share areholder R r Remunerat ration Ordinary dividend of SEK 4.40/share (SEK 3.0bn) paid Extraordinary dividend of SEK 6.00/share (SEK 4.1bn) paid 4 * Continuing operations including Com Hem

SWEDEN

Sweden Consumer – Operational highlights RGUs & net intake – core and legacy services ASPU year-on-year growth (thousands, proforma) (%, proforma) +35 +34 +20 +28 +24 5% 664 663 661 658 655 +1 3% +2 +3 +3 +1 863 852 839 827 814 1% -25 1.0% -81 -49 -12 -11 +13 +13 +12 +13 +11 351 325 313 298 286 -1% -0.9% 411 399 368 387 378 -3% 1,863 1,817 1,822 1,841 1,804 1 175 1 131 1 128 1 105 1 117 +10 +12 +5 +19 +23 -5% -5.6% Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 -7% Core: Mobile Postpaid Fixed Broadband Digital TV Cable & Fiber Mobile Postpaid Fixed Broadband Digital TV Cable & Fiber Mobile Prepaid DTT TV Fixed Tele & DSL Legacy : : Q3 highlights Strong volume growth with net intake of 35k core RGUs and slower decline of legacy RGUs (-11k) – Stable net intake in Fixed Broadband and DTV Cable & Fiber but smaller price increases compared to last year remain a drag on ASPU – Volume growth, increasing FMC penetration and a successful Tele2 rebranding campaign creates future pricing power – 6

Sweden Consumer – Financials End-User service revenue Underlying EBITDA ex. IFRS 16 and margin (SEK million, proforma, year-on-year growth %) (SEK million, proforma) +3% +4% +5% +2% +4% +3% 1,601 1,538 454 464 475 474 466 1,470 1,447 1,428 -4% -3% +0% +0% -1% 632 627 601 613 618 +5% +11% +10% +5% +8% -11% -12% -8% -6% -11% 41% 39% 39% 38% 117 116 98 96 106 35% 1,236 1,189 1,189 1,190 1,178 365 340 353 344 341 +3% +4% +2% +2% +4% 300 301 289 278 290 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Core: Mobile Postpaid Fixed Broadband Digital TV Cable & Fiber Mobile Prepaid DTT TV Fixed Tele & DSL Legacy : : Q3 highlights Total end-user service revenue back to slight growth (+0.4%) as trends in both core and legacy improved – Core end-user service revenue growth improved to 3% driven by strong postpaid volume growth – Lower drag from legacy end-user service revenue decline (-6%) due to growth in prepaid volume and ASPU and DTT ASPU – Underlying EBITDA excluding IFRS 16 grew by 4%, driven by synergies, partially offset by investment into growth initiatives – 7

Pricing as a new growth driver – A gradual process underpinned by increased customer value Tele2 pricing strategy Illustration of Tele2’s pricing cycle Award-winning network and products Q1 Q4 Q2 Premium positioned leading brands Q3 Year 1 Year 2 Q3 Proactively adding customer value through more-for-more principle Q2 Frontbook …extended Q4 Q1 pricing to backbook Year 1… repricing Year 2 Offering extra value via FMC benefits Improved customer satisfaction (NPS) Pricing principles: Yearly pricing updates in both Fixed and Mobile – Updated frontbook pricing is followed by gradual backbook repricing Increased Pricing Higher propensity – customer loyalty adjustments for cross sales Pricing is dependent upon the market environment and the – more-for-more principle, i.e. increasing customer satisfaction 8

Fixed products & pricing – Network and product enhancements together with more-for-more benefits create increased customer value Product and service improvements Broadband frontbook pricing changes during Q3 2019 Network improvements Tier Old price New price Change – Rollout of DOCSIS 3.1 - 67% completed in COAX network – Increased capacity and hence a better experience for our BB50 399 + 8% 369 customers Speed upgrades and new devices BB150 429 + 8% 399 – Upgrading select customer segments to higher broadband speeds with additional value-added services – Router with new standard Wi-Fi 6 to be launched in the fourth quarter Q1 Q4 Q2 Frontbook More-for-more to reinforce the premium offering Q3 2019 2020 pricing Q3 – 141K customers enjoying more-for-more FMC benefits Q2 Q4 Q1 Backbook repricing Speed upgrades and rolled out during assessment batches first half of 2020 9

Mobile products & pricing – Updated Tele2 Residentials mobile portfolio creates customer value and backbook pricing potential Product and service improvements Tele2 Mobile frontbook pricing changes Q3 2019 Premium offerings Change Old price New price – Awarded best mobile network in Sweden in the P3 mobile 3 GB, 199 SEK 2 GB, 199 SEK +/- 0% benchmark, September 2019 8 GB, 249 SEK 10 GB, 269 SEK + 8% – Best data / price value among the premium brands 15 GB, 299 SEK 20 GB, 339 SEK + 13% – Tele2 Unlimited now includes roaming in, and international calling to, 60 countries 30 GB, 349 SEK 40 GB, 399 SEK + 9% Unlimited, 499 Unlimited, 549 + 10% A new unique & advantageous multi-line scheme for families – Add members for only 199 SEK per line – a clear and simple benefit, easy to grasp Q1 Q4 – Add-ons get equal data size as the initial plan – simplicity Q2 Frontbook – Each member has their own individual data bucket – Q3 2019 2020 pricing and Q3 control of consumption new offerings Q2 – One invoice for all members – simplicity & cost control Q4 Q1 Backbook repricing Assessment and rolled out during test batches first half of 2020 10

Sweden Business – Operational highlights Mobile RGUs Mobile ASPU End-user service revenue (thousands, proforma) (SEK, proforma) (SEK million, proforma, year-on-year growth %) +4% -8% -1% -2% -2% -4% -4% 913 916 183 280 896 180 889 246 264 881 177 276 168 257 166 -3% +4% +1% +5% +4% 296 307 295 276 271 -12% -10% -9% -11% -12% 486 473 475 456 456 +4% +1% -4% -4% +3% Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 Mobile Fixed Solutions Q3 highlights Mobile end-user service revenue growth remains negative as volume growth did not compensate for lower market pricing – No sign of recovery in LE due to price pressure on government contracts – improve over time through focus on private sector, higher-margin contracts and – cost cuts Longer-term opportunity to take market share in SME through mobile portfolio improvements, better customer base management and FMC offers – Continued improvement in Solutions business with greater mix of higher-margin revenue – 11