SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a -16 or 15d -16 of
the Securities Exchange Act of 1934
 
Report on Form 6-K dated April 29, 2019
(Commission File No. 000-30918)
 
TELE2 AB (PUBL)
Skeppsbron 18
P.O. Box 2094
SE-103 13
Stockholm, Sweden
(Name and address of registrant’s principal executive office)
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
 
Form 20-F : ☒  Form 40-F: ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Yes: ☐   No : ☒
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 
Yes: ☐   No : ☒
 
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes: ☐   No : ☒

Enclosures:

●
Press Release: Interim Report First Quarter 2019, dated April 24, 2019

●
Interim Report First Quarter 2019, dated April 24, 2019

●
First Quarter 2019 Results Presentation, dated April 24, 2019

●
2019 Q1 Financials to the Market
 
 
 
 
Tele2 AB
Skeppsbron 18
P.O Box 2094
SE-103 13 Stockholm, Sweden
Telephone +46 8 5620 0060
Fax: +46 8 5620 0040
www.tele2.com

2019-04-24
 



 

Interim Report First Quarter 2019

Stockholm – Tele2 AB (“Tele2”) (Nasdaq Stockholm: TEL2 A and TEL2 B) today announces its consolidated results for the first quarter 2019.

CEO comment by Anders Nilsson
“In the first quarter of 2019 we started laying the foundation for future growth. We launched Com Hem mobile as a new growth driver and continued to see early progress on our FMC strategy with 45,000 customers now on FMC-offers. We are on track to reach our full year guidance with flat end-user service revenue and strong growth in underlying EBITDA excluding IFRS 16. This is largely driven by the integration and cost restructuring process which is well under way.”

Highlights

●
Revenue of SEK 7.2 billion (5.4), representing organic decline of -1 percent

●
End-user service revenue of SEK 5.3 billion, stable on an organic basis

●
Organic growth of 8 percent in underlying EBITDA excluding IFRS 16 for the Group

●
Organic growth of 5 percent in underlying EBITDA excluding IFRS 16 in Sweden, mainly driven by initial synergies from the Com Hem merger

●
Profit after financial items (EBT) was SEK 1.0 billion (0.8)

●
Earnings per share after dilution was SEK 1.11 (1.24)

●
Cost synergies reached an annualized run rate of SEK 300 million at the end of Q1

●
Com Hem mobile was launched during the quarter

●
Financial guidance unchanged

Teleconference and webcast
Tele2 will host a teleconference with presentation at 10:00 CEST (09:00 BST, 04:00 EDT) on Wednesday, April 24, 2019. The presentation will be held in English and will also be available as a webcast at Tele2’s website: www.tele2.com

Dial-in information:
To make sure you are connected in time for the teleconference, please dial in a few minutes in advance and register your attendance. Use Confirmation Code 8792765 .

Dial-in numbers:
SE: +46 (0) 8 50 69 21 80
UK: +44 (0) 2071 928000
US: +1 631 510 74 95


For more information, please contact:
Joel Ibson, Head of Corporate Communications, Phone: +46 766 26 44 00
Erik Strandin Pers, Head of Investor Relations, Phone: +46 733 41 41 88





Tele2 AB
Skeppsbron 18
P.O Box 2094
SE-103 13 Stockholm, Sweden
Telephone +46 8 5620 0060
Fax: +46 8 5620 0040
www.tele2.com


2019-04-24

This information is information that Tele2 AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 07:00 CEST on April 24, 2019.

TELE2’S MISSION IS TO FEARLESSLY LIBERATE PEOPLE TO LIVE A MORE CONNECTED LIFE. We constantly strive to be the   truly integrated challenger – providing speed, data and video content, no matter where or when. Ever since Tele2 was founded in 1993, we have continued to challenge prevailing norms and dusty monopolies. Today, our award winning networks enable mobile and fixed connectivity, telephony, data network services, TV, streaming and global IoT solutions for millions of customers. We drive growth through customer satisfaction and smart combined offerings. Tele2 has been listed on Nasdaq Stockholm since 1996. In 2018, Tele2 generated revenue of SEK 30 billion and reported an adjusted EBITDA of SEK 9 billion. For latest news and definitions of measures, please see our homepage www.tele2.com





 
 
 

 

Q1 2019 Highlights
 
●    Revenue of SEK 7.2 billion, representing organic decline of –1 percent
●    End-user service revenue of SEK 5.3 billion, stable on an organic basis
●    Organic growth of 8 percent in underlying EBITDA excluding IFRS 16 for the Group
●    Organic growth of 5 percent in underlying EBITDA excluding IFRS 16 in Sweden, mainly driven by initial synergies from the Com Hem merger
●    Com Hem mobile launched
●    Financial guidance unchanged, see page 5

Key Financial Data
SEK million
Q1
Full year
2019
IFRS 16
2018
IAS 17
2018
IAS 17
Revenue
7,217
5,425
23,704
End-user service revenue
5,314
3,561
15,593
Underlying EBITDA
2,659
1,460
6,633
EBITDA
2,397
1,395
6,038
Operating profit
1,104
900
3,750
Profit after financial items
1,000
818
3,372
Net profit/loss
769
622
1,610
Earnings per share, after dilution (SEK)
1.11
1.24
3.01

Key financial data including Com Hem pro forma
 
Q1
Full year
SEK million
2019
2018
Organic
%
2018
Revenue
7,217
7,209
-1%
29,761
End-user service revenue
5,314
5,279
0%
21,434
Mobile end-user service revenue
2,994
2,890
3%
11,934
Fixed end-user service revenue
1,880
1,944
-3%
7,727
Underlying EBITDA excluding IFRS 16
2,340
2,141
8%
9,015
Capex excluding spectrum and leases
643
610
 
2,759
OCF excluding spectrum, rolling 12 months 1)
6,491
6,154
 
6,475
Economic net debt to underlying EBITDAaL
2.6
1.5
 
2.8

1) Operating Cash Flow, see Non-IFRS measures page 27



Continuing operations
Figures presented in this report refer to Q1 2019 and continuing operations unless otherwise stated. Figures shown in parentheses refer to the comparable periods in 2018. Tele2 Kazakhstan is reported as discontinued operation for all periods. Discontinued operations also include the former operations in the Netherlands and Russia. See Note 11.

Non-IFRS measures
This report contains certain non-IFRS measures which are defined and reconciliated to the closest reconcilable line items in the section Non-IFRS measures on page 27. Note that organic growth rates, as further defined in the Non-IFRS section, includes Com Hem pro forma for all periods. For further definitions of industry terms and acronyms, please refer to the Investor section at www.tele2.com .


Tele2 - Interim Report January-March 2019 1 (35)
CEO Word, Q1 2019

In the first quarter of 2019 we started laying the foundation for future growth. We launched Com Hem mobile as a new growth driver and continued to see early progress on our FMC strategy with 45,000 customers now on FMC-offers. We are on track to reach our full year guidance with flat end-user service revenue and strong growth in underlying EBITDA excluding IFRS 16.
This is largely driven by the integration and cost restructuring process which is well under way.

“We aim to combine the disciplined and predictable pricing of the fixed market with the agile, customer-friendly mobile market to capitalize on the demand for household connectivity”

Q1 2019 summary
Group organic end-user service revenue (EUSR) was flat in the quarter with the Baltics growing 7 percent while Sweden declined by 1 percent. Group underlying EBITDA excluding IFRS 16 grew by 8 percent with the Baltics growing by 16 percent and Sweden by 5 percent driven by cost reduction.
In the Sweden Consumer segment, total EUSR declined by 1 percent as growth in core services was offset by decline in legacy services and Landlord & other. Core services, representing over 70 percent of the segment’s EUSR, grew by 3 percent, with Mobile Postpaid growing 2 percent, Fixed Broadband growing 8 percent while Digital TV via Cable & Fiber declined by 1 percent. Legacy services, including Mobile Prepaid, DTT and Fixed telephony & DSL, declined by 11 percent. We believe that initiatives taken since the merger including launch of Com Hem mobile and migration of customers into FMC benefit plans will enhance growth in core services over time and offset decline in legacy services. In the Sweden Business segment, we saw continued mobile EUSR growth of 1 percent driven by higher customer intake, offset by a drag from legacy products resulting in a 2 percent decline in total EUSR.

Several growth drivers to bring stable growth
Since the merger with Com Hem we have introduced several new growth drivers such as cross selling mobile into the fixed consumer base through Com Hem mobile, selling fixed into the mobile consumer base, reducing churn through FMC benefits and refocusing the B2B business on profitable growth. These initiatives will take some time before they gain enough momentum to get to the low single digit EUSR we guide for the mid-term. Further, our strategy is to reach our growth targets by running several growth drivers in parallel, without pushing each of them too hard, and avoiding actions that may increase cost or be too disruptive. In addition we are also evaluating new initiatives which could help further secure future growth.

Delivering on cost synergies
While we are setting Tele2 up for future revenue growth we have also started executing on cost reduction, making progress toward the cost synergy target. In the quarter we realized SEK 50 million of cost synergies, and reached an annualized run-rate of SEK 300 million at the end of the quarter out of the target SEK 900 million after three years. The cost reductions were mainly related to head count reduction in common functions and the Sweden Consumer segment. We incurred SEK 155 million of integration costs this quarter and have so far incurred SEK 365 million of the expected SEK 1 billion of restructuring costs.

Looking forward
Having completed the first full quarter after the merger with Com Hem we see that the cost transformation is on track. Focus going forward will be to reignite growth through our pipeline of initiatives. As we transform Tele2 into a truly integrated operator, we will increasingly look at the market as a whole rather than split into mobile and fixed silos, both internally and commercially. This will not only reduce cost but also create growth as we aim to combine the disciplined and predictable pricing of the fixed market with the agile, customer-friendly mobile market to capitalize on the demand for household connectivity through a more-for-more FMC strategy. We think that this strategy will be beneficial for all stakeholders in the market as we move from being a cost-cutting play, operating in two stagnant markets, mobile and fixed, to become an efficient challenger in a growing three-player FMC-market with focus on customer satisfaction.

Anders Nilsson
President and Group CEO

Tele2 - Interim Report January-March 2019 2 (35)
Financial overview


Analysis of profit/loss KPIs
SEKmillion
2019
Q1
IFRS 16
2018
Q1
IAS 17
2018
Full year
IAS 17
Revenue
7,217
5,425
23,704
End-user service revenue
5,314
3,561
15,593
Underlying EBITDA
2,659
1,460
6,633
Items affecting comparability
–262
–65
–595
EBITDA
2,397
1,395
6,038
Depreciation/amortization
–1,303
–509
–2,446
of which amortization of surplus from acquisitions
–299
–37
–314
of which depreciation of right-of-use assets
–303
–
–
Impairment
–
–
149
Result from shares in joint ventures and associated companies
10
14
9
Operating profit
1,104
900
3,750
Net interest and other financial items
–104
–82
–378
of which lease interest (IFRS 16)
–21
–
–
Income tax
–231
–196
–1,762
Net profit
769
622
1,610
       
Reconciliation of leasing effects
     
Underlying EBITDA
2,659
1,460
6,633
Reverse IFRS 16 effect
–319
–
–
Underlying EBITDA excluding IFRS 16
2,340
1,460
6,633
       
Underlying EBITDA
2,659
1,460
6,633
Rights of use asset depreciation and lease interest
–324
–
–
Underlying EBITDAaL
2,335
1,460
6,633

Revenue increased by 33 percent related to the merger with Com Hem. Organic revenue growth amounted to –1 percent, as end-user service revenue was flat and equipment revenue declined, mainly in Sweden. Mobile end-user service revenue contributed positively with growth of 3 percent, while fixed end-user service revenue declined organically by 3 percent.

Underlying EBITDA grew by 82 percent mainly as a result of the merger with Com Hem and the implementation of IFRS 16 which removes the cost of operating leases from underlying EBITDA, starting January 1, 2019. To facilitate comparability during 2019, Tele2 will report underlying EBITDA excluding IFRS 16. Organic growth in underlying EBITDA excluding IFRS 16 was 8 percent.

Underlying EBITDA, an improved indicator of underlying business performance, has replaced adjusted EBITDA which was previously reported, see section Non-IFRS measures on page 27, with historical performance data available at Tele2.com.

Following the implementation of IFRS 16, Tele2 will also use underlying EBITDAaL (EBITDA after Leases) as a complementary measure of profitability going forward since it reflects the cost of operating leases. It will also be used as denominator when measuring financial leverage.

Items affecting comparability amounted to SEK –262 (–65) million mainly as a result of the merger with Com Hem, Note 3.

Depreciation/amortization increased both as a result of the inclusion of Com Hem and the implementation of IFRS 16, with SEK 303 million of depreciation of right-of-use assets (leased assets) in the quarter. Despite this, operating profit grew to SEK 1,104 (900) million.

Revenue and end-user service revenue
 
Underlying EBITDAaL / Underlying EBITDAaL margin
SEK million
 
SEK million/Percent
     
 

Tele2 - Interim Report January-March 2019 3 (35)
Analysis of cash flows
SEK million, total operations
2019
Q1
IFRS 16
2018
Q1
IAS 17
2018
Full year
IAS 17
Underlying EBITDA, continuing operations
2,659
1,460
6,633
Items affecting comparability, continuing operations
–262
–65
–595
EBITDA continuing operations
2,397
1,395
6,038
EBITDA discontinued operations
434
190
1,399
Amortization of lease liabilities
–382
0
0
Capex paid
–1,671
–840
–3,403
Changes in working capital
116
–467
–1,123
Financial items paid / received
–130
–88
–603
Taxes paid
–293
–145
–643
Other cash items
–34
23
92
Equity free cash flow
437
68
1,757
Equity free cash flow, continuing operations
241
195
2,072
Equity free cash flow, continuing operations, rolling 12 months
2,118
2,975
2,072

EBITDA from total operations amounting to SEK 2,831 million included SEK 434 million contribution from the discontinued operation in Kazakhstan.

Capex paid amounted to SEK –1,671 (–840) million, driven by the inclusion of Com Hem and by spectrum payments of SEK 799 million, including the SEK 721 million payment of the 700 MHz license in Sweden.

Amortization of lease liabilities is reported since January 1, 2019, following the implementation of IFRS 16 and reflects the payment for leased assets which is no longer reflected within EBITDA.

Changes in working capital amounted to SEK 116 (–467) million, as negative performance in previous quarters was partially reversed.

Equity free cash flow (EFCF) w as h ighe r than in the corresponding period last year mainly as a result of working capital changes and the merger with Com Hem.

Analysis of financial position
SEK million
2019
Mar 31
IFRS 16
2018
Dec 31
IAS 17
Financial debt
   
Bonds
20,229
20,580
Commercial papers
2,100
4,491
Debt related to leasing
5,807
16
Financial institutions and other liabilities
3,746
3,219
Cash and cash equivalents
–914
–404
Other net debt adjustments
1,602
978
Net debt
32,570
28,880
Economic net debt
25,058
27,865
Economic net debt to Underlying EBITDAaL
2.6
2.8
     
Unutilized overdraft facilities and credit lines
9,561
9,116

Tele2 ended the quarter with an economic net debt to underlying EBITDAaL of 2.6x , which is within its financial leverage target range of 2.5–3.0x. A bridge between net debt and economic net debt is available in the section Non-IFRS measures in this report.

The company is of the opinion that the ratio of economic net debt to underlying EBITDAaL is in all significant respects comparable to the ratio reported prior to the implementation of IFRS 16.

End-user service revenue per segment, Q1 2019
 
End-user service revenue per service, Q1 2019
     
 

Tele2 - Interim Report January-March 2019 4 (35)
Financial guidance

 
Financial guidance (unchanged)
Tele2 AB gives the following guidance for continuing operations in constant currencies and including Com Hem pro forma
 
Mid-term ambition
•   Low-single digit growth of end-user service revenue
•   Mid-single digit growth of underlying EBITDAaL
•   Capex excluding spectrum and leasing assets of SEK 3.0–3.5 billion during roll-out of 5G and Remote-PHY
 
Full-year 2019
•   End-user service revenue is expected to be approximately unchanged compared with 2018, as revenue growth enhancing initiatives are being rolled out and are estimated to have impact the following years
•   Mid-single digit growth of underlying EBITDA excluding IFRS 16
•   Capex excluding spectrum and leasing assets of between SEK 2.9–3.2 billion
 

Dividend
For the financial year 2018, the Board of Directors of Tele2 AB has decided to recommend to the Annual General Meeting (AGM) on 6 May 2019 that an ordinary dividend of SEK 4.40 be paid per ordinary A and B share, in two equal tranches.
In addition the Board intends to remunerate shareholders with the net proceeds received, after adjusting for loss of future underlying EBITDAaL contribution, from the sale of the operations in the Netherlands and Kazakhstan. Further information will be given by mid-2019, when the Kazakhstan divestment is expected to be completed.

Dividend payment dates
If the AGM decides in accordance with the proposal by the Board of Directors, the dividend is expected to be paid as follows:
•
SEK 2.20 per share to be distributed to shareholders on May 13. The first day of trading in the shares excluding the right to receive dividend is expected to be May 7 and the record date May 8.
•
SEK 2.20 per share to be distributed to shareholders on October 7. The first day of trading in the shares excluding the right to receive dividend is expected to be October 1 and the record date October 2.

Financial policy
The financial policy has been updated to reflect the implementation of the IFRS 16 accounting standard from January 1, 2019. The changes are currently not expected to have any implications for the level of borrowings or shareholder remuneration of the Group.
•
Tele2 will seek to operate within a range for economic net debt to underlying EBITDAaL of between 2.5–3.0x, and to maintain investment grade credit metrics
•
Tele2’s policy will aim to maintain target leverage by distributing capital to shareholders through:

–
An ordinary dividend of at least 80 percent of equity free cash flow; and

–
Extraordinary dividends and/or share repurchases, based on remaining equity free cash flow, proceeds from asset sales and re-leveraging of underlying EBITDAaL growth

Tele2 - Interim Report January-March 2019 5 (35)
Overview by segment

Sweden
The integration with Com Hem, which is the main focus of the Swedish business, progressed according to plan and cost synergies of approximately SEK 50 million contributed to the performance in the quarter. The annualized run-rate cost synergies were estimated to have reached SEK 300 million at the end of Q1. Integration costs of SEK 155 million for the Com Hem merger were incurred in the quarter, for a total of SEK 365 million since the integration program started.

Pro forma review including Com Hem
The following pro forma review of the Swedish business describes the business as if Com Hem had been part of the Tele2 Group throughout all reviewed periods.
Revenue and total end-user service revenue decreased by 1 percent as legacy fixed services in both the consumer and business segments continued to decline, while mobile end-user service revenue growth was positive.
Underlying EBITDA excluding IFRS 16 grew by 5 percent, driven mainly by cost synergies from the integration and restructuring.
The SEK 721 million fee for the 700 MHz spectrum awarded in Q4 2018 was paid in Q1 2019.

Financials (SEK million)
2019
Q1
2018
Q1
Pro Forma
organic %
2018
Full year
Pro forma
Revenue
5,471
5,558
-2%
22,474
Sweden Consumer
3,799
3,856
–1%
15,832
Sweden Business
1,672
1,702
–2%
6,642
         
Underlying EBITDA
2,101
1,761
 
7,214
         
Underlying EBITDA excluding IFRS16
1,843
1,761
5%
7,214
Sweden Consumer
1,469
1,389
6%
5,764
Sweden Business
374
372
0%
1,450
         
Underlying EBITDA margin excluding IFRS16
34%
32%
 
32%
         
Capex
       
Network
201
181
 
802
IT
176
111
 
589
Customer equipment
126
122
 
380
Other
41
15
 
95
Capex excluding spectrum and leases
544
429
 
1,866
Spectrum
0
0
 
721
Right-of-use assets (leases)
239
0
 
0
Capex
783
429
 
2,587
         
Capex excluding spectrum and lease assets/revenue
10%
8%
 
8%

Tele2 - Interim Report January-March 2019 6 (35)
Sweden Consumer
The consumer market was stable overall, in line with previous quarters. Com Hem mobile was launched, the first brand in Sweden to offer both fixed and mobile services on the same invoice, and the FMC benefit scheme was further enhanced with a double-speed offering for fixed broadband. The number of FMC customers increased to 45,000, with initial data indicating a positive effect on customer loyalty as expected.
Tele2 regained the first place on the Netflix speed index, having held the top position 54 times out of the last 61 months.
The mobile postpaid RGU stock continued to be driven by Comviq, while the prepaid and mobile broadband RGU stocks saw a market-driven decline. The introduction of Com Hem mobile is expected to enhance customer growth over time but had a limited effect in the quarter.
The Fixed broadband subscriber base grew steadily with 12,000 net adds, in line with the first quarter of 2018. ASPU improved by 1.8 percent driven by pricing activities during 2018 on the Com Hem brand. Fixed broadband revenue increased by 8 percent driven equally by sustained subscriber growth on both Com Hem and Boxer brands and by last year’s price adjustment on the Com Hem customer base.
The Com Hem TV subscriber base grew by +3,000, versus a slight decline in Q1 2018, driven by additional group agreement subscribers. The DTT subscriber base contracted by – 11,000 due to pricing and the market pressure caused by fiber rollout. TV revenue decreased by 6 percent driven mainly by the decline in the Boxer RGU stock.
The integration and right-sizing of the organization progressed according to plan with a number of activities identified to realize synergies.
Underlying EBITDA excluding IFRS 16 increased by 6 percent mainly driven by successful cost management and restructuring.

Operating data (by thousands)
2019
Q1
2018
Q1
Pro forma
 
2019
Mar 31
2018
Mar 31 Pro forma
RGUs
Net intake
 
RGU base
Mobile
–20
–50
 
2,927
2,976
Postpaid
5
  -7 
 
1,822
1,796
Prepaid
–25
–43
 
1,105
1,180
Fixed
–7
–21
 
2,201
2,256
Fixed broadband
12
12
 
839
790
Digital TV
–8
–12
 
1,049
1,086
Cable & Fiber
3
–2
 
661
653
DTT
–11
–11
 
388
432
Fixed telephony & DSL
–11
–20
 
313
381
           
Addressable fixed footprint
64
40
 
3,178
2,871

KPIs and Financials (SEK million)
2019
Q1
2018
Q1
Pro forma
%
2018
Full year
Pro forma
 
ASPU (SEK)
         
Mobile
         
Postpaid
216
213
1.3%
216
 
Prepaid
83
83
–0.1%
84
 
Fixed
         
Fixed broadband
247
243
1.8%
247
 
Digital TV
         
Cable & Fiber
236
241
–2.0%
241
 
DTT
289
293
–1.3%
293
 
Fixed telephony & DSL
110
109
1.1%
111
 
           
Revenue
         
Mobile
1,457
1,452
0%
5,881
 
Postpaid
1,179
1,152
2%
4,698
 
Prepaid
278
300
–7%
1,183
 
Fixed
1,531
1,555
–2%
6,243
 
Fixed broadband
618
571
8%
2,380
 
Digital TV
807
856
–6%
3,379
 
Cable & Fiber
466
472
–1%
1,901
 
DTT
341
384
–11%
1,478
 
Fixed telephony & DSL
106
128
–17%
484
 
Landlord & Other
176
184
–4%
722
 
End-user service revenue
3,164
3,191
–1%
12,846
 
Operator revenue
190
187
 
780
 
Equipment revenue
445
478
 
2,206
 
Revenue
3,799
3,856
–1%
15,832
 
           
Underlying EBITDA
1,641
1,389
 
5,764
 
           
Underlying EBITDA excluding IFRS 16
1,469
1,389
6%
5,764
 
Underlying EBITDA margin excluding IFRS 16
39%
36%
 
36%
 

Tele2 - Interim Report January-March 2019 7 (35)
Sweden Business
The business is undergoing a period of restructuring to focus on higher-margin, network-based ICT services, regain revenue growth and make structural cost savings.
In the Large Enterprise segment the major operators have been focusing on defending existing customer bases, while SME segment continues to be competitive with fighter brands offering consumer-like pricing to SOHO customers.
Tele2 continued its positive trend in RGU growth, driven by the Large Enterprise segment, although at a slower pace than during the second half of 2018.
New contracts were won with both municipalities and large enterprises including Rejlers, Toshiba, Balder and GDL Logistics. Renewals and contract expansions were agreed with customers including NCC, Stena and Linköping University.
The growth in mobile end-user service revenue continued to be positive at +1 percent, while total end-user service revenue declined by 2 percent attributable to decreasing revenue within legacy products.
Underlying EBITDA excluding IFRS 16 was unchanged despite the decline in end-user service revenue.

Operating data (by thousands)
2019
Q1
2018
Q1
Pro forma
 
2019 Mar 31
2018
Mar 31
Pro forma
RGUs
Net intake
 
RGU base
Mobile
         
Postpaid
7
34
 
896
855

KPIs and Financials (SEK million)
2019
Q1
2018
Q1
Pro forma
%
2018
Full year
Pro forma
 
ASPU, SEK
         
Mobile
         
Postpaid
177
188
–5.5%
186
 
Revenue
         
Mobile
475
472
1%
1,905
 
Fixed
295
325
–9%
1,238
 
Solutions
264
261
1%
1,051
 
End-user service revenue
1,034
1,058
–2%
4,194
 
Operator revenue, excluding
         
Wholesale
24
31
 
127
 
Equipment revenue
446
467
 
1,744
 
Wholesale
167
145
 
573
 
Internal sales
1
1
 
4
 
Revenue
1,672
1,702
–2%
6,642
 
           
Underlying EBITDA
460
372
 
1,450
 
           
           
Underlying EBITDA excluding IFRS 16
374
372
0%
1,450
 
Of which wholesale
68
64
 
200
 
           
Underlying EBITDA margin excluding IFRS 16
22%
22%
 
22%
 

Baltics

Lithuania
The market stayed competitive in terms of pricing, especially in the mobile broadband segment. Tele2’s marketing campaign Tele2 Free Internet won an award as “The Most Efficient Marketing Campaign” at the Password 2019 conference.
Net RGU intake of –4,000 was attributable to prepaid decline of –13,000, while all other segments demonstrated positive net intake.
Mobile end-user service revenue grew by 11 percent in local currency, mainly driven by increased postpaid consumer ASPU and growth in the mobile broadband RGU base.
Underlying EBITDA excluding IFRS 16 grew by 25 percent in local currency driven by higher revenue, with the margin reaching 38 (33) percent.

Operating data (by thousands)
2019
Q1
2018
Q1
 
2019
Mar 31
2018
Mar 31
 
Net intake
 
RGU base
RGUs, mobile
–4
16
 
1,857
1,808

KPIs and Financials (SEK million)

2019
Q1
2018
Q1

organic %

2018
Full year

ASPU (EUR)

6.0

5.6

8%

5.9

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

End-user service revenue

351

302

11%

1,329

 

Operator revenue

60

55

 

249

 

Equipment revenue

193

170

 

822

 

Internal sales

9

5

 

30

 

Revenue

613

532

10%

2,430

 

 

 

 

 

 

 

Underlying EBITDA

245

178

 

817

 

 

 

 

 

 

 

Underlying EBITDA excluding IFRS 16

232

178

25%

817

 

Underlying EBITDA margin excluding IFRS 16

38%

33%

 

34%

 

Capex

29

22

 

144

 

Capex excluding spectrum and leases

26

22

 

144

 

Capex excluding spectrum and leases/revenue

4%

4%

 

6%

 


Tele2 - Interim Report January-March 2019 8 (35)

Latvia
The main themes in the market were service bundles, handset promotion and intense competition in the B2B sector. Tele2 continues to focus on service quality, customer satisfaction, sales efficiency and operational excellence. Rolling 3-month consumer customer NPS reached the highest level in two years.
Tele2 Latvia advanced to the top-10 list of most attractive employers in Latvia in a nation-wide survey, making the strongest year-on-year improvement of all big companies in the country.
The total RGU base was almost stable despite continued prepaid decline. The postpaid segment performed well with increases in both the consumer voice, mobile broadband and business RGU bases.
Mobile end-user service revenue grew by 6 percent in local currency, driven by ASPU growth mainly related to data monetization.
The underlying EBITDA margin excluding IFRS 16 increased to 36 (35) percent, driven mainly by higher revenue and continuous cost management.
Capex included SEK 67 million for the 3,5GHz license won in Q3 2018, which was paid for and booked in the quarter.

Operating data (by thousands)
2019
Q1
2018
Q1
 
2019
Mar 31
2018
Mar 31
 
Net intake
 
RGU base
RGUs, mobile
–5
–10
 
946
942

KPIs and Financials (SEK million)
2019
Q1
2018
Q1
organic %
2018
Full year
 
ASPU (EUR)
6.7
6.3
6%
6.6
 
           
Revenue
         
End-user service revenue
199
179
6%
768
 
Operator revenue
47
47
 
201
 
Equipment revenue
72
66
 
321
 
Internal sales
4
4
 
18
 
Revenue
322
296
4%
1,308
 
           
Underlying EBITDA
125
103
 
474
 
           
Underlying EBITDA excluding IFRS 16
116
103
8%
474
 
Underlying EBITDA margin excluding IFRS 16
36%
35%
 
36%
 
Capex
101
24
 
113
 
Capex excluding spectrum and leases
31
24
 
112
 
Capex excluding spectrum and leases/revenue
10%
8%
 
9%
 

Estonia
Tele2 launched new mobile postpaid tariffs for consumers and businesses in Q1 which received positive initial reception in the market. New prepaid price plans were also launched in March as the prepaid brand Smart was closed. Tele2 has registered for the upcoming 3.5 GHz auction.
Net adds amounted to –5,000 driven by the consumer segment, while the number of business RGUs increased. The impact of closing telemarketing last year has been compensated by improved retail performance and customer retention and has resulted in higher quality and value of new customer intake. ASPU grew by 3 percent, but total end-user service revenue decreased by 3 percent organically due the decline of the RGU base over the past twelve months.
Underlying EBITDA excluding IFRS 16 increased by 1 percent, and the margin increased to 21 (19) as an effect of the closing of telemarketing which was an expensive and labor consuming intake channel.

Operating data (by thousands)
2019
Q1
2018 
Q1 
 
2019 
Mar 31 
2018 Mar 31 
 
Net intake
 
RGU base
RGUs, mobile
–5
–5
 
432
459

KPIs and Financials (SEK million, unless otherwise stated)
2019
Q1
2018
Q1
organic %
2018
Full year
 
           
ASPU (EUR)
         
Mobile
7.7
7.5
3%
7.8
 
           
Revenue
         
End-user service revenue
110
108
–3%
451
 
Operator revenue
32
30
 
133
 
Equipment revenue
40
50
 
197
 
Internal sales
1
1
 
6
 
Revenue
183
189
–8%
787
 
           
Underlying EBITDA
47
35
 
167
 
           
Underlying EBITDA excluding IFRS 16
38
35
1%
167
 
Underlying EBITDA margin excluding IFRS 16
21%
19%
 
21%
 
Capex
29
17
 
87
 
Capex excluding spectrum and leases
20
17
 
87
 
Capex excluding spectrum and leases/revenue
11%
9%
 
11%
 


Tele2 - Interim Report January-March 2019 9 (35)
Other markets

Croatia
The quarter started with prolonged Christmas campaigning, and the market later focused on hardware and convergent offers. Tele2’s unique Unlimited products remain at the center of its offerings. The strengthening of the retail channel continued with the insourcing of another three stores, ending the quarter with a total of 18 Tele2-managed stores.
The spectrum portfolio was extended with another 10 MHz in the 2100 MHz band, which was deployed at the end of the quarter.
End-user service revenue grew organically by 14 percent, adjusted for the non-recurring revenue reported for Q1 2018, due to a 6 percent higher RGU base and a 7 percent increase in ASPU.
Underlying EBITDA excluding IFRS 16 increased as a result of higher end-user service revenue, lower spec-trum cost and a continued focus on cost efficiency.
The increase in capex was driven by continued investments in spectrum and network quality.

Operating data (by thousands)
2019
Q1
2018
Q1
 
2019
Mar 31
2018
Mar 31
 
Net intake
 
RGU base
RGUs, mobile
–3
3
 
894
844

KPIs and Financials (SEK million)
2019
Q1
2018
Q1
organic %
2018
Full year
 
           
ASPU (HRK)
76
71
7%
77
 
           
Revenue
         
End-user service revenue
286
260
14%
1,110
 
Operator revenue
49
44
 
269
 
Equipment revenue
138
127
 
550
 
Internal sales
2
2
 
8
 
Revenue
475
433
10%
1,937
 
           
Underlying EBITDA
119
33
 
268
 
           
Underlying EBITDA excluding IFRS 16
90
33
157%
268
 
Underlying EBITDA margin excluding IFRS 16
19%
8%
 
14%
 
           
Capex
83
11
 
128
 
Capex excluding spectrum and leases
15
11
 
128
 
Capex excluding spectrum and leases/revenue
3%
3%
 
7%
 

Germany
The net RGU intake in the quarter was stable in absolute terms compared to Q1 2018, with both churn and intake slightly higher. The closing RGU base amounted to 295,000 (352,000) and revenue declined accordingly by 16 percent.
The underlying EBITDA margin excluding IFRS 16 increased to 46 (43) percent, driven by a reduction in transit and termination rates, lower cost for bad debt and a continued strict cost discipline.

KPIs and Financials (SEK million)
2019
Q1
2018
Q1
organic %
2018 Full year
 
Revenue
122
139
–16%
539
 
           
Underlying EBITDA
56
60
 
249
 
           
Underlying EBITDA excluding IFRS 16
56
60
–10%
249
 
Underlying EBITDA margin excluding IFRS 16
46%
43%
 
46%
 

Tele2 - Interim Report January-March 2019 10 (35)
 
Kazakhstan (discontinued)
The market players continued to re-position their price plans around different options for free usage of social networks, and Tele2 launched two OTT TV products.
Net intake declined to –93,000 due to a change in focus to attract higher-quality subscribers and increased market competition.
End-user service revenue increased by 22 percent in local currency driven by 19 percent higher ASPU related to several repricing moves over the past year.
Underlying EBITDA excluding IFRS 16 increased by 60 percent in local currency both due to higher revenue and a margin improvement to 40 (29) percent.

Operating data (by thousands)
2019
Q1
2018
Q1
 
2019
Mar 31
2018
Mar 31
 
Net intake
 
RGU base
RGUs, mobile
–93
15
 
7,067
6,929

KPIs and Financials (SEK million)
2019
Q1
2018
Q1
organic %
2018
Full year
 
ASPU (KZT)
1,221
1,025
19%
1,138
 
           
Revenue
         
End-user service revenue
632
534
22%
2,425
 
Operator revenue
151
146
 
637
 
Equipment revenue
4
7
 
22
 
Internal sales
0
0
 
0
 
Revenue
787
687
18%
3,084
 
           
Underlying EBITDA
352
202
 
1,053
 
           
Underlying EBITDA excluding IFRS 16
312
202
60%
1,057
 
Underlying EBITDA margin excluding IFRS 16
40%
29%
 
34%
 
           
Capex
136
39
 
274
 
Capex excluding spectrum and leases
38
39
 
274
 
Capex excluding spectrum and leases/revenue
5%
6%
 
9%
 

Tele2 - Interim Report January-March 2019 11 (35)

 Pro forma Group Summary

SEK million
2019
Q1
2018
Q1
Pro forma
2018
Full year
Pro forma
2017
Full year
Pro forma
REVENUE
       
Sweden Consumer
3,799
3,856
15,832
15,488
Sweden Business
1,672
1,702
6,642
6,705
Lithuania
613
532
2,430
1,957
Latvia
322
296
1,308
1,178
Estonia
183
189
787
743
Croatia
475
433
1,917
1,694
Germany
122
139
539
612
IoT
48
43
200
147
Other
0
32
152
135
Internal sales, elimination
–17
–13
–66
–57
TOTAL
7,217
7,209
29,761
28,602
         
UNDERLYING EBITDA
       
Sweden Consumer
1,641
1,389
5,764
5,638
Sweden Business
460
372
1,450
1,435
Lithuania
245
178
817
652
Latvia
125
103
474
417
Estonia
47
35
167
185
Croatia
119
33
268
182
Germany
56
60
249
265
IoT
–6
–18
–104
–101
Other
–28
–11
–70
–63
TOTAL
2,659
2,141
9,015
8,610
         
UNDERLYING EBITDA EXCLUDING IFRS 16
       
Sweden Consumer
1,469
1,389
5,764
5,638
Sweden Business
374
372
1,450
1,435
Lithuania
232
178
817
652
Latvia
116
103
474
417
Estonia
38
35
167
185
Croatia
90
33
268
182
Germany
56
60
249
265
IoT
–6
–18
–104
–101
Other
–29
–11
–70
–63
TOTAL
2,340
2,141
9,015
8,610
         
CAPEX
       
Sweden
783
429
2,587
1,662
Lithuania
29
22
144
114
Latvia
101
24
113
83
Estonia
29
17
87
83
Croatia
83
11
128
90
Germany
0
0
0
0
IoT
6
7
29
30
Other
1
100
393
289
TOTAL
1,032
610
3,481
2,351
         
of which
       
Network
269
267
1,308
1,197
IT
196
201
935
667
Customer equipment
126
122
381
363
Other
52
20
135
123
Capex excluding spectrum and leases
643
610
2,759
2,350
Spectrum
131
0
722
1
Right-of-use assets (leases)
258
0
0
0
TOTAL
1,032
610
3,481
2,351

Tele2 - Interim Report January-March 2019 12 (35)
Other Items

Risks and uncertainty factors
Tele2’s operations are affected by a number of external factors. The risk factors considered to be most significant to Tele2’s future development are spectrum auctions, regulation, market competitiveness and changing technology, strategy implementation and integra-tion, operations in Kazakhstan, network and IT infrastructure and quality, data protection and cyber security, external relationships, suppliers and Joint Ventures, customer churn, recruitment of skilled personnel, geopolitical conditions and financial risks such as currency risk, interest risk, liquidity risk, credit risk, risks related to tax matters and impairment of assets. Additionally, there is a risk that Tele2 may not be able to obtain sufficient funding for its operations. Please refer to Tele2’s annual report for 2018 (Administration report and Note 2) for a detailed description of Tele2’s risk exposure and risk management.

Closing of the Dutch merger between Tele2 and T-Mobile
The merger of Tele2 Netherlands and T-Mobile Netherlands closed on 2 January, 2019. Following the completion of the merger, Tele2 owns 25 percent of the enlarged T-Mobile NL and Deutsche Telekom owns 75 percent. Tele2’s share of profits is reported in the income statement as result from an associated company.

Annual General Meeting
Annual General Meeting on Monday 6 May 2019 at 3.00 p.m. CEST at the Hotel At Six, Brunkebergstorg 6 in Stockholm. Shareholders who wish to attend the meeting shall be entered in the share register maintained by Euroclear Sweden on Monday 29 April 2019, and give notice of their intention to attend no later than Monday 29 April 2019. Notice to attend is to be made on the company’s website at www.tele2.com, under the heading “Annual General Meeting 2019”, found under the section “Governance”, by telephone to +46 (0) 771 246 400 or by mail to Computershare AB “AGM Tele2”, P.O. Box 610, SE-182 16 Danderyd, Sweden.

Auditors’ review
This interim report has not been subject to specific review by the company’s auditors.

Other
Tele2 will release its financial and operating results for the period ending June 30, 2019 on July 17, 2019.

The Board of Directors and CEO declare that the interim report provides a fair overview of the parent
company’s and Group’s operations, their financial position and performance, and describes material
risks and uncertainties facing the parent company and other companies in the Group.
     
 
Stockholm, April 24, 2019
Tele2 AB
 
     
 
Georgi Ganev
Chairman
 
     
Sofia Arhall Bergendorff
Andrew Barron
Anders Björkman
     
Cynthia Gordon
Eva Lindqvist
Lars-Åke Norling
     
Eamonn O’Hare
Carla Smits-Nusteling
 
Anders Nilsson
President and CEO
 

Tele2 - Interim Report January-March 2019 13 (35)
Q1 2019 PRESENTATION
Tele2 will host a presentation, with the possibility to join through a conference call, for the global financial community at 10:00 am CET (09:00 am GMT/04:00 am EST) on Wednesday, April 24, 2019. The presentation will be held in English and also made available as a webcast on Tele2’s website:   www.tele2.com .
 
 
 
Dial-in information:
To ensure that you are connected to the conference call, please dial in a few minutes before the start of the conference call to register your attendance.
 
Dial-in numbers:
SE: +46 (0) 8 50 69 21 80
UK: +44 (0) 2071 928000
US: +1 631 510 74 95

Contacts
 
Appendices
Erik Strandin Pers
Head of Investor Relations
Telephone: +46 (0) 733 41 41 88
 
Tele2 AB
Company registration nr: 556410-8917
Skeppsbron 18
P.O. Box 2094
SE-103 13 Stockholm
Sweden
Tel + 46 (0) 8 5620 0060
www.tele2.com
 
VISIT OUR WEBSITE: www.tele2.com
 
Unaudited condensed consolidated income statement
 
Unaudited condensed consolidated comprehensive income
 
Unaudited condensed consolidated balance sheet
 
Unaudited condensed consolidated cash flow statement
 
Unaudited condensed consolidated statement of changes in equity
 
Unaudited consolidated parent company
 
Notes
 
Non-IFRS measures

Tele2 - Interim Report January-March 2019 14 (35)
Unaudited consolidated income statement

SEK million
Note
2019
Jan 1–Mar 31
2018
Jan 1–Mar 31
CONTINUING OPERATIONS
     
Revenue
2
7,217
5,425
Cost of services provided and equipment sold
3
–4,250
–3,060
Gross profit
 
2,967
2,365
       
Selling expenses
3
–1,133
–932
Administrative expenses
3
–716
–504
Result from shares in joint ventures and associated companies
 
10
14
Other operating income
 
75
57
Other operating expenses
3
–99
–100
Operating profit
 
1,104
900
Interest income
 
6
7
Interest expenses
5
–115
–76
Other financial items
 
5
–13
Profit after financial items
 
1,000
818
       
Income tax
4
–231
–196
NET PROFIT FROM CONTINUING OPERATIONS
 
769
622
       
DISCONTINUED OPERATIONS
     
Net profit/loss from discontinued operations
11
255
–273
NET PROFIT
 
1,024
349
       
ATTRIBUTABLE TO
     
Equity holders of the parent company
 
968
343
Non-controlling interests
 
56
6
NET PROFIT
 
1,024
349
Earnings per share (SEK)
8
1.41
0.68
Earnings per share, after dilution (SEK)
8
1.40
0.68
       
FROM CONTINUING OPERATIONS
     
ATTRIBUTABLE TO
     
Equity holders of the parent company
 
769
622
       
Earnings per share (SEK)
8
1.12
1.24
Earnings per share, after dilution (SEK)
8
1.11
1.24

Tele2 - Interim Report January-March 2019 15 (35)
Unaudited consolidated comprehensive income
 
SEK million
Note
2019
Jan 1–Mar 31
2018
Jan 1–Mar 31
NET PROFIT
 
1,024
349
       
OTHER COMPREHENSIVE INCOME
     
COMPONENTS NOT TO BE RECLASSIFIED TO NET PROFIT
     
Pensions, actuarial gains/losses
 
–108
–
Pensions, actuarial gains/losses, tax effect
 
23
–
Components not to be reclassified to net profit
 
–85
–
       
COMPONENTS THAT MAY BE RECLASSIFIED TO NET PROFIT
     
Exchange rate differences
     
Translation differences in foreign operations
 
297
843
Tax effect on above
 
–15
–113
Reversed cumulative translation differences from divested companies
11
–778
–
Tax effect on above
11
122
–
Translation differences
 
–374
730
Hedge of net investments in foreign operations
 
–47
–153
Tax effect on above
 
10
34
Reversed cumulative hedge from divested companies
11
721
–
Tax effect on above
11
–169
–
Hedge of net investments
 
515
–119
Exchange rate differences
 
141
611
       
Cash flow hedges
     
Profit arising on changes in fair value of hedging instruments
 
4
–
Reclassified cumulative profit/loss to income statement
 
–3
18
Tax effect on cash flow hedges
 
5
–4
Cash flow hedges
 
6
14
       
Components that may be reclassified to net profit
 
147
625
       
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX
 
62
625
       
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
 
1,086
974
       
ATTRIBUTABLE TO
     
Equity holders of the parent company
 
1,028
977
Non-controlling interests
 
58
–3
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
 
1,086
974

Tele2 - Interim Report January-March 2019 16 (35)

Unaudited condensed consolidated balance sheet

SEK million
Note
Mar 31, 2019
Dec 31, 2018
ASSETS
     
       
NON-CURRENT ASSETS
     
Goodwill
 
30,198
30,159
Other intangible assets
 
19,421
19,604
Intangible assets
 
49,619
49,763
Tangible assets
 
9,035
9,192
Right-of-use assets
 
6,048
–
Shares in joint ventures and associated companies
9
7,071
13
Other financial assets
5
798
1,015
Capitalized contract costs
 
396
373
Deferred tax assets
4
453
368
NON-CURRENT ASSETS
 
73,420
60,724
       
CURRENT ASSETS
     
Inventories
 
827
669
Current receivables
 
6,731
6,825
Current investments
 
2
2
Cash and cash equivalents
6
914
404
CURRENT ASSETS
 
8,474
7,900
       
ASSETS CLASSIFIED AS HELD FOR SALE
11
4,089
14,020
       
ASSETS
 
85,983
82,644
EQUITY AND LIABILITIES
     
       
EQUITY
     
Attributable to equity holders of the parent company
 
37,405
36,334
Non-controlling interests
 
86
28
EQUITY
8
37,491
36,362
       
NON-CURRENT LIABILITIES
     
Interest-bearing liabilities
5
29,666
23,238
Non-interest-bearing liabilities
 
4,255
4,206
NON-CURRENT LIABILITIES
 
33,921
27,444
       
CURRENT LIABILITIES
     
Interest-bearing liabilities
5
4,209
6,763
Non-interest-bearing liabilities
 
7,078
8,088
CURRENT LIABILITIES
 
11,287
14,851
       
LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE
11
3,284
3,987
       
EQUITY AND LIABILITIES
 
85,983
82,644

Tele2 - Interim Report January-March 2019 17 (35)

Unaudited condensed consolidated cash flow statement
(Total operations)
SEK million
Note
2019
Jan 1–Mar 31
2018
Jan 1–Mar 31
OPERATING ACTIVITIES
     
Net profit
 
1,024
349
Adjustments for non-cash items in net profit
 
1,350
1,026
Changes in working capital
 
116
–467
Cash flow from operating activities
 
2,490
908
       
INVESTING ACTIVITIES
     
Additions to intangible and tangible assets
 
–1,671
–840
Acquisition and sale of shares and participations
9
2,352
1
Cash flow from investing activities
 
681
–839
       
FINANCING ACTIVITIES
     
Proceeds from loans
5
1,756
66
Repayments of loans
5
–4,637
–518
Cash flow from financing activities
 
–2,881
–452
NET CHANGE IN CASH AND CASH EQUIVALENTS
 
290
–383
       
Cash and cash equivalents at beginning of period
 
404
802
Exchange rate differences in cash and cash equivalents
 
220
22
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
6
914
441


Tele2 - Interim Report January-March 2019 18 (35)
Unaudited condensed consolidated statements of changes in equity

   
Mar 31, 2019
   
Attributable to equity holders of the parent company
   
SEK million
Note
Share
capital
Other
paid-in
capital
Hedge
reserve
Translation
reserve
Retained
earnings
Total
Non-
controlling
interests
Total
equity
                   
Equity at January 1
 
863
27,378
–734
3,252
5,575
36,334
28
36,362
                   
Net profit
 
-
-
-
-
968
968
56
1,024
Other comprehensive income for the period, net of tax
 
-
-
521
-376
-8
60
2
62
Total comprehensive income for the period
 
–
–
521
–376
883
1,028
58
1,086
                   
OTHER CHANGES IN EQUITY
                 
Share-based payments
8
-
-
-
-
37
37
-
37
Share-based payments, tax effect
8
-
-
-
-
6
6
-
6
EQUITY AT END OF THE PERIOD
 
863
27,378
–213
2,876
6,501
37,405
86
37,491

   
Mar 31, 2018
   
Attributable to equity holders of the parent company
   
SEK million
Note
Share
capital
Other paid-in
capital
Hedge
reserve
Translation
reserve
Retained
earnings
Total
Non-
controlling
interests
Total
equity
                 
 
Equity at January 1
 
634
7,841
–651
2,670
6,710
17,204
–114
17,090
                   
Net profit
 
-
-
-
-
343  
343
6
349
Other comprehensive income for the period, net of tax
 
-
-
-105
739
-
634
-9
625
Total comprehensive income for the period
 
–
–
–105
739
343
977
–3
974
                   
OTHER CHANGES IN EQUITY
                 
Share-based payments
8
-
-
-
-
5
5
-
5
Share-based payments, tax effect
8
-
-
-
-
1
1
-
1
EQUITY AT END OF THE PERIOD
 
634
7,841
–756
3,409
7,059
18,187
–117
18,070


Tele2 - Interim Report January-March 2019 19 (35)
Unaudited consolidated parent company

Income statement
SEK million
2019
Jan 1–Mar 31
2018
Jan 1–Mar 31
Revenue
12
13
Administrative expenses
–40
–26
Other operating expenses
–71
–25
Operating loss
–99
–38
Interest revenue and similar income
36
–
Interest expense and similar costs
–139
–136
Loss after financial items
–202
–174
Tax on loss
39
38
NET LOSS
–163
–136

Balance sheet
SEK million
Note
Mar 31, 2019
Dec 31, 2018
ASSETS
     
       
NON-CURRENT ASSETS
     
Financial assets
 
47,236
47,083
NON-CURRENT ASSETS
 
47,236
47,083
       
CURRENT ASSETS
     
Current receivables
 
13,471
15,785
Cash and cash equivalents
 
7
25
CURRENT ASSETS
 
13,478
15,810
       
ASSETS
 
60,714
62,893
       
EQUITY AND LIABILITIES
     
       
EQUITY
     
Restricted equity
8
5,848
5,848
Unrestricted equity
8
28,757
28,874
EQUITY
 
34,605
34,722
       
NON-CURRENT LIABILITIES
     
Interest-bearing liabilities
5
23,298
21,721
NON-CURRENT LIABILITIES
 
23,298
21,721
       
CURRENT LIABILITIES
     
Interest-bearing liabilities
5
2,548
6,113
Non-interest-bearing liabilities
 
263
337
CURRENT LIABILITIES
 
2,811
6,450
       
EQUITY AND LIABILITIES
 
60,714
62,893

Tele2 - Interim Report January-March 2019 20 (35)
Notes
NOTE 1 ACCOUNTING PRINCIPLES AND DEFINITIONS
The interim financial information for the Group for the three month period ended March 31, 2019 has been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and the Swedish Annual Accounts Act, and for the parent company in accordance with the Swedish Annual Accounts Act and RFR 2 Reporting for legal entities and other statements issued by the Swedish Financial Reporting Board. In all respects other than those described below, Tele2 has presented the financial statements for the period ended March 31, 2019 in accordance with the accounting policies and principles applied in the 2018 Annual Report. The description of these principles and definitions is found in Note 1 and Note 35 in the Annual Report 2018.
On January 1, 2019 Tele2 changed the accounting principles for leases, by applying IFRS 16. Tele2 has chosen to apply the reliefs in the standard and not restate prior periods. Description of changes as a result of applying IFRS 9 and the effects on the opening balance January 1, 2019 are consistent with those found in Note 10.
The other amendments to IFRSs applicable from January 1, 2019 had no significant effects to Tele2’s financial reports for the three month period ended March 31, 2019.
To more properly reflect the underlying performance of the business, Tele2’s measure of segment profit/loss has changed from adjusted EBITDA to underlying EBITDA, please refer to Note 3.
Figures presented in this report refer to January 1 – March 31 (Q1), 2019 and continuing operations unless otherwise stated. Figures shown in parentheses refer to the comparable periods in 2018.

NOTE 2 REVENUE
Revenue
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Sweden Consumer
3,799
2,138
Sweden Business
1,672
1,636
Lithuania
613
532
Latvia
322
296
Estonia
183
189
Croatia
475
433
Germany
122
139
IoT
48
43
Other
–
32
 
7,234
5,438
Internal sales, elimination
–17
–13
TOTAL
7,217
5,425

Internal sales
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Sweden Business
1
1
Lithuania
9
5
Latvia
4
4
Estonia
1
1
Croatia
2
2
TOTAL
17
13

Tele2 - Interim Report January-March 2019 21 (35)
Revenue split per category
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
     
Sweden Consumer
   
End-user service revenue
3,164
1,536
Operator revenue
190
149
Equipment revenue
445
453
 
3,799
2,138
Sweden Business
   
End-user service revenue
1,034
995
Operator revenue
191
176
Equipment revenue
446
464
Internal sales
1
1
 
1,672
1,636
Lithuania
   
End-user service revenue
351
302
Operator revenue
60
55
Equipment revenue
193
170
Internal sales
9
5
 
613
532
Latvia
   
End-user service revenue
199
179
Operator revenue
47
47
Equipment revenue
72
66
Internal sales
4
4
 
322
296
Estonia
   
End-user service revenue
110
108
Operator revenue
32
30
Equipment revenue
40
50
Internal sales
1
1
 
183
189
Croatia
   
End-user service revenue
286
260
Operator revenue
49
44
Equipment revenue
138
127
Internal sales
2
2
 
475
433
Germany
   
End-user service revenue
122
138
Equipment revenue
–
1
 
122
139
IoT
   
End-user service revenue
48
43
 
48
43
Other
   
Operator revenue
–
32
 
–
32
TOTAL
   
End-user service revenue
5,314
3,561
Operator revenue
569
533
Equipment revenue
1,334
1,331
Internal sales
17
13
TOTAL REVENUE
7,234
5,438

Tele2 - Interim Report January-March 2019 22 (35)
Revenue in Sweden
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Sweden Consumer
   
Mobile
1,457
1,452
Fixed
1,531
84
Landlord & Other
176
–
End-user service revenue
3,164
1,536
Operator revenue
190
149
Equipment revenue
445
453
Sweden Consumer
3,799
2,138
     
Sweden Business
   
Mobile
475
459
Fixed
295
278
Solutions
264
258
End-user service revenue
1,034
995
Operator revenue, excluding Wholesale
24
31
Equipment revenue
446
464
Wholesale
167
145
Internal sales
1
1
Sweden Business
1,672
1,636
     
Total revenue in Sweden
5,471
3,774

NOTE 3 SEGMENT REPORTING
Underlying EBITDA
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Sweden Consumer
1,641
725
Sweden Business
460
355
Lithuania
245
178
Latvia
125
103
Estonia
47
35
Croatia
119
33
Germany
56
60
IoT
–6
–18
Other
–28
–11
TOTAL
2,659
1,460

To more properly reflect the underlying performance of the business, Tele2’s measure of segment profit/loss has changed from adjusted EBITDA to underlying EBITDA. The change is a somewhat increased scope of items affecting comparability to make the underlying EBITDA clearer. Hence two lines have been added to the reconciliation below; Disposal of non-current assets and Other items affecting comparability.

Reconciling items to reported operating profit/loss
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Underlying EBITDA
2,659
1,460
Acquisition costs
–44
–49
Integration costs
–155
–20
Disposal of non-current assets
–1
–15
Other items affecting comparability
–62
19
Items affecting comparability
–262
–65
EBITDA
2,397
1,395
Depreciation/amortization
–1,303
–509
Result from shares in joint ventures and associated companies
10
14
Operating profit
1,104
900

Acquisition costs
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Com Hem, Sweden
–44
–49
Acquisition costs
–44
–49

Acquisition costs are reported as other operating expenses.

Tele2 - Interim Report January-March 2019 23 (35)
Integration costs
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Com Hem, Sweden
–155
–
TDC, Sweden
–
–20
Integration costs
–155
–20
Reported as:
   
-cost of services provided
–17
–1
-selling expenses
–76
–
-administrative expenses
–62
–19
Consist of:
   
-redundancy costs
–111
–
-other employee and consultancy costs
–35
–9
-exit of contracts and other costs
–9
–11

Disposal of non-current assets
Disposal of non-current assets are reported as other operating income and other operating expenses.

Other items affecting comparability
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Revenue
–
19
Costs of services provided
–60
–
Selling expenses
11
–
Administrative expenses
–13
–
Total
–62
19
Consist of:
   
-Croatia; revaluation of the prepaid revenue balance
–
19
-Sweden; provision for roaming dispute
–56
–
-Lithuania; adjustment of expected credit loss rate
18
–
-Incentive program; adjustment of performance level
–24
–

NOTE 4 TAXES
On April 1, 2019 Tele2 was notified that the Swedish Tax Agency rejects Tele2’s claim for a deduction of an exchange loss related to a conversion of a shareholder loan to Tele2 Kazakhstan from USD to Kazakh Tenge in connection to the establishment of Tele2’s current jointly owned company in Kazakhstan. The additional tax claim amounts to SEK 405 million and a tax surcharge and interest of SEK 178 million. Tele2 will appeal the decision and assesses it as probable that the appeal will be successful. No provision has been recognized.

NOTE 5 FINANCIAL ASSETS AND LIABILITIES
Financing
 
Interest-bearing liabilities
 
Mar 31, 2019
Dec 31, 2018
SEK million
Current
Non-current
Current
Non-current
Bonds SEK, Sweden
250
9,547
1,500
8,796
Bonds EUR, Sweden
–
10,432
–
10,284
Commercial papers, Sweden
2,100
–
4,491
–
Financial institutions
171
3,262
415
2,583
 
2,521
23,241
6,406
21,663
Provisions
291
1,576
224
1,471
Lease liability
1,134
4,673
2
14
Other liabilities
263
176
131
90
 
4,209
29,666
6,763
23,238
Total interest-bearing liabilities
 
33,875
 
30,001

On March 29, 2019 Tele2 completed the issuance of a SEK 1 billion private placement bond. The bond has a final maturity of 7 years with a floating coupon rate.
On December 17, 2018 Tele2 announced its SEK 2 billion loan agreement with the Nordic Investment Bank (NIB) for the financing of Tele2’s merger with Com Hem. The additional funding from NIB extends Tele2’s maturity profile and achieve further diversification of its funding. The additional funding was conditioned by the existing loan of EUR 130 million as of December 31, 2018 was cancelled. The cancellation took place in January 2019.

Tele2 - Interim Report January-March 2019 24 (35)
Transfer of right of payment of receivables
Tele2 Sweden transfers the right for payment of certain operating receivables to financial institutions. The receiving payment obtained from financial institutions, in relation to the transfer of right of payment of receivables for sold handsets and other equipment, has been netted against the receivables in the balance sheet and resulted in a positive effect on cash flow. The right of payment transferred to third parties without recourse or remaining credit exposure for Tele2 corresponded to SEK 587 (302) million for the three month period ended on March 31, 2019.

Classification and fair values
Tele2’s financial assets consist mainly of receivables from end customers, other operators and resellers as well as cash and cash equivalents. Tele2’s financial liabilities consist mainly of loans, bonds, lease liabilities and accounts payables. Classification of financial assets and liabilities including their fair value is presented below. During 2019, no transfers were made between the different levels in the fair value hierarchy and no significant changes were made to valuation techniques, inputs used or assumptions.

 
Mar 31, 2019
 
Assets and liabilities at fair value through profit/loss
       
SEK million
Derivative instruments designated for hedge accounting
Other instruments (level 3)
Assets at amortized cost
Financial liabilities at amortized cost
Total reported value
Fair value
Other financial assets
–
7
692
–
699
699
Accounts receivables
–
–
2,223
–
2,223
2,223
Other current receivables
99
–
2,336
–
2,435
2,435
Current investments
–
–
2
–
2
2
Cash and cash equivalents
–
–
914
–
914
914
Assets classified as held for sale
–
–
525
–
525
525
Total financial assets
99
7
6,692
–
6,798
6,798
             
Liabilities to financial institutions and similar liabilities
–
–
–
25,762
25,762
26,224
Other interest-bearing liabilities
153
12
–
6,081
6,246
6,248
Accounts payable
–
–
–
2,272
2,272
2,272
Other current liabilities
–
–
–
549
549
549
Liabilities directly associated with assets classified as held for sale
–
792
–
2,186
2,978
2,981
Total financial liabilities
153
804
–
36,850
37,807
38,274

 
Dec 31, 2018
 
Assets and liabilities at fair value through profit/loss
       
SEK million
Derivative instruments designated for hedge accounting
Other instruments (level 3)
Assets at amortized cost
Financial liabilities at amortized cost
Total
 reported
value
Fair
value
Other financial assets
–
7
898
–
905
905
Accounts receivables
–
–
2,509
–
2,509
2,509
Other current receivables
33
–
2,364
–
2,397
2,397
Current investments
–
–
2
–
2
2
Cash and cash equivalents
–
–
404
–
404
404
Assets classified as held for sale
–
–
2,659
–
2,659
2,659
Total financial assets
33
7
8,836
–
8,876
8,876
             
Liabilities to financial institutions and similar liabilities
–
–
–
28,069
28,069
28,136
Other interest-bearing liabilities
113
15
–
109
237
237
Accounts payable
–
–
–
3,004
3,004
3,004
Other current liabilities
–
–
–
689
689
689
Liabilities directly associated with assets classified as held for sale
–
764
–
1,361
2,125
2,113
Total financial liabilities
113
779
–
33,232
34,124
34,179

Tele2 - Interim Report January-March 2019 25 (35)
Changes in financial assets and liabilities valued at fair value through profit/loss in level 3 are presented below.

 
Mar 31, 2019
Dec 31, 2018
SEK million
Assets
Liabilities
Assets
Liabilities
As of January 1
7
779
1
456
Business combinations
–
–
6
–
Changes in fair value, earn-out Kazakhstan
–
28
–
332
Other contingent considerations:
       
-paid
–
–4
–
–12
-other changes
–
1
–
3
As of the end of the period
7
804
7
779

On December 31, 2018 the liability for the long-term incentive program (IoTP) for Tele2 employees of Tele2’s IoT business (internet-of-things), based on the estimated fair value of the program, amounted to SEK 4 million. The program was built on transferrable synthetic options. The fair value of the program was determined with support from an independent valuation institute. During Q1 2019, the incentive program was closed down by settlement in cash.
In 2016, a liability was reported for contingent deferred consideration to the former owners of Kombridge, Sweden. In Q1 2018, SEK 12 million of the consideration was settled. The estimated fair value of the deferred consideration amounted on March 31, 2019 to SEK 12 (December 31, 2018: 11) million. The fair value was calculated based on expected future cash flows at which a maximum turnout has been assumed.
Asianet, the former non-controlling shareholder of Tele2 Kazakhstan, has right to 18 percent of the economic interest in the jointly owned company with Kazakhtelecom in Kazakhstan. The estimated fair value of the deferred consideration amounted on March 31, 2019 to SEK 792 (December 31, 2018: 764) million. The fair value was calculated based on expected future cash flows of the jointly owned company. From December 31, 2018, and onwards, the earn-out liability has been classified as a liability associated with assets held for sale, please refer to Note 11.

NOTE 6 RELATED PARTIES
Tele2’s share of cash and cash equivalents in joint operations (Svenska UMTS-nät AB and Net4Mobility HB), for which Tele2 has limited disposal rights was included in the Group’s cash and cash equivalents and amounted at each closing date to the sums stated below.

SEK million
Mar 31, 2019
Dec 31, 2018
Cash and cash equivalents in joint operations
45
60

Kazakhtelecom has 49 percent of the voting rights in the jointly owned company in Kazakhstan. Tele2 and Kazakhtelecom sell and purchase telecommunication services to and from each other. Business relations and pricing between the parties are based on commercial terms and conditions. On December 28, 2018, Tele2 gave Kazakhtelecom notice to exercise Tele2’s put option on its shares in Tele2 Kazakhstan, see Note 11. From January 2, 2019 Tele2 has 25 percent ownership in T-Mobile Netherlands. Business relations and pricing between the parties are based on commercial terms and conditions. Apart from transactions with joint operations and previously described transactions, no other significant related party transactions were carried out during 2019. Other related parties are presented in Note 37 of the 2018 Annual Report.

Tele2 - Interim Report January-March 2019 26 (35)
NOTE 7 CONTINGENT LIABILITIES
SEK million
Mar 31, 2019
Dec 31, 2018
Tax deduction exchange loss, Sweden
583
–
Asset dismantling obligation, discontinued operation
–
159
Total contingent liabilities
583
159

On April 1, 2019 Tele2 was notifed that the Swedish Tax Agency rejects Tele2's claim for a deduction of an exchange loss, please refer to Note 4.

NOTE 8 EQUITY, NUMBER OF SHARES AND INCENTIVE PROGRAMS
Number of shares
 
Mar 31, 2019
Dec 31, 2018
Total number of shares
690,341,597
690,341,597
Number of treasury shares
–3,238,081
–3,338,529
Number of outstanding shares
687,103,516
687,003,068
Number of outstanding shares, weighted average
687,016,461
531,098,522
Number of shares after dilution
689,855,956
690,115,713
Number of shares after dilution, weighted average
690,092,899
534,505,915

As a result of share rights in the LTI 2016, LTI 2017 and LTI 2018 being exercised in Q1 2019, Tele2 delivered 100,448 B-shares in treasury shares to some of the participants in the program. This was an early vesting of the programs following the merger with Com Hem and the following reorganization, see information below.
In Q1 2019, 40,770 class A shares were reclassified into class B shares.
Changes in shares during previous year are stated in Note 25 in the 2018 Annual Report.

Outstanding share right programs

 
Mar 31, 2019
Dec 31, 2018
LTI 2018
1,290,616
1,482,420
LTI 2017
889,110
1,050,018
LTI 2016
572,714
801,040
Total outstanding share rights
2,752,440
3,333,478
of which will be settled in cash
–
220,833

All outstanding long-term incentive programs (LTI 2016, LTI 2017 and LTI 2018) are based on the same structure, except for that LTI 2018 does not have a ROCE measure, and additional information regarding the objective, conditions and requirements related to the LTI programs is stated in Note 33 of the 2018 Annual Report. During the first three months 2019, the total cost before tax for the longterm incentive programs (LTI) amounted to SEK 55 (8) million.

LTI 2016
The exercise of the share rights in LTI 2016 was conditional upon the fulfilment of certain retention and performance-based conditions, measured from April 1, 2016 until March 31, 2019. The outcome of these performance conditions was in accordance with below and the outstanding share rights of 572,714 expect to be exchanged for shares in Tele2 during Q2 2019.

 
Retention and performance-based conditions
Minimum hurdle (20%)
Stretch target (100%)
Performance outcome
Allotment
Series A
Total Shareholder Return Tele2 (TSR)
 
≥ 0%
103.9%
100%
Series B
Average normalized Return on Capital Employed (ROCE)
5.5%
8%
7.0%
68.0%
Series C
Total Shareholder Return Tele2 (TSR) compared to a peer group
> 0%
≥ 10%
75.8%
100%

Tele2 - Interim Report January-March 2019 27 (35)
LTI 2016–2018, reorganization as an effect of the Com Hem Merger
As a result of the Com Hem merger and the following reorganization, an early vesting was performed for some of the participants in LTI 2016, LTI 2017 and LTI 2018 programs. The exercise of the share rights was conditional upon the fulfilment of certain retention and performance-based conditions. To determine the number of share rights allowed for early vesting the actual outcome of the conditions as of the early vesting date has been compared with the conditions in the programs. If the conditions were fulfilled the number of share rights have been reduced proportionally with the remaining vesting period to the initial vesting period of three years. If the conditions were partly met the number of share rights have been reduced in proportion to the fulfillment level. The number of share rights exchanged in Q1 2019 for shares in Tele2 amounts to 100,448 share rights at a weighted average share price of SEK 125.13.

Dividend
Tele2’s Board of Directors has proposed a dividend of SEK 4.40 per share in respect of the financial year 2018 to be approved at the Annual General Meeting in May 2019 and to be paid in two equal tranches during 2019. This corresponds to a total of SEK 3,023 million.

NOTE 9 BUSINESS ACQUISITIONS AND DIVESTMENTS
Acquisitions and divestments of shares and participations affecting cash flow were as follows:

SEK million
2019
Jan 1-Mar 31
2018
Full year
Acquisitions
   
Com Hem, Sweden
–
–6,400
Mobile payment, Lithuania
–4
–7
Altlorenscheuerhof , Luxembourg repayment capital
–
1
Total acquisition of shares and participations
–4
–6,406
     
Divestments
   
Tele2 Netherlands
2,356
–
Total sale of shares and participations
2,356
–
TOTAL CASH FLOW EFFECT
2,352
–6,406

Acquisitions
T-Mobile, the Netherlands

The divestment of Tele2 Netherlands was closed on January 2, 2019, please refer to Note 11. As part of the divestment Tele2 acquired 25 percent of the shares in the new combined company T-Mobile Netherlands Holding BV. The fair value of the shares is estimated to SEK 6.9 billion. Due to its unusual complexity the purchase price allocation is still ongoing and is expected to be presented in the interim report for Q2 2019.
The transaction combines two mobile customer champions with complementary brands, technologies and customer bases. Based on current numbers the combined company has a revenue of around EUR 2 billion. Tele2’s 25 percent of the share is reported as an asso¬ciated company in the financial statements of Tele2.
Information about acquisitions made in 2018 is provided in Note 15 in the 2018 Annual Report.

Divestments
Please refer to Note 11 discontinued operations.

Tele2 - Interim Report January-March 2019 28 (35)
NOTE 10 CHANGES IN ACCOUNTING PRINCIPLES
IFRS 16 Leases
On January 1, 2019 Tele2 changed the accounting principles for leases, by applying IFRS 16 Leases. Tele2 has chosen to apply the modified retrospective approach in the standard and not restate prior periods. The qualitative effects of the transition to IFRS 16 are described in Note 35 in the 2018 Annual Report. The effects of applying IFRS 16 on the opening balance January 1, 2019 is presented below. The data exclude the Dutch operations since Tele2 considered the effects of IFRS 16 on Tele2 Netherlands to have no or negligible impact going forward. The weighted average incremental borrowing rate applied at the discounting of the lease liability at transition January 1, 2019 amounted to 1 percent for continued operations and 2 percent including discontinued operations.

Balance sheet

SEK million
Jan 1, 2019
Adjusted
IFRS 16
Effect
Dec 31, 2018 Reported
ASSETS
     
Goodwill
30,159
–
30,159
Other intangible assets
19,560
–44
19,604
Intangible assets
49,719
–44
49,763
       
Machinery and technical plant
7,998
–104
8,102
Other tangible assets
1,090
–
1,090
Tangible assets
9,088
–104
9,192
       
Right-of-use assets
6,076
6,076
–
Financial assets
1,028
–
1,028
Capitalized contract costs
373
–
373
Deferred tax assets
368
–
368
TOTAL NON-CURRENT ASSETS
66,652
5,928
60,724
       
Inventories
669
–
669
Current receivables
6,794
–31
6,825
Current investments
2
–
2
Cash and cash equivalents
404
–
404
TOTAL CURRENT ASSETS
7,869
–31
7,900
       
ASSETS CLASSIFIED AS HELD FOR SALE
14,588
568
14,020
TOTAL ASSETS
89,109
6,465
82,644
       
EQUITY AND LIABILITIES
     
Attributable to equity holders of the parent company
36,334
–
36,334
Non-controlling interest
28
–
28
TOTAL EQUITY
36,362
–
36,362
       
Interest-bearing liabilities
27,977
4,739
23,238
Non-interest-bearing liabilities
4,206
–
4,206
TOTAL NON-CURRENT LIABILITIES
32,183
4,739
27,444
       
Interest-bearing liabilities
7,921
1,158
6,763
Non-interest-bearing liabilities
8,088
–
8,088
TOTAL CURRENT LIABILITIES
16,009
1,158
14,851
       
LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE
4,555
568
3,987
TOTAL EQUITY AND LIABILITIES
89,109
6,465
82,644
       

Tele2 - Interim Report January-March 2019 29 (35)
The bridge between future minimum expenses according current IAS 17 Leases standard (please refer to Note 31 in the 2018 Annual Report) and the change in the lease liability for continuing operations due to adoption of IFRS 16 is presented below.

   
Total future lease expenses for operating leases (Note 31)
4,626
Adjustment for:
 
Discounting
–264
Not determined as leases according to IFRS 16 (mainly leased capacity)
–585
Short term leases
–114
Low value leases
–14
Extension options
2,248
Total adjustments
1,271
Change in lease liability due to adoption of IFRS 16
5,897

NOTE 11 DISCONTINUED OPERATIONS
Tele2 Kazakhstan
On December 28, 2018 Tele2 announced that Tele2 has given notice to exercise the put option stipulated in the jointly owned company in Kazakhstan between Tele2 and Kazakhtelecom. By serving the put option notice to Kazakhtelecom, Tele2 has initiated the sale process.
Tele2 owns 49 percent of the economic interest and 51 percent of the votes in the jointly owned company Tele2 Kazakhstan. The expected financial consideration to Tele2 will reflect a fully diluted economic interest of 31 percent, taking into account Asian et’s 18 percent earn-out. A shareholder loan from Tele2 to the jointly owned company is to be fully repaid at the time of the closing. On March 31, 2019 the loan amounted to KZT 84 billion (SEK 2.0 billion).
The put option price is based on a fair market value principle and will be determined through an agreed valuation process, based on standard methodology, including independent third-party advisors.
The previous put option obligation in Kazakhstan was in 2016 replaced with an earn-out obligation representing 18 percent eco-nomic interest in the jointly owned company in Kazakhstan. To cover for the estimated earn-out obligation, that is based on fair value, the earn-out obligation was on March 31, 2019 valued at SEK 792 (December 31, 2018: 764) million and reported as a financial liability with fair value changes reported as financial items in the income statement. The change in fair value on March 31, 2019 is related to a continuation of the positive trend in the Kazakhstan operation. The fair value estimate is sensitive to changes in key assumptions supporting the expected future cash flows for the jointly owned company in Kazakhstan. A deviation from the current assumptions regarding the fair value would impact the earn-out liability.
At the time of the acquisition of Tele2 Kazakhstan the com-pany had an existing interest free liability to the former owner Kazakhtelecom. On March 31, 2019 the reported debt amounted to SEK 32 (December 31, 2018: 30) million and the nominal value to SEK 285 (December 31, 2018: 279) million.
Closing is expected in approximately one quarter. Tele2 Kazakhstan is reported as discontinued operation .

Tele2 - Interim Report January-March 2019 30 (35)
Tele2 Netherlands
On December 15, 2017 Tele2 announced that Tele2 and Deutsche Telekom have agreed to combine Tele2 Netherlands and T-Mobile Netherlands. The divestment of Tele2 Netherlands was closed on January 2, 2019. The Dutch operation was sold for SEK 1.9 billion and 25 percent share in the combined company. The capital gain in Q1 2019 amounted to SEK 24 million, including costs for central support system for the Dutch operation and other transaction costs. In addition, the capital gain and taxes was affected positively with SEK 57 and 47 million respectively related to reversal of exchange rate differences previously reported in other comprehensive income, as a result of the divestment reversed over the income statement but with no effect on total equity or cash flow.

Net assets at the time of divestment
Assets, liabilities and contingent liabilities included in the divested operation in the Netherlands is stated below.
 
Netherlands
SEK million
(Jan 2, 2019)
Goodwill
1,015
Other intangible assets
1,293
Tangible assets
5,300
Financial assets
712
Capitalized contract costs
177
Inventories
156
Current receivables
2,085
Cash and cash equivalents
46
Non-current provisions
–233
Non-current non-interest-bearing liabilities
–88
Current non-interest-bearing liabilities
–1,639
Divested net assets
8,824
Capital gain, excluding sales costs
24
Sales price
8,848
Received shares in T-mobile, non-cash
–6,904
Price adjustments, non-cash
458
Less: cash in divested operations
–46
TOTAL CASH FLOW EFFECT
2,356

Income statement
All discontinued operations are stated below. Tele2 Netherlands was divested on January 2, 2019.
 
2019
2018
SEK million
Jan 1-Mar 31
Jan 1-Mar 31
     
Revenue
787
2,224
Cost of services provided and equipment sold
–468
–1,604
Gross profit
319
620
Selling expenses
–59
–514
Administrative expenses
–38
–273
Other operating income
2
2
Other operating expenses
–
–3
Operating profit/loss
224
–168
Interest income
1
3
Interest expenses
–30
–11
Other financial items
–28
–70
Profit/loss after financial items
167
–246
Income tax from the operation
–40
–24
NET PROFIT/LOSS FROM THE OPERATION
127
–270
     
Profit/loss on disposal of operation including sales costs and cumulative exchange rate gain
81
–3
-of which Netherlands
81
–3
     
Income tax from capital gain
47
–
-of which Netherlands
47
–
NET PROFIT/LOSS
255
–273
     
ATTRIBUTABLE TO
   
Equity holders of the parent company
199
–279
Non-controlling interests
56
6
NET PROFIT/LOSS
255
–273
     
Earnings per share (SEK)
0.29
–0.56
Earnings per share, after dilution (SEK)
0.29
–0.56


Tele2 - Interim Report January-March 2019 31 (35)
Balance sheet
Assets held for sale as of March 31, 2019 refer to Tele2 Kazakhstan (from December 31, 2018) and provisions for price adjustments and similar for the divestment of Tele2 Netherlands. As of December 31, 2018 assets held for sale refer to Tele2 Kazakhstan and Tele2 Netherlands (from December 31, 2017 to January 2, 2019).
SEK million
Mar 31, 2019
Dec 31, 2018
ASSETS
   
NON-CURRENT ASSETS
   
Goodwill
132
1,144
Other intangible assets
242
1,545
Intangible assets
374
2,689
Tangible assets
2,057
7,357
Right-of-use assets
663
–
Financial assets
8
720
Capitalized contract costs
–
177
Deferred tax assets
392
393
NON-CURRENT ASSETS
3,494
11,336
     
CURRENT ASSETS
   
Inventories
24
181
Current receivables
571
2,503
CURRENT ASSETS
595
2,684
     
ASSETS CLASSIFIED AS HELD FOR SALE
4,089
14,020
     
LIABILITIES
   
NON-CURRENT LIABILITIES
   
Interest-bearing liabilities
1,061
641
Non-interest-bearing liabilities
10
99
NON-CURRENT LIABILITIES
1,071
740
     
CURRENT LIABILITIES
   
Interest-bearing liabilities
1,322
813
Non-interest-bearing liabilities
891
2,434
CURRENT LIABILITIES
2,213
3,247
     
LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE
3,284
3,987
     

Cash flow statement
SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
Cash flow from operating activities
234
287
Cash flow from investing activities
2,323
–414
Cash flow from financing activities
–22
–
NET CHANGE IN CASH AND CASH EQUIVALENTS
2,535
–127

Tele2 - Interim Report January-March 2019 32 (35)
Non-IFRS measures

This report contains certain financial measures that are not defined by IFRS, but are used by Tele2 to assess the financial performance of the business. These measures are included in the report as they are considered important supplementary measures of operating performance and liquidity. They should not be considered a substitute to Tele2’s financial statements prepared in accordance with IFRS. Tele2’s definitions of these measures are described below, but other companies may calculate non-IFRS measures differently and these measures are therefore not always comparable to similar measures used by other companies.

EBITDA
Tele2 considers EBITDA to be relevant measure to present profitability aligned with industry standard.

EBITDA : Operating profit/loss before depreciation/amortization, impairment as well as results from shares in joint ventures and associated companies.

Underlying EBITDA and underlying EBITDA margin
Tele2 considers underlying EBITDA and underlying EBITDA margin to be relevant measures to present in order to illustrate the profitability of the underlying business, and as these are used by management to assess the performance of the business.

Underlying EBITDA : EBITDA excluding items affecting comparability.

Items affecting comparability : Disposals of non-current assets and transactions from strategic decisions, such as capital gains and losses from sales of operations, acquisition costs, integration costs due to acquisition or merger, restructuring programs from reorganizations as well as other items that affect comparability.

Underlying EBITDA margin : Underlying EBITDA in relation to revenue.

Underlying EBITDAaL
Tele2 considers underlying EBITDAaL to be a relevant measure of the business performance since it includes the cost of leased assets (depreciation and interest), which is not included in underlying EBITDA according to IFRS 16.

Underlying EBITDAaL : Underlying EBITDA as well as lease depreciation and lease interest costs according to IFRS 16.

Underlying EBITDA excluding IFRS 16
Tele2 considers underlying EBITDA excluding IFRS 16 to be a relevant measure to present during 2019 for comparability with 2018 and 2017 since IFRS 16 Leases has not been adopted retrospectively.

Underlying EBITDA excluding IFRS 16 : Underlying EBITDA applying IAS17 accounting standard for leases for all periods.

SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
CONTINUING OPERATIONS
   
Operating profit
1,104
900
Reverse:
   
Result from shares in joint ventures and associated companies
–10
–14
Depreciation/amortization
1,303
509
EBITDA
2,397
1,395
     
Reverse:
   
Items affecting comparability:
   
Acquisition costs
44
49
Integration costs
155
20
Disposal of non-current assets
1
15
Other items affecting comparability
62
–19
Total items affecting comparability
262
65
Underlying EBITDA
2,659
1,460
     
Lease depreciation (according to IFRS 16)
–303
–
Lease interest costs (according to IFRS 16)
–21
–
Underlying EBITDAaL
2,335
1,460
     
Underlying EBITDA
2,659
1,460
Adjustment to report lease according to IAS 17
–319
–
Underlying EBITDA excluding IFRS 16
2,340
1,460
     
Underlying EBITDA
2,659
1,460
in relation to:
   
Revenue
7,217
5,425
Reverse: items affecting comparability
–
–19
Revenue excluding items affecting comparability
7,217
5,406
Underlying EBITDA margin
37%
27%


Tele2 - Interim Report January-March 2019 33 (35)
Capex paid and capex
Tele2 considers capex paid relevant to present as it provides an indication of how much the company invests organically on intangible and tangible assets to maintain and expand its business. Tele2 believes that it is relevant to present capex to provide a view on how much Tele2 invests organically in intangible and tangible assets as well as on right-of-use assets (lease) to maintain and grow its business which is not dependent on the timing of cash payments.

Capex paid : Cash paid for the additions to intangible and tangible assets net of cash proceeds from sales of intangible and tangible assets.

Capex : Additions to intangible assets, tangible assets and right-of-use assets (lease) that are capitalized on the balance sheet.

SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
TOTAL OPERATIONS
   
Additions to intangible and tangible assets
–1,671
–849
Sale of intangible and tangible assets
–
9
Capex paid
–1,671
–840
This period’s unpaid capex and reversal of paid capex from previous periods
859
250
Reverse received payment of sold intangible and tangible assets
–
–9
Capex in intangible and tangible assets
–812
–599
Additions to right-of-use assets
–356
–
Capex
–1,168
–599
     
CONTINUING OPERATIONS
   
Additions to intangible and tangible assets
–1,638
–434
Sale of intangible and tangible assets
–
8
Capex paid
–1,638
–426
This period’s unpaid capex and reversal of paid capex from previous periods
864
61
Reverse received payment of sold intangible and tangible assets
–
–8
Capex in intangible and tangible assets
–774
–373
Additions to right-of-use assets
–258
–
Capex
–1,032
–373

Equity free cash flow
Tele2 considers equity free cash flow to be relevant to present as it provides a view of funds generated from operating activities which also includes investments in intangible and tangible assets. Management believes that equity free cash flow is meaningful to investors because it is the measure of the Group’s funds available for acquisition related payments, dividends to shareholders, share repurchases and debt repayment.

Equity free cash flow : Cash flow from operating activities less capex paid and amortization of lease liabilities.

SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
TOTAL OPERATIONS
   
Cash flow from operating activities
2,490
908
Capex paid
–1,671
–840
Cash flow after capex paid
819
68
Amortization of lease liabilities
–382
–
Equity free cash flow (EFCF)
437
68
     
CONTINUING OPERATIONS
   
Cash flow from operating activities
2,256
621
Capex paid
–1,638
–426
Cash flow after capex paid
618
195
Amortization of lease liabilities
–377
–
Equity free cash flow (EFCF)
241
195


Tele2 - Interim Report January-March 2019 34 (35)
Operating cash flow
Tele2 considers operating cash flow a relevant measure to present as it gives an indication of the profitability of the underlying business while also taking into account the investments needed to maintain and grow the business.

Operating cash flow : Underlying EBITDAaL less capex paid.

SEK million
2019
Jan 1-Mar 31
2018
Jan 1-Mar 31
CONTINUING OPERATIONS
   
Underlying EBITDAaL
2,335
1,460
Capex paid
–1,638
–426
Operating cash flow (OCF)
697
1,034

Net debt and economic net debt
Tele2 believes that net debt is relevant to present as it is useful to illustrate the indebtedness, financial flexibility, and capital structure. Furthermore, economic net debt is considered relevant as it excludes lease liabilities, liabilities to Kazakhtelecom, loan guaranteed by Kazakhtelecom and the liability for the earn-out obligation in Kazakhstan, and thereby taking into account the specific contractual arrangements in the Kazakh business.

Net debt : Interest-bearing non-current and current liabilities excluding equipment financing, provisions, less cash and cash equivalents, current investments, restricted cash and derivatives.

Economic net debt : Net debt excluding lease liabilities, liabilities to Kazakhtelecom, liability for earn-out obligation in Kazakhstan and loan guaranteed by Kazakhtelecom.

SEK million
Mar 31, 2019
Dec 31, 2018
Interest-bearing non-current liabilities
29,750
23,238
Interest-bearing current liabilities
4,678
6,763
Excluding equipment financing
–126
–
Excluding provisions
–2,420
–1,695
Cash & cash equivalents, current investments and restricted funds
–916
–406
Derivatives
–99
–33
Net debt for assets classified as held for sale
1,703
1,013
Net debt
32,570
28,880
Excluding:
   
Lease liabilities
–6,480
–16
Liabilities to Kazakhtelecom
–32
–30
Liabilities for earn-out obligation Kazakhstan
–792
–764
Loan guaranteed by Kazakhtelecom
–208
–221
Economic net debt
25,058
27,849

Organic
Tele2 believes that organic growth rates are relevant to present as they exclude effects from currency movements but include effects from divestments and acquisitions as if these occured on the first day of each reporting period, and are therefore providing an indication of the underlying performance.

Organic growth rates : Calculated at constant currency, meaning that comparative figures have been recalculated using the currency rates for the current period, but including effects from divestments and acquisitions as if these occured on the first day of each reporting period.
Reconciliation of pro forma figures are presented in an excel document (Tele2-Q1-2019-financials) on Tele2’s website www.tele2.com.

Tele2 - Interim Report January-March 2019 35 (35)

 

 

FIRST QUARTER 2019 April 24, 2019 Tele2 AB
 
 
Group highlights - Q1 2019 SEK billion Q1 2019 % change organic Revenue 7.2 -1% End-user service revenue 5.3 0% Underlying EBITDA ex. IFRS 16 2.3 +8% Capex ex. spectrum and leases 0.6 2 Organic is constant currencies and including Com Hem pro forma Comments o Organic growth of end-user service revenue of 0%, including - Mobile EUSR +3% - EUSR -3% TELE2
 
 
Tele2 is becoming a true integrated challenger Drive FMC in Sweden B2C o Launch of Com Hem mobile in February o Increasing penetration of FMC bundle benefits Sweden B2B turnaround o Continued customer growth o Setting up B2B management and sales incentive structure to align with strategy o Continued restructuring to focus on higher-margin network based ICT services Build on the momentum in the Baltics o Sustained momentum with 7% growth in mobile end-user service revenue and 16% in underlying EBITDA excluding IFRS 16 Cost transformation o Cost synergies starting to materialize with SEK 50 million achieved in Q1 o Annualized run-rate of SEK 300 million at the end of Q1 3 TELE2
 
 
Slide 4 Growth and cost initiatives drive cash flow 1 Low-single digit end-user service revenue growth - SEK 450m of revenue synergies 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-single digit growth in underlying EBITDA excluding IFRS 16 - SEK 900m of cost synergies Driven by front-loaded synergies in 2019 and a mix of cost reduction and revenue growth mid-term 3 Capex - Low capital intensity compared to industry over investment cycle SEK 2.9-3.2bn in 2019, and SEK 3.0-3.5bn/year in the mid-term, excluding spectrum and leases, as we roll out 5G and Remote-PHY 4 Maintain leverage at 2.5-3.0x Growth in underlying EBITDAaL and cash from asset sales create room to re-lever and distribute additional cash to shareholders Shareholder Remuneration Ordinary dividend up 10% to SEK 4.40/share (SEK 3.0bn) Additional remuneration from asset sales to be announced FY2018 Starting Point - pro forma End-user service revenue: SEK 21.4bn Underlying EBITDA excluding IFRS 16: SEK 9.0bn Capex: SEK 2.8bn excluding spectrum and leases Leverage: 2.8x economic net debt/underlying EBITDAaL 4 TELE2
 
 
Slide 5 Sweden TELE2
 
 
Sweden Consumer - Operational highlights RGUs & net adds - core and legacy services (thousands, pro forma) +3 652 -2 790 +12 1,796 -7 -74 381 432 1,180 +10 654 +1 801 +11 1,794 -2 -31 369 420 1,173 +24 655 +1 814 +13 1,804 +10 -25 351 411 1,175 +29 658 +3 827 +13 1,817 +13 -84 324 399 1,130 +20 661 +3 839 +12 1,822 +5 -47 313 388 1,105 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Core: Mobile Postpaid Fixed Broadband Digital TV Cable & Fiber Legacy: Mobile Prepaid DTT TV Fixed Tele & DSL ASPU year-on-year growth (%, pro forma) 5% 3% 1% -1% -3% -5% 1.8% 1.3% -2.0% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Moile Postpaid Fixed Broadband Digital TV Cable & Fiber Q1 highlights - Positive net adds in all core services, driven mainly by Comviq mobile postpaid and fixed broadband on both Com Hem and Boxer brands - Total mobile ASPU up 2.5% due to pre to postpaid migration and postpaid ASPU growth of +1.3%, driven by upsell to larger data buckets and Unlimited - Fixed broadband ASPU growth of +1.8% driven by upsell to higher speeds. Group agreements with some negative effect on Digital TV Cable and Fiber ASPU but positive effect on churn 6 TELE2
 
 
Sweden Consumer segment - Financials End-user service revenue (SEK million, pro forma, year-on-year growth %) +6% 472 +1% 571 +14% 1,152 +4% 128 384 300 +6% 479 +1% 595 +12% 1,168 +4% 124 377 294 +4% 476 +1 600 +11% 1,189 +3% 117 365 300 +5% 474 +0% 614 +10% 1,189 +4% 115 352 289 +3% 466 -1% 618 +8% 1,179 +2% 106 341 278 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Core: Mobile Postpaid Fixed Broadband Digital TV Cable & Fiber Legacy: Mobile Prepaid DTT TV Fixed Tele & DSL Underlying EBITDA ex. IFRS16 and margin (SEK million, pro forma) +6% 1,389 1,438 1,507 1,430 1,469 36% 36% 39% 35% 39% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q1 highlights - Core services growing +3%, offset by -11% decline in legacy services - Stable end-user service revenue within Mobile. Fixed declining 2% driven by continued pressure within legacy services - Underlying EBITDA growth excluding IFRS 16 of +6%, as synergies start to materialize 7 TELE2
 
 
Sweden Business - Operational highlights Mobile RGUs (thousands, pro forma) +5% 855 868 881 889 896 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Mobile ASPU (SEK, pro forma) -6% 188 184 180 183 177 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 End-user service revenue (SEK million, pro forma, year-on-year growth %) -7% 261 +2% 325 -9% 472 -10% -5% 264 0% 309 -14% 475 -1% -2% 246 -4% 306 -10% 473 +4% -1% 280 +4% 298 -11% 485 +4% -2% 264 +1% 295 -9% 475 +1% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Mobile Fixed Solutions Q1 highlights - Increase in mobile RGU base of 5% as customer wins continue; new or extended contracts in the quarter include Rejlers, GDL Logistics, NCC, Toshiba and Linkoping University - Price competition still having an effect on ASPU Continued efforts to achieve end-user service revenue stabilization 8 TELE2
 
 
Sweden Business segment - Financials Revenue (SEK million, pro forma) -2% 145 467 1,058 140 421 1,048 152 352 1,025 136 504 1,063 167 446 1,034 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 End-user Equipment Wholesale Operator Underlying EBITDA ex. IFRS16 and margin (SEK million, pro forma) +1% 372 308 294 285 439 360 345 297 374 306 20% 19% 26% 19% 20% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 EBITDA EBITDA ex. Wholesale EBITDA margin ex. Wholesale Q1 highlights - Slightly negative growth in total revenue due to declines in end-user service revenue and equipment revenue - Underlying EBITDA growth of 1% excluding IFRS 16 - Refining business scope to achieve profitable growth 9 TELE2
 
 
Sweden overview Total end-user service revenue (SEK million, pro forma) -1% 4,249 4,269 4,249 4,273 4,189 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDA ex. IFRS 16 and margin (SEK million, pro forma) +5% 1,761 1,732 1,946 1,775 1,843 32% 31% 36% 30% 34% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDAaL - Capex* and cash conversion, rolling 12m (SEK million, pro forma) 5,273 5,325 5,417 5,348 5,315 75% 76% 76% 74% 73% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q1 highlights - Underlying EBITDA growth excluding IFRS 16 of 5% driven primarily by cost synergies within Consumer - Stable cash generation when adjusting for the payment of the 700 MHz spectrum - Rolling 12 months cash conversion of 73% *Capex ex. spectrum and leases Cash conversion = (Underlying EBITDAaL - Capex) / Underlying EBITDAaL 10 TELE2
 
 
International TELE2
 
 
Baltics - Operational highlights Mobile RGUs +1% Q1 '18 Q1 '19 ASPU development +6% Q1 '18 Q1 '19 Brand campaign TELE2 POWER PACK Daugiau vertes, todel uztenka vieno NAUIAUSIA IRANGA GB+ NERIBOTI POKALBIAI TELE2 LAISVAS INTERNETAS ISMANUS SKAMBUCIU Q1 highlights - ASPU growth in all three markets led by Lithuania - RGU growth, despite challenges in Estonia, as consumer small-screen and mobile broadband more than offset prepaid decline Organic Adjusted for local currency and M&A 12 TELE2
 
 
Baltics - Financials Mobile end-user service revenue (SEK million) +7% 585 639 650 654 655 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDA ex. IFRS 16 and margin (SEK million) +16% 316 366 402 374 386 31% 33% 35% 31% 35% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDAaL - Capex* and cash conversion, rolling 12m (SEK million) 1,008 1,045 1,079 1,115 1,166 78% 78% 77% 76% 77% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q1 highlights - Mobile end-user service revenue growth driven by both volume and ASPU - Lithuania growing mobile end-user service revenue by 11 % and underlying EBITDA excluding IFRS 16 by 25% - Growth in underlying EBITDA excluding IFRS 16 with all markets contributing Organic Adjusted for local currency and M&A *Capex ex. spectrum and leases Cash conversion = (Underlying EBITDAaL - Capex) / Underlying EBITDAaL 13 TELE2
 
 
Kazakhstan (discontinued) - Financials Mobile end-user service revenue (SEK million) +22% 534 613 628 650 632 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDA ex. IFRS 16 and margin (SEK million) +60% 202 264 273 314 312 29% 34% 34% 39% 40% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Underlying EBITDAaL - Capex* and cash conversion, rolling 12m (SEK million) 314 492 638 779 881 43% 59% 68% 74% 76% Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q1 highlights - Mobile end-user service revenue driven by 19% ASPU increase and 2% increase in RGUs - Margin expansion driven by continued growth of mobile end-user service revenue and strong cost efficiency - Shareholder loan repayments of KZT 5.6bn (SEK 134m) in Q1 resulting in KZT 84bn (SEK 2.0bn) outstanding at year-end - Divestment process on track to close at mid-year Organic Adjusted for local currency and M&A *Capex ex. spectrum and leases Cash conversion = (Underlying EBITDAaL - Capex) / Underlying EBITDAaL 14 TELE2
 
 
Financial Overview TELE2
 
 
Accounting changes Somewhat increased scope of Items affecting comparability to make Underlying EBITDA cleaner We add "reported" EBITDA to align with the industry P & L with IFRS 16 Revenue Underlying EBITDA +/- Items affecting comparability = EBITDA - Depreciation & Amortization of which RoU asset depreciation +/- JVs and associated companies = Operating profit - Financial items of which lease interest = Profit after financial items ... Underlying EBITDA - Lease costs as booked before IFRS 16 = Underlying EBITDA excluding IFRS 16 Underlying EBITDA - RoU asset depreciation - Lease interest = Underlying EBITDAaL We will use this measure for comparability during 2019 We intend to keep this measure in coming years, and use it for leverage calculation Note: Underlying EBITDA excluding IFRS 16 and Underlying EBITDAaL are almost equal, but there is a small difference since lease interest is front-end loaded over the contract period. In addition, Underlying EBITDA excluding IFRS 16 will be reported separately for Sweden Consumer and Sweden Business, but Underlying EBITDAaL will only be provided for Sweden as a whole. RoU asset = Right-of-Use asset, i.e. leased assets 16 TELE2
 
 
Group results Q1 2019 SEK million 1 Q1 2019 Q1 2018 Revenue 7,217 5,425 Underlying EBITDA 2,659 1,460 Margin (%) 32% 27% Items affecting comparability 2 -262 -65 D&A 3 -1,303 -509 JVs and associated companies 4 10 14 Operating profit 1,104 900 Interest income/expenses -109 -69 Other financial items 5 -13 Taxes -231 -196 Net profit, continuing operations 769 622 Discontinued operations 255 -273 Non-controlling interests -56 -6 Net profit, equity holders of parent 5 968 343 Comments 1 IFRS 16 applied from Ql 2019, not retrospectively 2 Items affecting comparability includes integration cost of SEK 155m for the Com Hem merger 3 D&A includes SEK 299m amortization of surplus value from acquisitions and SEK 303m depreciation of right-of-use assets (leased assets) 4 Including preliminary share of result from the merged Dutch business. Purchase price allocation not finalized 5 Significant profit improvement following the Group's restructuring over the past 12 months 17 TELE2
 
 
Group cash flow Q1 2019 SEK million 1 Q1 2019 Q1 2018 Underlying EBITDA, continuing op. 2,659 1,460 Items affecting comp., continuing op. 2 -262 -65 EBITDA continuing operations 2,397 1,395 EBITDA discontinued operations 434 190 Amortization of lease liabilities 3 -382 - Capex paid 4 -1,671 -840 Changes in working capital 116 -467 Financial items paid / received -130 -88 Income taxes paid -293 -145 Other cash items -34 23 Equity free cash flow, total operations 437 68 Of which continuing operations 241 195 Of which discontinued operations 5 196 -127 Comments 1 IFRS 16 applied from Q1 2019, not retrospectively 2 Including SEK 199m related to the Com Hem merger, of which SEK 155m integration costs 3 Amortization of lease liabilities, offsets the increase in EBITDA driven by IFRS 16 4 Capex paid includes SEK 799m of payments related to spectrum capex, mainly 700 MHz in Sweden 5 Including Kazakhstan for Q1 2019 and both Netherlands and Kazakhstan for Q1 2018 18 TELE2
 
 
Synergy update Benefit in quarter Run-rate Target (Annualized at end of quarter) (Run-rate at end of year 3) Cost synergies 50 300 900 (SEK million) Revenue synergies Important first steps taken towards target of SEK 450m in 5 years, including Com Hem mobile launch and FMC benefits Drivers - Cost synergies driven by reductions in FTEs and consultants - Integration costs of SEK 155m incurred in the quarter, with a total of SEK 365m having been incurred since the start of the integration 19 TELE2
 
 
Financial guidance - unchanged End-user service revenue Underlying EBITDAaL CAPEX (SEK bn excl. spectrum and leased assets) Mid-term ambition Low-single digit growth Mid-single digit growth 3.0-3.5 2019 Around 2018 level Mid-single digit growth* 2.9-3.2 o Ramp-up of initiatives in 2019 in a low-growth environment o FMC cross-sell and monetization of customer satisfaction to drive growth in mid-term o Growth in 2019 mainly driven by cost reductions o Growth in the mid-term driven by a combination of revenue growth and cost reduction o Entering next phase in capex cycle with roll-out of 5G and Remote-PHY, starting towards the end of 2019 20 Based on continuing operations in constant currencies *Underlying EBITDA ex. IFRS 16 TELE2
 
 
Leverage at 2.6x Economic net debt to underlying EBITDAaL (SEK billion, as of 31 March 2019) Leverage 2.6x 2.8x 2.6x Net debt 25.1 6.5 1.0 32.6 -2.6 30.0 Economic net debt Lease debt Kazakhstan debt Net debt Uncommitted lease debt Net debt ex. uncommitted lease debt EBITDA rolling 12 months 9.8 1.4 0.6 11.8 11.8 Underlying EBITDAaL Lease cost reversal Kazakhstan partner (51%) Underlying EBITDA Underlying EBITDA Comments o Economic net debt to underlying EBITDAaL at 2.6x end March, down from 2.8x at end of 2018 due to cash flow generation and proceeds from sale of Dutch business o Expect to stay within leverage target of 2.5x-3.0x after distribution of proceeds from sale of Kazakh and Dutch businesses o Net debt / underlying EBITDA (including lease debt of SEK 6.5bn) at 2.8x end of March. Excluding uncommitted portion of lease debt (2.6bn), net debt / underlying EBITDA would also been at 2.6 21 Economic net debt excludes lease liabilities, liabilities to Kazakhtelecom, loan guaranteed by Kazakhtelecom and liability for earn-out obligation in Kazakhstan TELE2
 
 
To conclude... TELE2
 
 
Key priorities moving forward Reignite EuS Revenue growth in Sweden o B2C: Com Hem Mobile and FMC penetration in the customer base o B2B: High margin OnNet growth Structural cost savings o Cost synergies of SEK 900m within 3 years o Investigate further initiatives Build on the momentum in the Baltics Close the sale of Kazakhstan TELE2
 
 
THANK YOU! TELE2
 
 
 

 
Income statement

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
 
2016
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
 
Full-year
Full-year
Full-year
Full-year
                                     
CONTINUING OPERATIONS
                                   
Revenues
 
5,164
5,292
5,296
5,714
5,425
5,560
5,597
7,122
7,217
       
18,131
21,466
23,704
 
Cost of services provided and equipment sold
 
-2,884
-2,909
-2,833
-3,277
-3,060
-3,153
-3,089
-4,033
-4,250
       
-9,616
-11,903
-13,335
 
Gross profit
 
2,280
2,383
2,463
2,437
2,365
2,407
2,508
3,089
2,967
       
8,515
9,563
10,369
 
                                     
Selling expenses
 
-904
-977
-910
-1,101
-932
-937
-832
-1,246
-1,133
       
-3,473
-3,892
-3,947
 
Administrative expenses
 
-538
-562
-521
-647
-504
-508
-606
-779
-716
       
-1,972
-2,268
-2,397
 
Result from shares in joint ventures and associated companies
 
0
1
0
-1
14
0
-1
-4
10
       
0
0
9
 
Other operating income
 
25
22
40
41
57
47
40
52
75
       
135
128
196
 
Other operating expenses
 
-13
-6
-18
-25
-100
-131
-87
-162
-99
       
-72
-62
-480
 
Operating profit
 
850
861
1,054
704
900
878
1,022
950
1,104
       
3,133
3,469
3,750
 
                                     
Interest income
 
2
2
4
3
7
0
4
4
6
       
11
11
15
 
Interest expenses
 
-82
-78
-73
-81
-76
-85
-66
-100
-115
       
-333
-314
-327
 
Other financial items
 
5
-7
1
0
-13
-28
-7
-18
5
       
-20
-1
-66
 
Profit after financial items
 
775
778
986
626
818
765
953
836
1,000
       
2,791
3,165
3,372
 
                                     
Income tax
 
-193
-192
-184
-165
-196
-165
-226
-1,175
-231
       
-1,010
-734
-1,762
 
NET PROFIT/LOSS FROM CONTINUING OPERATIONS
 
582
586
802
461
622
600
727
-339
769
       
1,781
2,431
1,610
 
                                     
DISCONTINUED OPERATIONS
                                   
Net profit/loss from discontinued operations
 
-214
-346
-238
-1,413
-273
-157
-199
10
255
       
-4,362
-2,211
-619
 
NET PROFIT/LOSS
 
368
240
564
-952
349
443
528
-329
1,024
       
-2,581
220
991
 
                                     
ATTRIBUTABLE TO
                                   
Equity holders of the parent company
 
410
259
566
-1,043
343
411
504
-405
968
       
-2,269
192
853
 
Non-controlling interests
 
-42
-19
-2
91
6
32
24
76
56
       
-312
28
138
 
NET PROFIT/LOSS
 
368
240
564
-952
349
443
528
-329
1,024
       
-2,581
220
991
 
                                     
Earnings per share (SEK)
 
0.81
0.53
1.12
-2.08
0.68
0.82
1.00
-0.89
1.41
       
-5.02
0.38
1.61
 
Earnings per share, after dilution (SEK)
 
0.80
0.53
1.12
-2.08
0.68
0.81
0.99
-0.89
1.40
       
-5.02
0.37
1.59
 
                                     
FROM CONTINUING OPERATIONS
                                   
ATTRIBUTABLE TO
                                   
Equity holders of the parent company
 
582
586
802
461
622
600
727
-339
769
       
1,781
2,431
1,610
 
Non-controlling interests
 
0
0
0
0
0
0
0
0
0
       
0
0
0
 
NET PROFIT/LOSS
 
582
586
802
461
622
600
727
-339
769
       
1,781
2,431
1,610
 
                                     
Earnings per share (SEK)
 
1.16
1.17
1.58
0.97
1.24
1.19
1.44
-0.84
1.12
       
3.94
4.88
3.03
 
Earnings per share, after dilution (SEK)
 
1.15
1.17
1.58
0.97
1.24
1.18
1.43
-0.84
1.11
       
3.94
4.87
3.01
 


Balance sheet
   
2016
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
SEK million
Comments
Dec
31,
Mar 31,
Jun
30,
Sep
30,
Dec
31,
Mar 31,
Jun
 30,
Sep
30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec 31,
                             
ASSETS
                           
NON-CURRENT ASSETS
                           
Goodwill
 
7,598
7,594
7,641
7,565
5,517
5,647
5,683
5,638
30,159
30,198
     
Other intangible assets
 
5,772
5,665
5,556
5,363
4,044
4,074
4,075
4,002
19,604
19,421
     
Intangible assets
 
13,370
13,259
13,197
12,928
9,561
9,721
9,758
9,640
49,763
49,619
     
Tangible assets
 
14,329
14,249
14,113
13,344
8,692
8,710
8,698
8,375
9,192
9,035
     
Right-of-use assets
 
0
0
0
0
0
0
0
0
0
6,048
     
Shares in joint ventures and associated companies
 
9
9
9
9
16
14
11
18
13
7,071
     
Other financial assets
 
1,551
1,398
1,425
1,291
778
723
928
959
1,015
798
     
Capitalized contract costs
 
617
596
597
563
380
347
327
324
373
396
     
Deferred tax assets
 
1,766
1,721
1,697
1,441
1,911
1,927
1,864
1,732
368
453
     
NON-CURRENT ASSETS
 
31,642
31,232
31,038
29,576
21,338
21,442
21,586
21,048
60,724
73,420
     
                             
CURRENT ASSETS
                           
Inventories
 
668
930
869
837
689
852
797
609
669
827
     
Current receivables
 
8,554
8,471
8,204
7,899
6,726
6,754
6,766
6,742
6,825
6,731
     
Current investments
 
21
7
3
3
3
3
70
3
2
2
     
Cash and cash equivalents
 
257
752
318
1,068
802
441
248
1,212
404
914
     
CURRENT ASSETS
 
9,500
10,160
9,394
9,807
8,220
8,050
7,881
8,566
7,900
8,474
     
                             
ASSETS CLASSIFIED AS HELD FOR SALE
 
0
0
0
616
10,166
10,464
10,530
10,380
14,020
4,089
     
                             
ASSETS
 
41,142
41,392
40,432
39,999
39,724
39,956
39,997
39,994
82,644
85,983
     
                             
EQUITY AND LIABILITIES
                           
EQUITY
                           
Attributable to equity holders of the parent company
 
18,773
19,284
16,968
17,206
17,246
18,187
16,782
17,037
36,334
37,405
     
Non-controlling interests
 
-300
-360
-349
-316
-114
-117
-80
-48
28
86
     
EQUITY
 
18,473
18,924
16,619
16,890
17,132
18,070
16,702
16,989
36,362
37,491
     
                             
NON-CURRENT LIABILITIES
                           
Interest-bearing liabilities
 
8,954
10,474
11,572
11,639
11,565
9,736
11,044
11,097
23,238
29,666
     
Non-interest-bearing liabilities
 
913
891
882
918
998
1,006
988
987
4,206
4,255
     
NON-CURRENT LIABILITIES
 
9,867
11,365
12,454
12,557
12,563
10,742
12,032
12,084
27,444
33,921
     
                             
CURRENT LIABILITIES
                           
Interest-bearing liabilities
 
3,388
2,197
2,639
2,026
820
2,431
2,607
2,621
6,763
4,209
     
Non-interest-bearing liabilities
 
9,414
8,906
8,720
8,248
7,074
6,622
6,536
6,227
8,088
7,078
     
CURRENT LIABILITIES
 
12,802
11,103
11,359
10,274
7,894
9,053
9,143
8,848
14,851
11,287
     
                             
LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE
 
0
0
0
278
2,135
2,091
2,120
2,073
3,987
3,284
     
                             
EQUITY AND LIABILITIES
 
41,142
41,392
40,432
39,999
39,724
39,956
39,997
39,994
82,644
85,983
     
                             
                             
Net debt
 
10,628
10,544
12,445
11,338
10,474
10,585
12,205
11,190
28,880
32,570
     
Economic net debt
 
10,389
10,266
11,980
10,659
9,753
9,775
11,341
10,205
27,849
25,058
     

Cash flow statement

(Total operations)
                                   
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
OPERATING ACTIVITIES
                                   
Operating profit from continuing operations
 
850
861
1,054
704
900
878
1,022
950
1,104
         
3,469
3,750
 
Operating profit/loss from discontinued operations
 
-172
-238
-48
-1,051
-171
-64
3
35
305
         
-1,509
-197
 
Operating profit/loss
 
678
623
1,006
-347
729
814
1,025
985
1,409
         
1,960
3,553
 
                                     
Adjustments for non-cash items in operating profit/loss
 
938
914
866
1,890
879
883
1,012
1,202
1,388
         
4,608
3,976
 
Financial items paid/received
 
-8
-145
0
-133
-88
-116
-56
-343
-130
         
-286
-603
 
Taxes paid
 
-106
-133
-120
-126
-145
-280
-97
-121
-293
         
-485
-643
 
Cash flow from operations before changes in working capital
 
1,502
1,259
1,752
1,284
1,375
1,301
1,884
1,723
2,374
         
5,797
6,283
 
Changes in working capital
 
-478
415
207
-209
-467
-115
-33
-508
116
         
-65
-1,123
 
CASH FLOW FROM OPERATING ACTIVITIES
 
1,024
1,674
1,959
1,075
908
1,186
1,851
1,215
2,490
         
5,732
5,160
 
                                     
INVESTING ACTIVITIES
                                   
Capex paid
 
-846
-854
-669
-844
-840
-675
-759
-1,129
-1,671
         
-3,213
-3,403
 
Cash flow after capex paid
 
178
820
1,290
231
68
511
1,092
86
819
         
2,519
1,757
 
Acquisition and sale of shares and participations
 
0
-8
0
669
1
0
-7
-6,400
2,352
         
661
-6,406
 
Other financial assets
 
16
4
0
0
0
-66
66
0
0
         
20
0
 
Cash flow from investing activities
 
-830
-858
-669
-175
-839
-741
-700
-7,529
681
         
-2,532
-9,809
 
CASH FLOW AFTER INVESTING ACTIVITIES
 
194
816
1,290
900
69
445
1,151
-6,314
3,171
         
3,200
-4,649
 
                                     
FINANCING ACTIVITIES
                                   
Proceeds from loans
 
1,500
3,020
-332
-1,192
66
1,393
-168
16,336
1,756
         
2,996
17,627
 
Repayments of loans
 
-1,213
-1,631
-194
-4
-518
-28
-15
-10,828
-4,637
         
-3,042
-11,389
 
Dividends
 
0
-2,629
0
0
0
-2,013
0
0
0
         
-2,629
-2,013
 
Acquisition of non-controlling interests
 
0
0
0
0
0
0
0
0
0
         
0
0
 
New share issues
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Repurchase of own shares
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Other financing activities
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Cash flow from financing activities
 
287
-1,240
-526
-1,196
-452
-648
-183
5,508
-2,881
         
-2,675
4,225
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
 
481
-424
764
-296
-383
-203
968
-806
290
         
525
-424
 
                                     
Cash and cash equivalents at beginning of period
 
257
752
318
1,068
802
441
248
1,212
404
         
257
802
 
Exchange rate differences in cash and cash equivalents
 
14
-10
-14
30
22
10
-4
-2
220
         
20
26
 
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
 
752
318
1,068
802
441
248
1,212
404
914
         
802
404
 
                                     
                                     
CASH FLOW RECONCILIATION
                                   
Underlying EBITDA, continuing operations
 
1,455
1,423
1,610
1,397
1,460
1,523
1,725
1,925
2,659
         
5,885
6,633
 
Items affecting comparability, continuing operations
 
-98
-57
-40
-135
-65
-128
-170
-232
-262
         
-330
-595
 
EBITDA, continuing operations
 
1,357
1,366
1,570
1,262
1,395
1,395
1,555
1,693
2,397
         
5,555
6,038
 
EBITDA discontinued operations
 
237
161
327
636
190
298
460
451
434
         
1,361
1,399
 
Amortization of lease liabilities
 
0
0
0
0
0
0
0
0
-382
         
0
0
 
Capex paid
 
-846
-854
-669
-844
-840
-675
-759
-1,129
-1,671
         
-3,213
-3,403
 
Changes in working capital
 
-478
415
207
-209
-467
-115
-33
-508
116
         
-65
-1,123
 
Financial items paid/received
 
-8
-145
0
-133
-88
-116
-56
-343
-130
         
-286
-603
 
Taxes paid
 
-106
-133
-120
-126
-145
-280
-97
-121
-293
         
-485
-643
 
Other cash items
 
22
10
-25
-355
23
4
22
43
-34
         
-348
92
 
Equity free cash flow
 
178
820
1,290
231
68
511
1,092
86
437
         
2,519
1,757
 
of which Equity free cash flow, continuing operations
 
337
1,002
1,263
515
195
462
1,074
341
241
         
3,117
2,072
 
of which Equity free cash flow, continuing operations, rolling 12 months
       
3,117
2,975
2,435
2,246
2,072
2,118
         
3,117
2,072
 


Tele2 Group
 
 
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
REVENUE
                                   
Sweden Consumer
 
2,078
2,116
2,114
2,324
2,138
2,198
2,191
3,473
3,799
         
8,632
10,000
 
Sweden Business
 
1,654
1,599
1,511
1,661
1,636
1,575
1,491
1,715
1,672
         
6,425
6,417
 
Lithuania
 
439
479
510
529
532
604
631
663
613
         
1,957
2,430
 
Latvia
 
257
279
305
337
296
325
339
348
322
         
1,178
1,308
 
Estonia
 
166
194
185
198
189
196
192
210
183
         
743
787
 
Croatia
 
359
410
463
462
433
450
536
518
475
         
1,694
1,937
 
Germany
 
160
154
150
148
139
138
135
127
122
         
612
539
 
IoT
 
32
40
38
37
43
51
53
53
48
         
147
200
 
Other
 
30
32
36
37
32
41
45
34
0
         
135
152
 
Internal sales, elimination
 
-11
-11
-16
-19
-13
-18
-16
-19
-17
         
-57
-66
 
Total
 
5,164
5,292
5,296
5,714
5,425
5,560
5,597
7,122
7,217
         
21,466
23,704
 
                                     
END-USER SERVICE REVENUE
                                   
Sweden Consumer
 
1,548
1,562
1,586
1,564
1,536
1,542
1,564
2,578
3,164
         
6,260
7,220
 
Sweden Business
 
1,072
1,039
988
1,004
995
982
963
1,039
1,034
         
4,103
3,979
 
Lithuania
 
259
282
286
292
302
335
342
350
351
         
1,119
1,329
 
Latvia
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Estonia
 
109
112
117
117
108
115
114
114
110
         
455
451
 
Croatia
 
206
224
240
233
260
272
293
285
286
         
903
1,110
 
Germany
 
159
153
149
147
138
138
133
127
122
         
608
536
 
IoT
 
32
40
38
37
43
51
53
53
48
         
147
200
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
3,535
3,579
3,581
3,572
3,561
3,629
3,661
4,742
5,314
         
14,267
15,593
 
                                     
END-USER SERVICE REVENUE, MOBILE
                                   
Sweden Consumer
 
1,431
1,464
1,491
1,473
1,452
1,462
1,489
1,478
1,457
         
5,859
5,881
 
Sweden Business
 
516
472
447
459
459
463
461
481
475
         
1,894
1,864
 
Lithuania
 
259
282
286
292
302
335
342
350
351
         
1,119
1,329
 
Latvia
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Estonia
 
108
112
116
116
104
110
109
108
105
         
452
431
 
Croatia
 
206
224
240
233
260
272
293
285
286
         
903
1,110
 
Germany
 
87
85
82
83
78
80
77
75
73
         
337
310
 
IoT
 
32
40
38
37
43
51
53
53
48
         
147
200
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
2,789
2,846
2,877
2,871
2,877
2,967
3,023
3,026
2,994
         
11,383
11,893
 
                                     
UNDERLYING EBITDA excluding IFRS 16
                                   
Sweden Consumer
 
790
741
743
693
725
756
791
1,170
1,469
         
2,967
3,442
 
Sweden Business
 
351
301
375
354
355
286
409
340
374
         
1,381
1,390
 
Lithuania
 
147
171
175
159
178
205
231
203
232
         
652
817
 
Latvia
 
88
95
118
116
103
121
125
125
116
         
417
474
 
Estonia
 
44
44
49
48
35
40
46
46
38
         
185
167
 
Croatia
 
24
39
85
34
33
68
111
56
90
         
182
268
 
Germany
 
62
61
67
75
60
66
65
58
56
         
265
249
 
IoT
 
-29
-18
-20
-34
-18
-31
-22
-33
-6
         
-101
-104
 
Other
 
-22
-11
18
-48
-11
12
-31
-40
-29
         
-63
-70
 
Total
 
1,455
1,423
1,610
1,397
1,460
1,523
1,725
1,925
2,340
         
5,885
6,633
 
                                     
UNDERLYING EBITDAaL
                                   
Sweden
                 
1,843
               
Lithuania
                 
230
               
Latvia
                 
116
               
Estonia
                 
35
               
Croatia
                 
89
               
Germany
                 
56
               
IoT
                 
-6
               
Other
                 
-28
               
Total
                 
2,335
               
                                     

             
<-- IAS 17
  IFRS 16 -->
             
UNDERLYING EBITDA
                                   
Sweden Consumer
 
790
741
743
693
725
756
791
1,170
1,641
         
2,967
3,442
 
Sweden Business
 
351
301
375
354
355
286
409
340
460
         
1,381
1,390
 
Lithuania
 
147
171
175
159
178
205
231
203
245
         
652
817
 
Latvia
 
88
95
118
116
103
121
125
125
125
         
417
474
 
Estonia
 
44
44
49
48
35
40
46
46
47
         
185
167
 
Croatia
 
24
39
85
34
33
68
111
56
119
         
182
268
 
Germany
 
62
61
67
75
60
66
65
58
56
         
265
249
 
IoT
 
-29
-18
-20
-34
-18
-31
-22
-33
-6
         
-101
-104
 
Other
 
-22
-11
18
-48
-11
12
-31
-40
-28
         
-63
-70
 
Total
 
1,455
1,423
1,610
1,397
1,460
1,523
1,725
1,925
2,659
         
5,885
6,633
 
                                     
                 
<-- IAS 17
  IFRS 16 -->
             
Reconciling items to reported operating profit
                                   
Underlying EBITDA
 
1,455
1,423
1,610
1,397
1,460
1,523
1,725
1,925
2,659
         
5,885
6,633
 
Items affecting comparability
 
-98
-57
-40
-135
-65
-128
-170
-232
-262
         
-330
-595
 
EBITDA
 
1,357
1,366
1,570
1,262
1,395
1,395
1,555
1,693
2,397
         
5,555
6,038
 
Depreciation/amortization
 
-507
-506
-516
-557
-509
-517
-532
-888
-1,303
         
-2,086
-2,446
 
of which amortization of surplus from acquisitions
 
-37
-38
-38
-38
-37
-39
-37
-201
-299
         
-151
-314
 
of which depreciation of right-of-use assets
 
0
0
0
0
0
0
0
0
-303
         
0
0
 
of which depreciation/amortization other
 
-470
-468
-478
-519
-472
-478
-495
-687
-701
         
-1,935
-2,132
 
Impairment
 
0
0
0
0
0
0
0
149
0
         
0
149
 
Result from shares in joint ventures and associated companies
 
-
1
-
-1
14
-
-1
-4
10
         
0
9
 
Operating profit
 
850
861
1,054
704
900
878
1,022
950
1,104
         
3,469
3,750
 
                                     
CAPEX
                                   
Sweden
 
118
196
164
265
192
213
236
1,297
783
         
743
1,938
 
Lithuania
 
29
23
25
37
22
38
43
41
29
         
114
144
 
Latvia
 
17
20
19
27
24
20
25
44
101
         
83
113
 
Estonia
 
14
20
22
27
17
24
25
21
29
         
83
87
 
Croatia
 
7
25
22
36
11
37
23
57
83
         
90
128
 
Germany
 
0
0
0
0
0
0
0
0
0
         
0
0
 
IoT
 
3
7
8
12
7
7
4
11
6
         
30
29
 
Other
 
63
54
61
111
100
135
48
110
1
         
289
393
 
Total
 
251
345
321
515
373
474
404
1,581
1,032
         
1,432
2,832
 
                                     
of which
                                   
Network
 
112
177
162
310
172
219
201
440
269
         
761
1,032
 
IT
 
96
108
105
148
151
194
148
298
196
         
457
791
 
Customer equipment, CPE
 
31
36
27
37
37
44
30
64
126
         
131
175
 
Other
 
11
24
27
20
13
17
24
58
52
         
82
112
 
Capex excluding spectrum and leases
 
250
345
321
515
373
474
403
860
643
         
1,431
2,110
 
Spectrum
 
1
0
0
0
0
0
1
721
131
         
1
722
 
Right-of-use assets (Leases)
 
0
0
0
0
0
0
0
0
258
         
0
0
 
Total
 
251
345
321
515
373
474
404
1,581
1,032
         
1,432
2,832
 
                                     
CAPEX SPECTRUM
                                   
Sweden
 
0
0
0
0
0
0
0
721
0
         
0
721
 
Lithuania
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Latvia
 
0
0
0
0
0
0
1
0
67
         
0
1
 
Estonia
 
1
0
0
0
0
0
0
0
0
         
1
0
 
Croatia
 
0
0
0
0
0
0
0
0
64
         
0
0
 
Germany
 
0
0
0
0
0
0
0
0
0
         
0
0
 
IoT
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
1
0
0
0
0
0
1
721
131
         
1
722
 
                                     
CAPEX RIGHT-OF-USE ASSETS (LEASES)
                                   
Sweden
 
0
0
0
0
0
0
0
0
239
         
0
0
 
Lithuania
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Latvia
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Estonia
 
0
0
0
0
0
0
0
0
9
         
0
0
 
Croatia
 
0
0
0
0
0
0
0
0
4
         
0
0
 
Germany
 
0
0
0
0
0
0
0
0
0
         
0
0
 
IoT
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
0
0
0
0
0
0
0
0
258
         
0
0
 



Tele2 Group, Pro forma*
* including pro forma for Com Hem (pre acquisition)
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
REVENUE
                                   
Sweden Consumer
 
3,761
3,839
3,829
4,059
3,856
3,944
3,903
4,129
3,799
         
15,488
15,832
 
Sweden Business
 
1,728
1,670
1,576
1,731
1,702
1,644
1,556
1,740
1,672
         
6,705
6,642
 
Lithuania
 
439
479
510
529
532
604
631
663
613
         
1,957
2,430
 
Latvia
 
257
279
305
337
296
325
339
348
322
         
1,178
1,308
 
Estonia
 
166
194
185
198
189
196
192
210
183
         
743
787
 
Croatia
 
359
410
463
462
433
450
536
518
475
         
1,694
1,937
 
Germany
 
160
154
150
148
139
138
135
127
122
         
612
539
 
IoT
 
32
40
38
37
43
51
53
53
48
         
147
200
 
Other
 
30
32
36
37
32
41
45
34
0
         
135
152
 
Internal sales, elimination
 
-11
-11
-16
-19
-13
-18
-16
-19
-17
         
-57
-66
 
Total
 
6,921
7,086
7,076
7,519
7,209
7,375
7,374
7,803
7,217
         
28,602
29,761
 
                                     
END-USER SERVICE REVENUE
                                   
Sweden Consumer
 
3,187
3,224
3,242
3,225
3,191
3,221
3,224
3,210
3,164
         
12,878
12,846
 
Sweden Business
 
1,142
1,106
1,051
1,072
1,058
1,048
1,025
1,063
1,034
         
4,371
4,194
 
Lithuania
 
259
282
286
292
302
335
342
350
351
         
1,119
1,329
 
Latvia
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Estonia
 
109
112
117
117
108
115
114
114
110
         
455
451
 
Croatia
 
206
224
240
233
260
272
293
285
286
         
903
1,110
 
Germany
 
159
153
149
147
138
138
133
127
122
         
608
536
 
IoT
 
32
40
38
37
43
51
53
53
48
         
147
200
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
5,244
5,308
5,300
5,301
5,279
5,374
5,383
5,398
5,314
         
21,153
21,434
 
                                     
END-USER SERVICE REVENUE, MOBILE
                                   
Sweden Consumer
 
1,431
1,464
1,491
1,473
1,452
1,462
1,489
1,478
1,457
         
5,859
5,881
 
Sweden Business
 
526
481
456
468
472
475
473
485
475
         
1,931
1,905
 
Lithuania
 
259
282
286
292
302
335
342
350
351
         
1,119
1,329
 
Latvia
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Estonia
 
108
112
116
116
104
110
109
108
105
         
452
431
 
Croatia
 
206
224
240
233
260
272
293
285
286
         
903
1,110
 
Germany
 
87
85
82
83
78
80
77
75
73
         
337
310
 
IoT
 
32
40
38
37
43
51
53
53
48
         
147
200
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
2,799
2,855
2,886
2,880
2,890
2,979
3,035
3,030
2,994
         
11,420
11,934
 
                                     
UNDERLYING EBITDA excluding IFRS 16
                                   
Sweden Consumer
 
1,449
1,408
1,449
1,332
1,389
1,438
1,507
1,430
1,469
         
5,638
5,764
 
Sweden Business
 
352
305
395
383
372
294
439
345
374
         
1,435
1,450
 
Lithuania
 
147
171
175
159
178
205
231
203
232
         
652
817
 
Latvia
 
88
95
118
116
103
121
125
125
116
         
417
474
 
Estonia
 
44
44
49
48
35
40
46
46
38
         
185
167
 
Croatia
 
24
39
85
34
33
68
111
56
90
         
182
268
 
Germany
 
62
61
67
75
60
66
65
58
56
         
265
249
 
IoT
 
-29
-18
-20
-34
-18
-31
-22
-33
-6
         
-101
-104
 
Other
 
-22
-11
18
-48
-11
12
-31
-40
-29
         
-63
-70
 
Total
 
2,115
2,094
2,336
2,065
2,141
2,213
2,471
2,190
2,340
         
8,610
9,015
 
                                     
UNDERLYING EBITDAaL
                                   
Sweden
                 
1,843
               
Lithuania
                 
230
               
Latvia
                 
116
               
Estonia
                 
35
               
Croatia
                 
89
               
Germany
                 
56
               
IoT
                 
-6
               
Other
                 
-28
               
Total
                 
2,335
               
                                     
               
<-- IAS 17
 IFRS 16 -->
             
UNDERLYING EBITDA
                                   
Sweden Consumer
 
1,449
1,408
1,449
1,332
1,389
1,438
1,507
1,430
1,641
         
5,638
5,764
 
Sweden Business
 
352
305
395
383
372
294
439
345
460
         
1,435
1,450
 
Lithuania
 
147
171
175
159
178
205
231
203
245
         
652
817
 
Latvia
 
88
95
118
116
103
121
125
125
125
         
417
474
 
Estonia
 
44
44
49
48
35
40
46
46
47
         
185
167
 
Croatia
 
24
39
85
34
33
68
111
56
119
         
182
268
 
Germany
 
62
61
67
75
60
66
65
58
56
         
265
249
 
IoT
 
-29
-18
-20
-34
-18
-31
-22
-33
-6
         
-101
-104
 
Other
 
-22
-11
18
-48
-11
12
-31
-40
-28
         
-63
-70
 
Total
 
2,115
2,094
2,336
2,065
2,141
2,213
2,471
2,190
2,659
         
8,610
9,015
 
                                     
                                     
CAPEX
                                   
Sweden
 
331
446
362
523
429
413
372
1,373
783
         
1,662
2,587
 
Lithuania
 
29
23
25
37
22
38
43
41
29
         
114
144
 
Latvia
 
17
20
19
27
24
20
25
44
101
         
83
113
 
Estonia
 
14
20
22
27
17
24
25
21
29
         
83
87
 
Croatia
 
7
25
22
36
11
37
23
57
83
         
90
128
 
Germany
 
0
0
0
0
0
0
0
0
0
         
0
0
 
IoT
 
3
7
8
12
7
7
4
11
6
         
30
29
 
Other
 
63
54
61
111
100
135
48
110
1
         
289
393
 
Total
 
464
595
519
773
610
674
540
1,657
1,032
         
2,351
3,481
 
                                    
of which
                                   
Network
 
203
290
249
455
267
305
263
473
269
         
1,197
1,308
 
IT
 
144
163
147
213
201
238
181
315
196
         
667
935
 
Customer equipment, CPE
 
95
105
88
75
122
105
70
84
126

       
363
381
 
Other
 
21
37
35
30
20
26
25
64
52
         
123
135
 
Capex excluding spectrum and leases
 
463
595
519
  773
610
674
539
936
643
         
2,350
2,759
 
Spectrum
 
1
0
0
0
0
0
1
721
131
         
1
722
 
Right-of-use assets (Leases)
 
0
0
0
0
0
0
  0
0
258
         
0
0
 
Total
 
464
595
519
773
610
674
540
1,657
1,032
         
2,351
3,481
 
                                     
CAPEX SPECTRUM
                                   
Sweden
 
0
0
0
0
0
0
0
721
0
         
0
721
 
Lithuania
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Latvia
 
0
0
0
0
0
0
1
0
67
         
0
1
 
Estonia
 
1
0
0
0
0
0
0
0
0
         
1
0
 
Croatia
 
0
0
0
0
0
0
0
0
64
         
0
0
 
Germany
 
0
0
0
0
0
0
0
0
0
         
0
0
 
IoT
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
1
0
0
0
0
0
1
721
131
         
1
722
 
                                     
CAPEX RIGHT-OF-USE ASSETS (LEASES)
                                   
Sweden
 
0
0
0
0
0
0
0
0
239
         
0
0
 
Lithuania
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Latvia
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Estonia
 
0
0
0
0
0
0
0
0
9
         
0
0
 
Croatia
 
0
0
0
0
0
0
0
0
4
         
0
0
 
Germany
 
0
0
0
0
0
0
0
0
0
         
0
0
 
IoT
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Other
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total
 
0
0
0
0
0
0
0
0
258
         
0
0
 



Sweden
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
REVENUE
                                   
Consumer
                                   
Mobile
 
1,431
1,464
1,491
1,473
1,452
1,462
1,489
1,478
1,457
         
5,859
5,881
 
Postpaid
 
1,103
1,119
1,153
1,148
1,152
1,168
1,189
1,189
1,179
         
4,523
4,698
 
Prepaid
 
328
345
338
325
300
294
300
289
278
         
1,336
1,183
 
Fixed
 
117
98
95
91
84
80
75
991
1,531
         
401
1,230
 
Fixed broadband
 
0
0
0
0
0
0
0
381
618
         
0
381
 
Digital TV
 
0
0
0
0
0
0
0
512
807
         
0
512
 
Cable & Fiber
 
0
0
0
0
0
0
0
295
466
         
0
295
 
DTT
 
0
0
0
0
0
0
0
217
341
         
0
217
 
Fixed telephony & DSL
 
117
98
95
91
84
80
75
98
106
         
401
337
 
Landlord & Other
 
0
0
0
0
0
0
0
109
176
         
0
109
 
End-user service revenue
 
1,548
1,562
1,586
1,564
1,536
1,542
1,564
2,578
3,164
         
6,260
7,220
 
Operator revenue
 
157
163
153
151
149
163
150
182
190
         
624
644
 
Equipment revenue
 
373
391
375
609
453
493
477
713
445
         
1,748
2,136
 
Internal sales
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Consumer
 
2,078
2,116
2,114
2,324
2,138
2,198
2,191
3,473
3,799
         
8,632
10,000
 
                                     
Business
                                   
Mobile
 
516
472
447
459
459
463
461
481
475
         
1,894
1,864
 
Fixed
 
304
309
292
283
278
259
259
279
295
         
1,188
1,075
 
Solutions
 
252
258
249
262
258
260
243
279
264
         
1,021
1,040
 
End-user service revenue
 
1,072
1,039
988
1,004
995
982
963
1,039
1,034
         
4,103
3,979
 
Operator revenue, excluding Wholesale
 
30
29
34
30
31
34
26
36
24
         
123
127
 
Equipment revenue
 
392
364
311
474
464
418
349
503
446
         
1,541
1,734
 
Wholesale revenue
 
160
166
178
151
145
140
152
136
167
         
655
573
 
Internal sales
 
0
1
0
2
1
1
1
1
1
         
3
4
 
Business
 
1,654
1,599
1,511
1,661
1,636
1,575
1,491
1,715
1,672
         
6,425
6,417
 
                                     
Total
 
3,732
3,715
3,625
3,985
3,774
3,773
3,682
5,188
5,471
         
15,057
16,417
 
                                     
                                     
                                     
UNDERLYING EBITDA excluding IFRS 16
                                   
Consumer
 
790
741
743
693
725
756
791
1,170
1,469
         
2,967
3,442
 
Business
 
351
301
375
354
355
286
409
340
374
         
1,381
1,390
 
of which Wholesale
 
26
39
62
78
66
19
72
52
68
         
205
209
 
Total
 
1,141
1,042
1,118
1,047
1,080
1,042
1,200
1,510
1,843
         
4,348
4,832
 
                                     
                                     
               
<-- IAS 17
 IFRS 16 -->
             
UNDERLYING EBITDA
                                   
Consumer
 
790
741
743
693
725
756
791
1,170
1,641
         
2,967
3,442
 
Business
 
351
301
375
354
355
286
409
340
460
         
1,381
1,390
 
of which Wholesale
 
26
39
62
78
66
19
72
52
89
         
205
209
 
Total
 
1,141
1,042
1,118
1,047
1,080
1,042
1,200
1,510
2,101
         
4,348
4,832
 
                                     
                                     
Lease amortization and lease interest
               
-258
               
Underlying EBITDAaL
                 
1,843
               
                                     
CAPEX
                                   
Network
 
37
81
73
175
86
87
93
260
201
         
366
526
 
IT
 
49
66
50
49
61
74
100
210
176
         
214
445
 
Customer equipment, CPE
 
31
36
27
35
37
44
30
63
126
         
129
174
 
Other
 
1
13
14
6
8
8
13
43
41
         
34
72
 
Capex excluding spectrum and leases
 
118
196
164
265
192
213
236
576
544
         
743
1,217
 
Spectrum
 
0
0
0
0
0
0
0
721
0
         
0
721
 
Right-of-use assets (Leases)
 
0
0
0
0
0
0
0
0
239
         
0
0
 
Total
 
118
196
164
265
192
213
236
1,297
783
         
743
1,938
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
Dec 31,
         
                                     
OPERATING DATA
                                   
Consumer - Addressable fixed footprint
                                   
Households
 
0
0
0
0
0
0
0
3,114
3,178
               
                                     
Consumer RGUs
                                   
Mobile
 
3,044
3,062
3,072
3,026
2,976
2,967
2,979
2,947
2,927
               
Postpaid
 
1,760
1,763
1,788
1,803
1,796
1,794
1,804
1,817
1,822
               
Prepaid
 
1,284
1,299
1,284
1,223
1,180
1,173
1,175
1,130
1,105
               
Fixed
 
152
144
135
127
113
108
100
2,208
2,201
               
Fixed broadband
 
0
0
0
0
0
0
0
827
839
               
Digital TV
 
0
0
0
0
0
0
0
1,057
1,049
               
Cable & Fiber
 
0
0
0
0
0
0
0
658
661
               
DTT
 
0
0
0
0
0
0
0
399
388
               
Fixed telephony & DSL
 
152
144
135
127
113
108
100
324
313
               
Consumer
 
3,196
3,206
3,207
3,153
3,089
3,075
3,079
5,155
5,128
               
                                     
Business RGUs
                                   
Mobile
 
807
799
802
808
844
856
869
889
896
               



Sweden, Pro forma*
* including pro forma for Com Hem (pre acquisition)

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
REVENUE
                                   
Consumer
                                   
Mobile
 
1,431
1,464
1,491
1,473
1,452
1,462
1,489
1,478
1,457
         
5,859
5,881
 
Postpaid
 
1,103
1,119
1,153
1,148
1,152
1,168
1,189
1,189
1,179
         
4,523
4,698
 
Prepaid
 
328
345
338
325
300
294
300
289
278
         
1,336
1,183
 
Fixed
 
1,560
1,566
1,562
1,560
1,555
1,575
1,558
1,555
1,531
         
6,248
6,243
 
Fixed broadband
 
500
531
542
556
571
595
600
614
618
         
2,129
2,380
 
Digital TV
 
890
887
877
866
856
856
841
826
807
         
3,520
3,379
 
Cable & Fiber
 
466
475
473
472
472
479
476
474
466
         
1,886
1,901
 
DTT
 
424
412
404
394
384
377
365
352
341
         
1,634
1,478
 
Fixed telephony & DSL
 
170
148
143
138
128
124
117
115
106
         
599
484
 
Landlord & Other
 
196
194
189
192
184
184
177
177
176
         
771
722
 
End-user service revenue
 
3,187
3,224
3,242
3,225
3,191
3,221
3,224
3,210
3,164
         
12,878
12,846
 
Operator revenue
 
188
198
188
188
187
203
191
199
190
         
762
780
 
Equipment revenue
 
386
417
399
646
478
520
488
720
445
         
1,848
2,206
 
Internal sales
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Consumer
 
3,761
3,839
3,829
4,059
3,856
3,944
3,903
4,129
3,799
         
15,488
15,832
 
                                     
Business
                                   
Mobile
 
526
481
456
468
472
475
473
485
475
         
1,931
1,905
 
Fixed
 
359
361
340
335
325
309
306
298
295
         
1,395
1,238
 
Solutions
 
257
264
255
269
261
264
246
280
264
         
1,045
1,051
 
End-user service revenue
 
1,142
1,106
1,051
1,072
1,058
1,048
1,025
1,063
1,034
         
4,371
4,194
 
Operator revenue, excluding Wholesale
 
30
29
34
30
31
34
26
36
24
         
123
127
 
Equipment revenue
 
396
368
313
476
467
421
352
504
446
         
1,553
1,744
 
Wholesale revenue
 
160
166
178
151
145
140
152
136
167
         
655
573
 
Internal sales
 
0
1
0
2
1
1
1
1
1
         
3
4
 
Business
 
1,728
1,670
1,576
1,731
1,702
1,644
1,556
1,740
1,672
         
6,705
6,642
 
                                     
Total
 
5,489
5,509
5,405
5,790
5,558
5,588
5,459
5,869
5,471
         
22,193
22,474
 
                                     
                                     
                                     
UNDERLYING EBITDA excluding IFRS 16
                                   
Consumer
 
1,449
1,408
1,449
1,332
1,389
1,438
1,507
1,430
1,469
         
5,638
5,764
 
Business
 
352
305
395
383
372
294
439
345
374
         
1,435
1,450
 
of which Wholesale
 
12
30
65
98
64
9
79
48
68
         
205
200
 
Total
 
1,801
1,713
1,844
1,715
1,761
1,732
1,946
1,775
1,843
         
7,073
7,214
 
                                     
                                     
               
<-- IAS 17
 IFRS 16 -->
             
UNDERLYING EBITDA
                                   
Consumer
 
1,449
1,408
1,449
1,332
1,389
1,438
1,507
1,430
1,641
         
5,638
5,764
 
Business
 
352
305
395
383
372
294
439
345
460
         
1,435
1,450
 
of which Wholesale
 
12
30
65
98
64
9
79
48
89
         
205
200
 
Total
 
1,801
1,713
1,844
1,715
1,761
1,732
1,946
1,775
2,101
         
7,073
7,214
 
                                     
                                     
Lease amortization and lease interest
                 
-258
               
Underlying EBITDAaL
                 
1,843
               
                                     
CAPEX
                                   
Network
 
128
194
160
320
181
173
155
293
201
         
802
802
 
IT
 
97
121
92
114
111
118
133
227
176
         
424
589
 
Customer equipment, CPE
 
95
105
88
73
122
105
70
83
126
         
361
380
 
Other
 
11
26
22
16
15
17
14
49
41
         
75
95
 
Capex excluding spectrum and leases
 
331
446
362
523
429
413
372
652
544
         
1,662
1,866
 
Spectrum
 
0
0
0
0
0
0
0
721
0
         
0
721
 
Right-of-use assets (Leases)
 
0
0
0
0
0
0
0
0
239
         
0
0
 
Total
 
331
446
362
523
429
413
372
1,373
783
         
1,662
2,587
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
Dec 31,
Mar 31,
Jun 30,
Sep 30,
Dec 31,
         
                                     
OPERATING DATA
                                   
Consumer - Addressable fixed footprint
                                   
Households
 
2,324
2,594
2,686
2,831
2,871
2,948
2,991
3,114
3,178
               
                                     
Consumer RGUs
                                   
Mobile
 
3,044
3,062
3,072
3,026
2,976
2,967
2,979
2,947
2,927
               
Postpaid
 
1,760
1,763
1,788
1,803
1,796
1,794
1,804
1,817
1,822
               
Prepaid
 
1,284
1,299
1,284
1,223
1,180
1,173
1,175
1,130
1,105
               
Fixed
 
2,284
2,279
2,278
2,277
2,256
2,244
2,231
2,208
2,201
               
Fixed broadband
 
727
743
759
778
790
801
814
827
839
               
Digital TV
 
1,120
1,112
1,107
1,098
1,086
1,074
1,066
1,057
1,049
               
Cable & Fiber
 
644
645
651
655
653
654
655
658
661
               
DTT
 
476
467
456
443
432
420
411
399
388
               
Fixed telephony & DSL
 
437
424
412
401
381
369
351
324
313
               
Consumer
 
5,328
5,341
5,350
5,303
5,232
5,211
5,210
5,155
5,128
               
                                     
Business RGUs
                                   
Mobile
 
821
813
815
821
855
868
881
889
896
               


Lithuania

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
Mobile
 
259
282
286
292
302
335
342
350
351
         
1,119
1,329
 
Fixed
 
0
0
0
0
0
0
0
0
0
         
0
0
 
End-user service revenue
 
259
282
286
292
302
335
342
350
351
         
1,119
1,329
 
Operator revenue
 
52
55
59
57
55
63
70
61
60
         
223
249
 
Equipment revenue
 
123
138
160
174
170
198
211
243
193
         
595
822
 
Internal sales
 
5
4
5
6
5
8
8
9
9
         
20
30
 
Total revenue
 
439
479
510
529
532
604
631
663
613
         
1,957
2,430
 
                                     
Underlying EBITDA excluding IFRS 16
 
147
171
175
159
178
205
231
203
232
         
652
817
 
                                     
               
<-- IAS 17
 IFRS 16 -->
             
Underlying EBITDA
 
147
171
175
159
178
205
231
203
245
         
652
817
 
Lease amortization and lease interest
                 
-15
               
Underlying EBITDAaL
                 
230
               
                                     
Capex excluding spectrum and leases
 
29
23
25
37
22
38
43
41
26
         
114
144
 
Spectrum
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Leases
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Capex
 
29
23
25
37
22
38
43
41
29
         
114
144
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
         
                                     
Mobile RGUs
 
1,767
1,775
1,795
1,792
1,808
1,834
1,869
1,861
1,857
               

Latvia

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
Mobile
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Fixed
 
0
0
0
0
0
0
0
0
0
         
0
0
 
End-user service revenue
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Operator revenue
 
49
53
56
55
47
51
53
50
47
         
213
201
 
Equipment revenue
 
54
56
66
95
66
75
83
97
72
         
271
321
 
Internal sales
 
4
3
6
9
4
5
4
5
4
         
22
18
 
Total revenue
 
257
279
305
337
296
325
339
348
322
         
1,178
1,308
 
                                     
Underlying EBITDA excluding IFRS 16
 
88
95
118
116
103
121
125
125
116
         
417
474
 
                                     
               
<-- IAS 17
 IFRS 16 -->
             
Underlying EBITDA
 
88
95
118
116
103
121
125
125
125
         
417
474
 
Lease amortization and lease interest
                 
-9
               
Underlying EBITDAaL
                 
116
               
                                     
Capex excluding spectrum and leases
 
17
20
19
27
24
20
24
44
31
         
83
112
 
Spectrum
 
0
0
0
0
0
0
1
0
67
         
0
1
 
Leases
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Capex
 
17
20
19
27
24
20
25
44
101
         
83
113
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
         
                                     
Mobile RGUs
 
942
954
968
952
942
942
964
951
946
               



Estonia

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
Mobile
  108
112
177
178
179
194
199
196
199
         
672
768
 
Fixed
 
0
0
0
0
0
0
0
0
0
         
0
0
 
End-user service revenue
 
150
167
177
178
179
194
199
196
199
         
672
768
 
Operator revenue
 
49
53
56
55
47
51
53
50
47
         
213
201
 
Equipment revenue
 
54
56
66
95
66
75
83
97
72
         
271
321
 
Internal sales
 
4
3
6
9
4
5
4
5
4
         
22
18
 
Total revenue
 
257
279
305
337
296
325
339
348
322
         
1,178
1,308
 
                                     
Underlying EBITDA excluding IFRS 16
 
88
95
118
116
103
121
125
125
116
         
417
474
 
                                     
               
< -- IAS 17
 IFRS 16 -->
             
Underlying EBITDA
 
88
95
118
116
103
121
125
125
125
         
417
474
 
Lease amortization and lease interest
                 
-9
               
Underlying EBITDAaL
                 
116
               
                                     
Capex excluding spectrum and leases
 
17
20
19
27
24
20
24
44
31
         
83
112
 
Spectrum
 
0
0
0
0
0
0
1
0
67
         
0
1
 
Leases
 
0
0
0
0
0
0
0
0
3
         
0
0
 
Capex
 
17
20
19
27
24
20
25
44
101
         
83
113
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
         
                                     
Mobile RGUs
 
942
954
968
952
942
942
964
951
946
               

Croatia

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
Mobile
 
206
224
240
233
260
272
293
285
286
         
903
1,110
 
Fixed
 
0
0
0
0
0
0
0
0
0
         
0
0
 
End-user service revenue
 
206
224
240
233
260
272
293
285
286
         
903
1,110
 
Operator revenue
 
46
60
89
50
44
60
107
58
49
         
245
269
 
Equipment revenue
 
106
124
131
178
127
116
134
173
138
         
539
550
 
Internal sales
 
1
2
3
1
2
2
2
2
2
         
7
8
 
Total revenue
 
359
410
463
462
433
450
536
518
475
         
1,694
1,937
 
                                     
Underlying EBITDA excluding IFRS 16
 
24
39
85
34
33
68
111
56
90
         
182
268
 
                                     
               
<-- IAS 17
 IFRS 16 -->
             
Underlying EBITDA
 
24
39
85
34
33
68
111
56
119
         
182
268
 
Lease amortization and lease interest
                 
-30
               
Underlying EBITDAaL
                 
89
               
                                     
Capex excluding spectrum and leases
 
7
25
22
36
11
37
23
57
15
         
90
128
 
Spectrum
 
0
0
0
0
0
0
0
0
64
         
0
0
 
Leases
 
0
0
0
0
0
0
0
0
4
         
0
0
 
Capex
 
7
25
22
36
11
37
23
57
83
         
90
128
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
         
                                     
Mobile RGUs
 
788
822
884
841
844
885
945
897
894
               


Germany

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
Mobile
 
87
85
82
83
78
80
77
75
73
         
337
310
 
Fixed
 
72
68
67
64
60
58
56
52
49
         
271
226
 
End-user service revenue
 
159
153
149
147
138
138
133
127
122
         
608
536
 
Operator revenue
 
0
0
0
1
0
0
1
0
0
         
1
1
 
Equipment revenue
 
1
1
1
0
1
0
1
0
0
         
3
2
 
Internal sales
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total revenue
 
160
154
150
148
139
138
135
127
122
         
612
539
 
                                     
Underlying EBITDA excluding IFRS 16
 
62
61
67
75
60
66
65
58
56
         
265
249
 
                                     
               
<-- IAS 17
 IFRS 16 -->
             
Underlying EBITDA
 
62
61
67
75
60
66
65
58
56
         
265
249
 
Lease amortization and lease interest
                 
0
               
Underlying EBITDAaL
                 
56
               
                                     
Capex excluding spectrum and leases
0
0
0
0
0
0
0
0
0
         
0
0
 
Spectrum
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Leases
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Capex
 
0
0
0
0
0
0
0
0
0
         
0
0
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
         
                                     
Mobile RGUs
 
160
153
147
142
137
134
130
126
122
               



Kazakhstan         discontinued operation

   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
   
2017
2018
2019
SEK million
Comments
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
   
Full-year
Full-year
Full-year
                                     
Mobile
 
494
545
505
552
534
613
628
650
632
         
2,096
2,425
 
Fixed
 
0
0
0
0
0
0
0
0
0
         
0
0
 
End-user service revenue
 
494
545
505
552
534
613
628
650
632
         
2,096
2,425
 
Operator revenue
 
148
160
142
151
146
167
162
162
151
         
601
637
 
Equipment revenue
 
6
6
5
7
7
4
5
6
4
         
24
22
 
Internal sales
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Total revenue
 
648
711
652
710
687
784
795
818
787
         
2,721
3,084
 
                                     
Underlying EBITDA excluding IFRS 16
 
121
160
167
196
202
264
273
314
312
         
644
1,053
 
                                     
               
<-- IAS 17
 IFRS 16 -->
             
Underlying EBITDA
 
121
160
167
196
202
264
273
314
352
         
644
1,053
 
Lease amortization and lease interest
                 
-49
               
Underlying EBITDAaL
                 
303
               
                                     
Capex excluding spectrum and leases
129
168
56
148
39
94
16
125
38
         
501
274
 
Spectrum
 
0
0
0
0
0
0
0
0
0
         
0
0
 
Leases
 
0
0
0
0
0
0
0
0
98
         
0
0
 
Capex
 
129
168
56
148
39
94
16
125
136
         
501
274
 
                                     
                                     
   
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
2019
         
in thousand
Comments
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
Mar 31,
Jun
30,
Sep 30,
Dec
31,
         
                                     
Mobile RGUs
 
6,514
6,753
6,814
6,914
6,929
7,029
7,091
7,160
7,067
               

 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Tele2 AB (publ), has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: April 29, 2019
 
Tele2 AB (publ)
 
 
 
By:
/s/ Stefan Backman
 
 
Name:
Stefan Backman
 
 
Title:
General Counsel
 
 
2



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