Disclaimer. Telenor Second Quarter 2008

Transcription

1 Telenor Second Quarter Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ( relevant persons ). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Telenor Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation contains statements regarding the future in connection with Telenor s growth initiatives, profit figures, outlook, strategies and objectives. In particular, the section Outlook for contains forward-looking statements regarding the Telenor Group s expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. Kyivstar was deconsolidated from 29 December 2006, due to injunctions in Ukraine prohibiting Kyivstar s management from providing financial information to Kyivstar s external auditors and its shareholders, including Telenor. In response to the termination of the last of the three injunctions by a Ukrainian court on 23 November, Kyivstar is now providing Telenor with unaudited financial information. As a consequence of Alfa Group s continuing collusive litigation in Ukraine and its ongoing boycott of Kyivstar s board and shareholder meetings in defiance of an international arbitration award and two court orders, Telenor remains unable to consolidate Kyivstar s financial results. In addition, due to Storm's (an Alfa subsidiary) boycott of Kyivstar board meetings, Kyivstar remains unable to engage external auditors to audit its 2006 and financial statements. During the period from 29 December 2006 to 23 November, when the injunctions were in place, Telenor was also prevented from using its internal auditors to review Kyivstar's financial statements. Kyivstar s newly established internal audit function, with support from Telenor, has begun to undertake internal audit work in Kyivstar. However, no internal audit of Kyivstar's financial statements has been completed to date. To restore corporate governance in Kyivstar, Telenor intends to continue its efforts to enforce the arbitration award and court orders against Alfa and its affiliates, including Storm and Altimo. In this respect, Telenor filed on 23 January a contempt motion with the federal court in New York against Storm LLC, its two direct shareholders Alpren Ltd. and Hardlake Ltd., and Altimo Holdings & Investments Ltd. A hearing of the case was held on 11 March and the court is expected to rule shortly. At the end of the fourth quarter of, Telenor held 56.52% of the shares in Kyivstar, while the remaining 43.48% were held by Storm, an Alfa affiliate. Kyivstar has been accounted for as an associated company from 29 December 2006 and presented separately as Investment in Kyivstar in the balance sheet up until the fourth quarter of, when the remaining injunction was lifted and Kyivstar resumed its financial reporting to Telenor. From the fourth quarter of Kyivstar is no longer presented on a separate line, but included in the line Associated companies. 2 1

2 Group Overview Jon Fredrik Baksaas President and CEO Stable financial performance Revenues (NOKm)/EBITDA % % underlying revenue growth Excellent performance in Kyivstar Solid retail growth in Mobile Norway Inflationary pressure in Asia Capex/sales 18% (23% incl licences) 6 million net subscriber growth 35,2 % 34,3 % All figures including Kyivstar EBITDA before other items 4 2

3 Norway Serbia Bangladesh Thailand 5 Mobile Norway Strong growth from own subscribers Revenues (NOKm)/ EBITDA% Organic retail revenue growth of 7% 48k net subscriber growth in, of which 35k mobile broadband ARPU growth driven by postpaid migration and increased usage More efficient market spend and improved cost management 39 % 37 % 36 % 31 % 35 % 36 %

4 Fixed Norway Underlying EBITDA margin of 36% Revenues (NOKm)/EBITDA% Revenue decrease of 3.8% Costs of NOK 30 million related to workforce reduction Capex driven by increased demand for network capacity Acquisition of Datametrix pending Competition Authority approval % 38 % 38 % 34 % 32 % 35 % Telenor Serbia Solid performance Revenues (NOKm)/EBITDA% 60k net subscriber additions in 7% revenue growth and 20% increase in EBITDA Margin improvement driven by lower market spend Low capex in due to postponed network investments % 39 % 35 % 34 % 41 % 43 %

5 Grameenphone - Bangladesh Passed 20 million subscribers Revenues (NOKm)/EBITDA% 2.5 million net subscriber growth in 11% revenue growth in local currency Accrual for Govt. compensation charge of NOK 150 million 43% underlying EBITDA margin 600k subscribers barred after re-registration deadline % 47 % 48% 36 % 48 % 47 % % 28 % EBITDA 921 CAPEX DTAC - Thailand Macroeconomics impacting spending Revenues (NOKm)/EBITDA% 0.8 million net subscriber growth in Seasonally weak quarter hampered by inflationary pressure and general uncertainty in the economy Settlement of NOK 400 million positively impacting revenue and EBITDA 32% EBITDA margin excl settlement % 29 % 29 % 28 % 28 % 32 % 32%

6 Broadcast Content investment to boost HDTV 1700 Revenues (NOKm)/ EBITDA% % revenue growth More than doubled HD penetration in DTH subscriber base in 1H Double digit ARPU growth in Cable driven by Internet access demand 23% EBITDA margin excl European football championship costs Strong performance in Norkring and Conax 26 % 22 % 25 % 22 % 20 % 16 % Sweden Denmark Hungary Montenegro Ukraine Pakistan Malaysia 12 6

7 Financials Trond Westlie Executive Vice President and CFO Continued currency pressure on revenues NOKm Revenues 07 Asia CEE Nordic Broadcast Other / elim. Currency Revenues 08 Revenue growth in compared to in fixed currency including Kyivstar 7

8 Stable EBITDA margin EBITDA (NOKm)/EBITDA% Change in EBITDA in fixed currency (NOKm) % 35 % 36 % 33 % 35 % 34 % EBITDA 07 Asia CEE Nordic Broadcast Other / elim. Currency EBITDA EBITDA before other items including Kyivstar Capex increase driven by licence acquisitions NOKm % Capex 07 Asia CEE Nordic Broadcast Other/elim Capex 3G licence 4G licence 08 excl licences Malaysia Sweden Capex

9 Declining capex/sales ratio in CEE and Asia Nordic 7 % 9 % 10 % % of mobile capex 3% of subs growth 43 % Asia 32 % 30 % 27 % CEE 15 % 12 % % of mobile capex 102% of subs growth % of mobile capex -5% of subs growth Mobile capex excl spectrum licences. Kyivstar included 17 Reported P&L (NOKm) Revenues EBITDA EBIT Associated companies Net financials (520) (811) (1 476) Profit before taxes Taxes (1 232) (490) (2 168) Net income to Telenor EPS (NOK), diluted

10 Net debt increase due to dividend payouts (NOKbn) End 08 Capex Interest and tax Dividend payouts Accruals, currency and other EBITDA End Outlook for Revenue growth: Around 3% EBITDA margin: Above 31% CAPEX/Sales: Around 20% Outlook on reported figures (excl Kyivstar), assuming Group structure and exchange rates as of 30 June. EBITDA before other items

11 Telenor Second Quarter Telenor Second Quarter Appendix 11

12 Mobile Norway Revenue development NOKm % 07 Subscription & traffic Interconnect Other mobile Non-mobile Fixed Norway Revenue development NOKm % Revenue 07 Telephony Broadband Other Revenue

13 Denmark Tele2 migration on track Revenues (NOKm)/EBITDA% Mobile subscriber base increased by 45k Tele2 mobile customers migrated to Sonofon and CBB Interconnect reduction from May Capex related to 3G/HSDPA and DSL 27 % 29 % 25 % 21 % 21 % 23 % Sweden 4G licence in place Revenues (NOKm)/EBITDA% k mobile net subscriber growth in Fixed broadband market remains challenging Seasonally increased market spend 4G licence acquired for NOK 450 million Reduced interconnect rates from July 20 % 18 % 22 % 20 % 22 % 19 %

14 Kyivstar - Ukraine Confirming excellent performance Revenues (NOKm)/EBITDA% % revenue growth in local currency Maintaining strong market leadership Continued ARPU growth from increased usage 59% EBITDA margin Operating cash flow of NOK 1.6 billion 60 % 61 % 58 % 60 % 59 % 55 % EBITDA CAPEX Pannon Hungary Stable service revenues Revenues (NOKm)/EBITDA% 14k net subscriber growth in AMPU growth due to increased postpaid ratio and bundled airtime Revenues impacted by reduced interconnect and roaming charges Investments in 3G/HSDPA Internet portal launched in June to support mobile broadband growth % 39 % 42 % 38 % 42 % 41 %

15 Promonte - Montenegro Margin improvement in competitive market Revenues (NOKm)/EBITDA% k net subscription growth in 151 Mobile penetration reaching 190% Margin improvement from previous quarter continued New tariff plan Tourist package launched in May Roll-out of mobile broadband % 45 % 52 % % 35 % % EBITDA 132 CAPEX DiGi - Malaysia Solid operating cash flow Revenues (NOKm)/EBITDA% Net subscriber growth of 84k in Revenue growth of 13% in local currency Stable EBITDA margin Capex including 3G licence of NOK 1.1 billion no cash effect Increasing competition 49 % 47 % 47 % 50 % 47 % 47 % Mobile number portability expected from September

16 Telenor Pakistan Continued margin improvement Revenues (NOKm) 1.4 million net subscriber growth in 7% revenue growth in local currency from 08 High inflation, increased competition and reduced IC putting pressure on ARPU EBITDA margin above 20% for the first time % 17 % 17 % 17 % 7 % Mobile Operations ARPU development (USD) Mobile Norway Mobile Denmark Mobile Sweden ,4 62, ,4 48,6 47,8 46,1 45,4 44,8 45,7 46,6 50,3 47,1 46,9 46,3 47,6 Kyivstar Pannon Promonte 7,6 7,4 69 6,9 71 7,1 7,7 30,6 30,7 31,6 31,0 27,8 28,8 24,7 28,4 26,4 21,0 22,9 22,6 6 FX as of

17 Mobile Operations ARPU development (USD) Telenor Serbia Telenor Pakistan DiGi 15,3 16,1 16,8 15,4 15,2 16,2 4,1 4,1 3,8 3,8 3,7 3,5 18,1 17,7 18,2 18,7 17,9 18,0 DTAC Grameenphone 12,2 11,4 10,8 10,4 10,3 9,5 5,4 4,9 4,6 44 4,4 4,2 3,7 FX as of Mobile Operations MoU/APPM development MoU APPM (USD) Mobile Norway Mobile Denmark Mobile Sweden ,28 0,29 0,29 0,28 0,27 0,27 0,24 0,24 0,24 0,23 0,23 0,22 0,24 0,24 0,24 0,23 0,23 0,22 Kyivstar Pannon Promonte ,05 0,05 0,05 0,05 0,05 0,05 0,20 0,19 0,19 0,19 0,17 0,17 0,21 0,21 0,21 0,17 0,18 0,18 FX as of

18 Mobile Operations MoU/APPM development MoU APPM (USD) Telenor Serbia Telenor Pakistan DiGi ,20 0,19 0,19 0,17 0,19 0,19 0,03 0,03 0,02 0,02 0,02 0,02 0,09 0,09 0,09 0,09 0,09 0,09 DTAC Grameenphone ,03 0,03 0,03 0,03 0,03 0,03 FX as of ,02 0,02 0,02 0,02 0,02 0,01 35 Mobile Operations ARPU development (local currency) Mobile Norway (NOK) Mobile Denmark (DKK) Mobile Sweden (SEK) Kyivstar (UAH) Pannon (HUF) Promonte (EUR)

19 Mobile Operations ARPU development (local currency) Telenor Serbia (CSD) Telenor Pakistan (PKR) DiGi (MYR) DTAC (THB) Grameenphone (BDT) Mobile Operations MoU/APPM development MoU APPM (local currency) Mobile Norway Mobile Denmark Mobile Sweden ,45 1,45 1,49 1,40 1,38 1,36 1,14 1,12 1,17 1,09 1,10 1,06 1,42 1,43 1,42 1,38 1,40 1,29 Kyivstar Pannon Promonte ,27 0,29 0,3 0,28 0,27 0, ,14 0,13 0,14 0,11 0,11 0,11 29,9 28,1 28,8 28,2 26,1 24,

20 Mobile Operations MoU/APPM development MoU APPM (local currency) Telenor Serbia Telenor Pakistan DiGi ,31 0,31 0,31 0,31 0,29 0,28 10,03 9,40 9,31 8,43 9,29 9,65 1,95 1,82 1,71 1,59 1,56 1, DTAC Grameenphone ,48 1,38 1,28 1,15 1,11 1,01 0,96 0,99 0,95 0,95 0,96 0,81 39 Currency development Currency Average FX change from Closing FX change from THB -9.6% 96% -6.1% 61% MYR -8.9% -2.3% BDT -15.6% -0.1% HUF -2.8% +9.6% DKK -2.6% -0.5% SEK -4.6% -1.3% PKR -20.7% -8.5% CSD -4.8% +4.3% UAH -13.9% +9.2% 40 20

21 Net debt in partly owned subsidiaries (NOKm) DiGi 49.0% (785) (929) (1 212) DTAC 65.5% Grameenphone 62.0% EDB Business 51.3% Partner Kyivstar 56.5% (5 945) (4 325) (1 848) 41 21