Telenor Group Jon Fredrik Baksaas, CEO DNB TMT Seminar 31 August 2012
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ( relevant persons ). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Telenor Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation contains statements regarding the future in connection with the Telenor Group s growth initiatives, profit figures, outlook, strategies and objectives. In particular, the section Outlook for 2012 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. 2
Strategy built on two main operational ambitions Preferred by customers Cost efficient operator Customer centricity Take positions in new services Business unit efficiency improvements Cross border standardisation 3
Sound operational performance Organic revenue growth Operational performance on track 5% organic revenue growth 8% organic growth in EBITDA 20% operating cash flow margin Restructuring of operations in India Launch of 3% buyback programme 6.9 % 5.4 % Q2 11 Q2 12 Mobile subscribers (mill) 128 151 Q2 11 Q2 12 4
Revenue growth and margin recovery in Norway Revenue development (NOKm) Successful migration to new bundled tariffs 5% underlying mobile revenue growth in Q2 Significant investments in network coverage and capacity Continued decline in fixed requiring further efficiency measures +244 6327 6184-101 Q2 11 Mobile Fixed Q2 12 Capex development (NOKm) Moving towards symmetric mobile termination rates 3202 3718 ~4000 2010 2011 2012e 5
Supporting long term value creation in VimpelCom Long term perspective on VimpelCom ownership VimpelCom Russia Revenues (RUB bn) and EBITDA margin (%) Improving performance in Russia Telenor ownership in full compliance with FAS approval granted in 2010 60.3 65.2 69.6 71.0 67.0 70,3 +8% Voting stakes after Sawiris exit: Telenor: 43.0% Altimo: 40.5% Bertofan: 6.0% Others: 10.5% 42 % 42 % 40 % 41 % 43 % 37 % Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Organic revenue growth YoY 6
Good performance in India given challenging circumstances Revenues (NOKm) Total subscriber base 33.7m end of Q2 Cost and efficiency focus Reduced operating cash flow losses 548 698 837 936 1.009 1.034 Information Memorandum released 27 Aug Auction process to start 12 Nov Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Operating cash flow (NOKm) Current license valid unit 18 Jan 2013-1.339-1.151-1.045-851 -763-625 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Based on 30 days definition of active subscribers 7
Restructuring operations in India Operational restructuring to speed up cash flow break even Restructuring in India Focus on 9 best performing circles Re-allocation of resources Targeting self-financing operation by end of 2013 Peak funding of INR 155 bn maintained Maharash tra Focus circles 8
Annual operating cash flow approaching NOK 20 bn OCF (NOKm) and OCF margin (%) OCF 4Q rolling (NOKm) 4.956 4.779 5.571 5.252 5.136 18.053 18.712 18.700 19.085 19.381 19.739 3.780 21 % 20 % 23 % 15 % 21 % 20 % Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q111 Q211 Q311 Q4 11 Q1 12 Q2 12 Operating cash flow from continuing operations, excluding licence fees Operating cash flow defined as EBITDA before other items - capex 9
Healthy shareholder remuneration Dividend per share (NOK) Payout to shareholders (NOK bn) 5.00 Dividends Share buybacks 3.80 4.7 4.4* 2.50 4.1 6.3 7.9 2009 2010 2011 2009 2010 2011 Dividend policy: 50-80% of normalised net income Nominal YoY increase in dividend 3% share buybacks in 2010 and 2011 New 3% buyback programme initiated in July 2012 *) Share buyback programme AGM 2011 AGM 2012 10
Operational priorities Opex/sales* 39% Manage transition from voice to data 37% <35% Execute on operational excellence Customer centricity Leverage Group scale New operating models 2009 2011 2013 Capex/sales* Bring India to self-financing mode 13% 11% ~10% 2009 2011 2013 *) Existing business not incl. India and licence fees 11
Capital Markets Day 19 September 2012 Telenor Group s head office at Fornebu 12
Telenor Group Jon Fredrik Baksaas, CEO DNB TMT Seminar 31 August 2012