STEP-CHANGE PRODUCTIVITY

Allison Kirkby, Group CFO

How we win

FocusedTechnology

Choices

Value Champion

Step-Change Productivity

Winning People & Culture

Key focus areas

Discipline Consolidate TransformSimplify

1

Challenger with a

Track record2

The challenge is what makes it exciting. You don't want to do anything that's too easy or that you know that you can pull off, otherwise it's really not worth doing

Our legacy: Always the challenger with cost consciousness in our DNA

“ “One of our basic guidelines in the office is that we are short of time and money. Hence, we are always in a hurry and use our cash extremely smart. At least in the office

“ “

3

Our challenger position requires cost leadership and maintained high quality

4

Why?

Tota

l Cos

t

Time

Continue to offer our customers what they

need, for less

Desire to reassess our cost structure

Opportunity to make a step-change in our

productivity

5

Existing structural advantages

Network joint ventures IT Shared Service Center in Riga

Group NOC consolidation in Riga

e.g. Tele2 saving 40%(Opex plus Capex) e.g. Estimated labor arbitrage 40%

Joint Ventures Labor Arbitrage

Illustrative examples.6

Enablers to further structural advantages

e.g. Building a 800/900 MHz network is typically 5x more

cost efficient1) compared to 2.6 GHz

1) Weighted coverage and capacity. Source: Tele2 and Nokia. Illustrative examples.

Focus on LTE Customer data World class systems

e.g. Benefit from exiting old data warehouse system 20 MSEK

e.g. RTR increase September 2014 YoY 3x implying revenues

of 14 MSEK

LTE Real Time Rating Business Intelligence

7

The Challenger ProgramWe will become #1 in effectiveness and efficiency

Simplify

Discipline

Consolidate

Transform

8

We will deliver simplification

Product development consolidation Retiring legacyProduct portfolio

simplification

% of shared product lifecycle activities1)

<10% >75%

High

1) Indicative examples. Benchmark: Accenture, August 2014. Tele2:

Low

Product Development

Simplify Discipline Consolidate Transform

9

We will drive discipline in everything we do

Best practice sharingLeverage onlineAnalytics

Total marketing spend as % of revenue1)

7% 3% ~5% >50%

IndependentStructured best practice sharing

Online share as % of sales1) Group-wide knowledge sharing1)

Marketing Spend Online Sales Knowledge Sharing

Best performerWorst performer Best performerWorst performer

Simplify Discipline Consolidate Transform

1) Indicative examples. Benchmark: Accenture, August 2014. Tele2:10

We will increase consolidation in technology

Rationalization Service deliveryData center consolidation

e.g. Estimated labor arbitrage 40%

IT cost as % of Opex1)

5% 3% 2-3

Number of core data centers1)

IT Costs Data Centers Labor Arbitrage

Best performerWorst performer Best performerWorst performer

Simplify Discipline Consolidate Transform

* Excluding Kazakhstan1) Indicative examples. Benchmark: Accenture, August 2014. Tele2:11

We will transform our support functions

Leverage scale & skill Procurement scope increase

Self service adoption increase

% of FTE in shared operations1)

0% 70%

Share of total sourcing spend managed globally1)

0% 90%>50%

Online self service share1)

Shared Operations Online Self Service Sourcing Spend

Best performerWorst performer Best performerWorst performer HighLow

Simplify Discipline Consolidate Transform

1) Indicative examples. Benchmark: Accenture, August 2014. Tele2:12

Today Target

A multi-year investment program that will realize significant benefits

* Indicative program benefits and costs. Analysis phase will identify and validate total Opex, Capex and Revenue benefits. Baseline: Forecast FY 2014

Productivity improvement: 1 BSEK (5%)

Target2015 2016 2017 20182015 2017 20182016

Ramp-up of indicative costs and benefits over 4 years

BenefitsRestructuring costs / investments

13

We are analyzing our ideas and estimate 3-6 months before commencing execution

2015 2016

TODAY

2014

We will come back with more details at Q2 reporting on 21 July 2015, and will report on progress quarterly until full benefits have been realized

21/7

2017 2018

Investment phase

Benefits phase

14

Summary

Discipline Consolidate TransformSimplify

15

Q&A

Agenda11.00-11.25 Way2Win Mats Granryd

Lars Torstensson

11.25-11.50 Focused Technology Choices Joachim Horn

11.50-12.15 Value Champion Anders Olsson

12.15-12.40 Step-Change Productivity Allison Kirkby

12.40-12.50 Q&A

12.50-13.30 Lunch Atrium

13.30-14.00 Sweden Thomas Ekman

14.00-14.15 Baltics Niklas Sonkin

14.15-14.45 The Netherlands Jeff Dodds

14.45-14.55 Q&A

14.55-15.00 Summary Mats GranrydAllison Kirkby