CFO – Trond Westlie The following presentations are 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 these presentations or any of its contents. Information in the following presentations 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.
The following presentations contain statements regarding the future in connection with Telenor's growth initiatives, profit figures, outlook, strategies and objectives. 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. These factors include the risk factors relating to Telenor's activities described in Telenor's 2005 Annual Report on Form 20-F filed with the Securities and Exchange Commission in the USA under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” (available at www.telenor.com/ir/). Strong Positions in the World’s Fastest Growing Mobile Markets
Revenue EBITDA- Country Company Market share1 growth margin
Ukraine Kyivstar 45% 78% 62%
Bangladesh GrameenPhone 62% 51% 55%2
Malaysia DiGi 25% 37% 45%
Thailand DTAC 30% 13% 35%
Pakistan Telenor 10% N.A. N.A.
Russia/CIS VimpelCom 34% 47% 46%
-Q1 margin 1Telenor Estimates - Revenue growth in local currency Q1 YoY - VimpelCom Q4 figures 2Underlying EBITDA-margin Solid Position in Scandinavia within Mobile, Broadband and Pay-TV
Mobile No. 1 No. 2 No. 3
Broadband No. 1 No. 3 No. 2
Pay-TV No. 1 No. 2 No. 2 Key Figures Q1 2006 (NOKm)
External Revenues EBITDA Other Other 8 % Fixed 2 % 20 %
Fixed 21 % Broadcast Mobile 5 % Mobile 64 % 74 %
Broadcast 7 %
CAPEX Mobile EBITDA Other 4 % 1 432 Fixed 1 323 17 %
719 700 659 540 Broadcast 305 2 % 202 55
-77 No Tha M B H De S P P Mobile Uk r w a ung a a oM ki n n 77 % r l r ed a a w i g m st l i ysi a n ont l a en a a ad an n e y r r a y d k esh e Q1 2006 Strong Growth and Margin Improvement
Revenues (NOKm)/EBITDA %
21 872
• Revenue growth of 43% - 15 270 36,1 % underlying 15% 33,4 %
• EBITDA margin increased from
33% to 36% Q1 2005 Q1 2006
EBITDA CAPEX • CAPEX/Sales of 17% 7 888
5 106
3 360 3 703
Q1 2005 Q1 2006 Outlook 2006
• Revenue growth: Around 30%
• EBITDA margin: Above 34%
• CAPEX/Sales: Above 20% Highlights Nordic Operations
• Transformation from fragmented to full-scale Nordic operator
• Successful turnaround of Sonofon in Denmark
• Continued strong cash flow from Norwegian operations Mobile Norway Strong margin improvement
Revenues (NOKm)/ EBITDA%
3 235 3 049 3 121 3 105 2 963 2 838 • Revenue growth of 9% 43 % 38 % 39 % • EBITDA margin increased by 7 p.p. 35 % 35 % 37 %
• Stable market share Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 • Increased ARPU EBITDA CAPEX 1 323 1 218 1 186 1 119 1 066 1 001
461 343 194 220 172 129
Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Fixed Norway Revenue Development Last Twelve Months
NOKm
17 186 + 787 +53 16 631
-1 395
-3.2%
Q204-Q105 POTS Broadband Other Q205-Q106
Last twelve months Note: Adjusted for outsourced managed services Targets Fixed Norway
• Maintain broadband market share
• Reduce cost base by NOK 1.5 Bn
• Further reduction of cost base from 2007 to 2010
Cash Flow Target of NOK 3.5 Bn Turnaround of Mobile Sweden 3 8 % Telenor 24 %
TeliaSonera • Stable market shares 44 % Tele2 24 %
• A superior 3G network Note: RevenueMarket shares as of Q1 2006 • Low profitability 3G comparison Telia/Tele2 - Telenor • Potential for growth
Telia/Tele2 April 24, Telenor April 1, 2006 2006 (Source: Tele2) Mobile Sweden Turnaround Initiatives
1 Network optimization
2 IS/IT clean-up
3 Simplified billing
4 Web sales and self-services
5 Improved time to market Mobile Sweden Financial Targets
• Improve revenue market share
• Total OPEX and CAPEX savings of SEK 600 Mn
Medium term target: Above 25% EBITDA margin Nordic Operations Medium Term Targets
Norway • Maintain cash flow and market shares
• Increase Mobile EBITDA margin above 25% Sweden • Considerably improve Fixed cash flow
Denmark • Increase Mobile EBITDA margin above 25% Mobile Operations Passing 100 mill subs this year
Total Consolidated
Total Pro Rata 100% figures (all companies)
Subscription figures in millions
89,6 82,7 74,5 67,1 60,1
52,7 47,8 46,2 42,241,4 34,5 31,2 27,8 27,9 24,8 24,8 21,4 19,0
Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 GrameenPhone - Bangladesh
Subscriptions/Market share ARPU MoU/APPM
1 099 6 427 244 227 233 5 542 913 196 674 4,8 516 3,8 62 % 2 388 2,9 2,6 62 % 62 % 62 % 1 141
2003 2004 2005 Q1 2006 2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006
Revenues/EBITDA% EBITDA and CAPEX
29 524
EBITDA CAPEX 20 890 19 302
14 667 All figures according to 12 695 11 59211 636 local currency. 8 269 2003-figures are not according to same 65 % 60 % 3 545 accounting principles 50 % and KPI definitions as 2004-2006. EBITDA and CAPEX 2003 2004 2005 adjusted for change in 2003 2004 2005 accounting treatment of lease in 2005 Kyivstar - Ukraine
Subscriptions/Market share ARPU MoU/APPM 14 965 13 925 110 98 68 67 83
49 56 40 6 252 1,2 47 % 0,8 3 037 45 % 46 % 45 % 0,5 0,4
2003 2004 2005 Q1 2006 2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006
Revenues/EBITDA% EBITDA and CAPEX 5 769
EBITDA CAPEX
3 212 3 341 2 896
2 044 2 065 2 001
1 195 All figures according to 61 % 60 % 56 % local currency. 744 2003-figures are not according to same accounting principles and KPI definitions as 2003 2004 2005 2003 2004 2005 2004-2006 DiGi - Malaysia
Subscriptions/Market share ARPU MoU/APPM 5 086 4 795 62 175 60 169 58 166 162 54
3 239
2 205
0,36 0,36 0,34 0,33 25 % 25 % 20 % 22 %
2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006
Revenues/EBITDA% EBITDA and CAPEX 2 899
2 231 EBITDA CAPEX
1 714 1 259
979
44 % 43 % 41 % 699 688 563 520 All figures according to local currency. 2003-figures are not according to same accounting principles and KPI definitions as 2003 2004 2005 2003 2004 2005 2004-2006 Mobile Operations
Strong Growth Potential 60
Expected Subscription Growth by 2008 (million)
• Current population footprint of 650 million
• Expect the total market to grow with 20 ~130 million subscriptions by 2008 18 15 12
4 1 H Ma T Uk B Pa R hailand anglades ungar u k ssi r l a a i s i ysi n t a a e y n a h
Source: Telenor estimates Selective Expansion Criterias
• Market size and penetration growth • Political stability • Regulatory environment
• Cultural fit • Strong business case Egypt Opportunity Subscriber development (000)
8000 7000 6000 5000 4000 Facts 3000 • Population 2005 (millions) : 75 2000 1000 • Penetration 2005 : 17% 0 • GDP/pop 2005 (USD) : 1380 2003 2004 2005 • GDP growth : 5% Mobinil Vodafone
Market share (%) Strategic Rationale 100 % • The MENA region has untapped potential 90 % 80 % • Low penetration 70 % 60 % • Large and fast growing market 50 % • Utilize Telenor’s greenfield expertise 40 % 30 % 20 %
10 % 0 % 2003 2004 2005
Mobinil Vodafone Vietnam Opportunity Subscriber development (000)
4000 3500 3000 2500 2000 1500 1000 500 0 Facts 2003 2004 2005
• Population 2005 (millions) : 84 Vinaphone Mobifone Viettel S-fone • Penetration 2005 : 10% • GDP/pop 2005 (USD) : 616 Market share (%) • GDP growth : 8% 100 % 90 %
80 % Strategic Rationale 70 % 60 % • Within a core region 50 % • Low penetration 40 % 30 % • Large and fast growing market 20 % 10 % 0 % 2003 2004 2005
Vinaphone Mobifone Viettel S-fone Serbia Opportunity –Mobtel/Mobi63 Subscriber development (000) 3500
3000
2500
2000
1500 Facts 1000
• Population 2005 (millions)* : 7.5 500 • Penetration 2005 : 65% 0 • GDP/pop 2005 (USD) : 2.500 2003 2004 2005 • GDP growth (2006-2007) : 5% Mobtel/Mobi63 MTS (TelekoM Srbija)
* Excluding Montenegro and Kosovo Market share (%)
100 % 90 %
80 % Strategic Rationale 70 % 60 % • Within a core region 50 % • Synergies with Promonte and Pannon 40 % 30 % 20 % 10 % 0 % 2003 2004 2005
Mobtel/Mobi63 MTS (Telekom Srbija) Summary – Main Priorities
• Maintain cash flow in Norway
• Maintain our leading Scandinavian broadband position
• Profitable growth and selective international expansion in international mobile