presentation 2q05

Telenor – Second Quarter 2005 : Telenor – Second Quarter 2005


Group Overview : Group Overview Jon Fredrik Baksaas President and CEO


Q2 2005Strong revenue and subscriber growth : Q2 2005 Strong revenue and subscriber growth Revenue growth of 9% Record high mobile subscriber growth Increased or stable market shares in all mobile operations Kyivstar ARPU improved from last quarter Revenues (NOKm) Mobile subscriber development (million, 100% Basis) 72% growth 9% growth


Q2 2005Stable EBITDA and underlying CAPEX growth : Q2 2005 Stable EBITDA and underlying CAPEX growth EBITDA: Strong improvement in Kyivstar Offset by Q204 sales gains, Fixed and Telenor Pakistan CAPEX: Growth due to strong subscriber pick up Telenor Pakistan licence included in Q204 Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm)


Mobile : Mobile


MobileRecord high subscriber growth : Total Consolidated Total Pro Rata 100% figures (all companies) Mobile Record high subscriber growth Subscriber figures in millions


Slide7 : Mobile revenue growth of 5% 52k net adds in Q2 Stable market share at 56% EBITDA margin down due to high sales and marketing costs Subscriptions (‘000) Telenor Mobil – Norway Revenue and subscriber growth Revenues (NOKm) / EBITDA %


Slide8 : Revenue growth of 11% in local currency 10% ARPU increase from Q1 Market position improved EBITDA margin 24% Subscriptions (‘000) Sonofon - Denmark Strong improvement Revenues (NOKm) / EBITDA % Figures from period as associated company are according to local GAAP


Slide9 : Revenue growth of 73% in local currency 1.7 million net adds in Q2 High investments in infrastructure ARPU improved from Q1 2005 Strong increase in EBITDA Subscriptions (‘000) Kyivstar – Ukraine Close to 10 million subscribers Revenues (NOKm) / EBITDA %


Slide10 : Revenue growth of 8% in local currency 32k net adds in Q2 Market share stable at 34% EBITDA-margin affected by higher interconnection charges UMTS services launched in June Revenues (NOKm) / EBITDA % Subscriptions (‘000) Pannon GSM – Hungary Pressure on margins


Slide11 : Revenue growth 30% in local currency EBITDA margin and ARPU stable 304k net adds in Q2 Market share stable at 22% Revenues (NOKm) / EBITDA % Subscriptions (‘000) DiGi – Malaysia Another strong quarter


Slide12 : Revenue growth of 52% in local currency 776k net adds in Q2 Market share increased to 62% Strong subscriber growth reduces ARPU EBITDA-margin down due to higher SAC Revenues (NOKm) / EBITDA % Subscriptions (‘000) GrameenPhone – Bangladesh Strong growth – reduced margins


Telenor Pakistan Nearly one million subs after four months : Telenor Pakistan Nearly one million subs after four months 492k net adds in Q2 Total subs 836k Low ARPU Population coverage 23% Penetration approx. 8% Subscriber market share (Telenor estimates)


Major associated mobile companies : Major associated mobile companies Vimpelcom – Russia/CIS Subscribers (million) DTAC – Thailand Subscribers (million) Telenor’ share of Market Value (end of June): NOK 13.7 Bn Telenor’ share of Market Value (DTAC and UCOM at the end of June): NOK 3.8 Bn


Fixed Line : Fixed Line


Fixed NorwayMigration from PSTN/ISDN continues : Fixed Norway Migration from PSTN/ISDN continues Revenues down 1.4% Further reductions in PSTN/ISDN 30k net adds within ADSL in Q2 EBITDA-margin down, but positively affected by one-offs Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm)


Fixed NorwayADSL growth fuels VOIP migration : Fixed Norway ADSL growth fuels VOIP migration Tiscali from wholesale to retail from Q1 2005 62% YoY growth in ADSL 32% ADSL penetration 180k new Telenor retail subscribers the last 12 months Telenor ADSL retail market share 60%


Fixed NorwayMigration to VoIP : Fixed Norway Migration to VoIP Total Market - Telephony Subscribers Total Tel retail Tel wholesale VoIP private * Other operators ** *Telenor estimates VoIP in consumer market, including Telenor VoIP subs ** Telenor estimates Modest reduction in total fixed telephony subscribers Migration from PSTN/ISDN to VoIP Wholesale line rental stable


Broadcast : Broadcast


Broadcast Continued strong position : Broadcast Continued strong position Revenue growth of 5% Continued subscriber growth Stable EBITDA margin EBIT margin increased Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm)


Slide21 : Group Financial Overview Q2 2005 Torstein Moland CFO


Key messages Q2 2005 : Key messages Q2 2005 Revenue growth of 9% Record high mobile subscriber growth Increased or stable market shares in all mobile operations Kyivstar ARPU improved from last quarter


Slide23 : Reported P&L Q2 2005 Q2 2004 Revenue EBITDA EBIT Profit before Tax 1 709 2 983 2 990 5 698 15 226 9 296 6 789 20 957 60 701 2 041 3 325 2 859 5 630 16 542 4 560 7 426 7 560 18 302 52 889 Net Income 2004 NOKm 2003 * 5 677 EPS (NOK) 1.19 0.97 3.25 2.57 * Not IFRS adjusted


Adjusted EBITDA : Adjusted EBITDA Adjusted EBITDA (NOKm) and Margin Comments Q2 (YoY) Reduced EBITDA-margin mainly explained by: Launch in Pakistan Reduced EBITDA in Fixed Strong growth and increased competition in the mobile operations.


Headcount and CAPEX : Headcount and CAPEX Headcount Capex / Sales Capex Breakdown (NOKm) 20 900 19 450 6 454 12 745 6 283 22 400


Net Debt/EBITDA of 0.9 : Net Debt/EBITDA of 0.9 Net Debt (NOKbn) to LTM EBITDA (x) Net Debt Changes (NOKbn) Net Debt 31 March 2005 15.9 EBITDA - 5.6 Net interest 0.4 Income tax paid 0.2 Investments - paid 3.6 Investments - proceed -1.2 Share buy back 1.5 Dividends, incl. to minority 2.7 Accruals 0.3 Net Debt 30 June 2005 17.8 17.8 15.9 19.2 20.6 22.0 19.3 1.0 1.1 1.0 0.9 0.8 0.9


Share buy back this quarter : Buy back of 13.9 million shares 6.4 million shares in the market 7.5 million shares from the government Share buy back this quarter


Outlook for 2005 : Outlook for 2005 Mobile Domestic Fixed Line Broadcast Decrease in revenue and EBITDA Strong growth in ADSL subscribers Cost reductions High growth in revenues and EBITDA Increased Capex Improved EBITDA Telenor Group High revenue growth High EBITDA growth Capex/sales ratio stable vs. 2004


Slide29 : ARPU development in mobile operations (NOK) Telenor Mobil - Norway Pannon GSM - Hungary Kyivstar - Ukraine Digi.Com - Malaysia GrameenPhone - Bangladesh


Slide30 : Sonofon - Denmark MoU/APPM development in Mobile Operations Telenor Mobil - Norway Pannon GSM - Hungary Kyivstar - Ukraine Digi.Com - Malaysia GrameenPhone - Bangladesh


International mobile associates : International mobile associates


Interest bearing debt in partly owned companies : Interest bearing debt in partly owned companies


Slide33 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX


Slide34 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX


Slide35 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX


Slide36 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX


Slide37 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX


Slide38 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX


Slide39 : Quarterly financial performance Revenues (NOKm) / EBITDA % EBITDA and Capex (NOKm) EBIT (NOKm) EBITDA CAPEX