CEO Letter - Q4 2023

Strong foundations in place allow Tele2 to write the next chapter

Entering a new year is like turning a page on a story that continues. What happened on the previous page sets the scene for the continuation. At Tele2, 2023 was a good and important year that helped laying strong foundations for our continued development. As we have returned to top-line growth within all major
business areas, we are now addressing key elements that will provide operational leverage to the business for the coming years. We are doing this from a position of strength based on an overall financial leverage at the bottom end of our communicated range. This allows us to propose an increase of our dividend to SEK
6.90 per share.

We have spoken many times about the need to consolidate several IT platforms and build the most capital efficient 4G/5G mobile networks in the industry. Within both areas, we are making major progress and expect the main part of our IT infrastructure to be consolidated by this spring, as planned. Our network
modernization is progressing at speed. We will have complied with regulatory requirements to replace radio equipment in our 4G/5G JV by the end of 2024. At the end of 2025, when closing down our 3G JV, we will have concluded very intense years of modernization, partly forced by regulatory decisions, allowing us to move back closer to historical investment levels in 2026.

Next stage – optimized go-to-market

As we turn the page from 2023, we will gradually allocate more resources directly to our go-to-market efforts and less to maintaining and replacing legacy systems. The new pages for 2024-2026 will see us building better and more digital tools for addressing customer needs. When we benchmark Tele2 on efficiency,
we generally come out very well. However, we do see room for improvement in terms of the costs we incur to attract and retain customers, whether that be in terms of commissions in physical retail or cost of customer interactions with our staff and support services.

Over the course of 2024-2026, we have identified opportunities to save around SEK 600 million on an exit run-rate basis. We will be working actively towards realizing these savings as an effect of a reshaped go-to-market carried out through an internal Strategy Execution Program.

Directionally, we have already started adjusting our go-to-market execution, from being too dependent on volumes in external retail to building stronger and more long-term customer relationships. Building on our portfolio of assets, which include mobile, broadband, streaming and TV, we can deliver whatever
mix of services and hardware our customers would like, and the task going forward is to make their interactions with us more convenient, reducing friction and complexity.

This transition will happen gradually over the next three years and build a stronger Tele2 overall. If 2020-2023 was heavily tilted towards fixing legacy, 2024-2026 will increasingly shift more resources towards ease of use, better customer understanding, automation, and business-led service development.

Sweden delivers strong fourth quarter

While we are excited about the opportunities ahead, the organization is focused on delivering the best possible customer experience today. For Q4, I am very pleased to see a 3% organic underlying EBITDAaL growth in Sweden, supported by accelerated end-user service revenue growth in B2C and another solid quarter in B2B.

Performance in the Baltics continues to impress

In the Baltics we have shown very strong numbers throughout the year, despite challenging macro conditions, and Q4 remained solid too with 8% organic underlying EBITDAaL growth. Tele2 has proved over and over in the Baltics that customers are willing to pay for our services and remain loyal to the brand thanks to high customer satisfaction.

Financials

From a 2023 group financial perspective, I am glad to see that we have delivered 4% organic end-user service revenue growth alongside 2% organic underlying EBITDAaL growth, in line with our guidance in a challenging year.

In terms of future performance, we would like to give some perspective on
where we are heading. For 2024, we are guiding for:

• 3-4% organic end-user service revenue growth
• 1-3% organic underlying EBITDAaL growth
• 13-14% capex to sales (excluding spectrum and leases)

To give investors an outlook beyond 2024, we currently estimate similar growth in end-user service revenue. The new levels of efficiency we have identified from focusing more on customer driven development rather than legacy consolidation will be realized through our Strategy Execution Program.
Hence, we expect stronger underlying EBITDAaL growth as the effect of our improvements start coming through.

We will also finalize the main network related investments in 2025 in order to shut down our 3G JV, leading to a capex to sales of 13-14% for the year. For 2026, we will see reduced capex as the main swap and roll-out, partly dictated by regulatory requirements, will be done and we will be back to a pure demanddriven roll-out, leading to a Capex to sales level of 10-12%.

As a result of these changes, we are working towards the following mid-term outlook:

• Low to mid-single-digit end-user service revenue growth
• Mid-single-digit underlying EBITDAaL growth
• 10-12% capex to sales (excluding spectrum and leases)

The page for 2024 is yet to be filled with actions and deliverables. As we continue writing the next chapter of the story, I am pleased to see that our foundations are strong. We are well positioned to continue delivering high quality services that are virtually indispensable for people and businesses alike. By making our technologies more powerful, sustainable, and reliable we continue to enable a society of unlimited possibilities. We are very proud to play our part in that development.

Kjell Johnsen
President and Group CEO