Tele2 — Interim / Quarterly Report 2022

Jul 19, 2022

Tele2 Interim Report Second Quarter

Q2 2022 HIGHLIGHTS

• End-user service revenue of SEK 5.0 billion increased by 3% compared to Q2 2021 on an organic basis due to strong performance in the Baltics, Sweden B2B and slight tailwind from roaming.
• Total revenue of SEK 6.8 billion increased by 3% compared to Q2 2021 on an organic basis.
• Underlying EBITDAaL of SEK 2.5 billion increased by 3% organically compared to Q2 2021 driven by end-user service revenue growth and cost savings related to the Business Transformation Program.
• Net profit from total operations of SEK 0.8 billion decreased by SEK 0.5 billion compared to Q2 2021, mainly related to a settled dispute from previously divested operations and the release of a provision in Q2 2021.
• Equity free cash flow from continuing operations of SEK 0.7 (1.3) billion. Over the last twelve months, SEK 5.3 billion was generated, equivalent to SEK 7.7 per share.
• First tranche of ordinary dividend and the extraordinary dividend from T-Mobile Netherlands transaction paid during the quarter.
• Successfully issued first sustainability linked bond.

Key financial data

SEK million	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
Continuing operations
End-user service revenue	4,969	4,815	3%	9,850	9,544	3%
Revenue	6,820	6,572	3%	13,565	13,122	3%
Operating profit	1,140	1,062		4,044	2,264
Profit after financial items	1,022	972		3,695	2,044
Underlying EBITDAaL	2,463	2,372	3%	4,934	4,686	5%
Capex excluding spectrum and leases	737	730		1,407	1,432
Operating cash flow	1,726	1,642		3,527	3,255
Operating cash flow, rolling 12 months				6,754	6,541
Equity free cashflow	750	1,269		1,660	2,089
Equity free cash flow, rolling 12 months				5,331	4,674
Total operations
Net profit	847	1,367		3,322	2,232
Earnings per share (SEK)	1.23	1.98		4.81	3.24
Equity free cashflow	750	1,267		1,660	2,087
Economic net debt to underlying EBITDAaL				2.5x	2.5x

Continuing and discontinued operations

Non-IFRS measures

Figures presented in this report refer to Q2 (April-June) 2022 and continuing operations unless otherwise stated. Figures shown in parentheses refer to the comparable periods in 2021. Discontinued operations include the former operations, primarily in the Netherlands, Germany, Croatia and Kazakhstan. See Note 10.

This report contains certain non-IFRS measures which are defined and reconciliated to the closest reconcilable line items in the section Non-IFRS measures. Note that organic growth rates exclude effects from currency movements. For further definitions of industry terms and acronyms, please refer to the Investor section at www.tele2.com or see section Other financial metrics.

CEO LETTER – Q2 2022

We are on a steady course to deliver on our 2022 guidance. "

Having reached the half-way point of 2022, we are pleased to see our efforts paying off and that we are on a steady course to deliver on our 2022 guidance. Tele2 is at heart a growth oriented company and it means a lot to us when we see that all major business lines are getting into growth territory. Shareholders have received a total of SEK 16,40 in dividends during Q2 after the successful closing of our sale in the Netherlands and payment of the first tranche of our ordinary dividend, as declared in February, further showing Tele2's commitment to our shareholder remuneration policy.

In Sweden, we see far more activity at our offices and are pleased that people can be together to engage both professionally and socially. The importance of physical interaction, body language and casual conversations should not be underestimated when trying to foster a creative environment.

During Q2, we took a major step towards our ambition to "Lead in sustainability" through issuing our first sustainability linked bond. This follows our commitment to deliver on our science-based targets for scope 1, 2 and 3 carbon emissions and is one way of showing the value behind these commitments. We are also very pleased to have been ranked the most sustainable telecom operator in Sweden by Gokind.

Our Baltic operations continue to show market leading performance and navigate very well in an operating environment with major uncertainties. The war in Ukraine impacts life everywhere, but becomes very prominent in the Baltics due to geographical proximity and the major influence of energy prices in the economy. I am proud to see how well our colleagues are coping with the situation!

Over the last couple of months, we have continued to develop our strategic positioning within B2C Sweden. During the second half of 2022, we will start reaping the benefits of our strategic cooperation with Viaplay and as we improve our support systems, we will be able to accelerate our convergence story over the next quarters. We also see stronger trends within mobile, based on adjustments of our portfolio and slightly less aggressive commission trends in the market.

The Swedish B2B business enjoys a solid trend of good performance and delivers growth, which is a major achievement. B2B markets can be very challenging and we have previously seen those trends also in Sweden, but the foundations of the business have never been as strong as they are now and that gives realistic expectations of continued strong momentum. During the second quarter, we continued working on 5G private networks and see good momentum in this new segment.

The operating environment is challenging for many industries, with high energy prices and increasing inflationary trends in the economy. We are partly hedged against some of these threats and are benefitting from the improvements we are making to our business. Our ambition to continue delivering in accordance with our mid-term guidance is therefore fully realistic even though individual quarters will see fluctuations in the conversion of revenue growth to profitability. With the initiatives we already have set in motion, we consider ourselves well underway to realize the ambition we have set forth for this year.

During the second half of 2022, we expect to secure important radio spectrum in the Baltics and continue ramping up our 5G roll-out in all countries. Supply chain issues may have some impact on the roll-out speed, but we are progressing well towards our coverage objectives.

Kjell Johnsen

President and Group CEO

Financial overview

Analysis of revenue

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
Mobile	1,453	1,428	2%	2,862	2,841	1%
- Postpaid	1,203	1,186	1%	2,382	2,367	1%
- Prepaid	249	242	3%	480	473	1%
Fixed	1,432	1,450	-1%	2,859	2,887	-1%
- Fixed broadband	708	692	2%	1,412	1,370	3%
- Digital TV	674	698	-3%	1,344	1,393	-4%
- Cable & Fiber	424	424	0%	843	844	0%
- DTT	250	274	-9%	501	550	-9%
- Fixed telephony & DSL	51	60	-15%	103	123	-16%
Landlord & Other	165	168	-1%	336	338	-1%
Sweden Consumer	3,050	3,046	0%	6,056	6,066	0%
Sweden Business	989	962	3%	1,962	1,909	3%
Baltics	929	806	12%	1,832	1,570	13%
End-user service revenue	4,969	4,815	3%	9,850	9,544	3%
Operator revenue	608	590	2%	1,203	1,148	4%
Equipment revenue	1,243	1,167	6%	2,511	2,430	2%
Revenue	6,820	6,572	3%	13,565	13,122	3%

End-user service revenue increased by 3% organically driven by continued strong performance in the Baltics and Sweden B2B. International roaming revenue continues to have a positive effect of SEK 29 million compared to Q2 2021.

• Sweden Consumer was flat as continued growth in mobile and fixed broadband was offset by continued decline in legacy services.
• Sweden Business increased by 3% as growth in mobile offset decline in fixed.
• Baltics increased by 12% in local currency driven by both volume growth and strong ASPU (Average Spend Per User) growth from price adjustments and upselling.

Total revenue increased by 3% organically driven by growth in end-user service revenue, equipment revenue and operator revenue.

Refer to Note 2 and Overview by segment for a breakdown of the segments.

Analysis of income statement

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Revenue	6,820	6,572	13,565	13,122
Underlying EBITDAaL	2,463	2,372	4,934	4,686
Reversal lease depreciation and interest	326	314	653	630
Underlying EBITDA	2,790	2,686	5,588	5,316
Items affecting comparability	-88	-121	-133	-190
EBITDA	2,702	2,565	5,454	5,127
Depreciation/amortization	-1,560	-1,526	-3,080	-2,898
- of which amortization of surplus from acquisitions	-433	-390	-866	-691
- of which lease depreciation	-301	-299	-607	-600
- of which other depreciation/amortization	-826	-837	-1,607	-1,607
Result from shares in associated companies and joint ventures	-1	22	1,670	35
Operating profit	1,140	1,062	4,044	2,264
Net interest and other financial items	-118	-90	-349	-219
Income tax	-175	173	-377	-32
Net profit	847	1,146	3,318	2,012

Underlying EBITDAaL increased by 3% organically driven by higher enduser service revenue and cost savings from the Business Transformation Program.

Items affecting comparability of SEK -88 (-121) million was mainly driven by restructuring costs related to the Business Transformation Program in Sweden. Refer to Note 3 for more details.

Result from shares in associated companies and joint ventures of SEK -1 (22) million decreased compared to Q2 2021 driven by the divestment of T-Mobile Netherlands.

Net interest and other financial items of SEK -118 (-90) million increased compared to Q2 2021 as last year included a positive non-cash effect of SEK 21 million due to the release of a provision in connection with a favorable ruling in a dispute with the Swedish tax authority.

Income tax of SEK -175 (173) million increased compared to Q2 2021 as income tax in Q2 2021 included a positive non-cash effect of SEK 350 million related to the favorable ruling mentioned above.

Analysis of cash flow statement

SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Continuing operations
Underlying EBITDA	2,790	2,686	5,588	5,316
Items affecting comparability	-88	-121	-133	-190
Amortization of lease liabilities	-275	-270	-657	-651
Capex paid	-855	-652	-1,609	-1,738
Changes in working capital	-323	80	-546	54
Net financial items paid	-162	-175	-270	-279
Taxes paid	-379	-304	-768	-465
Other cash items	42	25	56	42
Equity free cash flow	750	1,269	1,660	2,089
Equity free cash flow, rolling 12 months1)			5,331	4,674
Total operations
Equity free cash flow, continuing operations	750	1,269	1,660	2,089
Equity free cash flow, discontinued operations	—	-3	—	-3
Equity free cash flow	750	1,267	1,660	2,087

1) Reconciliation of equity free cash flow rolling 12 months are presented in an excel document (Q2 2022-financials to the market) on Tele2's website www.tele2.com

Capex paid of SEK -855 (-652) million increased compared to Q2 2021 driven by spectrum payments and higher network capex.

Changes in working capital of SEK -323 (80) million was negatively impacted by higher inventory levels, from previously lower levels, primarily driven by handsets and network equipment and temporarily lower levels of external handset financing.

Taxes paid of SEK -379 (-304) million increased compared to Q2 2021 driven by improved operational performance.

Equity free cash flow from continuing operations over the last twelve months amounted to SEK 5.3 billion, equivalent to SEK 7.7 per share.

Analysis of financial position

Total operations SEK million	Jun 30 2022	Dec 31 2021
Bonds	21,051	21,325
Commercial papers	1,148	400
Financial institutions and other liabilities	3,752	3,698
Cash and cash equivalents	-591	-880
Other adjustments	-422	-276
Economic net debt	24,938	24,268
Lease liabilities	5,097	5,414
Net debt	30,035	29,681
Underlying EBITDAaL, rolling 12 months1)	9,887	9,639
Economic net debt to Underlying EBITDAaL	2.5x	2.5x
Unutilized overdraft facilities and credit lines	8,944	8,590

1) Includes all operations owned and controlled by Tele2 at the end of each reporting period.

Economic net debt of SEK 24.9 (24.3 at end of 2021) billion increased by SEK 0.7 billion as cash generation did not fully offset the first tranche of the ordinary dividend and the extraordinary dividend from the T-Mobile Netherlands transaction.

Economic net debt to underlying EBITDAaL (financial leverage) of 2.5x (2.5x end of 2021) was in the lower part of the leverage target range of 2.5- 3.0x at the end of Q2 2022.

Financial guidance

Financial guidance

Tele2 AB provides the following guidance for continuing operations in constant currencies.

Full-year 2022 (unchanged)

• Low single-digit growth of end-user service revenue.
• Mid single-digit growth of underlying EBITDAaL.
• Capex excluding spectrum and leasing assets of SEK 2.8–3.3 billion.

Mid-term (unchanged)

• Low single-digit growth of end-user service revenue.
• Mid single-digit growth of underlying EBITDAaL.
• Annual capex excluding spectrum and leasing assets of SEK 2.8–3.3 billion during the roll-out of 5G and Remote-PHY.

Dividend

The Annual General Meeting on April 28, 2022 approved that an ordinary dividend of SEK 6.75 in total be paid per ordinary A and B share in two tranches. The first tranche of SEK 3.40 was paid out on May 5, 2022 and the second tranche of SEK 3.35 will be paid out on October 14, 2022. The Annual General Meeting also approved an extraordinary dividend of SEK 13.00 per ordinary A and B share related to the completed T-Mobile Netherlands divestment which was paid in connection with the first tranche of the ordinary dividend on May 5, 2022.

Financial policy

• Tele2 will seek to operate within a range for economic net debt to underlying EBITDAaL of between 2.5–3.0x, and to maintain investment grade credit metrics.
• Tele2's policy will aim to maintain target leverage by distributing capital to shareholders through:
  • An ordinary dividend of at least 80 percent of equity free cash flow, and,
  • Extraordinary dividends and/or share repurchases, based on remaining equity free cash flow, proceeds from asset sales and re-leveraging of underlying EBITDAaL growth.

Group summary

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
END-USER SERVICE REVENUE
Sweden	4,039	4,009	1%	8,018	7,975	1%
Lithuania	511	435	15%	1,008	844	15%
Latvia	269	237	11%	530	460	11%
Estonia	149	135	8%	294	265	7%
Total	4,969	4,815	3%	9,850	9,544	3%
REVENUE
Sweden	5,397	5,286	2%	10,761	10,621	1%
Lithuania	835	747	9%	1,646	1,439	11%
Latvia	398	363	7%	785	716	6%
Estonia	222	203	6%	433	400	5%
Internal sales, elimination	-32	-28	9%	-60	-55	7%
Total	6,820	6,572	3%	13,565	13,122	3%
UNDERLYING EBITDAaL
Sweden	1,938	1,907	2%	3,903	3,771	3%
Lithuania	317	279	11%	622	550	9%
Latvia	160	144	8%	314	279	9%
Estonia	48	42	11%	95	87	5%
Total	2,463	2,372	3%	4,934	4,686	5%
CAPEX
Sweden	627	662	-5%	1,237	1,308	-5%
Lithuania	50	35	36%	79	58	32%
Latvia	26	16	52%	37	29	21%
Estonia	35	16	111%	54	37	44%
Capex excluding spectrum and leases	737	730	1%	1,407	1,432	-2%
Spectrum	64	—		68	333
Right-of-use assets (leases)	236	88		398	345
Total	1,037	817		1,873	2,110
of which:
– Network	439	385		799	731
– IT	170	235		350	464
– Customer equipment	112	90		216	192
– Other	16	20		43	45
Capex excluding spectrum and leases	737	730		1,407	1,432

Overview by segment

Sweden

Tele2 Sweden end-user service revenue grew by 1% in the quarter driven by strong performance within Sweden B2B. International roaming revenue continued to recover with a positive effect of SEK 19 million compared to Q2 2021.

Optimizations in the Digital Capabilities and Technology organization were executed in the quarter as part of the Business Transformation Program. Annualized run-rate savings for the Business Transformation Program reached SEK 650 million at the end of quarter and the effect on underlying EBITDAaL was approximately SEK 155 million with a net effect of SEK 75 million year-on-year.

Underlying EBITDAaL increased by 2% driven by end-user service revenue and continued execution of the business transformation program.

Capex excluding spectrum and leases amounted to SEK 627 million, a decrease of roughly SEK 35 million compared to Q2 2021 as higher network capex was offset by lower IT capex driven by improved efficiency.

Financials SEK million	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
End-user service revenue	4,039	4,009	1%	8,018	7,975	1%
Revenue	5,397	5,286	2%	10,761	10,621	1%
Underlying EBITDA	2,217	2,176		4,459	4,313
Underlying EBITDAaL	1,938	1,907	2%	3,903	3,771	3%
Underlying EBITDAaL margin	36%	36%		36%	36%
Capex
Network	358	339		678	647
IT	148	225		314	446
Customer equipment	108	88		210	188
Other	13	9		36	27
Capex excluding spectrum and leases	627	662		1,237	1,308
Spectrum	40	—		40	333
Right-of-use assets (leases)	213	66		339	289
Capex	880	728		1,617	1,930
Capex excluding spectrum and leases / revenue	12%	13%		11%	12%

Sweden Consumer

Commercial activity picked up somewhat in the quarter driven by commercial campaigns while restrictions in society driven by the pandemic were removed. Within the TV segment the main focus was on commencing the migration of customers to the new TV Hub and TV Hub mini and the new TV propositions which now includes Viaplay content to higher extent. Total end-user service revenue was flat in the quarter as growth in mobile and fixed broadband was fully offset by decline in legacy services.

Mobile postpaid net intake was strong in the quarter with 21,000 RGUs driven by FMC-bundling and Comviq. Mobile end-user service revenue increased by 2% driven by volume growth and recovering roaming revenue.

Fixed broadband end-user service revenue increased by 2% driven by both ASPU and volume growth.

Digital TV cable & fiber end-user service revenue was flat as ASPU growth fully offset the volume decline. This did not however fully offset the continued decline in the legacy DTT business resulting in Digital TV enduser service revenue declining by 3%.

	Apr-Jun 2022	Apr-Jun 2021		Jun 30 2022	Jun 30 2021	Organic %
RGUs (thousands)	Net intake			RGU base
Mobile	37	12		2,970	2,944	1%
– Postpaid	21	-1		1,966	1,924	2%
– Prepaid	16	13		1,004	1,019	-1%
Fixed	-13	-24		2,016	2,075	-3%
– Fixed broadband	6	4		937	920	2%
– Digital TV	-13	-19		905	946	-4%
– Cable & Fiber	-5	-12		631	645	-2%
– DTT	-8	-7		274	301	-9%
– Fixed telephony & DSL	-6	-10		174	209	-17%
Total RGUs	24	-12		4,986	5,019	-1%
Addressable fixed footprint	32	-5		3,688	3,511	5%

	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
ASPU (SEK)
Mobile	164	162	1%	161	160	0%
– Postpaid	205	205	0%	203	205	-1%
– Prepaid	83	80	5%	80	77	3%
Fixed	236	232	2%	235	229	2%
– Fixed broadband	253	251	0%	252	249	1%
– Digital TV	246	244	1%	245	241	1%
– Cable & Fiber	223	217	3%	221	215	3%
– DTT	301	300	0%	297	296	0%
– Fixed telephony & DSL	95	93	3%	95	93	2%
Revenue (SEK million)
Mobile	1,453	1,428	2%	2,862	2,841	1%
– Postpaid	1,203	1,186	1%	2,382	2,367	1%
– Prepaid	249	242	3%	480	473	1%
Fixed	1,432	1,450	-1%	2,859	2,887	-1%
– Fixed broadband	708	692	2%	1,412	1,370	3%
– Digital TV	674	698	-3%	1,344	1,393	-4%
– Cable & Fiber	424	424	0%	843	844	0%
– DTT	250	274	-9%	501	550	-9%
– Fixed telephony & DSL	51	60	-15%	103	123	-16%
Landlord & Other	165	168	-1%	336	338	-1%
End-user service revenue	3,050	3,046	0%	6,056	6,066	0%
Operator revenue	194	183		382	357
Equipment revenue	435	414		873	906
Internal sales	0	0		0	0
Revenue	3,679	3,643	1%	7,311	7,329	0%

Sweden Business and Wholesale

In Sweden B2B the commercial momentum continued and we saw strong results in both the SME and large segments. The focus in the SME segment continued to be on improving efficiency and driving simplification through standardized commercial contracts, enhancing our FMC capabilities. In the large private segment we have continued our focus on network and security while focusing on our emerging services such as private mobile network in order to increase sales activities and order intake. In the large public segment we signed a major governmental contract, which will serve as a framework for other public tenders for both communication and infrastructure products.

Mobile net intake was positive in the quarter with 23,000 RGUs driven by improved net intake in both the SME and large segments.

End-user service revenue increased by 3% driven by mobile on the back of volume growth and stabilized ASPU and slight tailwind from roaming, offsetting the decline in legacy fixed services.

Operator revenue for Sweden Wholesale increased by 9% driven by increased sales within A2P (application to person) and visitor roaming.

Sweden Business

	Apr-Jun 2022	Apr-Jun 2021	Jun 30 2022	Jun 30 2021	Organic %
RGUs (thousands)	Net intake			RGU base
Mobile (excluding IoT)
– Postpaid	23	10	1,060	974	9%

	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
ASPU (SEK)
Mobile (excluding IoT)
– Postpaid	134	133	1%	134	134	0%
Revenue (SEK million)
Mobile	503	454	11%	990	907	9%
Fixed	207	231	-10%	419	465	-10%
Solutions	279	277	1%	553	536	3%
End-user service revenue	989	962	3%	1,962	1,909	3%
Operator revenue	26	23		51	48
Equipment revenue	417	395		874	840
Internal sales	1	1		2	1
Revenue	1,432	1,382	4%	2,889	2,798	3%

Sweden Wholesale

Financials SEK million	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
Operator revenue	284	260		558	490
Internal sales	1	1		2	3
Revenue	286	261	9%	560	493	14%

Baltics

Lithuania

In Lithuania we continued to execute on our more-for-more strategy by prolonging and upselling existing customers, yielding good results. The 700 MHz and 3.5 GHz spectrum auctions are ongoing and we hope to commence the nationwide 5G roll-out as fast at possible. During the quarter, the NRA acknowledged that Tele2's 4G network has the best coverage in terms of average signal strength.

Mobile net intake was positive with 26,000 RGUs driven by both postpaid and prepaid. Mobile ASPU increased by 10% in local currency driven by price adjustments through more-for-more campaigns and slight tailwind from roaming.

End-user service revenue increased by 15% in local currency primarily driven by ASPU and volume growth in mobile postpaid.

Underlying EBITDAaL increased by 11% in local currency driven by higher end-user service revenue, offsetting pressure from higher inflation rates.

	Apr-Jun 2022	Apr-Jun 2021	Jun 30 2022	Jun 30 2021	Organic %
RGUs (thousands)	Net intake			RGU base
Mobile	26	19	1,974	1,901	4%
– Postpaid	14	14	1,291	1,214	6%
– Prepaid	12	5	683	687	-1%

	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
ASPU (EUR)
Mobile	8.3	7.5	10%	8.1	7.3	11%
– Postpaid	10.2	9.3	10%	10.1	9.1	10%
– Prepaid	4.7	4.5	4%	4.6	4.2	8%
Revenue (SEK million)
Mobile	509	434	14%	1,003	842	15%
– Postpaid	409	340	17%	808	664	18%
– Prepaid	99	94	3%	196	178	6%
Fixed	3	1	N/A	5	2	N/A
End-user service revenue	511	435	15%	1,008	844	15%
Operator revenue	48	56		100	115
Equipment revenue	257	243		505	452
Internal sales	18	14		32	27
Revenue	835	747	9%	1,646	1,439	11%
Underlying EBITDA	336	296		662	584
Underlying EBITDAaL	317	279	11%	622	550	9%
Underlying EBITDAaL margin	38%	37%		38%	38%
Capex	61	50		108	87
Capex excluding spectrum and leases	50	35		79	58
Capex excluding spectrum and leases / revenue	6%	5%		5%	4%

Latvia

In Latvia we continued to focus on our more-for-more strategy by monetizing increased data demand and migrating customers from prepaid to postpaid. During the quarter we launched our fixed connectivity offer through a third-party wholesale provider, enabling us with FMC capabilities in our sales channels.

Mobile net intake was positive with 10,000 RGUs in the quarter driven by strong net intake in mobile postpaid while prepaid was slightly negative. Mobile ASPU increased by 8% in local currency driven by price adjustments, data monetization through upselling and a slight roaming recovery.

End-user service revenue increased by 11% in local currency driven by ASPU and volume growth in postpaid.

Underlying EBITDAaL increased by 8% in local currency driven by enduser service revenue growth, offsetting pressure from higher inflation rates.

	Apr-Jun 2022	Apr-Jun 2021	Jun 30 2022	Jun 30 2021	Organic %
RGUs (thousands)	Net intake			RGU base
Mobile	10	6	1,010	986	2%
– Postpaid	11	20	776	734	6%
– Prepaid	-0	-14	234	253	-7%

	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
ASPU (EUR)
Mobile	8.5	7.9	8%	8.4	7.7	9%
– Postpaid	9.9	9.4	6%	9.8	9.2	6%
– Prepaid	3.9	3.7	5%	3.7	3.6	4%
Revenue (SEK million)
Mobile	268	236	11%	528	459	11%
– Postpaid	239	206	13%	473	402	14%
– Prepaid	29	29	-5%	55	57	-6%
Fixed	1	1	42%	2	1	47%
End-user service revenue	269	237	11%	530	460	11%
Operator revenue	35	43		69	87
Equipment revenue	85	74		166	150
Internal sales	9	10		19	19
Revenue	398	363	7%	785	716	6%
Underlying EBITDA	172	156		338	301
Underlying EBITDAaL	160	144	8%	314	279	9%
Underlying EBITDAaL margin	40%	40%		40%	39%
Capex	56	23		81	46
Capex excluding spectrum and leases	26	16		37	29
Capex excluding spectrum and leases / revenue	6%	5%		5%	4%

Estonia

In Estonia we saw the commercial momentum continuing with successful customer acquisitions while focusing on operational efficiency to offset inflation pressure. The 3.5 GHz spectrum auction is ongoing and we expect the 700 MHz spectrum auction to commence later this year. Mobile net intake was positive with 10,000 RGUs in the quarter driven by both postpaid and prepaid. Mobile ASPU increased by 3% in local currency driven by price adjustments, upselling and slight impact from roaming.

End-user service revenue increased by 8% in local currency driven by ASPU and volume growth.

Underlying EBITDAaL increased by 11% in local currency driven by enduser service revenue.

	Apr-Jun 2022	Apr-Jun 2021	Jun 30 2022	Jun 30 2021	Organic %
RGUs (thousands)	Net intake			RGU base
Mobile	10	3	455	439	4%
– Postpaid	8	1	394	386	2%
– Prepaid	2	2	61	53	16%

	Apr-Jun 2022	Apr-Jun 2021	Organic %	Jan-Jun 2022	Jan-Jun 2021	Organic %
ASPU (EUR)
Mobile	9.6	9.3	3%	9.5	9.1	5%
– Postpaid	10.5	10.0	5%	10.4	9.9	5%
– Prepaid	3.5	3.4	1%	3.5	3.2	9%
Revenue (SEK million)
Mobile	135	123	7%	266	242	7%
– Postpaid	128	118	6%	254	231	6%
– Prepaid	7	5	19%	13	10	19%
Fixed	14	12	20%	28	24	12%
End-user service revenue	149	135	8%	294	265	7%
Operator revenue	22	25	-16%	43	49	-16%
Equipment revenue	49	41	17%	92	82	8%
Internal sales	2	2	0%	5	4	13%
Revenue	222	203	6%	433	400	5%
Underlying EBITDA	65	58		129	119
Underlying EBITDAaL	48	42	11%	95	87	5%
Underlying EBITDAaL margin	22%	21%		22%	22%
Capex	40	17		68	47
Capex excluding spectrum and leases	35	16		54	37
Capex excluding spectrum and leases / revenue	16%	8%		13%	9%

Other items

Risks and uncertainty factors

The risk factors considered to be most significant to Tele2's future development are spectrum auctions, regulation, market competitiveness and changing technology, strategy implementation and integration, network and IT infrastructure and quality, data protection and cyber security, external relationships, suppliers and joint ventures, customer churn, recruitment of skilled personnel, geopolitical conditions, environmental costs, corruption and unethical business practices and financial risks such as currency risk, interest risk, liquidity risk, credit risk, risks related to tax matters and impairment of assets. Please refer to Tele2's Annual and Sustainability Report 2021 (Administration report and Note 2) for a detailed description of Tele2's risk exposure and risk management.

Financial calendar

Tele2 will release its financial and operating results for the period ending September 30, 2022 on October 20, 2022 and the period ending December 31, 2022 on January 31, 2023.

Auditors' review report

This report has been subject to a limited review by Tele2's auditors.

Board's assurance

The Board of Directors and CEO declare that the report provides a fair overview of the parent company's and Group's operations, their financial position and performance, and describes material risks and uncertainties facing the parent company and other companies in the Group.

Stockholm, July 19, 2022 Tele2 AB

Carla Smits-Nusteling Chairman

Andrew Barron Eva Lindqvist Georgi Ganev Deputy Chairman

Lars-Åke Norling Sam Kini Stina Bergfors

Kjell Johnsen President and CEO

Auditors' review report

Introduction

We have reviewed the interim report for Tele2 AB (publ) for the period January 1 - June 30, 2022. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, July 19, 2022

Deloitte AB

Didrik Roos Authorized Public Accountant

Q2 2022 PRESENTATION

Tele2 will host a presentation, with the possibility to join through a conference call, for the global financial community at 10:00 am CET (09:00 am GMT/04:00 am EST) on Tuesday, July 19, 2022. The presentation will be held in English and also made available as a webcast on Tele2's website: www.tele2.com.

This information is information that Tele2 AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 07:00 am CET on July 19, 2022.

Dial-in information:

To ensure that you are connected to the conference call, please dial in a few minutes before the start of the conference call to register your attendance.

Dial-in numbers:

SE: +46 (0) 8 566 426 51 UK: +44 (0) 333 300 0804 US: +1 631 913 1422

Patrik Johannesson

Head of Investor Relations Telephone: +46 (0)73 966 83 84

Tele2 AB

Company registration nr: 556410-8917 P.O. Box 62 SE–164 94 Kista, Stockholms län Sweden Tel + 46 (0) 8 5620 0060 www.tele2.com

Visit our website: www.tele2.com

Contacts Appendices

Condensed consolidated income statement Condensed consolidated comprehensive income Condensed consolidated balance sheet Condensed consolidated cash flow statement Condensed consolidated statement of changes in equity Parent company Notes Non-IFRS measures Other financial metrics

Condensed consolidated income statement

SEK million	Note	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Revenue	2	6,820	6,572	13,565	13,122
Cost of services provided and equipment sold	3	-4,075	-3,916	-8,073	-7,758
Gross profit		2,745	2,655	5,492	5,364
Selling expenses	3	-1,116	-1,097	-2,091	-2,149
Administrative expenses	3	-545	-529	-1,077	-1,035
Result from shares in associated companies and joint ventures	4	-1	22	1,670	35
Other operating income	3	69	55	119	121
Other operating expenses	3	-11	-44	-69	-72
Operating profit	3	1,140	1,062	4,044	2,264
Interest income		6	4	12	9
Interest expenses		-131	-100	-248	-226
Other financial items		6	7	-113	-3
Profit after financial items		1,022	972	3,695	2,044
Income tax		-175	173	-377	-32
Net profit, continuing operations		847	1,146	3,318	2,012
Net profit/loss discontinued operations	10	1	222	4	220
Net profit, total operations		847	1,367	3,322	2,232
Continuing operations
Attributable to:
Equity holders of the parent company		847	1,146	3,318	2,012
Net profit, continuing operations		847	1,146	3,318	2,012
Earnings per share (SEK)	8	1.22	1.66	4.81	2.92
Earnings per share, after dilution (SEK)	8	1.22	1.65	4.78	2.90
Total operations
Attributable to:
Equity holders of the parent company		847	1,367	3,322	2,232
Net profit, total operations		847	1,367	3,322	2,232
Earnings per share (SEK)	8	1.23	1.98	4.81	3.24
Earnings per share, after dilution (SEK)	8	1.22	1.97	4.79	3.22

Condensed consolidated comprehensive income

SEK million Note	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
NET PROFIT	847	1,367	3,322	2,232
Components not to be reclassified to net profit
Pensions, actuarial gains/losses	99	31		95 59
Pensions, actuarial gains/losses, tax effect	-20	-6	-20	-12
Components not to be reclassified to net profit/loss	79	24		75 47
Components that may be reclassified to net profit
Translation differences in foreign operations	170	-67	221	45
Translation differences in associated companies 4	1	-79		-6 61
Translation differences	171	-146	215	106
Hedge of net investments in foreign operations	-111	37	-54	-28
Tax effect on above	23	-8		11 6
Hedge of net investments	-88	29	-43	-23
Exchange rate differences	83	-117	172	83
Profit arising on changes in fair value of hedging instruments	46	7	107	32
Reclassified cumulative profit/loss to income statement	-9	-7	-16	-14
Tax effect on cash flow hedges	-8	0	-19	-4
Cash flow hedges	29	-0		72 14
Components that may be reclassified to net profit/loss	112	-117	245	97
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX	191	-93	320	144
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	1,038	1,274	3,642	2,376
Attributable to:
Equity holders of the parent company	1,038	1,274	3,642	2,376
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	1,038	1,274	3,642	2,376

Condensed consolidated balance sheet

SEK million	Note	Jun 30 2022	Dec 31 2021
ASSETS
Goodwill		29,801	29,695
Other intangible assets		14,792	15,806
Intangible assets		44,593	45,501
Tangible assets		7,898	7,825
Right-of-use assets		5,136	5,408
Shares in associated companies and joint ventures	4	6	7
Other financial assets	5	850	758
Capitalized contract costs		545	505
Deferred tax assets		123	164
Non-current assets		59,150	60,167
Inventories		1,099	769
Current receivables		5,303	4,978
Current investments		82	—
Cash and cash equivalents	6	591	880
Current assets		7,075	6,627
Assets classified as held for sale	10	79	7,458
TOTAL ASSETS		66,305	74,251
EQUITY AND LIABILITIES
Attributable to equity holders of the parent company		21,196	31,142
Equity	8	21,196	31,142
Interest-bearing liabilities	5	28,336	28,331
Non-interest-bearing liabilities		3,872	4,120
Non-current liabilities		32,208	32,452
Interest-bearing liabilities	5	4,233	4,116
Non-interest-bearing liabilities		8,200	6,080
Current liabilities		12,433	10,195
Liabilities directly associated with assets classified as held for sale	10	468	462
TOTAL EQUITY AND LIABILITIES		66,305	74,251

Condensed consolidated cash flow statement

Total operations SEK million	Note	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Operating activities
Net profit		847	1,367	3,322	2,232
Adjustments for non-cash items in net profit		1,356	742	1,151	2,190
Changes in working capital		-323	80	-546	54
Cash flow from operating activities		1,881	2,189	3,926	4,476
Investing activities
Additions to intangible and tangible assets		-855	-652	-1,609	-1,738
Acquisition and sale of shares and participations	9	-15	32	8,972	32
Other financial assets, lending		-82	—	-82	—
Cash flow from investing activities		-953	-620	7,281	-1,706
Financing activities
Proceeds from loans		1,885	1,324	3,231	4,404
Repayments of loans		-719	-3,348	-3,770	-3,934
Dividends paid	8	-11,315	-2,066	-11,315	-2,066
Cash flow from financing activities		-10,149	-4,090	-11,853	-1,595
Net change in cash and cash equivalents		-9,221	-2,521	-646	1,174
Cash and cash equivalents at beginning of period		9,567	4,686	880	970
Exchange rate differences in cash and cash equivalents		245	-24	357	-3
Cash and cash equivalents at end of the period	6	591	2,141	591	2,141

Condensed consolidated statements of changes in equity

Total operations SEK million	Note	Jun 30, 2022
			Attributable to equity holders of the parent company
		Share capital	Other paid-in capital	Hedge reserve	Translation reserve	Retained earnings	Total equity
Equity at January 1		866	27,378	-301	152	3,047	31,142
Net profit		—	—	—	—	3,322	3,322
Other comprehensive income for the period, net of tax		—	—	29	215	75	320
Total comprehensive income for the period		—	—	29	215	3,397	3,642
Other changes in equity
Share-based payments	8	—	—	—	—	34	34
Share-based payments, tax effect	8	—	—	—	—	7	7
New shares issues	8	3	—	—	—	—	3
Repurchase of own shares	8	—	—	—	—	-3	-3
Dividends	8	—	—	—	—	-13,629	-13,629
Equity at end of the period		869	27,378	-272	367	-7,147	21,196

Total operations SEK million	Note	Jun 30, 2021
			Attributable to equity holders of the parent company
		Share capital	Other paid-in capital	Hedge reserve	Translation reserve	Retained earnings	Total equity
Equity at January 1		863	27,378	-202	-78	4,791	32,751
Net profit		—	—	—	—	2,232	2,232
Other comprehensive income for the period, net of tax		—	—	-9	106	47	144
Total comprehensive income for the period		—	—	-9	106	2,279	2,376
Other changes in equity
Share-based payments	8	—	—	—	—	27	27
Share-based payments, tax effect	8	—	—	—	—	3	3
New share issues	8	3	—	—	—	—	3
Repurchase of own shares	8	—	—	—	—	-3	-3
Dividends	8	—	—	—	—	-6,205	-6,205
Equity at end of the period		866	27,378	-211	27	893	28,953

Parent company

Condensed income statement

SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Revenue	12	9	24	22
Administrative expenses	-20	-32	-46	-73
Other operating expenses	0	-1	0	-2
Operating loss	-8	-25	-22	-53
Dividend from group company	6,300	—	6,300	—
Interest revenue and similar income	45	40	95	78
Interest expense and similar costs	-213	-54	-426	-217
Profit/loss after financial items	6,123	-40	5,948	-192
Appropriations, group contribution
Tax on profit/loss	36	8	64	39
Net profit/loss	6,159	-32	6,012	-153

Condensed balance sheet

SEK million	Note	Jun 30 2022	Dec 31 2021
ASSETS
Financial assets		72,747	72,347
Non-current assets		72,747	72,347
Current receivables		392	3,536
Current investments		82	—
Current assets		475	3,536
TOTAL ASSETS		73,221	75,884
EQUITY AND LIABILITIES
Restricted equity	8	5,854	5,851
Unrestricted equity	8	31,664	39,177
Equity		37,519	45,028
Untaxed reserves		230	230
Interest-bearing liabilities	5	27,894	27,502
Non-current liabilities		27,895	27,502
Interest-bearing liabilities	5	5,170	2,793
Non-interest-bearing liabilities		2,407	330
Current liabilities		7,578	3,123
TOTAL EQUITY AND LIABILITIES		73,221	75,884

Notes

NOTE 1 ACCOUNTING PRINCIPLES AND DEFINITIONS

The interim financial information for the Group for the six month period ended June 30, 2022 has been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and the Swedish Annual Accounts Act, and for the parent company in accordance with the Swedish Annual Accounts Act and RFR 2 Reporting for legal entities and other statements issued by the Swedish Financial Reporting Board. In all respects other than those described below, Tele2 has presented the financial statements for the period ended June 30, 2022 in accordance with the accounting policies and principles applied in the Annual and Sustainability Report 2021. The description of these principles and definitions are found in Note 1 in the Annual and Sustainability Report 2021. Disclosures as required by IAS 34 p. 16 A are presented both in the financial statements and notes as well as in other parts of the interim report.

The amendments to IFRSs applicable from January 1, 2022 have no effects to Tele2's financial reports for the six month period ended June 30, 2022.

Figures presented in this report refer to April 1 –June 30 (Q2), 2022 and continuing operations unless otherwise stated. Figures shown in parentheses refer to the comparable periods in 2021.

NOTE 2 REVENUE AND SEGMENTS

Revenue per segment

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Sweden	5,397	5,286	10,761	10,621
Lithuania	835	747	1,646	1,439
Latvia	398	363	785	716
Estonia	222	203	433	400
Total including internal sales	6,852	6,600	13,625	13,177
Internal sales, elimination	-32	-28	-60	-55
TOTAL	6,820	6,572	13,565	13,122

Internal sales

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Sweden	2	2	4	5
Lithuania	18	14	32	27
Latvia	9	10	19	19
Estonia	2	2	5	4
TOTAL	32	28	60	55

Revenue split per category

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Sweden Consumer
End-user service revenue	3,050	3,046	6,056	6,066
Operator revenue	194	183	382	357
Equipment revenue	435	414	873	906
Internal sales	0	0	0	0
Total	3,679	3,643	7,311	7,329
Sweden Business
End-user service revenue	989	962	1,962	1,909
Operator revenue	26	23	51	48
Equipment revenue	417	395	874	840
Internal sales	1	1	2	1
Total	1,432	1,382	2,889	2,798
Sweden Wholesale
Operator revenue	284	260	558	490
Internal sales	1	1	2	3
Total	286	261	560	493
Lithuania
End-user service revenue	511	435	1,008	844
Operator revenue	48	56	100	115
Equipment revenue	257	243	505	452
Internal sales	18	14	32	27
Total	835	747	1,646	1,439
Latvia
End-user service revenue	269	237	530	460
Operator revenue	35	43	69	87
Equipment revenue	85	74	166	150
Internal sales	9	10	19	19
Total	398	363	785	716
Estonia
End-user service revenue	149	135	294	265
Operator revenue	22	25	43	49
Equipment revenue	49	41	92	82
Internal sales	2	2	5	4
Total	222	203	433	400
Internal sales, elimination	-32	-28	-60	-55
CONTINUING OPERATIONS
End-user service revenue	4,969	4,815	9,850	9,544
Operator revenue	608	590	1,203	1,148
Equipment revenue	1,243	1,167	2,511	2,430
TOTAL	6,820	6,572	13,565	13,122

Underlying EBITDAaL

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Sweden	1,938	1,907	3,903	3,771
Lithuania	317	279	622	550
Latvia	160	144	314	279
Estonia	48	42	95	87
TOTAL	2,463	2,372	4,934	4,686

NOTE 3 PROFIT AFTER FINANCIAL ITEMS

Reconciling items to reported profit after financial items

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Underlying EBITDAaL	2,463	2,372	4,934	4,686
Reversal lease depreciation and interest	326	314	653	630
Underlying EBITDA	2,790	2,686	5,588	5,316
Acquisition costs	-0	-3	0	-10
Restructuring costs	-66	-73	-114	-134
Disposal of non-current assets	-24	-23	-22	-25
Other items affecting comparability	2	-21	2	-21
Items affecting comparability	-88	-121	-133	-190
EBITDA	2,702	2,565	5,454	5,127
Depreciation/amortization	-1,560	-1,526	-3,080	-2,898
Result from shares in associated companies and joint ventures	-1	22	1,670	35
Operating profit	1,140	1,062	4,044	2,264
Net interest and other financial items	-118	-90	-349	-219
Profit after financial items	1,022	972	3,695	2,044

In Q2 2021 our consumer premium brands Com Hem and Tele2 were merged. The brand positioning led to a reassessment of the useful life of the Com Hem brand, from previous indefinite to a definite useful life of 10 years. Accordingly, amortization of the Com Hem brand book value was initiated in Q2 2021. In Q2 2022 the impact was SEK -135 (-90) million on operating profit and SEK -107 (-71) million on net result. For further information, see Note 11 in the Annual and Sustainability Report 2021.

In Q1 2022 Tele2 AB and Deutsche Telekom completed the divestment of T-Mobile Netherlands to funds advised by Apax Partners LLP and Warburg Pincus LLC, for an enterprise value of EUR 5.1 billion. Tele2 received SEK 9.0 billion for its 25% share in T-Mobile Netherlands. The capital gain amounted to SEK 1.6 billion, reported under Result from shares in associated companies and joint ventures.

Acquisition costs

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Network JO's, Baltics	—	-3	—	-10
Acquisition costs 1)	—	-3	—	-10

1) Reported as other operating expenses.

Restructuring costs

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Redundancy costs	-27	-36	-33	-66
Other employee and consultancy costs	-8	-21	-22	-43
Exit of contracts and other costs	-31	-16	-58	-26
Restructuring costs	-66	-73	-114	-134
Reported as:
– Cost of services provided	-7	-10	-15	-40
– Selling expenses	-26	-26	-41	-47
– Administrative expenses	-32	-38	-57	-48

The restructuring costs are solely related to the ongoing business transformation program in Sweden.

Disposal of non-current assets

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Closure of projects and systems	-12	-23	-12	-23
Other	-12	—	-10	-1
Disposal of non-current assets2)	-24	-23	-22	-25

2) Reported as other operating income and other operating expenses.

Other items affecting comparability

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Contract termination fees, Sweden Other	— 2	-20 -1	— 2	-20 -1
Total	2	-21	2	-21
Reported as: – Cost of services provided	—	-20	—	-20
– Selling expenses	2	-1	2	-1

NOTE 4 SHARES IN ASSOCIATED COMPANIES AND JOINT VENTURES

SEK million	Jun 30 2022	Jun 30 2021	Dec 31 2021
T-Mobile Netherlands
Cost at January 1	—	7,011	7,011
Share of profit for the year	—	34	221
Exchange rate differences	—	61	134
Total T-Mobile Netherlands	—	7,106	7,366
Other associated companies and joint ventures	6	8	7
Total shares in associated companies and joint ventures pre reclassification	6	7,113	7,373
Reclassified to asset held for sale	—	—	-7,366
Total shares in associated companies and joint ventures	6	7,113	7

In Q3 2021, Tele2's 25% share in T-Mobile Netherlands was reclassified to Asset held for sale, following the announced divestment. The transaction was completed in Q1 2022, with a capital gain of SEK 1.6 billion. See also Note 3 and 9.

NOTE 5 FINANCIAL ASSETS AND LIABILITIES

Financing

SEK million	Jun 30 2022	Dec 31 2021
Bonds	21,051	21,326
Commercial papers	1,148	400
European Investment Bank (EIB)	1,334	1,278
Nordic Investment Bank (NIB)	1,990	1,990
Other	—	178
Total liabilities to financial institutions	25,523	25,173
Provisions	1,522	1,610
Lease liabilities	5,097	5,414
Other interest-bearing liabilities	428	250
Total interest-bearing liabilities	32,569	32,447

Average maturity and average interest rate (including derivatives) for outstanding debt to financial institutions at June 30, 2022 amounted to 4.0 years and 1.35 percent, respectively.

As of the date of this report, Tele2 has a credit facility with a syndicate of ten banks maturing in 2024.

Classification and fair values

Tele2's financial assets consist mainly of receivables from end customers, other operators and resellers as well as cash and cash equivalents. Tele2's financial liabilities consist mainly of loans, bonds, lease liabilities and accounts payables. For the category "Liabilities to financial institutions and similar liabilities" the reported value amounted on June 30, 2022 to SEK 25,523 (December 31, 2021: 25,173) million and the fair value to SEK 24,718 (December 31, 2021: 25,752) million.

During 2022, no transfers have been made between the different levels in the fair value hierarchy and no significant changes were made to valuation techniques, inputs used or assumptions.

NOTE 6 RELATED PARTIES

Tele2's share of cash and cash equivalents in joint operations (Svenska UMTS-nät AB, Celestine Hill and Net4Mobility HB, Sweden), for which Tele2 has limited disposal rights was included in the Group's cash and cash equivalents and amounted at June 30, 2022 to SEK 43 (December 31, 2021: 43) million. Other transactions with joint operations and other related parties are presented in Note 34 of the Annual and Sustainability Report 2021.

NOTE 7 CONTINGENT LIABILITIES

As of June 30, 2022, Tele2 had no material contingent liabilities.

NOTE 8 EQUITY, NUMBER OF SHARES AND INCENTIVE PROGRAMS

Number of shares

	Jun 30 2022	Dec 31 2021
Total number of shares	695,021,597	692,821,597
Number of treasury shares	-4,010,230	-2,912,106
Number of outstanding shares	691,011,367	689,909,491
Number of outstanding shares, weighted average	690,282,905	689,463,621
Number of shares after dilution	695,169,775	693,458,249
Number of shares after dilution, weighted average	694,008,103	693,182,102

As a result of share rights in the LTI 2019 being exercised during Q2 2022, Tele2 delivered 1,101,876 B-shares in treasury shares to the participants in the program. In Q1 2022, Tele2 issued, and immediately repurchased, 2,200,000 new C shares to be used for future exercises of LTIs, resulting in an increase in share capital of SEK 3 million.

In addition, 281 class A shares were reclassified into class B shares and 2,480,000 class C shares were reclassified into class B shares. Changes in shares during previous year are stated in Note 23 in the Annual and Sustainability Report 2021.

Outstanding share right programs

	Jun 30 2022	Dec 31 2021
LTI 2022	1,489,456	—
LTI 2021	1,485,673	1,414,817
LTI 2020	1,183,279	1,142,715
LTI 2019	—	991,226
Total outstanding share rights	4,158,408	3,548,758

All outstanding long-term incentive programs (LTI 2020, LTI 2021 and LTI 2022) are based on the same structure. Additional information regarding the objective, conditions and requirements related to the LTI programs is stated in Note 31 of the 2021 Annual and Sustainability Report. During the six months in 2022, the total cost including social security costs for the longterm incentive programs (LTI) amounted to SEK 54 (44) million before tax.

LTI 2022

At the Annual General Meeting held on April 28, 2022, the shareholders approved a retention and performance based incentive program (LTI 2022) for senior executives and other key employees in the Tele2 Group. Subject to fulfilment of certain retention and performance based conditions during the periods January 1, 2022 – December 31, 2024 (the "Cash flow Measurement Period") and April 1, 2022 – March 31, 2025 (the "TSR Measurement Period") and the participant maintaining the invested shares at the release of the interim report for January – March 2025 and, with certain exceptions, maintaining the employment within the Tele2 Group, each right entitles the participant to receive one Tele2 share free of charge. Total costs before tax for outstanding rights in the incentive program are expensed over the three year vesting period. These costs are expected to amount to SEK 130 million, of which social security costs amount to SEK 46 million. To ensure the delivery of Class B shares under the program, the Annual General Meeting decided to authorize the Board of Directors to resolve on a directed share issue of a maximum of 1,200,000 Class C shares and subsequently to repurchase the Class C shares. The Board of Directors has not yet used its mandate.

LTI 2019

The exercise of the share rights in LTI 2019 was conditional upon the fulfilment of certain retention and performance based conditions, measured from April 1, 2019 until March 31, 2022. The outcome of these performance conditions was in accordance with below and the outstanding 1,101,876 share rights have been exchanged for shares in Tele2 during Q2 2022.

Series	Retention and performance based conditions	Minimum hurdle (50%)	Stretch targets (100%)	Performance	Allotment
Series A	Total Shareholder Return Tele2 (TSR)		>=0%	41.2%	100%
Series B	Total Shareholder Return Tele2 (TSR) compared to a peer group	>0%	>=20%	34.5%	100%

Dividend

The Annual General Meeting (AGM), held on April 28, 2022, resolved on an ordinary dividend of SEK 6.75 per share in respect of the financial year 2021, to be paid in two tranches of SEK 3.40 and SEK 3.35 during 2022. In addition, the AGM resolved on an extraordinary dividend of SEK 13.00 per share, related to the completed T-Mobile Netherlands divestment. The first tranche of the ordinary dividend, amounting to SEK 2,346 million and the entire extraordinary dividend of SEK 8,969 million were distributed to the shareholders on May 5, 2022. The second tranche of the ordinary dividend is estimated to be distributed to the shareholders on October 14, 2022.

NOTE 9 BUSINESS ACQUISITIONS AND DIVESTMENTS

Acquisitions and divestments of shares and participations affecting cash flow were as follows:

SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Acquisitions
Other minor acquisitions	—	—	-6	—
Total acquisition of shares and participations	—	—	-6	—
Divestments
Tele2 Germany	22	32	22	32
T-Mobile Netherlands	-37	—	8,956	—
Total sale of shares and participations	-15	32	8,978	32
TOTAL CASH FLOW EFFECT	-15	32	8,972	32

In Q1 2022, the divestment of T-Mobile Netherlands was completed. The cash proceeds for Tele2's 25% share of the company amounted to SEK 9.0 billion. In addition, FX hedges attached to the transaction have affected exchange rate differences in the cash flow statement with SEK -153 million in Q4 2021 and SEK 125 million in the first half of 2022. For further information related to the divestment, see Note 3.

Information on acquisitions and divestments made in 2021 is provided in the Annual and Sustainability Report 2021, Note 14 and Note 33.

NOTE 10 DISCONTINUED OPERATIONS

Tele2 Germany

In December 2020 Tele2 completed the divestment of its German business to the Tele2 Germany management. The purchase price included an earnout component, dependent upon the financial performance of the business until the end of 2024.

So far Tele2 has received accumulated earnout payments of SEK 118 million. During Q2 2022, Tele2 has received earnout payments of SEK 22 million. On June 30, 2022 the estimated fair value of the future cash flows amounted to SEK 79 million (December 31, 2021; SEK 92 million).

Tele2 Kazakhstan

Tele2 was notified in April 2019 that the Swedish Tax Agency has rejected Tele2's claim for a deduction of an exchange loss related to a conversion of a shareholder loan to the joint venture MTS in Kazakhstan from USD to Kazakh Tenge in connection with the establishment of Tele2's previous joint venture in Kazakhstan. After appealing the decision, the Administrative Court has in December 2020 partly ruled in favour of Skatteverket. The remaining additional tax claim amounted at June 30, 2022 to SEK 241 million and a tax surcharge and interest of SEK 120 million. Tele2 has appealed the decision to the Administrative Court of Appeal. Based on the ruling in the Administrative Court it is Tele2's and its advisors' opinion that, it is uncertain whether Tele2 ultimately will succeed in the dispute.

Consequently, a provision was recognized in Q4 2020 under discontinued operations. At June 30, 2022 the provision amounted to SEK 361 million (December 31, 2021; SEK 359 million).

Income statement

All discontinued operations are included below. Tele2 Germany and Tele2 Croatia were divested in 2020, while Tele2 Netherlands and Tele2 Kazakhstan were divested in 2019. Tele2 Switzerland was divested in 2008, but a legal settlement attached to this Swiss operation was reached in 2021.

Further information about effects in the income statement under discontinued operations in 2021 is provided in Note 33 of the Annual and Sustainability Report 2021.

Discontinued operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Administrative expenses	—	-2	—	-2
Operating profit	—	-2	—	-2
Interest expenses	-1	-1	-2	-2
Profit/loss after financial items	-1	-4	-2	-5
Income tax from the operation	—	—	—	—
Net profit/loss from the operation	-1	-4	-2	-5
Profit/loss on disposal of operation including sales costs and cumulative
exchange rate gain	2	225	6	225
– of which Germany	5	-1	9	1
– of which Croatia	-2	0	-2	-1
– of which Netherlands	-1	1	-1	-2
– of which Switzerland	—	226	—	226
NET PROFIT/LOSS	1	222	4	220
Attributable to:
Equity holders of the parent company	1	222	4	220
NET PROFIT/LOSS	1	222	4	220
Earnings per share (SEK)	0.01	0.32	0.00	0.32
Earnings per share, after dilution (SEK)	0.00	0.32	0.01	0.32

Balance sheet

Assets and liabilities associated with assets held for sale as of June 30, 2022 refer to earnouts, provisions and other liabilities related to divested operations. In addition, in Q3 2021 the shares in T-Mobile Netherlands were reclassified to assets held for sale, following the announced divestment. The divestment was completed in Q1 2022.

Discontinued operations SEK million	Jun 30 2022	Dec 31 2021
ASSETS
Shares in associated companies and joint ventures	—	7,366
Financial assets	51	78
Non-current assets	51	7,444
Current receivables	28	14
Current assets	28	14
Assets classified as held for sale	79	7,458
LIABILITIES
Interest-bearing liabilities	53	49
Non-current liabilities	53	49
Interest-bearing liabilities	57	55
Non-interest-bearing liabilities	359	358
Current liabilities	415	413
Liabilities directly associated with assets classified as held for sale	468	462

Cash flow statement

Discontinued operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Cash flow from operating activities	—	-3	—	-3
Cash flow from investing activities	22	32	22	32
Cash flow from financing activities	—	—	—	—
Net change in cash and cash equivalents	22	29	22	29

Non-IFRS measures

This report contains certain financial measures that are not defined by IFRS but are used by Tele2 to assess the financial performance of the business. These measures are included in the report as they are considered important supplementary measures of operating performance and liquidity. They should not be considered a substitute to Tele2's financial statements prepared in accordance with IFRS. Tele2's definitions of these measures are described below, but other companies may calculate non-IFRS measures differently and these measures are therefore not always comparable to similar measures used by other companies.

EBITDA

Tele2 considers EBITDA to be a relevant measure to present profitability aligned with industry standard.

EBITDA: Operating profit/loss before depreciation/amortization, impairment as well as results from shares in associated companies and joint ventures.

Underlying EBITDA

Tele2 considers underlying EBITDA to be a relevant measure to present in order to illustrate the profitability of the underlying business, and as these are used by management to assess the performance of the business.

Underlying EBITDA: EBITDA excluding items affecting comparability.

Items affecting comparability: Disposals of non-current assets and transactions from strategic decisions, such as capital gains and losses from sales of operations, acquisition costs, integration costs due to acquisition or merger, restructuring programs from reorganizations as well as other items that affect comparability.

Underlying EBITDAaL and underlying EBITDAaL margin

Tele2 considers underlying EBITDAaL and the related margin to be relevant measures of the business performance since underlying EBITDAaL includes the cost of leased assets (depreciation and interest), which is not included in underlying EBITDA according to IFRS 16.

Underlying EBITDAaL: Underlying EBITDA as well as lease depreciation and lease interest costs according to IFRS 16.

Underlying EBITDAaL margin: Underlying EBITDAaL in relation to revenue excluding items affecting comparability.

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022		Jan-Jun 2021
Operating profit	1,140	1,062	4,044		2,264
Reversal:
Result from shares in associated companies and joint ventures	1	-22	-1,670		-35
Depreciation and amortization	1,560	1,526	3,080		2,898
EBITDA	2,702	2,565	5,454		5,127
Reversal, items affecting comparability:
Acquisition costs	0	3		-0	10
Restructuring costs	66	73	114		134
Disposal of non-current assets	24	23		22	25
Other items affecting comparability	-2	21		-2	21
Total items affecting comparability	88	121	133		190
Underlying EBITDA	2,790	2,686	5,588		5,316
Lease depreciation	-307	-299	-615		-600
Lease interest costs	-19	-15	-38		-30
Underlying EBITDAaL	2,463	2,372	4,934		4,686
Revenue	6,820	6,572	13,565		13,122
Revenue excluding items affecting comparability	6,820	6,572	13,565		13,122
Underlying EBITDAaL margin	36%	36%	36%		36%

Non-IFRS measures – Capex paid and capex

Tele2 considers capex paid relevant to present as it provides an indication of how much the company invests organically in intangible and tangible assets to maintain and expand its business. Tele2 believes that it is relevant to present capex to provide a view on how much Tele2 invests organically in intangible and tangible assets as well as in right-of-use assets (lease) to maintain and grow its business that is not dependent on the timing of cash payments.

Capex paid: Cash paid for the additions to intangible and tangible assets net of cash proceeds from sales of intangible and tangible assets.

Capex: Additions to intangible assets, tangible assets and right-of-use assets that are capitalized on the balance sheet.

SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
TOTAL OPERATIONS
Additions to intangible and tangible assets	-863	-653	-1,619	-1,739
Sale of intangible and tangible assets	8	1	10	1
Capex paid	-855	-652	-1,609	-1,738
This period's unpaid capex and reversal of paid capex from previous period	62	-77	143	-25
Reversal received payment of sold intangible and tangible assets	-8	-1	-10	-1
Capex intangible and tangible assets	-801	-730	-1,476	-1,764
Additions to right-of-use assets	-236	-88	-398	-345
Capex	-1,037	-817	-1,873	-2,110
CONTINUING OPERATIONS
Additions to intangible and tangible assets	-863	-653	-1,619	-1,739
Sale of intangible and tangible assets	8	1	10	1
Capex paid	-855	-652	-1,609	-1,738
This period's unpaid capex and reversal of paid capex from previous period	62	-77	143	-25
Reversal received payment of sold intangible and tangible assets	-8	-1	-10	-1
Capex intangible and tangible assets	-801	-730	-1,476	-1,764
Additions to right-of-use assets	-236	-88	-398	-345
Capex	-1,037	-817	-1,873	-2,110

Non-IFRS measures – Operating cash flow

Tele2 considers operating cash flow a relevant measure to present as it gives an indication of the profitability of the underlying business while also taking into account the investments needed to maintain and grow the business.

Operating cash flow: Underlying EBITDAaL less capex excluding spectrum and leases.

Continuing operations SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
Underlying EBITDAaL	2,463	2,372	4,934	4,686
Capex excluding spectrum and leases	-737	-730	-1,407	-1,432
Operating cash flow	1,726	1,642	3,527	3,255

Non-IFRS measures – Equity free cash flow

Tele2 considers equity free cash flow to be relevant to present as it provides a view of funds generated from operating activities that also includes investments in intangible and tangible assets. Management believes that equity free cash flow is meaningful to investors because it is the measure of the Group's funds available for acquisition related payments, dividends to shareholders, share repurchases and debt repayment.

Equity free cash flow: Cash flow from operating activities less capex paid and amortization of lease liabilities.

SEK million	Apr-Jun 2022	Apr-Jun 2021	Jan-Jun 2022	Jan-Jun 2021
TOTAL OPERATIONS
Cash flow from operating activities	1,881	2,189	3,926	4,476
Capex paid	-855	-652	-1,609	-1,738
Amortization of lease liabilities	-275	-270	-657	-651
Equity free cash flow (eFCF)	750	1,267	1,660	2,087
eFCF per share (SEK)	1.09	1.84	2.40	3.03
eFCF per share after dilution (SEK)	1.08	1.83	2.39	3.01
CONTINUING OPERATIONS
Cash flow from operating activities	1,881	2,191	3,926	4,478
Capex paid	-855	-652	-1,609	-1,738
Amortization of lease liabilities	-275	-270	-657	-651
Equity free cash flow (eFCF)	750	1,269	1,660	2,089
eFCF per share (SEK)	1.09	1.84	2.40	3.03
eFCF per share after dilution (SEK)	1.08	1.83	2.39	3.02
OUTSTANDING SHARES
Number of shares	690,282,905	689,046,743	690,282,905	689,046,743
Number of shares after dilution	695,169,775	692,806,063	695,169,775	692,806,063

Non-IFRS measures – Net debt and economic net debt

Tele2 believes that net debt is relevant to present as it is useful to illustrate the indebtedness, financial flexibility, and capital structure. Furthermore, economic net debt is considered relevant as it excludes lease liabilities, and thereby consistently can be put in relation to underlying EBITDAaL when measuring financial leverage.

Net debt: Interest-bearing non-current and current liabilities excluding provisions, less cash and cash equivalents, current investments, restricted cash and derivatives.

Economic net debt: Net debt excluding lease liabilities.

Total operations SEK million	Jun 30 2022	Dec 31 2021
Interest-bearing non-current liabilities	28,336	28,332
Interest-bearing current liabilities	4,233	4,116
Reversal provisions	-1,522	-1,610
Cash & cash equivalents, current investments and restricted funds	-674	-881
Derivatives	-338	-275
Net debt	30,035	29,681
Reversal:
Lease liabilities	-5,097	-5,414
Economic net debt	24,938	24,268

Organic

Tele2 believes that organic growth rates are relevant to present as they exclude effects from currency movements but include effects from divestments and acquisitions as if these occurred on the first day of each reporting period and are therefore providing an indication of the underlying performance.

Organic growth rates: Calculated at constant currency, meaning that comparative figures have been recalculated using the currency rates for the current period, but including effects from divestments and acquisitions as if these occurred on the first day of each reporting period.

Reconciliation of figures is presented in an excel document (Q2 2022 financials to the market) on Tele2's website www.tele2.com.

Other financial metrics

Certain other financial metrics that are presented in this report are defined below. It is the view of Tele2 that these metrics provide valuable additional information to investors and other readers of this report.

Average interest rate

Annualized interest expense on loans (excluding penalty interest etc.) in relation to average interest-bearing liabilities excluding provisions, lease liabilities, debt related to equipment financing, balanced bank fees as well as adjusted for borrowings and amortizations during the period.

Average number of employees (FTE)

The average number of employees during the year, calculated on the basis of full time equivalents. Acquired/sold companies are reported in relation to the length of time the companies have been a part of the Tele2 Group.

Earnings per share

Profit/loss for the period attributable to the parent company shareholders in relation to the weighted average number of shares outstanding during the fiscal year.

Economic net debt / Underlying EBITDAaL (leverage)

Economic net debt divided by underlying EBITDAaL (rolling twelve months) for all operations owned and controlled by Tele2 at the end of each reporting period.

End-user service revenue

Revenue from end-users excluding equipment revenue. End-user service revenue is presented to provide a view of revenue attached to the customers usage of services provided by the company.

Equity per share

Equity attributable to parent company's shareholders in relation to the total number of outstanding shares.

Number of employees

Number of employees at the end of the period.

Operating profit/loss (EBIT)

Revenue less operating expenses.

TSR

Total shareholder return including change in the share price and reinvested dividends.

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