[PPT] - The third mobile network in Norway Arctic company presentation, 24 PowerPoint Presentation

SLIDE 1

The third mobile network in Norway

Arctic company presentation, 24 April 2020 CEO Eivind Helgaker, CFO Henning Karlsrud & Head of IR Espen Risholm

SLIDE 2 2

Disclaimer

By reading this company presentation (the “Presentation”), or attending any meeting or oral presentation held in relation thereto, you (the “Recipient”) agree to be bound by the following terms, conditions and limitations. The Presentation has been produced by Ice Group ASA (the “Company”) for information purposes only and does not in itself constitute, and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction. The distribution of this Presentation may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction. The Recipient acknowledge that it will be solely responsible for its own assessment of the Company, the market and the market position of the Company and that it will conduct its

wn analysis and be solely responsible for forming its own view of the potential future performance of the Company’s business. The Company shall not have any liability whatsoever

(in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its contents, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation, or violation of distribution restrictions. An investment in the Company involves significant risk, and several factors could adversely affect the business, legal or financial position of the Company or the value of its securities. For a description of relevant risk factors we refer to the Company’s annual report for 2018 and the prospectus dated 16 May 2019, available on the Company’s website www.icegroup.com. Should one or more of these or other risks and uncertainties materialize, actual results may vary significantly from those described in this Presentation. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment. This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Company and the industry in which it

perates. Any forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely
pinions and forecasts and are subject to risks, uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by

the forward-looking statements. The Company cannot provide any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments. This Presentation speaks as at the date set out on herein. Neither the delivery of this Presentation nor any further discussions of the Company shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not assume any obligation to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation (including in relation to forward-looking statements). This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.

SLIDE 3 Revenue mix Attractive position

Ice Group in brief

Brands Smartphone + mobile broadband Mobile broadband ▪ Pure 4G (5G ready) Nokia network ▪ Attractive spectrum portfolio ▪ Low cost base ▪ Government support for 3rd network Norway Denmark Smartphone Mobile broadband 1 3

SLIDE 4 Summarised:

Ice Group’s strategy

Continued network roll-out to achieve economics of scale

▪ Build approx. 1,000 Nokia base stations in 2020 ▪ Expand smartphone network to 95% population coverage ▪ Transmit >90% of data traffic through own 4G network

Build a trusted and customer-focused brand

▪ Become Norway’s most recommended mobile tele- communications company to buy services from and work for

Leverage multiple growth and margin levers

▪ Further increase market share and ARPU ▪ Increased focus on higher data usage segments

1 2 3

4

SLIDE 5 5

Our path to medium-term and long-term value creation

▪ ARPU1,2 ▪ Adj EBITDA margin

3

▪ Capex / sales

(1) Target for smartphone subscriptions in Norway (2) Average Revenue Per User (3) Adjusted EBITDA

>25% +2.5% p.a. mid 40s % ~10%

Long term targets: Medium term targets:

>20% ~NOK300 mid 30s % ~10% ▪ Subscriber share1

SLIDE 6 6

2019 was a great year for Ice

CAPITAL MARKETS

NOK 1.5 billion private

placement

Divested Swedish operations
Listed on Oslo Axess
NOK 620 million (net) new

unsecured bond NETWORK

Awarded 700 & 2,100 MHz

licenses in Norway

First operator to use 700MHz
Additional 341 smartphone

base stations on ice+

80% on-net share in Q4
Apple agreement

MARKET SHARE

130k subscribers added to

reach 10% market share

Several innovative product

launches during the year

SLIDE 7 7

Growth in both ARPU and smartphone subscribers leading to 36% increase in smartphone service revenues

365 389 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 287 289 320 +36% Q3-19 573 Q4-18 Q1-19 Q2-19 Q4-19 443 457 536 555 +130k Smartphone subscribers & ARPU

1,000 subscribers / ARPU in NOK

Smartphone service revenues

NOK million

224 221 220 231 234 ARPU Subscribers

SLIDE 8 8

10% market share reached – medium term target of 20%

▪ Added 130k subscribers in 2019, +2.3pp market share during the year ▪ Ice now with 19 consecutive quarters of subscriber growth ▪ Ice has 24% of available mobile frequencies in Norway ▪ Tele2 had 19% (and growing) marketshare in 2013, before they lost the spectrum and were acquired by Telia ▪ The average #3 player in 3-player markets in Europe has 22% market share ▪ The Norwegian government actively supports a sustainable third mobile network operator ▪ We have the tools, products and strategy to support continued subscriber growth Note: Iliad initially offered their basic mobile package free of charge to their existing fixed-line subs, allowing them to massively grow in the first year Note: Masmovil acquired Yoigo in Jun-2016, which in FY2015 held 7% market share

Market Entry Benchmarking

Mobile Market Share (incl targets/guidance)

SLIDE 9 9

Disruptive product launches:

▪ Data Frihet (unlimited data for +99,-) ▪ ice Junior (1GB for 0,- for u/12) ▪ Mobilbytte (handset-as-a-service) ▪ ice Ung (10GB and 5GG packages with

age restrictions u/29 and u/15)

▪ ice SMB (20GB & 5GB packages for

299,- and 199,- for the B2B segment)

SLIDE 10 10

We continue to build base stations – giving us higher on-net share and lowering our roaming costs

67% Q4-19 Q4-18 Q1-19 Q2-19 Q3-19 71% 72% 73% 80% Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 1,775 1,873 1,933 1,987 2,116 +129 Operational smartphone sites Average on-net data and VoLTE share Data 16% 19% 6% 22% 30% VoLTE

SLIDE 11 11

iPhone agreement with Apple in place ▪ Handset sale and marketing ▪ Launches ▪ Distribution network ▪ Automatic operator settings ▪ Improved customer experience ▪ Increased on-net shares (data & VoLTE)

SLIDE 12 12

Ice is well prepared for the 5G era

Key considerations ▪ Ice already has a large installed base of the newest and 5G ready Nokia base station type. Ongoing core modernization (cloud) will take the nodes to 5G ▪ An upcoming 5G pilot is expected in summer 2020 with 3.6GHz test- frequencies in one or two smaller cities. Initial 5G offering on 700MHz in urban areas expected end of 2020 ▪ Limited investments needed to turn on initial 5G offering over the next years 5G frequency portfolio ▪ Ice has a healthy 5G frequency portfolio, and has already won the 700MHz band, one of the 5G pioneer bands. Ice was first in Norway to turn on the 700MHz band in November this year (4G) ▪ Ice expects that current spectrum holdings will be re-deployed on 5G as more handsets will support 5G on more frequencies over time ▪ Norwegian auctions relevant for 5G will be arranged over the next years, most notably the 3400-3800MHz 5G pioneer band, available from 1.1.2023 “Ice has turned on the 700 MHz band” - Inside Telecom 28 November 2019

SLIDE 13 13

New regulation of Norwegian telecom market

▪ The Norwegian telecom market will continue to be highly regulated, as one of the least competitive markets in Europe ▪ Continued and increased support for the 3rd network ▪ Telenor is one of a very few telecom operators in Europe with this kind of regulation, main points in the new regulation are:

▪ Continued obligation to offer wholesale access, with lower data prices for Ice than the current regulation ▪ Continued obligation to allow site sharing, with stricter regulation on cost sharing and application deadlines

▪ New regulation was sent to ESA for verification 26 March, with 30 days response deadline ▪ Ice has a «National Roaming Agreement» (NRA) with Telia until April 2021

SLIDE 14 14

Limited direct Covid-19 impact:

Limited direct impact, focus on maintaining business as usual and continue to build the third network in Norway Several initiatives taken to protect employees and ensure the quality and stability of the network Dramatic changes in user behavior with no negative impact on network stability Changing traffic volumes:

Data traffic is stable
Voice traffic is up
On-net share on data and voice is up
International roaming is down
Neutral effect on NRA cost for Ice

Effects on subscription growth:

Decline in total sales as an effect of

quarantine measures, especially impacting retail sales

Increase in digital sales, more focus

and investments in digital in Q2

Underlines the importance of a well- functioning stable, diversified and modern telecom infrastructure and a healthy and competitive telecom market in Norway

SLIDE 15 15

Q4 2019 financials

SLIDE 16 16

Positive top-line and margin development in Q4 2019

*Other revenues in Q1-19 includes sale of trademark from AINMT Holdings (NOK 46 million)

72 67 75 84 79 39 34 34 287 421 Q4-18 21 80* 289 483 Q1-19 27 320 432 Q2-19 498 Q3-19 389 Q4-19 457 30 365

Sweden (divested Q1-19) Smartphone service revenues Other revenues MBB service revenues (NO/DK)

36
65
46
20
34
0,4
0,3
0,2
0,1

0,0

70
60
50
40
30
20
10
8%

Q3-19 Q4-18

14%

Q1-19

4%
11%

Q2-19

7%

Q4-19 Adj EBITDA Adj EBITDA margin

Operating revenues

NOK million

Adj EBITDA and adj EBITDA margin

NOK million / %

SLIDE 17

Revenues

17

Adj. EBITDA development – Q4 2018 vs Q4 2019
36
34
19

Adj EBITDA Q4 2018 Other revenues

3

102 Employee benefit expenses Smartphone service revenues

34

Sweden revenues

11

NRA expenses

20

Operating expenses

5

Other expenses

9

EBITDA adjustments Adj EBITDA Q4 2019 NOK million

Expenses Adj.

SLIDE 18

▪ Network build-out enabling shift from variable to fixed cost base ▪ iPhone agreement with Apple accelerate on- net shift ▪ Continuously decreasing network rent cost as on-net share increases

On-net data share and network rental cost as % of revenues 18

The increasing on-net share driving the decline in NRA cost share despite growth in data consumption

Q1-18 41% 45% 55% 33% 41% 16% Q2-18 36% 59% 1% Q3-18 67% 35% 6% Q4-18 71% 19% 34% Q1-19 72% 34% Q2-19 73% 22% Q3-19 80% 29% 30% Q4-19

Avg. data on-net share
Avg. voice on-net share

NRA cost / smartphone service revenues

SLIDE 19 19

Ice already the most efficient mobile operator in Norway

Source: Tefficient's compilation based on publicly reported operator data

SLIDE 20 20

Liquidity level sufficient to fund network build-out and growth in Norway until second half 2020

Net interest bearing debt (NOK million) 275 902 1,183 Q4-18 1,496 Q3-19 Q1-19 Q2-19 1,164 Q4-19 Cash and cash equivalents (NOK million)

Satisfactory liquidity well into H2 2020, when the company expects to be adj EBITDA break even

2,214

Q4-19 Q4-18

3,457

Q1-19 Q3-19 Q2-19

2,491
2,932
3,208

SLIDE 21

Guidance & outlook

21

Smartphone network build-out:

2020: ~1,000 new smartphone base stations

National Roaming Cost (NRA):

2020: NOK ~400 million

CAPEX:

2020: NOK ~750 million

EBITDA:

Expect to reach EBITDA* break even during H2 2020 restated new new updated

* Adjusted for revenue and cost one-offs

SLIDE 22 22

Key drivers behind profitability improvements

▪ Reduction of NRA cost

▪ adding ~1,000 base stations in 2020 ▪ increasing VoLTE penetration ▪ iPhone agreement in place ▪ new telecom market regulation

▪ Continued topline growth

▪ adding customers ▪ growing in high ARPU segment ▪ increasing consumption among current customers ▪ value add services

EBITDA:

Expect to reach EBITDA* break even during H2 2020 Guidance:

* Adjusted for revenue and cost one-offs

SLIDE 23 23

Welcome to Ice Group ASA Q1 2020 presentation Q1 2020 webcast: 14 May at 08:00

www.icegroup.com

Report, presentation and analyst spreadsheet will be published on our website at 07:00 on 14 May

SLIDE 24 24

Q&A

SLIDE 25 25

Investor contact

Henning Karlsrud CFO +47 930 45 389 henning.karlsrud@ice.no Espen Risholm Head of investor relations +47 924 80 248 espen.risholm@ice.no

SLIDE 26 26

Appendix

SLIDE 27 27

Income statement*

*Numbers from the divested Swedish operation are included in the 2018 figures, while only for two months in 2019. Ice Group defines Adjusted EBITDA as operating profit after adjustment of operating expenses for depreciation, amortisation, impairment network upgrades, share based compensation expense, non-recurring and other non-

perational items. Any effects from business combinations

are not included. For details, see the section on Alternative Performance Measures and definitions.

NOK million Q4 2018 Q4 2019 FY 2018 FY 2019

Service revenue 390 468 1,539 1,687 Other operating revenue 42 30 121 173 Total operating revenue 432 498 1,660 1,859 National roaming expenses

101
112
434
440

Operating expenses, excl. NRA

147
167
520
574

Other expenses

191
196
721
793

Employee benefit expenses

47
67
220
238

EBITDA

54
43
236
186

Depreciation and amortisation

153
129
465
468

Operating result (EBIT)

207
172
701
655

Net financial income/expenses

126
75
352
488

Profit/loss before tax

333
247
1,052
1,142

Income taxes

5

8

8

10 Net result from continuing operations

338
240
1,060
1,133

Net result from discontinued operations

171

Net result for the period

338
240
1,231
1,133

Adjusted EBITDA

36
34
180
165

Earnings per share (NOK)

Basic from continuing operations
2.67
1.19
8.37
5.62
Diluted from continuing operations
2.63
1.17
8.23
5.52

SLIDE 28 28

Cash flow*

*Numbers from the divested Swedish operation are included in the 2018 figures, while only two for months in 2019.

NOK million Q4 2018 Q4 2019 FY 2018 FY 2019

Cash flow before changes in working capital

30

1

202
86

Cash flow from changes in working capital

86
64
55
138

…from costs to obtain/fulfil customer contracts

34
90
187
265

…from discontinued operations 55 Net cash flow from operating activities

149
154
389
489

Cash flow from investing activities

122
130
461
627

…from divestment of Sweden 166 …from divestment of Nextel Brazil 563 …from discontinued operations

72

Net cash flow from investing activities

122
130

31

461

Cash flow from financing activities

33

563

144

1,857 …from discontinued operations

106

Net cash flow from financing activities

33

563

250

1,857 Net change in cash and bank deposits

305

279

607

907

SLIDE 29 29

Balance sheet*

*Numbers from the divested Swedish operation are included in the 2018 figures. NOK million 31.12.2019 31.12.2018 ASSETS Intangible assets 2,070 1,344 Tangible assets 2,383 2,603 Other non-current assets 663 335 Deferred tax assets 1 Total non-current assets 5,115 4,282 Inventory 9 20 Trade receivables 143 127 Other receivables 18 31 Prepaid expenses and accrued income 27 63 Cash and cash equivalents 1,183 275 Total current assets 1,381 516 TOTAL ASSETS 6,496 4,799 NOK million 31.12.2019 31.12.2018 EQUITY AND LIABILITIES Equity attributable to parent company shareholders

889
1,258

Equity attributable to non-controlling interests

TOTAL EQUITY
889
1 258

Borrowings 4,331 3,672 Non-current leases 1,618 1,625 Provisions for deferred tax 10 Other non-current liabilities 303 Total non-current liabilities 6,252 5,307 Trade payables 164 242 Current lease liabilities 112 66 Other liabilities 21 20 Accrued expenses & deferred income 555 421 Total current liabilities 852 750 TOTAL LIABILITIES 7,104 6,057 TOTAL EQUITY AND LIABILITIES 6,216 4,799

SLIDE 30 30

IFRS 16 impact

NOK million

Reported Change IFRS 16 Restated Reported Change IFRS 16 Restated Statement of financial positions Closing balance FY 2018 Opening balance 2018 Total assets 3,279 1,520 4,799 5,655 1,593 7,248 Equity

992
266
1,258

1,358

241

1,117 Liabilities 4,271 1,786 6,057 4,297 1,834 6,131 Statement of income Q4 2018 Full-year 2018 Total revenue 432

432

1,660

1,660

Total operating expenses

539

53

488
2,103

208

1,895

Depreciation, amortisation

128
24
153
369
96
465

Operating result

235

28

207
813

112

701

Net financial items, tax

96
35
131
221
139
360

Net result, continuing operations

331
6
338
1,033
27
1,060

Adj EBITDA

88

52

36
388

208

180

SLIDE 31 31

Key KPIs

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

No. of active subscriptions (in thousands)

573* 546 627 645 663

Smartphone

443 457 536 555 573

consumer

404 420 498 517 535

business

38 37 38 38 38

MBB (excl. M2M/IoT)

130* 89 91 91 90 Smartphone ARPU 224 221 220 231 234 Number of Smartphone base stations in service EoP 1,775 1,873 1,933 1,987 2,116 Smartphone avg. Data on-net share % 67 % 71 % 72 % 73 % 80 % Voice on-net share % 6 % 16 % 19 % 22 % 30 % Smartphone churn, annualized % 31 % 24 % 24 % 33 % 26 %

*Numbers from the divested Swedish operation are included in the 2018 MBB figures