Status Update

Jul 6, 2020

Press Release

Ladies and gentlemen, thank you all for standing by and welcome to this Cellular two conference call. I would now like to hand the conference over to your first speaker for today, Ms. Carlos Smith Knuckling. Please go ahead, ma'am. Thank you. Hello, everyone. Hopefully, you hear me better than than the operator. My name is Carla Smiths Nussling, and I'm the chairman of the board of Tele2. Thank you all for listening to our call today. And with me here I have Anders Nielsen, CEO Mikael Larsson, CFO and Stefan Bachmann, General Counsel. The purpose of this call is to address the announcement we made this morning concerning Anders Nielsen's departure from Tele2 and the appointment of Kjell Morton Johnson as the new President and CEO. I would like to start off by saying a few words about our announcement and then I will hand over to Anders and then of course we open up the lines for questions. Earlier this year Anders indicated to the Board that he was considering stepping down from his role at some point in the future provided a solid succession plan was in place. Myself and the rest of the board has therefore conducted a structured process for CEO succession, which was finalized today 07/06/2020 when we made the decision to move forward with Shell Morton Johnson's appointment. We know that Shell Morton Johnson's fast experience as a leader in global telecommunications will serve our company well and I'm certain that Tele2 will continue to thrive under his leadership. While the Board of course regrets to see Anders leave the company, we respect his decision and would like to thank him for his great contribution to Tele2. Under Anders leadership, the CamHem integration, which was expected to take three years was successfully completed in just one year. This rapid and successful transformation created a lot of shareholder value while making the company much stronger and better prepared for the future. On top of that Anders and the rest of the leadership team has laid the groundwork for the next phase of transformation, which is expected to reduce costs by at least billion over three years and turn Tele2 into the telco of the future. Anders has indeed had a very successful and intense career as CEO of two public companies over the last six years, steering them through large transformations. On behalf of the Board, I thank Anders for his contribution to Tele2 and wish him all the best for the future. With that, I would like to hand over now to Anders. Thank you for the kind words, Carla. And this has not been an easy decision for me, but it's the right one. The last six years running public companies, FirstComm Hem, followed by Tele2. There is a very bad sound in the background somewhere. I don't know where it comes from. It's been on mute. Ah, excellent. So I continue. The last six years running public companies, First Com Hem followed by Tele2, have been the best and most memorable in my career. I've had the privilege to work with and meet so many great people, and I'm very proud of what the team has achieved. I spent almost all my career working in companies founded by Tele2's founder and largest shareholder. So for me, this is an extra emotional decision. Being CEO of companies going through continuous transformation at high speed takes full focus and the highest priority. And after six years, it has led me to the decision to take a break and focus on other things in life for a while. There is never a good time to leave a successful company. However, the plans for the coming years are late and being executed by the team, which should give us room for a transition of CEO without interruption in delivery of our plans and promises to the market. That is important to me and the reason I flag to the Board well in advance of making my decision so succession could take place in the smoothest possible way. I would like to thank the team here at Tele2. You are truly special, all our supporting shareholders, scrutinizing analysts, and my very supportive board. You have all been important to me, and I thank you very much for your contribution to this journey. Now it's time for the next chapter in the Tele2 history to begin. With that, I hand over to Carla. Thank you, Anders. And we will now open up the lines for Q and A. Before we do that, first, I would like to remind everyone that we are in the silent period ahead of the Q2 twenty twenty report. So well, we only answer questions that are related to today's announcement. Operator, could you please start the Q and A? Thank you. Star one, if you have any questions. We have three questions just came through. The first one is from the line of Terence Hui from Morgan Stanley. May ask your question now. Yes. Good morning, everyone. Thank you for hosting the conference call. Anders, all the best in the future. It's been a pleasure following your progress at Com Hemet and at Tele2. So just a couple of questions. Maybe firstly for you, Anders. I was just wondering why you made the decision now. What was it that prompted you to feel that now is a good time for change? It's quite interesting that the telco sector has been going through a phase of that cost cutting and heavy regulation. Did you find that some of these industry trends are just becoming a bit too tiresome on overburdening? And then the second question is for the Board. So I was just wondering whether there was an option for maybe Anders to have stayed within the Board of Directors, maybe to ensure some continuity to make sure that the transition and the future strategy could be executed? Thank you. Anders, do you start? Yes. Yes. I can start. So thank you very much, Terence, for for your questions and your kind words. So for me, this has nothing to do with the Tele2 or or the business or where our industry is. I think we have a very, very good plan on how to develop Tele2 going forward, which we're now executing on. And I have very good views on where this company is is gonna head in the future. So this is more a personal decision. And then as you may imagine, the the job I have and have had for six years, that that in order to do that in the way I've done it, I need to spend all my focus and and prioritize that highest in life. Otherwise, I I can't sleep well at night and feel that I deliver what I think I should deliver to the company and all the stakeholders. And after having done that for six years, I came to the realization that there are other things in life that I sacrificed. And I think it's time for me to take a break and focus on those things. And you may wonder what what are what are these things? Well, I have a family, which I would like to spend more uninterrupted time with. I love the sea, for instance, so I'm I'm gonna spend more time there. And I have other interests, which basically have to have have been in the backseat for the last six years, which I'm gonna spend more time on. And then we'll see what happens after that. I see this as a as a break after having focused very intensely on work for six years, and that that's that's the reason for for this decision. And I hope that answers your question, Terence. That's great. Thank you. Okay. The question for the Board. It's implicitly you say, could Anders stay? I think Anders has just explained that he wants to do some other things. We respect that as a board. But of course Anders has not been alone. We have a great leadership team. I have also very good board colleagues and we're all determined to continue on the excellent track that Tele2 is on. We have we believe some excellent new CEO with Shell and we will all build on the strategy that has been set and Anders is also still available to consult. So he's not done. But we are truly confident that we continue on the track where we are. Next question, please. Thank you. Next question comes from the line of Peter Nielsen from ABG. Please go ahead. Thank you very much. Congratulations on your decision on us, and and all the very best for the future. I I I guess we will have the opportunity perhaps to speak to you be before you leave, but but at least for now, thank you, and and all the best. I have a a a question for the chairman, please. From the Board's perspective, I mean, you highlighted the integration with Compend is completed earlier than expected. From the Board's perspective, where do you see Tele2 now the company's strategic development, so to speak? And what are the main attributes you've been looking for in the new CEO? He's obviously replacing Anat, which has been a strong profile within Tele2. You mentioned that you're now embarking on the next transformation, executing on EUR 1,000,000,000 OpEx cost reductions over the next three years. You didn't say anything about returning to growth or other factors. Could you perhaps elaborate a little bit and see what where do see the company now? What have been the main characteristics and the new CEO you've been looking for? Thank you. Yes. Yes, absolutely. Thanks. So where we are and I will later on also ask Mikael to elaborate a little bit on this as CFO. But so as said in the Boards, we want it all. So we want both the cost reduction, but we also want a little bit of growth as you know. So it's a combination that we are looking for. That is also what we were looking for when we started look at the candidates for the job. And we had a great tool both internal candidates as well as Swedish as well as international. Tele2 is a great company. A lot of people would like to join us and that's very positive and to embark on the journey where we're on. Your question on what were you looking for in the board, a couple of things. First of all, we wanted to have someone who knows the telco industry with fast experience. Second, we were looking for someone who can be on top of operations. And that's as you've maybe seen in the meantime Shell has quite a lot of operational experience and is on top of the operation. And thirdly, we want a great leader who can energize the team, who can lift the values of Tele2 and who also has a track record and certification of how to deliver telco services. And from his background, as as you've probably seen, Kjell has also worked in Telenor. He knows the Nordics markets. He has been in very difficult markets and he has a huge amount of experience to build on the strategy and to make it even better. Maybe I just said we will also give Mikael an opportunity to say some words for the next period of the transformation project growth where we're on. So Mikael, can you add on this? Thank you, Carla. I mean, the plans are not changed by this announcement today. So we will continue to execute on the FMC strategy for Sweden to try to bring Sweden back to revenue growth again. And this is unchanged. The plans are completely unchanged. Carla mentioned already in the introduction here that we will continue on the business transformation plan to reduce OpEx by at least billion over the year with an annual effect of at least SEK1 billion at the end of the program. And those plans are unchanged. We will continue to deliver on it. And then with Kjell, when he comes on board later this year, of course, we expect him to even further improve these plans and help us to realizing these savings over the period. But they remain unchanged. And on top of this, of course, the highest priorities are the high priority projects for us is the rollout of five gs and remote PHY in the fixed network. So everything is unchanged, I would say. And then we, of course, expect Kjell to help us realizing these plans and then hope of this come with new initiatives for the future strategy. I hope that answers your question. Thank you very much, both. Thank you. Our next question comes from the line of Steve Malcolm from Redburn. Please go ahead. Good morning. And just to echo that, congratulations, Anders, and good luck with your the next stage of your life. Sounds great. I hope you enjoy it. Just really Peter has pretty much asked my question, but I just wanted to come back to the Board decision on sort of internal versus external candidates. And just as you said, the strategy is well laid out, well known. There's no great changes required. So maybe just elaborate a little bit on why you thought it was a good idea to bring in an external candidate versus promote someone internally who knows exactly what needs to do it. That would be great. Thanks. Yes, of course. So as I said, we had quite extensive succession planning because we agreed together with Anders that we would make sure that we have the best leader in place before Anders starting to to to go sailing and all the nice things you were just pointing out to Anders, I almost get jealous. But on the external internal candidate pool asset, Teletu is an excellent company. We're not looking for a CEO for one year and to execute on the road where we are. So we're looking for someone who will also develop the next layers on the strategy, on the transformation where we are to find the combination of growth and cost reduction and to build the smartest telco of the world. And if you do that, hope you appreciate that you also need some fresh eyes. So on one side, I think the board from the board perspective, we have it all. So we have a great leadership team that stays in place, and we have someone coming in with a lot of new experiences who can help us build, an even better company. Okay. Great. Thank you. Thank you. No further questions over the phone line. Please continue. So, operator, is there seem to be no more questions? Yes. There are no questions at this time, ma'am. Sorry? No more questions at the moment, ma'am. Okay. So then I would like to thank everyone for his for his interest in joining this press conference, and we take it from here. And thank you, and enjoy your day, and have a nice day. Thanks for joining. Thank you. That does conclude our conference for today. Thank you all for participating. Have a good day, everyone.