Tele2 AB (publ)

Erik Pers - Head of Investor Relations Allison Kirkby - President and Chief Executive Officer Lars Nordmark - Chief Financial Officer

Henrik Herbst - Credit Suisse Lena Osterberg - Carnegie Irina Idrissova - RBC Capital Markets Robert Slorach - Handelsbanken Thomas Heath - Danske Bank Stefan Gauffin - DNB Victor Hoglund - SEB Ulrich Rathe - Jefferies

Welcome everyone to Tele2's Fourth Quarter 2017 Results Call which we are hosting from London this morning. We will do the presentation and you will find the slides on tele2.com.

And after that we will do a Q&A as usual. And I have with me here, Allison Kirkby, our President and CEO, and Lars Nordmark, our CFO.

Please Allison go ahead.

Thank you, Erik and good morning everyone. So as you all know, liberating and more connected life remains our ultimate priority and we saw that drive yet another quarter of solid growth in the fourth quarter.

We had moved our ranges of service revenue up 8% on a like-for-like basis including Netherlands. And that with despite the impact of Roam Like at Home and because we are continue to deliver very strong growth in the Baltics and in our investment markets.

Net sales were around SEK8 billion down a percentage point like-for-like very much driven by the effects of the consumer credit legislation introduced last year in the Netherlands. And EBITDA was up about 19% to SEK1.7 billion mainly driven by the mobile end-user service revenue growth and also Challenger Program and synergy benefit.

And now having agreed to merge the Tele2 Dutch operation with T-Mobile in the quarter. Netherlands as you will see is reported as discontinued.

So you've got two types of numbers to recap this quarter, which I am sure you are enjoying very much. After the fourth quarter that was not just the quarter of strong financial and operational progress it was also a quarter where we made a number of transformative strategic move.

First, we exited Austria and received the first tranche of proceeds from Hutch. Second we announced the combination of our Dutch business with T-Mobile Netherlands a major and logical next step for us to create a strong customer Champion for Dutch consumers and businesses.

And similarly just a couple of weeks ago, we announced our intention to create a leading integrated connectivity provider in Sweden by merging this content. The new company will be uniquely positioned to meet the evolving customer needs for seamless connectivity and digital services and create significant value for both Tele2 and Com Hem shareholders.

And I would touch on that transaction towards the end of the presentation. So as Lena has said, telcos are boring Tele2 is not, which is definitely not been a boring point for all of us.

So let's get into the operational highlights starting first with our Baltic Sea Challenger markets. Sweden as you know, is still be affected by the Roam Like a Home regulation and so as a result mobile end user service revenue was slightly down 1%.

But if you remove the Roam Like a Home impact, we actually grew 1%. And EBITDA grew by 3% like-for-like.

We were less affected by Roam Like a Home in the Baltics and continues to deliver very strong mobile service revenue growth and EBITDA growth 9% and 21% respectively. Therefore, our Baltic Sea Challenger businesses collectively achieved to the 26% increase in operating cash flow on a rolling 12 month basis as our mobility for our strategy continues to service well with outstanding cash conversion.

In our investment markets, we have great momentum on the back of the increased brand awareness improved customer satisfaction and increasing scale. Kazakhstan delivered another strong increase in mobile end-user service revenue up 20%, 26% sorry, with an EBITDA margin of 28%.

The big news in Netherlands is obviously the agreement with T-Mobile for the combination that significant improves the ability to take on the Dutch FMC duopoly while also bringing forward cash returns to the Tele2 Group and improving our rate profile going forward. And so for the investment markets as a whole, including the Netherlands, the negative 12-month rolling operating cash flow is almost 80% lower than it was a year ago.

Our Positively Fearless Brands fueled strong progress, both financially and also towards our customer. In the first half of the year, we launched new financial propositions in all of our key markets and these propositions including unlimited continued to be embraced positively by customers with strong uptake across the group and solid progress on ASPU as well as brand preference and customer satisfaction metric.

More specifically, the Tele2 brand net promoter scores in all markets year-on-year supported by our unlimited propositions, which drive ASPU as well as brand perception. And in Sweden, Comviq Christmas campaign brought sales record for the fourth consecutive year.

Our winning cost structure was also strengthened in the quarter with Challenger program run rate savings now exceeding our 1 billion target and also the TDC OpEx synergies are approaching run rate target after only one year from closing. With the combination of both these programs ahead of plan and our top-line growth this resulted in a 2 percentage point increase in group mobile EBITDA margins to 25%.

So moving on to the markets in more detail and first, our Baltics Sea Challenger. In Sweden, in line with recent quarters and putting aside the Roam Like at Home impact, the Swedish market continued to be stable but competitive with intense campaigning and both bundled and SIM-only segments and additional competing brands started to use introduction discounts of the customer acquisition tool.

But as you know our Swedish business was affected by Roam Like and declines in legacy fixed revenues. Excluding the Roam Like at Home, mobile end-user service revenue witness up 1% with growth in the consumer segment offset by declines in the business segment.

And the EBITDA growth was realized as synergies in the TDC integration and Challenger Program benefit were able to compensate, more than compensate for the effect of Roam Like at Home and the declining fixed and B2B revenues. So let’s go into the Swedish consumer segment.

Here, you can see an underlying growth of solid growth up 3% driven by strong growth in Comviq postpaid due to the continued migration from prepaid and as I said, business by the successful Christmas campaign. Staying true to our purpose of fearlessly liberating people to live a more connected life, we are happy to see there is a strong thirst for data among our Swedish customers as Tele2 postpaid data consumption increased by over 60% on average in the quarter, which allowed us to continue to monetize data as the demand for the larger bundles just keep growing.

Our focus on growth through customer satisfaction is also continuing to show positive signs as both Tele1 and Comviq have maintained an even increased high customer satisfaction scores and increased their net promoter scores compared to the last year with the Tele2 brand named best in class together with Telia in the main brand segment. Moving on to B2B.

And as expected, the market continued to be price competitive, affecting both our fixed and mobile service revenue. We are, however, ahead of expectations on the synergy realization plan from the terminated MVNO contract and headcount reductions.

And within scope, therefore, to exceed the initial synergy target level of SEK300 million. And also we expect to invest a lower integration investment plan as previously expected.

The costs are helping offset the lower sales as we have not yet recovered from weaker sales in the large enterprise segment in prior quarters resulting in a decline in net sales of 8% like-for-like. Remember unusually high sales of low large equipment in Q4 last year also contributed to the year-on-year supply.

The combine product offering however tell us to TEC is a now indeed want to be soup service provide to customer and we remain very excited about the potential of the new contract we signed in the quarter including the Swedish Migration Agency and the extended contract to name a few. So, really it’s been another quarter of winning great names and extending existing contracts.

But as I’ve said previously, we won’t recover from the churn that we have in prior quarters probably until the second half of this year where we excited to be fact also again, but we’re very, very happy with the customer retention and exhibitions that we will see in the recent months. So in summary B2B synergies and charges program are really helping offset the drive on the top line in the quarter.

Moving onto Baltics continued commercialization and monetization of 4G investments continues to drive strong top and bottom line development. Net field growth of 11% was excellent thanks to an ever increasing demand for data and premium handset.

While end user service revenues growth was up 9% largely driven by higher data consumption increased to a level and growth in this stage. EBITDA increased 21% driven by profitable revenue growth and value from the challenging program and the lower investment in mobile broadband versus last year have also -- and EBITDA performance.

In the quarter, we saw again a strong development of 8% of the transition from prepaid to post paid expectation continue and customers traded up to larger data bucket very much encourage by our new proposition. Smartphone penetration continues to increase which also supports the uptake of larger data buckets bundles and in the quarter we saw average data usage for customer more than double.

Additionally, the 4% investment into move our broadband since the revenue increase of more than 12% and is no -- until as delivery to productivity both in the home and on the door. And also we’re very proud of the new maintain improve digital for our customer experience in the Baltics and we saw a great progress in the story behind the online only brand snap which was awarded best website for digital sales.

So in general, we continue to be very proud and excited about the continued opportunity in our Baltics business unit. Looking at the investment markets and move to -- net sales were 7% year-on-year in local currency driven by continued strong momentum in mobile end use of service revenue up 26% in the local currency offset by higher equipment sales in the same period a year before.

Digital income was build from strong customer growth and increasingly large data bucket. EBITDA was in double year-over-year as we reached the benefit of the higher active level improve scale and intervention synergies.

And as a result of the excellent momentum -- is no cash genitive and the first repayment to group of SEK3.3 billion which is approximately SEK80 million was made in the core for the shareholder loan and we expect those shareholder loan repayment to continues for the year. Looking at our CapEx results in a bit more detail, our customer base grew by 7% year-on-year to just over 6.9 million customers driven by our expanded distribution network and our expenses geo -- was up 17% driven by higher margin product mix and continued demand from our higher data bundles.

As we announced last quarter, the network integration is now complete and we are now focused on expanding our market leading 4G coverage to support further untapped customer demand. The update from LTEs, LTE-Advanced allows these to triple and we are that's what excited to offer the Kazakh consumers to faster speed with our LTE and our LTE Advanced coverage now reaching 72% and 44% of the population respectively.

And with that, we'll now move to the Netherlands, which after having announced merger with T-Mobile is reported as discontinued operations. Net sales declined as expected due to changes in the accounting rules.

With respect to third party handset sales, WFT and lower-fixed legacy revenues. Mobile end-user service revenue however was up 70% with a growing mobile customer base increasing by 16% and ASPU growing by 11%.

EBITDA was again positive in the quarter and increased due to the higher mobile revenues, the lower expansion costs and the one-off positive court ruling of SEK97 million. We continue to take providing more than, sorry, we continue to take more than 20% of the postpaid contract market.

However, there are signs that the FMC duopoly is still can have an impact on the available pool of customers which resulted in 43% in net add slightly lower than the previous quarter. According to plan in terms of the merger and the combination program.

T-Mobile have now take-off the pre-notification sale to create a strong number three player, which has the resources to build a strong long term challenge to a market share of the FMC duopoly both in mobile and end-consumer and in B2B for the benefit for all Dutch customers. And with that, I'm going to hand over Lars now.

Thank you, Allison. Let's turn to the next page for an overview for the mobile end-user service revenue development.

As we have talked about mobile end-user service revenue has grown 8% in Sweden and Netherlands but in these lines we are looking at the continuing operations and recorded year-on-year increase came in at 5%. FX effects were quite small this quarter.

On the right hand side, looking at the individual operations, we are seeing positive trends across all our markets. Sweden has increased of SEK13 million was mainly related to the TDC acquisition.

It was offset by Roam Like at Home resulting in a like-for-like decrease in mobile end-user service revenue of 1% which was in line with our expectations. They both have contributed SEK47 million in the quarter, thanks to continued successful data monetization.

The biggest contribution this quarter came from Kazakhstan which increased top-line by 18% to SEK84 million and came as a result of a continued shift towards higher ASPU bundles. Moving on to EBITDA.

Compared to Q4 last year, we have reported growth of 5%. In Sweden integration synergy and benefits from the Challenger Program exceeded the negative impact from Roam Like at Home and thereby delivered a positive EBITDA development.

The Baltics delivered an EBITDA that was SEK56 million higher than last year, which to the large extent was expanding by top-line growth. As for the mobile end-user service revenues, the biggest EBITDA contribution came from Kazakhstan with more than SEK100 million improvement year-on-year.

This is a result of the increased top-line improved scale and successful cost management. In Croatia, we made a provision in the quarter related to the doubtful receivables which had a negative EBITDA impact of SEK89 million.

If we exclude this provision, EBITDA from continuing operations grew by 9% on a like-for-like basis. Turning to CapEx, Although we had a bit of catchup in the quarter to low levels earlier in the year.

The investments for the quarter were 30% lower than last year. This is expanded by lower investments in Sweden as Q4 2014 included some investments related to the new office.

Turning to the next page, we switch from continuing operations, the total operations as this is the basis on which we report cash flow. We see that break cash flow decrease by 15% versus the same quarter last year.

This was mainly attributable to a big shift in working capital as Sweden went from a positive change in working capital last year to a negative on this year. Working capital, of course has to over longer period.

As with the full year, we know about the limited negative cash flow effects from working capital of 135 million. The negative year-on-year development in Q4 was partially offset by reduce cash assumptions in the Dutch business, which is reported as a discontinued operation.

Moreover, we consumed left cash and had lower challenging integration costs, which make up the lion share of the green box highlighting one-off items. As you know, we also like to look at the evolution of cash flow from a longer-term and more operational perspective.

Return to slide 21, we have been rolling 12 months operating cash flow, which we define as EBITDA less CapEx. The graph shows operating cash flows split into our Baltics Sea Challenger and group units, including Germany and IoT, our investment market and lastly, the Netherlands.

As you can see, the Netherlands is now showing a standalone after this is reported as a discontinued operation. Baltics Sea Challenger and rest of group continue to grow its operating cash flow to a record 4.3 billion, reflecting both solid EBITDA development and a disciplined investment policy.

Our investment markets, now including Kazakhstan and Croatia have been on positive trajectory for the last two years and current cash flow positive on a 12-month rolling basis last quarter. Moving on debt and leverage, our economic debt-to-EBITDA.

The increase compared to last quarter to 1.5 largely related to the proceeds from the sale of Tele2 Austria coming in during the quarter. The chart also shows the upcoming dividend payments of SEK2 billion, which will take the leverage to approximately 1.8.

Turning to page 23, where we summarize the challenging program, which has been a major contributor to our performance over the past years. The program is now been concluded as we reached the run rate benefit target of SEK 1 billion at the end of the quarter with 900 million in accumulated benefit for the full year 2017.

As a CFO, I’m proud to say that we have reach our target with lower investments than anticipated as this came in just north of SEK 700 million compared to our initial estimates of SEK 1 billion. Some key takeaways from the program include the new operating model with our shared operations in Riga and India, that was introduced fully 2 years ago, an improved way of working with customer service that’s not only have to reduce costs.

But at the same time, there was increased customer satisfaction. Lastly, the product portfolio have to reduce by roughly 3,000 products.

Although the program has been concluded, we will continue on mission of improving productivity and driving for operational excellence. And as many of you know cost consciousness is and will remain one of our key values of Tele2.

So in line with its value, new initiative to improve effectiveness and flexibility have already been launched in January 2018. Now moving on to our guidance for 2018, which is based on continuing operations and constant currencies.

We are guiding for mobile end-user service revenue growth of a mid-single digits and EBITDA to come in between SEK 6.5 billion to 6.8 billion SEK for the year. We have decided not to guide on net sales this year.

As we think that the other parameters were the most important and attracted nearly all of the focus. Our CapEx guidance, which excludes spectrum investments is in the range of SEK2.1 billion to SEK2.4 billion.

As confirmed in relation to the merger announcement the Board of Directors have decided to recommend to the AGM an ordinary dividend payment for fiscal year 2017 of SEK0.04 per share. And as for leverage we're confirming our current target of two to 2.5 times over the medium term.

And with that I'd like hand back to Allison.

Thanks, Lars. So, let me finish with our priorities moving forward before getting into a brief update on the Com Hem merger.

At first and foremost it all starts with our process a seamless delivery people who have a more connected life and that purpose is enabled by our four key strategic pillars, positively fearless brands, connecting things our customers love, a digital product customer experience, and winning cost structure. By continuing to leverage these pillars we will return Sweden to growth despite the headwinds and in B2B and Roam Like at Home, we'll fuel industry leading momentum in the Baltics, and Kazakhstan and we'll prepare to close both mergers in the Netherlands and Sweden.

As a result we'll continue to deliver sustainable and growing shareholder value while not losing focus on driving excellence and financial discipline and operational execution in order that out top line momentum continues to go down to bottom line momentum and improves cash generation that fuel increasing shareholder remuneration. So, it really has been an extraordinary year and a very strong quarter and I'd like to thank all of our Tele2 employees and colleagues for being amazing challenger spirit and many-many contributions without which we would not be able to deliver this winning set of results.

But let's just before Q&A talk a bit about the merger with Com Hem. As you know we announced our intention to create a leading integrated connectivity provider in Sweden through merger with Com Hem.

Since the announcement we have made both Anders and I with many of ours and Com Hem shareholders. Yet the strategic rationale is clear and the complementary nature of the two businesses are fully understood.

The enlarged group will have a greater diversification in terms of services to our customers, and will thus have a much more resilient and broad based cash flow generation. The majority of cash flows will be driven by connectivity services just as it is today for both Tele2 and Com Hem are driving deeper consumption drive demand for better fixed and faster robust connection.

Much of it is fuelled by the deal and Com Hem's leading digital TV business is therefore a great strategic opportunity for the group. Having said that TV in itself is a limited part of the combined group cash flow given the broadband entire gross margins and lower CapEx in TV and TV itself will benefit from the reduction in CapEx in the coming years as cable boxes are replaced with lower cost Com Hem hub boxes and of course further replaced by app that will provide flexibility in pricing and opportunity from growth and cash generation going forward.

There are also significant cost and revenues driven synergies of SEK900 million in total which we have set a level that we believe we can confidently deliver. The cost synergies are clear and based on our track record with PDC you should feel confident that we will deliver them with excellence and quick play.

Our revenue synergies, while they mainly come from cross selling and churn reduction, as that's based on comparable precedence our comparative with further upside especially in churn reduction. Favorable additional possibilities like cross selling of the digital TV product cross-selling to B2B customers or cross-selling to both the customers have not even been included in the assumptions and should therefore come in talk when they materialize in the future.

But as the final strategic rationale is all about the attractive financial profile of the new combined company. And I just want to illustrate that a bit further.

Now that we have this full 12 month for both our sales and Com Hem. In 2017, the continuing group operations of Tele2 about mainly Sweden, Baltics and Kazakhstan produced an equity free cash flow of SEK3.1 billion.

Com Hem produced an equity free cash flow of SEK1.5 billion and well as you, start to pay taxes of around SEK300 million per year. If you add the SEK900 million of annual synergies to that, net of taxes and added interest costs.

We are already looking at the group with the ability to generate in the area of SEK5 billion of annual equity free cash flow. And that is before underlying organic growth continue to build on top of that.

Com Hem shareholders, well as you know all about 27% of the merged entity and Tele2 shareholders around 73%. So while it's now to show that we can deliver these synergies and grew the underlying cash flow in the meantime.

It illustrates while the same with every scope to meet with a highly accretive deal for shareholders on both sides and let's not forget the investment optionality that Tele2 has around the Dutch and Kazakh assets on the top of that. So with those words, I'd like to finish our presentation and open up for questions.

Thanks very much. I just wondered if you could give a little bit of update in terms of your limited terms.

As the uptick I think you said low-teens recently, whether that is increasing a lot. And I know there are in terms of competition in the consumer market.

It's now where I can reading your release that becoming a little bit more competitive. Can you give anymore sort of concrete examples of what you're seeing?

Thanks very much.

Hi, Henrik thanks for question. Yes, the unlimited plans we've spoken about low teens in Sweden and it continues above that.

Certainly during the Christmas period you get a lot of that trips on vacation assuming for their children and themselves watch the video. And therefore those propositions are very popular but still in the low teens area.

And still in absolute terms a very small potential of our total base, but are growing nicely. In terms of competition in consumer market.

It's as I said, stable but competitive. We continue to see in some of the price data runs so very attractive introductory discipline.

But then the pricing goes back up after the period. And despite that Comviq has just continue to go from strength-to-strength in that segment.

So I think it’s stable but it’s a competitive market, Henrik. And we’re doing great in it.

We grew, if you strip out the impact of Roam Like at Home, we grew our consumer business 2% again in the quarter and as you saw, we have very strong EBITA and cash generation suite.

I have one question. You indicated in the conference all now that you see some additional synergy outside and also you’ve been extremely fast in constructing the synergies for TDC.

You expect at full year to know, you’re at full year run rate already after a little bit more than a year. So I was wondering, are you not being overly conservative with a 5-year prime target for the margin with Com Hem and in which areas is if you would be conservative on the synergies?

Yes. And thank you for the congratulations, Lena, and the continued support is great, thank you.

And yes, listen, we are, we always give excellent that we are highly confident in delivering and we always [indiscernible] for that a little bit more Lena. And TDC was particularly unique and a large chunk of synergies within the MVNO and contractually, we might have been hailed to that for actually a further 3 years.

But the company that had the MVNO wanted us off of their network much quicker than planned. So that’s why TDC has delivered too quickly and so well.

That being said, as we look all programs, calendar program included. We try to achieve everything we possibly we can as quickly as possible.

The reason for the five years on the Com Hem synergies is not really from the OpEx point of view. The OpEx synergies will be in the first two to three years.

It’s the revenue synergies that we have said could take up to 5 years, because the Swedish market is not yet a market that is consumer market, not used to buying converged services. And so that’s why, we said, it could take-up to 5-year.

Where we think we’ve been conservative, however, in those revenue synergies is the churn reduction. The revenue synergies are about SEK 450 million per year by start of churn reduction.

It is well proven that those operators who sell multiple services reduce churn over time and every additional service you’re selling reduces churn by 3 to 5 percentage points. Our churn reduction only assumes around 1 percentage point reduction over the 5-year period.

And so that’s an area, where we do believe, once we’re able to start roughly more closely with the Com Hem that we could perhaps start to see a more ambitious set of goals. But it’s too early for us to promise anything at this time, but that’s an area and I think is a big area of opportunity Lena.

So on Sweden, could you just talk about the net add dynamics between the Comviq brand versus the main brand and the postpaid you -- up from -- prepaid to postpaid migration rather, any changes in trend? Then also on your mobile and user service revenue growth guidance, what are you assuming for growth in Kazakhstan versus the rest of the business?

I’ll put it in other way, do you expect the current growth trajectory to continue? And then finally my question is, now that you have -- you will have a converged presence in Sweden post-merger, how do you think about your mobile focused footprint elsewhere seeing the Baltics, any thoughts about pursuing fixed presence in those markets as well?

So on net adds, we saw positive postpaid net adds. We never split Comviq and Tele2 down.

But from a postpaid consumer perspective, it was another positive quarter of group. You are seeing prepaid, prepaid has been declined for a number of years.

It's declining further at the moment, particularly driven by Roam Like at Home. So the prepaid to postpaid, postpaid migration is definitely being accelerated by Roam Like at Home.

But we are building great momentum in postpaid and therefore that doesn't concern us. We also saw some negative net-adds in the mobile broadband segment, which is normal for time of the year but that's also being affected by increased fiber rollout in the Swedish market.

In terms of mobile end-user service revenue guidance for next year, what we are assuming is, low-single digits in Sweden, mid-single digits in the Baltics and double digits in Kazakhstan. I can’t say it will be at 26% growth rates in Kazakhstan, that was this quarter, but we’re still aiming for double digit growth in Kazakhstan again next year.

And then in terms of convergence in Sweden, we build a strong mobility first position first and then we expand from that. And we have still lots of room for opportunity togrow our mobility first position in the Baltics and certainly in Kazakhstan, and we don’t yet see a need or the opportunity to take it beyond mobile only in the Baltics.

But the Baltics are core assets for us. They are very much linked to our Swedish asset and as we progress further with our more integrated position in Sweden, we’ll of course continue to compare that to create further opportunities in the Baltics.

Thank you very much, sir. The question on CapExand the capital sales.

Doyou see -- the level you're now guiding to – do you see that level as sustainable going forward if we talk about CapEx to sales levels that we'll be interested to…

Yes, excluding spectrum, pretty much, but, Lars, do you want to take that?

Yeah and if you look at the -- Robert, I mean, Sweden has been around 6% to 7% and that's kind of what we're driving for the next year. And Baltics has been slightly higher than that.

And CapEx, obviously they are growing their customer base so we see that so we have the similar level as well going forward. That's obviously before any spectrum and any larger kind of 5G potential investments that we see further down the road.

Alright. So 5G investments you will see that driving up the CapEx level is kind of the base case?

I think we'll take that. We see what's use cases will come through.

And we'll see what those businesses look like before making larger investments in 5G. So we all see that coming through 2020-2021.

Obviously there will be the Swidish 700 megahertz in 2019 that is going to be announced, but it's not clear where the consumer used upside of 5G yet. And so that will be well into 2020 and 2021 as Lars said.

Two questions if I may, firstly on Sweden. At least compared to my own estimate it's there is the revenue beat in this quarter was driven by handsets.

And yet OpEx in totality was pretty much as expected. So I'd assume that handsets especially in the acquired TDC business isn't a very high margin business.

So at least wondering little bit how OpEx came in as low as you can highlight a little bit what's going on there. If it's late Challenger effects or is it's TDC or just a mix of everything.

And then my second question on the CapEx-denominated low internal loan, if you could give an update on size of that loan now that you've start to paying it off. Thank you.

So thanks Thomas. So on the loan of about SEK2.8 billion, about KZT114 billion, and that loan is now obviously tenge-denominated.

But that's what we wrap at the end of the year. And as far as Sweden is concerned, I mean when we look at the Q4, in Q4 we see benefits from it throughout the OpEx side from the stepup program that we have discussed that was implemented at the beginning of the year and then we obviously see the charge of benefits coming through as well.

So those are some of the key drivers that drive the OpEx benefit. And then obviously we have the TDC strategies coming through where the MVNOP's being big part of that.

Yes, hello. I was actually mainly interested in Swedish OpEx as well.

But it could take question on the B2B market in Sweden. How you're seeing that is developing.

And I've seen you've taken some contracts. Are you mainly winning on price or are you in fact driving down prices in the market.

And then on working capital, what can we expect going forward. I think this was quite large swing this quarter.

So anything on working capital for 2018 will be helpful?

Thanks, Stefan. I'll take the first question and then Lars will do the working capital question.

The B2B market in Sweden. Yes, we are very happy with some of the success we've have recently.

And no, it's not just about price, what we’re really starting to see, when we going to the processes is our combined offer of integrated services is really starting to resonate with the customers are choosing us. And that really builds on the TDC’s ability to be really flexible and understand what customer needs, combined with the broader range of services that we are now able to offer as a combined company.

Of course, the market remains very price competitive and we expect that to continue. But based on what we seeing in terms of the acquisitions and the retention.

I think we will have the headwind behind us in the second half of 2018. And we will be able to build momentum and market share behind the new combined offer that we can take.

And on working capital, Stefan, we would expect 2018 to be fairly neutral, if you look at some of the developments that we saw in 2016 and ’17. We implemented the handset financing program in our Swedish business, which was a big contributor on the receivable side.

And that is now approximate at the same levels of volume. So we expect that to be quite neutral.

Two questions here, if I may, most have already been taken. I just wondering, if you can say, where the big EBITDA drivers are for 2018, what countries do you see contributing and where do you see other way around.

And then also if you can just thinking at least comment on your view on the Holland outlook and all that? That will be, of course, reported in a different way, but, if you just say anything, that will be great.

Thank you very much.

So the big drivers of EBITDA in 2018, obviously continued data monetization of our ever-increasing larger bucket in our core Swedish and Baltics businesses. And then continued great markets here and sales benefit Kazakhstan business.

We’ll obviously continue to get rollover benefit of synergies and challenger program in the year. And then those will be partly offset by Roam Like at Home [indiscernible] June, so that’s about 100 million to 150 million hits that will be better than the first half of the year and then some of our legacy fixed businesses declining as well.

But it’s very much from a continued operation point of view, the same story as this year. And then on the Netherlands, the outlook there is very much business as usual, aiming to take around 20% of the available market and continue to build our market position with some of the best customer, value for money, propositions in the market.

At the same time as preparing for the merger with T-Mobile, so that we can create even stronger challenger to the FMC duopoly.

I have two related questions, and the first one is on conversions in Sweden and see there was if stepped up language I think a bit on sort of their conversions ambitions in Sweden, how do you see them potentially attacking or even diluting some of the benefits you would see sort of trying to lock down the market during the -- in the run up to the merger closing, do you think there's any sort of material risk of them trying to accelerate in the meantime? And the second question related to that what I mean you highlighted sort of conservatism on aspects of the synergies you gave a comment, what would you consider the demand areas of uncertainty in the Com Hem project now, the Com Hem integration project, where would you say are the main challenges?

So, there's been a lot of talk already, our main competitor in the Sweden about the convergence strategy that we've not really seen any impact in the market as of yet, and that we have a lot to do, to be able to lock down the market before we did anything and I feel that there'll be room for both of us, to do in the market because there isn't converged services today and we are going to have the uniquely backed TV product in the market which we already have the leading market share there, it’s increasingly becoming a platform that would take on more OTT options and will increasingly become app based, and that we can move on to old devices, so I don't see that as a risk at all to our merger. But we're always paranoid about competition and we watch every move but I am very confident that we'll be both be able to introduce converged services as and when, and do our own thing in our own special ways and create value for customers and shareholders alike.

In terms of synergies with Com Hem, no, I haven't changed my opinion on the ability to achieve those synergies and we are in the early days of discussing: how do we bring the two companies together. I think the great news is we are not culturally dissimilar so I see the Com Hem sees itself as a challenger, in fixed we see ourselves as a challenger in mobile, we'll create an even stronger challenger together when we bring the two cultures together.

The main area of risk in this time is obviously uncertainty around people as we mentioned at the time of the announcement, with retention packages in place, they are very much incentivized, key talent, stable to contribute, to getting off to -- getting off the ground running on day one and contributing to synergies and the intimation ambitions, so it's all really about culture and people and Anders and I are working very closely to ensure that it's a very smooth transition and we're able to go to market quickly with the new combined opportunity for customers.

I was wondering a little bit if you could give us some more detail on the timing of approval we expected. Timing from the comments from regulators.

For Sweden, Lena.

Yeah for the major comment.

Yes. No change there.

We said it would be second half of the year. We from a regulatory point of view, kind of down the timing.

It's very early days. So the two weeks is the announcement.

There is the no filing or anything done yet, but we still expect EGMs after the summer and until then in the second half of the year.

Did you say that you haven't filed yet?

No, just to that. We're just preparing the documentation.

If there are no more questions. Thank you all for joining the call.

And we look forward to meeting a number of you over the coming days as we meet with analysts and investors.

Thank you everyone.