Síminn hf. Iceland TelecomOrri Hauksson CEO

November 8th 2019

Síminn (Iceland Telecom) in a Snapshot

Listed inNasdaq Iceland in October 2015

Market Cap. around

45 Bn.ISK.

Shareholders Oct 2019

Icelandic pension funds 58%Domestic private equity funds 20%

Non-domestic funds 3,5%Other 13,5%Own shares 5%

Iceland Telecom owns and operates the companies Síminn, Míla, Sensa and Radíómiðun. Síminn is Iceland's largest telco company and provides customers, both individuals and companies,

with a comprehensive product offering in the field oftelecommunications, entertainment and information technology.

Highlights

INCORPORATED IN 1906

630 EMPLOYEES

130 THOUSANDCUSTOMERS

#1 TELCOIN THE COUNTRY

ISK 28.5 BILLION INREVENUES

~ 35%EBITDA*

NATIONWIDE COVERAGE

FULLY FLEDGED ENTERTAINMENT

COMPANYTV & MUSIC

55%EQUITY RATIO

~ 1.6 NET DEBT /EBITDA *

CAPEX ~ 17% OF REVENUES

STRONG ITPRESENCE

* 9M 2019 Results

The competitive landscape

Síminn holds a competitive position in many sub-markets

66%

27%

7%Fixed voice

Síminn

Vodafone

Other

46%

34%

10%

8% 2%Fixed internet

Síminn

Vodafone

Nova

Hringdu

58%

42%

IPTV

Síminn

Vodafone

Source: PTA, Statistics on the Icelandic Telecommunications Market 2018

35%

32%

31%

2%

Mobile subscriptions

Síminn

Nova

Vodafone

Other

#1

#1#1

#1

Síminn’s wholesale infrastructure subsidiary connects homes to fiber

Group spend has been around 10% of total revenues in pure infrastructure investments with long utility horizon

Míla is the largest infrastructure company in Iceland

upp

68.00068k homes passed in the capital area (78%)Focusing on areas with high ROIC

upp

100 Mb/s

Most homes in the country have been VDSL

enabled for years

upp

22.00022k homes connected to Mila´s FTTH network in

capital area (25%)

Sensa – Síminn‘s IT differentiation

upp

Top#5Sensa is one of the top 5

tech companies in the country

upp

uppCustomers include many of the largest companies in Iceland

Sensa has a Gold Partner certification

from Cisco

We continue to improve our core businessand increase our customer service quality through digitalization

Use of Telefonica best practises has beensuccessful

Digital Transformation

▪ significanly reducedtelephone calls tocall center by 20%

▪ Customer centric

▪ Empowered teams

▪ Timebox

▪ Visual managment

Introduced consumer lending under the Pay brand in August

Our goal is to become thepremier alternative short-termlending platform for allconsumers in Iceland

KEY FUNCTIONALITY

Consumer lending

In-app car parking

Corporate loyalty

Direct advertising

Direct telco offerings

B2B alignment

New telecom products are

continually being introduced

Growth in fixed InternetDriven by fiber rollout and a home bundle packet

Increased number of young customers

0%

5%

10%

15%

20%

25%

0 to 10 years 10 to 20 years 20 to 30 years

2015 2018 Oct 2019

Mobile subscriptions coming to Síminn are favourable

5.960 6.434 7.1308.300

6.064

7.258 7.796 7.8295.653

6.094

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 Oct 2019

NP Postpaid

To Síminn From Síminn

982

2.5244.433

13.1579224

3.367

3.2984.254

5.7785405

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018 Oct 2019

NP Prepaid

To Síminn From Síminn

• Leading in a highly penetrated IPTV market• 73,3% of homes have IPTV in Iceland

• Content contracts with key studios• Disney (Fox), NBC, ABC, CBS and recently EPL

• Second only to Netflix in SVoD in Iceland • ~80% vs ~40% of homes

• Leading innovation in IPTV services: • VoD, SVoD, Timeshift, 4K, pre-roll ads, targeted ads, integrated YouTube, OTT STB´s,

broadcast channel and non-linear content in the cloud

• Working on the following innovations:• Profiles, suggestion- and recommendation engine, off-line viewing, EST, voice control,

ML for speech to text and pop-up channel

Premier technical and content platform

Síminn is offering the Premier League

at a significantly more attractive price than known before

USD 35Per month per houshold

Early bet on VoD streaming has worked in our favourUsage development in linear TV vs VoD viewing

Linear TV according to PPM measurement - Gallup

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

Min. pr. month Linear TV (L-axis)

Financial overview

Consolidated income statements – Increasing net incomeAdjusted for impairment losses 2018

upp

Guidancefor 2019***

EBITDA

10.2 – 10.7 b.ISK.

uppCAPEX

6.0 – 6.4 b.ISK.

M.ISK

* Adjusted for impairment loss** Adjusted for accounting methods (TV rights)*** If adjusted back for IFRS16 and TV rights, guidance for 2019 as compared to actual 2018 would be: EBITDA 8.5 – 8.9 b.ISK, and CAPEX 4.4 – 4.8 b.ISK.

2017 2018 2018* 9M 2018** 9M 2019

Total revenue 28.433 28.540 28.540 20.996 21.175

EBITDA 8.607 8.752 8.752 7.397 7.788

Operating profit 4.919 1.917 4.907 4.002 3.752

Net income 3.076 282 3.272 2.718 2.310

EBITDA ratio 30,3% 30,7% 30,7% 35,2% 36,8%

EBIT ratio 17,3% 6,7% 17,2% 19,1% 17,7%

Strong balance sheet and cash flowM.ISK

Restated

31.12.2017 31.12.2018 31.12.2018 30.9.2019

Non-current assets 52.343 50.193 50.956 58.528

Current assets 8.269 8.641 7.878 6.876

Total assets 60.612 58.834 58.834 65.404

Equity 36.281 35.202 35.202 36.240

Non-current liabilities 17.598 16.529 16.529 20.690

Current liabilities 6.733 7.103 7.103 8.474

Total equity and liabilities 60.612 58.834 58.834 65.404

Equity ratio 59,9% 59,8% 59,8% 55,4%

Restated

31.12.2017 31.12.2018 9M 2018 30.9.2019

Capex 4.586 4.614 3.824 4.984

Capex ratio 16,1% 16,2% 18,2% 23,5%

Cash generated by operation 9.096 8.856 7.343 8.173

Cash generated by oper. /

total revenue 32,0% 31,0% 35,0% 34,7%

Large valuable asset base

High equity ratio & low leverage

Significant long-term investments

Strong & stable cash flow

Diversified revenue streams within Síminn product lines…

21,5%23,4%24,3%

6,6%7,4%7,6%

31,1%30,2%28,7%

16,8%14,5%13,7%

13,1%14,5%15,6%

7,2%6,6%6,7%3,7%3,5%3,3%

2018 2017 2016

Mobile Fixed voice Internet & network TV

IT services Equipment sales Other revenue

…as well as its Subsidiaries

68%

56%

35%

19%

39%

58%

13%

5%

7%

Revenue

EBITDA

CAPEX

2018

Síminn Míla Sensa

All assets valuated at Telecom company multiples rather than a mix of Telco / Infra / IT multiples

55%

40%

5%

Síminn EBITDATelco Services:• TV• Internet• Mobile

Míla EBITDAInfrastructure:• Access network• Trunk network• Colocation

Sensa EBITDAInformation Technology:• Networking• Managed Services

Financial information reflecting 2018 actuals, not accounting for IRFS16

Telecom industry is looking for alternative ways to address infrastructure investment

FiberCos

Telco driven TowerCos

NetCos

Data Centers

• TEF carved-out 16k towers (+submarine cable) into Telxius and sold 49% to KKR and Pontegadea

• AMX created Telesites, carving out 11.7k towers in Mexico

• VOD announce plans for a “virtual tower company” to manage its 58k towers across Europe

• Altice sold its towers in Portugal and France

• VOD partnered with CityFiber in UK for FTTH roll-out (1-5m HH) and Deutsche Glasfaser in DE for corporate fibre (c€1.5bn investment)

• Altice awarded 50% of a newly created FiberCo for France (4m HH) for €1.8bn to a consortium of investors

• TalkTalk partnered with InfraCapital for 3m FTTH HHs

• Morgan Stanley and Multitel won the tender to rollout a 700 MHz wholesale only infra in Mexico

• Macquarie buys TDC with the goal to split it into NetCo & RetailCo

• Telstra is under the process of separating its network from the retail

• Equinix acquired Verizon’s 29 data centers for $3.6 b

Telcos are moving from opportunistic tower sale, to monetizing a share of their own TowerCos

TowerCo Operator Main Partner Country MNO Share Towers/Sites EV (€m)

KKR Global 50.1% 16,151 4.4

SFR Towers KKR France 50.1% 10,198 3.6

Portugal Towers Morgan Stanley Portugal 25.0% 2,961 0.66

None Germany 100% 28,000 N.A.

Floating Italy 60.0% 11,000 0.36

Floating Mexico 30.9% 15,849 3.9

Floating China 70.0% 1,917,000 35

Floating India 53.5% 92,123 6.0

Euro

pe

• Telcos traditionally sold their towers opportunistically in private deals to TowerCos

• Recently some Telcos have carved-out all their mobile sites (towers, rooftops) into independent vehicles and IPOed or sold a stake in it

Source: Telefonica S.A. Strategy and Corporate Development + JP Morgan “Towers Newsletter – Oct 2018”

Síminn distributes 20-50% of after-tax profit to shareholders through dividend and/or share buyback

The dividend policy for

Síminn hf. states that

Síminn intends to

distribute between 20% -

50% of after-tax profit to

shareholders through

dividend and/or share

buyback M.ISK

577

275

311

330

750

1.102

1.242

1.310

2016

2017

2018

2019

Dividend paid Buyback of ordinary shares

Thank you