Telia Company AB · OMXSTO:TELIA

Telia Company AB — FY2001 Earnings Presentation

44 slides from Telia Company AB's earnings presentation, Feb 8, 2002

  1. Slide 1: Year-end Report 2001

    www.telia.com Year-end Report 2001 Stockholm, February 8, 2002

  2. Slide 2: Review of earnings January - December 2001

    Review of earnings January - December 2001 Sales 20002001 (MSEK)  The Telia Group +6% 54,06457,196  Core operations +13% 48,00754,128 (Comparable units +8%) Underlying EBITDA  The Telia Group -1% 13,08712,915  Core operations +10% 11,55212,657 (Comparable units +5%) Telia AB, IR, 022-2002, eng 2

  3. Slide 3: Review of earnings Q4 2001

    Review of earnings Q4 2001 Sales Q4 2000Q4 2001 (MSEK)  The Telia Group +3% 14,54014,970  Core operations +10% 13,11314,427 (Comparable units +7%) Underlying EBITDA  The Telia Group -17% 3,7903,133  Core operations -7% 3,2403,025 Telia AB, IR, 022-2002, eng 3

  4. Slide 4: Focus on Core Business

    Focus on Core Business Divested businesses  Directory operations Divested/Outsourced  Directory assistance Development and functions  Call center marketing of services in: operations  Set-up and main-  Mobile  International tenance of networks communications  Broadband and consulting  Instal

  5. Slide 5: Strong pressure for change in core operations

    Change Strong pressure for change in core operations  Projects for increased  Short-term costs efficiency  Fewer products  Long-term improved profitability  Project phase-outs Telia AB, IR, 022-2002, eng 5

  6. Slide 6: Change program

    Change program  Concentration of customer services  More efficient supply process  New Nordic organization  Geographic concentration and co-location Telia AB, IR, 022-2002, eng 6

  7. Slide 7: Telia Mobile

    Telia Mobile  New Nordic organization  Pan-Nordic services  Access to UMTS-licences in all Nordic countries Russia North West GSM (25.6%) Subscribers, Finland 749,000*) Nordic countries 239,000 +496,000 4,936,000 +90,000 +417,000 Sweden Norway 3,439,000 2 Estonia 970,0001 +182,000 Eesti Mobililte

  8. Slide 8: Telia Mobile Sweden

    Telia Mobile Sweden  Increased efficiency  Focus on increasing MoU  Integrated solutions - fixed and mobile  PocketMode - open interface to content providers Subscribers 3,439,000*) +182,000 *) excl. 74,000 SP subscribers Telia AB, IR, 022-2002, eng 8

  9. Slide 9: Telia Mobile Norway

    Telia Mobile Norway  Good customer growth  Continued growth of MoU  Increased use of SMS Subscribers 970,000*) +120,000 *) excl. 112,000 SP subscribers Telia AB, IR, 022-2002, eng 9

  10. Slide 10: Telia Mobile Denmark

    Telia Mobile Denmark  Build-up phase  Build out of GSM900-network  Restructuring of operations Subscribers 288,000 +25,000 Telia AB, IR, 022-2002, eng 10

  11. Slide 11: Telia Mobile Finland

    Telia Mobile Finland  Build-up phase  Strong customer growth  Dual Prepaid a great success  More efficient retail outlet business Subscribers 239,000 +90,000 Telia AB, IR, 022-2002, eng 11

  12. Slide 12: Telia Mobile Baltic Region/Russia

    Telia Mobile Baltic Region/Russia  Growth market  Good development in Baltic associates  First pan-Russian mobile operator: Megafon Russia Northwest GSM (25.6%) 749,000*) Estonia +496,000 Eesti Mobilie Telephone (24.5%) 383,000*) Subscribers +56,000 2,037,000 Latvia Latvijas Mobilais (24.5%) +878

  13. Slide 13: Internet Services: Strong growth among broadband customers

    Telia Internet Services Strong growth among broadband customers (‘000) 250 200 150 100 50 0 1999 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Skanova High-speed Internet via cable ADSL/ LAN Sweden Denmark Telia AB, IR, 022-2002, eng 13

  14. Slide 14: Internet Services: Strong demand for Internet access and broadband

    Telia Internet Services Strong demand for Internet access and broadband (No. of customers) 800,000 747,000 700,000 Dial-up Internet 600,000 500,000 400,000 300,000 245,000 200,000 Broadband 100,000 0 1997 1998 1999 2000 2001 Sweden Telia AB, IR, 022-2002, eng 14

  15. Slide 15: Internet Services Position and Focus

    Telia Internet Services Position  Increased market shares in all Swedish segments  Maintained position as the ”second player” in the Danish market Focus  Sharper focus on access-related services:  ADSL, ProLane, dial-up Internet, streaming, hosting, security  Cutting costs on portal services Te

  16. Slide 16: International Carrier

    Telia International Carrier  The build-up phase is completed  Focus on sales and production  Market turbulence will continue throughout 2002  An opportunistic M&A strategy  Write-down of assets SEK 3,027 million Telia AB, IR, 022-2002, eng 16

  17. Slide 17: International Carrier: Measures for improved profitability

    Telia International Carrier Measures for improved profitability  Reinforcing sales and  New organization marketing resources implemented  Tightening of the credit policy  Completed  Replacing leased lines with own infrastructure  Continuing according to plan  Renegotiating operating agreement

  18. Slide 18: Networks

    Telia Networks  Good development Network Provider, +16%, 2001  Value-added services, +29%, 2001  Broadband build out  The consultation process; pricing of fixed access  Local call pre-selection implemented, Feb 2, 2002 Telia AB, IR, 022-2002, eng 18

  19. Slide 19: Networks: Efficiency measures

    Telia Networks Efficiency measures Product efficiency Sales costs Capital productivity Quality improvements Telia AB, IR, 022-2002, eng 19

  20. Slide 20: Financial Goals

    Financial Goals The Telia Group - over the medium-long term  Revenue growth of 8-10%  Underlying EBITDA-margin of 25-30% Telia International Carrier Telia Internet Services  A positive underlying EBITDA  Positive underlying EBITDA on a monthly basis by the on a monthly basis by the end of 2002 e

  21. Slide 21: The Telia Group Net sales

    The Telia Group Growth +6%, 2001 Net sales Core operations +13%, 2001 Rolling Quarter (MSEK) 12-months (MSEK) 14,887 14,540 14,970 16,000 58,000 12,000 54,000 8,000 50,000 4,000 46,000 0 42,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1999 1999 1999 1999 2000 2000 2000 2000 2001 2001 2001 2001 Telia AB,

  22. Slide 22: The Telia Group Underlying EBITDA

    The Telia Group Growth -1%, 2001 Underlying EBITDA Core operations +10%, 2001 Quarter (MSEK) Rolling 12-months Margin 3,790 4,000 3,343 28% 3,133 3,000 26% 2,000 24% 1,000 22% 0 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 99 99 99 99 00 00 00 00 01 01 01 01 Telia AB, IR, 022-2002, eng 22

  23. Slide 23: Effects of the streamlining

    Effects of the streamlining Telia Equity External net sales Underlying EBITDA (MSEK) (MSEK) 1,500 1,427 600 550 500 1,000 400 300 543 500 200 108 225 *) 100 -29 *) 0 0 Q4 2000 Q4 2001 Q4 2001 Q4 2000 Q4 2001 Q4 2001 -100 retained retained companies companies *) Excl. the Orbiant-group Telia AB, IR,

  24. Slide 24: Change in underlying EBITDA

    The Telia Group Change in underlying EBITDA Q4 2000 Q4 2001 The Telia Group MSEK -660 Streamlining MSEK -440 Core operations MSEK -220 Mobile operations, Denmark and Finland MSEK -170 *) Networks - Service Provider MSEK -470 *) Other MSEK +420 *) incl. Non-recurrring costs, total MSEK 300 Telia AB,

  25. Slide 25: Telia Mobile Sales

    Telia Mobile Growth +33%, 2001 Sales Comparable units +19%, 2001 Quarter (MSEK) 5,000 4,350 4,000 3,695 3,000 2,000 1,000 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Telia AB, IR, 022-2002, eng 25

  26. Slide 26: Telia Mobile Underlying EBITDA

    Telia Mobile Growth +42%, 2001 Underlying EBITDA Comparable units +23%, 2001 Quarter(MSEK) Margin 1,600 50% 1,400 1,136 1,104 40% 1,200 1,000 30% 800 600 20% 400 10% 200 0 0% Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Telia AB, IR, 022-2002, eng 26

  27. Slide 27: Telia Mobile Sweden: ARPU, MoU and churn

    Telia Mobile Growth trends in use and revenues per customer Sweden ARPU (SEK) 500 426 446 436 426 432 439 431 419 418 415 375 394 400 Postpaid 300 348 330 331 333 314 Total 306 304 303 303 289 200 273 280 100 Prepaid 121 119 108 109 123 106 108 125 109 101 96 101 0 Q4 Q4 Q4 MoU (minutes) 1999 2000 2

  28. Slide 28: Telia Mobile Norway: ARPU, MoU and churn

    Telia Mobile Growth trends in use and revenues per customer Norway ARPU (NOK) 567 600 528 534 524 486 485 496 487 460 500 406 444 444 Postpaid 400 300 Total 320 325 337 327 317 341 317 305 289 301 308 292 200 Prepaid 100 152 147 136 142 118 124 127 119 115 128 125 107 0 Q4 Q4 Q4 1999 2000 2001 MoU (

  29. Slide 29: Telia Mobile Continued growth in SMS

    Telia Mobile Share of sales Q4 Continued growth in SMS Sweden 4%, Norway 13% (millions of messages) 900 Norway 2001 600 Norway 2000 Sweden 2001 300 Sweden 2000 0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Telia AB, IR, 022-2002, eng 29

  30. Slide 30: Telia Internet Services Sales

    Telia Internet Services Growth +31%, 2001 Sales Quarter (MSEK) 1,000 963 800 705 600 400 200 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Telia AB, IR, 022-2002, eng 30

  31. Slide 31: Telia Internet Services Underlying EBITDA

    Telia Internet Services Improvement +19%, 2001 Underlying EBITDA Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (MSEK) 2000 2000 2000 2000 2001 2001 2001 2001 0 - 100 - 200 -223 - 300 -280 - 400 Internet accesses: Strong improvement - 500 Telia AB, IR, 022-2002, eng 31

  32. Slide 32: Telia International Carrier Sales

    Telia International Carrier Growth +20%, 2001 Sales Quarter (MSEK) 1,001 1,000 932 800 600 400 200 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Telia AB, IR, 022-2002, eng 32

  33. Slide 33: Telia International Carrier Underlying EBITDA

    Telia International Carrier Underlying EBITDA Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Quarter (MSEK) 2000 2000 2000 2000 2001 2001 2001 2001 100 0 - 100 - 200 - 300 -245 - 400 -381 - 500 - 600 - 700 Telia AB, IR, 022-2002, eng 33

  34. Slide 34: Telia Networks Sales

    Telia Networks Growth +3%, 2001 Sales Comparable units +/- 0 Quarter (MSEK) 8,076 7,735 8,000 6,000 4,000 2,000 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Telia AB, IR, 022-2002, eng 34

  35. Slide 35: Telia Networks Underlying EBITDA

    Telia Networks Growth +2%, 2001 Underlying EBITDA Quarter (MSEK) Margin 3,500 3,242 40% 2,936 3,000 30% 2,500 2,000 20% 1,500 1,000 10% 500 0 0% Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Telia AB, IR, 022-2002, eng 35

  36. Slide 36: Shares of earnings in associated companies

    Shares in earnings Shares of earnings in associated companies (MSEK) 4,000 3,746 3,500 3,000 2,500 2,000 1,500 1,213 1,000 500 0 -500 -370 -1,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1999 2000 2000 2000 2000 2001 2001 2001 2001 Telia AB, IR, 022-2002, eng 36

  37. Slide 37: Associated companies

    Associated companies Book Market Participation value value (MSEK) in percent Dec. 31 2001 Dec. 31 2001 AS Eesti Telekom (Estonia) 24.5 543 1,415 AB Lietuvos Telekomas (Lithuania) 30.0 2,366 809 Netia Holdings S.A. (Poland) 48.1 0 129 Infonet Services Corp. (USA) 20.0 2,136 2,446 Total 5,045 4,799 Te

  38. Slide 38: Investments

    Investments Capex 2001 (MSEK) GSEK +16,7 18,000 excl. UMTS-licence in Denmark 12,000 10,311 of which CAPEX 6,000 5,157 0 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Telia AB, IR, 022-2002, eng 38

  39. Slide 39: Non-recurring items

    Non-recurring items Pensions (MSEK) 6,937 Capital gains 7,000 Capital losses Restructuring 4,500 2,000 322 - 500 -7 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1999 2000 2000 2000 2000 2001 2001 2001 2001 Telia AB, IR, 022-2002, eng 39

  40. Slide 40: Income

    Income Income after financial items (MSEK) 7,658 8,000 6,000 4,000 3,436 2,445 2,491 2,000 909 906 356 502 267 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1999 2000 2000 2000 2000 2001 2001 2001 2001 Telia AB, IR, 022-2002, eng 40

  41. Slide 41: Earnings

    Earnings 2000 2001  Income after financial items (MSEK) 11,7174,808  Net income (MSEK) 10,2781,869  Earnings per share (SEK) 3.500.62  Proposed dividend (SEK) 0.500.20 Telia AB, IR, 022-2002, eng 41

  42. Slide 42: Net debt

    Net debt Change in net debt (MSEK) 19,163 16,947 40,000 30,000 12,915 631 20,235 20,000 10,661 1,501 1,007 10,000 0 Jan. 1 Tax Invest- Divesti- Under- Divi- Other Dec. 31 2001 ments tures lying dend 2001 EBITDA Telia AB, IR, 022-2002, eng 42

  43. Slide 43: Financial position

    Financial position Strong financial position (GSEK) 70 60 Debt/equity ratio 0,18 50 40 30 59.2 20 10 10.7 0 Ajusted equity Net interest-bearing liability Telia AB, IR, 022-2002, eng 43

  44. Slide 44: Overall goals

    Overall goals Improved free cash flow through  revenue growth  improved margins  reduced investment level Telia AB, IR, 022-2002, eng 44

Telia — FY2001 Earnings Presentation on 6ix