Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q3 2012 Earnings Presentation
22 slides from Telia Company AB's earnings presentation, October 2012
Slide 1: Interim Report January – September 2012
Interim Report January – September 2012 Lars Nyberg President and CEO Stable earnings per share and outlook reiterated • Net sales SEK 25,842 million (26,707) – Unchanged compared with last year* • EBITDA** SEK 9,255 million (9,877) – Decrease of 4.0% in local currencies – EBITDA margin of 35.8% (37
Slide 2: Revenues at the same level as last year
Revenues at the same level as last year Net sales growth* 4% 3% 2% 1% 0.0% 0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 * In local currencies and excl. acquisitions 3 Mobility Services is our new challenge Mobility Services Broadband Services Eurasia +12% -1% -3% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12
Slide 3: Defending billed revenues our main challenge
MMO Defending billed revenues our main challenge Billed revenues, change y/y (%) 6% 4% 2% 0% -2% -4% -6% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Mobility Services Mobility Services, excl. Spain Mobility Services. Excluding equipment sales, interconnect and inbound roaming 5 Closely monitoring data
Slide 4: Fewer unwanted calls within Broadband
Fewer unwanted calls within Broadband Unwanted calls (‘000) - Sweden • Recruited approx. 400 employees in customer support in Sweden 100 0 • 600,000 fewer unwanted calls YTD -100 in Sweden, 1.1 million in Broadband -200 • Significant long term cost saving -300 potential -400 -500 -600 -700 Jan Feb M
Slide 5: Reducing our structural cost base
MMO Still positive ratio between sales and costs Net sales and addressable cost base* 8% 6% 4% 2% 0% -2% 2007 2008 2009 2010 2011 9M 12 -4% -6% -8% Net sales Adressable cost base * In local currencies and excluding acquisitions 9 Reducing our structural cost base • Our ambition is to fundamentally c
Slide 6: Looking ahead
MMO Looking ahead Outlook for 2012 (unchanged) • Growth in net sales* expected to be 0-1% • EBITDA margin** to be around 35% • CAPEX-to-sales*** ratio between 13-14% * In local currencies and excl. acquisitions ** Excl. non-recurring items *** Excl. license and spectrum fees 11 Interim Report Januar
Slide 7: Stable net sales and earnings YTD
Stable net sales and earnings YTD • Net sales SEK 77,829 million (77,545) – Increase of 1.0% in local currencies • EBITDA* SEK 27,085 million (27,953) – Decrease of 3.0% in local currencies – EBITDA margin of 34.8% (36.0) • Earnings per share SEK 2.99 (3.05) • Free cash flow SEK 20,806 million (8,86
Slide 8: Billed revenue development within Mobility
Billed revenue development within Mobility Mobility Services – Billed revenues Q3 2012* • Highest subscriber intake in Spain in two years +16% • Mobility Sweden still grows • Other Nordic and Baltic +1% countries remain a challenge -1% -8% Spain Sweden Others** Total Mobility * Excluding equipment,
Slide 9: IP revenues higher than traditional
IP revenues higher than traditional Net sales growth – y/y* IP vs. traditional revenues 54% 1% IP services % 53% Traditional services % 0% 52% -1% 51% -2% 50% -3% 49% -4% 48% 47% -5% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 46% Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 * Excluding Internatio
Slide 10: Stabilized trend in gross margin
Stabilized trend in gross margin Gross margin % • Improved gross margin in Eurasia 66 while lower in Mobility Services 65 and Broadband Services 64 63 62 61 60 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Gross margin, quarter Gross margin, 4 quarter rolling 19 Increase in the addressable cost ba
Slide 11: A better net sales and OPEX balance needed
A better net sales and OPEX balance needed Mobility Services Broadband Services* Eurasia 8% 2% 25% 6% 0% 20% 4% -2% 2% 15% 0% -4% 10% -2% -6% -4% 5% -8% -6% -10% 0% -8% -10% -12% -5% Q1 11Q2 11Q3 11Q4 11Q1 12Q2 12Q3 12 Q1 11Q2 11Q3 11Q4 11Q1 12Q2 12Q3 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Net
Slide 12: Higher income from associated companies
MMO Higher income from associated companies Income from associated companies* SEK billion • Contribution from Turkcell improved 1.8 due to operations as well as less 1.6 one-off items (approx. SEK 400 1.4 million in Q3 2011) 1.2 1.0 • Contribution from MegaFon impacted 0.8 by lower economic ownershi
Slide 13: CAPEX-to-sales ratio in line with outlook
CAPEX-to-sales ratio in line with outlook CAPEX split Q3 2012 CAPEX-to-sales ratio* 7% 20% 13.7% 13-14% 15% Mobility 29% 26% Broadband 10% Eurasia 38% Other 5% 0% Q3 12 9M 12 2010 2011 2012 • CAPEX amounted to SEK 3.2 billion • CAPEX-to-sales for 2012 is (3.6) whereof SEK 3 million (23) for expected
Slide 14: Stable Net debt to EBITDA
Stable Net debt to EBITDA Net debt and Net debt / EBITDA* • Gross debt of SEK 84.3 billion SEK billion and Net debt of SEK 71.0 billion 71.0 • Net debt to EBITDA of 1.96x 75 2.5 60 2.0 • De-leveraging our first priority to keep Net debt to EBITDA within 1.96 45 1.5 our target of 1.5-2.0x 30 1.0 15 0
Slide 15: Outlook for 2012 – Unchanged
Outlook for 2012 – Unchanged Previous outlook Outlook 9M 2012 Growth in Net sales* 1-2% 0-1% 1.0% Same level as EBITDA margin** Around 35% 34.8% 2011 (35.5%) CAPEX-to-sales 13-14% 13-14% 13.7% ratio*** * In local currencies and excluding acquisitions ** Excluding non-recurring items *** Excluding li
Slide 16: 20 million subscribers passed within Mobility
20 million subscribers passed within Mobility Net sales and EBITDA margin* • Significant volume increases in data SEK billion -1% LC roaming during summer months 15 32.1 12 • In Sweden and Norway, more than 9 40 percent of all postpaid subscriptions 6 29.3% include a mobile data package 3 0 Q3 2011
Slide 17: More than 40 million subscriptions in Eurasia
More than 40 million subscriptions in Eurasia Net sales and EBITDA margin* • Record-high subscription intake in Kcell SEK billion +12% LC in Kazakhstan and Ucell in Uzbekistan 6 5 • EBITDA margin kept above 50% 4 3 51.5% • Preparations for public listings of 2 50.3% MegaFon and Kcell continue 1 0 Q3
Slide 18: Group result Q3 2012
Group result Q3 2012 Change SEK million Q3 2012 Q3 2011 % EBIT* 7,676 8,013 -4.2 Non-recurring items -116 44 EBIT 7,560 8,058 -6.2 Financial net -948 -807 17.5 • Higher financial net due to Tax -1,487 -1,633 -8.9 higher gross debt Net income 5,125 5,618 -8.8 Owners of the parent 4,803 4,863 -1.2 Non
Slide 19: Statement of cash flows
Statement of cash flows SEK million Q3 2012 Q3 2011 Diff EBITDA excluding non-recurring items 9,255 9,877 -622 Dividends received from ass companies 0 0 0 Interest paid (net) -259 -460 201 Income taxes paid -922 -953 31 Payment of restructuring provisions -157 -183 26 Diff between paid/recorded pens
Slide 20: Dividend policy
Dividend policy • The company shall target a solid investment grade long-term credit rating (A- to BBB+) to secure the company’s strategically important financial flexibility for investments in future growth, both organically and by acquisitions • The ordinary dividend shall be at least 50% of net i
Slide 21: Liquidity position TeliaSonera Group
Liquidity position TeliaSonera Group Cash and cash equivalents, less blocked funds approx. SEK 8.7 billion Committed bank lines Maturity Size Amount undrawn Syndicated revolving Dec 2017 EUR 1 billion EUR 1 billion credit facility Bilateral credit facility Jun 2013 SEK 1.4 billion SEK 1.4 billion Se
Slide 22: Forward-looking statements
Forward-looking statements Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and