Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Debt Investor Presentation (February 2008)
29 slides from Telia Company AB's debt investor presentation, February 2008
Slide 1: Kim Ignatius, Executive Vice President and CFO
Kim Ignatius Executive Vice President and Chief Financial Officer
Slide 2: TeliaSonera AB (A3/A-)
TeliaSonera AB (A3/A-) • The Nordic and Baltic telecommunications leader • Strong mobile positions in Eurasia, including Russia and Turkey through subsidiaries and associated companies • Strong financial position and healthy cash flow generation • New organization introduced as of January 1, 2007 •
Slide 3: Mobility Services - Nordic and Baltic leadership
Mobility Services - Nordic and Baltic leadership Norway (NetCom, Chess) Finland (Sonera, TeleFinland) Mobile subscriptions 1,577,000 Mobile subscriptions 2,449,000 Sweden (Telia, Halebop) #1 #1 Estonia (EMT, Diil) Mobile subscriptions 4,807,000 #2 Mobile subscriptions 765,000 #1 Denmark (Telia, debi
Slide 4: Broadband Services - Nordic and Baltic leadership
Broadband Services - Nordic and Baltic leadership Finland (Sonera) Norway (NextGenTel) Broadband subscriptions 473,000 Broadband subscriptions 177,000 Fixed subscriptions 497,000 Cable TV subscriptions 178,000 Sweden (Telia) Estonia (Elion) Broadband subscriptions 1,067,000 Among Broadband subscript
Slide 5: Eurasia - strong growth potential
Eurasia - strong growth potential Azerbaijan (Azercell) Mobile subscriptions 3,029,000 Georgia (Geocell) Mobile subscriptions 1,296,000 Kazakhstan (KCell) Mobile subscriptions 6,017,000 Moldova (Moldcell) Mobile subscriptions 504,000 #3 Tajikistan (Indigo & Somoncom) Mobile subscriptions 611,000 Uzb
Slide 6: Year-end Report 2007
Year-end Report 2007 Kim Ignatius Executive Vice President and Chief Financial Officer
Slide 7: Investing in future growth
Investing in future growth Year 2007 in brief • Good top-line growth and bottom-line development throughout the year • EBITDA under pressure in each quarter – Investments in growth, incl. Spain – Price erosion and regulatory intervention – Fixed-voice decline – Acquisitions • Expanded presence in Eu
Slide 8: Intensified efficiency measures
Intensified efficiency measures • Efficiency measures to be implemented primarily in Sweden and Finland during 2008 and 2009 are estimated to give an annual gross savings of approx. SEK 5 billion compared to the cost base of 2007 • About 2/3 will be implemented during 2008 and 1/3 during 2009 • It i
Slide 9: Yoigo in Spain – first year targets reached
Yoigo in Spain – first year targets reached • Continue executing our plan in Spain, according to communicated targets – Operation expected to be cash flow positive and earnings accretive within five years – Target to reach just below 1 million subscriptions by end of 2008 – Estimated EBITDA* loss fo
Slide 10: Group Outlook for 2008
Group Outlook for 2008 Net Sales are expected to show stable growth in the financial year 2008 compared to the previous year EBITDA-margin despite continued aggressive investments in future growth and in the quality of our networks and services, TeliaSonera’s ambition for 2008 is to maintain the EBI
Slide 11: Capital structure and proposed dividend
Capital structure and proposed dividend • Target a solid investment grade long-term credit rating (A- to BBB+) • TeliaSonera’s dividend policy is to distribute at least 40% of net income attributable to shareholders of the parent company • Excess capital shall be returned to shareholders, after the
Slide 12: Investing in future growth
Investing in future growth SEK million FY 2007 Q4 2007 • Net sales 96,344 (91,060) 24,921 (23,187) – Net sales in local currencies +6.3% +6.8% • EBITDA-margin 32.2% (35.4) 28.9% (33.5) • Income from associated companies and JVs 7,697 (5,579) 1,964 (1,555) • Net financials -904 (-263) -289 (-90) • In
Slide 13: FY2007 Net Sales +5.8%
FY2007 Net Sales +5.8% SEK million • Increased sales in Sergel • Internal trade growing in and other Holding entities line with external sales • Acquisition of Cygate, Didata and +1,830 +120 -418 Crescom +845 96, 344 +789 +393 +2,570 • Growth in Kazakhstan and Azerbaijan • Acquisitions in Tajikistan
Slide 14: FY2007 Operating Income
FY2007 Operating Income SEK million • Decreased margins in sales to large corporate • Higher income from associated companies in Russia +1,400 and Turkey +687 • Net sales +2,570 • Increased earnings in consolidated • Improved earnings in Finland and Sweden operations • Declined earnings in Norway, D
Slide 15: Key Financials – Income Statement and Cash Flow
Key Financials – Income Statement and Cash Flow Oct-Dec Oct-Dec SEK million FY2007 FY2006 2007 2006 Net sales 96,344 91,060 24,921 23,187 Gross profit 42,148 42,420 10,313 9,918 Margin (%) 43.7 46.6 41.4 42.8 EBITDA excl. non-recurring items 31,021 32,266 7,208 7,766 Margin (%) 32.2 35.4 28.9 33.5 O
Slide 16: Statement of cash flows
Statement of cash flows Oct-Dec Oct-Dec SEK million FY2007 FY2006 2007 2006 EBITDA excluding non-recurring items 31,021 32,266 7,208 7,766 Dividends received from associated companies 2,684 1,789 - - Interest paid (net) -886 -595 -304 -68 Income taxes paid -5,142 -2,382 -1,506 -1,083 Payment of rest
Slide 17: Key financials – Balance sheets Dec. 31, 2007
Key financials – Balance sheets Dec. 31, 2007 Condensed consolidated balance sheets Dec 31, Dec 31, Dec 31, Dec 31, SEK million SEK million 2007 2006 2007 2006 ASSETS EQUITY & LIABILITIES Goodwill and other intangible Shareholders’ equity 117,274 119,217 assets 83,909 74,172 Property, plant and equi
Slide 18: Krister Kylås, Treasurer
~~ Krister Kylas Treasurer The Nordic and Baltic 4 telecommunications ms Tel iaSone Ta
Slide 19: Credit statistics – TeliaSonera Group
Credit statistics – TeliaSonera Group SEK billion 2007 [A] 2006 Gross Debt 43.6 27.7 Cash & Liquidity(1) 6.7 10.7 Net Debt 36.9 17.0 Moody’s Adjusted Net Debt(2) 55.6 32.4 Adj. Retained Cash Flow(3) 19.1 20.1 Adj. RCF/ND 34% 62% FCF(4) / Adj. Net Debt 8% 30% S&P Adjusted Net Debt(5) 49.2 27.7 Adjust
Slide 20: TeliaSonera pension obligations
TeliaSonera pension obligations • TeliaSonera uses Defined Benefit pension plans for most employees in Sweden, Finland & Norway. • TeliaSonera Pension Funds are funding vehicles for those pension obligations, the remainder recorded on the balance sheet, covered via credit guarantees • Rating agencie
Slide 21: TeliaSonera pension obligations (cont'd)
TeliaSonera pension obligations (cont’d) • Main reasons for the decrease in the “pension gap” by some SEK 1.3 billion (YE 2007 vs. YE 2006) – Increase of discount rate for pension obligations: Pension liabilities decreased by SEK 2.0 billion (-) – Decrease in liability due to liability experience SE
Slide 22: TeliaSonera pension obligations (cont'd)
TeliaSonera pension obligations (cont’d) • TeliaSonera Group pension related risks – A reduction of the Discount Rate for pension obligations by 100 bps from the current level of 4.6 %, implies an increase in TSG pension liabilities, all else equal, by some SEK 3.5 billion – The expected impact on f
Slide 23: TeliaSonera AB credit ratings (A3/A-)
TeliaSonera AB credit ratings (A3/A-) TeliaSonera AB long-term ratings migration history 2002-to-Today AA 5 AA-4 A+ 3 A 2 A- 1 0 Q1/02 Q1/03 Q1/04 Q1/05 Q1/06 Q3-07 Moody’s (A3 / P-2) Standard & Poor’s (A- / A-2) • January 8, 2003, lowered long-term debt • February 5, 2003, lowered long-term debt ra
Slide 24: Debt maturity schedule (excluding lease and pension liabilities)
Debt maturity schedule (excluding lease and pension liabilities) Debt Maturing next 12 months (SEK million) February 1, 2008 800 700 600 TeliaSonera AB 500 400 300 TeliaSonera Finland Oyj (formerly Sonera Corporation) 200 100 0 02/08 03/08 04/08 05/08 06/08 07/08 08/08 09/08 10/08 11/08 12/08 01/09
Slide 25: TeliaSonera funding strategy
TeliaSonera funding strategy • Strong liquidity position, as of December 30, 2007 – Available cash & short-term liquid investment approximately SEK 6 billion (excl e.g. Blocked Funds) – Available unutilised amount of committed bank credit lines approximately SEK 11 billion • Primary means of externa
Slide 26: TeliaSonera funding strategy (cont'd)
TeliaSonera funding strategy (cont’d) • Base-case implies a focus on EMTN financing during the remainder of 2008, primarily in the form of smaller sized EMTN-PP’s. • Public Eurobond remains an alternative, subject to market conditions. • Utilisation of our CP programmes is likely during the spring &
Slide 27: Conclusion
Conclusion • TeliaSonera (A3/A-) the telecommunications leader in the Nordic and Baltic regions • Strong position in growth areas of Eurasia, including Russia and Turkey • Solid capital structure • Strong financial resources and healthy cash flows • High level of financial flexibility Company websit
Slide 28: 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
Slide 29: The Nordic and Baltic telecommunications leader
The Nordic and Baltic 4 telecommunications 2a Tel iaSone Ta
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