Telia Company AB · OMXSTO:TELIA

Telia Company AB — Q1 2002 Earnings Presentation

37 slides from Telia Company AB's earnings presentation, May 6, 2002

  1. Slide 1: Interim report, January-March 2002

    www.telia.com Interim report, January-March 2002 Stockholm, 6 May 2002 Telia AB, IR 2002-05-06 (Eng.) 1

  2. Slide 2: Marianne Nivert, President and Chief Executive Officer

    www.telia.com Marianne Nivert, President and Chief Executive Office Telia AB, IR 2002-05-06 (Eng.) 2

  3. Slide 3: Telia Q1 2002

    Telia Q1 2002  Positive trends for core business  Improved underlying EBITDA margin  24.4%, Q1 2002 (20.9%, Q4 2001)  Rationalization showing results in Internet Services and International Carrier  Continued strong pressure to rationalize  Efforts will intensify in Q2  Sharply reduced investm

  4. Slide 4: Ongoing rationalization projects

    Ongoing rationalization projects  Concentration of customer services  From 31 to 13  More self-service  More efficient supply process  Delivery centers formed  New Nordic organization - Telia Mobile  Implemented 1 April  Geographical concentration and co-location  Ongoing  Leaner product p

  5. Slide 5: Telia Mobile

    Telia Mobile  New Nordic organization Nordic customer base  Implemented 1 April 5,011,000 (+75,000)  Pan-Nordic services  GPRS-roaming  The reorganization is heightening focus on integration of fixed and mobile communication in business solutions  Homerun at 420 sites in the Nordic region Teli

  6. Slide 6: Telia Mobile: Sweden

    Telia Mobile Sweden Swedish customer base  Interconnection rates lowered 3,459,000* (+20,000)  PocketMode  Open marketplace  20 content providers with more than 2000 services  Mobile intranet  Cooperation with Microsoft and WM-data  Java-based mobile games  3G-network alliance sanctioned by

  7. Slide 7: Telia Mobile: Norway

    Telia Mobile Norway Norwegian customer base 985,000* (+15,000)  Higher sales and improved margin  Positive ARPU trend  Continued strong SMS growth  Expert - New distribution channel * Excluding 99,000 SP customers Telia AB, IR 2002-05-06 (Eng.) 7

  8. Slide 8: Telia Mobile: Denmark and Finland

    Telia Mobile Denmark Danish customer base  322,000 (+34,000) Improved margin Finnish customer base  New bundling of subscriptions 245,000 (+6,000)  Completion of the 900 GSM network Finland  Higher sales  New roaming agreement  New agreements on installation of Homerun Telia AB, IR 2002-05-06

  9. Slide 9: Telia Mobile: Baltic/Russia

    Telia Mobile Baltic/Russia Baltic/Russian customer base 2,351,000* (+314,000)  Rapid expansion  Improved earnings Russia North West GSM (25.6%) 944,000*) +195,000  Good growth potential Estonia Eesti Mobiiltelefon (24.5%) 391,000*) +8,000 Latvia Latvijas Mobilais Telefons (24.5%) 389,000*) Lithua

  10. Slide 10: Telia Internet Services

    Telia Internet Services Focus on rapid profitability enhancement:  Continued sales growth  +36%, Q1 2002  Rate increases for broadband  Continued rationalization and reduced expenditures for R&D  New services  1Mbit/s over cable TV  MTV Live  Telia RoamConnect, Telia Internet För Alla  Stro

  11. Slide 11: Internet Services: Number of broadband customers

    Telia Internet Services Growth - Number of broadband customers (thousands) 300 250 200 150 100 50 0 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Skanova ADSL/ LAN Sweden Denmark High-speed cable Internet Telia AB, IR 2002-05-06 (Eng.) 11

  12. Slide 12: Telia International Carrier

    Telia International Carrier Focus on positive cash flow  Continued improvement of margins  Sharp reduction in investment level  Higher order inflow, capacity, and IP traffic  Network in the USA, now generating revenues  Network acquisitions in the UK are reinforcing growth opportunities and low

  13. Slide 13: International Carrier: Ongoing rationalization measures

    Telia International Carrier Ongoing rationalization measures  Concentration of utilization of premises Initiated  Reduction of consultant costs In progress  Concentration of operating agreements In progress  Replacement of contracted capacity In progress  Focus on sales and marketing Completed

  14. Slide 14: Telia Networks

    Telia Networks  Rationalization projects in progress  Local preselection implemented 2 Feb  Higher wholesale sales partially compensating for decline in the retail market  Healthy demand for broadband access  Danish operations reporting positive EBITDA  Netia under restructure  Geographical c

  15. Slide 15: Financial targets

    Financial targets Telia Group – medium term  Sales growth 8%  Underlying EBITDA margin 25-30% Telia International Carrier Telia Internet Services  Positive underlying  Positive underlying EBITDA on a monthly EBITDA on a monthly basis by year-end 2002 basis by year-end 2003 Telia AB, IR 2002-05-0

  16. Slide 16: Bo Jacobsson, Chief Financial Officer

    www.telia.com Bo Jacobsson, Chief Financial Officer Telia AB, IR 2002-05-06 (Eng.) 16

  17. Slide 17: Group: Net sales

    Group Net sales Growth +2%, Q1 2002 Core business +9%, Q1 2002 MSEK 16,000 58,000 Moving 12-months 13,885 (MSEK) 13,592 12,857 12,000 54,000 8,000 50,000 4,000 46,000 0 42,000 Quarter Q1 00 Q1 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 17

  18. Slide 18: Group: Underlying EBITDA

    Group Underlying EBITDA Growth +1%, Q1 2002 Core business +5%, Q1 2002 MSEK 4,000 28% Moving 12-months 3,381 margin 3,260 3,348 3,000 26% 2,000 24% 1,000 22% 0 20% Quarter Q1 00 Q1 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 18

  19. Slide 19: Telia Mobile: Sales

    Telia Mobile Sales Growth +17%, Q1 2002 MSEK 5,000 4,654 3,985 4,000 3,000 2,000 1,000 0 Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 19

  20. Slide 20: Telia Mobile: Underlying EBITDA

    Telia Mobile Underlying EBITDA Growth +6%, Q1 2002 MSEK 1,400 40% Margin 1,234 1,167 1,200 30% 1,000 800 20% 600 400 10% 200 0 0% Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 20

  21. Slide 21: Telia Mobile: ARPU and MoU Sweden

    Telia Mobile Lowered interconnection rates affecting ARPU Sweden ARPU (SEK) 500 432 439 431 436 426 418 394 415 397 400 Subscriptions 300 314 306 304 303 303 289 Total 200 273 280 262 100 Cash 96 109 123 106 101 108 125 109 99 0 Q1 00 Q1 01 Q1 02 Positive MoU trend Churn 11% MoU (Minutes) 200 180 17

  22. Slide 22: Telia Mobile: ARPU and MoU Norway

    Telia Mobile Higher ARPU and MoU Norway ARPU (NOK) 600 567 528 534 524 536 485 496 487 500 460 Subscriptions 400 300 Total 327 317 341 317 326 289 301 308 292 200 Cash 100 118 124 127 119 107 115 128 125 121 0 Q1 00 Q1 01 Q1 02 Churn 30% MoU (Minutes) 250 223 231 238 230 225 223 198 209 210 200 Subs

  23. Slide 23: Telia Mobile: SMS trend

    Telia Mobile Positive trend for SMS Percentage of sales Q1 2002 Sweden 5% Norway 15% Millions of messages 900 Norway 2002 600 Norway 2001 Sweden 2002 300 Sweden 2001 0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Telia AB, IR 2002-05-06 (Eng.) 23

  24. Slide 24: Telia Internet Services: Sales

    Telia Internet Services Sales Growth +36%, Q1 2002 975 MSEK 1,000 800 715 600 400 200 0 Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 24

  25. Slide 25: Telia Internet Services: Underlying EBITDA

    Telia Internet Services Underlying EBITDA Improvement 51%, Q1 2002 Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 0 0% -10% -100 -20% -200 -170 -30% -40% -300 -50% -350 MSEK -400 -60% Telia AB, IR 2002-05-06 (Eng.) 25

  26. Slide 26: Telia International Carrier: Sales

    Telia International Carrier Sales Growth +35%, Q1 2002 1,014 MSEK 1,000 800 750 600 400 200 0 Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 26

  27. Slide 27: Telia International Carrier: Underlying EBITDA

    Telia International Carrier Underlying EBITDA Improvement MSEK 57, Q1 2002 compared with Q4 2001 Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 0 -20% -100 -30% -200 -300 -265 -40% -400 -331 -500 -50% -600 MSEK -700 -60% Telia AB, IR 2002-05-06 (Eng.) 27

  28. Slide 28: Telia Networks: Sales

    Telia Networks Sales Growth -2%, Q1 2002 Comparable units -1%, Q1 2002 MSEK 8,000 7,027 6,909 6,000 4,000 2,000 0 Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 28

  29. Slide 29: Telia Networks: Underlying EBITDA

    Telia Networks Underlying EBITDA MSEK 3,500 50% Margin 3,000 2,837 2,814 40% 2,500 2,000 30% 1,500 20% 1,000 10% 500 0 0% Quarter Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 29

  30. Slide 30: Share of earnings

    Share of earnings Share of earnings in associated companies MSEK 4,000 3,746 3,500 3,000 2,500 2,339 2,000 1,500 1,000 500 12 0 208 -500 -157 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02Quarter Telia AB, IR 2002-05-06 (Eng.) 30

  31. Slide 31: Investments

    Investments Reduction 44%, Q1 2002 MSEK 18,000 12,000 6,000 4,644 3,659 2,053 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Thereof capex Telia AB, IR 2002-05-06 (Eng.) 31

  32. Slide 32: Cash flow

    Cash flow Lower investment level strengthening cash flow MSEK Jan-Mar Jan-Mar 2002 2001 Cash flow before change in working capital 2,682 2,661 Change in working capital -1,808 -2,175 Cash flow from operating activities 874 486 Cash flow from investing activities -1,739 -3,512 Operating cash flow -86

  33. Slide 33: Income

    Income Income after financial items MSEK 2,500 2,000 1,500 1,000 502 535 500 0 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Telia AB, IR 2002-05-06 (Eng.) 33

  34. Slide 34: Net debt

    Net debt Change in net debt MSEK 14,000 2,010 3,381 2,291 11,908 12,000 327 10,661 10,000 8,000 6,000 4,000 2,000 0 1 Jan Taxes Invest- Underl. Other 31 March 2002 ments EBITDA 2002 Telia AB, IR 2002-05-06 (Eng.) 34

  35. Slide 35: Financial position

    Financial position Strong financial position Debt/Equity ratio 0.20 GSEK 60 50 40 30 58.6 20 10 11.9 0 Adjusted equity I nterest-bearing net debt Telia AB, IR 2002-05-06 (Eng.) 35

  36. Slide 36: Overall objectives

    Overall objectives Improved free cash flow through  Revenue growth  Improved margins  Reduced capex Telia AB, IR 2002-05-06 (Eng.) 36

  37. Slide 37: Telia AB, IR 2002-05-06

    Telia AB, IR 2002-05-06 (Eng.) 37

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