Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q1 2003 Earnings Presentation
21 slides from Telia Company AB's earnings presentation, May 8, 2003
Slide 1: Interim report January-March 2003
Interim report January-March 2003 Anders Igel President and CEO May 8, 2003
Slide 2: Strong earnings improvement
Strong earnings improvement January-March 2003 in brief • Implemented efficiency 7,562 measures are yielding results 5,972 • EBITDA excl. non-recurring items margin 37.2% (30.4) 3,897 3,227 • Low CAPEX level 2,010 • Stronger free cash flow CAPEX • No non-recurring costs Operating EBITDA -289 income
Slide 3: Improved earnings
Improved earnings EBITDA excl. non-recurring items SEK +1,590 million, Q1 2002-Q1 2003 SEK million Other -32 +1,590 Lower cost in Sweden mobile +98 Lower cost in Sweden fixed +655 Continued strong earnings in Norway mobile +224 Improvement in Denmark mobile +124 Consolidation of Fintur +280 Narrowin
Slide 4: Decisions and actions in problem areas yielding results
Decisions and actions in problem areas yielding results International Carrier Denmark • Restructuring program ongoing • Turn-around program yielding results • Improved EBITDA, lower CAPEX Q3 2002 Q4 2002 Q1 2003 Q3 2002 Q4 2002 Q1 2003 0 0 -100 -45 -27 -100 -27 -74 -200 -200 -191 -300 -237 -251 -300
Slide 5: Kim Ignatius, CFO
Kim Ignatius CFO TeliaSonera
Slide 6: Key figures
Key figures SEK million (except percentages and personnel) Jan-Mar 2003 Jan-Mar 2002 Change Net sales 20,349 19,642 +707 Growth in net sales (%) 3.6 n/c EBITDA excl. non-recurring items 7,562 5,972 +1,590 Margin (%) 37.2 30.4 Income from associated companies 23 2,419 -2,396 Operating income 3,227 4,
Slide 7: Net sales
Net sales SEK million Jan-Mar 2003 Jan-Mar 2002 Change Jan-Dec 2002 Sweden 10,486 10,578 -92 43,381 Finland 4,368 4,201 +167 17,515 Norway 1,515 1,200 +315 5,537 Denmark 717 711 +6 2,783 Baltic 1,413 1,512 -99 6,309 Eurasia 558 - +558 847 International Carrier 1,492 1,628 -136 6,861 Holding 570 873
Slide 8: Operating income excl. non-recurring items
Operating income excl. non-recurring items SEK million Jan-Mar 2003 Jan-Mar 2002 Change Jan-Dec 2002 Sweden 2,717 1,916 +801 8,936 Finland 690 681 +9 2,056 Norway 81 -74 +155 -42 Denmark -202 -289 +87 -2,234 Baltic 275 309 -34 1,537 Eurasia 133 18 +115 -76 Russia 32 4 +28 -43 Turkey 54 858 -804 -333
Slide 9: CAPEX
CAPEX SEK million Jan-Mar 2003 Jan-Mar 2002 Change Jan-Dec 2002 Sweden 601 1,122 -521 4,453 Finland 391 413 -22 2,151 Norway 161 212 -51 1,094 Denmark 74 289 -215 953 Baltic 132 286 -154 1,334 Eurasia 225 - +225 234 International Carrier 27 198 -171 1,117 Holding 61 130 -69 355 Corporate 4 3 +1 19 T
Slide 10: Cash flow statement
Cash flow statement SEK million Jan-Mar 2003 Jan-Mar 2002 Change Jan-Dec 2002 Cash flow from operating activities 5,586 2,326 +3,260 20,717 CAPEX (cash effect) -1,689 -2,615 +926 -11,183 Free cash flow 3,897 -289 +4,186 9,534 Other investing activities 404 1,075 -671 7,685 Cash flow before financing
Slide 11: Balance sheet
Balance sheet SEK million Mar 31, 2003 Dec 31, 2002 Change Total assets 198,661 205,370 -6,709 Shareholders’ equity 109,404 108,829 +575 Net debt 34,648 38,075 -3,427 Equity-to-assets ratio1 54% 52% +2% Net debt-to-equity ratio1 32% 36% -4% • High level of financial flexibility • Retaining sufficien
Slide 12: Anders Igel, President and CEO
Anders Igel President and CEO May 8, 2003
Slide 13: Rapid integration of operations
Rapid integration of operations Three months after the merger: • Strategy in place and communicated • One head office established and staffed • New divisions of responsibility implemented • Profit Centers organized and staffed • Competence Centers structure introduced 13
Slide 14: Several synergy initiatives taken during the quarter
Several synergy initiatives taken during the quarter • Negotiations with suppliers • Elimination of overlaps – Corporate functions – Network resources – MMS platforms – IT software licenses – Roaming agreements • Initiatives taken thus far are expected to yield: – Annual cost savings of SEK 436 mill
Slide 15: Continued stand alone improvements
Continued stand alone improvements Efficiency improvements • Sweden – Efficiency programs last year yielding results – Internet Business EBITDA positive – Redundancies announced – Number of job reductions will be determined before summer • Finland – Efficiency programs last year resulting in maintai
Slide 16: Enhanced customer focus
Enhanced customer focus Increase market shares - increase market efforts In Sweden In Finland In other operations Consumer segment Consumer segment Norway • Several new services • Several market activities • New offers to counter market share drop • Colour services Denmark • Market activities planne
Slide 17: Profit enhancement
Profit enhancement Improved profits and cash flow through Three months after the merger Realization of • Synergies ahead of schedule synergies • Rapid integration • Stronger margins – result of successful efficiency improvements Stand-alone efficiency • Internet Services EBITDA positive improvements
Slide 18: Outcome compared with outlook
Outcome compared with outlook Group level Key figures Outcome Q1 mid-term targets Few percentage points Revenue growth annually 3.6% EBITDA excl. non- Increasing margin, recurring items approaching 34% 37.2% Few percentage points CAPEX / Sales higher than 2002 (14.5%) 8% • Increased market efforts w
Slide 19: Focus going forward
Focus going forward • Commercial actions – win back market shares • Continued synergy realization • Efficiency improvements 19
Slide 20: Forward-looking statements
Forward-looking statements This document contains statements concerning, among other things, TeliaSonera's financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent TeliaSonera's future expectations. TeliaSonera
Slide 21: The Nordic and Baltic telecommunications leader
The Nordic and Baltic telecommunications leader May 8, 2003