Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q3 2003 Earnings Presentation
23 slides from Telia Company AB's earnings presentation, Oct 29, 2003
Slide 1: Interim report January–September 2003
Interim report January–September 2003 Anders Igel President and CEO October 29, 2003
Slide 2: Beating expectations
Beating expectations SEK million Q3 2003 Q3 2002 Change EBITDA margin excl. non-recurring items 39% 34% +15% Operating income excl. non-recurring items 4,084 1,032 +296% CAPEX 1,889 2,788 -32% Free cash flow 5,138 3,617 +42% • Integration completed – Common vision and values • Synergies ahead of pla
Slide 3: Strongest nine-month result ever
Strongest nine-month result ever SEK million Jan-Sep 2003 Jan-Sep 2002 Operating income 9,531 -46,004 Operating income excl. non-recurring items 11,274 3,842 Free cash flow 14,190 5,862 3
Slide 4: Strengthening the existing footprint
Strengthening the existing footprint Auria • Fixed line telecom operator in Finland • Acquiring full ownership Omnitel • Mobile operator in Lithuania • Increasing ownership to 90% (55%) 4
Slide 5: Well-positioned in European telecom market
Well-positioned in European telecom market 120,000 EUR million Market value 30,000 Revenue 100,000 October 27, 2003 Jan–June 2003 80,000 Top 5 20,000 60,000 40,000 10,000 20,000 0 0 DT Vo FT TI Te B KP S Te TD Te P O Te TA da le T fo N wis lia C len T TE le2 fo ni sc So or ne ca om ne ra 8,000 3.0 N
Slide 6: First European incumbent merger
First European incumbent merger Completed merger with synergies BT Deutsche Telekom France Telecom KPN OTE Portugal Telecom Swisscom TDC Telecom Italia Telefonica Telekom Austria Telenor TeliaSonera 6
Slide 7: Strong customer growth with strong margins
Strong customer growth with strong margins • Consolidated Companies – 11.6 million mobile customers – Annual growth 13% • Associated Companies – 23 million mobile customers – Annual growth 39% • Increase of Internet customers mostly compensated customer decline within fixed voice 7
Slide 8: Home market
Home market Sweden Sales growth in local • Strong margin despite reduced sales in currencies Q3 2003 fixed communications Finland • Fierce competition following mobile number portability Finland Norway Norway Mobile -6% (mobile excl. adj. -1%) • Continued positive trend Mobile Sweden Fixed Estonia 7
Slide 9: TeliaSonera International
TeliaSonera International Annual customer growth Eurasia and Russia Q3 2003 • 2 million subscriber mark surpassed in Eurasia • Over 1 million new mobile Russia customers in Russia +132% Total 5,328,000 International Carrier Q3 2003 Eurasia • Continued earnings +41% improvement Total 2,123,000 Turkey
Slide 10: Outlook 2003
Outlook 2003 • Net sales for the second half of 2003 are expected to be in line with the second half of 2002 • CAPEX is expected to be lower than 12% of sales for the full year • Operating income excluding non-recurring items for the second half-year of 2003 is expected to be in line with the level
Slide 11: Simplicity makes everything possible
Simplicity makes everything possible Common direction basis for visionary leadership • Business concept – Carrying and packaging • Vision 2010 – Simplicity and Service – Drivers behind long-term growth – Transform TeliaSonera into a genuine service company • Wanted position 2005 – Benchmark with Eur
Slide 12: Focus going forward
Focus going forward • Commercial actions – win back market shares • Continued synergy realization • Efficiency improvements • Strengthen existing geographical footprint • Realize the vision 12
Slide 13: Kim Ignatius, CFO
Kim Ignatius CFO October 29, 2003
Slide 14: Very strong earnings improvement
Very strong earnings improvement • EBITDA margin Q3 2002 excl. non-recurring items Q3 2003 – Group 39% (34) 7,915 SEK million 6,889 – Sweden 43% (42) 5,138 • Operating income 4,084 3,617 – Improvements across the operation 1,032 • Lower CAPEX levels CAPEX • Strong free cash flow Operating EBITDA Fre
Slide 15: Net sales change
Net sales change SEK million Revenue per market Decreased traffic 42% growth and volume in fixed effect of consolidation International Carrier Strong mobile growth, Downsizing Eurasia fixed decline Baltic countries 20,102 20,094 -327 -113 94 -34 536 -740 65 40 472 Denmark 1% increase Customer growth
Slide 16: EBITDA excl. non-recurring items improvement SEK +1,026 million
EBITDA excl. non-recurring items improvement SEK +1,026 million SEK million EBITDA per market Successful International Carrier Good earnings restructuring Eurasia trends and effect -79 of consolidation 7,915 Baltic 291 countries Denmark Price pressure 345 Streamlining and accrual 11 Norway and syner
Slide 17: Operating income excl. non-recurring items
Operating income excl. non-recurring items Higher EBITDA and income from associates improve operating income 370 -22 -137 4,084 SEK million 1,133 Significantly better profitability in Turkcell, negative IAS adjustments in comparative quarter 215 361 112 732 252 -55 91 1,032 Operating Sweden Finland
Slide 18: CAPEX reflecting business needs
CAPEX reflecting business needs SEK million CAPEX per market Sourcing synergies. Less demand on the network. Tight investment management International Holding 2,788 Carrier Lower CAPEX in mobile network Eurasia Sweden No network build-outs, lower -332 investments on present Lower investments network
Slide 19: OPEX excl. non-recurring items Jul–Sep 2002 to Jul–Sep 2003
OPEX excl. non-recurring items Jul–Sep 2002 to Jul–Sep 2003 SEK million Increased 13,213 interconnection costs -355 72 Effect from Successful cost- 12 consolidation cutting program -465 -45 191 Lower cost for consultants, 12,179 personnel and Successful cost interconnection reduction program -1,031
Slide 20: Strong cash flow – Strong financial position
Strong cash flow – Strong financial position • Strong cash flow strengthening financial position by reducing net debt SEK billion 38.1 -14.2 1.9 -3.8 22.0 Sep 30, Dec 31, 2003 2002 Equity-to-assets ratio 57% 52% Net debt-to-equity ratio 20% 36% Net debt Free cash flow Dividend Other (incl. Net debt
Slide 21: Non-recurring items Q3 2003
Non-recurring items Q3 2003 SEK million Affecting income after financial items Q3 2003 Jan–Sep 2003 Income after financial items excl. non-rec. items 3,815 10,571 Within EBITDA Synergy implementation costs, Carrier -363 -363 Redundancies -50 -439 Other +69 +135 Within depreciation, amortization and
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
Slide 23: The Nordic and Baltic telecommunications leader
The Nordic and Baltic telecommunications leader October 29, 2003