Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q1 2003 Earnings Presentation
14 slides from Telia Company AB's earnings presentation, May 19, 2003
Slide 1: Kim Ignatius, Chief Financial Officer
Kim Ignatius Chief Financial Officer May 19, 2003
Slide 2: Key financials Q1 2003
Key financials Q1 2003 • Net sales growth 3.6% mainly from Norway and consolidation of Fintur • EBITDA margin before non-recurring 37% (30%) • Operating income before non-recurring improved by 60% to SEK 3,227 million. No non-recurring items in Q1 2003. • Net income SEK 1,602 million, or 8% of reven
Slide 3: Significant changes in OPEX
Significant changes in OPEX 13,670 -845 • Effects from restructuring 2002: employee SEK million average 882 less than in Q1 2002 • Low activity in developing and marketing services Lower OPEX through Increase in net restructuring Carrier sales in Finland Consolidation of Fintur +161 -100 -377 12,787
Slide 4: Significant changes in CAPEX
Significant changes in CAPEX Low development activities SEK million 2,653 -521 and postponed project starts in Sweden Restructuring decreases CAPEX in Denmark Fixed Consolidation and International Carrier of Fintur -215 Lower CAPEX in Baltic, especially Lithuania -171 +224 -140 -154 1,676 CAPEX Q1 S
Slide 5: Restructuring provisions
Restructuring provisions Balance Paid in cash Non-cash Balance SEK million Dec 31, 2002 Q1 2003 changes1 Mar 31, 2003 International Carrier 3,854 -210 -8 3,636 Denmark Fixed 487 -84 -5 398 Sweden streamlining 2002 287 -71 -45 171 Satellite activities and other 86 -52 4 38 Total 4,714 -417 -54 4,243
Slide 6: Synergies
Synergies Merger synergy targets end of 2005 Target for 2003 OPEX synergies SEK 2,300 million • OPEX: 20% of full run- Corporate functions 9% rate by the end of 2003 Network 14% Development 32% • CAPEX: 30% of full run- rate by the end of 2003 Purchasing 18% IT systems 27% Savings from synergy decis
Slide 7: Pension liabilities
Pension liabilities • Pension liabilities in Sweden, Finland and Norway arranged primarily through company-sponsored pension funds • Funding levels and calculation methods stipulated by legislation, must be always fully funded at year-end (cash payment made or a provision booked) • Changes in pensio
Slide 8: Income taxes
Income taxes • Effective tax rate (34% in Q1) is increased by non- deductible goodwill amortization • Deferred tax liability of SEK 11 billion mainly relates to Sweden • Deferred tax benefit of SEK 16 billion mainly relates to 3G and other write-downs in 2002. Some SEK 2 billion relates to restructu
Slide 9: Funding strategy
Funding strategy • Sustaining a high level of financial flexibility • Balancing the combined debt portfolio • Retaining sufficient long-term liquidity position • New financing and refinancing of TeliaSonera Group will mainly be made on TeliaSonera AB level • Existing Sonera public debt intended to b
Slide 10: Debt maturity schedule
Debt maturity schedule1 Debt maturing 2003 (SEK billion) TeliaSonera AB Sonera Corporation 5.0 4.0 3.0 2.0 1.0 0.0 Jan 03 Feb Mar Apr May June July Aug Sep Oct Nov Dec 03 Debt portfolio maturity schedule (SEK billion) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 20
Slide 11: Credit ratings (A/A2)
Credit ratings (A/A2) Moody’s (A2 /P1) Standard & Poor’s (A/A-1) • January 8, 2003, lowered • February 5, 2003, lowered long-term debt rating to A2 long-term rating to A and confirmed the Prime-1 • Ratings on negative Credit short-term rating Watch pending review • A negative rating outlook has • S&
Slide 12: Focus on profits and strong cash flow
Focus on profits and strong cash flow • Improved profitability • Seek profitable growth • Strong free cash flow • High level of financial flexibility • Increasing dividend annually Pro forma Kim Ignatius, Chief 12 Financial Officer
Slide 13: 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 14: The Nordic and Baltic telecommunications leader
The Nordic and Baltic telecommunications leader May 19, 2003