Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q4 2015 Earnings Presentation
16 slides from Telia Company AB's earnings presentation, February 2016
Slide 1: Year-end Report January-December 2015
Q4 Year-end Report January-December 2015 Johan Dennelind, President & CEO 2015 – high pace towards the new TeliaSonera • Started to reduce presence in region Eurasia • Continued business transformation • Solid development in core markets 2017 2016 2015 2013 2014 Deliver on 2018 THE NEW Transform pot
Slide 2: Summary Q4 and FY15 – continuing operations
Summary Q4 and FY15 – continuing operations Q4 2015 FY 2015 SERVICE REVENUE GROWTH Reported +4.4% Reported +4.2% Organic +1.1% Organic -0.4% EBITDA* GROWTH Reported +11.1% Reported +3.8% Organic +9.0% Organic +0.1% FREE CASH FLOW SEK 1.8 billion SEK 12.5 billion *Excluding non-recurring items 3 Soli
Slide 3: Strong consumer propositions; B2C Sweden supported by fiber growth
Strong consumer propositions Sweden ARPU growth y-o-y TV 9.5% 5.2% 2.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 15 15 15 15 15 15 15 15 15 15 15 15 5 B2C Sweden supported by fiber growth B2C Service revenue growth* y-o-y TeliaSonera fiber households Excl. fiber installation charges Telia passed, not con
Slide 4: Sweden B2B tough; Improved performance in Finland
Sweden B2B tough, signs of recovery in SME/SoHo B2B Service revenue* growth y-o-y SME/SoHo Service SME/SOHO revenue* growth y-o-y 2.1% -0.8% Q1 15 Q2 15 Q3 15 Q4 15 -4.8% -2.9% Q1 15 Q2 15 Q3 15 Q4 15 Total Fixed Mobile • Still competitive in large and public segments • Strengthened offerings suppor
Slide 5: Integration of Tele2 in Norway completed; Process to leave Eurasia
Integration of Tele2 in Norway successfully completed Service revenues* & EBITDA**, SEK million EBITDA**, SEK million -2.1% 2,761 1,828 1,417 -2.1% 2,130 681 543 Q4 14 Q4 15 Q4 14 Q4 15 FY 2014 FY 2015 Service revenues EBITDA • Q4 organic EBITDA impacted by lower • Approximately SEK 750 million real
Slide 6: Still challenges in Eurasia; Targets for transformation unchanged
Still challenges in several markets in Eurasia Q4 Region Eurasia – Service rev*. & EBITDA** Kazakhstan – Service revenues* & EBITDA** -3% -6% -14% Service revenues EBITDA -30% Q4-15 Q4-15 Service revenues EBITDA Q4-15 Q4-15 Nepal – Service revenues* & EBITDA** Azerbaijan – Service revenues* & EBITDA
Slide 7: New company – new dividend policy; Outlook 2016
New company – new dividend policy Dividend proposal 2015 • SEK 3.00 per share for fiscal year 2015, to be paid in 2016 • Dividend to be split in two equal tranches and paid in Q2 and Q4 2016, respectively Changed dividend policy • Target annual dividend corresponding to at least 80 percent of free c
Slide 8: Year-end Report Q4 – CFO
Q4 Year-end Report January-December 2015 Christian Luiga, Senior Vice President & CFO 8
Slide 9: Full year summary 2015; Positive development in continuing operations
Full year summary 2015 Service revenue* growth EBITDA** growth -0.7% -1.5% Discontinued Discontinued Continuing operations operations Continuing operations operations -0.4% +0.1% FY14 Sweden Europe Other Eurasia FY15 FY14 Sweden Europe Other Eurasia FY15 total total total total • Service revenue gro
Slide 10: CAPEX increase due to fiber roll-out; Full year cash flow
CAPEX increase due to fiber roll-out CAPEX excl. licenses - Continuing operations CAPEX excluding licenses - Sweden SEK billion Fiber 4G Other 14.3 12.0 6.2 Sweden 4.9 Europe Other 4.7 5.5 2.4 2.6 2014 2015 • Higher CAPEX excluding licenses in Sweden mainly due to high fiber roll-out • Focus on rein
Slide 11: Net debt reduced by SEK 5.8 billion in Q4; Reduced leverage
Net debt reduced by SEK 5.8 billion in Q4 Net debt* change q-o-q, SEK billion • Reduced net debt due to strong operating cash flow, including dividend from MegaFon, and early payment of last tranche from AF Telecom 61.5 • Net cash in Eurasia amounts to approximately SEK -8.2 -2.3 10.6 billion, of wh
Slide 12: Q4 EPS impacted by non-recurring items; Summary Q4
Q4 EPS impacted by non-recurring items Earnings per share*, SEK 0.13 -0.04 -0.37 0.68 -0.07 -0.08 0.09 -1.02 Continuing operations -0.70 Q4 14 Operational Associates Non-recurring FX Net financials Taxes Discontinued Q4 15 total items operations total • Nonrecurring items mainly attributable to SEK
Slide 13: Outlook 2016; Q & A
Outlook 2016 E B I T D A* Ambition to maintain 2015 level C AP E X * * SEK 14-15 billion DIVIDEND >80% of FCF - at least SEK 2 per share * Excluding non-recurring items, in local currencies, excluding acquisitions and disposals ** Excluding license and spectrum fees, currency fluctuations may impact
Slide 14: Debt maturity schedule; Liquidity position
MMO Debt maturity schedule Debt maturing next 12 months – 2016 SEK billion 6 5 4 3 Debt per Q4 2015 2 1 • Gross debt SEK 96.9 billion 0 • Net debt SEK 55.7 billion Ja Ju S O N D Fe M A M Ju A ep pr ug ov ec ct ar ay n- n- l-1 • Net debt/EBITDA 1.53x b- -1 -1 -1 -1 -1 -1 -1 16 -1 16 16 6 6 6 6 6 6 6
Slide 15: Funding currencies; Financial summary Q4 2015
Funding currencies TeliaSonera USD, 4% NOK, 2% JPY, 2% KZT, 4% GBP, 5% SEK, 12% EUR, 71% 29 Financial summary Q4 2015 Oct-Dec 2015 Oct-Dec 2014 Change (%) Net sales (SEK million) 22,655 21,399 +5.9 Change local organic (%) +2.9 Service revenues (SEK million) 18,521 17,738 +4.4 Change local organic (
Slide 16: Financial key ratios; Forward-looking statements
Financial key ratios Dec 31, 2015 Dec 31, 2014 Return on equity*, % 9.3 15.0 Return on capital employed*, % 8.9 12.2 Equity/assets ratio, % 35.1 38.0 Net debt/equity ratio, % 62.5 57.4 Net debt/EBITDA** ratio, multiple 1.53 1.68 Net debt/assets ratio, % 21.9 21.8 * Rolling 12 months ** Rolling 12 mo