Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q2 2010 Earnings Presentation
19 slides from Telia Company AB's earnings presentation, August 2010
Slide 1: TeliaSonera January – June 2010
TeliaSonera January – June 2010 Lars Nyberg President and CEO 1 Second quarter 2010 – financial highlights • Net sales in local currencies and excluding acquisitions increased • EBITDA margin, excluding non- 3.3 percent to SEK 26,964 recurring items, improved to million (27,424) 34.2 percent (33.0)
Slide 2: Strong underlying performance
Strong underlying performance Reported figures (SEK) Excluding FX and associated companies 12% 10% Y/Y change - Q2 2010 Y/Y change - Q2 2010 8% 8% 7% 4% 6% 5% 2% 0% 4% 3% -4% -2% -3% 2% -8% 0% Net sales EBITDA* Operating Net sales EBITDA* Operating income* income* • TeliaSonera Group • TeliaSonera G
Slide 3: Improved growth in several markets in Eurasia
Improved growth in several markets in Eurasia Net sales growth y/y* 60% 50% 40% 30% 20% 10% 0% -10% an n n n a va ia al ta ija ta si ep rg st do ra is is ba kh eo N jik ek Eu ol er za G M Ta zb Az Ka U Q1 2010 Q2 2010 * In local currencies and excluding acquisitions 5 Mobile data growth continues in
Slide 4: Continued margin improvement
Continued margin improvement EBITDA* and margin* – Q2 2010 EBITDA* and margin* - 4 quarters rolling 9.5 36% 40.0 36% 9.3 35% 30.0 9.0 34% 34% 8.8 20.0 33% 8.5 32% 32% 10.0 8.3 31% 8.0 30% 0.0 30% Q2 09 Q2 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 * SEK billion and excluding non-recurring items 7 Lower
Slide 5: Higher CAPEX-to-sales ratio in Q2 2010
Higher CAPEX-to-sales ratio in Q2 2010 CAPEX-to-sales, Q2 2010 Group CAPEX-to-sales, H1 2010 36% 16% 32% 14% 28% 12% 24% 10% 20% 8% 16% 6% 12% 8% 4% 4% 2% 0% 0% Mobility Broadband Eurasia Group Q1 10 H1 09 H1 10 • CAPEX-to-sales ratio of 15.2 • CAPEX-to-sales ratio of 11.6 (10.8) percent in Q2 2010*
Slide 6: Outlook for 2010 (revised)
Outlook for 2010 (revised) Outlook 2010 Net sales* Growth in line with the first half of 2010 Addressable cost base* In line with the level of 2009 EBITDA margin** Somewhat higher compared to 2009 (33.6%) CAPEX-to-sales ratio 14-15% (12.8%) * In local currencies and excluding acquisitions ** Excludi
Slide 7: Addressable cost base
Addressable cost base SEK million SEK million 10,000 -2% 5,000 -5% 8,000 4,000 -11% +3% 6,000 3,000 +9% -17% 4,000 -5% 2,000 -4% +8% +6% 2,000 1,000 -4% -7% 0 0 Q2 09 Q2 10 Q2 09 Q2 10 Personnel Marketing IT Rents Other Personnel Marketing IT Rents Other • TeliaSonera Group • Sweden and Finland In l
Slide 8: Solid financial position
Solid financial position SEK million 60,000 2.0 50,000 1.5 40,000 30,000 1.0 20,000 0.5 10,000 0 0.0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Net debt Net debt to EBITDA* rolling 4 quarters * Excluding non-recurring items 15 Debt maturity schedule SEK million Debt Maturing next 12 months, June 30, 2010 3
Slide 9: Strong financial key ratios
Strong financial key ratios June 30, 2010 June 30, 2009 Return on equity* 15.9% 17.0% Return on capital employed* 15.7% 16.8% Equity/assets ratio 51.2% 51.8% Net debt/equity ratio 40.0% 37.1% Net Debt/EBITDA rate* multiple 1.42x 1.45x * Rolling 12 months, EBITDA excl. non-recurring items One of the
Slide 10: TeliaSonera AB credit ratings (A3/A-)
TeliaSonera AB credit ratings (A3/A-) TeliaSonera AB long-term ratings migration history 2002-to-today AA 5 AA- 4 A+ 3 A 2 A- 1 0 Q1/ 0 2 Q4 / 0 2 Q1/ 0 3 Q4 / 0 3 Q4 / 0 4 Q1/ 0 5 Q4 / 0 5 Q4 / 0 6 Q4 - 0 7 Q4 - 0 8 Q4 - 0 9 Q2 - 10 Moody’s (A3/P-2) Standard & Poor’s (A-/A-2) • January 8, 2003, low
Slide 11: Net sales - Group and by Business area
Net sales - Group and by Business area Apr – Jun Apr – Jun Change SEK million 2010 2009 % Mobility Services 12,620 12,881 -2 Broadband Services 10,100 10,736 -6 Eurasia 4,089 3,781 8 Other operations 1,389 1,402 -1 The Group 26,964 27,424 -2 21 EBITDA* - Group and by Business area EBITDA* Apr – Jun
Slide 12: Statement of cash flows
Statement of cash flows SEK million Q2 2010 Q2 2009 Diff EBITDA excluding non-recurring items 9,214 9,043 171 Dividends received from ass companies 827 984 -157 Interest paid (net) -134 -363 229 Income taxes paid -1,150 -722 -428 Payment of restructuring provisions -277 -303 26 Diff between paid/rec
Slide 13: Mobile data
Mobile data Håkan Dahlström President, Mobility Services 25 Traffic will double every year TByte 200,000 100,000 25,000 2007 2008 2009 2010 2011 2012 2013 2014 * Mobility Services Sweden 26 13
Slide 14: Several sources for mobile data growth
Several sources for mobile data growth 1 Mobile broadband 2 Smart phones 3 Machine-to-machine 27 Nordic countries early adopters of technology % of pop using a mobile phone via 3G to access Internet % of pop using a laptop via wireless connect to access Internet Sweden No rway No rway Denmark Denmar
Slide 15: Mobile data growth continues in Sweden
Mobile data growth continues in Sweden Net sales, SEK billion* 4.0 +6% 3.0 2.0 1.0 0.0 Q2 09 Q2 10 Voice, Other Roaming, IC Equipment Data, Messaging SEK million Net sales – Data, Messaging* 1,000 +40% 800 +38% 600 400 200 0 Q1 09 Q1 10 Q2 09 Q2 10 * Mobility Services Sweden 29 Increasing number of
Slide 16: Functionality and user friendliness drive usage
Functionality and user friendliness drive usage Low End Mid Range Smart phones ~5 ~ 15 ~ 250 MByte/month Source: Average data volumes per model in TeliaSonera’s network May 2010 31 Strong momentum for mobile broadband # of subscriptions 600,000 500,000 400,000 300,000 200,000 100,000 0 H1 07 H1 08 H
Slide 17: Different usage for different products
Different usage for different products Mobile broadband – average usage (GB/month) 14 12 12 10 8 6 4 2 1.5 0 Today 2014e Smart phones – average usage (MB/month) 1,250 1,000 1,000 750 500 250 250 0 Today 2014e * Mobility Services Sweden 33 Several factors work in our favour 1 New technology 2 Spectru
Slide 18: Data explosion - stable COGS / CAPEX-to-sales
Data explosion - stable COGS / CAPEX-to-sales Total data volumes (TByte)* CAPEX-to-sales* and COGS-to-sales** ratio 14,000 25% 12,000 20% 10,000 8,000 15% 6,000 10% 4,000 5% 2,000 0 0% 2007 2008 2009 H1 10 2007 2008 2009 H1 10 * Mobility Services Sweden, including SUNAB ** Excluding interconnect and
Slide 19: Conclusions
Conclusions • Demand for bandwidth is unlimited • Technology will continue to deliver • Costs and CAPEX under control • Willingness to pay for: – Speed – Usage – New Services – Quality 37 Forward-looking statements Statements made in this document relating to future status or circumstances, includin