Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q2 2007 Earnings Presentation
20 slides from Telia Company AB's earnings presentation, July 2007
Slide 1: Interim Report January - June, 2007
Interim Report January - June, 2007 Kim Ignatius Acting President and CEO
Slide 2: Speeding up execution of the strategy
Speeding up execution of the strategy • Developing the operations in the home markets – Record sales driven by high commercial activities – Investments in future IP based services – Acquisitions to strengthen the position mainly in Mobility Services and Integrated Enterprise Services • Creating valu
Slide 3: High commercial activity drives sales growth
High commercial activity drives sales growth April - June, 2007 • Net sales in local currencies,+6% • EBITDA-margin 31.4% (34.9) • EPS SEK 0.85 (0.94) • CAPEX MSEK 3,318 (2,631) – CAPEX-to-sales 13.9% (11.6) • Free Cash Flow MSEK 3,558 (4,018) 3
Slide 4: Q2 2007 Net Sales +5.1%
Q2 2007 Net Sales +5.1% SEK million Internal trade growing in • Acquisitions of Cygate and DiData, approx. +200 MSEK line with external sales • Price decline and migration from traditional data services to IP put pressure on sales to large corporate customers • MaS package for SME customers launched
Slide 5: Q2 2007 Operating Income Year-on-Year
Q2 2007 Operating Income Year-on-Year SEK million • Improved earnings in Wholesale Strong improvements in • Decreased depreciation in Swedish operations both Turkey and Russia • Adjustment made in 2006 between Q2 and Q3 +743 -19 -779 -541 +234 -158 6,575 6,316 5,796 Building the foundation and estab
Slide 6: Ongoing cost efficiency programs
Ongoing cost efficiency programs Group total divided by business area Integrated Mobility Broadband Group Total Services Services Enterprise Services Measures to be Est. annual gross implemented from savings effect of approx. Approx. SEK Approx. SEK Approx. SEK April 1 to year-end SEK 2.3 billion wi
Slide 7: Strong financial position and cash flow generation
Strong financial position and cash flow generation SEK billion 3.4 56.4 10.6 28.3 0.9 0.3 39.8 2.6 15.0 6.1 2.1 0.1 Net debt Free Net cash Sales Dividend Minority Other Net debt Pension Operating Contingencies, Adjusted Dec 31, cash paid for of dividends Jun 30, obligation leases* blocked cash net d
Slide 8: Strong financial key ratios
Strong financial key ratios June 30, 2007 December 31, 2006 Return on equity* 16.1% 17.2% Return on capital employed* 19.0% 19.5% Equity/asset ratio 53.6% 49.9% Net debt/equity ratio 37.0% 15.0% * Rolling 12 months High yielding share 8
Slide 9: MCT acquisition - strategic rationale
MCT acquisition - strategic rationale • MCT acquisition underlines TeliaSonera’s strategy to be the leading Eurasian mobile operator – Natural addition to TeliaSonera’s Eurasian footprint, adding three attractive new growth markets ¬ Uzbekistan, Tajikistan and Afghanistan with growing economies and
Slide 10: Re-engineering in BA Broadband Services
Re-engineering in BA Broadband Services Traditional Services with services strong future… Sales Sales Cost Cost 10
Slide 11: Focus on new services and reduced complexity
Focus on new services and reduced complexity All markets Sweden, Finland and Denmark Retail Retail IP-based services Traditional services Product & Production Traditional products Shared IP-based network and products All markets SE FI DK Wholesale Infrastructure (incl. copper, fiber etc.) Internatio
Slide 12: Continuity - with strong track record
Continuity - with strong track record • Strategy – unchanged • Dividend policy – unchanged • Outlook – unchanged from Q1 2007 12
Slide 13: 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 14: The Nordic and Baltic telecommunications leader
The Nordic and Baltic telecommunications leader Tel i d Son e Td
Slide 15: Appendix
Appendix TeliaSonera
Slide 16: Q2 2007 Net Sales vs Q1 2007 +5.2%
Q2 2007 Net Sales vs Q1 2007 +5.2% • Internal trade growing in line SEK million • Acquisition of Cygate and seasonal increase of sales with external sales +386 +9 -346 +259 23,901 +139 +730 • Normal seasonality 22,724 • Stable development between Q1 and Q2, supported by increased sales of Broadband
Slide 17: Q2 2007 Operating Income vs Q1 2007
Q2 2007 Operating Income vs Q1 2007 SEK million • Seasonal increase of variable cost related to net sales • Increase in net sales in Fintur companies • Reversal of interconnect provision in Q1, -141 MSEK in Sweden • Improved earnings in • Increased marketing and sales expenses in several Russia mark
Slide 18: Key Financials – Income Statement and Cash Flow
Key Financials – Income Statement and Cash Flow SEK million Apr - Jun 2007 Apr - Jun 2006 Net sales 23,901 22,737 Gross income 10,221 10,617 Margin (%) 42.8 46.7 EBITDA excl. non-recurring items 7,516 7,928 Margin (%) 31.4 34.9 Operating income excl. non-recurring items 6,575 6,316 Margin (%) 27.5 2
Slide 19: Statement of cash flows
Statement of cash flows SEK million Apr - Jun 2007 Apr - Jun 2006 EBITDA excluding non-recurring items 7,516 7,928 Dividends received from associated companies 607 447 Income taxes paid -811 -1,096 Payment of restructuring provisions -159 -395 Difference between paid/recorded pensions -146 170 Chang
Slide 20: The Nordic and Baltic telecommunications leader
The Nordic and Baltic telecommunications leader Tel i d Son e Td