Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q3 2005 Earnings Presentation
20 slides from Telia Company AB's earnings presentation, Oct 25, 2005
Slide 1: Interim Report January-September, 2005
October 25, 2005 1 Interim Report January-September, 2005 Anders Igel President and CEO
Slide 2: Highlights – Third Quarter
2 Highlights – Third Quarter • Net sales +8.5% • Operating income excl. non-recurring items +4.5%, to SEK 6,162 million ‑ Swedish margins maintained in competitive market ‑ Strong sales and earnings growth in Norway, Denmark and the Baltic operations ‑ Very strong sales and earnings growth in Eurasi
Slide 3: Strong customer growth, year on year
3 Strong customer growth, year on year Nordic and Baltic Eurasia, Russia1 and Turkey1 22.6 million 52.7 million +4% +46% +0.9 million +2 million in Eurasia +14.8 million in MegaFon and Turkcell 1) Associated companies October 25, 2005
Slide 4: Strong third quarter results
4 Strong third quarter results Net sales Operating income Excl. non-recurring items SEK million SEK million +8.5% 22,229 -491 +2,699 -475 20,496 +4.5% -167 -775 +1,206 5,898 6,162 Jul-Sep 2004 Sweden Finland All other Jul-Sep 2005 Jul-Sep 2004 Sweden Finland All other Jul-Sep 2005 operations operati
Slide 5: Nordic and Baltic home markets
5 Nordic and Baltic home markets Performance July-September, 2005 • Strong mobile volume growth and efficiency measures sustained margin in Sweden • Strong mobile customer growth Customer growth Q3, 2005 y-o-y Estonia in Finland Sweden Mobile cust. Mobile cust. +5% +17% • Increasing share of postpai
Slide 6: Continued strong sales and earnings growth in International Mobile
6 Continued strong sales and earnings growth in International Mobile Net sales - Eurasia SEK million 1,817 Eurasia – High growth and margins 1,153 • +2 million customers Q3, 2005 y-o-y, total 5.5 million +58% • EBITDA margin excl. non-recurring items 56.4% • Penetration 26% (16) Q3 2004 Q3 2005 Stro
Slide 7: Competitive Cost Levels
7 Competitive Cost Levels Sweden • 1,325 of about 3,000 employees in transition • Measures implemented by end of Q3 estimated to reduce annual costs by SEK 1.2 billion as of 2006 Finland • Turn-around program under review by new President TeliaSonera Finland Denmark • Telia Mobile and Telia Networks
Slide 8: New service initiatives
8 New service initiatives Easy-to-use services Increase in mobile data traffic and customer growth • Roll out in Home markets ‑ SurfPort LAN ‑ Mobile TV WLAN ‑ Connect and Connect Pro GSM • Mobile over broadband – tested in DK GPRS EDGE UMTS Always Best Connected October 25, 2005
Slide 9: New service initiatives
9 New service initiatives Attractive Broadband offerings Strong market position • High quality connection and capacity • Firewalls and virus protection as standard (Sweden) • Bundling and Flat rate October 25, 2005
Slide 10: New service initiatives
10 New service initiatives Outsourcing, IP-VPN Bus. and managed services processes Increased demand Business Applications • TeliaSonera DataNet ‑ Nordic IP-VPN Managed Services solution based on MPLS ‑ Global reach through partners • WM-data, Fortum, City of Malmö Infrastructure and other municipa
Slide 11: Dual opportunities
11 Dual opportunities Home markets International Mobile Strong growth Mature markets markets? Sales 100% mobile Earnings penetration Customers Create growth – Keep profitability Exploit growth – Enhance value Based on strengths in the regions, complementary acquisitions can be considered Octobe
Slide 12: Kim Ignatius
October 25, 2005 12 Kim Ignatius Executive Vice President and Chief Financial Officer
Slide 13: Key financials – Income Statement and Cash Flow
13 Key financials – Income Statement and Cash Flow SEK million Jul - Sep 2005 Jul − Sep 2004 Net sales 22,229 20,496 EBITDA excl. non-recurring items 8,224 8,212 Margin (%) 37.0 40.1 Operating income excl. non-recurring items 6,162 5,898 Margin (%) 27.7 28.8 Net income 4,367 4,739 Earnings per share
Slide 14: Operating income
14 Operating income SEK million Very good sales and earnings growth in International Mobile operations Mainly Strong improvement in restructuring Lietuvos Telekomas and costs in Sweden consolidation of Eesti Telekom +28 -167 -520 +258 +666 6,162 5,898 -775 +103 +78 +73 5,642 • Net sales SEK -475 mil
Slide 15: Operating income
15 Operating income SEK million + Growth in Eurasia and Norway + Consolidation of Orange in Denmark and Eesti Telekom in Estonia - Price erosion in Finland and Sweden • Results from Turkey and Russia • Partly offset by consolidation of Eesti Telekom +1,733 -1,722 +498 -245 6,162 -520 5,898 5,642 • C
Slide 16: CAPEX
16 CAPEX Sweden • Capacity expansion due to volume growth Capex and • Investments in EDGE Capex to Sales • Expansion of GSM coverage SEK billion Finland 12 50% • CAPEX decreased Y-o-Y 10 Norway 40% • Investments in EDGE and 3G 8 30% Denmark 6 17.0 20% • Expansion of coverage and capacity 4 11.4 13.1
Slide 17: Strong financial position and cash flow generation
17 Strong financial position and cash flow generation Sep 30, Dec 31, SEK billion 2005 2004 10.2 0.2 9.4 Return on 7.1 12.4 equity* 9.5% 11.6% Return on capital 1.0 employed* 10.7% 13.9% 5.6 Equity/asset ratio 64.8% 63.8% 0.1 Net debt/equity ratio 7.4% 5.8% 1.8 Net debt Free Net debt * Rolling 12 mo
Slide 18: Outlook
18 Outlook Sales • Strong mobile volume growth expected to continue but price pressure will limit sales growth in home markets • Sweden, decline in sales of traditional fixed services will partly be compensated by sales of other services • In Eurasia, strong sales growth is expected to continue Marg
Slide 19: Forward-looking statements
19 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 a
Slide 20: The Nordic and Baltic leader in Telecommunications
October 25, 2005 20 The Nordic and Baltic leader in Telecommunications