Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q1 2006 Earnings Presentation
21 slides from Telia Company AB's earnings presentation, April 2006
Slide 1: Interim Report January - March, 2006
1 Interim Report January - March, 2006 Anders Igel President and CEO The Nordic and Baltic telecommunications leader
Slide 2: Strong first quarter 2006
Strong first quarter 2006 • Focus on mobile and broadband drives growth, Net sales +6% • Restructuring efforts visible • Operating income improved to SEK 6.1 billion • EBITDA Margin 35.6% (33.1) • Continued strong free cash flow - SEK 4.8 billion • Earnings per share SEK 0.82 (0.68) • High yielding
Slide 3: High yielding share
High yielding share • Ordinary Dividend – SEK 1.25 per share • Extraordinary dividend – SEK 2.25 per share • In total SEK 3.50 per share • ~7% yield 3
Slide 4: Dividend policy for TeliaSonera
Dividend policy for TeliaSonera • The board of directors of TeliaSonera has addressed the company’s dividend policy • It is strategically important to secure financial flexibility for investments in future growth, both organically and by acquisitions • In addition to the ordinary dividend of 30-50%
Slide 5: SG- f &
SG- f & a We % 5 TeliaSonera
Slide 6: Mobile usage and Broadband customers
Mobile usage and Broadband customers Total Mobile Minutes Broadband Customers (millions) (thousands) SE, FI, NO, DK, EE, LT, LV SE, FI, DK, EE, LT, LV2 1,609 6.7 +18%1 +40%1 4.1 588 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2003 2003 2004 2004 2005 2005 2006 2003 2003 2004 2004 2005 2005 2006 1) Ave
Slide 7: Good platform for development in 2006
Performance – Home markets Good platform for development in 2006 Sweden • Improved margins and strong mobile and broadband volume growth Finland • New pricing and Norway offerings in a stabilizing market • 75% of Chess customers already transferred to Baltic countries NetCom´s network Denmark • Stro
Slide 8: Continued growth and profitability
Performance – International Mobile Continued growth and profitability International Mobile – 30% of operating income Russia Eurasia Turkey 8
Slide 9: Improvements in all operations
Improvements in all operations SEK million +367 -104 +334 +242 +56 6,129 +122 +146 +296 4,670 Operating Sweden Finland Norway Denmark Baltic Eurasia Russia & Other Operating income excl. countries Turkey income excl. non- non- recurring recurring Q1 2005 Q1 2006 9
Slide 10: Kim Ignatius, Executive Vice President and CFO
10 Kim Ignatius Executive Vice President and Chief Financial Officer The Nordic and Baltic telecommunications leader
Slide 11: Key financials – Income Statement and Cash Flow
Key financials – Income Statement and Cash Flow SEK million Jan - Mar 2006 Jan − Mar 2005 Net sales 21,979 20,804 EBITDA excl. non-recurring items 7,816 6,889 Margin (%) 35.6 33.1 Operating income excl. non-recurring items 6,129 4,670 Margin (%) 27.9 22.4 Net income1 3,692 3,177 Earnings per share2
Slide 12: Q1 2006 Net sales +5.6%
Q1 2006 Net sales +5.6% SEK million • Continued mobile growth • Customer base and usage increased • Turnaround in fixed communications • Acquisition of Chess, incl. synergies +734 +132 +55 +203 +199 21,979 +520 20,804 -426 -242 • Mobile customer base and usage increased • Strong customer growth, • I
Slide 13: Q1 2006 Operating income year-on-year
Q1 2006 Operating income year-on-year SEK million • Flat EBITDA despite lower sales – higher margin Very good sales and earnings Mainly restructuring costs − Restructuring effects +450 MSEK growth in International Mobile in Sweden and Finland − Lower storm costs +225 MSEK operations − Increased volu
Slide 14: Q1 2006 Net sales compared to Q4 2005
Q1 2006 Net sales compared to Q4 2005 SEK million Acquisition of Chess, incl. synergies +31 -507 -179 -38 -108 -80 -16 22,876 21,979 • Seasonality − Mobile sales -40 MSEK − Equipment sales and other -80 MSEK • Seasonality • Seasonality − Mobile sales -75 MSEK − Equipment sales and other -105 MSEK •
Slide 15: Q1 2006 Operating income vs Q4 2005
Q1 2006 Operating income vs Q4 2005 SEK million • Higher EBITDA (+160 MSEK) despite Very good sales and Mainly restructuring costs lower sales – higher margin earnings growth in Sweden and Finland − Lower sales and marketing costs − Efficiency measures +25 MSEK +211 +182 +177 +272 +64 -33 6,129 -77
Slide 16: CAPEX Q1 2006 – exceptionally low
CAPEX Q1 2006 – exceptionally low Sweden (decreased) Capex and Capex to Sales • Rescheduled GSM investments • Lower investments in circuit-switched SEK billion telephony and transport network 12 30% Finland (decreased) • Focus and lower need for additional 10 25% mobile capacity 8 20% Norway (decrea
Slide 17: Competitive Cost Level programs
Competitive Cost Level programs Sweden • Program proceeds as planned – Realized cost savings est. 450 MSEK in Q1 2006 est. to reduce – Est. annual savings effect 1.9 GSEK as of Q2 2006 from measures taken annual costs by by end of Q1 2006 SEK 4-5 billion – Employees and hired personnel in operative
Slide 18: Strong financial position and cash flow generation
Strong financial position and cash flow generation Mar 31, Dec 31, SEK billion 2006 2005 8.4 4.8 Return on equity* 10.4% 10.3% Return on capital 0.3 employed* 13.4% 12.6% 0.4 0.2 Equity/asset 3.5 ratio 60.5% 58.9% Net debt/equity ratio 2.8% 7.0% * Rolling 12 months Net debt Free cash Acquisitions Sa
Slide 19: Group outlook 2006
Group outlook 2006 (unchanged from Q4 2005) • Group net sales expected to grow • Results before tax expected to grow • CAPEX to Sales ratio - somewhat higher than for 2005 • Free cash flow expected to remain strong Home markets • Continued migration from fixed voice to mobile and IP • Continued stro
Slide 20: 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 21: The Nordic and Baltic telecommunications leader
21 The Nordic and Baltic telecommunications leader