Telia Company Ab · OMXSTO:TELIA
Telia Company Ab — TeliaSonera — Q4 2013 Earnings Presentation
21 slides from Telia Company Ab's earnings presentation, February 2014
Slide 1: Year-end Report January-December 2013
Year-end Report January-December, 2013 Johan Dennelind President and CEO 1 Fourth quarter summary • Revenues and underlying EBITDA remained flat y-o-y, measured in local currencies • Continued growth in Eurasia with increasing importance of mobile data • Encouraging signs in the consumer segment in
Slide 2: Flat organic sales and EBITDA y-o-y in Q4
Flat organic sales and EBITDA y-o-y in Q4 Net sales & EBITDA margin* CAPEX & CAPEX-to-sales** SEK million SEK million -0.2% organic 6.000 27,069 26,503 5,015 5.000 4,689 4.000 33.3% 32.9% 3.000 18.9% 17.3% 2.000 1.000 0.000 Q4 12 Q4 13 Q4 12 Q4 13 • Revenue growth continued to • Capex increased slig
Slide 3: Further expansion of 4G networks
Further expansion of 4G networks 4G services launched 4G license awarded Currently no 4G license • Crucial spectrum secured in Norway and Finland during Q4 • 4G services launched on all of TeliaSonera’s European markets • Continued network investments to improve coverage and quality • Focus on rolli
Slide 4: Solid B2C performance in Mobility, but B2B weighs
Solid B2C performance in Mobility, but B2B weighs Consumer segment Nordic B2C billed revenue y-o-y chg % • Healthy billed revenue growth 2.9 3.2 in Sweden, Denmark and Norway 1.9 • New price models contribute 0.7 -0.1 positively to ARPU Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 • Finland turned to positive grow
Slide 5: Promising performance in Finland
Promising performance in Finland Mobility Broadband Net sales & EBITDA margin* Net sales & EBITDA margin* SEK million SEK million -5.4% organic -5.5% organic 2,020 1,967 2.000 1,385 1,348 33.0% 26.2% 1.000 18.5% 20.5% 0.000 Q4 12 Q4 13 Q4 12 Q4 13 • Improved competitive position and • Sales continue
Slide 6: Growth and strong margins in Eurasia
Growth and strong margins in Eurasia Net sales & EBITDA margin* CAPEX & CAPEX-to-sales** SEK million SEK million +7.7% organic 5,223 5,241 1,387 1,199 1.000 52.9% 50.8% 26.6% 22.9% 0.000 Q4 12 Q4 13 Q4 12 Q4 13 • Growth backed by strong demand for mobile data • Improved profitability supported by ex
Slide 7: Further focus on our sustainability agenda
Further focus on our sustainability agenda • Creating a sustainable business is a key part of our strategic initiatives • Significant measures implemented to strengthen overall corporate governance – Continued roll-out of our code of ethics and conduct training across the group, with focus on anti-c
Slide 8: Increased dividend proposed
Increased dividend proposed Ordinary dividend and pay-out ratio SEK SEK • The board proposes a 3.50 90% dividend of SEK 3.00 per 80% share for fiscal year 2013 3.00 70% 2.50 • The proposed level 60% correspond to a dividend 2.00 50% yield of around 6 percent 1.50 40% 30% 1.00 20% 0.50 10% 0.00 0% *
Slide 9: Summary full year 2013
Year-end Report January-December, 2013 Christian Luiga CFO 17 Summary full year 2013 • Net sales SEK 101,700 million (104,898) – Decline of 0.2 percent in local FX, excluding acquisitions and disposals • EBITDA* SEK 35,584 million (36,171) – Increase of 1.7 percent in local FX, excluding acquisition
Slide 10: Sound balance between revenues and costs
Sound balance between revenues and costs Net sales and addressable cost base* change y-o-y 8% 6% 4% 2% 0% -2% -4% -6% -8% Net sales Addressable cost base 2007 2008 2009 2010 2011 2012 2013 19 * In local currencies, excluding acquisitions and disposals SEK 2 billion efficiency program on track Addres
Slide 11: Improved full year margin in 2013
Improved full year margin in 2013 EBITDA margin*, change y-o-y EBITDA margin*, 4 quarters rolling Percentage point 3 36% 35.0% 2 35% 34.5% 1 34% 0 33% -1 -2 32% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 10 10 11 11 11 11 12 12 12 12 13 13 13 13 10 10 11 11 1
Slide 12: Significant impact from lower interconnect rates
Significant impact from lower interconnect rates Revenue growth Q4 2013 Mobility Services TeliaSonera Group +1.5% +1.0% -0.2% Organic revenue growth -2.5% Organic revenue growth, ex interconnect impact Mobility 23 Broadband B2C in Sweden turned to growth B2C Broadband Sweden – External net sales gro
Slide 13: Changing capex mix
Changing capex mix CAPEX-to-sales ratio* CAPEX-to-sales ratio* 18.9% 22.9% 17.3% 18.9% 14.6% 14.3% 13.9% Mobility Broadband Eurasia Q4 12 Q4 13 2012 2013 Q4 12 Q4 13 Q4 12 Q4 13 Q4 12 Q4 13 • Increasing share of fiber and 4G investments, lower capex in Eurasia • Group capex unchanged on a full-year
Slide 14: Reduced Net debt
Reduced Net debt Net debt SEK billion 56.8 55.8 +5.2 +0.4 +0.9 -0.2 -7.4 Q3 2013 Cash flow Cash Other Minority FX & Q4 2013 from CAPEX investing dividends other operating activities activities • Total Gross debt SEK 87.8 billion and Net debt SEK 55.8 billion • Net debt to EBITDA of 1.57x, target ran
Slide 15: Fourth Quarter Summary
Fourth Quarter Summary • Revenues and underlying EBITDA flat y-o-y, measured in local currencies • Efficiency measures on track • Net Debt/EBITDA in the low end of our target range • Proposed dividend of SEK 3.00 per share, an increase of 5.3 percent 29 30 15
Slide 16: The effective tax rate for 2013 is 21.5 percent
31 The effective tax rate for 2013 is 21.5 percent with a total tax expense of SEK 4.6 billion • The main factors for the increased level compared to 2012 – The tax rate cut in Finland (from 24.5% to 20%) has caused a negative revaluation effect of the deferred tax assets and has consequently increa
Slide 17: Organic revenue growth Q4 2013
Organic revenue growth Q4 2013 of which Revenue growth (%) Reported of which acquisitions of which Q4 2013 growth currency and organic disposals Mobility Services -2.3 0.2 - -2.5 Broadband Services -3.9 0.8 -3.0 -1.7 Eurasia 0.3 -7.6 0.2 7.7 The Group -2.1 -1.1 -0.8 -0.2 33 Statement of cash flows Q
Slide 18: Statement of cash flows FY 2013
Statement of cash flows FY 2013 SEK million FY 2013 FY 2012 Diff EBITDA excluding non-recurring items 35,584 36,171 -587 Dividends received from ass companies 2,170 12,512 -10,342 Interest paid (net) -2,521 -2,342 -179 Income taxes paid -3,051 -4,593 1,542 Payment of restructuring provisions -938 -5
Slide 19: Debt maturity schedule
MMO Debt maturity schedule Debt Maturing next 12 months – December, 2013 SEK billion 6 5 4 Debt per Q4 2013 3 • Total debt SEK 87.8 bn 2 • Net debt SEK 55.8 bn 1 0 • Net debt/EBITDA 1.57x Ja Ju Se O N D Fe M Ap M Ju Au ov ec ct ar ay n- n- l-1 p b r g -1 -1 -1 -1 -1 -1 -1 -1 14 -1 14 4 4 4 4 4 4 4 4
Slide 20: TeliaSonera AB credit ratings (A3/A-)
TeliaSonera AB credit ratings (A3/A-) TeliaSonera AB long-term ratings migration history 2002-to-today 5 AA 4 AA- A+3 A2 A- 1 0 Q1 02 Q4 04 Q4 07 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Moody’s (A3/P-2) Standard & Poor’s (A-/A-2) • January 8, 2003, lowered long-term • February 5, 2003, lowered long-term
Slide 21: 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