Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q3 2013 Earnings Presentation
20 slides from Telia Company AB's earnings presentation, November 2013
Slide 1: Interim Report January-September 2013
Interim Report January-September, 2013 Johan Dennelind President and CEO Third quarter summary • Revenues impacted by modest economic growth and lower regulated interconnect • Improved billed revenue trend in Mobility Services across Scandinavia supported by new pricing models • Continued implementa
Slide 2: Flat organic sales and stronger margins
Flat organic sales and stronger margins Net sales & EBITDA margin* Free cash flow SEK million SEK million 0.0% LC 7,308 25,842 25,381 3,825 37.1% 35.9% Q3 12 Q3 13 Q3 12 Q3 13 • Revenue stable in local currency, excluding acquisitions and disposals • Improved profitability due to implemented efficie
Slide 3: Data centric models gain traction in Mobility Services
Data centric models gain traction in Mobility Services Billed revenues Q313 y-o-y* Data growth 120% Denmark 6.0% 100% Spain 4.4% Sweden 3.2% 80% Mobility 1.2% 60% Norway 0.2% 40% Finland -4.3% Estonia -7.3% 20% Latvia -7.9% 0% Q4 12 Q1 13 Q2 13 Q3 13 Lithuania -8.9% Volume Revenue * In local currenc
Slide 4: Continued double-digit growth in Eurasia
Continued double-digit growth in Eurasia Net sales and EBITDA* margin CAPEX & CAPEX-to-sales** SEK million SEK SEKmillion million +11.1% LC 5,133 5,292 1,086 853 53.9% 50.3% 20.5% 7.308 16.6% 3.825 Q3 12 Q3 13 Q3 12 Q3 13 Q3 12 Q3 13 • Mobile data supports overall growth • Positive margin trend * Ex
Slide 5: Challenging environment in Finland
Challenging environment in Finland Mobility Finland Broadband Finland Net sales & EBITDA margin* Net sales & EBITDA margin* SEK million SEK million -7.2% LC -7.5% LC 1,938 1,856 1,335 1,273 34.9% 46.7% 30.3% 28.6% 25.6% Q3 12 Q3 13 Q3 12 Q3 13 • Billed revenues under pressure • Weak sales and margin
Slide 6: A strong foundation to build upon for the future
A strong foundation to build upon for the future c 11 Growing and valuable associates c • Associated income of SEK 1,503 million (833) – of which Turkcell SEK 675 million (631) – of which MegaFon SEK 793 million (173) • MegaFon dividend of SEK 1,940 million, net of taxes 12 6
Slide 7: Need to increase competitiveness
Need to increase competitiveness • Decreasing market shares in too many areas in recent years • Unsatisfactory profitability trend in several units • Focus areas – Understand customers – Reduce complexity – Shape culture 13 Summary and priorities • Improved margin, stable revenue and strong cash flo
Slide 8: Summary first 9 months
Interim Report January-September, 2013 Per-Arne Blomquist Executive Vice President and CFO Summary first 9 months • Net sales SEK 75,197 million (77,829) – Decline of 0.2 percent in local FX, excluding acquisitions and disposals • EBITDA* SEK 26,856 million (27,169) – Increase of 2.2 percent in loca
Slide 9: Flat revenue development
Flat revenue development Net sales split and Net sales growth* y-o-y • Double-digit growth in Eurasia, but tougher comparable numbers +0.4% 0.0% in Uzbekistan +14.3% +11.1% • Sequential improvement in Broadband related to -3.6% International Carrier -2.4% • Mobility affected by lower growth in Spain
Slide 10: Significant impact from interconnect in Mobility Services
Significant impact from interconnect in Mobility Services Revenue growth* (%) Billed revenues* change y/y (%) 6% Spain Denmark 4% Sweden 2% Total Mobility -3.0 0.7 Latvia 0% Revenue growth ex Estonia interconnect impact -2% Finland Total revenue growth -4% Norway Lithuania -6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 11: Balance between sales and OPEX growth
Balance between sales and OPEX growth • All business areas reduced costs in the quarter Mobility Broadband Eurasia 10% 5% 25% 20% 5% 0% 15% 0% 10% -5% -5% 5% -10% 0% -10% -5% -15% -15% -10% Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Chang
Slide 12: Lowering the cost base by SEK 2 billion
Lowering the cost base by SEK 2 billion • Savings of SEK 0.2 billion recorded Addressable cost base target* in Q4 2012 and around SEK 0.6 SEK billion billion in 9M 2013 26.8 • In total, 1,800 employees will be affected 26.1 26.0 • 1,460 employees noticed y-t-d • Restructuring costs of SEK 1.7 billio
Slide 13: Significantly higher Free Cash Flow
Significantly higher Free Cash Flow Free cash flow SEK billion +1.6 7.3 • Dividends received +0.1 relate to MegaFon +2.0 +0.2 +0.1 -0.5 -0.1 • Positive working capital 3.8 +0.1 change explained by calendar effect on customer payments and one-time effect Q3 2012 * Excluding non-recurring items 25 Red
Slide 14: Net debt to EBITDA within our target range
Net debt to EBITDA within our target range Net debt and Net debt / EBITDA* SEK billion 75 2.5 • Gross debt of SEK 86.6 billion 60 1.58 2.0 and Net debt of SEK 56.8 billion 45 1.5 • Net debt to EBITDA of 1.58x 30 1.0 • Target range between 1.5-2.0x 15 0.5 0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 15: TeliaSonera
“a g TeliaSonera a 15
Slide 16: Organic revenue growth Q3 2013
Organic revenue growth Q3 2013 of which Revenue growth (%) Reported of which acquisitions of which Q3 2013 growth currency and organic disposals Mobility Services -2.1 0.9 - -3.0 Broadband Services -4.5 0.9 -3.0 -2.4 Eurasia 3.1 -8.3 0.3 11.1 The Group -1.8 -0.9 -0.9 0.0 31 Statement of cash flows Q
Slide 17: Financial key ratios
Financial key ratios Sep 30, 2013 Dec 31, 2012 Return on equity* 21.5% 20.5% Return on capital employed* 16.2% 14.9% Equity/assets ratio 40.9% 38.2% Net debt/equity ratio 57.3% 61.4% Net debt/EBITDA rate* multiple 1.58 1.64 Net debt/assets ratio 23.4% 23.5% * Rolling 12 months 33 Higher earnings per
Slide 18: Debt maturity schedule
MMO Debt maturity schedule Debt Maturing next 12 months – Sept 30, 2013 SEK billion 6 5 4 Debt per Q3 2013 3 • Gross debt SEK 86.6 bn 2 • Net debt SEK 56.8 bn 1 0 • Net debt/EBITDA 1.58 O N D Ja Ju Se Fe M Ap M Ju Au ov ec ct ar ay n- n- l-1 p- b- r-1 g- -1 -1 -1 -1 14 14 -1 14 14 14 4 3 4 3 3 4 4 D
Slide 19: 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 Moody’s (A3/P-2) Standard & Poor’s (A-/A-2) • January 8, 2003, lowered long-term • February 5, 2003, lowered long-term debt
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