Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — H1 2005 Earnings Presentation
24 slides from Telia Company AB's earnings presentation, Aug 3, 2005
Slide 1: Interim Report January-June, 2005
August 3, 2005 1 Interim Report January-June, 2005 Anders Igel President and CEO
Slide 2: Highlights
2 Highlights • 6.5% sales growth • Overall strong development in mobile operations • Market positions maintained • Strong development in Norway, Denmark and the Baltic countries • Sweden and Finland developed as expected ‑ Sweden: Restructuring program in progress. 865 of estimated 3,000 employees i
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 47.2 million +5.5% +48.7% +1.6 million in Eurasia +1.2 million +13.8 million in Russia and Turkey 1) Associated companies August 3, 2005
Slide 4: Overall good development but Sweden and Finland affect negatively
4 Overall good development but Sweden and Finland affect negatively Net sales Operating income Excl. non-recurring items SEK million SEK million +2,102 21,752 20,422 -772 -347 -839 +508 5,063 4,385 Apr-Jun Sweden All Other Apr-Jun Apr-Jun Sweden Finland All Other Apr-Jun 2004 fixed and operations 20
Slide 5: Several new service initiatives
5 Several new service initiatives • Packaged offerings • TV in the mobile • Broadband TV • Integrated Mobile telephony and Internet service at home (UMA) • High speed mobile data services – Connect services August 3, 2005
Slide 6: Acquisitions
6 Acquisitions Chess/Sense (NO) Orange Denmark Lattelekom/LMT (LT) MicroLink (Baltic) Turkcell Several other alternatives are considered Concluded Ongoing Going forward August 3, 2005
Slide 7: Business mix transformed 2003–2005
7 Business mix transformed 2003–2005 Net sales Net sales Market split – Jan-Jun,2003 Sweden Market split – Jan-Jun, 2005 Finland Norway, Denmark, Baltic Int. Mobile Int. Carrier SEK 40,624 million Other SEK 42,556 million Operating income Operating income Market split1 – Jan-Jun, 2003 Market split1
Slide 8: Marie Ehrling
August 3, 2005 8 Marie Ehrling President TeliaSonera Sweden
Slide 9: TeliaSonera Sweden Highlights
9 TeliaSonera Sweden Highlights Market position maintained • Several new offerings have been introduced • Strong development within mobile communications • Strong demand for broadband and increased bandwidth • Price erosion has decreased the value of the Swedish market as a whole August 3, 2005
Slide 10: Competitive Cost Levels in Sweden
10 Competitive Cost Levels in Sweden Reduce annual costs by SEK 4-5 billion • Focusing the service portfolio ‑ Several services discontinued or sales stopped - Enable further reduction of network platforms and IT and support systems ‑ Continued coordination of Group´s product development • More effi
Slide 11: Readjustment agreement - Sweden
11 Readjustment agreement - Sweden Approximately 3,000 employees affected Status - Apr-Jun, 2005 • Redeployment unit Established – 240 ‑ Competence development employees transferred ‑ Assistance during employees´ search for new employment, either within or outside the company • Early retirement of
Slide 12: New service offerings - Making it easy
12 New service offerings - Making it easy Telia Alltid, Telia Fritid, Telia Alltid Total (flat rate) SMS on the PC Mess pack - 500 SMS for SEK 100 Simple SMS-sign up with Halebop New broadband offerings Telia Connect “Internet För Alla” (For everyone) Installation support for new bro
Slide 13: Kim Ignatius
August 3, 2005 13 Kim Ignatius Executive Vice President and Chief Financial Officer
Slide 14: Development April-June, 2005
August 3, 2005 14 Development April-July, 2005
Slide 15: Good volume growth in most operations year on year
15 Good volume growth in most operations year on year • Strong price pressure and intensifying competition in Sweden and Finland affected sales negatively and put pressure on margins Net sales and EBITDA Operating income EBITDA margin Excl. non-recurring items Excl. non-recurring items SEK million S
Slide 16: Key trends – Home markets
16 Key trends – Home markets • Continued price pressure and increased competition Prices • Prices down on average some 8% YoY, e.g. mobile in Sweden 10−15% and in Finland around 20% • Mobile traffic volume up on average YoY: approx. 14% in Sweden and Finland Volume • Fixed volume down on average, ma
Slide 17: Continued strong development in International Mobile
17 Continued strong development in International Mobile Net sales - Eurasia SEK million 1,464 Eurasia – High growth and margins 986 • +438,000 customers in Q2, total 4.6 million +48% • EBITDA margin excl. non-recurring items 52.9% Q2 2004 Q2 2005 Net sales – Turkcell1 USD million Turkey – Strong dev
Slide 18: Key financials – P&L and Cash flow
18 Key financials – P&L and Cash flow SEK million Apr - Jun 2005 Apr − Jun 2004 Net sales 21,752 20,422 EBITDA excl. non-recurring items 7,200 7,327 Margin (%) 33.1 35.9 Operating income excl. non-recurring items 4,385 5,063 Margin (%) 20.2 24.8 Net income 2,422 3,467 Earnings per share1 (SEK) 0.44
Slide 19: Operating income
19 Operating income SEK million • Net sales SEK -240 million • Storm costs and higher personnel expenses • Non-recurring: ‑Restructuring costs SEK -1,012 million • Customer growth ‑SEK 579 million mainly adj. pension acc. • SEK -110 million revaluation in Q2/04 of loan in Q2/04 5,650 -1,938 Customer
Slide 20: Strong financial position and healthy cash flow generation
20 Strong financial position and healthy cash flow generation SEK billion Dec 31, 7.1 8.3 Jun 30, 2005 2004 Return on equity* 10.0% 11.6% Return on capital 0.6 4.4 1.0 employed* 11.4% 13.9% 5.6 Equity/asset ratio 60.0% 63.8% Net debt/equity ratio 3.5% 5.8% * Rolling 12 months 0.1 1.7 Net debt Free N
Slide 21: Outlook
21 Outlook Area Expectations Sales • Strong volume growth in mobile will continue but price pressure will limit growth in home markets • In Sweden, decline in sales of traditional fixed services will partly be compensated by sales of other services during the three year transition period • After thi
Slide 22: Conclusions
22 Conclusions • 6.5% sales growth • Overall strong development in mobile operations • Market positions maintained • Strong development in Norway, Denmark and the Baltic countries • Sweden and Finland developed as expected ‑ Sweden: Restructuring program in progress. 865 of estimated 3,000 employees
Slide 23: Forward-looking statements
23 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 24: The Nordic and Baltic telecommunications leader
August 3, 2005 24 The Nordic and Baltic telecommunications leader