Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q1 2005 Earnings Presentation
19 slides from Telia Company AB's earnings presentation, Apr 26, 2005
Slide 1: Interim report January–March 2005
Interim report January–March 2005 Anders Igel President and CEO April 26, 2005
Slide 2: January–March, 2005 – in brief
January–March, 2005 – in brief Good development in most operations • Not enough to compensate for price reductions and costs for maintaining the market position in Finland Competitive environment in Sweden and Finland is intensifying faster than expected • Market realities in Sweden and Finland emph
Slide 3: Good development in most operations
Good development in most operations Profitability impacted negatively by high price pressure in Finland Net Sales and EBITDA Operating Income EBITDA margin Excl. non-recurring items SEK million 20,804 100% 20 000 19,767 90% 80% 15 000 70% 60% 50% 10 000 40% 7,200 6,889 36,4% 30% 5,183 4,671 5 000 33
Slide 4: Nordic home markets
Nordic home markets • Strong mobile volume growth and Performance broadband sales in Sweden January–March 2005 • Price erosion hits earnings in Finland Sweden – Aggressive competition – Mobile, sales -0.5% increased customer acquisition Fixed, sales EBITDA margin -3.6% 39.4% costs and increased Chur
Slide 5: Key trends – home market
Key trends – home market • Continued price pressure and increased competition • Competitive environment in Sweden and Prices Finland is intensifying faster than anticipated • Prices down on average some 8% YoY, e.g. mobile in Sweden 10−15% and Finland 20% • Mobile volume up on average YoY: Sweden ap
Slide 6: Competitive Cost Levels and Focused Service Portfolio
Competitive Cost Levels and Focused Service Portfolio Annual costs down SEK 5–6 billion within three years Sweden Finland Q1 status Q1 status • Finalized details in • Finalized negotiations union agreement with the unions • Negotiations for • 650 jobs will be 4–5 billion restructuring initiated term
Slide 7: Satisfactory development in the Baltic home markets
Satisfactory development in the Baltic home markets Mobile communications Sales growth1 • Improvement of sales and January–March 2005 earnings, mainly through consolidation of the Estonian Estonia2 mobile operator EMT Mobile 4.6% Fixed -4.3% • Good mobile customer growth, but increased price pressur
Slide 8: Continued strong development in International Mobile
Continued strong development in International Mobile Russia – Strong customer growth in Net sales MegaFon1 (USD, million) MegaFon 500 465 400 +87% • +2 million customers in Q1, total 15.7 million 300 249 200 • Strengthened market position in Moscow 100 0 • Services launched in additional two regions
Slide 9: Turkcell agreement – Key transaction terms
Turkcell agreement – Key transaction terms • All shares in Turkcell Holding – effective Shares stake 27% acquired • TeliaSonera total effective stake in Turkcell following transaction 64.3% • USD 3.1 billion (Approx. SEK 22 billion) Consideration • All cash • Agreement on definitive documentation •
Slide 10: TeliaSonera – Mobile customer base expanded
TeliaSonera – Mobile customer base expanded Total mobile customers Population covered Million 23.4 38.8 182.7 120.5 15.4 62.2 TeliaSonera Turkcell Pro Forma TeliaSonera Turkcell Pro Forma Consolidated European mobile customers1 Million 92.4 56.3 51.9 35.8 32.9 23.2 19.0 13.4 VOD FT DT TS TIM O2 TEM
Slide 11: TeliaSonera – Business mix transformed
TeliaSonera – Business mix transformed1 Current revenue split Combined revenue split • SEK 81.9 billion • SEK 107.1 billion Other Other 4.8% 3.7% Int’l Mobile Int’l Mobile 5.0% 27.4% Nordic and Nordic and Baltic, Fixed Baltic, Fixed 48.6% 37.1% Nordic and Nordic and Baltic, Mobile Baltic, Mobile 41.
Slide 12: Outlook
Outlook Enhance value by strengthening operations and positions in current footprint Area Expectations • Strong migration from Fixed to Mobile and Internet Market • Three year transition period Prices • Price pressure continues. Particularly in Sweden and Finland. Restructuring • Negative effect on
Slide 13: Kim Ignatius
Kim Ignatius Executive Vice President and Chief Financial Officer April 26, 2005
Slide 14: Key financials – P&L and Cash flow
Key financials – P&L and Cash flow SEK million Jan−Mar 2005 Jan−Mar 2004 Net sales 20,804 19,767 EBITDA excl. non-recurring items 6,889 7,200 Margin (%) 33.1 36.4 Operating income excl. non-recurring items 4,670 4,822 Margin (%) 22.4 24.4 Net income 3,563 3,649 Earnings per share1 (SEK) 0.68 0.73 CA
Slide 15: Operating income excl. non-recurring items
Operating income excl. non-recurring items SEK million • Net Sales SEK -450 million • Reduced depreciations in International Carrier • Increased marketing and customer acquisition costs: • Capital gains from >SEK 100 million divestments (Holding) 4,822 -282 • New provision SEK 114 million 86 4,670 -
Slide 16: Key financials – Balance Sheet
Key financials – Balance Sheet SEK million March 31, 2005 December 31, 2004 Total assets 189,157 191,972 Total equity 134,471 128,067 Net debt1 1,756 7,062 Financial key ratios: Net debt/equity2 ratio (%) 1.4 5.8 Return on equity (% rolling 12 months) 11.0 11.6 Return on capital employed (% rolling
Slide 17: Conclusions
Conclusions • Continued price pressure impacting profitability and growth • Continued strong cash flows • Solid capital structure and high level of flexibility – even post Turkcell Holding acquisition and proposed shareholder distributions • Additional funding required • Competitive shareholder retu
Slide 18: 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 19: The Nordic and Baltic telecommunications leader
The Nordic and Baltic telecommunications leader April 26, 2005