Sonera — Merrill Lynch TMT Conference 2002
28 slides from Sonera's conference presentation, Jun 13, 2002
Slide 1: Merrill Lynch TMT Conference
www.telia.com Merrill Lynch TMT Conference London, 11 June 2002
Slide 2: Marianne Nivert, President and CEO, Telia AB
www.telia.com Marianne Nivert, President and Chief Executive Officer, Telia AB
Slide 3: Telia Q1 2002
Telia Q1 2002 • Positive trends for core business • Improved underlying EBITDA margin • 24.4%, Q1 2002 (20.9%, Q4 2001) • Rationalization showing results in Internet Services and International Carrier • Continued strong pressure to rationalize • Efforts will intensify in Q2 • Sharply reduced investm
Slide 4: Ongoing rationalization projects
Ongoing rationalization projects • Concentration of customer services • From 31 to 13 • More self-service • More efficient supply process • Delivery centers formed • New Nordic organization - Telia Mobile • Implemented 1 April • Geographical concentration and co-location • Ongoing • Leaner product p
Slide 5: Mobile
Telia Mobile • New Nordic organization • Implemented 1 April • Pan-Nordic services • GPRS-roaming • The reorganization is heightening focus on integration of fixed and mobile communication in business solutions • Homerun at 420 sites in the Nordic region Nordic customer base 5,011,000 (+75,000)
Slide 6: Mobile - Sweden
Telia Mobile Sweden • Interconnection rates lowered • PocketMode • Open marketplace • 20 content providers with more than 2000 services • Mobile intranet • Co-operation with Microsoft and WM-data • Java-based mobile games • 3G-network alliance sanctioned by the Swedish Competition Authority * Exclud
Slide 7: Mobile - ARPU and MoU, Sweden
Telia Mobile Lowered interconnection rates affecting ARPU ARPU (SEK) Q1 00 Q1 01 Q1 02 Subscriptions 436 426 418 432 394 415 439 431 397 Total 314 306 304 303 273 280 303 289 262 Cash 96 109 123 106 101 108 125 109 99 Positive MoU trend MoU (Minutes) Q1 00 Q1 01 Q1 02 Subscriptions 155 167 160 170 1
Slide 8: Mobile - Norway
Telia Mobile Norway • Higher sales and improved margin • Positive ARPU trend • Continued strong SMS growth • Expert - new distribution channel * Excluding 99,000 SP customers Norwegian customer base 985,000* (+15,000)
Slide 9: Mobile - ARPU and MoU, Norway
Telia Mobile Higher ARPU and MoU ARPU (NOK) Q1 00 Q1 01 Q1 02 Subscriptions 460 485 528 496 487 534 567 524 536 Total 289 301 327 308 292 317 341 317 326 Cash 118 124 127 119 107 115 128 125 121 MoU (Minutes) Q1 00 Q1 01 Q1 02 Subscriptions 198 223 225 209 210 231 237 232 230 Total 130 143 145 136 1
Slide 10: Mobile - Denmark and Finland
Telia Mobile Denmark • Improved margin • New bundling of subscriptions • Completion of the 900 GSM network Finland • Higher sales • New roaming agreement • New agreements on installation of Homerun Danish customer base 322,000 (+34,000) Finnish customer base 245,000 (+6,000)
Slide 11: Mobile - Baltic/Russia
Telia Mobile Baltic/Russia • Rapid expansion • Improved earnings • Good growth potential Baltic/Russian customer base 2,351,000* (+314,000) Russia North West GSM (25.6%) 944,000*) +195,000 Estonia Eesti Mobiiltelefon (24.5%) 391,000*) +8,000 Latvia Latvijas Mobilais Telefons (24.5%) 389,000*) +40,00
Slide 12: Internet Services
Telia Internet Services Focus on rapid profitability enhancement: • Continued sales growth • +36%, Q1 2002 • Rate increases for broadband • Continued rationalization and reduced expenditures for R&D • New services • 1Mbit/s over cable TV • MTV Live • Telia RoamConnect, Telia Internet För Alla • Stro
Slide 13: Internet Services - Number of broadband customers
Telia Internet Services Growth - Number of broadband customers (thousands) Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Skanova ADSL/LAN Sweden Denmark High-speed cable Internet
Slide 14: International Carrier
Telia International Carrier Focus on positive cash flow • Continued improvement of margins • Sharp reduction in investment level • Higher order inflow, capacity, and IP traffic • Network in the USA, now generating revenues • Network acquisitions in the UK are reinforcing growth opportunities and low
Slide 15: International Carrier - Ongoing rationalization measures
Telia International Carrier Ongoing rationalization measures • Concentration of utilization of premises Initiated • Reduction of consultant costs In progress • Concentration of operating agreements In progress • Replacement of contracted capacity In progress • Focus on sales and marketing Completed
Slide 16: Networks
Telia Networks • Rationalization projects in progress • Local preselection implemented 2 Feb • Higher wholesale sales partially compensating for decline in the retail market • Healthy demand for broadband access • Danish operations reporting positive EBITDA • Netia under restructure • Geographical c
Slide 17: Financial targets
Financial targets Telia Group – medium term • Sales growth 8% • Underlying EBITDA margin 25-30% Telia International Carrier • Positive underlying EBITDA on a monthly basis by year-end 2002 Telia Internet Services • Positive underlying EBITDA on a monthly basis by year-end 2003
Slide 18: Overall objectives
Overall objectives Improved free cash flow through • Revenue growth • Improved margins • Reduced capex
Slide 19: Net sales
Net sales Growth +2%, Q1 2002 Core business +9%, Q1 2002 Moving 12-months (MSEK) Quarter Q1 00 Q1 01 Q1 02 MSEK 12,857 13,592 13,885
Slide 20: Underlying EBITDA
Underlying EBITDA Growth +1%, Q1 2002 Core business +5%, Q1 2002 Moving 12-months margin Quarter Q1 00 Q1 01 Q1 02 MSEK 3,260 3,348 3,381
Slide 21: Income
Income Income after financial items MSEK Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 502 535
Slide 22: Investments
Investments Reduction 44%, Q1 2002 MSEK Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 4,644 3,659 2,053 — Thereof capex
Slide 23: Cash flow
Cash flow Lower investment level strengthening cash flow MSEK Jan-Mar 2002 Jan-Mar 2001 Cash flow before change in working capital 2,682 2,661 Change in working capital -1,808 -2,175 Cash flow from operating activities 874 486 Cash flow from investing activities -1,739 -3,512 Operating cash flow -86
Slide 24: Net debt
Net debt Change in net debt MSEK 1 Jan 2002 Taxes Investments Underl. EBITDA Other 31 March 2002 10,661 327 2,010 3,381 2,291 11,908
Slide 25: Financial position
Financial position Strong financial position Debt/Equity ratio 0.20 GSEK Adjusted equity Interest-bearing net debt 58.6 11.9
Slide 26: Sonera - A Nordic and Baltic mobile leader
Telia-Sonera A Nordic and Baltic mobile leader Sweden Market share: 49% Norway Market share: 32% Denmark Market share: 8% Finland Market share: 61% EMT Market share: 54% LMT Market share: 57% Omnitel Market share: 58% #2 #1 #1 #4 #1 #1 #1 Note: Market shares based on subscriptions — Controlling inte
Slide 27: A powerful combination
A powerful combination • Creation of the leading Nordic and Baltic operator • Strong financial resources and cash flow • Significant synergies • Footprint and customer base will attract best of breed partners • Partner for future consolidation • Governance to deliver change • Profit and cash flow dr
Slide 28: Additional Information
(Telia logo) Additional Information The combination of Telia and Sonera will be implemented through an exchange offer made by Telia to the shareholders of Sonera. This presentation is neither an offer to purchase nor a solicitaion of an offer to sell shares of Sonera. Any offer in the United States