Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q2 2009 Earnings Presentation
30 slides from Telia Company AB's earnings presentation, July 2009
Slide 1: Interim Report January - June 2009
Interim Report January - June 2009 Lars Nyberg President and CEO 1
Slide 2: Strong performance driven by cost savings
Strong performance driven by cost savings Q2 2009 in brief • Net sales SEK 27,478 million (25,274) – Increase +8.7% – Local organic -0.7% – FX effect +8.3% – Acquisitions +1.1% • EBITDA* SEK 9,043 million (7,978) – Increase +13.3% – EBITDA margin* 32.9% (31.6) • EPS SEK 1.00 (0.92) • Strong balance
Slide 3: Market trends per business area
Market trends per business area Eurasia • Organic growth improved compared to first quarter • High profitability maintained • More than 20 million subscriptions Mobility Services • Impact from economic downturn visible • Strong mobile data growth in Sweden • Focus on defending margins Broadband Serv
Slide 4: Defending margins despite weak macro trends
Defending margins despite weak macro trends Mobile revenue growth, local currency Mobile EBITDA* margin 15% 60% 10% 55% 5% 50% 0% 45% -5% 40% -10% 35% -15% 30% -20% 25% -25% 20% -30% 15% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Lithuania Latvia Estonia Lithuania Latvia
Slide 5: OPEX development – Group
OPEX development – Group +7.2% +5.8% -0.6% -1.1% 20,000 35,000 -4.3% 30,000 15,000 25,000 SEK million SEK million 20,000 10,000 15,000 10,000 5,000 5,000 0 0 2006 2007 2008 Q1 09 Q2 09 H1 2008 H1 2009 Personnel Other Personnel Other • Rolling 4 quarter values, in local • Quarterly values, in local c
Slide 6: OPEX development – Sweden and Finland
OPEX development – Sweden and Finland 22,500 6,000 -12.4% +4.0% -1.5% -3.2% 20,000 5,000 17,500 15,000 4,000 SEK million SEK million 12,500 3,000 10,000 7,500 2,000 5,000 1,000 2,500 0 0 2007 2008 Q1 09 Q2 09 Q2 2008 Q2 2009 • Rolling 4 quarter values, in local • Quarterly values, in local currencie
Slide 7: Group outlook 2009 (revised)
Group outlook 2009 (revised) • Net sales in local currencies and excluding acquisitions are expected to be in line with or slightly below the level of 2008. • We expect the addressable cost base in 2009 to be below the SEK 33.8 billion in 2008, in local currencies and excluding acquisitions. • The E
Slide 8: Interim Report January - June 2009 (CFO)
Interim Report January - June 2009 Per-Arne Blomquist Executive Vice President and CFO 8
Slide 9: Strong second quarter
Strong second quarter Apr – Jun Apr – Jun Change SEK million 2009 2008 % Net sales 27,478 25,274 9 EBITDA* 9,043 7,978 13 EBITDA* margin 32.9% 31.6% Operating income* 8,176 7,410 10 Non-recurring items -712 -592 Operating income 7,464 6,818 9 Financial items -788 -631 Net income** 4,469 4,130 8 EPS,
Slide 10: Strong first half
Strong first half Jan – Jun Jan – Jun Change SEK million 2009 2008 % Net sales 54,682 49,672 10 EBITDA* 17,864 15,733 14 EBITDA* margin 32.7% 31.7% Operating income* 15,653 14,160 11 Non-recurring items -938 -772 Operating income 14,715 13,388 10 Financial items -1,647 -644 Net income** 8,909 8,595
Slide 11: Net sales trend – Group
Net sales trend – Group 32 27.5 28.1 27.2 28 25.8 25.3 108.6 24 106.4 20 SEK billion 103.6 16 12 100.4 99.4 8 4 0 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Net sales Rolling 4 quarters 11
Slide 12: EBITDA margin trend – Group
EBITDA margin* trend – Group 40 35.1 34.0 35 33.0 31.7 31.9 30 32.3 25 32.0 SEK billion 31.8 31.8 31.8 20 15 10 5 0 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 EBITDA* rolling 4 quarters EBITDA* margin rolling 4 quarters * Excluding non-recurring items 12
Slide 13: EBITDA margin trend (excluding non-recurring items)
EBITDA margin trend (excluding non-recurring items) % Rolling 4 quarters 40 52 50.8 49.8 49.9 49.6 49.6 38 50 49.3 48.7 36 48 34 32.2 32.3 31.8 31.8 31.8 32.0 31.8 32 29.6 29.9 29.6 29.4 30 29.2 28.9 29.0 28 29.0 28.8 28.9 28.4 28.6 28.2 27.5 26 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Mobility Ser
Slide 14: Mobility Services
Mobility Services Continued strong mobile data growth 60 50.7 • The economic downturn visible in most 49.7 50 46.9 47.5 48.7 countries in terms of lower equipment sales, reduced roaming and usage 40 • Strong performance continued in Sweden, revenues grew 5.1 percent SEK billion 29.6 30 28.8 28.9 29.
Slide 15: Broadband Services
Broadband Services Significant profitability improvement 50 42.2 42.1 42.6 43.1 43.3 • Margins improved considerably from the second quarter last year due to 40 29.4 efficiency measures 29.2 30 28.9 • Addressable costs in local currencies and excluding acquisitions decreased SEK billion 28.2 14.8 pe
Slide 16: Eurasia
Eurasia High profitability maintained 18 49.8 49.9 16 49.3 49.6 • Reached 20 million subscriptions in our 48.7 majority owned operations 14 15.2 14.2 • Maintained market leadership in 12 13.2 Kazakhstan, Azerbaijan, Tajikistan and 11.9 Georgia, and maintained positions in all SEK billion 10 11.4 oth
Slide 17: CAPEX trend – Group
CAPEX trend – Group 16.0 20% 5.0 -34% 20% 4.0 12.0 15% 15% SEK billion SEK billion 3.0 8.0 10% 10% 2.0 4.0 5% 5% 1.0 0.0 0% 0.0 0% 2006 2007 2008 Q1 09 Q2 09 Q2 2008 Q2 2009 CAPEX rolling 4 quarters CAPEX-to-sales rolling 4 quarters CAPEX CAPEX-to-sales In local currencies CAPEX decreased 38.5 perce
Slide 18: Free cash flow – Group
Free cash flow – Group 5,000 4,000 SEK million 3,000 2,000 1,000 0 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Free cash flow was SEK 3.5 billion (2.5), mainly due to: • Higher EBITDA • Lower CAPEX 18
Slide 19: Group financial profile
Group financial profile 60,000 1.8 1.6 1.5 1.5 1.4 1.6 50,000 1.3 1.4 40,000 1.2 SEK million 1.0 30,000 0.8 20,000 0.6 0.4 10,000 0.2 0 0.0 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Net debt Net debt to EBITDA* rolling 4 quarters * Excluding non-recurring items 19
Slide 20: Strong financial key ratios
Strong financial key ratios Jun 30, 2009 Dec 31, 2008 Return on equity* 17.0% 17.2% Return on capital employed* 16.8% 17.3% Equity/assets ratio 51.8% 50.5% Net debt/equity ratio 37.1% 36.5% * Rolling 12 months One of the best rated Telecom Operators in Europe 20
Slide 21: Debt maturity schedule
Debt maturity schedule (excl. lease and pension liabilities) Debt Maturing next 12 months (SEK million), June 30, 2009 2,500 2,000 1,500 1,000 500 0 07/09 08/09 09/09 10/09 11/09 12/09 01/10 02/10 03/10 04/10 05/10 06/10 Debt Portfolio Maturity Schedule (SEK billion), July 2009 & onwards 10.0 8.0 6.
Slide 22: Group outlook 2009 (revised)
Group outlook 2009 (revised) Outlook Actual 2009 H1 2009 In line with or slightly Net sales -0.1 percent below the level of 2008* Below the SEK 33.8 billion Addressable cost base of 2008* -4.3 percent Exceed the margin level EBITDA margin** of 2008 (31.8 percent) 32.7 percent In the range of 13-14 C
Slide 23: Interim Report January - June 2009
Interim Report January - June 2009 23
Slide 24: 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 25: TeliaSonera AB credit ratings (A3/A-)
TeliaSonera AB credit ratings (A3/A-) TeliaSonera AB long-term ratings migration history 2002-to-today AA 5 AA-4 A+ 3 A 2 A- 1 0 Q1/02 Q4/02 Q1/03 Q4/03 Q4/04 Q1/05 Q4/05 Q4/06 Q4-07 Q4-08 Q2-09 Moody’s (A3/P-2) Standard & Poor’s (A-/A-2) • January 8, 2003, lowered long-term debt • February 5, 2003,
Slide 26: Liquidity position TeliaSonera Group
Liquidity position TeliaSonera Group Cash and cash equivalents, less blocked funds approximately SEK 9 billion Committed bank lines Maturity Size Amount undrawn Bilateral credit facility Sep 2010 SEK 2 billion SEK 2 billion Syndicated revolving credit facility Dec 2011 EUR 1 billion EUR 1 billion Bi
Slide 27: Credit statistics - Group Year-end 2008
Credit statistics - Group Year-end 2008 TeliaSonera estimates TS Reported (SEK billion) 2008 Gross Debt 65.8 Cash & Liquidity 1) 11.8 Derivative Adjustment 4.3 Net Debt 49.7 Moody’s Adjusted Net Debt 2) 83 Adjusted Retained Cash Flow 3) 20.6 Adjusted (RCF/Net Debt) 25% S&P Adjusted Net Debt 4) 65 Ad
Slide 28: Net sales - Group & per Business area
Net sales - Group & per Business area Apr – Jun Apr – Jun Change SEK million 2009 2008 % Mobility Services 13,030 12,071 8 Broadband Services 10,740 10,557 2 Eurasia 3,786 2,858 32 Other operations 1,331 1,190 12 The Group 27,478 25,274 9 28
Slide 29: EBITDA and margin - Group & per Business area
EBITDA* and margin - Group & per Business area EBITDA* Apr – Jun Apr – Jun Change SEK million 2009 2008 % Mobility Services 3,720 3,663 2 Broadband Services 3,345 2,741 22 Eurasia 1,900 1,422 34 Other operations 45 144 -69 The Group 9,043 7,978 13 Apr – Jun Apr – Jun Change EBITDA* margin, % 2009 20
Slide 30: Statement of cash flows
Statement of cash flows Apr – Jun Apr – Jun SEK million 2009 2008 EBITDA excluding non-recurring items 9,043 7,978 Dividends received from associated 984 674 companies Interest paid (net) -364 -344 Income taxes paid -722 -949 Payment of restructuring provisions -303 -99 Difference between paid/recor