Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — Q3 2007 Earnings Presentation
19 slides from Telia Company AB's earnings presentation, October 2007
Slide 1: Interim Report January - September, 2007
Interim Report January - September, 2007
Slide 2: Strong sales and earnings
Strong sales and earnings July - September, 2007 • Net sales in local currencies, +7.3% • EBITDA-margin 35.1% (37.8) • EPS SEK 1.20 (1.13) • CAPEX MSEK 3,339 (2,743) – CAPEX-to-sales 13.5% (11.8) • Free Cash Flow MSEK 5,078 (4,870) 2
Slide 3: Q3 2007 Net Sales +7.1%
Q3 2007 Net Sales +7.1% SEK million • Internal trade growing in • Acquisition of Cygate, Didata and line Crescom +210 with external sales • Growth in Modular and SME +80 • Price decline and migration from traditional +44 +609 -211 data services to IP put pressure on sales 24,798 to large corporate c
Slide 4: Q3 2007 Operating Income Year-on-Year
Q3 2007 Operating Income Year-on-Year SEK million • Higher income from associated companies in Russia +412 and Turkey +148 +649 +64 -114 +102 -257 -6 8,354 8,240 7,802 • Net sales +259 • Restructuring measures • Cost savings Sweden and Finland +170 in Mobility Sweden • Increased cost for growth init
Slide 5: Statement of cash flows Q3 2007
Statement of cash flows Q3 2007 SEK million Jul-Sep 2007 Jul-Sep 2006 EBITDA excluding non-recurring items 8,714 8,756 Dividends received from associated companies 1,547 679 Interest paid (net) -409 -279 Income taxes paid -925 638 Payment of restructuring provisions -11 -107 Difference between paid/
Slide 6: Strong financial position and cash flow generation
Strong financial position and cash flow generation SEK billion 52.3 3.4 10.6 28.3 1.2 1.8 35.7 2.6 4.1 15.0 11.2 4.2 Net debt Free cash Acquisitions Dividends Minority Other Net debt Pension Operating Contingencies, Adjusted Dec 31, flow dividends Sep 30, obligation leases* blocked cash net debt 200
Slide 7: Strong financial key ratios
Strong financial key ratios Sep 30, 2007 Dec 31, 2006 Return on equity* 15.8% 17.2% Return on capital employed* 17.9% 19.5% Equity/asset ratio 54.8% 49.9% Net debt/equity ratio 31.8% 15.0% * Rolling 12 months High yielding share 7
Slide 8: Ongoing cost efficiency programs
Ongoing cost efficiency programs Group total divided by business area Integrated Mobility Broadband Group Total Enterprise Services Services Services Est. annual gross Measures to be Approx. Approx. Approx. savings effect of approx. implemented from April 1 SEK 350 SEK 1,000 SEK 150 SEK 1.5 billion
Slide 9: Capital structure and distributions to shareholders
Capital structure and distributions to shareholders • Target a solid investment grade long-term credit rating (A- to BBB+) • TeliaSonera’s dividend policy is to distribute at least 40% of net income attributable to shareholders of the parent company • Excess capital to be returned to shareholders, a
Slide 10: Outlook slightly revised
Outlook slightly revised Net Sales expected to continue to grow, reaching the target of approx. SEK 100 billion during 2008 with maintained good profitability Ongoing Efficiency Measures implemented in Q2-Q4 of 2007 in Sweden and Finland are estimated to give an annual gross savings effect of approx
Slide 11: Lars Nyberg, President and CEO
Lars Nyberg President and CEO
Slide 12: Five focus areas
Five focus areas • Migration from traditional services • Explore growth in Eurasia • New B2B sales approach • World class service company • Intensified efficiency 12
Slide 13: Slide 13
Slide 14: 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 15: Appendix
Appendix TeliaSonera
Slide 16: Q3 2007 Net Sales vs. Q2 2007 +3.8%
Q3 2007 Net Sales vs. Q2 2007 +3.8% SEK million • Normal seasonality for corporate customers +56 +62 24,798 +460 +44 -155 +430 23,901 • Continued volume growth accelerated by seasonality and acquisitions in Tajikistan and Uzbekistan +143 • Normal seasonality • Decline in Fixed voice slowing down in
Slide 17: Q3 2007 Operating Income vs Q2 2007
Q3 2007 Operating Income vs Q2 2007 SEK million • Increased net sales and • Improved earnings in seasonally low costs for Kazakhstan and Azerbaijan personnel related expenses +594 8,354 -114 8,240 +195 +327 +158 +505 6,575 • Decrease in sub-contracting expenses for customer delivery • Restructuring
Slide 18: Key Financials – Income Statement and Cash Flow
Key Financials – Income Statement and Cash Flow SEK million Jul-Sep 2007 Jul-Sep 2006 Net sales 24,798 23,157 Gross profit 11,433 11,535 Margin (%) 46.1 49.8 EBITDA excl. non-recurring items 8,714 8,756 Margin (%) 35.1 37.8 Operating income excl. non-recurring items 8,354 7,802 Margin (%) 33.7 33.7
Slide 19: Slide 19