Telia Company AB · OMXSTO:TELIA
Telia Company AB — TeliaSonera — FY2006 Earnings Presentation
30 slides from Telia Company AB's earnings presentation, 2007
Slide 1: Year-end Report 2006
Year-end Report 2006 Anders Igel President and CEO
Slide 2: 2006 - Record earnings
2006 - Record earnings Full Year 2006 SEK million • Sales +3.9% 91,060 87,661 80,979 81,772 81,937 • EBITDA1 margin 35.4% (33.6) • EPS SEK 3.78 (2.56) • Dividends2 SEK 6.30/share (3.50) EPS +47% 18,810 20,859 20,107 26,751 9,911 2002 2003 2004 2005 2006 Net Sales Operating income excl. non recurring
Slide 3: All operations contributed to record result
All operations contributed to record result Operating income excl. non-recurring items +1,863 +130 SEK million +1,002 26,751 +478 +777 +622 +1,333 +439 20,107 +33% Group FY Sweden Finland Norway Denmark Baltic Eurasia Russia & Other Group FY 2005 countries Turkey 2006 3
Slide 4: 2006 - Strengthened positions in home markets and successful launch in Spain
2006 - Strengthened positions in home markets and successful launch in Spain Home markets • Acquisition of debitel (2007) - Strengthened position in Denmark • Improved sales channels in Denmark, Norway and Baltics • Acquisition of Cygate - Strengthened position in managed services • Acquisition of N
Slide 5: Strong development in Q4
Strong development in Q4 impacted by seasonality SEK million Oct-Dec 2006 25,000 23,187 • Sales +1.4% in local currencies +3.9% • EBITDA1 margin 20,000 Net Sales 33.5% (31.0) • EPS SEK 0.90 (0.61) 15,000 10,000 6,504 5,000 Operating income excl. non-recurring items 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 6: Share price performance
Share price performance SEK 90 SAX Index 80 70 60 TeliaSonera 50 Dow Jones 40 telecom Index 30 20 Dec 31, 2003 Dec 31, 2004 Dec 31, 2005 Dec 31, 2006 TLSN Mkt Cap TLSN Mkt Cap TLSN Mkt Cap TLSN Mkt Cap 10 SEK 175.8 billion SEK 186.1 billion SEK 191.7 billion SEK 252.6 billion 2003 2004 2005 2006 200
Slide 7: 2006 - Record dividend proposal
2006 - Record dividend proposal • Proposed dividends SEK 6.30 per share (3.50) – of which ordinary dividend SEK 1.80 per share (1.25) – of which extraordinary dividends SEK 4.50 per share (2.25) Distribution to shareholders SEK billion 28.3* 15.6 15.7 4.7 2003 2004 2005 2006 *) Proposed *) Proposed
Slide 8: Sweden - Full year profitability maintained
Sweden - Full year profitability maintained + Customer intake + Volume growth SEK million – Not yet sales 14,000 increase 12,000 – Decline in fixed volumes 10,000 9,359 8,000 Net Sales In focus 6,000 • IPTV and broadband 4,000 2,816 roll-out • Mobile data 2,000 Operating income • Managed services ex
Slide 9: Finland - Turnaround measures strongly improved profitability
Finland - Turnaround measures strongly improved profitability SEK million + Turnaround progress 6,000 + Increase in underlying mobile sales 5,000 – Margin improvement 4,348 takes time 4,000 Net Sales 3,000 In focus 2,000 • Broadband reach 454 • Mobile data 1,000 Operating income excl. non-recurring
Slide 10: Norway - Record year
Norway - Record year + Increased postpaid SEK million customers 3,000 + NextGenTel Net Sales consolidated 2,500 2,366 2,000 1,500 In focus 1,000 666 • Triple play 500 • Wireless Family Operating income excl. non-recurring items 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 03 032003
Slide 11: Denmark - Strong earnings improvement, driven by Mobile communications
Denmark - Strong earnings improvement, driven by Mobile communications SEK million 2,000 1,712 + Synergy and efficiency gains Net Sales – Margin improvement 1,500 takes time 1,000 500 Operating income 124 excl. non-recurring items 0 In focus Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 12: The Baltics - Good development
The Baltics - Good development SEK million + Sales increase 3,000 + Compensation for Net Sales 2,555 fixed voice decline 2,500 2,000 1,500 In focus 1,000 612 • Triple play • Connect services 500 Operating income excl. non-recurring items 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 13: Spain - Successful launch
Spain - Successful launch Customer intake exceeding expectations • Good reception in Spain • Very fast roll-out Customer orders • Total financing need – less 78 78 than SEK 9 bn • Operation expected to be cash flow positive and earnings accretive within five years 511 512 501 510 505 507 502 503 508
Slide 14: International Mobile – Record year with continued strong growth and profitability
International Mobile – Record year with continued strong growth and profitability SEK million 2,500 2,416 + Value creation + Eurasia business 2,000 + MegaFon development – Uncertainty in Turkey 1,500 – Liquidity in shareholding 1,000 Operating income 500 excl. non-recurring items TeliaSonera’s agree
Slide 15: Profitable growth and implementation speed through business focus and reduced complexity
Profitable growth and implementation speed through business focus and reduced complexity New Business Areas Personal mobility services for consumer and Mobility Mobility enterprise mass markets Services • Increase usage – voice/data Mass market services for connecting homes Broadband and offices and
Slide 16: Profitable growth and implementation speed through business focus and reduced complexity
Profitable growth and implementation speed through business focus and reduced complexity New Business Areas Mobility Services TeliaSonera’s focus will be on: Broadband Services • Developing the operations in the home markets Integrated • Developing the investment Enterprise Services in Spain • Creat
Slide 17: Group outlook 2007
Group outlook 2007 • Net sales expected to continue to grow, reaching the target of approximately SEK ~100 billion in two years with maintained good profitability • Net income for 2007 is estimated to be somewhat higher than in 2006, excluding the positive one-off items of approx. SEK 1.7 billion in
Slide 18: 2006 - Record year
2006 - Record year • Record sales • Record earnings • Record proposed dividends • Strengthened position in home markets • More potential to improve longer term 18
Slide 19: Year-end Report 2006
Year-end Report 2006 Kim Ignatius Executive Vice President and Chief Financial Officer
Slide 20: Key financials – Income statement and Cash flow
Key financials – Income statement and Cash flow SEK million Oct - Dec 2006 Oct − Dec 2005 Net sales 23,187 22,876 Gross income 9,918 9,943 Margin (%) 42.8 43.5 EBITDA excl. non-recurring items 7,766 7,098 Margin (%) 33.5 31.0 Operating income excl. non-recurring items 6,504 4,890 Margin (%) 28.1 21.
Slide 21: Q4 2006 Net sales +1.4%
Q4 2006 Net sales +1.4% SEK million • Acquisition of NextGenTel +220 MSEK • Strong growth in mobile +160 MSEK • Strong growth in local currency for mobile • Comliet divestment as a result of revenue synergies from Chess acquisition + 339 + 69 + 270 -204 23,187 +102 22,876 +115 -380 • Decreased mobil
Slide 22: Q4 2006 Operating income year-on-year
Q4 2006 Operating income year-on-year • Lower net sales -380 MSEK • Russia - Strong sales and earnings growth. • Net sales • SEK million In addition non-operational items impacted the OPEX development increased with comparison favorable by +265 MSEK − Restructuring effects +230 MSEK maintained • Tur
Slide 23: Q4 2006 Net sales compared to Q3 2006
Q4 2006 Net sales compared to Q3 2006 SEK million • Decrease in terminal sales • Seasonality effect in mobile sales • Increased equipment sales +136 +154 +108 +4 23,157 -182 23,187 -177 -13 • Seasonality effect in mobile sales • Increased voice sales in the carrier operations • Positive seasonal eff
Slide 24: Q4 2006 Operating income vs Q3 2006
Q4 2006 Operating income vs Q3 2006 SEK million • Release of provision for • Lower customer acquisition costs • Continued good West Ferry Road, +500 • Postponed sales development in and marketing the operations MSEK activities from Q3 • Provisions for restructuring in Sweden, Finland and +188 +298 D
Slide 25: Statement of cash flows
Statement of cash flows SEK million Oct-Dec 2006 Oct-Dec 2005 EBITDA excluding non-recurring items 7,766 7,098 Dividends received from associated companies 0 26 Income taxes paid -1,083 -552 Payment of restructuring provisions -446 -240 Difference between paid/recorded pensions -966 -864 Changes in
Slide 26: Strong financial position and cash flow generation
Strong financial position and cash flow generation SEK billion 31.6 3.4 10.6 0.8 15.0 2.6 4.1 8.4 16.6 15.7 1.5 0.6 3.3 Net debt Free Net cash Sales Dividend Minority Net debt Other Net debt Pension Operating Contingencies, Adjusted Dec 31, cash paid for of dividends in acquired Dec 31, obligation l
Slide 27: Key financials – Balance sheet Dec 31, 2006
Key financials – Balance sheet Dec 31, 2006 Condensed consolidated balance sheets SEK million 2006 2005 SEK million 2006 2005 ASSETS EQUITY & LIABILITIES Goodwill and other intangible Shareholders’ equity 119,217 127,049 fixed assets 74,172 74,367 Minority interest 8,500 8,645 Property, plant and eq
Slide 28: Strong financial key ratios
Strong financial key ratios Dec 31, 2006 Dec 31, 2005 Return on equity* 17.2% 10.3% Return on capital employed* 19.5% 12.6% Equity/asset ratio 49.9% 58.9% Net debt/equity ratio 15.0% 7.0% * Rolling 12 months High yielding share 28
Slide 29: 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 30: The Nordic and Baltic telecommunications company
The Nordic and Baltic . telecommunications mel TeliaSonera