Transcript TeliaSonera Interim Report Jan

Interim report January-March 2003
Anders Igel
President and CEO
May 8, 2003
Strong earnings improvement
January-March 2003 in brief
• Implemented efficiency
measures are yielding results
7,562
5,972
• EBITDA excl. non-recurring
items margin 37.2% (30.4)
• Low CAPEX level
• Stronger free cash flow
3,897
3,227
2,010
CAPEX
• No non-recurring costs
Operating
income
excl. nonrecurring items
-289
EBITDA
excl. nonrecurring items
Q1 2002
-1,676
Free cash flow
-2,653
Q1 2003
2
SEK million
Improved earnings
EBITDA excl. non-recurring items
SEK +1,590 million, Q1 2002-Q1 2003
SEK million
Other
-32
Lower cost in Sweden mobile
Lower cost in Sweden fixed
Continued strong earnings in Norway mobile
Improvement in Denmark mobile
Consolidation of Fintur
Narrowing
Carrier losses
+1,590
+98
+655
+224
+124
+280
+241
Total
3
Decisions and actions in problem areas yielding results
International Carrier
Denmark
• Restructuring program ongoing
• Turn-around program yielding results
• Improved EBITDA, lower CAPEX
0
Q3 2002
Q4 2002
Q1 2003
-45 -27
-100
-200
-300
-400
0
Q3 2002
Q4 2002
-27
-100
-200
-237 -251
-74
-191
-227
-300
-400
-384 -389
-500
SEK million
EBITDA excl. non-recurring items
Q1 2003
CAPEX
-600
-540
-495
SEK million
EBITDA excl. non-recurring items
CAPEX
Sonera’s Service Businesses
International 3G
• Losses almost eliminated
• No additional risk exposure
• Xfera guarantees reduced by 80%
4
Kim Ignatius
CFO
May 8, 2003
Key figures
SEK million
(except percentages and personnel)
Net sales
Growth in net sales (%)
EBITDA excl. non-recurring items
Margin (%)
Income from associated companies
Operating income
Operating income excl. non-recurring items
Income after financial items
Net income
CAPEX
Free cash flow
Average personnel
Jan-Mar 2003 Jan-Mar 2002
20,349
3.6
7,562
37.2
23
3,227
3,227
2,711
1,602
1,676
3,897
26,822
19,642
Change
+707
n/c
5,972
+1,590
30.4
2,419
-2,396
4,625
-1,398
2,010
+1,217
4,674
-1,963
3,878
-2,276
2,653
-977
-289
+4,186
31,587
-4,765
6
Net sales
SEK million
Jan-Mar 2003
Jan-Mar 2002
Change
Jan-Dec 2002
Sweden
10,578
-92
43,381
4,201
+167
17,515
1,200
+315
5,537
711
+6
2,783
1,512
-99
6,309
-
+558
847
1,628
-136
6,861
873
-303
2,737
12
-11
21
Eliminations
10,486
4,368
1,515
717
1,413
558
1,492
570
1
-771
-1,073
+302
-5,012
The Group
20,349
19,642
+707
80,979
Finland
Norway
Denmark
Baltic
Eurasia
International Carrier
Holding
Corporate
7
Operating income excl. non-recurring items
SEK million
Jan-Mar 2003
Jan-Mar 2002
Change
Jan-Dec 2002
Sweden
Finland
Norway
Denmark
Baltic
Eurasia
Russia
Turkey
International Carrier
Holding
Corporate
Eliminations
2,717
690
81
-202
275
133
32
54
-199
-208
-182
36
1,916
681
-74
-289
309
18
4
858
-510
-730
-172
-1
+801
+9
+155
+87
-34
+115
+28
-804
+311
+522
-10
+37
8,936
2,056
-42
-2,234
1,537
-76
-43
-333
-1,992
-1,231
-568
-18
The Group
3,227
2,010
+1,217
5,992
8
CAPEX
SEK million
Jan-Mar 2003
Jan-Mar 2002
Sweden
601
391
161
74
132
225
27
61
4
1,676
8.2%
1,122
-521
4,453
413
-22
2,151
212
-51
1,094
289
-215
953
286
-154
1,334
-
+225
234
198
-171
1,117
130
-69
355
3
+1
19
2,653
-976
11,710
Finland
Norway
Denmark
Baltic
Eurasia
International Carrier
Holding
Corporate
The Group
% of net sales
Change
Jan-Dec 2002
13.5%
14.5%
9
Cash flow statement
SEK million
Jan-Mar 2003
Jan-Mar 2002
Change
Jan-Dec 2002
Cash flow from
operating activities
5,586
2,326
+3,260
20,717
CAPEX (cash effect)
-1,689
-2,615
+926
-11,183
3,897
-289
+4,186
9,534
404
1,075
-671
7,685
Cash flow before
financing activities
4,301
786
+3,515
17,219
Financing activities
-5,401
-10,074
+4,673
-21,889
Change in cash and
cash equivalents
-1,100
-9,288
+8,188
-4,670
Free cash flow
Other investing activities
• Net debt reduced by SEK 3,427 million
10
Balance sheet
SEK million
Mar 31, 2003
Dec 31, 2002
Change
Total assets
198,661
205,370
-6,709
Shareholders’ equity
109,404
108,829
+575
34,648
38,075
-3,427
Equity-to-assets ratio1
54%
52%
+2%
Net debt-to-equity ratio1
32%
36%
-4%
Net debt
• High level of financial flexibility
• Retaining sufficient long-term liquidity
TeliaSonera is one of the best rated telecom operators
in Europe
1) Equity has been adjusted by deducting the proposed dividend.
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Anders Igel
President and CEO
May 8, 2003
Rapid integration of operations
Three months after the merger:
• Strategy in place and communicated
• One head office established and staffed
• New divisions of responsibility implemented
• Profit Centers organized and staffed
• Competence Centers structure introduced
13
Several synergy initiatives taken during the quarter
• Negotiations with suppliers
• Elimination of overlaps
–
–
–
–
–
Corporate functions
Network resources
MMS platforms
IT software licenses
Roaming agreements
• Initiatives taken thus far are expected to yield:
– Annual cost savings of SEK 436 million by the end of 2005
– Annual CAPEX savings of SEK 127 million by the end of 2005
• Synergies ahead of schedule
• Minor effect during the first quarter
14
Continued stand alone improvements
Efficiency improvements
• Sweden
– Efficiency programs last year yielding results
– Internet Business EBITDA positive
– Redundancies announced – Number of job
reductions will be determined before summer
• Finland
– Efficiency programs last year resulting in
maintained margins in mobile
– Redundancy of approx. 400 jobs
15
Enhanced customer focus
Increase market shares - increase market efforts
In Sweden
In Finland
In other operations
Consumer segment
Consumer segment
Norway
• New offers to counter
market share drop
• Several new services
• Several market activities
• Colour services
Denmark
Business segment
Business segment
• Campaign starting to pay off
• Single point of contact
Large Corporate
segment
Large Corporate
segment
Eurasia
• Prestigious business
agreements
• Positive response to panNordic services
Russia
Operators segment
Operators segment
• Strong growth in fixed voice
• Increased demand for
mobile products
• Market activities planned
Baltic's
• MMS launched in Latvia
• Strong growth
• Over 600,000 new
customers
Turkey
• Retained leading market
position
16
Profit enhancement
Improved profits and cash flow through
Realization of
synergies
Stand-alone efficiency
improvements
Three months after the merger
• Synergies ahead of schedule
• Rapid integration
• Stronger margins – result of
successful efficiency improvements
• Internet Services EBITDA positive
• Several initiatives of enhanced
customer orientation
Improving underperforming businesses
• International Carrier and
Denmark improving
Profitable growth
• Enhanced customer focus
• New offerings and marketing efforts
17
Outcome compared with outlook
Key figures
Revenue
EBITDA excl. nonrecurring items
CAPEX / Sales
•
•
•
•
Group level
mid-term targets
Outcome Q1
Few percentage points
growth annually
3.6%
Increasing margin,
approaching 34%
37.2%
Few percentage points
higher than 2002 (14.5%)
8%
Increased market efforts will pressure margins
Efficiency measures yielding faster results
Sustainable mid-term EBITDA margin of 34% expected to be reached sooner
Full year CAPEX expected around 2002 level
• Dividend is doubled this year and stated policy is to increase dividend yearly
18
Focus going forward
• Commercial actions – win back
market shares
• Continued synergy realization
• Efficiency improvements
19
Forward-looking statements
This document contains statements concerning, among other things, TeliaSonera's
financial condition and results of operations that are forward-looking in nature. Such
statements are not historical facts but, rather, represent TeliaSonera's future
expectations. TeliaSonera believes that the expectations reflected in these forwardlooking statements are based on reasonable assumptions; however, forward-looking
statements involve inherent risks and uncertainties, and a number of important
factors could cause actual results or outcomes to differ materially from those
expressed in any forward-looking statement, including TeliaSonera's market position,
growth in the telecommunications industry in Europe, the effects of competition and
other economic, business, competitive and/or regulatory factors affecting the
business of TeliaSonera and the telecommunications industry in general. Forwardlooking statements speak only as of the date they were made, and, other than as
required by applicable law, TeliaSonera undertakes no obligation to update any of
them in light of new information or future events.
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The Nordic and Baltic
telecommunications leader
May 8, 2003