TEE: TeliaSonera AB: TeliaSonera January-September 2012

  TEE: TeliaSonera AB: TeliaSonera January-September 2012

UK Regulatory Announcement

Stable earnings per share and outlook reiterated


Third quarter

· Net sales in local currencies and excluding acquisitions were unchanged. In
reported currency, net sales decreased 3.2 percent to SEK 25,842 million
(26,707). · The addressable cost base in local currencies and excluding
acquisitions increased 4.2 percent. In reported currency, the addressable cost
base increased 0.4 percent to SEK 7,153 million (7,124). · EBITDA, excluding
non-recurring items, decreased 4.0 percent in local currencies and excluding
acquisitions. In reported currency, EBITDA, excluding non-recurring items,
fell 6.3 percent to SEK 9,255 million (9,877). The EBITDA margin, excluding
non-recurring items, decreased to 35.8 percent (37.0). · Operating income,
excluding non-recurring items, decreased 4.2 percent to SEK 7,676 million
(8,013). · Net income attributable to the owners of the parent company
decreased 1.2 percent to SEK 4,803 million (4,863) and earnings per share to
SEK 1.11 (1.12). · Free cash flow decreased to SEK 3,825 million (4,776),
mainly due to lower EBITDA and changes in working capital. · During the
quarter the number of subscriptions grew by 4.0 million in the consolidated
operations and by 1.4 million in the associated companies. The total number of
subscriptions was 180.0 million. · Group outlook for 2012 remains unchanged.

Nine-month period

· Net sales in local currencies and excluding acquisitions increased 1.0
percent. In reported currency, net sales increased 0.4 percent to SEK 77,829
million (77,545). · Net income attributable to owners of the parent company
decreased 3.1 percent to SEK 12,958 million (13,369) and earnings per share to
SEK 2.99 (3.05). · Free cash flow increased to SEK 20,806 million (8,863).

Comments by Lars Nyberg, President and CEO

“The third quarter was similar to the second quarter in terms of operating
trends. Our revenues in local currencies were at the same level as last year.
Although Eurasia continues to deliver double-digit growth and Broadband
Services reports a moderate decrease, we are experiencing weakness in service
revenues in many of our markets within Mobility Services. In addition, our
cost base is today growing at a higher rate than our revenues and we have to
reverse this trend. Therefore we have spent the last months analyzing our
operation in depth. The ambition is to fundamentally change our business by
simplifying our way of working. We estimate this will lead to a cost reduction
of some SEK 2 billion net over the coming two years. It will also include
personnel reductions and our initial estimate is that it will affect
approximately 2,000 employees or 7 percent of the total workforce in the

We must also speed up the implementation of a new, sustainable business model
to defend our revenues and deal with the increasing challenges that this
industry is facing. Therefore, we need a new leadership and Tero Kivisaari has
taken up the responsibility for Business area Mobility Services in addition to
his role as Head of Eurasia.

Our customers’ behavior is changing rapidly and we must change our business
models from being voice to data centric. As an example, we launched new
subscriptions in Sweden in September where our customers can continue using
Skype and other mobile IP-telephony services just like before. At the same
time, we have adjusted our data prices to better meet the growing demand for
data communication.

In September, TeliaSonera became subject to media allegations of bribery and
money laundering related to our 2007 investment in a 3G license and
frequencies in Uzbekistan. The allegations directed towards TeliaSonera are
severe, although we are convinced that they are unfounded. To clarify the
factual circumstances and ascertain whether there are any grounds for the
allegations, TeliaSonera has initiated an external legal review, to be
presented before the end of the year. The anticorruption unit of the Swedish
Prosecuting Authorities has also initiated an investigation, which we welcome
and will cooperate with.

In recent months, TeliaSonera has accelerated its sustainability work, with
focus on privacy and freedom of expression. We have engaged the Danish
Institute for Human Rights, to assist us in conducting a human rights impact
assessment, country by country, followed by a mitigation plan. However, in
order to bring about a real step the industry has to join forces. Legislation
for mobile operators is the same for all players. Therefore, eleven of the
world’s leading telecom companies, are working closely together to define
common principles for privacy and freedom of expression, as they relate to the
telecommunications sector. The intention is to find a home for the initiative
and publish the final principles before the end of 2012.

Finally, we welcome and support MegaFon’s intentions to proceed with its
initial public offering and having its shares listed in Moscow and London. If
the IPO is successful, we have reached our goal of having a transparent,
liquid and direct ownership in Russia’s second largest mobile operator.
However, our ambition is to keep a long term strategic ownership of at least
25 percent plus one share. At the same time, the preparation for a public
listing of 25 percent of Kcell in Kazakhstan continues and will, if market
conditions allow, be finalized before the year-end.”

TeliaSonera AB discloses the information provided herein pursuant to the
Swedish Securities Markets Act and/or the Swedish Financial Instruments
Trading Act. The information was submitted for publication at 07:00 CET on
October 17, 2012.

This information was brought to you by Cision

TeliaSonera AB Investor Relations
SE–106 63 Stockholm, Sweden
Tel +46 8 504 550 00
Fax +46 8 611 46 42


TeliaSonera AB
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