TEE: TeliaSonera AB: TeliaSonera: Interim Report January-June 2013

  TEE: TeliaSonera AB: TeliaSonera: Interim Report January-June 2013

UK Regulatory Announcement

Positive organic sales growth and higher margin

STOCKHOLM

Second quarter summary

  *Net sales in local currencies, excluding acquisitions and disposals,
    increased 0.4 percent. In reported currency, net sales decreased 3.9
    percent to SEK 25,274 million (26,294).
  *The addressable cost base in local currencies, excluding acquisitions and
    disposals, decreased 4.1 percent. In reported currency, the addressable
    cost base decreased 6.6 percent to SEK 7,165 million (7,672).
  *EBITDA, excluding non-recurring items, increased 3.3 percent in local
    currencies, excluding acquisitions and disposals. In reported currency,
    EBITDA, excluding non-recurring items, decreased 1.2 percent to SEK 8,928
    million (9,034). The EBITDA margin, excluding non-recurring items,
    increased to 35.3 percent (34.4).
  *Operating income, excluding non-recurring items, decreased 2.8 percent to
    SEK 7,085 million (7,286). Operating income decreased 10.8 percent to
    6,283 million (7,044), including non-recurring items of SEK -802 million
    (-242).
  *Net income attributable to owners of the parent company decreased 16.9
    percent to SEK 4,031 million (4,852).
  *Earnings per share decreased to SEK 0.93 (1.12). · Free cash flow was SEK
    4,462 million (3,062, excluding dividends from MegaFon net of taxes of SEK
    11,726 million).
  *Group outlook for 2013 is unchanged.

First half summary

  *Net sales in local currencies, excluding acquisitions and disposals,
    decreased 0.3 percent. In reported currency, net sales decreased 4.2
    percent to SEK 49,816 million (51,987).
  *Net income attributable to owners of the parent company decreased 9.3
    percent to SEK 8,139 million (8,974) and earnings per share to SEK 1.88
    (2.07).
  *Free cash flow was SEK 6,876 million (5,255, excluding dividends from
    MegaFon net of taxes of SEK 11,726 million).

Comments by Per-Arne Blomquist,

President and CEO

“In the second quarter, organic revenue growth turned positive and margins
improved further. TeliaSonera continues to lead the industry change in our
markets by shifting away from minute based voice pricing, to new data centric
models. In addition, we maintain focus on securing our long term profitability
by implementing efficiency measures and investing for the future in 4G and
fiber.

In Mobility Services, revenue pressure eased somewhat and margins
strengthened, supported by higher billed revenue and reduced costs. It is
particularly encouraging that our Danish operations reported an increase in
billed revenues, as the market has been challenging for years. However, lower
regulated interconnect rates continued to put pressure on revenues in all
markets. In Broadband Services, the fiber roll-out regained momentum and in
Sweden customer demand currently exceeds our ability to deliver. The cost base
decreased, but not enough to fully compensate for the revenue decline. In
Eurasia, organic revenue growth remained around 14 percent, supported by
increasing data consumption and subscription growth. Margins continued to
improve as a result of further cost savings. In Nepal, we reached a new
milestone by passing 10 million subscriptions.

In Sweden, Norway and Denmark we launched new mobile offers to consumers, with
flat fees for voice and messaging service together with bucket priced data
related to usage. In Sweden, our consumer offer continued to attract more than
20 percent of new sales and a similar package is also available for the SME
segment. In total, we have gained about 180,000 new subscriptions on the new
price plans in Scandinavia and the initial findings are promising.

Network quality and capacity are crucial to meet the exploding demand for
data; therefore we will further invest in 4G and mobile coverage, expand
within fiber and selectively target acquisitions of existing fiber networks in
our home markets. We will significantly expand our 4G network in Sweden,
targeting 92 percent geographic coverage in the next two years, utilizing
existing 2G/3G infrastructure to ensure a cost efficient roll-out. Coverage is
prioritized across the group and our Estonian operation extended its 4G
network significantly in the quarter and has currently the best national 4G
coverage in Europe.

We continue to implement our cost savings program launched at the end of last
year and approximately 1,050 of the targeted 1,800 employees have been given
notice year to date. Savings are expected to be further visible in the second
half of this year and we remain committed to reducing the cost base by SEK 2
billion net by the end of 2014.

The ownership disputes in our associated company Turkcell continues with two
failed AGMs in the quarter. We welcome the decision on July 9, by the Privy
Council, stating the terms under which Çukurova can recover the disputed
shares in Turkcell Holding from Altimo, an important step in resolving the
deadlock. It is crucial that corporate governance is restored in Turkcell and
we fully support a resumption of dividend payments.

The above mentioned activities prove that we are executing on our strategy,
targeting the best customer experience, high-quality networks and
cost-efficient operations. Based on the performance for the first six months,
we reiterate our full year 2013 outlook.”

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
July 17, 2013.

Questions regarding the reports
TeliaSonera AB
Investor Relations
SE–106 63 Stockholm, Sweden
Tel. +46 8 504 550 00
Fax +46 8 611 46 42
www.teliasonera.com

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Contact:

TeliaSonera AB
 
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