Third Quarter Report, Jan-Sep 2001 Stockholm, 7 November 2001 - - PowerPoint PPT Presentation

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Third Quarter Report, Jan-Sep 2001 Stockholm, 7 November 2001 - - PowerPoint PPT Presentation

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www.telia.com Third Quarter Report, Jan-Sep 2001 Stockholm, 7 November 2001 Higher growth Growth in core businesses + 13% Telia Mobile + 21% Telia Internet Services + 33% Telia International Carrier + 37% Telia Networks + 1% Telia AB, IR,

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Third Quarter Report, Jan-Sep 2001 Stockholm, 7 November 2001

www.telia.com

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2

Telia AB, IR, 020-2001, eng

Higher growth

Growth in core businesses + 13%

Telia Mobile + 21% Telia Internet Services + 33% Telia International Carrier + 37% Telia Networks + 1%

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SLIDE 3

3

Telia AB, IR, 020-2001, eng

Improved profitability

! Underlying EBITDA increased 8% —

the margin totaled 24% Q3 2000 Q3 2001 Mobile 23% 30% Networks 30% 35%

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4

Telia AB, IR, 020-2001, eng

Mobile

Finland

  • UMTS license
  • GPRS launched

Sweden

  • UMTS license
  • GPRS launched

Norway

  • UMTS license
  • GPRS launched

Denmark

  • UMTS license
  • GPRS planned launch

" Sales growth 21% " Underlying EBITDA margin up

from 23% to 30%

" Nordic synergies " Ground laid for mobile data

growth

" Sales growth 21% " Underlying EBITDA margin up

from 23% to 30%

" Nordic synergies " Ground laid for mobile data

growth

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5

Telia AB, IR, 020-2001, eng

Mobile

Growth Jan-Sep 2001

Telia Mobile Finland 186,000 + 37,000

Finland

Telia Mobile Denmark 351,000 + 54,000

Denm ark Total proportional num ber

  • f custom ers 5 .4 m illion 3

Custom ers, 1,617,000 Baltic states/ Russia + 458,000

NetCom ASA 905,000 + 55,000

Norw ay

1

Sw eden

Telia Mobile Sweden 3,395,000 + 138,000

2

MegaFon (17.8% ) North West GSM (12.7% + 11,3% ) through Telecominvest 460,000 + 207,000

Russia

* *

Eesti Mobiililtelefon (24.5% ) 376,000 + 49,000

Estonia

* *

Latvijas Mobilais (24.5% ) 319,000 + 49,000

Latvia

* *

Omnitel (27.5% ) 462,000 + 153,000

Lithuania

* *

1 Excl. 121,000 SP custom ers 2 Excl. 83,000 SP custom ers

  • 3Incl. SP customers

* * total customers

Custom ers, Nordic countries 4,837,000 + 284,000

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6

Telia AB, IR, 020-2001, eng

Mobile

Sweden

Subscription Total Cash

ARPU ( SEK)

121 119 108 96 109 123 106 101 108 125 330 348 331 333 314 306 304 303 273 280 303 375 419 426 446 436 426 418 432 394 415 439 101 100 200 300 400 500 Q3 1999 Q3 2000 Q3 2001

Subscription Total Cash

Churn 7%

MoU ( m inutes)

61 58 50 49 58 64 54 52 62 68 115 121 125 126 117 126 123 124 117 128 129 126 141 150 164 155 167 160 170 162 175 176 64 100 200 Q3 1999 Q3 2000 Q3 2001

Growth both in use and revenue per customer

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7

Telia AB, IR, 020-2001, eng

Mobile

Subscription Total Cash Subscription Total Cash

MoU (m inutes)

75 79 71 63 66 66 62 56 57 60 134 141 146 134 130 143 145 136 131 141 147 161 182 196 190 198 223 225 209 210 231 238 84 50 100 150 200 250 Q3 1999 Q3 2000 Q3 2001

Churn 34%

Norway

ARPU (NOK)

136 142 147 118 124 127 119 107 115 128 320 325 337 305 289 301 327 308 292 317 341 406 444 486 444 460 485 528 496 487 534 567 152 100 200 300 400 500 600 Q3 1999 Q3 2000 Q3 2001

Growth both in use and revenue per customer

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8

Telia AB, IR, 020-2001, eng

Continued growth for SMS

Mobile

350 700

Norway 2001 Norway 2000 Sweden 2001 Sweden 2000

Share of sales Q3 2001 Sweden 4% , Norway 15% Share of sales Q3 2001 Sweden 4% , Norway 15%

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec (million messages)

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9

Telia AB, IR, 020-2001, eng

Mobile

New data services launched

SMS

! MobileQuiz ! InfoBrain ! QuickDeal

GPRS

! Telia Mobile OnLine ! Telia Mobile Access ! Telia Mobile InTouch ! NetCom MobiMail

W-LAN

! HomeRun “hot-spots”

Ongoing testing of MMS

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10

Telia AB, IR, 020-2001, eng

Strong growth in broadband customers

Internet Services

(‘000)

30 60 90 120 150 180 1999 2000 Q1 2001 Q2 2001 Q3 2001

ADSL/ LAN Sweden Denmark

High-speed Internet via cable

Skanova

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11

Telia AB, IR, 020-2001, eng

Internet Services

Sales growth + 33%

!

Sales growth for access services + 51%

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 1997 1998 1999 2000 2001

30 Sept

Narrowband Internet access: 37% market share in Sweden Narrowband Internet access: 37% market share in Sweden Broadband: 55% market share in Sweden Broadband: 55% market share in Sweden

(customers)

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12

Telia AB, IR, 020-2001, eng

Sales growth + 37%

International Carrier

!

Robust sales growth in

! capacity + 185% ! IP traffic + 228% ! infrastructure + 271% ! voice -1%

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13

Telia AB, IR, 020-2001, eng

International Carrier

Earnings weakened Actions

!

Continued market turbulence

!

Additional reserves for bad debt expense

!

Increased costs for leased capacity for new customers

!

Increased costs for operation & maintenance

!

Reinforcing sales and marketing resources

!

Further tightening of the credit policy

!

Replacing leased lines with own infrastructure

!

Renegotiating operating agreements with a smaller number of major vendors

!

New organization

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Telia AB, IR, 020-2001, eng

Scope of the network:

Infrastructure buildout 30 Sep 2001 Total fiber-optics in km (in use) 29,500 Ducts km (Europe) 8,000 PoPs (total) 81

Scope of the network:

Infrastructure buildout 30 Sep 2001 Total fiber-optics in km (in use) 29,500 Ducts km (Europe) 8,000 PoPs (total) 81

Rapid network buildout Rapid network buildout

International Carrier

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Telia AB, IR, 020-2001, eng

Networks

! Mature fixed network operations show

+ 1% sales growth

! Good improvement in profitability —

underlying EBITDA + 15%

! Margin strengthened from 30% to 35% ! More stable prices

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Telia AB, IR, 020-2001, eng

Networks

Retail market

Residential customers

!

Subscription fees raised from March 1

!

Cost management and increased efficiency

!

Development of value- added services

!

Streamlining of customer services Business customers

!

Increased sales for value-added services + 11%

!

New service - Telia City Connect

!

Maintained prices and increased efficiency

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Telia AB, IR, 020-2001, eng

Networks

Wholesale market

! Sales growth + 17% ! Demand for leased capacity + 25% ! Powercom supplements Telia’s business and network ! Telehost

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Telia AB, IR, 020-2001, eng

Networks

Continued streamlining

! Product portfolio ! Sales costs ! Capital productivity ! Quality improvements

Stable market shares and improved profitability

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Telia AB, IR, 020-2001, eng

Telia I PO

S c a n d i n a v i a O n l i n e ( l i s t e d ) A l t i t u n IN good company AB Starman Kaabel- televisiooni AS Svefo AB Telia Contracting Telia Kompetens Telia Konferens S m å l a n d s b ö r s e n D a t a A B T e l i a A c a d e m y A B S y s t e m & S e r v i c e A / S E n i r

  • (

l i s t e d ) Eniro shares Telia Real Estate Telia Iberia Provision, TII + Satellit E i r c

  • m

( E i r c e l l ) C

  • m

b i n a t

  • r

I T A B T e l i a T r a d i n g A B S i . M

  • b

i l 5 1 %

  • f

T e l e f

  • s

c

  • m

p a n i e s D R S T e s s T e l i a F i n l a n d P a n

  • r

a m a P

  • l

s k a

Divestitures/ partial divestitures 2000-2001

Refine and focus strategy

Orbiant Eircom

Q1-Q2 Q3 Q4 Q1 Q2 Q3 Q4 2000 2000 2000 2001 2001 2001 2001

Capital gain GSEK 6.4 Capital gain GSEK 3.2 Cap.gain GSEK 2.6

  • No. of employees

32,000

  • No. of employees

32,000

  • No. of employees

17,000

  • No. of employees

17,000

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Telia AB, IR, 020-2001, eng

The Telia Group

Net sales

Growth + 7% , Core business + 13% Growth + 7% , Core business + 13%

4,000 8,000 12,000 16,000 42,000 46,000 50,000 54,000 58,000

Quarter (MSEK)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 99 99 99 99 00 00 00 00 01 01 01

Rolling 12 month (MSEK) 1 3 ,4 8 7 1 4 ,4 3 1

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21

Telia AB, IR, 020-2001, eng

Underlying EBITDA

Growth + 8% , Core business + 15% Growth + 8% , Core business + 15%

The Telia Group

1,000 2,000 3,000 4,000 Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 11,500 12,000 12,500 13,000 13,500 14,000 14,500

Quarter (MSEK) Rolling 12 month (MSEK) 3 ,1 8 0 3 ,4 2 0

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Telia AB, IR, 020-2001, eng

Underlying EBITDA margin

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1999 1999 2000 2000 2000 2000 2001 2001 2001

20% 22% 24% 26% 28%

Rolling 12 month

The Telia Group

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Telia AB, IR, 020-2001, eng

(Equity)

188 1,046 254 1,000 2,000 3,000 4,000 5,000

9m 2000 9m 2001 31/ 10 2001

(MSEK)

Sales

* ) Excluding the Orbiant group

2,392 4,487 668 1,000 2,000 3,000 4,000 5,000

9m 2000 9m 2001 31/ 10 2001

retained companies

* ) (MSEK)

Underlying EBITDA

retained companies

* )

Effects of the refine and focus strategy

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Telia AB, IR, 020-2001, eng

Sales

Financial overview

Growth Q3 00 # Q3 01 21% Growth Q3 00 # Q3 01 21%

Mobile

Quarter (MSEK)

1,000 2,000 3,000 4,000 5,000 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01

3 ,6 6 4 4 ,4 3 9

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Telia AB, IR, 020-2001, eng

Underlying EBITDA

Growth Q3 00 # Q3 01 53% Growth Q3 00 # Q3 01 53%

Mobile

Quarter (MSEK)

200 400 600 800 1,000 1,200 1,400 1,600 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 0% 5% 10% 15% 20% 25% 30% 35%

9 4 4 1 ,4 4 8 Margin

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Telia AB, IR, 020-2001, eng

Sales

Growth Q3 00 # Q3 01 33% Growth Q3 00 # Q3 01 33%

Internet Services

Quarter (MSEK)

200 400 600 800 1,000 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01

6 0 1 7 9 7

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Telia AB, IR, 020-2001, eng

Underlying EBITDA

Improvement Q3 00 # Q3 01 24% Improvement Q3 00 # Q3 01 24%

Internet Services

Quarter (MSEK)

  • 450
  • 400
  • 350
  • 300
  • 250
  • 200
  • 150
  • 100
  • 50

Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01

  • 70%
  • 60%
  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0%

Margin

  • 3 0 3
  • 2 2 9
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Telia AB, IR, 020-2001, eng

Sales

Growth Q3 00 # Q3 01 37% Growth Q3 00 # Q3 01 37%

International Carrier

Quarter (MSEK)

200 400 600 800 1,000 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01

7 1 0 9 7 6

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Telia AB, IR, 020-2001, eng

Underlying EBITDA

International Carrier

Quarter (MSEK)

  • 700
  • 600
  • 500
  • 400
  • 300
  • 200
  • 100

100 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01

  • 60%
  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0% 10%

  • 8 7
  • 6 1 4

Margin

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Telia AB, IR, 020-2001, eng

Sales

Growth Q3 00 # Q3 01 6% * ) Growth Q3 00 # Q3 01 6% * )

Networks

Quarter (MSEK)

2,000 4,000 6,000 8,000 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01

* ) For comparable units growth was 1%

7 ,1 9 9 7 ,6 0 1

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Telia AB, IR, 020-2001, eng

Underlying EBITDA

Growth Q3 00 # Q3 01 15% Growth Q3 00 # Q3 01 15%

Networks

Quarter (MSEK) 500 1,000 1,500 2,000 2,500 3,000 3,500 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 0% 5% 10% 15% 20% 25% 30% 35% 40% 2 ,6 5 5 3 ,0 5 2 Margin

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Telia AB, IR, 020-2001, eng

Growth

Increasing share of revenue from growth areas

Networks 61% Equity 13% Mobile 17%

1 9 9 9

Internet Services 4% International Carrier 5%

Q3 2 0 0 1

Mobile 31% Networks 52% Internet Services 6% International Carrier 7% 4% Equity

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Telia AB, IR, 020-2001, eng

Share of earnings

Share of earnings in associated companies

(MSEK)

  • 1,000
  • 500

500 1,000 1,500 2,000 2,500 Q3 1999 Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001

  • 7 5 9

2 ,3 3 9

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34

Telia AB, IR, 020-2001, eng

Associated companies

Participation Book Market in percent value value (MSEK) at 30 Sep at 30 Sep Eniro AB (Sweden) 25.5 402 3,218 Scandinavia Online AB (Sweden) 24.6 95 30 AS Eesti Telekom (Estonia) 24.5 537 1,168 AB Lietuvos Telekomas (Lithuania) 30.0 2,374 797 Netia Holdings S.A. (Poland) 48.1 118 Infonet Services Corp. (USA) 20.0 2,159 2,166 Eircom plc 14.0 2,837 4,287 Total 8,404 11,784

* ) Incl. Loans of MSEK 3,258 * )

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Telia AB, IR, 020-2001, eng

Investments

(MSEK)

3,000 6,000 9,000 12,000 15,000 18,000 Q3 1999 Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001

  • f which CAPEX

1 6 ,7 4 5 5 ,9 6 5

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Telia AB, IR, 020-2001, eng

Non-recurring items

(MSEK)

  • 500

2,000 4,500 7,000 Q3 1999 Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001

  • 1 1 6
  • 2 3 9
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Telia AB, IR, 020-2001, eng

Income after financial items

(MSEK)

1,244 2,491 909 7,658 267 502 356 3,436 2,445 2,500 5,000 7,500 Q3 1999 Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001 Q3 2001

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Telia AB, IR, 020-2001, eng

Net debt

20,235

Change in net debt

10,000 20,000 30,000 40,000

Under- lying EBITDA Net invest- ments 30 Sep 2001 1 Jan 2001 Divest- itures Tax 1,655 14,308 12,766 9,782 618 15,769

(MSEK)

Other Dividend 1,501

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Telia AB, IR, 020-2001, eng

Strong financial position

(GSEK)

61.9 15.8

10 20 30 40 50 60 70

Equity Net interest-bearing liability

Debt/ equity ratio 0.26 Debt/ equity ratio 0.26

Financial position

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Telia AB, IR, 020-2001, eng

through

" revenue growth " improved margins " reduced CAPEX

Overall goals Improved free cash flow