1 TeliaSonera presentation Per-Erik Brundin Director Performance management.

1

TeliaSonera presentationPer-Erik BrundinDirector Performance management

6

Hotet

7

Lyftet

8

Klivet

10

Milestones looking 20 years back…..

1990

• One country

• 49.000 employees in Sweden only

• 6 million customers

• 35 GSEK turnover

• Mainly Fixed telephony

2010

• 20 countries

• 29.700 employees in 21 countries (10.000 in Sweden)

• 148 million customers

• 109 GSEK turnover– 36,666 GSEK EBITDA

• Mobile

• Broadband

12

1853 -1900

Finns det någon röd tråd?

13

Enitel

Bred-bands-bolaget

Teracom

Sv. Kraftnät

Banverket

Stokab

TeliaSonera

Telenor

Telitel

NetNet

RSL Com

Worldcom/UUnet

Vodaphone

TeliaSonera

Mobilix

Banestyrelsen

Powercom

KöbenhamnsBelysningssellskap

Tele2

BaneTele

Oslo Sporveier

Netcom

Enator

Statnett

NetNet

Netsource

9,5%

Nor Sea Com

Glocalnet

Ebone

LDI

IKEA/Catella Framtids-fabriken

Global Crossing

Web A/S

Image Scandinavia

Rix Telecom

Göteborgs Energi

COLT

UPC Chello

VattenfallBirka

Sydkraft

Supertel

Delta Three

Global Crossing

Utfors

Utfors

KPN/Qwest EUNet

Carrier1

Thalamus

TeleCity

Arrowhead

World Online

IP-Only

Euro909.com

FacilicomTele8

Interoute

UPC Norge

Teleglobe

CyberCity

Global One

Telenordia

VR-Group(Järnväg)France

Telecom

Cooperation

Facilicom

Utfors

KPN/Qwest EUNet

Netcom/Tele2

GTS, Global Telesystems

Pangea

Worldcom

EUNet

KPN/Qwest

Sweden Norway

Denmark Finland

Bredbands-bolaget

Europolitan

Tele1

Tele1

EUNet

KPN/Qwest

Utfors

PangeaFinnet

Datatie

Elisa

Radiolinja

Telefon-föreningar

46 st

RSL Com

Delta Three

RSL Com

Delta Three


Worldcom/UUnet

Worldcom/UUnet

Debitel

Global One

Telenordia

Telenor

ElTele

ElTele Öst

Tele Danmark

Tele Danmark

SBC Comm.

Global One

France Telecom

World Online

CooperationGlobal One

France Telecom

France Telecom

World OnlineSamarbete, delägande 14%

FacilicomTele8

Delägare

53,5%

50%50%


CyberCity

PangeaGTS, Global Telesystems

Ebone

BIP

Spray

Kinnevik

Tele2

OptimalTelecom

Comviq

Tele2

Kabelvision

NetCom

CableWireless

BTCooperation

53,5%

Sonofon

Telenor

Bell South

KunskapskontoretOrkla

Providence Equity

Carrier1

46,5%

Tele1

Tele1

Supertel

TeliaSonera

Konkurrens

14

Effektivisering – Mer för mindre!

Växa i antal kunder

Högre intäkt

Investera för att Klara kundbehov

Större Produktion

menLägre intäkt

Lägre kostnad

Nu!

Växa i antal kunder!God marginal

Växa i volym!Pris press

kostnad för att klara marginalen

15

Den underliggande utvecklingen

Telecom Industry

Broadband

Mobility

main frames

desk top computing

PCPC-LAN

Internet

TV, Radio Electronicpublishing and entertainment

Computer Industry

Media Industry

New Telecom

WorldTelephony

16

Teknikkonvergens

Telecom Industry

Broadband

mobility

main frames

desk top computing

PCPC-LAN

Programs and applicationsPalm computersInternet

TV, media, electronicpublishing and entertainment

Computer Industry

Media Industry

The Interconnected

WorldIP

17

Marknadskonvergens

Telecom Industry

Broadband

mobility

main frames

desk top computing

PCPC-LAN

Programs and applicationsPalm computersInternet

TV, media, electronicpublishing and entertainment

Computer Industry

Media Industry

The Interconnected

World

18

Kunderna gillar att vara mobila….

19

Televerket(SV)

Televerket(No)

Televerket (DK)

Televerket (Fi)

Växlar & Nät

Telefoner

Bygga nät och infra

Underhålla

Sälja & Distribuera

1990

RENODILINGRENODILING

Gör allt i hela

kedjan med egen personal

20

RENODILINGRENODILING

Nätkompo-nenter

Utbyggnad

Underhåll

Applikationer

Sales & Distribution

Ericsson Motorola Nokia

Nokia Ericsson Flex-tronics

Etc.

Ericsson Etc Etc

TeliaSonera Partners Partners

Egen försäljning och distribution Partners

Huawei

Telefoner mm Nokia Samsung Motorola Apple Etc.SonyEricsson

Eltel Etc

Nokia

Produkt/ paketering/ Marketing

TeliaSoneraIntegrera och väx ”cross border” i valda delar!

21

Telecom har gått från att vara Lokalt och nationellt till att vara globalt

22

“Only five years away, when telephony will be a free service…”

The Economist September 2005

The rumor of our death is greatly exaggerated

23

Access anywhere, anytime

0

10

20

30

40

50

2002 2007 2012

Sources: Cisco, 2008

Global IP traffic… will nearly double every two years

(2007-2012)

Exa

byte

s /

mo

nth

5 exabyteper month

7 exabyteper month

44 exabyteper month

24

Televerket på 80- talet

Board

DirectorGeneral

Secretarial Office

Corporate Planning Staff

Internal Audit

Ellemtel (50%)Utvecklings AB

Teleinvest AB

NOTELSAT,NordiskaTelesatellit AB

— Swedish Telecom International AB

— Swedish Telecom Contracting AB

— Telefinans AB

— Tele Larm AB

— Teleindustrier AB

— SOS Alarmering AB (50%)

— Nerion A/S

— Telelogic AB

— Teleannons AB

Administrative Department

Financial Department

Basic Technology and Testing Department

EDP Department

Manage Services Dept

Marketing Dept

Network Dept

Equipment Dept

20 Telecommunication Areas

TE

LI

Rad

io S

ervi

ces

Televerket holds 100% of the share capital unless otherwise indicated

Country-wide Profit Centres

25

Idag heter teleområdena…….

• Sverige, Norge, Danmark, Finland, Kazakstan, Moldavien. Nepal, Georgien etc

32

Hur ser det då ut idag?

33

Highest Employee Commitment Score

40

45

50

55

60

65

70

75

2004 2005 2006 2007 2008 2009

Employee Commitment Score Incl. Eurasia

Index Employee Commitment Score

34

Our focus areas

• World class service company

• Quality in networks

• Cost efficiency

35

Our footprint

• Almost 460 million population

• Total number of subscriptions ~ 148 million – of which ~49 million in the majority-owned operations– of which ~99 in the associated companies

36

TeliaSonera Group Organization

President & CEOLars Nyberg

MobilityServices

Håkan Dahlström

Legal AffairsJan Henrik Ahrnell

CommunicationsCecilia Edström

CFOPer-Arne Blomquist

HRKarin Eliasson

BroadbandServices

Anders Gylder

Sales division Business Services

Sverker Hannervall

Eurasia

Tero Kivisaari

Group ITÅke Södermark

37

Markets and brands

38

TeliaSonera – organizational structure

Broadband servicesFixed telephony

TeliaSonera International Carrier

BroadbandServices

Mobile communication businesses in

Nordic, Baltic and Spain

MobilityServices

TeliaSonera

Mobile communication

businesses in high growth emerging

markets

Eurasia

39

Mobility Services - Nordic and Baltic leadership

Country Market position*

Brand Subscriptionsmobile

Sweden 1 Telia, Halebop 5,666,000

Finland 2 Sonera, TeleFinland 2,874,000

Norway 2 NetCom, Chess 1,658,000

Denmark 3 Telia, Call me, dlg 1,460,000

Estonia 1 EMT, Diil 766,000

Latvia 1 LMT, OKarte, Amigo 1,042,000

Lithuania 1 Omnitel, Ezys 1,991,000

Spain 4 Yoigo 1,506,000

* TeliaSonera estimates Subscriptions, December 31, 2009

40

Broadband Services - Nordic and Baltic leadershipCountry Market

position*Brand Subscriptions

Sweden 1 Telia Broadband 1,125,000Fixed 3,604,000VOIP 158,000IPTV 396,000

Finland 2 Broadband 458,000Fixed 324,000VOIP 1,000Cable TV 175,000IPTV 1,000

Norway 25

NextGenTel Broadband 223,000VOIP 48,000IPTV 5,000

Denmark 2 Telia Broadband 47,000Fixed 205,000VOIP 9,000IPTV 5,000

Estonia 1 Elion Broadband 182,000Fixed 357,000VOIP 8,000Cable TV 3,000IPTV 110,000

Lithuania 1 TEO Broadband 313,000Fixed 722,000VOIP 4,000IPTV 103,000

Latvia(49%)

1 Lattelecom Broadband 194,000Fixed 560,000VOIP 5,000IPTV 39,000

* TeliaSonera estimates Subscriptions, December 31, 2009

41

Eurasia – a long term commitment

Country Market position*

Brand SubscriptionsMobile

Azerbaijan 1 Azercell 3,847,000

Georgia 1 Geocell 1,892,000

Kazakhstan 1 K’cell 7,165,000

Moldova 2 Moldcell 660,000

Tajikistan 1 Indigo, Somoncom 1,523,000

Uzbekistan 2 UCell 5,074,000

Nepal 2 Mero Mobile 2,202,000

Cambodia 4 Star-Cell 195,000

Russia (43.8%)

3 MegaFon 50,542,000

Turkey**(37.3%)

1 Turkcell 36,000,000

Ukraine** 3 Life 11,800,000

Belarus** 3 Life 800,000

** Subscriptions , September 30, 2009. Turkcell owns 54.2% in Ukraine and 80% in Belarus* TeliaSonera estimatesSubscriptions, December 31, 2009

42

TeliaSonera International Carrier

• Global presence

• More than than 43,000 km of fiber network, owned and operated

• The network reaches more than 100 points of presence in 35 countries across Europe, North America and Asia

• The network is proactively monitored 24/7/365 from Network Operation Centers

• The only European Tier 1 carrier in the world

• More than 85 percent of all European ISPs connect directly to our IP backbone.

43

IP backbone – Global

44

Back up

45

Q4 2009 in brief

• Net sales SEK 27,410 million (28,096)

– Decrease -2.4%– Local organic -0.5%

– FX effect -2.2%

– Acquisitions 0.3%

• EBITDA* SEK 9,039 million (8,272)– Increase +9.3%

– EBITDA margin* 33.0% (29.4)

• EPS SEK 1.09 (1.26)

• Free Cash Flow SEK 4,660 million (4,918)

* Excluding non-recurring items

46

Operational highlights during 2009

Strong revenue growthin Mobility Sweden**

Successfully defendingmargins in the Baltics***

25%

30%

35%

40%

45%

50%

Q4 08 Q1 09 Q2 09 Q3 09 Q4 09

Lithuania Latvia Estonia

Significantly improved cashflow* in Broadband Services

0

2 000

4 000

6 000

8 000

10 000

2008 2009

SEK million

* Cash flow, measured as EBITDA, excluding non-recurring items, minus CAPEX** Net sales in Sweden rose 5.8 percent and EBITDA margin, excluding non-recurring items, improved to 38.8 percent (37.1) *** EBITDA margin, excluding non-recurring items, in Mobility Services

47

An eventful year in Eurasia

• Improved profitability from already high levels

• Successfully defended or improved our market positions

• Network build-out in Nepal and Uzbekistan

• Agreement with Altimo for Turkcell and MegaFon

48

Full year 2009 – in line with the outlook

* In local currencies and excluding acquisitions** Excluding non-recurring items

Outlook 2009 Actual 2009

Net sales*In line with or slightly below the level of 2008

-0.3%

Addressable cost base*Below the SEK 33.8 billion in 2008

-6.8%

EBITDA margin** Exceed the margin level of 2008 (31.8%)

33.6%

CAPEX-to-sales ratio In the range 13-14% (15.2%)

12.8%

Number of employees Somewhat below 30,00029,734 vs. 32,171

year-end 2008

49

Business area – Mobility Services

• Cost savings improved profitability in Mobility Services in Q4 09

• Revenue growth continued in Swedish Mobile, +6.4 percent y/y in Q4 09

• Situation in the Baltic countries still challenging


0

2 500

5 000

7 500

10 000

12 500

15 000

Q4 08 Q4 09

SE

K m

illio

n

26%

28%

30%

32%

34%

Net sales, reported currency

EBITDA margin*

Net sales and EBITDA margin*

-2.4% LC

0

10 000

20 000

30 000

40 000

50 000

60 000

2008 2009

SE

K m

illio

n

24%

26%

28%

30%

32%


EBITDA margin*


-1.6% LC

50

Business area – Broadband Services

• Cash flow almost tripled in Broadband Services in Q4 09

• Net sales in Sweden and Finland impacted by lower internal sales

• Significant improvement in EBITDA margin to 30.1 percent (23.0) in Q4 09

0

2 500

5 000

7 500

10 000

12 500

Q4 08 Q4 09

SE

K m

illio

n

20%

22%

24%

26%

28%

30%

32%

34%


EBITDA margin*


-3.2% LC


0

10 000

20 000

30 000

40 000

50 000

2008 2009

SE

K m

illio

n

24%

26%

28%

30%

32%

34%

36%


EBITDA margin*


-3.1% LC

51

Business area – Eurasia

0

1 000

2 000

3 000

4 000

5 000

Q4 08 Q4 09

SE

K m

illio

n

46%

48%

50%

52%

54%


EBITDA margin*


+7.3% LC


• Organic growth improved sequentially and profitability was maintained

• Kazakhstan improved in Q4 09, strong subscriber intake on new price plans

• Reported net sales significantly impacted by currency movements

0

5 000

10 000

15 000

20 000

2008 2009

SE

K m

illio

n

46%

48%

50%

52%

54%


EBITDA margin*


+5.0% LC

52

CAPEX

• Full year CAPEX-to-sales at 12.8 percent (15.2)

• Changed approval routines for CAPEX during 2009

0,0

4,0

8,0

12,0

16,0

2006 2007 2008 2009

SEK billion

0%

4%

8%

12%

16%

20%

CAPEX CAPEX-to-sales ratio

28%

34%

32%

6%

Mobility Broadband Eurasia Other

CAPEX 2009

53

Solid financial position

0

10 000

20 000

30 000

40 000

50 000

60 000

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 090,0

0,5

1,0

1,5

2,0

Net debt Net debt to EBITDA* rolling 4 quarters

SEK million


54

Proposed dividend and capital structure

• Revised dividend policy

– The ordinary dividend shall be at least 50 percent (40) of Net income*

• Proposed ordinary dividend SEK 2.25 per share (1.80)

– Corresponding to 54 percent (43) of Net income*

– Increase of 25 percent compared to 2008

• Proposal for authorization

– Repurchase a maximum of 10 percent of outstanding shares

– Annual General Meeting will be held on April 7, 2010

* Net income attributable to owners of the parent company

55

Shareholder structure year-end, 2009

Shareholder Holding

Swedish State 37.3%

Finnish State 13.7%

Swedbank Robur Funds 3.5%

Alecta 2.5%

SEB Funds 1.6%

AMF Insurance & Funds 1.6%

Cevian Capital LP 1.6%

Nordea Funds 1.4%

Skandia Life insurance 1.3%

SHB Funds 1.1%

AFA Insurance 1.1%

Fourth Swedish National Pension Fund 1.0%

First Swedish National Pension Fund 1.0%

Second Swedish National Pension Fund 0.6%

Third Swedish National Pension Fund 0.5%

Other shareholders 30.2%

635,799 shareholders

Sweden 66.5%

Finland 19.7%

Great Britain 4.3%

USA 3.8%

Luxemburg 1.8%

Norway 0.9%

France 0.5

Other countries 2.5%

56

Strong financial key ratios

Dec 31, 2009 Dec 31, 2008

Return on equity* 15.2% 17.2%

Return on capital employed* 15.5% 17.3%

Equity/assets ratio 49.1% 50.5%

Net debt/equity ratio 34.9% 36.5%

* Rolling 12 months

One of the best rated Telecom Operators in Europe

57

TeliaSonera AB credit ratings (A3/A-)

• January 8, 2003, lowered long-term debt rating to A2

• November 1, 2006, outlook changed to Negative

• October 30, 2007, lowered long- and short-term debt rating to A3 and P-2 respectively

• February 12, 2009, debt ratings confirmed

• Outlook: Stable

• February 5, 2003, lowered long-term debt rating to A

• October 28, 2005, lowered long-term debt rating to A- and short-term debt rating to A-2

• November 13, 2009, debt ratings confirmed

• Outlook: Stable

Moody’s (A3/P-2) Standard & Poor’s (A-/A-2)

0

1

2

3

4

5

Q1/ 02 Q4/ 02 Q1/ 03 Q4/ 03 Q4/ 04 Q1/ 05 Q4/ 05 Q4/ 06 Q4-07 Q4-08 Q4-09

AAAA-A+AA-

TeliaSonera AB long-term ratings migration history 2002-to-today

One of the best rated Telecom Operators in Europe

58

Changing competitive dynamics

Applications

WebBrowser & search engine

Content distribution

Hardware

Access Telcos

59

IPIP– 3G up to 14.4 Mbit/s

From 1G to 4G in less than 30 years

Voice

WAP

Data

AnalogueAnalogue– NMT

DigitalDigital– GSM/GPRS from 9.6 kbps

4G4G100Mbit/s

Mobile accessMobile access

60

What drives the change?

61Det var bättre förr! - Ju förr desto bättre!

62

Se upp med ”hästhållare”

64

Lexus 89.0 (US)

Amazon 86.0 (US)

Google 86.0 (US)

Disney 84.0 (US)

Apple 84.0 (US)

UPS 83.0 (US)

Tesco Mobile 82.0 (UK)

Toyota 80.6 (SE)

General Electric 80.0 (US)

EPSI Excellent EPSI Average

World Class Customer Service

Southwest Airl. 79.0 (US)

Ritz-Carlton 78.9 (SG)

Turkish Airlines 78.0 (TR)

Starbucks 77.0 (US)

BestBuy 74.0 (US)

Audi 72.9 (SE)

ICA 72.3 (SE)

Schenker 70.9 (SE)

Nordea 70.9 (SE)

Samsung 70.0 (US)

McDonalds 70.0 (US)

TeliaSonera 67.6 (SE)

Folksam 67.4 (SE)

LG 67.0 (SE)

H&M 66.0 (SE)

EPSI High

65

För 80 - talet

Så här mycket får det kosta

Så här mycket pengar har vi

Det här får det kosta

- använda pengarna så effektivt som möjligt

Fördela intäkt klokt

1 TeliaSonera presentation Per-Erik Brundin Director Performance management.

Documents

Transcript of 1 TeliaSonera presentation Per-Erik Brundin Director Performance management.