TeliaSonera January-December 2009

Fourth quarter
• Net sales decreased 2.4 percent to SEK 27,410 million (28,096). Net sales in local currencies and excluding acquisitions decreased 0.5 percent.
• The addressable cost base in local currencies and excluding acquisitions de-creased 11.8 percent.
• EBITDA, excluding non-recurring items, increased 9.3 percent to SEK 9,039
million (8,272) and the margin to 33.0 percent (29.4). The increase in local curren-cies and excluding acquisitions was 13.8 percent.
• Operating income, excluding non-recurring items, decreased to SEK 7,573 million (7,678) due to lower contribution from associated companies.
• Net income attributable to owners of the parent company declined to SEK 4,902 million (5,644) and earnings per share to SEK 1.09 (1.26) due to lower income from associated companies and higher income taxes.
• Free cash flow was SEK 4,660 million (4,918).
• During the quarter the number of subscriptions grew by 3.8 million, of which 1.8 million new subscriptions in the majority-owned operations and 2.0 million in the associated companies, totaling 147.6 million.

Full year
• Net sales increased 5.4 percent to SEK 109,161 million (103,585). In local curren-cies and excluding acquisitions net sales decreased 0.3 percent.
• Net income attributable to owners of the parent company was SEK 18,854 million (19,011) and earnings per share was SEK 4.20 (4.23).
• Free cash flow increased 50.3 percent to SEK 17,024 million (11,328).
• The Board of Directors proposes an ordinary dividend of SEK 2.25 per share (1.80), totaling SEK 10,104 million (8,083), or 54 percent (43) of net income attribut-able to owners of the parent company.

(Table included in attached pdf)

Comments by Lars Nyberg, President and CEO

“I am proud of our achievements during 2009. We have been able to keep revenues in local currencies intact, reported the highest EBITDA ever and improved cash flow by as much as 50 percent compared to last year, due to a healthy mix of mature and emerging markets.

One of the things I and the rest of the management team are particularly proud of is that we have managed to break the trend of continuous cost increases. This is a result of major cost reductions in the Nordic and Baltic countries and tight cost control in Eurasia. In this context, I am encouraged that employee satisfaction and commitment improved. For the second year in a row, we have made significant progress and reached the highest level since TeliaSon-era started measurements in 2004.

For a number of years, we have had the ambition to increase our ownership in both Turkcell and MegaFon. However, this has proven to be very difficult and we have explored different routes to increase our control over as well as the liquidity of these assets. In November, we took an important step towards resolving the long lasting ownership deadlock, by aligning our ownership interests with Altimo. However, we also made it clear at the time of the an-nouncement that the real value of this agreement will lie in the execution of it.

As a result of our efficiency improvements and careful capital spending, free cash flow in-creased significantly and strengthened our financial position further. We are therefore in the fortunate position that we can increase capital expenditures for 2010 to secure our future growth. In addition, the Board of Directors will propose a 25 percent increase in ordinary dividend to our shareholders at the Annual General Meeting. The dividend policy has also been revised and the payout ratio has increased to be at least 50 percent of net income.

It is important that TeliaSonera is regarded as a pioneer by being in the forefront of adopting new technology and introducing new services. We were therefore excited that we were able to open up the world’s first commercial 4G networks in the city centers of Stockholm and Oslo in December and the initial response from our customers has been positive. As we also strongly believe that the fixed network will remain competitive for a foreseeable future, we will selectively increase our fiber and IP investments within Broadband Services this year.

Looking ahead, TeliaSonera is a financially strong company with leading positions in most markets and with motivated and competent employees. We are confident that we will be able to defend our profitability in 2010.”