TeliaSonera January-June 2010

Further improvement in organic revenue growth

Second quarter

  • Net sales decreased 1.7 percent to SEK 26,964 million (27,424). Net sales in local currencies and excluding acquisitions increased 3.3 percent.

  • The addressable cost base in local currencies and excluding acquisitions decreased 1.9 percent.

  • EBITDA, excluding non-recurring items, increased 1.9 percent to SEK 9,214 million (9,043) and the margin to 34.2 percent (33.0). The increase in local currencies and excluding acquisitions was 6.5 percent.

  • Operating income, excluding non-recurring items, decreased to SEK 7,943 million (8,176) as higher EBITDA, excluding non-recurring items, was more than offset by lower contribution from associated companies.

  • Net income attributable to owners of the parent company increased to SEK 5,238 million (4,469) and earnings per share to SEK 1.17 (1.00).

  • Free cash flow increased by 26.5 percent to SEK 3,930 million (3,106).

  • During the quarter the number of subscriptions grew by 2.5 million, of which 1.8 million new subscriptions in the consolidated operations and 0.7 million in the associated companies, totaling 152.4 million.

  • Group outlook for 2010 has been revised. Growth in net sales in local currencies and excluding acquisitions for 2010 is expected to be in line with the first half of 2010. The CAPEX-to-sales ratio is expected to be approximately 14-15 percent in 2010.

First half

  • Net sales decreased 2.8 percent to SEK 53,054 million (54,559). In local currencies and excluding acquisitions net sales increased 2.9 percent.

  • Net income attributable to owners of the parent company increased to SEK 9,960 million (8,909) and earnings per share to SEK 2.22 (1.98).

  • Free cash flow increased to SEK 7,302 million (6,365).

(Table included in attached pdf)

In this report, comparative figures are provided in parentheses following the operational and financial results and refer to the same item in the second quarter of 2009, unless otherwise stated.

Comments by Lars Nyberg, President and CEO

“TeliaSonera delivered yet another solid quarter and revenue growth in local currencies even improved somewhat compared to the first quarter. Currency fluctuations and lower income from our associated companies mask our underlying performance. Operating income was up by 5 percent excluding these effects and non-recurring items.

Eurasia continued to deliver double-digit revenue growth due to improved macroeconomic conditions in key markets such as Kazakhstan and we maintained or improved our market positions in all Eurasian countries. In the Baltic countries, some early signs of recovery can be seen in Estonia, although the majority of the improvement can be ascribed to higher equipment sales. The Nordic countries continue to benefit from strong growth in mobile data and within Broadband Services, TeliaSonera launched a version of the popular Spotify music platform through the digital-TV services in Sweden and Finland.

After the encouraging trends that we saw in the beginning of the year we decided to in-crease our investments in the second quarter, especially in Eurasia. We are also planning to increase our investments in fiber and IP in Sweden. We annually invest several billions in the infrastructure in Sweden to ensure high-speed internet access to a large portion of the population. We would like to continue to do so. However, current uncertainties regarding regulation on fiber from the Swedish Post and Telecom Agency prevent us from executing at full pace which delays the roll-out.

TeliaSonera was the first operator in the world to launch commercial 4G services in December last year in Stockholm and Oslo. Since then, we have also made initial trials for a number of test customers in the other Nordic countries. We were able to demonstrate the benefits with 4G at the Royal wedding in Sweden in June as TeliaSonera provided telecommunication services for some 3,000 journalists who travelled to Stockholm to report on the wedding of Crown Princess Victoria and H.R.H. Prince Daniel.

We are encouraged by the revenue growth we have achieved so far this year and believe growth in local currencies for 2010 will be at the same level as we have seen during the first six months.”

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