TeliaSonera January-March 2012
- 2012-04-19 05:00 UTC
Stable core business despite price competition
- Net sales in local currencies and excluding acquisitions increased 2.9 percent. In reported currency, net sales increased 3.5 percent to SEK 25,693 million (24,835).
- The addressable cost base in local currencies and excluding acquisitions decreased 2.1 percent. In reported currency, the addressable cost base decreased 1.7 percent to SEK 7,440 million (7,572).
- EBITDA, excluding non-recurring items, decreased 1.4 percent in local currencies and excluding acquisitions. In reported currency, EBITDA decreased 0.7 percent to SEK 8,824 million (8,890) and the margin decreased to 34.3 percent (35.8).
- Operating income, excluding non-recurring items, decreased 8.5 percent to SEK 6,641 million (7,258). Income from associated companies decreased 36.2 percent to SEK 1,033 million (1,619).
- Net income attributable to owners of the parent company decreased 15.9 percent to SEK 3,908 million (4,646) and earnings per share to SEK 0.90 (1.04).
- Free cash flow decreased 17.2 percent to SEK 2,193 million (2,647) due to higher cash CAPEX and higher interest paid.
- During the quarter the number of subscriptions increased by 1.2 million in the consolidated companies and by 1.1 million in the associated companies. The total number of subscriptions was 172.4 million.
- Group outlook for 2012 is unchanged.
Comments by Lars Nyberg, President and CEO
“The organic growth rate improved in the first quarter compared with previous quarters. Eurasia continued to deliver double-digit growth, while revenues in Broadband Services were almost at the same level as last year. In Mobility Services, the growth was mainly driven by equipment sales.
Despite price competition in many of our markets, we successfully defended our core business within Mobility Services as growth in data revenues compensated for the decline in voice and messaging. Changed customer behavior which leads to a mix shift in our business highlights the need to develop our business models and how we charge for our services going forward. We have been in the forefront stating that while prices for voice will continue to come down there must be a stronger correlation between usage and pricing of data.
TeliaSonera is leading this change towards a new sustainable business model. We have been early in introducing tiered pricing of data, lower costs for data roaming and recently openly communicated that we will start to charge for mobile VoIP. This will be launched in Spain within a month and in Sweden for new subscriptions during the summer.
Within Broadband Sweden, we see a strong customer demand for our fiber offering although our focus in the first quarter has been to improve our internal processes. In Finland, our second largest market, we have for some time been in a negative trend and lost market share. In order to sharpen our profile and strengthen our business and the Sonera brand, we have recruited Robert Andersson as President and CEO of Sonera in Finland, who will also become a member of Group Management.
In Eurasia, Ncell in Nepal has been a success story since the acquisition in 2008 and the company has now passed 7 million subscriptions. We are therefore pleased that we in April were able to enter into an agreement to further increase our ownership. While our strategy is to be a strong majority-owner in core holdings we also aim to divest non-core minority interest. Therefore, we decided to divest our 18.6 percent stake in Smart Mobile and exit from the very competitive Cambodian mobile market.
With regards to MegaFon, we have confirmed that discussions are ongoing between us and the two other shareholders, AF Telecom and Altimo, regarding future ownership and governance of the company.
We reiterate the outlook for 2012 and believe that our continued work to develop our price models and scrutinize costs throughout the organization will leave our EBITDA margin at the same level as last year.”
Questions regarding the reports:
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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 April 19, 2012.