Shaping a new generation telco – new savings and growth initiatives combined with changed dividend policy

Today TeliaSonera will take the stage for the 2014 Capital Markets Day. The presentation focuses on transforming TeliaSonera to reach the full potential, including new growth and savings inititatives. The existing dividend policy is replaced by a target to distribute an annual dividend of at least SEK 3 per share for the fiscal years 2014 and 2015.

“Today we announce that TeliaSonera will invest to grow in our core business in the Nordics and Baltics, in taking Eurasia to the next level on the back of increased demand for mobile internet, and in areas that complement and strengthens our core business. In addition we will invest to save, increasing simplicity and thereby increase our overall competitiveness. These initiatives aim to defend or increase our market shares and reach sustainable cost savings, without compromising on dividend to shareholders,” said Johan Dennelind, president and CEO of TeliaSonera.

Continuous capex in TeliaSonera’s core operations is expected to be around 15 percent of service revenues the next two years. In addition, TeliaSonera will invest total accumulated capex of up to SEK 6–7 billion in 2015–2016 in two main areas:

1)    In order to increase competitiveness and reduce cost, accumulated capex of SEK 2 billion will be spent on business transformation in 2015–2016 to reach net savings with a yearly run rate of SEK 2 billion during 2017.

2)    Accumulated capex of up to SEK 4–5 billion will be spent on additional grow initiatives in 2015–2016, primarily accelerating the fiber roll-out in Sweden, new B2B offerings, as well as upgrading data networks in Eurasia. In Sweden, the aim is to increase the number of households reached by TeliaSonera’s fiber services from 1.1 million to 1.9 million between 2014 and 2018.

The board of directors have decided that the dividend policy is replaced by a target to distribute an annual dividend of at least SEK 3 per share for the fiscal years 2014 and 2015. The company shall continue to target a solid investment grade long-term credit rating (A- to BBB+). The board of directors final dividend proposal will be announced in the Year-end Report 2014 which will be released on January 29, 2015.

TeliaSonera reiterates its guidance for the full year 2014: “Net sales in local currencies, excluding acquisitions and disposals, are expected to be slightly below the level in 2013. Currency fluctuations may have a material impact on reported figures in Swedish krona. The EBITDA margin, excluding non-recurring items, is expected to be around the same level as in 2013. The CAPEX-to-sales ratio is expected to be approximately 15 percent, excluding license and spectrum fees.”