REG-TeliaSonera AB TeliaSonera Interim Report January – September 2015 <Origin Href="QuoteRef">TLSN.ST</Origin>

Telia ABAnnouncement

05/01/2016 12:39

      TeliaSonera Interim Report January  September 2015    
      Solid core business    
THIRD QUARTER SUMMARY
        Net sales increased 6.3 percent to SEK 27,029 million (25,417). Net         sales in local currencies, excluding acquisitions and disposals,         increased 2.4 percent. Service revenues in local currencies, excluding         acquisitions and disposals, decreased 0.5 percent.      
        EBITDA, excluding non-recurring items decreased 0.9 percent in local         currencies, excluding acquisitions and disposals. In reported         currency, EBITDA, excluding non-recurring items, increased 3.1 percent         to SEK 9,730 million (9,439). The EBITDA margin, excluding         non-recurring items, decreased to 36.0 percent (37.1).      
        Operating income, excluding non-recurring items, increased 3.0 percent         to SEK 7,486 million (7,266).      
        Net income attributable to owners of the parent company increased 12.7         percent to SEK 4,589 million (4,073) and earnings per share to SEK         1.06 (0.94).      
        Free cash flow decreased to SEK 4,699 million (6,387), mainly         explained by lower dividend from MegaFon as the company intends to pay         out dividends in two tranches in 2015.      
        Group outlook for 2015 is changed  EBITDA excluding non-recurring         items, in local currencies, excluding acquisitions and disposals, is         expected to be slightly below the level in 2014.      
NINE-MONTH SUMMARY
        Net sales increased 7.9 percent to SEK 80,186 million (74,328). Net         sales in local currencies, excluding acquisitions and disposals,         increased 1.8 percent. Service revenues in local currencies, excluding         acquisitions and disposals, decreased 1.0 percent.      
        Net income attributable to owners of the parent company was unchanged         at SEK 11,561 million (11,563) and earnings per share at SEK 2.67         (2.67).      
        Free cash flow increased to SEK 13,859 million (11,412), mainly due to         dividends from Turkcell.      
      Comments by Johan Dennelind,
President and CEO    
      In the third quarter, there was an encouraging performance in our core       operations in Sweden and Europe with both regions turning to positive       organic EBITDA growth. Eurasia remained impacted by macro-economic       pressure and high competition in parts of the footprint, particularly       affecting our operations in Kazakhstan while performance in Nepal       remained strong.    
      In Sweden, we continue to execute on our superior network strategy and       expect to invest more than SEK 6 billion this year, to a large extent       related to fiber and 4G. The positive effects are gradually becoming       visible and organic service revenue growth improved to 1 percent,       supported by higher ARPU in mobile, broadband and TV together with high       number of fiber deliveries. Growth in the consumer segment remained       healthy and pressure in enterprise eased slightly in the quarter. As a       result of higher service revenues and good cost control, the EBITDA       margin increased by almost 1 percentage point compared to the       corresponding period last year.    
      The integration of the acquired Tele2 business in Norway is well on       track. Overall performance was solid with good organic growth and       continued support from synergies. On a further positive note, our       operations in all three Baltic countries delivered higher profits in the       quarter. We continue to develop our customer propositions in the region,       which was recently highlighted by our announced business combination in       Lithuania between Teo and Omnitel.    
      In early September, we announced the withdrawal of the proposed merger       with Telenor in Denmark as the parties were not able to agree with the       European Commission on the merger conditions. It is still our view that       returns remain insufficient and we will continue to seek ways to improve       profitability in our Danish operation.    
      The overall performance in Eurasia was impacted by increased margin       pressure in Kazakhstan. Price competition is fierce in the country and       profitability was also affected by increased interconnect costs due to       higher off-net volumes following recent product launches. We have       undertaken actions to mitigate the impact but the expectation is that       the trends will continue short term. Our business in Nepal managed the       impact of the earthquake earlier this year in an impressive way and       maintained solid performance in the quarter.    
      We continue to shape TeliaSonera for the future and further outlined our       priorities by the recent decision to increase focus on our operations in       Europe and Sweden and reduce the presence in Eurasia. In the past two       years, we have put a lot of effort into improving the Eurasian       operations, particularly from a corporate governance and sustainability       perspective. In our view, these units are now in better shape and can be       further developed by new owners. The process to leave the region has       already commenced and we will continue to make updates as we progress.    
      Looking ahead, we expect both Region Sweden and Europe to show further       progress in the fourth quarter, but that the challenges will remain in       Eurasia, accentuated by Kazakhstan. As a result, we fine-tune our       full-year outlook and expect EBITDA, on a local organic basis to be       slightly below last years level, and foresee CAPEX at around SEK 17       billion. The outlook excludes the synergy expectations for Norway which       we raised in the previous quarter to SEK 700 million for 2015 with a run       rate of SEK 1 billion when fully implemented in 2016.    
      Stockholm, October 20, 2015    
Johan Dennelind
President and CEO
Questions regarding the reports
TeliaSonera AB
www.teliasonera.com/investors
Tel.       +46 8 504 550 00
www.teliasonera.com
      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 October 20, 2015.    
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