20 July 2011
A united TeliaSonera shows stronger profitability
- Net sales in local currencies and excluding acquisitions increased 3.0 percent. In reported currency, net sales decreased 4.3 percent to SEK 25,894 million (27,065).
- The addressable cost base in local currencies and excluding acquisitions increased 3.5 percent. In reported currency, the addressable cost base decreased 3.5 percent to SEK 7,900 million (8,185).
- EBITDA, excluding non-recurring items, increased 6.5 percent in local currencies and excluding acquisitions. In reported currency, EBITDA, excluding non-recurring items, fell 0.9 percent to SEK 9,109 million (9,194). The EBITDA margin, excluding non-recurring items increased to 35.2 percent (34.0).
- Operating income, excluding non-recurring items, decreased 12.0 percent to SEK 6,974 million (7,923) due to lower income from associated companies.
- Net income attributable to owners of the parent company decreased to SEK 3,860 million (5,238) and earnings per share decreased to SEK 0.89 (1.17).
- Free cash flow decreased to SEK 1,413 million (3,930) due to higher cash CAPEX and lower dividends received from associated companies.
- During the quarter the number of subscriptions grew by 1.7 million in the consolidated operations while subscriptions in the associated companies decreased by 0.3 million. The total number of subscriptions was 159.4 million.
- Group outlook for 2011 remains unchanged.
- Net sales in local currencies and excluding acquisitions increased 2.8 percent. In reported currency, net sales decreased 5.0 percent to SEK 50,619 million (53,255).
- Net income attributable to owners of the parent company decreased to SEK 8,506 million (9,960) and earnings per share decreased to SEK 1.93 (2.22).
- Free cash flow decreased to SEK 4,000 million (7,302).
Comments by Lars Nyberg, President and CEO
“Growth in net sales improved compared to the first quarter and was achieved with signifi-cant improvement in profitability. The EBITDA margin, excluding non-recurring items, increased to 35.2 percent, an increase for the eleventh consecutive quarter on a rolling 12 month-basis. The decline in earnings per share can be explained by currency movements and weaker results from our associated companies.
The second quarter was an eventful quarter for TeliaSonera. In May, we took an important step in uniting the company by launching a common brand identity. The foundation of the new brand identity was launched already in 2009 in TeliaSonera’s Eurasian operations and has now been extended to the Nordic and Baltic countries.
The new brand identity reflects the combination of TeliaSonera’s international strength and strong local operations, as well as the heritage as one of the pioneers of the telecom industry. Our customers also get tangible benefits, as we in parallel lowered the price of data roaming in the Nordic and Baltic markets by as much as 90 percent. The new tariffs are well below the price caps on roaming as set by the European Commission for July 2012.
Within Mobility Services, Spain and Sweden continue to be the growth engines. Estonia and Latvia reported positive growth for the first time since early 2008. In the Danish mobile market, we announced a network sharing agreement with Telenor which will have a significant impact on both the customer experience and future network investments.
At our Investor Day in June, we revealed that we will invest more than SEK 8 billion in fiber until 2014, of which SEK 5 billion in Sweden. Our fixed networks remain a key strategic asset in order to meet customers’ demand for triple play and capacity hungry applications. It will be a selective roll-out to ensure a good return on investment. By the end of 2014, we aim to expand our coverage by fiber to 2.3 million connected homes in the Nordic and Baltic countries, of which almost 1 million in Sweden. At the same time, we continue our 4G roll-out and have now launched 4G services in all Nordic and Baltic countries. In Sweden, more than 200 municipalities will be covered with 4G by year-end.
In Eurasia, growth in net sales remained strong at 18 percent in local currencies. In Nepal, Ncell became the GSM market leader and revenues more than doubled compared to last year. In addition to increased penetration, we are very excited by the untapped potential in mobile data in Eurasia. In one year, mobile data as a percentage of total revenues has almost doubled and represents around 6 percent of sales in the region.
Our achievements for the first six months are well in line with our outlook for 2011 and we reiterate our guidance for net sales, profitability and investments.”
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