Interim Report January-March 2013
Improved margin and cash flow
First quarter summary
- Net sales in local currencies and excluding acquisitions decreased 0.9 percent. In reported currency, net sales decreased 4.5 percent to SEK 24,542 million (25,693).
- The addressable cost base in local currencies and excluding acquisitions decreased 1.0 percent. In reported currency, the addressable cost base decreased 6.0 percent to SEK 6,989 million (7,432).
- EBITDA, excluding non-recurring items, decreased 0.5 percent in local currencies and excluding acquisitions. In reported currency, EBITDA, excluding non-recurring items, decreased 3.9 percent to SEK 8,509 million (8,852). The EBITDA margin, excluding non-recurring items, increased to 34.7 percent (34.5).
- Operating income, excluding non-recurring items, decreased 3.7 percent to SEK 6,628 million (6,882).
- Net income attributable to owners of the parent company decreased 0.3 percent to SEK 4,108 million (4,122).
- Earnings per share amounted to SEK 0.95 (0.95).
- Free cash flow increased to SEK 2,414 million (2,193), mainly due to lower cash CAPEX.
- During the quarter the number of subscriptions decreased by 0.8 million in the consolidated operations and remained unchanged in the associated companies. The total number of subscriptions was 182.1 million.
- Group outlook for 2013 is unchanged.
Comments by Per-Arne Blomquist,
President and CEO
“Our industry continues to go through a period of change where traditional business models are being challenged by new customer behavior. The competitive situation remains demanding on many markets and puts pressure on overall revenue streams. In this environment, we deliver a quarter with both improved margins and stronger cash flow.
In the first quarter, revenues in local currencies declined by 0.9 percent compared to the same period last year. Our business in Eurasia continued to perform well and delivered once again double digit growth with continued pick-up in data revenues. Mobility Services were impacted by major reductions in regulated interconnect rates, while Broadband Services experienced higher pressure on traditional voice revenues and were also impacted by slower roll-out of fiber due to cold weather conditions.
In March, we took an important step on the Swedish market. As one of the first operators in Europe we offer consumers the opportunity to connect multiple mobile devices to one subscription, including unlimited calls and text messages, with the possibility to share data volumes within certain buckets. In our view, this is an innovative and attractive proposal for the customer at the same time as we move towards a more sustainable business model in a world where the consumption of data is increasing heavily.
In order to maintain our ability to invest in future growth, it is essential to manage our cost base in a prudent way. We have continued to put significant emphasis on implementing the efficiency measures initiated at the end of last year. There were effects within Mobility Services already in the quarter, while within Broadband Services they will come in the latter part of the year. We remain determined to bring total costs down by SEK 2 billion net over a two year period.
During the quarter, we finalized the strategic review of our Spanish operator Yoigo. In early April, we announced that the sales process was terminated and that our intention is to continue developing the business. In the first quarter, Mobility Spain reported 19 percent revenue growth and a positive margin trend, highlighting its future potential.
In early February, the Swedish law firm Mannheimer Swartling released its report on TeliaSonera’s investments in Uzbekistan. The firm did not find any substance to the allegations that we committed bribery or participated in money laundering. However, it directed serious criticism at TeliaSonera for shortcomings in the investment process. Over the past few years, we have put significant effort into improving our processes and will continue to strengthen our way of working even further.
Sustainability is of high priority, with special focus on privacy, freedom of expression and anti-corruption. In March, TeliaSonera and the other members of the Telecommunication Industry Dialogue signed guiding principles on telecommunication and freedom of expression and privacy. The principles provide guidance on how we should act to respect these basic human rights. We also entered into a two-year collaboration with the Global Network Initiative (GNI) to develop and expand this initiative further.”
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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, 2013.