23-7-2013 — /EuropaWire/ — Positive organic sales growth and higher margin
Second quarter summary
- Net sales in local currencies, excluding acquisitions and disposals, increased 0.4 percent. In reported currency, net sales decreased 3.9 percent to SEK 25,274 million (26,294).
- The addressable cost base in local currencies, excluding acquisitions and disposals, decreased 4.1 percent. In reported currency, the addressable cost base decreased 6.6 percent to SEK 7,165 million (7,672).
- EBITDA, excluding non-recurring items, increased 3.3 percent in local currencies, excluding acquisitions and disposals. In reported currency, EBITDA, excluding non-recurring items, decreased 1.2 percent to SEK 8,928 million (9,034). The EBITDA margin, excluding non-recurring items, increased to 35.3 percent (34.4).
- Operating income, excluding non-recurring items, decreased 2.8 percent to SEK 7,085 million (7,286). Operating income decreased 10.8 percent to 6,283 million (7,044), including non-recurring items of SEK -802 million (-242).
- Net income attributable to owners of the parent company decreased 16.9 percent to SEK 4,031 million (4,852).
- Earnings per share decreased to SEK 0.93 (1.12).
- Free cash flow was SEK 4,462 million (3,062, excluding dividends from MegaFon net of taxes of SEK 11,726 million).
- Group outlook for 2013 is unchanged.
First half summary
- Net sales in local currencies, excluding acquisitions and disposals, decreased 0.3 percent. In reported currency, net sales decreased 4.2 percent to SEK 49,816 million (51,987).
- Net income attributable to owners of the parent company decreased 9.3 percent to SEK 8,139 million (8,974) and earnings per share to SEK 1.88 (2.07).
- Free cash flow was SEK 6,876 million (5,255, excluding dividends from MegaFon net of taxes of SEK 11,726 million).
Comments by Per-Arne Blomquist,
President and CEO
“In the second quarter, organic revenue growth turned positive and margins improved further. TeliaSonera continues to lead the industry change in our markets by shifting away from minute based voice pricing, to new data centric models. In addition, we maintain focus on securing our long term profitability by implementing efficiency measures and investing for the future in 4G and fiber.
In Mobility Services, revenue pressure eased somewhat and margins strengthened, supported by higher billed revenue and reduced costs. It is particularly encouraging that our Danish operations reported an increase in billed revenues, as the market has been challenging for years. However, lower regulated interconnect rates continued to put pressure on revenues in all markets. In Broadband Services, the fiber roll-out regained momentum and in Sweden customer demand currently exceeds our ability to deliver. The cost base decreased, but not enough to fully compensate for the revenue decline. In Eurasia, organic revenue growth remained around 14 percent, supported by increasing data consumption and subscription growth. Margins continued to improve as a result of further cost savings. In Nepal, we reached a new milestone by passing 10 million subscriptions.
In Sweden, Norway and Denmark we launched new mobile offers to consumers, with flat fees for voice and messaging service together with bucket priced data related to usage. In Sweden, our consumer offer continued to attract more than 20 percent of new sales and a similar package is also available for the SME segment. In total, we have gained about 180,000 new subscriptions on the new price plans in Scandinavia and the initial findings are promising.
Network quality and capacity are crucial to meet the exploding demand for data; therefore we will further invest in 4G and mobile coverage, expand within fiber and selectively target acquisitions of existing fiber networks in our home markets. We will significantly expand our 4G network in Sweden, targeting 92 percent geographic coverage in the next two years, utilizing existing 2G/3G infrastructure to ensure a cost efficient roll-out. Coverage is prioritized across the group and our Estonian operation extended its 4G network significantly in the quarter and has currently the best national 4G coverage in Europe.
We continue to implement our cost savings program launched at the end of last year and approximately 1,050 of the targeted 1,800 employees have been given notice year to date. Savings are expected to be further visible in the second half of this year and we remain committed to reducing the cost base by SEK 2 billion net by the end of 2014.
The ownership disputes in our associated company Turkcell continues with two failed AGMs in the quarter. We welcome the decision on July 9, by the Privy Council, stating the terms under which Çukurova can recover the disputed shares in Turkcell Holding from Altimo, an important step in resolving the deadlock. It is crucial that corporate governance is restored in Turkcell and we fully support a resumption of dividend payments.
The above mentioned activities prove that we are executing on our strategy, targeting the best customer experience, high-quality networks and cost-efficient operations. Based on the performance for the first six months, we reiterate our full year 2013 outlook.”
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 July 17, 2013.