Interim Report January-September 2013

Improved profitability and flat organic revenues
Third quarter summary

  · Net sales in local currencies, excluding acquisitions and disposals, were
stable. In reported currency, net sales decreased 1.8 percent to SEK 25,381
million (25,842).
  · The addressable cost base in local currencies, excluding acquisitions and
disposals, decreased 3.9 percent. In reported currency, the addressable cost
base decreased 5.4 percent to SEK 6,760 million (7,146).
  · EBITDA, excluding non-recurring items, increased 3.8 percent in local
currencies, excluding acquisitions and disposals. In reported currency, EBITDA,
excluding non-recurring items, increased 1.5 percent to SEK 9,419 million
(9,283). The EBITDA margin, excluding non-recurring items, increased to 37.1
percent (35.9).
  · Operating income, excluding non-recurring items, increased 12.3 percent to
SEK 7,721 million (6,878). Operating income increased 5.4 percent to SEK 7,130
million (6,762).
  · Net income attributable to owners of the parent company increased 15.1
percent to SEK 4,641 million (4,032).
  · Earnings per share increased to SEK 1.07 (0.93).
  · Free cash flow was SEK 7,308 million (3,825), mainly explained by dividends
from MegaFon net of taxes of SEK 1,940 million (0) and positive changes in
working capital.
  · Group outlook for 2013 is unchanged.

Nine-month summary

  · Net sales in local currencies, excluding acquisitions and disposals,
decreased 0.2 percent. In reported currency, net sales decreased 3.4 percent to
SEK 75,197 million (77,829).
  · Net income attributable to owners of the parent company decreased 1.7
percent to SEK 12,780 million (13,007) and earnings per share to SEK 2.95
(3.00).
  · Free cash flow was SEK 14,184 million (20,806). Free cash flow excluding
dividends from MegaFon net of taxes was SEK 12,244 million (9,080).

Comments by Johan Dennelind,
President and CEO

“In the third quarter, organic revenues stayed flat and margins improved further
compared to the corresponding period last year. Revenues continued to be
impacted by difficult economic environment in our markets and lower regulated
mobile termination rates, while profitability was supported by a further
reduction in the cost base.

Demand for mobile data remains strong and our new data centric pricing models
continue to gain traction across Scandinavia. It is particularly encouraging to
report positive billed revenue growth in all three markets where these price
plans have been introduced, reinforcing our view that we are on the right track.

The rapid development of our industry continues and legacy is being replaced
with new technologies and business models. We maintain an active role in this
migration by expanding high speed internet via fiber and 4G. Our ambition is to
offer the best customer experience through high-quality networks and it is vital
for our investment decisions that we can rely upon a transparent and predictable
regulatory framework.

My initial observations as new CEO are that TeliaSonera has a solid asset base
with a diversified product portfolio, attractive footprint, strong brands and
competent people. The mix of mature and emerging markets give us a robust
foundation. However, in recent years our position has weakened in too many of
our markets and it is essential to strengthen our competitiveness going forward.
In a fast changing environment we have to understand our customers’ requirements
and further develop a company culture that encourages agility and innovation.

In order to compete effectively and to support long term profitability, it is
crucial to have an efficient organization and an appropriate cost base. We have
to reduce complexity to enable an effective way of working, accelerate decision
making and ensure our employees stay skilled and motivated.

It is obvious that managing our business in a sustainable way is vital to our
reputation and future success. We need to further develop and strengthen our
governance as well as secure common values within the group. It is important for
all our stakeholders that we act responsibly and we also want to make sure our
partners through the whole value chain of TeliaSonera behave in a similar
responsible way. By this we can create a sustainable company presence in all our
markets.

Since I took over as CEO, some measures to strengthen governance have been
taken. A new compliance function has been established with direct reporting line
to me. Furthermore, a new CEO office function will support the Eurasia review
the board has initiated, as well as leading the program for TeliaSonera’s
journey ahead. In addition, a new group function for Strategy, Mergers &
Acquisitions and Innovation will enable a holistic view on TeliaSonera’s future
development.

The next phase of our journey has just begun and based on the performance for
the first nine months we reiterate our full year 2013 outlook.”


Questions regarding the reports
TeliaSonera AB
Investor Relations
SE–106 63 Stockholm, Sweden
Tel. +46 8 504 550 00
Fax +46 8 611 46 42
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 17, 2013.