TeliaSonera January-March 2011

TeliaSonera January-March 2011

Strong margin improvement

  · Net sales in local currencies and excluding acquisitions increased
2.5 percent. In reported currency, net sales decreased 5.6 percent to
SEK 24,725 million (26,190).
  · The addressable cost base in local currencies and excluding
acquisitions increased 4.1 percent. In reported currency, the
addressable cost base decreased 3.9 percent to SEK 7,716 million
(8,031).
  · EBITDA, excluding non-recurring items, increased 5.3 percent in
local currencies and excluding acquisitions. In reported currency,
EBITDA, excluding non-recurring items, decreased 1.5 percent to SEK
8,812 million (8,945). The EBITDA margin, excluding non-recurring items
increased to 35.6 percent (34.2).
  · Operating income, excluding non-recurring items, decreased 2.6
percent to SEK 7,247 million (7,444).
  · Net income attributable to owners of the parent company decreased
1.6 percent to SEK 4,646 million (4,722) and earnings per share
decreased to SEK 1.04 (1.05). 
  · Free cash flow decreased to SEK 2,587 million (3,372), impacted by
higher paid taxes of SEK 0.9 billion.
  · During the quarter the number of subscriptions grew by 2.1 million
in the consolidated operations while subscriptions in the associated
companies decreased by 1.2 million. The total number of subscriptions
was 158.0 million.
  · Group outlook for 2011 is revised from Year-end Report 2010. The
growth in net sales in local currencies and excluding acquisitions is
expected to be around 3 percent.

Comments by Lars Nyberg, President and CEO

“We successfully improved our margin during the first quarter although
growth in net sales fell somewhat short of our own expectations. Even
excluding the improved profitability in Spain, the EBITDA margin,
excluding non-recurring items, increased by almost one percentage point
compared to the corresponding quarter last year.

Some of the Nordic mobile markets showed lower growth compared to
previous quarters as a result of regulatory effects, less handset sales
and somewhat lower service revenues. In the Baltic countries, we are
still awaiting a recovery. In Spain, Yoigo continues to gain market
share and showed positive result for every month in the quarter.
Nevertheless, we had lower revenues from equipment sales than previously
and we also experienced lower growth in usage as a result of the weak
Spanish macroeconomic environment.

Eurasia continues to be our growth engine and in the first quarter we
surpassed 30 million subscriptions in our consolidated operations due to
a continued strong intake in Kazakhstan, Uzbekistan and Nepal. In
Broadband Services, we reached a milestone in April and we now have more
than one million TV subscriptions throughout our Nordic and Baltic
markets. The appetite for higher bandwidth to support HD-TV, online
gaming and on-demand services is virtually unlimited and we recently
announced that we will upgrade 800,000 broadband connections in Sweden
with VDSL2, allowing significantly higher speeds for our customers.

In Turkey, we have decided to take a more explicit standpoint to protect
our rights as a shareholder and to safeguard good corporate governance
in Turkcell. Therefore, we decided to take legal action against the
Chairman of the Board, as he has denied us our legal rights as a
minority shareholder. Further, I am also quite convinced that we will
come to some solution with regards to the complicated ownership
situation in Turkcell during this year.

TeliaSonera's financial position remains strong and we were pleased that
we could return an additional SEK 10 billion to our shareholders in
April through a public offering. We continue to look for new business
opportunities within or neighboring our existing footprint and have
publicly expressed our interest for Polkomtel in Poland. However, any
transactions are being carefully evaluated to meet our strategic and
financial criteria.

We have lowered our expectations on growth in net sales but our outlook
for improved EBITDA margin for 2011 remains, as the cost reduction
initiatives that the organization has identified will have effect during
the second half of this year.”

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 (http://www.teliasonera.com/)