TeliaSonera January-June 2011

TeliaSonera January-June 2011

A united TeliaSonera shows stronger profitability

Second quarter

  · 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.

First half

  · 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.”

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/)