Third Quarter Report, Jan-Sep 2001 Stockholm, 7 November 2001 - PowerPoint PPT Presentation

www.telia.com Third Quarter Report, Jan-Sep 2001 Stockholm, 7 November 2001

Higher growth Growth in core businesses + 13% Telia Mobile + 21% Telia Internet Services + 33% Telia International Carrier + 37% Telia Networks + 1% Telia AB, IR, 020-2001, eng 2

Improved profitability ! Underlying EBITDA increased 8% — the margin totaled 24% Q3 2000 Q3 2001 Mobile 23% 30% Networks 30% 35% Telia AB, IR, 020-2001, eng 3

Mobile " Sales growth 21% " Sales growth 21% " Underlying EBITDA margin up " Underlying EBITDA margin up from 23% to 30% from 23% to 30% Finland • UMTS license " Nordic synergies Sweden " Nordic synergies • GPRS launched • UMTS license " Ground laid for mobile data Norway " Ground laid for mobile data • GPRS launched growth • UMTS license growth • GPRS launched Denmark • UMTS license • GPRS planned launch Telia AB, IR, 020-2001, eng 4

Mobile Russia Growth Jan-Sep 2001 MegaFon (17.8% ) North West GSM (12.7% + 11,3% ) Finland through Telecominvest 460,000 * * + 207,000 Telia Mobile Finland 186,000 + 37,000 Estonia Sw eden Eesti Mobiililtelefon (24.5% ) 2 Telia Mobile Sweden 3,395,000 Total proportional num ber 376,000 * * + 138,000 of custom ers 5 .4 m illion 3 + 49,000 Norw ay Latvia 1 NetCom ASA 905,000 Latvijas Mobilais (24.5% ) + 55,000 319,000 * * Lithuania Denm ark + 49,000 Omnitel (27.5% ) Telia Mobile Denmark 351,000 462,000 * * + 54,000 + 153,000 Custom ers, Nordic countries 4,837,000 Custom ers, 1,617,000 + 284,000 Baltic states/ Russia + 458,000 * * total customers 1 Excl. 121,000 SP custom ers 2 Excl. 83,000 SP custom ers 3 Incl. SP customers Telia AB, IR, 020-2001, eng 5

Mobile Sweden Growth both in use and revenue per customer ARPU ( SEK) 446 439 436 500 432 426 426 419 418 415 394 375 Subscription 400 300 348 333 Total 330 331 314 306 304 303 303 280 273 200 Cash 100 123 125 121 119 109 108 106 108 101 101 96 0 Q3 Q3 Q3 1999 2000 2001 MoU ( m inutes) 176 175 200 170 167 164 162 160 Subscription 155 150 141 126 Total 129 126 126 128 100 125 123 124 121 117 117 115 Cash 68 64 64 62 61 58 58 54 52 50 49 0 Q3 Q3 Q3 Churn 7% 1999 2000 2001 Telia AB, IR, 020-2001, eng 6

Mobile Norway Growth both in use and revenue per customer ARPU (NOK) 567 534 528 600 496 486 485 487 460 Subscription 444 444 500 406 400 Total 300 337 341 327 320 325 317 305 308 301 292 289 200 Cash 100 152 147 142 136 127 128 124 118 119 115 107 0 Q3 Q3 Q3 1999 2000 2001 MoU (m inutes) 238 231 225 223 250 209 210 198 196 190 182 200 Subscription 161 150 147 Total 146 145 141 143 141 136 134 134 100 130 131 84 50 79 75 71 66 66 Cash 63 62 60 56 57 0 Q3 Q3 Q3 Churn 34% 1999 2000 2001 Telia AB, IR, 020-2001, eng 7

Mobile Continued growth for SMS Share of sales Q3 2001 Share of sales Q3 2001 (million messages) Sweden 4% , Norway 15% Sweden 4% , Norway 15% 700 Norway 2001 Norway 2000 350 Sweden 2001 Sweden 2000 0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Telia AB, IR, 020-2001, eng 8

Mobile New data services launched SMS ! MobileQuiz ! InfoBrain ! QuickDeal GPRS ! Telia Mobile OnLine ! Telia Mobile Access ! Telia Mobile InTouch ! NetCom MobiMail W-LAN ! HomeRun “hot-spots” Ongoing testing of MMS Telia AB, IR, 020-2001, eng 9

Internet Services Strong growth in broadband customers (‘000) 180 150 120 90 60 30 0 1999 2000 Q1 2001 Q2 2001 Q3 2001 Skanova High-speed Internet via cable ADSL/ LAN Sweden Denmark Telia AB, IR, 020-2001, eng 10

Internet Services Sales growth + 33% Sales growth for access services + 51% ! (customers) 800,000 700,000 Narrowband Internet access: Narrowband Internet access: 600,000 37% market share in Sweden 37% market share in Sweden 500,000 400,000 300,000 Broadband: 200,000 Broadband: 55% market share in Sweden 55% market share in Sweden 100,000 0 1997 1998 1999 2000 2001 30 Sept Telia AB, IR, 020-2001, eng 11

International Carrier Sales growth + 37% Robust sales growth in ! ! capacity + 185% ! IP traffic + 228% ! infrastructure + 271% ! voice -1% Telia AB, IR, 020-2001, eng 12

International Carrier Earnings weakened Actions Reinforcing sales and ! marketing resources Continued market turbulence ! Further tightening of the ! credit policy Additional reserves for bad ! debt expense Replacing leased lines ! Increased costs for leased with own infrastructure ! capacity for new customers Renegotiating operating ! Increased costs for operation ! agreements with a & maintenance smaller number of major vendors New organization ! Telia AB, IR, 020-2001, eng 13

International Carrier Rapid network buildout Rapid network buildout Scope of the network: Scope of the network: Infrastructure buildout 30 Sep 2001 Infrastructure buildout 30 Sep 2001 Total fiber-optics in km (in use) 29,500 Total fiber-optics in km (in use) 29,500 Ducts km (Europe) 8,000 Ducts km (Europe) 8,000 PoPs (total) 81 PoPs (total) 81 Telia AB, IR, 020-2001, eng 14

Networks ! Mature fixed network operations show + 1% sales growth ! Good improvement in profitability — underlying EBITDA + 15% ! Margin strengthened from 30% to 35% ! More stable prices Telia AB, IR, 020-2001, eng 15

Networks Retail market Residential customers Business customers Subscription fees raised Increased sales for value-added ! ! from March 1 services + 11% Cost management and New service - Telia City Connect ! ! increased efficiency Maintained prices and increased ! Development of value- efficiency ! added services Streamlining of customer ! services Telia AB, IR, 020-2001, eng 16

Networks Wholesale market ! Sales growth + 17% ! Demand for leased capacity + 25% ! Powercom supplements Telia’s business and network ! Telehost Telia AB, IR, 020-2001, eng 17

Networks Continued streamlining ! Product portfolio ! Sales costs ! Capital productivity ! Quality improvements Stable market shares and improved profitability Telia AB, IR, 020-2001, eng 18

Refine and focus strategy Divestitures/ partial divestitures 2000-2001 Telia I PO IN good company AB Starman Kaabel- S m å l a n d s b ö r s e n 5 1 % o f T e l e f o s Eniro shares televisiooni AS D a t a A B c o m p a n i e s Telia Real E i r c o m Svefo AB T e l i a A c a d e m ( E i r c e l l ) y A B D R S Estate Telia Contracting S y s t e C o m b i n a t o r I T A B S c a n d i n a m & T e s s v i a Telia Iberia Telia Kompetens T e l i a T r a d O S e r v i c e A / S i n g A B T e l i a F n l i n e ( l i s t e d ) i n l a n d Provision, Orbiant S i Telia Konferens E n i r o ( l i s t . M o b i l A l t i t u n e d ) P a n o r a m a P o l s k a Eircom TII + Satellit Cap.gain Capital gain GSEK 6.4 Capital gain GSEK 3.2 GSEK 2.6 Q1-Q2 Q3 Q4 Q1 Q2 Q3 Q4 2000 2000 2000 2001 2001 2001 2001 No. of employees No. of employees No. of employees No. of employees 17,000 32,000 17,000 32,000 Telia AB, IR, 020-2001, eng 19

The Telia Group Growth + 7% , Growth + 7% , Core business + 13% Net sales Core business + 13% Quarter (MSEK) Rolling 12 month (MSEK) 16,000 58,000 1 4 ,4 3 1 1 3 ,4 8 7 12,000 54,000 8,000 50,000 4,000 46,000 0 42,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 99 99 99 99 00 00 00 00 01 01 01 Telia AB, IR, 020-2001, eng 20

The Telia Group Growth + 8% , Growth + 8% , Core business + 15% Underlying EBITDA Core business + 15% Quarter (MSEK) Rolling 12 month (MSEK) 4,000 14,500 3 ,4 2 0 3 ,1 8 0 14,000 3,000 13,500 2,000 13,000 12,500 1,000 12,000 0 11,500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 99 99 99 99 00 00 00 00 01 01 01 Telia AB, IR, 020-2001, eng 21

The Telia Group Underlying EBITDA margin Rolling 12 month 28% 26% 24% 22% 20% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1999 1999 2000 2000 2000 2000 2001 2001 2001 Telia AB, IR, 020-2001, eng 22

Effects of the refine and focus strategy (Equity) Underlying EBITDA Sales (MSEK) (MSEK) 5,000 5,000 4,487 4,000 4,000 3,000 3,000 2,392 2,000 2,000 1,046 * ) 668 1,000 1,000 254 * ) 188 0 0 9m 2000 9m 2001 31/ 10 2001 9m 2000 9m 2001 31/ 10 2001 retained retained companies companies * ) Excluding the Orbiant group Telia AB, IR, 020-2001, eng 23

Mobile Financial overview Growth Q3 00 # Q3 01 Growth Q3 00 # Q3 01 21% 21% Sales Quarter (MSEK) 5,000 4 ,4 3 9 4,000 3 ,6 6 4 3,000 2,000 1,000 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Telia AB, IR, 020-2001, eng 24

Mobile Growth Q3 00 # Q3 01 Growth Q3 00 # Q3 01 53% Underlying EBITDA 53% Quarter (MSEK) Margin 1,600 35% 1 ,4 4 8 1,400 30% 1,200 25% 9 4 4 1,000 20% 800 15% 600 10% 400 5% 200 0 0% Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Telia AB, IR, 020-2001, eng 25

Internet Services Growth Q3 00 # Q3 01 Growth Q3 00 # Q3 01 33% Sales 33% Quarter (MSEK) 1,000 7 9 7 800 6 0 1 600 400 200 0 Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Telia AB, IR, 020-2001, eng 26