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  1. 1. Per-Arne Blomquist Executive Vice President and CFO
  2. 2. TeliaSonera AB (A3/A-) - strong business <ul><li>Attractive industry with high barriers to entry </li></ul><ul><li>Success based on providing high quality networks and first class services </li></ul><ul><li>Unique position in the Nordic and Baltic region </li></ul><ul><li>Well positioned in high growth emerging markets </li></ul>
  3. 3. Mobility Services - Nordic and Baltic leadership Subscriptions, September 30, 2008 # Market position (TeliaSonera estimates) #1 #1 #1 #1 #1 #3 #2 Start-up Lithuania (Omnitel, Ezys) Mobile subscriptions 1,967,000 Finland (Sonera, TeleFinland) Mobile subscriptions 2,631,000 Estonia (EMT, Diil) Mobile subscriptions 778,000 Latvia ( LMT, OKarte, Amigo) Mobile subscriptions 1,035,000 Norway (NetCom, Chess) Mobile subscriptions 1,580,000 Spain (Yoigo) Mobile subscriptions 756,000 Sweden (Telia, Halebop) Mobile subscriptions 5,229,000 Denmark (Telia, Call me, dlg) Mobile subscriptions 1,474,000
  4. 4. Broadband Services - Nordic and Baltic leadership # = Market position #2 Norway (NextGenTel) Broadband subscriptions 176,000 IPTV subscriptions 10,000 Sweden (Telia) Broadband subscriptions 1,107,000 Fixed subscriptions 4,084,000 IPTV subscriptions 320,000 Denmark (Telia) Broadband subscriptions 184,000 Fixed subscriptions 231,000 Cable TV subscriptions 209,000 IPTV subscriptions 1,000 Finland (Sonera) Broadband subscriptions 479,000 Fixed subscriptions 446,000 Cable TV subscriptions 176,000 Estonia (Elion) Broadband subscriptions 172,000 Fixed subscriptions 387,000 Cable TV subscriptions 4,000 IPTV subscriptions 71,000 Latvia (Lattelecom, ownership 49% ) Broadband subscriptions 172,000 Fixed subscriptions 602,000 Lithuania (TEO) Broadband subscriptions 287,000 Fixed subscriptions 773,000 IPTV subscriptions 48,000 # Market position (TeliaSonera estimates) Subscriptions, September 30, 2008 #2 #1 #1 #1 #1 Among three major
  5. 5. Eurasia - strong growth potential Subscriptions, September 30, 2008 * Subscriptions, August, 2008 ** Subscriptions, June, 2008 Russia (MegaFon, ownership 43.8% ) Mobile subscriptions 41,740,000 Turkey (Turkcell, ownership 37.3% ) Mobile subscription** 35,400,000 Ukraine (Life:-), TKC ownership 54.2% ) Mobile subscriptions** 10,000,000 #3 #3 #2 #2 #1 #1 #1 #1 #1 #3 # Market position (TeliaSonera estimates) #2 #4 #3 Azerbaijan (Azercell) Mobile subscriptions 3,395,000 Georgia (Geocell) Mobile subscriptions 1,456,000 Kazakhstan (K’cell) Mobile subscriptions 7,018,000 Moldova (Moldcell) Mobile subscriptions 529,000 Tajikistan ( Indigo & Somoncom) Mobile subscriptions 954,000 Uzbekistan (UCell) Mobile subscriptions 2,056,000 Nepal (Mero Mobile) Mobile subscriptions* 1,600,000 Cambodia (Star-Cell) Mobile subscriptions* 97,500
  6. 6. Capital structure and dividend policy <ul><li>Target a solid investment grade long-term credit rating (A- to BBB+) </li></ul><ul><li>TeliaSonera’s dividend policy is to distribute at least 40% of net income attributable to shareholders of the parent company </li></ul><ul><li>Excess capital shall be returned to shareholders, after the BoD has taken into consideration the company’s cash at hand, cash flow projections and investment plans in a medium term perspective, as well as capital market conditions </li></ul>
  7. 7. Interim Report January - September, 2008
  8. 8. Growing sales and strong EBITDA <ul><li>Q3 2008 in brief </li></ul><ul><li>Net sales SEK 25,817 million (24,798) </li></ul><ul><ul><li>In local currencies +3.3% </li></ul></ul><ul><li>EBITDA* SEK 8,949 million (8,714) </li></ul><ul><ul><li>EBITDA-margin* 34.7% (35.1) </li></ul></ul><ul><li>EPS SEK 1.06 (1.20) </li></ul>* Excl . non-recurring items
  9. 9. Efficiency measures <ul><li>Improve operational efficiency </li></ul><ul><li>Stable EBITDA margin despite price pressure and changing product mix </li></ul><ul><li>Half way towards personnel reductions of 2,900 </li></ul><ul><li>Focus on net savings, per business area and business unit </li></ul><ul><li>Gross savings effect for 2008 above SEK 1.5 billion compared to cost base 2007 </li></ul>
  10. 10. Growth opportunities <ul><li>Create leading market positions by organic growth and acquisitions </li></ul><ul><li>Grow business in fast-growing and profitable markets </li></ul><ul><ul><li>Market size, young and growing population </li></ul></ul><ul><ul><li>Low mobile penetration and high economic growth </li></ul></ul><ul><ul><li>Cultural fit and co-operation with strong local partners </li></ul></ul><ul><ul><li>Management expertise and resources </li></ul></ul><ul><ul><li>Geographical focus east, not west or south </li></ul></ul><ul><li>Controlling interests acquired in two mobile operators in Nepal and Cambodia </li></ul><ul><li>Considering different options for Spain going forward </li></ul>
  11. 11. Growing sales and strong EBITDA * Excluding non-recurring items ** Attributable to shareholders of the parent company -4.1 8,240 7,904 Operating income 162.3 -114 -299 Non-recurring items -1.8 8,354 8,203 Operating income* 35.1% 34.7% EBITDA* margin 2.7 8,714 8,949 EBITDA* -11.6 5,399 4,772 Net income** 5,078 13.5% 3,339 1.20 -335 24,798 Q3 2007 -44.3 6.8 -11.6 144.2 4.1 Change % -818 Financial items 2,829 Free Cash Flow 13.8% CAPEX-to-sales 3,567 CAPEX 1.06 EPS, SEK 25,817 Net sales Q3 2008 SEK million
  12. 12. Growing sales and strong EBITDA * Excluding non-recurring items ** Attributable to shareholders of the parent company -4.7 -1,023 -1,071 Non-recurring items 5.9 20,097 21,292 Operating income 1.2 13,207 13,367 Net income** 5.9 21,120 22,363 Operating income* 11,165 12.6% 8,994 2.94 -615 33.3% 23,813 71,423 Jan-Sep 2007 -42.6 25.3 1.2 137.7 3.6 5.7 Change % 24,682 EBITDA* -1,462 Financial items 6,410 Free Cash Flow 14.9% CAPEX-to-sales 11,272 CAPEX 2.98 EPS, SEK 32.7% EBITDA* margin 75,489 Net sales Jan-Sep 2008 SEK million
  13. 13. Net sales trend
  14. 14. EBITDA trend (excl. non-recurring items)
  15. 15. Statement of cash flows Q3 2008 -409 -542 Interest paid (net) 516 2,245 Change in cash & cash equivalents -3,683 -148 Cash flow from financing activities 4,199 2,393 Cash flow before financing activities -879 -436 Cash flow from other investing activities 5,078 2,829 Free cash flow -3,315 -3,581 Cash CAPEX 8,393 6,410 Cash flow from operating activities -349 -1,029 Changes in working capital and other items, net -174 103 Difference between paid/recorded pensions -11 -61 Payment of restructuring provisions -925 -1,010 Income taxes paid 1,547 - Dividends received from associated companies 8,714 8,949 EBITDA excluding non-recurring items Jul - Sep 2007 Jul - Sep 2008 SEK million
  16. 16. Key financials – Balance sheets Sep 30, 2008 Condensed consolidated balance sheets 216,702 235,647 T O T A L 7,802 6 8,799 5 Cash and cash equivalents Non-current assets held-for-sale 1,701 1,603 Interest-bearing receivables 20,881 22,319 Trade receivables, current tax assets and other receivables 1,168 1,262 Inventories 48,633 54,849 Investments in associated and joint ventures, deferred tax assets and other non-current assets 52,602 56,574 Property, plant and equipment 83,909 90,236 Goodwill and other intangible assets A S S E T S Dec 31, 2007 Sep 30, 2008 SEK million 216,702 235,647 T O T A L 26,952 26,643 Trade payables, current tax liabilities, short-term provisions and other current liabilities 2,549 8,710 Short-term borrowings 41,030 49,683 Long-term borrowings 2,366 2,312 Other long-term liabilities 16,748 24,163 Deferred tax liability, other long-term provisions 9,783 8,800 Minority interest 117,274 115,336 Shareholders’ equity E Q U I T Y & L I A B I L I T I E S Dec 31, 2007 Sep 30, 2008 SEK million
  17. 17. Outlook for 2008 unchanged <ul><li>Expected to show stable growth in the financial year 2008 compared to the previous year </li></ul><ul><ul><li>Jan-Sep 2008 +5.7% and in local currencies +5.2% </li></ul></ul><ul><li>TeliaSonera’s ambition for 2008 is to maintain the EBITDA- margin level of 2007, excl. non-recurring items, despite continued aggressive investments in future growth and in the quality of our networks and services </li></ul><ul><ul><li>Jan-Sep 2008 32.7% </li></ul></ul><ul><li>Is estimated to be somewhat higher than in 2007, excluding the positive one-off items of approx. SEK 2.0 billion in 2007 and potential positive one-off items in 2008 </li></ul><ul><ul><li>Jan-Sep 2008 net income* approx. +3.7% </li></ul></ul><ul><li>Will be driven by continued investments in broadband and mobile capacity and is expected to be around SEK 15 billion in 2008 </li></ul><ul><ul><li>Jan-Sep 2008 approx. SEK 11.3 billion </li></ul></ul>Net sales EBITDA-margin Net income CAPEX *Attributable to shareholders of the parent company
  18. 18. Strong business amid global financial turmoil <ul><li>TeliaSonera has a strong balance sheet </li></ul><ul><li>Attractive and relatively non-cyclical industry with high barriers to entry </li></ul><ul><li>Regulatory intervention, intense competition and customer migration remain primary challenges </li></ul><ul><li>Unique position in the Nordic and Baltic region </li></ul><ul><li>Well positioned in high-growth emerging markets </li></ul><ul><li>Success based on providing high quality networks and first class services </li></ul>One of the best rated Telecom Operators in Europe
  19. 19. Krister Kylås Treasurer
  20. 20. Credit statistics – TeliaSonera Group TeliaSonera Estimates <ul><ul><li>(A) TeliaSonera estimates per Q3-2008 (rolling 12-months for EBITDA & Cash-Flow numbers) </li></ul></ul><ul><ul><li>1) Cash and cash equivalents excl. blocked funds (1.2) and excl. available unutilized committed revolving credit facilities (13.1) </li></ul></ul><ul><ul><li>2) Net debt + pensions (4.9) + non-standard adj. etc. (4) + operating lease adj. (13.4) (Moody’s approach) </li></ul></ul><ul><ul><li>3) Cash flow before change in working cap (24.9) + operating lease adj. (1.8 ) - aligned & unusual FFO (0.9) - ordinary dividend payment (common & minority) (9.5) (Moody’s approach) </li></ul></ul><ul><ul><li>4) Net debt + adj. incl. pensions & credit guarantees (6.9) + operating lease adj. (7) (S&P’s approach) </li></ul></ul><ul><ul><li>5) EBITDA, excl. non-recurring, adj. for operating lease effect etc. (+0.4) (S&P’s approach) </li></ul></ul><ul><ul><li>1.6X </li></ul></ul>2X Adjusted (Net Debt/EBITDA) 31.4 32.3 Adjusted EBITDA 5) 49.2 64.7 Adjusted Net Debt 4) S&P 34% 22% Adjusted (RCF/Net Debt) <ul><ul><li>19.1 </li></ul></ul>16.3 Adjusted Retained Cash Flow 3) <ul><ul><li>55.6 </li></ul></ul>73.1 Adjusted Net Debt 2) Moody’s <ul><ul><li>36.9 </li></ul></ul>50.8 Net Debt <ul><ul><li>6.7 </li></ul></ul>7.6 Cash & Liquidity 1) <ul><ul><li>43.6 </li></ul></ul>58.4 Gross Debt <ul><ul><li>2007 </li></ul></ul>Q3 2008 (A ) SEK billion
  21. 21. TeliaSonera pension obligations <ul><li>TeliaSonera uses defined benefit pension plans for most employees in Sweden, Finland & Norway. </li></ul><ul><li>TeliaSonera uses Government Bond yields when discounting the Swedish pension liabilities, which account for ca 85% of the total pension liabilities. </li></ul><ul><li>TeliaSonera pension funds are funding vehicles for those pension obligations, the remainder recorded on the balance sheet, covered via credit guarantees </li></ul><ul><li>Rating agencies would typically define our “pension gap” to be approx. up to SEK 4.9 billion (TeliaSonera est. as of Q3 2008) </li></ul>1.3 4.9 ” Pension gap” 0.2 0.2 Booked Pension Liability / Receivable (-) 1.5 5.1 Pension obligations less plan assets 19.3 18.1 Fair value of plan assets 20.8 23.2 Present value of pension obligation 2007 Q3 2008 est. SEK billion
  22. 22. TeliaSonera pension obligations (cont’d) <ul><li>Main reasons for the increase in the estimated “pension gap” by some SEK 3.6 billion (est. Q3 2008 vs. YE 2007) </li></ul><ul><ul><li>Decrease of discount rate for pension obligations </li></ul></ul><ul><ul><ul><li>Pension liabilities increased by SEK 2.4 billion </li></ul></ul></ul><ul><ul><li>Negative overall returns on assets (total approx. SEK 1.2 billion) </li></ul></ul><ul><ul><ul><li>Other assets (36%) return approx. -21% (shares, hedge funds and other (private equity & real estate)) </li></ul></ul></ul><ul><ul><ul><li>Fixed income (64%) return approx. +2.5% </li></ul></ul></ul><ul><ul><li>Based on estimated impact as of Q3-2008 the expected increase in pension costs (P/L) in 2009 would amount to some SEK 250-300 million, mainly consisting of amortization of actuarial losses etc. (outside the IAS-corridor) </li></ul></ul>TeliaSonera Group assumptions regarding pensions 3.2% 3.2% Expected salary increase 5.1% 5.1% Expected return on Plan Assets (Net) 4.6% 3.9% Discount rate YE 2007 Q3 2008 est.
  23. 23. TeliaSonera pension obligations (cont’d) <ul><li>TeliaSonera Group pension related risks </li></ul><ul><ul><li>Reduction of the discount rate for pension obligations by 100 bps from a level of 3.9%, would imply an increase in TeliaSonera Group pension liabilities, all else equal, by some SEK 3.6 billion </li></ul></ul><ul><ul><li>The expected impact on fixed income Plan Assets, for the same change in overall interest rates, would imply an increase in value, all else equal, by some SEK 1 billion </li></ul></ul><ul><ul><ul><li>“ Net impact” thus SEK 2.6 billion (other Plan Assets assumed yielding a zero return) </li></ul></ul></ul><ul><ul><li>“ Exogenous risks” include e.g. change in Life Expectancy </li></ul></ul>
  24. 24. TeliaSonera AB credit ratings (A3/A-) <ul><li>January 8, 2003, lowered long-term debt rating to A2 </li></ul><ul><li>Nov 1, 2006, outlook changed to Negative </li></ul><ul><li>Oct 30, 2007, lowered long- and short-term debt rating to A3 and P-2 respectively </li></ul><ul><li>Outlook: Stable </li></ul><ul><li>February 5, 2003, lowered long-term debt rating to A </li></ul><ul><li>October 28, 2005, lowered long-term debt rating to A- and short-term debt rating to A-2 </li></ul><ul><li>September 29, 2008, debt ratings confirmed </li></ul><ul><li>Outlook: Stable </li></ul>Moody’s (A3/P-2) Standard & Poor’s (A-/A-2) TeliaSonera AB long-term ratings migration history 2002-to-today One of the best rated Telecom Operators in Europe AA AA- A+ A A-
  25. 25. Debt maturity schedule (excl. lease and pension liabilities) Debt Maturing next 12 months (SEK million) Debt Portfolio Maturity Schedule (SEK billion), Oct 2008 & onwards TeliaSonera AB TeliaSonera Finland Oyj (formerly Sonera Corporation) September 30, 2008
  26. 26. Liquidity position, TeliaSonera Group Cash and cash equivalents, less blocked funds approx . SEK 7.6 billion* * On October 1, 2008, payment of approx. SEK 3.3 billion for the acquisitions in Nepal & Cambodia September 30, 2008 SEK 1.4 billion SEK 1.4 billion Apr 2013 Bilateral credit facility EUR 1 billion EUR 1 billion Dec 2011 Syndicated revolving credit facility SEK 2 billion SEK 2 billion Sep 2010 Bilateral credit facility Amount undrawn Size Maturity Committed bank lines
  27. 27. TeliaSonera’s funding strategy <ul><li>Liquidity position, as of September 30, 2008 </li></ul><ul><ul><li>Cash and cash equivalents, less blocked funds approx. SEK 7.6 billion </li></ul></ul><ul><ul><li>Available unutilized amount of committed bank credit lines approx. SEK 13.1 billion </li></ul></ul><ul><li>Primary means of external borrowing </li></ul><ul><ul><li>EMTN (€7 billion) 1) </li></ul></ul><ul><ul><li>Swedish FTN (SEK 12 billion) 2) </li></ul></ul><ul><ul><li>ECP (€1 billion) 3) </li></ul></ul><ul><li>TeliaSonera’s intention is to continue to refinance the outstanding Sonera (“TSF”) debt as well as any new financing required </li></ul>1) Approx. €4.9 billion utilized of the EMTN 2) Approx. SEK 4.8 billion utilized of the FTN (in the form of CP’s) 3) ECP programme presently unutilized
  28. 28. TeliaSonera’s funding strategy (cont’d) <ul><li>Base-case implies a focus on EMTN financing in the coming 12-15 months, primarily in the form of smaller sized EMTN-PP’s </li></ul><ul><li>Public Eurobond is an alternative, subject to market conditions. </li></ul><ul><li>Some continued utilisation of our CP programmes is likely for interim funding </li></ul><ul><li>SEK & EUR are the preferred currencies </li></ul><ul><li>Other currencies utilised for flexibility reasons, when deemed attractive </li></ul><ul><li>Expected total (EMTN) funding in 2009 </li></ul><ul><ul><li>Approx. EUR 750 million (equivalent) </li></ul></ul>
  29. 29. Strong business amid global financial turmoil <ul><li>TeliaSonera has a strong balance sheet </li></ul><ul><li>Attractive and relatively non-cyclical industry with high barriers to entry </li></ul><ul><li>Regulatory intervention, intense competition and customer migration remain primary challenges </li></ul><ul><li>Unique position in the Nordic and Baltic region </li></ul><ul><li>Well positioned in high-growth emerging markets </li></ul><ul><li>Success based on providing high quality networks and first class services </li></ul>One of the best rated Telecom Operators in Europe
  30. 30. Forward-looking statements Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of TeliaSonera.

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