Year-end Report January-December 0

Year-end Report January-December 2013

30 January 2014

Stable finish to a challenging year

Fourth quarter summary

Net sales in local currencies, excluding acquisitions and disposals, decreased 0.2 percent. In reported currency, net sales decreased 2.1 percent to SEK 26,503 million (27,069).

The addressable cost base in local currencies, excluding acquisitions and disposals, increased 2.8 percent. In reported currency, the addressable cost base increased 1.0 percent to SEK 7,466 million (7,394).

EBITDA, excluding non-recurring items, increased 0.1 percent in local currencies, excluding acquisitions and disposals. In reported currency, EBITDA, excluding non-recurring items, decreased 3.0 percent to SEK 8,728 million (9,002). The EBITDA margin, excluding non-recurring items, decreased to 32.9 percent (33.3).

Operating income, excluding non-recurring items, decreased 7.0 percent to SEK 7,100 million (7,636). Operating income decreased to SEK 4,560 million (7,826).

Net income attributable to owners of the parent company decreased 68.2 percent to SEK 2,190 million (6,880). Earnings per share decreased to SEK 0.51 (1.59).

Free cash flow was SEK 2,126 million (2,934).

Full year summary

Net sales in local currencies, excluding acquisitions and disposals, decreased 0.2 percent. In reported currency, net sales decreased 3.0 percent to SEK 101,700 million (104,898).

Net income attributable to owners of the parent company decreased 24.7 percent to SEK 14,970 million (19,886) and earnings per share decreased to SEK 3.46 (4.59).

Free cash flow was SEK 16,310 million (23,740). Free cash flow excluding dividends from MegaFon was SEK 14,370 million (12,014).

The Board of Directors proposes an ordinary dividend of SEK 3.00 per share (2.85), totaling SEK 13.0 billion (12.3) or 87 percent (62) of net income attributable to owners of the parent company.

Comments by Johan Dennelind,

President and CEO

It is clear that 2013 was an eventful and challenging year for TeliaSonera and the telecoms industry. Overall performance was impacted by modest economic growth, regulatory effects and rapidly changing customer behavior. In this environment, we are pleased to close the year with virtually flat organic revenues, a slight increase in our EBITDA margin, excluding non-recurring items, to 35.0 percent and solid free cash flow of SEK 16.3 billion.

In the fourth quarter, organic revenues stayed more or less unchanged year over year, while the EBITDA margin declined marginally. We continued to develop our data centric pricing models and invested further in network coverage and quality across our footprint. In addition, we secured crucial mobile spectrum in Finland and Norway. In Sweden, performance in the consumer segment was encouraging, with good demand for fiber within Broadband Services and positive contribution to billed revenue growth in Mobility Services. However, overall performance was adversely impacted by challenges in the enterprise area. In Finland, revenue pressure eased and profitability improved despite a difficult macroeconomic environment. Our Eurasian operations delivered another quarter with strong profitability, which is reassuring as we continue to form the business for the future.

Since I assumed responsibility in September, a key task has been to develop the strategic roadmap for TeliaSonera's journey ahead. An important step in this process was taken in December when we finalized our new operating model, a country based structure that will be launched on April 1, 2014. The aim with this change is to reduce overall complexity within the group, enhance customer focus and clarify general accountability.

Together with increased focus from group functions, the new structure will facilitate one common agenda across the company. We need to improve our competitive position going forward, particularly within the enterprise area, and expect to deliver further updates on this process and give more color to our overall journey ahead during the course of 2014.

Creating a sustainable business is a key part of our strategic initiatives and significant measures have been taken in order to strengthen corporate governance. The roll-out of our code of ethics and conduct training continues, with focus on anti-corruption. The board has adopted a new freedom of expression policy in Telecommunications, which will be a vital tool for us when we deal with these issues in the markets where we operate. We monitor the progress through our newly established GREC (Governance, Risk, Ethics and Compliance) Committee, where the entire Group Management is present.

As a result of our strong cash flow generation and solid financial position, the board proposes a dividend of SEK 3.00 for 2013, an increase by 5.3 percent, corresponding to a pay-out ratio of EPS of 87 percent.

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 January 30, 2014.

LINK:	http://www.teliasonera.com/en/newsroom/press-releases/2014/11154/year-...
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