Second quarter summary
- Former segment region Eurasia is reported as held for sale and discontinued operations. The mobile business Yoigo in Spain and the Sergel companies are reported as assets held for sale.
- Net sales in local currencies, excluding acquisitions and disposals, declined 1.0 percent. In reported currency, net sales declined 2.0 percent to SEK 21,130 million (21,558). Service revenues in local currencies, excluding acquisitions and disposals, declined 0.2 percent.
- EBITDA, excluding non-recurring items, increased 5.1 percent in local currencies, excluding acquisitions and disposals. In reported currency, EBITDA, excluding non-recurring items, increased 4.1 percent to SEK 6,389 million (6,136). The EBITDA margin, excluding non-recurring items, rose to 30.2 percent (28.5).
- Operating income, excluding non-recurring items, grew 20.1 percent to SEK 4,446 million (3,702).
- Total net income attributable to the owners of the parent fell 55.8 percent to SEK 1,439 million (3,258) and earnings per share to SEK 0.33 (0.75), impacted by effects in discontinued operations. Total net income rose 5.5 percent to SEK 3,902 million (3,698). · Full year outlook is unchanged.
First half summary
- Net sales in local currencies, excluding acquisitions and disposals, declined 1.0 percent. In reported currency, net sales declined 1.5 percent to SEK 41,524 million (42,147). Service revenues in local currencies, excluding acquisitions and disposals, declined 0.6 percent.
- Operating income, excluding non-recurring items, rose 19.6 percent to SEK 8,644 million (7,228).
- Total net income attributable to the owners of the parent fell 25.4 percent to SEK 5,205 million (6,973) and earnings per share to SEK 1.20 (1.61). Total net income rose 0.1 percent to SEK 7,812 million (7,808).
COMMENTS BY JOHAN DENNELIND, PRESIDENT & CEO
"The Nordic and Baltic region is very much the cradle of digitalization and has the potential to lead the way in the so called 4thindustrial revolution. As a New Generation Telco, Telia Company is well positioned to thrive and drive societies where we operate to take steps into the future, by bringing new and relevant services to both enterprise customers and consumers. We are excited about these opportunities!
While transforming the company we are focused on delivering solid results in our core operations. In the second quarter, organic service revenues were flat and EBITDA increased 5.1 percent year-on-year, propelled by higher earnings in 7 out of 8 markets.
In Sweden, service revenue growth stayed positive in the consumer segment, supported by our value loading strategy in mobile, together with further progress in broadband and TV. The new social media proposition launched in April generated good traction and contributed to a positive mobile subscription intake in the quarter. The fiber roll-out was further accelerated to meet pent up demand, particularly in the single-dwelling unit area. We now reach more than 1.4 million households, on track to our 1.9 million target by 2018. In the enterprise segment, we saw further progress in the SME & SoHo area on the back of our new service concept, but the challenging conditions remained in the large & public business. We are continuously broadening our ICT capabilities and aim to expand further via partnerships and M&A to drive differentiation and increase customer relevance.
We have put a lot of efforts in improving customer experience in Finland following a period of network disturbances. The situation stabilized in the quarter and mobile billed revenue growth was sustained at 4 percent, supported by upsell activities and positive net subscription intake. Performance in the Baltic region remained encouraging and all three countries delivered EBITDA growth in the quarter, backed by high customer demand for mobile data services.
In Norway, we continue to strengthen our customer proposition, recently highlighted by Telia’s top position in the biggest ever independent test of Norwegian mobile networks. We now deliver 4G high-speed mobile internet coverage to 98 percent of the country's population, almost two and half years earlier than the regulatory requirement.
In region Eurasia the remaining operations were still impacted by high competition and negative currency effects but we see some early signs of market stabilization.
In June, we hosted a capital market day reinforcing our strategic priorities. We can see improvements in the market share development and at the same time the execution of the growth and savings initiatives continue and we are on track to reach the cost reduction target of SEK 2 billion run-rate by the end of 2017.
In order to accelerate our efforts in areas close to the core, an independent unit has been established to capture new revenue streams and further develop existing and future partnerships.
We continue to optimize our portfolio in line with the ambition to increase focus on our operations in the Nordic and Baltic regions and new milestones have been reached in the past months. In June, we announced the divestments of our mobile business Yoigo in Spain and the non-core cash management operation Sergel. We continue to work hard to solve our issues surrounding Uzbekistan and to responsibly reduce our presence in region Eurasia.
Our performance has been solid in the first six months with good EBITDA growth, but we are facing tougher year-on-year comparisons in the second half of the year. As a result, we are reiterating the full year 2016 outlook and foresee EBITDA on a comparable basis to be in line or slightly above the level in 2015 for the continuing operations. CAPEX excluding license and spectrum fees for the continuing operations is expected to be SEK 14-15 billion.”
Telia Company 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 July 20, 2016.
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