UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
July 30, 2004
TeliaSonera
(Exact name of registrant as specified in its charter)
Marbackagatan 11 S-123 86 Farsta, Sweden
(Address of principal executive offices)
0-30340
(Commission File Number)
Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F:
Form 20-F / x / Form 40-F / /
Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes / / No / x /
On July 28, 2004 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference
(c) Exhibit 99.1. Press release dated July 28, 2004
Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TeliaSonera
(Registrant) |
||
July 28, 2004
(Date) |
/s/ JAN HENRIK AHRNELL
Jan Henrik Ahrnell Vice President and General Counsel |
EXHIBIT 99.1
TeliaSonera January-June 2004 - Pro Forma 1)
TeliaSonera has, as previously announced, decided to apply IFRS 3 as of January 1, 2004, which means that goodwill amortization is discontinued.
Six-month period
Second quarter
Key Figures
In
millions, except percentages and per share data |
Apr-Jun |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 20,589 |
2,249 |
20,275 |
40,535 |
40,624 |
EBITDA excl. non-recurring items 3) | 7,327 |
800 |
8,070 |
14,527 |
15,632 |
Margin (%) | 35.6 |
35.6 |
39.8 |
35.8 |
38.5 |
Income from associated companies | 681 |
74 |
-620 |
1,266 |
-536 |
Operating income | 5,650 |
617 |
2,817 |
10,833 |
6,105 |
Operating income excl. non-recurring items | 5,063 |
553 |
4,036 |
9,885 |
7,324 |
Income after financial items | 5,489 |
600 |
3,121 |
10,384 |
5,893 |
Net income | 3,148 |
344 |
1,544 |
6,553 |
3,183 |
Earnings per share | 0.67 |
0.07 |
0.33 |
1.40 |
0.68 |
CAPEX | 2,625 |
287 |
2,059 |
4,383 |
3,735 |
Free cash flow | 3,591 |
392 |
5,155 |
5,785 |
9,052 |
Legal 1) | |||||
Net sales | 20,589 |
2,249 |
20,603 |
40,535 |
41,277 |
Net income | 3,148 |
344 |
2,983 |
6,553 |
4,592 |
Earnings per share | 0.67 |
0.07 |
0.64 |
1.40 |
0.99 |
1) Pro forma presentation:
Excluding Telias Finnish mobile operations and Swedish
cable TV
operations. Legal presentation: Including these operations
through May 31, 2003.
2) Convenience translation only, conversion rate SEK 1 = EUR 0.109233.
3) Non-recurring items, see table on page 29.
Comments from Anders Igel, President and CEO
"We have maintained or improved our market positions and reached an operating income of more than SEK 5 billion in a very competitive market with significant price pressure."
"During the next years, the Nordic and Baltic markets will face a transition period, where migration from fixed to mobile and Internet-based services is expected to accelerate. It is the ambition of TeliaSonera to take the lead in this transition and to handle the necessary changes within the group."
"The Orange deal in Denmark will give us critical mass to become a powerful contender to the two dominating players in the Danish market."
"It is satisfying to see that our strong financial position enables us to give higher returns to our many shareholders."
Dividend Policy and Capital
Structure
The Board of Directors has decided on a dividend policy for TeliaSonera to distribute 30-50 percent of net income.
In addition the Board of Directors has evaluated the future cash flows and balance sheet projections. Strong cash flows and the possible foreseeable acquisitions within current market footprint allow the company to return an additional SEK 30 billion to shareholders over the period 2005-2007. In case there are attractive investment opportunities available in addition to the current plan, this figure can be adjusted. The Board of Directors will evaluate the various means to return the money and present a proposal to a shareholders meeting.
Outlook
TeliaSoneras ambition is to strengthen and improve the operations and position within the current footprint and to maintain or increase market shares.
During the next years, the Nordic and Baltic markets are expected to have an overall good volume development in a very competitive environment with continued price pressure. Migration from fixed to mobile and Internet-based services will accelerate. During this transition period, total market sales growth will be limited. Longer term, however, we expect market growth to return to higher levels.
In the important growth operations of Eurasian Fintur, Russian MegaFon and Turkish Turkcell we expect the very strong growth to continue. We will prioritize enhancing value growth in these operations.
The price pressure in the international carrier market has been stronger than previously expected. Positive cash flow defined as EBITDA less CAPEX is not expected to be reached for the full year.
CAPEX for 2004 is expected to increase somewhat in comparison with last year.
Second Quarter Review of the Group
Maintained market position in tough competition
The synergies attained to date yield annual OPEX savings of SEK 1,432 million and annual CAPEX savings of SEK 539 million. The costs for implementing these achieved synergies totaled SEK 855 million.
In the second quarter 2004,
OPEX savings increased SEK 280 million and CAPEX savings
increased SEK 71 million compared with the same quarter
2003.
SEK in millions | Decided synergies |
Achieved synergies |
OPEX | ||
Product and service development | 572 |
419 |
IT systems and infrastructure | 369 |
135 |
Purchasing | 342 |
342 |
Network operations | 542 |
383 |
Corporate functions | 153 |
153 |
Total | 1,978 |
1,432 |
CAPEX | ||
Product and service development | 36 |
13 |
IT systems and infrastructure | 26 |
25 |
Purchasing | 491 |
491 |
Network operations | 15 |
10 |
Total | 568 |
539 |
Acquisition of Orange in Denmark
In the beginning of July, TeliaSonera signed an agreement with France Telecom to acquire its Danish subsidiary Orange A/S with 605,000 mobile customers in Denmark.
TeliaSonera will pay in cash an amount corresponding to an enterprise value of EUR 600 million less Orange Denmarks net debt on the closing date.
Closing will take place after approval by the European Commission and the Danish National IT and Telecom Agency and other necessary approvals.
Following the acquisition, TeliaSonera will be a powerful contender on the Danish mobile market with approximately 1.1 million mobile customers and a position as the third largest mobile operator.
Delisting from Nasdaq
Negligible trading volumes, high costs and limited benefits have led TeliaSoneras Board of Directors to decide to delist the TeliaSonera share from the Nasdaq Stock Market. It is expected that TeliaSoneras ADSs will cease to be quoted on Nasdaq as of the close of trading on August 6, 2004. TeliaSonera will, however, continue to be registered with the U.S. Securities and Exchange Commission.
Second Quarter Review of Profit Centers
Continued aggressive market
initiatives
- defended market shares in Sweden
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 10,272 |
10,748 |
20,432 |
21,319 |
of which external | 10,074 |
10,463 |
20,068 |
20,746 |
EBITDA excl. non-recurring items | 4,068 |
4,850 |
8,243 |
9,189 |
Margin (%) | 39.6 |
45.1 |
40.3 |
43.1 |
Operating income | 3,499 |
2,915 |
6,506 |
5,659 |
Operating income excl. non-recurring items | 2,920 |
3,289 |
5,927 |
6,033 |
CAPEX | 1,082 |
680 |
1,807 |
1,296 |
Mobile communications | ||||
Net sales | 3,052 |
3,118 |
5,943 |
5,904 |
EBITDA excl. non-recurring items | 1,230 |
1,534 |
2,398 |
2,769 |
Margin (%) | 40.3 |
49.2 |
40.3 |
46.9 |
CAPEX | 184 |
91 |
296 |
157 |
Fixed communications | ||||
Net sales | 7,220 |
7,630 |
14,489 |
15,415 |
EBITDA excl. non-recurring items | 2,838 |
3,316 |
5,845 |
6,420 |
Margin (%) | 39.3 |
43.5 |
40.3 |
41.6 |
CAPEX | 898 |
589 |
1,511 |
1,139 |
Mobile communications
Fixed communications
Customer segments
Additional offerings were launched:
Increased sales and maintained
profit
on a tough Finnish market
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 4,618 |
4,368 |
9,183 |
8,736 |
of which external | 4,528 |
4,333 |
9,008 |
8,597 |
EBITDA excl. non-recurring items | 1,716 |
1,689 |
3,407 |
3,512 |
Margin (%) | 37.2 |
38.7 |
37.1 |
40.2 |
Operating income | 891 |
480 |
1,722 |
1,170 |
Operating income excl. non-recurring items | 896 |
495 |
1,727 |
1,185 |
CAPEX | 709 |
600 |
1,145 |
991 |
Mobile communications | ||||
Net sales | 2,817 |
2,723 |
5,626 |
5,480 |
EBITDA excl. non-recurring items | 1,322 |
1,259 |
2,538 |
2,652 |
Margin (%) | 46.9 |
46.2 |
45.1 |
48.4 |
CAPEX | 335 |
266 |
508 |
466 |
Fixed communications | ||||
Net sales | 1,801 |
1,645 |
3,557 |
3,256 |
EBITDA excl. non-recurring items | 394 |
430 |
869 |
860 |
Margin (%) | 21.9 |
26.1 |
24.4 |
26.4 |
CAPEX | 374 |
334 |
637 |
525 |
Mobile communications
Fixed communications
Customer segments
Further initiatives were taken during the second quarter.
Strong customer growth despite
intense
competition in Norway
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 1,571 |
1,561 |
3,013 |
3,076 |
of which external | 1,538 |
1,542 |
2,942 |
3,038 |
EBITDA excl. non-recurring items | 456 |
681 |
982 |
1,327 |
Margin (%) | 29.0 |
43.6 |
32.6 |
43.1 |
Operating income | 258 |
174 |
601 |
255 |
Operating income excl. non-recurring items | 258 |
203 |
601 |
284 |
CAPEX | 94 |
190 |
227 |
351 |
Strong sales and positive
earnings trend
in Denmark
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 983 |
690 |
1,916 |
1,407 |
of which external | 951 |
671 |
1,863 |
1,367 |
EBITDA excl. non-recurring items | 72 |
-45 |
137 |
-72 |
Margin (%) | 7.3 |
-6.5 |
7.2 |
-5.1 |
Operating income | -74 |
-198 |
-139 |
-400 |
Operating income excl. non-recurring items | -74 |
-198 |
-139 |
-400 |
CAPEX | 81 |
69 |
128 |
143 |
Mobile communications | ||||
Net sales | 488 |
350 |
938 |
686 |
EBITDA excl. non-recurring items | 4 |
-102 |
19 |
-106 |
CAPEX | 42 |
18 |
60 |
43 |
Fixed communications excl. Stofa | ||||
External net sales | 297 |
236 |
594 |
498 |
EBITDA excl. non-recurring items | 14 |
19 |
18 |
-34 |
CAPEX | 26 |
28 |
44 |
61 |
Stofa | ||||
External net sales | 186 |
160 |
368 |
305 |
EBITDA excl. non-recurring items | 54 |
38 |
100 |
68 |
CAPEX | 13 |
23 |
24 |
39 |
*) External mobile interconnect revenues were previously reported net, but a transition was made to reporting gross in the fourth quarter of 2003.
Mobile communications
Fixed communications
Baltic Countries
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 1,468 |
1,470 |
2,871 |
2,883 |
of which external | 1,454 |
1,451 |
2,846 |
2,853 |
EBITDA excl. non-recurring items | 716 |
730 |
1,381 |
1,435 |
Margin (%) | 48.8 |
49.7 |
48.1 |
49.8 |
Income from associated companies | 45 |
8 |
180 |
118 |
Operating income | 408 |
207 |
853 |
482 |
Operating income excl. non-recurring items | 408 |
207 |
853 |
482 |
CAPEX | 164 |
243 |
307 |
375 |
Strong mobile and broadband customer growth in Lithuania
Mobile communications
Fixed communications
Strong mobile growth in Latvia
Mobile communications
Fixed communications
Good development in both mobile
and fixed in Estonia
Mobile communications
Fixed communications
Continued strong customer
growth and
strong margins in Eurasia
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 986 |
626 |
1,780 |
1,184 |
of which external | 985 |
626 |
1,779 |
1,184 |
EBITDA excl. non-recurring items | 571 |
357 |
1,015 |
637 |
Margin (%) | 57.9 |
57.0 |
57.0 |
53.8 |
Operating income | 444 |
212 |
773 |
345 |
Operating income excl. non-recurring items | 444 |
212 |
773 |
345 |
CAPEX | 439 |
154 |
651 |
379 |
Over 1.4 million new customers in Russia
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Share of net income | 62 |
218 |
228 |
308 |
Amortization of goodwill | |
-47 |
|
-103 |
Income from associated companies | 62 |
171 |
228 |
205 |
Strong development in Turkey
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Share of net income (US GAAP) | 356 |
-39 |
318 |
69 |
IFRS/IAS adjustments | 58 |
261 |
346 |
415 |
Amortization of goodwill | |
-131 |
|
-246 |
Amortization of fair value adjustments | -50 |
-36 |
-86 |
-67 |
Income from associated companies | 364 |
55 |
578 |
171 |
Continued price pressure and low volume growth on the international carrier market
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 1,018 |
1,284 |
1,953 |
2,776 |
of which external | 717 |
979 |
1,328 |
2,136 |
EBITDA excl. non-recurring items | 10 |
35 |
1 |
-10 |
Margin (%) | 1.0 |
2.7 |
0.1 |
-0.4 |
Operating income | -104 |
-28 |
-298 |
-227 |
Operating income excl. non-recurring items | -118 |
-94 |
-245 |
-293 |
CAPEX | 47 |
65 |
87 |
92 |
TeliaSonera Holding
SEK in
millions, except percentages |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 398 |
327 |
813 |
707 |
of which external | 342 |
280 |
701 |
624 |
EBITDA excl. non-recurring items | -10 |
-37 |
-48 |
-44 |
Margin (%) | -2.5 |
-11.3 |
-5.9 |
-6.2 |
Income from associated companies | 192 |
-879 |
242 |
-1,037 |
Operating income | 165 |
-989 |
585 |
-1,225 |
Operating income excl. non-recurring items | 165 |
-122 |
157 |
-357 |
CAPEX | 9 |
55 |
28 |
101 |
Stockholm, July 28, 2004
Anders Igel
President and CEO
Auditors Review Report
We have made a review of this interim report in accordance with recommendations issued by the Swedish Institute of Authorized Public Accountants. A review is substantially limited in scope in comparison to an audit. Nothing has come to our attention that indicates that this interim report fails to comply with the requirements of the Swedish Securities Exchange Act and International Financial Reporting Standards (IFRS/IAS).
Stockholm, July 28, 2004
PricewaterhouseCoopers AB | Peter Bladh |
Authorized Public Accountant | |
Göran Tidström | |
Authorized Public Accountant |
Financial
Information Interim Report January-September 2004 October 27, 2004 Year-End Report January-December 2004 February 11, 2005 |
Questions
regarding content: TeliaSonera AB Investor Relations SE106 63 Stockholm, Sweden Tel. +46 8 504 550 00 Fax +46 8 611 46 42 www.teliasonera.com/ir |
|
Ordering
of individual printed reports: Tel. +46 372 851 42 Fax +46 372 843 56 www.teliasonera.com/ir |
Shareholders
with questions regarding the distribution of financial
reports or for change of address: Tel. +46 8 449 88 16 Fax +46 8 449 88 10 E-mail: teliasonera@strd.se |
Condensed Consolidated Income Statements
In millions, except per share data and no. of shares | Apr-Jun |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 20,589 |
2,249 |
20,275 |
40,535 |
40,624 |
Operating expenses | -12,651 |
-1,382 |
-12,528 |
-25,006 |
-25,315 |
EBITDA | 7,938 |
867 |
7,747 |
15,529 |
15,309 |
Depreciation, amortization and write-downs | -2,969 |
-324 |
-4,310 |
-5,962 |
-8,668 |
Income from associated companies | 681 |
74 |
-620 |
1,266 |
-536 |
Operating income | 5,650 |
617 |
2,817 |
10,833 |
6,105 |
Net financial revenues and expenses | -161 |
-17 |
304 |
-449 |
-212 |
Income after financial items | 5,489 |
600 |
3,121 |
10,384 |
5,893 |
Income taxes | -2,022 |
-221 |
-1,313 |
-3,268 |
-2,251 |
Minority interests | -319 |
-35 |
-264 |
-563 |
-459 |
Net income | 3,148 |
344 |
1,544 |
6,553 |
3,183 |
Earnings per share | |||||
Basic | 0.67 |
0.07 |
0.33 |
1.40 |
0.68 |
Diluted | 0.67 |
0.07 |
0.33 |
1.40 |
0.68 |
Weighted average no. of shares (thousands) | |||||
Basic | 4,675,232 |
4,675,232 |
4,675,232 |
4,675,232 |
4,675,232 |
Diluted | 4,675,232 |
4,675,232 |
4,675,940 |
4,675,232 |
4,675,930 |
EBITDA excl. non-recurring items | 7,327 |
800 |
8,070 |
14,527 |
15,632 |
Operating income excl. non-recurring items | 5,063 |
553 |
4,036 |
9,885 |
7,324 |
Condensed Consolidated Balance Sheets
In millions | June 30, |
June 30, |
Dec 31, |
Assets | |||
Intangible fixed assets | 61,984 |
6,771 |
61,820 |
Tangible fixed assets | 48,442 |
5,292 |
49,161 |
Financial fixed assets | 39,871 |
4,355 |
42,061 |
Total fixed assets | 150,297 |
16,418 |
153,042 |
Inventories, etc. | 530 |
58 |
501 |
Receivables | 20,795 |
2,271 |
24,170 |
Short-term investments | 10,896 |
1,190 |
8,658 |
Cash and bank | 3,036 |
332 |
3,689 |
Total current assets | 35,257 |
3,851 |
37,018 |
Total assets | 185,554 |
20,269 |
190,060 |
Shareholders equity and liabilities | |||
Shareholders equity | 117,424 |
12,827 |
112,393 |
Minority interests | 3,720 |
407 |
3,441 |
Provisions for pensions and employee contracts |
566 |
62 |
522 |
Deferred tax liability, other provisions | 14,130 |
1,543 |
14,775 |
Total provisions | 14,696 |
1,605 |
15,297 |
Long-term loans | 15,125 |
1,652 |
25,867 |
Short-term loans | 9,469 |
1,034 |
4,687 |
Non-interest bearing liabilities | 25,120 |
2,744 |
28,375 |
Total liabilities | 49,714 |
5,430 |
58,929 |
Total
shareholders equity and liabilities |
185,554 |
20,269 |
190,060 |
Condensed Consolidated Cash Flow Statements
In millions | Apr-Jun |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Cash flow from operating activities |
6,246 |
682 |
7,736 |
10,230 |
13,322 |
Intangible and tangible assets acquired (cash CAPEX) |
-2,655 |
-290 |
-2,581 |
-4,445 |
-4,270 |
Free cash flow | 3,591 |
392 |
5,155 |
5,785 |
9,052 |
Cash flow from other investing activities | 288 |
31 |
996 |
6,754 |
1,400 |
Total cash flow from investing activities | -2,367 |
-259 |
-1,585 |
2,309 |
-2,870 |
Cash flow before financing activities | 3,879 |
423 |
6,151 |
12,539 |
10,452 |
Cash flow from financing activities |
-8,418 |
-919 |
-660 |
-10,990 |
-6,061 |
Cash flow for the period | -4,539 |
-496 |
5,491 |
1,549 |
4,391 |
Segment Information
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales 1) | ||||
Sweden | 10,272 |
10,748 |
20,432 |
21,319 |
Mobile | 3,052 |
3,118 |
5,943 |
5,904 |
Fixed 2) | 7,220 |
7,630 |
14,489 |
15,415 |
Finland | 4,618 |
4,368 |
9,183 |
8,736 |
Mobile | 2,817 |
2,723 |
5,626 |
5,480 |
Fixed 2) | 1,801 |
1,645 |
3,557 |
3,256 |
Norway - mobile | 1,571 |
1,561 |
3,013 |
3,076 |
Denmark | 983 |
690 |
1,916 |
1,407 |
Mobile | 488 |
350 |
938 |
686 |
Fixed 2) | 495 |
340 |
978 |
721 |
Baltic countries | 1,468 |
1,470 |
2,871 |
2,883 |
Lithuania mobile | 537 |
539 |
1,045 |
978 |
Lithuania fixed | 470 |
556 |
958 |
1,076 |
Latvia mobile | 513 |
463 |
970 |
894 |
Other | -52 |
-88 |
-102 |
-65 |
Eurasia - mobile | 986 |
626 |
1,780 |
1,184 |
Russia | 0 |
0 |
0 |
0 |
International Carrier | 1,018 |
1,284 |
1,953 |
2,776 |
Holding | 398 |
327 |
813 |
707 |
Corporate | 0 |
1 |
1 |
2 |
Eliminations | -725 |
-800 |
-1,427 |
-1,466 |
The Group | 20,589 |
20,275 |
40,535 |
40,624 |
1) For information about external
net sales per product area: www.teliasonera.com/ir
2) Including eliminations between fixed and mobile communications
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
EBITDA | ||||
Sweden | 4,646 |
4,476 |
8,821 |
8,815 |
Mobile | 1,230 |
1,534 |
2,398 |
2,769 |
Fixed | 3,416 |
2,942 |
6,423 |
6,046 |
Finland | 1,711 |
1,674 |
3,402 |
3,497 |
Mobile | 1,322 |
1,259 |
2,538 |
2,652 |
Fixed | 389 |
415 |
864 |
845 |
Norway - mobile | 456 |
681 |
982 |
1,327 |
Denmark | 72 |
-45 |
137 |
-72 |
Mobile | 4 |
-102 |
19 |
-106 |
Fixed | 68 |
57 |
118 |
34 |
Baltic countries | 716 |
730 |
1,381 |
1,435 |
Lithuania mobile | 233 |
243 |
459 |
463 |
Lithuania fixed | 230 |
241 |
457 |
518 |
Latvia mobile | 264 |
249 |
516 |
474 |
Other | -11 |
-3 |
-51 |
-20 |
Eurasia - mobile | 571 |
357 |
1,015 |
637 |
Russia | 0 |
2 |
0 |
0 |
Turkey | 0 |
1 |
0 |
0 |
International Carrier | 49 |
101 |
3 |
56 |
Holding | -10 |
-37 |
381 |
-44 |
Corporate | -241 |
-225 |
-471 |
-401 |
Eliminations | -32 |
32 |
-122 |
59 |
The Group | 7,938 |
7,747 |
15,529 |
15,309 |
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
EBITDA excl. non-recurring items | ||||
Sweden | 4,068 |
4,850 |
8,243 |
9,189 |
Mobile | 1,230 |
1,534 |
2,398 |
2,769 |
Fixed | 2,838 |
3,316 |
5,845 |
6,420 |
Finland | 1,716 |
1,689 |
3,407 |
3,512 |
Mobile | 1,322 |
1,259 |
2,538 |
2,652 |
Fixed | 394 |
430 |
869 |
860 |
Norway - mobile | 456 |
681 |
982 |
1,327 |
Denmark | 72 |
-45 |
137 |
-72 |
Mobile | 4 |
-102 |
19 |
-106 |
Fixed | 68 |
57 |
118 |
34 |
Baltic countries | 716 |
730 |
1,381 |
1,435 |
Lithuania mobile | 233 |
243 |
459 |
463 |
Lithuania fixed | 230 |
241 |
457 |
518 |
Latvia mobile | 264 |
249 |
516 |
474 |
Other | -11 |
-3 |
-51 |
-20 |
Eurasia - mobile | 571 |
357 |
1,015 |
637 |
Russia | 0 |
2 |
0 |
0 |
Turkey | 0 |
1 |
0 |
0 |
International Carrier | 10 |
35 |
1 |
-10 |
Holding | -10 |
-37 |
-48 |
-44 |
Corporate | -239 |
-225 |
-469 |
-401 |
Eliminations | -33 |
32 |
-122 |
59 |
The Group | 7,327 |
8,070 |
14,527 |
15,632 |
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Depreciation, amortization and write-downs | ||||
Sweden | -1,169 |
-1,560 |
-2,353 |
-3,154 |
of which amortization of goodwill | |
0 |
|
-1 |
Finland | -816 |
-1,202 |
-1,678 |
-2,335 |
of which amortization of goodwill | |
-370 |
|
-701 |
of which amortization of fair value adjustments | -180 |
-190 |
-400 |
-378 |
Norway | -198 |
-507 |
-381 |
-1,072 |
of which amortization of goodwill | |
-317 |
|
-652 |
Denmark | -146 |
-151 |
-277 |
-327 |
of which amortization of goodwill | |
-5 |
|
-11 |
Baltic countries | -351 |
-530 |
-707 |
-1,071 |
of which amortization of goodwill | |
-134 |
|
-269 |
of which amortization of fair value adjustments | -9 |
-10 |
-12 |
-21 |
Eurasia | -126 |
-145 |
-242 |
-292 |
of which amortization of goodwill | |
-41 |
|
-83 |
of which amortization of fair value adjustments | -2 |
-2 |
-4 |
-4 |
International Carrier | -153 |
-128 |
-300 |
-282 |
of which amortization of goodwill | |
-1 |
|
-1 |
Holding | -17 |
-73 |
-38 |
-143 |
of which amortization of goodwill | |
-1 |
|
-2 |
of which amortization of fair value adjustments | -3 |
2 |
-13 |
5 |
Corporate | -4 |
-6 |
-7 |
-12 |
Eliminations | 11 |
-8 |
21 |
20 |
The Group | -2,969 |
-4,310 |
-5,962 |
-8,668 |
of which amortization of goodwill | |
-869 |
|
-1,720 |
of which amortization of fair value adjustments | -194 |
-200 |
-429 |
-398 |
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Income from associated companies | ||||
Sweden | 22 |
-1 |
38 |
-2 |
Finland | -4 |
9 |
-1 |
9 |
Denmark | 0 |
0 |
1 |
0 |
Baltic countries | 45 |
8 |
180 |
118 |
Latvia fixed | 65 |
31 |
120 |
83 |
Share of net income | 45 |
31 |
80 |
41 |
Amortization of fair value adjustments | 20 |
0 |
40 |
42 |
Estonia mobile | -16 |
-14 |
39 |
30 |
Share of net income | -12 |
8 |
47 |
73 |
Amortization of goodwill | |
-19 |
|
-37 |
Amortization of fair value adjustments | -4 |
-3 |
-8 |
-6 |
Estonia fixed | -4 |
-9 |
21 |
5 |
Share of net income | -2 |
3 |
24 |
29 |
Amortization of goodwill | |
-10 |
|
-20 |
Amortization of fair value adjustments | -2 |
-2 |
-3 |
-4 |
Eurasia | |
|
|
|
Russia | 62 |
171 |
228 |
205 |
Share of net income | 62 |
218 |
228 |
308 |
Amortization of goodwill | |
-47 |
|
-103 |
Turkey | 364 |
55 |
578 |
171 |
Share of net income (U.S. GAAP) | 356 |
-39 |
318 |
69 |
IFRS/IAS adjustments | 58 |
261 |
346 |
415 |
Amortization of goodwill | |
-131 |
|
-246 |
Amortization of fair value adjustments | -50 |
-36 |
-86 |
-67 |
Holding | 192 |
-879 |
242 |
-1,037 |
Share of net income | 163 |
-23 |
257 |
-161 |
Capital gains/losses | 29 |
372 |
52 |
350 |
Write-downs | 0 |
-1,233 |
-67 |
-1,231 |
Amortization of goodwill | |
3 |
|
5 |
Amortization of fair value adjustments | 0 |
2 |
0 |
0 |
Corporate | 0 |
0 |
0 |
0 |
Eliminations | 0 |
17 |
0 |
0 |
The Group | 681 |
-620 |
1,266 |
-536 |
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Operating income | ||||
Sweden | 3,499 |
2,915 |
6,506 |
5,659 |
Finland | 891 |
480 |
1,722 |
1 170 |
Norway | 258 |
174 |
601 |
255 |
Denmark | -74 |
-198 |
-139 |
-400 |
Baltic countries | 408 |
207 |
853 |
482 |
Eurasia | 444 |
212 |
773 |
345 |
Russia | 62 |
173 |
228 |
205 |
Turkey | 364 |
56 |
578 |
171 |
International Carrier | -104 |
-28 |
-298 |
-227 |
Holding | 165 |
-989 |
585 |
-1,224 |
Corporate | -244 |
-232 |
-478 |
-414 |
Eliminations | -19 |
47 |
-98 |
83 |
The Group | 5,650 |
2,817 |
10,833 |
6,105 |
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Operating
income excl. non-recurring items |
||||
Sweden | 2,920 |
3,289 |
5,927 |
6,033 |
Finland | 896 |
495 |
1,727 |
1,185 |
Norway | 258 |
203 |
601 |
284 |
Denmark | -74 |
-198 |
-139 |
-400 |
Baltic countries | 408 |
207 |
853 |
482 |
Eurasia | 444 |
212 |
773 |
345 |
Russia | 62 |
173 |
228 |
205 |
Turkey | 364 |
56 |
578 |
171 |
International Carrier | -118 |
-94 |
-245 |
-293 |
Holding | 165 |
-122 |
157 |
-357 |
Corporate | -242 |
-232 |
-476 |
-414 |
Eliminations | -20 |
47 |
-99 |
83 |
The Group | 5,063 |
4,036 |
9,885 |
7,324 |
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
CAPEX | ||||
Sweden | 1,082 |
680 |
1,807 |
1,296 |
Finland | 709 |
600 |
1,145 |
991 |
Norway | 94 |
190 |
227 |
351 |
Denmark | 81 |
69 |
128 |
143 |
Baltic countries | 164 |
243 |
307 |
375 |
Eurasia | 439 |
154 |
651 |
379 |
International Carrier | 47 |
65 |
87 |
92 |
Holding | 9 |
55 |
28 |
101 |
Corporate | 0 |
3 |
3 |
7 |
Eliminations | 0 |
0 |
0 |
0 |
The Group | 2,625 |
2,059 |
4,383 |
3,735 |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
|
Number of employees | ||||
Sweden | ||||
At the end of the period | 10,972 |
11,258 |
10,972 |
11,258 |
Average for the period | 10,413 |
10,787 |
10,374 |
10,843 |
Finland | ||||
At the end of the period | 7,016 |
6,411 |
7,016 |
6,411 |
Average for the period | 6,500 |
5,878 |
6,438 |
5,816 |
Norway | ||||
At the end of the period | 709 |
735 |
709 |
735 |
Average for the period | 715 |
738 |
718 |
735 |
Denmark | ||||
At the end of the period | 1,031 |
1,038 |
1,031 |
1,038 |
Average for the period | 1,012 |
1,010 |
1,011 |
1,025 |
Baltic countries | ||||
At the end of the period | 4,361 |
5,244 |
4,361 |
5,244 |
Average for the period | 4,227 |
5,438 |
4,351 |
5,409 |
Eurasia | ||||
At the end of the period | 1,130 |
980 |
1,130 |
980 |
Average for the period | 1,104 |
937 |
1,073 |
924 |
Russia | ||||
At the end of the period | 1 |
1 |
1 |
1 |
Average for the period | 1 |
1 |
1 |
1 |
Turkey | ||||
At the end of the period | 3 |
3 |
3 |
3 |
Average for the period | 3 |
3 |
3 |
3 |
International Carrier | ||||
At the end of the period | 539 |
673 |
539 |
673 |
Average for the period | 535 |
707 |
545 |
762 |
Holding | ||||
At the end of the period | 514 |
948 |
514 |
948 |
Average for the period | 604 |
940 |
651 |
1,008 |
Corporate | ||||
At the end of the period | 296 |
279 |
296 |
279 |
Average for the period | 289 |
245 |
283 |
226 |
The Group | ||||
At the end of the period | 26,572 |
27,570 |
26,572 |
27,570 |
Average for the period | 25,403 |
26,684 |
25,448 |
26,752 |
Quarterly Data
SEK in millions, except per share data | Apr-Jun |
Jan-Mar |
Oct-Dec |
Jul-Sep |
Apr-Jun |
Net sales | 20,589 |
19,946 |
21,054 |
20,094 |
20,275 |
EBITDA | 7,938 |
7,591 |
7,442 |
7,571 |
7,747 |
Depreciation, amortization and write-downs | -2,969 |
-2,993 |
-4,559 |
-4,337 |
-4,310 |
Income from associated companies | 681 |
585 |
499 |
419 |
-620 |
Operating income | 5,650 |
5,183 |
3,382 |
3,653 |
2,817 |
Income after financial items | 5,489 |
4,895 |
3,100 |
3,353 |
3,121 |
Net income | 3,148 |
3,405 |
2,696 |
1,792 |
1,544 |
Earnings per share | |||||
Basic (SEK) | 0.67 |
0.73 |
0.58 |
0.38 |
0.33 |
Diluted (SEK) | 0.67 |
0.73 |
0.58 |
0.38 |
0.33 |
Investments | 2,684 |
2,051 |
4,474 |
1,899 |
2,121 |
of which CAPEX | 2,625 |
1,758 |
3,336 |
1,889 |
2,059 |
Cash flow from operating activities | 6,246 |
3,984 |
6,651 |
6,581 |
7,736 |
Free cash flow | 3,591 |
2,194 |
3,309 |
5,138 |
5,155 |
EBITDA excl. non-recurring items | 7,327 |
7,200 |
7,143 |
7,915 |
8,070 |
Operating income excl. non-recurring items | 5,063 |
4,822 |
3,330 |
4,177 |
4,036 |
*) Restated
Non-Recurring Items
SEK in millions | Apr-Jun 2004 |
Apr-Jun 2003 |
Jan-Jun 2004 |
Jan-Jun 2003 |
Within EBITDA | 611 |
-323 |
1,003 |
-323 |
Restructuring
charges, synergy implementation costs, etc.: Sweden |
-14 |
-374 |
-14 |
-374 |
Finland | -5 |
-15 |
-5 |
-15 |
International Carrier | 26 |
|
21 |
|
Corporate | -2 |
|
-2 |
|
Revised
treatment of certain pension-related costs: Sweden |
593 |
|
593 |
|
Provisions (FX
rate effect): International Carrier |
13 |
66 |
-19 |
66 |
Capital
gains: Telia Finans |
|
|
429 |
|
Within Depreciation, amortization and write-downs | -24 |
-29 |
-55 |
-29 |
Accelerated
depreciation: International Carrier |
-24 |
|
-50 |
|
Write-downs: International Carrier |
|
|
-5 |
|
Other | |
-29 |
|
-29 |
Within Income from associated companies | |
-867 |
|
-867 |
Capital
gains/losses: Bharti Mobile |
|
341 |
|
341 |
Write-downs: Metro One |
|
-110 |
|
-110 |
Infonet | |
-1,028 |
|
-1,028 |
Provisions
and other: INGROUP, etc. |
|
-70 |
|
-70 |
Within Financial revenues and expenses | |
420 |
-111 |
222 |
Capital
gains/losses: Netia |
|
583 |
|
583 |
Write-downs: Xfera (3G Spain) |
|
|
-111 |
|
Other financial investments | |
-163 |
|
-361 |
Total | 587 |
-799 |
837 |
-997 |
Number of Customers 1)
In thousands | Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Jun 30, |
Consolidated operations | |||||
Mobile | 12,891 |
12,397 |
11,957 |
11,491 |
11,109 |
Sweden | 4,115 |
4,008 |
3,838 |
3,760 |
3,692 |
Finland | 2,266 |
2,321 |
2,428 |
2,441 |
2,471 |
Norway | 1,239 |
1,190 |
1,195 |
1,191 |
1,181 |
Denmark | 556 |
544 |
525 |
504 |
484 |
Lithuania | 1,139 |
1,101 |
1,052 |
965 |
905 |
Latvia | 575 |
554 |
534 |
507 |
491 |
Eurasia | 3,001 |
2,679 |
2,385 |
2,123 |
1,885 |
Internet | 1,759 |
1,738 |
1,686 |
1,605 |
1,559 |
Sweden | 1,245 |
1,239 |
1,222 |
1,185 |
1,155 |
of which broadband | 440 |
423 |
399 |
380 |
365 |
Finland | 323 |
314 |
299 |
274 |
265 |
of which broadband | 189 |
174 |
150 |
119 |
103 |
Denmark, broadband | 117 |
113 |
104 |
96 |
91 |
Lithuania | 74 |
72 |
61 |
50 |
48 |
of which broadband | 34 |
31 |
25 |
18 |
15 |
Cable TV, Denmark | 196 |
196 |
195 |
192 |
191 |
Fixed voice | 8,000 |
8,042 |
8,087 |
8,027 |
8,094 |
Sweden | 6,209 |
6,248 |
6,283 |
6,330 |
6,356 |
Finland | 779 |
790 |
804 |
691 |
702 |
Denmark | 188 |
179 |
172 |
170 |
177 |
Lithuania | 824 |
825 |
828 |
836 |
859 |
Associated companies | |||||
Mobile | 29,277 |
27,089 |
24,867 |
22,982 |
20,995 |
Estonia | 531 |
502 |
492 |
464 |
439 |
Russia | 9,046 |
7,587 |
6,175 |
5,318 |
4,256 |
Turkey 2) | 19,700 |
19,000 |
18,200 |
17,200 |
16,300 |
Internet | 91 |
86 |
76 |
66 |
63 |
Latvia, broadband | 25 |
23 |
19 |
15 |
14 |
Estonia | 66 |
63 |
57 |
51 |
49 |
Fixed voice | 1,076 |
1,089 |
1,099 |
1,103 |
1,121 |
Latvia | 644 |
652 |
654 |
657 |
671 |
Estonia | 432 |
437 |
445 |
446 |
450 |
TeliaSonera January-June 2004 Legal 1)
Condensed Consolidated Income Statements
SEK in
millions, except per share data and number of shares |
Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net sales | 20,589 |
20,603 |
40,535 |
41,277 |
Costs of production | -10,797 |
-11,139 |
-21,032 |
-23,075 |
Gross income | 9,792 |
9,464 |
19,503 |
18,202 |
Selling, admin., and R&D expenses | -4,955 |
-5,873 |
-10,497 |
-11,435 |
Other operating revenues and expenses, net | 132 |
1,432 |
561 |
1,444 |
Income from associated companies | 681 |
-620 |
1,266 |
-536 |
Operating income | 5,650 |
4,403 |
10,833 |
7,675 |
Net financial revenues and expenses | -161 |
301 |
-449 |
-229 |
Income after financial items | 5,489 |
4,704 |
10,384 |
7,446 |
Income taxes | -2,022 |
-1,457 |
-3,268 |
-2,395 |
Minority interests | -319 |
-264 |
-563 |
-459 |
Net income | 3,148 |
2,983 |
6,553 |
4,592 |
Earnings per share (SEK) | ||||
Basic | 0.67 |
0.64 |
1.40 |
0.99 |
Diluted | 0.67 |
0.64 |
1.40 |
0.99 |
Weighted average number of shares (thousands) | ||||
Basic | 4,675,232 |
4,675,232 |
4,675,232 |
4,659,878 |
Diluted | 4,675,232 |
4,675,940 |
4,675,232 |
4,660,576 |
1) Including Telias Finnish
mobile operations and Swedish cable TV operations through May 31,
2003.
Condensed Consolidated Balance Sheets
SEK in millions | June 30, |
Dec 31, |
Assets | ||
Intangible fixed assets | 61,984 |
61,820 |
Tangible fixed assets | 48,442 |
49,161 |
Financial fixed assets | 39,871 |
42,061 |
Total fixed assets | 150,297 |
153,042 |
Inventories, etc. | 530 |
501 |
Receivables | 20,795 |
24,170 |
Short-term investments | 10,896 |
8,658 |
Cash and bank | 3,036 |
3,689 |
Total current assets | 35,257 |
37,018 |
Total assets | 185,554 |
190,060 |
Shareholders equity and liabilities | ||
Shareholders equity | 117,424 |
112,393 |
Minority interests | 3,720 |
3,441 |
Provisions for pensions and employee contracts | 566 |
522 |
Deferred tax liability, other provisions | 14,130 |
14,775 |
Total provisions | 14,696 |
15,297 |
Long-term loans | 15,125 |
25,867 |
Short-term loans | 9,469 |
4,687 |
Non-interest-bearing liabilities | 25,120 |
28,375 |
Total liabilities | 49,714 |
58,929 |
Total equity and liabilities | 185,554 |
190,060 |
Condensed Consolidated Cash Flow Statements
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Cash flow before change in working capital | 6,689 |
8,858 |
11,198 |
15,405 |
Change in working capital | -443 |
-1,264 |
-968 |
-2,194 |
Cash flow from operating activities |
6,246 |
7,594 |
10,230 |
13,211 |
Intangible and tangible fixed assets acquired (cash CAPEX) | -2,655 |
-2,581 |
-4,445 |
-4,307 |
Free cash flow | 3,591 |
5,013 |
5,785 |
8,904 |
Cash flow from other investing activities | 288 |
3,380 |
6,754 |
3,715 |
Total cash flow from investing activities | -2,367 |
799 |
2,309 |
-592 |
Cash flow before financing activities | 3,879 |
8,393 |
12,539 |
12,619 |
Cash flow from financing activities |
-8,418 |
-2,983 |
-10,990 |
-8,311 |
Cash flow for the period | -4,539 |
5,410 |
1,549 |
4,308 |
Cash and cash equivalents, opening balance | 18,252 |
4,333 |
12,069 |
5,465 |
of which short-term investments up to and including three months | 14,537 |
578 |
8,380 |
2,634 |
of which cash and bank | 3,715 |
3,755 |
3,689 |
2,831 |
Cash flow for the period | -4,539 |
5,410 |
1,549 |
4,308 |
Exchange rate differences in cash and cash equivalents | -44 |
-25 |
51 |
-55 |
Cash and cash equivalents, closing balance | 13,669 |
9,718 |
13,669 |
9,718 |
of which short-term investments up to and including three months | 10,633 |
6,239 |
10,633 |
6,239 |
of which cash and bank | 3,036 |
3,479 |
3,036 |
3,479 |
Net interest-bearing liability, opening balance | 7,088 |
22,213 |
8,847 |
25,034 |
Change in net borrowings | 1,244 |
-5,044 |
-605 |
-7,746 |
Change in pension provisions | -46 |
-10 |
44 |
-129 |
Net interest-bearing liability, closing balance | 8,286 |
17,159 |
8,286 |
17,159 |
Condensed Consolidated Statements of Changes in Shareholders Equity
SEK in millions | June 30, |
Dec 31, |
Opening balance | 112,393 |
108,829 |
Transactions with outside parties | -4 |
-13 |
Differences arising from translation of foreign operations | 1,538 |
-8,101 |
Inflation adjustments | 1,610 |
2,427 |
Fair value measurement of securities available for sale | 23 |
|
Gains/losses on instruments used to hedge cash flow | -14 |
-10 |
Dividend | -4,675 |
-1,870 |
New share issue | |
2,051 |
Net income for the period | 6,553 |
9,080 |
Closing balance | 117,424 |
112,393 |
Long-Lived Assets
Goodwill |
Other |
Tangibles |
||||
SEK in millions | June 30, |
Dec 31, |
June 30, |
Dec 31, |
June 30, |
Dec 31, |
Opening balance | 52,922 |
58,584 |
8,898 |
9,522 |
49,161 |
56,172 |
Purchases | 58 |
1,902 |
333 |
1,292 |
4,105 |
8,446 |
Operations acquired | |
|
|
30 |
249 |
255 |
Dismantling/restoration | |
|
|
|
|
106 |
Sales/discards | |
|
-28 |
-131 |
-67 |
-356 |
Operations divested | |
|
-1 |
-5 |
-177 |
-1,420 |
Reclassifications | 14 |
-458 |
251 |
432 |
-274 |
-455 |
Amortization, depreciation | |
-3,450 |
-888 |
-1,686 |
-5,068 |
-11,872 |
Write-downs, reversals of write-downs | -9 |
-38 |
-11 |
-301 |
-9 |
-332 |
CAPEX contribution from CATV customers | |
|
|
|
|
74 |
Advances | |
|
-7 |
0 |
59 |
49 |
Inflation adjustments | |
|
|
|
|
-7 |
Exchange rate differences | 323 |
-3,618 |
129 |
-255 |
463 |
-1,499 |
Closing balance | 53,308 |
52,922 |
8,676 |
8,898 |
48,442 |
49,161 |
Investments
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
CAPEX | 2,625 |
1,995 |
4,383 |
4,148 |
Intangible fixed assets | 199 |
117 |
292 |
633 |
Tangible fixed assets | 2,426 |
1,878 |
4,091 |
3,515 |
Acquisitions | 58 |
236 |
351 |
1,458 |
Goodwill and other fair value adjustments | 40 |
103 |
176 |
1,256 |
Shares and participations | 18 |
133 |
175 |
202 |
Total | 2,683 |
2,231 |
4,734 |
5,606 |
Net Interest-Bearing Liability
SEK in millions | June 30, |
Dec 31, |
Long-term and short-term loans | 24,594 |
30,554 |
Less: Short-term investments, cash and bank |
-13,932 |
-12,347 |
Net debt | 10,662 |
18,207 |
Less: Interest-bearing financial assets | -2,110 |
-6,112 |
Interest-bearing receivables | -832 |
-3,770 |
Total net borrowings | 7,720 |
8,325 |
Provisions for pensions | 566 |
522 |
Total net interest-bearing liability | 8,286 |
8,847 |
Changes in Share Capital
Number of shares |
Par value, |
Share capital, |
|
Share capital, Dec 31, 2000 | 3,001,200,000 |
3.20 |
9,603,840 |
Share capital, Dec 31, 2001 | 3,001,200,000 |
3.20 |
9,603,840 |
New share issue, Dec 3, 2002 | 1,604,556,725 |
3.20 |
5,134,582 |
Share capital, Dec 31, 2002 | 4,605,756,725 |
3.20 |
14,738,422 |
New share issue, Feb 10, 2003 | 69,475,344 |
3.20 |
222,321 |
Share capital, Dec 31, 2003 | 4,675,232,069 |
3.20 |
14,960,743 |
Share capital, June 30, 2004 | 4,675,232,069 |
3.20 |
14,960,743 |
Financial Instruments
June 30, |
June 30, |
Dec 31, |
Dec 31, |
|
SEK in millions | Book |
Fair |
Book |
Fair |
Equity participations in associated companies | 23,406 |
27,455 |
20,401 |
23,315 |
Other holdings of securities | 456 |
456 |
558 |
558 |
Other long- and short-term receivables | 1,947 |
1,947 |
8,824 |
8,736 |
Short-term investments | 263 |
263 |
278 |
278 |
Interest rate swaps received | 5,740 |
5,740 |
2,178 |
2,178 |
Interest rate swaps paid | -5,600 |
-5,600 |
-2,084 |
-2,084 |
FX interest rate swaps received | 5,747 |
5,747 |
5,989 |
5,989 |
FX interest rate swaps paid | -5,348 |
-5,348 |
-5,583 |
-5,583 |
Other currency derivatives | 33 |
33 |
84 |
84 |
Total assets | 26,644 |
30,693 |
30,645 |
33,471 |
Provisions for pensions | 566 |
566 |
522 |
522 |
Long-term loans | 15,248 |
15,476 |
25,940 |
27,023 |
Short-term loans | 9,450 |
9,780 |
4,686 |
4,710 |
Interest rate swaps received | -1,313 |
-1,313 |
-1,314 |
-1,314 |
Interest rate swaps paid | 1,483 |
1,483 |
1,442 |
1,442 |
FX interest rate swaps received | -1,588 |
-1,588 |
-1,795 |
-1,795 |
FX interest rate swaps paid | 1,693 |
1,693 |
1,927 |
1,927 |
Other currency derivatives | 64 |
64 |
85 |
85 |
Total liabilities | 25,603 |
26,161 |
31,493 |
32,600 |
Less book value of: | ||||
- pensions | -566 |
-522 |
||
- accrued interest | -379 |
-332 |
||
- other currency derivatives | -64 |
-85 |
||
Book value of interest-bearing liabilities | 24,594 |
30,554 |
||
FX swaps/forward contracts (portfolio) | ||||
Purchases of foreign currency | 10,886 |
10,886 |
15,030 |
15,030 |
Sales of foreign currency | 3,307 |
3,307 |
5,075 |
5,075 |
Deferred Tax
SEK in millions | June 30, |
Dec 31, |
Deferred tax liability | 8,452 |
8,537 |
Deferred tax asset (incl. valuation reserve) | -13,161 |
-14,960 |
Net deferred tax asset (-)/liability (+) | -4,709 |
-6,423 |
Contingent Assets and Contingent Liabilities
SEK in millions | June 30, |
Dec 31, |
Contingent assets | |
|
Collateral pledged | ||
Real estate mortgages | 20 |
20 |
Chattel mortgages | |
262 |
Shares in subsidiaries | |
570 |
Shares in associated companies | 525 |
642 |
Current receivables | 39 |
36 |
Blocked funds in bank accounts | 1,278 |
1,259 |
Total | 1,862 |
2,789 |
Contingent liabilities | ||
Credit guarantees, associated companies | 954 |
726 |
Performance
guarantees, associated companies and other minority holdings |
1,367 |
1,159 |
Other guarantees, etc. | 815 |
1,038 |
FPG/PRI, other pension guarantees | 176 |
176 |
Total | 3,312 |
3,099 |
TeliaSonera has a dispute with
Tele2 and Vodafone concerning interconnect
prices in Sweden. TeliaSonera believes that it has recorded
sufficient provisions.
Contractual Obligations
SEK in millions | June 30, |
Dec 31, |
Intangible fixed assets | 25 |
40 |
Tangible fixed assets | 2,839 |
2,140 |
Indefeasible Rights of Use (IRU) | 3 |
|
Associated companies and other minority holdings | 3,379 |
3,093 |
Total | 6,246 |
5,273 |
Exchange Rates
Average SEK rate against | Jan-Jun |
Jan-Jun |
EUR | 9.165202 |
9.160918 |
NOK | 1.085647 |
1.181076 |
DKK | 1.231254 |
1.233329 |
LVL | 13.878648 |
14.459014 |
LTL | 2.654408 |
2.653407 |
USD | 7.468036 |
8.302945 |
TRL 1,000,000 | 5.365971 |
5.241557 |
Basis for Presentation
General. As in the annual accounts for 2003, TeliaSoneras consolidated financial statements for the three-month and the six-month period ended June 30, 2004, have been prepared in accordance with International Financial Reporting Standards (IFRS/IAS). The parent company TeliaSonera ABs financial statements have been prepared in accordance with the Annual Accounts Act and other Swedish regulations. This report has been prepared in accordance with IAS 34 "Interim Financial Reporting."
Amounts and dates. Unless otherwise specified, all amounts are in millions of Swedish kronor (SEK) or other currency specified and are based on the three-month and the six-month period ended June 30, 2004 for income statement items and as of June 30, 2004 for balance sheet items, respectively.
New accounting standards. On December 17, 2003, revisions to IAS 32 "Financial Instruments: Disclosure and Presentation" and IAS 39 "Financial Instruments: Recognition and Measurement" were published. A further amendment to IAS 39, incorporating new provisions that permit, in certain cases, fair value hedge accounting for a portfolio hedge of interest rate risk (macro hedging), was published on March 31, 2004. The revised IAS 39 must be applied for annual periods beginning on or after January 1, 2005. Earlier application is permitted only if the revised IAS 32 is also early applied.
On December 18, 2003, IAS 15 "Information Reflecting the Effects of Changing Prices" was withdrawn and revisions were published to IAS 1 "Presentation of Financial Statements," IAS 2 "Inventories," IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors," IAS 10 "Events after the Balance Sheet Date," IAS 16 "Property, Plant and Equipment," IAS 17 "Leases," IAS 21 "The Effects of Changes in Foreign Exchange Rates," IAS 24 "Related Party Disclosures," IAS 27 "Consolidated and Separate Financial Statements," IAS 28 "Investments in Associates," IAS 31 "Interests in Joint Ventures," IAS 33 "Earnings per Share," and IAS 40 "Investment Property." The effective date for all revised standards is January 1, 2005. Earlier application is encouraged. The revised standards also superseded a number of SICs (see details in the Q1 Interim Report).
IFRS 2 "Share-based Payment" (also replacing certain disclosure requirements in IAS 19 "Employee Benefits") was published on February 19, 2004. IFRS 2 is effective for annual periods beginning on or after January 1, 2005. Earlier application is encouraged. On March 31, 2004, IFRS 3 "Business Combinations" (superseding IAS 22 "Business Combinations"), IFRS 4 "Insurance Contracts" and IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" (superseding IAS 35 "Discontinuing Operations") were published. Revisions to IAS 36 "Impairment of Assets" and IAS 38 "Intangible Assets," in both cases related to IFRS 3, were also published on March 31, 2004.
Generally, IFRS 3 became effective for business combinations agreed to on or after March 31, 2004. Special transitional provisions apply to previously recognized goodwill, negative goodwill, intangible assets, and equity accounted investments. IFRS 4 is effective for annual periods beginning on or after January 1, 2005. Earlier application is encouraged. IFRS 5 must be applied prospectively for annual periods beginning on or after January 1, 2005. Earlier application is permitted if sufficient information is available. The effective date of the revisions to IAS 36 and IAS 38 is April 1, 2004 (or date of adoption of IFRS 3 for intangible assets acquired in a business combination).
IFRIC 1 "Changes in Existing Decommissioning, Restoration and Similar Liabilities" was published on May 27, 2004.
TeliaSoneras future adoption of IFRS 4, IFRS 5 and of the revisions to IAS 2, IAS 8, IAS 10, IAS 16, IAS 17, IAS 21, IAS 24, IAS 28, IAS 31, IAS 32, IAS 33 and IAS 39, as well as the adoption of IFRIC 1, will not entail any restatements of comparative figures. When adopting IAS 1 and IAS 27, TeliaSonera will have to recognize the share of equity owned by external shareholders not as a separate line item on the face of the balance sheet but as a separate component within shareholders equity. Likewise, the minority share of income will not be recognized as a separate line item on the face of the income statement but as a disclosure on the face of the income statement of the allocation of profit or loss for the period. TeliaSonera does not own assets of the type regulated by IAS 40.
Adoption of IFRS 2 entails, among other things, recognizing share-based payments to employees, suppliers, creditors and others at fair value on the date of grant. TeliaSonera is evaluating what effects, if any, IFRS 2 will have on its consolidated financial statements. Adoption of IFRS 3 and of the revisions to IAS 36 and IAS 38 involves, among other things, that goodwill and other intangible assets with indefinite useful life will no longer be amortized but tested for impairment at least annually and that the minority interest should include minority shareholders part of the fair value of assets acquired and liabilities assumed. TeliaSonera has decided to adopt IFRS 3 as of January 1, 2004 (see "Restated quarterly data" below).
Change in estimates. Effective January 1, 2004, the depreciation rate for copper cables in the fixed local access network in Sweden has been changed from 8 years to 20 years and for switching equipment for ADSL customers from 3 years to 10 years.
Restated segment reporting. Some adjustments of TeliaSoneras business organization were implemented in the first half of 2004. Hence, segment information in this report has been restated.
Restated quarterly data. In the fourth quarter of 2003, TeliaSonera finalized the allocation of goodwill to the various businesses acquired directly and indirectly in the merger with Sonera. The final allocation resulted, among others, in a reduction of goodwill related to the Turkcell shares, increasing operating income in 2003 by SEK 291 million. The adjustments were retroactively reflected in all quarters as follows.
SEK in millions | Jan-Dec |
Oct-Dec |
Jul-Sep |
Apr-Jun |
Jan-Mar |
Income from associated companies | 291 |
64 |
93 |
73 |
61 |
Operating income | 291 |
64 |
93 |
73 |
61 |
Income after financial items | 291 |
64 |
93 |
73 |
61 |
Income taxes | -113 |
-25 |
-36 |
-28 |
-24 |
Net income | 178 |
39 |
57 |
45 |
37 |
In the second quarter of 2004,
TeliaSonera decided to retrospectively adopt IFRS 3 as of January
1, 2004. The adoption impacted the first quarter results for 2004
as follows.
SEK in millions | Jan-Mar |
Depreciation, amortization and write-downs | 830 |
Income from associated companies | 231 |
Operating income | 1,061 |
Income after financial items | 1,061 |
Net income | 1,061 |
Changes in Group Composition
Metro One. On January 14, 2004, TeliaSonera sold its remaining shareholding in Metro One Telecommunications, Inc.
INGROUP. At year-end 2003, the shareholders of INGROUP Holding AB, including TeliaSonera holding a 37 percent share, signed an agreement to sell all of their shares to Manpower. After approval by relevant competition authorities, the divesture was completed on February 20, 2004.
Sonera Zed. On January 13, 2004, Yahoo!, with reference to an existing put option, sold back its 16 percent holding in Sonera Zed Oy to TeliaSonera, whereby Sonera Zed became a wholly owned subsidiary of TeliaSonera.
Telia Finans. On January 15, 2004, TeliaSonera signed an agreement to sell its wholly owned subsidiary, the Swedish leasing company Telia Finans AB, to De Lage Landen International B.V. After approval by the Swedish Financial Supervisory Authority, the sale was completed on March 1, 2004.
Eutelsat. TeliaSoneras minority holding in the satellite company Eutelsat S.A. was sold in February 2004.
Sturenportti. On February 27, 2004, TeliaSonera purchased all shares in the real estate company Kiinteistö Oy Sturenportti from Sonera Pension Fund.
Orange Denmark. On July 8, 2004, TeliaSonera announced the signing of an agreement with France Telecom to acquire France Telecoms Danish subsidiary Orange A/S. Closing will take place after approval by the EU Commission and the Danish National IT and Telecom Agency and other necessary approvals.
Related Party Transactions
The Swedish and the Finnish States. The TeliaSonera
Groups services and products are offered to the Swedish and
the Finnish states, their agencies, and state-owned companies in
competition with other operators and on conventional commercial
terms. Certain state-owned companies run businesses that compete
with TeliaSonera. Likewise, TeliaSonera buys services from state-owned
companies at market prices and on otherwise conventional
commercial terms. Neither the Swedish and Finnish states and
their agencies, nor state-owned companies represent a significant
share of TeliaSoneras net sales or earnings.
Svenska UMTS-nät. TeliaSonera owns 50 percent of Svenska UMTS-nät AB. In the six-month period ended June 30, 2004, TeliaSonera sold services and products to Svenska UMTS-nät worth SEK 86 million and purchased services and products worth SEK 18 million. As security for certain amounts borrowed by Svenska UMTS-nät under a third-party credit facility, TeliaSonera had, as of June 30, 2004, issued a guarantee of a maximum of SEK 3,500 million to the lenders and granted pledges of its shares in Svenska UMTS-nät.
Lattelekom. TeliaSonera holds a participating interest in the Latvian fixed-line operator Lattelekom SIA. In the three-month period ended June 30, 2004, TeliaSonera sold services and products to Lattelekom worth SEK 29 million and purchased services and products worth SEK 19 million. In the six-month period ended June 30, 2004, TeliaSonera sold services and products worth SEK 57 million and purchased services and products worth SEK 35 million.
MegaFon. TeliaSonera holds a participating interest in the Russian mobile operator OAO MegaFon. As of June 30, 2004, TeliaSonera had interest-bearing and non-interest-bearing claims on MegaFon of SEK 366 million.
Infonet. TeliaSonera owns a participating interest in the American company Infonet Services Corp. In the three-month period ended June 30, 2004, TeliaSonera sold services and products to Infonet worth SEK 5 million and purchased services and products worth SEK 37 million. In the six-month period ended June 30, 2004, TeliaSonera sold services and products worth SEK 15 million and purchased services and products worth SEK 75 million.
Telefos. TeliaSonera owns 49 percent of the shares in Telefos AB. As of June 30, 2004, TeliaSonera had interest-bearing claims on the Telefos Group of SEK 174 million and had signed guarantees of SEK 100 million for commitments made by Telefos companies. In the three-month period ended June 30, 2004, TeliaSonera sold services and products worth SEK 30 million to the Telefos Group and purchased services and products worth SEK 488 million. In the six-month period ended June 30, 2004, TeliaSonera sold services and products worth SEK 51 million and purchased services and products worth SEK 1,037 million. Some of the services purchased by TeliaSonera referred to construction of fixed assets.
Other relationships. In addition to those specified, TeliaSonera buys and sells services and products to a limited extent from these and other associated companies, in all cases on market terms.
Loan Financing and Credit
Rating
The positive cash-flow generation continued also during the
second quarter of 2004, allowing further amortization of the
external debt.
In June, a EUR 300 million Bond issued by TeliaSonera Finland Oyj (former Sonera Oyj) was repaid in line with TeliaSonera ABs approach to refinance outstanding TeliaSonera Finland debt as it matures, as well as make new financing required for the Finnish operations.
In May, Moodys Investors Service revised its "Outlook" on TeliaSonera ABs long-term credit rating, which is A2, from "Negative" to "Positive."
Dividend
The year 2003 dividend of SEK 1.00 per share, totaling SEK 4,675
million, was paid out on May 6, 2004.
Non-Cash Transactions
Vehicles. TeliaSonera leases vehicles through
financial leasing. New acquisitions in the three-month period and
the six-month period ended June 30, 2004 entailed non-cash
investments of SEK 14 million and SEK 22 million, respectively.
Stock Option Schemes
At General Meetings of shareholders of TeliaSonera AB, a
number of stock option schemes have been adopted. Summarized
information about warrants outstanding as of June 30, 2004 by
exercise price is as follows.
Outstanding |
Of which exercisable |
|||
Exercise
price (SEK) |
Number of |
Remaining |
Number of |
Remaining |
69.00 | 12,302,000 |
0.92 |
12,302,000 |
0.92 |
70.62 | 5,956,650 |
1.00 |
5,956,650 |
1.00 |
On June 30, 2004, the closing price for the TeliaSonera share on Stockholmsbörsen was SEK 31.90. Detailed information regarding the stock option schemes is presented in TeliaSoneras Annual Report for 2003. By Board decisions in February and March 2004, all warrants of series 2002/2008:A-F and 2002/2010:A-F were cancelled, due to non-fulfillment of certain exercise criteria. According to the terms, the exercise price of the 2002/2005:A series of warrants was adjusted with the 2003 dividend per share. If fully exercised, the outstanding stock options will entail an increase in share capital of approximately SEK 68 million, equal to a 0.5 percent increase in the number of shares.
Swedish GAAP
Differences in principles. TeliaSoneras
consolidated financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS/IAS). Effective
January 1, 2004, IFRS/IAS deviates from Swedish GAAP, relevant to
TeliaSonera, with respect to goodwill amortization, write-ups of
tangible fixed assets and certain Swedish taxes imposed on
pension costs and pension liabilities.
Translation into Swedish GAAP. Application of Swedish GAAP affects consolidated net income and shareholders equity as follows.
SEK in millions | Apr-Jun |
Apr-Jun |
Jan-Jun |
Jan-Jun |
Net income under IFRS/IAS | 3,148 |
2,983 |
6,553 |
4,592 |
Goodwill amortization | -899 |
|
-1,729 |
|
Write-up of tangible fixed assets | -199 |
|
-399 |
|
Goodwill amortization, associated companies | -280 |
|
-511 |
|
Pension-related taxes | -593 |
|
-593 |
|
Deferred tax | 222 |
|
278 |
|
Net income under Swedish GAAP | 1,399 |
2,983 |
3,599 |
4,592 |
SEK in millions | June 30, |
Dec 31, |
Shareholders equity under IFRS/IAS | 117,424 |
112,393 |
Goodwill amortization | -1,727 |
|
Write-up of tangible fixed assets | 4,550 |
4,949 |
Goodwill amortization, associated companies | -511 |
|
Pension-related taxes | -593 |
|
Deferred tax | -1,108 |
-1,386 |
Exchange rate difference | -1 |
|
Shareholders equity under Swedish GAAP | 118,034 |
115,956 |
Finnish GAAP
The following information is provided pursuant to the Finnish
Financial Supervision Authority decision no. 28/269/2002.
This interim report has been prepared in accordance with chapter 2, section 5 of the Finnish Securities Markets Act. TeliaSonera prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS/IAS). The main differences between Finnish Accounting Standards (Finnish GAAP) and IFRS/IAS, relevant to TeliaSonera, are described in TeliaSoneras Annual Report for 2003. As discussed above, TeliaSonera has decided to adopt IFRS 3 as of January 1, 2004, involving among other things that goodwill is no longer amortized. Finnish GAAP require amortization of goodwill. Otherwise, there were no material changes in the first half of 2004.
Parent Company
The parent company TeliaSonera AB, which is domiciled in Stockholm, comprises the Groups Swedish activities in development and operation of fixed networks and basic production of network services. The parent company also includes Group management functions and the Groups internal banking operations.
Net sales for the first half were SEK 10,641 million (10,872), of which SEK 8,281 million (8,566) was billed to subsidiaries. Earnings before appropriations and taxes ended higher, at SEK 3,654 million (3,095), due to improved operating income. Earnings after appropriations and taxes were SEK 2,693 million (1,655).
Shareholders equity decreased to SEK 94,213 million (96,269 at year-end). Retained earnings amounted to SEK 21,514 million (23,209).
The balance sheet total decreased to SEK 135,656 million (137,112 at year-end). Cash flow from operating activities improved to SEK 4,438 million (4,120) and cash flow before financing activities to SEK 8,060 million (7,491). Net borrowings increased to SEK 5,611 million (3,196 at year-end). Cash and cash equivalents totaled SEK 10,968 million (8,809).
The equity/assets ratio (including the equity component of untaxed reserves) was 75.4 percent (74.2 at year-end).
Total investments for the first half amounted to SEK 1,646 million (3,863), including SEK 1,254 million (983) in tangible fixed assets, primarily fixed-line installations. Other investments totaling SEK 392 million (2,880, of which SEK 2,581 million reflected the purchase price consideration for Sonera) were primarily attributable to capital infusions in subsidiaries and associated companies. Of the capital infusions to subsidiaries, SEK 2 million (46) was provided through debt conversion.
Due to operations acquired in the second quarter, the number of employees as of June 30, 2004 was 3,875 compared to 2,982 at year-end.
Financial Information/"Underlying" Measures of
Results of Operations
This interim report includes information on "underlying"
measures of TeliaSoneras results of operations, such as
"EBITDA excluding non-recurring items" and "Operating
income excluding non-recurring items." EBITDA equals
operating income before depreciation, amortization and write-downs,
excluding income from associated companies. Non-recurring items
include write-downs, capital gains/losses, restructuring/phase-out
of operations and personnel redundancy costs. TeliaSoneras
management uses operating income excluding non-recurring items as
the principal measure for monitoring profitability in internal
reporting. Management believes that, besides operating income,
EBITDA excluding non-recurring items and operating income
excluding non-recurring items are also measures commonly reported
and widely used by analysts, investors and other interested
parties in the telecommunications industry. Accordingly, these
"underlying" measures are presented to enhance the
understanding of TeliaSoneras historical operating
performance.
These "underlying" measures, however, should not be considered as alternatives to operating income as indicators of our operating performance. Similarly, EBITDA excluding non-recurring items should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. EBITDA excluding non-recurring items and operating income excluding non-recurring items are not measures of consolidated financial performance under IFRS/IAS or U.S. GAAP and may not be comparable to other similarly titled measures for other companies. These "underlying" measures are not meant to be predictive of potential future results.
Forward-Looking Statements
This interim report contains statements concerning, among
other things, TeliaSoneras financial condition and results
of operations that are forward-looking in nature. Such statements
are not historical facts but, rather, represent TeliaSoneras
future expectations. TeliaSonera believes that the expectations
reflected in these forward-looking statements are based on
reasonable assumptions; however, forward-looking statements
involve inherent risks and uncertainties, and a number of
important factors could cause actual results or outcomes to
differ materially from those expressed in any forward-looking
statement, including TeliaSoneras market position, growth
in the telecommunications industry in Europe, the effects of
competition and other economic, business, competitive and/or
regulatory factors affecting the business of TeliaSonera and the
telecommunications industry in general. Forward-looking
statements speak only as of the date they were made, and, other
than as required by applicable law, TeliaSonera undertakes no
obligation to update any of them in light of new information or
future events.