Year-end Report January - December 2 Lars Nyberg President and CEO 1 Continued revenue growth and margin expansion Net sales SEK 1,35 million (16,979) Increased 2.6% in local currencies EBITDA* SEK 36,91 million (36,897) Increase of.7% in local currencies Earnings per share SEK.2 (.73) Lower income from associates and FX Free cash flow SEK 9,629 million (12,91) Lower dividends from associates and spectrum January-December 2 * Excl. non-recurring items 2 1
Improved margins for the third consecutive year Net sales and growth* EBITDA margin** 125 1 75 5 +2.6% 1. % 35% 3% 31.8% 35.% 25 25% 28 29 21 2 2% 28 29 21 2 * In local currencies and excl. acquisitions ** Excl. non-recurring items 3 Lower roaming prices lead to new behavior MMO Roaming volumes and revenues* +219% +% -2% +% +1% +1% H1 1 H2 1 H1 H2 H1 1 H2 1 H1 H2 * Example for Mobility Sweden for roaming in the Nordic and Baltic countries 2
Ability to monetize on mobile data growth MMO Net sales split* Mobile data volumes and net sales growth* 2 1% 16 12 +7% Equipment Roaming, IC Messaging 8% 6% Volume 8 Data Voice, other % Net sales 2% 21 2 % Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec * Mobility Sweden 5 Expansion of our G coverage continues MMO Launch of G tablets in Q 2 G handsets available in Q1 212 6 3
Fiber roll-out drives TV and triple-play MMO Number of TV subscriptions Millions 1.2 Estonia Lithuania.6 Denmark Norway Finland Sweden Fiber roll-out and VDSL upgrade continue More than.5 million TV subscriptions in Sweden 27 2 7 3G services available in all Eurasian markets ~35 million subscriptions ( millions) 3.8 29 2 Moldcell Tcell Geocell Azercell Ncell Ucell Kcell Mobile data as % of revenues 6.6% 29 2 8
Yoigo reached EBIT breakeven in Q EUR million Net sales and EBITDA-CAPEX* 825 626-56 385-6 213-227 -193-151 +1% 26 27 28 29 21 2 26 27 28 29 21 2 Passed 3 million subscriptions in December 2 EBIT and cash flow** positive in Q 2 * CAPEX excl. licenses and spectrum fees ** Cash flow incl. interest and taxes 9 Ordinary dividend of SEK 2.85 per share* Ordinary dividend and pay-out ratio* SEK 3. +% 1% 2.5 2. 1.5 1..5 68% 8% 6% % 2%. 23 2 25 26 27 28 29 21 2* % * Proposed dividend for fiscal year 2 ** For 25, 26 and 27, EO dividends of SEK 2.25, SEK.5 and SEK 2.2 were paid. In April, 2 a buyback of SEK 1 billion was completed 1 5
Looking ahead MMO Outlook for 212 Growth in net sales* expected to be 1-2%* EBITDA margin** to remain at the same level as in 2 CAPEX-to-sales*** ratio between 13-1% * In local currencies and excl. acquisitions ** Excl. non-recurring items *** Excl. license and spectrum fees Year-end Report January - December 2 Per-Arne Blomquist Executive Vice President and CFO 12 6
2 result versus outlook Outlook 2 Result Growth in Net sales* Around 3% 2.6% Addressable cost base* EBITDA margin** Growth in cost base below the growth in net sales Improved compared with 21 (3.5%).6% 35.% CAPEX-to-sales ratio*** 13-1% 1.% * In local currencies and excl. acquisitions ** Excl. non-recurring items *** Excl. license and spectrum fees 13 Financial highlights Q 2 SEK million Oct Dec 2 Oct Dec 21 Change % Local ccy % Net sales 27,123 26,851 1 2 EBITDA* 9,191 9,2 2 3 Depreciation, amortization -3,12-3,189 - Income from associated companies 1,652 2,1-23 Operating income* 7,519 7,969-6 EPS, SEK 1.15 1.18-3 Free Cash Flow 523 1,72-7 * Excl. non-recurring items 1 7
Mobility Services - smartphones drive growth Net sales and EBITDA margin* 15 +% LC 32% 12 31% 9 3% 6 29.7% 29% 3 28.8% 28% 27% Q 21 Q 2 Positive trend in revenue growth in all Baltic countries in the fourth quarter Robust growth in Sweden and Spain continued Fierce competition in Denmark and Norway. Measures taken to restore profitability in Denmark Net sales and EBITDA margin* 6 5 3 2 1 +% LC 3.9% 29.5% 21 2 33% 32% 31% 3% 29% 28% * Excl. non-recurring items 15 Broadband Services improving profitability Net sales and EBITDA margin* 12 -% LC 33% 1 32% 8 31% 6 31.5% 3% 3.3% 2 29% 28% Q 21 Q 2.5 million homes and offices now connected by fiber Milestone reaching.5 million TV subscriptions in Sweden Pay-TV market share now % (1) in Sweden Net sales and EBITDA margin* 5-6% LC 35% 3% 3 33% 2 1 32.7% 32.9% 32% 31% 21 2 3% * Excl. non-recurring items 16 8
Eurasia double digit revenue growth Net sales and EBITDA margin* 6 +13% LC 56% 5 5% 5.1% 52% 3 52.6% 2 5% 1 8% 6% Q 21 Q 2 Double digit revenue growth and EBITDA margin above 5% in 2 Ncell in Nepal became market leader in the fourth quarter Agreement signed to increase ownership in Kcell in Kazakhstan Net sales and EBITDA margin* 2 +17% LC 56% 16 5% 12 52% 8 5.7% 51.1% 5% 8% 21 2 6% * Excl. non-recurring items 17 Healthy balance between revenues and costs Growth in net sales* Growth in addressable cost base* 6% 5% % 3% 2% 1% % Q1 1 Q2 1 Q3 1 Q 1 Q1 Q2 Q3 Q 6% % 2% % -2% -% -6% Q1 1 Q2 1 Q3 1 Q 1 Q1 Q2 Q3 Q * In local currencies and excl. acquisitions 18 9
Continued improvement in EBITDA margin EBITDA margin* EBITDA margin*, quarters rolling % 38%. p.p. % 38% 35.% 35% 35% 33% 33% 3% 3% 28% 28% 25% Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q 25% Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q 9 9 9 9 1 1 1 1 9 9 9 9 1 1 1 1 EBITDA margin* reached 33.9% (33.5) Improving EBITDA margin* for 13 consecutive quarters * Excl. non-recurring items 19 Lower income from associated companies MMO Income from associated companies, 2.5 1 2. 2.1 1.7 8 7.8 5.7 1.5 Turkcell -27% 6 Turkcell -8% 1..5 MegaFon -9% 2 MegaFon -13%. Q 21 Q 2 21 2 Turkcell is reported with one-quarter lag 2 1
EPS impacted by FX and associates EPS, Q 2 SEK EPS, full year 2 SEK 1.3 5.5 1.2 1.1 1. 1.18 +.1 -.6 +.6 -.8 -.6 -.1 +. +.7 1.15 5..5. +.18.73 -.31 -.2 +.15 +.12 -.39 -.16 -.1.2.9 3.5.8 Q Operat. Ass Non 21 comp rec items FX Net fin Min int Taxes Buy Q back 2 3. 21 Operat. Ass Non comp rec items FX Net fin Min int Taxes Buy 2 back Associated companies and FX lowered earnings per share in Q Higher earnings from operations, SEK.18 per share during 2 21 Stable CAPEX-to-sales ratio expected CAPEX* split 2 CAPEX-to-sales ratio* 28% 5% 37% 3% Mobility Broadband Eurasia Other 25% 2% 15% 1% 5% 17.% 1.% % Q 1 Q 21 2 212 CAPEX* amounted to SEK 1.6 billion (1.) or SEK 17.2 billion incl. licenses and spectrum fees during 2 CAPEX-to-sales for 212 is expected to be approx. 13-1%, excl. license and spectrum fees * Excl. license and spectrum fees 22
Lower cash flow due to licenses and dividends Free cash flow, Q 2 +1.1 Free cash flow, full year 2 +1. 12.9 +. 1.7 +.2 -.9 -.3-1.2 -.1-2.9 -.1 9.6 -.6.5 -.7 Q 21 EBITDA* Taxes paid Divi from ass comp Interest paid Cash CAPEX Other Q 2 21 EBITDA* Taxes paid Divi from ass comp Interest paid Cash CAPEX Other 2 No dividends received from associated companies and SEK 1.3 billion (.) paid in licenses Turkcell s dividend proposal for 2 is SEK 1.9 billion for TeliaSonera. SEK 2.7 billion paid for licenses (.9) * Excl. non-recurring items 23 Kcell transaction will increase Net debt Net debt and Net debt / EBITDA* 75 6 65.1 2.5 2. Acquisition of 9% of the shares in Kcell for a total of USD 1.5 billion. IPO process of Kcell initiated 5 1.76x 1.5 Moody s reiterated A3 rating while lowering outlook (Dec 2) 3 15 1..5 S&P reiterated A- rating and Stable outlook (Jan 212) Q1 1 Q2 1 Q3 1 Q 1 Q1 Q2 Q3 Q. * Excl. non-recurring items, quarters rolling 2 12
Debt maturity schedule MMO Debt Maturing next 12 months Dec 31, 2 6 5 3 2 Debt per Q 2 Gross debt SEK 79.8 billion Net debt SEK 65.1 billion Net debt/ebitda 1.76x 1 Jan 212 Feb -12 Mar -12 April -12 May -12 June -12 July -12 Aug -12 Sep -12 Oct -12 Nov -12 Dec -12 Debt Portfolio Maturity Schedule 212 and onwards 12 1 8 6 2 212-13 -1-15 -16-17 -18-19 -2-21 -22-23 -2-25 -26-27 -28-29 -3-31 25 Highlights Positive revenue growth continues Eurasia, Spain and Mobility Sweden Important milestones reached Yoigo EBIT and cash flow breakeven Ncell market leader in Nepal 3G licens awarded to Azercell in Azerbaijan Increasing ownership in Kcell in Kazakhstan Effective ownership 61.9% (37.9) after IPO 26 13
Outlook for 212 Growth in Net sales* Within the range of 1-2% EBITDA margin** Remain at the same level as 2 (35.%) CAPEX-to-sales ratio*** 13-1% * In local currencies and excluding acquisitions ** Excl. non-recurring items *** Excl. license and spectrum fees 27 Q&A 28 1
TeliaSonera AB credit ratings (A3/A-) 5 AA AA- 3 A+ A A- TeliaSonera AB long-term ratings migration history 22-to-today 2 1 Q1-2 Q1-3 Q- Q-5 Q-7 Q-9 Q3-1 Q1- Q3- Moody s (A3/P-2) January 8, 23, lowered long-term debt rating to A2 November 1, 26, outlook changed to Negative October 3, 27, lowered long- and short-term debt rating to A3 and P-2 respectively Feb 2, debt ratings confirmed Outlook: Negative Standard & Poor s (A-/A-2) February 5, 23, lowered long-term debt rating to A October 28, 25, lowered long-term debt rating to A- and short-term debt rating to A-2 August 2, debt ratings confirmed Outlook: Stable 29 Liquidity position TeliaSonera Group Cash and cash equivalents, less blocked funds approx. SEK 9.5 billion Committed bank lines Maturity Size Amount undrawn Syndicated revolving credit facility Dec 217 EUR 1 billion EUR 1 billion Bilateral credit facility Apr 213 SEK 1. billion SEK 1. billion Syndicated revolving credit facility Sep 213 EUR 665 million EUR 665 million December 31, 2 3 15
Strong financial key ratios Dec 31, 2 Dec 31, 21 Return on equity* 16.8 17.8% Return on capital employed* 16. 16.9% Equity/assets ratio. 8.% Net debt/equity ratio 58.3 39.3% Net Debt/EBITDA rate* multiple 1.76x 1.28x * Rolling 12 months, EBITDA excl. non-recurring items 31 Organic revenue growth Revenue growth (%) Q 2 Reported growth of which currency of which disposals of which organic Mobility Services 3.5 -.3. 3.8 Broadband Services -.1 -..2-3.9 Eurasia 8.9-3.8. 12.7 The Group 1. -1. -.1 2.1 32 16
Statement of cash flows SEK million Q 2 Q 21 Diff EBITDA excluding non-recurring items 9,191 9,2 189 Dividends received from ass companies 1 89-893 Interest paid (net) -98-567 -31 Income taxes paid -85-1,916 1,66 Payment of restructuring provisions -19-87 -13 Diff between paid/recorded pensions -393-321 -72 Changes in working cap and other items 268 78-8 Cash flow from operating activities 7,9 7,753-63 Cash CAPEX -6,596-6, -585 Free cash flow 523 1,72-1,219 33 Dividend policy The company shall target a solid investment grade long-term credit rating (A- to BBB+) to secure the company s strategically important financial flexibility for investments in future growth, both organically and by acquisitions The ordinary dividend shall be at least 5% of net income attributable to owners of the parent company Excess capital shall be returned to shareholders, after the Board of Directors 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 3 17
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. 35 18