SWEDEN – DEVELOPMENT 2016

Improved profitability in region Sweden

SHARE OF GROUP TOTAL, CONTINUING OPERATIONS (%)

 

SEK in millions, except margins, operational data and changes

2016

2015

Change (%)

Net sales

37,251

37,336

-0.2

Change (%) local organic

-0.3

   

of which service revenues (external)

32,128

32,268

-0.4

change (%) local organic

-0.6

   

EBITDA
excl. non-recurring items

14,455

14,267

1.3

Margin (%)

38.8

38.2

 

Income from associated companies and joint ventures

1

-20

 

Operating income
excl. non-recurring items

9,569

9,797

-2.3

Operating income

9,360

9,284

0.8

CAPEX excl.
license and spectrum fees

7,119

6,179

15.2

% of service revenues

22.2

19.1

 

EBITDA excl. non-recurring items less CAPEX

7,337

8,088

-9.3

Subscriptions,
period-end (thousands)

     

Mobile

6,207

6,119

1.4

Fixed telephony

1,675

1,896

-11.7

Broadband

1,299

1,306

-0.5

TV

765

730

4.8

Employees, period-end

6,720

6,718

0.0

Additional (unaudited) segment information available at www.teliacom­pany.com; see also the preamble to this Report for information on restated financial information.

In region Sweden, the journey towards more connectivity and converged offerings continued. In the consumer segment, mobile billed revenues continued to grow and as the first operator in the world, Telia Sweden offered customers free mobile surf on the most popular social media sites and apps, including Facebook, Instagram and Twitter. Customers continued to demand fiber and a record of 186,000 new households were reached and SDU villa campaigns grew 44 percent. The enterprise segment remained challenging with high price pressure within the large enterprise segment. The offerings to SME and SoHo (Small office/Home office) customers was further strengthened with the launch of personal technicians in addition to personal advisors in order to assist and take care of the customers’ IT and technology. The year ended with Division X launching Telia Sense in the connected car space and Telia Zone which is a connected home play.

Net sales excluding acquisitions and disposals decreased 0.3 percent. Net sales in reported currency including acquisitions and disposals decreased 0.2 percent to SEK 37,251 million (37,336). The positive effect of acquisitions and disposals was 0.1 percent. Service revenues, excluding acquisitions and disposals, decreased 0.6 percent. Mobile service revenues increased 0.4 percent, supported by strong consumer and wholesale revenues that more than compensated for the decline in the enterprise segment. Mobile ARPU rose and the increase in postpaid subscriptions more than compensated for the decline in prepaid subscriptions. Fixed service revenues declined 0.6 percent due to the drop in revenues from traditional fixed telephony and various business solutions. However, fiber installation revenues continued to partly mitigate that drop. In addition, Swedish quality index (SKI) reported that Telia continues to have the most satisfied TV customers in Sweden which is shown in a continued strong intake. Furthermore, the TV ARPU displayed a double-digit growth. Broadband revenues grew boosted by growth in recurring fiber revenues and higher ARPU.

EBITDA, excluding non-recurring items, increased 1.3 percent to SEK 14,455 million (14,267) while EBITDA excluding non-recurring items, acquisitions and disposals increased 1.2 percent. The growth in mobile, broadband, TV, fiber and wholesale revenues, cost savings from transformation, procurement and general efficiencies were the main drivers behind the EBITDA growth despite the drop in revenues from traditional fixed telephony. In addition, new revenue streams such as value added and adjacent services also contributed to the EBITDA growth. The EBITDA margin increased to 38.8 percent (38.2).

Operating income, excluding non-recurring items, decreased 2.3 percent to SEK 9,569 million (9,797). Non-recurring items impacted operating income were SEK 209 million (514) and were mainly related to restructuring charges and an old court case partly offset by a divestment of real estate.

CAPEX increased to SEK 7,119 million (6,179). No licenses and spectrum were acquired during the year, since the anticipated 700 MHz auction was postponed. The investments were primarily in fiber, 4G and business transformation. Telia was awarded best mobile network which shows that superior network connectivity is created and that the customer journey from voice to data continued to be supported.