TeliaSonera Interim Report January – September 2015

Solid core business
THIRD QUARTER SUMMARY

  · Net sales increased 6.3 percent to SEK 27,029 million (25,417). Net sales in
local currencies, excluding acquisitions and disposals, increased 2.4 percent.
Service revenues in local currencies, excluding acquisitions and disposals,
decreased 0.5 percent.
  · EBITDA, excluding non-recurring items decreased 0.9 percent in local
currencies, excluding acquisitions and disposals. In reported currency, EBITDA,
excluding non-recurring items, increased 3.1 percent to SEK 9,730 million
(9,439). The EBITDA margin, excluding non-recurring items, decreased to 36.0
percent (37.1).
  · Operating income, excluding non-recurring items, increased 3.0 percent to
SEK 7,486 million (7,266).
  · Net income attributable to owners of the parent company increased 12.7
percent to SEK 4,589 million (4,073) and earnings per share to SEK 1.06 (0.94).
  · Free cash flow decreased to SEK 4,699 million (6,387), mainly explained by
lower dividend from MegaFon as the company intends to pay out dividends in two
tranches in 2015.
  · Group outlook for 2015 is changed – EBITDA excluding non-recurring items, in
local currencies, excluding acquisitions and disposals, is expected to be
slightly below the level in 2014.

NINE-MONTH SUMMARY

  · Net sales increased 7.9 percent to SEK 80,186 million (74,328). Net sales in
local currencies, excluding acquisitions and disposals, increased 1.8 percent.
Service revenues in local currencies, excluding acquisitions and disposals,
decreased 1.0 percent.
  · Net income attributable to owners of the parent company was unchanged at SEK
11,561 million (11,563) and earnings per share at SEK 2.67 (2.67).
  · Free cash flow increased to SEK 13,859 million (11,412), mainly due to
dividends from Turkcell.


Comments by Johan Dennelind,
President and CEO

”In the third quarter, there was an encouraging performance in our core
operations in Sweden and Europe with both regions turning to positive organic
EBITDA growth. Eurasia remained impacted by macro-economic pressure and high
competition in parts of the footprint, particularly affecting our operations in
Kazakhstan while performance in Nepal remained strong.

In Sweden, we continue to execute on our superior network strategy and expect to
invest more than SEK 6 billion this year, to a large extent related to fiber and
4G. The positive effects are gradually becoming visible and organic service
revenue growth improved to 1 percent, supported by higher ARPU in mobile,
broadband and TV together with high number of fiber deliveries. Growth in the
consumer segment remained healthy and pressure in enterprise eased slightly in
the quarter. As a result of higher service revenues and good cost control, the
EBITDA margin increased by almost 1 percentage point compared to the
corresponding period last year.

The integration of the acquired Tele2 business in Norway is well on track.
Overall performance was solid with good organic growth and continued support
from synergies. On a further positive note, our operations in all three Baltic
countries delivered higher profits in the quarter. We continue to develop our
customer propositions in the region, which was recently highlighted by our
announced business combination in Lithuania between Teo and Omnitel.

In early September, we announced the withdrawal of the proposed merger with
Telenor in Denmark as the parties were not able to agree with the European
Commission on the merger conditions. It is still our view that returns remain
insufficient and we will continue to seek ways to improve profitability in our
Danish operation.

The overall performance in Eurasia was impacted by increased margin pressure in
Kazakhstan. Price competition is fierce in the country and profitability was
also affected by increased interconnect costs due to higher off-net volumes
following recent product launches. We have undertaken actions to mitigate the
impact but the expectation is that the trends will continue short term. Our
business in Nepal managed the impact of the earthquake earlier this year in an
impressive way and maintained solid performance in the quarter.

We continue to shape TeliaSonera for the future and further outlined our
priorities by the recent decision to increase focus on our operations in Europe
and Sweden and reduce the presence in Eurasia. In the past two years, we have
put a lot of effort into improving the Eurasian operations, particularly from a
corporate governance and sustainability perspective. In our view, these units
are now in better shape and can be further developed by new owners. The process
to leave the region has already commenced and we will continue to make updates
as we progress.

Looking ahead, we expect both Region Sweden and Europe to show further progress
in the fourth quarter, but that the challenges will remain in Eurasia,
accentuated by Kazakhstan. As a result, we fine-tune our full-year outlook and
expect EBITDA, on a local organic basis to be slightly below last year’s level,
and foresee CAPEX at around SEK 17 billion. The outlook excludes the synergy
expectations for Norway which we raised in the previous quarter to SEK 700
million for 2015 with a run rate of SEK 1 billion when fully implemented in
2016”.

Stockholm, October 20, 2015

Johan Dennelind
President and CEO


Questions regarding the reports

TeliaSonera AB
www.teliasonera.com/investors
Tel. +46 8 504 550 00
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 October 20, 2015.