TeliaSonera Interim Report January – June 2015

Executing on our strategic agenda

SECOND QUARTER SUMMARY

  · Net sales increased 8.5 percent to SEK 27,115 million (24,985). Net sales in
local currencies, excluding acquisitions and disposals, increased 1.9 percent.
Service revenues in local currencies, excluding acquisitions and disposals,
decreased 1.3 percent.
  · EBITDA, excluding non-recurring items decreased 4.0 percent in local
currencies, excluding acquisitions and disposals. In reported currency, EBITDA,
excluding non-recurring items, increased 4.0 percent to SEK 9,190 million
(8,836). The EBITDA margin, excluding non-recurring items, decreased to 33.9
percent (35.4).
  · Operating income, excluding non-recurring items, decreased 7.6 percent to
SEK 5,862 million (6,347).
  · Net income attributable to owners of the parent company decreased 8.1
percent to SEK 3,258 million (3,545) and earnings per share to SEK 0.75 (0.82).
  · Free cash flow increased to SEK 6,307 million (2,469), mainly due to
Turkcell dividends of SEK 4,722 million, net of tax.
  · Group outlook for 2015 is unchanged.

FIRST HALF SUMMARY

  · Net sales increased 8.7 percent to SEK 53,156 million (48,911). Net sales in
local currencies, excluding acquisitions and disposals, increased 1.5 percent.
Service revenues in local currencies, excluding acquisitions and disposals,
decreased 1.3 percent.
  · Net income attributable to owners of the parent company decreased 6.9
percent to SEK 6,973 million (7,490) and earnings per share to SEK 1.61 (1.73).
  · Free cash flow increased to SEK 9,160 million (5,025), mainly due to
Turkcell dividends of SEK 4,722 million, net of tax.


Comments by Johan Dennelind,
President and CEO

”TeliaSonera is on a journey of change to become a new generation telecoms
company and we will achieve this by enhancing our core operations and explore
opportunities in adjacent areas. In order to succeed, we need to drive
innovation across the group to improve customer experience and deliver new
relevant services. We will engage with partners to differentiate and speed up
time to market. In the past quarter we have taken several new initiatives,
particularly in the music field, highlighted by our new innovation partnership
with Spotify.

In the second quarter, organic service revenues and EBITDA remained slightly
under pressure, while reported numbers were supported by the acquisition of
Tele2 in Norway and currency effects. Free cash flow improved significantly
thanks to the dividend payment from Turkcell.

In Sweden, pressure on profitability eased in the quarter. We continue to invest
in our networks to offer our customers superior connectivity wherever they are.
Our mobile, broadband and TV operations all delivered positive service revenue
growth, supported by higher ARPU and positive net customer intake, while fixed
telephony continued to decline. Our recent price changes in the B2C segment are
expected to support performance going forward, whereas competition in the B2B
segment remains fierce. Mobile data consumption continued to increase, supported
by a higher share of 4G-enabled handsets and two-thirds of data traffic is now
handled by our 4G network. Our fiber roll-out gained further momentum backed by
strong consumer demand. We expect to connect more than 50,000 single-family
homes in 2015, an increase by around 50 percent compared to last year. At the
end of the period we made changes in the leadership team to further boost our
commercial agenda.

The integration of Tele2 Norway is progressing at full steam and synergy
execution is running ahead of plan, supporting profitability in the quarter. We
raise our synergy target from SEK 800 million to around SEK 1 billion, of which
approximately SEK 700 million is expected to be achieved this year and the full
run rate in 2016. We are also fulfilling our commitment to the Norwegian
customers by investing significantly in our mobile network and a new milestone
was reached in June when 4G-population coverage surpassed 90 percent.

In Eurasia, the quarter was challenging in several aspects. In late April, Nepal
was hit by a devastating earthquake impacting the people of the country. Our
local team has made a significant effort maintaining service functionality and
securing reliable communications after this critical event. TeliaSonera has also
via Ncell made major long term commitments to support the rebuild of Nepal. In
Kazakhstan, price competition remains fierce and continues to impact service
revenue growth and profitability. We work hard to strengthen competitiveness and
recently launched new offerings to improve our customer proposition, but the
challenging environment is likely to remain near term. Further, Swedish media
reported on the privatization of Azercell, which took place seven years ago.
TeliaSonera investigated this transaction already in 2013 and we have submitted
our findings to Swedish authorities.

Looking ahead, we expect the earnings trend to improve somewhat in the second
half of the year and reiterate our full year outlook, but we see increased risks
related to performance in Eurasia. Group EBITDA, on a local organic basis and
excluding synergies in Norway, is anticipated to remain around last year’s
level, while CAPEX is estimated to be approximately SEK 17 billion, excluding
license and spectrum fees.”

Stockholm, July 17, 2015

Johan Dennelind
President and CEO


Questions regarding the reports
TeliaSonera AB
www.teliasonera.com/investors
Tel. +46 8 504 550 00

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 July 17, 2015.