Positive organic sales growth and higher margin
Second quarter summary

  · Net
sales in local currencies, excluding acquisitions and disposals,
increased 0.4
percent. In reported currency, net sales decreased 3.9 percent to
SEK 25,274
million (26,294).
  · The addressable cost base in local currencies, excluding
acquisitions and
disposals, decreased 4.1 percent. In reported currency, the
addressable cost
base decreased 6.6 percent to SEK 7,165 million (7,672).
  ·
EBITDA, excluding non-recurring items, increased 3.3 percent in
local
currencies, excluding acquisitions and disposals. In reported currency,
EBITDA,
excluding non-recurring items, decreased 1.2 percent to SEK 8,928
million
(9,034). The EBITDA margin, excluding non-recurring items, increased to
35.3
percent (34.4).
  · Operating income, excluding non-recurring items,
decreased 2.8 percent to
SEK 7,085 million (7,286). Operating income decreased
10.8 percent to 6,283
million (7,044), including non-recurring items of SEK
-802 million (-242).
  · Net income attributable to owners of the parent
company decreased 16.9
percent to SEK 4,031 million (4,852).
  · Earnings per
share decreased to SEK 0.93 (1.12).
  · Free cash flow was SEK 4,462 million
(3,062, excluding dividends from
MegaFon net of taxes of SEK 11,726 million).
 
· Group outlook for 2013 is unchanged.

First half summary

  · Net sales in
local currencies, excluding acquisitions and disposals,
decreased 0.3 percent.
In reported currency, net sales decreased 4.2 percent to
SEK 49,816 million
(51,987).
  · Net income attributable to owners of the parent company decreased
9.3
percent to SEK 8,139 million (8,974) and earnings per share to SEK 1.88
(2.07).
  · Free cash flow was SEK 6,876 million (5,255, excluding dividends
from
MegaFon net of taxes of SEK 11,726 million).

Comments by Per-Arne
Blomquist,
President and CEO

“In the second quarter, organic revenue growth
turned positive and margins
improved further. TeliaSonera continues to lead the
industry change in our
markets by shifting away from minute based voice
pricing, to new data centric
models. In addition, we maintain focus on securing
our long term profitability
by implementing efficiency measures and investing
for the future in 4G and
fiber.

In Mobility Services, revenue pressure eased
somewhat and margins strengthened,
supported by higher billed revenue and
reduced costs. It is particularly
encouraging that our Danish operations
reported an increase in billed revenues,
as the market has been challenging for
years. However, lower regulated
interconnect rates continued to put pressure on
revenues in all markets. In
Broadband Services, the fiber roll-out regained
momentum and in Sweden customer
demand currently exceeds our ability to
deliver. The cost base decreased, but
not enough to fully compensate for the
revenue decline. In Eurasia, organic
revenue growth remained around 14 percent,
supported by increasing data
consumption and subscription growth. Margins
continued to improve as a result of
further cost savings. In Nepal, we reached
a new milestone by passing 10 million
subscriptions.

In Sweden, Norway and
Denmark we launched new mobile offers to consumers, with
flat fees for voice
and messaging service together with bucket priced data
related to usage. In
Sweden, our consumer offer continued to attract more than
20 percent of new
sales and a similar package is also available for the SME
segment. In total, we
have gained about 180,000 new subscriptions on the new
price plans in
Scandinavia and the initial findings are promising.

Network quality and
capacity are crucial to meet the exploding demand for data;
therefore we will
further invest in 4G and mobile coverage, expand within fiber
and selectively
target acquisitions of existing fiber networks in our home
markets. We will
significantly expand our 4G network in Sweden, targeting 92
percent geographic
coverage in the next two years, utilizing existing 2G/3G
infrastructure to
ensure a cost efficient roll-out. Coverage is prioritized
across the group and
our Estonian operation extended its 4G network
significantly in the quarter and
has currently the best national 4G coverage in
Europe.

We continue to
implement our cost savings program launched at the end of last
year and
approximately 1,050 of the targeted 1,800 employees have been given
notice year
to date. Savings are expected to be further visible in the second
half of this
year and we remain committed to reducing the cost base by SEK 2
billion net by
the end of 2014.

The ownership disputes in our associated company Turkcell
continues with two
failed AGMs in the quarter. We welcome the decision on July
9, by the Privy
Council, stating the terms under which Çukurova can recover the
disputed shares
in Turkcell Holding from Altimo, an important step in resolving
the deadlock. It
is crucial that corporate governance is restored in Turkcell
and we fully
support a resumption of dividend payments.

The above mentioned
activities prove that we are executing on our strategy,
targeting the best
customer experience, high-quality networks and cost-efficient
operations. Based
on the performance for the first six months, we reiterate our
full year 2013
outlook.”


Questions regarding the reports
TeliaSonera AB
Investor
Relations
SE–106 63 Stockholm, Sweden
Tel. +46 8 504 550 00
Fax +46 8 611 46
42
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 July 17, 2013.