Slide 1: Telia Company Q4 2023
Telia Company Q4 2023 January 26, 2024
Slide 2: A strong end to the year
A strong end to the year Solid Q4 financial and operational Telco performance ‒ Mobile growth improved to +3.9% and fixed service revenue increased by +2.5% +3.3% Service revenue growth ‒ Consumer growth was solid (+3.2%) as was Enterprise (+3.0%) (Telco operations, LFL) ‒ EBITDA growth remained str
Slide 3: Overview: Telco operations
Overview Telco operations
Slide 4: Sweden financials
Sweden financials Service revenue Service revenue split Adj. EBITDA Reported currency, in SEK millions, like for like growth Reported currency, in SEK millions, like for like growth Reported currency, in SEK millions, like for like growth -1.0% +0.4% +1.8% +2.2% +2.8% +1.0% +2.8% +4.1% +4.3% +4.7% -
Slide 5: Sweden KPIs
Sweden KPIs Mobile postpaid subs. and ARPU Broadband subs. and ARPU TV subs. and ARPU Subscriptions ’000, ARPU in SEK Subscriptions ’000, ARPU in SEK Subscriptions ’000, ARPU in SEK 255 333 336 341 218 253 252 326 324 199 198 204 250 250 191 100 85 70 61 50 3,886 3,891 3,905 3,920 3,890 1,275 1,298
Slide 6: Finland
Finland Service revenue Adj. EBITDA Mobile postpaid subs. and ARPU Reported currency, in SEK millions, like for like growth Reported currency, in SEK millions, like for like growth Subscriptions ’000, ARPU in EUR +2.2% +2.3% +2.3% +1.9% +2.1% -5.5% +1.2% +2.2% +10% +11% 18.6 19.2 3,687 1,392 18.0 18
Slide 7: Norway
Norway Service revenue Adj. EBITDA Mobile postpaid subs. and ARPU Reported currency, in SEK millions, like for like growth Reported currency, in SEK millions, like for like growth Subscriptions ’000, ARPU in NOK +3.2% +3.8% +5.4% +5.8% +4.2% +2.5% +2.7% +14% +11% +8.9% 301 297 296 3,382 288 3,223 3,
Slide 8: Lithuania & Estonia
Lithuania & Estonia Lithuania Estonia Reported currency, in SEK millions, like for like growth Reported currency, in SEK millions, like for like growth +7.1% +9.9% +6.5% +9.9% +4.3% +13% +13% +10% +19% +0.7% +5.1% +5.8% +8.3% +7.2% +6.2% +8.1% +10% +14% +15% +11% 1,124 554 435 1,052 1,074 888 890 40
Slide 9: Overview: TV & Media
Overview TV & Media
Slide 10: TV & Media
TV & Media Service revenue Adj. EBITDA Direct OTT subs. and ARPU Reported currency, in SEK millions, like for like growth Reported currency, in SEK millions, like for like growth Subscriptions ’000, ARPU in SEK -2.7% -2.4% -7.6% -8.6% -8.8% n/a n/a n/a -44% n/a 188 186 186 173 178 2,564 2,372 159 17
Slide 11: Overview: Financials
Overview Financials
Slide 12: Service Revenue & EBITDA
Service Revenue & EBITDA Service revenue Adjusted EBITDA Like for like growth Like for like growth Continuing operations Continuing operations Telco operations 9.3% Telco operations 3.9% 7.6% 7.3% 3.2% 3.3% 5.4% 4.7% 2.4% 2.6% 1.9% 1.9% 1.7% 1.6% 1.2% 0.0% 0.7% -0.6% -0.8% -2.0% Q4 22 Q1 23 Q2 23 Q3
Slide 13: OPEX & CAPEX
OPEX & CAPEX OPEX excl. energy CAPEX excl. licenses Like for like growth Reported currency, in SEK billions -0.1% 4.8 3.5 3.7 3.6 2.9 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Mobile NW Fixed NW Product & IT Other ‒ OPEX remained unchanged as increased resource costs, due to higher ‒ Reduction of SEK 1.2bn comp
Slide 14: Cash Flow
Cash Flow Reported currency, in SEK billions Q4 23 Q4 22 Change Cash flow Q4 improved vs. LY Adjusted EBITDA 7.5 7.0 0.5 ‒ EBITDA improved SEK 0.5bn from strong telco performance Restructuring and other adj. items -0.7 -0.3 -0.4 ‒ Cash CAPEX declined significantly as planned ‒ Restructuring up SEK 0
Slide 15: Net Debt & Leverage
Net Debt & Leverage Net debt and leverage ‒ Net debt decreased by SEK 5.2bn driven by strong OFCF generation, Total operations, reported currency, in SEK billions and leverage ratio partly offset by dividend distribution and license CAPEX ‒ Leverage declined as expected, ending the year well within
Slide 16: Overview: Strategy
Overview Strategy
Slide 17: We reinvent better connected living
We reinvent better connected living through our… Digital connectivity Digital experiences Digital infrastructure Accelerating the connected Accelerating customer loyalty and Growing the digital infrastructure lives of everyone revenue growth beyond connectivity of the Nordic and Baltic region by exc
Slide 18: Return to growth confirmed
Inspire Connect Transform Deliver Return to growth confirmed Service revenue development Like for like growth, telco operations 3.9% 3.3% 10 quarters 6 quarters 3.2% 2.9% of consecutive service of consecutive mobile 2.5% 2.6% 2.4% revenue growth in Telco NPS growth in Consumer 1.7% 1.1% 1.2% -0.7% 1
Slide 19: Ahead in network modernization
Inspire Connect Transform Deliver Ahead in network modernization Modernization Leading network position peak roll-out passed in 2022 5G pop. coverage and network quality over delivered 90% # new sites Sweden Finland Norway Estonia Denmark Lithuania ‒ Successfully front-loaded delivery ‒ Best in clas
Slide 20: Monetizing our connectivity – increasingly digital
Inspire Connect Transform Deliver Monetizing our connectivity – increasingly digital Monetizing our connectivity Building on our digital foundation Selling & servicing digitally leveraging our 5G and modernized 4G networks adding value as pioneer in enterprise mobile unlocking value potential of our
Slide 21: Driving out network legacy
Inspire Connect Transform Deliver Driving out network legacy Copper retirement on track 3G voice drive out on track Legacy network systems # copper central offices, Sweden % voice traffic, Sweden % service nodes VoLTE VoLTE / 2,850 Wifi Calling 66% 100% 100% 1,162 3G 3G 33% 2G 3% 24% 2G 2018 2023 20
Slide 22: Transforming to simplify, automate and scale
Inspire Connect Transform Deliver Transforming to simplify, automate and scale Products Processes Platforms Simplify and scale Improve and automate Simplify and re-use from bespoke solutions to common standard products from fractured processes to zero-touch journeys from complex legacy to modular, s
Slide 23: Fueling improved productivity
Inspire Connect Transform Deliver Fueling improved productivity People Partners Upskill and empower Focus and embed From siloed to agile, efficient, and digitally enabled from transactional to being part of Telia’s success +72% +84% -80% 0,8 BSEK Digitally enabled Near-shored employees System integr
Slide 24: Progress towards a more sustainable Telia
Inspire Connect Transform Deliver Progress towards a more sustainable Telia Climate and Digital Privacy and circularity inclusion security Target: Target: Target: Net zero by 2040 Top tier positions/ 2 million individuals reached through digital inclusion CO2 emissions halved by 2030 preferred suppl
Slide 25: A solid foundation
A solid foundation Inspiring customers Connecting everyone Transforming to digital Delivering sustainably With brands and experiences Through the most trusted, reliable To be simpler, faster, data driven Through an accountable and that go beyond connectivity and efficient modern networks and with lo
Slide 26: Overview: Looking ahead
Overview Looking ahead
Slide 27: Outlook 2024
Outlook 2024 Service revenue* Low single digit growth Adjusted EBITDA* Low to mid-single digit growth CAPEX excl. licenses and spectrum** Around SEK 14 billion Structural part of Operational Free Cash Flow In the range of SEK 7-8 billion * Like for like 27 ** Excluding CAPEX related to right of use
Slide 28: Multiple levers to sustain service revenue growth
Multiple levers to sustain service revenue growth Service revenue development Multiple levers in place to support 2024 growth ambitions Like for like growth, illustrative 2024e ‒ A more structural approach to pricing implemented. Pricing expected to have a similar or slightly lower impact as in 2023
Slide 29: EBITDA growth underpinned by service revenue and efficiency improvements
EBITDA growth underpinned by both service revenue and efficiency improvements Adjusted EBITDA development Multiple levers in place to support 2024 growth ambitions Like for like growth, illustrative 2024e ‒ Service revenue momentum to continue ‒ Lower general inflationary cost headwinds including en
Slide 30: CAPEX level supports continued business momentum
CAPEX level supports continued business momentum CAPEX excl. licenses development Interest paid development Booked CAPEX, reported currency, in SEK billions Reported currency, in SEK billions, illustrative 2024e 15.3 15.3 13.6 ~14 3.3 2.5 2.5 2021 2022 2023 2024e 2021 2022 2023 2024e Mobile NW Fixed
Slide 31: EBITDA drives cash flow growth
EBITDA drives cash flow growth SEK billion 2021 2022 2023 2024e Comments on 2024 Adjusted EBITDA 28.7 29.0 30.3 ▲ ‒ To increase from revenue growth and efficiencies Cash CAPEX excl. licenses -13.9 -14.7 -13.6 ▼ ‒ To increase broadly in-line with revenue growth Interest costs -2.5 -2.5 -3.3 ▼ ‒ ~SEK
Slide 32: Financial framework reconfirmed
Financial framework reconfirmed Financial framework Leverage* Dividend proposal to AGM Leverage* 3.0 2.0-2.5x 2.00 Strong balance sheet 2.14x 2.35x 2.32x Credit rating A- to BBB+ 2.5 SEK per share paid in four tranches Attractive DPS floor of 2.00 with an shareholder ambition for low to mid- 2.0 ren
Slide 33: Overview: Conclusion
Overview Conclusion
Slide 34: In summary….
In summary…. ‒ Service revenue growth built and sustained throughout 2023 with Inspiring customers multiple levers in place to support continued low single digit growth With brands and experiences that go beyond connectivity ‒ EBITDA growth also expected to continue underpinned by both service reven
Slide 35: Q&A
Overview Q&A
Slide 36: Thank you
Overview Thank you
Slide 37: Appendix
Overview Appendix
Slide 38: Strategy highlights
Strategy highlights Inspiring customers Connecting everyone Transforming to digital Delivering sustainably With brands and experiences Through the most trusted, reliable To be simpler, faster, data driven Through an accountable and that go beyond connectivity and efficient modern networks and with l
Slide 39: Telia's climate commitments
Telia’s climate commitments 2022 2024 2025 2026 2030 2040 Achieve Net Zero by reducing value chain CO2e emissions (scope 1, 2 and 3) by 90%, in line with the new SBTi Net Zero Corporate Standard, and offset (neutralize) residual emissions* • Reduce CO2e emissions in the whole value chain (scope 1, 2
Slide 40: Latest ESG awards and ratings
Latest ESG awards and ratings MSCI ESG rating EcoVadis Sustainalytics World Benchmark Alliance “AAA” (highest) “Platinum supplier” rating 19.5 Low Risk, Industry rank 12 out of 228 No 12 on digital inclusion in an assessment of 200 global tech companies CDP Climate Rating ISS ESG rating FTSE4Good Gl
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