Telenor Asa Ord

Good morning, and welcome to Telenor's first quarter results presentation for 2026. Joining me today are our CEO, Benedicte Schildberg-Sassmann, and our CFO, Torbjörn Wist. Before we start, a quick reminder. Unless we state otherwise, all revenue and EBITDA growth rates are organic and on a constant currency basis. And EBITDA refers to adjusted EBITDA. Today's agenda will follow our usual structure, and at the end of the presentation, we'll open the line for Q&A. To give everyone a chance, we kindly ask each of you to limit yourself to one question. And with that, Benedicte, over to you.

Thank you so much, Frank, and good morning, everyone. In the first quarter, Telenor continued to execute on its strategy and deliver steady performance despite challenging external backdrops. The closure of the Strait of Hormuz pushed up consumer energy prices and created a new supply chain uncertainty, particularly across parts of Asia, including Bangladesh. We delivered service revenue growth of 1.6% and EBITDA growth of 3.1%. Free cash flow before M&A was 2.1 billion, a solid start to the year on cash generation. We also progressed well on our portfolio simplification, supporting our strategy to become a more Nordic-centric company over time. After divesting Tel Anor Pakistan at the end of 2025, we completed the sale of the 25% stake in True Corporation in March, receiving $30 billion in proceeds. The remaining 5% stake in True will be sold within two years. including the three proceeds, total free cash flow amounted to $32 billion in the quarter. Following these simplification milestones, we have a strong financial position. Leverage is at 1.2x, and we plan to commence our three-year $15 billion share buyback program after the AGM. In the Nordics, competition is still intense. but it has eased somewhat compared with the pressure we saw building through 2025. Mobile service revenue growth was around 3% when adjusted for business transfers. Fixed service revenues rose by 1% year over year. In March, we launched Sikre in Norway, an innovative security-integrated subscription. This is a good example of the services first strategy represented at the CND. In Asia, Bangladesh remains challenging. Energy supply vulnerabilities and cost of living pressure continue to outweigh the positive effects of the February election. And Grameen Fern returned to negative growth due to affordability pressure and tough data competitions. However, we remain confident in our medium and long-term ambitions as we invest in transformation and simplification to build an even stronger future-fit Telenor. However, we are lowering our EBITDA growth outlook for 2026 due to the top-line headwinds in Bangladesh and Finland and because of the effects of the transfer of managed IoT and coastal radio in the Nordics. Torbjörn will explain that in more detail. Turning to the Nordics. Growth has softened compared with the strong momentum we saw in 2025. In Q1, Nordic mobile service revenues grew by 2%, or close to 3%, excluding the internal transfer of the managed IoT business to Telenor Connection. Fixed service revenues grew 1%, supported by fiber growth in Norway. EBITDA in the Nordics grew 3.8% driven by service revenue growth and higher wholesale revenues in Norway. And we continue to see cost benefits from transformation, most notably within customer service and due to closure of legacy networks in Sweden. And in line with what we said at the C&D, 2026 is and will be a peak year for implementation costs of transformation initiatives. Overall, OpEx increased 2%. Nordics had higher amortization of sales commissions and continued high activities in transformation projects, particularly in Norway. And the higher sales costs reflected churn increase we saw last year. Encouragingly, in Q1, we were able to bring churn back towards a more normal level across most markets and segments. And we are so proud because OpenSignal's latest user experience measurements recognized all our Nordic business units for top performing mobile networks, underlying the value of our continued investment in network quality. This slide summarizes market-by-market performance across the Nordics. Starting with Norway, where we continue to execute on our now very well-established commercial strategy with more for more and services first. Value-added services within entertainment and security are key elements of this, and standalone value-added services revenue in Norway grew 8% in the quarter. ARPU increased and EBITDA grew strongly, supported by higher wholesale revenues and easier year-on-year comparisons, following last year's 100 million TV VAT charge. And while B2C campaigning held the mobile ARPU uplift back somewhat in Q1, we are encouraged to see a positive shift in B2B as we work to turn around the previous negative trend. The Norwegian Competition Authority is reviewing our latest remedy proposal on the deal with Global Connect, and we expect to be able to close the deal within the next four to six months. In Sweden, mobile continues to grow, supporting profitability despite a managed decline in low margin fixed revenue. Denmark. sustained customer momentum, particularly in fixed wireless access, while EBITDA was pressured by introductory offers and higher third-party commission costs. Overall, Denmark is executing in line with our plan, and they are in the middle of a very ambitious transformation. So we expect a clear pickup in EBITDA growth over the coming quarters. Moving to Finland, where mobile competition eased somewhat in Q1, and DNA delivered underlying mobile service revenue growth of 2.2%, while competition in the fixed segment intensified. Churn normalized, and we saw gradual improvement in new sales output. However, the pricing impact from Q4 still held back reported service revenues. And even though pricing is gradually improving, volumes have been softer, and prices on new sales renewals are still not back to the levels we saw in the first half of last year. In some cases, there is also a lag between sales and when revenue is recognized, so improvements may take time to show up in the reported numbers. As such, we believe it will take a couple of quarters before Finland returns to the mobile service revenue growth level we are aiming for, even with a continued gradual recovery. So, turning on to Asia. In Q1, we reached a major milestone by completing the sale of our stake in True, receiving $30 billion in cash proceeds from the first tranche. At the same time, the region is being affected by the fallout from the Iran war. And unfortunately, Bangladesh is among the most exposed markets, given its import dependency, limited LNG storage for power generation, and the risk for further pressure on energy costs. Marine phone service revenues declined 2% in 2001, while EBITDA was down 1.5%. The quarter also reflects the continued shift from voice to data alongside intense price competition. Year in year, the decline was driven by weaker macro backdrops, which intensified in March as customers were affected by shortages, saving measures, and energy prices. We are mitigating some of the top-line pressure through cost measures, and while we remain focused on supporting customers, we are keeping spending highly disciplined in this environment. In Malaysia, Telkom Digi showed continued top-line progress in its most recently reported quarter, and we received stable dividends. Importantly, new 5G spectrum is underway for the company's network JV, D&B, and we believe it's key to the improvement of the longer-term financial prospects of D&B. We also recognized an impairment of the recorded value of our shares in Cellcom Digi after the market value fell significantly below our carrying value. And with that, I'll hand over to Torbjörn to walk you through the financials in more detail.

Thank you, Benedicte, and good morning, everyone. Let me kick it off by taking you through the group financial highlights for the first quarter. Overall, service revenues came in at 14.8 billion, and EBITDA was 8 billion kroners. Service revenues grew 1.6%, while EBITDA grew 3.1%, resulting in an EBITDA margin of 44.2% based on the total revenues of 18.2%. Free cash flow before M&A in the quarter was 2.1 billion, and if you include the true proceeds, total free cash flow was roughly 32 billion kroners in the first quarter. Net income was 3 billion and EPS was 2.22 kroners, both up 15% year on year. Note that most of our operating currencies weakened materially against the NOKI during the quarter. In nominal terms, FX reduced reported service revenues, EBITDA and free cash flow by some 0.4 billion, 0.3 billion and 0.2 billion respectively. The group's capex to sales was 12.5% in the quarter. The leverage ratio strengthened materially to 1.2 times, driven by the disposal of our stake in True. On the other hand, Group Rocky was negatively impacted by the impairment of our stake in Cellcom Digi. While the True transaction improved leverage, the accounting gain in that sale is not included in Return on Capital Employed, because True is no longer an associated company. The Cellcom Digi impairment, however, reduces Return on Capital Employed. Importantly, Return on Capital Employed, excluding associated companies, was 13.6%, demonstrating a strong underlying result for our controlled assets. Finally, please note that we have changed the calculation of capital employed in our rocky definition. In essence, we have moved from defining capital employed as equity plus net interest-bearing debt, including license obligations, to non-current assets plus working capital. This makes the definition of capital employed a more influenceable management metric in measuring business unit performance. This is very important because, as you may remember, Benedicte and I highlighted the importance of implementing Rocky throughout the organization, and the new definition is better suited for that. Now, starting with the top line. In reported terms, service revenues were down year on year due to FX, while growing 1.6% organically. This growth was primarily driven by mobile in Norway, Sweden and Denmark. In the Nordics, mobile service revenues increased 2.7% when adjusted for the transfer of the IoT business, supported by the ARPU uplift across Scandinavia. Finland was impacted by carryover effects from lower campaign prices in Q4 last year, and front book pricing in Q1 was still below the level we saw a year ago. On fixed, service revenues grew 1.3%, driven by a larger fiber subscriber base in Norway. Asia was, as Benedicte highlighted, the main drag on growth, driven by the weekly performance in Grameenphone. Turning to OpEx, which came in at 6.2 billion, down 2.4% year-on-year in reported terms, and up 0.5% organically. Higher personnel costs and higher amortization of external retail commissions from prior periods were partly offset by lower O&M costs. This was achieved despite significant implementation costs for transformation and robustification, which we went through in detail at our CMD in November. In 2025, these costs were more back-end loaded than we expect the profile to be this year. Transformation continues to deliver cost benefits in the Nordics, as highlighted by Benedicte, and in Bangladesh, cost measures also helped mitigate the top-line decline. Then, moving to EBITDA, which was just above 8 billion, roughly flat in reported terms, but up 3.1% organically. The Nordics delivered 3.8% growth in EBITDA, driven by ARPA growth in Norway and continued fixed transformation benefits in Sweden. After the improvement in the second half of 2025, Grameenphone unfortunately declined again. As a result, EBITDA for Asia was down 1.7%, weighing on the group results. Now then, let's zoom in on the profitability in the Nordics. EBITDA in the Nordics increased 3.8% or 4.9%, excluding the impact of the transfer of managed IoT and coastal radio. Norway and Sweden were the strongest contributors, and Norway also benefited from easier comps in Q1 last year, including the VAT-related item and the limited national roaming revenue contribution in the prior year quarter. Denmark and Finland contributed negatively, reflecting the commercial and cost dynamics we discussed earlier. Denmark stands out at minus 13%, and this mainly reflects introductory offers that weighed on gross margins, combined with higher amortization of commissions from previous periods following a shortened amortization period. Overall, Denmark is executing in line with our plan, and we do expect EBITDA growth to pick up meaningfully over the coming periods. Now, then moving to Asia and focusing on Grameenphone. As Benedicte highlighted, growth turned negative in the quarter, consistent with what the company communicated to the market in March. The quarter reflects the tough macro environment, election-related restrictions and a lower-than-normal uplift from the Eid festive season. Higher fuel and gas costs have added to cost of living pressure in the country. That increases price sensitivity when customers shop for data packages at a time when competition remains intense. Tight cost control and a one-off settlement with the supplier contained EBITDA decline to 1.5% in Q1, somewhat better than previously announced by Greenphone. Now, in this environment, we remain focused on tight cost control and disciplined release of investments today. Now, then let's move to the P&L and cash flow. In the P&L, there were several material movements on the associated companies line this quarter. Operating profit was broadly flat in nominal terms, held back by FX. We booked a net gain of 12.2 billion from the disposal of our shares in two corporations. But on the other hand, we also recognized an impairment of 8 billion related to Cellcom Digi, as its market value at quarter end was significantly below the carrying amount in our books. Net financial items were positive at 549 million. This was driven by net currency gains of just over a billion, mainly related to derivatives hedging the FX conversion of the true proceeds, as well as improved liquidity and lower interest rates. Tax expense was 1.1 billion, corresponding to an effective tax rate of 12%. Net income to equity holders was 8.2 billion. Adjusted net income, excluding the associated companies, FX impacts and other smaller items, was 3 billion, corresponding to an adjusted EPS of 2.22 kroners. Then, turning to cash flow. Total free cash flow was roughly 32 billion kroners, including cash proceeds from M&A activities of roughly 30 billion kroners. The sale of our 25% stake in True, which was the first tranche, generated cash proceeds of 29.8 billion, excluding the hedging effect mentioned earlier. The related positive cash impact of 0.6 billion was offset by the first installment of 0.6 billion for residual obligations in India. Free cash flow before M&A was 2.1 billion. The year-on-year reduction in free cash flow before M&A was 0.8 billion and was mainly due to timing effects last year and the divestment of Telenor Pakistan. In addition, FX reduced free cash flow by some 0.2 billion in the first quarter. The first quarter of 2025 benefited from working capital inflows, driven by Grameen Fund due to the Eid season timing, as well as handset financing in the Nordics. Q1 last year also included 352 million of cash flow from Pakistan, most of that entity's full-year contribution, which is no longer part of the portfolio. The main contributors to free cash flow before M&A were the Nordics at just shy of 1.8 billion and ASA just over 1 billion, the latter supported by 342 million in dividends from Celcom Digi. The quarter was also relatively heavy on spectrum payments, with 0.7 billion paid, including incremental right-of-use prepayments related to the recent awards in Sweden and Bangladesh. Overall, it was a solid quarter for free cash flow before M&A, keeping us on track versus our full-year outlook, and of course a very strong quarter in terms of M&A cash flow. Now, this, of course, has clear implications for the leverage and capital allocation going forward, in line with how we outlined the use of proceeds on our Q4 call. We can now see the true proceeds impact on the balance sheet. Leverage ended the quarter at 1.2 times, well below our target range, and net debt declined to 46.2 billion. This creates headroom for incremental shareholder returns, such as our proposed buyback and disciplined value-accretive investments in our Nordic core markets. Over the 15 billion program, we will propose to start with up to 6 billion in the first year, which includes the government's portion, subject to AGM approval and available liquidity. And again, if value-accretive investment opportunities do not materialize, we will consider further return to shareholders. And that brings us to the 2026 outlook. On our full-year guidance, we have updated the 2026 EBITDA outlook for the Nordics and for the group. For Telenor Nordics, we still expect low single-digit service revenue growth and around 14% capex-to-sale excluding leases. We now expect low to mid-single digit EBITDA growth, updated from mid-single digit. The main reasons are the somewhat slow market normalization in Finland and that we have chosen to not adjust for the impact of the business transfer of managed IoT and coastal radio from the 1st of January, which we had assumed in Q4 when we made the original guidance. As stated in the Q4 report, these transfers reduce EBITDA by around 0.2 billion for the year, equivalent to about one percentage point of growth for Nordics. For the group, we now guide flat to low single-digit EBITDA growth, updated from low to mid single-digit. In addition to what I just mentioned, the key driver is the impact of the unresolved situation in the Persian Gulf and what effect that is having on Bangladesh. While everyone hopes for a quick resolution to the conflict, Bangladesh is a vulnerable economy and the exposure increases the longer this situation persists. That said, several factors help protect the flow through to free cash flow from EBITDA sensitivity in Grameen phone. Key shields, I remind you, are the 44% minority ownership and the 40% corporate taxes and of course our own operational measures in the company. We maintain our free cash flow guidance of 10 to 11 billion before M&A and incremental spectrum commitments post-CMD, excluding dividends from associates, despite a negative FX impact of around 0.4 billion from the stronger knock-in. On the quarter-by-quarter profile in 26, please note that Q2 will be particularly challenging for EBITDA growth due to a difficult comp given the standout second quarter last year in the Nordics, lapping of the Norwegian roaming agreement from mid-March, a smaller year-on-year impact from already implemented backbrook price migrations, continued high transformation activity in the Nordics in the first part of the year, and bigger impact of energy shortages and related inflation in Bangladesh. And while 25 had a back-end loaded cost profile for both sales and marketing and transformation costs, we expect a more even distribution throughout 2026. For Grameenphone, we expect service revenue growth to remain negative in the near term. The timing of recovery remains uncertain, given the indirect exposure to the Iran war. And then finally, just to point out our medium and long-term financial ambitions, they remain unchanged. And with that, Benedicte, I'll hand it back to you for the wrap-up.

Thank you, Torbjörn. To sum up, we delivered steady performance against the shaky international economic backdrop in Q1. we continued to execute on a strategy described on the CMD to build a stronger and even more future-fit and Nordic-centric company. The True Deal was another milestone in this respect, materially strengthening the balance sheet and enabling increased capital returns, including initiation of the three-year $15 billion buyback program after the AGM. At the same time, we are realistic about near-term headwinds particularly in Bangladesh, and we have, as a result, adjusted our 2026 EBITDA growth outlook accordingly while maintaining our free cash flow guidance. Our long-term view and ambitions remain unchanged. We will continue to drive service revenue through relentless improvement of the customer experience based on excellent networks and services-led growth. We will accelerate the pursuit of efficiencies through continued simplification and tech-led transformation. And we will continue to honor our track record of effective capital allocation and shareholder returns. And now I'll hand you back to Frank to moderate the Q&A.

Thank you, Benedikta. We will now open the line for questions. As usual, please limit yourself to one question each. thus a brief follow-up if needed, so everyone gets the opportunity to participate. Operator, please go ahead.

Thank you. To ask a question, please click the raise hand button on the bottom of your screen. When it is your turn, please accept the prompt that appears. This will allow you to turn on your video, unmute and ask your question. As a reminder, we are allowing analysts one question and one related follow-up. Our first question will come from Andre Capisac from UBS. You may now turn on your video, unmute, and ask your question.

Hi, can you hear me? Yep. Hey, good morning, everyone. Thank you for the presentation. I wanted to ask on your guidance. So, I understand that growing up is obviously challenging. We also have some reclassifications, as you pointed out, in the Nordics, and we see the weakness in Finland. You also flag some kind of IFRS effects that have been, I think it is clear, kind of expected by you in Denmark. So in terms of the Nordic epitaphs specifically, can you speak also about the kind of Norway and Sweden developments, whether these are kind of in line or perhaps in the case of Sweden maybe even better than expected? So what is the outlook kind of outside of the things that you already touched upon in the Nordic, specifically on EBITDA? And associated with this, the weaker EBITDA outlook, is it kind of absorbed on the free cash flow level simply by the fact that you put this kind of 1 billion knock range within the guidance, or are there some mitigating measures that you are kind of taking or have to take to actually preserve free cash flow guidance at this kind of 10 to 11 billion range? Thank you.

That was a lot of questions in one question. But if we try to kind of pick up your main points, to start with Ramin Fon, I think in our guidance, we expect the situation to remain challenging for the first half year. If, you know, the challenges persist, of course, we might have to change our guidance going forward. But we are pretty, you know, tight on both OPEX and on TRAPEX, and we are taking measures in order to, you know, alleviate the consequences as best as we can. However, we also do need to take our new spectrum in use and to have some investments in order to meet the competition on the transition from voice Would you like to cover Denmark, Torbjörn?

Yeah, I know Denmark, as we said, the 13% negative was a bit of a standout, but that was due to costs associated with new offers in addition to the shortened amortization period. But Denmark is certainly expected to perform much stronger in the quarters ahead. I think in terms of the bridge to free cash flow, there are, of course, many different elements that contribute towards that. Yes, you have some FX that is pulling it down, and then you have some of the negative impacts from the likes of Bangladesh. Then, as you remember, when we guided, that excludes incremental spectrum, and there's been some incremental payments into this year that needs to be added back. We also have significant efforts to mitigate cost of goods sold, OPEX, working capital measures across all business units. And then in terms of the flow through of the Grameen phone, remember that, you know, there's a high corporate tax rate. And whenever there is dividends paid out to shareholders, there's some significant minority leakage, which of course gets reduced. if the results are lower. So there's a number of shields and sort of the rough rule of thumb is that, you know, if you assume that there was a billion effect on EBITDA, maybe only a quarter of that would flow through to the cash flow.

And then you had a question. You had, again, many questions in one. But we saw the competition was very stable in Sweden. And in a way, which is one of your... your question. And not to offend our Swedish colleague, but in a way, boring is good, which is why we didn't highlight that many news. However, we were in Sweden last week. They're doing a lot of good initiatives in order to improve our market position, particularly in the fixed wireless access. We have a good growth, which adds to the mobile net ads. And again, we do see positive effects on the gross margin on the very deliberate phasing out of unprofitable products on the fixed side. So, good performance also in Sweden.

We should probably move on to the next question. Yeah, we'll take the next question.

Our next question comes from Kival Karoya with Deutsche Bank. Please turn on your video on neutral line and ask your question.

Thank you for taking the question. I appreciate you probably don't want to hear quarterly EBITDA growth guidance, but can you talk a bit more about the moving parts on Nordic EBITDA growth for the rest of the year? Q2 has a tough comp that you mentioned, but how do we think about the second half growth? I guess Finn has an easier comp, but just some comment on the setup and key factors for H2 would be helpful. Thank you.

We don't really break it out. I think we highlighted clearly some of the things that is going to affect the Q2 growth given the rather difficult comp last year when you had, for example, the full inclusion of the national roaming agreement in the numbers. And then I think we've also highlighted that some of the sales and marketing related and transformation costs are spread more evenly out throughout the year relative to a more back-end loaded profile last year. I think that's about the degree of detail we will go into.

Yeah, and as I just mentioned, you know, we have anticipated a difficult situation in Bangladesh throughout first half of 2026.

That's helpful.

Thank you.

And just as a follow-up, can I ask, I mean, obviously there's been a little bit less price-to-price support in the Nordics in Q1, and it sounds like for Q2 as well. How much of a factor is that for those two quarters? And at this stage, you know, can you say anything about, you know,

So you said price rise support. Yeah, just we, as you know, we don't comment on sort of forward-looking price initiatives, what have you. We stick to what is behind us, obviously, for competitive sensitivities. So I will not comment on sort of price rise support going forward. Okay, thank you very much.

Thank you. Our next question comes from Nick Lyle with Berenberg. Please turn on your video, unmute your line, and go ahead with your question.

Yeah, morning guys. I hope you can hear me. It was a quick one about the usual question about consolidation, really. On Swedish and Danish consolidation, you've got the cash in now for the True Deal. So do you think you've got the political support you need from the local competition authorities, that being Sweden in particular, or the political support from Sweden? And sort of when you mention looking at value-accreted deals and then, you know, if opportunities don't materialize, how long would you wait to decide whether those are going to materialize or not, please? Thanks very much.

I think, as you know, we cannot comment on any particular transactions. But I think we need to close the gap in Europe on building, you know, within technology, and I think we need a framework that enables scale and the emergence of the possibility of emerging stronger national and European champions. So in light of that, we really believe that consolidation in our industry is key in Europe. And at present, there are still mixed signals from EU to whether that might be allowed. However, the latest last week's, you know, change in signals might imply that it's easier now than it has been for a while. However, I think, you know, to sum it up, we are taking a wait-and-see approach pending the further developments in the EU.

Yeah, I'm listening. Sorry. Go ahead. No, just to come back on that point, does that mean you'd rather wait to see some draft of the merger guidelines first before you prepare to take any, would you go for it first before, you know, you see drafts coming out? Is that sort of prerequisite for any kind of action, do you think?

I think you can rest assured that we contribute to the extent we can on... advocating what we believe is right both for industry and for Europe and the countries. And in light of the geopolitical unrest, I think, you know, to head in a more lighter environment to merge is key. and then I will not comment on, you know, what we do first and last, and that we have to come back to when we have something to communicate.

I think there are many promising developments in terms of what you hear, but there's a lot of conflicting messages. I guess it'll be interesting to see how some of these live deals that are out in the market will be treated. With respect to the second part of your question, very quickly, we, you know, we have just closed the transaction. I think we have just announced a... a very shareholder-friendly buyback program. We'll implement that as soon as we have the necessary approvals. And then we will have to wait and see in the future in discussions with our own board on any future remuneration initiatives.

Okay. Next question, please, operator.

Thank you. Our next question comes from Christopher Wang-Bjorsen with DMV Carnegie. Please turn on your video, unmute your line, and go ahead with your question.

Yes, good morning. Thanks for taking my question. So, first of all, on the Global Connect, the pending transaction Global Connect, did you just understand, you know, you can't give all the details on the remedies, but please can you give some color on how material they are looking to be? Like, are they material enough to change the financial trajectory you gave for the effects of the deal, if it closes or is it more minor? That's the first one, I guess.

We can't comment on any specifics, I'm afraid, because the process is ongoing. However, we do expect the Competition Authority to conclude within the end of June, and we just received their so-called 70 days notice. We are still optimistic to close the transaction, and then the underlying of that, you do understand that we still can calculate or, you know, have a good, decent return on the investment if it goes through.

All right, thanks. And then just a quick follow-up on the... on the lease and ICE agreement. So just to me, it seems like if you pencil in typical seasonality for the business that you are tracking a bit ahead of the revenue last year, but you're still kind of saying that you're expected to be rolling out of the last year. So is that kind of factoring in some kind of tapering off of that business after it moved to their own network? Or am I getting that one wrong?

I think we obviously don't discuss, call it the overall prognosis and the sort of quarterly movements of it, other than to say that we still expect the contributions from the Lisa Taylor agreement to be in line with what it was last year.

All right, thanks. Thank you.

Thank you. Our next question comes from Andrew Lee with Goldman Sachs. Please unmute your line and ask your question.

Morning everyone. So obviously everyone's just trying to unpick this morning the changes that are just accounting adjustments with what's actually going on underlying from a structural perspective. One of the key structural concerns that investors have from today is on your finished fixed broadband trends where you've got basically a weaker finished fixed revenue growth or decline. What is driving that? That's question number one. Secondly, what exactly surprised you in Finland and Denmark in the first quarter more broadly? We knew Finnish competition was intense in the second half of 2025. I guess you knew their introductory offer investments in Denmark. So what surprised you within those two markets that caused the underlying downgrade to guys? And then just lastly, in Sweden, Your broadband trends look a bit weaker despite easier comments. Have you got any commentary around that? Thank you.

Okay, let's just start on the fixed side. What we saw there was that there was quite a lot of activity, particularly on the SDU segment, which traditionally is a more attractive relative to MDUs in terms of ARPU. So we saw a lot of activity there. We also saw more and that impacted some of the call it cable subscribers that we have in Finland on the SDU. We also saw more activity on the MDU side. So just in general, there was a sort of a switch out from both quick wireless access and cable customers activity in the first quarter in Finland.

And as you may remember, we announced last year that we have an investment activity on the mdu side replacing our cable network with fiber and that's ongoing and it's progressing according to plan although there is also increased competition in that segment yeah and that's an important upgrade because keep in mind Andrew that in

In Finland, the degree of cross-ownership between, let's say, fixed and mobile customers is over 50%. So there is a strong ability in that market for cross-selling of products, not bundling, but cross-selling, which of course is important. Just in terms of surprise, you know, yes, on your second part of your question about surprising, I don't think Denmark was particularly surprising. You know, it was competitive intensity, which, you know, had more introductory offers that weighed on gross margins. And then we had the change in commission, amortization of commissions. But in Finland... you know the flow-through effect uh perhaps was a little bit bigger than we would have liked to see in finland um but we are pleased to see that you know things are normalizing back um slowly but surely in in that market now and then just on sweden the swedish your broadband turns a bit weaker this course despite having relatively any anything going on there yeah well uh as you said it's a managed

process where we are facing out on profitable products and you'll find actually some of the fixed market in our mobile subscriptions because we've had quite the good success in fixed riders access but that's reflected in the mobile subs numbers

And keep in mind that, you know, the managed out of unprofitable customers on the fixed side in Sweden has been a very strong contributor to gross margins and also to EBITDA performance in the country. Okay.

Thank you.

Yeah.

Thank you. Our next question comes from AJ Stoney with JP Morgan. Please unmute your line and ask your question.

Hi, guys. Thank you for having me. My question is around Finland. So you mentioned lower volumes. So just wanted to know where are you seeing the pressure? Is it from the main operators, the MBOs? Is it within B2C or B2B? And then just related to that, Elisa mentioned they were maybe less reactive to commercial offerings from other operators. And is that a similar strategy that you guys might follow where you may accept some short-term subscriber losses to encourage a more rational market within Finland? Thank you.

I think we've seen some uptick in the numbers for the MVNOs, but it's still manageable in the market. On the B2B side, that's actually quite colored by the macro conditions in Finland, whereby there is 11% unemployment. There are not a good growth in the B2B markets. which is impacting the market conditions as such. However, we actually progress fairly well on the B2B market, and we've also had some new solutions and launches to the customers that have been well received. So in a bit of a slow or gross market, we are performing well. fairly well in that segment.

And I think you said lower volumes in your opening of your question. You know, it is more, you know, lower churn that we're seeing in the country. It's actually, you know, normalizing back to the same levels that we saw 12 months ago. And lower churn is better than lower volumes, so to speak.

Thank you. And then just on the second part, which is around maybe the behavior from Elisa saying they're being more rational, that's something, again, that you guys are maybe trying to encourage, just to encourage them off the common rationale.

Look, we try to avoid sending signals to the market. We were very clear that Q4 was of significant competitive intensity thanks to one of the players, I won't mention the name. And what is good is that we have seen that come first quarter, the situation has definitely improved. Thank you.

Our next question comes from Ulrich Grace with Bernstein. Please turn on your video, unmute your line and ask your question.

Yeah, thanks very much. I have actually two clarification questions on the FMA. The first one is on the Nordic EBITDA, you talked very much about the factors already. wondering whether you'd be willing to talk a little bit about the scale of these different factors, in particular the inorganic versus the organic factor. I think from investor relations we learned this morning that the inorganic factors were about 160 basis points in the quarter. Is that, for the Nordic EBITDA, is that sort of representative of how it might look for the full yields, in particular going on in the first quarter for the inorganic contribution? That would be my first clarification question, please.

Yeah, I wasn't part of the call, so I don't know. We didn't have a call, but it's just in the summary. I would say the business transfer effect is about a bit north of one percentage point for the full year for RIC. So there were some other factors in there in the first quarter, you know, the VAT effect from last year and so on. So don't recognize the 160 in terms of the organic, normal organic switch there. But about one percentage point for the full years is relating to the business transit for the Nordics.

Yeah, and just to be clear, that's the internal move of managed IoT services from

Nordics to AMP so it's internal moves in addition to the coastal radio yeah so but it's that's the main part and then there's a contribution of to some extent also in Finland which has picked up in a bit of a slower pace than we had anticipated in January okay so it sounds like

Sounds like a percent, a bit more than a percent from the organic and probably than a percent or so from Fingent, I mean, give and take. The question on the, the second question is a follow-up to Nick's question. So just to discuss the motivation of the latency approach, and obviously operators in France are taking a more active role there. They're trying to test, you know, the EC views. Why is it the right choice for you to go into this wait and see mode in relation to the potential change of the VC views on the market consolidation. Thank you.

Yeah, look, I know that the interest is high and we spend a significant amount of time in most investor meetings fielding questions on this regard. we tend not to go into any details about motivations, but clearly the sort of slightly positive signals, but still contradictory signals from the EU sphere, you know, makes us take a more cautious approach, because, you know, we need to see how this is implemented in practice. We've been very clear that We think consolidation is good for Europe if they want to have a thriving digital sector. But so far, not everybody is seeing from the same hymn sheet, and as a result, we're taking a little bit more of a wait-and-see approach.

But if I may challenge you on this, right? Okay. If there's uncertainty, right, in this regard, one could take the view that there's really, you know, a pot of gold at the end of the running gold. So why is it the right approach not trying to test it? I mean, I understand if the CMOs were very negative and cautious, then, you know, you don't want to try, right? But if there's uncertainty and then there is a significant benefit, why not try?

Look, we will not go into tactics. And if we test it and succeed, then you'll be the first to know along with all other investors if and when we have something to announce.

Thank you.

Thank you, Rich. We'll go on to the next questions. We have a few left, so please let's all keep and stay short.

Our next question comes from Felix Henriksen from Nordea. Please unmute your line and ask your question.

Hi, guys. Thanks for squeezing me in. Just a couple of clarifications on the Nordics. Firstly, in Denmark, you mentioned that execution is basically in line with your expectations, but there was a fairly large drag from legacy DCL DSL broadband in the quarter and also these higher commissions on DFW8. So can you just expand a bit on why you're so confident that trends in Denmark will improve in the coming quarters and why this will no longer be an issue?

Denmark is – or Telenor Denmark is conducting probably the most fundamental transformation of any of our operations, and we are very confident that that will – deliver results longer term. On top of that, you have the change in amortization on the marketing cost, which was shortened, which took the EBITDA down somehow. And then on the broadband in Denmark, I think you need to help me a little bit, Frank.

Well, on the broadband, you know, we closed down broadband going into the year. But I think the main part, really, after the last part of the question, why we're so confident that this will improve, is basically due to the introductory prices that we mentioned during the call. We have a few offerings, especially in fixed wireless. but also I think a few other ones in Denmark, which have been on introductory prices, obviously lowering gross margins as well, and they will normalize during the second quarter and beyond.

And on the fixed wireless access side in Denmark, we have good traction, but again, please remember that that is reported under the mobile volumes.

In Denmark and Sweden. Yeah. Yeah, they're mobile. Okay, I hope that answers your question. Absolutely.

And if I may, just a quick follow-up on Finland. Was there anything that went, you know, incrementally negative in Q1? Because it seems like, you know, this slowdown in growth that you're seeing is mostly due to the carryover effect from Q4, which presumably was already, you know, in your knowledge when you were giving out the original guidance for the year.

I think I outlined that in my answer about the development on the fixed side, which was quite intensive in the first quarter.

And, of course, that was not Nordic. That was on group. But, of course, what happened in Bangladesh was also incrementally negative in Q1 due to the global situation.

Yeah. Okay. Thank you, Fredrik. I think we have a couple of questions left. So, Operator? Yeah.

Thank you. Our next question comes from Frederick Little with Handelsbanken. Please turn on your video, unmute your line, and ask your question.

Frederick, are you there?

Hi there, Frederick. Are you with us? Please unmute your line, turn on your video, and ask your question. We will move on to our next question. Our next question comes from Abhilash Mahapra with BNP Paribas. Please turn on your video, unmute your line and ask your question.

Good morning.

Can you hear us? Hi, Abhilash, are you there?

Hey, good morning. Thank you for taking my question. I have one around Bangladesh, please. Can you maybe give us an update on what's happening around the spectrum in your process that if you've had any further updates there, that would be helpful. And then just related to that, the clarification of your guidance comment from earlier, you mentioned that you're assuming that the backdrop remains tough in H1 before actually getting better during H2. And you said that if that changes, that you might have to sort of revisit the 2026 guidance. Could you just clarify that a little bit? Is that sort of EBITDA or sort of free cash flow guidance that might be impacted if things don't pick up in H2? Thank you.

Just in terms of the spectrum, you know, we do have a policy of not making predictions or forecasts or comments around spectrum renewal processes, as you know, and you can see on the IRR's website, you can see there which spectrum bands are up for renewal. So, you know, those... We will, of course, look at what we need and all those things, but we don't comment on that.

Nothing public either, which is new on the process.

Right. And then with respect to some of the guidance, I think to the extent things get prolonged, it mainly comes on the EBITDA side, less so on the free cash flow side. But keep in mind, we are, of course, as I said in my presentation, focusing on mitigating the effects on the top line with cost initiatives and also disciplined release of investments in order to offset the negative impact on the top line.

I can also refer you back, Abhilash, to the sensitivity Torben mentioned in his main address, about if you have one billion on EBITDA, just to pick a number for sensitivity purposes, in plus or minus in Bangladesh, kind of the rule of thumb is that you'll have a quarter of a billion impact from that EBITDA billion on to the free cash flow. Good.

Yeah. That's right. But if I may just follow up very briefly. So, for example, Q1, I think we saw the EBITDA there declined 3% here, okay, without the one-off. Are you sort of assuming a return to stability in H2 with the new guidance?

That's what the underlying anticipation is.

Yeah, and that is, of course, subject to what happens on the energy supply in particular. I think we need to move on because we've got a couple more people. Thank you.

Our last question comes from C here with Citi. Please unmute your line and ask your question.

Hello. Thank you for taking my questions. I just have two follow-up, please. And the first question is really on the OPEX development in Nordics. Just wondering if you can share with us how should we think about the actions that you could take during the remaining of the year to balance the OPEX inflation that you saw in Q1. And also in Sweden specifically, I think a lot of the OPEX reductions that you have achieved is through migrate traffic of the Lexi network. Just wondering if you can give us an update on how far along are we with these activities and when should we expect the COG getting harder because of the completion of the movement.

Thank you. Shall I jump into it?

Go ahead.

I think there was a lot to unpack there, but the migration of traffic is mainly a COG's situation, I believe. But on the transformation agenda, that combines local programs in each business unit with Nordic initiatives where, call it scale and collaboration, create value, and I think we went through those in some detail, so I'll refer you back to the CMD. So, you know, we do, 26 is a year where there are significant implementation costs on legacy out in Norway, implementation of BSS in Denmark, so I think we've highlighted that. Of course, when things are, you know, if there's a little bit of headwind, we will of course turn every stone to ensure that we, you know, focus on initiatives that mitigate those effects, and that will of course continue, you know, to offset things like we have seen in Finland and we've seen in Bangladesh.

And then also remember the back-end loading difference from last year. That's what we mentioned with this year, which is going to be more even. So that also is the reason for that, partly being these robustification transformation projects ramping up towards the end of last year and continuing through the first half of this year and into the second half before then gradually starting to give benefits as you approach year 27 and beyond. Well, then we're at 10 o'clock. So I will just thank everyone for their attention. And if you have further questions, please reach out to IR through IR at telenor.com. And all the presentation material is available at our website at telenor.com. Thank you very much, and have a nice day.