Telenor Asa S/Adr

Good morning, and welcome to Telenor's fourth quarter results call. I'm Frank Måø, Head of Investor Relations, and today I'm happy to introduce our new Group CEO, Benedicte Skilberg-Fassmer, and our new Group CFO, Torbjørn Vist. We have quite a bit of ground to cover today along the same lines as usual, but with some additional color on the first impressions and priorities of Benedikt and Torbjörn. Before we kick off, a couple of housekeeping items. So as always in the presentation today, all numbers are in Norwegian kronor and growth rates are referred to on an organic, like-for-like currency basis. And for those who wish to ask questions in our video Q&A after our prepared remarks, Please remember to turn on your camera and please limit yourself to one question and a related follow-up. With that, I'd like to hand over to you, Bendicte.

Thank you so much, Frank. Good morning and thank you so much for tuning in to our call. I've been the CEO in Telenor for altogether nine weeks. As new to Telenor, I bring perspectives and experiences from my background in other industries, including banking, capital markets, and the fast-moving consumer goods industry. I'm also very fortunate to have a broad experience from boards as well as being a CEO for the last four years. A common thread has been a passion for working with technology and people to transform and improve customer experiences and drive results. My top priority is our customers. From the picture on this slide, you can see me engaging with customers on the very first day at work in Telenor. I have a very strong commitment to shareholder remuneration, but also capital management. And I can assure you that return on capital will be front and center in capital allocation decisions. In getting to know Telenor, one of the things that have impressed me the most is the quality and the competence of the people. The execution culture, our strong commitment to excellence in secure connectivity, as well as our long and proud history. And this has left me with very high expectations for the time ahead. And I'm looking forward to work with my new colleagues to chase further potential in monetizing pockets of growth and transforming customer experiences. So let's take a look at our key priorities for 2025. Since the Capital Markets Day two and a half years ago, we've made good progress in the executing on our strategy. And this year, my team and I will have two main tasks. The execution on 2025 as the final year of our current strategy, whilst making sure we evolve our strategy for the years ahead. And we will get back to you on the outcome of this process at the Capital Markets Day in Q4. In terms of the execution priority, I recently finalized the composition of the group management team, which now has executive with long tenure from the company, as well experience from the telecoms industry and other sectors. And in 2025, we will continue to pursue the value creation strategies that are adapted to the characteristics of each of our four business areas. First and foremost, we are a leading connectivity provider in the Nordics, and here it will be key to continue implementing our more-for-more monetization strategy and transformation program. We also have assets in Asia that are important for our cash flow generation and medium-term earnings growth profile, and we will continue to pursue growth and profitability in Grameen Phone. We will also continue to work as active owners alongside our partners in our associated companies, True and Cellcom Digi, to nurture growth in order to continue to take out synergies and increase dividends flows. On top of that, we have key assets and ambitions for infrastructure and AMP areas, each of which have their own distinct value creation strategies. We will continue to evaluate evaluate any good inorganic opportunities that may arise across all four of these business areas with a view to creating shareholder return over time. And with that introduction, let's take a closer look at the quarter. In Q4, we saw a solid performance across our businesses, even though the headline numbers were somewhat negatively affected by a few one-offs, as well as the macro development in Bangladesh. which unfortunately continued to weigh on our group results. In a quarter with fairly brisk competition and low inflation in the Nordics, we did quite well, both in terms of service revenue, growth and EBITDA. Our Nordic transformation efforts were paramount to an EBITDA growth of 6%. In Asia, our team in Bangladesh has shown tremendous resilience and despite difficult macro conditions. We also saw impressive performance by our business in Pakistan and continue to receive progressive dividends from Selcom Digi. Our free cash flow was once again even stronger than we had hoped for. The total free cash flow, including M&A, of 13.3 billion in 2024 exceeded the proposed dividend payments for the year. The progress on our ESG agenda was also very solid in 2024, and our commitment to sustainability remains strong. We made significant strides in reducing of scope one and two emissions and the share of spending covered by science-based targets. So let me now turn to give you a quick operation update for our Nordics area and the number one driver for our financial performance in 2024. At its core, our Nordic transformation program is about further improving the customer experience, enable future growth, and drive operational efficiencies. And in order to achieve that, we need to replace legacy technology, simplifying the IT stacks, as well as the way we work. In addition, we will align around best practices methods and leverage scale and each other's successes across the organization. And we met or exceeded all the goals we set out for in 2024 for the four mentioned areas. So let me start from the left. Within network and IT, our progress has been running ahead of schedule, and we shut down more than 68 more systems than targeted. Within shared services, we moved transactional back office activities to a new shared service hub in Portugal, also beating our OPEX Savings KPI, and this will be ramped up further this year. We also have a common program in place focusing on improving working capital. Our structural improvement initiative generated approximately 800 million in gross improvements compared to the target of around 500 million. And then, on the commercial side, Nordic TV and Nordic Managed Services have now become two separate cross-Nordic teams. And these efforts enable us to save costs, but also to use our scale to develop attractive solutions for our customers. These are the pan-Nordic activities, and most of the transformation will happen on the business unit or country level. With regard to our workforce, we have on average reduced the workforce by 4% per year since 2016. And we reduced external and internal FTEs by 6% in the Nordics in 2024, well in line with the indications we made last year. As a consequence of the need to stay future fit, I foresee that the drawdowns will be at least in the mid single digits in the years ahead, in line with what we've indicated earlier. And before I welcome our CFO to the stage, I'd like to spend a few seconds on this slide. I'm pleased to say that we delivered yet another year of strong free cash flows in 2024, well above our original ambitions. I'm also happy to present a new outlook that reconfirms our financial ambitions covering our dividends in 2025 with free cash flows before M&A. On the back of increased line of sight for key 2025 drivers, we expect to deliver free cash flow before M&A of around 13 billion in 2025. I'm so sorry to steal your thunder there for a moment, Torbjörn, but I'm sure you have more of it left.

I will try.