Telia Company AB (publ)

Welcome everyone to Telia Company's Q3... This meeting is being recorded. ...results presentation. And with that, I will hand over to Telia Company's Head of Investor Relations, Erik Strandenpiers. Please go ahead. The floor is yours.

Thank you and welcome everyone to this call. We have here in the room our President and CEO, Alison Kirkby, and our CFO, Erik Hagerman. And I hand over to you, Alison.

Thanks, Eric. And good morning and a warm welcome, everyone, to our third quarter results. And in addition to being very pleased with the progress that we've made since we last met, I'm also delighted to have Eric here today, our new group CFO. Welcome, Eric. And what a great quarter to start. As you all know, our focus this year has been very much on restoring profitable growth momentum in our telco operations, and the third quarter results are proof that we're making the progress we promised. We're also making progress on the restructuring of our TV and media business. However, we are still in the midst of a relatively challenging advertising market. As you've seen this morning, telco service revenue growth accelerated to 3.9%, which is the eighth consecutive quarter of growth. And like previous quarters, growth is broad-based across all markets across both For example, now almost closing the historical network perception gap in Finland. This clear progress on the network leadership side across the group supports NPS trends, which have been positive throughout the year with significant improvements in this quarter for Sweden, Finland and Lithuania. And finally, we also saw enterprise digital services that I like to call beyond connectivity. Its growth also continuing to accelerate significantly. On improving capital allocation, another strategic priority for us, the divestment of Telia Denmark entered its final phase following the signing of a binding SPA, and we continue to expect the deal to close in the first quarter next year at the latest, with the net proceeds to be used for deleveraging purposes, hence bringing our leverage down to be comfortably within the target range of 2 to 2.5. And finally, our outlook metrics are updated, which I'll come back to at the end of the presentation. Here are the four key priorities we set out to drive sustainable growth. And based on what we're seeing in the quarter in terms of our financial, commercial and operational performance, I'm absolutely certain that this four-pronged approach to building a better telia is delivering and is the right strategy for us to continue to pursue. Let's move to Sweden, where we continue to be far ahead of competition with 5G rollout and network modernisation. Population coverage improved to 77%. And further on the network side, as I mentioned, we're absolutely delighted with the outcome of the recent Spectrum auction. Despite a tough economic environment in the country at the moment, we remain very resilient. Service revenue growth accelerated to 2.2%, driven predominantly by enterprise, where we saw a 5.4% increase, the highest growth rate ever recorded in Sweden enterprise, with connectivity growing 5% and digital services, including security, growing 14%. Telia Cygate had an excellent quarter with 42% growth, albeit partly on the back of providing new digitalisation services to Sweden's biggest region. In the consumer segment, we saw a continued solid development for both broadband and TV. Mobile was stable as price increases were offset by a continued mix impact. But importantly, despite the economic environment and despite sustaining premium price levels in the market, we are growing our subscriber base. Excluding the impact from legacy and roaming, underlying service revenue growth continued to stay very healthy at 4%, and we saw a slight reduction in legacy pressure as the drop for both fixed telephony and broadband eased somewhat compared to last year. EBITDA growth improved to 4%, supported by the growth in service revenue, and was further amplified by lower marketing spend from an improved channel mix. Positive FX gains and an easy cost comparison from an inventory write-down last year also contributed. Moving on to the operational side of things, mobile subs grew by 8,000 in each of the consumer and enterprise segments, supported by a record low churn level now below 13%. ARPU remained unchanged owing to growth in Telia's family proposition and in the fellow brand. And the consumer NPS, and that's the Telia consumer NPS, continue to gradually move in the right direction, supported by the aforementioned network modernisation, 5G rollout and the commercialisation of it. Our broadband subscriber base remains stable, as growth in fibre and fixed wireless access compensated for the ongoing decline in DSL subs, of which we now only have 61,000 remaining. And new fibre pricing taken earlier this year resulted in another quarter with fibre revenue growing around the 10% mark. And in TD, Telia was again awarded for having the best TD service, and we also continue to grow our subscriber base, both in the MDU and SDU segments. ARPU increased only slightly due to a somewhat negative mix, but we expect this to improve in the fourth quarter and onwards following the September implemented price increases, which were in the range of 16% to 25% for our basic TD services. Turning to Finland... where we're seeing our focus on network quality having a positive impact. First, our 5G network has now reached 90% pop coverage. Second, the share of modernized sites now exceeds 50%. And finally, we saw our network perception improve to a level almost on par with the market leader. The improved network perception is also benefiting our NPS, which continues to improve across all product categories and reached an all-time high in both consumer and enterprise. Mobile revenue growth continued to trend positively, with an almost 3% increase for the quarter and acceleration from the second quarter, driven by continued strong development in consumer ARPU. EBITDA growth accelerated sharply and reached double-digit growth.