Telia Company AB (publ)

welcome everyone to Tenure Company's Q4 2023 results presentation and strategy progress. And with that, I will hand over to Tenure Company's head of investor relations, Eric Stranden-Peer. Please go ahead. The floor is yours.

Thank you, Sophie, and welcome everyone to this call, which is about our fourth quarter and full year results, as well as our strategy update, which we've done every year in January since 2021. Our CEO, Alison Kirkby, is still with us here at Telia. You may have seen her commenting on the results in media this morning. But as you know, she's moving on to BT in just a few days. So she's trusted us to do this call without her. As from experience, we know some of your questions tend to be a bit forward looking in nature. So therefore, Eric Haggemann, our chief financial officer, will present the quarter. Then Rainer Deutschman, our chief operating officer, will take us through that strategy update, after which he will hand back to Eric to comment on the financial outlook. And I expect this to take about half an hour, after which we look forward to your questions. So Eric, the floor is yours.

Thank you, Eric. Good morning and welcome to our fourth quarter results and yearly strategy update presentation. I'm pleased to say that we continue to deliver on our key focus for this year, which is to maintain the profitable growth momentum in our telco operations. And it's also pleasing to see that despite the weak advertising market in Sweden, we are starting to make some progress on our plan to return TV and media to profitability. Looking at the telco operations, we delivered service revenue growth of 3.3%. Unlike previous quarters, growth is broad-based across all geographical markets, across both consumer and enterprise, as well as across both mobile and fixed. Telco EBITDA growth was plus 5.4%, supported by service revenue growth, a decline in OPEX, and a continued energy tailwind. For the full group, EBITDA growth reached 7.3%, as TV and media improved significantly versus last year, driven by the comprehensive cost restructuring, which more than offset the effects of a continued weak Swedish advertising market. The structural part of operational free cash flow improved as expected by 2.1 billion SEC in the fourth quarter, driven by higher EBITDA and lower cash capex. For the full year, structural operational free cash flow reached 7.3 billion. As expected, the working capital contribution was also strong in Q4 and had a positive 4.6 billion impact to operational free cash flow. Leverage came back into a preferred range again, decreasing to 2.32 times on the back of strong cash flow generation and increased EBITDA. Strategy execution also continued at pace, including 5G population coverage reaching 89%, and Telia Sweden again awarded best network in its yearly benchmark. On mobile MPS, we are seeing good progress too, with six consecutive quarters of improved score. Like I alluded to in the beginning, we see that all the efforts made to our media business now also yielding results in the quarter. In the quarter, we made non-cash impairments of 4.1 billion SEC, referring mainly to Goodwill in Finland and TV and media, as you've seen in the press release earlier this week. And finally, the board of directors proposed an unchanged dividend for 2023 of 2 kronor per share to the AGM in April. We remain thus committed to the financial framework and to return cash to shareholders in an ordinary fashion. Now let's go to the markets, and like the tradition goes, we start in Sweden. As you can see, we continue to gradually nudge up on the 5G coverage and reached 82% in the quarter. As already mentioned, the network again came out as the best in Sweden after securing the top position in all three categories, voice, data, and crowd. In fact, the score received was so high that it placed Sweden's mobile network amongst the top five best in the world. Sweden also continued to do well financially, with service revenue again improving sequentially, supported by strong development in consumer and enterprise. And since the legacy headwind remained stable at around 140 million, also the underlying service revenue development improved sequentially, ending at a growth of plus 4.7%. EBITDA grew by 80 basis points, and as usual, it was driven positively by good service revenue momentum, which is partly offset by the decline in high margin copper revenue. A handful of temporary items, including energy savings, effects, and bonus accruals, largely offset each other this quarter, and we believe that the modest positive EBITDA growth that you see here is fairly representative of the current underlying development in Sweden. Moving on to the next page to the operational KPIs for Sweden, we see that mobile SOPs declined in the quarter, entirely driven by the enterprise segment and a loss of a few larger, low APU accounts in the public segment. APU itself increased almost 1% as the impact from price increases early in the year compensated for continued mixed shift related to growth in family propositions and fellow. Finally, on mobile, Thelia launched a new portfolio in the quarter, which contains more for more pricing in the lower end of the price range, and where we try to drive the user family lines towards the more high end subscriptions. On broadband, subscriber base was stable as growth in fiber and fixed wireless access compensated for the decline in copper broadband. The growth of fiber subscribers and pricing taken early this year resulted in another quarter of double digit fiber service revenue growth. And finally, we turn to Thelia Sweden's TV service, which again was recognized for having the most satisfied TV customers. Unlike so many quarters before, the subscriber base expanded, growing 17,000, supported by growth in both SDUs and MDUs. APU increased by 14%, partly due to the black screen situation with Viya Play last year, but mainly by the recent performed price increases. Now to Finland, where service revenue again grew around 2%, supported mainly by consumer mobile. And EBITDA grew at a double digit rate driven by the positive service revenue development, as well as OPEX reductions of 5.4%, when including the energy tailwind and lower marketing spend as a result of continued channel optimization. The mobile post base declined by 24,000, predominantly driven by a continued focus on raising the APU levels in the consumer segment, which resulted in the consumer mobile APU increasing by 12%, while enterprise mobile APU in Finland was rather stable in this quarter. In Norway, our service revenue growth momentum continued, with old segments contributing to the growth rate of .2% for the quarter. EBITDA also continued to show a very healthy growth, ending at plus 8.9%, driven both by the aforementioned service revenue growth, but also OPEX that contracted by 10% due to lower costs for resources and energy, as well as a one-time item related to pension costs. Excluding the pension item, EBITDA growth in Norway was around 5%. The mobile subscriber base remained fairly flat also this quarter, and APU was up 3%, driven by the consumer segment that saw a 6% increase. In Lithuania, the service revenue growth base softened in the quarter, ending at plus 4.3%, and the slower growth coupled with higher resource costs related to year-end employee bonus provisions was also the reason why EBITDA this quarter was a bit more muted than the one before. Estonia, however, continued to march on and delivered another solid set of results, with service revenue up 6.2%, of which mobile grew .8% and fixed grew 7.1%. And as a result, EBITDA growth continued at an impressive plus 11%. Finally, we come to TV and media that continue to be negatively impacted by the continued weak advertising market in Sweden, resulting in ad revenue decline of 14%, a tad better than the decline of 16%. Pay revenue, however, developed well and increased 6.5%, supported by both a growing subscriber base and higher APU. In fact, the pay TV growth rate was the best since the fourth quarter of 2021, when we were recovering from the pandemic. EBITDA and TV and media improved 132 million SEC compared to the same period last year and reached positive territory the quarter, helped by a significant reduction in content expenses and sizeable reductions in resource cost and marketing. Looking at the subscriber base, we saw another quarter of solid development, driven mainly by the recently launched TVPlay Pass and Katsuma HVOT services. Now let's move on to the group financials for Q4 2023. Like I've already mentioned, most telco operations maintained the positive trends from the third quarter. It was also a quarter where enterprise and consumer contributed equally well, as did mobile and fixed. All in all, this resulted in service revenue of .7% for continuing operations and .3% for telco. The telco EBITDA growth trend also persisted at plus 5.4%, albeit at a slightly more normal level. And for the first quarter and sub time, also TV and media contributed to the overall growth of the group that ended at plus 7.3%. Continued energy tailwind contributed positive to this, while an increase in bonus accruals had a negative impact of approximately the same amount. The next page OPEX excluding energy remained more or less unchanged compared to the same last year. This has increased resource costs driven by higher employee bonus levels in several markets was compensated for by lower marketing spend and the other smaller reductions for miscellaneous items such as bad debt and travel. Carpex declined as expected significantly in the quarter to 3.6 billion SEC due to lower investment levels in mainly Norway and CPS, primarily related to less investments in fixed infra as well as product development and IT. We ended the year with a total carpex of 13.6 billion, well below the 15.3 from the year before. Also cash flow improved as expected significantly in the quarter. Just as book carpex declined, also cash carpex declined significantly versus last year and was the main driver behind the improvement we saw in Q4. Restructuring cost increased by 400 million impacted by a provision for VAT in Norway of also 400 million. The provision however didn't have a net impact to cash flow as there is an offsetting positive item within other items here. And finally, paid interest increased by 300 million on the back of increased interest rates on our outstanding debt. Together these items had a positive impact to the structural part of operational free cash flow of 2.1 billion. And like I said at the beginning, working capital also had a material positive impact in the quarter and resulted in operational free cash flow increasing by 6.7 billion versus the same quarter last year. Let me end this financial section now with a brief look at our balance sheet. We saw net debt and leverage decline significantly in the quarter. Net debt decreased by 5.2 billion due to the strong cash flow generation in continuing operations. And leverage was reduced from 2.53 times to 2.32 times from a combination of both lower debt and higher EBITDA. So we are exiting the year like expected by being again within our target range of 2 to 2.5 times net debt to EBITDA. And with that I now hand over to Rainer who will take you through how we're doing on strategy.

Thank you, Eric. It's my pleasure to update you on our strategy execution now. As you are well aware of by now, our purpose is to reinvent better connected living. And since the we are consistently executing our strategy specifically along our four strategic pillars which are shown here in the middle. We restore growth by inspiring our customers with delightful brand experiences. We connect everyone to the most trusted, reliable and efficient networks. We transform to be simpler, faster and data driven at lower cost. And we sustainably deliver value to our stakeholders through an accountable and empowered organization. I will now touch briefly on each of the four pillars and as in the last three annual updates since 21, I will always share with you also the underlying drivers of our financial performance that Eric was talking about. As I just said, turning around tell you to profitable growth has been a key part in our strategy. And as you can see, that is exactly what we have achieved. After a period of decline, we now have delivered 10 consecutive quarters of revenue growth in our telco operations. And this growth as Eric was saying is broad based with all market segments and key products contributing. One key factor underpinning this growth is customer satisfaction. After also a period of decline, we now have improved the mobile net promoter score for the last six quarters on a rolling 12 month basis with even record levels in three of our markets. And this is despite the price increases we have implemented. But clearly we have a lot more work to do, especially also on the fixed broadband side. Another factor has been good growth in non-connectivity services as our Nordic business customers demand trusted solutions in areas such as cloud, IOT and specifically also security. I would also like to call out that we have taken leading position in several growth segments. For example, mobile holster in Norway, which makes us the overall SIM leader in the market now. Enterprise mobile networks, where we are clearly the number one across the Nordics. And we are also winning highly demanding customers with special security and resilience requirements such as police and military, not only here in Sweden, but also now in our attacker markets. Now let's look at our networks. We continue to be ahead on network modernization as we upgrade 4G and deploy 5G in the known single site visit approach with standard configurations across our footprint for best Carpex efficiency. As you might recall, we had front loaded our rollout in our transformation, reaching the peak in 2022 to monetize early. As per plan, we can now reduce the intensity as we monetization and 5G coverage targets. And our efforts pay off. We have won awards in all our markets. For example, as Eric mentioned, most recently, Umlaut reconfirmed our best network status in Sweden with a further improved overall score, which places us within the top few networks even globally. We are clearly a network leader in our region with number one positions in Sweden, and in Estonia, and in Norway, we are clear 5G leader across our footprint. We are now at almost 90% 5G population coverage up from 70% last year. To summarize, we have laid a leading network foundation, increasing data capacity sevenfold. We own the best overall spectrum position in the region, specifically also for 5G. And this foundation is the basis for network monetization our retail and wholesale businesses, and through our two strong partnerships in the form of our growing tower business, delivering by the way ahead of plan, and our joint venture in Finland, having taken a leading role in the market. Best networks are only as useful as they're utilized and monetized. Hence, we actively drive key connectivity products as we leverage our digital sales and service capabilities. I'm looking now at the KPIs that we updated you the last couple of years, starting with 5G devices on our network now exceeding 40% compared to 30 last year. Likewise, our strategy to complement fixed broadband network with fixed wireless offerings continues to pay off, demonstrated now by an 88% increase of fixed wireless users to 470K. And we always have a very high level of security and reliability in our network, compared to 2020 baseline, as you recall. Our enterprise mobile networks combining high throughput, low latency with reliability and security have continued to grow. And we now have contracted 72 sites compared to 55 one year ago, serving customers and industries such as mining and transportation with very critical applications. Likewise, we have further increased our connected IoT devices significantly with growth also in value added IoT services such as smart public transport, smart buildings and energy management. Our transformation delivers improvement in our digital sales and service capabilities, essential to monetize our products at lower cost to serve. For example, based on our tele-wide customer value management platform, we have scaled our targeted and automated campaigns essential to our ARPU growth. Furthermore, our program to reduce reasons to call and to improve agent efficiency pays off, directly translating into cost savings. But customer operations remains one key area where we see further efficiency potential through analytics, automation and AI and through improved process quality, which comes with our increasingly transformed backends. On the next page, as boring as it sounds, driving out legacy has been a key focus in our transformation because there are clear benefits, reducing headwinds from declining businesses like copper, reducing cost and increasing quality and customer satisfaction with modern products and technologies. And I just want to say here that we have kept pace in our program. Copper central offices in Sweden are reduced to 1200 and we reconfirm our target to be fully closed down by 2026. Our 3G networks are now shut down in Norway, Lithuania and in Estonia, and we are on track to take our 3G in the remaining Sweden and Finland, unlocking cost efficiencies and also being able to re-farm the spectrum. And we have now retired about 75% of our legacy network systems on track to be completed by the end of this year as planned, replaced by our future-proof network infrastructure. On the next page, our transformation approach is to simplify, standardize and scale. And we execute along our five P's, products, processes, platforms, people and partner. Let me now also update you on the underlying KPIs as in the last years. The logic has always been old out, new in, programmatically. On products, we have now retired more than half of our legacy, including migration. At the same time, we scale our focused portfolio of modern target products, now almost 60% live on target platforms and 70% of our products being reused by more than one market, which delivers obviously efficiency and also time to market benefits. We improve and automate our processes to enable zero-touch journeys. Through our group-wide operation excellence program, we have reduced incidents by 21% and at the same time, through our automation initiative, we have increased the number of hours saved by more than 100%. With generative AI just being deployed, this clearly is only the start. On platforms, same as in products, we drive legacy out and target in. We have kept our pace in legacy drive out with 58% reduction by now, up from 47 last year. While at the same time, we have increased the share of target platforms to 40%. Again, here, there's a point to reuse. Our single largest transformation in the group, which is in B2B Sweden, is live and being scaled with order delivery times reduced from weeks to minutes, better satisfaction and much improved process quality, and that shows also increasingly in our B2B NPS. This all sounds good, but as we all know, the hard part is the long tail. Therefore, our work is far from over. We also keep focused on our people and our partners to deliver more for less. On people, we have scaled our data democratization initiative by 70%, now enabling a large part of our people for data-driven decisioning. Also, we have scaled our near-short employees by 84% now, delivering excellent talent at very competitive salary levels from our Baltic locations. As part of this, in 2023, we have also built our analytics center of excellence in Lithuania as a key enabler for our AI and automation drive. On partners, we have further simplified our vendor and partner landscape, now reduced by 80% from the start with consolidated volumes on our fewer strategic partners. Together with our group-wide sourcing initiative, which was quite intense in 2023, we have now realized 800 million gross savings, which is obviously a key ingredient in our overall cost agenda. To summarize, through consistent execution of simplification, standardization, and scaling, we have laid a solid foundation which will carry us forward for further value realization. Now, moving on to the final pillar, I want to touch on our three chosen focus areas within sustainability. Within climate and circularity, we are progressing towards our set targets amongst those to be net zero by 2040. The big move of our CDP score from D in 2018 to A- today is a further testament of our work there. We progressively introduce science-based targets along our entire supply chain, where now over 50% of all supply chain emissions are covered by such targets. In digital inclusion, we exceeded our original target of reaching 1 million individuals with our initiatives. We have thus doubled our target to 2 million, and we are at 1.4 million achieved by now. Privacy and security is important for many reasons, and not least to drive business. As I mentioned earlier, we are winning an increasing number of contracts with enhanced security requirements, including with critical national agencies and also armed forces. To sum up, we have laid a solid foundation which already delivers tangible benefits. Now we can scale this foundation to full potential in the years ahead, so much work to be done. On inspiring customers, we delivered a broad-based return to growth in all our Nordic businesses after several years of revenue decline. On connecting everyone, we built a leading connectivity infrastructure now beyond peak mobile rollout and the bedrock of our business. Our transformation approach delivers clearly to simplify, standardize, and scale across our 5P assets with clear efficiency and quality benefits coming through and ready to scale. And we deliver sustainably as demonstrated by our net cost takeout of more than 1 billion SEC, despite being hit by much higher than expected headwinds such as the known inflation. With that in your mind, I hand back to Eric, who will look ahead to our 2024 financials.

Thank you, Rainer. Thank you for walking us through that strategic progress update. I will now spend the next couple of minutes on what we see before us in 2024. So let's take a look at the outlook for this year. We believe that the current top line and EBITDA momentum will continue, and we guide on low single-digit growth for service revenue and low to -single-digit growth for EBITDA. CAPEX, we expect to go up slightly in absolute terms in line with our expected top line growth and to support the solid operational momentum. We estimated it to be around 14 billion for 2024. And finally, the structural operational free cash flow, we believe to be in the range of 7 to 8 billion. On the next page, as you've seen and heard today, we have consistent growth in our telco business, and this is not just driven by a few markets or products, but it's very broad-based. In addition, we've implemented a more structured approach to pricing that we believe will continue to support revenue momentum in 2024 at a broadly similar, albeit perhaps slightly lower level than in 2023. One thing that has gradually become more apparent over the last two years is that demand for enterprise services has increased as enterprise customers invest in digitalization and secure communication. And we are the natural partner for them to work with us on this, given our position and strong level of trust. We also believe that the wholesale business overall will continue to support the revenue growth. Norway is a good example of how that business can be scaled on the back of a strong infrastructure footprint. Legacy erosion, we believe, will persist also in 2024, before retracting more clearly in the years after. And finally, TV and media has had a tough 2023, but we believe that the ongoing business restructuring and the new offerings can contribute to some improvements already in 2024. And of course, that business will benefit if the advertising markets approved sometime during this year. Now moving on to EBITDA. Our EBITDA growth is also underpinned by several levers. The most obvious one is, of course, the expected growth in service revenue that we just went through. We also have ambitions for further efficiency realization under the digital transformation Rainer just mentioned. And this we expect to become more visible in 2024, as the inflationary headwinds are expected to come down compared to 2023. Finally, the work done to right size the team and the content cost base of TV and media also will have support our EBITDA development this year. On capex for 2024, I said is broadly to be similar to last year as a percentage of sales. And today we guided that it will total around 14 billion to support the ongoing transformation and to make sure we maintain the current telco growth momentum. To help you think about 2024 cash flow, we also set out the interest paid on this page, which we expect, which increased by 800 million in 2023. And we expect another increase of around a billion in 2024. There are some phasing effects here, i.e. timing of payments, which push up the interest rate paid in 2024. And on top of that, there is a smaller impact from the increase in the average interest rates on our debt portfolio. But if the current market projections around interest rates materialized this year, with central banks making multiple reductions, then 2024 should be the peak year on paid interest for Telia. Moving to the cash flow outlook for 2024. And as you have seen, we guide for a structural free cash flow of 7 to 8 billion, supported by our ambition to continue our grow, our EBITDA on the back of positive service revenue development, as well as the expectation of further cost efficiencies. Cash capex is expected to increase somewhat in 2024 and be roughly in line with book interest paid. I just went through and we expect an increase of around a billion. Other items will likely be slightly negative, driven mainly by somewhat higher leasing paid as we continue to grow our business, as well as tax growing a bit on the back of the higher expected earnings in 2024. Working capital, which ended a bit negative for 2023, should instead contribute positively in 2024 on the back of continued work to normalize our inventory levels and expected improvements of trade receivables, both related to services and equipment. Financial framework on the next page. Our financial framework remains unchanged. We continue to target a leverage in the range of two to two and a half times and to keep a solid credit rating, which gives us good access to the credit side of the capital markets. Current leverage is well within the target range and we expect the proceeds from the transaction in Denmark to reduce leverage even further. There is no change to the dividend policy and the floor of two kroner per share. As said, the board has decided to propose at the April AGM dividend in line with the policy of two kroner to be paid in four tranches. Now to the conclusion slide. In summary, we are closing out an eventful year containing clear operational progress such as improved enterprise development, a strengthened position on networks and spectrum, a trend of improving MPS and the start of the execution of a plan to return TV and media to profitability. But we also have seen financial progress with a strong to the year in terms of profitable growth. We acknowledge that there have been continued headwinds related to external factors such as higher interest rates and a weak advertising market in Sweden, but strategic progress has been made. Financial trends have improved. And while there is much more to do, the foundation has been laid for future years. And with that said, we will now move into Q&A.

So, if you would like to ask a question, please press star five on your telephone keypad. You may remove yourself at any time by pressing star five again. Our first question comes from Andrew Lee with Goldman Sachs. Andrew, your line is now open. Please go ahead and ask your question.

Okay. Good morning, everyone. The question is really around cash flow headwinds. So, obviously, your share price is telling the story today. And 2023 didn't quite meet ambitions of structural operating free cash flow as it had been set out by management. And 2024 started with disappointment versus consensus expectations on capex and interest costs. So, just one question on capex and one question on the interest cost. On the capex side, ultimately, your guidance is 500 million more than consensus anticipated. Just want to get a sense of the market obviously needs a better sense as to the direction of travel for your capex. Clearly, I think you've laid out there's some success-based capex in there for this year in terms of customer connections. How can you help investors understand the structural capex outlook for 2024 as we go into 2025 as well in terms of sense of direction there? And then just secondly on the interest costs, the last couple of years have been kind of listed with negative surprises around vendor financing risk and now around the interest costs. Just trying to understand, consensus was way below where interest costs turning out for 2024. But those interest costs, that interest cost hike is driven by financing done at the start of 2023. So, I wonder if you could just talk through how you can help investors better understand the puts and takes on interest costs and any coupon expansion because we're constantly getting surprised by some of these factors. Thank you.

Yeah, thank you. Thank you, Andrew. Let me maybe start with capex. I think first and foremost to highlight the fact that we saw a strong decline in 2023 compared to 2022, which clearly was our peak at more than 15 billion, ending this year at just under 14. I think that's sort of common one. Common two is we've been talking about how we expect capex to move in line with our top line trend, which we've seen at low single digit. So, that sort of additional three to 400 million, if you will, for the guidance that we've given of around 14 billion would explain that increase, right? 3% on top of the number from last year would give you around 14 billion. I think the main thing is linked to what Rainer has talked about today, that we continue to one, invest in the profitable growth of our business. We want to make sure that we continue that momentum. The second one is that we continue to transform this business and the digital transformation that he talked about. And, you know, those are worthwhile investments. Replacing old by new comes at a cost, but that ultimately will lead to the efficiencies that will lead to our top line growth and also our EBITDA growth. So, we feel quite comfortable with that. I think all along last year, we've been talking about how we see capex to sales decline in 2023 compared to the peak year, 2022. And then we expect it to be a similar number around, I think, 15% roughly as a percentage of sales seems to be the fair number. I think maybe lastly, the point that, yes, there are investments that we make for customers. If you think about the enterprise fiber investments, et cetera, those are obviously very high return yielding investments. And, you know, we think those are the right investments to make because they ultimately drive a profitable growth. That on capex, on interest rates, I guess the best way to think about it is as follows. We ended the year with a higher gross debt. And if you then think about when do you pay interest on that increased gross debt level, it's actually typically comes at a lag of about six to nine months. So indeed, as you said, in H1, the company did quite a bit of pre-funding at the tune of several billion. And then some additional bonds in Norwegian Krona at the back end of last year. The interest that you pay on those obviously comes in 2020-24. And what has happened in the meantime is obviously that the interest rates have changed. So it's a combination of one higher gross debt and that the average interest rate has moved up in 2023. So if we then think about guidance for it, as I said already in my voiceover on the presentation, obviously everyone is hearing what the central banks are saying. And there is a clear expectation for 2024 for interest rates to come down potentially faster than we had expected. And all of that obviously is then beneficial to us. So yeah, overall, we saw an increase of interest paid of 800 million last year, and we expect an additional billion this year. But let's see where interest rates take us later this year. Thank you.

Our next question comes from Andreas Jolsen from Carnegie. Your line is now open. Please ask a question.

Yes, good morning, everyone. Surprisingly a follow-up on cash flow. Just wondering about the proceeds that you expect coming from Denmark if you have made a decision how to use that, if that will go entirely to deleverage or if you will perhaps use it also to reduce the financing program. And then secondly, on the working capital, which you say will be positive, can you give us some more clear visibility in that, how you can be so certain that that will come up? And perhaps also finally, can you tell us a little bit about the board's arguments? There have been a couple of years when the dividend has not been covered and 2024 looks challenging. So if you can explain a little bit the floor of 2 kronor, how the board is sort of argumenting on that floor. Thanks.

Yeah, maybe to start with the last one. And I just, you know, it's my first year as doing the full year results as a CFO, which is why it was important for me to underline the commitment that we have as let's call it new management with regards to the financial framework. That's a medium to long term policy that you have and we strongly believe in that. I think the second thing is if you look at the underlying performance of my telco business, we did almost 8 billion in structural free cash flow, which more than covers my dividend. So that's an important commitment that we have. I think the third point to make is we have a very healthy balance sheet. As you've seen in the Q4 update, our cash and cash equivalents have gone up by roughly 4 billion from around 7 to 11. So also from the balance sheet perspective, we're in a very good position to be able to cover that dividend. So that on the dividend cover, the proceeds, the proceeds will be used to deliver our balance sheet. One, because we think it's both equity and credit positive that we go even further to the lower end of that two to two and a half times range. And the other one, which obviously is positive, is the interest that one receives on those cash balances are also very helpful for one that will help us to counter the increase, the interest paid on the debt that we have outstanding. So that's only also is something that we see is positive for us. Then with regards to working capital. So if you recall already around Q3, I gave a bit of an update and certainly when we're on the road, I talked quite a lot about with analysts and investors on the work that we're doing as finance to get a better grip of our working capital position. And what we're seeing is that we were able and we sold already in the second half of the year. And certainly in Q4, you can see those results coming through where in essence we expect to go from what historically has been a cash outflow to now a cash inflow for 2024. We've used the word positive full year contribution expected. I think I can add that we think it's going to be a meaningful positive number for 2024. And the way to think about it is we see improvements in trade receivables, as I said, which are both related to services and equipment, which we continue to proactively manage. The second thing is we will benefit from some payments we did not receive at the back end of last year. Just to give you one example in Sweden alone, we had two customers that didn't pay 200 million. So that will benefit us already in the first quarter when that swings back. Thirdly, inventory. So I did get some questions about that last time. And I think what we've done is an increased focus on that. Again, if you look at the strong working capital improvements that we've seen in the fourth quarter, it is the work that we've done here. We think there is still more to go there. Obviously, also in 2024, as you're used to from Telia, you will see some fluctuations from quarter to quarter. But in all, if we put these various components together, we think we're going to have a cash inflow rather than a cash outflow. And that the absolute number is going to be a meaningful number this year. Perfect. Thanks a

lot.

The next question is from Marie Patrick with Barclays. Your line is now open. Please ask your question.

Yeah, hi there. Thanks so much indeed for taking and doing the call and the Q&A. Sorry to ask more modeling questions. But maybe you could help us understand some of the OPEC's drivers for 2024. You could get together through some of them in your prepared remarks. But I'm thinking what sort of wage increases should we be factoring in? Is it a 3 or 4% number I think you've talked about before? What do you see the absolute energy tear when being for the year or headwind even? Maybe some of that by location as well would be helpful. Thank you very much.

Yeah. So salary wage increases, as we said, we have the advantage in many of the Nordic countries that we actually have two year agreements. And what we see actually is lower increases in 2024 than what we saw in 2022. So if you think about the market as Sweden and Finland, for example, and Norway to some extent, we were closer to 5% in 2022. And we're closer to 3% in 2024. So I said the year on year comparison that is less of a headwind, less of a drag this year than the year before. And on the energy, what we have seen, so we had an overall benefit of I think roughly 120 million in 2023. Where if you recall, it was negative. So it was still a headwind in the first half. And that became then a tailwind in the second half. We expect that to continue in 2024. And roughly, I think that's going to be around 100 million again. So positive development.

Thank you. Any other sort of headwind or tailwind you want to call out maybe in the next few questions?

I think we're looking at the year where inflation hopefully is going to be a little bit lower than it was last year. So that will presumably help us a little bit in the prices of services we buy, et cetera. But nothing specific.

Thank you very much.

Our next question comes from Andrzej Kabczek from UBS. Your line is now open. Please ask a question.

Hi. Good morning, everyone. And thank you for the presentation. I've got two questions, please. One is maybe on the working capital or more precisely the vendor financing going forward. So the same way you've had a big negative drag in terms of this item because of interest rates increasing. What is your expectation going forward as interest rates supposedly or hopefully normalize? And how would you kind of manage what today is the $11.5 billion pile? Because I guess

you

would have an option to either see that number decline on the back of the interest rates coming down, or you are kind of thinking about managing this program going forward. That is one question. And then the second question, please, on the TV review, which is kind of currently, you're doing the transformation, obviously. There is, I guess, the trough of trends that we're seeing in terms of advertising, et cetera. You are about to potentially save a lot of money on the asset. You did a small impairment on the asset, but we've seen, I guess, speculation in the press that you're looking at selling this asset for much lower value than you bought it for. So I guess I know you probably want to comment on that, but directionally, or generally speaking, why would you make a decision to sell the asset now versus waiting for another year when things clearly improve both from a restructuring and cost as well as a market perspective? Because obviously the media kind of assets are probably not trading where they could be today. So any comments on that would be helpful. Thank you.

Thanks, Andre. So let's start with TV and media. Obviously, I'm not going to comment on any press speculation that was there. That's customary for not to comment on stating the obvious, right? I think for us, the focus has been, and you clearly saw that in today's report, the progress that we have made in TV and media when it comes to growing the customer base, sort of this customer satisfaction that we see with the products that we've launched, but mainly also the positive business performance. So again, a quarter where we actually have positive EBITDA, where the year on year increase in EBITDA is 123 million sec. That's a massive swing. And that is because of all the hard work done. And it's partly by restructuring the workforce, but also by reducing the content cost. And it's really moving from expensive sport content to more local content, which is cheaper to make. What we have though, of course, in 2024, still is sort of the backend of the UEFA Champions League and also the rights that we bought to the European champions, which is in the summer of next year. But content costs are down. We expect that to continue. We continue to drag a little bit the UEFA Champions League and the European champion next year, but we will continue to benefit from the structural performances which has gone up in this business. So if you think about the drag that TV and media was on our business, about half a billion EBITDA and 650 million in cash flow, we expect that to be very different in 2024. And we've always been saying that this is a business that should be able to do a billion in EBITDA. And we continue to expect that for 2025 and beyond. With regards to vendor financing, quite simple. We ended the year at 11.5 versus 11.4 where we were last year. We expect it to be a similar number for 2024, i.e. it's not going to be a cash inflow or a cash outflow. If you think about the delta of those two, what we continue to do obviously is monitor what we're praying for this. Is that the right financing for us year on day? And so far we feel very comfortable with this type of financing. For potential solutions to that in the future, it's a bit too early to be talking about that, but we feel quite happy with the balance that we have at the moment.

Thank you, Tommy. One quick follow up. Is there a payment related to this ending three-year cycle of due for consent to be made in 2024 or you kind of pay half a year ahead, i.e. the final payment would have been made still in 2023. Therefore, any kind of cost savings on the rights would fully be analyzed in 2024. Should you keep the rights?

So, Andre, the question is on Champions League. Yes. So, yes, exactly. If there is

any residual payment.

Yeah, final payment in February, I believe. So, we have one payment in Q1 and that's the final one. And then

afterwards, and if this payment afterwards depends on who wins that contract, I guess.

Exactly. Exactly. Thank you.

Our next question comes from Nick Lyle from SockGen. Your line is now open. Please ask your question.

Good morning, guys. It was a quick one first on Sweden. You mentioned the improvements in the network and the relative position in the network. Are you feeling more aggressive about price rises into 2024, please, Eric? And also, how does that sit versus the big premium that you sit on versus the other operator? Could you just mention such a strategy into 2024 and pricing, please? And just to come back, if I could, to Andre's question as well on the Divi policy of the board, could you give us some parameters on that? Have the board set parameters on when this becomes unsustainable or why it's sustainable, please? I mean, such as the number of years that the Divi is going to be uncovered or the gearing levels that you would run to? Because obviously, the Divi goes back to a cash Divi of $8 billion this year. So, it's going to be pretty apparent that the Divi is uncovered if you are hitting, let's say, 7.5 in the middle of guidance. So, what has the board said about the sustainability of this dividend policy,

please? Yeah, sure. Thanks, Nick. Let me start with the last one. And of course, if you pick the midpoint, then conveniently that sits below the 7.9 dividend that we pay. But obviously, we as a management team and Patrick Stouty next week have a very clear ambition together with the leadership of the various countries to do better and to be at the top end of that, which then obviously covers the dividend. It's not a place to be speculating about those conversations. But rest assured that we as a company firmly believe in this financial framework, which has various components where you feel comfortable when that debt to EB dies is one of them. But also, the dividend policy that we have. And let's not forget, ultimately, you want to have a progressive growth of that as well. We think that the company continues to deliver top line growth. It continues to deliver that growth and convert that growth into very good EB data, as you've seen in Q3 and Q4. We expect that momentum to continue this year. And ultimately, that gives us confidence that we're able to cover that. The other one, as already mentioned in my previous answer, is there is a strong balance sheet that we have. We have very good balance sheet where even if you would add the Denmark proceeds, we're going to even be in a much better position at the lower end of that range, which gives us the cash and cash equivalents to amply cover the dividend. So we feel quite comfortable about this. With regards to Sweden and our position, obviously, our connectivity is important for us. How well we do on the whole infrastructure is important because that is how we can command a premium in the market and defend that. And so the plans for this year are a bit less, as I said in my voiceover, a bit less than what we've been doing last year. But still, we look at the market and obviously, we welcome the moves by some of our competitors. Last week, I think it was where we have seen price ranges increases across the board, both on mobile and broadband, which obviously is very encouraging to see. So you should expect when we talk positively about our guidance, low top line growth, that that partly is driven by the price increases that you will see, not just in Sweden, but across our portfolio.

And if I may build on that, Erik, can you reference? Thank you very much. We see at the moment in the main brand market is manageable. There is a premium. We have a premium quality and that premium has not expanded, maybe contracted a little bit lately. So I think we're quite comfortable with that part.

Thanks, Erik. Cheers.

The next question comes from Jacob Bluestone from BNPXN. Your line is now open.

Hi. Thanks, Jake. My question is about two quick ones, please. First, let's get back on the capex question from Andrew earlier. It's very clear that you expect steady capex sales and that's driving the small increase in capex this year. My question is more what happens beyond 24? I mean, if I look at your strategy update on page 25, you do reference peak absolute capex, if I understand the slide correctly. So beyond 24, do you think you can bring down either capex sales or capex natural terms? Any thoughts around that would be helpful. And then just secondly, around your labor costs, as you mentioned, I think you said a 5% average increase. Your personnel expenses went up by 10% this year. So if you can maybe just help us understand what some of the other pressures are and specifically where the productivity improvements showing up there, because it's also fairly sizable impact, I guess, partly because of some of these bonus payments. I'm just interested in your thoughts on what kind of increase in personnel costs we could see as opposed to wages specifically.

Yeah. So perhaps to start with the last question. I think the main positive thing, if I sort of cast my mind back to 2023 with regards to those cost items is the fact that we reduced the workforce by about 1300 last year. I think when we set out this strategy a couple of years ago, the idea was to sort of see about 1000 people leave, that obviously helps, certainly in an inflationary environment. The point that I made on the 5% was last year, right? So 2023, we're expecting that to be less this year. The other one that explains the delta that you mentioned, I don't recognize it 10% by the way, but the delta is the bonuses, obviously, that we have seen. So that was a strong performance in the second half of the year, certainly when it comes to top line growth, profitable growth, so EBITDA, but also the strong MPS scores that we have seen, which have led to across the board in the company to good employee bonuses. That's the other sort of increase that you saw. There is nothing else, I think, in those good labor costs.

And I think just to add to that, I think you are looking at the personnel cost number in the report, which is in Swedish Krona, there is an FX component to that. So if you take back the FX and the bonuses, I think you get not much expansion of personnel cost. So overall, coming back to the fact we've been able to keep OPEX flat in an inflationary environment and we will continue to look for efficiencies also going forward.

Yeah, and I think, you know, with regards to the first question, I think we feel quite comfortable in talking to 2024. I think it's a bit too early to be speculating about 2025 also. I think, you know, Patrick needs to get his feet on the table to get a sense of where we are. But ultimately, as an organization for the multiple year plans that we've made with the transformation that is ongoing, the cost of investments that we do, we feel quite comfortable with sort of the capex to sales numbers that I've indicated. I think the main one not to forget is it has peaked, right? So that 2022 number of 15 billion plus is way behind us. And I think that gives you a sense of, you know, where the organization is not going to go in the future.

Thank you. Our next question comes from Ziyu He from Citigroup. Your line is now open. Please ask your question.

Good morning. Thank you for taking my questions. I have two, please. The first question, I'm just wondering if you can talk about your cost saving program for 2024 and 2025. I remember when you laid out your strategy back in 2021, you said that you're targeting that saving of two billion between 21 to 23 and another two billion between 24 and 25. And I'm just wondering if you can walk us through what are the new cost saving initiatives you have in mind to achieve that. And the second question is on networking capital. You have, if I look at the networking capital contributions since 2016, you started the program. I think you have a 10 billion positive contributions. And also you now expect meaningful contribution for 2024. I'm just wondering, compared to your total payers, how do you view your work capital efficiency? And probably beyond 24, how should we think about networking capital development in the medium term? Thank you.

Maybe to start with the last question. So again, it's a bit too early to be speculating about 25. So beyond 24, if you will, because those plans are yet to be made also on the new management. But in reality, I feel quite comfortable with the change that we see now with the work that we have done, where we go from cash outflows that we saw in prior years to now cash inflows. So it's a bit early to sort of say, you know, I can confirm today that we're going to see that in 25, but that certainly is my expectation. How that then compares to peers is, yeah, it's not something that has for me to comment on. I think there is more to be done. You've seen the results for that in the second half and in Q4. And hence, I feel quite comfortable to say today that we're going to have a meaningful and positive impact from working capital in this year. With regards to the cost savings at the Q3 results, we talked about that in essence, this is what we have been able to deliver the one billion, where obviously we as an organ and net where we as an organization had to deal with as many others, by the way, with a lot of headwinds coming from the inflationary cost, which has made that, you know, in essence, hard to achieve those original targets set out. I think you should expect and hence the cost efficiency remark on page 31 in the analyst presentation that we will work very hard on creating plans for further cost savings. That already is what is reflected in this 24 guidance because that EBITDA growth had that we saw in 2023 plus 1.3 billion. We're kind of saying we're expecting something similar for 2024. That is driven by both top line growth, but also taking out more cost, which is COGS and SG&A. And then there is more to be done. And you should rest assured that we as a management team will plan to work on that. Rainer?

So I would just like to add to what you said, the main drivers that we have been activating since we started the transformation also remain relatively unchanged. One key driver, I tried to point out, is taking out the legacy, which really has a drag, not only in the top line, but also specifically to maintain and the costs as we go out of the legacy, we see less of the cost. That is part of the plan 24. The second one is the simplification automation, where we see also the effects. Now, the headcount that Eric mentioned and taking out total 3,200, I think, since the start last year, 1,300 is driven by the fact that we simplify and we really see an increasing amount automation. And as I was saying, this is only the start. The third element has always been the vendor consolidation and then the added sourcing initiative that I tried to also call out, which is basically saying we get more volumes to less vendors and we are seeing those benefits coming through. And the last element has always been what we call the ride shoring, where we are taking quite expensive resources into lower wage markets, where we see very good talent. And that has been a effect as well to compensate some of the inflationary pressure that we have seen on the salary. So all these levers, we are quite confident we will see continuing in 2024. And they have been compensating the headwinds quite well. And as the headwinds go down, those levers should shine through even more.

Thank you very much. A lot of questions have been asked. I just wanted to come back a little bit on the pricing environment. You have had a few years with fairly decent price rises on numerous services. How do you think 2024 will play out and what are you sketching on in possibilities for price increases on services? That's one part. And Ryan, your slides, very good slides on what you have achieved digitalizing and picking out all the legacies and all that stuff between 2020 and 2023. I would be interested to hear your painting a picture on what more you can do if you take a two year or a three year horizon and how specifically that could impact the production cost in the networks and so on. So it would be interesting to hear that. Thank you.

You want to take the pricing question, Erik? Shall

I start with pricing? As Erik briefly mentioned, we are looking at a broadly similar, maybe slightly lower, considering lower inflation, but broadly similar pricing effect in 2024 as in 2023. As you noted, we have done a lot of things. So pricing moves might not look exactly the same in 2024 as they did in 2023, but the pricing can come in many ways. We can retire all the tariff structures and offer those customers new products with higher value and a slightly higher price. We have a larger effect from CPI based pricing, although that's still small, but still in Sweden and so on and so forth. So it will come in different forms and shapes, but roughly on a similar magnitude as last year, I would say, on pricing. Rainer,

on the second question. Yeah, very good question. I love it to have a question beyond working capital. So what we try to say in the presentation is that we strongly believe we have laid a solid foundation with the digital transformation program that we started three years ago. We see the benefits coming through now more and more, not only in these operational KPIs, but also in the financial and also now in the customer experience. But the foundation is yet to scale. That's the big thing. If we bring in, I was trying to call out the B2B Sweden, which is probably one of the most untransformed areas that we were faced with when we started. We are now live. We are acquiring customers on the target stack. We are migrating customers and products towards the target stack. And the results are just stunning, but we haven't yet done all this migration. So there's a quite a significant migration period where we are then populating the new products and platforms and then we can take out the remaining long tail. And I was saying, as well as painful as it sounds, the legacy retirement has been progressing well, but the hard part is also yet to come because that requires obviously the customer to be migrated off. So I think the one part is scaling the foundation. The other part, as I was trying to call out, is on the automation side. I believe and we believe we have really only started to do the automation. In order to do automation, we had to put in certain digital platforms and one of them I didn't mention, but it's the ServiceNow platform, which is now live across the entire company in all our markets. And that is the backbone for all the workflow that is happening. And once I have that backbone in place, I can also automate. And this is one example out of a few where we are now starting to activate automation. Obviously, as everyone else, we are starting to look into the generative AI opportunity as well. There's a bit of a hype, I have to say, but we do have live use cases already, for example, and that is maybe the third area I wanted to call out in the customer operations. I mentioned that we have seen reductions in the calls and we have also seen reductions in the cost, but we have not seen as much as we want. That's part of the reason why we believe that, especially in the customer operations side, we are going to be seeing significant efficiency increases as part of the plan in 2024 now. And that is due to the fact that we can just start to automate some of the transactions that are still happening with relatively expensive people as compared to running more and more use cases automated. So I think it's really about scaling the benefits of our foundation that we laid and driving the opportunity on automation, AI and analytics throughout the company to realize more efficiencies. So we are going to be a much leaner company as we laid out. I hope that is sufficient an answer for now.

Yeah, absolutely. Very clear. Very good. Thank you.

Our next question comes from Kaval Kairoya from Deutsche Bank. Your line is now open.

Thank you. I've got two questions, please. So firstly, are you able to share with us what currency assumptions you're using for the 2024 free cash flow guidance, given the SEC tends to be quite volatile and your operational cash flows on edge. So maybe just put another way, you know, if there's a temptation to depreciation, depreciation of the SEC, what does that mean for your free cash flow? And then secondly, you've already talked about wanting to be at the top end of the free cash flow guidance range. So I'm wondering why the low end of the guidance range is even there. Are there any scenarios where free cash flow could end up in the lower half of the range? Or should we really focus on the upper half? Thank you.

No, we feel comfortable with at the end of January to give this as a as a guidance. I think the ambition clearly is there. It's the uncertainty around where ultimately interest rates could go this year, which then is a benefit. How much profit you make. So the tax that you would pay on that, we feel very comfortable about sort of the trajectory of EBITDA. If you think about what we saw on Q3 and what you've seen in Q4, no reason not to expect that for the first quarter of this year. I think the other one is what will happen to TV and media, right? So a 500 million drag is that going to change in this year, given the continuation of the restructuring impact that we will see, but what will happen to the advertising market. So you kind of need to choose where you think this all adds up to. We feel quite comfortable with that range at the moment, and we will work very hard on making sure that all the levers that we can pull, we end up at the upper end or above it, stating the obvious. With regards to currency, I'm sure we can come back to you with the exact assumptions with Eric and Andas outside the call. I think the main one maybe to call out, so last year, if you look at that sort of 12-month development, SEC wasn't very helpful, obviously, right? It continued to depreciate, and we have quite a lot of cost in other currencies, mainly euros and some crown as well, and some US dollar exposure. If you think about kit that we buy and cost that we have, apart from the last month of year, which was quite positive, and then you all of a sudden see how that massively benefits some of the other line items that we have, including interest rates. So if I think about trajectory for 2024, where upside could come from, on what in essence is sort of this one billion extra cost interest rate is what will happen to the interest rates, and also what will happen to the Swedish crown. Anything that happens there on appreciation is helpful because it's very sensitive to it. This is also why you come up with what is a bit of a range, because we can't speculate on what that will do. So yeah, I feel quite confident with what we have set out today, and obviously we'll work very hard to make sure we outperform versus what we have promised.

That's good. Thank you.

Our next question comes from Victor Hogback from Dance. Your line is now open. Please ask a question.

Good morning. So just a quick follow up on the Denmark proceeds. If the net interest affected that, so the interest received on the cash balance, and then the lower interest rate, lower interest cost once delivered, is that baked into the 2024 guidance of the increase of a billion second added interest costs? Or is that an effect that will come in 2025 from the Danish proceeds?

Yeah, so I think that's right. So not much effect in 2024 because the way the debt portfolio is structured, but in 2025 it will benefit us. Absolutely correct. Thank

you. The next question comes from Titus Grant from Bank of America. Your line is now open. Please ask a question.

Good morning all. Thanks for taking my questions even after so many good ones have broken out. Just maybe two quick ones first. A bit of a follow up. It's difficult to ask, of course, you mentioned the maybe wider range of EBITDA and the TV and media business in 2024, and you mentioned your confidence into 2025. But in 2024, is it safe to assume that the absolute EBITDA number should or could be positive for the segment? Depending, of course, on the chamber's big right as well. Is that your base case maybe? And then the second question would be just on the impairment that you've looked into for, not just in the TV and media segment, but also Finland. I think Finland is maybe a bit more a curious case given that you do very well in that market. So I just wondered, what changes have there been compared to the year ago which which drove this impairment and that mainly related to the changes in regulation for the business numbers and Finland?

Yeah, maybe just to start with the impairment. I think obviously TVM we would expect given what's happening on the advertising market. Finland very happy with the operational financial performance as you have seen. So I think regulation plays a role which is basically interconnecting charges. Partly it is some additional investments that we're doing in infrastructure if you think about the network and the transformation that we're doing there. I think ultimately it comes back really to, and if you would go back historically, which I've done as part of my prep, if you will, is that it's mainly related to those assets historically that we have bought, that the company has bought and that's then related to the goodwill that we paid at the time of acquisition. If you will look at the assets that we've owned for a long time, like for example Sweden, you don't see these impairments. So it's mainly related to the historic goodwill paid much more than what the underlying performance is because Finland is doing well and frankly you've seen what TVM media is doing. When it comes to the EBITDA I would say flat to positive and then depending on how the advertising market will develop where we think H1 will still be quite muted and then one would expect a better second half. I think maybe just to get a bit more color on the advertising market. So we saw a decline of 14% in Q4 which was already a bit better than what we saw on Q3. If you recall that was minus 16% but Q4 is also impacted by the World Cup, we forget football that we had last year and so if you would adjust for that you're probably looking at more you know 10-11%. So still negative but certainly it looks like we're heading in the right way. I'm still a bit pessimistic about H1 but more positive about H2. So overall sort of flat to positive which obviously is a big swing versus the minus 500 in 2023.

So we're ready for the next question. I think there are a couple of more on the lines.

Thank you. So our next question comes from Stefan Gauvdin from DNB. Your line is now open. We'll ask the question.

Yes a couple of more questions on the TV and media although we got some fat flavor here in the last question. First of all just on your EBITDA guidance, have you baked in a lower cost for the Champions League rights in this guidance or have you assumed that the current cost for Champions League? And then just actually just to understand the current trajectory, the TV and media business had an OPEX reduction of 12% year over year in Q4. Does this reflect the full impact from cost savings and also given the lumpiness of the content cost? Or there are some one-time things either in Q4 2022 or Q4 2023 that disturbs the picture or can we dare to extrapolate the OPEX reductions into 2024?

Yeah so and feel free to add Erik. So the trajectory is clear. That was my answer in the previous question Stefan as you heard. I think content cost in general continue to be part of how we improve the performance of TV and media regardless of the calendar year. I think what you will see still in 2024 which is why I sort of set flat to positive is there is content cost that we will pay for in 2024 because of commitments made many many years ago. The example here is the European Championship next this summer for example. I think what is actually clear is that those were cost made at a very very different time where people were competing for content and felt that this is what was needed. We don't see that happening now. You know if you sort of see where are we on the UEFA Champions League, right? It's still you know in progress. Bits have been given and it's still being considered. One would assume the delay for that is related to maybe different prices than what we've seen historically which only would be normal if you look at the state of the TV market. So all of that I think is positive because you either you know have the rights and you have them at a lower cost or you don't have it and you can substitute by other things which are attractive to our customer base as you've seen by the strong growth in our customer base in the second half of the year. Eric, anything to add? TV media?

Yeah I think so you asked about one of effects etc. I think in TV media business every quarter is a bit unique. There's more seasonality also than in Telco. I think we have Eric mentioned the World Cup in Q4 last year and the Euros in the in the summer of 24 and so on. Yes the Champions League sort of reduction is in the assumption as well as the components. I think we're looking at the longer term sort of restructuring of the premium sports portfolio which will benefit us significantly over the course of a few years and that's sort of the main thing and we certainly looking for a positive EBITDA number for TV and media next year or 24.

That's very clear thank you.

Our next question comes from Ismongazi from Berenberg. Your line is now open please go ahead and ask your question.

Hi thank you very much for the opportunity. I've just got one question please. The guidance for low to mid single visit EBITDA growth would you expect that to be kind of a similar trend across Sweden as well as the rest of the markets or would the guidance be achieved with kind of an over contribution from the other markets and Sweden continuing to be in this you know kind of flat to up one kind of trend. Thank you.

Yeah so yeah I'm a bit singled up. We kind of said last year to clarify that when we came up with the upgrade at Q3 I think it was that you're looking at 3 to 5 percent is in essence what that means which is well above the top line growth that we are guiding for and I think if you look at what 2023 delivered EBITDA growth wise per market you should expect something similar for 2024. So to your question it will be proportionally from the non-domestic market if you will and why is that? Because some of those countries like the Baltics grow at a much higher clip as you saw in 2023. You've seen the growth in Norway, you've seen the growth in Finland. So we would expect something like that to continue and again as I said earlier the best way to think about that first quarter is to look at the trajectory that you saw in Q3 and Q4 for our service revenue growth and also for our EBITDA growth.

Right can I ask you for a follow-up? I mean when you look at the Swedish performance I mean on the EBITDA side I mean should we be looking at from a sustainable perspective should we be looking at it excluding these FX kind of gains that you had in Q3? Because obviously that makes a big difference you know without that Swedish flag with that

Yeah absolutely and I think the best way to think about it so we talked about the energy cost earlier today how we benefit to the tune of about 100 million and none of that was in Sweden for example and that still was negative so we have that to come. I think the way to think about Sweden as follows one is both businesses if you think about mobile and enterprise are doing well I think we've talked about price increases which will benefit us there. I think the third lag that the team is really focused on also is operating cost. They have a clear task to improve that and that again will immediately flow down into our EBITDA for 2024. So yeah so broad EBITDA growth is broad-based and yeah we expect Sweden to also contribute to that.

Thank you. Our final question comes from AJ Sonny from JP Morgan. Your line is now open please ask your question.

Hi there thanks for taking my question. Just a quick one on Sweden you've always seen a good step up in ARPUs there and I just wanted to ask more specifically about the discount and family segment because I think potentially these were negative impacts last year and you mentioned also that you're a bit more cautious on pricing maybe this year. So why is that? Are you seeing pressure on the Swedish consumer which maybe means that you can't raise prices as much? And then the second one is just around capex. I know you can't really guide to say 2025 but if I look at some of your capex buckets like your 5G rollout, your legacy network it feels like these are going to drop off in the next couple of years so could you give any color on these capex buckets or any other ones where you expect material change in the next few years? Thank you.

No I think maybe just to start with the last one I think they're actually you're absolutely right. We know that at some stage legacy is out by the end of 2026 and to get there there is some capex investment need which is what we're paying for now. At some stage you're finalizing your 5G which is not just POP which is close to 90 but also your geographical coverage. There is some 4G to be done with sunsetting 3G in various markets which and there is some cost related to it. At some stage you've worked your way through both mobile, your fix or your fiber rollout and also your IT and I think this is the one which sometimes people forget about. It's not just about finishing your network rollout it's also about the digital transformation that Rainer talked about today and there is more work to be done there swapping out the old for the new but there you're absolutely right. With regards to Sweden and Erika I'll let you comment but I think overall we still find this a very good market for us. I refer to the price increases that TELA2 has done which obviously is very positive and it almost has two markets in itself. Very good change in enterprise as you've seen and the mobile sort of has two elements to it. Very strong on family and postpaid and then there is sort of the prepaid or the lower end of the market segment where you see others growing. We benefit a little bit with our fellow brand there but that's not sort of the end of the market where we play and people you know take a bit of market share. We are able to protect our growth in mobile because of holding on to our customer base only when it comes to the enterprise and the higher end of the market and there actually we've seen increases as you said so we're quite comfortable with that and we don't see that changing in 2024.

Yes if I should add anything I mean you mentioned the discount segment and as Erik said we are represented there through our fellow brand. We can see it's growing a bit faster than the overall market and we're more represented in the premium segment. What are we doing about it? We are an ambitious agenda to manage that going forward through raising the prices on the family lines which is a big you know a part of that lower priced segment of offerings and also on our fellow brand we've taken price 23 and overall our ambitions for taking prices is broadly similar I would say in 2024.

Great thank you very much.

There are no further questions at this time.

Okay thank you everyone for all of your questions. We look forward to talking to you in the coming weeks and months and thank you and goodbye.