Telia Company AB (publ)

Welcome, everybody, to Telia Company's Q1 2024 results presentation. And with that, I want to hand you over to Telia Company's Head of Investor Relations, Eric Strandin-Piers. Go ahead, please, Eric. The floor is yours.

Thank you, David, and welcome everyone to the call. We have for the first time our new CEO, Patrick Hofbauer, and our CFO, Erik Hagerman, doing this call this morning, and we will do the management presentation followed by a Q&A. As usual, I hand the floor to you, Patrick.

Thank you, Erik, and good morning, everyone, and welcome to this Q1 presentation, which is the first Telia result presentation for me, as Erik just mentioned as well, having started during the quarter. I have already met some of you live during March, and I'm very happy to be back in the Nordic telecom industry, as I have previously been 11 years at Telenor. I spent much of my first approximately 80 days meeting people in Telia and working intensively with our business leaders on our plans. And even though there is still plenty for me to learn about the company, I must say that I'm encouraged by what I've seen so far and when it comes to Telia's impressive, I would say, set of assets. High level of competence and industry knowledge and desire to grow along with our customers. These things are all great prerequisites to build from, based on what I've seen and based on my perspectives of Telia as a competitor for many years. I also see improvement potentials spanning several fields, such as how we deliver our services, execute on our efficiency and investment agendas, and how we deliver value to all our stakeholders. There is an opportunity to create faster and more efficient Telia. But let's now look at the first quarter. And as you know, Telia has been on a transformative journey with focus on profitable growth, efficiencies and capital allocation. This focus will continue. And the first quarter shows that we are on the track, the right track. There is a consistent, solid growth in telco, and our TV and media unit, which is still impacted by a weak advertising market, is seeing reductions in losses on the back of digital transformation and successful restructuring. We also continue to deliver better customer experience. This quarter, we for instance launched a new self-service app in Lithuania, added new premium content to our TV product in Norway, and saw record low volumes in the Swedish customer service. All of this appreciated by our customers, resulting in a continued positive trend for MPS and continued low mobile churn levels. This at the same time as Orpus continued to increase in most markets. As I said in the beginning, I'm impressed by Telia's infrastructure asset. And in the quarter, we made further progress on 5G, with especially Sweden accelerating the pace, moving up from 82% to almost 90% population coverage, while shutdowns of copper and 3G are on track, which is also important. So all in all, we have started the year in line with our plans, and we can confirm the full year outlook. So let's look into Q1 highlights. And as said, momentum in our telco operations remained healthy with service revenue growing 2.7%. And again, it was broad-based with growth in all markets as well in both mobile and fixed services. This quarter, consumer was the driving force with a 3.8% increase, whereas enterprise was neutral. The growth in service revenues also drove EBITDA growth of 2.1%, despite a right-of-overdue receivables and pension refund facing in Sweden. Without these items, Telco EBITDA would have grown around 4%. The performance in our telco operation was further amplified by TV and media improving, resulting in a 4.6% growth for the full group. Structural OFCF reached 0.4 billion after being impacted negatively by minus 0.4 billion in phasing of pension refund. It remains in line with our plan for the year, with quarterly cash flow turning visibly more positive in the coming quarters. Leverage increased somewhat to 2.43x on the back of the cash flow facing and on the quarterly dividend payment. The sale of Taylor Denmark was, I'm sure you have seen, closed in early April and including these proceeds leverage would have been about 0.2x lower, so comfortably in our target range. Finally, I would like to give a heads up that we are planning to have a capital markets update in late September at our office here in Stockholm to tell you more about our midterm ambitions. So we hope to see you here then. Moving now into the markets and starting with Sweden. Service revenues improved again sequentially to a growth rate of 3.5%, driven by the consumer segment and especially by broadband and TV, where we have strong products allowing for pricing above inflation with maintained customer satisfaction. And together with these segments drove a revenue uplift of more than 200 million. Enterprise growth was more modest this quarter following phasing of tenders and a slowdown after a very strong second half last year. The underlying demand for our services in security, IoT and cloud, however, remains. Excluding the impact of legacy services, which was 130 million in the quarter, underlying service revenue growth climbed to 5.6%. The close down of the copper network continued and more than 50 municipalities are now free from copper. EBITDA, however, moved into negative territory following a 100 million negative impact from refacing or pension refunds from Q1 to Q2, and also a 50 million write-down of overdue receivables. Excluding these two items, EBITDA growth would have been 2.8%, a good achievement by the Swedish team. Moving on to the operational KPIs, and as you can see, mobile post-op aid subs grew by 15,000, supported by consumer and prominently growth in fellow, but also for the Telia brand, as well as continued low churn levels. ARPU, however, continued to be fairly flat, owing to the mixed shift with growth in family tariffs, as well as growth on our fellow brand. Our broad bus subscriber base remained unchanged as growth in fiber and fixed wireless access continued to compensate for the ongoing decline in copper, which totaled to 8,000 in the quarter. New fiber pricing taken last year, coupled with reduced campaign levels, resulted in ARP growth of 7% and another quarter of double-digit fiber revenue growth. Our TV aggregator business in Sweden, which is now a clear market leader, continued to show stellar performance with subscriber base growing of 15,000 in the quarter, spread between both SDU and MDU, and an ARP that increased 8% on back of pricing. Moving to Finland, where service revenue growth remained stable around 2%, supported by another solid quarter in mobile, which increased 4.4%, despite a continued headwind from Interconnect. Like previous quarters, service revenue growth was driven by consumer, while enterprise saw a slight decline attributable to fixed services. New regulation around special service numbers have negative impact on the service revenue growth of about 1 percentage point. EBITDA growth remained healthy at around 4%, driven by mobile revenue growth, despite much lower energy tailwind this quarter. The mobile subscriber base declined 25,000, mostly attributable to consumer, following continued focus on value over volume. This drove consumer mobile ARPU up 12%. Although going forward, we expect the consumer business to rely more on other growth levers, such as speed, upsell in broadband, as the largest ATL pricing opportunities in mobile are now exhausted for the near term. Then moving into Norway, where our 5G leadership continues, and we have now reached 95% of the Norwegian population, something that together with continued strong wholesale development underpins our growth momentum. Our network credentials also allowed us to deliver an EMN solution to missing people for improved communication during search and rescue missions. A great proof point of how important our services are for today's societies. Service revenues continued to grow, albeit slower, as continued good development on mobile was partly offset by 2% reduction on fixed and lower paper invoices feed due to new regulation. Wholesale growth remained strong, supported by our agreement with Fjordkraft as well as from other wholesale customers. EBITDA grew almost 6% despite the lower revenue growth and lack of energy tailwind. The mobile subscriber base remained flat, but as you can see, ARPU increased nicely, supported by the consumer segment that saw a 6% ARPU increase on the back of pricing and positive mix shift. Let's look into the Baltics. In Lithuania, service revenue growth remained steady at around 5%, with predominantly mobile contributing this quarter and flow-through of EBITDA picked up following good cost management. Estonia was weaker on service revenue following an analysed impact from pricing, while the new price changes that we have just announced are kicking in now in Q2. Despite this, EBITDA growth is of 6% was generated on the back on good cost management. My final stop before I hand over to Erik is TV and media, where service revenues, as expected, continue to be under pressure from a weak advertising market in Sweden. Revenue from TV, however, continued to develop positive, up by 5% in the quarter, supported by a growing subscriber base. EBITDA improved by 160 million as pressure on advertising was more than compensated by lower content cost and lower general expenditures, especially related to resources and marketing. In Q2, we have the final quarter of the current Champions League contract as well as the start of the UEFA European Championship, the latter of which will in core cost around 400 million, equally split between Q2 and Q3. Thereafter, we expect substantially lower content costs from Q4 and into 2025. Looking at the subscriber base, we saw an increase of 30,000 subscribers despite closing Seymour in Denmark. This was driven by non-sport packages, especially our HVOD services in both Sweden and Finland. Our digital transformation progressed well in the quarter, with strong digital consumptions, all-time high streaming volumes and all-time high total unique users. Digital advertising revenue grew double-digit. Furthermore, we saw a great result in the survey amongst Swedish youths, in which TV4Play climbed to the third place after beating streaming outlets such as YouTube. And with that, I hand over to Eric that will walk us through the Q1 financials. Thank you.