Telia Company AB (publ)

Welcome, everyone, to the TVA Company's Q4 all-year 2024 results presentation. And with that, I will now hand over to TVA Company's Head of Investors Relations, Eric Chandon-Pierres. Please go ahead. The floor is yours.

Hi everyone, welcome to our Q4 call. We will do the usual exercise with the management presentation followed by a Q&A session and we have our President and CEO Patrik Hofbauer and our CFO Erik Hagerman with us here today. I leave the word to Patrik, please go ahead.

Thank you, Erik, and hello and good morning, everyone. Before we go into the details of the quarter, I would like to start, as usual, with a few overall reflections. In September, we held an investor update where we laid out the direction for the next three years and described our change program, which is making Telia more customer focused, faster and more efficient operator, taking then also decisions closer to our customers. I'm glad that we managed to get the new operating model in place as planned December 1st and starting to realize the financial benefits of at least 2.6 billion. I believe we did this without losing focus on our customers and our business and the results for the quarter were close to our expectations and in line with what we have described in connection with the Q2 and Q3 results. I will talk more about them in the following pages. Finally, I'm also glad to see that we deliver on all 2024 outlook metrics. Our service revenue we guided for low single digit growth and ended at 1.8% plus. For EBITDA growth, we upgraded the last quarter to mid single digit and we did plus 4.3%. Booked capex ended at 13.5 billion, comfortably below the Q3 upgrade of below 14 billion. And finally, our structural cash flow ended in the middle of the 7 to 8 billion range. So all in all, good results. But like in sports, your performance is only as good as your last game. So now our focus is to delivering on the 2025 outlook, including the free cash flow of around 8 billion. Moving now into the Q4 highlights. As we said in Q3, service revenue growth in Q4 was expected to be somewhat below our mid-term ambitions of around 2%, and we came in at 1.5% plus. As a reminder, one of the reasons for this is the timing of price changes in the Nordic markets, while growth in Lithuania and Latvia accelerated. Consumer remained solid with a growth of 1.9%, and the enterprise segment also grew slightly, helped by contribution from the Norlys TSA and a good performance in the Baltics. Mobile revenues continue to grow, although less than in Q3. This mainly is due to Sweden being negative this quarter, which I will elaborate more on later. Fixed growth accelerated sequentially to plus 1.8% from continued strong T-momentum in Sweden. And since a negative growth trend for business solution last quarter turned positive. We said last quarter that we expected EBITDA growth to pick up Q4, which it did, ending at plus 5.8%, and supported by all telco units except for Norway that had a tough cost comparison. TV and media increased by around 220 million due to mainly lower content cost. Our structural OFCF was at 2.3 billion and for the full year we ended at 7.5 billion right in the middle of our 7 to 8 billion guidance range. And finally, the board proposed for 2024 an unchanged dividend of 2 kronor per share to the upcoming AGM in April. Let's now move into the units starting with Sweden. As can be seen to the left, service revenue growth slowed to 0.5% as growth in consumer broadband and TV was partly offset by a 5% decline in enterprise mobile. Lower revenue in enterprise mobile came to a large extent from a technology shift in a couple of large IoT and A2P messaging customers. But we expect to be back to flat or even growth already in Q1 in that segment, on the back of a few deals won recently. Looking at consumer mobile, we have announced new pricing, which will also have a positive impact from Q1. The decline in legacy copper revenue remained around 130 million, and excluding this growth was at 2.3%, a slight slowdown from the reasons I just mentioned. EBITDA growth ended somewhat below 2%, supported by the service revenue growth and cost reductions mainly related to resources. So now let's move into the operational KPIs of Sweden. On mobile, we said last quarter that we would port out 30,000 low ARP mobile-only enterprise customers, which we decided not to defend at unhealthy price levels. And we came in at minus 27,000 in total. ARP declined 2 kronor to SEC, or less than 1% versus Q4 last year. But as I said, pricing has been announced, and we expect to see an improvement going forward. We stay focused on providing our customers with world-class digital infrastructure, and this was confirmed again by Omlaut's yearly network test, where Telia Sweden came out as the winner and also as a top 5G net in the world. Our broadband subscriber base continued to show steady growth, this quarter by 4,000, as growth in fiber more than compensated for the continued decline in copper subscribers. TV continued to outperform with a record net intake of 38,000 subscribers and an ARP increase of 12%. We saw strong demand both for basic TV packages and for the streaming services. And we added Disney Plus to the platform this quarter. Potentially we got some tailwind from a competitor closing its legacy IT TV services. Our TV service is an important way to deepen relationship with the Swedish households customers and we spoke about that on Investor Day. It has been growing and gaining shares for several years and I'd like to take a few moments to explain why. So the simple explanation is that Swedes really like our product. It has come out on top of the SKI customer satisfaction survey in nine of the ten last years. We distribute by far the broadest content based on a unique lineup of strategic content partnerships with all leading streaming providers. As you can see here, including a great relationship with Netflix. We are a one-stop shop aggregator, where customers buy these services directly from us, combined with linear TV channels. These are unique deals that appeal to a wide audience and offer great value for money. And for content partners, we offer access to a large amount of customers. As a result, the subscriber base is up 40% in five years, and we have grown ARPU from 180 kronor to 245. This has resulted in one billion growth in TV revenues over these years. But more importantly, the TV service is a key component of our converged household strategy. Customers who have TV, in addition to connectivity, are more satisfied and have significantly lower churn than those who don't. And the attachment rates between the two services is high and growing. Now moving on to Finland. where I actually would like to start by saying welcome to our new head of Finland, Holger, who has done a great job in leading Telia Estonia and now will take Telia Finland through to the next level. Looking at Q4, Finland was rather neutral on service revenue, with mobile growth of 1.2%, was offset by fixed revenue decline of minus 2.3%. Fixed revenue decline due to continued pressure on legacy revenue, regulatory changes and the ramp down of our non-core e-invoicing business. Together these items had a negative impact of around 100 million SEK, but from Q1 we expect the impact to be much less as mainly the headwind from regulation will be gone. Despite the flat service revenue development, EBITDA growth accelerated to 7.4% from the change program and lower bonus levels versus last year and also lower energy costs. The mobile subscriber base declined by almost 20,000, driven mainly by the loss of 14,000 mobile broadband subscriptions in the consumer segment. Looking instead at the mobile handset segment, the long-running subscriber loss that we have seen in Finland continued to diminish. In addition, We continue to focus on value and ARPA rather than volume. An ARPA increase of 4% supported mainly by consumer, but this quarter also enterprise ARPA was somewhat positive. Moving west to Norway. where service revenues were somewhat negative as mobile growth of 1.3% was offset by lower fixed revenues. Some of our trends in Norway are unsatisfactory and we have a set of initiatives to improve in the course of the year. In mobile, the trend is stable, but we have announced several price changes which will take effect in Q1. Within fixed, we are offering more fiber upgrades to MDUs. And as we discussed at the investor day, a new service portfolio and CPS are in the pipeline. We are also doing several changes in sales channels, both in field sales and support systems. Our partner business develops well, and we signed two new small fixed partners in the quarter, Albeit Small, and they amended on the partnership with Chile Mobile, which already was operating on our award-winning mobile network. EBITDA declined 3.6%, partly due to lower service revenue, but mainly driven by the 70 million kronor positive impact to OPEX last year from the one-off settlement of a pension scheme. Excluding this, EBITDA would have been slightly positive. And if you look at the KPI trends in Norway, so there are no big shifts, I'll continue to the Baltics. Lithuania saw service revenue growth accelerated to 6.6% from a continued solid development for mobile and a significant improvement in fixed, where B2B in particular scored several new customer wins. The solid service revenue development was the main reason for EBITDA growth being close to double-digit. In Estonia, growth remained just above 1%. A large public sector contract was resigned earlier this year and started to contribute again at the end of the quarter with full run rate again from Q1. Cost control has been strong and despite limited service revenue growth, EBITDA grew 7%. Moving then from Telco over to our media. TV and media that was neutral on service revenues as a continued strong development for streaming supported by an expanding subscriber base. The effects of the customer base of the exit from Champions League were actually milder than we expected. Streaming revenue growth was offset by pressure on advertising revenues, with linear viewing in Sweden continued to trend down. However, this is mostly compensated by digital advertising, which grew 15% in Sweden. EBITDA increased by around 200 million due to lower content-related costs, of which the key driver of course was the USCL cost. Finally, we gained 45,000 new customers in the quarter and 85,000 compared to a year ago. ARPA remained almost flat compared to last year, which is a good achievement considering the increased share of HWOD subscribers in the base. And with that, I have a hand over to Erik that will take you through the Q4 financials.