Telia Company AB (publ)

Welcome everyone to Thulea Company's Q1 2025 results presentation. I'll now hand it over to Thulea Company's Head of Investor Relations, Erik Strandenberg. Please go ahead, the floor is yours.

Thank you and good morning and welcome everyone to our Q1 call. We have President and CEO Patrik Hofbauer and Group CFO Erik Hagerman here and they will take us through the quarter and then we'll go straight to Q&A. Patrik, please go ahead.

Thank you Erik and good morning everyone. I would like to start as usual with some overall reflections about the quarter. We have had the first full quarter with our new organization and I'm happy to see that we could follow our commercial plans despite all recent changes and with a financial outcome close to our own expectations. We have also completed a major milestone in our strategic plan as we found the right buyer for our TV and media business and agreed to sell it to Shipstead Media. This will enable an even greater focus on our core business going forward and it will make us a more predictable telecom group. There is also plenty to report about sustainability this quarter and I want to highlight especially our climate transition plan published in March which has out our climate roadmap describing how we can achieve net zero by 2040. Our full year outlook is unchanged since the financial results in the first quarter were largely as we expected and if you go to the next page I will comment on them in some more details. Service revenue growth in the Q1 was close to 2% in line with our full year outlook as well as our mid-term ambitions. It improved a little from last quarter helped by Sweden in particular which grew 2% but also by the Baltic markets. Fixed service again grew a little faster than mobile. EBITDA growth was close to 7% this quarter with strong contribution from Sweden, Finland and Lithuania. This is slightly ahead of our full year growth rate target even though TVN Media is not included anymore since it has been moved to discontinued operations. If TVN Media had been included, which it was when we originally set our target, EBITDA growth would have been 11%. Cost efficiencies derived from the change program was of course a big driver behind the higher EBITDA. CAPEX, if you look at it on a rolling 12 months basis, it is now well within our frame of less than 14 billion per year and will remain there for the rest of the year. We are also on track when it comes to the free cash flow, which was 1.7 billion in the quarter, and we still target around 7.5 billion for the full year. And with both EBITDA and cash flow going in the right direction, our leverage is declining and now stands at 2.18 times EBITDA, despite that we paid a 2 billion dividend every quarter. Let's now move into the countries and starting with our biggest and home market, Sweden. Sweden has followed its commercial plan in the quarter, focusing on deepening in customer relationships, both with households and enterprises, based on a premium infrastructure position. We are proud to have won a network award with Omlaut again, this time indicating that our network in Sweden is a top five network globally. In the consumer segment, we have a lot of pricing activity. We communicated backbook pricing to many mobile, broadband and TV customers in January, effective in March, so we expect full pricing effects in Q2. TV continues to do well and helped overall consumer revenue growth to almost 2%, despite the continued drag from legacy copper. This drug is reducing however and we have now passed the milestone of having less than 100 000 active copper pairs left in Sweden. In enterprise you may remember that we had negative growth last quarter much due to those project and license revenues that tend to be lumpy. We said that we expect better trends in Q1 and indeed we are clearly back to growth again with 3.5%. Again, this is partly explained by projects and licensing revenue and it will naturally continue to go up and down from one quarter to the next. We expect these revenues to be lower again in Q2, but customer activity is good and unless the macroeconomic situation deteriorates, we have a promising pipeline for the second half of the full year. EBITDA growth was the strongest for many years at over 8%, with a good effect from the efficiencies we created through the change program. So now let's move east to Finland. In Finland, we continue to drive simplification across the businesses. Meanwhile, the new management is reworking the overall strategy, especially when it comes to our enterprise operations. It is clear that we today are not able to fully leverage on our capabilities, product portfolio and network position in this segment. Looking at the quarter, we can see that mobile ARPA is holding up relatively well, supported by growth in consumer, but we are still in decline when it comes to our postpaid subscriber base. This is a key focus area for us to turn around and we are gradually improving. But with that said, it will most likely be another few quarters before we have come all the way to a neutral development. Service revenue growth was minus 2%, largely due to lower fixed enterprise revenues and the fact that Finland this quarter reached the peak impact from the re-invoicing ramp down. This had a negative impact of around 50 million, so excluding this headwind, revenue would have been stable. There is also a continued overall negative macro, which reduces the ICT spend amongst Finnish corporate customers. However, despite the negative service revenue development, EBITDA increased by 5.6% due to the change program that reduced the total OPEX by more than 5% despite an increase in IT cost. Moving now west to Norway, which is currently undergoing extensive changes across multiple management levels, including Mårten Karlsson Sörby joining as interim head of Norway until Björn-Ivan Mohen comes on board as the permanent head in January next year at the latest. The team under Mårten is working hard to improve our trends, especially on fixed revenue and we have launched new cost initiatives. In the quarter we see that service revenue growth remained somewhat negative as mobile growth of 1% was more than offset by a decline for fixed service revenue. Two services that have seen negative development for some time now and that we dedicate a lot of focus to stabilize. EBITDA growth was also negative as a result of the top line reduction. In the coming quarters of 2025, EBITDA decline will worsen before it gets better because of the migration of the ICE wholesale contract. Turning now to Lithuania, which continue to deliver a solid service revenue growth supported by mobile growth of 7%. And as can be seen on the right hand side, it is driven both by a steadily growing subscriber base and an expanding ARPU. This is very comforting and a sign that we are executing very well on our commercial agenda. Looking at the fixed services, broadband grew 5% and TV grew 4%. We had a successful launch of Netflix in the quarter, which helped drive TV revenues and shows again that our aggregator strategy is working also outside of Sweden. EBITDA growth accelerated further to 10%, driven by service revenue growth and efficiencies from the change program. Combined with a more efficient capex level, this translates into a record high EBITDA minus capex. Moving then on to Estonia, that like Lithuania, showed a strong financial performance in Q1, supported by the change program and a solid development for our core products, mobile, TV and broadband, as well as an acceleration of revenues from public sector ICT contracts. Despite all the changes we have done recently under the change program, Telia Estonia received awards for both the best employer in the IT and telco sector and for having a handful of the very best sales agents in the country. Finally, I want to say a few words on Telia Towers that previously has been part of operations in Sweden, Finland and Norway, but from this quarter is disclosed as a separate unit. Telia Towers has done well since it was created this Pan Nordic platform together with Brookfield and Alekta. It managed over 8,000 sites with approximately half of the revenues coming from external customers and half from internal customers. The tenancy ratio is well above 2x. which is good level. Together with our partners, we have created an efficient business and EBITDA has grown over 25% over the past three years to a level of almost 1.5 billion SEK. And with that, I hand over to Erik that will take you through the financials for the quarter.