Telia Company AB (publ)

to 2025 results presentation. And with that, I'll now hand over to Telia Company's Head of Investor Relations, Eric Strandenpers. Please go ahead, the floor is yours.

Thank you, Michael. Welcome, everyone, to the call on this busy morning. We have a presentation ahead of us. We have Patrick Hofbauer, our CEO, and Erik Hagerman, our CFO, to present the results. And after that, we'll go to Q&A, and we'll try this time to make sure everyone has a chance to ask questions. So we'll do two questions each this time, please. But before that, we have lots to present. So, Patrick, please go ahead.

Thank you Erik and good morning everyone. Let me go through what I believe was a very eventful quarter that shows that we are on the right track with our strategic agenda. I'm glad to see that the new organization is delivering efficiencies according to plan and that we continue to execute well on our ambitions to strengthen our core and make Telia more robust. Financially and as a group, we continue to track according to our overall plan, even though the picture is a bit mixed with an EBITDA overperformance in Sweden and Finland, but somewhat weaker development in Norway. As I said, it was an eventful quarter and our M&A team has been working around the clock. Firstly, to close the TV and media transaction. Secondly, for the signing of the memorandum of understanding with our partner in Latvia that will see us fully exit from Latvia in 2026. And thirdly, you saw today a public tender for all outstanding shares of Breban 2, which will strengthen our consumer business in Sweden. Innovation also remains a key strategic priority and we are proud to have extended the North Star Innovation Program by welcoming the Swedish Armed Forces aboard. We are excited to work with them and our other partners to make sure that Sweden stays in the frontline when it comes to secure communication and advanced 5G applications. And finally, we keep the full year outlook unchanged since first half financials for the group are largely as expected. On the next page, I will comment on the financial highlights. Service revenues growth was strong in Sweden and the Baltics, which was partly offset by the expected slowdown in Norway, meaning that overall growth was somewhat below the full year ambition. EBITDA growth of 6.2% was not that different versus Q1, and this was slightly ahead of our own expectations, but we still foresee a somewhat softer Q3 before it picks up again in Q4. CapEx spend remained well within our frame of less than 14 billion per year and free cash flow of 2.3 billion SEK was strong, following positive developments on several line items, including a dividend from TET in Latvia late in the quarter. This cash flow together with the growth in EBITDA and proceeds from the Marshall investment meant that our balance sheet continued to improve and the leverage is now at 2.09x. Moving then to Sweden that continued to track that commercial plan well, leveraging on its premium infrastructure position, improving customer satisfaction and further expanding the North Star innovation program. Our net mobile subscriber intake this quarter was the best for over five years, driven by consumer customer. And we launched a new mobile consumer portfolio with improved streaming bundling. Meanwhile, the TV continued to perform strongly, which was the main reason behind the consumer segment growing 2.3%. Enterprise also had a good quarter despite the poor macroeconomic growth, with strong demand for advanced connectivity, ICT and security services. Part of the growth also came from project and licensing revenue, which will fluctuate from one quarter to the next. EBITDA growth remained strong at around 8%, supported by profitable growth and continued tailwind from the change program. One important reason why we are doing well in Sweden is our focus on the overall household. And I would like to talk about the development of convergence on the next slide. We've had a long-term focus to slowly but surely drive increased convergence in the consumer base and to do this without providing much monetary discounts. The share of the convergent customer is growing steadily about 2 percentage points per year and we are now at the level of 57%. In the second graph, you can see that their average revenue per household grows by more than 5% per year and now exceeds 600 SEK. Churn is also drastically reduced for converged customers. And somewhat simplified, you can see that household churn decreased by about half for each extra service added. To drive convergence, we naturally leverage our award-winning networks. And as you can see, we are now at an unlimited share of 65%. So why is this important? When you get a critical mass on unlimited, you can start to look at the customer base the same way as you do with a fixed base, with simpler and more recurring pricing cycles, with annual and predictable price increases as you have had in the fixed business. Let me now comment briefly on why we have announced the tender to offer all the shares in Breban II. As I said, we have placed a bid for all outstanding shares of Brebant 2. The bid is recommended by its board and supported by its top five shareholders, representing over 50% of Brebant 2 shares. It is a transaction for around 3 billion SEK in enterprise value, which requires over 90% acceptance, as well as local competition clearance. This is a very complementary asset to Telia operating in a segment where we are hardly present today since we lack the tools to compete effectively in the value segment of the fixed broadband market without premium brand. In addition, Breban 2 operates in open networks where our market share is very low. We have a solid case for synergies amounting to over 200 million within three years and with more potential after that. This transaction profile meets our requirement on executing risk and returns on capital employed. So let's now leave Sweden and go to Finland. In Finland, we saw flat service revenue development as we continue to trim our portfolio to drive simplification. The mobile consumer trends are mostly healthy with a continued increase in gross customer intake and ARPA growth of 4%. In broadband, the number of consumer fiber customers also continue to grow. In Enterprise, we ported out 35,000 subscriptions related to one large public contract lost more than a year ago, which explains the negative net debts in the chart and the reported churn increase this quarter. Ongoing simplification of the business as we shut down non-core activities and the strong execution of the change program resulted in EBITDA growth of 10%. It can be noted that without the ramp down of the e-invoicing business, service revenue growth would also have been slightly positive. At this time, I would like to comment on what we are doing to improve our business in Finland going forward. At the investor update in September last year, we laid out the ambition of Finland getting back to growth with improved profitability. And with Holger now in place, that work is now moving into a new phase. We set out ambitions to stabilize our mobile market share, to strengthen the SME business and to improve profitability. After the first three quarters, we are making progress on profitability and simplification as we saw on the previous slide. We have increased the customer intake in both SME and mobile consumer and the fiber market remains healthy. Meanwhile, there have been strong headwinds in enterprise and the macroeconomic growth remains low, so we have much more work to do. Still, we believe that we are on the right track. Product portfolio simplification and the profitability focus will continue. The efficiencies we have created in the central parts of the organization have enabled deployment of selected new customer-facing headcounts into our sales organization, and this is giving visible results. We also have new 5G capabilities that our enterprise customers are keen to explore and have already sold well over 10 private networks with more to come. And we will continue to invest in a healthy fiber market where value is being created. And we see that all of this moves us towards the target we set out last September, moving now west to Norway. which as expected had challenging quarter with both service revenue and EBITDA trending down due to lower mobile wholesale revenue and headwinds in broadband and TV. The challenges in fixed can be seen in the KPIs that were also impacted by the black screen with TV2, which lasted until the end of the quarter when a new multi-year agreement was signed. This development does not come as a surprise, and next quarter you will see that the headwind will become worse before they start to get better, as we have said before. Let's not forget that we have a strong brand portfolio and growing mobile end-user service revenue in Norway, but I know you all want to know how we plan to turn the current trends around, so let's go to the next page. In fact, when it comes to Norway, I'm a lot more confident about our way forward than I was six months ago. We know what we need to do and how to sort out the fixed business. Some of it we can share now and some in the future quarters. Our plan remains to continue to grow with best-in-class profitability. Obviously, we lost the wholesale contract and we have headwinds in fixed with a black screen situation on top of them. But we have now completed a string of important management recruitments, sorted out the black screen situation in a good way, and we have launched a new organization this quarter where we have separate division to focus on the fixed consumer business. Our back-to-growth plan in fixed includes having a focused team, upgrading Coax customers to fiber, replacing a fragmented customer equipment landscape with upgraded and standardized CPEs, and to grow outside our network using fixed wireless access and open networks. Our foundation for this work has been laid as fixed network quality has already improved dramatically and well within our group CapEx targets. Like in Finland, we have an exciting opportunity to grow in advanced 5G services as well as within Saiget ICT portfolio. Our brand portfolio is strong and there is plenty of potential in security services for both consumers and enterprises. And in tandem with the commercial activities, we continue to pursue additional cost opportunities. Turning now east and starting with Lithuania. Lithuania goes from strength to strength financially after delivering another quarter of very healthy service revenues growth supported by both mobile and fixed. New tools for smart personalized pricing have enabled ARPA growth as you see on this slide. Without adverse effects in churn or dissatisfaction. Innovation is also happening together with customers and this quarter we initiated testing of the first standalone 5G ESE installation in the port of Klaipeda. Together with additional efficiencies generated this all resulted in EBITDA growth of 11% and EBITDA minus capex that remained at record high level of SEK 1.6 billion. Moving on to Estonia, which signed an agreement to acquire its long-term IT partner Igloo this quarter, a small but creative transaction that also strengthened Telia, Estonia's ICT proposition in the large enterprise segment. On the financials, development was steady with both service revenue and EBITDA growth going by 3-4%, as you can see with good cash flow conversion. And with that, I hand over to Erik before I come back and summarize the quarter at the end.