Telia Company AB (publ)

Welcome, everyone, to Telia Company's Q1 results presentation. And with that, I will now hand over to Telia Company's head in investor relations, Eric Strand and peers. Please go ahead. The floor is yours.

Thank you, and welcome, everyone, to the call this morning. We have in the room here President and CEO, Patrick Hofbauer, and the group CFO, Erik Hagerman. And I leave the word to you, Patrick. Please go ahead.

Thank you, Erik, and good morning to all of you. Our performance in 2025, including how we ended the year and started this year, confirms that we are on track to reshape TLE into a simpler, faster, and more efficient company, in line with our promises at the investor update back in September 2024. I'm glad to see that our mission to constantly improve and deliver on our promises is generating good results across many areas, including customer satisfaction, network stability, capital allocation, and operational excellence. This also becomes visible in our financials, with a whole market that continues to perform very well. And even though we have a lot of work still to be done in Finland and Norway, we see clear improvements on the back of the work performed to turn around those businesses. So we have made a lot of progress on reshaping Telia, but we are far from done. Therefore, we are working hard every day to make sure that we remain relevant to our customers and well positioned to deliver on our financial targets. Now moving to the highlights of the quarter. We have a good start to the year with improvements to our customer KPIs, most notably in Sweden, and growing share of converged customers and customer satisfaction increasing in most customer segments. This is driven both by improving customer service, where AI is becoming increasingly useful, and by great networks where we continue to stay in the lead as we launched 5G SA as the first operator in Norway and Estonia. Active portfolio management continues. We closed the Breban II acquisition, giving us a brand and a capability to compete in the value-for-money segment, and half a million customers based with limited overlap to the Telia brand. We also renewed our fiber partnership in Finland as we increased our stake in the number one Finnish fiber player, Valo Koitonen. But even more important was the run-sharing agreement with ICE in Norway, which will give us both a stronger network and better economics. We also remain focused on continuous simplification and cost discipline, even as our big change program is now behind us. And it is encouraging that we have reduced operational expenses by 2%, helped by 5% lower headcount versus Q1 last year. Finally, We made an update in March to our sustainability strategy, which now includes four new focus areas and related targets. And we were awarded most sustainable operator in Sweden for the 10th consecutive year by Sustainable Brand Index. Moving now to the financial highlights for Q1. Service revenue growth remained just above 2%, supported by consumer and high demand for business and mission critical services in Sweden. And Lithuania also continued to show solid performance. We also saw continued gradual improvement in Norway and better performance in Finland compared to Q4. EBITDA growth accelerated slightly, mainly driven by Finland and Norway, and with the mentioned cost reductions, the margin improved to 40% compared to 39% in Q1 last year. Continued investment discipline resulted in CapEx declining somewhat, ending at 12.6 billion on a rolling 12-month basis, comfortably below our full-year ambition of less than 13 billion. Free cash flow came out at 1.9 billion, which was stronger than we expected and predominantly due to better working capital contribution. And finally, our leverage remains low even after paying around 3 billion Swedish kronor for Breban II. Moving now to Sweden, that continued to perform well with growth of 4% in consumer, both as a result from pricing, including the first black book pricing increase ever in fellow, but also from growing customer base. And further support and growth was continued strong demand for business and mission-critical services. Our TV service continues to be the most appreciated. We signed two multi-year agreements with key content providers for product leadership also in the years to come. We also announced an agreement with Telia Seigert. Telia Seigert delivers sovereign AI services on top of the AI infrastructure that Brockfeld is planning to build in Sweden for approximately $10 billion. Customer satisfaction improved both in consumer and enterprise, and we continue our strategy to step-by-step move sales from external to internal channels. In the quarter, we opened three new stores, and we have more initiatives coming to further drive the shift to own channels, which we will be able to talk more about when we report our Q2 results in July. As you see to the right, Q1 was a strong quarter for our customer KPIs, and we continue to increase the share of converged customers, which is now at 59% compared to 57% one year ago. The 500,000 broadband and 30,000 mobile subscribers from Breban 2 add further economy of scale, and we continue on that topic on the next page. Which recaps the fact about this acquisition. After having had Breban 2 with us now for two months, we remain very positive about the potential for this highly complementary business and all targets are intact. The customer base have a very limited overlap and we are happy to see that we have already started to realize revenue synergies by selling additional Telia services to Breban 2 customers. Moving now to Finland, that's a more normal activity level in the consumer mobile market this quarter. We have led a gradual recovery of pricing underpinned by our leading customer satisfaction. The number of posted customers declined again, however, less so than in Q1 in the previous years. And we see improving dynamics in our customer base. We also increased our fiber JV ownership, and I will talk more on this on the next page. Financially, the performance Q1 was, as expected, much better compared to Q4, with B2B in particular performing better. We are, of course, not satisfied with being only marginally positive, so the strategic and commercial work to reposition and turn around the finished business is moving along at full speed. And we took further measures in the quarter to shrink the organization and make it simpler and more efficient. In Broban, net ads increased by 8,000 due to the acquisition of a similar number of customers from Global Connect. Now let me quickly go through the increased ownership in our Fiber JV. We are happy to have strengthened our participation in the growing fiber market, even as our previous partners have decided to exit. With a new partnership agreement with Brookfield, we have a partner we know well, and we have also stepped up slightly from 40% to 49% in the business. Valokutene was founded in 2020 as a joint venture between Telia and Capman. And it is the fiber to the home market leader with a reach of more than 400,000 homes through an open access model. The transaction reflects Telia's strategy to offer converged high-quality services to customers across Finland. And it's in line with Telia's partnership-based approach to long-term infrastructure investments. The deal is expected to be completed during Q2 with a price tag of around 30 million euros. Moving now to Norway, where we in early February announced RAN sharing agreement with ICE, a great project that I will say more about on the next page. Service revenue continued to trend in a positive direction and reached almost flat, despite the mobile wholesale revenue drag, which has now come to an end. The improvement was largely driven by pricing, which resulted in significant ARPA growth across our core services. However, we did lose 27,000 post-bred customers, mainly because we made both pricing and billing cycle changes in a short period of time. But we are now well behind these events and taking a broad range of measures to reduce churn going forward. EBITDA also improved but remained in negative territory, as we expected, impacted by high cost levels in marketing, M&A and energy. As said, we also launched a commercial 5G standalone across our network as the first operator in Norway. And we plan for an even better network ahead, which takes us to the next slide. We agreed in early February on an attractive RAN partnership with ICE, building Norway's most cost-efficient and future-proof mobile network. Network sharing is efficient, and this will create benefits for customers, the Norwegian society, and the network partners. Customers, even in the most remote areas, will have a choice between two nationwide networks, as we are building a network with quality and robustness on par with the incumbents. We will continue to operate independently with separate core networks, but we have a joint RAN infrastructure built on Telia's existing Ericsson network and will go live soon after the transaction is finalized. Over time, this will give us more competitive network position as well as significant cost and capex synergies. We aim to come back once the deal is finalized with further details on the financial impact. Moving on to Lithuania. Lithuania. where NPS continued to increase and Tele was awarded best customer service in a survey among Lithuanian consumer connectivity customers. We also took the first step in building a new data center near Vilnius in response to strong local demand. It is based on a hybrid model combining services from global cloud leaders with on-premise storage of strategically critical data. Service revenue growth accelerated slightly, supported by mobile and fixed, that both grew around 8%. EBITDA, however, normalized compared to a record-strong 2035 that was supported by the change program. In Q1, Lithuania also saw higher energy and marketing costs, as well as increased level of internal cost allocation for Lithuania and Estonia. Customer KPA trends remain intact with expanding mobile customer base and ARPA growth across all products on the back of pricing. Moving to Estonia, that by launching full 5G standalone further strengthened TLS position as the clear network and 5G leader. Our core connectivity business performed well with a growth of 4%. However, Overall service revenue growth slowed down because of lower ICT deliveries due to supply chain limitations. We expect we'll be less of a burden as we move across the rest of the year. EBITDA growth, however, remained positive despite somewhat higher energy costs. And with that, I hand over to Erik before I come back to summarize the quarter.