Continued operational momentum
Second quarter summary

-         Revenue increased 2.3% to SEK 22,380 million (21,877) and like for like, revenue increased 1.5%.

-         Service revenue increased 3.3% to SEK 19,403 million (18,787) and like for like, service revenue increased 2.5%. For the Telco operations, service revenue increased 2.6% on a like for like basis.

-         Adjusted EBITDA increased 6.4% to SEK 7,856 million (7,387) and like for like, adjusted EBITDA increased 5.3%. For the Telco operations, adjusted EBITDA increased 4.1% on a like for like basis.

-         Operating income increased to SEK 2,942 million (2,095).

-         Total net income increased to SEK 4,851 million (917) and total EPS increased to 1.19 SEK (0.19) mainly due to a SEK 3,261 million capital gain from divesting the operations and network assets in Denmark.

-         Operational free cash flow improved to SEK 2,760 million (-74) and the structural part of Operational free cash flow improved to SEK 1,652 million (651).

-         The leverage ratio was 2.21x at the end of the quarter compared to 2.43x in the previous quarter.

-         A dividend of SEK 0.50 per share was paid to shareholders on April 17.

-         The outlook for 2024 is unchanged.

-         On 2 April, the disposal of the operations and network assets in Denmark to Norlys was finalized. See Note 13.

First half year summary

-         Revenue increased 0.2% to SEK 43,654 million (43,575) and like for like, revenue increased 0.1%.

-         Service revenue increased 2.4% to SEK 38,037 million (37,146) and like for like, service revenue increased 2.4%. For the Telco operations, service revenue increased 2.6% on a like for like basis.

-         Adjusted EBITDA increased 4.9% to SEK 15,001 million (14,298) and like for like, adjusted EBITDA increased 5.0%. For the Telco operations, adjusted EBITDA increased 3.1% on a like for like basis.

-         Total net income increased to SEK 5,608 million (1,655) and total EPS increased to 1.34 SEK (0.35) mainly due to the capital gain from the divestment of the operations and network assets in Denmark.

-         Operational free cash flow improved to SEK 1,981 million (-3,694) and the structural part of Operational free cash flow increased to SEK 2,065 million (1,265).

CEO comment
 

"Revenue momentum in our telco operations continued in the second quarter, and customer satisfaction improved further. TV and Media returned to revenue growth and positive EBITDA. Overall, the second quarter was in line with our expectations, with service revenue growth of 2.5% and EBITDA growth of 5.3%.

Commercial progress

Service revenue in Telia Sweden grew 2.5%, which is satisfactory considering the copper-related revenue decline, and excluding this, growth would have been 4.3%. As in Q1, Consumer remains the engine of growth, and TV is still the star performer with service revenue up 24%. We continue to build product strength in TV by being the first Swedish operator to include Amazon Prime in our distribution. Broadband also grew, albeit more modestly at 3.4%, driven by higher ARPU, and in June we increased speeds across our Telia-branded portfolio alongside a moderate price increase. Mobile revenue continued to be stable. Within Enterprise, revenue is stable after a period of strong growth in larger customer projects.
 

In Finland, growth was less satisfactory as the business faces headwinds from legacy services, and since we are phasing out low-margin, non-core services to simplify our business. While the Mobile consumer business is healthy with 8% increase in ARPU, good customer satisfaction and low churn, subscriber growth remains negative. To mitigate this, we are selectively adding sales capacity with new store openings and inhouse sales resources, being cautiously encouraged by the early results.
 

In Norway, momentum is slowing somewhat after a strong development over the past 12 months. Mobile growth was mostly offset by decline in fixed revenue. To counter this, we are building further attractiveness in our TV product, now with both Amazon Prime and Premier League from Viaplay. We are also evaluating the need for targeted investments in the fixed infrastructure to strengthen reliability, speed and cater for future customer demands.
 

Lithuania continues to deliver mid-single digit service revenue growth, driven mainly by mobile and fiber broadband. Customer satisfaction remains at high and stable levels across all product segments, and our customer service was ranked best among telcos this quarter in a survey by Quality Shopper.
 

In Estonia, revenue growth improved slightly supported by mobile, broadband and TV. 5G population coverage increased to above 80%, leading the market. We are proud to again have been named one of the top companies supporting national security for 2024 by the Ministry of Defense.
 

In TV and Media there are many positive developments to report. Advertising revenue grew in both Sweden and Finland, and our new HVOD offerings from TV4 and MTV attracts new customers and produce revenue growth. Despite temporarily higher content costs during the summer, EBITDA clearly improved, supported by the cost restructuring executed over the past 12 months.
 

Sustainability progress follows our plan. 57% of our supply chain emissions are now covered by approved SBTi targets, and we have expanded device recycling this quarter to also cover smartwatches and computers. Our role in keeping society safe and resilient has grown, with public bodies and defense forces across our footprint stepping up their engagements with Telia. As provider of trusted communications on secure infrastructure, we expect our role, and corresponding revenue, to increase further in the years to come.
 

Financial development

Telia's overall growth in service revenue was 2.5% and EBITDA growth was 5.3%. Our Telco business delivered a consistent 2.6% service revenue growth, with EBITDA growth improving to 4.1%. Excluding a time shift in pension refund in Sweden, Telco EBITDA growth was 2.8%. As mentioned above, TV and Media also contributed positively to EBITDA growth.
 

Cash flow met our expectations, and our balance sheet strengthened following the closing of the sale of Telia Denmark in April, despite paying our recurring quarterly dividend of SEK 0.50 per share. Net debt to EBITDA improved to 2.21x, well within our 2.0-2.5x target range.

Looking ahead

Our full-year financial outlook is unchanged following a first half which has developed largely according to our expectations. In the third quarter, we estimate that EBITDA will be approximately unchanged on a like for like basis, having had a strong third quarter last year. In the fourth quarter, on the other hand, we expect an above-trend EBITDA growth, and hence, our current full-year forecast is broadly in line with recent market expectations.
 

The analysis of our business and the work on our mid-term plan, which I wrote about when we reported our first quarter in April, has continued. We still see a need to improve operational efficiency and execution speed, and we see opportunities to do so through simplification and streamlining of the business. I look forward to sharing more about our plans for Telia at our capital markets update in September, and in the meantime, I would like to thank our employees for their work, all our stakeholders for their support during my first half year as CEO, and I wish everyone an enjoyable summer."

Patrik Hofbauer

President & CEO

In CEO comment, all growth rates disclosed are based on the "like for like" definition and EBITDA refers to adjusted EBITDA, unless otherwise stated. See definitions for more information.

This information is information that Telia Company AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the contact person set out below, at 07.00 CET on July 18, 2024.

Notes to editors

For more information, contact Roija Rafii, Telia Company's press office on +46 (0)771 77 58 30, visit our newsroom (https://www.teliacompany.com/en/newsroom) and follow us on LinkedIn (https://www.linkedin.com/company/teliacompany) and X (https://twitter.com/i/flow/login?redirect_after_login=%2FTeliacompany). To download our logo, high-resolution images of Telia leaders, offices and solutions or B-roll footage for editorial use, visit our media bank (https://www.teliacompany.com/en/category/media-bank).
About Telia

Telia Company (STO: TELIA) is a Nordic and Baltic telecommunications leader and Nordic media house, serving consumers, businesses and public sector customers with essential digital infrastructure, ICT services and entertainment.Our 18,000 talented colleagues serve millions of customers every day in one of the world's most connected regions. We're the hub in the digital ecosystem, providing 25 million mobile, broadband and TV subscriptions that empower people, companies and societies to stay in touch with everything that matters 24/7/365. Learn more atwww.teliacompany.com

Forward-Looking Statements
Statements made in the press release relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Telia Company.