[PPT] - JANUARY december 2019 Q4 Year-end REPORT CHRISTIAN LUIGA PowerPoint Presentation

SLIDE 1

CHRISTIAN LUIGA

president & CEO

Douglas lubbe

CFO

Year-end REPORT JANUARY – december 2019 Q4

SLIDE 2

CASH FLOW AND EBITDA GROWTH FROM LOWER COST

OPERAT ATIO IONAL FR AL FREE C CAS ASH H FLO FLOW SWEDEN OPEX REDUCTION GROUP ROUP OP OPEX RE REDUC UCTION ON 4% Q1 19 Q2 19 Q3 19 Q4 19

12.6BN*

EBIT BITDA DE DA DEVELO LOPME MENT

~2%

Q1 Q2 Q3 Q4

12-12.5BN

✔ ✔ ✔

We said We did

~2%

We said We did

~3%

We said We did We said We did

~4%*

* 3% adjusted for pension refund Q4✔ 2 * SEK12.2bn adjusted for Q4 pension refund

SLIDE 3 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Service revenue growth Growth excl. Telia Carrier

1.7%
1.5%
0.6%

IMPROVED SERVICE REVENUE AND EBITDA TRENDS

Improved revenue trend excluding fiber OTC
Telia Carrier still weights slightly on group

SER ERVICE E REV EVEN ENUE D E DEV EVEL ELOPMEN ENT* Organic & like for like growth, external service revenues * 2018 based on organic growth (stable FX and M&A excluded) 2019 based on like for like growth (Stable FX and M&A included in current & corresponding period) Not including the segment TV and Media established in Q4 2019 6,680 7,413 7,465 8,226 7,914 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Reported EBITDA Organic/like for like EBITDA growth

Mainly driven by OPEX and COGS reductions
Easy comparison and SEK 100 million pension

refund in Sweden – despite this EBITDA is still growing Y/Y and Q/Q

Adj Adjusted E d EBIT BITDA DA DE DEVELO LOPME MENT* SEK million in reported currency, organic & like for like growth excl. IFRS 16 +4% 0% Growth excl. Telia Carrier & Sweden fiber OTC Q4 2019 3

SLIDE 4

NEW AND UNIQUE PLAYER IN THE NORDIC MEDIA SPACE

4

Synergies of SEK 0.6 billion by end 2022 Operational free cash flow

f SEK 0.5 billion 2020

SLIDE 5

PROVIDING HIGH QUALITY CONTENT FOR EVERYBODY

In accordance with our commitments to the EC

we will negotiate OTT distribution rights with at least one other player in each market

Commit mmitted t d to r reac ach h an and av d availabilit ailability Ott r rig ight hts treat ated in d in lin line wit ith c h commit mmitme ments

Despite being offered to distribute at a zero cost in

December, Com Hem stopped giving its customers right to view TV4 and C More on their TV screens

We continued to provide TV4 and C More content

through other platforms for all users in Sweden

Continued focus

n market leading

reach Content availability for all guaranteed

5

SLIDE 6

2019 WAS A RECORD YEAR FOR TV & MEDIA

8.2 8.7 1.2 1.5 2018 2019 2020e 2018 2019 2020e Net sales EBITDA Net sale ales & & E EBIT BITDA ( DA (2020 illu illustrat ativ ive) SEK billion in reported currency, external net sales & adjusted EBITDA * PUT=People Using TV, CSOV=Commercial Share Of Viewing KEY EY OPER ERATIONAL H HIGH GHLIGH GHTS 2019 2019

EBITDA growth from strong service revenues, despite

the conflict at year-end

Decline in PUT* and implications of the Com Hem

dispute will imply some pressure on 2020

Co Cont ntinu nued Succe ccessful co cont ntent nt str trate tegy

Leading CSOV* position maintained
Strong sales execution in ad space
PUT* down 8% FY 2019 and 10% Dec 2019**

Mar Market imp improved albe d albeit it still ill ch challeng nging ng

Growing in a continuously challenging market
Leading CSOV market position maintained

Sig ignific ifican ant g growt wth h in in s subs bscrip iptio ions

More than 30% OTT subscriber growth due to

domestic drama content and added sport rights

Gradual NPS improvement

6 * In the target group A15-64 year olds

SLIDE 7

Sweden B2C mobile back to growth

Postpaid aid ar arpu - B2C Postpaid ARPU B2C excluding VAS Mobile Subscr cription r n revenu nues - b2c Like for like growth

ARPU growth due to rise in subscription fees
Top-ups headwind faded, pressure from IDD*

remained

Q4 18 Other Subscription fees IDD* Q4 19 Top-ups +2%

+4%

Mobile subscription revenues back into positive

due to increase in postpaid subscriptions and ARPU growth

Stable churn despite price adjustments

* EU international direct dialing regulation, introduced May 2019 2.0%

3%
2%
1%

0% 1% 2% 3% Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 7

SLIDE 8

1.3%

Improved B2b 2019 vs 2018

B2B 2B ser ervice e rev even enue GR e GROWTH – group roup/S /Sweden Organic growth 2018 & like for like growth 2019 * Q2 2019 positively impacted by one-off like revenues in Sweden

Ict/IOT revenues up 20% 2019 vs. 2018

8 IC ICT AN AND D IO IOT IN INCREAS ASIN INGLY LY COMP MPENSAT ATIN ING LE LEGAC ACY

Finland b2b +1% q4 due to ict growth

2.1%

Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19* Q3 19 Q4 19 FY19 -1.2% FY18 -2.3%

SLIDE 9

FULL YEAR 2019 OPEX TARGET REALIZED

OPEX EX d dev evel elopmen ent External expenses, like for like, including an estimated 2% cost inflation

5%
2%
6%
4%
2%

0% 2% Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Full year 2019

OPEX Q4 down 5 percent largely driven by Sweden
Sweden, CPS and Denmark main contributors full year
Full year target of around -2% on group OPEX realized
Continued cost take-out expected 2020

2020 2020 key ey ef efficien ency driver ers

Efficiency gains in New operating model –

pooling effects and synergies

Further synergy realization from Get as well as

TV & Media

New ways of working, such as Shared service

center in Lithuania

* CPS = Common Products and Services 9

1,700

FROM COUNTRIES

3,300

RESOURSES IN CPS now

MOVED TO

NOK 220 million run-rAte NOK 350 MILLION END 2022 300 RESOURCES END 2018 500 RESOURCES END 2019

SLIDE 10

PROPOSING A 3.8 PERCENT DIVIDEND INCREASE

2.00 2.30 2.36 2.45

2016 2017 2019 (proposed) 2018 +3.8%

PROPOSED DIVIDEND EQUALS AN AMOUNT OF SEK 10.0 BILLION VS. SEK 9.8 billion 2018

2016 11.7 2017 2019 12.4 2018 12.5 7.5 Dividend from associated companies Operational free cash flow (2019 adjusted for pension*)

115% 80% 84% 80%

Div Divide idend bas d base an and p d pay ay-out

ut ra

ratios

s

SEK billion and pay-out ratios * Adjusted for SEK 0.4 billion pension refund in Q4 2019 10 SEK 12.9 billion reported 2019 SEK 12.5 billion adjusted for pension refund* 0.4 12.2*

SLIDE 11

CMD 2019 MESSAGE UPDATE

PUSH FOR EFFICIENCY EXECUTION OF M&A WISE INVESTMENtS USING OUR SCALE BEST IN CLASS CASH MANAGEMENT FIGHT FOR GROWTH

Convergence
Smart pricing
Telia global
Structural reductions
Cost smartness
Net OPEX reduction
f 2 percent 2019-21
Get/TDC NOK 800

million

Bonnier Broadcasting

SEK 600 million

CAPEX coming

down further

SEK 2.4 billion

remaining in working capital efficiencies Convergence capabilities enhanced - ready for next step 2019 ambition realized & 2020- 2021 ambitions unchanged Norway cost synergies realized – revenue synergies up next Increased CAPEX ambitions from customer driven demand, mobile in FInland & Get in NOrway Well in reach of the SEK 6bn ambition – will be above SEK 6bn end 2020 11

CMD 2019 message Current status

SLIDE 12

By 2022 we will

STAKING OUT OUR ROAD TO ZERO

100 percent renewable electricity use
5 percent lower energy consumption per subscription equivalent (baseline 2018)
Climate neutral within our own operations (energy and business travel)
Engage with all suppliers to have a plan in place by 2022 to reach Zero CO2 by 2030,

including their suppliers

Significantly increase reuse of network and B2C/B2B equipment
Comprehensive green offerings in all markets
Include sustainability in incentives and performance evaluation

12

DARING GOALS 2030

SLIDE 13

OUTLOOK FOR 2020

SEK 10.5-11.5 BILLION

OPERATIONAL FCF*

TO GROW BETWEEN 2-5% COMPARED TO 2019

ADJUSTED EBITDA*

13 * Based on the Group structure at year-end 2019 (i.e. including the segment TV and Media established in December 2019). Adjusted EBITDA in stable FX

SLIDE 14

Douglas lubbe

CFO

Year-end REPORT JANUARY – december 2019 Q4

SLIDE 15

EBITDA GROWTH DESPITE REVENUE PRESSURE

Sweden down due to PSTN and fiber OTC
Pressure on PSTN in Finland and interconnect
Norway decline related to B2C mobile

Other SWE Q4 18 FIN NOR DEN LIT EST LAT Telia Carrier Q4 2019

1.7%

FIN NOR DEN Q4 2019 EST Q4 18 LAT Telia Carrier SWE LIT Other +4%

Strong Sweden due to lower OPEX
Norway impacted by one-off items
Revenue mix and lack of efficiencies in Finland

SER ERVICE E REV EVEN ENUE D E DEV EVEL ELOPMEN ENT Like for like growth, external service revenues EBIT BITDA DE DA DEVELO LOPME MENT Like for like growth, excluding adjustment items and IFRS 16 15

SLIDE 16

Growth in b2c excluding fiber otc

Significant impact on B2C from lower fiber OTC
Excl. fiber OTC B2C grew due to strong mobile

and fixed broadband

B2B down from deterioration in mobile revenues

B2B B2C

SER ERVICE E REV EVEN ENUE D E DEV EVEL ELOPMEN ENT Reported currency, external service revenues Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 B2C excl. fiber OTC B2B B2C +1.3%

2.1%
2.5%

3% 6% Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Adj Adjusted E d EBIT BITDA DA DE DEVELO LOPME MENT* Organic & like for like growth excl. IFRS 16 * 2018 based on organic growth definition (stable FX and M&A excluded) 2019 based on like for like growth (Stable FX and M&A included in current & corresponding period)

Significant growth Q4 driven by lower costs
Efficiencies realized
Pension refund contributed by SEK 100 million
Easy comparison figure

16 9% Pension refund and easy comparison

SLIDE 17

REVENUE MIX PRESSURING EBITDA DEVELOPMENT

3,324 3,412 1,136 1,254 Q4 18 Q4 19 Q4 18 Q4 19 Service revenues EBITDA

1.4%
PSTN and interconnect burden service revenues
Fixed legacy in B2B compensated by ICT
Revenues mix and limited cost reduction in

PSTN explain EBITDA decline

= Like for like growth excl. IFRS 16 SER ERVICE R E REV EVEN ENUES ES & A ADJU JUSTED ED EB EBITDA SEK million in reported currency & like for like growth excl. IFRS 16

3%
Continued strong ARPU development
Smart pricing and low margin VAS
Ex. VAS ARPU grew by 1.8 percent
Subscription erosion within both B2B and B2C

17 18 19 20 21 22 2,800 2,900 3,000 3,100 3,200 3,300 3,400 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Subscriptions Postpaid ARPU +3.4% = ARPU growth y-o-y MO MOBILE BILE SUBS BSCRIP IPTIO IONS AN AND p D postpaid AR aid ARPU Total subscription base in 000’, postpaid ARPU in local currency 17

SLIDE 18 3,063 3,120 1,371 1,505 Q4 18 Q4 19 Q4 18 Q4 19

REVENUE PRESSURE NOT OFFSET BY LOWER COSTS

1%
1.8%
Mobile decline due to subscriber loss in B2C
Underlying EBITDA development around 2

percent

Synergy execution as planned
Stable low single-digit growth in Get
Pressure on traditional fixed B2B telco services
B2B mobile still growing

SER ERVICE R E REV EVEN ENUES ES & A ADJU JUSTED ED EB EBITDA SEK million in reported currency & like for like growth excl. IFRS 16 ser ervice e REV EVen enues es - BB/TV & f full B2B s segment nt SEK million, like for like, external service revenues = Like for like growth excl. IFRS 16 Service revenues EBITDA 300 600 900 Q4 18 Q4 19 TV Broadband +1.0% 200 400 600 800 Q4 18 Q4 19 B2B

2.3%

18

5%

Y-o-y +10% Y-o-y

SLIDE 19 324 379 233 280 237 295 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Estonia Lithuania Denmark Q4 18 Q4 19 Estonia Q4 18 Q4 19 Denmark +9% Q4 18 Q4 19 Lithuania

Strong baltics whilst denmark contracted

+6%

8%
6.4%

+6.0% +8.9%

Significant growth in Lithuania largely driven by

transit revenues

Another great quarter for Estonia in all key areas
Denmark continued to struggle on mobile
Both revenue growth and cost control supported

EBITDA in Lithuania

Revenue driven EBITDA growth in Estonia
Despite working on costs, Denmark unable to offset

revenue decline

SER ERVICE E REV EVEN ENUE D E DEV EVEL ELOPMEN ENT Like for like growth, external service revenues Adj Adjusted E d EBIT BITDA DA DE DEVELO LOPME MENT SEK million in reported currency & like for like growth excl. IFRS 16 = Like for like growth excl. IFRS 16 19

SLIDE 20

perational free Cash FLOW grew 16 percent 2019

2 4 6 8 10 12 14 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 OPERAT ATIO IONAL FR AL FREE C CAS ASH H FLO FLOW dev evel elopmen ent SEK billion, rolling twelve months SEK 12.6 billion OPERAT ATIO IONAL FR AL FREE C CAS ASH H FLO FLOW 2019 SEK billion, rolling twelve months

As expected operational free cash flow came

down Q4 as WC swung back

EBITDA less leasing* WC 2018

0.1

12.6 1.8

0.4

CAPEX ex. licenses 0.4 Other 2019 10.8 +16%

EBITDA growth mainly due to FX and Norway M&A
Neutral NWC impact due to Q4 swing back and

higher cash CAPEX

Other items rose driven mainly by higher pension

refund

* Repayment of lease liabilities 20

SLIDE 21

net debt up due to dividend and M&A

Net debt increased driven mainly by the Bonnier

Broadcasting acquisition and payment of the second dividend tranche

Share buy-backs of around SEK 0.9 billion left

to do until the AGM 2020

Bonnier Broadcasting earn-out of around SEK

0.8 billion

The remaining 50% equals to SEK 0.2 billion in

dividend from Turkcell to be received H1 2020

Pro forma leverage of 2.76x

3.9 1.5 4.9 9.2 Dividend Cash CAPEX 88. 88.1 Buy- backs

5.6

Q3 19 75.4 Operations Other

1.2

Q4 19 Bonnier Broadcasting 2.50x 2.71x = Leverage ratio (multiple, rolling 12 months including a full 12 months of Get/TDC Norway and Bonnier Broadcasting) NET ET D DEB EBT DEV EVEL ELOPMEN ENT Continuing and discontinued operations, SEK billion, and leverage ratio 21

SLIDE 22

Operational free Cash flow outlook 2020

22

EBITDA, cash CAPEX and NWC expected to be rather neutral
Other items to reduce operational free cash flow driven by
Paid taxes and interest to increase by c. SEK 1 billion
Less support from the pension refund

O P E R A T A T I O I O N A L A L F F R E E C A C A S H F F L O L O W 2 0 2 0 S E S E K 1 1 0 . 5 - 1 1 . 5 B I L I L L I O I O N

SLIDE 23

Q&A

SLIDE 24

DISCLAIMER & FORWARD-LOOKING STATEMENTS

This document contains the use of alternative performance measures (APM’s) to provide readers with additional financial information that is regularly reviewed by management, such as adjusted EBITDA, CAPEX and operational free cash flow. These APM’s should not be viewed as a substitute for Telia Company’s IFRS based figures, but as a complement. APM definitions can be found in Telia Company’s interims reports and Annual and Sustainability Report 2018 and may be defined differently by other companies and are therefore not always comparable to similar measures used by other companies. Telia Company’s management considers these APM’s combined with IFRS performance measures and in conjunction with each other, the most appropriate way to measure the performance of Telia Company. Statements made in this document 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. 24