[PPT] - Q1 Interim REPORT JANUARY March 2020 CHRISTIAN LUIGA president PowerPoint Presentation

SLIDE 1

Q1

CHRISTIAN LUIGA

president & CEO

Interim REPORT JANUARY – March 2020

SLIDE 2

1.0%
0.2%

Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q1 20 (excl. TV/media)

CONTINUED IMPROVEMENT IN OUR TELCO BUSINESSES

SER ERVICE E REV EVEN ENUEs Es I Improved ed Dividend and leverage Adj Adjusted E d EBIT BITDA DA imp impac acted d by by tv an and d me media dia * Like for like 2

5.1%
1.4%

Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q1 20 (excl. TV/Media) YoY growth* YoY growth*

SEK3.3Bn

OPERAT ATIO IONAL FR AL FREE C CAS ASH H FLO FLOW q1 2020 (SEK 4.4 billion Q1 2019) Dividend

SEK 1.80/share

(SEK 7.4 billion)

Leverage

2.62x

(2.71x Q4 2019)

SLIDE 3

Covid-19 impacts and implications

3

Additional impact on the advertising market sentiment –

difficult to isolate

Cancelled sport events affect TV distribution and cost
Limited impact on the telco business so far
Networks holding up well despite high usage
No significant supply chain issues so far
Plans in place to ensure business continuity
120
100
80
60
40
20

COVID Imp ID Impac act o

n q

q1 2 2020 – largel gely tv r rel elated ed Adjusted EBITDA, SEK million Potential ial OPPORTUNIT ITIE IES/ r ris isks ahe ahead ad FURTHER HIGH DEMAND FOR SUPPORT TO B2B AND SOCIETY ROAMING impacted by travel restrictions CANCELLED SPORT EVENTS WILL IMPACT TV DISTRIBUTION CUSTOMER FINANCIAL STABILITY MAY DEGRADE B2C AND B2B SEGMENT MAY SEE IMPACT FROM INCREASED UNEMPLOYMENT TELCOS KEY ROLE IN DIGITALIZATION OF SOCIETY TO BECOME EVEN MORE VISIBLE

Activation of identified mitigating actions if needed

Liiga write-down and pay-TV impact on TV & Media unit and within countries

SLIDE 4

Supporting our stakeholders DURING THIS TIME

4

Telia Crowd Insights tool used

by authorities thought our footprint to fight COVID-19

Risk management teams in place
Keeps customers connected
Enabling digital ways of

working and home schooling

Securing vital access to

information and entertainment

Keep distance but keep contact Data in fixed networks Data in mobile networks Voice in mobile networks

Managing network

usage increase

On top of this

handling 25% increased traffic for Telia Carrier

SUP UPPORT ORTING A AUT UTHORI ORITIES SUP UPPORT ORTING CUS USTOM OMERS RS & S & SOC OCIETY PROOF ROOF P POI OINT OF OF B BEST N NETWORKS ORKS Increase in traffic In Internal al me meas asureme ments t tak aken 30-50% 10-20% 20-70% Staff wellbeing Security Supply chain Networks & TV

SLIDE 5

MOBILE REVENUES SHOW POSITIVE GROWTH

5 mobile e ser ervice e rev even enue gr e growth Like for like growth 0.9% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

SWEDEN

+1. +1.2% 2%

FINLAND

+3. +3.9% 9%

NORWAY

+3. +3.5% 5%

Sweden supported by additional migration and B2B
Strong B2B development in Norway
Between 4-7 percent growth in the Baltics
ARPU growth in 5 of 6 markets
Overall the result from price initiatives and good

work on upsell

LIT +5.3% EST +2.8% DEN

0.9%

Mo MoBile Bile ar arpu Grow rowth In local currency, pre and postpaid, y-o-y

SLIDE 6

GOOD MOMENTUM IN FIXED BROADBAND

6 Fix Fixed br d broadban adband s d servic ice revenue growt wth Like for like growth 3.3% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Sweden and Norway main drivers behind solid

development

Sweden: ARPU uplift and fiber intake
Norway: Good subscription development
OCN* penetration Q1 increased by 60,000 y-o-y,

40 percent up

New co-operation in Finland to speed up SDU fiber

roll-out

* Open city networks KEEPIN ING T THE HE FR FRONTRUNNER P POSTIO ION WIT ITHIN HIN FIX FIXED Like for like growth

SLIDE 7

Ebitda growth in traditional telco

7 EB EBITDA bridge ge q1 2020 1 2020 - Group roup SEK billion, like for like, adjusted EBITDA

Run-rate into 2020 lower as communicated
COVID-19 impacting an already slightly weaker

advertising market

EB EBITDA bridge ge Q1 2020 1 2020 - TV an and d Me Media dia SEK billion, like for like, adjusted EBITDA 0.3 Market and COVID-19 Q1 2019

0.2
0.1

Run-rate into 2020 Q1 2020 0.0

The traditional telco business grew EBITDA by

1.7 percent

0.2

Q1 19 0.1 Telco business Q1 20 (ex. TV & Media) Items affecting comparability

0.3

Q1 20 TV & Media 7.3

1.4%
5.1%

Pension refund, Liiga write-down and sold receivables

SLIDE 8

TV & MEDIA – AN EVEN STRONGER TOTAL TV POSITION

Lin Linear ar cs csov – TV4 an and d mt mtv Commercial Share of Viewing, ages 15-64 Dig Digit ital al cs csov – tv tv4 Commercial share of viewing, ages 3+ 8

+ =

INCREASED total tv MARKET SHARE DESPITE A LARGE DISTRIBUTOR DECIDING NOT TO OFFER PART OF OUR CONTENT TO ITS CUSTOMERS

Mar Market p posit itio ion Source: MMS, Finnpanel Source: MMS 1.8 million total viewers including record high digital consumption 46.3 46.2 38.7 40.1 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

0.1

+1.5 64.1 68.3 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 +4.2

SLIDE 9

good B2C mobile & broadband revenue growth

9 Mob

bile sub

ubscri ription

n re

revenue ue g grow rowth - B2C In local currency, external service revenues Fixe xed broa roadband re revenue ue g grow rowth – b2c In local currency, external service revenues

Continued B2C ARPU growth
Subscription fees supported by migrations

5.3% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Added 3,000 B2C subs. net Q1 2020 (26,000 in

fiber)

Fiber price increase in Q2 2019 pushed revenue

growth into positive territory

XDSL price increase Q4 2019 amplified growth

3.0% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

SLIDE 10

OUTLOOK FOR 2020 (updated)

SEK 9.5-10.5 BILLION (PREVIOUSLY: SEK 10.5-11.5 BILLION)

OPERATIONAL FCF*

NO GUIDANCE DUE TO LOW VISIBILITY (PREVIOUSLY: TO GROW 2-5 PERCENT)

ADJUSTED EBITDA*

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

SLIDE 11

Douglas lubbe

cfo

Interim REPORT JANUARY – March 2020

Q1

SLIDE 12

REVENUES AND EBITDA DECLINED DUE TO TV AND MEDIA

Growth in Sweden due to mobile and broadband
Fixed telephony continued down in Finland
Mobile growth in Norway offset by decline in TV
TV and Media fell from pressure on advertising

Q1 19 LIT LAT Other EST DEN NOR FIN Q1 20 SWE Telia Carrier TV & Media

1.0%

LAT EST Q1 19 SWE FIN NOR DEN LIT TV & Media Other Q1 20

5.1%
Lower pension benefit impacted Sweden
Norway and Finland impacted by one-off items
Revenue pressure and higher costs in TV & Media
Positive growth in the traditional telco business

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 12

SLIDE 13

0.9%

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19* Q3 19 Q4 19 Q1 20

GRADUALLY IMPROVING B2B TREND CONTINUES

13 B2B 2B ser ervice e rev even enue d e dev evel elopmen ent – all all mar markets Organic growth 2018 & like for like growth 2019/2020

Sweden and Norway main drivers
Dedicated work on the propositions yielding
Continued good traction in ICT and IoT
Sweden: Product launches, NPS improvement
Norway: Good development within Public and SME
Finland: ICT growth supported

* Q2 2019 positively impacted by one-off like revenues in Sweden

1.2%

(-1.5% FY19)

+2.3%

(-2.5% FY19)

0.4%

(-0.7% FY19)

Q1 2020 Q1 2020 Q1 2020

SLIDE 14

COST AGENDA 2020 STILL IN FOCUS

OPEX EX d dev evel elopmen ent External expenses, like for like, including an estimated 2% cost inflation 3%

6%
4%
2%

0% 2% 4% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

OPEX increased 3 percent largely due to:
Less pension refund contribution in Sweden
Overall increased need of staffing in customer care
Higher credit losses in particularly Norway and Sweden
IT and resource costs in TV and Media
Adjusted for pension refund OPEX grew by ~2 percent
Activities ahead
Resources in all markets - both employees & consultants
Marketing spend to be calibrated
Common Products and Services to step up in H2
The longer the pandemic lasts the execution risk increases

14

SLIDE 15

Improved revenue trend

Stable trend in B2C and less drag from OTC Q1
Sequential improvement in B2B driven by mobile

B2C

SER ERVICE E REV EVEN ENUE D E DEV EVEL ELOPMEN ENT In local currency, external service revenues Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 B2C excl. fiber OTC B2B B2C +1.2%

1.2%

+0.7% Adj Adjusted E d EBIT BITDA DA DE DEVELO LOPME MENT Like for like growth excl. IFRS 16 impact 2019

Sweden slightly negative as revenue growth and

cost measures were offset by mainly

less pension benefit (SEK 100 million)
higher resource costs in customer service
Growth of 2.4% if adjusting for pension

15 Pension refund and easy comparison

B2B

3%

0.7%

6% 2.4% Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

SLIDE 16

LIIGA CANCELLATION AND FIXED TELEPHONY IMPACTED

3,273 3,302 1,169 1,156 Q1 19 Q1 20 Q1 19 Q1 20 Service revenues EBITDA

1.4%
Mobile subscription revenues grew while fixed

telephony continued to burden

SEK 40 million negative EBITDA impact from

cancellation of the Liiga season

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

3.3%
Mobile subscriber revenue growth driven by ARPU

17 18 19 20 21 22 2,800 2,900 3,000 3,100 3,200 3,300 3,400 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Subscriptions Postpaid ARPU +4.5% = 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 16

SLIDE 17 1,900 2,100 2,300 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Subscriptions Postpaid ARPU 3,119 2,964 1,516 1,387 Q1 19 Q1 20 Q1 19 Q1 20

FLAT MOBILE SUBSCRIPTION DEVELOPMENT

4.3%
0.7%
Mobile revenues grew from solid B2B performance
EBITDA Q1 2019 positively impacted by sale of

impaired customer receivables

SEK 35 million increase in credit losses in Q1 2020
Postpaid ARPU grew slightly
OneCall continues to show subscriber growth
Growth in B2B revenues from strong mobile

SER ERVICE R E REV EVEN ENUES ES & A ADJU JUSTED ED EB EBITDA SEK million in reported currency & like for like growth Mobile s subscr criptions ns Total subscriptions & postpaid ARPU in local currency = Like for like growth Service revenues EBITDA 17 +1.3% NOK 275 NOK 300 = ARPU growth y-o-y

SLIDE 18 345 373 272 290 219 231 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Estonia Lithuania Denmark Q1 19 Q1 20 Estonia Q1 19 Q1 20 Denmark +4.1% Q1 19 Q1 20 Lithuania

Strong performance in led

+5.6% +3.0%

1.6%

+6.0% +7.3%

Solid performance for both mobile and fixed

revenues in Lithuania and Estonia

Denmark improved as mobile growth turned neutral
Growing revenues supported EBITDA in the Baltics
Better on revenues and another great quarter on

costs in Denmark

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 = Like for like growth 18

SLIDE 19

TV & MEDIA – TEMPORARY SPORTS CHALLENGE

All sport packages priced in line with base package
Price changes also impacts all other markets
All time high consumption on recently launched series

Redu duced p d pric ices fr from c m can ancelle lled d sports In SEK and EUR

Q4 supported by 60,000 free subscriptions added

during December conflict – of which half have continued as paying customers in Q1

Subscriber base maintained despite sport

cancellation due to strong overall content portfolio

Stable subscr cription b n base d despite ch challeng nges SVOD subscriptions in ’000 200 400 600 800 Q4 2019 Q1 2020 449:- 349:- 199:- 139:- 139:- € 29.95 € 24.95 € 12.95 € 12.95 Original price Temporary price 19

SLIDE 20

Cash flow from ebitda less capex is growing

2 4 6 8 10 12 14 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 OPERAT ATIO IONAL FR AL FREE C CAS ASH H FLO FLOW dev evel elopmen ent SEK billion, rolling twelve months SEK 11.5 billion OPERAT ATIO IONAL FR AL FREE C CAS ASH H FLO FLOW Q1 SEK billion Tax

0.2

Q1 2019 0.3 EBITDA less leasing*

0.3

WC

0.4
0.5

Other Q1 2020 4.4 3.3 CAPEX ex. licenses

1.1
EBITDA less CAPEX grew by 3 percent
Still positive on WC although slightly less than LY
Tax negative due to tax refund LY
Less support from pension refund vs. LY

* Repayment of lease liabilities 20

SLIDE 21

net debt and leverage decreased

Net debt decreased driven by operations and

EUR 0.5 billion green hybrid bond issuance

Buy-backs finalized (in total 6% of shares

bought back)

FX movements increased leverage
First dividend tranche of SEK 3.7 billion in April
Bonnier Broadcasting earn-out of maximum

SEK 0.8 billion

The remaining 50% (SEK 0.2 billion) in dividend

from Turkcell Holding

3.0 1.0 1.5 Green hybrid Cash CAPEX Buy- backs 88.1 Q4 19

7.2

Operations

2.6

FX &

ther

83. 83.7 Q1 20 2.71x 2.62x = Leverage ratio (multiple, rolling 12 months including a full 12 months of Bonnier Broadcasting) NET ET D DEB EBT DEV EVEL ELOPMEN ENT Continuing and discontinued operations, SEK billion and leverage ratio 21

SLIDE 22

Capital structure in focus

22

Rating confirmed by Moody’s EUR 0.5 billion green bond issued Liquidity FURTHER SUPPORTED by a new credit facility of SEK 4 billion Lowered Dividend

“committed to keep long- term solid investment grade”

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 2019 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