Q2 INTERIM REPORT APRIL JUNE 2018 JOHAN DENNELIND PRESIDENT - - PDF document

SLIDE 1

1

JOHAN DENNELIND PRESIDENT & CEO

INTERIM REPORT APRIL – JUNE 2018

Q2

EXCECUTING ON STRATEGY AND FINANCIALS

2 COST REDUCTION ON TRACK COST REDUCTION ON TRACK STRONG OPERATIONAL FREE CASH FLOW STRONG OPERATIONAL FREE CASH FLOW

+12% +12%

REPORTED EBITDA GROWTH IN ALL MARKETS REPORTED EBITDA GROWTH IN ALL MARKETS

+6.9% +6.9%

REPORTED Q2 2018 YTD 2018 DELIVERING ON THE M&A AGENDA DELIVERING ON THE M&A AGENDA

• 0.7BN
• 0.7BN

H1 2018 LEVERAGE & LIQUIDITY LEVERAGE & LIQUIDITY

1.14x

Q2 2018

BONNIER BROADCASTING GET/TDC NORWAY

Norway

46BN

LEVERAGE LIQUIDITY

NOK 21.0 BILLION SEK 9.2 BILLION

SLIDE 2

2

2017 (SEK BILLION)

GET/ TDC NORWAY** BONNIER BROADCASTING

RUN-RATE SYNERGIES (PER YEAR)

COMBINED PRO FORMA

1.8 43.4% 0.5 6.8% 1.2



3.5 >28.5% 1.0 53.1% 0.4 82.4% 1.3



2.7 76.5% 0.7x 0.2x

• 0.1x



0.8x 3 EBITDA (margin) EBITDA (margin) EBITDA-CAPEX* (cash conversion) EBITDA-CAPEX* (cash conversion) * Excluding licenses ** SEK/NOK rate of 1.04

A STRONGER TELIA COMPANY WITH KEY AMBITIONS INTACT

OUR BALANCE SHEET TARGETS AND ANNOUNCED SHAREHOLDER RETURNS REMAIN INTACT OUR BALANCE SHEET TARGETS AND ANNOUNCED SHAREHOLDER RETURNS REMAIN INTACT

• LEVERAGE TARGET OF 2x PLUS/MINUS 0.5x
• SOLID CREDIT RATING A-/BBB+
• GROW DIVIDEND OVER TIME
• SEK 15 BILLION IN SHARE BUY-BACK

Net debt/EBITDA (x) Net debt/EBITDA (x) 4 * Including 24 Partners NOK billion 2017 Revenues 4.0 Revenue CAGR 2015-2017 3.2% EBITDA 1.7 EBITDA margin 43.4% EBITDA CAGR 2015-2017 7.6% EBITDA-CAPEX 0.9 Cash conversion 53.1%

TRANSACTION RATIONALE

SWEET-SPOT ACQUISITION OF GET AND TDC NORWAY

TRANSACTION OVERVIEW

Homes passed* 800k Homes connected 518k RGUs 950k B2B customers 2k RGUs 77k

COMPANY OVERVIEW

• High stickiness with low-

single digit churn

• High speed broadband,

advanced TV entertainment and smart home services

• Multiservice network

with a range of as-a- service products

STRATEGIC SWEET-SPOT STRATEGIC SWEET-SPOT BEST IN CLASS STAND ALONE OPERATION BEST IN CLASS STAND ALONE OPERATION FINANCIALLY ACCRETIVE FINANCIALLY ACCRETIVE

• Purchase price of NOK 21 billion

(EV/EBITDA 9.0x including synergies)

• Cash flow accretive day one
• EBITDA synergies of NOK 0.6 billion

50/50 split between revenues and OPEX

• Proven track record and value creation

from M&A in Norway

• Convergence in both B2C and B2B
• Extensive reach from connecting ~1.8

million Norwegians every day

• Strong operational track record
• Highly synergetic and cash flow accretive

transaction

SLIDE 3

3

GROWTH IN GET TO CONTINUE

5

GET TV

• Subs. in 000’, ARPU in local currency

REVENUE DEVELOPMENT

Growth y-o-y, adjusted**

GET BROADBAND

• Subs. in 000’, ARPU in local currency

3%

• 10%

2016 2017 H1 2018 Get TDC Norway

• Continuous growth in Get driven by

broadband and TV

• Decline in TDC Norway mainly

attributable to loss of low ARPU mobile and fixed voice subscriptions 375 257 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18* Subscriptions ARPU 410 318 Q1 17** Q2 17** Q3 17 Q4 17 Q1 18 Q2 18* Subscriptions ARPU

• Broadband subscriptions steadily growing
• 3,000 net adds Q2 and 4 percent base

expansion Q2 y-o-y

• Price management and upsell supported

ARPU 2018

• Subscription base stabilizing - flat

sequential development Q2

• Rather stable ARPU development

* Preliminary numbers per May 2018 ** Adjusted for one-offs Q1-Q2 2017

AMBITION OF LOW SINGLE DIGIT REVENUE GROWTH GOING FORWARD AMBITION OF LOW SINGLE DIGIT REVENUE GROWTH GOING FORWARD

SERVICE REVENUE DEVELOPMENT

Organic growth, external service revenues Q2 17 Q3 17 Q4 17 Q1 18 Q2 18

• 2.3%
• 2.3%

3.9% 6.9% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 18 reported

CONTINUED STRONG EBITDA DEVELOPMENT

EBITDA DEVELOPMENT

Organic growth, reported Q2’18, excluding adjustment items

• Drop Q2 to approx. half driven by less low-margin

transit service revenues

• B2C rather flat while still pressure in B2B
• Mobile still growing in majority of markets
• Organic EBITDA growth in 6 of 7 markets -

reported growth in all markets

• Support from lower costs
• Still FX and M&A tailwind

6

SLIDE 4

4

DELIVERING ON THE COST PROGRAM

7

COST SAVINGS REALIZATION – H1 2018

SEK in billions

• Executing according to plan
• Continues to work on getting cost awareness as

part of the organizational culture

0.7 1.1 H1 2018 Full year target

COST SAVINGS ON TRACK HALF WAY THROUGH COST SAVINGS ON TRACK HALF WAY THROUGH

SWE NOR DEN LIT EST OTHER

COST SAVINGS BREAKDOWN – H1 2018

• Sweden down SEK 0.4 billion from mainly lower

resource costs – saving pace expected to come down H2

• ICT growth offsets savings in Finland

0% 1% 2% 3% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18

GROWING MOBILE ARPU IN ALL MARKETS

MOBILE SERVICE REVENUE GROWTH

Organic growth

SWEDEN

+3.9%

SWEDEN

+3.9%

MOBILE ARPU GROWTH Q2

In local currency, y-o-y

FINLAND

+2.7%

FINLAND

+2.7%

NORWAY

+0.5%

NORWAY

+0.5%

8

THE BALTICS

+3.6%

THE BALTICS

+3.6%

+0.6% +0.6%

• Mobile revenue growth in 5 of 7 markets
• Mixed Nordic picture
• Solid performance in the Baltics
• Mobile ARPU growth in all markets
• Sweden strong despite B2B price pressure

SLIDE 5

5

DIGITALIZATION TO DRIVE SUSTAINABILITY

9

EXAMPLES OF HOW WE CONTRIBUTE

Construction site digitalization to enable best use of resources, efficiency and better safety Partnership in smart temperature control to get more energy efficient buildings in Stockholm Connected wearable devices to increase safety and quality of elderly care in Denmark Reduced energy consumption as an integral part of our sustainability agenda Empowering and interacting with children/youth via YOUNITE and protecting children via CSAM

OUTLOOK FOR 2018 IS UNCHANGED

* Free cash flow from continuing operations, excluding licenses and dividends from associated companies ** Based on current structure, i.e. including M&A made so far, excluding adjustment items, in local currencies

Above SEK 9.7 billion

Operational FCF together with dividends from associated companies should cover a dividend around the 2017 level

OPERATIONAL FCF*

In line or slightly above the 2017 level of SEK 25.2 billion

EBITDA**

10

SLIDE 6

6

CHRISTIAN LUIGA EXECUTIVE VICE PRESIDENT & CFO

INTERIM REPORT APRIL – JUNE 2018

Q2

• 2.3%
• 10%
• 5%

0% SE FI NO DK Baltics Carrier Total

REVENUE PRESSURE ONLY PARTIALLY IMPACTING EBITDA

SERVICE REVENUE GROWTH – BY MARKET

Organic growth Q2, external service revenues

• Decline in low-margin transit revenues represented
• approx. half of the decline - part of strategy and

results in no material EBITDA impact

12

• Significant step-up in equipment sales
• Mobile revenue growth not enough to

compensate for legacy and low-margin fixed transit revenues

NET SALES DEVELOPMENT

Organic growth Mobile Equipment Q2 17 Fixed Other Q2 18 +1.3% Service revenues

• 2.3%
• 2.3%

Total underlying* * Excluding impact from low margin revenues in Lithuania and Telia Carrier

SLIDE 7

7

SOLID ORGANIC EBITDA PERFORMANCE

EBITDA DEVELOPMENT – ORGANIC

Organic growth, y-o-y, excluding adjustment items

• EBITDA growth in 6 of 7 markets
• Significant reduction in Swedish resource costs
• Synergies from Phonero in Norway
• Solid cost control on group level

13 SWE Q2 17 Q2 18 FIN NOR DEN LIT EST LAT Other +3.9%

• EBITDA growth of 6.9 percent driven by
• Solid organic growth
• FX tailwind mainly from stronger EUR & NOK

EBITDA DEVELOPMENT – REPORTED

Reported growth, excluding adjustment items M&A Organic Q2 17 FX Q2 18 +6.9%

POSITIVE EBITDA IN SWEDEN DUE TO LOWER COSTS

• Stable and growing B2C for

second consecutive quarter

• Somewhat intensified price

pressure in B2B

Q2 17 Q3 17 Q4 17 Q1 18 Q2 18

B2B B2C

B2C excl. fiber installation revenues B2C incl. fiber installation revenues

EBITDA

Organic growth, excl. adj. items

• Cost savings more than

compensated for revenue pressure from legacy services

SERVICE REVENUES

Organic growth, external revenues 14 0.9% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 +0.4% +0.4% +1.3% +1.3%

• 3.3%
• 3.3%

MOBILE POSTPAID – B2C

In local currency 260 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Mobile B2C postpaid ARPU Mobile B2C revenue growth +5% +5%

• Solid growth in ARPU key driver

behind strong revenue growth

• Less tailwind expected from

VAS and invoicing fees in H2

SLIDE 8

8

FLAT DEVELOPMENT IN FINLAND FROM SOFTER MOBILE

2,913 3,248 1,028 1,124 Q2 17 Q2 18 Q2 17 Q2 18 Service revenues EBITDA

SERVICE REVENUES* & EBITDA**

SEK million, reported currency & organic growth

• 1.3%
• 1.3%
• 0.4%
• 0.4%
• M&A and FX boosted reported numbers
• Leverage potential from data center & ice hockey rights
• Assembly deal - a game opener for eSports

= Organic growth * External service revenues ** Excluding adjustment items 15

MOBILE SUBSCRIPTIONS AND ARPU

Total subscription base in 000’, ARPU in local currency

• Growth in base and ARPU Q2
• Good intake on B2B
• Positive signals on churn
• Selective price increases made in the quarter

15 16 17 18 19 20 2,500 2,750 3,000 3,250 3,500 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Subscriptions ARPU +3% +3%

EBITDA GROWTH IN NORWAY DUE TO LOWER COSTS

2,164 2,221 885 987 Q2 17 Q2 18 Q2 17 Q2 18

SERVICE REVENUES* & EBITDA**

SEK million, reported currency & organic growth +6.4% +6.4%

• 1.9%
• 1.9%

Service revenues EBITDA

• Softer on mobile B2B
• Lower special-number revenues
• One-off items impacted growth negatively

EBITDA** DEVELOPMENT

SEK million, reported EBITDA growth * External service revenues ** Excluding adjustment items = Organic growth

• Organic growth supported by synergy realization
• Tailwind from FX

16 Q2 17 FX Organic Q2 18 +11.6%

SLIDE 9

9

216 252 290 347 154 170 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Estonia Lithuania Denmark Q2 17 Q2 18 Lithuania Q2 17 Q2 18 Denmark +12.0% +12.0% Q2 17 Q2 18 Estonia

LED CONTINUES TO DELIVER EBITDA GROWTH

+9.3% +9.3% +3.4% +3.4%

• 6.1%
• 6.1%
• 6.8%
• 6.8%

+4.3% +4.3%

SERVICE REVENUE DEVELOPMENT

Organic growth, external service revenues

EBITDA* DEVELOPMENT

SEK million, reported currency & organic growth = Organic growth * Excluding adjustment items

• Lithuania down from drop in low-margin transit revenues
• mobile grew by 14 percent
• Continued mobile and fixed growth in Estonia
• Denmark remains challenging
• Estonia supported by revenue growth
• Solid mobile revenue and cost development in

Lithuania

• Strong execution on costs in Denmark

17 2 4 6 8 10 12 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Operational free cash flow (R12)

STRONG CASH FLOW TREND

OPERATIONAL FREE CASH FLOW TREND

Continuing operations, SEK billion

OPERATIONAL FREE CASH FLOW - H1

Continuing operations, SEK billion 10.4 6.1 6.8 EBITDA NWC CAPEX

• 1.0

H1 2018 H1 2017 +1.8 Interest, Tax Pensions & other 18

• Good support from operations
• Continuing to execute on working capital
• Negative contribution from tax and interest

9.7 5.5

SLIDE 10

10

LEVERAGE REMAINS LOW SUPPORTED BY OPERATIONS

1.01x 1.01x = Leverage ratio

NET DEBT DEVELOPMENT – Q2

Continuing and discontinued operations, SEK billion Cash CAPEX 32.4 Q1 18 +5.0

• 6.7

Operations +1.1 +3.6 1st dividend tranche Buy- backs +1.0 FX & Other Q2 18 28.5 1.14x 1.14x 19

• Strong operations support
• 1st dividend paid & buy-back program initiated
• Average funding cost of around 2.8 percent on gross

debt and around 0.2 percent yield on liquidity

• Low refinancing levels in the coming years (SEK 1

billion 2018, SEK 5 billion 2019, SEK 6 billion 2020 and SEK 7 billion in 2021)

NET DEBT BREAKDOWN – Q2

SEK billion, Q2 2018 46.0

• 83.6

5.2

• 32.4

Liquidity (continuing

• perations)

Gross debt (continuing

• perations)

Eurasia, net Net debt

SHAREHOLDER REMUNERATION INTACT

PRO FORMA LEVERAGE

Leverage ratio, continuing and discontinued operations, rounded numbers Illustrative cash flow* Cash flow beyond 2018, net

• f dividend

Pro forma year end 2018 Get/ TDC Norway incl. full synergies Bonnier broadcasting incl. full synergies 0.1x Q2 18 Get/ TDC Norway purchase price Turkcell dividend M&A proceeds Uzbek settlement Buy-back 1 year 2nd dividend 0.2x Bonnier broadcasting purchase price Buy-backs 2018 1.1x 0.2x 0.1x 0.7x

• 0.1

2.2x

• 0.1x
• 0.1x

0.2x 20

• We remain committed to the

leverage range of 2x +/- 0.5x

• Comfortable being in the upper

part of the leverage range due to:

• more diversified group
• strong cash flow generation
• acquisitions with strong cash

flow  All of which supports deleveraging

• Commitment to the dividend policy

and the three year buy-back program remain unchanged

* Pro forma illustrative cash flow 2018 is based on the 2017 level of operational free cash flow less operational free cash flow H1 2018 ANNUAL CASH FLOW

SLIDE 11

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PIONEERS IN BRINGING TRUE CONVERGENCE TO NORDIC CUSTOMERS

22

TRANSACTION SUMMARY

VALUE VALUE FINANCIAL EFFECTS FINANCIAL EFFECTS TIME TABLE TIME TABLE STRATEGIC RATIONAL STRATEGIC RATIONAL CONDITIONS CONDITIONS BALANCE SHEET IMPACT BALANCE SHEET IMPACT *Based on last twelve months as of 31 March 2018

• By combining Bonnier Broadcasting’s competence and portfolio within domestic content and Telia’s award winning TV service and

first class network we create a unique converged player in the Nordic region

• SEK 9.2 billion on a cash and debt free basis with a additional purchase price of maximum SEK 1 billion
• Implies EV/EBIT, including full run rate synergies of 7.7x*
• Earnings and cash flow accretive to Telia Company post closing
• Operational free cash flow contribution of SEK 0.6 billion standalone and SEK 0.5 billion net of synergies and integration costs 2020
• Total consideration to be financed using cash on balance sheet
• Net debt to EBITDA impact 0.2x
• Subject to approval from EU Competition Authority
• Expected closing in H2 2019

SLIDE 12

12

REDEFINING THE INDUSTRY ON CUSTOMERS’ TERMS

• Telia Company leading the way in convergence and fulfilling customer demand
• With around 7.5 million B2C customers in Sweden and Finland we know what customers want and we can deliver
• Leverage brand and customer relations as well as utilize data analytics and customer knowledge to offer a unique and

personalized service to our customers

• Telia Company leading the way in convergence and fulfilling customer demand
• With around 7.5 million B2C customers in Sweden and Finland we know what customers want and we can deliver
• Leverage brand and customer relations as well as utilize data analytics and customer knowledge to offer a unique and

personalized service to our customers CONVERGENCE BELIEVERS AND CUSTOMER CHAMPIONS CONVERGENCE BELIEVERS AND CUSTOMER CHAMPIONS

• Bonnier Broadcasting is EPS and cash flow accretive stand alone basis – adding SEK 0.6 billion in cash flow by 2020

(SEK 0.5 billion net of synergies)

• Full run rate synergies of SEK 0.6 billion from 2022 gradually improving.
• No change to capital allocation commitments and supportive for ambition of growing dividend over time
• Bonnier Broadcasting is EPS and cash flow accretive stand alone basis – adding SEK 0.6 billion in cash flow by 2020

(SEK 0.5 billion net of synergies)

• Full run rate synergies of SEK 0.6 billion from 2022 gradually improving.
• No change to capital allocation commitments and supportive for ambition of growing dividend over time

EARNINGS AND CASH FLOW ACCRETIVE EARNINGS AND CASH FLOW ACCRETIVE

• Great potential combining Telia Company’s B2C sales engine with Bonnier Broadcasting’s attractive content
• Content costs largely fixed, implies significant operational leverage opportunity
• Great potential combining Telia Company’s B2C sales engine with Bonnier Broadcasting’s attractive content
• Content costs largely fixed, implies significant operational leverage opportunity

CONTENT IS A SCALE GAME CONTENT IS A SCALE GAME 1 2 3 23

VALUE FROM OWNING CONTENT

BE PART OF THE RESHAPING MEDIA VALUE CHAIN ON OUR TERMS BE PART OF THE RESHAPING MEDIA VALUE CHAIN ON OUR TERMS ENHANCE CUSTOMER EXPERIENCE WITH DATA ANALYTICS INTO UNIQUE OFFERINGS ENHANCE CUSTOMER EXPERIENCE WITH DATA ANALYTICS INTO UNIQUE OFFERINGS SECURE KEY CONTENT, NOW AND FOR THE FUTURE MONETIZE ON VIDEO ACROSS THE ENTIRE MARKET, NOT JUST OUR CUSTOMERS SECURE KEY CONTENT, NOW AND FOR THE FUTURE MONETIZE ON VIDEO ACROSS THE ENTIRE MARKET, NOT JUST OUR CUSTOMERS

24

SLIDE 13

13

BONNIER BROADCASTING AT A GLANCE

Number 1 commercial broadcaster in Sweden

• CSOV*: 38% 2017**
• Wide range of attractive quality content with key strength in domestic series, entertainment and news
• Main brands: TV4, Sjuan and TV12
• TV4 Play: More registered users than any other service in Sweden

Number 1 commercial broadcaster in Finland

• CSOV*: 36% 2017
• Wide range of attractive quality content with key strength in domestic series, entertainment and news
• Main brands: MTV3, SUB and AVA
• Katsomo: Widely used online TV service

Fastest growing SVOD service

• C More growing twice as fast as the SVOD market Q1 2018 y-o-y
• Pay TV channels and SVOD services in Sweden, Finland and Denmark
• Key strength in domestic content incl. movies, TV series, drama and sport
• Several hundred thousands SVOD customers and even more pay-TV customers

25

COMPANY DESCRIPTION TOP FORMATS

*CSOV=Commercial share of viewing ** Source MMS, among age group 15-59 years

TELIA – A LEADING TV DISTRIBUTOR

26

MOST SATISFIED TV CUSTOMERS GROWING TV CUSTOMER STOCK

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 (‘000) TV customers

• 1.8 million TV customers
• 100 channels
• 1 app

SLIDE 14

14

1 2 3 4 2015 2016 2017 R12 SEK in billions Costs 2 3 4 5 2015 2016 2017 R12 SEK in billions Revenues

TV4 IN MORE DETAIL

MOST ATTRACTIVE CONTENT

27

TOTAL TV POLE POSITION COST CONTROL & LEVERAGE

35% 38% 2013 2014 2015 2016 2017 CSOV, 15-59 years (%) TV4 Player 2 Player 3 Others Int** AVOD #1 #2 Dom.* AVOD 13% 39% 61% 200 400 600 800 1000 1200 #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 The most popular commercial TV shows are all at TV4* The most popular commercial TV shows are all at TV4* * June 2018 R12, excluding the public service channels (SVT1 & SVT2) as well as various sport events Leverage from growth in revenues, content cost management and stable other costs Leverage from growth in revenues, content cost management and stable other costs +5.5%

• 15
• 10
• 5

5 10 15 20 TV4 ad revenue growth (%) Good track record of growing ad revenues Good track record of growing ad revenues Premium position in ad market shift Premium position in ad market shift Steady growth in CSOV Steady growth in CSOV Source: MMS Source: MMS No of viewers (‘000) Source: MediaVision – Number of daily viewers Q1 2018 *TV4 Play, Aftonbladet TV, Viafree, Expressen TV and D Play ** Facebook and YouTube Growth in number of daily viewers Q1 2018

C MORE IN MORE DETAIL

NEW STRATEGY SUCCESSFUL SVOD OUTPACES PAY TV

16% 1% CAGR 2015-18 (%) SVOD market Pay TV market Source: MediaVision, PTS

• SVOD growth driven by customer

changing behavior

• C More to benefit
• Increased demand for domestic content
• Improved platform
• Volume driven growth
• Synergies from TV4 co-operation and

volume growth not fully realized

MATERILIAZING ON REVENUES

• Fastest growing SVOD service in

Sweden for three years

• C More and TV4 in closer co-operation
• Improved content portfolio management

2013 2014 2015 2016 2017 Q1 2018 Subscriptions New strategy implemented New strategy implemented 0.5 1.0 1.5 2.0 2015 2016 2017 R12 Q1 2018 SEK in billions Revenues 28

SLIDE 15

15

MTV IN MORE DETAIL

TOUGHER AD MARKET SVOD GAINING MOMENTUM

38% 1% CAGR 2015-18 (%) SVOD market Pay TV market Source: MediaVision, Ficora

• SVOD growth driven increased

willingness to pay

• Similar growth domestic SVOD vs

international SVOD

• Strengthened offering when combining

MTV and Telia together with partners

STRONGER TOGETHER

• Ad market lagging Sweden
• AVOD less than 10 percent of total market

vs 25 percent in Sweden

• A relatively weak macro development

also impacts

• MTV largest commercial broadcaster

12%

• 2%

CAGR 2015-18 (%) AVOD ad market Linear TV ad market Source: MediaVision, Ficora TEAM PASS LIIGA PASS GAME PASS 29

FINANCIAL OVERVIEW - BONNIER BROADCASTING

FINANCIAL OVERVIEW

SEK in billions 0.3 0.4 0.6 7.5 2016 2017 Q1 2018 R12 7.4 7.4 Net sales EBIT 2016 2017 2018 R12 Q1 NET SALES 7.4 7.4 7.5

• TV4

4.2 4.4 4.4

• C MORE

1.5 1.6 1.6

• MTV

1.8 1.7 1.7

• OTHER

0.0

• 0.2
• 0.2

EBIT 0.2 0.4 0.6

• TV4

0.7 1.0 1.1

• C MORE
• 0.4
• 0.4
• 0.3
• MTV
• 0.1
• 0.3
• 0.3
• OTHER

0.0 0.0 0.0

FINANCIAL BREAKDOWN

SEK in billions

OPERATIONAL CASH FLOW

SEK in billions

• Scale and increased efficiency in content management lead to earnings growth

30 0.3 0.3 2016 2017 Q1 2018 R12

SLIDE 16

16

EBITDA SYNERGIES OF SEK 0.6BN IN 2022

• C More/TV4 Play upsell to

Telia customers

• OTT upsell to new

customers

• C More/TV4 Play upsell to

Telia customers

• OTT upsell to new

customers ENHANCING OUR CORE (SEK 350 MILLION) ENHANCING OUR CORE (SEK 350 MILLION)

• 5 ppt lower churn
• Proves significant potential

to take down SAC/SRC

• Monetize better on our

connectivity

• 5 ppt lower churn
• Proves significant potential

to take down SAC/SRC

• Monetize better on our

connectivity MORE OF CMORE/TV4 PLAY (SEK 150 MILLION) MORE OF CMORE/TV4 PLAY (SEK 150 MILLION)

• Content ownership -

flexibility for packaging

• State of the art user

experience

• Potential to monetize

premium service

• Content ownership -

flexibility for packaging

• State of the art user

experience

• Potential to monetize

premium service 31 Churn BB TV+BB

• 5ppt

COSTS (SEK 100 MILLION) COSTS (SEK 100 MILLION)

• Platform consolidation
• Reduce number of third

parties

• Consolidate systems
• Platform consolidation
• Reduce number of third

parties

• Consolidate systems

Common tech & development Insourcing Other ≈6.0 C More Telia

SIZEABLE SYNERGIES

S Y N E R G Y R U N - R A T E T A R G E T O F S E K 0 . 6 B I L L I O N I N 2 0 2 2 G R A D U A L I N C R E A S E I N S Y N E R G I E S 2 0 2 0 - 2 0 2 2

EBITDA SYNERGY DEVELOPMENT

In SEK billion, run-rate 32 2020 2021 2022

SEK 0.6 BILLION

SYNERGY RUN-RATE TARGET OF SEK 0.6 BILLION IN 2022 GRADUAL INCREASE IN SYNERGIES 2020-2022 GRADUAL INCREASE IN SYNERGIES 2020-2022 AGGREGATED INTEGRATION COSTS OF SEK 0.4 BILLION 2020-2021 AGGREGATED INTEGRATION COSTS OF SEK 0.4 BILLION 2020-2021

SLIDE 17

17

2017 (SEK BILLION)

TELIA COMPANY** BONNIER BROADCASTING FULL RUN-RATE SYNERGIES COMBINED PRO FORMA

79.8 7.4 n.a



>87.2 13.8 17.3% 0.4 5.2% 0.6



14.8 n.a 10.3 41.0% 0.4 82.4% 0.6



11.3 43.1% 33 Revenues Revenues EBIT (margin) EBIT (margin) EBITDA-CAPEX (cash conversion) EBITDA-CAPEX (cash conversion) *Telia definition ** Continuing operation, excluding GET/TDC Norway ***Post tax

FINANCIALLY ACCRETIVE TRANSACTION

2017 (SEK BILLION)

TELIA COMPANY** BONNIER BROADCASTING FULL RUN-RATE SYNERGIES*** COMBINED PRO FORMA

1.92 0.06 0.11



2.08 (+8.6%) 9.7 38.4% 0.3 66.2% 0.5



10.4 (+7.3%) 39.7% EPS (SEK) EPS (SEK) Op FCF* (cash conversion) Op FCF* (cash conversion)

PROCESS AHEAD

34 Phase 1 investigation Phase 1 investigation Potential phase 2 investigation Potential phase 2 investigation Phase 1 investigation Potential phase 2 investigation

ANNOUCEMENT & NOTIFICATION

• Telia announces intention to acquire

Bonnier Broadcasting

• EU Commission is notified and initiates

phase I investigation

PHASE 1 DECISION

• Following discussions, EU Commission

informs whether merger is cleared or phase II investigation is required

PHASE 2 DECISION

• EU Commission informs whether

merger is cleared and any potential remedies

SLIDE 18

18

GREAT VALUE CREATIVE COMBINATION

• Sizeable synergies
• Enhancing our core incl churn

reduction

• Improved market reach
• Common costs
• EV/EBIT of 7.7x including synergies
• Clear support for growing operational

free cash flow

• Sizeable synergies
• Enhancing our core incl churn

reduction

• Improved market reach
• Common costs
• EV/EBIT of 7.7x including synergies
• Clear support for growing operational

free cash flow STRONG STAND ALONE STRONG STAND ALONE

• Superior Total-TV position with great

domestic content

• Well positioned in shifting market
• Strong operational leverage
• New strategy yielding
• SEK 0.6 billion in cash flow contribution

by 2020 stand alone, SEK 0.5 billion net of synergies and integration costs.

• Superior Total-TV position with great

domestic content

• Well positioned in shifting market
• Strong operational leverage
• New strategy yielding
• SEK 0.6 billion in cash flow contribution

by 2020 stand alone, SEK 0.5 billion net of synergies and integration costs. SIZEABLE SYNERGIES SIZEABLE SYNERGIES

• Strong combination
• Improved converged offerings
• More personalized products and

services

• Leverage brands and existing customer

relations

• Strong combination
• Improved converged offerings
• More personalized products and

services

• Leverage brands and existing customer

relations CONVERGENCE BELIEVERS & CUSTOMER CHAMPIONS CONVERGENCE BELIEVERS & CUSTOMER CHAMPIONS

NO CHANGE TO CAPITAL ALLOCATION COMMITMENTS – DIVIDEND AND BUYBACKS

35

Q&A

SLIDE 19

19

EPS UP VERSUS LAST YEAR

TOTAL EPS DEVELOPMENT

SEK, continuing and discontinued operations * Excluding income from associates and adjustment items

• 0.07

0.50

• 0.01

0.18 0.28 0.10 Q2 18

• 0.13

M&A 0.15 M&A 0.00 Associated companies Q2 17 Operating income* Operations Other Other +0.57 CONTINUING OPERATIONS DISCONTINUED OPERATIONS 37 Q2 2017 impacted by write down in mainly Uzbekistan Q2 2017 impacted by write down in mainly Uzbekistan Q2 2017 impacted by the divestments of Turkcell and Sergel Q2 2017 impacted by the divestments of Turkcell and Sergel

FORWARD-LOOKING STATEMENTS

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

• utside the control of Telia Company.

38