TELENOR GROUP Second quarter 2020 Sigve Brekke, CEO 1
Disclaimer The following presentation is being made only to, and is only This presentation contains statements regarding the future directed at, persons to whom such presentation may in connection with the Telenor Group’s growth initiatives, lawfully be communicated (’relevant persons’). Any person profit figures, outlook, strategies and objectives. In who is not a relevant person should not act or rely on this particular, the slide “Outlook for 2020” contains forward- presentation or any of its contents. Information in the looking statements regarding the Telenor Group’s following presentation relating to the price at which relevant expectations. All statements regarding the future are subject investments have been bought or sold in the past or the to inherent risks and uncertainties, and many factors can yield on such investments cannot be relied upon as a guide lead to actual profits and developments deviating to the future performance of such investments. substantially from what has been expressed or implied in such statements. This presentation does not constitute an offering of securities or otherwise constitute an invitation or The comments in the presentation are related to Telenor’s inducement to any person to underwrite, subscribe for or development in 2020 compared to the same quarter of otherwise acquire securities in any company within the 2019, unless otherwise stated. Telenor Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. 2
Highlights – Second quarter 2020 Customers’ and employees’ Strong performance in Norway, health and safety first launch of 5G ready price plans COVID-19 impact mitigated Data growth in Asia by lower cost and investments during lockdown Q2 2020 3
Norway moving towards the legacy free incumbent S&T Revenue growth Modernisation efficency 5G ready price plans Year on year change Opex year on year NOK m change NOK m* 193 Next launch Q2 19 2,068 Salaries and 28 130 Personell Sales, Marketing, 72 20 91 Commissions -7% 44 Maintanance 29 Other opex 69 Full freedom - unlimited data Fixed Fixed Mobile Mobile S&T future legacy domestic Roaming growth Q2 20 1,923 32k subscribers added on copper Opex reductions primarily driven Launch of unlimited data mobile by improvements in sales & offering with speed based tariff replacement products marketing, operations and Continued growth in adjacent salaries and personnel mobile services Q2 2020 *Underlying development adjusted for transfer of businesses between Telenor Norway and Other Units 4
Monetising on 5G in Finland S&T growth Solid EBITDA growth Rapid 5G build out Euro Euro Q2 Mobile subscription Mobile 78 and traffic revenue 2019 ARPU Mobile 4 +4% Handsets -2 Gross Profit +4% +3% 125 120 Fixed -1 17 16 Opex 1 Q2 80 2020 Q2 19 Q2 20 Q2 19 Q2 20 5G contributing to ARPU uplift Mobile subscription and traffic EBITDA driven by mobile S&T revenue growth driven by high growth, lover handset sales and 5G services offered in 20 cities speed postpaid subs and lower opex upselling. FWA pilots on 5G in Helsinki Q2 20 5
COVID-19 impact peak in April, gradual recovery from May Organic subs & traffic revenue growth (%) Key developments Roaming revenue drop across portfolio. Tourist sim Physical stores Lock- Physical stores Reopening impacting dtac down running at at ~80 % ~50 % 6.0 % Reduced physical transactions, handset 3.0 % revenues and new sales. 0.0 % -3.0 % -6.0 % Prepaid markets in Asia influenced by -9.0 % lockdowns in April and May. Still exposed -12.0 % to uncertainty regarding duration. Jan/Feb March April May June Developed Asia Emerging Asia Estimated total EBITDA effect in H1 of Development mainly driven by emerging Asia and 1bn , of which 80 % in Asia. closing of physical stores in April. Relatively stable in developed Asia, the latter driven by a higher post-paid share. 1 Q2 2020 1. Postpaid revenue share around 60 % of subs and traffic revenue in developed Asia (Thailand and Malaysia) 6
Operating model providing flexibility Selective centralisation Network/ Cost agenda Spectrum -12% -4% Organic S&T OPEX revenues Capex Org. Procurement prioritisation re-design Q2 2020 7 *Opex reduction: FX adjusted and excluding DNA
Importance of strategic direction confirmed by COVID-19 Responsible Growth Modernisation business Q2 2020 8
Accelerating data growth in Asia during lockdown Growth Continuous growth in data usage Tremendous data volume growth Accelerating digital recharge Thousand TB per day Digital recharge growth Average data usage (GB) (post lockdown growth) 1 +59% 26 20 +20% 15 24 +48% +36% 10 22 +46% 5 20 Bangladesh Pakistan 0 0 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Jan-20 Feb March April May June dtac, Digi Emerging Asia Accelerated modernisation through Data volume increasing from a larger Continued increased network traffic continued recharge growth across from increased consumption in Asia subscriber base and voice to data digital channels since lockdown transition Q2 2020 9 1. February to May 2020
Delivering critical services and taking part in the effort Responsible business Care for our customers Care for our employees Supporting society Network NPS +13% 25 25 22 Q4 19 Q1 20 Q2 20 High quality network: Improved Facilitating for home offices Donations to COVID-19 relief network NPS programmes Care packages to employees Free GB and minutes in Asia Free online education for the Increased training on security unemployed Established alternative distribution channels Cooperation with government on disease spread tracking Q2 2020 10
Utilising COVID-19 learning to accelerate modernisation Modernisation Accelerate organisational Digitisation of customer Accelerate touch-free modernisation interactions operations Accelerate and scale zero-touch Radically simplify organisation Accelerate customer sales and and operating model service interactions to digital operations across network and service areas in all business units Shift to flexible working model Will be driven by the Asian and Nordic Hub set-up Q2 2020 11
TELENOR GROUP Second quarter 2020 Tone Hegland Bachke, CFO 12
Q2 results confirm cash flow resilience 4bn -12% +1% -4% Organic S&T Organic Free Cash OPEX revenues EBITDA Flow Q2 2020 13 *Opex reduction: FX adjusted and excluding DNA
COVID-19 impacting top-line, gradual recovery from May. Total revenues (NOK bn) Organic S&T revenue growth (%) Percentage points contribution to growth 1.8 31.7 31.0 30.9 28.4 26.9 Nordics Digi, dtac Emerging Asia -3.6 Q1 20 April May June Q2 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Development mainly driven by emerging Asia. Reported revenues increased by 15%, primarily Relatively stable in Nordics and developed Asia. from inclusion of DNA (Finland) and FX Gradual improvement throughout Q2. Organic S&T revenues decreased by -3.6% Organic growth rate. Subscription & traffic revenues defined as revenues from mobile subscription & traffic, fixed internet & TV, retail telephony and data services Q2 2020 14
Strong development within fixed future despite COVID-19 headwind Organic subs & traffic revenue growth per country Percentage points contribution to growth 0.6 0.9 0.1 0.6 1.4 0.8 3.6 0.7 0.7 1.0 0.5 0.2 Myanmar Norway Fixed fibre Fixed Bangladesh Thailand Sweden Pakistan Malaysia Denmark Q2 20 Of which mobile & FWA legacy Roaming (Nor) (Nor) (%) Organic growth rate. Subscription & traffic revenues defined as revenues from mobile subscription & traffic, fixed internet & TV, retail telephony and data services Q2 2020 15
Strong opex reduction of 12% in Q2 driven by sales and marketing Opex by category (NOK m)* Opex by country (NOK m)* -12% 9,319 Salaries and -128 9,196 Personnel one-off 336 Q2 19 Sales, Marketing, 52 -667 -331 -336 Commissions -388 209 one-off 975 Q2 19 Operation and 145 28 87 Maintenance 62 60 19 6 8,221 122 Energy -24 Other opex -307 Group -1,098 ex. DNA Q2 19 Grameen- dtac Norway** Pakistan Sweden Digi Denmark Myanmar Other Q2 20 DNA Q2 20 phone ex. DNA * FX adjusted Q2 2020 **Underlying development adjusted for transfer of businesses between Telenor Norway and Other Units 16
Organic EBITDA growth of 1 % despite top-line pressure 0.0 0.3 0.2 0.7 1.1 0.8 1.4 1.0 1.1 0.9 Thailand Myanmar Norway* Bangladesh Pakistan Denmark Sweden Malaysia Other Q2 20 Percentage points contribution to growth Q2 2020 *Underlying development adjusted for transfer of businesses between Telenor Norway and Other Units 17
Net income to equity holders of NOK 4.4 billion NOK billion 1.97 3.14 0.4 1.5 1.2 ESA fine 0.6 DNA 4.4 2.3 1.2 1.2 2.9 Q2 2019 EBITDA before Depreciation and Net financials Profit from Remaining Q2 2020 other items amortisation discontinued operations Earnings per share Q2 2020 18
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