INTERIM REPORT

JANUARY - JUNE 2016

Q2

JOHAN DENNELIND,

PRESIDENT & CEO

SOLID Q2 - STRONG FIRST HALF

Q2 2016 H1 2016

S E R V I C E R E V E N U E G R O W T H

Reported -1.2%

Organic -0.2%

Reported -0.9%

Organic -0.6%

E B I T D A * G R O W T H F R E E C A S H F L O W

Reported +4.1%

Organic +5.1%

SEK 1.8 billion

Reported +7.1%

Organic +7.6%

SEK 3.9 billion

*Excluding non-recurring items Continuing operations

2

CONTINUED EBITDA GROWTH - REVENUES STABLE

SERVICE REVENUES

Organic growth, external service revenues

Sweden

EBITDA

Organic growth, excluding non-recurring items

Continuing

Europe

Continuing operations

+0.9%

Sweden

2.0%

Europe

7.4%

operations

5.1%

-0.2%

-0.2%

Q2 15

Q3 15

Q4 15

Q1 16

Q2 16

Q2

Q2

Q2

Q2

Q2

Q2

15

16

15

16

15

16

  • Region Europe supported by growing mobile service revenues in almost all markets

  • Sweden impacted by lower fixed telephony revenues and pressure in B2B large segment

  • Lower EBITDA growth in Sweden, mainly due to less favourable y-o-y comparable

  • EBITDA growth in 6 of 7 markets in region Europe supported by mobile service revenue growth and cost control

    3

    MIXED REVENUE DEVELOPMENT IN SWEDEN

    SERVICE REVENUES BY SEGMENT

    Organic growth, external service revenues

    Incl. fiber installation revenues Excl. fiber installation revenues

    TELIA FIBER HOUSEHOLDS

    Telia passed, not connected Communication operator

    Telia connected (MDUs + SDUs)

    B2C

    +4.0%

    1.2 million

    1.4 million

    +1.6%

    Q2 15 Q2 16

    B2B

    -5.0%

    Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

  • B2C segment supported by revenue growth in broadband, TV and fiber installations

  • Still pressure in B2B despite positive development in SME/SoHo

  • 42,000 new connections in Q2 of which around 50 percent SDUs

  • SDUs passed now exceeds 550,000 of which close to 50 percent are connected

    4

    Service revenues

    Q2 16

    • Positive growth trend in B2C mobile ARPU

      offset by pressure in B2B

    • Price increases support TV ARPU

    • Broadband ARPU increase mainly driven by speed migration

    Q2 15 Q2 16

    Q2 15 Q2 16

    10 Mbit

    100 Mbit or >

    DSL Fiber

    60 Mbit

    30 Mbit

    10 Mbit

    Q2

    16

    Q2 Q2

    16 15

    15

    16

    VALUE LOADING IN SWEDEN

    B2C PRODUCT MONETIZATION

    % of total subscription base

    TOTAL ARPU DEVELOPMENT

    Growth y-o-y, B2C and B2B

    Mobile TV

    Mobile

    Fixed broadband

    TV

    13.3%

    Large

    12 GB or >

    Other

    Mid

    Start & other

    1.3%

    2.5%

    Q2 15 Q2 16

    Q2 15 Q2 16

    base base base base

    Q2

    15

    Q2 Q2

    base base base base

    5

    HIGHER EARNINGS IN FINLAND

    SERVICE REVENUES* & EBITDA**

    SEK million, reported currency

    MOBILE SERVICE REVENUES*

    Organic growth

    -0.8%

    2,769

    2,739

    Mobile billed service revenues

    Total mobile service revenues

    3.8%

    +1.9%

    0.8%

    978

    987

    Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

    Q2 15

    Q2 15 Q2 16

    EBITDA

    • Lower interconnect and fixed broadband

      revenues behind revenue decline

    • Growth in mobile billed service revenues and cost control contribute to EBITDA growth

    • Price increases and good data monetization

      in B2C support mobile billed service revenues

    • Network quality stabilized

    6

    = Organic growth

    * External service revenues **Excluding non-recurring items

    SOLID PERFORMANCE IN NORWAY

    SERVICE REVENUES* & EBITDA**

    SEK million, reported currency

    MOBILE SERVICE REVENUES*

    Organic growth

    -0.4%

    1,978

    1,807

    Mobile billed service revenues

    Total mobile service revenues

    3.8%

    +5.0%

    1.3%

    731

    705

    Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

    Q2 15

    Q2 15 Q2 16

    EBITDA

    • Positive growth in mobile billed service revenues

      was offset by lower interconnect revenues

    • Improved SARC spend and overall good cost control behind EBITDA improvement

    • Higher mobile billed service revenues

      following successful upsell activities

    • Telia awarded best 4G network in Norway's biggest independent test

    7

    = Organic growth

    * External service revenues **Excluding non-recurring items

    Q2 16

    Service revenues

    EARNINGS GROWTH IN THE BALTICS

    SERVICE REVENUES*

    Organic growth

    +4.6%

    +0.5%

    -3.2%

    EBITDA**

    SEK million

    +3.6%

    195205

    +13.9%

    281

    247

    +0.8%

    134 135

    Q2 15 Q3 15 Q4 15 Q1 16 Q2 16

    Estonia Lithuania Latvia

    Q2 15 Q2 16

    Estonia

    Q2 15 Q2 16

    Lithuania

    Q2 15 Q2 16

    Latvia

  • Growing demand for mobile data partly offset by lower roaming revenues

  • Challenging B2B segment in Latvia

  • Service revenue growth and cost control in Estonia and Lithuania behind improved EBITDA

* External service revenues = Organic growth ** Excluding non-recurring items

8

Telia Company AB published this content on 21 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 21 October 2016 05:08:02 UTC.

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