Year-end REPORT JANUARY – december 2019...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

CHRISTIAN LUIGA president & CEO

Douglas lubbeCFO

Year-end REPORT JANUARY – december 2019 Q4

CASH FLOW AND EBITDA GROWTH FROM LOWER COST

OPERATIONAL FREE CASH FLOW

SWEDEN OPEX REDUCTIONGROUP OPEX REDUCTION

4%

Q1 19 Q2 19 Q3 19 Q4 19

12.6BN*

EBITDA DEVELOPMENT

~2%

Q1 Q2 Q3 Q412-12.5BN ✔ ✔

✔

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

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

SERVICE REVENUE DEVELOPMENT*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

Adjusted EBITDA DEVELOPMENT*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

NEW AND UNIQUE PLAYER IN THE NORDIC MEDIA SPACE

4

Synergies of SEK 0.6 billion by end 2022

Operational free cash flowof SEK 0.5 billion 2020

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

Committed to reach and availability Ott rights treated in line with commitments

• 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 on market leading

reach

Content availability for all

guaranteed

5

2019 WAS A RECORD YEAR FOR TV & MEDIA

8.2 8.7

1.2 1.5

2018 2019 2020e 2018 2019 2020eNet sales EBITDA

Net sales & EBITDA (2020 illustrative)SEK billion in reported currency, external net sales & adjusted EBITDA

* PUT=People Using TV, CSOV=Commercial Share Of Viewing

KEY OPERATIONAL HIGHLIGHTS 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

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

Market improved albeit still challenging• Growing in a continuously challenging market• Leading CSOV market position maintained

Significant growth in subscriptions• 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

Sweden B2C mobile back to growth

Postpaid arpu - B2CPostpaid ARPU B2C excluding VAS

Mobile Subscription revenues - b2cLike for like growth

• ARPU growth due to rise in subscription fees

• Top-ups headwind faded, pressure from IDD* remained

Q4 18 OtherSubscription fees

IDD* Q4 19Top-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

-1.3%

Improved B2b 2019 vs 2018

B2B service revenue GROWTH – group/SwedenOrganic 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

ICT AND IOT INCREASINGLY COMPENSATING LEGACY

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%

FULL YEAR 2019 OPEX TARGET REALIZED

OPEX developmentExternal 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 year2019

• 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 key efficiency drivers

• 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 Services9

1,700FROM

COUNTRIES

3,300RESOURSES

IN CPS now

MOVED TO

NOK 220 million

run-rAte

NOK 350 MILLION

END 2022

300 RESOURCES

END 2018

500 RESOURCES

END 2019

PROPOSING A 3.8 PERCENT DIVIDEND INCREASE

2.002.30 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 companiesOperational free cash flow (2019 adjusted for pension*)

115% 80% 84% 80%

Dividend base and pay-out ratiosSEK billion and pay-out ratios

* Adjusted for SEK 0.4 billion pension refund in Q4 201910

SEK 12.9 billion reported 2019SEK 12.5 billion adjusted for pension refund*

0.4

12.2*

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 of 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 2019message

Current status

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 GOALS2030

OUTLOOK FOR 2020

SEK 10.5-11.5 BILLIONO P E R A T I O N A L F C F *

TO GROW BETWEEN 2-5% COMPARED TO 2019A D J U S T E D E B I T D A *

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

Douglas lubbeCFO

Year-end REPORT JANUARY – december 2019 Q4

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

OtherSWEQ4 18 FIN NOR DEN LIT EST LAT Telia Carrier

Q4 2019

-1.7%

FIN NOR DEN Q4 2019

ESTQ4 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

SERVICE REVENUE DEVELOPMENTLike for like growth, external service revenues

EBITDA DEVELOPMENTLike for like growth, excluding adjustment items and IFRS 16

15

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

SERVICE REVENUE DEVELOPMENTReported 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

Adjusted EBITDA DEVELOPMENT*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 figure16

9%Pension refund and easy comparison

REVENUE MIX PRESSURING EBITDA DEVELOPMENT

3,324 3,412

1,136 1,254

Q4 18 Q4 19 Q4 18 Q4 19Service 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

SERVICE REVENUES & ADJUSTED EBITDASEK 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

MOBILE SUBSCRIPTIONS AND postpaid ARPUTotal subscription base in 000’, postpaid ARPU in local currency

17

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

SERVICE REVENUES & ADJUSTED EBITDASEK million in reported currency & like for like growth excl. IFRS 16

service REVenues - BB/TV & full B2B segmentSEK million, like for like, external service revenues

= Like for like growth excl. IFRS 16

Service revenues EBITDA 0

300

600

900

Q4 18 Q4 19

TV Broadband

+1.0%

0

200

400

600

800

Q4 18 Q4 19

B2B

-2.3%

18

-5%Y-o-y

+10%Y-o-y

324379

233280

237295

Q4 18 Q1 19 Q2 19 Q3 19 Q4 19

Estonia Lithuania Denmark

Q4 18 Q4 19Estonia

Q4 18 Q4 19Denmark

+9%

Q4 18 Q4 19Lithuania

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

SERVICE REVENUE DEVELOPMENTLike for like growth, external service revenues

Adjusted EBITDA DEVELOPMENTSEK million in reported currency & like for like growth excl. IFRS 16

= Like for like growth excl. IFRS 1619

operational free Cash FLOW grew 16 percent 2019

02468

101214

Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19

OPERATIONAL FREE CASH FLOW developmentSEK billion, rolling twelve months

SEK 12.6 billion

OPERATIONAL FREE CASH FLOW 2019SEK billion, rolling twelve months

• As expected operational free cash flow came down Q4 as WC swung back

EBITDA less

leasing*

WC2018

-0.112.61.8

-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 liabilities20

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

3.91.5

4.9

9.2

DividendCashCAPEX

88.1

Buy-backs

-5.6

Q3 19

75.4

Operations Other

-1.2

Q4 19Bonnier Broadcasting

2.50x

2.71x

= Leverage ratio (multiple, rolling 12 months including a full 12 months of Get/TDC Norway and Bonnier Broadcasting)

NET DEBT DEVELOPMENTContinuing and discontinued operations, SEK billion, and leverage ratio

21

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 I O N A L F R E E C A S H F L O W

2 0 2 0

S E K 1 0 . 5 - 1 1 . 5 B I L L I O N

Q&A

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 alwayscomparable 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