Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Telia Company AB (TLSNF, Financial) reported a 2.6% growth in service revenue, with consumer segments driving a 2.9% increase.
- EBITDA grew by 5.3% for the group, supported by higher service revenue and improved cost management.
- The company successfully reduced leverage from 2.43 times to 2.21 times, aided by EBITDA growth and proceeds from the Danish transaction.
- Telia's TV and media segment showed improvement, with digital advertising growing over 25% and non-advertising revenue increasing by 3%.
- The company confirmed its full-year outlook across all metrics, indicating confidence in its financial performance.
Negative Points
- Service revenue growth in Finland was neutral, with mobile growth offset by declines in fixed revenues and regulatory changes.
- Norway's service revenue growth slowed, partly due to a 3% reduction in fixed services and removal of certain fees.
- The company expects temporarily slower EBITDA growth in some markets in Q3, with a tough comparison to the previous year's strong performance.
- Telia's mobile ARPU in Norway remained flat due to pricing effects being offset by a higher share of large customers with lower ARPU.
- The Finnish market saw a decline in the mobile subscriber base by 16,000, focusing on value and ARPU rather than volume.
Q & A Highlights
Q: Can you clarify the cash flow outlook, particularly regarding interest payments and structural operational free cash flow?
A: We guided for roughly SEK1 billion more in interest payments than in 2023, and we still see that as the right number for the year. Interest payments are slightly more H1 than H2 weighted. We expect to be towards the lower end of the SEK7 billion to SEK8 billion range for structural operational free cash flow, driven by performance in Norway and Finland.
Q: Could you describe the pricing situation in various markets and products, and your ability to increase ARPU?
A: We see softer development in pricing this year but believe there is still an opportunity to steer pricing in all markets. Customers expect better, more secure services, which need to be priced accordingly. However, we don't have the inflationary backdrop we had in the past.
Q: What is the impact of not renewing the UEFA Champions League on your TV business, and how does it affect costs?
A: We will see significantly lower content costs from Q4 onwards due to not renewing the UEFA Champions League. We have an agreement with Viaplay to include the content in our sports packages, so the impact should be limited.
Q: Can you provide an update on your 5G network deployment across major markets?
A: We have achieved more than 90% population coverage in our territory, indicating significant progress in our 5G deployment.
Q: How do you view the corporate spending outlook in the Nordics, particularly in Sweden?
A: We don't see macroeconomic factors significantly impacting our B2B market. Instead, competition, especially aggressive pricing in public tenders, has been more impactful. We are focusing on resilient and secure networks for large accounts, which we believe will be priced in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
