TLSNF - Telia Company AB (publ) (TLSNF) Q1 2024 Earnings Call Transcript

2024-04-25 12:34:07 ET

Telia Company AB (publ) (TLSNF)

Q1 2024 Earnings Conference Call

April 25, 2024 3:30 AM ET

Company Participants

Erik Strandin Pers – Head-Investor Relations

Patrik Hofbauer – Chief Executive Officer

Eric Hageman – Chief Financial Officer

Conference Call Participants

Ondrej Cabejsek – UBS

Andrew Lee – Goldman Sachs

Maurice Patrick – Barclays

Andreas Joelsson – Carnegie

Stefan Gauffin – DNB

Jakob Bluestone – BNP Paribas Exane

Nick Lyall – Bernstein

Keval Khiroya – Deutsche Bank

Fredrik Lithell – SHB

Steve Malcolm – Redburn Atlantic

Usman Ghazi – Berenberg

Siyi He – Citi

Oscar Rönnkvist – ABG

Adam Fox-Rumley – HSBC

Presentation

Operator

Welcome, everybody, to Telia Company’s Q1 2024 Results Presentation. And with that, I will now hand you over to Telia Company’s Head of Investor Relations, Erik Strandin Pers. Go ahead, please, Erik, the floor is yours.

Erik Strandin Pers

Thank you, David, and welcome, everyone, to the call. We have, for the first time, our new CEO, Patrik Hofbauer; and our CFO, Eric Hageman, during this call this morning, and we will do the management presentation followed by a Q&A. As usual, I hand the floor to you, Patrick.

Patrik Hofbauer

Thank you, Erik, and good morning, everyone, and welcome to this Q1 presentation, which is the first Telia result presentation for me, as Erik just mentioned as well. Having started during the quarter, I have already met some of you live during March, and I’m very happy to be back in the Nordic telecom industry, as I previously been 11 years at Telenor. I spent much of my first approximately 80 days, meeting people in Telia and working intensively with our business leaders on our plans. And even though there is still plenty for me to learn about the company, I must say that I’m encouraged by what I’ve seen so far. And when it comes to Telia’s impressive, I would say, set of assets high level of competence and industry knowledge and desire to grow along with our customers. These things are all great prerequisites to build from.

Based on what I’ve seen and based on my perspectives of Telia as a competitor for many years, I also see improvement potential spanning several fields such as how we deliver our services, execute on our efficiency and investment agendas and how we deliver value to all our stakeholders. There is an opportunity to create faster and less and more efficient company at Telia. But let’s now look at the first quarter. And as you know, Telia has been on a transformative journey with focus on profitability growth, efficiencies and capital allocation. This focus will continue.

And the first quarter shows that we are on the track, the right track. There is a consistent solid growth in Telco and our TV and Media unit, which is still impacted by a weak advertising market, is seeing reductions in losses on the back of digital transformation and successful restructuring. We also continue to deliver better customer experience. This quarter, we, for instance, launched new self-service app in Lithuania, added new premium content to our TV product in Norway and saw record low volumes in the Swedish customer service. All of this appreciated by our customers, resulting in a continued positive trend for MPS and continued low mobile churn levels.

This, at the same time, as ARPUs continue to increase in most markets. As I said in the beginning, I’m impressed by Telia’s infrastructure asset and in the quarter we made further progress on 5G with especially Sweden accelerating the pace, moving up from 82% to almost 90% population coverage, while shutdowns of copper and 3G are on track, which is also important. So, all in all, we have started the year in line with our plans, and we can confirm the full year outlook.

So let’s look into the Q1 highlights. And as said, momentum in our Telco operations remain healthy with service revenue growing 2.7% and again, it was broad-based with growth in all markets as well in both mobile and fixed services. This quarter, consumer was the driving force with a 3.8% increase, whereas enterprise was neutral. The growth in service revenues also drove EBITDA growth of 2.1% despite the write-down overdue and receivables and pension refund phasing in Sweden. Without these items, Telco EBITDA would have grown about – around 4%. The performance in our Telco operation was further amplified by TV and Media improving, resulting in a 4.6% growth for the full group....

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