Telenor (TEL) Q3 2024 earnings summary

Executive summary

• Group service revenues grew 2.1% organically in Q3 2024, with EBITDA up 1.8% and free cash flow before M&A at NOK 2.8 billion, driven by strong Nordic performance and offset by macro and political headwinds in Bangladesh.

• Transformation programs in the Nordics are progressing, delivering OPEX reductions, operating leverage, and positive net subscriber additions across all countries.

• Asia operations saw mixed results: True in Thailand realized strong post-merger synergies, Pakistan returned to growth, but Grameenphone in Bangladesh faced significant disruptions.

• Free cash flow guidance for 2024 was tightened to NOK 9.5–10.0 billion, with the outlook for Nordic service revenue and EBITDA growth revised upward.

• CEO transition announced, with Sigve Brekke stepping down after 37 quarters.

Financial highlights

• Q3 2024 group service revenues were NOK 16.2 billion (+2.3% YoY), EBITDA before other items NOK 9.2 billion (+1.8% organic), and net income NOK 3.3–3.6 billion, with EPS at NOK 2.39.

• Free cash flow before M&A was NOK 2.8 billion in Q3, totaling NOK 8.3 billion year-to-date; including M&A, year-to-date free cash flow is NOK 10.3 billion.

• CapEx to sales ratio was 14–14.1% in Q3, slightly below expectations.

• Net interest-bearing debt at quarter-end was NOK 83.5 billion, with a leverage ratio of 2.2–2.3x.

• Return on capital employed (LTM) was 8–11%.

Outlook and guidance

• 2024 Nordic service revenue growth outlook narrowed to 3–4%, with organic EBITDA growth expected around 6%.

• Group organic EBITDA growth for 2024 guided at 3–4%, revised from mid-single digits due to Bangladesh headwinds.

• CapEx to sales expected slightly below 17% for 2024.

• Free cash flow before M&A for 2024 guided at NOK 9.5–10.0 billion.

• OPEX reductions and transformation initiatives are expected to continue in Q4 and 2025.