Telia (TELIA) Investor Update summary

Strategic priorities and organizational transformation

• Announced a radical simplification and decentralization of the operating model, shifting decision-making and accountability closer to local markets and customers, with a reduction of 3,000 central roles, aiming to halve central headcount and save SEK 2.6 billion annually (SEK 2.3 billion OpEx, SEK 0.3 billion CapEx).

• Focused on three pillars: simplify (reduce complexity and streamline operations), innovate (incremental and core-adjacent innovation, including AI and 5G programs), and growth (deepening customer relationships, value-based pricing, and targeting mission-critical services).

• Emphasized execution as the key to success, with a new performance-driven culture and clear KPIs for local management, including revenue, EBITDA, cash flow, and CapEx efficiency.

• Accelerated the change program to be completed by December 1st, 2024, to minimize uncertainty and enable faster execution.

• Product and IT portfolio simplification to reduce complexity and accelerate time to market.

Financial targets and capital allocation

• Set ambitious targets for 2025–2027: 2% annual service revenue growth, 4% EBITDA CAGR, and at least SEK 10 billion in free cash flow by 2027.

• CapEx to remain below SEK 14 billion per year, with declining intensity as 5G and fiber rollouts conclude and focus shifts to lifecycle management and selective upgrades.

• Dividend to be covered by free cash flow from 2025, with a policy to progressively grow dividends and return excess cash to shareholders, subject to board approval.

• Portfolio optimization to continue, with a pragmatic approach to asset ownership and potential divestments, prioritizing core telco operations in the Nordics and Baltics.

• Leverage target range of 2.0-2.5x, with plans to reduce vendor financing by 50% in H2 2024.

Market and operational outlook

• Sweden, the largest market, is in turnaround, with copper headwinds fading, strong network leadership, and a focus on deepening customer relationships and recurring value-based pricing.

• Norway and Finland to focus on strengthening fixed and mobile positions, leveraging partnerships for fiber, and improving operational quality and market share.

• Lithuania and Estonia to maintain strong performance, expand in ICT and cybersecurity, and further digitalize customer offerings.

• TV and media business targets SEK 1 billion EBITDA by 2025, driven by digital transformation, content cost discipline, and streaming growth.

• Monetization of legacy assets and technical buildings to support cash flow and efficiency.