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Pre-Q1 2025 things to be aware of

(Fornebu, 18 March 2025) - Before entering our silent period on April 1, as a service to the equity analyst community, Telenor Investor Relations would like remind analysts about relevant factors to consider for the quarter. All items listed are in principle publicly known, e.g. through our quarterly earnings calls, published reports and press releases, local regulators’ announcements, news articles, websites, or publicly available offers. IR will conduct a sell-side call on March 19 (09.00 CET) going through these points, followed by optional individual Q&A calls with analysts over the following days.

High-level perspectives:

  • Nordics: Price increases continued to take place across the four markets Q1. Coming out of a campaign-heavy quarter, the Nordic B2C mobile market have observably been seasonally calmer in Q1.

  • Nordic transformation programme: As mentioned in the Q4 report, the initiatives are expected to result in a relatively flat opex reduction profile in Q1, with progressing efficiencies throughout the rest of the year.

  • In Bangladesh, the Metropolitan Chamber of Commerce and Industry (MCCI) pointed out that performances of economic indicators are mixed. See article: Economic Outlook For Bangladesh In 2024-25 | Economy shows signs of recovery but faces substantial hurdles

Norway

So far Q1, there has been an increasing marketing buzz from operators on anti-fraud and communication security, raising awareness in the public on this topic.

Portfolio adjustments
New (pre-Q1 25):

  • Mobile: From beginning of February 2025, Telenor launched an updated main brand portfolio. New security feature “Number alert” were added in all tariffs.

    • Front-book: prices for most of the subscription were increased by 20-40 NOK (3-6%).

    • Back-book: migration notified as of mid-March, taking effect in Q2.

  • Fixed (TV and Broadband):

    • Back-book: price increases for almost all existing customers. Average above-the-line price increases were 5% and 14% for SDU and MDU customers respectively. Local offers and retention discount may apply. Effect from March 1st.

Mentioned in previous quarters:

  • Q3 2024: From end-September, Telenor increased front-book prices across the main brand portfolio by 30 NOK (4% - 9%). Talkmore increased front-book prices by NOK20 (8-10% for the low end of the subscription range and 3-4% for the high end).

  • Q2 2024, back-book changes for a significant number of B2C customers on both brands in Norway was made on a more-for-more basis.

  • Q1 2024, March: New mobile portfolio with more value-added features launched.

  • Q1 2024, Feb – Apr: Fixed back-book prices (keep in mind that these are subject to targeted promotions, rebates and campaigns) increased by 8-9%

  • Q4 2023: Increased front-book prices for old mobile portfolio from beginning of the quarter.

Sweden

Portfolio adjustments
New (pre-Q1 25)
B2C

  • Front-book: 11-14% (30-50 SEK) price increase from mid February on the two lowest data buckets. Adding more data into the bucket, and adding a Spam shield to the security offering

  • Back-book: price increase for a small part of the portfolio, the unbound customers, on average 15% effective from April 2025

  • Extra-sim price increase 14% (+30 SEK)

  • Fighter brand Vimla updated portfolio from end of February. Main changes:

    • Improved security offering to all subscriptions, adding more data. New product: 0.5 GB to senior segment

    • Back-book: Migrating a majority of the base to higher price point with a gross increase of 10-15%. Keep in mind that such changes may effectively be subject to targeted promotions, rebates and campaigns

B2B

  • SME: Continued migration of small part of base to portfolio launched in Q4-24, back-book ARPU uplift around +20 SEK

Mentioned in previous quarters

  • Q4 24 B2B SME front-book price increases on the portfolio in the range of SEK 50-60 (10%-30%), with back-book price increases on a small part of the customer base.

  • Q2 2024: After termination of the Telenor main brand 35 GB subscription during Q2 some minor back book changes has been done to capture potential.

  • Q1 2024: Adjusted selective main-brand Telenor data bucket tariffs by 17% for (15 GB à 20 BG from SEK 299-349, and 5GB from SEK 229 à 269) (front-book).

  • Q1 2024: Main brand fixed broadband and Ownit brand: Raised front-book prices for open fibre with ~8% in February.

  • Q4 2023 – Q1 2024: Main brand TV front-book prices on one of the SDU TV-subscriptions were increased by 7% in November 2023, followed by back-book increases (affecting half of the TV-base) in February 2024.

Finland

Market commentary: use of gift vouchers continued, but less pronounced than in the previous quarter. Usage of gift vouchers in Finland has normalised with only a brief winter-holiday flare-up.

Portfolio adjustments:

New pre-Q1 25

  • Entry-level (10 Mbps) subscription increased by 3 EUR to 19.99 EUR

Mentioned pre-Q4 24

  • B2B monthly prices raised by 5-6% with effect from November and December 2024.

Mentioned pre-Q3 24:

  • B2C Fixed: increased price for add-on broadband speed for housing associations of approx. 2 EUR with effect from Q4 2024 (back-book).

Mentioned pre-Q2 24:

  • No changes in the main-brand front book.

  • Following general VAT increase in Finland (from 24% to 25.5%) – tariffs will be adjusted accordingly from 1st of September.

  • B2B: From March – May 2024 monthly price increases (4-5%)

  • B2C Fixed: increased price for add-on speed for housing association customers of approx. 2 EUR as of June 5 (front book).

Mentioned pre-Q1 24:

  • In B2C main brand, a new subscription; "DNA mini (10 Mbps)" (increased speed on the lowest price point) at a price of 20 EUR/month.

  • In B2B, fixed and mobile (DNA) prices will be increased with around 4-5% on a full-year basis. Both front and back-book increases will be completed through multiple rounds during the year. This is in line with what was done at the same time in 2023.

Mentioned pre-Q4 2023

  • B2C sub-brand: Price increase in November across the Moi portfolio of 3-4 EUR in conjunction with expansion from digital-only to physical distribution with S-Group, Finland’s largest grocery chain.

Denmark

In February, all security services in Denmark were gathered under one name: Telenor Security Package. This is included in all mobile and internet subscriptions and includes NetSikker, SikkerSurf and the brand-new SMS spam filter.

Portfolio adjustments:

New (pre-Q1 25)
Main brand:

  • Front-book price increase on B2C Mobile of 10 DKK for smartphone subscriptions and MBB subscriptions.

  • Back-book migrations: price increase of 10 DKK on ~80% of smartphone subscription base (465,000 subs) and a smaller part (~30% of base) of MBB

  • Fixed: price increase of 30 DKK on ~30% of base

Fighter brand CBB increased back-book prices with 10 DKK on small part of base (16%)

Mentioned pre-Q4 24

  • Main brand: From start of December, front-book mobile price increase of 10 DKK across all subscriptions. Back-book increase from with effect from January 2024 covering around one quarter of the mobile customer base.

Mentioned pre-Q2 24:

  • Telenor DK and CBB have increased price on a small number of legacy subscribers with avg. 10 DKK (legacy base which were not priced in Q1). Minor revenue impact.

Mentioned pre-Q1 24:

  • New more-for-more portfolios in B2C mobile with front book effects from November 2023 for our main brand, and from October 2023 for the CBB brand. Migration to new portfolio for existing customers initiated into the new year 2024.

Mentioned pre-Q4 23:

  • New more-for-more portfolio with front-book increases effective from end-November (both main brand and CBB)

Grameenphone

  • Leap year in February 2024; 1.1% headwind given the pre-paid nature of the business.

  • According to the BTRC, the number of mobile subscribers in Bangladesh fell by 1mn MoM in January and is now down close to 10mn from the June peak.

  • Despite this, Grameenphone increased by 60K subs in January, adding 2.2mn subs YOY.

Pakistan

  • Leap year in February 2024; 1.1% headwind given the pre-paid nature of the business.

  • According to the PTA, the number mobile subscribers in Pakistan increased by 1.2mn MoM in January

  • Telenor Pakistan lost 40K subs MoM in January according to the same statistic.

CelcomDigi

  • Interim dividend of 3.7 sen per share to be paid 27.03.25

  • Service revenue growth:

    • 2024 Outlook “flat to slight decrease” Actual FY24: -0.6%

    • Q4-24 growth was -0.6% YOY, +1.2% QoQ.

    • 2025 Outlook: Low single digit growth

  • Reported EBIT:

    • 2024 Outlook: “Low single digit decrease” Actual FY24: -13.4% Normalised: +4%

    • Q4: -17.5% YoY declined due to non-cash impairment and accelerated depreciation of ROU.

    • 2025 EBIT Outlook: Low-to-mid single digit growth. Excluding material non-recurring and extraordinary items for both FY2024 and FY2025

  • Capex intensity:

    • 2024 Outlook 15%-18%, Actual FY24: 18.7%

    • Q4 35.2% (Q3 12.3%)

    • 2025 Outlook 14%-16%

True Corporation

  • Dividend: Dividend consideration of more than 50% of consolidated net profit subject to approval of the Board of Directors. Will be considered in H2 2025.

  • Service revenue growth:

    • 2024 Outlook: 4-5% YoY, Actual FY24: 4.6%

    • Q4: +2.3% YoY, +0.2% QoQ

    • 2025 Outlook: Service revenue growth Excl. IC & Domestic roaming with NT +2-3%

  • EBITDA growth:

    • 2024 Outlook: 12-14%

    • Actual FY24 14.5%

    • Q4: +12% YoY, +1.0% QoQ

    • 2025 Outlook +8-10%

  • Capex

    • 2024 Outlook THB 30bn Actual FY24: THB 31 bn

    • 2025 outlook: (including integration capex) THB 28-30 bn

  • Net profit/(Loss):

    • Normalized profit Q4: THB 3.6 bn, FY24 THB 9.9 bn

    • 2025 Outlook Profitable (Reported)

  • Deleveraging progress: Q4-24: 4.2x

Amp

  • We have talked about the structural challenges for Linx (related to A2P messaging) for several quarters, which has affected Amp’s overall performance.

  • The Group CFO said on the recent earnings call that “while a few things went Amp’s way in Q4, it is not completely out of the woods yet”

  • He added that “we believe Amp will return to a more consistent growth from the second half of this year”.

Infrastructure

  • The trend for previous quarters has been lower energy contribution and declining legacy revenues, more than offsetting increasing external lease revenues.

Net financials, associates and balance sheet

Telenor’s bond debt was c64% fixed-rate and c36% variable-rate at the end of Q4 2024. In nominal terms, 54bn fixed and 30bn variable. The fixed rate was 2.5% in Q4 and floating rate was 3.9%; blended 2.9%.

  • Our financial debt is mainly in EUR, SEK, and USD in addition to some NOK. Depreciation of NOK will typically increase the FX element of financial costs, while appreciation will decrease financial costs.

  • FX sensitivity on net leverage: we estimate that 10% of NOK depreciation (against all currencies) would result in a net leverage increase of 0.1x after one year (when LTM EBITDA impact of the FX change has had full effect), while the immediate impact on leverage would be around 0.18x increase.

  • Associates. According to Telenor’s accounting policy, described in annual and quarterly reports, we must adjust for significant events for Associates we report with a quarter lag when being made aware of them.

    • After publication of Telenor’s Q4 report, both CelcomDigi and True have reported their full year of 2024. In the fourth quarter of 2024, CelcomDigi de-recognised several network site leases of a total of MYR 217 million, and True Corporation recognised a total of THB 11.1 billion in impairments, scrapping of PPE, a provision and one-offs to their associates.

    • As was the case last year, you can expect Telenor’s Audited Annual Accounts to contain Telenor’s share of these effects. These reduces the Group’s net income by NOK 0.8 billion compared to what was reported in Q4 2024.

    • As a consequence, as happened last year, our Q1 2025 report will contain one-quarter lagged numbers without these impairments and special items, since these items will be charged to our 2024 accounts in the 21 March Annual Report.

  • The effective tax rate for 2025 is estimated to be around 26%.

Net debt and cash flow items:

  • See comments in the FCF graph on p. 27 of the Q4 2024 presentation deck relating to seasonality, phasing and timing effects.

    • Net interest paid is seasonally high in Q4 and Q2, and low in Q1 and Q3.

    • Operating working capital: favourable timing effects in Q4, with 0.3bn of payments slipping into Q1 2025.

    • Capex paid is normally higher in Q1. Capex paid in Q4 ended up at NOK3.6bn, with a portion being pushed into Q1 2025.

    • Lease payments: while boosted by approx. 0.1bn timing effects (phasing from Q3) the Q4 2024 level can be viewed as a proxy to the average level we expect in 2025. Amounts will still vary between quarters.

  • Other comments we have made:

    • In Q4 2025 we will make the second instalment on the spectrum renewal from 2026 made in the Q3 2023 auction in Sweden (50% of Telenor’s 50% share of N4M price SEK 1,475 bn).

    • For Telenor Fiber AS, we normally pay dividends (including to the minority shareholders) in Q1 and Q3.

  • The BoD has proposed a dividend for 2024 of 9.60/share for approval at the upcoming AGM, with payments in June and October