Important milestones achieved during the quarter

The third quarter was an important milestone for us in Thailand, as the concession model came to an end. We are very pleased how the transition to the licence model has been executed, removing uncertainty and securing significant access to spectrum and infrastructure. We now have a solid platform to deliver superior data services to our customers and create value in the growing Thai market.

In Norway, network quality is key to our customers and we are proud to have the world’s fastest mobile network. Our mobile customer base grew for the first time in three years and in addition, we continued to expand our fibre network and connected close to 9,000 households during the quarter.

In both Pakistan and Bangladesh revenue trends improved, while competition in Myanmar intensified following the entrance of a fourth mobile operator.

We also successfully completed the sale of our operations in Central and Eastern Europe and will continue to drive our transformation forward with a clear focus on growth, efficiency and simplification. Our achievements so far this year confirm the organisation’s strength and our ability to execute across the company,” said Sigve Brekke, Chief Executive Officer of Telenor Group.

KEY FIGURES

NOK (in millions)	Q3 2018	Q3 2017	First 3 quarters 2018	First 3 quarters 2017	Year 2017	First 3 quarters 2018 (IFRS 15)
Revenues	27 628	27 463	82 225	83 390	112 069	82 219
Organic revenue growth (%)	0.6	0.8	-0.6	0.9	0.5
Subscription and traffic revenues	21 497	21 460	64 099	64 603	86 314	63 709
Organic subscription and traffic revenue growth (%)	0.2	2.9	0.5	2.3	2.4
EBITDA before other income and other expenses	12 373	11 771	34 981	33 881	44 694	35 087
Organic EBITDA growth (%)	5.6	10.1	5.2	8.4	9.0
EBITDA before other income and other expenses/Revenues (%)	44.8	42.9	42.5	40.6	39.9	42.7
Net income attributable to equity holders of Telenor ASA	5 807	5 756	13 448	9 758	11 983	13 518
Capex excl. licences and spectrum/Revenues (%)	15.3	13.0	13.0	14.5	15.4	13.0
Capex/Revenues (%)	15.5	17.2	15.4	17.4	18.1	15.4
Free cash flow	26 543	9 426	32 130	21 539	24 867	32 130
Mobile subscriptions - Change in quarter/Total (mill.)	0.7	1.9	173	166	168	173

Third quarter 2018 summary

• On an organic basis, subscription and traffic revenues were stable, while total revenues increased by 1%. Total reported revenues were NOK 27.6 billion, which is an increase of 1%.


• Reported opex continued to decrease by NOK 0.3 billion or 3%.


• EBITDA before other items was NOK 12.4 billion with an EBITDA margin of 45%, or 2 percentage points above last year. Organic EBITDA growth was 6%, positively impacted by reversal of provisions.


• Net income attributable to equity holders of Telenor ASA was NOK 5.8 billion, or NOK 3.96 per share.


• Capex excluding licences and spectrum was NOK 4.2 billion, resulting in a capex to sales ratio of 15%.


• Free cash flow for the quarter was NOK 26.5 billion following the divestment of our assets in Central and Eastern Europe.

Shareholder remuneration

• In September, Telenor resolved to pay out a special dividend of NOK 4.40 per share following the divestment of our assets in Central and Eastern Europe. The dividend was paid out in October, returning a total of NOK 6.4 billion to shareholders.


• In addition, Telenor bought back 7.7 million shares during the quarter and is well on track to finalise the market purchases of the 2% buyback programme before year end. In combination with the ordinary and special dividend, the buyback programme approved by the General Assembly on 2 May 2018 will return a total of close to NOK 23 billion to shareholders in 2018.

Outlook

• For 2018, we adjust our expectations to an organic subscription and traffic revenue growth of 0-1%, an organic EBITDA growth of 3-4% and capex excluding licences and spectrum of NOK 16-17 billion.