Telenor ASA Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ondrej Cabejsek - UBS - Analyst : Hi, everyone. Good morning. I hope that you can hear me. Good. Hi. So, first of all, congratulations to Sigve on your successful time at Telenor. It was great to have all the conversations with you. Thank you. Good luck in the future. And then I guess my biggest question relates to Bangladesh, obviously. So, first of all, you reiterate the 2025 guidance, which obviously I guess includes the impact from Bangladesh. I just want to ask about some of the mitigating factors because obviously this is the biggest unit in Asia. So how are you bridging any gap that you might have in '25 from the previous plans? And just to zoom in on the recovery, I just wanted to clarify that you said you expect maybe one year to get back to growth. So does this, I wouldn't understand if I make sure that I understood correctly. So you mean we're seeing a step down that's going to last for a year and only freak Q3 '25 we're going to get back to kind of the same to your growth rates or how do you see the shape of the recovery basically in Bangladesh is the question? Thank you.

Question: Ondrej Cabejsek - UBS - Analyst : Great. Thank you for, for clarifying that. And within that guidance for 2025 to cover the dividend, how is the Asia NOK5 billion looking in in the light of Bangladesh if I may one follow up, please?

Question: Ondrej Cabejsek - UBS - Analyst : Thank you very much.

Question: Christoffer Wang Bjornsen - DNB - Analyst : Good morning. Can you hear me?

Question: Christoffer Wang Bjornsen - DNB - Analyst : Great. Thanks for letting me know and congrats on the great quarter. So, you know, in light of the, the lower CapEx than expected and, and, and you guys lowering your, your, your guidance for the current year. I was just wondering if you could give some color on your thoughts on the fixed broadband space in Norway. We just from so from the numbers from ENCOM, that you're seeing more losses on the cable side, and you're adding on the fibre and fixed wireless. So how are you thinking about the competitive dynamics there? Do you think that you will increase investments there to make sure that you maintain your, core customers as competitors are going after them? So that's just the first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 8:00AM, TEL.OL - Q3 2024 Telenor ASA Earnings Call

Question: Christoffer Wang Bjornsen - DNB - Analyst : Great, thanks. And then the follow up on True. So stellar numbers from True last week. It seems based on the accelerated the write downs of the sites that they're going to turn profitable on a reported basis earlier than previously expected. Can you give just some reflections on how comfortable you are as a share with their debt levels, compared to your target range for the group. And what you think about dividends there as they turn profitable? Do you think they will be capped by reporting net profit? Do you see that they can pay more? I guess that's my question.

Question: Christoffer Wang Bjornsen - DNB - Analyst : Any chance you can share, how much dividend you're making into your ambition to cover your dividend with free cash flow next year. How much of that is due to increased?

Question: Christoffer Wang Bjornsen - DNB - Analyst : Thanks a lot.

Question: Andrew Lee - Goldman Sachs - Analyst : Yeah, good morning, everyone. Just had a question just in terms of your reflection Sigve, obviously been heading up the up the company for some time. And if we think about the growth guidance you've given for the Nordics in the midterm at 5% EBITDA growth. And for this year, you know, raising it to 6% obviously, that's a lot higher than we've seen European Telcos deliver over a number of years and higher than Telenos delivered consistently over the years. So I wonder if you could just give us your thoughts in terms of your confidence levels in the ability for Telenor Nordics to deliver sustainably in that degree of growth, both from a top line and the cost efficiency perspective, where you're most confident in that kind of structural growth outlook? And then I guess a slightly less exciting follow up question would just be on your guidance increase on free cash flow today. I think that partly reflects that you don't anticipate the late payment fees in Bangladesh realizing during 2024. So, is it unfair to say that the guidance raise for the full year is basically purely down to that? Obviously, your CapEx is lower, but then your EBITDA for the group is low as well. It would just be good to get your reflections on that. Thank you.

Question: Andrew Lee - Goldman Sachs - Analyst : That's very clear. Thanks, Sigve and best of luck for the future.

Question: Siyi He - Citi - Analyst : Hello. Hi, good morning. Thank you for taking my questions. Actually, my question is maybe a follow up for Andrew's question earlier but more zooming into Norway, I think at the beginning of the year when you give the guidance, and you talk about Norway could be flattish in terms of the EBITDA. But then we look at the last three quarters and you grow about 3%-4%. Just wondering if you can elaborate on why, you think that Norway actually turns out better with. I mean, given that OpEx hasn't really seen much of a reduction yet. And also on the top line, the Norway mobile has growing quite significantly, and I can understand that is backed up by the price increases. But now in the low inflation environment, do you think that with the help of value-added services that you can still maintain that mobile app growth to the high level? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 8:00AM, TEL.OL - Q3 2024 Telenor ASA Earnings Call

Question: Siyi He - Citi - Analyst : Thank you very much. That's very clear.

Question: Keval Khiroya - Deutsche Bank - Analyst : Thank you. You've signed a new ICE agreement in Norway which also foresees ICE from migrating traffic to its own network over time. So how do you think the mobile competitive environment will evolve as ICE first gets access to your own premium network and then migrates to its own network over time as well? Thank you.

Question: Keval Khiroya - Deutsche Bank - Analyst : And, just by way of follow up, may I ask on Nordic pricing where you've obviously highlighted very positive prospects and price rises? How do we think about the benefits of Nordic price rises on the 2025 P&L compared to 2024? Because obviously perhaps the negative, you've got less support from inflation but to the positive, it turns out all of the Nordic rates are very positive on the extent of price rise. So what how do we think about the overall level of price rise support next year versus this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 8:00AM, TEL.OL - Q3 2024 Telenor ASA Earnings Call

Question: Keval Khiroya - Deutsche Bank - Analyst : Thank you.

Question: Ajay Soni - JP Morgan - Analyst : Hi there. Thanks for taking my question. Mine was just on the free cash flow guidance. So obviously at the beginning of the year, you guided to NOK9 billion to NOK10 billion. I mean, since then you've had headwinds from, let's say the dividend leakage as well as the sociopolitical impact in Bangladesh. If I consider these headwinds, they're probably about NOK1 billion. So, what's really driven that free cash, free cash flow upgrade today? And then will these drivers be the be the things that help you achieve your 2025 guidance of covering your dividend or is there anything else that we need to consider? Thank you.

Question: Ajay Soni - JP Morgan - Analyst : That's helpful. Can I just have one follow up, which is just around that EBITDA step up that you're expecting. So obviously, this quarter we saw in the Nordics, the EBITDA grow faster than your service revenue and obviously, with the lower OpEx. Do you think we can expect this trend to continue in the coming quarters and into 2025? While your EBITDA is going to be growing significantly faster than your service revenue? Thank you.

Question: Ajay Soni - JP Morgan - Analyst : Great, very helpful. Thank you.

Question: Adam Fox-Rumley - HSBC - Analyst : Thank you very much. Sigve, you're one of the longest serving CEOs in the sector in a company that's probably got the most complex macro political backdrops, in Europe, certainly. The senior management team and the board on the other hand, are some of the newest in the market. So, I wondered in light of losing your experience in due course, if there are any organizational or oversight changes that are being considered by the senior management team or by the board to ensure there's no gap in knowledge as you move on to do other things. And then my follow up, I just wondered if you could talk a little bit more about the CapEx on the spend in Norway. I don't think you gave any specifics there, but it would be helpful to know a little bit about what hasn't been spent and then kind of what is still to do for the rest of the year. Thank you.

Question: Adam Fox-Rumley - HSBC - Analyst : Okay, thanks very much.

Question: Felix Henriksson - Nordia Securities - Analyst : Hi, guys. Thanks for taking my question. It's been a bit more than two years now since your latest Capital Market Day where you stated the potential ambition to bring on partners for minority stakes in your power to business. So, I just wanted to revisit your thinking on how you currently think about this this project. Thanks.

Question: Felix Henriksson - Nordia Securities - Analyst : Towers.

Question: Felix Henriksson - Nordia Securities - Analyst : Right. And then I have a follow up if I may relate it to Norway, where you were able to reverse the negative trend in mobile subscriber net ads. So, could you just elaborate a bit on what drove the positive net development in mobile in Norway? And how do you see the competitive trends into October and the fourth quarter of the year? Thanks.

Question: Oystein Lodgaard - ABG Sundal Collier - Analyst : Good morning. I was wondering on the OpEx side, you had some pretty ambitious numbers that you presented on the Q2 presentation about how many employees you expect to reduce going forward. Can you say something about the timing of this are the concrete initiatives now already in place that could have an impact from the beginning of 2025 or is this more from 2026 and onwards?

Question: Oystein Lodgaard - ABG Sundal Collier - Analyst : Okay. Thank you. And, and I follow on, on the CapEx. You said there could be some, some payments or something that would slip to 2025 you have from previously had a very concrete CapEx guiding for '25 NOK2 billion, less than in 2022. hHow will that potentially impact that guiding for 2025 if some CapEx slips over to '25 from '24?

Question: Oystein Lodgaard - ABG Sundal Collier - Analyst : Okay. Thank you very much.

Question: Usman Ghazi - Berenberg - Analyst : Hi, everyone. Thank you for the opportunity Sigve I just wanted to wish you the best in your future and future plans. I have kind of two questions but I'll see how it goes one was a big picture Sigve, I mean, I think one of the kind of big unfinished projects, you know, while your time in CEO has been this prospect of a nation carve out. And I just wanted to understand if the new management, also kind of bought into that idea or is their focus going to be a little bit different to that kind of ambition that you have for the group? And then, if I'll answer the second question, you don't have to answer it, but we just want Swedish on Swedish regulation with regards to the municipality networks and the SDU market, you know, where they are, it seems like they're going in a similar way to Norway with regional or they could go in a similar way to Norway with regional regulation. Are you kind of looking to position yourself, for M&A in the Swedish market as well or, or is it just too early in that market? Thank you.

Question: Usman Ghazi - Berenberg - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 8:00AM, TEL.OL - Q3 2024 Telenor ASA Earnings Call

Question: Jorgen Weidemann - Pareto Securities - Analyst : Hello and thank you so much for taking my question. So, my question is specifically on the Pakistan operations. You previously said that the Pakistan divestment will not affect your free cash flow guidance for the group materially in 2025. But with an almost NOK2 billion in EBITDA, I was just wondering if you could give some colour on what cash outflows. You see that bridges this to a minimal free cash flow contribution. Thanks.

Question: Jorgen Weidemann - Pareto Securities - Analyst : Okay, thank you.