Telenor ASA Q4 2024 Earnings Call Transcript

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

Question: Maurice Patrick - Barclays - Analyst : A question from my side on what's core and noncore. I know you -- I'm sure you'll want to cover this in more detail in the Capital Markets Day, but investors ask the question a lot as to what is core for Telenor, what's not core. You've talked about the associate positions you have in Asia. Are you still committed to Asia? In the slide, you talk about adjacent opportunities, but you also talked about selling noncore assets in Amp. I noticed there's comments around security services that you're developing. And there's also the question around infrastructure and towers. So very keen to understand early thoughts in terms of what is core and not core for you in terms of your priorities going forward. Thank you.

Question: Keval Khiroya - Deutsche Bank - Analyst : Good luck in your new role, Benedicte and Torbjorn as well. So in 2025, the Nordics will see a decline in OpEx and CapEx. Based on just your very initial impressions, can you share how you think about the scope for continued OpEx and CapEx declines beyond 2025? Thank you.

Question: Ondrej Cabejsek - UBS - Analyst : And also all the best to Benedicte and Torbjorn in their new role. I have a question that -- or a couple of questions focused on free cash flow, please. So obviously, you've laid out very helpfully, I think, the key building blocks, which is your EBITDA growth, your CapEx growth. You made some comments on things like leases, interest, et cetera. I wanted to follow up on two things. One is the Asia assumption. So the previous management was -- or had a goal rather from the previous kind of Capital Markets Day, which was for Asia to contribute at around NOK5 billion in terms of upstreamed already free cash flow in 2025. I don't think with maybe the Bangladesh situation or the assumption that you sell Pakistan in mid-2025, we can get to NOK5 billion, but just a clarification in terms of what generally is the expectation for the Asia contribution? And second one, on net working capital, if I can follow up, Torbjorn, so you laid out hopefully that NOK2.7 billion was the number for this year as a total contribution. You said that NOK800 million was part of the structural efforts, which the previous management kind of introduced. And then you said you would continue with the structural efforts into 2025. So just looking at the math, it seems like there's a NOK2 billion delta that could be reversed, so the NOK2.7 billion minus the NOK800 million, but then you would be adding another, call it, NOK1 billion in terms of structural benefit. So in terms of the overall drag from working capital for '25, are we -- should we expect something like NOK1 billion negative in that number? Because you made a comment also in the presentation that net working capital overall would be negative. So just those two elements within the free cash flow guidance. Any color would be helpful. 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. FEBRUARY 06, 2025 / 8:00AM, TEL.OL - Q4 2024 Telenor ASA Earnings Call

Question: Andrew Lee - Goldman Sachs - Analyst : Look forward to meeting you in person soon. I had a follow-up question just on Maurice's question earlier around your strategic thinking regarding M&A. Helpful, Torbjorn, to your comments about, whilst, I think simplification should be a noble goal. But you also mentioned, and it may just been wording, see what inorganic opportunities come across your table. So the question really was your predecessors were actively pursuing a route to simplification in Asia, which is clearly putting a sizable discount on your share price. So the question really was, do you see -- do you anticipate actively pursuing routes to deliver more shareholder value through simplification, given it's a major block to your value? And also, do you see the scope to pursue in-market consolidation, given we're seeing potential openings in the opportunity to consolidate European markets. So active pursuit on Asia portfolio simplification and active pursuit on in-market consolidation. Thank you.

Question: Joshua Mills - BNP Exane - Analyst : My question relates to Sweden. And just looking at the quarterly service revenue growth, it slowed down a bit in the fourth quarter. I understand there was a tough comp versus last year. Perhaps you could give a bit more color around how you expect the service revenue in Sweden to normalize out in 2025 and some commentary on the pricing environment in light of comments made recently by Tele2 and Telia would be helpful. Thanks very much.

Question: Joshua Mills - BNP Exane - Analyst : I was looking at Sweden, but if you're happy to expand it out to Nordics, that would be very helpful as well.

Question: Adam Fox-Rumley - HSBC - Analyst : I think there's a reference in the release to an improvement in Bangladesh or hope for improvement in Bangladesh in the second half. And I just wondered if you could talk about the kind of leading indicators that you're watching for there to see to give us a sense of how much hope is in for that versus kind of expectations of improvement? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 8:00AM, TEL.OL - Q4 2024 Telenor ASA Earnings Call And then a brief follow-up on return on capital. I can see in your kind of associated files in the return on capital in Finland is just at 4% at the moment. The EBIT margin in Sweden and Finland are pretty similar. So is there any -- I appreciate this is a bit of a detailed one, but is there anything you can call out in particular on the return on capital in Finland? Thanks.

Question: Felix Henriksson - Nordea Securities - Analyst : It is on Nordic service revenue growth and the visibility you have for 2025. Could you perhaps describe where you see particular pockets of strength and weakness when it comes to your main geographies and the product lines and perhaps describe a bit how the growth that you're seeing in your key markets relates to both the ability to raise ARPU as well as to gain net subscriber adds. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 8:00AM, TEL.OL - Q4 2024 Telenor ASA Earnings Call

Question: Ulrich Rathe - Bernstein - Analyst : Right. So I want to -- a couple of questions have already been asked, but just coming back to Nordic service revenue. I mean, a big driver of that has been the pricing during the period of high inflation. How do you see the pricing potential specifically in the four markets, if you could run through that? And then my follow-up would be, Telia actually commented yesterday on increased investments in Norway to upgrade the cable infrastructure because they saw -- not yesterday, last week because they felt that there is a real risk of customers ditching cable in favor of fiber. They argued mostly for reasons of perception, but still they saw the need to put incremental capital in there. You're cutting CapEx. You're obviously a large cable operator in Norway as well. So how do you see that question?

Question: Ulrich Rathe - Bernstein - Analyst : Thank you. Looking forward to your Capital Markets Day.

Question: Christoffer Wang Bj°rnsen - DNB - Analyst : So just following along the lines of fiber. So in that CapEx ambition for '25, it would be great if you could help us understand how much is fiber in '24 and how do you think about that into '25? And then my follow-up is more on the inorganic lines on fiber. I think there was some commentary last month in local press from a mid-level manager that you're kind of looking to acquire both customer portfolios and fixed assets in the fiber space in Norway. I'd just love to hear what you think about that kind of amid the change in the regulatory environment of fiber in Norway.

Question: Christoffer Wang Bj°rnsen - DNB - Analyst : Yeah. Just quickly on the inorganic, I was not kind of trying to get how much you'll spend or when or who you will buy, but just like the kind of the rationale behind potentially consolidating that space when you can actually go after those customers on other people's networks, that kind of --

Question: +ystein Lodgaard - ABG Sundal Collier. - Analyst : Congrats to both of you on the new jobs. Just a question on OpEx. How should we think around OpEx development in the Nordics going forward? Of course, ARPU growth has been the key driver of EBITDA growth in the last few quarters. But how should we think about OpEx contributing potentially to that going forward?

Question: +ystein Lodgaard - ABG Sundal Collier. - Analyst : Okay. Thank you very much. And the potential for OpEx reductions in the years to come, what are your thoughts there? Or is that something you want to wait until the CMD?