Telenor: A strong year with continued progress on strategic ambitions

(Fornebu, 30 January 2019) "Throughout 2018, we made solid progress on the modernisation of the company and our efforts to deliver world class services to our customers. We upgraded the highest number of base stations in Telenor's history and we took important steps towards simplifying the corporate structure. In Thailand, we made an important transition from concession to licence model, securing significant access to spectrum and infrastructure. Furthermore, we continued to deliver on our efficiency agenda and financial ambitions. For the full year, this resulted in stable revenues, NOK 1.2 billion in cost reductions and a 3 per cent EBITDA growth.

Telenor's fourth quarter results reflect that our performance in Scandinavia continues to be robust. In Norway, we are rolling out more fibre than ever, and we continue to see growth in the mobile postpaid segment. While Bangladesh and Pakistan saw a slow start to 2018, our businesses have now regained traction and are delivering solid growth. The last six months in Myanmar and Thailand have been challenging, and negatively impacted our fourth quarter results. Returning to growth in these markets will be a top priority for us this year.

Halfway into the strategy plan we set out in 2017, we maintain our priorities and financial ambitions towards 2020. Our efforts towards digital transformation continue and I am proud to have a dedicated team with the unwavering aim to continuously grow and improve our business, and to deliver great customer experiences," said Telenor Group Chief Executive Officer Sigve Brekke.

KEY FIGURES

NOK (in millions)	Q4 2018	Q4 2017	FY 2018	FY 2017	FY 2018 (IFRS 15)
Revenues	28 171	28 678	110 396	112 069	110 362
Organic revenue growth (%)	(0.4)	(1.0)	(0.6)	0.5
Subscription and traffic revenues	21 263	21 711	85 362	86 314	84 825
Organic subscription and traffic revenue growth (%)	(0.7)	2.8	0.2	2.4
EBITDA before other income and other expenses	10 338	10 813	45 319	44 694	45 451
Organic EBITDA growth (%)	(2.9)	11.1	3.2	9.0
EBITDA before other income and other expenses/Revenues (%)	36.7	37.7	41.1	39.9	41.2
Net income attributable to equity holders of Telenor ASA	1 177	2 226	14 626	11 983	14 731
Capex excl. licences and spectrum	6 069	5 162	16 776	17 255	16 776
Total Capex	18 619	5 830	31 245	20 307	31 245
Free cash flow	( 141)	3 327	31 989	24 867	31 989
Mobile subscriptions - Change in quarter/Total (mill.)	0.8	2.2	174	168	174

Fourth quarter 2018 and full year summary

• On an organic basis, subscription and traffic revenues declined by 1% in the fourth quarter, while total revenues remained stable. Total reported revenues were NOK 28.2 billion, which is a decrease of 2%. Organic subscription and traffic revenue growth for the year 2018 was slightly positive.
• Reported opex continued to decrease by NOK 0.1 billion or 1% in the quarter and NOK 1.7 billion in 2018. On a currency adjusted basis, opex decreased by NOK 1.2 billion, or 3%.
• EBITDA before other items was NOK 10.3 billion in the fourth quarter with an EBITDA margin of 37%, 1 percentage point below last year. EBITDA declined by 3% on an organic basis in the quarter, negatively impacted by temporary cost increases in Thailand. Organic EBITDA growth for the year 2018 was 3% and the EBITDA margin improved by 1 percentage point to 41%.
• Net income attributable to equity holders of Telenor ASA was NOK 1.2 billion, or NOK 0.81 per share in the quarter. For the year 2018, net income was NOK 14.6 billion, or NOK 9.93 per share.
• Capex excluding licences and spectrum was NOK 6.1 billion in the quarter and NOK 16.8 billion in 2018, resulting in a capex to sales ratio of 22% and 15%, respectively.
• Free cash flow for the quarter was negative NOK 0.1 billion. In 2018, the Group has generated free cash flow of NOK 32.0 billion.

Shareholder remuneration

• Based on the performance during the year, the Board of Directors proposes an ordinary dividend of NOK 8.40 for 2018, to be declared by the Annual General Meeting (AGM) on 7 May 2019. The proposed dividend shall be split into two tranches of NOK 4.40 and NOK 4.00 per share, to be paid in May and October 2019 respectively, and represents a 4% increase compared to 2017.
• In connection with the introduction of a leverage target of 1.5 - 2.0 times net interest bearing debt to EBITDA, in order to optimise the company's capital structure, the Board of Directors plans to ask the AGM for a new share buyback mandate of 3%.

Outlook

• Based on our Thai operation dtac's ambition to provide an Outlook for 2019 in Q2, we will at this point provide the Group revenue and EBITDA outlook for 2019 excluding Thailand. For 2019, excluding the operation in Thailand, we expect an organic subscription and traffic revenue growth of 0-2% and an organic EBITDA growth of 1-3%. Capex excluding licences and spectrum is expected to be in the range of NOK 16-17 billion, including the operation in Thailand.

Media Contact
Meera Bhatia, mobile: [phone], [e-mail] (mailto:[e-mail])

Investor Relations Contacts
Marianne Moe, mobile: [phone], [e-mail] (mailto:[e-mail])
Håkon Hatlevik, mobile [phone], [e-mail] (mailto:[e-mail])

Press and analyst presentation
In connection with the publication of the financial results, a press and analyst conference will be held on Wednesday 30 January at 09:00 hrs Norwegian time/CET. The presentation, which will also be broadcast live via webcast, will be held in Auditorium Voice, Telenor Expo Visitor Centre at Fornebu near Oslo. CEO Sigve Brekke and CFO Jørgen C. Arentz Rostrup will present the results. The presentation will be held in English.

You may also call in and listen to the presentation over the phone. This service allows you to ask questions during the Q&A session at the end of the presentation. To participate in the conference call, please register before the conference starts by calling:

• [phone] (local Norway)
• [phone] (local Sweden)
• [phone] (local UK)
• [phone] (local US)

Please state confirmation code 5900256.

Material
The quarterly report and the presentation are available here. https://www.telenor.com/investors/reports/2019/telenor-groups-results-for-the-4th-quarter-2018/

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Source: Telenor via Globenewswire