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Sigve Brekke – CEO Telenor Group
DNB TMT conference, 29 August 2018
2
GROWTH EFFICIENCY SIMPLIFICATION
A CLEAR STRATEGY TOWARDS 2020 ESTABLISHED IN 2017
WINNING TEAM
RESPONSIBLE BUSINESS
3
Telenor India
exit announced
(Feb 17)
Veon
sell-down
(April -17)
Disposal of
Online Classifieds
in Lat-Am (May -17)
Veon sell-down
completed (Sep -17)
Financial services
Partnering with ANT Financial
in Pakistan (March -18)
Disposal of Central
& Eastern
European assets
(March -18)
MAJOR STEPS TAKEN TOWARDS
PORTFOLIO SIMPLIFICATION
- FOCUS ON SCANDINAVIA AND ASIA
4
CONTINUING TO GROW
• Revenue growth from growth in
customer base and usage
• Focus on revenue renewal and ARPU
growth.
• Increasing demand for IoT services in
the business/public segment
• Digital transformation an enabler to
ensure future growth and customer
experience
127 138
150 160
168 172
2%
3%
5%
2% 2%
1%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
20
40
60
80
100
120
140
160
180
200
2013 2014 2015 2016 2017 YTD Q2
Subscriptions
Organic revenue growth
5
FOCUS ON MONETIZING GROWTH IN DATA USAGE
255 272 278
0.7
1.3
1.8
2016 2017 2018
Domestic APRU
Median data usage GB
225 238
253
18% 23% 27%
2016 2017 2018
ARPU Postpaid % of base
152 154 142
23% 27% 33%
2016 2017 2018
Prepaid ARPU
Smartphone % in base
Norway Thailand Bangladesh
ARPU in local currency
6 *FX adjusted
EFFICIENCY AND SIMPLIFICATION DRIVING COST IMPROVEMENTS
• Targeting 1-3% net opex reductions
per year for 2018-2020
38.9
44.8
46.9
44.7
2014 2015 2016 2017 2018 2019 2020
-3%*
Customer interactions
• Moving to digital interactions
• Simplifying product structures
2016 2017
Call center volume in Malaysia
-26%
Increasing opex trend broken
• Common delivery centres network & IT
• Global procurement company
• Decommission legacy IT platforms
Network and IT
External
Internal
Baseline 2020 target
NOK 2.6 bn
-20-30%
NOK billion
7
STILL A SIGNIFICANT PART OF THE COST BASE WITH
POTENTIAL FOR DIGITALISATION
Sales
Other initiatives Digitalisation initiatives
Structural
• Move from concession to license
in Thailand
• Common delivery centre for
network & IT in Asia
• Fixed value chain transformation
in Norway
• Simplification of product portfolios
Non-structural
• Cost-control and prioritization
• Shift from physical to digital sales
channels (e.g MyTelenor)
• Self-service (MyTelenor) and
chatbots for customer care
• Advanced analytics to improve
marcom efficiency
• Cloud-based and standardised
IT solutions
Digitalisation of work processes,
and robotisation of recurring tasks
Customer
mgmt
Opex base NOK ~45 bn (2017)
Marketing
IT
Support
Other
Regulatory
Network
8
STRONG MOBILE PERFORMANCE IN NORWAY, MAINTAINING
REVENUE MARKET SHARE
8
ARPU (NOK/month) Mobile subscriber net adds (k) EBITDA (NOK bn)
• 3% growth in mobile ARPU excl. handset
and roaming effects
• 4% growth fixed broadband ARPU and 6%
growth in TV ARPU
• Lowest subscriber decline in 12 quarters
• Postpaid subscriber growth of 7,000, with
promising uptake on new Flexi products
• Underlying opex reductions of 3%
• FTE reductions of ~400 year-on-year
2.8
2.7
Q2 17 Grossprofit
Opex Q2 18Wholesale &
Special numbers
323 324
Q2 17 Q2 18
361 376
Q2 17 Q2 18
Mobile Fixed broadband
4%
0%
-40
-19
-13 -10
-17
-4
Q117 Q217 Q317 Q417 Q118 Q218
Intelligent
buildings
Transportation
and parking
Water and
sewer Renovation
Collaboration
Security
Streetlights
Welfare
technology
Industry
TAKING A STRONG POSITION IN IOT IN NORWAY
10
BUILDING A PLATFORM FOR THE FUTURE IN THAILAND
• ARPU growth, driven by increased
share of postpaid subscribers
• Postpaid customer base increased by
154,000 during the quarter
10
• Solid high-frequency spectrum position:
– 1,800 MHz acquired in August 2018
– 2,300 MHz spectrum lease from TOT,
aiming for 7,000 sites end of 2018
– 2,100 MHz network densification
continues – close to 90% population
coverage
• Tower lease agreement with CAT nearly
concluded.
• Roaming agreement with AIS in place, as
back up for 2G customers
Continued migration to postpaid
2.0 1.9
41% 40%
Q2 17 Q2 18
EBITDA (NOK bn) and EBITDA margin
Prepared for end of concession Sep - 18 Solid EBITDA margin
• 45% EBITDA margin excl. NOK
0.2 bn spectrum lease payment
• 7% opex reduction year on year
238
253
Q2 17 Q2 18
ARPU (THB)
6%
48%
56%
Q2 17 Q2 18
Postpaid % of subscription
& traffic revenues
11
10.6 11.0 11.3 11.8 12.1
6.5 5.2
2014 2015 2016 2017 2018
Buyback
Special dividend
Ordinary dividend
23 – 24
ATTRACTIVE SHAREHOLDER REMUNERATION
– Commitment to year on year growth in
ordinary dividends
• Annual growth in recent years of 4%
– Buybacks and/or special dividends
considered on a case-by-case basis
• 2% buyback in both 2017 and 2018
• Special dividend following disposal of the
Central and Eastern European assets
17.0
NOK billion
Thank you!