#1Q1 Telia Company INTERIM REPORT JANUARY - MARCH 2020 CHRISTIAN LUIGA PRESIDENT & CEO#2CONTINUED IMPROVEMENT IN OUR TELCO BUSINESSES Q1 19 YOY growth* Q1 19 YOY growth* SERVICE REVENUES IMPROVED 2 * Like for like Q2 19 Q3 19 Q2 19 Q4 19 Q3 19 ADJUSTED EBITDA IMPACTED BY TV AND MEDIA -1.0% Q4 19 Q1 20 -0.2% -5.1% Q1 20 Q1 20 (excl. TV/media) -1.4% Q1 20 (excl. TV/Media) OPERATIONAL FREE CASH FLOW Q1 2020 SEK3.3BN (SEK 4.4 BILLION Q1 2019) DIVIDEND AND LEVERAGE DIVIDEND SEK 1.80/SHARE (SEK 7.4 BILLION) LEVERAGE 2.62X (2.71x Q4 2019)#3COVID-19 IMPACTS AND IMPLICATIONS COVID IMPACT ON Q1 2020 - LARGELY TV RELATED Adjusted EBITDA, SEK million 3 0 -20 -40 -60 -80 -100 -120 ● • Additional impact on the advertising market sentiment - difficult to isolate Liiga write-down and pay-TV impact on TV & Media unit and within countries ● Cancelled sport events affect TV distribution and cost • Limited impact on the telco business so far ● • Networks holding up well despite high usage. ● No significant supply chain issues so far • Plans in place to ensure business continuity ● POTENTIAL OPPORTUNITIES/ RISKS AHEAD FURTHER HIGH DEMAND FOR SUPPORT TO B2B AND SOCIETY TELCOS KEY ROLE IN DIGITALIZATION OF SOCIETY TO BECOME EVEN MORE VISIBLE ROAMING IMPACTED BY TRAVEL RESTRICTIONS CANCELLED SPORT EVENTS WILL IMPACT TV DISTRIBUTION CUSTOMER FINANCIAL STABILITY MAY DEGRADE B2C AND B2B SEGMENT MAY SEE IMPACT FROM INCREASED UNEMPLOYMENT Activation of identified mitigating actions if needed#4SUPPORTING OUR STAKEHOLDERS DURING THIS TIME SUPPORTING AUTHORITIES PROOF POINT OF BEST NETWORKS Increase in traffic 30-50% TELIA CROWD INSIGHTS tool used by authorities thought our footprint to fight COVID-19 10-20% Data in fixed Data in mobile networks networks 20-70% Voice in mobile networks ● Managing network usage increase On top of this handling 25% increased traffic for Telia Carrier SUPPORTING CUSTOMERS & SOCIETY KEEP DISTANCE BUT KEEP CONTACT ● 4 ▶TV4 Play mtv mtv ▶ STAFF WELLBEING ● ● SECURITY ● INTERNAL MEASUREMENTS TAKEN Keeps customers connected Enabling digital ways of working and home schooling Securing vital access to information and entertainment Risk management teams in place. SUPPLY CHAIN NETWORKS & TV#5MOBILE REVENUES SHOW POSITIVE GROWTH LO 5 MOBILE SERVICE REVENUE GROWTH Like for like growth ● 0.9% Sweden supported by additional migration and B2B Strong B2B development in Norway • Between 4-7 percent growth in the Baltics ● ● Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 MOBILE ARPU GROWTH In local currency, pre and postpaid, y-o-y SWEDEN +1.2% FINLAND ● +3.9% NORWAY +3.5% LIT EST DEN +5.3% +2.8% -0.9% ARPU growth in 5 of 6 markets • Overall the result from price initiatives and good work on upsell#6GOOD MOMENTUM IN FIXED BROADBAND CO FIXED BROADBAND SERVICE REVENUE GROWTH Like for like growth Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Sweden and Norway main drivers behind solid development ● 3.3% ● Sweden: ARPU uplift and fiber intake Norway: Good subscription development Open city networks KEEPING THE FRONTRUNNER POSTION WITHIN FIXED Like for like growth halebop * Get CapMan • OCN* penetration Q1 increased by 60,000 y-o-y, 40 percent up • New co-operation in Finland to speed up SDU fiber roll-out#7EBITDA GROWTH IN TRADITIONAL TELCO 7 EBITDA BRIDGE Q1 2020 - GROUP SEK billion, like for like, adjusted EBITDA -1.4% Q1 19 0.1 Pension refund, Liiga write-down and sold receivables Telco business -0.2 Items Q1 20 affecting (ex. TV comparability & Media) -5.1% -0.3 7.3 TV & Media Q1 20 • The traditional telco business grew EBITDA by 1.7 percent EBITDA BRIDGE Q1 2020 - TV AND MEDIA SEK billion, like for like, adjusted EBITDA 0.3 ● Q1 2019 -0.1 Run-rate into 2020 -0.2 Market and COVID-19 0.0 Q1 2020 • Run-rate into 2020 lower as communicated ● COVID-19 impacting an already slightly weaker advertising market#8TV & MEDIA - AN EVEN STRONGER TOTAL TV POSITION ∞ LINEAR CSOV - TV4 AND MTV Commercial Share of Viewing, ages 15-64 46.3 -0.1 Q1 Q2 Q3 Q4 Q1 19 19 19 19 20 Source: MMS, Finnpanel BACKSTRÖM 46.2 CHORE ORIGIN 38.7 1 JAN GUILLOUS HAMILTON CHOREORGINAL +1.5 Q1 Q2 Q3 Q4 Q1 19 19 19 19 20 1.8 million total viewers including record high digital consumption 40.1 MASKED SINGER + DIGITAL CSOV - TV4 Commercial share of viewing, ages 3+ 64.1 Source: MMS +4.2 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Let's dance 2020 Premiär 20 mars 68.3 SVERIGES Mästerkock CO 300 ROBINSON = SON-TOAS MARKET POSITION VARJE DAG INCREASED TOTAL TV MARKET SHARE DESPITE A LARGE DISTRIBUTOR DECIDING NOT TO OFFER PART OF OUR CONTENT TO ITS CUSTOMERS BIG BROTHER SVERIGE TUNN IS CHORE ORIGINAL મીયા BERWTATRIANGEL MITE TENTA HORS CRIS#9GOOD B2C MOBILE & BROADBAND REVENUE GROWTH MOBILE SUBSCRIPTION REVENUE GROWTH - B2C In local currency, external service revenues Q1 19 Q2 19 Q3 19 ● Q4 19 3.0% Q1 20 • Continued B2C ARPU growth Subscription fees supported by migrations ● FIXED BROADBAND REVENUE GROWTH - B2C In local currency, external service revenues ● Q1 19 Q2 19 Q3 19 Q4 19 5.3% ● • Added 3,000 B2C subs. net Q1 2020 (26,000 in fiber) Q1 20 Fiber price increase in Q2 2019 pushed revenue growth into positive territory XDSL price increase Q4 2019 amplified growth#10OUTLOOK FOR 2020 (UPDATED) OPERATIONAL FCF* ADJUSTED EBITDA* 10 SEK 9.5-10.5 BILLION (PREVIOUSLY: SEK 10.5-11.5 BILLION) NO GUIDANCE DUE TO LOW VISIBILITY (PREVIOUSLY: TO GROW 2-5 PERCENT) *Based on the Group structure at year-end 2019 (i.e. including the segment TV and Media established in December 2019) and adjusted EBITDA in stable FX#11Q1 Telia Company INTERIM REPORT JANUARY - MARCH 2020 DOUGLAS LUBBE CFO#12REVENUES AND EBITDA DECLINED DUE TO TV AND MEDIA 12 SERVICE REVENUE DEVELOPMENT Like for like growth, external service revenues -1.0% Q1 SWE FIN NOR DEN LIT EST TV & LAT Telia Other Q1 19 Media Carrier 20 1. • Growth in Sweden due to mobile and broadband ● ● Fixed telephony continued down in Finland. Mobile growth in Norway offset by decline in TV • TV and Media fell from pressure on advertising ● ● EBITDA DEVELOPMENT Like for like growth, excluding adjustment items Q1 19 SWE FIN NOR DEN LIT EST TV & LAT Other Q1 20 Media -5.1% • Lower pension benefit impacted Sweden Norway and Finland impacted by one-off items Revenue pressure and higher costs in TV & Media • Positive growth in the traditional telco business ● ●#13GRADUALLY IMPROVING B2B TREND CONTINUES 13 B2B SERVICE REVENUE DEVELOPMENT - ALL MARKETS Organic growth 2018 & like for like growth 2019/2020 | Q2 18 Q3 18 Q4 18 Q1 19 Q2 19* Q3 19 Q4 19 Q1 20 Q1 2020 -1.2% (-1.5% FY19) Q1 2020 +2.3% (-2.5% FY19) -0.9% * Q2 2019 positively impacted by one-off like revenues in Sweden Q1 2020 -0.4% (-0.7% FY19) • Sweden and Norway main drivers. • Dedicated work on the propositions yielding • Continued good traction in ICT and loT • Sweden: Product launches, NPS improvement Norway: Good development within Public and SME Finland: ICT growth supported ● ●#14COST AGENDA 2020 STILL IN FOCUS 14 OPEX DEVELOPMENT External expenses, like for like, including an estimated 2% cost inflation 4% 2% 0% -2% -4% -6% Q1 19 Q2 19 Q3 19 Q4 19 3% Q1 20 • OPEX increased 3 percent largely due to: Less pension refund contribution in Sweden • Overall increased need of staffing in customer care ● Higher credit losses in particularly Norway and Sweden IT and resource costs in TV and Media ● ● ● Adjusted for pension refund OPEX grew by ~2 percent • Activities ahead Resources in all markets - both employees & consultants Marketing spend to be calibrated Common Products and Services to step up in H2 • The longer the pandemic lasts the execution risk increases ● ● ●#15IMPROVED REVENUE TREND 15 SERVICE REVENUE DEVELOPMENT In local currency, external service revenues ● ● B2B B2C B2C excl. fiber OTC D Q1 19 Q2 19 B2B Q3 19 B2C +1.2% +0.7% -1.2% Q4 19 Q1 20 Stable trend in B2C and less drag from OTC Q1 Sequential improvement in B2B driven by mobile ADJUSTED EBITDA DEVELOPMENT Like for like growth excl. IFRS 16 impact 2019 ● Q1 19 Q2 19 PENSION REFUND AND EASY COMPARISON ● ● Q3 19 6% 3% Q4 19 • Sweden slightly negative as revenue growth and cost measures were offset by mainly 2.4% -0.7% Growth of 2.4% if adjusting for pension Q1 20 less pension benefit (SEK 100 million) higher resource costs in customer service#16LIIGA CANCELLATION AND FIXED TELEPHONY IMPACTED 16 SERVICE REVENUES & ADJUSTED EBITDA SEK million in reported currency & like for like growth ● 3,273 -1.4% 3,302 Q1 19 Q1 20 Service revenues 1,169 -3.3% = Like for like growth 1,156 Q1 19 EBITDA Q1 20 Mobile subscription revenues grew while fixed telephony continued to burden SEK 40 million negative EBITDA impact from cancellation of the Liiga season MOBILE SUBSCRIPTIONS AND POSTPAID ARPU Total subscription base in 000', postpaid ARPU in local currency 3,400 3,300 3,200 3,100 3,000 2,900 2,800 Subscriptions H Q1 19 Q2 19 Q3 19 Postpaid ARPU = ARPU growth y-o-y Q4 19 +4.5% Q1 20 22 21 20 19 18 17 Mobile subscriber revenue growth driven by ARPU#17FLAT MOBILE SUBSCRIPTION DEVELOPMENT 17 SERVICE REVENUES & ADJUSTED EBITDA SEK million in reported currency & like for like growth -0.7% 3,119 2,964 Q1 19 Q1 20 Service revenues -4.3% 1,516 Q1 19 = Like for like growth 1,387 Q1 20 EBITDA • Mobile revenues grew from solid B2B performance ● • EBITDA Q1 2019 positively impacted by sale of impaired customer receivables SEK 35 million increase in credit losses in Q1 2020 MOBILE SUBSCRIPTIONS Total subscriptions & postpaid ARPU in local currency ● 2,300 2,100 1,900 Subscriptions NOK 300 H Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 NOK 275 Postpaid ARPU Postpaid ARPU grew slightly • OneCall continues to show subscriber growth ● +1.3% = ARPU growth y-o-y • Growth in B2B revenues from strong mobile ●#18STRONG PERFORMANCE IN LED 18 SERVICE REVENUE DEVELOPMENT Like for like growth, external service revenues ● Estonia Q1 19 Lithuania Denmark E Q2 19 Q3 19 Q4 19 +7.3% +6.0% -1.6% Q1 20 Solid performance for both mobile and fixed revenues in Lithuania and Estonia Denmark improved as mobile growth turned neutral ADJUSTED EBITDA DEVELOPMENT SEK million in reported currency & like for like growth ● +5.6% 345 373 Q1 19 Q1 20 Lithuania +4.1% 272 290 Q1 19 Q1 20 Estonia ● = Like for like growth +3.0% 219 231 Growing revenues supported EBITDA in the Baltics ● • Better on revenues and another great quarter on costs in Denmark Q1 19 Q1 20 Denmark +#19TV & MEDIA - TEMPORARY SPORTS CHALLENGE 19 REDUCED PRICES FROM CANCELLED SPORTS In SEK and EUR ● ● MORE + Original price 449:- 199:- 349:- 139:- € 29.95 € 24.95 € 12.95 Temporary price 139:- € 12.95 All sport packages priced in line with base package Price changes also impacts all other markets. All time high consumption on recently launched series ● ● STABLE SUBSCRIPTION BASE DESPITE CHALLENGES SVOD subscriptions in '000 800 600 400 200 0 Q4 2019 Q1 2020 Q4 supported by 60,000 free subscriptions added during December conflict of which half have continued as paying customers in Q1 Subscriber base maintained despite sport cancellation due to strong overall content portfolio#20CASH FLOW FROM EBITDA LESS CAPEX IS GROWING 20 OPERATIONAL FREE CASH FLOW DEVELOPMENT SEK billion, rolling twelve months 14 12 10 8 6 4 2 0 * Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18 18 18 18 19 19 19 19 Repayment of lease liabilities SEK 11.5 BILLION Q1 20 OPERATIONAL FREE CASH FLOW Q1 SEK billion 4.4 Q1 2019 ● -0.2 ● 0.3 -1.1 -0.3 EBITDA CAPEX WC less leasing licenses ex. -0.4 -0.5 Tax Other 3.3 • EBITDA less CAPEX grew by 3 percent Still positive on WC although slightly less than LY • Tax negative due to tax refund LY ● Less support from pension refund vs. LY Q1 2020#21NET DEBT AND LEVERAGE DECREASED 21 NET DEBT DEVELOPMENT Continuing and discontinued operations, SEK billion and leverage ratio 2.71x 88.1 -7.2 3.0 1.0 Q4 19 Operations Cash Buy- CAPEX backs -2.6 Green hybrid 1.5 FX & other = Leverage ratio (multiple, rolling 12 months including a full 12 months of Bonnier Broadcasting) 2.62x 83.7 Q1 20 • Net debt decreased driven by operations and EUR 0.5 billion green hybrid bond issuance ● ● ● ● Buy-backs finalized (in total 6% of shares bought back) FX movements increased leverage First dividend tranche of SEK 3.7 billion in April Bonnier Broadcasting earn-out of maximum SEK 0.8 billion The remaining 50% (SEK 0.2 billion) in dividend from Turkcell Holding#22CAPITAL STRUCTURE IN FOCUS 22 "COMMITTED TO KEEP LONG- TERM SOLID INVESTMENT GRADE" EUR 0.5 BILLION GREEN BOND ISSUED LIQUIDITY FURTHER SUPPORTED BY A NEW CREDIT FACILITY OF SEK 4 BILLION LOWERED DIVIDEND RATING CONFIRMED BY MOODY'S#23Telia Company Q&A#24DISCLAIMER & FORWARD-LOOKING STATEMENTS This document contains the use of alternative performance measures (APM's) to provide readers with additional financial information that is regularly reviewed by management, such as adjusted EBITDA, CAPEX and operational free cash flow. These APM's should not be viewed as a substitute for Telia Company's IFRS based figures, but as a complement. APM definitions can be found in Telia Company's interims reports and Annual and Sustainability Report 2019 and may be defined differently by other companies and are therefore not always comparable to similar measures used by other companies. Telia Company's management considers these APM's combined with IFRS performance measures and in conjunction with each other, the most appropriate way to measure the performance of Telia Company. Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Telia Company. 24