Telia, one of Scandinavia’s leading telecommunications companies, has demonstrated resilience and growth in the first quarter of 2024 despite facing challenges within the industry. The interim report for January to March 2024 highlights several key achievements and strategic moves made by the company.
Financial Performance
Despite a slight decrease in revenue by 2.0% to SEK 21,274 million, Telia managed to maintain its service revenue, which increased by 1.5% to SEK 18,634 million. Adjusted EBITDA saw a notable increase of 3.4% to SEK 7,144 million, showcasing the company’s operational efficiency. Additionally, operating income rose to SEK 2,284 million, and total net income amounted to SEK 757 million.
Commercial Progress
Telia’s success in the first quarter can be attributed to its commercial progress across various markets. In Sweden, the company witnessed growth primarily driven by fixed service revenue, especially in its leading TV experience segment. Consumer business in Sweden showed positive trends in Net Promoter Scores (NPS) and service revenue, with a notable 5.0% increase. This growth was supported by improvements in customer service, operational efficiency, and IT infrastructure.
In Finland, Telia reported steady service revenue growth of around 2%, fueled in mobile consumer customer satisfaction and a 12% increase in mobile consumer Average Revenue Per User (ARPU). Similarly, Norway experienced momentum with service revenue up by approximately 2%, driven by higher consumer ARPU and growth in the mobile wholesale business.
Lithuania reported a healthy mid-single-digit growth in service revenue, driven mainly by mobile subscriber and ARPU growth. The new self-service customer apps aimed for customer experience and lower operational costs. Estonia, while experiencing lower revenue momentum due to timing issues with price changes, and commercial 26Ghz 5G FWA service, providing a fiber-like experience via the mobile network.
TV and Media Turnaround
Telia’s TV and Media segment saw a decline in advertising revenue but managed to offset most of it with growth in pay TV revenue. The company’s digital transformation efforts yielded positive results, with growth observed in streaming consumption, customer base, and digital advertising revenue.
Sustainability Agenda
Telia remains committed to its sustainability agenda, with significant milestones achieved in the first quarter. Over 55% of the company’s supply chain emissions are now covered by Science Based Targets, and its A- score from CDP was reconfirmed. Additionally, Telia’s digital inclusion initiatives reached another 200,000 individuals, emphasizing its commitment to social responsibility.
Financial Development and Outlook
Despite macroeconomic and regulatory challenges, Telia’s Telco business saw service revenue grow by 2.7% and EBITDA by 2.1%. The company’s balance sheet remains healthy, with a net debt to EBITDA ratio of 2.43x at the end of the quarter. The recent sale of operations and network assets in Denmark to Norlys further strengthens Telia’s financial position.
Looking ahead, Telia’s CEO, Patrik Hofbauer, expressed confidence in the company’s full-year outlook and cash flow generation, which is expected to be tilted towards the second half of the year. Hofbauer emphasized simplifying and accelerating decision-making processes to drive growth and exceed current dividend levels in future years.
In conclusion, Telia’s performance in the first quarter of 2024 underscores its resilience, strategic focus, and commitment to delivering value to shareholders while navigating industry challenges. With a solid foundation and a clear vision for the future, Telia is poised for continued success in the telecommunications landscape.
