There is a lag in realizing the full benefits of price increases in Finland, with expectations of gradual recovery over the coming quarters. Despite improvements, Telia Company AB ( TLSNF ) still faces challenges in Finland and Norway, with ongoing efforts needed to turn around these markets. Telia Company AB ( TLSNF ) was awarded […]
There is a lag in realizing the full benefits of price increases in Finland, with expectations of gradual recovery over the coming quarters.
Despite improvements, Telia Company AB ( TLSNF ) still faces challenges in Finland and Norway, with ongoing efforts needed to turn around these markets.
Telia Company AB ( TLSNF ) was awarded the most sustainable operator in Sweden for the tenth consecutive year, highlighting its commitment to sustainability.
The acquisition of Bredband2 has been positive, with revenue synergies already being realized by cross-selling Telia services to Bredband2 customers.
Q: Can you elaborate on the implications of the price rises in Finland and the potential for service revenue growth? A: Eric Hageman, CFO: We are pleased with the improvements in Finland, especially compared to Q4. Although we still lost some customers, it was significantly less than in previous years. The ARPU on new customer acquisitions is higher than in Q4, indicating a positive trend. We are optimistic about the direction for Finland, but we need to see how Q2 and Q3 develop.
Q: Regarding cost efficiencies, is the recent 5% headcount reduction indicative of ongoing efficiency opportunities? A: Patrik Hofbauer, CEO: The headcount reduction is part of our continuous improvement in cost efficiency. It’s not just about organizational changes but also other aspects. We are already seeing some impact from AI in cost-saving programs, particularly in customer service, and expect more benefits in the future.
Q: Can you provide more details on the Brookfield partnership and its impact on CapEx investments? A: Patrik Hofbauer, CEO: The partnership with Brookfield involves them making the investments while we provide connectivity and a customer base. This partnership is important as it addresses the growing demand for AI-supported services and compute. While it’s too early to predict revenue growth, we expect it to be significant in the future.
Q: What are the key sensitivities affecting your free cash flow guidance for the year? A: Eric Hageman, CFO: The strong cash flow start was mainly due to working capital phasing and an earlier-than-expected tax refund. We expect a 30%/70% split between H1 and H2 cash flow generation. Factors like interest rates, FX, and energy costs could impact the guidance, along with ongoing transactions like Bredband2 and the Norway RAN sharing deal.
Q: How do you ensure continued momentum in cost efficiency and avoid reverting to old habits? A: Patrik Hofbauer, CEO: Cost efficiency is crucial for competitiveness. We’ve implemented an operating model focused on continuous cost reduction, not just in countries but also in head office functions. We are committed to maintaining this momentum and leveraging technology to achieve further efficiencies.
Q: Can you discuss the EBITDA guidance given the strong start to the year? A: Eric Hageman, CFO: Despite the strong start with 4% EBITDA growth, we maintain our 3% guidance for 2026. It’s still early in the year, and we need to continue delivering on our cost agenda. We aim for 4% medium-term growth, but we’ll reassess as the year progresses.
Q: What are the cross-selling opportunities with the Bredband2 customer base, and what was its EBITDA contribution in Q1? A: Patrik Hofbauer, CEO: The acquisition of Bredband2 allows us to strengthen our position in Sweden’s value-based segment. We see opportunities to sell mobile and TV services to Bredband2 customers. The EBITDA contribution from Bredband2 was SEK45 million for February and March.
Q: Are there any regulatory concerns with the Norway joint operations? A: Patrik Hofbauer, CEO: We have a good dialogue with Norwegian competition authorities and expect to receive approval. The RAN sharing agreement will lead to cost efficiencies, but it’s too early to discuss market positioning and pricing impacts. We’ll provide more details once the deal closes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.…Read more by GuruFocus News