Steady strategy execution continues to yield results

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The modernisation in Norway is progressing according to plan, and we see a 3% mobile subscription and traffic revenue growth combined with a 5% reduction in operating expenses this quarter. In Thailand and Myanmar, the momentum seen earlier in 2019 continued and both operations have now returned to positive subscription and traffic revenue growth. However, headwinds in Pakistan as a result of the telecom tax re-introduction and a difficult macroeconomic environment have made the situation locally challenging.

During the quarter we have successfully concluded the acquisition of DNA in Finland. The mandatory tender offer period ended on 10 October and resulted in an ownership share of 97.96 percent. We have started to onboard DNA to our procurement processes to materialise synergies, and we are now looking for opportunities to expand service offerings to Finnish business customers.

Recently, we have also taken further steps on our simplification agenda. Yesterday, we announced that we will be entering into a joint venture with Nordic Entertainment Group, combining our satellite-based entertainment businesses to extract synergies and deliver enhanced customer experience.

Based on the performance so far this year and our expectations for the fourth quarter, we maintain our outlook for 2019. Execution on our strategic agenda remains our focus and key driver for value creation going forward, said Sigve Brekke, President and CEO, Telenor Group.

Third quarter Third quarter First three quarters First three quarters Year First three quarters

Post IFRS 16

KEY FIGURES TELENOR GROUP 2019 2018 2019 2018 2018 2019

(NOK in millions)

Revenues 29 530 27 566 85 267 82 219 110 362 85 069

Organic revenue growth (%) 0,1 0,6 0,4 -0,6 -0,6

Subscription and traffic revenues 22 762 21 356 65 731 63 709 84 825 65 731

Organic subscription and traffic revenue growth (%) -0,6 0,2 -0,4 0,5 0,2

EBITDA before other income and other expenses 12 092 12 410 34 354 35 087 45 451 38 185

Organic EBITDA growth (%) -7,3 5,6 -5,0 5,2 3,2

EBITDA before other income and other expenses/Revenues (%) 40,9 45,0 40,3 42,7 41,2 44,9

Net income attributable to equity holders of Telenor ASA (436) 5 881 6 541 13 518 14 731 6 044

Capex excl. licences and spectrum 3 738 4 219 11 883 10 707 16 776

Total Capex 3 816 4 274 11 967 12 626 31 245

Free cash flow before M&A 2 808 4 672 3 461 10 237 11 691

Total Free cash flow (11 642) 26 543 (10 080) 32 130 31 989

Mobile subscriptions Change in quarter/Total (mill.) 5,2 0,7 183 173 174

Third quarter 2019 summary1

On 21 August, Telenor completed the acquisition of DNA and subsequently initiated a mandatory tender offer for the remaining shares, which ended on 10 October with Telenor achieving a holding of 97.96%. DNA was consolidated from 21 August 2019.2

Subscription and traffic revenues decreased by 1% on an organic basis. In a challenging market environment, revenues in Pakistan declined significantly, offsetting growth in several other markets. Total reported revenues increased by 7% to NOK 29.5 billion.

Currency adjusted gross profit excluding DNA declined by NOK 0.8 billion, impacted by the revenue drop in Pakistan and reversals last year. Reported gross profit increased by NOK 0.6 billion.

Currency adjusted opex increased by NOK 0.6 billion, but was stable excluding DNA and project costs related to the DNA acquisition and the Axiata merger discussions. Reported opex increased by NOK 0.9 billion or 10%.

EBITDA decreased by 7% or NOK 0.9 billion on an organic basis, primarily as a consequence of the development in Pakistan. Reported EBITDA before other items was NOK 12.1 billion with an EBITDA margin of 41%.

The Group generated Free cash flow before M&A of NOK 2.8 billion in the quarter.

Outlook for 20193 Based on the performance so far this year and our expectations for the fourth quarter, we maintain our outlook for 2019. We expect organic subscription and traffic revenue growth at around the 2018 level and a low single digit organic EBITDA decline. Capex excluding licences and spectrum is expected to be in the range of NOK 16-17 billion, excluding DNA.

1 The key figures and summary for the third quarter of 2019 as well as the forward-looking statements are based on current Group structure and accounting standards as of 31 December 2018 unless otherwise stated. Please refer to Definitions on page 31 for descriptions of alternative performance measures.

2 Some of the comments on the Group's financial results for the third quarter 2019 are made excluding DNA. Please refer to page 8 for the Group's consolidated figures in NOK for DNA.

3 The outlook for 2019 is based on Group structure as of 30 September 2019, but excludes DNA and project costs related to the acquisition of DNA and the merger discussions with Axiata in Asia.

Presentation of Q3 results Wednesday 23 October, 0900 CET / 0800 UK TIME

To view the webcast, visit; https://t.expo.no/PJaBqk

To participate in the conference call, dial:

47 2100 2610 (local Norway)

46 (0)8 5664 2753 (local Sweden)

44 (0)330 336 9126 (local UK)

1 929-477-0402 (local US)

Please state confirmation code 2306607, your name and company to the operator

For the Q&A session: to queue up for questions please press *1

Visit www.telenor.com/Q3-2019 to read the report.

Press meeting A separate press meeting will be held at 1100 CET at Telenor Expo Visitor Centre, Snar yveien 30, Fornebu. The media session will be held in Norwegian. To RSVP, please email: Jonathan.Higgins@telenor.com

Investor Relations: ystein Myrvold

Tel: 47 992 30 460

oystein.myrvold@telenor.com

H kon Hatlevik

Tel: 47 901 46 070

hakon.hatlevik@telenor.com

Media Contact: Jonathan Higgins

LINK:	https://www.telenor.com/media/press-release/steady-strategy-execution-...
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