A strong year with continued progress on strategic ambitions

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Throughout 2018, we made solid progress on the modernisation of the company and our efforts to deliver world class services to our customers. We upgraded the highest number of base stations in Telenor's history and we took important steps towards simplifying the corporate structure. In Thailand, we made an important transition from concession to licence model, securing significant access to spectrum and infrastructure. Furthermore, we continued to deliver on our efficiency agenda and financial ambitions. For the full year, this resulted in stable revenues, NOK 1.2 billion in cost reductions and a 3 per cent EBITDA growth.

Telenor's fourth quarter results reflect that our performance in Scandinavia continues to be robust. In Norway, we are rolling out more fibre than ever, and we continue to see growth in the mobile postpaid segment. While Bangladesh and Pakistan saw a slow start to 2018, our businesses have now regained traction and are delivering solid growth. The last six months in Myanmar and Thailand have been challenging, and negatively impacted our fourth quarter results. Returning to growth in these markets will be a top priority for us this year.

Halfway into the strategy plan we set out in 2017, we maintain our priorities and financial ambitions towards 2020. Our efforts towards digital transformation continue and I am proud to have a dedicated team with the unwavering aim to continuously grow and improve our business, and to deliver great customer experiences, said Telenor Group Chief Executive Officer Sigve Brekke.

KEY FIGURES

NOK (in millions) Q4

2018 Q4

2017 FY

2018 FY

2017 FY

2018

(IFRS 15)

Revenues 28 171 28 678 110 396 112 069 110 362

Organic revenue growth (%) (0.4) (1.0) (0.6) 0.5

Subscription and traffic revenues 21 263 21 711 85 362 86 314 84 825

Organic subscription and traffic revenue growth (%) (0.7) 2.8 0.2 2.4

EBITDA before other income and other expenses 10 338 10 813 45 319 44 694 45 451

Organic EBITDA growth (%) (2.9) 11.1 3.2 9.0

EBITDA before other income and other expenses/Revenues (%) 36.7 37.7 41.1 39.9 41.2

Net income attributable to equity holders of Telenor ASA 1 177 2 226 14 626 11 983 14 731

Capex excl. licences and spectrum 6 069 5 162 16 776 17 255 16 776

Total Capex 18 619 5 830 31 245 20 307 31 245

Free cash flow ( 141) 3 327 31 989 24 867 31 989

Mobile subscriptions Change in quarter/Total (mill.) 0.8 2.2 174 168 174

Fourth quarter 2018 and full year summary

On an organic basis, subscription and traffic revenues declined by 1% in the fourth quarter, while total revenues remained stable. Total reported revenues were NOK 28.2 billion, which is a decrease of 2%. Organic subscription and traffic revenue growth for the year 2018 was slightly positive.

Reported opex continued to decrease by NOK 0.1 billion or 1% in the quarter and NOK 1.7 billion in 2018. On a currency adjusted basis, opex decreased by NOK 1.2 billion, or 3%.

EBITDA before other items was NOK 10.3 billion in the fourth quarter with an EBITDA margin of 37%, 1 percentage point below last year. EBITDA declined by 3% on an organic basis in the quarter, negatively impacted by temporary cost increases in Thailand. Organic EBITDA growth for the year 2018 was 3% and the EBITDA margin improved by 1 percentage point to 41%.

Net income attributable to equity holders of Telenor ASA was NOK 1.2 billion, or NOK 0.81 per share in the quarter. For the year 2018, net income was NOK 14.6 billion, or NOK 9.93 per share.

Capex excluding licences and spectrum was NOK 6.1 billion in the quarter and NOK 16.8 billion in 2018, resulting in a capex to sales ratio of 22% and 15%, respectively.

Free cash flow for the quarter was negative NOK 0.1 billion. In 2018, the Group has generated free cash flow of NOK 32.0 billion.

Shareholder remuneration

Based on the performance during the year, the Board of Directors proposes an ordinary dividend of NOK 8.40 for 2018, to be declared by the Annual General Meeting (AGM) on 7 May 2019. The proposed dividend shall be split into two tranches of NOK 4.40 and NOK 4.00 per share, to be paid in May and October 2019 respectively, and represents a 4% increase compared to 2017.

In connection with the introduction of a leverage target of 1.5 - 2.0 times net interest bearing debt to EBITDA, in order to optimise the company's capital structure, the Board of Directors plans to ask the AGM for a new share buyback mandate of 3%.

Outlook

Based on our Thai operation dtac's ambition to provide an Outlook for 2019 in Q2, we will at this point provide the Group revenue and EBITDA outlook for 2019 excluding Thailand. For 2019, excluding the operation in Thailand, we expect an organic subscription and traffic revenue growth of 0-2% and an organic EBITDA growth of 1-3%. Capex excluding licences and spectrum is expected to be in the range of NOK 16-17 billion, including the operation in Thailand.

Media Contact

Meera Bhatia, mobile: ( 47) 468 44 959, meera.bhatia@telenor.com

Investor Relations Contacts

Marianne Moe, mobile: ( 47) 916 17 631, marianne.moe@telenor.com

H kon Hatlevik, mobile ( 47) 901 46 070, hakon.hatlevik@telenor.com

Press and analyst presentation

In connection with the publication of the financial results, a press and analyst conference will be held on Wednesday 30 January at 09:00 hrs Norwegian time/CE

LINK:	https://www.telenor.com/media/press-release/a-strong-year-with-continu...
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