Strong cash flow supporting the dividend

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During the year, Telenor has focused on safeguarding employees and providing services to customers as the demand for connectivity, digitalisation and data has increased during the year, all while ensuring the robustness of the critical infrastructure we provide. Modernising our operations remain a top priority, and structural initiatives have resulted in NOK 1.2 billion in savings during the year. More importantly, these efforts have enabled us to provide great customer experience and a position to partner with Google and AWS to explore new services beyond connectivity , says Sigve Brekke, President and CEO of Telenor Group.

In the Nordics, the company delivers yet another good quarter. In Norway the strategy of providing value to customers with services on top of a world class network is yielding results, with a mobile ARPU growth of 3 percent. With the copper decommissioning reaching its peak, the growth in non-legacy services were not able to fully compensate for the legacy decline. The demand for services and increased data speed drove the ARPU growth of 3 percent in Finland and 6 percent in Denmark. In Sweden, the revitalised go-to market strategy resulted in stable subscription and traffic revenues and strong mobile subscriber growth in the quarter.

In Asia, pressure on the top line remains due to intense competition and impact from the pandemic, in particular in Thailand. Through 2021, Telenor has progressed on the strategy to build strong positions across markets. In the fourth quarter, the company announced yet another merger in Asia. With this transaction, Telenor aims to combine dtac and True in Thailand and create the leading telecom operator in the country.

Based on the solid financial position, strong free cash flow generation and a leverage ratio of 2.05x, the Board of Directors propose a dividend of NOK 9.30 per share, in line with the dividend policy. The dividend represents a 3 percent increase from last year.

Entering 2022, will maintain focus on returning to growth, the opportunities we see from also going beyond connectivity, creating leading operators through partnerships in Asia and further developing our infrastructure position in the Nordics. For the full year 2022 and excluding Digi in Malaysia, we expect low single digit growth in service revenues, EBITDA around 2021 level or slightly higher and capex to sales ratio of 16-17 percent. , says Brekke.

KEY FIGURES TELENOR GROUP* Fourth quarter Year

NOK in million 2021 2020 2021 2020

Revenues 28,154 29,322 110,241 115,839

Organic revenue growth (%) 1.9 (3.6) 1.2 (2.7)

Subscription and traffic revenues 20,234 21,455 81,776 87,147

Organic subscription and traffic revenue growth (%) (0.1) (3.2) (0.2) (2.6)

EBITDA before other income and other expenses 11,743 12,549 49,162 52,347

Organic EBITDA growth (%) (1.1) (0.4) (0.2) 1.0

EBITDA before other income and other expenses/Revenues (%) 41.7 42.8 44.6 45.2

Net income attributable to equity holders of Telenor ASA 587 7,689 1,528 17,341

Capex excl. licences and spectrum 5,865 5,596 17,942 15,811

Total Capex 8,023 10,190 22,345 21,152

Free cash flow before M&A (274) 1,988 11,014 12,542

Total Free cash flow (472) 9,130 12,667 20,855

Mobile subscriptions Change in quarter/Total (mill.) 0.1 2.4 172.2 165.5

* With effect from the second quarter of 2021, Telenor Myanmar is classified as held for sale and discontinued operations, see note 3. As a consequence, the relevant figures in the table above and throughout the report excludes Telenor Myanmar.

Fourth quarter 2021 summary1)

Subscription and traffic revenues remained stable on an organic basis, both for the fourth quarter and for the full year. Total reported revenues in the quarter were NOK 28.2 billion, which is a decrease of NOK 1.2 billion driven by negative currency impacts.

Currency adjusted opex increased by NOK 0.1 billion, or 1 percent. Reported opex decreased by NOK 0.4 billion. For the full year 2021, currency adjusted opex decreased by NOK 0.6 billion or 2 percent.

Organic EBITDA decreased by 1 percent. Reported EBITDA before other items was NOK 11.7 billion and the EBITDA margin was 42 percent. For the full year, organic EBITDA remained stable as the higher energy cost driven by price increases was compensated by solid opex reductions.

Capex excluding licences and spectrum fees was NOK 5.9 billion, yielding a capex to sales ratio of 21 percent. For the full year 2021, the capex to sales ratio ended at 16%.

Reported net income was NOK 0.6 billion for the quarter and NOK 1.5 billion for the full year. Net income for the quarter was impacted by the fine imposed by the Norwegian Competition Authority (NCA) of NOK 0.8 billion and negative contribution from discontinued operations of NOK 0.5 billion.

Total free cash flow was NOK 0.5 billion negative for the quarter, including payment of the fine imposed by NCA. For the full year, total free cashflow was NOK 12.7 billion. Leverage was 2.05x at the end of the year, which is in the middle of the target range of 1.8-2.3x.

The Group's mobile subscriber base grew by 0.1 million in the quarter, and 6.7 million during the year. The subscriber base was 172 million at the end of the quarter.

1)Please refer page 29 for Definitions and descriptions of alternative performance measures.

Press contact:

David Fidjeland, Media Relations, Telenor Group

+47 935 67 224 | david.fidjeland@telenor.com

LINK:	https://www.telenor.com/media/press-release/strong-cash-flow-supportin...
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