Annual return of 11% since IPO - outperforming sector

Transcription

1 Financial priorities Richard Aa, CFO Telenor Group Annual return of 11% since IPO - outperforming sector Telenor share price development vs Dow Jones STOXX telecom index (SXKP) 4 NOK NOK NOK % -3% Telenor DJ Stoxx telecom index *Total return (including reinvestment of dividend) from Telenor IPO to 16 Sep

2 Telcos low priced compared to most sectors P/E ratios for European telcos vs other sectors * Telecom services 1.5 Energy 9. Utilities 11.1 Materials 11.4 Financials 11.1 Health Care 11.1 Industrials 13.8 Software 15.1 Consumer 14. Average =11.8 Telco P/E ratio close to 5-year low Telco dividend yields near all-time high and higher than bond yields Our view on telecom sector: Revenue growth potential Significant efficiency potential Earnings growth potential *) Source: IBES, Factset, broker research 3 CFO approach to value creation in Telenor Group Monetising on mobile data growth Value development of ownership in VimpelCom Increase cash flows from Asia Manage risk vs reward in India Systematic programmes on operational excellence Shareholder remuneration 4 2

3 Asian operations will continue to create value Operating cash flow* (NOK bn) Still untapped mobile voice market Significant mobile data potential Use distribution strength to enter financial services Operational excellence Optimising capital structure Q44 Q45 Q46 Q47 Q48 Q49 Q21 DiGi DTAC* Grameenphone Telenor Pakistan *) DTAC consolidated from 1 November 25 Consensus SOTP values** (NOK bn) Q44 Q45 Q46 Q47 Q48 Q49 Q21 DiGi DTAC Grameenphone Telenor Pakistan *) 4 quarters rolling operating cash flow defined as EBITDA capex, excl spectrum and licences **) Consensus Sum-Of-The-Parts values based on current shareholdings 5 India financial perspective Telenor injected INR 61 bn of equity to reach current 67% ownership Financing of peak funding in process Targeted peak funding below INR 155 bn* maintained Cash flow in line with plan despite lower revenue pick-up Uninor operating cash flow (INR bn) (35) (45 55) CMD 29 Actual + forecast (65 75) *) NOK 2.4 bn at exchange rate on 16 Sept 21 of INR/NOK = Peak funding defined as accumulated operating cash flow (OCF= EBITDA before other items Capex) up to OCF break-even 6 3

4 Major initiatives on operational excellence Significant potential identified Group wide initiatives on technology and procurement standardisation is key Business units initiatives Benchmarks Stretch targets Detailed mapping Engagement Speed Opex/sales development* 39.1 % 38.8 % 38 % < 35 % Culture e. 213 *) Existing business not including India and EDB Business Partner 7 Operational excellence drive decline in capex/sales Network swaps in Nordic and CEE operations New vendors Asset sharing Improved alignment of market development and capex Continuous follow-up, financial evaluation and prioritisation Capex/sales development* 2.4 % 13.2 % 11-12% ~1 % e. 213 *) Existing business not including India, EDB Business Partner and spectrum fees 8 4

5 Priorities for capital allocation 1 Maintain a solid balance sheet by keeping net debt/ebitda below 1.6x Net debt/ebitda at.9x end of June 21 2 Competitive shareholder remuneration Resumed dividends one year ahead of plan Initiated share buybacks Value driven, within core 3 Disciplined and selective M&A assets and regions 9 Share buybacks to supplement dividends Payout to shareholders (NOK bn)* Dividend of NOK 2. per share for FY29 Dividend policy to be reinstated from FY21 4-6% of normalised net income Dividends Share buybacks Nominal annual increase in dividend Share buybacks initiated in July 21 3% of shares outstanding within year-end 21 64% completed by 2 September e Yield, % *) 21 including payment to the Norwegian Ministry of Trade for its pro-rata share, to be paid mid-211. Dividends based on pay-out year and share buybacks from AGM in pay-out year to next AGM. Share buybacks for 21 of NOK 4.6bn based on estimated m shares at average price NOK 92. Yield (dividend + buybacks) based on share price at AGM date. 1 5

6 Balance growth profile with competitive return European telcos and Telenor organic revenue development, % YoY 1 % 8 % 6 % 4 % 2 % % -2 % -4 % -6 % -8 % Range Weighted average Telenor -1 % OTE TeliaSonera BT Telecom Swissom Telenor Portugal Telekom Belgacom Telefonica Deutsche Vodafone France KPN Total shareholder yield, 29* Sector average ~6.5% * Dividend + share buybacks. Source: Broker research, Telenor estimates based on announced share buyback programmes for 21 and actual announced buybacks YTD. 11 Well positioned to improve shareholder value Revenue growth above peers 4 Drive operational excellence 3 Competitive shareholder return 3 2 NOK 136. NOK NOK % -3% Telenor DJ Stoxx telecom index 12 6

7 Financial priorities Richard Aa, CFO Telenor Group 7