annual and sustainability report 2018

bringing the world closer

Telia Company in one minute

WE ARE TELIA COMPANY

We are Telia Company, the new generation telco. We provide communication services
helping millions of people to be connected and communicate, do business and be entertained.

20,400

Employees

24

Million subscriptions

83.6

SEK billion net sales

10.8

SEK billion operational free cash flow

OUR VALUES

DARE
CARE
SIMPLIFY

WE PROVIDE

We connect businesses, individuals, families and communities via fixed and mobile communication solutions. The services we provide include:

IP
capacity

Mobile voice
and data

TV and
media

Fixed voice
and data

ICT
services

THE WORLD’S #1 BACKBONE

Telia Carrier’s fiber backbone runs around the world and is the largest in the world with operations in 35 countries.

2018 IN BRIEF

THE VALUE WE CREATE

By being an enabler of digitalization for good we generate a sustainable increased
economic value and a positive impact on society and the environment.

3,090

Total net income (SEK million)

2.36

Proposed dividend per share (SEK)

21%

Total shareholder return

Net sales per country

Sweden, 43%

Finland, 18%

Norway, 14%

Denmark, 7%

Estonia, 4%

Lithuania, 5%

Latvia, 3%

Telia Carrier, 7%

Net sales per service

Mobile, 45%

Fixed telephony, 4%

Fixed broadband, 8%

TV, 4%

Business solutions, 7%

Other, 9%

Telia Carrier, 6%

Equipment, 17%

Net sales per segment

Wholesale & Other, 15%

B2B, 51%

B2C, 34%

Adjusted EBITDA per country

Sweden, 49%

Finland, 18%

Norway, 17%

Denmark, 3%

Estonia, 4%

Lithuania, 5%

Latvia, 3%

Telia Carrier, 2%

COMMENTS FROM THE CEO

AN EVENTFUL YEAR

Telia Company is now basically a Nordic and Baltic company as we have completed the divestment of the operations in Eurasia in all material aspects. Now we can put all efforts and resources into developing the company in our home markets including our global carrier operation. We meet our customer under the Telia brand in six countries and the subsidiaries become more and more integrated into the group.

Johan Dennelind
President and CEO

READ THE CEO'S COMMENTS

Telia Company should stop being on the planet's minus account to instead become part of the solution to the climate problem and the environmental impact.

COMMENTS FROM THE CHAIR

OUR ENVIRONMENT IS CHANGING AND SO ARE WE

The Board of Directors that joined me in 2013 received a comprehensive change mandate from the shareholders of Telia Company. Since then, we’ve made major changes and during 2018, we divested our companies in Azerbaijan, Georgia, Kazakhstan and Uzbekistan. Leaving Eurasia took longer than planned, but we took the time we needed. The most important thing was to exit the right way and responsibly, without rushing.

Marie Ehrling
Chair of the Board

READ THE CHAIR'S COMMENTS

The ability to rethink and think again distinguishes well-managed companies. New parts are added at one end while old parts are removed or refurbished in the other. That is how it should be.

TRENDS AND STRATEGY

DIGITALIZATION IS SHAPING THE FUTURE

Technology, society and businesses are under transformation and cutting across this transformation is a constantly growing connectivity need. Telia Company's strategy is based on continuos development of our core business.

BUSINESS

The impact of digitalization
Data enables new business models
Value-driven branding

TECHNOLOGY

The impact of digitalization
Data enables new business models
Value-driven branding

SOCIETY

The impact of digitalization
Data enables new business models
Value-driven branding

AMBITIONS

The most loyal and satisfied customers in our markets

Total shareholder return on par with the top relevant European peers

Industry leader in delivering digital impact in accordance with the UN's Sustainability goals

The most engaged employees

GREAT PEOPLE, SPEED AND INNOVATION

Great people, speed and innovation form the basis of our strategy execution.

In addition to a strong governance framework with best in class ethics and compliance, our values dare, care and simplify drive our people behavior with self-leadership, customer passion and cost ownership as cornerstones.

CONNECTIVITY LEADERSHIP

Best network experience across platforms.

We offer customers a seamless experience independent of which networks they are moving between, combined with an excellent customer experience that creates customer loyalty. As mobile and the fixed networks are converging, we optimize the transportation of data to secure both the experience and the production of data. Our leadership will be maintained in fiber and 4G into 5G.

RELEVANT CUSTOMER VALUE

Hub to digital experiences in homes and offices.

Our value proposition to win the home is based on our customers’ need for convenience and safety. Our brand is strong and trusted to deliver home services. Media is a key pillar in our mass-market approach, where we provide unique offerings with exciting content delivered everywhere.

SUSTAINABILITY

FOR A SUSTAINABLE TOMORROW

Telia Company is committed to ethical, responsible business practices and creating positive societal and environmental impact throughout our value chain, from customers to suppliers.

OUR APPROACH TO SUSTAINABILITY

SHARED VALUE CREATION

RESPONSIBLE BUSINESS

HIGHLIGHTS DURING THE YEAR

Telia Company's President and CEO Johan Dennelind together with a group of Nordic CEOs launched a coalition on the advancement of the UN Sustainable Development Goals in the Nordics. A key objective is to explore ways to deliver more impact through collaboration and responsible business practices.

Divestments of assets in region Eurasia underwent strict due diligence carried out by both internal and external expertise. Due diligence covered for example identifying Ultimate Beneficiary Owners (UBOs) and anti-money laundering controls. Human Rights Impact Assessments on the companies were earlier conducted by external expertise.

SUSTAINABILITY RECOGNITIONS

Telia Company was included in or remained a constituent of several Environmental, Social and Governance (ESG) indices, including:

• MSCI ESG AAA rating
• FTSE4Good
• Gold supplier rating in EcoVadis
• Bloomberg Gender Equality Index

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OUR COMPANY
BOARD OF DIRECTORS’ REPORT – GROUP AND COUNTRY
BOARD OF DIRECTORS’ REPORT – SUSTAINABILITY
BOARD OF DIRECTORS’ REPORT – RISKS AND UNCERTAINTIES
CORPORATE GOVERNANCE STATEMENT
FINANCIAL STATEMENTS
SUSTAINABILITY NOTES
OTHER