Annual and Sustainability Report 2020 Content

BETTER CONNECTED LIVING ANNUAL AND SUSTAINABILITY REPORT 2020 CONTENT OUR COMPANY Telia Company at a glance ...................................................... 4 2020 in brief ............................................................................ 6 Comments from the Chair ..................................................... 10 Comments from the CEO ...................................................... 12 Trends and strategy ............................................................... 14 DIRECTORS' REPORT Group development .............................................................. 20 Country development ........................................................... 38 Sustainability ........................................................................ 48 Risks and uncertainties ......................................................... 80 CORPORATE GOVERNANCE Corporate Governance Statement ......................................... 90 Board of Directors .............................................................. 104 Group Executive Management ............................................ 106 FINANCIAL STATEMENTS Consolidated statements of comprehensive income ........... 108 Consolidated statements of financial position ..................... 109 Consolidated statements of cash flows ............................... 110 Consolidated statements of changes in equity .................... 111 Notes to consolidated financial statements ......................... 112 Parent company income statements .................................... 197 Parent company statements of comprehensive income ....... 198 Parent company balance sheets ......................................... 199 Parent company cash flow statements ................................ 200 Parent company statements of changes in shareholders' equity ............................................................ 201 Notes to parent company financial statements .................... 202 SUSTAINABILITY NOTES Sustainability Notes ............................................................ 226 OTHER INFORMATION Board of Directors' and President's certification ................... 243 Auditors' Report .................................................................. 244 Auditors' Limited Assurance Report on the Sustainability Report ............................................................ 248 Five-year summary ............................................................. 249 Alternative performance measures ...................................... 251 Definitions ........................................................................... 255 Annual General Meeting 2021 .............................................. 257 The audited annual and consoli- The sustainability information dated accounts comprise pages (which also constitutes the statu- 20-225 and 243. The corporate tory sustainability report) reviewed governance statement examined by the auditors comprises pages by the auditors comprises pages 48-79 and 226-242. 9 0 -107. “Connectivity has become part of the very fiber of life” Allison Kirkby, President and CEO OUR COMPANY Telia Company at a glance TELIA COMPANY AT A GLANCE WHAT WE DO We connect businesses, individuals, families and communities via communications, technology, information and entertainment products and services. Our operations have a positive influence on social, economic and environmental development and pave the way for an inclusive society. We help people to stay in touch even when far apart. By being connected they can explore, invent and share. This is our business. Our passion. Everything we do is about reinventing better connected living. Our values Dare, Care, Simplify guide us when we deliver on our purpose in our daily work. WHO WE ARE We are Telia Company. With a strong connectivity base, we are the hub in the digital ecosystem, empowering people, companies and societies to stay in touch with everything that matters 24/7/365 - on their terms. 20,700 89.2 Employees SEK billion in net sales WE PROVIDE MOBILE VOICE IP CAPACITY FIXED VOICE ICT SERVICES AND DATA AND DATA TV AND DEVICES FINANCING MEDIA 4 TELIA COMPANY ANNUAL AND SUSTAINABILITY REPORT 2020 OUR COMPANY DIRECTORS’ REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SUSTAINABILITY NOTES OTHER WHERE WE OPERATE Telia Company has its roots in Sweden and Finland. Today we are well- established in all the Nordic and Baltic countries. All our mobile operations in Eurasia have been divested, including Moldcell in Moldova which was divested in the first quarter of 2020. In October we divested our stake in Turkcell Holding. SVERIGESWEDEN FINLAND NORWAY #1 34% #2 31% #2 36% #1 49% #3 25% #2 16% #1 31% #3 20% #2 19% #2 19% #2 20% Ownership1: 100% Ownership1: 100% Ownership1: 100% DENMARK ESTONIA LITHUANIA LATVIA TV AND MEDIA #3 18% #1 50% #2 29% #1 46% #3 7% #1 83% #1 80% #5 3% #1 51% #1 52% #4 1% #2 38% #1 37% Ownership1: 100% Ownership1: 100% Ownership1: 88.2% Ownership1: 60.3% Ownership1: 100% 1) Ownership is defined as direct and indirect ownership, i.e. effective ownership and Telia Company’s market share estimate is based on the number of subscriptions. is equal to consolidated share. Mobile Fixed voice Broadband TV # Market position % Market share 5 TELIA COMPANY ANNUAL AND SUSTAINABILITY REPORT 2020 OUR COMPANY 2020 in brief 2020 IN BRIEF 2020 has been a year of change and challenge. The most obvious challenge was of course COVID-19 and throughout the pandemic Telia has remained resilient, keeping its operations going, work- places running and enabling people to stay in touch with loved ones. At the same time, we onboarded a new CEO, made several divestments, entered into strategic 5G partnerships, made sub- stantial changes to the Group Executive Management and started the work to renew Telia’s purpose and strategy. CONTINUING OPERATIONS SERVICE REVENUES ADJUSTED EBITDA OP. FREE CASH FLOW DIVIDEND 77, 342 30,702 12 .1 2.00 SEK million (73,455) SEK million (31,017) SEK billion (12.6) Proposed dividend per share, SEK (2.45) s OUR COMPANY DIRECTORS’ REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SUSTAINABILITY NOTES OTHER NET SALES By segment By service By type n Sweden, 38% n Lithuania, 5% n Mobile, 40% n TV, 8% n B2C, 52% n Finland, 17% n Estonia, 4% n Equipment, 13% n Advertising, 5% n B2B, 35% n Norway, 15% n TV and Media, 8% n Fixed broadband, 9% n Fixed telephony, 3% n Operator and Other, 13% n Denmark, 6% n Other, 8% n Business solutions, 8% n Other, 14% CREATED VALUE OPERATIONAL DATA 17.0 3.2 2.9 1.2 Mobile subscriptions (million) TV subscriptions Fixed broadband Fixed voice subscriptions (million) subscriptions (million) (million) SOCIAL DATA 38% 78/100 120,000 106 Share of females in the Employee engagement Children, parents and Supplier audits Extended Leadership Team and satisfaction score seniors reached through carried out by Telia digital inclusion initiatives Company auditors ENVIRONMENTAL DATA 100% 0 CO2 16% 2% Renewable electricity use Climate neutral in own Supply chain Refurbished phones operations through reductions emissions covered by of total sales and offsetting science-based targets TURN FOR MORE 2020 HIGHLIGHTS 7 TELIA COMPANY ANNUAL AND SUSTAINABILITY REPORT 2020 OUR COMPANY 2020 highlights 2020 IN BRIEF 2020 highlights NEW LEADERSHIP In May, Allison Kirkby took over as Presi- dent and CEO of Telia Company. Allison has extensive experience from various positions within the telco industry, most recently as President & CEO of TDC FIRST GREEN BONDS ISSUED Group. Additionally, we made signifi- cant changes to the Group Executive As the first telco in the Nordic region, Management. Markus Messerer was ap- we issued a green hybrid bond of pointed SVP and Chief Strategy & Com- EUR 500 million in February followed mercial Officer, Rachel Samrén as SVP by a SEK 750 million green senior and Chief External Affairs, Governance bond in June. The proceeds were & Trust Officer, Heli Partanen SVP and used primarily for energy efficiency CEO of Telia Finland and Dan Strömberg measures, in particular replacing cop- as SVP and Head of LED. Per Chris- per with more energy efficient fiber. tian Mørland was appointed EVP and Group Chief Financial Offcer and Rainer Deutschmann as SVP and Group Chief Operatiing Officer. Effective January 1, 2021, Per Carleö took on the position as SVP and Head of Brand. 2020 DIVESTMENT OF MOLDCELL COMPLETED FIRST MAJOR 5G NETWORK UP AND RUNNING IN STOCKHOLM KEEPING COMMUNITIES CONNECTED DURING COVID-19 During these challenging times, helping new technology among seniors and edu- communities cope with the consequen- cational inequalities perpetuated by a lack ces of the COVID-19 pandemic has been of connectivity or equipment. Telia addres- our number one priority. During the year, ses such disparities, through e.g the Go the entire Telia team worked tirelessly to Digital (Mer digital) program that supports keep people and enterprises in the Nord- municipalities in building digital skills. ics and Baltics connected, informed and During the pandemic we also developed a entertained. One issue highlighted by the similar program, Become digital (Bli digital) COVID-19 pandemic is the digital divide, to support small and medium-sized enter- in particular the lack of understanding of prises in their digitalization journeys. 8 TELIA COMPANY ANNUAL AND SUSTAINABILITY REPORT 2020 OUR COMPANY DIRECTORS’ REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SUSTAINABILITY NOTES OTHER SCIENCE BASED TARGETS ADOPTED As part of our commitment to reach zero

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