SEK 4.4 Bn -4% Operational Free Cash Flow Adjusted EBITDA* Growth

interim REPORT JANUARY – March 2019

JOHAN DENNELIND PRESIDENT & CEO

CASH FLOW AND EBITDA DEVELOPMENT Q1 2019

SEK 4.4 bn -4% Operational free cash flow Adjusted EBITDA* growth

2 * On a like for like basis, excluding IFRS 16 impact

1 REPORTING POST IFRS 16 IMPLEMENTATION

Reported sek Like for like growth Like For Like growth INcl. Ifrs 16 Illustrative graph Illustrative graph Illustrative graph

+15.0% +5.8% -4%

2018 2019 2018 2019 2018 2019 FX M&A Numbers incl. IFRS 16 M&A Numbers incl. IFRS 16 M&A Numbers incl. IFRS 16 IFRS16 est. adj.

• Reported numbers in SEK including • Growth in the existing business • Based on like for like growth but 2018 impact from M&A and changes in FX including any acquired and excluding adjusted as if IFRS16 would have any disposed businesses in current been implemented and corresponding period • At stable FX • At stable FX

RECAP OF CMD

Overall: OP FCF TO SUSTAIN AND GROW BEYOND 2019, SEK 12-12.5 BillioN A FLOOR

SUSTAINABILITY: UPpING THE GAME WITH OUR DARING GOALS

CPS: sek 0.6-0.9 Billion COST SAVINGS FROM NEW OPERATING MODEL CMD

FINANCIALS: AMBITION TO REDUCE OPEX ~2% NET ANNUALlY 2019-2021

SWEDEN: EBITDA TREND-SHIFT DURING 2020

NORWAY: GET/TDC CASH FLOW SYNERGIES INCREASED TO NOK 800 MILLION

FINLAND: FURTHER DEVELOP b2B and B2C CONVERGENCE

2 THANKS FOR THE FEEDBACK

WHAT YOU LIKED What you would have liked more of

Clear message on cash flow Structural cost opportunities

Strategic red thread BONNIER BROADCASTING

Strategic positioning of new Transparency on financials telia norway

FCF GROWTH DESPITE EXPECTED LOWER EBITDA

OPERATIONAL FREE CASH FLOW ADJUSTED EBITDA* down as MOBILE SERVICE REVENUES** remained strong expected

SEK 4.4 billion -4% -2.1% Q1 2019 VS. Q1 2018 Vs. Q1 2018

Bonnier broadcasting filing Dividend decided & buy-back Daring goals to drive process initiated mandate renewed at AGM sustainability agenda

SEK 2.36 per Share Ambition of SEK 10 BN coming 2 years

6 * On a like for like basis, excluding IFRS 16 impact ** Like for like

3 A CHALLENGING Q1 AS FLAGGED

SERVICE REVENUE DEVELOPMENT* Adjusted EBITDA DEVELOPMENT* Organic & like for like growth, external service revenues Reported in absolute, organic & like for like growth excl. IFRS 16 in Q1 19

Service revenue growth Reported EBITDA Service revenue growth excl. Telia Carrier Organic/like for like EBITDA growth

4.0% 2.0% 0.0% -2.0% 6,977 6,735 7,468 -2.4% 6,495 6,443 -4.0% -4% -6.0% -2.6% -8.0% -10.0% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

• Main drivers: Swedish legacy, mobile in • A notch better than expected based on a one-off Norway/Denmark and Telia Carrier effect in Norway

* Q1 2018-Q4 2018 based on the previous organic growth definition (stable FX and M&A excluded). 7 Q1 2019 based on the new definition “like for like growth” (Stable FX and M&A included in current & corresponding period)

MOBILE REVENUES TURNED NEGATIVE Q1

MOBILE & fixed SERVICE REVENUE GROWTH MOBILE service revenue GROWTH Organic & like for like growth Like for like total mobile service revenues

Mobile revenues Fixed revenues excl. Telia Carrier -2.1% 2%

-2% -2.1% -2.8% -4%

-6% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 SWE FIN NOR DENLIT EST LAT Q1 19

• Mobile turned negative Q1 driven by the Nordics • Contracting customer base in the Nordics • Fixed remained under pressure by legacy

4 TELIA SWEDEN - WORLD CLASS MOBILE NETWORK #1 MOBILE NETWORK IN SWEDEN #4 IN THE WORLD

BETTER TREND IN H2

Service revenues - 2019 estimated OPEX DEVELOPMENT - 2019 estimated External service revenues, like for like growth External expenses, like for like growth

-2% FULL YEAR Q1 19 Q2 19 Q3 19 Q4 19 Q1 19 Q2 19 Q3 19 Q4 19

OVERALL PRICE INCREASES FINLAND B2B GET OPEX SYNERGIES ROBOTICS AND NEAR SHORING

NORWAY easier comparison Legacy remains a burden NEW OPERATING MODEL G&A AND OTHER EFFICIENCIES

EASIER COMPARISONs (H2)

5 New operating model now in play

EFFICIENCY AND IMPROVED CUSTOMER SPEED AND FLEXIBILITY SCALABILITY EXPERIENCE

• NEW WAY OF WORKING – AGILE • DEVELOP ONCE – DELIVER 6X • EARLIER LAUNCHES OF NEW AND COMMON • ONE JOINED FORCE VS. FRAGMENTED TECHNOLOGY • COMMON PRODUCT DEVELOPMENT EFFORTS • MORE COMPETITIVE PRODUCTS IN & PLATFORM ALL MARKETS

Central cost reductions COGS and OPEX SEK BILLION 0.6-0.9 0%

-3% IN ADDITION CAPEX SAVINGS OF SEK 0.5 -6% BILLION WITH RUN- RATE END OF 2022 -9%

2016 2017 2018 RUN-rATE

TIME 11 END OF 2022

A STRONGER TELIA COMPANY EMERGING

FULL RUN-RATE GET/ BONNIER SYNERGIES COMBINED 2018 (SEK BILLION) TDC NORWAY BROADCASTING (PER YEAR) PRO FORMA

EBITDA 1.8 1.1** 4.2 (prev. 3.5) 1.3 (margin) 43.4% 13.8%  >32.5%

0.8 1.0*** 3.3 (prev. 2.7) EBITDA-CAPEX* 1.4 (cash conversion) 48.1% 91.3%  77.7%

SYNERGY BREAKDOWN

GET – NOK 800 MILLION CASH BONNIER BROADCASTING – CASH FLOW SYNERGIES END of FLOW SYNERGIES OF Sek 600 2021 million end of 2022

12 * Excluding licenses ** Assuming same depreciation in 2018 as in 2017 *** Assuming EBITA equals EBITDA-CAPEX

6 OUTLOOK REITERATED & capital MANAGEMENT IN FOCUS

OPERATIONAL FREE Operational free cash flow to be between SEK 12.0-12.5 billion C A S H F L O W (SEK 10.8 billion 2018) – is reiterated

Capital MANAGEMENT • Executed the first year of buybacks and second year initiated (stretching from April 16, 2019 - February 28, 2020) • SEK 15 billion in total or SEK 3.45 per share • Within the target of a credit rating equal to A- to BBB+ • Ordinary dividend of SEK 2.36 of which the first tranche of SEK 1.18 was distributed in April 2019

interim REPORT JANUARY – March 2019

CHRISTIAN LUIGA EXECUTIVE VICE PRESIDENT & CFO

7 LOWER REVENUES BEHIND DECLINE IN EBITDA

SERVICE REVENUE DEVELOPMENT EBITDA DEVELOPMENT Like for like growth, external service revenues Like for like growth, excluding adjustment items and IFRS 16

-2.6% -4%

Q1 18 SWEFINNORDEN LIT EST LAT Telia Other Q1 19 Q1 18 SWEFIN NORDEN LITEST LAT Telia Other Q1 19 Carrier Carrier

• Pressure from legacy and mobile revenues in • Expected softness from three largest countries Sweden • Sweden and Norway negative due to revenue pressure • Lower mobile customer base and ARPU • Finland inventory write-down, tough comparison and pressured Norway lower equipment margin

COSTS TO GRADUALLY COME DOWN OVER THE YEAR

OPEX development External expenses, like for like • Increase Q1 driven by Finland and Norway, Sweden flat • Continued solid work on cost in Denmark and lower cost 2% 1% in central functions including CPS • Cost increase driven mainly by: 0% • (+) energy -2% • (+) marketing • (+) bad debt -4% • (-) resources

-6% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 -2% FULL YEAR

opex reduction target 2019 remains

8 SWEDISH COST LEVEL TO COME DOWN OVER THE YEAR

SERVICE REVENUES* & EBITDA** OPEX development - 2019 estimated SEK million, reported currency & like for like growth excl. IFRS 16

-2.7%

7,622 7,421

-6%

3,421 3,422

-3% FULL YEAR Q1 18 Q1 19 Q1 18 Q1 19 Service revenues EBITDA Q1 19 Q2 19 Q3 19 Q4 19

• Weaker trend from previous quarters mainly • Q1 cost base flattish, where resource costs are related to mobile service revenues slightly down, offset by marketing and energy costs • Initiatives will impact second half more which also have easier comparisons

17 = Like for like growth excl. IFRS 16 * External service revenues ** Excluding adjustment items

Continued Revenue PRESSURE in sweden

SERVICE REVENUE DEVELOPMENT MOBILE – B2C Reported currency, external service revenues In local currency, postpaid ARPU

B2C excl. fiber OTC B2B B2C Mobile B2C postpaid ARPU Mobile B2C revenue growth B2C

-2.6% B2B -2.9% -3.3% 0% -1%

Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

• B2C - weaker mobile and continued legacy pressure • ARPU slightly down • Unchanged situation in B2B • less top-ups • Positive pricing effects from Q2 and onwards • Reduced prepaid customer base

9 STABLE IN FIXED BUT PRESSURE ON MOBILE IN NORWAY

SERVICE REVENUES* & EBITDA** Broadband/TV service REVenue development SEK million, reported currency & like for like growth excl. IFRS 16 SEK million, like for like, external service revenues

TV revenues Broadband revenues -4.2% 900 3,130 -4% 2,129 600 1,516 1,008 300

Q1 18 Q1 19 Q1 18 Q1 19 Service revenues EBITDA 0 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19

• Loss of subscriptions and lower ARPU pressured • Broadband growth of 5% from customer uplift mobile revenues • SEK 100 million positive EBITDA impact from sale of earlier impaired customer receivables

19 = Like for like growth excl. IFRS 16 * External service revenues ** Excluding adjustment items

tough start - to improve over the year

SERVICE REVENUES* & EBITDA** MOBILE SUBSCRIPTIONS AND ARPU SEK million, reported currency & like for like growth excl. IFRS 16 Total subscription base in 000’, ARPU in local currency

3,400 20 -0.3% Subscriptions ARPU 19 3,084 3,273 3,300 +0.6% 18 -8% 3,200 17 1,151 1,223 3,100 16

3,000 15 Q1 18 Q1 19 Q1 18 Q1 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Service revenues EBITDA

• Mobile pressured by interconnect and TV supported • Loss of MBB subscriptions represented around half fixed revenues of the drop • Inventory write-down and lower equipment margin • Big B2B contracts won not yet visible in the numbers • Increased marketing spend

20 = Like for like growth excl. IFRS 16 * External service revenues ** Excluding adjustment items = ARPU growth y-o-y

10 Good performance in estonia

SERVICE REVENUE DEVELOPMENT Adjusted EBITDA DEVELOPMENT Like for like growth, external service revenues SEK million, reported currency & like for like growth excl. IFRS 16

Estonia Lithuania Denmark -2% +5.1% +5% 345 +1% 318 272 -4.8% 234 219 141 -5.8% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q1 18 Q1 19 Q1 18 Q1 19 Q1 18 Q1 19 Lithuania Estonia Denmark

• Drop in low margin fixed revenues, but solid mobile • Good work on costs in Denmark in Lithuania • Revenue growth supported EBITDA in Estonia • Continued solid performance in Estonia • Mobile revenue erosion in Denmark behind decline

21 = Like for like growth excl. IFRS 16

Slightly higher capex driven by get

CAPEX EXCLUDING LICENSES SEK million, rolling twelve months (R12), excluding right-of-use assets

Booked CAPEX excl. licenses (R12) 16,000 Cash CAPEX excl. licenses in stable FX (R12) • Higher CAPEX in Norway from consolidating Get 15,000 • Fiber capex decline not visible until later during the year due to seasonality in roll-out 14,000

13,000

12,000 Q1 17 Q2 17* Q3 17 Q4 17 Q1 18 Q2 18 Q3 18* Q4 18 Q1 19

22 * Booked CAPEX impacted Q2 2017 by Liiga and Q3 2018 by Helsinki data center

11 Higher net debt due to ifrs 16

NET DEBT DEVELOPMENT Continuing and discontinued operations, SEK billion Swedish 700 MHz paid – SEK 1.1 billion 2.44x • Final part of Uzbek legal settlement paid – +0.5 70.0 • +15.3 SEK 1.9 billion • SEK 15 billion initial impact from IFRS 16 Of which SEK 1.97x 1.1 billion for (0.5x impact on leverage) spectrum in Sweden Based on a steady-state assumption, the 55.4 • +1.9 +1.0 impact on leverage from IFRS 16 is +4.3 estimated to come down by 0.2x over the year -8.3 • Fintur cash of around SEK 3.7 billion distributed to Turkcell in April 2019 Q4 18 OperationsCash Uzbek Buy-backs IFRS 16 FX & Q1 19 CAPEX settlement Other • First dividend tranche of SEK 5 billion paid in April 2019

23 = Leverage ratio (including a full year of Get in Norway)

CASH FLOW continued to grow

OPERATIONAL FREE CASH FLOW development SEK billion, rolling twelve months Operational free cash flow 14 SEK 11 billion 12 Q1 2019 2019E 10 (SEK billion) (y-o-Y) 8 EBITDA 7.5

6 NWC 1.1 4 CAPEX ex. licenses -3.2 2 0 Other -1.0 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Total OP FCF 4.4

Outlook: • Operational free cash flow not affected by IFRS16 Operational free cash flow • Continued strong working capital development of SEK 12-12.5 billion • Pension refund of SEK 850 million in Sweden to cover pension outflow (vs. SEK 675 million Q1 LY)

12 Q&A

Estimated IFRS 16 IMPACT

ESTIMATED QUARTERLY IFRS 16 IMPACT ON ADJUSTED EBITDA LIKE FOR LIKE

Estimated IFRS 16 • The estimates have not been SEK billion impact Continuing operations 0.71 audited and are based on a Sweden 0.21 high-level assessment Finland 0.12 Norway 0.10 Denmark 0.07 Lithuania 0.02 Estonia 0.01 Other 0.17

13 EPS development

TOTAL EPS DEVELOPMENT SEK, continuing and discontinued operations

+0.59 0.65 0.43

Q1 2018 impacted by capital losses from the disposals of Azercell and Geocell as well as a write-down in Uzbekistan

0.10 0.01 -0.16 -0.03 -0.14 Q1 18 OperationsAssociates Finance net & tax Other Discontinued Q1 19 operations

CONTINUING OPERATIONS

DISCLAIMER & FORWARD-LOOKING STATEMENTS

This document contains the use of alternative performance measures (APM’s) to provide readers with additional financial information that is regularly reviewed by management, such as adjusted EBITDA, CAPEX and operational free cash flow. These APM’s should not be viewed as a substitute for Telia Company’s IFRS based figures, but as a complement. APM definitions can be found in Telia Company’s interims reports and Annual and Sustainability Report 2018 and may be defined differently by other companies and are therefore not always comparable to similar measures used by other companies. Telia Company’s management considers these APM’s combined with IFRS performance measures and in conjunction with each other, the most appropriate way to measure the performance of Telia Company.

Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Telia Company.