TE Connectivity Ltd. Price & Performance (TEL)

A common thread has been a passion for working with technology and people to transform and improve customer experiences and drive results. And my top priority is customers. And from the picture on this slide, you can see me engaging with customers on the very first day at work in Telenor Telenor. I have a very strong commitment to shareholder remuneration but also capital management. And I can assure you that return on capital will be front and center in capital allocation decisions. In getting to know Telenor, one of the things that have impressed me the most is the quality and the competence of the people. The execution culture, our strong commitment to excellence in secure connectivity as well as our long and proud history. And this has left me with very high expectations for the time ahead, and I'm looking forward to work with my new colleagues to chase further potential in monetizing pockets of growth and transforming customer experiences. So let's take a look at our key priorities for 2025. Since the Capital Markets Day two point five years ago, we've made good progress in the And this team this year, sorry, my team and I will have two main tasks.

The execution on 2025 as the final year of our current strategy was making sure we evolve our strategy for the years ahead. And we will get back to you on the outcome of this process at the Capital Markets Day in Q4. In terms of the execution priority, I recently finalized the composition of the group management team, which now has executive with long Telenor from the company as well experienced from the telecoms industry and other sectors.

And in 2025, we will continue to pursue the value creation strategies that are adapted to the characteristics of each of our four business First and foremost, we are a leading connectivity provider in The Nordics. And here, it will be key to continue implementing On our implementing our more for more monetization strategy. And transformation program. We also have assets in Asia that are important for our cash flow generation and medium term earnings growth profile. And we will continue to pursue growth and profitability in Chromium Phone. We will also continue to work as active owners alongside our partners in our associated companies, TRU and Selkom Digi, to nurture growth in order to continue to take out synergies and increase dividend flows. On top of that, we have key assets and ambitions for our infrastructure and AMP areas, each of which have their own distinct value creation strategies. We will continue to evaluate evaluate any good inorganic opportunities that may arise across all four of these business areas with a view creating shareholder return over time. [indiscernible] With that introduction, let's take a closer look at the quarter. In Q4, we saw a solid performance across our businesses, even though the headline numbers were somewhat negatively affected by a few one offs as well as the macro development in Bangladesh.

Which unfortunately continued to weigh on our group results. In the quarter with fairly brisk competition and low inflation in The Nordics, we did quite well both in terms of service Telenor, growth and EBITDA. Our Nordic transformation efforts were paramount to an EBITDA growth of 6%. In Asia, our team in Bangladesh has shown tremendous resilience. And despite difficult macro conditions. We also saw impressive performance by our business in Pakistan and continue to receive progressive dividends from Selkom Diddy. Our free cash flow was once again even stronger than we had hoped. The total free cash flow including M and A of SEK 13,300,000,000.0 in 2024, exceeded the proposed dividend payments for the year. The progress on our ESG agenda was also very solid in 2024, and our commitment to sense sustainability remains strong. We made significant strides in reducing of Scope one and two emissions and the share of spending covered by science based targets. So let me now turn to give you a quick operation update for our Nordics area and the number one driver for our financial performance in 2024. At its core, our Nordic transformation program is about further improving the customer experience, enable future growth, and drive operational efficiencies.

And in order to achieve that, we need to replace legacy legacy technology, simplifying the IT stacks as well as the way we work. In addition, we will align around best practices methods and leverage scale and each other's successes across the organization. And we met or exceeded all the goals we set out for in 2024. For the four mentioned areas. So let me start from the left. Within Network and IT, our progress has been running ahead of schedule, and we shut down more than sixty sixty eight more systems than targeted. Within shared services, we moved transactional back off office activities to a new shared service hub in Portugal. Also beating our OpEx savings KPI and this will be ramped up further this year. We also have a common program in place focused Our structural improvement initiative generated approximately €800,000,000 in gross improvements, compared to the target of around €500,000,000 And then on the commercial side, Nordic TV and Nordic managed services have now become two separate cross Nordic teams. And these efforts enable us to save costs, but also to use our scale to develop attractive solutions for our customers. These are the pan Nordic activities and most of the transformation will happen on the business unit or country level.

With regard to our workforce, we have on average reduced the workforce by 4% per year since 2016. And we reduced external and internal FTEs by 6% in The Nordics in 2024, well in line with the indications we made last year. As a consequence of the need to stay future fit, I foresee that the drawdowns will be at least in the mid single digits in the years ahead. In line with what we've indicated earlier. And before I welcome our CFO to the stage, I'd like to spend a few seconds on this slide. I'm pleased to say that we delivered yet another year of strong free cash flows in 2024, well above our original ambitions. I'm also happy to present a new outlook that reconfirms our financial ambitions covering our dividends in 2025. With free cash flows before M and A. On the back of increased line of sight for key 2025 drivers, we expect to deliver free cash flow before I'm so sorry to steal your thunder there for a moment, Torbjorn, but I'm sure you have more of it left. We'll try. Good luck. Thank you. Thank you, Benedikte.

And good morning to everybody. Delighted to be here to present the financial side of the presentation. But before I go into the financials, I would like to say a few words about my background and key focus areas coming into the role. Which I have now held for five extremely engaging weeks. First of all, I'm very excited about returning to Telenor where I previously spent some thirteen point five years. I joined the group from Valenius Wilhamson, where I was the CFO for the last four and a bit years and where I also held the role of [indiscernible] Prior to this, I was the CFO of Scandinavian Airlines, having joined the airline from Telenor. Before Telenor, my formative years were spent in investment banking, primarily covering the Telenor sector. So I guess you can say that I'm returning home, perhaps unlike English football.

Now with my experience from capital intensive businesses, the following three priorities are very high on my agenda. Coming into the role as Group CFO of Telenor Telenor. First, we need to make sure we have full momentum on a day to day basis to deliver on our promises for 2025. Secondly, shareholder remuneration is key for a company like us and in our top of industry with predictability, growth, and coverage of dividends, while at the same time maintaining a strong balance sheet. Thirdly, we need to manage capital strategically. Optimizing for the long term economic return on capital. And to do this, we must keep a strict eye on capital efficiency and scrutinize returns in terms of how we allocate our capital. And these will also be important parameters as we evolve our strategy for the 2026 to 2028 period to be presented later in the year. Then let me take you through the highlights for the quarter. Starting with '24, total service revenue growth was 3.3% for the group, for which mobile service revenue growth in The Nordics of 4.6% was the main driver. EBITDA growth came in at 3.5%. CapEx to sales, excluding leases for the group, were 16% as we sustained a relatively elevated level of investments in The Nordic. [indiscernible] We ended the year with a strong free cash flow before M and A of €11,400,000,000 and €13,300,000,000 if you include proceeds from M and A. Zooming in on Q4, Service revenues grew by just over 1%.

And EBITDA came in at 2% as the macro setback in Bangladesh as well as three special items weighted on the numbers. Adjusted for these items, service revenues would have been close to 2% and EBITDA growth would have been 4.1%. CapEx to sales at 19% was driven by pace of network rollout in The Nordics alongside a minor catch up effect as mild winter weather allowed us to continue rollout programs for longer. In addition, we completed 100% population coverage of five gs in Finland and the swapping of substantially all base station equipment in Sweden in compliance with regulatory requirements. Following a strong execution in Nordic, supported by some phasing effects as well as structural improvement in working capital, we generated a strong cash flow of SEK 3,100,000,000.0 before M and A, in the quarter. This is a much stronger than anticipated which I will cover later in the presentation. As we dive in, let me start with group service revenues. As you can see on the right hand side, the Nordic delivered according to plan, except for a VAT case in Norway, which dented fixed revenues slightly. However, the challenging [indiscernible] despite the best efforts of the team on the ground. [indiscernible] Turning to OpEx.

In Q4, we saw a flat development in OpEx year over year. In the Nordics, we saw a continued and substantial reduction [indiscernible] partly offset by an increase in sales and marketing costs in quite a promotional quarter. In the Nordics, we reduced costs 1% in Q4, as a somewhat greater efficiency gain was masked by a one off in Sweden. [indiscernible] Our group EBITDA was impacted by the two one offs in the Nordics in addition to a negative one off effect from a correction of revenue items from previous years in Bangladesh as well as the overall macro situation in the country. While growth in the Nordics contributed strongly to EBITDA, these one offs in addition to the negative EBITDA growth in Bangladesh, slowed growth for the group to 2%. Adjusted for these onetime items, however, the number would have been 4.1% as mentioned previously. Now with 18% growth, quite a few things went amps way this quarter. Bucking the negative trend from recent quarters. And while not completely out of the woods yet, we believe Ampou will return to a more consistent growth from the second half of this year. Turning to revenue growth in The Nordics.

Service revenues in Telenor Nordics came in at 2.3%, an adjusted for the VAT related case that I mentioned, underlying growth was at 2.6%. The service revenue growth in The Nordics was primarily driven by mobile service revenues of 3.3%. D and A in Finland delivered another strong quarter and making the largest contribution to top line growth. And I'm very pleased to see that DNA delivered more than 6% mobile service revenue growth year on year in a quite competitive and promotional [indiscernible] In Norway, we grew mobile ARPU by 4.9%, continuing our more for more strategy, and this was secured by building on our strong network and security brand position and by adding new security services into our mobile portfolio and through our separately sold digital security and safety subscriptions. Yesterday, we built further on this strategy as we announced a new mobile and caller ID included. Fixed service revenues in Norway were driven by broadband ARPU growth of 3.6%, though growth in fiber connection was somewhat more than offset by a decline on the cable and fixed wireless access side, in line with recent trend. We saw a strong net additions in both Sweden and Denmark in the quarter.

Mobile service revenues grew close to 5% for the quarter in Denmark. Sweden was able to drive sequential subscriber growth of around 30,000 new postpaid customers, but revenue growth was held back by a challenging year on year comparison and a couple of special revenue recognition items last year. We do not see the flatness in Sweden as representative going forward, and we feel reasonably well positioned heading into 2025. Moving to EBITDA. All businesses contributed to a solid growth of 6% in The Nordics. Adjusting for one offs and assuming flat energy costs, the figure would have been 6.2%. Without the energy assumption, we would have been at 7.4%. Execution on our transformation agenda led to efficiencies that that effectively offset meaningfully higher sales and marketing costs in the quarter with quite pronounced campaign seasonality across The Nordics. In Asia, our colleagues in Telenor, Pakistan truly knocked it out of the park in Q4 with 12% service revenue growth, thanks to strong pricing efforts in percent EBITDA growth, which was also helped by lower energy costs in the country. However, Grameenfone, again, despite the team's best efforts on the ground, was a drag on our Asia total as we did not see any pickup in consumer spending during Q4.

On top of the macro conditions, the performance was way down by a NOK90 million revenue correction and a larger than usual bad debt provision. As usual, we also received a quarterly dividend from Then let's take a look at the P and L, cash flows and leverage. [indiscernible] In our P and L, EBITDA and operating profit were reasonably flat year on year method in variable currency. However, the contribution and net income from associated companies improved by more than €1,000,000,000 due to improved underlying profitability in True and an impairment in True's books last year. The main special item on our side was the SEK $411,000,000 impairment of goodwill in our associated company Carousel. Our financial items were lower than usual favorably impacted by fair value adjustments on interest rate swaps. And as we approach the bottom line, there was a loss on discontinued discontinued operations of SEK184 million, mainly related to accrued interest and currency effect on our residual obligations in India. This led us to an EPS at SEK 1.27 for the quarter and NOK13.88 for the full year, both significantly better than the year before. And as you may recall, last year was affected by write downs that have been more than reversed [indiscernible] Just briefly on the balance sheet.

Our balance sheet remains strong and has a manageable and prudent maturity profile. The sequential increase in net leverage to 2.4 was mainly driven by our payment of the second tranche of our 2023 dividends, as well as a small unfavorable FX impact. Now as in Q2 of twenty twenty three, the ratio ended the leverage ratio ended slightly above our target range of 1.8 to 2.3. But as we have flagged in the past, this may occur from time time depending on the seasonality of dividend payments, currency fluctuations and other factors impacting EBITDA such as the macro set back in Bangladesh. We expect the leverage ratio to return to the target range during the year with EBITDA growth and increased dividends from associated companies being the key contributors. Specifically, we expect to see meaningful dividends from TRU in Thailand in the second half of the year. Having generated SEK 2,800,000,000.0 of free cash flows before M and A in the third quarter and we topped this with €3,100,000,000 in Q4. We had some favorable timing effects on working capital, with €300,000,000 of payments slipping into the first quarter of this year. We've also phased in a bit more than €500,000,000 in third party handset financing.

However, we believe nearly half of the €1,600,000,000 improvement in working capital is of a more structural nature. In retrospect, I think it is fair to recognize that some of the timing effects we've talked about in recent quarters indeed represent improvements of a more structural nature rather than a series of timing effects. And this is because we've deployed a broad working capital toolbox and improvement agenda looking at accounts receivable, accounts payable and inventories. In Q4, we saw the normal seasonality of CapEx with a portion of the payments being pushed into Q4 Q1 this year. In the same quarter last year, this seasonality was somewhat less pronounced. As mentioned, we also received quarterly dividends from Cellcom Digi, And on the outflow side, as flagged in Q3, we had a residual payout to non controlling interest in Bangladesh. Of course, once we take dividends from Bangladesh, our minority partner will also get their share. Next, I want to note the sequential increase of close to €300,000,000 in quarterly lease payments. Parts of this increase is related to timing of payments, and part is due to increased tower leases in Asia, as well as refresh and rollout of customer equipment.

We do see lease payments increasing going forward, with Q4 being a close proxy to the average level we expect in 2025, Nevertheless, amounts will of course vary between quarters. We ended the year with €11,400,000,000 of free cash flow before M and A, a result with which we are very, very pleased. Now let's move to dividends and outlook. Starting with the dividends. As mentioned, delivering on our shareholder remuneration policy is very, very key to us as management and to our Board. And we continue to deliver on our fifteen year track record of consistent nominal growth in dividends. In accordance with our dividend policy of growing dividends per share, the Board has proposed a dividend for 2024 of $9.6 per share for approval at the upcoming AGM with payments falling due in June and October of this year. This brings us to our financial outlook. And I'm happy to say that we partially outperformed our own expectations for the full year and the fourth quarter of twenty twenty four. But as we all know, goalposts, they continue to shift.

So now let's look at our 2025 guidance.

In The Nordics, we expect a low single digit growth in service revenues. As for Nordic EBITDA, we expect mid single digit growth while we foresee a CapEx to sales excluding leases of around 14% in The Nordics, this is down from the more elevated 17% level we had in the years from 22% to 24%. And in nominal terms, this equates to a €1,500,000,000 to €2,000,000,000 step down from the 2022 level of €10,000,000,000 depending of course on currencies and timing of project milestones. As for the group outlook, we expect group EBITDA to grow in the low to mid single digits, where the outlook [indiscernible] strength as well as speed of recovery in Bangladesh. Also note that we still include Pakistan in the outlook. The regulatory approval process in Pakistan is a bit delayed, but we still expect expect the deal to close by late Q2. In any event, we do not expect the exact timing of closing to significantly impact our outlook. Now as for quarterly seasonality and comparability in 2025 versus 2024, I would like to remind you that we had a particularly strong Q1 last year with an extra day of revenues as well as some phasing effects on marketing and sales costs to later quarters, In addition, we will face tougher comparable quarters in Grameenphone in the first half of the year, because obviously the macro conditions we are experiencing now were not present last year.

On free cash flows, we outperformed the 2024 outlook quite significantly, and this was mostly due to working capital. But we nevertheless reconfirm our ambition of dividend coverage for 2025 with around €13,000,000,000 in free cash flow before M and A. Finally, let me be clear on how what we view to be the main building blocks for our cash flow outlook. And these remain: number one, continued growth and transformation in The Nordics Number two, reduced capital intensity in The Nordics. And number three, increased dividends from associates. The first two are given by the outlook for The Nordics and is, of course, a substantial sum taken together. [indiscernible] The third incremental element remains our expectation of increased dividends from our associates, mostly from Tru which do not pay dividends currently. And our clear expectation is that TRU will start to contribute with meaningful dividends from the second half of this year. In terms of the impact of other areas, first, while we will continue to work to reduce working capital meaningfully, also in 2025, we expect a year on year delta to be negative given the strong €2,700,000,000 cash flow from working capital in in 2024. Secondly, lease payments are increasing as mentioned earlier.

And finally, we do not at this point foresee a significant increase in interest and tax payments through this year as we expect to continue to benefit from tax loss carried forward through 2025 as well as overall relatively stable interest rates. In sum, while our free cash flow forecast is not without risks, we have far better visibility now on the drivers than we had when we set the ambition back in 2022. And this gives us confidence in our ability to deliver free cash flow before M and A of around $13,000,000,000 this year. And with that, I will hand over to Benedikte for some concluding remarks before we open up. For Q and A. Thank you so much, Torbjorn. I'd like to summarize our key messages as follows. We delivered a solid progress towards our midterm twenty twenty five financial ambitions. As well as our sustainability goals in Q4 and in 2024 as a Torbjorn and I, alongside the rest of the management team, are strongly committed to our strategy and will seek to evolve it further. Our goal is to unlock further potential for profitable growth while maintaining strict capital management and focusing on return on capital employed.

To do this, we need to keep Telenor future fit. Sharpen our customer mindset further and intensify the transformation work that we are doing in The Nordics and elsewhere. We are committed to our dividend policy, generating a attractive shareholder remuneration over time, while maintaining a strong balance sheet. And I feel really excited to work with your [indiscernible] and to build a stronger Telenor for the long run. And with this, I'll hand you back to Frank and to the Q and A. Thank you, Benedikta. We are now ready for questions from our callers. So operator, Thank you.

At this time, we invite those analysts wishing to ask a question to click on the raised hand button, which can be found on the bottom of your screen. When it is your turn, you will receive a prompt to be promoted as a panelist. Please accept. Wait a moment. Once you have been introduced, you may unmute yourself turn your video on, and ask your question. As a reminder, we are allowing analysts one question and one related follow-up today. We will wait one moment to allow the queue to form. Our first question will come from Morris Patrick with Barclays. You may now unmute your audio, turn your video on and ask your question.

Hi, guys. Can you hear me okay and see me?

We can.

Great. That's a good start. Thank you.

Yes, thank you for the comments and introduction remarks. A question from my side on what's core and non core. I know you're I'm sure you'll want to cover this in more detail the Capital Markets Day, but investors ask the question a lot. As to what is core for Telenor, what's not core. You've talked about the associate positions you have in Asia. Are you still committed to Asia? In this slide, you talk about adjacent opportunities, but you also talk about selling non core assets in AMP. I noticed there's comments around security services that you're developing. And then there's also the question around infrastructure and tower. So very Telenor to understand early thoughts in terms of what is core and not core for you in terms of your priorities going forward? Thank you.

Thank you so much. I'll just like to remind you that we will answer all questions to the best of our abilities. But just keep in mind that Torbjorn has been here for five weeks and I've been here for nine. So please bear with you with us if we need to come back to you on some of the more detailed questions. Back to your question, and you have to fill me in Torbjorn as to the non core versus core. I think the key thing for us now is to actually to deliver on our current strategy, where we have four business areas with separate strategies for each area in order to deliver the most value shareholder value possible. And as explained to you, during the presentation, we approach that in different ways in the four different areas and I hope that was clear. And to your very specific question as to core, non core, We have a focus, for instance, in AMP to focus on IoT and cybersecurity. And Having said that, we also try to develop the companies we have in the portfolio to the extent we can. In The Nordics, it's obviously quite core all across the board whilst in Asia, we also have a long term view developing the asset we have in Asia to the best of our abilities through somewhat different structures depending on the country and geography.

So please talk in Palmin.

Yes. No, absolutely. If I could maybe just jump to the associate question in Asia. Our main focus we all think that simplification should be a noble goal. But at the same time, our main focus with respect to our associate positions is to drive value within those. They are merged entities, which have clear plans for taking out merger synergies and deliver value over time. So our role is mainly as an active owner to ensure that we drive the value and in a way strengthen the positions of those assets. But we will, of course, look at any inorganic opportunities that comes across our table. But for now, our main focus is to ensure ensure that these companies deliver and they have strong teams on the ground that are working very hard to deliver on the plans and we want them to continue to do so. And to pay meaningful dividends up to us as well as other shareholders. So that is our primary focus with respect to our associate positions today.

Thank you. Our next question comes from Kavil Kiroya with Deutsche Bank.

Please turn on your video, unmute your line and go ahead with your Thank you for taking the question and also good luck in your new roles, Medik tentorbn as well. So in 2025, the Nordics will see a decline in OpEx and CapEx. Based on just your very initial impressions, can you share how you think about scope of continued OpEx and CapEx declines beyond 2025? Thank you.

As mentioned, in the presentation, I think our responsibility is to keep Telenor future fit. And in order to do so, I think the focus on cost and efficiencies will be very important to us also beyond 2025. And when it comes to the outlook, I'll leave it to you, Torbjorn, to go a bit more in detail.

Yes.

I'm going to be careful to start talking about stuff that is beyond call it the current strategy period. We have kick started all strategy work that we will continue through the year and report on in the CMD later in the year. But clearly, we have now come off, call it, a peak CapEx cycle. So those are, of course, things that are helpful in terms of our cash flow drivers. But I'm not going to comment on CapEx to sales beyond €25,000,000 at this point. Like to have a few more weeks in the chair.

That's clear. Thank you.

Thank you. Our next question comes from Andrei Kabisak with UBS. Please turn on your video, unmute your line, and go ahead with your question.

Hi. Good morning, everyone, and also all of us to Benedict and Torbjorn in their neural. Have a question that or a couple of questions focused on free cash flow, please. So obviously, you've laid out very helpfully, I think, the key building books, which is your EBITDA growth, your CapEx growth. You made some comments on things like leases, interest, etcetera. I wanted to follow-up on two things. One is the Asia assumption. So the previous management was or had a goal rather from the previous kind of capital market today, which was for Asia to contribute at around NOK5 billion in terms of upstream already free cash flow in 2025. I don't think with maybe the Bangladesh situation or the assumption that you sell Pakistan in mid-twenty twenty five, we can get to €5,000,000,000 but just a clarification in terms of what generally is the expectation for the Asia contribution? And second one on net working capital, if I can pull up Torbjorn. So you laid out hopefully that €2,700,000,000 was the number for this year. As a total contribution. You said that €800,000,000 was part of the struck [indiscernible] And then you said you would continue with the structural efforts into 2025.

So just looking at the math, it seems like there's a $2,000,000,000 delta that could be reversed, so the $2,700,000,000 minus the 800 but then you would be adding another, call it, €1,000,000,000 in terms of structural benefits. So in terms of the overall drag from working capital for 25%, are we should we expect something like €1,000,000,000 negative in that number because you made a comment also in the presentation that net working capital Overall would be negative. So just Those two within the free cash flow guidance? Any color would be helpful. Thank you. [indiscernible] With respect to working capital, clearly, when you're working with structural initiatives over time, at some point, the delta deltas will you will have taken out a lot of the efficiencies. However, without going too far into the details, what I experience is that there is very strong focus and commitment within the BU management teams to work consistently and structurally with working capital. So there When I say it's good, we expect it to be slightly negative into '25 That is more driven by the fact I think we've taken out a lot of the structural I still think there is more to go.

And then depending on the year how it flows and how working capital develops, sometimes you will get timing effects. So I'm going to be a little bit careful about saying a quantum of how much less we expect working capital to be. But some some more muted and hence a little bit negative year over year would be expected.

I think, Frank, maybe you would like to comment on the EUR 5,000,000,000 question. On the Asian ambitions.

Yes, I can do that. So in round terms, the SEK 5,000,000,000 that we have communicated since September 2022 still stands. There was never a huge assumption on Pakistan in there for that period. And depending exactly on on when the closing could be, that will not change materially as well. But there are several swing factors, as you know, NCI and so on in there. So let's see where that ends up But that's our ambition and as part of this.

And I think last but not least, we are true is not paying dividends at the moment, but we have expect that to happen towards the end of this year. That they will start to pay dividends. Thank you. Our next question comes from Andrew Lee with Goldman Sachs.

Please turn on your video, unmute your line and go ahead with your question.

Yeah. Good morning, both, and and look forward to meeting you in person. Soon. I had a follow-up question just on Morris' question earlier. Around your strategic thinking regarding M and A. Helpful, Torbjorn, to Your comments about Wheels, I think simplification should be a noble goal. But you also mentioned that it may just been wording see what inorganic opportunities come across your table. So the question really was your predecessors were actively pursuing a route to simplification in Asia, which is clearly putting sizable discount on your share price. So the question really was, do you see do you you anticipate actively pursuing routes to deliver more shareholder value through simplification given it's a major block to your value. And also do you see the scope to pursue in market consolidation?

Given we're seeing potential openings in the opportunity to consolidate European markets. So [indiscernible] Asia portfolio simplification and active pursuit on in market consolidation. Thank you.

So I'll start with Asia and then I'll do note it afterwards. That's fine.

If we start with Asia, and I I've noticed that there is a general fear of sort of massive discounts in Asia. And our role as an active owner is to ensure that we build value, drive value creation within those business units. And if we see inorganic opportunities that gives us a value creation potential, then we will, of course, consider those. As you would expect in a large global tel there are inorganic opportunities and discussions at any point in time. But our main premise is we want to make sure that we drive value within this business, not walk around with a cloud of suspicion of accepting bad deals hanging over our head. So hence, the focus is now to ensure that our Asian associates deliver on the plans that were laid at the time of the merger, deliver on dividend up stream to the owners and that is our main focus. And then we will, consider any strategic opportunities. And we have good people that of course look at things here, but main focus is to create value.

And I think we will communicate it as and when we have some something to deliver. And we have to keep in mind that the the deals that have been made today in Asia have taken several years in order to kind of come come into play. So we expect it to take some time in the case we do structure or in organic things. But I think My reflection on the Asian portfolio is the fact that we've actually moved into becoming number one both in Thailand and Malaysia Telenor the two two big mergers there actually gives us a much better market position and better quality assets in those two countries. Which also is a big benefit to us. Coming a little bit back to your Nordic or European question. We certainly hope that the regulatory constraints will be of less or less heavy going forward and that it will allow us to actually look at some industrial or in market consolidation. For us, that would be particularly relevant in Sweden and Denmark.

Thank you. That's really helpful.

Thank you. Our next question comes from Joshua Mills with BNPP Exane. Please turn on your video, unmute your line, and go ahead with your question.

Hi there, and hopefully, you can hear me. Thanks for taking the question. My question relates to Sweden. And just looking at the quarterly service revenue growth, it's slowed down a bit in the fourth quarter. I understand there was a tough comp versus last year. But perhaps you could give a bit more color around how you expect the service revenue in Sweden to normalize out in 2025? And some commentary on the pricing environment in light of comments made recently by Teletu and Teletuya would be helpful.

Andy your question on on the Pricing environment. Forecasting is also Sweden or is that more Nordic Question.

I was looking at Sweden, but if you're happy to expand it out to Nordics, that would be very helpful as well. Fine. All right. As you remember, the year over year growth in Sweden was somewhat lower than the underlying growth. And actually, we are quite comfortable with the outlook also in in Sweden. Would you like to comment also, Tomion? I can comment on that. As mentioned, there was a little bit more tougher comps last year. And then, of course, the competition in Q4 with campaigns, etcetera, was stronger, which that, of course, muted the year over year comp. I think going into and then and also keep in mind that we did have VAT case that also impacted the numbers. So I think we feel more comfortable going into 2025 in respect to the outlook for Sweden. We, of course, don't guide on call it, individual BU level. But now that we're sort of putting a few things behind us, we continue to deliver on our strategy in terms of pricing. We feel good about the performance potential for the current year.

And I also think just to add, we also saw that quarter over quarter Sweden also delivered very well in terms of quarter There are net adds in the quarter, which of course shows that it has a solid competitive position.

And if I may just on your final part there, I can expanding the answer a little bit, if you can just say that on the Nordic service revenue growth, we have 2.3%. But if you adjust for the VAT case in Norway, is like 2.6%, as Torben mentioned. And also there was a a year on year, a tough one off revenue comp actually in the numbers in Sweden that we've broken out separately in the reconciliation sheet for last year. So if you adjust for all of that, actually the underlying pace is kind of more at the 3% level in Q4. [indiscernible] Great. Thanks very much. Thank you. Our next question comes from Adam Fox Rumley with HSBC. Thank you.

Thank you very much.

I think there's a reference in the release to an improvement in Bangladesh, I hope for improvement in Bangladesh in the second half.

And I just wondered if you could talk about the kind of leading indication [indiscernible] yes, to give us a sense of how much hope is in for that versus expectations of improvement? And then a brief follow-up on return on capital. I can see in your kind of associated files, in the return on capital in Finland, it's just at 4% at the moment. The EBIT margin in Sweden and Finland are pretty similar. So is there anything I appreciate this is a bit of a detailed one, but is there anything you can call out on the return on capital in Finland? Thanks.

I'll do I'll start with Bangladesh, and then you can pick up on Finland, if that's all right. Yes. Yeah? We hope that the situation in Bangladesh will improve and there is good signs as to that coming into play. However, the situation is still vulnerable and the the current administration is positive. And we met actually some weeks ago with the current prime minister And they hope to have a new election at the end of the year. So we're crossing our fingers that that will actually hack happen and that will be very important for all the foreign businesses in Bangladesh to have a more predictable framework in the business community in Bangladesh, and that goes also for Telenor, of course. Yes. And I think we of course, in terms of what we follow internally, we look at sort of daily performance in the country. So those are some of the indicators that we will of course, follow closely through the year. But as highlighted, the speed and the shape of a recovery in Bangladesh is, of course, an uncertainty in terms of how we fall out or come out turn out in terms of the the ranges that we have guided on.

But and of we have considered all these parameters in sort of setting our outlook for the year. But clearly, in markets like Bangladesh, we follow very closely the daily performance. Maybe you can talk about Roheke Finland.

Yes. So obviously, as you might remember, DNA back in 2019. Obviously, there's a bit of more of a different situation with regards to the goodwill on the accounts for Finland as part of the capital employed base, which is mainly the explanatory factor for the figure you mentioned.

Thanks very much.

Thank you. Our next question comes from Felix Henriksen. With Nordea. Please turn on your video, unmute your line, and go ahead with your question.

Hi, guys. Thanks for taking my question. It is on Nordic service revenue growth and the visibility you have for 2025.

Could you perhaps describe where you see clients and perhaps describe a bit how the growth that you're seeing in your key markets relates to both the ability to raise ARPU as well as to gain net subscriber adds? Thank you.

I can start off and you can fill me in, Torbjorn. I'd like to start with Denmark, where we actually had a quite good development in growth in a demanding market where and which has been demanding for quite some time. In Finland, the same. Strong growth and an increasing market share. We just covered Sweden, so I think that's kind of I won't repeat that. And in Norway, we also see a very good development. And with again, that's also across the four countries, but the more for more strategy where we actually widen out the deliveries to our clients within in addition to connectivity and particularly around the security services. So we expect to be able to follow through that strategy also going forward. Would you like to add something to that?

No, that's covered it well. I think the clearly, the more for more strategy of [indiscernible] It's a strategy that we believe is a good one. And of course, that has a positive effect on ARPU, and we will, of course, continue to look for ways to develop that going forward.

Got it. Thank you.

Thank you. Our next question comes from Yulary Krauth with Bernstein. You may now unmute your audio turn your video on and ask your question. We will just wait one moment for Juri [indiscernible] Our next question comes from Yuri Hraft with Bernstein. Please turn on your video, unmute your line, and go ahead with your question.

Thank you very much. Can you hear me?

Seems to be some problem here.

It's okay.

We assume it's on your end, not ours.

I'm sure it is.

Thank you.

Right. So I wanted a couple of questions already been asked, but just coming back to Nordic service Telenor, I mean a big driver of has been the uppricing during the period of high inflation. How do you see the pricing specifically in the four markets, if you could run through that. And then my follow-up would be, Tieda actually commented yesterday on increased domestic because they saw not yesterday, last week because they felt, that there is a real risk of customers ditching cable in favor of fiber. They argued mostly for reasons of perception, but still they saw the need to put incremental capital in there. Now you're cutting CapEx. You obviously large cable operator in Norway as well. So how do you see that question? Thank you.

On the Norway service revenue growth, We have, as mentioned, followed the more for more strategy. And the composition of the revenue is increased [indiscernible] of the connectivity. We are coming out of high inflationary period and it's just the inflation is at a much lower level. But we still expect to be able to deliver service revenue growth in as guided in the mid single digit Low middle digit, sorry, going forward. When it comes to fiber, would you like to answer that question, Pavel? Yes, I can do that. But just briefly on the service Telenor, I think the we're operating with one of world best networks. We have customers that demand security services. And then we see increased potential from additional services layered on top. And clearly, a key way of driving value on the service revenue side is by adding things that the customer wants as evidenced by yesterday's announcement by Telenor Norway. So I think this is going to be a key thing going forward. And it's like with anything, if you're adding features, it's natural that you will be charged a little bit more for that. With respect to the increased investment in fixed infrastructure, A lot of the sprints that we did towards the end of the year was in fixed infrastructure. [indiscernible] added customers in terms of our fiber connections.

But we do have people who are switching off or moving out of the traditional HFC cable infrastructure. So net effect, it was not a growth, but we invest in fixed infrastructure. We will continue to do so. But we also need to be mindful in terms of how we deploy it because if too many people are deploying too much capital in the same areas, there's a real risk risk of overbuild. So yes, we allocate capital to fixed infrastructure [indiscernible] we also following the whole regulatory debate and about open access of fixed infrastructure, [indiscernible] does not build out network in areas that you can have access to through other means in the future. Thank you. Looking forward to your Capital Markets Day.

Thank you.

Thanks. Thank you. Our next question comes from Christopha Wang Bjornson. With DNB.

Please turn on your video, unmute your line, and go ahead with your question.

Yes. Good morning. I hope you can hear me.

So just following along the lines of fiber. So in that CapEx ambition for 2025, it would be great if you could help us understand how much is is fiber in 2024 and how do you think about that into 2025? And my follow-up is more on the inorganic lines on fiber. I think there was some commentary last month in local press from a mid level manager that kind of looking to acquire both customer portfolios and fixed assets in in the fiber space. In Norway. I would just love to hear what you think about that kind of amid the change in the regulatory environment of fiber in Norway. I think I'd like to start with the last question first.

I think if and as and when we have something to communicate on the And then with the CapEx ambition on fiber, I don't know to what extent we detail that out.

We have said the going to Doftea that it would be somewhere short of SEK 2,000,000,000 in 2024 and that's 1,500,000,000.0 to SEK 2,000,000,000. And that's where it kind of ended up. And I think we'll also have significant investment in that range this year.

Yes. Just quickly on the inorganic, I was not kind of trying to get how much you'll spend or when or who you'll buy, but just like kind of the rationale behind consolidating that space when you can actually go after those customers on other people's networks skip? Yes. And then you're kind of linking it linking it to the potential regulatory changes, I guess. That's what your question is. There is we hope that the regulatory changes will come into play, which will make it possible to have interoperability across network owners obviously. How exactly that is going to pan out is not yet clear. But what we do see is fiber is a strategic part of the infrastructure, not only to household, but also to businesses. And And it's extremely important to have fiber alongside mobile strategically.

But just very quickly, Kisob, in terms of the inorganic opportunities, I think we said that earlier. We will look at inorganic opportunities across our portfolio and that of course includes fixed and mobile, etcetera. [indiscernible] First to know once it is taken out to the market.

Appreciate the color. Thank you.

Thank you. Our next question comes from [indiscernible] [indiscernible] ABG Sundal Collier Please turn on your video, unmute your line, and go ahead with your question.

Good morning and thanks for taking my question. And congrats to both of you on the new jobs. Just a question on OpEx. How should we think around OpEx development in the Nordics going forward? Of course, ARPU growth has been the key driver of EBITDA growth in last few quarters, but how should we think about ex contributing potentially to that going forward?

Yes, I would maybe I should just very quickly, We have obviously given guidance on the Nordics both in terms of revenue growth and EBITDA growth. And the EBITDA growth clearly will benefit from our initiatives within sort of operational transformation within the Nordics. And that will, of course, continue this year as with full force. So OpEx will continue OpEx efficiencies will continue to have a clear and demonstrable effect on the development of the group. Then I guess I'll leave it to you work your magic calculators around the difference between revenue growth and EBITDA growth.

Okay. Thank you very much. And the potential for for OpEx reductions in the years to come. Is it what are your thoughts there? Or is that something you want to wait until the CMD?

I think let's we have a strategy process now. As we said in our introductory remarks, we're extremely committed to delivering on the promises for 2025. We have started the process now with laying in the foundation for the future. And pockets of growth, transformation, all of these things will be part and parcel. So you have to hold your excitement a little bit later this year.

Okay. Thank you very much.

Thank you.

I think that was all we had time for, Frank. Yes.

I think we're So thank you all for listening in, and thank you very very much for very good questions. Looking forward to seeing you again in when we present our second quarter sorry, first quarter results.