1

Q3JOHAN DENNELIND, PRESIDENT & CEO

INTERIM REPORT JANUARY – SEPTEMBER 2017

KEY TAKEAWAYS FOR Q3

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NORWAY KEEPS DELIVERINGNORWAY KEEPS DELIVERING SWEDEN REDUCING COSTSSWEDEN REDUCING COSTS SWEDEN FIBER DELAYS SWEDEN FIBER DELAYS

NO OTHER KNOWN INVESTIGATIONS

ONGOING

NO OTHER KNOWN INVESTIGATIONS

ONGOING

STRONG OPCFSTRONG OPCF REALLOCATING CAPITALREALLOCATING CAPITAL GLOBAL SETTLEMENT UZBEKISTAN

GLOBAL SETTLEMENT UZBEKISTAN

-6%

8.8bn8.8bn

8,0008,000

8.5bn

1.5bn+

3.2bn

0.7bn+

2018 400m2018 400m+

2

SERVICE REVENUE DEVELOPMENTOrganic growth, external service revenues

Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Service revenues

Service revenues excl. fiber installation revenues

-0.9%-0.9%

-0.1%-0.1%-0.4%

Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

SLOW FIBER WITH NEGATIVE IMPACT ON THE RESULTS

EBITDA DEVELOPMENTOrganic growth, excluding adjustment items

• Service revenue growth in 6 of 7 markets

• Fiber installation revenues in Sweden down by SEK 124 million in Q3

• Soft development in the Nordics partly compensated by strong Baltics

• Impact from less fiber installation revenues partly offset by strong cost control in Sweden

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THE MOST HAPPY CUSTOMERS AND BEST NETWORK

4

MOST SATISFIED B2C (HALEBOP) & B2B (TELIA) CUSTOMERS 2017*

* According to SKI (svenskt kvalitetsindex, English: Swedish quality index) in September 2017, ** According to P3 in September 2017

AWARDED BEST NETWORK FOR THE SECOND CONSECUTIVE YEAR**

3

LOWER OPEX MITIGATES FOR SLOW-DOWN IN FIBER

SWEDEN OPEX DEVELOPMENTReported currency, SEK billion & external OPEX

5

1.92.0 2.1

2.2

1.8

1

1

1

2

2

2

2

2

Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

OPEX absolute OPEX growth

0%

• On track to reduce H2 OPEX by 5 percent y-o-y*

• Marketing and consultants main drivers behind Q3 reduction

• Further impact from redundancies in Q4

* Adjusted external OPEX, excluding pension one-off item reported in Q4 2016

-6%

SWEDEN EBITDA DEVELOPMENTReported currency, EBITDA excl. adjustment items

10%

-2%

-2%

8%

-3%

0%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

EBITDA growth incl. fiber installation revenues

EBITDA growth excl. fiber installation revenues

• Installation revenues have gone from contributing by ~2 p.p. on growth to neutral to being a ~2 p.p. drag

• Excluding fiber installation revenues the Q3 EBITDA growth was fairly flat

Traffic authority permitsOther permitsSecondary faults

SLOWER FIBER PACE LEADS TO IMPROVED CASH FLOW

• A single permit could stall an entire project

Permitneeded

PERMIT DELAY EXAMPLEConnecting a network to the backbone

PERMIT DELAY SPLIT Q3 FINANCIAL IMPACTReported currency, SEK billion

• Without delays fiber installation revenues Q3 and YTD would have been rather flat

0

100

200

300

Q3 16 Q3 17

Fiber installation revenuesFiber installation revenues

-1000

-500

0

Q3 16 Q3 17

Cash flow impact*Cash flow impact*

• Lower SDU volumes pressure revenues and EBITDA but support cash flow via lower CAPEX

6* Impact on cash flow from fiber installation revenues less fiber related CAPEX

4

0%

25%

50%

75%

100%

EndQ2 2017

EndQ3 2017

EndQ4 2017

EndQ1 2018

Share of Phonerocustomers migrated

STABLE NORWAY & PHONERO MIGRATION ON TRACK

• Bulk of customers to be moved in Q4

• Phonero performance is so far according to expectations

• Full run-rate synergy target of SEK 400 million by year-end 2017 remains

PHONERO CUSTOMER MIGRATION

Q3 16 Q3 17 Q3 16 Q3 17

SERVICE REVENUES* & EBITDA**SEK million, reported currency & organic growth

-0.4%-0.4%

+1.7%+1.7%

Service revenues EBITDA

1,9492,212

890 922

Phonero

7

• Stable financial development

= Organic growth * External service revenues ** Excluding adjustment items

INNOVATION - OUR DNA

FIRST OUT ON 5G USE CASES IN EUROPE

AMBITION OF BRINGING 5G SERVICES LIVE TO TALLINN, HELSINKI & STOCKHOLM IN 2018

NO VISIBLE IMPACT ON CAPEX UNTIL BEYOND 2020

8 Copyright: Intel

• 5G live test at Digital EU summit – Tallinn Sep. 2017

4G

5GFIRST OPERATOR IN THE WORLD TO LAUNCH 4G COMMERCIALLY IN 2009

CONTINUING TO BE NETWORK PIONEERS

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DIVISION X 1 YEAR ON

C O R P O R A T E P O W E R S T A R T U P A T T I T U D EC O R P O R A T E P O W E R S T A R T U P A T T I T U D E

CROWD ANALYTICS

”IoT OFFERING GAINING TRACTION. YTD

REVENUES OF SEK 0.5 BILLION”

”ACQUIRED Q1 -STRENGTHENING OUR

POSITION IN VERTICALS OF TRANSPORTATION &

IoT”

”EXCITING PILOT PROJECTS, AGGREGATING, ANONYMIZING, COMPILING

& COMMERCIALIZING DATA”

” VALUE TO CORE AND VALUE IN INVESTMENTS

– 6 KEY VENTURES”

”SENSE LAUNCHED AND ZONE IS NOW

AVAILAIBLE FOR 0.7 MILLION SWEDISH

HOUSEHOLDS”

TELIA SENSE

TELIA ZONE

&

9

25%

19%

Predivestment

Postdivestment

STEP BY STEP TOWARDS PURE NORDIC/BALTIC

38%

24%

Predivestments

Postdivestments

• Almost SEK 12 billion in proceeds from divestments made YTD 2017 in Turkcell and MegaFon

• SEK 2.3 billion in total dividends received YTD 2017 from associated companies

• 3rd Turkcell dividend tranche of around SEK 0.5 billion to be received Q4

• MegaFon reclassified from an associated company to a financial asset from Q4

• Turkcell market capitalization of around USD 8.5 billion and MegaFon of around USD 6.4 billion10

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Q3CHRISTIAN LUIGA, EXECUTIVE VICE PRESIDENT & CFO

INTERIM REPORT JANUARY – SEPTEMBER 2017

-1

0

1

2

3

4

5

Q1 Q2 Q3 Q4

0

2

4

6

8

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Operational free cash flow (R12)

STRONG CASH FLOW TREND SUPPORTS OUTLOOK

OPERATIONAL FREE CASH FLOW TREND Continuing operations, SEK billion

FREE CASH FLOW - YTD Continuing operations, SEK billion

8.6 10.6

7.1

+0.8

Tax

+0.9

Cash CAPEX

+1.2

Associatedividends

YTD Q3 16

EBITDA

+1.1

-0.6

+3.4

YTDQ3 17

Other

12

Operational free cash flow - by QOperational free cash flow - by Q

16 17 16 17 16 17 16

7

SWEDEN FIBER ROLL-OUT DRAG ON GROUP LEVEL

• Legacy pressure and lower fiber installation revenues in Sweden

• Norway and Denmark benefiting from wholesale

• Solid development in the Baltics

OtherLATEST

-0.9%

Q3 17

FINSWEQ3 16

LITDENNOR OtherLATNORFINSWE ESTLITDEN

-0.4%

Q3 17

Q3 16

SERVICE REVENUE DEVELOPMENTOrganic growth, external service revenues

EBITDA DEVELOPMENT Organic growth, excluding adjustment items

• Revenue drop in Sweden not fully mitigated by lower costs

• Negative sales mix and high SAC in Finland

• Good cost control in Lithuania and Estonia

13

7,976 7,739

3,613 3,531

Q3 16 Q3 17 Q3 16 Q3 17

FIBER ROLL-OUT DECLINE BUT CLEAR COST IMPROVEMENT

• Negative sales mix partly mitigated by betterperformance on costs

• Fiber installation revenues fell by SEK 124 million

Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

-1.1%-1.1%

-2.4%-2.4%

-4.1%-4.1%B2B

B2C

B2C excl. fiber installation revenuesB2C incl. fiber installation revenues

SERVICE REVENUES* BY SEGMENTOrganic growth

• Fiber installation revenues down by 46 percent y-o-y

• Lapsing price effect on TV and fixed broadband

• Continued stable B2B, although growth still negative

SERVICE REVENUES* & EBITDA**SEK million, reported currency & organic growth

* External service revenues ** Excluding adjustment items = Organic growth

-2.4%-2.4%

-3.2%-3.2%

Service revenues EBITDA

14

8

TEMPORARY COST INCREASE RELATED TO HIGHER SAC

MOBILE SUBSCRIPTION DEVELOPMENTQuarterly mobile gross & net adds excl. M2M

• Increased gross adds late Q3 on the back of higher SAC

2,784 2,911

1,055 1,082

Q3 16 Q3 17 Q3 16 Q3 17Service revenues EBITDA

SERVICE REVENUES* & EBITDA**SEK million, reported currency & organic growth

-1.5%-1.5%

+1.0%+1.0%

• Growth in mobile partly offset by pressure on fixed broadband revenues

• Elevated SAC level Q3 pressures EBITDA

= Organic growth * External service revenues ** Excluding adjustment items 15

2

-29-9 -19

2

-50

0

50

100

150

200

Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

In 0

00

’

Mobile gross adds Mobile net adds

FLAT EBITDA DEVELOPMENT IN NORWAY

Q3 16 Q3 17 Q3 16 Q3 17

SERVICE REVENUES* & EBITDA**SEK million, reported currency & organic growth

-0.4%-0.4%

+1.7%+1.7%

Service revenues EBITDA

• Organic revenue growth driven by wholesale

• Challenging cost base comparison in the quarter

• Limited synergies expected in 2017

ORGANIC EBITDA** DEVELOPMENTSEK million, organic EBITDA and margin

* External service revenues ** Excluding adjustment items = Organic growth

• Continued stable organic EBITDA trend

0%

10%

20%

30%

40%

50%

0

250

500

750

1000

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Organic EBITDAOrganic EBITDA margin

16

1,9492,212

890 922

Phonero

9

217 234295 317

197 186

Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Estonia Lithuania Denmark

Q3 16 Q3 17Lithuania

Q3 16 Q3 17Denmark

+6.7%+6.7%

Q3 16 Q3 17Estonia

SOLID PERFORMANCE IN ESTONIA AND LITHUANIA

+7.0%+7.0%-6.5%-6.5%

+2.0%+2.0%

+2.2%+2.2%

+6.8%+6.8%

SERVICE REVENUE DEVELOPMENTOrganic growth, external service revenues

EBITDA* DEVELOPMENTSEK million, reported currency & organic growth

= Organic growth * Excluding adjustment items

• Mobile is growing in all countries

• Growth in Estonia driven by majority of revenue streams

• Denmark positive mainly due to wholesale

• Service revenue growth and cost control in Lithuania and Estonia support EBITDA

• Denmark EBITDA impacted by higher OPEX

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STRONG REVENUE & EBITDA TREND IN EURASIA

• Revenue growth in all markets

• Double digit EBITDA growth in Eurasia Q3 if excluding the devaluation impact in Uzbekistan

* External service revenues **Excluding adjustment items

FINANCIAL TRENDS IN EURASIAOrganic growth

FINANCIAL TRENDS IN KAZAKHSTANOrganic growth

• Financial improvement continues

• Price adjustments on legacy tariffs and ARPU stimulation impact revenue growth positively

• Revenue growth and cost initiatives support EBITDA

0%3%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Service revenues*

EBITDA**14%

-4%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

Service revenues*

EBITDA**

18

10

10,000

11,000

12,000

13,000

14,000

15,000

16,000

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

SE

K m

illio

n

CAPEX (R12) CAPEX excl. fiber (R12)

• Decline in CAPEX driven by fiber CAPEX in Sweden as well as overall non-fiber related CAPEX

0

500

1,000

1,500

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17

SE

K m

illio

n

Fiber CAPEX

CAPEX TRENDING DOWN FROM 2016 PEAK

CAPEX EXCLUDING LICENSES*Reported currency, SEK million & R12

• Vast majority of fiber CAPEX relates to Sweden but also some in Estonia, Lithuania and Finland

19 * Excluding hockey rights in Finland

FIBER CAPEX DEVELOPMENTReported currency, SEK million

SLIGHT INCREASE IN NET DEBT AND LEVERAGE

1.36x1.36x

= Leverage ratio

NET DEBT DEVELOPMENTContinuing and discontinued operations, SEK billion

+2.9

+6.1

+1.7

Q3 17

42.6

FX & Other

Global settlement

M&ATurkcell divestment

-4.1

Operations

-4.8

Q2 17

40.8

1.43x1.43x • Net debt increase driven by payment relating to the Uzbek global settlement partly offset by the divestment of Turkcell shares

• Reduced net debt from operations despite increased cash CAPEX

• M&A is related to the Nebula acquisition

• Q4 items

• Second dividend payment of SEK 4.3 billion

• 3rd Turkcell dividend tranche of SEK 0.5 billion

• Proceeds of SEK 3.2 billion from MegaFon divestment

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11

OUTLOOK FOR 2017 UNCHANGED

* Free cash flow from continuing operations, excluding licenses and dividends from associated companies

** Excluding adjustment items, in local currencies, excluding acquisitions and disposals

*** Post tax and given current exchange rates

Above SEK 7.5 billionOperational FCF together with dividends from associates of around SEK 2.8 billion*** to be above SEK 10 billion and should cover a dividend around the 2016 level

O P E R A T I O N A L F C F *

Around the 2016 levelE B I T D A * *

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Q&A

12

SIGNIFICANT EPS IMPROVEMENT

TOTAL EPS DEVELOPMENTSEK, continuing and discontinued operations

* Excluding income from associates and adjustment items

-0.44

-0.10-0.11-0.09

0.52

-2.03

Uzbek global settlement

+2.97

Tax & other

+0.10

Capital losses/gains

Income from associates

Adjustmentitems

Operatingincome*

Q3 16

+2.55

Q3 17Eurasia other

+0.22

CONTINUING OPERATIONS

Mainly Turkcell divestment

Mainly Turkcell divestment

The provision forUzbek legal investigation

made in Q3 2016

The provision forUzbek legal investigation

made in Q3 2016

DISCONTINUED OPERATIONS

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FORWARD-LOOKING STATEMENTS

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.

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