1

JOHAN DENNELIND, PRESIDENT & CEO

YEAR-END REPORT JANUARY – DECEMBER 2016

Q4

DELIVERING ON OUR AMBITIONS

WE REVISED UP AND SAID EBITDA IN LINE OR SLIGHTLY ABOVE 2015

WE DID +2.6%

WE SAID CAPEX IN THE UPPER RANGE OF SEK 14-15 BILLION

WE REPORTED SEK 15 BILLION

AMBITION OF A DIVIDEND OF AT LEAST SEK 2 PER SHAREWE PROPOSE SEK 2

2

2

WEAKER Q4 IN LINE WITH OUR FULL YEAR EXPECTATIONS- CONTINUING OPERATIONS

S E R V I C E R E V E N U E G R O W T H

E B I T D A * G R O W T H

F R E E C A S H F L O W

Reported -5.0%Organic +0.6%

Reported -2.7% Organic -1.9%

SEK 0.0 billion

*Excluding non-recurring items

Reported -1.9%Organic -0.4%

Reported +2.2% Organic +2.6%

SEK 7.2 billion

Q4 2016 FY 2016

3

REFOCUSING TO THE NORDICS & BALTICS

SOLID PERFORMANCE IN KEY MARKETS

STRONG NORWAY GETTING READY FOR MORE

BEST NETWORK IN 5 OF 7 MARKETS

FULL YEAR 2016 AND Q4 IN BRIEF

SERVICE REVENUE GROWTH

NEW OPERATING STRUCTURE

TELIA CARRIER ENDING STRONG

BETTER TREND IN EURASIA

FULL YEAR 2016 Q4 2016

4

ALL TIME HIGH FIBER IN SWEDEN

3

STRONG TV DEVELOPMENT ACROSS THE FOOTPRINT

TV SUBSCRIPTION BASEContinuing operations, in ´000

Sweden

+11.2%Sweden

+11.2%

TV ARPU DEVELOPMENTLocal currency, FY 2016 vs. 2015

Finland

+7.2%Finland

+7.2%Lithuania

+5.2%Lithuania

+5.2%

Estonia

+7.6%Estonia

+7.6%+3.6%+3.6%

• Subscription growth in 4 of 5 markets -improved proposition

• Subscription base growth of 5% in Sweden and 8% in Lithuania

• Solid ARPU development from

− Price adjustments

− Package optimization

− Successful upsell

1,6881,688

5

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

0.0%

0.5%

1.0%

1.5%

2.0%

Q1 16 Q2 16 Q3 16 Q4 16

GROWING MOBILE BILLED REVENUES

MOBILE BILLED REVENUE GROWTHContinuing operations, organic growth

Sweden

+2.0%Sweden

+2.0%

MOBILE BILLED REVENUE GROWTH Q4Organic growth, Q4 2016 y-o-y

Finland

+5.2%Finland

+5.2%

Norway

+0.9%Norway

+0.9%

6

Continuing operations

+1.7%Continuing operations

+1.7%

+1.7%+1.7%

• Demand for data and upsell main drivers • Growth Q4 in 6 of 7 markets

4

SERVICE REVENUESOrganic growth, external service revenues

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Sweden

Europe

Continuing operations

+0.3%+0.3%

+0.6%+0.6%

+1.2%+1.2%

-1.8%

4.3%

-1.9%

Q415

Q416

Q415

Q416

Q416

Q416

REVENUE GROWTH WITH DIFFERENT MIX

EBITDAOrganic growth, excluding non-recurring items

• Growth in fiber and strong development in fixed broadband and TV revenues in Sweden

• Positive mobile service revenue growth in 5 of 6 markets in Europe

• Negative sales mix in Sweden from pressure on high margin fixed legacy revenues

• Growth in Europe driven mainly by solid development in Norway

Continuing

operationsEuropeSweden

7

SWEDEN ENDING THE YEAR WITH REVENUE GROWTH

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

+1.7%+1.7%

-3.1%-3.1%

+2.4%+2.4%

B2B

B2C

B2C excl. fiber installation revenues

B2C incl. fiber installation revenues

SERVICE REVENUES B2B Organic growth, external service revenues

SERVICE REVENUES BY SEGMENTOrganic growth, external service revenues

• Stable growth in B2C amplified by fiber

• Better performance in B2B driven by less pressure on the large segment

• SME/SoHo remains slightly positive

• Improvement in large enterprises Q4 to some extent due to phasing

+0.5%+0.5%

-4.8%-4.8%

SME/SoHo Large enterprises

Q4 16

Q4 16

8

5

2.5%

6.0%

9.5%

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Mobile

Fixed broadband

TV

2.3%5.9%

15.0%

-15.0%

Q416

Q416

Q416

Q416

OVERALL GOOD TRENDS IN SWEDEN

ARPU TREND BY KEY SERVICEGrowth y-o-y

• Rise in mobile ARPU from improvement in B2B

• TV ARPU growth remains strong

• Pressure on mobile due to B2B large

• Broadband benefiting from price increases

• Strong TV growth supported by net adds and ARPU uplift

REVENUE TREND BY KEY SERVICEService revenues, growth y-o-y

Mobile billed revenues

Fixed broadband

TV

Fixed telephony

9

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

GROWING FIBER REVENUES AND GREAT ACHIEVEMENTS

FIBER BROADBAND REVENUESSEK million, reported currency

44% growth in

villa campaigns

44% growth in

villa campaigns

44% growth in

villa campaigns

SEK 3.2 bnCAPEX

FIBER ACHIEVEMENTS 2016

SEK 1.2 bninstallation

revenues

Market

share

186,000 new households

reached

186,000 new households reached

186,000 new households

reached

10

+30%+30%

• Quarterly y-o-y growth in recurring fiber broadband revenues stable around 30%

Growth y-o-y

Fiber service revenues

6

5.2%

2.7%

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Mobile billed service revenues

Total mobile service revenues2,771 2,934

Q4 15 Q4 16

+1.0%+1.0%

STABLE OPERATIONAL DEVELOPMENT IN FINLAND

* External service revenues **Excluding non-recurring items

Service revenues EBITDA

= Organic growth

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

MOBILE SERVICE REVENUES*Organic growth

• Fixed service revenue growth in B2B main driver behind positive service revenue development

• EBITDA growth somewhat negative due to higher operational costs

• Mobile billed service revenue growth mainly driven by B2C

• Lower interconnect revenues pressure total mobile service revenues

947 1,000

Q4 15 Q4 16

-0.4%-0.4%

11

2000

2100

2200

2300

2400

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

SOLID REVENUE AND EARNINGS GROWTH IN NORWAY

681865

Q4 15 Q4 16

+17.8%+17.8%

Service revenues EBITDA

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

• Increased wholesale revenues key driver behind service revenue growth

• Revenue uplift and lower SAC behind solid EBITDA development

* External service revenues **Excluding non-recurring items = Organic growth

MOBILE SUBSCRIPTIONS & ARPUSubscriptions in ’000, blended ARPU

• Loss of mainly low ARPU pre and postpaid subscriptions (compensated by wholesale)

• ARPU supported by higher data usage that drives upsell and top-ups

1,8112,036

Q4 15 Q4 16

+4.0%+4.0%

+2.9%+2.9%

Blended mobile ARPU growth, local currency

Mobile subscription base, ‘000

12

7

1,052 1,105

Q4 15 Q4 16

-0.2%-0.2%

HIGH COMPETITION IN DENMARK REMAINS

* External service revenues **Excluding non-recurring items

Service revenues EBITDA

= Organic growth

SERVICE REVENUES* & EBITDA**SEK million, reported currency • Still challenging market conditions in B2C and B2B

• Flat service revenues and a less favorable sales mix eroded EBITDA

• Value loading strategy

215 199

Q4 15 Q4 16

-11.4%-11.4%

Telia TV

13

169207

285 286

138 143

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Estonia Lithuania Latvia

Q4 15 Q4 16

LithuaniaQ4 15 Q4 16

Latvia

-4.2%-4.2%

Q4 15 Q4 16

Estonia

MIXED DEVELOPMENT IN THE BALTICS

+16.5%+16.5%

-1.6%-1.6%

+2.2%+2.2%

+1.0%+1.0%

-5.3%-5.3%

SERVICE REVENUESOrganic growth, external service revenues

EBITDA*SEK million, reported currency

• Lower sales in Green IT (-5 p.p. impact) and less demand for travel products in Estonia

• Growth in fixed broadband and TV revenues in Lithuania

• Increased demand for mobile data in Latvia

• Less marketing and good cost control in Estonia

• Latvia flat as revenue growth was offset by higher marketing expenses

= Organic growth * Excluding non-recurring items 14

8

THE RIGHT TREND IN THE EURASIAN OPERATIONS

• Positive EBITDA and service revenue growth trends intact

• Revenues rose in 5 of 6 markets

• Double digit service revenue growth in Uzbekistan, Tajikistan and Moldova

* External service revenues **Excluding non-recurring items

TRENDS IN EURASIAOrganic growth, excluding Nepal

-3% -2%

1%3%

-27%-24%

-9%

-2%

Q1 16 Q2 16 Q3 16 Q4 16

Service revenues*

EBITDA**

TRENDS IN KAZAKHSTANOrganic growth

• Main reason for Eurasian turnaround is less deterioration from Kazakhstan

• Improved market conditions but still a competitive environment in Kazakhstan

• Service revenue erosion pressuring EBITDA

-16% -15%-12% -8%

-37%-34%

-25%

-14%

Q1 16 Q2 16 Q3 16 Q4 16

Service revenues*

EBITDA**

15

SUMMARY FULL YEAR AND Q4 2016

FULL YEAR EB ITDA OUTCOME IN L INE WITH GUIDANCE

GOOD PERFORMANCE IN KEY MARKETS

EURAS IA ON THE R IGHT TRACK

16

9

CHRISTIAN LUIGA,

EXECUTIVE VICE PRESIDENT & CFO

YEAR-END REPORT JANUARY – DECEMBER 2016 Q4

17

ENDING 2016 WITH POSITIVE NET SALES GROWTH

NET SALES DEVELOPMENT Q4Organic growth

0

100

200

300

400

500

Q415

Q116

Q216

Q316

Q416

Revenuesin SEK million

FIBER INSTALLATION TRENDSDU campaigns and installation revenues

• Mobile growth in 6 of 7 markets

• Growth in TV and fixed broadband not enough to compensate for pressure on fixed legacy

• Lower equipment sales mainly due to Finland and Denmark

• Strong SDU campaign roll-out Q4 resulted in 34,000 new households connected

• Lower average installation fee Q4 due to 6,000 SDUs not generating installation revenues

0

10

20

30

40

Q415

Q116

Q216

Q316

Q416

SDUs in thousands

+0.2%

Q4 16Equip-

ment

OtherFiberFixed

excl

fiber

MobileQ4 15

-0.3pp-0.3pp

+0.5pp+0.5pp

SERVICE REVENUES

18

10

NEGATIVE EBITDA GROWTH Q4 BUT POSITIVE FULL YEAR

EBITDA DEVELOPMENT Q4Organic growth, excluding non-recurring items

EBITDA GROWTH TRENDOrganic growth, excluding non-recurring items

-1.9%-1.9%

Q4 16BalticsDENNORFINSWEQ4 15 Other-1.9%

Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

• Pressure on legacy revenues and challenging Q4 2016 comparable figures for Sweden

• Europe EBITDA growth still in positive territory driven by Norway and Estonia

• Foundation laid H1 for reaching 2.6% EBITDA growth for the full year

• Growth profile 2016 largely impacted by comparable figures in 2015

19

2015 2016 2017e

SwedenFinlandCentral functionsCAPEX

-0.7

-1.0

INVEST TO SAVE PROGRAM DELIVERED AND ENDED

INVEST TO SAVESEK billion, savings run-rate at period/year-end

0.6

1.2

2.0

• Invest to save program initiated 2014 has ended

• Financial outcome in line with targets

• Transformation will be ongoing to improve customer experience and efficiency

• Cash flow initiatives initiated throughout the group

20

11

PRESSURE ON LEGACY REVENUES IN SWEDEN MITIGATED

Share of

revenues

Share of

revenues

>80%

~60-80%

<25%

Gross

margin

Gross

margin

SERVICE REVENUE GROWTH SWEDENSEK billion, reported currency

• Drop in legacy revenues mainly from fixed telephony and various business solutions

• Since the launch call & errand volumes are down 23% and 53 IT systems have been closed in Sweden

32.3 32.1

2015 2016

EBITDA GROWTH SWEDENSEK billion, reported currency

Revenue

trend

Revenue

trend+1.3%

2016

14.5

New ITS* OtherCoreLegacy2015

14.3

Le

ga

cy

Co

reN

ew

• Legacy: Mainly copper-based services like fixed telephony and various business solutions

• Core: Mainly TV, mobile and broadband

• New: Value added and adjacent services

* Invest to save program (transformation, procurement and general efficiencies)

-0.4%-0.4%

21

6.2 7.1

5.5 5.0

2.6 2.9

0

5

10

15

2015 2016

Other operations

Europe

Sweden

CAPEX TO COME DOWN DESPITE FOCUS ON FIBER

= In relation to external service revenues

19.6%19.6% 21.0%21.0%

CAPEX EXCL. LICENSES* 2015/2016SEK billion, continuing operations

• Sweden CAPEX higher due to fiber roll-out and business transformation

• Europe lower despite high pace 4G roll-out

14.3 15.0

CAPEX EXCL. LICENSES* 2016/2017eDistribution by type, continuing operations

• CAPEX 2017 expected to come down despite:

− Continued high fiber roll-out pace in Sweden

− Need for continued business transition in 2017

0%

25%

50%

75%

100%

2016 2017e

Fiber

Other

Network/IT

* In reported currency

22

12

TOTAL EPS IMPACTED BY NON-RECURRING ITEMS

TOTAL EPSSEK, continuing and discontinued operations

• Impairment charges made to the operation in Denmark Q4 2015 and capital gain from disposal of Yoigo Q4 2016 explain the development in non-recurring items

• Discontinued operations impacted by impairment charges made to the operation in Uzbekistan Q4 2015

• Lower contribution from associates attributable to Turkcell and MegaFon

* Excluding income from associates and non-recurring items

-0.12

1.69

-0.70

+1.08

Discontinuedoperations

Q4 16Other

+0.16

Associates

-0.17

Non-recurringitems

+1.44

Operatingincome*

Q4 15

+1.31+1.31

CONTINUING OPERATIONS

23

LEVERAGE IN LOW-END OF THE TARGET RANGE

NET DEBT AND LEVERAGE TRENDContinuing and discontinued operations

50.8

0

10

20

30

40

50

60

1.00

1.25

1.50

1.75

2.00

Q4 12 Q4 13 Q4 14 Q4 15 Q4 16

Ne

t d

eb

t (S

EK

billio

n)

Lev

era

ge

ra

tio

*

Net debt Leverage ratio*

* Net debt to rolling twelve months EBITDA excl. non-recurring items

1.69x

• Leverage remains at the low-end of target range (2.0x +/- 0.5x)

NET DEBT DEVELOPMENT Q4Continuing and discontinued operations

51.8 50.8

Q4 16OtherYoigo

disposal

Dividend

paid

Cash

Capex

OperationsQ3 16

• Around SEK 6 billion impact from Yoigo disposal

• Second dividend tranche of SEK 6.5 billion paid

• Extra dividend from MegaFon of SEK 0.5 billion received

1.67x1.67x 1.69x1.69x

= Leverage ratio24

13

0

4

8

12

16

20

Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16

Discontinued operations

Dividends from associates net of taxes

Continuing operations excl. Associates

Continuing operations incl. Associates

LOWER DIVIDEND FROM ASSOCIATES 2016

FREE CASH FLOW 2016 SEK billion, continuing operations

• Dividend of SEK 4.7 billion from Turkcell 2015

• Lower taxes mainly in Sweden

• Positive working capital driven by Europe

• Higher cash CAPEX driven by fiber

* Excluding non-recurring items ** Net of tax

12.5

-4.8

EBITDA*

0.6

2015

-0.9

Tax

-0.4

Cash CAPEX

-0.8

Change in WC

0.9

-5.4-5.4

2016

7.2

OtherDividend associates

**

FREE CASH FLOW, R12 MONTHSSEK billion, continuing and discontinued operations

16.016.615.5

7.2

7.3

11.410.3

25

DIVIDEND PROPOSAL FOR 2016

26

SEK 2

14

FREE CASH FLOW – 3 DEFINITIONS

FREE CASH FLOW, from continuing operations as reported today

FREE CASH FLOW EXCLUDING LICENSES, from continuing operations as basis for dividend

OPERATIONAL FREE CASH FLOW, from continuing operations as basis for guidance equals free cash flow excluding licenses and dividends from associates

27

FREE CASH FLOW- OUTLOOK & DIVIDEND DEFINITIONS

DEFINITION FOR OUTLOOK

DEFINITION FOR OUTLOOK

DEFINITION IN

DIVIDEND POLICY

DEFINITION IN

DIVIDEND POLICYFCF DEFINITIONS*

* For illustrative purpose only, based on 2016

5.5

7.57.2

Operational free cash

flow

Dividends

from

associates**

Free cash flow excl.

licenses

LicensesFree cash flow

continuing

operations

SEK BILLION 2016

Free cash flow from continuing operations 7.2

FREE CASH FLOW EXCLUDING LICENSES

Free cash flow from continuing operations

excluding licenses

7.5

OPERATIONAL FREE CASH FLOW

Free cash flow from continuing operations

excluding licenses and dividends from associates**

5.5

28

** Net of taxes

15

CAPITAL MANAGEMENT

At least 80% of free cash flow from continuing operations excluding licenses (previously including licenses)

DIV IDEND POLICYU P D A T E D

29

Net debt/EBITDA of 2x plus/minus 0.5x LEVERAGE

Solid investment grade long-term credit rating (A- to BBB+)CREDIT RAT ING

OUTLOOK 2017

* Continuing operations, in reported currency, associate dividends net of taxes

** Excluding non-recurring items, in local currencies, excluding acquisitions and disposals

Above SEK 7 billion (SEK 5.5 billion in 2016)

Op. FCF & dividends from associates should cover a dividend around the 2016 levelOPERATIONAL FCF*

Around the 2016 levelEB ITDA* *

30

16

Q&A

DEBT MATURITY SCHEDULE

0

1

2

3

4

5

6

7

8

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

0

2

4

6

8

10

12

2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050 2053 2056 2059 2062

DEBT MATURING NEXT 12 MONTHS

DEBT PORTFOLIO MATURITY SCHEDULE – 2017 AND ONWARDS

SEK billion

SEK billion

32

17

FINANCIAL SUMMARY Q4 2016

* External service revenues

** Excluding non-recurring items

Q4 2016 Q4 2015 CHANGE (%)

Net sales (SEK million) 21,130 22,638 -6.7

Change local organic (%) +0.2

Service revenues* (SEK million) 17,594 18,520 -5.0

Change local organic (%) +0.6

EBITDA** (SEK million) 6,380 6,556 -2.7

Change local organic (%) -1.9

EBITDA** Margin (%) 30.2 29.0

Total EPS (SEK) 1.69 -0.70

Total free cash flow (SEK million) -381 2,691

of which continuing operations 32 1,834

33

Dec 31, 2016 DEC 31, 2015

Return on equity*, % 4.5 9.3

Return on capital employed*, % 7.7 8.9

Equity/assets ratio, % 34.0 35.1

Net debt/equity ratio, % 58.9 62.5

Net debt/EBITDA** ratio, multiple 1.69 1.53

Net debt/assets ratio, % 20.0 21.9

* Rolling 12 months ** Rolling 12 months, excluding non-recurring items

FINANCIAL KEY RATIOS Q4 2016

34

18

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.

35