TELIA COMPANY INTERIM REPORT JANUARY-JUNE 2016

FINLAND


EBITDA GROWTH AND STABLE REVENUES
Second quarter summary

  · Former segment region Eurasia is reported as held for sale and discontinued
operations. The mobile business Yoigo in Spain and the Sergel companies are
reported as assets held for sale.
  · Net sales in local currencies, excluding acquisitions and disposals,
declined 1.0 percent. In reported currency, net sales declined 2.0 percent to
SEK 21,130 million (21,558). Service revenues in local currencies, excluding
acquisitions and disposals, declined 0.2 percent.
  · EBITDA, excluding non-recurring items, increased 5.1 percent in local
currencies, excluding acquisitions and disposals. In reported currency, EBITDA,
excluding non-recurring items, increased 4.1 percent to SEK 6,389 million
(6,136). The EBITDA margin, excluding non-recurring items, rose to 30.2 percent
(28.5).
  · Operating income, excluding non-recurring items, grew 20.1 percent to SEK
4,446 million (3,702).
  · Total net income attributable to the owners of the parent fell 55.8 percent
to SEK 1,439 million (3,258) and earnings per share to SEK 0.33 (0.75), impacted
by effects in discontinued operations. Total net income rose 5.5 percent to SEK
3,902 million (3,698).
  · Full year outlook is unchanged.

First half summary

  · Net sales in local currencies, excluding acquisitions and disposals,
declined 1.0 percent. In reported currency, net sales declined 1.5 percent to
SEK 41,524 million (42,147). Service revenues in local currencies, excluding
acquisitions and disposals, declined 0.6 percent.
  · Operating income, excluding non-recurring items, rose 19.6 percent to SEK
8,644 million (7,228).
  · Total net income attributable to the owners of the parent fell 25.4 percent
to SEK 5,205 million (6,973) and earnings per share to SEK 1.20 (1.61). Total
net income rose 0.1 percent to SEK 7,812 million (7,808).


COMMENTS BY JOHAN DENNELIND,
PRESIDENT & CEO

”The Nordic and Baltic region is very much the cradle of digitalization and has
the potential to lead the way in the so called 4thindustrial revolution. As a
New Generation Telco, Telia Company is well positioned to thrive and drive
societies where we operate to take steps into the future, by bringing new and
relevant services to both enterprise customers and consumers. We are excited
about these opportunities!

While transforming the company we are focused on delivering solid results in our
core operations. In the second quarter, organic service revenues were flat and
EBITDA increased 5.1 percent year-on-year, propelled by higher earnings in 7 out
of 8 markets.

In Sweden, service revenue growth stayed positive in the consumer segment,
supported by our value loading strategy in mobile, together with further
progress in broadband and TV. The new social media proposition launched in April
generated good traction and contributed to a positive mobile subscription intake
in the quarter. The fiber roll-out was further accelerated to meet pent up
demand, particularly in the single-dwelling unit area. We now reach more than
1.4 million households, on track to our 1.9 million target by 2018. In the
enterprise segment, we saw further progress in the SME & SoHo area on the back
of our new service concept, but the challenging conditions remained in the large
& public business. We are continuously broadening our ICT capabilities and aim
to expand further via partnerships and M&A to drive differentiation and increase
customer relevance.

We have put a lot of efforts in improving customer experience in Finland
following a period of network disturbances. The situation stabilized in the
quarter and mobile billed revenue growth was sustained at 4 percent, supported
by upsell activities and positive net subscription intake. Performance in the
Baltic region remained encouraging and all three countries delivered EBITDA
growth in the quarter, backed by high customer demand for mobile data services.

In Norway, we continue to strengthen our customer proposition, recently
highlighted by Telia’s top position in the biggest ever independent test of
Norwegian mobile networks. We now deliver 4G high-speed mobile internet coverage
to 98 percent of the country's population, almost two and half years earlier
than the regulatory requirement.

In region Eurasia the remaining operations were still impacted by high
competition and negative currency effects but we see some early signs of market
stabilization.

In June, we hosted a capital market day reinforcing our strategic priorities. We
can see improvements in the market share development and at the same time the
execution of the growth and savings initiatives continue and we are on track to
reach the cost reduction target of SEK 2 billion run-rate by the end of 2017.

In order to accelerate our efforts in areas close to the core, an independent
unit has been established to capture new revenue streams and further develop
existing and future partnerships.

We continue to optimize our portfolio in line with the ambition to increase
focus on our operations in the Nordic and Baltic regions and new milestones have
been reached in the past months. In June, we announced the divestments of our
mobile business Yoigo in Spain and the non-core cash management operation
Sergel. We continue to work hard to solve our issues surrounding Uzbekistan and
to responsibly reduce our presence in region Eurasia.

Our performance has been solid in the first six months with good EBITDA growth,
but we are facing tougher year-on-year comparisons in the second half of the
year. As a result, we are reiterating the full year 2016 outlook and foresee
EBITDA on a comparable basis to be in line or slightly above the level in 2015
for the continuing operations. CAPEX excluding license and spectrum fees for the
continuing operations is expected to be SEK 14-15 billion.”

QUESTIONS REGARDING THE REPORTS
Telia Company AB
www.teliacompany.com
Tel. +46 8 504 550 00

Telia Company AB discloses the information provided herein pursuant to the
Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading
Act. The information was submitted for publication at 07:00 CET on July 20,
2016.

Attachments

Financial & Operational data 2014-2016 Q216.xlsx 07209429.pdf