Earnings Call: Q4 2017

Jan 26, 2018

Morning, ladies and gentlemen. Welcome to Year End Report for 2017 Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, 26th January, 2018. I would now like to hand the conference over to your speaker today, Andreas Jolson. Please go ahead. Come to Telia Companies year end report for 2,007, where we report a strong cash flow and a 15% dividend increase. But as you know, there's more to the story than that. And with me to present that is our President and CEO, Johan van der Linde and our CFO, Christian Luegge. As usual, we start with Johan and Christian will come back later. So Johan? Thank you for stealing the thunder straight away. Welcome all in here and welcome you online as well. I wish it was as beautiful outside as we have on the picture here in Stockholm. But let's go straight into our Q4 and 2017 results. As Andreas mentioned, we are ending on a very strong note with a very strong cash flow for the year, stronger than we expected, we have to admit, and we will explain why. We also delivered on our EBITDA ambition, which was flat for the year. We did, slightly 0.2 down, but very well in line with our ambitions, which has led us to be able to propose a dividend of SEK 2.30, SEK 2.3 per share, which is an increase of 15%. That is, of course, a combination of the strong cash flow and a strong balance sheet. We also laid out a cost story for Sweden during the summer, which we have delivered on, actually slightly above our ambitions of 5%. We delivered 6%. And we'll certainly get back to the cost story through the presentation today and Q and A. But very happy with the Q4, and we have good speed into 2018. Let's look at it a bit more in detail. Service revenue, we know are under pressure, mainly from the service revenue decline in fixed. We are compensating to a large extent from the new services and the demand for more Internet, better Internet, more media and entertainment, but we are yet to fully balance that out with a flat organic revenue. But we are improving EBITDA very much, of course, thanks to the cost efforts we have across the group. We have strong cost focus and management, and we are growing EBITDA in 5 of our 7 Nordic Baltic markets. And if you exclude fiber, you can see that it's actually even 7% on a group level year on year for the quarter. So underlying, a strong development on the EBITDA side and cost side. Sweden specifically, I will not go very much into the depth of Sweden today because we have Helian Barnikov, the CEO of Sweden here with us, and she will join us after Christian comes later, and then we'll have a chance to dive deeper into Sweden. But the highlights, we are very focused on going through a couple of years, as you know, in transformation in Sweden, investing in new legacy out of legacy and into new platforms and systems. Meanwhile, we're doing that. We're also focusing on the short term with costs and propositions to the market. This quarter, as I said, minus 6% on the OpEx side. And if you remove the fiber one off installations where we have some problems still with delays on permits, If you remove that from the EBITDA and also take out the pension one off from Q4 last year, which is about EUR 100,000,000, we are actually ending up in a positive EBITDA territory of 3% for the quarter. So please look at the one offs and please look at the 1 the fiber installation fees and then you get the underlying pretty strong performance on EBITDA in Sweden. And on my note of changes in Sweden, we are working through the legacy part of the business in our stride for simplification and better customer experience. That is the transformation that we have referred to it. It's still ongoing, heavy lifting. But on the other side, we're getting now a lot of proof points into the customer and better value propositions, especially under the umbrella of Telia Life, which is our converged proposition, where we have been, as you know, combining fixed and mobile and TV in one umbrella under one brand through the last 2, 2.5 years, and that's now starting to yield results. So the convergence base we own in Sweden, and we are really much looking forward to stepping that up. And so far, we have not used the discounting route, and that's very important for us, not to go out and give away things, rather combine it and create that better customer experience. And we have some really interesting examples of that, which Helene will talk more about. Let's move East to the positive Finland. We had a strong development in Q4, over 10% organic EBITDA growth, which we have flagged for during the year that we'll see a strong Finland coming through, which it did. So very happy with that and then even more excited about what we have in store for this year, 2018, and I will move straight to why I'm excited. We have worked a lot to invest ourselves into better positions and propositions in Finland and especially around the convergence, both in enterprise and consumer. So on the enterprise side, we made 3 acquisitions during 2017, which we're all very happy with. We were targeting special skills, special platforms and products that will complement our B2B offers, not just in Finland, but possibly also across the rest of our markets. So exciting M and A. We think it's about SEK 700,000,000 a stake in additional revenues, and we will see synergies coming through also in Finland on the cost side. Then we have invested in content. We are about to launch very exciting propositions into the La Liga, which is the brand of the Aisokie League in Finland. And we know it's a big thing, and we want to make it an even bigger thing for the Finnish consumers during the year. And then we have also, as part of our B2B offers, a very interesting proposition around data center and the hosting and the credible secure local infrastructure player in Finland, which we will gear up during the year. So all very exciting. As you know, we are changing our group profile from the old fragmented spread across very many markets into the Nordic Portics. We are continuing to invest in adjacencies where we are looking for new revenue streams supporting our core. I mentioned the Finnish acquisitions. We know what we've done in Norway with Tele2. We have done Foneero, which is coming through this year 2018 with about €400,000,000 full run rate effect. But we're also doing smaller acquisitions, which may not always be highlighted on this level. But I want to take the opportunity to point to the IoT space in Division X, which we run, where we've done a couple of acquisitions, notably Cellcom, which is very much specialized in transportation, smart transportation and the leading cutting edge competence, which we believe will help us further enhance our IoT revenues, which has doubled from 2016 into 2017, which will continue to grow very much in the double digits through the year of 2018. Human is a smaller player, which enhances our artificial intelligence competence within the customer fronting activities, very exciting, which we hope to leverage further in the portfolio. The big news for today, obviously, the divestment of Geosel. We have come to an agreement with Perksel to divest bits of Fintur rather than the full Fintur. It's been a long process, as you know, but we're very glad that we have reached the point where we can start to divest the pieces. And Geosl is first out. We signed an agreement late last night or this morning even, I don't remember the time, where we took it out at 8 o'clock. And it's a local acquisition from the leading fixed telco in Georgia, SilkNet, who has the same ambition as we have in the Nordic Baltic, creating a convergence proposition in Georgia. So I think it's a great combination. And I want to take the opportunity to thank all our staff in Georgia and GeoCell who has done a tremendous job, not just repositioning GeoCell, but also living under some uncertainty for a bit too long. So I want to thank them for their patience and wish them all the best into the new venture, which is yet to be approved, by the way, by the local authorities. But we're hopeful that, that will go through in the next couple of months. We also divested Mega Fund during Q4, which helped us strengthen the balance sheet, but it was just a couple of months ago. So we're still enjoying the benefits of that. But remember, we're also losing the dividend from MegaPharm going forward. So take us in a bit looking at 2018. We set out the cost ambition during the summer also for the year 2018. We're well into execution of this cost program, where ambition is to take out SEK 1,100,000,000 and let me add a very important word of net cost takeout. So it's not the growth, it is the effect that we will see coming through on a net basis. You see the split, which is just to show you that is how it looks today. It's identified and in execution, where Sweden obviously has the big chunk, slightly north of €500,000,000 net cost takeout in Sweden. And the reason Finland is so slim on its cost takeout is not because they're not doing anything on cost. It's because we have added a lot of acquisitions, as I mentioned, and they have added to the cost base, and we're not able to mitigate that fully or more than this before we come into 2019. Where are we looking or where are we going and where are we executing? Well, examples of that to the right on the slide. We're doing a lot on vendor consolidation, near shoring. We're transferring obviously from physical stores into online to big transformation in itself, which enhances the customer perception and experience. So it's not just about cost, it's about customer experience. Use of robotics and AI, as I mentioned, a core part of the future Telia. I think we are far ahead and working across ecosystem with partners. And of course, we need to further optimize the acquisition cost and retention cost. But that's not where we go cutting short term. We go optimizing to ensure that we also stay competitive in the market meanwhile. Taking us into Andreas' early point, we were able to increase dividend with 15%, which is very much spot on the dividend policy of at least 80% of the cash flow from our continued operation plus the dividend from associates. And that gives us to to be precise, it's $228,000,000 but we thought rounding it up to 2 third would be better. And it's a 15% increase, and we are very pleased to propose that to the shareholders. Ending on then a couple of notes into 2017 or into 2018, sorry. This is how we view 2018 and onwards. Remember, we have still legacy headwind, notably Finland and Sweden. And that, to be clear, is the decline, conscious decline, expected decline of fixed telephony mainly. Nothing we can do about and we really want customers to come over and join new services and solutions. So we know what's happening there, but it's a heavy headwind still. That means we need to look for a tailwind, which we're doing obviously through our cost programs, which are materializing, but also through the synergies that we're getting on the M and A, notably so far in Norway, €400,000,000 from Foneero full effect 2018 and also in Finland where we're getting some synergy benefits from the through the acquisitions made. The other part we're seeing supporting improving cash flow is the net working capital, CapEx decrease in cash CapEx that will continue to support the cash flow in 2018. And we believe that these are together balancing out into the maintained high cash flow of SEK 9.7 ish, I would say, is going to be on that level also for 2018, which is a high and more importantly sustainable level. And that's the last note we're making on this slide, which is that looking even further into 'nineteen, 'twenty, we see further opportunity to grow cash flow from core metrics. So that is why we're comfortable with both the dividend and how the business is trading. Concretely for guidance then in 2018, this means, as I mentioned, the cash flow around SEK 9,700,000,000, which means we should then be able to defend another dividend of the same level at least. And EBITDA, we see at the moment with some uncertainty on a couple of areas, so notably fiber Sweden, how well that progresses, but we see us being in line or slightly above 2017 level of €25,400,000,000 So excited about 2018. I'm looking forward to take more questions later. But first, Christian Zuiga on the numbers and some more on some countries. Good morning, everyone. I will start also just saying that I am very happy for 2017. I think we should be very proud and happy for the hard work that has resulted in meeting our guidance on EBITDA, and we overachieved on cash flow. I'll come back a little bit on the reasoning of that. We did that despite a super tough year on fiber. As we have talked about a lot this year, the 45% to 50% decline in fiber, that was expected to do much better. Despite that, we did get the cost programs running exactly how we wanted them, and the cash flow programs have been actually been faster. So that is it is a good feeling leaving 2017 going into 2018 with good momentum. Into quarter 4. We have a 2.3% decline in service revenue. Euros 220,000,000 comes from the fiber decline, still a decline in quarter 4. I'll come back to that. And we have the fixed telephony and the legacy declining as well. We do have mobile growth continues coming through. We have strong growth in Finland. We have strong growth in Baltics, and we have strong growth in Consumer Sweden on the mobile. So underlying, we have in the mobile side a very good business. The EBITDA is positive despite the decline in service revenue. Costs coming through in most markets. In Sweden, Johan talked about the 6%. Head office, we also have in the IT network side and other head office functions, been driving costs down. We have a central organization that we also drive efficiency gaming. That has resulted in a positive quarter on the EBITDA. In Sweden, the cost measures also came with the 6.50 resources taken out that we talked about last summer. Service revenue in Sweden, down 4.5%, EUR 220,000,000 pretty much 2% coming from the fiber installation fees. The MVNO with EDC, EUR 30,000,000 last year, nothing this year. It was moved, as you know. We also have a mobile consumer behind this growing with 3%, flattish on postpaid customers in the quarter, down in prepaid, and the ARPU is up 5%, And this is the way we want to drive the market. We want to drive the pricing and the value in the market, and we do that and keep our market share in that sense. So happy for that. In the B2B side, a weak quarter on surface. We had a strong quarter 4 in 2016 with some one offs that we talked about in that those days. So without that, the Soho SME is still 1% growth. The B2B large is now 7% in this figure, but it is underlying around 5 percent, which we'll have throughout the year. And we still feel some pressure in bringing up the potential in the B2B large, but we're working hard on that. On the fiber side, we have a EUR 500,000,000 decline in service revenue for the year, which means EUR 350,000,000 plus on EBITDA that we have compensated for. This is, of course, a somewhat failure from what we expected, but it has a lot to do with permits. We talked about in the summer that we had problems with the authorities on getting permits, and they would staff up during the second half. Unfortunately, we have to say that it has failed to ramp up in the speed we needed, and we still have issues with the authorities on the permits. So that has not moved away from our agenda. We had a meeting yesterday with the ministers, and we continue to work with it is an important issue not only for us but for the country. We have 18,000 households to be connected that we now move into 2018 and have as a base starting point. And we have somewhat higher CapEx if you look at $44,000,000 this year compared to the volume that we deliver, and that's because we have built up some of that $18,000 for next year in our CapEx ready to be delivered when we get the permits. We know it's going to be a little bit uncertain going forward. So therefore, we guide on 60% to 90% of this year volume. That, you would say, is a very big range, and that is also the reason is because we have little visibility at this point in how we will handle the permits. And we're getting into the tail, and we will evaluate as we go on how we're going to do this. But still, we don't feel there is an issue to reach our 1,100,000 in household reached in the 1 year from now. Norway. Norway had a flat service revenue. We have somewhat pressure from the we have something we call special numbers that has been in Norway. We have special pricing on that disappeared in the second half. That had put some pressure on the revenue for the quarter. But we also have data growth, which brings compensating that, so flat on total. The B2B continues to grow, both in number of customers and in our product offering, very good momentum there. And on the EBITDA, it's more a one timer. It's not a trend that you should see continue into next year. We have a high pressure on the cost on Foneero from the other vendor of data to that company in the last quarter before we move over to customers. And we also have some one timers, and that impacts the quarter. In as per today, we have 80% now of the customers moved over. And within the quarter, they will have moved over to our network, all of them. And we are still comfortable with the EUR 400,000,000 in annual synergies that will come through from the Foneer Deep. As Johan mentioned, we have done some acquisitions. We also bought 40,000 customers from Next Gen Tel that we are now migrating over in quarter 1. And that was B2C customers, by the way. Baltics and Denmark. We have good momentum in the Baltics. They are growing, and they're growing throughout the year. Service revenue, both in fixed and in mobile, is growing. And together with cost programs, that give a good pressure upwards on our EBITDA. It's really fun to see how we are developing in these countries. And we also have implemented converged offerings in Lithuania in October and in Estonia, actually, I think it was yesterday, with something we call Estonia, actually, I think it was yesterday, with something we call the Telia 1. And it's a triple play type of offering. And we can see in Lithuania, we already have gained more than 3,000 customers new customers on this within 1 quarter. So it's positive to see how we succeed with our converged offerings in these markets. Denmark did a tremendous job on cost and keeping the revenue flat for the year. So cost is down, revenue is flat, EBITDA is pretty much flat. And they have done a lot of cost takeout both in customer operations but also moving more self online handling with My Telia for the customers, taking out a lot of administration costs internally. It is somewhat more stable market that makes it easier for us to also handle the service revenue. And cash flow has improved. So good thing is that we do get a positive cash outcome from Denmark right now. Eurasia. Johan told us and we know that EOSL was sold this morning at a valuation of 4.5x EBITDA, brings EUR 700,000,000 approximately in cash to Telia when we have completed the deal, which we expect to happen during quarter 2 at the latest. Eurasia is continuing on the good momentum of growth in EBITDA and the service revenue. That is despite the devaluation in Uzbekistan that have pretty much halved the value of that revenue and EBITDA. Kcell, as you can see, Kazakhstan has continued to have their tough one and a half year transformation, and we had to reboot. Both price increases and cost is driving the trend in Kazakhstan. Really good momentum. So into net debt. Net debt ends at 1.14, strong balance sheet, somewhat also impacted by the megafone divestment. The megafone divestment came in quarter 4. It was not maybe a surprise, but it was faster than expected. We succeeded greatly both in timing and in value, I would say, to get this asset on the market and sell it. We received around EUR 12,000,000,000 in net proceeds. We made a profit in the quarter of EUR 1,500,000,000. So I'm very happy that it happened that fast, and we can put that into our balance sheet going forward and focus on Nordic politics. We can also see that we have paid out the 2nd tranche of dividend, and the cash CapEx have improved also the quarter net operations. Good quarter. We have still SEK 1,600,000,000 to be paid out based on the DOJ situation, And we will wait for that and see how long time it can take, up to 1 year, before we get information on where to pay the money because it's decided the amount. CapEx. CapEx has been a very important topic for us. It's part of how we create value for our shareholders over time. We said very early that we would peak 2015, 2016 in CapEx and thereafter improve. We continue on that path. I think the rolling 12 months graph shows that. We have said that both the CapEx without the fiber rollout and the fiber rollout should go down over time. We are measuring this internally and with you externally as cash CapEx because that is what is important when it comes back to the cash flow and then thereafter the dividend for our shareholders. So we have progressed, and we have moved forward from EUR 11,600,000,000 to EUR 10,800,000,000. We see a continued trend into next year, and we have said that all along, into 2018, we'll continue to decrease, and then we'll come back after that. The main topic for next year is fiber. That we know will go down over the coming years because we are getting into the tail of the fiber rollout. We have somewhat higher fiber this year maybe than expected based on the OTC decline. But what I said before, we have built part of those 18,000 ready to get the permits and get them into the OTC. So we are on progress, and we are improving our cash flow from this momentum. We have not compromised on our best network. We are winning 5 out of 7 markets. We get the best network, and we are very careful to balance that because that is one of our core pillars in our strategy. So we have a much improved investment process and synergies within the vendor handling when it comes to CapEx. So the operational free cash flow came out better than we expected. At SEK 9,700,000,000, we guided above SEK 7.5 billion. It is several factors that have helped the cash flow for the year. We talked earlier about the tax one offs with you already in quarter 1. We talked about cash, CapEx also early with you, full control. We have also started then 2 projects within this year when we also have started to guide on cash flow to you. 1 is the cash flow program, which goes much on working capital, but it's also the CapEx. And CapEx, we talked about. Working capital, we are below benchmark, and I've said it before, we are below benchmark with our peers on working capital. So we have a 2 to 3 year, at least, journey of good takeout of working capital if we do things right. So we have worked on that progress on that program. And we are happy to see that the things that we expected to start hit, our working capital, hit faster than expected. And in quarter 4, many of the contracts that we worked with and new models with vendors have started to kick in, and we will continue to see that going into next year. We already see have initiatives that we know will also materialize in next year. So we are now on that journey. We have stepped up to the full speed in that. And I'm happy to say that, that was faster than expected in delivering on that target. And it is both the vendor side and it's the customer side that we're working on. So that leads me into next year and our guidance of SEK 9,700,000,000 next year. We're going to stay at the same level. We have a one timer, as we said in the midsection here, on tax. So the finance and tax and other will go south next year. It will be worse than this year, but we see continuous improvement on the EBITDA working capital and CapEx together. So the underlying operational drivers will continue to improve in this group, and we will normalize the finance tax and others. And in total, we are then around SEK 9,700,000,000 for next year as much as this year. So we're getting close to the SEK 10,000,000,000 mark for this group, which I'm really happy to see. With that, moving into the outlook, which Johan already talked about. So SEK 9,700,000,000 in line with this year, strong fundamentals for covering also our dividend level that we have today and the EBITDA in line or slightly above based on how we drive this company then into next year. Thank you very much. Thank you, Christian. And before we move into Q and A, before I try to steal even more thunder, I would like to take the opportunity to invite our Head of Sweden, Helian Barnikov, up to say a few words on Sweden and then we start the Q and A. And I urge you to take the opportunity to ask questions about Sweden. Helian is full of answers. Thank you, Andreas, and good morning, everybody, and good morning to everybody online. It's great to be here and be able to speak about Sweden today. And I obviously would like to start and talk about that we actually take great pride in the fact that we delivered on our cost agenda in the second half of twenty seventeen. We actually managed to reduce our operational expenses by 6%, which is a bit more than we had committed to. And this is extremely important also going into 2018 because it's not a surprise to anybody in this audience that we have a declining legacy business, and Johan already pointed this out. There is no reason to believe that this would change in next year. So obviously, we are working mitigating that. Also, Christian mentioned the fiber business. Our fiber struggle really started in Q2 because in Q1, we were still rolling out what was sold and got permits for in the previous year. Unfortunately, we see no improvement on the permit side. We have lots of dialogue with the ministers, with the authorities and all of it. Sweden has a very ambitious broadband target for 2020 already. And with the rate we are going now, that target would not be met. So I think this will be a big agenda point for many people in our political offices in the coming years. So we are hopeful and not the least because our customers are waiting to be connected and everything is sold. So we feel the pain from our customers, and we're very, very eager on that. And there's no decrease in the appetite for fiber in Sweden. That should be pointed out. And as we are by far the largest ex DDS cell provider, we can clearly see that. And you see in our numbers that the XDS cell is going down. What you don't see in our numbers, I think, is the fact that we added 24,000 fiber customers in Q4, which is a very high number, and we haven't seen everybody reporting, but I would believe that we actually took market share in the fiber service provider business in Q4. A significant part of that is now going on the Open City network, so not on our own network. That's been a very decisive strategy in 2017. We'll continue in 2018. And that's important, of course, to mitigate the ex DSL and take those customers. It's also important for our converged footprint. So we want to be able to offer convergence in as many parts of Sweden as we can. When it comes to the B2B business, we have stabilized and we have improved the growth rates. We are now around the 2% to 3%. We remain in a market where especially in the large segment, the price pressure continues to be very strong, and it will continue to be strong next year. But we feel that we have stabilized here, and we are running the business on that. But all of this, of course, means that the cost focus and continuing driving a cost agenda and taking out structural costs will remain absolutely in focus for the Swedish business. But I also want to talk about something that is really positive. On mobile and Christian and Johan alluded to that. But our mobile business, we had the best Q4 actually for our consumer mobile business, and we have a growth of 3%. This is a mix of the fact that we have had a strong net intake during the year, 75,000 net postpaid customers, and we have an increase of ARPU. So that's exactly how we want to grow the value of the consumer on the consumer business. And that then takes us into converged offering. Actually, the whole year, we have been working on adding to our converged offering. And on September 1, we launched Telia Live, which is then packaging the whole piece. And we believe we can see as well, we have 70,000 customers now under that converged offering, And we can see the positive feedback we have from customers and the loyalty that actually increases. So we're now adding to that offering. We launched, I think, last week, we came out or this week, we came out with a press release on Personal Technicians for the Consumer segment, which was one of our success factors how we managed my Soho business. We're launching personal technicians, and we're also building this into our converged offering right now. So going into this next year or to this year, to 2018, that will be core of our strategy. And I think we have the insights what our customers want. We also have everything in house. And now this year, we actually go on to all this new transformation, which means that we will be able to deliver this with the customer experience that we know customers expect and with the cost efficiency that comes with that long term. So we're very confident on the converged offering and that we will be able to develop Telia Life going into 2018. So thank you for that. Very good. Thank you, Helene. And please join us up here, Christian and Johan, and we open up for questions. And perhaps we start with Johan Alimac. Thank you very much. Two questions, if I may. The first one, basically, looking at the Uli one, on the balance sheet. So after you get proceeds now from Geotel and perhaps Kazakhstan later on. So you will have a very, very strong balance sheet still, stronger than your target of net debt to times plusminus 0.5%, if I remember correctly. So how do you first how will you use that balance sheet? And just remind you also on the sort of M and A strategy that you have going forward? And then my second question was actually your view, perhaps a question to you, Helian, on the content. Will Telia in Sweden enter into content or not? Thank you. Thank you. Let me start then. First, I just want to remind you and the rest that when we are divesting ratios because we're, of course, divesting EBITDA as well. So we have said a guide that as we divest your ratio, that's not going to materially change our balance sheet and the ratio. So that's what you see is a strong balance sheet. As it is, yes. And that came recently on the back of the divestments we have done in Turkey during 2017 and also the last divestment in MEGAFOR. So as of now, we're evaluating how to use our stronger balance sheet, There's some uncertainty out there to deal with, but definitely in a better position now to move forward into building a new generation telco in the Nordic politics. But we haven't been clear on that, and we will, of course, come back to you when we are made up our minds on that. No, I mean, we feel the pressure, but we also want to be prudent in ensuring that we're doing the right things for shareholders. So we'll come back on more developments on how to proceed from here. And on the content question. So obviously, content is really important both to the actually converged space but also in the consumer business as in general with TV. And so far, we have managed to keep improving our TV offering and the content offering actually in the TV experience with the partnerships we make. How that will look in the future? And we're open for different types of discussions and partnerships, but we haven't made any announcements on anything else. Thank you, Johanna. Can we take a few questions from the telephone conference, please? Thank you. Your first question comes from the line of Peter Nielsen. Please ask your question, Peter. Thank you very much. A couple of questions, please. Firstly, the cash flow is obviously strong and the outlook is for strong cash flow. From our side, I guess, the EBITDA outlook seems a bit cautious given the OpEx reductions to come, the €400,000,000 in Norway. Is that related, Christian or Johan, to your cautious comments on fiber deployment in 2018? And your comments on fiber for this year sound fairly downbeat. Would you not think there should be upside given how weak 2017 was? And the fact that, well, at least the regulators were supposed to improve on the momentum here? That's my first question, please. And secondly, can I just ask, Johan, I guess that part of your M and A agenda has been fixed in Norway? Obviously, you have a stronger balance sheet. Can you tell us whether you're actively looking at a fixed add fixed adding fixed businesses in Norway at the moment? And just finally, Johan, is there anything you want to add to us in terms of obviously, you sold yourself today, it's a relatively small part of Eurasia, about the remaining process and how we should view the impairments you're making. Is that an indication not to be too optimistic in terms of selling prices and timing, etcetera? Thank you very much. Thanks, Peter. And I think I will be addressing a lot of the questions that probably other people are wondering about. So let me take a bit of time on this. On the guidance, we have said that in line or slightly above. And the reason we're doing that is precisely to your point, Peter. There is uncertainty, as Helene pointed out and me and Christian earlier, around the fiber deployment and the pace we can keep and mainly actually related to things slightly out of our control. So yes, that's one of the reasons we are slightly vague in that sense, whether it's going to be in line or slightly above. But definitely, as we proceed through the year, we can then be more precise on how we see EBITDA coming through. But rest of countries, if you take Sweden away then for fiber reasons, rest of the countries should support an improved EBITDA. Fixed Norway, yes, is the answer. We are actively looking for fixed in terms of enhancing our value proposition with converged offers in Norway to our customers. We haven't said exactly what that means and how we're going to do it, obviously, but it could be everything from strategic partnerships to enable us to offer combined services or even M and A, as you say, in the fixed base of Norway. So yes, that's on the horizon. We have divested EOSL. I'll let them then say as well, if you have digged into the numbers and the valuations of Eurasia pieces, we have taken an impairment relating to Azerbaijan, Georgia and Moldova. And the reason for that is we're no longer valuing Fintus 1 package or as a whole Fintus company. We are valuing now the respective companies on a stand alone basis with a fair market valuation, which means that we are having in the books what we think we will get when we sell. Of course, that means that we are selling piece by piece as opposed to before when we looked at divesting the full fintur. The reason for that are many and complex, and I will not go into the details. But there has been, of course, discussions with our minority shareholder in Fintur, which is Turkcell, on how to proceed. I'm glad that we have now taken an importance that in starting to divest the companies in Fintur, and I feel very confident that we will now get an accelerated process in the divestment of Eurasia. Remaining then would be UCEL, Uzbekistan, which we have said is late into the divestment process due to the activities and the global settlement of the history. But it's catching up process wise. I feel good about the momentum the process and the interest also in U. S. Even if it is still slightly behind the process of the remaining companies. So I hope by thereby address 3 important questions that I'm sure other people will have had as well. Thank you, Peter. That's very helpful. Thank you very much, Johan. Thanks a lot. Maybe have the next question from the conference. Thank you. The next question from the phone line would be from Lena Osterberg. Please ask your question, Lena. Yes. First question maybe for Helane. I was wondering a little bit about the I realize it's early, but the initial impact in the converged offering, you said that you see loyalty increasing and churn going down. Could you indicate maybe what's the difference in churn level between customers which are on bundled services and the ones that are not? And also for Christian, I'm wondering a little bit about the dividend guidance and the cash flow guidance because currently you guide for a free cash flow of SEK 9,700,000,000. The dividends will be EUR 10,000,000,000. And you say you expect to bridge the difference with dividends from associates. So is that LAT Telecom, which should bridge the difference? Because I assume you don't expect a certain dividend from TAGCELL. So if I should start, Lena, thank you for your question. I what I can say is that we see our new customers coming on board. We see a balance between new mobile customers coming on to our fiber customers and fiber customers coming on to our mobile customers. And the churn rates, of course, are different depending on which way we count it from. So I would like to give us a couple of quarters probably to come back and give you a metric that we can track on that because it's a bit too early to give you something that you can actually go on and come back to and track. But we see a very balanced way of bringing customers, and we do see reduction in churn on all customers basically. Okay. And first of all, Liliana, we haven't guided on 2019 dividend, but we have said that the guidance for our cash flow for 2018 is covering the level we have proposed to pay out this year of SEK 2.30. And of course, yes, we have Latvia, and they stand for around EUR 150,000,000 to EUR 170,000,000 in dividend the last years. And I don't see a reason why it should not be possible to continue with that level. And then of course, Turkcell, we have as a more unknown item, but we have succeeded in the last 3 years to get an amount out of Turkcell. Now we have a lower shareholding, so we will have to see. But we are definitely working on the item without knowing if it will happen. Thank you, Liana. Thank you. Stefan, you have been waiting long now. Yes. Stefan Dolfijn, DNB. Some of my questions have already been taken. But I wonder if you could give a comment on how you view the landscape now in Sweden with the proposed deal, Tele2 Com Hem. How does that change the competitive landscape? And does that change your position in any way? It's an excellent question for you, Helene. Yes. No, that was of course, so we paid close attention to that announcement, obviously. So and we understand the logic because basically what they're doing, they're building they build the capabilities so they can pursue the strategy we were just talking about. So understand the logic. And in a way, it consolidates also the Swedish market with many big players actually and strong players. So in a way, there's a line of consolidation into that actually. And I think it maybe gives us even more energy to accelerate what we're doing because this is our strategy that we talked to you about for some time, and we are in full execution of doing. So I think it will be even more focused on the customers in this space and delivering excellence to our customers. Thank you. Thank you, Stefan. Next question from the telephone conference. Thank you. The next question is coming from the line of Irina Ebrystova. Please ask your question, Irina. Hi, good morning. Thanks for taking my question. So just to follow-up, I guess, on the convergence in the Swedish market following the M and A news. How realistic do you think it is for both Telia and the combined Com Hem Tele2 entity to maintain this value added converged strategy without going to discounts? And what would be what do you see as the most likely thing that might derail this? And my second question is on Denmark. Given that the market appears to have stabilized somewhat, any changes in how urgent you think it is to find a longer term solution there? Do you think you can perhaps continue to run operation as a So should I start with the convergence of Sweden? Thank you for the question. So we have taken a very conscious approach of not doing discounting strategy, also looking at some of the other European countries that didn't go down so well and instead building it up from our customer experience and value loading it. And that's how we're building our propositions. We're value loading it and giving benefits for having more things with Telia. And we see that working. And I think that also has to do with the how the Swedish consumers actually work. It is the most digitalized country in almost the world, I guess, maybe after Korea or something. And there is a digital life happening out there. So I wouldn't say that the majority of those people are just looking for a cheaper mobile phone subscription and a cheaper broadband subscription. They're looking to make all of that work. And I think that's the strategy we're going after and want to perfect this year. I believe that's in our and we don't comment on what they will deliver on, but I think they have also stated that they're looking for that and not looking for markets, which we obviously think is positive if that's not what's happening. But we are confident in that strategy, and we see that it meets what our customers are asking for. Thank you, Ilian. On Denmark then, we have not changed our view. We still struggle to make a turnaround that is long term sustainable in terms of value creation in Denmark. We are close to 0 on return on capital in the Danish operation, and that is still not a sustainable position. So we need to find solutions in Denmark. We're working with our same agendas we've had through the year to try to, 1, improve our operations, of course. We're glad to see some better performance in the Danish side. But also, we need to look at what options do we have long term in Denmark. And we still obviously don't have any good answers to that, unfortunately. So no updates on the Danish side, Irina. All right. Thank you. Thank you, Irina. Next question, please. Thank you. Next question from the phone line comes from the line of Roman Arbuzov. Please ask your question. Thank you very much for taking my question. I had 2, please. 1 is on cash flow guidance. Thank you very much, Christian, for providing some color and the slides are very useful in this regard. But I was wondering if you can just give us a little bit more where you can. And specifically, I was just wondering on cash tax. What is the normalized level for cash tax for continuing operations? You've only paid €700,000,000 and clearly, that was positively impacted by the EUR 700,000,000 one off last year. But is the right answer for a normalized Swedish cash tax around EUR 1,500,000,000? Or do you think you can or for example, do you have some one off signed up for 2018? And also on interest in terms of the hybrid coupon, which is about EUR 500,000,000, is that what you expect roughly to happen to the incremental year on year changes to the cash interest? Or can you actually reduce this through the cash that you got from Megaphone, for example? And then finally, if I understood you, on net working capital, that should be also a positive number of some magnitude as well in 2018. And also can you confirm that the what happens to the treatment of this the Finnish hockey rights, the cash CapEx related to that in 2018, whether that enters your definition of operational free cash flow or it doesn't? And also, if I may, just in terms of 2019, 2020, your ambition to continue to grow cash flow, Can I just check at a very high level, do you, for example, expect this to be more operational in nature as the 2019, 2020 and in 2019, 2019 improvements versus, I guess, working capital and cash tax driven kind of improvements that we've seen in 2017? Or yes, so basically, is it more EBITDA driven going forward beyond 2018? Or it's, for example, more CapEx and net working capital driven? Okay. We're building up for workshop here, Oliver. But I'll be pleased with you after this. I'll try to be brief, and we can come back separately. But I'll try to be brief because they're very important questions. I'll start from the end actually. So in from 2018 into 2019, 2020, yes, operational the operational part is should be the main driver. Hockey Rides, we have to book that as a CapEx in the book in the sort of in the books. But of course, the cash effect comes as we pay, and that cash effect does come in our cash flow, operational cash flow. And I said EUR 100,000,000 next year over the EUR 1,200,000,000 we booked in 2017, and then it will follow 6 years ahead, the remaining part evenly. So that's how that will come through in our operational free cash flow. We will continue to decline in CapEx even with the hockey rights. That's what we have said. We don't separate that from our thinking of what but that CapEx will go down, of course. On the interest in hybrid, yes, we have a little bit higher cost next year. We're also managing our portfolio. Our treasury department is doing a tremendous and great job in that. And we are taking down other things. We did buy back some bonds, as you know, in quarter 4 and quarter 1 last year, and that will also help with quite expensive bonds that we got a good deal on. So we are managing that portfolio. But yes, we will have a slight impact from the hybrid next year. And I cannot say more than that. The $700,000,000 in onetime that we had last year is what you should sort of add back in your mind going forward. Cash tax has been a little bit difficult to read into, I have to admit, because when we do a sale or get a dividend from the associates, it has impacted both reported tax costs but also the cash tax, especially the dividend withholding tax. So it makes it a little bit difficult. But I hope our IR department is giving you the answers on those when you ask them. I think I'll leave it to that, and I'm happy take a separate discussion on these items if needed. Okay. Can I just push my luck and just ask one very quick direct question to which there may not be a simple answer? But on Denmark, we've already had a couple of questions on this and the balance sheet. From memory, I think in 1H 2017, you were mentioning that currently well, at that point, you did not have a large Danish M and A on the agenda as a possible long term solution to Denmark. Can you please perhaps confirm that this is still the case? Or is it not the case? Thanks, Raman. That is your final question, so you know. Now so in Denmark, we as I said, nothing has changed in my view on Denmark since last quarter when we said we had troubles in Denmark operationally and getting return on capital going north. We still have a strategic challenge in Denmark long term. We're evaluating that and see how we can proceed. So no further updates really. We'll come back to you when we know more. Thank you. Okay. Thank you. Thank you, Roman. Look forward to your call. Next question from the phone conference. We have 3 minutes left. So not all of you will be able to answer your questions, but we'll be here all day. Your next question comes from the line of Simon Cowell. Simon, please ask your question. Hi, thanks for taking the question. It's just most of an answer, but on Finland, you've obviously improved again this quarter and are doing a great job there. In '18, how do you see the competitive outlook looking? And also, I guess, are you concentrating more on consolidating the assets that you've bought? Or are you still trying to improve your market share there? Thank you. Well, I think Finland and the team has a lot on their plate after all the initiatives they have executed on in 2017, both acquisitions, partnerships and build out of the new brand, Telia, which was launched during 2017. We will see results of that during the year. So I don't expect any new bigger activities on the non organic side in Finland for sure. It's about executing on the things we have on the table. And if we do, it will be another good year in Finland, that's for sure. And we should look forward to that. Thank you. Thank you, Simon. We'll take the final question from the conference. Thank you. Thank you. Could we have one more question from the conference call? From the call. Yes. Next question comes from the line of Keval Khiroya. Please ask your question, Keval. Thank you. I've got a question on Swedish fixed, please. Historically, you have tried to manage the legacy business by raising prices for products and broadband in 2016 and most recently for PSCN as well. I'm looking at Q4, the line loss still seems pretty high and the telephony revenue decline isn't actually too different from where it was before the price increase. Do you think you can still raise price for these legacy products? Or is that now more difficult? You, Simon. So the question is if we still can raise prices on the legacy products? Correct, yes, on the SG and A and the broadband. So we will well, depending on more movements in the market, but there's less window than there was when we raised the prices in 2016 when we did a substantial price increase. But it will depend on the market moves as well. Sure. That's very clear. Thank you. Thank you, Keval. That was the final question. Thank you for joining. Thank you for answering. Thank you. Thank you. And we look forward to see you here all again in April at the Q1 presentation. Thank you.