Earnings Call: Q1 2017

Apr 26, 2017

Juan, Denner Linde, will go through the quarter, the highlights and also some part of the strategy and priorities for 2017. And then our CFO, Christian Rieger, will go through the actual numbers, especially per country. So Johan, please welcome up and give it a start. Thank you, Andreas, and good morning to you all, especially you here in this so called spring morning in Stockholm. For those of you out there, it's a very cold spring in Stockholm. Let's take us on the Q1 results. And before the numbers, let's speak a little bit about the highlights or at least the main messages for the quarter. First of all, I'd like to highlight the fact that we are now Telia main brand in all our home core 6 markets. We have rebranded 2 more markets during the quarter, Finland and Lithuania. I'll come back to that a little bit later. The key driver for our revenue growth in the quarter is the mobile side, which is actually growing across the footprint, which we'll also come back to a bit. It's a strong underlying performance. We are in line on our EBITDA for the group with our expectations, and I'm also seeing that's pretty much in line with the expectation as well. But the mix is somewhat different and we'll come back to that. For those of you who have dived into the numbers already, you see a very, very strong cash flow generation in quarter 1. And we'll also explain that a bit further because there's some one offs in that number, which will not come through later on. We have closed the Foneero transaction, which will strengthen us significantly in Norway and in B2B and produce more synergies as we did with the Tele2 deal. And then last on the continuing operations, a strengthened balance sheet through a hybrid issue in the quarter with about €1,500,000,000 Those are main messages. Let's look at some other key messages which refer to our Eurasian footprint, the discontinued operation. A couple of operational performance points first. There is a continuing positive trend for the region on the revenue growth and on the EBITDA performance. That is important to mention. The markets are turning around. It's been very, very difficult as you know over the last few well actually the last 18 months or so. We're coming through and that's very timely and we'll come back to that I'm sure on the questions. We have now today also taken out the fact that we have closed the deal in Tajikistan. We are no longer present in the market. We have no longer any outstanding liabilities or risk exposures. So it's a closed divestment of T cell in Tajikistan. So 2 out of 5 have been divested. And finally and not least, the provision that we made in conjunction with Q3 last year, we took a provision of $1,450,000,000 for the settlement discussions with the authorities around Uzbekistan. It's taken time. We are now at the point where we have reasons to revise the U. S. Dollars. The constructive dialogue that we've had, that has taken time, but has also put us in a situation where we see a better outcome when we finalize this. And it's just not the number. We will have to settle a full package with the authorities and we're finalizing that now. And hopefully, we can conclude this in the near term before the fall comes into Stockholm. So that are really the key things in the report and in the quarter, which I'd like you to pay attention to and I'm sure we'll come back to this somewhat on the Q and As. Let's look a bit on the continuing operations and what's happening in the performance. We are in the positive territory for revenue growth and it's the 2nd quarter, but it's higher than last quarter and that's good. We're not guiding you on service revenue as you know, but we're happy to see that we're in a positive space. And it's driven very, very much, of course, by the mobile performance across and I'll come back to that shortly. The EBITDA, however, is not following that growth. And of course, that's not satisfactory. Our ambition, obviously, is to grow at least in pace with the revenue growth on the profitability side. This quarter has some good explanations, which Christian will take you through in more detail. But there are some one off characteristics on the cost increases in Sweden and Finland. So we are not worried for the year and we'll come back to the fact that we will normalize costs going forward. Then on the growth drivers, we are then on the mobile build service revenue around 2.5% growth for our core Nordic Baltic footprint. And it varies from small growth to strong growth in our footprints here. Overall, it's around 3.5% across the markets, the total mobile revenue growth and the build is 2.5% as I said. Looking at where it comes from, you see on this slide a strong growth in Norway and Finland. Finland very much driven by the retail side and the ARPU uplift and good pricing initiatives Norway strong both in wholesale and in retail driving growth in the Norwegian market, which is very positive to see. Sweden hampered somewhat by the B2B drag still, but in the positive territory for mobile. I think there is more to come based on the new pricing and bundles launched recently in Sweden, which we'll speak more about later, I'm sure. And then Denmark is in a good position on the mobile side with growth. So all in all, mobile driving positive growth. Then let me just reiterate and reaffirm our strategy, which is there and which we are executing on. It is about enhancing the core. As you know, we are investing in our networks, both in mobile and fiber footprints. We're working hard to produce and shape our convergence offerings across the footprints where we are able to both bring fixed closer to the homes, but also to stimulate that mobile lifestyle. And then competitive operations is about that efficient operation with the right platform, products and systems, which are taking place mainly in Finland and Sweden in big transformation initiatives, which has a bit of a drag still on our full potential. Then we're investing in opportunities close to the core. And I want to emphasize close to the core. Our initiatives here should be clearly boosting our core business as well as taking us into some interesting new verticals where growth is very much higher than in our core business. The priorities for the year are very clear. We have lined up the guidance for you, at least SEK7 1,000,000,000 of operational free cash flow. That is our key measures for the year, And we are comfortable on that measure clearly, especially based on the over performance to some extent in Q1. EBITDA, very focused on delivering an EBITDA in line with 2016. And then also shaping that balance sheet to be according to our leverage targets and waiting, but also creating space to invest further in our core Nordic Baltic strategy. Those are 3 very clear priorities, which we'll continue to update you on. Speaking of convergence, when I'm out meeting a lot of you on the road, we end up a lot speaking about our convergence ambition. Let me just spend a couple of minutes on this. It's not a discount game. That's my main message. For us, convergence is not a discount game. Convergence is about creating a better customer experience with more services seamlessly delivered to you or your home or your family or your company for that matter. But this is mainly the consumer convergence we talk about here. And our strategy is to value load more, give more to our customers as well as then step up pricing as we add other type of services into the bundles and offers that we have. And there are example of that in the Swedish market for the moment where we have launched Telia Sense, Telia Zone that adds to the holistic brand experience of Telia. This is implemented across the footprint. Of course, it is also about bringing more products into one seamless interface, TV, fixed broadband and mobile. This is done with an ambition of a digital seamless customer service and interface, self-service. And that is not done overnight, of course. And that's a lot of focus in that transformation in our core markets to create that superior digital experience, which will create loyalty among our customers and create that loved brand of ours. And of course, convergence is about exploiting or exploring rather the fixed and mobile technologies to bring fixed as far out as possible to offload capacity, but also to give the full experience of the ever so increasing data demand of homes and companies for that matter as well. That takes me into again the fact that we have rebranded Telia in all our markets. We are now in a position to leverage the brand across not just on one product, but on many products. And there are clear examples of that already on the roaming proposition, for instance, in the Nordic Baltics, which by the way now are also taken fully out on the EU roaming pack for our customers in Sweden and Finland and Estonia and Norway and also Lithuania coming with Denmark. So the rebranding has been very, very positive and I have to say exceeded our expectations in terms of brand awareness achieved in the Telia main brand on a very short notice. These are 4 markets that we rebranded over the last 18 months, starting with Estonia, Norway, Lithuania and then Finland just recently going from their historic brands into Telia as a main brand and achieving record brand awareness in a very short period of time. So very happy with that and more to be done and seeing results of this. Another thing I want to mention in this context is our Unite initiative that we launched during the quarter. It is our way to make even more impact to society, linking it to the UN Sustainability Development Goals and to our digital mission that we have of making societies more digital, but also enabling inhabitants and citizens to benefit fully from the digital era. And this ambition is very clear. We want all our employees, 21,000, to spend a day per year doing good in society and creating more impact. And it started off very, very well with our partners across our markets. Then let me end on a couple of things. First, the M and A in Norway that we got through after long and hard work, dialogues with the authorities, it now closed and full steam ahead to make sure this becomes as good as the Tele2 integration that was very successful. As you know, it created over SEK 1,000,000,000 in synergies. We have been clear that this should be SEK 400,000,000 synergies when we have the full run rate and also strengthen us significantly in the enterprise space. So I'm very glad to see that and we now have step ups to do in Norway, which you have seen is the star of the quarter in terms of performance. So even more to expect out of already strong Norway. Then summarizing Q1. As I said, we are continuing to execute on our strategy. We have good momentum. The priorities are very clear for the year and are very much in line with the guidance we have given. But there are more to be done on costs, very clearly so in Finland and Sweden. And rest assured that the cost management and focus is high and we are sending the message that we are comfortable that we are back on normalized levels in Q2, Q3 and Q4 for Finland and Sweden. So all in all, very comfortable on our guidance given earlier in the year, and I think Christian will give you even further comfort on that. So with this, I will invite Christian to take us through the numbers even more in detail. Thank you, Johan. Good morning, everyone. I welcome you as well to this morning. I will reiterate Johan's highlights. We have a stronger revenue growth this quarter than last quarter. It's improving. It's 1.4% compared to 0.4% last quarter. And we are also stepping up on the mobile and that is the reason. The other thing is cash flow and the cash flow is coming with the right drivers, the expected drivers that we have talked about already before. We also have a strong balance sheet I will come back to and then I will start with going through country by country. So if we start with Sweden, a flattish growth in Sweden. We have a somewhat increased decline in the fixed side this quarter. It is around SEK175,000,000 negative compared to around SEK150,000,000 to SEK160,000,000 in previous quarters. So it's slightly up. That said, we do have ARPU uplift and we have a good development in B2C. But the negative trend in B2C comes from the fixed decline. The B2B is continued to be only 2.9% negative. We have had numbers around 5% to 6% in the previous year. This is too early to say it's a trend. The B2B mix is that the SoHo's Mail is still growing with about close to 1%, meanwhile the large is declining with about 6% in the quarter. The EBITDA is down 6.5% and that is OpEx and cost that I will come back to, but it's also the service revenue mix. With the fixed decline increasing and other type of service revenue coming in, COGS is also something we work with. And we talked about before, the savings that we see and come through in our operation does not come only on OpEx, it also comes on the COGS side. And that is a pretty much fifty-fifty split. If we look at the cost level in Sweden, we have illustrated that on the OpEx side here. This is not the COGS. This is only the OpEx. We see that we have a small saving, a weighted cost situation and customer experience in this quarter. We are definitely not satisfied with this position and this is not something that we think is sustainable. We see that these costs in IT is mainly projects becoming OpEx instead of CapEx. Some of that is the security and privacy development work done in GDPR and some relates to the IT journey that we're doing. On the resource cost, it's both on customer operations, but also part of this uplift comes in the technicians that we now sell as consultants. So service revenues increasing and resource cost on consultants selling the personal technicians in the primarily Soho Smia segment is also increasing. That said, we will take down cost in the coming three quarters. The it will come through in quarter 2, but it will be visible primarily in quarter 3 quarter 4. The initiatives have started and it will include the resource cost. If we then go to Norway, a strong execution and good execution on ARPU. We know we have customers leaving us to our smaller competitor in Norway. They are leaving at a lower ARPU than our average. That is helping the ARPU uplift. But without that, even taking that out, we have a slight ARPU uplift in Norway from a very good management of upsell in the retail business. That brings us to a above 5% mobile growth. On top of that cost management is good. And in addition, we should remember that we had a rebranding cost in quarter 1 last year that was up to SEK 30,000,000 from comparison reasons. Still strong execution in Norway. We believe that we will also now gain from well from the integration. We have done it before, so we feel quite comfortable we can handle that in a good way during the year. Year. Finland is also having a good ARPU development. Finland is having a B2C growth of 1.7% and where mobile is compensating for fixed. We have an ARPU uplift there from the migration from fixed to mobile. We also have price increases and we also have upsell. So good combination of reasons for ARPU uplift in Finland. The B2B side is flattish, a the company mobile side. So overall good revenue development in Finland. This quarter, we had one offs and primarily the rebranding. That rebranding will also spill over a little bit into quarter 2 and then that should disappear. And the decrease this year this quarter is fully explained by one offs. The Danish market continues to be very competitive, especially on the MNO side. The MNO are more stable on the pricing side since last summer when we had a price uplift in the M and O side. And we continue to drive our strategy on the interesting customer, those who want value and not only price. That means that we have a slight price increase or ARPU uplift and resulting in a flattish build revenue that some wholesale and interconnect impact makes the service revenue mobile go up in Denmark. I also want to reiterate what I've said in previous quarters that I think that our Danish management team is doing a good job considering the circumstances in the Danish market. Baltics, all three countries delivering on both growth on mobile service revenue and the EBITDA. It is a even in the fixed side, a stable situation on the KPIs that are important. We are growing customer base and in all these three markets on the mobile side. These we usually say are smaller countries, but they are important. They are together bringing in quite a lot of cash flow and value to the group and important to also have on the right side of the 0 bar. And they are doing very well in that. Estonia impacted by the restructuring that we did in the second half of twenty sixteen we talked about and that is coming through now visible in the EBITDA uplift, which is very positive. EPS development, this has been a number that has fluctuated quite heavily in our books the last year. And one reason is the of course the settlement of Uzbekistan that is coming through. It is DKK0.95 impact this quarter, positive from the revaluation we have done on the settlement amount. And discontinued operations is therefore negative without that slightly. That stems completely from the Nepal divestment that is out of the numbers and was not in the Q1 last year. Actually the rest of Eurasia is bringing a positive EPS to the group right now. The other thing is associates. This is the quarter four numbers coming through and they reported a slight negative impact on our EPS and nonrecurring is flattish compared to last year and operations slightly down as we talked about. Free cash flow rolling 12 months picking up again. I said in the last presentation that cash flow will improve this quarter and for the year from the works and that is exactly what we see coming through the numbers. We have an impact on working capital of about SEK 300,000,000. I need to also say, which I have done also many times before, working capital goes a little bit up and down in the quarters because of seasonality, but we feel that we have the initiatives now in place and we'll deliver on this metric for the year. The CapEx is down and should be down also a little bit impacted by higher OpEx than CapEx as I talked about before, but it will also be down compared to last year for the year. This quarter it was SEK350,000,000 on cash CapEx impact. And then we had, as I also said last quarter, SEK700,000,000 in refund for overpayment of taxes in 2016. Coming through now. We were saying it's going to come through in quarter 1 or quarter 2. It came through in quarter 1 in March, and that is now a fixed number in our balance sheet. And cash, we also had an impact from finance net, but that is can fluctuate more over the year. So we should be too careful a little bit careful to bank that in completely before we progress a little bit further in the year. That said, I feel very comfortable about cash flow progress and I feel comfortable about our target for the year above SEK7 billion. The free cash flow we also watch here is not impacted by associates' dividend or licenses in quarter 1 this year or last year. So this is pretty much also the SEK 3,800,000,000, SEK 3,900,000,000 we have in this quarter is pretty much also our operational free cash flow that we are measuring ourselves on towards you. We ended up at SEK1.58 billion in net debt to EBITDA, which is in the lower range of our target of 2. We did a hybrid in the quarter. Hybrid is a mix between equity and bond and normal debt. It is actually booked as debt. It is a debt instrument, but the rating institutes allocates 50% of this to equity based on the construction and the security of that debt. And it was well priced and it was attractive timing and therefore we went out with the SEK 15,000,000,000. It helps to support the strategy of having flexibility to want to do M and As when we want to do M and As and have a strong balance sheet to decide when we want to do things and not have to wait for other things to happen first. And this is something we talked about before. We want to have the flexibility and the ownership of our agenda. This helps us very much in that. We have a strong wish to do M and As in the Nordic politics, ICT and in the fixed side, we have talked about a lot and we have Foneera as one very clear example closed in this quarter. We also have a strong commitment to our rating. And after we had concluded this Standard and Poor's kept their A- rating and took us off negative watch, which is very pleasing and will help us in the funding costs going forward. To illustrate a little bit the pro form a situation we have, which is something I usually end up anyway talking to our investors with about and this is then the SEK1.58 we ended the quarter with and we can then see what is the effect of the hybrid bond on our net debt to EBITDA leverage, takes us down to 1.3. Billion. We have a dividend paid out in April, takes us up to SEK 1,500,000,000 and with the SEK 8,900,000,000 that we have in provision that we one day are expecting the best estimate we will pay, we will end up at SEK 1,800,000,000 compared to our target of SEK 2.0 net debt to EBITDA. And this is why we believe we have a strong balance sheet situation and we have a good cash flow, which leads me into the final slide, which is the outlook for the year, where we have 2 guidances. 1 is the EBITDA to be around the same level as 2016. We have started slightly negative. We have said we will be weak half than the second half, and that is something we reiterate. We will continue the initiatives we have on the strong cost programs in Sweden and that we have started and they will help us to change also Sweden in the same way compared to the first half and the second half. Previous year, we talked about that Sweden needs to follow and have the same pattern as the group and that is also the same situation this year where we will move into another territory in the second half. The cash flow is we started strong. We expected and we feel confident the above SEK 7,000,000,000 free cash flow for the year. On operational free cash flow. That is all from me. Very good. I invite Johan back up on stage and open up for Q and A. I think we start on the floor, and I will forget Robert because he is on the wrong side. So you start with Robert. Thank you very much. Hang on, wait for the microphone, please. Thank you very much. Christian, you talked about the high cost in Sweden in the Q1 and that they're going to return to a normalized level. Could you maybe discuss, give us a feel for how much was not normal cost in the Q1? How much we can expect it to go down on that? I don't want to give you a guidance exactly the same way as last year on guidance on the OpEx level. Cost is measured both in COGS and OpEx. Our model is changing over time. So as I said, part of the OpEx is related to service revenue growth, the technicians. That is not a problem, but that is part of the increase that may not disappear. But we will have to do more on resource cost in general and that is happening and that is initiated. We will secure that we deliver on our EBITDA targets. Good. Johanna? Yes. Two questions, if I may. First one, just a follow-up on Sweden. Can you say something sort of what are these cost initiatives example of? Is it those IT projects that you will close down? Or is it totally new, unrelated to what drives cost in this quarter? And yes, take that. If I start with that then is we have said before that we are running many several smaller cost initiatives in each country and that is ongoing right now. And then on top of that, we have said in this quarter that we will increase that pace and increase the efforts in Sweden to because we are thinking the costs are actually not satisfactory. So we are moving on in the same kind of program, but we are stepping it up in Sweden. And the second question, can you comment anything on the investigation from EU yesterday? What you foresee could happen if you are sort of forced to let in another player as an MVNO 1 in network? Or what can be the potential end game here? Thanks, Janne. We obviously, yesterday, all 4 Swedish MNOs were visited. And there is an ongoing well, at least questions ongoing. So we're not going to comment so much on they ask and how that goes. But let me just say, in Sweden, the MVNO space is not ranked by the Swedish PTS. It is a competitive market with 4 players competing for MVNOs. And we have around 10 MVNOs on our network today. Of course, that's a business we want, we fight for. So let's see what this is all about and let's see what comes out later in the investigation. Liana? A question on the Foneira acquisition and the migration of the traffic there. Am I correct to understand that you will complete the migration already by Q2? And could you also say maybe how much of the €400,000,000 synergies is expected to come from the traffic migration? So Foneo transaction just closed, and it is a lead time to, of course, get the full synergies out to SEK400 1,000,000 is a full run rate and that will not be achieved for the year. Migration, of course, will start as soon as possible. But we're not giving any precise estimate yet on when all traffic is migrated, but the full year run rate is €400,000,000 Of course, we target to do this as soon as we can, but it is something that is slightly different from migration on the consumer space. The business to business migration is somewhat more complex and takes a slightly longer time to do in a responsible way to make sure that customers get what they ask for. So we'll update you along the year on the progress of those SEK 400,000,000 synergies. And similar to Tele2, the majority is of the synergies comes from the traffic side. I think we tried to take 1 or 2 questions from ones calling in. Operator, may we have the first question, please? Absolutely. Your first question comes from Peter Nielsen. Thank you. If I can just I'm sorry, stay with the OpEx in Sweden in the quarter. You're saying, Christian, that you've had to hire OpEx on the customer experience. Why has that been necessary in Q1, please? And given that you're telling us that the cost situation as of now is unsatisfactory in light of the fact that we're coming towards the end of the 3 year at SEK2 billion cost reduction program. Should that make us concerned? And maybe we have to look at potentially another sort of major size cost reduction program? And then just secondly, any progress on the any update on the progress on the Eurosean disposal process? Obviously, I'm not asking for specifics, but 3 months ago, you told us that you were very optimistic and confident of completing this process. Are you as optimistic and confident now as you were 3 months ago? And any color you can give us on the momentum of this process? Thank you. Thank you, Peter. Let me take the Eurasia question for you. The we closed one more today, as you know, or we announced one more market exit today in Tajikistan. That means that we have 5 more, of which 4 are under the Fintur umbrella. And as you know, last year was very much a year where we tried to divest Fintur to our co shareholder in Turkcell. They were the buyers, but now they are clear sellers. So on the sell side together with us has been more constructive in finding the new interested parties to take Fintur further. We're making good progress. I think we are as comfortable as we were last time we talked about this that this is possible to complete during the year. And we will definitely keep you posted as soon as things materialize or develop further. But the strong focus and good conditions to continue this, especially on the back of what I mentioned in my opening that the performance has improved also in these markets. On the cost side, Peter, the SEK 2,000,000,000 program is coming through and we shouldn't be worried in general, but we need to be on top and serious about that. Our business model is changing. We are getting a service revenue mix that is different from the past. That means that we need to continue to drive costs and this is not going to stop. The customer experience part is an uplift we have in customer operations for different reasons to drive our sort of link to our B2C customers, primarily in B2B also partly in Sweden, but also the technicians that I talked about. Those are the type. I think that is it. I mean, we will just continue to step up and decide and tune and shape this company, the cost structure, so it fits the future model as we go. And that is the short answer. Thank you for the question, Pekay. Maybe Howard, the next question, operator, please. And your next question comes from San Dimas. Hi, guys. Two questions, if I may. In terms of roaming, can you remind us again what impact you're expecting for the full year? And what are the early indications you've seen on the elasticity of roaming European roaming demand when you've included it in the bundle? And secondly, just on cost, is there anything more you can do around centralization of costs following the Telia rebranding across the board that can accrete the margins for the group? Cheers. Thank you. Roaming, my first thing I'd like to say on roaming is that the customer love it. They really embrace it. And we see a strong uptake and appetite, of course, to now live freely on the in the EU zone. And this creates a behavior also by using your devices more often, which will also stimulate other type of usage and growth outside EU. Our impact, if we do nothing, of course, is negative. But of course, we're doing things to mitigate. We have seen that across the recent launches both in Sweden and Finland that it comes with an increase in price and that we are not shy to talk about. We give more and we charge more. Of course, our cost situation needs to be carefully managed and monitored as roaming traffic grows. But our size and our agreements on wholesale helps to put us in a good position with good visibility to manage this within our guidance on keeping EBITDA flat for the year. On the cost side, the reason that we have rebranded to Telia is not mainly cost driven. It is customer experience driven and proposition driven and get best practices across and leverage our convergence as we go along. Of course, it creates opportunities for best practice and synergies to some extent, but they will not be material in that space. But having said that, of course, group has other cost initiatives where we see clear and large synergies of, for example, running operations in one place for several markets. And that one we have higher ambitions on creating more cost efficiencies through. And I'm sure we'll speak more about that during the year. Thank you, San. Do I have a follow-up? No, no, no. Thank you. Operator, could we have the next question, please? Absolutely. It is from Roman Arbazov. Thank you very much for taking the questions. I have 2, please. So the first one is on Sweden and the B2B segment. So you're talking about some stabilization in the large enterprise. Could you please just talk about what's driving that in a little bit more detail? Is it the end of a repricing cycle, for example, with a particular initiative that's driving that? And then secondly, just on Denmark, we are seeing some modest improvements. I mean, they are modest, but we saw flat to maybe even marginally positive mobile service revenue growth in the quarter. Are your views on Denmark evolving at all to the positive side? And do you think an organic solution in Denmark is actually becoming more feasible now? Or do you still think that, that's not really option? Thanks, Roman. Sweden B2B, I wish I could say it is we're out of the negative trend and territory and we see only positive going forward, but we're not there yet. But we do have to say that it is a stabilization, as Christian mentioned. I mean, 2 quarters in a row is significantly better bad numbers. The reason is, of course, hard work and good sales and management of customers, good negotiations, but also keeping and gaining customers from others. So it's a result from hard work, but there's also some cyclical effects. And therefore, we are not ready to say that this is a clear trend shift yet in the B2B large. Having said that, I'd also like to mention that Soho, SME is and still on a good pace. And when we said it was a trend shift, it was a trend shift. So let's keep an eye on the large as we go further, but it feels slightly better. Denmark, even if we see some kind of stabilization in the pricing environment from the MNOs, there's still crazy price fights going on across market from MVNOs, which puts pressure on pricing actually across the board. And we haven't changed our view in terms of the prospects of creating enough value just being smart and efficient and great organically. That will not cut it to create value for shareholders over time. So therefore, we're still very focused on finding structural solutions for our Danish situation. And let me repeat what I said last time. We haven't ruled out anything in terms of structural deals. But when it comes to TDC, as I said before, the valuation and the risk was not attractive and it's still not attractive. So we're focusing on other options. Thank you very much. Very clear. Your next question comes from Maurice Patrick. Yes, morning guys. Maurice here. So a question on the cash flow, please. You guided to greater than SEK7 billion of free cash flow for this year on your definition, a very strong sort of SEK4 billion in Q1 You've highlighted some of that's one off in nature, but you have talked about an intention to grow cash flow in the future. So thoughts in terms of how much of the 1Q beat will unwind possibly during the rest of the year? And any changes in your view around the intention to grow cash flow sustainably over the coming years? Thank you very much. Clearly, I mean, you are spot on in your analysis, but the cash flow growth over time needs to come from CapEx, working capital and our profitability. And that is the fundamental base for cash flow growth, not tax and financial net. We can work with that as well, and that will have an impact, but that is not our core what we're driving. So that's what you should foresee over time. Thank you. Thank you, Maurice. Could we take one more from the floor? I know that Thomas Heath is eager to ask a question. Two questions, if I may. And we already have unlimited offers from competitors, at least, in Finland. So just curious to hear your thoughts on this development, perhaps on a longer term thinking on how you view these type of offers. And then secondly, on Latvia, which you've moved to other operations, how should we think about Latvia again in the longer term? Thank you. Thanks, Thomas. Well, unlimited or not, I think the main point and the main focus is to give our customers what they need and want. And right now we're doing that. We have generous buckets, if you call it that, which are well and competitively priced. That's the feedback we're getting and that's the numbers we're showing. Of course, there are more to do, but we're still reluctant to go unlimited because we don't see the reason for it in fact. Of course, perception wise, we need to create a value that works for our customers and that you need to then be very close to market and see what happens. In Finland, we have tuned it to be very competitive. In Sweden, we're still competitive, but I'm sure we can do more. We saw some competitors coming out with very strong numbers and we're looking at that, of course, and see if we can change anything and tune our proposition. But right now, I think we're in a good spot with the Telia brand in Sweden giving a lot more, charging a bit more. On Latvia, thanks for bringing that up. That was the missing piece in our 7 markets in the Nordic Baltics. We still have 2 companies there, associate and subsidiary. We have a clear ambition and the desire to bring them together to create the full potential of the 2 companies coming together like we have done in Estonia, like we have done in Lithuania and Finland by the way and Sweden also bringing and mobile together. And we see the clear proposition for that, but we need other shareholders to agree with that and mainly, of course, the Latvian state. And we have good constructive dialogues, which we hope to progress during the near future. Thank you for the question, Thomas. We return to the conference. And operator, could we have the next question, please? Absolutely. The next question is from Sunil Patel. Thank you. Good morning, everyone. Just two questions for myself. On Sweden EBITDA, you grew the EBITDA very slightly, but you grew it last year. Do you believe that Sweden EBITDA can grow in 2017? And my second question is Johan, you mentioned convergence, I think, earlier in the slide deck. Can you give us maybe some statistics of sort of how many of your customer base take 3 or even 4 products from yourself? And really what your ambitions are in terms of those KPIs? Thank you. Thanks, Sunil. Let me be clear on Sweden. And Christian has said it several times. It will improve over the year, especially from stronger focus on the cost, getting that in line with our expectations. So that's a very clear message and a very clear focus. We don't guide on country per country EBITDA. But as Christian said, the shape of Sweden EBITDA is that it improves second half. And I think you should take comfort in that. In terms of convergence, there are many measures you can have. And we have introduced a new definition for instance of ARPA in Finland, which we follow very closely, average revenue per account. That's one measure and we see strong improvements when people take up of course more services. The key measure that we look at also here is the churn and that reduces significantly as you take 1 or 2 more products and services. And that's the whole point of my triangle that I showed you on my slide. We're starting from the top. We're starting from offering this segment that wants more from Telia Brands, more services, more products and are prepared to pay for it. That creates stickiness and loyalty and then you can trickle down later. So we don't start with discount and we're keeping an eye on loyalty and churn as key measures. Just as a follow-up though, like how much of your base, how many what percentage of your base are within such a bundle? And I appreciate it's not discounted, but actually takes such a products we have in our various segments. I think when time is right, we'll come out and show you how it looks in the respective countries. We're not mature enough on our convergence across the footprint yet. So that's why I bring it up to show you our focus of that. It's more important to take step by step than rush in to show convergence with this order, and that's not up. It. Your next question comes from Nick Lyall. A couple of questions. One on Sweden, please. In the B2C business on fixed, some of the adds look pretty weak this quarter. So is there a rising competition in the fixed business that you're seeing? And secondly, on Turkcell, any progress at all on talks with the other parties or on the prospect of a dividend from your standpoint, please? Thanks, Nick. Let me take my favorite subject and Christian you can take the Swedish one. Turkcell, we clearly there are a lot of things going on in Turkey as you are aware and also quite active Turkcell agenda. There was an AGM ambition for Q1. I think that is now scheduled for Leitolde for a dividend. There is nothing we have counted or put in our plans or forecasts. So if a dividend should happen, that's an upside. And on the fixed side, as I said before, we had a slightly increase to SEK 170,000,000 drop in Sweden compared to SEK150,000,000 in previous quarters. We don't see an increased competition. And it's too early to say in this legacy segment if there is any changes. So we have to wait and see. But we will keep our eye on it, but nothing alarming at this point. And your next question comes from Andrew Lee. I just had a question on and A and Content and then a question on Swedish Mobile. So on the content side, I wonder if you could just talk through how can owning content improve your customer proposition in domestic fixed? And are there any organic or inorganic opportunities to deliver that? And then secondly, our perception is that operator confidence in Swedish mobile growth seems weaker. Most of you seem to expect relatively low growth, at least over the next year or 2. I wonder if you could just talk about what has changed structurally, do you think? I mean, Swedish mobile no longer offers greater top line growth in European peers. Andrew, on a broken line there. I think we picked up your questions. Let me address the content question. It becomes a bit generic, but still, of course, great content is a prerequisite to have a TV offering. And then the question is, how do you deliver that content? And we do that today as a distributor or a smart distributor or an even better distributor. And we, I think, have shown a good track record across our markets to do that. Then the question is how do you get the right content on that distribution? And today, we do it in a classic way. We buy content from the content houses and then we deliver it to our customers. The question we have, how sustainable is that over time? What do we need to do to get secure our content for our customers to make sure that they stay with us not just on one product, but back to my convergence discussion on more products, which will be, as we all know, a great business case. So the strategic question is how do we secure content? And that we can do in many ways. I think we need to do more than we do today to just buy content. We can partner up and we're looking at that as we go along. And we haven't done anything yet And that means that we haven't found any attractive value creative way of doing it. And that's always a prerequisite when we do these things that we look at it strictly from a value creation point of view. And if we do anything, we will come out and give you very clear views on how to create value on that type of talk about the top line growth of mobile in Sweden? Yes. That's your favorite topic. That's my favorite topic. Well, on the lower growth in Sweden compared to the Europe market, I and your expectation that it should be higher in the future compared to the European peers. I think I don't think we have a situation today where we believe we don't have a potential for growth in mobile going forward. And then the question is what the rate will be and we will see. We will do our best to increase both pricing and the value creation for our customers. That's a combination, of course. And that's it. Difficult to answer actually your question of if we would be lower than Europe in the at the moment. And it doesn't appear to be it's at the moment, and it doesn't appear to be your kind of soft guidance for the year. What are the obstacles? What's stopping you kind of delivering the above average European growth that you have been delivering in the past? Is there something new that's holding you back? Let me have a go as well then at the important question, but let's zoom in. This is all is relative and it's all also domestic. You can't really compare us to Greece or Sweden to Portugal because they're on different stages of the growth. So the relevant comparison is in country and that's a very important measure, how we do against our peers. And some quarters we win, some quarters we lose. And our ambition is always win on revenue market share. And I think there is more growth in Swedish mobile. There is still we're still in growth territory. We see some competitors delivering great numbers. So of course, it's possible. And that is encouraging. We're not let down by just being behind 1 quarter. We're encouraged that there is growth out there if we get the propositions right. So I'm sure that Sweden will continue to have growth if we do things right on a good level. And your next question comes from Ulrik Rat. Yes. Thank you. My first question is on fiber in Sweden. Obviously, Q1 is always a bit slow, and I think this one was a bit slow. So just wondering, how is it on the end customer side in the Q1? And do you see signs of increased competition based on all these sort of statements from some competitors about a push in this area? The second question is, again, coming back to Swedish costs. The overall commentary you're putting forward today sounds a bit as if something has sort of gone slightly off piece there and that it wasn't entirely as planned. Could you just I mean, obviously, there are elements of that that were planned because you sort of guided for a back end loaded year. And I was just wondering, when you talk about sort of the incremental measures you're now taking to alleviate this sort of possibly slightly unexpected developments, could you just sort of single out what exactly happened that was maybe slightly unexpected compared to the more sort of planned elements of all this That will be very interesting. And my last question, if I may, is sort of coming back to Andrew's earlier question. I'm not sure I might have missed it, but I don't think you have, in fact, disaggregated the Swedish mobile growth this quarter between B2C and B2B. That will be interesting to get an update how that went for the 2 segments separately. So let me start and then Kristian will take the 2 last ones. On fiber, yes, there is an increased competition, which is no surprise, which is good. I think retail, you have to divide it for us then into 2 areas. On the retail side, I think we're still doing well, taking our share, delivering in line with last year on the OTCs. But you also have the fact that when we lose in retail, we can get some of that back on wholesale, which then should compensate for some of the on the loss in retail. But the reason we really, really want to have the retail interface, of course, is to be able to offer our converged proposition with a full range of portfolio. And that we lose if we lose in retail. So with all respect for wholesale, that's not we're not happy just getting wholesale. On the I'll start from the end. And on the revenue side, sorry for not mentioning that, we had around 3 percent on the B2C mobile growth and negative 1% approximately on the B2B. And there we did grow on the Sohozme and went down on the large. On the cost side, well, as you say, we have guided for a heavier first half and this is in line with that. But we're still not satisfied with the level and the drivers are the elevated customer operations and the cost that goes to OpEx rather than CapEx that has been sort of the ones impacting most from an expectation point of view. Okay. Thank you. Thank you, Ulrik. Unfortunately, time flies. So I think we have to end this presentation here. For those of you that didn't manage to get your questions asked, please reach out to me or my colleagues and we will provide answers to you. Thank you, boys. Thank you. Thank you. And see you back in July at the latest for the Q2 presentation.