Earnings Call: Q4 2013

Jan 30, 2014

All right. Welcome everyone to the presentation of Telias Neeras 4th Quarter and Full Year Results for 2013. I'm Jesper Wilgott, Head of Investor Relations. And with me today to present, I have our CEO, Johan Denner Lind and also our CFO, Christian Louiye. After the presentations, we will have a question and answer session, and we intend to close this event within an hour. So by that, I hand over to Johan, please. Thank you, Jesper, and welcome all. Even if you're fewer here today than last time, I understand there is a busy morning in the reporting of the other companies. But welcome anyway for you live and also for the people online. We'll take you through the some of the highlights and lowlights of the quarter before Christian will go through some of the more details on the numbers. If I want to summarize the Q4 at least, then we if you look in organic local currency excluding acquisitions disposals, we are flat on revenue and EBITDA actually. We see continued growth in Eurasia even if it's down somewhat. It's still 8% local organic growth with improved margins in Eurasia, which is encouraging. We also see if you look one level below, we see an improving trend in the consumer mobile space in the Nordics, which we'll go a bit more into detail. We continue to strengthen our corporate governance and the compliance agenda across the group. And we also, as you know, implemented a new operating model or announced a new operating model to go live April 1. The Board approved for recommendation to the AGM a dividend of SEK 3 per share for the full year. So those are the highlights. I'll go through now a little bit more the details of some of the numbers. Reported down, yes, but again in local organic pretty flat on net sales. We are up on CapEx both on absolute and in relation to sales, mainly 4 gs and fiber coming through in many of our countries. We then commit very hard to delivering an even better Internet experience throughout our operations, both in fiber and 4 gs. And on the fiber side, we are now at approximately €1,89,000,000 fiber deployments across the group. And what we see when we do fiber is that we increase also the loyalty for more of our services to our customers. So this is a way also to get into the homes to strengthen the customer relationship. Also want to note that our international carrier is having a good quarter, but also strategically important now when we're delivering even more data and Internet traffic through our networks. On the 4 gs side, all of our European operations are live on 4 gs and we see great uptake and customer response to the speeds and the quality that we are delivering. On the Eurasian side, we have a couple of operations, 4 gs. Obviously, the big market Kazakhstan, we have not succeeded in getting 4 gs into K cell. And as you know, we also wrote down some of that in January or in Q4. We announced earlier in January a write down related to that. But we're still working hard to get our 4 gs license across our operations. When it comes to then the data and the Internet traffic and to monetize this, we talked about this in the past and we continue to monitor this closely. This is an indication then that we're still around 50% monetization of the increased data, still heavy volume and demand on our services, 60% volume growth and around 30% percent volume growth and around 30% data revenue uptake. And then if you split that out on the build revenue side, we see that we're growing now in Denmark, Spain, Norway, which is encouraging. If you then split it one a different way, consumer and enterprise, we see on the Nordic side consumer that we have a positive trend when it comes to the build revenues. As you know, the build revenues here are excluding the interconnect. But then we have growth and increasing growth on the consumer side, very, very positive. And Finland turned positive in Q4, which is additionally encouraging. On the B2B then, however, we are seeing a strong price pressure across our footprint. And also on the build revenues, we are decreasing in our footprint. So this is something that we have not talked much about in the past, but this is very obvious when you break it up this way. And to calm you a little bit, there's strong improvement programs going on, on the B2B side across the group. Quick look at Sweden. If you break it up, mobility broadband, we are down on reported and organic in Sweden mainly related then to the B2B, up slightly on the margins, but a lot related to the interconnect. And Christian will go a bit more into the details on the Swedish profitability. On the broadband side, same development, I would say, in terms of the traditional fixed, traditional voice revenues are declining, but at the same time, pretty good uptake on the fiber deployment and the IP traffic. So the balance is the challenge, but it's according to expectations. On Finland then, as I said, promising signs across both broadband mobility, especially mobility consumer, where we by the way today or yesterday launched a new pricing plan according to our data pricing models trying to capitalize also better the data growth in Finland. We'll see how that goes. One more point on Finland is that the improved EBITA margin is partly also a lot to the cost initiatives that we've had throughout last year. Spain, this year the Christmas campaign started a bit earlier and we invested quite heavily in the market to improve our position and to gain share. It's an increasingly competitive market in Spain, both from the 3 big ones, but also from the MVNOs. So our Q4 is growth in terms of a lot of equipment and device sales, slightly up on build revenues, but also quite high subscriber acquisition cost in Q4, but we are gaining share and we are building a stronger position in Spain. Eurasia is, of course, still our growth engine, around 8% on local currency with an improved margin up to almost 53%, strongly driven by Kazakhstan and K cell. On the CapEx side, slightly down, but we are investing as much as we can on the 4 gs, 3 gs and Internet side. A quick look at the data revenues that are now becoming visible from low levels, but now increasing heavily. Data growth in Eurasia as a whole is 40% and now accounts for about 13% of the revenues in the whole portfolio. So data increasingly important in Eurasia. A couple of words on our sustainability agenda. We are including this more and more in our overall strategic agenda, including it in our initiatives, which we're rolling out across the group. A couple of examples that our code of conduct is now completed above 90%. We're strengthening the anti corruption training and improving that framework. We have, as you know, also following the latest news streams, adopted the Freedom of expression policy, which we announced last year. And yesterday, the Board also approved a new sponsorship policy to deal with the difficult environments that we are in. And as you also know, there is an ongoing review of our transactions in Eurasia led by the Board and helped out by Morten Rose and Manheim Sverkling. It's still ongoing, but we expect it to close in this quarter leading up to the AGM early April. And a couple of words looking forward. We are in the middle of our strategic review. The focus right now is to get back to winning in many of our markets where we have lost market share over the last couple of years, strengthening the propositions and the offerings, but also investing in the product and the networks to make sure that we stay competitive or increase our competitiveness. We have simplified and clarified our structure through the new operating model where we transfer more decision making locally and also merge fixed mobiles into one responsibility in order to address the consumer demand and the B2B demand, which is much more converged than we are operating according to. We have a stream also to revive our innovation, which is key to the future relevance. And we have kind of slowed down there lately and now we're trying to revive that and get back on so commercializing some of the great ideas and the skills that we have in the company. And needless to say, rebuild reputation is a core part of our agenda integrated in everything we do. Then we, as you know, are proposing a SEK3 per share dividend and I note that the yield is going up as we speak, but it's an increase of 5.3% related to last year and we're taking steps in the right direction. For next year or for this year rather 2014, we're looking at a pretty flat development on revenue and EBITDA, slightly up on the CapEx to support the growing demand for our Internet services across the group. And with that, Christian, I will hand over to you to take us through the numbers in more detail. Thank you. Good morning, everyone. Christian Louiga, CFO. I like to start with summarizing the full year. We are also closing a full year, not only a quarter. And we are meeting the outlook we gave in the beginning of the year with flat revenue, the increase in the EBITDA of 1.7% in local currencies and increased margin. And EPS is quite a lockdown, but that has its natural causes in the onetime effects and the tax and the currency effects. Over the past years, we have had a declining growth rate, as you have noted, and we have been able to balance this quite well on the cost side. So we have a good balance between revenues and cost, which has been important throughout all years. The main reason for this is the cost efficiency program that we have been running. And this started in 2012 October. We told you that we would cut cost, OpEx, excluding Spain with SEK 2,000,000,000 and that would also affect 2,000 employees in Terjeunera. Throughout 2013, we have actually made over 2,000 employees redundant. So therefore, the redundancy program is closed. The cost for this program became less than we expected at SEK 1,200,000,000. We will continue to drive cost on other types throughout 2014, and we still expect to meet our original target. The margin has gone down in the last quarter compared to last year. There is a couple of effects. Johan talked about Spain. Spain had a quite high SAC cost in quarter 4 compared to last year. We also have a slight decrease in Mobility Sweden. Mobility Sweden have 2 main effects on its profitability. 1 is the B2B sales that we talked about, which has onetime effects more of sales character last year on delayed big large customer count, but also a declining overall B2B build revenue trend. On top of that, the variable pay in quarter 4 this year was higher than last year. Overall, otherwise, it was quite flat profitability in Sweden. On top of this, we have 4 storms in Sweden this quarter in quarter 3 in quarter 4, sorry. And we also have some fixed assets that we have been writing down that is not nonrecurring. Year on year, we did increase 0.5 percentage point on 12 month rolling. Currency plays a big impact on our revenue and EBITDA. The main effect comes from Eurasia currencies and from Norwegian krona. And because Eurasia has a higher profitability level than the group on average, it has a bigger impact on the EBITDA than it has on the revenue side. We have talked about the interconnect, and I just want to visualize the impact from it not only on the mobility side, which is 3.5%, but also on the group side. It's 1.7 percentage point on the group level revenue just from the interconnect effects in mobility. These have a much less effect on the profitability, as you know. And you also know probably that it will be a less impact in 2014. Encouraging is to see the B2C sales in broadband Sweden. It's going up. And this quarter, it's plus a couple of percent. And 2 thirds of that comes from the quite aggressive fiber rollout in Sweden, where we have onetime charges. We had one all time high fiber rollout in Sweden this quarter of 12,000 single dwelling units installed. And the other part is hardware sales, where actually the tablets was the Christmas present of the year, as you know, and that also boosted revenue somewhat. But more importantly, the price increases we have come with on TV and fixed telephony have started to give some impact in quarter 4. It still hasn't given the full effect. In quarter 1, it will slowly come into full effect, not from the beginning. We have seen a change in CapEx mix. We have also talked about that, that Eurasia should go down, a more stabilizing revenue growth together with also quite heavy build out in the previous years, takes it down in percentage of sales a little bit. Meanwhile, the 4 gs and fiber investments are increasing. Between 2012 2014, we will double the investment in money in 4 gs and in fiber. The fiber investment itself increases over 45% this year. The number we saw on the picture before from Johan was that we had 1,800,000 fiber installments right now. 645,000 of those are in Sweden. And the penetration on those are now today 65%, meaning that we have still some upsell to do on those households. We have said also that we expect it to go up next year, and the reason is simply fiber and 4 gs. We declared in May this year that we would change our strategy to on the coverage side in all Nordic markets and also in Baltics. And the main effect on the rollout will come next year. And the pace we have in fiber is increasing every day, so we expect it to also increase next year. Cash flow is healthy. It's down compared to last year, but I would say we are above our own expectations in quarter 4. If you remember in quarter 3, we told you that we would expect a low cash flow in quarter 4 due to payments from consumers coming in the Q3 instead of the Q4, depending on when you pay on the last day of the month or the 1st day and the next month in the quarter. But the pressure and the work we have had on working capital gives effect. More people internally think about when we pay our vendors and not only that, we should pay our vendors. And that has an impact. In the 1st year, we have had this really big effect from cash flow on that. On top of that, we have good tax situation, and that will also change next year. On the full year, we're, of course, very satisfied with going from SEK 12,000,000,000 to 14,400,000,000 which is up 20% on cash flow. And it's just very good. We have therefore a solid net debt position, SEK 55,000,000,000 going into the year. The net debt to EBITDA is within the lower part of our range, SEK 1,500,000,000 to SEK 2,000,000,000 We will have a dividend coming. We have refinancing of SEK 8,000,000,000 coming in the Q1. But we feel quite comfortable for this and we have a healthy liquidity position going into this quarter than this year. Nonrecurring items impacted EPS, as it says, but also taxes. And the nonrecurring, we announced on the 16th January. And I don't I'm not going to go into them in detail right now. But the tax effects, I just want to point out, you tend to forget about them. Last year, we had actually a decrease in the Swedish tax, and therefore, we got a positive effect on tax. And this year, we had a decrease in the Finnish tax, but we had a negative effect on that. It's not so easy to understand why. But we have quite a lot of deferred tax assets in Finland, and therefore, we had a negative effect this year. And the total impact was actually about SEK 1,800,000,000 on the tax line. So it has a significant impact. Finally, summary. Revenues and EBITDA flat in the quarter. Efficiency measures are on track. Net debt EBITDA in a solid position going into 2014. And we propose an increase of 5.6 percent in dividend to NOK 3. Thank you. All right. Thank you, Christian. Time to open up for some questions. And I think we'll stick to tradition and start with the flow on. And maybe we should start over here with Erik. Do we have a microphone? Erik Perst, Danske Markets. I was just wondering about the further about the B2B and B2C markets in Sweden Mobility. Could you help us understand that diverging trends and to what extent they are also linked to subscriber growth or losses in these two segments? And what the revenue split is, please? So generally speaking, the B2B segments across the board, as I said, we're facing heavy competition, but also heavy price erosions on core services. We see that we're overly exposed in the large enterprise public sector where the price pressure is even stronger than in the SME SOHO sector. But as we speak, I think we're getting more and more into the right position in these various segments. But it is still in a decline mainly related to the price erosion on the larger companies. We are, we believe, on that side maintaining market share, but probably slightly softer on the market share in the lower segments. On the revenue split, around fifty-fifty, I would say. Okay. Can you take the microphone? Polleti Finland. Is this just in Sweden or generally? It's mainly Finland and Sweden. Stefan? Stefan Goffang, Nordea. I would like to focus on Spain. We have seen competition increasing this year. You've had fairly low subscriber intake, at least if you compare to last year. And we have also seen service revenue growth turning negative. And despite weaker intake, we see that the underlying margin is it was 2.8% in Q4 this year and 14 point 9% last year. Just if you can comment that and if you need to take some measures to turn the trend there. Secondly, you've made a network sharing agreement with Telefonica, and I believe that you will see some positive impacts on EBITDA from that next year. Can you just comment on how much we should expect from that? And finally, the former CEO tried to sell the Spanish operations. Just wondering how Johan Denend Lind looks at that, if that is to be part of the core operations of Telesor now or if you're looking for an exit? Thank you. Thank you, Stefan. I'll answer 2 of the questions and I think Christian can comment on the effect from the towers. So as I said in my introduction, we took a stance that being in Spain, committing to Spain, you also need to grow share because we are still subscale. So we have invested in the market this quarter and the Christmas campaign came earlier. We started the Christmas campaign earlier and there is a couple of factors driving the SAC, the subscriber acquisition cost higher in the quarter, partly because there is higher gross adds than before. So we're taking share. We think at least we're net winners in the porting game, but we also think we're gaining share overall. Secondly, the handsets are becoming more expensive as the consumer base that we have are moving up to smartphones. So the SAC for the smartphones has increased the subsidy for the smartphone is increasing. And then also we are have invested more in marketing during Q4. So those three together impacts the EBITDA significantly in Q4 from quite low levels. So that's why it has such a big impact on the margins. But you're right, underlying 2.8%. And we are in Spain, and we are investing in Spain to create value in Spain. So that's the answer on the last question. And on the towers, of course, we haven't moved over all the towers yet. So we will have more onetime effects from the transfer to Albertus. But we will also have an impact on COGS. It will actually have a positive impact on COGS in the next year. How much do we say that? An estimate around 10%, yes, that we can achieve without finance fully implemented. But I wouldn't expect that in the first until after the first half year when we have transferred the towers. All right. Any further questions here from the floor? One over here, Thomas. Thank you. Thomas Heath here with Handelsbanken Capital Markets. A few questions. On the increased CapEx, you mentioned fiber and you mentioned 4 gs. Is there any particular geographical focus? Be curious to know. Secondly, on EU roaming, there's been a lot of noise during this year and there are some proposals and maybe some delays. What's your best guess at how this will play out? Thirdly, you mentioned increasing data volumes in international carrier. Is there any hope that we could see CapEx side, Thank you, Thomas. On the CapEx side, generally speaking, we are investing more in 4 gs and fiber across the board. As you know, we recently secured important spectrum both in Finland and Norway. So those are being increased in importance and also in the CapEx over the coming period. But we're also in the middle of a big investment program in Sweden to reach not just 99% of the population, but 92% of the geography of Sweden, which is strong commitment to the Internet boom that we see across the board. On the EU roaming side, nothing new really. We continue our work and our monitoring and our lobbying to make sure that we are heard as an industry and as a company. We do it together. We do it alone, but nothing new. On the data volumes, again, on the retail side, we're seeing a conversion of 50%, which is okay, I would say. But on the backbone side, on the fiber side, the carrier improvement in Q4 is mainly driven by voice minutes still. But we're improving our position. I think we're the 2nd largest IP carrier, which now has scale enough to go good negotiations, good scale effects for our retail operations. So that's very important. You want to comment on the CapEx, Christian, specifically for No, I think, I mean, all Nordics and Estonia as well, we're going to follow-up. And the TT network in Denmark is also going to continue to be best in class 4 gs for next year. Should we open up for some questions from the telephone line, please? You do already have some questions. So the first one comes from James Britton. Please ask your question. Thanks very much. Good morning, everyone. I've got two questions, please. Firstly, on the slump in business trends, can you just clarify whether or not there's any sort of cannibalization issues here as business customers now move over to the new pricing model on mobile, so the new flat rate model? Is this an issue for business as well as it has been for consumer, not so much in Sweden, but across the European sector in general? And then secondly, a question on the revenue guidance. I'm just interested to sort of see what level of conservative assumptions are incorporated here. You mentioned the interconnect drag reduces. You've got improving consumer trends in the Nordics. So what are the worsening impacts which will hold you back from positive growth? Are you expecting actually a step down in enterprise? Thanks. Thank you. On the B2B side, not as clear on the cannibalization and not the same risk, I would say. But that is something we're now monitoring. We're launching various propositions across the board also to get the monetization going on the enterprise segments, but not as clear as before on the cannibalization we had in consumer. And then I don't like the word cannibalization by the way. I think it's about simulation in the new trend and the new way of using our services. On the revenue guidance, I mean there are certain areas which are under heavy pressure and those mainly in the B2B space again, where we see positive trends on the consumer side and still growth in Eurasia. But again, if you take it on net sales level, you still have the interconnect effects, you still have the currency effects to get into consideration. Anything to add on the revenue mix for next guidance? I think you see the upsides in a correct way, But on the Q4 compared to the full year on Eurasia, you see also the trend that it will be a little bit slower because Uzbekistan had a quite significant impact this year. So that you have to consider as well. Okay. Thanks. All right. Next question, please. Your next question comes from Terence Tsui. Please ask your question. Yes. Thanks very much. Good morning, everyone. I've got a couple of questions, please. Firstly, on the efficiency measures. You mentioned that the redundancy program is now over. So maybe can you talk about some of the other cost areas that you're based targets for 2014? Secondly, just on Eurasia, I was wondering if you can give us a bit of an update on MTR regulation in Kazakhstan, whether you see any risk of asymmetric MTRs being implemented? And finally, just very quickly, given the events in emerging markets, maybe you can just remind us of any cash repatriation issues, you have any in any of your emerging markets. Thank you. I'll leave the questions for you, Christian. Thank you very much. Well, let's start with the cost split. We will continue to focus what we have also started in the IT area and the structural cost area. It also comes back to marketing. We have done efficiency program in reducing marketing, but not on the volume, but the spend itself by doing better purchasing. For example, we combined the broadband and mobility marketing departments in Sweden last year and that has given some efficiency effects. That kind of structural changes will give continuous effect. The personnel reduction will give some extra impact next year as well because not everyone went home 1st January 2013, of course. The Kazakhstan position, I maybe you want to Yes. There are no news on that one. I mean, what we have is still the negotiated prices that have been negotiated between the operators. So we saw further cut in the beginning of this year from 13% to 11% from around 15% which has been agreed between the operators. And then we will see what the regulator do going forward. And the final question was the repatriation of cash, yes. In Uzbekistan, Uzbekistan, we have had problems since 1.5 years ago, and we have no sites of how we're going to handle the repatriation of cash from Uzbekistan. So that is an issue. I think we have flagged that and talked about that earlier. In the other countries, we have no real issues with conversion of cash between dollar and the local currency. In Nepal, we have had a little bit issues with the government on getting the stamp on the dividend, but to pay back our loans and to pay the interest and pay in and out money and we actually have all the money in dollar in the country, that is not an issue. So it's more to get the stamps from the bank like in the 70s in Sweden. So that's the position right now. Otherwise, we don't have any issues at all in Eurasia. Great. Thank you. All right. Should we move on? Next question, please. Your next question comes from the line of Maurice Patrick. Please ask your question. Hi, guys. Yes, it's Maurice here from Barclays. Sorry to get back on the B2B versus B2C area, but just curious to get your signs and thoughts on the B2B area to the extent to which the pressure is structural or cyclical. Do you see it as temporary or permanent? Is it just competition? Or is it corporates and governments able to spend less through efficiencies? Just walk us through perhaps some of the more detailed trends and that would be very helpful. Thank you. Yes. So just coming back a little bit what I mentioned initially then, we are quite overrepresented, strong market share, strong position when it comes to the larger enterprise, corporate, public sector. They are getting increasingly good in negotiation and procurement, which is good. But it also puts they are procuring in a different way and we need to move ahead and be able to deal with that in a better more holistic way. So convergence on consumer is also happening convergence on enterprise where they want to be able to procure the full communication suites and services. And that's for instance where we have Saiget who is doing really well in packaging our enterprise solutions. But that's a very tough market, strong competition, but mainly it's related to price erosion in renegotiating deals. Fixed and mobile. I mean should we not think about them as separate anymore in the enterprise space? No. You should think about them as converged proposition, converged services where they are more and more procuring the full range of services from us. And that's also when you are in negotiations for the full portfolio of services we need to strengthen our capacity and capabilities. Okay. Thank you so much. Okay. Next question please. Your next question comes from Barry Zeitoun. Please ask your question. Hi, good morning. Just a few general questions, please. In terms of margins, it's interesting that you've got another SEK 1,000,000,000 of cost cutting to come through, yet you're still guiding for flat margins. And that's despite where is it that you expect the margin pressure to come from in 2014? And then in terms of B2C and versus B2B again, can you give us some idea of the relative margin differences between the 2 mobile businesses B2C and B2B for the group? And how those diverging trends are likely to impact your margins over the coming quarters and indeed maybe years as well? And then my last question is just whether you can give us a longer term steer on how we should expect CapEx to develop because it's obviously going to be going up in 2014 as you invest more in fiber and 4 gs. Should we think of that as more of an exceptional year and that we can expect a more normalized kind of 13% to 14% CapEx to sales ratio after that? Or should we expect CapEx to sales to remain higher at kind of 14%, 15% level for the longer term? Thank you. So let me start from the last question and then I'll hand over to Christian for the first two. As you know, we're only guiding for 20 14. We're upping our guidance for CapEx 2014 mainly related to 4 gs and fiber in as I also said in Norway, Sweden, Finland where we recently have initiated those 4 gs and fiber programs. So that's what we say about 2014 and then we'll have to come back on the future further down the road. And let me talk a little bit about margin. We know we have a margin pressure on cost of goods sold, not only even if we drive OpEx, we have a pressure in the broadband side, not the least. We talked about that before. And increase in revenue comes from a low margin business. Meanwhile, the decrease comes from a high margin business. The other factor is that we give our OpEx excluding Spain and that also have a lower margin than the rest of the group. And as it increases, it will also have an impact on the margin. That's the 2 factors I would like to point out. And on the B2B, B2C side, we do not give any numbers on the margins. All right. Should we see if there are any questions here further in the floor? We'll be back. We have one here as well. Yes. Good morning. It's Van Schall from Swedbank. Marlin Franning gave a kind of indication or not guidance maybe, but indication a few years ago that she hoped that fixed the fixed line side or the broadband services should flatten out in 2015. How do you look upon on that now? I mean, I guess she was hoping that fiber would grow more than the drop in the fixed telephony side. And how do you look at that today? Well, what we say about this year, we're not breaking that down in detail. But as Christian pointed out, Q4 has some positive signs on the B2B side in Sweden sorry, in the B2C side in Sweden for broadband. So whether that's sustainable or not, we'll see. But there are some good trends on the fixed telephony that we have worked hard with to stay relevant in that space and also had some price increases recently. Andreas Jorges on SEB. Just a question on Spain and the sort of strategy in Spain because if you look only on Q4, it seems like you want to defend your market share basically at any cost. How should we look at Spain? Well, I think we need to look at Spain. If you're in Spain, which we are, then we need to make sure that we take a long term view on what we do in the market. And then it's still about growth to get to a more sustainable level where profitability can kick in to our expectations. And that's what we're doing now. We're investing in the market to gain share, which we are doing, but it comes at a higher cost, which we then obviously prepare to take. Okay. One more maybe we should move over to the telephone line. I guess there are more questions over there. Operator? Your next question comes from Nick Lisle. Please ask your question. Yeah, good morning everybody. It's Nick at UBS. Can I ask 2 please? On the you've said that the Swedish weakness is due to B2B price erosion, but churn is up heavily in the Q4 as well. So do we need to conclude that B2C is maybe feeling pressure on churn and competition and not on the revenue side? Could you just reassure us that B2C isn't seeing churn rising? On the Quad Play comments, you mentioned about fixed and mobile unifying from a group level. Are there any markets where you'd focus on Quad Play, obviously, Spain, but any others? And the final one was just Turkey. You've not mentioned anything about the Capital Markets Board guys taking seats on the board. But have you spotted any differences in governance, any more hopeful of a dividend return? You just tell us about any developments in Turkey, please? All right, Nick. Thank you. I'll start with the last one again, CMB and Turkey. As you know, the Board is now comprising members from Capital Markets Board, but also 2 independent members that we actually nominated and they were selected to the Board. There is proper governance in Turkcell in that sense that we have a Board. We regularly meet with the Chairman of Turkcell and voice our opinion as a large shareholder. So in that sense, I feel that we are in a good situation influencing as much as we can. But obviously, it's not a sustainable position where we are very clear on our expectations what we need to see happening in getting back to proper corporate governance. And on that side, getting back to proper corporate governance is complicated. There are both legal processes ongoing. But there is also a relationship, the management and discussions ongoing to a greater extent now than in the past. So that's what I can say on Turkey. On the Quad Play question, well, obviously, where we can and where we see the need to stay relevant to the customers, we will enter into a converged proposition. But obviously, we don't have that everywhere. In Spain, for instance, we have a partnership with Telefonica, which is starting to at least be noticed even if it's small. But whether we take that further to Quad Play or not that remains to be seen. We're happy to say though that in Sweden, the consumers are increasingly demanding our TV services for instance and we're happy to see that. On the B2C Sweden, yes, there is a high churn in Q4 and it's mainly related to prepaid. Actually growth on postpaid attracted by our new price plan on Complet, which is called, where we have then the text and voice unlimited and then you buy your data plans, which is very encouraging to see. Thank you. All right. Thank you. Next question please. The next question comes from Ulrik Raff. Please ask your question. Thanks very much. I have just 3 questions. My first one is on working capital. I mean there has been a sort of pretty good development in the Q4. You mentioned that in your presentation. And I understand there's sort of really an effort behind it. It's not just a timing issue as I understand it. Could you sort of indicate how much further that could reach in 2014? I'd be interested in some guidance or indications of an ongoing working capital improvement. Second question is coming back to some earlier comment on the interconnect. Can sort of can sort of turn the argument around and simply say, well, I mean, on an underlying basis, you actually expect the revenues the revenue trend in the group actually to be worse in 2014 2013. Is this sort of the way you think about this really? Or is this sort of coming back to an earlier question, is this a degree of conservatism you're backed into the guidance? And my last one is sort of the big picture strategy. Jan, you came in I think you've appointed in June and came in September. And there are things that you've changed notably this notably the new structure. Although I note here that under the Eagle, I mean the company was run as I understand it on a country based structure. It's now it then slipped back to a product based structure now switching back to a country based structure. So it's not maybe not necessarily sort of the decisive force in restarting momentum at Telia. I was just wondering what are your thoughts on the adjustments to the big picture strategy that Telia needs at this point in time? And also whether what you've announced so far and talking about suffice is already your final word on it or whether there would be sort of something of a pretty major announcement maybe later this quarter or later in the year where you really sort of set out your long term vision of where you want to take the company over the next 3 to 5 years? Thank you. Thank you, Ulrich. Very good question indeed. When it comes to the strategic review, which I said is ongoing, then it implies that we're not done yet and we will get back on what that means. But meanwhile, we're doing the changes that I feel is necessary in order to address the shortcomings. And one of the shortcomings that we have seen is our competitiveness in certain markets. And some of the answers lies in the fact that we're not addressing our full potential with our full range of services under one clear accountability. And that's happening now with the new structure and with the new operating model. So we will get back to you on as we go along with updates on our strategic framework. When it comes to the working capital, I think Christian has a perfect answer for you there. Well, as a CFO, I'm always a little bit hesitant to give you too much guidance on the working capital going forward. And when you have a program like this this year starting it, it always have a one time push up on the working capital. Meanwhile, we do introduce, for example, a handset off balance sheet solutions where we get that finance off balance sheet and that helps our cash flow. And we will continue to do elements like that into our normal practice and not just do one time things like moving vendors to the other side of the quarter. And I believe still that we have some room for improvements. However, I don't want to give any guidance for next year on the working capital at this point. But handsets is a typical thing where we have worked and we also have worked with on the CapEx side with our vendors of making sure we pay when we feel we have received proper goods rather than just according to plan. Do you want to make any comment on the how you see the top line development? Well, not much more than I said. Well, there are some areas that are under pressure. There are some areas that we see encouraging signs, but we still have headwind on many of the main drivers, so to say, FX interconnect. But underlying, let's say that the positive signs is consumer, build revenues, the data plans, the monetization of that. The challenges are in the B2B space, which we've talked extensively about today. We have the positives of Eurasia still growing, but less so than before and still with the heavy FX exposure. So all in all, our best judgment for the moment is flat. Thanks very much. And can I just follow-up on one area? Is there any sort of sense of a time line when you might come back to the market and sort of discuss and lay out your sort of your bigger picture plan? Is this a Q1 story still? Is it a Q1 sort of announcement maybe? We'll talk about it as we go along. We haven't set a firm deadline for such discussions, but we are improving as we go along and we're changing as we go along. So if there is anything that comes out as a big thing then we'll obviously talk about it. Thank you very much. Okay. We have a couple of questions here from the floor. Liana? Yes. Thank you. Liana Astor by Carnegie. Just wondering a little bit about the move now that you've announced your country based structure and understand that it brings you closer to the market. You can be faster in new products and services that you launch tailored to each market. But also from sort of a group synergies point of view, doesn't it reduce the scope to implement cost savings and to get out synergies? Thank you, Lena. What is very important to mention here and thank you for pointing that out, the local accountability doesn't mean local autonomy. So we're also strengthening the group functions called group commercial, group technology where we strive for excellence in supporting the local countries. But they also have a synergy responsibility because in the current model, we already have areas with strong synergies. In the mobile space, for instance, we have a common operations for some of the Nordic countries and that's not going to be automatically dissolved. Rather keeping it and strengthening is part of the model. So it's just clearer interfaces, clearer accountability, stronger focus on key strategic areas including synergies from group. We have one more here. Thank you. Thomas Heath here again. A few more if you don't mind. Firstly, on the longer term in Eurasia when growth tilts to data, do you see a risk that you have to increase smartphone penetration and drive handset subsidies pressuring margins? And then a more specific question on Norway. Norway is a bit of a flux influx after the drama around licenses in December. Just wondering whether Tele2 would consider a network share with Tele2 on a similar way that Tele2 did with Tele2 in Sweden or if that's completely ruled out by the experiences in Sweden? Thank you. Thanks, Thomas. Emerging Markets first. Naturally, these markets are not used to subsidies, which is good. But as we want people to use smartphones in these countries, we're increasing the stimulation somewhat. But here we have a chance to control it from the beginning rather than being in a default subsidy market. So I think we are comfortable that we can control it within our own increased CapEx to support that demand. Increased CapEx to support that demand. Norway, we are very happy that we secured the spectrum that we need, and we are now full steam ahead in building out and stretching out our both depth and breadth of the coverage and quality to challenge Telenor in Norway. And we have an energized team in place. So whether we will look at business development opportunities coming up, we always do. Thank you. Should we move on to conference call again? Your next question comes from the line of Jakob Bluestone. Please ask your question. Hi, there. Two questions. Firstly, just getting back to the point on pressure in the B2B segment. I mean, it sounds like there's sort of a broader issue in terms of repricing the back book of your customers there. I mean, could you maybe give us a sense of what proportion of your customers in the how long do you think this process of moving customers to cheaper plans will take. And then secondly, I mean, looking at your service revenue growth in Sweden, so it's sometimes ARPU. It's gone negative now. I mean over what time frame do you think you can get overall growth in Sweden back into positive territory? Thanks. Well, they're somewhat connected to those two questions. But if you start with the B2B, it's not as easy to say that there are certain plans that we're converging the B2B customers to. It's rather driven mainly from the renegotiations of bigger structural offerings to these corporates. But I think and we're not going to go into any details what's the plan for each and every country on the renegotiation, what's up for negotiation, etcetera. I think the comfort I'm giving you there is there has been a B2B improvement program ongoing for quite some time. So this is nothing new. It's just that we now speak about it more openly to you. But certainly, we will have a high attention on improving our propositions in this segment. When you then move into Sweden, as we have talked about today, it's very clear that we have a consumer underlying growth in an important segment. And that I think is the key takeaway. But again, the B2B is not. So that's why you have a pressure on the top line for Sweden. So those B2B questions are connected for the 2. But we'll get back with updates as we go along. Thank you. Okay. Next question please. Your next question comes from Keval Khiroya. Please ask your question. Good morning everyone. I've got three questions please. So first on Spain, can you tell us exactly how many convergence customers you now have? I mean, obviously, your competitors are pushing ahead fairly quickly with that product. And secondly, on Eurasia, you talked about it briefly. But could you tell us exactly how much in dividends you repatriated during 2013? And number 3, on Eurasia again. When it comes to Uzbekistan, are you expecting a new entrant this year? And with Nepal, is the market structure changing given from understanding the regional players have been given nationwide licenses as well? Yes. Starting from the bottom, Uzbekistan and Nepal, we do expect competitive landscape to change. We have said it in the Q3 report, we're saying it again. We don't think that's a 2 player market, neither of those. We haven't seen any entrants so far. We expect them to come during the year and that's also included in our guidance. When it comes to Eurasia dividend, Christian? We will have We will have to come back on that. We'll have to come back on that. And Spain convergence and as I said is starting to gain some attention and attraction. Numbers are small. Great. Thanks. Good. Next question please. The next question comes from Dominik Klarman. Please ask your question. Yes. Just two questions left. On Kazakhstan, any use there on the potential fiber uptake in Sweden in the past, I guess the old management talked about bottlenecks to satisfy the demand there. Just wondering if that's still the case that there is pent up demand and whether we can expect an acceleration of the fiber uptake during this year. Thank you. On the fiber side in Sweden, there is a high demand than we can supply. But we also, as Christian mentioned, have access to multi dwelling units, I. E, multi resident apartments where we haven't got full penetration. So that's an upsell opportunity. But we do expect a continuation of high investments in fiber in Sweden. And we also, on the same topic, say that we are investing and acquiring local networks from cities in Sweden. So that's part of the strategy. We also acquired by the way a ComUp in Sweden in Q4 to strengthen our propositions to the consumers in these fiber places. In Kazakhstan, we don't see that happening unless the 4 gs licenses changes the landscape. And there is one 4 gs license in Kazakhstan, which is still being used on a small scale. Okay. Thank you. A couple of questions still okay. Take next one. Operator? The next question comes from the line of Peter Nielsen. Please ask your question. Thank you. You discussed all the major issues. Just a couple of specifics please. Finland, you're seeing finally improved trends in Finland. Do you believe you've turned the corner here now and that we are moving towards overall revenue growth and also improved margins going forward? And just secondly and finally, you have previously given us indications for the expected tax rate and paid taxes, etcetera. Is that something which Christian is prepared to provide for the coming year? Thank you. Hi, Peter. Thank you. BGC Finland has turned corner, I would say. The momentum has been good building up during Q3, Q4. Whether it's sustainable or not, I hope we haven't kind of suffocated the business with too much savings on the marketing side. That remains to be seen because as you've seen, the OpEx savings are quite big and the margin improvement is quite strong in Finland. But we believe we have the right pace at least now in the consumer Tax and tax, we expect a 20% tax rate and 80% payout ratio going forward. Thank you. And I think we have time for one final question. Your next question comes from Jacques de Groening. Please ask your question. Hi, I'm Jacques de Groening from Americas. I just want to clarify what you expect for Spain. You said that you had an investment strategy in terms of market share. So should we expect this kind of strategy from let's say the coming quarters or perhaps years? Well, I think I'm just going to be repeating what I said. We're not going into details on Spain specifically for 2014. I'm commenting on Q4 in 'thirteen. I said we took an approach where we wanted to invest in that important Christmas campaign period, which started earlier and actually ran in. As you know, Spain has a Christmas, which is later into January. And we maintained that investment over the holiday season. Now we're evaluating the impact of this and the All right. I think that's 1 hour. So thank everyone for coming here and listening. Thank you. Thank you very much.