Telenor
Annual Report
2023
Strategy, performance | Sustainability | Corporate | Shareholder | Financial | |
and risks | statements | governance | information | statements |
Telenor at a glance
Telenor Group is a leading technology-driven communication services provider with presence in the Nordics and Asia. We put innovation at the heart of everything we do, whether we are enabling our customers to connect with family and friends or working to provide secure solutions for businesses in the public and private sector. We are passionate about sustainability and believe in social, environmental and economic value creation. We are driven by our ambition to exceed our customers' expectations and create value for all our stakeholders.
Telenor Nordics
10 million mobile subscribers
4 markets
Norway
Founded: 1855
Mobile subscribers: 2.7 million
Market position: 1
Finland
Part of Telenor since: 2019
Mobile subscribers: 2.8 million
Market position: 2
Sweden
Part of Telenor since: 2001
Mobile subscribers: 3.0 million
Market position: 3
Telenor Infrastructure
A leading Nordic infrastructure player.
26 000 telecommunication sites in the Nordics and fixed infrastructure that connects 500.000 homes across Norway. Data centres across the Nordic region.
Telenor Amp
Investments and partnerships adjacent to Telenor's core business. 15 companies within Internet of Things, maritime communication, entertainment distribution and online classifieds and more.
Telenor Asia
Denmark | Thailand | |
Part of Telenor since: 2004 | 199 million mobile subscribers | |
30.2% ownership | ||
Mobile subscribers: 1.7 million | 4 markets | |
Established: 2023 | ||
Market position: 2 | ||
Mobile subscribers: 51.9 million | ||
Market position: 1 | ||
Pakistan* | Malaysia | |
33.1% ownership | ||
Part of Telenor since: 2004
Established: 2022
Mobile subscribers: 44.4 million
Mobile subscribers: 20.5 million
Market position: 3
Market position: 1
Bangladesh
Part of Telenor since: 1996
Mobile subscribers: 82.0 million
Market position: 1
80.5 | 209 | 11,000 |
billion NOK revenues | million mobile | employees |
subscribers (including | ||
True and CelcomDigi) |
* Telenor announced the disposal of its telecom operation in Pakistan to PTCL, the sale is expected to be completed in 2024. Telenor Pakistan is included throughout this report.
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Contents
01 Introduction
6 | |||
How Telenor creates value | 11 | ||
02 Strategy, performance and risks
Telenor's strategy | 14 |
Group performance | 19 |
Business area performance | 22 |
Risks and risk management | 31 |
03 Sustainability statements
General information | 41 |
Environmental | 49 |
Social | 64 |
Governance | 84 |
04 Corporate governance
Corporate governance in Telenor | 96 |
The Board and governing bodies | 100 |
The Executive Management | 107 |
Executive compensation | 110 |
05 Shareholder information
Shareholders and dividend | 112 |
The Telenor shares | 114 |
Board of Directors' report
06 Financial statements
Consolidated financial statements | 120 | ||
Parent company (Telenor ASA) | |||
financial statements | 192 | ||
Responsibility statements | 210 | ||
Auditor's report | 212 | ||
Definitions and alternative performance | |||
measures | 218 | ||
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Letter from the Chair and CEO
Our digital lives are becoming richer and more advanced. Irrespective of where we find ourselves in the world, we are likely to encounter fascinating examples of how connectivity drives societies forward and improves people's lives.
Telenor's services and infrastructure are playing an important role as an enabler in this development. This is why our purpose of empowering societies and connecting you to what matters most remains a source of inspiration for everyone working in Telenor. We draw on that inspiration to ensure that the customer remains at the heart of everything we do. And as we move forward, we will continue to embrace new technologies to make operations more digital and more efficient - and thereby simplify and improve the customer journey and experience.
2023 has been a year of delivering on the strategy presented at our Capital Markets Day in 2022. Our focus has been on executing on the strategic and operational agenda, and on achieving financial results in line with our ambitions. We are pleased to deliver an organic service revenue growth of 4 per cent for the group and a total free cash flow of NOK 15 billion, in a challenging macroeconomic environment.
In the Nordics, we were able to drive revenue growth while at the same time building on our execution capabilities to drive further transformation of our operations. We have set an ambitious agenda for our One Nordic approach to improve products and services to the benefit of our customers.
In Asia, we are very pleased to have closed two large-scale mergers, which have given us number one positions in both Malaysia and Thailand. Grameenphone remains the market leader in Bangladesh and has seen good subscriber and revenue growth during the year. In December, we announced the sale of Telenor Pakistan to Pakistan Telecommunications Company Ltd. We expect the sales process to be completed during 2024.
In Telenor Infrastructure, we have seen positive development in both the Towers and Fiber segments. There are also new and exciting opportunities within Data Centres, where we are partnering to build secure, and energy- efficient data centers in the Oslo area in Norway.
We established Telenor Amp to ensure active management of the companies in the Telenor portfolio that are closely related to our core business. We aim to continue to develop new and innovative digital services on top of connectivity, either within our established independent companies, or with external partners. During 2023 we sold Working Group Two and announced the sale of Telenor Satellite, to ensure that these two companies can continue their development with strong partners.
Connectivity will continue to be important to address challenges we are facing as a global community, with climate change as the most urgent threat. It is important to us to increase the robustness of our network to better withstand extreme weather events.
Ensuring that we are able to operate sustainably is key. In 2023, we took several steps towards delivering on our science-based climate targets, including reducing scope 1 and 2 emissions in the Nordics, and tackling lack of renewable energy in Asia by engaging with relevant authorities and stakeholders, and advocating for increased availability of renewable energy. To further our climate agenda, we committed to reaching net zero emissions by 2045 in accordance with the Science Based Targets initiative's standards and published our first ever climate transition plan.
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Digital services are developing at an incredible pace - and at Telenor we are committed to doing our part in making the digital world secure, greener and for all. We operate in increasingly digital societies, and we will be stepping up our efforts to provide internet connectivity and digital payment solutions in rural Bangladesh, as well as advanced 5G services to the Nordic business market.
During 2023 we have seen generative AI take huge strides forward - and become available to a global audience. The opportunities are breathtaking. However, as technologies become more sophisticated, we are also reminded that our customers, in both the business and
consumer markets, are likely to face a growing threat from various forms of cybercrime. At Telenor, we want our customers to be safe in the digital world. This is why we are actively developing products and services for their protection. Our ambition, in the Nordics and beyond, is to be recognised as a leader in cybersecurity.
We want to thank Telenor's people who put in an extraordinary effort during 2023, ensuring that our company
is well-positioned for continued growth and value creation in the Nordic region, and for building long-term value in Asia. Together, we will continue our efforts to explore new ways of working, develop our skillsets, and deploy new technologies to ensure Telenor's continued success. We also want to thank our customers for putting their trust in us. As we move forward, we continue to be guided by our shared Purpose: Empowering societies. Connecting you to what matters most.
Jens Petter Olsen, | Sigve Brekke, |
Chair of the Board | President and CEO Telenor Group |
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About Telenor
Telenor's history
We have gone from providing telegraphs, switchboards and phone booths to developing the innovative technologies that empower today's societies. It's a long way from where we started in 1855. A more detailed overview of Telenor's history is available on Telenor.com.
First Norwegian telegraph | Norway is one of the | |||
line opened by the | The telegraph | countries in the | The telephone | |
Norwegian Telegraph | cable connection | world with the | connection is | The first mobile |
Administration, connection | between Norway | highest density of | opened between | phone is |
Christiania (Oslo) and the | and Great Britain | telephones per | Norway and the | launched in |
city of Drammen. | is opened. | capita. | US. | Norway. |
1855 | 1869 | 1893 | 1928 | 1966 |
Telenor lists on the Oslo | Telenor acquires | Telenor enters Asia | Televerket becomes | The GSM-system |
Stock Exchange and state | 33 per cent of | (initially Bangladesh) and | a public corporation | is launched - |
ownership is decreased. | Digi, Malaysia in | in 1997 Grameenphone | and change its name | setting a new |
Telenor enters Thailand | 1999 and a | opens its mobile network | to Telenor the | international |
and Denmark. | majority in 2001. | in Dhaka. | following year. | standard (2G). |
2000 | 1999 | 1996 | 1994 | 1993 |
Telenor enters | Telenor reshapes its organization to take a position as | ||
Sweden and | Telenor acquires | a leading telecom operator and infrastructure player in | |
Telenor Group | the Finnish | the Nordics. In Asia, Telenor will work with partners to | |
reaches 100 million | telecom | build scale and take number one positions in several | |
subscriptions. | operator DNA. | markets. | |
2006 | 2019 | 2022 | |
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Purpose and
identity
Empowering Societies.
Connecting you to what matters most.
Include
Enabling participation for all
Include means that Telenor is committed to equality, by enabling connectivity for all and driving greater societal inclusion through it.
Advance
Advancing connectivity to accelerate the digital future
Advance means that Telenor is at the forefront of technological development, constantly innovating and exploring for the benefit of customers, businesses and
society.
Safeguard
Safeguarding planet, people and data in the digital world and beyond
Safeguard means that Telenor constantly raises the bar for the safety, security and privacy of our customers, partners and
employees, as well as the
health of our planet to drive positive, long-term change.
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and risks | statements | governance | information | statements |
Ambitions
"The Telenor you see today is not the Telenor you will see in the future. We are taking a big step forward to ensure more value for our customers in an increasingly digital world in need of secure, stable, and sustainable solutions. We are building a smarter and more flexible Telenor - a company that creates value for customers, society, and shareholders," says Sigve Brekke, CEO of Telenor Group.
At the Capital Markets Day in September 2022, we announced the 'Reshaped Telenor' strategy and outlined new ambitions for sustainability and financial agendas and reorganised the group into four business areas.
"We are building an organisation that is competitive, with focused investments, profitable growth, and new partnerships. This strategy will create optionality and increased opportunities for value creation" says Tone Hegland Bachke, CFO of Telenor Group.
Our four business areas all have their individual value creation approach: profitable growth for Telenor Nordics, long term value creation and cash flow focus for Telenor Asia, industrialisation for Telenor Infrastructure and asset-by-asset approach for Telenor Amp.
Our financial ambitions reflect this strategy. We aim to drive shareholder remuneration and return on capital through growing the core business in a capital-efficient, sustainable, and responsible way, while maintaining a solid balance sheet.
The mid-term financial ambitions for 2023-2025:
Group:
- Year-on-yeargrowth in dividend per share
- Free cash flow before M&A to cover dividend in 2025
- Net debt/EBITDA of 1.8x-2.3x
Nordics:
- Low-to-midsingle digit growth in service revenues
- Mid-single-digitgrowth EBITDA
- NOK 2 billion reduction in capex before leases in 2025 versus 2022
Environmental, Social and Governance (ESG) ambitions until 2025:
Delivering on our science-based climate targets and be an environmental enabler for our partners and customers.
Upholding high standards in governance across and be the preferred partner for digitalisation and corporate cybersecurity.
Driving social and digital inclusion by promoting skills for the future and workplace diversity.
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Strategy, performance | Sustainability | Corporate | Shareholder | Financial | |
and risks | statements | governance | information | statements |
Highlights of the year
Key events
In January, Telenor sold 30 per cent of Telenor Fiber AS in Norway sold to KKR generating proceeds of NOK 10.8 billion.
In March, the largest telco merger ever in Southeast Asia (by combined enterprise value) between dtac and True in Thailand was completed.
In July, Telenor signed a 10-year power purchase agreement for DNA, to be sourced from a new windfarm in Finland.
In August, Telenor's 48 per cent share in Working Group Two was sold to Cisco, generating proceeds of NOK 0.7 billion.
In September, Telenor secured Swedish 5G frequencies valid until 2048/2050 through Telenor's and Tele2's network joint venture.
In October, Grameenphone in Bangladesh launched a digital safety training program with UNICEF for children and teachers.
In November, the favourable outcome in the tax dispute regarding deductibility of India losses became final and Norwegian state repaid NOK 2.4 billion.
In November, Telenor agreed to sell Telenor Satellite to Space Norway for NOK 2.4 billion, transaction was closed in January 2024.
In December, Telenor committed to become a net-zero company by 2045.
In December, Telenor announced the sale of its telecom operation in Pakistan to PTCL, closing of transaction expected in 2024.
By year end, Telenor had returned to 82 million mobile subscribers in Bangladesh after the SIM sales ban was lifted.
Throughout the year, significant investments in mobile network modernisation including 5G rollout in all Nordic markets.
In 2023, Telenor delivered 5 per cent organic growth in mobile service revenue in the Nordics.
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Strategy, performance | Sustainability | Corporate | Shareholder | Financial | |
and risks | statements | governance | information | statements |
Service revenues
Service revenues includes mobile, broadband and
TV subscriptions in addition to other service revenues which represent the core business of Telenor.
Organic growth of services revenues in 2023 was
4.0%
compared to 2.8% in 2022.
Free cash flow
The free cashflow reflecting the cash generated by
Telenor's operations was NOK
15.0
billion in 2023,
compared to NOK 10.6 billion in 2022.
Scope 3 GHG emissions
51%
of Telenor's suppliers have committed to science-
based targets for the reduction of their GHG emissions, compared to 36% in the prior year.
Telenor is on track to reach the 66% target by 2025.
Digital inclusion
Target is to train 6 million people in digital skills by
2025.
Telenor trained
1.1
million people in 2023, which brings the total
number of people trained since 2021 up to 4.1 million.
EBITDA
EBITDA (earnings before interest, tax, depreciation and amortisation) was NOK 34.6 billion in 2023 compared to NOK 33.8 billion the year before.
The EBITDA growth was
2.2%
compared to -0.9% in 2022.
Dividends
Dividends proposed for 2023 was NOK
9.50
per share, compared to 9.40 in 2022.
Net-zero
In 2023, Telenor set a target to reach net-zero in
scope 1, 2 and 3 by
2045
Diversity
Target is to have 40% senior women leaders by
2025.
By end of 2023, Telenor had
34%
senior women leaders, compared to 33% the year
before.
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Disclaimer
Telenor ASA published this content on 15 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 April 2024 15:34:09 UTC.