Telenor ASA (TEL) Earnings Call Transcript & Summary

Good afternoon, everybody. It is a joy for me to wish you all welcome to this year's Annual General Meeting of Telenor ASA. My name is Bjorn Naess and in accordance with Section 512 of the Public Limited Liability Companies Act and the Articles of Association Section [indiscernible] subsection, it is I who as the Chair of the Corporate Assembly & Company opens and chairs this General Meeting. With me on the panel is Chair of the Board, Gunn Waersted, Group CEO, Sigve Brekke; and CFO, Tone Hegland Bachke. This Annual General Meeting will take place both physically and digitally through log in on the Lumi Solution of DMB. It's also possible to follow the Annual General Meeting via webcast in Norwegian and English and the link and information concerning log ins have been posted on Telenor's website. I'd like to start by giving you some practical information. Shareholders take part physically will be able to log on and vote electronically in the same way with their own computer, smart telephone or a tablet as shareholders to take place online. Shareholders who participate digitally, will be watching webcast of the General Meeting, which is shown at the bottom of the screens as a button that you press on direct sending or broadcast. We'll today, the webcast will take up half of your screen on the right-hand side. Webcast maybe enlarged or reduced in size by pressing the various relevant symbols. When you log on, you will see the number of shares you have as your voting shares, and you may choose the language you want the system to use. There are 4 icons at the top, which you can choose. Home, which will give you additional information about how this works. And I recommend that you read the text. It is posted there. Shareholders who wish to ask questions or comment on any of the items on the agenda, may do so in writing by choosing messages. I'd like to point out that you will be identified by name, but not the number of shares you hold and that your comments will be visible for all shareholders who are logged on. The documents will give you a copy of the notice. By clicking on voting, you'll be able to vote on each point on the item -- each item on the agenda today. You can vote and give your vote by clicking on the icons for, against or abstain for each individual element. Note that shareholders already have given -- granted a proxy, voted in advance or given instructions will not be able to vote on the items. Meeting now is considered to be opened, and we'll now move on to Item #2, which concerns the registration of represented shareholders and proxies, Powers of Attorneys. We are now closed for additional shareholders to log on now. DMB has carried out accounts of those present and the shareholders present and their proxies list will be referred to as soon as it is available. The Annual General Meeting will follow -- deal with the items and follow the agenda as shown on screen now. The Chair of the Board and myself have received Powers of Attorney with voting instructions and Powers of Attorney where the voting have been left to the assigned person where the voting has been left to the Chair of the Board or me. We will vote for the proposal from the Board, and these proxies will be reflected in the voting results, which will be available as an addition, an appendix to the meeting minutes have the following share of capital. We have 68,902,000 shares represented in the form of advanced votes. We have EUR 187 billion shares represented by instructions to this. We have 14 shareholders who are taking votes digitally and represent 755,208,970 shares. And here in the auditorium, we have 5 shareholders who are voting for 7,281 shares. In total, this gives us 1.822 million votes, which comprises 73.9% of the total share capital. We will now then move to the individual items on the agenda. You will now have an opportunity to vote on the items, which will now be opened and we'll move to the first Item, which is the approval of the notice of the Annual General Meeting and the agenda. The notice of the current general -- Annual General Meeting has been sent to all shareholders with a known address on the 19th of April, 2023, in compliance with Section 510 of the Public Limited Liability Companies Act and the company's Articles of Association. The notice, the other documents referred to in the notice proposals for motions and the proposed IR agenda and the company's Articles of Association have been made available on the company's website in accordance with Section 8 of the Articles of Association. I cannot see that we've received any comments or questions relating to Item 3. And I would then notify you that an opportunity to vote for Item 3 will soon be closed. So ask that any shareholders have not yet voted or wish to change their vote must do so now almost immediately. For those of you who did not catch the explanation of how, you can vote digitally. This is also written on the information page, which you're now logged into. If you click on the home symbol on your screen, this will take you back to the information page. We will just wait for a moment so that everybody has an opportunity to vote. And we notify that you can vote on the remainder of the items as well until each of individual cases is being -- Item has been closed. So we will wait 30 or so seconds to ensure that the voting takes place. [Voting]

We cannot see that there are any comments to the Item under discussion and the voting is now being closed. And this Item is considered now to have been adopted. Then we now move to Item 4, which is the election of a representative to sign the minutes of the Annual General Meeting with the chair of the meeting. Under Section 516 of the Public Limited Liabilities Act, [indiscernible] come to that. The Chair of the meeting and at least one other person should be elected by the Annual General Meeting to sign up minutes. And we propose that the representative Bjorn Tore Sommer, representative for the Ministry of Trade Industry and Fisheries be elected. We cannot see that we have received any questions or comments. So we will very shortly close the voting on this item. Anybody who has not yet voted must do so now. And we will wait so that everybody has an opportunity to do so. [Voting]

The voting has now been concluded. The count up shows that the election of Bjorn Tore Sommer has been adopted. And Bjorn Tore Sommer is then elected to sign the minutes together with the Chair of the meeting. We now move to Item #5, which is a report by the Chair of the Board and the CEO, Group CEO. Gunn Waersted, the Chair of the Board, will begin. If you have any questions through the report, both from the Chair of the Board and the group CEO, we will gather this up at the end after both have speak -- given their presentation. So Gunn, please go ahead.

Thank you. Dear shareholders, let me begin by stating that 2022 was yet another eventful year for Telenor with operations in many countries, especially in Asia and in the Nordic countries, will always be things that are happening and occurring. But this year has been particularly important with a view to staking out our strategic course. Development of our strategy up until 2025, and the pertinent review and decisions concerning plans that need to be carried out in order to achieve these strategic goals, have taken up a lot of the time of the Board in 2022. The Board, together with the administration, have worked particularly thoroughly in order to stake out the strategic course and highlight strategic targets for this year that we've just finished. For this reason, we're very happy and pleased with the shareholders, that the shareholders and coworkers have given clear and positive feedback about the strategy that's been presented at the Capital Markets Day on September 2022. Share price developments for Telenor shares in 2022 were weak and negative up until the Capital Markets Day. And there's little solace in the fact that other international companies in the telecom sector were also struggling during the same period. But it's all the more joyful now to see how the share price trend has been positive, both absolutely and relatively in the period after presentation of the new strategy. So far this year, Telenor share will be among the most positive shares on Oslo Stock Exchange. We take that as a clear sign that our strategy has been understood and accepted. However, this also creates expectations. It's the case that in the planning and the implementation of the plans, the most important and demanding aspects lie. 2023 is a year where our focus in the organization shall be and is in implementing the plans we have put down or laid down. I would say, that the organization is well on its way, and it's important that this work continues and abated. It became clear during our work with the strategy that the change in organization of our operations will be expedient. Sigve Brekke will come back to this in his presentation. So just let me just mention the 4 business areas the Telenor has is now organized from the year-end. Telenor Nordic and Telenor Asia will as separate business areas, be better positioned than ever before to serve the unique customer requirements across their own very different markets. Telenor Infrastructure has been established to develop values in the critical infrastructure of Telenor and Telenor Amp will strengthen and reinforce Telenor's competitive power by developing and investing in companies relating to its core operations. The Board is of the opinion that new organization will give clearer priorities, greater market and customer focus, a clearer corporate responsibility, management responsibility, greater innovative power at the same time as the overarching way of operating Telenor operations and its values remain in place. Of other matters that should be mentioned when we now speak about our status for last year is the implementation of the 2 mergers in Asia, the establishment of Celcom Digi in Malaysia and True in Thailand, respectively that required a huge amount of resources and have been very time-consuming in achieving this. But the Board is convinced that the establishment of these 2 very large companies in each market will create value for the customers and shareholders, and in order to operate a digitalization in Malaysia and Thailand by becoming even stronger partner for private individuals, companies and society in its entirety. Now that all the formal aspects are in place, our focus will be on delivering planned synergies and retaining the strong market positions that have been created. The new companies will make -- even more well equipped to deal with market opportunities and risk within the respective markets and across the region, size and advantages of scale are crucial to our industry. For this reason, creating #1 telecom operator in these 2 important markets was a considerable priority for us. With the exception of Pakistan, our partially owned companies in Asia are now market leaders in their respective markets. Also important was the sale of 30% of Telenor Infra to American KKR and Oslo Pension Fund. This sale clearly show the values that are available in the infrastructure. At the same time, this commission from the sale secured investment capacity, which Telenor does require, in particular, to invest in the rollout of fiber networks in Norway and other companies and the development of building out of 5G that takes place in most markets. Telenor is now in 2023, stands in a different position than it was when I was here a year ago. We are certain that we have presented a good basis for transformational process, which will enable Telenor to create greater values for its customers and shareholders at the same time as we foster diversity, security and equal rights, equal opportunities in the workplace. We have taken crucial steps in order to resolve these challenges we are facing, both for the industry in its entirety and for Telenor as a company. At the same time, the company is well positioned to benefit from the opportunities which occur in the time with disruptive developments in most industries. Telenor has delivered its ambitious digitization targets, which make it possible for us to use the newest technology to deliver products and services, which will fill changing customer needs. At the same time, we will ensure that our customers have a secure and inclusive experience they can trust in. Telenor creates or maintains its obligations for reduction of global warming by cutting emissions of climate gas in our own operations and by making requirements on our suppliers. By picking up on both the challenges and the opportunities that lie before us, I am certain that Telenor will remain a leading player in telecommunication industry also in the years to come. I've now been 7.5 years as Chair of the Board in Telenor. And this means that I'm the longest sitting Chair of the Board in the company since it was listed on the stock exchange 22 years ago. And I will now withdraw after this Annual General Meeting. These have been 7.5 demanding, exciting and very interesting years. First, when you look back,and see everything you've -- that's been done over the last years, I really do understand how much of this occurred. I won't bore the auditorium by listing all the various -- all these matters, but I would like to highlight only the importance of simplification of company's corporate portfolio, digitization of operations, work on establishing the values and principles for corporate governance, sustainability and goals for responsible business operations and the work in developing corporate culture, characterized by customer proximity, openness and good working climate. I'm proud of the fact that we, together, have achieved what we have achieved, and optimistic because Telenor is now facing -- standing on a sound foundation to deliver for the future. Let me in conclusion, thank the management of Telenor. It's Union operatives and all the coworkers for the work they've done -- the hard work and their enthusiasm.

Thank you, on for your presentation, for your orientation. There will be an election of new Board members and share of the Board. It will take place later to the meeting of the corporate assembly. Then we have the CEO of Sigve Brekke, who will present the company's activity strategy and priorities. And as mentioned, we will await answers to any questions or we await the questions after we have heard the presentation of the CEO. Please go ahead, Sigve.

Thank you, Eric and Gunn, we also have to thank you. You thanked us. Thank you for the good cooperation to you as the Chair of the Board and the entire Board during this 7.5-year period. It's very nice to see more shareholders than what I've seen in a long time. It something about the digital aspect that leaves something. Now when I look at you, this is a bit like before COVID. So welcome to all of you. I thought I would say a few words about what we do. I will look a bit in the rear mirror, but mostly, I will look ahead. This is Telenor the way it looks today. As you know, we are present in 4 Nordic countries. Finland was the last country where we acquired something about -- we have about 10 million customers in the Nordics, a clear #1 in Norway, #2 in Sweden and Finland, and #2 also in Denmark. And we have our Asian activities. As Gunn said, we are #1 in the markets of about 50% market share in Thailand and Malaysia. We have 50% in Bangladesh. And we are in the process of looking at whether we can find a bit more long-term solution also in as Pakistan. Pakistan is the only market in Asia where we need to do something. And the 215 million plus 10 million, that's 225 million customers in total. And with that, we are one of the really big global telecom operators. And it's a bit cool when I compare to the other big ones. We talk about those who come from the U.S.A., those from China, from India, the really big markets with big home markets, domestic markets. Telenor is the only one among the top 15 global telecoms that comes from a small domestic market and has had no other advantage with regard to expansion and its knowledge. But this is an industry that undergoes a lot of change. This is an industry that had a very good growth by connecting ever more people through phone -- mobile phones for the first time. Now that everybody has a mobile phone, we see that next step for us, the next growth journey will be to participate in digitalization in society that we observe. And then there's international competition, we compete not only against Telenor, we compete with Google, Facebook, Tick-tock, all of the global players. Things also happen very much faster now. And in addition to this, we cannot do everything on our own anymore. We need partners. Gunn said,that this -- there has been a journey time as a Chair of the Board. And she joined this about the same time as myself. And the 3 steps that we have done is to make Telenor participate in the future, its simplification is to get out of VimpelCom that is Eastern Europe. We also got out of India, which was a market that became too demanding. We simplified the structures. The next step was to start modernizing Telenor and using digital tools that is new technology that could make us run the companies more efficiently. And then we also sold our participations in the 4 countries in Central Europe and used that money for buying shares in Finland to have a more solid Nordic position. We also reorganized ourselves. We had a cooperation with Schibsted. We were together with Schibsted and with marketplace solutions in South America and other places. Also in Asia, like Finland and in Norway, we left that and we concentrate on our current holdings in a company in Singapore and then the pandemics struck. And the 2 past years have been tough for Telenor. The first thing that happened was that we had military crew in February 2020 in Myanmar. Myanmar was one of the operations that really were elements of pride. If there was any place that our vision of making a difference in society really could be put into practice, it was in Myanmar. So we opened the country into something that could have become a democracy. In addition, it was good business. So when we had to give Myanmar away, practically speaking, that was a very sad situation also financially. And at that point in time, Myanmar was worth between NOK 20 billion and NOK 25 billion and it amounted to about NOK 20 to NOK 25 in the share price. So financially, it was also demanding. And then we were not even finished with Myanmar before we were hit by Pakistan. And the situation in Pakistan became ever more demanding. There was a political crisis and economic and financial crisis and currency crisis. And that, of course, affected us as well. But what perhaps hit us even harder than those 2 things, was COVID and how the pandemic struck in Asia, here in the Nordics, in Europe, had a demanding situation. But business-wise, things were going pretty okay. In Asia, markets closed down completely. And here, we have this cash prepaid cards customers. They have to fill up their cards every week and when these points closed down, no tourists came, no workers came to different countries, then we really had a downward trend in Asia. And we're still not back to the levels where we were, tourists, et cetera. And the sum of this was very negative. And as Gunn said, this also influenced our share price negatively last year. And on the basis of this, we had a Capital Market Day. Talking about when -- now that we have exited the pandemic, I have simplified to know what do we do. So we have the 4 areas mentioned by Gunn. And behind this, what has -- what we've had for 20 years in Telenor is an integrated business model. We have had everything internally within Telenor. We have done distribution. We have rolled out networks. We have had customer contacts on board. This has been done inside the company. What we've tried to do now is to split the integrated model somewhat so that we can secure more focus on infrastructure activities to which I shall revert, more focused and being closing closer to the markets where we are. And a separate structure in Asia, a separate one in the Nordic and also more focused on what we would call a per-tenant services. This was well received when we presented this at the Capital Markets Day. And important to us was also to state that the way we will do this is both to be able to create future growth. We want to continue to modernize, digitalize and reduce our costs so that we will have sufficient cash flow to continue our dividend policy. Now a bit about each of these 4 areas. Here we have the 2 Asian mergers. And here, we have entered into partnerships with others. To the left, you see Malaysia, where we joined forces with a competitor. We have a bit more than 30% ownership share. And we call this a merger of equals. We have the same ownership of both partners. And then we have put together a new company, which is the best of the 2 companies together. This is a big company. 20 million customers in Asia. The share -- the corporate value is about NOK 150 million on the Malaysian Stock Exchange. And we have a book profit of NOK 53 billion. We worked through this -- worked on this through the pandemic. This was a lot about partnership. There were many rounds we had to do with many visits to our future parts in Malaysia to make this happen. And we also managed to create a bigger company. In Thailand, we have 55 million customers. The market value is NOK 89 billion. It's lower than the one in Malaysia because we have some debt, and we also have a book profit of EUR 20 billion. These are 2 major mergers that we need to make work in Thailand. We have 22,000 employees in the new company. If we're going to build a new corporate culture, we have to make this work in a robust way, where we use Telenor's governance and Telenor's compliance systems. Now we now show that we are obtaining growth in the Nordics. This is a slide that I showed at the quarterly presentation last week. Here you see the growth of revenues in the 4 Nordic countries. Here you see 3 -- you have had a growth of about 5%, 3 quarters in a row. Of that 5%, most still are data packages, data connectivity. But 40% of that growth is also services that are at -- on the top of those data services, data packaging, like insurance services or security services. We now offer a service across all our Nordic markets to give you an example, that can protect your ID. If somebody tries to get a bank ID or your identity, all the things you use ID for, we help to protect and we tell you if someone is trying to attack, we help you get the ID back insurance companies, you can ensure your mobile phone, the screen of your mobile phone, et cetera, and those services represent 40% of the growth that you see here. And we are very proud of this because this actually -- almost no other mobile operators do this. They focus on selling data connectivity. We do that as well. But we are capable of adding growth to that. So we work on the noises to continue growth. And we also continue modernization, and I believe all of you have experienced this firsthand when you have put copper infrastructure behind us. Copper infrastructure is something that has served us well for more than 100 years. That's where we have the home phones and also Internet to a lot of our customers. We decided 4 years ago to put that completely behind us and instead focus on future digital foundation. And we have done this now for 4 years. We have visited literally-speaking, all of the municipalities in Norway several times and we've tried to handle all of the customer cases to the best of our ability. So we have helped our customers transition into new solutions, be that fiber or mobile broadband. We are the first ones to do this in Europe, and this makes us capable of being very robust with regard to a further digitalization. And then you have infrastructure. We have a separate company for that now. Infrastructure is about 3 fields. We have the physical towers, what you see all around Norway. We have about 20,000 of those towers in the Nordics; 8,500 of those are in Norway. And these are towers that we use ourselves, but we also let others rent capacity there or lease capacity until Telenor ASA build out their infrastructure in Norway, we let them be leaseholders in our towers, and we managed to get good growth on those towers by having more external customers. The second is fiber, fiber in Norway. As Gunn said, we sold 30% of that. We got about NOK 10 million -- NOK 10 billion for that. We used 1/3 to pay this back to you as shareholders through our share buyback program and about NOK 7 billion we use with our partners in investing in more fiber. And the third is data centers. We have 18 data centers, Telenor owned across the Nordics, and we are looking at the possibilities of possibly entering into partnerships to exploit that possibility [indiscernible] options better. And then you have Telenor Amp, perhaps a bit strange this name, but it's what we call a per-tenant activities. We have 16 companies under this umbrella and we estimate them to have a market value of about NOK 12 billion and NOK 15 billion. What you see with the Telenor propeller there is 100% wholly owned companies that did very well in the first quarter. Telenor Links is a company that operates -- they buy and sell international traffic. So when you call someone in a different country if you are a broad roaming, that service is serviced by Link. They also do SMS services that they sell to us. So if you're going to verify who you are, you can verify that through an SMS if you buy some services from the global content providers. That's another example. And they now have 25 million customers. So they sell these services also to other companies and Telenor. And then we have Telenor Connection. It's a Swedish company that does IoT, the Internet of Things that is connecting physical labs, it's not people. You have about 20 million customers. And it's the same cost we have, for instance, in all of the Volvo trucks globally. They have Telenor SIM cards now. And now we're moving also into the real estate sector being able to manage buildings digitally and not a number of other fields. And the third part here is Telenor Maritime. That's a company based in Arendal in Norway. They have 3 offshore connectivity solutions, we are dominant on the cruise ship market in Northern Europe, and we also are moving into the fishing fleet and we serve connectivity to vessels out at sea. So within these fields -- well, we also have Telenor Satellite. We also own some satellites that give us a quite good cash flow. So all of these companies, well, some of them will be further developed and especially we want to have a Nordic leading position within IoT that is connecting physical objects and as regards to security. And part of this will be done in partnership and part of this will be sold if we feel that others would be better owners than ourselves. And as Gunn said, after we came out of this strategy at the Capital Markets Day, we've had a pretty positive share price development. It took some time. If you look at left here, that's when we had the Capital Markets Day. And it took some time before we started receiving trust that we could actually deliver on what we presented. That is why after we demonstrated that we had growth in the Nordic and that we managed to carry out the 2 big mergers in the Asian region, and then after that, there has been a positive development. And now finally, one of the really big opportunities we have and also we have a great societal responsibilities within security. Those of you who looked at the 8:00 news last night, there was a fantastic like publicity for Telenor because the security authorities warned Norwegian companies and consumers with regard to all of the security threats that attack both private and public sectors in Norway in a systematic way. And then the interview with Telenor, what has Telenor done? So it sounded like almost only Telenor deals with these things in Norway. And that's almost true because we're pretty big in this sector. And when we look ahead, we have lot more things on the Internet. People are connected, things are connected. And then there's a chance to protect both data and the IT infrastructure. This is a growing challenge and this is also linked to digitalization. And if you can't have secure solutions, you can't have digitalization. And you also have climate and environment. If all ends the world are going to wish for chemicals, we need to implement digital solutions and Telenor is in the midst of the possibilities of being able to deliver on this. So the triangle this year is something we focus on both within our sustainability agenda and being in our corporate social responsibility but also with regard to growth opportunities. And here you see a bit of what we actually do. At the bottom of the triangle, we -- you saw a lot of resources on protecting our own operation. We have a separate center here, both at Fornebu and at Arendal in Norway. They do this on behalf of all of the companies of Telenor and here is where we supervise the -- what we do in 8 different countries. And we have this in-house competence and we can then sell these competence to others. And we do this at 3 different levels. At the private customer level, we sell the kind of services, as I mentioned before, ID solution, we protect you if you use public wireless networks. We have about 300,000 customers in Norway who have bought that solution, and we have rolled this out also in the other Nordic countries. And then we have a separate platform solution for small and medium-size businesses to protect them against anybody being able to entering their IT systems through the Internet. And we also do this in a more advanced way with the big companies and also the public sector. We have more than 100 customers where we help them to build robust IT systems. And we also monitor them 24 hours around the clock. This is a position that we have adopted and it's within this field we want to become a leading player in the Nordics. Some of this we will do organically that has built this gradually. And perhaps you also have to look at whether we have to join forces with others in some respects. And well, one more thing. Gunn also mentioned our sustainability agenda, ESG, which is the English abbreviation, the E is about emissions reductions. Already in 2019, we stated that we want to be climate neutral in the Nordic in 2030. We are well on our way to reaching that goal. We also said that we are going to reduce our emissions in Asia by 50% within 2030, we're perhaps the first one in Asia to say so because this is demanding in our Asian operations. And it's because we depend on the electricity, the grid that we get to the electricity. And when this is produced with coal or other polluting sources of energy, it's difficult to reach that goal. So here, we have to work systematically. We look at how can we together with the authorities provide the positions of renewables players and get them into that market. We have it, we want to become net zero also in Asia within a certain number of years and we now work at finding out when that can be. If you look on the right here, we have also said that in addition to clearing our own house, we also want to work with our subcontractors. We have tens of thousands -- 10,000 subcontractors at Telenor. And we look at how can we make them commit to an emissions agenda, where they reduce their carbon footprint. The goal is within '25, 68% within 2025, 68%. That is totality of the money used in the contracts that we have with our suppliers. So we are on our way to reaching this goal. This is an extensive effort. If you want to be a supplier of Telenor, you have to commit to such an agenda. As is about the social responsibility part, we train our customers and others in digital competence. That is quite simply what has to do with security, safety and also things like us having filters in our networks against pornography. For instance, we have GE Governance, the governance tool. We have worked a lot on how to make sure that we can operate on Telenor's standards. Even if you're in partnerships, we don't have control, and that was a very important discussion on the Board before entering into the partnerships in Malaysia and Thailand. And then I thought I would close by giving you an example on how we take out these values and practices. This is an ad, a commercial from Norway. It's about cyber bullying. This is a campaign that we have run for many years and we also run this now in the other Telenor companies. We enter into a classroom situation. We sit down with the fifth and sixth graders, and we explained to them what is the danger of, for instance, sharing photos and videos on that, what are the dangers while with cyber bullying and what is reverse side of the coin of people becoming dependent on their mobile phone side. I just thought I would show you this short commercial. [Presentation]

Many young people are bullied and feel pressured through Internet. The Red Cross internal has developed use your head/use your common sense. Read more about how you can take this year's most important conversation at useyourhead.no. That's it. Thank you.

Thank you very much for your review, Sigve. As I said, we can now open for any questions, comments, both to the Chair of the Board's report and the group CEO report here the auditorium, just give it little bit of time. If you wish to prepare anything.

First on [indiscernible]. Thank you for a very interesting review. I'd like to, firstly, boast about your customer service. So I have used broadband and mobile phones. It usually works, but occasionally, I do need a customer consultant. So that works very well. I hope you won't cut back on that. It's difficult at other places to get hold of people to speak to. I'd also like to come back to the Asian operations you both spoke about, which had to do with political risk. And one, I understand that there are major cultural differences between Nordic culture and what happens in Asia. I wonder perhaps if you could say a little bit more about the political risk. You mentioned Pakistan, Bangladesh, major values and assets there and huge revenues, what type of risk are you thinking of? That's one question. And secondly, I'd say, there are huge gross revenues. What about the net revenues? Perhaps there are people who cannot pay their bills, perhaps the net is marginal. If you could comment on that in the different countries in Asia? And my final question comment is the geopolitical aspect. To what extent, you mentioned how will that affect operations, both here in the Nordic countries and otherwise in Telenor's operations? Sigve, I don't know which one of you would like to respond. Well, there are many questions. Thank you for the good questions. Customer service, well, that's nice to say that. Having said that, our target really is that you should not ring customer service that things do actually work. And we work very systematically trying to achieve this. And we are trying to eradicate the [indiscernible] operations. We are now focusing on our main project, which is to focus that you as a customer meet Telenor in one go, whether you're a fiber cable customer, whether you're a mobile customer, you would meet Telenor as one company. We have several IT issues, many different systems that don't speak to and communicate with one. This is an agenda we do have to streamline the way in which we're perceived by our customers. We see many customers do wish to speak to people. So our customer traffic, they wish to speak with us digitally, but we will maintain no physical contact that you have people who can speak to. As regards to political risk, well, that is a political risk. It exists in all of our Asian markets. That's something we've been working on since we came to Asia -- came into Asia and launched in Asia 20 years ago. One thing we do then is that we have been very focused on doing things in our way. I would say, in the Asian markets, we have respect where Telenor is involved. We have values that we are not permitting corruption. We appreciate our coworkers. We have trade union organizations in Malaysia and in Bangladesh. We use our values that we take with us from Norway and we import them into the market, which means both our customers, authorities and also the authorities appreciate that we are not only people who act in a responsible way, but we increase this selling responsibility. Secondly, we work with our stakeholders. We speak to the authorities. We speak to other important partners in these societies. And when we are now involved in a partnership in Malaysia and Thailand, that also reduces risk because we have partners who are local, who can assist us and help us stand more robust against any intervention from the authorities. As regards Pakistan and Bangladesh, there is political risk. What we've seen over the last 20 years is that to largest extent that the risk, it's easy to attack telecoms in a way, it's easy to implement or levy new taxes and to take us on that. We are trying to achieve better predictability, and this is something, of course, that we are very concerned with, as we've discussed all the time with the Board of Directors. We have a risk map showing things we need to -- indicating things we need to work on and -- but the regulatory risk is everywhere, including in the Nordic countries. There are no operators in Europe that are so thoroughly regulated as Telenor. I think there are 1 or 2 places where they have more of this than in Norway, we have access, also the provider can by as a wholesaler from us. We have regulations there. We have regulations on fiber. It's a completely regulated system, which, of course, is something when we work with the regulators on this. The security regulation also appear and emerge in several of our markets as well, both after COVID, but also the war in Ukraine. So this is not only political risk, but we have regulatory challenges as well in all our markets. And then you asked about the market. So Bangladesh is a market where we have an EBITDA margin of 50%, well over more or over 50%. So that's one of our most profitable markets. That's because we have 18 million customers in Bangladesh and what each customer pays in Bangladesh is much more less than it is in Norway, but we do have good margins, good earnings. We also have that in the other markets. If we are -- where we are in demanding situation is in Pakistan. That's because inflation is above 30% now. The currency -- of course, we purchased our equipments in Pakistan. In U.S. does, that's a demanding issue. And there's a great increase in energy prices on top of this as well. So in Pakistan, we are struggling. That's the only market, I would say, we do not have good profitability. Are you happy with the responses? Any other questions, comments? I can't see we have any on the digital front either. So then I'd like to thank both Sigve and Gunn for their reports, presentations. I think now we can move on to the next Item on the agenda, which is the approval of the annual accounts, annual report of Telenor ASA and the group for the financial year 2022, including the Board of Directors' proposal for allocation of dividend. All of these are available on the website of Telenor in accordance with Section 8 of the Articles of Association for Telenor ASA. Following information and presentation will be given under this item. CFO, Tone Hegland Bachke will give you further details about selected aspects of the annual accounts. And then the Chair of the Board, Gunn Waersted will give you information about the proposal for the allocation of the annual profit. The auditor [indiscernible] will be present -- is present and will respond to any questions. And all the questions will be responded to after all the presentation has been given. Now I give the floor to Tone Hegland Bachke and I'd just like to notify that we did discover an error in Note 38 of the annual report where it's been stated approximately SEK 8 million has been added, too much in excess in fees for tax-related services from an external auditor in the group. This error is not of such a nature or such an amount that would be necessary with any correction in the annual account. So I'd now like to give the floor to CFO, Tone Hegland Bachke. Please go ahead.

Thank you, Brekke. Where Sigve concluded in relation to how we've been organized, we have a structure that we have established which means that we do have 4 business areas, and each of these business areas now have defined value creation strategies and financial ambitions in the period up until 2025 as we presented on the Capital Markets Day. And in our opinion, this organization gives us an even better starting point for value creation for shareholders in the period ahead. It may also be okay for our shareholders to know that from the first quarter of 2023, we've also changed our financial reporting and our reporting structure to base this on these 4 business areas. And we began with this last week, and we will when we had our first quarterly presentation. Sigve spoke about sustainability as a very important area for us. Our ambitions are, of course, not only in the -- within the financial area, but they also include what we believe are high and major ambitions as regards sustainability has to do with climate, social matters and also governance. Environmental, social and governance. In addition to these, reporting is an important tool. By means of reporting, we can measure how much we achieve in terms of our ambitions and also we can make this more visible the work that we are doing. Voluntarily, we are reporting in relation to a number of standards, these that we listed here. But now you should know that we are working enthusiastically to develop reporting tools and the way in which we report so that we can also be prepared for new demands, it may come from Norwegian authorities, from the European Union and also from our shareholders. I'd now like to speak about the annual financial results for Telenor ASA for the group, but also for the shareholders of Telenor. The result after tax of shareholders in 2022 was NOK 44.9 billion, which is a considerable increase from NOK 43.4 billion in 2021. The greatest effect in relation to the accounts we presented in 2021 was that we have an increase in EBITDA of NOK 2.2 billion. We also see that we had considerably higher financial costs to the tune of NOK 6.2 billion, relating primarily to aspects. There is the weaker Norwegian kroner, means we have a loss on currency when we have debts in other currencies than Norwegian kroner. We had approximately NOK 3.4 billion, primarily in U.S. dollars. In addition, we had interest costs of NOK 2.6 billion. On the line concerning discontinued operations, we have booked the accounting deconsolidation of Digi. This figure includes a gain of NOK 34.8 billion, which we reported in the fourth quarter of last year. In the future, the results in the new company, Celcom Digi will be included in the accounts on the line for associated companies. The total result for 2022 ended NOK 47.6 billion, of which NOK 44.9 billion was for the shareholders in Telenor ASA. I then looked at the consolidated accounts. I'd like to take you now through Telenor ASA, the parent companies. Results for 2022, as you are aware, Telenor ASA is a holding company that includes group management, number of group functions, also includes research and development and internal bank in Telenor. Telenor ASA's operating revenues consists essentially of sales of group -- services to other group companies, sale of research and development services and other consultancy services. Telenor ASA also provide a large amount of the external financing -- funding of the group and provide loans and receive investments from deposits from group companies. Net financial items for 2022 show a result of NOK 4.3 billion, which is a reduction from NOK 26.1 billion in 2021. This is due the high gains in 2021 are due to reorganizational effects, which gave a gain of NOK 13 billion and lower dividends and group contributions to Telenor ASA of NOK 7.2 billion in 2022 in relation to 2021. Finally, I would like to look quickly at the financial position of Telenor SA in 2022. This shows a book value of assets totaling NOK 199 billion. We had a dividend of NOK 13 billion, which together with the result of NOK 5.8 billion, meant that the equity was reduced by approximately NOK 7.2 billion last year. The proposed dividend for the accounting year 2022 is NOK 9.4 per share, which total is around NOK 13.2 billion. And I'd like to thank you and pass the word back.

Thank you, Tone. I will now give the floor to the Chair of the Board, Gunn Waersted, who will present the Board's proposal for allocation of the profits for the year.

Thank you. The net income for Telenor ASA in 2022 was NOK 5.776 billion after tax and received a group contribution of dividends of NOK 7.011 billion. And the Board then proposes the following allocation. Maybe you should change the slide here. The Board proposes the following allocation of the net income, NOK 5.776 billion should be transferred to retained earnings. And after allocation, the equity of Telenor ASA after reduction of share capital will be NOK 96.459 billion. And as Tone already mentioned, the Board of Directors proposed a total dividend payment of NOK 9.40 per share, totaling approximately NOK 13.2 billion. The dividend is as previously is suggested split into 2 tranches, 1 of NOK 5 per share and 1 of NOK 4.40 per share. The first 1 in May and two, the last part in October 2023. Thank you. Let me see. As I mentioned early on, the auditor represented by the audit from EY and the responsible auditor [indiscernible] we have audited the annual accounts of Telenor ASA and they have presented a clean auditor's report without any reservations or comments. And then the corporate assembly at the meeting on the 22nd of March 2023 discussed the Board's proposal for financial statements and the allocation of the net income and the statement of the corporate assembly is included in the Norwegian version of the annual report on Page 174, and it sounds as follows: the corporate assembly recommends that the general meeting approves the Board's proposal for annual accounts for 2022 for the group and for Telenor ASA as presented to the corporate assembly by transferring NOK 5.776 million, to retained earnings and to pay a dividend of NOK 9.4 per share to be paid in 2 tranches of NOK 5 per share and NOK 4.40 per share, respectively in May and October 2023. Now I open up the floor to any questions or comments to the latest presentations. Please go ahead.

There's a question for the CFO with regard to currencies. If I understand you correctly, we have most of our debts in dollars and euros. If the income is in local currencies, this means that we are fully hit by interest rate increases with regard to payment of interest and you also have a currency exchange effect because Norwegian krone has been weakened. So you'll get sad like a double whammy. How does this affect the total?

Well, the interest rate -- well, let's start with the composition of our debt. We have a debt with regard to currency distribution, we would try to balance the values of the assets. We have financed with that debt against the different currencies. So this means that we have debts in euros, in Swedish kroner, and we have also had some debt instruments, I would say with regard to the Thailand's baht. And we have also an item in dollars, as you said. According to the accounting principles, you can balance the values of your assets against the financing of those assets, but this is based on book values. As regards to euro, I would say there's a good balance that 1:1 proportion, a 1:1 ratio. So when you look at the profit and loss statement, so far, the effects of the weakening in krone relation to euro, those effects have been pretty limited. And then over time, we've had a quite large portion of our debts in U.S. dollars. That has been the currency where it has been logical to finance Asian assets because often there's a good correlation or they have been well correlated to the U.S. dollars. And as Sigve stated, some of these currencies weaken over time. And then we have also taken down the exposure substantially in recent years. This is something we do. We have lower dollar debt substantially lower today than what we have had and we'll strive to have a good balance. But some of these consequences will also work their way through into the profit and loss account. While for others, it will affect the items on the balance sheet. So we have an active attitude towards this and we also discuss this in the risk and audit committee. And as regards to interest rates, you don't escape those interest rates, no matter what currency you take out your financing in, what we have done is that we have hedged a lot of our [ equity debt ] when the interest rates were low. So about 60% of our debts has an average interest cost of 1.5%, while the remaining debt has a floating interest rate -- a variable interest rate, and then we have a good balance between fixed and variable interest rates and also this relate to our financial cost, and this influences our financial cost. Are you happy with that reply? Any other questions or comments? I cannot see there being any comments or questions received here on the screen. Now then I believe we can go on to the formal adoption of the approval of the financial statements, annual report and the proposal for distribution of dividend. We propose the following resolution. Let's see if we can get up on screen, I shall read. The General Meeting approved the annual accounts and the annual report for Telenor ASA and the group for the financial year 2022, including the application of the net earnings for the year and the distribution of a total of NOK 9.40 of dividend per share divided into 2 tranches of NOK 5 and NOK 4.40 with ex-dividend dates on 11 May 2023 and 19 October 2023, respectively. And I cannot see that we have received any questions or comments so that we will very soon close the voting on this item. All of those, who have not voted should vote now. And we'll just wait a few seconds so that you will have the opportunity to vote if you have not done so already. [Voting]

Well, then we see that no comments to this item on the agenda. The agenda item has been discussed. We close the voting, and this motion, this item has been adopted. Let's go on to the next item, which is #7 of the agenda. Its approval of remuneration to the company's external auditor for the audit services. And I will give the floor to CFO, Tone Hegland Bachke, who will give a brief information about the auditor's remuneration.

The auditor's remuneration from Telenor is distributed with regard to the statutory audit and other remuneration. As for previous years, an overview of the auditor's remuneration is included in the annual report this time in Note 38 to the consolidated accounts. The auditor's remuneration for auditing of Telenor ASA 2022 was of NOK 6,838,144. The fee for audit encompasses is normal, the fee for the statutory audit and a limited review of the quarterly report. For attestation services, the fee was of NOK 0.7 million and this fee is primarily related to attestations that are mandatory under the law. For tax-related services, the auditor's fee was NOK 0.6 million. In this case, mainly related to tax-related assistance and presentations of tax rules and consequences for other services. The auditor's remuneration amounted to NOK 0.1 million and other services related mainly to review of processes, projects and suppliers as well as financial due diligence in connection with acquisitions, sales and other transactions.

Thank you, Tone, for that presentation. Are there any questions or comments to the auditor's remuneration? I don't see there being any questions or comments. Let me just remind you that this concerns the audit of the parent company, Telenor ASA and not any audits of the underlying subsidiary companies. We propose the following resolution then I shall read the General Meeting approved the auditor's remuneration for work with the audit of Telenor ASA in the amount of NOK 6,838,144. As we have not received any comments, we can quickly start the voting. [Voting]

Well, the proposal for remuneration to the company's external auditor has been adopted. Let's go on to Item 8 of the agenda. I shall give the floor again to Gunn Waersted, who shall present the Board's presentation of corporate governance.