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Telia Company AB TELIA

Rating as of

Morningstar’s Analysis

Valuation
Currency in SEK
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Telia Grows Top Line but Not Bottom Line; We Would Like More Focus on Cost Controls; Maintaining FVE

Javier Correonero Equity Analyst

Analyst Note

| Javier Correonero |

There is nothing surprising in Telia’s third-quarter results, which saw revenue grow 3.80% organically aided by double-digit growth in equipment sales across Scandinavia, although service revenue also managed to grow 2.30% organically. Growth in revenue did not flow into the bottom line due to higher pension costs in Sweden and Finland and higher content costs in the TV and media division, with the EBITDA margin down by 140 basis points year over year. We maintain our fair value estimate of SEK 40 per share.

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Company Profile

Business Description

Telia is the incumbent telecom operator in Sweden and one of the dominant players in Finland and Norway. Its home market, Sweden, represents more than 40% of its revenue. Besides extensive operations in these countries, the firm also has assets in Denmark and in the Baltic region. The firm divested its outstanding operations in Eurasia in 2018 following alleged corruption linked to local partners and disappointing performance that was exacerbated by tough economic and market conditions. The firm’s strategy has been to focus on connectivity (high-quality, cost-efficient network) and convergence (bundling of fixed and mobile offerings).

Contact
Stjarntorget 1, Solna
Stockholm, 169 94, Sweden
T +46 850455000
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 4,405