Telia Company restructures its vendor financing program

• Telia restructures its vendor financing program and reduces its volume by approximately 50% during H2 2024
• The purpose of the restructuring is to drive simplification, reduce cash flow volatility and increase balance sheet transparency, while retaining the program’s benefits to Telia and its suppliers

Telia Company’s vendor financing program is a valuable component of its working capital management, enabling extended payment terms for Telia while bringing benefits to Telia’s suppliers in the form of accelerated payments.

Accounts payable under vendor financing arrangements were SEK 11.5 billion per December 31, 2023, as disclosed in the Quarterly and Annual Reports for 2023, and, following the restructuring, are expected to be approximately 50% lower by December 31, 2024. The new portfolio structure aims to better serve Telia and its suppliers in the current macroeconomic environment and brings the size of the program closer to the wider industry levels. The restructuring is estimated to result in reduced cash flow volatility over time and to have limited effects on net profit. The effect on the reported net debt to adjusted EBITDA is expected to be an increase of around 0.2x, but leverage is estimated to remain in the 2.0-2.5x target range.

The restructuring is expected to result in negative cash flow effects of up to SEK 6 billion in H2 2024, relating to working capital. All Telia’s full-year financial outlook statements, which relate to service revenue growth, adjusted EBITDA growth, CAPEX excluding fees for licenses, spectrum and right of use assets, and the structural part of Operational free cash flow, remain unchanged.