Telia Lietuva

Earnings Release • Oct 21, 2022

Interim results

9 months of 2022

Telia Lietuva, AB

Telia Lietuva provides telecommunication, IT & TV services in Lithuania from a single point

Telia Lietuva means

Wide range of services

The most developed networks

Modern data centres

Everything from a single point

Telia Lietuva means

Customer care 24/7/365

Quality of operations' management confirmed by ISO certificates

Team of 2,100 professionals

Sustainable and responsible business

We are part of international group

Our purpose

We reinvent better connected living

Our values

• innovate
• lead

• speak-up

• our customers

• each other
• our world

We dare to: We care for: We simplify:

• execution
• teamwork
• our operations

Telia Lietuva has an associate

— Telia Lietuva provides integrated mobile and fixed communication and IT services

— Numerio Perkėlimas administers the central database to ensure telephone number portability in Lithuania (Tele2 and Bitė Lietuva owns 25% each)

Highlights of Q3 2022The Company's 5G network

#1 and 80% of population Telia Lietuva was the first to launch commercial provision of 5G communication services in Lithuania	reaches more than half of the countries' territory #2 5G was immediately operational with 1,100 of the Company's base stations in the 700 MHz and 110 base stations in the 3.5 GHz band	#3 The Company's 5G network reaches more than half of the countries' territory and 80% of population	#4 Telia Lietuva won both 5G auctions by offering in total EUR 30 million payable over 20 years
#5 Continuous double digit growth in revenue from billed mobile, IT and broadband Internet services	#6 Offer of roaming in EU countries service for prepaid mobile subscriptions' users led to 15 thousand intake of new customers	#7 Surge in electricity price had a negative impact on profitability development	#8 The Company's market capitalisation remains above EUR 1 billion

Number of customers

Telecommunications market of Lithuania

Internet drives telco market growth (mEur)

Breakdown of the telecommunications market revenue by operators for Q2 2022 (%)

Telia Lietuva market shares in terms of revenue for Q2 2022 (%)

Market: growing usage of mobile data

+19.6% (y-o-y)

Increasing usage of mobile data

(uploaded / downloaded 267,065 TB of data per quarter)

+2.2% (y-o-y)

Growing number of FTTH/B connections

(accounts for 78.6% of all fixed Internet connections)

+3.3% (y-o-y)

Growing number of IPTV users

(accounts for 50.4% of all pay-TV service users)

Source: Report of the Communications Regulatory Authority ¹⁵

Market penetration

Operating and financial results

Number of mobile and fixed voice service users

Mobile communication users (thousand)

Number of fixed telephone lines (thousand)

Number of IPTV and broadband Internet users

Revenue, EBITDA & Net profit (mEur)

Dynamics of main financial indicators (mEur)

NOTE. Non-recurring items for 9 months of 2022 were comprised from one-off redundancy pay-outs of EUR 428 thousand (EUR 763 thousand a year ago), non-recurring other expenses of EUR 219 thousand (EUR 154 thousand) and gain of EUR 305 thousand (EUR 1.3 million) from sale of property.

Revenue breakdown for 9 months of 2022

Revenue by services (mEur)

Operating expenses (mEur)

NOTE. Non-recurring expenses for 9 months of 2022 were comprised from one-off redundancy pay-outs of EUR 428 thousand (EUR 763 thousand for the 9 months of 2021) and non-recurring other expenses of EUR 219 thousand (EUR 154 thousand).

Number of employees

Assets (mEur)

• Non-current assets amounted to 80.3% of total assets as of 30 September 2022 (73.9% a year ago)
• Cash alone amounted to 4.7% (10.9%)
• Return on capital employed: 13.1% (14.6%)
• Return on average assets: 9.6% (10.7%)
• Current ratio: 64.5% (108.8%)

Equity and liabilities (mEur)

• As of 30 September 2022, shareholders' equity amounted to 49.7% of the total assets (50.8% a year ago)
• Total borrowings (30-09-2022) amounted to EUR 145.3 million: EUR 30 million – bank loan and EUR 115.3 million – vendor financing.
• On 26 May 2022, the Company paid-out EUR 58.3 million of dividends (EUR 0.10 per share) for the year 2021
• Debt to equity: 46.4% (50.1%)
• Return on equity: 17.8% (18.1%)
• Net debt to EBITDA: 0.81 (0.64)

Cash flow & Net debt (mEur)

CAPEX & CAPEX breakdown for 9 month of 2022 (mEur)

Dividends

— The Company's dividend policy provides that the Company must maintain the net debt to EBITDA ratio not higher than 1.5 and to pay out up to 80% of free cash flow as dividend

• Earnings and dividends are allocated to 582,613,138 shares
• On 28 April 2022 , the Annual General Meeting of shareholders approved pay-out of EUR 58.3 million (EUR 0.10 per share) of dividends for the year 2021
• Dividends for the year 2021 were paid-out on 26 May 2022

NOTE. Financial data for the years 2017-2020 is consolidated, for the year 2021 – standalone

Shares and shareholders

Shareholders

• Telia Company AB (Sweden) is the largest shareholder of Telia Lietuva, AB
• The Company's share capital consist of 582,613,138 ordinary registered shares of EUR 0.29 nominal value each
• On 24 October 2014, authorized capital was reduced by EUR 56.2 million and accordingly number of voting shares was reduced from 776,817,518 to 582,613,138
• The total number of Telia Lietuva shareholders is 14.3 thousand

Shareholders

as of 30-09-2022

Telia Company AB	Other
88.15%	11.85%

Part of shares and votes

• Since June 2000, the Company's shares are listed on Nasdaq Vilnius stock exchange (ticker: TEL1L)
• Since January 2011, the Company's shares were included into the trading lists of a few German stock exchanges (ticker: ZWS)
• Turnover on Nasdaq Vilnius stock exchange during January-September 2022: 5 million of shares or EUR 9.9 million
• Share price on Nasdaq Vilnius:

01-01-2022	High	Low	30-09-2022
2.05 €	2.10 €	1.79 €	1.925 €

Trading in the Company's shares on Nasdaq Vilnius stock exchange in 2022

The company's share price and Nasdaq Vilnius indexes comparison

	Opening value	Closing value	Change %
OMX Baltic Benchmark GI	1,568.82	1,285.79	-18.04
OMX Vilnius GI	966.13	894.83	-7.38
TEL1L – Telia Lietuva	2.04	1.925	-5.64

P/E ratio: 19.7 (20.4 a year ago)

Source: Nasdaq Vilnius

Corporate governance

Governing bodies

• The Annual General Meeting of Shareholders was held on 28 April 2022
• The Board consist of 6 members elected for the 2-year term
• The current term of the Board will end on 27 April 2023
• 3 members of the Board comprise Audit and Remuneration Committees
• Douglas Lubbe, Chair of the Board, has resigned from the Board as of 14 October 2022
• The Board elected Claes Nycander as new Chair of the Board and elected Hannu-Matti Mäkinen as Chair of the Remuneration Committee
• UAB Deloitte Lietuva is the Company's audit enterprise for 2021 & 2022
• The Board elects and recalls CEO

Board

Chair of the Board, Member of the Remuneration Committee, represented Telia Company AB till 14 October 2022

Chair of the Board from 18 October 2022, member of the Remuneration committee, represents Telia Company AB

Agneta Wallmark

Member of the Board, Chair of the Audit Committee, represents Telia Company AB

Hannu-Matti

Member of the Board,

Committee, represents Telia Company AB

Mäkinen

Chair of the Remuneration

Dovilė Grigienė

Independent member of the Board, Member of the Audit Committee

Mindaugas Glodas

Independent member of the Board, Member of the Audit and Remuneration Committees

Members of the Board do not own direct shares of Telia Lietuva

Governing structure of Telia Lietuva valid from 1 July 2022

Management team

Dan Strömberg, CEO

Elina Dapkevičienė, Head of Consumer

Daniel Karpovič, Head of Enterprise

Giedrė Kaminskaitė-Salters, Head of Sales & Customer Care

Andrius Šemeškevičius, Head of Technology

Diana Gold, Head of Digital & Analytics

Daina Večkytė, Head of Finance

Ramūnas Bagdonas, Head of People & Engagement

Daiva Kasperavičienė, Head of Legal & Corporate Affairs

Vaida Jurkonienė, Head of Marketing

Birutė Eimontaitė, Head of Communication

Vytautas Bučinskas, Head of Business Assurance & Transformation

Business sustainability

How we understand sustainability?

Responsible Business

Privacy and security, Freedom of Expression, Health and Safety, etc.

Ambitious environmental goals 2030

throughout the value chain

Zero waste

circular economy in Telia's operations

100% action

Team effort

Our achievements in numbers

Highlight of Q3 2022 - discussion festival "Būtent"

Engaging discussions and renowned

speakers in Telia tent, talking about artificial intelligence and ethics, Lithuania and internationalism, what will Lithuanian future cities look like, anti-corruption and transparency, eco-anxiety etc.

Additional activities organized by Telia Lietuva:

• Climate museum
• Cinema nights

Two-day event in September 2022 attracted more than 5,000 engaged participants.

Thank you

Telia Lietuva, AB