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

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.