Telia Company AB (publ)

Q2 service revenue growth accelerated to 2.8%, versus the company’s full-year ambition of around 2%. EBITDA grew 3.4% year over year, with EBITDA margin expanding to 40.5%. Free cash flow was SEK 2.2 billion in the quarter and SEK 4.1 billion year to date. OpEx declined by around 1%, and OpEx as a percentage of service revenue improved to 29.1% from 30.2% a year ago. CapEx on a rolling 12-month basis was around SEK 12.5 billion, below the full-year outlook of less than SEK 13 billion. Leverage ended at 206x, or just over 2 times. Looking ahead, management expects Q3 EBITDA growth to be below 2% and Q4 to re-accelerate, with full-year EBITDA growth around 3%. Full-year free cash flow guidance remains around SEK 9 billion, now including a circa SEK 400 million Norway tax payment.

Patrik Hofbauer emphasized continued commercial momentum, better customer satisfaction, and strong performance in core operations. He leaned heavily on the strategy of simplification, convergence, and portfolio shaping: closing Halebop, adding bolt-on acquisitions, progressing the Ice RAN-sharing deal, increasing the Valokuitunen stake, and transferring part of Finland ICT to a partner. His tone was confident and upbeat, especially on Sweden’s household-led growth model, Norway’s improvement, and Finland’s stabilization.

Eric Hageman focused on the financial quality of the quarter: 2.8% service revenue growth, 3.4% EBITDA growth, 40.5% EBITDA margin, and SEK 2.2 billion of free cash flow. He said OpEx fell about 1%, CapEx stayed disciplined at SEK 12.5 billion on a rolling 12-month basis, and ROCE improved to 10.6% from 9.3% a year ago. He also explained that free cash flow was ahead of plan mainly because of phasing, stronger profitability, lower interest paid, and working-capital timing, while reiterating the full-year FCF target of around SEK 9 billion including the SEK 400 million Norway tax payment.

Analysts pressed on whether Nordic competition and structural growth had worsened; management said they do not see a material change in the competitive landscape, with Finland stabilizing, Sweden steady, and Norway improving. Several questions focused on Sweden mobile ARPU and the Halebop closure; management said mobile trends have not structurally changed, customer-household convergence is the key focus, and Halebop migration went well with no increased churn. Other questions covered Q3 phasing versus Q4 rebound, Norway JV timing, Finland fixed-term contracts, and free cash flow upside; management said the Q3 slowdown is driven by product mix and phasing, the Norway JV is complex but financially attractive, Finnish fixed-term contracts were built gradually over years, and the FCF beat was helped by better working capital and mission-critical payments.