Telia Company AB (publ)

Reported Q2 service revenue growth accelerated to 2.8%, above the full-year ambition of around 2%. EBITDA growth was 3.4%, with EBITDA margin at 40.5%. Free cash flow was SEK 2.2 billion in the quarter and just above SEK 4 billion year to date; CapEx was around SEK 12.5 billion on a rolling 12-month basis and leverage was just over 2x (206x). Sweden service revenue grew 2.6% with EBITDA growth above 5%; Finland service revenue was flat with EBITDA growth also flat; Norway service revenue improved and EBITDA declined 2% due to content cost comparison; Lithuania EBITDA grew almost 9%. For the second half, management expects Q3 EBITDA growth to be below 2% and Q4 to re-accelerate, while still delivering full-year EBITDA growth of around 3% and free cash flow of around SEK 9 billion, including a circa SEK 400 million Norway tax payment.

Patrik Hofbauer said the quarter reflected good commercial momentum, stronger customer satisfaction, and improving net promoter score, with positive mobile net adds in the three biggest markets. He emphasized a strategy centered on simplification, convergence, and in-market consolidation, including the Halebop closure, smaller bolt-on deals in Sweden, and the Finland ICT transfer. His tone was confident and constructive, especially on Sweden’s household strategy, mission-critical services, and the company’s ability to keep improving customer economics through cross-sell and network quality.

Eric Hageman highlighted profitable growth with 3.4% EBITDA growth and margin expansion to 40.5%, alongside OpEx down around 1% and OpEx as a share of service revenue improving to 29.1% from 30.2% a year ago. He pointed to disciplined CapEx at SEK 12.5 billion on a rolling 12-month basis, ROCE rising to 10.6% from 9.3%, and free cash flow ahead of plan because of better profitability, lower interest paid, and phasing in cash CapEx and working capital. He also noted the full-year free cash flow ambition of around SEK 9 billion now includes the circa SEK 400 million Norway tax payment.

Analysts pressed on Nordic competition, Swedish mobile ARPU weakness, Halebop migration risk, Finland pricing, and the timing of the Norway JV and Latvia divestment. Management repeatedly said it does not see a major change in the competitive landscape, called the Halebop migration very successful with no increased churn, and said Sweden’s mobile trends are driven by a household-focused strategy rather than a structural shift. On Finland, they said fixed-term contracts have built gradually over years and are helping stabilize churn and improve pricing potential; on Norway, they said the JV is complex but progressing and should be financially attractive once completed.