Tele2 AB (publ)

Tele2 reported total revenue growth of 2% in Q2, driven by 2% service revenue growth. Group end-user service revenue grew 2%, and organic underlying EBITDA grew 4% year on year; the company also said reported underlying EBITDA after lease was affected by the Baltic tower transaction, with a negative impact of around EUR 35 million on a 12-month basis starting from March, or around SEK 95 million in the quarter. Equity free cash flow was SEK 1.5 billion in Q2 and SEK 6.2 billion over the last 12 months, equivalent to almost SEK 9 per share. Economic net debt ended at SEK 19.7 billion and leverage was 1.7x underlying EBITDA. For 2026, Tele2 kept guidance for low single-digit organic end-user service revenue growth, low-to-mid single-digit organic underlying EBITDA growth, and CapEx to sales of 10%-11%; management said they are optimistic about avoiding the low end of the EBITDA range and expect CapEx to sales in the lower part of the range. Full-year 2026 cash flow assumptions now include around SEK 180 million of spectrum payments, around SEK 600 million of net financial item payments excluding leasing, and around SEK 1.45 billion of tax payments.

Nicholas Högberg framed the quarter as evidence that Tele2 can grow while staying disciplined on costs. He emphasized that the company’s next phase is about simpler, faster execution, stronger customer loyalty, and sustainable profitable growth, not a strategic reset. He also repeatedly pointed to AI, automation, and the company’s brands and distribution as levers for more operational efficiency and stronger long-term growth.

Peter Landgren highlighted the mechanics behind the quarter: 2% revenue growth, 4% organic underlying EBITDA growth, and SEK 1.5 billion of equity free cash flow. He said the Baltic tower transaction creates a negative impact of around EUR 35 million on a 12-month basis from March, or around SEK 95 million in the quarter, and noted Q2 average interest rate was 2.7% with 74% of debt fixed and 26% floating. He also pointed to higher tax payments in Q2, including about SEK 135 million of withholding tax in Latvia and about SEK 60 million of supplementary tax in Lithuania, while saying economic net debt fell by SEK 4.6 billion to SEK 19.7 billion and leverage remained 1.7x.

Analysts focused on whether cost efficiency had been largely exhausted, why Tele2 did not raise guidance, and how competitive Sweden has become, especially in no-frills mobile and fixed broadband. Management said there is still more to do on costs, citing AI, automation, supplier challenge, and ongoing procurement work, while insisting the company can choose whether to participate in the most intense price competition. On fixed broadband, they described open-network pricing as unhealthy and said new EU regulation in 2027 could improve the market, but they were not ready to spell out the strategy ahead of that.