Tele2 AB (publ)

Tele2 reported total revenue growth of 2% in Q2, driven by 2% service revenue growth. Group underlying EBITDA growth was 4% on an organic/pro forma basis; reported underlying EBITDA after lease was impacted by the Baltic tower transaction, which management said implies around EUR 35 million negative impact over 12 months starting in March, or about 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 was SEK 19.7 billion, down SEK 4.6 billion versus end-2025, and leverage was 1.7x. For 2026, management reiterated full-year guidance for low single-digit organic end-user service revenue growth, low-to-mid single-digit organic EBITDA growth, and CapEx to sales of 10%-11%; they said they are optimistic about avoiding the low end of the EBITDA range and expect CapEx/sales in the lower part of the range. Additional 2026 cash-flow items included roughly SEK 180 million of spectrum payments, about 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 proof that Tele2 can grow while keeping a strict cost focus. He said the company’s next phase is not a change in direction, but further improvement in customer loyalty, simpler and faster execution, and more flexibility, with AI and automation cited as important tools for efficiency gains. He also stressed that Tele2 will not join the most intense price competition, especially in no-frills mobile and open-network broadband, choosing instead to defend value-for-money, brands, and distribution.

Peter Landgren highlighted that service revenue grew 2% and underlying EBITDA grew 4% on an organic basis, while reminding investors that the Baltic tower transaction creates about EUR 35 million of annual negative impact, or around SEK 95 million in the quarter. He pointed to lower CapEx paid, excluding spectrum, because of slower 5G rollout and delayed hardware supply, while noting taxes paid included about SEK 135 million of withholding tax in Latvia and a supplementary SEK 60 million payment in Lithuania. He said equity free cash flow reached SEK 1.5 billion in Q2, net debt fell to SEK 19.7 billion, and leverage of 1.7x remains comfortably investment grade.

Analysts focused heavily on whether Tele2 has more cost efficiency left after the leadership change and prior headcount reductions. Management answered that there is “always more to do,” cited AI/automation and strict cost control, and said the company is leaner, simpler, and more flexible rather than having overshot. Questions also centered on Swedish pricing, fixed broadband competition, and whether market behavior has become less rational; management said no-frills competition has intensified after Halebop’s shutdown and that in open networks some players are pricing below cost, while Tele2 is deliberately staying out of the worst of the price war. A separate discussion on the Scaleway sovereign cloud and AI partnership emphasized it is an add-on to core revenue streams, with good growth potential but no immediate expectation that it will replace existing businesses.