Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tele2 AB (TLTZF) is actively upgrading its network infrastructure to improve capacity and service delivery.
• The company is committed to leveraging existing infrastructure to enhance customer access to services.
• Positive trends are observed in core connectivity services, particularly in post-paid and fixed broadband revenue.
• Tele2 AB (TLTZF) is focused on transformation efforts, which are expected to secure future delivery and growth.
• There is potential for a 15-20% increase in free cash flow for the year, indicating strong financial performance.

Negative Points

• The company faces challenges with wholesale pricing regulations, impacting its ability to optimize costs.
• There is uncertainty regarding the timing of market definition and pricing regulation processes.
• Wage increases in Sweden are expected to be between 3.0% and 3.4%, which could impact operating costs.
• Mixed results in Sweden's top line performance, with declines in prepaid and fixed broadband revenues.
• Tele2 AB (TLTZF) operates with a conservative balance sheet, potentially limiting shareholder remuneration opportunities.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Sign with LTS:0GRP.

Q: Can you provide details on the expected wage increases in Sweden for Q2, and any updates on your midterm guidance? A: Peter, CFO: The salary increases in Sweden are between 3.0% and 3.4% from April. Regarding midterm guidance, we are currently focused on this year's transformation and will revisit the guidance later in the year.

Q: Could you elaborate on the KPI trends in Sweden and the factors influencing them? A: CEO: The results in Sweden show mixed trends. We see positive growth in core connectivity services, with post-paid and fixed broadband revenues increasing. However, prepaid revenues have declined, and economic constraints are affecting small enterprises. Overall, we are focused on securing delivery through our transformation plan.

Q: Is the 500 million restructuring cost for 2025 applicable to both P&L and cash flow? A: CFO: The 500 million restructuring cost is an indication, and its impact on cash flow will depend on the nature of the restructuring costs.

Q: Why is Tele2 operating with a conservative balance sheet despite being below the leverage target range? A: CFO: Our financial policy targets a leverage of 2.5. After the dividend, we will be at 2.4% pro forma. We aim to deliver first and then assess any room for additional shareholder remuneration.

Q: Can you clarify the expected increase in free cash flow for this year? A: CFO: We have provided transparency on the components affecting free cash flow, but we prefer not to specify exact figures. The components should allow you to estimate the potential increase.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.