Tele2 (TEL2) Q1 2025 earnings summary

Executive summary

• 2025 is a transformation year focused on agility, cost control, and organizational simplification, supported by a new leadership team and a challenger culture.

• Over 450 workforce reductions completed by mid-April as part of the transformation plan, with major contract renegotiations to streamline costs.

• Transformation supported by internal cultural shift and strong support for a challenger mindset.

• End-user service revenue grew 1% organically to SEK 5.4 billion, driven by strong performance in the Baltics.

• Underlying EBITDAaL increased 6% organically to SEK 2.7 billion, reflecting sharp cost control and Baltic growth.

Financial highlights

• Q1 equity free cash flow improved to SEK 2.0 billion, up 57% year-over-year, aided by working capital, CapEx timing, and a one-off tax refund.

• End-user service revenue (EUSR) grew 1.3% year-over-year to SEK 5.4bn, driven by the Baltics.

• Underlying EBITDAaL margin improved to 43.7% from 40.9% year-over-year.

• Net profit rose to SEK 0.9 billion, with EPS of SEK 1.26, up from SEK 1.20 in Q1 2024.

• Leverage at 2.2x underlying EBITDAaL after lease, below target range ahead of dividend payment.

Outlook and guidance

• 2025 guidance reiterated: low single-digit organic growth in end-user service revenue, mid- to high single-digit organic growth in underlying EBITDAaL, and capex to sales ratio around 13%.

• CapEx to sales ratio expected at 13% for 2025, declining to 10-12% from 2026.

• SEK 500 million in restructuring costs expected for 2025, with SEK 287-288 million in Q1.

• Net tax payments for 2025 estimated at SEK 1 billion, including SEK 280 million refund in Q1.

• Dividend proposal of SEK 6.35 per share (SEK 4.4 billion total), to be paid in two tranches.