Tele2 (TEL2) Q2 2024 earnings summary

Executive summary

• End-user service revenue grew 4% organically in Q2 2024, marking 13 consecutive quarters of organic top-line growth, with underlying EBITDA/EBITDAAL up 3% year-over-year, driven by strong performance in Sweden Consumer and the Baltics.

• Total revenue increased 1% year-over-year to SEK 7.3 billion, and net profit reached SEK 1.0 billion, with EPS of SEK 1.39.

• Completed major IT stack consolidation in Sweden, including Comviq migration, enhancing operational efficiency and digitalization.

• Recognized as Sweden's most sustainable company by Time Magazine and top Climate Leader 2024 by Financial Times.

• Dividend fully covered by cash flow; leverage at 2.4x, below the target range, indicating a strong balance sheet.

Financial highlights

• End-user service revenue: SEK 5.5 billion (+4% organically YoY); total revenue: SEK 7.3 billion (+1% YoY).

• Underlying EBITDA/EBITDAAL: SEK 2.6–2.96 billion (+3% organically YoY); margin at 36–40.8%.

• Net profit: SEK 946 million to SEK 1.0 billion; EPS: SEK 1.39 (Q2 2023: SEK 1.28).

• Equity free cash flow for Q2 was SEK 1.2 billion; LTM equity free cash flow per share at SEK 7.1.

• Capex to sales LTM at 13.8–15%, reflecting continued high network investments.

Outlook and guidance

• 2024 guidance: 3–4% organic growth in end-user service revenue, 1–3% organic growth in underlying EBITDA/EBITDAAL, and 13–14% capex to sales.

• Mid-term outlook: low to mid-single-digit organic growth in revenue and EBITDA/EBITDAAL; capex to sales expected at 10–12% from 2026.

• Ordinary dividend of SEK 6.90 per share for 2024, paid in two tranches.