Tele2 AB (publ) (TLTZF) Q4 2024 Earnings Call Transcript

2025-01-29 13:15:15 ET

Tele2 AB (publ) (TLTZF)

Q4 2024 Earnings Call

January 29, 2025 03:00 ET

Company Participants

Jean-Marc Harion - Chief Executive Officer

Charlotte Hansson - Group Chief Financial Officer

Hendrik de Groot - Chief Commercial Officer, B2C

Stefan Trampus - Executive Vice President, B2B

Conference Call Participants

Andrew Lee - Goldman Sachs

Ondrej Cabejšek - UBS

Andreas Joelsson - Carnegie

Stefan Gauffin - DNB

Joshua Mills - BNP Paribas Exane

Siyi He - Citi

Adam Fox-Rumley - HSBC

Felix Henriksson - Nordea

Keval Khiroya - Deutsche Bank

Ulrich Rathe - Bernstein

Viktor Hogberg - Danske Bank

Presentation

Jean-Marc Harion

Good morning and welcome to Tele2’s report call for the fourth quarter and full year 2024. With me here in Kista today, I have Charlotte Hansson, our Group CFO; Hendrik de Groot, our B2C Chief Commercial Officer; and Stefan Trampus, who heads our B2B business in Sweden. We have extended this call with up to 30 minutes as this is my first results call with Tele2 and as we have some important development to share after the usual review of the quarterly and full year results.

Please turn to Slide 2 for some highlights. In a nutshell, our Q4 results ended as expected, given tougher comps in Sweden Consumer due to the phasing of pricing and the finalization of our Boxer TV migration away from digital terrestrial technology, a slight growth improvement in Sweden business and continued solid growth performance from our Baltic operations. For the full year, we grew end-user service revenue by 3% and underlying EBITDAaL by 2%, whereas CapEx to sales ended just below 14%. Consequently, we delivered on all guidance parameters provided at the beginning of the year. On the other hand, we generated SEK4.4 billion of equity free cash flow in 2024, which is 7% less than in 2023.

Our guiding principle is that the ordinary dividend must be covered by the equity free cash flow generation. As funding costs remain expensive, we must remain vigilant on the balance sheet. In line with Tele2’s financial policy, the Board proposes to distribute 100% of the 2024 equity free cash flow through an ordinary dividend of SEK6.35 per share to be paid in two tranches in May and in October.

Looking forward, we see 2025 as a transition and a transformation year. We have engaged into a deep transformation to improve Tele2’s profitability through stricter prioritization, reinforced cost discipline and a simplified organization and operating model, which also enables a solid and ambitious 2025 guidance. Sadly, this transformation will also materialize in a reduction of around 15% of our total workforce depending on union’s negotiation. We expect the acceleration of our underlying EBITDAaL growth will translate into a higher equity free cash flow in 2025. We will talk more about this in a few minutes....

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