Tele2 (TEL2) Q1 2026 earnings summary

Executive summary

• Achieved 3% year-over-year growth in end-user service revenue and 11% growth in underlying EBITDA/EBITDAaL in Q1 2026, marking the fourth consecutive quarter of double-digit EBITDA growth, driven by cost control and growth across all operations.

• Equity free cash flow reached SEK 2.2 billion, up from SEK 2.0 billion in Q1 2025, supported by strong operating cash flow and the completed Baltic Tower transaction, which generated SEK 4.7 billion in proceeds.

• Net profit surged to SEK 6.4 billion, mainly due to a SEK 5.1 billion capital gain from the Baltic tower transaction.

• Five new stores opened in Sweden and fixed network speeds were upgraded to 2.5 Gbps, reinforcing the fastest network position in the country.

• Continued investments in AI, automation, and customer experience, including the creation of a dedicated data and AI team and internal automation academy.

Financial highlights

• Group revenue reached SEK 7,246 million, up from SEK 7,152 million in Q1 2025.

• Underlying EBITDA/EBITDAaL increased to SEK 3,362 million (margin 46.4%), up from SEK 3,125 million (margin 43.7%), with underlying EBITDAaL margin at 40% (up from 38% in Q1 2025).

• Net profit: SEK 6.4 billion, up from SEK 0.9 billion, driven by Baltic tower capital gain.

• Equity free cash flow: SEK 2.2 billion (SEK 2.0 billion in Q1 2025), with rolling 12-month EFCF per share at SEK 9.1.

• Gain from sale of operations of SEK 5.1 billion reflects the Baltic Tower transaction.

Outlook and guidance

• Full-year 2026 guidance maintained: low single-digit organic growth in end-user service revenue, low to mid single-digit organic growth in underlying EBITDA/EBITDAaL, and CapEx-to-sales ratio of 10%-11%.

• Dividend proposal of SEK 10.50 per share (SEK 7.3 billion total), to be paid in two tranches in May and October 2026.

• The Baltic Tower transaction is expected to have a negative impact on underlying EBITDA of around EUR 35 million on a 12-month basis.

• Spectrum auction in Lithuania expected in 2026; full-year net financial payments estimated at SEK 650 million and tax payments at SEK 1.4 billion.

• Commitment to distribute at least 80% of equity free cash flow as dividends and maintain investment-grade credit rating.