Tele2 (TEL2) Q3 2025 earnings summary

Executive summary

• Achieved 2% organic growth in end-user service revenue and 11% growth in underlying EBITDA/EBITDAAL, driven by transformation efforts, cost control, and strong Baltic and Sweden Business performance.

• Equity free cash flow reached SEK 1.8 billion in Q3 and SEK 6.2 billion over the last twelve months, up 60% year-over-year.

• Workforce reduced by over 600 positions, supporting cost efficiencies and transformation targets.

• 5G network now covers 99.9% of Sweden’s population and 90% of its landmass, recognized as a global leader in 5G video experience.

• Announced creation of the first pan-Baltic tower company in partnership with GCI, with transaction valued at EUR 560 million and closing expected in Q1 2026.

Financial highlights

• Q3 2025 end-user service revenue was SEK 5.6 billion (+2% organic YoY); total revenue SEK 7.4 billion (+1% organic YoY).

• Underlying EBITDA/EBITDAAL grew 11% to SEK 3.1–3.5 billion, with margin improving to 42–47.5% year-over-year.

• Net profit increased to SEK 1.3 billion (Q3 2024: SEK 1.1 billion); EPS SEK 1.86.

• Capex (excluding spectrum and leases) decreased to SEK 643–745 million, reflecting investment prioritization.

• Economic net debt at SEK 22.9 billion, leverage at 2.0x underlying EBITDA/EBITDAAL, below target range.

Outlook and guidance

• 2025 guidance: low single-digit organic growth in end-user service revenue, underlying EBITDA/EBITDAAL growth slightly above 10%, and capex-to-sales ratio lowered to ~12% (previously ~13%).

• Restructuring costs for 2025 anticipated at SEK 500 million; full-year Boxer revenue expected SEK 225 million below 2024.

• Dividend policy: at least 80% of equity free cash flow to be distributed as ordinary dividend.

• Transformation initiatives continue, targeting further cost and complexity reductions and workforce optimization.

• Q4 will see final SEK 370 million payment for Swedish spectrum licenses; 1800 MHz spectrum auction payments split between Q1 2026 and Q1 2028.