Tele2 AB (publ)

Thank you for standing by. My name is Van, and I will be your conference operator today. At this time, I would like to welcome everyone to the Teletubbies Q3 Interim Report 2025. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Jean-Marc Harrien, President and Group CEO. Please go ahead.

Thank you and good morning. Welcome to Teletubbies' report call for the third quarter of 2025. With me, I have Peter Landgren, our Group CFO, and some members of our Group Leadership Team. Please turn to slide two for some financial highlights. End-user service revenue grew by 2% in Q3. despite the continued impact of the discontinuation of Boxer TV terrestrial distribution in Sweden at the beginning of the year. Underlying EBITDA continued to increase rapidly, going by 11% during the quarter, mostly thanks to excellent transformation efforts. Once again, our equity free cash flow was very strong, totaling 1.8 billion SEC in the quarter, which is 60% more than last year. At the end of September, we had reduced our workforce by slightly more than 600 positions, thereby already reaching the lower end of our targeted range of 600 to 700 by January 2026. September marked a major milestone as we completed the 5G upgrade across our entire Swedish network. Coverage jumped from 25% to 90% of the territory, now reaching virtually 100% of the Swedish population, and just recently opened signal named Tele2, the global leader in 5G video experience. We are also stepping up our long-term network ambition in the Baltics. The creation of the first Pan-Baltic Tower Co. is a key enabler supporting our future expansion while unlocking value from our infrastructure there. The transaction is expected to close in Q1 2026. Finally, we are proud to have been recognized by Time Magazine as one of the world's best companies, a ranking based on employee satisfaction, growth, and transparency in sustainability. Please move to page three for more details on our results. As said, end-user service revenue grew by 2% organically in Q3, driven by continued strong growth in the Baltics and accelerating growth in Sweden. Excluding the boxer impact, group end-user service revenue grew by 3%. The 11% growth in underlying EBITDA was driven by the transformation, improved profitability in Sweden business, and the Baltic revenue growth. Our strong equity free cash flow benefited from lower paid capex and better working capital year on year, which Peter will soon discuss in more detail. After reaching 12% in the first half year, our capex to sales ratio fell to 11% for the first nine months due to additional reprioritization and re-planning. As a result, we have decided to lower our full year guidance, which I will return to shortly. Our leverage fell to 2.0 times ahead of the final dividend tranche, which was paid last week. In Sweden, consumer and user service revenue was unchanged as growth in core connectivity offset the decline in Boxer TV following the decommissioning of terrestrial distribution at the beginning of the year. In Sweden business, end-user service revenue growth accelerated to 5%, thanks to good growth in mobile and solutions. The Baltic grew end-user service revenue by 7%, and underlying EBITDA by a massive 20%, matching Q2 performance. Let's move to slide 5 for more details on Swedish consumers. Mobile postpaid end-user service revenue grew by 4%, up from 3% in Q2. Total mobile revenue grew by 3%, partly offset by continued decline in prepaid. Fixed broadband grew end-user service revenue by 3%, mainly due to ASPU growth. While Tele2 TV grew by a low single digit, end-user service revenue for DTV declined by 8% due to the Boxer migration. For full year 2025, we continue to anticipate Boxer revenue to be roughly 225 million below 2024, with minor year-on-year impact on EBITDA. Total consumer and user service revenue remained unchanged in the quarter, excluding the boxer impact. Consumer grew by 2%. Let's look at consumer KPIs on slide six. Mobile Postpaid added a solid 8,000 RGU's during Q3. Mobile ASPU growth improved to 1% year-on-year, but was still negatively impacted by IFRS 15 fair value adjustment in Tele2 customer base, which did not have handset binding until almost two years ago. Excluding this adjustment, ASPU grew by 2%. As mentioned in my CU letter, successful rebranding of our main brand and strong demand for iPhone 17 led to our best iPhone launch in years, reinforcing the shift towards on-channel sales. Fixed broadband grew by 1,000 RGUs in Q3, whereas ASPU grew by 2% due to price adjustments. Similar to Q2, we observed aggressive competition in open networks, along with escalating wholesale access fee, which hampered volume growth. Our TV business further stabilized as the customer base approaches A neutral development to TV RGUs grew, driven by our recently launched Flex TV offer, whereas Boxer TV RGUs declined. Please move to slide seven for Sweden Business. In Q3, Sweden Business once again delivered a strong end-user service revenue growth, reaching 5% with all main product lines growing. While the micro segment remains stable, we saw continued growth in IoT and our larger segments, affecting the evolution of mobile as through year on year. Mobile grew by 5%, driven by our IoT business and continued solid RGU growth among larger customers. Solution grew by a strong 8%, driven by network solution and cloud DBX, whereas fixed remains stable. A new partner program was launched in Q3 to enhance quality and customer satisfaction. As a result, around 60% of the specialized reseller partners for SMEs were phased out. Please move to slide eight for Sweden financials. All in all, our Swedish end user service revenue improved to 1% growth in Q3, driven by business. 2% with a boxer impact. Underlying EBITDA grew by 8%, driven by workforce reductions, stricter prioritization and cost control from a quarter-on-quarter perspective. Growth was partly offset by substantial sequential increase in marketing expenses. As you probably noticed, we invited Frank back. Network operating costs increased due to the expansion of our mobile network. and notable cost inflation in access fees from open networks. The cash conversion has improved to 66% over the last 12 months. Now let's move to Baltic financials on slide 10. Our Baltic operations have maintained operational momentum with sustained strong top and bottom line growth in Q3. Total end user service revenue continue to grow to grow at 7%, supported by price adjustment during the first half year. Q3 was the third consecutive quarter in which all markets delivered double-digit growth in underlying EBITDA, driving a total growth of 20%, same as Q2, and with Estonia posting a massive 53%. Cash conversion increased to a strong 78% during the last 12 months, reflecting increasing EBITDA margins. As part of ongoing efficiency efforts, we have now initiated projects to centralize support and IT across our Baltic countries to reduce operating costs and shorten development timelines in the coming years. Let's move to slide 11 for Baltic operating KPIs. Postpaid base increased by 21,000 RGUs in Q3, driven by Lithuania and Latvia. Prepaid increased by 8,000 RGUs. Blended organic ASPU grew by a strong 12%, driven by price adjustment and continued prepaid to postpaid migration. And with that, I hand over to Peter, who will go through the financial overview.

Thank you, Jean-Marc, and good morning, everyone. Please turn to page 13. First, a few comments on the group P&L for the quarter. Total revenue grew by 1%, with end-user service revenue up by 2%, driven by the Baltics and Sweden B2B. Our equipment revenue declined in a continued slow handset market, but a successful launch of the new iPhones supported equipment revenue growth in Sweden B2C. Both underlying EBITDA and underlying EBITDA at the least grew by 11% organically, thanks to the sharp cost control across the group and the end-user service revenue growth. Worth noting is that the group now has reached an underlying EBITDA margin of 40% year-to-date. Items affecting comparability were at 130 million in the quarter, impacted by redundancy costs related to workforce reductions. Net financial items decreased year on year, thanks to both lower interest rates and reduced debt. In Q3, our average interest rate was at 2.8%, with a debt mix of 66% fixed rates and 34% floating rates. Income tax increased largely due to higher profits. Let's turn to slide 14, and our group cash flow. CapEx paid decreased by around 175 million. This was partly due to successful prioritization and partly due to the deferral of planned investment to 2026. Changes in working capital remained quite neutral in the quarter, slightly impacted by reduced liabilities. Net financial items paid excluding leasing decreased year on year thanks to the reduction of interest costs along with payment timing. Net-net equity-free cash flow added up to a strong 1.8 billion in Q3, an improvement of 670 million compared to last year. And over the last 12 months, equity-free cash flow has reached 9 SEK per share. So let's move to slide 15 and our capital structure. End of Q3, economic net debt amounted to 22.9 billion, reduced by 3.3 billion compared to the end of 2024. This was enabled by the cash generated in the business, exceeding the payouts of the first dividend tranche in May. Our leverage of 2.0 times underlying EBITDA remains below our target range, thanks to the strong profitability and cash generation. Adjusted for the payout of the final tranche of the ordinary dividends last week, pro forma leverage would have been at 2.2. And with that, I hand over to Jean-Marc for some comments on our 2025 guidance.