Tele2 AB (publ)

Good day and thank you for standing by. Welcome to the Tele2, Q4 and Full Year Report 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 1 1 again. Please be advised that today's conference has been recorded. I would now like to hand the conference over to your speaker today, Jean-Marc Marion, President and Group CEO. Please go ahead.

Thank you, Sandra, and good morning to all, and welcome to Teletubbies' report call for the fourth quarter and full year 2025. With me, I have Peter Landgren, our Group CFO, Nicolas Hoogberg, our new chief B2C officer and deputy CEO, and Stefan Trampus, our chief B2B officer. Please turn to slide two for some operational highlights from the fourth quarter. We had quite an intense last quarter of the year. We successfully secured and expanded our 1800 megahertz spectrum position during the Swedish spectrum auction in November. In early December, we shut down both our 2G and 3G networks in Sweden, marking a milestone in our company history. Combined, these achievements will support our efforts to further improve our 5G network, which already covers 99% of the population, and was recently recognized by OpenSignal as the fastest 5G network in Sweden. We have delivered on our ambitious transformation and cost reduction targets, including for the reduction of our workforce. At the end of the year, we have canceled around 650 positions at group level. We have so far as well addressed and renegotiated close to 350 supplier contracts, and this will continue during 2026. Moreover, our tireless work on sustainability continues and continues During the quarter, we were ranked number one in Europe and second globally by Global Child Forum for work on integrating child rights into the business. We were also recognized by CDP with an A score for climate change efforts for the fourth consecutive year. Please move to page three for financial highlights. Our deep transformation, executed in record time, has borne fruit and translated into not only a spectacular improvement of Teletubbies profitability, but also into an accelerated growth for Topline. Our end-user service revenue growth has progressively improved throughout the year to reach a good 4% in Q4. Once again, underlying EBITDA grew strongly, with 13% in Q4, marking the third consecutive quarter of double-digit growth. On a full-year basis, we exceeded most of our 2025 guidance KPIs. T2 full-year equity free cash flow grew by a massive 42%, leaving our balance sheet very healthy. This was mainly driven by our operating cash flow plus working capital, which we have improved by one-third compared to 2024. Consequently, our board of directors proposes a dividend of 10.5 Swedish crowns per share, an increase of 65% from last year, and to be paid in two tranches in May and October. We have also updated our financial policy and set guidance for 2026, which will soon be discussed. Please move to page 4 for more details on our results. Our 4% end-user service revenue growth in Q4 has been driven across all our operations and core services. In addition to continued strong performance by Sweden business and the Baltics, especially positive this time is the return to growth in Sweden consumer. The 13% growth in underlying EBITDA was driven by both transformation and revenue growth. Our Q4 equity free cash flow was impacted by a spectrum payment. which offset higher underlying EBITDA. Full year, Tele2 delivered 6.2 billion Swedish crowns equity free cash flow. CapEx to sales picked up seasonally in Q4, but remained at low levels, around 11%, both in Q4 and for the full year. In Sweden consumer, end-user service revenue grew by 2%, as growth in core services exceeded declines in Q4, Boxer TV and legacy services. In Sweden business, end-user service revenue growth accelerated further to 7% thanks to good growth in mobile, including IoT and solutions. The Baltic grew end-user service revenue by 6% and underlying EBITDA by 16%. But let's move to slide 6 for more details on Swedish consumers. As mentioned in my CEO letter, we have successfully leveraged our strengthened brand and new offers to drive significant traffic to our own channel, which now contribute to two-thirds of our sales. Our continued investment in stores and online capability have started paying off, and we are confident in the efficiency of our commercial model. Mobile postpaid end-user service revenue grew by 5%, up from 4% in Q3, Total mobile revenue grew by 4%, partly offset by continued decline in prepaid. Fixed broadband grew end-user service revenue by 2%, mainly due to ASPU growth. Digital TV showed strong sequential improvement, driven by healthy mid-single-digit growth in Tele2TV. End-user service revenue grows, which now offset the continued, albeit smaller, drag from Boxer TV. Following up on Boxer TV, the full year ended very close to our communicated estimate of around 225 million revenue decline compared to 2024. Total consumer end-user service revenue grew by 3% in the quarter, excluding the Boxer impact. Let's look at consumer KPIs on slide seven. Mobile Press Paid added a solid 16,000 RGUs in Q4, net of a 14,000 one-off contribution relating to recognition of previously uncounted low ASPU RGUs. Mobile ASPU growth improved to 3% year-on-year, which is, while it was still negatively impacted by IFRS 15 fair value adjustment in Tele2 customer base, Q4 also included a positive one-off, adjusted for both, underlying ASPU growth was still 3%. Fixed broadband RGUs remained unchanged in Q4, whereas ASPU grew by 1%, just like in previous quarter, we observed aggressive competition and escalating wholesale access fees, which hampered the volume growth. TV returned to positive net intake, with 3,000 RGUs added in Q4, as growth in Tele2 exceeded continued decline in Boxer, as Pooh grew by 4% year-on-year, supported by more sports revenue. Please move to slide 8 for Sweden Business. Sweden Business continued to deliver strong end-user service revenue growth, this time reaching 7%, driven by growth across operations. Mobile grew by 7%, driven by our IoT business, including some temporary project revenue of around 15 million in the quarter. Mobile RGU remains stable in Q4, while up by a solid 4% year-on-year, as Poo continues to be impacted by change in customer mix. Solutions grew by a strong 10%, driven by finalization of larger network and cloud modernization project. Please move to slide nine for Sweden financials. In total, Sweden end user service revenue accelerated to 3% growth in Q4, driven by both business and consumer. Underlying EBITDA grew by 12%, driven by the end-user service revenue, workforce reduction, stricter prioritization, and cost control. The cash conversion has improved to 69% over the last 12 months. Let's move to Baltic financials on slide 11. Baltics have maintained operational momentum with continued strong top and bottom line growth in Q4, Total end-user service revenue grew at 6%, supported by price adjustment during the first half year. Q4 was the fourth consecutive quarter in which all markets delivered double-digit growth in Andala and Ibidal, delivering a total growth of 16%, led by Estonia at 41%. Cash conversion increased to a strong 10%, 81% during the last 12 months, reflecting increasing EBITDA margins. Let's move to slide 12 for Baltic operating KPIs. The total postpaid base in the Baltics increased by 23,000 RGUs in Q4, driven by Latvia and Lithuania. Prepaid declined by 68,000 RGUs, largely due to regulation and migration to postpaid. Blended organic ASPU grew by a strong 11% driven by price adjustment and continued prepaid to postpaid immigration. 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 14. First, a couple of comments on the group P&L for the quarter. Total revenue grew by 4% organically, driven by service revenue growth of 4%, with contribution from all operations, and equipment revenue growth of 7%. Both underlying EBITDA and underlying EBITDA after lease grew by 13% organically, thanks to sharp cost control across the group and the service revenue contribution. Then over to the full-year P&L. both underlying EBITDA and underlying EBITDA after lease grew by 11% organically. The group reached a full-year underlying EBITDA margin above 39%, which implies an increase of 3.4 percentage points compared to 2024. Items affecting comparability ended at 600 million SEK, of which 500 million were restructuring costs related to the transformation to be in line with our expectations. Net financial items decreased year-on-year thanks to both lower interest rates and reduced debt levels. By year-end, our average interest rate was 2.8%. The debt mix of 68% fixed rates and 32% floating rates. And income tax finally, sorry, increased year-on-year due to higher taxable profits. And let's move to the cash flow on slide 15. In Q4, equity-free cash flow of 777 million SEK was generated, broadly in line with last year. The final payment of the Swedish spectrum secured in 2023 was absorbed by strong growth in underlying EBITDA and lower CAPEX. But let's focus a bit more on the strong full-year cash flow. CapEx paid excluding Spectrum decreased by around 630 million. This was mainly thanks to successful prioritization and partly due to some investments being postponed to 2026. Changes in working capital contributed almost 300 million to the cash flow supported by optimized inventory levels, but also increased redundancy provisions. Taxes paid decreased by around 155 million, thanks to a tax refund earlier in the year. Net net full year equity free cash flow reached 6.2 billion SEK, which means a 42% growth compared to last year. This translates to almost nine SEK per share. Please turn to slide 16 and our capital structure. By year end, economic net debt amounted to 24.3 billion SEK, a reduction of 1.9 billion compared to 2024. This was enabled by the cash generated in the business exceeding the dividend distribution. Today, we also announced that the board has updated the financial policy. With this policy, the aim is to provide attractive shareholder remuneration while preserving a strong balance sheet and financial flexibility. The proposed dividend demonstrates a sizable distribution, while our leverage of 2.1 times underlying in the data after lease will comfortably stay within the desired investment grade range. And with that, I hand over to Shamar for a follow-up on our 2025 guidance and then some comments on our 2026 guidance.