Tele2TEL2 B

Tele2 had revenue of SEK 29.9bn in 2025. That is 2% more a year since 2020.

Subscription income is stable and paid every month. Networks are expensive to build and maintain, so what matters is how much of operating profit is left after investment. Most of it is paid out to shareholders.

Revenue from the group income statement in the annual report (ESEF). Growth is the average annual change.

Of every 100 in sales, 22 became operating profit in 2025. Over the period it has ranged from 18 to 28.

On average, 212% of profit arrived as cash over the period.

Operating margin = operating profit divided by revenue. Cash conversion = cash flow from operations divided by net profit.

Earnings per share went from SEK 10.76 in 2020 to SEK 6.62 in 2025. Dividends took 138% of owner earnings over the last 5 years.

The share count has risen 0.1% a year, so each share owns a little less of the company every year.

Owner earnings = cash flow from operations, minus investment in tangible and intangible assets, minus lease repayments. Share count is derived as net profit divided by earnings per share.

Return on capital employed was 10% after tax in 2025. Net debt is SEK 29.1bn.

Return on capital employed has ranged from 10% to 10% after tax over the period.

Net debt was SEK 29.1bn at the end of 2025, including lease liabilities of SEK 4.8bn. It has since fallen to SEK 24.7bn, partly after the sale of the Baltic tower business.

Return on capital employed = operating profit after 20.6% Swedish tax, divided by equity plus net debt at year end.

Today's price needs owner earnings to grow 10% a year for ten years. Revenue has grown 2% a year.

Market value SEK 111bn, enterprise value SEK 140bn. Base: owner earnings of SEK 5.1bn a year on average over the last three years, an owner earnings yield of 3.6%.

Reverse discounted cash flow. Enterprise value = market value plus net debt. The base is average owner earnings over the last three years. Required return 9%, 10 years, then 2.5% growth.