TLTZF - Tele2 AB (publ) (TLTZF) Q1 2024 Earnings Call Transcript
2024-04-18 15:53:07 ET
Tele2 AB (publ) (TLTZF)
Q1 2024 Results Conference Call
April 18, 2024 04:00 AM ET
Company Participants
Kjell Johnsen - President and CEO
Charlotte Hansson - EVP, CFO
Yogesh Malik - Exec VP, CTIO
Hendrik De Groot - EVP, CCO
Conference Call Participants
Ondrej Cabejsek - UBS
Oscar Ronnkvist - ABG Sundal Collier
Andrew Lee - Goldman Sachs
Andreas Joelsson - Carnegie
Nick Lyall - Societe Generale
Stefan Gauffin - DNB
Erik Lindholm - SEB
Siyi He - Citi
Usman Ghazi - Berenberg
Presentation
Kjell Johnsen
Good morning, everyone. Welcome to Tele2's Report Call for the First Quarter of '24. With me here in Heathrow today, I have Charlotte Hansson, our Group CFO, Hendrik Groot, our Chief Commercial Officer, Stefan Trampus, our Head of B2B and we also have our CTO, Yogesh Malik here, who will soon present our exciting Tech Journey, which is why we have extended today's call with up to 20 minutes.
So let's turn to Page 2 for some of the highlights. We had a good start to the year with 4% end user service revenue growth in Q1 and 2% on underlying EBITDAaL as top-line growth outpaced cost inflation. We're also happy about our strong cash generation, which has pushed our financial leverage well below our target range ahead of the first proposed dividend tranche in May, and that gives us flexibility going forward.
In relation to Q4 results, we announced the launch of our new three-year strategy execution program. Through the program, we shift focus on fixing legacy IT towards our go to market efforts, developing outstanding digital tools and channels aimed at radically improving customer experience and value. It will also allow us to reduce run rate costs by SEK600 million.
The program kicked off in Q1, and I will soon share some details on the development so far. In terms of sustainability, we are proud that our Climate A rating with CDP was reaffirmed, a level that less than 2% of more than 21,000 assessed companies globally receive. We're also number 2 in Sweden among the top 100 companies worldwide in Equileap's gender equality ranking.
Finally, the long-term ownership structure of Tele2 looks set to be clarified as Kinnevik has agreed to sell its stake to Freya, jointly controlled by iliad and NJJ. Subject to the completion of the transaction, Freya will be the new largest shareholder in Tele2.
Let's move to Page number 3, please. End user service revenue grew by 4% organically with solid performance across operations including continued growth acceleration in B2C. Organic underlying EBITDAaL grew by 2% driven by end user service revenue growth partly offset by cost inflation. Q1 was yet another quarter with solid equity free cash flow and Charlotte will walk you through the details.
In Sweden B2C, we saw end user service revenue growth accelerating to 4%, by far the highest rate since the Com Hem merger. Both fixed broadband and mobile postpaid grew strongly supported by pricing. Sweden B2B continued to grow nicely in line with previous levels. The mobile business posted 8% end user service revenue growth supported by ASPU and continued strong IoT growth. Baltics had yet another good quarter with a largely ASPU driven end user service revenue growth that trickled down to underlying EBITDA growth....
Tele2 AB (publ) (TLTZF) Q1 2024 Earnings Call Transcript