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Tele2 (Neutral, TP: SEK 115, 0%) Q4 24: A slightly weak set of Q4 numbers, but strong 2025 guidance

Tele2 has reported a slightly weak set of Q4 numbers, with end-user SR -0.3% light of consensus, and EBITDAaL -1.0% light. EFCF is -15% light, but this is due to a change in a coupon payment timing and cash tax (hard to forecast) – adjusting for both, EFCF is 6% ahead. Away from Q4, new guidance for 2025 is strong, with an upgrade to EBITDAaL guidance to “mid to high single digit” from “MSD”; implied capex is slightly lower than expected, meaning that OpFCF for 2025 is 6% ahead of consensus. The dividend is down y/y, which is surprising given that leverage is at the bottom of the range, and the 2025 OpFCF guidance is good, but we suspect that the dividend has been cut as a symbolic gesture while negotiations are ongoing with unions on a new 15% FTE cut. We would expect a special dividend or buyback to come later in the year. The prospect of rising 2025 OpFCF, extraordinary returns later in the year, possible divestments (towers in Sweden/Baltics) combined with possible M&A, mean that Tele2 should start the year well in our view.