Tele2 Well Set to Reach Its 2022 Objectives

We are pleased with narrow-moat Tele2's performance in 2022 so far. Sales and EBITDA continued to grow at healthy rates during the second quarter (3% each), thanks to stability in Sweden and the strong growth we are used to in the Baltics (12%, in line with previous quarters). Revenue growth did not result in EBITDA margin expansion, though. The cost-saving plan, which intends to save a cumulative SEK 1 billion by the first half of 2023, was offset by higher inflationary pressures, so EBITDA remained flat at 40.9%. Management stuck to its 2022 guidance for low-single-digit sales growth and mid-single-digit EBITDA growth, which we see as achievable at this pace (3% and 5% growth in sales and EBITDA, respectively, year to date). We are maintaining our SEK 115 fair value estimate