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Research Tree provides access to ongoing research coverage, media content and regulatory news on TELE2 AB-B SHS. We currently have 5 research reports from 1 professional analysts.
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TELE2 AB-B SHS
TELE2 AB-B SHS
A solid Q4 but the stock is now at its price
26 Jan 17
Quite a good Q4 release for Tele2 Q4 revenues have grown by 18% yoy but it includes for the first time the acquisition of the B2B service provider TDC Sweden. Adjusted for this acquisition and also from FX, revenue growth was indeed 6.5% yoy: a number clearly better than the 3% recorded in the previous quarter, even if it also includes, like in Q3, the business joint-venture in Kazakhstan with Kazakhstan Telecom (which has an impact of c.4.5% on global growth). EBITDA has grown in reported terms by 9%, and by 1% yoy excluding the consolidation of TDC. It is also better than the 2% decline recorded in Q3. And note also that, adjusted for the joint-venture in Kazakhstan, EBITDA growth was indeed 4% in Q4! For 2016, the board has decided to recommend an ordinary dividend of SEK5.23 but Tele2 expects to propose a dividend of SEK4 for 2017. By financial year 2019, Tele2 expects the dividend to be fully covered by equity free cash flow generation.
Becoming more Swedish over time
21 Jul 16
The Q2 release has confirmed the weak guidance given by the group at the begining of the year (while revenues should grow slightly by 2%, EBITDA should be between SEK4.6bn and SEK5bn vs SEK5.75bn in 2015 due to the roll-out and commercialisation of Tele2’s 4G network in the Netherlands). Q2 revenues, as expected, have grown by 1% yoy while EBITDA was down by 21%, primarily impacted by costs associated with the commercial push in the Netherlands following the 4G LTE network launch, but also by Sweden’s non-recurring items as well as declines in the fixed operations. The most important news in the quarter was indeed the announcement of the acquisition of TDC, one of the strongest B2B service providers in Sweden. On 21 June, Tele2 announced that it had signed a contract to acquire 100% of TDC Sweden for SEK2.9bn on a debt free basis. The transaction is subject to approval by the regulatory authorities, which is expected in Q4. TDC Sweden is a provider of B2B services in Sweden, serving both the public sector and many Swedish blue-chip customers with their entire end-to-end connectivity and communication needs. TDC Sweden has a strong position in attractive product segments, and a solid track record of profitable growth, delivering net sales in 2015 of SEK3.4bn and an EBITDA of SEK0.4bn. The operations had 809 full-time employees at the end of 2015. Tele2 estimates the annualised run rate for opex and capex synergies should amount to c.SEK300m, with additional one-off capex synergies estimated at SEK200m. Positive effects of cross-selling are also expected. Preliminary estimates for the integration costs and other one-off costs required to achieve synergies amount to c.SEK750m.
The growth engines are stalling
28 Jan 16
Exactly like in the previous quarters, Q4 sales increased by 2% yoy at constant currency while the EBITDA declined by 5% yoy despite a good performance in Sweden (+8% yoy). The reason for this expected weak performance was the Netherlands where increasing data traffic and costs associated with the MVNO agreement as well as an acceleration in the mobile rollout resulted in a decline in the Dutch EBITDA which amounted to SEK35m in Q4 vs SEK172m a year ago (and SEK275m two years ago). The headline news from this release is, however, the weak guidance for FY2016: while revenues should grow slightly (by 2% in our model) the EBITDA should be between SEK4.6 and 5bn vs SEK5.75bn in 2015 due to the roll out and commercialization of Tele2’s 4G network in the Netherlands.
How much is Tele2 worth?
26 Oct 15
Exactly like in Q2, Q3 sales increased by 3% yoy at constant currency while the EBITDA declined by 5% yoy despite a doubling of the EBITDA in Kazakhstan and stability in Sweden. The reason for this expected weak performance is The Netherlands where increasing data traffic and costs associated with the MVNO agreement as well as an acceleration in the mobile rollout resulted in a decline in EBITDA which amounted to SEK –83m.
Obsolete German and Austrian assets weigh on the overall Q2 EBITDA
21 Jul 15
Q2 sales increased by 4% yoy at constant change and are slightly better than what we were expecting. Note that although the solid growth registered in Sweden in Q1 (+4%) stopped due to a lower mobile customer stock, Kazakhstan confirmed logically its role as an engine of growth with a 23% increase in its sales yoy (corresponding now to 7.5% of Tele2's global sales). But the Q2 EBITDA was below our estimates (even if it is not a real surprise as we believe that the German and Austrian assets are obsolete) with a decline of 5% yoy despite a positive EBITDA in Kazakhstan and quite a good 3% growth in… Sweden. The German and Austrian EBITDAs were indeed down by 25% yoy and we don’t believe they are about to go up at any time soon. Note the group is maintaining its 2015 financial guidance of revenues at around SEK26-27bn with an EBITDA between SEK5.8bn and SEK6bn.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Visible benefits from restructuring
23 Feb 17
In our view, Monitise’s H1 17 results demonstrate the benefits of management’s ongoing transformation programme. EBITDA profitability was sustained, and accompanied by cash outflow more than halving vs H1 16A. With gross cash at £27.3m, the group’s financial position remains strong. Initial FINkit sales are under “active discussion” and ongoing regulatory initiatives (CMA, PSD2) give further grounds for optimism in the outlook.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management
Ready to dominate TV distribution and prepared for new competition from Iliad
20 Feb 17
TI has released a good set of Q4 results: Revenues were up organically by 0.8% yoy (vs -5.2% in Q1, -4.2% in Q2 and -1.2% in Q3) while the EBITDA (excluding the negative impact of non-recurring items) has increased sharply by 5.9% yoy as in Q3 but vs a decline of 1.7% in H1! EBITDA has clearly benefited from the actions implemented in the “cost recovery plan” that started in Q2 in the Domestic Business and in Q3 in the Brazil Business. In Italy, revenues were up by 2.7% yoy (vs +1% in Q3 and -1.7% in the H1). The solid, structural recovery of Mobile revenues was confirmed, thanks both to the maintenance of market share and the stabilisation of ARPU levels. But the key point is the EBITDA which has grown by 8.4% (vs 7.9% in Q3, +6.9% in Q2 and -5.2% in Q1). Excluding non-recurring restructuring charges, EBITDA would have grown by +4.5% in 2016, with an EBITDA margin of 45.9%, up 1.9ppts on 2015. In Brazil, Q4 revenues were down organically and at constant change by only 1.7% yoy (vs -5.2% in Q3 and -14% in H1)! The main issue is that the total number of subscribers (c.63m with a market share of 26%) was still down by 4.3% vs end 2015. Note, however, that like its competitors the group has seen its prepaid customer base contract sharply in 2016, due to the adoption of a restrictive policy for the disconnection of inactive customers according to Anatel’s new criteria (the Brazilian National Telecommunications Agency). Q4 EBITDA was up by 2.8% yoy (vs +0.5% in Q3 and -10.9% in H1) with the start in Q3 of cost-cutting operations.
Ronez performing, debt facilities agreed
21 Feb 17
Confirming our view that Ronez is a high-quality maiden acquisition, SigmaRoc today announces that trading and operational performance at the verticallyintegrated aggregates business on the Channel Islands has been strong in the first few weeks of trading since the deal completed in early 2017. January sales volumes are reportedly above budget, a healthy order book is in place for the remainder of the quarter, and requisite back-office systems are being developed faster and at lower cost than initially anticipated. Furthermore, SigmaRoc has agreed terms with Santander Bank for a £2m revolving credit facility and is close to agreeing an £18m term facility – once finalized these debt facilities should see SigmaRoc sufficiently capitalized to progress initial projects in management’s pipeline of growth opportunities. We thus continue to believe that Ronez has potential to generate EBITDA to the group of at least £6m pa as efficiencies continue to be unlocked under the new independent ownership structure, providing SigmaRoc with a firm platform from which to leverage more acquisitions and/or organic investments and thus deliver further earnings growth as it progresses its niche buy-and-build strategy.
Satellites tracking well
16 May 16
Avanti has reported Q3 trading that not only allows it to maintain its guidance for revenue growth, delivering a positive EBITDA in Q3, but clearly indicates a path towards free cash generation. With contract momentum building with high quality customers, recurring revenues are growing, satellite capex is almost complete and the financing facilities nearing finalisation appear more than sufficient to execute the plan. As this progress becomes more widely appreciated, we expect the share price to be released from its shackles and start to trend towards cash-based fair values. Our own capped DCF still returns a fair value of 427p per share.