Telia Company AB "A justified but peaking premium" (Neutral) Cabejsek

研报英文原文证据摘录

Telia Company AB "A justified but peaking premium" (Neutral) Cabejsek

Telia Company AB UBS Research

Sweden's dynamic revenue trends

In the company's home market, several important things are happening and we believe

they all point towards an improving top line for Telia Sweden. This is important for

sentiment but at the same time, we note that some of the top-line growth in Sweden is

coming at either lower margins or at the cost of investment back into growth. This

means that in order to reach the 2% top line and 4% EBITDA growth rate which

management is targeting, other units may need to compensate with above 4% growth

rates. We believe this also explains why, after a material cost-cutting effect on EBITDA in

2025, when the growth rate >5%, the company is back to guiding for c3% this year.

1. Legacy phase out

Perhaps the most consequential of these, thanks to its lasting nature, is the looming The c2pp EBITDA legacy drag will

copper shutdown which has been a material drag on the unit over the past years thanks disappear by 2028

to declining legacy revenues as shown in Figure 1TeliaSwedenlegacyrevenues.

Figure 1: Telia Sweden legacy revenues

Teli a Sw eden leg acy reve nues

Source: Telia Company, UBS estimates

Assuming a 70% EBITDA margin of these revenues, an estimate borne by combining a

fixed voice margin of c90% and fixed broadband margin of c50%, we see in Figure 2TeliaSwedenlegacyrevenuedragonEBITDA

that the drag on Sweden EBITDA has declined from an estimated c4% in 2022 to an

estimated c2% in 2025. The EBITDA drag will again be c2% this year, we estimate, but

this should decline to just c1% in 2027E and have virtually no impact on financials in

2028E.

Figure 2: Telia Sweden legacy revenue drag on EBITDA

Teli a Sw eden leg acy reven ue dr

ag on EBITDA