Tele2 Earnings: Ambitious Cost-Cutting Plan Sparks Optimism; We Raise Fair Value Estimate to SEK 120

Narrow-moat Tele2's playbook is exactly what we like to see in a telecommunications company. In a challenged sector, costs are key. In addition to Tele2's streamlined cost structure and lean mentality for more than a decade, management has now launched an even more ambitious efficiency plan to reduce its workforce by 15% during 2025 or between 600 and 700 employees. This news comes after the CEO change on Nov. 14 when Jean Marc Harion took the helm. Harion is the former CEO of Play, an Iliad company, where a culture of disruption, agility, and low costs was established by Xavier Niel, the owner of Iliad, for more than two decades. Niel has held a 29% stake in Tele2 since February 2024. The market has received the news well with Tele2 shares jumping 5% intraday to SEK 121. We raise our fair value estimate to SEK 120 per share as we incorporate this into our model.