DCF Studio

    TEL2-B.ST · STO · Communication Services

    Tele2 AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 126.01

    Market price

    SEK 168.50

    Implied upside

    -25.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    SEK 126.01-25.2%
    Exit multiple
    SEK 166.75-1.0%
    Market price
    SEK 168.50

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn4bn8bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 30.5bnSEK 31.1bnSEK 31.8bnSEK 32.4bnSEK 33.1bn+2.1%
    EBITSEK 6.2bnSEK 6.3bnSEK 6.5bnSEK 6.6bnSEK 6.7bn+2.1%
    NOPATSEK 5.0bnSEK 5.1bnSEK 5.2bnSEK 5.3bnSEK 5.5bn+2.1%
    Add depreciation & amortisationSEK 6.4bnSEK 6.5bnSEK 6.7bnSEK 6.8bnSEK 7.0bn+2.1%
    Less capital expenditureSEK -4.0bnSEK -4.1bnSEK -4.2bnSEK -4.3bnSEK -4.4bn+2.1%
    Less increase in working capitalSEK 97.6mSEK 99.6mSEK 101.7mSEK 103.8mSEK 105.9m-2.1%
    Free cashflow to firmSEK 7.5bnSEK 7.7bnSEK 7.8bnSEK 8.0bnSEK 8.2bn+2.1%
    Discount factor0.96720.90480.84640.79180.7407-
    Present valueSEK 7.3bnSEK 6.9bnSEK 6.6bnSEK 6.3bnSEK 6.0bn-4.5%
    Present Value Of The ForecastSEK 33.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.547Reported 0.324, pulled toward 1.0 (Blume)
    Cost of equity7.76%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationSEK 117.3bn80.2% of capital
    Total debtSEK 28.9bn19.8% of capital, book value as a proxy
    Tax rate18.9%Effective, capped at statutory
    WACC6.90%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareSEK 126.01

    71% of EV

    Forecast FCFF, final year
    SEK 8.2bn
    Capex at depreciation, working capital in reinvestment
    SEK 6.5bn
    Less reinvestment at g/ROIC (26.0% of NOPAT)
    SEK -1.7bn
    Capitalised
    SEK 4.8bn
    ROIC (reported)
    9.6%
    Terminal value, undiscounted
    SEK 112.3bn
    Terminal value, discounted
    SEK 83.2bn
    Enterprise value
    SEK 116.4bn
    Less net debt
    SEK 28.6bn
    Equity value
    SEK 87.8bn

    Exit at 11.0x EBITDA

    Value per shareSEK 166.75

    77% of EV

    Terminal value, undiscounted
    SEK 150.6bn
    Terminal value, discounted
    SEK 111.6bn
    Enterprise value
    SEK 144.8bn
    Less net debt
    SEK 28.6bn
    Equity value
    SEK 116.2bn

    Spread between methods: 28%.

    Sensitivity

    Value per share (SEK) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.90%198.87218.96247.28290.31363.87
    5.90%148.38157.39168.93184.32205.99
    6.90%116.48120.80126.02132.48140.74
    7.90%94.4596.5098.85101.62104.94
    8.90%78.3079.1480.0681.0882.22

    Outlined: this model. Green text: above today's price of 168.50. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year2.1%7.2%+5.2pp
    EBIT margin20.3%26.9%+6.5pp
    Discount rate6.9%5.9%-1.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.