Tele2 released new targets for profitability, in a presentation to investors at its capital markets day. Tele2 said that core businesses are now defined as those achieving an EBITDA margin of 20 percent or more. The company last reported a group EBITDA margin of 23.1 percent for the first half of 2009, up from 19.4 percent a year earlier. Most of its mobile and fixed telephony operations were performing ahead of the 20 percent target, while fixed broadband lagged the mark. Mobile operations running on their own infrastructure should target a margin in the mid-30s or higher over the long term, Tele2 said. For the entire group, Tele2 aims for a return on capital employed of 20 percent, which it said emphasizes a focus on cost control and optimal use of capital. The ROCE was at 17.9 percent in H1 2009 and 12.8 percent in all of 2008. The company did not say when it expects achieve all the targets. Lars Nilsson, CFO of Tele2, said in a statement: "We need to continuously raise the bar for our company and set demanding targets that challenge our organization and keep us on our toes. I believe that this shows our shareholders and lenders that Tele2's house is in order and that we have a solid operational foundation to leverage on in the future."
