Eltel

October-December 2024

• Net sales EUR 226.1 million (240.2), a decrease of 5.9%, mainly due to the divestment of High Voltage Poland. Organic growth1) was -2.0%, and organic growth in segments was 0.0%
• Adjusted EBITDA EUR 14.2 million (10.2)
• Adjusted EBITA2) EUR 5.7 million (2.8) and adjusted EBITA margin 2.5% (1.2)
• Adjusted EBITA2) in segments EUR 8.6 million (5.0) and adjusted EBITA margin in segments 4.0% (2.3)
• Items affecting comparability3) EUR -1.6 million (0.1)
• Operating result (EBIT) EUR 4.2 million (2.9) and EBIT margin 1.9% (1.2)
• Net result EUR 3.9 million (10.3)
• Earnings per share EUR 0.02 (0.06), basic and diluted
• Cash flow from operating activities EUR 38.9 million (39.8)

January-December 2024

• Net sales EUR 828.7 million (850.1), a decrease of 2.5%, mainly due to the divestment of High Voltage Poland. Organic growth1) was 1.8% and organic growth in segments was 1.5%
• Adjusted EBITDA EUR 45.2 million (31.8)
• Adjusted EBITA2) EUR 10.5 million (1.7) and adjusted EBITA margin 1.3% (0.2)
• Adjusted EBITA2) in segments EUR 21.1 million (11.8) and adjusted EBITA margin in segments 2.7% (1.5)
• Items affecting comparability3) EUR -28.5 million (-7.0)
• Operating result (EBIT) EUR -18.0 million (-5.3) and EBIT margin -2.2% (-0.6)
• Net result EUR -29.1 million (-7.6)
• Earnings per share EUR -0.21 (-0.07), basic and diluted
• Cash flow from operating activities EUR 27.5 million (34.0)
• Net debt EUR 114.0 million (100.6)

Significant events during and after the reporting period

• During the fourth quarter, Eltel signed new contracts with a combined value of about EUR 308.0 million (134.6) and the value of the total orderbook4) was EUR 1,220 million. Read more on page 13.
• On 15 January 2025, it was announced that Ingrid Therese Tjøsvold has been appointed Managing Director for Eltel Norway and member of the Group Management Team as of 10 February 2025.
• On 5 and 19 December, Eltel Sweden signed two contracts with the Swedish Transport Administration, with a total value of EUR 165 million. Both contracts have a maximum duration of seven years.
• On 20 December, it was announced that Eltel Finland and Telia in Finland have signed a three-year continuation of a current frame agreement worth about EUR 70 million.
• On 27 December, it was announced that Eltel Norway and Avinor have signed a new contract worth up to a total EUR 20 million for the entire contract period, including five optional years.
• On 6 February, it was announced that Eltel Finland has been selected by Taaleri Energia to construct and maintain the second largest solar park in Finland, with a contract value of EUR 73.5 million.

Key figures

1) Organic growth is adjusted for currency effects and divestments.

2) Eltel follows the profitability of segments with adjusted EBITA, which does not include restructuring costs and other items affecting comparability. Please see pages 25-26 for definitions of the key ratios.

3) See reconciliation of segment results on page 21 for more information.

4) Total orderbook includes the committed order backlog and the best estimate for uncommitted remaining parts of frame agreements until the end of the agreement.

Comments by the CEO

I'm very happy to see that our efforts to improve profitability continued to deliver in the fourth quarter, with the adjusted EBITA doubling, leading to a margin of 2.5% (1.2). Q4 2024 was the sixth quarter in a row with improved adjusted EBITA for Eltel compared to the previous year.

The organic net sales in the segments was flat, whereas the total net sales had a decline, mainly due to the divestment of High Voltage Poland.

In the quarter we had an increase in both net sales and profitability in Finland and Sweden, and a strong profitability improvement in Denmark, in spite of a decrease in net sales. Our focus on operational excellence contributed heavily to improving the profitability. Broadening our customer base, particularly in public infrastructure, as well as strong progress in new and adjacent business areas, such as Solar and battery storage, continued to yield positive results within both growth and profitability.

In spite of a continuous wait-and-see market, our customers' confidence in us remained strong and our sales efforts resulted in a total contract value increase to EUR 308.1 million (134.6) during the quarter. Our orderbook is now at EUR 1.2 billion and I'm very confident that our positive development will continue. Two proof points of our strategy working well are that the gross profit grew with 13% in Q4 and with 21% for the full year, and that our leverage improved to 2.5, which means that we have reached this target.

Finland showed a strong development, especially profitability wise. Adjusted EBITA improved by EUR 3.1 million to EUR 6.3 million (3.2) and the adjusted EBITA margin was 6.2% (3.3). The growth of 3.1% was driven by Communication and especially by our fiber-to-the-home business. Profitability improved also in Power, despite an expected slight volume decline caused by an updated market regulation effective from 1 January 2024. During the quarter, the first large scale solar park, as well as the first BESS (Battery Energy Storage System) project, were finalized. At the end of the quarter, a conditional agreement was signed with Taaleri Energia regarding a turnkey contract on a very large solar park. On 6 February, the conditions had been met and we received the start order to carry out the establishment. The contract, which has a value of approximately EUR 73.5 million, also includes a substation and connection to the national grid as well as operation and maintenance of the facility, confirming Eltel's unique position as a turnkey supplier.

Sweden doubled its adjusted EBITA during this tenth consecutive quarter of positive adjusted EBITA. Both Communication and Power contributed to the improved profitability, especially our Smart Grids business. The growth of 5.1%, 4.8% in local currency, this quarter was related to Communication, and in particular to public infrastructure, which really started to show results this quarter.

Norway continued to be burdened by lower customer investments in Communication, impacting the volumes negatively, resulting in a net sales of EUR 29.8 million (33.8). From 1 January we operate in the new organization structure. The focus on margins and profitability, rather than on volumes, is continuously strong and the activity level of broadening the customer base is high, although not yet compensating for the decline in Communication. I look forward to working together with our newly appointed Managing Director Ingrid Therese Tjøsvold and the Norwegian team to develop Eltel Norway.

In Denmark the volume shift from Communication to Power was reflected in net sales. Power had a very strong growth but did not compensate for the decline in Communication. I'm very pleased with the strong profitability improvement in Q4 with an adjusted EBITA margin of 8.1% (4.6), especially as both Communication and Power have contributed to the margin improvement.

To simplify our operational structure and leverage our Danish management, we will update our segment structure from 1 January 2025. The operations in Denmark and Germany will be presented in one segment named Denmark & Germany, headed by our current Managing Director for Eltel Denmark, Claus Metzsch Jensen. Smart Grids Germany has been presented outside segments under Other business until 31 December 2024. The remaining part of the Other business and Group Functions will be combined and named as Group Support Functions. Starting from 1 January 2025 the segments will be Finland, Sweden, Denmark & Germany and Norway.

I want to thank all customers, colleagues, partners and investors for good collaboration and a productive 2024, where we've taken many important steps towards transforming the company. With an engaged and commercially oriented organization and a strong order book, I'm confident that we will make significant progress in 2025.

Håkan Dahlström, President & CEO

For further information, please contact:

Tarja Leikas, CFO

Phone: +358 40 730 77 62, tarja.leikas@eltelnetworks.com

Alexandra Kärnlund, Director, Communications

Phone: +46 70 910 0903, alexandra.karnlund@eltelnetworks.com

This information is information that Eltel AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on 14 February 2025.

About Eltel

Eltel is the leading service provider for critical infrastructure in the Nordics.  In total, we have about 4,500 employees and in 2024 the annual sales was EUR 828.7 million. The head office is located in Sweden and Eltel's shares have been listed on Nasdaq Stockholm since 2015. Read more at www.eltelnetworks.com.