Annual Report
2023
Transforming how
we power and
connect the world
As the leading service provider of critical infrastructure,
Eltel is at the epicenter of driving the electrification and
digitalization of society. We design, build, service and
maintain the communication and power infrastructure
that society depends on.
Eltel and the world around us
The year in brief 3
Eltel in brief 4
We are Eltel 5
CEO’s review 6
Values 8
Strategy 9
Market trends 10
Outlook and opportunities 11
Our operations
Services
– Communication 12
– Power 13
Segments
– Eltel Finland 14
– Eltel Sweden 15
– Eltel Norway 15
– Eltel Denmark 16
– Other business 16
Sustainability
Highlights 2023 17
Our global commitment 19
Eltel’s sustainability framework 20
Health and safety 22
Climate and Environment 23
Our people 24
Responsible procurement 25
Business ethics 26
Progress on SBTi targets 27
EU taxonomy 28
Board of Directors’ report 34
Risk Management 37
Corporate Governance report 41
Board of Directors 46
Group Management Team 47
Financial reports
Consolidated financial statements 48
Notes to the consolidated financial statements 53
Parent Company financial statements 79
Notes to the Parent Company financial
statements
82
Auditor’s report 86
Other information
The Eltel share 91
Five-year summary 93
Quarterly figures 94
Definitions and key ratios 96
Contact information and financial calendar 97
Contents
Eltel Annual Report 2023 • 2
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 2
2023 Highlights
Investments in new business areas
We made new investments in our capabilities in the
areas of e-Mobility, energy storage and solar. These
investments helped us to grow our pipeline and win new
agreements during the year.
Employee engagement survey results
Eltel’s Employee Engagement Score improved for the
fourth year in a row, to 3.9 (3.8), while the survey partic-
ipation rate increased to 85% (75).
Expansion into to solar PV market
We won solar park projects in Finland and Denmark. The
largest project was a 10 MW park for the energy company
Helen in Lohja, Finland.
Restructuring and re-shaping our business to
meet future business needs
Our restructuring and cost-savings programs implemented
during the year helped to optimize our business, reduce
costs and better meet the shifting customer demand.
Our new values
We developed new company values during the year
together with our colleagues. The values are aligned with
our vision and strategy and will shape our culture, behavior
and decisions going forward.
The year in brief
KEY FIGURES
850.1
714.0
5,024
1.7
0.2
Net sales, EUR million
Signed contracts,
EUR million
Average number of
employees
Adjusted EBITA,
EUR million
Adjusted EBITA
margin, %
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 3
Eltel in brief
Eltel is the leading service provider for critical
infrastructure that enables renewable energy
and high-performing communication networks.
Within business area Communication, Eltel
establishes networks and supports the societal
need for greater digitalization. We provide
design, installation, upgrades and services to
mobile and fixed communication networks.
Within business area Power, Eltel enables
the transmission of renewable energy and the
electrification of society. We provide mainte-
nance and upgrades to power distribution and
transmission, smart grids and turnkey solutions
in e-Mobility, solar photovoltaic, wind energy
and battery energy storage systems.
Eltel operates in the Nordic countries, Poland,
Germany and Lithuania within country-based
organizations that have full responsibility for
their own financial result.
93.0
130.1
198.5
344.5
Net sales, EUR million
Net sales, EUR million
Net sales, EUR million
Net sales, EUR million
511
860
988
1,503
Average number of employees:
Average number of employees:
Average number of employees:
Average number of employees:
93.7
Net sales, EUR million
995
Average number of employees:
OTHER BUSINESS
DENMARK
NORWAY
SWEDEN
FINLAND
BUSINESS AREAS PRODUCT AREAS OFFERING MARKETS CUSTOMERS NET SALES 2023
Communication
Market leader in the Nordic
region and Lithuania.
›› Read more about our communi-
cation services on page 12.
• Fixed telecom
• Mobile telecom
• Fixed wireless access
(FWA)
• Mobile indoor
• Design, installation,
upgrading and servicing
• The Nordics
• Lithuania
• Telecom operators
and network owners
• Local industrial
customers and
the public sector
Power
A key player in the Nordics, Poland.
A niche player in Germany.
›› Read more about our power
services on page 13.
• Power distribution
and transmission
• Smart grids
• e-Mobility
• Renewable energy
• Design, build, mainte-
nance, upgrades and
turnkey solutions
• The Nordics
• Poland
• Germany
• Lithuania
• Network operators
• Local industrial
customers and
the public sector
• Utility companies
39%
61%
Eltel Annual Report 2023 • 4
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
We are Eltel
Eltel is the leading infrastructure and service provider for
critical communication and power networks – infranets.
Transforming how we power
and connect the world
Everyone depends on stable communication and power
networks. Eltel designs, builds, maintains and upgrades
these critical lifelines of modern society for national
network operators and owners.
We enable a more sustainable society
The infranet solutions that Eltel provides enable the
transition to a robust, resilient and carbon-neutral society.
For example, Eltel delivers infrastructure that allows
renewable energy generation, electric vehicle charging
and high-capacity communication networks. This infra-
structure enables the electrification and digitalization of
society, as well as new ways of living and interacting.
Our services and offering
Eltel delivers a comprehensive range of communication
and power services – everything from the design and
build phase to corrective maintenance – primarily for the
owners of communication and power networks. We offer
a 24/7 and extensive geographical presence in our home
markets.
Our communication and power services are beco-
ming increasingly intertwined as we draw on synergies
between our communication and power capabilities to
deliver solutions that combine both. We are offering more
projects related to renewable energy, energy storage,
electric vehicle charging and public infrastructure.
Most of our work is conducted through long-term
framework and service agreements that enable us to
collaborate with customers to achieve their objectives.
Eltel also provides services through projects and other
business models. Our business strategy focuses on
delivering on our customer promises, streamlining our
operations and improving productivity. Read more about
our strategy on page 9.
WHY INVEST IN ELTEL?
We enable communication and power networks for a
more sustainable and connected world – today and
for future generations. Our services make society more
robust with a well-managed and state-of-the-art
communication and power infrastructure.
• We are the market leader
• Market trends support the future growth of our
business
• We enable a more sustainable society and minimize
our climate impact by setting science-based targets
• We focus on operational excellence, cost efficiency
and sustainable profitable growth
• We have a customer-focused mindset
• We enable cross-border synergies
Eltel Annual Report 2023 • 5
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
New strategy shows
early progress and the
way forward for Eltel
Eltel’s President and CEO Håkan Dahlström reflects
on the first year of the company’s new strategy
toward sustainable and profitable growth.
Hi Håkan. Please tell us about the new strategy.
Launching our new strategy at the beginning of 2023
was an important milestone for Eltel as it describes our
way forward in terms of expanding into adjacent new
markets and broadening our customer base in our classic
business. Creating opportunities in new markets such as
solar PV, e-Mobility and battery energy storage systems
is a key part of our strategy and it was great to see us
delivering on our new strategy, such as by winning our
first utility scale solar park project.
How is Eltel driving its new strategy?
All of our colleagues play their part in realizing our new
strategy, but importantly we established a new Group
Business Development team in early 2023 to help share
knowledge and experience between our Country Units.
The team not only functions as a cross-border knowledge
network, it also promotes more sustainable solutions and
Nordic cross-border collaboration, which is unique in
our industry.
Eltel Annual Report 2023 • 6
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
We achieved mixed
results in 2023 but
enjoyed good overall
top-line growth for the
Group.
our first large-scale solar park. Sweden achieved solid
organic growth, particularly in its smart meter installa-
tion. Norway had to restructure its business in 2023 but
growth markets included fixed wireless access, 5G and
mobile indoor coverage, as well as e-Mobility and offshore
communications. Denmark won a wide range of new
projects, including a substation for a large solar park and
mobile communication solutions for sports arenas.
How did Eltel’s “Other business” units perform?
Importantly, for the first time in recent years, Poland was
in the black in Q3, after refining its strategy and tendering
procedures, which gives hope for the future. Our busi-
ness in Lithuania was negatively affected by the reduced
need for its cross-border workforce in Norway, but local
management worked hard to identify more opportunities
in the local market to ensure a positive result. Despite sig-
nificant disruption in gas adjustment roll-out in Germany
that was beyond our control, our local team managed the
situation well and our projects restarted in Q1 2024.
What progress was made with the restructuring
and cost-savings program in 2023?
The restructuring and cost-savings program we imple-
mented during the year was necessary to better meet
shifting customer demand and reduce costs. Unfortu-
nately, it meant that we had to reduce our workforce by
220 employees – mainly in Norway and Finland. While it is
always regrettable to have to let go of skilled colleagues,
this restructuring was necessary in order to achieve our
strategic objectives.
What new and adjacent markets did Eltel move
into during the year?
We are accelerating new business opportunities in the
sustainability transition, particularly in solar PV and
e-Mobility, which are being driven by the megatrends of
electrification and digitalization. Battery energy storage is
another growing market, although wind energy opportu-
nities were limited during the year. Private networks and
mobile indoor also represent a new segment that involves
delivering advanced technological solutions for public
and private sector customers.
How is Eltel broadening its customer base?
By addressing a broader customer base to include
public and private sector customers that are not network
owners or operators as in our classic business, we can
create greater flexibility and more stable volumes. This
is another important part of our strategy going forward
that will enhance our competitiveness, drive growth and
improve our margin.
Tell us about Eltel’s new values.
As our new strategy involves far greater cross-border
collaboration on new types of offerings, it was necessary
to ensure we have common values that reflect our new
way of working. I was pleased that many of our colleagues
accepted our invitation to provide input and contribute
to the development of our new values. We launched our
values in early February 2024 and have been well received
by our colleagues.
How have you tackled challenges during the year?
Like many businesses, Eltel was affected by inflation
and cost increases during the year. But we began to see
the positive effects of the indexes included in customer
contracts in 2022 that partly compensate for inflation
and cost increases on our framework agreements. By
including indexes and renegotiating multiple customer
contracts, we were able to compensate for around
two-thirds of the financial impact of inflation and cost in-
creases. We continue to work with operational excellence
and greater efficiency in order to compensate for the
remaining impact.
How is sustainability shaping Eltel’s business?
Eltel experienced increased sustainability expectations
from our customers in 2023. As a sustainability leader in
the industry with sustainability as a part of everything we
do, we welcome this development as it gives us a com-
petitive edge. Climate action is the main sustainability
driver and more than 60% of our customers already have
their climate targets approved by the Science Based
Targets initiative (SBTi). Eltel’s SBTi-approved climate
targets make us an attractive partner that can help our
customers achieve their climate ambitions.
Do you have any final remarks?
I would like to express my gratitude to our customers,
owners and investors for continuing to put their confidence
and trust in Eltel. I look forward to continuing to create new
opportunities together.
I would also like to express my gratitude to our people,
who have had a great mindset over the past year. Our
people have adapted well to our new strategy, which
involves developing both our classic and new businesses
in parallel. I understand how these changes may have
been challenging for some of our colleagues. However,
I believe we have created a solid foundation that we can
build on in the coming years as we strive toward sustain-
able and profitable growth.
Born: 1962
Experience: Former CEO of Fujitsu Sweden,
management positions at TietoEvry and Telia Group,
and a member of Eltel’s Board of Directors 2017–2022.
Lives: Stockholm.
Family: Wife, three children and a dog.
Motto: Engaged employees and satisfied
customers deliver profitability
HÅKAN DAHLSTRÖM FACTS
How would you summarize Eltel’s
financial performance in 2023?
2023 started with strong headwinds and ended in a solid
recovery during the second half. We achieved mixed
results in 2023 but enjoyed good overall top-line growth
for the Group.
Sweden continued its solid financial improvements and
Denmark made a fantastic comeback with great top-line
development growth after a couple of challenging years.
Due to a couple of problematic contracts in Finland and
lower volumes than expected in Norway, both Country Units
had a difficult start to the year. However, the second half of
the year improved as our proactive actions took effect.
What were the key developments in
Eltel’s different Country Units in 2023?
Overall, we had lots of positive developments and
customer dialogue in all markets when it comes to new
business opportunities, and we have a healthy pipeline
of projects for 2024.
Finland made a positive increase in sales growth
in several key markets, such as in FTTH and we won
Eltel Annual Report 2023 • 7
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Always professional
We have earned the trust of society thanks to our vast
knowledge of the industry and our track record of never
compromising on safety and quality. Staying close to
our customers and partners allows us to be responsive
to their needs in a holistic way. This is an important part
of our history that we are proud of and intend to uphold.
Regardless of role or situation, we always do our best to
meet our commitments and deadlines.
Care for life
Safety first is how we work in all aspect of our business.
We take care of each other, follow safety guidelines, and
have the right equipment on hand to ensure that everyone
returns home safely every day. Together we foster a
good work environment and strive for a healthy work-life
balance. Care for life also means that we are responsible
for our contribution to the planet, the climate and the
environment. We have ambitious sustainability targets and
are committed to take the lead in the green transition.
Combine strengths
By combining our skills, strengths and perspectives we
achieve the ultimate teamwork, which makes us succeed
in a competitive market. Inclusion is our way of working
because we know the importance of diversity to make
a difference. Our collaboration is built on respect and
curiosity towards each other, our customers and our
partners. With an open culture of giving and receiving
feedback we will continuously improve both our business
and ourselves. We always strive to work across teams,
business areas and countries where we possess an
endless source of knowledge sharing.
Our values
Eltel developed new company values
in 2023 together with our employees.
Our values are aligned with our vision
and strategy and will shape our culture,
behavior and decisions going forward.
All Eltel employees were invited to contribute to the crea-
tion of our new values to ensure they were truly represen-
tative of the Eltel culture and our 5,000 employees. Our
new values unite Eltel’s diverse strengths that are rooted
in shared values that reflect our collective vision for the
future and ensure we act cohesively and with a clear
direction. Our values will inspire us and allow us to create
our own distinct niche in the sector.
Create opportunities
The world is constantly changing and we believe that
challenges and opportunities go hand in hand. That is
why we are proactive and spur ourselves, our collea-
gues, partners and customers to go further and beyond
expectations. We enjoy thinking ahead and are always
curious to explore the optimal way to get the job done.
We drive development in both a profitable and sustain-
able manner. Our customers rely on us to challenge
them, even when the status quo is more convenient.
Eltel Annual Report 2023 • 8
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Our strategy –
towards sustainable
profitable growth
Eltel’s strategy outlines how the company
will achieve its long-term targets and
build the foundation for sustainable
profitable growth by the end of 2025.
Long-term value creation
Through the successful implementation of its strategy,
Eltel will continue to develop, grow and invest – to ensure
long-term value creation for the company, its shareholders
and society at large.
Based on the strategy, each Country Unit creates
an annual business plan that describes how they will
develop their business and contribute to their targets.
The strategy is about increasing sales in adjacent
markets and expanding our customer base in all areas,
including increasing our profit margin at the same time
giving value to our customers.
Always connected,
always powered – we make it
happen by transforming society
for a sustainable future.
• Expand our customer base
• Growth in current business offering – power and communication
• Growth in new business offerings – renewable energy,
mobile indoor and fixed wireless access (FWA)
• New business models
• Drive efficiency
• Integrate sustainability into our operations
• Develop our mindset and proactivity
Create
opportunities
Dedicated people Brilliant planning
& execution
Valuable customers
& partners
Always
professional
Care for life Combine
strengths
VISION
WHERE
TO PLAY
HOW TO
PLAY
FOCUS
AREAS
VALUES
Eltel Annual Report 2023 • 9
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Ageing and weak
power infrastructure
Changing consumption
behavior
Increased use of
renewable energy
Increased demands for
delivery reliability
Transition to smart energy
and digital solutions
• Current networks are approaching
their end of life
• Growing need to upgrade public
infrastructure
• Increased digitization, hybrid
working and data usage
• Electrification of society
• Demand for Renewable Energy
Sources (RES)
• EU targets for minimum broadband
capacity and availability
• Demand for reliable power networks
and RES
• Mandatory automated meter
management
• Networks are under pressure
to deliver reliable and affordable
energy
Trends transforming
the infranet sector
The megatrends of digitalization, elec-
trification, hybrid working and climate
change are driving the demand to
install, upgrade, maintain and secure
communication and power networks.
Meeting societal demands for sustainable
energy and digitalization
Infranets are increasingly essential lifelines for modern
society that meet the everyday needs of businesses
and individuals.
Power and communication networks also enable a more
sustainable and low-carbon society. They provide the
infrastructure for electric vehicles and renewable energy
generation, as well as build communication networks
that support hybrid working and the digitalization
of society.
Market trends shape our sector
Below are summarized the key market trends, how
they impact the sector and how the infranet sector
is responding.
IMPACT ON THE SECTOR SECTOR RESPONSE
• Communication infrastructure
upgrades
• Investments in power networks
and infrastructure
• Infrastructure upgrades
• Network investments
• Investments in wind and solar
energy and Battery Energy
Systems (BESS)
• Network investments in load
management
• Network and capacity upgrades • Fiber rollout
• Network investments in improved
operations
Eltel Annual Report 2023 • 10
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Good potential
growth across
our offering
Our home markets are stable with good opportunities for future growth. We continuously
monitor market trends and our operating environment to identify and adapt to potential
challenges and opportunities in our business strategy. Sustainable energy and digitalization
continue to be increasingly important for both customers and end users.
Mobile indoor
Mobile indoor and private 5G networks are becoming an
important part of Eltel’s offering. This includes both public
and private mobile indoor infrastructure solutions.
Power distribution and transmission
The demand to upgrade aging power infrastructure
remains strong. A significant driver for upgrading regional
networks is the need to integrate renewable energy sour-
ces and electric vehicle charging stations into the electricity
grid. Eltel also enables customers to electrify their industrial
operations and shift away from the use of natural gas.
Fixed wireless access (FWA)
FWA services will continue to grow, and we are also
increasingly delivering services related to private
networks. These local networks can ensure good 5G
coverage throughout buildings.
Smart grids
The demand for smart grids continues in markets such
as Germany and Sweden, where we have major ongoing
rollouts. In Finland, we have a good order backlog.
Renewable energy, e-Mobility and
battery energy storage
The demand for renewable energy and electric vehicle
charging infrastructure is strong in all our geographic mar-
kets. Along with battery energy storage, these areas will be
important growth drivers for Eltel in the coming years.
Mobile telecom
Eltel is a frontrunner in the large 5G mobile communication
market in the Nordics. 5G is expected to be a growth mar-
ket in the coming years as deployment continues, along
with the need to densify and further enhance the network.
Cross-border synergies
There are increasing opportunities for Eltel Country Units to
collaborate and offer customer agreements that cover mul-
tiple countries. Eltel’s different units share knowledge and
experience, which benefits existing customers and drives
new opportunities in e-Mobility and battery energy storage.
Fixed telecom
Fiber penetration is high in Sweden and Norway but
remains an important growth area for our businesses in
Finland and Denmark. There will be increasing opportu-
nities to renew and upgrade existing fiber networks in the
Nordics as we expand our customer base toward more
public infrastructure entities.
Eltel Annual Report 2023 • 11
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Our Communication
product areas
Fixed telecom – network construction
and maintenance, FTTH rollouts
Mobile telecom – rollouts, upgrades
and corrective maintenance
Fixed wireless access – connecting
homes and businesses to the internet
Mobile indoor providing public and
private networks
Our main customers are large telecom
operators and communication network
owners. Eltel’s operations mainly involve
long-term relationships with a steady
inflow of orders generated by framework
agreements. Eltel also offers new
business models, including as-a-service
models, and is expanding its offering in
the value chain.
Communication
We optimize communication networks and help
meet societal needs for greater digitalization,
which is revolutionizing how people live, work
and play.
Modern and high-capacity communication networks support the
digitalization of society and enable people to interact in new ways.
This reduces the need to travel by enabling hybrid working and
creates new opportunities for individuals and businesses.
COMMUNICATION OPPORTUNITIES
• 5G
• Fixed Wireless Access (FWA)
• Public and private mobile indoor
infrastructure solutions
• Fiber in Finland and Denmark
• Data centers
• Public infrastructure
Eltel Annual Report 2023 • 12
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Our Power
product areas
Power distribution and transmission –
full turnkey high-voltage projects, network
construction, upgrades and maintenance
Smart grids – rollout services for
next-generation power meters
Renewable energy – solutions for wind
power and solar parks
e-Mobility – electric vehicle charging
infrastructure
Battery energy storage – energy
storage projects
Primary customers include national
transmission system operators, owners
of power distribution grids and utility
companies. We also have local industrial
companies and the public sector as
customers.
Power
Our power services enable the electrification
of society, which is essential for building more
sustainable energy solutions and achieving
national carbon-neutrality goals.
A resilient and robust power infrastructure allows renewable energy
generation, electric vehicle charging and the smarter use of electricity.
These are all building blocks for a carbon-neutral society.
POWER OPPORTUNITIES
• Network capacity upgrades
• e-Mobility charging infrastructure
• Renewable energy and battery
energy storage solutions
• Ongoing smart meter roll outs
Eltel Annual Report 2023 • 13
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Our segments
Eltel has a decentralized country-based organization with Country
Units that have full responsibility for their own financial result. Our
Country Units ensure our business has the capabilities and flexibility
to meet the specific needs of their local market.
Eltel Finland
Eltel Finland is Eltel’s largest Country Unit and offers the
most equal combination of power and communication
services in the Group. The Country Unit succeeded in
expanding its communication business during the year.
KEY DEVELOPMENTS IN 2023
• Framework agreement with Telia worth EUR 30.0 million.
• EUR 23.0 million project for the Fingrid Järvilinja 4
transmission line.
• Doubling of sales in FTTH and tripling of sales in
e-Mobility.
• New industrial services business area established to
help customers electrify their operations.
• Continued improvement in Finland’s employee satis-
faction survey results over the past three years.
• Record low Lost Time Injury Frequency Rate 1.9 per
million hours worked.
TOP PRIORITIES IN 2024 AND BEYOND
• Increased profitability.
• New solar park contracts.
We won and started work on our first utility-scale
solar park and grew in the fiber-to-the-home (FTTH),
industrial services and renewable energy markets to
boost our overall net sales by 18.7% during the year.
– Juha Luusua, Managing Director, Eltel Finland.
NET SALES 2023
344.5
EUR million
l Communication
l Power
FINANCIAL PERFORMANCE
2023 2022
Net sales (EUR million) 344.5 290.1
Adjusted EBITA (EUR million) 6.5 8.2
Adjusted EBITA margin (%) 1.9 2.8
Number of employees, average 1,503 1,498
FINLAND
Finland
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The demand for classic fixed telecom stabilized
during the year, but we saw growth in fixed wireless
access, 5G and mobile indoor coverage, as well as
e-Mobility and offshore communications. We expect
our future business to be driven by growth in areas
such as e-Mobility, solar PV projects, battery energy
storage and data centers.
– Thor-Egel Bråthen, Managing Director, Eltel Norway.
Eltel Norway
Eltel is the Norwegian market leader in the communication
market. The business was restructured in 2023 to ensure it
can meet the future needs of its growing customer base.
KEY DEVELOPMENTS IN 2023
• Major existing Telenor framework agreement worth
EUR 70-90 million extended.
• New framework agreement with Viken Fiber worth
EUR 17-19 million to deliver fixed wireless access.
• New framework agreement with Equinor worth EUR
20 million to deliver telecom-specific upgrade and
modification services.
• Growth in the offshore radio link communications market.
• New taskforces established to work with e-Mobility,
solar and mobile indoor.
• New team dedicated to mobile indoor that delivered
several projects.
• Maintained good engagement score in Norway’s
employee survey.
TOP PRIORITIES IN 2024 AND BEYOND
• Focus on continued growth – including both existing
and new customers.
• Strengthen project management and innovation with a
focus on new product areas.
NET SALES 2023
130.1
EUR million
l Communication
l Power
FINANCIAL PERFORMANCE
2023 2022
Net sales (EUR million) 130.1 176.8
Adjusted EBITA (EUR million) -2.5 2.1
Adjusted EBITA margin (%) -1.9 1.2
Number of employees, average 860 938
NORWAY
Eltel Sweden
The communication business drives the Country Unit
although power services were expanded in 2023 within
smart grids and developing opportunities in e-Mobility,
energy storage and solar power.
KEY DEVELOPMENTS IN 2023
• Eltel Sweden improved its profitability during the year.
• EUR 27 million Swedish defense telecommunications
maintenance contract won.
• Launch of incubator to drive e-Mobility, battery energy
storage and solar opportunities.
• Ramp up of smart meter installation projects.
• Improvements in all KPIs in the employee satisfaction
survey completed by 94% of employees.
TOP PRIORITIES IN 2024 AND BEYOND
• Secure continued organic growth in communication.
• Capitalize on significant opportunities within power.
We enjoyed solid organic growth during the
year and further improved our level of customer
service and quality. Investments were made in
new business areas and we expanded our power
offering, for example, through our new renewable
energy incubator.
– Lars Nilsson, Managing Director, Eltel Sweden
NET SALES 2023
198.5
EUR million
l Communication
l Power
FINANCIAL PERFORMANCE
2023 2022
Net sales (EUR million) 198.5 193.8
Adjusted EBITA (EUR million) 2.9 -1.0
Adjusted EBITA margin (%) 1.5 -0.5
Number of employees, average 988 919
SWEDEN
Sweden
Norway
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Eltel Denmark
Denmark has the most diversified customer base – deliv-
ering communication projects for the national rail network
and emergency services, and renewable energy and
electric charging systems for buses and trucks.
KEY DEVELOPMENTS IN 2023
• EUR 3.0 million project for the Ølgod Solar Park.
• EUR 9.7 million TDC Fiber contract.
• Good customer satisfaction and employee net
promoter scores.
• Low lost time injury frequency rate (LTIFR) of five per
million hours worked.
• Around 100 new employees were hired to meet the
unit’s business growth needs.
TOP PRIORITIES IN 2024 AND BEYOND
• Grow in new markets.
• Process improvements.
• Continued leadership development.
2023 was an amazing year for us with 25.3% net
sales growth, happy customers and engaged
employees. We won a broad range of new
contracts – from mobile communication solutions
for sports arenas and hospitals to power upgrades
for industry, rail signaling and a large solar park.
– Claus Metzsch Jensen, Managing Director, Eltel Denmark.
NET SALES 2023
93.0
EUR million
l Communication
l Power
FINANCIAL PERFORMANCE
2023 2022
Net sales (EUR million) 93.0 74.3
Adjusted EBITA (EUR million) 4.9 0.6
Adjusted EBITA margin (%) 5.2 0.9
Number of employees, average 511 484
DENMARK
Other business
Eltel’s “Other business” includes a project-based High
Voltage business in Poland, a Smart Grids business in
Germany, and a Communication business in Lithuania.
POLAND
Eltel’s business in Poland offers customers a wide range
of design, construction and maintenance services for
power transmission lines, substations and other electrical
industrial installations on low, medium and high voltage.
Eltel also uses its Polish technicians in other Country
Units.
GERMANY
In Germany, Eltel installs water, gas and electricity meters
and conducts gas adjustment services that are required
in the ongoing switch from low-calorific gas (L-Gas) to
high-calorific gas (H-Gas).
LITHUANIA
Eltel’s business in Lithuania is focused on communication
and the installation of fiber and 5G for telecommunica-
tions operators and e-Mobility. We are also active in the
solar photovoltaic market.
OUR CROSS-BORDER WORKFORCE
Eltel has two highly skilled cross-border workforces that
provide flexibility to other parts of the business. One
workforce comprises high-voltage transmission technicians
based in Poland and the other workforce comprises
communications technicians based in Lithuania.
Denmark
Eltel Annual Report 2023 • 16
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Sustainability
Eltel manages its sustainability impacts by making health and safety a top priority,
reducing climate and environmental impacts, creating good work environments for
its employees, and promoting responsible procurement and business ethics.
For Eltel, sustainability is about delivering lasting financial,
social and environmental value to its stakeholders and
society at large. We achieve this through our business
and by enabling the transition to a robust, resilient and
carbon-neutral society.
SUSTAINABILITY HIGHLIGHTS 2023
• Improved Employee Engagement Survey score and
participation rate.
• Improved customer engagement and cooperation on
sustainability; Eltel was recognized by customers for its
sustainability leadership in the industry.
• Eltel’s first Group-wide EcoVadis assessment was
awarded bronze.
• Implemented a sustainability-linked finance framework.
• New Sustainability Policy, Human and Labor Rights
Policy, and Environmental Policy.
KEY FIGURES
2.7
302
3.9
56%
85%
16%
Lost Time Injury Frequency
Rate (LTIFR) per million
hours worked.
Number of electric vehicles
in fleet increased from 108
during 2023.
Employee engagement
score (3.8).
renewable electricity (Scope
2 target: 100% by 2030).
of employees participated
in the Eltel employee
engagement survey (75).
of supply chain emissions
covered by science-based
targets. (Scope 3 target:
67.4% of suppliers have
SBTs by 2026).
B 100% 79%
scored in CDP Climate
Change and C- in
CDP Water.
All CUs continue to hold
ISO 9001, ISO 45001 and
ISO14001 certification.
completed the Eltel Code
of Conduct training.
Eltel Annual Report 2023 • 17
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Sustainability progress in 2023
Overcoming sustainability challenges
AREA CHALLENGE ELTEL’S RESPONSE
Health and safety Working with suppliers and subcon-
tractors to ensure they understand
and comply with the proper health and
safety practices at all times.
Training and controls to ensure compli-
ance with correct procedures among our
suppliers and subcontractors.
Vehicle emissions Availability and technological constra-
ints related to switching to electric
vehicles and the cost of biofuels.
Country-specific roadmaps for the
deployment of electric vehicles and the
use of biofuels, alongside overall fleet
optimization strategies.
Supply chain
sustainability
Insufficient ability to ensure supply
chain sustainability.
Focus on Eltel’s supply chain partners
with the highest emissions and ESG risks.
Launched a dedicated Supplier Code of
Conduct to provide clearer guidelines for
suppliers and subcontractors.
Corporate Sustainability
Reporting Directive
(CSRD) requirements
Ensuring Eltel meets the new CSRD
requirements.
Introducing the necessary governance,
IT and reporting structures. We will draw
on this data to further develop and better
manage sustainability going forward.
Employees With employees out on site all day
working on various projects, engaging
with them and keeping in contact can be
challenging.
Regular team meetings, townhall meetings
via Teams, videos to employees from the
CEO, and intranet communication.
Sustainability-related work is an ongoing process in any
organization. New regulations, geopolitical changes and
safety risks are some of the factors that constantly pre-
sent challenges for an organization such as Eltel, which
has high ambitions in all aspects of sustainability. By
developing clear responses to these challenges, we
learn, reduce risks and continue to improve.
Improved Employee Engagement Survey score and
participation rate Eltel’s Employee Engagement Score
improved for the fourth year in a row, to 3.9 (3.8), while
the survey participation rate also increased to 85% (75).
A sustainability-linked finance framework was
established to connect financing with our science-based
climate targets. In April 2023, Eltel issued its first sustai-
nability-linked hybrid capital securities.
We initiated a double materiality assessment to
comprehensively evaluate the scope and likelihood of our
organization’s sustainability impacts, risks and opportu-
nities. The assessment will be concluded in 2024 to meet
the new EU Corporate Sustainability Reporting Directive
(CSRD) requirements.
New policies were adopted following a comprehensi-
ve policy review. Our new Sustainability Policy outlines
our sustainability objectives and clearly defines sustai-
nability management roles and responsibilities. A new
Environmental Policy, Human and Labor Rights Policy,
and Supplier Code of Conduct further enhanced our
sustainability framework.
New environmental, social and governance (ESG)
platform introduced to harmonize Group-wide supply
chain management and data collection.
Eltel Annual Report 2023 • 18
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Our global commitment
Eltel has a long-term commitment to several global sustainability
initiatives. Our commitment, together with stakeholder dialogue on
relevant topics, shapes our strategic decision making, and provides
a roadmap for creating more value as a partner, employer and
investment opportunity.
Our external commitments are essential to improve trans-
parency with stakeholders and help us to develop our
understanding of the sustainability impacts our business
has on the world.
Science Based Targets initiative (SBTi)
Eltel has three climate targets for 2030 that have been
approved by the SBTi (read more on page 27).
CDP – climate change and water
Eltel has reported to the CDP climate change program
since 2016 and to the CDP water program since 2023.
RESPONSIBLE EMPLOYER
Eltel provides fair and decent work for
its own employees and the employees
of its supply chain partners, promotes
health and safety, and supports work-
place diversity and gender equality.
SUSTAINABLE COMMUNITIES
Eltel constructs and maintains infra-
nets that are increasingly essential
for the needs of businesses and
individuals.
CLIMATE AND THE ENVIRONMENT
The infranet solutions Eltel provides
enable the transition to a robust,
resilient and carbon-neutral society.
Eltel also works actively to reduce the
climate impact of its own operations
and aligns its business with circular
economy principles, efficient waste
management and responsible material
sourcing.
Sustainable Development Goals
The United Nations Sustainable Development Goals (SDGs) provide
a roadmap for how we can collectively work to overcome the global
challenges related to economic, social and environmental sustainability.
Eltel supports all the SDGs, but as a sustaina-
bility leader in the infranet industry, we believe
we can make the greatest contribution to
seven of the goals under the broad themes of
“responsible employer”, “sustainable commu-
nities” and “climate and the environment”.
UN Global Compact
Since 2014, Eltel has been a signatory to the UN Global
Compact and its ten principles on human rights, labor,
the environment and anti-corruption. The principles are
embedded in our strategy, policies and procedures, and
related processes.
EcoVadis
In 2023, the entire Eltel Group was rated by EcoVadis
for the first time. We were awarded bronze for our work
on the environment, labor and human rights, ethics and
responsible procurement.
Eltel Annual Report 2023 • 19
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel’s sustainability framework
TOPIC AFFECTED STAKEHOLDERS TARGETS RISKS MITIGATING ACTIONS
Health and safety
Employees, subcontractors • LTIFR = 0 by 2025
• Short-term sick leave < 3.0 % by 2025
• Zero fatalities
Following an assessment, Eltel defined its most salient health and safety risks
for employees and subcontractors working on Eltel’s sites as electrical safety,
working at height, managing ageing infrastructure and road safety.
• Certified occupational health and safety management system for continuous
improvement covering all employees and sites.
• Global tool for employees and subcontractors to record their safety obser-
vations, incidents, accidents, near misses and potential incidents.
• Management safety walks and on-site health and safety inspections.
Climate and
environment
Environment, suppliers SBTi targets:
• Reduce absolute scope 1 GHG emissions by
42% by 2030
• Increase sourcing of renewable electricity
from 31% to 100% by 2030
• Suppliers representing 67.4% of Eltel’s Scope
3 emissions have set their own science-based
climate targets by 2026
Eltel is exposed to transition climate risks, including higher material costs,
additional expenses, or potential supply chain disruption resulting from more
stringent policies and changing market demand patterns. Physical climate risks
include designing and maintaining communication and power infrastructure
affected by more extreme weather events.
• Ambitious climate targets to reduce emissions from our own operations and
drive supplier commitment to decrease our overall climate impact.
• Incorporation of climate and environmental risks into enterprise risk mana-
gement and processes, such as tender reviews.
• Quarterly Group-wide emissions accounting for internal monitoring.
Our people
Employees • Employee satisfaction & motivation: >3.75
by 2025
Being a people company, Eltel is dependent on engagement with our employ-
ees. Failure to attract, recruit and retain employees with the right skills and
experience would seriously impact our ability meet our strategic objectives.
• Annual performance and career development dialogue between employ-
ees and their managers to ensure strategy alignment and identify learning
needs, development opportunities, and workplace improvement.
• Annual employee engagement survey for collecting employee feedback that
informs local improvements and high-level planning and decision-making.
Responsible
procurement
Suppliers, subcontractors, workers in
the value chain
Irresponsible practices by suppliers and supply chain partners can damage
Eltel’s reputation and license to operate.
• Supplier audits and reviews.
• Supplier ESG-assessments for critical suppliers.
• Supplier Code of Conduct summarizes our expectations on ethical business
practices.
Business ethics
Suppliers, customers, employees,
workers in the value chain
Ethical business breaches by employees, supply chain partners or customers
can affect trust in Eltel’s business.
• Promotion of ethical business practices through internal policies, guidelines,
and procedures.
• Mandatory Code of Conduct training for all employees and other training for
targeted employee groups.
• Whistleblowing procedure in place for all stakeholders to report any suspec-
ted misconduct.
• Internal audits and reviews.
Value chain: Own operations Downstream Upstream
Eltel is committed to minimizing negative impacts while generating
positive effects for people and the environment. We recognize the
following areas as the most material to us in addressing key sustai-
nability risks across our value chain.
Eltel Annual Report 2023 • 20
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Sustainability governance
Country Units
President and CEO
Sustainability Task Force
Group Management Team Group Business Development
Country Unit sustainability
managing teams
Sustainability Team
HSE network
Board of Directors
STAKEHOLDER DIALOGUE GUIDES OUR APPROACH
We regularly engage with a variety of stakeholders at
different levels across the Group. Stakeholder dialogue
on the relevant topics is used to shape our strategic
decision-making and Eltel’s Sustainability Plan. By
meeting stakeholder expectations, we remain relevant
as a partner, employer and investment opportunity.
See www.eltelgroup.com for more information about
our dialogue with stakeholders.
Head of Sustainability
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 21
Health and safety
Ensuring our employees and subcontractors return home safely every day is our
top priority. At Eltel, safety is not just about personal protective equipment and
incident reporting – it is a mindset that we choose to adopt every day.
Our approach
Eltel’s most salient day-to-day health and safety risks for
its employees and supply chain partners include road
safety, electrical safety, working at height and working
with infrastructure. We constantly seek to identify and im-
plement more modern and safer solutions and processes
to reduce risk. Health and safety is managed on a Group
level with Country Units implementing their own plans
and deliverables based on their local situation.
OUR PROGRESS IN 2023
• Improved Lost Time Injury Frequency Rate (LTIFR)
across the Group with a 20% reduction in our LTIFR
compared to 2022.
• Enhanced safety culture, for example, by organizing a
Safety Week in all Eltel countries.
• Around 1,000 safety walks completed on work sites
compared to 700 in 2022.
• Health and safety training was a focus area during
the year, with many Country Units improving their
employee and subcontractor training based on their
country-specific Health, Safety & Environment (HSE)
risk profiles.
• Monthly HSE meetings were broadened to include
more functions.
OTHER HEALTH AND SAFETY OCCURRENCES
There was a fatality at one of our subcontractors in
Sweden during the dismantling of old network infra-
structure. This was the first fatality at Eltel in four years
and a minute’s silence was held throughout the company.
Following the incident, we reinforced subcontractor aware-
ness of the correct procedures with the aim of avoiding a
similar incident in the future.
PLANS FOR 2024
• A Group-wide lifesaving rules and a compliance
campaign will be launched.
• Subcontractor safety measures and training will
be further improved.
KPIS 2023 2022
Absence due to illness, including long-term
illness, Eltel employees, % 5.6 5.7
Lost time injuries per million working hours
(LTIFR), Eltel employees
2.7 3.8
Total Recordable Injury Frequency per million
working hours (TRIFR), Eltel employees
10.5 11.4
Number of fatal accidents, Eltel and
subcontractor employees
1 0
POLICIES GUIDING FRAMEWORKS
HSSEQ Policy ISO 45001
Code of Conduct SDG 5, 8
Eltel Annual Report 2023 • 22
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Climate and environment
Eltel aims to manage and minimize the climate and environmental footprint of the
projects it delivers in a way that goes beyond its own operations.
Our approach
We address the most significant direct environmental
impacts of our operations – emissions from our fleet of
over 3,000 vehicles. We also work on the efficient sorting
and recycling of waste in our operations and on increasing
the proportion of renewable energy we source. Going
forward, we will work to reduce the climate impact of our
entire value chain by ensuring our suppliers commit to
reducing their emissions.
OUR PROGRESS IN 2023
• New Environmental Policy adopted that includes more
clearly defined goals on waste and circularity, material
use, biodiversity, chemicals and hazardous materials.
• Good progress on fleet electrification by increasing our
proportion of electric vehicles from 3.2% to 9.3%. Our
electric vehicles avoided around 1,000 metric tons of
CO
2
during the year. We also revised our vehicle emis-
sions KPI to focus exclusively on fully electric vehicles
to better monitor our progress toward our long-term
ambition to electrify our fleet.
• Significant upgrades to our climate impact monitoring
were made during the year. We transitioned to quarterly
emissions accounting, as opposed to the previous
annual approach, and set up dashboards to track and
forecast our progress in reducing fleet emissions. We
also developed our ability to report emissions to our
customers at a project level.
OTHER CLIMATE AND ENVIRONMENT-
RELATED OCCURRENCES
More frequent emissions accounting throughout the year
provided us with insights into ways of increasing data
quality. In late 2023, we piloted a new platform to improve
the collection of energy-related data from all 140 of our
office locations.
PLANS FOR 2024
• A new platform will be implemented in 2024 to
enhance data collection and reporting processes.
• Engaging more suppliers to set science-based
climate targets.
KPIs 2023 2022
Vehicles in entire fleet
3,218 3,345
Share of electric vehicles, %
9.3 3.2
Total fuel consumption of entire fleet, litres
6,425,557 6,414,176
Total emissions, tCO
2
e
126,617 108,628
Scope 1 emissions, market based
16,337 16,152
Scope 2 emissions, market based
1,403 1,757
Scope 3 emissions
108,877 90,719
Share of renewable electricity, %
56 37
POLICIES GUIDING FRAMEWORKS
Sustainability Policy ISO 14001
Environmental Policy SBTi
HSSEQ Policy SDGs 13, 7, 12
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 23
Our people
Eltel’s goal is to be the most attractive employer in the industry by focusing on
employee engagement and development opportunities.
Our approach
With around 5,000 employees, it is essential that we can
attract, recruit and retain the right people. We aim to pro-
vide good development opportunities, and our commit-
ment is for every employee to have an annual performance
and development dialogue with their manager. We have
several initiatives that promote the Eltel culture and a
greater team spirit. We conduct annual Group-wide
employee engagement surveys and measure Employee
Net Promoter Scores (eNPS) on a country level to assess
employee job satisfaction based on their willingness to
recommend Eltel to others.
OUR PROGRESS IN 2023
• Eltel’s Employee Engagement Score improved for the
fourth year in a row, to 3.9 (3.8), while the Employee
Engagement Survey participation rate also increased
to 85% (75). On average, our employees scored highly
on relationships with colleagues, health and safety, as
well as manager relations. Our employees rated topics
related to feedback and purpose and vision the lowest.
• Leadership development was in focus during the year
through engagement with new and existing leaders
and training to enhance leadership skills, ensure
compliance and improve our processes.
• New corporate values were developed based on input
from more than 1,000 employees. To strengthen our
culture, all employees were invited to participate in the
development of Eltel’s new values. Read more about
our values on page 8.
• Gender equality was promoted through gender pay
gap assessments in selected countries. The assess-
ments showed no or negligible pay disparity between
genders at Eltel. In 2024, we will further expand the
assessments to cover all Country Units.
OTHER PEOPLE-RELATED OCCURRENCES
Due to restructuring, employee redundancies were made
in some Eltel Country Units. The Country Units supported
the employees who were impacted by the restructuring
during this challenging transition. Local measures included
organizing training programs, informative lectures and
providing outplacement services to employees made
redundant.
PLANS FOR 2024
• Implementation of Eltel’s values.
• Further enhancement of onboarding and training
across all Eltel Country Units.
KPIs 2023 2022
Employee engagement
3.9 3.8
Number of employees at year-end
4,931 5,063
Of which < 30 years, %
20 20
Of which > 55 years, %
30 22
Of which men/women, %
86/14 87/13
Share of women in Group Management
Team, % at year-end
33 25
Share of women in Board of Directors, %
at year-end
50 50
POLICIES GUIDING FRAMEWORKS
Human Resource and
Diversity Policy
SDGs 5, 8
Code of Conduct
Human and Labour Rights
Policy
Eltel Annual Report 2023 • 24
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Responsible procurement
Eltel places environmental and social demands on its subcontractors and material
suppliers – including manufacturers and wholesalers.
Our approach
We have clear processes in place that ensure our supply
chain partners sign up to the Eltel Supplier Code of Con-
duct and commit to our other key policies and principles.
We are increasingly looking at the social and environmental
impacts of the materials Eltel sources, such as equip-
ment, cables, steel, asphalt and concrete, on turnkey
projects where Eltel delivers a complete solution.
OUR PROGRESS IN 2023
• New Supplier Code of Conduct adopted to provide
ethical guidance that is tailored to our supply chain
partners. All our subcontractors and suppliers must
comply with the code to ensure they are aligned with
our ethical principles and standards.
• New resources dedicated to supply chain engagement
processes were brought in and responsible sourcing
as a key strategic area was underscored to the Group’s
Management Team as the incoming General Counsel
was appointed as the Head of Sourcing.
• New Group-wide ESG platform was developed and
configured for implementation in 2024 to collect more
detailed sustainability information from our supply
chain partners and to coordinate Eltel’s supply chain
engagement activities. The platform will allow our key
partners to conduct self-assessments of their ESG
performance and collect information on supplier audits
in a centralized manner. It will also enable us to better
track our suppliers’ commitment to science-based
climate targets. The collected ESG data will be used
in supplier evaluations and will drive responsible
procurement going forward.
PLANS FOR 2024
• New ESG platform to be implemented.
• Supplier self-assessments will commence.
• New Responsible Procurement Policy to be adopted.
KPIs 2023 2022
Supply chain emissions covered by
science-based targets at year-end, %
16.1 8.8
Number of supplier assessments
and reviews
797 477
POLICIES GUIDING FRAMEWORKS
The Eltel Supplier SDG 5, 8, 12, 13
Code of Conduct
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 25
Business ethics
Respecting human rights is one of Eltel’s fundamental business principles and involves
complying with all applicable laws and regulations as a minimum, as well as Eltel’s
policies and agreements with customers, suppliers and other subcontractors.
Our approach
Our commitment to business ethics encompasses the
enhancement of standards in areas such as anti-corrup-
tion, respect for human rights, labor rights, environmental
management, as well as data privacy and cyber security.
Eltel’s Code of Conduct and its associated policies outline
our expectations for employees and partners. We are
committed to fair play and safeguarding the interests of our
stakeholders and partners throughout the value chain.
We continuously provide employee training on our
policies. Our aim is to ensure that our employees and
stakeholders fully understand the expectations and
impacts that are relevant to their roles.
OUR PROGRESS IN 2023
• Review of our Human Rights Due Diligence (HRDD)
framework as part of our new Human and Labor
Rights Policy.
• Fair Play employee training continued as an interactive
training related to our Code of Conduct that covers
areas such as safety, security, fair competition and
anti-corruption. New employees receive mandatory
Fair Play training as part of their onboarding process.
• No significant fines, sanctions or incidents were recorded
relating to any non-compliance with Eltel´s Code of
Conduct or any laws and regulations.
OTHER BUSINESS ETHICS OCCURRENCES
22 whistleblowing reports received. These included
allegations of business ethics-related breaches, such
as corruption or misuse of trading influence, as well as
discrimination. All cases were handled according to our
standard local and Group-level procedures. As a result
of whistleblowing investigations, certain internal controls
(for example invoicing controls) and business processes
were updated. The conclusions of the investigations were
reported to the Audit Committee. None of the whistle-
blowing investigations resulted in criminal proceedings.
PLANS FOR 2024
• New Responsible Procurement Policy to be launched.
• Adoption of formal conflict of interest-related third-
party register.
KPIs 2023 2022
Code of Conduct training completion rate, %
79 82
Security training completion rate, %
87 84
POLICIES GUIDING FRAMEWORKS
Code of Conduct
Anti-Bribery and Anti-Corruption
Policy
Data Protection Policy
Human and Labor Rights Policy
Insider Policy
Tax Policy
Information Technology Policy
Whistleblowing Policy
Risk Management Policy
Competition Instruction
OECD Transfer Pricing
Guidelines for Multinational
Enterprises and Tax Adminis-
trations (OECD Guidelines)
SDGs 5, 8, 12
CYBER SECURITY AND DATA PRIVACY
Eltel has a robust framework for safeguarding cyber
security and data privacy. It encompasses governing
documents, incident reporting mechanisms, workforce
training and day-to-day activities by both our local and
Group IT functions. Eltel’s IT Security Center manages
security incidents and monitors suspicious data traffic in
the network. All new employees are required to complete
IT security training, and refresher training is provided
regularly to all employees.
We also continued to provide mandatory EU General
Data Protection Regulation (GDPR) training to educate
employees on how to safeguard personal data in their
role at Eltel. In accordance with our GDPR procedures,
personal data breaches are reported through a dedicated
GDPR reporting tool.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 26
WHAT DO ELTEL’S SCOPE 1, 2 & 3 REFER TO?
Scope 1 – Direct emissions resulting mainly from fuel
consumption in Eltel’s vehicle fleet.
Scope 2 – Indirect emissions linked to Eltel’s electricity
consumption and the heating of properties controlled
by Eltel.
Scope 3 – All other indirect emissions occurring in Eltel’s
supply chain, including emissions of purchased goods
and services.
Eltel is committed to tackling climate change and
aligning its efforts with the objectives of the Paris climate
agreement. We do this by actively working to significantly
reduce our climate impact by 2030.
Eltel has established three near-term climate targets
aimed at reducing both direct and indirect emissions
associated with its operations. These targets were
approved by the Science Based Targets initiative (SBTi)
in 2022 and we tracked our progress in 2023.
Progress on our
SBTi targets
SCOPE 1
SCOPE 2
SCOPE 3
Scope 1 represented 12.9% of our total
emissions in 2023. Eltel has committed to
reducing its absolute scope 1 emissions by
42% by 2030. Our strategy for achieving this
target involves the gradual electrification of
our vehicle fleet. Eltel’s Nordic Country Units
have developed country roadmaps for the
reduction of scope 1 emissions, based on
the deployment of electric vehicles and the
use of biofuels.
In 2023, our absolute scope 1 emissions
increased slightly. We made good progress
in increasing the proportion of electric vehicles
in our fleet.
Scope 2 constituted 1.1% of our total
emissions in 2023. Eltel has committed to
increasing its sourcing of renewable electri-
city from 31% to 100% by 2030. We aim to
achieve this by switching our own electricity
contracts to renewable sources and by
encouraging the owners of the business
premises we lease to do the same.
In 2023, we made good progress in our
scope 2 target and increased the proportion
of renewable electricity we sourced from
37% to 56%.
Scope 3 emissions made up 86.0% of Eltel’s
total emissions in 2023. Eltel has committed
to ensuring that by the end of 2026, two
thirds of its suppliers by emissions* will
have set science-based climate targets.
We intend to achieve this through supplier
selection and engagement.
In 2023, 16.1% of Eltel’s Scope 3 emis-
sions were covered by suppliers with set
SBTi climate targets.
*Covering Scope 3 categories 1, 2, 4, 5 and 6.
0
5,000
10,000
15,000
20,000
2030 target202320222021
base year
tCO
2
e
0
25
50
75
100
2030 target202320222021
%
0
25
50
75
100
2026 target202320222021
%
Eltel Annual Report 2023 • 27
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EU Taxonomy
The EU Taxonomy is the EU’s common classification sys-
tem for economicactivities that have the most significant
impact on the EU’s climate and environmentalobjectives:
1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water
and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity
and ecosystems
Until the end of 2022 taxonomy reporting was targeted
at the first two objectives: climate change mitigation and
adaptation. On 27 June 2023, the Commission adopted
a Taxonomy Environmental Delegated Act, including a
new set of EU taxonomy criteria for economic activities
making a substantial contribution to one or more of the
non-climate environmental objectives, namely: sustain-
able use and protection of water and marine resources,
transition to a circular economy, pollution prevention and
control, and protection and restoration of biodiversity
and ecosystems. The Commission also adopted amend-
ments to the Taxonomy Disclosures Delegated Act and
to the Taxonomy Climate Delegated Act, covering the
environmental objectives of climate change mitigation
and adaptation.
The power sector is one of the major sectors included
in the taxonomy. Correspondingly, Eltel’s operations in
the power sector are largely included in the economic
activities specified in the EU Taxonomy (i.e. eligible acti-
vities). All Eltel’s activities that are categorized as eligible
are deemed to have the potential to make a substantial
contribution to the first objective: climate change mitigation.
The communication sector, which contributes to the
digitalisation of society via modern and high-capacity
communication networks, is generally not included in
the activities specified in the EU Taxonomy at the present
time. In line with this, most of Eltel’s operations in the
communication business are not included in the taxo-
nomy (i.e. non-eligible activities).
2023 TAXONOMY ALIGNMENT
Due to the new regulations, Eltel has evaluated taxonomy
eligibility of its business operations according to the des-
criptions of economic activities listed in the annexes of
the Environmental Delegated Act. Eltel has reviewed the
technical screening criteria laid out in the annexes when
interpreting the nature of the activity. Eltel did not identify
any activities applicable to its business operations.
Furthermore, an assessment of amended activities to
the Climate Delegated Act was made. It was concluded
that net sales from electric vehicle infrastructure projects
falls under activity 3.20 ”Manufacture, installation, and
servicing of high, medium and low voltage electrical
equipment for electrical transmission and distribution
that result in or enable a substantial contribution to
climate change mitigation” in case the charging station
for electric vehicles is not in buildings (or parking spaces
attached to buildings) as specified under activity 7.4
”Installation of charging stations for electric vehicles”.
The net sales, which fall under this new activity, have
been reported as eligible net sales in 2023. Taxonomy
alignment will be assessed during 2024 and disclosed in
2024 Annual Report.
For other activities, Eltel has reported the extent to
which its operations are included in the EU Taxonomy
(eligible) and which part of these operations meet the
criteria for being sustainable (aligned). Eltel’s operations
are concluded to be taxonomy-aligned when they are
assessed to comply with all the requirements described
in the taxonomy. This means that the activity 1) makes a
substantial contribution to climate change mitigation, 2)
does no significant harm to any of the other five environ-
mental objectives (DNSH) and 3) complies with the
minimum safeguards.
By developing the power grid, Eltel together with its
customers contributes to climate change mitigation
through a transition to a green electricity system. Eltel has
performed a DNSH assessment of the DNSH criteria for
each relevant activity included in the taxonomy. Based on
the assessment, Eltel has concluded that it complies with
the DNSH criteria. Eltel does not own or operate power
grids but offers a full range of services from planning and
construction to maintaining and dismantling the grids.
Eltel’s primary goal is to minimize the environmental
impact of these operations. This involves the preparation
of environmental impact assessment (EIA) and risk as-
sessment or similar environmental surveys and mitigating
the impact on biodiversity and ecosystems as early as
the planning phase. For climate change adaptation, the
key aspect is the resilience of the power infrastructure
to the physical risks related to climate change. The
transition to a circular economy and pollution prevention
plays an important role in Eltel’s operations concerning
the construction, maintenance and dismantling of power
(and communication) networks as a significant amount
of materials are used in such operations. The responsible
sourcing of materials, recycling and waste management
are included in the key environmental topics for Eltel. To a
large extent, Eltel uses reliable waste management part-
ners who ensure that all waste is properly recycled and
recovered. To further reduce its environmental impact,
Eltel continues to expand the use of professional
partners. In addition to environmental impact analyses,
Eltel has assessed that it complies with the minimum
safeguards. Further information about minimum safe-
guards regarding human rights, corruption, taxation
and fair competition is presented under the heading
”Minimum safeguards alignment summary”.
NET SALES
Eltel has evaluated taxonomy eligibility of its business
operations according to the descriptions of economic
activities listed in the annexes of the Delegated Acts and
the related NACE codes. Furthermore, an assessment of
substantial contribution to climate change mitigation has
been performed by analyzing whether Eltel’s operations
meet the technical screening criteria of each applicable
activity. Operations have been disaggregated to the
extent necessary for the analysis.
Eltel identified 37.7% (34.0) of its net sales to be taxo-
nomy-eligible regarding the economic activities defined
in the taxonomy’s objective: climate change mitigation.
Eltel also identified 33.2% (29.7) of its net sales to be
taxonomy-aligned (environmentally sustainable).
A major part of eligible and aligned net sales relate to
activity 4.9 “Transmission and distribution of electricity”.
This activity includes Eltel’s power transmission and
distribution services from construction and upgrade
to maintenance and fault repair, as well as smart grids
operations relating to operating the distribution networks.
A total of 22.9% (25.2) of net sales is deemed to be
taxonomy-eligible. Furthermore, Eltel has concluded that
20.6% (22.5) of its net sales is also taxonomy-aligned.
Eltel carries out work for the power grids that belong to
the interconnected European system and its subordinate
systems that are not dedicated to creating or expanding
direct connections to power production plants that are
more greenhouse gas intensive than 100 CO
2
e/kWh.
2.2% (2.7) of net sales is not deemed to be aligned,
Eltel Annual Report 2023 • 28
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
primarily due to direct connections to power production
plants that do not meet the criteria, mainly in Poland.
In Germany, many of the electricity meters included in
power distribution operations do not meet the EU criteria.
Thus, these operations have been evaluated as being
non-aligned.
Part of Eltel’s smart grids operations are included
in activity 7.5 “Installation, maintenance and repair of
instruments and devices for measuring, regulation and
controlling energy performance of buildings”. 6.0%
(4.1) of total net sales is included in this activity and it
is concluded that 4.6% (2.8) of total net sales is taxo-
nomy aligned. Smart grids operations in the Nordics are
generally taxonomy-aligned as the installed meters meet
the criteria for smart meters. In Germany, most of the me-
ters are non-aligned but there are also meter installations
that comply with the taxonomy criteria.
2.8% (2.4) of total net sales relate to activity 6.14 “Infra-
structure for rail transport”. These services are deemed
to be fully taxonomy-aligned. Most of the operations are
in Denmark and include, for example, installation and
configuration of equipment related to the digitalization
of railway signalling. Finland and Poland also conduct
operations included in this activity.
Eltel has also identified other taxonomy-eligible oper-
ations totalling 6.0% (2.3) of total net sales. 5.1% (1.9)
of net sales included in these operations is taxonomy-
aligned. Other taxonomy-aligned operations include the
installation of charging stations for electric vehicles (7.4),
the installation of energy efficiency equipment in buildings
(7.3) and the maintenance of wind turbines (7.6). Other
non-aligned activities include operations related to
certain district heating facilities that do not meet the tech-
nical screening criteria for activity 4.15. Taxonomy-eligible
net sales reported under 3.20 for installation of charging
stations for electric vehicles represent 0.6% of total net
sales. Taxonomy alignment for this activity will be assessed
during 2024 and disclosed in 2024 Annual Report.
CAPITAL EXPENDITURE (CAPEX) AND OPERATING
EXPENDITURE (OPEX)
Eltel identified 44.6% (34.7) of capital expenditure and
39.6% (37.2) operating expenditure (capex and opex)
to be taxonomy eligible. Further more, 38.6% (30.8) of
capex and 27.9% (29.2) of opex were identified as being
taxonomy -aligned. Capex and opex have been included
when they relate to operations generating net sales that
are included in the taxonomy. Investments in a new car
fleet are reported as taxonomy-aligned capex if the capex
met the criteria for being sustainable according to taxo-
nomy activity 6.5 “Transport by motorbikes, passenger
cars and light commercial vehicles”. This mainly concerns
electric vehicles.
As the definition of opex is very narrow in the taxo-
nomy, the amount of total opex in Eltel is negligible. Opex
includes the cost of maintenance and repair of machinery
and buildings and short-term lease expenses.
In order to avoid double counting, each business
operation that generates taxonomy-eligible net sales
was exclusively assigned to a specific taxonomy-eligible
economic activity. The same procedure was adopted
for the allocation of capex and opex. However, capex
for electric vehicles was fully included in activity 6.5
and was therefore excluded from the other taxonomy-
eligible activities.
NET SALES
Taxonomy-aligned 33.2%
Taxonomy-eligible but not aligned 4.5%
Non-eligible 62.3%
CAPEX
Taxonomy-aligned 38.6%
Taxonomy-eligible but not aligned 6.0%
Non-eligible 55.4%
OPEX
Taxonomy-aligned 27.9%
Taxonomy-eligible but not aligned 11.7%
Non-eligible 60.4%
MINIMUM SAFEGUARDS ALIGNMENT SUMMARY
Human rights – Eltel has multiple methods for assessing, safeguard-
ing and promoting human rights. These include but are not limited to
the human rights risks assessments made through the enterprise risk
management process, the whistleblowing process, the annual Code
of Conduct training, and Code of Conduct requirements towards our
suppliers. Reporting on such matters is done on a regular basis to
Eltel’s executive management and the Board. No employee of Eltel
AB or of any of its subsidiaries have been convicted or being found of
being in violation of any laws or regulations relating to human rights.
Corruption – Eltel has anti-corruption practices in place, such as the
whistleblowing channel and regular trainings in anti-corruption prac-
tices, which are governed by Eltel’s Anti-Bribery and Anti-Corruption
Policy as well as the Whistleblowing Policy. Eltel’s Code of Conduct
also outlines Eltel’s stance on Anti-Bribery and Anti-Corruption. Code
of Conduct trainings (including anti-corruption practices) are provided
to employees annually. No employee of Eltel AB or of any of its sub-
sidiaries have been convicted or being found of being in violation of
any laws or regulations relating anti-corruption.
Taxation – Eltel treats tax compliance and governance as important
elements of oversight, tax risks are assessed on an ongoing basis and
tax compliance matters are reported to senior management as well
as to the Audit Committee. No employee of Eltel AB or of any of its
subsidiaries have been convicted or being found of being in violation
of any tax laws or regulations.
Fair competition – Eltel is dedicated to promoting the importance of
compliance with competition laws and regulations. Eltel’s Competition
Instruction is used to increase awareness and educate the workforce
on the topic of fair competition. Additional directed training is provided
to senior management. No employee of Eltel AB or of any of its sub-
sidiaries have been convicted or being found of being in violation of
any laws or regulations relating fair competition.
Eltel Annual Report 2023 • 29
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
NET SALES
Financial year 2023 2023 Substantial contribution criteria
DNSH criteria
(Does not significantly harm)
Economic activities
Code
Net sales
Pro portion
of net sales,
2023
Climate change
miti gation
Climate change
adaptation
Water
Pollution
Circular economy
Biodiversity
Climate change
miti gation
Climate change
adapt ation
Water
Pollution
Circular economy
Bio diversity
Minimum
safe guards
Proportion of taxo-
nomy aligned (A.1)
or -eligible (A.2) net
sales, 2022
Category
enabling activity
Category
transitional
activity
EUR million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (taxonomy-aligned)
Electricity generation from wind power CCM 4.3 39.3 4.6% Y N/EL N/EL N/EL N/EL N/EL – Y Y – Y Y Y 1.5% – –
Transmission and distribution of electricity CCM 4.9 175.4 20.6% Y N/EL N/EL N/EL N/EL N/EL – Y – Y Y Y Y 22.5% E –
Infrastructure for rail transport CCM 6.14 23.8 2.8% Y N/EL N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 2.4% E –
Installation, maintenance and repair of energy efficiency equipment CCM 7.3 – – Y N/EL N/EL N/EL N/EL N/EL – Y – Y – – Y 0.1% E –
Installation, maintenance and repair of charging stations for electric
vehicles in buildings (and parking spaces attached to buildings) CCM 7.4 2.8 0.3% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y 0.3% E –
Installation, maintenance and repair of instruments and devices
measuring, regulation and controlling energy performance
of buildings CCM 7.5 39.4 4.6% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y 2.8% E –
Installation, maintenance and repair of renewable energy
technologies CCM 7.6 1.3 0.2% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y – E –
Net sales for environmentally sustainable activities
(Taxonomy-aligned) (A.1) 282.1 33.2% 33.2% – – – – – – Y Y Y Y Y Y 29.7%
Of which enabling 86.1% 86.1% – – – – – – Y Y Y Y Y Y 94.8% E
Of which transitional – – – – – – – – – – T
A.2. Taxonomy-eligible but not environmentally sustainable
activities (not taxonomy-aligned activities)
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
Manufacture, installation, and servicing of high, medium and
low voltage electrical equipment for electrical transmission and
distribution that result in or enable a substantial contribution to
climate change mitigation
1)
CCM 3.20 5.0 0.6% EL N/EL N/EL N/EL N/EL N/EL –
Transmission and distribution of electricity CCM 4.9 19.0 2.2% EL N/EL N/EL N/EL N/EL N/EL 2.7%
District heating / cooling distribution CCM 4.15 2.7 0.3% EL N/EL N/EL N/EL N/EL N/EL 0.4%
Installation, maintenance and repair of instruments and devices
measuring, regulation and controlling energy performance
of buildings CCM 7.5 11.6 1.4% EL N/EL N/EL N/EL N/EL N/EL 1.3%
Net sales for taxonomy-eligible but not environmentally
sustainable activities (not taxonomy-aligned activities) (A.2) 38.4 4.5% 4.5% – – – – – 4.3%
A. Net sales of taxonomy eligible activities (A.1 + A.2) 320.4 37.7% 37.7% – – – – – 34.0%
B. Taxonomy-non-eligible activities
Net sales for taxonomy-non-eligible activities 529.7 62.3%
Total 850.1 100.0%
1)
Amendment to Climate Delegated Act. Taxonomy alignment will be assessed during 2024.
Total net sales equals to net sales according to the 2023 financial statements.
CCM – Climate change mitigation
Y – Yes, taxonomy-eligible and taxonomy-aligned activity with relevant environmental objective
N – No, taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, taxonomy-non-eligible activity for the relevant environmental objective
EL – Eligible, taxonomy-eligible activity for the relevant environmental objective
Eltel Annual Report 2023 • 30
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
CAPITAL EXPENDITURE (CAPEX)
Financial year 2023 2023 Substantial contribution criteria
DNSH criteria
(Does not significantly harm)
Economic activities
Code
Capex
Pro portion
of capex,
2023
Climate change
miti gation
Climate change
adapt ation
Water
Pollution
Circular economy
Biodiversity
Climate change
miti gation
Climate change
adapt ation
Water
Pollution
Circular economy
Bio diversity
Minimum
safe guards
Proportion of taxo-
nomy aligned (A.1)
or -eligible (A.2)
capex, 2022
Category
enabling activity
Category
transitional
activity
EUR million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (taxonomy-aligned)
Electricity generation from wind power CCM 4.3 0.9 2.4% Y N/EL N/EL N/EL N/EL N/EL – Y Y – Y Y Y 1.1% – –
Transmission and distribution of electricity CCM 4.9 4.8 12.3% Y N/EL N/EL N/EL N/EL N/EL – Y – Y Y Y Y 15.8% E –
Transport by motorbikes, passenger cars and light commercial
vehicles CCM 6.5 5.9 15.3% Y N/EL N/EL N/EL N/EL N/EL – Y – Y Y – Y 8.2% – T
Infrastructure for rail transport CCM 6.14 1.2 3.0% Y N/EL N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 2.3% E –
Installation, maintenance and repair of renewable energy
technologies CCM 7.3 0.0 0.0% Y N/EL N/EL N/EL N/EL N/EL – Y – Y – – Y 0.0% E –
Installation, maintenance and repair of charging stations for electric
vehicles in buildings (and parking spaces attached to buildings) CCM 7.4 0.2 0.4% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y 0.5% E –
Installation, maintenance and repair of instruments and devices
measuring, regulation and controlling energy performance
of buildings CCM 7.5 1.9 5.0% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y 2.8% E –
Installation, maintenance and repair of renewable energy
technologies CCM 7.6 0.0 0.1% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y – E –
Capex for environmentally sustainable activities
(Taxonomy-aligned) (A.1) 14.9 38.6% 38.6% – – – – – – Y Y Y Y Y Y 30.8%
Of which enabling 54.0 % 54.0% – – – – – – Y Y Y Y Y Y 69.7 % E
Of which transitional 39.7% 39.7% – Y Y Y Y Y Y 26.7% T
A.2. Taxonomy-eligible but not environmentally sustainable
activities (not taxonomy-aligned activities)
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
Transmission and distribution of electricity CCM 4.9 1.6 4.1% EL N/EL N/EL N/EL N/EL N/EL 2.2%
District heating / cooling distribution CCM 4.15 0.1 0.3% EL N/EL N/EL N/EL N/EL N/EL 0.3%
Installation, maintenance and repair of instruments and devices
measuring, regulation and controlling energy performance
of buildings CCM 7.5 0.6 1.6% EL N/EL N/EL N/EL N/EL N/EL 1.4%
Capex for taxonomy-eligible but not environmentally
sustainable activities (not taxonomy-aligned activities) (A.2) 2.3 6.0% 6.0% – – – – – 3.9%
A. Capex of taxonomy-eligible activities (A.1 + A.2) 17.3 44.6% 44.6% – – – – – 34.7%
B. Taxonomy-non-eligible activities
Capex of taxonomy non-eligible-activities 21.4 55.4%
Total 38.7 100.0%
Capex includes additions into property, plant and equipment, right-of-use assets and other intangible assets
(Notes 26-28 in the consolidated financial statements).
CCM – Climate change mitigation
Y – Yes, taxonomy-eligible and taxonomy-aligned activity with relevant environmental objective
N – No, taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, taxonomy-non-eligible activity for the relevant environmental objective
EL – Eligible, taxonomy-eligible activity for the relevant environmental objective
Eltel Annual Report 2023 • 31
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
OPERATING EXPENDITURE (OPEX)
Financial year 2023 2023 Substantial contribution criteria
DNSH criteria
(Does not significantly harm)
Economic activities
Code
Opex
Pro portion
of opex,
2023
Climate change
mitigation
Climate change
adapt ation
Water
Pollution
Circular economy
Biodiversity
Climate change
miti gation
Climate change
adapt ation
Water
Pollution
Circular economy
Biodiversity
Minimum
safe guards
Proportion of taxo-
nomy aligned (A.1)
or -eligible (A.2)
opex, 2022
Category
enabling activity
Category
transitional
activity
EUR million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (taxonomy-aligned)
Electricity generation from wind power CCM 4.3 0.4 3.9% Y N/EL N/EL N/EL N/EL N/EL – Y Y – Y Y Y 1.5% – –
Transmission and distribution of electricity CCM 4.9 1.7 17.3% Y N/EL N/EL N/EL N/EL N/EL – Y – Y Y Y Y 22.1% E –
Infrastucture for rail transport CCM 6.14 0.2 2.4% Y N/EL N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 2.3% E –
Installation, maintenance and repair of energy efficiency equipment CCM 7.3 – – Y N/EL N/EL N/EL N/EL N/EL – Y – Y – – Y 0.1% E –
Installation, maintenance and repair of charging stations for electric
vehicles in buildings (and parking spaces attached to buildings) CCM 7.4 0.0 0.3% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y 0.3% E –
Installation, maintenance and repair of instruments and devices
measuring, regulation and controlling energy performance of
buildings CCM 7.5 0.4 3.9% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y 2.8% E –
Installation, maintenance and repair of renewable energy
technologies CCM 7.6 0.0 0.1% Y N/EL N/EL N/EL N/EL N/EL – Y – – – – Y – E –
Opex for environmentally sustainable activities
(Taxonomy-aligned) (A.1) 2.8 27.9% 27.9% – – – – – – Y Y Y Y Y Y 29.2%
Of which enabling 86.1% 86.1% – – – – – – Y Y Y Y Y Y 94.8% E
Of which transitional – – – – – – – – – – T
A.2. Taxonomy eligible but not environmentally sustainable
activities (not taxonomy-aligned activities)
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
Transmission and distribution of electricity CCM 4.9 0.7 6.7% EL N/EL N/EL N/EL N/EL N/EL 4.9%
District heating / cooling distribution CCM 4.15 0.1 1.0% EL N/EL N/EL N/EL N/EL N/EL 0.7%
Installation, maintenance and repair of instruments and devices
measuring, regulation and controlling energy performance of
buildings CCM 7.5 0.4 4.1% EL N/EL N/EL N/EL N/EL N/EL 2.3%
Opex for taxonomy eligible but not environmentally sustainable
activities (not taxonomy-aligned activities) (A.2) 1.2 11.7% 11.7% – – – – – 8.0%
A. Opex of taxonomy-eligible activities (A.1 + A.2) 4.0 39.6% 39.6% – – – – – 37.2%
B. Taxonomy non-eligible-activities
Opex for taxonomy-non-eligible activities 6.0 60.4%
Total 10.0 100.0%
Opex includes short-term leases, maintenance and repair costs of tangible assets. Note that opex as defined in EU Taxonomy
is significantly narrower than Eltel’s total operating expenditure.
CCM – Climate change mitigation
Y – Yes, taxonomy-eligible and taxonomy-aligned activity with relevant environmental objective
N – No, taxonomy-eligible but not taxonomy-aligned activity with the relevant environmental objective
N/EL – Not eligible, taxonomy-non-eligible activity for the relevant environmental objective
EL – Eligible, taxonomy-eligible activity for the relevant environmental objective
Eltel Annual Report 2023 • 32
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Auditor’s opinion regarding the
statutory sustainability report
Engagement and responsibility
It is the board of directors who is responsible for the sustainability report for
the year 2023 on pages 17-33 and that it is prepared in accordance with the
Annual Accounts Act.
The scope of the examination
Our examination has been conducted in accordance with FAR:s auditing
standard RevR 12 The auditor’s opinion regarding the statutory sustainability
report. This means that our examination of the statutory sustainability report is
different and substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and generally accepted auditing
standards in Sweden. We believe that the examination has provided us with
sufficient basis for our opinion.
Opinion
A statutory sustainability report has been prepared.
Stockholm 26 March 2024
KPMG AB
Fredrik Westin
Authorized Public Accountant
To the general meeting of the shareholders in
Eltel AB (publ), corporate identity number 556728-6652.
Row Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to research,
development, demonstration and deployment of innovative electricity
generation facilities that produce energy from nuclear processes with
minimal waste from the fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction
and safe operation of new nuclear installations to produce electricity
or process heat, including for the purposes of district heating or indus-
trial processes such as hydrogen production, as well as their safety
upgrades, using best available technologies.
NO
3.
The undertaking carries out, funds or has exposures to safe operation
of existing nuclear installations that produce electricity or process
heat, including for the purposes of district heating or industrial pro-
cesses such as hydrogen production from nuclear energy, as well
as their safety upgrades.
NO
Fossil gaz related activities
4.
The undertaking carries out, funds or has exposures to construction
or operation of electricity generation facilities that produce electricity
using fossil gaseous fuels.
NO
5.
The undertaking carries out, funds or has exposures to construction,
refurbishment, and operation of combined heat/cool and power
generation facilities using fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction,
refurbishment and operation of heat generation facilities that produce
heat/cool using fossil gaseous fuels.
NO
NUCLEAR AND FOSSIL GAZ RELATED ACTIVITIES
Eltel does not carry out, fund, or have exposures to an activity in rows 1 to 6 in
template 1 of Annex XII Disclosures Delegeated Act. Consequently, Eltel omits
disclosing the corresponding rows in templates 2 to 5 of that Annex.
Eltel Annual Report 2023 • 33
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Board of Directors report 2023
The Board of Directors and the CEO of Eltel AB, corporate registration number 556728-6652,
with its registered office in Stockholm, hereby submit the Annual Report and consolidated financial
statements for the 2023 financial year. Eltel AB and its subsidiaries operate under the Eltel brand.
The consolidated group is called Eltel Group.
Company overview
Eltel is the leading infrastructure and service provider for
critical communication and power networks – infranets.
We deliver a comprehensive range of communication and
power services – everything from the design and build
phase to corrective maintenance. This includes design,
planning, building, installing, and securing the operation
of networks for a more sustainable and connected world
today and for future generations.
Our customers are primarily owners and operators of
communication and power networks. We offer a 24/7 and
extensive geographical presence in our home markets.
Most of our work is conducted through long-term
framework agreements that run between two to five
years. This allows us to create and maintain long-term
relationships with our customers and, through close
cooperation, help them achieve their objectives.
As a consequence of the global trends affecting soci-
ety, the infranet sector is constantly changing. The key
ongoing trends driving this change include increasing
customer demands, regulatory requirements, the need
to upgrade ageing power infrastructure and the growing
use of renewable energy in society. Eltel operates in
the Nordic market and is also represented in Poland,
Germany and Lithuania.
Communication services
Eltel optimizes communication networks and help meet
societal needs for greater digitalisation, which is revolu-
tionizing how people live, work and play. The business is
primarily driven by technology upgrades, maintenance
needs and increased demand for improved capacity
and faster networks.
Eltel’s main customers are large telecom operators
and communication network owners. Its operations
generally involve long-term relationships with a steady
inflow of orders generated by framework agreements.
Read more about Eltel’s communication offering on
page 12.
Power services
Eltel’s power services enable the electrification of society,
which is essential for building more sustainable energy
solutions and achieving national carbon-neutrality goals.
The demand for increased network capacity and capabil-
ities is a major driver in the power market that will continue
in the foreseeable future.
Primary customers include national transmission
system operators, owners of power distribution grids.
Read more about Eltel’s power offering on page 13.
Major contracts 2023
During 2023, Eltel signed contracts with a combined val-
ue of about EUR 714 million (825). Selection of important
contracts:
• Eltel Norway and Equinor signed a frame agreement
regarding telecom-specific upgrade and modification
services. Estimated value of the four-year agreement
is about EUR 20 million (November).
• Eltel Finland signed an agreement with Fingrid, Fin-
land’s national transmission system operator, to build
a 74 km long transmission line. The contract is worth
about EUR 23 million (September).
• Eltel Sweden and the Swedish Defense Materiel Works,
FMV, signed a frame agreement. Estimated value of
the three-year agreement is about EUR 27 million
(September).
• Eltel and the Finnish energy company Helen signed an
agreement for the delivery of a large-scale solar park
in Lohja, Finland. The contract is worth about EUR 3.1
million (May).
• Eltel Norway entered into a three-year frame agreement
for fiber work and Fixed Wireless Access (FWA) with
a new customer, Viken Fiber, one of Norway’s largest
fiber companies. The three-year agreement is worth
about EUR 17–19 million (January).
SIGNIFICANT EVENTS 2023
Investments in new business areas
We made new investments in our capabilities in the
areas of e-Mobility, energy storage and solar. These
investments helped us to grow our pipeline and win new
agreements during the year.
Employee engagement survey results
Eltel’s Employee Engagement Score improved for the
fourth year in a row, to 3.9 (3.8), while the survey partici-
pation rate increased to 85% (75).
Expansion into to solar PV market
We won solar park projects in Finland and Denmark. The
largest project was a 10 MW park for the energy compa-
ny Helen in Lohja, Finland.
Restructuring and re-shaping our business to
meet future business needs
Our restructuring and cost-savings programs imple-
mented during the year helped to optimize our business,
reduce costs and better meet the shifting customer
demand.
Our new values
We developed new company values during the year
together with our colleagues. The values are aligned with
our vision and strategy and will shape our culture, behavi-
or and decisions going forward.
Eltel Annual Report 2023 • 34
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
January–December 2023
Net sales increased by 3.2% to EUR 850.1 million
(823.6). In local currency, net sales grew by 7.1%. Cur-
rency effects had a negative impact of EUR 32.4 million.
In segments net sales increased by EUR 31.1 million.
Organic net sales in segments, adjusted for currency
effects, increased by 8.8%. The growth was driven by
increased volumes in Finland, Denmark and Sweden. In
Norway and Other business net sales decreased.
Eltel’s main operations in the four Nordic countries
are presented as segments. In Q4 2023, the segments
represented 90% of the net sales.
Other business includes High Voltage Poland, Smart
Grids Germany, Lithuania as well as closing activities for
Power Transmission International.
Adjusted EBITDA
Adjusted EBITDA was EUR 31.8 million (27.8). Adjust-
ed EBITA increased to EUR 1.7 million (-1.9) and the
adjusted EBITA margin was 0.2% (-0.2). Adjusted EBITA
in segments was EUR 11.8 million (9.9) and the margin
was 1.5% (1.4). Improvements in Denmark and Sweden
were offset by Norway and Finland. In Other business,
adjusted EBITA was EUR -1.0 million (-4.0).
Finland
Net sales increased by EUR 54.3 million, or 18.7%, to
EUR 344.5 million (290.1) reflecting a very strong market
demand for most of our business offerings. The Com-
munication business capitalized on a strong market,
which generated great volumes throughout the year. Re-
newable energy transition projects, especially in Power
Transmission further added to the growth.
Adjusted EBITA decreased to EUR 6.5 million (8.2).
The adjusted EBITA margin was 1.9% (2.8). Two frame
agreements in Power Services burdened the profitability
NET SALES
50
90
130
170
210
250
Q4
23
Q3
23
Q2
23
Q1
23
Q4
22
810
820
830
840
850
860
MEUR MEUR
Net sales quarterly, MEUR
Net sales, rolling 12 months, MEUR
ADJUSTED EBITA
-6
-3
0
3
6
Q4
23
Q3
23
Q2
23
Q1
23
Q4
22
-2
-1
0
1
2
MEUR %
Adjusted EBITA, quarterly, MEUR
Adjusted EBITA margin, rolling 12 months, %
LEVERAGE
0
1
2
3
4
5
6
7
Q4
23
Q3
23
Q2
23
Q1
23
Q4
22
Leverage
throughout the year, however, the negative impact was
reduced during the second half of the year. Within Com-
munication and Power Transmission the margins were
positively impacted by larger volumes.
As part of the restructuring and cost-saving program,
communicated in connection with the Q4 2022 report,
Eltel Finland has terminated certain customer agree-
ments, reduced the workforce by 47 full-time employees
during Q2, closed selected facilities and reduced the
number of vehicles.
During 2023, Eltel Finland signed new contracts with a
combined value of about EUR 232 million (412) adding to
the committed order backlog.
Read more about Eltel Finland on page 14.
Sweden
Net sales increased by EUR 4.7 million, or 2.4%, to
EUR 198.5 million (193.8). Growth in local currency was
10.7%.
Currency effects had a negative impact of EUR 15.9
million. Strong development in Smart Grids was partly
offset by a declining Communication business as a
result of lower customer investment levels in the later
part of the year.
Adjusted EBITA improved to EUR 2.9 million (-1.0)
marking 2023 as the first year with positive result in re-
cent history. The adjusted EBITA margin was 1.5% (-0.5).
Progress came from increased volumes in Smart Grids
and a generally improved operational performance.
During 2023, Eltel Sweden signed new contracts with
a combined value of about EUR 198 million (182) adding
to the committed order backlog.
Read more about Eltel Sweden on page 15.
Norway
Net sales decreased by EUR 46.8 million, or 26.4%,
to EUR 130.1 million (176.8). Currency effect was EUR
-17.4 million. Growth in local currency was -16.6%. Main
reason was lower volumes due to reduced customer
investments, mainly in fiber.
Adjusted EBITA decreased to EUR -2.5 million (2.1).
The adjusted EBITA margin was -1.9% (1.2). Lower
volumes caused overcapacity and inefficiency in the
organization.
Following reductions in customer investments and
result deterioration in Norway starting in Q4 2022, two
restructuring and cost-saving programs were imple-
mented during 2023 in Q1 and Q3. The programs have
included a total reduction in the workforce by approx-
imately 160 full-time employees, termination and wind
down of certain customer agreements, closing of select-
ed locations and reducing fleet to adjust to the needs of
the current operations.
During 2023, Eltel Norway signed new contracts with
a combined value of about EUR 161 million (70) adding
to the committed order backlog.
Read more about Eltel Norway on page 15.
Denmark
Net sales increased by EUR 18.8 million, or 25.3%,
to EUR 93.0 million (74.3). The significant growth was
mainly driven by higher volumes in ongoing Communi-
cation contracts and new Power projects.
Adjusted EBITA improved to EUR 4.9 million (0.6).
The adjusted EBITA margin was 5.2% (0.9). The strong
performance stemmed from higher volumes, operation-
al improvements and price increases.
During 2023, Eltel Denmark signed new contracts
with a combined value of about EUR 48 million (146)
adding to the committed order backlog.
Read more about Eltel Denmark on page 16.
Eltel Annual Report 2023 • 35
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Other business
Net sales decreased by EUR 5.7 million to EUR 93.7
million (99.4), mainly due to a shift of scope to selected
projects and services in High Voltage Poland.
Adjusted EBITA improved by EUR 3.0 million to EUR
-1.0 million (-4.0). High Voltage Poland improved by EUR
2.7 million to EUR -4.9 million (-7.6). Closing activities
in Power Transmission International (PTI) during the
fourth quarter further contributed positively to the result.
Margins in Smart Grids Germany declined from previous
year but remained on a healthy level.
Read more about Other business on page 16.
Cash flow
Cash flow from operating activities was EUR 34.0 million
(16.4). Main items included EBITDA EUR 24.8 million
(27.8), cash flow from change in net working capital EUR
29.4 million (4.6) mainly due to tax deferral in Sweden
EUR 28.3 million (0.0), financial items EUR -12.0 million
(-7.8) and income taxes EUR -3.2 million (-4.7). Cash
flow from financial items and income taxes is impacted
by timing differences between income statement and
payments.
Cash flow has historically displayed a strong seasonal
pattern, with weaker cash flow recorded during the
period until the end of the third quarter due to higher
production activity. Eltel’s net working capital level is
also impacted by remaining working capital-intensive
projects, mainly in High Voltage Poland. These projects,
and delays in them, result in continued tie up of substan-
tial working capital and are expected to create volatility
in the net working capital also going forward.
Net cash flow from investing activities was EUR -4.3
million (-3.9) consisting of net capital expenditure on
machinery and equipment.
Cash flow from financing activities was EUR -52.3
million (3.1). Utilization of short-term financing decreased
by EUR 42.5 million (increase of 16.5). Amortization of
term loan amounted to EUR 11.0 million and payments
of lease liabilities were EUR 22.1 million (21.6). Net pro-
ceeds from issue of the hybrid bond and related trans-
action costs amounted to EUR 24.2 million (0.0) and
payment of hybrid bond interests amounted to EUR 0.8
million (0.0). Eltel also issued and purchased shares in
accordance with a long-term incentive program, which
had a cash flow impact of EUR 2.4 million (1.0) and EUR
-2.4 million (-1.0), respectively. In 2022 Eltel drew a EUR
35.0 million term loan and repaid the remaining old term
loan of EUR 27.0 million.
Financial position, cash and cash equivalents
Equity at the end of the period was EUR 223.6 million
(211.3) and total assets were EUR 624.3 million (621.7).
The equity ratio was 39.6% (37.0).
INTEREST-BEARING LIABILITIES AND NET DEBT
EUR million 31 Dec 2023 31 Dec 2022
Interest-bearing debt 71.1 125.1
Leasing liabilities 53.9 47.8
Allocation of effective interest
to periods 0.3 0.5
Less cash and cash equivalents -24.7 -47.9
Net debt 100.6 125.5
EUR million 31 Dec 2023 31 Dec 2022
Non-current interest-bearing debt 20.7 34.7
Current interest-bearing debt 50.4 90.4
Total interest-bearing debt 71.1 125.1
Non-current leasing liabilities 33.9 31.0
Current leasing liabilities 19.9 16.8
Total leasing liabilities 53.9 47.8
Hybrid bond
On 6 April 2023, Eltel AB issued subordinated sustain-
ability-linked hybrid capital securities in the aggregate
principal amount of EUR 25 million (the “hybrid bond”).
The hybrid bond is classified as equity and it is subor-
dinated to the company’s other debt obligations. The
hybrid bond has no maturity date, but Eltel has the right
to redeem it at so-called reset date in July 2026 and at
every interest payment date thereafter. The hybrid bond
is sustainability-linked, and a premium up to 1.20% of
the principal amount is paid if the sustainability targets
measured at 31 December 2025 are not met. The hybrid
bond bears interest at a fixed rate of 13.50% per annum
until the reset date.
CREDIT FACILITIES
EUR million 31 Dec 2023 Maturity
Term loan, current 3.0 Mar 2024-
Sep 2024
Term loan, non-current 21.0 Jan 2025
Revolving credit facility 90.0 Jan 2025
Account overdrafts 15.0 Jan 2025
Total committed credit facilities 129.0
Commercial paper program 150.0 N/A
After the reporting period, the maturity of the term loan, revolving credit facility
and account overdrafts have been prolonged until January 2026.
Available liquidity reserves, including the committed
revolving credit facility, account overdrafts and cash
and cash equivalents, amounted to EUR 90.7 million
(96.9). Additional to the committed facilities, the Group
also has access to short-term debt capital markets via
a commercial paper program of EUR 150 million. On 31
December 2023, EUR 8.0 million (33.5) of the commer-
cial paper program and EUR 39.0 million (56.0) of the
revolving credit facility were utilized.
Commercial guarantees
On 31 December 2023, the commercial guarantees
issued by the banks and other financial institutions on
behalf of the Group amounted to EUR 89.3 million (80.3).
Sustainability
Eltel has, in accordance with the Annual Accounts Act
chapter 6 section 11, prepared the statutory sustainabil-
ity report as a separate report which was approved for
issue by the Board of Directors and the President and
CEO. The scope of the Statutory Sustainability report is
defined on pages 17–33.
Employees
Ensuring that our employees return home safely every
day is our top priority. High-risk activities related to day-
to-day operations include electrical safety, working at
height, managing ageing infrastructure, and road safety.
Road safety is a particularly important area for Eltel as
teams spend a lot of time on the road driving from site to
site. Eltel is constantly seeking to identify and implement
safer solutions and processes to reduce risk. In 2023,
the Lost Time Injury Frequency rate (LTIFR) decreased to
an all-time low at 2.7.
Being a people company, Eltel is dependent on the
engagement of our employees. We deliver value to our
customers through our highly engaged and competent
employees. Eltel’s Employee Engagement Score 2023
improved for the fourth year in a row, to 3.9 (3.8), while
the Employee Engagement Survey participation rate
also increased to 85% (75). On average, our employees
scored highly on relationships with colleagues, health
and safety, as well as manager relations. Our employees
rated topics related to feedback and purpose and vision
the lowest.
In 2023, the average number of employees decreased
by 0.6% to 5,024 (5,053). At the same time as we re-
cruited new skills to meet the needs in the new areas of
renewable energy such as solar power and e-mobility,
a certain number of employees in the various charging
units were laid off due to lower volumes than previously
expected.
For more information how we work with employees,
please refer to page 24, and health and safety page 22.
Eltel Annual Report 2023 • 36
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The control environment within Eltel’s corporate govern-
ance framework includes a set of clear rules of proce-
dure for the Board of Directors and its committees, a
clear organizational structure, documented delegation
of authority (from the Board of Directors to the Group
Management Team) and a series of Group policies and
instructions. The governance framework and internal
controls are applicable to all Eltel companies.
Eltel has a risk management process in place. The
Internal Audit Function evaluates if the process is being
followed and communicates identified deficiencies to
top management.
For more information regarding financial risk man-
agement, please refer to note 14 in the Consolidated
financial statements.
Risk Management
The goal of Eltel’s Risk Management is to safeguard strategy execution from
unexpected risks through assessing risks and opportunities on a daily basis.
Risk awareness is part of our daily mindset.
Country/
Solution Unit
Group CEO/CFO Group RM Team
Board/
Audit Committee
Identifies operational risks and
opportunities. Reports risks,
weight of risks and potential ac-
tion plan via Monthly Business
Review template.
Addresses risks and opportuni-
ties as part of the Business Plan.
Reviews risks and opportuni-
ties during monthly business
reviews. Confirms actions and
deadlines.
Reviews and approves risks as
part of the Business Plan.
Reports top operational risks
to the Audit Committee at least
bi-annually.
Meets bi-annually to review
top risks to identify issues and
decide whether further ac-
tions are needed, or reporting
should beescalated.
Prepares a bi-annual risk re-
port to the Board of Directors
as a summary of top strategic
and operational risks.
Reviews deliverables from
management and provides
advice to the CEO.
Provides feedback
Reports
RISK REPORTING ROLES
Risk Reporting
The Group Risk Management Team (RM Team), which
is comprised of members of the current Group Func-
tion Management as defined in the Risk Management
Policy, is responsible to ensure that risks are addressed
adequately by Country and Solution Unit management.
This is performed bi-annually when the forum discuss-
es the risks and reviews them with a comparable view
to ensure adequate risk management is in place. The
forum provides feedback to the Audit Committee and
the Board of Directors.
Eltel Annual Report 2023 • 37
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
MOST SIGNIFICANT RISKS
Strategic risk Actions Type
Sales and EBITA development long term:
Eltel’s limited capability to adjust to fluctuating customer demands is a sales and profitability risk. During the strategy period
2024–2026 the actual timing of telecom customers’ CAPEX investments is uncertain. Furthermore, there is a risk that Eltel is not
able to scale-up capabilities as needed to serve the demand in new market segments such as e-Mobility, solar PV and mobile
indoor.
Inflation, challenges to increase sales prices and inability to realize savings measure targets as well as risk of customers
postponing projects may impact Eltels ability to improve profitability as planned.
Identified risks require action to develop the offering, typically by organic growth and/or M&A. Sales and EBITA
Financial risk:
The most significant financial risks are risks related to the availability of financing (refinancing and obtaining new loans) and liquidity.
As it is unlikely that bank financing can be increased in the short term, Eltel will likely have to seek some other form of liquidity
buffer to secure continued operations and investment in growth.
Financing and
liquidity
High dependency on 1-2 key customers especially in Norway and Sweden:
Changes in volumes coming from key customers and possible renegotiations can have a significant impact on the net sales and
profitability in both countries.
There are ongoing activities to find growth and broaden the customer base in both countries. Customers
High Voltage Poland:
There are significant profitability challenges in High Voltage Poland. Main reasons for the challenges are increased material and
labor costs due to high inflation. Furthermore, there are delays and problems with closing old projects, and a challenging market
in general.
Given the difficult conditions we are evaluating strategic alternatives for the Polish operations. High Voltage
Poland
Operative risk Actions Type
Health and safety in the working environment:
Lack of subcontractor availability on the market may lead to the selection of subcontractors with less experience and/or focus
on HSE, and thus their usage may lead to increased incidents and/or reputational damage to Eltel.
Focus on sharing of learnings from incidents and cascading safety bulletins throughout the organization including
subcontractors, mainly to technicians and project managers, to improve awareness and incident prevention.
Health and safety
Capacity and competences:
The availability of resources and finding the right competences is a challenge. The increasing salary levels make it even more
challenging to attract and retain the right people.
Increasing resources through recruitment and hiring subcontractors. Actions also include moving resources between teams
if possible to ensure the production capacity.
Capacity and
competence
Inconsistent ways of working:
Lack of standardized processes and ways of working decrease ability to reach desired savings, efficiency and EBITA targets as
well as perform accurate forecasting.
The above increases the risk of unexpected write-downs, penalties and/or poor result.
Process and tool development as well as sharing of key learnings. Processes
Inflation:
Inflation, especially in relation to salary levels, material prices, subcontracting costs and logistics costs negatively affect Eltel’s
profitability.
Mitigating factors include price increases in customer contracts. Inflation
IT & Cybersecurity:
Increased cybercrime activity can present risks to the Group’s data security and continuity. Human behavior is a key risk for IT
security (e.g. downloading of unlicensed or malicious software or improper data transfers).
Investing in capabilities to identify serious threats to security and continuity. Security training given high focus to secure that
the human firewall is in place.
IT & Cybersecurity
Sustainability:
There is a risk that during the tendering and planning phases the increasing sustainability related requirements are not fully con-
sidered, leading to unexpected costs, penalties and/or reputational damage for Eltel.
Further refer to Sustainability page 20.
Ensuring that sustainability risks are considered during the tendering and planning phases.
Further refer to Sustainability page 20.
Sustainability
Eltel Annual Report 2023 • 38
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Remuneration of senior executives
For information regarding remuneration to senior
executives in 2023 and 2022, please refer to note 29
Remuneration to senior executives, in the Consolidated
financial statements.
As it has been four years since the Guidelines for
Remuneration to Senior Executives were adopted, the
Board of Directors of Eltel AB will propose new guide-
lines to be adopted at the AGM 2024.
Guidelines for remuneration to senior executives
of the company
Eltel AB’s Annual General Meeting 2020 resolved to
adopt guidelines for remuneration to senior executives
on the following principal terms and conditions.
Scope and applicability of the guidelines
These guidelines for remuneration to senior executives
cover remuneration to the Board of Directors, the CEO,
the Deputy CEO and other senior executives (the Group
Management Team). The guidelines are applicable to
remuneration agreed, and amendments to remuneration
already agreed, after the adoption of the guidelines by
the Annual General Meeting 2020.
The guidelines apply until the general meeting
resolves to adopt new guidelines for remuneration to
senior executives. These guidelines do not apply to
any remuneration decided or approved by the general
meeting, e.g. remuneration to the Board of Directors
and long-term incentive programs, which are decided
separately by the general meeting of shareholders.
The guidelines promote the company’s business
strategy, long-term interest and sustainability
The Board of Directors considers that a prerequisite
of the successful implementation of the company’s
business strategy and safeguarding of its long-
term interests, including its sustainability, is that the
company is able to recruit and retain a highly competent
management with capacity of achieving specified goals.
To this end, it is necessary that the company can offer
competitive remuneration to motivate senior executives
to do their utmost. Variable cash remuneration covered
by these guidelines shall be based on criteria that aim at
promoting the company’s business strategy and long-
term interests, including its sustainability, and where the
fulfilment of the criteria is determined by the method set
out below. For a description of the company’s strategy,
please refer to www.eltelgroup.com/investors/investor-
information/strategy-and-targets/.
Forms of remuneration
The remuneration to senior executives shall be based
on market terms. The remuneration may consist of fixed
base salary, variable remuneration, pension, and certain
other benefits. In addition, the general meeting may –
regardless of these guidelines – resolve on share-related
or share price related remuneration.
Fixed base salary
Fixed base salary for senior executives reviewed yearly
and in accordance with local practices. The fixed base
salary constitutes 60-80% of total remuneration exclud-
ing LTI and assuming a 50% outcome of STI.
Cash short-term incentives (STI)
The aim of the short-term incentive is to reinforce the
right performance and behaviors – financially and oper-
ationally – and to align the individual performance with
the company’s business strategy, long-term interests,
and sustainability.
The key performance criteria for senior executives are
primarily financial, i.e. net sales, EBITA, net working cap-
ital (NWC) in relevant currencies and safety measured as
the lost time injury frequency rate (LTIFR). A minor part of
certain senior executives’ key performance criteria can
be discretionary under special circumstances.
The minimum financial performance of the company
for any STI pay-out is defined by the Board of Directors
as a level of result in EBITA. This level is set to guarantee
a lowest level of earnings for the company before any
STI pay-out is made.
The short-term incentives can amount to a maximum
of 80% of the fixed base salary for the CEO and 60% for
other senior executives.
Unless otherwise provided by mandatory law or obli-
gations in applicable collective bargaining agreements,
short-term incentives shall not entail any deposition of
pension.
The STI is paid in connection with the ordinary month-
ly salary that is paid four months after the end of the
qualifying period. The company is not able to recover
remuneration paid out as STI.
In specific situations, for example in relation to po-
tential divestments, M&A or specific projects, Eltel may
offer cash bonuses that are conditional on the success
of the specific transaction or project.
Long-term Incentives (LTI)
Senior executives can be offered share-related or share
price-related remuneration. LTI are intended to im-
prove the participants’ commitment to the company’s
development and they shall be implemented on market-
based terms. Resolutions on incentive programs related
to shares and share prices must be passed at the
general meeting and are therefore not covered by these
guidelines.
Other benefits
Pension
Senior executives are offered pension benefits that are
primarily based on defined insurance payments and in
accordance with local practices.The pension benefits
are generally funded through payments to insurance
companies or trustee-administered funds.
Company car
Senior executives are offered a company car and
other benefits (such as allowances to physical activity,
personal health, lunch facilities, health insurance etc.) in
accordance with local rules, regulations, and practices
in each country.
Other benefits constitute 4–14% of total remuneration
excluding LTI and assuming a 50% outcome of STI.
Notice of termination and severance pay
The senior executives’ employment or contractual
agreements shall be valid until further notice or for a
specified period of time.
The notice period is twelve months for the CEO in the
event of termination by the company and twelve months
in the event of termination by the CEO. In the event of
termination by the company, the CEO is entitled to a sev-
erance pay equivalent of twelve months’ fixed base salary
and payable in one sum. The total amount of the salary
and severance payment for the CEO may not exceed an
amount corresponding to two years’ fixed base salary.
The notice period is twelve months for other senior ex-
ecutives in the event of termination by the company and
six months in the event of termination by other senior
executives themselves. No other senior executive than
the CEO is entitled to severance payment.
Salary and terms of employment for employees
In preparing the Board of Directors’ proposal for these
remuneration guidelines, the salaries, and terms of
employment for the company’s employees have been
taken into account.
Information about employees’ total remuneration,
components of their remuneration as well as increases
in remuneration and increases over time have been ob-
tained and have constituted a part of the Remuneration
Committee’s and the Board of Directors’ decision basis
in their evaluation of the fairness of the guidelines and
the limitations arising from them.
Eltel Annual Report 2023 • 39
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The resolution process
The Board of Directors shall prepare a proposal for new
guidelines when there is a need for significant changes
to the guidelines, however at least every four years.
The Board of Directors’ proposal is prepared by the
Remuneration Committee. The chairman of the Board
of Directors may chair the Remuneration Committee. In
order to manage conflicts of interest, other members of
the Remuneration Committee who are elected by the
Annual General Meeting must be independent in relation
to the company and the senior executives.
The Remuneration Committee shall, inter alia, monitor
and evaluate the application of the guidelines for remuner-
ation to senior executives decided by the Annual General
Meeting. When the Remuneration Committee has pre-
pared the proposal, it is submitted to the Board of Directors
for decision.
The CEO or other senior executives shall not be
present while the Board of Directors addresses matters
related to remuneration and passes resolutions about
them, insofar as they are affected by the matters.
If the Annual General Meeting does not resolve to
adopt guidelines when there is a proposal for such, the
Board of Directors shall submit a new proposal no later
than the next Annual General Meeting. In such cases,
remuneration shall be paid in accordance with the cur-
rent guidelines or, if no guidelines exist, in accordance
with the company’s practice.
External advisors are used in the preparation of remu-
neration-related matters when deemed necessary.
Subsequent events
Alexandra Kärnlund appointed as the new Director
of Communications
On 26 February 2024, it was announced that Alexandra
Kärnlund has been appointed as the new Director of
Communications and member of the Group Manage-
ment Team. Alexandra Kärnlund replaces Elin Otter,
who is leaving Eltel for a position outside the company.
Alexandra Kärnlund will assume her role in April 2024.
Corporate Governance Report
Eltel has issued a Corporate Governance Report for the
financial year 2023. The Corporate Governance Report
has been prepared in accordance with the Swedish
Corporate Governance Code.
The Eltel share
Eltel’s shares are listed on Nasdaq Stockholm, under the
trading symbol “ELTEL”. As per 31 December 2023, the
total number of shares amounts to 160,585,581 divided
into 156,736,781 ordinary shares with 1 vote per share
and 3,848,800 C shares with 1/10 vote per share. The
share capital entered in the trade register per 31 Decem-
ber 2023 is EUR 161,950,203.
More about the Eltel share please refer to page 91–92.
Dividend policy
A dividend policy has been adopted whereby 50% of
Eltel’s consolidated net profit shall be paid in dividends
over time (with flexibility in relation to the pay-out ratio).
The Parent Company
Eltel AB owns and governs the shares of Eltel Group.
The Company holds management functions but has
no operative business activities and its risks are mainly
attributable to the value and activities of its subsidiaries.
The Parent Company’s income amounted to EUR 1.9
million (2.5) related to support function services provid-
ed to the Group. The operating expenses amounted to
EUR 7.4 million (7.3).
Financial income amounted to EUR 20.8 million (21.5)
related to interest income from Group companies.
Financial expenses amounted to EUR 3.6 million (1.9)
and Group contribution of EUR 11.6 million (14.5) was
given to a subsidiary company. Net result was EUR 0.1
million (0.3).
The Board’s proposal for the
distribution of profits
The Parent Company’s non-restricted equity on 31
December 2023 was EUR 306,353,801.93 of which the
net profit for the year was EUR 127,714.89. The Board
of Directors proposes to the Annual General Meeting
that no dividend be paid for the year 2023 and that
the non-restricted equity of EUR 306,353,801.93 be
retained and carried forward.
Eltel Annual Report 2023 • 40
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Corporate Governance report
Eltel AB (publ) (hereafter referred to as “Eltel” or the “Company”) is a Swedish public
limited liability company with its shares admitted to trading on Nasdaq Stockholm.
Eltel complies with the guidelines and provisions of its
Articles of Association, the Swedish Companies Act
(Sw. Aktiebolagslagen (2005:551)), the Swedish Annual
Accounts Act (Sw. Årsredovisningslagen (1995:1554)),
the rules and regulations of Nasdaq Stockholm’s Rule
Book for Issuers, as well as other applicable Swedish
and international laws and regulations. Eltel applies the
Swedish Corporate Governance Code (the “Code”),
issued by The Swedish Corporate Governance Board
(Sw. Kollegiet för svensk bolagsstyrning), available at
www.corporategovernanceboard.se.
Eltel’s Audit Committee has reviewed this Corporate
Governance Report (the “Report”) and confirms that
the description of the main features of the internal audit
and risk management section, as related to the financial
reporting process, is consistent with the financial state-
ments, as set out in Eltel’s Annual Report 2023.
Eltel’s governance structure
Eltel’s internal governance is regulated by the Swedish
Companies Act and the Code.
Shareholders
Ownership structure
As per 31 December 2023, Eltel has 3,676 shareholders.
The four largest shareholders of Eltel AB are Solero Lux-
co S.á.r.l. 16.3% (a company controlled by Triton Funds),
Wipunen Varainhallinta Oy 14.3%, the Fourth Swedish
National Pension Fund (AP4) 9.6%, and Heikintorppa
Oy 7.9%. The four largest shareholders referred above
together represent 48.2% of the votes in the Company.
ELTEL’S GOVERNANCE STRUCTURE
CEO
NorwayFinland Denmark
Other
business
Sweden
Legal & Sourcing
Business Development
Communications
& Investor Relations
Finance
& Administration
Board of
Directors
Annual
General
Meeting
Audit Committee
Auditors
Remuneration
Committee
Nomination Committee
Shares and votes
Eltel’s shares are listed on Nasdaq Stockholm, under the
trading symbol “ELTEL”. As per 31 December 2023, the
total number of shares amounts to 160,585,581 divided
into 156,736,781 ordinary shares with 1 vote per share
and 3,848,800 C shares with 1/10 vote per share. The
share capital entered in the trade register per 31 Decem-
ber 2023 is EUR 161,950,203.
The General Meeting of shareholders
The General Meeting of shareholders is Eltel’s highest
decision-making body. In addition to the Annual General
Meeting of shareholders, Extra-ordinary General Meet-
ings of shareholders may be convened at the discretion
of the Board of Directors or, if requested by the external
auditor or by shareholders holding at least 10% of the
shares. At the Annual General Meeting, shareholders
exercise their voting rights on matters such as:
• Approving the financial statements
• Deciding on the distribution of dividends
• Discharging the company’s Board of Directors
and CEO from liability for the financial year
• Electing the Company’s Board of Directors and
auditors and deciding on their remuneration
• Other matters as stipulated in the Swedish
Companies’ Act, the Articles of Association or
the Code, as applicable.
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All General Meetings are convened by notice in the
Swedish Official Gazette (Sw. Post- och Inrikes Tid-
ningar) and by publishing the notice of the meeting on
Eltel’s website. At the time of the notice, an announce-
ment with information that the notice has been issued
is published in the newspaper Svenska Dagbladet. Eltel
also publishes invitations to its General Meetings as
regulatory press releases.
All shareholders who have been entered in the
share register and have informed the Company of their
attendance within the time limit stated in the notice of
the meeting are entitled to participate at Eltel’s General
Meetings and vote according to the number of shares
held. Shareholders are also entitled to be represented
by a proxy at the meeting.
Annual General Meeting 2023
Eltel’s Annual General Meeting was held on 11 May 2023.
Shareholders representing 89,849,439 shares, consti-
tuting 57,3% of the total number of shares and votes in
the Company, participated. Matters addressed at the
meeting included the following:
• Resolution regarding adoption of the profit and loss state-
ment and the balance sheet and the consolidated profit
and loss statement and consolidated balance sheet and
resolution regarding appropriation of the Company’s profit
according to the adopted balance sheet
• Resolution regarding discharge from liability for the mem-
bers of the Board of Directors and the CEO
• Re-election of Ulf Mattsson, Gunilla Fransson, Joakim
Olsson, Roland Sundén, Ann Emilson and Erja Sankari as
members of the Board of Directors
• Election of KPMG AB as the auditor (whereby it was
announced that Fredrik Westin will continue as audi-
tor-in-charge)
• Resolution regarding approval of the Remuneration
Report for 2022
• Resolution regarding a share-based long-term incentive
program 2023 (“LTIP 2023”)
• Authorization for the Board of Directors to resolve to
issue new shares and authorization for the Board of
Directors to resolve to repurchase and transfer the
Company’s own shares.
The minutes of the Meeting and other related
documents can be found on Eltel’s website:
www.eltelgroup.com/about-us/corporate-governance/
annual-general- meeting/agm-archive/.
Annual General Meeting 2024 and Annual Report 2023
Eltel’s Annual General Meeting 2024 will be held on 14
May 2024.
The Annual Report 2023 will be made available on the
Group website from week 13, 2024, www.eltelgroup.com
and at Eltel AB headquarters, Adolfsbergsvägen 13,
Bromma, Sweden from week 17, 2024.
Nomination Committee
According to the instructions for the Nomination
Committee, the committee shall comprise a minimum
of four members, representing each of the four largest
shareholders registered on 31 August the year before
the Annual General Meeting. The Nomination Com-
mittee’s main duties are to propose candidates for the
Board of Directors, the Chairman of the Board, as well
as fees and other remuneration for the members of the
Board of Directors. The Nomination Committee is also
to make proposals on the election and remuneration of
the statutory auditor. Shareholders in Eltel are invited to
submit proposals to the Nomination Committee. The
Nomination Committee shall pay special attention to
the requirements relating to diversity and breadth of
qualifications, experience, and background, as well as
the requirement to strive for gender balance in the Board
of Directors.
An annual evaluation of the Board of Directors’ work,
expertise, composition, and independence of its mem-
bers is initiated by the Chairman of the Board of Directors,
partly to assess the preceding year and partly to identify
areas of development for the Board of Directors.
The evaluation is performed with the support of an
evaluation form and through discussions, as well as
through individual interviews of the members of the Board
of Directors.
Nomination Committee for the AGM 2024
For the 2024 Annual General Meeting, the Nomination
Committee consists of the following members:
• Gustaf Backemar, Chairman, Solero Luxco S.á.r.l.
(16.4% of votes)
• Peter Immonen, Wipunen Varainhallinta Oy (14.3%
of votes)
• Thomas Ehlin, the Fourth Swedish National Pension
Fund (9.6% of votes)
• Ingeborg Åkermarck, Heikintorppa Oy (7.9% of votes).
The members of the Nomination Committee have met
on three occasions and held separate sessions to inter-
view individual members of the Board.
The Nomination Committee’s complete proposals for
the 2024 Annual General Meeting will be published in
the notice convening the 2024 Annual General Meeting.
The Board of Directors
The Board of Directors’ responsibility is regulated by the
Swedish Companies Act, the Swedish Annual Accounts
Act, the Company’s Articles of Association, directions
given by the General Meeting and the Charter for Eltel’s
Board of Directors adopted by the Board of Directors.
In addition, the Board of Directors shall comply with the
Code and Nasdaq Stockholm’s Rule Book for Issuers, as
well as other applicable Swedish and international laws
and regulations.
Responsibility of the Board of Directors
The Board of Directors is responsible for the Compa-
ny’s organization and administration of the Company’s
affairs. The Board of Directors shall continuously assess
the Group’s financial situation, as well as ensure that the
Company’s organization is structured in such a way that
the accounting, management of funds and the financial
conditions are securely controlled.
The Board of Directors is also responsible for setting
objectives and strategies, ensuring efficient systems
for follow-up and control of the Company’s operations,
identifying how sustainability issues impact risks to and
business opportunities for the Company, and that sat-
isfactory controls are in place to ensure the Company’s
compliance with laws and other regulations applicable
to Eltel’s operations. Furthermore, the Board of Directors
shall ensure the implementation of appropriate policies
and other steering documents regarding the Company’s
conduct and that any public disclosure of information is
made in accordance with laws and established practices
(including Nasdaq Stockholm’s Rule Book for Issuers).
In addition, the tasks of the Board of Directors include
appointing, evaluating and, if necessary, dismissing the
CEO.
With the exception of employee representatives, mem-
bers of the Board of Directors are appointed at the Annual
General Meeting one year at a time for the period until the
end of the next Annual General Meeting. According to the
Company’s Articles of Association, the number of mem-
bers of the Board of Directors to be elected at the General
Meeting shall be no less than three and no more than ten
ordinary members and no more than three deputies.
In accordance with the Code, the majority of the mem-
bers of the Board of Directors shall be independent of the
Company and its management.
Eltel’s Board of Directors has adopted a Charter for
its work. The Charter is reviewed annually. The Charter
regulates, for example, the Board of Directors’ roles and
responsibilities, the Board’s ways of working and the
division of tasks within the Board. The Board of Directors
also has adopted an Instruction for the CEO of Eltel, as
well as an Instruction for financial reporting.
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Board of Directors in 2023
As per 31 December 2023, the Board of Directors con-
sists of eight ordinary members (six members elected by
the General Meeting of shareholders and two employee
representatives):
• Ulf Mattsson, Chairman
• Ann Emilson
• Gunilla Fransson
• Joakim Olsson
• Erja Sankari
• Roland Sundén
• Björn Tallberg, employee representative
• Stefan Söderholm, employee representative.
The members of the Board of Directors are presented
in greater detail in the section “Board of Directors” on
page 46.
The Chairman Ulf Mattsson and the Board members
Ann Emilson, Gunilla Fransson, Erja Sankari and Roland
Sundén are deemed to be independent of the owners
and the Company. Joakim Olsson is deemed to be inde-
pendent of the Company but dependent on significant
shareholders due to his positions in relation to Solero
Luxco S.á.r.l
Matters for the Board of Directors during 2023
In 2023, the main focus of the Board of Directors was to
ensure the implementation of the Company’s new strat-
egy, improvement of profitability and that other activities
for strengthening the balance sheet and lowering the net
debt also took place.
In 2023, the Board of Directors held 17 meetings. For
details of Board member participation in Board meet-
ings, please see table Board meeting participation 2023.
Evaluation of the Board of Directors’ performance
To ensure the quality of the work of the Board of
Directors and to identify the possible need for further
expertise and experience, the work of the Board of
Directors and its members is evaluated annually. In
2023, evaluations, led by the Chairman of the Board of
Directors, were carried out by way of each Board mem-
ber responding to an online questionnaire. The compiled
results were presented to the Board of Directors at the
final Board meeting of the year. The Chairman of the
Board of Directors also presented the results of the eval-
uations at a meeting with the Nomination Committee.
Board committees
An Audit Committee and a Remuneration Committee is
annually appointed by the Board of Directors in its con-
stituent meeting following the Annual General Meeting.
The Board of Directors may also appoint other com-
mittees, if deemed necessary. The Board of Directors
appoints the members of the committees and their
chairmen by taking account of the expertise and ex-
perience required for the duties. The members of each
committee are appointed for the same term of office as
the Board of Directors itself. The main responsibilities
of the committees, as further outlined below, are to
prepare matters that are within the Board of Directors’
decision power.
MEMBERS OF THE BOARD OF DIRECTORS
Name Position
Year
of birth
Election
year
Share
holding
Remuneration
EUR
Independence
from main owners
Independence
of the Company
Ulf Mattsson Chairman 1964 2017 129, 000 118,700 Yes Yes
Ann Emilson Member 1965 2022 – 44,700 Yes Yes
Gunilla Fransson Member 1960 2016 – 52,900 Yes Yes
Joakim Olsson Member 1965 2018 – 44,700 No Yes
Erja Sankari Member 1973 2022 – 44,700 Yes Yes
Roland Sundén Member 1953 2018 150,000 52,900 Yes Yes
Stefan Söderholm Employee represent. 1960 2021 – – Yes No
Björn Tallberg Employee represent. 1976 2015 – – Yes No
Andreas Nilsson
1)
Deputy employee rep. 1976 2022 – – Yes No
1)
Until 29 September 2023.
Information about the Board of Directors’ other assignments can be found on page 46.
BOARD MEETING PARTICIPATION 2023
31
Jan
5
Feb
6
Feb
15
Feb
6
Mar
16
Mar
24
Mar
3
May
11
May
2
Jun
21
Jun
26
Jul
23
Aug
29
Aug
19
Sep
1
Nov
21
Dec
29
Dec
Ulf Mattsson
• • • • • • • • • • • • • • • • • •
Ann Emilson
•
–
• • • • • • • • • • • • • • • •
Gunilla Fransson
• • • • •
–
• • • • • • • • • • • •
Joakim Olsson
•
– –
• •
–
• • • • • • • • • • • •
Erja Sankari
• • • • • • • • • • • • • • • • • •
Roland Sundén
• • • • • • • • • • • • • • • • • •
Stefan Söderholm
• • • • • • • • • • • • • • • • • •
Björn Tallberg
•
– –
• • • • • • •
– –
• •
–
•
– –
Andreas Nilsson
1)
• • • •
–
• • • •
–
• •
–
• •
– – –
1)
Until 29 September 2023.
The Audit Committee
The main responsibilities of the Audit Committee are to:
• Monitor the Company’s financial reporting
• Monitor the effectiveness of the Company’s internal
control, internal audit, and risk management
• Keep itself informed regarding the audit of the Annual
Report and Group accounts
• Review and monitor the impartiality and independ-
ence of the auditor, paying particular attention to
whether the auditor provides the Company with
services other than auditing services
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• Assist in the preparation of proposals to the resolu-
tions to the General Meeting regarding the election of
an auditor
• Advise and perform tasks that are specifically
delegated from the Board of Directors, if any.
As part of the tasks described above, the Chairman of
the Audit Committee shall support senior management
with matters related to financial reporting and infor-
mation disclosure and have ongoing contact with the
auditor on these topics.
The Audit Committee Chairman shall also support the
CEO, the CFO and Group Communications in matters
relating to information disclosure, financial reporting,
and media contacts, particularly in the event of a crisis.
The Audit Committee in 2023
As per 31 December 2023, the Audit Committee
consists of four members: Gunilla Fransson (Chairman),
Joakim Olsson, Erja Sankari and Roland Sundén.
In 2023, the Audit Committee held six meetings, at
which Eltel’s external auditor and representatives of the
Company’s management were present.
AUDIT COMMITTEE PARTICIPATION 2023
15
Feb
3
May
26
Jul
3
Oct
1
Nov
12
Dec
Gunilla Fransson
• • • • • •
Joakim Olsson
• • • •
–
•
Erja Sankari
• • • • • •
Roland Sundén
• • • • • •
The Remuneration Committee
The main responsibilities of the Remuneration Commit-
tee are to:
• Prepare the Board of Directors’ resolutions on issues
concerning remuneration principles, remunerations,
and other terms of employment for the senior man-
agement
• Monitor and evaluate programs for the variable remu-
neration of senior management, both ongoing and
terminated during the year
• Monitor and evaluate the application of the guidelines
for the remuneration of senior management upon
which the Annual General Meeting is legally obliged to
decide, as well as the current remuneration structures
and levels in the Company
• Assess and plan the succession of senior manage-
ment at Eltel.
The Remuneration Committee in 2023
As per 31 December 2023, the Remuneration Commit-
tee comprises three members: Ulf Mattsson (Chairman),
Ann Emilson and Roland Sundén.
The Remuneration Committee held three meetings
in 2023.
REMUNERATION COMMITTEE PARTICIPATION 2023
10
Feb
5
Oct
30
Nov
Ulf Mattsson
• • •
Ann Emilson
• • •
Roland Sundén
• • •
Remuneration principles at Eltel
Eltel’s guidelines for remuneration to senior executives,
as adopted at the Annual General Meeting 2020, are set
out in the Board of Directors’ Report. Eltel’s Remuner-
ation Report for 2023 will be submitted for approval at
Eltel’s Annual General Meeting 2024.
External Audit
The Annual General Meeting appoints an external
auditor for one year at a time. The external auditor is
responsible for auditing the annual financial statements
of the Group and Parent Company.
The external auditor also reviews the third quarter
interim report, the Corporate Governance Report, the
Sustainability Report and the Company’s administra-
tion. The external auditor attends all regular Audit
Committee meetings and reports observations related
to internal control, administration of the Company and
the review of the third quarter and the annual financial
statements. The external auditor attends at least one
Board meeting each year.
External auditor in 2023
The Annual General Meeting in 2023 elected KPMG AB
as Eltel’s external auditor for a one-year mandate, with
Fredrik Westin as auditor-in-charge. In 2023, total fees
paid to the external auditors, KPMG AB, amounted to
EUR 0.7 million, of which non-auditing services totalled
EUR 0.1 million.
Group Management Team
Chief Executive Officer
Eltel’s President and Chief Executive Officer (CEO)
reports to the Board of Directors. Håkan Dahlström is
the President and CEO of the Eltel Group. The CEO’s
responsibility is governed by the Swedish Companies
Act, the Swedish Annual Accounts Act, the Company’s
Articles of Association, directions given by the General
Meeting, Eltel’s Instructions to the CEO and other direc-
tions and guiding principles established by the Board of
Directors.
Group Management Team
The Group Management Team (“GMT”), chaired by the
CEO, meets a minimum of 10 times annually (10 times
in 2023). The GMT considers strategic and operational
issues related to the Group and its businesses, as well as
investments, Group structure and corporate steering sys-
tems, and it supervises the Company’s operations. The
GMT also delivers the annual business plan, budget and
forecast updates to the Board of Directors in accordance
with the Company’s established planning cycle.
The Group Management Team comprises the
following members
1)
:
• Håkan Dahlström, President and CEO
• Tarja Leikas, CFO
• Caroline Lindgren, General Counsel and Head of
Sourcing
• Elin Otter, Director, Communications and Investor
Relations
• Pamela Lundin, Director, Business Development
• Juha Luusua, Managing Director, Eltel Finland
• Lars Nilsson, Managing Director, Eltel Sweden
• Thor-Egel Bråthen, Managing Director, Eltel Norway
• Claus Metzsch Jensen, Managing Director, Eltel
Denmark.
Information on the members of the GMT can be found in
the Annual Report for 2023 on page 47.
1)
Saila Miettinen-Lähde, CFO, left the company on 31 July 2023 and was replaced on 1 August 2023 by the current CFO, Tarja Leikas. Henrik Sundell, General
Counsel, left the company on 31 January 2024 and was replaced on 1 February 2024 by the current General Counsel, Caroline Lindgren.
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Control systems
Guidelines and manuals
Eltel’s internal control system, which comprises all
corporate governance including policies, guidelines,
and procedures, is communicated via management,
and is organized according to the requirements of each
Country Unit and Solution Unit. Eltel’s IFRS Accounting
Manual contains instructions and guidance on ac-
counting and financial reporting to be applied at all Eltel
Group companies. The manual’s objective is to provide
guidance on Eltel Group accounting principles to be
applied in Group reporting as well as preparation of the
consolidated financial statements.
Fundamental Eltel policies cover areas such as
authorization, Code of Conduct, internal control and risk
management, reporting of suspected violations of laws,
ethics or misconduct (whistleblowing) to Eltel’s Com-
pliance unit, health and safety, communications and
investor relations, sustainability, restrictions on insider
trading, accounting and controlling.
As part of regular monitoring, Eltel conducts internal
audits to verify that the Company complies with the
approved governance. Regular reporting, follow-up and
escalation procedures have been implemented in which
the Audit Committee is ultimately made aware if issues
are identified.
The CEO is primarily responsible for implementing the
Board of Directors’ instructions in the day-to-day work.
The CEO regularly reports to the Board based on estab-
lished procedures. Furthermore, monthly operational
business reviews are conducted with the CEO and CFO.
Information and communications
All external communications are carried out in accord-
ance with the relevant regulations and Eltel’s Communi-
cations Policy.
Eltel has a Group Communications function that
focuses on four key communication areas: Investor
Relations, internal and external communications, brand
and marketing, as well as sustainability.
Follow-up
The Board of Directors and GMT monitor Eltel’s com-
pliance with adopted policies and guidelines. At each
Board meeting the Company’s financial position is
addressed. The Remuneration and Audit Committees
play key roles in terms of, for example, remuneration,
financial statements and internal control. Prior to the
release of interim reports and the Annual Report, the
Audit Committee and the Board of Directors review the
financial statements.
Eltel’s management conducts a monthly follow-up
of earnings, analyzing any deviations from the budget,
forecasts and the previous year.
The duties of the external auditor include performing
an annual review of the internal controls of the Group
and Group subsidiaries. Status and identified deviations
are addressed at the Audit Committee meetings or
escalated earlier, when appropriate.
The Board of Directors meets with the auditors once a
year to review the internal controls and, in specific cas-
es, to instruct the auditors to perform separate reviews
in specific areas. The auditors attend all regular Audit
Committee meetings.
Priority areas in 2023
Eltel’s significant priority areas for 2023 included the
following:
• Implementation of a new strategy
• Mitigating inflation through indexes and cost compen-
sation from customers
• Improving commercial capabilities
• Expanding our customer base and broadening
our offering
• Prioritize core operational improvements.
Internal audit 2023
Internal audit is responsible for the internal control
framework, risk management process, internal audits
and monitoring of Eltel’s compliance with governance,
which is based on applicable laws and generally accept-
ed accounting principles.
During the year, the function performed internal audits
and updated internal controls to assess and improve
process/control compliance and risk management. The
internal audits covered a selection of customer projects
and business processes. The outcome of the internal
audits and control testing has been followed-up and
communicated accordingly. The function will continue
to focus on the testing and development of internal
controls, leading the risk management process, as well
as internal audits of customer projects and key business
processes outlined in the 2024 internal audit plan.
Risk management
Please see Board of Director’s report page 37–38.
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Shares held in Eltel as of 31 December 2023.
Board of Directors
ANN EMILSON
Member of the Board
since 2022
Born: 1965
M.Sc. Industrial Management
and Engineering
Positions and other
board memberships:
EVP, Global Sales & Marketing
at Tobii AB.
Board committees:
Member of the
Remuneration Committee
Previous positions:
Head of Business Unit Public
& Key at Telia. Vice President,
Retail, Telecom and Utility
Business at CGI Stockholm.
Various managerial positions
at Ericsson AB.
Shareholding: –
GUNILLA FRANSSON
Member of the Board
since 2016
Born: 1960
M.Sc. and Tech.Lic. Chemical
Engineering
Positions and other
board memberships:
Chairman of the Board of
NetInsight AB. Member of the
Board of Dunker Foundation,
Trelleborg AB, Securitas AB
and Nederman AB.
Board committees:
Chairman of the
Audit Committee
Previous positions:
Head of Business Area at
Saab AB. Various positions
at Ericsson AB.
Shareholding: –
JOAKIM OLSSON
Member of the Board
since 2018
Born: 1965
MBA and M.Sc. Mechanical
Engineering
Positions and other
board memberships:
Operating Partner at Triton.
Chairman of the Board of
Seves Group S.á r.l. Chairman
of the Avisory Board of Arvos
Group and Dywidag.
Board committees:
Member of the Audit Committee
Previous positions:
Member of the Board of
Logstor A/S. Chairman of
the Board of Ovako Group
AB. Member of the Board
of FläktGroup GmbH, VCST
and Semcon AB. CEO at SAG
Group GmbH and Haldex AB.
Shareholding: –
ERJA SANKARI
Member of the Board
since 2022
Born: 1973
M.Sc. Economics
Positions and other
board memberships:
EVP and Chief Operating
Officer at iLOQ. Member of the
Board of Nurminen Logistics
and Partnera Oyj. Chairman
of the Board of Oulu Chamber
of Commerce.
Board committees:
Member of the Audit Committee
Previous positions:
Vice President, Global Supply
Chain at Nokia. Vice President,
Supply Chain Engineering at
Nokia. Head of Oulu Factory
at Nokia/Nokia Siemens
Networks. Various managerial
positions at NSN and Nokia.
Shareholding: –
ROLAND SUNDÉN
Member of the Board
since 2018
Born: 1953
M.Sc. Mechanical Engineering
Positions and other
board memberships:
MD at PrimeValue Consult AB.
Board committees:
Member of the Remuneration
Committee, Member of the
Audit Committee
Previous positions:
President at Hiab and Member
of Cargotec Executive Board.
President and CEO at LM Wind
Power. President, Agricultural
Division at Case New Holland.
Executive Vice President at
Volvo Construction Equipment.
Shareholding:
150,000 shares
STEFAN SÖDERHOLM
Member of the Board –
Employee Representative,
since 2021
Born: 1960
Member of the Board of
SEKO at Eltel Sweden.
Positions and other
board memberships: –
Board committees: –
Previous positions:
Several different technical and
managerial positions in the
current Eltel organization.
Shareholding: –
BJÖRN TALLBERG
Member of the Board –
Employee Representative,
since 2015
Born: 1976
Chairman of the trade union
Unionen at Eltel Sweden.
Positions and other
board memberships: –
Board committees: –
Previous positions:
Team Leader at Eltel Aviation &
Security. Network Engineer at
Eltel Aviation & Security.
Shareholding: –
ULF MATTSSON
Chairman of the Board
since 2017
Born: 1964
M.Sc. Economics
Positions and other
board memberships:
Chairman of the Board of
VaccinDirekt i Sverige AB,
Prima Vård AB and Attendo.
Member of the Board of
Addtech AB, Oras Invest Oy
and Priveq V AB. Advisor at
EQT and PJT Partners.
Board committees:
Chairman of the
Remuneration committee
Previous positions:
Chairman of the Board of
AcadeMedia, Musti ja Mirri,
Evidensia and Itslearning.
Member of the Board of
Gambro. CEO (interim) at
Gambro. CEO at Capio and
Mölnlycke Health Care.
Shareholding:
129,000 shares through
SIEM Design AB
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Eltel Annual Report 2023 • 46
Group Management Team
Shares held in Eltel as of 31 December 2023.
TARJA LEIKAS
CFO, since 2023
Born: 1967
M.Sc. Economics
Positions and other board
member ships: –
Previous positions: CFO
at Ginolis Group. COO at
Eniram Group. CFO (Acting)
CEO at Dovre Group. CFO
at TeliaSonera Finland. CFO,
Business Area Broadband
Services Finland at
TeliaSonera Group.
Shareholding:
7,000 shares
CAROLINE LINDGREN
General Counsel and Head
of Sourcing, since 2024
Born: 1978
Master of Laws (LL.M.)
Positions and other board
member ships: –
Previous positions: Head
of Legal Sweden at Sweco
Sverige AB. Group Legal
Counsel at Sweco AB.
Associate and Attorney
at Mannheimer Swartling
Advokatbyrå AB.
Shareholding: –
HÅKAN DAHLSTRÖM
President and CEO since
2022
Born: 1962
M.Se. Computer Technology
and M.Sc. Digital Technology
Positions and other board
member ships: –
Previous positions: CEO at
Fujitsu Sweden AB. CEO at
Tieto Sweden AB and Exec-
utive Vice President, Tieto
Corporation. President,
Mobile Business area at
TeliaSonera AB. President,
Broadband Business area at
TeliaSonera AB. Commander,
Swedish Royal Navy.
Shareholding:
500,000 shares
ELIN OTTER
Director, Communications
and Investor Relations,
since 2019
Born: 1978
Bachelor of Arts, Journalism
and News Editorial
Positions and other board
member ships: –
Previous positions: Head of
Group Communications at
Eltel AB. Head of Commu-
nications and Marketing
Nordics at Triton. Various
managerial positions at
Skanska.
Shareholding:
21,304 shares
LARS NILSSON
Managing Director,
Eltel Sweden, since 2023
Born: 1967
B.Sc. Business
Administration
Positions and other board
member ships: –
Previous positions: CEO at
CERTEGO Group. CEO at
Marum Management AB.
CEO at Imtech VS-teknik
AB. CEO at Ericsson Local
Services AB. CEO at
GoExcellent AB. Various
management positions at
Microsoft.
Shareholding:
10,000 shares
JUHA LUUSUA
Managing Director,
Eltel Finland, since 2018
Born: 1965
M.Sc. Electrical Engineering
Positions and other board
member ships: Member
of the Board of Sähköpooli
(part of the Finnish National
Emergency Supply Agency)
and Football Association of
Finland.
Previous positions:
President BU Power at Eltel.
President Power Distribution
at Eltel. Managing Director
Country Unit Finland, Eltel
2008–. SVP Electricity
at Eltel Networks/Group
Corporation.
Shareholding:
162,323 shares
THOR-EGEL BRÅTHEN
Managing Director,
Eltel Norway, since 2018
Born: 1965
INSEAD Executive
Management Programme,
Certified service electronics
technician
Positions and other board
member ships: –
Previous positions: Director
Fixed Telecom/Deputy Chief
Executive Officer at Eltel
Networks AS. CEO at Eltel
Networks AS. QA Manager
at Eltel Networks AS. CEO at
Niscayah Denmark.
Shareholding:
5,000 shares
CLAUS METZSCH JENSEN
Managing Director,
Eltel Denmark, since 2018
Born: 1968
M.Sc. Business
Administration
Positions and other board
member ships: Member of
the Board of NKEL I/S.
Previous positions: Vice
President at Caverion A/S.
Senior Vice President at TDC
A/S.
Shareholding:
26,000 shares
PAMELA LUNDIN
Director, Business
Development, since 2023
Born: 1970
M.Sc. Political Science
Positions and other board
member ships: Member
of Council, Chamber of
Commerce and Industry
of Southern Sweden.
Previous positions: CEO at
Enercon’s Swedish, Norwe-
gian and Finnish operations.
COO at Enercon GmbH
Germany Filial. Deputy CEO
and Member of the Board of
Enercon Energy Converter
AB. Project Manager/Project
Developer at Eurowind AB.
Shareholding: –
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Eltel Annual Report 2023 • 47
Consolidated
financial statements
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Eltel Annual Report 2023 • 48
Consolidated income statement
EUR million | Note | 2023 | 2022 |
Net sales | |||
Cost of sales | 7 | - | - |
Gross profit | |||
Other income | 7,8 | ||
Selling and administrative expenses | 7 | - | - |
Other expenses | 7,9 | - | - |
Operating result (EBIT) | - | - | |
Financial income | |||
Financial expenses | - | - | |
Net financial expenses | 11 | - | - |
Result before taxes | - | - | |
Taxes | 12 | - | |
Net result | - | - | |
| Attributable to: | |||
Equity holders of the parent | - | - | |
Non-controlling interest | 25 | ||
Earnings per share (EPS) | 13 | ||
Basic, EUR | - | - | |
Diluted, EUR | - | - |
Consolidated statement of comprehensive income
EUR million | Note | 2023 | 2022 |
Net result for the year | - | - | |
| Other comprehensive income: | |||
| Items that will not be reclassified to profit and loss | |||
Revaluation of defined benefit plans, net of tax | - | ||
| Items that may be subsequently reclassified to profit and loss | |||
Net investment hedges, net of tax | - | ||
Currency translation differences | - | - | |
Total | - | - | |
Other comprehensive income/loss for the year, net of tax | - | - | |
Total comprehensive income/loss for the year | - | - | |
| Total comprehensive loss attributable to: | |||
Equity holders of the parent | - | - | |
Non-controlling interest | 25 |
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Eltel Annual Report 2023 • 49
Consolidated balance sheet
EUR million | Note | 31 Dec 2023 | 31 Dec 2022 |
| ASSETS | |||
| Non-current assets | |||
Goodwill | 26 | ||
Intangible assets | 26 | ||
Property, plant and equipment | 27 | ||
Right-of-use assets | 28 | ||
Deferred tax assets | 24 | ||
Financial assets | 30,31 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | 21 | ||
Trade and other receivables | 4,17,20 | ||
Cash and cash equivalents | |||
Total current assets | |||
TOTAL ASSETS |
EUR million | Note | 31 Dec 2023 | 31 Dec 2022 |
| EQUITY AND LIABILITIES | |||
Equity | 15 | ||
Share capital | |||
Other equity | |||
Equity attributable to shareholders of the parent | |||
Hybrid bond | |||
Non-controlling interest | 25 | ||
Total equity | |||
| Non-current liabilities | |||
Interest-bearing debt | 16,17 | ||
Leasing liabilities | 16,17,28 | ||
Retirement benefit obligations | 31 | ||
Deferred tax liabilities | 24 | ||
Provisions | 22 | ||
Other non-current liabilities | |||
Total non-current liabilities | |||
| Current liabilities | |||
Interest-bearing debt | 16,17 | ||
Leasing liabilities | 16,17,28 | ||
Provisions | 22 | ||
Advances received | 4 | ||
Trade and other payables | 17,23 | ||
Total current liabilities | |||
Total liabilities | |||
TOTAL EQUITY AND LIABILITIES |
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Consolidated statement of cash flow
EUR million | Note | 2023 | 2022 |
| Cash flow from operating activities | |||
Operating result (EBIT) | - | - | |
| Adjustments: | |||
Depreciation and amortization | |||
Gain/loss on sales of assets and business | - | - | |
Defined benefit pension plans | - | - | |
Other non-cash adjustments | - | - | |
Cash flow from operations before interests, taxes and changes in working capital | |||
Interests received | |||
Interest and other financial expenses paid | - | - | |
Income taxes received/paid | - | - | |
Cash flow from operations before changes in working capital | |||
| Changes in working capital: | |||
Trade and other receivables | - | ||
Trade and other payables | |||
Inventories | - | ||
Changes in working capital | |||
Net cash from operating activities |
EUR million | Note | 2023 | 2022 |
| Cash flow from investing activities | |||
Purchases of property, plant and equipment (PPE) | - | - | |
Proceeds from sale of property, plant and equipment ( PPE) | |||
Net cash from investing activities | - | - | |
| Cash flow from financing activities | |||
Proceeds from issuance of hybrid bond | |||
Payments of transaction costs and interests for hybrid bond | - | ||
Proceeds from issuance of share capital | |||
Acquisition of own shares | - | - | |
Proceeds from long-term financial liabilities | 16 | ||
Proceeds from short-term financial liabilities | 16 | ||
Payments of short-term financial liabilities | 16 | - | - |
Payments of financial liabilities, term loans | 16 | - | - |
Payments of lease liabilities | 16 | - | - |
Dividends to non-controlling interest | - | - | |
Change in non-liquid financial assets | |||
Net cash from financing activities | - | ||
Net change in cash and cash equivalents | - | ||
Cash and cash equivalents at beginning of the year | |||
Foreign exchange rate effect | - | ||
Cash and cash equivalents at end of the year |
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Consolidated statement of changes in equity
| Equity attributable to shareholders of the parent | ||||||||||
| Revaluation of | Hedging | Non- | ||||||||
| Other paid-in | Accu mulated | defined benefit | reserve, | Currency | controlling | Total | ||||
EUR million | Share capital | capital | losses | plans, net of tax | net of tax | translation | Total | Hybrid bond | interest | equity |
1 Jan 2023 | - | - | - | |||||||
Total comprehensive income for the year | - | - | - | - | - | |||||
Proceeds from hybrid bond | ||||||||||
Transaction costs and interests on hybrid bond | - | - | - | |||||||
Transactions with owners 1) : | ||||||||||
Proceeds from shares issued | ||||||||||
Purchase of own shares | - | - | - | |||||||
Equity-settled share-based payment | ||||||||||
Dividends paid to non-controlling interests | - | - | ||||||||
Total transaction with owners | - | - | - | |||||||
31 Dec 2023 | - | - | - | |||||||
| 1) | For more information about equity-settled share-based payments see note 29 Remuneration to senior executives and for share transactions see note 15 Shares and share capital. | |||||||||
| Equity attributable to shareholders of the parent | ||||||||||
| Revaluation of | Hedging | Non- | ||||||||
| Other paid-in | Accu mulated | defined benefit | reserve, | Currency | controlling | Total | ||||
EUR million | Share capital | capital | losses | plans, net of tax | net of tax | translation | Total | Hybrid bond | interest | equity |
1 Jan 2022 | - | - | - | |||||||
Total comprehensive income for the year | - | - | - | - | ||||||
Transactions with owners 1) : | ||||||||||
Share capital reduction | - | |||||||||
Proceeds from shares issued | ||||||||||
Purchase of own shares | - | - | - | |||||||
Equity-settled share-based payment | ||||||||||
Dividends paid to non-controlling interests | - | - | ||||||||
Total transaction with owners | - | - | - | |||||||
31 Dec 2022 | - | - | - | |||||||
1)
For more information about equity-settled share-based payments see note 29 Remuneration to senior executives and for share transactions see note 15 Shares and share capital.
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Notes to the consolidated financial statements
Basis for preparation
1 Corporate information 54
2 Material accounting policies for the consolidated accounts 54
Financial performance
3 Segment reporting 59
4 Revenue recognition 60
5 Personnel by segment 61
6 Employee benefit expenses 61
7 Function expenses by nature 61
8 Other income 61
9 Other expenses 61
10 Depreciation and amortization 62
11 Financial income and expenses 62
12 Income tax 62
13 Earnings per share 62
Financial risk management and capital structure
14 Financial risk management 63
15 Shares and share capital 66
16 Borrowings 67
17 Financial instruments by category 68
18 Derivative financial instruments 69
19 Commitments and contingent liabilities 69
Working capital and deferred taxes
20 Trade and other receivables 70
21 Inventories 70
22 Provisions 70
23 Trade and other payables 70
24 Deferred tax 71
Business combinations and capital expenditure
25 Non-controlling interests 72
26 Intangible assets 73
27 Property, plant and equipment 74
28 Leasing 74
Remuneration and other
29 Remuneration to senior executives 75
30 Financial assets 77
31 Retirement benefit obligations 77
32 Auditors’ fees 78
33 Related party information 78
34 Group companies 78
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Basis for preparation
This section comprises the following notes
1 Corporate information 54
2 Material accounting policies for the consolidated accounts 54
NOTE 1 CORPORATE INFORMATION
a comprehensive range of solutions – from maintenance and upgrade services to project
delivery. This includes design, planning, building, installing and securing the operation of
power and communication networks for a more sustainable and connected world today
and for future generations. In 2023, the number of employees was approximately 5,000.
Eltel mainly operates in the Nordic market , but is also represented in Poland, Germany
and Lithuania.
The address of the head office is Adolfsbergsvägen 13, Bromma , Sweden . Eltel AB’s
ordinary shares are quoted on the Nasdaq Stockholm. The operations of Eltel AB through
the subsidiary companies are performed under the Eltel brand. The consolidated group is
called Eltel Group.
management functions but has no operative business activities and its risks are mainly
attributable to the value and activities of its subsidiaries.
NOTE 2
MATERIAL ACCOUNTING POLICIES FOR THE
CONSOLIDATED ACCOUNTS
European Single Electronic Format (ESEF)
As required under the EU Commission’s Delegated Regulation (EU) 2019/815 (ESEF
Regulation), Eltel’s annual report for the financial year 2023 is filed in the European Single
Electronic Format (ESEF). The primary statements and notes in the IFRS consolidated
financial statements are tagged in accordance with ESEF taxonomy in electronic format
called iXBRL. ESEF taxonomy is developed by ESMA and it is based on the IFRS taxon-
omy published by the IFRS foundation.
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
trolling interest is presented separately from the net profit and disclosed as a separate
Foreign currency translation
Foreign subsidiaries
Income statements and cash flow statements of foreign subsidiaries are translated into
Euros at the average exchange rates for each month and the balance sheets are trans-
lated using the exchange rates prevailing at the balance sheet date. Exchange differ-
ences arising from the translation are recognized in other comprehensive income.
When a subsidiary is partially disposed or sold, exchange differences that were
recorded in equity are recognized in the income statement as part of the gain or loss on
the sale.
takes place when a customer obtains control of the related good(s) or service(s) and has
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Eltel Annual Report 2023 • 57
Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Provisions and contingent liabilities (IAS 37)
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Financial performance
This section comprises the following notes
3 Segment reporting 59
4 Revenue recognition 60
5 Personnel by segment 61
6 Employee benefit expenses 61
7 Function expenses by nature 61
8 Other income 61
9 Other expenses 61
10 Depreciation and amortization 62
11 Financial income and expenses 62
12 Income tax 62
13 Earnings per share 62
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
NOTE 5 PERSONNEL BY SEGMENT
Number of personnel by segment
Average 2023
Of whom
men % 2022
Of whom
men %
Finland 1,503 91 1,498 92
Sweden 988 85 919 86
Norway 860 87 938 87
Denmark 511 88 484 89
Other business 995 84 1,071 85
Group and shared functions 166 36 143 36
Total personnel, average 5,024 86 5,053 87
Total personnel, year-end 4,931 86 5,063 87
NOTE 6 EMPLOYEE BENEFIT EXPENSES
Employee benefit expenses
EUR million 2023 2022
Wages and salaries 254.3 248.1
Post-employment benefits:
Defined benefit plans -1.1 -0.7
Defined contribution plans 25.7 24.6
Other statutory social costs 34.0 34.0
Total 312.8 305.9
Employee benefit expenses by function
EUR million 2023 2022
Cost of sales 259.5 255.5
Selling and administrative expenses 53.6 50.3
Sum in operative expenses 313.1 305.9
Financial income and costs -0.3 0.1
Total 312.8 305.9
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
NOTE 10 DEPRECIATION AND AMORTIZATION
EUR million 2023 2022
Amortization on customer relationships – 0.1
Depreciation of right-of-use assets 23.2 21.8
Other depreciation and amortization 6.9 7.8
Total 30.1 29.8
The total amount recognized in the income statement is divided by function as follows:
EUR million 2023 2022
Cost of sales 17.8 17.2
Selling and administrative expenses 12.3 12.6
Total 30.1 29.8
NOTE 13 EARNINGS PER SHARE
2023 2022
Net result attributable to equity holders of the parent -7.9 -15.0
Interest on hybrid bond -2.5 –
Net result attributable to ordinary shares -10.4 -15.0
Weighted average number of ordinary shares, basic 156,736,781 156,699,058
Weighted average number of ordinary shares, diluted 156,736,781 156,789,278
Earnings per share, basic -0.07 -0.10
Earnings per share, diluted -0.07 -0.10
The basic earnings per share figure is calculated by dividing the net income attributable
to the shareholders of the parent company by the weighted average number of ordinary
shares outstanding during the year. Diluted earnings per share is calculated by adjusting
the weighted average number of ordinary shares by the effect of potential diluting shares
due to share-based incentive plans in the Group.
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Financial risk management and
capital structure
This section comprises the following notes
14 Financial risk management 63
15 Shares and share capital 66
16 Borrowings 67
17 Financial instruments by category 68
18 Derivative financial instruments 69
19 Commitments and contingent liabilities 69
NOTE 14 FINANCIAL RISK MANAGEMENT
The Group has exposure to the following financial risks:
• Market risks, including currency, interest rate and commodity price risks
• Liquidity risk
• Credit risk
The Group’s financing and financial risk management is carried out by a central treasury
department (Group Treasury) under the Treasury Policy approved by the Board of Direc-
tors. Group Treasury Policy has been established to identify and analyze the financial
risks faced by the Group, to set appropriate risk limits and controls and to monitor risk
and adherence to limits. The Treasury Policy and the related financial risk management
policies and procedures are reviewed regularly to reflect changes in market conditions
and Group’s activities. The main objective of the financial risk management is to minimise
the unfavourable effects of the financial risks on the Group’s income and cash flow.
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
NOTE 18 DERIVATIVE FINANCIAL INSTRUMENTS
EUR million
Nominal
values
Fair
values
Positive
Fair
values
Negative
31 Dec 2023
Foreign exchange derivatives 52.8 0.0 -0.1
Total 52.8 0.0 -0.1
31 Dec 2022
Foreign exchange derivatives 39.7 0.1 -0.0
Total 39.7 0.1 -0.0
All derivative contracts have been made according to the Group Treasury Policy. The
Group determines the existence of an economic relationship between the hedging instru-
ment and hedged item based on the currency, amount and timing of their respective cash
flows. The Group has not applied hedge accounting to any derivative financial instru-
ments in 2023 or 2022. More information on the financial risks which are hedged by the
derivative financial instruments are presented in note 14.
EUR thousands
31 Dec 2023 31 Dec 2022
Carrying
amounts
Related
instruments
that are
not offset
Net
amounts
Carrying
amounts
Related
instruments
that are
not offset
Net
amounts
Financial assets
Foreign exchange
derivatives 10 -10 0 85 -2 84
Financial liabilities
Foreign exchange
derivatives -107 10 -97 -39 2 -37
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Working capital and
deferred taxes
This section comprises the following notes
20 Trade and other receivables 70
21 Inventories 70
22 Provisions 70
23 Trade and other payables 70
24 Deferred tax 71
NOTE 21 INVENTORIES
EUR million 31 Dec 2023 31 Dec 2022
Raw materials and consumables 9.4 9.3
Work in progress 7.9 15.5
Total 17.3 24.8
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
NOTE 24 DEFERRED TAX
Deferred tax assets and liabilities
EUR million 31 Dec 2023 31 Dec 2022
Deferred tax assets 27.9 16.3
Deferred tax liabilities -11.3 -10.3
Net deferred tax assets 16.6 6.0
The movement on the deferred income tax amount during the year:
EUR million 2023 2022
1 Jan 6.0 7.7
Recognized in the income statement 10.0 -0.1
Recognized in other comprehensive income:
Translation differences 0.2 0.5
Defined benefit plans 0.4 -2.0
Hedge accounting – 0.0
31 Dec 16.6 6.0
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred
income taxes relate to the same fiscal authority.
The movement in deferred income tax assets and liabilities:
Deferred tax assets
EUR million
Retirement benefit
obligations
Tax losses carried
forward Leasing liabilities
Other temporary
differences Total
1 Jan 2022 1.9 12.9 – 3.6 18.4
Recognized in the income statement 0.0 -2.0 – 2.0 0.0
Recognized in other comprehensive income -1.6 – – – -1.6
Translation differences -0.2 -0.3 – -0.0 -0.5
31 Dec 2022 0.2 10.5 – 5.6 16.3
Opening balance adjustment – – 10.0 -0.3 9.7
Recognized in the income statement -0.2 10.0 1.3 1.3 12.4
Translation differences 0.0 0.1 0.0 0.2 0.4
Offsetting – – -10.9 – -10.9
31 Dec 2023 0.0 20.7 0.4 6.8 27.9
Deferred tax assets are recognized for tax loss carry forwards and temporary differences to the extent that the realisation of the related tax benefit against future taxable profits is
probable. The future taxable profit estimate is based on current business plans approved by management.
Gross amount of EUR 20.7 million (10.5) deferred tax assets are recognized for losses carried forward, of which EUR 11.4 million (5.6) relates to operations in Sweden. The change
in the gross amount during 2023 relates mainly to re-recognition of deferred tax assets in Sweden and Germany as well as expiry of previously recognized losses for Finland. On 31
December 2023 the Group had in its main operational countries a total of EUR 165.2 million (185.5) tax losses for which no deferred tax asset was recognized. Of these tax losses EUR
0.0 million (1.9) will expire within five years and EUR 165.2 million (183.5) does not have expiry date.
Deferred tax liabilities
EUR million
Retirement benefit
asset Fair value adjustment Right-of-use assets
Other temporary
differences Total
1 Jan 2022 – 5.7 – 4.9 10.7
Recognized in the income statement 0.8 0.0 – -0.6 0.1
Recognized in other comprehensive income 0.5 – – – 0.5
Translation differences 0.0 -0.8 – -0.2 -1.0
31 Dec 2022 1.3 4.9 – 4.1 10.3
Opening balance adjustment – – 9.7 – 9.7
Recognized in the income statement 0.9 – 1.2 0.3 2.4
Recognized in other comprehensive income -0.4 – – – -0.4
Translation differences 0.0 -0.1 0.0 0.2 0.2
Offsetting – – -10.9 – -10.9
31 Dec 2023 1.8 4.8 0.0 4.6 11.3
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Business combinations and
capital expenditure
This section comprises the following notes
25 Non-controlling interests 72
26 Intangible assets 73
27 Property, plant and equipment 74
28 Leasing 74
NOTE 25 NON-CONTROLLING INTERESTS
EUR million
Subsidiaries with
non-controlling interest
Summarized statement of balance sheet 31 Dec 2023 31 Dec 2022
Current assets 28.8 28.2
Non-current assets 4.4 3.8
Total assets 33.2 32.0
Current liabilities 12.0 12.1
Non-current liabilities 2.1 1.5
Total liabilities 14.1 13.6
Equity:
Shareholders’ equity 19.1 18.4
Non-controlling interest 7.6 7.4
Summarized income statement 2023 2022
Net sales 39.2 35.3
Net result 0.8 0.2
Total comprehensive income 0.8 0.2
Total comprehensive income allocated to
non-controlling interests 0.3 0.1
Dividends paid to non-controlling interest -0.0 -0.4
Summarized cash flows 2023 2022
Cash flow from operating activities 0.7 1.5
Cash flow from investing activities -0.1 -0.1
Cash flow from financing activities -0.6 -1.4
% of ownership 60% 60%
Eltel Networks Pohjoinen Oy, in Finland, is a subsidiary with a non-controlling interest of
40%.
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NOTE 27 PROPERTY, PLANT AND EQUIPMENT
2023
EUR million Land Buildings
Machinery and
equipment Total
Cost 1 Jan 0.1 0.9 69.3 70.2
Additions – 0.0 3.9 3.9
Disposals – – -0.2 -0.2
Translation differences 0.0 0.1 0.8 0.9
Cost 31 Dec 0.1 1.0 73.8 74.8
Accumulated depreciation 1 Jan 0.0 0.3 59.2 59.5
Accumulated depreciation of disposals – – -0.2 -0.2
Depreciation during the year – 0.0 4.0 4.1
Impairment – – 0.0 0.0
Translation differences 0.0 0.0 0.8 0.9
Accumulated depreciation 31 Dec 0.1 0.4 63.9 64.3
Carrying value 1 Jan 0.0 0.6 10.1 10.7
Carrying value 31 Dec 0.0 0.6 9.9 10.5
2022
EUR million Land Buildings
Machinery and
equipment Total
Cost 1 Jan 0.1 0.9 68.4 69.4
Additions – 0.0 3.9 3.9
Disposals – – -0.9 -0.9
Translation differences -0.0 -0.0 -2.1 -2.1
Cost 31 Dec 0.1 0.9 69.3 70.2
Accumulated depreciation 1 Jan 0.0 0.2 57.5 57.7
Accumulated depreciation of disposals – – -0.8 -0.8
Depreciation during the year – 0.0 4.5 4.5
Impairment – – 0.0 0.0
Translation differences -0.0 -0.0 -1.9 -2.0
Accumulated depreciation 31 Dec 0.0 0.3 59.2 59.5
Carrying value 1 Jan 0.0 0.6 11.0 11.6
Carrying value 31 Dec 0.0 0.6 10.1 10.7
Right-of-use assets are not included in property, plant and equipment. See following
note 28 for more information about leases.
NOTE 28 LEASING
Under IFRS 16 Eltel recognizes a right-of-use asset representing its right to use the
underlying asset and a lease liability representing its obligation to make lease payments.
Right-of-use assets are depreciated on a straight line basis and an interest expense is
recognized under financing expenses for the lease liabilities. IFRS 16 requires use of
estimates for valuating contracts that are valid until further notice (continuous contracts).
Lengths of these contracts have been estimated based on expected usage in current
business operations.
IFRS 16 leasing expenses in income statement
EUR million 2023 2022
Depreciation
Depreciation of right-of-use assets 23.2 21.8
Other operating expenses
Short-term lease expense 3.2 2.5
Expense for leases of low-value assets 2.4 2.1
Financial expenses
Interest expense on lease liabilities 2.6 2.1
Total 31.4 28.4
Right-of-use assets
EUR million Buildings
Machinery and
equipment Total
1 Jan 2022 31.2 22.1 53.3
Additions 5.4 13.7 19.2
Depreciation -8.9 -13.0 -21.8
Other -2.7 -1.4 -4.1
31 Dec 2022 25.0 21.5 46.5
Additions 8.2 26.1 34.3
Depreciation -8.9 -14.4 -23.2
Other -3.8 -1.9 -5.7
31 Dec 2023 20.5 31.4 51.9
Leasing liabilities
EUR million Non-current Current Total
1 Jan 2022 35.8 18.6 54.5
Changes during the year -4.9 -1.8 -6.7
31 Dec 2022 31.0 16.8 47.8
Changes during the year 3.0 3.1 6.1
31 Dec 2023 33.9 19.9 53.9
Maturity analysis of leasing liabilities is presented in note 14.2 Liquidity risk. In addition,
the Group is committed to EUR 0.5 million (0.4) future lease payments for short-term
lease commitments.
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Eltel Annual Report 2023 • 74
Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Remuneration and other
This section comprises the following notes
29 Remuneration to senior executives 75
30 Financial assets 77
31 Retirement benefit obligations 77
32 Auditors’ fees 78
33 Related party information 78
34 Group companies 78
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Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
NOTE 30 FINANCIAL ASSETS
EUR million 31 Dec 2023 31 Dec 2022
Defined benefit pension asset 8.6 5.9
Investments 0.8 0.7
Other non-current receivables 0.4 0.5
Total non-current financial assets 9.8 7.1
Refer to following note 31 Retirement benefit obligations for more information about
defined benefit pension asset.
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NOTE 32 AUDITORS’ FEES
EUR million 2023 2022
Main auditor
Audit 0.6 0.7
Other services 0.1 0.1
Total 0.7 0.8
Other auditing firms
Audit 0.1 0.1
Other services 0.1 0.2
Total 0.2 0.3
Total 0.9 1.1
The main auditor of the Group in 2023 and 2022 has been KPMG.
NOTE 33 RELATED PARTY INFORMATION
Eltel’s related parties include the parent company Eltel AB and its subsidiaries and jointly
controlled entities. Related parties include also the members of the Board of Directors,
the CEO and other management team members. In addition, significant unusual transac-
tions with shareholders are included in related party transactions.
In 2023 the related party transactions have been conducted in the ordinary course of
business of the Group. No significant unusual transactions have taken place between
Eltel and related parties during the year.
Transactions with key individuals in executive positions
Salaries, remuneration and other benefits are accounted for in note 6 Employee benefit
expenses and note 29 Remuneration to senior executives.
The Group has not issued any loans to the persons classified as related party on 31
December 2023 or 31 December 2022.
Transactions with related party companies
List of group companies and jointly controlled entities is presented in note 34 Group
companies. Transactions between Group companies are eliminated in the consolidated
NOTE 34 GROUP COMPANIES
31 Dec 2023 Domicile Group holding, %
The InfraNet Company AB Sweden 100%
Eltel Networks Infranet AB Sweden 100%
Eltel Networks TE AB Sweden 100%
Jämtlands Linjebyggare & Republikens El AB Sweden 100%
Eltel Networks Infranet Privat AB Sweden 100%
Eltel Group Corporation Finland 100%
Eltel Networks Oy Finland 100%
Eltel Networks Pohjoinen Oy Finland 60%
Eltel Networks AS Norway 100%
Eltel Networks A/S Denmark 100%
Eltel Networks Energetyka S.A. Poland 100%
Eltel Networks Engineering S.A. Poland 100%
Eltel Networks Poland S.A. Poland 100%
Eltel Holding Poland Sp. z.o.o Poland 100%
Eltel Networks UK Limited the UK 100%
UAB Eltel Networks Lithuania 100%
Eltel Networks GmbH Germany 100%
Transmast Philippines, Inc. Philippines 40%
1)
Eltel Tanzania Limited Tanzania 100%
Jointly controlled entities
Fiber og Anlaeg I/S Denmark 35%
NKEL I/S Denmark 50%
2)
1)
Group voting 100%
2)
Eltel’s estimated share of the operations is 30-35%
During the financial year 2023 Eltel Networks GmbH was merged into Eltel Infranet GmbH
and the name of the acquiring company was changed to Eltel Networks GmbH. Eltel
Infranet Production GmbH and Eltel Comm Philippines Inc were dissolved.
Eltel Networks UK Limited is exempt from statutory audit in accordance with the
Company’s Act Section 479 A.
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Eltel Annual Report 2023 • 78
Basis for preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Parent Company
financial statements
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Eltel Annual Report 2023 • 79
Income statement
Statement of comprehensive income
EUR thousands Note 2023 2022
Net sales 4 1,865 2,472
Personnel costs 5 -3,023 -1,794
Other operating expenses -4,394 -5,466
Total operating expenses -7,417 -7,259
Operating result -5,552 -4,788
Interest and other financial income 20,845 21,481
Interest and other financial expense -3,565 -1,883
Financial items, net 7 17,280 19,598
Result after financial items 11,728 14,810
Appropriations
Group contribution given 13 -11,600 -14,500
Result before tax 128 310
Tax for the year 8 – –
Net result for the year 128 310
EUR thousands Note 2023 2022
Net result for the year 128 310
Other comprehensive income – –
Total comprehensive income for the year 128 310
Balance sheet
EUR thousands Note 31 Dec 2023 31 Dec 2022
ASSETS
Non-current assets
Financial assets
Shares in group companies 9 68,308 68,308
Long-term loans receivable from group companies 10 481,674 475,568
Intangible assets 1 22
Total non-current assets 549,983 543,898
Current assets
Receivables from group companies 10 774 1,015
Other receivables 308 305
Cash pool receivables 10 4,380 4,371
Cash and cash equivalents 99 98
Total current assets 5,563 5,790
TOTAL ASSETS 555,546 549,688
EQUITY AND LIABILITIES
Restricted equity
Share capital 161,950 159,576
Statutory reserve 695 695
Total restricted equity 162,645 160,271
Non-restricted equity
Retained earnings 281,226 284,945
Hybrid bond 25,000 –
Net result for the year 128 310
Total non-restricted equity 306,354 285,257
Total equity 11 468,999 445,528
LIABILITIES
Current liabilities
Debt 12 7,945 33,308
Liabilities to group companies 13 77,936 70,324
Trade and other payables 14 666 528
Total current liabilities 86,547 104,160
Total liabilities 86,547 104,160
TOTAL EQUITY AND LIABILITIES 555,546 549,688
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Eltel Annual Report 2023 • 80
Changes in equity
EUR thousands
Share
capital
Statutory
reserve
Non-restricted
equity
Total
equity
1 Jan 2023 159,576 695 285,257 445,528
Net profit for the year – – 128 128
Total comprehensive income/loss for the year – – 128 128
Hybrid bond – – 25,000 25,000
Transaction costs and interests on hybrid bond – – -1,667 -1,667
Transactions with owners
1)
Proceeds from shares issued 2,375 – – 2,375
Purchase of own shares – – -2,374 -2,374
Equity-settled share-based payment – – 10 10
Total transactions with owners 2,375 – -2,364 11
31 Dec 2023 161,950 695 306,354 468,999
1 Jan 2022 158,839 453 285,889 445,180
Net profit for the year – – 310 310
Total comprehensive income/loss for the year – – 310 310
Transactions with owners
1)
Proceeds from shares issued 980 – – 980
Reduction of share capital -242 242 – –
Purchase of own shares – – -982 -982
Equity-settled share-based payment – – 37 37
Total transactions with owners 738 242 -945 36
31 Dec 2022 159,576 695 285,257 445,528
1)
For more information about equity-settled share-based payments see note 29 Remuneration to senior executives in the consolidated financial statements and for
share transactions see note 11 Equity and share capital.
Cash flow statement
EUR thousands Note 2023 2022
Cash flow from operating activities
Profit/loss before taxes 128 310
Adjustments for:
Depreciation 21 38
Equity-settled share-based payment 10 37
Group contribution given 13 11,600 14,500
Financial items, net 7 -17,280 -19,598
Changes in working capital:
Trade and other receivables 301 111
Trade and other payables 284 -783
Cash flow from operating activities before financial items
and taxes -4,936 -5,385
Financial income received 14,722 34,834
Financial expenses paid -3,503 -1,800
Cash flow from operating activities 6,283 27,649
Cash flow from investing activities
Payments received from loans from group companies – 14,399
Cash flow from investing activities – 14,339
Cash flow from financing activities
Proceeds from issuance of hybrid bond 24,400 –
Payments of transaction costs and interests for hybrid bond -1,067 –
Proceeds from issuance of share capital 2,379 982
Purchase of own shares -2,378 -982
Proceeds from short-term borrowings 10,500 10,500
Payments of short-term borrowings -36,000 -50,000
Proceeds from short-term borrowings from group companies 10,384 11,504
Payments of group contributions -14,500 -14,000
Cash flow from financing activities -6,282 -41,996
Decrease/increase in cash and cash equivalents 1 -8
Cash and cash equivalents at beginning of year 98 105
Cash and cash equivalents at end of year 99 98
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Eltel Annual Report 2023 • 81
Notes to the Parent Company
financial statements
Notes to the Parent Company financial statements
1 General information 82
2 Accounting principles 82
3 Financial risk management 82
4 Net sales 82
5 Employee benefit expenses 82
6 Auditors’ fees 83
7 Result from financial items 83
8 Taxes 83
9 Shares in group companies 83
10 Receivables from related parties 83
11 Equity and share capital 84
12 Liabilities 84
13 Liabilities to group companies 84
14 Trade and other payables 84
15 Contingent liabilities and pledged assets 84
NOTE 1 GENERAL INFORMATION
Eltel AB’s role is to own and govern the shares related to Eltel Group. The Company holds
management functions but has no operative business activities and its risks are mainly
attributable to the value and activities of its subsidiaries. All transactions with group
companies are performed on an arm’s length basis. Additional general information about
the Parent Company can be found in note 1 Corporate information in the consolidated
financial statements.
NOTE 2 ACCOUNTING PRINCIPLES
Basis for the preparation of the reports
The annual report for the Parent Company, Eltel AB, has been prepared in accordance
with the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. RFR 2
states that the Parent Company in its annual report shall apply IFRS Accounting Stand-
ards as adopted by the EU, to the extent possible within the framework of the Swedish
Annual Accounts Act and the law of safeguarding of pension commitments, and also by
taking into account the relationship between reporting and taxation.
Accordingly, the Parent Company applies those principles presented in note 2 Mate-
rial accounting policies for the consolidated accounts in the consolidated financial state-
ments with the exception of what is mentioned below. The principles have been applied
consistently for all years presented, unless otherwise stated.
The income statement for the Parent company is presented on the nature of expense
method. The Parent company has reported group contributions and related taxes in the
income statement in accordance with RFR 2. The Parent company does not apply IFRS
16 in accordance with the exception in RFR 2.
All figures in the Parent Company financial statements are presented in thousands of
Euro unless otherwise stated.
Shares and participations in subsidiaries
Shares and participations in subsidiaries are reported at acquisition cost less deduction
for possible write-downs. Dividends received are reported as revenues to the extent they
originate from earnings earned after the acquisition. Dividend amounts exceeding these
returns are considered as repayments of the investment and reduce the carrying value of
the participations.
When there is an indication that shares and participations in subsidiaries have
decreased in value, an estimate is made of the recoverable amount. If this value is lower
than the reported value, a write-down is made. Write-downs/impairment losses are
reported as a separate line in the income statement.
Financial instruments
The Company applies fair value in accordance with the Swedish Annual Accounts Act 4:
14a-d and hence the description of the accounting principles in Financial instruments of the
consolidated financial statements also applies to the Parent Company with the exception of
financial guarantees. The Parent Company applies the rule permitted by the Swedish Finan-
cial Reporting Board to the reporting of financial guarantee agreements issued for the benefit
of subsidiaries, associated companies and joint ventures. The Parent Company recognizes
financial guarantees as a provision in the balance sheet when the company has an obligation
for which payment is probably necessary to settle the commitment.
The Company’s financial instruments are comprised of long-term receivables from
Group companies, other financial assets, current receivables from Group companies and
also cash and cash equivalents. These make up the category financial assets at amor-
tized cost. Financial instruments are also comprised of long-term borrowing, short-term
liabilities to group companies, accounts payable and other liabilities. These comprise the
category financial liabilities at amortized cost.
Group contributions
The Company has chosen to apply the alternative rule in accordance with RFR 2, which
means that all group contributions are recognized in appropriations.
NOTE 3 FINANCIAL RISK MANAGEMENT
The Group applies common risk management for all units. Hence, the description in note
14 Financial risk management in the consolidated financial statements applies to the
Parent Company as well in all material aspects.
NOTE 4 NET SALES
EUR thousands 2023 2022
Remunerations from group companies for group-wide
administration 1,865 2,472
Total 1,865 2,472
NOTE 5 EMPLOYEE BENEFIT EXPENSES
EUR thousands 2023 2022
Salaries and other remunerations 1,933 1,162
Social security contributions:
Pension costs 410 225
Other social security contributions 679 407
Total 3,023 1,794
2023 2022
Average number of employees 7 4
Of whom men 47% 45%
Salaries and other remunerations to senior executives were EUR 1.5 million (0.6), pension
costs EUR 0.4 million (0.1) and other social security contri butions EUR 0.4 million (0.2).
In 2022 salary and other remunerations including social costs to the President and CEO,
who was employed by other group company until July 2022, were EUR 0.9 million. From
August 2022 onwards the President and CEO has been employed by Eltel AB. Group senior
executives participate in the long-term share-based incentive programs LTIP 2021, LTIP
2022 and LTIP 2023. Total expense for the programs for the year was EUR 44 thousand
(53), of which EUR 24 thousand (48) for the President and CEO and other senior executives.
More information of Group senior executives and the Board of Directors is presented in note
6 Employee benefit expenses and note 33 Related party information in the consolidated
financial statements.
In Eltel AB the number of individuals in the Board of Directors was six in 2023 and 2022
and the number of other senior executives employed by the company was three in 2023
and two in 2022.
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NOTE 6 AUDITORS’ FEES
EUR thousands 2023 2022
Main auditor
Audit assignments 149 159
Tax assignments 6 7
Other assignments 14 14
Other auditing firms
Other assignments 44 91
The company in total 213 271
Main auditor in 2023 and 2022 has been KPMG.
NOTE 7 RESULT FROM FINANCIAL ITEMS
EUR thousands 2023 2022
Interest and other financial income
Interest income 2 –
Interest income, loans from group companies 20,627 21,284
Other financial income, group companies 216 197
Total 20,845 21,481
Interest and other financial expenses
Interest expenses -1,142 -994
Interest expenses, group companies -2,364 -754
Expected credit loss write-down on internal
loans receivable -16 97
Other financial expenses -43 -233
Total -3,565 -1,883
Total financial items 17,280 19,598
NOTE 8 TAXES
EUR thousands 2023 2022
Income taxes
Result before tax 128 310
Tax calculated at Swedish tax rate 26 64
Income not subject to tax – -20
Expenses not deductible for tax purposes 22 47
Tax effect of results for which no deferred income tax
was recognized -48 -91
Income taxes in the income statement – –
Eltel AB has not recognized deferred tax assets for losses carried forward. The Group’s
estimate for utilizing losses carried forward in Sweden covers Eltel AB and all Swedish
subsidiaries as group contribution and interest offsetting is utilized in taxation between
the entities. The amount of deferred tax assets for losses carried forward in Sweden is
reported in note 24 in the consolidated financial statements and reported in companies
where Eltel estimates to utilize the losses.
NOTE 9 SHARES IN GROUP COMPANIES
EUR thousands 2023 2022
Acquisition value
Opening balance 1 Jan 268,308 268,308
Closing balance 31 Dec 268,308 268,308
Accumulated impairment losses
Opening balance 1 Jan -200,000 -200,000
Closing balance 31 Dec -200,000 -200,000
Carrying amount on the balance sheet 68,308 68,308
Shares are held in the following subsidiaries:
The InfraNet Company AB, 556728-6645,
Stockholm 2023 2022
Share of equity, % 100 100
Share of voting power, % 100 100
Number of shares 11,000 11,000
Book value 68,308 68,308
NOTE 10 RECEIVABLES FROM RELATED PARTIES
Non-current receivables
EUR thousands 31 Dec 2023 31 Dec 2022
Loans from group companies 481,674 475,568
Total 481,674 475,568
Current receivables
EUR thousands 31 Dec 2023 31 Dec 2022
Cash pool receivable 4,380 4,371
Accounts receivable 774 1,015
Total 5,155 5,386
Interest resulting from loans to group companies is capitalized annually. Capitalized
interest bears no interest.
Eltel AB applies rating-based expected credit loss (ECL) model according to IFRS 9
for impairment of non-current receivables from group companies. In 2023, a write-down
amounting to 16 thousand euro (reversal of 97) has been recognized in the credit loss
reserve of long-term loans receivable. For more information about the ECL model, please
refer to note 14 in the consolidated financial statements.
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Eltel Annual Report 2023 • 83
NOTE 11 EQUITY AND SHARE CAPITAL
On 20 November 2023, Eltel issued and repurchased 2,354,500 class C shares in accord-
ance with the renewed authorization regarding the incentive program LTIP 2022 that the
AGM on 11 May 2023 resolved upon and in accordance with the incentive program LTIP
2023 which was adopted by the ABM on 11 May 2023. Eltel holds the repurchased shares
at 31 December 2023 and will hold the shares until it is time to deliver shares to the qual-
ifying participants of LTIP 2022 and LTIP 2023, respectively. Prior to the delivery of the
shares to qualifying participants, the class C shares will be converted to ordinary shares.
The purpose of the repurchase of class C shares is to ensure delivery of shares to partic-
ipants and to secure social contributions arising as a result of LTIP 2022 and LTIP 2023,
respectively. The share issue resulted in an increase of share capital by EUR 2,374,508.
On 1 February 2022, the share capital was reduced with EUR 242,039.47 by redemp-
tion of 240,000 C shares held by Eltel.
On 18 March 2022, Eltel issued 972,000 redeemable and convertible class C shares
based on the authorization given to the Board by the AGM on 5 May 2021. The purpose of
the issue of class C shares is to use the shares in Eltel’s long-term incentive program LTIP
2021. In connection with the issue the shares have been repurchased by Eltel. Eltel holds
the shares at 31 December 2023 and will hold the shares until it is time to deliver shares
to the participants of LTIP 2021. Prior to delivery of the shares to participants, the class
C shares will be converted to ordinary shares. The share issue resulted in an increase of
share capital by EUR 980 260.
On 7 June 2022, Eltel converted 87,700 C shares to ordinary shares pursuant to the
company’s articles of association.
On 31 December 2023, the total number of shares amounted to 160,585,581 divided
into 156,736,781 ordinary shares with 1 vote per share and 3,848,800 C shares with 1/10
vote per share. On 31 December 2023 the share capital amounted to EUR 161,950 thou-
sand. A specification of changes in equity is found under the section “Changes in equity”,
which is presented directly after the balance sheet.
Shareholders with more than 10% of the votes at 31 December 2023 are Solero Luxco
S.á.r.l. (a company controlled by Triton Funds) with 16.3% and Wipunen Varainhallinta Oy
with 14.3% of ordinary shares. More information about Eltel’s shareholders is found in
“The Eltel Share” on pages 91-92.
NOTE 12 LIABILITIES
EUR thousands 31 Dec 2023 31 Dec 2022
Current liabilities
Bank borrowings 7,945 33,308
Total liabilities 7,945 33,308
NOTE 13 LIABILITIES TO GROUP COMPANIES
EUR thousands 31 Dec 2023 31 Dec 2022
Cash pool payable 65,241 54,847
Accounts payable 1,095 977
Group contribution liabilities 11,600 14,500
Total 77,936 70,324
NOTE 14 TRADE AND OTHER PAYABLES
EUR thousands 31 Dec 2023 31 Dec 2022
Trade payables 87 124
Accrued employee related expenses 108 133
Other short-term liabilities 214 148
Other accrued expenses 256 123
Total 666 528
NOTE 15 CONTINGENT LIABILITIES AND PLEDGED ASSETS
Contingent liabilities
EUR thousands 31 Dec 2023 31 Dec 2022
Commercial guarantees on behalf of subsidiaries 111,293 103,208
Total guarantees 111,293 103,208
Pledged assets
EUR thousands 31 Dec 2023 31 Dec 2022
Pledged subsidiary shares 68,308 68,308
Pledged other assets 482,252 343,690
Total pledged assets 550,560 411,998
At year-end, Eltel Group had secured its debt obligations towards the banks under the
financing agreement by share and intragroup loan pledges and floating charges over
certain assets of the Group, all on customary terms and conditions. Eltel AB has pledged
the assets shown in the above table as a security for the financing agreement.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 84
The Company’s financial statement will be submitted
for approval to the Annual General Meeting on 14 May 2024
The Board of Directors certifies that the annual financial report has been
prepared in accordance with generally accepted accounting principles and
that the consolidated accounts have been prepared in accordance with the
international set of accounting standards referred to in Regulation (EC) No
1606/2002 of the European Parliament and of the Council of 19 July 2002
on the application of international accounting standards; and give a true and
fair view of the position and profit or loss of the Company and the Group; and
that the management report for the Company and for the Group gives a fair
overview of the development and performance of the business, position and
profit or loss of the Company and the Group; and describes the principal risks
and uncertainties that the Company and the companies in the Groupface.
Stockholm 25 March 2024
Ulf Mattsson
Chairman of the Board of Directors
Joakim Olsson
Board member
Stefan Söderholm
Board member
Ann Emilson
Board member
Erja Sankari
Board member
Håkan Dahlström
President and CEO
Gunilla Fransson
Board member
Roland Sundén
Board member
Björn Tallberg
Board member
Our audit report was submitted on 26 March 2024
KPMG AB
Fredrik Westin
Authorized Public Accountant
Eltel Annual Report 2023 • 85
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Auditor’s report
To the general meeting of the shareholders
of Eltel AB (publ), corp. id 556728-6652
Report on the annual accounts and
consolidated accounts
Opinions
We have audited the annual accounts and consolidated
accounts of Eltel AB (publ) for the year 2023, except for
the corporate governance statement on pages 41-47.
The annual accounts and consolidated accounts of
the company are included on pages 34-85 in this
document.
In our opinion, the annual accounts have been pre-
pared in accordance with the Annual Accounts Act, and
present fairly, in all material respects, the financial posi-
tion of the parent company as of 31 December 2023 and
its financial performance and cash flow for the year then
ended in accordance with the Annual Accounts Act. The
consolidated accounts have been prepared in accord-
ance with the Annual Accounts Act and present fairly, in
all material respects, the financial position of the group
as of 31 December 2023 and their financial performance
and cash flow for the year then ended in accordance
with IFRS Accounting Standards, as adopted by the EU,
and the Annual Accounts Act. Our opinions do not cover
the corporate governance statement on pages 41-47.
The statutory administration report is consistent with
the other parts of the annual accounts and consolidated
accounts.
We therefore recommend that the general meeting of
shareholders adopts the income statement and balance
sheet for the parent company and the group.
Our opinions in this report on the the annual accounts
and consolidated accounts are consistent with the
content of the additional report that has been submitted
to the parent company’s audit committee in accordance
with the Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with Internation-
al Standards on Auditing (ISA) and generally accepted
auditing standards in Sweden. Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities section. We are independent
of the parent company and the group in accordance
with professional ethics for accountants in Sweden
and have otherwise fulfilled our ethical responsibilities
in accordance with these requirements.This includes
that, based on the best of our knowledge and belief, no
prohibited services referred to in the Audit Regulation
(537/2014) Article 5.1 have been provided to the audited
company or, where applicable, its parent company or its
controlled companies within the EU.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in
our professional judgment, were of most significance
in our audit of the annual accounts and consolidated
accounts of the current period. These matters were
addressed in the context of our audit of, and in forming
our opinion thereon, the annual accounts and consol-
idated accounts as a whole, but we do not provide a
separate opinion on these matters.
Revenue and profit calculation of projects
See disclosure 4 and accounting principles on page 54
in the annual account and consolidated accounts for
detailed information and description of the matter.
Description of key audit matter
In its consolidated accounts, Eltel applies the standard
IFRS 15 Revenue from Contracts with Customers for
its revenue recognition. This means that performance
obligations relevant to the projects Eltel carries out on
behalf of its customers are normally fulfilled over time.
It also means that revenues are being recognized over
time successively), where progress is measured in
relation to the complete fulfillment of Eltel’s performance
obligations.
The projects’ results (“profit calculation”) are therefore
also reported successively, in relation to the degree/
percentage of completion of each project. The percent-
age of completion depends on the actual project costs
associated with the total projected costs. The latter may
change during the life cycle of the projects, which in turn
may have a significant impact on the projects’ reported
revenues and results. Unforeseeable costs may also
need to be included in the assessments in order to take
project risks or disputed claims into account. These
items are regularly assessed by the Group and adjusted
if necessary. Expected losses are fully recognized as
expenses as soon as they are known.
Revenues from project alterations and additional
work are recognized on the basis of what is judged to
be received. Based on the above, there is, in total, a
large element of assessments on the part of Eltel in this
area, which in turn affects the reporting of revenues and
results.
Response in the audit
We have obtained information about and evaluated
management’s process for reviewing projects, including
the procedures they use for identifying and reporting
loss-making and/or high-risk projects. Project manag-
ers and project controllers within Eltel have also been
involved in this work.
In addition, we have tested whether Eltel’s more
important project-related controls have been effective
throughout the year, such as approvals of contracts
and time reporting, ongoing follow-up and reporting of
project costs, and profitability. We have also evaluated
controls related to costs for subcontractors and other
purchases. Furthermore, we have performed sample
testing; for example, we have examined whether costs
allocated to the projects correspond to data/documen-
tation, and whether both the cost and revenue recogni-
tion is true and fair.
We have also assessed whether risks and oppor-
tunities in projects are reflected in a balanced way in
the project forecasts.
Eltel Annual Report 2023 • 86
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Valuation of goodwill (group) and shares
in group companies (parent company)
See disclosure 26 (group) and disclosure 9 (parent
company) and accounting principles on page 56 (group)
and on page 82 (parent company) in the annual account
and consolidated accounts for detailed information and
description of the matter.
Description of key audit matter
The carrying value of goodwill for the Group as at 31
December 2023 amounted to 253,6 MEUR, which is
approximately 41 % of total assets. Goodwill, which is
required to be tested annually for impairment, is a com-
plex area which is heavily dependent on judgment.
Under IFRS, the impairment test should be performed
in line with a specific method where management needs
to make judgments of future conditions and plans, both
internal and external. An example of these judgments is
forecasts of future cash flows which, among other
things, call for assumptions to be made about future
developments and market conditions.
Another important assumption is the discount rate
that should be used to reflect market- based assess-
ments of the time value of money and the particular risks
that the business faces.
The carrying value of shares in Group companies in
the parent company as at 31 December 2023 amount-
ed to 68,3 MEUR. If the carrying amount of the shares
exceeds the consolidated value of the respective group
company, the same type of testing is carried out, with
the same technique and input values, as for goodwill in
the Group.
Response in the audit
We have reviewed whether the goodwill impairment
tests carried out by Eltel were performed in accordance
with the prescribed accounting method. We have further
considered the reasonableness of the assumptions
in the cashflow forecasts, as well as the discount rate
used, through an evaluation of the Group’s internal
written documentation and forecasts. We have also
interviewed management and evaluated previous years’
assessments in relation to actual outcomes.
Another important part of our work has been to review
the Group’s sensitivity analysis of its own assessments
to evaluate how reasonable changes in the assumptions
may impact the valuations.
Furthermore, we have considered the completeness
of the disclosures in the annual report and evaluated
whether they are in line with the assumptions made in
the Group’s impairment tests, and that they correspond
in material aspects to the information that should be
provided in accordance with IFRS.
Other Information than the annual accounts
and consolidated accounts
This document also contains other information than
the annual accounts and consolidated accounts and
is found on pages 1-33 and 90-97. The other informa-
tion comprises also of the remuneration report which
we obtained prior to the date of this auditor’s report.
The Board of Directors and the Managing Director are
responsible for this other information.
Our opinion on the annual accounts and consolidat-
ed accounts does not cover this other information and
we do not express any form of assurance conclusion
regarding this other information.
In connection with our audit of the annual accounts
and consolidated accounts, our responsibility is to read
the information identified above and consider whether
the information is materially inconsistent with the annual
accounts and consolidated accounts. In this procedure
we also take into account our knowledge otherwise ob-
tained in the audit and assess whether the information
otherwise appears to be materially misstated.
If we, based on the work performed concerning this
information, conclude that there is a material misstate-
ment of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and
the Managing Director
The Board of Directors and the Managing Director are
responsible for the preparation of the annual accounts
and consolidated accounts and that they give a fair
presentation in accordance with the Annual Accounts
Act and, concerning the consolidated accounts, in ac-
cordance with IFRS Accounting Standards as adopted
by the EU. The Board of Directors and the Managing
Director are also responsible for such internal control as
they determine is necessary to enable the preparation
of annual accounts and consolidated accounts that are
free from material misstatement, whether due to fraud
or error.
In preparing the annual accounts and consolidated
accounts The Board of Directors and the Managing
Director are responsible for the assessment of the
company’s and the group’s ability to continue as a going
concern. They disclose, as applicable, matters related
to going concern and using the going concern basis of
accounting. The going concern basis of accounting is
however not applied if the Board of Directors and the
Managing Director intend to liquidate the company, to
cease operations, or has no realistic alternative but to
do so.
The Audit Committee shall, without prejudice to the
Board of Director’s responsibilities and tasks in general,
among other things oversee the company’s financial
reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance
about whether the annual accounts and consolidated
accounts as a whole are free from material misstate-
ment, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasona-
ble assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with
ISAs and generally accepted auditing standards in Swe-
den will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggre-
gate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
annual accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exer-
cise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the annual accounts and consolidated accounts,
whether due to fraud or error, design and perform
audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropri-
ate to provide a basis for our opinions. The risk of not
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of the company’s internal
control relevant to our audit in order to design audit
procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on
the effectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting esti-
mates and related disclosures made by the Board of
Directors and the Managing Director.
Eltel Annual Report 2023 • 87
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
• Conclude on the appropriateness of the Board of
Directors’ and the Managing Director’s, use of the
going concern basis of accounting in preparing the
annual accounts and consolidated accounts. We
also draw a conclusion, based on the audit evidence
obtained, as to whether any material uncertainty
exists related to events or conditions that may cast
significant doubt on the company’s and the group’s
ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related
disclosures in the annual accounts and consolidated
accounts or, if such disclosures are inadequate, to
modify our opinion about the annual accounts and
consolidated accounts. Our conclusions are based
on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions
may cause a company and a group to cease to con-
tinue as a going concern.
• Evaluate the overall presentation, structure and
content of the annual accounts and consolidated
accounts, including the disclosures, and whether
the annual accounts and consolidated accounts
represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient and appropriate audit evidence
regarding the financial information of the entities
or business activities within the group to express
an opinion on the consolidated accounts. We are
responsible for the direction, supervision and perfor-
mance of the group audit. We remain solely responsible
for our opinions.
We must inform the Board of Directors of, among other
matters, the planned scope and timing of the audit. We
must also inform of significant audit findings during our
audit, including any significant deficiencies in internal
control that we identified.
We must also provide the Board of Directors with a
statement that we have complied with relevant ethical
requirements regarding independence, and to commu-
nicate with them all relationships and other matters that
may reasonably be thought to bear on our independ-
ence, and where applicable, measures that have been
taken to eliminate the threats or related safeguards.
From the matters communicated with the Board of
Directors, we determine those matters that were of most
significance in the audit of the annual accounts and
consolidated accounts, including the most important
assessed risks for material misstatement, and are there-
fore the key audit matters. We describe these matters in
the auditor’s report unless law or regulation precludes
disclosure about the matter.
Report on other legal and regulatory requirements
Auditor’s audit of the administration and the
proposed appropriations of profit or loss
Opinions
In addition to our audit of the annual accounts and
consolidated accounts, we have also audited the ad-
ministration of the Board of Directors and the Managing
Director of Eltel AB (publ) for the year 2023 and the
proposed appropriations of the company’s profit or loss.
We recommend to the general meeting of share-
holders that the profit be appropriated in accordance
with the proposal in the statutory administration report
and that the members of the Board of Directors and the
Managing Director be discharged from liability for the
financial year.
Basis for Opinions
We conducted the audit in accordance with generally
accepted auditing standards in Sweden. Our responsi-
bilities under those standards are further described in
the Auditor’s Responsibilities section. We are independent
of the parent company and the group in accordance
with professional ethics for accountants in Sweden and
have otherwise fulfilled our ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinions.
Responsibilities of the Board of Directors and the
Managing Director
The Board of Directors is responsible for the proposal
for appropriations of the company’s profit or loss. At
the proposal of a dividend, this includes an assessment
of whether the dividend is justifiable considering the
requirements which the company’s and the group’s
type of operations, size and risks place on the size of the
parent company’s and the group’s equity, consolidation
requirements, liquidity and position in general.
The Board of Directors is responsible for the company’s
organization and the administration of the company’s
affairs. This includes among other things continuous
assessment of the company’s and the group’s financial
situation and ensuring that the company’s organization
is designed so that the accounting, management of
assets and the company’s financial affairs otherwise are
controlled in a reassuring manner.
The Managing Director shall manage the ongoing
administration according to the Board of Directors’
guidelines and instructions and among other matters
take measures that are necessary to fulfill the company’s
accounting in accordance with law and handle the man-
agement of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration,
and thereby our opinion about discharge from liability,
is to obtain audit evidence to assess with a reasonable
degree of assurance whether any member of the Board
of Directors or the Managing Director in any material
respect:
• has undertaken any action or been guilty of any omission
which can give rise to liability to the company, or
• in any other way has acted in contravention of the
Companies Act, the Annual Accounts Act or the
Articles of Association.
Our objective concerning the audit of the proposed
appropriations of the company’s profit or loss, and
thereby our opinion about this, is to assess with reason-
able degree of assurance whether the proposal is
in accordance with the Companies Act.
Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in
accordance with generally accepted auditing standards
in Sweden will always detect actions or omissions that
can give rise to liability to the company, or that the pro-
posed appropriations of the company’s profit or loss are
not in accordance with the Companies Act.
As part of an audit in accordance with generally
accepted auditing standards in Sweden, we exercise
professional judgment and maintain professional
scepticism throughout the audit. The examination of
the administration and the proposed appropriations
of the company’s profit or loss is based primarily on
the audit of the accounts. Additional audit procedures
performed are based on our professional judgment with
starting point in risk and materiality. This means that
we focus the examination on such actions, areas and
relationships that are material for the operations and
where deviations and violations would have particular
importance for the company’s situation. We examine
and test decisions undertaken, support for decisions,
actions taken and other circumstances that are relevant
to our opinion concerning discharge from liability. As a
basis for our opinion on the Board of Directors’ pro-
Eltel Annual Report 2023 • 88
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
posed appropriations of the company’s profit or loss we
examined whether the proposal is in accordance with
the Companies Act.
The auditor’s examination of the Esef report
Opinion
In addition to our audit of the annual accounts and
consolidated accounts, we have also examined that the
Board of Directors and the Managing Director have pre-
pared the annual accounts and consolidated accounts
in a format that enables uniform electronic reporting (the
Esef report) pursuant to Chapter 16, Section 4(a) of the
Swedish Securities Market Act (2007:528) for Eltel AB
(publ) for year 2023.
Our examination and our opinion relate only to the
statutory requirements.
In our opinion, the Esef report has been prepared in
a format that, in all material respects, enables uniform
electronic reporting.
Basis for opinion
We have performed the examination in accordance with
FAR’s recommendation RevR 18 Examination of the
Esef report. Our responsibility under this recommenda-
tion is described in more detail in the Auditors’ respon-
sibility section. We are independent of Eltel AB (publ) in
accordance with professional ethics for accountants in
Sweden and have otherwise fulfilled our ethical respon-
sibilities in accordance with these requirements.
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors and
the Managing Director
The Board of Directors and the Managing Director are
responsible for the preparation of the Esef report in
accordance with the Chapter 16, Section 4(a) of the
Swedish Securities Market Act (2007:528), and for such
internal control that the Board of Directors and the
Managing Director determine is necessary to prepare
the Esef report without material misstatements, whether
due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance
whether the Esef report is in all material respects pre-
pared in a format that meets the requirements of Chap-
ter 16, Section 4(a) of the Swedish Securities Market Act
(2007:528), based on the procedures performed.
RevR 18 requires us to plan and execute procedures
to achieve reasonable assurance that the Esef report is
prepared in a format that meets these requirements.
Reasonable assurance is a high level of assurance,
but it is not a guarantee that an engagement carried out
according to RevR 18 and generally accepted auditing
standards in Sweden will always detect a material mis-
statement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of the Esef report.
The audit firm applies International Standard on Qual-
ity Management 1, which requires the firm to design,
implement and operate a system of quality management
including policies or procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements.
The examination involves obtaining evidence, through
various procedures, that the Esef report has been
prepared in a format that enables uniform electronic
reporting of the annual accounts and consolidated
accounts. The procedures selected depend on the au-
ditor’s judgment, including the assessment of the risks
of material misstatement in the report, whether due to
fraud or error. In carrying out this risk assessment, and
in order to design procedures that are appropriate in the
circumstances, the auditor considers those elements of
internal control that are relevant to the preparation of the
Esef report by the Board of Directors and the Managing
Director, but not for the purpose of expressing an opin-
ion on the effectiveness of those internal controls. The
examination also includes an evaluation of the appropri-
ateness and reasonableness of the assumptions made
by the Board of Directors and the Managing Director.
The procedures mainly include a validation that the
Esef report has been prepared in a valid XHTML format
and a reconciliation of the Esef report with the audited
annual accounts and consolidated accounts.
Furthermore, the procedures also include an assess-
ment of whether the consolidated statement of financial
performance, financial position, changes in equity,
cash flow and disclosures in the Esef report have been
marked with iXBRL in accordance with what follows
from the Esef regulation.
The auditor’s examination of the corporate
governance statement
The Board of Directors is responsible for that the cor-
porate governance statement on pages 41-47 has been
prepared in accordance with the Annual Accounts Act.
Our examination of the corporate governance state-
ment is conducted in accordance with FAR´s standard
RevR 16 The auditor´s examination of the corporate
governance statement. This means that our examination
of the corporate governance statement is different and
substantially less in scope than an audit conducted in
accordance with International Standards on Auditing
and generally accepted auditing standards in Sweden.
We believe that the examination has provided us with
sufficient basis for our opinions.
A corporate governance statement has been
prepared. Disclosures in accordance with chapter 6
section 6 the second paragraph points 2-6 of the Annual
Accounts Act and chapter 7 section 31 the second
paragraph the same law are consistent with the other
parts of the annual accounts and consolidated accounts
and are in accordance with the Annual Accounts Act.
KPMG AB, Box 382, 101 27, Stockholm, was appointed
auditor of Eltel AB (publ) by the general meeting of the
shareholders on the 11 May 2023. KPMG AB or auditors
operating at KPMG AB have been the company’s audi-
tor since 2018.
Stockholm 26 March 2024
KPMG AB
Fredrik Westin
Authorized Public Accountant
Eltel Annual Report 2023 • 89
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Other information
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2023 • 90
The Eltel share
Eltel’s share is listed on the OMX Stockholm
Small Cap, under the trading symbol “ELTEL”.
Share capital
At the end of the financial period 2023, the total num-
ber of shares amounts to 160,585,581 divided into
156,736,781 ordinary shares with one vote per share
and 3,848,800 C shares with 1/10 vote per share. The
share capital entered in the trade register per 31 Decem-
ber 2023 is EUR 161,950,203.
Shareholders
As per 31 December 2023, Eltel has 3,676 shareholders.
The four largest shareholders of Eltel AB are Solero Lux-
co S.á.r.l. 16.3% (a company controlled by Triton Funds),
Wipunen Varainhallinta Oy 14.3%, the Fourth Swedish
National Pension Fund (AP4) 9.6%, and Heikintorppa
Oy 7.9%. The four largest shareholders referred above
together represent 48.2% of the votes in the company.
Price development and trading volumes
Eltel share price declined in 2023. The closing price on
29 December 2023 was SEK 6.70, a decline of 19.28%
over the year. The highest closing price was SEK 14.00
on 14 February 2023 and the lowest was SEK 6.06 on
30 October 2023. At year-end, Eltel’s market capital-
ization was SEK 1.05 million. The trading volume on
Nasdaq Stockholm was 7,304,998 shares, equivalent to
a turnover of SEK 61,568,689. Eltel shares were mainly
traded on Nasdaq Stockholm, 79.7% and Cboe, 15.7%
and in small volumes in other marketplaces, 4.6%.
The dividend policy
A dividend policy has been adopted whereby 50% of
Eltel’s consolidated net profit shall be paid in dividends
over time (with flexibility in relation to the pay-out ratio).
Analysts
Eltel is followed by ABG Sundal Collier and Inderes.
SEK
0
75,000
150,000
225,000
300,000
Volume
0
4
8
12
16
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ELTEL SHARE IN 2023 (SEK)
Eltel VolumeOMX Stockholm PI
Eltel Annual Report 2023 • 91
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
OWNERSHIP STRUCTURE ON 31 DECEMBER 2023
Shareholder spread
Number of
known owners Number of shares % of capital % of votes
Share of
known owners
1–1,000 2,700 660,869 0.4 0.4 74.4
1,001–5,000 628 1,541,095 1.0 1.0 17.3
5,001–10,000 119 910,137 0.6 0.6 3.3
10,001–50,000 111 2,525,135 1.6 1.6 3.1
50,001–100,000 19 1,500,572 0.9 1.0 0.5
100,001–500,000 27 6,388,868 4.0 4.1 0.7
500,001–1,000,000 6 4,361,295 2.7 2.8 0.2
1,000,001–5,000,000 8 16,930,452 10.6 8.6 0.2
5,000,001–10,000,000 4 31,389,864 19.6 20.0 0.1
10,000,001– 4 75,610,905 47.4 48.2 0.1
Anonymous ownership 18,766,389 11.2 11.9 –
Total 3,626 160,585,581 100.0 100.0 100.0
Source: Monitor by Modular Finance AB. Compiled and processed data from various sources, including Euroclear, Morningstar and the Swedish Financial Supervisory Authority (Finansinspektionen).
ELTEL’S TOP 10 SHAREHOLDERS ON 31 DECEMBER 2023
Shareholders Number of shares % of shares % of votes
Solero Luxco S.á.r.l.
1)
25,683,845 16.0 16.3
Wipunen Varainhallinta Oy 22,500,000 14.0 14.3
Fourth Swedish National Pension Fund 15,027,060 9.4 9.6
Heikintorppa Oy 12,400,000 7.7 7.9
Mariatorp Oy 10,000,000 6.2 6.4
Mandatum Life Insurance Company 8,287,292 5.2 5.3
Fidelity International (FIL) 7,097,572 4.4 4.5
Etola Group 6,005,000 3.7 3.8
Mandatum Fund Management 2,789,819 1.7 1.8
SEB Fonder 2,299,705 1.4 1.5
Total 112,090,293 69.8 71.3
Other shareholders 44,646,488 27.8 28.4
Total ordinary shares in Eltel AB 156,736,781
Total C shares in Eltel AB
2)
3,848,800 2.4 0.2
Total shares in Eltel AB 160,585,581 100.0 100.0
1)
Company controlled by Triton Funds.
2)
The C shares are held by Eltel.
GEOGRAPHIC DISTRIBUTION OF SHAREHOLDERS 31 DEC 2023
OWNERSHIP BY SECTOR ON 31 DEC 2023
Finland 46.3%
Sweden 20.5%
Luxembourg 16.0%
United Kingdom 4.4%
United States 1.4%
Other 0.2%
Unknown 11.2%
Investment & PE 38.1%
Pension & Insurance 14.6%
Fund company 11.1%
Private individuals 10.6%
Treasury shares 2.4%
State, municipal & county 0.1%
Other 12.0%
Unknown 14.6%
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Five-year summary
Condensed consolidated income statement Key figures
EUR million 2023 2022 2021 2020 2019
Net sales 850.1 823.6 812.6 938.0 1 087.6
Cost of sales -774.5 -748.9 -724.5 -838.6 -1 004.7
Gross profit 75.6 74.7 88.1 99.4 82.9
Other income 3.5 0.9 5.5 22.5 2.6
Expenses
-84.4 -77.6 -79.1 -96.9 -97.1
Share of profit/loss of joint ventures – – – -0.2 0.4
Operating result (EBIT) -5.3 -2.0 14.5 24.8 -11.2
Financial expenses, net -12.7 -9.5 -5.8 -9.8 -11.5
Result before taxes -17.9 -11.4 8.7 14.9 -22.7
Taxes 10.3 -3.5 -3.7 -9.7 -2.4
Net result -7.6 -14.9 4.9 5.3 -25.1
EUR million 2023 2022 2021 2020 2019
Net sales 850.1 823.6 812.6 938.0 1,087.6
Net sales growth, % 3.2 1.4 -13.4 -13.8 -8.5
Adjusted EBITDA 31.8 27.8 46.6 48.9 28.1
Adjusted EBITA 1.7 -1.9 14.8 11.4 -11.3
Adjusted EBITA margin, % 0.2 -0.2 1.8 1.2 -1.0
Adjusted EBITA, segments 11.8 9.9 24.2 22.9 9.7
Adjusted EBITA margin, %, segments 1.5 1.4 3.3 2.8 1.1
Items affecting comparability
1)
-7.0 – -0.1 14.1 1.6
EBITDA 24.8 27.8 46.5 63.0 29.7
Operating result (EBIT) -5.3 -2.0 14.5 24.8 -11.2
EBIT margin, % -0.6 -0.2 1.8 2.6 -1.0
Result after financial items -17.9 -11.4 8.7 14.9 -22.7
Net result for the year -7.6 -14.9 4.9 5.3 -25.1
Earnings per share EUR, basic and diluted -0.07 -0.10 0.03 0.03 -0.17
Return on equity (ROE), %
2),3)
-3.7 -6.8 2.2 2.4 -10.6
Return on operative capital employed (ROCE), %
2)
5.3 -3.5 23.6 13.0 -11.5
Leverage ratio
2)
3.2 4.5 2.6 2.0 6.7
Net working capital -49.8 -21.0 -16.0 -25.1 -6.3
Number of personnel, average 5,024 5,053 5,176 6,196 7,036
1)
Includes restructuring costs, gains and losses from divestment of businesses and from valuation of divested assets as held for sale.
2)
Calculated on a rolling 12-month basis.
3)
Assets and liabilities held for sale are not included (in 2020 German High Voltage business and in 2019 German Communication business and Aviation &
Security business area).
Cash flow from operating activities
EUR million 2023 2022 2021 2020 2019
Operating result (EBIT) -5.3 -2.0 14.5 24.8 -11.2
Depreciation and amortization 30.1 29.8 32.1 38.2 40.9
EBITDA 24.8 27.8 46.5 63.0 29.7
Changes in working capital 29.4 4.6 -10.1 16.6 37.9
Total financial expenses and taxes -15.3 -12.5 -6.7 -13.9 -10.9
Other -4.9 -3.5 -7.4 -16.3 -5.4
Cash flow from operating activities 34.0 16.4 22.3 49.4 51.4
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Quarterly figures
Quarterly key financial figures for the Group
EUR million Full-year 2023 Oct–Dec 2023 Jul–Sep 2023 Apr–Jun 2023 Jan–Mar 2023 Full-year 2022 Oct–Dec 2022 Jul–Sep 2022 Apr–Jun 2022 Jan–Mar 2022
Net sales 850.1 240.2 213.4 208.1 188.4 823.6 224.0 207.0 208.6 184.0
Net sales growth, % 3.2 7.2 3.1 -0.2 2.4 1.4 -1.0 6.8 -0.8 1.1
Adjusted EBITDA 31.8 10.2 13.6 5.6 2.4 27.8 3.3 11.5 7.9 5.1
Adjusted EBITA 1.7 2.8 5.9 -1.5 -5.5 -1.9 -4.0 4.1 0.5 -2.4
Adjusted EBITA margin, % 0.2 1.2 2.8 -0.7 -2.9 -0.2 -1.8 2.0 0.2 -1.3
Adjusted EBITA, segments 11.8 5.0 6.8 2.1 -2.1 9.9 -1.8 6.6 4.4 0.7
Adjusted EBITA margin, %, segments 1.5 2.3 3.5 1.1 -1.2 1.4 -0.9 3.6 2.4 0.4
Items affecting comparability
1)
-7.0 0.1 -0.9 - -6.1 – – – – –
EBITDA 24.8 10.3 12.6 5.6 -3.7 27.8 3.3 11.5 7.9 5.1
Operating result (EBIT) -5.3 2.9 5.0 -1.5 -11.6 -2.0 -4.0 4.1 0.4 -2.5
EBIT margin, % -0.6 1.2 2.3 -0.7 -6.2 -0.2 -1.8 2.0 0.2 -1.4
Result after financial items -17.9 -0.8 1.9 -4.5 -14.5 -11.4 -7.9 2.0 -1.2 -4.3
Net result for the period -7.6 10.3 1.8 -4.6 -15.1 -14.9 -7.7 -0.3 -2.6 -4.4
Earnings per share EUR, basic -0.07 0.06 0.00 -0.03 -0.10 -0.10 -0.05 -0.00 -0.02 -0.03
Earnings per share EUR, diluted -0.07 0.06 0.00 -0.03 -0.10 -0.10 -0.05 -0.00 -0.02 -0.03
Return on equity (ROE), %
2)
-3.7 -3.7 -12.3 -13.5 -12.2 -6.8 -6.8 -1.4 -0.5 1.4
Return on operative capital employed
(ROCE), %
2)
5.3 5.3 -7.1 -11.7 -7.9 -3.5 -3.5 10.2 13.5 17.4
Leverage ratio
2)
3.2 3.2 5.4 6.2 6.3 4.5 4.5 4.3 3.3 3.1
Net working capital -49.8 -49.8 -15.5 -2.4 -5.4 -21.0 -21.0 26.3 -12.1 -6.7
Number of personnel, average 5 024 4 948 5 004 5 041 5 103 5,053 5,079 5,053 5,050 5,031
1)
Items affecting comparability include restructuring costs.
2)
Calculated on a rolling 12-month basis.
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Quarterly segment information
EUR million Full-year 2023 Oct–Dec 2023 Jul–Sep 2023 Apr–Jun 2023 Jan–Mar 2023 Full-year 2022 Oct–Dec 2022 Jul–Sep 2022 Apr–Jun 2022 Jan–Mar 2022
NET SALES
Finland 344.5 98.3 96.6 85.2 64.3 290.1 80.3 79.1 71.9 58.8
Sweden 198.5 56.6 42.2 50.8 48.8 193.8 56.5 44.0 49.4 43.9
Norway 130.1 33.8 31.6 32.4 32.2 176.8 44.3 44.3 46.6 41.6
Denmark 93.0 28.2 21.6 21.4 21.8 74.3 20.9 17.8 17.5 18.1
Sum segments 766.1 216.9 192.1 189.9 167.2 735.0 202.0 185.1 185.5 162.4
Other business 93.7 26.9 23.8 20.3 22.7 99.4 25.6 24.6 25.7 23.5
Eliminations between segments -9.7 -3.5 -2.5 -2.1 -1.5 -10.8 -3.6 -2.7 -2.6 -1.9
Net sales, total 850.1 240.2 213.4 208.1 188.4 823.6 224.0 207.0 208.6 184.0
ADJUSTED EBITA
Finland 6.5 3.2 4.8 0.8 -2.3 8.2 -1.2 4.9 3.6 0.9
% of net sales 1.9% 3.3% 5.0% 1.0% -3.6% 2.8% -1.5% 6.2% 5.0% 1.6%
Sweden 2.9 1.3 0.2 0.9 0.5 -1.0 1.2 0.0 -0.4 -1.8
% of net sales 1.5% 2.3% 0.4% 1.9% 1.0% -0.5% 2.2% 0.0% -0.9% -4.1%
Norway -2.5 -0.8 0.7 -0.8 -1.6 2.1 -2.2 1.6 1.3 1.4
% of net sales -1.9% -2.3% 2.3% -2.5% -4.9% 1.2% -5.0% 3.7% 2.8% 3.4%
Denmark 4.9 1.3 1.1 1.1 1.3 0.6 0.4 0.1 0.0 0.2
% of net sales 5.2% 4.6% 5.2% 5.3% 6.1% 0.9% 1.9% 0.7% -0.3% 0.9%
Sum segments 11.8 5.0 6.8 2.1 -2.1 9.9 -1.8 6.6 4.4 0.7
% of net sales 1.5% 2.3% 3.5% 1.1% -1.2% 1.4% -0.9% 3.6% 2.4% 0.4%
Other business -1.0 0.5 0.3 -0.9 -1.0 -4.0 0.2 -1.8 -1.9 -0.6
% of net sales -1.1% 2.0% 1.4% -4.5% -4.2% -4.0% 0.9% -7.1% -7.5% -2.4%
Group functions -9.1 -2.8 -1.2 -2.7 -2.4 -7.8 -2.4 -0.8 -2.0 -2.6
Adjusted EBITA 1.7 2.8 5.9 -1.5 -5.5 -1.9 -4.0 4.1 0.5 -2.4
% of net sales 0.2% 1.2% 2.8% -0.7% -2.9% -0.2% -1.8% 2.0% 0.2% -1.3%
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Adjusted
EBITA and -margin
Adjusted EBITA and -margin, % are used to measure business and seg-
ment profitability. Income statement items below adjusted EBITA are not
allocated to segments.
Note 3: segment
results
Adjusted EBITA: Operating result before acquisition-related amortizations
and items affecting comparability
Adjusted EBITA margin, %:
Adjusted EBITA x 100
Net sales
Adjusted EBITA and -margin, % for segments represent the sum of seg-
ments: Finland, Sweden, Norway and Denmark.
Items affecting
comparability
These include capital gains and/or losses and transaction costs related to
divestments and acquisitions, restructuring and resizing expenses and
other items that according to Eltel’s management’s assessment are not
related to normal business operations.
Note 3: segment
results
EBITDA and
adjusted EBITDA
EBITDA is operating result (EBIT) before depreciations and amortizations.
Adjusted EBITDA excludes items affecting comparability. Adjusted
EBITDA is used in calculating the leverage ratio
Five-year summary:
Cash flow from
operating activities
EBIT margin
Operating result (EBIT) and -margin, % are used to measure profitability
before interest and taxes.
Income statement
EBIT margin, %:
EBIT x 100
Net sales
Definitions and key ratios
Eltel applies ESMA’s (European Securities and Markets Authority) guidelines for alternative performance measures
(APM). In addition to the financial measures defined in IFRS, certain key figures, which qualify as alternative per-
formance measures (APMs) are presented to reflect the underlying business performance, facilitate analysis of the
Group’s development as followed by Group Management and enhance comparability from period to period. The
definition of these key figures is presented below and relevant information enabling reconciliations to IFRS measures
can be found in connection with relevant parts of the report. These APMs should not be considered as a substitute for
measures in accordance with IFRS.
IFRS Key ratios
Alternative performance measures (APMs)
KEY FIGURE
1) Calculated on a rolling 12 months basis
KEY FIGURE REFERENCEDEFINITION AND REASON FOR USE
KEY FIGURE REFERENCEDEFINITION AND REASON FOR USE
Earnings per
share (EPS)
Net result attributable to equity holders of the parent - interest on hybrid bond
Weighted average number of ordinary shares
Return on
equity (ROE), %
Return on equity (ROE), % represents the rate of return that shareholders
receive on their investments.
Income statement
and balance sheet
Return on equity (ROE), %
1)
:
Net result x 100
Total equity (average over the
reporting period)
Operative capital
employed and
Return on operative
capital employed
(ROCE), %
Operative capital employed is the amount of net operating assets the
business uses in its operations.
Note 3: Net working
capital and operative
capital employed
Return on operative capital employed (ROCE), % represents how effectively
total net operating assets are used in order to generate return in the oper-
ating business.
Operative capital employed: Net working capital + Intangible assets
excluding goodwill and acquisition-re-
lated allocations + Property, plant and
equipment and Right-of-use assets
Return on operative capital
employed (ROCE), %
1)
:
Adjusted EBITA x 100
Operative capital employed
(average over the reporting period)
Net debt and
leverage ratio
Net debt represents Eltel’s indebtedness. It is used to monitor capital
structure and financial capacity. It is also used in calculating the leverage r
atio. The leverage ratio is defined as covenant in Eltel’s financing agreement.
Net debt: Note 14.4
EBITDA: five-year
summary, cash flow
from operating
activities
Net debt: Interest-bearing debt - cash and cash equivalents
Leverage ratio
1)
:
Net debt
Adjusted EBITDA
Net working
capital
Net working capital is used to follow the amount of capital needed for
the business to operate. Used also as a factor to calculate operative
capital employed.
Note 3: Net working
capital and operative
capital employed
Net working capital : Net of inventories, trade and other re-
ceivables, provisions, advances received
and trade and other payables, excluding
items in these balance sheet items that
are not considered to form part of opera-
tive working capital: derivative valuations
and income tax liabilities.
Committed
order backlog
Committed order backlog is the total value of committed orders received
but not yet recognized as sales. It does not include frame agreements
unless a binding purchase order has been received. It is the best measure
of unsatisfied performance obligations according to IFRS 15 Revenue from
contracts with customer.
Note 4: Committed
order backlog by
business and service
type
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Financial calendar 2024–2025
Annual General Meeting 2024 14 May 2024
Interim report January–March 2024 26 April 2024
Half-year report 2024 25 July 2024
Interim report January–September 2024 31 October 2024
Full-year report 2024 February 2025
Contact information
Tarja Leikas
CFO
Phone: +358 40 730 77 62
E-mail: tarja.leikas@eltelnetworks.com
Elin Otter
Director, Communications and Investor Relations
Phone: +46 72 595 46 92
E-mail: elin.otter@eltelnetworks.com
Eltel AB
Visiting address:
Adolfsbergsvägen 13, Bromma
POB 126 23
SE-112 92
Stockholm
Sweden
Telephone: +46 8 585 376 00
E-mail: info.sweden@eltelnetworks.com
www.eltelgroup.com
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Printed matter
3041 0123
Production: Narva and Eltel.
Photo: Thomas Carlgren (p. 46–47).
All other images Eltel.
Printing: Elanders Sverige AB 2024.
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