Annual Report
2021
The reliable partner for
securing infranets
Eltel and the world around us
The year in brief 1
This is Eltel 2
CEO’s review 4
Strategy 6
Market trends 8
Our operations
Services 10
Segments 12
§
Sustainability
Highlights 2021 23
Our approach 24
Health and safety 26
Environment and climate 27
People and society 29
Supply chain 30
Business ethics 31
Board of Directors’ report 32
Risk Management 37
Corporate Governance report 41
Board of Directors 48
Group Management Team 49
Financial reports
Consolidated nancial statements 51
Notes to the consolidated nancial statements 55
Parent Company nancial statements 89
Notes to the Parent Company nancial statements 93
Auditor’s report 97
Other information
The Eltel share 102
Five-year summary and quarterly gures 104
Denitions and key ratios 106
Financial calendar and contact information 107
Content
Eltel is a leading Nordic eld service
provider for communication and
power networks enabling a more
sustainable and connected world
today and for future generations.
1.8%
Operative EBITA margin
812.6
Net sales, EUR million
14.8
Operative EBITA,
EUR million
5,046
Number of employees
The year in brief
Key gures2021 Highlights
Eltel improved productivity and protability in 2021 and made progress
on its strategic objectives. A divestment furthered Eltel’s strategy
to focus on the Nordics as it continued to build a more stable and
protable business. There were challenges in the market, and Eltel
adapted to market developments to ensure it continued to deliver
quality services to its customers.
Improved productivity and protability
Productivity and protability improved even though net sales
decreased compared with the year before. The operative
EBITA margin increased to 1.8% in 2021.
Continued Nordic strategy
In line with Eltel’s strategy, focus was maintained on the
Nordic markets, where the company has a leading market
position, high competence and where the business model is
repetitive and primarily targeted towards build, service and
maintenance. During the year, Eltel divested its high voltage
business in Germany and closed its operations in the UK,
Georgia and Mozambique.
Sustainability in focus
In 2021, Eltel improved its safety performance, committed to
the Science Based Targets initiative and improved the CDP
Climate Change score for taking coordinated actions on
climate issues.
COVID-19
The pandemic reduced customer investments, delayed
projects, and increased material and logistics costs during
the year. However, the infranet markets are robust and all
Country Units (CU) responded well to the challenges, despite
quarantine requirements and increasing employee sick-leave
rates towards the end of the year.
Year over year we were in
line with the net debt levels,
while the return on operative
capital employed clearly
improved.
– Casimir Lindholm
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
ELTEL Annual Report 2021 | 1
We are Eltel
Eltel is a leading Nordic eld service provider for critical
communication and power networks – infranets.
Securing the lifelines of modern society
Everyone depends on stable communication and power
networks. Eltel builds, maintains and upgrades these essential
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
provides infrastructure that allows renewable energy generation,
electric vehicle charging and high-capacity communication
networks. This enables the electrication and digitalisation of
society, and new ways of living and interacting.
Our services and offering
We deliver a comprehensive range of communication and
power services – from project delivery to maintenance and
upgrade solutions – primarily for the owners of communication
and power networks. We typically offer a 24/7 and comp-
rehensive geographical presence in our home markets.
Most of our work is conducted through long-term frame-
work agreements that enable us to collaborate with customers
to achieve their objectives. We accomplish this through
our business strategy, which focuses on delivering on our
customer promises, streamlining our operations and improving
productivity. Read more about our strategy on page 6.
In 2021, we continued to focus on our core activities and
Nordic markets, as well as our strategic transformation.
Why invest in Eltel?
We keep society working by securing good commun-
ication connections and by ensuring power can be
supplied to end users. Our services make society
more robust with well-managed and state-of-the-art
communication and power networks.
• We are the Nordic market leader
• Market trends support the growth of our business
• We enable a sustainable society and minimise our
negative climate impact by setting science-based
targets
• We focus on operational excellence, cost efciency
and sustainable protable growth
• We are a quality-focused organisation
• We enable cross-border synergies
This is Eltel
2 | ELTEL Annual Report 2021
Services Offerings Markets Customers Net sales 2021
Communication
The market leader in the
Nordic region.
Read more about our
communication services
on page 10.
• Maintenance of mobile and xed
networks
• Upgrades to mobile and xed
networks
• The Nordics
• Lithuania
• Telecom operators
• Local industrial
customers and the
public sector
Power
Large regional stakeholder
active in the Nordics, Poland
and Germany.
Read more about our
power services on page11.
• Maintenance in electricity
distribution and transmission
• Upgrades in electricity distribution
• High Voltage projects
• Smart Grids
• Power Transmission projects
outside Europe
1)
• The Nordics
• Poland
• Germany
• Network operators
• Local industrial
customers and the
public sector
• Utility companies
FINLAND
Net sales:
EUR 299.6 MILLION
SWEDEN
Net sales:
EUR 182.2 MILLION
NORWAY
Net sales:
EUR 160.5 MILLION
DENMARK
Net sales:
EUR 87.9 MILLION
OTHER BUSINESS
Net sales:
EUR 91.9 MILLION
Number of employees:
1,496
Number of employees:
914
Number of employees:
939
Number of employees:
461
Number of employees:
1,085
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
1)
Under ramp down.
62%
37%
ELTEL Annual Report 2021 | 3
CEO’s review
Continuing to deliver on our
long-term strategic journey
Eltel President and CEO Casimir Lindholm looks back on another year of
improvement as the company embarks on the next step in its strategic
journey in 2022.
Eltel is well positioned to
gear up and focus on
sustainable protable
growth.
What were the key developments for Eltel in 2021?
2021 was another year with improved productivity and prot-
ability in the Nordics and we made good progress on our
strategic objectives. We continued to build a more stable and
protable business with a Nordic focus as we divested our high
voltage business in Germany and closed our operations in the
UK, Georgia and Mozambique. This further decreased our net
sales according to plan and we have now reached our new
base line for growth in the Nordics.
During the year, we faced challenges regarding postponed
projects, higher material and logistics costs due to the ongoing
pandemic, and high ination. However, I am satised with how
we managed these challenges to continue to deliver quality
services to our customers.
We made signicant progress on sustainability as we
committed to the Science Based Targets initiative and began
developing our science-based climate targets, which will be
announced later this year. I am also proud of our improved score
on the CDP Climate questionnaire for taking coordinated action
on climate issues.
How would you summarise the Operational Excellence
strategy period from 2019–2021?
After executing operational excellence projects in Finland,
Norway and Denmark, we saw positive impacts from these
efforts in 2021 with reduced costs and improved productivity in
these as a result. During the year, we accelerated operational
excellence initiatives in Sweden that we expect to yield similar
benets in the coming years.
How has Eltel changed since it began its
“Transformation Journey” ve years ago?
Importantly, we have laid the foundation for growth, substan-
tially reduced our net debt and improved our cash ow. Eltel is
now nancially a much healthier and more stable company. This
transformation was essential for us as a company to be able to
deliver according to the strategy and our long-term goals.
We have reduced the number of large projects from 120
to ve as we have transformed Eltel into more of a service
company. And in line with our Nordic strategy, we are now active
in seven countries compared to eleven ve years ago.
How would you summarise Eltel’s nancial
performance in 2021?
Our improved productivity and protability in the Nordics is
reected in our improved operative EBITA margin of 1.8%.
However, our EBITA was negatively affected by lower net
sales, ongoing challenges in the Polish High Voltage business
and increased material prices. Year over year we were in line
with the net debt levels, while we improved our return on
operative capital employed from 13.0 to 23.6%.
Lower net sales than expected were caused by two main
issues: the loss of two major agreements and reduced
customer investments because of COVID-19. In response,
we are sharpening our offering and pursuing organic growth
opportunities.
What does the next phase of Eltel’s strategy “Investing
in Sustainable Protable Growth 2022–2023” mean for
the company?
Following our focus on protability in the Nordic markets
in recent years, we will now strive for growth in these home
markets – both organic and through M&A – as we aim to
re- establish Eltel as a company with over EUR 1 billion in
annual net sales in the long term.
How is the general market situation?
Our core markets are healthy, and we continue to be a
communication leader throughout the Nordics and a leader
in the Finnish power market. 5G and bre are the main drivers
of the communication market, as well as work to dismantle
3G and copper networks. In power, there is a clear demand to
upgrade and modernise power grids in the Nordics.
4 | ELTEL Annual Report 2021
2021 was another year with
improved productivity and
protability in the Nordics.
What does the Science Based Targets initiative
commitment mean for Eltel?
It steps up our climate work in the long term, we continue to
reduce emissions from our vehicle eet, switch to renewable
energy in our premises and focuses on reducing climate impact
from our supply chain. I believe it also sends a clear message
to our customers as we aspire to become a climate leader that
can help solve their challenges as sustainably as possible.
What other sustainability progress was made in 2021?
We have a holistic sustainability strategy that supports the ten
principles of the UN Global Compact and the UN Sustainable
Development Goals. I feel we made particularly good progress
in safety during the year as our Lost Time Injury Frequency Rate
per million hours worked fell from 4.9 in 2020 to 3.8 in 2021. In
our employee engagement survey, our employees highlighted
that they appreciate that we take their safety seriously.
What do you see as the main challenges and
opportunities in 2022?
One of our priorities is to turn around Sweden – where we have
opportunities to work with operational excellence and drive
growth in our ongoing smart meter roll out projects. We also
aim to achieve organic growth of between 2–4% throughout
the Nordics and will look to fully implement our Nordic strategy
by nding alternatives for our Polish and German operations.
Additionally, I see opportunities for consolidation of the market,
and for Eltel to make small to medium-sized mergers and
acquisitions in the Nordics going forward.
Do you have any concluding remarks?
I am grateful to all our employees for their efforts during the
year, and to our customers, shareholders and other stake-
holders for all the good collaboration.
Casimir Lindholm
President and CEO
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
ELTEL Annual Report 2021 | 5
Strategy
Our strategy – towards
sustainable protable growth
In 2021, we completed the Operational Excellence phase of our strategy.
Our strategic focus is now on investing in Sustainable Protable Growth
until the end of 2023 as our strategic transformation continues.
After getting our “House in Order” in
2017 and 2018, which involved focusing
on our core markets and mitigating
business risk, we completed our
Operational Excellence phase in 2021.
We have delivered on what we have
promised in recent years, and Eltel is
now in a solid nancial position and
well positioned to gear up and focus on
sustainable protable growth.
Delivering on Operational Excellence 2019–2021
Our strategic transformation – a Nordic
and sustainability focus
Eltel is transforming into a Nordic company, based in countries
in which it has a market-leading position. A Nordic focus with
lower risk and fewer capital-intensive projects will enable Eltel
to continue to develop, grow and invest in order to ensure
long-term value creation for the company, its shareholders and
society at large.
Sustainability is key to our success and an integral part of
our strategy. For Eltel, this means building a strong protable
company for the future and delivering lasting nancial, social
and environmental value.
During 2021, Eltel stepped up its climate work ambitions by
committing to the Science Based Targets initiative. This global
initiative helps companies put science-based climate targets in
line with the Paris Agreement (see page 24–25 for more on our
approach to sustainability).
The way forward: Investing in
Sustainable Protable Growth
2022–2023
From 2022, our focus is on investing in Sustainable
Protable Growth. This involves:
• Increasing market share in the Nordics
• Innovation and new market development
• Replicating existing business models
• Pursuing M&As in the Nordics
• Industry sustainability leadership
Successful divestments
We sold non-core business,
incl. unprotable and capital
intensive businesses.
4
Increased Nordic focus
We have strength-
ened our focus on
core markets, and
closed operations
in the UK, Georgia,
Ethiopia, Mozam-
bique, Rwanda and
Liberia.
Businesses
divested
6 | ELTEL Annual Report 2021
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel’s long-term goals
Our strategy is based on three long-term goals that are mutually supportive and contribute
to our success. The three goals directly relate to environmental, social and economic
sustainability and guide our way of working:
Eltel’s targets by end of 2023
Rewarded owners
Group operative EBITA margin 5%
Annual growth in the Nordics from 2022 onwards 2–4%
Leverage 1.5–2.5x net debt/EBITDA
Dividend payout Subject to leverage target
Satised customers
Customer satisfaction index >75
Engaged Employees
Employee satisfaction & motivation >3.75
Lost time injury frequency Goal zero
Short-term sick leave <2.5%
Satised
customers
Engaged
employees
Rewarded
owners
Improved balance sheet
Net debt Net working capital
0
50
100
150
200
202120202019
123.8
75.3
67.4
58.3
69.2
53.3
Net debt, 2021 nancing agreement, MEUR
IFRS 16 lease liabilities, MEUR
-25
-20
-15
-10
-5
0
202120202019
-6.3
-25.1
-16.0
-11,3
MEUR
Improved protability
Operative EBITA and EBITA margin
-10
0
10
20
202120202019
MEUR %
-11.3
11.4
14.8
ELTEL Annual Report 2021 | 7
The market trends transforming
the infranet sector
Market trends present both challenges and opportunities and
shape the outlook for players in the infranet sector.
The inuence of global megatrends on society
Overarching megatrends such as digitalisation, electrication,
urbanisation and climate change drive the demand to install,
upgrade, maintain and secure communication and power
networks. Infranets are therefore increasingly essential life-
lines for modern society that meet the day-to-day needs of
businesses and individuals.
Infranets enable a more sustainable and low-carbon society.
They provide the infrastructure for electric vehicles and
renewable energy, and build communication networks that
support the digitalisation of society.
Market trends Impact on the sector Sector response
Changing consumption
behaviour
• Increased digitisation and data usage
• Societal shift to electrication, including
industry and road transport
• Infrastructure upgrades – including 3G
dismantling and HetNet/LAN/access roll-outs
(ahead of 5G/IoT roll out)
• Investments in power networks and
infrastructure
Increased use of
renewable energy
• Demand for Renewable Energy Sources (RES) • Investments in wind and solar energy
• Network investments in load management
Transition to smart
energy solutions
• Demand for energy efcient solutions • Large national smart meter roll outs and
other energy efcient solutions (e.g. LED
lighting)
Increased demands on
delivery reliability
• The EU is driving harmonisation and setting
targets for minimum broadband capacity and
availability
• Governments across Europe are demanding
reliable power networks and RES
• Mandatory automated meter management
• Fibre roll out
• Network investments in improved operations
and service levels to meet stringent
requirements
Ageing power
infrastructure
• Current power networks are approaching the
end of their technical life
• Upgrades of infrastructure/load
management/smart grids
• Network investments
Market trends
Market trends shape our sector
The infranet sector is constantly changing. The table below
summarises the key market trends, their impact on the sector
and how the infranet sector is responding.
8 | ELTEL Annual Report 2021
Market summary and Eltel’s outlook
Eltel’s home markets in the Nordics are stable with good opportunities for growth in the coming
years. We continuously monitor market trends and our surrounding environment to identify
and adapt to potential threats and opportunities. Sustainability continues to be increasingly
important in our markets for both customers and end users.
Fibre
Fibre penetration is high in Sweden and partly in Norway.
However, as it remains a growth area in Denmark and Finland,
it continues to be important to our business.
5G
Eltel is a frontrunner in the sizable 5G mobile communication
roll out market in the Nordics. The 5G market is expected to be
a growth market in the coming years as roll out continues along
with the need to densify and further enhance the network.
Fixed communication
Fixed wireless access will continue to grow, and we also see
increasing opportunities in services related to private networks.
Power grid upgrades
The demand to upgrade outdated power grids remains strong.
A signicant driver for upgrading regional networks is the need
for connecting renewable energy sources and electric vehicle
charging stations.
Smart meters
The roll out of smart meters continues in various phases in our
markets. This includes major ongoing roll outs and a pipeline
for future projects.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
ELTEL Annual Report 2021 | 9
Communication
We optimise communication networks and help meet societal needs
for greater digitalisation, which is revolutionising how we live, work
and play.
Services
Modern and high-capacity communication networks support
the digitalisation of society and enable people to interact in
new ways. This reduces the need to travel and creates new
opportunities for people and businesses.
Our communication offering
Eltel’s communication offering provides a broad range of
services from designing and planning to the building, installing,
upgrading, operating and servicing of mobile and xed
communication networks. Communication constitutes around
two thirds of Group revenue.
Our main customers are large telecom operators and
communication network owners. Eltel’s business generally
involves long-term relationships with a steady inow of orders
generated by framework agreements.
Communication opportunities
We are capitalising on market growth in 5G, which will
continue in the next few years along with Fixed Wireless
Access (FWA), and both public and private indoor
communication infra structure solutions such as Distributed
Antenna Systems (DAS). There are also ongoing opportunities
for us in the bre market.
We continue to develop and provide services for both new
and existing customers that complement our core business
offering. This includes services related to indoor coverage,
private 5G networks, Network Operations Centres (NOCs) and
OTIT (Operation Technology IT) solutions. We are also enjoying
increased opportunities relating to IoT sensors as more devices
are connected to the internet and as customers become
increasingly interested in smart solutions.
10 | ELTEL Annual Report 2021
Power
Our power services enable the electrication of society, which
is essential for more sustainable energy systems and national
carbon-neutrality objectives.
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.
Our power offering
The power market can be roughly divided into three areas:
maintenance, projects and turnkey projects, in which Eltel is
responsible for design as well as planning and construction of
the projects. Our main customers are power companies and
large network owners. Power constitutes around one third of
Group revenue.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Power opportunities
The demand for increased network capacity and capabilities
is a major driver in the power market that will continue in the
coming years. We are also tapping into the ongoing need
to upgrade outdated power grids and install smart meters.
Renewable energy, particularly wind power investments, is
also driving the market. Areas such as charging infrastructure
for electric vehicles and solar panel installation are growing,
although from a low level.
We continue to sign more long-term partnership contracts.
Such contracts not only provide long-term stability, they also
help Eltel expand its share of the value chain.
ELTEL Annual Report 2021 | 11
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Segments
Eltel Finland
Eltel Finland serves a diverse market of network owners and
system operators. The CU is the leading infranet service
provider in Finland and is a trusted partner with around 60
ofces offering a nationwide presence. It can take on complex
projects and quickly mobilise hundreds of repair technicians in
the event of a storm or other type of emergency.
Developments in 2021
In 2021, Eltel Finland improved its protability thanks to greater
efciency through better daily performance management and
the establishment of forward-looking KPIs and performance
monitoring systems.
In order to reduce risk, Eltel Finland began pursuing more
service agreements rather than large power projects. Eltel
Finland is also increasingly serving industrial customers.
Sales growth in communication is being driven by bre to the
home (FTTH) and 5G. This growth is expected to compensate
for an anticipated decrease in power distribution investments
in 2022 due to a new energy market law.
Eltel Finland offers all of Eltel’s services – including power,
communication and smart grids. The CU installs power transmission
lines, substations, bre, 5G and streetlighting, and manages fault
repair and maintenance contracts.
Sustainability progress
Safety is the top priority and weekly meetings at team level
have been introduced in order to promote and review safety
reporting. By regularly considering safety, the weekly meetings
keep safety in focus. Safety reporting was enhanced and
overall safety performance improved over the year.
Eltel Finland works in partnership with customers to pilot
new solutions such as electric excavators and microtrenching,
which is faster and reduces emissions, disruptions and costs.
The CU has created a roadmap for replacing its eet of
700 vans into electric vehicles. The rst 50 electric vans were
ordered in 2021. A route optimisation tool that promotes
the efciency of individual technicians and reduces vehicle
emissions was piloted in the spring before being rolled out
nationwide.
Market outlook
Fibre and 5G continue to be the drivers of the communication
market and Eltel Finland is the market leader in both. Indoor
communication networks and private 5G networks are also
becoming an important offering for Eltel in Finland. These
include private networks for hospitals, shopping centres and
large industrial facilities.
The power distribution market is likely to see reduced
investment from 2022 due to new regulations, but growth in
the power transmission market continues. An ongoing trend in
Finland is the increased need for upgrading regional network
connections due to the establishment of more wind farms in
the country.
Competitors
• Voimatel
• Enersence
• ENP
• Elvera
• TLT
Major agreements awarded in 2021
• Power transmission lines for OX2
• Electricity network development in Ostrobothnia for Caruna
FINANCIAL PERFORMANCE
2021 2020
Net sales (EUR million) 299.6 300.2
Operative EBITA (EUR million) 12.7 7.2
Operative EBITA margin (%) 4.2 2.4
Number of employees 1,496 1,470
Net sales 2021
Communication Power
12 | ELTEL Annual Report 2021
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Case
Connecting Finland’s
largest wind farm
As the Finnish market leader in the construction of
transmission lines and a major player in substation
construction and services, Eltel supports the growing
wind power sector, which is driving Finland towards
climate neutrality.
W
ind power is booming in Finland as the country
works towards becoming carbon neutral by
2035. In 2021, around 21,300 MW of wind
power projects were under development.
Providing wind power transmission lines
and substations
Wind farms require high-capacity transmission lines
and new substations. Eltel is the market leader in
constructing transmission lines in Finland and is a major
player in substation construction and services.
“We are a reliable nationwide partner that network
operators and wind power companies can rely on to
connect their wind farms throughout Finland,” says
Tuomas Antikainen, Sales Director – Transmission, Wind
and Cabling at Eltel Finland. “Wind power customers
appreciate our unique ability to not only be able to
deliver both transmission lines and substations, but also
medium voltage cables and bre network connections.
Only Eltel offers this in Finland.”
Connecting Finland’s largest wind farm
When completed, the new wind farm in Lestijärvi, Central
Ostrobothnia, will comprise 69 turbines in three wind
farms with a total capacity of 400 MW.
“We are constructing an approximately 60 km long
400 kV transmission line and an approximately 25 km
long 110 kV line,” says Antikainen. “Once completed,
the wind farm will be Finland’s largest and will meet the
equivalent annual electricity needs of around 73,000
Finnish family homes.”
Key facts
Client: OX2
Services: transmission lines
Period: 2022 – 2024
Value: EUR 22 million
ELTEL Annual Report 2021 | 13
Segments
Eltel Sweden
Eltel Sweden’s power business focuses on the low to medium
voltage distribution segment and substation cabling. Smart
meter installation is a signicant part of the business with large
ongoing roll out projects. The CU has a national presence and
the capability to deliver complex frame agreements with a
skilled workforce.
Developments in 2021
Eltel Sweden experienced a weak start to the year due to harsh
winter conditions, but the result improved after the summer
and some challenging long-term projects were nalised in
2021.
To improve protability and align with one national operative
model, project “Ett Eltel” (One Eltel) was launched. Ett Eltel also
aims to ensure that national customers recognise Eltel as one
company, as well as strengthen Eltel as a good employer.
In smart meter installation, Eltel Sweden strengthened its
market leading position. Sharing best practices and stream-
lining processes have been key success factors in scaling
smart meter installation capabilities in partnership with key
stakeholders.
The communication business accounts for around 90% of Eltel’s turn over in
Sweden. Eltel installs and maintains 5G and bre networks and is a major player
in the bre to the home (FTTH) market. The CU works with indoor, xed and Wi-Fi
networks, as well as radio communications and public infrastructure. Customers
include national operators, network and infrastructure owners and municipalities.
Sustainability progress
Eltel Sweden aims to reduce vehicle emissions by 50%
between 2019 and 2025 by using renewable diesel in vans and
excavators, and phasing in electric vehicles from 2022. Around
10% of vehicle fuel is now fossil free and most of the remaining
fuel is biodiesel with up to 42% renewable content.
Waste is another focus area with the target to reduce non-
recyclable waste by 50% from approximately 43% 2019 by
2025. During the year, a new contract was signed with a waste
recycling partner and recycling stations at Eltel premises were
improved with more alternatives.
Market outlook
Eltel Sweden is looking into new public infrastructure
opportunities, such as smart level crossings and roadside
weather station sensors (see Case Story on page 15).
Going forward, Eltel Sweden is focusing on broadening the
collaboration with existing customers and offering current
services to new customers, such as indoor, xed/Wi-Fi to real
estate owners and helping them to build and improve their
network coverage, capacity and quality.
Competitors
• Transtema
• OneCo
• Scanmast
• Netel
Major agreements awarded in 2021
• 5G installation for Tele 2 and Telenor
• 3G demolishing projects for Tele 2 and Telia
FINANCIAL PERFORMANCE
2021 2020
Net sales (EUR million) 182.2 224.5
Operative EBITA (EUR million) -1.8 -3.7
Operative EBITA margin (%) -1.0 -1.6
Number of employees 914 1,003
Net sales 2021
Communication Power
14 | ELTEL Annual Report 2021
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Case
Eltel secures key Swedish
transport infrastructure
Eltel is conducting a full weather station upgrade
in Central and Northern Sweden that will enable
better weather forecasting, monitoring and planning
capabilities – and ultimately promote road safety.
Modernising critical infrastructure
In March 2021, Eltel won a four-year contract to carry out
a full sensor upgrade for 266 roadside weather stations
in Northern and Central Sweden. The stations collect
information on winter road conditions and allow the
Swedish Transport Administration to predict potentially
disruptive weather conditions.
“The existing sensors were 8–10 years old and had
reached the end of their operational life,” says Magnus
Rosenberg, National Sales Infrastructure Manager at
Eltel Sweden. “The state-of-the-art hardware we are
installing is more accurate and provides higher quality
data, such as high-denition video, while enabling higher
data speed and capacity connections.”
Promoting road safety is a top priority
Improved road safety is the main objective of the project
as the upgrade will enable the Swedish Transport
Administration to provide better weather forecasting,
monitoring and planning for their road network. This will
promote road safety by optimising the use of resources
and issuing accurate warnings of potentially dangerous
driving conditions.
“Eltel is a natural partner when organisations want to
install different kinds of sensor solutions as we have the
expertise, skills and scale to deliver any kind of project –
as this partnership illustrates,” says Rosenberg.
Key facts
Client: the Swedish Transport Administration
(Trakverket)
Services: sensor upgrade
Period: summer months 2021-2024
ELTEL Annual Report 2021 | 15
SegmentsSegments
Eltel Norway
Eltel Norway is the leading service provider with the competence
and capacity to deliver throughout the entire value chain, includ-
ing turnkey projects and innovative solutions for ensuring cost
efciency and quality. The CU also draws on Eltel’s cross-border
workforce to meet demand during typical peak business periods
and ensure cost effectiveness (see Case Story on page 20).
Developments in 2021
The COVID-19 pandemic impacted Eltel Norway more than in
2020 with postponements in customer investments and project
implementation. This reduced net sales, although the market
remains strong and is expected to stabilise in 2022. In order
to improve efciency, productivity and quality, a number of
developments were made during 2021.
Eltel Norway invested in the creation of a Project
Management Ofce comprising senior project managers to
oversee all projects over EUR 1 million and ensure protability.
Additionally, a “5G Factory” was created to share best practice
on how to deploy a centralised roll out of 5G solutions.
The implementation of the digital order management system
(EOS) was completed along with the centralised dispatching
of technicians. This led to optimisation of the dispatch process
by promoting better use of technicians and decreasing fuel
consumption.
Eltel Norway is the market leader in the communication market, offering everything
from installing to maintaining xed and mobile communication networks. This includes
design, planning, project management, testing and documentation. The CU serves
operators, utility companies, regional bre operators and private companies.
Sustainability progress
During the year, Eltel Norway focused on electrifying its vehicle
eet and promoting low-carbon excavation techniques. The
CU committed to replace all of its approximately 600 vehicles
to electric vehicles by 2026. The rst 120 vehicles will be
delivered in 2022.
In 2021, 8–10% of all Eltel’s excavation work in Norway,
mainly for bre to the home (FTTH), was conducted using
microtrenching. As the solution avoids the need for diesel
excavators, it reduces CO
2
emissions, noise, local disruption
and cost.
Market outlook
In mobile communication, 5G roll out and densication
is expected to drive growth in the coming years. In xed
communication, bre investments are expected to decrease
while xed wireless access will continue to grow as a result of
copper decommissioning and access to 5G coverage.
The growth in electric vehicles in Norway has created a
large demand for electric vehicle charging station installation
services. There are also signicant opportunities in IoT sensor
solutions in multiple industries.
Eltel Norway sees several opportunities to work higher up
the value chain, for example, by taking more responsibility for
planning projects and offering consultancy services – as well as
its core installation and maintenance offering.
Competitors
• OneCo
• Netel
• UBConnect
• Sitecom
• Site Service
Major agreements awarded in 2021
• Telenor 5G upgrade – in several counties
FINANCIAL PERFORMANCE
2021 2020
Net sales (EUR million) 160.5 177.7
Operative EBITA (EUR million) 9.2 14.3
Operative EBITA margin (%) 5.7 8.0
Number of employees 939 943
Net sales 2021
Communication Power
16 | ELTEL Annual Report 2021
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other informationEltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Case
Preferred nationwide 5G and
FWA partner in Norway
Eltel is working with Telenor and Telia in Norway to
install the latest network solutions.
I
n Norway, Eltel has been a vital part of the 5G roll out
from the very beginning, participating in eld pilots
back in early 2019. A large-scale 5G roll out has started
in all major cities and is expected to cover the entire
country by 2024.
Fixed Wireless Access (FWA) – a game changer for
wireless broadband
Currently, FWA mainly runs on 4G, but this is rapidly
changing as network operators gradually upgrade to 5G
– making FWA a fully-edged alternative to bre. FWA is
particularly useful in rural areas and can provide every-
one with cost-effective and high-speed communication.
“Eltel is proud to be the preferred partner and main
provider of 5G and FWA for the largest telecom operators
in Norway,” says Joakim Johansen, FWA Expert at Eltel
Norway. “Upgrading to 5G enables more stable FWA net-
works offering greater speed, capacity and opportunities
for additional services.”
Societal benet
“As FWA does not require excavations in order to lay
cables, it reduces environmental impact and speeds up
the connection process,” says Johansen. “Most of the
equipment we have in Norway is also 5G-ready, which
means we don’t need to replace it with new hardware.”
Networks enhanced by 5G and FWA will enable more
people to work from home and travel less, while also
benetting from greater connectivity and the Internet of
Things.
Key facts
Clients: Telenor and Telia
Services: 5G and FWA installation
Period: ongoing
ELTEL Annual Report 2021 | 17
SegmentsSegments
Eltel Denmark
In the power market, Eltel Denmark primarily deals with
medium and low voltage systems – such as modernising the
Danish power network for renewable energy, electric bus
charging systems in Copenhagen and upgrades to municipal
LED lighting.
Developments in 2021
Following a strong rst six months, Eltel Denmark experienced
a weaker second half of 2021 after the completion of a large
communication project and the insourcing by a major customer
of an agreement. The CU restructured its business to adapt to
the new market situation and worked proactively to develop its
business and identify growth opportunities.
This resulted in new orders, such as the rst water meter
replacement contract for a customer in the northern part of
Jutland. Such new opportunities will continue in 2022 and are
expected to have a positive impact on the business.
In addition, the CU increased its focus on the power market.
Denmark’s aging power network needs upgrading and
reinforcing to cope with the roll out of vehicle charging stations
and renewable energy.
The communication market accounts for around 75% of Eltel’s revenue in Denmark.
Eltel is a market leader in the country’s peaking bre market and operates in the
mobile network market, such as 5G. Eltel Denmark also works on communication
projects for the national rail network and the emergency services.
Sustainability progress
The sustainability focus in Denmark has been on monitoring
vehicle emissions and trialling new models of small electric
vans in Eltel’s operations, sourcing efcient and hybrid vehicles,
and installing vehicle charging stations at Eltel’s ofces and in
employees’ homes. The CU won a vehicle industry award for
its work during the year. Eltel Denmark also renegotiated its
electricity contract to be 100% renewable in 2021.
Switching to electric and more efcient vehicles is the CU’s
greatest sustainability opportunity. The challenge is identifying
the optimal timing for investments, which will differ in urban
and rural areas and may reduce operational efciency if
investments are made too early or too late.
Market outlook
5G installation for major customers will continue to increase
as Eltel works on approximately 4,000 sites around Denmark.
The bre market may have peaked in 2021, but the market will
remain strong in the coming years.
The entire Danish power market will grow in 2022 and
beyond as vehicle charging and renewable energy continues
to expand. Eltel has a strong presence in the Eastern Denmark
and has signicant potential to expand in the power market in
Western Denmark.
Competitors
• Kemp & Lauritzen
• Bravida
• Atea
• Intego
Major agreements awarded in 2021
• Aarhus municipality – installation and maintenance of bre
and electricity supplies in municipality-owned properties
• Banedanmark – consultancy and infrastructure design
FINANCIAL PERFORMANCE
2021 2020
Net sales (EUR million) 87.9 118.1
Operative EBITA (EUR million) 4.2 5.0
Operative EBITA margin (%) 4.8 4.3
Number of employees 461 637
Net sales 2021
Communication Power
18 | ELTEL Annual Report 2021
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other informationEltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Case
Securing train operation and
passenger comfort in Denmark
Eltel maintains power conversion stations in
Copenhagen and preheater stations throughout
Denmark to ensure trains run smoothly while
promoting passenger comfort.
T
he two 4-year contracts for Banedanmark were
won in 2021 to maintain and service power con-
vertor stations for the commuter S-train (Danish:
S-tog) in Copenhagen and train preheater stations
throughout the Danish railway network.
“We are very proud to manage these prestigious
and essential servicing contracts,” says Claus
Metzsch Jensen, Managing Director at Eltel Denmark.
“The project allows us to demonstrate our skills and
capa bilities, while playing our part in keeping trains
running and promoting passenger comfort.”
Safeguarding key public transport infrastructure
The Copenhagen S-train is a key part of public transport
in the city. Eltel services and maintains all 37 of the
conversion stations that convert the 10 kV high voltage
power supply to the required 1.65 kV to power the trains.
It also conducts all scheduled maintenance and resolves
any issues.
Promoting rail passenger comfort throughout
Denmark
The preheater contract involves the servicing and
maintenance of all 15 train preheater stations located
throughout Denmark. The stations pre-heat or cool
passenger carriages before use to ensure they are at
the right temperature for passengers. They also pre-
heat locomotives to ensure they are ready to run when
needed.
Key facts
Client: Banedanmark
Services: Maintenance and servicing of rail power
infrastructure
Period: 2021-2025 (plus potential 2-year extension)
Photo: Robert Attermann / RED STAR
Source: Banedanmark
ELTEL Annual Report 2021| 19
Case
Cross-border workforce
provides Eltel with a unique
competitive edge
Eltel has two highly skilled cross-border work forces.
One team comprises high voltage transmission line
technicians based in Poland and the other team
comprises communication technicians based in
Lithuania. These teams provide great exibility to
quickly meet changing market needs throughout the
Nordics.
E
ltel’s approximately 170 cross-border employees
based in Lithuania and Poland are all directly
employed by the company. This highly
competent and experienced international workforce
provides Eltel with a unique competitive edge.
“Having a permanent cross-border workforce enables
us to be sure that all our employees are well-trained
and know how we work – including the use of the latest
techno logical solutions and our safety practices,” says
Juha Luusua, Managing Director of Eltel Finland.
Ensuring a skilled and exible workforce
The lack of highly skilled technicians is an issue for all
the Nordic countries. A cross-border workforce is also
more exible and able to work where needed.
“It’s difcult to hire skilled 5G technicians in the
Nordics right now, but we have many of them in our
cross-border workforce,” says Luusua. “For Eltel,
this is incredibly valuable us to be able to meet any
urgent need for highly skilled technicians in the Nordic
region. This exibility gives us a huge competitive
edge compared to if we were to build a local team from
scratch by hiring and training new employees.”
Other business
Eltel has a project-based high voltage business that operates
in Poland and a smart grids business in Germany. Eltel also has
a small but strong communication business in Lithuania that
provides the Nordic countries with highly skilled technicians –
our cross-border workforce.
In 2021, Eltel divested its high voltage business in Germany
as it continues to focus on the Nordic market.
Segments
20 | ELTEL Annual Report 2021
It’s difcult to hire skilled 5G
technicians in the Nordics
right now, but we have many
of them in our cross-border
workforce.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
ELTEL Annual Report 2021 | 21
Sustainability
Case
A robust safety culture
Eltel achieved its all-time best safety performance in
2021, which is the result of its long-term commitment
to promoting safety throughout the business.
D
uring the year, Eltel’s Lost Time Injury Frequency
Rate (LTIFR) per million working hours for its own
employees decreased to 3.8 – compared to 4.9
in 2020 and 6.2 in 2019. This trend of improving safety
performance is the result of a robust safety culture that
has been developed in recent years along with concrete
actions out in the eld.
Towards zero injuries
Recent safety initiatives include improving personal
protective equipment, safety knowledge sharing and
running annual safety campaigns and management
safety walks. A global digital reporting tool has also been
launched to increase transparency, foster the reporting
of safety observations and help Eltel’s eld personnel
analyse safety risks in a systematic way.
“Our ultimate vision is zero injuries,” explains Safety
Manager Seppo Rytilä. “We are proud of our progress
and are aiming to achieve consecutive months with no
lost time injuries in 2022 as we strive towards our zero
injury vision.”
22 | ELTEL Annual Report 2021
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
100%
All CUs continue to hold
ISO 9001, OHSAS 18001/
ISO 45001 and ISO 14001
certicates.
3.8
22.4%
LTIFR per million working
hours. Eltel employees.
(2020 LTIFR 4.9)
89%
Code of Conduct
training completion rate
24.6%
5,012,748 kg CO
2
-eq
reduced emissions in
scope 1.
Sustainability
Key guresHighlights 2021
For Eltel, sustainability is about building a strong protable company
for the future, and delivering lasting nancial, social and environmental
value to Eltel’s stakeholders and society at large.
Improved safety performance
An increased focus on monitoring and preventing minor
injuries helped to further educe the Lost Time Injury
Frequency Rate (LTIFR).
Commitment to the Science Based Targets initiative
Eltel’s commitment to the SBTi has underlined the company’s
level of ambition to tackle the global climate crisis. Eltel is
currently developing climate targets to submit to the SBTi.
CDP Climate Change
In 2021, we stepped up our climate work at Eltel by further
developing our climate reporting. Our progress was
recognised in the improved score on the CDP Climate
questionnaire where we achieved a Management score (B-)
for taking coordinated action on climate issues.
COVID-19, protecting employees’ health
Eltel continued social distancing and other measures to
protect the health of its employees, customers and other
partners.
EU taxonomy
The taxonomy-eligible economic activities relevant to Eltel
were identied. These are estimated to account for 32% of the
turnover. Read more on page 35–36.
ELTEL Annual Report 2021| 23
Integrated into our way of working
Our ambition is to be a leader in sustainability. There are two aspects to our approach –
creating shared value by enabling a sustainable society – and ensuring a responsible business
practice. We focus on our sustainability priority areas to minimize our negative impact and
maximize our positive impact on people and the environment.
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.
Sustainability
Stakeholder group Channels of dialogue Key topics raised 2021
Employees Ongoing employee dialogue, town hall meetings,
internal channels (intranet, newsletters, e-mail, etc),
employee engagement survey, workshops
Safety and work environment, remuneration and benets, training,
daily performance management, leadership, Code of Conduct, skills
development
Customers Continuous customer dialogue, delivery monitoring,
customer surveys, market surveys, workshops
Quality, specic customer requirements, collaboration/partnerships,
science-based targets, safety and work environment, innovation
Shareholders Annual General Meeting, quarterly earnings calls,
investor dialogue, press releases
Business performance including short and long-term implications
Suppliers Continual supplier dialogue, local supplier meetings,
audits, delivery monitoring
Pricing and terms, ethics and values, environment, safety and work
environment, waste management, climate target setting
Trade unions Meetings, negotiations Labour law issues, remuneration, work environment, health and safety
Authorities Structured monitoring, specialist network GDPR, sustainability (reporting requirements), EU taxonomy, general
compliance with laws, ordinances and regulations
Industry and stake-
holder organisations,
specialist networks
Membership, participation on the board,
conferences, training, network meetings
Digitalisation, electrication, sustainability, workplace safety
Society Sustainability reporting, information and contacts on
website and in social media
Ethics and values, environment, COVID-19 information
Priority area Material topics 2021–2023 Achievements in 2021
Health and Safety Zero fatality and disability cases
Reduce injury frequency (LTIFR and TRIFR) including
subcontractor employees
Foster a proactive safety culture
Increased focus on monitoring and preventing minor injuries, further
reduced Lost Time Injury Frequency Rate (LTIFR). Manager trainings to
analyse the root causes of incidents, safety training, manager safety walks,
COVID-19 measures.
Environment Reduce the average CO
2
emissions of cars and vans
Establish a roadmap to become fossil free
Promote the positive impact of Eltel’s customer
solutions
Annual decrease of share of purchased fossil energy
Commitment to the Science Based Target initiative (SBTi), improved the
CDP Climate Change disclosure rating, increased focus on reducing
emissions from our vehicle eet and piloting low-carbon solutions together
with customers.
People and society Be the industry’s most attractive workplace
Contribute to sustainable development and welfare
Continued implementation of the leadership framework, ongoing regular
performance and development dialogues with netuned dialogue
template, annual employee engagement survey.
Supply chain Secure the HSEQ performance and compliance
with Eltel’s Code of Conduct Policy by monitoring of
strategic partners
Regular supply chain audits, supplier and contractor engagement on
safety, quality, Code of Conduct, policy and ISO compliance.
Initial mapping of the top emitting suppliers on climate targets setting.
Business ethics Be compliant with all relevant laws and regulations,
internal policies and agreements with customers and
suppliers
Code of Conduct and policy trainings
Minimum social safeguards assessment in alignment with the EU
taxonomy. Mandatory Code of Conduct trainings. Updated procedure
according to the EU whistleblowing directive. Annual communication on
progress to UN Global Compact.
24 | ELTEL Annual Report 2021
Sustainability topics at Eltel are managed by a
Sustainability Committee that includes business
representatives from all Country Units, and a Sustainability
Steering Group. Both report directly to the Group
Management Team and the President and CEO, who is
ultimately responsible for sustainability at Eltel.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Our global commitment
Since many years, Eltel is committed to a number of sustainability frameworks. Together
with stakeholder dialogue on the relevant topics used to shape our strategic decision-
making, this provides the road map to remain relevant as a partner, employer and
i nvestment opportunity.
Science Based Targets initiative (2021)
Eltel has announced its commitment to set science-based
targets for signicant reductions in our greenhouse gas (GHG)
emissions by 2030. Eltel’s targets are being developed and will
be validated against the latest climate science by the Science
Based Targets initiative (SBTi).
UN Global Compact (2014)
Since 2014, Eltel has been a signatory of the UN Global
Compact and its ten principles on
• Human rights
• Labour
• Environment
• Anti-corruption
The principles are embedded into our strategy, policies and
procedures, and related processes. We report annually on our
sustainability performance in line with the Communication on
Progress process as dened by the UN Global Compact.
CDP Climate Change (2016)
Eltel reports to the CDP Climate Change programme every
year and has done so since 2016. The information gathered is
designed to improve transparency for our stakeholders as well
as drive positive change throughout our organisation – to reduce
our greenhouse gas emissions and mitigate climate change risk.
As a sustainability leader in the infranet industry, we believe
that we can make the biggest contribution to:
SDG 7: Affordable and clean energy
Eltel’s power services enable access to reliable
electricity and the incorporation of renewable
energy into the power grid.
SDG 8: Decent work and economic growth
Eltel provides decent work for its employees and
contributes to economic growth in the countries
where it operates.
SDG 9: Industry innovation and infrastructure
Eltel secures resilient communication and power
networks, and work in partnership with customers
to pilot innovative solutions.
SDG 13: Climate action
The infranet solutions that Eltel provides enable
the transition to a robust, resilient and carbon-
neutral society. Eltel works actively to reduce the
climate impact of its operations.
UN Sustainable Development Goals (SDGs)
The SDGs provide a roadmap for how we can collectively work
to overcome the global challenges related to economic, social
and environmental sustainability.
Other SDGs relevant to our business are SDGs 5, 10, 11 and 12.
ELTEL Annual Report 2021| 25
Health and safety
Ensuring that our employees return home safely every day is our top priority. At Eltel, safety
is not just about personal protective equipment, incident reports and adjusting to the current
pandemic challenge – it is a mindset that we choose to adopt every day.
Sustainability
Progress in 2021
Given our reduced Lost Time Injury Frequency Rate (LTIFR)
in recent years, we have continued to monitor the Total
Recordable Injury Frequency Rate (TRIFR), which includes all
lost time injuries, medical treatment cases and occupational
illnesses. We strive to prevent the most serious injuries from
occurring by investigating the root causes of minor injuries
and serious near misses. We actively mitigate risk by training
managers to analyse the root causes of incidents by pro-
moting more proactive reporting and executing on-site risk
assessments. The KPI for the TRIFR was monitored in line with
industry practice.
Other important activities in 2021 included safety training,
safety walks by our managers, internal safety bulletins and
campaigns. In addition to our safety focus, the COVID-19
measures, follow-up dialogue with employees who are ill and
rehabilitation support for employees on long-term sick leave
are also important measures to reduce absence due to illness.
Health and safety risks
Eltel has clearly dened the health and safety risks for our
people. 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 more modern and safer solutions and
processes to reduce risk.
KPIs 2021 2020
Absence due to illness, including long-term illness,
Eltel employees, % 5.3 5.4
Lost time injuries per million working hours (LTIFR),
Eltel employees 3.8 4.9
Total Recordable Injury Frequency per million
working hours (TRIFR), Eltel employees 25.0 24.8
Number of fatal accidents: Eltel and
subcontractor employees 0 0
Lost time injury frequency rate
22.4%
LTIFR per million working hours.
Eltel employees.
(2020 LTIFR 4.9)
Absence due to illness
0.1%
Including long-term illness.
Eltel employees.
(2020 5.4%)
Fatal accidents
Eltel employees and
subcontractors.
3.8 5.3% 0
Policies Guiding frameworks
HSSEQ Policy
Code of Conduct
OHSAS 18001/ISO 45001
SDG 5, 8
26 | ELTEL Annual Report 2021
Environment and climate
Eltel is active in an industry that plays a key role in the transformation to a low-carbon society.
By supporting our customers to develop innovative infranet solutions, we help society to
mitigate, adapt and become more resilient to the effects of climate change. We strive to
minimise the environmental impacts of our operations.
Our progress in 2021
Eltel’s commitment to the Science Based Targets initiative
underlines the company’s long-term ambition to tackle the
global climate crisis. Another example of this increased
ambition is the improved rating of Eltel’s CDP Climate Change
disclosure in 2021 (read more on page 23 and 25).
The most signicant environmental impact from our own
operations are the emissions from our vehicle eet (scope 1).
Thus, our main focus is to minimise the average CO
2
emissions
from our cars and vans. We continue to establish a roadmap to
become fossil free by gradually switching to vehicles that are
electric, hybrid or that run on renewable fuel.
Collaboration with our suppliers and customers is an impor-
tant part of reducing our emissions, given the considerable size
of our scope 3 emissions. Together with our customers, we
worked actively to pilot low-carbon solutions, such as electrical
excavators and microtrenching, in order to reduce the impact
during excavation work (read more in Case Story on page 28).
The process of collecting, validating and calculating
environmental data in alignment with the Greenhouse Gas
Protocol (GHG) has been evaluated and improved during the
year. Signicant progress was made in our environmental data
in scope 3, indirect emissions from Eltel’s suppliers, which
now covers 100% of the indirect emissions from our supply
chain. To enable us to work efciently on our engagement and
reduction efforts, we are actively working on sourcing and
integrating activity data.
Other important and prioritised environmental topics include
waste management and the responsible sourcing of materials.
We work to minimise our physical environmental impact,
disruption and noise from work sites.
KPIs 2021 2020
1)
Vehicles in entire eet 2,895 3,208
Share of zero- and low-emission vehicles
(cars and vans), % 1.9 1.1
Total fuel consumption of entire eet, litres 6,147,285 7,381,713
Total CO
2
emissions, kg CO
2
-eq, scope 1 15,372,013 20,384,761
1)
The 2020 carbon emissions are recalculated using the new improved calculation methodology.
What are Eltel’s scope 1, 2 & 3?
Scope 1 – Direct emissions resulting from fuel use within
Eltel’s car eet and onsite energy use (heating).
Scope 2 – Indirect emissions resulting from the generation
of purchased energy used within Eltel ofce premises.
Scope 3 – All other indirect emissions that occur in Eltel’s
supply chain and are not already included within scope 2.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Reduced CO
2
emissions
(scope 1)
5,012,748 kg CO
2
-eq
Environmental risks
Working to minimise vehicle emissions, we face external
challenges related to access to electric vehicles, lack of charging
stations in rural areas and increasing biodiesel prices. Large
electric excavators are not currently available, but we tested
smaller excavators in 2021 and the area is developing rapidly.
Share of renewable
energy (scope 2)
8% (2020 23%)
Scope breakdown of total
emissions, %
24.6% 31%
Scope 1, 10.8%
Scope 2, 1.1%
Scope 3, 88.1%
Policies Guiding frameworks
HSSEQ Policy
Code of Conduct
ISO 14001
UN Global Compact Principles 7, 8, 9
SDG 7, 12, 13
CDP Climate Change
Science Based target initiative
ELTEL Annual Report 2021| 27
Case
Electric excavator trial with
customer to reduce emissions
Eltel trialled an electrical excavator on the Helen Electri-
city Network project in Helsinki to demonstrate how elec-
trical equipment can reduce local emissions and noise.
Less disturbance and less environmental impact
The trial, which was conducted in partnership with
Helen Electricity Networks, was the rst of its kind on
the streets of Helsinki and demonstrated how electric
equipment can contribute to less noisy work sites and a
better environment for workers and the local community.
The City of Helsinki and Helen Electricity Network are
working towards becoming carbon neutral by 2035. Diesel-
powered heavy machinery such as excavators produce
greenhouse gases, harmful emissions and engine noise.
Tested in a demanding urban environment
The electric excavator was trialled in Helsinki city centre
in order to put it to the test in a busy urban environment
with paved surfaces.
“We concluded that the electric excavator performed
as well as a traditional excavator of similar size and
class and was also much quieter,” says Teemu Niemi,
Chief Operating Ofcer of Eltel Finland. “Eltel offers
cost- optimised high-quality services, and such electric
equipment will help us to provide a low-carbon footprint
solution to our customers.”
Eltel offers cost-optimised high-
quality services, and such electric
equipment will help us to provide a
low-carbon footprint solution to our
customers.”
Sustainability
28 | ELTEL Annual Report 2021
People and society
Eltel’s goal is to be the most attractive employer in the industry. A clear focus on leadership,
talent management, employee development and business ethics are essential parts of our
strategy. We contribute to sustainable development and social welfare by ensuring that
communication and power networks function as they should.
KPIs 2021 2020
Number of employees at year-end 5,049 5,449
Of which < 30 years, % 19 18
Of which > 55 years, % 23 24
Share of male/female at year-end, % 87/13 84/16
Share of women in Group Management Team,
% at year-end 25 25
Share of women in Board of Directors,
% at year-end 20 20
Our progress in 2021
Eltel’s managers have a great responsibility for the people in their
team. We have continued to implement the leadership frame-
work with clearly dened roles, responsibilities and expectations
in order to support our employees in leadership roles.
All employees have regular performance and development
dialogues with their managers. This helps us to stay focused
on our strategy and to more accurately identify further learning
needs, development opportunities and potential workplace
improvements. Based on feedback from previous years, we
launched an updated development dialogue template in the
beginning of 2021, which was well received by our employees.
The participation rate in the employee engagement survey
in 2021 was 74%. The highest engagement drivers were
“Performance Management”, “Relationship with Colleagues”
and “Health and Safety”. The positive development in these areas
conrms that we are on track towards achieving our strategic goal
of engaged employees, as well as our focus on health and safety.
People and society risks
One of Eltel’s most signicant risks related to people and society
is not being able to attract and retain the employees we need with
the right skills and experience.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Number of employees
Of which < 30 years: 19%
Of which > 55 years: 23%
Expenses in wages and salaries Engagement score
5,046 248.7
EUR MILLION
3.7/5
0.1 from 2020
Policies Guiding frameworks
HR Policy
Code of Conduct
UN Global Compact Principles 1, 2,
3, 4, 5, 6, 10
SDG 5, 7, 8, 9, 10, 11
ELTEL Annual Report 2021| 29
Sustainability
Supply chain
Eltel takes overall responsibility for its subcontractors. This includes their work environment,
employees and the ultimate delivery to the customer. Our partners are included in our
systematic work on health and safety, and we have clear processes in place that ensure they
sign up to the Eltel Code of Conduct and commit to our other key policies and principles.
KPIs 2021 2020
Number of supply chain audits,
– subcontractors 320 198
Our progress in 2021
Eltel continued to ensure the quality of its sourcing and
supply chain management, including nancial and legal
responsibilities, as an important and integrated part of our
business. We recommend that our suppliers and partners have
valid ISO certications. If they do not hold such certications,
they are required to demonstrate their compliance by signing
an agreement and participating in Eltel’s e-learning courses.
In addition, our Country Units began engaging with their
suppliers and contractors on climate change. This involved
investigating whether they could set science-based climate
targets as we focus on reducing our scope 3 emissions in the
coming years.
We regularly conducted supply chain audits during the year,
both planned and unannounced. In cases where potential
non-compliance was identied, an action plan was implemented
to ensure that the subcontractor in question met our standards.
Supply chain risks
Eltel takes responsibility for its supply chain as it poses both
nancial and legal risks to the company. Eltel categorises
subcontractors and suppliers according to their level of risk
exposure. Partners rated as the highest risk, category A, are
integrated into Eltel’s procedures for reporting HSE incidents
and monthly working hours.
Number of supply chain
audits
Fatal accidents Eltel employees
and subcontractors
Certications compliance
required
320 0 ISO
ISO 9001
OHSAS 18001/ISO 45001
ISO 14001
Policies Guiding frameworks
HSSEQ Policy
Code of Conduct
ISO 9001
OHSAS 18001/ISO 45001
ISO 14001
SDG 5, 8, 10, 12, 13
30 | ELTEL Annual Report 2021
CODE OF CONDUCT 2021 2020
Code of Conduct training completion rate,
Eltel employees, % 89 89
Business ethics
Eltel is a signatory to the United Nations Global Compact and its ten principles on human
rights, labour rights, environment and anti-corruption, which are incorporated into our
internal policies. Working with business ethics involves complying with all applicable laws
and regulations as a minimum, as well as Eltel’s internal policies and agreements with share-
holders, customers and subcontractors.
Our progress in 2021
During the year, we assessed minimum social safeguards
according to the guidelines of the Organisation for Economic
Co-operation and Development (OECD), the UN Guiding
Principles and the International Labour Organisation (ILO) to
ensure compliance with the EU taxonomy.
As a people company, maintaining an awareness and
understanding of our governing policies is critical to
ensuring business compliance. During 2021, new employees
received mandatory Code of Conduct training as part of their
onboarding process.
Our whistleblowing procedure was revised according to
the EU whistleblowing directive, which was adopted locally
in December 2021. The directive involves having a third party
manage the procedure to ensure anonymity and comply with
legislation.
In 2021, zero whistleblowing cases were reported through
the procedure. Local issues are typically captured by our
compliance processes at CU level. This includes local feedback
and communication, as well as the fostering of an open culture
for our employees.
Business ethics risks
Eltel operates in a competitive industry with low barriers to
entry and low margins, which increase the risk of corruption,
breaches and conicts of interest. Good ethical behaviour in
our operations is promoted by responsible and sustainable
business practices.
Engagement and responsibility
It is the board of directors who is responsible for the
sustainability report for the year 2021 on pages 23-31 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
Auditor’s opinion regarding the statutory
sustainability report
To the general meeting of the shareholders in Eltel AB (publ), corporate identity number 556728-6652
generally accepted auditing standards in Sweden. We believe
that the examination has provided us with sufcient basis for
our opinion.
Opinion
A statutory sustainability report has been prepared.
Stockholm 29 March 2022
KPMG AB
Fredrik Westin
Authorized Public Accountant
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Policies Guiding frameworks
Code of Conduct
Anti-corruption Policy
Data Protection Policy
Human Resources Policy
HSSEQ Policy
Insider Policy
Group Tax Policy
Information Security Policy
Whistleblowing Policy
Risk Management Policy
Competition Law Instruction
UN Global Compact Principles 1, 2,
3, 4, 5, 6, 10
SDG 5, 8, 10, 12
ISO 9001
OHSAS 18001/ISO 45001
ISO 14001
ELTEL Annual Report 2021| 31
32 | ELTEL Annual Report 2021
Board of Directors’ report
Board of Directors report 2021
The Board of Directors and the President and CEO of Eltel AB, corporate registration number
556728-6652, with its registered ofce in Stockholm, hereby submit the Annual Report and
consolidated nancial statements for the 2021 nancial year. Eltel AB and its subsidiaries
operate under the Eltel brand. The consolidated group is called Eltel Group.
Company overview
Eltel is a leading Nordic eld service provider for communication
and power networks. We deliver a comprehensive range of
solutions – from maintenance and upgrade services to project
delivery. 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 include telecom operators and other owners
of communication networks. We also work for owners of power
distribution grids and national transmission system operators.
Most of our work is conducted through long-term frame
agreements that range from two to ve years. This enables us
to create and maintain long-term relationships with customers
– and work closely with them to achieve their objectives.
The infranet sector in Europe is continuously 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 mainly operates in the Nordic market, but is also
represented in Poland, Germany and Lithuania.
Signicant events 2021
Improved productivity and protability
Productivity and protability improved in the Nordics partly
as a result of several initiatives in to promote operational
efciency – primarily improve to production planning,
optimise route planning and technician utilisation.
Continued Nordic strategy
In line with Eltel’s strategy, focus was maintained on the
Nordic markets, where the company has a leading market
position, high competence and where the business model is
repetitive and primarily targeted towards build, service and
maintenance. During the year, Eltel divested its high voltage
business in Germany and closed its operations in the UK,
Georgia and Mozambique.
Sustainability in focus
In 2021, Eltel improved its safety performance, committed to
the Science Based Targets initiative and improved the CDP
Climate Change score for taking coordinated actions on
climate issues.
COVID-19
The pandemic reduced customer investments, delayed
projects, and increased material and logistics costs during
the year. However, the infranet markets are robust and all
Country Units (CU) responded well to the challenges, despite
quarantine requirements and increasing employee sick-leave
rates towards the end of the year.
FCCA decision
The Finnish Supreme Administrative Court issued on
20 August 2021 a decision by which it fully dismissed the
Finnish Competition and Consumer Authority’s (FCCA)
proposal to impose on Eltel a ne in the amount of
EUR 35 million for an alleged infringement of competition
law. The decision brought an end to the proceedings that
were opened by the FCCA in 2013.
Nasdaq decision
The Disciplinary Committee at Nasdaq Stockholm AB
(Nasdaq) decided on 8 December 2021 to impose a ne
of ve annual fees on Eltel, about EUR 100,000. The
Disciplinary Committee wrote in its decision that there were
deciencies in Eltel’s disclosure of inside information during
the years 2016 and 2017, and that Eltel therefore breached
Section 3.1 of the Nasdaq Stockholm Rulebook for Issuers.
ELTEL Annual Report 2021 | 33
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Communication services
Eltel’s communication offering provides a broad range of
services from designing and planning to the building, installing,
upgrading, operating and service of mobile and xed networks.
The business is primarily driven by technology upgrades, main-
tenance needs and increased demand for improved capacity
and faster networks.
Eltel’s main customers are large telecom operators and
communication network owners, other private owners and
municipalities. Its business generally comprises long-term
relationships with a steady inow of orders generated by frame
agreements.
Read more about Eltel’s communication offering on page 10.
Power services
Eltel provides maintenance of power grids, upgrades and
project work. Eltel’s power offering can be roughly divided
into three areas: maintenance, projects and turnkey projects,
in which the company is responsible for design, planning and
construction of the project.
Primary customers include national transmission system
operators and owners of power distribution grids.
Read more about Eltel’s power offering on page 11.
Selection of major contracts 2021
During 2021 Eltel secured several important contracts including:
• Eltel Norway signed a project agreement with Telenor
to upgrade its telecommunications network with 5G
technology. The agreement is worth about 12-16 million
euros (August)
• Eltel Finland signed two contracts with OX2 to build
transmission lines for a new wind farm. The contracts have
a combined value of about EUR 22 million (November)
• Eltel Denmark signed a frame agreement with
Banedanmark regarding consultancy and infrastructure
design. The four-year agreement includes an option of
one plus one years and is worth about EUR 41 million
(December).
January–December 2021
Net Sales
Net sales decreased by 13.4% to EUR 812.6 million (938.0).
Net sales decreased in segments by EUR 90.4 million and
in Other business by EUR 35.6 million. Organic net sales in
segments, adjusted for divested operations and currency
effects, decreased by 11.9%. The comparative period included
EUR 19.2 million from the German communication business
and the Swedish business area Aviation & Security, which were
divested in Q2 2020.
In line with the Nordic strategy, Eltel’s main operations in the
four Nordic countries are presented as segments from
1 January 2021. During January-December 2021, the
segments represented 90% (87) of the net sales.
Other business includes operations in High Voltage, Smart
Grids Germany and Lithuania. Businesses under ramp down,
Power Transmission International and Rail, are also included
in Other business. The German communication business was
included in Other business until its divestment in Q2 2020.
Operative EBITA
Operative EBITA increased to EUR 14.8 million (11.4). Operative
EBITA-margin was 1.8% (1.2). Operative EBITA in segments was
EUR 24.2 million (22.9), and operative EBITA margin improved
to 3.3% (2.8). In Other business, operative EBITA was EUR
-1.8 million (-3.3). The majority of the negative operative EBITA,
EUR-8.8 million, came from High Voltage, primarily Poland
Net sales and gross margin Operative EBITA and EBITA margin
0
200
400
600
800
1,000
1,200
Q4
21
Q3
21
Q2
21
Q1
21
Q4
20
Q3
20
Q2
20
Q1
20
Q4
19
0
2
4
6
8
10
12
MEUR %
-15
-10
-5
0
5
10
Q4
21
Q3
21
Q2
21
Q1
21
Q4
20
Q3
20
Q2
20
Q1
20
Q4
19
-3
-2
-1
0
1
2
MEUR %
Net sales, rolling 12 months, MEUR
Gross margin, rolling 12 months, %
Operative EBITA, quarterly, MEUR
Operative EBITA margin, rolling 12 months, %
812.6
Net sales, EUR million
14.8
Operative EBITA, EUR million
34 | ELTEL Annual Report 2021
Board of Directors’ report
Finland
Net sales remained on the same level as in the previous year at
EUR 299.6 million (300.2). The power business decreased due
to project completions, which was partly offset by an increase
in frame agreements. During the year, the communication
business grew as a result of a strong market position and high
demand, particularly for bre and 5G.
Operative EBITA increased to EUR 12.7 million (7.2). The
operative EBITA margin improved to 4.2% (2.4) as a result of
better project management and cost control. During 2020,
Finland noted write-downs in certain power projects.
Read more about Eltel Finland on page 12.
Sweden
Net sales decreased by EUR 42.3 million to EUR 182.2 million
(224.5), representing a decline of 18.8%. The decrease is
largely explained by the loss of a large service contract, mainly
relating to the copper network, and lower bre volumes with
a specic customer. Divestment of the Aviation & Security
business area in Q2 2020 had an impact of EUR -8.5 million.
Operative EBITA increased to EUR -1.8 million (-3.7). The
operative EBITA margin was -1.0% (-1.6). The increase
is a result of improved project control and lower risk level
in projects. During the year, we accelerated operational
excellence initiatives in Sweden and they continue in 2022.
Read more about Eltel Sweden on page 14.
Norway
Net sales decreased by EUR 17.3 million, or 9.7%, to
EUR 160.5 million (177.7). Currency effects had a positive
impact of EUR 9.0 million. Main reasons for the decline
were the decrease and delays in customer investments due
to COVID-19, the ramp up of the renewed Telenor frame
agreement and the harsh winter conditions in Q1 and Q4,
which affected the bre production.
Operative EBITA decreased to EUR 9.2 million (14.3). The
operative EBITA margin decreased to 5.7% (8.0) due to lower
volumes and change in production mix. The operational
efciency was impacted by the pandemic towards the end of
the year.
Read more about Eltel Norway on page 16.
Denmark
Net sales decreased by EUR 30.2 million to EUR 87.9 million
(118.1), representing a decrease of 25.6%. The decrease is
primarily driven by a partial insourcing of an agreement by a
major customer in Q2 2021, and the completion of a large
communication project in Q4 2020.
Operative EBITA amounted to EUR 4.2 million (5.0). The
operative EBITA margin increased to 4.8% (4.3) thanks to
improved efciency and project control.
Read more about Eltel Denmark on page 18.
Other business
Net sales decreased by EUR 35.6 million to EUR 91.9 million
(127.5), representing a decrease of 27.9%. Of the decline, EUR
10.7 million came from the divestment of the German communi-
cation business in Q2 2020. The remainder came primarily from
decline in the high voltage business, particularly Poland. In
Poland, we continued to see project delays and postponements
by customers. Smart Grids Germany partly offset the decline as
volumes grew in a favourable market. The ongoing ramp down
of Power Transmission International (PTI) continued as planned.
Operative EBITA increased to EUR -1.8 million (-3.3), mainly
driven by Smart Grids Germany and the sale of a real estate in
Poland. PTI contributed positively, but the impact was smaller
than in previous year. For the full year, High Voltage, mainly
Poland, had a negative operative EBITA of EUR -8.8 million.
During 2021, several old, large projects in High Voltage Poland
were operationally closed. In PTI, all remaining projects were op-
erationally closed. The administrative closing process continues.
Cash ow
Cash ow from operating activities was EUR 22.3 million
(49.4). Main difference came from the change in net working
capital of EUR -10.1 million compared to EUR +16.6 million in
the previous year. Year 2021 ended with a healthy net working
capital level of EUR -16.0 million. At the end of 2020 the
amount was record low, EUR -25.1 million, partly lowered by
COVID-19 related support.
Cash ow has historically displayed a strong seasonal
pattern, with weaker cash ow 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 substantial working capital and are expected to create
volatility in the net working capital also going forward.
Net cash ow from investing activities was EUR -2.9 million
(33.5) consisting mainly of EUR -3.8 million from the divestment
of High Voltage Germany, EUR 4.9 million for the sale of a real
estate in Poland and EUR -4.0 million (-4.4) from net capital
expenditure. In the comparative period, the impact of business
divestments was EUR 37.9 million.
Cash ow from nancing activities was EUR -13.7 million
(-121.6), mainly from increase in commercial paper programme
utilisation of EUR 20.0 million (reduction of 36.5), payments of
lease liabilities of EUR -23.8 million (-26.2), and amortisation of
external loans of EUR -10.0 million (-46.1). In the comparative
period, utilisation of other credit facilities reduced by EUR 12.4
million. Following the closing of the FCCA case in Eltel’s favour
in August 2021, EUR 35.0 million was released from an escrow
account for repayment to the former shareholders.
Eltel has focused on strengthening its balance sheet and
lowering net debt for the past years. The efforts have been
successful and net debt, as dened in the nancing agreement
that was in force until 17 January 2022, remained on a good
level at EUR 69.2 million (67.4). Net debt including leasing
liabilities decreased to EUR 122.6 million (125.6).
ELTEL Annual Report 2021 | 35
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
New nancing agreement
On 17 January 2022, Eltel completed a new, unsecured
nancing agreement with banks, comprising a EUR 35.0 million
term loan (maturity 2+1 years) and a EUR 90.0 million revolving
credit facility (maturity 3+1+1 years). The new credit facilities
have covenants pertaining to leverage ratio and gearing.
The Group has guarantee facilities with the banks and
insurance companies on bilateral basis.
Upon utilisation of the new term loan, the previous term
loans were repaid, and the former nancing agreements
were terminated.
Credit facilities
EUR million
17 Jan
2021 Maturity
Term loan, non-current 35.0
Jan 2024 (+ extension
option until Jan 2025)
Revolving credit facility 90.0
Jan 2025 (+ extension
options until Jan 2027)
Account overdrafts 15.0 Annual renewals
Total credit facilities 140.0
Commercial paper programme 150.0 N/A
Disclosure according to the EU taxonomy regulation*
The EU taxonomy is the EU’s judicial classication system,
which provides a harmonised method for dening nancial
activities that have the most signicant impact on the EU’s
measures to prevent climate change, on environmental
protection, and on the achievement of the set goals. In the
rst phase, the EU taxonomy classication system covers the
sectors with the highest potential to reach the EU-level goals
set for climate change mitigation – cutting net carbon dioxide
emissions by 55% from the 1990 level by 2030 and achieving
carbon neutrality by 2050. Based on this starting point, the
EU has specied the taxonomy classication system to cover
the sectors and economic activities that have the highest total
carbon dioxide emissions and, according to research evidence,
the highest potential to avoid and reduce the emissions.
At this stage, the majority of Eltel’s operations in the communi-
cation business are not within the specied activities. However,
in Eltel, operations within power business are largely taxonomy
eligible, meaning that they are included in the economic
activities specied by the rst phase of the EU taxonomy.
KPI
Total
EUR million
Taxonomy
eligible
activities
Taxonomy
non-eligible
activities
Turnover
1)
812.6 32% 68%
Capital expenditure
(capex)
2)
26.1 37% 63%
Operating expenditure
(opex)
3)
6.1 41% 59%
1)
Turnover equals to net sales according to the 2021 nancial statements.
2)
Additions into property, plant and equipment, right-of-use assets and other
intangible assets (Notes 25-27).
3)
Short term leases, maintenance and repair costs of tangible assets. Note
that Operating expenditure, as dened in EU Taxonomy is signicantly
narrower than Eltel’s total operating expenditure.
Financial position, cash and cash equivalents
Equity at the end of the period was EUR 227.9 million (219.2)
and total assets were EUR 630.8 million (677.3). The equity
ratio was 38.3% (34.0). Available liquidity reserves amounted to
EUR 142.3 million (136.0).
At year-end 2021, Eltel had nancing agreements with its
bank group comprising term loans, a revolving credit facility
and certain commercial guarantees. Eltel’s total committed
credit facilities amounted to EUR 137.1 million, comprising a
non-current term loan of EUR 25.5 million, current term loan of
EUR 1.5 million, revolving credit facility of EUR 90.0 million and
bilateral account overdrafts totalling EUR 20.0 million. EUR 0.0
million (0.0) of the revolving credit facility was utilised.
On 31 December 2021, the commercial guarantees issued
by the banks and other nancial institutions on behalf of the
Group amounted to EUR 85.3 million (103.5). The amount of
commercial guarantees issued on behalf of third parties was
EUR 0.1 million (0.1).
Additional to the committed facilities, the Group also has
access to short-term debt capital markets via a commercial paper
programme of EUR 150 million. At the reporting date, EUR 73.0
million (53.0) of the commercial paper programme was utilised.
Interest-bearing liabilities and net debt
EUR million
31 Dec
2021
31 Dec
2020
Interest-bearing debt 99.8 89.8
Leasing liabilities 54.5 60.8
Allocation of effective interest to periods 0.6 1.0
Less cash and cash equivalents -32.3 -26.0
Net debt 122.6 125.6
Less leasing liabilities not included in financing
agreement -53.3 -58.3
Net debt, 2021 financing agreement 69.2 67.4
Interest-bearing debt amounted to EUR 99.8 million (89.8)
of which EUR 25.5 million (27.7) was non-current and EUR
74.2 million (62.1) was current. Leasing liabilities amounted to
EUR 54.5 million (60.8), of which EUR 35.8 million (39.0) was
non-current and EUR 18.6 million (21.8) was current.
Net debt and ROCE, %
-200
-100
0
100
200
300
Q4
21
Q3
21
Q2
21
Q1
21
Q4
20
Q3
20
Q2
20
Q1
20
Q4
19
-20
-10
0
10
20
30
MEUR %
Net debt, 2021 nancing agreement
IFRS 16 lease liabilities
ROCE %, rolling 12 months
*Regulation (EU) 2020/852 of the European Parliament and Council (the EU taxonomy).
36 | ELTEL Annual Report 2021
Board of Directors’ report
Implementation of the EU taxonomy
Eltel has evaluated taxonomy eligibility of its business
operations according to the descriptions of economic activities
listed in the annexes of the Climate Delegated Act and the
related NACE codes provided in these descriptions. Eltel has
reviewed the technical screening criteria laid out in the annexes
when interpreting the nature of the activity.
Eltel identied 32% of its turnover to be taxonomy- eligible
related to economic activities dened in taxonomy’s
environmental objective 1. Major part of eligible turnover relate
to activity 4.9 “Transmission and distribution of electricity”.
Eltel has concluded that its power transmission and distribution
offerings from construction and upgrade to maintenance and
fault repair are included in this activity. 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
on buildings’. In addition, Eltel has identied other operations
totalling to 4% of its turnover relating to other activities.
Capital and operating expenditure (capex and opex) have
been included when they relate to the operations generating
turnover that is included in taxonomy. In the rst phase, Eltel
has included investment in new car eet as taxonomy-eligible
capex to the extent that it relates to taxonomy-eligible turnover.
Own measures and purchased output from suppliers economic
activities have not been screened for eligibility 2021.
In order to avoid double counting, each business operation
generating taxonomy eligible turnover was assigned
exclusively to a specic taxonomy-eligible economic activity.
The same procedure was followed for the allocation of capex
and opex.
The implementation of the taxonomy regulation will progress
in phases: In accordance with the taxonomy, Eltel Group reports
for the nancial year 2021 to what extent the Group’s business
is eligible, i.e. included in activities that can potentially have
substantial impact, with the rst two environmental objectives –
mitigating climate change and adapting to climate change.
In 2022, taxonomy alignment will be disclosed in
addition to eligibility. Taxonomy aligned activities qualify as
environmentally sustainable under the taxonomy regulation.
In addition, remaining four environmental objectives – water,
circular economy, pollution and biodiversity will be included, in
line with delegated acts that will be published in 2022.
Sustainability
Eltel has, in accordance with the Annual Accounts Act chapter
6 section 11, prepared the statutory sustainability 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 dened on pages 23–31.
Employees
In 2021, the number of employees decreased by 7.4% to 5,046
at year-end (5,449), both as a result of divestments and the
discontinuation of operations, and also as a result of right-
sizing the business due to lower volumes.
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 more modern and safer
solutions and processes to reduce risk. In 2021, the Lost Time
Injury Frequency Rate (LTIFR) decreased to an all-time low
at 3,8. Given our reduced LTIFR, we have started to monitor
the Total Recordable Injury Frequency Rate (TRIFR), which
includes all lost time injuries, medical treatment cases and
occupational illnesses. We strive to prevent the most serious
injuries from occurring by investigating the root causes of
minor injuries and serious near misses. The promotion of a
more proactive health and safety culture as well as a structured
proactive work with high risk factors are key reasons for the
results compared to previous years. Active safety observation
reporting, continuous safety walks and visible management
commitment to Goal Zero vision have furthermore contributed
to reduction of injury severity.
Being a people company, Eltel is dependent on the engage-
ment of our employees. During the year, Eltel conducted an
Employee Engagement Survey comprising 3,549 participants,
equivalent to a 74% employee response rate. The highest
engagement drivers were “Performance Management”,
“Relationship with Colleagues” and “Health and Safety”. The
positive development in these areas conrms that we are
on track towards achieving our strategic goal of engaged
employees, as well as our focus on health and safety.
For more information how we work with employees, please
refer to page 29, and health and safety page 24.
Financial guidance
Eltel expects the full-year 2022 operative EBITA margin to
increase compared to 2021.
ELTEL Annual Report 2021 | 37
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 governance
framework includes a set of clear rules of procedure for the
Board of Directors and its committees, a clear organisational
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 identied deciencies to top management.
For more information regarding nancial risk management,
please refer to note 13 in the Consolidated nancial statements.
Risk Reporting
The Group Risk Management Team (RM Team), which is
comprised of the current Group Function Management, is
responsible to ensure that risks are addressed adequately by
Country and Solution Unit management. This is performed
bi-annually when the forum discusses 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.
Country / Solution Unit Group CEO / CFO Group RM Team Board / Audit Committee
Identies operational risks and
opportunities. Reports risks, weight
of risks and potential action plan via
Monthly Business Review template.
Addresses risks and opportunities
as part of the Business Plan.
Reviews risks and opportunities
during monthly business reviews.
Conrms 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 actions are needed,
or reporting should be escalated.
Prepares a bi-annual risk report
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 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.
Selection of top risks
Risk Actions Type
Health and safety in the working environment:
During 2021, Eltel has highlighted that there are still areas of improve-
ment specifically related to reported TRIFR (total recordable injury
frequency rate). Inconsistent TRIFR reporting means that manage-
ment have a blind spot to identify actions to further improve safety.
Health and safety in the working environment is a top operational
focus for all of Eltel. In 2021, Eltel has started to monitor also TRIFR’s
in parallel with LTIFR’s (lost time injury frequency rate). The objective
is to pay more attention to lighter injuries as well. Safety KPI
definitions have been adjusted to meet industrial practice. Eltel will
continue to focus on the health and safety internally to ensure the
focus is fit to purpose as Eltel’s footprint changes.
Action plans are in place to improve all employees’
understanding for reportable incidents.
Group Health and Safety management continue
to monitor high risk zones (such as the Polish
operations) to ensure actions plans are fully
realised and continue to improve.
Eltel is investigating reporting culture differences
from country to country and is planning pointed
improvement actions with the end goal to align the
reporting culture throughout the company.
Health and
safety
High Voltage Poland: There are significant profitability issues in High
Voltage, primarily in Poland. Reasons for the losses include delays
and challenges in closing old projects, a challenging market in
general, COVID-19 and lately also increased material prices.
Given the difficult conditions and our focus on the
Nordic market, we are re-evaluating strategic
alternatives for the Polish operations.
High Voltage
Poland
38 | ELTEL Annual Report 2021
Board of Directors’ report
Remuneration of senior executives
For information regarding remuneration to senior executives in
2021 and 2020, please refer to note 29 Remuneration to senior
executives, in the Consolidated nancial statements.
The Board of Directors of Eltel AB does not propose
any changes to the guidelines for remuneration to senior
executives, as adopted at the Annual General Meeting 2020.
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 programmes, which
are decided separately by the general meeting of shareholders.
The Board of Directors shall be entitled to temporarily deviate
from these guidelines, in whole or in part, if special reasons
justies doing so in an individual case and such deviation is
necessary in order to meet the Company’s long-term interests
and sustainability or to ensure the company’s nancial
viability. If such a deviation occurs, it must be reported in the
Remuneration Report before the next Annual General Meeting.
As set out below, the Remuneration Committee’s tasks include
preparing the Board of Directors’ resolutions in remuneration
related matters, including potential matters regarding deviation
from the guidelines.
The guidelines’ promotion of 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
specied 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 fullment
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, etc.
The remuneration to senior executives shall be based on
market terms. The remuneration may consist of xed base
salary, variable remuneration, pension, and certain other
benets. 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 are reviewed yearly
and in accordance with local practices. The xed base salary
constitutes 60-80% of total remuneration excluding 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 behaviours – nancially and operationally
– 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 nancial, i.e. EBITA in local currency, Net Working
Capital (NWC) in EUR 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 nancial performance of the company for any
STI pay-out is dened 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 xed base salary for the CEO and 60% for other
senior executives. At full outcome, the short-term incentives
can amount to a maximum of 45% of total remuneration for the
CEO and maximum of 40% for other senior executives.
Unless otherwise provided by mandatory law or obligations
in applicable collective bargaining agreements, short-term
incentives shall not entail any deposition of pension.
The STI is paid in connection with the ordinary monthly
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 specic situations, for example in relation to potential
divestments, M&A or specic projects, Eltel may offer cash
bonuses that are conditional on the success of the specic
transaction or project.
Long-term Incentives (LTI)
Senior executives can be offered share-related or share
price-related remuneration. LTI are intended to improve the
participants’ commitment to the company’s development and
they shall be implemented on market-based terms. Resolutions
on incentive programmes related to shares and share prices
must be passed at the general meeting and are therefore not
covered by these guidelines.
ELTEL Annual Report 2021 | 39
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The Remuneration Committee shall, inter alia, monitor
and evaluate the application of the guidelines for remun-
eration to senior executives decided by the Annual General
Meeting. When the Remuneration Committee has prepared 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 address 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 current guidelines or, if no guide-
lines exist, in accordance with the company’s practice.
External advisors are used in the preparation of
remuneration -related matters when deemed necessary.
Subsequent events
Håkan Dahlström appointed new President
and CEO of Eltel
Eltel’s Board of Directors appointed Håkan Dahlström as the new
President & CEO of Eltel AB effective 1 September 2022. Håkan
is currently serving as the CEO of Fujitsu Sweden. Prior to that,
Håkan has held several executive positions at TietoEvry and
Telia Group. He is also a member of the Eltel Board of Directors
since 2017. Håkan will succeed Casimir Lindholm, who will
remain in his position until Håkan joins Eltel.
Russia’s invasion of Ukraine
On 24 February 2022, Russia invaded Ukraine. The situation has
caused uncertainty and the future is unpredictable. There is a
risk that the situation will affect ination and the markets relevant
to Eltel’s business. Operations in the nearby areas, such as
Poland, may be particularly impacted, especially if the conict is
prolonged.
Corporate Governance Report
Eltel has issued a Corporate Governance Report for the
nancial year 2021. 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 2021, the
total number of shares amounts to 157,499,081 divided into
156,649,081 ordinary shares with 1 vote per share and 850,000
C shares with 1/10 vote per share. The share capital entered in
the trade register per 31 December 2021 is EUR 158,838,751.
More about the Eltel share please refer to pages 102–103.
Other benets
Pension
Senior executives are offered pension benets that are
primarily based on dened insurance payments and in
accordance with local practices. The pension benets are
generally funded through payments to insurance companies or
trustee- administered funds.
Company car, etc.
Senior executives are offered a company car and other benets
(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 benets 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 specied 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 severance pay equivalent of
twelve months’ xed 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’ xed
base salary.
The notice period is twelve months for other senior executives
in the event of termination by the company and six months in
the event of termination by other senior executives. 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 remun-
eration 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 obtained 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.
The resolution process
The Board of Directors shall prepare a proposal for new guide-
lines when there is a need for signicant changes to the guide-
lines, 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 conicts 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.
40 | ELTEL Annual Report 2021
Board of Directors’ report
Dividend policy
A dividend policy has been adopted whereby 50% of Eltel’s
consolidated net prot shall be paid in dividends over time
(with exibility 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 2.2 million
(2.6) related to support function services provided to the Group.
The operating expenses amounted to EUR 6.9 million (8.4).
Financial income amounted to EUR 22.1 million (23.0) related
to interest income from Group companies. Financial expenses
amounted to EUR 3.2 million (3.9) and Group contribution of
EUR 14.0 million (12.0) was given to a subsidiary company. Net
result was EUR 0.1 million (0.9).
The Board’s proposal for the distribution of prots
The Parent Company’s non-restricted equity on 31 December
2021 was EUR 285,888,692.39 of which the net prot for the
year was EUR 86,224.27. The Board of Directors proposes
to the Annual General Meeting that no dividend be paid for
the year 2021 and that the non-restricted equity of EUR
285,888,692.39 be retained and carried forward.
ELTEL Annual Report 2021 | 41
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel’s governance structure
CEO
NorwayFinland Denmark
Other
business
Sweden
Legal
Communications
& Investor Relations
Finance
& Administration
Board of
Directors
Annual
General
Meeting
Audit Committee
Auditors
Remuneration
Committee
Nomination Committee
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. Aktiebolags-
lagen (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 conrms that the
description of the main features of the internal audit and risk
management section, as related to the nancial reporting
process, is consistent with the nancial statements, as set out
in Eltel’s Annual Report 2021.
Eltel’s governance structure
Eltel’s internal governance is regulated by the Swedish
Companies Act and the Code.
42 | ELTEL Annual Report 2021
Corporate Governance report
Shareholders
Ownership structure
As per 31 December 2021, Eltel has 3,134 shareholders. The
four largest shareholders of Eltel AB are Solero Luxco S.á.r.l.
16.4% (a company controlled by Triton Funds), Wipunen
Varainhallinta Oy 13.5%, the Fourth Swedish National Pension
Fund (AP4) 9.6%, and Heikintorppa Oy 6.8%. The four largest
shareholders referred above together represent 46.3% of the
votes in the Company.
Shares and votes
Eltel’s shares are listed on Nasdaq Stockholm, under the
trading symbol “ELTEL”. As per 31 December 2021, the
total number of shares amounts to 157,499,081 divided into
156,649,081 ordinary shares with 1 vote per share and 850,000
C shares with 1/10 vote per share. The share capital entered in
the trade register per 31 December 2021 is EUR 158,838,751.
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, Extraordinary General Meetings 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 nancial statements
• Deciding on the distribution of dividends
• Discharging the company’s Board of Directors and CEO
from liability for the nancial 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.
All General Meetings are convened by notice in the Swedish
Ofcial Gazette (Sw. Post- och Inrikes Tidningar) and by
publishing the notice of the meeting on Eltel’s website. At the
time of the notice, an announcement 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 2021
Eltel’s Annual General Meeting was held on 5 May 2021.
Shareholders representing 108,206,050 shares, constituting
68.7% of the total number of shares and votes in the Company,
participated in person or by proxy or by exercising their voting
rights by postal voting. Matters addressed at the meeting
included the following:
• Resolution regarding adoption of the prot and loss state-
ment and the balance sheet and the consolidated prot
and loss statement and consolidated balance sheet and
resolution regarding appropriation of the Company’s prot
according to the adopted balance sheet
• Resolution regarding discharge from liability for the
members of the Board of Directors and the CEO
• Re-election of Ulf Mattsson, Håkan Dahlström, Gunilla
Fransson, Joakim Olsson and Roland Sundén as members
of the Board of Directors
• Election of KPMG AB as the auditor (whereby it was
announced that Mats Kåvik will be auditor-in-charge)
• Resolution regarding approval of the Remuneration Report
for 2020
• Resolution regarding a share-based long-term incentive
programme 2021 (“LTIP 2021”)
• Authorisation for the Board of Directors to resolve to issue
new shares and authorisation 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 2022 and Annual Report 2021
Eltel’s Annual General Meeting 2022 will be held on 11 May
2022.
The Annual Report 2021 will be made available on the Group
website from week 13, 2022, www.eltelgroup.com and at Eltel
AB headquarters, Adolfsbergsvägen 13, Bromma, Sweden
from week 16, 2022.
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 Committee’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
ELTEL Annual Report 2021 | 43
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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 qualications, 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 members 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 2022
For the 2022 Annual General Meeting, the Nomination
Committee consists of the following members:
• Erik Malmberg, Chairman, Solero Luxco S.á.r.l. (16,4% of
votes)
• Peter Immonen, Wipunen Varainhallinta Oy (13.5% of votes)
• Per Colleen, the Fourth Swedish National Pension Fund
(9.6% of votes)
• Ingeborg Åkermarck, Heikintorppa Oy (6.8% of votes).
The members of the Nomination Committee have met on three
occasions and held separate sessions to interview individual
members of the Board.
The Nomination Committee’s complete proposals for the
2022 Annual General Meeting will be published in the notice
convening the 2022 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 Company’s organ-
isation and administration of the Company’s affairs. The Board
of Directors shall continuously assess the Group’s nancial
situation, as well as ensure that the Company’s organisation is
structured in such a way that the accounting, management of
funds and the nancial conditions are securely controlled.
The Board of Directors is also responsible for setting
objectives and strategies, ensuring efcient 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 satisfactory controls
are in place to ensure the Company’s compliance with laws
and other regu lations applicable to Eltel’s operations. Further-
more, 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
infor mation 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, members
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 members 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 members of the Board of Directors shall be
independent of the Company and its management.
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 69,000 115,933 Yes Yes
Håkan Dahlström Member 1962 2017 75,597 45,600 Yes Yes
Gunilla Fransson Member 1960 2016 – 48,933 Yes Yes
Joakim Olsson Member 1965 2018 – 42,867 No Yes
Roland Sundén Member 1953 2018 50,000 51,067 Yes Yes
Björn Ekblom Employee represent. 1976 2015 – – Yes No
Stefan Söderholm
1)
Employee represent. 1960 2021 – – Yes No
Mats Johansson
1)
Deputy employee rep. 1971 2021 – – Yes No
1)
From May 2021.
Information about the Board of Directors’ other assignments can be found on page 48.
44 | ELTEL Annual Report 2021
Corporate Governance report
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 nancial
reporting.
Board of Directors in 2021
As per 31 December 2021, the Board of Directors consists
of ve ordinary members and two employee representatives
as ordinary members, and one deputy to the employee
representatives:
• Ulf Mattsson, Chairman
• Håkan Dahlström
• Gunilla Fransson
• Joakim Olsson
• Roland Sundén
• Björn Ekblom, employee representative
• Stefan Söderholm, employee representative
• Mats Johansson, deputy employee representative.
The members of the Board of Directors are presented in greater
detail in the section “Board of Directors” on page 48.
The Chairman Ulf Mattsson and the Board members Håkan
Dahlström, Gunilla Fransson and Roland Sundén are deemed
to be independent of the owners and the Company. Joakim
Olsson is deemed to be independent of the Company but
dependent on signicant shareholders due to his positions in
relation to Solero Luxco S.á.r.l.
Matters for the Board of Directors during 2021
In 2021, the main focus of the Board of Directors was to ensure
the implementation of the Company’s Operational Excellence
strategy, that divestments and the rightsizing of operations
were executed according to plan, improvement of protability
and that other activities for strengthening the balance sheet
and lowering the net debt also took place.
In 2021, the Board of Directors held 14 meetings. For details
of Board member participation in Board meetings, please see
table below.
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 2021, evaluations, led by the Chairman
of the Board of Directors, were carried out by way of each
Board member responding to an online questionnaire. The
compiled results were presented to the Board of Directors at
the nal Board meeting of the year. The Chairman of the Board
of Directors also presented the results of the evaluations 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 constituent
meeting following the Annual General Meeting.
The Board of Directors may also appoint other committees,
if deemed necessary. The Board of Directors appoints the
members of the committees and their chairmen by taking
account of the expertise and experience required for the
duties. The members of each committee are appointed for the
same term of ofce 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.
Board meeting participation 2021
28
Jan
17
Feb
22
Mar
29
Mar
27
Apr
5
May
26
May
3
Jun
23
Jun
26
Jul
19
Aug
21
Sep
2
Nov
21
Dec
Ulf Mattsson
• • • • • • • • • • • • • •
Håkan Dahlström
• • • • • • • • • • • • • •
Gunilla Fransson
• • • • • • •
–
• • • • • •
Joakim Olsson
• • • • • • • • • • • • • •
Roland Sundén
• • • • • • • • • • • • • •
Björn Ekblom
• •
–
• • • • • •
–
• • •
–
Stefan Söderholm
1)
– – – – –
• •
–
• • • • • •
Mats Johansson
1)
– – – – –
•
–
• • • • •
–
•
1)
From May 2021.
ELTEL Annual Report 2021 | 45
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The Audit Committee
The main responsibilities of the Audit Committee are to:
• Monitor the Company’s nancial 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 independence
of the auditor, paying particular attention to whether the
auditor provides the Company with services other than
auditing services
• Assist in the preparation of proposals to the resolutions to
the General Meeting regarding the election of an auditor
• Advise and perform tasks that are specically 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 nancial reporting and information 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, nancial reporting, and media contacts,
particularly in the event of a crisis.
The Audit Committee in 2021
As per 31 December 2021, the Audit Committee consists of
three members: Gunilla Fransson (Chairman), Joakim Olsson
and Roland Sundén.
In 2021, the Audit Committee held seven meetings, at which
Eltel’s external auditor and representatives of the Company’s
management were present.
The Remuneration Committee
The main responsibilities of the Remuneration Committee are to:
• Prepare the Board of Directors’ resolutions on issues
concerning remuneration principles, remunerations, and
other terms of employment for the senior management
• Monitor and evaluate programmes for the variable
remuneration 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 management at
Eltel.
The Remuneration Committee in 2021
As per 31 December 2021, the Remuneration Committee
comprises three members: Ulf Mattsson (Chairman), Håkan
Dahlström and Roland Sundén.
The Remuneration Committee held three meetings in 2021.
Remuneration Committee participation 2021
9
Feb
7
Sep
10
Dec
Ulf Mattsson
• • •
Håkan Dahlström
• • •
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 Remuneration Report for
2021 will be submitted for approval at Eltel’s Annual General
Meeting 2022.
Audit Committee participation 2021
17
Feb
27
Apr
24
Jun
23
Jul
20
Sep
2
Nov
20
Dec
Gunilla Fransson
• • • • • • •
Håkan Dahlström
1)
– – – – – – –
Ulf Mattsson
1)
• •
– – – – –
Joakim Olsson
• • • • • • •
Roland Sundén
• • • • • • •
1)
Until May 2021.
46 | ELTEL Annual Report 2021
Corporate Governance report
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 nancial 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 administration. 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
nancial statements. The external auditor attends at least one
Board meeting each year.
External auditor in 2021
The Annual General Meeting in 2021 elected KPMG AB as
Eltel’s external auditor for a one-year mandate, with Mats
Kåvik as auditor-in-charge. In September 2021 Mats Kåvik was
replaced by Fredrik Westin as auditor-in-charge. In 2021, total
fees paid to the external auditors, KPMG AB, amounted to EUR
0.8 million, of which non-auditing services totalled EUR 0.1
million.
Group Management Team
Chief Executive Ofcer
Eltel’s President and Chief Executive Ofcer (CEO) reports
to the Board of Directors. As of 1 September 2018, Casimir
Lindholm 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 directions 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 2021). The
GMT considers strategic and operational issues related to
the Group and its businesses, as well as investments, Group
structure and corporate steering systems, 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:
• Casimir Lindholm, President and CEO
• Saila Miettinen-Lähde, CFO
• Henrik Sundell, General Counsel
• Elin Otter, Director, Communications and Investor Relations
• Juha Luusua, Managing Director, Eltel Finland
• Leif Göransson, 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 2021 on page 49.
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 organised according
to the requirements of each Country Unit and Solution Unit.
Eltel’s IFRS Accounting Manual contains instructions and
guidance on accounting and nancial 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
nancial statements.
Fundamental Eltel policies cover areas such as authorisation,
Code of Conduct, internal control and risk management,
reporting of suspected violations of laws, ethics or misconduct
(whistleblowing) to Eltel’s Compliance 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 identied.
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 established
procedures. Furthermore, monthly operational business
reviews are conducted with the CEO and CFO.
ELTEL Annual Report 2021 | 47
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Information and communications
All external communications are carried out in accordance with
the relevant regulations and Eltel’s Communications 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 compliance
with adopted policies and guidelines. At each Board
meeting the Company’s nancial position is addressed. The
Remuneration and Audit Committees play key roles in terms of,
for example, remuneration, nancial 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 nancial statements.
Eltel’s management conducts a monthly follow-up of
earnings, analysing 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 identied 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 specic cases, to instruct
the auditors to perform separate reviews in specic areas. The
auditors attend all regular Audit Committee meetings.
Priority areas in 2021
Eltel’s signicant priority areas for 2021 included the following:
• Improve protability
• Prioritise core operational improvements
• Upsell on existing customer base
• Restructure non-performing businesses, including
divestments
• Strengthen the nancial position of the Company.
Eltel divested its High Voltage business in Germany. The
divestment created value for Eltel and its shareholders by
strengthening the Nordic focus.
Internal audit 2021
The Internal Audit Function is responsible for the internal
control framework, risk management, internal audits and
monitoring of Eltel’s compliance with governance, which is
based on applicable laws and generally accepted accounting
principles.
During the year, the function performed internal audits to
assess process/control compliance and risk management.
The internal audits covered a selection of customer projects,
business processes, and the global shared services. The
outcome of the internal audits has been followed-up and
communicated accordingly. The function will continue to
focus on risk management within customer projects and
key business processes as part of its internal audit scope as
outlined in the 2022 plan.
Risk management
Please see Board of Director’s report page 37.
48 | ELTEL Annual Report 2021
Corporate Governance report
Board of Directors
ULF MATTSSON
Chairman of the Board since 2017
Born: 1964
M.Sc. Economics
Positions and other board member-
ships: Chairman of the Board of
VaccinDirekt i Sverige AB and Lideta
AB. 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 2010–2017,
Musti ja Mirri 2014–2017, Evidensia
2014–2017, Itslearning 2013–2017.
Member of the Board of Gambro,
2010–2013. CEO (interim) at Gambro
2011. CEO at Capio 2005–2006 and
Mölnlycke Health Care 2004–2005.
Shareholding: 69,000 shares
ROLAND SUNDÉN
Member of the Board since 2018
Born: 1953
M.Sc. Mechanical Engineering
Positions and other board member-
ships: 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 2014–2018. President and
CEO at LM Wind Power 2006−2013.
President, Agricultural Division at Case
New Holland 2003−2006. Executive
Vice President at Volvo Construction
Equipment 2000−2003.
Shareholding: 50,000 shares
JOAKIM OLSSON
Member of the Board since 2018
Born: 1965
MBA and M.Sc. Mechanical
Engineering
Positions and other board member-
ships: Operating Partner at Triton.
Chairman of the Board of Seves
Group S.á r.l. and Arvos Group.
Member of the Board of Dywidag.
Board committees: Member of the
Audit Committee
Previous positions: Member of the
Board of Logstor A/S 2019−2021.
Chairman of the Board of Ovako
Group AB 2015–2018. Member
of the Board of FläktGroup GmbH
2015−2018, VCST 2013–2016 and
Semcon AB 2011−2015. CEO at SAG
Group GmbH 2011−2014 and Haldex
AB 2005−2011.
Shareholding: –
HÅKAN DAHLSTRÖM
Member of the Board since 2017
Born: 1962
M.Sc. Engineering and M.Sc. Digital
Technology
Positions and other board member-
ships: CEO at Fujitsu Sweden AB.
Member and Vice Chairman of the
Board of The Business Executives
Council at The Royal Swedish
Academy of Engineering Sciences.
Board committees: Member of the
Remuneration Committee
Previous positions: CEO at Tieto
Sweden AB and Executive Vice Pres-
ident, Tieto Corporation 2014–2020.
President Mobile Business area at
TeliaSonera AB 2010–2012.
President Broadband Business area
at TeliaSonera AB 2008–2010.
Shareholding: 75,597 shares
GUNILLA FRANSSON
Member of the Board since 2016
Born: 1960
M.Sc. and Tech.Lic. Chemical
Engineering
Positions and other board member-
ships: 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 2008–
2015. Various positions at Ericsson
AB 1985–2008.
Shareholding: –
BJÖRN EKBLOM
Member of the Board – Employee
Representative, since 2015
Born: 1976
Chairman of the trade union Unionen
at Eltel Sweden since 2010
Positions and other board member-
ships: –
Board committees: –
Previous positions: Team Leader at
Eltel Aviation & Security 2006–2010.
Network Engineer at Eltel Aviation &
Security 1999–2006.
Shareholding: –
STEFAN SÖDERHOLM
Member of the Board – Employee
Representative, since 2021
Born: 1960
Member of the Board of SEKO at
Eltel Sweden since 2008.
Positions and other board member-
ships: –
Board committees: –
Previous positions: Several different
technical and managerial positions,
since 1980, in the current Eltel
organisation.
Shareholding: –
MATS JOHANSSON
Member of the Board – Deputy Employee Representative, since 2021
Born: 1971
Shares held in Eltel as of 31 December 2021
ELTEL Annual Report 2021 | 49
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Group Management Team
SAILA MIETTINEN-LÄHDE
CFO, since 2020
Born: 1962
M.Sc. Engineering
Positions and other board member-
ships: Senior Advisor to Tekir Oy.
Member of the Board of Lemonsoft
Oyj and Kamrock Oy.
Previous positions: CEO at
Endomines AB 2017–2019. CFO at
F-Secure Corporation 2015–2017.
Deputy CEO and CFO at Talvivaara
Mining Company Plc 2005–2015.
Shareholding: 3,700 shares
HENRIK SUNDELL
General Counsel, since 2016
Born: 1964
Master of Laws
Positions and other board member-
ships: –
Previous positions: General Counsel
at Fingerprint Cards AB 2015−2016.
Group General Counsel at DeLaval
2009−2015. Senior Legal Counsel
and Associate General Counsel at
Ericsson 2000−2009.
Shareholding: 8,585 shares
CASIMIR LINDHOLM
President and CEO, since 2018
Born: 1971
M.Sc. Economics, MBA
Positions and other board member-
ships: Member of the Board of
Uponor Oyj and Cargotec Oyj.
Previous positions: President and
CEO at Lemminkäinen Group 2014–
2018. Deputy CEO at Lemminkäinen
Group 04/2014–08/2014. Executive
Vice President, Building Construc-
tion Finland at Lemminkäinen Group
2013–2014. Various managerial
positions at Eltel Group Corporation
and Eltel Networks Infranet AB
2008–2012.
Shareholding: 79,000 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 2018.
Head of Communications and
Marketing Nordics at Triton 2016–
2018. Various managerial positions
at Skanska 2007–2016.
Shareholding: 7,034 shares
LEIF GÖRANSSON
Managing Director,
Eltel Sweden, since 2019
Born: 1967
B.Sc. Business Administration
Positions and other board member-
ships: –
Previous positions: COO Country
Unit Sweden at Eltel 2018. Director
Group Projects and Operations at
Eltel 2018. Head of Group project
function at Eltel 2016−02/2018.
Operations Director at Otis 2016.
Acting CEO at Imtech Elteknik AB
2015.
Shareholding: 21,000 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
Voimatalouspooli (part of the Finnish
National Emergency Supply Agency)
and Football Association of Finland.
Previous positions: President
BU Power at Eltel 2017–2018.
President Power Distribution at
Eltel 2012–2017. Managing Director
Country Unit Finland at Eltel 2008–.
SVP Electricity at Eltel Networks/
Group Corporation 2006–2007.
Shareholding: 155,323 shares
THOR-EGEL BRÅTHEN
Managing Director,
Eltel Norway, since 2018
Born: 1965
INSEAD Executive Management
Programme, Certied service
electronics technician
Positions and other board member-
ships: –
Previous positions: Director Fixed
Telecom/Deputy Chief Executive
Ofcer at Eltel Networks AS 2015–
02/2018. CEO at Eltel Networks AS
2011–2015. QA Manager at Eltel
Networks AS 2009–2011. CEO at
Niscayah Denmark 2006–2009.
Shareholding: 4,957 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
Fiber&Anlæg I/S.
Previous positions: Vice President
at Caverion A/S 2016–2017.
Senior Vice President at TDC A/S
2011–2016.
Shareholding: 9,700 shares
Shares held in Eltel as of 31 December 2021.
Consolidated nancial
statements
ELTEL Annual Report 2021 | 51
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Consolidated income statement
Consolidated statement of comprehensive income
EUR million Note Jan–Dec 2021 Jan–Dec 2020
Net sales 812.6 938.0
Cost of sales 6 -724.5 -838.6
Gross prot 88.1 99.4
Other income 6,7 5.5 22.5
Selling and administrative expenses 6 -78.1 -89.2
Other expenses 6,8 -1.0 -7.7
Share of prot/loss of joint ventures – -0.2
Operating result (EBIT) 14.5 24.8
Financial income 0.1 0.5
Financial expenses -5.8 -10.3
Net nancial expenses 10 -5.8 -9.8
Result before taxes 8.7 14.9
Taxes 11 -3.8 -9.7
Net result 4.9 5.3
Attributable to:
Equity holders of the parent 4.3 4.7
Non-controlling interest 25 0.6 0.6
Earnings per share (EPS) 12
Basic, EUR 0.03 0.03
Diluted, EUR 0.03 0.03
EUR million Note Jan–Dec 2021 Jan–Dec 2020
Net result for the period 4.9 5.3
Other comprehensive income:
Items that will not be reclassied to prot and loss
Revaluation of dened benet plans, net of tax 2.6 -4.8
Items that may be subsequently reclassied to prot and loss
Cash ow hedges, net of tax – 0.1
Net investment hedges, net of tax 0.3 -0.9
Currency translation differences 1.3 -0.6
Total 1.6 -1.4
Other comprehensive income/loss for the period, net of tax 4.2 -6.2
Total comprehensive income/loss for the period 9.1 -0.9
Total comprehensive loss attributable to:
Equity holders of the parent 8.5 -1.5
Non-controlling interest 25 0.6 0.6
52 | ELTEL Annual Report 2021
Consolidated nancial statements
Consolidated balance sheet
EUR million Note 31 Dec 2021 31 Dec 2020
ASSETS
Non-current assets
Goodwill 26 265.0 264.9
Intangible assets 26 39.6 38.3
Property, plant and equipment 27 11.6 20.0
Right-of-use assets 28 53.3 59.2
Investments 16 0.7 0.5
Deferred tax assets 23 18.4 19.1
Trade and other receivables 16,19 0.5 0.4
Total non-current assets 389.1 402.5
Current assets
Inventories 20 17.2 12.1
Other nancial assets 16 – 35.0
Trade and other receivables 3,16,19 192.3 201.7
Cash and cash equivalents 32.3 26.0
Total current assets 241.8 274.8
Assets held for sale
24 – 0.0
TOTAL ASSETS 630.8 677.3
EQUITY AND LIABILITIES
Equity 14
Share capital 158.8 158.8
Other equity 61.4 52.8
Equity attributable to shareholders of the parent 220.2 211.7
Non-controlling interest 25 7.7 7.5
Total equity 227.9 219.2
Non-current liabilities
Interest-bearing debt 15,16 25.5 27.7
Leasing liabilities 15, 16, 28 35.8 39.0
Retirement benet obligations 30 14.4 17.4
Deferred tax liabilities 23 10.7 11.0
Provisions 21 2.7 2.7
Other non-current liabilities 0.7 0.5
Total non-current liabilities 89.8 98.4
Current liabilities
Interest-bearing debt 15,16 74.2 62.1
Leasing liabilities 15, 16, 28 18.6 21.8
Liabilities to shareholders 15,16 – 35.0
Provisions 21 6.0 7.5
Advances received 3 35.8 32.2
Trade and other payables 16,22 178.5 197.4
Total current liabilities 313.1 356.0
Liabilities associated with assets held for sale
24 – 3.8
Total liabilities 402.9 458.1
TOTAL EQUITY AND LIABILITIES 630.8 677.3
ELTEL Annual Report 2021 | 53
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Consolidated statement of cash ow
EUR million Note Jan–Dec 2021 Jan–Dec 2020
Cash ow from operating activities
Operating result (EBIT)
1)
Adjustments:
Depreciation and amortisation 32.1 38.2
Gain/loss on sales of assets and business
1)
-2.6 -14.7
Dened benet pension plans -3.3 -3.0
Other non-cash adjustments -1.5 1.4
Cash ow from operations before interests, taxes and changes in working capital 39.1 46.7
Interests received 0.1 0.4
Interest and other nancial expenses paid -4.1 -10.8
Income taxes received/paid -2.7 -3.5
Cash ow from operations before changes in working capital 32.4 32.8
Changes in working capital:
Trade and other receivables 9.4 24.9
Trade and other payables -14.4 -10.4
Inventories -5.0 2.1
Changes in working capital -10.1 16.6
Net cash from operating activities 22.3 49.4
Cash ow from investing activities
Purchases of property, plant and equipment (PPE) -4.4 -6.4
Proceeds from sale of property, plant and equipment ( PPE) 5.3 2.1
Divestments of business, net of cash disposed of 24 -3.8 37.9
Net cash from investing activities -2.9 33.5
Cash ow from nancing activities
Proceeds from short-term nancial liabilities 15 31.2 38.4
Payments of short-term nancial liabilities 15 -11.0 -87.4
Payments of nancial liabilities, term loans 15 -10.0 -46.1
Proceeds from other nancial assets 35.0 –
Payments of liabilities to shareholders 15 -35.0 –
Payments of lease liabilities 15 -23.8 -26.2
Dividends to non-controlling interest -0.4 -0.6
Change in non-liquid nancial assets 0.2 0.2
Net cash from nancing activities -13.7 -121.6
Net change in cash and cash equivalents 5.7 -38.7
Cash and cash equivalents at beginning of period 26.0 65.2
Foreign exchange rate effect 0.6 -0.6
Cash and cash equivalents at end of period 32.3 26.0
1)
EBIT in 2020 Included EUR 20.4 million gain from divestment of the German Communication business and business area Aviation & Security and EUR 5.7 million loss from valuation of the
German high voltage business as held for sale.
54 | ELTEL Annual Report 2021
Consolidated nancial statements
Consolidated statement of changes in equity
Equity attributable to shareholders of the parent
EUR million
Share
capital
Other
paid-in
capital
Accu-
mulated
losses
Revaluation of
dened benet
plans, net of tax
Hedging
reserve,
net of tax
Currency
translation Total
Non-
controlling
interest
Total
equity
1 Jan 2021 158.8 490.6 -370.6 -41.5 10.6 -36.3 211.7 7.5 219.2
Total comprehensive income
for the period – – 4.3 2.6 0.3 1.3 8.5 0.6 9.1
Transactions with owners
1)
:
Equity-settled share-based payment – – 0.1 – – – 0.1 – 0.1
Dividends paid to
non-controlling interests – – – – – – – -0.4 -0.4
Total transaction with owners – – 0.1 – – – 0.1 -0.4 -0.3
31 Dec 2021 158.8 490.6 -366.2 -38.9 10.9 -35.0 220.2 7.7 227.9
1)
For more information about equity-settled share-based payments see note 29 Remuneration to senior executives and for share transactions see note 14 Shares and share capital.
Equity attributable to shareholders of the parent
EUR million
Share
capital
Other
paid-in
capital
Accu-
mulated
losses
Revaluation of
dened benet
plans, net of tax
Hedging
reserve,
net of tax
Currency
translation Total
Non-
controlling
interest
Total
equity
1 Jan 2020 158.8 490.6 -375.4 -36.7 11.4 -35.7 213.1 7.6 220.7
Total comprehensive income
for the period – – 4.7 -4.8 -0.8 -0.6 -1.5 0.6 -0.9
Transactions with owners
1)
:
Equity-settled share-based payment – – 0.0 – – – 0.0 – 0.0
Dividends paid to
non-controlling interests – – – – – – – -0.6 -0.6
Total transaction with owners – – 0.0 – – – 0.0 -0.6 -0.6
31 Dec 2020 158.8 490.6 -370.6 -41.5 10.6 -36.3 211.7 7.5 219.2
1)
For more information about equity-settled share-based payments see note 29 Remuneration to senior executives and for share transactions see note 14 Shares and share capital.
Equity attributable to shareholders of the parent
company
Shareholders’ equity consists of the share capital, other paid-in capi-
tal, reserves and accumulated prots and losses. Other paid-in capital
includes share subscription prices to the extent that they are not included
in share capital (premium) and unconditional shareholders’ contribution.
Actuarial gains and losses arising from employee benets are recorded
under revaluation of dened benet plans. Hedging reserve comprises of
net investment hedges. Gains and losses from hedge accounted derivative
instruments are temporarily recognised in other comprehensive income
under hedging reserve for their effective part and will be reclassied to the
income statement as the hedged item affects the income statement. The
currency translation reserve includes differences arising on translation of
the nancial statements of foreign entities.
ELTEL Annual Report 2021 | 55
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Basis of preparation
1 Corporate information 56
2 Accounting policies for the consolidated accounts 56
Financial performance
3 Revenue recognition and segment reporting 62
4 Personnel by segment 64
5 Employee benet expenses 64
6 Function expenses by nature 64
7 Other income 64
8 Other expenses 65
9 Depreciation and amortisation 65
10 Financial income and expenses 65
11 Income tax 65
12 Earnings per share 65
Financial risk management and capital structure
13 Financial risk management 66
14 Shares and share capital 71
15 Borrowings 71
16 Financial instruments by category 72
17 Derivative nancial instruments 73
18 Commitments and contingent liabilities 74
Notes to the consolidated
nancial statements
Working capital and deferred taxes
19 Trade and other receivables 75
20 Inventories 75
21 Provisions 75
22 Trade and other payables 75
23 Deferred tax 76
Business combinations and capital expenditure
24 Acquisitions, divestments and assets held for sale 77
25 Non-controlling interests and joint ventures 78
26 Intangible assets 79
27 Property, plant and equipment 80
28 Leasing 81
Remuneration and other
29 Remuneration to senior executives 82
30 Retirement benet obligations 85
31 Auditors’ fees 86
32 Related party information 86
33 Group companies 86
34 Events after balance sheet date 87
56 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Basis of preparation
This section comprises the following notes:
1.
2.
Corporate information
Accounting policies for the consolidated accounts
Note 1 Corporate information
and upgrade services to project delivery. This includes design, planning,
building, installing and securing the operation of power and communica-
tion networks for a more sustainable and connected world today and for
future generations. In 2021, 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 operations of Eltel AB through the subsidiary companies are performed
under the Eltel brand. The consolidated group is called Eltel Group.
Eltel AB owns and governs 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.
Note 2 Accounting policies for the consolidated accounts
These consolidated nancial statements of the Group are prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by EU effective at 31 December 2021. In addition, the Group
applies Financial Accounting Standards Council’s in Sweden recommen-
dation RFR1. The nancial statements have been authorised for issue by
the Board of Directors of Eltel AB on 28 March 2022 and are subject to
adoption by the Annual General Meeting on 11 May 2022.
The nancial statements are prepared on a going concern basis. At
the date of signing the nancial statements, management is required to
assess the parent company’s and the Group’s ability to continue as a going
concern, and this assessment should cover the parent company’s and the
Group’s prospects for a minimum of 12 months from the end of the report-
ing period.
Consolidated nancial statements have been prepared under the histor-
ical cost convention, except for derivative nancial instruments, which are
measured at fair value. The information in the consolidated nancial state-
ments is presented in millions of Euro unless otherwise stated. All gures in
the nancial statements have been rounded and consequently the sum of
individual gures can deviate from the presented sum gure.
Adoption of new or amended IFRS standards and interpretations
The IFRS standards, amendments and interpretations that took effect in
the nancial year 2021 did not have a material impact on the result or the
nancial position of the Group or on the presentation of the nancial state-
ments.
The new amendments effective for 2022 nancial year are not expected
to have any material impact on Group’s nancial position or the presentation
of the nancial statements.
In addition, the IASB has several projects ongoing that could have effects
on presentation of nancial statements and related disclosures. These
include the following amendments that are effective for 2023 nancial year
but not yet endorsed in the EU:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2) which denes material accounting policy information
to be disclosed and claries that immaterial accounting policy information
does not need to be disclosed
• Classication of Liabilities as Current or Non-current (Amendments
to IAS 1) which clarify the criteria used to determine whether liabilities are
classied as current or non-current. The Group will assess the impact of
the nal amendments to IAS 1 on classication of its liabilities once those
are issued by the IASB
• Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (amendment to IAS 12). The amendment require companies
to recognise gross amount of deferred tax assets and liabilities on trans-
actions, such as leases, that give rise to equal amounts of taxable and
deductible temporary differences on initial recognition. The group is
currently netting the deferred tax impact on leases and the main impact of
the amendment will be an increase of deferred tax assets and liabilities that
will be recognised both on right-of-use assets and lease liabilities.
The other published standards, amendments and interpretations that
are effective on the nancial year beginning 1 January 2023 or later are not
expected to have signicant impact on the Group.
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 nancial year
2021 is led in the European Single Electronic Format (ESEF). The primary
statements in the IFRS consolidated nancial 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 taxonomy
published by the IFRS foundation.
Critical accounting estimates and judgments
The preparation of the consolidated nancial statements in accordance
with IFRS requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, as well as the reported
amounts of income and expenses during the period. The actual results
may differ from these estimates and assumptions. Possible changes in
estimates and assumptions are recognised in the nancial period when the
changes occur and in all subsequent nancial periods.
The areas where signicant judgments and estimates are made in
preparing the nancial statements and where a subsequent change in the
estimates and assumptions may cause a material adjustment to the carry-
ing amounts of assets and liabilities are outlined below:
a) Impairment testing
The Group tests annually and always, if there are indications of impairment,
whether goodwill has suffered any impairment by comparing the book value
with the recoverable value. The recoverable amounts of cash- generating
units have been determined based on value-in-use calculations. The value -
-in-use calculations require estimation of future cash ows expected to
arise from cash-generating units and a suitable discount rate in order to
calculate present value. See note 26 intangible assets for more information
on impairment testing.
b) Revenue recognition over time
The Group applies the ve-step model of IFRS 15 when recognising revenue
from contracts with customers. Revenue for the period is recognised to
the extent that the performance obligation(s) to the customer have been
satised. The Group typically uses input method to measure the progress
of satisfying the performance obligation(s). The progress is measured
based on costs incurred relative to the total estimated costs and revenue is
recognised based on this percentage of completion.
The estimated outcome of a long-term contract that extends over
several accounting periods may vary due to changes in circumstances
and, for this reason, lead to revised estimations in the next reporting
period. Cost estimates require estimate of the nal outcome of the project
and the actual future outcome may deviate from the estimate. Deviations
from original plan in project execution may result in signicant increases
in cost to complete due to various reasons including cost for additional
work and materials, price increases as well as cost for delays and available
resources. Project business contains inherent risks related to the pricing
of the project and estimates of the ultimate cost and performance of the
contract. Additionally, project business involves risk related to authority,
customer or other external conditions outside of Eltel’s control, including
the risk of delays and in certain cases the risk of inability of the Group’s
customers to obtain nancing to fund planned projects and services. The
essential skills for performance and protability of a project are the Group’s
Basis of preparation
ELTEL Annual Report 2021 | 57
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
ability to accurately foresee the project’s costs, to correctly assess the
various resources necessary to carry out the project, to effectively manage
the services provided by subcontractors, and to control technical events
that could affect and delay progress on the project.
c) Ta xes
Determination of income taxes and deferred taxes when the ultimate tax
determination is uncertain requires management judgement. The Group
recognises deferred tax assets resulting from tax losses and temporary
differences when the realisation of related tax benet due to future taxable
prots is probable. However, deferred tax asset is always recognised
if it can be utilised against current taxable temporary differences. The
assumptions regarding future taxable prots require signicant judgement
and are based on the current business plan and further estimates added by
consideration for the uncertainties. The Group uses estimates for recogni-
tion of liabilities for anticipated tax audit and tax controversy issues based
on all available information at the time of recognition.
d) Provisions and contingent liabilities
The Group uses estimates when assessing the amount of the provisions
recognised in the balance sheet. The real outcome may differ from the
provision recorded.
A contingent liability is a possible obligation that does not full the cri-
teria to be recognised in balance sheet as a provision due to future uncer-
tainties towards the existence of obligation or outow of resources required
to settle the obligation. Information on contingent liabilities is disclosed
in notes information. Contingent liabilities are regularly monitored, and in
case the outow of resources becomes probable, they are recognised as
provisions.
e) Dened benet plans
When preparing actuarial calculations in determining the pension obliga-
tion related to dened benet plans, certain actuarial assumptions need
to be made. As the assumptions will vary, the real payment will differ from
the estimated obligation, affecting the prot or loss. The assumptions
used in actuarial calculations are presented in note 30 Retirement benet
obligations.
f) Lease contracts valid until further notice
The IFRS 16 standard requires use of estimates for valuating contracts
that are valid until further notice. Eltel has estimated the length of these
contracts based on expected usage in current business operations. This
has considerable impact in the amount of right-of-use assets and leasing
liabilities for premises. The right-of-use assets and leasing liabilities are
presented as separate lines in the balance sheet.
Principles of consolidation
The consolidated nancial statements include the parent company Eltel AB
and all companies in which, at the end of the nancial year, Eltel exercises
control, i.e. subsidiary companies. Control is achieved when the Group is
exposed to or has rights to variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the
entity. This usually means that Eltel holds over 50% of the voting rights or
otherwise has the power to govern the nancial and operating policies of
the entity. Subsidiaries are consolidated from the date on which control is
transferred to the Group and disposed subsidiaries are consolidated up to
their date of disposal.
Acquired subsidiaries are accounted for using the purchase method.
The cost of an acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the date
of exchange. The excess of the cost of acquisition over the fair value of
the Group’s share of the identiable net assets acquired is recognised as
goodwill.
Intercompany transactions, receivables, liabilities and unrealised mar-
gins, as well as distribution of prots within the Group, are eliminated in full
on consolidation. Non-controlling interest is presented separately from the
net prot and disclosed as a separate item in the equity.
Joint operations are joint arrangements whereby the partners, which
have joint control of the arrangement, have rights to the assets and obliga-
tions for the liabilities relating to the arrangement. Joint control, which is the
contractually agreed sharing of the control of an arrangement, exists only
when decisions about the relevant activities require unanimous consent of
the partners sharing control.
The Group recognises its interest in joint operations using the
proportionate method of consolidation, whereby the Group’s share of each
of the assets, liabilities, income and expenses of the joint operations are
combined with the similar items, line by line, in its consolidated nancial
statements.
Joint venture is a joint arrangement whereby the partners, which have
joint control of the arrangement, have rights to the net asset of the joint
arrangement. Joint control, which is the contractually agreed sharing of
control of an arrangement, exists only when decision about the relevant
activities require unanimous consent of the parties sharing control. Joint
ventures are consolidated using the equity method. Under the equity
method, an investment in a joint venture is initially recognised at cost
and adjusted thereafter to the Group’s share of the prot or loss of the
joint venture. On acquisition of joint venture any excess of the cost of the
investment over the Group’s share of the net fair value of the identiable
assets and liabilities of the joint venture is recognised as goodwill, which is
included within the carrying amount of the investment in joint venture.
When a group entity transacts with a joint venture, the prots and losses
resulting from the transactions are recognised only to the extent of interests
in the joint venture that are not related to the Group.
A list of subsidiaries, joint operations and joint ventures is presented in
note 33 Group companies.
Foreign currency translation
Functional and presentation currency
Items included in the nancial statements of each of the Group companies
are measured using the currency of the primary economic environment in
which the company operates (the functional currency). The consolidated
nancial statements are presented in Euros, which is also the functional
and presentation currency of the parent company.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the date of transaction. Monetary
items denominated in foreign currencies are translated into the functional
currency using the exchange rates prevailing at the balance sheet date.
Non-monetary items measured at fair value are translated into functional
currency at the exchange rates prevailing at the valuation date. All other
non-monetary items are valued using the exchange rates prevailing at the
date of transaction.
Foreign exchange gains and losses resulting from the translation of
business transactions and monetary items are recognised in the income
statement. Exchange rate gains and losses on actual business operations
are recognised in respective items above operating prot. Exchange rate
gains and losses on nancing are entered as exchange rate differences in
nancial income and expenses.
See further information on hedge accounting for foreign currency
differences arising from the translation of nancial assets and liabilities
designated as hedges in note 13.
Foreign subsidiaries
Income statements and cash ow statements of foreign subsidiaries are
translated into Euros at the average exchange rates for each month and the
balance sheets are translated using the exchange rates prevailing at the
balance sheet date. Exchange differences arising from the translation are
recognised in other comprehensive income.
When a subsidiary is partially disposed or sold, exchange differences
that were recorded in equity are recognised in the income statement as
part of the gain or loss on the sale.
Revenue recognition (IFRS 15)
The Group applies the ve-step model of IFRS 15 when recognising revenue
from contracts with customers. IFRS 15 requires identifying deliverables in
contracts with customers that qualify as separate performance obligations.
The deliverables may include good(s) or service(s) or a combination of
goods and services. Revenue is recognised for each performance obliga-
tion separately on a relative stand-alone selling price basis and takes place
when a customer obtains control of the related good(s) or service(s) and has
the ability to direct the use of and obtain the benets from the good(s) or
service(s), either over time or at a point in time.
58 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Major part of Group’s revenue comes from the following revenue types:
project delivery services, upgrade services and maintenance services. The
Group’s contracts are either stand-alone agreements or contracts within
frame agreements. Only agreements that are committing both of the con-
tracting parties are dened as a contract under IFRS 15.
A contract includes promises to transfer good(s) or service(s) to a cus-
tomer. If those goods or services are distinct, the promises are performance
obligations that are each accounted for separately in revenue recognition.
The Group has analysed the different revenue types and concluded that in
the project delivery and upgrade services revenue is typically recognised
over time as customer controls the asset Eltel creates or enhances. In main-
tenance services customer typically receives benets as Eltel performs
and revenue is and continues to be recognised based on the services per-
formed. When revenue from contracts with customers is recognised over
time, revenue for the period is recognised to the extent of satisfying the
performance obligation(s) to the customer. The Group typically uses the
input method based on the costs incurred to measure the progress of satis-
fying the performance obligation(s) over time. The progress is measured
based on costs incurred relative to the total estimated costs and revenue
is recognised based on this percentage of completion. An expected loss
on a customer contract is recognised as an expense immediately. IFRS
15 does not include any guidance on how to account for loss contracts.
Accordingly, such contracts are accounted for using the guidance in IAS 37
‘Provisions, Contingent Liabilities and Contingent Assets’.
Whenever the Group’s customer contracts contain a variable consider-
ation the amount shall be withhold so that the Group does not recognise
any amount relating to variable consideration until it is highly probable
that a signicant revenue reversal will not incur. The assessment of the
likelihood of revenue reversal is based on historical evidence from earlier
similar type of contracts. Also the materiality is estimated. A typical variable
price element in Eltel’s contracts is delay penalties.
In some contracts the timing of customer payments may differ signi-
cantly from the timing of the transfer of goods or services to the customer
(for example the consideration is prepaid or is paid after the services are
provided). When the difference is more than a year the Group assesses at
the beginning of the contract whether the contact contains a signicant
nancing component. If the contract contains a signicant nancing
component the promised amount of consideration is adjusted and Eltel
recognises revenue at an amount that reects the cash selling price of the
promised goods or services.
Contract assets and contract liabilities
IFRS 15 distinguished between contract assets and contract receivables.
Contract receivable is a right to consideration that is unconditional and only
passage of time is required before the payment is due, i.e. trade receivable.
Contract asset is a right to consideration in exchange for goods or services
the Group has transferred to customer, i.e. revenue recognised but not yet
invoiced. The contract receivables and contract assets are included in the
balance sheet in the trade and other receivables.
A contract liability is an obligation to transfer goods or services to a cus-
tomer for which the Group has received consideration from the customer.
Advances received in the balance sheet represent the Group’s contract
liabilities.
Segment reporting (IFRS 8)
Eltel changed its segment structure from 1 January 2021. In line with the
Nordic strategy, Eltel’s main operations are presented by four country
segments: Finland, Sweden, Norway and Denmark. All communication
and power business in these four Nordic countries are presented under
the country segments. Other business includes operations in High Voltage,
which conducts most of its business in Poland, Smart Grids Germany,
Lithuania as well as Power Transmission International and Rail businesses
that are under ramp down. Other business represents less than 15% of the
operations and each of the operations have a size of less than 10% of sales,
operative EBITA and total segment assets.
Operating segments are business activities that may earn revenues or
incur expenses, whose operating results are regularly reviewed by the chief
operating decision maker, the CEO, and for which nancial information is
available. Operating segments constitute the operational structure for
governance, monitoring and reporting. Revenues, costs, operative assets
and liabilities are allocated to segments on consistent basis. Income
statement items below operative EBITA are not allocated to the segments.
Goodwill and other intangible assets (IAS 38)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of the net assets of the acquired company on the date of acquisition.
Gains and losses on the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
Goodwill is not amortised, but tested annually for any impairment and
always, if there are indications of impairment. For the purpose of testing
goodwill for any impairment, goodwill is allocated to cash-generating units.
Goodwill is stated at cost less impairments.
Other intangible assets
Intangible assets are recognised only if the cost of the asset can be
measured reliably and it is probable that the future economic benets
attributable to the asset will ow to the Group. Intangible assets in the
Group include acquired computer software, brand, order backlog and cus-
tomer relationships. The valuation of intangible assets acquired in a busi-
ness combination is based on fair value. Other intangible assets (except
for brands) subsequent to initial recognition, are recognised at cost less
depreciations and impairments, if any. On initial recognition they are rec-
ognised at fair value at the acquisition date which is regarded as their cost.
Acquired computer software licences are capitalised on the basis of
the costs incurred to acquire and bring to use the specic software. These
costs are amortised using the straight-line method over their expected
useful lives (3–7 years).
Costs associated with developing or maintaining computer software
programmes are recognised as an expense as incurred. Costs that are
directly associated with the development of identiable and unique soft-
ware products controlled by the Group, and that will probably generate
economic benets exceeding costs beyond one year, are recognised as
intangible assets. Costs include the software development employee costs
and an appropriate portion of relevant overheads and external consultancy
fees. Computer software development costs recognised as assets are
amortised over their expected useful lives (7 years).
Brand, order backlog and customer relationships have been acquired
in business combinations. The brand relates to the Eltel brand as a result
of the acquisition of Eltel Group Corporation. Fair value of the brand is
determined based on the relief-from-royalty method. Brand is not amor-
tised, but tested annually for impairment. The fair value of order backlog
is determined based on the future cash ows expected to arise from the
existing contracts with customers. Order backlog is amortised using the
straight-line method over the period until delivery (2–4 years).
The fair value of customer relationships is determined based on the
future cash ows expected to arise from contracts with the existing cus-
tomers. Customer relationship is amortised using the straight-line method
over their expected useful lives (5–10 years).
The amortisation period for an intangible asset is reviewed at least at
each nancial year-end. If the expected useful life of the asset is different
from previous estimates, the amortisation period is changed accordingly.
Cloud-based Software-as-a-Service (SaaS)
General rule is that cloud-based software and related conguration and
customisation costs are recognised as an expense according to underlying
service agreement. In specic cases when the software product is
controlled by the Group, Intangible asset guidance (IAS 38) is applied and
the costs are capitalised accordingly.
Impairments
Assets that have an indenite useful life, for example goodwill, are not
subject to amortisation but are tested annually for impairment. In addition,
other assets are assessed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Should any indication of an impaired asset exist, the asset’s recoverable
amount will be estimated.
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identiable cash ows
and which are mainly independent (cash-generating units or groups of
cash-generating units). The recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. The value-in-use is determined
by reference to discounted future net cash ow expected to be generated
by the asset.
Basis of preparation
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Whenever the asset’s carrying amount exceeds its recoverable amount,
it is impaired, and the resulting impairment loss is recognised in the income
statement.
Impairment will only be reversed if there has been a change in the
estimate used to determine the asset’s recoverable amount since the
last impairment loss was recognised. Impairment is not reversed over
the balance sheet value that existed before the recognition of impairment
losses in the previous nancial periods. Impairment losses recognised for
goodwill are not reversed in any circumstances.
In addition to goodwill and brand, the Group does not have any assets
that have an indenite useful life. See note 26 Intangible assets for
information on impairment testing of goodwill.
Property, plant and equipment (IAS 16)
Property, plant and equipment are stated at historical cost less
accumulated depreciation according to plan and any impairment. Land is
not depreciated.
Depreciation on other assets is calculated using the straight-line method
to allocate their cost to their residual values over their estimated useful
lives, as follows:
Buildings and structures 15–40 years
Machinery and equipment 3–10 years
Heavy machinery 10–15 years
The expected useful life of an asset is reviewed at each balance sheet date
and, where they differ signicantly from previous estimates, depreciation
periods are changed accordingly.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable
that future economic benets associated with the item will ow to the
Group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to the income statement during the nancial
period in which they are incurred.
Right-of-use assets and leasing liabilities (IFRS 16)
The Group recognises right-of-use assets at the commencement date of
the lease (i.e., the date the underlying asset is available for use). Right-of-
use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities rec-
ognised, initial direct costs incurred, and lease payments made at or before
the commencement date less any lease incentives received. The IFRS 16
standard requires use of estimates for valuating contracts that are valid
until further notice. The Group has estimated the length of these contracts
based on expected usage in current business operations. The cost of a
right-of-use asset also includes an estimate of costs to be incurred by the
Group in restoring the asset to the condition required by the terms and
conditions of the lease. The recognised right-of-use assets are depreciated
on a straight-line basis over the shorter of its estimated useful life and the
lease term. Right-of-use assets are subject to impairment assessments
according to IAS 36.
At the commencement of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term using the incremental borrowing rate at the lease commencement
date. The lease payments include xed payments, variable lease payments
that depend on an index or a rate, and amounts expected to be paid under
residual value guarantees. The lease liabilities are subsequently measured
at amortised cost using the effective interest method. In addition, the
carrying amount of lease liabilities is remeasured if there is a modication,
e.g. a change in the lease term or a change in future lease payments result-
ing from a change in an index or rate used to determine those payments.
Generally, the amount of remeasurement of the lease liability is recognised
as an adjustment to the right-of-use asset.
Short-term leases and leases of low-value assets
The Group applies the recognition exemption to its short-term leases that
have a lease term of 12 months or less from the commencement date and
to leases that are considered of low value. Lease payments on short-term
leases and leases of low-value assets are recognised as expense on a
straight-line basis over the lease term.
Incremental borrowing rate
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the
interest rate implicit in the lease is not readily determinable. To arrive at
the incremental borrowing rate the Group applies the respective country’s
(economic environment) risk free rate for the term corresponding to the
lease term, adjusted for credit risk of each Group company.
Assets held for sale (IFRS 5)
The Group classies non-current assets and disposal groups as held
for sale if their carrying amounts will be recovered principally through a
disposal rather than through the continuing use. Such non-current assets
and disposal groups classied as held for sale are measured at the lower
of their carrying amount and fair value less costs to sell. The criteria for
held for sale classication is regarded as met only when the sale is highly
probable, and the asset or disposal group is available for immediate
disposal in its present condition. Actions required to complete the disposal
should indicate that it is unlikely that signicant changes to the disposal will
be made or that the decision to dispose will be withdrawn. Management
must be committed to the disposal expected within one year from the date
of the classication. Property, plant and equipment and intangible assets
are not depreciated or amortised once classied as held for sale.
Financial instruments (IAS 32, IFRS 7, IFRS 9)
Recognition and derecognition
All purchases and sales of nancial assets are accounted for at trade date.
Financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are
initially recognised at fair value and transaction costs have been included
for all nancial assets not carried at fair value through prot or loss.
However, trade receivables without signicant nancing components are
recognised at transaction price. Financial assets are derecognised when
the rights to receive cash ows from the nancial assets have expired or
the Group has transferred substantially all risks and rewards of ownership.
Financial liabilities are derecognised when the obligation specied in the
contract is discharged or cancelled or expires.
Classication and measurement
The Group classies its nancial assets into the following categories
according to IFRS 9: Financial assets at amortised cost, fair value through
other comprehensive income or fair value through prot and loss. The clas-
sication is made on the basis of the Group’s business model for managing
the nancial assets and the characteristics of the contractual cash ow of
the nancial assets, The Group classies all the nancial liabilities at amor-
tised costs except the derivative nancial instruments which are classied
at fair value through prot or loss. The classication is made on the basis of
the purpose of the acquisition of nancial instruments at the time of initial
recognition. See note 16 Financial instruments by category.
Financial assets and liabilities at fair value through prot or loss
are nancial assets held for trading and derivative nancial assets not
designated as hedges, as the Group has not designated any other nancial
assets as at fair value through prot or loss upon initial recognition. A
nancial asset is classied in this category if acquired principally for the
purpose of selling in the short term.
Gains or losses arising from changes in the fair value of nancial assets
at fair value through prot or loss are recognised in the income statement
in the period in which they arise either as other income and expenses or
nancial income or expenses depending on whether they relate to business
or nancial items. Derivatives not designated as hedges are classied as a
current asset or liability and presented in the balance sheet as other receiv-
ables or other liabilities. Moreover, the Group identies and separates
embedded derivatives from the business sale or purchase contracts. The
embedded derivatives are currency forward contracts and are classied as
nancial assets and liabilities at fair value through prot and loss.
Financial assets at amortised costs are non-derivative nancial assets
with xed or determinable payments not quoted in an active market nor
held for trading. They are measured at amortised cost using the effective
interest method. They include trade and other receivables which are meas-
ured at amortised cost less impairment and are presented in the balance
sheet as current assets, except for maturities greater than 12 months after
the balance sheet date. The impairment losses according to the expected
credit losses method (ECL) in IFRS 9, related to trade receivables and
60 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
contract assets are recognised in other expenses. Financial assets at
amortised costs also include cash and cash equivalents, consisting of cash
in hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less.
Financial liabilities at amortised cost include all other nancial liabilities
than derivative instruments. They are measured at amortised cost using the
effective interest method. They include trade payables which are initially
measured at amortised cost. Financial liabilities are classied as both
current and non-current liabilities and they can be interest-bearing as well
as non-interest-bearing. Bank overdrafts are shown within debt in current
liabilities.
The effective interest method is a method of calculating the amortised
cost of a nancial asset or a nancial liability and of allocating the interest
income or interest expense over the relevant period. The effective interest
rate is the rate that discounts estimated future cash payments or receipts
through the expected life of the nancial instrument or, when appropriate,
a shorter period to the net carrying amount of the nancial asset or
nancial liability. When calculating the effective interest rate, an entity
shall estimate cash ows considering all contractual terms of the nancial
instrument including for example transaction costs and all other premiums
or discounts.
Impairment of nancial assets
The Group applies the expected credit losses (ECL) model according
to IFRS 9 for impairment of trade receivables, contract assets and other
nancial assets.
Credit risk is the risk of a loss if a customer or counterparty in a nancial
instrument does not fulll its contractual obligations. The Group’s credit risk
relates primarily to account receivables and to cash and cash equivalents.
The Group evaluates the credit risk of existing receivables at each reporting
date.
Account receivables and contract assets
The Group’s accounts receivable and contract assets are divided into
two groups for measurement of credit risk. One group consists of larger
customers that account for a signicant part of the Group’s net sales.
These customers are solid infrastructure network owners, typically well-
known publicly listed companies or companies owned by governments or
municipalities in Europe. The other group consists of other customers. The
Group’s loss allowance for expected credit losses on account receivables
and contract assets are measured according to the simplied method.
This means that the loss allowance is measured for the remaining time to
maturity, which is generally less than one year.
The loss allowance for expected credit losses is based on individual
assessments regarding the largest customers, where a rating-based model
is used in combination with other known information and forward-looking
factors. The Group uses external ratings if possible and for unrated com-
panies an estimated corresponding rating is applied. For the other group
consisting of several smaller customers, the Group applies an collective
impairment model based on age analysis of the receivables and historically
realised losses in combination with forward-looking factors that affect the
customers’ ability to pay the outstanding receivables.
Cash and cash equivalents
Credit risk also originates from investments in cash and cash equivalents.
Eltel’s investments in bank accounts are kept in Eltel’s nancing banks. For
any other deposits, the aim is that the counterparty has a credit rating of
at least AA (S&P) or equivalent. The expected credit risk for cash and cash
equivalents is measured by a rating-based model in combination with other
known information and forward-looking factors. Due to the short maturity
and high creditworthiness of counterparties, the loss allowance is generally
not assessed to be signicant.
Other receivables and assets, not measured at fair value in income
statement
For any other receivables and assets, the need for impairment is assessed
by the rating model described above, if applicable, or otherwise based on
management’s assessment of the present value of the difference between
contractual and expected cash ows. Measurement of the loss reserve
corresponds to 12 months’ expected credit losses, or a shorter time period
due to time to maturity. In the event of a signicant increase in credit risk,
the loss reserve is based on the entire remaining time to maturity of the
receivable or asset.
Financial instruments, hedging (IFRS 9)
The Group’s derivative instruments include currency forward contracts and
currency swaps. The Group has not applied cash ow hedge accounting
in 2021 or 2020. However, all derivative contracts are entered into for
economic hedging purposes
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently measured at fair value on
each balance sheet date. Derivatives are classied as nancial assets or
liabilities measured at fair value through prot or loss.
Net investment hedges
The Group applies net investment hedge accounting for certain foreign
currency denominated loans which hedge the translation risk relating to
net investments in subsidiaries. The foreign exchange differences for these
loans are recognised in other comprehensive income under translation
reserve. If the amount of the net investment decreases through divest-
ment or otherwise, the related accumulated gains or losses recognised in
translation reserve are transferred to prot or loss (see note 13.1 for more
information).
Inventories (IAS 2)
Inventories are stated at the lower of cost or net realisation value. Cost
is determined by the FIFO (rst in, rst out) method. The cost of nished
goods and work in progress comprises materials, direct personnel costs,
other direct costs and an appropriate portion of production overheads.
Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and the estimated costs
necessary to make the sale.
Trade receivables
Trade receivables are initially measured at transaction price and
subsequently at amortised cost including provision for impairment using
expected credit loss (ECL) method according to IFRS 9. The ECL method is
described in impairment of nancial assets section above. See note 19 for
more information.
Share capital
Share capital presents the registered share capital of the parent company
Eltel AB. Share subscription proceeds in excess of share capital (premium)
is presented in other paid-in capital. Incremental costs directly attributable
to the issue of new shares are shown in equity as a deduction from the
proceeds.
Dividends
Dividends are proposed by the Board of Directors and recognised in the
nancial statements after the Annual General Meeting has approved the
dividend.
Earnings per share (IAS 33)
The basic earnings per share (EPS) is calculated by dividing the net result
attributable to the parent company’s shareholders with the weighted aver-
age number of ordinary shares during the nancial period. Ordinary shares
purchased and held by the Group, if any, are subtracted from number of
outstanding shares. Diluted earnings per share reect the possible impact
of the share-based incentive plans.
Trade payables
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
Provisions and contingent liabilities (IAS 37)
Provisions are recognised in the balance sheet when: the Group has
a present legal or constructive obligation as a result of a past event; it is
probable that an outow of economic benets will be required to settle
the obligation; and a reliable estimate can be made of the amount of the
obligation. Where some of the expenditure required to settle a provision is
expected to be reimbursed by another party, the reimbursement shall be
recognised as a separate asset, but only when it is certain that the reim-
bursement will be received. A warranty provision is recognised, when the
product including a warranty clause is sold. The amount of the warranty
provision is based on the past experience of the realisation of the warranty
costs and the future expectations.
Basis of preparation
ELTEL Annual Report 2021 | 61
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
A provision for restructuring is recognised when management has
developed and approved a plan to which it is committed. Employee
termination benets are recognised when the representatives of employees
or individual employees have been informed of the intended measures in
detail and the related compensation packages can be reliably measured.
The costs included in a provision for restructuring are those costs that are
either incremental or incurred as a direct result of the plan or are the result
of a continuing contractual obligation with no continuing economic benet
to the Group or a penalty incurred to cancel the contractual obligation.
Restructuring expenses are recognised in respective expenses depending
on the nature of the restructuring expenses. Provisions are not recognised
for future operating losses.
A provision is recognised for an onerous contract, when the costs
required to meet the obligations under the contract exceed the benets to
be received.
A contingent liability is a possible obligation that does not full the criteria
to be recognised in balance sheet as a provision due to future uncertain-
ties towards the existence of obligation or outow of resources required
to settle the obligation. Information on contingent liabilities is disclosed
in notes information. Contingent liabilities are regularly monitored, and in
case the outow of resources becomes probable, they are recognised as
provisions.
Income taxes (IAS 12)
The Group’s income tax expense includes taxes of the group companies
based on current period’s taxable income and the changes in the deferred
taxes. Income tax is recognised in the income statement, except for the
items recognised directly in other comprehensive income, when the tax
effect is accordingly recognised in other comprehensive income. Income
tax expense is based on the local tax rate in each country. Tax adjustments
from previous periods are included in tax expense.
Deferred tax assets or liabilities are calculated using the liability method
on all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the nancial statements. Deferred
income tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised only to the extent that it appears
probable that future taxable prot will be available, against which the tax
losses or temporary differences can be utilised. Deferred income tax is
provided on temporary differences arising on investments in subsidiaries
and associates, except where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
Employee benets (IAS 19)
Short-term benets to employees are calculated without discounting and
are recognised as a cost when the related services are received.
The Group companies have different pension schemes in accordance
with the local conditions and practices in the countries where they operate
including statutory pension plans and supplementary pension benets. The
schemes are generally funded through payments to insurance companies
or trustee-administered funds.
The plans are classied as either dened contribution plans or dened
benet plans.
In the dened contribution plan, pension contributions are paid directly
to insurance companies and once the contributions have been paid, the
Group has no further payment obligations if the company receiving the
payments cannot full its obligations. These contributions are charged to
the income statement in the year to which they relate.
For dened benet plans, the liability in respect of dened benet
pension plans is the present value of the dened benet obligation at
the balance sheet date minus the fair value of plan assets. The pension
obligation is dened using the projected unit credit method separately
for each plan. The discount rate applied to calculate the present value of
post-employment benet obligations is determined by the market yields
of long-term corporate bonds or government bonds with corresponding
maturity to the obligation. The net interest cost is estimated by applying
the discount rate to the net dened benet obligation and recognised as
nancial expenses. Past service costs are recognised immediately in the
income statement. Remeasurements of the dened benet plan are recog-
nised directly in other comprehensive income.
Termination benets
A provision is recognised in connection with termination of employees
if the company is committed to a formal and detailed plan to terminate
employment before the normal time. When a termination benet is offered
to encourage voluntary redundancy, a cost is recognised if it is probable
that the offer will be accepted and the number of employees who will
accept the offer can be reliably estimated.
Share-based payments (IFRS 2)
Eltel has two incentive programmes that are recognised as share-based
payments settled with equity instruments in accordance with IFRS 2. The
fair value of the share incentives granted to the key employees is recog-
nised as an employee expense on a straight-line basis over the vesting
period when employee services are performed with corresponding entry to
equity. The fair value of the share incentives is the market value at the grant
date. The total amount to be expensed over the vesting period is deter-
mined based on the grant date fair value of shares and Group’s estimate of
the number of the shares that are expected to be vested by the end of the
vesting period. The impact of a non-market vesting condition and estimate
for the fullment of continued employment criteria at the end of the vesting
period is included in the assumptions about the number of share incentives.
The estimate is updated at each reporting date and changes in estimate
are recorded through the statement of income. Social costs related to the
share-based incentive scheme are expensed during the periods when
services are performed based on the fair value at the reporting date.
62 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Financial performance
This section comprises the following notes:
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Revenue recognition and segment reporting
Personnel by segment
Employee benet expenses
Function expenses by nature
Other income
Other expenses
Depreciation and amortisation
Financial income and expenses
Income tax
Earnings per share
Note 3 Revenue recognition and segment reporting
Starting from 1 January 2021, Eltel reports its operations in four country
segments: Finland, Sweden, Norway and Denmark. All communication and
power business in these countries is presented under country segments.
Other business includes operations in High Voltage, which conducts most
of its business in Poland, Smart Grids Germany, Lithuania as well as Power
Transmission International and Rail businesses that are under ramp down.
Net sales by segment
EUR million 2021 2020
Finland 299.6 300.2
Sweden 182.2 224.5
Norway 160.5 177.7
Denmark 87.9 118.1
Sum segments 730.1 820.5
Other business 91.9 127.5
Eliminations -9.5 -10.1
Total 812.6 938.0
In 2021 and 2020 the Group has two customers that represent over 10% of
total sales of the Group. The customers’ share of the sales amount to 36%
(37). Revenues from these customers were reported mainly in segments
Norway and Sweden and to a smaller extent also in other country segments.
Customer means a legal entity, and where applicable, a collection of legal
entities in the same group.
Net sales by business
EUR million 2021 2020
Communication 505.1 594.9
Power 302.3 329.8
Other operations 5.3 13.3
Total 812.6 938.0
Net sales by segment and business
EUR million 2021 2020
Finland Communication 111.3 102.5
Power 188.4 197.8
Sweden Communication 163.1 204.2
Power 19.1 20.3
Norway Communication 160.0 177.2
Power 0.4 0.5
Denmark Communication 65.2 96.2
Power 22.7 21.9
Other business Communication 13.6 23.4
Power 73.1 90.8
Other operations 5.3 13.3
Eliminations -9.5 -10.1
Total 812.6 938.0
Internal net sales consist mainly of net sales from communication in
Lithuania, reported in other business. There are no material internal net
sales in any of the country segments.
Net sales by service type
Eltel’s revenue consists of project delivery, upgrade and maintenance
services.
Project delivery services
(Engineering, procurement, construction)
Project delivery services comprise engineering and delivering customer
specic network infrastructure projects. The contracts include projects
with estimated scope of works and variation orders as well as turnkey
projects and Eltel’s activities typically include tasks relating to design,
construction, installation and project management. The size of a contract
is typically large (EUR 1–40 million) and project execution time frame
from months to years. For project delivery services revenue is typically
recognised over time as customers control the asset that Eltel creates or
enhances.
Upgrade services (Upgrade and conversion projects)
Upgrade and conversion services are services to recover and upgrade
the condition or technology of an existing infrastructure network where
Eltel typically dismantle, build and/or install on customer specications.
The projects are typically based on multi-year frame agreements where
the services are ordered based on individual purchase orders but also on
separately tendered projects. Size of a project varies typically from EUR
10,000 to over EUR 1 million projects and pricing is typically based on
units. For upgrade services revenue is typically recognised over time as
customers control the asset that Eltel creates or enhances.
Maintenance services
Eltel’s maintenance services comprise of scheduled and corrective care
services and connect services where the customer contracts are usually
multi-year frame agreements. The works are performed based on con-
tinuous ow of small orders that are typically unit priced, but also certain
xed fee based contracts exist. The services are not highly customised to
a particular customer. The nature of Eltel’s maintenance services is such
that the customer typically can benet from the services either on its own
or together with other readily available resources. In maintenance services
customers receive benets as Eltel performs and revenue is recognised
over time based on the services performed.
Financial performance
ELTEL Annual Report 2021 | 63
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Net sales by business and service type
EUR million 2021 2020
Communication
Project delivery 17.5 26.1
Upgrade services 335.5 390.4
Maintenance 152.0 178.4
Total Communication 505.1 594.9
Power
Project delivery 128.1 162.9
Upgrade services 116.7 105.6
Maintenance 57.5 61.3
Total Power 302.3 329.8
Other operations
Project delivery 5.1 12.9
Maintenance 0.2 0.4
Total other operations 5.3 13.3
Total 812.6 938.0
In 2021 project delivery services form 19% (22), upgrade services 56% (53)
and maintenance services 26% (26) of Eltel’s total net sales.
Committed order backlog by business and service type
Committed order backlog in Eltel is dened as the total value of committed
(purchase) orders received but not yet recognised as net sales. It is there-
fore the best measure of unsatised performance obligations according to
IFRS 15 Revenue from contracts with customers. The below table presents
the committed order backlog by business and service type.
EUR million 2021 2020
Communication
Project delivery 39.7 52.2
Upgrade services 105.2 80.9
Maintenance 22.9 8.1
Total Communication 167.8 141.2
Power
Project delivery 211.3 238.5
Upgrade services 67.7 71.8
Maintenance 22.2 16.9
Total Power 301.1 327.2
Other operations
Project delivery 0.2 5.1
Total other operations 0.2 5.1
Total 469.1 473.5
Approximately half of the committed order backlog in project delivery
services and nearly all of the committed order backlog in upgrade services
and maintenance service is to be recognised as revenue during 2022.
Segment results
EUR million 2021 2020
Operative EBITA by segment
Finland 12.7 7.2
Sweden -1.8 -3.7
Norway 9.2 14.3
Denmark 4.2 5.0
Sum segments 24.2 22.9
Other business -1.8 -3.3
Group functions -7.6 -8.1
Operative EBITA, Group 14.8 11.4
Gain/loss on sale of business – 19.8
Valuation as held for sale -0.1 -5.7
Total items affecting comparability in EBITA
1)
-0.1 14.1
Amortisation of acquisition-related
intangible assets -0.3 -0.7
Operating result (EBIT) 14.5 24.8
Financial expenses, net -5.8 -9.8
Result before taxes 8.7 14.9
1)
In Jan-Dec 2020, EUR 20.4 million positive impact from divestment of the German
communication business and business area Aviation & Security and EUR -0.7 million
from divestment of Eltel’s share in Murphy Eltel JV Limited. Sale of German high voltage
business had EUR -5.7 million impact from valuation as held for sale in Q4 2020 and EUR
-0.1 million impact at completion in Q2 2021.
Net working capital and operative capital employed
EUR million
31 Dec
2021
31 Dec
2020
Inventories 17.2 12.1
Trade and other receivables 192.3 201.7
Provisions -8.6 -10.2
Advances received -35.8 -32.2
Trade and other payables -178.5 -197.4
Other -2.6 0.9
Net working capital -16.0 -25.1
Intangible assets excluding
acquisition-related allocations
12.3 10.4
Property, plant and equipment 11.6 20.0
Right-of-use assets 53.3 59.2
Operative fixed assets 77.2 89.6
Total operative capital employed 61.2 64.5
Operative capital employed
(average over reporting period) 62.9 87.7
Assets and liabilities held for sale are not included (on 31 December 2020
German High Voltage business).
Net working capital by segment
EUR million
31 Dec
2021
31 Dec
2020
Finland -22.6 -23.3
Sweden 6.4 3.5
Norway -15.5 -16.7
Denmark -6.7 -8.8
Other business 23.2 22.2
Group functions -0.8 -2.0
Total -16.0 -25.1
64 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Operative fixed assets by segment
EUR million
31 Dec
2021
31 Dec
2020
Finland 24.1 26.8
Sweden 16.7 19.1
Norway 16.9 19.7
Denmark 9.8 9.4
Other business 6.7 9.9
Group functions 3.0 4.7
Total 77.2 89.6
Operative capital employed by segment
EUR million
31 Dec
2021
31 Dec
2020
Finland 1.5 3.5
Sweden 23.1 22.6
Norway 1.4 3.0
Denmark 3.1 0.6
Other business 29.9 32.1
Group functions 2.1 2.7
Total 61.2 64.5
Contract balances
EUR million
31 Dec
2021
31 Dec
2020
Trade receivables 102.0 98.8
Contract assets 71.2 85.1
Total assets related to contracts with
customers 173.2 183.9
Advances received 35.8 32.2
Total liabilities related to contracts with
customers 35.8 32.2
Trade receivables and contract assets are included in the trade and
other receivables in the balance sheet. Contract assets mainly consist of
recognised net sales not yet invoiced. Advances received represent the
contract liabilities.
Note 4 Personnel by segment
Number of personnel by segment
Average 2021
Of whom
men % 2020
Of whom
men %
Finland 1,478 87 1,443 87
Sweden 938 86 1,313 87
Norway 919 87 1,001 88
Denmark 562 90 636 90
Other business 1,123 85 1,636 86
Group and shared functions 155 32 166 32
Total personnel, average 5,176 85 6,196 86
Total personnel, year-end 5,046 87 5,449 84
Note 5 Employee benet expenses
Employee benefit expenses
EUR million 2021 2020
Wages and salaries 248.7 277.7
Post-employment benefits:
Defined benefit plans -0.7 -0.6
Defined contribution plans 24.9 25.4
Other statutory social costs 34.0 40.8
Total 307.0 343.3
The denitions of employee benet expenses have been improved in 2021.
As a consequense of the improvements, other indirect employee costs are
replaced by other statutory social costs. Comparative gures for 2020 are
presented accordingly.
Employee benefit expenses by function
EUR million 2021 2020
Cost of sales 253.2 282.2
Selling and administrative expenses 53.7 61.0
Sum in operative expenses 306.9 343.2
Financial income and costs 0.1 0.1
Total 307.0 343.3
Note 6 Function expenses by nature
EUR million 2021 2020
Materials and supplies 116.0 143.0
Employee benefit expenses 306.9 343.2
External services 267.8 304.4
Other income and costs 75.4 84.2
Depreciation, amortisation and impairment 32.1 38.2
Total 798.1 913.0
The total amount recognised in the income statement is divided by function
as follows:
EUR million 2021 2020
Cost of sales 724.5 838.6
Other income -5.5 -22.5
Selling and administrative expenses 78.1 89.2
Other expenses 1.0 7.7
Total 798.1 913.0
Note 7 Other income
EUR million 2021 2020
Gains on divestment of business and sales of assets 3.0 21.1
Gain on foreign exchange forward contracts 0.3 –
Other income 2.2 1.4
Total 5.5 22.5
In 2021, main item in gain on divestment of business and sales of assets is
gain of EUR 2.5 million from sale of real estate in Poland and in 2020 gain
of EUR 13.7 million on sale of German Communication business and the
gain of EUR 6.7 million on sale of Aviation & Security business in Sweden.
See note 24 Acquisitions, divestments and assets held for sale for more
information about divestment of businesses.
Financial performance
ELTEL Annual Report 2021 | 65
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 8 Other expenses
EUR million 2021 2020
Loss on foreign exchange contracts – 0.6
Losses on divestments and held for sale valuations 0.1 6.3
Other expenses 0.9 0.8
Total 1.0 7.7
In 2020, losses on divestments and held for sale valuations include held
for sale valuation loss of High Voltage business in Germany amounting to
EUR 5.7 million as well as held for sale valuation loss of EUR 0.7 million
of Murphy Eltel JV Limited. The divestment of High Voltage business in
Germany was completed in Q2 2021 and had an impact of EUR -0.1 million
on Group EBIT. See note 24 Acquisitions, divestments and assets held for
sale for more information.
Note 9 Depreciation and amortisation
EUR million 2021 2020
Amortisation on customer relationships 0.3 0.7
Depreciation of right-of-use assets 23.4 26.7
Other depreciation and amortisation 8.4 10.7
Total 32.1 38.2
The total amount recognised in the income statement is divided by function
as follows:
EUR million 2021 2020
Cost of sales 19.1 23.2
Selling and administrative expenses 13.0 15.0
Total 32.1 38.2
Note 10 Financial income and expenses
EUR million 2021 2020
Interest income arising from financial assets at
amortised cost 0.0 0.1
Other financial income 0.1 0.4
Total financial income 0.1 0.5
Interest expenses from liabilities at amortised cost
1)
-4.6 -6.3
Fee expenses -2.2 -2.5
Net impact from financial instruments
at fair value through profit and loss – -0.1
Fair value change of foreign exchange derivatives 1.8 -0.4
Other foreign exchange differences -0.8 -1.0
Total financial expenses -5.8 -10.3
Net financial expenses -5.8 -9.8
1)
Includes EUR 1.6 million (2.0) of interest expenses for leasing liabilities.
Note 11 Income tax
Income tax expense in the consolidated income statement
EUR million 2021 2020
Current tax 3.9 1.7
Deferred tax -0.1 8.0
Total tax cost 3.8 9.7
Tax rate, % 43.8% 64.7%
Taxes represent the tax cost in countries with prot. No deferred tax asset
was booked for the losses in the period. In the comparative period, EUR 5.4
million tax cost related to gain from divestments of businesses.
The difference between income taxes at the statutory tax rate in Sweden
20.6% and income taxes recognised in the consolidated income statement
is reconciled as follows:
EUR million 2021 2020
Profit before tax 8.7 14.9
Tax calculated at Swedish tax rate 1.8 3.2
Effect of different tax rates outside Sweden 0.5 0.9
Income not subject to tax -0.4 -1.4
Expenses not deductible for tax purposes 1.2 1.6
Tax effect of goodwill from divestments – 2.8
Tax loss valuation 1.0 2.3
Non-valuated temporary differences -0.4 0.2
Remeasurement of deferred tax for change
in tax rate – 0.0
Taxes and adjustments in respect of prior years 0.2 0.1
Other items -0.1 0.1
Income taxes in the consolidated income
statement 3.8 9.7
In 2021 the Swedish national corporate income tax rate has decreased
from 21.4% to 20.6%. Tax loss valuation includes tax effects of results for
which no deferred income tax asset was recognised. Deferred taxes are
presented in note 23.
Note 12 Earnings per share
2021 2020
Net result attributable to equity holders
of the parent 4.3 4.7
Weighted average number of ordinary
shares, basic 156,649,081 156,649,081
Weighted average number of ordinary
shares, diluted 156,728,961 156,693,645
Earnings per share, basic 0.03 0.03
Earnings per share, diluted 0.03 0.03
The basic earnings per share gure 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.
66 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
The summary quantitative data about the Group’s transaction risk expo-
sure as reported to the Group’s management is as follows:
2021
EUR million
Sales and
purchases
Borrowings
and cash Hedges
Net transaction
risk exposure
EUR -1.9 0.2 0.9 -0.8
SEK -1.2 9.6 -8.0 0.4
NOK 0.1 -19.1 18.7 -0.3
DKK 0.4 -13.4 12.7 -0.4
PLN 0.0 13.1 -13.2 -0.1
USD -2.6 0.1 2.0 -0.4
MZN -0.9 1.8 – 0.9
GEL – 0.6 – 0.6
2020
EUR million
Sales and
purchases
Borrowings
and cash Hedges
Net transaction
risk exposure
EUR 1.3 0.1 -1.3 0.0
SEK -2.0 -7.8 10.1 0.3
NOK 0.7 -14.4 13.7 0.1
DKK 0.2 -8.0 8.1 0.3
PLN 0.0 10.2 -10.2 0.0
USD 0.0 0.4 -0.6 -0.1
MZN -0.5 1.0 – 0.5
GEL – 0.6 – 0.6
Sales and purchases include both forecasted contractual sales and
purchases as well as trade receivables and payables.
Currency transaction risk impact
A reasonably possible strengthening (weakening) of 10% in the most
signicant currencies against all other currencies at the balance sheet date
would have affected prot or loss by the amounts shown in the following
table. The analysis illustrates currency transaction risk including hedges
and assumes that all other variables, in particular interest rates, remain
constant.
EUR
thousands
2021 profit or loss 2020 profit or loss
Strengthening Weakening Strengthening Weakening
EUR -75 75 2 -2
SEK 40 -33 32 -26
NOK -29 24 7 -6
DKK -44 36 31 -25
PLN -15 12 2 -2
USD -48 40 -9 7
ZAR – – -5 4
MZN 103 -84 56 -46
GEL 66 -54 66 -54
The Group has not applied hedge accounting to currency derivatives in
2021 or 2020 and all fair value changes are reported through prot and loss.
Financial risk management
and capital structure
This section comprises the following notes:
13.
14.
15.
16.
17.
18.
Financial risk management
Shares and share capital
Borrowings
Financial instruments by category
Derivative nancial instruments
Commitments and contingent liabilities
Note 13 Financial risk management
The Group has exposure to the following nancial risks:
• Market risks, including currency, interest rate and commodity price risks
• Liquidity risk
• Credit risk
The Group’s nancing and nancial risk management is carried out by
acentral treasury department (Group Treasury) under the Treasury Policy
approved by the Board of Directors. Group Treasury Policy has been
established to identify and analyse the nancial 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 nancial risk management
policies and procedures are reviewed regularly to reect changes in market
conditions and Group’s activities. The main objective of the nancial risk
management is to minimise the unfavourable effects of the nancial risks
on the Group’s income and cash ow.
13.1 Market risk
Market risk is the risk that changes in market prices – such as foreign
exchange rates, interest rates and commodity prices – will affect the
Group’s income, cash ows or the value of its holdings of nancial instru-
ments. Main market risks of the Group include currency risks and interest
rate risks.
13.1.1 Currency risk
Currency risk in the Group consists of transaction risk and translation
risk. The purpose of currency risk management is to minimise the impact
of foreign exchange uctuations to the cash ows, income statement and
balance sheet of the Group.
Currency transaction risk
The Group is exposed to currency transaction risks to the extent that there
is a mismatch between the currencies in which sales, purchases, borrow-
ings and cash are denominated and the respective functional currencies of
the Group companies.
Majority of the Group’s business is local and over 95% of the cash
inows are generated in each country’s local currency. The transaction risk
is therefore limited. The foreign currencies used are typically US dollar, EUR
or other European currencies. The main principle is to mitigate the risk rst
by operative means in the businesses, e.g. by matching, as far as possible,
the project costs to the contract currency.
The open foreign exchange exposure is hedged by using foreign
currency forward contracts and swaps in accordance with the Group
foreign currency risk management policy whereby any net exposure
exceeding EUR 2 million shall be hedged with the minimum of 60% hedging
ratio and the open net exposure may not exceed EUR 4 million.
The Group applies hedge accounting for net currency exposures
exceeding EUR 4 million in counter value. More information on the Group’s
foreign exchange derivatives is included in note 17 Derivative nancial
instruments.
Financial risk management and capital structure
ELTEL Annual Report 2021 | 67
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Currency translation risk
The Group’s translation risk arises from translating foreign currency
denominated subsidiaries’ prot and loss statements and balance sheets
into the Group’s presentation currency upon Group consolidation. The risk
is realised as volatility of both the Group’s Euro-denominated prot or loss
and equity (translation reserves).
A signicant portion of the Group’s net sales is generated by subsidiaries
that operate in countries where a currency other than the Euro is used,
particularly Sweden, Norway, Denmark and Poland. For the year ended 31
December 2021, 23% (25) of the Group’s net sales were generated in SEK,
20% (20) in NOK, 11% (13) in DKK and 3% (5) in PLN. In 2021, the COVID-19
pandemic continued to cause volatility in the currency markets, and the
changes in NOK against EUR impacted the Group’s net sales by EUR +9.1
million (-17.2).
The costs of the operations of the Group are typically incurred in the
same currency as net sales. Therefore the translation risk in the Group’s
prot or loss is limited. In 2021 the changes in NOK against EUR impacted
the Group’s EBIT by EUR +0.5 million (-1.0). A change in the average EUR/
SEK, EUR/NOK, EUR/DKK, EUR/PLN rates by 10% would have had an
impact of EUR -0.6 million (-1.1) on the Group’s operating result (EBIT) and
EUR -0.0 million (-0.9) in the Group’s post tax prot in 2021.
Net investment translation risk
The majority of the Group’s net investment translation risk arises from the
net investments in the Swedish, Norwegian and Polish subsidiaries. This
net investment is hedged by SEK and PLN denominated loans, SEK 228.2
million (312.9) and PLN 7.0 million (9.5), which partly mitigates the foreign
currency translation risk arising from the subsidiaries’ net assets. The
hedged risk is the risk of weakening SEK and PLN against EUR that will
result in a reduction in the carrying amounts of the Group’s net investments
in the subsidiaries. Net investment hedge accounting according to IFRS 9
is applied for the loans. Hedges are included in the net debt to EBITDA ratio
sensitivity analysis.
The valuations of the net investment hedges in hedging reserve are pre-
sented in the below table:
2021
EUR million
Loans
denominated in
foreign currency
Discontinued
net investment
hedges Total
1 Jan 5.9 7.4 13.3
Recognised in hedging
reserve during the period 0.7 – 0.7
Transferred from hedging
reserve to prot and loss
during the period – -0.3 -0.3
31 Dec 6.5 7.1 13.6
2020
EUR million
Loans
denominated in
foreign currency
Discontinued
net investment
hedges Total
1 Jan 6.9 7.4 14.4
Recognised in hedging
reserve during the period -1.1 – -1.1
Transferred from hedging
reserve to prot and loss
during the period 0.1 – 0.1
31 Dec 5.9 7.4 13.3
13.1.2 Interest rate risk
Interest rate risk is the uncertainty in the nancial result or the value of the
Group caused by uctuations in interest rates. Interest rate risk can be
divided into two components:
• interest ow risk is the risk that the Group’s net interest expenses change
due to interest rate changes.
• interest price risk is the risk that the fair values of nancial instruments
change due to interest rate changes.
The Group’s policy is not to hedge the loans maturing within less than 2
years. At the end of 2021 all the bank borrowings were due in less than 2
years and the Group does not have any interest rate hedges in place.
The Group’s borrowing is based on oating interest rates (one to six
months) including a oor market rate of zero. Currently 89% of the term
loans are subject to such zero oor rate.
The interest rate prole of the Group is as follows:
EUR million 2021 2020
Total leasing liabilities 54.5 60.8
Variable-rate instruments
Financial assets -32.9 -26.9
Financial liabilities 100.2 90.8
Total variable-rate net liabilities 67.3 63.9
A majority of the leasing liabilities have a xed interest rate for the lease
period. More information on the Group’s interest rate derivatives is included
in note 17 Derivative nancial information.
Interest rate sensitivity
A reasonably possible change in the relevant market interest rates at the
reporting date would affect the annual interest expenses by the amounts
shown below. The analysis assumes that all other variables, in particular
foreign exchange rates, remain constant. The analysis takes into account
the effect in the interest costs of all oating rate borrowings.
2021
EUR million
Income statement
50 bp increase 25 bp decrease
Variable rate instruments 0.4 -0.2
Total 0.4 -0.2
2020
EUR million
Income statement
50 bp increase 25 bp decrease
Variable rate instruments 0.3 -0.1
Total 0.3 -0.1
Bp refers to basis points
13.1.3 Commodity price risk
Commodity price risk is the uncertainty in the nancial result or the value of
the Group caused by uctuations in commodity prices. Material prices, in
particular steel, have increased as a consequence of COVID-19. This had
a negative impact on Eltel’s protability in 2021 affecting particularly the
power business.
According to the Group’s policy the commodity derivates may be used
to hedge the commodity purchases for the long-term customer contracts,
if the price of the commodity purchases for the contract cannot be xed,
and a relevant commodity derivative is available in the market. In 2021 or
2020 Eltel had no commodity derivatives.
68 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
The maturities of the Group’s undiscounted nancial liabilities at the balance sheet date are presented in the following table in line with their contractual
terms.
31 Dec 2021
EUR million
Carrying amounts Contractual cash flows
Less than
1 year
Over
1 year
Less than
1 year 1–3 years 3–5 years
Over
5 years
Financial assets
Trade receivables 102.0 – 102.0 – – –
Derivative instruments 0.3 – 0.3 – – –
Other receivables 1.4 0.3 1.4 0.2 – 0.1
Cash and cash equivalents 32.3 – 32.3 – – –
Total financial assets 135.9 0.3 135.9 0.2 – 0.1
Financial liabilities
Bank borrowings and commercial papers 74.5 25.5 76.7 27.0 – –
Leasing liabilities 18.6 35.8 20.3 24.7 8.8 4.1
Trade payables 71.7 – 71.8 – – –
Derivative financial instruments 0.2 – 0.2 – – –
Total financial liabilities 165.1 61.4 168.9 51.8 8.8 4.1
13.2 Liquidity risk
Liquidity risk is the risk that the Group will encounter nancial difculty
in meeting its nancial obligations. The Group’s objective of liquidity risk
management is to ensure that it will maintain a sufcient liquidity reserve
to meet its liabilities when they are due under both normal and stressed
conditions.
Securing adequate amount of funding is centralised to the Group
Treasury. The Group maintains sufcient liquidity by efcient cash manage-
ment through group level cash pools and related overdraft limits. At year-end
2021, the Group had committed syndicate revolving credit facility of EUR 90
million (90). The Group had also access to short-term debt capital markets
via Finnish Domestic Commercial Paper programme of EUR 150 million.
On 17 January 2022, Eltel completed a new nancing agreement. Credit
facilities and the new nancing agreement are presented in section 13.4
Capital management.
At year-end, the cash and cash equivalents consisted solely of cash in
hand and deposits. The Group’s available liquidity reserve at the balance
sheet date was as follows:
EUR million
31 Dec
2021
31 Dec
2020
Committed credit facility 90.0 90.0
Current account overdrafts 20.0 20.0
Cash and cash equivalents 32.3 26.0
Total 142.3 136.0
At the end of December 2021 the Group held counter value of EUR
1.8 million (0.9) in local MZN currency bank accounts in Mozambique.
Due to the local currency and other regulatory requirements the funds are
not readily transferrable off-shore and the funds are currently kept in the
country to serve the ongoing projects’ working capital needs. The funds
are included in the cash and cash equivalents since the use of the funds is
not restricted. The funds are subject to currency risk in group consolidation
and to the extent the project costs arise in other than the local currency. The
risk analysis is included in section 13.1 Market risk.
The Group also monitors closely the expected cash inows and out-
ows. The liquidity projections are prepared at a daily level for the following
5 weeks and at a monthly level for the full calendar year. The most signi-
cant uncertainties in the projections are related to the cash inows from the
project business.
Financial risk management and capital structure
ELTEL Annual Report 2021 | 69
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
13.3 Credit risk
Credit risk is the risk of loss to the Group if a customer or a counterparty to a
nancial instrument fails to meet its contractual obligations.
The Group’s credit risk arises primarily from the Group’s receivables
from customers. The Group has identied a concentration risk relating to
certain key customers who account for a signicant amount of the Group’s
net sales. The key customers are solid infrastructure network owners, typ-
ically well-known publicly listed companies or companies owned by gov-
ernments or municipalities in Europe. Therefore, the Group assess that the
concentration risk and credit risk related to these key customers is limited.
The Group’s accounts receivable and contract assets are divided into
two groups for measurement of credit risk. One group consists of large
customers that account for a signicant part of the Group’s net sales.
The loss allowance for expected credit losses for the largest customers is
made individually with a rating-based model applied. For the other group
of several smaller customers, the Group applies a collective impairment
model based on age analysis of the receivables and historically realised
losses. Forward-looking factors and management judgement is applied in
both models.
At the end of December 2021 the Group held counter value of EUR 1.8
million (0.9) in local MZN currency bank accounts in Mozambique. The
sovereign risk related to Mozambique is included in expected credit loss
(ECL) calculation.
Below table summarises the expected credit loss reservation for total
trade receivables and contract assets.
31 Dec 2020
EUR million
Carrying amounts Contractual cash flows
Less than
1 year
Over
1 year
Less than
1 year 1–3 years 3–5 years
Over
5 years
Financial assets
Trade receivables 98.8 – 98.8 – – –
Derivative instruments 0.3 – 0.3 – – –
Other nancial assets
1)
35.0 – 35.0 – – –
Other receivables 1.5 0.3 1.5 0.1 – 0.2
Cash and cash equivalents 26.0 – 26.0 – – –
Total financial assets 161.7 0.3 161.7 0.1 – 0.2
Financial liabilities
Bank borrowings and commercial papers 63.0 27.7 65.5 30.5 – –
Liabilities to shareholders
1)
35.0 – 35.0 – – –
Leasing liabilities 21.8 39.0 23.4 28.0 8.6 5.6
Trade payables 81.3 – 81.3 – – –
Derivative nancial instruments 0.0 – 0.0 – – –
Total financial liabilities 201.1 66.7 205.2 58.5 8.6 5.6
1)
Liabilities to shareholders referred to selling shareholders at the time of the listing on 6 February 2015. The corresponding amount was recognised in the
Group’s assets, as the contribution amount was deposited in an escrow bank account. Following the closing of the FCCA case in Eltel’s favour in August
2021, EUR 35 million has been released from the escrow account for repayment to the former shareholders. For more information, see Legal claims and
investigations in note 18.
Credit risk exposure and loss reservation
2021
EUR million
Credit risk rating
Trade receivables
(gross)
Contract
assets Total
Expected credit
loss reservation
Recognised
amounts (net)
Large customers
AAA 2.8 1.4 4.1 0.0 4.1
AA 0.9 2.0 2.9 0.0 2.9
A 6.1 11.2 17.4 0.0 17.4
BBB 29.4 17.3 46.7 0.0 46.7
BB 4.6 3.8 8.4 0.0 8.4
Total large customers 43.7 35.8 79.5 0.1 79.4
Other customers 60.4 35.5 95.8 2.1 93.7
Total 104.1 71.2 175.3 2.1 173.2
2020
EUR million
Credit risk rating
Trade receivables
(gross)
Contract
assets Total
Expected credit
loss reservation
Recognised
amounts (net)
Large customers
AAA 3.2 0.8 4.0 0.0 4.0
AA 1.7 – 1.7 0.0 1.7
A 6.6 16.7 23.3 0.0 23.3
BBB 21.2 24.8 46.0 0.1 45.9
BB 9.0 0.8 9.8 0.1 9.7
Total large customers 41.7 43.1 84.8 0.3 84.6
Other customers 60.5 42.0 102.5 3.1 99.3
Total 102.2 85.1 187.3 3.4 183.9
70 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Credit facilities
At year-end 2021, Eltel had nancing agreements with its bank group
comprising term loans, a revolving credit facility and certain commercial
guarantees. Eltel’s total committed credit facilities amounted to EUR 137.1
million, comprising a non-current term loan of EUR 25.5 million, current
term loan of EUR 1.5 million, revolving credit facility of EUR 90.0 million and
bilateral account overdrafts totalling EUR 20.0 million.
Additional to above facilities, the Group also had access to short-term
debt capital markets via a commercial paper programme of EUR 150mil-
lion. At the reporting date EUR 73.0 million (53.0) of the commercial paper
programme and EUR 0.0 million (0.0) of the revolving credit facility were
utilised.
EUR million
31 Dec
2021 Maturity
Term loan, non-current 25.5 Feb 2023
Term loan, current 1.5 Jun 2022
Revolving credit facility 90.0 Feb 2023
Account overdrafts 20.0 Annual renewals
Total committed credit facilities 137.1
Commercial paper programme 150.0 N/A
New nancing agreement
On 17 January 2022, Eltel completed a new, unsecured nancing
agreement with banks, comprising a EUR 35.0 million term loan (maturity
2+1 years) and a EUR 90.0 million revolving credit facility (maturity 3+1+1
years). The new credit facilities have covenants pertaining to leverage
ratio and gearing. The Group has guarantee facilities with the banks and
insurance companies on bilateral basis. Account overdrafts amount to EUR
15.0 million in total.
Upon utilisation of the new term loan, the previous term loans were
repaid, and the former nancing agreements were terminated.
EUR million
17 Jan
2022 Maturity
Term loan, non-current 35.0
Jan 2024 (+extension
option until Jan 2025)
Revolving credit facility 90.0
Jan 2025 (+extension
option until Jan 2027)
Account overdrafts 15.0 Annual renewals
Total committed credit facilities 140.0
Commercial paper programme 150.0 N/A
Maturity analysis of receivables:
EUR million
31 Dec
2021
31 Dec
2020
Not past due 96.1 88.6
1–14 days overdue 4.9 4.7
15–90 days overdue 2.1 5.0
91–180 days overdue 0.2 0.7
More than 180 days overdue 0.8 3.2
Total trade receivables 104.1 102.2
Contract assets 71.2 85.1
Expected credit loss reservation -2.1 -3.4
Total 173.2 183.9
There were no past due receivables in any other class of nancial assets.
The carrying amount of the Group’s receivables represents the maximum
amount of credit risk at the balance sheet date. The amount of receivables
represent managements best estimate of amounts that will be recovered
from the customers.
The reserve for expected credit losses is EUR 2.1 million (3.4) represent-
ing a decrease of EUR 1.2 million from the comparative period. Largest items
relate to valuation of aforementioned sovereign risk related to Mozambique
and to the group of smaller customers. The effects of COVID-19 have not
had substantial impact on expected credit losses. Realised credit losses in
the Group were EUR 0.2 million (0.0) during the year.
The Group investment activities are not exposed to signicant credit risk.
Any long-term investments have to be approved by the Board of Directors.
Derivative nancial instruments are entered into with banks with high credit
rating. Group treasury is responsible for credit risk management relating to
nancial risk counterparties. New derivative counterparties always have to
be approved by the Board of Directors.
Credit risk also originates from investments in cash and cash equivalents.
EUR 30.3 million (25.0) of the cash balance on 31 December 2021 was
deposited in the banks having the credit rating of at least A (S&P) or equiva-
lent. EUR 1.8 million (0.9) of the cash was deposited in the banks in Mozam-
bique having the credit rating of BB. The expected credit risk for cash and
cash equivalents is measured by a rating-based model in combination with
other known information and forward-looking factors. The expected credit
losses for other receivables and assets have been assessed to be immate-
rial and no reservation has been recognised in the nancial statements.
13.4 Capital management
The Group’s objective when managing capital is to safeguard its ability to
continue as going concern in order to provide returns for shareholders. The
Group denes total capital as equity plus net debt in the balance sheet. In
2021 nancing agreement net debt was calculated as total borrowings from
banks and other nancial institutions on undiscounted method less cash
and cash equivalent. IFRS 16 leasing liabilities were not included.
The net debt at year-end has been as follows:
EUR million
31 Dec
2021
31 Dec
2020
Total bank borrowings 100.3 90.8
Leasing liabilities in balance sheet 54.5 60.8
Cash and cash equivalents -32.3 -26.0
Net debt 122.6 125.6
Less IFRS 16 leasing liabilities -53.3 -58.3
Net debt, 2021 financing agreement 69.2 67.4
In 2021 and in comparative period, Eltel’s bank loan agreements included
nancial covenants related to the adjusted EBITDA, minimum liquidity and
net debt.
If the liquidity, net debt or EBITDA outcome differs signicantly from
planned, there is a risk that the covenants under the existing nancing
agreement are not met during the transformation period. Challenges
with respect to meeting the nancial covenants might lead to a risk that
suppliers and other stakeholders could request accelerated payment terms
or additional guarantees.
Financial risk management and capital structure
ELTEL Annual Report 2021 | 71
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 14 Shares and share capital
During 2021, there were no changes in number of shares or share capital.
On 31 December 2021, the total number of shares amounted to 157,499,081
divided into 156,649,081 ordinary shares with 1 vote per share and 850,000
C shares with 1/10 vote per share. On 31 December 2021 the share capital
amounted to EUR 158.8 million.
The 850,000 redeemable and convertible class C shares were issued
based on the authorisation given to the Board by the Extra ordinary General
Meeting on 17 September 2018. The purpose of the issue of class C shares
is to use the shares in Eltel’s long-term incentive programme LTIP 2018.
In connection with the issue, the shares have been repurchased by Eltel.
Eltel holds the shares at 31 December 2021 and will hold the shares until it
is time to deliver shares to the participants of LTIP 2018. Prior to delivery of
the shares to participants, the class C shares will be converted to ordinary
shares.
Note 15 Borrowings
The nancial liability amounts include capital amount and accrued interests.
EUR million
31 Dec
2021
31 Dec
2020
Carrying amounts of non-current liabilities
Bank borrowings 25.5 27.7
Leasing liabilities 35.8 39.0
Total non-current financial liabilities 61.4 66.7
Carrying amounts of current liabilities
Bank borrowings 74.2 62.1
Leasing liabilities 18.6 21.8
Total current debt 92.9 83.9
Liabilities to shareholders
1)
– 35.0
Total current financial liabilities 92.9 118.9
Total financial liabilities at amortised cost 154.2 185.6
1)
Refers to selling shareholders at the time of the listing on 6 February 2015.
Following the closing of the FCCA case in Eltel’s favour in August 2021, EUR 35 million
has been released from the escrow account for repayment to the former shareholders.
The carrying amounts of the Group’s nancial liabilities are denominated
in following currencies:
EUR million
31 Dec
2021
31 Dec
2020
EUR 95.6 111.9
SEK 36.9 48.4
PLN 2.2 3.0
NOK 12.7 16.0
DKK 6.8 6.4
Total 154.2 185.6
See note 13 For information about interest rate risk, currency risk, liquidity
risk and capital management.
The weighted average interest rates for borrowings at year-end were 2.0%
in 2021 and 2.5% in 2020.
Non-cash changes of borrowings
EUR million
2021 2020
Long-term
borrowings
Short-term
borrowings
Leasing
liabilities Total
Long-term
borrowings
Short-term
borrowings
Leasing
liabilities Total
1 Jan 27.7 97.1 60.8 185.6 111.1 109.0 78.6 298.7
Cash ows (net) – -25.0 -23.8 -48.8 – -95.0 -26.2 -121.2
Non-cash changes:
New lease agreements – – 21.7 21.7 – – 13.2 13.2
Termination of lease agreements – – -4.5 -4.5 – – – –
Divestment of companies and transfers to
assets held for sale – – 0.0 0.0 – – -4.3 -4.3
Change in maturity
1)
-1.5 1.5 – – -88.8 88.8 – –
Foreign exchange movements -0.7 0.1 0.2 -0.4 5.4 -4.9 -0.6 -0.1
Other non-cash changes – 0.6 – 0.6 – -0.8 – -0.8
31 Dec 25.5 74.2 54.5 154.2 27.7 97.1 60.8 185.6
1)
Includes EUR 35 million liability to shareholders which was moved from long-term to short-term in 2020.
31 Dec
2021
31 Dec
2020
Ordinary shares 156,649,081 156,649,081
C shares 850,000 850,000
Total number of shares 157,499,081 157,499,081
Total share capital (EUR) 158,838,751 158,838,751
Quota (par) value (EUR) 1.01 1.01
72 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Note 16 Financial instruments by category
Book values of nancial instruments by category
When measuring the nancial assets and liabilities, the Group uses market
observable data as far as possible. Fair values are categorised into different
levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
• Level 1: Quoted prices in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are
observable for the asset or liability either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable
market data.
Trade and other payables and receivables are non-interest-bearing and
short-term and thus the fair value corresponds their book value.
Fair value of debt is based on discounted cash ows. The discount rate
is based on market rates and the nominal risk premium on Group’s bank
borrowing. The difference between fair value and book value is not signif-
icant as the Group’s bank borrowing is based on short-term market rates.
The fair values of currency forward contracts and the currency swaps
are based on the present value of the cash ow at the maturity date. The
fair values of interest rate swaps are calculated as the present value of the
estimated future cash ow based on observable yield curves.
31 Dec 2021
EUR million Note
Fair value
through
profit or loss
Financial
assets at
amortised cost
Financial
liabilities at
amortised cost
Carrying
amounts
Fair
value
Fair value
hierarchy
Non-current financial assets 0.7 0.5 – 1.1 1.1
Other receivables and nancial assets 19 0.7 0.5 – 1.1 1.1 2
Current financial assets 0.3 138.6 – 138.8 138.8
Trade receivables 19 – 102.0 – 102.0 102.0
Derivative instruments 17,19 0.3 – 0.3 0.3 2
Other receivables 19 – 4.4 – 4.4 4.4
Cash and cash equivalents – 32.3 – 32.3 32.3
Total financial assets 0.9 139.0 – 140.0 140.0
Non-current financial liabilities – – 61.8 61.8 61.8
Interest-bearing debt 15 – – 61.4 61.4 61.4 2
Trade and other payables – – 0.4 0.4 0.4
Current financial liabilities 0.2 – 178.2 178.3 178.9
Interest-bearing debt 15 – – 92.9 92.9 93.4 2
Trade and other payables 22 – – 85.3 85.3 85.3
Derivative instruments 17,22 0.2 – – 0.2 0.2 2
Total financial liabilities 0.2 – 240.0 240.1 240.7
Carrying amount, net 0.8 139.0 -240.0
On 31 December 2021 the Group had no nancial instruments measured at fair value through other comprehensive income.
Financial risk management and capital structure
ELTEL Annual Report 2021 | 73
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
31 Dec 2020
EUR million Note
Fair value
through
profit or loss
Financial
assets at
amortised cost
Financial
liabilities at
amortised cost
Carrying
amounts
Fair
value
Fair value
hierarchy
Non-current financial assets 0.5 0.4 – 0.9 0.9
Other receivables and nancial assets 19 0.5 0.4 – 0.9 0.9 2
Current financial assets 0.3 164.2 – 164.5 164.5
Trade receivables 19 – 98.8 – 98.8 98.8
Derivative instruments 17,19 0.3 – – 0.3 0.3 2
Other nancial assets
1)
– 35.0 – 35.0 35.0
Other receivables 19 – 4.3 – 4.3 4.3
Cash and cash equivalents – 26.0 – 26.0 26.0
Total financial assets 0.8 164.6 – 165.4 165.4
Non-current financial liabilities – – 66.9 66.9 66.9
Interest-bearing debt 15 – – 66.7 66.7 66.7 2
Trade and other payables – – 0.1 0.1 0.1
Current financial liabilities 0.3 – 213.1 213.3 214.3
Interest-bearing debt 15 – – 83.9 83.9 84.9 2
Liabilities to shareholders
1)
15 – – 35.0 35.0 35.0
Trade and other payables 22 – – 94.2 94.2 94.2
Derivative instruments 17,22 0.0 – – 0.0 0.0 2
Embedded derivative instruments 17,22 0.2 – – 0.2 0.2 2
Total financial liabilities 0.3 – 279.9 280.2 281.2
Carrying amount, net 0.5 164.6 -279.9
1)
Refers to selling shareholders at the time of the listing on 6 February 2015. Following the closing of the FCCA case in Eltel’s favour in August 2021, EUR 35 million has been released from
the escrow account for repayment to the former shareholders.
On 31 December 2020 the Group had no nancial instruments measured at fair value through other comprehensive income.
Note 17 Derivative nancial instruments
EUR million
31 Dec 2021 31 Dec 2020
Nominal
values
Fair values
Positive
Fair values
Negative
Nominal
values
Fair values
Positive
Fair values
Negative
Foreign exchange derivatives 41.8 0.3 -0.2 30.9 0.3 0.0
Embedded derivatives – – – 1.3 – -0.2
Total 41.8 0.3 -0.2 32.2 0.3 -0.3
All derivative contracts have been made according to the Eltel Treasury Policy. The Group determines the existence of an economic relationship between the
hedging instrument and hedged item based on the currency, amount and timing of their respective cash ows. The Group has not applied hedge accounting
to any derivative nancial instruments in 2021 or 2020. More information on the nancial risks which are hedged by the derivative nancial instruments are
presented in note 13.
The commercial contracts agreed in a currency which is not a home currency of the seller or the buyer, are classied as embedded derivatives if they meet
the criteria of an embedded derivative according to IFRS 9.
The Group enters into derivatives transactions, other than embedded derivatives, under international Swaps and Derivatives Association (ISDA) master
netting agreements. The ISDA agreements do not meet the criteria for offsetting in the balance sheet. The following table sets out the carrying amount of the
nancial instruments that are subject to above agreements:
EUR thousands
31 Dec 2021 31 Dec 2020
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 259 -28 231 302 -47 255
Financial liabilities
Foreign exchange derivatives -149 28 -121 -47 47 0
74 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Note 18 Commitments and contingent liabilities
Commitments and collateral pledged
EUR million
31 Dec
2021
31 Dec
2020
Pledged assets
Shares in subsidiaries 47.3 62.9
Floating charges 221.8 227.2
Intra-group loan receivables 343.6 341.0
Other pledges 0.1 0.1
Total pledged assets 612.8 631.2
Guarantees
Counter guarantees for external guarantees 85.3 103.5
Commercial guarantees on behalf of third parties 0.1 0.1
Total guarantees 85.4 103.6
At year-end, the pledged assets related mainly to securing the Group’s
liabilities under the Group’s nancing agreement. Securities provided
included the shares in The Infranet Company AB, oating charges and
the pledge of certain intra-group loan receivables. On 17 January 2022
Eltel’s debt was replaced with a new unsecured nance agreement. See
note 34 Events after balance sheet date for more information about the new
nancing agreement.
Counter guarantees for external guarantees consist of performance and
other contract guarantees issued by the banks and insurance companies
on behalf of group companies under the facilities for which the group
companies have given a counter guarantee or other security.
During 2017 the Group divested a company in Estonia and in accordance
with the agreement certain contract guarantees were retained at Eltel.
These guarantees are reported as guarantees given on behalf of third
parties in 2021 and 2020.
Legal claims and investigations
In Tanzania, Gati Masero Buiter t/a Botech Project Management (”Botech”)
has led a statement of claim against Eltel Tanzania Ltd amounting to EUR
4.7 million and a corresponding claim against Eltel Group Oy and Eltel
Networks TE AB in the Tanzanian High Court. The basis of the claim is a
subcontractor agreement entered into between Eltel Tanzania and Botech
in 2013. Botech did not fulll its obligations under the subcontractor agree-
ment and therefore Eltel Tanzania terminated the subcontractor agreement.
Botech claims that the termination was unfounded and claims damages.
Eltel’s legal advisor’s view is that the claim has no substantial merits.
Moreover, Eltel has moved for dismissal of the claim in whole due to that
any claims under or in connection with the subcontractor agreement are
subject to dispute resolution in London under the ICC arbitration rules.
Finally, Eltel Group Oy and Eltel Networks TE AB are not signatories or
active parties in the subcontractor agreement. In September 2017, the
Tanzanian High Court issued an order striking out Eltel Group Oy and Eltel
Networks TE AB from the suit. Hearings in the case have been held and
Botech has concluded its pleading. Eltel will proceed to present its case
during 2022.
Power Transmission International closing matters
The ramp-down of the Power Transmission International (“PTI”) business
operations continues according to plan. As part of the ramp-down activ-
ities some of the local Eltel entities forming part of PTI are involved in tax
proceedings and/or disputes incidental to their business.
Eltel Group Oy has raised claims against Georgian State Electrosystem
on behalf of a consortium consisting of itself and the Indian company EMC
Ltd (EMC Ltd is currently in insolvency proceedings). The claims arise under
a FIDIC contract concluded on 17 June 2015 between the consortium, as
Contractor, and Georgian State Electrosystem, as Employer, concerning
works on the Ksani-Stepantsminda Transmission Line. The contract is gov-
erned by Georgian substantive law and contains a customary FIDIC dispute
resolution clause whereby disputes, as a rule, rst are to be adjudicated by
a Dispute Adjudication Board and only thereafter can be submitted to ICC
arbitration in Paris.
The Dispute Adjudication Board has to date satised claims brought
by the consortium against Georgian State Electrosystem in an amount of
approximately EUR 4.5 million. The consortium has also agged additional
claims of at least EUR 3.5 million, including claims for withheld retention
money as well as claims subject to pending proceedings before the Dispute
Adjudication Board. Georgian State Electrosystem has disputed the
consortium’s claims, including those conrmed by decisions of the Dispute
Adjudication Board, and indicated that it will raise (currently unspecied)
counterclaims.
On 22 December 2021, Eltel Group Oy notied Georgian State
Electrosystem that it would commence ICC arbitration unless the latter
made a signicant part payment of its monetary obligations by 17 January
2022. On 14 January 2022, Georgian State Electrosystem rejected the pay-
ment request.
In management’s opinion, the outcome of this case and the tax proceed-
ings and other disputes incidental to PTI’s business is difcult to predict
but they are not likely to have any material effect on the Group’s nancial
position.
FCCA
On 31 October 2014, the Finnish Competition and Consumer Authority
(FCCA) proposed the imposition of a ne of EUR 35 million on Eltel in the
Finnish Market Court, claiming that Eltel had participated in a compe-
tition law violation relating to Eltel’s power transmission line construction
and planning business in Finland during the period 2004–2011. In relation
to the listing of Eltel on Nasdaq Stockholm in February 2015, the selling
shareholders entered into an agreement under which they contributed EUR
35 million to an escrow account held by Eltel to cover any nes (excluding
costs and damages from third-party claims) payable by Eltel in relation to
the FCCA case. In the event of a nal decision requiring Eltel to pay a ne, the
equivalent amount would be converted into equity from the escrow. On 20
August 2021, the Finnish Supreme Administrative Court issued a decision
by which it dismissed FCCA’s proposal. The decision brings an end to the
proceedings that were opened by the FCCA in 2014. The EUR 35 million has
been released from the escrow account for repayment to the former share-
holders. The matter is thereby resolved.
Nasdaq
On 28 June 2018, Eltel received a letter from Nasdaq Stockholm where
the exchange stated that it intends to request the Nasdaq Stockholm
Disciplinary Committee to decide whether Eltel has breached its obliga-
tions in relation to the Nasdaq Stockholm Rulebook for Issuers. The matter
relates to alleged deciencies in Eltel’s capacity for providing information to
the market during 2016 and 2017. Eltel has responded outlining its reasons
for rejecting any breach. On 8 December 2021 the Nasdaq Stockholm
Disciplinary Committee decided to impose a ne of ve annual fees on Eltel,
about EUR 100,000. The Disciplinary Committee writes in its decision that
there were deciencies in Eltel’s disclosure of inside information during
the years 2016 and 2017, and that Eltel therefore has breached Section
3.1 of the Nasdaq Stockholm Rulebook for Issuers. The matter is thereby
resolved.
Working capital and deferred taxes
ELTEL Annual Report 2021 | 75
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Working capital and
deferred taxes
This section comprises the following notes:
19.
20.
21.
22.
23.
Trade and other receivables
Inventories
Provisions
Trade and other payables
Deferred tax
Note 19 Trade and other receivables
EUR million
31 Dec
2021
31 Dec
2020
Total non-current receivables 0.5 0.4
Current
Trade receivables, gross 104.1 102.2
Contract assets 71.2 85.1
Expected credit loss reservation -2.1 -3.4
Trade receivables and contract assets, net 173.2 183.9
Derivative instruments 0.3 0.3
Income tax receivables 0.2 0.2
Indirect tax receivables 1.1 2.4
Other prepayments and accruals 13.2 10.6
Other receivables 4.4 4.3
Total current trade and other
receivables 192.3 201.7
Fair values of trade and other receivables approximate their carrying
amount due to short maturities. The Group applies the expected credit
losses (ECL) model according to IFRS 9 for impairment of trade receivables
and contract assets. Refer to note 13.3 Credit risk for more information.
During 2021 the Group has sold on non-recourse basis EUR 292.8
million (339.0) of trade receivables to various nancial institutions as part
of vendor nancing solutions and derecognised the amounts from the
balance sheet at the time of receipt of payment. The costs, EUR 0.9 million
(1.0) are included in EBIT.
Note 20 Inventories
EUR million
31 Dec
2021
31 Dec
2020
Raw materials and consumables 6.0 7.1
Work in progress 11.1 5.0
Total 17.2 12.1
Note 21 Provisions
EUR million 31 Dec 2021 31 Dec 2020
Non-current 2.7 2.7
Current 6.0 7.5
Total 8.6 10.2
2021
EUR million
Warranty
provision
Project risk
provision
Other
provisions Total
1 Jan 2.1 6.8 1.3 10.2
Additional provisions 0.6 3.1 0.2 3.9
Used provisions
during year -0.3 -1.7 -0.3 -2.3
Unused amounts
reversed -0.2 -2.6 -0.3 -3.1
Exchange rate
differences 0.0 -0.1 0.0 -0.1
31 Dec 2.2 5.5 1.0 8.6
Non-current provisions consist mainly of warranty provisions and resto-
ration provisions for right-of-use assets. Majority of the non-current
provision for warranties will materialise in two to three years’ time and
the rest in ve to ten years’ time from the balance sheet date. Warranty
provisions which are classied as current will materialise over the next
nancial year. Based on past experience, the outcome of these warranties
will not give rise to any further signicant losses.
Project risk provisions relate mainly to project cost provisions for certain
High Voltage projects in Poland and Power projects in Sweden. Project
risk provisions are based on management estimates of the outcome of the
project and based on facts and circumstances and other information avail-
able at the reporting date, also taking into account any signicant events
after the reporting period. The actual future outcome may deviate from the
estimate. At year-end 2021 other provisions comprise mainly restoration
provisions for right-of-use assets.
Note 22 Trade and other payables
Current
EUR million
31 Dec
2021
31 Dec
2020
Trade payables 71.6 81.3
Other liabilities 13.7 12.9
Derivative financial liabilities 0.2 0.3
Indirect tax liabilities 15.5 14.0
Income tax liabilities 5.2 3.4
Accrued expenses and prepaid income 72.3 85.5
Total current trade and other payables 178.5 197.4
Accrued expenses consist of the following items:
EUR million
31 Dec
2021
31 Dec
2020
Accrued wages and salaries 37.8 40.9
Accrued indirect employee costs 16.1 16.1
Other accruals 18.4 28.5
Total 72.3 85.5
76 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Note 23 Deferred tax
Deferred tax assets and liabilities
EUR million
31 Dec
2021
31 Dec
2020
Deferred tax assets 18.4 19.1
Deferred tax liabilities -10.7 -11.0
Net deferred tax assets 7.7 8.2
The movement on the deferred income tax amount during the year:
EUR million 2021 2020
1 Jan 8.2 14.9
Recognised in the income statement 0.1 -8.0
Recognised in other comprehensive income:
Translation differences 0.1 -0.2
Dened benet plans -0.7 1.3
Hedge accounting -0.1 0.2
31 Dec 7.7 8.2
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 scal authority.
The movement in deferred income tax assets and liabilities without
taking into consideration the offsetting of balances within the same tax
jurisdiction:
Deferred tax assets
EUR million
Retirement
benefit
obligations
Tax losses
carried
forward
Other
temporary
differences Total
1 Jan 2020 3.0 17.0 6.4 26.4
Recognised in the income sta-
tement -0.5 -4.3 -3.3 -8.1
Recognised in other
comprehensive income 1.3 – -0.1 1.2
Translation differences -0.2 0.3 -0.5 -0.3
31 Dec 2020 3.5 13.0 2.6 19.1
Recognised in the income sta-
tement -0.9 – 1.3 0.4
Recognised in other
comprehensive income -0.7 – – -0.7
Translation differences 0.0 -0.1 -0.3 -0.4
31 Dec 2021 1.9 12.9 3.6 18.4
Deferred tax assets are recognised for tax loss carry forwards and tempo-
rary differences to the extent that the realisation of the related tax benet
against future taxable prots is probable. The future taxable prot estimate
is based on current business plans approved by management.
Gross amount of EUR 12.9 million (13.0) deferred tax assets are recog-
nised for losses carried forward, of which EUR 5.9 million (6.0) relates to
operations in Sweden. There were no changes, other than currency impact,
in deferred tax assets for losses carried forward during January-December
2021.
On 31 December 2021 the Group had in its main operational countries a
total of EUR 207.9 million (211.5) tax losses for which no deferred tax asset
was recognised. Of these tax losses EUR 2.4 million (12.1) will expire within
ve years, EUR 0.0 million (10.9) will expire after ve years and EUR 205.5
million (188.5) does not have expiry date.
In 2021 the Swedish government decreased the national corporate
income tax rate from 21.4% to 20.6%.
Deferred tax liabilities
EUR million
Fair value
adjustment
Other
temporary
differences Total
1 Jan 2020 7.2 4.3 11.5
Recognised in the income statement -0.2 0.1 -0.1
Recognised in other comprehensive
income – -0.3 -0.3
Translation differences -0.1 – -0.1
31 Dec 2020 6.8 4.1 11.0
Recognised in the income statement -0.4 0.6 0.2
Recognised in other comprehensive
income – 0.1 0.1
Translation differences -0.7 0.2 -0.6
31 Dec 2021 5.7 4.9 10.7
Business combinations and capital expenditure
ELTEL Annual Report 2021 | 77
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Business combinations and
capital expenditure
This section comprises the following notes:
24.
25.
26.
27.
28.
Acquisitions, divestments and assets held for sale
Non-controlling interests and joint ventures
Intangible assets
Property, plant and equipment
Leasing
Note 24 Acquisitions, divestments and assets held for sale
Acquisitions
During 2021 or 2020, no acquisitions were made.
Divestment of businesses
On 22 March 2021, Eltel signed an agreement to divest its German
high voltage business to ENACO GmbH, a German service provider in
the energy sector. The transaction was completed on 30 April 2021 and
it had a negative cash ow effect of EUR 3.8 million and impact on Group
EBIT of EUR -0.1 million in Q2 2021. Eltel classied its German high voltage
business as assets held for sale at the end of 2020 and the revaluation
had EUR -5.7 million impact on Group EBIT in Q4 2020. Eltel has as part
of the divestment engaged ENACO as a subcontractor for the completion
of certain projects, which are mostly completed during 2021. The German
high voltage business was included in Other business.
During 2020, the following divestments were completed:
On 18 December 2020, Eltel sold its share in the Murphy Eltel JV Limited
in the UK to Murphy Power Networks Limited. The divestment had EUR
-0.7 million impact on Group EBIT in 2020. Murphy Eltel JV Limited was a
joint venture owned 50/50 by Eltel Networks UK Limited and Murphy Power
Networks Limited and was included in Other business. See note 25 for
more information about the joint venture.
On 23 March 2020, Eltel signed an agreement to divest its Swedish
business area Aviation & Security to LFV, Air Navigation Services of
Sweden. The transaction was completed on 30 April 2020. The total consid-
eration of the transaction was EUR 18.2 million, positive cash ow impact
amounted to EUR 18.9 million and sales gain impact was EUR 6.7 million
on Group EBIT in 2020. The Aviation & Security business was included in
segment Sweden.
On 22 January 2020, Eltel signed an agreement to divest its German
communication business to Circet Group. The transaction was completed
on 30 April 2020. The total consideration of the transaction was EUR 19.0
million, positive cash ow impact amounted to EUR 19.0 million and sales
gain impact was EUR 13.7 million on Group EBIT in 2020. The German
communication business was included in Other business.
The divested assets and liabilities at the date of divestment are presented
in the following table:
EUR million 2021 2020
Cash and cash equivalents – 0.3
Other assets 2.7 14.3
Total assets 2.7 14.6
Total liabilities 1.7 10.7
Assets held for sale
On 31 December 2021 there were no assets held for sale. On 31 December
2020, the German high voltage business included in Other business was
presented as assets held for sale. At the same time, the assets were
revalued to fair value less cost to sell. The revaluation had EUR -5.7 million
impact on Group EBIT in 2020.
EUR million
31 Dec
2021
31 Dec
2020
Total assets held for sale – 0.0
Liabilities
Trade and other payables – 3.8
Total liabilities held for sale – 3.8
78 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Note 25 Non-controlling interests and joint ventures
EUR million
Subsidiaries with
non-controlling interest Joint ventures
Summarised statement of balance sheet 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020
Current assets 28.2 25.5 – –
Non-current assets 4.1 4.8 – –
Total assets 32.3 30.2 – –
Current liabilities 11.3 9.6 – –
Non-current liabilities 1.7 1.9 – –
Total liabilities 13.0 11.5 – –
Equity: –
Shareholders’ equity 19.3 18.7 – –
Non-controlling interest 7.7 7.5 – –
Summarised income statement Jan–Dec 2021 Jan–Dec 2020 Jan–Dec 2021 Jan–Dec 2020
Net sales 36.3 39.2 – 2.2
Net result 1.5 1.4 – -0.3
Total comprehensive income 1.5 1.4 – -0.3
Total comprehensive income allocated to non-controlling interests 0.6 0.6 – –
Dividends paid to non-controlling interest -0.4 -0.6 – –
Summarised cash flows Jan–Dec 2021 Jan–Dec 2020 Jan–Dec 2021 Jan–Dec 2020
Cash ow from operating activities 1.7 3.9 – –
Cash flow from investing activities 0.0 0.0 – –
Cash flow from financing activities -1.8 -3.9 – –
% of ownership
1)
60% 60% – –
1)
Eltel’s ownership in Murphy Eltel JV Limited was 50% until the divestment on 18 December 2020.
Non-controlling interest
Eltel Networks Pohjoinen Oy, in Finland, is a subsidiary with anon-controlling
interest of 40%.
Joint ventures
Murphy Eltel JV Limited
Murphy Eltel JV Limited, in the UK, was a joint venture owned 50/50 by Eltel
Networks UK Limited and Murphy Power Networks Limited.
On 18 December 2020, Eltel sold its share in the Murphy Eltel JV Limited
to Murphy Power Networks Limited. At the end of Q3 2020 Eltel classied
its share in Murphy Eltel JV Limited as held for sale. At the same time the
assets in the joint venture were revaluated to fair value less cost to sell. The
revaluation had EUR -0.7 million impact on Group EBIT in Q3 2020. The
completion of the divestment in Q4 2020 did not have any further impact
on Group EBIT.
Reconciliation of changes
in carrying value
Joint ventures
2021 2020
1 Jan – 0.9
Profit/loss for the period – -0.2
Revaluation to fair value less cost to sell – -0.7
31 Dec – –
Business combinations and capital expenditure
ELTEL Annual Report 2021 | 79
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 26 Intangible assets
2021
EUR million Goodwill
Customer
relationship
Order
backlog Brand
Advances
paid
Other
intangible
assets Total
Cost 1 Jan 487.9 136.0 14.3 48.3 0.1 28.8 715.4
Additions – – – – – 0.3 0.3
Disposals – – – – -0.0 -0.0 -0.0
Divestments – – – – – -1.3 -1.3
Reclassication from tangible assets – – – – -0.1 6.4 6.4
Translation differences 0.1 -1.1 -0.2 -0.3 0.0 -0.1 -1.5
Cost 31 Dec 488.1 134.9 14.1 48.0 0.0 34.1 719.2
Accumulated amortisation and impairment 1 Jan 223.0 135.6 14.3 20.8 – 18.5 412.1
Accumulated amortisation of divestments – – – – – -1.2 -1.2
Amortisation during the period – 0.3 – – – 3.1 3.4
Impairment – – – – – 0.2 0.2
Reclassication from tangible assets – – – – – 1.3 1.3
Translation differences – -1.1 -0.2 – – – -1.3
Accumulated amortisation and impairment 31 Dec 223.0 134.8 14.1 20.8 – 21.9 414.5
Carrying value 1 Jan 264.9 0.4 0.0 27.5 0.1 10.3 303.2
Carrying value 31 Dec 265.0 0.1 0.0 27.2 0.0 12.3 304.6
2020
EUR million Goodwill
Customer
relationship
Order
backlog Brand
Advances
paid
Other
intangible
assets Total
Cost 1 Jan 487.1 138.5 14.0 47.8 0.4 28.7 716.5
Additions – – – – 0.1 0.7 0.8
Disposals – – – – – -1.2 -1.2
Transfer to assets held for sale – -3.3 – – – – -3.3
Transfer to other intangible assets – – – – -0.4 0.7 0.3
Translation differences 0.9 0.8 0.2 0.4 – -0.1 2.2
Cost 31 Dec 487.9 136.0 14.3 48.3 0.1 28.8 715.4
Accumulated amortisation and impairment 1 Jan 223.0 136.8 14.1 20.8 – 16.8 411.4
Accumulated amortisation of disposals – – – – – -1.2 -1.2
Accumulated amortisation of transfers to assets held for sale – -2.7 – – – – -2.7
Amortisation during the period – 0.7 – – – 2.5 3.2
Translation differences – 0.8 0.2 – – 0.4 1.4
Accumulated amortisation and impairment 31 Dec 223.0 135.6 14.3 20.8 – 18.5 412.1
Carrying value 1 Jan 264.0 1.7 0.0 27.1 0.4 11.9 305.1
Carrying value 31 Dec 264.9 0.4 0.0 27.5 0.1 10.3 303.2
Value of customer relationship and Eltel brand origin from the acquisition of Eltel’s business. The amortisation of customer relationship is presented in the
income statement line “Selling and administrative expenses”.
The Eltel brand is not amortised, because it has been assessed that it has an indenite useful life. No foreseeable limit to the period over which it is
expected to generate net cash inows for the Group can be seen. Eltel brand is tested for impairment annually together with goodwill.
80 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Allocation of goodwill and brand
Eltel organises its business through Country Units (CU), and two project
based units: High Voltage and Smart Grids Germany. As of 1 January 2021
smart grid operations in each country have been included in the Country
Units. In addition, Eltel has Rail and Power Transmission International
businesses that are being ramped down.
Monitoring and testing of goodwill and brand mirror the way that
management follows operations. The values and pre-tax discount rates
used in valuation are presented in following tables.
Goodwill and brand relating to Rail and Power Transmission International
businesses and High Voltage have been fully impaired in earlier periods and
no value remains for these units.
2021
EUR million Brand Goodwill WACC
Country Unit Finland 8.2 79.7 9.2%
Country Unit Sweden 6.3 60.9 9.3%
Country Unit Norway 8.3 80.5 9.5%
Country Unit Denmark 3.6 34.4 9.1%
Smart Grids Germany 0.9 8.7 9.8%
Other units 0.1 0.9 10.0%
Total 27.3 265.0
2020
EUR million Brand Goodwill WACC
Country Unit Finland 8.0 77.5 9.4%
Country Unit Sweden 6.2 60.0 8.8%
Country Unit Norway 8.1 76.9 9.4%
Country Unit Denmark 3.3 32.3 8.3%
Solution Unit Smart Grids 1.8 17.4 9.2%
Other units 0.1 0.9 10.8%
Total 27.5 264.9
The recoverable amount of above cash generating units (CGUs) is deter-
mined based on value-in-use calculations. These calculations use pre-tax
cash ow projections based on business plans approved by management
covering a ve-year period. Cash ows beyond the ve-year period are
extrapolated using a growth rate of 1.5% (1.5) in average which does not
exceed the long-term average growth rate for the businesses in which the
Group operates.
The key assumptions used for value-in-use calculations are:
1. The sales volumes of the business plan – determined based on past
performance and existing and planned contracts with clients.
2. Protability of the business plan – determined based on previous years
actual protability and the planned actions to increase the protability;
EBITA.
3. Discount rate – determined based on the weighted capital cost of capital
(WACC) which describes the total cost of debt and equity considering
the risks specic to the business.
The pre-tax discount rates used in calculations including risk premium to
reect the current state of macroeconomic uncertainty and risks specic
to the business are presented in above table. Additional temporary risk
component has been included to reect the higher risk level related to
volatility in sales volumes, protability and market changes in recent years.
The annual impairment test conducted for year-end 2021 or 2020
resulted in no impairment. In the 2020 and 2019 annual reports Eltel has
disclosed the goodwill in country unit Sweden being sensitive to impair-
ment in case of negative changes to the estimated future cash ows. Eltel’s
operations in Sweden and the addressable communications market have
declined, mainly due to slowdown in building bre networks and reduction
in maintenance of copper networks. In 2021, good development in smart
metering market within power is visible and management assessment also
shows additional opportunities in the communication market areas, for
example in public infrastructure. At year-end, the recoverable amount for
CGU Sweden exceeds the carrying amount by 27% (18) and use of pre-tax
WACC of 11.3% (10.3) would change the recoverable amount to be equal
to its carrying amount. Management deems that no reasonable possible
changes in future estimates would cause the recoverable amount to fall
below the carrying amount in any other CGU.
Note 27 Property, plant and equipment
2021
EUR million Land Buildings
Machinery
and
equipment Total
Cost 1 Jan 0.1 5.1 73.8 79.0
Additions – 0.1 4.0 4.1
Disposals – -0.1 -3.7 -3.8
Divestments -0.1 -4.2 0.3 -4.0
Reclassications to intangible
assets – – -6.4 -6.4
Translation differences -0.0 -0.0 0.4 0.4
Cost 31 Dec 0.1 0.9 68.4 69.4
Accumulated depreciation 1 Jan 0.0 1.9 57.1 59.0
Accumulated depreciation
of disposals – -0.1 -3.7 -3.8
Accumulated depreciation
of divestments – -1.8 0.4 -1.4
Depreciation during the period – 0.2 4.8 5.0
Impairment – – 0.1 0.1
Reclassications to intangible
assets – – -1.3 -1.3
Translation differences -0.0 -0.0 0.1 0.1
Accumulated depreciation
31 Dec 0.0 0.2 57.5 57.7
Carrying value 1 Jan 0.1 3.2 16.7 20.0
Carrying value 31 Dec 0.0 0.6 11.0 11.6
2020
EUR million Land Buildings
Machinery
and
equipment Total
Cost 1 Jan 0.8 5.6 78.6 85.0
Additions – 0.0 5.2 5.3
Disposals -0.6 -0.2 -2.1 -3.0
Divestment of businesses – 0.0 -0.1 -0.1
Transfer to assets held for sale – 0.0 -5.9 -5.9
Reclassications – – -0.3 -0.3
Translation differences -0.1 -0.2 -1.6 -1.8
Cost 31 Dec 0.1 5.1 73.8 79.0
Accumulated depreciation 1 Jan 0.1 1.9 55.4 57.5
Accumulated depreciation
of disposals -0.1 -0.1 -0.8 -0.9
Accumulated depreciation
of divestment of businesses – – -0.1 -0.1
Depreciation during the period – 0.2 8.0 8.2
Transfer to assets held for sale – – -4.7 -4.7
Impairment – – 0.6 0.6
Translation differences – -0.1 -1.4 -1.5
Accumulated depreciation
31 Dec 0.0 1.9 57.1 59.0
Carrying value 1 Jan 0.7 3.7 23.1 27.5
Carrying value 31 Dec 0.1 3.2 16.7 20.0
Right-of-use assets are not included in property, plant and equipment. See
following note 28 for more information about leases.
Business combinations and capital expenditure
ELTEL Annual Report 2021 | 81
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 28 Leasing
Under IFRS 16 Eltel recognises 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 recognised under nancing 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 2021 2020
Depreciation
Depreciation of right-of-use assets 23.4 26.7
Other operating expenses
Short-term lease expense 2.0 3.1
Expense for leases of low-value assets 2.4 3.6
Financial expenses
Interest expense on lease liabilities 1.6 2.0
Total 29.3 35.4
Right-of-use assets
EUR million Buildings
Machinery and
equipment Total
1 Jan 2020 42.2 35.2 77.4
Additions 4.7 9.0 13.6
Depreciation -10.9 -15.7 -26.6
Transfer to assets held for sale -1.1 -0.2 -1.3
Divestments -2.7 -1.1 -3.8
Translation differences 0.0 0.0 -0.1
31 Dec 2020 32.0 27.2 59.2
Additions 9.7 12.0 21.7
Depreciation -9.3 -14.0 -23.4
Divestments 0.0 -0.0 0.0
Other -1.3 -3.0 -4.3
31 Dec 2021 31.2 22.1 53.3
Leasing liabilities
EUR million Non-current Current Total
1 Jan 2020 64.0 29.1 93.1
Changes during the period -11.7 -0.9 -12.6
Transfer to assets held for sale -1.1 -0.3 -1.4
Divestments -2.5 -1.3 -3.8
31 Dec 2020 39.0 21.8 60.8
Changes during the period -3.2 -3.1 -6.3
Divestments – 0.0 0.0
31 Dec 2021 35.8 18.6 54.5
Maturity analysis of leasing liabilities is presented in note 13.2 Liquidity risk.
In addition, the Group is committed to EUR 0.6 million (1.3) future lease
payments for short-term lease commitments.
82 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Remuneration and other
This section comprises the following notes:
29.
30.
31.
32.
33.
34.
Remuneration to senior executives
Retirement benet obligations
Auditors’ fees
Related party information
Group companies
Events after balance sheet date
Note 29 Remuneration to senior executives
Number of key executives
31 Dec
2021
31 Dec
2020
Board of Directors
Men 4 4
Women 1 1
Other key executives
Men 6 6
Women 2 2
Total 13 13
Guidelines for remuneration to senior executives
The Annual General Meeting on 4 May 2020 approved the guidelines for
remuneration to senior executives covering the Board of Directors, the
CEO, the Deputy CEO and other senior executives (the Group Management
Team). Information regarding the guidelines is presented in Board of Direc-
tors’ report, page 32-40.
Compensation to key executives 2021
EUR thousands Fee
Fixed
salary
Annual
variable salary
Long-term
variable salary Pension
Other
benefits Total
Ulf Mattsson 116 – – – – – 116
Roland Sundén 51 – – – – – 51
Gunilla Fransson 49 – – – – – 49
Håkan Dahlström 46 – – – – – 46
Joakim Olsson 43 – – – – – 43
Casimir Lindholm – 623 259 51 174 0 1,108
Other senior executives (7 individuals) – 1,670 492 16 308 59 2,545
Variable salary, other remuneration and pensions refer to amounts that were recorded as expense according to IFRS. The long-term variable salary refers to
provisions made for the LTIP 2018 and LTIP 2021 programmes.
Remuneration and other
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Salaries, remuneration and benets
Salaries and other remuneration to Board of Directors and senior execu-
tives excluding pensions and other benets amounted to EUR 3.4 million
(4.4) of which the xed salaries amounted to EUR 2.6 million (3.1) including
fees to Board of Directors of EUR 0.3 million (0.3). Out of this, variable
salaries including provisions for LTIP 2018 and LTIP 2021 amounted to EUR
0.8 million (1.3). The dened contribution pension plans for senior exec-
utives amounted to EUR 0.5 million (0.6) and the amount of other indirect
employee costs for senior executives amounted to EUR 0.3 million (0.4).
The annual variable salary component is based on predetermined and
measurable nancial and individual targets. The criteria are recommended
by the Remuneration Committee and ultimately determined by the Board of
Directors. The CEO has an 80% variable salary maximum outcome com-
ponent and the remaining members of GMT have a 60% variable salary
maximum outcome component.
In February 2020, 11 senior executives and key employees were offered
a retention bonus scheme amounting to 50% of maximum STI potential
for the relevant employee to be guaranteed for the years 2020 and 2021,
respectively. The guarantee amount is calculated as the difference
between 50% of the max STI potential for 2020 and 2021 and the accumu-
lated actual bonus payouts for 2020 and 2021. The retention bonus scheme
requires that the employee has not given notice and still is employed on 31
December 2021.
The pension terms of the CEO and other senior executives in the Group
Management Team (GMT) are market-based in relation to terms that
generally apply to comparable executives and reect the applicable laws
and established practices in different countries.
The CEO has a notice period of twelve months in case of termination from
the company and twelve months in the event of his resignation. The notice
period for other senior executives is twelve months in case of termination
from the company and six months in the event of their own resignation.
The CEO is also entitled to a severance pay equivalent to 12 months base
salary. The retirement age of the CEO is 62 years.
Long-term incentive programmes
LTIP 2018
The Extraordinary General Meeting (EGM) in September 2018 approved the
implementation of a share saving programme 2018 (the “LTIP 2018”) for key
personnel in the Eltel Group. The term of LTIP 2018 is three years and the
maximum number of participants is eight consisting the CEO, CFO and a
maximum of six individuals within the Group Management Team. The EGM
approved the proposal to hedge obligations related to the LTIP 2018 via
equity swap agreement with a third party.
The aim of the programmes is to increase and strengthen the potential
for recruiting, retaining and rewarding key individuals and furthermore to
use the LTIP programme to create individual long-term ownership of Eltel
shares among participants.
Participation in the LTIP programmes assumes that the participant
acquires and locks Eltel ordinary shares into the LTIP programme (“Savings
Shares”). For each acquired Savings Share, the participant is entitled, after
a certain qualication period and provided continued employment through-
out the entire period, to receive allotment of one Eltel matching/retention
share (a “Matching Share”). Depending on fullment of performance tar-
gets linked to Eltel’s earnings per share, the participant may also be entitled
to receive allotment of additional Eltel shares (”Performance Shares”).
Participants do not pay any consideration for the allotted Matching Shares
and Performance Shares. Matching Shares and Performance Shares are
Eltel ordinary shares.
The maximum number of Savings Shares for each participant is to be
based on an investment in Eltel shares with an amount corresponding to
a certain portion of the concerned participant’s base salary level for the
current year. The Savings Shares covered by the LTIP programme were
acquired in a structured way in ordinary trading in the stock market during
a certain period of time.
On balance sheet date, the LTIP 2018 comprises maximum 85,664
matching shares (94,728 in 2020), corresponding to approximately 0.1%
of the total outstanding shares and votes in the Company. Change in the
number of maximum matching shares, -9,064, derives from a change in the
number of participants in the programme.
Allotment of Matching Shares and Performance Shares within LTIP 2018
will be made during a limited period of time following presentation of the
rst quarterly statement 2022. The performance targets are Eltel’s EBITDA
for the nancial year 2021 and the performance targets shall be established
by the Board. Partial fullment of the performance targets will result in
partial allotment of Performance Shares. Performance under a certain level
will result in no allotment
Compensation to key executives 2020
EUR thousands Fee
Fixed
salary
Annual
variable salary
Long-term
variable salary Pension
Other
benefits Total
Ulf Mattsson 114 – – – – – 114
Håkan Dahlström 47 – – – – – 47
Roland Sundén 47 – – – – – 47
Gunilla Fransson 43 – – – – – 43
Joakim Olsson 41 – – – – – 41
Ulf Lundahl
1)
14 – – – – – 14
Markku Moilanen
1)
14 – – – – – 14
Hans von Uthmann
1)
14 – – – – – 14
Mikael Aro 14 – – – – – 14
Casimir Lindholm – 625 424 39 219 0 1,309
Other senior executives (10 individuals) – 2,171 838 4 349 77 3,440
1)
Until May 2020
Variable salary, other remuneration and pensions refer to amounts that were recorded as expense according to IFRS. The long-term variable salary refers to
provisions made for the LTIP 2018 programme.
LTIP 2018 programme is directed towards three categories of participants:
Category
Savings Shares
maximum
(% of base salary)
Matching
Shares per
Savings Share
Performance
Shares per
Savings Share
A CEO 25% 1.0× 4.0×
B CFO 20% 1.0× 3.0×
C Group Management
Team
1)
15% 1.0× 3.0×
1)
Maximum 6 persons.
84 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
LTIP 2021
Eltel AB’s Annual General Meeting 2021 adopted a long-term incentive
program (LTIP 2021) for senior executives and other key individuals in
order to encourage a personal long-term ownership in the company, and
in order to increase and strengthen the potential for recruiting, retaining
and motivating such senior executives and key individuals. The participants
are based in Sweden and other countries where the Eltel Group is active.
Participation in the LTIP 2021 assumes that the participant acquires and
locks Eltel Shares into LTIP 2021 (“Savings Shares”). Savings Shares shall
be newly acquired Eltel Shares.
Participants will, after a qualifying period and assuming an investment of
their own in Eltel Shares, be given the opportunity to, without consideration,
receive allotments of Eltel Shares (dened below) and call options issued
by the company. The number of allotted Eltel Shares and call options will
depend on the number of Eltel Shares that they have purchased themselves
and on the fullment of certain performance requirements. Eltel Shares are
ordinary shares in the company (“Eltel Shares”). The term of LTIP 2021 is
more than three years.
For each acquired Savings Share, the participant shall be entitled to,
after a certain qualication period (dened below), provided continued
employment and dependent on the fullment of certain performance
requirements for the nancial years 2021-2023, receive allotment of Eltel
Shares (”Performance Shares”) and call options issued by the company
(“Performance Options”).
The performance requirements are linked to the company’s Compound
Annual Growth Rate of Revenue (“CAGR of Revenue”), Average Earnings
Margin Before Interest, Taxes and Amortisation (“Average EBITA Margin”)
and Total Shareholder Return (“TSR”). The participant shall not pay any
consideration for the allotted Performance Shares and Performance
Options. Performance Shares are Eltel Shares and Performance Options
are call options issued by the company.
The exercise price when the participant exercises the Performance
Option shall correspond to 120 percent of the volume-weighted average
price according to Nasdaq Stockholm’s ofcial price list for the Eltel
Share during the rst ten trading days that directly follows the Annual
General Meeting 2021 (the “Purchase Price”). Customary recalculation
of the Purchase Price as well as of the number of Eltel Shares that each
Performance Option corresponds to may occur if the share capital or the
number of shares in the company changes due to bonus issue, split or
reverse split, redemption of shares, certain new issues and other similar
corporate events, and if certain other measures are taken.
To be eligible to participate in LTIP 2021, the participant must invest in
Savings Shares for an amount corresponding to approximately ve percent
of the participant’s xed base salary for the current year, however, not
exceeding the number of Savings Shares that the participant can tie up
within the scope of LTIP 2021 according to the above.
The Savings Shares covered by the LTIP 2021 were acquired in a struc-
tured way in ordinary trading in the stock market during a certain period of
time.
On balance sheet date, the LTIP 2021 comprises maximum 388,800
performance shares and 388,800 performance options, corresponding to
approximately 0.5% of the total outstanding shares and votes in the Com-
pany.
Allotment of Performance Shares and Performance Options within LTIP
2021 will be made during a limited period of time following the latter of the
date of (i) the presentation of the rst quarterly report for the rst quarter
of 2024, and (ii) the rst record date for dividends decided by the Annual
General Meeting 2024. The period up to this date is referred to as the
qualication period (vesting period).
Costs for the LTIP programmes
In accordance with IFRS 2, the estimated total expenses for the LTIP 2018
and LTIP 2021 programmes amounted to EUR 206 thousand (241), of
which EUR 206 thousand (213) for the President and CEO and other senior
executives. Total expense for the year was EUR 60 thousand (46), of which
EUR 73 thousand (43) for the President and CEO and other senior executives.
The employee matching shares and performance shares are expensed
as an employee expense over the vesting period and are recognised directly
against equity. Expenses for the shares do not affect the company’s cash
ow. Related social costs are expensed during the vesting period based on
the change in value of the Eltel AB’s share.
LTIP 2021 programme is directed towards three categories of participants:
Category
Savings Shares
maximum
per person
Performance
Shares per
Savings Share
Performance
Options per
Savings Share
A CEO 11,500 8.0× 8.0×
B Group Management
Team
1)
3,700 8.0× 8.0×
C Other key individuals
2)
2,800 8.0× 8.0×
1)
Maximum 7 persons.
2)
Maximum 4 persons.
Remuneration and other
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 30 Retirement benet obligations
The majority of employees in the Group are included in dened contribution
pension plans and largest dened contribution liability is in Denmark. Some
countries also have dened benet plans, largest one being in Sweden,
where the plan has been closed for any new earnings at year end 2007.
Benets earned since then are covered by premiums paid to Alecta. There
are also smaller voluntary pension plans in Finland that are accounted for
as dened benet plans.
Pension liabilities in the balance sheet
EUR million
31 Dec
2021
31 Dec
2020
Dened benet pension liability 9.0 16.7
Dened contribution pension liability 5.3 0.7
Net pension liability 14.4 17.4
Defined pension liabilities in the balance sheet
EUR million
31 Dec
2021
31 Dec
2020
Present value of funded obligations 90.4 97.6
Fair value of plan assets -81.4 -80.9
Net liability 9.0 16.7
The movement in the fair value of plan assets
EUR million 2021 2020
Fair value of assets 1 Jan 80.9 82.9
Interest on plan assets 0.6 0.9
Remeasurement of plan assets 2.6 -4.9
Contributions by employer 0.1 0.1
Benets paid -0.9 -0.8
Gains and losses on curtailments and settlements -0.6 –
Translation differences -1.3 2.7
Fair value of assets 31 Dec 81.4 80.9
The movement in the dened benet obligations
EUR million 2021 2020
Total obligations 1 Jan 97.6 97.1
Current service cost -0.7 -0.7
Interest cost 0.7 1.1
Remeasurement of pension obligation -0.7 1.1
Benets paid -4.2 -4.1
Gains and losses on curtailments and settlements -0.6 –
Translation differences -1.6 3.1
Total obligations 31 Dec 90.4 97.6
The amounts recognised in the income statement
and other comprehensive income
EUR million 2021 2020
Current service cost -0.7 -0.7
Net interest cost 0.1 0.1
Sum recognised in the income statement -0.7 -0.6
Remeasurements recognised in
other comprehensive income:
Financial assumptions -0.7 1.5
Experience adjustments -2.5 4.5
Total pension charges recognised
during the period -3.9 5.5
Maturity profile of future gross benefit payments
EUR million 2021 2020
Less than 1 year 4.3 4.2
1–5 years 17.1 17.1
5–10 years 20.0 19.8
10–20 years 34.3 33.4
20–30 years 21.3 20.3
Over 30 years 11.1 10.3
Total 108.1 105.1
The maturity prole amounts are undiscounted amounts and have
increased mainly due to ination. Comparative year gures have been
updated to include ination. Special salary tax is excluded. The maturity
prole of future gross benet payments does not represent the expected
contribution payments, as it excludes the impact of plan assets. The
expected contributions to the plan for 2022 are EUR 3.5 million.
The principal actuarial assumptions 2021 2020
Discount rate, %
Sweden 1.55 0.80
Finland 0.70 0.50
Future salary increase expectation, %
Sweden closed plan closed plan
Finland 3.10 2.20
Inflation rate, %
Sweden 2.10 1.50
Finland 1.90 1.00
The pension plan in Sweden forms 80% of the Groups total obligations and
82% of the net obligations. The plan is sensitive to changes in discount
rate and ination. An increase of 0.5% in discount rate would reduce the
obligation in Sweden by EUR 5.6 million. Similar rise in ination rate would
have the opposite effect and increase the obligation by EUR 6.0 million. If
the discount rate was decreased by 0.5% the obligation would increase by
EUR 6.2 million whilst similar decrease in the ination rate would reduce the
obligation by EUR 5.6 million.
Retirement pension and family pension obligations for salaried
employees in Sweden are secured through pension insurance with Alecta.
According to a statement issued by the Swedish Financial reporting Board
(UFR 10), this constitutes a multi-employer plan. For the 2021 and 2020
scal years, the company did not have access to such information that
would enable the company to record this plan as a dened benet plan.
Consequently, the ITP pension plan secured through insurance with Alecta
is recorded as a dened contribution plan. The contribution to the plan
is determined based on the age, salary and previously earned pension
benets of the plan participants. The company has an insignicant part in
the plan.
The collective consolidation ratio reects the market value of Alecta’s
assets as a percentage of insurance obligations, calculated in accord-
ance with Alecta’s actuarial assumptions, which do not correspond with
IAS 19. The collective solvency is normally allowed to vary between 125%
and 175%. If the level of collective solvency is less than 125% or exceeds
175%, measures are to be taken in order to create conditions for restor-
ing the level of collective solvency to the normal interval. Alecta’s surplus
can be distributed to the policyholders and/or the insured if the collective
consolidation ratio exceeds 175%. However, Alecta aims to avoid surplus
by using reduced contributions. On 31 December 2021, Alecta’s surplus
corresponded to a collective consolidation ratio of 172% (148%).
The distribution of plan assets in Sweden is as follows:
% 2021 2020
Debt instruments 69 86
Equity instruments 29 13
Cash and cash equivalents 2 1
Total 100 100
86 | ELTEL Annual Report 2021
Notes to the consolidated nancial statements
Note 31 Auditors’ fees
EUR million 2021 2020
Main auditor
Audit 0.7 0.9
Other services 0.1 0.0
Total 0.8 0.9
Other auditing firms
Other services 0.3 0.2
Total 0.3 0.2
Total 1.2 1.2
The main auditor of the Group in 2021 and 2020 has been KPMG.
Note 32 Related party information
Eltel’s related parties include the parent company Eltel AB and its sub-
sidiaries and jointly controlled entities. Related parties include also the
members of the Board of Directors, the CEO and other management team
members. In addition, signicant unusual transactions with shareholders
are included in related party transactions.
In 2021 the related party transactions are conducted in the ordinary
course of business of the Group. No signicant unusual transactions, other
than described below, have taken place between Eltel and related parties
during the year.
Transactions with shareholders
Upon completion of the IPO in February 2015, the Selling Shareholders,
including 3i, BNP Paribas and management shareholders, lent EUR 35
million on an interest-free basis to cover potential nes payable by Eltel
in connection with the FCCA Case. Upon completion of the FCCA case in
August 2021, EUR 35 million has been released from an escrow account for
repayment to the former shareholders of Eltel’s share. See note 18 Legal
claims and investigations for more information on the FCCA case.
Transactions with key individuals in executive positions
Salaries, remuneration and other benets are accounted for in note 5 Employee
benet expenses and note 29 Remuneration to senior executives.
The Group has not issued any loans to the persons classied as related
party on 31 December 2021 or 31 December 2020.
Transactions with related party companies
List of group companies and jointly controlled entities is presented in note
33. Transactions between Group companies are eliminated in the consoli-
dated nancial statements. Transactions with jointly controlled entities are
reported in note 25.
Note 33 Group companies
31 Dec 2021 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 Infranet GmbH Germany 100%
Eltel Infranet Production GmbH Germany 100%
Eltel Networks GmbH Germany 100%
Eltel Comm Philippines Inc Philippines 100%
Transmast Philippines, Inc. Philippines 40%
1)
Eltel Tanzania Limited Tanzania 100%
Jointly controlled entities
Fiber og Anlaeg I/S Denmark 35%
1)
Group voting 100%.
During the nancial year 2021 Transmission Eltel Limited in Zambia was
liquidated and the name of Energoproject-Krakow S.A. was changed to
Eltel Networks Engineering S.A.
Eltel Networks UK Limited is exempt from statutory audit in accordance
with the Company’s Act Section 479 A.
Remuneration and other
ELTEL Annual Report 2021 | 87
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 34 Events after balance sheet date
New nancing agreement
On 17 January 2022, Eltel completed a new, unsecured nancing
agreement with banks, comprising a EUR 35.0 million term loan (maturity
2+1 years) and a EUR 90.0 million revolving credit facility (maturity 3+1+1
years). The new credit facilities have covenants pertaining to leverage
ratio and gearing. The Group has guarantee facilities with the banks and
insurance companies on bilateral basis. Account overdrafts amount to EUR
15.0 million in total.
Upon utilisation of the new term loan, the previous term loans were
repaid, and the former nancing agreements were terminated.
EUR million 17 Jan 2022 Maturity
Term loan, non-current 35.0
Jan 2024 (+extension
option until Jan 2025)
Revolving credit facility 90.0
Jan 2025 (+extension
option until Jan 2027)
Account overdrafts 15.0 Annual renewals
Total committed credit facilities 140.0
Commercial paper programme 150.0 N/A
Håkan Dahlström appointed new President and CEO of Eltel
Eltel’s Board of Directors appointed Håkan Dahlström as the new President
and CEO of Eltel AB effective 1 September 2022. Håkan is currently serving
as the CEO of Fujitsu Sweden. Prior to that, Håkan has held several execu-
tive positions at TietoEvry and Telia Group. He is also a member of the Eltel
Board of Directors since 2017. Håkan will succeed Casimir Lindholm, who
will remain in his position until Håkan joins Eltel.
Russia’s invasion of Ukraine
On 24 February 2022, Russia invaded Ukraine. The situation has caused
uncertainty and the future is unpredictable. There is a risk that the situation
will affect ination and the markets relevant to Eltel’s business. Operations
in the nearby areas, such as Poland, may be particularly impacted,
especially if the conict is prolonged.
Parent Company
nancial statements
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Income statement
Statement of comprehensive income
EUR thousands Note Jan–Dec 2021 Jan–Dec 2020
Net sales 4 2,177 2,559
Personnel costs 5 -1,754 -2,071
Other operating expenses -5,188 -6,374
Total operating expenses -6,942 -8,445
Operating result -4,765 -5,886
Interest and other nancial income 22,099 23,043
Interest and other nancial expense -3,247 -3,936
Financial items, net 7 18,852 19,107
Result after financial items 14,086 13,221
Appropriations
Group contribution given 13 -14,000 -12,000
Result before tax 86 1,221
Tax for the year 8 – -353
Net result for the year 86 868
EUR thousands Note Jan–Dec 2021 Jan–Dec 2020
Net result for the year 86 868
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss
Cash ow hedges – 49
Taxes attributable to items that may be subsequently reclassied to prot and loss 8 – -10
Total comprehensive income/loss for the period 86 907
90 | ELTEL Annual Report 2021
Parent company nancial statements
Balance sheet
EUR thousands Note 31 Dec 2021 31 Dec 2020
ASSETS
Non-current assets
Financial assets
Shares in group companies 9 68,308 68,308
Long-term loans receivable from group companies 10 503,162 493,301
Intangible assets 60 102
Total non-current assets 571,531 561,711
Current assets
Receivables from group companies 10 1,063 1,796
Other receivables 370 299
Cash pool receivables 10 10 174
Other nancial assets 10 – 35,000
Cash and cash equivalents 105 85
Total current assets 1,548 37,354
TOTAL ASSETS 573,080 599,065
EQUITY AND LIABILITIES
Restricted equity
Share capital 158,839 158,839
Statutory reserve 453 453
Total restricted equity 159,292 159,292
Non-restricted equity
Retained earnings 285,803 284,878
Net result for the year 86 868
Total non-restricted equity 285,889 285,745
Total equity 11 445,180 445,036
LIABILITIES
Current liabilities
Debt 12 72,476 52,179
Liabilities to shareholders 12 – 35,000
Liabilities to group companies 13 54,267 65,651
Trade and other payables 14 1,156 1,198
Total current liabilities 127,899 154,028
Total liabilities 127,899 154,028
TOTAL EQUITY AND LIABILITIES 573,080 599,065
ELTEL Annual Report 2021 | 91
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Changes in equity
EUR thousands
Share
capital
Statutory
reserve
Non-restricted
equity
Total
equity
1 Jan 2021 158,839 453 285,745 445,036
Net prot for the period – – 86 86
Total comprehensive income/loss – – 86 86
Transactions with owners
1)
Equity-settled share-based payment – – 58 58
Total transactions with owners – – 58 58
31 Dec 2021 158,839 453 285,889 445,180
1 Jan 2020 158,839 453 284,800 444,091
Net prot for the period – – 868 868
Other comprehensive income – – 39 39
Total comprehensive income/loss – – 907 907
Transactions with owners
1)
Equity-settled share-based payment – – 40 40
Total transactions with owners – – 40 40
31 Dec 2020 158,839 453 285,745 445,036
1)
For more information about equity-settled share-based payments see note 29 Remuneration to senior executives in the consolidated nancial statements and for share transactions
see note 11 Equity and share capital.
92 | ELTEL Annual Report 2021
Parent company nancial statements
Cash ow statement
EUR thousands Note Jan–Dec 2021 Jan–Dec 2020
Cash flow from operating activities
Prot/loss before taxes 86 1,221
Adjustments for:
Depreciation 51 34
Equity-settled share-based payment 58 40
Group contribution given 13 14,000 12,000
Financial items, net 7 -18,852 -19,107
Changes in working capital:
Trade and other receivables 634 -695
Trade and other payables -1,426 1,719
Cash flow from operating activities before financial items and taxes -5,448 -4,788
Financial income received 7,237 6,914
Financial expenses paid -2,718 -3,020
Cash flow from operating activities -929 -894
Cash flow from investing activities
Payments received from loans from group companies 4,973 4,817
Purchases of property, plant and equipment (PPE) -8 -69
Cash flow from investing activities 4,965 4,748
Cash flow from financing activities
Proceeds from short-term borrowings 31,000 21,500
Payments of short-term borrowings -11,000 -58,000
Proceeds from other nancial assets 35,000 –
Payments of liabilities to shareholders -35,000 –
Proceeds from short-term borrowings from group companies -12,016 43,771
Payments of group contributions -12,000 -11,300
Cash flow from financing activities -4,016 -4,029
Decrease/increase in cash and cash equivalents 20 -175
Cash and cash equivalents at beginning of year 85 260
Cash and cash equivalents at end of year 105 85
ELTEL Annual Report 2021 | 93
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Notes to the Parent Company
nancial statements
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 anarm’s length basis. Additional general information about the Parent
Company can be found in note 1 Corporate information in the consolidated
nancial 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 International Financial Reporting Standards (IFRS) 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 Accounting policies for the consolidated accounts in the
consolidated nancial statements 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 gures in the Parent Company nancial statements are presented in
thousands of Euro unless otherwise stated.
Notes to the Parent Company nancial statements
1 General information 93
2 Accounting principles 93
3 Financial risk management 93
4 Net sales 93
5 Employee benet expenses 94
6 Auditors’ fees 94
7 Result from nancial items 94
8 Taxes 94
9 Shares in group companies 94
10 Receivables from related parties 95
11 Equity and share capital 95
12 Liabilities 95
13 Liabilities to group companies 95
14 Trade and other payables 95
15 Contingent liabilities and pledged assets 95
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 acqui-
sition. Dividend amounts exceeding these returns are considered as repay-
ments 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 nancial statements
also applies to the Parent Company with the exception of nancial
guarantees. The Parent Company applies the rule permitted by the
Swedish Financial Reporting Board to the reporting of nancial guarantee
agreements issued for the benet of subsidiaries, associated companies
and joint ventures. The Parent Company recognises nancial 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 nancial instruments are comprised of long-term receiv-
ables from Group companies, other nancial assets, current receivables
from Group companies and also cash and cash equivalents. These make
up the category nancial assets at amortised cost. Financial instruments
are also comprised of long-term borrowing and liabilities to shareholders,
short-term liabilities to group companies, accounts payable and other
liabilities. These comprise the category nancial liabilities at amortised cost.
Group contributions
The Company has chosen to apply the alternative rule in accordance
with RFR 2, which means that all group contributions are recognised in
appropriations.
Note 3 Financial risk management
The Group applies common risk management for all units. Hence, the
description in note 13 Financial risk management in the consolidated
nancial statements applies to the Parent Company as well in all material
aspects.
Note 4 Net sales
EUR thousands 2021 2020
Remunerations from group companies
for group-wide administration 2,177 2,559
Total 2,177 2,559
94 | ELTEL Annual Report 2021
Notes to the parent company nancial statements
Note 5 Employee benet expenses
EUR thousands 2021 2020
Salaries and other remunerations 1,124 1,588
Social security contributions:
Pension costs 172 18
Other social security contributions 458 465
Total 1,754 2,071
2021 2020
Average number of employees 5 5
Of whom men 22% 24%
Salaries and other remunerations to senior executives were EUR 0.5 million
(0.5), pension costs EUR 0.1 million (0.1) and other social security contri-
butions EUR 0.2 million (0.2). In addition, salary and other remunerations
including social costs to the President and CEO, who is employed by other
group company, were EUR 1.1 million (1.3). Group senior executives partici-
pate in the long-term share-based incentive programmes LTIP 2018 and LTIP
2021. Total expense for the LTIP 2018 and LTIP 2021 programmes for the year
was EUR 70 thousand (40), of which EUR 68 thousand (40) for the President
and CEO and other senior executives. More information of Group senior
executives and the Board of Directors is presented in note 5 Employee benet
expenses and 32 Related party information in the consolidated nancial
statements.
In Eltel AB the number of individuals in the Board of Directors was ve in
2021 and 2020 and the number of other senior executives employed by the
company was two in 2021 and 2020.
Note 6 Auditors’ fees
EUR thousands 2021 2020
Main auditor
Audit assignments 133 147
Tax assignments 5 5
Other auditing rms
Other assignments 108 187
The company in total 246 339
Main auditor in 2021 and 2020 has been KPMG.
Note 7 Result from nancial items
EUR thousands 2021 2020
Interest and other nancial income
Interest income, loans from group companies 21,889 22,612
Other nancial income – 49
Other nancial income, group companies 210 381
Total 22,099 23,042
Interest and other nancial expenses
Interest expenses -2,558 -1,967
Interest expenses, group companies -242 -276
Expected credit loss write-down on internal loans
receivable -27 -1,356
Other nancial expenses -419 -336
Total -3,247 -3,936
Total nancial items 18,852 19,107
Note 8 Taxes
EUR thousands 2021 2020
Income taxes
Result before tax 86 1,221
Tax calculated at Swedish tax rate 18 261
Expenses not deductible for tax purposes 48 336
Tax effect of results for which no deferred income
tax was recognised -66 -255
Non-valuated temporary differences – 10
Income taxes in the income statement – 353
EUR thousands 2021 2020
Deferred tax assets
1 Jan – 363
Recognised in the income statement – -353
Recognised in other comprehensive income – -10
31 Dec – –
Eltel AB has not recognised deferred tax assets for losses carried forward.
The Group’s estimate for utilising losses carried forward in Sweden covers
Eltel AB and all Swedish subsidiaries as group contribution and interest off-
setting is utilised in taxation between the entities. The amount of deferred
tax assets for losses carried forward in Sweden is reported in note 23 in the
consolidated nancial statements and reported in companies where Eltel
estimates to utilise the losses.
Note 9 Shares in group companies
EUR thousands 2021 2020
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
Share of equity, % 100
Share of voting power, % 100
Number of shares 11,000
Book value 68,308
ELTEL Annual Report 2021 | 95
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 10 Receivables from related parties
Non-current receivables
EUR thousands
31 Dec
2021
31 Dec
2020
Loans from group companies 503,162 493,301
Total 503,162 493,301
Current receivables
EUR thousands
31 Dec
2021
31 Dec
2020
Other nancial assets,
received from shareholders
1)
– 35,000
Cash pool receivable 10 174
Accounts receivable 1,063 1,796
Total 1,073 36,970
1)
Shareholders refers to selling shareholders at the time of the listing on 6 February 2015.
Following the closing of the FCCA case in Eltel’s favour in August 2021, EUR 35.0 million
has been released from an escrow account for repayment to the former shareholders.
See also Legal claims and investigations in note 18 in the consolidated nancial
statements.
Interest resulting from loans to group companies is capitalised annually.
Capitalised 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 2021, a write-down of 27 thousand euro (1,356) has been recognised in
the credit loss reserve of long-term loans receivable. For more information
about the ECL model, please refer to note 13 in the consolidated nancial
statements.
Note 11 Equity and share capital
During 2021 there were no changes in shares or share capital. The total
number of shares amounted to 157,499,081 divided into 156,649,081
ordinary shares with 1 vote per share and 850,000 C shares with 1/10
vote per share. On 31 December 2021 the share capital amounted to EUR
158,839 thousand.
The 850,000 redeemable and convertible class C shares were issued
based on the authorisation given to the Board by the Extraordinary General
Meeting on 17 September 2018. The purpose of the issue of class C shares
is to use the shares in Eltel’s long-term incentive programme LTIP 2018.
In connection with the issue, the shares were repurchased by Eltel. Eltel
holds the shares at 31 December 2021 and will hold the shares until it is
time to deliver shares to the participants of LTIP 2018. Prior to delivery of
the shares to participants, the class C shares will be converted to ordinary
shares.
A specication 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 2021 are
Solero Luxco S.á.r.l. (a company controlled by Triton Funds) with 16.4% and
Wipunen Varainhallinta Oy with 13.5% of ordinary shares. More information
about Eltel’s shareholders is found in “The Eltel Share” on pages 102-103.
The Board’s proposal for the distribution of prots
The Parent Company’s non-restricted equity on 31 December 2021 was
EUR 285,888,692.39 of which the net prot for the year was EUR 86,224.27.
The Board of Directors proposes to the Annual General Meeting that no
dividend be paid for the year 2021 and that the non-restricted equity of EUR
285,888,692.39 be retained and carried forward.
Note 12 Liabilities
EUR thousands
31 Dec
2021
31 Dec
2020
Non-current liabilities – –
Current liabilities
Bank borrowings 72,476 52,179
Liabilities to shareholders
1)
– 35,000
Total liabilities 72,476 87,179
1)
Refers to the FCCA case that was closed in Q3 2021. See also Legal claims and investi-
gations in note 18 in the consolidated nancial statements.
Note 13 Liabilities to group companies
EUR thousands
31 Dec
2021
31 Dec
2020
Cash pool payable 38,981 51,162
Accounts payable 1,286 2,490
Group contribution liabilities 14,000 12,000
Total 54,267 65,651
Note 14 Trade and other payables
EUR thousands
31 Dec
2021
31 Dec
2020
Trade payables 287 81
Accrued employee related expenses 252 423
Other short-term liabilities 511 578
Other accrued expenses 106 117
Total 1,156 1,198
Note 15 Contingent liabilities and pledged assets
Contingent liabilities
EUR thousands
31 Dec
2021
31 Dec
2020
Commercial guarantees on behalf of subsidiaries 108,723 131,132
Commercial guarantees on behalf of other parties 113 122
Total guarantees 108,836 131,254
Pledged assets
EUR thousands
31 Dec
2021
31 Dec
2020
Pledged subsidiary shares 68,308 68,308
Pledged other assets 343,623 340,974
Total pledged assets 411,931 409,282
At year-end, Eltel has secured its debt obligations towards the banks by
share and intragroup loan pledges and oating charges over certain assets
of the Group, all on customary terms and conditions. In January 2022
Eltel’s debt was replaced with new unsecured nance agreement. For more
information about the new nancing agreement, please refer to note 34 in
the consolidated nancial statements.
96 | ELTEL Annual Report 2021
Signatures
The Company’s nancial statement will
be submitted for approval to the Annual
General Meeting on 11 May 2022
The Board of Directors certies that the annual nancial 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
prot or loss of the Company and the Group; and that the
management report for the Company and for the Group gives a
fair review of the development and performance of the business,
position and prot or loss of the Company and the Group;
and describes the principal risks and uncertainties that the
Company and the companies in the Group face.
Stockholm 28 March 2022
Our audit report was submitted on 29 March 2022
KPMG AB
Fredrik Westin
Authorized Public Accountant
Ulf Mattsson
Chairman of the Board of Directors
Joakim Olsson
Board member
Stefan Söderholm
Board member
Håkan Dahlström
Board member
Roland Sundén
Board member
Casimir Lindholm
President and CEO
Gunilla Fransson
Board member
Björn Ekblom
Board member
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 fullled over time. It also means that
revenues are being recognized over time (successively), where progress
is measured in relation to the complete fulllment of Eltel’s performance
obligations.
The projects’ results (“prot calculation”) are therefore also reported
successively, in relation to the degree/percentage of completion of each
project. The percentage 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 signicant
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.
Revenue and prot calculation of projects
See disclosure 3 and accounting principles on pages 57-58 in the annual account and consolidated accounts for detailed information and description
of the matter.
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
managers 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 protability. 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/
documentation, and whether both the cost and revenue recognition is
true and fair.
We have also assessed whether risks and opportunities in projects
are reected in a balanced way in the project forecasts.
ELTEL Annual Report 2021 | 97
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 2021, except for the corporate governance statement
on pages 41-47. The annual accounts and consolidated accounts of the
company are included on pages 32-96 in this document.
In our opinion, the annual accounts have been prepared in accordance
with the Annual Accounts Act, and present fairly, in all material respects,
the nancial position of the parent company as of 31 December 2021 and
its nancial performance and cash ow for the year then ended in accord-
ance with the Annual Accounts Act. The consolidated accounts have been
prepared in accordance with the Annual Accounts Act and present fairly, in
all material respects, the nancial position of the group as of 31 December
2021 and their nancial performance and cash ow for the year then ended
in accordance with International Financial Reporting Standards (IFRS), 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 admin-
istration 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 International 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 fullled our ethical responsi-
bilities 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 sufcient 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 signicance 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 consolidated accounts as a whole, but we do not
provide a separate opinion on these matters.
98 | ELTEL Annual Report 2021
Auditor’s report
Description of key audit matter
The carrying value of goodwill for the Group as at 31 December 2021
amounted to 265 MEUR, which is approximately 42 % of total assets.
Goodwill, which is required to be tested annually for impairment, is a
complex area which is heavily dependent on judgment.
Under IFRS, the impairment test should be performed in line with a
specic 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 ows 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 reect market-based assessments 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 2021 amounted to 68 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.
Valuation of goodwill (group) and shares in group companies (parent company)
See disclosure 26 (group) and disclosure 9 (parent company) and accounting principles on pages 58-59 (group) and on page 93 (parent company) in the
annual account and consolidated accounts for detailed information and description of the matter.
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 1-31. 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 consolidated 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 identied 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 obtained 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 misstatement 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 accordance with IFRS 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 nancial 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 misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accord-
ance with ISAs and generally accepted auditing standards in Sweden 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 aggregate, they could reasonably be expected to inuence the eco-
nomic decisions of users taken on the basis of these annual accounts and
consolidated accounts.
As part of an audit in accordance with ISAs, we exercise 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 sufcient and appropriate 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 estimates and related disclosures made
by the Board of Directors and the Managing Director.
• 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 signicant 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 continue as a going concern.
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 assump-
tions in the cashow forecasts, as well as the discount rate used, through
an evaluation of the Group’s internal written documentation and fore-
casts. 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 dis-
closures 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.
ELTEL Annual Report 2021 | 99
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
• 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 sufcient and appropriate audit evidence regarding the nancial
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 performance 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 signicant
audit ndings during our audit, including any signicant deciencies in
internal control that we identied.
We must also provide the Board of Directors with a statement that we
have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable,
measures that have been taken to eliminate the threats or related safe-
guards.
From the matters communicated with the Board of Directors, we
determine those matters that were of most signicance in the audit of the
annual accounts and consolidated accounts, including the most important
assessed risks for material misstatement, and are therefore 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
Opinions
In addition to our audit of the annual accounts and consolidated accounts,
we have also audited the administration of the Board of Directors and the
Managing Director of Eltel AB (publ) for the year 2021 and the proposed
appropriations of the company’s prot or loss.
We recommend to the general meeting of shareholders that the prot
be appropriated in accordance with the proposal in the statutory admin-
istration report and that the members of the Board of Directors and the
Managing Director be discharged from liability for the nancial year.
Basis for Opinions
We conducted the audit in accordance with generally accepted auditing
standards in Sweden. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities section. We are
in dependent of the parent company and the group in accordance with
professional ethics for accountants in Sweden and have otherwise fullled
our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufcient 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 prot or loss. At the proposal of a dividend, this includes an
assessment of whether the dividend is justiable considering the require-
ments 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 nancial
situation and ensuring that the company’s organization is designed so that
the accounting, management of assets and the company’s nancial 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 fulll the company’s
accounting in accordance with law and handle the management 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 prot or loss, and thereby our opinion about this, is to assess
with reasonable 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 proposed appropriations of the
company’s prot 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 pro-
fessional scepticism throughout the audit. The examination of the adminis-
tration and the proposed appropriations of the company’s prot 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 devi-
ations 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’ proposed appropriations of the company’s prot 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 prepared 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 2021.
Our examination and our opinion relate only to the statutory
requirements.
In our opinion, the Esef report #[checksum] 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 recommen-
dation RevR 18 Examination of the Esef report. Our responsibility under this
recommendation is described in more detail in the Auditors’ responsibility
section. We are independent of Eltel AB (publ) in accordance with profes-
sional ethics for accountants in Sweden and have otherwise fullled our
ethical responsibilities in accordance with these requirements.
We believe that the evidence we have obtained is sufcient 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 prepared in a format that meets the require-
ments of Chapter 16, Section 4(a) of the Swedish Securities Market Act
(2007:528), based on the procedures performed.
100 | ELTEL Annual Report 2021
Auditor’s report
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 misstatement 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 inuence the economic decisions of users
taken on the basis of the Esef report.
The audit rm applies ISQC 1 Quality Control for Firms that Perform
Audits and Reviews of Financial Statements, and other Assurance and
Related Services Engagements and accordingly maintains a compre-
hensive system of quality control, including documented policies and
procedures regarding compliance with professional ethical requirements,
professional standards and 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 auditor’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 opinion on the effective-
ness of those internal controls. The examination also includes an evaluation
of the appropriateness and reasonableness of the assumptions made by
the Board of Directors and the Managing Director.
The procedures mainly include a technical validation of the Esef report,
i.e. if the le containing the Esef report meets the technical specication
set out in the Commission’s Delegated Regulation (EU) 2019/815 and
a reconciliation of the Esef report with the audited annual accounts and
consolidated accounts.
Furthermore, the procedures also include an assessment of whether the
Esef report has been marked with iXBRL which enables a fair and complete
machine-readable version of the consolidated statement of nancial
performance, nancial position, changes in equity and cash ow.
The auditor’s examination of the corporate governance statement
The Board of Directors is responsible for that the corporate governance
statement on pages 41-47 has been prepared in accordance with the
Annual Accounts Act.
Our examination of the corporate governance statement is conducted
in accordance with FAR´s auditing 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 sub-
stantially less in scope than an audit conducted in accordance with Inter-
national Standards on Auditing and generally accepted auditing standards
in Sweden. We believe that the examination has provided us with sufcient
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 9 May 2018.
KPMG AB or auditors operating at KPMG AB have been the company’s
auditor since 2018.
Stockholm 29 March 2022
KPMG AB
Fredrik Westin
Authorized Public Accountant
102 | ELTEL Annual Report 2021
The Eltel share
The Eltel share
Eltel’s share is listed on the OMX Stockholm Mid Cap,
under the trading symbol “ELTEL”.
Share capital
At the end of the nancial period 2021, the total number of
shares amounts to 157,499,081 divided into 156,649,081
ordinary shares with 1 vote per share and 850,000 C shares
with 1/10 vote per share. The share capital entered in the trade
register per 31 December 2021 is EUR 158,838,751.
Shareholders
As per 31 December 2021, Eltel has 3,134 shareholders. The
four largest shareholders of Eltel AB are Solero Luxco S.á.r.l.
(a company controlled by Triton Funds) 16.4%, Wipunen
Varainhallinta Oy 13.5%, the Fourth Swedish National Pension
Fund (AP4) 9.6%, and Heikintorppa Oy 6.8%. All the share-
holders referred above together represent 46.3% of the votes in
the company.
Price development and trading volumes
Eltel share price declined in 2021. The closing price on
30 December 2021 was SEK 15.60, a decline of 31% over the
year. The highest closing price was SEK 28.50 on 24 February
2021 and the lowest was SEK 15.04 on 9 November 2021. At
year-end, Eltel’s market capitalisation was SEK 2,443,725,664.
The trading volume on Nasdaq Stockholm was 23,448,686
shares, equivalent to a turnover of SEK 537,902,916. Eltel
shares were mainly traded on Nasdaq Stockholm, 73%, and
Cboe Global Markets, 23%, and in small volumes in other
marketplaces, 4%.
The dividend policy
A dividend policy has been adopted whereby 50% of Eltel’s
consolidated net prot shall be paid in dividends over time
(with exibility in relation to the pay-out ratio).
Analysts
Eltel is followed by Carnegie, Evli Bank and ABG Sundal Collier.
Geographic distribution of shareholders 31 Dec 2021
Ownership by sector on 31 Dec 2021
Finland 30.1%
Sweden 29.2%
Luxembourg 16.8%
United States 5.9%
Denmark 0.2%
Other 0.1%
Anonymous 17.7%
Fund company 17.9%
Pension & Insurance 16.9%
Investment & PE 16.3%
Swedish Private Individuals 2.7%
Treasury Shares 0.5%
State, Municipal & County 0.1%
Other 27.8%
Anonymous 17.7%
0
5
10
15
20
25
30
35
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Eltel share in 2021 (SEK)
Source: Monitor by Modular Finance. Compiled and processed
data from various sources, including Euroclear, Morningstar and the
Swedish Financial Supervisory Authority (Finansinspektionen).
Eltel
OMX Stockholm PI
ELTEL Annual Report 2021 | 103
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel’s top 10 shareholders on 31 December 2021
Shareholders Number of shares
% of
share capital % of votes
Solero Luxco S.á.r.l.
1)
25,683,845 16.3 16.4
Wipunen varainhallinta Oy 21,220,000 13.5 13.5
Fourth Swedish National Pension Fund 15,027,060 9.5 9.6
Heikintorppa Oy 10,625,000 6.7 6.8
Mariatorp Oy 10,000,000 6.3 6.4
First Swedish National Pension Fund 9,177,250 5.8 5.9
Fidelity International (FIL) 7,104,292 4.5 4.5
Swedbank Robur Funds 6,364,435 4.0 4.1
Lancelot Asset Management AB 4,000,000 2.5 2.6
Mandatum Life Funds 2,789,819 1.8 1.8
Total 111,991,701 71.1 71.5
Other shareholders 44,657,380 28.4 28.5
Total ordinary shares in Eltel AB 156,649,081 100.0
Total C shares in Eltel AB
2)
850,000 0.5 –
Total shares in Eltel AB 157,499,081 100.0 100.0
1)
Company controlled by Triton Funds.
2)
The C shares are held by Eltel.
Ownership structure on 31 December 2021
Shareholder spread
Number of
known owners
Number of
shares % of capital % of votes
Share of
known owners
1–500 1,983 322,958 0.2 0.2 64.4
501–1,000 367 303,418 0.2 0.2 11.9
1,001–5,000 527 1,256,416 0.8 0.8 17.1
5,001–10,000 85 655,113 0.4 0.4 2.8
10,001–15,000 27 336,213 0.2 0.2 0.9
15,001–20,000 12 214,780 0.1 0.1 0.4
20,001– 76 126,464,546 80.3 80.2 2.5
Anonymous ownership 27,945,637 17.7 17.8
Total 3,077 157,499,081 100.0 100.0 100.0
104 | ELTEL Annual Report 2021
Five-year summary
Five-year summary
Condensed consolidated income statement
Key gures
Cash ow from operating activities
EUR million 2021 2020 2019 2018 2017
Net sales 812.6 938.0 1 087.6 1,188.9 1,329.9
Cost of sales -724.5 -838.6 -1 004.7 -1,080.5 -1,234.8
Gross profit 88.1 99.4 82.9 108.4 95.1
Other income 5.5 22.5 2.6 4.5 4.9
Expenses
-79.1 -96.9 -97.1 -123.3 -134.7
Share of profit/loss of joint ventures – -0.2 0.4 1.1 -0.4
Impairment of acquisition-related intangible assets – – – – -149.4
Operating result (EBIT) 14.5 24.8 -11.2 -9.2 -184.6
Financial expenses, net -5.8 -9.8 -11.5 -8.8 -12.3
Result before taxes 8.7 14.9 -22.7 -18.0 -197.0
Taxes -3.7 -9.7 -2.4 -4.1 -7.7
Net result 4.9 5.3 -25.1 -22.2 -204.6
EUR million 2021 2020 2019 2018 2017
Net sales 812.6 938.0 1,087.6 1,188.9 1,329.9
Net sales growth, % -13.4 -13.8 -8.5 -10.6 -5.0
Operative EBITA 14.8 11.4 -11.3 -2.2 -25.5
Operative EBITA margin, % 1.8 1.2 -1.0 -0.2 -1.9
Operative EBITA, segments 24.2 22.9 9.7 N/A N/A
Operative EBITA margin, %, segments 3.3 2.8 1.1 N/A N/A
Items affecting comparability
1)
-0.1 14.1 1.6 -4.8 -1.2
EBITDA 46.5 63.0 29.7 5.1 -13.4
Operating result (EBIT) 14.5 24.8 -11.2 -9.2 -184.6
EBIT margin, % 1.8 2.6 -1.0 -0.8 -13.9
Result after financial items 8.7 14.9 -22.7 -18.0 -197.0
Net result for the period 4.9 5.3 -25.1 -22.2 -204.6
Earnings per share EUR, basic and diluted 0.03 0.03 -0.17 -0.15 -1.56
Return on equity (ROE), %
2),3)
2.2 2.4 -10.6 -8.3 -64.9
Return on operative capital employed (ROCE), %
2)
23.6 13.0 -11.5 N/A N/A
Leverage ratio
2)
2.6 2.0 6.7 N/A N/A
Net working capital -16.0 -25.1 -6.3 39.9 45.6
Number of personnel, end of period 5,046 5,449 6,678 7,376 7,999
1)
Includes gains and losses from divestment of businesses and from valuation of assets as held for sale.
2)
Calculated on a rolling 12-month basis. IFRS 16 is applied from 1 January 2019. Therefore ROCE and Leverage ratio are not comparable for 2018 or 2017 and not presented.
3)
Assets and liabilities held for sale are not included (in 2020 German High Voltage business, in 2019 German Communication business and Aviation & Security business area and in 2017
Finnish and Danish Rail business).
EUR million 2021 2020 2019 2018 2017
Operating result (EBIT) 14.5 24.8 -11.2 -9.2 -184.6
Depreciation and amortisation 32.1 38.2 40.9 14.3 171.3
EBITDA 46.5 63.0 29.7 5.1 -13.4
Changes in working capital -10.1 16.6 37.9 6.8 -32.8
Total financial expenses and taxes -6.7 -13.9 -10.9 -10.1 -14.7
Other -7.4 -16.3 -5.4 1.3 -4.3
Cash flow from operating activities
1)
22.3 49.4 51.4 3.2 -65.2
1)
IFRS 16 is applied from 1 January 2019. Therefore cash ow from operating activities is not comparable for 2018 or 2017.
ELTEL Annual Report 2021 | 105
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Quarterly gures
Quarterly key nancial gures for the Group
Quarterly segment information
EUR million
Full-year
2021
Oct–Dec
2021
Jul–Sep
2021
Apr–Jun
2021
Jan–Mar
2021
Full-year
2020
Oct–Dec
2020
Jul–Sep
2020
Apr–Jun
2020
Jan–Mar
2020
Net sales 812.6 226.3 193.8 210.4 182.0 938.0 229.2 226.7 245.5 236.6
Net sales growth, % -13.4 -1.2 -14.5 -14.3 -23.1 -13.8 -17.8 -19.6 -11.1 -5.7
Operative EBITA 14.8 7.0 4.1 4.4 -0.7 11.4 4.0 6.7 2.8 -2.1
Operative EBITA margin, % 1.8 3.1 2.1 2.1 -0.4 1.2 1.7 2.9 1.2 -0.9
Operative EBITA, segments 24.2 7.3 7.7 6.8 2.4 22.9 6.0 8.6 4.7 3.5
Operative EBITA margin, %, segments 3.3 3.6 4.4 3.6 1.5 2.4 2.9 4.3 2.2 1.7
Items affecting comparability
1)
-0.1 – – -0.1 – 14.1 -5.7 -0.7 20.4 –
EBITDA 46.5 14.5 11.9 12.7 7.5 63.0 7.3 15.6 32.7 7.3
Operating result (EBIT) 14.5 6.9 4.0 4.3 -0.8 24.8 -1.9 5.8 23.1 -2.2
EBIT margin, % 1.8 3.1 2.1 2.0 -0.4 2.6 -0.8 2.6 9.4 -0.9
Result after financial items 8.7 5.2 2.6 3.0 -2.1 14.9 -4.3 3.5 20.0 -4.2
Net result for the period 4.9 4.1 1.8 1.6 -2.7 5.3 -7.0 3.1 14.0 -4.8
Earnings per share EUR, basic 0.03 0.02 0.01 0.01 -0.02 0.03 -0.05 0.02 0.09 -0.03
Earnings per share EUR, diluted 0.03 0.02 0.01 0.01 -0.02 0.03 -0.05 0.02 0.09 -0.03
Return on equity (ROE), %
2), 3)
2.2 2.2 -2.8 -2.2 3.5 2.4 2.4 0.2 -2.8 -10.1
Return on operative capital employed
(ROCE), %
2)
23.6 23.6 11.6 16.8 13.5 13.0 13.0 -4.9 -7.0 -6.6
Leverage ratio
2)
2.6 2.6 3.9 3.3 2.3 2.0 2.0 3.4 3.1 6.9
Net working capital -16.0 -16.0 9.8 -7.1 -4.8 -25.1 -25.1 17.3 -12.6 0.5
Number of personnel, end of period 5,046 5,046 5,057 5,202 5,330 5,449 5,449 6,012 6,215 6,652
1)
Gain from divestment of business and loss from valuation of assets as held for sale.
2)
Calculated on a rolling 12-month basis.
3)
Assets and liabilities held for sale are not included (on 31 December 2020 German High Voltage business, on 30 September 2020 Murphy Eltel JV Limited, on 31 March 2020 German
Communication business and business area Aviation & Security).
EUR million
Full-year
2021
Oct–Dec
2021
Jul–Sep
2021
Apr–Jun
2021
Jan–Mar
2021
Full-year
2020
Oct–Dec
2020
Jul–Sep
2020
Apr–Jun
2020
Jan–Mar
2020
NET SALES
Finland 299.6 81.2 77.9 79.8 60.8 300.2 82.7 80.3 78.3 58.9
Sweden 182.2 56.3 40.2 44.6 41.1 224.5 50.8 50.9 59.7 63.1
Norway 160.5 46.2 38.2 42.1 33.9 177.7 41.7 42.1 46.9 47.0
Denmark 87.9 19.3 17.8 24.6 26.2 118.1 29.8 25.8 28.7 33.7
Sum segments 730.1 203.0 174.1 191.1 162.0 820.5 205.1 199.1 213.6 202.7
Other business 91.9 26.9 22.0 21.6 21.4 127.5 27.1 29.9 34.0 36.5
Eliminations between segments -9.5 -3.5 -2.3 -2.3 -1.4 -10.1 -2.9 -2.3 -2.2 -2.6
Net sales, total 812.6 226.3 193.8 210.4 182.0 938.0 229.2 226.7 245.5 236.6
OPERATIVE EBITA
Finland 12.7 4.0 4.8 3.1 0.7 7.2 3.5 4.3 0.2 -0.8
% of net sales 4.2% 5.0% 6.2% 3.9% 1.1% 2.4% 4.2% 5.4% 0.3% -1.4%
Sweden -1.8 0.8 -0.2 -1.6 -0.8 -3.7 -2.4 -0.8 -1.0 0.5
% of net sales -1.0% 1.4% -0.5% -3.6% -2.0% -1.6% -4.7% -1.6% -1.6% 0.7%
Norway 9.2 2.4 2.9 2.7 1.2 14.3 4.0 4.1 4.1 2.1
% of net sales 5.7% 5.1% 7.6% 6.4% 3.6% 8.0% 9.6% 9.8% 8.7% 4.4%
Denmark 4.2 0.1 0.2 2.6 1.3 5.0 0.9 1.0 1.4 1.8
% of net sales 4.8% 0.6% 1.0% 10.5% 5.1% 4.3% 3.0% 3.8% 4.8% 5.3%
Sum segments 24.2 7.3 7.7 6.8 2.4 22.9 6.0 8.6 4.7 3.5
% of net sales 3.3% 3.6% 4.4% 3.6% 1.5% 2.8% 2.9% 4.3% 2.2% 1.7%
Other business -1.8 1.7 -2.2 -0.5 -0.9 -3.3 -0.1 -0.9 -0.1 -2.2
% of net sales -2.0% 6.4% -9.9% -2.3% -4.2% -2.6% -0.3% -2.9% -0.4% -6.1%
Group functions -7.6 -2.0 -1.5 -1.9 -2.2 -8.1 -2.0 -1.1 -1.7 -3.4
Operative EBITA 14.8 7.0 4.1 4.4 -0.7 11.4 4.0 6.7 2.8 -2.1
% of net sales 1.8% 3.1% 2.1% 2.1% -0.4% 1.2% 1.7% 2.9% 1.2% -0.9%
IFRS Key ratios
Key gure
Earnings per share (EPS)
Net result attributable to equity holders of the parent
Weighted average number of ordinary shares
Key gure Denition and reason for use Reference
Operative EBITA
Operative EBITA and -margin, % are used to measure business and segment
protability. Income statement items below operative EBITA are not allocated to
segments.
Note 3: segment
results
Operative EBITA: Operating result before acquisition-related amortisations and
items affecting comparability
Operative EBITA margin, %:
Operative EBITA
Net sales
Operative EBITA and -margin, % for segments represent the sum of segments:
Finland, Sweden, Norway and Denmark.
Items affecting
comparability
Items affecting comparability are items for specic events which management
does not consider to form part of the ongoing operative business, typically gain/
loss of acquisition and divestment of businesses.
Note 3: segment
results
EBITDA
EBITDA is operating result (EBIT) before depreciations and amortisations. Used in
calculating the leverage ratio.
Five-year summary:
Cash ow from
operating activities
Operating result (EBIT)
Operating result (EBIT) and -margin, % are used to measure protability before
interest and taxes.
Income statement
EBIT margin, %:
EBIT
Net sales
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
Operative capital employed is the amount of net operating assets the business
uses in its operations.
Return on operative capital employed (ROCE), % represents how effectively total
net operating assets are used in order to generate return in the operating business.
Note 3: Net working
capital and operative
capital employed
Operative capital employed: Net working capital + Intangible assets excluding
goodwill and acquisition related allocations + Property,
plant and equipment and Right-of-use assets
Return on operative capital
employed (ROCE), %
1)
:
EBITA x 100
Operative capital employed
(average over the reporting period)
Alternative performance measures (APMs)
106 | ELTEL Annual Report 2021
Denitions and key ratios
Denitions and key ratios
Eltel applies ESMA’s (European Securities and Markets
Authority) guidelines for alternative performance measures
(APM). In addition to the nancial measures dened in IFRS,
certain key gures, which qualify as alternative performance
measures (APMs) are presented to reect the underlying
business performance, facilitate analysis of the Group’s
development as followed by Group Management and enhance
comparability from period to period. The denition of these key
gures 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 con-
sidered as a substitute for measures in accordance with IFRS.
1)
Calculated on a rolling 12 months basis
Financial calendar
2022–2023
Annual General Meeting 2022 11 May 2022
Interim report January–March 2022 4 May 2022
Half-year report 2022 26 July 2022
Interim report January–September 2022 2 November 2022
Full-year report 2022 February 2023
Contact information
Saila Miettinen-Lähde
CFO
Phone: +358 40 548 36 95
E-mail: saila.miettinen-lahde@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
Production: Narva and Eltel.
Photo: Robert Attermann/RED STAR, source: Banedanmark (p.19).
Håkan Flank (p. 44–45). All other images Eltel.
Printing: Elanders Sverige AB 2022.
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Printed matter
3041 0242
Key gure Denition and reason for use Reference
Net debt and leverage ratio
Net debt represents Eltel’s indebtedness. It is used to monitor capital structure
and nancial capacity. It is also used in calculating the Leverage ratio. The leverage
ratio is dened as covenant in Eltel’s nancing agreement.
Net debt: Note 13.4
EBITDA: ve-year
summary, cash
ow from operating
activities
Net debt: Interest-bearing debt (excluding shareholder loans) - cash and cash
equivalents
Net debt, 2021 nancing agreement: Interest-bearing debt (excluding sharehold-
er loans) - cash and cash equivalents - IFRS 16 leasing liabilities
Leverage ratio
1)
:
Net debt
EBITDA
Net working capital
Net working capital is used to follow the amount of short-term running 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 receivables, provisions,
advances received and trade and other payables, excluding
items in these balance sheet items that are not considered to
form part of operative 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 recognised as sales. It is the (best) measure of unsatised performance obliga-
tions according to IFRS 15 Revenue from contracts with customer.
Note 3: Committed
order backlog by
business and service
type
1)
Calculated on a rolling 12 months basis
ELTEL Annual Report 2021 | 107
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world today and for future generations.