- Net sales EUR 251.0 million (266.6). Total growth -5.9% and organic growth1 in Power and Communication -2.0%
- Operative EBITA2 EUR -3.0 million (-7.6) and operative EBITA margin -1.2% (-2.9)
- Operating result (EBIT) EUR -3.6 million (-10.4) and EBIT margin -1.4% (-3.9)
- Net result EUR -7.4 million (-9.5)
- Earnings per share EUR -0.05 (-0.06), basic and diluted
- Cash flow from operating activities EUR -33.8 million. The comparable cash flow from operating activities before IFRS 16 impact3 was EUR -40.6 million (-35.8).
Significant events during and after the reporting period
- On 4 March 2019, Eltel agreed with its banks on certain amendments to its existing financial agreement that matures in Q1 2021. The new amendments include, among others, financial covenants and a plan to reduce net debt during the term.
- On 3 April 2019, Eltel announced it will focus on the Nordic market and has initiated an evaluation of strategic alternatives for its Polish and German operations, including a potential divestment.
|EUR million||Jan-Mar 2019||Jan-Mar 2018||Change, %||EUR million||Jan-Dec 2018|
|Net sales||Net sales|
|Total Group||251.0||266.6||-5.9||Total Group||1,188.9|
|Operative EBITA2||Operative EBITA2|
|Items not allocated4||-3.3||-3.7||11.3||Items not allocated4||-15.4|
|Total Group||-3.0||-7.6||-60.3||Total Group||-2.2|
1) Adjusted for divested operations and currency effects.
2) Eltel follows the profitability of segments with Operative EBITA. Please see page 20 for definitions of the key ratios.
3) See page 19 for more information on IFRS 16 impact on cash flow.
4) Items not allocated to operating segments consist of Group management function.
Comments by the CEO
During the first quarter, we continued to concentrate on improving our day-to-day activities and ensuring we are our customers’ first choice. The operational improvements, specifically our focus on winter planning, led to an increased operative EBITA margin for the Group. While we continue to work with Operational Excellence, we are still finalising a few challenging projects with high risk and low margins, which will continue until 2020.
The Communication segment showed sales in line with last year and an operative EBITA margin of 2.9% as increased utilisation rates and rightsizing had a positive effect in all main markets. We have experienced good operating conditions and solid execution in Norway and Denmark, while the restructuring in Sweden is proceeding according to plan and moving in the right direction.
Sales in the Power segment was down, partly due to the expected downturn in Smart Grids and partly from Finland due to weather conditions and lower volumes in Build compared to last year. Lower gross margin and higher costs in Nordic and Polish High Voltage projects, in addition to the reduced sales, led to the negative deviation in Power segment EBITA.
Going forward we continue our Operational Excellence strategy with focus on the customer interface, flawless execution, production planning and efficiency in our operations.
On 4 March 2019, we agreed with our banks on certain amendments to our existing financial agreement to better position ourselves for an evaluation of strategic alternatives for our Polish and German operations, including a potential divestment, which was announced on 3 April 2019. A divestment would mean that Eltel is taking the next step towards strengthening our position as the number one Nordic player with lower risk and fewer capital-intensive projects, a stronger financial position and reduced net debt.
Operational Excellence, the amended bank agreement and a potential divestment of the Polish and German operations are key for Eltel to reach our long-term goal – an EBITA-margin of 5% with a stable cash flow and a healthy balance sheet.
Casimir Lindholm, President & CEO
For further information, please contact:
Petter Traaholt, CFO
Tel. +46 72 59 54 749, firstname.lastname@example.org
Elin Otter, Head of Communications and Investor Relations
Tel. +46 72 59 54 692, email@example.com
Eltel AB discloses the information provided herein pursuant to the EU’s Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the above contacts, on 26 April 2019 at 08:00 a.m. CET.
Eltel is a leading Northern European provider of technical services for critical infrastructure networks – Infranets – in the segments of Power, Communication and Other, with operations throughout the Nordics, Poland and Germany. Eltel provides a broad, integrated range of services from maintenance and upgrade services to project deliveries. Eltel has a diverse contract portfolio and a growing customer base of large network owners. In 2018, Eltel had annual sales of EUR 1.2 billion. The total number of employees currently stands at around 7,200. Eltel AB has been listed on Nasdaq Stockholm since 2015.