- Net sales EUR 295.9 million (328.0). Total growth -9.8% and organic growth in Power and Communication* 1.4%
- Operative EBITA** EUR 0.5 million (3.1) and Operative EBITA margin 0.2% (0.9)
- Operating result (EBIT) EUR -0.2 million (-2.8) and EBIT margin -0.1% (-0.9)
- Net result EUR -9.6 million (-11.0)
- Earnings per share EUR -0.06 (-0.07)
- Cash flow from operating activities EUR -16.8 million (-26.6)
- Net sales EUR 858.1 million (955.7). Total growth -10.2% and organic growth in Power and Communication* 2.5%
- Operative EBITA** EUR -5.2 million (-27.7) and Operative EBITA margin -0.6% (-2.9)
- Operating result (EBIT) EUR -9.0 million (-185.9) and EBIT margin -1.0% (-19.4%)
- Net result EUR -18.9 million (-196.9)
- Earnings per share EUR -0.13 (-1.61)
- Cash flow from operating activities EUR -66.8 million (-107.4)
Significant events during the reporting period
- Casimir Lindholm joined Eltel as new President and CEO on 1 September 2018. He succeeds Håkan Kirstein, who left his role after having finalised the first phase of the transformation strategy.
|EUR million||Jul-Sep 2018||Jul-Sep 2017||Change, %||EUR million||Jan-Sep 2018||Jan-Sep 2017||Change, %|
|Net sales||Net sales|
|Total Group||295.9||328.0||-9.8||Total Group||858.1||955.7||-10.2|
|Operative EBITA**||Operative EBITA**|
|Items not allocated||-3.3||-3.3||-0.7||Items not allocated||-11.6||-11.6||0.6|
|Total Group||0.5||3.1||-82.8||Total Group||-5.2||-27.7||81.4|
*Adjusted for divested operations and currency effects
** Please see page 21 for definitions of the key ratios
Comments by the CEO
Since 2017, Eltel Group has been restructured to focus on areas with a balanced risk level and in markets where we have a strong position and a high level of expertise. Still, there remains a few old projects with high risk and low margin, which will continue until 2020.
Operations in the Power and Communication segments are generally good, but not efficient and flexible enough to handle fluctuations in market demand. Our focus going forward is therefore on improving our operational performance, improving the cash flow and increasing profitability. Eltel plays a significant role in maintaining and building critical infrastructure in the society. We have good customer relationships and we maintain a high level of quality, so the fundamentals are in place.
During the autumn, we have continued to develop a new strategy focusing on efficiency improvement, customer focus, measuring and tracking relevant key performance indicators, and simplifying the daily operations for our technicians. Furthermore, we will improve the competence within our organisation through various forms of training and recruitment. This is supported by the recently implemented country-based organisation, which allows us to be closer to our customers and focus on our local operations in each country.
During the third quarter, sales decreased as planned as a consequence of completed divestments. At the same time, sales in Smart Grids continued to increase strongly. The quarter was disappointing in terms of profit, mainly due lower volumes and margins in Service business in Sweden and Build business in Norway within Communication, start-up costs for new contracts in Communication Finland, low efficiency and higher costs in Service and Build in Finland within Power, and project write-downs in High Voltage. The weak results in Service and Build are due to weak project management and poor cost control. In High Voltage a number of project contracts were agreed in 2014–2016 at low margins, some of which run until 2019 and a few of which will end in 2020.
We are in a financially challenging situation. Profitability has slightly increased as a consequence of the discontinuation and sale of loss-making operations. Rolling 12 months, we have gradually improved our EBITA margin, although it is far from acceptable levels.
Casimir Lindholm, President & CEO
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 7 November 2018 at 08:00 a.m. CET.
For further information, please contact:
Casimir Lindholm, President and CEO
Petter Traaholt, CFO
tel. +46 72 59 54 749, email@example.com
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 and integrated range of services, spanning from maintenance and upgrade services to project deliveries. Eltel has a diverse contract portfolio and a growing customer base of large network owners. In 2017, Eltel’s net sales amounted to EUR 1.3 billion. The current number of employees is approximately 7,500. Since 2015, Eltel AB is listed on Nasdaq Stockholm.