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Annual Report 2022
.
Transforming how
we power and
connect the world
Eltel is a leading service provider for critical
infrastructure that enables renewable energy
and high-performing communication networks
today and for future generations.
Contents
Eltel and the world around us
The year in brief 3
Eltel in brief 4
We are Eltel 5
CEO’s review 6
Strategy 8
Market trends 9
Outlook and opportunities 10
Our operations
Services
– Communication 11
– Power 12
Segments
– Eltel Finland 13
– Eltel Sweden 15
– Eltel Norway 17
– Eltel Denmark 19
– Other business 21
Sustainability
Highlights 2022 22
Our global commitment 24
Integrated in our way of working 25
Health and safety 26
Environment and climate 27
People and society 29
Supply chain 30
Business ethics 31
EU taxonomy 32
Board of Directors’ report 38
Risk Management 42
Corporate Governance report 46
Board of Directors 51
Group Management Team 52
Financial reports
Consolidated nancial statements 53
Notes to the consolidated nancial statements 58
Parent Company nancial statements 84
Notes to the Parent Company nancial statements 87
Auditor’s report 91
Other information
The Eltel share 95
Five-year summary 97
Quarterly gures 98
Denitions and key ratios 100
Contact information and nancial calendar 101
Eltel Annual Report 2022 2
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The year in brief
2022 Highlights
 New strategy laying the foundation for sustainable
and protable growth
During the year, we began working with our new strategy for
2023–2025. The strategy focuses on innovation, sustainability
and new market development, as well as expanding existing
and new business opportunities (read more on page 8).
 Growth in net sales
Our net sales increased to EUR 823.6 million, compared to
EUR 812.6 million in 2021. We see further opportunities for
growth as the market demand for our services remains strong
despite ination and supply chain challenges.
 Approval of our science-based climate targets
Our new climate targets were approved by the Science Based
Targets initiative at the end of the year (read more on page 28).
Eltel’s carbon reduction targets are in line with the Paris Climate
Agreement and reducing global warming to 1.5 degrees.
Eltel och vår omvärld Vår verksamhet Hållbarhet Förvaltningsberättelse Bolagsstyrningsrapport Finansiella rapporter Övrig information
Key gures
823.6
Net sales,
EUR million
-1.9
Operative EBITA,
EUR million
825
Signed contracts,
EUR million
5,053
Number of employees,
average
-0.2
Operative EBITA
margin, %
New Business Development function established to
create opportunities
We launched a new Business Development function that will
both replicate successful business models and conceptualise
new ones. Business Development includes our Sustainability
function, which was also strengthened with a new Head of
Sustainability during the year.
 Managing macro-economic challenges
The high ination impacts Eltel across its cost base,
including fuel and material prices as well as the availability
and cost of subcontractors and employees. Mitigating
actions have been taken and Eltel has agreements in place
to recover parts of the cost increases with most of its largest
customers. However, the degree of compensation may be
lower than previously anticipated. It will also take time before
the agreed indexation mechanisms take full effect.
Eltel Annual Report 2022 3
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Lithuania
Poland
Germany
Sweden
Norway
Finland
SERVICES OFFERING MARKETS CUSTOMERS NET SALES 2022
Communication
Market leader in the Nordic region
and Lithuania.
Read more about our communication
services on page 11.
Designing, installing, upgrading
and servicing mobile and xed
communication networks
The Nordics
Lithuania
Telecom operators and
network owners
Local industrial customers
and the public sector
Power
A key player in the Nordics and Poland.
A niche player in Germany.
 Read more about our power services
on page 12.
Maintenance and upgrades
to electricity distribution and
transmission
Renewable energy
Electric vehicle charging infrastructure
Smart Grids
The Nordics
Poland
Germany
Network operators
Local industrial customers
and the public sector
Utility companies
FINLAND
Net sales:
EUR 290.1 MILLION
Average number of employees:
1,498
SWEDEN
Net sales:
EUR 193.8 MILLION
Average number of employees:
919
NORWAY
Net sales:
EUR 176.8 MILLION
Average number of employees:
938
DENMARK
Net sales:
EUR 74.3 MILLION
Average number of employees:
484
OTHER BUSINESS
Net sales:
EUR 99.4 MILLION
Average number of employees:
1,071
Denmark
Eltel in brief
Eltel is a leading service provider for communication and power
networks. Operations are conducted in the Nordic countries, Poland,
Germany and Lithuania within country-based organisations that have
full responsibility for their nancial result. Within Power, Eltel provides
maintenance of power grids, upgrades and project work to national
transmission system operators and distribution network owners.
Within Communication, Eltel provides similar services to telecom
operators and other owners of communication networks.
63%
37%
Eltel Annual Report 2022 4
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We are Eltel
Eltel is a leading infrastructure and service
provider for critical communication and
power networks – infranets.
Securing the lifelines of modern society
Everyone depends on stable communication and power
networks. Eltel designs, 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 delivers infrastructure that allows renewable energy
generation, electric vehicle charging and high-capacity
communication networks. This enables the electrication and
digitalisation of society, and new ways of living and interacting.
Why invest in Eltel?
We secure communication and power networks for a more sustainable and connected
world – today and for future generations. Our services make society more robust with a
well-managed and state-of-the-art communication and power infrastructure.
We are a market leader
Market trends support the future growth of our business
We enable a more sustainable society and minimise our negative climate impact
by setting science-based targets
We focus on operational excellence, cost efciency and sustainable protable growth
We have a customer-focused mindset
We enable cross-border synergies
Our services and offering
We deliver a comprehensive range of communication and
power services – everything from the design and build
phase to corrective maintenance – primarily for the owners
of communication and power networks. We offer a 24/7 and
extensive geographical presence in our home markets.
Our communication and power services are becoming increa-
singly intertwined as we draw on synergies between our commu-
nication and power capabilities to deliver solutions that include
both. We are offering more projects related to renewable energy,
energy storage, electric vehicle charging and public infrastructure.
Most of our work is conducted through long-term framework
agreements and service 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 8.
Eltel Annual Report 2022 5
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
High demand for Eltel
services in a
challenging year
You have been CEO since 1 August. What has
most impressed you about Eltel so far?
I would say how open-minded our people are to nding new
ways of working and creating new business opportunities
– particularly when collaborating with colleagues in other
countries. We started to rene our business strategy during the
year and our teams have been very receptive to our new ideas.
How would you summarise Eltel’s nancial
performance in 2022?
2022 proved to be a disappointing year for Eltel in terms of
protability, as we were hit by unexpected cost increases
that accelerated during the year. We achieved top line growth
despite challenges, but our EBITA was disappointing as we
failed to fully compensate for cost increases. On the other
hand, it was highly gratifying that we signicantly increased
thevalue of contracts signed during the year.
What have been the main challenges
facing Eltel in 2022?
As with all businesses, ination and the terrible war in Ukraine
affected our business during the year, with increased steel,
asphalt, concrete and fuel costs. However, most of our
customers appreciate the situation and we were able to agree
to share these costs with many of them.
A shortage of resources, including personnel and some
materials, was another challenge for our business. High
sickness rates reduced our productivity and we had a relatively
high staff turnover, which resulted in signicant costs to bring
in new people and train them. This has occasionally made it
challenging to meet the high demand for our services. Fluctua-
tions in call-offs from agreements and forecast deviations have
been larger than before, and which has been more costly.
How did Eltel manage these challenges?
We worked to overcome cost increases through customer
dialogue and by negotiating cost compensation on contracts to
nd a fair and reasonable solution for all parties. We introduced
a cost index for many of our existing and new contracts, which
to some extent protected us and our subcontractors from price
increases. In principle, all our tenders now have such an index.
However, in some cases we were not sufciently compensated,
and the index-based compensation many times arrives later.
In terms of high staff turnover, we have been proactive in
relation to recruitment and in making Eltel a preferred employer
to both attract and to retain skilled employees.
How do things look going forward?
Despite short-term macro-economic uncertainty, we have
signicant potential to capitalise on global trends to deliver the
next wave of electrication and digitalisation. This is important
as we expect to have opportunities to increase our prices and
recover our prot margin in 2023.
Did you tap into these opportunities in 2022?
We already deliver the infrastructure for wind power and
Eltel’s President
and CEO Håkan
Dahlström reects on
a challenging year as
the company strives
toward sustainable
and protable growth.
Eltel Annual Report 2022 6
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
electric vehicle charging in some markets, and we expect
such opportunities to increase in the coming years as we are
discussing several potential projects with customers in 2023.
In autumn 2022, we created a new Business Development
function at Group level that will both replicate successful
business models and create new market opportunities.
Thenew function will enable us to draw on our existing
expertise and nd synergies within our business.
How have you rened Eltel’s business strategy?
We developed a new strategic direction in 2022 in order to
create business opportunities in areas adjacent to those in
which we are currently active. Our new strategy is focused
on capitalising on new opportunities related to ‘electrication
2.0’ and digitalisation. I feel this is where we have an important
role in transforming society to become more sustainable and
efcient, while improving the way people live. The new strategic
direction was launched internally in February 2023.
Important growth areas for us are in the installation and
service of the infrastructure for wind and solar energy genera-
tion, electric vehicle charging and energy storage, all of which
are important for societal development. We will continue to
perform more 5G and indoor/Distributed Antenna System
(DAS) installations. Opportunities within public infrastructure
– from communication solutions for rail networks and street
lighting to public transport charging – are interesting too.
Thereare also exciting opportunities for us to combine our
expertise in both communication and power, as well as our
cross-border Nordic presence, in order to deliver unique
customer value.
How did Eltel perform in its different countries in 2022?
Our business in Finland performed well during the rst three
quarters with a lot of new customer contracts. However, the
fourth quarter was a disappointment both due to lower net sales
and higher costs. We improved our nancial performance in
Sweden compared to recent years and we have the potential
to do even better in that market going forward. We achieved
good top line performance in Norway despite a weak second
half of the year. However, like in Finland, the fourth quarter
was disappointing due to a drop in work orders and higher
costs. Thetop line and the operative EBITA margin improved in
Denmark during 2022 and we are cautiously optimistic going
forward. Our business in Germany contributed positively to our
overall result and is a market where we have signicant growth
opportunities. We experienced a difcult year in Poland as the
war in Ukraine reduced the availability of subcontractors, and
also due to particularly high ination. Lithuania improved its
net sales and nancial result, and continued to be an important
source of labour for our Nordic companies through our
cross-border workforce.
What progress was made on sustainability
during the year?
In recognition that sustainability must be an integral part of
everything we do, we decided that our sustainability efforts will
be overseen by our new Business Development function. This
will ensure that sustainability is at the top of our agenda when
developing new business opportunities.
We were proud to have our new climate targets approved
bythe Science Based Targets initiative during the year.
The targets are an important part of meeting customer
expectations on sustainability.
We continued to support the ten principles of the UN Global
Compact and the UN Sustainable Development Goals during
the year through our ongoing sustainability work.
What do you see as the main challenges in 2023?
There is great uncertainty regarding how the macro-economic
challenges will evolve. In certain areas we see an increased
demand and in other areas a decline. We therefore have a
challenge to meet and adjust to the rapidly changing markets,
which will negatively impact the rst half of 2023. It is also clear
that ination will give us head wind, but we are constantly
monitoring the situation and evaluating how well our cost
indices are helping to manage increasing costs. We will also
continue to promote Eltel as a preferred employer in the
industry, with the objective of reducing staff turnover.
Håkan Dahlström facts
Born: 1962
Experience: Former CEO of Fujitsu Sweden,
management positions at TietoEvry and Telia Group,
and a member of Eltel’s Board of Directors 2017–2022.
Lives: Stockholm.
Family: Wife, three children and a dog.
Motto: Engaged employees and satised customers
deliver protability.
What does the future look like for Eltel in terms of
longer-term market development and demand?
The weak economic outlook in general means that most of
our customers have adjusted their investment plans for 2023.
However, long-term we are perceiving an increased demand
insociety for both communication and power.
Moving into 2025, we will continue to drive growth areas
such as 5G, bre and power network upgrades, as well as
focus on business opportunities related to infrastructure for
electric vehicle charging, wind, solar and energy storage.
Although it is more difcult to foresee longer-term trends
looking forward to 2030, I believe that we will see more smart
solutions involving connected devices and sensors – what is
known as the Internet of Things. As an established major player
in the communication and power market, we are well positioned
to install, maintain and service the infrastructure for these
exciting solutions, which have the potential to revolutionise
how people live, work and play.
What does this outlook mean for Eltel and our people?
Eltel is a great company with the capabilities to help create a
more modern and sustainable society. I am proud of Eltel and
our employees who step by step are making this happen every
day. I believe that we have a very important role to play in
creating a better society – both now and in the future.
Håkan Dahlström, President and CEO
The weak economic
outlook in general
means that most
of our customers
have adjusted their
investment plans for
2023. However, long-
term we are perceiving
an increased demand
in society for both
communication and
power.
Eltel Annual Report 2022 7
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
How to win:
New business models, by value chain expansion
and as-a-service thinking, including operational
management, proactive monitoring, etc.
Efciency improvement in current business, by process
and quality improvements and the expansion of success-
ful, high-margin business areas, such as Smart Grids.
Integrate sustainability as part of our culture, opera-
tions and service offering in order to explore new market
opportunities.
Develop our mindset and organisational set up to be
bold, hungry and smart, while increasing the under-
standing as well as the urgency to change, including
demanding higher prices.
Our strategy
– towards sustainable
protable growth
The strategy describes where Eltel Group should be by
the end of 2025, to reach the long-term targets set for the
Group. By successfully executing this strategy, we will build a
platform for sustainable protable growth, leaving the time of
poor protability and reduced net sales behind us.
The ambition is to achieve 2–4% annual growth and 5% operative EBITA by end of
2025. Based on the strategy, each unit of the Group will create annual business plans
that describe how the units will develop the business and meet the targets.
The strategy consists of a number of choices and bets that form steppingstones to
reach the wanted new position.
In short, the strategy is about increasing sales in less mature submarkets (vs where
we are active today), reduce the power imbalance with our largest customers, thereby
reducing price pressure. We also increase the prot margin in all activities (current and
new business).
Where to play:
Expand our customer base in traditional and adjacent
segments (example telco infra owners) and with
traditional or similar customer needs, e.g. in public
communication, indoor coverage, grid connection
points.
Enter new and adjacent markets such as wind power,
solar PV, battery energy storage solutions and EV
charging by leveraging Eltel’s geographical coverage,
competence and organisation, as well as adding relevant
eco-system partners.
Eltel’s targets by end of 2025
Scope 1, 2, 3
according to
validated targets
SBTi commitment
1.5-2.5x
Net debt/EBITA
(Leverage)
0
Lost time injury frequency
2-4%
Annual growth
in the Nordics
>3.75
Employee satisfaction
and motivation
5%
Group operative
EBITA margin
>75
Customer satisfaction
index
Eltel Annual Report 2022 8
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
.
Trends transforming
the infranet sector
The megatrends of digitalisation, electri-
cation, hybrid working and climate change
are driving the demand to install, upgrade,
maintain and secure communication and
power networks.
Meeting societal demands for sustainable
energy and digitalisation
Infranets are increasingly essential lifelines for modern society
that meet the everyday needs of businesses and individuals.
Power and communication networks also enable a more
sustainable and low-carbon society. They provide the infra-
structure for electric vehicles and renewable energy generation,
and build communication networks that support hybrid working
and the digitalisation of society.
Market trends shape our sector
As a consequence of the global trends affecting society, the
infranet sector is constantly changing. The table summarises
the key market trends, their impact on the sector and how the
infranet sector is responding.
MARKET TRENDS IMPACT ON THE SECTOR SECTOR RESPONSE
Power under
pressure
Power networks are under pressure to deliver
reliable and affordable energy
Network and capacity upgrades
Ageing power
infrastructure
Current power networks are approaching the end
of their technical life
Growing need to upgrade public infrastructure
Upgrades of infrastructure/load management/
smart grids
Network investments
Changing
consumption
behaviour
Increased digitisation, hybrid working and
data usage
Societal shift to electrication, including industry
and road transport
Infrastructure upgrades –including 3G dismantling
and HetNet/LAN/access rollouts (ahead of 5G/
IoT rollout)
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-efcient solutions
Growing need for electric vehicle charging
Major national smart meter rollouts and other
energy-efcient solutions (e.g. LED lighting)
Installation of electric vehicle charging infrastructure
Increased demand
for 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 rollout
Network investments in improved operations and
service levels to meet stringent requirements
Power and commu-
nication networks
also enable a more
sustainable and
low-carbon society.
Eltel Annual Report 2022 9
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5G
Eltel is a frontrunner in the large 5G mobile com-
munication market in the Nordics. 5G is expected
to be a growth market in the coming years as
deployment continues, along with the need to
densify and further enhance the network.
Fibre
Fibre penetration is high in Sweden and Norway,
but remains an important growth area for our
businesses in Denmark and Finland. There will
be increasing opportunities to renew existing
bre networks in the Nordics.
Power grid upgrades
The demand to upgrade outdated power grids
remains strong. A signicant driver for upgra-
ding regional networks is the need to integrate
renewable energy sources and electric vehicle
charging stations into the electricity grid.
Smart meters
The rollout of smart meters continues in various
phases in our markets. This includes major on-
going rollouts and a pipeline of future projects.
Growth drivers: renewable energy and
electric vehicle mobility
The infrastructure demand is strong for re-
newable energy and electric vehicle charging
in all our geographic markets. Along with
energy storage, these areas will be important
growth drivers for Eltel in the coming years.
Fixed communication
Fixed wireless access will continue to grow,
and we are also increasingly delivering
services related to private networks. These
local networks can ensure good 5G coverage
throughout buildings.
Market summary 2022
Ination, energy costs and economic instability and
supply chain disruption created challenges for Eltel,
its customers and the industry overall during the year.
Eltel took advantage of potential market opportunities
and worked proactively to minimise the negative impact
on its business.
National security concerns increased during the year
following Russia’s invasion of Ukraine, which required
closer collaboration with some key value chain partners.
Eltel plays an important role in building and maintaining
power and communication networks, which are critical
infrastructure.
The emergence of ‘passive’ communication network
owners with core operations outside telecommunica-
tions is a growing opportunity for Eltel to offer more
comprehensive solutions. There are also an increasing
number of small competitors that Eltel must be wary
of, but also explore opportunities to create strategic
partnerships with.
Eltel experienced recruitment challenges in 2022
with skilled labour in short supply. Eltel stepped up its
recruitment campaigns, employer branding, and worked
to promote itself as a preferred employer in the industry.
Eltel takes advantage
of potential market
opportunities and
works proactively to
minimise the negative
impact on its business.
Our home markets are stable with good opportunities for growth in the coming years.
We continuously monitor market trends and our operating environment to identify
and adapt to potential threats and opportunities. Sustainable energy and digitalisation
continue to be increasingly important for both customers and end users.
Outlook and opportunities
Eltel Annual Report 2022 10
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Communication
We optimise communication networks and help meet societal needs for
greater digitalisation, which is revolutionising how people live, work and play.
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 by enabling
hybrid working and creates new opportunities for individuals
and businesses.
Our communication offering
Mobile telecom services
Mobile network rollouts, modernisations, swap projects,
corrective maintenance and Distributed Antenna System
(DAS) networks.
Site infrastructure management, alternating current/
direct current (AC/DC) upgrades, preventive and corrective
maintenance, new tower/rooftop infra constructions.
Fixed telecom services
Fibre, copper, coaxial and hybrid bre-coaxial (HFC)
network construction and maintenance.
Transmission network implementation and maintenance.
Fibre-to-the-home (FTTH) turnkey projects.
Public infrastructure
Building and maintenance of a broad range of public
infrastructure – from digital signage and railway
signalling systems to smart level crossings and hospital
communication infrastructure.
Our main customers are large telecom operators and com-
munication network owners, such as utility companies. Eltel’s
operations generally involve long-term relationships with a
steady inow of orders generated by framework agreements.
Communication opportunities
We are capitalising on market growth in 5G, which will
continue in the coming years along with Fixed Wireless
Access (FWA), and both public and private indoor com-
munication infrastructure solutions such as DAS. There
are also ongoing opportunities for us in the bre market,
particularly in Finland and Denmark.
We continue to develop and provide services for both
new and existing customers that complement our core
business offering. This includes services related to in-
door 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.
Modern and high-capacity communication
networks support the digitalisation of society
and enable people to interact in new ways.
Eltel Annual Report 2022 11
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Power
Our power services enable the electrication of society, which is essential for building
more sustainable energy solutions and achieving national carbon-neutrality goals.
A resilient and robust power infrastructure allows renewable
energy generation, electric vehicle charging and the smarter
use of electricity. These are all building blocks for a carbon-
neutral society.
Our power offering
Power transmission services
Full turnkey high voltage projects and maintenance
(110/400 kV) for national grids.
High voltage service solutions for industrial and data
centre customers.
Renewables
Wind power solutions and substations.
Solar parks, photovoltaic (PV) installation and the manage-
ment and implementation of energy storage projects.
Power distribution
Power distribution network construction, upgrades
and preventive and corrective maintenance.
Smart grids
Rollout services for next-generation power meters.
e-Mobility
Electric vehicle charging infrastructure projects,
including design, implementation and maintenance.
Resale of public charging stations.
Network expansion and connections.
Power opportunities
The demand for increased network capacity and capa-
bilities is a major driver in the power market that will
continue in the foreseeable future. We are also tapping
into the ongoing need to upgrade outdated power grids
and install the latest smart meters. Renewable energy,
particularly wind power investments, is also driving the
market and areas such as charging infrastructure for
electric vehicles, PV solar panel installation and battery
storage solutions are growing.
Eltel continues to enter into long-term partnership
contracts and service agreements. Such contracts and
agreements not only provide long-term stability, but also
help Eltel expand its share of the value chain.
A resilient and robust power infrastructure
allows renewable energy generation,
electric vehicle charging and the smarter
use of electricity.
Eltel Annual Report 2022 12
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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
ofces offering a nationwide presence. It can take on complex
projects and quickly mobilise hundreds of repair technicians
in the event of severe weather, such as a storm, or other type
ofemergency.
Developments in 2022
In 2022, Eltel Finland had challenges in protability due to
Power Services. Protability in the Power Services business
was dampened by a new energy market act in Finland that
has reduced the level of investments by distribution system
operators.
The ‘Power transmission and industry’ unit was strengthened
with a reorganisation. The unit is developing business opportu-
nities for industry customers and in promising markets related
to wind farms, solar parks and battery storage systems. The
CU has started installing ground mounted solar PV systems as
part of its B2B contracts.
An e-mobility task force was established with strong sales
capabilities to tap into the growing market.
Sales growth in communication is being driven by FTTH and
5G, which have signicant market potential in Finland and in
which Eltel is a leading player.
Eltel Finland offers services in Power,
Communication and Smart Grids. The
Country Unit (CU) installs power trans mission
and distribution infrastructure, e-Mobility
infrastructure, bre, 5G and manages fault
repair and maintenance contracts.
Fibre and 5G continue
to be the drivers of the
communication market
and Eltel Finland is the
market leader in both.
FINANCIAL PERFORMANCE
2022 2021
Net sales (EUR million) 290.1 299.6
Operative EBITA (EUR million) 8.2 12.7
Operative EBITA margin (%) 2.8 4.2
Number of employees, average 1,498 1,478
Sustainability progress
Safety is the top priority and new weekly meetings at team
level have helped to promote performance. The topic is
kept high on the agenda by regularly considering safety in
weekly meetings.
As part of its sustainability plans, the CU’s rst 50 electric vans
were delivered in 2022 along with charging infrastructure at Eltel
sites. A route optimisation tool that enhances the efciency
of individual technicians and reduces vehicle emissions was
piloted in the spring before being rolled out nationwide.
As a sustainability leader in Finland, the CU shared its
sustainability knowledge at several organised events for
customer projects and the industry in general.
Market outlook and opportunities
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 be-
coming an important offering. These include private networks
for hospitals, shopping centres and large industrial facilities.
Wind farm infrastructure, installing solar PV systems,
e-mobility infrastructure and constructing energy storage
systems have signicant growth potential in the coming
years. During 2022, Eltel tendered for projects in all
these areas, including service agreements for
e-mobility and energy storage.
An ongoing trend in Finland is the increased
need to upgrade regional network
connections due to the establishment
of more renewable energy capacity in
the country.
Competitors
Voimatel
Enersence
ENP
Elvera
TLT
Major agreements in 2022
Eltel’s largest framework agreement to date, building
FTTH throughout Finland for Valokuitunen.
Power transmission building and maintenance
framework agreement for Caruna.
Telecommunication construction and maintenance
framework agreement for DNA.
Wind farm substation, transmission lines
and cabling for Exilion.
NET SALES 2022
Communication Power
290.1
EUR million
Eltel Annual Report 2022 13
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In September 2022, Eltel Finland
signed its largest ever project with
a contract value of EUR 200 million.
It is a three-year framework agree-
ment with Valokuitunen to build
bre-to-the-home (FTTH)
throughout Finland.
Driving digital connectivity in Finland
Between 2022 and 2025, Eltel will connect
around 400,000 Finnish homes with high-speed
broadband. Whereas previous bre rollouts have
focused on the main urban areas in Finland, this
project covers the entire country – including rural
and remote communities.
“As bre penetration currently stands at around
45% in Finland, compared to around 80% in
the other Nordic countries, this FTTH project
will represent a big leap in digital connectivity
for people in their homes,” says Juha Luusua,
Managing Director of Eltel Finland. “It will provide
better opportunities for digital entertainment and
for remote working throughout Finland.”
“This agreement will enable us to meet our
growing customer demand for high quality bre
connections,” says Heikki Kaunisto, CEO of
Valokuitunen Oy.
Eltel and Valokuitunen will work in close
partnership and Eltel will be responsible for
project management, material management and
logistics, bre network construction, installation,
service works and documentation. Eltel’s scope
of work will also include maintenance and life-
cycle services and will run until 2025 with the
option for a one-year extension.
Case story
Ensuring digital connectivity
for millions
It will provide better opportunities
for digital entertain ment and for
remote working throughout Finland.
Key facts
Client: Valokuitunen Oy
Services: Fibre-to-the-home project
Period: 2022–2025
Value: EUR 200 million
Eltel Annual Report 2022 14
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Eltel
Sweden
Eltel Sweden’s Power business focuses on the low to medium
voltage distribution segment and substation cabling. Smart
meter installation is a signicant part of the business with large
ongoing rollout projects. The CU has a national presence and
the capability to deliver complex framework agreements with a
skilled workforce.
Developments in 2022
Eltel Sweden increased its sales during the year with organic
growth of almost 10%. In Communication, bre deployment
projects in rural areas continued. 5G rollout started slowly in
2022 due to supply chain issues but ramped up during the year.
The Power segment saw reduced sales in power distribution
as some large projects were completed. However, a large power
distribution framework agreement was won in Stockholm and
smart meter rollout was ramped up around the country.
To improve protability, enhance the customer experience
and align with a single national operating model, the ‘One Eltel’
project was nalised during the year with all teams trained in
how to use the model. One Eltel also aims to ensure that national
customers recognise Eltel as a single company, as well as
strengthen Eltel as a good employer.
The Communication business accounts
for around 85% of Eltel’s turnover in
Sweden. Eltel installs and maintains 5G
and bre networks and is a major player
in the FTTH market. The CU works with
public infrastructure, indoor, xed and Wi-Fi
networks. Customers include national
operators, network and infrastructure owners
and municipalities.
Eltel Sweden expects
strong demand for
bre services as
rollout continues and
bre network com-
panies start planning
to modernise the
network by replacing
old bre networks in
the coming years.
FINANCIAL PERFORMANCE
2022 2021
Net sales (EUR million) 193.8 182.2
Operative EBITA (EUR million) -1.0 -1.8
Operative EBITA margin (%) -0.5 -1.0
Number of employees, average 919 938
Sustainability progress
Eltel Sweden aims to reduce fossil emissions from vehicles by
50% between 2019 and 2025. This will be achieved by increa-
sing the use of renewable diesel in cars, vans and excavators
and gradually phasing in electric vehicles. In 2022, 17 electric
cars and vans were ordered and will be delivered in 2023.
Work with suppliers in Sweden included new processes for
measuring suppliers’ use of renewable diesel. Sustainability
was also a key theme when discussing collaboration with
potential and existing customers as customers continue to
raise their sustainability expectations.
Market outlook and opportunities
Eltel Sweden expects strong demand for bre services as
rollout continues and bre network companies start planning
to modernise the network by replacing old bre networks in
the coming years. 5G deployment is also expected to pick up
pace in 2023.
The CU is increasingly tapping into new public infrastructure
opportunities, such as more digital road signage contracts,
smart level crossings and digital railway signalling systems.
Eltel Sweden is also investigating the potential for projects
and services in e-Mobility, solar PV installation, wind
power infrastructure and energy storage.
Competitors
Transtema
OneCo
Scanmast
Netel
Major agreements in 2022
Major power distribution ve-year framework
agreement for Ellevio in Stockholm.
Major project to improve digital road signage
in Stockholm.
Extension of service framework agreements with
Trakverket (Swedish Transport Administration).
New framework agreement with infrastructure
owner Cellnex.
Municipality owned city networks
framework agreements with
Borlänge, Karlstad, Kalmar
and Vellinge.
NET SALES 2022
Communication Power
193.8
EUR million
Eltel Annual Report 2022 15
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Case story
Making 1.5 million Swedish
homes smarter
Eltel is one of the main installers
of the latest generation of smart
meters in Swedish homes and
businesses around the country.
Eltel installed around 500,000 meters between
2019 and the end of 2022. Another one million
meters will be installed by the end of 2024,
when all Swedish properties are required to be
equipped with the latest type of smart meter in
accordance with government legislation.
Greater functionality delivers
end user benets
“The latest smart meters have enhanced
function alities such as real-time electricity
monitoring and the possibility to feed small-
scale renewable energy generation into the
grid,” explains Johan Hellström, Business
Development Manager – Smart Grids. “In this
time of uncertainty in the electricity market, smart
meters are more important than ever as they
enable people to monitor and reduce their energy
consumption and even sell their own electricity
produced on their premises.”
An eye on future business
opportunities
The team is currently focused on the smart meter
rollout and ensuring a high level of customer
satisfaction. But Johan is already looking at
potential follow-up contracts.
“As the leading installer of smart meters in
Sweden, we are the natural supplier to provide
aftermarket services in the future, including smart
meter maintenance framework agreements. In
the coming years, I think we will also have other
interesting smart grid opportunities related to
smart city infrastructure to further optimise
power networks,” concludes Johan.
As the leading installer of smart
meters in Sweden, we are the
natural supplier to provide after-
market services in the future.
Eltel Annual Report 2022 16
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Eltel
Norway
In Norway, Eltel is the leading communication service
provider with the competence and capacity to deliver through-
out the entire value chain, including turnkey projects and
innovative solutions for ensuring cost efciency and quality.
Developments in 2022
Sales were similar to 2021, but overall nancial performance
weakened. Smaller and more rural FTTH projects with lower
investment in this area signicantly impacted Eltel Norway’s
nancial results in 2022. Increased costs driven by higher
ination, supply chain challenges, greater sick leave and
training requirements for new technologies further impacted
the results.
5G drove growth and Eltel Norway created a ‘Mobile Rollout’
team in 2022 to sharpen its rollout competence. Fibre is a
declining market as the majority of rural deployment projects
have been completed, although xed wireless access
continues to be deployed in rural areas where bre is not
cost effective.
During the year, Eltel Norway saw signicant increased
demand in the B2B market for e-Mobility infrastructure.
Eltelhad signed agreements with many of the large players
inNorway, including Siemens.
A special taskforce was also established to strengthen the
offshore communications business. Eltel launched a unique
system to provide more stable offshore communications, which
is being used in both the North Sea and the Gulf of Mexico as
part of a framework agreement with a European customer.
Eltel Norway is the Norwegian market leader
in the communication market. It installs and
maintains 5G, xed networks and offshore
communications, and has started its journey
to become a leader in the installation of
e-Mobility infrastructure.
5G drove growth and
Eltel Norway created a
‘Mobile Rollout’ team
in 2022 to sharpen its
rollout competence.
FINANCIAL PERFORMANCE
2022 2021
Net sales (EUR million) 176.8 160.5
Operative EBITA (EUR million) 2.1 9.2
Operative EBITA margin (%) 1.2 5.7
Number of employees, average 938 919
NET SALES 2022
Communication Power
Sustainability progress
In 2022, Eltel Norway ordered 180 electric vans, 50 of which
were delivered during the year – towards its target to switch its
entire eet of 600 vehicles to electric vehicles by 2026. Waste
sorting was improved at Eltel sites, and the CU increased the
proportion of renewable electricity it sourced to 95%.
Based on the success of Safety Week, Eltel Norway began
holding quarterly Safety Days that will continue to raise aware-
ness of the importance of safety among its workforce during
2023. The CU also stepped up its focus on gender diversity
by proactively encouraging young women to pursue a career
in communication. It achieved this by highlighting the career
opportunities in the industry.
Market outlook and opportunities
In mobile communication, 5G rollout and densication is
expected to drive growth going forward. In xed communi-
cation and bre, investments are expected to decrease while
xed wireless access and indoor solutions will continue to grow.
The installation of e-Mobility infrastructure will continue to
be a growth market in Norway, with opportunities to expand
the collaboration with Norwegian customers to other Nordic
countries. There are also signicant opportunities in solar,
data centres, wind and energy storage.
Competitors
OneCo
Netel
UBConnect
Sitecom
Site Service
Major agreements in 2022
Nationwide 5G contract with Telenor to upgrade
antennas on masts and rooftops and build new masts.
Fibre-to-the-business framework agreement for
Telia customers around Norway.
Nationwide framework agreement with Siemens to
install, service and operate charging stations.
176.8
EUR million
Eltel Annual Report 2022 17
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Case story
Powering e-Mobility
in Norway
e-Mobility is a rapidly growing
market in Norway in which Eltel
is a major player.
Since 2019, the Norwegian e-Mobility charging
infrastructure market has grown around 20% per
year, and is expected to increase in the coming
years. As a major e-mobility partner in Norway,
Eltel has several ongoing framework agreements
to install both public and private infrastructure,
including rapid charging solutions.
“We are focused on working on long-term
nationwide projects with major customers where
we can deliver on a large scale,” says Ole Jorstad,
Project Manager at Eltel. “We have a well-
established nationwide expert partner network
that supports us to successfully deliver projects.”
Reorganisation to capitalise on growth
In 2022, Eltel reorganised its e-Mobility business
with a more dened structure to better serve
newand existing customers in this rapidly
growing market. This also involved networking
at international e-mobility events, further
developing partnerships and entering into
new customer agreements.
“There are many opportunities in e-Mobility
in Norway and, during the year, Eltel became
the nationwide service provider for Siemens
to address warranty issues for rapid charging
stations,” says Ole. “In 2022, we also further
developed our existing collaborations with players
such as E.ON, Delta Electronics and Alpitronic.”
Eltel’s international cooperation
on e-Mobility
Eltel has established an e-mobility forum for
its Nordic businesses to share knowledge and
experience. Most of Eltel’s e-mobility competence
is currently concentrated in Norway and Finland.
“We will develop our e-mobility forum in
2023,” explains Ole. “There is huge potential
in this kind of international cooperation – not
least as we have several customers in Norway
who are looking to roll out projects in the other
Nordic countries.”
We are focused on working on
long-term nationwide projects
with major customers where
we can deliver on a large scale.
Eltel Annual Report 2022 18
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Eltel
Denmark
In the power market, Eltel Denmark primarily deals with
medium and low-voltage systems. This includes modernising
the Danish power network for renewable energy, electric bus
charging systems and upgrades of municipal LED lighting.
Developments in 2022
Financial performance was challenged by high ination and
slower than expected ramp up on won contracts. The CU is
working towards protable growth by optimising presence
in the existing markets and developing growth markets in
tech nology, IT and smart meter installation.
During the year, a new resource management task force was
launched to improve sales processes, tenders and pricing, while
minimising risk. The CU also increased its focus on the power
market by expanding its offering to cover the entire country.
In 2022, several new projects were won and began ramping up
although some were delayed due to supply chain disruption and
other issues. Strategically signicant new projects included a
water meter replacement contract, several electric vehicle
charging infrastructure projects, and a contract to test and
maintain the world’s largest wind turbines off the UK coast.
One of the challenges encountered during the year was a
scarcity of resources, including both materials and employees.
The CU is developing new recruitment channels and employer
branding to attract new employees. Eltel Denmark scored +5
in its 2022 employee net promoter score (eNPS) and 82 in its
customer satisfaction score (NPS).
The communication market accounts for
around 75% of Eltel’s revenue in Denmark.
Eltel is a market leader in the country’s bre
market and in the mobile network market,
including 5G. Eltel Denmark also works on
communication projects for the national rail
network and the emergency services.
In 2022, Eltel was
part of a supplier trial
to test electric vans
with solar panels
that can be used to
power tools, instead
ofusingdiesel.
FINANCIAL PERFORMANCE
2022 2021
Net sales (EUR million) 74.3 87.9
Operative EBITA (EUR million) 0.6 4.2
Operative EBITA margin (%) 0.9 4.8
Number of employees, average 484 562
NET SALES 2022
Communication Power
Sustainability progress
The sustainability focus in Denmark has been on monitoring
and reducing vehicle emissions. This has included trialling new
models of small electric vans in Eltel’s operations, sourcing
vehicles with more efcient and hybrid engines, and installing
vehicle charging stations at Eltel’s ofces.
In 2022, Eltel was part of a supplier trial to test electric vans
with solar panels that can be used to power tools, instead of
using diesel.
During the year, the CU lowered the indoor temperature at
its sites to reduce energy use and switched from natural gas
to district heating at its Vejle site to reduce emissions. Eltel
Denmark continued to source 100% of its electricity from
renewable sources.
The CU achieved a Lost Time Incident Frequency rate of
1.2 per million hours worked, which is signicantly better than
the industry average. During the year, all teams in Denmark
began conducting a safe job analysis before starting a job.
Market outlook and opportunities
5G installation for major customers will continue to increase
as Eltel works on approximately 4,000 sites around Denmark.
The bre market will remain strong in the coming years,
despite declining from its peak.
The entire Danish power market is expected to
grow as electric vehicle charging and renewable
energy generation continues to expand. Eltel
will build on its strong presence in Eastern
Denmark and its new operations in
Western Denmark.
Competitors
Kemp & Lauritzen
Bravida
Atea
Intego
Major agreements in 2022
Installation of hardware to digitalise Banedanmark’s
railway signalling system.
Creation of 18,000 high-speed bre connections
for Global Connect’s business customers.
Expansion and upgrade of Nexel’s power network
in Sealand.
Installation and maintenance of DAS for
the new hospital in Hillerød.
74.3
EUR million
Eltel Annual Report 2022 19
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Case story
Enabling smooth patient care
Eltel is the Danish market leader in
building and maintaining distributed
antenna systems for hospitals.
These systems are essential for
delivering smooth patient care.
Healthcare professionals in modern hospitals rely
on good wireless connectivity for their in-house
communication and access to patient data.
However, mobile networks can be overwhelmed
by staff, patients and visitors, or weakened by
building materials such as concrete and steel.
Reliable mobile coverage
A distributed antenna system (DAS) is a network
of antenna nodes that provides wireless mobile
coverage. In hospitals, a DAS works independently
of the Wi-Fi network to ensure redundancy –
which ensures mobile communications by not
being dependent on one single system.
“Bearing in mind the importance of wireless
connectivity in the countless medical cases and
emergencies that hospitals have to deal with
every day, they simply cannot rely on one single
means of mobile communication,” explains Lars
Jessen, Business Development Manager at Eltel.
“Hospitals need to have guaranteed 24/7 connec-
tivity with good capacity and coverage throughout
the entire hospital. We provide this with the DAS
systems that we install and maintain.”
The DAS antennas are installed in the ceilings
of corridors and a hospital network can include
hundreds of antennas, depending on the size
of the facility. It is important to have a dense
network of antennas in hospitals to provide good
mobile coverage and also minimise interference
with medical equipment.
Long-term partnerships
By the end of 2022, Eltel had entered into agree-
ments with more than 20 hospitals in Denmark,
including six in the Copenhagen metropolitan
area. This included a DAS installation and main-
tenance contract at one of Denmark’s newest
hospitals – the Nyt Hospital Nordsjælland.
“All our hospital DAS projects typically involve
installation and maintenance over a six-year
period,” says Lars. “We develop strong profes-
sional relationships with each hospital, which
also involve adapting the network to meet their
ever-changing needs, for example, by expanding
the network to include new hospital buildings.”
Key facts
Clients: Regional authorities
Services: Installation and servicing of
DAS networks
Period: Various ongoing projects
Photo: ©Herzog & de Meuron -
Vilhelm Lauritzen Arkitekter
Eltel Annual Report 2022 20
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Other business
Poland
Eltel’s business in Poland build power transmission and sub-
station services. It has a good backlog of projects, and there
are signicant opportunities to offer services related to wind
farms, solar parks, e-Mobility and energy storage.
Eltel’s high voltage transmission line technicians also work
in other CUs as part of Eltel’s cross-border workforce. The
business has altered its strategy to offer more service and
maintenance offerings going forward.
Germany
In Germany Eltel installs gas and electricity meters and con-
ducts gas adjustment services that are required in the ongoing
switch from Russian gas to liqueed natural gas. Protability
was good in 2022 and this niche market is expected to drive
business growth in the coming years.
Lithuania
Eltel’s business in Lithuania is focused on communication
and the installation of bre and 5G. The market has a stable
outlook. Around two-thirds of business revenue comes from its
skilled communications technicians working in other CUs as
part of Eltel’s cross-border workforce.
Our cross-border workforce
Eltel has two highly skilled cross-border workforces. One team
comprises high voltage transmission technicians based in
Poland and the other team comprises communications tech-
nicians based in Lithuania. These teams provide great exi-
bility to quickly meet changing market needs and the general
shortage of highly skilled technicians throughout the Nordics.
Eltel’s approximately 170 cross-border employees based
in Lithuania and Poland are all permanently employed by the
company. This highly competent and experienced international
workforce gives Eltel a unique competitive edge.
Eltel’s ‘Other business’
includes a project-
based High Voltage
business in Poland,
aSmart Grids
business in Germany,
and a Communication
business in Lithuania.
Case story
Re-connecting power for millions in Ukraine
Eltel is restoring a power connection
between a power station in southeast
Poland and Ukraine. This solution will
provide a reliable electricity supply
for 10 million Ukrainians in the west of
the country.
The electricity supply in Ukraine has been disrupted
since Russia invaded the country in 2022. By restoring
the overhead power lines and supporting the power
infrastructure that was originally built in 1985 between
Eastern Poland and Western Ukraine, Eltel is contributing
towards improved energy security for millions of Ukrainians.
Key facts
Client: PSE SA
Services: Power line restoration
Period: 2022
Eltel rapidly dismantled and replaced the power infra-
structure in Poland over a period of 50 days in 2022. Some
of the dismantled infrastructure will later be installed in
Ukraine by another company.
“We are proud that the network operator Polskie Sieci
Elektroenergetyczne SA (PSE SA) entrusted Eltel with such a
strategically important project,” says Leon Najowicz, Project
Manager at Eltel. “Eltel is honoured to play its part in helping
to supply reliable power to Ukraine in its time of need.”
Eltel Annual Report 2022 21
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Sustainability
For Eltel, sustainability is about delivering lasting nancial, social and environmental value to
its stake holders and society at large. We promote a more sustainable tomorrow by enabling
the transition to a robust, resilient and carbon-neutral society.
2022 Highlights
Science-based targets approved by the Science
Based Targets initiative (read more on page 28).
First ever injury free month, October 2022.
Eltel improved its CDP Climate score from B- to B.
Updated governance structure created (read more in
Sustainability governance on page 24).
The EU taxonomy-aligned activities relevant to Eltel
were assessed (read more on page 32-36).
Key gures
16,152
CO
2
emissions in 2022,
tCO
2
e (Scope 1).
37%
of renewable electricity
(Scope 2).
3.8
LTIFR per million working
hours. Eltel employees.
100%
All CUs continue to hold
ISO 9001, ISO 45001 and
ISO 14001 certication.
89%
GDPR training
completion rate.
82%
Code of Conduct training
completion rate.
We enable a more sustainable society
The infranet solutions provided by Eltel enable the transition
to a robust, resilient and carbon-neutral society. For example,
Eltel delivers infrastructure that allows renewable energy
generation and transmission, electric vehicle charging and
high-capacity communication networks. This enables the
transition to renewable energy, the digitalisation of society,
and new ways of living and interacting.
Eltel Annual Report 2022 22
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
We talked to Erno about his experience, Eltel’s work with
sustainability and its plans going forward.
Hi Erno, tell us about your career at Eltel to date.
I’ve worked in different roles and countries since 2005 – from
project manager and district manager, to managing operational
excellence and business development programmes. In recent
years I have been involved with working with sustainability to
varying degrees and I’m proud of Eltel’s sustainability work as
I believe it differentiates our customer offering.
How does Eltel work with sustainability?
We have been one of the sustainability leaders in our industry
for a long time, particularly in terms of health and safety, and
business ethics, which form the basis of our sustainability work
today. We work proactively to reduce our climate impact by
decreasing our direct emissions and engaging with our supply
chain about their climate impact.
How does Eltel enable a more sustainable society?
Our offering is more important than ever in terms of securing
infranets in this time of crisis in Europe – particularly in terms
of building more renewable energy capacity and supporting
our customers to secure their network operations. We’re also
intensively recruiting, which gives us the opportunity to employ
more people from diverse backgrounds – to help integrate
them into society.
Meet Erno Lehto – Head of Sustainability
In 2022, Eltel created the position of Head of Sustainability to
coordinate our Group work throughout the company.
What do Eltel’s science-based climate targets mean for
the company and its customers?
Our new targets, which were approved by the Science Based
Targets initiative (SBTi) this year, will help us drive our strategic
approach to reducing our greenhouse gas emissions. Our
customers appreciate our targets as many of them already
have their own science-based approach. Similarly, we are
engaging our value chain partners to achieve our shared
sustainability goals.
How does the future look for Eltel’s sustainability work?
During the year, we created a sustainability taskforce that will
have business representatives from country units and will be
crucial in driving our sustainability work going forward. We
currently have many business opportunities related to
sustain ability – from infrastructure for electric vehicle charging
and renewable energy to smart meters – and I think we will see
even more opportunities that we will tap into in the coming years.
During the year, we
created a sustainability
taskforce that will
have business
representatives from
country units and will
be crucial in driving
our sustainability
work going forward.
Erno Lehto,
Head of Sustainability
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 23
Eltel supports all the SDGs, but as a sustainability leader in
the infranet industry, we believe we can make the biggest
contribution to the following four goals:
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
in which it operates.
SDG 9: Industry innovation and infrastructure
Eltel ensures robust and resilient communication
and power networks, and works in partnership
with customers to pilot innovative solutions.
SDG 13: Climate action
The infranet solutions provided by Eltel
enable the transition to a robust, resilient and
carbon-neutral society. Eltel works actively to
reduce the climate impact of its operations.
Our global commitment
Eltel has been committed to a number of sustainability frameworks for
many years. Our long-term commitment, together with stakeholder
dialogue on the relevant topics, shapes our strategic decision making,
and provides a roadmap for remaining relevant as a partner, employer
and investment opportunity.
Science Based Targets initiative
Eltel had three climate targets for 2030 approved by the SBTi in 2022
(read more on page 28).
UN Global Compact
Since 2014, Eltel has been a signatory to the UN Global Compact and
its ten principles on human rights, labour, the environment and anti-
corruption. The principles are embedded into our strategy, policies
and procedures, and related processes. This report constitutes our
annual Communication on Progress process as dened by the UN
Global Compact.
CDP climate change programme
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 the risk of climate change.
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 we focus on in our business are 5, 10, 11 and 12.
Sustainability governance
at Eltel
In 2022, the position of Head of Sustainability was
created and is part of the Business Development team.
The Head of Sustainability leads the Eltel Sustainability
task force, which manages sustainability topics and
provides overarching strategic guidance. The task force
is developing workstreams that will help to further em-
bed sustainability thinking throughout the organisation.
Going forward, Eltel will develop its CU structures to
manage sustainability throughout our operations.
The task force will have business representatives
from CUs that are part of their respective local manage-
ment teams, as well as the Group HSEQ Director. The
representatives have a range of positions throughout
Eltel in order to ensure the task force has the necessary
competence to cover all aspects of sustainability. The
Sustainability task force reports on a quarterly basis to
the Group Management Team, as well as the President
and CEO, who is ultimately responsible for sustainability
at Eltel.
Eltel Annual Report 2022 24
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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 responsible business
practices. We focus on our sustainability priority areas to minimise our negative impact and
maximise our positive impact on people and the environment.
PRIORITY AREA MATERIAL TOPICS 2021–2023 ACHIEVEMENTS IN 2022
Health and Safety Zero fatality and disability cases
Reduce employee accident rates, including
subcontractor employees
Foster a proactive safety culture
Good progress on LTIFR and the increased use of safe job
analysis (SJA).
Environment
and climate
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 in the share of purchased
fossil energy
Science-based targets approved for scope 1, scope 2 and scope 3.
Over 250 electric vehicles were ordered during the year, on top of the
electric eet of 125 vehicles delivered during the year or earlier.
People and society Be the industry’s most attractive workplace
Contribute to sustainable development and welfare
Focus on attracting, recruiting and retaining employees by promoting
engagement and development opportunities.
Supply chain Ensure HSEQ performance and compliance with
Eltel’s Code of Conduct policy by monitoring
strategic partners
Greater supplier engagement on sustainability performance and
reporting. Setting a supplier engagement climate target to ensure
that 70% of suppliers by emissions will have science-based targets
by 2026.
Business ethics Comply with all relevant laws and regulations,
internal policies and agreements with customers
and suppliers
Code of Conduct and policy training
Roll out of new whistleblowing procedure. Updated Fair Play/
Code of Conduct and GDPR training was launched during the year.
Stakeholder dialogue guides
our approach
We regularly engage with a variety of stakeholders at
different levels across the Group. Stakeholder dialogue
on the relevant topics is used to shape our strategic
decision-making and Eltel’s Sustainability Plan. By
meeting stakeholder expectations, we remain relevant as
a partner, employer and investment opportunity.
See www.eltelgroup.com for more information about our
dialogue with stakeholders.
Eltel Annual Report 2022 25
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Eltel Annual Report 2022 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 challenges
of the current pandemic – it is a mindset that we choose to adopt every day.
Our progress in 2022
We continued to make good progress on our Lost Time Injury
Frequency Rate (LTIFR) during the year. We strive to prevent
serious injuries from occurring by investigating the root causes
of minor injuries and near misses.
In 2022, we rened our Total Recordable Injury Frequency Rate
(TRIFR) by increasing granularity and improving data accuracy.
TRIFR reports all lost time injuries, including minor injuries,
and we ne-tuned our KPIs for light incidents during the year,
including incidents that did not require medical treatment.
We increased our use of digital safe job analysis (SJA) forms
to assess on-site safety risks by raising awareness of safety
analyses and motivating teams by increasing competition
between regions. For example, Eltel Finland increased its use
of SJA forms by around 30% compared to 2021.
CU collaboration on health and safety continues to be an
important way of sharing knowledge. Safety Week was held
throughout the Group and the Health and Safety Managers
met for the rst time in person since before the COVID-19
pandemic, together with the CEO. During the rst quarter of
2022, all Eltel CUs experienced higher sick leave rates due to
COVID-19, resulting in a lack of resources.
As part of Eltel’s risk assessment processes, we have
identied that the health and safety of our personnel is our
main area of focus in terms of our salient human rights risks.
The risk mitigating processes, KPI tracking, incident investi-
gations and reporting to senior management as described
above are prioritised by the company.
Health and safety risks
Eltel has clearly dened the most salient the health and safety
risks for our employees. 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 one site to the next. Eltel is
constantly seeking to identify and implement more modern and
safer solutions and processes in order to reduce risk.
KPIs 2022 2021
Absence due to illness, including long-term
illness, Eltel employees, % 5.7 5.3
Lost time injuries per million working hours
(LTIFR), Eltel employees 3.8 3.8
Total Recordable Injury Frequency per million
working hours (TRIFR), Eltel employees 11.4 25.0
Number of fatal accidents: Eltel and
subcontractor employees 0 0
POLICIES GUIDING FRAMEWORKS
HSSEQ Policy ISO 45001
Code of Conduct SDG 5, 8
3.8
LTIFR per million
working hours.
Eltel employees.
(2021 LTIFR 3.8).
LOST TIME INJURY
FREQUENCY RATE
5.7%
Including long-term illness.
Eltel employees.
(2021 5.3%)
ABSENCE DUE TO ILLNESS
0
Eltel employees and
subcontractors.
FATAL ACCIDENTS
Eltel Annual Report 2022 26
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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 also strive to minimise the
environmental impacts of our operations.
Our progress in 2022
Customers are placing greater demands on climate action.
In response, Eltel developed roadmaps in 2022 for how it will
further develop in the coming years.
We had three climate targets approved by the Science Based
Targets initiative (SBTi) in 2022 that aim to halve our climate
footprint by 2030. The Group-level targets have incorporated
country-level climate roadmaps that will drive emission reduc-
tion throughout our business in the coming years. Read more
about our science-based climate targets on page 28.
The most signicant environmental impact from our own
operations are the emissions from our vehicle eet (our scope 1
emissions). The process of switching to electric vans and/or to
biofuels will continue in 2023 as our CUs experienced delays in
the delivery of electric vehicles. Thus, the transition to electric
vehicles is likely to take several years to complete. Renewable
fuels are the preferred option for heavy vehicles and for vehicles
used in security critical maintenance works.
To reduce the emissions from the use of energy on our
premises (our scope 2 emissions), we switched to renewable
electricity, geothermal energy and efcient district heating at
some of our premises during the year. Collaboration with our
suppliers and customers is an important part of reducing our
emissions (our scope 3 emissions) and we are increasing our
suppliers’ engagement on their emissions and sustainability
reporting in general.
Other important and prioritised environmental topics include
circular economy, waste management and the responsible
sourcing of materials. During the year, waste streams were
re-classied into additional categories to better measure and
monitor waste and to comply with the SBTi requirements.
We work to minimise impact on the physical environmental,
disruption and noise from our work sites.
Environmental risks
Working to minimise vehicle emissions, we face external
challenges related to the supply of electric vehicles, lack of
charging stations in rural areas and increasing renewable
diesel prices.
What do Eltel’s Scope 1, 2 & 3
refer to?
Scope 1 – Direct emissions resulting from fuel use
in Eltel’s car eet and onsite energy use (heating).
Scope 2 – Indirect emissions resulting from the
generation of purchased energy used in Eltel’s
ofce premises.
Scope 3 – All other indirect emissions that occur in
Eltel’s supply chain and are not already included in
scope 2. For example, emissions from commuting
and business travel.
KPIs 2022 2021
Vehicles in entire eet 3,345 2,895
Share of zero- and low-emission vehicles
(cars and vans), % 4.9 1.9
Total fuel consumption of entire eet, litres 6,414,176 6,147,285
Total CO
2
emissions, tCO
2
e, scope 1 16,152 15,372
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 Targets initiative
CO
2
emissions
(scope 1)
(2021 10.8%)
Share of renewable
energy (scope 2)
(2021 31%)
Scope breakdown of total
emissions, %
14.9%
37%
Scope 1, 14.9%
Scope 2, 1.6%
Scope 3, 83.5%
Eltel Annual Report 2022 27
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel’s journey to signicantly reduce
its climate impact by 2030
With a long-term ambition to achieve net zero
by 2050, Eltel had its science-based climate
targets veried by a third-party in 2022.
“Eltel has embarked on a journey to signicantly reduce our
climate impact in the coming years,” says Erno Lehto, Head of
Sustainability at Eltel. “We were one of the rst companies in
our industry to set science-based climate targets and our work
is being recognised and appreciated by our customers, supply
chain partners and other stakeholders.”
Third-party veried climate targets
At the end of 2022, Eltel’s three climate targets were veried
and approved by the Science Based Targets initiative (SBTi),
which is a collaboration between the CDP (formerly known
as the Climate Disclosure Project), the United Nations Global
Compact, World Resources Institute (WRI) and the World Wide
Fund for Nature (WWF).
The SBTi commitment includes the annual reporting of pro-
gress in future annual reports. SBTi approval of Eltel’s targets
guarantees that the Group climate roadmap is aligned with
the most recent climate science on the near-term mitigation of
greenhouse gas emissions in order to achieve the goals of the
Paris Climate Agreement and limit global warming to less than
1.5 °C above pre-industrial levels.
The three targets cover scope 1, scope 2 and scope 3
emissions, respectively:
Scope 1 – emissions reduction target – Eltel has committed
to reduce absolute scope 1 GHG emissions by 42% by 2030.
Eltel’s scope 1 emissions are direct emissions resulting from
fuel consumption in Eltel’s vehicle eet and onsite energy
use (heating).
Scope 2 – emissions reduction target – Eltel has committed
to increase its sourcing of renewable electricity from 31%
to 100% by 2030. Eltel’s Nordic countries are expected to
achieve this target by 2026. Eltel’s scope 2 emissions are
indirect emissions resulting from the generation of purchased
energy consumed in Eltel ofce premises.
Scope 3 – emissions engagement target – Eltel has committed
to ensuring that two-thirds of its suppliers by emissions have
science-based targets to reduce their emissions by 2026.
Eltel’s scope 3 emissions constitute all other indirect emissions
that occur in Eltel’s supply chain that are not already included
in scope 2.
Eltel’s 2030 climate roadmap
The three Group-wide targets will run until 2030 and 2021 is the
base line year. Each country in which Eltel operates has created
its own country-level roadmap to contribute to the Groupwide
targets. The roadmap beyond 2030 – towards net-zero
emissions by 2050 – will be mapped out in the coming years.
Eltel Annual Report 2022 28
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
People and society
Eltel’s goal is to be the most attractive employer in the industry by focusing on employee
engagement and development opportunities. We contribute to society by providing work for
people, as well as ensuring that communication and power networks function as they should.
Our progress in 2022
Eltel’s HR Policy was updated to Human Resource and
Diversity policy to show more clearly that equal opportunity
and diversity is important to Eltel.
With the growing challenge to recruit skilled employees
throughout the entire industry, Eltel stepped up its efforts to
attract, recruit and retain employees in 2022. This included
stepping up incentives for ‘refer a friend’ initiatives, improving
recruitment processes and training recruitment managers.
Greater emphasis was also placed on employer branding,
targeting younger workers through social media channels.
Newcollaborations were initiated with schools and universities
and Eltel regularly attends career fairs at colleges and universi-
ties. Eltel recruited 945 new employees in 2022.
We seek to provide good development opportunities and our
employee loyalty programmes reward long-term employees.
Initiatives to promote the Eltel culture and a greater team spirit
were implemented during the year. Eltel conducted investiga-
tions into the reasons for employee turnover in 2022, which
identied the importance of employee engagement.
All employees have regular performance and development
dialogues with their managers. This helps us to stay focused
on our strategy and to identify learning needs, development
opportunities and potential workplace improvements more
accurately. In 2022, Eltel worked to improve employee dialogue
by training managers and emphasising quality.
The participation rate in the employee engagement survey in
2022 was 75%. The score rate was 1–5, with 5 being the best
score. The highest engagement drivers were ‘Relationship with
Colleagues’ 4.0, ‘Health and Safety’ 4.0 and ‘Meaningfulness
and Participation’ 4.0. The positive developments in these areas
conrm that we are on track towards achieving our strategic goal
of engaged employees, as well as our focus on health and safety.
Societal engagement
Eltel contributes to various local and international organisations
to support people in need.
In 2022, Eltel Group and Eltel Finland donated to Caritas Inter-
nationalis, which responds to crises such as the war in Ukraine.
In addition, every Eltel country unit supports local organisations.
Examples from 2022 include BRIS in Sweden, Sykehusklovnene
in Norway and Knæk Cancer in Denmark. We do not participate in
the political process through direct donatations to political groups.
People and society risks
One of Eltel’s most signicant risks related to people and society
is not being able to attract, recruit and retain the right employees.
Failure to meet our recruitment needs for people with the right
skills and experience would seriously impact our business.
KPIs 2022 2021
Number of employees at year-end 5,063 5,046
Of which < 30 years, % 20 19
Of which > 55 years, % 22 23
Share of male/female at year-end, % 87/13 87/13
Share of women in Group Management Team,
% at year-end 25 25
Share of women in Board of Directors, % at year-end 50 20
POLICIES GUIDING FRAMEWORKS
Human Resource and Diversity
policy
Code of Conduct
UN Global Compact Principles 1, 2,
3, 4, 5, 6, 10
SDG 5, 7, 8, 9, 10, 11
Number of employees
Of which < 30 years: 20%
Of which > 55 years: 22%
5,063
Expenses in wages
and salaries
248.1
EUR MILLION
Engagement score
3.8/5
(2021 3.7)
Eltel Annual Report 2022 29
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Eltel Annual Report 2022 29
Supply chain
Eltel takes overall responsibility for its subcontractors. This includes their work environment,
employees and ultimate deliveries 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.
Our progress in 2022
Eltel continued to ensure the quality of its sourcing and supply
chain management, including our nancial and legal responsi-
bilities, as an integrated part of our business. We recommend
that our suppliers and partners have valid ISO certication –
including ISO 9001, ISO 14001 and ISO 45001. If they do not
hold such certication, they are required to demonstrate their
compliance by signing an agreement and participating in Eltel’s
e-learning courses.
We are increasing our suppliers’ engagement on their emis-
sions and sustainability reporting in general. This will increase
suppliers’ requirements for sustainability data reporting and
investigating whether they could set science -based climate
targets as we focus on reducing our scope 3 emissions in the
coming years. One of our new science-based climate targets
focuses on supplier engagement (read more on page 28).
We regularly conducted supplier assessments and reviews
during the year, both planned and unannounced. In cases in
which potential non-compliance was identied, 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.
KPIs 2022 2021
Number of supplier assessments and reviews 477 320
POLICIES GUIDING FRAMEWORKS
HSSEQ Policy
Code of Conduct
ISO 9001
ISO 45001
ISO 14001
SDG 5, 8, 10, 12, 13
Number of supplier assessments
and reviews
Fatal accidents
Eltel employees a nd
subcontractors
Standard compliance required
477
0
ISO
ISO 9001
ISO 45001
ISO 14001
Eltel Annual Report 2022 30
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Business ethics
Respecting human rights is one of Eltel’s fundamental business principles.
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 2022
During the year, we assessed our alignment to the minimum
safeguards set forth in Articles 3 and 18 of the EU taxonomy.
This assessment was made using the nal report on Minimum
Safeguards issued by the EU platform on sustainable nance.
The reports analysis and recommendations incorporate the
standards set forth in the EU taxonomy: OECD guidelines for
Multinational Enterprise, United Nations Guiding Principles on
Business and Human Rights (UNGPs), the eight ILO conventions
on Fundamental Principles and Rights at Work, and the
International Bill of Human Rights.
As a people company, maintaining an awareness and
understanding of our governing policies is critical to ensuring
business compliance. During 2022, we relaunched our
Fair Play employee training, which is related to our Code
of Conduct. We also provided EU General Data Protection
Regulation (GDPR) training to educate employees on how to
safeguard personal data in their role at Eltel. In addition, new
employees received mandatory Fair Play training as part of
their onboarding process.
Our new whistleblowing procedure (issued in accordance
with the EU whistleblowing directive) was rolled out in 2022.
Compliance with the directive involves having a third-party
service provider manage the procedure to ensure anonymity.
In addition, the procedure provides for local whistleblowing
channels in each country to ensure easy access for anyone
reporting an alleged breach of the Code of Conduct.
In 2022, 25 whistleblowing cases were reported through
local whistleblowing channels. Matters reported included,
among other things, alleged fraudulent invoicing methods
and unfair treatment of employees and/or colleagues. Per-
sonal data breaches are reported through a dedicated GDPR
incident reporting tool. All matters were duly investigated, and
conclusions were reported to the Head of Audit Committee in
accordance with the whistleblowing procedure. All reported
matters were closed during 2022.
In line with the Code of Conduct statement, Eltel complies
with local tax laws as well as international tax regulations such
as OECD Transfer Pricing Guidelines for Multinational Enterpri-
ses and Tax Administrations (OECD Guidelines) in all countries
where Eltel operates in. Eltel aims at reporting taxes correctly
and paying the right taxes at the right time.
Business ethics risks
Eltel operates in a competitive industry with low barriers to entry
and low margins, which increases the risk of corruption, breaches
of competition laws and conicts of interest. Good ethical
behaviour in our operations is promoted by responsible and
sustainable business practices, training in the Code of Conduct
and supporting steering documents. In addition, Eltel Internal
Audit team audited several controls relating to our business
practices during the year.
CODE OF CONDUCT 2022 2021
Code of Conduct training completion rate,
Eltel employees, % 82 89
POLICIES GUIDING FRAMEWORKS
Code of Conduct
Anti-bribery and Anti-corruption policy
Data Protection Policy
Human Resource and Diversity Policy
HSSEQ Policy
Insider Policy
Tax Policy
Information Technology Policy
Whistleblowing Policy
Risk Management Policy
Competition Instruction
UN Global Compact Principles
1, 2, 3, 4, 5, 6, 10
SDG 5, 8, 10, 12
ISO 9001
ISO 45001
ISO 14001
Minimum safeguards alignment summary
Human rights – Eltel has multiple methods for assessing, safeguarding and promoting human
rights. These include but are not limited to the human rights risks assessments made through the
enterprise risk management process, the whistleblowing process, the annual Code of Conduct
training, and Code of Conduct requirements towards our suppliers. Reporting on such matters is
done on a regular basis to Eltel’s executive management and the Board. No employee of Eltel AB
or of any of its subsidiaries have been convicted or being found of being in violation of any laws or
regulations relating to human rights.
Corruption – Eltel has anti-corruption practices in place, such as the whistleblowing channel and
regular trainings in anti-corruption practices, which are governed by Eltel’s Anti-Bribery and Anti-
Corruption Policy as well as the Whistleblowing Policy. Eltel’s Code of Conduct also outlines Eltel’s
stance on Anti-Bribery and Anti-Corruption. Code of Conduct trainings (including anti-corruption prac-
tices) are provided to employees annually. No employee of Eltel AB or of any of its subsidiaries have
been convicted or being found of being in violation of any laws or regulations relating anti-corruption.
Taxation – Eltel treats tax compliance and governance as important elements of oversight, tax risks
are assessed on an ongoing basis and tax compliance matters are reported to senior management
as well as to the Audit Committee. No employee of Eltel AB or of any of its subsidiaries have been
convicted or being found of being in violation of any tax laws or regulations.
Fair competition – Eltel is dedicated to promoting the importance of compliance with competition
laws and regulations. Eltel’s Competition Instruction is used to increase awareness and educate
the workforce on the topic of fair competition. Additional directed training is provided to senior
management. No employee of Eltel AB or of any of its subsidiaries have been convicted or being
found of being in violation of any laws or regulations relating fair competition.
Eltel Annual Report 2022 31
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 32
EU Taxonomy
The EU Taxonomy is the EU’s common classication system for
economicactivities that have the most signicant impact on the
EU’s environmentalobjectives:
1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity and ecosystems
To date, taxonomy reporting is targeted at the rst two environmental
objectives: climate change mitigation and adaptation. The taxonomy
classication system covers those sectors and economic activities that
have the highest potential to avoid and reduce emissions and thereby reach
the goal set by the EU for climate change mitigation – cutting net carbon
emissions by 55% from the 1990 level by 2030 and achieving carbon
neutrality by 2050.
The power sector is one of the major sectors included in the taxonomy.
Correspondingly, Eltel’s operations in the power sector are largely included
in the economic activities specied in the EU Taxonomy (i.e. eligible activi-
ties). All Eltel’s activities that are categorised as eligible are deemed to have
the potential to make a substantial contribution to the rst environmental
objective: climate change mitigation.
The communication sector, which contributes to the digitalisation of
society via modern and high-capacity communication networks, is generally
not included in the activities specied in the EU Taxonomy at the present
time. In line with this, most of Eltel’s operations in the communication
business are not included in the taxonomy (i.e. non-eligible activities).
2022 taxonomy alignment
For the nancial year 2022, Eltel reported the extent to which its operations
are included in the EU Taxonomy (eligible) and which part of these opera-
tions meet the criteria for being sustainable (aligned). Eltel’s operations are
concluded to be taxonomy-aligned when they are assessed to comply with
all the requirements described in the taxonomy. This means that the activity
1) makes a substantial contribution to climate change mitigation, 2) does
no signicant harm to any of the other ve environmental objectives (DNSH)
and 3) complies with the minimum safeguards.
By developing the power grid, Eltel together with its customers
contributes to climate change mitigation through a transition to a green
electricity system. Eltel has performed a DNSH assessment throughout the
organisation, including workshops and other analyses of the fullment of
the DNSH criteria for each activity included in the taxonomy. Based on the
assessment, Eltel has concluded that it complies with the DNSH criteria.
Eltel does not own or operate power grids but offers a full range of services
from planning and construction to maintaining and dismantling the grids.
Eltel’s primary goal is to minimise the environmental impact of these ope-
rations. This involves the preparation of environmental impact assessment
(EIA) and risk assessment or similar environmental surveys, and mitigating
the impact on biodiversity and ecosystems as early as the planning phase.
For climate change adaptation, the key aspect is the resilience of the power
infrastructure to the physical risks related to climate change. The transition
to a circular economy and pollution prevention plays an important role in
Eltel’s operations concerning the construction, maintenance and dismant-
ling of power (and communication) networks as a signicant amount of
materials are used in such operations. The responsible sourcing of materi-
als, recycling and waste management are included in the key environmental
topics for Eltel. To a large extent, Eltel uses reliable waste management
partners who ensure that all waste is properly recycled and recovered. To
further reduce its environmental impact, Eltel continues to expand the use
of professional partners. In addition to environmental impact analyses,
Eltel has assessed that it complies with the minimum safeguards. Further
information about minimum safeguards regarding human rights, corruption,
taxation and fair competition is presented on page 31.
Eltel Annual Report 2022 33
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Net sales
Eltel has evaluated taxonomy eligibility of its business operations accor-
ding to the descriptions of economic activities listed in the annexes of
the Climate Delegated Act and the related NACE codes. Furthermore, an
assessment of substantial contribution to climate change mitigation has
been performed by analysing whether Eltel’s operations meet the technical
screening criteria of each applicable activity. Operations have been
disaggregated to the extent necessary for the analysis.
Eltel identied 34.0% (31.9) of its net sales to be taxonomy-eligible
regarding the economic activities dened in the taxonomy’s environmental
objective: climate change mitigation. Eltel also identied 29.7% of its net
sales to be taxonomy-aligned (environmentally sustainable).
A major part of eligible and aligned net sales relate to activity 4.9 “Trans-
mission and distribution of electricity”. This activity includes Eltel’s power
transmission and distribution services from construction and upgrade
to maintenance and fault repair, as well as smart grid operations relating
to operating the distribution networks. A total of 25.2% of net sales is
deemed to be taxonomy-eligible. Furthermore, Eltel has concluded that
22.5% of its net sales is also taxonomy-aligned. Eltel carries out work for
the power grids that belong to the interconnected European system and
its subordinate systems that are not dedicated to creating or expanding
direct connections to power production plants that are more greenhouse
gas intensive than 100 CO
2
e/kWh. 2.7% of net sales is not deemed to be
aligned, primarily due to direct connections to power production plants that
do not meet the criteria, mainly in Poland. In Germany, many of the electri-
city meters included in power distribution operations do not meet the EU
criteria. Thus, these operations have been evaluated as being non-aligned.
Part of Eltel’s smart grid operations are included in activity 7.5 “Instal-
lation, maintenance and repair of instruments and devices for measuring,
regulation and controlling energy performance of buildings”. 4.1% of total
net sales is included in this activity and it is concluded that 2.8% of total
net sales is taxonomy aligned. Smart grid operations in the Nordics are
generally taxonomy-aligned as the installed meters meet the criteria for
smart meters. In Germany, most of the meters are non-aligned but there are
also meter installations that comply with the taxonomy criteria.
2.4% of total net sales relate to activity 6.14 “Infrastructure for rail trans-
port”. These services are deemed to be fully taxonomy-aligned. Most of
the operations are in Denmark and include, for example, installation and
conguration of equipment related to the digitalisation of railway signalling.
Finland and Poland also conduct operations included in this activity.
Eltel has also identied other taxonomy-eligible operations totalling
2.3% of total net sales. 1.9% of net sales included in these operations
is taxonomy- aligned. Other taxonomy-aligned operations include the
installation of charging stations for electric vehicles (7.4), the installation
of energy efciency equipment in buildings (7.3) and the maintenance of
wind turbines (7.6). Other non-aligned activities include operations related
to certain district heating facilities that do not meet the technical screening
criteria for activity 4.15.
Capital expenditure (capex) and operating expenditure (opex)
Eltel identied 34.7% (36.8%) of capital expenditure and 37.2% (41.4%)
operating expenditure (capex and opex) to be taxonomy eligible. Further-
more, 30.8% of capex and 29.2% of opex were identied as being
taxonomy -aligned. Capex and opex have been included when they relate to
operations generating net sales that are included in the taxonomy. In 2022,
Eltel also included investment in a new car eet as taxonomy-aligned capex
if the capex met the criteria for being sustainable according to taxonomy
activity 6.5 “Transport by motorbikes, passenger cars and light commercial
vehicles”. This mainly concerns electric vehicles.
As the denition of opex is very narrow in the taxonomy, the amount of
total opex in Eltel is negligible. Opex includes the cost of maintenance and
repair of machinery and buildings and short-term lease expenses.
In order to avoid double counting, each business operation that gene-
rates taxonomy-eligible net sales was exclusively assigned to a specic
taxonomy-eligible economic activity. The same procedure was adopted
for the allocation of capex and opex. However, Capex for electric vehicles
was fully included in activity 6.5 and was therefore excluded from the other
taxonomy-eligible activities.
NET SALES
Taxonomy-aligned 29.7%
Taxonomy-eligible but not aligned 4.3%
Non-eligible 66.0%
CAPEX
Taxonomy-aligned 30.8%
Taxonomy-eligible but not aligned 3.9%
Non-eligible 65.3%
OPEX
Taxonomy-aligned 29.2%
Taxonomy-eligible but not aligned 8.0%
Non-eligible 62.8%
Eltel Annual Report 2022 34
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Net sales
Substantial contribution
criteria
DNSH criteria
(Does not significantly harm)
Economic activities
Code
Total
net sales
Pro portion of
net sales
Climate change
miti gation
Climate change
adaptation
Climate change
miti gation
Climate change
adapt ation
Water and marine
resources
Circular economy
Pollution
Bio diversity and
ecosystems
Minimum
safe guards
Taxonomy-aligned
proportion of
net sales 2022
Taxonomy-aligned
proportion of
net sales 2021
Category
(enabling activity)
Category
(transitional
activity)
EUR million % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (taxonomy-aligned)
Electricity generation from wind power 4.3 12.7 1.5% 100% - - Y Y Y - Y Y 1.5% - -
Transmission and distribution of electricity 4.9 185.4 22.5% 100% - - Y - Y Y Y Y 22.5% E -
Infrastructure for rail transport 6.14 19.5 2.4% 100% - - Y Y Y Y Y Y 2.4% E -
Installation, maintenance and repair of energy efficiency equipment 7.3 0.5 0.1% 100% - - Y - - Y - Y 0.1% E -
Installation, maintenance and repair of charging stations for electric vehicles in
buildings (and parking spaces attached to buildings) 7.4 2.8 0.3% 100% - - Y - - - - Y 0.3% E -
Installation, maintenance and repair of instruments and devices measuring,
regulation and controlling energy performance of buildings 7.5 23.4 2.8% 100% - - Y - - - - Y 2.8% E -
Net sales for environmentally sustainable activities (Taxonomy-aligned) (A.1.) 244.4 29.7% 29.7%
A.2. Taxonomy-eligible but not environmentally sustainable activities
(not taxonomy-aligned activities)
Transmission and distribution of electricity 4.9 22.0 2.7%
District heating / cooling distribution 4.15 3.2 0.4%
Installation, maintenance and repair of instruments and devices measuring,
regulation and controlling energy performance of buildings 7.5 10.5 1.3%
Net sales for taxonomy-eligible but not environmentally sustainable activities
(not taxonomy-aligned activities) (A.2.) 35.7 4.3%
Total (A.1 + A.2) 280.1 34.0% 29.7%
B. Taxonomy-non-eligible activities
Net sales for taxonomy-non-eligible activities (B) 543.5 66.0%
Total (A + B) 823.6 100.0%
Total net sales equals to net sales according to the 2022 nancial statements.
Eltel Annual Report 2022 35
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Capital expenditure (capex)
Substantial contribution
criteria
DNSH criteria
(Does not significantly harm)
Economic activities
Code
Total
capex
Pro portion of
capex
Climate change
miti gation
Climate change
adapt ation
Climate change
miti gation
Climate change
adapt ation
Water and marine
resources
Circular economy
Pollution
Bio diversity and
ecosystems
Minimum
safe guards
Taxonomy-aligned
proportion of
capex 2022
Taxonomy-aligned
proportion of
capex 2021
Category
(enabling activity)
Category
( transitional
activity)
EUR million % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (taxonomy-aligned)
Electricity generation from wind power 4.3 0.3 1.1% 100% - - Y Y Y - Y Y 1.1% - -
Transmission and distribution of electricity 4.9 3.8 15.8% 100% - - Y - Y Y Y Y 15.8% E -
Infrastructure for rail transport 6.14 0.6 2.3% 100% - - Y Y Y Y Y Y 2.3% E -
Transport by motorbikes, passenger cars and light commercial vehicles 6.5 2.0 8.2% 100% - - Y - Y Y - Y 8.2% - T
Installation, maintenance and repair of energy efficiency equipment 7.3 0.0 0.0% 100% - - Y - - Y - Y 0.0% E -
Installation, maintenance and repair of charging stations for electric vehicles in
buildings (and parking spaces attached to buildings) 7.4 0.1 0.5% 100% - - Y - - - - Y 0.5% E -
Installation, maintenance and repair of instruments and devices measuring,
regulation and controlling energy performance of buildings 7.5 0.7 2.8% 100% - 2.8% E -
Capex for environmentally sustainable activities (Taxonomy-aligned) (A.1.) 7.4 30.8% 30.8%
A.2. Taxonomy-eligible but not environmentally sustainable activities
(not taxonomy-aligned activities)
Transmission and distribution of electricity 4.9 0.5 2.2%
District heating / cooling distribution 4.15 0.1 0.3%
Installation, maintenance and repair of instruments and devices measuring,
regulation and controlling energy performance of buildings 7.5 0.3 1.4%
Capex for taxonomy-eligible but not environmentally sustainable activities
(not taxonomy-aligned activities) (A.2.) 0.9 3.9%
Total (A.1 + A.2) 8.4 34.7% 30.8%
B. Taxonomy non-eligible-activities
Capex for taxonomy non-eligible-activities (B) 15.8 65.3%
Total (A + B) 24.2 100.0%
Capex includes additions into property, plant and equipment, right-of-use assets and other intangible assets (Notes 25-27 in the consolidated nancial statements).
Eltel Annual Report 2022 36
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Operating expenditure (opex)
Substantial contribution
criteria
DNSH criteria
(Does not significantly harm)
Economic activities
Code
Total
opex
Pro portion of
opex
Climate change
miti gation
Climate change
adapt ation
Climate change
miti gation
Climate change
adapt ation
Water and marine
resources
Circular economy
Pollution
Bio diversity and
ecosystems
Minimum
safe guards
Taxonomy-aligned
proportion of
opex 2022
Taxonomy-aligned
proportion of
opex 2021
Category
(enabling activity)
Category
(transitional
activity)
EUR million % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % % E T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (taxonomy-aligned)
Electricity generation from wind power 4.3 0.1 1.5% 100% - - Y Y Y - Y Y 1.5% - -
Transmission and distribution of electricity 4.9 1.7 22.1% 100% - - Y - Y Y Y Y 22.1% E -
Infrastructure for rail transport 6.14 0.2 2.3% 100% - - Y Y Y Y Y Y 2.3% E -
Installation, maintenance and repair of energy efficiency equipment 7.3 0.0 0.1% 100% - - Y - - Y - Y 0.1% E -
Installation, maintenance and repair of charging stations for electric vehicles in
buildings (and parking spaces attached to buildings) 7.4 0.0 0.3% 100% - - Y - - - - Y 0.3% E -
Installation, maintenance and repair of instruments and devices measuring,
regulation and controlling energy performance of buildings 7.5 0.2 2.8% 100% - - Y - - - - Y 2.8% E -
Opex for environmentally sustainable activities (Taxonomy-aligned) (A.1.) 2.3 29.2% 29.2%
A.2. Taxonomy eligible but not environmentally sustainable activities
(not taxonomy-aligned activities)
Transmission and distribution of electricity 4.9 0.4 4.9%
District heating / cooling distribution 4.15 0.1 0.7%
Installation, maintenance and repair of instruments and devices measuring,
regulation and controlling energy performance of buildings 7.5 0.2 2.3%
Opex for taxonomy eligible but not environmentally sustainable activities
(not taxonomy-aligned activities) (A.2.) 0.6 8.0%
Total (A.1 + A.2) 2.9 37.2% 29.2%
B. Taxonomy non-eligible-activities
Opex for taxonomy-non-eligible activities (B) 5.0 62.8%
Total (A + B) 7.9 100.0%
Opex includes short term leases, maintenance and repair costs of tangible assets. Note that opex as dened in EU Taxonomy is signicantly narrower than Eltel’s
total operating expenditure.
Auditor’s opinion regarding the
statutory sustainability report
To the general meeting of the shareholders in
Eltel AB (publ), corporate identity number 556728-6652
Engagement and responsibility
It is the board of directors who is responsible for the
sustainability report for the year 2022 on pages 4-5 and 22-36
and that it is prepared in accordance with the Annual Accounts
Act.
The scope of the examination
Our examination has been conducted in accordance with
FAR:s auditing standard RevR 12 The auditor’s opinion
regarding the statutory sustainability report. This means that
our examination of the statutory sustainability report is different
and substantially less in scope than an audit conducted in
accordance with International Standards on Auditing and
generally accepted auditing standards in Sweden. We believe
that the examination has provided us with sufcient basis for
our opinion.
Opinion
A statutory sustainability report has been prepared.
Stockholm 29 March 2023
KPMG AB
Fredrik Westin
Authorized Public Accountant
Eltel Annual Report 2022 37
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Board of Directors report 2022
The Board of Directors and the CEO of Eltel AB, corporate registration number 556728-6652, with its
registered office in Stockholm, hereby submit the Annual Report and consolidated financial statements
for the 2022 financial year. Eltel AB and its subsidiaries operate under the Eltel brand.
The consolidated group is called Eltel Group.
Company overview
Eltel is a leading infrastructure and service provider for critical communication
and power networks – infranets. We deliver a comprehensive range of
communication and power services – everything from the design and build
phase to corrective maintenance. This includes design, planning, building,
installing, and securing the operation of networks for a more sustainable and
connected world today and for future generations.
Our customers are primarily owners of communication and power networks.
We offer a 24/7 and extensive geographical presence in our home markets.
Most of our work is conducted through long-term framework agreements
and service agreements that enable us to collaborate with customers to
achieve their objectives.
As a consequence of the global trends affecting society, the infranet
sector is constantly changing. The key ongoing trends driving this change
include increasing customer demands, regulatory requirements, the need
to upgrade ageing power infrastructure and the growing use of renewable
energy in society. Eltel operates in the Nordic market and is also represented
in Poland, Germany and Lithuania.
Communication services
Eltel optimises communication networks and help meet societal needs for
greater digitalisation, which is revolutionising how people live, work and
play. The business is primarily driven by technology upgrades, maintenance
needs and increased demand for improved capacity and faster networks.
Eltel’s main customers are large telecom operators and communication
network owners, other private network owners and municipalities.
Significant events 2022
New strategy aimed at driving sustainable and profitable growth
During the year, Eltel began working with its new strategy – Investing in
Sustainable Profitable Growth 2022–2025. The strategy focuses on
innovation, sustainability and new market development, as well as ex-
panding existing and new business opportunities (read more on page 8).
Growth in net sales
Net sales increased to EUR 823.6 million, compared to EUR 812.6
million in 2021. Eltel sees further opportunities for growth as the market
demand for our services remains strong despite inflation and supply
chain challenges.
Approval of Eltel’s science-based climate targets
Eltel’s new climate targets were approved by the Science Based Targets
initiative at the end of the year (read more on page 28). Eltel’s carbon
reduction targets are in line with the Paris Climate Agreement and
reducing global warming to 1.5 degrees.
New Business Development function established to
create opportunities
Eltel launched a new Business Development function that will both
replicate successful business models and conceptualise new ones.
Business Development includes the Sustainability function, which was
also strengthened with a new Head of Sustainability during the year.
Managing macro-economic challenges
Inflation was a major challenge for the entire industry during the year.
Eltel introduced a cost index for many of its existing and new contracts,
which to some extent protected the company and its subcontractors
from price increases. In principle, all tenders now have such an index.
Its operations generally involve long-term relationships with a steady inflow
of orders generated by framework agreements.
Read more about Eltel’s communication offering on page 11.
Power services
Eltel’s power services enable the electrification of society, which is essential
for building more sustainable energy solutions and achieving national
carbon-neutrality goals. The demand for increased network capacity and
capabilities is a major driver in the power market that will continue in the
foreseeable future.
Primary customers include national transmission system operators and
owners of power distribution grids.
Read more about Eltel’s power offering on page 12.
Major contracts 2022
During 2022, Eltel signed contracts with a combined value of about EUR 825
million (393). Selection of important contracts:
Extension of service framework agreements with Trafikverket, Swedish
Transport Administration (December)
Nationwide framework agreement in Norway with Siemens to install,
service and operate charging stations (November)
Eltel’s largest framework agreement to date, building FTTH throughout
Finland for Valokuitunen (September)
Creation of 18,000 high-speed fibre connections in Denmark for Global
Connect’s business customers (July).
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 38
January–December 2022
Net sales increased by 1.4% to EUR 823.6 million (812.6). In segments net
sales increased by EUR 4.9 million. Organic net sales in segments, adjusted
for currency effects, increased by 1.8%.
Eltel’s main operations in the four Nordic countries are presented as
segments. In January–December, the segments represented 89% (90) of the
net sales.
In Other business net sales increased by EUR 7.5 million.
Other business includes High Voltage, with operations mainly in Poland,
Smart Grids Germany, Lithuania as well as closing activities for Power
Transmission International and Rail businesses.
Operative EBITA
Operative EBITA decreased to EUR -1.9 million (14.8). Operative EBITA
margin was -0.2% (1.8). Operative EBITA in segments was EUR 9.9 million
(24.2) and the margin was 1.4% (3.3). In Other business, operative EBITA
was EUR -4.0 million (-1.8). Operative EBITA was burdened by inflation,
related to fuel, material costs, subcontracting and other cost base. A long
winter, increased sick-leave rates and high employee turnover further
impacted operative EBITA.
Finland
Net sales decreased by EUR 9.5 million, or 3.2%, to EUR 290.1 million
(299.6). During the second half of the year, net sales were in line with
previous year. Volumes during the first half of the year were negatively
affected by a six-week ICT strike and a long winter with deep ground frost.
Power Services noted reduced net sales throughout the year due to lower
customer investment levels as a result of new regulations.
Operative EBITA decreased to EUR 8.2 million (12.7). The operative
EBITA margin was 2.8% (4.2). Inflation, mainly material, fuel and sub-
contracting costs as well as high sick- leave rates, impacted the result
negatively. Furthermore, the delay of certain projects caused by the ICT
strike resulted in cost overruns.
During 2022, Eltel Finland signed contracts with a combined value of
about EUR 412 million (90).
Read more about Eltel Finland on page 13.
823.6
Net sales, EUR million
-1.9
Operative EBITA, EUR million
NET SALES AND GROSS MARGIN
0
50
100
150
200
250
Q4
22
Q3
22
Q2
22
Q1
22
Q4
21
0
200
400
600
800
1,000
MEUR MEUR
Net sales quarterly, MEUR
Net sales, rolling 12 months, MEUR
OPERATIVE EBITA AND EBITA MARGIN
-5
0
5
10
Q4
22
Q3
22
Q2
22
Q1
22
Q4
21
-1
0
1
2
MEUR %
Operative EBITA, quarterly, MEUR
Operative EBITA margin, rolling 12 months, %
Sweden
Net sales increased by EUR 11.6 million, or 6.4%, to EUR 193.8 million
(182.2). Organic growth in local currency was 11.6%. The growth was driven
by Smart Grids and by Communication, thanks to increased activities in
fibre and public infrastructure. Currency effects had a negative impact of
EUR 9.5 million.
Operative EBITA improved to EUR -1.0 million (-1.8). The operative EBITA
margin was -0.5% (-1.0). Improvements came from growth in net sales and
improved efficiency, which offset high employee turnover, increased costs
due to inflation and investments in the efficiency programme “One Eltel”.
During 2022, Eltel Sweden signed contracts with a combined value of
about EUR 182 million (70).
Read more about Eltel Sweden on page 15.
Norway
Net sales increased by EUR 16.4 million, or 10.2%, to EUR 176.8 million
(160.5). Organic growth in local currency was 9.4%. Currency effects had a
positive impact of EUR 1.4 million. The growth was achieved in the areas of
fibre and 5G until the end of Q3. In Q4 we noted reduced purchase volumes
by our major customers and postponements of mobile works.
Operative EBITA decreased to EUR 2.1 million (9.2). The operative EBITA
margin decreased to 1.2% (5.7). The decrease is a consequence of a
change in production mix, cost overruns and challenges in certain projects.
Increased sick-leave rates and inflation impacted further.
During 2022, Eltel Norway signed contracts with a combined value of
about EUR 70 million (64).
Read more about Eltel Norway on page 17.
Denmark
Net sales decreased by EUR 13.6 million, or 15.5%, to EUR 74.3 million
(87.9). Growth in fibre was offset mainly by a partial insourcing of an
agreement by a major customer at the end of Q2 2021. Closing of other
agreements and slower than anticipated ramp up of volumes until Q4
impacted further.
Operative EBITA decreased to EUR 0.6 million (4.2). The operative
EBITA margin was 0.9% (4.8). The result comes from lower volumes and
inflation-related cost increases.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 39
During 2022, Eltel Denmark signed contracts with a combined value of
about EUR 146 million (121).
Read more about Eltel Denmark on page 19.
Other business
Net sales increased by EUR 7.5 million to EUR 99.4 million (91.9) thanks to
realisation of delayed and postponed volumes from 2021 in High Voltage
Poland. Smart Grids Germany was in line with previous year. Power
Transmission Internation (PTI) no longer has any active projects.
Operative EBITA decreased to EUR -4.0 million (-1.8). Excluding the sale
of a real estate in Poland in Q4 2021, operative EBITA increased by EUR
0.3 million. Margins in Smart Grids Germany remained high. High Voltage,
mainly Poland, had a negative operative EBITA of EUR -7.6 million (-8.8).
Inflation and the effects of the war in Ukraine deteriorated the result. Actions
are being taken to mitigate the situation. In PTI all projects are operationally
closed. Administrative closing processes and related costs continue to
burden the result. In the comparative period, PTI contributed positively.
During 2022, Other business signed contracts with a combined value of
about EUR 15 million (47).
Read more about Other business on page 21.
Cash flow
Cash flow from operating activities was EUR 16.4 million (22.3). Main items
included EBITDA EUR 27.8 million (46.5), change in net working capital EUR
4.6 million (-10.1), financial items EUR -7.8 million (-4.0) and income taxes
EUR -4.7 million (-2.7).
Cash flow from operating activitie has historically displayed a strong
seasonal pattern, with weaker cash flow recorded during the period until
the end of the third quarter due to higher production activity. Eltel’s net
working capital level is also impacted by remaining working capital-intensive
projects, mainly in High Voltage Poland. These projects, and delays in them,
result in continued tie up of substantial working capital and are expected to
create volatility in the net working capital also going forward.
Net cash flow from investing activities was EUR -3.9 million (-2.9)
consisting of net capital expenditure of EUR -3.9 million (-4.0) on machinery
and equipment, and in 2021 of EUR -3.8 million from divestment of High
Voltage Germany and EUR 4.9 million from the sale of real estate in Poland.
Cash flow from financing activities was EUR 3.1 million (-13.7). On 17
January 2022, Eltel completed a financing agreement with banks. In
connection with the agreement, Eltel drew a EUR 35.0 million term loan
and repaid the remaining old term loan of EUR 27.0 million. Utilisation of
short-term financing increased by EUR 16.5 million (20.0). Payments of
lease liabilities amounted to EUR 21.6 million (23.8). In 2021 amortisation of
external loans was EUR 10.0 million.
In March 2022, Eltel issued and purchased 972,000 new class C shares in
accordance with the long-term incentive programme LTIP 2021. The share
issue and the purchase had a cash flow impact of EUR 1.0 million and EUR
-1.0 million, respectively.
Financial position, cash and cash equivalents
Equity at the end of the period was EUR 211.3 million (227.9) and total
assets were EUR 621.7 million (630.8). The equity ratio was 37.0% (38.3).
INTEREST-BEARING LIABILITIES AND NET DEBT
EUR million 31 Dec 2022 31 Dec 2021
Interest-bearing debt 125.1 99.8
Leasing liabilities 47.8 54.5
Allocation of effective interest to periods 0.5 0.6
Less cash and cash equivalents -47.9 -32.3
Net debt 125.5 122.6
EUR million 31 Dec 2022 31 Dec 2021
Non-current interest-bearing debt 34.7 25.5
Current interest-bearing debt 90.4 74.2
Total interest-bearing debt 125.1 99.8
Non-current leasing liabilities 31.0 35.8
Current leasing liabilities 16.8 18.6
Total leasing liabilities 47.8 54.5
CREDIT FACILITIES
EUR million 31 Dec 2022 Maturity
Term loan, non-current
1)
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 committed credit facilities 140.0
Commercial paper programme 150.0 N/A
1)
The maturity of the term loan has been extended by one year until January 2025.
Available liquidity reserves, including the committed revolving credit facility,
account overdrafts and cash and cash equivalents, amounted to EUR 96.9
million (142.3). Additional to the committed facilities, the Group also has
access to short-term debt capital markets via a commercial paper pro-
gramme of EUR 150 million. At the reporting date, EUR 33.5 million (73.0) of
the commercial paper programme and EUR 56.0 million (0.0) of the revolving
credit facility were utilised.
Commercial guarantees
On 31 December 2022, the commercial guarantees issued by the banks and
other financial institutions on behalf of the Group amounted to EUR 80.3
million (85.3). The amount of commercial guarantees issued on behalf of
third parties was EUR 0.0 million (0.1).
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Eltel Annual Report 2022 40
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 defined on pages 22–36.
Employees
In 2022, the average number of employees decreased by 2.4% to 5,053
(5,176). With the growing challenge to recruit skilled employees through-
out the entire industry, Eltel stepped up its efforts to attract, recruit
and retain employees in 2022. This included stepping up incentives for
‘refer a friend’ initiatives, improving recruitment processes and training
recruitment managers.
Ensuring that our employees return home safely every day is our top pri-
ority. 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 2022, the Lost Time Injury Frequency rate (LTIFR) decreased
to an all-time low at 3.8.
Being a people company, Eltel is dependent on the engagement of our
employees. We deliver value to our customers through our highly engaged
and competent employees. In September 2022, Eltel conducted an
Employee Engagement Survey comprising 3,547 participants, equivalent
to a 75% employee response rate. The score rate was 1–5, with 5 being
the best score. The highest engagement drivers were “Relationship with
Colleagues” 4.0, “Health and Safety” 4.0 and “Meaningfulness and Partici-
pation” 4.0 and the overall engagement score went up by 0.1 point to 3.8. In
no area did Eltel Group decrease in the score compared to 2021.
For more information how we work with employees, please refer to page
29, and health and safety page 26.
Financial guidance
In May 2022, Eltel removed its financial guidance given the significant
uncertainties in the market due to the war in Ukraine and increased inflation.
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Eltel Annual Report 2022 41
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 identified
deficiencies to top management.
For more information regarding financial risk management, please refer
to note 14 in the Consolidated financial 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.
Risk Management
The goal of Eltel’s Risk Management is to
safeguard strategy execution from unexpected
risks through assessing risks and opportunities
on a daily basis. Risk awareness is part of our
daily mindset.
Country / Solution Unit Group CEO / CFO Group RM Team Board / Audit Committee
Identifies operational risks and opportu-
nities. 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. Confirms
actions and deadlines.
Reviews and approves risks as part of the
Business Plan.
Reports top operational risks to the Audit
Committee at least bi-annually.
Meets bi-annually to review top risks to
identify issues and decide whether further
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
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Eltel Annual Report 2022 42
MOST SIGNIFICANT RISKS
Strategic risk Actions Type
Sales and EBITA development long term:
Through the strategy period of 2023–2025 Eltel sees rather stable demand for its current offering within the telecommunications
segment. Sweden has already reached peak fibre and there are signs of decreasing volumes in Norway and Denmark. When fibre
and 5G installations have peaked, there is a risk of declining sales based on current offering.
Regulatory restrictions on network operator profitability in Finland are effective as of January 2022 causing reduced investments
and thereby negatively impacting Eltel’s sales in the Power distribution market.
High inflation combined with challenges to increase sales prices may impact our ability to improve profitability as planned and there
is a risk of postponed projects from customers.
Identified risks require action to develop the offering, typically by organic growth and/or M&A. Sales and EBITA
Financial risk:
The most significant financial risks are risks related to the availability of financing (refinancing and obtaining new loans) and liquidity.
As it is unlikely that bank financing can be increased in the short term, Eltel will likely have to seek some other form of liquidity
buffer to secure continued operations and investment in growth.
Financing and
liquidity
High dependency on 1-2 key customers especially in Norway and Sweden:
Changes in volumes coming from key customers and possible renegotiations can have a significant impact on the net sales and
profitability in both countries.
There are ongoing activities to find growth and broaden the customer base in both countries. Customers
Operative risk Actions Type
Health and safety in the working environment:
Lack of subcontractor availability on the market may lead to the selection of subcontractors with less experience and/or focus on
HSE, and thus their usage may lead to increased incidents and/or reputational damage to Eltel.
Focus on sharing of learnings from incidents and cascading safety bulletins throughout the organization including subcontractors,
mainly to technicians and project managers, to improve awareness and incident prevention.
Health and safety
Resources and competences:
The availability of resources and finding the right competences is a challenge. The increasing salary levels make it even more
challenging to attract and retain the right people.
Increasing resources through recruitment and hiring subcontractors. Actions also include moving resources between teams if
possible to ensure the production capacity.
Sales and EBITA
Inflation:
Inflation has sharply increased partly as a result of the war in Ukraine. Especially increasing fuel and material prices, subcontracting
costs, logistics costs and increasing salary levels affect Eltel’s business.
Mitigating factors include price increases in customer contracts. Inflation
High Voltage Poland:
There are significant profitability challenges in High Voltage, primarily in Poland. Main reasons for the challenges are increased
material and labour costs due to high inflation. Furthermore, there are delays and problems with closing old projects, and a
challenging market in general.
Given the difficult conditions we are re-evaluating strategic alternatives for the Polish operations. High Voltage
Poland
Climate change:
There is a risk that in tendering and planning phase the increasing climate related requirements coming from regulation and potential
climate related events are not accurately estimated, leading to increased costs, penalties and/or reputational damage for Eltel.
Ensuring that climate risks are considered during the tendering and planning phase. Climate
IT & Cybersecurity:
Increased cybercrime activity can present risks to the Group’s data security and continuity. Human behavior is a key risk for IT
security (e.g. downloading of unlicensed or malicious software or improper data transfers).
Investing in capabilities to identify serious threats to security and continuity.
Security training given high focus to secure that the human firewall is in place.
IT & Cybersecurity
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Eltel Annual Report 2022 43
Remuneration of senior executives
For information regarding remuneration to senior executives in 2022 and
2021, please refer to note 30 Remuneration to senior executives, in the
Consolidated financial 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 guide-
lines for remuneration to senior executives. These guidelines do not apply to
any remuneration decided or approved by the general meeting, e.g. remuner-
ation 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 justify doing so in an indi-
vidual case and such deviation is necessary in order to meet the Company’s
long-term interests and sustainability or to ensure the company’s financial
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 promote the company’s business strategy,
long-term interest and sustainability
The Board of Directors considers that a prerequisite of the successful
implementation of the company’s business strategy and safeguarding of
its long-term interests, including its sustainability, is that the company is
able to recruit and retain a highly competent management with capacity of
achieving specified goals. To this end, it is necessary that the company can
offer competitive remuneration to motivate senior executives to do their
utmost. Variable cash remuneration covered by these guidelines shall be
based on criteria that aim at promoting the company’s business strategy
and long-term interests, including its sustainability, and where the fulfilment
of the criteria is determined by the method set out below. For a description
of the company’s strategy, please refer to
www.eltelgroup.com/investors/investor-information/strategy-and-targets/.
Forms of remuneration
The remuneration to senior executives shall be based on market terms.
The remuneration may consist of fixed base salary, variable remuneration,
pension, and certain other benefits. In addition, the general meeting may –
regardless of these guidelines – resolve on share-related or share price-
related remuneration.
Fixed base salary
Fixed base salary for senior executives reviewed yearly and in accordance
with local practices. The fixed base salary constitutes 60-80% of total
remuneration 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 – financially 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 financial,
i.e. EBITA, net working capital (NWC) or net debt in relevant currencies and
safety measured as the lost time injury frequency rate (LTIFR). A minor part
of certain senior executives’ key performance criteria can be discretionary
under special circumstances.
The minimum financial performance of the company for any STI pay-out
is defined by the Board of Directors as a level of result in EBITA. This level is
set to guarantee a lowest level of earnings for the company before any STI
pay-out is made.
The short-term incentives can amount to a maximum of 80% of the fixed
base salary for the CEO and 60% for other senior executives. At full out-
come, 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 specific situations, for example in relation to potential divestments,
M&A or specific projects, Eltel may offer cash bonuses that are conditional
on the success of the specific transaction or project.
Long-term Incentives (LTI)
Senior executives can be offered share-related or share price-related
remuneration. LTI are intended to 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.
Other benefits
Pension
Senior executives are offered pension benefits that are primarily based
on defined insurance payments and in accordance with local practices.
The pension benefits are generally funded through payments to insurance
companies or trustee-administered funds.
Company car
Senior executives are offered a company car and other benefits (such as
allowances to physical activity, personal health, lunch facilities, health
insurance etc.) in accordance with local rules, regulations, and practices in
each country.
Other benefits constitute 4–14% of total remuneration excluding LTI and
assuming a 50% outcome of STI.
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Eltel Annual Report 2022 44
Notice of termination and severance pay
The senior executives’ employment or contractual agreements shall be valid
until further notice or for a specified period of time.
The notice period is twelve months for the CEO in the event of termination
by the company and twelve months in the event of termination by the CEO.
In the event of termination by the company, the CEO is entitled to a sever-
ance pay equivalent of twelve months’ fixed base salary and payable in one
sum. The total amount of the salary and severance payment for the CEO
may not exceed an amount corresponding to two years’ fixed base salary.
The notice period is twelve months for other senior executives in the event
of termination by the company and six months in the event of termination by
other senior executives themselves. No other senior executive than the CEO
is entitled to severance payment.
Salary and terms of employment for employees
In preparing the Board of Directors’ proposal for these remuneration guide-
lines, 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 guidelines when
there is a need for significant changes to the guidelines, however at least
every four years. The Board of Directors’ proposal is prepared by the
Remuneration Committee. The chairman of the Board of Directors may chair
the Remuneration Committee. In order to manage conflicts of interest, other
members of the Remuneration Committee who are elected by the Annual
General Meeting must be independent in relation to the company and the
senior executives.
The Remuneration Committee shall, inter alia, monitor and evaluate the
application of the guidelines for remuneration 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 addresses matters related to remuneration and passes
resolutions about them, insofar as they are affected by the matters.
If the Annual General Meeting does not resolve to adopt guidelines when
there is a proposal for such, the Board of Directors shall submit a new
proposal no later than the next Annual General Meeting. In such cases,
remuneration shall be paid in accordance with the current guidelines or,
ifno guidelines exist, in accordance with the company’s practice.
External advisors are used in the preparation of remuneration-related
matters when deemed necessary.
Subsequent events
Eltel AB establishes Sustainability-Linked Finance Framework and
contemplates issuance of hybrid capital securities
On 24 March 2023, it was announced that Eltel establishes Sustainability-
Linked Finance Framework and contemplates issuance of hybrid capital
securities. For more information, please refer to note 35 Events after
balance sheet date in the Consolidated financial statements.
Pamela Lundin appointed Director of Business Development
On 14 February 2023, it was announced that Pamela Lundin has been
appointed Director of Business Development for Eltel and member of the
Group Management Team as of 13 March 2023. Pamela Lundin will be
leading the newly instituted Business Development function.
Corporate Governance Report
Eltel has issued a Corporate Governance Report for the financial year 2022.
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 2022, the total number of shares amounts to
158,231,081 divided into 156,736,781 ordinary shares with 1 vote per share
and 1,494,300C shares with 1/10 vote per share. The share capital entered
in the trade register per 31 December 2022 is EUR 159,575,695.
More about the Eltel share please refer to page 95–96.
Dividend policy
A dividend policy has been adopted whereby 50% of Eltel’s consolidated
net profit shall be paid in dividends over time (with flexibility in relation to the
pay-out ratio).
The Parent Company
Eltel AB owns and governs the shares of Eltel Group. The Company holds
management functions but has no operative business activities and its risks
are mainly attributable to the value and activities of its subsidiaries.
The Parent Company’s income amounted to EUR 2.5 million (2.2) related
to support function services provided to the Group. The operating expenses
amounted to EUR 7.3 million (6.9).
Financial income amounted to EUR 21.5 million (22.1) related to interest
income from Group companies. Financial expenses amounted to EUR 1.9
million (3.2) and Group contribution of EUR 14.5 million (14.0) was given to a
subsidiary company. Net result was EUR 0.3 million (0.1).
The Board’s proposal for the distribution of profits
The Parent Company’s non-restricted equity on 31 December 2022
was EUR 285,256,998.77 of which the net profit for the year was EUR
310,289.34. The Board of Directors proposes to the Annual General Meeting
that no dividend be paid for the year 2022 and that the non-restricted equity
of EUR 285,256,998.77 be retained and carried forward.
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Eltel Annual Report 2022 45
Corporate
Governance report
Eltel AB (publ) (hereafter referred to as “Eltel” or
the “Company”) is a Swedish public limited liability
company with its shares admitted to trading on
Nasdaq Stockholm.
Eltel complies with the guidelines and provisions of its Articles of
Association, the Swedish Companies Act (Sw. Aktiebolagslagen
(2005:551)), the Swedish Annual Accounts Act (Sw. Årsredovisningslagen
(1995:1554)), the rules and regulations of Nasdaq Stockholm’s Rule Book
for Issuers, as well as other applicable Swedish and international laws and
regulations. Eltel applies the Swedish Corporate Governance Code (the
“Code”), issued by The Swedish Corporate Governance Board (Sw. Kollegiet
för svensk bolagsstyrning), available at www.corporategovernanceboard.se.
Eltel’s Audit Committee has reviewed this Corporate Governance Report
(the “Report”) and confirms that the description of the main features of
the internal audit and risk management section, as related to the financial
reporting process, is consistent with the financial statements, as set out in
Eltel’s Annual Report 2022.
Eltel’s governance structure
Eltel’s internal governance is regulated by the Swedish Companies Act and
the Code.
Shareholders
Ownership structure
As per 31 December 2022, Eltel has 3,621 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 14.3%, the Fourth
Swedish National Pension Fund (AP4) 9.6%, and Heikintorppa Oy 7.9%.
The four largest shareholders referred above together represent 48.2% of
the votes in the Company.
ELTEL’S GOVERNANCE STRUCTURE
CEO
NorwayFinland Denmark
Other
business
Sweden
Legal
Business Development
Communications
& Investor Relations
Finance
& Administration
Board of
Directors
Annual
General
Meeting
Audit Committee
Auditors
Remuneration
Committee
Nomination Committee
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Eltel Annual Report 2022 46
Shares and votes
Eltel’s shares are listed on Nasdaq Stockholm, under the trading symbol
“ELTEL”. As per 31 December 2022, the total number of shares amounts to
158,231,081divided into 156,736,781ordinary shares with 1 vote per share
and 1,494,300 C shares with 1/10 vote per share. The share capital entered
in the trade register per 31 December 2022 is EUR 159,575,695.
The General Meeting of shareholders
The General Meeting of shareholders is Eltel’s highest decision-making
body. In addition to the Annual General Meeting of shareholders, Extra-
ordinary General 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 financial statements
Deciding on the distribution of dividends
Discharging the company’s Board of Directors and CEO from liability for
the financial year
Electing the Companys 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 Official 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 informa-
tion 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 2022
Eltel’s Annual General Meeting was held on 11 May 2022. Shareholders repre-
senting 106,318,590 shares, constituting 67.2% of the total number of shares
and votes in the Company, participated by exercising their voting rights by
postal voting. Matters addressed at the meeting included the following:
Resolution regarding adoption of the profit and loss statement and the
balance sheet and the consolidated profit and loss statement and con-
solidated balance sheet and resolution regarding appropriation of the
Company’s profit 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, Gunilla Fransson, Joakim Olsson and
Roland Sundén and election of Ann Emilson and Erja Sankari as
members of the Board of Directors
Election of KPMG AB as the auditor (whereby it was announced that
Fredrik Westin will continue as auditor-in-charge)
Resolution regarding approval of the Remuneration Report for 2021
Resolution regarding a share-based long-term incentive programme
2022 (“LTIP 2022”)
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 2023 and Annual Report 2022
Eltel’s Annual General Meeting 2023 will be held on 11 May 2023.
The Annual Report 2022 will be made available on the Group website
from week 13, 2023, www.eltelgroup.com and at Eltel AB headquarters,
Adolfsbergsvägen 13, Bromma, Sweden from week 16, 2023.
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 of the Board of Directors. The
Nomination Committee is also to make proposals on the election and remu-
neration of the statutory auditor. Shareholders in Eltel are invited to submit
proposals to the Nomination Committee. The Nomination Committee shall
pay special attention to the requirements relating to diversity and breadth of
qualifications, experience, and background, as well as the requirement to
strive for gender balance in the Board of Directors.
An annual evaluation of the Board of Directors’ work, expertise, compo-
sition, 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 2023
For the 2023 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)
Thomas Ehlin, 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 2023 Annual
General Meeting will be published in the notice convening the 2023 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 organisation
and administration of the Company’s affairs. The Board of Directors shall
continuously assess the Group’s financial situation, as well as ensure that
the Company’s organisation is structured in such a way that the accounting,
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Eltel Annual Report 2022 47
management of funds and the financial conditions are securely controlled.
The Board of Directors is also responsible for setting objectives and strat-
egies, ensuring efficient systems for follow-up and control of the Company’s
operations, identifying how sustainability issues impact risks to and business
opportunities for the Company, and that satisfactory controls are in place to
ensure the Company’s compliance with laws and other regulations applicable
to Eltel’s operations. Furthermore, the Board of Directors shall ensure the im-
plementation of appropriate policies and other steering documents regarding
the Company’s conduct and that any public disclosure of information is made
in accordance with laws and established practices (including Nasdaq Stock-
holm’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.
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 Direc-
tors’ 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 In-
struction for the CEO of Eltel, as well as an Instruction for financial reporting.
Board of Directors in 2022
As per 31 December 2022, the Board of Directors consists of six ordinary
members and two employee representatives as ordinary members, and one
deputy employee representative:
Ulf Mattsson, Chairman
Ann Emilson
Gunilla Fransson
Joakim Olsson
Erja Sankari
Roland Sundén
Björn Tallberg, employee representative
Stefan Söderholm, employee representative
Andreas Nilsson, deputy employee representative.
The members of the Board of Directors are presented in greater detail in the
section “Board of Directors” on page 51.
The Chairman Ulf Mattsson and the Board members Ann Emilson, Gunilla
Fransson, Erja Sankari and Roland Sundén are deemed to be independent
of the owners and the Company. Joakim Olsson is deemed to be independ-
ent of the Company but dependent on significant shareholders due to his
positions in relation to Solero Luxco S.á.r.l
Matters for the Board of Directors during 2022
In 2022, the main focus of the Board of Directors was to ensure the imple-
mentation of the Company’s Operational Excellence strategy, improvement
of profitability and that other activities for strengthening the balance sheet
and lowering the net debt also took place.
In 2022, the Board of Directors held 18 meetings. For details of Board
member participation in Board meetings, please see table above.
MEMBERS OF THE BOARD OF DIRECTORS
Name Position
Year
of birth
Election
year
Share
holding
Remuneration
EUR
Independence
from main owners
Independence
of the Company
Ulf Mattsson Chairman 1964 2017 129, 000 117,700 Yes Yes
Håkan Dahlström
1)
Member 1962 2017 200,000 14,567 Yes Yes
Ann Emilson
2)
Member 1965 2022 29,800 Yes Yes
Gunilla Fransson Member 1960 2016 52,567 Yes Yes
Joakim Olsson Member 1965 2018 44,367 No Yes
Erja Sankari
2)
Member 1973 2022 29,800 Yes Yes
Roland Sundén Member 1953 2018 75,000 52,567 Yes Yes
Stefan Söderholm Employee represent. 1960 2021 Yes No
Björn Tallberg Employee represent. 1976 2015 Yes No
Mats Johansson
1)
Deputy employee rep. 1971 2021 Yes No
Andreas Nilsson
2)
Deputy employee rep. 1976 2022 Yes No
1)
Until May 2022.
2)
From May 2022.
Information about the Board of Directors’ other assignments can be found on page 51.
BOARD MEETING PARTICIPATION 2022
11
Jan
31
Jan
16
Feb
16 Feb
(extra)
10
Mar
24
Mar
03
May
11
May
17
May
01
June
22
June
25
July
21
Aug
20
Sep
01
Nov
21
Nov
14
Dec
21
Dec
Ulf Mattsson
Håkan Dahlström
1)
Ann Emilson
2)
Gunilla Fransson
Joakim Olsson
Erja Sankari
2)
Roland Sundén
Stefan Söderholm
Björn Tallberg
Mats Johansson
1)
Andreas Nilsson
2)
1)
Until May 2022.
2)
From May 2022.
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Eltel Annual Report 2022 48
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 2022, 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 final 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 office as the Board of Directors itself. The main responsi-
bilities of the committees, as further outlined below, are to prepare matters
that are within the Board of Directors’ decision power.
The Audit Committee
The main responsibilities of the Audit Committee are to:
Monitor the Company’s financial reporting
Monitor the effectiveness of the Company’s internal control, internal
audit, and risk management
Keep itself informed regarding the audit of the Annual Report and Group
accounts
Review and monitor the impartiality and 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 specifically delegated from the Board
of Directors, if any.
As part of the tasks described above, the Chairman of the Audit Committee
shall support senior management with matters related to financial reporting
and 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,
financial reporting, and media contacts, particularly in the event of a crisis.
The Audit Committee in 2022
As per 31 December 2022, the Audit Committee consists of four members:
Gunilla Fransson (Chairman), Joakim Olsson, Erja Sankari and Roland Sundén.
In 2022, the Audit Committee held six meetings, at which Eltel’s external
auditor and representatives of the Company’s management were present.
AUDIT COMMITTEE PARTICIPATION 2022
16 Feb 02 May 25 July 11 Oct 01 Nov 12 Dec
Gunilla Fransson
Joakim Olsson
Erja Sankari
1)
Roland Sundén
1)
From May 2022.
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 remuner-
ation 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 2022
As per 31 December 2022, the Remuneration Committee comprises three
members: Ulf Mattsson (Chairman), Ann Emilson and Roland Sundén.
The Remuneration Committee held three meetings in 2022.
REMUNERATION COMMITTEE PARTICIPATION 2022
10 Feb 5 Oct 30 Nov
Ulf Mattsson
Håkan Dahlström
1)
Ann Emilson
2)
Roland Sundén
1)
Until May 2022.
1)
From May 2022.
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 2022 will be submitted for approval at Eltel’s
Annual General Meeting 2023.
External Audit
The Annual General Meeting appoints an external auditor for one year at
a time. The external auditor is responsible for auditing the annual financial
statements of the Group and Parent Company.
The external auditor also reviews the third quarter interim report, the
Corporate Governance Report, the Sustainability Report and the Company’s
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 financial
statements. The external auditor attends at least one Board meeting
each year.
External auditor in 2022
The Annual General Meeting in 2022 elected KPMG AB as Eltel’s external
auditor for a one-year mandate, with Fredrik Westin as auditor-in-charge.
In 2022, 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.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 49
Group Management Team
Chief Executive Officer
Eltel’s President and Chief Executive Officer (CEO) reports to the Board of
Directors. As of 1 August 2022, Håkan Dahlström is the President and CEO
of the Eltel Group. The CEO’s responsibility is governed by the Swedish
Companies Act, the Swedish Annual Accounts Act, the Company’s Articles
of Association, directions given by the General Meeting, Eltel’s Instructions
to the CEO and other 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 2022). 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
1)
:
kan Dahlström, President and CEO
Saila Miettinen-Lähde, CFO
Henrik Sundell, General Counsel
Elin Otter, Director, Communications and Investor Relations
Pamela Lundin, Director, Business Development
Juha Luusua, Managing Director, Eltel Finland
Lars Nilsson, Managing Director, Eltel Sweden
Thor-Egel Bråthen, Managing Director, Eltel Norway
Claus Metzsch Jensen, Managing Director, Eltel Denmark.
Information on the members of the GMT can be found in the Annual Report
for 2022 on page 52.
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 financial reporting to be
applied at all Eltel Group companies. The manual’s objective is to provide
guidance on Eltel Group accounting principles to be applied in Group
reporting as well as preparation of the consolidated financial statements.
Fundamental Eltel policies cover areas such as authorisation, Code of
Conduct, internal control and risk management, reporting of suspected vio-
lations 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 identified.
The CEO is primarily responsible for implementing the Board of Directors’
instructions in the day-to-day work. The CEO regularly reports to the Board
based on established procedures. Furthermore, monthly operational
business reviews are conducted with the CEO and CFO.
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 communica-
tions, 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 financial
position is addressed. The Remuneration and Audit Committees play key
roles in terms of, for example, remuneration, financial statements and inter-
nal control. Prior to the release of interim reports and the Annual Report, the
Audit Committee and the Board of Directors review the financial statements.
Eltel’s management conducts a monthly follow-up of earnings, 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 identi-
fied deviations are addressed at the Audit Committee meetings or escalated
earlier, when appropriate.
The Board of Directors meets with the auditors once a year to review the
internal controls and, in specific cases, to instruct the auditors to perform
separate reviews in specific areas. The auditors attend all regular Audit
Committee meetings.
Priority areas in 2022
Eltel’s significant priority areas for 2022 included the following:
Mitigating inflation through indexes and cost compensation
from customers
Price increases in new tenders
Improving commercial capabilities
Expanding our customer base and broadening our offering
Prioritise core operational improvements.
Internal audit 2022
Internal audit 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 and control testing
to assess process/control compliance and risk management. The internal
audits covered a selection of customer projects and business processes.
The outcome of the internal audits and control testing has been followed-up
and communicated accordingly. The function will continue to focus on testing
and the development of internal controls, as well as risk management within
customer projects and key business processes as part of its internal audit
scope as outlined in the 2023 plan.
Risk management
Please see Board of Director’s report page 42–43.
1)
Casimir Lindholm, President and CEO, left the company on 31 July 2022 and was replaced on 1 August
2022 by the current President and CEO, Håkan Dahlström. Leif Göransson, Managing Director, Eltel Sweden
was replaced on the 9 January 2023 by the current Managing Director, Eltel Sweden, Lars Nilsson. Leif
Göransson left the company on 31 March 2023. Pamela Lundin, Director, Business Development, joined the
company on 13 March 2023.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 50
Shares held in Eltel as of 31 December 2022.
Board of Directors
ANDREAS NILSSON
Member of the Board
– Deputy Employee
Representative, since 2022
Born: 1976
ANN EMILSON
Member of the Board since
2022
Born: 1965
M.Sc. Industrial Manage-
ment and Engineering
Positions and other
board member ships: E V P,
Global Sales & Marketing at
Tobii AB.
Board committees: Member
of the Remuneration
Committee
Previous positions: Head
of Business Unit Public &
Key at Telia 2019–2021. Vice
President, Retail, Telecom
and Utility Business at CGI
Stockholm 2017–2019.
Various managerial positions
at Ericsson AB 1989–2016.
Shareholding:
ERJA SANKARI
Member of the Board since
2022
Born: 1973
M.Sc. Economics
Positions and other board
member ships: EVP and
Chief Operating Officer at
iLOQ. Member of the Board
of Nurminen Logistics and
Partnera Oyj. Chairman of
the Board of Oulu Chamber
of Commerce.
Board committees: Member
of the Audit Committee
Previous positions: Vice
President, Global Supply
Chain at Nokia 2021–2022.
Vice President, Supply
Chain Engineering at Nokia
2018–2020. Head of
Oulu Factory at Nokia/
Nokia Siemens Networks
2013–2018. Various
managerial positions at NSN
2008–2013 and at Nokia
19982008.
Shareholding:
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. Chairman of
the Avisory Board of Arvos
Group and Dywidag.
Board committees: Member
of the Audit Committee
Previous positions: Member
of the Board of Logstor A/S
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:
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, Prima Vård AB
and Attendo. Member of
the Board of Addtech AB,
Oras Invest Oy and Priveq V
AB. Advisor at EQT and PJT
Partners.
Board committees: Chair-
man of the Remuneration
committee
Previous positions:
Chairman of the Board of
AcadeMedia 20102017,
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:
129,000 shares through
SIEM Design AB
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
19852008.
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:
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 Remunera-
tion 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 20002003.
Shareholding:
75,000 shares
BJÖRN TALLBERG
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:
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 51
Group Management Team
Shares held in Eltel as of 31 December 2022.
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 Corpo-
ration 2015–2017. Deputy
CEO and CFO at Talvivaara
Mining Company Plc
2005–2015.
Shareholding:
10,700 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:
18,856 shares
PAMELA LUNDIN
Director, Business
Development, since 2023
Born: 1970
M.Sc. Political Science
Positions and other board
member ships: Member of
the Chamber of Commerce
and Industry of Southern
Sweden.
Previous positions: CEO
at Enercon’s Swedish,
Norwegian and Finnish
operations, 2022–2023.
COO, Enercon GmbH
Germany Filial, 2011–2023.
Vice CEO and Member of
the Board of Enercon Energy
Converter AB, 19992011.
Project Manager/Project
Developer, Eurowind AB,
19971999.
Shareholding:
KAN DAHLSTRÖM
President and CEO since
2022
Born: 1962
M.Se. Computer technology
and M.Sc. Digital Tech-
nology
Positions and other board
member ships:
Previous positions: CEO
at Fujitsu Sweden AB
2020–2022. CEO at Tieto
Sweden AB and Executive
Vice President, Tieto
Corporation 2014–2020.
President, Mobile Business
area at TeliaSonera AB
20102012. President,
Broadband Business area at
TeliaSonera AB 2008–2010.
Commander at Swedish
Royal Navy.
Shareholding:
200,000 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:
14,034 shares
LARS NILSSON
Managing Director,
Eltel Sweden, since 2023
Born: 1967
B.Sc. Business
Administration
Positions and other board
member ships:
Previous positions:
CEO, CERTEGO Group,
2018–2022. CEO,
Marum Management AB,
2016–2018. CEO, Imtech
VS-teknik AB, 2015. CEO,
Ericsson Local Services
AB, 2012–2015. CEO,
Marum Management AB,
20102012. CEO, GoExcel-
lent AB, 2008–2010. Various
management positions,
Microsoft, 1998–2008.
Shareholding:
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 Direc-
tor Country Unit Finland at
Eltel 2008–. SVP Electricity
at Eltel Networks/ Group
Corporation 2006–2007.
Shareholding:
162,323 shares
THOR-EGEL BRÅTHEN
Managing Director,
Eltel Norway, since 2018
Born: 1965
INSEAD Executive
Management Programme,
Certified service electronics
technician
Positions and other board
member ships:
Previous positions:
Director Fixed Telecom/
Deputy Chief Executive
Officer at Eltel Networks AS
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:
CLAUS METZSCH JENSEN
Managing Director,
Eltel Denmark, since 2018
Born: 1968
M.Sc. Business
Administration
Positions and other board
member ships: Member of
the Board of NKEL I/S.
Previous positions: Vice
President at Caverion A/S
2016–2017. Senior Vice
President at TDC A/S
2011–2016.
Shareholding:
19,000 shares
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Eltel Annual Report 2022 52
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Consolidated
financial statements
Eltel Annual Report 2022 53
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
2022
2021
Net sales
823.6
812.6
Cost of sales
7
-748.9
-724.5
74.7
88.1
Other income
7,8
0.9
5.5
Selling and administrative expenses
7
-77.2
-78.1
Other expenses
7,9
-0.4
-1.0
Operating result (EBIT)
-2.0
14.5
Financial income
0.2
0.1
Financial expenses
-9.6
-5.8
Net financial expenses
11
-9.5
-5.8
Result before taxes
-11.4
8.7
Taxes
12
-3.5
-3.8
Net result
-14.9
4.9
Attributable to:
Equity holders of the parent
-15.0
4.3
Non-controlling interest
26
0.1
0.6
Earnings per share (EPS)
13
Basic, EUR
-0.10
0.03
Diluted, EUR
-0.10
0.03
EUR million
Note
2022
2021
Net result for the year
-14.9
4.9
Other comprehensive income:
Items that will not be reclassified to profit and loss
Revaluation of defined benefit plans, net of tax
7.8
2.6
Items that may be subsequently reclassified to profit and loss
Net investment hedges, net of tax
-0.0
0.3
Currency translation differences
-9.1
1.3
Total
-9.1
1.6
Other comprehensive income/loss for the year, net of tax
-1.3
4.2
Total comprehensive income/loss for the year
-16.2
9.1
Total comprehensive loss attributable to:
Equity holders of the parent
-16.2
8.5
Non-controlling interest
26
0.1
0.6
Eltel Annual Report 2022 54
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Consolidated balance sheet
EUR million
Note
31 Dec 2022
31 Dec 2021
ASSETS
Non-current assets
Goodwill
27
256.0
265.0
Intangible assets
27
35.3
39.6
Property, plant and equipment
28
10.7
11.6
Right-of-use assets
29
46.5
53.3
Deferred tax assets
24
16.3
18.4
Financial assets
20,31
7.1
1.1
Total non-current assets
371.9
389.1
Current assets
Inventories
21
24.8
17.2
Trade and other receivables
4,17,20
177.1
192.3
Cash and cash equivalents
47.9
32.3
Total current assets
249.8
241.8
TOTAL ASSETS
621.7
630.8
EUR million
Note
31 Dec 2022
31 Dec 2021
EQUITY AND LIABILITIES
Equity
15
Share capital
159.6
158.8
Other equity
44.4
61.4
Equity attributable to shareholders of the parent
204.0
220.2
Non-controlling interest
26
7.4
7.7
Total equity
211.3
227.9
Non-current liabilities
Interest-bearing debt
16,17
34.7
25.5
Leasing liabilities
16,17,29
31.0
35.8
Retirement benefit obligations
31
6.0
14.4
Deferred tax liabilities
24
10.3
10.7
Provisions
22
2.6
2.7
Other non-current liabilities
0.6
0.7
Total non-current liabilities
85.2
89.8
Current liabilities
Interest-bearing debt
16,17
90.4
74.2
Leasing liabilities
16,17,29
16.8
18.6
Provisions
22
3.3
6.0
Advances received
4
50.6
35.8
Trade and other payables
17,23
164.1
178.5
Total current liabilities
325.2
313.1
Total liabilities
410.4
402.9
TOTAL EQUITY AND LIABILITIES
621.7
630.8
Eltel Annual Report 2022 55
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Consolidated statement of cash flow
EUR million
Note
2022
2021
Cash flow from operating activities
Operating result (EBIT)
-2.0
14.5
Adjustments:
Depreciation and amortisation
29.8
32.1
Gain/loss on sales of assets and business
-0.1
-2.6
Defined benefit pension plans
-3.3
-3.3
Other non-cash adjustments
-0.1
-1.5
Cash flow from operations before interests, taxes and changes in working capital
24.2
39.1
Interests received
0.2
0.1
Interest and other financial expenses paid
-7.9
-4.1
Income taxes received/paid
-4.7
-2.7
Cash flow from operations before changes in working capital
11.8
32.4
Changes in working capital:
Trade and other receivables
8.7
9.4
Trade and other payables
3.8
-14.4
Inventories
-7.9
-5.0
Changes in working capital
4.6
-10.1
Net cash from operating activities
16.4
22.3
EUR million
Note
2022
2021
Cash flow from investing activities
Purchases of property, plant and equipment (PPE)
-4.1
-4.4
Proceeds from sale of property, plant and equipment ( PPE)
0.2
5.3
Divestments of business, net of cash disposed of
25
-3.8
Net cash from investing activities
-3.9
-2.9
Cash flow from financing activities
Proceeds from issuance of share capital
1.0
Acquisition of own shares
-1.0
Proceeds from long-term financial liabilities
16
35.0
Proceeds from short-term financial liabilities
16
76.5
31.2
Payments of short-term financial liabilities
16
-60.0
-11.0
Payments of financial liabilities, term loans
16
-27.0
-10.0
Proceeds from other financial assets
35.0
Payments of liabilities to shareholders
-35.0
Payments of lease liabilities
16
-21.6
-23.8
Dividends to non-controlling interest
-0.4
-0.4
Change in non-liquid financial assets
0.6
0.2
Net cash from financing activities
3.1
-13.7
Net change in cash and cash equivalents
15.5
5.7
Cash and cash equivalents at beginning of the year
32.3
26.0
Foreign exchange rate effect
0.1
0.6
Cash and cash equivalents at end of the year
47.9
32.3
Eltel Annual Report 2022 56
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Consolidated statement of changes in equity
Equity attributable to shareholders of the parent
Revaluation of HedgingNon-
Other paid-in Accu mulated defined benefit reserve,CurrencycontrollingTotal
EUR million
Share capital
capitallossesplans, net of taxnet of tax
translation
Total
interestequity
1 Jan 2022
158.8
490.6
-366.2
-38.9
10.9
-35.0
220.2
7.7
227.9
Total comprehensive income for the year
-15.0
7.8
0.0
-9.1
-16.2
0.1
-16.2
Transactions with owners
1)
:
Share capital reduction
-0.2
0.2
Proceeds from shares issued
1.0
1.0
1.0
Purchase of own shares
-1.0
-1.0
-1.0
Equity-settled share-based payment
0.0
0.0
0.0
Dividends paid to non-controlling interests
-0.4
-0.4
Total transaction with owners
0.7
-0.7
0.0
0.0
-0.4
-0.4
31 Dec 2022
159.6
489.9
-381.2
-31.1
10.9
-44.0
204.0
7.4
211.3
1) For more information about equity-settled share-based payments see note 30 Remuneration to senior executives and for share transactions see note 15 Shares and share capital.
Equity attributable to shareholders of the parent
Revaluation of HedgingNon-
Other paid-in Accu mulated defined benefit reserve,CurrencycontrollingTotal
EUR million
Share capital
capitallossesplans, net of taxnet of tax
translation
Total
interestequity
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 year
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 30 Remuneration to senior executives and for share transactions see note 15 Shares and share capital.
Equity attributable to shareholders of the parent company
Shareholders’ equity consists of the share capital, other paid-in capital, reserves and accumulated profits and losses. Other
paid-in capital includes share subscription prices to the extent that they are not included in share capital (premium) and uncon-
ditional shareholders’ contribution. Actuarial gains and losses arising from employee benefits are recorded under revaluation
of defined benefit 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 reclassified to the income statement as the hedged item affects the income statement. The currency translation
reserve includes differences arising on translation of the financial statements of foreign entities. Eltel Annual Report 2022 57
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 59
2 Accounting policies for the consolidated accounts 59
Financial performance
3 Segment reporting 64
4 Revenue recognition 65
5 Personnel by segment 66
6 Employee benefit expenses 66
7 Function expenses by nature 66
8 Other income 66
9 Other expenses 66
10 Depreciation and amortisation 67
11 Financial income and expenses 67
12 Income tax 67
13 Earnings per share 67
Notes to the consolidated financial statements
Financial risk management and capital structure
14 Financial risk management 68
15 Shares and share capital 71
16 Borrowings 72
17 Financial instruments by category 73
18 Derivative financial instruments 74
19 Commitments and contingent liabilities 74
Working capital and deferred taxes
20 Financial assets and trade and other receivables 75
21 Inventories 75
22 Provisions 75
23 Trade and other payables 75
24 Deferred tax 76
Business combinations and capital expenditure
25 Acquisitions and divestments 77
26 Non-controlling interests 77
27 Intangible assets 78
28 Property, plant and equipment 79
29 Leasing 79
Remuneration and other
30 Remuneration to senior executives 80
31 Retirement benefit obligations 82
32 Auditors’ fees 83
33 Related party information 83
34 Group companies 83
35 Events after balance sheet date 83
Eltel Annual Report 2022 58
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Note 2 Accounting policies for the consolidated accounts
These consolidated financial statements of the Group are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by EU effective at 31
December 2022. In addition, the Group applies RFR 1 Supplementary Accounting Rules for
Groups, issued by the Swedish Financial Reporting Board. The financial statements have
been authorised for issue by the Board of Directors of Eltel AB on 28 March 2023 and are
subject to adoption by the Annual General Meeting on 11 May 2023.
The financial statements are prepared on a going concern basis. At the date of signing
the financial 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 reporting period.
Consolidated financial statements have been prepared under the historical cost con-
vention, except for derivative financial instruments, which are measured at fair value. The
information in the consolidated financial statements is presented in millions of Euro unless
otherwise stated. All figures in the financial statements have been rounded and conse-
quently the sum of individual figures can deviate from the presented sum figure.
Basis of preparation
This section comprises the following notes:
1 Corporate information 59
2 Accounting policies for the consolidated accounts 59
Note 1 Corporate information
Eltel AB (the Company) through its subsidiaries (together the Group) is a leading service
provider for critical infrastructure within power and communication 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
power and communication networks for a more sustainable and connected world today
and for future generations. In 2022, the number of employees was approximately 5,000.
Eltel mainly operates in the Nordic market, but is also represented in Poland, Germany and
Lithuania.
Eltel AB (publ) is a public limited liability company domiciled in Stockholm, Sweden. The
address of the head office is Adolfsbergsvägen 13, Bromma, Sweden. Eltel AB’s ordinary
shares are quoted on the Nasdaq Stockholm. The operations of Eltel AB through the sub-
sidiary 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 man-
agement functions but has no operative business activities and its risks are mainly attribut-
able to the value and activities of its subsidiaries.
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
flows expected to arise from cash-generating units and a suitable discount rate in order to
calculate present value. See note 27 intangible assets for more information on impairment
testing.
b) Revenue recognition over time
The Group applies the five-step model of IFRS 15 when recognising revenue from con-
tracts with customers. Revenue for the period is recognised to the extent that the perfor-
mance obligation(s) to the customer have been satisfied. 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 final out-
come of the project and the actual future outcome may deviate from the estimate. Devia-
tions from original plan in project execution may result in significant 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 author-
ity, customer or other external conditions outside of Eltels control, including the risk of
delays and in certain cases the risk of inability of the Group’s customers to obtain financing
to fund planned projects and services. The essential skills for performance and profitability
of a project are the Group’s 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
benefit due to future taxable profits is probable. However, deferred tax asset is always
recognised if it can be utilised against current taxable temporary differences. The assump-
tions regarding future taxable profits require significant judgement and are based on the
current business plan and further estimates added by consideration for the uncertainties.
The Group uses estimates for recognition of liabilities for anticipated tax audit and tax con-
troversy issues based on all available information at the time of recognition.
Adoption of new or amended IFRS standards and interpretations
The IFRS standards, amendments and interpretations that took effect in the financial year
2022 did not have a material impact on the result or the financial position of the Group or on
the presentation of the financial statements.
The new amendments effective for 2023 financial year include the following:
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (amend-
ment to IAS 12). The amendment require companies to recognise gross amount of deferred
tax assets and liabilities on transactions, 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.
Eltel expects to recognise following impacts in deferred taxes due to the amendment:
-increase of deferred tax assets of approximately EUR 9 million
-Increase of deferred tax liabilities of approximately EUR 9 million
Total assets will increase by approximately EUR 9 million. Impact to equity will be zero and
total amount of equity and liabilities will increase by approximately EUR 9 million.
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement
2) which defines material accounting policy information to be disclosed and clarifies that
immaterial accounting policy information does not need to be disclosed
The new standards and amendments effective for 2024 financial year or later include the
following:
Classification of Liabilities as Current or Non-current and Non-current Liabilities with
Covenants (Amendments to IAS 1) which clarify the criteria used to determine whether
liabilities are classified as current or non-current.
The amendments improve the information an entity provides when its right to defer
settlement of a liability for at least twelve months is subject to compliance with covenants.
Eltel will amend its disclosures accordingly.
The other published standards, amendments and interpretations that are effective on
the financial year beginning 1 January 2023 or later are not expected to have significant
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 financial year 2022 is filed in the European Single
Electronic Format (ESEF). The primary statements and notes in the IFRS consolidated
financial statements are tagged in accordance with ESEF taxonomy in electronic format
called iXBRL. ESEF taxonomy is developed by ESMA and it is based on the IFRS taxonomy
published by the IFRS foundation.
Critical accounting estimates and judgments
The preparation of the consolidated financial 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 financial period when the
changes occur and in all subsequent financial periods.
The areas where significant judgments and estimates are made in preparing the financial
statements and where a subsequent change in the estimates and assumptions may cause
a material adjustment to the carrying amounts of assets and liabilities are outlined below:
Eltel Annual Report 2022 59
Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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 fulfil the criteria to be recog-
nised in balance sheet as a provision due to future uncertainties towards the existence
of obligation or outflow 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 outflow of resources becomes probable, they are recognised
as provisions.
e) Defined benefit plans
When preparing actuarial calculations in determining the pension obligation related to
defined benefit plans, certain actuarial assumptions need to be made. As the assumptions
will vary, the real payment will differ from the estimated obligation, affecting the profit or
loss. The assumptions used in actuarial calculations are presented in note 31 Retirement
benefit 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 financial statements include the parent company Eltel AB and all com-
panies in which, at the end of the financial year, Eltel exercises control, i.e. subsidiary com-
panies. 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 financial 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 identifiable net assets acquired is
recognised as goodwill .
Intercompany transactions, receivables, liabilities and unrealised margins, as well as
distribution of profits within the Group, are eliminated in full on consolidation. Non-con-
trolling interest is presented separately from the net profit 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 obligations 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 financial statements.
A list of subsidiaries and joint operations is presented in note 34 Group companies.
Foreign currency translation
Functional and presentation currency
Items included in the financial 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 financial 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 trans-
lated 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 transac-
tions and monetary items are recognised in the income statement. Exchange rate gains
and losses on actual business operations are recognised in respective items above oper-
ating profit. Exchange rate gains and losses on financing are entered as exchange rate
differences in financial income and expenses.
See further information on hedge accounting for foreign currency differences arising
from the translation of financial assets and liabilities designated as hedges in note 14.
Foreign subsidiaries
Income statements and cash flow statements of foreign subsidiaries are translated into
Euros at the average exchange rates for each month and the balance sheets are translated
using the exchange rates prevailing at the balance sheet date. Exchange differences aris-
ing 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 five-step model of IFRS 15 when recognising revenue from con-
tracts with customers. IFRS 15 requires identifying deliverables in contracts with custom-
ers 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 obligation 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 benefits from the good(s) or service(s), either over
time or at a point in time.
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 contracting parties are defined as a contract under IFRS 15.
A contract includes promises to transfer good(s) or service(s) to a customer. 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 recog-
nised over time as customer controls the asset Eltel creates or enhances. In maintenance
services customer typically receives benefits as Eltel performs and revenue is and con-
tinues to be recognised based on the services performed. 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 significant 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 significantly 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 signif-
icant financing component. If the contract contains a significant financing component the
promised amount of consideration is adjusted and Eltel recognises revenue at an amount
that reflects 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 receiv-
able 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 recog-
nised 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 customer for which
the Group has received consideration from the customer. Advances received in the bal-
ance sheet represent the Group’s contract liabilities .
Eltel Annual Report 2022 60
Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Segment reporting (IFRS 8)
Eltel’s main operations are presented by four country segments: Finland, Sweden, Nor-
way and Denmark. All communication and power business in these four Nordic countries
are presented under the country segments. Other business includes High Voltage, with
operations mainly in Poland, Smart Grids Germany, Lithuania as well as closing activities
for Power Transmission International and Rail businesses. 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 financial information is available. Operating segments constitute the
operational structure for governance, monitoring and reporting. Revenues, costs, opera-
tive 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 dis-
posal 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 benefits attributable to the asset will flow to
the Group. Intangible assets in the Group include acquired computer software, brand,
order backlog and customer relationships. The valuation of intangible assets acquired in
a business combination is based on fair value. Other intangible assets (except for brands)
subsequent to initial recognition, are recognised at cost less depreciations and impair-
ments, if any. On initial recognition they are recognised 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 specific 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 devel-
opment of identifiable and unique software products controlled by the Group, and that will
probably generate economic benefits exceeding costs beyond one year, are recognised as
intangible assets. Costs include the software development employee costs and an appro-
priate 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 com-
binations. 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 amortised, but tested annually for impairment. The fair value of order backlog
is determined based on the future cash flows 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 flows
expected to arise from contracts with the existing customers. 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 financial
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 configuration and customisation
costs are recognised as an expense according to underlying service agreement. In specific
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 indefinite useful life, for example goodwill, are not subject to amor-
tisation 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 identifiable cash flows 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 flow expected to be generated by
the asset.
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 financial 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
indefinite useful life. See note 27 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 1540 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 significantly from previous estimates, depreciation periods are changed accordingly.
Subsequent costs are included in the asset’s carrying amount or recognised as a sepa-
rate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow 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 financial
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 recognised, 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 fixed pay-
ments, 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 meas-
ured at amortised cost using the effective interest method. In addition, the carrying amount
of lease liabilities is remeasured if there is a modification, e.g. a change in the lease term
or a change in future lease payments resulting 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 bor-
rowing 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.
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Financial instruments (IAS 32, IFRS 7, IFRS 9)
Recognition and derecognition
All purchases and sales of financial assets are accounted for at trade date. Financial liabil-
ities 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 trans-
action costs have been included for all financial assets not carried at fair value through
profit or loss. However, trade receivables without significant financing components are
recognised at transaction price. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or the Group has transferred
substantially all risks and rewards of ownership. Financial liabilities are derecognised when
the obligation specified in the contract is discharged or cancelled or expires.
Classification and measurement
The Group classifies its financial assets into the following categories according to IFRS
9: Financial assets at amortised cost, fair value through other comprehensive income or
fair value through profit and loss. The classification is made on the basis of the Group’s
business model for managing the financial assets and the characteristics of the con-
tractual cash flow of the financial assets, The Group classifies all the financial liabilities
at amortised costs except the derivative financial instruments which are classified at fair
value through profit or loss. The classification is made on the basis of the purpose of the
acquisition of financial instruments at the time of initial recognition. See note 17 Financial
instruments by category.
Financial assets and liabilities at fair value through profit or loss are financial assets held
for trading and derivative financial assets not designated as hedges, as the Group has
not designated any other financial assets as at fair value through profit or loss upon initial
recognition. A financial asset is classified 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 financial assets at fair value
through profit or loss are recognised in the income statement in the period in which they
arise either as other income and expenses or financial income or expenses depending on
whether they relate to business or financial items. Derivatives not designated as hedges
are classified as a current asset or liability and presented in the balance sheet as other
receivables or other liabilities. Moreover, the Group identifies and separates embedded
derivatives from the business sale or purchase contracts. The embedded derivatives are
currency forward contracts and are classified as financial assets and liabilities at fair value
through profit and loss.
Financial assets at amortised costs are non-derivative financial assets with fixed or
determinable payments not quoted in an active market nor held for trading. They are meas-
ured at amortised cost. They include trade and other receivables which are measured 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 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 financial 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 classified as both current and non-current liabilities and they can be inter-
est-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 financial
asset or a financial 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 financial instrument or, when
appropriate, a shorter period to the net carrying amount of the financial asset or financial
liability. When calculating the effective interest rate, an entity shall estimate cash flows
considering all contractual terms of the financial instrument including for example transac-
tion costs and all other premiums or discounts.
Impairment of financial assets
The Group applies the expected credit losses (ECL) model according to IFRS 9 for impair-
ment of trade receivables, contract assets and other financial assets.
Credit risk is the risk of a loss if a customer or counterparty in a financial instrument does
not fulfill 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 exist-
ing 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
significant part of the Group’s net sales. These customers are solid infrastructure network
owners, typically well-known publicly listed companies or companies owned by gov-
ernments 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 simplified method. This means that the loss allow-
ance 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 companies 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 invest-
ments in bank accounts are kept in Eltel’s financing 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 combina-
tion 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 significant.
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 flows. Meas-
urement 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 significant 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 flow hedge accounting in 2022 or 2021. 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 classified as financial assets or liabilities measured at fair value through
profit or loss.
Net investment hedges
The Group has applied net investment hedge accounting for certain foreign currency
denominated loans which hedge the translation risk relating to net investments in sub-
sidiaries. The foreign exchange differences for these loans have been recognised in other
comprehensive income under translation reserve. If the amount of the net investment
decreases through divestment or otherwise, the related accumulated gains or losses
recognised in translation reserve are transferred to profit or loss (see note 14.1 for more
information).
Inventories (IAS 2)
Inventories are stated at the lower of cost or net realisation value. Cost is determined by the
FIFO (first in, first out) method. The cost of finished goods and work in progress comprises
materials, direct personnel costs, other direct costs and an appropriate portion of produc-
tion 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 financial assets section above.
See note 20 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.
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Dividends
Dividends are proposed by the Board of Directors and recognised in the financial state-
ments 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 average number of ordinary shares
during the financial period. Ordinary shares purchased and held by the Group, if any, are
subtracted from number of outstanding shares. Diluted earnings per share reflect the pos-
sible impact of the share-based incentive plans.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amor-
tised 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 outflow of economic
benefits 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 reimbursement 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.
A provision for restructuring is recognised when management has developed and
approved a plan to which it is committed. Employee termination benefits 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 con-
tractual obligation with no continuing economic benefit 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 rec-
ognised 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 benefits to be received.
A contingent liability is a possible obligation that does not fulfil the criteria to be recog-
nised in balance sheet as a provision due to future uncertainties towards the existence
of obligation or outflow 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 outflow 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 tempo-
rary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial 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 profit will be available, against which the tax losses or temporary differences can
be utilised. Deferred income tax is provided on temporary differences arising on invest-
ments in subsidiaries and associates, except where the timing of the reversal of the tempo-
rary difference is controlled by the Group and it is probable that the temporary difference
will not reverse in the foreseeable future.
Employee benefits (IAS 19)
Short-term benefits 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 benefits. The schemes are generally funded through
payments to insurance companies or trustee-administered funds.
The plans are classified as either defined contribution plans or defined benefit plans.
In the defined 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 fulfil its obligations. These con-
tributions are charged to the income statement in the year to which they relate.
For defined benefit plans, the liability in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the balance sheet date minus the
fair value of plan assets. The pension obligation is defined using the projected unit credit
method separately for each plan. The discount rate applied to calculate the present value
of post-employment benefit 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 defined benefit obli-
gation and recognised as financial expenses. Past service costs are recognised immedi-
ately in the income statement. Remeasurements of the defined benefit plan are recognised
directly in other comprehensive income.
Termination benefits
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 benefit is offered to encourage voluntary redundancy, a cost is recog-
nised 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 recognised as an employee expense on a straight-line
basis over the vesting period when employee services are performed with correspond-
ing 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 determined 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 fulfilment 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 .
Eltel Annual Report 2022 63
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Note 3 Segment reporting
Eltel reports its operations in four country segments: Finland, Sweden, Norway and Den-
mark. All communication and power business in these countries is presented under country
segments. Other business includes High Voltage, with operations mainly in Poland, Smart
Grids Germany, Lithuania as well as closing activities for Power Transmission International
and Rail businesses.
Net sales by segment
EUR million 2022 2021
Finland 290.1 299.6
Sweden 193.8 182.2
Norway 176.8 160.5
Denmark 74.3 87.9
Sum segments 735.0 730.1
Other business 99.4 91.9
Eliminations -10.8 -9.5
Total 823.6 812.6
In 2022 and 2021 the Group has two customers that represent over 10% of total sales of
the Group. The customers’ share of the sales amount to 35% (36). 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.
Segment results
EUR million 2022 2021
Operative EBITA by segment
Finland 8.2 12.7
Sweden -1.0 -1.8
Norway 2.1 9.2
Denmark 0.6 4.2
Sum segments 9.9 24.2
Other business -4.0 -1.8
Group functions -7.8 -7.6
Operative EBITA, Group -1.9 14.8
Valuation as held for sale -0.1
Total items affecting comparability in EBITA -0.1
Amortisation of acquisition-related intangible assets -0.1 -0.3
Operating result (EBIT) -2.0 14.5
Financial expenses, net -9.5 -5.8
Result before taxes -11.4 8.7
Net working capital and operative capital employed
EUR million 31 Dec 2022 31 Dec 2021
Inventories 24.8 17.2
Trade and other receivables 177.1 192.3
Provisions -5.9 -8.6
Advances received -50.6 -35.8
Trade and other payables -164.1 -178.5
Other -2.3 -2.6
Net working capital -21.0 -16.0
Intangible assets excluding acquisition-related allocations 8.9 12.3
Property, plant and equipment 10.7 11.6
Right-of-use assets 46.5 53.3
Operative fixed assets 66.1 77.2
Total operative capital employed 45.1 61.2
Operative capital employed
(average over reporting period) 53.2 62.9
Net working capital by segment
EUR million 31 Dec 2022 31 Dec 2021
Finland -24.2 -22.6
Sweden 2.9 6.4
Norway -14.4 -15.5
Denmark -6.9 -6.7
Other business 22.4 23.2
Group functions -0.7 -0.8
Total -21.0 -16.0
Operative fixed assets by segment
EUR million 31 Dec 2022 31 Dec 2021
Finland 21.7 24.1
Sweden 11.3 16.7
Norway 15.5 16.9
Denmark 8.1 9.8
Other business 6.8 6.7
Group functions 2.7 3.0
Total 66.1 77.2
Operative capital employed by segment
EUR million 31 Dec 2022 31 Dec 2021
Finland -2.5 1.5
Sweden 14.2 23.1
Norway 1.2 1.4
Denmark 1.1 3.1
Other business 29.2 29.9
Group functions 2.0 2.1
Total 45.1 61.2
Financial performance
This section comprises the following notes:
3 Segment reporting 64
4 Revenue recognition 65
5 Personnel by segment 66
6 Employee benefit expenses 66
7 Function expenses by nature 66
8 Other income 66
9 Other expenses 66
10 Depreciation and amortisation 67
11 Financial income and expenses 67
12 Income tax 67
13 Earnings per share 67
Eltel Annual Report 2022 64
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Note 4 Revenue recognition
Net sales by business
EUR million 2022 2021
Communication 517.9 505.1
Power 305.6 302.3
Other operations 0.3 5.3
Total 823.6 812.6
Net sales by segment and business
EUR million 2022 2021
Finland Communication 113.0 111.3
Power 177.2 188.4
Sweden Communication 166.2 163.1
Power 27.6 19.1
Norway Communication 176.3 160.0
Power 0.5 0.4
Denmark Communication 55.9 65.2
Power 18.3 22.7
Other business Communication 15.8 13.6
Power 83.3 73.1
Other operations 0.3 5.3
Eliminations -10.8 -9.5
Total 823.6 812.6
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 specific 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 con-
tract 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 specifications. 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 rev-
enue 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 continuous flow of small orders that are typically unit
priced, but also certain fixed fee based contracts exist. The services are not highly cus-
tomised to a particular customer. The nature of Eltel’s maintenance services is such that
the customer typically can benefit from the services either on its own or together with other
readily available resources. In maintenance services customers receive benefits as Eltel
performs and revenue is recognised over time based on the services performed.
Net sales by business and service type
EUR million 2022 2021
Communication
Project delivery 23.2 17.5
Upgrade services 336.6 335.5
Maintenance 157.9 152.0
Total Communication 517.9 505.1
Power
Project delivery 141.6 128.1
Upgrade services 100.8 116.7
Maintenance 63.2 57.5
Total Power 305.6 302.3
Other operations
Project delivery 0.1 5.1
Maintenance 0.2 0.2
Total other operations 0.3 5.3
Total 823.6 812.6
In 2022 project delivery services form 20% (19), upgrade services 53% (56) and mainte-
nance services 27% (26) of Eltel’s total net sales.
Committed order backlog by business and service type
Committed order backlog in Eltel is defined as the total value of committed (purchase)
orders received but not yet recognised as net sales. It does not include frame agreements
unless a binding purchase order has been received. Committed order backlog is therefore
the best measure of unsatisfied performance obligations according to IFRS 15 Revenue
from contracts with customers. The below table presents the committed order backlog by
business and service type. The currency impact in total order backlog at year-end 2022
was EUR -13.0 million.
EUR million 2022 2021
Communication
Project delivery 47.2 39.7
Upgrade services 135.4 105.2
Maintenance 22.6 22.9
Total Communication 205.2 167.8
Power
Project delivery 178.4 211.3
Upgrade services 57.5 67.7
Maintenance 26.9 22.2
Total Power 262.8 301.1
Other operations
Project delivery 0.2 0.2
Total other operations 0.2 0.2
Total 468.2 469.1
Approximately two thirds 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 2023.
Contract balances
EUR million 31 Dec 2022 31 Dec 2021
Trade receivables 82.6 102.0
Contract assets 73.3 71.2
Total assets related to contracts with customers 155.9 173.2
Advances received from contracts with customers 45.2 35.8
Total liabilities related to contracts with customers 45.2 35.8
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.
Eltel Annual Report 2022 65
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Note 5 Personnel by segment
Number of personnel by segment
Average 2022
Of whom
men % 2021
Of whom
men %
Finland 1,498 92 1,478 87
Sweden 919 86 938 86
Norway 938 87 919 87
Denmark 484 89 562 90
Other business 1,071 85 1,123 85
Group and shared functions 143 36 155 32
Total personnel, average 5,053 87 5,176 85
Total personnel, year-end 5,063 87 5,046 87
Note 6 Employee benefit expenses
Employee benefit expenses
EUR million 2022 2021
Wages and salaries 248.1 251.7
Post-employment benefits:
Defined benefit plans -0.7 -0.7
Defined contribution plans 24.6 24.9
Other statutory social costs 34.0 34.0
Total 305.9 310.0
Employee benefit expenses by function
EUR million 2022 2021
Cost of sales 255.5 255.8
Selling and administrative expenses 50.3 54.1
Sum in operative expenses 305.9 309.9
Financial income and costs 0.1 0.1
Total 305.9 310.0
Note 7 Function expenses by nature
EUR million 2022 2021
Other income -0.9 -5.5
Total other income -0.9 -5.5
Expenses
Materials and supplies 125.7 116.0
Employee benefit expenses 305.9 309.9
Subcontractors and other external services 270.4 263.2
Other costs 94.9 82.4
Depreciation, amortisation and impairment 29.8 32.1
Total expenses 826.5 803.6
Total net expenses 825.6 798.1
Main items in other costs include direct costs and production overheads as well as IT
costs, transportation, premises and other personnel-related costs. The presentation
between cost categories has been updated for comparative period.
The total amount recognised in the income statement is divided by function as follows:
EUR million 2022 2021
Cost of sales 748.9 724.5
Other income -0.9 -5.5
Selling and administrative expenses 77.2 78.1
Other expenses 0.4 1.0
Total 825.6 798.1
Note 8 Other income
EUR million 2022 2021
Gains on sales of assets 0.2 3.0
Gain on foreign exchange forward contracts 0.0 0.3
Other income 0.7 2.2
Total 0.9 5.5
Gains on sales of assets include fixed assets sales and in 2021 also gain of EUR 2.5 million
from sale of real estate in Poland.
Note 9 Other expenses
EUR million 2022 202 1
Losses on divestments and held for sale valuations 0.1
Other expenses 0.4 0.9
Total 0.4 1.0
Eltel Annual Report 2022 66
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Note 11 Financial income and expenses
EUR million 2022 2021
Interest income arising from financial assets
at amortised cost 0.2 0.0
Other financial income 0.0 0.1
Total financial income 0.2 0.1
Interest expenses from liabilities at amortised cost
1)
-7.6 -4.6
Fee expenses -2.1 -2.2
Fair value change of foreign exchange derivatives 0.8 1.8
Other foreign exchange differences -0.7 -0.8
Total financial expenses -9.6 -5.8
Net financial expenses -9.5 -5.8
1)
Includes EUR 2.1 million (1.6) of interest expenses for leasing liabilities .
Note 13 Earnings per share
2022 2021
Net result attributable to equity holders of the parent -15.0 4.3
Weighted average number of ordinary shares, basic 156,699,058 156,649,081
Weighted average number of ordinary shares, diluted 156,789,278 156,728,961
Earnings per share, basic -0.10 0.03
Earnings per share, diluted -0.10 0.03
The basic earnings per share figure is calculated by dividing the net income attributable
to the shareholders of the parent company by the weighted average number of ordinary
shares outstanding during the year. Diluted earnings per share is calculated by adjusting
the weighted average number of ordinary shares by the effect of potential diluting shares
due to share-based incentive plans in the Group.
Note 12 Income tax
Income tax expense in the consolidated income statement
EUR million 2022 2021
Current tax 3.4 3.9
Deferred tax 0.1 -0.1
Total tax cost (+)/ income (-) 3.5 3.8
Tax rate, % -30.5% 43.8%
Taxes represent the tax cost in countries with profit. No deferred tax asset was booked for
the losses in the period.
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 2022 2021
Profit before tax -11.4 8.7
Total tax cost (+)/income (-)
Tax calculated at Swedish tax rate -2.4 1.8
Effect of different tax rates outside Sweden 0.6 0.5
Income not subject to tax -0.2 -0.4
Expenses not deductible for tax purposes 1.4 1.2
Tax loss valuation 4.0 1.0
Non-valuated temporary differences -0.1 -0.4
Taxes and adjustments in respect of prior years 0.0 0.2
Other items 0.1 -0.1
Income taxes in the consolidated income statement 3.5 3.8
Tax loss valuation includes tax effects of results for which no deferred income tax asset
was recognised, mainly in Sweden and Poland as well as expiry of previously recognised
tax losses for Finland. Deferred taxes are presented in note 24.
Note 10 Depreciation and amortisation
EUR million 2022 2021
Amortisation on customer relationships 0.1 0.3
Depreciation of right-of-use assets 21.8 23.4
Other depreciation and amortisation 7.8 8.4
Total 29.8 32.1
The total amount recognised in the income statement is divided by function as follows:
EUR million 2022 2021
Cost of sales 17.2 19.1
Selling and administrative expenses 12.6 13.0
Total 29.8 32.1
Eltel Annual Report 2022 67
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Note 14 Financial risk management
The Group has exposure to the following financial risks:
Market risks, including currency, interest rate and commodity price risks
Liquidity risk
Credit risk
The Group’s financing and financial risk management is carried out by a central treasury
department (Group Treasury) under the Treasury Policy approved by the Board of Direc-
tors. Group Treasury Policy has been established to identify and analyse the financial
risks faced by the Group, to set appropriate risk limits and controls and to monitor risk
and adherence to limits. The Treasury Policy and the related financial risk management
policies and procedures are reviewed regularly to reflect changes in market conditions and
Group’s activities. The main objective of the financial risk management is to minimise the
unfavourable effects of the financial risks on the Group’s income and cash flow.
Majority of the Group’s business is local and over 95% of the cash inflows are generated in
each country’s local currency. The transaction risk is therefore limited. The foreign curren-
cies used are typically US dollar, EUR or other European currencies. The main principle is
to mitigate the risk first 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 con-
tracts 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 18 Derivative financial instruments.
The summary quantitative data about the Group’s transaction risk exposure as reported to
the Groups management is as follows:
2022
EUR million
Sales and
purchases
Borrowings
and cash Hedges
Net transaction
risk exposure
EUR -0.2 -0.0 -0.1 -0.3
SEK -1.9 12.4 -10.2 0.3
NOK 0.4 -5.7 6.6 1.3
DKK -0.0 -6.0 6.2 0.1
PLN -0.0 -0.2 0.0 -0.2
USD -2.1 1.5 0.5 -0.2
MZN 1.3 1.3
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
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 significant currencies
against all other currencies at the balance sheet date would have affected profit 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
2022 profit or loss 2021 profit or loss
Strengthening Weakening Strengthening Weakening
EUR -29 29 -75 75
SEK 32 -26 40 -33
NOK 144 -118 -29 24
DKK 17 -14 -44 36
PLN -28 23 -15 12
USD -18 15 -48 40
MZN 144 -118 103 -84
GEL 66 -54
The Group has not applied hedge accounting to currency derivatives in 2022 or 2021 and
all fair value changes are reported through profit and loss.
Currency translation risk
The Group’s translation risk arises from translating foreign currency denominated subsidi-
aries’ income statements and balance sheets into the Groups presentation currency upon
Group consolidation. The risk is realised as volatility of both the Groups Euro-denomi-
nated profit or loss and equity (translation reserves).
A significant 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 2022, 24% (23) of the Group’s net
sales were generated in SEK, 21% (20) in NOK, 9% (11) in DKK and 6% (3) in PLN. The
changes in NOK against EUR impacted the Group’s net sales by EUR +1.4 million (+9.1) and
changes in SEK against EUR by EUR -9.5 million (+6.0).
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 profit or loss is limited. In 2022
the changes in NOK against EUR impacted the Group’s EBIT by EUR +0.1 million (+0.5).
A change in the average EUR/SEK, EUR/NOK, EUR/DKK, EUR/PLN rates by 10% would
have had an impact of EUR +0.8 million (-0.6) on the Group’s operating result (EBIT) and
EUR +1.4 million (-0.0) in the Group’s post tax profit in 2022.
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 was hedged by
SEK and PLN denominated loans until January 2022, when the loans in SEK and PLN were
repaid. The foreign exchange differences for these loans have been recognised in other
comprehensive income under translation reserve. If the amount of the net investment
decreases through divestment or otherwise, the related accumulated gains or losses rec-
ognised in translation reserve are transferred to profit or loss.
14.1 Market risk
Market risk is the risk that changes in market prices – such as foreign exchange rates, inter-
est rates and commodity prices – will affect the Group’s income, cash flows or the value of
its holdings of financial instruments. Main market risks of the Group include currency risks,
interest rate risks and commodity risks.
14.1.1 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 fluctuations to the
cash flows, 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, borrowings and cash are denominated
versus the respective functional currencies of the Group companies.
Financial risk management
and capital structure
This section comprises the following notes:
14 Financial risk management 68
15 Shares and share capital 71
16 Borrowings 72
17 Financial instruments by category 73
18 Derivative financial instruments 74
19 Commitments and contingent liabilities 74
Eltel Annual Report 2022 68
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
14.2 Liquidity risk
Liquidity risk is the risk that the Group will encounter financial difficulty in meeting its finan-
cial obligations. The Group’s objective of liquidity risk management is to ensure that it will
maintain a sufficient 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 sufficient liquidity by efficient cash management through group level cash pools
and related overdraft limits. At year-end 2022, 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.
At year-end, the cash and cash equivalents consisted solely of cash in hand and depos-
its. The Group’s available liquidity reserve at the balance sheet date was as follows:
EUR million 31 Dec 2022 31 Dec 2021
Committed credit facility 34.0 90.0
Current account overdrafts 15.0 20.0
Cash and cash equivalents 47.9 32.3
Total 96.9 142.3
At the end of December 2022 the Group held counter value of EUR 1.5 million (1.8) in local
currency bank accounts in Mozambique and Georgia. Due to the local currency and other
regulatory requirements the funds in Mozambique are not readily transferrable off-shore.
The funds will be repatriated once the approval from the central bank of Mozambique is
received. 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 14.1 Market risk.
The Group also monitors closely the expected cash inflows and outflows. 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 significant uncertainties in the projections are related to the
cash inflows from the project business.
The valuations of the net investment hedges in hedging reserve are presented in the
below table:
2022
EUR million
Loans denominated
in foreign currency
Discontinued
net investment hedges Total
1 Jan 6.5 7.1 13.6
Recognised in hedging reserve
during the period 0.1 0.1
Transferred from hedging reserve
to profit and loss during the period -0.1 -0.1
31 Dec 6.6 7.0 13.6
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 profit and loss during the period -0.3 -0.3
31 Dec 6.5 7.1 13.6
14.1.2 Interest rate risk
Interest rate risk is the uncertainty in the financial result or the value of the Group caused by
fluctuations in interest rates. Interest rate risk can be divided into two components:
interest flow 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 financial 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 2022 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 floating interest rates (one to six months) including a
floor market rate of zero.
The interest rate profile of the Group is as follows:
EUR million 2022 2021
Total leasing liabilities 47.8 54.5
Variable-rate instruments
Financial assets -47.9 -32.9
Financial liabilities 124.6 100.2
Total variable-rate net liabilities 76.7 67.3
A majority of the leasing liabilities have a fixed interest rate for the lease period.
More information on the Group’s interest rate derivatives is included in note 18 Derivative
financial instruments.
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 floating rate borrowings.
2022
EUR million
Income statement
50 bp increase 25 bp decrease
Variable rate instruments 1.1 0.4
Total 1.1 0.4
2021
EUR million
Income statement
50 bp increase 25 bp decrease
Variable rate instruments 0.4 -0.2
Total 0.4 -0.2
Bp refers to basis points
14.1.3 Commodity price risk
Commodity price risk is the uncertainty in the financial result or the value of the Group
caused by fluctuations in commodity prices. The high inflation impacts Eltel across its cost
base, including fuel and material prices.
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 fixed, and a relevant commodity derivative is availa-
ble in the market. In 2022 or 2021 Eltel had no commodity derivatives.
Eltel Annual Report 2022 69
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The maturities of the Group’s undiscounted financial liabilities at the balance sheet date are
presented in the following table in line with their contractual terms.
31 Dec 2022
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 82.6 82.6
Derivative instruments 0.1 0.1
Other receivables 3.8 1.2 3.8 0.3 0.9
Cash and cash equivalents 47.9 47.9
Total financial assets 134.3 1.2 134.3 0.3 0.9
Financial liabilities
Bank borrowings and commercial
papers 89.5 35.0 93.7 36.1
Leasing liabilities 16.8 31.0 18.4 23.1 7.4 2.5
Trade and other payables 72.4 72.4
Derivative financial instruments 0.0 0.0
Total financial liabilities 178.8 66.0 184.6 59.2 7.4 2.5
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 and other 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
14.3 Credit risk
Credit risk is the risk of loss to the Group if a customer or a counterparty to a financial
instrument fails to meet its contractual obligations.
The Group’s credit risk arises primarily from the Group’s receivables from customers.
The Group has identified a concentration risk relating to certain key customers who
account for a significant amount of the Group’s net sales. The key customers are solid
infrastructure network owners, typically well-known publicly listed companies or compa-
nies owned by governments 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
significant 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 2022 the Group held counter value of EUR 1.5 million (1.8) in
local bank accounts in Mozambique and Georgia. The sovereign risk related to these coun-
tries is included in expected credit loss (ECL) calculation.
Below table summarises the expected credit loss reservation for total trade receivables
and contract assets.
Credit risk exposure and loss reservation
2022
EUR million
Credit risk rating
Trade receiva-
bles (gross)
Contract
assets Total
Expected credit
loss reservation
Recognised
amounts (net)
Large customers
AAA 5.9 1.3 7.1 0.0 7.1
AA 5.5 3.9 9.5 0.0 9.5
A 7.1 10.3 17.4 0.0 17.4
BBB 16.6 26.1 42.7 0.0 42.7
BB 0.7 0.7 0.0 0.7
Total large customers 35.8 41.6 77.4 0.0 77.4
Other customers 48.3 31.7 80.0 1.5 78.5
Total 84.2 73.3 157.5 1.6 155.9
2021
EUR million
Credit risk rating
Trade receiva-
bles (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
Maturity analysis of receivables:
EUR million 31 Dec 2022 31 Dec 2021
Not past due 73.3 96.1
1–14 days overdue 6.2 4.9
15–90 days overdue 2.6 2.1
91–180 days overdue 1.0 0.2
More than 180 days overdue 1.1 0.8
Total trade receivables 84.2 104.1
Contract assets 73.3 71.2
Expected credit loss reservation -1.6 -2.1
Total 155.9 173.2
There were no past due receivables in any other class of financial 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 1.6 million (2.1) representing a decrease
of EUR 0.6 million from the comparative period. The effects of COVID-19 have not had
substantial impact on expected credit losses. Realised credit losses in the Group were
EUR 0.1 million (0.2) during the year.
The Group investment activities are not exposed to significant credit risk. Any long-term
investments have to be approved by the Board of Directors. Derivative financial instruments
are entered into with banks with high credit rating. Group treasury is responsible for credit
risk management relating to financial 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 46.3 mil-
lion (30.3) of the cash balance on 31 December 2022 was deposited in the banks having the
credit rating of at least A (S&P) or equivalent. EUR 1.5 million (1.8) of the cash was deposited
in the banks in Mozambique and Georgia 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 immaterial and no reservation has been
recognised in the financial statements.
Eltel Annual Report 2022 70
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14.4 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 defines total capital
as equity plus net debt in the balance sheet.
The net debt at year-end has been as follows:
EUR million 31 Dec 2022 31 Dec 2021
Total bank borrowings 125.6 100.3
Leasing liabilities in balance sheet 47.8 54.5
Cash and cash equivalents -47.9 -32.3
Net debt 125.5 122.6
In 2022 Eltel’s bank loan agreements included financial covenants related to leverage ratio
(Net debt/EBITDA) and net gearing (Net debt/ Total equity).
If the net debt or EBITDA outcome differs significantly from planned, there is a risk that
the covenants under the existing financing agreement are not met during the transforma-
tion period. Challenges with respect to meeting the financial covenants might lead to a
risk that suppliers and other stakeholders could request accelerated payment terms or
additional guarantees.
Note 15 Shares and share capital
On 1 February 2022, the share capital was reduced with EUR 242,039.47 by redemption of
240,000 C shares held by Eltel.
On 18 March 2022, Eltel issued 972,000 redeemable and convertible class C shares
based on the authorisation given to the Board by the AGM on 5 May 2021. The purpose of
the issue of class C shares is to use the shares in Eltel’s long-term incentive programme
LTIP 2021. In connection with the issue the shares have been repurchased by Eltel. Eltel
holds the shares at 31 December 2022 and will hold the shares until it is time to deliver
shares to the participants of LTIP 2021. Prior to delivery of the shares to participants, the
class C shares will be converted to ordinary shares. The share issue resulted in an increase
of share capital by EUR 980 260.
On 7 June 2022, Eltel converted 87,700 C shares to ordinary shares pursuant to the
company’s articles of association.
On 31 December 2022, the total number of shares amounted to 158,231,081 divided into
156,736,781 ordinary shares with 1 vote per share and 1,494,300 C shares with 1/10 vote
per share. On 31 December 2022 the share capital amounted to EUR 159.6 million.
Changes in the share capital
Date
1)
Transactions
Ordinary
shares C shares
Total number
of shares
Change in share
capital (EUR)
Total share
capital (EUR)
Quota (par)
value (EUR)
1 Jan 2021 156,649,081 850,000 157,499,081 158,837,474 1.01
31 Dec 2021 156,649,081 850,000 157,499,081 158,837,474 1.01
1 Feb 2022 Reduction of share capital -240,000 157,259,081 -242,039 158,595,435 1.01
18 Mar 2022 Issue of new C shares 972,000 158,231,081 980,260 159,575,695 1.01
7 Jun 2022 Reclassification of shares 87,700 -87,700 158,231,081 159,575,695
31 Dec 2022 156,736,781 1,494,300 158,231,081 159,575,695 1.01
1)
Date of registration with the Swedish Companies Registration office .
Credit facilities
In January 2022, Eltel refinanced its previous credit facilities by completing a new financing
agreement with banks, comprising a EUR 35.0 million term loan (maturity 2+1 years) an d
a EUR 90.0 million revolving credit facility (maturity 3+1+1 years). The new credit facilities
have covenants pertaining to leverage ratio and net gearing. The Group has guarantee
facilities with the banks and insurance companies on bilateral basis. The account overdrafts
amount to EUR 15.0 million in total.
EUR million 31 Dec 2022 Maturity
Term loan, non-current
1)
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
1)
The maturity of the term loan has been extended by one year until January 2025 in Feb-
ruary 2023.
Additional to above facilities, the Group also had access to short-term debt capital markets
via a commercial paper programme of EUR 150 million. At the reporting date EUR 33.5 mil-
lion (73.0) of the commercial paper programme and EUR 56.0 million (0.0) of the revolvin g
credit facility were utilised.
Eltel Annual Report 2022 71
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Note 16 Borrowings
The financial liability amounts include capital amount and accrued interests.
EUR million 31 Dec 2022 31 Dec 2021
Carrying amounts of non-current liabilities
Bank borrowings 34.7 25.5
Leasing liabilities 31.0 35.8
Total non-current financial liabilities 65.7 61.4
Carrying amounts of current liabilities
Bank borrowings 90.4 74.2
Leasing liabilities 16.8 18.6
Total current debt 107.2 92.9
Total current financial liabilities 107.2 92.9
Total financial liabilities at amortised cost 172.9 154.2
The carrying amounts of the Groups financial liabilities are denominated in
following currencies:
EUR million 31 Dec 2022 31 Dec 2021
EUR 144.8 95.6
SEK 10.0 36.9
PLN 0.9 2.2
NOK 11.4 12.7
DKK 5.7 6.8
Total 172.9 154.2
See note 14 For information about interest rate risk, currency risk, liquidity risk and
capital management.
The weighted average interest rates for borrowings at year-end were 4.8% (2.0).
Non-cash changes of borrowings
EUR million
2022
Long-term
borrowings
Short-term
borrowings
Leasing
liabilities Total
1 Jan 25.5 74.2 54.5 154.2
Cash flows (net) 9.5 15.0 -21.6 2.8
Non-cash changes:
New lease agreements 19.2 19.2
Termination of lease agreements -2.6 -2.6
Foreign exchange movements -1.7 -1.7
Accruals and other non-cash changes -0.3 1.2 0.9
31 Dec 34.7 90.4 47.8 172.9
EUR million
2021
Long-term
borrowings
Short-term
borrowings
Leasing
liabilities Total
1 Jan 27.7 97.1 60.8 185.6
Cash flows (net) -25.0 -23.8 -48.8
Non-cash changes:
New lease agreements 21.7 21.7
Termination of lease agreements -4.5 -4.5
Divestment of companies and transfers
to assets held for sale 0.0 0.0
Change in maturity -1.5 1.5
Foreign exchange movements -0.7 0.1 0.2 -0.4
Accruals and other non-cash changes 0.6 0.6
31 Dec 25.5 74.2 54.5 154.2
Eltel Annual Report 2022 72
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Note 17 Financial instruments by category
Book values of financial instruments by category
When measuring the financial assets and liabilities, the Group uses market observable
data as far as possible. Fair values are categorised into different levels in a fair value hierar-
chy 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 flows. 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 significant 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 flow at the maturity date. The fair values of interest rate swaps
are calculated as the present value of the estimated future cash flow based on observable
yield curves .
31 Dec 2022
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 1.2 1.2
Other receivables and financial assets 20 0.7 0.5 1.2 1.2 2
Current financial assets 0.1 134.3 134.3 134.3
Trade receivables 20 82.6 82.6 82.6
Derivative instruments 18,20 0.1 0.1 0.1 2
Other receivables 20 3.8 3.8 3.8
Cash and cash equivalents 47.9 47.9 47.9
Total financial assets 0.8 134.7 135.5 135.5
Non-current financial liabilities 66.1 66.1 66.7
Interest-bearing debt 16 65.7 65.7 66.3 2
Trade and other payables 0.4 0.4 0.4
Current financial liabilities 0.0 187.5 187.6 187.9
Interest-bearing debt 16 107.2 107.2 107.6 2
Trade and other payables 23 80.3 80.3 80.3
Derivative instruments 18,23 0.0 0.0 0.0 2
Total financial liabilities 0.0 253.6 253.7 254.7
Carrying amount, net 0.8 134.7 -253.6
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 financial assets 20 0.7 0.5 1.1 1.1 2
Current financial assets 0.3 138.6 138.8 138.8
Trade receivables 20 102.0 102.0 102.0
Derivative instruments 18,20 0.3 0.3 0.3 2
Other receivables 20 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 16 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 16 92.9 92.9 93.4 2
Trade and other payables 23 85.3 85.3 85.3
Derivative instruments 18,23 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 2022 or on 31 December 2021 the Group had no financial instruments measured at fair value through other comprehensive income .
Eltel Annual Report 2022 73
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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 18 Derivative financial instruments
EUR million
Nominal
values
Fair
values
Positive
Fair
values
Negative
31 Dec 2022
Foreign exchange derivatives 39.7 0.1 -0.0
Total 39.7 0.1 -0.0
31 Dec 2021
Foreign exchange derivatives 41.8 0.3 -0.2
Total 41.8 0.3 -0.2
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 flows. The
Group has not applied hedge accounting to any derivative financial instruments in 2022 or
2021. More information on the financial risks which are hedged by the derivative financial
instruments are presented in note 14.
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 fol-
lowing table sets out the carrying amount of the financial instruments that are subject to
above agreements:
EUR thousands
31 Dec 2022 31 Dec 2021
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 85 2 84 259 -28 231
Financial liabilities
Foreign exchange
derivatives -39 -2 -37 -149 28 -121
Note 19 Commitments and contingent liabilities
Commitments and collateral pledged
EUR million 31 Dec 2022 31 Dec 2021
Pledged assets
Shares in subsidiaries 61.7 47.3
Floating charges 219.9 221.8
Intra-group loan receivables 343.7 343.6
Other pledges 0.1
Total pledged assets 625.4 612.8
Guarantees
Counter guarantees for external guarantees 80.3 85.3
Commercial guarantees on behalf of third parties 0.1
Total guarantees 80.3 85.4
At year-end, the pledged assets related mainly to securing the Group’s liabilities under
the Group’s financing agreement. Securities provided included the shares in The Infranet
Company AB, floating charges and the pledge of certain intra-group loan receivables.
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.
Legal claims and investigations
In Tanzania, Gati Masero Buiter t/a Botech Project Management (”Botech”) has filed a
statement of claim against Eltel Tanzania Ltd amounting to EUR 4.7 million and a corre-
sponding 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 fulfill its obligations under the subcontractor
agreement 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 during 2022 and both parties have concluded their
pleadings. A court ruling is expected during the first half-year 2023.
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 activities 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 governed by Georgian substantive law and contains a customary FIDIC dispute resolu-
tion clause whereby disputes, as a rule, first are to be adjudicated by a Dispute Adjudica-
tion Board and only thereafter can be submitted to ICC arbitration in Paris.
The Dispute Adjudication Board has to date satisfied claims brought by the consortium
against Georgian State Electrosystem. Georgian State Electrosystem has disputed the
consortium’s claims, including those confirmed by decisions of the Dispute Adjudication
Board, and indicated that it will raise (currently unspecified) counterclaims.
On 28 February 2022, Eltel Group Oy initiated arbitration proceedings by filing a Request
for Arbitration with the ICC. On 21 October 2022, Eltel Group Oy filed its Statement of
Claim. It is Eltel Group Oy’s position that Georgian State Electrosystem failed to adhere
to well-reasoned decisions by the Dispute Adjudication Board and thus must be ordered
to pay the total amount of EUR 7.1 million and GEL 1.3 million which are either directly
awarded by or derived from the Dispute Adjudication Board’s decisions, as well as late
payment interest on the amounts.
Georgian State Electrosystem’s Statement of Defence was filed on 20 January 2023.
Georgian State Electrosystem rejects Eltel Group Oy’s claims in their entirety and asks that
they be dismissed fully.
In management’s opinion, the outcome of this case and the tax proceedings and other
disputes incidental to PTI’s business is difficult to predict but they are not likely to have any
material effect on the Group’s financial position .
Eltel Annual Report 2022 74
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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 20 Financial assets and trade and other receivables
Financial assets
EUR million 31 Dec 2022 31 Dec 2021
Defined benefit pension asset 5.9
Investments 0.7 0.7
Other non-current receivables 0.5 0.5
Total non-current financial assets 7.1 1.1
Refer to note 31 Retirement benefit obligations for more information about defined benefit
pension asset.
Trade and other receivables
EUR million 31 Dec 2022 31 Dec 2021
Trade receivables, gross 84.2 104.1
Contract assets 73.3 71.2
Expected credit loss reservation -1.6 -2.1
Trade receivables and contract assets, net 155.9 173.2
Derivative instruments 0.1 0.3
Income tax receivables 0.4 0.2
Indirect tax receivables 0.9 1.1
Other prepayments and accruals 16.1 13.2
Other receivables 3.8 4.4
Total current trade and other receivables 177.1 192.3
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 14.3 Credit risk for
more information.
During 2022 the Group has sold on non-recourse basis EUR 301.3 million (292.8) of trade
receivables to various financial institutions as part of vendor financing solutions and derec-
ognised the amounts from the balance sheet at the time of receipt of payment. EUR 0.5 mil-
lion (0.9) of the costs are included in EBIT and EUR 0.9 million (0.0) in the financial expenses .
Note 21 Inventories
EUR million 31 Dec 2022 31 Dec 2021
Raw materials and consumables 9.3 6.0
Work in progress 15.5 11.1
Total 24.8 17.2
Note 22 Provisions
EUR million 31 Dec 2022 31 Dec 2021
Non-current 2.6 2.7
Current 3.3 6.0
Total 5.9 8.6
2022
EUR million
Warranty
provision
Project risk
provision
Other
provisions Total
1 Jan 2.2 5.5 1.0 8.6
Additional provisions 0.5 0.9 0.0 1.5
Used provisions during year -0.3 -2.6 -0.1 -2.9
Unused amounts reversed -0.8 -0.3 -0.0 -1.1
Exchange rate differences -0.1 -0.1 -0.0 -0.2
31 Dec 1.7 3.3 0.9 5.9
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 four years’ time from the balance sheet date. Warranty provisions which are clas-
sified as current will materialise over the next financial year. Based on past experience, the
outcome of these warranties will not give rise to any further significant losses.
Major part of the project risk provisions relate to project cost provisions for certain High
Voltage projects in Poland. Project risk provisions are based on management estimates of
the outcome of the project and based on facts and circumstances and other information
available at the reporting date, also taking into account any significant events after the
reporting period. The actual future outcome may deviate from the estimate. At year-end
2022 other provisions comprise mainly restoration provisions for right-of-use assets.
Note 23 Trade and other payables
Current
EUR million 31 Dec 2022 31 Dec 2021
Trade payables 72.3 71.6
Other liabilities 8.0 13.7
Derivative financial liabilities 0.0 0.2
Indirect tax liabilities 14.6 15.5
Income tax liabilities 3.6 5.2
Accrued expenses and prepaid income 65.5 72.3
Total current trade and other payables 164.1 178.5
Accrued expenses consist of the following items:
EUR million 31 Dec 2022 31 Dec 2021
Accrued wages and salaries 32.1 37.8
Accrued indirect employee costs 15.2 16.1
Other accruals 18.2 18.4
Total 65.5 72.3
Working capital and deferred taxes
This section comprises the following notes:
20 Financial assets and trade and other receivables 75
21 Inventories 75
22 Provisions 75
23 Trade and other payables 75
24 Deferred tax 76
Eltel Annual Report 2022 75
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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 2021 3.5 13.0 2.6 19.1
Recognised in the income statement -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
Recognised in the income statement 0.0 -2.0 2.0 0.0
Recognised in other comprehensive income -1.6 -1.6
Translation differences -0.2 -0.3 -0.0 -0.5
31 Dec 2022 0.2 10.5 5.6 16.3
Deferred tax assets are recognised for tax loss carry forwards and temporary differences to the extent that the realisation of the related tax benefit against future taxable profits is
probable. The future taxable profit estimate is based on current business plans approved by management.
Gross amount of EUR 10.5 million (12.9) deferred tax assets are recognised for losses carried forward, of which EUR 5.6 million (5.9) relates to operations in Sweden. The decrease in the
gross amount during 2022 relates mainly to expiry of previously recognised losses for Finland. On 31 December 2022 the Group had in its main operational countries a total of EUR 185.5
million (207.9) tax losses for which no deferred tax asset was recognised. Of these tax losses EUR 1.9 million (2.4) will expire within five years and EUR 183.5 million (205.5) does not have
expiry date.
Note 24 Deferred tax
Deferred tax assets and liabilities
EUR million 31 Dec 2022 31 Dec 2021
Deferred tax assets 16.3 18.4
Deferred tax liabilities -10.3 -10.7
Net deferred tax assets 6.0 7.7
The movement on the deferred income tax amount during the year:
EUR million 2022 2021
1 Jan 7.7 8.2
Recognised in the income statement -0.1 0.1
Recognised in other comprehensive income:
Translation differences 0.5 0.1
Defined benefit plans -2.0 -0.7
Hedge accounting 0.0 -0.1
31 Dec 6.0 7.7
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred
income taxes relate to the same fiscal authority.
Deferred tax liabilities
EUR million Retirement benefit asset Fair value adjustment Other temporary differences Total
1 Jan 2021 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
Recognised in the income statement 0.8 0.0 -0.6 0.1
Recognised in other comprehensive income 0.5 0.5
Translation differences 0.0 -0.8 -0.2 -1.0
31 Dec 2022 1.3 4.9 4.1 10.3
Eltel Annual Report 2022 76
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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 26 Non-controlling interests
EUR million
Subsidiaries with
non-controlling interest
Summarised statement of balance sheet 31 Dec 2022 31 Dec 2021
Current assets 28.2 28.2
Non-current assets 3.8 4.1
Total assets 32.0 32.3
Current liabilities 12.1 11.3
Non-current liabilities 1.5 1.7
Total liabilities 13.6 13.0
Equity:
Shareholders’ equity 18.4 19.3
Non-controlling interest 7.4 7.7
Summarised income statement 2022 2021
Net sales 35.3 36.3
Net result 0.2 1.5
Total comprehensive income 0.2 1.5
Total comprehensive income allocated to non-controlling
interests 0.1 0.6
Dividends paid to non-controlling interest -0.4 -0.4
Summarised cash flows 2022 2021
Cash flow from operating activities 1.5 1.7
Cash flow from investing activities -0.1 0.0
Cash flow from financing activities -1.4 -1.8
% of ownership 60% 60%
Eltel Networks Pohjoinen Oy, in Finland, is a subsidiary with a non-controlling interest of 40%.
Note 25 Acquisitions and divestments
Acquisitions
During 2022 or 2021, 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 com-
pleted on 30 April 2021 and it had a negative cash flow effect of EUR 3.8 million and impact
on Group EBIT of EUR -0.1 million in Q2 2021. Eltel engaged ENACO as a subcontractor for
the completion of any remaining projects. The German high voltage business was included
in Other business.
The divested assets and liabilities at the date of divestment are presented in the
following table:
EUR million 2022 2021
Total assets 2.7
Total liabilities 1.7
Business combinations and
capital expenditure
This section comprises the following notes:
25 Acquisitions and divestments 77
26 Non-controlling interests 77
27 Intangible assets 78
28 Property, plant and equipment 79
29 Leasing 79
Eltel Annual Report 2022 77
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Note 27 Intangible assets
2022
EUR million Goodwill
Customer
relationship
Order
backlog Brand
Advances
paid
Other
intangible
assets Total
Cost 1 Jan 488.1 134.9 14.1 48.0 0.0 34.1 719.2
Additions 0.1 0.1 0.1
Disposals -0.0 -0.0
Reclassification -0.0 0.0
Translation differences -9.0 -5.3 -0.6 -0.8 -0.6 -16.4
Cost 31 Dec 479.0 129.6 13.4 47.2 0.1 33.6 702.9
Accumulated amortisation and impairment 1 Jan
223.0 134.8 14.1 20.8 21.9 414.5
Accumulated amortisation of disposals 0.0 0.0
Amortisation during the year 0.1 0.0 3.3 3.4
Translation differences -5.3 -0.6 -0.4 -6.3
Accumulated amortisation and impairment 31 Dec 223.0 129.6 13.4 20.8 24.8 411.6
Carrying value 1 Jan 265.0 0.1 0.0 27.2 0.0 12.3 304.6
Carrying value 31 Dec 256.0 0.0 0.0 26.4 0.1 8.8 291.3
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
Reclassification 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 year 0.3 3.1 3.4
Impairment 0.2 0.2
Reclassification 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
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 indefinite useful life. No foreseeable limit to the period
over which it is expected to generate net cash inflows for the Group can be seen. Eltel brand is tested for impairment annually together
with goodwill.
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.
2022 2021
2022
EUR million Brand Goodwill WACC Brand Goodwill WACC
Country Unit Finland 8.2 79.7 11.8% 8.2 79.7 9.2%
Country Unit Sweden 5.8 56.3 12.9% 6.3 60.9 9.3%
Country Unit Norway 7.9 76.1 13.1% 8.3 80.5 9.5%
Country Unit Denmark 3.6 34.4 11.4% 3.6 34.4 9.1%
Smart Grids Germany 0.9 8.6 12.6% 0.9 8.7 9.8%
Other units 0.1 0.9 12.6% 0.1 0.9 10.0%
Total 26.4 256.0 27.3 265.0
The recoverable amount of above cash generating units (CGUs) is determined based on value-in-use calculations. These calculations
use pre-tax cash flow projections based on business plans approved by management covering a five-year period. Cash flows beyond the
five-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. Profitability of the business plan – determined based on previous years actual profitability and the planned actions to increase the
profitability; EBITA.
3. Discount rate (pre-tax) – determined based on the weighted average cost of capital (WACC) which describes the total cost of debt and
equity considering the risks specific to the business.
In 2022 WACC rates have increased considerably, to a large extent as a result of increased interest rates. The discount rates used in
calculations reflect the current state of macroeconomic uncertainty and risks specific to the business.
The annual impairment test conducted for year-end 2022 or 2021 resulted in no impairment. Anyhow, the goodwill in country unit
Sweden is sensitive to impairment in case of negative changes to the estimated future cash flows or a further increase in WACC rate.
At year-end, the recoverable amount for CGU Sweden exceeds the carrying amount by 5% (27) and use of pre-tax WACC of 13.4%
(11.3), reduction of perpetual growth below 1% or reduction in EBITA by 0.3 percentage points would change the recoverable amount to
be equal to its carrying amount. In CGU Norway the recoverable amount exceeds the carrying amount by 15% and use of pre-tax WACC
of 14.7%, reduction of perpetual growth to below 0% or reduction in EBITA by 1.6 percentage points 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 .
Eltel Annual Report 2022 78
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Note 28 Property, plant and equipment
2022
EUR million Land Buildings
Machinery and
equipment Total
Cost 1 Jan 0.1 0.9 68.4 69.4
Additions 0.0 3.9 3.9
Disposals -0.9 -0.9
Translation differences -0.0 -0.0 -2.1 -2.1
Cost 31 Dec 0.1 0.9 69.3 70.2
Accumulated depreciation 1 Jan 0.0 0.2 57.5 57.7
Accumulated depreciation of disposals -0.8 -0.8
Depreciation during the year 0.0 4.5 4.5
Impairment 0.0 0.0
Translation differences -0.0 -0.0 -1.9 -2.0
Accumulated depreciation 31 Dec 0.0 0.3 59.2 59.5
Carrying value 1 Jan 0.0 0.6 11.0 11.6
Carrying value 31 Dec 0.0 0.6 10.1 10.7
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
Divestment -0.1 -4.2 0.3 -4.0
Reclassifications 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 divestment -1.8 0.4 -1.4
Depreciation during the year 0.2 4.8 5.0
Impairment 0.1 0.1
Reclassifications 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
Right-of-use assets are not included in property, plant and equipment. See following note
29 for more information about leases.
Note 29 Leasing
Under IFRS 16 Eltel recognises a right-of-use asset representing its right to use the under-
lying 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 financing expenses for the lease liabilities. IFRS 16 requires use of estimates for val-
uating 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 2022 2021
Depreciation
Depreciation of right-of-use assets 21.8 23.4
Other operating expenses
Short-term lease expense 2.5 2.0
Expense for leases of low-value assets 2.1 2.4
Financial expenses
Interest expense on lease liabilities 2.1 1.6
Total 28.4 29.3
Right-of-use assets
EUR million Buildings
Machinery and
equipment Total
1 Jan 2021 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
Additions 5.4 13.7 19.2
Depreciation -8.9 -13.0 -21.8
Other -2.7 -1.4 -4.1
31 Dec 2022 25.0 21.5 46.5
Leasing liabilities
EUR million Non-current Current Total
1 Jan 2021 39.0 21.8 60.8
Changes during the year -3.2 -3.1 -6.3
Divestments 0.0 0.0
31 Dec 2021 35.8 18.6 54.5
Changes during the year -4.9 -1.8 -6.7
31 Dec 2022 31.0 16.8 47.8
Maturity analysis of leasing liabilities is presented in note 14.2 Liquidity risk. In addition,
the Group is committed to EUR 0.4 million (0.6) future lease payments for short-term lease
commitments.
Eltel Annual Report 2022 79
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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 Remuneration to senior executives
Number of key executives 31 Dec 2022 31 Dec 2021
Board of Directors
Men 3 4
Women 3 1
Other key executives
Men 6 6
Women 2 2
Total 14 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). 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. Information regarding the guidelines is
presented in Board of Directors’ report, page 44-45.
Board of Director’s fees
EUR thousands 2022 2021
Ulf Mattsson 118 116
Roland Sundén 53 51
Gunilla Fransson 53 49
Håkan Dahlström
1)
15 46
Joakim Olsson 44 43
Erja Sankari
2)
30
Ann Emilson
2)
30
Total 341 304
1)
Until April 2022
2)
From May 2022 onwards
Other key executives compensation
2022 2021
EUR thousands
Håkan
Dahlström
1)
Casimir
Lindholm
2)
Other senior
executives
3)
Casimir
Lindholm
Other senior
executives
3)
Fixed salary 272 642 1,685 623 1,670
Annual variable salary 259 492
Long-time variable
salary 7 17 24 51 16
Pension 41 156 271 174 308
Other benefits 7 0 76 0 59
Total 328 815 2,055 1,108 2,545
3)
From 1 August 2022
3)
Until 31 July 2022
3)
7 individuals
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 programmes .
Remuneration and other
This section comprises the following notes:
30 Remuneration to senior executives 80
31 Retirement benefit obligations 82
32 Auditors’ fees 83
33 Related party information 83
34 Group companies 83
35 Events after balance sheet date 83
Salaries, remuneration and benefits
Salaries and other remuneration to Board of Directors and senior executives excluding
pensions and other benefits amounted to EUR 3.0 million (3.4) of which the fixed salaries
amounted to EUR 2.9 million (2.6) including fees to Board of Directors of EUR 0.3 million
(0.3). Out of this, variable salaries including provisions for LTIP 2018, LTIP 2021 and LTIP
2021 amounted to EUR 0.0 million (0.8). The defined contribution pension plans for senior
executives amounted to EUR 0.5 million (0.5) and the amount of other indirect employee
costs for senior executives amounted to EUR 0.4 million (0.3).
The annual variable salary component is based on predetermined and measurable
financial and individual targets. The criteria are recommended by the Remuneration Com-
mittee and ultimately determined by the Board of Directors. The CEO has an 80% variable
salary maximum outcome component and the remaining members of GMT have a 60%
variable salary maximum outcome component.
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 reflect 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 six 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.
Eltel Annual Report 2022 80
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Long-term incentive programmes
LTIP 2 018
The Extraordinary General Meeting (EGM) in September 2018 approved the implemen-
tation of a share saving programme 2018 (the “LTIP 2018”) for key personnel in the Eltel
Group. The term of LTIP 2018 was three years and the participants consisted of eight and
they were the CEO, CFO and six members of the Group Management Team.
The aim of the programme was 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 programme assumed that the participant acquired and locked
Eltel ordinary shares into the LTIP programme (“Savings Shares”). For each acquired Sav-
ings Share, the participant had entitled, after a certain qualification period and provided
continued employment throughout the entire period, to receive allotment of one Eltel
matching/retention share (a “Matching Share”). Depending on fulfilment of performance
targets linked to Eltel’s EBITDA for financial year 2021, the participant might also be entitled
to receive allotment of additional Eltel shares (”Performance Shares”).
LTIP 2018 was completed during the second quarter of 2022. The performance target
linked to Eltel’s EBITDA for the financial year 2021 was not fulfilled. In accordance with the
terms of LTIP 2018, the Board of directors resolved in May 2022 on the allotment of 87,700
Matching Shares and no Performance Shares to participants in LTIP 2018. Allotment of
Matching Shares to the participants was made without consideration and Matching Shares
were delivered to the participants in June 2022.
LTIP 2 021
Eltel AB’s Annual General Meeting 2021 adopted a long-term incentive programme (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 (defined 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 fulfilment 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 qual-
ification period (defined below), provided continued employment and dependent on the
fulfilment of certain performance requirements for the financial 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 Per-
formance 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 corre-
spond to 120 percent of the volume-weighted average price according to Nasdaq Stock-
holm’s official price list for the Eltel Share during the first 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 cor-
responds 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 five (5) percent of the participant’s fixed
base salary during the financial year 2021, however, not exceeding the number of Savings
Shares that the participant can tie up within the scope of LTIP 2021 according to the below.
The Savings Shares covered by the LTIP 2021 were acquired in a structured way in ordi-
nary 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 Company.
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
first quarterly report for the first quarter of 2024, and (ii) the first record date for dividends
decided by the Annual General Meeting 2024. The period up to this date is referred to as the
qualification period (vesting period).
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.
LTIP 2 02 2
Eltel AB’s Annual General Meeting 2022 adopted a long-term incentive programme (LTIP
2022) 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 partici-
pants are based in Sweden and other countries where the Eltel Group is active. Participation
in the LTIP 2022 assumes that the participant acquires and locks Eltel Shares into LTIP 2022
(“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 (defined below) and exercise options issued by the company. The number
of allotted Eltel Shares and options will depend on the number of Eltel Shares that they
have purchased themselves and on the fulfilment of certain performance requirements.
Eltel Shares are ordinary shares in the company (“Eltel Shares”). The term of LTIP 2022 is
approximately three years.
For each acquired Savings Share, the participant shall be entitled to, after a certain
vesting period (defined below), provided continued employment and dependent on the
fulfilment of certain performance requirements during the financial years 2022-2025,
receive allotment of Eltel Shares (”Performance Shares”) and exercise 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 Per-
formance 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 corre-
spond to 120 percent of the volume-weighted average price according to Nasdaq Stock-
holm’s official price list for the Eltel Share during the first ten trading days that directly fol-
lows the Annual General Meeting 2022 (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 2022, the participant must invest in Savings Shares
for an amount corresponding to approximately five (5) percent of the participant’s fixed
base salary for the financial year 2022, however, not exceeding the number of Savings
Shares that the participant can tie up within the scope of LTIP 2022 according to the above.
The Savings Shares covered by the LTIP 2022 were acquired in a structured way in ordi-
nary trading in the stock market during a certain period of time.
On balance sheet date, the LTIP 2022 comprises maximum 612,000 Performance
Shares and 612,000 Performance Options, corresponding to approximately 0.8% of the
total outstanding shares and votes in the Company.
Allotment of Performance Shares and Performance Options within LTIP 2022 will be
made during a limited period of time following the latter of the date of (i) the presentation
of the first quarterly report for the first quarter of 2025, and (ii) the first record date for divi-
dends decided by the Annual General Meeting 2025. The period up to this date is referred
to as the qualification period (vesting period).
LTIP 2022 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 22,000 8.0× 8.0×
B Group Management Team
1)
7,000 8.0× 8.0×
C Other key individuals
2)
5,500 8.0× 8.0×
1)
Maximum 7 persons.
2)
Maximum 4 persons.
Costs for the LTIP programmes
In accordance with IFRS 2, the estimated total expenses for the LTIP 2018, LTIP 2021 and
LTIP 2022 programmes amounted to EUR 385 thousand (206), of which EUR 365 thousand
(206) for the President and CEO and other senior executives. The total costs for the year
amounted to EUR 54 thousand (60), of which EUR 49 thousand (73) was to 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 flow. Related social costs are expensed dur-
ing the vesting period based on the change in value of the Eltel AB’s share.
Eltel Annual Report 2022 81
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Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
The amounts recognised in the income statement and other comprehensive income
EUR million 2022 2021
Current service cost -0.7 -0.7
Net interest cost 0.1 0.1
Sum recognised in the income statement -0.7 -0.7
Remeasurements recognised in other comprehensive
income:
Financial assumptions -24.5 -0.7
Experience adjustments 14.6 -2.5
Total pension charges recognised during the year -10.5 -3.9
Maturity profile of future gross benefit payments
EUR million 2022 2021
Less than 1 year 4.7 4.3
1–5 years 18.0 17.1
5–10 years 20.6 20.0
10–20 years 33.7 34.3
20–30 years 20.1 21.3
Over 30 years 10.0 11.1
Total 107.1 108.1
The maturity profile amounts are undiscounted amounts. Special salary tax is excluded.
The maturity profile of future gross benefit payments does not represent the expected con-
tribution payments, as it excludes the impact of plan assets. The expected contributions to
the plan for 2023 are EUR 3.9 million.
The principal actuarial assumptions 2022 2021
Discount rate, %
Sweden 3.70 1.55
Finland 3.90 0.70
Future salary increase expectation, %
Sweden closed plan closed plan
Finland 3.40 3.10
Inflation rate, %
Sweden 2.00 2.10
Finland 2.40 1.90
The pension plan in Sweden forms 82% of the Groups total obligations. The plan is sensi-
tive to changes in discount rate and inflation. An increase of 0.5% in discount rate would
reduce the obligation in Sweden by EUR 3.3 million. Similar rise in inflation rate would have
the opposite effect and increase the obligation by EUR 3.6 million. If the discount rate
was decreased by 0.5% the obligation would increase by EUR 3.6 million whilst similar
decrease in the inflation rate would reduce the obligation by EUR 3.3 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 2022 and 2021 fiscal years, the company did not have access to such information that
would enable the company to record this plan as a defined benefit plan. Consequently, the
ITP pension plan secured through insurance with Alecta is recorded as a defined contri-
bution plan. The contribution to the plan is determined based on the age, salary and previ-
ously earned pension benefits of the plan participants. The company has an insignificant
part in the plan.
The collective consolidation ratio reflects the market value of Alecta’s assets as a
percentage of insurance obligations, calculated in accordance 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 restoring
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
2022, Alecta’s surplus corresponded to a collective consolidation ratio of 172% (172%).
The distribution of plan assets in Sweden is as follows:
% 2022 2021
Debt instruments 71 69
Equity instruments 28 29
Cash and cash equivalents 2 2
Total 100 100
Note 31 Retirement benefit obligations
The majority of employees in the Group are included in defined contribution pension plans
and largest defined contribution liability is in Denmark. Some countries also have defined
benefit plans, largest one being in Sweden, where the plan has been closed for any new
earnings at year end 2007. Benefits earned since then are covered by premiums paid to
Alecta. Changes in actuarial assumptions during 2022 have changed the net pension lia-
bility to a net asset in Sweden. The net asset is presented as part of non-current financial
asset in the balance sheet. There are also smaller voluntary pension plans in Finland that
are accounted for as defined benefit plans.
Pension liabilities in the balance sheet
EUR million 31 Dec 2022 31 Dec 2021
Defined benefit pension liability 0.5 9.0
Defined benefit pension asset -5.9
Net defined benefit pension liability (+)/-asset (-) -5.4 9.0
Defined contribution pension liability 5.4 5.3
Net pension liability 0.1 14.4
Defined pension liabilities in the balance sheet
EUR million 31 Dec 2022 31 Dec 2021
Present value of funded obligations 61.8 90.4
Fair value of plan assets -67.2 -81.4
Net liability (+)/ -asset (-) -5.4 9.0
The movement in the fair value of plan assets
EUR million 2022 2021
Fair value of assets 1 Jan 81.4 80.9
Interest on plan assets 1.1 0.6
Remeasurement of plan assets -8.0 2.6
Contributions by employer 0.1 0.1
Benefits paid -0.8 -0.9
Gains and losses on curtailments and settlements -1.4 -0.6
Translation differences -5.1 -1.3
Fair value of assets 31 Dec 67.2 81.4
The movement in the defined benefit obligations
EUR million 2022 2021
Total obligations 1 Jan 90.4 97.6
Current service cost -0.7 -0.7
Interest cost 1.2 0.7
Remeasurement of pension obligation -17.9 -0.7
Benefits paid -4.1 -4.2
Gains and losses on curtailments and settlements -1.5 -0.6
Translation differences -5.6 -1.6
Total obligations 31 Dec 61.8 90.4
Eltel Annual Report 2022 82
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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 35 Events after balance sheet date
Eltel AB establishes Sustainability-Linked Finance Framework and
contemplates issuance of hybrid capital securities
On 24 March 2023, it was announced that Eltel AB has established a Sustainability-Linked
Finance Framework (the “Eltel SLF Framework”) designed to support the future issuance
of sustainability-linked securities by Eltel. For the securities issued under the Eltel SLF
Framework, a premium will be payable or the interest rate will change if Eltel fails to meet
the predefined sustainability performance targets at an agreed testing date for a desig-
nated sustainability performance indicator. By setting up the Eltel SLF Framework, Eltel
strives to contribute to solving the major issues related to climate change and to establish a
structure for integrating sustainability features in its financing.
Furthermore, Eltel has mandated Danske Bank A/S, Nordea Bank Abp and OP
Corporate Bank plc to act as joint lead managers to arrange fixed income investor meet-
ings starting on 27 March 2023 in order to investigate the prerequisites for potentially
issuing sub ordinated sustainability-linked hybrid capital securities under the Eltel SLF
Framework. The expected size of the potential issue is minimum EUR 20 million and certain
existing shareholders have informed Eltel that they intend to subscribe for EUR 10 million
in the potential issue. The capital securities are envisaged to not have a maturity date but
to be subject to an increased interest rate level as from 3.25 years after the issue date. The
net proceeds from such an issue would be used for partially refinancing certain existing
indebtedness of Eltel and to support Eltel’s expansion within renewable energy infrastruc-
ture and efforts to improve profitability. Subject to prevailing market conditions, an issue of
such capital securities may follow in the near future.
Note 34 Group companies
31 Dec 2022 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%
NKEL I/S Denmark 50%
2)
1)
Group voting 100%.
2)
Eltel’s estimated share of the operations is 30-35%
During the financial year 2022 a new jointly controlled entity NKEL I/S was established
in Denmark.
Eltel Networks UK Limited is exempt from statutory audit in accordance with the
Company’s Act Section 479 A.
Note 32 Auditors’ fees
EUR million 2022 2021
Main auditor
Audit 0.7 0.7
Other services 0.1 0.1
Total 0.8 0.8
Other auditing firms
Audit 0.1
Other services 0.2 0.3
Total 0.3 0.3
Total 1.1 1.2
The main auditor of the Group in 2022 and 2021 has been KPMG.
Note 33 Related party information
Eltel’s related parties include the parent company Eltel AB and its subsidiaries and jointly
controlled entities. Related parties include also the members of the Board of Directors, the
CEO and other management team members. In addition, significant unusual transactions
with shareholders are included in related party transactions.
In 2022 the related party transactions are conducted in the ordinary course of business
of the Group. No significant unusual transactions have taken place between Eltel and
related parties during the year.
Transactions with key individuals in executive positions
Salaries, remuneration and other benefits are accounted for in note 6 Employee benefit
expenses and note 30 Remuneration to senior executives.
The Group has not issued any loans to the persons classified as related party on 31
December 2022 or 31 December 2021.
Transactions with related party companies
List of group companies and jointly controlled entities is presented in note 34. Transactions
between Group companies are eliminated in the consolidated financial statements.
Eltel Annual Report 2022 83
Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
Parent Company
financial statements
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 84
Income statement
Statement of comprehensive income
EUR thousands Note 2022 2021
Net sales 4 2,472 2,177
Personnel costs 5 -1,794 -1,754
Other operating expenses -5,466 -5,188
Total operating expenses -7,259 -6,942
Operating result -4,788 -4,765
Interest and other financial income 21,481 22,099
Interest and other financial expense -1,883 -3,247
Financial items, net 7 19,598 18,852
Result after financial items 14,810 14,086
Appropriations
Group contribution given 13 -14,500 -14,000
Result before tax 310 86
Tax for the year 8
Net result for the year 310 86
EUR thousands Note 2022 2021
Net result for the year 310 86
Other comprehensive income
Total comprehensive income for the year 310 86
Balance sheet
EUR thousands Note 31 Dec 2022 31 Dec 2021
ASSETS
Non-current assets
Financial assets
Shares in group companies 9 68,308 68,308
Long-term loans receivable from group companies 10 475,568 503,162
Intangible assets 22 60
Total non-current assets 543,898 571,531
Current assets
Receivables from group companies 10 1,015 1,063
Other receivables 305 370
Cash pool receivables 10 4,371 10
Cash and cash equivalents 98 105
Total current assets 5,790 1,548
TOTAL ASSETS 549,688 573,080
EQUITY AND LIABILITIES
Restricted equity
Share capital 159,576 158,839
Statutory reserve 695 453
Total restricted equity 160,271 159,292
Non-restricted equity
Retained earnings 284,945 285,803
Net result for the year 310 86
Total non-restricted equity 285,257 285,889
Total equity 11 445,528 445,180
LIABILITIES
Current liabilities
Debt 12 33,308 72,476
Liabilities to group companies 13 70,324 54,267
Trade and other payables 14 528 1,156
Total current liabilities 104,160 127,899
Total liabilities 104,160 127,899
TOTAL EQUITY AND LIABILITIES 549,688 573,080
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 85
Changes in equity
EUR thousands
Share
capital
Statutory
reserve
Non-restricted
equity
Total
equity
1 Jan 2022 158,839 453 285,889 445,180
Net profit for the year 310 310
Total comprehensive income/loss for the year 310 310
Transactions with owners
1)
Proceeds from shares issued 980 980
Reduction of share capital -242 242
Purchase of own shares -982 -982
Equity-settled share-based payment 37 37
Total transactions with owners 738 242 -945 36
31 Dec 2022 159,576 695 285,257 445,528
1 Jan 2021 158,839 453 285,745 445,036
Net profit for the year 86 86
Total comprehensive income/loss for the year 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)
For more information about equity-settled share-based payments see note 30 Remuneration to senior executives in the consolidated financial statements and for share
transactions see note 11 Equity and share capital.
Cash flow statement
EUR thousands Note 2022 2021
Cash flow from operating activities
Profit/loss before taxes 310 86
Adjustments for:
Depreciation 38 51
Equity-settled share-based payment 37 58
Group contribution given 13 14,500 14,000
Financial items, net 7 -19,598 -18,852
Changes in working capital:
Trade and other receivables 111 634
Trade and other payables -783 -1,426
Cash flow from operating activities before financial items and
taxes -5,385 -5,448
Financial income received 34,834 7,237
Financial expenses paid -1,800 -2,718
Cash flow from operating activities 27,649 -929
Cash flow from investing activities
Payments received from loans from group companies 14,399 4,973
Purchases of property, plant and equipment (PPE) -8
Cash flow from investing activities 14,339 4,965
Cash flow from financing activities
Proceeds from issuance of share capital 982
Purchase of own shares -982
Proceeds from short-term borrowings 10,500 31,000
Payments of short-term borrowings -50,000 -11,000
Proceeds from other financial assets 35,000
Payments of liabilities to shareholders -35,000
Proceeds from short-term borrowings from group companies 11,504 -12,016
Payments of group contributions -14,000 -12,000
Cash flow from financing activities -41,996 -4,016
Decrease/increase in cash and cash equivalents -8 20
Cash and cash equivalents at beginning of year 105 85
Cash and cash equivalents at end of year 98 105
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 86
Note 1 General information
Eltel AB’s role is to own and govern the shares related to Eltel Group. The Company holds
management functions but has no operative business activities and its risks are mainly
attributable to the value and activities of its subsidiaries. All transactions with group
companies are performed on an arm’s length basis. Additional general information about
the Parent Company can be found in note 1 Corporate information in the consolidated
financial statements.
Note 2 Accounting principles
Basis for the preparation of the reports
The annual report for the Parent Company, Eltel AB, has been prepared in accordance with
the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. RFR 2 states
that the Parent Company in its annual report shall apply 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 Account-
ing policies for the consolidated accounts in the consolidated financial 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 figures in the Parent Company financial statements are presented in thousands of
Euro unless otherwise stated.
Shares and participations in subsidiaries
Shares and participations in subsidiaries are reported at acquisition cost less deduction
for possible write-downs. Dividends received are reported as revenues to the extent they
originate from earnings earned after the acquisition. Dividend amounts exceeding these
returns are considered as repayments of the investment and reduce the carrying value of
the participations.
When there is an indication that shares and participations in subsidiaries have decreased
in value, an estimate is made of the recoverable amount. If this value is lower than the
reported value, a write-down is made. Write-downs/impairment losses are reported as a
separate line in the income statement.
Financial instruments
The Company applies fair value in accordance with the Swedish Annual Accounts Act 4:
14a-d and hence the description of the accounting principles in Financial instruments of the
consolidated financial statements also applies to the Parent Company with the exception of
financial guarantees. The Parent Company applies the rule permitted by the Swedish Financial
Reporting Board to the reporting of financial guarantee agreements issued for the benefit of
subsidiaries, associated companies and joint ventures. The Parent Company recognises finan-
cial guarantees as a provision in the balance sheet when the company has an obligation for
which payment is probably necessary to settle the commitment.
The Company’s financial instruments are comprised of long-term receivables from
Group companies, other financial assets, current receivables from Group companies and
also cash and cash equivalents. These make up the category financial assets at amor-
tised cost. Financial instruments are also comprised of long-term borrowing, short-term
liabilities to group companies, accounts payable and other liabilities. These comprise the
category financial liabilities at 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
14 Financial risk management in the consolidated financial statements applies to the Par-
ent Company as well in all material aspects.
Note 4 Net sales
EUR thousands 2022 2021
Remunerations from group companies for group-wide
administration 2,472 2,177
Total 2,472 2,177
Note 5 Employee benefit expenses
EUR thousands 2022 2021
Salaries and other remunerations 1,162 1,124
Social security contributions:
Pension costs 225 172
Other social security contributions 407 458
Total 1,794 1,754
2022 2021
Average number of employees 4 5
Of whom men 45% 22%
Salaries and other remunerations to senior executives were EUR 0.6 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 was employed by other group company until July 2022, were EUR 0.9 million (1.1). From
August 2022 onwards the President and CEO has been employed by Eltel AB. Group senior
executives participate in the long-term share-based incentive programmes LTIP 2018, LTIP
2021 and LTIP 2022. Total expense for the programmes for the year was EUR 53 thousand
(70), of which EUR 48 thousand (68) for the President and CEO and other senior executives.
More information of Group senior executives and the Board of Directors is presented in
note 6 Employee benefit expenses and 33 Related party information in the consolidated
financial statements.
In Eltel AB the number of individuals in the Board of Directors was six in 2022 and five
in 2021 and the number of other senior executives employed by the company was two in
2022 and 2021.
Notes to the Parent Company
financial statements
Notes to the Parent Company financial statements
1 General information 87
2 Accounting principles 87
3 Financial risk management 87
4 Net sales 87
5 Employee benefit expenses 87
6 Auditors’ fees 88
7 Result from financial items 88
8 Taxes 88
9 Shares in group companies 88
10 Receivables from related parties 88
11 Equity and share capital 89
12 Liabilities 89
13 Liabilities to group companies 89
14 Trade and other payables 89
15 Contingent liabilities and pledged assets 89
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Eltel Annual Report 2022 87
Note 6 Auditors’ fees
EUR thousands 2022 2021
Main auditor
Audit assignments 159 133
Tax assignments 7 5
Other assigments 14
Other auditing firms
Other assignments 91 108
The company in total 271 246
Main auditor in 2022 and 2021 has been KPMG.
Note 7 Result from financial items
EUR thousands 2022 2021
Interest and other financial income
Interest income, loans from group companies 21,284 21,889
Other financial income 0
Other financial income, group companies 197 210
Total 21,481 22,099
Interest and other financial expenses
Interest expenses -994 -2,558
Interest expenses, group companies -754 -242
Expected credit loss write-down on internal loans
receivable 97 -27
Other financial expenses -233 -419
Total -1,883 -3,247
Total financial items 19,598 18,852
Note 8 Taxes
EUR thousands 2022 2021
Income taxes
Result before tax 310 86
Tax calculated at Swedish tax rate 64 18
Income not subject to tax -20
Expenses not deductible for tax purposes 47 48
Tax effect of results for which no deferred income tax
was recognised -91 -66
Income taxes in the income statement
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 offsetting is utilised in taxation between
the entities. The amount of deferred tax assets for losses carried forward in Sweden is
reported in note 24 in the consolidated financial statements and reported in companies
where Eltel estimates to utilise the losses.
Note 9 Shares in group companies
EUR thousands 2022 2021
Acquisition value
Opening balance 1 Jan 268,308 268,308
Closing balance 31 Dec 268,308 268,308
Accumulated impairment losses
Opening balance 1 Jan -200,000 -200,000
Closing balance 31 Dec -200,000 -200,000
Carrying amount on the balance sheet 68,308 68,308
Shares are held in the following subsidiaries:
The InfraNet Company AB, 556728-6645, Stockholm 2022 2021
Share of equity, % 100 100
Share of voting power, % 100 100
Number of shares 11,000 11,000
Book value 68,308 68,308
Note 10 Receivables from related parties
Non-current receivables
EUR thousands 31 Dec 2022 31 Dec 2021
Loans from group companies 475,568 503,162
Total 475,568 503,162
Current receivables
EUR thousands 31 Dec 2022 31 Dec 2021
Cash pool receivable 4,371 10
Accounts receivable 1,015 1,063
Total 5,386 1,073
Interest resulting from loans to group companies is capitalised annually. Capitalised inter-
est 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 2022, a reversal of write-
down amounting to 97 thousand euro (write-down of 27) has been recognised in the credit
loss reserve of long-term loans receivable. For more information about the ECL model,
please refer to note 14 in the consolidated financial statements.
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Eltel Annual Report 2022 88
Note 15 Contingent liabilities and pledged assets
Contingent liabilities
EUR thousands 31 Dec 2022 31 Dec 2021
Commercial guarantees on behalf of subsidiaries 103,208 108,723
Commercial guarantees on behalf of other parties 113
Total guarantees 103,208 108,836
Pledged assets
EUR thousands 31 Dec 2022 31 Dec 2021
Pledged subsidiary shares 68,308 68,308
Pledged other assets 343,690 343,623
Total pledged assets 411,998 411,931
At year-end, Eltel Group had secured its debt obligations towards the banks under the
financing agreement by share and intragroup loan pledges and floating charges over cer-
tain assets of the Group, all on customary terms and conditions. Eltel AB has pledged the
assets shown in the above table as a security for the financing agreement.
Note 11 Equity and share capital
On 1 February 2022, the share capital was reduced with EUR 242,039.47 by redemption of
240,000 C shares held by Eltel.
On 18 March 2022, Eltel issued 972,000 redeemable and convertible class C shares
based on the authorisation given to the Board by the AGM on 5 May 2021. The purpose of
the issue of class C shares is to use the shares in Eltel’s long-term incentive programme
LTIP 2021. In connection with the issue the shares have been repurchased by Eltel. Eltel
holds the shares at 31 December 2022 and will hold the shares until it is time to deliver
shares to the participants of LTIP 2021. Prior to delivery of the shares to participants, the
class C shares will be converted to ordinary shares. The share issue resulted in an increase
of share capital by EUR 980 260.
On 7 June 2022, Eltel converted 87,700 C shares to ordinary shares pursuant to the
company’s articles of association.
On 31 December 2022, the total number of shares amounted to 158,231,081 divided into
156,736,781 ordinary shares with 1 vote per share and 1,494,300 C shares with 1/10 vote
per share. On 31 December 2022 the share capital amounted to EUR 159,576 thousand.
A specification of changes in equity is found under the section “Changes in equity,
which is presented directly after the balance sheet.
Shareholders with more than 10% of the votes at 31 December 2022 are Solero Luxco
S.á.r.l. (a company controlled by Triton Funds) with 16.4% and Wipunen Varainhallinta Oy
with 14.3% of ordinary shares. More information about Eltel’s shareholders is found in “The
Eltel Share” on pages 95-96.
The Board’s proposal for the distribution of profits
The Parent Company’s non-restricted equity on 31 December 2022 was
EUR 285,256,998.77 of which the net profit for the year was EUR 310,289.34. The Board
of Directors proposes to the Annual General Meeting that no dividend be paid for the
year 2022 and that the non-restricted equity of EUR 285,256,998.77 be retained and
carried forward.
Note 12 Liabilities
EUR thousands 31 Dec 2022 31 Dec 2021
Current liabilities
Bank borrowings 33,308 72,476
Total liabilities 33,308 72,476
Note 13 Liabilities to group companies
EUR thousands 31 Dec 2022 31 Dec 2021
Cash pool payable 54,847 38,981
Accounts payable 977 1,286
Group contribution liabilities 14,500 14,000
Total 70,324 54,267
Note 14 Trade and other payables
EUR thousands 31 Dec 2022 31 Dec 2021
Trade payables 124 287
Accrued employee related expenses 133 252
Other short-term liabilities 148 511
Other accrued expenses 123 106
Total 528 1,156
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Eltel Annual Report 2022 89
The Company’s nancial statement will be submitted
for approval to the Annual General Meeting on 11 May 2023
The Board of Directors certies 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 prot or loss of the Company and the
Group; and that the management report for the Company and for the Group
gives a fair overview of the development and performance of the business,
position and prot 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 2023
Ulf Mattsson
Chairman of the Board of Directors
Joakim Olsson
Board member
Stefan Söderholm
Board member
Ann Emilson
Board member
Erja Sankari
Board member
Håkan Dahlström
President and CEO
Gunilla Fransson
Board member
Roland Sundén
Board member
Björn Tallberg
Board member
Our audit report was submitted on 29 March 2023
KPMG AB
Fredrik Westin
Authorized Public Accountant
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Eltel Annual Report 2022 90
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 2022, except for the corporate governance statement on pages 46-50. The annual
accounts and consolidated accounts of the company are included on pages 38-90 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 2022 and its nancial performance and cash ow for the year
then ended in accordance with the Annual Accounts Act. The consolidated accounts have
been prepared in accordance with the Annual Accounts Act and present fairly, in all mate-
rial respects, the nancial position of the group as of 31 December 2022 and their nan-
cial 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 46-50. The
statutory administration report is consistent with the other parts of the annual accounts
and consolidated accounts.
We therefore recommend that the general meeting of shareholders adopts the income
statement and balance sheet for the parent company and the group.
Our opinions in this report on the the annual accounts and consolidated accounts are
consistent with the content of the additional report that has been submitted to the parent
company’s audit committee in accordance with the Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International Standards on Auditing (ISA) and
generally accepted auditing standards in Sweden. Our responsibilities under those stand-
ards 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 fullled our ethical responsibilities in accordance with these
requirements.This includes that, based on the best of our knowledge and belief, no prohib-
ited 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 sufcient 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 signicance 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.
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 fullled over
time. It also means that revenues are being recognized over time (successively), where pro-
gress is measured in relation to the complete fulllment of Eltel’s performance obligations.
The projects’ results (“prot 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 signicant impact on the projects’ reported revenues and results. Unforeseeable costs
may also need to be included in the assessments in order to take project risks or disputed
claims into account. These items are regularly assessed by the Group and adjusted if
necessary. Expected losses are fully recognized as expenses as soon as they are known.
Revenues from project alterations and additional work are recognized on the basis of
what is judged to be received. Based on the above, there is, in total, a large element of
assessments on the part of Eltel in this area, which in turn affects the reporting of revenues
and results.
Response in the audit
We have obtained information about and evaluated management’s process for reviewing
projects, including the procedures they use for identifying and reporting loss-making and/
or high-risk projects. Project 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 protability. 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 reected in a
balanced way in the project forecasts.
Description of key audit matter
The carrying value of goodwill for the Group as at 31 December 2022 amounted to 256
MEUR, which is approximately 41 % 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 specic method
where management needs to make judgments of future conditions and plans, both inter-
nal 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 mar-
ket conditions.
Another important assumption is the discount rate that should be used to reect
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 2022 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.
Response in the audit
We have reviewed whether the goodwill impairment tests carried out by Eltel were per-
formed in accordance with the prescribed accounting method. We have further considered
the reasonableness of the assumptions in the cashow 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 disclosures in the annual
report and evaluated whether they are in line with the assumptions made in the Group’s
impairment tests, and that they correspond in material aspects to the information that
should be provided in accordance with IFRS.
Revenue and prot calculation of projects
See disclosure 4 and accounting principles on page 60 in the annual account and
consolidated accounts for detailed information and description of the matter.
Valuation of goodwill (group) and shares in group companies (parent company)
See disclosure 27 (group) and disclosure 9 (parent company) and accounting principles
on page 61 (group) and on page 87 (parent company) in the annual account and
consolidated accounts for detailed information and description of the matter.
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Eltel Annual Report 2022 91
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 1-36 and 95-101. The other information 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 identied above and consider whether the informa-
tion 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 con-
cern 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
accordance 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 inuence the economic decisions of users taken on the basis of these annual
accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exercise professional judgment and main-
tain 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 sufcient 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 over-
ride 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 Direc-
tor’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 signicant 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.
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 consol-
idated 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 signicant audit ndings during our audit,
including any signicant deciencies in internal control that we identied.
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 safeguards.
From the matters communicated with the Board of Directors, we determine those mat-
ters that were of most signicance 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
 
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 2022 and the proposed appropriations of the company’s prot or loss.
We recommend to the general meeting of shareholders that the prot be appropriated in
accordance with the proposal in the statutory administration report and that the members
of the Board of Directors and the Managing Director be discharged from liability for the
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 independent of the parent company and the group in
accordance with professional ethics for accountants in Sweden and have otherwise ful-
lled our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufcient 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
prot or loss. At the proposal of a dividend, this includes an assessment of whether the
dividend is justiable considering the requirements which the company’s and the group’s
type of operations, size and risks place on the size of the parent company’s and the group’s
equity, consolidation requirements, liquidity and position in general.
The Board of Directors is responsible for the company’s organization and the adminis-
tration 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 fulll the company’s accounting in accordance with law and handle the man-
agement of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby our opinion about
discharge from liability, is to obtain audit evidence to assess with a reasonable degree of
assurance whether any member of the Board of Directors or the Managing Director in any
material respect:
has undertaken any action or been guilty of any omission which can give rise to liability
to the company, or
in any other way has acted in contravention of the Companies Act, the Annual Accounts
Act or the Articles of Association.
Our objective concerning the audit of the proposed appropriations of the company’s prot
or loss, and thereby our opinion about this, is to assess with reasonable degree of assur-
ance whether the proposal is in accordance with the Companies Act.
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Eltel Annual Report 2022 92
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 prot or loss are not in accordance with the
Companies Act.
As part of an audit in accordance with generally accepted auditing standards in Swe-
den, we exercise professional judgment and maintain professional scepticism throughout
the audit. The examination of the administration and the proposed appropriations of the
company’s prot 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 rela-
tionships that are material for the operations and where deviations and violations would
have particular importance for the company’s situation. We examine and test decisions
undertaken, support for decisions, actions taken and other circumstances that are relevant
to our opinion concerning discharge from liability. As a basis for our opinion on the Board of
Directors’ proposed appropriations of the company’s prot 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 2022.
Our examination and our opinion relate only to the statutory requirements.
In our opinion, the Esef report has been prepared in a format that, in all material respects,
enables uniform electronic reporting.
Basis for opinion
We have performed the examination in accordance with FAR’s recommendation RevR 18
Examination of the Esef report. Our responsibility under this recommendation is described
in more detail in the Auditors’ responsibility section. We are independent of Eltel AB (publ)
in accordance with professional ethics for accountants in Sweden and have otherwise
fullled 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 mis-
statements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the Esef report is in all mate-
rial respects prepared in a format that meets the requirements of Chapter 16, Section 4(a)
of the Swedish Securities Market Act (2007:528), based on the procedures performed.
RevR 18 requires us to plan and execute procedures to achieve reasonable assurance
that the Esef report is prepared in a format that meets these requirements.
Reasonable assurance is a high level of assurance, but it is not a guarantee that an
engagement carried out according to RevR 18 and generally accepted auditing standards
in Sweden will always detect a material 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 inuence 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 comprehensive 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 effectiveness 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 validation that the Esef report has been prepared
in a valid XHMTL format 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 consolidated
statement of nancial performance, nancial position, changes in equity, cash ow and
disclosures in the Esef report have been marked with iXBRL in accordance with what fol-
lows from the Esef regulation.
The auditor’s examination of the corporate governance statement
The Board of Directors is responsible for that the corporate governance statement on
pages 46-50 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 govern-
ance statement. This means that our examination of the corporate governance statement
is different and substantially less in scope than an audit conducted in accordance with
International Standards on Auditing and generally accepted auditing standards in Sweden.
We believe that the examination has provided us with 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 chap-
ter 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 2023
KPMG AB
Fredrik Westin
Authorized Public Accountant
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Eltel Annual Report 2022 93
Other information
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Eltel Annual Report 2022 94
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 2022, the total number of shares amounts
to 158,231,081 divided into 156,736,781 ordinary shares with 1 vote per
share and 1,494,300 C shares with 1/10 vote per share. The share capital
entered in the trade register per 31 December 2022 is EUR 159,575,695.
Shareholders
As per 31 December 2022, Eltel has 3,621 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 14.3%, the Fourth
Swedish National Pension Fund (AP4) 9.6%, and Heikintorppa Oy 7.9%.
The four largest shareholders referred above together represent 48.2% of
the votes in the company.
Price development and trading volumes
Eltel share price declined in 2022. The closing price on 30 December 2022
was SEK 8.30, a decline of 48% over the year. The highest closing price was
SEK 15.90 on 4 January 2022 and the lowest was SEK 6.50 on 28 Septem-
ber 2022. At year-end, Eltel’s market capitalisation was SEK 1.30 million.
The trading volume on Nasdaq Stockholm was 26,362,182 shares, equiv-
alent to a turnover of SEK 221,203,398. Eltel shares were mainly traded on
Nasdaq Stockholm, 71% and in small volumes in other marketplaces, 29%.
The dividend policy
A dividend policy has been adopted whereby 50% of Eltel’s consolidated
net prot shall be paid in dividends over time (with exibility in relation to the
pay-out ratio).
Analysts
Eltel is followed by Carnegie and ABG Sundal Collier.
GEOGRAPHIC DISTRIBUTION OF SHAREHOLDERS 31 DEC 2022
OWNERSHIP BY SECTOR ON 31 DEC 2022
Finland 42.0%
Sweden 21.0%
Luxembourg 16.3%
United Kingdom 4.5%
United States 1.6%
Other 0.1%
Unknown 14.6%
Investment & PE 30.5%
Pension & Insurance 15.7%
Fund company 13.6%
Private Individuals 7.8%
Treasury shares 0.9%
Other 17.0%
Unknown 14.6%
ELTEL’S TOP 10 SHAREHOLDERS ON 31 DECEMBER 2022
Shareholders
Number of
shares
% of
share
capital
% of
votes
Solero Luxco S.á.r.l.
1)
25,683,845 16.2 16.4
Wipunen varainhallinta Oy 22,500,000 14.2 14.3
Fourth Swedish National Pension Fund 15,027,060 9.5 9.6
Heikintorppa Oy 12,400,000 7.8 7.9
Mariatorp Oy 10,000,000 6.3 6.4
Mandatum Life Insurance Company 9,414,863 6.0 6.0
Fidelity International (FIL) 7,104,292 4.5 4.5
Etola Group 6,005,000 3.8 3.8
Lancelot Asset Management AB 3,499,999 2.2 2.2
Mandatum Fund Management 2,789,819 1.8 1.8
Total 114,424,878 72.3 72.9
Other shareholders 42,311,903 26.8 27.0
Total ordinary shares in Eltel AB 156,736,781
Total C shares in Eltel AB
2)
1,494,300 0.9 0.1
Total shares in Eltel AB 158,231,081 100.0 100.0
1)
Company controlled by Triton Funds.
2)
The C shares are held by Eltel.
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Eltel Annual Report 2022 95
0
5
10
15
20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0
1,600
3,200
4,800
6,400
Volume (000s)SEK
ELTEL SHARE IN 2022 (SEK)
Eltel
OMX Stockholm PI
Volume
OWNERSHIP STRUCTURE ON 31 DECEMBER 2022
Shareholder spread
Number of
known owners Number of shares % of capital % of votes
Share of
known owners
1–1,000 2,681 667,671 0.4 0.4 75.0
1,001–5,000 626 1,522,748 1.0 1.0 17.5
5,001–10,000 114 887,958 0.6 0.6 3.2
10,001–50,000 106 2,264,447 1.4 1.4 3.0
50,001–100,000 14 1,064,349 0.7 0.7 0.4
100,001–500,000 13 2,635,159 1.7 1.7 0.4
500,001–1,000,000 4 2,541,724 1.6 1.6 0.1
1,000,001–5,000,000 7 15,472,214 9.8 9.0 0.2
5,000,001–10,000,000 4 32,524,155 20.6 20.7 0.1
10,000,001– 4 75,610,905 47.8 48.2 0.1
Anonymous ownership 23,039,751 14.6 14.7
Total 3,573 158,231,081 100.0 100.0 100.0
Source: Monitor by Modular Finance. Compiled and processed data from various sources, including Euroclear,
Morningstar and the Swedish Financial Supervisory Authority (Finansinspektionen).
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Eltel Annual Report 2022 96
Five-year summary
Condensed consolidated income statement Key gures
EUR million 2022 2021 2020 2019 2018
Net sales 823.6 812.6 938.0 1 087.6 1,188.9
Cost of sales -748.9 -724.5 -838.6 -1 004.7 -1,080.5
Gross profit 74.7 88.1 99.4 82.9 108.4
Other income 0.9 5.5 22.5 2.6 4.5
Expenses
-77.6 -79.1 -96.9 -97.1 -123.3
Share of profit/loss of joint ventures -0.2 0.4 1.1
Operating result (EBIT) -2.0 14.5 24.8 -11.2 -9.2
Financial expenses, net -9.5 -5.8 -9.8 -11.5 -8.8
Result before taxes -11.4 8.7 14.9 -22.7 -18.0
Taxes -3.5 -3.7 -9.7 -2.4 -4.1
Net result -14.9 4.9 5.3 -25.1 -22.2
EUR million 2022 2021 2020 2019 2018
Net sales 823.6 812.6 938.0 1,087.6 1,188.9
Net sales growth, % 1.4 -13.4 -13.8 -8.5 -10.6
Operative EBITA -1.9 14.8 11.4 -11.3 -2.2
Operative EBITA margin, % -0.2 1.8 1.2 -1.0 -0.2
Operative EBITA, segments 9.9 24.2 22.9 9.7 N/A
Operative EBITA margin, %, segments 1.4 3.3 2.8 1.1 N/A
Items affecting comparability
1)
-0.1 14.1 1.6 -4.8
EBITDA 27.8 46.5 63.0 29.7 5.1
Operating result (EBIT) -2.0 14.5 24.8 -11.2 -9.2
EBIT margin, % -0.2 1.8 2.6 -1.0 -0.8
Result after financial items -11.4 8.7 14.9 -22.7 -18.0
Net result for the year -14.9 4.9 5.3 -25.1 -22.2
Earnings per share EUR, basic and diluted -0.10 0.03 0.03 -0.17 -0.15
Return on equity (ROE), %
2),3)
-6.8 2.2 2.4 -10.6 -8.3
Return on operative capital employed (ROCE), %
2)
-3.5 23.6 13.0 -11.5 N/A
Leverage ratio
2)
4.5 2.6 2.0 6.7 N/A
Net working capital -21.0 -16.0 -25.1 -6.3 39.9
Number of personnel, average 5,053 5,176 6,196 7,036 7,563
1)
Includes gains and losses from divestment of businesses and from valuation of divested assets as held for sale.
2)
Calculated on a rolling 12-month basis. IFRS 16 is applied from 1 January 2019. Therefore ROCE and Leverage ratio are not comparable for 2018 and not presented.
3)
Assets and liabilities held for sale are not included (in 2020 German High Voltage business and in 2019 German Communication business and Aviation & Security business area).
Cash ow from operating activities
EUR million 2022 2021 2020 2019 2018
Operating result (EBIT) -2.0 14.5 24.8 -11.2 -9.2
Depreciation and amortisation 29.8 32.1 38.2 40.9 14.3
EBITDA 27.8 46.5 63.0 29.7 5.1
Changes in working capital 4.6 -10.1 16.6 37.9 6.8
Total financial expenses and taxes -12.5 -6.7 -13.9 -10.9 -10.1
Other -3.5 -7.4 -16.3 -5.4 1.3
Cash flow from operating activities 16.4 22.3 49.4 51.4 3.2
1)
1)
IFRS 16 is applied from 1 January 2019. Therefore cash ow from operating activities is not comparable for 2018.
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Eltel Annual Report 2022 97
Quarterly gures
Quarterly key nancial gures for the Group
EUR million Full-year 2022 Oct–Dec 2022 Jul–Sep 2022 Apr–Jun 2022 Jan–Mar 2022 Full-year 2021 Oct–Dec 2021 Jul–Sep 2021 Apr–Jun 2021 Jan–Mar 2021
Net sales 823.6 224.0 207.0 208.6 184.0 812.6 226.3 193.8 210.4 182.0
Net sales growth, % 1.4 -1.0 6.8 -0.8 1.1 -13.4 -1.2 -14.5 -14.3 -23.1
Operative EBITA -1.9 -4.0 4.1 0.5 -2.4 14.8 7.0 4.1 4.4 -0.7
Operative EBITA margin, % -0.2 -1.8 2.0 0.2 -1.3 1.8 3.1 2.1 2.1 -0.4
Operative EBITA, segments 9.9 -1.8 6.6 4.4 0.7 24.2 7.3 7.7 6.8 2.4
Operative EBITA margin, %, segments 1.4 -0.9 3.6 2.4 0.4 3.3 3.6 4.4 3.6 1.5
Items affecting comparability -0.1 -0.1
EBITDA 27.8 3.3 11.5 7.9 5.1 46.5 14.5 11.9 12.7 7.5
Operating result (EBIT) -2.0 -4.0 4.1 0.4 -2.5 14.5 6.9 4.0 4.3 -0.8
EBIT margin, % -0.2 -1.8 2.0 0.2 -1.4 1.8 3.1 2.1 2.0 -0.4
Result after financial items -11.4 -7.9 2.0 -1.2 -4.3 8.7 5.2 2.6 3.0 -2.1
Net result for the period -14.9 -7.7 -0.3 -2.6 -4.4 4.9 4.1 1.8 1.6 -2.7
Earnings per share EUR, basic -0.10 -0.05 -0.00 -0.02 -0.03 0.03 0.02 0.01 0.01 -0.02
Earnings per share EUR, diluted -0.10 -0.05 -0.00 -0.02 -0.03 0.03 0.02 0.01 0.01 -0.02
Return on equity (ROE), %
1)
-6.8 -6.8 -1.4 -0.5 1.4 2.2 2.2 -2.8 -2.2 3.5
Return on operative capital employed
(ROCE), %
1)
-3.5 -3.5 10.2 13.5 17.4 23.6 23.6 11.6 16.8 13.5
Leverage ratio
1)
4.5 4.5 4.3 3.3 3.1 2.6 2.6 3.9 3.3 2.3
Net working capital -21.0 -21.0 26.3 -12.1 -6.7 -16.0 -16.0 9.8 -7.1 -4.8
Number of personnel, average 5,053 5,079 5,053 5,050 5,031 5,176 5,065 5,049 5,221 5,368
1)
Calculated on a rolling 12-month basis.
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Eltel Annual Report 2022 98
Quarterly segment information
EUR million Full-year 2022 Oct–Dec 2022 Jul–Sep 2022 Apr–Jun 2022 Jan–Mar 2022 Full-year 2021 Oct–Dec 2021 Jul–Sep 2021 Apr–Jun 2021 Jan–Mar 2021
NET SALES
Finland 290.1 80.3 79.1 71.9 58.8 299.6 81.2 77.9 79.8 60.8
Sweden 193.8 56.5 44.0 49.4 43.9 182.2 56.3 40.2 44.6 41.1
Norway 176.8 44.3 44.3 46.6 41.6 160.5 46.2 38.2 42.1 33.9
Denmark 74.3 20.9 17.8 17.5 18.1 87.9 19.3 17.8 24.6 26.2
Sum segments 735.0 202.0 185.1 185.5 162.4 730.1 203.0 174.1 191.1 162.0
Other business 99.4 25.6 24.6 25.7 23.5 91.9 26.9 22.0 21.6 21.4
Eliminations between segments -10.8 -3.6 -2.7 -2.6 -1.9 -9.5 -3.5 -2.3 -2.3 -1.4
Net sales, total 823.6 224.0 207.0 208.6 184.0 812.6 226.3 193.8 210.4 182.0
OPERATIVE EBITA
Finland 8.2 -1.2 4.9 3.6 0.9 12.7 4.0 4.8 3.1 0.7
% of net sales 2.8% -1.5% 6.2% 5.0% 1.6% 4.2% 5.0% 6.2% 3.9% 1.1%
Sweden -1.0 1.2 0.0 -0.4 -1.8 -1.8 0.8 -0.2 -1.6 -0.8
% of net sales -0.5% 2.2% 0.0% -0.9% -4.1% -1.0% 1.4% -0.5% -3.6% -2.0%
Norway 2.1 -2.2 1.6 1.3 1.4 9.2 2.4 2.9 2.7 1.2
% of net sales 1.2% -5.0% 3.7% 2.8% 3.4% 5.7% 5.1% 7.6% 6.4% 3.6%
Denmark 0.6 0.4 0.1 0.0 0.2 4.2 0.1 0.2 2.6 1.3
% of net sales 0.9% 1.9% 0.7% -0.3% 0.9% 4.8% 0.6% 1.0% 10.5% 5.1%
Sum segments 9.9 -1.8 6.6 4.4 0.7 24.2 7.3 7.7 6.8 2.4
% of net sales 1.4% -0.9% 3.6% 2.4% 0.4% 3.3% 3.6% 4.4% 3.6% 1.5%
Other business -4.0 0.2 -1.8 -1.9 -0.6 -1.8 1.7 -2.2 -0.5 -0.9
% of net sales -4.0% 0.9% -7.1% -7.5% -2.4% -2.0% 6.4% -9.9% -2.3% -4.2%
Group functions -7.8 -2.4 -0.8 -2.0 -2.6 -7.6 -2.0 -1.5 -1.9 -2.2
Operative EBITA -1.9 -4.0 4.1 0.5 -2.4 14.8 7.0 4.1 4.4 -0.7
% of net sales -0.2% -1.8% 2.0% 0.2% -1.3% 1.8% 3.1% 2.1% 2.1% -0.4%
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Eltel Annual Report 2022 99
Denitions and key ratios
Eltel applies ESMAs (European Securities and Markets Authority) guidelines for alternative performance measures
(APM). In addition to the nancial measures dened in IFRS, certain key gures, which qualify as alternative performan-
ce measures (APMs) are presented to reect the underlying business performance, facilitate analysis of the Group’s
development as followed by Group Management and enhance comparability from period to period. The denition 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 considered as a substitute for measures in
accordance with IFRS.
IFRS Key ratios
Alternative performance measures (APMs)
Operative EBITA and -margin, % are used to measure business and segment protability.
Income statement items below operative EBITA are not allocated to segments.
Items affecting comparability are items for specic events which management does
not consider to form part of the ongoing operative business, typically gain/loss of
acquisition and divestment of businesses.
EBITDA is operating result (EBIT) before depreciations and amortisations. Used in
calculating the leverage ratio.
Operative EBITA: Operating result before acquisition-related amortisations and
items affecting comparability
Operative EBITA margin, %:
Operative
EBITA
Items affecting
comparability
EBITDA
Operating result
(EBIT)
EBIT margin, %:
Operative EBITA and -margin, % for segments represent the sum of segments:
Finland, Sweden, Norway and Denmark.
Operating result (EBIT) and -margin, % are used to measure protability before
interest and taxes.
Operative EBITA x 100
Net sales
EBIT x 100
Net sales
Net result attributable to equity holders of the parent
Weighted average number of ordinary shares
Earnings per
share (EPS)
KEY FIGURE
Note 3: segment results
Note 3: segment results
Five-year summary: Cash
ow from operating activities
Income statement
KEY FIGURE REFERENCEDEFINITION AND REASON FOR USE
Operative capital employed is the amount of net operating assets the business uses
in its operations.
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.
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
dened as covenant in Eltel’s nancing agreement.
Committed order backlog is the total value of committed orders received but not
yet recognised as sales. It is the (best) measure of unsatised performance obliga-
tions according to IFRS 15 Revenue from contracts with customer.
1) Calculated on a rolling 12 months basis
Return on operative capital employed (ROCE), % represents how effectively total net
operating assets are used in order to generate return in the operating business.
Net debt: Interest-bearing debt - cash and cash equivalents
Operative EBITA: Net working capital + Intangible assets excluding goodwill and
acquisition-related allocations + Property, plant and equipment
and Right-of-use assets
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.
Return on equity (ROE), % represents the rate of return that shareholders receive on
their investments.
Return on
equity (ROE), %
Operative
capital
employed
Net working
capital
Net debt and
leverage ratio
Committed
order backlog
Income statement and
balance sheet
Note 3: Net working
capital and operative
capital employed
Note 3: Net working
capital and operative
capital employed
Net debt: Note 14.4
EBITDA: ve-year summary,
cash ow from operating
activities
Note 4: Committed order
backlog by business and
service type
Return on equity (ROE), %
1)
:
Return on operative capital
employed (ROCE), %
1)
:
Net result x 100
Total equity (average over the reporting period)
EBITA x 100
Operative capital employed
(average over the reporting period)
Leverage ratio
1)
:
Net debt
EBITDA
KEY FIGURE REFERENCEDEFINITION AND REASON FOR USE
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 100
Financial calendar 2023–2024
Annual General Meeting 2023 11 May 2023
Interim report January–March 2023 4 May 2023
Half-year report 2023 27 July 2023
Interim report January–September 2023 2 November 2023
Full-year report 2023 February 2024
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: ©Herzog & de Meuron - Vilhelm Lauritzen Arkitekter (p.20).
Photo: Thomas Carlgren (p. 51–52). All other images Eltel.
Printing: Elanders Sverige AB 2023.
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Eltel Annual Report 2022 101
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