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
Denitions and key ratios 100
Contact information and nancial calendar 101
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The year in brief
2022 Highlights
New strategy laying the foundation for sustainable
and protable 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 ination 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 ination 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.
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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%
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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 electrication 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 efciency and sustainable protable 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.
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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 rene 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
protability, 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 signicantly increased
thevalue of contracts signed during the year.
What have been the main challenges
facing Eltel in 2022?
As with all businesses, ination 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 signicant 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 sufciently 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
signicant potential to capitalise on global trends to deliver the
next wave of electrication and digitalisation. This is important
as we expect to have opportunities to increase our prices and
recover our prot 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 reects on
a challenging year as
the company strives
toward sustainable
and protable growth.
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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.
Thenew function will enable us to draw on our existing
expertise and nd synergies within our business.
How have you rened 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 ‘electrication
2.0’ and digitalisation. I feel this is where we have an important
role in transforming society to become more sustainable and
efcient, 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.
Thereare 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. Thetop 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 signicant growth
opportunities. We experienced a difcult year in Poland as the
war in Ukraine reduced the availability of subcontractors, and
also due to particularly high ination. 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
bythe 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 ination 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 satised customers
deliver protability.
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
insociety 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 difcult 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.
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How to win:
New business models, by value chain expansion
and as-a-service thinking, including operational
management, proactive monitoring, etc.
Efciency 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
protable 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 protable growth, leaving the time of
poor protability 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 prot 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
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.
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 electrication, 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-efcient solutions
• Growing need for electric vehicle charging
• Major national smart meter rollouts and other
energy-efcient 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.
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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 signicant 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
Ination, 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
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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 inow 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.
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Power
Our power services enable the electrication 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.
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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
ofces 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
ofemergency.
Developments in 2022
In 2022, Eltel Finland had challenges in protability due to
Power Services. Protability 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 signicant 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 efciency
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 signicant 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
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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 signicant 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 protability, 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
Trakverket (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 benets
“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 efciency 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 signicantly impacted Eltel Norway’s
nancial results in 2022. Increased costs driven by higher
ination, 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 signicant increased
demand in the B2B market for e-Mobility infrastructure.
Eltelhad signed agreements with many of the large players
inNorway, 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 densication 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 signicant 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
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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 dened structure to better serve
newand 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 ination and
slower than expected ramp up on won contracts. The CU is
working towards protable 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 signicant 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
ofusingdiesel.
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 efcient and hybrid engines, and installing
vehicle charging stations at Eltel’s ofces.
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 signicantly 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 signicant 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 liqueed natural gas. Protability
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,
aSmart 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 certication.
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 dened 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
customersolutions
• 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.
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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 rened 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
identied 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 dened 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
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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 signicant 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 efcient 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-classied 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
ofce 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%
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Eltel’s journey to signicantly reduce
its climate impact by 2030
With a long-term ambition to achieve net zero
by 2050, Eltel had its science-based climate
targets veried by a third-party in 2022.
“Eltel has embarked on a journey to signicantly 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 veried climate targets
At the end of 2022, Eltel’s three climate targets were veried
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 ofce 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.
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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.
Newcollaborations 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
identied 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
conrm 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 signicant 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)
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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 certication –
including ISO 9001, ISO 14001 and ISO 45001. If they do not
hold such certication, 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 identied, an action plan
was implemented to ensure that the subcontractor in question
met our standards.
Supply chain risks
Eltel takes responsibility for its supply chain as it poses both
nancial and legal risks to the company. Eltel categorises
subcontractors and suppliers according to their level of risk
exposure. Partners rated as the highest risk, category A, are
integrated into Eltel’s procedures for reporting HSE incidents
and monthly working hours.
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
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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 conicts 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.
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Eltel Annual Report 2022 • 32
EU Taxonomy
The EU Taxonomy is the EU’s common classication system for
economicactivities that have the most signicant impact on the
EU’s environmentalobjectives:
1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity and ecosystems
To date, taxonomy reporting is targeted at the rst two environmental
objectives: climate change mitigation and adaptation. The taxonomy
classication 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 specied 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 specied 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 signicant 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 fullment 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 signicant 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
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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 identied 34.0% (31.9) of its net sales to be taxonomy-eligible
regarding the economic activities dened in the taxonomy’s environmental
objective: climate change mitigation. Eltel also identied 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
conguration of equipment related to the digitalisation of railway signalling.
Finland and Poland also conduct operations included in this activity.
Eltel has also identied 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 efciency 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 identied 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 identied 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 denition 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 specic
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 dened in EU Taxonomy is signicantly 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 sufcient 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).
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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.
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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
beescalated.
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
Eltel and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
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,
ifno 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 Company’s Board of Directors and auditors and deciding on
their remuneration
• Other matters as stipulated in the Swedish Companies’ Act, the Articles
of Association or the Code, as applicable.
All General Meetings are convened by notice in the Swedish 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.
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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,
aswell 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)
:
• Håkan 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.
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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
1998–2008.
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 2010–2017,
Musti ja Mirri 2014–2017,
Evidensia 2014–2017,
Itslearning 2013–2017.
Member of the Board of
Gambro, 2010–2013. CEO
(interim) at Gambro 2011.
CEO at Capio 2005–2006
and Mölnlycke Health Care
2004–2005.
Shareholding:
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
1985–2008.
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 2000−2003.
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: –
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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, 1999–2011.
Project Manager/Project
Developer, Eurowind AB,
1997–1999.
Shareholding: –
HÅKAN 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
2010–2012. 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,
2010–2012. 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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Consolidated
financial statements
Eltel Annual Report 2022 • 53
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Consolidated income statement Consolidated statement of comprehensive income
EUR million | Note | 2022 | 2021 |
Net sales | |||
Cost of sales | 7 | - | - |
Gross profit | |||
Other income | 7,8 | ||
Selling and administrative expenses | 7 | - | - |
Other expenses | 7,9 | - | - |
Operating result (EBIT) | - | ||
Financial income | |||
Financial expenses | - | - | |
Net financial expenses | 11 | - | - |
Result before taxes | - | ||
Taxes | 12 | - | - |
Net result | - | ||
| Attributable to: | |||
Equity holders of the parent | - | ||
Non-controlling interest | 26 | ||
Earnings per share (EPS) | 13 | ||
Basic, EUR | - | ||
Diluted, EUR | - |
EUR million | Note | 2022 | 2021 |
Net result for the year | - | ||
| Other comprehensive income: | |||
| Items that will not be reclassified to profit and loss | |||
Revaluation of defined benefit plans, net of tax | |||
| Items that may be subsequently reclassified to profit and loss | |||
Net investment hedges, net of tax | - | ||
Currency translation differences | - | ||
Total | - | ||
Other comprehensive income/loss for the year, net of tax | - | ||
Total comprehensive income/loss for the year | - | ||
| Total comprehensive loss attributable to: | |||
Equity holders of the parent | - | ||
Non-controlling interest | 26 |
Eltel Annual Report 2022 • 54
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Consolidated balance sheet
EUR million | Note | 31 Dec 2022 | 31 Dec 2021 |
| ASSETS | |||
| Non-current assets | |||
Goodwill | 27 | ||
Intangible assets | 27 | ||
Property, plant and equipment | 28 | ||
Right-of-use assets | 29 | ||
Deferred tax assets | 24 | ||
Financial assets | 20,31 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | 21 | ||
Trade and other receivables | 4,17,20 | ||
Cash and cash equivalents | |||
Total current assets | |||
TOTAL ASSETS |
EUR million | Note | 31 Dec 2022 | 31 Dec 2021 |
| EQUITY AND LIABILITIES | |||
Equity | 15 | ||
Share capital | |||
Other equity | |||
Equity attributable to shareholders of the parent | |||
Non-controlling interest | 26 | ||
Total equity | |||
| Non-current liabilities | |||
Interest-bearing debt | 16,17 | ||
Leasing liabilities | 16,17,29 | ||
Retirement benefit obligations | 31 | ||
Deferred tax liabilities | 24 | ||
Provisions | 22 | ||
Other non-current liabilities | |||
Total non-current liabilities | |||
| Current liabilities | |||
Interest-bearing debt | 16,17 | ||
Leasing liabilities | 16,17,29 | ||
Provisions | 22 | ||
Advances received | 4 | ||
Trade and other payables | 17,23 | ||
Total current liabilities | |||
Total liabilities | |||
TOTAL EQUITY AND LIABILITIES |
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| Consolidated statement of cash flow | |||
EUR million | Note | 2022 | 2021 |
| Cash flow from operating activities | |||
Operating result (EBIT) | - | ||
| Adjustments: | |||
Depreciation and amortisation | |||
Gain/loss on sales of assets and business | - | - | |
Defined benefit pension plans | - | - | |
Other non-cash adjustments | - | - | |
Cash flow from operations before interests, taxes and changes in working capital | |||
Interests received | |||
Interest and other financial expenses paid | - | - | |
Income taxes received/paid | - | - | |
Cash flow from operations before changes in working capital | |||
| Changes in working capital: | |||
Trade and other receivables | |||
Trade and other payables | - | ||
Inventories | - | - | |
Changes in working capital | - | ||
Net cash from operating activities | |||
EUR million | Note | 2022 | 2021 |
| Cash flow from investing activities | |||
Purchases of property, plant and equipment (PPE) | - | - | |
Proceeds from sale of property, plant and equipment ( PPE) | |||
Divestments of business, net of cash disposed of | 25 | - | |
Net cash from investing activities | - | - | |
| Cash flow from financing activities | |||
Proceeds from issuance of share capital | |||
Acquisition of own shares | - | ||
Proceeds from long-term financial liabilities | 16 | ||
Proceeds from short-term financial liabilities | 16 | ||
Payments of short-term financial liabilities | 16 | - | - |
Payments of financial liabilities, term loans | 16 | - | - |
Proceeds from other financial assets | |||
Payments of liabilities to shareholders | - | ||
Payments of lease liabilities | 16 | - | - |
Dividends to non-controlling interest | - | - | |
Change in non-liquid financial assets | |||
Net cash from financing activities | - | ||
Net change in cash and cash equivalents | |||
Cash and cash equivalents at beginning of the year | |||
Foreign exchange rate effect | |||
Cash and cash equivalents at end of the year |
Eltel Annual Report 2022 • 56
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| Consolidated statement of changes in equity | |||||||||
| Equity attributable to shareholders of the parent | |||||||||
| Revaluation of | Hedging | Non- | |||||||
| Other paid-in | Accu mulated | defined benefit | reserve, | Currency | controlling | Total | |||
EUR million | Share capital | capital | losses | plans, net of tax | net of tax | translation | Total | interest | equity |
1 Jan 2022 | - | - | - | ||||||
Total comprehensive income for the year | - | - | - | - | |||||
Transactions with owners 1) : | |||||||||
Share capital reduction | - | ||||||||
Proceeds from shares issued | |||||||||
Purchase of own shares | - | - | - | ||||||
Equity-settled share-based payment | |||||||||
Dividends paid to non-controlling interests | - | - | |||||||
Total transaction with owners | - | - | - | ||||||
31 Dec 2022 | - | - | - | ||||||
| 1) | For more information about equity-settled share-based payments see note 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 | Hedging | Non- | |||||||
| Other paid-in | Accu mulated | defined benefit | reserve, | Currency | controlling | Total | |||
EUR million | Share capital | capital | losses | plans, net of tax | net of tax | translation | Total | interest | equity |
1 Jan 2021 | - | - | - | ||||||
Total comprehensive income for the year | |||||||||
Transactions with owners 1) : | |||||||||
Equity-settled share-based payment | |||||||||
Dividends paid to non-controlling interests | - | - | |||||||
Total transaction with owners | - | - | |||||||
31 Dec 2021 | - | - | - | ||||||
| 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. | ||||||||
| Eltel Annual Report 2022 • 57 | |||||||||
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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
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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
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Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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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
Basis of preparation Financial performance Financial risk management and capital structure Working capital and deferred taxes Business combinations and capital expenditure Remuneration and other
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Eltel Annual Report 2022 • 79
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
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
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
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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
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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
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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 certies that the annual nancial report has been
prepared in accordance with generally accepted accounting principles and
that the consolidated accounts have been prepared in accordance with
the international set of accounting standards referred to in Regulation (EC)
No 1606/2002 of the European Parliament and of the Council of 19 July
2002 on the application of international accounting standards; and give a
true and fair view of the position and prot or loss of the Company and the
Group; and that the management report for the Company and for the Group
gives a fair overview of the development and performance of the business,
position and prot or loss of the Company and the Group; and describes the
principal risks and uncertainties that the Company and the companies in the
Groupface.
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
thisdocument.
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 fullled 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 sufcient and appropriate to
provide a basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our professional judgment, were
of most signicance in our audit of the annual accounts and consolidated accounts of the
current period. These matters were addressed in the context of our audit of, and in forming
our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do
not provide a separate opinion on these matters.
Description of key audit matter
In its consolidated accounts, Eltel applies the standard IFRS 15 Revenue from Contracts
with Customers for its revenue recognition. This means that performance obligations
relevant to the projects Eltel carries out on behalf of its customers are normally fullled over
time. It also means that revenues are being recognized over time (successively), where pro-
gress is measured in relation to the complete fulllment of Eltel’s performance obligations.
The projects’ results (“prot calculation”) are therefore also reported successively,
in relation to the degree/percentage of completion of each project. The percentage of
completion depends on the actual project costs associated with the total projected
costs. The latter may change during the life cycle of the projects, which in turn may have
a signicant impact on the projects’ reported revenues and results. Unforeseeable costs
may also need to be included in the assessments in order to take project risks or disputed
claims into account. These items are regularly assessed by the Group and adjusted if
necessary. Expected losses are fully recognized as expenses as soon as they are known.
Revenues from project alterations and additional work are recognized on the basis of
what is judged to be received. Based on the above, there is, in total, a large element of
assessments on the part of Eltel in this area, which in turn affects the reporting of revenues
and results.
Response in the audit
We have obtained information about and evaluated management’s process for reviewing
projects, including the procedures they use for identifying and reporting loss-making and/
or high-risk projects. Project managers and project controllers within Eltel have also been
involved in this work.
In addition, we have tested whether Eltel’s more important project-related controls have
been effective throughout the year, such as approvals of contracts and time reporting,
ongoing follow-up and reporting of project costs, and protability. We have also evaluated
controls related to costs for subcontractors and other purchases. Furthermore, we have
performed sample testing; for example, we have examined whether costs allocated to
the projects correspond to data/documentation, and whether both the cost and revenue
recognition is true and fair.
We have also assessed whether risks and opportunities in projects are reected in a
balanced way in the project forecasts.
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 specic 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 reect
market-based assessments of the time value of money and the particular risks that the
business faces.
The carrying value of shares in Group companies in the parent company as at 31
December 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 cashow forecasts, as well as the discount
rate used, through an evaluation of the Group’s internal written documentation and fore-
casts. We have also interviewed management and evaluated previous years’ assessments
in relation to actual outcomes.
Another important part of our work has been to review the Group’s sensitivity analysis of
its own assessments to evaluate how reasonable changes in the assumptions may impact
the valuations.
Furthermore, we have considered the completeness of the 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 prot 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 identied 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 inuence 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 sufcient and
appropriate to provide a basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the over-
ride of internalcontrol.
• 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 internalcontrol.
• 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 signicant doubt on the company’s and the group’s ability to continue as
a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the annual accounts
and consolidated accounts or, if such disclosures are inadequate, to modify our opinion
about the annual accounts and consolidated accounts. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause a company and a group to cease to continue as a
goingconcern.
• 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 signicant audit ndings during our audit,
including any signicant deciencies in internal control that we identied.
We must also provide the Board of Directors with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, measures that have been taken to eliminate the
threats or related safeguards.
From the matters communicated with the Board of Directors, we determine those mat-
ters that were of most signicance in the audit of the annual accounts and consolidated
accounts, including the most important assessed risks for material misstatement, and are
therefore the key audit matters. We describe these matters in the auditor’s report unless
law or regulation precludes disclosure about the matter.
Report on other legal and regulatory requirements
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 prot or loss.
We recommend to the general meeting of shareholders that the prot 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 sufcient and appropriate to
provide a basis for our opinions.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors is responsible for the proposal for appropriations of the company’s
prot or loss. At the proposal of a dividend, this includes an assessment of whether the
dividend is justiable considering the 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 fulll 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 prot
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 prot 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 prot or loss is based primarily on the audit of the accounts. Additional audit
procedures performed are based on our professional judgment with starting point in risk
and materiality. This means that we focus the examination on such actions, areas and 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 prot or loss we examined whether
the proposal is in accordance with the Companies Act.
The auditor’s examination of the Esef report
Opinion
In addition to our audit of the annual accounts and consolidated accounts, we have also
examined that the Board of Directors and the Managing Director have prepared the annual
accounts and consolidated accounts in a format that enables uniform electronic reporting
(the Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish Securities Market Act
(2007:528) for Eltel AB (publ) for year 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
fullled our ethical responsibilities in accordance with these requirements.
We believe that the evidence we have obtained is sufcient and appropriate to provide a
basis for our opinion.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the preparation of
the Esef report in accordance with the Chapter 16, Section 4(a) of the Swedish Securities
Market Act (2007:528), and for such internal control that the Board of Directors and the
Managing Director determine is necessary to prepare the Esef report without material 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 inuence the economic decisions of users taken on the
basis of the Esef report.
The audit rm applies ISQC 1 Quality Control for Firms that Perform Audits and Reviews
of Financial Statements, and other Assurance and Related Services Engagements and
accordingly maintains a 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 prot 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
Denitions and key ratios
Eltel applies ESMA’s (European Securities and Markets Authority) guidelines for alternative performance measures
(APM). In addition to the nancial measures dened in IFRS, certain key gures, which qualify as alternative performan-
ce measures (APMs) are presented to reect the underlying business performance, facilitate analysis of the Group’s
development as followed by Group Management and enhance comparability from period to period. The denition of
these key gures is presented below and relevant information enabling reconciliations to IFRS measures can be found
in connection with relevant parts of the report. These APMs should not be 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 protability.
Income statement items below operative EBITA are not allocated to segments.
Items affecting comparability are items for specic events which management does
not consider to form part of the ongoing operative business, typically gain/loss of
acquisition and divestment of businesses.
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 protability 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
dened 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 unsatised 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 and the world around us Our operations Sustainability Board of Directors’ report Corporate Governance report Financial reports Other information
Eltel Annual Report 2022 • 101
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