Eltel Group Interim report January–June 2015
April - June 2015
- Net sales EUR 307.8 million (299.8), up 2.7%. Organic net sales* increased 11.8%
- Operative EBITA** EUR 13.9 million (13.1) or 4.5% of net sales (4.4)
- EBITA EUR 14.0 million (13.6) or 4.5% of net sales (4.5)
- Net financial expenses decreased to EUR 1.8 million (4.2)
- Net result EUR 8.3 million (5.1)
- Earnings per share EUR 0.13 (0.09)
- Operative cash flow** EUR 22.7 million (-2.0)
January - June 2015
- Net sales EUR 546.8 million (558.9), down 2.2%. Organic net sales* increased 7.8%
- Operative EBITA** EUR 19.2 million (17.9) or 3.5% of net sales (3.2)
- Non-recurring items EUR -2.6 million (0.1), IPO-related in 2015
- EBITA EUR 16.7 million (18.0) or 3.0% of net sales (3.2)
- Net financial expenses affected by a non-cash expense of EUR 3.5 million (0.0) related to refinancing
- Net result EUR 0.7 million (1.5)
- Earnings per share EUR 0.01 (-0.02)
- Operative cash flow** EUR -37.2 million (22.5), strongly impacted by IPO-related cash payments
Unless otherwise stated, figures in brackets refer to the same period previous year
* excluding Norwegian Communication business, which is deconsolidated in 2015 and 2015 Edi.Son acquisition
** see definitions on pages 12, 14 and 17
Comments by the CEO − Continued strong growth for Eltel in the second quarter
Our second quarter as a listed company was solid. We won many new orders in attractive businesses, such as smart meters and fibre installations. Our recently acquired Edi.Son in Germany also received an important new order for the construction of transmission lines.
We see daily signs that the growth in our Infranet market is strong. Telecom operators are investing more to support consumer demand for faster and more reliable connections and, in the power business, the need to adapt to changing power supply and refurbish old networks will continue for many years to come. We have also noted a rising interest in electrification in Africa. However, competition remains strong, particularly in project-related businesses. It is important that we continue to deliver customer value and drive internal efficiency to stay competitive.
Despite the strong underlying demand for Eltel’s Infranet services, there are market fluctuations between quarters. For us, as for many Nordic companies with field operations, seasonality brings a gradual increase in sales throughout the calendar year.
In 2015 both the first and the second quarters were stronger in terms of sales compared with the corresponding period in 2014. The growth is attributable to various contracts and countries. Cabling projects in Finland in Power, the strong inflow of fibre projects in fixed communication and several major projects approaching completion in our Norwegian rail business, are contributing to our overall performance. However, several projects that we announced during the quarter, for example the smart metering projects in Norway, will not affect sales until late 2016.
Our results are slightly stronger year-on-year, and now that we are operating without non-recurring costs and with a lighter balance sheet, more profit is generated on the bottom line. We were very pleased to announce that we are buying out our partner from our joint venture Eltel Sønnico in Norway. This is a deal that will make it possible for us to be more efficient in our entire Norwegian operations that are growing in Power, Communication and railway business.
Regarding cash conversion, we are getting back on track and improving although we have not yet reached the 95-100% medium-term target. In general the second quarter was stable and provides support to our efforts to achieve our financial targets.
–Axel Hjärne, CEO
For more information, please contact
Gunilla Wikman, Investor Relations Manager at Eltel AB
Tel: +46 725 843 630, email@example.com
Eltel is a leading European provider of technical services for critical infrastructure networks – Infranets – in the segments of Power, Communication and Transport & Security, with operations throughout the Nordic and Baltic regions, Poland, Germany, the United Kingdom and Africa. Eltel provides a broad and integrated range of services, spanning from maintenance and upgrade services to project deliveries. Eltel has a diverse contract portfolio and a loyal and growing customer base of large network owners. The number of employees is approximately 8,600 and in 2014, Eltel net sales amounted to EUR 1,242 million. Eltel’s share is listed on Nasdaq Stockholm since February 2015.