Eltel Group: Interim report January–March 2023

January–March 2023

  • Net sales EUR 188.4 million (184.0). Total growth 2.4% and organic growth1) in segments 7.2%
  • Adjusted EBITDA EUR 2.4 million (5.1)
  • Adjusted EBITA2) EUR -5.5 million (-2.4) and adjusted EBITA margin -2.9% (-1.3)
  • Adjusted EBITA2) in segments EUR -2.1 million (0.7) and adjusted EBITA margin in segments -1.2% (0.4)
  • Items affecting comparability EUR -6.1 million (0.0)
  • Operating result (EBIT) EUR -11.6 million (-2.5) and EBIT margin -6.2% (-1.4)
  • Net result EUR -15.1 million (-4.4)
  • Earnings per share EUR -0.10 (-0.03), basic and diluted
  • Cash flow from operating activities EUR -23.7 million (-8.8)
  • Net debt EUR 158.4 million (135.8)

Significant events during and after the reporting period

  • During the first quarter, Eltel signed contracts with a combined value of about EUR 244 million (115). Read more on page 13.
  • Eltel completed a cost savings program that resulted in a EUR 6.1 million restructuring charge (items affecting comparability).
  • On 13 March, Pamela Lundin joined Eltel as Director of Business Development and member of the Group Management Team.
  • On 24 March, it was announced that Eltel has established a Sustainability-Linked Finance Framework designed to support the future issuance of sustainability-linked securities.
  • After the reporting period, on 6 April, Eltel issued subordinated sustainability-linked hybrid capital securities in the aggregate principal amount of EUR 25 million.
  • On 13 April, it was announced that Eltel Norway signed a one-year prolongation to its agreement with Telenor for about EUR 70–90 million.
  • On 3 May, it was announced that Eltel and the Finnish energy company Helen have signed an agreement for the delivery of a large-scale solar park in Lohja, Finland, worth about EUR 3.1 million.

Key figures

EUR million

Jan-Mar 2023

Jan-Mar 2022

Jan-Dec 2022

Net sales




Net sales growth, %




Adjusted EBITDA




Adjusted EBITA2)




Adjusted EBITA margin, %




Adjusted EBITA2), segments




Adjusted EBITA margin, %, segments




Operating result (EBIT)




Return on operative capital employed (ROCE), %




Net working capital




Net debt




Number of employees, average




1) Organic growth is adjusted for currency effects.

2) Eltel follows the profitability of segments with adjusted EBITA, which does not include restructuring costs and other items affecting comparability. Eltel has changed its terminology in Q1 2023 from operative EBITA to adjusted EBITA for the purpose of additional clarity and alignment with market practice. Please see pages 24–25 for definitions of the key ratios.

Comments by the CEO

The year has started strong in terms of organic growth and new contracts signed. Organic growth in the segments was 7.2%, and 2.4% for the Group, which shows that last year’s strong sales activities have been translated into delivered volumes. Additionally, we signed new contracts worth about EUR 244 million, more than double the volume compared to Q1 2022. While this shows our ability to secure new business, we are aware of the uncertainty relating to the future investment levels of telecom operators, which may impact our growth going forward.

As we indicated after the difficult last quarter of 2022, we foresaw the profitability challenges continuing into the first part of 2023. However, even though the difficulties were anticipated, and the fact that the first quarter is usually our weakest, we are still disappointed with our adjusted EBITA margin of -1.2% for the segments and -2.9% for the Group. Denmark and Sweden continued to improve their results and contributed positively, while the weak profitability in Norway and Finland burdened the overall results. We will continue to work on the underlying issues to drive profitability in the upcoming quarters.

Finland generated good growth, but increased costs and certain unfavorable contracts in Power Services affected the results. Sweden delivered very strong growth with a 19.2% increase in net sales in local currency. This marks the sixth consecutive quarter of top-line growth and the third quarter with a positive result for the country unit. In Norway, reduced and delayed volumes resulted in overcapacity and inefficiency. Meanwhile, Denmark had a very strong start to the year with a 20.5% revenue increase and a robust profitability at 6.1% adjusted EBITA margin.

The cost savings program that was initiated in December 2022, with a focus on Norway and Finland, has been implemented during the quarter. The program is estimated to provide savings of EUR 10 million on annual basis and it incurred a restructuring cost of EUR 6.1 million. The program included reducing the workforce by approximately 150 full- time employees, optimizing subcontractor usage, closing selected offices, and reducing the number of vehicles. We expect to see the first effects of the program in the coming months. However, it is worth noting that we have also experienced a general increase in our cost base due to inflation and recent salary increases associated with the reached collective agreements in the Nordic countries.

After the reporting period, we have improved our financial position by issuing a EUR 25 million hybrid bond. The instrument is the first sustainability-linked hybrid bond in the Nordics, which highlights our commitment to integrating sustainability into our financing structure and showcases how sustainability is at the core of our operations.

Recently, we signed a contract in Finland to build our first large-scale solar park. This strategic move marks our expansion into the renewable energy sector and represents a significant milestone for Eltel.

As we navigate in the challenging markets, we remain focused on driving growth, reducing costs, and enhancing our sustainability efforts to ensure long-term and sustainable profitability for our company.

Håkan Dahlström, President & CEO

For further information, please contact:

Saila Miettinen-Lähde, CFO

Phone: +358 40 548 3695, saila.miettinen-lahde@eltelnetworks.com

Elin Otter, Director, Communications and Investor Relations
Phone: +46 72 59 54 692, elin.otter@eltelnetworks.com

This information is information that Eltel AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CEST on 4 May 2023.

About Eltel

Eltel is a leading service provider for critical infrastructure that enables renewable energy and high-performing communication networks. Eltel designs, plans, builds and secures the operation of networks for a more sustainable and connected world today and for future generations. In total, we have about 5,000 employees and in 2022 the annual sales was EUR 823.6 million. The head office is located in Sweden and Eltel's shares have been listed on Nasdaq Stockholm since 2015. Read more at www.eltelnetworks.com.