Eltel Ab · OMXSTO:ELTEL
Eltel Ab — Q3 2019 Earnings Presentation
20 slides from Eltel Ab's earnings presentation, November 2019
Slide 1: Eltel AB Investor presentation November 2019
Eltel AB Investor presentation November 2019
Slide 2: Eltel in brief
Eltel in brief Founded in 2001 Northern European market leader Operations throughout the Nordics, Poland and Germany Net sales EUR 1.2 billion, 7,100 employees UN Global Compact signatory since 2014 Listed on Nasdaq Stockholm since 2015 2
Slide 3: Focus on segments
Focus on segments Net sales Q3 2019 Power and Communication 2% 6% 9% The Nordics, Poland and Germany 30% 10% Grow in line with market, capitalise on trends, improve operational processes, make selective acquisitions, increase efficiency 21% 22% Sweden Finland Norway Denmark Poland Germany Other coun
Slide 4: Eltel’s business
Eltel’s business – driven by stable customers with long term investment needs Segments Drivers Power ▪ Regulatory demands ▪ Outsourcing ▪ Ageing infrastructure ▪ Increasing end-customer demands Communication ▪ Technical shift 4
Slide 5: Eltel AB Q3 2019 Presentation
Eltel AB Q3 2019 Presentation 7 November 2019
Slide 6: Q3 2019 highlights
Q3 2019 highlights • Improved operative EBITA margin, rolling 12-months gross margin and operating cash flow • Divested Communication Poland with proceeds of EUR 12 million • Accelerated volume drop in Swedish Communication business and weak back log in Polish High Voltage business – need for restru
Slide 7: Total Group: Q3
Total Group: Q3 ▪ Net sales -4.8% to EUR 281.8 million (295.9) ▪ Organic growth in Power and Communication* -2.9% Total Group ▪ Operative EBITA EUR 4.1 million (0.5) ▪ Operative EBITA margin 1.5% (0.2) ▪ Cash flow from operating activities** EUR -0.1 million (-16.8) *Adjusted for divested operations
Slide 8: Group: Operative EBITA development
Group: Operative EBITA development 5 1% 0 0% -5 -1% -10 -2% -15 -3% -20 -4% -25 -5% Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Operative EBITA, quarterly Operative EBITA margin, rolling 12 months 8
Slide 9: Net sales segments: Q3
Net sales segments: Q3 ▪ Net sales -7.9% to EUR 103.1 million ▪ Lower volumes in Smart Grids ▪ Lower activity and write downs in the Swedish business Power ▪ Slightly lower High Voltage activity in the Nordics ▪ The decrease is partly offset by Finland, due to wind power projects ▪ Organic net sales
Slide 10: Operative EBITA segments: Q3
Operative EBITA segments: Q3 ▪ Operative EBITA EUR -3.6 million (0.2) ▪ Operative EBITA margin -3.5% (0.2) Power ▪ Write downs in High Voltage projects in Poland and Finland ▪ Lower net sales in Smart Grids and lower net sales and write downs in Sweden ▪ Improved performance in Finland and Denmark ▪
Slide 11: Focus in 2019
Focus in 2019 Operational focus ▪ Tender ▪ Right people ▪ Implementation & execution ▪ No. 1 Nordic player ▪ Production planning ▪ High customer satisfaction ▪ Training ▪ Engaged employees ▪ Lower risk and fewer capital Strategic focus intensive projects ▪ Continuous evaluation of the existing portf
Slide 12: Our long-term plan
Our long-term plan >2022 “Investing in sustainable profitable growth” 2019−2021 “Operational excellence” 2017−18 ▪ Continued focus on “House in order” operational excellence ▪ Pursue structural M&As in ▪ Prioritise core operational the Nordics when financial improvements (operational situation impro
Slide 13: Q&A Tampere, Finland
Q&A Tampere, Finland
Slide 14: ELTEL
ELTEL
Slide 15: Appendices
Appendices
Slide 16: Our services – in business segments
Our services – in business segments Power Communication Other 37% 61% 2% Market leading position in Poland Market leader in the Nordic region Includes businesses under ramp and Finland Markets down and discontinuation Markets Nordics, Lithuania, Germany Markets Nordics, Poland, Germany Services Outs
Slide 17: Our core markets with a foreseen market growth of almost 3%
Our core markets with a foreseen market growth of almost 3% Sales split 2018 2% Core markets 6% of Eltel 8% CAGR 30% 2022f Market +3% 9% size (2019E): EUR 11.6bn 22% 23% Sweden Finland Norway Denmark Poland Germany Other countries Source: Company information, management estimates 17
Slide 18: Eltel’s segments
Eltel’s segments – built on core competences with solid market position Services split (2018A) Power Projects incl. roll-outs Maintenance ▪ Maintenance 26% 27% ▪ Upgrades ▪ Projects incl. roll-outs Upgrades 47% Communication 18
Slide 19: Market size and outlook - Power
Market size and outlook - Power Eltel markets ▪ Investments by major grid owners expected to increase ▪ Network modernisation and reliability BNEUR together with transition to smart electricity +3% meters important market drivers 7,2 7,9 ▪ Increased build out of renewable energy production drives si
Slide 20: Market size and outlook - Communication
Market size and outlook - Communication Stable markets ▪ Strong growth in data traffic within both fixed and mobile communication ▪ Stable markets with tough competition BNEUR between telecom operator which puts some price pressure on technical Infranet +2% 4,4 4,6 services ▪ Telecom operators are e