Eltel Ab · OMXSTO:ELTEL

Eltel Ab — Investor Presentation (March 2018)

20 slides from Eltel Ab's investor presentation, March 2018

  1. Slide 1: Eltel AB Investor presentation

    Eltel AB Investor presentation March 2018 © Eltel - Shaping Future Infranets 1

  2. Slide 2: Eltel in brief

    Eltel in brief Core operations in Nordics, Poland and Germany Market leader in Nordics and Poland Net sales EUR 1.3 billion 8,000 employees Industry with long term structural growth Solid customer base and recurring revenues Listed on Nasdaq Stockholm © Eltel - Shaping Future Infranets 2

  3. Slide 3: Focus on core business

    Focus on core business Core 90% of sales1 Power and Communication The Nordics, Poland and Germany Grow in line with market, capitalise on trends, improve operational processes, make selective acquisitions, increase efficiency 1) 2017 sales from core businesses © Eltel - Shaping Future Infranets 3

  4. Slide 4: Eltel's core business

    Eltel’s core business – driven by stable customers with long term investment needs Core business Drivers Power  Regulatory demands  Outsourcing  Ageing infrastructure  Increasing end-customer demands Communication  Technical shift © Eltel - Shaping Future Infranets 4

  5. Slide 5: Exit or discontinue non-core businesses

    Exit or discontinue non-core businesses … and implement new governance model for projects  Rail business Divest  Power Distribution Baltics  Parts of Aviation & Security Sweden  Communication UK Discontinue  Power Transmission outside Europe © Eltel - Shaping Future Infranets 5

  6. Slide 6: Eltel AB Q4 2017 Presentation

    Eltel AB Q4 2017 Presentation 22 February 2018 © Eltel - Shaping Future Infranets 6

  7. Slide 7: Core business: Highlights

    Core business: Highlights  Stable progress despite high rate of change in order to create stability  Net sales in line with previous year  Segment Communication maintained stable progress despite divestment of operations - but marginally lower profitability  Segment Power net sales down somewhat

  8. Slide 8: Core business: Q4 sales

    Core business: Q4 sales  Sales -3.0% to EUR 338.5 million  Adjusted* net sales increased by 1.9% Total Core  Net sales was down in Power  Stable performance for Communication  Sales -7.4 % to EUR 130.7 million  Latvia and Estonia not included in sales Power  Volumes in Build and old High Volt

  9. Slide 9: Core business: Q4 operative EBITA

    Core business: Q4 operative EBITA  EBITA -26.7 % to EUR 11.9 million Total Core  EBITA margin 3.5%  EBITA decreased to EUR -0.5 million  Write-offs of old unprofitable High Power Voltage and Services projects  Strong profitability for Smart Grids  EBITA -7.7 % to EUR 12.4 million Communication

  10. Slide 10: Other: Q4 sales and EBITA

    Other: Q4 sales and EBITA  Sales -9.5% to EUR 35.3 million  Ramp down of Power Transmission Sales International  Closure of old low margin projects and lower sales in Rail  EBITA EUR -5.3 million (-25.3 )  EUR +1.2 million refers to Power Operative EBITA Transmission International  EUR -7.0 mi

  11. Slide 11: Total Group: 12-months

    Total Group: 12-months  Sales -5.0% to EUR 1,329.9 million Total Group  Operative EBITA EUR -25.5 million (2.1)  Sales -3.4 % to EUR 470.4 million Power  EBITA EUR -0.3 million (15.1)  Sales +1.8% to EUR 731.2 million Communication  EBITA EUR 34.6 million (36.6)  Sales -34.2% to EUR 129.4 mil

  12. Slide 12: Transformation strategy – important events

    Transformation strategy – important events Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 – Jan 2018 • Decision to focus on • Merger of part of Aviation • Agreement to divest Q4 Eltel’s Core business; and Security with operations in Latvia • Agreement to divest rail segment Power and Segment Communication • Ag

  13. Slide 13: Country-based organisation

    Country – based organisation  Change of the governance structure of the Core business  From unit-centric organisation to…  Country and market-driven organisation  Part of the transformation strategy initiated in February 2017  Each country where Eltel has operations forms a separate business un

  14. Slide 14: Development in Eltel's Core business in relation to financial targets

    Development in Eltel’s Core business in relation to financial targets Medium to long – term target Rolling 12 months Annual growth of 2-4%, including Growth selective acquisitions -0.3% EBITA-margin EBITA-margin of at least 5% 2.9% Cash conversion Cash conversion of 95-100% of EBITA -96.0% of EBITA

  15. Slide 15: Clear transformation agenda for Eltel

    Clear transformation agenda for Eltel  Develop Core businesses within Power and Communication in the Nordics, Poland and Germany  Sell or discontinue non-core businesses  Organizational transformation to improve efficiencies  Continue to strengthen overall governance and control ….leading in to

  16. Slide 16: Appendices

    © Eltel - Shaping Future Infranets Appendices March 2018 16

  17. Slide 17: Our services – in three business segments

    Our services – in three business segments Power Communication Other FY 2017 35% 55% 10% Net Sales MEUR 470 MEUR 731 MEUR 129 (MEUR 1,329) Geographical Nordics, Poland, Germany Nordics, Poland, Germany Power Transmission markets International, Rail in the Nordics, Aviation & Security Service Design,

  18. Slide 18: Our core markets with a foreseen market growth of almost 8%

    Our core markets with a foreseen market growth of almost 8% Sales split Q4 2017 Core markets of Eltel CAGR 2020f Market +8.0% size (2017E): EUR 8.9bn New Eltel core markets Core business Business for divestment Markets already or to be exited Source: Company information, management estimated 18

  19. Slide 19: Market size and outlook

    Market size and outlook Power +8% Stable markets ● Investments by both TSOs and DSOs expected to BNEUR 4,8 3,7 increase ● Network modernisation and robustness together with smart metering important market drivers 2017 2020 Growth ● Significant investment in transmission network BNEUR platform driven

  20. Slide 20: Market size and outlook

    Market size and outlook Communication Stable markets ● Strong growth in data traffic within both fixed and BNEUR 0% mobile communication 2,3 2,3 ● Stable markets with tough competition between telecom operator which puts some price pressure on technical Infranet services 2017 2020 Growth ● Telecom o

Eltel — Investor Presentation (March 2018) on 6ix