Eltel Ab · OMXSTO:ELTEL

Eltel Ab — Investor Presentation (June 2017)

25 slides from Eltel Ab's investor presentation, June 2017

Slide 2: Disclaimer
Disclaimer The information in this investor presentation does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in Eltel AB (publ) (“Eltel”). Any invitation to the persons concerned to subscribe for shares in Eltel will onl
Slide 4: Rights issue summary
Rights issue summary Transaction structure ● Rights issue with preferential rights for existing shareholders ● In addition to subscribing with subscription rights (which will be trading on Nasdaq Stockholm during the period June 8–June 20, 2017), existing shareholders and other investors may subscri
Slide 5: Rights issue timetable
Rights issue timetable DATE ACTIVITIES 2 June ● First day of trading in the share without right to participate in the rights issue 5 June ● Record date, registered shareholders will obtain subscription rights to participation in the rights issue 7 June ● Publication of prospectus 8–20 June ● Trading
Slide 7: Recognised risks
Recognised risks High-risk strategy outside core competence  Power Transmission 10% International International has caused extensive losses1 expansion outside  Rail business entry in Norway core competence  Communication in UK Too aggressive  Power Transmission revenue recognition International
Slide 8: New share issue
New share issue Rationale for rights issue EUR 150 million ● Deleverage ● Discontinuation of Power Transmission International ● Development of core business ● Acquisitions Debt Discontinuation Rights issue repayment of PTI, development size of core business, acquisitions © Eltel - Shaping Future Inf
Slide 9: 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) Q1 2017 sales from core businesses © Eltel - Shaping Future Infranets 9
Slide 10: Strong support for new share issue
Strong support for new share issue Strong support from main shareholders Solero Luxco S.á.r.l. (Triton funds) 13.9% ● Eltel’s largest shareholders support the rights issue Zeres Capital 12.9% ● Approx. 52% of Eltel’s share Fourth Swedish National Pension Fund 9.5% capital have undertaken or Swedbank
Slide 12: New Eltel
New Eltel Power and Communication 90% core business2  Nordics, Poland and Germany  High degree of repetitiveness  Long-term customer relationships  Project business to go down from 24% to 18% of net sales1  Increase competitiveness and customer offering 1) FY 2016 2) Q1 2017 sales from core bus
Slide 13: Eltel's core business – stable customers
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 13
Slide 14: Eltel's core business – core competences
Eltel’s core business – built on core competences with solid market position Core business Services split (2016A) Project Power delivery  Maintenance 18% Maintenance 30%  Upgrades  Roll-outs  Projects Upgrades Communication 52% © Eltel - Shaping Future Infranets 14
Slide 15: 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 15
Slide 16: 2017 and 2018 transition period
2017 and 2018 transition period 2019 Profitable 2018 growth Synergies and selective M&A’s 2017 “House in order”  Discontinue businesses  Complete divestments  New business unit organisation in place  Governance and control © Eltel - Shaping Future Infranets 16
Slide 17: Our services – in three business segments
Our services – in three business segments Power Communication Other FY 2016 35% 51% 14% Net Sales MEUR 487 MEUR 719 MEUR 197 (MEUR 1,400) Geographical Nordics, Poland, Germany Nordics, Poland, Germany Power Transmission markets International, Rail in the Nordics, Aviation & Security Service Design,
Slide 18: Solid market potential
Solid market potential Sales split Q1 2017 Core markets of new Eltel Market size (2016): EUR 8.1bn New Eltel core markets Source: Company information, management estimates Markets already or to be exited © Eltel - Shaping Future Infranets 18
Slide 19: Market size and outlook: Power
Market size and outlook Power BNEUR CAGR Stable markets ● Investments by both TSOs and DSOs expected to 7% increase ● Network modernisation and robustness together 4,5 3,4 with smart metering important market drivers 2016 2020 BNEUR Growth ● Significant investment in transmission network platform CA
Slide 20: Market size and outlook: Communication
Market size and outlook Communication BNEUR CAGR Stable markets ● Strong growth in data traffic within both fixed and 0% mobile communication ● Stable markets with tough competition between 2,1 2,1 telecom operator which puts some price pressure on technical Infranet services 2016 2020 BNEUR Growth
Slide 21: New financial targets
New financial targets Financial targets, mid- to long-term (3–5 years)  Annual growth of Eltel’s core business of 2-4%, including Sales growth selective acquisitions EBITA-margin  EBITA-margin of at least 5% Cash conversion  Cash conversion of 95-100% of EBITA Capital structure  Leverage of 1.5-
Slide 23: Financial result in 2016
Financial result in 2016 Income statement Comments EUR million 2015 2016 ● Reported net sales grew by 11.6% to Net sales 1,254.9 1,399.8 MEUR 1,399.8 (1,254.9). This strong Cost of sales -1,089.6 -1,279.5 growth was attributable to the Gross profit 165.3 120.3 Communication segment driven by Other i
Slide 24: Financial result by business area
Financial result by business area Revenue Operative EBITA MEUR MEUR 8.2% 1.0% 11.6% 20.3% 3.6% 4.9% 5.0% 0.1% 1.1% -3.2% 1 400 62 61 1 242 1 255 197 20 24 2 224 241 21 15 487 20 426 463 3 34 37 1 26 2 4 287 298 3 719 -9 -1 -10 604 45 31 -13 560 -1 -4 95 104 -37 -10 148 163 -12 -8 -2 -1 -0 2014 2015

Eltel — Investor Presentation (June 2017) on 6ix

Eltel Ab — Investor Presentation (June 2017)

Slide 1: Eltel AB Investor presentation

Slide 2: Disclaimer

Slide 3: Agenda

Slide 4: Rights issue summary

Slide 5: Rights issue timetable

Slide 6: Background to the rights issue

Slide 7: Recognised risks

Slide 8: New share issue

Slide 9: Focus on core business

Slide 10: Strong support for new share issue

Slide 11: The new Eltel

Slide 12: New Eltel

Slide 13: Eltel's core business – stable customers

Slide 14: Eltel's core business – core competences

Slide 15: Exit or discontinue non-core businesses

Slide 16: 2017 and 2018 transition period

Slide 17: Our services – in three business segments

Slide 18: Solid market potential

Slide 19: Market size and outlook: Power

Slide 20: Market size and outlook: Communication

Slide 21: New financial targets

Slide 22: Financial overview

Slide 23: Financial result in 2016

Slide 24: Financial result by business area

Slide 25: Thank you!