Eltel Ab · OMXSTO:ELTEL

Eltel Ab — Q3 2018 Earnings Presentation

21 slides from Eltel Ab's earnings presentation, November 2018

  1. Slide 1: Eltel AB Investor presentation

    Eltel AB Investor presentation November, 2018 © Eltel - Shaping Future Infranets 1

  2. Slide 2: Today’s presenters

    Today’s presenters Casimir Lindholm Petter Traaholt President and CEO CFO © Eltel - Shaping Future Infranets 2

  3. Slide 3: Eltel in brief

    Eltel in brief Northern European market leader Operations throughout the Nordics, Poland and Germany Industry with long-term structural growth Solid customer base and recurring revenues Net sales EUR 1.3 billion, 7,500 employees Listed on Nasdaq Stockholm since 2015 © Eltel - Shaping Future Infranet

  4. Slide 4: Focus on segments

    Focus on segments Net Sales 2017 5% 6% Power and Communication 7% 31% 7% The Nordics, Poland and Germany 21% Grow in line with market, capitalize on trends, 23% improve operational processes, make selective acquisitions, increase efficiency Sweden Finland Norway Poland Denmark Germany Other © Eltel

  5. Slide 5: 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 © Eltel - Shaping Future Infranets 5

  6. Slide 6: Eltel AB Q3 2018 Presentation

    Eltel AB Q3 2018 Presentation 7 November © Eltel - Shaping Future Infranets 6

  7. Slide 7: Highlights

    Highlights  New CEO as of September 1  New strategy focusing on efficiency improvements  Profitability has gradually improved © Eltel - Shaping Future Infranets 7

  8. Slide 8: Our plan to win

    Our plan to win >2022 “Investing in sustainable profitable growth” 2019-2021 “Operational excellence” 2017-18 “House in order”  Continued focus on operational excellence  Pursue structural M&A’s in  Prioritize core operational Nordics when financial improvements (operational situation improves ex

  9. Slide 9: Summary of Operational Excellence strategy

    Summary of Operational Excellence strategy Customer  Deliver on our customer promise everyday i.e., improve our performance, train our 1 satisfaction and people to solve root causes, to create a strong differentiator and be our customers most SLA precision trusted partner  Right way, right job, ri

  10. Slide 10: Financial targets

    Financial targets Medium to long – term target Annual growth of 2-4%, including Growth selective acquisitions EBITA-margin EBITA-margin of at least 5% Cash conversion Cash conversion of 95-100% of EBITA Capital structure Leverage of 1.5-2.5x net debt/EBITDA © Eltel - Shaping Future Infranets 10

  11. Slide 11: Total Group: Q3

    Total Group: Q3  Net sales -9.8% to EUR 295.9 million  Organic growth in Power and Communication* 1.4% Total Group  Operative EBITA EUR 0.5 million (3.1)  Operative EBITA margin 0.2% (0.9%) *Adjusted for divested operations and currency effects © Eltel - Shaping Future Infranets 11

  12. Slide 12: Group: EBITA margin development

    Group: EBITA margin development 10,0 2,0% 5,0 1,0% 0,0 0,0% -5,0 -1,0% -10,0 -2,0% -15,0 -3,0% -20,0 -4,0% -25,0 -5,0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Operating margin (EBITA) per quarter Operating margin(EBITA) rolling 12 months © Eltel - Shaping Future Infranets 12

  13. Slide 13: Net sales segments: Q3

    Net sales segments: Q3  Net sales -4.7 % to EUR 112.0 million  Divestments of Baltics Power  Ramp down of certain service contracts in Sweden  Organic growth in current operations* 2.4%  Net sales -3.5 % to EUR 180.2 million  Currency rate effects in Sweden Communication  Delayed projects and

  14. Slide 14: Operative EBITA segments: Q3

    Operative EBITA segments: Q3  Operative EBITA EUR 0.2 million (0.9)  Operative EBITA margin, 0.2% (0.7%)  Restructuring and write-downs in High Voltage Power in Norwegian and Swedish projects  Challenges with utilisation and cost in Finnish Service and Build  Operative EBITA EUR 6.8 million (11

  15. Slide 15: Focus coming quarters

    Focus coming quarters  Focus on Operational Excellence  Efficiency improvements  Customer focus  Measuring and tracking relevant KPIs  Simplifying the daily operations for our technicians  Improve competence level  Recruitment © Eltel - Shaping Future Infranets 15

  16. Slide 16: Appendices

    Appendices © Eltel - Shaping Future Infranets 16

  17. Slide 17: Our services – in business segments

    Our services – in 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 Service Design, engineering, Installation /

  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 2017 Core markets of Eltel CAGR 5% 6% 2020f Market +8.0% 7% size (2017E): 31% EUR 8.9bn 7% 21% 23% Sweden Finland Norway Poland Denmark Germany Other Source: Company information, management estimated © Eltel - Shaping Future Inf

  19. Slide 19: Eltel’s segments

    Eltel’s segments – built on core competences with solid market position Services split (2017A) Maintenance Power Projects  Maintenance incl. roll- 21%  Upgrades outs 29%  Projects incl. roll-outs Upgrades Communication 51% © Eltel - Shaping Future Infranets 19

  20. Slide 20: Market size and outlook

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

  21. Slide 21: Market size and outlook

    Market size and outlook Communication Stable markets ● Strong growth in data traffic within both fixed BNEUR 0% and 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

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