In This Article:
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Net Sales: EUR210 million, compared to EUR213 million last year.
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Organic Net Sales Growth: 4%.
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Adjusted EBITDA: Improved to EUR9.8 million from EUR6.8 million last year.
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Order Book: Decreased to EUR1.1 billion from EUR1.2 billion.
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Cash Flow: Improved in all segments over the last 12 months.
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Finland Profitability: Improved by 52% to EUR7.3 million.
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Sweden Net Sales Growth: 19% in local currency.
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Norway Net Sales Decrease: 10% in local currency.
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Denmark Net Sales Decline: 9%.
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Leverage: Reduced from 5.4% to 3.5%.
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Net Working Capital: Improved from negative EUR15.5 million to negative EUR33.5 million.
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Net Debt: Higher due to fleet renewal, with leasing debt increased by EUR5 million.
Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Eltel AB (STU:E5E) reported a 4% organic net sales growth, driven by strong performances in Finland and Sweden.
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The company achieved its best-ever quarterly profit on adjusted EBITDA since 2015, marking five consecutive quarters of year-on-year improvement.
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Finland and Sweden led profitability improvements, with Finland achieving a 52% increase in profitability.
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Eltel AB secured new contracts, including a significant agreement with Helen Energy Company in Helsinki and a third agreement with the Swedish Armed Forces.
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The company is actively expanding into new and adjacent markets, particularly in renewable energy and public infrastructure, with a growing pipeline in battery energy storage systems.
Negative Points
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Eltel AB's order book decreased from EUR1.2 billion to EUR1.1 billion, indicating a decline in future business commitments.
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The company faces ongoing challenges in Norway, with a 10% decrease in net sales and a restructuring program impacting personnel and fleet.
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There is a delay in customer decision-making, particularly in new energy areas like solar, attributed to high interest rates.
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The company's liquidity reserves of EUR47.6 million are lower than its current interest-bearing debt of EUR86 million, raising potential liquidity concerns.
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Eltel AB removed its 2025 timeline for achieving a 5% adjusted EBITDA margin, citing current market conditions as unrealistic for meeting this target.
Q & A Highlights
Q: Can you provide an updated timeline for reaching the 5% margin target, given that it won't be achieved by the end of 2025? A: We don't have a new timeframe to communicate, but we believe that once market conditions normalize, the target will be within reach. The current market, particularly in the last two quarters, has been impacted by interest rates, causing customers to delay new initiatives.