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ELTEL: Eltel Group: Interim Report January-March 2016

January-March 2016

· Net sales amounted to EUR 287.5 million (239.0), up 23.2%* in
local currencies, organic net sales decreased by 0.4%*

· Operative EBITA amounted to EUR 3.2 million (5.3) or 1.1% of net
sales (2.2)

· No non-recurring items (-2.6)
· EBITA amounted to EUR 3.2 million (2.7) or 1.1% of net sales (1.1)
· Net financial expenses decreased to EUR -3.7 million (-7.9)
· The net result amounted to EUR -3.6 million (-7.5)
· Earnings per share was EUR -0.06 (-0.14)
· Operative cash flow amounted to EUR -37.4 million (-59.9), cash
conversion was 112.1% on a rolling 12-month basis

Unless otherwise stated, figures in brackets refer to the same period
in the previous year

* Organic net sales excludes Norwegian Communication business and the
Edi.Son, Sønnico and Vete acquisitions in 2015 and is presented using
comparable exchange rates.

Comments by the CEO

Continued growth with weather affecting profitability

Eltel's growth trajectory continued in the first quarter 2016, with a
solid 20-percent increase in net sales driven by acquisitions made in
2015. The long-term positive drivers in the Infranet market remained
visible, and Eltel won some exciting new contracts during and after
the reporting period. Our committed order backlog continued to show a
positive trend and increased during the quarter. However, from an
Eltel perspective, organic growth was hampered by less favourable
weather conditions in the first quarter.

Since the first quarter is Eltel's weakest in seasonal terms,
fluctuations in production and delivery volumes have the biggest
impact on our profitability. Weather effects, combined with the
business mix, particularly in our Transport & Security segment,
resulted in a lower consolidated operative EBITA margin compared with
the same period in 2015.

Our second quarter started with three new acquisitions - Celer in
Finland and U-Serv and the field service activities of EVB in
Germany. These are all prime examples of acquisitions that expand our
local platforms and add critical mass in our new markets. Taking into
account our recent achievements and the advances made last year,
Germany is expected to account for a more sizeable portion of Group
revenues in 2016 and onwards.

In the short term, we can still see room for improvements, especially
in our rail and power transmission business. These operations also
account for the most cyclical parts of our business where timing of
orders and deliveries may cause fluctuations between individual

We remain dedicated to our mid to long-term targets regarding
profitable growth. The selected acquisitions we have completed will
serve as important drivers for our revenue growth moving forward.
Organic growth continues to be supported by a solid market outlook
and a historically strong committed order backlog, with production
and delivery volumes normally increasing in the second half of the
year. Our focus on continued operational efficiency is being further
enhanced with several organisational initiatives and investments
planned for 2016 - to build on The Eltel Way. One good example of
this is the two-year project we have launched to utilise best
practice and scale synergies within our centralised support

In our society, where an efficient and more sustainable infrastructure
is playing an increasingly important role,

Eltel will continue to be the forerunner in transforming the Infranet

-Axel Hjärne, President and CEO

The information above has been published pursuant to the Swedish
Securities Markets Act (Sw: Lag om värdepappersmarknaden) and the
Swedish Financial Instruments Trading Act (Sw: Lagen om handel med
finansiella instrument).

For further information:
Ingela Ulfves
VP - Investor Relations and Group Communications
Tel: +358 40 311 3009,

About Eltel
Eltel is a leading European provider of technical services for
critical infrastructure networks - Infranets - in the segments of
Power, Communication and Transport & Security, with operations
throughout the Nordic and Baltic regions, Poland, Germany, the United
Kingdom and Africa. Eltel provides a broad and integrated range of
services, spanning from maintenance and upgrade services to project
deliveries. Eltel has a diverse contract portfolio and a loyal and
growing customer base of large network owners. In 2015 Eltel net
sales amounted to EUR 1,255 million. The current number of employees
is approximately 9,600. Since February 2015, Eltel AB is listed on
Nasdaq Stockholm.


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