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Eltel

Eltel

Eltel is a leading Nordic field service provider for critical power and communication networks – infranets. The company builds, maintains and upgrades these essential lifelines for national network operators and owners. For example, Eltel provides infrastructure that allows renewable energy generation, electric vehicle charging and high-capacity communication networks. Eltel has divided its business operations into two business areas: Power and Communication. Meanwhile, the company has divided its business segments into four different geographical areas: Finland, Sweden, Norway and Denmark.

Eltel has focused on reducing its operational risk and improving its balance sheet in recent years, since the company initiated a turnaround strategy. Eltel may therefore now be in a position to start focusing more on opportunities. With improved profitability and strong cash generation, we expect the company to be able to start paying dividends, but also to look at potential opportunities to grow through mergers and acquisitions. Furthermore, there may be opportunities to upsell services by broadening the scope of the company’s offering in large framework agreements.

There are many competitors but few customers in Eltel’s markets. Thus the company is exposed to fierce price competition and substantial customer dependency. In 2020, the two largest customers accounted for 37% of sales. If one or several customers were to reduce their investment levels, the impact on Eltel would be notable. Furthermore, the business model is highly seasonal and weather-sensitive, meaning that abnormal weather conditions may affect the company’s results.

EURm 2021 2022e 2023e
Sales 813 822 831
Sales growth (%) -13,4 1,1 1,1
EBITDA 47 46 51
EBITDA margin (%) 5,7 5,6 6,2
EBIT adj 12 12 17
EBIT adj margin (%) 1,5 1,5 2,1
Pretax profit 9 4 9
EPS rep 0,03 0,01 0,04
EPS growth (%) -8,5 -46 201,5
EPS adj 0,02 0,02 0,05
DPS 0 0,01 0,02
EV/EBITDA (x) 7,8 5 4,4
EV/EBIT adj (x) 30 18,4 13,1
P/E (x) 55,5 52 17,3
P/E adj (x) 68,1 41,2 15,4
EV/sales (x) 0,4 0,3 0,3
FCF yield (%) 8,1 31,5 24,9
Dividend yield (%) 0 1 2,9
Net IB debt/EBITDA 2,5 2,2 1,9
Lease adj. FCF yield (%) -0,3 10,6 4
Lease adj. ND/EBITDA 4,6 3 2
EURm 2021 2022e 2023e
Sales 813 822 831
COGS -725 -729 -739
Gross profit 88 93 92
Other operating items -42 -46 -41
EBITDA 47 46 51
Depreciation and amortisation -32 -33 -33
Of which leasing depreciation -30 -28 -25
EBITA 15 13 18
EO items 2 0 0
Impairment and PPA amortisation 0 -1 -1
EBIT 15 12 17
Net financial items -6 -8 -8
Pretax profit 9 4 9
Tax -4 -2 -2
Net profit 5 2 7
Minority interest 1 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 6 2 7
EPS 0,03 0,01 0,04
EPS Adj 0,02 0,02 0,05
Total extraordinary items after tax 2,4 0 0
Leasing payments -30 -28 -25
Tax rate (%) -43,2 -45,8 -20,5
Gross margin (%) 10,8 11,3 11,1
EBITDA margin (%) 5,7 5,6 6,2
EBITA margin (%) 1,8 1,6 2,2
EBIT margin (%) 1,8 1,5 2,1
Pretax margin (%) 1,1 0,5 1,1
Net margin (%) 0,6 0,3 0,8
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -13,4 1,1 1,1
EBITDA growth (%) -26,2 -0,9 11,1
EBIT growth (%) -41,5 -14,1 37,4
Net profit growth (%) -5,7 -53,5 201,5
EPS growth (%) -8,5 -46 201,5
Profitability 2021 2022 2023
ROE (%) 2,6 1 3,1
ROE Adj (%) 1,6 1,3 3,5
ROCE (%) 3,7 3,1 4,3
ROCE Adj(%) 3,2 3,3 4,5
ROIC (%) 2,3 1,9 4
ROIC Adj (%) 1,9 1,9 4
Adj earnings numbers 2021 2022 2023
EBITDA Adj 44 46 51
EBITDA Adj margin (%) 5,4 5,6 6,2
EBITDA lease Adj 15 18 26
EBITDA lease Adj margin (%) 1,8 2,2 3,2
EBITA Adj 12 13 18
EBITA Adj margin (%) 1,5 1,6 2,2
EBIT Adj 12 12 17
EBIT Adj margin (%) 1,5 1,5 2,1
Pretax profit Adj 7 5 10
Net profit Adj 3 3 8
Net profit to shareholders Adj 4 3 8
Net Adj margin (%) 0,4 0,4 0,9
EURm 2021 2022e 2023e
Shareholders equity 220 223 228
Minority 8 8 8
Total equity 228 230 236
Long-term debt 26 35 36
Pension debt 14 12 9
Convertible debt 0 0 0
Leasing liability 54 54 54
Total other long-term liabilities 14 16 16
Short-term debt 74 69 69
Accounts payable 179 177 179
Other current liabilities 42 28 28
Total liabilities and equity 631 620 626
Net IB debt 117 102 96
Net IB debt excl. pension debt 103 90 87
Net IB debt excl. leasing 67 55 53
Capital invested 356 342 343
Working capital -11 -21 -22
EV breakdown 2021 2022 2023
Market cap. diluted (m) 239 121 121
Net IB debt Adj 117 102 96
Market value of minority 8 8 8
Reversal of shares and participations -1 -1 -1
Reversal of conv. debt assumed equity 0 0 0
EV 363 229 224
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 124,2 131,4 133,4
Working capital / sales (%) -2,3 -2 -2,6
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 51,5 44,1 40,8
Net debt / market cap (%) 34,8 84 79,6
Equity ratio (%) 36,1 37,2 37,7
Net IB debt adj. / equity (%) 51,5 44,1 40,8
Current ratio (%) 77,2 79,3 80,6
EBITDA / net interest (%) 815,8 563,5 616,1
Net IB debt / EBITDA (%) 252,3 220,3 188
Net IB debt / EBITDA lease Adj (%) 464,8 303,9 200,3
Interest cover (%) 255,2 159,8 216,1
EBITDA 47 46 51
Net financial items -6 -8 -8
Paid tax -3 -2 -2
Non-cash items -6 -4 -4
Cash flow before change in WC 32 32 37
Change in WC -10 12 0
Operating cash flow 22 45 38
CAPEX tangible fixed assets 1 -6 -7
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 23 38 30
Dividend paid 0 0 -1
Share issues and buybacks 0 0 0
Lease liability amortisation -24 -25 -25
Other non cash items 0 0 0
Balance Sheet (EURm) 2021 2022 2023
Goodwill 265 266 266
Other intangible assets 40 39 38
Tangible fixed assets 12 13 12
Right-of-use asset 53 51 53
Total other fixed assets 20 20 20
Fixed assets 389 388 388
Inventories 17 11 11
Receivables 192 173 174
Other current assets 0 0 0
Cash and liquid assets 32 49 52
Total assets 631 620 626
EURm 2021 2022e 2023e
Shares outstanding adj. 157 157 157
Fully diluted shares Adj 157 157 157
EPS 0,03 0,01 0,04
Dividend per share Adj 0 0 0
EPS Adj 0,02 0,02 0,05
BVPS 1,4 1,42 1,46
BVPS Adj -0,29 -0,27 -0,24
Net IB debt / share 0,8 0,7 0,7
Share price 2,15 0,77 0,77
Market cap. (m) 337 121 121
Valuation 2021 2022 2023
P/E 55,5 52 17,3
EV/sales 0,45 0,28 0,27
EV/EBITDA 7,8 5 4,4
EV/EBITA 24,7 17,5 12,5
EV/EBIT 25 18,4 13,1
Dividend yield (%) 0 1 2,9
FCF yield (%) 8,1 31,5 24,9
Lease adj. FCF yield (%) -0,3 10,6 4
P/BVPS 1,08 0,54 0,53
P/BVPS Adj -5,32 -2,81 -3,25
P/E Adj 68,1 41,2 15,4
EV/EBITDA Adj 8,2 5 4,4
EV/EBITA Adj 29,5 17,5 12,5
EV/EBIT Adj 30 18,4 13,1
EV/cap. employed 0,9 0,6 0,6
Investment ratios 2021 2022 2023
Capex / sales -0,1 0,8 0,9
Capex / depreciation -40,9 126,2 90
Capex tangibles / tangible fixed assets -7,8 49,8 61,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 19 39,4 68,6

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Media

Eltel - Company presentation with President & CEO Casimir Lindholm
Eltel - Company presentation with CEO Casimir Lindholm

Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Triton 16.2 % 16.4 % 30 Apr 2022
Wipunen varainhallinta Oy 14.2 % 14.3 % 3 May 2022
Fjärde AP-fonden 9.5 % 9.6 % 30 Apr 2022
Heikintorppa Oy 7.8 % 7.9 % 3 May 2022
Mariatorp Oy 6.3 % 6.4 % 3 May 2022
Första AP-fonden 5.8 % 5.9 % 30 Apr 2022
Fidelity International (FIL) 4.5 % 4.5 % 31 Mar 2022
Swedbank Robur Fonder 4.0 % 4.1 % 30 Apr 2022
Lancelot Asset Management AB 2.5 % 2.6 % 31 Mar 2022
Mandatum Life Funds 1.8 % 1.8 % 30 Apr 2022
Source: Holdings by Modular Finance AB