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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 813 827 847
Sales growth (%) -13,4 1,7 2,5
EBITDA 47 39 48
EBITDA margin (%) 5,7 4,8 5,7
EBIT adj 12 7 14
EBIT adj margin (%) 1,5 0,8 1,6
Pretax profit 9 -1 5
EPS rep 0,03 -0,02 0,03
EPS growth (%) -8,5 -188,6 209,9
EPS adj 0,02 -0,02 0,03
DPS 0 0 0
EV/EBITDA (x) 7,8 6,1 4,7
EV/EBIT adj (x) 30 36 16,8
P/E (x) 55,5 -31,8 28,9
P/E adj (x) 68,1 -42,3 24,1
EV/sales (x) 0,4 0,3 0,3
FCF yield (%) 8,1 24,4 24,8
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 2,5 2,8 2,1
Lease adj. FCF yield (%) -0,3 4,5 4,9
Lease adj. ND/EBITDA 4,6 6,5 2,7
EURm 2021 2022e 2023e
Sales 813 827 847
COGS -725 -739 -757
Gross profit 88 88 90
Other operating items -42 -49 -42
EBITDA 47 39 48
Depreciation and amortisation -32 -32 -34
Of which leasing depreciation -30 -29 -25
EBITA 15 7 15
EO items 2 0 0
Impairment and PPA amortisation 0 -1 -1
EBIT 15 7 14
Net financial items -6 -8 -8
Pretax profit 9 -1 5
Tax -4 -2 -1
Net profit 5 -4 4
Minority interest 1 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 6 -3 4
EPS 0,03 -0,02 0,03
EPS Adj 0,02 -0,02 0,03
Total extraordinary items after tax 2,4 0 0
Leasing payments -30 -29 -25
Tax rate (%) -43,2 192 -20,5
Gross margin (%) 10,8 10,6 10,6
EBITDA margin (%) 5,7 4,8 5,7
EBITA margin (%) 1,8 0,9 1,7
EBIT margin (%) 1,8 0,8 1,6
Pretax margin (%) 1,1 -0,1 0,6
Net margin (%) 0,6 -0,4 0,5
Growth rates Y/Y 2021 2022 2023
Sales growth (%) -13,4 1,7 2,5
EBITDA growth (%) -26,2 -15,4 23,3
EBIT growth (%) -41,5 -54,4 108
Net profit growth (%) -5,7 -172,2 216
EPS growth (%) -8,5 -188,6 209,9
Profitability 2021 2022 2023
ROE (%) 2,6 -1,6 1,9
ROE Adj (%) 1,6 -1,3 2,3
ROCE (%) 3,7 1,6 3,3
ROCE Adj(%) 3,2 1,8 3,5
ROIC (%) 2,3 5,5 3,2
ROIC Adj (%) 1,9 5,5 3,2
Adj earnings numbers 2021 2022 2023
EBITDA Adj 44 39 48
EBITDA Adj margin (%) 5,4 4,8 5,7
EBITDA lease Adj 15 11 23
EBITDA lease Adj margin (%) 1,8 1,3 2,7
EBITA Adj 12 7 15
EBITA Adj margin (%) 1,5 0,9 1,7
EBIT Adj 12 7 14
EBIT Adj margin (%) 1,5 0,8 1,6
Pretax profit Adj 7 -1 6
Net profit Adj 3 -3 5
Net profit to shareholders Adj 4 -3 5
Net Adj margin (%) 0,4 -0,4 0,6
EURm 2021 2022e 2023e
Shareholders equity 220 216 221
Minority 8 8 8
Total equity 228 224 228
Long-term debt 26 40 40
Pension debt 14 13 11
Convertible debt 0 0 0
Leasing liability 54 51 51
Total other long-term liabilities 14 14 14
Short-term debt 74 89 89
Accounts payable 179 178 182
Other current liabilities 42 28 29
Total liabilities and equity 631 636 643
Net IB debt 117 109 101
Net IB debt excl. pension debt 103 97 91
Net IB debt excl. leasing 67 69 63
Capital invested 356 344 340
Working capital -11 -20 -22
EV breakdown 2021 2022 2023
Market cap. diluted (m) 239 121 121
Net IB debt Adj 117 109 101
Market value of minority 8 8 8
Reversal of shares and participations -1 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 363 238 230
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 124,2 130,5 132,4
Working capital / sales (%) -2,3 -1,8 -2,4
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 51,5 48,7 44,4
Net debt / market cap (%) 34,8 90,2 83,7
Equity ratio (%) 36,1 35,2 35,5
Net IB debt adj. / equity (%) 51,5 48,7 44,4
Current ratio (%) 77,2 78,9 80,5
EBITDA / net interest (%) 815,8 501,4 572,2
Net IB debt / EBITDA (%) 252,3 277,6 209,1
Net IB debt / EBITDA lease Adj (%) 464,8 645,1 271,4
Interest cover (%) 255,2 91,2 172,2
EBITDA 47 39 48
Net financial items -6 -8 -8
Paid tax -3 -2 -1
Non-cash items -6 -3 -3
Cash flow before change in WC 32 26 36
Change in WC -10 9 2
Operating cash flow 22 35 38
CAPEX tangible fixed assets 1 -5 -8
CAPEX intangible fixed assets 0 0 0
Acquisitions and disposals 0 0 0
Free cash flow 23 30 30
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Lease liability amortisation -24 -24 -24
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 14 14
Right-of-use asset 53 49 47
Total other fixed assets 20 23 23
Fixed assets 389 389 388
Inventories 17 12 11
Receivables 192 174 178
Other current assets 0 0 0
Cash and liquid assets 32 60 66
Total assets 631 636 643
EURm 2021 2022e 2023e
Shares outstanding adj. 157 157 157
Fully diluted shares Adj 157 157 157
EPS 0,03 -0,02 0,03
Dividend per share Adj 0 0 0
EPS Adj 0,02 -0,02 0,03
BVPS 1,4 1,38 1,41
BVPS Adj -0,29 -0,31 -0,29
Net IB debt / share 0,8 0,8 0,7
Share price 2,15 0,77 0,77
Market cap. (m) 337 121 121
Valuation 2021 2022 2023
P/E 55,5 -31,8 28,9
EV/sales 0,45 0,29 0,27
EV/EBITDA 7,8 6,1 4,7
EV/EBITA 24,7 33,3 15,8
EV/EBIT 25 36 16,8
Dividend yield (%) 0 0 0
FCF yield (%) 8,1 24,4 24,8
Lease adj. FCF yield (%) -0,3 4,5 4,9
P/BVPS 1,08 0,56 0,55
P/BVPS Adj -5,32 -2,47 -2,7
P/E Adj 68,1 -42,3 24,1
EV/EBITDA Adj 8,2 6,1 4,7
EV/EBITA Adj 29,5 33,3 15,8
EV/EBIT Adj 30 36 16,8
EV/cap. employed 0,9 0,6 0,5
Investment ratios 2021 2022 2023
Capex / sales -0,1 0,7 0,9
Capex / depreciation -40,9 155,7 90
Capex tangibles / tangible fixed assets -7,8 40 53,7
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 19 25,7 59,7

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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 % 27 Jul 2022
Wipunen varainhallinta Oy 14.2 % 14.3 % 3 May 2022
Fjärde AP-fonden 9.5 % 9.6 % 27 Jul 2022
Heikintorppa Oy 7.8 % 7.9 % 3 May 2022
Mariatorp Oy 6.3 % 6.4 % 3 May 2022
Första AP-fonden 5.8 % 5.8 % 27 Jul 2022
Fidelity International (FIL) 4.5 % 4.5 % 30 Jun 2022
Swedbank Robur Fonder 3.7 % 3.8 % 31 Jul 2022
Lancelot Asset Management AB 2.2 % 2.2 % 30 Jun 2022
Mandatum Life Funds 1.8 % 1.8 % 31 Jul 2022
Source: Holdings by Modular Finance AB