<a id="bm-comp-8dcdb29f-b33d-40ad-8200-c7d3ad42a0b0" name="bm-comp-8dcdb29f-b33d-40ad-8200-c7d3ad42a0b0" class="BMCustomAnchor"></a><table><tr><td bm-component-id="8dcdb29f-b33d-40ad-8200-c7d3ad42a0b0" style="vertical-align: top; width:100.000000%;"><ul><li>Q1e: a seasonally small quarter, but positive y-o-y trend</li><li>We make only minor estimate revisions</li><li>Share trading at 10-8x '26e-'27e EV/EBITA</li></ul></td></tr></table><a id="bm-comp-94b29586-77a7-4424-873f-c2550c076edd" name="bm-comp-94b29586-77a7-4424-873f-c2550c076edd" class="BMCustomAnchor"></a><table><tr><td bm-component-id="94b29586-77a7-4424-873f-c2550c076edd" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q1e: seasonally small, but y-o-y improvement expected</h3><p>We expect Eltel to report Q1 net sales of EUR 178m, up 5% y-o-y, of which +3% organic. We expect to see mixed demand signals from Eltel's end-markets, with Communications expected to remain subdued, especially in Norway, while the order momentum in Power seems to be clearly better. Profitability should improve y-o-y, partly due to more contracts rolling over to new, better commercial terms as of 2026, and partly due to growth in "new business areas", which according to the company are also margin-accretive. However, we remind that Q1 is a seasonally small quarter, and we therefore see the y-o-y trend as more important than the absolute EBITA number. That being said, we model an adj. EBITA of EUR 2.0m (up from 0.9m in Q1'25), for a margin of 1.1% (0.5%).</p><h3 class="bm-h3">Minor estimate revisions for '26e-'28e</h3><p>We make only very minor estimate revisions ahead of the Q1 numbers, raising EBITA by 1% per year for '26e-'28e.</p><h3 class="bm-h3">Established margin expansion track record to continue</h3><p>Eltel has now improved its adj. EBITA margin y-o-y for 10 consecutive quarters, a clear track record of operational improvements that we expect to continue. With that said, the 2025 adj. EBITA margin was 2.5%, meaning that the company's margin target of 5% still implies that profitability has to double within 3–5 quarters per the company's own timeline. We remain more cautious than the company targets, estimating margins of 3.4-4.5% for '26e-'28e, resulting in a '25-'28e adj. EBITA CAGR of 24%. On our estimates, the share is trading at 10-8x '26e-'27e EV/EBITA, but if the margin target is reached by '27, it would instead imply an EV/EBITA multiple of ~6.5x.</p></td></tr></table>