<a id="bm-comp-0db3b61a-f83a-40bc-9f81-e4c098b0705c" name="bm-comp-0db3b61a-f83a-40bc-9f81-e4c098b0705c" class="BMCustomAnchor"></a><table><tr><td bm-component-id="0db3b61a-f83a-40bc-9f81-e4c098b0705c" style="vertical-align: top; width:100.000000%;"><ul><li>Q2e: big y-o-y earnings improvement</li><li>Raised EBITA driven by increasing emerging service sales</li><li>Share trading at 10x '26e EV/EBITA, goes to 7x in '28e</li></ul></td></tr></table><a id="bm-comp-210550c9-f654-466c-b60c-2750ce883305" name="bm-comp-210550c9-f654-466c-b60c-2750ce883305" class="BMCustomAnchor"></a><table><tr><td bm-component-id="210550c9-f654-466c-b60c-2750ce883305" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q2e: significant y-o-y EBITA improvement</h3><p>We expect Eltel to report Q2 net sales of EUR 211m, up 5% y-o-y, (4% organic, 1% FX). Although not as strong as the Q1 organic growth of 11%, which was boosted by completion of a larger Finnish project, we expect organic growth figures in Q2 and ahead to improve due to so-called emerging services reaching a sizeable share of sales (23% in Q1'26 vs. 6% in Q1'25), as well as the contract pipeline (53% in Q1'26 vs. 38% in Q1'25). Moreover, these new sales typically carry higher margins than Eltel's legacy business, and thus we model a significant y-o-y profitability increase, with Q2 EBITA of EUR 8.4m (2.5m in Q2'25) for a margin of 4.0% (1.2%).</p><h3 class="bm-h3">Raised organic growth and margin assumptions</h3><p>We raise our estimates for both organic growth and margins, and both for the same reason – the aforementioned increasing share of emerging service revenues. This results in our '26e-'27e EBITA coming up by 3%, and 4% for '28e.</p><h3 class="bm-h3">Strategic shift now clearly improving the financials</h3><p>The strategic shift away from a largely telecom-focused business model towards more diversified and faster-growing markets is now starting to show more clearly in the financials. There is still much room left to reach the EBITA margin target of 5% (compared to 2.7% on a r12m basis), and our estimates remain somewhat short of the target at 4.2% for '27e and 4.6% for '28e. Still, we model a substantial '26e-'28e adj. EBITA CAGR of 17%. On our estimates, the share is trading at 10x '26e EV/EBITA, which falls to 7x by '28e.</p></td></tr></table>