Release Date: July 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Netel Holding AB (LTS:0AAB, Financial) reported an increased order backlog of SEK4.1 billion, indicating strong future business prospects.
- The telecom division saw a 3% increase in sales, driven by positive trends in Sweden and Germany.
- The company successfully expanded its geographical reach and customer base, including a significant EUR90 million contract with Enviatel in Germany.
- The sale of the Finnish operations, which were operating at a loss, allows Netel Holding AB (LTS:0AAB) to focus on core markets in Sweden and Norway and growth markets in Germany and the UK.
- Netel Holding AB (LTS:0AAB) secured new framework agreements and contracts across various divisions, including a SEK330 million agreement with Aeon in Sweden, enhancing its market position.
Negative Points
- The high proportion of projects in the startup phase negatively impacted profitability, with an EBITDA margin of 5.2% during the quarter.
- Sales in the infra services division decreased by 29.8% compared to a strong comparative quarter last year.
- The power division experienced a 3.5% decrease in sales due to project starts and changes in the product mix.
- The company reported a negative growth of 7.7% in sales for the quarter, with a year-to-date sales figure just below last year.
- The higher working capital and negative operating cash flow led to an increased leverage ratio of 3.4 times, indicating financial strain.
Q & A Highlights
Q: Can you provide more details on the reversal in the telecoms area and its timing?
A: We always use updated estimates and conservative judgments for project margins. The reversal was due to finalized projects where provisions were no longer needed, resulting in a one-off effect of approximately SEK10 million. This provision was made over the last few quarters, during '24 and '25. - Fredrik Helenius, CFO
Q: Is the Norwegian telecom service operation now on a firmer footing?
A: Yes, we have implemented efficiency measures and onboarded additional teams, which are starting to show positive results. We expect to continue realizing these potentials in the coming quarters. - Fredrik Helenius, CFO
Q: Given the slow start this year, can you catch up to deliver results similar to 2024?
A: We have a strong order backlog for the remaining six months, with SEK1.5 billion expected. We anticipate ramping up production and increasing output in the second half of the year. - Fredrik Helenius, CFO
Q: Are the new financial targets for growth and margin achievable this year?
A: Yes, we expect to ramp up production in the second half and meet our financial targets. Although volumes were lower than expected in the first half, we plan to deliver on them in the second half. - Jeanette Reuterskiold, CEO
Q: Do you foresee any resource limitations as you enter a high production period?
A: No, we are well-equipped with resources and ready to ramp up production for the second half of the year. - Jeanette Reuterskiold, CEO
Q: How do current project discussions and RFPs compare to 6 or 12 months ago?
A: The market remains strong, although there have been some delays in tenders. Many tenders were released just before summer, indicating continued market strength. - Jeanette Reuterskiold, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
