Eltel ended ’21 on a strong note, with sales of EUR 226m (8% vs ABGSCe 210m), down -1% y-o-y, whereof -3% org. Thus, sales remained on last year’s level, indicating that Eltel has reached its new base line for growth in the Nordics, after several years of declining volumes. Adj. EBITA was EUR 7.0m (53% vs ABGSCe 4.6m), corresponding to an adj. EBITA margin of 3.1% (1.7%) vs. ABGSC 2.2%. In High Voltage Poland, Eltel closed several large, old projects during ‘21, allowing the company to go into ‘22 with lower risk in its project portfolio and reduced level of net working capital. However, losses in Poland were still high. Work is ongoing to make the business profitable again while Eltel continue to look at strategic options.
Estimate changes and outlook
On isolated numbers, adj. EBITA ‘22e-‘23e should come up 10-15%. As expected, management repeats its guidance for ’22: Eltel expects the full-year 2022 operative EBITA margin to increase compared to 2021 (1.8%). Additionally, management guides for postive volume improvements in all core markets for 2022, with Finland highlighted as the strongest market.
Final thoughts
The share is down 10% YTD (vs. closest peers Netel and Transtema at 0% and -26%) and trades at 13x ‘23e EV/EBITA (Netel at ~12x and Transtema at ~10x). Yesterday, the company announced Håkan Dahlström as the new CEO of Eltel effective 1 September 2022, thus replacing Casimir Lindholm. More information expected during conf call at 10:00 CET. Link to webcast: www.eltelgroup.com
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