Eltel AB (publ)

A warm welcome to this presentation of LTEL's Q4 results, full year results. My name is Alexandra Kjernlund. I am the communications director of LTEL. And with me to present the results is our president and CEO, Håkan Dahlström, and LTEL's CFO, Tarja Leikas. After their presentations, we will open up for questions. And you can either dial in via the telephone conference or ask the questions through the web conference. With that, I'd like to hand it over to you, Håkan.

Thank you. Thank you, Alexandra. And good morning, all. Welcome to this session. I will start saying a few words about the financials during the fourth quarter. And I'm pleased to announce that the fourth quarter means that we ended the year on a highly positive note with a growth of 5.7% and an improved adjusted EBITDA. So we increased to 18% gross profit, meaning 5 million more than last year. And this altogether means that we now have 10 consecutive quarters where we year over year in adjusted EBITDA had made this improvement. So for me, this is very important. As you have heard me say many times, we always compare to our own track record and what we have done last year and should be better than that. So it's of course with great pleasure that we're standing here today with 10 consecutive quarters with improved adjusted EBITDA. I also see the development of net sales as a very good indication here. It has been for some years more or less the same level. I would say zooming out a bit, Eltäl's net sales have been more or less flat. With the fourth quarter, we see possibility to come into an area with a bit more growth. And when we look at this fourth quarter on the commercial side, it is an impressive net sales development in Sweden, where Sweden delivered 26% growth in the fourth quarter. And this over a broad range of area. It's not one area that is driving this in the Swedish business. We see it in the part of our business that we have towards telco operators, but we also see it in communication in a broader way, where we frequently talk about the importance of the public sector customer segment. And here we of course have the defense, we have road authorities, other players. Here we can see that Sweden is gaining market share. Really good to see. But Sweden also have demonstrated a possibility to have rapid growth in the power segment. So all of all, I would say an impressive development of net sales in Sweden in the fourth quarter. On top, when we look at Finland, there is a bit of growth in the fourth quarter. But when we open up and see, there is a lot of changes in the Finnish market here. As you have heard us talking about before, the fiber rollout, meaning fiber to the home, that peaked during 2024. So during last year and also very visible in the fourth quarter, it has been much lower volume, much less investment from the teleco operators segment towards fiber and fiber to the home. I must say that I'm happy and proud over how the Finnish organization have adapted to the new situation and navigated in these quite difficult circumstances. So with significant growth in the power, particularly within the solar area, data area, but also data, I mean data center. So of course, data center and the power part of data center. but also classic power, meaning both services and new projects. Finland has been able to compensate for the drop on the classic telco operator customer segment. One part of this important development is that we were able to sign a new agreement with Karuna on smart grid during the quarter, which was really important. But I also see that overall in the company, the new business as we have selected or chosen to call it, has increased with 16% in the quarter to be compared with 6% a year ago. For the full year, that would mean 11% of net sales is coming from this new area. Norway is a story by itself, of course, and we are happy to show you that the fourth quarter came out on the right side of the zero, meaning that we have no losses in Norway in the fourth quarter and the development is really good. In Norway, we have not had the possibility to compensate within new services or even though the business outside the telco operator segment, meaning then offshore, defense, other public services, and also more and more attention towards the data center segment. This has not been possible to compensate for the decline in the telco operator segment. Even though significant pushback on the net sales, Norway delivered what we call a black number in the fourth quarter. So that is of course extremely important for us that we are on the right track there and take another important step in Norway. Last quarter, we talked about heavy storms in Norway. This quarter, I would like to lift my Finnish colleagues and the great effort and achievement they have done during the rescue work after the storm Hannes in Finland during December, but also work came in quite far into January. We had more than 100 colleagues working very, very... consistent to restore the infrastructure after this storm. So well done, great work done. Overall, I would say that the market is very active and a lot of things is happening, quite a dynamic market. And particularly here, when we look at the power segment in this also data center and energy storage is sort of those two areas where most things are happening most rapidly. But I'm impressed of the organization's capability to adjust towards the situation and embrace the strategy we have in the company. So when I think of those 10 quarters we have done, how the organization is delivering on our strategic initiatives, how I see that my colleagues are able to adapt to rapid changes, I come to the conclusion that I'm confident that we have the target of 5% profitability. We have that within reach within a time spectrum of 12 to 18 months. And this is, of course, extremely important for us, and we are very thorough in our work towards that. But then if I zoom out and look a bit on the full year of 25, we see a bit of net sales growth. And here I have to admit that I have taken the high voltage unit we had in Poland. As you might remember, we sold that in the second quarter of 24. When I take those numbers out, I see an increase of 2.7 million euro on top line. Not so impressive maybe, but at least it is in the right direction. Gross profit has increased with 16 million. I think that is a decent achievement from us. Also, in this statement, I exclude high voltage in Poland. So with the operation as it is today, same operation 24, we have 16 million more in gross profit. And that leads us to have an adjusted EBITDA that is almost twice as it was a year ago. So we are now coming out here with 20.7 million euro. in adjusted EBITDA to be compared with 10 and a half for a year ago and the margin had by that improved to two and a half percent full year and what is then so the behind this yeah I would say the pattern is a bit different in the different market we see our initiative to broadening the customer base particularly towards the public infrastructure has sort of given us result. We see important contract in Norway towards the Norwegian defense. We see that the same work or similar work in Sweden towards the armed forces is gaining momentum. So this is of course a part of the Swedish growth that comes from this, but also other public infrastructure like transport and aviation and so are important here. But this broadening the customer base have helped us keeping up the revenue and the profitability during the year. We see also that these new services are gaining momentum. I would like to highlight data center here. We have during this year one or two really important contract here, one with HyperCo and one with DayOne. And those two together are significant for our build up in this area. So 16 million and 38 million each of those. So very important step here. Power as an area is of course getting more and more attention and we see that in different parts of our company we take steps forward in this area. I would claim that Finland has the lead internally in our internal competition internally in the company. Finland is ahead when it comes to growth in power. and also you remember that we signed for a year ago we signed a very large solar park in finland and we are delivering as we speak on that so those activities are extremely important and i see that during 2025 finland have gained momentum in this sort of activity But equally important, we have signed a large agreement in power, for example, in Sweden towards the customer E.ON that we now, during the beginning of 26, is starting delivering on. But overall, I would say continued growth in power and renewable energy, the broadening of the customer base, equally important. And this gives us this, I would claim, for Eltäl, a very important step now with the fourth quarter and the full year result of 25. But to get a bit more and better understanding of the numbers, I hand over to Tarja and let's have a look at the figures.

Yeah, with the pleasure. Thank you. So thank you, Håkan. I'm pleased to present Eltäl's results for the fourth quarter and the full year 25. And as Håkan already elaborated, we closed the year with an excellent quarter behind us. We delivered nearly 6% net sales growth. Sweden remained the growth engine. And Finland was growing with a moderate increase. While Norway and Denmark, Germany still faced communication-driven declines, the overall group trend is positive and strengthening. In the full year comparison, we remind, like Håkan, you mentioned that at 24, our net sales included approximately 14 million from the divested HV Poland. Excluding this, our existing business pushed itself into the level that we are above the last year level. Our workforce is now 445 employees fewer than a year ago. This reflects our ongoing efforts to scale operations effectively, as well as changes within our service portfolio. Profitability improved in Finland, Sweden and Norway. Fourth quarter adjusted EBITDA reached 8.3 million, the best fourth quarter in a decade. Full-year EBITDA doubled compared to the prior year, reaching 20.7 million. We are now moving clearly and steadily towards our 5% EBITDA target. The achievement is seen reachable within 12 to 18 months. We have been executing our current strategy since the beginning of 2023. The latest 10 quarters we have delivered our year-on-year adjusted EBITDA improvement. Our confidence is building with another year of 10 million improvement in adjusted EBITDA. and the 5% profitability target no longer seems distant. It is with the continued cost discipline, focused working capital management and solid top line development. And then the segments. First, Finland, which accounts now 43% of Group's operations. Finland continued modest growth despite the Fibre to the Home project phasing and significant decline in fibre investments in 2025. Total volumes recovered to last year's level. Lower communication volumes were fully offset by continued growth in power. and there, especially Solar PV and data center. Profitability remained strong. Euro-wise, we improved a bit. Margin-wise, we remained on par with previous year. Here, both our business areas were contributing. Fully adjusted EBITDA margin improved to 5.8. This demonstrates our ability to adjust operations effectively amid substantial volume shifts, like Håkan elaborated. Overall, Finland's performance provides a solid platform for continued progress. Then Sweden, which is now 31% of GroupNet sales, This quarter, Sweden's growth accelerated, being the strongest within the group. Quarterly net sales increased more than 25%, and full-year growth approached 13% in reporting currency. Communication volumes continued to grow, driven by telecommunication and public infra demand. This is setting Sweden apart from the trends from our other segments. Growth in Sweden is both strong and profitable. EBITDA margin improved from 4.2 to 5.3%. This is supported by both communication and power. The lower headcount underscores our strong scalability and operational discipline. Then Denmark and Germany, which together now count 15% of group net sales. The net sales decreased by 800,000, primarily due to reduced communication volumes in Denmark. Power operations in both Denmark and Germany continued on a growth path. Profitability declined in the quarter, largely due to lower communication volumes following contract completions, and associated personal reductions temporarily burdened the result. Power operations continue to improve margins. And then Norway, which now contributes 11% to group operations. Customer investments in communications have remained low, resulting in €3 million decline in net sales. New customer acquisition is progressing well, but it's not fully compensating the reduction from traditional customers. Focus on profitability has remained a priority, and the result improvement is significant. Norway delivered its second consecutive quarter with positive EBITDA. This marks a clear operational turnaround. Quarterly EBITDA improvement was more than 2.3 million year on year, and this is following enhanced operational efficiency. Norway achieved positive EBITDA for the entire second half of 2025. Norway is now on positive track and with clear elements of sustainable improvement. And then a brief look on the balance sheet. Well, year-end net sales, sorry, year-end net debt in this case, year-end net debt was 142 million versus last year 114 million. The increase here is due to the refinancing we completed in the second quarter. And there we reclassified the hybrid bond from equity to debt. On a comparable basis, the net debt would have been 117 million. The same effect impacts leverage. Reported leverage is 2.8. On a comparable basis, leverage would be 2.3. And last year, the leverage was 2.5. Networking capital has remained strongly negative, now negative 60 versus last year's negative 61. This reflects our continued discipline in cash flow and contract management. And with that, a reminder of the financial targets, which have remained unchanged. Profitability, adjusted EBITDA margin 5%, growth between 2 and 4%, leverage between 1.5 and 2.5, and dividend payout subject to leverage target. And then Håkan will share the latest from the strategy execution.