Eltel AB (publ)

A warm welcome to this presentation of LTEL's second quarter results. My name is Alexandra Kjernund. I am the Communications Director at LTEL. To present the results, we have Håkan Dahlström, CEO and President of LTEL, and Tarja Leikas, CFO of LTEL. After their presentations, we will open up for your questions. And you can either post your questions via the web conference in the forum or dial in via the phone conference. And with that, I want to hand over to you, Håkan.

Thank you, Alexandra. Good morning and welcome also from my behalf. I would like to start saying a few words about ELTEL as a reminder and also for the benefit of newcomers. We divide our business in what we call classic services where ELTEL have 25 years of history. But during the last three years, we have expanded our ambition in the market with emerging services. That means in the customer dimension, as we traditionally have worked more or less only with network owners and grid owners within power and telecommunication, we, during the last three years, also addressed enterprise customers and public sector. In the middle of this, you see the business model where we have the base in service and maintenance, but as you know, also technology infrastructure needs upgrades, and those are the two main parts, meaning 72% of our net sales during 2025. On top of this, we of course help our customers to establish new infrastructure with our installations. All together, we are very happy to play a significant role in the Nordic when it comes to technical services for critical infrastructure. And I'm really happy here today to be able to come to you with a report that is the best second quarter in a decade. So for ten years ago ELTEL was something else than what we are today. So really good to see here now that we have been able to generate five and a half million euro at the level of adjusted EBITDA. A bit more than twice as much as a year ago. And this means that we now have 12 consecutive quarters where we have year over year improved our adjusted EBITDA. And this is for us priority number one. I said it so many times and I will stick to this. This is our priority. We need to improve the adjusted EBITDA and by that everything else also going to be much better. In the second quarter, Norway was the one that improved the result most, followed by Finland and Sweden. So it's good to see that three out of four segments contributed to this improvement. And I will have to say a few words about Norway here. I think it's really great to see the fifth quarters in a row. And we are coming close to 5% on adjusted EBITDA level in the Norwegian business. So Team Norway, really well done. Happy to see this turnaround actually delivering. Finland and Sweden also doing really good. And of course, I would love to have seen a top line increase also in the second quarter. But it's for us more important with EBITDA. So below more or less flat net sales, it looks like everything would be stable, but it's actually quite big movements within each segment. If I take Finland as an example, I think Team Finland makes it really good managing lower volume in communications. As you remember, the fiber to the home rollout peaked in 24. It was half of that size in 2025 and even less now during 2026. Higher volume, more activity in power. Finland is balancing this and improving margin both in communication and in power. So really good, well done. Also Sweden, where the business mix is very different. A very big portion of everything is about communication services. also telco operators are a big portion of that business of course and here sweden are able to improve in all different parts of the business on the profitability so even though flat on that say i would say that we are really happy about the result Denmark, Germany combined segment. Germany do it really well during second quarter and Denmark not. I must say that either net sales or profitability came up to my expectation in Denmark during the second quarter. We have taken actions during April to get the organization and the capacity more in balance with the backlog and order book. We hope to see effect of this later during the year. But normally in this type of situation, it takes a bit of time. Because in our business it's so important that we have a good balance between the capacity and skills we have and the order book we have. And here I would say that this is not really in balance in Denmark just now. We have to improve the sales, but I'm really happy for the activities that we have done during the second quarter. Also on the positive note, I will have to mention the cash flow. So it's great to see that we have improved cash flow in the second quarter. As you know, we have big seasonality in our business. So having a positive cash flow here in the first half is good to see. EMERGING SERVICES, AS MENTIONED, DURING THE THREE YEARS OF THE NEW STRATEGY, WE HAVE FOCUSED ON BUILDING NEW BUSINESS IN EMERGING SERVICES AND DURING THIS QUARTER IT WAS 14% OF THE NET SALES. Those of you who remember first quarter know that we had significant larger portion of emerging services, mainly solar in the first quarter. Here in the second quarter, it's data center. So it's very visible in Norway, Finland, the data center business in the second quarter. The Solar Park, Hallenvati Solar Park that we have the production and you see that on the right side here. Really happy to see the progress in this project and was a big contributor to the net sales in the first quarter. Also contribution in the second quarter but not in the same extent due to that this project come to a finalization. On the commercial side, meaning here capability to sign contract, I think that we are really happy to see the 217 million signed during the second quarter. It's not only the level, it's actually also what it consists of that is really good and make me optimistic about the future. so there is a mix in the contract portfolio that has been really good and a lot of this have been in the core business meaning that the classic service customer like ELISA, Fingrid, Global Connect is a major part here and that is building the stability in service and maintenance and upgrade So really, really important. And you also have seen that we have continued during the beginning of July to also sign contract that is not included in these 217 million. But emerging services, great progress to grid connection contract towards data center, important for us. Well done, Team Finland. And then really good development in Sweden when it comes to power sector. And we have got a decision by Vattenfall. They want to give us the contract to do service and maintenance in two regions. This decision is appealed. I have looked at it. I'm not really worried. It's, of course, always connected to a risk and a delay. So for me, it's more about the delay here. I think we still... will manage to sign this contract in the soon future. But it will be a delay. Is it two months? Is it six months? I can't say. But still very optimistic about the case as such. So taking all of this into consideration, I think that we have a really good position and the contract portfolio is in a good shape. So not really worried that the top line in the second quarter is flattish. I tend to focus at the adjusted EBITDA improvement, great, cash flow, great. But Tarja, what does the number tell you more about this?

Thank you, Håkan. Really, really happy to report the second quarter results. And like Håkan mentioned, we are pleased that our top priority, we continue to improve profitability. Group adjusted EBITDA more than doubled to 5.5 million, marking three full years. Three full years of year-on-year profitability improvement. And like mentioned, Norway was the largest contributor to the profitability improvement. Finland brought solid result and Sweden continued improving the financial performance. Net sales were 200 million, slightly below last year. However, our total contract value, like Håkan mentioned earlier, the total contract value of signed new contracts was strong, reaching 217 million during the quarter. On top of this, we were awarded of 275 million contract with Vattenfall in Sweden. This is the largest contract award to date. And due to the appeal process, we do not include this into our total contract value. Headcount is now down by 250 employees, reflecting effective scaling, portfolio adjustments and extended partner engagement. The journey towards our 5% EBITDA continued. Overall, the first half of 26 strengthened the confidence in our ability to achieve our long-term profitability target of 5%. While we still have work ahead of us, our consistent execution and focus on operational efficiency and margin discipline continue to deliver results. And then we have the segments, and first we have Finland. Now Finland, in the second quarter, Finland was 42% of LTEL Group. Finland delivered a strong operational performance and margin management. Profitability increased significantly despite slightly lower net sales and changed business mix. During second quarter, Finland signed large contracts both in classic power and communication as well as in emergency services. Adjusted EBITDA margin reached 6.2%. It is clearly above previous year's 4.1%. Finland demonstrated solid operational improvement and profitability focus. Then Sweden. Sweden was now 29% of LTEL's operations. Net sales were in line with last year. Sweden continued good development in communication service volumes. Power declined following the project closings. And as mentioned earlier, to our delight, Sweden Power was awarded with a record volume contract by Vattenfall. Sweden continued delivering stable operational performance and improved profitability despite power project closings. And then Denmark. Denmark-Germany's share of LTEL operations was now 15%. Denmark-Germany was impacted by the continued volume decline in communication as well as power grid connection bottlenecks in Denmark. Net sales and profitability remained below expectations. both below our expectations and the previous year level, despite a strong performance of German operations. As mentioned along previous quarter reporting, we have taken actions to improve efficiency and adapt the cost base to safeguard the future profitability. And then to Norway, which was a group's strongest contributor to the profitability development. Norway's share of LTEL is now 14%. and Norway outperformed both commercially and operationally. EBIT A reached 4.9% compared with previous year's negative 1.6%. Team Norway has successfully improved utilization, efficiency and commercial performance while building a more diversified customer base. The year-on-year improvement has now been sustained for a full year. Actually, you mentioned, Håkon, that it's five quarters. It's more than a full year. This is demonstrating the effectiveness of the turnaround effects. And then a brief look to our balance sheet. Networking capital remained at a healthy level. This is reflecting our disciplined payment patterns. Thank you very much. Net debt landed to 170 million, comparability adjusted, and here hybrid bond and the tax deferral repayments. The net debt amounted to 129 million, and this represents an improvement from last year's 145 million. And this is reflecting the positive impact of the last year's refinancing and the continued focus on cash and working capital management. Leverage was 3.1. End of the period, comparability adjusted leverage was 2.7 and that is compared with the previous year's 2.9. That is an improvement as well. All in all, cash flow and working capital remained healthy, reflecting continued financial discipline. And I will close with a reminder of the long-term financial targets, which we keep unchanged. Profitability, 5%. And here we have the rolling 12 months result. Now we are on the level of 3.1. Growth between 2 and 4%. Latest 12 months result here is 3.8. And leverage between 1.5 and 2.5. And latest 12 months, like mentioned earlier, 3.1. And now Håkan will continue with the strategy execution.