Netel (NETEL) Q1 2025 earnings summary

Executive summary

• Net sales increased 2.7% year-over-year to SEK 694 million, driven by growth in Power (Norway) and new customer contracts, with organic growth matching the headline figure.

• Adjusted EBITDA/EBITA rose to SEK 20 million (2.9% margin), up from 2.8% last year, while reported EBITA fell to SEK 14 million.

• Order backlog exceeded SEK 4 billion, reflecting strong demand and recent contract wins across divisions.

• The divestment of Finnish operations is progressing as planned, with completion expected in 2025 to focus on core markets.

• Revised financial targets set annual organic growth at 3%-5% and adjusted EBITDA/EBITA margin at 5%-7%.

Financial highlights

• Sales reached SEK 694 million in Q1, up 2.7% year-over-year; FX effects -1.1%.

• Adjusted EBITDA/EBITA improved to SEK 20 million (2.9% margin), with positive margin contributions from Telecom.

• Earnings per share was SEK -0.08, reflecting low volumes.

• Cash flow from operating activities improved to SEK -29 million, but remained negative due to seasonality.

• Net leverage ratio was 3.0x, above the 2.5x target.

Outlook and guidance

• Revised annual organic growth target set at 3%-5%, with adjusted EBITDA/EBITA margin target of 5%-7%.

• Net debt/adjusted EBITDA target remains below 2.5x.

• Stepwise margin improvement expected, supported by digital tools and strong order backlog.

• Power and Telecom divisions expected to drive growth, while Infra Services faces continued competition.

• No direct exposure to trade tariffs; indexation clauses and customer procurement mitigate risk.