Netel (NETEL) Q2 2024 earnings summary

Executive summary

• Achieved 7.7% organic net sales growth in Q2, with strong performance across all divisions, especially in infra services and power in Sweden, and telecom in Norway and Finland.

• Order backlog reached SEK 4.2 billion, supported by major new and expanded agreements, including a NOK 0.9–1.2 billion deal with Telenor in Norway and a MEUR 10 contract in Germany.

• Organizational structure shifted from country-based to divisional, driving synergy effects and improved resource planning.

• Strategic brand facelift and new logo launched to clarify vision and strengthen market position.

• Major contract wins and ongoing projects in infrastructure, power, and telecom, including a significant new agreement with Telenor in Norway.

Financial highlights

• Q2 net sales grew 7.7% year-over-year to SEK 927 million (861m); H1 sales exceeded SEK 1.6 billion.

• Adjusted EBITA for Q2 was SEK 44 million (4.8% margin), up 7.3%; H1 adjusted EBITA was SEK 58 million (3.6%), up from SEK 51 million (3.3%).

• Profit for the period increased 267% to SEK 11 million (3m); EPS improved to SEK 0.22 (0.07) year-over-year.

• Cash flow from operating activities increased to SEK 38 million in Q2 from SEK 29 million last year.

• Net debt at SEK 756 million; leverage ratio at 2.8–3.1x adjusted EBITDA R12, above the medium-term target.

Outlook and guidance

• No full-year estimate provided, but ongoing strategic initiatives, strong H1 development, and new contracts support continued financial improvement and a positive outlook.

• SEK 1.5 billion of the order backlog is expected to be delivered in H2 2024.

• Seasonality expected to drive stronger cash flow in Q4.

• Several new projects are starting in the summer, supporting future growth.

• Focus remains on margin enhancement, digitalization, and sustainability initiatives, including SBTi application.