Netel (NETEL) Q2 2025 earnings summary

Executive summary

• Net sales declined 7.7% year-over-year to SEK 789 million, mainly due to a high proportion of projects in the start-up phase, impacting both sales and profitability.

• Telecom division saw increased volumes and margin improvement, especially in Sweden and Germany, with one-off positive effects.

• Major contracts commenced in Norway, Sweden, and Germany, supporting future growth and expanding the customer base.

• Sale of loss-making Finnish operations completed, freeing resources and allowing focus on core and growth markets.

• High level of project startups and new customer wins across all segments.

Financial highlights

• Sales for the quarter were SEK 789 million, a 7.7% decrease year-over-year.

• Adjusted EBITA was SEK 41 million, margin 5.2%, negatively impacted by project startups and mix.

• Earnings per share for the quarter were SEK 0.11, down from SEK 0.30 year-over-year.

• Operating cash flow was SEK -62 million, reflecting capital needs for project ramp-up.

• Order backlog increased to SEK 4.1 billion, with most deliveries in 2025 and 2026.

Outlook and guidance

• Management expects improved cash flow and profitability as projects move from start-up to delivery phase, with positive cash conversion anticipated by year-end.

• Margin in Power segment expected to improve gradually, with new projects starting in 2H25 and production ramping in 2026.

• Confident in reaching new financial targets for the year, despite lower volumes in H1.

• Gradual effects from margin-enhancing measures implemented in 2024.

• Market demand remains strong, with delayed tenders now being released.