Netel (NETEL) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 increased 0.3% year-over-year to MSEK 893, with strong growth in Infraservices (8.4%) and Telecom (9.1%) in Norway and Finland, offset by a 17.7% decline in Power due to project timing and lower volumes.

• Adjusted EBITA for Q3 was MSEK 47, with a margin of 5.3%, impacted by lower Power volumes and less profitable project completions.

• Order backlog remains strong at MSEK 4,019 (BSEK 4.0), supporting future revenue visibility.

• Strategic initiatives in digitalization, operational excellence, sustainability, and organizational changes are ongoing to support midterm financial targets.

• New contracts and extended agreements, such as with Green Mountain and Telenor, demonstrate success in expanding the customer base.

Financial highlights

• Net sales for January–September totaled MSEK 2,534, up 4.1% year-over-year, with organic growth of 3.9%.

• Adjusted EBITA for the nine-month period was MSEK 106, margin 4.2% (up from 4.1% last year).

• Q3 EPS was SEK 0.17, down from 0.27 last year; profit after tax for Q3 was MSEK 8 (13).

• Operating cash flow in Q3 was MSEK 47, a significant increase from MSEK 2 in Q3 last year.

• Net debt at quarter-end was MSEK 757, with net debt/adjusted EBITDA at 3.2x; equity ratio improved to 37.8%.

Outlook and guidance

• Adjusted EBITA margin for full-year 2024 expected to be in line with 2023, with low net sales growth anticipated.

• Ramp-up in U.K. and Germany Telecom volumes now expected more in 2025 than 2024.

• Medium-term financial targets remain unchanged, with focus on efficiency and profitability improvements.