Netel (NETEL) Q3 2025 earnings summary

Executive summary

• Q3 results were significantly impacted by project write-downs in three subsidiaries, lower sales, and delayed project starts, leading to a sharp drop in profitability and negative adjusted EBITDA/EBITA for the quarter.

• Strategic actions include divesting underperforming UK operations, restructuring and consolidating subsidiaries, and implementing a SEK 40-50 million cost-saving program.

• Expansion efforts target Sweden, Norway, and Germany, with a focus on new customer segments, especially in the power sector.

• Order backlog increased to SEK 3.84 billion, supporting future revenue visibility and growth.

Financial highlights

• Q3 sales were SEK 654 million, a decline of 17.8% year-over-year, with adjusted EBITA/EBITDA at SEK -53 million and SEK 59 million in write-downs.

• Operating cash flow for Q3 was SEK -44 million, mainly due to project ramp-ups and lower volumes.

• EPS for Q3 was SEK -1.39, reflecting significant profitability challenges.

• Cash and available funds at quarter-end totaled SEK 361 million.

• Leverage ratio increased to 6.3x adjusted EBITDA, above target due to write-downs.

Outlook and guidance

• 2025 guidance: revenue of SEK 3 billion, adjusted EBITDA/EBITA margin of 1.5%-2% (including write-downs); 4%-5% margin for core operations.

• Growth and margin improvement are anticipated in 2026, supported by cost-saving measures and a SEK 2 billion order backlog for 2026.