Q3 2024 Netel Holding AB (publ) Earnings Call Transcript
Key Points
- Netel Holding AB (FRA:2CR) reported a 0.3% increase in net sales, driven by strong growth in Infra services and Telecom in Norway and Finland.
- The company's order backlog remains strong at 4 billion SEK, reflecting its solid market position and alignment with megatrends like electrification and modernization of infrastructure.
- Netel Holding AB (FRA:2CR) has implemented strategic initiatives, including digitalization projects and organizational changes, to enhance future growth and sustainability.
- The company successfully signed a contract with Green Mountain Data Center in Norway, marking an expansion into new customer segments.
- Telecom division showed improved profitability, with a 9% organic growth in sales, driven by service agreements in Norway and fiber rollout in Finland.
- The Power division experienced a significant decrease in sales by over 17%, attributed to the project-driven nature of the business and fewer project completions.
- Adjusted EBITA margin decreased to 5.3% from 5.7% year-over-year, impacted by lower volumes in the Power division and less profitable projects in Infra Services.
- The company faces increased competition in the Infra services market, which has affected profitability.
- Sales in the UK have decreased by 35% year-to-date, despite a strong push for fiber rollouts, indicating challenges in winning contracts or organizational issues.
- There are ongoing strategic initiatives that require time and investment, which may delay immediate financial improvements.
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Welcome to our presentation of our Q3 results, my name is Reuterskiöld and I'm President and CEO of Netel, with me today i have as usually Fredrik Helenius, our CFO. Let me start with some highlights from the report net sales increased by 0.3% driven by strong growth in Infra services and Telecom in Norway and Finland. Infra services grew 8.4% and Telecom 9.1%. Power decreased top line by over 17% which is reflecting to the product driven nature of the business. In power comparative figures were impacted by the high volume of projects completed in the third quarter of '23. Since the products in power are often major sales can vary between the quarters depending on which products are completed or big deliveries of material during each period. This also has an impact on the adjusted EBITA margin which decreased somewhere to 5.3% from 5.7% compared to the third quarter last year. However, the adjusted EBITA margin increased from the previous quarter with 0.5% points from 4.8%. Our order backlog continued to develop well and
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