Full-year report January–December 2014

October – December 2014

  · Net sales amounted to EUR 352.3 million (345.8), up by 1.9%. At comparable
exchange rates net sales increased by 4.5%
  · Operative EBITA* amounted to EUR 17.7 million (15.4) or 5.0% of net sales
(4.5)
  · Non-recurring items** were EUR -6.7 million (-2.2)
  · EBITA was EUR 11.0 million (13.2) or 3.1% of net sales (3.8)
  · Net result was EUR 8.7 million (3.6)
  · Earnings per share were EUR 0.17 (0.05)
  · Operative cash flow* amounted to EUR 66.3 million (18.5)

January – December 2014

  · Net sales amounted to EUR 1,242.1 million (1,147.5), up by 8.2%. At
comparable exchange rates net sales increased by 11.1%
  · Operative EBITA* amounted to EUR 61.3 million (52.0) or 4.9% of net sales
(4.5)
  · Non-recurring items** were EUR -22.7 million (0.3)
  · EBITA was EUR 38.6 million (52.3) or 3.1% of net sales (4.6)
  · Net result was EUR 11.1 million (11.5)
  · Earnings per share were EUR 0.12 (0.14)
  · Operative cash flow* reached EUR 88.9 million (57.3)

Figures in brackets, unless otherwise stated, refer to the same period of the
previous year
* see definitions on page 13 and 18
** mainly IPO-related costs in 2014

Important events during and after the period

  · On 12 January 2015 Eltel AB announced its intention to list the company on
Nasdaq Stockholm
  · On 6 February 2015 Eltel AB completed the initial public offering of its
ordinary shares on Nasdaq Stockholm
  · Eltel’s financing was renewed upon the listing of the Company’s shares.
Interest-bearing liabilities amounting to EUR 330.9 million at 31 December 2014
have been repaid and replaced with a EUR 210 million loan facility. The new
facilities provide Eltel with more flexible and cost-effective financing for the
next five years. Net financial expenses would be somewhat more than half of 2014
level at current interest rates and assuming no foreign currency movements
  · Year-end leverage ratio with reduced debt level after IPO was 3.2 (3.3).
Adjusted for non-recurring items leverage ratio was 2.2 (3.3)
  · In January 2015 Eltel signed a five-year frame agreement with TeliaSonera,
covering the Nordic and Baltic regions. The new contract strengthens the close
cooperation between TeliaSonera and Eltel, renewing the contracted services
currently offered by Eltel to TeliaSonera, and expanding the geographical scope
to include new regions in Sweden
  · In October 2014 Eltel’s 50% owned joint venture Eltel Sønnico signed a five
-year frame agreement with Telenor in Norway. Norwegian Communication business,
with sales amounting to EUR 121.6 million in 2014 has been transferred to the
joint venture at year-end. In 2015 the business will be deconsolidated and 50%
of the joint venture’s net profit will be included as one-line item in EBITA

Comments from the CEO: “Solid fourth quarter and full year for Eltel”

2014 was a breakthrough year for Eltel in several ways. We report strong organic
growth – 8% for the full year. Our profits increased at a steady rate and our
operative EBITA margin reached 5% in the fourth quarter. Hence, the outcome of
sales and operative EBITA for the quarter and full year was in line or slightly
better than we anticipated in the IPO prospectus. One of Eltel’s strengths –
cash generation – reached record levels with an operative cash flow of EUR 89
million.

Even more important for us are the numerous new and renewed contracts, including
in particular rail contracts in Norway, the Fingrid and Caruna Power contracts
in Finland and substations in Poland and Norway. In Telecom, our joint venture
with Sønnico in Norway secured a new contract with Telenor. Last but not least,
the new five-year contract with TeliaSonera was signed in January 2015.

It’s great to see Power continuing to perform so well, capitalising on the
strong trend for grid investments in the Nordics and Poland. New wins of
substation contracts to Fingrid in Finland and 50Hz in Germany are encouraging
steps into new areas.

In Communication, it is very gratifying to see that the sustained growth in
areas such as fibre roll-outs is now also coupled with higher margins. We have
achieved this by increased efficiency in all main Nordic markets.

Out of our three business segments, Transport & Defence displayed the strongest
growth in percentage terms, albeit from a smaller base. Growth in 2014 came
mainly from several new rail electrification projects including a breakthrough
in Denmark. However, margins have been shrinking due to the altered business
composition.

Our listing on 6 February is crucial to Eltel. It will improve our credibility
in the eyes of partners and make us better known. The IPO also brings about
greater transparency, which is positive for both the company and our customers,
and improves our ability to attract the right talent.

The listing process has been intensive but interesting, and has enabled us to
have a more solid financial position and increased the ability to grow also
through acquisitions in the future. Our key focus in future will be to deliver
on our target to grow while raising margins and continuing to secure strong cash
generation.

–Axel Hjärne, CEO
Stockholm, 20 February 2015

For more information, please contact:
Gunilla Wikman, Head of Investor Relations
tel. +46 72 584 3630, gunilla.wikman@eltelnetworks.se
About Eltel AB
Eltel is a leading European provider of technical services for critical
infrastructure networks – Infranets – in the segments of Power, Communication
and Transport & Defence, with operations throughout the Nordic and Baltic
regions, Poland, Germany, the United Kingdom and Africa. Eltel provides a broad
and integrated range of services, spanning from maintenance and upgrade services
to project deliveries. Eltel has a diverse contract portfolio and a loyal and
growing customer base of large network owners. The number of employees is
approximately 8,600 and in 2014, Eltel sales amounted to EUR 1.24 billion.
Eltel’s share is listed on Nasdaq Stockholm since February 2015.