Thank you. Hello everyone, and welcome to this podcast. My name is Casimir Lindholm. I am the president and CEO of Eltel. With me, I have our CFO, Saila Miettinen-Lähde. We'll today present Eltel's full year and Q4 report. I will start by going through the highlights of the fourth quarter on page three. Our operational performance continued to improve during the fourth quarter, leading to a positive operative EBITA for the full year 2020. This is a proof that we are on track with our transformation journey. Furthermore, our net working capital at year-end was at the historical low, and we were able to further reduce our net debt. We signed five large and important frame agreements, which confirms our position as the leading Nordic field service company. Of course, this provides a strong platform to build on in 2021 and beyond. Divestment of Communication Germany and the Swedish business area, Aviation & Security, represents half of decline in net sales for the period. COVID-19 also impacted net sales. I will talk more about that in a few minutes. In December, we extended our bank agreement until mid- Q1 2023. We now turn to page four and look at the agreements we signed. During the fourth quarter, we signed five major frame agreements. They all confirm our position as the leading Nordic field service company, and gives us a strong platform for the years to come. We can see some trends in these frame agreements as we have seen in the previous ones as well, that we are successful in larger contracts with larger customers. More and more of the volume is focused to the larger cities. On top of that, we have growth in the coming years in 5G. The good part of frame agreements, of course, is that it's repetitive business. We do these over and over again from day to day, from month to month, year to year. It's, in that sense, predictable order intake and also, the work we are doing is easier to plan. We are, for a large part, in a stable Nordic market. Going now into 2021, we have almost 90% of the net sales in the Nordic countries. Also, these frame agreements are good in the sense that it's a low net working capital business, and that is, of course, helpful for the cash flow in the coming years as well. Let's turn to slide five and look at how COVID-19 impact our business in 2020. Partly, we could see lower investment levels by certain customers. We could see postponed projects in areas where COVID-19 had a larger impact in the society. We could also see some delays in our project execution, either due to the fact that we were not allowed into end customer premises, or if we ourselves experienced COVID-19 among our own staff, then, of course, we had to stop and put the teams in quarantine and so forth. There were also local restrictions on different levels. I would say, we were hardest hit during 2020 in Poland and Germany in this aspect. Partly also impacted in the fact that we can't move our Lithuanian workforce cross-border as smoothly as we have been used to. In that sense, negative impact on mainly then the EBITDA side. On the other side, we got favorable payment terms and releases from governments in our respective countries. That impacted cash flow and net working capital in a positive way. We can move to page five, and that is the bubble picture explaining where we are in the large projects in High Voltage. We are looking to finalize 10 large capital-intensive projects in High Voltage and Power Transmission International in 2021. These bubbles have moved a bit to the right, mostly due to COVID-19. The biggest bubble, the black one, is Reiselandet. That's a large project in north of Norway. That one we have operationally finished. That was the biggest project and, in that sense, also the largest risk we have had in the project portfolio. All in all, we will see in 2021 that we can close most of these projects under the four last ones will be then continuous business in our Poland, Polish High Voltage business. We are coming closer to the end of closing both in financially, legally, both in Norway, the High Voltage project there, and then also the projects in Africa and in Georgia. In that sense, the exposure is going down month by month. Let's move to page six, sustainability. First of all, safety is always the number one priority in a company like Eltel, and we have been working systematically with a group-wide program to reduce work-related injuries. The lost time injury frequency rate decreased significantly from the previous year to 4.9, and I'm pretty sure that we are in a market-leading position with that number. It's an all-time low number for Eltel Group, but of course, we'll continue to strive for a zero goal going forward. We have also been successful in reducing our carbon footprint, much thanks to improved route planning, which of course, is good for efficiency overall. It's, in that sense, a win-win situation. However, we are not yet satisfied, and we have created a new Sustainability Plan for 2021 to 2023, which will take our sustainability work to the next level. With that, I now hand over to Saila as we turn to page- Eight. Eight, sorry. Yes. Thank you, Casimir. Time to look at the numbers. As Casimir already mentioned, we showed a very substantial, nearly EUR 20 million improvement in profitability in the fourth quarter, despite the fact that our net sales did again decline. In the last quarter of 2019, the results that we had were quite heavily impacted by overcapacity and restructuring costs in Sweden, as well as write-downs both in Sweden and High Voltage relating to several older projects. In contrast, in 2020, our fourth quarter demonstrated clear stabilization of our business and thereby also a positive operative EBITA. In terms of numbers, our net sales for the quarter amounted to EUR 279 million, which is 17.8% down from the EUR 339 million the year before. Clearly the biggest impact came from the divestments of German and Polish communication businesses, as well as the Aviation & Security business from Sweden. The remainder of the decline came mainly from the already mentioned COVID-19-related postponements, particularly in High Voltage Poland, as well as in investment cuts, which hit primarily Norway, but also partly Sweden. Our operative EBITA for the quarter improved to EUR 4 million from -EUR 14.9 million the year before, and the operative EBITA margin thereby amounted to 1.7%. The operative result, i.e., EBIT, was -EUR 1.9 million, and although this was still negative, this shows an improvement of nearly EUR 2 million from the year before. Cash flow from operating activities amounted to EUR 51.2 million, which reflects the seasonal production build-up pattern, and also then the strong year-end cash collection. In part, COVID-19 actually had a positive impact here through better payment terms that we have received from certain customers. The change in net working capital also had a positive impact on cash flow, as already mentioned by Casimir, the net working capital was at a historical low level at the year-end, and that was -EUR 25.1 million. With this, let's move on to slide nine to look at the net sales by segment for October, December. In segment Power, our net sales for the fourth quarter were EUR 84.9 million, which is 9.2% less than the year before. Organically, the decline was -8.7%. Again, the decrease is largely due to lower activity and the COVID-19-related delays, primarily in High Voltage and particularly in Poland. Then we also saw a decline due to the ramp-down of projects and service operations in Sweden. Finland, by and large, has had a good development in terms of contract extensions. However, showed a slight decline due to the completion of certain large projects during the period. Moving on to Communication, the net sales amounted to EUR 143.5 million, which shows a decrease of 21.5%. Organically, the decline was 12.5%, which again shows that the major part of the decline came from the divestments. Other factors, again, included COVID-19 and the loss of a large service agreement in Sweden. Also, there was a contribution by certain sizable projects in Denmark coming to an end. On a clearly positive note, we can say that we saw good volumes both in fiber and 5G in Finland. The Other segments, we saw net sales amounting to EUR 1.3 million, and of course, as it has been told already before, these relate to the remaining projects in Power Transmission International. Let's move now to page 10 and look at the EBITA for the segment in this Q4. Segment Power had an operative EBITA of -EUR 2.4 million, which, although still negative, is more than EUR 9 million better than the year before. With this, the operative EBITA margin was - 2.8%. As we already noted in connection with our third quarter report, Sweden and High Voltage are gradually recovering, and the risks in these units are reducing. This said clearly, looking at the numbers, their performance still remains unsatisfactory, and we need to keep on working. In Smart Grids, we saw quite good performance, but as we already expected, the volumes are still quite low. Finland performed in line with previous year, despite the trailing costs that we saw following the completion of two big build projects. In Communication, the fourth quarter operative EBITA amounted to EUR 6.4 million, which is more than EUR 4 million above the number the year before. In that also, we had a -EUR 1.7 million impact from the divestment. The operative EBITA margin was 4.5%, which clearly also exceeds the 1.1% that we saw the year before. Looking at the countries, in Norway, the absolute level of EBITA came down a bit due to the investment cuts that we saw in the country. However, their margins remained at a good level. In Finland, as said, we saw good improvements in net sales and also improved margins due to big production efficiency. Well, all this said, the biggest improvement actually came from Sweden, although at the same time it has to be said that Sweden is still in the early stages of its improvement, and the result as such in the country is still far from our targeted levels. In Other, the operative EBITA was EUR 1.7 million, which is up from -EUR 0.6 in 2019. It has to be said that rather than this improvement coming from the business itself, the increase relates to releasing these provisions after received several months of payments relating to the remaining projects. This concludes the summary of the fourth quarter, and we move on to page 11 to look at the full-year figures. To start with, I think overall it has to be said that the underlying trends in our full-year figures are quite similar to those already reported for the fourth quarter. This said, our top line for 2020 was EUR 938 million and showed a decline of 13.8%. Our operative EBITA improved significantly, one could say, to EUR 11.4 million, which is almost EUR 23 million better than the -EUR 11.3 million that we saw in 2019. With this, the operative EBITA margin came to 1.2%. The operative profit for the year was EUR 24.8 million, this included a EUR 20.4 million gain from divestment of the German Communication and Aviation & Security. Our cash flow from operating activities was EUR 49.4 million, this included a change in net working capital of almost EUR 17 million. As already noted, the net working capital year-end was at -EUR 25 million. Finally, one of our key targets in our financial transition clearly has been to improve our balance sheet. At year-end, our net debt was at EUR 67.4 million, which is down by EUR 56 million from EUR 124 million the year before. I think we can say that we're quite proud of this development, which clearly shows that we have now reached healthy levels in our debt. I will now move on to slide 12 to look at net sales by segment. In segment Power, our net sales for the year were EUR 329.8 million, which is EUR 12.7 million less than the year before. In line with our strategy, part of the decrease clearly comes from the reducing exposure to big capital-intensive projects. As Casimir already mentioned, for example, this is the big Norwegian Reiselandet projects being completed operationally in November and remaining or other big projects are coming to an end during the course of this year. Other key factors, again, repeating myself, relate to COVID-19 and ramp down in Sweden. In Smart Grids, again, volumes were still low, as expected, with certain old projects coming to an end. The new project in Sweden still remains in its early stages, meaning that it didn't really yet impact the net sales. In Finland, we continue to be the market leader, our net sales increased thanks to both growth in build projects as well as then contract expansions. In Communication, net sales amounted to EUR 549.9 million, showing a decrease of 14.8%. Organically, the decline was 4.5%, which again shows that the divestment played a big part impacting EUR 59.6 million on the negative side. The full year net sales in Sweden and Norway was clearly driven by similar factors as in the fourth quarter, with Sweden suffering from low volumes, partly due to loss of the service frame agreement, and both countries being actually impacted by reduced customer investments. On top of that, in Norway, the foreign exchange rates gave a -EUR 17 million impact. The decline that we saw was luckily partly offset by the high fiber and 5G volume deployment, and also increased volumes in Denmark. In other, the net sale amounted to EUR 13.3 million, and again, related to the remaining Power Transmission International projects. Let's now move on to page 13 and look at our EBITA development by segment. In 2020, our operative EBITA in Power was -EUR 9.5 million, which is, however, EUR 8 million better than last year or the year before. The operative EBITA margin came to - 2.9%. Through the year, we can say that our focus has been on risk reduction and improved control, and we are seeing those actions now impacting positively both Sweden and high voltage. As said, the results still remain negative, which shows that we still have a long way to go. While Finland still also had its fair share of challenges during the year, it nevertheless showed positive productivity development along with a reduced risk level. In Communication, operative EBITA for the year amounted to EUR 24.4 million, showing a EUR 6.3 million increase from 2019. The effect of the divestments in this figure was -EUR 4.7 million, and the operative EBITA margin was 4.1%. As in Q4, Norway continued to deliver good margins for the full year also, but we already mentioned the decreased volume due to COVID-related investment cuts by customers. Yes, the FX effect also impacted the actual operative EBITA. On the positive note, Finland did improve its profitability through volume growth and better production efficiency, and Denmark was largely in line with 2019. Slightly falling behind in the second half of the year, partly due to a write-down that we already reported in the third quarter. Year-on-year, the biggest improvement, again, in operative EBITA came from Sweden, which, as already noted, still is far from being at the targeted levels and needs to keep on working to improve the profitability. In other, the remaining Power Transmission International projects showed an operative EBITA of EUR 4.5 million versus -EUR 0.8 million the year before. As already noted, we target to ramp down the remainder of the PTI projects during the course of 2021. This concludes the summary of our financial performance in the year, and this, as it happens, is the very last time that we reported Power and Communication as the segments. We will from now on, as we already reported in late 2020, report a new segment structure based on the four Nordic countries. Let's take a look at the new structure on page 14. As already mentioned, the new segments will be the four Nordic countries of Finland, Sweden, Norway, and Denmark, with the remainder of the business being reported outside segments in other business. More precisely, in each of the country segments, we will report all Power and Communication business in the respective countries, while other business includes operations in High Voltage, Smart Grids Germany, Lithuania, and whatever is left of Power Transmission International and rail operations. All in all, this other business has less than 15% of the operations at present, and the volume of these will also continue declining as we move forward with our Nordic strategy. The divested Polish and German Communication businesses are in other business until their divestment in Q4 2019 and Q2 2020 respectively. Let's now move on to page 15 to take a look at the new segment split in net sales. As you can see from these graphs, on the left side, the current reporting structure, and on the right side, the new reporting structure. You will notice that the new country segments will be reporting a more evenly split between the segments. The new segments also do reflect the Eltel organizational structure better than the previous ones. With this, we do believe that the change reduces complexity. It is also a more balanced way of reporting and also more transparent in terms of our operations throughout the group. With this, we do believe that while, as said, it follows more closely our operational setup, but we do believe that this also benefits the shareholders and other investors or interested stakeholders. On the following page 16, we will briefly show with graphs how the net sales and EBITA graphs look like with the old and new structures. Again, as already noted for the sales, these graphs clearly paint a picture where the segment sizes respectively and compared to each other are much more evenly split. Also with this gives a more transparent picture of the operations at large. These graphs basically sort of summarize real data with the new structures, both from 2019 and 2020. Let's still take a brief look at page 17, where we show a glimpse of how the segment reporting page will look like in Q1 2021 and onwards. On the right-hand side, like I said, there are some little picture snapshots of the reporting pages for each segment. In this case, the examples come from Finland and Sweden. The information that we will cover on these pages going forward will include then net sales, net sales growth percentage, operative EBITA, operative EBITA margin, number of employees, also net sales split between Power and Communication, i.e. the old segment, and commentary on deviations from the comparative period. Obviously, this is still something that is pending. You will see the results of this change more thoroughly after the Q1. This is just to start with where we are headed in our reporting. This concludes the financial part of our presentation. With this, I will now give the word back to Casimir. Thank you, Saila. We can move directly to page 19 and have a look at where we are on our transformation journey. In 2021, we'll focus a lot around operational excellence and improve the margins. That is priority one. At the same time, we are focusing on upselling to our existing customer base and, of course, implementing all the frame agreements that we have won in 2020 to make it as good as possible. We'll continue to restructure non-performing businesses, including potential divestments. In 2021, as mentioned before, most of our ongoing projects and businesses outside the Nordics, except for High Voltage Poland, will be closed down during 2021. That is where the focus is now short term and, of course, continue to strengthen the financial position of the company. When this is done, from 2022 and onwards, we'll focus on investing in sustainable, profitable growth, partly through organic growth and partly through possible M&As. We are, in that sense, roughly halfway through the journey and getting closer to fulfilling the Nordic strategy. We can move to slide 20 and look at the focus areas. There is nothing new in this. You have seen it before. A lot of focus on the operations, and then, as mentioned before, to take care of the last projects we have outside the Nordics and also focus on closing financially and legally units outside the Nordics, except then for Poland, where we focus on a turnaround internally. At the end of the day, when we do this, of course, profitability increases, quality increases, and also the customer satisfaction is going the right direction. We can see already now a lot of positive movement in the KPIs that we follow internally. Let's move to page 21. We have come quite a long way with our turnaround and what has happened within Eltel over the last couple of years. We have improved the control of the business, and we have continued good market situation in the Nordics, driven by fiber and 5G on the Communication side, but also cabling, for example, in Finland in Power. This gives me the confidence to say that we will further strengthen our performance going forward. Highlighting this, we are introducing financial guidance for the year, stating that we foresee our operative EBITDA margin for 2021 to improve on 2020. Let's move to page 22, and let's look at the updated group targets. Encouraged by the progress made, also looking at the market, we have updated our targets for key financial indicators and aim to achieve them by the end of 2023. Those are Group EBITDA margin 5%, annual growth in the Nordics from 2022 onwards between 2% and 4%. The leverage target is unchanged, of course, dividend payout subject to leverage target achieved going forward. With that, we will move to page 23 and open up for any questions that you might have. Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Once again, that's zero one to ask a question or zero two if you need to cancel. There'll be a brief pause now while we register any questions. Okay, there seems to be no questions from the phone at this time, so I'll hand back to our speakers for the closing comments. Okay. If there are no questions, we will end this call and thank you for joining, and thank you for listening. If there are any questions later on, please don't hesitate to be in contact with us. Thank you very much. Thank you.
Loading workspace