Hello everyone, and welcome back to ABG Investor Days. My name is Adrian Giliani, and I'm an equity research analyst here at ABG, responsible for covering Eltel, among others. I will be moderating our next presentation, which will be given by the CEO of Eltel, Mr. Håkan Dahlström. He will give a roughly 20minute presentation and then we'll have time for some Q&A after that. With that being said, Håkan, please go ahead. Thank you Adrian, and good afternoon all of you. Yes, my name is Håkan Dahlström, and I've been the CEO of Eltel now since August last year. We are the leading service provider for critical infrastructure in the Nordic, and with that, we're enabling renewable energy and high-performance communication solutions. Now, being a little bit more than 20 years old, we have a great position and a great foundation for further development of the critical infrastructure in the Nordic. What we do in reality is that we design, plan, build, but also maintenance and take care of infrastructure over the life cycle. This is what we do for telecommunication infrastructure and power network. Our customers is normally a telecom operator or a network owner. We have a full-fledged portfolio of offerings, both in communication and power, and very much as the rest of the society, also for us, sustainability have become a core of many of our discussions and is sort of something that is present with us daily. So the main part of our business are in the Nordics, but we also have operations in Germany, Poland, and Lithuania. And during last year, we had a net sales above EUR 800 million, and we are 5100 people inside our organization. But we are also very much dependent on subcontractors and partners to fulfill the project and the services that we are delivering to our a little bit more than 2000 clients in this area. As you can see here on the lower part, our largest market when it come to net sales is Finland, where we have a large portion of our power business, but also a first position, I would claim in the market when it comes also to the communication. Sweden and Norway, we are very active in the communication area, not so large yet in the power segment, and in Denmark, a more balanced portfolio between communication and power. We then look at the customers that we all have. We have, I would claim, all the large players, both in communication and power, as our customers, and this is a very long, long-term relationship that we have with them. Most of them we have had for more than 10 years. It's a long-term setup already in the commercial contract, where for many of these, we have frame agreements that are many years. 4 years is not unusual, but somewhere between 2 and 4, and more or less all of them also have a possibility to do an extension. We have a handful contract that doesn't have an end date, so as long as we and the customer are happy with the relationship and the performance, it is prolonged every month, more or less, so it is an open end, so to say. When you have that type of contract, the workflow and the volume in our business is based on small work orders, so that's the normal situation for us, is that a new assignment in one of the frame agreement is not extremely large, but it is just an extension of something we do or in a new geography. So a very high number of work orders, each of them not so large. But as you can see here, you recognize all of these companies and logotypes, and they are actually, as I would claim, the backbone of critical infrastructure in the Nordics. So it's great to have this very strong customer base. But if we zoom out for a moment and look, okay, what is actually happening in this area where we are operating? You can see that there is very strong mega trends. It's about digitalization, it's about electrification, and I think everyone is aware today that we have, as a society, underinvested in the power sector of all the Nordic countries. The demand of more qualified communication solution for more or less everything is also high up on the agenda. We see that the way of working that we all are doing is becoming more and more remote, and this hybrid way of working is impacting also this type of infrastructure. And then we all have the same challenge when it come to our climate and the fight for a better, sustainable society. This gives a lot of drivers that has a direct impact on the demand side of our business. As you can see here, a lot of things is happening, and they all, in one way or another, increase the demand on infrastructure. On our side, we divide these drivers or this demand from the market into 2 business areas, so we operate in a power segment and in a communication segment. If we open up a little bit around those, you will find our sort of offering portfolio. So within the communication area, we have worked with fixed telecom for many, many years. Today it's all about fiber. We have no revenue anymore based on the copper network, so it's fiber. Fiber is quite mature as a business in Sweden, in Norway. We still have more to do, but not the same volume as it has been. In Finland, however there is a peak just now in the deployment or the rollout of fiber. So in the Finnish market, there is more a problem to create new capacity because the demand is so high that we can't really fulfill it. In the mobile area, we are, of course, helping our telco operators to do services on the existing infrastructure, but also building and modernization of the existing network into 5G. This has, during this year, lost a bit of speed in that, but this is something that has to be finalized. I see it more as a delay. We will have a little bit more work in this area next year due to that this year have been a bit slow. But then we also see that there is new solutions in communication, and you could say that they have been here for long, but I think that the fixed wireless access is something that we see taking market share in the rural area, because everyone needs an internet access, and in some areas, there is no other solution than a fixed wireless access. On the indoor, and we have in the mobile telco business, worked with indoor coverage, I mean, since we started to roll out GSM in the beginning of the 1990s. But what is new in the indoor area is that we have a new type of customer. In the past, you were not allowed to have your mobile phone on if you were at a hospital. Now, you are supposed to have your mobile phone on because you are dependent on that, also in the situation as you are in when you are at the hospital. So here we get a new type of customer. It can be the public sector, meaning owners or managers of hospitals, but it also in the normal industry like manufacturing, where they take their own core business into Industry 4.0 then they have a need of a much more qualified communication solution. And we see now more and more interest coming in this, that businesses and public services, they need a private network and a very high-quality infrastructure for their core business. In the power side, we have sort of the classic business, as we always have done, high overhead, overhead lines or substations, but we also see now that the whole transformation towards green energy is impacting this area in, for us, a very positive way. So it's a lot of initiatives and a lot of investment money that goes this direction, and for us, it means, of course, then higher demand. So this we particularly see in Finland and in Poland. An area that I would say is equally interesting for all Nordic countries is the e-mobility, or meaning that we have an electrification of the logistics and transport. And here, we believe that our role is to be on that side of this, that is a bit more heavy equipment, meaning that the normal type of charger that you have at home is not what we really work on. We are more on the DC side of this and more for heavy trucks. Here we see that there is a great possibility going forward, where more and more companies are now changing the fleet toward electrification also on the trucks. And then, of course, everything about renewable energy. Here we see just now that solar and solar in the utility size of solar is the most interesting and have most attention from investors just now, and we are very active in that area. There will be, of course, a lot of rooftop installation of solar. We might not be the... That might not be the perfect match for us. We believe that Eltel will be more competitive in the area where this is a utility scale, meaning that it is a quite complex infrastructure that should be built, and, and there we see great interest from customers in all countries just now. So very much happening in this area. But then looking a little bit of how do we—what type of business model and what type of work are we actually doing here? So, we have a foundation of maintenance and services to keep this infrastructure fresh and, and up-to-date. But then, of course, there is step taken, you go from one generation to another generation. I think here, the mobile network just now is one such example, where everyone is transforming the existing network into 5G. And then we have this project delivery. In a project, it's more about establishing an infrastructure. It could be a solar park, but it could also be a mobile network or fiber to the home. So all of those, we are active in both within power and communication. But as you can see on the right side, this, a bit, taking care of the infrastructure over time is a big portion of everything we do, and I think that is a good way for us to be able to keep a high utilization of our resources in a large geographic footprint, because you need to have people out there. I normally, usually, when I speak to our leaders and people within Eltel, I think this is very important to remember that, I mean everyone can do a PowerPoint, but then you have to build something out there, and then you need Eltel, because we have the people out there. We have the boys and girls out there that actually are doing it in real life... Coming back a little bit to market size and demand, I'm quite optimistic about the market outlook, even though within communication, as I said, fiber is, to a large extent, down in Sweden, in Norway. We see a great demand in Finland just now. But overall, there is, in our society, such a high demand on communication solution, and this infrastructure has to be taken care of. It will always be expanded, it will always be upgrades of this, so this is a long-term game, and I've seen that competitors after competitors are leaving that area. But we think that we have such a leading position in this, and we will be here for the long run. Also, in the power, where we have reason to strengthen our capability in Norway and Sweden, we see that in all four Nordic countries, there's a really large demand, and we expect that this in this area, we will find significant growth going forward. If we summarize all of this, despite the downside, as I see in the classic market part of the communication, remember that we see that public sector, like, for care or healthcare or for logistics, we see when public sector is coming into communication, also in that area, there is growth, but it is larger growth in the power segment, when so many are investing in generating new green energy. And even though there is, for at least for now and for some time, a bit of a standstill in the wind industry, we believe that it's very difficult just now to get the business case together, building a wind park. But solar is very active, and other alternative, like energy storage and stabilization of the grid, is very attractive. So for us within Eltel, to be able to improve our financial performance and reach our target that you see on the right side here, we have a very clear agenda. We developed a strategy for a little bit more than a year ago, and we have these six bullet on top of mind daily, I would claim. And this very much about improving the efficiency and the profitability of the current, as I call, classic business, and here, price increases and protection towards inflation is, of course, a very important cornerstone. But then also, we need to broaden the customer base, and I mentioned a few example here that it might be in from the healthcare. We are building indoor coverage as we speak in many hospitals, but also for different logistic solutions and also for Industry 4.0. So I see that we will have many new customers. They are not such a large customer as our traditional telco operators, but this will be a great contribution to that communication business. But then also in what I mean is an adjacent market, and here we have solar, or we have EV mobility, or we have BESS. The capability and the competence that we have can easily be used in these new areas, and by that, generating new revenues with a higher margin in a sector where we see that we can, in a very positive way, contribute to the development of the society. So this is a very exciting things, and also create a lot of positive energy in the company. Due to that, everyone understands that this is something that has to happen in the society and people are motivated by being a part of it. Then within Eltel, I think that we have to admit that our commercial skills have not been state-of-the-art, and I think we are very aware about this today. We work on this. We were a bit unprepared I would claim, when the inflation hit us, hurt us, as it did during 2022 and also to some part during 2023. We are now shaping up this, and I think we are a bit optimistic when looking forward, but this is something that we have to have high up on the agenda, sort of taking care of the commercial side of our relationship also. And then, of course, we have to look a bit on our position. Do we have a reason to expand in the value chain? Can we find new business model that are sort of creating larger value for us? And we see those opportunity, and we are now addressing that also. I mentioned in the beginning here, that sustainability is something that is higher up on the agenda today than it has been in the past, and this is becoming very clear now in the customer discussions. So in the past, this was something that was mentioned a little like a footnote, and no one really took it so seriously. Now, this start to become a real competitive edge that we have been engaged in this area for quite a long time. More than 60% of our customers have committed to this Science-based target indicator and that means that they need also to buy from providers that are committed and are a part of that system. Here, we believe that this is something that will become even more important going forward, but we see that already today. I think that's good for us; it's good for society. Then a few highlights from the Q3 that we reported here in beginning of November, and I'm happy to say that we see a total growth of 3%, but in local currency, in our segment here, we do more than 8%, and I think that's good, and we are very optimistic about the future here. This growth is driven very much by Finland, Denmark, but also Sweden is doing great here. Norway, we have a setback since Q4 last year in Norway, and we are still having sort of a bit of pain from that. And that also you see in our numbers, that the, the Norwegian numbers are weak, and, and, that's something, of course, that we are looking at and working hard on. But it will take us a bit more time until we have Norway where we want them to be. Adjusted EBITDA for the Q3 was EUR 5.9 million, and that's nice to see an improvement from the year before, where we are—we are at EUR 4 million. But also here, I will highlight that, the high voltage Poland, that has been a problem for us during many years, they are now in the Q3 as black numbers. And are we happy with black numbers? Maybe not, but being at a loss-making unit inside the group for so many years, it, it's great now to see that the new strategy that we have formulated for them, where we have sharpened the focus and, and changed the scope of the business we're gonna do forward, that we now see that also pay off there. So all unit contributed to the positive result, and I think that's good. And then, as I mentioned, Norway, more to be done in Norway. We have done the second wave of downsizing in Norway, and we believe now that the organization are in balance with the demand that we see in Norway for the end of this year and also for the next year. A lot of positive development in these, what I call new businesses, and on the image here on the left side, you see one example of this. This is a solar park in Finland, just outside the capital area of Helsinki. The site is called Lohja. Here, this picture is, like, 2 to 3 days old, and we have now even though there is snowing in the area, we are now installing solar panel. This park will be the size of 10 MW. So this is the largest installation that we have done, and we believe that we're gonna be ready somewhere during next summer and expect this to produce 10 MW of energy in the later part of next year. So very, very positive development, and we also see that the level of interest that is in the market for this type of solution is really large. So more to come. Looking then at the group numbers of the Q3, we see an increase on net sales, as I mentioned. I'm really happy for that. This is purely local organic growth, so really nice to see. But you also see that on the lower side here, that we have had three very challenging quarters due to the problem that we have had and still have a little bit of in Norway, and then power services in Finland, as we have talked about before. But now we feel that we get the result visible from all the good things that we are doing, and I would claim that we do the right things, and soon we will see also more result from that. And this is an indicator for you, how far we have come in the different areas when they sort of our measurements and how we mitigate those financial challenges as we had for a year ago. With that said, I will claim that there is a very good reason to invest in Eltel. We are the one that when it comes to power and communication, we are the one that actually gonna build this infrastructure for the future, helping the society to come into a more sustainable situation where we all can benefit from green energy. I believe everyone is aware of today that it has been a many, many years of underinvestment in the energy sector, and now it just has to change. We don't have any alternative. This is something that just have to happen. Everything we build, everything we, design and take into use in the society today are connected. It will be more communication, and here, Eltel is perfectly positioned for helping the society, both with the power side and the communication side. With that, I think I've used my time, Adrian, so over to you. Yeah, no, that was very interesting, and thank you for your presentation. I'll go straight ahead with a few questions. I guess, first of all, you mentioned that you have previously struggled with some issues from high inflation. Mm-hmm. Then you talked about, as you put it, needing to improve your commercial skills. Mm-hmm. We have seen an impact on this on the margins, but can you just give some more input on what that actually means in practice, improving the commercial skills? Yes. I think having a very long relationship and having very many contracts is very long. It is so that a big, big point, but a big portion of everything we do is based on commercial terms that have been agreed for quite a long time ago. Mm. And to have a very many large customers is also a bit difficult when you are dealing with the commercial terms. But we have to become better and I would claim we have done that, and it start to be visible in the numbers, that we have to be able to argue for higher prices due to inflation, fuel prices. We have a very high price increase on asphalt, on steel, everything that we are using. This has also to be recognized by our customers, and we have now been able to sort of share the burden with our customers, meaning that we have been able to agree about higher prices also in existing contract. Then many are talking about indexes, and I would claim that indexes is, to have indexes is a con in a contract is obviously something you have, but it doesn't help you to solve the whole problem. It's just a part of it. The many things are developing in a different way than the indexes that you might have in just, in that specific contract. Mm. So for us, I think it's now we are a bit more than 20 years old. It's time for ourselves to grow up and set our own agenda and clear out where we are heading, and that's also why these new businesses is so important for us. Mm. Perfect. I think we have time for one more question, and I was excited by the new growth areas that you talked about with the renewables, for example, and e-mobility, and I think you did well to illustrate the growth potential of those markets. Can you talk about the profitability side of those contracts? Does that give you some sort of extra possibilities to increase profitability in those areas as well? Yeah. In what I call classic business- Mm ... that when we have power and we have communication in this long relationship, we are sort of exposed for being commoditized. Mm. That everything is very much about price. In the adjacent business, it's much easier to have a more market-oriented price. Mm. Of course, we see an opportunity to do better margin in everything of this, what I call the new business. Mm. is one of many reasons to go in that direction. So yes, and we see that already now, that there is the customer in the new businesses, they are... Priority one is that you can deliver, that you have the competence, that they can trust, that you can do that on time. Mm. And then, of course, price is always a very important question, but it is not question number one. Mm. In the classic business where we have had customer relationship for more than 20 years- Mm ... unfortunately, the discussion is very much about price. Mm. That is not the case. So how can you convince the customer that you could build a solar park, that it have the size of 50 MW or 100 MW? Mm. That's another question and that, I think that is a more interesting question for us to spend time on. Yeah, Perfect. I think that's a very good note to end on. And with that, being said, I'd like to thank you for your time and for your presentation.