Second quarter
Continuing operations1

Net sales decreased 7.7 per cent to MSEK 789 (854)
Adjusted EBITA amounted to MSEK 41 (48), with an adjusted EBITA margin of 5.2 per cent (5.6)
EBITA amounted to MSEK 31 (42), with an EBITA margin of 3.9 per cent (5.0)
Operating profit (EBIT) amounted to MSEK 29 (41), with an operating margin of 3.6 per cent (4.8)
Profit for the period amounted to MSEK 5 (15)
Earnings per share for continuing operations before and after dilution declined to SEK 0.11 (0.30)
Earnings per share including discontinuing operations before and after dilution rose to SEK 0.52 (0.22)
Cash flow from operating activities declined to MSEK -62 (41)

January-June
Continuing operations1

Net sales decreased 3.1 per cent to MSEK 1,483 (1,530)
Adjusted EBITA amounted to MSEK 61 (67), with an adjusted EBITA margin of 4.1 per cent (4.4)
EBITA amounted to MSEK 45 (60), with an EBITA margin of 3.0 per cent (3.9)
Operating profit (EBIT) amounted to MSEK 41 (57), with an operating margin of 2.7 per cent (3.7)
Profit for the period amounted to MSEK 1 (12)
Earnings per share for continuing operations before and after dilution declined to SEK 0.03 (0.25)
Earnings per share including discontinuing operations before and after dilution rose to SEK 0.35 (0.05)
Cash flow from operating activities amounted to MSEK -91 (-17)
Net debt excluding leases increased to MSEK 800 (667) and net debt excluding leases/adjusted EBITDA amounted to 3.4 (2.6)
The order backlog increased to SEK 4.1 billion (3.8)

1 The Finnish operations were divested on June 30 2025 and are reported separately in this report as discontinuing operations.

Significant events during the second quarter

Sale of Finnish operations completed on 30 June 2025 and has no significant impact on Netel’s financial results and position
New framework agreement in Power with the Norwegian electricity company Glitre Nett Sør
New framework agreements in Infraservices with the municipalities of Järfälla and Sigtuna
Contract with envia TEL, a new customer in Germany, in Telecom
New contract in Infraservices with Mälarenergi

Significant events after the end of the second quarter

• New framework agreement in Power with E.ON in Sweden

CEO’s comments

Many projects in start-up phase form the basis for future growth and improved earnings

We took a significant and important step in establishing a stronger Netel with the sale of our Finnish operations that were operating at a loss. We also successfully continued to expand with new and existing customers and into new geographic areas. The high proportion of projects in the start-up phase during the quarter has temporarily had a negative impact on both sales and profitability. However, these projects form the basis for future growth and improved earnings.

We have worked intensively on the sale of our Finnish operations and were able to complete the divestment already in the second quarter. The Finnish operations, and the associated losses and lack of growth, have adversely impacted Netel for several years. The sale has allowed us to focus our resources on our core markets in Sweden and Norway and growth markets in Germany and the UK, and as such represents a very significant step establishing a stronger Netel.

Several projects in start-up phase in the first half of the year

In the second quarter, we continued to have a large proportion of projects in start-up phase across all divisions. However, Telecom has increased its volumes, primarily due to a positive trend in Sweden and Germany. The high proportion of project starts has also negatively impacted profitability since they incur initial costs before we can start deliveries and invoicing. The major contracts that we are now commencing include Elvia’s power stations in Norway, a new framework agreement with Glitre Nett in Norway, an expanded framework agreement with Tele2 in Sweden and fibre networks for UGG and envia Tel in Germany.

The order backlog continued to be strengthened and increased to SEK 4.1 billion, part of which will extend into 2027, but the vast majority comprises volumes to be delivered in 2025 and 2026.

The adjusted EBITA margin amounted to 5.2 per cent (5.6) during the quarter, negatively impacted by the high proportion of projects in start-up phase. The change in the project mix in Power also impacted profitability where the share of high-margin power station projects is lower than previous years.

Performance by the divisions

In Infraservices, sales declined 29.8 per cent in the quarter compared with an unusually strong comparative quarter. It is positive that Infraservices has continued to capture new customers and expanded collaboration with existing ones. Step by step, we are expanding our operations geographically, which combined with our strong local presence, provides us with a competitive edge.

In Power, sales declined 3.5 per cent in the quarter, negatively impacted by project starts in Sweden and the changed project mix. Nevertheless, the power projects that we are now delivering have favourable profitability over time, well in line with or surpassing the Group’s profitability target. Profitability will also be positively impacted by new power station projects that will commence during the year and will enter production phase next year.

In Telecom, sales increased 3.0 per cent during the quarter, driven by a healthy trend in Sweden and Germany. The EBITA margin increased 6.7 per cent (1.8) during the quarter due to higher volumes, a gradually increasing contribution from the margin-enhancing measures carried out in Norway in 2024 as well as one-off effects. The one-off effects comprise the reversal of previous provisions for completed projects.

Cash flow impacted by a high proportion of project starts

Cash flow was also negatively impacted during the quarter by the high proportion of projects in start-up phase. Our cash flow will be positively impacted once we enter the delivery phase of our new projects and can start invoicing. As in previous years, we expect a positive cash conversion at the end of the year as projects are completed with final invoicing in the fourth quarter.

Future outlook

We operate in markets that are driven by the strong critical infrastructure megatrends of electrification, digitalisation and modernisation. Netel holds a strong position in these attractive markets and this, together with our professional and motivated employees, gives me confidence in our ability to deliver on our financial targets and grow profitably.

Jeanette Reuterskiöld
President and CEO