Eltel: Restructuring to hurt Q1, the fruits come later - ABG

Q1 report due on Thursday, 4 May
Cost savings programme to show effect from Q2 onwards
13x '25e ABGSCe EV/EBITA, 5.4x on company targets


Q1: seasonally weak and hampered by restructuring

We expect Eltel to report Q1 sales of EUR 176m, down 4.2% (-3.4% organic, -0.8% FX). Q1 is a seasonally weak quarter for Eltel, and typically features negative EBITA due to adverse weather conditions making installations difficult. As such, we expect adj. EBITA of EUR -5.0m (-2.4m) for a margin of -2.8% (-1.3%). This excludes a pre-announced NRI of EUR 5m, an expense taken to implement the cost savings programme announced in December '22, which the company estimates will save EUR 10m per annum (mostly taking effect from Q2, to our understanding). The ongoing restructuring and downscaling of the workforce associated with the savings programme will likely lead to a poor utilisation rate in the quarter, in our view, which is why we expect a y-o-y adj. EBITA decline.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/eltel/Equity-research/2023/4/eltel---restructuring-to-hurt-q1-the-fruits-come-later/