Eltel: Slight improvement, but more is needed - ABG

• Solid growth, but high costs still hurting margins
• More benefits from savings program in Q3e
• 16x 25e EV/EBITA on ABGSCe, company's target implies 5.5x

Q2 outcome
Eltel reported Q2 sales of EUR 208m (+3% vs. ABGSCe 201m), which was flat y-o-y, but organic growth was 5%, overshooting our expectations of 2%. This was mainly driven by a better performance in Finland, while Norway struggled more than we expected. On the cost side, the company saw some, but not full, effects from its ongoing cost-savings programme, which was expected, while it also continues to struggle with cost inflation. This effect was noticeable in Finland, Sweden, and Denmark, but given the underperformance in Norway, EBITA was EUR -1.5m, in line with ABGSCe at -1.4m, and this included no NRIs.

No major estimate changes
Although we raise our sales estimates slighty, driven by Finland, Sweden and Denmark, we make only minor EBITA revisions.

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/f724360ae0c04046afc928a1df1818d6/pdf/slight-improvement-but-more-is-needed.pdf