Eltel: Waiting for the cost savings effect - ABG

Soft Q1, waiting for effects from cost savings programme
EBITA downgrades driven by higher group costs
Trading at 19-17x '24e-'25e EV/EBITA


Restructuring burdens Q1, waiting for savings to take effect

Eltel reported sales 7% above our expectations, but adj. EBITA came in roughly in line at EUR -5.5m (ABGSCe -5.0m), and this was further burdened by an NRI of EUR -6.1m tied to restructuring measures from the company's communicated cost savings programme. The poor earnings partly stem from Q1 being a seasonally weak quarter, but on top of this the company is also having profitability issues related to cost inflation, which has been difficult to fully pass on to customers. Looking ahead, we expect improved earnings for the coming quarters, not only due to typical seasonal effects but also since we expect to start seeing effects from the cost savings programme.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/eltel/Equity-research/2023/5/eltel---waiting-for-the-cost-savings-effect/