Netel Holding AB: Higher order backlog, strong cash flow and robust measures taken to restore profitability

Fourth quarter
Continuing operations¹

• Net sales decreased 14.4 per cent to MSEK 812 (949)
• Operating loss (EBIT) amounted to MSEK -21 (58), with an operating margin of -2.6 per cent (6.1)
• EBITA amounted to MSEK -19 (60), with an EBITA margin of -2.3 per cent (6.3)
• Adjusted EBITA amounted to MSEK 2 (59), with an adjusted EBITA margin of 0.2 per cent (6.3)
• Loss for the period was MSEK -67 (-58)
• Earnings per share for continuing operations before and after dilution amounted to SEK -1.00 (0.71)
• Earnings per share including discontinuing operations before and after dilution amounted to SEK -1.38 (-1.19)
• Cash flow from operating activities amounted to MSEK 89 (63)

January-December
Continuing operations^{1, 2}

• Net sales decreased 9.3 per cent to MSEK 2,915 (3,214)
• Operating loss (EBIT) amounted to MSEK -13 (157) with an operating margin of -0.5 per cent (4.9)
• EBITA MSEK -5 (164) with an EBITA margin of -0.2 per cent (5.1)
• Adjusted EBITA MSEK 28 (181), with an adjusted EBITA margin of 1.0 per cent (5.6)
• Loss for the period was MSEK -117 (-47)
• Earnings per share for continuing operations before and after dilution amounted to SEK -1.86 (1.31)
• Earnings per share including discontinuing operations before and after dilution amounted to SEK -2.42 (-0.96)
• Cash flow from operating activities MSEK -46 (59)
• Net debt excluding leases increased to MSEK 786 (662) and net debt/adjusted EBITDA amounted to 7.6 (2.8)
• The order backlog increased to SEK 4.16 billion (3.81)
• The Board proposes that no dividend be paid to shareholders for 2025

¹ Operations in Finland were divested on 30 June 2025 and operations in the UK were divested on 11 December 2025, which are presented in this report as discontinuing operations.
² Adjustments were not made for the earnings effect announced on 1 October 2025.

Significant events during the fourth quarter

• New long-term financing agreements signed
• UK operations divested
• Contract signed in Infraservices for civil engineering works at a new logistics centre in Ludvika worth about MSEK 110
• Agreement signed in Power with Ellevio for the reconstruction and refurbishment of a distribution station on Lidingö worth about MSEK 50
• Renewed two-year framework agreement in Power with Elvia in Norway for emergency services worth MNOK 20-30 per year

Significant events after the end of the year

• New framework agreement signed in Power with Elvia in Norway with a total value of more than MNOK 110, expanding the cooperation to Oslo Municipality
• Aksel Aas appointed Head of Telecom Norway and Robert Carlsson Head of Infraservices Sweden

CEO's comments
Stronger in 2026 after a challening year

2025 was a challenging year, with lower volumes and large write-downs in projects that had a negative impact on our earnings. We launched and carried out robust measures while entering 2026 with a higher order backlog of SEK 4.2 billion and an organisation that has taken clear steps towards increased stability and profitability. With an improved financial position, positive market outlooks and a clear focus on execution, we stand by our indication of growth and improved margin in 2026.

Robust measures implemented

In the quarter, we have incurred additional costs to terminate identified loss-making projects, while net sales were slightly lower than expected. In 2025, we took robust measures to strengthen our operational base and increase predictability in our operations. We carried out comprehensive efforts to streamline our organisation and strengthen the parts of operations that have a negative impact on results. Early in the year we divested our operations in Finland, and in December we sold our operations in the UK. Both of these operations have negatively affected results in recent years and have required intense focus from the organisation. We also improved internal processes and follow up projects more frequently. We have conducted an extensive review of subsidiaries with profitability challenges and have a clear picture of the operations and projects, we have strengthened their teams and adjusted the organisations. As a more general measure, we reduced managerial levels and the use of consultants, in addition to optimising the use of external resources. In 2026, we will also start consolidating subsidiaries to create economies of scale in administration and resource management, with the aim of freeing up more time and capacity for winning, managing and developing projects.

Savings programme for enhancing competitiveness

In the autumn we scaled up our efforts to restore and strengthen profitability. Our two savings programmes, introduced in the report for the third quarter 2025, are a key part of this work. The first programme has been fully implemented and will lead to total cost savings of MSEK 25 in 2026. The second programme, which will be rolled out gradually during the year, is expected to generate an additional MSEK 15-25 in savings, with full effect in 2027. These savings programmes are necessary for becoming even more competitive in attractive markets.

Our underlying business

Our underlying business remains stable, and what remains after we exclude the effects from the two underperforming subsidiaries and the unusually large volume loss, is a highly resilient business with a strong foundation. Even though lower volumes had an impact on earnings for the year, we consider this temporary. Our business model - with a high degree of flexibility and a significant share of subcontracting - means that we can adapt quickly to changing market conditions.

At the same time, parts of the operations are performing very well. It is especially gratifying to note that our power operations in Norway continued to improve and grew over 40 per cent during the year with an EBITA margin of over 5 per cent. It confirms that our strategic focus areas are delivering and that we are well positioned to create profitable growth when volumes normalise and the measures we took generate their full effect.

Changes in the Executive Team to boost our scope for action

As part of the work to boost Netel's scope for action and to improve profitability, we have made changes to the Executive Team. We removed a management layer within the divisions. The heads of the business areas will now report directly to me. I am pleased to welcome Aksel Aas as the new Head of Telecom Norway and Robert Carlsson as the new Head of Infraservices Sweden. The strength of their experience with Netel and its markets means that they are taking up key roles, with a clear mandate to bring change, enhance operational efficiency and further develop the Group's business. These changes will strengthen our position and create good conditions for improved earnings and sustainable growth.

Profitable order backlog

During the fourth quarter we continued to win attractive contracts and we are entering 2026 with a high order backlog more than SEK 4 billion. Around half of the order backlog is for projects that are already underway this year, creating a strong foundation for profitable growth. Agreements were signed at levels that offer good potential for profitability and will help to stabilise the business going forward. The growth in order backlog was primarily driven by Power and new framework agreements in Telecom.

Strong cash flow for the quarter

Cash flow was strong in the last quarter of the year, and once again we could see clear seasonal patterns as projects concluded and final invoicing resulted in increased cash flows during the last months of the year. Cash flow from operating activities amounted to nearly MSEK 100 for continuing operations for the fourth quarter, an excellent performance from our organisation. We remain intensely focused on cash flows. In addition to the divestment of operations in the UK and Finland, we have robust measures in place with the aim of reducing tied-up capital and improving our cash flows in 2026.

New extended financing

We successfully conducted a round of refinancing during the fourth quarter of 2025 and secured new long-term financing agreements. The financing runs until 30 June 2027 with a liquidity covenant structure. A liquidity covenant means that financing is linked to the company's actual ability to pay, thus providing greater stability, predictability and financial flexibility. Overall, this improves conditions to support our operational activities and the implementation of the Group's strategic initiatives going forward.

Our seasonal patterns

Netel's operations follow clear, recurring seasonal patterns related to project life cycles, customer investment plans and weather conditions. These patterns impact volumes, margins and cash flows. Given how our project mix looks this year, we expect slightly lower activity in the beginning of the first quarter than last year. This is due in part to many projects in the start-up phase, which includes preparatory work such as design and planning, and in part to the winter weather that means that we have to wait to start some production. We expect larger production volumes, primarily during the second half of the year.

We will continue to win attractive business

I would like to conclude by extending my sincere thanks to all of our employees. Their high levels of commitment, responsibility and determination led to strong performances, even in challenging conditions. With these shared efforts, we have created a stable foundation for continuing to win business, delivering high-quality projects and building long-term value for the company's shareholders and other stakeholders.

Jeanette Reuterskiöld
President and CEO

Our measures to increase profitability
· The UK and Finnish operations divested in 2025
· Cost savings of SEK 25 million with full effect in 2026
· Cost savings of SEK 15-25MSEK with full effect in 2027
· Restructuring of companies with profitability problems
· Consolidation of subsidiaries into larger units
· Reduction of the number of managerial levels
· Improvement of internal processes and follow-up

Webcast presentation and teleconference
Jeanette Reuterskiöld, President and CEO, and Fredrik Helenius, CFO, will present the interim report on Friday, 6 February at 9:00 a.m. CET in a webcast. Questions may be asked both online and by phone. Presentation material is also available at https://netelgroup.com/en/investors/reports-and-presentations/. The presentation will be held in English.

If you want to participate through the webcast, use the link https://netel-group.events.inderes.com/q4-report-2025. It will be possible to submit written questions during the webcast. If you want to ask questions orally via teleconference, please register through the link https://conference.inderes.com/teleconference/?id=5004069. After registration, you will receive a telephone number and ID to log in to the conference. It will be possible to ask questions orally during the teleconference.

Interim reports on www.netelgroup.com
The complete interim report and previous reports are available on https://netelgroup.com/en/investors/reports-and-presentations/.

Next report
The first quarter report 2026 will be published 24 April 2026, 07:30 a.m. CEST.

About us

With over 25 years of experience, Netel is a leader in the development and maintenance of critical infrastructure within Infraservices, Power and Telecom. We are involved in the entire value chain from design, production and maintenance of our customers' facilities. We are dedicated to securing an accessible and reliable future, where technology unites and transforms society. Netel reported net sales of SEK 2,915 million in 2025 and the number of employees in the group is about 800. Netel is listed on Nasdaq Stockholm since 2021. Read more at netelgroup.com.

Contacts

Jeanette Reuterskiöld, President and CEO, [phone], [e-mail]
Fredrik Helenius, CFO, [phone], [e-mail]
Åse Lindskog, IR, [phone], [e-mail]

This information is information that Netel Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2026-02-06 07:30 CET.

Image Attachments

Our seasonal patterns