Quarter according to our expectations – full-year 2026 indication for growth and margin improvement unchanged

Continuing operations

• Net sales decreased 14.9 per cent to MSEK 575 (676)
• Operating profit (EBIT) amounted to MSEK 0 (14), with an operating margin of -0.1 per cent (2)
• Adjusted EBITA amounted to MSEK 10 (22), with an adjusted EBITA margin of 1.7 per cent (3.2)
• EBITA amounted to MSEK 2 (16), with an EBITA margin of 0.3 per cent (2.3)
• Loss for the period was MSEK -18 (-2)
• Earnings per share for continuing operations before and after dilution amounted to SEK -0.38 (-0.04)
• Earnings per share including discontinued operations before and after dilution amounted to SEK -0.38 (-0.17)
• Cash flow from operating activities amounted to MSEK -60 (-30)
• Net debt excluding leases amounted to MSEK 869 (721) and net debt excluding leases/adjusted EBITDA to 9.7 (2.9)
• The order backlog increased to SEK 4.2 billion (3.8)

Significant events during the first quarter

• New four-year framework agreements signed in Power with Elvia in Norway with a total value of more than MNOK 110, expanding the geographical area to Oslo Municipality
• New three-year agreement for B2B services in Telecom with Global Connect in Norway
• Agreement in Power with E.ON Energidistribution for the construction of a substation, valued at just over MSEK 40
• Expanded cooperation in Power with the Norwegian energy company Glitre Nett with new framework agreement worth up to MNOK 300 until the end of 2031
• Infraservices contract with the City of Stockholm for civil engineering work in Gasklocka 3 and 4, valued at MSEK 30

Important events after the end of the quarter

• New framework agreements with the Swedish Transport Administration regarding the design and construction of telecom masts, worth in total MSEK 130 by 2030
• New two-year framework agreement in Telecom with Stångåstaden in Sweden regarding the exchange of data networks in Stångåstaden's housing and property portfolio

CEO’s comments

Growing order backlog and continued savings measures lay the foundation for increased profitability

The first quarter of the year was, as expected, weak due to seasonal variation and the long winter, as well as the ongoing transformation of the telecom market. The infraservices and power markets are performing well with high activity and many tender requests. We continued to successfully deliver on our strategy to grow with existing and new customers during the quarter. We also broadened our geographic footprint both in Norway and Sweden with new customer contracts. The high order backlog of more than SEK 4 billion reflects our strong position as well as our competitiveness and ability to deliver. Given the market conditions we see today and the savings measures we have implemented, and will implement, we are expecting growth and margin improvement for full-year 2026.

In our industry, the first quarter is normally the weakest of the year since many projects are in the start-up phase. Furthermore, this year’s long winter delayed the start of projects, which also had a negative impact on sales, earnings and cash flow for the quarter. However, we remain optimistic about the full-year 2026 and expect both growth and margin improvement. One of the reasons for the expected improvement is our ability to grow the order backlog and our successful strategy of securing new customers and expanding into new geographies in Norway and Sweden. At the beginning of the year, our order backlog for 2026 amounted to approximately SEK 2.0 billion. After the first quarter, the order backlog for projects to be implemented during the current year amounts to SEK 1.8 billion. This corresponds to an increase during the quarter of approximately MSEK 400, an important signal for the continued development of the year. The increased order backlog is an indication that we are well positioned in the competition and continue to be an attractive supplier in our markets.

Power – a strong market
In the Swedish power market, customers were cautious in 2025, but we are now seeing increased activity and we see more business opportunities in the near future. In Norway, demand remains high, with new and extended framework agreements broadening our geographical presence and strengthening our position. Power continues to be the main driver behind the increase in the order backlog. Overall, the market is strong, but the long project times mean that volumes are being realised gradually.

Project times for, for example, the construction of substations are very long, often several years. For example, the substation in Norrköping, which was announced in the quarter, is to be completed in the spring of 2028, which means that final invoicing is two years in the future. It is important to understand our long project times within Power in order to be able to assess our future development.

Infraservices – strong tender season
The level of activity in Infraservices' market is high and we are participating in more tenders requests now compared with last year. Infraservices announced a new customer in the municipal sector during the quarter: the City of Stockholm. The contract with the City of Stockholm is worth MSEK 30 and covers civil engineering work in the former gasworks area in Hjorthagen. We are now involved in transforming old industrial land and port areas into a modern mixed-use city with housing, offices, services and culture.

As a result of the high proportion of projects in the start-up phase and the long winter that delayed many project starts, Infraservices' profitability decreased in the quarter. The infraservices market is highly competitive and during the previous year we implemented significant cost adjustments in the business while improving our project management and risk control. This means that we are now better equipped when volumes increase during the year.

Telecom – shift in focus to service and maintenance
The telecom market is undergoing a transformation whereby our traditional customers are moving from hardware installation to service and maintenance. This means that our customers are reducing their investments, which we have noted in all three of our geographic markets, with volumes and our profitability falling in the quarter. However, we can adapt to this decline in volume more easily due to our flexible business model with a high share of subcontracting in our telecom projects.

We are adapting to the transformation through increased focus on service and maintenance and by winning new customers. During the quarter, we announced a new three-year agreement with Global Connect in Norway for services to the customer’s B2B segment. We have also presented major agreements with the Swedish Transport Administration, a new customer. The framework agreements cover the design and construction of telecom masts and towers for the new European railway communication system, FRMCS. The agreements are three years with the possibility of extension until 2030 and an estimated value of just over SEK 130 million by 2030.

We have also signed a framework agreement with the housing and real estate company Stångåstaden in Linköping, Sweden, to carry out a comprehensive upgrade of the network infrastructure, commissioning, and security and electrical measures in all apartments and premises – strategically important as we gain a new major customer and establish ourselves in a new geographical area.

Positive effects of organisational changes
We carried out a series of changes to restore profitability in 2025. One of the measures was to reduce managerial layers and shorten decision-making processes. Two years ago, we organised our operations into three distinct divisions – Power, Infraservices and Telecom – to strengthen focus and increase collaboration within each business area. This work has laid a solid foundation, and we are now taking the next step: to systematically collaborate even more strongly between the divisions and, where relevant, submit joint tenders. The aim is to increase our competitiveness, improve the quality of tenders and ensure better capacity utilisation. The agreement with Stångåstaden is a prime example of this, with the Telecom and Power divisions working together. This means that we utilise our resources more efficiently, which gives us the opportunity to also retain a larger share of the project profits.

Merger of Swedish companies
A decided and previously communicated measure within our savings program is the merger of our Swedish operating companies, which is one of the central measures within the program that will reduce costs by SEK 15–25 million with full effect in 2027. About ten Swedish companies will be merged into one operating company, Netel AB, in the autumn. The merger will shorten decision-making processes, reduce overhead costs and make us more efficient in such areas as purchasing, tendering and project management. In addition, it will enable us to establish standardised ways of working, faster exchange of knowledge and more efficient communication channels. We can also build a broader team spirit and enhance the attractiveness of our employer brand proposition.

Future outlook
After the difficult decisions we made in 2025 to restore profitability, we enter 2026 as a stronger company, although we still have much to do. As we started production a little later in the first quarter, it also affects the second quarter, but we expect to be able to compensate for it in the second half of the year with larger production volumes and remain optimistic about the full year 2026 and expect both growth and margin improvement. We have skilled employees and good, long-term customer relationships, which is reflected in the growing order backlog and new, attractive contracts. At the same time, we have already made, or are in the process of making, significant savings to reduce our cost base. Considering the above, I am confident in our ability to generate long-term value for our shareholders and other stakeholders.

Jeanette Reuterskiöld
President and CEO

Webcast presentation and teleconference
Jeanette Reuterskiöld, President and CEO, and Fredrik Helenius, CFO, will present the interim report on Friday, 24 April at 9:00 a.m. CEST 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/q1-report-2026. 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://events.inderes.com/netel-group/q1-report-2026/dial-in. 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 second quarter report 2026 will be published 10 July , 07:30 a.m. CEST.