Teleste Corporation half-year report 1 January to 30 June 2024
Teleste Corporation
Stock exchange release
August 14, 2024 at 8.30 a.m. EESTTELESTE CORPORATION HALF-YEAR REPORT 1 JANUARY TO 30 JUNE 2024
TELESTE CORPORATION: Net sales and adjusted operating result decreased. Demand in the European networks market remains low, deliveries in North America HAVE INCREASED.
Unless otherwise specified, the figures in brackets refer to the year-on-year comparison period.
April-June 2024 in brief
- Net sales decreased by26.3%,amounting to EUR 29.5 (40.1) million
- Adjusted EBITDA decreased by35.7%, amounting to EUR 1.3 (2.0) million
- Adjusted operating result decreased by68.1%, amounting to EUR 0.2 (0.6) million
- Operating result decreased to EUR -0.8 (0.1) million
- Adjusted earnings per share decreased to EUR -0.01 (0.02)
- Earnings per share decreased to EUR -0.06 (-0.01)
- Cash flow from operations decreased to EUR -0.2 (9.8) million
- Orders received decreased by 11.7%to EUR 26.7 (30.3) million
January-June 2024 in brief
- Net sales decreased by 22.6%, amounting to EUR 66.1 (85.4) million
- Adjusted EBITDA decreased by 12.1%, amounting to EUR 4.4 (5.0) million
- Adjusted operating result decreased by15.5%, amounting to EUR 1.7 (2.1) million
- Operating result decreased to EUR -1.1 (1.4) million
- Adjusted earnings per share decreased by 53.3%, amounting to EUR 0.07 (0.16)
- Earnings per share decreased to EUR -0.08 (0.12)
- Cash flow from operations decreased by 39.5%, amounting to EUR 7.1 (11.7) million
- Orders received decreased by 19.5%to EUR 57.2 (71.1) million
- The order book decreased by0.6% and amounted to EUR 117.1 (117.8) million
- Teleste's 1.8GHz DOCSIS 4.0-compliant smart amplifiers became the first in the industry to progress to the field deployment stage in North America.
Outlook for 2024 (specified)
Teleste estimates that net sales in 2024 will amount to EUR 140-150 million and that the adjusted operating result in 2024 will be EUR 3-6 million.
Previously, the company estimated that net sales in 2024 will amount to EUR 140-165 million and that the adjusted operating result in 2024 will be EUR 3-6 million.
Segment reporting
As the company announced on 25 April 2024, Teleste reports its key financial figures according to a new segment structure starting from the first interim report of 2024. The operating segments are Broadband Networks and Public Safety and Mobility. The Group's reported segments correspond to the Group's operating segments. The Group's common functions are treated outside segment reporting.
Key figures
+-----------------+--------+--------+------+--------+--------+------+---------+
|EUR million |4-6 2024|4-6 2023|Change|1-6 2024|1-6 2023|Change|1-12 2023|
+-----------------+--------+--------+------+--------+--------+------+---------+
|Net sales |29.5 |40.1 |-26.3%|66.1 |85.4 |-22.6%|151.3 |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Adjusted EBITDA |1.3 |2.0 |-35.7%|4.4 |5.0 |-12.1 |7.2 |
|1) | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
| Adjusted |4.4% |5.1% |- |6.6% |5.8% | |4.8% |
|EBITDA, % 1) | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Adjusted EBIT 1) |0.2 |0.6 |-68.1%|1.7 |2.1 |-15.5%|1.2 |
+-----------------+--------+--------+------+--------+--------+------+---------+
| Adjusted |0.6% |1.5% |- |2.6% |2.4% |- |0.8% |
|EBIT, % 1) | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
|EBIT |-0.8 |0.1 |>-100%|-1.1 |1.4 |>-100%|-0.5 |
+-----------------+--------+--------+------+--------+--------+------+---------+
| EBIT, % |-2.6% |0.3% |- |-1.7% |1.6% |- |-0.3% |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Net result for |-1.1 |-0.3 |n/a |-1.6 |2.0 |>-100%|-0.5 |
|the period | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Adjusted earnings|-0.01 |0.02 |>-100%|0.07 |0.16 |-53.3%|0.09 |
|per share, EUR 1)| | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Earnings per |-0.06 |-0.01 |n/a |-0.08 |0.12 |>-100%|0.00 |
|share, EUR | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Cash flow from |-0.2 |9.8 |>-100%|7.1 |11.7 |-39.5%|10.8 |
|operations | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Orders received |26.7 |30.3 |-11.7%|57.2 |71.1 |-19.5%|149.6 |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Order backlog | | | |117.1 |117.8 |-0.6% |125.9 |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Net gearing, % | | | |46.9% |41.3% |- |51.9% |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Equity ratio, % | | | |46.7% |45.3% |- |45.4% |
+-----------------+--------+--------+------+--------+--------+------+---------+
|Personnel at | | | |688 |811 |-15.2%|750 |
|period-end | | | | | | | |
+-----------------+--------+--------+------+--------+--------+------+---------+1) An alternative performance measure defined in the tables section of the report.
Comments by President & CEO Esa Harju:
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The second financial quarter of 2024 was challenging as expected. Orders and revenue decreased compared to the same period last year. Profitability was not satisfactory, but contrary to earlier expectations, the adjusted operating profit was slightly positive. The outlook for the full year remains overshadowed by uncertainty in the European network operator markets and related low market demand.
Orders and revenue in the Broadband Networks business unit decreased considerably compared to the same period last year, due to the continued very low demand in the European market. However, due to cost reductions, we were able to protect the profitability of the business. The European market demand is not expected to recover during 2024, but to remain at a low level throughout the year. The commercial delivery volumes of the 1.8GHz ICON smart amplifiers in North America have started to increase, partially compensating for the low demand in Europe. North America's share of the total Broadband Networks business volume in 2024 is still moderate but is expected to gradually increase.
Orders and revenue also decreased in the Public Safety and Mobility business unit compared to the same period last year. The decline was most significant in the video surveillance and public transport operator businesses, but project and service volumes for train manufacturers increased. The adjusted operating profit was slightly positive and better than in the same period last year.
We continued to take measures to improve cost efficiency and to prioritize operations. The cost-saving measures target all company functions and will be implemented throughout 2024. The restructuring of the company's group structure, in which Broadband Networks and Public Safety and Mobility businesses are arranged under their own legal entities, is progressing to its final phase at the end of the year.
We are specifying our revenue guidance for the current financial year, as revenue is expected to be lower than last year. The global macroeconomic situation has become even more uncertain, reducing operators' readiness to invest. The main goal for the remainder of the year is to grow the Broadband Networks business and delivery volumes in North America. In the Public Safety and Mobility business, we are seeking growth particularly in the train manufacturers and public transport segments, where large project deliveries are expected to occur towards the end of the year. At the same time, we will continue to streamline our operational activities in both business units."
For further information, please contact:
Esa Harju
President and CEOJuha Hyytiäinen
CFO
tel. +358 2 2605 611
investor.relations@teleste.com
Teleste in brief
Teleste's technologies and products are used to build a networked society. Our solutions bring high-speed
broadband and television services to homes, secure your safety in public places and guide you in the use of
public transport. With solid industry experience and a drive to innovate, we are a leading international
company in broadband, security and information technologies and related
services. We work in close cooperation with our customers, both virtually and through our worldwide
sales network. In 2023, Teleste's net sales reached EUR 151.3 million and on average it had
approximately 800 employees. Teleste is listed on Nasdaq Helsinki. For more information, please visit
our website www.teleste.com (https://teleste.sharepoint.com/sites/Hallitusmateriaali/Jaetut%20asiakirjat/Hallitusmateriaalit/2023/04%20toukokuu%203%202023/www.teleste.com).