Teleste Oyj — Earnings Release 2024

Feb 11, 2025

Teleste Corporation: Improved orders, net sales, and adjusted operating result. Increase in orders in North America

Teleste Corporation: Improved orders, net sales, and adjusted operating result. Increase in orders in North America

Teleste Corporation
Stock exchange release
February 11, 2025 at 8.30 a.m. EET

TELESTE CORPORATION FINANCIAL STATEMENT RELEASE 1 JANUARY TO 31 DECEMBER 2024

TELESTE CORPORATION: IMPROVED ORDERS, NET SALES, AND ADJUSTED OPERATING RESULT.
INCREASE IN ORDERS IN NORTH AMERICA.

Unless otherwise specified, the figures in brackets refer to the year-on-year
comparison period.

October-December 2024 in brief

· Net sales grew by 19.0%, amounting to EUR 36.5 (30.7) million
· Adjusted EBITDA was EUR 2.1 (0.4) million, representing an increase of EUR
1.7 million, or 503.0%
· The adjusted operating result was EUR 0.8 (-1.4) million, an increase of EUR
2.3 million
· The operating result was EUR -5.7 (-2.3) million, representing a decrease of
EUR 3.4 million that was primarily due to a one-time impairment on capitalised
R&D expenses.
· Adjusted earnings per share were EUR 0.08 (-0.10), representing an increase
of EUR 0.18
· Earnings per share were EUR -0.27 (-0.15), representing a decrease of EUR
0.12
· Cash flow from operations was EUR 1.8 (-1.9) million, representing an
increase of EUR 3.7 million
· Orders received increased by 13.2% to EUR 36.3 (32.1) million

January-December 2024 in brief

· Net sales decreased by 12.4%, amounting to EUR 132.5 (151.3) million
· Adjusted EBITDA increased by 27.2%, amounting to EUR 9.2 (7.2) million
· The adjusted operating result was EUR 4.0 (1.2) million, an increase of
EUR 2.8 million, or 248.2%
· The operating result was EUR -5.5 (-0.5) million, a decrease of EUR 5.0
million that was due to a one-time impairment on capitalised R&D expenses, and
restructuring costs
· Adjusted earnings per share were EUR 0.20 (0.09), representing an increase
of EUR 0.11
· Earnings per share decreased to EUR -0.32 (0.00)
· Cash flow from operations increased by 15.2%, amounting to EUR 12.4 (10.8)
million
· Orders received decreased by 16.5% to EUR 124.9 (149.6) million.
· The order book decreased by 6.1% and amounted to EUR 118.3 (125.9) million

Outlook for 2025

Teleste estimates revenue for 2025 to be between 135 and 150 million euros, with
adjusted operating profit in the range of 4 to 7 million euros. The result is
expected to be primarily realized in the second half of the year. The potential
implementation of import tariffs in the United States could negatively affect
profitability in the short term.

Dividends

The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.03 (0.00) be distributed on outstanding shares for the financial period
that ended on 31 December 2024.

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  10-12  10-12 Change  1-12 2024  1-12 2023 Change
2024 2023
Net sales 36.5 30.7 19.0 % 132.5 151.3 -12.4%
Adjusted EBITDA 2.1 0.4 503.0% 9.2 7.2 27.2%
[1)]
    Adjusted 5.8% 1.2% 6.9% 4.8%
EBITDA, % [1)]
Adjusted EBIT [1)] 0.8 -1.4 n/a 4.0 1.2 248.2%
    Adjusted EBIT, 2.3 % -4.6% 3.0 % 0.8%
% [1)]
EBIT -5.7 -2.3 n/a -5.5 -0.5 n/a
     EBIT, % -15.6% -7.6% -4.2% -0.3%
Net result for the -5.0 -2.8 n/a -6.1 -0.5 n/a
period
Adjusted earnings 0.08 -0.10 n/a 0.20 0.09 137.7%
per share, EUR
[1)]
Earnings per -0.27 -0.15 n/a -0.32 0.00 n/a
share, EUR
Cash flow from 1.8 -1.9 n/a 12.4 10.8 15.2%
operations
Orders received 36.3 32.1 13.2% 124.9 149.6 -16.5%
Order book 118.3 125.9 -6.1%
Net gearing, % 46% 52%
Equity ratio, % 45% 45%
Personnel at 619 750 -17.5%
period-end

1. An alternative performance measure defined in the tables section of the
   report.

Comments by President & CEO Esa Harju:

“Our performance was solid and in line with our expectations in the last
financial quarter of 2024. Orders received, revenue, and adjusted operating
profit all saw a clear increase compared to the same period in the previous
year. Despite a decrease in full-year 2024 revenue from the previous year,
adjusted operating profit improved significantly, reaching the top end of our
updated financial guidance. Both business segments made excellent progress,
laying a strong foundation for future growth and success.

In the Broadband Networks business segment, orders increased significantly from
the same period last year, with revenue and adjusted operating profit also
exceeding last year's figures. The increase in orders was primarily due to
achievements in North America, as announced in December, but the European market
decline also appears to have stabilized. In November, we announced a multi-year
cooperation agreement with Telia Finland, under which Teleste will take a full
operating responsibility for the broadband and TV services carried over Telia
Finland's cable network. It is also now confirmed that we will begin delivering
the next-generation DOCSIS 4.0 technologies to a significant European operator
in the latter half of 2025. We have successfully positioned ourselves as a
leading technology supplier for multiple North American operators, and our
revenue from this market is expected to continue growing.

In the Public Safety and Mobility business segment, revenue and profitability
increased compared to the same period last year, although orders were lower due
to the cancellation of a customer project. Several key train projects are in the
commercialization phase, and significant project deliveries were scheduled for
the end of the year, making the fourth quarter the highest in terms of revenue
for the entire year. In November, we announced a master supply agreement with
Siemens Mobility, one of the world's leading train manufacturers. Our goal is to
increase our market share in passenger information and security systems supplied
to train manufacturers. Volumes of video surveillance solutions and service and
maintenance business were also at a good level.

In the last financial quarter, we made a substantial one-time impairment of
capitalized R&D in the Broadband Networks business segment, due to uncertainties
in the technology direction of the industry, as well as slower adoption of DAA
technology in the market. This impairment has no impact on cash flow.

The company's cost-saving measures have greatly reduced our expenses. We also
completed the restructuring of the group legal structure, whereby the Broadband
Networks and Public Safety and Mobility businesses are now carved out into their
own legal entities.

In 2025, Broadband Networks will focus on growing its North American business,
whilst maintaining European revenue levels. Potential trade actions and import
tariffs in the United States may reduce profitability in the short term, and the
company is preparing a contingency plan for this. The Public Safety and Mobility
business aims to achieve profitable growth across all product groups. Our
renewed leadership team is fully aligned and committed to driving our strategic
long-term growth objectives successfully.”

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