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Annual Review 2012


Company development

Contents

CEO´s preface

4

Evolution of the Infranet Industry

6

Five elements of the Eltel Way

8

Group financial performance

10


Value for customer

Behind the scenes

Comprehensive engineering services

14

Power Transmission business unit

22

Developing people is in our culture

28

Securing electricity supply

16

Power Distribution business unit

23

Winning team attitudes

30

Developing field services cost efficiency

17

Railway Infrastructure business unit

24

Corporate responsibility in focus

32

Managing projects the Eltel Way

18

Fixed Telecom business unit

25

Management and Board of Directors

34

Smart Grid innovations

20

Mobile Telecom business unit

26

Homeland Security and Aviation business unit

27


Continued growth, strong performance Eltel’s strong performance continued

projects in the UK have commenced,

in 2012. Organic growth coupled with

and the Polish grid operator has ordered

new market openings in the UK and

several new projects. Our project

Aviation became a specialised business

Ukraine show the strength of our market

management experience in Africa

unit within Eltel. Operating as an

segments. Steady improvement of

secured several new contracts.

independent business unit, its net sales

earnings and liquidity were achieved by

Changes in business unit structure In early 2013, Homeland Security and

are EUR 50 million. Smart Metering will

means of systematic development of

Telecommunications enjoyed a good

merge with Power Distribution in 2013

Eltel’s operational model, Eltel Way.

level of demand in the mobile sector

to better utilise the synergies between

and in our special segment of homeland

these units.

Eltel’s delivery of customer

security and aviation. The German

value has paid off

market looks set to grow. Demand for

Our portfolio of customer solutions

fixed telecom services was strong in

and geographical presence have

most areas. We have succeeded in

to grow by almost 20% from 2012

proved successful. Modern societies

turning declining sales into growth in

to 2015. Main markets are in

are becoming increasingly dependent

the rail infrastructure sector, and a new

Europe with customers being well-

on reliable networks and services.

market has opened in Norway.

established, market-leading electricity,

For example, the storms of 2011 that caused substantial damage and outages have led to the push for underground cabling in Finland. Eltel’s

Outlook of future Infranets good

Eltel’s addressable market is expected

telecommunications and other Sales growth and

infrastructure operators.

Net sales increased by 14% in 2012.

Our people and way of working

consolidated profitability

ability to innovate and bring increased

Overall, sales have grown 34% from

availability of the infrastructure is in high

2010 to 2012. EBITA continued to grow,

transfer of best practice and knowledge

demand.

+ 7% in absolute terms, and we remain

sharing in the development of customer

Eltel’s specialised structure spurs the

among the performance leaders in our

key processes. Our people are well-

Demand for new power transmission

European peer group. Last year’s focus

positioned to bring their expertise to

capacity continues in Europe. Our

on cash management supported strong

the front line and shape the future of

experience of managing international

cash flow despite considerable growth.

the Infranet Industry together with our

cross-border projects has created many

The number of employees at the end of

customers and partners.

new opportunities. The first execution

2012 was 5.3% higher than 2011.

4

CEO’s preface


“Industry-leading solutions are driving our success.” Axel Hjärne

President and CEO

CEO’s preface

5


Evolution of the Infranet Industry and Eltel Way be placed separately from infrastructure

competition was unrestricted. Besides

TEL markets

to deliver the service.

Nordic telecoms, outsourcing moved

be viewed in phases. The 1990s saw

Foundation of the Infranet Industry

the power distribution sector, Finland

The Nordic countries were pioneers in

having been the frontrunner in the

telecommunications sectors. Until then,

liberating operator markets, which led

latter. Today, Northern Europe forms

competition between operators was

to major outsourcing and the foundation

a benchmark of outsourcing practice

limited and dominated by state-owned

of a new industry – the Infranet Industry.

in electricity and telecommunications

players. Increased privatisation arrived

Some 15,000 people were outsourced

sectors.

with the new Millennium. Deregulation

by telecoms companies to privately held,

also resulted in new telecommunications

new-era service partners in the Nordic

license policy and more operators in the

countries alone. Service-level contracts

market. A new regulatory framework

were established between the operator

operators and their customers. The

created gradual functional separation

and service partner, personnel became

establishment of a specialised service

meaning that provision of a service has to

a core part of the service company, and

industry has resulted in a double-digit

Liberalisation of EL and

ahead in the Baltics, and selectively in

Evolution of the Infranet market can deregulation both in the electricity and

6

CEO’s preface

What can we expect?

Outsourcing has been successful for


reduction of field service costs, and

companies are more international. While

is dedicated to providing all employees

the quality of network services has

Infranet services have established their

with clear roles and responsibilities,

greatly improved. Development of new

position, more is expected of their future

competence development, sufficient

solutions is active. They support a more

development. As the leading Infranet

education and tools to support our

sustainable future and are a prerequisite

service company, Eltel will continue to

customers in their development. Eltel Way

for modern society.

be in the forefront of driving industry

is the set of practices that governs how

developments.

we run a world-class service organisation.

Leading the change – the Eltel Way

Axel Hjärne

Expectations for outsourcing services are very much the same as 10 years ago. However, there has been a dramatic

In an increasingly complex society, Eltel’s

change in the business environment.

value promise becomes more vital than

Consumer habits have changed, customer

ever. Our key drivers are specialisation,

demands are higher, expectations

empowerment and proactivity. We

of stakeholders have evolved, new

strongly believe that a successful service

technologies have become available, and

company is built from the ground up. Eltel

President and CEO

CEO’s preface

7


Five elements of the Eltel Way

Eltel’s structure allows the Group

Uniform reporting structure mirroring

Operational efficiency in everything

organisation with less bureaucracy

action and good feedback for

and competitiveness.

to operate as a decentralised

and uncomplicated decision making.

the organisation enables proactive continuous improvement.

we do to maximise customer value

• Easy-to-understand, flat organisational

• Uniform Group definitions and KPIs in

• Shaping the organisation to meet

structure

management reporting

ever-changing market conditions and

• Specialised teams empowered

• Group KPIs measure contract and

workloads

to improve services and performance

project profitability, staff utilisation,

• Defining and implementing production

• Clear roles and responsibilities for

operational leverage and cash flow

KPIs in all organisational entities

all employees

• Managers only measured on what they

• Transparency and benchmarking

• Organisation built outside in with line

can influence for maximum ownership

throughout the organisation to identify

in charge

and commitment

and share best practices

• Agile technicians with mandate to

• Monthly business reviews for all teams

• Manuals for optimised efficiency for

make decisions and take actions every

up to the Group CEO

all specialised units

day in the field • Maximised span of control

8

CEO’s preface


Culture and people are important

Organic growth tells us how to build

empower our employees.

using scale and scope to expand our

in how we develop, care for and

trust and reliability with customers position.

• Optimising customer value with Eltel

• Targets and measurement of quality

drivers: Empowerment, Proactivity and

before, under and after customer order

Specialisation

processing

• Employees individually and collectively

• Maintaining high customer satisfaction

committed to Eltel’s goals

and building long-standing relationships

• Performance culture with clear

• Expanding on existing competencies

expectations and good feedback to

by bringing people, proven concepts

boost individual potential

and operating models to new markets

• Health and safety part of Company

• Shaping the industry using Eltel’s

culture, training and reporting to realise

international experience, innovation

a vision of zero accidents

and ability to develop new concepts

• Eltel Academy to ensure individuals

and business models

have the right competences CEO’s preface

9


Strong growth and improved EBITA mainly related to the closing down of

million (72.4), while the equity ratio

unprofitable business operations.

remained strong at 32% (30%).

Cash ow

Shareholders

positive contributions from most areas

(before financial items and taxes) was

plc are the majority owner of the Group

and geographies of the Group. Growth

EUR 39.9 million (54.0). While operative

with 69.4% of the votes. BNP Paribas

was strongest in Power Transmission,

profits continued to increase the timing

holds 29.5% of the votes. Management

+ 22% from the previous year, resulting

changes in net working capital at year-

holds the remaining 1.1% of the votes.

in an order backlog of EUR 294 million

end resulting in a lower cash flow from

Five funds managed by 3i Investments

at the end of 2012 (an increase of 72%

operations than in 2011. Cash flow

plc hold 59.5% of the ordinary share

from 2011).

from net financial expenses and taxes

capital. BNP Paribas holds 29.5% and

Net sales

Eltel’s net sales increased by 14% compared to the previous year, and totalled EUR 1,149.0 million (1,011.4).

Cash flow generated from operations

This was achieved organically with

Five funds managed by 3i Investments

was EUR 20.2 million (27.9). Capital

management holds 11% of the ordinary

Financial result

expenditure was EUR 13.2 million (10.2).

share capital. In the period there were no

In 2012, the operating profit pre-

After repayment of short-term loans

changes in ownership.

amortisation of acquisition-related

amounting to EUR 5.1 million (decreased

intangible assets was EUR 44.9

from 12.1), the year ended with a net

million (41.7). The operating profit

cash position of EUR 16.6 million (16.2).

included restructuring and other non-

The total amount of available liquidity

recurring costs of EUR 2.0 million (4.4)

reserves at the year end was EUR 77.9

Group key figures MEUR

2012

2011

Change

1149.0

1011.4

+ 13.6%

Operative EBITA

46.7

46.2

+1.1%

EBITA*

44.9

41.8

+ 7.4%

Personnel at year end

8495

8064

+ 5.3%

Net sales

*Including one-off exceptional items

10

Group financial performance


Development 2008–2012

Net sales by business segment 2012

1200 Fixed Telecom Mobile Telecom

1000

Power Transmission Power Distribution

800

Other*

*Railway Infrastructure and Smart Metering

600

400

2008

2009

2010

2011

2012

NET SALES (MEUR)

50

Net sales by country 2012

40

Sweden Finland Poland

30

Norway Denmark Baltics

20

Germany Other

10

2008

2009

2010

2011

2012

EBITA* (MEUR)

*Including one-off exceptional items

Personnel by country 2012

10000 9000 8000

Poland

7000

Sweden

6000

Finland

5000

Baltics Denmark

4000

Norway

3000

Germany

2000

Other

1000 0

2008

2009

2010

2011

2012

PERSONNEL

Group financial performance

11


Comprehensive engineering services Eltel’s largest design unit, its engineering

engineering design. Eltel’s engineering

• Steel structure static calculations,

centre, is located in the Polish city of

services find innovative and high-quality

tower design and testing

Krakow. One of the biggest in Europe

technical solutions that provide cost

• Civil engineering design

for power transmission applications, the

optimisation of the investment and

• Analysis for overhead line transmission

centre is home to a design team of about

meet customer expectations. Designers

capacity increase

200 dedicated employees. The team

ensure that the design is based on

• Design for high-temperature-low-sag

supports Eltel’s construction projects and

optimal power supply availability for

conductors and optical ground wire

also performs major engineering tasks on

the system, and that it is safe to install

installation

behalf of Eltel’s main customers.

and maintain. Health, safety and environmental risks are also evaluated

Given that less and less engineers are

during the design process.

graduating from Europe’s universities, the competence and size of Eltel

Know-how for larger markets

Major parts of all transmission line towers built and under construction in Poland

Comprehensive engineering services

have been designed by Eltel. Recently,

• Transmission and distribution (T&D)

Eltel designed a new licensed series of

Transmission, and differentiates the

grid planning and feasibility studies

110 kV towers compliant with the latest

Company from its competitors.

• System studies including analysis of

EU standards. Eltel Krakow has also

Krakow is a major benefit for Eltel Power

connection of new generations and

continued to support the Company’s

The investment process in power

consumers and renewable power units

growth in other markets such as the UK

transmission starts with a technical

(for example, wind farms and biogas

and in Africa.

concept. The future success of the

units)

concept depends on applying the correct

• Comprehensive design and engineering

and optimal technical solution to the

for T&D lines and substations

14

Engineering services


Successful customer cases

technology’ which involved the use of

documentation, legal issues

conductors.

of the new 110 kV OH line Kietrz-

3. Concept for medium-voltage

By applying design calculations on

from 2015–2020 for ENERGA Gdansk.

1. Comprehensive design

associated with the reconstruction Głubczyce.

concrete poles, instead of steel lattice

3M Curlew ACCR (composite reinforced)

distribution network development

Optimisation and justification of planned

towers as initially required in technical

capital expenditures in the medium-

specifications, the outcome was a

voltage network in the City of Gdansk.

decreased right-of-way required for the line construction, and subsequently a shortened time to obtain the right-of-way permit. 2. Design work for National Grid

UK for refurbishment (steel works,

4. Comprehensive design

documentation for construction of

400 kV OHTL Belchatow-Trebaczew for JV ZWSE Rzeszow and Eltel Networks Olsztyn.

Construction of a new 400 kV line

fittings and conductor replacement)

providing power evacuation from the

of several 400 kV lines.

Belchatow Power Plant (850 MW)

The design team adapted the rigorous

including improving network system by

drawings standards and procedures

the application of line factors exceeding

of the National Grid and utilised ‘new

previous standards in use.

Engineering services

15


Securing electricity supply Today’s modern society depends heavily

In Finland, Eltel, together with Elenia

“The work is performed faster, costs are

on uninterrupted electricity supply

Networks (former Vattenfall Networks)

lower, and the cables are safely under

with more demands being made by

and a local teleoperator, established a

the ground during storms. The equation

end customers and regulators. Power

pilot project. The project involved the

is simple and we expect this to become

outages are not accepted by consumers,

use of new machinery with multiple work

more commonplace”.

and pressure for all-time availability is

phases. As the cabling is often done by

stressed. Deployment of more renewable

public roads, close collaboration with the

After a successful pilot, Eltel signed

energy sources, and storms and other

local traffic administration was needed.

a three-year contract to continue

weather conditions set other challenges for network reliability. Availability of electricity is also a national security

underground cabling projects. The Customer satisfaction with time,

number and size of cabling projects will

cost and availability

be significantly increased in the coming

The novelty with the new method is

few years. Eltel’s role is to continue to

are changing with a goal to secure

that, besides opening trenches, the new

work with distribution operators so that

functionality of our modern societies.

machine lays the cable and covers it

uninterrupted signal and electrical supply

with sand. Implementation time is less

will be ensured.

issue. As a result, regulation models

Developing new cabling methods

than half of the traditional method. The

One of the most efficient ways to

customer was very satisfied with the pilot

improve network reliability is to build

project. Construction and Procurement

weather-proof networks, which

Manager Jarkko Kohtala of Elenia

means installing cables underground.

Networks commented:

Underground cabling is typically more expensive than building overhead lines. Finding new methods of installation is important to justify the investments and also minimise the price impact of better availability of electricity.

16

Electricity supply


Developing field services cost efficiency cost and staff utilisation rates, contract

Outsourced field service markets are

is widely used at Eltel. The system’s

competitive and put high demands on

scheduling tool dispatches the closest

operators and their service partners. In

technician in the field to the site, sends

care services, customer requirements

work order information to the car’s

are increasing; quick resolution times are

navigator and transfers data from the

expected. Demand for cost efficiency

navigator to Eltel’s ERP system. This

puts pressure on field production

results in more proactive resource

processes, tools and organisations.

planning, shorter response times,

Emphasis is placed on reporting and

reduced driving times and lower

information systems; customers need

environmental impact.

people keeping the organisation flat

The scope of data is more detailed

efficient and cost effective.

constant feedback during deliveries. Optimal processes

and shows the breakdown of time

Eltel’s optimal processes are based

and cost between travelling and site

on customer requirements and tuned

work. The reporting and analysis of

up with our best-practice experience.

performed jobs is faster and more

These practices are described in

accurate. Subcontractor work can also

Eltel’s Business Unit Manuals and

be scheduled and reported in the same

complemented with local instructions.

way as for internal technicians.

and project profitability, operational leverage and working capital efficiency. In 2013, Eltel introduces business unit specific production KPIs based on international benchmarking. The final step is employee motivation and attitudes. Eltel promotes proactivity. More responsibility is given to our and lean, and support service functions

We are always looking for better ways to deliver our services, and continuously implementing new methods.

Accountability for performance

Eltel’s organisational structure defines the roles and responsibilities for both

Tools that support the delivery

teams and individuals. Everyone is

Mobile workforce management based

in charge of their own performance.

on a GPS car surveillance system

Reported components are standard

Field services efficiency

17


Managing projects the Eltel Way Many challenges in railway projects

Also the knowledge of older technologies

Railway projects are challenging from

may not be present in today’s

a technical, planning and staffing point

organisations. Depending on the type of

of view. When the track is in place, all

project, also the right type of machinery

works need to be planned in detail as the

for the job is needed. These are called

effective working time could be as little as

‘Yellow machines’ at Eltel.

1–2 hours at night. Weather conditions must be taken into consideration as temperatures may drop to -35°C, which is critical both for people and machinery.

Holistic approach to managing project excellence

The methodology in Eltel’s Rail Infrastructure projects is described

High demand on people skills and

in the Rail Business Unit Manual. All

motivation needs to be supported

experience and best practices from

with good training and continuous

the Nordic countries were collected

development of processes, tools and

in this document. The elements are

management. Annual training ensures

clear project phases, their control and

skills and competences are up to date.

reporting practices, expected outcomes

H&S issues must have a high priority.

of each phase and templates to be used.

Working close to trains that are operated

There are different categories depending

at 16 kV and take 1000 metres to stop

on the project size, which differentiates

requires special attention. In railway

the amount of planning, personnel and

renovations, the challenge in planning

reporting required.

is often missing documentation of all changes made during the last 50 years.

18

Project management


New KPIs linked with the factors of a

project. Technicians from Eltel’s teams

major risk, and the impact on schedule

successful project execution have been

in Finland and Sweden worked together

and budget is significant if execution is

established, and they also form the basis

under one common project management

not performed as planned. The project

of bonuses for the project organisation.

and planning process to deliver the

was delivered on schedule.

Due to the previously described

project on schedule.

challenges, performance according to the project plan is critical to meet the time, cost and quality targets.

2. New loading track LKAB, Kiruna

4. Helsinki Ring Rail

In the greater Helsinki area, Eltel is

‘Nya Sjöbangården’

executing a design and build rail

200 km north of the polar circle in

electrification network. It is a 20 km

Today’s rail networks are becoming

Sweden, Eltel executed a design and

double track, both indoor and outdoor,

more and more integrated, and

build project for a new track. Eltel

railway electrification project. For the first

communications happen over fibre and

was a subcontractor responsible

time in Finland, a fixed catenary solution

radio networks. Eltel’s strong position in

for the electrification, signalling and

in tunnels is being introduced. Design

communications technologies, experience

telecommunications. The project was

work has been completed and, with

in electrification solutions and overall

delivered on schedule with the additional

installation under way, the project will

service and project culture to succeed in

bonus of reaching the go-live milestone.

conclude in 2015.

3. Oslo tunnel cabling routes

5. Finnish catenary change projects

Successful customer cases

network, Eltel executed complicated

placed project management, people

1. Haparandabanan 250 km/h

cabling trenches and routes with track

motivation and skills, processes, safety

high-speed line

possession time of only 4 hours per

and logistics under special pressure.

In North Sweden, Eltel executed a

night, 7 days a week. The complexity

Projects were delivered on schedule.

demanding 150 km rail electrification

of both logistics and planning can be a

a competitive market provide added value for customers.

In the centre of the Norwegian rail

Possession time of only 4 hours per night

Project management

19


Smart Grid innovations By developing field service concepts

energy consumption. In SGs, greater

Network and Data Management. Already

and processes, Eltel has taken a well-

energy management is needed; more

since 2006, Eltel has been an active

established and strategic pole position

complicated network architectures and,

player in implementing Smart Metering

in Smart Grids (SGs). The traditional

for example, network control systems

infrastructures. Future goals are not only

EL value chain is evolving into a value

must be developed. Historically, power

developing solutions, but also developing

network consisting of leading world-

grids were not engineered for two-way

SG principles.

brand companies. Eltel’s innovative and

energy flow. Also the quality of electricity

analytic approach has led to proof-of-

is deteriorating due to millions of inverter

concept and production-level projects

solutions, for example in solar energy.

being successfully executed. A better

Electric grids are facing the most

perception of new business benefits

challenging development stage since

value comes from monetary benefits,

all stakeholders in many practical and

they were invented. The possibilities are

better predictability of electricity network

measurable ways.

endless. Investment of billions of euros

behaviour or improved safety.

Successful cases providing value for customers

Several successful cases exist where the

is needed offering Eltel an opportunity to Smart Grid objectives

expand its portfolio of Infranet Services.

control energy. SGs help us achieve

Eltel solutions

time. This creates better asset usage

Eltel’s development plan consists of

and improved understanding of

predictable network behaviour. They

Wind Power, Smart Buildings and Street

its lifetime. The next step is remote

also help consumers influence their

Lighting, Electric Traffic and sensoring for

temperature control

There is a global imperative to save and better energy economy and more

20

Smart Grid innovations

• High-voltage transformator temperature can be measured in real


• Electric vehicle quick charging systems

• A revolutionary hand-held device that

are engineered and delivered as a

remotely detects if voltage is present

turnkey solution taking into account

on a transfer line has been developed

a site’s generic energy volume,

to improve safety for technicians in

physical charger locations, logistics

hazardous circumstances

and commissioning. Beneficial for mobility service operators • Non-galvanically medium-voltage networks are measured remotely using the latest product innovation. This provides a better real-time view of network status, and minimises black-out time with the help of more efficient fault location

Smart Grid innovations

21


Power Transmission business unit

Significant investment in power transmission Power Transmission is Eltel’s most

With vast telecommunications experience,

significant growth area. The market is

Eltel provides a total solution to grid

driven by ageing networks, deregulation

operators.

and an increase in demand for renewable power. Market integration in Europe is driving interconnection projects.

Positioned to grow

Intensive investment has created an all-

Worldwide projects are initiated with

time high order book, and provides Eltel

financing by the World Bank, the

with an excellent market in which to thrive.

African Development Bank, the EU and national guarantee institutions. This level

Eltel’s main markets are in Northern

of investment calls for partners with

Europe, including Poland, and in Africa.

experience, sufficient resources and

Eltel’s geographical presence and ability

the expertise to competently execute

to reallocate resources from country to

projects. Here, Eltel is second to none.

country contribute to steady financial performance.

Unique competence and experience Eltel’s services consist of high-voltage power lines, substations and system engineering, typically up to 400 kV; and electrification projects in the range of 0.4 –110 kV. The Company has experience in contracts that include engineering, land permitting, procurement of equipment, and onsite installation and commissioning.

22

Business unit review


Power Distribution business unit

In-depth collaboration with utilities Power distribution is driven by increased

utilities and technology vendors is in

outsourcing, new builds and network

operation in many countries.

modernisation. Most distribution system operators (DSO) will keep OPEX levels at a generally higher level than before. Growth drivers are introduction

Utility strategies and smart grids support future expectations

DSOs have increased annual CAPEX,

of renewable energy sources (RES),

and the current growth driven by

increased requirements on net reliability

connection of RES and smart grids is

and smart grids.

expected to continue.

Great understanding of utility

Its geographical footprint and good

service needs

position in smart grid development

Eltel’s services consist of all build,

provide excellent opportunities for Eltel

connect and care works in the voltage

to become one of the most important

range of 0.4–132 kV. Sub-solutions

players in this sector.

cover distribution, transmission care, substations, wind power, smart grid and outdoor lighting. Eltel has successfully built wind power parks including turbine installations, substations and connections. Design and implementation of electric vehicle charging networks in collaboration with

Business unit review

23


Railway Infrastructure business unit

Demand for infrastructure modernisation Due to its age and an increase in traffic

Eltel has vast experience in rail

volumes, Northern Europe’s rail network

electrification. The Company has

is under pressure and requires constant

extended its market position significantly

maintenance and investment. The rail

in operations and maintenance, and

market is dependent on government

has well-proven references for example

spending and political decisions. Delayed

with Banedanmark and Trafikverket ICT

investment puts a greater burden on

in Sweden. In 2012, Eltel entered the

maintenance performance. The Nordic

Norwegian market.

climate also affects the infrastructure. Deployment of the European signalling system and electrification of Europe’s rail

Swedish infrastructure the largest

Outsourcing levels vary across countries.

network are underway. Local investment

Sweden is the largest potential market

in trams is strong in the short term.

due to the size of its rail network. Norway has the highest growth possibility.

Well-covered presence

Overall, market demand is stable with

Eltel’s sub-solutions are electrification,

investment budgets.

in the Nordics

signalling, telecommunications and track work. Services consist of engineering, procurement and construction for design, build and care projects. Customers are rail and road authorities, vendors and constructors.

24

Business unit review

most fluctuations caused by national


Fixed Telecom business unit

Supporting tomorrow’s dataintensive applications The current fixed telecom trend is a shift towards higher degrees of technical

Large and stable market

Supported by national broadband plans,

sophistication. Recently, there has

the fixed telecom market is expected

been a large increase in data amounts

to steadily develop. Copper networks

consumed by end-users due to the

continue to provide care work while new

usage of Spotify, Netflix and social

investments focus on fibre.

media. Fixed networks are the basis of the high-demand, IT-based services

Eltel’s main markets are Finland,

required today.

Sweden, Norway and Poland. Additionally, Eltel partners with the

Services close to customers

Eltel is active within the outsourced

leading fixed telecom operators in the Baltics, Denmark and Germany.

sector of the services performed in access and transport networks. As a full-service provider in build, connect and care services, Eltel pioneers solutions that boost the capacity and capability of networks. Eltel’s range of options, from standard products to customised solutions, maximises the availability of fixed telecom and data networks and optimises resources to boost customer earnings.

Business unit review

25


Mobile Telecom business unit

Data growth drives market The Mobile Telecom sector is driven by an ever-increasing data demand fuelled by new consumer patterns and an

Good expectations in CAPEX and OPEX

Due to positive consumer patterns, new

increase in the use of smart phones and

technologies and potential outsourcings,

tablets. There is an ongoing fixed-to-

the outlook is good. 4G/LTE technologies

mobile substitution in most countries

drive infrastructure market growth and

as newer mobile technologies meet the

investment in 3G/2G networks is high.

increased demand for capacity by end

Recurring maintenance and fault repair is

users. TETRA rollouts and pressures to

still needed.

reduce cost and secure delivery increase outsourcing and strengthen the market

Eltel’s main markets are the Nordic

outlook.

countries – where Eltel is market leader – the Baltics, Poland and Germany.

Competitive service portfolio

Rollout projects are managed in many

Eltel reliably and cost efficiently

other countries. For Business Solutions,

provides high-level, cross-border

Homeland Security and Aviation, Eltel

services for all types of mobile telecom

mainly serves the Nordic countries.

and data networks for teleoperators, radio infrastructure owners, vendors and business customers. Services include planning and optimisation, first-line and second-line field and preventive maintenance, turnkey site implementation and rollouts.

26

Business unit review


Homeland Security and Aviation business unit

Public safety high on agenda Specialised experience of services

is shown by the set-up of Network

Homeland Security and Aviation (HS&A)

installations, maintenance and

Sweden and Copenhagen, Denmark.

sector. To reduce costs and meet budget

operations support for radio, tele and

cuts, increased outsourcing will be seen

data communications in HS&A. Eltel

in the defence industry. Large TETRA

has comprehensive and long-term

networks are currently being rolled out in

outsourcing contracts with the Swedish

many European countries. Changes to

civil airport authority and is recognised

EU directives will make it easier for foreign

as a supplier of complex and high-

firms to offer tenders and win contracts.

end solutions to the defence industry.

The public safety market is expected to be the main future driver for the

Eltel provides multi-technology

After rolling out the TETRA system, Eltel is today technical operator and maintenance contractor of the system in Sweden. Uniqueness of competence

Operations Centres in Gothenburg, This gives Eltel an excellent position in the Managed Services offering. Positioned for growth

Eltel’s position in Sweden is unique. While other countries are still planning to outsource air traffic control functions, Sweden did so already several years ago. Eltel utilises its vast experience and excellent results to win new contracts. In TETRA, Eltel recently won a rollout contract in the largest zone of Norway. Eltel’s ability to deploy communications technologies with electricity and IT/IP and its vast geographical presence have opened new markets and will continue to offer larger opportunities in the future.

Business unit review

27


Developing people is in our culture Eltel’s everyday work often goes by

at all levels, to seize opportunities for

check-ups, a focus on health and

unnoticed. It’s only when, for example,

personal development. We find this helps

safety issues and encouragement for

there’s a power cut or no access to the

each and every one of us to be more agile

participation in sporting activities, Eltel

internet that people begin to appreciate

and to quickly respond to changes in the

ensures all employees are not only

the availability of electricity and

Company and the market. It also keeps

competent, but also fit for their job.

communications.

us motivated to meet and even exceed customer expectations.

Eltel has close to 7000 technicians

Continuous change calls for constant development

working in often challenging conditions

Self-development is actively supported

to help network operators keep their

by HR. Our competence training relates

changing with technology innovations and

services up and running. Dedicated to

to job-related expertise, and also

new products implemented all the time. In

providing fast and efficient support, their

provides management and leadership

Eltel, we make sure that our professionals

responsibilities include the installation,

support. Understanding the basic

use all their skills and abilities to succeed

maintenance and repair of transmission,

principles of how Eltel works, the Eltel

in this competitive but rewarding and

telecommunications, railway networks

Way, is the cornerstone of all training and

challenging career. People are our most

or power distribution systems and

development.

important success factor.

equipment. Regardless of their role, each of them is a well-educated and trained professional. And proud of it!

Fit for the job

As well as having the best professional knowledge, physical strength, a good

Encouragement

mental attitude and the ability to work

Naturally, Eltel ensures its technicians

Good health is a must. With regular

for self-development

receive the training required by law. Where we excel is by encouraging employees,

28

People development

in high places are vital characteristics.

The Infranet industry is continuously


Lauri Kallio,

Network Technician, Power Distribution BU, Finland – ongoing participation in certificate trainings

Erika Eidziulyte,

District Manager, Mobile Telecom BU, Lithuania – Eltel Leaders training program participant

People development

29


Winning team attitudes In order for a team to be really successful, given the choice between knowledge,

1. A passion to win. Similar to the

business world, only gold medals count.

perseverance and the right mental

Number 2 is the first loser, and the

attitude, the majority of people would

winner takes it all. Would we be happy

attach most importance to having the

if our customer told us: “We chose your

right mental attitude. How right they

competitor, but you were a close number

would be!

2”? No. And we all know that even if we won 5–2 yesterday, today is a new game

What is the right mental attitude? From

which starts at 0–0. We have to perform

extensive work with a focus on peak

to the best of our ability every day.

performance in both elite sports and in more than 300 international companies, I have made some interesting observations.

2. Constant improvement. Don’t limit

your challenge – but challenge your limit. The president of Toyota, Akio Toyoda, put it well when he answered the question: Why is Toyota so successful? He said: “We do not think we are successful. We can always make a car that is a little better, safer, cheaper, lighter, more comfortable, that uses less fuel”.

30

Winning team attitudes


3. Interest in results. It’s not very

5. Strategy and tactics concern all

ask his team-mates after the game:

how they can contribute, and what they

probable that a football player would

can do to help their team-mates. They

immediately. And they have systems

know that by helping a team member,

and figures that are very easy to follow

they are also helping themselves.

up, and that everyone understands.

Because the team is more important

How many people would watch the

than the individual player. There is no

football World Cup final in July, if the

guarantee they will play in the next

preliminary result came in November,

match. But, by always giving their best,

and the definitive result in March, written

the chances they will play tomorrow

on 25 pages that they did not fully

increase.

understand? 4. Mutual respect and trust. No

must focus both on team spirit and

discussion of “Who is the most important

individual performance at the same time.

player in the team”. No one speaks badly

If it’s to be – it’s up to ME!

everyone in the team does their best.

communication, performance psychology and attitude change. From mental training and motivational work with top athletes, Olympic gold medallists, ice hockey and football teams and even Nobel Prize winners, he has created methods for establishing winning attitudes and achieving peak performance also in business organisations. He has vast practical experience of attitude change having worked in excess of 30 years in

The team is also fully aware that they

mistakes. They take for granted that

motivation, hypnosis/

players. Everyone has a clear picture of

“What was the result?”. They all know,

about other players or blames them for

Dr Oom specialises in

over 30 different countries with more than 300 different companies.

Jörgen Oom

PhD Psychology, Sweden

Winning team attitudes

31


Corporate responsibility in focus Eltel works with customers whose

solutions in the long term. Despite

Eltel has made a great journey from

core business is the functionality of our

working in a highly competitive

being a Nordic-based company to being

society. Availability, cost and sustainability

market, our financial performance

a truly multi-cultural corporation where

are key requirements of utility and

has been stable ensuring future

cross-border collaboration between

other infrastructure services. These

sustained development. Our financial

employees is natural.

set important expectations for us as

reporting practice is at a high level, and

their partner. Eltel’s ambition is to be an

performance predictability has greatly

H&S was a strong focus in 2012. Eltel

industry benchmark in many aspects of

improved.

works with high electrical voltages and at

corporate responsibility, both operationally and strategically. Due to our business

great heights, and working conditions vary Social responsibility means taking

worldwide. Updated Group-wide H&S

care of our employees and being a

principles, code of conduct, consequence

position to make a positive impact on

good citizen in the societies in which

management, and a new reporting

sustainable development.

we operate. Employee well-being is

practice for KPIs were introduced in 2012.

crucial for a service company with

Working methods, tools and attitudes

Economic expectations of

8500 people in various conditions

are developed continuously to eliminate

stakeholders relate to competitiveness

and cultures. We develop professional

hazardous situations in the field. Sickness

and profitability. Customers expect Eltel

and leadership skills in all employees,

absence is 3% and lost time injury

to serve both short- and long-term

offer occupational health services, and

frequency was 11 in 2012. In 2013, we

needs. This is only possible when we

promote participation in sports activities.

will focus on safety walks and near-miss

generate profits short term and secure

Our ambition is to be the industry’s best

reporting to prevent accidents.

resources to develop operations and

workplace.

definition and portfolio, we are in pole

32

Corporate responsibility


Environmental responsibility is

present in the design and execution of power lines or mobile base stations. Optimisation of logistics and movement of a fleet of over 4500 vehicles has been developed to reduce costs and emissions. GPS solutions have reduced driving distances by up to 15%. We participate actively with customers and partners in deployment of charging networks for electric vehicles and pilot their usage in our own fleet. Eltel’s power network, renewable energy and smartgrid activities and innovations have a direct impact on improving energy efficiency and safety in our society.

Corporate responsibility

33


Eltel Management team Juha Luusua

President, Power Distribution

Axel Hjärne

President and CEO

Jonas Vestin

President, Smart Metering

David Persson

Chief Financial Officer

Eltel Board of Directors Gérard Mohr,

Gustav Bard,

Jean Bergeret,

Mattias Eklund,

Tomas Ekman,

January 2012 –

August 2010 –

August 2010 –

August 2007 – May 2012

May 2012 –

Chairman

34

Board member

Management and Board of Directors

Board member

Board member

Board member


Sonny Nielsen

President, Mobile Telecom

Päivi Hautamäki

General Counsel and Group Secretary

Fredrik Häggström

President, Rail Infrastructure

Hannu Tynkkynen

Senior Vice President, HR and Communications

Fredrik Menander

President, Power Transmission

Matti Kyytsönen,

Thomas Hofmeister,

Erkki Nikoskelainen,

August 2007 –

August 2010 –

August 2010 –

Board member

Deputy member

Deputy member

Management and Board of Directors

35


www.eltelnetworks.com


Eltel Annual Review 2012