Teleste Corporation 1-12/2023: Difficult last quarter due to low delivery volume. Measures underway to reduce costs and improve profitability.

Teleste Corporation
Stock exchange release
February 9, 2024 at 8.30 a.m. EET




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

October-December 2023 in brief

  • Net sales decreased by 33.4%, amounting to EUR 30.7 (46.0) million.
  • Adjusted operating result decreased to EUR -1.4 (0.5) million.
  • Operating result decreased to EUR -2.3 (-0.3) million.
  • Adjusted earnings per share decreased to EUR -0.10 (0.02).
  • Earnings per share decreased to EUR -0.15 (-0.01).
  • Cash flow from operations decreased to EUR -1.9 (2.5) million.
  • Orders received decreased by 2.6% to EUR 32.1 (32.9) million.

The Board of Directors proposes to the AGM that no dividend will be distributed on the basis of the balance sheet to be adopted for the financial period that ended on 31 December 2023.

January-December 2023 in brief

  • Net sales decreased by 8.3%, amounting to EUR 151.3 (165.0) million.
  • Adjusted operating result decreased by 41.2%, amounting to EUR 1.2 (2.0) million.
  • Operating result increased to EUR -0.5 (-4.8) million; the result for the comparison period included impairment of development expenditure in the amount of EUR 5.4 million. 
  • Adjusted earnings per share increased to EUR 0.09 (-0.01).
  • Earnings per share increased to EUR 0.00 (-0.31).
  • Cash flow from operations increased significantly, amounting to EUR 10.8 (-7.8) million.
  • Orders received decreased by 20.7% to EUR 149.6 (188.5) million.
  • The order book decreased by 1.4% and amounted to EUR 130.4 (132.2) million.
  • The Belgian tax reassessment decision issued in 2022 was overturned in March in accordance with Teleste's request, which resulted in a positive impact of EUR 1.7 million on income taxes in the income statement during the first quarter. This also had a positive impact on the result and earnings per share for the financial period (EUR +0.09).
  • The engineering and services businesses of the Broadband Networks business in Switzerland were divested in June.

Outlook for 2024

Teleste estimates 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.

Key figures

EUR million 10-12/23 10-12/22 Change  1-12/23  1-12/22 Change
Orders received 32.1 32.9 -2.6% 149.6 188.5 -20.7%
Order book 130.4 132.2 -1.4%
Net sales 30.7 46.0 -33.4% 151.3 165.0 -8.3%
Adjusted EBIT 1) -1.4 0.4 >-100% 1.2 2.0 -41.2%
    Adjusted EBIT, % 1) -4.6% 0.9% 0.8% 1.2%
EBIT -2.3 -0.3 n/a -0.5 -4.8 n/a
     EBIT, % -7.6% -0.6% -0.3% -2.9%
Result for the period -2.8 -0.3 n/a -0.5 -5.9 n/a
Adjusted earnings per share, EUR 1) -0.10 0.02 >-100% 0.09 -0.01 n/a
Earnings per share, EUR -0.15 -0.01 n/a 0.00 -0.31 n/a
Cash flow from operations -1.9 2.5 >-100% 10.8 -7.8 n/a
Net gearing, % 51.7% 61.2%
Equity ratio, % 45.4% 39.7%
Personnel at period-end (FTE) 750 844 -11.1%

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

Comments by President & CEO Esa Harju:

“The last quarter of the year was difficult for us by several measures. In December, we revised our market guidance for the financial year 2023 due to lower-than-forecasted deliveries. We mentioned at the same time that due to the uncertainty in the market outlook we have initiated a series of measures to improve the profitability of the business and to re-prioritize activities. These measures aim to reduce costs and ensure positive cash flow. The company intends to achieve annual cost savings of 6 million euros, and we estimate that these savings will begin to be realized gradually from the first quarter of 2024 onwards, over the years 2024–25. We also initiated new employee change negotiations in Finland on January 9, 2024.

Delivery volume and revenue for the Broadband Networks business remained very modest in the last quarter of 2023, due to low market demand. This was due to the generally deteriorated economic situation, cost-saving measures by European operator customers, and their inventory optimization. The European market demand is expected to remain uncertain also in 2024, partially also due to the technology transition to next-generation cable and fiber-based technologies. The North American market demand also slowed down in the second half of 2023, as operators shifted and scaled down their planned investments. However, the North American market is expected to gradually recover during 2024. We will start commercial deliveries of our next generation 1.8G smart amplifiers to North American customers in the first quarter of 2024. North-American market is expected to progressively show in our revenue during 2024.

Also in the Public Safety and Mobility business, we fell short of end-of-year expectations and the revenue decreased in the last quarter, even though the market itself remained relatively resilient to macroeconomic challenges. However, orders received grew compared to the comparison period, and at the end of the year, the order backlog was slightly higher than the previous year. Measures to improve profitability, both in terms of sales prices and variable costs, have produced positive results, and the worst problems caused by the component supply chain disturbances have begun to ease gradually. Many projects in our order book with rolling stock manufacturers will continue in 2024, and alongside this, we aim for growth especially with public transport operators and in the maintenance business.

The clarification of the company's group structure and the separation of the business units under their own legal entities is proceeding as planned. This will improve the operational management of the business units and increase the operational flexibility of the business.

For 2024, the primary objective of the Broadband Networks business is growth in North America, which we expect to compensate for the more uncertain market outlook in Europe. In the Public Safety and Mobility business, we continue to develop our operations operationally and aim for a moderate increase in business volume in a controlled manner. As Teleste Group for 2024, we aim for better business profitability compared to the previous two years.”

For further information, please contact:

Esa Harju
President and CEO

Juha Hyytiäinen

tel. +358 2 2605 611

About Teleste 
Teleste offers an integrated product and service portfolio that makes it possible to build and run a better networked society. Our solutions bring television and broadband services to you, secure your safety in public places and guide your use of public transport. With solid industry experience and drive for innovations, we are a leading international company in broadband, security and information technologies and related services. We connect with our customers through a global network of offices and partners. In 2023, Teleste's net sales reached EUR 151.3 million and it had approximately 800 employees. Teleste is listed on Nasdaq Helsinki. For more information, visit