Teleste Oyj - Interim report (Q1 and Q3)

Teleste Corporation interim report 1 January to 31 March 2024

Teleste Corporation

Stock exchange release

May 3, 2024 at 8.30 a.m. EEST

TELESTE CORPORATION INTERIM REPORT 1 JANUARY TO 31 MARCH 2024
TELESTE CORPORATION: Net sales decreased, adjusted operating result IMPROVED.
Cash flow from operations increased.

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

January-March 2024 in brief

-          Net sales decreased by 19.3%, amounting to EUR 36.6 (45.3) million

-          Adjusted EBITDA increased by 4.3%, amounting to EUR 3.1 (2.9) million

-          Adjusted operating result increased by 6.0%, amounting to EUR 1.5
(1.5) million

-          Operating result decreased to EUR -0.4 (1.2) million

-          Adjusted earnings per share were EUR 0.08 (0.14)

-          Earnings per share decreased to EUR -0.02 (0.13)

-          Cash flow from operations increased to EUR 7.3 (2.0) million

-          Orders received decreased by 25.2% to EUR 30.5 (40.8) million

-          The order book decreased by 2.6% and amounted to EUR 124.3 (127.6)
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 (unchanged)

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.


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                        |1‒3/2024|1-3/2023|Change  |1‒12/2023|
+-----------------------------------+--------+--------+--------+---------+
|Net sales                          |36.6    |45.3    |-19.3%  |151.3    |
+-----------------------------------+--------+--------+--------+---------+
|Adjusted EBITDA 1)                 |3.1     |2.9     |4.3%    |7.2      |
+-----------------------------------+--------+--------+--------+---------+
|Adjusted EBIT 1)                   |1.5     |1.5     |6.0%    |1.2      |
+-----------------------------------+--------+--------+--------+---------+
|    Adjusted EBIT, % 1)            |4.2%    |3.2%    |-       |0.8%     |
+-----------------------------------+--------+--------+--------+---------+
|EBIT                               |-0.4    |1.2     |>-100.0%|-0.5     |
+-----------------------------------+--------+--------+--------+---------+
|     EBIT, %                       |-1.0%   |2.7%    |-       |-0.3%    |
+-----------------------------------+--------+--------+--------+---------+
|Net result for the period          |-0.5    |2.2     |>-100.0%|-0.5     |
+-----------------------------------+--------+--------+--------+---------+
|Adjusted earnings per share, EUR 1)|0.08    |0.14    |-41.9%  |0.09     |
+-----------------------------------+--------+--------+--------+---------+
|Earnings per share, EUR            |-0.02   |0.13    |>-100.0%|0.00     |
+-----------------------------------+--------+--------+--------+---------+
|Cash flow from operations          |7.3     |2.0     |>100.0% |10.8     |
+-----------------------------------+--------+--------+--------+---------+
|Orders received                    |30.5    |40.8    |-25.2%  |149.6    |
+-----------------------------------+--------+--------+--------+---------+
|Order book                         |124.3   |127.6   |-2.6%   |130.4    |
+-----------------------------------+--------+--------+--------+---------+
|Net gearing, %                     |42.5%   |58.4%   |-       |51.7%    |
+-----------------------------------+--------+--------+--------+---------+
|Equity ratio, %                    |47.4%   |41.6%   |-       |45.4%    |
+-----------------------------------+--------+--------+--------+---------+
|Personnel at period-end            |703     |842     |-16.5%  |750      |
+-----------------------------------+--------+--------+--------+---------+

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

Comments by President & CEO Esa Harju:

[A building with a parking lot

Description automatically generated]

“The first quarter of fiscal year 2024 was two-fold. Our turnover decreased from
the comparison period, but relative profitability improved and cash flow from
operations was strong. We also achieved important progress in implementing our
strategy. However, the outlook for the whole year is still overshadowed by
market uncertainty, and we expect the second quarter to be difficult.

Orders received and turnover decreased in the Broadband Networks business unit,
due to very low demand in the European market. However, relative profitability
improved due to an increase in gross margin and cost saving measures. The
European market is expected to remain uncertain during 2024. Demand is expected
to improve at the earliest in the second half of the year. As the first supplier
in the industry, our 1.8GHz ICON smart amplifiers, designed for the North
American market, have now reached general availability status and the first
field deployments to our customers have started. Four North American operators
have confirmed smart amplifier orders to Teleste and deliveries will gradually
begin to affect our turnover during the current year, however, so that the North
American share of the entire Broadband Networks business volume is still small
in 2024.

Orders received grew in the Public Safety and Mobility business unit. However,
turnover was below the comparison period. One reason for this was the political
industrial action in Finland, which closed our factory for several days and made
deliveries difficult. Another reason was the slower than expected progress of
one significant video surveillance project. Adjusted operating profit increased
as gross margin rose significantly higher compared to the comparison period.

We continued several measures to improve profitability and to prioritize our
operations. Cost savings are targeted at all company's operations. The change
negotiations started in Finland on 9.1.2024 led to several dismissals or part
-time employment.

As we announced in a stock exchange release on 25.4.2024, we have changed and
updated our reporting practices. These changes increase the transparency of
investor communication. The clarification of the company's group structure and
the reorganization of business units under their own legal companies are
proceeding according to plan.

We have steadily increased our focus on corporate social responsibility. As
evidence of this, we achieved a gold medal in EcoVadis' corporate responsibility
assessment in February.

In 2024, the main goal of the Broadband Networks business is to grow the
business in North America. This will compensate for the continued uncertainty in
the European market. In the Public Safety and Mobility business, we will
increase our strategic focus on train manufacturers and public transport
business. At the same time, we will continue to streamline our operational
activities.”

For further information, please contact:


Esa Harju
President and CEO

Juha 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.

Attachments:

05022767.pdf