Eltel acquires a platform for expansion of smart metering in Germany

Eltel’s power distribution business acquires the metering service company U-SERV

Eltel has today signed a contract to acquire U-SERV GmbH, a company operating in
the electricity and gas metering sector in Germany. Eltel currently has a strong
market position in the smart metering sector of the Nordics with reference of
more than five million meter installations including new order backlog of 1.6
million installations. This acquisition is now expanding Eltel’s footprint to
cover also the German market. U-SERV’s strong and rapidly growing local presence
in combination with Eltel’s vast international competence in smart meter
rollouts offers good potential for further growth.

U-SERV is one of the major meter service companies in Germany with net sales of
approximately EUR 9 million and approximately 50 persons with permanent
employment and an ability to mobilise more than 1,000 employees when needed. The
product offering of U-SERV comprises national electrical meter read-outs,
customer self-readings, replacements and gas adjustments. U-SERV’s installations
in gas applications offer Eltel a new opportunity to grow the smart metering
business. U-SERV is a growing company with a customer base of several dozens of
utilities including some of the major power distribution operators in Germany.
This customer base offers future opportunities for Eltel to expand its wider
service offering for distribution operators.

Eltel also acquires EVB’s field service assets and continues a business
development agreement with ATV Energie GmbH

Further Eltel has agreed to acquire field service assets of EVB Billing und
Services GmbH, a subsidiary of ATV Energie GmbH. The assets comprise EVB’s
customer base in metering related field services and an offer to the personnel
to transfer to Eltel. As part of the acquisition of U-SERV, the existing
business development agreement between U-SERV and ATV Energie GmbH will be
transferred to Eltel. Through this agreement, ATV, EVB and Eltel will
collaborate to expand the business for smart metering services in Germany. ATV
and EVB will participate in pre-sales customer meetings, sales negotiations and
general promotion of Eltel services in power distribution in Germany. ATV and
EVB have a profound knowledge of and good access to the German utility sector.

The European market will continue to offer significant future potential within
smart meter rollouts. The national time schedules for implementing smart
metering within the EU vary. While some of the countries already completed the
projects, others are starting implementations or have only initiated pilot
projects. In Germany new legislation, Digitale Energiewende, is scheduled for
completion in May 2016 to oblige utilities to deploy intelligent meter systems
during 2017 to 2032. Tendering for major smart metering projects is expected to
start in 2016. In Germany the total amount of electricity meter points amounts
to 43 million. Another growth opportunity is provided in the gas metering
market.

The acquisition of U-SERV and the asset deal with ATV are expected to be closed
during May.

Juha Luusua, President – Eltel Power Distribution comments:
“Eltel has been preparing an entry in the German smart metering market for some
time. After careful analysis and negotiations, we are happy to finalize this
process with the acquisition of German U-SERV. With the experience and current
position of U-SERV, combined with the collaboration agreements with the business
development partners ATV and EVB, we strongly believe that we have a winning
team in place. We welcome the employees of U-SERV and the field service team of
EVB to Eltel to build a smarter German energy system together”.

For further information:
Ingela Ulfves
VP - IR and Group Communications
Tel: +358 40 311 3009, ingela.ulfves@eltelnetworks.com

Hannu Tynkkynen
Director – Group External Communications and Sustainability
Tel: +358 40 311 4503, hannu.tynkkynen@eltelnetworks.com

About Eltel
Eltel is a leading European provider of technical services for critical
infrastructure networks – Infranets – in the segments of Power, Communication
and Transport & Security, with operations throughout the Nordic and Baltic
regions, Poland, Germany, the United Kingdom and Africa. Eltel provides a broad
and integrated range of services, spanning from maintenance and upgrade services
to project deliveries. Eltel has a diverse contract portfolio and a loyal and
growing customer base of large network owners. In 2015 Eltel’s net sales
amounted to EUR 1,255 million. The current number of employees is approximately
9,600. Since February 2015, Eltel AB is listed on Nasdaq Stockholm.