REG - Hellenic Telecomms - Press Release Q4'2022 Results
23/02/2023 09:30
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RNS Number : 8464Q Hellenic Telecomms Organization S A 23 February 2023
OTE GROUP REPORTS 2022 FOURTH QUARTER AND FULL-YEAR RESULTS
Full-Year Highlights
· Healthy growth: Revenues up 3.6%, Adj. EBITDA (AL) up 4.0% on positive
momentum in Greece and Romania
· Greece revenues and EBITDA at 10-year highs
· Strong Free Cash Flow generation, in line with target, up 23.8% at
€597.1mn, Adj. Capex at €638.3mn
· Proposed €425mn return to shareholders
o Dividend of €0.5765 per share, up 3.3%
o €175mn share buyback program
Fourth Quarter Highlights
· Solid performances in Greece: Revenues up 2.2%, Adj. EBITDA (AL) up 3.2%
o Mobile Service Revenues up 3.0%, driven by growth in both postpaid and
prepaid
o Solid operational KPIs-FTTx subscribers up 26%, Record FTTH subscriber
additions (+27K)
· Group Revenues up 1.1%, profitability stable
(€ mn) Q4'22 Q4'21 Change 12M'22 12M'21 Change
Revenues 885.4 875.4 +1.1% 3,455.3 3,336.3 +3.6%
Adjusted EBITDA (AL) 331.8 331.8 0.0% 1,348.0 1,295.9 +4.0%
Margin % 37.5% 37.9% -0.4pp 39.0% 38.8% +0.2pp
Operating profit before financial and investing activities 51.0 151.4 -66.3% 590.5 812.3 -27.3%
Profit to owners of the parent (7.8) 100.5 -107.8% 388.6 487.0 -20.2%
Adj. Profit to owners of the parent 116.6 125.8 -7.3% 540.7 492.4 +9.8%
Basic EPS (€) (0.0185) 0.2218 -108.3% 0.8873 1.0720 -17.2%
Adjusted Capex 199.4 160.5 +24.2% 638.3 559.0 +14.2%
Adjusted Free Cash Flow (AL) 152.6 148.7 +2.6% 654.2 590.1 +10.9%
Free Cash Flow (AL) 137.8 100.6 +37.0% 597.1 482.5 +23.8%
Cash and cash equivalents 590.1 630.7 -6.4% 590.1 630.7 -6.4%
Net Debt 726.7 781.2 -7.0% 726.7 781.2 -7.0%
Note 1: The purpose and calculations of all 'Adjusted' data are detailed in
the Alternative Performance Measures Section (#APM)
Note 2: Changes in accounting policies and changes in reporting structure
(#AGENT)
Note 3: All figures in 2021 adjusted to reflect only continuing operations;
TELEKOM ROMANIA operations along with certain significant commercial
transactions (MVNO agreement and handset sales) that existed between TELEKOM
ROMANIA and TELEKOM ROMANIA MOBILE until the completion of the sale of TELEKOM
ROMANIA have been treated as discontinued operations. The sale was concluded
on September 30, 2021.
ATHENS, Greece - February 23, 2023 - Hellenic Telecommunications Organization
SA
(ASE: HTO; OTC MARKET: HLTOY), the Greek full-service telecommunications
provider, today announced audited consolidated results (prepared under IFRS)
for the quarter and full year ended December 31, 2022.
Message from the Chairman & CEO, Michael Tsamaz:
"OTE achieved another strong performance in 2022, delivering on all our
targets. In Greece, both full-year revenues and EBITDA were up by about 4%,
reaching levels not seen in a decade. As we enter a more uncertain period,
when macroeconomic and geopolitical instability might be exacerbated by
renewed competitive pressure, we are very well placed to defend our market
positions, supported by the superiority of our networks, services, and brand.
"We intend to maintain our capital investments at their current high
levels, to meet our ambitious objectives in terms of FTTH and 5G coverage,
and pursue our foray into new businesses, like our payment platform, Payzy, or
the Box food delivery system. We are also increasing our dividend per share
and committing to another sizable share buyback program, pursuing our
shareholder return policy."
Shareholder Remuneration Policy
On February 22, 2023, the Board of Directors of OTE revised its Shareholder
Remuneration Policy, to secure additional flexibility in the allocation of
dividends and share buyback, as follows:
"Provided the external and the macroeconomic environment remain stable, the
Company intends to distribute to its shareholders, through a combination of
dividend payout and Share Buyback Programs (whereby acquired shares will be
cancelled), between 70% and 100% of net free cash flow generated every year.
Starting from 2023, the cash dividend will account for at least 50% of total
shareholder remuneration and the remaining part will be allocated to share
buybacks.
"The Board will examine the use of any cash flow reserves which may be
accumulated in the medium term, together with past surpluses.
"The implementation of the revised Shareholder Remuneration Policy will start
in 2023 and will take into account the net free cash flow projections for the
current year, i.e. 2023, as the basis for calculating the aggregate
shareholder payout. In the same way, the Remuneration Policy will be applied
in the forthcoming years, i.e. the basis for calculating total shareholder
remuneration in 2024 will take into account the projections of net free cash
flow for 2024 and so on."
Outlook
In 2023, OTE expects to operate in an intensely competitive environment.
However, due to its superior brand attributes, notably its best-in-class fixed
and mobile networks and recognized customer excellence, and to its financial
resources, OTE is confident that it will successfully defend its market
positions regardless of short-term pressure.
To consolidate its leadership and further heighten its competitive advantage,
notably with the most demanding members of its customer community, OTE intends
to pursue its investment strategy, with particular focus on its FTTH
infrastructure, 5G network, and digitalization of all customer touchpoints. In
addition, OTE will continue to expand in adjacent services complementing its
offering and leveraging its brand image and customer relationships, notably
the Payzy payment platform launched in late 2022 and the Box food delivery
service.
OTE acts as a major Systems Integrator for businesses and the public sector in
Greece and the EU, providing state-of-the-art technology solutions, and
anticipates growing its ICT business in the coming years, supported by ongoing
deployment of the Recovery and Resilience Plan.
OTE expects to generate Free Cash Flow of approximately €500mn in 2023,
reflecting higher income tax payments, lower financial expenses, stable Capex,
and ongoing improvements in operational performance. In 2022, Free Cash Flow
had been positively impacted by a one-off tax benefit, resulting in
significantly lower tax payments. 2023 Group CAPEX should remain stable, at
approximately €640mn, as the company pursues the deployment of its FTTH
infrastructure.
Total 2023 Shareholder Remuneration is targeted at approximately €425mn,
corresponding to a proposed €250mn cash dividend (€0.5765 per share) and a
share buyback program of approximately €175mn.
OTE GROUP HIGHLIGHTS
OTE's Consolidated Revenues rose 1.1% in Q4'22 to €885.4mn. In Greece,
Revenues were up 2.2% to €813.9mn, mainly reflecting strong Mobile and ICT
performances. In Romania, revenues were down 11.8% at €73.0mn, mainly
reflecting the ongoing impact of mobile termination rate (MTR) cuts.
Total Operating Expenses, excluding depreciation, amortization, impairment,
and charges related to restructuring costs (primarily voluntary leave
schemes), amounted to €535.8mn in Q4'22, up 1.9% compared to Q4'21, as the
increase in direct costs more than offset savings achieved in other cost
areas, notably energy.
As a result, Group Adjusted EBITDA (AL) was unchanged at €331.8mn, resulting in a margin of 37.5%. In Greece, Adjusted EBITDA (AL) rose by 3.2% to €331.8mn, and the margin increased slightly, to 40.8%.
The Group recorded depreciation and amortization expenses of €292.3mn in
Q4'22, up 67.1% from Q4'21, reflecting a €115.9mn impairment related to its
Romanian operations. As a result, Group profit before tax amounted to
€33.4mn, down €109.6mn from Q4'21. Excluding this impairment charge,
Profit before Tax would have amounted to €149.3mn, up 4.4% compared to
Q4'21.
Adjusted Capex amounted to €199.4mn, up 24.2% from Q4'21 on ongoing FTTH and
5G rollout as well as higher investments in TV content. Capex in Greece and
Romania mobile stood at €186.8mn and €12.6mn, respectively.
Group Adjusted Free Cash Flow (AL) reached €152.6mn in Q4'22, up 2.6%
year-on-year, while reported Free Cash Flow (AL) stood at €137.8mn, up 37.0%
versus Q4'21, as lower income tax payments offset the increase in Capex. The
Group recorded significantly lower Income tax outflows in 2022 mainly as a
result of the tax benefit related to the disposal of Romania fixed operations
concluded in 2021.
The Group's Net Debt stood at €726.7mn at the end of 2022, down 7.0%
compared to 2021. The Group's ratio of Net Debt to 12-month Adjusted EBITDA
(AL) stood at 0.5x.
Revenues (€mn) Q4'22 Q4'21 Change 12M'22 12M'21 Change
Greece 813.9 796.4 +2.2% 3,155.4 3,046.1 +3.6%
Romania mobile 73.0 82.8 -11.8% 306.4 315.5 -2.9%
Eliminations (1.5) (3.8) -60.5% (6.5) (25.3) -74.3%
OTE GROUP 885.4 875.4 +1.1% 3,455.3 3,336.3 +3.6%
Adjusted EBITDA After Lease (AL) (€mn) Q4'22 Q4'21 Change 12M'22 12M'21 Change
Greece 331.8 321.4 +3.2% 1,310.0 1,265.4 +3.5%
Margin (%) 40.8% 40.4% +0.4pp 41.5% 41.5% 0.0pp
Romania mobile 0.0 10.4 n/a 38.0 30.5 +24.6%
Margin (%) 0.0% 12.6% -12.6pp 12.4% 9.7% +2.7pp
OTE GROUP 331.8 331.8 0.0% 1,348.0 1,295.9 +4.0%
Margin (%) 37.5% 37.9% -0.4pp 39.0% 38.8% +0.2pp
GREECE
Operational highlights
Q4'22 Q4'21 y-o-y change y-o-y Q4'22
diff net adds
Fixed line access 2,701,453 2,715,939 -0.5% (14,486) (275)
Broadband subscribers 2,318,241 2,255,703 +2.8% 62,538 20,240
of which Fiber service 1,448,224 1,148,871 +26.1% 299,353 17,809
TV subscribers 642,687 624,195 +3.0% 18,492 (1,089)
Mobile Subscribers 7,370,105 7,098,290 +3.8% 271,815 (41,340)
Postpaid 2,949,844 2,818,426 +4.7% 131,418 25,532
Prepaid 4,420,261 4,279,864 +3.3% 140,397 (66,872)
Fixed Segment:
In a fixed-line market that contracted throughout 2022 due to disconnection,
mainly of voice-only lines, OTE secured its position with a virtually
unchanged customer base in the quarter. The Company is making further progress
in broadband, as its competitive offering and customer upgrades led to another
increase in total broadband subscribers, to 2,318k. OTE's broadband customer
base increased by 2.8% compared to 2021 year end, as OTE captured the bulk of
total broadband market net additions in the quarter. Broadband penetration on
total fixed lines stood at 86% at the end of 2022, up from 83% a year earlier.
OTE recorded another quarter of year-on-year increase in total fiber
subscribers, up 26.1%, with 18k net additions in the quarter. The total number
of fiber (FTTx) subscribers stood at 1,448k, while penetration on the total
broadband base increased by 11.5 percentage points year-on-year to reach
62.5%. The share of subscribers using broadband speeds of 100Μbps or higher
stood at 44% of fiber connections at the end of Q4'22, compared to 25% one
year earlier, boosted by the Company's initiative to double speeds at no extra
cost for all eligible subscribers. OTE continues to enhance customer service,
maintaining its leading positions in key subscriber satisfaction metrics.
OTE upgrades its offering to subscribers on an ongoing basis, meeting the
growing demand for broadband connectivity through its expanding
fiber-to-the-home (FTTH) network. Having deployed its FTTH infrastructure to
an additional 350k homes in 2022, OTE's FTTH footprint reached 911k homes
passed as of year-end. OTE plans to continue speeding up FTTH deployment to
reach approximately 1.4 million homes by the end of 2023. Following record
quarterly additions of 27k, the total FTTH subscriber base reached 137k.
Total utilization on homes passed by OTE's infrastructure stood at 16% at year
end, compared to 11% one year earlier, reflecting enhanced network
availability and active sales initiatives. The Greek state subsidy program
promoting FTTH takeup expired at the end of September 2022. A new voucher
scheme should be launched later in 2023. Combined with OTE's stepped up
rollout, ambitious investment plan, and targeted campaigns, a new subsidy
scheme should further support customer acquisition and speed upgrades, driving
revenue growth.
OTE's TV subscriber base reached 643k at the end of 2022, an increase of 3.0%
compared to 2021, despite competitive challenges and piracy. Consistent with
its strategy to invest and offer superior TV content to its customers, the
Company leverages its streaming platform and enriched content portfolio.
Mobile Segment:
OTE achieved further year on year growth in its mobile customer base in the
quarter, to a total of 7.4mn, a 3.8% increase. Both the postpaid and prepaid
subscriber numbers rose during the year, by 4.7% and 3.3%, respectively,
consistent with the trends achieved in prior quarters. This represents the
sixth consecutive year of growth of the Company's postpaid subscriber base,
reflecting Cosmote's network superiority, consistently recognized by all major
market reviews and further evidenced by the extensive deployment of its 5G
network. Cosmote was once again recognized as Greece's Speedtest Awards™
winner by the recent OOKLA test for mobile network speed and quality and
distinguished as "the fastest mobile network in Greece" for the sixth
consecutive year. Cosmote subscribers enjoy average download speeds more than
double those of competing offers.
OTE pursues the expansion of its 5G network, exceeding its ambitious target of
80% population coverage at the end of 2022. The Company has set a target of
90% for 2023 year end. Athens, Thessaloniki and 37 other cities throughout
Greece already record more than 90% coverage. Speeds exceed 1Gbps in certain
areas. While continuing to promote data usage over its superior 4G/4G+/5G
network, OTE leverages the growth of data consumption, its rapid launch of 5G
services, and its network superiority to further strengthen its revenue base.
New Businesses:
During the quarter, OTE launched a new mobile wallet application, payzy,
operated by its Cosmote Payments subsidiary. The new service is steadily
gaining traction in the e-transaction and mobile payment service market, with
the total number of users exceeding 94k.
Financial highlights
(€ mn) Q4'22 Q4'21 Change 12M'22 12M'21 Change
Revenues 813.9 796.4 2.2% 3,155.4 3,046.1 3.6%
Retail Fixed Services 227.3 240.5 -5.5% 933.4 950.8 -1.8%
Including Data Com 248.7 257.6 -3.5% 1,021.6 1,027.8 -0.6%
Mobile Service Revenues 239.3 232.4 +3.0% 986.4 945.7 +4.3%
Wholesale Services 150.1 158.4 -5.2% 590.3 585.6 +0.8%
Other Revenues 197.2 165.1 +19.4% 645.3 564.0 +14.4%
Adjusted EBITDA (AL) 331.8 321.4 +3.2% 1,310.0 1,265.4 +3.5%
margin (%) 40.8% 40.4% +0.4pp 41.5% 41.5% +0.0pp
Total revenues from Greek operations rose 2.2% in the quarter to €813.9mn,
mainly supported by strong performance in mobile and ICT.
Retail fixed service revenues decreased by 5.5%, largely due to lower voice
revenues. As in the previous quarter, the drop reflects transition from
traditional voice services to IP solutions. Including revenues from data
communications services fixed revenues would be down by 3.5%. In broadband,
revenue growth was affected by service upgrades, improving customer loyalty
and successfully bolstering OTE's competitive strengths.
Mobile service revenues posted a solid increase of 3.0%. Both postpaid and
prepaid revenues were up in the quarter, reflecting the ongoing successful
execution of OTE's more-for-more strategy. For their part, roaming revenues
posted another positive quarter. In the full year, roaming revenues achieved
record levels, up 48% compared to 2021 and exceeding 2019 pre-pandemic levels
by more than 20%.
Wholesale revenues were down 5.2% in the quarter, as lower revenues from
low-margin international transit traffic offset revenues from increasing fiber
upselling to other operators in the market.
Other revenues were up 19.4% in the quarter, on strong ICT momentum. Revenues
from system solutions posted another solid increase, up 45% in the quarter.
The Company leverages its long-term experience in network infrastructure,
along with innovative and customized IT and cloud solutions and recently
announced its participation in major IT projects for European agencies and in
IT systems consulting services for the European Commission.
Total Adjusted EBITDA (AL) in Greece rose 3.2% in the quarter to €331.8mn,
yielding a strong margin of 40.8%, supported by top line increase and cost
savings in certain areas, notably energy costs.
ROMANIA MOBILE
Operational Data Q4'22 Q4'21 y-o-y change y-o-y Q4'22
diff net adds
Mobile Subscribers 4,165,629 3,690,607 +12.9% 475,022 84,001
Postpaid 1,854,272 1,734,675 +6.9% 119,597 29,888
Prepaid 2,311,357 1,955,932 +18.2% 355,425 54,113
(€ mn) Q4'22 Q4'21 Change 12M'22 12M'21 Change
Revenues 73.0 82.8 -11.8% 306.4 315.5 -2.9%
Mobile Service Revenues 48.9 56.4 -13.3% 203.0 221.8 -8.5%
Other Revenues 24.1 26.4 -8.7% 103.4 93.7 +10.4%
Adjusted EBITDA (AL) 0.0 10.4 n/a 38.0 30.5 +24.6%
margin (%) 0.0% 12.6% -12.6pp 12.4% 9.7% +2.7pp
Total revenues from Telekom Romania Mobile amounted to €73.0mn in the
quarter, down 11.8% year on year, largely reflecting the impact of mobile
termination rate (MTR) reductions, as well as the contribution of certain MVNO
activities in Q4'21, phased out in the second half of 2022.
Mobile service revenues totaled €48.9mn, down 13.3%, due to the reduction in
MTR, as well as retention initiatives related to subsidy offerings. A further
reduction in Mobile Termination Rates of 27% was implemented early in 2023.
The total subscriber base recorded sharp growth in the quarter, reflecting
ongoing year-on-year increases in postpaid subscribers, up 6.9% in Q4'22, and
a significant increase in the prepaid base.
Other revenues were down 8.7%, mainly reflecting the termination of MVNO
activity.
Telekom Romania Mobile reported zero Adjusted EBITDA (AL) in the quarter on
declining revenues and certain adjustments. In full year 2022 EBITDA recorded
a solid increase of 24.6% to €38.0mn.
SIGNIFICANT EVENTS OF THE QUARTER
Spin-off of Facility and Space Management Business Sector
The Extraordinary General Meetings of Shareholders of OTE and COSMOTE of
November 1, 2022, approved the Draft Demerger Agreement through Spin-off of
the business sector Facility and Space Management and its absorption by the
OTE Group 100% subsidiary, OTE Estate Société Anonyme. The spin-offs were
consummated on December 1, 2022.
Share Buyback Program and Cancellation of Own Shares
The Extraordinary General Meeting of Shareholders of January 18, 2022,
approved a new Share Buyback Program for a period of 24 months. During the
first year of the Program the Company acquired 15,440,064 own shares at an
average price of €16.22 per share. Out of these shares, 1,868,242 own
shares, acquired during the period from February 24, 2022, to March 31, 2022,
were cancelled and delisted on July 12, 2022 and 8,818,730 own shares,
acquired during the period from April 1, 2022, to September 30, 2022, were
cancelled and delisted on November 29, 2022. As of December 31, 2022, the
company holds the remaining 4,753,092 own shares acquired from October 1,
2022, to December 07, 2022, date on which the purchases were completed.
SUBSEQUENT EVENTS
Merger of OTE Globe and OTE
Οn January 2, 2023, the merger procedure by absorption of 100% subsidiary
company OTE GLOBE by its parent company OTE SA, was concluded.
Shareholder Remuneration Policy
On February 22, 2023, the Board of Directors of OTE revised its Shareholder
Remuneration Policy. (#SHRP)
About OTE
OTE Group is the largest telecommunications provider in the Greek market and
offers mobile telecommunications services in Romania. OTE is among the largest
listed companies, with respect to market capitalization, in the Athens Stock
Exchange.
OTE Group offers the full range of telecommunications services: from
fixed-line and mobile telephony, broadband services, to pay television and ICT
solutions. In addition to its core activities, the Group is also involved in
electronic payments, delivery services, maritime communications, real estate,
insurance distribution and professional training.
Additional Information is also available on: https://www.cosmote.gr
(https://www.cosmote.gr)
Conference Call Details
Thursday, February 23, 2023
5:00pm (EEST), 3:00pm (BST), 4:00pm (CEST), 10:00am (EDT)
Greece
+30 210 9460 800
Germany
+49 (0) 69 2222 4493
UK & International
+ 44 (0) 203 059 5872
USA
+1 516 447 5632
We recommend that you call any of the above numbers 5 to 10 minutes before the
conference call is scheduled to start.
Webcast Details
The conference call will be webcast and you may join by linking at:
https://87399.themediaframe.eu/links/otegroup230223.html
(https://87399.themediaframe.eu/links/otegroup230223.html)
If you experience difficulty, please call + 30 210 9460803.
Contacts:
Evrikos Sarsentis - Head of
Mergers, Acquisitions and Investor Relations
Tel: +30 210 611 1574, Email:
esarsentis@ote.gr (mailto:esarsentis@ote.gr)
Sofia Ziavra - Deputy Director, Investor
Relations
Tel: + 30 210 617 7628, Email:
sziavra@ote.gr
Elena Boua - Manager
Shareholder Services, Investor Relations
Tel: + 30 210 611 7364, Email:
eboua@ote.gr
Forward-looking Disclaimer:
Certain statements in this document constitute forward-looking statements.
Such forward looking statements are subject to risks and uncertainties that
may cause actual results to differ materially. These risks and uncertainties
include, among other factors, changing economic, financial, business or other
market conditions. OTE will not update such statements on a regular basis. As
a result, you are cautioned not to place any reliance on such forward-looking
statements. Nothing in this document should be construed as a profit forecast
and no representation is made that any of these statement or forecasts will
come to pass. Persons receiving this announcement should not place undue
reliance on forward-looking statements and are advised to make their own
independent analysis and determination with respect to the forecast periods,
which reflect the Group's view only as of the date hereof.
Exhibits to follow:
I. Alternative Performance Measures "APMs"
II. Consolidated Statements of Financial Position as of December 31,
2022 and December 31, 2021
III. Consolidated Income Statements for the quarter and full year
ended December 31, 2022 and comparative 2021
IV. Group Revenues for the quarter and full year ended December 31,
2022 and comparative 2021
V. Consolidated Statement of Cash Flows for the quarter and full
year ended December 31, 2022 and comparative 2021
Changes in accounting policies and changes in reporting structure
Gross vs. Net Disclosure - Change in principal/agent position.
The Income Statements for OTE Group, Greece, OTE SA and GR Mobile have been
impacted by the new accounting policy regarding the principal vs agent
assessment especially in relation to digital branded products from other
providers.
More specifically based on the decision of the IFRS Interpretations Committee
published in May 2022 on the cases of software reselling, OTE Group has
revised its current accounting policy with regard to the distinction between
gross and net revenue and changed it at the beginning of the third quarter of
2022. As a result of this change in method, OTE Group only sees itself as the
principal and thus recognizes gross revenue only, in cases in which the
customer does not enter into any contractual relationship with the third-party
supplier and the Group has the control over the specific good or service (is
primarily responsible for product acceptance and the customer support) and is
able to price the customer. Compared to the previous accounting policy, this
leads to a decrease in revenue and operating expenses of €29.5mn each for
the full year of 2022 and €32.0mn for the full year of 2021. All prior
periods have been restated accordingly to conform to this presentation.
I. ALTERNATIVE PERFORMANCE MEASURES "APMs"
The Group uses certain Alternative Performance Measures ("APMs") in making
financial, operating and planning decisions as well as in evaluating and
reporting its performance. APMs provide additional insights and understanding
to the Group's underlying performance, financial condition and cash flow. APMs
and the respective adjusted measures are calculated by using the directly
reconcilable amounts from Financial Statements of the Group and the below
items as well, that due to their nature impacting comparability. As these
costs or payments are of significant size and of irregular timing, it is a
common industry practice to be excluded for the calculation of the APMs and
the adjusted figures in order to facilitate comparability with industry peers
and facilitate the user to obtain a better understanding of the Group's
performance achieved from ongoing activity. The APMs should be read in
conjunction with and do not replace by any means the directly reconcilable
IFRS line items.
1. Costs or payments related to Voluntary Leave Schemes
Costs or payments related to Voluntary Leave Schemes comprise the exit
incentives provided to employees and the contributions to the social security
fund to exit/retire employees before conventional retirement age. These costs
are included within the income statement as well as within the cash flow
statement lines "costs related to voluntary leave schemes" and "payment for
voluntary leave schemes", respectively.
2. Costs or payments related to other restructuring plans
Other restructuring costs comprise non-ongoing activity related costs arising
from significant changes in the way the Group conducts business. These costs
are mainly related to the Group's portfolio management restructuring.
3. Spectrum acquisition payments
Spectrum payments comprise the amounts paid to acquire rights (licenses)
through auctions run by the National Regulator to transmit signals over
specific bands of the electromagnetic spectrum.
Definitions and reconciliations of Alternative Performance Measures ("APMs")
Net Debt
Net Debt is used to evaluate the Group's capital structure and leverage. Net
Debt is defined as short-term borrowings plus long-term borrowings plus
short-term portion of long-term borrowings plus other financial liabilities
less cash and cash equivalents. Following the adoption of IFRS 16 financial
liabilities related to leases are included in the calculation of net debt from
2019 onwards.
OTE Group - Amounts in € mn 31/12/2022 31/12/2021
Long-term borrowings 881.5 753.7
Short-term portion of long-term borrowings 23.1 397.3
Short-term borrowings 150.0 -
Lease liabilities (long-term portion) 182.1 189.2
Lease liabilities (short-term portion) 76.1 71.7
Financial liabilities related to wallets 4.0 -
Cash and cash equivalents (590.1) (630.7)
Net Debt 726.7 781.2
EBITDA - Adjusted EBITDA - Adjusted EBITDA After Lease (AL)
· EBITDA is derived directly from the Financial Statements of the Group,
line "Operating profit before financial and investing activities,
depreciation, amortization and impairment" of the Income Statement. EBITDA is
defined as total revenues plus other operating income less total operating
expenses before depreciation, amortization and impairment. EBITDA is intended
to provide useful information to analyze the Group's operating performance.
· Adjusted EBITDA is calculated by excluding the impact of costs related
to voluntary leave schemes (#VES) and other restructuring costs. (#OTHER)
· Adjusted EBITDA After Lease (AL): Following the adoption of IFRS 16
related to leases, it is a common industry practice to use the EBITDA After
Lease (AL) or Adjusted EBITDA After Lease (AL) in order to facilitate
comparability with industry peers and historical comparison as well. Adjusted
EBITDA (AL) is defined as Adjusted EBITDA deducting the depreciation and
interest expense related to leases.
EBITDA, Adjusted EBITDA and Adjusted EBITDA (AL) margin (%) is defined as the
respective EBITDA divided by total revenues.
Quarterly (€mn) OTE GROUP GREECE ROMANIA
Q4 '22 Q4 '21 Q4 '22 Q4 '21 Q4 '22 Q4 '21
Revenues 885.4 875.4 813.9 796.4 73.0 82.8
Other Operating Income 3.1 3.2 1.7 1.9 1.4 1.3
Total Operating Expenses (ex-Depreciation, amortization and impairment) (545.2) (552.3) (477.8) (487.4) (68.9) (68.7)
EBITDA 343.3 326.3 337.8 310.9 5.5 15.4
margin % 38.8% 37.3% 41.5% 39.0% 7.5% 18.6%
Costs related to voluntary leave schemes 4.2 6.0 4.2 5.5 - 0.5
Other restructuring costs 5.2 20.6 5.2 20.2 - 0.4
Adjusted EBITDA 352.7 352.9 347.2 336.6 5.5 16.3
margin % 39.8% 40.3% 42.7% 42.3% 7.5% 19.7%
Depreciation of lessee use rights to leased assets (18.7) (18.3) (13.8) (12.8) (4.9) (5.5)
Interest expense on leases (2.2) (2.8) (1.6) (2.4) (0.6) (0.4)
Adjusted EBITDA (AL) 331.8 331.8 331.8 321.4 0.0 10.4
margin % 37.5% 37.9% 40.8% 40.4% 0.0% 12.6%
12 Months (€mn) OTE GROUP GREECE ROMANIA
12M'22 12M'21 12M'22 12M'21 12M'22 12M'21
Revenues 3,455.3 3,336.3 3,155.4 3,046.1 306.4 315.5
Other Operating Income 10.5 9.2 7.8 6.2 2.7 3.5
Total Operating Expenses (ex-Depreciation, amortization and impairment) (2,080.2) (1,865.6) (1,836.8) (1,619.8) (249.9) (271.5)
EBITDA 1,385.6 1,479.9 1,326.4 1,432.5 59.2 47.5
margin % 40.1% 44.4% 42.0% 47.0% 19.3% 15.1%
Costs related to voluntary leave schemes 39.4 (121.8) 38.7 (122.6) 0.7 0.8
Other restructuring costs 5.7 23.6 5.2 20.2 0.5 3.4
Adjusted EBITDA 1,430.7 1,381.7 1,370.3 1,330.1 60.4 51.7
margin % 41.4% 41.4% 43.4% 43.7% 19.7% 16.4%
Depreciation of lessee use rights to leased assets (74.0) (70.4) (53.5) (51.1) (20.5) (19.4)
Interest expense on leases (8.7) (15.4) (6.8) (13.6) (1.9) (1.8)
Adjusted EBITDA (AL) 1,348.0 1,295.9 1,310.0 1,265.4 38.0 30.5
margin % 39.0% 38.8% 41.5% 41.5% 12.4% 9.7%
Capital expenditure (Capex) and Adjusted Capex
Capital expenditure is derived directly from the Financial Statements of the
Group, line "Purchase of property, plant and equipment and intangible assets"
of the Cash Flow Statement. The Group uses Capex to ensure that the cash
spending is in line with its overall strategy for the use of cash. Adjusted
Capex is defined as Capex excluding spectrum payments (#SPECTRUM) .
OTE Group - Amounts in € mn Q4'22 Q4'21 12M'22 12M'21
Purchase of property plant and equipment and intangible assets - Capex (199.4) (185.5) (639.5) (586.0)
Spectrum Payments - 25.0 1.2 27.0
Adjusted CAPEX (199.4) (160.5) (638.3) (559.0)
Free Cash Flow (FCF)- Free Cash Flow After Lease (AL) - Adjusted FCF After
Lease (AL)
· Free Cash Flow is defined as net cash flows from operating activities,
after payments for purchase of property plant and equipment and intangible
assets (Capex) and adding the interest received. Free Cash Flow After Lease
(AL) is defined as Free Cash Flow after lease repayments.
· Adjusted FCF After Lease (AL) facilitates comparability of Cash Flow
generation with industry peers and discussions with the investment analyst
community and debt rating agencies. It is calculated by excluding from the
Free Cash Flow After Lease (AL) spectrum payments, payments for voluntary
leave schemes and payments for other restructuring costs (#VES) .
FCF After Lease (AL) and Adjusted FCF After Lease (AL) are intended to measure
the cash generation from the Group's business activities while facilitate the
understanding the Group's cash generating performance as well as availability
for debt repayment, dividend distribution and own reserves.
OTE Group - Amounts in € mn Q4'22 Q4'21 12M'22 12M'21
Net cash flows from operating activities 359.2 307.5 1,317.2 1,224.2
Minus: Net cash flows from operating activities of discontinued operations - - - 86.7
Purchase of property, plant, equipment & intangible assets (199.4) (185.5) (639.5) (586.0)
Interest received 1.0 0.3 2.7 1.0
Free Cash Flow 160.8 122.3 680.4 552.5
Lease repayments (23.0) (21.7) (83.3) (70.0)
Free Cash Flow After Lease (AL) 137.8 100.6 597.1 482.5
Payment for voluntary leave schemes 9.6 4.7 45.6 56.3
Payment for other restructuring costs 5.2 18.4 10.3 24.3
Spectrum payments - 25.0 1.2 27.0
Adjusted Free Cash Flow After Lease (AL) 152.6 148.7 654.2 590.1
Adjusted Profit to owners of the parent
Adjusted Profit for the period attributable to owners of the parent is
intended to provide useful information to analyze the Group's net
profitability excluding the impact of significant non-recurring or irregularly
recorded items in order to facilitate comparability with previous ongoing
performance. For the respective period of 2022 and the comparable period of
2021, the impact of the following items were taken into account: costs related
to voluntary leave schemes, other restructuring costs, (gains)/losses from
disposal of subsidiary, net impact from impairments and write offs and the
effect of changes to income tax rate.
Amounts in € mn - After Tax impact Q4'22 Q4'21 12M'22 12M'21
Profit to owners of the Parent from continuing operations (reported) (7.8) 100.5 388.6 487.0
Costs related to voluntary leave schemes 3.3 4.7 30.8 (94.9)
Other restructuring costs 5.2 20.6 5.6 23.1
(Gains)/Losses from disposal of subsidiary - - (0.2) 50.9
Net Impact from Impairments and Write offs 115.9 - 115.9 -
Effect due to change in the income tax rates - - - 26.3
Adjusted Profit to owners of the parent 116.6 125.8 540.7 492.4
II. GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts in € mn 31/12/2022 31/12/2021
ASSETS
Non - current assets
Property, plant and equipment 2,081.1 2,080.3
Right-of-use assets 266.6 264.7
Goodwill 376.6 376.6
Telecommunication licenses 296.1 348.9
Other intangible assets 335.1 387.7
Investments 0.1 0.1
Loans to pension funds 64.7 68.6
Deferred tax assets 178.2 197.9
Contract costs 30.2 24.3
Other non-current assets 75.3 75.9
Total non - current assets 3,704.0 3,825.0
Current assets
Inventories 54.0 38.0
Trade receivables 471.2 504.4
Other financial assets 4.8 5.6
Contract assets 49.6 34.6
Other current assets 123.7 176.9
Restricted Cash 1.8 1.8
Cash and cash equivalents 590.1 630.7
Total current assets 1,295.2 1,392.0
TOTAL ASSETS 4,999.2 5,217.0
Amounts in € mn 31/12/2022 31/12/2021
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital 1,227.3 1,292.6
Share premium 438.9 462.6
Treasury shares (73.5) (157.1)
Statutory reserve 440.7 440.7
Foreign exchange and other reserves (138.8) (168.6)
Changes in non-controlling interests (3,314.1) (3,314.1)
Retained earnings 3,267.9 3,414.4
Total equity attributable to owners of the Parent 1,848.4 1,970.5
Non-controlling interests 0.5 1.7
Total equity 1,848.9 1,972.2
Non-current liabilities
Long-term borrowings 881.5 753.7
Provision for staff retirement indemnities 96.7 139.9
Provision for youth account 86.1 98.4
Contract liabilities 40.8 33.2
Lease liabilities 182.1 189.2
Deferred tax liabilities 0.4 3.3
Other non - current liabilities 55.7 89.3
Total non - current liabilities 1,343.3 1,307.0
Current liabilities
Trade accounts payable 874.0 818.5
Short-term borrowings 150.0 -
Short-term portion of long-term borrowings 23.1 397.3
Income tax payable 92.3 44.0
Contract liabilities 136.1 132.5
Lease liabilities 76.1 71.7
Dividends payable 2.4 2.3
Other current liabilities 453.0 471.5
Total current liabilities 1,807.0 1,937.8
TOTAL EQUITY AND LIABILITIES 4,999.2 5,217.0
III. GROUP CONSOLIDATED INCOME STATEMENT
Amounts in € mn Q4'22 Q4'21 +/- % 12M'22 12M'21 +/- %
Total revenues 885.4 875.4 +1.1% 3,455.3 3,336.3 +3.6%
Other operating income 3.1 3.2 -3.1% 10.5 9.2 +14.1%
Operating expenses
Interconnection and roaming costs (111.8) (123.0) -9.1% (442.7) (441.4) +0.3%
Provision for expected credit losses (9.0) (14.4) -37.5% (48.0) (67.6) -29.0%
Personnel costs (99.5) (95.3) +4.4% (442.3) (430.6) +2.7%
Costs related to voluntary leave schemes (4.2) (6.0) -30.0% (39.4) 121.8 -132.3%
Commission costs (23.8) (25.9) -8.1% (82.6) (85.0) -2.8%
Merchandise costs (108.3) (90.8) +19.3% (358.7) (311.3) +15.2%
Maintenance and repairs (18.9) (18.9) 0.0% (77.5) (74.1) +4.6%
Marketing (21.2) (20.8) +1.9% (69.9) (66.0) +5.9%
Other operating expenses (148.5) (157.2) -5.5% (519.1) (511.4) +1.5%
Total operating expenses before depreciation, amortization and impairment (545.2) (552.3) -1.3% (2,080.2) (1,865.6) +11.5%
Operating profit before financial and investing activities, depreciation, 343.3 326.3 +5.2% 1,385.6 1,479.9 -6.4%
amortization and impairment
Depreciation, amortization and impairment (292.3) (174.9) +67.1% (795.1) (667.6) +19.1%
Operating profit before financial and investing activities 51.0 151.4 -66.3% 590.5 812.3 -27.3%
Income and expense from financial and investing activities
Interest and related expenses (14.8) (10.0) +48.0% (39.9) (45.0) -11.3%
Interest income 1.0 0.3 - 2.7 1.0 +170.0%
Foreign exchange differences, net (4.0) 1.2 - 1.6 1.5 +6.7%
Gains / (losses) from investments and other financial assets - Impairment 0.2 0.1 +100.0% - (50.4) -
Total loss from financial and investing activities (17.6) (8.4) +109.5% (35.6) (92.9) -61.7%
Profit before tax 33.4 143.0 -76.6% 554.9 719.4 -22.9%
Income tax (41.3) (42.4) -2.6% (166.2) (233.6) -28.9%
Profit for the period from continuing operations (7.9) 100.6 -107.9% 388.7 485.8 -20.0%
Profit from discontinued operations - - - - 103.9 -
Profit for the period (7.9) 100.6 -107.9% 388.7 589.7 -34.1%
Attributable to:
Owners of the parent (7.8) 100.5 -107.8% 388.6 557.6 -30.3%
Profit from continuing operations (7.8) 100.5 -107.8% 388.6 487.0 -20.2%
Profit from discontinued operations - - - - 70.6 -
Non-controlling interests (0.1) 0.1 - 0.1 32.1 -99.7%
IV. GROUP REVENUES
Amounts in € mn Q4'22 Q4'21 % 12M'22 12M'21 %
Fixed business:
Retail services revenues 227.3 240.5 -5.5% 933.4 950.8 -1.8%
Wholesale services revenues 150.1 158.5 -5.3% 590.2 585.3 +0.8%
Other revenues 112.1 80.0 +40.1% 342.6 270.0 +26.9%
Total revenues from fixed business 489.5 479.0 +2.2% 1,866.2 1,806.1 +3.3%
Mobile business:
Service revenues 288.2 288.6 -0.1% 1,189.0 1,164.1 +2.1%
Handset revenues 80.5 77.3 +4.1% 283.8 270.1 +5.1%
Other revenues 5.4 10.3 -47.6% 29.6 24.3 +21.8%
Total revenues from mobile business 374.1 376.2 -0.6% 1,502.4 1,458.5 +3.0%
Miscellaneous other revenues 21.8 20.2 +7.9% 86.7 71.7 +20.9%
Total revenues 885.4 875.4 +1.1% 3,455.3 3,336.3 +3.6%
V. GROUP CONSOLIDATED STATEMENT OF CASH FLOW
Amounts in € mn Q4'22 Q4'21 % 12M'22 12M'21 %
Cash flows from operating activities
Profit before tax 33.4 143.0 -76.6% 554.9 719.4 -22.9%
Adjustments for:
Depreciation, amortization and impairment 292.3 174.9 +67.1% 795.1 667.6 +19.1%
Costs related to voluntary leave schemes 4.2 6.0 -30.0% 39.4 (121.8) -132.3%
Provision for staff retirement indemnities 0.9 (8.2) -111.0% 3.9 (5.0) -178.0%
Provision for youth account (1.8) (2.6) -30.8% (0.9) (1.7) -47.1%
Foreign exchange differences, net 4.0 (1.2) - (1.6) (1.5) +6.7%
Interest income (1.0) (0.3) - (2.7) (1.0) +170.0%
(Gains) / losses from investments and other financial assets- Impairment (0.2) (0.1) +100.0% - 50.4 -
Interest and related expenses 14.8 10.0 +48.0% 39.9 45.0 -11.3%
Working capital adjustments: 58.9 63.2 -6.8% 48.3 11.3 -
Decrease / (increase) in inventories (6.9) 1.5 - (16.0) (11.3) +41.6%
Decrease / (increase) in receivables 49.2 (24.4) - 18.7 (66.6) -128.1%
(Decrease) / increase in liabilities (except borrowings) 16.6 86.1 -80.7% 45.6 89.2 -48.9%
Payment for voluntary leave schemes (9.6) (4.7) +104.3% (45.6) (56.3) -19.0%
Payment of staff retirement indemnities and youth (2.4) (2.8) -14.3% (9.2) (10.3) -10.7%
account, net of employees' contributions
Interest and related expenses paid (except leases) (1.7) (2.6) -34.6% (24.9) (27.7) -10.1%
Interest paid for leases (2.2) (2.8) -21.4% (8.7) (15.4) -43.5%
Income tax paid (30.4) (64.3) -52.7% (70.7) (115.5) -38.8%
Net cash flows from operating activities of discontinued operations - - - - 86.7 -
Net cash flows from operating activities 359.2 307.5 +16.8% 1,317.2 1,224.2 +7.6%
Cash flows from investing activities
Sale or maturity of financial assets - 0.2 - 0.7 0.3 +133.3%
Purchase of financial assets - - - (0.6) - -
Repayment of loans receivable 1.2 1.8 -33.3% 7.2 7.2 0.0%
Purchase of property, plant and equipment and intangible assets (199.4) (185.5) +7.5% (639.5) (586.0) +9.1%
Proceeds / (payments) related to disposal of subsidiaries / investments (0.5) (3.4) -85.3% (8.3) 288.3 -102.9%
Cash and cash equivalents of subsidiaries disposed - - - (0.7) (89.3) -99.2%
Movement in restricted cash (0.1) - - - 0.5 -
Interest received 1.0 0.3 - 2.7 1.0 +170.0%
Net cash flows from investing activities of discontinued operations - - - - (57.5) -
Net cash flows used in investing activities (197.8) (186.6) +6.0% (638.5) (435.5) +46.6%
Cash flows from financing activities
Acquisition of treasury shares (78.2) (78.3) -0.1% (293.6) (190.3) +54.3%
Subsidiary's share capital reduction to minority shareholders - - - (0.8) - -
Expenses related to subsidiary's share capital increase - - - (0.1) - -
Proceeds from loans - - - 300.0 350.0 -14.3%
Repayment of loans - (175.4) - (397.7) (404.4) -1.7%
Lease repayments (23.0) (21.7) +6.0% (83.3) (70.0) +19.0%
Financial liabilities related to wallets 4.0 - - 4.0 - -
Dividends paid to Company's owners - (113.3) - (249.9) (426.1) -41.4%
Net cash flows from financing activities of discontinued operations - - - - (5.7) -
Net cash flows used in financing activities (97.2) (388.7) -75.0% (721.4) (746.5) -3.4%
Net increase/(decrease) in cash & cash equivalents 64.2 (267.8) -124.0% (42.7) 42.2 -
Cash and cash equivalents, at the beginning of the period 523.7 898.5 -41.7% 630.7 516.2 +22.2%
Net foreign exchange differences 2.2 - - 2.1 (1.0) -
Cash and cash equivalents of disposal group classified as held for sale - - - - 73.3 -
Cash and cash equivalents, at the end of the period 590.1 630.7 -6.4% 590.1 630.7 -6.4%
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